Explore how dairy farmers are battling trade wars and immigration policies to survive. Uncover their struggles and resilience in our in-depth report.

Dairy farms, traditionally a cornerstone of our economy, are finding themselves increasingly squeezed. Trade wars and potential immigration crackdowns have emerged as silent predators in the world of America’s dairy farmers. These unforeseen challenges pose real threats to their livelihood while creating obstacles in their ongoing efforts to supply our nation with high-quality dairy products. So, how exactly do these issues impact the American dairy industry? In this article, we will explore first-hand how our dairy farmers grapple with the turbulent tides of trade tariffs and immigration laws.

The Trade War’s Toll on America’s Dairy Farmers 

Consider the economic ripple effect this conflict triggers. The war of tariffs bleeds into industries far-removed from the disputed goods, ensnaring small sectors like our dairy farmers in its tide. When tariffs inflate the price of American dairy, foreign markets seek cheaper alternatives, leaving our country’s dairy farmers with overstock and lessened demand. Inherent in this economic hardball are the local family-run dairy farms. They’re the ones feeling the crunch more acutely as they struggle to compete with larger agricultural businesses backed by the buffer of big subsidies. 

Using California’s dairy quotas and Canadian dairy quotas as a live example, think about this imbalance. These quotas control the amount of dairy each farmer can produce to avoid a supply-demand imbalance that would crater prices. However, disruptions introduced by trade wars distort this balance, introducing extreme volatility in market prices that ripple back to our local dairy farmers. They are suddenly left grappling with unforeseen challenges of surplus and drowned prices. 

Naturally, the question arises – why didn’t the farmers counteract the international trade disruptions by tapping into the government’s farm subsidy programs? It sounds like a sensible solution, doesn’t it? Interestingly, the federal government has long subsidized America’s farmers, significantly affecting the food supply and consumption habits. You may think it helps to even out market inequalities and provide some semblance of stability for farming households. The truth, however, is more complex. These subsidies were placed out of reach of trade negotiations, thus thwarting liberalization in agriculture for three decades. The result? Passage of new and more distorting farm subsidy programs in 2002 made the U.S. less credible in WTO negotiations. 

Small farmers, particularly those operating family farms, attempted to keep up with their more giant counterparts. Nevertheless, they were crippled by the ideological invisible hand of economies of scale that favors larger, corporate-run units. Post 2002 farm subsidy programs added a further blow, putting smaller farmers at a greater disadvantage. Although it became a high-profile issue in Doha round of WTO negotiations for less-developed countries, practical changes on the ground remained marginal. 

Now is the time to understand if reducing farm subsidies in the U.S. and other rich countries would indeed help poor farmers and promote trade over aid for economic growth. The fight to stay afloat is real and urgent for America’s dairy farmers in this era of trade wars and shifting immigration policies.

Strategies for dairy farmers to survive trade war

Staying afloat amidst tumultuous trade wars requires dairy farmers, like you, to be creative, resilient, and ready to adapt. You’re not just contending with the whims of the weather anymore, but geopolitical conflict and market volatility. Let’s highlight some helpful strategies. 

1. Lean into Financial Risk Management tools
   As a dairy farmer facing trade wars, you can manage your own risks using market-oriented financial tools and strategies. Forward contracts, for example, are a particularly useful tool. These contracts allow you to lock in a price for your milk supply in advance, thereby safeguarding against unpredictable market fluctuations. In parallel, you can work towards building a nest egg, diligently paying down any debt, and contemplating diversification of income sources. This multifaceted approach aids in risk reduction, granting you some control amidst the unpredictable fallout of trade wars.
2. Understand Quotas: California and Canada as Case Studies 
   Understanding how milk quotas work can be a game-changer, particularly in the midst of a trade war. California, for instance, has replaced its quota system with a new, market-oriented system, which allows more flexibility for dairy farmers. The Canadian dairy industry, on the other hand, has a traditional quota system that could guarantee a minimum amount of sales. By examining these quota systems, you might consider lobbying for changes in your favor or explore markets where your dairy products can enjoy guaranteed sale volumes.
3. Consider the World Trade Organization (WTO) as a Forum
   The WTO, often serving as the backbone of global trade rules, is a key platform for countries to pursue reforms in agricultural policies. You, along with other dairy farmers and industry stakeholders, can use this platform to push for a fair trade system and reduce trade-distorting farm subsidies. Such international forums are crucial in the advocacy for a balanced and equitable dairy trade — always remember that you have a voice.
4. Acknowledge the Impact of Agricultural Subsidies
   Recognizing and understanding the role of farm subsidies is crucial. These subsidies, although helpful for some, often give an unfair advantage to larger agricultural businesses, making it hard for smaller farms to compete. Advocating for a reduction of such subsidies in the U.S and other affluent countries, can help level the playing field and foster fairer competition. Your fight against the trade wars may involve championing a change to these subsidy policies; providing a friendlier climate for smaller farms to thrive.

Unraveling the Impact of Immigration Policies on Dairy Farms

Consider this scenario–it’s early morning, and you’re reaching for a jug of chilled milk nestled in your refrigerator. As you pour this creamy refreshment into your bowl of cereal or cup of coffee, have you ever wondered about the journey this bottle of milk has taken to land on your breakfast table? It’s a story that transcends the groves of almonds and oats. It’s about real people who’ve left their homelands, crossed challenging boundaries, and embarked upon a journey filled with uncertainty. A step undone can have sweeping consequences on an industry that you might not notice until your grocery store shelves begin to gather dust where milk jugs once sat. 

You might think that dairies and immigration policies have as much in common as chalk and cheese. However, a closer look reveals a profound interconnection, a fragile symbiosis where one cannot thrive without the other. The cyclical nature of labor in the dairy industry relies heavily on immigrant workers–to them, farms mean more than livestock and crops, but dreams of prosperity and a chance for a fresh start. It paints an intricate dance between the dairy sector and immigration policies, choreographed carefully to avoid any misstep. 

Immigration policies have far-reaching impacts, observed starkly in the steady decline of dairy farms. A startling 10% decrease in dairy farmers in just the past year paints a grim picture. Within two years, over 1,200 dairy farms have exhausted the last of their resources, hanging their milking gloves for the last time. The uncomfortable silence we described earlier? It’s a haunting echo that now fills once bustling barns. 

The story veiled behind every glass of milk you sip is a testament to personal struggle, dedication, and risk. It’s an essential thread in the tapestry of American agriculture, contributing not just to your refrigerators but to the social and economic fabric of the country. However, the implementation and adjustment of immigration policies have the power not only to dictate quotas, prices, and farm gate incomes but also to shape the very dreams and aspirations of the hardworking people who fuel this industry. 

Strategies for dairy farmers to survive immigration policies

It’s no secret that one of the most significant impacts of immigration policies on dairy farms is the availability of labor. Seasonal work visas, or H-2A visas, possess their known difficulties for dairy farming due to its year-round labor requirement. However, with stricter immigration policies, securing a consistent and legal workforce has become even more daunting. Here are some strategies you, as a dairy farmer, can utilize. 

• Call for Political Change
  Advocate for an extension of H-2A visas’ availability for the dairy industry. One might think that a single voice might not make a significant difference, but don’t underestimate the power of collective advocacy! Be proactive – reach out to your political representatives, become a part of agricultural alliances, or engage in conversations with policy leaders. Your voice can pave the way to sustainable change.
• Diversify Your Workforce
  While waiting for political change, explore possibilities to diversify your workforce. Local workforce development programs, vocational schools, and apprenticeship initiatives are excellent places to look for fresh, trainable staff. Investing in local talent could lead to long-term stability for your farm, even though initially, the learning curve may be steeper.
• Embrace Automation
  Gone are the days of reliance on manual labor alone. It’s time to lean into the technological advancements that the farming sector has seen over the years – like automated milking systems or other agro-tech. These innovations can reduce your dependence on manual labor and enhance efficiency in the long run. Be sure to weigh the potential benefits against the initial cost, but don’t shy away from investing in your farm’s future.
• Establish Shared Resource Communities
  Consider joining or setting up a shared-resource community with other local farmers. Pooling resources can provide relief from the individual burden of hiring, training, or securing visas for workers. In this way, you not only cultivate a supportive community that faces challenges and reaps the benefits together but also contribute to the survival and resilience of the entire industry. 

The Bottom Line

As you’ve journeyed with us in this exploration of America’s dairy farming landscape, you’ve seen the challenges brought on by the trade war and immigration policies. It’s a seemingly precarious ecosystem with few easy solutions. Both small and large scale farms grapple with these issues, their fortunes often worsened by the realities of market price volatility and trade barriers. Although subsidies provide temporary respite, the long-term sustainability of this aid is questionable. It’s evident the main beneficiaries are often the biggest corporations, while smaller farmers with lower incomes struggle, and the wider costs on health and environment are frequently overlooked. The dairy farming industry must continuously innovate and adapt to these evolving conditions to truly stay afloat. Similar to taming a wild bull, it’s challenging – but not impossible.

Summary: Dairy farms in the US are facing increasing challenges due to trade wars and potential immigration crackdowns, which threaten their livelihoods and hinder their efforts to supply high-quality dairy products. These conflicts are particularly affecting small sectors like dairy farmers, who struggle to compete with larger agricultural businesses backed by big subsidies. Disruptions introduced by trade wars distort market prices, putting local dairy farmers at a greater disadvantage. The federal government has long subsidized America’s farmers, but these subsidies were placed out of reach of trade negotiations, thwarting liberalization in agriculture for three decades. The passage of new farm subsidy programs in 2002 made the US less credible in WTO negotiations. Small farmers, particularly those operating family farms, have attempted to keep up with larger, corporate-run units but have been crippled by the ideological invisible hand of economies of scale that favors larger, corporate-run units. Post-2002 farm subsidy programs added a further blow, putting smaller farmers at a greater disadvantage. To survive trade wars, dairy farmers must be creative, resilient, and ready to adapt. Strategies include using financial risk management tools, understanding milk quotas as case studies, considering the World Trade Organization as a forum, and acknowledging the impact of agricultural subsidies.

We live in a time where pretty much anything can be seen and heard in real-time. With instant messaging and 24/7 news updates, it is easier than ever for the dairy industry to fall into making stereotypical assumptions based on a person’s gender, culture, religion, or physical attributes. The global dairy business has never been so in-the-screen-faces of their dairy consumers and their own competitors.  When the supply chain is disrupted, you know it. You see the empty food shelves?  You see the protests. When animals are mistreated, it is shown in shocking close-ups. Gender equality is instantly highlighted in the news. Instant data inspires instant analysis.  But to be fair, instant analysis can also be instantly misleading. 

Dairy Miss-Information Versus Historical His-Information

Dairying is not a male or female thing.  Everyone reading this article can point to numerous recent Blogs, Seminars, Magazine articles and Research papers to support their position. I bring this up because of the “rock and hard place” situation many of us find causing division in our own workplace.  His-story versus Her-story.  Must the work of dairying be one gender or the other? Although it is easy to acknowledge the progress of positive examples, it is impossible to eradicate bias completely.  We have all been raised with some form of gender bias. If we must play the gender card, we have already fallen into the gender trap. We either “act” like a boss knocking at the door or is the door being opened to all. Is there a welcome mat or a doormat?

PROBLEM? DISPARITY OR LACK OF CLARITY

Throwing out the Ladies and the Boys’ Club with the Bathwater

Sometimes the easy question asked by women is, “Are we are own problem?” The easier answer is: “We are all part of the problem.”  Female decision-makers are just as biased as men. It follows then that we are all part of the solution. Men are in positions of power where they can (and do) help the women in their organizations rise to the top. Helping anyone rise isn’t measured by a pat on the back or a verbal, “way to go!” Sometimes the most help is a informative analysis of the job requirements accompanied by the strengths and weaknesses of the person.  This opens the opportunity to improve and grow in the position. Clarity isn’t just positive, sometimes it requires recognition of what may hold the person back. Regardless of gender, workers need to be clear about qualifications, on job training, reimbursement, and incentives. The real pros and cons are not pro gender or con gender. The more we can work together to create positive change, the faster that change will happen. 

THE POSITIVE AND NEGATIVE POWER OF THE GENDER GAP

We all have been conditioned to jobs that are Ma’am power or man-power. When you see a dairy job discussed, do you have an automatic gender response?           

• Calving
• Bookkeeping
• Team boss
• Board representative
• Expert nutritionist
• Genetic Advisor
• Dairy Cow Vet

Beyond the Glass Half Full

There was a time when we didn’t talk frequently about Glass Ceilings in the workplace.  Now we have added the Glass Cliff. Glass Cliff refers to the phenomenon of women in leadership roles, such as business executives in the corporate world and female candidates for political office, being more likely than men to be promoted to leadership roles during periods of crisis or downturn, when the chance of failure is highest.

We might live happily with the “Glass Half Full” but now we have “Glass Walls” and “Glass Elevators” which refer to institutional barriers that isolate some employees — traditionally women and minorities — into jobs that don’t lead to executive advancement within a business.

IS DAIRY MOVING OUTSIDE THE GENDER BOX OR TO FEMALE HEADLINES?

Headlines about the success of dairy women are nice to see and I must admit that seeing the listing of female judges at cattle shows was partially responsible for the writing of this article.  The announcement noted that “An all-female line-up of Judges from the US, UK and Canada will judge his year’s UK Dairy Expo!” For those of you who follow The Milkhouse, you may have seen the comments by a reader who noted, “A good judge is a good judge. Why are we discussing a M vs F as some difference? Kinda sad. These women are no better or worse than anyone else. They can handle the task obviously so let them and let’s stop putting them in a box.” Dairy recognizes ability … in the barn, in the board room and in the show ring.

“OLD BOY BOYS CLUBS  AND GIRLS ONLY) JOB SILOS HOLD GROWTH DOWN”

Does your dairy put employees into silos?  What about other on or off-farm dairy interactions which you keep in their individual silos.  Now you have silo disadvantages such as: 

• There is limited interaction with people outside of the silo.
• Silos can lead to resistance to change.
• People within silos may avoid cross-department collaboration.
• Information silos, which exist when information isn’t shared between the barn, board rooms, and suppliers, can hamper dairy growth and efficiency.
• Think of support staff like veterinary, nutrition and feed suppliers. Silos in these areas can cause duplication of effort, lack of synergy and missed opportunities.
• Women are the best advocates for the dairy industry. Is this progress or another silo?

Silos can turn into a big problem for dairy workplace cohesion and employee engagement. They can result in weakened trust in the company’s leadership and deaden motivation for employees who end up feeling incapable of changing the culture and are left wanting more.

ONE STATISTIC ABOUT DAIRY WOMEN OWNERS  

The salaries of women who own dairies has been reported to be 80% of the salary of male dairy farm owners.  So let’s ask the second question.  “Do male dairy farmers make more or less than the salaries of owners in non-agricultural businesses?”  It was not easy to find a statistic to answer this question. Is this bias as well or something more?

IS DAIRYING DRIVEN BY MAKING MORE?

We think we know the solution to getting the best work done in the dairy industry. Clearly, it all boils down to “more”. But what are we adding up to get the success sum? More money on each dairy barn or business bottom line? More money from the government?  More perc money, trips or gifts from suppliers or customers? To remain more relevant more money is definitely a priority.

But what must happen BEFORE more money?

In dialogue with THE BULLVINE readers and our networks of dairy farmers and dairy research and business connections, we are hearing that, while the above list of things is nice, more is actually referring to three things: more workers – more workers and -more workers.  Every sector needs to have proactive productive staff ahead of everything else!

WHAT’S GENDER GOT TO DO WITH MORE?

It’s simply undeniable that in virtually every hiring decision, discrimination is still quite common. There are simply too many studies out there on virtually every type of decision — hiring, housing, loan approvals, etc. showing that, if the person making the decision knows the gender or the race of the person applying, the likelihood of discrimination goes up, even when the applications are identical in every relevant way.  That is largely because of our implicit biases, something that even the most enlightened among us can easily fall into without even realizing we’re doing it.

FOR FURTHER READING:

Before we wrap this article up, it might be useful to take note of other sources that are discussing this topic:

• USDA – USDA ERS
• Canada – agriculture.canada.ca
• Zippia – dairy farmer demographics and statistics in the US

TECHNOLOGY: DO SUCCESSFUL DAIRIES HAVE THE REMOTE-EST IDEA?’

While looking for the correct solution, you might think that technology is a non-gender answer.  But that may not be factually true either. Who takes up new technology faster?  Men or woman?  Where’s the proof of that?  If technology has a huge effect on money-making, there might be a corresponding shift in who manages it or who is allowed to manage it. The competition for productive effective labour is intensifying. It encompasses many gender issues such as:

• Gender-neutral parental leave.
• Access to training
• Paid time for training.
• Diversity hiring applied to actions.

These things are becoming true success differentiators.

THE BALANCE BETWEEN HUMAN WORKERS AND INTELLIGENT ROBOTS

We now have increasingly capable robots and artificial intelligence (AI) systems that can take on tasks that were previously only done by humans. This leaves employers with some key questions: how do we find the balance between intelligent machines and human intelligence? What roles should be given over to machines? Which roles are best suited to humans? There’s no doubt that automation will affect every industry, so dairy leaders must prepare the people and technological environments in their dairies and dairy support organizations for the changing nature of work. Change is here.  What do you fear? 

The Bullvine Bottom Line

There will always be reasons to be afraid. You could find yourself paralyzed with fear because you think your business is on the line, or you could be afraid of making a mistake and feeling ridiculed, disliked, misunderstood or just plain stupid. These fears, while normal and understandable, can also be quite destructive to growing your dairy business. Some of the most inventive and game-changing ideas have been born out of errors. Original ideas come to life when you dare to be different, keep an open mind, and have no fear of crashing and burning. This is true regardless of the gender of your team.

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Dairy farms in the US are consolidating at a faster rate today than any other agricultural commodity. And it isn’t only happening on the farm itself. A recent BULLVINE article addressed consolidations in dairy sire lineups. “Many of the smaller A.I. units have been purchased by larger genetic players and the rate of change has accelerated considerably. (see Stud Wars May ’21 – Attack of the Clones). Obviously consolidation is not a new phenomenon in a single aspect of the dairy industry. But, in the interest of what is most desirable, let’s look at dairy farms from the perspective of size. 

AMERICAN DAIRY SIZES AND PRODUCTION

There are many ways to gather actual statistics about the current size of dairy farms and how many cattle each herd sector is milking. These statistics have been reported by USDA 2019?

• In 1987 the average US herd size was 80 milk cows.
• In 2017 the midpoint in herd size had reached 1300 cows
• Currently US herds of 1000 and more cows represent 58% of US dairy cows
• US herds 1000+ cows produce 62% of total national production.
• Between 2002 and 2019 more than half the licensed US dairy herds exited the industry.
• Herds over 2000 milk cows have the highest on average net returns

In simplest terms, less than 6% of dairy farms are milking almost 60% of the total number of cows. At the top end of the scale, the average herd size is more than 3,000 cows. The total number of cattle is not getting smaller even as the total number of farms is dropping dramatically.

