Greetings on a lovely day in Utah!
Tuesday is my day off when I choose to take it, but with a rapidly approaching trip to NY in T-minus 7 days, I decided to help at the ranch and treat calves anyway. Can't claim martyr here, because I then spent midday following the vet and owner as they did pregnancy checks- then an hour or two visiting with our Pfizer Animal Health rep working out a game plan for preventing pink eye and salmonella in the youngstock population. Then the nutritionist stopped by for his weekly visit and we kicked around a few ideas to improve the feed mix for my 200-300 pound heifer calves.
Not a bad afternoon! Honestly, how many people thoroughly enjoy "working" on their day off? It's a perk of dairy farming.
There were two things that came up and got me thinking about a subject that we explored in my Young Dairy Leaders class- namely, that there is a significant difference between livestock and pets.
Point No. 1 came via a story my Pfizer rep shared about her kids, all under 10 years old, and the menagerie of livestock at home, including three orphaned piglets, a pygmy goat, chickens, cats, a dairy goat that lost her kid, a few dogs and a bunch of beef cattle. The rep shared with me how the dairy goat- acquired from a friend to supply milk for the orphaned pigs, (also acquired from a friend)- had "adopted" her husband, reaching the point that she came home last weekend to find her husband being followed around the yard by 4 kids, the dog, a couple cats and a goat.
She talked about how her kids love to play outside in the dirt and feed, are proud of their dad's job "doing AI (artificial insemination)" and are budding entrepreneurs- attempting to sell eggs to every visitor to the homestead, and negotiating terms to borrow a neighbor's male goat to get their pygmy goat pregnant.
Her children have a true appreciation for livestock, hard work, and the rewards associated with both.
They help care for the dogs and cats as well as the pigs- recognizing that the pigs will be bacon in the freezer someday, and raising goat kids can help them save up money for a dirt bike- none the less caring and for them to the best of their ability.
Ultimately, these children recognize that there is a purpose for pets, and a purpose for livestock.
I'll be the first to admit that the lines can become blurred- my 12 year old cow Dee, is a pet. I've made management decisions regarding her care that would not be practical for a cow that wasn't one. She won't be sent for beef as most dairy cows are at the end of their productive life; not because I take issue with dairy cows being slaughtered for beef, but rather because she was never intended as anything besides a pet and cherished 4-H project.
Dee is my favorite, but I truly enjoy cows. I could lose an hour watching a row of Holsteins dig into fresh feed- so clearly content and enjoying the veritable feast provided for them twice daily. I find the same enjoyment watching my calves polish off a bottle of milk or hop around the hutch on a sunny, windy day.
I care for them obsessively- regarding their health and growth as the most honest indicator of my success as their manager. I take time to check on any calves that don't finish their bottles in the hutches, or appear to be withdrawn out in the pens after weaning. But they are not pets.
Which is point No. 2; demonstrated as we received word that a pen of milk cows had gotten out and were milling around the commodity shed and compost rows. No big deal, a number of employees, the owners, the nutritionist and I took off to herd the cows back into their corral. No yelling, no running, simply guiding the cows back to the correct area by blocking their access to the wrong paths.
It reminded me of the joy of trying to catch my Dee cow when she freed herself from a field in her younger days. There was running- she ran away from me, clear around the pond and into the woods! There was yelling- she got herself wedged between two small trees and had the audacity to look back at me implying I was responsible. There was no simple solution to Dee getting loose. I would compare it to the game my puppy plays when it's time to toss her into the back of the pickup and head to the ranch. She's going to end up in the truck but not before I chase her around the truck (and house, and trees).
Cows are happiest when they have a routine. When I show my dairy cattle, I need them to be used to being handled and easy to lead on a halter to ensure the safety of those working with them, and so they look their best. (Dee never subscribed to this theory) This requires a lot of time spent making that type of handling routine. For the calves I work with at the ranch- this type of handling will never be a part of their life. They will be allowed to spend their days eating, drinking and laying down at will; herded to the milking parlor three times a day and left to their herd mates otherwise. For these cows, it is sufficient that they are handled without undue roughness or noise- learning to view humans as nonthreatening- allowing them to be milked and otherwise handled without injury to dairy employees or to the cow herself.
