Dairy's Bottom Line January 2016

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Volume 18: Issue 1 January 2016 IN THIS ISSUE: Sharing ideas, solutions, resources and experiences that help dairy producers succeed. Professional Dairy Producers® I 1-800-947-7379 I www.pdpw.org BOTTOM LINE Admit it. Getting out of bed is easier when you are excited about what you do each day. In an industry where we all are faced with good days and bad, what inspires us to get up every morning and keep thriving for excellence? For me, the answer is three-fold – my family, my work cow- side and having my hands in the soil. I am both inspired and satisfied by hard work and seeing the fruits of my labor flourish as calves grow and our family works together to accomplish common goals. All my life I’ve wanted to be a dairy farmer. I remember following my dad around the barn, trying to literally walk in his footsteps, leaping from one step to the next. While dad and mom milked cows I tended to “my herd” using a pile of rope hauls to corral every calf in the pen. My pre- school years were spent hal- ter-training calves, providing “veterinary” care to farm cats and tagging along with dad. My passion for this great industry has grown through- out the years, and I’m happy to share that passion with my family and with my “brothers and sisters” in the industry. While being enthu- siastic is easy when every- thing runs smoothly, it takes deep-seeded passion to inspire us to overcome chal- lenges, beat the odds and outplay limitations. That inspiration makes us great. It fuels innovation and ambi- tion, and separates the aver- age from the outstanding. Fueling your passion There is a tiny photo on our refrigerator that inspires me — a picture that is faded and tattered from more than a decade of dis- play. It features our young- est son, Dylan, and me pos- ing with Sarah, his first show calf. The picture was taken when Dylan’s first- grade class toured our farm. For me that photo captures my “why” and the core of what inspires me: My love of family and farming. I love dairying and am inspired daily by my children, industry family and my love for the amazing dairy cow. As you welcome the New Year, I challenge you to picture what inspires you. Ask yourself “why” …and be honest about your motivation for each day. Inspiration comes from within … it fuels your drive, perseverance and greatness. Let’s welcome the New Year with enthusiasm and excitement for the days ahead! Think about your “why.” Define your success. Be inspired. Stay inspired. Shelly Mayer Professional Dairy Producers Be inspired, stay inspired Contributed Shelly Mayer with her youngest son, Dylan, poses many years ago with Sarah, his first show calf. Editorial....................................... 2 El Nino winter challenges ......... 4 Organic in Wisconsin ................ 5 Manage commodity margins ... 8 Protect dairy’s resources ....... 10 Teat health.................................12 Improve profits ........................ 14 Balance and expansion ............16 Millennials ................................ 18 Mastitis treatment .................. 19 Dairy robotics .......................... 20 Retirement planning ............... 22 Reproduction success ............ 24 Take a fresh look...................... 25 Oxidative stress ....................... 26 Volatile times .......................... 28 BMR corn and herd health...... 29 Trust .......................................... 30 Energy savings ..........................31

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Transcript of Dairy's Bottom Line January 2016

Page 1: Dairy's Bottom Line January 2016

Volume 18: Issue 1January 2016

IN THIS ISSUE:

Sharing ideas, solutions, resources and experiences that help dairy producers succeed.

Professional Dairy Producers® I 1-800-947-7379 I www.pdpw.org

Sharing ideas, solutions, resources and experiences that help dairy producers succeed.

B O T T O M L I N E

Admit it. Getting out of bed is easier when you are excited about what you do each day.

In an industry where we all are faced with good days and bad, what inspires us to get up every morning and keep thriving for excellence? For me, the answer is three-fold – my family, my work cow-side and having my hands in the soil. I am both inspired and satisfied by hard work and seeing the fruits of my labor fl ourish as calves grow and our family works together to accomplish common goals.

All my life I’ve wanted to be a dairy farmer. I remember following my dad around the barn, trying to literally walk in his footsteps, leaping from one step to the next. While dad and mom milked cows I tended to “my herd” using a pile of rope hauls to corral every calf in the pen. My pre-school years were spent hal-ter-training calves, providing “veterinary” care to farm cats and tagging along with dad.

My passion for this great industry has grown through-out the years, and I’m happy to share that passion with my family and with my “brothers and sisters” in the industry. While being enthu-siastic is easy when every-thing runs smoothly, it takes deep-seeded passion to inspire us to overcome chal-lenges, beat the odds and

outplay limitations. That inspiration makes us great. It fuels innovation and ambi-tion, and separates the aver-age from the outstanding.

Fueling your passionThere is a tiny photo on

o u r r e f r i g e ra t o r t h a t inspires me — a picture that is faded and tattered from more than a decade of dis-play. It features our young-est son, Dylan, and me pos-ing with Sarah, his first show calf. The picture was taken when Dylan’s first-grade class toured our farm. For me that photo captures my “why” and the core of what inspires me: My love

of family and farming.I love dairying and am

inspired daily by my children, industry family and my love for the amazing dairy cow. As you welcome the New Year, I challenge you to picture what inspires you. Ask yourself “why” …and be honest about your motivation for each day. Inspiration comes from within … it fuels your drive, perseverance and greatness.

Let’s welcome the New Year with enthusiasm and excitement for the days ahead! Think about your “why.” Defi ne your success.

Be inspired. Stay inspired. Shelly Mayer

Professional Dairy Producers

Be inspired, stay inspired

Contributed

Shelly Mayer with her youngest son, Dylan, poses many years ago with Sarah, his first show calf.

Editorial ....................................... 2

El Nino winter challenges ......... 4

Organic in Wisconsin ................ 5

Manage commodity margins ... 8

Protect dairy’s resources ....... 10

Teat health .................................12

Improve profits ........................ 14

Balance and expansion ............16

Millennials ................................ 18

Mastitis treatment .................. 19

Dairy robotics ..........................20

Retirement planning ............... 22

Reproduction success ............24

Take a fresh look ......................25

Oxidative stress .......................26

Volatile times ..........................28

BMR corn and herd health ......29

Trust ..........................................30

Energy savings ..........................31

Page 2: Dairy's Bottom Line January 2016

PDPW Board of Directors

President Mitch Breunig Sauk City, Wis. 608-643-6818

[email protected]

Vice President Marty Hallock Mondovi, Wis. 715-495-2812

[email protected]

Secretary Kay Zwald

Hammond, Wis. 715-796-5510

[email protected]

Treasurer Charlie Crave Waterloo, Wis. 920-478-3812

[email protected]

Directors Brian Forrest Stratford, Wis. 715-650-0267

[email protected]

Jay Heeg Colby, Wis. 715-507-0030

[email protected]

Jeremy Natzke Greenleaf, Wis. 920-371-1968

[email protected]

Dan Scheider Freeport, Ill. 815-821-4012

[email protected]

Linda White Reedsburg, Wis. 608-393-3985

[email protected]

PDPW Advisors Dr. Steve Kelm

University of Wisconsin-River Falls River Falls, Wis.

Steve Schwoerer Badgerland Financial Fond du Lac, Wis.

Dr. Richard Wallace Zoetis McFarland, Wis.

2 January 2016 • PDPW • Dairy’s Bottom Line

The Professional Dairy Pro-ducers Foundation has made a commitment to funding educa-tional programs and initiatives that grow the next generation of milkers, nutritionists, veteri-narians, accountants or whom-ever the dairy industry will need to help it thrive.

Knowledge is power and edu-cation is a powerful tool. The saying goes, “Give a man a fish and he eats for the day; teach a man to fish and he eats forever.”

Education takes many forms and takes many types of people. Learning may mean taking a class, but to the hands-on learner, a mentor experience might be a better fit.

Young people love the dairy-lab experiences and hands-on part of how and why. There are roles for all of us to play in grow-ing the next generation of dairy leaders. We all need to take a part.

Growing the next generation is the responsibility and height of professionalism in any indus-try. The future of the dairy com-munity will depend on attract-ing, developing and retaining young people. With new com-munication tools and technolo-gies, a need to grow young peo-ple will be essential to the suc-cess of the dairy industry.

Professional Dairy Producers Foundation is proud to support PDPW’s Youth Leadership Derby®, Mentor Program and Cornerstone Dairy Academy™. The Youth Leadership Derby and Mentor Program have served as models for programs

funded in New York, Indiana and Kansas to grow the next generation of dairy youth.

• Youth Leadership Derby: a fun, hands-on event that recruits youth ages 15 to 18 to explore career opportunities in the dairy industry.

• Mentor Program: exposes college students to dairy careers by pairing them with producer mentors to share real-world experiences on dairy farms.

• Cornerstone Dairy Acad-emy: trains dairy producers and industry professionals to com-municate, collaborate and lead more effectively.

Dairy producers control their own destinies to grow the next generation of dairy professions. It’s time to accept the challenge

and use existing talents to equip future partners with the skills they need to lead our industry and feed the world.

Future dairy producers have big shoes to fill and we need to be part of their education. Con-sider how an on-farm experi-ence might influence the future of a student.

Perhaps sponsoring a young person to an educational venue like Youth Leadership Derby or Cor-nerstone Dairy Academy could be a life-changing experience. As a dairy community, let us rise to the challenge and grow the next gen-eration of dairy professionals.

Deborah ReinhartProfessional Dairy Producers

Foundation, a mission sponsor of PDPW

We need to grow the next generation

Contributed

The Youth Leadership Derby is a fun, hands-on event that recruits youth ages 15 to 18 to explore career opportunities in the dairy industry.

According to the Pew Research Center, 65 percent of adults now use social networking sites – a 10-fold jump in the past decade.

During that time, the rise of social media has greatly affected work, politics, communication and people’s views on topics such as parenting, dating, health,

wellness and more. There’s no doubt that social networking is a powerful force that impacts the way people get information.

Now any industry can tap into online communities to impact public perception. This can be especially important for the agri-culture industry in a day and age

Farmer social media impacts perception

Dairy’s Bottom Line is published by PDPW in cooperation with Agri-View.

1901 Fish Hatchery Road Madison, Wisconsin 53713 Toll-Free: 888-247-4843

[email protected] www.agriview.com

EditorialManaging Editor Julie Belschner 608-219-8316

[email protected]

Advertising Sales Manager Tammy Strauss 608-250-4157

[email protected]

Page 3: Dairy's Bottom Line January 2016

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January 2016 • PDPW • Dairy’s Bottom Line 3

when farming is something for-eign to most Americans. Building an understanding of farming and having transparency to build trust is crucial. The way to do that is to be online.