REDEFINING the ACCEPTABLE ROOTS of LARGE AND REDEFINING WHAT IS SMALL

What is large? What is small?  Grandma’s small dairy farm worked sunrise to sunset providing for a specific group of people … the farm family.  Today’s dairy farm with the goal of supporting a family also works 24/7 but now must provide money for food, clothing, school fees, sports fees not only for the immediate family but also to provide milk products for 100 people. No matter what they physical size of the dairy is cash flow must be found for feed, labor, housing and replacements. Even beyond size, location and infrastructure could also be a limiting factor. When deciding whether to sell or consolidate, real estate values could be a major determining factor. Are generations of investment going to be reduced to nothing through mortgage payments or will it be cashed in for retirement? What door closes first?  Labor? Cash flow?  Feed? Animal health?

GLOBAL PROJECTIONS ALSO COME IN MANY SIZES

Wherever you are reading this from, you can most likely point to trends which are defined by fewer dairy farms of larger sizes.  Even in North America it is unrealistic to say that one situation applies in exactly the same way to the USA, Canada and Mexico.  South America, Asia and Europe are going through the same reshaping process.  The basic point is that dairy industry consolidation is global and complicated.  Causes, effects, sizes and methods cannot be simplified into one easily explained phenomenon such as milk prices or national supply and demand.

FAMILY FARM OR FACTORY FARM?

We are aware of the discussions about differences between historically revered family farms and factory farms which are reviled by many.  Are the two mutually exclusive?

We could dismiss those who uphold historical family farms because we recognize that their position is driven by handed down memories and not actual facts or experience. We all value our historical roots.  What is becoming a hurdle is that there are new perspectives on the value of “large”.  If everything large is put into one basket, we find large entertainment, large populations and large politics all jostling together and impacting our positive or negative experience of our life choices. Large farms gather from the negative

DOES SIZE ALONE INVALIDATE FAMILY FARMS?

Can we factually determine at what size a family farm becomes a factory farm? If large families require larger dairy operations, does the term family farm not apply?  If the owners of a large dairy do not have multiple family generations sharing management is that dairy, regardless of size, a factory farm?

Modern dairy provides the opportunity to move beyond labels and stories.  The challenge is to move toward well-considered value-added food production while avoiding misguided milk production massing.

WHAT DO FUTURE DAIRY FARMS LOOK LIKE?  THE PROS & CONS OF CONSOLIDATION

When considering the pros and cons of dairy consolidation there is not a clear winner. The oft repeated conclusion is that successful large, consolidated farms will be more efficient in terms of producing milks solids. They will achieve this by carefully incorporating generations of dairy knowledge, by themselves or others, into active present-day decision making. Is dairy muscle memory an absolute requirement for dairy success?

You might ask, “Does every consolidated dairy farm have more than one generation of farming experience?  Do any have five generations?”  These are interesting questions, but the answers don’t, by themselves, impact the success or failure of consolidated dairy farms. Mutual respect, teamwork and diversity of generations and workers does make a difference. New players have the opportunity to access and enact successful processes. Most important is knowing on a dairy farm to dairy farm basis what the limiting factors are.

LABOR SHORTAGE HITS DAIRY REGARDLESS OF SIZE

When small farms give in or give up, what drives the final decision?  In many cases, it comes down to people – specifically the people needed to do the work. Dairy isn’t alone in facing the devastating impact that happens when it is impossible to find accessible and effective labour. Choices between the family business and the future success of the next generation are difficult if not impossible to choose between. Demanding work schedules and physically demanding jobs mean that fewer people are choosing dairy work.  Add to this that there is limited access to educational opportunities for farm workers.  At a basic level, it may come down to individual preferences for living near larger urban communities with greater access to infrastructure such as Internet access, health services, entertainment, schools, and shopping.

However, jumping to farm consolidation does not automatically provide the solution to labor problems. Housing, health care, education and transportation problems continue to loom large. Additionally, are the problems of local and federal regulations regarding immigration and, as the pandemic has highlighted, no dairy farm can operate in isolation from the health and welfare of the local community.

SEEN AND UNFORESEEN CONSOLIDATION CHALLENGES

 Problems of law, labor, land, water, and energy can be foreseen, negotiated, and planned for. However, unforeseen forces also can impact consolidation plans.  Something as simple as the price of lumber, which has been rising exponentially, has an effect on implementing or maintaining consolidation effectiveness. Also largely unforeseen are the extreme disruptions from freezing, floods, drought and fires. The dairy industry has daily reliance on nature and environment in order to meet the demands of consumers and to improve sustainability of its production ecosystems. No matter what size your dairy operation is, you must be able to produce 24/7.

MIRED IN MILK, MONEY, AND POLITICS

And so, we realize that consolidation does not boil down to a simple “either” “or” decision.  It is all to easy to get mired in milk, money and politics.  When does the cash cow of dairying become the barn lane cash out?  If only it was as easy as the slogan, “Buy American.” Unfortunately, dairying like thousands of other industries, does not exist in a vacuum.  Until every single product, nutrient, health product or piece of equipment is produced in the US. there is need for three things: global partnerships; consumers and money.

Even imagining a perfect world where these inputs are being handled, the cash implications of dairy overproduction are very real right now and must also be addressed.  Too much milk affects every producer.  Even in countries with supply management, the political ramifications in trade discussions, consumer rights and agricultural negotiations changes money margins on the farm and can be used as a political pawn. For example, it is recognized that supply management protects producers. What isn’t often talked about is the way supply management may protect exit from the dairy industry, but also the way it inhibits entry. Politically decision makers also walk a fine line between determining dairy industry relevance based on too big, too small, or too independent. While focused on elections and re-elections an entire industry could evolve into shrinking relevance.

DIGITAL APPLICATIONS AND CONSOLIDATION – Grow or Go?

Regardless of the size of the dairy operation, effective production relies on veterinarians, nutritionists, and agronomists to name just three sources outside the on-farm team.   Today we need developers of digital applications to integrate data points. Effective dairy management absolutely requires the ability to visualize the best way to improve decision making.  Without new applications, dairies face years of in-fighting over the same problems.  The opportunity provided by digital applications is that of creating outstanding dairy solutions to what have been oft-repeated problems. Will we fight for the status quo until the last puff of paper and pencil files spell “Closed”?  At some point, the larger dairies begin to question why they must carry all the technology and research and development. Is there mutual benefit?  Regardless of size is it possible to navigate change faster, while being more inclusive

EFFECTIVE INDUSTRY OR DREAM ENVIRONMENT WANTED BY CONSUMERS

Effective is possible in many sizes.  But the key to effectiveness does not rely on size alone. An informed consumer has been shown to be able to make food choices outside of personal experience with the production process. Growth industries built on an intimate purchasing experience such as is found within focused sales locations selling predominantly one beverage – think coffee or smoothies – highlights that the product not the size of the company, can be embraced by the consumer.  The question is, “Why do consumers feel they know how the dairy industry should be run. Their long past memories influence what they think it should look like. And driving all of these is the question of “What convinces people to make a beverage choice?”

COMMUNICATIONS & MEDIA – “Look who’s Talking”

We are well beyond the time or place where a simple answer can be summed up in a few words.  But open conversations will get us to a new dairy future. And this brings us to dairy communications and the media. We need ag communicators to reach out and make real connections with the new generation of consumers. Continued viability means that the dairy industry needs robust support from consumers and, therefore, dairy must tell the dairy product story with provable facts and transparency. Consumers need information which is based on integrity and real industry skill and development. We cannot stay locked in dated dairy – whether it is our own dairy or wrapped up in consumer long-ago memories.  Equally worrisome is the danger of simply changing everything to something new and different.  Designer Dairy may be successful, but it must be built on healthy, competitive, and sustainable products.

BULLVINE BOTTOM LINE – Where does it end?

The dairy industry of the future will not succeed if decisions are solely based on size.  The dairy industry of the future will not succeed, if decisions are based solely on sentimentality. In dairy consolidation, the whole is greater than the sum of its many dairy parts. A relevant dairy farm must be actively engaged with suppliers, professionals, local communities and consumers.  It is time to decide if dairy industry totals are temporarily readjusting or being permanently left behind.

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As the global pandemic continues, the dairy industry is asking “What’s New?” the simplest answer is one word – “Coronavirus”. At this time, even though the majority of countries and businesses are still very much in the crisis management phase of COVID-19, some are already exploring how they can set themselves up on the right trajectory for growth as they come out the other side. Although it is very easy to fall prey to negativism, it might be both refreshing and forward-looking to actually consider the positive potential for what post-Covid dairying could look like. 

New Priorities

In dairying, there are many variables that are beyond your control which makes it necessary to know what you’re aiming for and what you can actually do. Don’t wear yourself out trying to meet standards set by news headlines, neighbours or anti-Ag activists or unrealistic romanticism. Do what makes it possible for you to maintain your sweet spot during hard times.  Don’t strive for excellence. When we clearly know what our plan is, we are not derailed by criticism. Do you need a home gym? A pool? New family computers? Others not walking in your shoes may criticize but you must make plans that make it possible for your business to continue to support you and your family … that means the children too!

New Dairy Org Chart

It is impossible to be a master of everything. Today dairy managers need to excel at screen time, as animal feeders, as animal breeders and animal doctors. Post-Covid the highest priority will be putting together new teams to efficiently and effectively handle all these special skills. 

Post-Covid there will be new definitions for the collaborations between your dairy everyone else who provides support or derives payments for expertise, consulting or products. We need all that expertise but how will we get it?  No more large group gatherings of 100s at trade shows or farm days. No more conflicting overlapping areas of expertise which waste time and cost money and have been excused by saying, “It’s the way we’ve always done it. We value lifestyle over profit.”

New Business or Old Lifestyle

Post-COVID it well be necessary to admit “Sustainable dairy farming isn’t all about the lifestyle”. You would find it hard to name any other relevant industry that professes to stay the same because of the “lifestyle”. Of course, there are very successful entrepreneurs who support their talents and hobbies through the companies they run.  So back to 24/7 dairying.  You can’t love the living but then continually ask for someone to “subsidize” it with financial support.

Speaking of support, this takes us one step further. Before, during and after COVID, the success of each dairy operation is impacted by every person working to produce products from milk. From ownership to staff to each on-farm provider, the need will be for openness and transparency in all communications in order for support to be relevant and ongoing. The entire staff fears for their futures, their health. Many don’t have savings to fall back on. They fear for their security. Hard conversations will be needed as entire dairy teams work through the challenges of COVID.  Family.  Employees.  Suppliers.  Who is entitled to draw their living from your lifestyle? What will be the difference post-COVID?

New Supply Chain Interaction

One post-COVID visible difference will be that there will be many more who work from home. In these first months, we’ve discovered that jobs no one thought could be done remotely can be handled very effectively with a laptop computer and video conferencing. At the other end of the spectrum, delivery service drivers have become essential to our new lifestyle. We still need police, firemen, pilots, and others to report to work. But many white-collar jobs that are now being done from home will remain there when the crisis passes. On the dairy farm, the winners will be dairy industry suppliers, who will continue to make the interactive business to farm processes easier. The post-COVID winners will be those suppliers and consultants that offer good prices, prompt delivery, and user-friendly websites that provide measurable value to the dairy operation. We could just hang on for now or we can use this time to make all interactions a more cohesive part of the dairy operation puzzle.

New Technology

Unsurprisingly, dairy operations that were furthest along with their digital transformation journey before COVID-19 struck are tending to adapt to the crisis better than their peers. Their technically proficient business models and working processes meant that they were able to pivot more rapidly or accelerate changes already underway. This could lead to complacency or it could be seen as an opportunity to take the dairy to the next level. For some, this could mean turning to or expanding robotics.

The rise of robotics is a two-edged sword. On the one hand, it improves productivity and reduces vulnerability to the impact a future pandemic could have on labor. On the other, it carries the fear of leaving people without work. Managing that crisis is an old dairy challenge that needs a new answer. We need to use technology to augment, not replace, people. Robotic technology can do more than simply feed and milk cows.  

New Big Picture Planning

We need to reshape how we grow, transport, package and consume our food. Currently, our straight-line methods involve what some call take, make and waste. We need to find ways to decrease dependency on fossil-fuels and shorten the distance from producer-to-consumer. Continuing the agriculture commitment to mitigating the climate crisis and respecting and improving workers’ rights are part of the new perspective that is vital in order to build strength resiliency. When the urgent part of the crisis has been navigated, we need to go forward with a new commitment.  Interesting ideas are easily accessible and provide an interactive discussion on blogs such as “Less Waster and More Value”)

New Perspective Combining Health For Herds And Humans

In the dairy industry, we have personal experience with biosecurity and how to handle it.  Usually, our cows are the focus of the discussion.  Today it is about controlling an epidemic as it strikes humans. What we really need to develop is how we anticipate, discover and act.  Having the knowledge isn’t effective if we wait until it is too late to act. For example, we already are well aware that most major human infectious diseases have animal origins, and we continue to be bombarded by novel animal pathogens. Yet there is no ongoing systematic global effort to monitor for pathogens emerging from animals to humans. An ongoing systematic effort makes headway in describing and categorizing the diversity of microbial agents to which our species is exposed. We could characterize animal pathogens that might threaten us in the future. We could detect and control a local human emergence before it has a chance to spread globally. In other words, the pandemic has revealed the gaps in our current public health infrastructure.  Will they still be there post-COVID?

New Financial Solutions

Getting a grasp on big picture philosophy is often difficult. It seems easier to move from big picture imagining to down to earth dollars. What will post-COVID dairy financing save, keep or throw away from the experience? It is always easy to cut expenses and weather through until a more normal economy reappears. However, some dairies are thinking of trying new solutions. They don’t intend to reinvent the wheel.  Instead, they are looking at dairy dollars in a unique way.  Weighing the cost of cost-cutting or expenses in terms of what the actual impact is? For example, culling on the basis of replacement cost alone does not consider the cost of poor fertility, high breeding costs and the labor costs incurred.

Dairying is well aware that governments are going to be stretched to their limits in providing fiscal and economic stimulus. At some point in time, the hope is that we will emerge from the crisis stage. At that point, governments – federal, state and local – will be faced with massive debt problems. There will be attempts, realistic or otherwise, to recoup and rebalance the books.  Who will receive new benefits?  Who will be a new pawn?  

While we are always tempted to turn to self-protection, there are always new opportunities to find new ways forward and that could mean investing in new research. Post-COVID it will be valuable to collect and coordinate dairy data for the good of the entire industry. (Read more: “Opportunity Knocks! Will Dairy Answer?”) The goal is to keep successful new genetics and new innovations going over the long term.

New Globalization

As we live through the growing reality of Covid-19, we see governments with wealth turn to prop up their own economies as the developing world sinks into chaos.  New rules and new restrictions are mounting as each country protects themselves and keeps their money at home. At first, this protectionist attitude seems profitable but it eventually begs the new question, “Who is buying our products?” “Who is making our products?” An editorial in Western Producer sums it up this way, “Jumping off the globalization bandwagon will forfeit international advantages created by economies of scale, such as prairie agricultural, the advantage of the developing world in labour and manufacturing as well as incentives for international investment, which mitigate risk from all perils including disease. (Western Producer editorial published June 18, 2020). Will we see a coordinated global response or will we create more division, competition and a growing mountain of regulations?

New Heroes

“We are balancing between amazing acts of courage and heroism as our frontline healthcare providers lean in to take care of people across the nation and the world” says Kimberly MacPherson, teaching fellow at the Haas School of Business. At the same time, there are those who say “in a lot of ways my life has not changed all that much.”  Unfortunately, there are many more who are not so blessed. Now and post-COVID we need to open our eyes and ears to those who need unselfish, hard-working leadership, sharing and humanity.  These describe the dairy industry people and food producers.  That is why people have not been forced to stay home for three months and produce their own food. Heroes do what they do best and don’t stop until the job is done.

The Bullvine Bottom Line 

Post- COVID the new hope is that all dairy producers understand that we all need to work together.  One country cannot survive without the others. Producers cannot survive without consumers and everyone in between. We will find what is new, when we are proactive and create an intentional preparedness plan for a new dairy future.

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It is happening all the time! Bullvine readers and Milk House members have been commenting that the dairy cattle breeding industry has changed too much for them.

How Much Change is Too Much?

As far back as 1980, the daughter performance-proven sire (95+% REL) had replaced the brood cow (15-25% REL) as the most important animal in the breeding population.

Today fewer and fewer dairy females from higher PTAT/CONF or show families command high prices.

But most difficult of all for some dairy people is the fact that dairy breeding companies (formerly called A.I. companies) have responded to the need for change by developing their own male and female breeding lines to provide the genetics their customers demand.

Should Dairies – Even Yours – Resist Change?

If you have survived any length of time in the dairy cattle industry, you can probably point to the ways you have made strides forward in the genetic merit of your herd. It may have been in production. It may have been for overall type.

You can probably also name changes that are now arriving on your doorstep that are problematic for you. Changes in your herd’s genetic merit for fertility and longevity may be a problem for you. Or perhaps you struggle with changes in your herd’s health, functionality, and welfare traits.

Today we have sexed semen being widely used and genomic testing available but not universally used. Yet, we have merely scratched the surface when it comes to what advancements new technology will bring and what the DNA of an animal will tell us.

When you add in the very public problems that consumers are having with dairy farming, you begin to feel that change has you between a rock and a hard place.

Some dairies resist change so successfully that by the time they recognize the need for change, making any change at all is much harder to achieve.

Dairying, as Usual, is Giving Way to Constant Change

The reality is that the future in dairy cattle breeding and farming will not be the present or the past. Here are some facts to set the scene for future breeders:

• Changing Numbers
  The trend to 5%/year fewer farms due to economies of scale, limited labor, cost of technology, and increased production will continue. More and more herds will link together for milk processing, custom farming, feed storage and preparation, input purchasing, labor utilization, animal rearing/handling, etc. purposes. In some cases, expect to see 100,000 cows in a single linkage. Some estimates predict 6,000 North American farms will produce 90+% of the milk within 15-20 years.
  Who will your farm be partnering with?
• Changing Economics
  On-farm margins are tight. Surplus breeding stock sales cannot be expected to provide a profit over rearing costs. Genetics must contribute to increased revenue, improved efficiencies, and reduced costs. Economic improvement cannot be left up to feeding and management only.
  What are the strategies for your farm to address narrow margins?
• Changing Milk Marketing
  Milks with unique composition and high quality receive the premium at the farm gate. Farms are finding it advantageous to work in unison with processors and other farmers in order to balance milk supply with the demand for milk products. Breeding cattle for unique milks is an opportunity for the breeding industry.
  Is your farm in a position to obtain a premium farm gate milk price?
• Changing Technology
  It is increasingly costly to employ staff to milk, feed, care for sick animals, and record the data for feeding, breeding, management and business purposes. New technologies are replacing farm labor and provide the opportunity for improving herd and farm management. Animals must be able to perform with less individual worker involvement and attention and thrive in large groups.
  All new technologies appear to be great … but …which ones are a fit for your farm. Choose carefully!
• Changing Data
  Decisions based on data, including genetic information and indexes, are increasingly crucial in dairy farming. Herds are expanding the data captured for their own use and for use by their advisors, service providers, and animal/product marketers. Progressive dairy people tell us that they benefit by having access to data from other farms for benchmarking purposes.
  Make data king on your farm for you to be both profitable and sustainable.
• Changing Herd Service Industry
  Farms are deciding which services they need to use based on the cost to benefit ratio of the service rather than tradition or loyalty.  Not all current service and data suppliers will survive the next ten years.
  Without the profitable sale of breeding stock and the requirement for breed purity being important, breed societies are investigating aligning with other organizations. Herd recording services are capturing data and monitor animals, birth to herd removal, for many more factors. Cloud-based systems are becoming the norm.
  International genetic companies with aggressive breeding programs, owning both males and females, are here to stay. They may or may not provide insemination services, but most will provide services is genetics sales (semen and embryos), data capture, genotyping, herd management advice, on-farm systems, genetic evaluations, … and more. Some of their products, services, indexes, and information are proprietary. Dairy people are deciding if and how they use private services and information.
  Evaluate your services and your service providers and only retain the ones that positively impact your operation or your bottom line.
• Changing Farmer-Breeder Role
  The role of the individual independent farmer-breeder and the need for third-party verified data are faced with change. The fact is, they have already started to change.
  If your farm plans to be at the forefront of the dairy cattle breeding industry, are you making the necessary changes? Is your heart, or are the facts, your data and your analysis guiding your decisions?