There are certainly similarities- the needs of the cow are met and they live without fear, able to thrive and produce milk, but I wouldn't put one of my show cows into a corral at this dairy because they would follow the employees around trying to be petted, and I wouldn't put a halter on a cow at this dairy and expect her to lead like a dream around a show ring.
Pets are an extension of our family if you will, cared for to the best of our ability. Livestock like dairy cows also have all their needs provided for, but they were never intended to play fetch (Thanks A.Birch!) which makes them bad pets, but great animals to work with.
Welcome!
If you're going to know something about me, let it be this: I love cows.
I am also a proud participant in the dairy industry, and I think we have a great story to tell about our farm businesses, our animals, and our product (MILK!).
So welcome to the conversation; I'm devoted to dairy, and happy to answer any questions you may have.
I am also a proud participant in the dairy industry, and I think we have a great story to tell about our farm businesses, our animals, and our product (MILK!).
So welcome to the conversation; I'm devoted to dairy, and happy to answer any questions you may have.
Tuesday, April 3, 2012
Wednesday, March 28, 2012
Desert Spring and Calf Pneumonia
Greetings on a sunny, moderately windy day in Utah!
It’s rapidly becoming evident that winter is over, and although my New England-wizened self says there will likely be one more kick before winter calls it good, I think the worst is behind us.
As far as the calves are concerned, Spring in the west offers a few “exciting” changes, most notably, the wind. Going to school in Ithaca, I thought I knew a thing or two about “strong” winds- the kind that will blow you off a sidewalk and turn your umbrella (in Ithaca, you always carry an umbrella) inside out. Turns out, I knew nothing. 30 mph “breezes” are the norm in this town, and spring is typically the gustiest season- offering more than a couple 50+ mph windy days. The plus side is we presently have no mud to speak of at the calf ranch, and the flies (how there are flies already I do not know) can’t stick to anything long enough to be a real problem. The wind does however, have the nasty habit of tossing empty calf hutches around and kicking up serious dust.
The other springtime challenge is nothing new to anyone who’s ever raised calves- pneumonia. After all, it’s no big surprise that 30-40 degree temperature variance every 24 hours can wreak havoc on the immune system of a month-old calf.
I was fortunate to land on a dairy that has a great Pfizer Animal Health drug rep who was able to hook us up with a vaccine that we spray up the calves’ nose before they come over to the calf ranch, followed by a booster dose at 5 weeks old. This stuff is awesome! No needles = happier calves; reduced incidence of pneumonia = happier calf manager!
In a perfect world the vaccine would work 100% of the time on 100% of my calves, but… perfection is in short supply, so I feed a supplemental grain pellet containing a low dose of antibiotic that is mixed into the regular calf grain. The antibiotics bolster the calves, providing extra protection during the cold-wet-wild temperature times of the year. Again, in the imperfect world, some calves are slow to start eating grain and therefore don’t get the preventative dose, so we inevitably have a few calves each week that will show signs of pneumonia.
As part of my typical day, I walk through each row of calf hutches, quickly monitoring the behavior of each calf, their bedding and their grain and water consumption. The benefit of the daily check means I catch sick calves before disease or injury is able to get out of hand. In the case of pneumonia, I look for a depressed calf with rapid breathing and/or a temperature of 102.5 degrees or higher. (100.5-101.5 is normal for those of you who might not have been on a dairy quiz bowl team in your youth J) As I identify these calves, I treat them with a one dose antibiotic of which I have become a huge fan. This stuff really works; it’s specifically designed to aggressively treat pneumonia in calves, so one dose given early into pneumonia onset has an extremely high efficacy rate- which means my calves feel better faster and continue eating and growing as usual. Even more importantly, it means I seldom have a calf that doesn’t recover fully and must be culled from the herd.