Many farmers are already there. A recent study about how farmers use media found that 42 percent who use Facebook and Twitter are using it every day. Whether sharing photos and stories about how their farms are operated, making a personal connection with consumers or shedding light on important issues, farmers are starting to make their presence known online.

“Reaching consumers online is crucial today,” said Patrick Geoghegan, senior vice-presi-dent of communication for the Wisconsin Milk Marketing Board. “Consumers are savvy about where the products they use are from and will take the time to research online before they buy and form opinions.

When farmers have an online presence and share real and accurate information about the dairy industry, it helps reassure consumers that dairy producers are reputable and trustworthy.”

Carrie Mess works alongside her husband and his parents on their 100-cow dairy farm in southern Wisconsin. She’s

known on social media as “Dairy Carrie.” She uses her blog and other social-network-ing sites to discuss topics that are important and relevant to the dairy industry. With an impressive 10,000 Twitter fol-lowers at twitter.com/Dairy-Carrie and a 27,000-fan Face-book following at www.face-book.com/DairyCarrie she’s making a difference every day. She posts information about topics such as food-labeling claims and consumer milk options, shares other farmers’ stories, posts photos of her cows and gives people a sneak peek into her family and life on the farm.

Similarly, Heartwood Farm in Cobb, Wisconsin, showcases their dairy farm via their Face-book page at www.facebook.com/HeartwoodFarm – sharing photos and keeping consumers informed about what’s happen-ing on the farm.

“Social media is an open book

that gives us all the opportunity to share our stories,” Geoghegan said. “Your farm’s image should go far beyond your business name and logo – and social media is a great way to do that.”

With these examples and more, Wisconsin Milk Market-ing Board is seeing more and more dairy farmers taking to social media to share informa-tion about their farms and pro-mote consumer events like Breakfast on the Farm during June Dairy Month. The board’s Wisconsin dairy Facebook and Instagram accounts also cele-brate agriculture in America’s Dairyland.

“We encourage farmers to establish their own social media presence and engage with ours or other dairy networks by shar-ing content that spreads positive messages about the dairy indus-try,” Geoghegan said.

Wisconsin Milk Marketing Board, a

mission sponsor of PDPW

Page 4: Dairy's Bottom Line January 2016

4 January 2016 • PDPW • Dairy’s Bottom Line

We have all been hearing about the upcoming El Niño winter for months, and although it sometimes seems that the local weather report can be a bit inflated, the El Niño effect is already coming true with warmer temperatures in the East and cold, wet weather in the West.

As you continue to make preparations for the winter months, such as adding addi-tional bedding, closing curtains and putting jackets on your calves, it’s important to remem-ber the potential impact of changing weather on udder health.

The anticipation of a wet win-ter is certainly something to pre-pare for now. Ensure you are regularly cleaning pens and beds, adding dry bedding, scrap-ing cement lanes and keeping fresh feed in front of your cows as they return from the milk barn.

In the milk barn, review your milking routine procedures with employees and stress the impor-tance of following a routine. To have good employee compliance it is important to explain the “why” behind what you are ask-ing them to do.

Communicate to employees that cows will learn the routine and let down their milk more easily if they have a consistent experience each time they come into the milk barn – ultimately, making the employee’s job eas-ier. Also ensure that your employees have the equipment they need to fulfill your expecta-tions of good milk quality. Are there enough towels for one towel per cow? Do the milkers need new pocketed aprons to hold clean and dirty towels? Are the sprayers or foaming cups working properly? Are the washing machines and dryers working?

During the wet winter months, coliform mastitis is of concern. This winter will be especially challenging for the

West as they see rain for the first winter in years and for the East as they have a milder winter with more rain than snow. Prevention is key regarding coliform masti-tis because it is a costly disease; treating cows with severe clinical cases is difficult. Coliform mas-titis can lead to increased ani-mals in the hospital, decreased milk production, chronic-mas-titis cows, increased culling and even death.

Vaccination is an additional tool to be added to your checklist for udder health. J5 Escherichia coli strain technology prevents coliform mastitis and reduces severity of clinical signs of

coliform mastitis. The subcuta-neous vaccine ensures you can meet your beef quality standards for heifers and cows.

The flexible three-dosing schedule also allows you to time the administration of vaccine with your management schedule

Jane Fyksen/Agri-View

Contented cows like this pair in north-central Wisconsin mean milk is being made. Green grass in December means El Nino is strong this year.

During a wet winter be sure to regularly clean pens and beds, add dry bedding, scrape cement lanes and keep fresh feed in front of cows.

El Niño winter challenges milk quality

Page 5: Dairy's Bottom Line January 2016

and with the cow’s immune system to best prevent her from becoming a clinical case.

We know you have invested a lot in ensuring a cow or heifer is pregnant and often other vac-cines are given in conjunction with a coliform mastitis vac-cine. You can feel confident in your decision to administer vaccine to your animals because endotoxin levels are measured and printed on every bottle. Additional doses of vaccine can

be given during the lactation after the cow is through her ini-tial immunosuppression of transition. Work with a veteri-narian to develop a vaccine pro-tocol that fits the needs of your operation.

As we enter a wet El Niño year, cows will have an increased environmental challenge of coli-form bacteria, potentially caus-ing a decrease in milk quality. Prevention is key for udder health. Maintain the environ-ment as best you can, re-train employees and vaccinate.

Dr. Liz Cox Merck Animal Health,

a corporate sponsor of PDPW

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Wisconsin continues to be one of the most vibrant states in the country when it comes to organic agriculture. The U.S. Department of Agricul-ture has released the results of its 2014 Organic Survey, which is said to be one of the most comprehensive studies on organic farming in the his-tory of the agency.

The report says the Badger State is home to about 9 per-cent of the nation’s organic farms, in which 1,228 opera-tions grew crops on 228,605 organic acres in 2014. Over-all, the state ranks second nationally for organic pro-duction, just behind Califor-nia. The average production expenses per farm in Wis-consin were $111,226, com-pared with the U.S. average

of $280,722.As of last fall, Wisconsin

organic producers had 25,758 dairy cows on hand on 429 farms. Organic cow-milk production also increased 9 percent from six years ear-lier. Wholesale market sales accounted for 85 percent of the sales from the state’s organic farms, with consum-er-direct sales accounting for 10 percent.

Besides dairy, the USDA stated about 61 percent of the nation’s organic cranber-ries were grown in Wiscon-sin. Organic blueberry and s t r a w b e r r y s a l e s a l s o increased from 2008, by 179 and 43 percent, respectively.

Pat SternitzkyUSAgNet, a corporate

sponsor of PDPW

Wisconsin ranks 2nd for organic

Contributed

Organic cow-milk production is increasing — 9 percent increase compared to six years earlier.

El Niño Continued from page 4

January 2016 • PDPW • Dairy’s Bottom Line 5

Page 6: Dairy's Bottom Line January 2016

6 January 2016 • PDPW • Dairy’s Bottom Line

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Page 7: Dairy's Bottom Line January 2016

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Page 8: Dairy's Bottom Line January 2016

8 January 2016 • PDPW • Dairy’s Bottom Line

During the past several years, dairy producers have received a steady diet of presentations, magazine articles and discus-sions focusing on dairy margins. Dairy managers have been encouraged to know their mar-gins, model their margins, own their margins, view their margins and manage their margins for-ward in time.

This attention to dairy-profit margins is the product of the financially devastating impact of the combined milk and feed-price volatility of recent years like 2009 and 2012. The U.S. dairy producer has dodged the bullet in 2015 while international produc-ers realized prices and profits at near-record lows.

No one can be certain what 2016 holds for U.S. dairy produc-ers. There are many unanswered questions in the global dairy supply-and-demand balance, and there is considerable risk that the world’s dairy-price problems could become ours.

What should be done with commodity-price risk in this environment? Start with the basics. Take steps to manage your margins.

Dairy Net Margin defined: the result of all dairy

revenue minus all dairy expenses, not solely the difference between milk

price and feed cost.As dairy producers fully

appreciate their role as commod-ity processors — that is process-ing a number of commodities such as feed into another com-modity, milk – they must recog-nize the financial-management practices that are required for their success. Ethanol producers, cattle feedlots, hog finishers and soybean processors have had to become commodity-margin

focused in the current volatile commodity-price environment to avoid financial hardship.

The commodity processors that have applied structured commodity-margin risk man-agement have realized more sustainable earnings during extreme margin-volatility peri-ods. These participants have employed models that project revenue and expenses forward six to 18 months.

All marketing and risk-man-agement positions are rolled into the model to generate a forward view of net margin. Such a model is complete when all commodi-ties and market positions involved are “marked to the mar-ket” everyday with current

live-market prices.This dynamic view of the

commodity processor’s margin allows them to know it, own it and manage it. Dairy managers should also apply this financial approach to producing milk.

All dairy managers and com-modity processors have been offered various tools for manag-ing the margin of their process-ing enterprise. The following approaches represent mar-gin-management methods to be considered by financially focused dairy managers.

• Margin Protection Pro-g ra m : T h i s gove r n m e n t gross-margin insurance program allows producers to protect a minimum gross-margin level for

a national dairy-margin index. This index often is not represen-tative of a given producer’s local pricing for milk or feed, and also does not take into account the influence of homegrown or con-tracted feed.

Furthermore, the tool is not flexible because it can’t be adjusted after purchase and may not be well-suited for capturing opportunity in high-margin environments. Despite these limitations, it is subsidized at times, and it can be useful for protection against catastrophic declines in national margins.

Margin Protection Program is one tool in the risk-management toolbox and generally should n o t b e c o n s i d e r e d a n

Manage commodity margins and focus on bottom line

MSU Ag Communications/Kat Lawrence

Holstein cows graze at the Joe Bearden Dairy Research Center in Sessums, Mississippi. Increased production and international competition are bringing down milk prices for dairy producers.

Page 9: Dairy's Bottom Line January 2016

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• Structured Dairy Net Margin Program: Under this approach an individual dairy employs customized software to model all forward dairy rev-enue and expenses to derive a dairy’s net margin for up to two years forward. The pro-ducer then takes advantage of all available cash, futures, options and insurance tools to capture opportunity and min-imize risk.

All commodities are valued, and all physical, futures and options positions are marked to the market daily. This com-prehensive program can pro-vide greater transparency to net-margin opportunities through daily profit-and-loss and risk reports that take into account all operational, finan-cial and position details.

This net-margin manage-ment approach is superior, unplanned and unstructured h e d g i n g b e c a u s e o f i t s

completeness and specific detail to the individual dairy’s financials, operations and positions.