Genetic Opportunities Must Reactivate and Rejuvenate the Dairy Breeding Industry

The production and type in dairy cattle have been greatly improved, but fertility, functionality and animal health have suffered. These and other new traits provide opportunities for breeders to produce animals with increased genetic merit.

Genetic suppliers, companies or individuals, need to consider addressing the following:

1. Improved animal longevity and livability through breeding for fertility, functionality, health and disease resistance. Breeders should aim to increase PL/HL by 60 lifetime days per generation.
2. With feed being 52-57% of total herd costs improving feed conversion efficiency for growth and milk production will be necessary. Breeders should aim to improve feed conversion by 5% per generation.
3. As milk revenue is 87-93% of farm revenue, breeding for increased fat and protein yield will continue to be necessary. Breeders should aim only to use sires that are in the top 20% of the population for both fat and protein yield.
4. For efficient milk processing, a correct balance of fat to protein to other solids is necessary to meet consumption demands. 4.3-4.5% fat and 3.4-3.6% protein is what is currently needed to produce the products consumers buy. Breeders should aim to breed for milk with a balance of 1Fat:2SNF.
5. Animal conformation has been improved to the point that the functioning of feet & legs and udders and the trouble-free birthing of calves need to receive the attention once placed on ideal conformation. Many breeding companies have already shifted the emphasis, and independent breeders will need to also change their focus with respect to animal conformation.
6. Lines of cattle will be needed globally to meet housing needs, to adapt to new technologies and varying environmental needs. (Read more: Can We Create Holstein Blood Lines to Feed The World?) Breeders should consider including new traits in their selection programs (beta-casein, kappa casein, hoof health, immunity, disease resistance, heat tolerance, slick gene, epigenetics, nutrigenetics, …etc.).

A vision based on both reality and desired outcome is fundamental to be a successful breeder. Unlocking the power of new data will be a necessity. Dairy breeders and companies supplying the animal genetics must be working ahead of the genetic needs curve to stay in the game.

The Bullvine Bottom Line

Individuals that choose the blame game for why the farmer-breeder’s role has been negatively affected by breeding companies are focused on the past and not the future.

Breeders and genetic suppliers must lead are measuring new traits and putting the appropriate emphasis on all traits. CDN research has shown that genetics can contribute about 50% of the on-farm gains in margins.

Moving forward using the results from both the farm and the lab is the only way to guarantee the dairy cattle breeding industry.

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Dairy farming is not what it used to be.  DUH. The only way to get paid for your milk is to provide it to people who want it in the way that they want it.  We are so convinced of this at “Specialty Milk Equals Money Everyday” looked at processors and consumers and the products that they want and will pay for. Successfully reaching this evolving market might require that as dairy producers, you have to change your mind about some aspects of getting the milk that you produce to the marketplace. Having said that, you may read this and rank yourself with those who are convinced that there is no need for you personally to change. Even faced with the incontrovertible facts of today’s overproducing, underpaying, profit losing dairy industry, we say, “I’m not changing.  My mind is made up!”

To date, your view of the world has provided you with a certain amount of dairy-producing success! In the past, there have been times when your view of the world was very different from the actual world, and you held firm to your course and made it through. You are crossing your fingers that holding on this time will work again.  However, past and present are no longer in step with success.  “The past foretells the future” only works when there is money in the bank, healthy animals on the farm and an ability to ignore all signs of desperation and disregard for the agitated voices at the farm gate who are calling to you to listen to them!

Choosing Friends Over Facts

Regardless of what side of the farm gate you identify with, we dairy farmers, like the dairy animals in our pastures are herd animals. We are happiest in a non-threatening and bonding environment. We do not want to be cast out or separated from the herd. Where the herd goes, we go.  If the herd says, “farmers are producing unhealthy products”.  We agree.  If the herd says, “The government will save our farms because we are an iconic part of our country’s history.” We sit.  And wait. We don’t believe these statements because they are correct.  We believe them because doing so makes us part of the group and we want to look good to that group. The statements are factually false, but socially accurate. When having to choose between the two, we often select friends and family over facts.

Friend Or Foe.  Who Do You Know? Whose Side Are You On?

There are so many truths in the food industry.  Milk is bad. (Lactose intolerance is real.) Farm factories are bad.  Small farms are good.  (Dairy intolerance is growing.) Pet owners love cows.  Dairy farmers mistreat cows. (Dairy farmer mistrust is on the rise.) While seeking, truth, we all strive to be on the blameless higher ground and, at the same time, to be connected with like-minded friends.  However, when opposing alignments regarding issues of health and family are affected, our openness becomes inflexible, and we dig into our protectionist position.

People who align themselves against what they call factory farms or what they see as animal mistreatment or what they perceive as destructive environmental practices, do so because they feel it keeps them belonging to their chosen group. 

The best way to change their mind is to sit down at a meal together.  Something about handing bowls of food around or even asking a stranger to pass the milk pitcher draws us closer than the usual divisive influences of where we live, how we speak, and what we wear.

Repetition Is The Law

The number of people who believe an idea is directly proportional to the number of times it has been repeated during the last year—even if the idea is false. For this reason, we need to learn not to keep attacking every piece of misinformation or unsupported fear-mongering. In frenemy situations, time is better spent championing good ideas than tearing down bad ones. There is no point in endlessly explaining why bad ideas are bad.  You are merely flamming the flame.  Feed the good ideas and let the bad ideas die of starvation.

“I Can’t Let These Idiots Get Away with This”

If the goal is actually to change minds, then I don’t believe criticizing the other side is the best approach. Like it or not, we are the voice of dairy farming.  Is it confrontational?  Is it huffily arrogant? Are we running for cover?? Must we win at all costs? OR. Are we as producers willing to not win in order to keep the conversation going? It isn’t simply in social settings.  The conversations need to open up with processors too. And with nutritionists and veterinarians.  In fact, with everyone we work with in the line from dairy stable to table

“I Want What You’ve Got!”

With so many hands lining up at the farm gate, we may perceive that we all have different interest. As stated, these competing interests involve feed suppliers, nutritionists, and veterinarians, to name a few. Even dairy associations join the us versus them, national versus state or provincial, battles.  We get so wrapped up in gaining an advantage that both parties lose focus and fail to provide the needed services that make the dairy industry relevant in the modern marketplace. In-fighting over shares of the pie is irrelevant if nobody in the marketplace wants the pie. 

Who’s Your Frenemy Today?

As the industry is challenged, organizational factors create new bands of frenemies around leadership, management and even core values.  Furthermore, something as simple as scarcity of resources can trigger new alignments and new conflicts.  A better solution would be to work together to find a replacement product or to prioritize the areas with the most urgent need.

In Dairy Wars There Are No Winners

It is ironic that a quick look at potential conflicts within the dairy industry can be quite extensive:

• Breeds vs Milk Recording
• Milk Recording vs Cloud Software
• Scientists vs Breeder Cow Knowledge
• Traditional dairy bull breeders vs AI
• Small vs Large Dairy Farms
• Nutritionists vs Vets
• Show Breeders vs Production Breeders
• Animal rights vs Dairy Farm animal management

We are so caught up in winning that we forget about connecting.  It’s easy to spend energy, labelling people rather than working with them. Our inter-industry fighting distracts from the biggest threat to the entire industry, which is out there and growing exponentially:

Milk vs Milk Alternatives

Is Milk A Healthy Diet Friend Or A Dangerous Health Enemy?

This is the core question that the dairy industry needs to address.  Articles such as the one by NBC News Health Editor, Madelyn Fernstrom, (July 26, 2018) “Is milk really good for you? “is a good starting point for fact-based discussions of the issues surrounding milk as a nutritious food source.

The Bullvine Bottom Line

The very fact that we are producing a food product means that we directly impact the personal health, family health and social lives of our customers. We don’t want to win a conversation. We don’t want them to change their minds about liking farmers or disliking modern farming.  We want consumers to enjoy delicious healthy food. We need to establish trust. If we can manage to be kind first and be right later, we can make good progress at turning frenemies at the farm gate into friends in the food aisle.

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Milk lost some of its unique identity over sixty years ago! When bulk on-farm pickup rolled in the lane differentiation was sacrificed for one truck convenience. Premium milk for fat content or other specific composition no longer reached the processor’s door. 

Guernsey Gold, could no longer be sold for its high carotene content as milk from Guernseys became  simply part of the load of milk from all dairy herds in an area.  Back then milk was primarily considered as a liquid drink and the need for keeping unique milks identified separately was given no importance.

“Set Yourself Apart or Be Set Aside”

The market and the consumer have both evolved. Today consumers want to know that what they are purchasing will have a positive effect on themselves and their families. Meeting these changed needs means that producers, of generic milk, will have a very narrow profit window. The choices for success, for those producers, have dwindled down to a small list:

1. Size up so that you profit from economies of scale
2. Use technology to minimize labor and to assist management practices.
3. Fine tune feed preparation, feed composition and feed delivery to cut costs or differentiate.
4. Breed beyond production and conformation to produce value-added milk.

Milk’s future value (2025+) will be highly dependent on its solid’s makeup or methods of production. Over 80% of milk, once processed, will end up in solid form. The dairy industry needs to re-think the way milk is bred for, fed for, transported and processed. However, as we all know, changing those factors does not happen suddenly. With future needs for milk and its solids in mind, The Bullvine promotes for consideration, discussion, planning and production, milk that will be used for solids, new and specialty purposes.

“Analyze What You Are Producing Or Paralyze Your Profits”

Every week at The Bullvine we join our dairy industry peers in thinking, writing and talking about the future of dairy farming.  As a milk producer, you live it every day.

A recent US study reported that the reason almost 85% dairy operations will go out of business will be because of one or a combination of poor management, lack of application of the economies of scale and/or not keeping up with the times in consumer demands.

Productivity and profit will be key contributors to on-farm success.  Most often dairy farmers think and talk about cost reduction but even more critical than squeezing every last penny out of costs is the revenue generated by the milk that leaves the farm. The dairy industry, farm to fork, has evolved. Keeping up with change is not a choice.  It is a necessity.

 “Want More Money!  Provide More Processor Value”

The first rule for the processor of a product is that the value of the product to the consumer rules the day. For most dairy farms their immediate consumer is the processor.

 If the value that the processor can derive out of the milk that leaves your farm is the base product price, then expect the current approximately $15-16(US) per cwt to continue.  Below the true on-farm COP.

The value of milk will be set by consumers not by dairy farms.

• Only if the processor can make higher valued products from milk received can farms expected to get a 10% to 30% higher farm gate price.
• Only for a limited number of dairy farms that self-process, will producers be the price setters.

Tomorrow’s Consumers’ Demands

As we move forward healthy low-cost grocery store foods will continue to be demanded by consumers and governments will continue to support and demand cheap food. Only foods that meet specific health, nutritional or lifestyle needs will be able to be priced higher than the base in-store price.

New products made from milk are being sought out all the time.. Groceries can be ordered on-line and delivered just in time to people living in developed countries. Milk products need to fit into that evolving model.

Where is Your Milk Value Added?

How many of these can you check “Yes” to when your milk leaves the farm gate?

Fat % composition or processing

• -full fat milk ,
• unique butters,
• specialty cheeses,
• unpasteurized or unique milks

Protein Composition

• beta casein (A2 allele),
• kappa casein (B allele)

Feeds

• organic
• forage (grass) fed
• carbon footprint reduced

 Management

• totally traceable,
• animal health and welfare (including dehorning),
• favorable animal environments,
• clean water source,
• farm with pristine industry image,
• grown locally,
• milk haulage pooling for differentiated milk,
• data management system to support verification,
• DNA testing for breeding, culling, feeding and marketing …

Denying the need to add a unique feature to the milk that leaves a farm will mean the farm is not keeping up with the times. Consumers buy on features not just on basic nutritional need.

“Value Added Indexes are Here.  Use them.  Develop Them. Ask for More.”

The following are some genetic factors/ indexes that will help milk processors derive more income from the milk producers ship. Most of these have become available during this century and farmers can expect more of these value-added indexes to become available in the future.

• Fat %
• Casein composition – A2A2, BB
• Reproduction – conception, calving ease, embryonic survival, haploid avoidance, …
• Polled and sound functional feet
• Health – DW$, CW$, Immunity+, Feet/Heel/Mobility, combined health trait indexes (CDCB/CDN), …

Producers who do not use this information are continuing to hitch their futures to horse and buggy days instead of going modern and meeting consumer demands. There are many sires, reasonably (semen) priced, with high NM$ (over $800) or Pro$ (over $2000), that have the consumer demanded characteristics and are above breed average for all traits or indexes. There is absolutely no need to use sires not in the top 25% of the breed for all economically important traits.

Is it Too Late or Are You Too Tired?

NO, not too late, … but … it is time to stop the procrastination in expanding trait selection. Delaying or denying the inclusion of value-added traits in sire or embryo selection will result in the milk shipped being of less value to processors. 

The Bullvine Bottom Line

Shipping milk off farm that milk processors can sell at an increased price (to build their margins) will be very important to the future viability and sustainability of dairy farms.  Producers, when selecting their future genetics, need to move past what has governed their past selection practices and think first of consumer needs and demands.

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Dairy farming is not a career for the faint of heart.  Whether your focus is on the cows in the barn or delivering products or services to those who work with cows in the barn, you face many challenges.  If, in addition, you are female, you also face being sidelined or ignored when it comes to leading boards of directors or being selected to join those making decisions for the dairy industry. In agriculture, we like to see ourselves as immune to the faults of Fortune 500 businesses. However, when it comes to combating gender stereotypes and championing the cause of women in leadership, dairy has its problems with putting ladies on the ladder to success and welcoming them to the board room table

MENTORS, ROLE MODELS and MEN’S SHIRTS

In 2019 there are still far fewer female dairy farm owners than men.  Most veterinary, financial, suppliers and dairy support businesses reflect this same inequity of gender in their managers and leaders.  Not only do ag women earn less on average than ag men, but there is also an added economic punishment for being the only sex that can bear children. This is not new. Woman multi-task and we do it well.  What is new is that woman are asking to be recognized for their abilities not punished for their gender differences. Women want their leadership voices to be heard.

Dairywomen take ourselves seriously, and it is time that our industry did that as well.  We are professional, efficient and effective in the dairy world. Let’s be recognized for that.  We know how to mentor and be mentored by those who are successful. Oh – and when we do represent our business in the public eye let’s find a way to brand ourselves – not as company men in pants and shirts – but in professional attire that is appropriate to the work being presented. Too often, the company dress code requires women to look – uncomfortably — like men. Company colors, yes!  Company clones no!  Celebrate the uniqueness that makes a difference to success!

MISSES, MRS AND MYTHS IN AGRICULTURE

The mothers who raised farm daughters in the past emulated their mothers and added their experience to the teaching.  We all have stories of female farmers who handled the bookwork for the family-run businesses.  Their meticulous records of inventory, purchasing, banking and employees were a model of management for any successful business. Learning from their office style desk was a good start for career management. Women learned their passion for dairying in the barn, in the fields and in the office.  When it came to careers, the expectation was to continue to take a role in making effective changes wherever they were needed.

Universities report rising numbers of women in agricultural courses.  In some, women outnumber the male students.  This is encouraging when there are many problems facing all sectors of the agricultural industry. Economics, animal genetics, political and human sciences and technology need to have strong leadership if dairy is to be relevant in the future.

However, when it comes to the business world and companies that lead the way in agriculture, the gap is once more a wide one between the genders.

So, what options do today’s dairy girls have? Do they ‘man up’ and become ‘one of the boys’ in the background or accepting lower levels of decision making or do they turn their years of experience on the farm and their passion for dairying into an ownership and management career?

A WOMEN’S PLACE IS IN THE BARN.

A WOMEN’S PLACE IS ON THE BOARD.

Where is a woman’s place?  Why are there boundaries?  We spend much time applauding women who step into managing the family farm, but recently the question has turned to “Why are there so few women in the boardroom?” of dairy associations, boards and councils?

Unfortunately, we live in a world where having just one woman on the board or senior management team of an ag company is seen as “progress”.  Sadly, it is also true that some companies have yet to appoint even one woman to their board.  Statistically, we know that for every 100 men promoted to manager positions, only 77 women are promoted and that women are more likely to take a top spot in a revolving door capacity, filling positions previously held by a woman. Is this happening in the business you work with and support?  Issues such as compensation and placement in the boardroom still have some way to go before equality is reached. Does it happen on your dairy board or farm-related business?

FEARLESS FARM FEMALES. FIVE CHARACTERISTICS

1. Women are not embarrassed to be females in agriculture. They’re empowered.
2. They don’t see their position as a women’s position but as a dairy position.
3. No matter where their dairy job takes them, they always study to learn how to do it efficiently, effectively and economically.
4. Flex time is prioritized according to the goals of the organization.
5. They care more about leading than about being liked.

You probably have all kinds of questions arising from these five statements.  Of course, any one of them could be a source of conflict.  The team that is involved can make an enormous difference in the ability of both men and women to succeed. The entire team has to buy into finding solutions. The dairy industry is facing challenges on all sides and maintaining a viable dairy or service company is becoming more and more difficult. It is a huge learning curve for everyone – male or female – who is motivated by a desire to do what is best for dairy.

Woman face a double-edged sword. Being a woman in a male-dominated environment offers an effortless point of difference.  Woman and men are not exactly the same. We can be fearless.  We can charge on. Or we can be left alone in the spotlight that seeks out and highlights every weakness and blames it on gender.

DOES BREAKING THE GLASS CEILING AUTOMATICALLY LEAD TO THE GLASS CLIFF?