The cow lover in me very much appreciates that particular aspect, as selling or euthanizing calves that can’t get better, or just never fully recover, is by far the worst part of my job. Like most dairy farmers I know, I watch over all 600 of my current charges (in hutches) with attention that borders on obsession. I’ll do anything within reason to keep my calves healthy- and not just because calves that have to leave the herd represent an economic loss to the dairy farm. It’s actually because I hate to see a calf that starts out perfect at birth, suffer and be wasted due to something we didn’t do well enough. As such, most of my time is spent focusing on preventative measures, such as the vaccine and antibiotic feed additive, as well as optimizing calf nutrition and ensuring the cleanliness of everything the calf comes into contact with. It’s not the easiest way to raise calves, but doing things the right way doesn’t always mean doing them the easy way. If they could, I’m sure my calves would agree. I take their good health and rapid growth to be a resounding “we approve”.
So the desert spring can bring on the wind- I picked up a new windbreaker and I’m learning how to place calf hutches so they won’t blow away. The threat of pneumonia I could do without, but at least I’ve prepared the calves and ready to respond when prevention isn’t quite enough!
Wednesday, March 21, 2012
Factory Farm? (part 2)
Good Morning all!
It's taken me a little longer than expected to get my thoughts together on the second part of the factory farm topic I started last week... but here it is.
It's taken me a little longer than expected to get my thoughts together on the second part of the factory farm topic I started last week... but here it is.
First, I have a disclaimer: I don't condone animal abuse in any form, least of all to dairy cows. It is not my intent to sugar coat how we manage cows, and please do not take my arguments as defense of mistreatment of animals. If you need reason to support that claim, review my first couple posts to learn how my involvement in the dairy industry began. (SparkNotes version: 7 year old kid visits a farm and gets irrevocably hooked on big brown cows. 11 years of 4-H, a degree in dairy science, a small farm and several states later, I still own and show cows and now generate my livelihood from the dairy industry.) And I still <3 cows.
So... to the topic of the “ag-gag” bill passed in Iowa and up for referendum in several other states: I have very mixed emotions.
On one hand, as manager of the calf raising part of the large dairy here, I recognize that I can’t see what my employees are doing at all times. I train them to care for and work with the calves, I monitor how they perform, communicate when I see room for improvement, and retrain as needed- I have faith that my employees are handling calves as I (cow lover) would. However, I’m not watching them 24/7, and it would be beyond upsetting to find out my trusted employees were mistreating calves (I have faith this isn’t the case) via a youtube video.
Further, it’s no secret that undercover animal rights vegan activists will bate employees into poor behavior and gather months of footage to have enough for a few minutes of incriminating video. It doesn’t excuse mistreatment, but recognize that what you’re watching has been carefully crafted to elicit an emotional response that will lead you to send them money and cut meat and milk from your diet.
With that in mind, I think it’s fair for animal farmers to seek protection from malicious activists with a vegan agenda and the intent of destroying our ability to earn a living feeding a hungry world population.
On the other hand, we are living in a society that demands transparency. I feel confident inviting strangers to my farm at home, and my employers regularly host farm tours for neighbors, politicians and local school groups. Its remarkable how many people have left after visiting this “factory farm” (please read part 1) feeling really good about how the animals are handled and where their milk comes from! So slamming the door shut on undercover footage sends out the message we might have something to hide. The dairy industry has a responsibility to regulate itself, and we do- look up the FARM program sometime (Farmers Assuring Responsible Management).
So, should we allow vegan activists access to our farms, knowing they are there solely to target us as cruel and unnecessary regardless of how well run the farm? C'mon people, we’re not dealing with a rogue vegan here- HSUS, Farm Sanctuary and the like are smart, organized businesses with deep pockets and a lot of research on what images and words will best get under your skin.
I can guess what you’re thinking… cruelty is cruelty and the videos find it.
This point is my final piece to this issue and the one I find most troubling.Since less than 1% of the population works on a farm, most people have no basis for understanding what goes on at one (same could be said for my knowledge of a restaurant or bank). Note, owning pets doesn’t count- cats and dogs are friends, not food. Back when more Americans had a personal connection to farms raising animals, farms were much smaller and more numerous. In the past 50 years or so, milk markets have been volitile, rural people have moved to cities and dairy farmers have learned a lot about how to better care for our cows- its simplifying things, but essentially a few big, enclosed barns went up, a lot of little red barns came down. A lot has changed that makes dairy farming look different than it used to be. This opens the door to interpretation of our new dairy farming methods- by hidden camera wearing activists who don’t think we have the right to raise animals to feed people.