Margin management will continue to be the buzz word in dairy management going for-ward as dairy-earnings volatil-ity persists and dairy managers a re c h a l l e n ge d , o r eve n required, by lenders to know their margins. Progressive dairy producers must embrace dairy-margin management as they continue to work toward combining a financial focus with their production empha-sis.

Carl Babler Atten Babler Commodities

LLC, a corporate sponsor of PDPW

The information and com-ments contained herein are provided as general commen-tary of market conditions and are not and should not be interpreted as trading advice o r re c o m m e n d a t i o n . T h e

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you vulnerable to unlimited risk. Atten Babler Commodi-ties LLC uses sources that they believe to be reliable, but they cannot warrant the accuracy of any of the data included in this report. Past performance is not indicative of future results.

January 2016 • PDPW • Dairy’s Bottom Line 9

Page 10: Dairy's Bottom Line January 2016

10 January 2016 • PDPW • Dairy’s Bottom Line

Dairy farming is an extremely capital-intensive business that requires the investment of large amounts of physical and finan-cial assets in order to produce a profit.

However, a great deal of human capital is also needed for a dairy to be successful. The strength of a dairy’s workforce has become an important factor in determining whether a dairy will achieve long-term success.

Farm management

Management on many dairy farms is fairly simple. The owners are the managers and are actively involved in each function of the farm. The farm owners’ decisions are mostly

centralized whereby the own-ers make the majority of the business decisions. As such, the organizational structure is s i m p l e , w i t h e m p l oye e s answering directly to the owner/manager.

Today, in many dairy farms, it’s necessary for a farm owner to delegate management responsibilities to others. A functional organizational structure may evolve, which means that authorities are granted to individual managers. As such, the organizational structure may look more com-plex, with feeders and milkers a n s w e r i n g t o d i f f e r e n t sub-managers, who answer to a general manager, who answers

to the owner.Compensation and reward

systems for key employees and managers play an important role in dairy farms, especially those with more complicated business-organizational struc-tures. Designing compensation plans for your dairy farm’s key managers and employees can support the farm’s busi-ness-management structure.

Compensation strategies

Most farm owners think of compensation only as a wage or salary. However, there are a number of ways a farm owner can also compensate valued employees, some of which are as follows.

BonusesProviding a bonus to an

employee can send an import-ant message. For example, a bonus based upon an employ-e e ’s a n n ive rsa ry d a te o f employment says that you value employees who stay with the business. Or a bonus at the end of a busy cropping season tells employees you appreciated their extra efforts.

In the non-farm world, there has tended to be a move toward performance-based compensation. These bonuses are usually based upon actual p e r f o r m a n c e m e a s u r e d against object criteria estab-lished at the beginning of the bonus period.

Protecting dairy’s valuable resourceThe strength of a dairy’s workforce is an important factor in determining whether a dairy will achieve long-term success.

Page 11: Dairy's Bottom Line January 2016

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There are a number of ways a farm owner can compensate employees.

Benefits

Many farms offer their key employees various forms of healthcare-insurance benefits. Another form of insurance benefit that can be purchased by a farm employer for an employee is life insurance. Most employers use split-dol-lar life insurance to provide life insurance to their employees.

Split-dollar life insurance enables an employer to provide life-insurance coverage for an employee based on payment of premiums for the policy. The employee only pays income tax on the term-insurance portion of the premium.

There are two types of split-dollar life insurance arrangements: 1) the endorse-ment type, under which the employer owns the policy and pays the premiums and, through an endorsement of the policy, the employee is given the right to name the recipient of the death benefit; and 2) the collateral assignment type, under which the employee owns the policy, with premi-ums paid by the employer, and assigns the policy as collateral security for the premium a d v a n c e s m a d e b y t h e employer.

In summary, split-dollar life insurance permits the partici-pating employee to accumulate

policy cash value on an income tax-deferred basis while pro-viding a significant, and gener-ally income tax-free benefit, to a desired beneficiary.

Deferred compensation

Deferred compensation is an arrangement in which a portion of an employee’s income is paid out at a later date after which the income was actually earned.

Most are familiar with quali-fied deferred compensation plans, such as a 401(k). These plans enjoy several important advantages such as immediate deduction of contributions by the employer, tax-deferred growth on plan assets, avail-ability for roll-overs for distri-butions and bankruptcy pro-tection for plan assets.

However, there are legal lim-its on the amount of compen-sation that may be deferred under these plans. In addition, employers generally must offer qualified deferred compensa-tion plans to all employees and cannot discriminate among employees.

A non-qualified deferred compensation arrangement is an agreement between an employer and an employee where the employee voluntarily agrees to have part of his or her compensation withheld by the employer, invested on his or her behalf, and given to him or her

at some pre-specified point in the future.

The non-qualified deferred compensation plan often con-tains a “golden handcuff ” which disqualifies the employee f ro m l eav i n g ea rly. T h e employer can leave the deferred compensation plan unfunded or pay for the liability under the deferred compensation plan by: 1) purchasing taxable invest-ments, such as stocks, bonds and mutual funds; or 2) pur-chasing permanent life insur-ance on the employee’s life.

Equity-based compensation

Finally, a farm owner may decide to design a plan for his or her valued farm managers and employees to acquire equity in the farm. The details associated with the kinds of equity-incentive plans are beyond the scope of this article. However, these plans should not be taken lightly and there are significant financial and

organizational issues that must be discussed. In particular, the tax issues associated with an employee who receives equity in exchange for services can be complex and an attorney or accountant experienced in equity-compensation plans should always be consulted.

Summary

Dairy-farm owners must recognize the importance of recruiting and retaining good employees who work hard and can be trusted with challenging tasks. They need to take the time to build and implement compensation structures that meet their employees’ extrinsic needs of financial security while continuing to meet their employees’ intrinsic needs of flexibility, self-esteem and task enjoyment. The future of your dairy business depends on it.

Troy Schneider Twohig Rietbrock Schneider

and Halbach,a corporate sponsor of PDPW

January 2016 • PDPW • Dairy’s Bottom Line 11

Page 12: Dairy's Bottom Line January 2016

12 January 2016 • PDPW • Dairy’s Bottom Line

Don’t just blame the weather this year for poor teat health and spikes in mastitis. Have a winter teat-care plan in place and stick with it. With proper planning it is possible to main-tain teat health in harsh weather.

Milking system set-up: Your milking system should be optimized for fast yet comfort-able milking. This includes evaluating proper vacuum and pulsation settings for the liner that you are using and looking at automatic detacher settings to ensure a proper milk out, without over-milking.

And, while operations can slide by during other times of the year, the added stress of winter weather conditions can exacerbate any system flaws. This can lead to an increased level of teat stress.

Areas to review:• Detacher settings• Pulsation settings

• Vacuum settings• Liner selection and change

schedulesEnvironment: Managing

the environment can minimize the weather’s effects on teat end health. Reduce wind speeds with adequate wind blocks in the free-stall and holding area to help prevent chapping or frostbite.

Review bedding schedules and the bedding material you are using to ensure you have dry bedding that does not freeze in the stall. If you are recycling bedding, it may be necessary to buy bedding to have a dry source. This is especially important for fresh cows. In addition, be sure alleys and holding pens are kept especially clean with more frequent scrap-ing.

M i l k i n g p ro c e d u re s : Review procedures to make sure enough attention is being paid

to cleaning teat ends. This will ensure that rougher teat ends are clean and help remove excess keratin to keep teat ends healthy.

Operators need to wipe teats in a downward, twisting motion. Work from the farthest teat to the closest and then flip the towel to make a second, more aggressive wiping pass, applying pressure across teat ends.

Make sure milkers rub, but never pick, excess keratin build-up that is ready to come off the teat. Picking at any exfo-liating teat skin that is not ready to be removed can cause pain and puts the teat at further risk of infection.

Employee care: Harsh weather can make for challeng-ing work conditions. Equip your milking team with proper gear to protect them from the cold. This will allow them to com-

fortably do their jobs.Winter teat dips: A proper

teat dip that has been formu-lated for changing and/or harsh weather conditions is essential. Chlorine dioxide teat dips, which contain lactic acid, have been highly recommended and successful at exfoliating teat skin to slough-off excess kera-tin, preparing the teat for winter weather. Chlorine dioxide teat dips are good to use whenever the weather fluctuates from cold to warm to cold again.

Always use higher-emollient teat dips that are effective for your herd during colder weather. Use of a high-emol-lient winter teat dip can help protect from increased drying, chapping or frostbite when we have harsh, freezing winter weather.

Keith EngelGEA Farm Technologies, a

corporate sponsor of PDPW

Winter teat health: Challenge acceptedContributed

Page 13: Dairy's Bottom Line January 2016

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Ingredients found in teat dip and other sanitation products are causing marketing problems for dairy products. Nonylphenol and nonylphenol ethoxylates are chemicals found in industri-al-sanitation products.

Their purpose is to increase surface activity for easier spread-ing, wetting and mixing of liq-uids. On the farm, these ingredi-ents can be found in commercial laundry detergents and teat dips, most commonly iodine-based. They help for better coverge of dip on teat ends.

Nonylphenols and nonylphe-nol ethoxylates have been shown to bind to or mimic estrogens if consumed by humans, according to the American Dairy Products Institute. Both can also be toxic to aquatic life.

Nonylphenol ethoxylate degrades to nonylphenol in soil or water, where it becomes more toxic. These chemicals have already been eliminated from

household cleaning supplies for more than 20 years.

While there are currently no rules in the United States regu-lating the use of nonylphenol ethoxylate agents, the U.S. Envi-ronmental Protection Agency is proposing that new products containing these substances would require 90 days notice to the EPA. This action targets at industrial, not necessarily agri-cultural, use.

Dairy-product marketers are finding that exported products are often not meeting the regula-tory standards of other coun-tries. The European Union set a standard for nonylphenol ethox-ylate levels in their infant for-mula in 2003. Japan has banned nonylphenol ethoxylates, and China recently put a ban in place for imported dairy products con-taining more than 10 parts per billion nonylphenol ethoxylates.

As the United States works to be a global supplier of dairy

products, the issue requires the attention of dairy producers and processors. Currently California is in the process of banning non-ylphenol ethoxylates from use. This trend will continue throughout the country.

These chemicals have also been found in cleaning products at dairy-processing plants. Dairy processors are working with their suppliers to source safe and effective sanitation products.