Perhaps, like me, you have been encouraged by the progress women are making in all aspects of the dairy business? As an industry, we are recognizing that we can’t afford to overlook half of the people that could be involved on the basis of gender alone.  We love stories of women having success in turning things around.  That is all good.  However, these are not the easiest of times to take a leadership role in managing a dairy or a dairy business.  What if things not only don’t change but what if they fail entirely?  Reasoning says that either outcome is possible in today’s problem-ridden climate.  However, there is a new term that is being used when this happens to a woman. It is called the Glass Cliff.

The metaphor of the glass cliff evokes the idea of women who have risen higher are now in a precarious position.  They are teetering on the edge, and their fall might be imminent. It has been suggested that women are being set up to fail. They earn leadership positions at the time when conditions are at there worst. Are they victorious, or will they be victims? When they fail is the too often voiced opinion for the outcome, “Women can’t lead.”

FREEING FARM WOMEN – AND MEN – FROM GENDER STEREOTYPES

We are always more comfortable when we feel we are in the right place at the right time and doing the right job. Such serenity is hard to come by in this age of instant pictures, news and studies that have the purpose of moving us to an uncomfortable place where we will buy, sell or change something and, in so doing, benefit the company that has raised our needy awareness. 

In the case of gender stereotyping, we are quick to recognize when it applies to our own gender. In my case, wife, mother, grandmother, being around men much of the time, I can’t help but question if they recognize their own stereotyping issues as well. 

Male Stereotypes:

1. The Dad at Home
2. The Dad at the Playground
3. The Dad in the Kitchen.

I’m sure you can add more to this list if you think of those groups that have an unconscious bias against men. It shouldn’t be about gender, should it?

At the end of the day, it boils down to what we receive credit for.  We seek to please.  Sometimes I wonder why men get an “Atta Boy” for babysitting on the weekends. Old boy’s clubs are renowned for glad-handing and back-slapping when a project is successful. Why is that an exclusive club? It shouldn’t be about gender equality. It should be about ability.

ARE WE READY TO GET THE WHERE-DO-WE-GO-FROM-HERE MINDSET?

We can’t say we have looked at gender stereotyping from all angles until we consider today’s technology.  A UN report has said that virtual assistants such as Alexa and Google Assistant reinforce gender stereotypes by portraying women as “subservient”, by relying on female voices. As in anything, you can criticize until the cows come home, but what can you actually do about it?

Here are some practical strategies to talk about in your dairy workplace.

1. Vary between ‘feminine’ or ‘masculine’ skills sets or attributes as needed on the Board.
2. Focus on the positive elements of the Board goals instead of dwelling on the negative.
3. Speak up about discriminatory selection or promotion practices
4. Call for Board recruiting practices that actively encourage women to apply
5. Support fellow women in leadership in the workplace.

THE BULLVINE BOTTOM LINE

We seem to be in a bit of a time warp. It is encouraging to see the steps that have put a million little cracks in Ag Leadership glass ceilings in the last 20 years. I’m grateful for women who run their own dairies, cooperatives, supply businesses and veterinary and health services.  My hope is that as the next generation of women can continue their dairy passions and have careers that will see them soar to unlimited possibilities. The doors are open.  To everyone.

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Traditionally, in dairy cattle breeding, it has been a rule that only third party captured and verified data had been allowed to be published. By extension, anything less than that is considered second rate and must not be published. Is that the way for the future? The Bullvine is laying all the cards on the table so tomorrow’s dairy people can see both from the past and to the future.

What’s Behind Us?

Over the past 150 years, investors put their dollars down and imported dairy breeds into their countries. To protect their investments, they started their own breed societies to record and verify lineage. DHI’s were started to authenticate yield and % Fat and for management purposes. Independent expert conformation evaluators were hired to compare animals to a visual ideal. All these steps were used to confirm that the animals were what their owners claimed them to be in most countries, that has been the basis for publishing performance and genetic information for commercial purposes.

Minimum accuracy levels of at least 80% REL, were required for listing sire daughter proofs until genomic indexing came on stream a decade ago. DHIR cow records were considered to be accurate, only requiring monthly DHI supervisor visit results being used in the calculations of lactation totals. Owner recorded production records were not considered unbiased and publishable. The functionality of a cow was determined by breed society conformation scoring.

Everyone Benefited

Breeders that have been marketing breeding stock received financial benefit by having publishable information to document the animals they were selling. Breed societies gained memberships and business because cattle owners wanted to be part of the selling crowd. DHI’s benefited through dairy farmers participating in their programs. A.I. benefited because dairy farmers could trust the published information on their sires. Researchers benefited because they had reliable data to analyze. Genetic evaluation centres helped by knowing the data they used could be depended upon as accurate and third-party verified. Internationally standards were developed for all forms of dairy cattle data and rules and regulations were adhered to. Dairy farmers benefited because they had information to breed, feed, manage and perhaps market their animals. Moreover, so dairy cattle genetic and actual performance advancement occurred at a slow to moderate rate.

Past Data Collection will not take your Dairy into the Future

Dairy folks have been trained to require 90+% accuracy when making sire selection decisions. However, the fact is that the last 5-10% in accuracy for a few traits is too costly for what it adds in improving overall herd profitability. Having expanded information from many more observations including health, reproductive, efficiency and functional traits that directly influence bottom line profit far out-weigh the last ten per cent inaccuracy for any single trait.  Furthermore, beyond genetics, the expanded animal data will be very valuable for nutrition, management and business purposes.

Dairy Data Isn’t the Destination

For many dairy people, who are comfortable with the past, the future with automated systems looks frightening. Yet for many progressive dairy people wanting to advance and to be viable and sustainable, they realize that the future provides opportunities when it comes to animal information and how to use it.

The following are some Factors that will mark the Turning Point in Data Collection:

• Animal parentage will be determined using a sample supplied to a DNA lab. Tomorrow’s breeders will target the gene composition of their animals – much more than breed purity.
• Only the genetically elite purebred females will be selling for more than their value as milk producers. The days of $3000+ for above average bred heifers are behind us.
• The most accurate lactation information for a cow will be the on-farm computer captured weights and compositions from every milking during a lactation. Soon there will be routinely calibrated devices accurately to measure %fat, %protein and udder health, with more measurements to come, at the parlour level. A cow measured 100 to 900 times in a lactation will have more accurate information than from 4-8 supervised test day samples run through an internationally certified lab. Since all cows in a herd will have data captured using the same device, within-herd comparisons will be accurate.
• Dairy managers will require more milking cow information on health, feed conversion/feed intake, stress factors, rumination, mobility, reproduction, and more. They will want the information instantaneously with all on-farm data capture systems linked, combined and modelled in order to feed, breed and manage in real time.
• Dairy managers will also want on-farm data capture and analysis systems that include calves, heifers and dry cows.
• Herds will be mated on an animal group basis, determined by genetic merit, instead of animal phenotype. Epigenetics and nutrigenetics information will be used when making mating decisions.
• Genomic indexes will increase in accuracy, to 80%-90% REL, within the next decade provided there is phenotypic data captured on-farm and shared to central databases for analysis.
• 95+% of the sires used will be genomically evaluated, and their sexed semen will produce 95+% female offspring. There will be no need to keep sires in stud after 50,000 doses have been frozen.
• The availability of more and more on-farm economically relevant data will far out-weigh the value of third-party verified data on a limited number of traits for 95+% of dairy farms.
• Plan for the rate of change and animal improvement to be even faster in the future.
• Tomorrow’s dairy operators will require all the data, from the field to the fork, to be successful.

Are There Steps to Get to the Future?      

The short answer is yes. However, it will require proactive and dynamic decisions by the dairy industry:

1. Dairy people will decide for themselves what individual dairy animal data and information they will consider, trust and use.
2. Individual animal data/information, when published, will be labelled as to the data source.
3. On-line apps will be used for sourcing, comparing and benchmarking data and information.
4. Computer software-based learning technologies will provide herd managers with comprehensive and forecasting models, so dairy enterprise plans and strategies can be achieved.
5. Dairy cattle owners will focus their genetic improvement planning on their herd’s economically important needs.
6. Private company proprietary genetic indexes are here to stay. Companies will need to be able to show relevance and accuracy for their indexes.

Time and technology will wait for no person. You will either be with or ahead of change, or you will quickly finish behind the pack.

The Bullvine Bottom Line

‘The bend in the road is not the end of the road unless you fail to make the turn.’

Past measures that were in place to protect the innocent from wrong information have served the dairy improvement industry well. However, the future will use animal data and information much differently.

Dairy people, their advisors and service providers, are already in the Age of Data Super Power. The volume of data will increase exponentially. The large volume of data points for many more factors will lead to high overall accuracy and facilitate dairy farm success.

Organizations and breeders that stick with the past will remain in the past. In the future individuals and organizations that implement new procedures, new technology, new systems and new disclosure and accountability protocols will be the leaders.

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In the first quarter of each new year, one of the highlights we enjoy is the opportunity to take part in seminars, conferences and annual meetings that focus on the future of our dairy industry.

Murray and I had the opportunity to attend NDHIA Conference where I knew we would get to meet committed dairy people from all sectors of the industry. Recently, Murray has also enjoyed speaking at several meetings, and The Bullvine and Milk House platforms are filled with lively discussions of what is good, bad and ugly about the future. Canadian Dairy Expo is another source of information and inspiration.

NDHIA Repeats the Mantra – Connect. Collaborate. Be Credible.

At the National Dairy Herd Improvement Association AGM, Jay Mattison caught everyone’s attention with an oft-repeated mantra:   Connect!  Collaborate!  Be Credible!

We circled back to those words several times in meetings, hallways and conversations.

Murray spoke on “Leadership and Vision” in Mission Valley, San Diego and reframed and reiterated points from a Canadian presentation, “Another speaker who works providing services to dairy farmers showed statistics and examples and then said, “It’s not what a service is intended for, it is the on-farm results that matter.” That makes perfect sense.  If our dairy future is to sustainable, it has to achieve improvement.

Are we dawdling or doing?

 The very word “improvement” is a difficult concept for us.  We think we need to achieve perfect results in order to improve the dairy industry.  But perfection is not the problem.  What we really need to change is how to make the move from thinking about the many actions we take, to actually producing those results by taking action.

Achieving a goal is only a momentary change.  For instance, treating all sick calves …doesn’t deal with what is causing the calves to be sick.  Likewise, spending the time needed to document and treat that struggling pen of low producing cows, while it may earn a checkmark on a daily to-do list, more time and money will be spent as that pen fills again. Again focusing on the low end steals time and attention away from multiplying the positive inputs of healthy animals. We all recognize repetitive stress.  It is the repetitive part that needs to be dealt with and, hopefully, removed.  

Can you list a recurring incident of management, environment or genetics that is causing this kind of problem in your herd? Margins are too narrow for dawdling.

From Recording Symptoms to Addressing Causes

Dairy success has to concentrate on moving away from dealing with treating the symptoms to addressing the causes. It makes no sense to restrict success to one scenario when there are many paths to dairy success.  

Three recognized options are

1. Selling surplus animals or product
2. Selling zero profit animals
3. Outsourcing services
4. Forming new partnerships that are a win-win-win for all sides
5. Seek out agri-tourism that is based on skills that are already available. (tours; baking; seminars;)

Progress is about progression.  Logical forward growth. We have to move from symptoms to solutions. 

The UP and Down Trajectory.  Which are you following?

Regardless of where you fit in the big picture of North American Dairy farming, there is one thing we can all agree 100% upon.  Dairy Data needs to find a new upward trajectory.

However, this rising line can’t be drawn, if the data points are not recorded.  We can no longer wait for data points with too much time lapsing in between. Is the goal a single report of 100% or a continuous upward trajectory of improved results recorded in real daily working time?

If you want to predict where your dairy will end up, all you have to do is follow the curve of tiny gains and losses.  See how your daily choices compound down the line.

2020 Vision

Twelve months from now we will succeed or fail based on what steps we actually took based on our 2019 visioning. The dairy industry is changing – farm to farm, family to family, organization to organization … It’s not changing month to month but day to day. As meetings, reports, slides and statistics are highlighting reports of farm sales, severe depression, and regrettably rising numbers of mental and physical health issues. There is no single right way that will be effective. It could be that your dairy is trying to change – health, money productivity, relationships or all of them. Not all at once. Not 100%. One step at a time.

It’s Better to be Slow than to be Stopped

Accomplishing one extra task is a small feat on any given day. Repeating and adding to it on a daily basis adds up to a significant change when accumulated over a dairy year. Small changes don’t appear to make any, or enough difference until you cross a critical threshold and unlock a new level of performance.

In the early stages of change, you expect to make progress ina linear fashion, and it’s frustrating how ineffective changes seem to be during the first few days, week and even months.  It doesn’t feel like you are going anywhere.  But gradually you cross a critical threshold and unlock a new level of performance.  Improvement is achieved!

Unfortunately, the early temptation is to slip back into the crowd. There seems to be temporary security in numbers.  But change doesn’t wait to be put on our agenda.  Change can’t be bullied into moving at a pace that we find acceptable.

We become experts at managing the status quo.

Unfortunately, there are at least three things that go wrong when you stay stuck:

1. Decisions take longer to make and are no long guided by reality. As your company grows you strive to have staff carry out increasingly specialized tasks, but, if they must run everything by you as they did in the past, it drags out decision-making and leads to missed opportunities that require swift action.
2. Risk and investment are avoided, stifling growth. Your dairy is probably long past the new business stage. If you maintain the same cash-obsessed, risk-averse, reactive mindset that helped you get started, you probably won’t invest time and resources in dairy endeavours that will yield a return down the road.
3. Innovation becomes impossible when you approach decision-making with a “this is the way we’ve always done it” attitude. When you don’t allow yourself or your staff to experiment with new ideas, your dairy stagnates, making it harder to keep up with the competition or to adapt to new dairy market challenges.

Change doesn’t wait to be put on our agenda.  Change can’t be bullied or managed into moving at a pace that we find acceptable.

Take Advantage of the Resources Around You

Whenever you’re in meeting rooms, there are tremendous to tap into to make dairy improvement happen in the real world of 2019.  It takes questioning, listening and a willingness to entertain new and different approaches. So much potential to be unlocked. Choose! Don’t snooze or you’ll lose. While science supports genetics, genomics and nutrition, ultimately success can only come through the day to day actions and choices made on each dairy operation. We can pare back.  We can eliminate.  But there inevitably comes a time when that is no longer possible. At some point, we have to increase the profitability.  Not higher numbers of cattle.  But more efficiently productive cattle.

Take ACTION!

It starts with understanding the changes that are needed, investing in them and, most important of all, taking action. The fields represented have been around for many years. What is needed is a synthesis of the best ideas, successful dairy farmers, scientists and associations figured out a long time ago … combined with the compelling discoveries being made recently. 

When you repeatedly solve problems by targeting maintenance of your current levels, you can only solve the problem caused by your current system. There is no forward progress.

We need to get all of the inputs – nutrition, genetics, feed, environment- pulling together in the same direction so that the outputs provide solutions.

Same Old. Same Old. Yeah BUT.

Many times we keep talking about the same scenarios: “If you lose 300$ on each calf, you raise – you are fighting a war with yourself.  Your decisions are your own worst enemy.  You have seen slide after slide showing the statistics. You have watched and listened as the current reality was spoken. If the current trajectory is maintained the end is approaching.

I wondered to myself, how many others were having my “yeah but” moment.  “Yeah what he or she says is true for some, BUT I am not in the group” because I don’t do genomics. I love the lifestyle. Or I just bought a ticket to win the lottery.

The Bullvine Bottom Line

There is no end day when everything will return to the way it was once before.

There is no end day when we can stop working hard. 

The target isn’t about achieving a final end game. It is about initiating the cycle of endless refinement and continuous improvement. 

From where I sit, DHIA President George Cudoc sums it up best.  I agree with his thinking that it isn’t the writers, the speakers, the slides, the awards and the statistics that make the difference.  Any one or all of these may give you a reason to be inspired or overwhelmed and decide to keep your own counsel.  It’s just words and information. There isn’t any impact until that information finds it’s way into the action plan of your workday.

Countless moderators, managers, mentors and dairy peers are encouraging everyone to take that information forward.  Use it.  Don’t keep circling the wagons.  Move forward.  Collect!  Collaborate. Be Incredible!

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Jersey cattle have many attributes. As more and more of the uses for dairy cows’ milk are based on the solids portion, the Jersey gene pool and its ability to perform well in all environments and efficiently produce high solids milk becomes an alternative sought after by performance-oriented herds.

Currently, in the United States 23% of milk goes for fluid uses and 77% for solid uses. The future trend will be to 80+% solids uses.

With this opportunity available to Jersey cattle, The Bullvine is offering an overview of what steps could be taken by Jersey supporters and milk processors to increase Jerseys’ market share in the dairy industry.

Jersey Goals – Realistic and Profit-Driven

National statistics show that Jersey cattle represent almost 10% of US dairy cows and 5% of Canadian.  Currently, at auction and in private sales, Jersey females are in demand as herd replacements. Milk producers see the merit of milking Jerseys. In North America, with over 9.3M dairy cows in the United States and .93 M in Canada, doubling the current proportions of Jersey genes would result in over 19% Jerseys in North America.

The next decade will be very important for Jerseys.  2030 is only three to four female generations away and a unified proactive progressive expansion plan is needed to achieve an increased Jersey market share.

Ten Steps to Jersey Success

This paper is intended to provide a big picture view and to initiate discussion.  Bullvine readers will, no doubt, be able to add steps and actions that can add to a dynamic growth in Jerseys.

It is Necessary to Work Together

1. Create Stable to Table Alliances
   Research and innovation are the keys to Jersey’s future success. A way must to be found to bring all areas that touch Jerseys, from crops to consumer, into an over-arching alliance. Where such a structure to be in place, Jersey stakeholders would be able to source the funds for research needed to drive innovation.
   At the retail end, consumers will buy quality foods. Tomorrow’s consumers are today’s millennials and their children. A Jersey milk product line would have appeal for consumers wanting variety and quality.
   Some programs have been started in North America to expand the presence of Jerseys. However, a program is needed that includes as many stakeholders as possible.  A program that does not wait for everyone to buy-in and participates. Visionary leadership is needed. Immediately.
   No breeder or organization serving farms with Jerseys is independent onto themselves.  Collectively working together can be to everyone’s benefit.
2. Data Central
   Jersey animal data currently exists in many databases all the way from the farm to central national systems for animals and from farm to the consumer for milk products. All Jersey animal and farm data need to reach data central. Without centralization recommendations on genetics, nutrition and management are too often siloed recommendations.
   Industries that are successful in the future will depend on research having one-stop access to all the data. 

   Applying Science is the Key

3. Use Technologies
   Genomic Testing: After a decade of genomic testing being available to Jersey owners, uptake remains low.  The age of breeders using appearance, perception, instinct and only phenotypic data for analysis is in the past for dairy cattle. Nevertheless, many Jersey animal owners don’t see the benefit of genomically testing all female calves. However, one route to get started on getting answers would be for A.I. to genomically test and capture all relevant animal lifetime and herd data on the first 300 daughters for all sires for which semen is collected.
   Sexed Semen: To expand the Jersey population, 90% of A.I. Jersey services need to be using sexed semen. This would assist in supplying the surplus replacement animals needed for expansion. Breeding Jersey could be more profitable than breeding a portion of a Jersey herd to beef. Other dairy breeds could be bred to high genetic Jersey sires to produce healthy, fertile crossbreds (i.e. HoJo’s).
   Precision Dairying:  Many companies serving dairy farms have established precision dairying initiatives. In the next few years, farms systems and equipment will become available by which farms can profit from applying new technologies and systems.