For example, artificial insemination (AI), is the primary practice used to get cows pregnant in the US and Europe. It keeps our employees and cows safer than having several full grown bulls running around (think roughly the weight of a Prius and as unpredictable as having a 16 year old driving said Prius). It also allows us to pass only the best genetic traits along to each generation, and reduce genetic disorders. AI technology has been around since the 1970’s and technicians (yes, it’s actually a full time job for a lot of people) undergo specialized training and refresher courses to learn how to carefully get cows pregnant using AI. I (cow lover) see this as a good thing, and yet, what is targeted on the latest animal rights vegan activist undercover video… AI (of course?!?). And I’ll bet a lot of people watching the vegan agenda video thought, wow, poor cows. Would they would still think so after hearing why we use AI? I guess I don’t know. But I do know it’s a practice that I use on my own cows (yes, I took a class to learn how, and yes we wear long gloves) and they don’t seem to have held it against me over the last 10 years, nor are they any less healthy than if I turned them out to rendezvous with a bull.
Does this mean every aspect of good cattle management could be made to look cruel? It sure is easier for an animal rights vegan activist to tell you it’s bad and wrong when you don’t know about why I might use it for my cows…. which means dairy farmers have a lot of work to do and you really should find a farm to go visit.
here is a link to more than you ever wanted to know about artificial insemination for cattle
and here is a link to information on other things we do to take care of our cows
Wednesday, March 14, 2012
Factory Farm? (pt. 1)
Greetings on a beautiful day from Utah!
I hope the weather wherever you are is as nice as our early spring has been here- the calves and I are certainly enjoying the 60 degrees and sunshine dominating our weather pattern as of late! I even find as the nasty winter weather recedes, so too does the list of things to complain about; it's just harder to be in a bad mood when the sun is out! In spite of the sunshine-induced happiness, my good mood was dulled reading over the results to an impromptu "factory farm" search on Twitter this afternoon.
The negative banter from vegans and vegetarians condemning farms raising animals who are bound for the food supply was no big surprise, but the numerous "Gag order, why states are banning factory farm wistleblowers" did catch my attention. Several of the tweets linked to the articles below. I'll discuss them more in my next post, but take a look if you like.
http://www.good.is/post/gag-order-why-states-are-banning-factory-farm-whistleblowers/
http://www.washingtonpost.com/national/iowa-becomes-first-state-where-its-a-crime-to-lie-to-get-on-farm-to-record-animal-abuse/2012/03/02/gIQAv6wbnR_story.html
Same story, two different perspectives; both discussing the bill recently passed in Iowa that makes taking video and sound bites from a farm without the owner's permission, a punishable offence. Similar bills are up for consideration in other states including New York, Utah, Illinois, Minnesota and Indiana, and stem from the undercover videos released over the past couple years depicting animal abuse and neglect on "factory farms". I have numerous issues with these videos, which again, will come up next post. But clearly, I don't support animal abuse. I do want to make a point about the assault on large farms.
Just the term "factory farm" has been molded and twisted to imply negativity. I'm as much of an agriculture advocate as you'll find, and it sure isn't a warm and fuzzy term to me- funny because it wouldn't be a stretch for someone to say I work for one.
That's right, the dairy farm where I work would be the type targeted by those attacking "factory farms", predominantly because this dairy is large- milking over 2,500 cows, and housing more than 5,000 if you count the dry cows and calves.
But here's the thing... I'm EXTREMELY proud to be associated with this farm.
The dairy is family owned, just like 98% of all dairy farms in the US; and like many, it has undergone multiple transitions, changing it's shape and size to accommodate generational changes, advances in technology and evolving market trends. This dairy farm produces approximately 200,000 pounds (that's 23,250 gallons!) of super quality, nutritionally robust milk each day. This dairy farm supports more than 30 families from it's payroll, and pumps serious cash into businesses in the towns nearby. No doubt about it, it's a big dairy farm.