It was found that about 85 per-cent of the nonylphenol ethoxyl-ates in dairy products was due to sanitation washes in plants, with the other 15 percent coming from farms. Even when the plants have eliminated the use of nonylphe-nol ethoxylates, the industry will still need help from dairy pro-ducers to be below the threshold customers are requesting.

The movement to end use of nonylphenol ethoxylate is driven by customer requirements. It’s a challenge for the entire industry.

Nonylphenol ethoxylate numbers could even be notably different among a farm’s employees, depending on how well they wipe the dip off of the teat when prepping cows for milking. Dairy producers should make sure that the proper milk-ing routine is being executed, which means that both post- and pre-iodine teat dips are completely removed during pre-milking teat preparation.

Mike O’Brien Foremost Farms USA , a

corporate sponsor of PDPW

Teat dip ingredient causes concern

Contributed

U.S. dairy producers should look for teat dips that are free of nonylphenol ethoxylates.

January 2016 • PDPW • Dairy’s Bottom Line 13

Page 14: Dairy's Bottom Line January 2016

14 January 2016 • PDPW • Dairy’s Bottom Line

Reproductive performance significantly influences dairy profitability. Therefore, accu-rately assessing reproductive efficiency is essential.

A widely accepted indicator of reproductive performance is 21-day pregnancy rate. Essen-tially, 21-day pregnancy rate indicates how rapidly cows become pregnant after the vol-untary waiting period.

Two factors that contribute to 21-day pregnancy rate are; 1) submission rate and 2) concep-tion rate or pregnancies per artificial insemination. Many factors, including nutrition, hormone profiles, manage-ment, health, etc., can impact these factors.

One of the common myths in the dairy industry is that high milk production negatively impacts reproductive effi-ciency. In recent years, repro-ductive performance has increased while milk produc-tion continues to rise. Thus, high milk production with good reproduction is achievable.

It has been demonstrated that high-producing dairy cows express fewer signs of estrus or heat, making them more difficult to observe in heat when only using visual observa-tion. Moreover, due to the com-plexities of oper-ating a dairy, it is challenging to have a single employee exclusively dedicated to heat detection.

Thus, many dairies have out-sourced reproductive manage-ment, allowing breeders to implement tail-chalk pro-grams, often in conjunction

with synchronization pro-grams. These, in many cases, increase submission rates and subsequently 21-day pregnancy rate.

In addition to tail chalk, there are several other

adaptations of tech-nologies to assist in

identifying cows in heat. These tech-nologies use vari-ous observable changes in cow

behavior such as increased activity

that occur around the time of estrus to

predict animals that are in heat. In addition to heat

detection, these systems can assist in identifying problem/sick cows in the herd earlier by using changes in rumination.

Despite the widespread

adoption of heat-detection programs and technology, there is still a group of cows that don’t express heat or have such small behavioral changes asso-ciated with estrus that they are simply missed. This was demonstrated in a recent study on a commercial dairy where an accelerometer system was able to detect only 71 percent of eli-gible cows in heat. Although this is certainly better than relying exclusively on visual observations, determining ways to ensure submission to artifi-cial insemination of the remaining 30 percent of cows is critical to maximizing 21-day pregnancy rate.

In an attempt to ensure all eligible cows are serviced, the Ovsynch protocol for timed-in-semination was developed more than 20 years ago. Timed

artificial insemination proto-cols rely on synchronizing ovu-lation and are not concerned with cows exhibiting heat.

Since the introduction of Ovsynch, there has been con-siderable effort put forth to refine timed artificial insemi-nation approaches and hun-dreds of papers have been pub-lished specific to dairy cattle. Visit www.dcrcouncil.org for various peer-reviewed syn-chronization programs for dair-ies. Work with a veterinarian to determine which program may be right for your dairy.

Recent advancements in timed artificial insemination protocols have yielded excep-tional improvements to 21-day pregnancy rate by ensuring 100 percent submission rates and potentially improving p re g n a n cy p e r a r t i f i c i a l

Improve profits with focus on performance

Contributed

Figure 1. Rolling milk production and 21-day pregnancy rate in Holstein herds greater than 200 head. Data from DairyMetrics run Nov. 14, 2015.

Two factors that contribute

to 21-day pregnancy rate are; 1) submission rate and 2) conception

rate or pregnancies per artificial

insemination.

Page 15: Dairy's Bottom Line January 2016

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insemination. Such programs as the Double Ovsynch program are achieving pregnancy per artificial insemination of more than 50 percent in very high producing herds that are being supplemented with Posilac®. This reproductive performance was once thought to only be achievable in virgin heifers!

At the 2015 Dairy Cattle Repro-duction Council’s annual meet-ing, Reproductive Performance Awards were announced. A com-mon theme of the award winners, who excel in reproductive perfor-mance on their dairies, was team-work and people. With the adop-tion of technologies available right now and good teamwork, the dairy industry can, and is, achieving high reproductive per-formance in conjunction with high milk production.

Elanco Animal Health, a corporate sponsor of PDPW

January 2016 • PDPW • Dairy’s Bottom Line 15

Page 16: Dairy's Bottom Line January 2016

See EXPANSION, on page 17

16 January 2016 • PDPW • Dairy’s Bottom Line

Since the 1990s, Wiscon-sin’s dairy industry has expe-rienced some of the most significant changes in its his-tory. Perhaps one of the most pivotal outgrowths is that the industry is driven heavily by business principles.

Today’s dairy farmer is making decisions based on financial considerations and long-term viability of the farm versus lifestyle choices. Neither is good nor bad; it’s a matter of figuring out where a producer is headed and why. To that end, here is a checklist of items to consider when deciding if expansion is right for you.

What are the risks to grow-ing versus staying the same? Anytime you change your operation, you assume a cer-tain amount of risk, such as more debt. People who are risk-averse might want to continue as they are, but keep in mind the industry is rapidly changing and grow-ing. What risk are you willing to take?

Do you have opportunities for better before bigger? Have you taken advantage of all the opportunities to become better before you work on growing bigger?

Farmers who struggle to reach sufficient production p e r c o w, f o r e x a m p l e , shouldn’t think about grow-ing bigger until they’ve addressed their production problems. Maximizing milk per cow on your existing operation may yield much greater financial benefits in the short run versus adding more cows. If you’re below industry averages and have the opportunity to improve your operation, that’s where you should focus first.

What’s the motivation behind the expansion? Oper-ators have all kinds of reasons for expanding, and while m a ny ca n co - ex i s t , i t’s important for a lot of it to be driven off financial metrics.

However, if a farmer with an 80-cow stall barn is con-sidering growth because he

or she wants to add people for the day-to-day work, that’s a lifestyle decision. There are also next-genera-tion issues such as bringing family members into the operation. It all comes down to finding out your own “why” before developing a plan to reach that goal.

What’s your management capacity for change/manage-ment talent? Some people’s management talent for deal-ing with more people and more systems can be limited; they may be more task-ori-ented versus people-ori-ented.

A larger organization takes more of the latter, so you need to ask the hard question of whether you have the tal-ent for taking on a bigger and much different job and a more strategic role in the organization.

Do you have the infra-structure to accommodate growth? Do you have access

Dairy farmers: consider expansion whys

Contributed

Not everyone needs a 1,000-cow operation; there are farmers with very profitable 100-cow operations.

When it comes to maintain-ing balance, dairy farmers know a thing or two.

Farmers are always balanc-ing what needs done in the fields with what the weather will allow. They balance the books while hoping to save a bit and to re-invest in the farm. They also balance rations to e n s u re t h e i r cows a re receiving the right mix of feed for their dietary needs to pro-duce high-quality milk.

They even manage to balance their schedule against baseball games, board meetings and holiday gatherings.

While all these items are important to managing a dairy farm, it’s also just as important to balance work on the farm with time for personal develop-ment. Personal development can take many forms and means different things for everyone individually. For some, it’s being sure to sign up for a class or educational session at the local technical college, through the university Extension office or while attending a confer-ence. Sometimes it can be in the form of reflecting on recent successes or anticipating upcoming challenges. Personal development can even simply be asking a colleague for advice or feedback.

In the hustle and bustle of regular daily demands, it’s important to take some time to focus on developing these important skills. It’s these skills that might provide better com-munication, improve manage-ment or simply offer greater team collaboration.

Farming: the perfect balance

See BALANCE, on page 17

Page 17: Dairy's Bottom Line January 2016

��������������

Of course, farmers are among some of the most independent people out there. Taking on a fresh perspective from a new learning experience could ben-efit many farmers and those with whom they work.

Making small improvements along the way can mean greater, more significant improvements during a longer period of time. Small changes can begin with understanding how to enhance cow comfort or feed quality, which can then equate to greater production per cow. A small change could begin with calf care, improving their weight gain and overall health once those calves grow to be heifers. A small change could be rewarding employees and creat-ing incentives for quality work.

It’s easy to consider the pos-sibilities of how this type of

personal development can ben-efit a single dairy farm, but what about the community? Many dairy farmers are also active in various town boards and com-munity organizations. Taking t h e s e s k i l l s t o t h e s e

organizations provides these same farmers the opportunity to develop their leadership skills beyond the farm gate.

Serving as a leader in commu-nity organizations also means dairy farmers are likely serving

as a mentor as well, sharing their knowledge with younger, newer members and encourag-ing them to be more involved. Depending on the type of lead-ers they are, they might also be inspiring other members to take on more active roles and to serve as positive influences.

At the next industry event, consider sharing an opportunity with a neighbor, friend or younger member, encouraging them to be more involved. Sometimes all it takes is a bit of encouragement from someone they respect.

Dairy farmers work to main-tain a perfect balance with the demands on the farm while meeting their own goals and priorities for personal develop-ment. While the balance might not always appear to be perfect, keeping personal development as a priority should be a focus for all dairy farmers.

Julie Martin FarmFirst Dairy Cooperative, a

corporate sponsor of PDPW

Contributed

Consider sharing opportunities with a neighbor, friend or younger member of the community.

BalanceContinued from page 16

to more land, either owned or rented? Do you have enough land for feed and room to spread the manure, as well as raise your own heifers?

Land availability might be the single most important governor on growth. If not, you may face insurmountable challenges. Manure systems, feed storage and parlor capac-ity can also have bottleneck potential when expanding.

Do you have a succession p l a n ? A re yo u g ro o m i n g someone for the next genera-tion of farm operations? If you’re just growing and don’t have a successor, or aren’t facing the inevitability of sell-ing, you may not be taking in the full scope of your opera-tion’s future.