4. Turn Generations
   In less than ten years genomic indexes will be over 80% reliable. The fast-moving trend is for young animals to be the parents of the next generation and genomic sires should be used 90+% of the time. New traits, especially many health and wellness related traits, that positively influence profitability will have genetic indexes. Older animals will, in most cases, not be evaluated for the new traits. If Jersey owners need any examples of where rapid turnover of generations have been very successful, they need look no further than the poultry, swine and crop growing industries.
   
   Add to an Already Solid Foundation

5. Breed for Key Profit Traits
   An entire article could be written on which traits are or are not important for the future. Successful selection must be driven on which economically important traits milk producers need. The future success of Jersey breeding will be achieved from putting the overall focus on driving up farm and other stakeholder revenue and lowering or keeping costs under control.
   Jersey breeding could be a world leader if there were four lines:
   1. high lifetime energy corrected milk,
   2. high component percentages,
   3. productive grazing animals,  and
   4. animals suitable for the sub-tropics.Future Jersey breeding should be about performance and business success not about breed purity.

6. Capture Heifer Data
   The economics and science of heifer rearing remain in its infancy.  Dairy managers need to know how the costs and benefits associated with genetics, feeding, management and performance from birth to first calving affect the bottom line and, thus, the performance in the milking herd.
   It is possible that Jersey stakeholders working collectively on heifer performance could improve not only animal lifetime profit but perhaps as far as what consumers are willing to buy in the grocery store.
   Adding full scope heifer data to milking cow data would put Jersey owners on a rising trajectory to becoming the gene pool of choice.
   
   Apply Information for Success

7. Jersey Improvement Clubs
   People sharing information with their peers is an effective means of learning and applying facts, figures and science.
   Dairy farm finance clubs and income over feed costs clubs have been popular with dairy herd owners. Today these clubs can meet face-to-face or through on-line communities. Clubs for Jersey herd managers and Jersey youth can serve from training on the basics all the way to advanced dairying. The focus and priorities can be set by the members and work best when led by trained facilitators
   .
   The Dairy Industry is More Than Cows and Farms

8. Field to Consumer Approach
   As mentioned above, successful dairying goes all the way from the soil that grows the crops to the consumer purchasing and eating the food produced. Jerseys are but one of the many parts to the total equation that comprises dairying. In the end, it all comes down to the profit and success of the stakeholders. In the past, the model followed has been based on individual and organizational goals, preferences and focus. In the future, modelling will be more expansive and inclusive. Systems with Jerseys as the animals in the model could well be with us in the next half-decade. Remember what the consumer will buy will be the benchmark for every successful model.

9. Guarantee the Product. Put Customer Trust First.
   Consumers of all products want a guarantee that their purchase is what it is sold as and that it can be backed up with facts. This practice will soon be mainstream. Jersey stakeholders would be well served to proactively participate in programs that ensure that the consumer knows and can rely on Jersey sourced products they buy meeting the product claims.

    Jerseys Fit Everywhere

10. Go Global with Alliances
    Dairy cattle exist on every continent and in a multitude of production environments. Jerseys have already shown that they perform well in sub-tropical environments. Could they do even better there if the Slick Gene was incorporated into a line of Jersey cattle? A universal theme could be healthy productive animals, healthy nutritious food, healthy stakeholder bank accounts.
    With the next 2 Billion people on this planet predicted to be residents of Asia and Africa, Jersey cattle should not miss the opportunity to perform in those environments.
    Jersey alliances must cross borders.
    The United States and Canada need to initiate expanded collaboration and to lead the way to Jerseys achieving a 20% market share.

The Bullvine Bottom Line

Are performance-oriented Jersey people ready to take the leap to the future? It requires thinking and acting beyond the cow and farm. It requires forming alliances at every step of the food chain. Two immediate challenges for Jerseys to increase market share are leadership and stakeholder support.

The Jersey Cow is ready. Are Jersey people on board for what can be an exciting, successful and sustainable future? If so, then tell others.

It only takes a spark to get a fire going!

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The Bullvine’s Murray Hunt was one of the presenters at The 2018 Dairy Cattle Improvement Industry Forum and the 23rd Annual General Meeting of CDN. Watch at Murray discusses Industry Leadership & Vision: A View from the Sidelines and ask the question: “Are we varnishing the past or building the future?”

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Have you ever had that person who hears what they want to hear, thinks they know everything, and then they want to tell you how to solve all the world’s problems?  Well the US has that guy as their President, and it’s causing a massive issue across the globe.  One area where it certainly is happening is in the North American dairy industry.  The challenge is that it’s causing huge problems and “The Donald”  needs to be fired.

In order to fully understand what is going on, you first need to know how this all started.  For many years there was never a significant issue with Canada having a supply managed dairy industry, because it was not a large enough exporter to have any effect on the US system, and the US system had a relatively adequate demand for its milk.  However, then came an ever-increasing supply of milk and decreasing demand and of course “The Donald”.

The Economics of the Problem

No matter what system you have, it comes down to supply and demand.  When supply outpaces demand,  prices fall, and when demand outpaces supply, prices increase.

Typically when there becomes an oversupply of a product, the prices drop enough that profit for the companies producing the product decrease so much that they have to decrease production or go out of business.  The challenge in the process of this happening is that those companies, or in this case farmers, who can not compete on the lowest cost of production go out of business.  Hence what we are seeing in the US, where many operations which cannot either cash flow their losses or compete for the lowest cost go out of business.  It’s simple economics as the market is correcting itself.  The challenge is, instead of overall production decreasing, currently, in the US we are seeing supply increase as many larger producers are getting even bigger using their economies of scale and leverage at the bank to increase production at this time.  This has resulted in a prolonged market depression as supply is not decreasing, and milk prices continue to see record low prices.

Trump Lights a Fire on the Problem

To say that Donald Trump is not your conventional politician is an understatement.  He comes from no political background and has no understanding of how international politics works.  While some see that as a strength, there are also challenges with this unencumbered perspective.

“The Donald” prides himself on not acting like a typical politician.  Other than his love for a good headline, Trump has no regard for how international politics works.  He cares more about getting a good headline than he does about solving the problem.  Moreover, that alone is the biggest crux of the problem with the US and Canada in these trade negotiations.

 Trump is looking at this issue as a typical business agreement.  In such, all parties should have equal access to the market to ensure that all companies have the best chance to succeed.  The challenge with this particular issue is that it’s not a simple market.  The complexity of how modern agriculture works does not allow it to operate on an apples to apples, oranges to oranges comparison.  Instead, every country has a different strategy on how to ensure their food production is sustainable and safe. In the United States and many European countries, farmers receive subsidies from the federal government instead. But since Canada’s comes with a system that is perceived to be anti-trade, Trump has made it his big sound bite, to help struggling US farmers solve all their problems by freeing up the North American dairy industry.  The challenge is this will not solve anything.

It’s Not Trade Agreements It’s Over Production

Something many don’t realise is that each of Wisconsin and California produces more milk on a daily basis than all of Canada. Let’s say that again.  Two states in the US produce more milk than ALL of Canada.  So even if Canada got rid of supply management, it would not solve the US problem of oversupply, as there is not enough demand to stop the trend of overproduction.  The US would simply continue to produce more milk.

What is causing many farms in the US to go bankrupt is not world trade agreements but rather too much competition and no production controls. Unfortunately,  most US producers are all driving to the bottom with minimal or no profit as opposed to trying to protect one another.  One could argue this is where the government needs to step in and access the controls and put a system in place in order to ensure a healthy marketplace. But instead of answering the tough question.  Trump is chasing the sound bite and looking for his win there.’

But Trump is not the only politician missing the boat. Take a look at Governor Andrew Cuomo from New York State.  Cuomo extolled the growth of the dairy industry, prodded by tax credits and expansion financing.

Milk production increases in New York State vastly outpaced the national average — 2.2 per cent in 2013 versus 0.4 per cent growth nationwide. The following year the governor boasted that the sector, so crucial to his economic growth plan, had reclaimed the number three spot in the rankings of the country’s milk production. Yet a Greek yogurt maker wooed with $14 million in tax credits, lasted little more than two years. Overproduction has massively depressed milk prices and last month, Gov. Cuomo announced a $30-million fund to assist dairy farmers.

The Bullvine Bottom Line

To solve the issue of overproduction long-term stability requires a structural overhaul. The funny thing is, it’s not the removal of Supply Management in Canada that will solve the problem, but rather adding supply controls in the US that will lead to the resolution of this issue.  The US needs to implement its own version of Supply Management.  And that’s where the problem lies.  US President Donald Trump is unwilling to look at an internal solution to this issue. Instead, he chases the press and sound bites. For that reason, he needs to be “Fired”.

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The economic state of milk production in the United States right now is pretty somber.

It’s extremely difficult to net anything after depreciation and expensing all unpaid labour. Our farm, for instance, has younger family members receiving salary that were also gifted a few hundred thousand dollars worth of livestock and equipment (equity), by the three principal owners. The three principals, including me, in turn, have taken no salary for some years, in my case since 2011. I’ve accumulated farm land which, after paying for twice, now generates sufficient rent income for a very good living.

Income as distribution of profit from milk production is not part of any equation at this point in time for most milk producers, including ourselves.

The United States Department of Agriculture has some milk margin subsidies that can help out small and medium sized dairy farms, but do little or nothing for large scale farms.
Much of the recent low value of cheese and butter is because Mexico and the PRC cancelled orders in response to tariffs.

For some 50 years, about four percent of dairy farms quit producing every year, right now the liquidations are a little faster, perhaps, as the industry is consolidating at a faster rate.

In the 1960s, one truck would stop at 12 or 15 dairy farms each day and get a load of milk to go to a bottling or processing plant. Many farms now have to produce a full tanker of milk each day in order for a buyer to want their milk at all. Also, some dairy farmers have been notified that their milk buyer is going out of business, and sometimes another buyer can’t be found.Milk production is like any other commodity producing business, as the value or price migrates toward the cost of production over time. Right now 100 pounds of milk brings about $15 to the farmer. The farmer has to pay shipping which is about a dollar per hundred, netting $14. Very, very, very few dairy farms, new or old, large or small, hand-milking or robot-operated can survive more than two or three years on that kind of income. Many can’t make it until Thanksgiving.

That said, there were a couple weeks in August, 2017, and three or so weeks in May and June, 2018, where farmers, including me, had the opportunity to forward contract some or all of their milk on the Chicago Mercantile Exchange for $16 to $17. I stopped losses on half our milk at that time, but hindsight indicates I should have sold more milk or bought more put options. Forward contracts and option trading allow dairy farmers to mitigate risk and sometimes live to milk another day.

Right now, dairy farming is very unprofitable. However, over the course of a lifetime, milk production is often a better living than beef, pork, or cash grain production. Milking cows requires more dedication of time, and milk production is more sensitive to management than most of the other common farm products produced in the United States.

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An Ontario farm couple’s cross-country tractor tour to show support for Canada’s dairy sector has ended in tragedy on a highway northwest of Saskatoon, Saskatchewan.

Henk & Bettina Schuurmans set off on the journey of a lifetime across Canada at the end of June. On Monday morning, it ended in tragedy, when their John Deere 6430 was struck by a semi-trailer at around 9 a.m. on a rural stretch of highway between Saskatoon and Langham, Sask. Bettina, 55, was killed in the crash. Henk was rushed to hospital in critical condition and was stabilized by doctors.  The semi driver was not injured in the crash, and Northbound lanes of the highway were still closed as of noon Monday.

The Schuurmans were driving a John Deere 6430 tractor carrying a giant plastic cow and calf — nicknamed “Maple” and “Minnie” — from their farm to the West Coast as part of the “Canadian Milk Tour.” A sign on the back of the tractor encouraged drivers to “Honk to support quality milk produced by Canadian farm families.” The Schuurmans, who dairy farm with their family on Milk Wave Dairy in Elmira, ON, are making the trek across the country to promote the dairy supply management system in Canada and how it affects family farms like theirs. They strongly believe, along with many smaller dairy producers across the country, that removing the supply management system will effectively end family farms.

The tragic news on Monday stunned the Schuurmans’ friends and family, who had cheered the couple on when they left their Elmira dairy farm more than two weeks ago. It has also shocked the Canadian dairy community and people who had encountered and supported the Schuurmans on their trek. Many people were following their tour on social media, as the couple and others posted photos using the hashtag #CdnMilkTour. Their passion was evident as they shared their story and handed out milk, buttons and information in every town they stopped. People were excited to see their tractor, along with “Maple” the cow, roll down the road.

With almost 1800 people following their journey on Twitter and countless more on Facebook, Henk and Bettina were uniting a country on their journey, joining people who share a common passion – love of the dairy industry. They weren’t sponsored, they shared their story because it was one they believed in. And now, saying “thank you” just doesn’t seem like enough.

“It’s a massive loss,” said Murray Sherk, a Dairy Farmers of Ontario board member who worked with Henk Schuurmans on the Waterloo Dairy Producers committee.

“Dairy farming was their life. That is what they lived for, and they were very passionate about it.”

One of the last people to see the couple before the accident was Mark Schwaerzle, who works at Saskview Farm Solutions. They had parked their tractor at his company’s shop over the weekend.

“They were in very good spirits. They were talking about all the nice people they’d met in Saskatoon, and we’re excited for the rest of their journey,” said Schwaerzle, who posted a video of the smiling Schuurmans leaving on Monday morning, just a few hours before he learned of the crash.

“It’s very hard. To be one of the last people to see them before they pushed off, it’s hard to wrap your head around.”

Anita Medl of SaskMilk said the dairy community across the nation is feeling the loss, and Saskatchewan farmers who had been hosting the couple and celebrating the trip “are crushed.”

“We spent time with them in Regina on the weekend,” she said.

“This is a tragic accident. These folks were so passionate about their industry. It’s a loss for all of us.”

The Schuurmans planned to take over a month to drive their tractor to the West Coast, as part of a campaign to draw attention to the supply management system for Canadian dairy farmers. A big, white sign affixed to the front of their John Deere read, “Keep my milk 100 % Canadian,” and one on the back read, “Honk to support quality milk produced by Canadian farm families.” They fixed a giant plastic cow, nicknamed Maple, to the back of their tractor, and documented their trip on social media along the way. The couple said they would camp and stay with other farmers along the way. They took their tractor through Tim Hortons drive-throughs and drove on the highway as a street-legal vehicle.

Travelling by tractor was a natural choice for the trip, he said. 

“We decided biking is not good for our bodies, at our age. The car is kind of boring and motorcycle is not our thing,” Henk explained. “So we said, ‘We’re farmers. Why not by tractor?'”

The couple, who moved to Canada from the Netherlands in the mid-1980s, have five adult children. The couple has always been proud of their dairy farming roots, friends say, with nine generations of the family making milk dating back to 17th-century Holland. The Schuurmans had talked about completing an east coast leg of the tour to Halifax after finishing the trip to Vancouver and returning home for a son’s wedding later this summer.

Our sincerest condolences go out to Henk and the rest of the Schuurman family at this time. A GoFundMe page has been created by SaskMilk and Dairy Farmers of Ontario to raise funds for and show support to the Schuurmans family.

NAFTA renegotiations are front page news in the United States and Canada. From the dairy industry perspective, it appears that these talks are all about blaming and shaming the other side. Everyone dependent on the dairy industry recognizes that current viability and long-term sustainability are on the line.  Should they stay in the industry or pursue another occupation? What side are you on? If your side is declared the winner, what difference will it make to how you manage your dairy operation or how the dairy supply is managed? “

“It’s the Law”

Import laws only seem right if they support what you believe in. Both countries have import tariffs on foreign milk coming into their country. Canadian import laws have not contained details on the importation of difiltered milk.  Difiltered milk is allowed for the enhancement of the protein level in cheese and some yogurts in Canada. However, in the US, such enhancement has not been permitted.

“The Market Is Always Right”

American processors saw and took an opportunity to sell difiltered milk to Canadian cheese makers. Canadian producers were frustrated that the importation of this US product was taking what they considered to be their market. In 2017 Canadian producer organizations established an ingredient class of milk (Class 7) that they priced so their processers would buy Canadian milk. US producer associations thought that Canada made a hasty decision and were upset with the lack of notice. Currently the US is considering asking WTO for a ruling on if Canada is subsidizing the skim milk powder, made from the Class 7 milk, on the world market.

“Do We Want Governments to Legislate Dairy Financial Success?”

Through the US Farm Bill and other means, milk production in the US is indirectly financially supported by US governments. In Canada there is a dairy producer – government agreement (aka supply management) to make sure that domestic milk supply does not exceed the domestic demand. Also included in this producer-government agreement are milk pricing according to cost of production and level of importation. Part of the agreement includes that the Canadian government does not financially support its supply management industries. These differing methods of industry-government involvement and roles are front and center in NAFTA renegotiations.  The question is – Is there a level playing field? Canadian consumers totally pay for their milk in the store Americans consumers pay in the store and also through their taxes dollars that are allocated to farm support and subsidy programs.

“Overproduction is the Biggest Threat to the Dairy Industry”

Presently there is an excess of milk product in the world. This has resulted in low world prices which depresses the farm gate milk price in countries that base their domestic price according to the world price. The current total US milk production is over 115% of the US consumer demand. Milk presently leaves American farms at well below the cost of production. US producer organizations and governments are working hard to export the surplus, but the low world price means both low returns and added expense for the US. When there is an over-supply of milk, dairy farmers are price takers instead of price setters.

“We Only Want the Rules that We Put in Place. We will Ignore Yours”

What’s best? Regulated or unregulated production?  Each system has their benefits and limitations.

Through a producer association – government agreement, since 1971 The Canadian farm supply of milk has matched the consumer demand. The producer associations allocate daily quotas to producers, buy the milk from the producers and sell the milk to the processors. This quota system has provided stability for Canadian dairy producers.

The US has an unregulated system of producing milk. Producers have agreements with their processor. In times of surplus production, processors have three options: they may not pick up the milk; they can pick up and dump the milk; or, in the most drastic situation, a processor can terminate producer contracts. The US has used whole herd buy-outs, government purchase of product and risk insurance programs in times when there have been surplus milk leaving the farms. But none of these vehicles have been long term solutions in providing stability for producers. American dairy producers repeat the cycle every 5-7 years – from boom to selling below the cost of production to bust.

“Can We At Least Agree to Disagree?”

Today the world is awash with talks and negotiations on trade.  The trend had been for multi-country agreements. However, currently US President Trump is favoring bi-lateral (country to county) agreements. Questions abound about trade agreements. Are they reciprocal? Are they free? Are they fair? They are never just about milk products only. They are complicated business dealings between countries. And, of course, every country wants the best for their industries and their citizens. US and Canadian milk producers are pawns in the ongoing NAFTA renegotiations. Even though dairy producers may want a win-win, the reality is win a little lose a little is the more likely outcome. If President Trump had not removed (just after his inauguration) the US from the TPP agreement it would have allowed US milk more access to the Canadian market. Canadian milk producers have recently given up over 6.5% of their domestic market share, when Canada signed on to the CET (EU) and CPTTP (Pacific) trade agreements.