Our cows are kept in large open corrals- a novelty to this Northeasterner, where red barns and freestalls dominate the dairy scene- so you don't have to look hard to find cows being, well, cows. They walk to the milking parlor, they come back and eat, they interact with their herd mates, they drink, they lay down, they get up and eat again... all very normal and cow-like. They're also healthy, and not by accident; any dairymen worth their salt will tell you prevention is the name of the game, and these guys (like thousands from coast to coast) have serious focus on animal well being, and are constantly finding new ways to master the game.
So yeah, I guess size dictates that we will be called a factory farm... we care for a lot of cows which make a lot of milk that goes on to nourish a lot of people. But I hope the few notes above help you realize that being big isn't bad, nor does it make us better than my friends back East milking 60 cows in a totally different style. It's what has worked for this family and others like it to ensure this lifestyle can be passed to the next generation, and milk continues to be available to all us dairy-lovers out there. If that's factory farming... so be it. I love cows, and I'm proud to be raising calves, working for this large dairy.
In the next couple days I'll put together some thoughts on the actual bill that spurred all this talk of factory farms, but it's getting late and as always, the calves like their bottles of milk promptly by 6am.
I hope the weather wherever you are is as nice as our early spring has been here- the calves and I are certainly enjoying the 60 degrees and sunshine dominating our weather pattern as of late! I even find as the nasty winter weather recedes, so too does the list of things to complain about; it's just harder to be in a bad mood when the sun is out! In spite of the sunshine-induced happiness, my good mood was dulled reading over the results to an impromptu "factory farm" search on Twitter this afternoon.
The negative banter from vegans and vegetarians condemning farms raising animals who are bound for the food supply was no big surprise, but the numerous "Gag order, why states are banning factory farm wistleblowers" did catch my attention. Several of the tweets linked to the articles below. I'll discuss them more in my next post, but take a look if you like.
http://www.good.is/post/gag-order-why-states-are-banning-factory-farm-whistleblowers/
http://www.washingtonpost.com/national/iowa-becomes-first-state-where-its-a-crime-to-lie-to-get-on-farm-to-record-animal-abuse/2012/03/02/gIQAv6wbnR_story.html
Same story, two different perspectives; both discussing the bill recently passed in Iowa that makes taking video and sound bites from a farm without the owner's permission, a punishable offence. Similar bills are up for consideration in other states including New York, Utah, Illinois, Minnesota and Indiana, and stem from the undercover videos released over the past couple years depicting animal abuse and neglect on "factory farms". I have numerous issues with these videos, which again, will come up next post. But clearly, I don't support animal abuse. I do want to make a point about the assault on large farms.
Just the term "factory farm" has been molded and twisted to imply negativity. I'm as much of an agriculture advocate as you'll find, and it sure isn't a warm and fuzzy term to me- funny because it wouldn't be a stretch for someone to say I work for one.
That's right, the dairy farm where I work would be the type targeted by those attacking "factory farms", predominantly because this dairy is large- milking over 2,500 cows, and housing more than 5,000 if you count the dry cows and calves.
But here's the thing... I'm EXTREMELY proud to be associated with this farm.
The dairy is family owned, just like 98% of all dairy farms in the US; and like many, it has undergone multiple transitions, changing it's shape and size to accommodate generational changes, advances in technology and evolving market trends. This dairy farm produces approximately 200,000 pounds (that's 23,250 gallons!) of super quality, nutritionally robust milk each day. This dairy farm supports more than 30 families from it's payroll, and pumps serious cash into businesses in the towns nearby. No doubt about it, it's a big dairy farm.
Our cows are kept in large open corrals- a novelty to this Northeasterner, where red barns and freestalls dominate the dairy scene- so you don't have to look hard to find cows being, well, cows. They walk to the milking parlor, they come back and eat, they interact with their herd mates, they drink, they lay down, they get up and eat again... all very normal and cow-like. They're also healthy, and not by accident; any dairymen worth their salt will tell you prevention is the name of the game, and these guys (like thousands from coast to coast) have serious focus on animal well being, and are constantly finding new ways to master the game.
So yeah, I guess size dictates that we will be called a factory farm... we care for a lot of cows which make a lot of milk that goes on to nourish a lot of people. But I hope the few notes above help you realize that being big isn't bad, nor does it make us better than my friends back East milking 60 cows in a totally different style. It's what has worked for this family and others like it to ensure this lifestyle can be passed to the next generation, and milk continues to be available to all us dairy-lovers out there. If that's factory farming... so be it. I love cows, and I'm proud to be raising calves, working for this large dairy.