Are you prepared for the

banker? Your banker is going to look at a whole host of fac-tors in considering your request for expansion, from working capital to long-term cash-flow assumptions, tran-sition and construction-phase issues, contingencies and having a well-documented plan. Any one of these items alone might not be a disquali-fier, but the blend of all these analyses will help the banker determine what is approvable and bankable.

Remember, not everyone needs a 1,000-cow operation; there are farmers who have very profitable 100-cow oper-ations.

What all-sized operators need to be mindful of is find-ing ways to stay sustainable and viable, which may or may not include future expansion.

Dave Coggins Investors Community Bank , a

corporate sponsor of PDPW

ExpansionContinued from page 16

January 2016 • PDPW • Dairy’s Bottom Line 17

Page 18: Dairy's Bottom Line January 2016

18 January 2016 • PDPW • Dairy’s Bottom Line

Offer them experiencesMillennials like adventures, so let them discover in person how you care for your animals. Can you offer farm tours or invite their “help on the farm” for a day?

Use the webWebsites are now the No. 1 source of information for all consumers, including millennials. Do you have a farm website? What about a virtual tour of your farm on your website?

Listen carefully, don’t sugarcoatAll consumers want to be heard and acknowledged, and they want straight answers. Speak plainly and use words consumers can relate to.

Keep it social Use social media to share/re-share information that’s important to consumers. You can post links to farm videos on Facebook, Twitter or Instagram.

Learn more about communicating with consumers and advocating for agriculture at PDPW’s Dairy’s Visible Voice® training in Fond du Lac on January 27, 2016. Visit pdpw.org for details.

Research tells us that consumers expect transparency about the treatment of animals and the environment. So now’s a perfect time to open your farm to share what you do and why.

Transparency builds trust. Everyone in the supply chain is working to increase transparency and trust in dairy products and processes. And it all starts with you.

Because millennials are the largest growing portion of the population, and are at a point in their lives when they’re forming opinions about food choices, they’re an important audience to engage.

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Page 19: Dairy's Bottom Line January 2016

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Strategic mastitis treatment saves $

See MASTITIS, on page 20

Reducing mastitis treat-ment costs by tens of thou-sands of dollars is possible, according to a new study from Cornell University. This study identifies a more calculated approach to mastitis treat-ments that reduces the overall amount of antibiotics needed. No t o n ly d o e s t h i s n ew approach provide excellent cure rates, it is more cost-ef-fective for dairy producers.

“The Cornell study compares the effectiveness of antibiotic treatment in extended therapy to selective therapy when treat-ing mastitis,” said Dr. Linda Tikofsky, professional services veterinarian for Boehringer Ingelheim Vetmedica Inc. “The dairy industry is conditioned to grab a tube and treat every case of mastitis that comes along. But in reality many mastitis cases will self-cure or are caused by pathogens that won’t respond to antibiotic treat-ments well. Treating those cases is an unnecessary expense.”

The study outlines four ways to react to and treat clinical mastitis on dairy farms:

• No antibiotic treatment for mild and moderate cases, and supportive care — such as fluids

and anti-inflammatory drugs — for severe cases. However, as was the case two decades ago, this may lead to an increase in chronic cases of mastitis and increased bulk-milk somatic cell counts.

• Similar blanket antibiotic treatment for all cases. This could lead to overtreatment of approximately 50 to 75 percent of all mild and moderate cases, and is costly.

• Culture the milk on-farm, and make a treatment decision 24 hours after detection of mild and moderate mastitis. Severe ca se s s h o u l d b e t rea te d

immediately. This can help dairies decide which cases to treat and which are unlikely to respond to antibiotics.

• Culture the milk through an outside service, and make a treatment decision 24 hours after detection of mastitis. New diagnostic technologies can determine which pathogens are present and also identify any

contagious pathogens.Researchers compared two

groups of cows that had mild or moderate clinical mastitis. The first group received blanket therapy, using one tube of ceft-iofur hydrochloride daily for five days. The second group did not receive treatment for the

Contributed

Contributed Contributed

January 2016 • PDPW • Dairy’s Bottom Line 19

“The dairy industry is conditioned to grab a

tube and treat every case of mastitis that comes

along. But in reality many mastitis cases will self-cure or are caused

by pathogens that won’t respond to antibiotic

treatments well. Treating those cases is an

unnecessary expense.”

Page 20: Dairy's Bottom Line January 2016

20 January 2016 • PDPW • Dairy’s Bottom Line

MastitisContinued from page 19

first 24 hours while milk sam-ples were cultured.

Those with Gram-positive pathogens were given cephapi-rin sodium once every 12 hours for two treatments. Those with Gram-negative infections,

other organisms or no growth received no treatment.

“The results should change the way dairies look at mastitis treatment,” Tikosfky said. “There were no statistically sig-nificant differences between the two groups in clinical cure, next-test-day milk production, somatic cell counts or risk of culling. But the days out of the

bulk tank were much higher for the blanket therapy group, at almost nine days versus seven days for the culture group.”

The study concludes that the additional cost of unnecessary antibiotics, combined with the amount of milk discarded, can cost dairy producers more than $32,000 per 1,000 cows.

Culturing mastitis infections

will likely be a change in proto-col for most dairies. However this information-based, strate-gic treatment method will still offer cows similar cure rates and reduced time in the hospital pen, while saving thousands of dollars for dairy producers.

Boehringer Ingelheim Vetmedica Inc.,

a corporate sponsor of PDPW

When robotic milking sys-tems first appeared on U.S. dairy farms about 10 years ago, they were a tough sell. Opera-tors thought the technology would do all the work for them.

When they realized that wasn’t the case, many owners ended up selling or returning the systems. However the industry has climbed over that hurdle. More dairy producers are seeing the benefits robotics can bring to their farms.

Right now, dairy robotics are most attractive to smaller farms, allowing them to:

• Efficiently increase milk production

• Create more opportunities for management to work with cows and assess production performance

• Improve labor costs and attract quality talent

Production efficiency is crit-ical given the margin volatility dairy producers face. Not only can robots significantly increase milk production, they can maintain quality and consis-tency as well.

But a robot is not an excuse to avoid working with cows. If anything, you should be spend-ing more time in the barn because the technology is designed to allow you to improve the quality of your work with your herd. That’s

because robots can provide a wealth of information about what’s going on in the barn.

Because robots measure yield instantaneously, they can help operators quickly detect

illnesses such as mastitis, enabling you to treat the prob-lem before wasting milk pro-duction. It can also detect when a cow is in heat, so you can move it through the breeding

process and put it back into the milking system more efficiently.

Additionally, robots eliminate many of the issues related to managing a labor force, such as sick days and time off. Robots

The case for dairy robotics

Page 21: Dairy's Bottom Line January 2016

January 2016 • PDPW • Dairy’s Bottom Line 21

Let’s talk about your future. Contact your Relationship Manager to walk you through the pros and cons for your farm.

Still On The Fence About Dairy Robotics?

Drain on Lifestyledairy producers spend more

time operating the farm than with their families

If dairy producers don’t have a long-term strategy, they’ll get left in the rain. In order to weather these conditions, many producers are leveraging ROBOTICS

to cut costs and yield more output.

Time Managementwith 24/7 automated milking, dairy producers spend less time working in the business and more working on the business and with their families

Do these #’s add up for your farm?

Got Robotics?

Here’s what producers, both big and small, are up against:

Dairy Farming is Tough Business

Margin Volatilityneed efficiency + more

milk production

Labor Crisislabor is expensive and

there’s a major shortage in the workforce

Spend Now, Save Later?

Three Considerations

Labor Efficiencylabor is the highest operational cost and the biggest opportunity to save

Production Qualityproducers rely on robots to maintain quality and consistency; plus they never call in sick

1 2 3

By The Numbers

$200,000

- HOLY COW!

Production Increase

10%(5-20 lbs.) per

cow per day for small/mid-size

producers

lbs. of milk per robot per day. Some dairy producers are seeing big numbers

Opportunity

6,000

Savings Per Year

per robot per year

$30,000

Sources: Milking robot frees up time for other taskshttp://www.delaval.com/en/-/Meet-our-customers/Kivioja---Finland-700000-kg-yield-with-a-milking-robot/ Banking products and services are subject to bank and credit approval.

BMO Harris Bank N.A., Member FDIC

For many, robots are a big ticket item. But it might be worth considering why dairy producers like you are investing now to save in the long-term.

Average

on average per robot

Producers start to see savings after payoff and labor reduction

Costs

1 robot = 60 cows

Contributed

are also appealing to younger generations of farmers. This provides an incentive to older farmers to upgrade their facilities for the next generation. This is an especially import-ant factor given the industry’s current work-force challenge.

Along with the benefits, there are a few drawbacks:

• Robots are expensive, in both upfront costs – about $200,000 – and in ongoing maintenance – about $6,000 per year.

• They only begin to pay for themselves after about seven years.

• They add technological complexity to a dairy operation. If you don’t fi x issues right away, your cows aren’t milked.

Given all these factors, investing in robot-ics requires a strong equity position.

Otherwise, investing in a system can restrict your borrowing power. It’s also important to take into account the market conditions during and after construction.

You may be able to get an interest-only loan for the construction phase. That makes it a good option during a low milk-price environ-ment since you’re not making principle pay-ments as you ramp up construction. And when you complete construction, milk mar-keting will be vital to determining your break-even point after the project is complete.

For many farms, dairy robotics can provide several long-term benefi ts. But it’s crucial to take all considerations into account.

Craig Rogan BMO Harris Bank,

a corporate sponsor of PDPW

ABOVE: The DairyProQ system uses an individual robotic arm placed at every stall in the parlour.

RIGHT: Nick Dornauf shows off the robotic rotary dairy he has incorporated into his farm. Cows wear electronic collars that are recognized by the robots, smart gates, automatic feeders and the herd management software. This is the type of system that has now led to texting.

Page 22: Dairy's Bottom Line January 2016

22 January 2016 • PDPW • Dairy’s Bottom Line

During every farm transfer, two events typically take place. The younger generation steps up and into farm ownership, and the older generation steps down and ventures into unchar-tered territory – retirement. We are going to focus on the retire-ment side of the equation.

I recently took a call from someone in his early 60s, with health starting to fail. He has no plan in place and now wants things to move ahead at an accelerated pace. His sons are not interested, so he is looking for a non-family member to take over.

Like many others, his prop-erty has dramatically increased in value since it was purchased. Work that should have been ini-tiated 15 years ago has just begun, and there may not be enough time left to have a well-thought-out plan for ownership transfer.