“Which Side Are YOU On?”

Dairy producers in both countries have lobbied their politicians so that they can receive support or be the winner. Even though his reasons may not be totally based on producers’ livelihoods, President Trump did stand up for the loss of processor contracts by a few American producers. Likewise, Prime Minister Trudeau has stood by the Canadian supply management system. Asking politicians to solve industry challenges is not always the best route to follow to achieve the optimum long-term solution for dairy producers.

“Misinformation Hurts Everyone”

Both economists and journalists continually study, survey and publish reports comparing the price of fluid milk in stores in the US and Canada.  But fluid milk is, at most, only 40% of the milk products that consumers buy. In Wisconsin 90% of the milk is marketed as cheese. Seldom are in-store cheese prices compared.  In the US, fluid milk is sold as ‘BST free’ and as ‘unknown’ if BST was given to the cows to increase their production. In Canada BST is not allowed to be used. In using and quoting the comparison of milk products prices in the store, great care should be taken to use accurate facts and to compare equals.

“Milk Production Isn’t Only Based on Border Lines”

The United States and Canada are neighbors, are each other’s largest trading partners and have the longest unprotected border in the world. Sometimes these three facts are lost in the milk mud-slinging.

The US produces twelve times the volume of milk that Canada does. 4% of the US farms produce 50% of the US milk. The top ten (20%) volume states (CA/WI/ID/NY/PA/TX/MI/MN/NM/WA) produce 74% of the US milk and have 64% of the US cows. There are 9.3M cows in 40,000 herds with an average herd size of 234 cows producing 22,500 lbs. per cow.  The smallest 25 (50%) volume states produce 5% of the US milk. From 2006 to 2015, 33% of the herds exited the US industry and the total volume of milk shipped increased 20%.

In Canada, two (20%) provinces (QC/ON) produce 75% of the milk and have 69% of the Canadian cows. There are 0.94M cows in 10,800 herds with an average herd size of 87 cows producing 19,500 lbs. per cow. The smallest 5 (50%) volume provinces produce 5% of the Canadian milk. From 2006 to 2015, 30% of the herds exited the Canadian industry and the total quota allocations increased by 20%.

When comparing the United States and Canada, milk production or human population, remember that the US is ten times larger than Canada. Ten times the cows. Ten times the consumers.

“The Daily Push and Pull of Dairying”

No matter whither the US or Canada, we’re looking for dairy farm sustainability. It has always been and always will be a moving target determined strongly by farm gate milk price and feed costs. Farms that can drive up revenue and keep costs under control will be the viable and sustainable ones.  Farm ownership and/or farm size do not automatically determine success.

“Can We Identify Where the Front Lines are Currently Located?”

Just now the political rhetoric, the political climate and trade talks are garnering much attention and energy of dairy producers.  It is The Bullvine’s opinion that producers need to put the focus on four areas.

1. “Too Many Generals. Shrinking Troops”
   Producers have almost as many producer-directed organizations representing them now as they had when there were four or five times as many producers.  With so many it easily becomes a divide and conquer win for processors and politicians. Processors want volume and politicians listen to the loudest noise and count votes. Continuing with local or state/provincial or regional milk selling organizations will continue to stack the deck against dairy producers.  Dairy producers need more clout than they have had in the past in price setting.

2. “Dairy Beyond Borders”
   In today’s connected world many items know no borders. Anything that is generic to all producers, processors and retailers needs to be addressed collectively. These can include – consumer awareness and education, food safety, animal welfare and healthy living promotion. In other industries today, the business model is based on mutual benefit. The dairy industry’s future is not one sided or about ’the art of the deal’.  Trade talks and agreements are here to stay. The production sector of the dairy industry needs to change from reactive to proactive, when it comes to milk promotion, increasing milk’s share of the food dollar and trade in milk products.

3. “It’s Time for US Dairy Downsizing”
   The US dairy production industry needs to develop ways to: reduce production by 8% immediately; assist farmers faced with bankruptcies, challenged mental health or re-training; change regulations to allow the use of skim milk in the production of new or fortified food products; move to a production-marketing system whereby supply closely matches domestic and foreign demand for milk; and rethink the level of tariffs necessary. 

4. “It’s Time for Canadian Dairy Modernization”
   The Canadian dairy production industry needs to implement: a revised system for pricing ingredient milk; consider ways to revise, or at least refine, the supply management system; find further ways for new farmers to be included in quota ownership; refine its milk pricing model; and rethink the level of tariffs necessary.

The Bullvine Bottom Line

There is no need for the United States and Canada to battle about milk. The current situation is a race to the bottom. It should be a climb to sustainability for dairy producers on both sides of the 49^th parallel.

Success for US and Canadian dairy producers will come when progressive, dynamic producers support and lead the necessary changes to have milk supply match the demand. Producer-leaders will need to be visionary and able to bring groups with diverse positions to a mutual benefit.

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Glass ceilings for women in business can be a sensitive topic.  That it is a topic at all is the biggest confirmation that gender bias exists. When I approached the idea of glass ceilings in the dairy barn, I had to be prepared to discern what is historical, what is 2018 trendy and what, if anything is true? The biggest problem, as I see it, is that in today’s instant social media world, Information is making headlines that may have little or nothing to do with real life situations. How many of the self-proclaimed authorities on women in agriculture have actual personal experience to back up their rants. How does gender bias limit dairy success? Who is responsible? Where does gender bias begin?

“What is Blatant Gender Bias? What is Unconscious Gender Bias?”

Blatant Gender Bias occurs when there is no attempt to be politically correct. Unconscious Gender Bias puts up many of the same hurdles, however it refers to the stereotypes, both negative and positive, that exist in our subconscious and affect our behavior, without us being fully aware of it.

Here are 4 examples:

• Blatant: “Men should make all the decisions on the dairy farm.” Unconscious: “Farm women are better suited for desk work. Women are also good at looking after calves.”
• Blatant: “Farming is a man’s world. Women haven’t got what it takes to handle cows.” Unconscious: “Dairy jobs have nothing to do with bias. They arise from safety issues.”
• Blatant: “Women today are constantly shaking up the status quo. What’s next? Will they demand pink tractors and trucks?” Unconscious Bias: “The 24/7 nature of dairy decision making, is too dirty and too stressful for women.”
• Blatant: “Women are not welcome in the rough world of dairy farming. I shouldn’t be forced to tone it down just because women are present.”             Unconscious Bias: “The hearty backslapping and banter that are normal among men on the farm are not suitable for women.”

“Dairy Wives Are Dairy Partners”

That phrase sounds empowering at face value. Furthermore, it’s fair to say that most 24/7 dairy managers, when asked if women can do the same jobs that men do would quickly answer, “Absolutely!” However, when I posed that question to my partner at The Bullvine his answer was. “Well, behind the scenes, the answer might be closer to, ‘No’.” I huffed, “Seriously? On any given day what jobs on a dairy farm can’t a woman do?” Then began the explanations. “I know where you’re coming from but you can’t change people overnight!” Apparently fifty years won’t change some people either. Please note that every time I typed farmer in this article, it had to be changed because it only referenced men!! It’s quite likely that stereotypes go both ways.

“Is the Dairy Door Closed to Women?”

When a new consultant, veterinarian or cold calling ag supplier comes to the door it’s not likely that you hear, “Hi. I’m here to speak to your wife.” When you ask “Why?” do they reply, “I’m looking to talk with the decision maker.” With the wife changed to husband and “Hello” to “Goodbye” this is a regular door-closing experience at some stuck-in-the- past dairy business exchanges. Phone calling is even worse? When I try to answer problems, I am often not even trusted to deliver a message.  Questioners that don’t recognize teamwork, partnerships or, at the very least, gatekeepers don’t get the opportunity to join the team, make a sale or share a business relationship. 

“It’s Time for a Gender Reality Check”

Having a good working staff is key to dairy profitability. In actual fact, gender doesn’t influence the ability to do good work.  Three people doing the same job may have distinctly different outcomes. Not all of them will share the same level of success. This could be due to training, work ethic, decision-making or time management. It’s the input that determines success.  Bad outcomes and poor decisions can happen, regardless of gender.

“Does Gender Progress Mean Makeover Or Takeover?”

It’s undeniable that the size, management and future viability of North American dairy farms is being challenged and many may not make a successful transition into the future.  To do so will require that we keep open minds when it comes to technology, genetics, nutrition and, yes, leadership.  There isn’t any room for fear of change based on stereotypical male-female roles. A look at progressive and thriving dairy operations is a clear way to observe that university graduates are still passionate about farming and still coming home after their exposure to modern farm education.  From where I sit right now, the dairy operation next door is growing and thriving under the management of one of the sisters. What was once an unusual choice, is easily recognized as the one that works. Next generation farming can’t afford to bypass 50% of the farm-raised gene pool. Our biases need a makeover to recognize that it’s more important that farmers are focused on the challenging and engaging nature of the work.  Dedication to production will take any dairy much further than passive-aggressive gender discrimination can.

“Male-Female Progress Also Needs Technology-Automation Progress”

If we are talking about biases we can’t ignore the public bias against larger farms, dairy technology and 21^st century animal breeding practices. Once again, the shrinking demographic of farmers is being affected by the biases of a consuming public that is two or more generations from an actual connection to the farm.  It seems ironic that the farmers who are idolized in historical reference and romantic family memories are the same ones who are vilified for working to provide food. The contradiction of wanting to avoid “large” and at the same time “provide enough” is not seen as the challenge it really is. Being met with consumers who doubt and challenge can be crushing and it too rises from biases.  The farmer doesn’t “take a husband” in the nursery rhymes and Old Macdonald didn’t have robotic milkers.

“What Does Gender Equality Look Like?”

Nothing is either black or white.  There is no prescription for dairying that makes decision-making clear cut.  It doesn’t only change from year to year it changes on a daily basis. Having said that, there are many out-of-date discriminatory practices that are holding farm success back. How many of these questions get a “Yes!” on your progressive dairy operation?

1. Are women in the family expected to do work for free doing what would be a paid position for a hired man?
2. Is there quid pro quo? If there is a crisis in the daycare side of the dairy, does the husband pitch in indoors?
3. If there are free tickets to a seminar, symposium or training session, is it always the man who goes?
   For many families in the dairy business, it is not simply finances and cattle rearing at stake.  It is the livelihood and legacy of the family.  The industry has changed.  Social interaction has changed.  However mutual respect and planning for the future demands equality in more than name only.
4. Is your answer “Yes! That’s how we operate!”

“Name Calling.  How Important is it on Dairy Farms?”

In business, we learn much about the respect for the position from the name that it is given. “The wife” dishonors all the contributions made in the same way that “the girl” does, when applied to office workers.  When did you last hear an office authority figure say, “I’ll get my boy to look after that for you~? And, when some farm service, supply or consultant vehicle drives in the farm lane have you ever remarked, “Oh.  He has a girl with him.”  It’s a judgment made solely on gender. Whether it’s an office in a high rise, or a team in the milk house, it’s always better to have the best people doing their best work.  This goes beyond gender. After all, an all-male team can be overwhelmed by bad weather, health issues or equipment breakdowns and we don’t resort to,” I knew a man couldn’t handle that.”

“Women’s Days Are Numbered”

A simple way to know if there is a glass ceiling in the dairy barn is just to do a headcount.  Dairy farmers are quite comfortable working with an all-woman bovine production crew.  But when it comes to female team members the numbers are still counted on one or two hands.  We have one female dairy nutritionist.  Our A.I. company has two women.  We have a female breed association President.  Now what are the male numbers associated with those positions?

The Bullvine Bottom Line

Glass ceilings whether they are in the barn, the business or the board room automatically limit the full potential for success.  No one is perfect because of their gender.  No one fails for that reason either. There is no doubt that we rise by lifting others and when we work together, we get the best of both worlds. We should always inspire the best to rise to the top. 

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There was a time when milk producers confidently positioned themselves as producers of the healthiest beverage on the planet. Milk producers didn’t fight battles defending the production or the breakdown of components. However, today, trends in fat consumption and diet fads have significantly impacted consumer choices. Today the fight is on to determine what motivates people to quench their thirst.

The battle for The Beverage Bottle

A recent article discussed the idea that water has now become milk’s biggest competitor. Michael Dykes, CEO of International Dairy Foods Association (IDFA), reported water consumption as follows: “The North American bottled water market was expected to reach 391 billion litres by 2017” To put that into perspective, consider that, in 2007, single-serve water consumption was recorded at 212 billion litres. As these numbers became a reality, it has also become common to see people with bottled water in hand everywhere you go. Public speakers, church pastors, business leaders and club members have water within reach at all times.  Although many of our food choices are driven by price, the beverage industry points out that consumers are choosing the expensive bottled water over the water they could drink directly from the taps in their homes: “It is calculated by drinking two litres a day from the tap would cost $1.50 a year compared to more than $2800 to do the same with single-served bottle water.”

Conscientious Consumers Are Drinking to Their Health

Whether it’s water, milk or the latest speciality drink, there is probably a health component that is luring consumers to choose one over the other.  Flip through a magazine or recall the latest TV commercial and you can probably repeat the “punch line” or picture that celebrates milk products that now contain a health-desired ingredient.  New market demographics are being reached by milk products that promote ultra-filtered milk that has extra protein. That is the case with Fairlife (a product marketed through Coke Cola partnership) in the USA. 

Where Does Milk Fit into The Beverage Game Of Choice?

Dairy producers work hard 24/7 to produce healthy nutritious dairy foods.  Having said that, once milk leaves the farm, the beverage industry takes over, and milk becomes just one of many players competing in the high stakes game of consumer choices.

Before you read any further, get yourself something to drink. What did you choose?  What options are in your refrigerator? In your pantry? Besides your favourite chair? How many of us are holding milk or a dairy drink in our hands?

How Old Are Milk Drinkers?

There was a time when milk drinkers were automatically categorized as predominantly babies and growing children. Now there are target markets in all age groups.  One of the largest group is the Millennials, who are seen as the functional food group consumers. Athletes and exercisers are also finding that milk is the new sports drink. The massive market of Baby Boomers who have entered the Seniors category is being encouraged to look to milk for their health and wellness needs. Depending on the demographic, there has been massive growth in energy drinks and ready to drink beverages. For Millennials the energy sector has seen 56% growth between 2009 and 2014and the ready to drink market has had an astounding 166% growth since 2009. 

A Day in the Life of Millennials and Milk

As a Baby Boomer, I have a fascination with labels put on the generations that precede and follow my own.  Currently, Millennials are often profiled by groups whom we seek to understand them better for consumer, political or employability reasons.  In the area of beverage consumption, statistics show that Millennials are a drinking crowd. They choose beverages for managing stress, combating fatigue, and for improving weight loss. Given their extreme use of digital tools they also look to beverages to assist in maintaining eye health. Savvy milk marketers promote the strong nutritional profiles of milk beverages as a way for Millennials to meet these goals. Milk energy drinks and milk-enhanced smoothies are becoming a well-recognized way to start a nutritious day. We have also learned from Millennials that the right beverage can help us to survive that mid-afternoon slump or a long night of computer research and study.

Milk Moves into First Place In Thirst Quenching

A study from August 2011 suggested that milk is superior to water and sports drinks at replenishing fluids following exercise. The study author was, Dr Brian Timmons, an assistant professor of medicine at McMaster University in Hamilton, Ontario Canada.

“Milk is better than either a sports drink or water because it is a source of high-quality protein, carbohydrates, calcium and electrolytes,” He explained, “Milk has a high salt concentration which helps the body retain fluid better and replaces sodium that’s lost through sweating.” Results of the peer-reviewed findings were presented in Cornwall England at a conference on children and exercise. A simplified summary of the methodology explains, “McMaster researchers had 14 eight to 10-year-olds exercise on a stationary bike for 40 minutes, then gave them either skim milk, water, or a sports drink to measure hydration. After a two-hour recovery period, 75 per cent of the skim milk was retained in the milk drinkers, compared with 60 per cent from the sports drink, and 50 per cent from the water. Water drinkers also produced twice as much urine than milk drinkers.”

Packaging Also Impacts Consumer Choices

There are many considerations affecting consumer choices.  On the one hand, the science proving health benefits reaches more audiences but, at the most basic level, clever advertising also has an impact. Probably the most significant change in the beverage marketing relates to how beverages are packaged.  There are many new and innovative ways to drink milk.  Wax milk cartons and the iconic Canadian bags of milk are now sharing shelf space with square bottles, round bottles, bottles with flip lids and containers with screw lids. Large and small bottles are competing to be seen as the handy and convenient option for consumers on the go who are looking for a quick meal replacement or satisfying hunger or thirst.

Is the Milk Industry Finding Ways to Be in The Right Place at The Right Time?

While it helps to educate the consumer about milk benefits, at the end of the day, the challenge boils down to making sure that milk beverages are available in the places where people are most likely consuming them. Milk marketers need to get milk into school lunch programs and office building lunchrooms. Milk needs to be at sporting events.  Milk needs to sponsor health programs, senior’s activities and other public events for which milk benefits are recognized. The celebrity aspect of drinking milk is also a way to raise milk’s beverage profile.  I read recently that the day could be coming soon when sports events, such as baseball and football, end their biggest finals at the end of the year by dumping a few gallons of milk on the coach!

Move Milk from The BUCKET LIST to The MILK-IT List

Perhaps it’s time to get milk moments onto our Dairy Bucket List? At the very least, we need to promote the MILK-IT list. We need to be able to talk fluently about the benefits of milk in today’s meal planning. Once we are comfortable sharing the benefits, we need to work socially, politically and on the home front to make sure milk is part of sports, social and business venues. We also can raise the profile of milk as part of a contribution to world economies and for those populations who face poor health due to environmental, economic or political issues.

The Bullvine Bottom Line

Whether you do your own personal household beverage survey, or you do research on the Beverage Industry in your province or state, the fact remains that today we have many more choices than ever before, when it comes to what we drink. If our dairy industry is to remain viable, we must take an active and involved interest. What drives you to drink milk?

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Remember when you were considered forward thinking if you could verbalize your 5-year plan in 5 minutes or less? At a milk board meeting? Well, those days are long gone. Today, dairy strategists are urging passionate dairy business owners to plan using two-time frames at once.  First.  Set up a short-term plan to deal with actionable goals to be completed in three years or less.  Second.  Keep your eye on the long-term plan by knowing how you fit into a 50-year dairy cycle.

Don’t Be Backward About Looking Forward 50 Years

A colleague recently said to me, “If you don’t have a plan for where you are going, you shouldn’t be surprised if you don’t get there!”  Without strategic planning, a modern dairy farm manager is left with two options—reaction or randomness.  Reaction is rarely a path to success and is usually expensive.  Randomness, or considering everything and moving in all directions hoping something will stick, is time-consuming and resource wasting. Of course, the best case scenario is to have access to someone with vision, experience and dairy knowledge that could look ahead and, with supported reasoning, provide us with a glimpse into the future of dairying.