In the next couple days I'll put together some thoughts on the actual bill that spurred all this talk of factory farms, but it's getting late and as always, the calves like their bottles of milk promptly by 6am.
Tuesday, March 6, 2012
Motivated Back Into Action
Greetings from Utah! I just returned from the Young Dairy Leaders Institue- a dairy industry initiate designed to teach young dairy farmers and industry participants how to share our story about raising the cows that produce the dairy products we all love!
After a LONG hiatus, I'm so excited to share the crazy changes in my life since mid 2011. First you'll notice I'm writing from UTAH! and more interestingly perhaps, that I'm writing from a DAIRY FARM in Utah where I am temporarily managing a calf ranch for some fellow former New Englanders! It's a big change from my risk management position in NY and I'm loving it!
For my Northeast friends not familiar with western-style dairy farming, it's still all about raising and caring for cows to make milk, but think less little red barns and more open corrals- with the Rocky Mountains as a backdrop. Very cool.
My responsibilities here are focused on caring for the future of the dairy farm; the calves!
Here are a few fun facts:
We have, on average, about 600 calves in calf hutches any given day
We bring over 8-12 newborn calves from the dairy each day
We are raising both the heifers and bulls born at the dairy
About 2/3 of our calves are Holsteins, the rest are a cross of Jersey, Holstein and Swedish Red
Look for more info to follow as I show you how we raise and care for the calves, and a little more about my life here in Utah.
After a LONG hiatus, I'm so excited to share the crazy changes in my life since mid 2011. First you'll notice I'm writing from UTAH! and more interestingly perhaps, that I'm writing from a DAIRY FARM in Utah where I am temporarily managing a calf ranch for some fellow former New Englanders! It's a big change from my risk management position in NY and I'm loving it!
For my Northeast friends not familiar with western-style dairy farming, it's still all about raising and caring for cows to make milk, but think less little red barns and more open corrals- with the Rocky Mountains as a backdrop. Very cool.
My responsibilities here are focused on caring for the future of the dairy farm; the calves!
Here are a few fun facts:
We have, on average, about 600 calves in calf hutches any given day
We bring over 8-12 newborn calves from the dairy each day
We are raising both the heifers and bulls born at the dairy
About 2/3 of our calves are Holsteins, the rest are a cross of Jersey, Holstein and Swedish Red
Look for more info to follow as I show you how we raise and care for the calves, and a little more about my life here in Utah.
Wednesday, June 1, 2011
Crazy Milk
Despite my intentions to keep milk prices out of my conversation, I find this to be a good time to bring them up anyway as we are back in the realm of historically high futures prices and it's a lot more fun to talk about $20 milk than $12.
I realized shortly into my venture into risk management that good or bad, I was going to be stressed about milk prices despite the fact I don't milk cows for a living. Being as I started in 2009 and cut my teeth through months of the most devistating price cycle in history, I have spent considerable time trying to help dairy farmers manage through nasty prices, and stressing (to a lesser degree of course) right along with them. I grew up working on a dairy, sharing in the joys and challenges of that lifestyle; I have spent years in school studying the industry, building relationships with people devoted to dairy and making delicious, nutritious dairy products, and I while I may not technically milk cows, I'm still completely intertwined with milk markets. As a result of my ties to dairy and job working with forward contracting milk prices, I have spent considerable time watching the futures market and while I'm no expert, I have noticed a couple things.
First, futures markets are not to be confused for future price indicators. Make no mistake, futures are a way for people to make money and they spend a lot more time studying trends and fundamentals than your or me. As such, if there is a big secret to making money on milk futures, they would know it first.
Second, there is no big secret to making money on milk futures. I say this because I believe the markets work to tell you, based on things known and unknown at that time, expected future supply and demand relationships (prices). When the price is "good" to you, take advantage of the futures price. If you do this consistently, you will thoretically have a price that works for your business consistently. And like the saying goes, no one ever went broke making money. It's not about always beating the market, its about always having a price that keeps you in business.