For the non-farming popula-tion, retirement planning begins 15 to 20 to 30 years before retirement. For farmers, plan-ning retirement 30 years ahead of time may be hard, but 15 years is not too early to begin planning. While the farm and other assets may be considered “the retirement plan,” this does not substitute retirement plan-ning years ahead of time.

There are several advan-tages to starting the process early.

For the retiring generation, it m a ke s se n se f ro m a ta x

standpoint. If the sale of assets is done throughout a series of years, the tax burden could be reduced.

Normally, smaller sales

throughout several years will allow you to keep more money in your pocket and pay less in taxes. Also, when sale of assets is done throughout several

Dairy farmers need retirement plan

Offering the next generation a portion of ownership and management responsibility early will incentivize them to stick around and gain valuable experience.

Jane Fyksen/Agri-View

Joe and Haly Schultz of Homestead Heifers rely on custom-rearing heifers instead of milking cows to transition into eventual ownership of Joe Schultz’s family farm in northcentral Wisconsin.

Transitioning a farm requires thinking beyond the incoming generation to consider the possibility that the kids’ kids may also want to become part of the family farm.

Page 23: Dairy's Bottom Line January 2016

NORTHSTAR DHI SERVICES

REVEALING PROFITABILITY IN EVERY

DR P

800.631.3510northstarcooperative.com

Customized testing programs with over a dozen milkanalysis options including SCC, fat, protein,MUN,preganacy, mastitis, Johne’s, leukosis, BVD and more.Call NorthStar DHI to learn more.

January 2016 • PDPW • Dairy’s Bottom Line 23

Mary Hookham/For Agri-View

What — The assets in a farm transition plan need to be identified and potentially separated.

There’s a lot of emotions underlying discussions about bringing additional family members into a farm operation. Once business solutions are in place, the important things are to keep communications open and push together.

years, investments can be made off-farm, allowing for diversifi-cation. This lowers the overall risk for the investor.

There are also benefits for the incoming generation. First, it makes the farm purchase and transition much more manage-able, giving them a chance to gradually move into entire own-ership/management and easing the learning curve of what is involved in running a dairy farm.

For example, maybe they start by purchasing half the herd. Offering the next generation a portion of ownership and man-agement responsibility early will incentivize them to stick around and gain valuable expe-rience. If they have some “skin in the game,” the farm will become more than just a job. Communicate the roles and lev-els of involvement from all par-ties, perhaps offering to be a valuable resource for them.

Today, there is added flexibility to create several LLC entities

within one farm business. It is not uncommon to see three sep-arate LLCs within one farm. This allows the transfer to take place through the various LLCs.

There are several resources for a farm transfer. Take the time to engage with these resources, no matter what stage of transition you may be in or succession structure you may be considering.

Like the non-farming public, retirement planning for farmers should be done years in advance. In order to have a suc-cessful transfer, several years of planning is recommended. So if you think it is time to start, you are right. This is one area where you cannot start too early or learn too much.

Jon Zander Badgerland Financial,

a mission sponsor of PDPW

Page 24: Dairy's Bottom Line January 2016

24 January 2016 • PDPW • Dairy’s Bottom Line

Summer heat: No friend to reproductive performance

After much anticipation, summer 2016 will soon arrive in the Midwest, bringing higher temperatures, elevated humid-ity and seasonal reproduc-tive-performance challenges.

In recent years, dairies have improved their ability to impregnate cows. Reproductive success takes effort from every angle on the dairy and starts with an understanding of preg-nancy rate and the factors that impact it most. Pregnancy rate has been evaluated by looking at the percentage of cows bred during a 21-day period and con-firmed pregnant.

However rather than simply looking at the equation in three-week increments, dairy producers can learn more about their herd pregnancy rate by further investigating what is included in the equation:

PR = HDR x CRKey: PR is pregnancy rate,

HDR is number of animals detected in estrus, CR is ani-mals bred and conceived.

Evaluating pregnancy rate by focusing on heat-detection rate and conception rate separately can allow you to better evaluate where change can be imple-mented to see improvements. Advancements in reproductive technology have helped dairies significantly improve heat-de-tection rates in the past few years, and changes can be seen in as quickly as two to three estrous cycles.

Conception rate is much more confounded because it is impacted by many areas of the dairy operation and variables that are hard to control. Improving conception rate requires a commitment and investment from the dairy pro-ducer.

Boosting conception rate with the ration

Nutrition is one factor that

can have a profound effect on the cow’s ability to conceive. Within a properly balanced diet, specific feed ingredients can help improve conception rates and reproductive success. Omega-3 and Omega-6 Essen-tial Fatty Acids are one of the solutions that have been identi-fied to increase reproductive performance and immune function.

Essential Fatty Acids aid in several significant biological functions. Omega-3 aids in production of prostaglandins, fosters embryonic survival and balances functions of Omega-6. Omega-6 aids in production of prostaglandins, promotes ovulation and sperm capacitation, aids in contrac-tion and maintains embryo development.

Feed Omega-3 and Omega-6 Essential Fatty Acids

Data from five recent on-farm trials illustrate positive health impacts that can be obtained by adding a combination of Omega-3 and Omega-6 Essen-tial Fatty Acids to pre- and postpartum cow diets during the transition period.

Reproductive success through nutrition

University of Wisconsin

Evaluating pregnancy rate by focusing on heat-detection rate and conception rate separately can allow better evaluation of where change can be implemented.

Page 25: Dairy's Bottom Line January 2016

Twohig RietbrockSchneider & Halbach“Attorneys for Agriculture”

(920) 849 - 4999

Legal, business and planningsolutions for Wisconsin’sfarms and agribusinesses.

See FRESH LOOK, on page 26

January 2016 • PDPW • Dairy’s Bottom Line 25

If you’re a dairy producer, chances are you know your farm inside and out. Every puddle, every tricky gate, every cow and her habits are familiar to you, because you’ve been there, sea-son after season, year after year, putting in the long hours and the hard work that farming unapologetically requires.

All those long hours have resulted in you knowing your farm like the back of your hand, but do you really see it? Do you see it the way a consumer would?

You’re tuned in to your herd, and you do your best to head problems off at the pass, but in

today’s environment, that might not be enough. It might be time to take a long look at that oh-so-familiar landscape because those things you don’t see could risk your image in the eyes of the consumer.

The French author, Marcel Proust, said, “The real voyage of discovery consists not in seek-ing new landscapes but in hav-ing new eyes.”

It’s a new day in farming, and it requires seeing your farm

with new eyes.The benefits of good farming

practices haven’t changed, but the impact those practices have on public perception has. Fifty years ago, while a farmer’s neighbors might comment on how tidy a farm was kept, there were no cell phones capturing photos to be broadcast world-wide in mere minutes.

Terms like organic and lac-tose-free weren’t buzz words clambering to get their share of

the dairy-food industry. And extremists weren’t misconstru-ing animal-welfare practices to make monsters of men.

Never before has information been so readily available, nor scrutiny been so high. Consum-ers have a lot of choices. Those choices have created a culture of people who are interested not only in what’s in their food, but where their food comes from.

Take a fresh look at your farm

Contributed

The foundation for any successful operation – and one that stands up to scrutiny – is a clean, organized facility.

Results showed that transi-tion and pre-breeding diets enhanced with Essential Fatty Acids:

• Resulted in lower 1st Linear Somatic Cell Scores

• Resulted in less embryonic death

• Improved reproductive per-formance: Rate of animals bred and conceived improved by 7 percent to 15 percent across herds, and pregnancy rate increased by 7 percent to 16 per-cent across herds

• Resulted in lower blood beta-hydroxybutyric acid levels at seven days postpartum

• Improved first-milk weights• Increased net profit on all

participant dairies, ranging from $28 to $248 per cow per year based on performance improvements

The herds in these trials repre-sent a wide geography and differ-ent management styles. Yet the upward trend in cow health and immune function from adding a

combination of Omega-3 and Omega-6 Essential Fatty Acids to pre- and postpartum rations shows the impressive, positive impact this key feed ingredient has on cow health, productivity, reproductive performance and profitability.

Summary

Optimal pregnancy rate and reproductive success takes efforts from all areas of the dairy. Work with your on-farm team and your veterinarian and nutritionist to identify oppor-tunities for improvements.

Use nutritional tools, such as Essential Fatty Acids, as part of an overall reproductive-man-agement strategy to help you achieve the outcomes you seek – optimal cow health, produc-tivity, reproductive perfor-mance and profitability.

Joel Pankowski Arm & Hammer Animal

Nutrition, a corporate sponsor of PDPW

Page 26: Dairy's Bottom Line January 2016

26 January 2016 • PDPW • Dairy’s Bottom Line

Fresh lookContinued from page 25

Generationally speaking, the average person has never been further removed from the farm. But between mainstream news and social media, infor-mation is literally at the pub-lic’s fingertips. Clever market-ers with big dollars drive advertising, and sensational-ism sells. So how do dairy pro-ducers combat the drama?

The foundation for any suc-cessful operation – and one that stands up to scrutiny – is a clean, organized facility. Imagine you’ve stepped into a restaurant and the first thing you notice is how dirty the place is and how unhappy the staff looks. You’re not likely to feel confident about eating there, are you?

The same goes for your farm. Cleanliness is the foundation for healthier, happier cows with less risk of disease, as well as happier, healthier employees with less risk of injuries. Take a look around – what would con-sumers think if they stepped into your “restaurant?”

On the surface, it may seem as though producers must work harder and spend more, simply to appease the public – with little to no impact on profit. The opposite can actually be true.

Producers who make con-sumer confidence a priority on their farms often see the change in expectations as a positive. Consumer-driven awareness is a good thing because it leads farms to be more educated, more produc-tive and more engaged — all of which leads to fewer issues.

So take that long look; appreciate your farm from the consumer’s perspective. Invite a non-ag friend over, ask a teacher to bring students for a tour, have folks from church come out to see your farm. Let them be your fresh eyes. What they see may surprise you.

Shelli Manning ANIMART, a corporate

sponsor of PDPW

Inflammation plays a vital role in the body’s immune response to infection or injury. During an inflammatory response, oxidative stress is a normal occurrence. However research shows that oxidative stress from chronic inflammation can contribute to a number of health and pro-duction problems.

In dairy cattle, oxidative stress may increase susceptibility to various health disorders (Sor-dillo and Aitken, 2009). These disorders can include sepsis, mastitis, acidosis, ketosis, enteri-tis, pneumonia and other diseases (Celi, 2010).