Jack Britt, PhD, Professor and Associate Dean Emeritus from North Carolina State University, Raleigh, NC, USA is exactly such a person.   His recent publications in the Journal of Dairy Science take the long-term view of 50 years, which from his starting point, refers to 2066 (Journal of Dairy Science Britt et al, 2018). One of the notable forecasts refers to the number of herds and their size. “My projections along with those from other dairy specialists, indicate the number of cows and herds in the U.S. will decline sharply by 2066. The U.S. Census projects a population of 410 million people by 2066.  If milk consumption is similar to today’s per capita or per person consumption, we will need around 5 million cows to produce the milk, depending on actual yield per cow.  At 3,500 cows per herd, that means that we could produce the country’s milk with 1,300 to 1,900 herds, depending on the actual production level per cow.” Nineteen hundred herds.  Thirty-five hundred cows per herd. Picture that!

Is Strategic Planning A Waste Of Time? Or A Money Maker?

Having read Dr Britt’s forecast on herd numbers and cow production numbers, you could decide to dismiss it as not relevant to your situation.  However, the clearer the picture we have of the future, the more likely it will be that we can make decisions now that will move us in that direction. To determine if this is possible means taking a second look and considering the changes in the dairy industry in the future as foreseen by the nutritionists, geneticists, veterinarians, reproduction specialists and dairy farmers who joined with Britt in considering the longer view.  

“Dairy farmers in 2066 will meet the world’s needs for essential nutrients by adopting technologies and practices that provide improved cow health and longevity, profitable dairy farms, and sustainable agriculture, “says Jack Britt.

Furthermore, Britte et al. forecasts “that larger dairy farms will continue to make greater use of automation to reduce costs. Improvements in genetic selection will lead to dairy cattle lines that are healthier, produce milk more efficiently, and are more disease and heat-resistant.”

Is Your Planning Strategic Or Standing Still?

Strategic planning, especially long-term strategic planning, is absolutely necessary in a fast-changing dairy industry. There are many records showing that the root cause of many dairy disasters can be attributed to pursuing short-term goals ahead of long-term ones. Unfortunately, too often many dairy operations, especially those with considerable investments or those with generations behind them, are tempted to consider that the process that leads to an annual budget can be a substitute for strategic planning.  The once a year dreaded exercise of preparing a detailed budget is indeed great for clarifying the reality of financial dependencies of the dairy, but it is not a strategy.  Instead, the effective dairy strategist determines what future success looks like, which problems to face head-on, which size and production milestones to target along the way, and where to allocate resources. Financial numbers are part of the process but not the only determining factor.  

Prepare A Quick Response Action Strategy

With long-term understanding and goals identified, it’s time for short-range innovation strategy to make sure that your dairy operation is profitable and sustainable. Looking back fifty years and saying, “Well. We’re still here!” is no guarantee that the same will be true in 2066. Where is your farm relative to automation? What progress has your herd made regarding feed inputs and milk production outputs?  It isn’t always the lowest cost that results in the best production.  What management strengths will keep your herd viable?

The science behind determining the future of dairying may provide good signposts for decision making, but like any forward planning, the critical part is the action plan that gets you there. 

Many of us have been motivated by five-year-plans and are fans of the 50-page strategic outline and marathon team building exercises.   But just like longer hours don’t automatically mean that you have done better work, longer business plans don’t necessarily mean better ones. We need to carry out long-term plans without being distracted by every dire prediction that comes our way.  At the same time, we need the short term consistency that builds efficiency. We need to plan ahead, start today and be flexible when things don’t work out as expected.

New Frontiers – “Dairy Cows Will Be Gene Based Rather Than Breed Based”

If we are to keep the dairy industry moving into a future defined by sustainable success, we need to have a clearer understanding of the way in which dairy breeding could be carried out in the future. Brett paints an interesting picture. “By 2066, the dairy cow will be decidedly different from today’s average bovine. Almost everyone predicts cows of the future will comprise genes from several breeds.  In addition, much of the crossbreeding between and among breeds may occur in the test tube where desirable genes from one breed will be moved into another breed via gene editing.  This reproductive and genetic philosophy essentially represents controlled crossbreeding.  It would be a much more efficient strategy to move desirable genes from one breed into another breed. It differs from conventional genetic engineering because the genes are being moved within species and maybe even within a breed. For example, a gene that codes for improved resistance to a particular disease within a breed might be moved into male embryos being used to produce bulls for A.I. or into embryos for sale.” If we resist these types of changes, are we fighting progress? What alternatives do you see happening in the next decades? Is staying the same an option?

Do You See Your Cows Clearly Or Is Blind Optimism Preventing Progress?

Expecting the banks and consumer to suddenly “see it our way” is not strategy, it is unsupported blind optimism. You may not be able to control the future, but strategic planning can create a direction for your dairy.  Without strategy, you will likely take action only to address immediate problems—a kind of crisis management approach. Strategic planning gives you the structure to make day-to-day decisions that follow a larger vision.  For instance, let’s look at the 57,000 pound figure forecast by Jack Britt. He gives us his reasoning.” This 57,000 pound figure represents a tremendous amount of milk per cow.  However, it stands below top records that individual cows have produced over the last five decades in the U.S. About four decades ago, the record Holstein produced 55,000 pounds of milk in one year, and since then, records have climbed to nearly 75,000 pounds as of December 2015.” He continues putting it in perspective. “An average cow today produces 2.65 times as much milk annually as an average cow did 50 years ago.  If we take today’s average and multiply it by 2.65, we project 59,341 pounds per cow, so our forecasters seem to be right on target and maybe a bit low…” Something to think about.  How does it apply to your dairy operation? Your cows?

New Market Demands. Real World Challenges.

There are several long-term challenges beyond the farm gate that face agriculture over the next 50 years.  One of the most threatening is the growing negative perception that consumer’s have toward modern agricultural practices. They take for granted that modern agriculture has a negative environmental impact.  These handed down stories from the mid-1900s are used as proof.  The facts that are rarely getting headlines actually are much different. “Virtually all agricultural practices have decreased their environmental footprint on a per product basis.  The US beef industry in 2007 used 70% of animals, 82% of feed, 88% of water and 67% of the land than what was used to produce the same amount of product in 1977 (Capper, J.L Journal of Animal Science, 2011). Unfortunately, these statistics are not receiving the proactive dissemination that will lead the millennial generation to believe in the benefits of progressive agriculture. How does this fit into our forward planning?

THE BULLVINE BOTTOM LINE … Big Picture Action Or Passive Dreamer?

We all love dairying, but we must commit our strategic planning away from annual one night stands to proactive long-term commitment. Like most things in life, it comes down to facing your fears.  If you can muster the courage to address the challenges head-on, you can reap the rewards. Whether you agree or disagree with the ideas discussed here, we hope that you have an idea of how you will move with or ahead of change. This applies whether we are dairying today or dairying fifty-years from today.

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Successful trade talks and glasses of milk.  Can they be compared? Is it all merely political rhetoric?  Perhaps both will end up going down the drain. Does it matter?

While logic says there is more at stake than a glass of milk, NAFTA trade talks certainly stir up endless arguments regarding the state of dairying in the North American Free Trade Agreement negotiations.

Is It Clear What We Are Arguing About?

The optimist says the glass is half full and there is hope for expanded dairy market opportunities. The pessimist says the glass is half empty and regulations must prevent countries, such as Canada, from reducing what is available for others. The pessimist says the glass is twice as big as it needs to be and that dairy markets need to cut production. The realist says the glass contains half the required amount of liquid for it to overflow and says until supply and demand in the entire dairy market is analyzed, the resulting decisions will fail to achieve profitable results.

What Does Class 7 Pricing Mean at the Farm Gate?

Canada’s Class 7 pricing program has hit the headlines and, of course, depending which side of the argument you fall on it seems to inspire this half-full, half-empty debate. As of May 9^th, the NAFTA discussions have not mentioned dairy issues. However, USA industry leaders are confident Class 7 will be addressed before the deal is done. Michael Dykes, CEO of the International Dairy Foods Association feels that dairy will probably be one of the last things discussed. He says, “I remain optimistic we’ll get something done on Class 7.” This stems from his feeling that the Trump Administration understands both the short and long-term impacts that Class 7 has on American dairy farms. The example is given of the way Trump defended Wisconsin dairy farmers early in his administration (Trump Fabricates False Dairy war with Canada). Once again, the side you choose depends on where your farm-gate profits are made.  Your perspective changes as your real profits change. 

If Markets Improve for One Side, Is it Always Bad News for Everyone Else?

From the Canadian side of the market, there are signs that things are looking brighter for Canadian farmers.  Of course, you must remember the relative size of the two marketplaces.  The entire Canadian dairy is only one-tenth of the size of the US market.  I recently heard the comparison that, “All of the Canadian dairy is the same as the state of Wisconsin and the Chicago market.” However, it is perceived as threatening, when simple percentages are quoted which note that Canadian milk production is expected to increase this year by 4% to 21.6 billion pounds.  When that statistic follows three consecutive years of growth in Canadian milk production this summation of Canada having its cake and eating it too, is supported with more statistics: “Since 2014 Canada’s milk production has grown by more than 16%”. This is undoubtedly a glass-half-full analysis that might inspire a cynical look at Canadian competition. Is there any value in wanting all layers of the market to operate at a profit? 

Red Flags.  Milk Powder. Lost markets.

It would be so simple if the dairy market dealt with fluid milk only.  But it doesn’t.  The vast majority of milk is consumed in solid form. Furthermore, the principal point of comparison is now becoming concerns over the exporting of skim milk powder. Globally dairy farmers may be partly to blame for the oversupply of solid milk products.  Now that butterfat has a renewed life with support for the idea that fat does not cause heart disease and fat gives dairy product their taste. The US is almost balanced on fat produced and consumed.  However, the fact remains that there is too much powder.  IfIf the components of the milk produced were 4.5% Fat and 3.0% Protein, instead of the current 3.8% Fat and 3.0% Protein, there would be proportionately less powder.  Of course, that assumes that less milk would be shipped.  An added benefit of more concentrated milk would be less transport costs per unit of solid.  Demanding less milk volume but the current level of solid would be a three-way winner: less stress on the cow; less fossil fuel used and less environmental impact.

It’s Not Fair! What is the Measure of Fairness?

Both the amount of the Canadian exports and the cost-of-production concern Mr Dykes who notes that Canada has “gone from [exporting] about 20,000 MT to last year they did 70,000 MT of skim milk powder.” From his perspective “It defies logic when the highest cost milk producer in the world can land skim milk powder in Mexico three cents cheaper than we can in the U.S. Skim milk powder is a thinly traded product, even a one cent difference can mean the loss of a sale.” When it comes to competition for non-fluid milk products, lawmakers urge Lighthizer to press for elimination of Canada’s Class 7 pricing program. 

What’s the Point of It All?

There are points to be made on the plus and minus sides for all parties involved in the dairy negotiations.  It is probably redundant to consider that the point of trade agreements is to reach an agreement…. Something that works for all the parties involved.  There is an assumption that there will be give and take.  However, especially in the news headlines, dairy producers want to see themselves aligned with the government that provides them with more “take” than “give”. 

To Deal? Or Not to Deal?  That is the Question

Canada gave up 3% of its production in the CETA (Comprehensive and Economic Trade Agreement) negotiations between Canada and the EU.  In the twelve countries TPP (Trans-Pacific Partnership), the Trump administration pulled out of TPP in January 2017.  The US would have had the opportunity to compete in the Canadian market if it had stayed in TPP. The remaining eleven countries have signed the TPP, now known as CPTTP.  So the 3% share of the Canadian market is open to countries like New Zealand and Australia.  Obviously, with multiple trade deals being considered simultaneously, the issues are not simple to resolve.

Not all Production is as Simple as Produce a Product and Then Sell it. 

There are many layers in between the farm field and the grocery store shelves.  Processors play a crucial role in dairying.  Their profits change the playing field every day. “Processors never ship at a loss.” This is a key factor that, long before trade negotiations, has a significant impact on US producers’ bottom lines.  Canada’s supply management is intended to avoid the problems of over-supply — but it’s not seen as the answer to problems facing small to medium sized US milk producers. Additionally, NFU (National Farmers Union) in the US recently reported that dairy farmers receive 20% less of the retail food dollar compared to 2014. The dairy industry needs to find out and take action in dealing with the root cause of this decline.

The NAFTA agreement has much to work out.

There are thirty-two identified chapters to be negotiated in the NAFTA agreement.  At the end of April 2018, only six were concluded.  If trading parties can’t effectively negotiate to open markets between themselves, they will be forced to look at the even bigger world market, which also has its own what’s-in-it-for-me perspective on dairy trading. All countries get wrapped up in the blame game, but when you’re dairying 24-7, the real discussion always comes down too how to effectively sustain a profitable dairy industry. The glass half full or half empty is only relevant as long as the milk producers remain relevant.

The Bullvine Bottom Line

Let’s hope that throughout the bombardment of upcoming headlines, the milk consumer opportunist says, “Thanks, folks! While you are debating whether the glass is half full or half empty, I drank it!”

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Remember in the 50’s when Paint by Number sets allowed anyone to produce recognizable scenes using oil and brushes?  It smelled like art.  It used artist’s tools.  But, unfortunately, just simply following the numbers did not make the best artists?

In a different way, the dairy industry loves reducing our industry to numbers!  Statistics.  Data.  Every day a new analysis listing percentages and totals flashes across the screens and headlines in front of us. If not, we can seek them out ourselves.  Unfortunately, there is no guarantee that seeing and hearing the numbers … even daily…will turn us into better milk producers any more than painting by numbers will turn us into great artists.

California Top Numbers

For example, recent headlines focused on California milk production reported all those statistical numbers that grab our attention. “59 counties produce 50%” “13 counties account for 25%” and “California continues to produce roughly 20% of the nation’s milk supply.”  The final statement by numbers reported, “USDA’s analysis shows that 826 counties increased milk production in December 2016 compared to the previous December. One thousand thirteen counties decreased production in that same period. Most of the reduced production came in the central and southeast regions of the country.”

This is all well and good.  I like knowing what 25% are doing?  But beyond that, I ask, “Are the other 75% doing something different? Or is 25% a large number in this context?”

Living for almost fifty years with a master of statistics, I am trained to ask the second question,
“What do the numbers mean for what I am doing?  Should I or could I do something different?”

“Dairy Farming is the Leading Cause of Statistics.”

That subhead may seem to emphasize humor. In fact, there are numerous mathematical ways to look at the dairy industry. When you reduce U.S. milk production to numbers, you learn that milk production is highly concentrated. The USDA reports that 50% of California and Federal Milk Marketing Order production is found in just 59 counties. Looking closer at those 59 counties, you learn that they are just 3.6% of the 1,632 counties that produce milk in California and the Federal order system.  Further analysis, reveals that 13 counties account for 25% of that milk production and 7 of them are in California.  Those 7 California dairies account for nearly 18% of milk production.  And one county – Tulare County in California’s Central Valley, accounts for nearly 6% of all milk produced in California and the Federal Order system.

Some Dairy Numbers Cause Excitement. Some Dairy Numbers Cause Exits.

Depending on where you farm, you must determine what it means to the success of your dairy operation.  Should you move?  Is it better to be outside the main concentration area? Should you consider becoming pro-active for increased federal support? At the day-to-day operations level, do the statistics inspire you to seek out suppliers and dairy support teams who can provide input on increased milk production or better profit margins based on your logistics?

Where you fall in the statistical analysis is important but even more important is knowing how to use the statistics to meet your business goals. Does the size of leading national producers affect my operation?  Perhaps the biggest question revolves around the scale of the consumer base that directly affects my dairy operation.

“Are we using statistics as a drunken man uses lamp posts for support rather than illumination.”

If the only use we make of statistical analysis is to prove that what we are currently doing is right, eventually the dairy industry will move on and leave us behind.  Dairy managers must always make pro-active decisions every day.  The hardest of those decisions will involve determining what numbers are most relevant.  It is absolutely vital to know your own numbers and how they compare to your local, state and national peers in the dairy community. Here are six that you can’t afford to overlook.

1. Weight of milk
2. Weight of animals
3. Ration numbers
4. Comparison by age group
5. Comparison by period
6. Geographic impact. What effect does your location have on all the above?

First, you must collect all the data, and then you should be creative in using it to make informed decisions. 

PROFIT BY THE NUMBERS

Sustainable success is measured by numbers up, down and location east versus west

Up:

USDA’s analysis shows that 826 counties increased milk production in December 2016 compared to the previous December.

Down:

One thousand thirteen counties decreased production in that same 2016 period. Most of the reduced production came in the central and southeast regions of the country. During the same time, there has been a drop off in production in California due to the pressures relating to drought and low milk prices. Three California cooperatives have petitioned USDA to join the Federal Order system, with a vote expected later this year.

West is Best:

Twelve of the top 13 counties are in the West. Others on the list include Yakima, Wash., Weld, Colo., Pinal, Ariz., and Chaves, N.M. When all the numbers are totaled, California continues to produce approximately 20% of the United States milk supply. 

East is Least:

Lancaster Pennsylvania is the only county east of the Missouri River to make the top 13 counties list

The Bullvine Bottom Line

What do the CALIFORNIA NUMBERS mean to you? Is it entirely geographical or is there a logistical component? Simply knowing the numbers, will not ensure dairy success. However, we can learn from looking at the big picture they provide. Then we must decide how to turn the numerical science into dairy profitability.  That’s the art of using numbers!

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Canadians have long looked with jealousy, envy and/or admiration at the school milk program in the USA.  We think what a huge difference that could make to national production requirements.

In the US that is 50 million milk drinkers. It often appears to us that this is a subsidy that isn’t acknowledged front and center like the backlash we get for having a quota system.  Having said that, it is a long-term marketing plan that could keep the dairy market growing.

“A positive experience with school milk can build lifelong consumers.”
Tom Gallagher is Chief Executive Officer of Dairy Management Inc.™, 

It is logical for the dairy industry to consider positive ways to keep milk consumption rising and discovering new ways to attract new consumers.  That’s the only way to sustain the dairy industry. Regardless of what support the industry receives, long term industry success will depend on the consumers’ opinion of milk as their choice of beverage.

This has had me tuning in more carefully to the way we make our beverage choices.  I haven’t yet heard myself, or any other social hosts, restaurants or meeting organizers say, “What would you like to drink? I have soda, beer, wine and ice cold, delicious whole milk!”

If we are looking for the long term survival of the dairy industry, we must consider the future consumer and how they will make their choices. I did a super mini survey among my eight grandchildren – five of whom have free milk at school.  We are fortunate that none of them are lactose intolerant, but it is interesting to note that it isn’t whether it’s free or good for you that is driving their selection processes.

Kids Interest in Beverages is Learned from What They See!

I sometimes ask myself if milk should be restricted to certain age groups.  Can you imagine a child reaching the age of consent and looking with delight to having their first glass of milk?  Would milk bashes become the new drive-your-parents’-crazy party gathering? Of course, I’ve wandered far from the (beaten) path. My point, such as it is, is that we don’t do enough to promote the product (from which we earn our living).