Third, decide if you are speculating or striving for risk management. If you take a futures position (lock in a milk futures price) because you are convinced the market will go up or feel strongly it will go down, you are speculating. That's fine, just realize this is not the same as consistently protecting a price that works for your farm business.
Fourth, the milk price is affected by numerous factors domestically and internationally, and these will continue to drive the market crazy. It will create opportunities, such as $20 class III milk, which translates to $22-$25 to most of our Northeast farms- which we are currently enjoying- and it will create challenges, such as significant and unpredictable volatility.
I am thrilled to see prices so high because I know full well how badly farms need this price recovery. I do hope however, that farms will realize that markets will keep moving, and they have tools available to help them manage prices and the crazy ups and downs. We are not in traditional markets anymore, and risk management is a valid option for farms looking to add predictability to their milk check!
That's all from that particular soap box.
Til next time,
I realized shortly into my venture into risk management that good or bad, I was going to be stressed about milk prices despite the fact I don't milk cows for a living. Being as I started in 2009 and cut my teeth through months of the most devistating price cycle in history, I have spent considerable time trying to help dairy farmers manage through nasty prices, and stressing (to a lesser degree of course) right along with them. I grew up working on a dairy, sharing in the joys and challenges of that lifestyle; I have spent years in school studying the industry, building relationships with people devoted to dairy and making delicious, nutritious dairy products, and I while I may not technically milk cows, I'm still completely intertwined with milk markets. As a result of my ties to dairy and job working with forward contracting milk prices, I have spent considerable time watching the futures market and while I'm no expert, I have noticed a couple things.
First, futures markets are not to be confused for future price indicators. Make no mistake, futures are a way for people to make money and they spend a lot more time studying trends and fundamentals than your or me. As such, if there is a big secret to making money on milk futures, they would know it first.
Second, there is no big secret to making money on milk futures. I say this because I believe the markets work to tell you, based on things known and unknown at that time, expected future supply and demand relationships (prices). When the price is "good" to you, take advantage of the futures price. If you do this consistently, you will thoretically have a price that works for your business consistently. And like the saying goes, no one ever went broke making money. It's not about always beating the market, its about always having a price that keeps you in business.
Third, decide if you are speculating or striving for risk management. If you take a futures position (lock in a milk futures price) because you are convinced the market will go up or feel strongly it will go down, you are speculating. That's fine, just realize this is not the same as consistently protecting a price that works for your farm business.
Fourth, the milk price is affected by numerous factors domestically and internationally, and these will continue to drive the market crazy. It will create opportunities, such as $20 class III milk, which translates to $22-$25 to most of our Northeast farms- which we are currently enjoying- and it will create challenges, such as significant and unpredictable volatility.
I am thrilled to see prices so high because I know full well how badly farms need this price recovery. I do hope however, that farms will realize that markets will keep moving, and they have tools available to help them manage prices and the crazy ups and downs. We are not in traditional markets anymore, and risk management is a valid option for farms looking to add predictability to their milk check!
That's all from that particular soap box.
Til next time,
Thursday, May 5, 2011
Food for thought article
October 25, 2010 | By Louis P. Longo (Hoard's Dairyman)
Are Mega Operations a Threat To Family Farms?
ONE of the enjoyable things about retirement is that it gives me time to visit area dairy farms and chat with the owners regarding their operations and the dairy economy in general. Because, on occasion, I write articles for Hoard's Dairyman, they supply me with a lot of information and personal opinions, that otherwise might not be obtainable. They spare no words in expressing their opinion, good and bad, regarding my writings and other articles in Hoard's.
The price of milk and its cause always is a sore subject. Not realizing it, they are providing me much food for thought and writing. One issue in particular is the future of the so-called "family farm."In my conversations with the smaller dairy operations (250 cows or less), the subject of the large mega dairy operations nearly always come up. Most argue that these large operations are a threat to "family farms" and are the prime cause for surplus milk supplies and the low prices. As I view them, their arguments are not entirely based on fact. They argue that the family farm expands because of need while the mega farm operation expands because of greed, I do not agree.