Earlier studies had suggested that supple-mentation with certain antioxidants could reduce the severity of metabolic and infectious diseases (Miller et al., 1993). Since then, researchers have sought to better understand the immune inflammatory response, oxidative stress and the potential use of dietary antioxi-dants in dairy cattle. The need for such products has grown with the increasing productivity of modern dairy cows.

Inflammation

Inflammation is part of the normal immune response to infection or injury. It plays a key role in the body’s acute-phase response to pathogens and tissue damage. However, inflammation that persists following initial stimuli and response is chronic inflammation, which can be harmful.

The normal inflammatory response and most metabolic processes generate oxidative stress, which occurs at the cellular level when oxidant activity exceeds the neutralizing capacity of available antioxidants. Oxidants include free radicals formed when oxygen interacts with cer-tain molecules, resulting in highly reactive atoms or groups of atoms with an odd number of elec-trons, including “free” electrons available for pairing.

In low concentrations, free radicals are essen-tial to several physiological processes. However, in higher concentrations they can start a chain reaction that targets lipids, proteins and other macromolecules. When free radicals react with important cellular components like the cell membrane or DNA, cells may function poorly or die.

Antioxidants are compounds that can donate an electron, thereby neutralizing oxidative effects. Antioxidants may delay, prevent or remove oxidative damage to a target molecule (Halliwell and Gutteridege, 2007).

Antioxidant defenses

To prevent free radical damage, the body has

its own antioxidant defense system, which includes three major types of antioxidants:

• Enzymatic, the main form of intracellular antioxidant defense;

• Non-enzymatic protein, primarily found in plasma; and

• Non-enzymatic low molecular weight, found in plasma and extracellular and intracel-lular fluids.

Certain essential nutrients, such as vitamin E and selenium, also have important antioxidant functions.

Oxidative stress and disease

The majority of health problems in dairy cows occur around parturition. The relationship between the physiological changes associated with parturition and an overall loss of antioxi-dant potential is well established for both humans and dairy cows (Bernabucci et al., 2005; Sordillo et al., 2007). In dairy cows, oxidative stress during the transition period may be a major underlying cause of inflammatory and immune dysfunction as supported by both in vivo and in vitro studies (Sordillo and Aitken, 2009).

While there is considerable evidence that oxi-dative stress contributes to a number of health and production disorders in cattle, there remains a great deal to be discovered. A better under-standing of how antioxidants may prevent immune dysfunction and oxidative damage to host tissues may lead to more effective strategies to avoid disease (Sordillo and Aitken, 2009).

Dietary antioxidants are likely to play an increasingly important role, especially as dairy producers seek to optimize the genetic potential of their high-producing cows.

Julia Hamann Diamond V, a corporate sponsor of PDPW

Oxidative stress: How it impacts dairy health

Contributed

Antioxidant compounds can donate an electron to free radical molecules and so help neutralize their damaging oxidative effects.

Page 27: Dairy's Bottom Line January 2016

January 2016 • PDPW • Dairy’s Bottom Line 27

So often people play mind games with themselves to justify what decision they are making even though they know those decisions are not recommended. Often dairy producers lose focus of the overcrowd rate in the facility because it is easy to add another cow or two into a pen.

By overcrowding, you are passing the opportunity to maximize cow comfort, in turn lowering your production rate. There are many little factors that play a big role in the over-crowd rate other than the num-bers spelled out on the paper in front of you.

A well-maintained barn starts with the manager of the facility. A well-followed main-tenance program should be in place. An important factor to consider is stall size. Make sure equipment hasn’t adjusted or damaged stalls.

If any equipment has bumped the stalls and the spacing is incorrect or a self-locker is not functioning properly, the cows will tend to avoid these stalls and headlocks. This alone will create overcrowding.

In addition, all the water sta-tions should be thoroughly inspected regularly. If one water station is not operating up to full capacity, the remaining water stations will be bom-barded. The overcrowded water stations will restrict the full potential of water intake by the animals. Water is the least expensive nutrient, making this the easiest money-savings fix.

Another consideration is the resting space versus the eating space. Those two areas should be well-balanced. If one area has a lower capacity than the other, the area with the lower capacity is the one upon which you should base your overcrowding rate. Before adding additional cows to a pen, be sure these few things are well analyzed.

Another factor that seems to be overlooked far too often d u r i n g ove rc rowd i n g i s

ventilation. Ventilation systems are designed with factors in mind such as air speed, place-ment of air movement and air exchange, all to create the most efficient ventilation system. The higher the overcrowd rate, the more critical the ventilation system is to a facility.

More cows equal more manure. More manure equals poor air quality. Poor air quality equals more respiratory problems. This will turn into a vicious circle.

A well-designed barn with enough space to allow the cows to move freely to and from the feed, water and resting areas can be more forgiving and will allow for slightly more overcrowding than a barn that is designed with a tighter footprint.

The cows tell the story.If you spend the time watch-

ing and analyzing the cows, you will know if something is wrong. Listen to cows and make the adjustments accordingly.

Ashley Ambrosius Bayland Buildings, a

corporate sponsor of PDPW

Reconsider overcrowd rate

Contributed

Be mindful that overcrowding can be created by damaged stalls or a broken self-locker.

Page 28: Dairy's Bottom Line January 2016

28 January 2016 • PDPW • Dairy’s Bottom Line

Dairy farming margins are volatile, and with that comes challenges and risks that can’t be avoided. Whether you’ve been dairy farming for 50 years or five, all dairy farmers face the same risks.

Beginning farmers, however, can be much more susceptible during industry downturns. Without the years to build their balance sheets, beginning farmers typically have smaller net worth and working capital positions. Additionally, most have a smaller land base and more variable costs. Com-bined, these factors may mean they have fewer options, com-pared to a veteran farmer, when cash-flow shortages arise.

The good news is there are ways every dairy producer — regardless of operation size or years in the business — can better position their opera-tions for long-term success. In the dairy industry, we’re fortu-nate to work with many out-standing producers. We’ve identified best practices and common strategies these man-agers use to stay at the top of their game. Consider adopting or enhancing the tactics that follow. They are good remind-ers for all, but they are espe-cially important for beginning farmers.

1 . B e e f u p y o u r record-keeping.

Detailed and accurate finan-cial and production records are crucial to understanding and managing your business. Complete a monthly cash-flow budget and monitor your oper-ation on a budget-to-actual basis. This budget needs to be dynamic so when factors change, it can be updated. Understand your cost of pro-duction and then use that

knowledge to make decisions. Having good financial records not only will help you manage your business but help you discuss your needs and future plans with your lender.

2. Boost your risk man-agement plan.

Once you know your break-even, you can make educated decisions on how to manage operational risk. Set milk-price targets and lock in prices when opportunities occur. Develop a marketing plan with a focus on margins, looking at

both milk and feed costs. If you are not strong in this area, find an expert in the field to help you. Other things to look at are your levels of insurance, including Margin Protection Program, Livestock Gross Margin Insurance or your crop-insurance levels. Elimi-nate the risk of interest rates rising, and lock in fixed inter-est rates.

3. Build working capital.Working capital is your best

defense against cash-flow shortfalls. A good management

target is at a minimum of $500 of working capital per cow. If you have other enterprises besides dairy, you will need more. Having strong working capital also allows you to take advantage of buying opportu-nities. Review your lines of credit and discuss options with your lender. Use your monthly cash-flow budget to determine when you will have cash-flow shortages and the amount of operating credit you may need.

4. Balance capital expen-ditures.

Analyze each purchase to determine if it will add enough to your bottom line to justify the cost. With limited capital it is important you spend it on needs instead of wants. Make sure you incorporate these capital expenditures into your budget and determine if you will able to pay for them out of cash, and maintain adequate working capital, or need to finance these purchases.

5. Bank on the basics.Nothing replaces cow com-

fort and high-quality feed. Are you maximizing your basis with good components? Make sure you have protocols in place when dealing with sick cows and herd-health records are up-to-date. Maximize non-milk income by culling cows in good condition.

These tips will help you manage through downturns and set you for long-term suc-cess. For beginning farmers who have not experienced compressed margins before, remember to reach out to peers, mentors and industry experts for help and advice. Discuss options with your l e n d e r a n d k e e p t h e m informed. Work on the things you can control and keep the big picture in mind.

Brooke GrantAgStar Financial Services, a corporate sponsor of PDPW

Managing through volatile timesTop tips for beginning farmers

Page 29: Dairy's Bottom Line January 2016

See BMR, on page 30

January 2016 • PDPW • Dairy’s Bottom Line 29

Because milk prices are fore-casting lower in 2016, dairy pro-ducers should avoid compro-mising cow health and nutrition in order to cut costs. Reducing cost in health and nutrition may ultimately lead to lower milk production and higher veteri-nary costs, offsetting any short-term savings.

According to Mike Hutjens, dairy nutritionist with the Uni-versity of Illinois, trying to save even 15 cents per cow per day could result in increased somatic cell counts, delays in cows becoming pregnant and other health issues that cost signifi-cantly more than 15 cents per day.

“Dairy farmers must make economically sound feeding decisions that return a profit when prices are either at $24 or $17,” Hutjens said.

Dairy farmers should have a close working relationship with their veterinarians and nutri-tionists, to work together to dis-cover products that would start cutting cost. It is not advised to cut health supplements from a herd-health management pro-gram because high-producing cows will make money regard-less of milk price. It is important to continue focusing on milk production and not be tempted to take short-term shortcuts that could jeopardize herd health and productivity.

Costly fresh-cow disorders that can be prevented through a good herd-health program are ketosis, mastitis, milk fever, retained placenta and decreased pregnancy rates. Once a cow develops a disorder, it can affect milk production and reproduc-tion for the entire lactation.

Veterinarians say that for every cow experiencing a clini-cal problem, there are probably 10 to 15 cows in the herd that are experiencing a sub-clinical problem. Prevention through nutrition is the best approach.

Cows notice diet changes, which ultimately can stress their immune systems and compro-mise herd performance. By pro-viding cows with high-quality feed and using supplements strategically, producers will con-tinue to experience high-pro-ducing cows in the parlor.

Having a good herd-health program in place has a big impact on profit margins. Proper management practices can save money through reduc-ing treatment costs and may ultimately lead to increased profits through increased ani-mal performance. Providing health supplements to maintain a cow’s health is important to prevent costly disorders.