The demise of the "family farm" over the past two or three decades was self-imposed ... not brought on by others. There have been great changes in farming technology such as free stall housing, milking parlors, computers, value-added markets, and so forth. All of these changes came up gradually, and some families did not adapt accordingly. Therefore, they could not survive the ever-changing dairy economy. The gradual changes in dairy farming technology bring up an old adage: "If you were to throw a frog into a pot of hot water, his reflexes are so great that he would jump out unharmed. However, if you were to take the same frog and place him in a kettle of cold water, and gradually increase the heat to a scalding point, you will kill the frog." So it was with the smaller operations. They found themselves in hot water when it was too late. Of course, high land values also played a big part.
What's a family farm?
In my conversations with these smaller farmers, they continually talked about the "family farm . . . the. family farm." How do you define a family farm? Is there a true definition of such an operation? Is it the size of the operation? Is it a farm that was handed down from generation to generation?
As I see it, there is no relation between size and a family farm operation. I know of a number of dairy operations that milk more than 1,000 cows that are, in effect, family operations. One in particular has well over 1,000 cows with four family members involved in the operation and ownership. They did not expand because of greed, they expanded as the family_ grew and came into the operation. The third generation now is the operators. Rightfully, they call themselves a "family farm," although they do have eight employees. I visited a ISO-cow operation which is run by father and son with two part-time helpers. They also regard their operation as a "family farm."
The label "family farm" in some ways gives a false impression to the nonfarm community. Consumers may visualize the family farm as a sacred operation where only family members do all the work. The "title" musters much compassion and sympathy from our city cousins when anyone threatens its well-being. The label "mega dairy farm" gives the impression of an existing monster, ready to eat up all family operations when, in effect, it itself is a family operation and not an individual milk price killer or small-farm destroyer.
Who can we blame when the price of milk is too low? Government programs? Mega farm operations? It is and always has been the economics of supply and demand. It is the same for any marketable product.
Contrary to what some may want to believe, the "mega farm" is not the only culprit, it's all milk producers in general. When commercial airlines have low consumer demand, what do they do? They reduce their flights. When the price of milk drops, what do many dairy farmers do? They add cows in trying to have adequate cash flow to the business. I did that when I was farming, and my operation was considered by all who visited as a family farm.
Finger pointing never has solved an economic problem. It only builds animosity and fosters lack of unity among our own people. Total cooperation among all dairy farmers is what is needed to balance supply with demand. Cooperative ownership of the surplus milk is by far the best way to balance supply with demand, and it cannot be accomplished with this "finger pointing" separatism that seems to exist.
As I pointed out in a previous article (March 10, 2010, page 188), the Yankee Milk Cooperative (now Agri-Mark) in 1973 owned partially all the surplus in the New England market and was successful in obtaining substantial over-order premiums. They amounted to more than $30 million to dairy farmers within 22 months. There was no finger pointing at that time ... it was a total unified accomplishment.
Getting back to the family farm ... I have my own definition. It is a farm, no matter how large or how small, where all ownership and a substantial amount of management is supplied by family members. I consider this a politically acceptable definition.
This type of farm is a very economically competitive entity with no fear of possible threats from large mega farm operations. Why? Because the cow is an individual creature that produces best when catered to. Most of these farms have a very low cull rate, relatively short calving intervals, and low calf mortality rates giving them the possibility for selling bred heifers. If drastic drops in milk prices were ever to occur, and the possibility does exist, the mega farm operations stand to lose more or even collapse whereas the family farm as I have described it will be more likely to survive under the worst economical condition. Here's why.
When a good bit of labor is family, the labor cost is actual income to the farm whereas the nonfamily farm's labor cost, workmen's compensation deduction, health, and other insurances are out-of-pocket costs. As I see it, those farms hold within themselves cost items for self destruction when a time of lasting economic disaster ever occurs. Family farms by far are the most competitive entities in farming.
The surplus milk problem must be dealt with by all, big and small alike. Total cooperation will be needed to be successful in balancing milk supplies. As I see it, dairy farmers are like the proverbial frog in the pot of cold water, and surplus milk is the fire that is gradually heating. The more the surplus, the greater the heat. Are you going to sit still and be ~ scalded or do something about put ting the fire out? The easy thing is to blame the big guys who are sitting in the kettle with you.
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