James Knevelbaard Van Beek Natural Science, a corporate sponsor of PDPW

Focus on herd health pays

Contributed

Veterinarians say that for every cow experiencing a clinical problem, there are probably 10 to 15 cows in the herd that are experiencing a sub-clinical problem.

Brown midrib or BMR silage has been a success with crop and dairy managers who, 1) understand how to minimize agronomic risks by planting BMR on high-fertility soils, 2) desire high-forage – corn-si-lage – diets, 3) are able to seg-regate the storage of BMR silage, and 4) allocate BMR silage to transition cows and cows producing more than 75 to 80 pounds of milk per cow per day.

The majority of BMR is grown in separate, high-fertil-ity fields to minimize agro-nomic risks. BMR needs to be managed and harvested similar to conventional hybrids, ide-ally when the kernels are at a half to three-quarter milkline maturity. BMR hybrids are subject to the same effects of growing environment as con-ventional hybrids and can vary significantly in neutral deter-gent fiber digestibility from year to year or field to field, depending upon the unique growing environment.

A s w i t h co nve n t i o n a l hybrids, attention to kernel damage during harvest is crit-ical to assure maximum rumi-nal-starch availability. BMR silage also tends to be more prone to aerobic-stability problems, such as heating, due to extremely high levels of sucrose in the stalk. This ten-dency for heating at feedout can be significantly reduced with the use of inoculants con-taining Lactobacillus buchneri strains.

The reduced lignin in BMR silage results in a four- to 10-point-higher neutral deter-gent fiber-digestibility value when analyzed in the lab. In the lab the BMR sample cannot escape the analysis vessel. But in the cow the net effect is a faster rate of neutral detergent fiber digestion and the more fragile fiber exiting the rumen

much more quickly than con-ventional corn silage.

The bottom-line result is typically higher intakes of the entire ration, important in transition and early-lactation cows, which usually drives higher milk yields. The improved rate of digestion and feed passage allows for high-er-forage diets, improved rumen health and the potential to remove some supplemental energy or protein — due to higher microbial production — from the diet.

Here are general consider-ations that dairy producers and nutritionists have devel-oped during the past two decades of feeding BMR corn silages:

1. When determining inven-tory needs, recognize that BMR yields may be 5 percent to 10 percent less than conven-tional hybrids and that cows will consume more BMR silage due to the intake response.

BMR corn-silage feeding considerations

Contributed

BMR corn-silage hybrids have been on the market for nearly two decades. This article provides examples of the growing and feeding experiences of dairy producers who have successfully incorporated BMR into their forage program.

Page 30: Dairy's Bottom Line January 2016

30 January 2016 • PDPW • Dairy’s Bottom Line

BMRContinued from page 29

2. Ration intakes that are typically elevated with BMR silage also contribute to an increase in the intake of total daily starch. This will be mag-nified if corn-silage inclusion rates are also increased.

3. Ration adjustments may be needed with BMR corn silage, as with conventional corn silage, to compensate for increased starch digestibility over time in fermented stor-age.

4. Field experience suggests the physically effective fiber is less than that of conventional corn silages due to the fragility of reduced-lignin fiber, and may result in the reduction of the rumen mat, compared to conventional corn silage.

5. Some nutritionists adjust BMR-based rations with slightly higher neutral deter-gent fiber – 32 percent to 35 percent – and physically effective fiber – 23 percent to 25 percent – levels than in herds feeding conventional corn silage and sometimes request that BMR silage be chopped 2 to 4 millimeters longer, for example 19 to 21 millimeters, to help maintain a suitable rumen mat.

6. Growing environment impacts BMR similarly to

conventional hybrids. If the growing environment results in lower fiber digestibility among conventional hybrids — for example, excessive moisture during vegetative growth — BMR hybrids will also be lower in neutral deter-gent fiber digestibility than expected. It is important to analyze for the digestion rate of the B3 or neutral detergent fiber pool, so ration-balancing programs can properly esti-mate the energy and microbial protein production from the BMR silage.

7. When feeding significant amounts of highly digestible corn silage, it is advisable to frequently monitor milk com-ponents along with manure consistency, cud-chewing, total mixed ration particle-size consistency and any evidence of sorting.

8. Field experience with herds that are borderline for effective fiber and/or acidosis issues and experience fat-test depression problems when starting to feed BMR silage have been successful in resolv-ing the problem by either reducing grain – especially high-moisture corn – or add-ing sources of physically effec-tive fiber, such as straw, to help build a rumen mat and encourage cud-chewing.

Bill Powel-SmithDuPont Pioneer, a corporate

sponsor of PDPW

Nutrition consultants in the agriculture field often consider themselves solid nutritional resources. Many have a reputa-tion for being leaders in the field.

When contemplating what it entails to be considered a resource, it includes technical expertise and competence in the field, in-field and on-farm experiences, background, knowledge of nutrition-model-ing and farm-analysis software, and other countless areas.

Another large component, possibly even the most import-ant characteristic of being a resource to producers, is being trustworthy. What key charac-teristics or qualities does a con-sultant need to illustrate, in order to be considered a trust-worthy resource or to deserve the trust and confidence of their producers? The answer can be as simple as following one’s true values, of being able to be relied upon as an honest person.

Trust to a consultant is one of the highest forms of motivation, and it is vital to exhibit behaviors that build the ability to trust. There are several keys involved when building a relationship with producers based on trust. One basic rule consultants should follow is making sure their actions and words match, and that they are consistently following through to show they are reliable and dependable.

It is also important before making commitments that con-sultants maintain realistic expectations and be up front about what they do and what they expect in return from their producers. Nutritional consul-tants want to make sure that these goals are attainable and that they will be able to fulfill their obligations.

If they commit to do some-thing and do not follow through, producers will come to believe they should not trust the

consultants. Consultants must show how much they care, through their actions.

Caring is also a key character-istic in developing and maintain-ing a relationship based on trust. The agriculture industry has the reputation for being compas-sionate in what they do; it is in the nature of a farmer to care for the environment and the land, to care for their families and friends, to care for their employees, to care for their animals, and to care about the positive image of agri-culture in the public eye.

Consultants and business part-ners also need to genuinely care and give attention to the things that matter to their producers. Remember the Golden Rule; treat people the way you want to be treated, and always show you have their best interests at heart.

Another key to character and developing trust is integrity. Integrity is synonymous with trust. Producers need to trust the people with whom they do business.

Consultants, in turn, need to be credible in all they do when pertaining to their producers’ businesses. They should never be willing to sell out their values but should follow high ethical standards.

Always do the right thing and tell the truth. By being fair and respectful, and keeping the promises we make, consultants will gain and sustain trust with their producers.

Being a trustworthy resource is something consultants must work hard to earn. It can take years to build a reputation of trust, but it only takes a small time to lose. Consultants must permanently demonstrate that they can deliver on their prom-ises while maintaining their honesty and principles.

Michelle Woodman Landmark Services Coopera-

tive, a mission sponsor of PDPW

Are you a resource worth trusting?

Page 31: Dairy's Bottom Line January 2016

MarketplaceProfessional

Dairy Producers®

1-800-947-7379Dairy’s Professional

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facebook.com/dairyproducers @dairypdpwS7701A Denzer Rd. • North Freedom, WI 53951

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Members of the Professional Nutrient Applicators Association ofWisconsin, the Minnesota Custom Applicators Association, IowaCommercial Nutrient Applicators Association, PDPW & DBA. Excellentworking relationship with DATCP, DNR, and UW-Extension personnel.

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January 2016 • PDPW • Dairy’s Bottom Line 31

Lighting upgrades provide one of the quickest, most cost-effec-tive energy improvements on a farm. Rapid changes in lighting technology mean new products that provide brighter, lon-ger-lasting light. New lighting products are becoming more affordable and available for a variety of applications.

These five best practices can be utilized to save energy and money on a farm.

1. Turn off lights when not in use – this is the fastest and easiest way to decrease energy costs in your facility. If a light doesn’t need to be turned on, turn it off. It costs nothing to modify behavior so this should always be the first step to energy efficiency.

2. Perform routine mainte-nance – performing required maintenance on bulbs and fixtures is a simple step to decrease energy costs. This helps extend the usable life and reduce the need to replace bulbs as frequently.

Poorly maintained lighting systems cost far more in lost productivity than in energy wasted. Basic maintenance steps include: clean fixtures, bulbs and lenses every six months with a moist cloth; replace lenses if they appear

yellow; and repaint small rooms annually and large rooms every two to three years to enhance the amount of light reflected.

3. Upgrade to energy-effi-cient lighting – there are many different lighting tech-nologies available, such as com-pact fluorescents and light emitting diodes or LEDs, and each has a direct impact on energy savings. Lights that operate the most hours use a greater amount of electricity, so upgrading those fixtures first will save the most money.

New lighting technologies aim to increase lamp lifespan while maintaining appropriate light output. Numbers to look for when selecting lights are the lumen maintenance factor and the number of lumens per watt.

L u m e n m a i n t e n a n c e describes how much light is lost during the lifespan of a lamp. Lumens per watt is the amount of light produced for each watt of electricity consumed.

4. Utilize timers and motion sensors – timers and motion sensors are both great tools to use when manually turning lights on and off isn’t feasible. Some options to con-sider for energy-efficient

lighting systems include con-trols that gradually turn light intensity up and down to simu-late the sun, daylight-sensing controls that use a photocell to change the light intensity based on the natural light available, and motion-sensing controls that turn lights on to ensure personnel safety and turn off when the space is unoccupied. Consider these over entrances, in hallways and in storage areas.

5. Implement high-effi-ciency long-day lighting – long-day lighting provides sup-plemental light by extending the short fall and winter days – Sep-tember through April – to 16 to 18 hours of light in order to increase milk and other livestock production output. In poultry, manipulating the number of

lighting hours per day can facili-tate year-round egg production.

In dairy cows, increasing light exposure through long-day lighting improves heifer growth and increases milk production. The average light intensity in a barn needs to be at least 15 foot-candles at the cows’ eye level to simulate daylight. This can be achieved by installing sealed fluorescent or LED light fixtures over the manger.

In most stall barns natural daylight is insufficient, therefore the manger lights also need to be on during the day. Timers and photo sensors should be installed to ensure consistent light and dark periods throughout the day.

Bobbi Rongstad and Nicole Zaidel, Focus on Energy,

a corporate sponsor of PDPW

Shining a light on energy efficiency

Rapid changes in lighting technology mean new products that provide brighter, longer-lasting light.

Page 32: Dairy's Bottom Line January 2016

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