Probably I spend too much time at the refrigerator door, replenishing my glass of milk.  Having said that, I am delighted to see the modern trend toward smoothies.  Here is a yummy place for milk, cream, yogurt, and cheese to add new dairy product consumers.  Granted there are non-milk milks that are used here such as soy and almond milks but, in general, this is a growing potential market. Even the beverage leading coffee chains are expanding their brands with new lattes and cream flavors.

Learn from Other Beverage Industries

More attention is being placed on the benefits of healthy eating.  Whole industries from bottled water to micro-brewers to winemakers and specialty coffee shops are cashing in on the healthy and tasty ways their beverages provide what the consumer is looking for.

Beverage Industry Trends

That isn’t to say that there aren’t trends that are changing the beverage industry.  In January of last year, the Business Insider reported, “The beverage industry is experiencing some major changes heading into the new year. ” The article went on to point out health and wellness trends such as “all-natural, energy-boosting, relaxation and fortification.” Concerns are rising in the beverage industry. “As the demonization of sugar increasingly paints big beverage companies as the enemy, the industry is eager to humanize itself.”

Does Providing Good Food Translate into Doing Good Business?

Are we teaching kids to drink milk? Schools represent more than 50 million current and future consumers who have the option to consume milk and other dairy foods at least 180 days a year. Tom Gallagher, Chief Executive Officer, Dairy Management Inc. sees this as an opportunity to affect the health of young consumers. “Youth wellness is a longstanding priority for dairy farm families. In the USA the dairy checkoff is seen as a way carrying out this commitment as part of its daily mission.”

In Canada, there is no government involvement, but John Leveris, Dairy Farmers’ of Canada assistant director for market development, speaking for the not-for-profit initiative ESMP (Elementary School Milk Program) says

“Typically the milk is sold to the schools at prevailing market prices. Schools then determine a ‘fundraising’ profit (generally $0.05 to $0.10), after which families pay approximately $0.65 per carton.”

It’s a significant discount from what one would pay for a 250mL carton of milk at a restaurant or convenience store,” he adds.

Is Milk’s better-for-you health halo Trendy? Tired? Or Tarnished?

As an industry, we must not just maintain but grow consumer support.  Our future depends on it.  Is our long-held image of milk and milk products a product of seeing our industry through rose colored glasses?  As long as we receive our producer’s checks, do we need to worry about what beverages are the most popular?  Maybe milk isn’t even in the top 10.  What is the beverage consumers are sipping?  Is the dairy industry slipping?

Does the next Generation of consumers care about what is “Good for you?”

A little carton of milk may seem like a minor thing, but it can have far reaching benefits for both the producing and consuming sides of the dairy industry. Statistical analysis has important considerations. “There are approximately 200 days in the school year which means there are 200 lunches, or in other words, 200 opportunities for children to make healthy food choices.” Although the intentions are good, it may be a bit presumptuous to assume that merely being presented with a nutritious beverage will tip students choices toward milk now or in the future.

As Food Producers Are We Required to Set an Example by Consuming Our Product?

If you work for a car company, you drive the company car.  If you produce computers, you use the company brand.  Many companies require that employees wear company uniforms, colors or logo.  It’s considered part of the job to promote and support the product produced. Is there a similar requirement for milk producers? Is there a line in the sand between producing milk and drinking it and serving milk products?

The Bullvine Bottom Line

The dairy industry is at a turning point as it responds to the continuous changes that keep the beverage industry evolving.  There is much to learn, and it’s no time to distance ourselves with the excuse that passion for our industry is the only branding producers need to be involved in. There is a need for all milk stakeholders to be much more aware of the many forces that impact the milk consumer.

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The dairy cattle breeding industry has, for the past century, had goals … increased lifetime production, udders compatible with machine milking, first calving at second birthday, … BUT … mostly the goals have not considered the people who spend their grocery dollars to buy dairy products. Yes, consumers are important. Yet consumers are, 99% of the time, the farthest thing from breeders’ minds when they make breeding decisions.

With all the back and forth in the media these days on trade and supply and demand in milk products in North America and also the world, The Bullvine decided to study the USA, as an example, of how breeding could possibly take place in the future in order to meet consumer demand for milk products. During the writing of this article, we consulted closely with Dr Jack Britt, as he has been giving considerable thought to what the US dairy industry will be in the future. Our review of Dr Britt’s work included presentations, that he made on dairying in 2067, at the CRI Annual Meeting in January 2017.

Current Situation for US Milk

In short, the US is swimming in surplus skim or what one writer called “a glut of skim’. To put it yet another way it requires the processing of too much milk to get the needed amount of butterfat. Thereby leaving a mountain of skim that must find a home in America or abroad. All the while when there is excess production in Europe, New Zealand and Australia. The result is that the US farm gate prices have tanked. Recently some producers have been informed that their processor will no longer pick up their milk.

After a thorough study of total domestic and export disappearance of US milk in 2016, Dr. Britt estimates that America consumes only 82% of its skim solids while using 97% of its fat solids. Simply said to come into balance the US needs to reduce its total milk production by 18% and significantly increase the fat percent in that reduced national production. By the way that significantly increased fat percent would need to be 4.6%.

History of US Milk Supply

The US dairy industry, in the past, operated well when supply was 105% of domestic demand. The current production level of 115+% of US demand has thrown the industry into disorder. With low prices, farm shipments increasing just so farms can maintain their cash flows and many newer producers, with debt and limited equity, being forced to leave the industry.

In the past when the milk supply in the US significantly exceeded domestic demand many governments and volunteer programs were implemented including the buyout of milking herds, purchase, and storage of excess butter, powder and cheese mostly destined for export, school milk for children and more.

Dairy marketing programs with commercial users (cheese, pizza, etc.) have been successful, but not to the extent that they have stopped the rise in the burgeoning stocks.

Moreover, cow numbers have crept up a bit in recent years and this means more cows are in the national herd and these cows are producing more and more each year.

No initiative has been the long-term solution to bring stability to milk supply or demand for milk in the American dairy industry.

Breeds (2014) in America

For dairy cattle farmers one immediate question is … “Do they have the right breed of cows or have they been making the right choice when selecting sires for their herds?”

Current (2014) production averages by breed for recorded cows are as follows:

Table 1 – American Breed Production (2014) for Officially Recorded Cows*

* Data Source : Council on Dairy Cattle Breeding (https://www.uscdcb.com)
** Milk yields are for officially recorded cows
*** Milk yield for officially recorded cows exceeds the average US cow’s production by over 4,400 lbs

When considering Table 1, it is important to note: (1) the weighted butterfat average is 3.82%; and (2) that the weighted production level of officially recorded exceeds the level for the average US dairy cow by 4,400 lbs.

The Bullvine asks … if all US dairy cows were Jerseys or had a fat percent like Jerseys … would there still be a problem of not enough fat in proportion to other solids? Although Guernsey’s are few and far between their P:F ratio may be what the industry needs to bring into balance fat to other solids according to domestic disappearance. Breed loyalties run strong with dairy cattle breeders and it normally generations of selection to increase Fat %.

American Customer Needs (2030)

Healthy human nutrient intake has had a very significant uptake in research projects in the past decade. One big winner from this research has been the dairy industry with butter and whole milk now on the good side of the ledger, where just five years ago they where severely frowned upon.  In short, butterfat is no longer a swear word.

Considerable research into milk products is now in progress and a decade from now consumers will have many new or enhanced products that are based on milk or that contain milk products as a significant ingredient.

Other Factors That Will Affect the Desired Milk

The list is almost endless of factors that will change the way milk is produced and the component composition of milk the processors will demand. A partial list of factors could include: forage/pasture diets (80-90% forage); ways to minimize transport costs (don’t ship water); ways to best utilize storage capacity on-farm and at processors (higher component milk); environmental and emission regulations; a2 milk; the best milk for cheese making; enhanced fats in butter; … etc. As well as all the on-farm factors of cow size, cow mobility, cow feed conversion, labor minimization and adoption of technology.

The challenge for dairy cattle breeders will be to change their genetic, nutrition and management programs to capitalize on the opportunity to ship milk that brings the premium price.

Breeds in America (2030)

Dr. Britt’s work predicts that the average US cow in 2030 will produce 34,100 lbs of milk, that number considers the advances that will be made in genetics, nutrition, management and farm practices.  34,100 lbs. is 155% of what the average (all breeds) cows produced in 2014.

But is that the way to go? More and more and more milk? More and more and more skim? More and more and more whey? Is more volume the route the dairy breeding industry always needs to follow?

What about Dr. Britt’s idea of 4.6% fat in the milk? And what about a more significant portion of the national dairy herd being crossbred animals for reasons other than production?

The Bullvine offers (Table 2) a suggestion for breed composition and for when cows produce only 130% of their current (2014) volume of milk.  But with enough fat to fill the American domestic need.

Table 2 – Possible American Breed Production (2030)*

* Assumes dramatic genetic improvement for Fat % and Protein % and no genetic improvement for milk volume.
** Estimated milk yields for officially recorded cows at 130% of 2014 production
*** Dr. J H Britt predicts average US dairy cow’s production in 2030 will be 34,100 lbs (155% of 2014)

Do the numbers in Table 2 make sense? Are they achievable? Remember that the heritabilities for fat percent and protein percent are high and there will be 5 generations of cows before we reach 2030. If the numbers in table 2 are not achievable, then what are the numbers that the American dairy industry needs to plan for?  Or simply do Jersey and Guernsey need to be the breeds for the future?

Of course, there will be fewer cows needed to meet the national demand for milk in 2030, but that is a fact of life that the dairy industry has been living with forever.

Sires To Use

For Table 2 to become a reality, then heavy emphasis would need to be placed on selection for fat percent and some emphasis on protein percent. Sires that increase fat and protein yield but do not increase milk yield (0 PTA Milk) would help the process immeasurably. Table 3 provides some examples of high fat percent North American sires.

Table 3 – North American Sires that are High for Fat %

* Milk Rel – sires 90% and higher are daughter proven and sires 80% and lower are genomically evalauted
** Fat % cannot be directly compared US to Canada. All sires listed are at the top for their grouping.

Note that Fat % cannot be directly compared USA (expected daughter performance) to Canada (breeding value). Most of the sires in Table 3 may not be well known as North American total merit indexes place only minor emphasis on fat %.

The Bullvine Bottom Line

The entire global dairy industry, not just the USA, needs to take heed and implement ways of balancing milk supply with the demand for milk products. If fat percent and/or protein percent are to be changed significantly for the milk shipped to processors then genetics will be involved. And 2017 is not too soon to start considering ways that genetics can assist with balancing supply and demand. Definitely the balancing is more than just a genetics problem, all stakeholders need to bring forward possible solutions so dairy farming and the dairy industry can be viable and sustainable.

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When food marketers start fighting with each other, nobody really wins. At best the consumer will become confused.  At worst, the daily headlines will grossly overuse clichés and puns (aka will fight ‘til the cows come home”). If I see “Crying Over Spilled Milk” once more, I am going to start crying for real.

Is Milk Champion Voting for “More” milk or “Less” Milk? Or “More REAL” Milk?

Senator Tammy Baldwin (D-WI) has introduced the DAIRY PRIDE ACT bill. It has quite the detailed acronym:  Defending Against Imitations and Replacements of Yogurt, milk, and cheese to Promote Regular Intake of Dairy Everyday. If you note the starting letters it may be clearer to you.  Words are a very important component of this bill. The aim is to suppress the use of the word “milk” on non-dairy plant-based beverages such as almond, soy and coconut milk.  If this bill becomes law, all non-dairy items which currently present themselves as milk, would have to undergo name changes.  The goal is that everyone buying milk would be getting real milk and not plant based food and beverages.  However, according to the Executive Director of the Plant Based Foods Association, Michele Simon, “There’s no evidence to show a connection between the rise of plant-based milks and dairy milk’s decline.”

MILK:  You can spill it and You can spell it.  But DON’T Misuse it”

Rightly or wrongly some people are convinced that erroneously non-dairy drinks as milk, has resulted in people choosing beverages for the wrong reason.  Those supporting the DAIRY PRIDE Act are looking to reinvigorate U.S. milk consumption by bringing consumers back to real milk or as they put it, to milk that is only from mammalian secretions. The non-dairy milk market is a $2-billion-dollar market reports Michele Simon. Her argument is that there is much more information beyond the word milk on the containers and that consumers are not confused about what the product actually is.

It isn’t about SPILLED milk, it’s all about DOLLARS DOWN THE DRAIN!   

Sales are the measure of success for every food producer.  Over time, trends develop which contribute to informed decision making.  Since 2015 dairy milk sales have decreased by seven percent. By 2020, forecasts suggest that these numbers could decline by another 11 percent. If you look at your own experiences, it isn’t hard to accept that the past forty years have seen major changes in dairy consumption.  We used to drink nearly 22 gallons of milk per person per year in 1970.  By 2012 that quantity has dropped to 14.5 gallons. For analysts and financial planners, the desire to be able to definitively pinpoint the causes and effects of the decline is driven by the need to have a sustainable dairy industry.

Consumers are Going with the (Milk) flow!

Eating habits shift over time.  In the past 50 years technology and lifestyle changes have impacted milk sales.  The arrival of convenience foods in the 1970’s and ‘80’s, had a major impact on milk consumption. Along with eating out more frequently, consumers shifted their choices to more versatile and convenient alternatives to fluid milk.  There has also been an increase in consumption of such dairy products such as yogurt and cheese.

“If it’s made from Canadian Milk, it’s worth crying over!”

In the midst of all this tugging and pulling, one marketing group has decided to face the tears head on.  A new campaign has been launched by The Dairy Farmers of Canada (DFC) which is choosing to highlight the value of tears.

“The Dinner Party” is a theatrical promotion which opens on the scene of an elegant tableau frozen in time.  Slowly the camera moves down the beautifully appointed table revealing that each of the party guests have been caught with tragic facial expressions and tears streaming down their cheeks. As the camera reaches the head of the table, the source of the tragedy is revealed. There is a toppled pot of cheese fondue which is about to spill off the edge of the table onto a man’s lap.

“Everyone knows spilled milk isn’t worth crying over, but it’s a whole different story if that milk happens to be Canadian,” says Paul Wallace, Executive Creative Director, DDB Canada Toronto. “In this campaign, we communicate the high quality of Canadian milk by showing different characters crying over spilled dairy products – because losing even a single drop of ice cream made with quality Canadian milk is a real tragedy.”

Name Calling “Milk by Any Other Name”

The drama over the way milk is advertised goes beyond the highlighting of the benefits of milk from dairy cows. One reason for the rise in nondairy plant milks is because of taste. Over the last decade, consumers have been seeking options beyond the traditional whole, low-fat, 2%, or skim milk. Spokesperson Simon highlights that “There are many options to choose from.

While almond, coconut, and soy are among the most popular, there are nondairy milks made from hemp seeds, flax seeds, oats, rice, macadamia nuts, pecans, and cashews.” She summarizes, “They’re all piquing consumer interest.”

For Crying Out Loud Are Milk Drinkers Too Smart? Or Too Stupid?  

We always think laws are good if they keep or put money in our pockets.  However, we aren’t as impressed if the assumption is that we are not smart enough to make good choices or to recognize bad ones.  There is a fair question posed by plant-based food supporters, “Why would a consumer say ‘It’s no longer being called almond milk so I’m going to go back to drinking dairy’?” They also add, “Tell Congress to Dump the “DAIRY PRIDE Act. No one is purchasing plant-based milk, cheese, or yogurt because they’ve been tricked into thinking it’s a cow’s ‘lacteal secretions.’” The precedent for siding against the dairy industry has already been set by a case adjudicated in 2015. a California judge ruled in favor of Trader Joe’s after the grocery chain was sued over the use of the word “milk” on its nondairy soymilk product. “No reasonable consumer” would confuse soy with dairy, cited U.S. district judge Vince Chhabria. The federal standard identity for milk “does not categorically preclude a company from giving any food product a name that includes the word milk,” Judge Chhabria said in his decision.

“OUT of ORDER!” Who Will Get Hammered in Court

Sometimes the issues need to be taken to a higher court. It isn’t the first time that the agri-food industry has appealed for legal support.  In 2014 Unilever was in court on behalf of its mayonnaise brand, Hellmann’s. They felt that the product “Mayo”, an eggless spread, marketed by Hampton Creek Foods, violated FDA definition of mayonnaise because it didn’t use eggs. In the end Unilever dropped the lawsuit and, eventually, launched its own version of eggless mayonnaise.

FDA Expected to Churn Things Up with Milk Rulings!

Both sides of this argument are confident that the FDA will rule in their favor. Accurately defining the word “milk” is one of the expected outcomes.  The recognition of the health benefits of milk are also owned by both sides who claim heart health, strong teeth, weight loss and health benefits for growing children. At the end of the day it isn’t about who’s right or wrong.  Although legislation may temporarily seem to clear up confusion or commercial conflicts, the real drivers of consumer choices are too varied to be reduced to a simple legal decision.

The Bullvine Bottom Line

In a world that is promoting everything “alternative”, it isn’t surprising that the dairy industry is also getting caught up in the turmoil. Regardless of which side of this beverage argument you support, there is only one thing you can be absolutely sure of. “Both sides will be milking it for all it’s worth!”

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We all prefer to be seen in the best light but, in the case of milk, the very lighting that attracts us to the dairy aisle could be causing problems. At least that’s what the headlines are saying.

The LIGHT that Shines on Milk Could Be Spoiling It!

Bottles, boxes, cartons and bags. There are growing varieties of ways to bring your milk home from the grocery store.  As dairy producers, we would like to think that after milk leaves the farm, it will arrive at the table in the same healthy condition that it left in.  On the contrary, some recent news reports are suggesting that packaging methods may not have a positive effect.  Are we to understand that some packaging causes milk to go bad? Wrong! Well then, is the problem all about light getting to the milk through the packaging? Wrong again! In actual fact, when it comes to milk going off, the contributing factor is the light itself. E

The Latest Bad Milk Buzz Concerns LED Bulbs.

You know of course that LED bulbs are the ones that we all thought were a good thing to support and switch to. Now headlines are suggesting that LED lights ruin milk by making it deteriorate faster. “LED-Exposure causes milk to degrade more quickly.”   (newfoodmagazine.com   June 10, 2016).

Are the Headlines True? Do LED Lights Make Milk Go Bad?

To shed more light on this topic, we have to seek out a new study from Cornell (news.cornell.edu) entitled “Consumers sour on milk exposed to LED light” which states:

 “Cornell researchers in the Department of Food Science found exposure to light-emitting diode (LED) sources for even a few hours degrades the perceived quality of milk more so than the microbial content that naturally accumulates over time. Their study determined milk remained at high-quality for two weeks when shielded from LED exposure, and consumers overwhelmingly preferred the older, shielded milk over fresh milk stored in a typical container that had been exposed to LED light for as little as four hours.”

Attention: Please re-read the previous paragraph and take special note of the words ‘perceived’ and ‘preferred.’

The Cornell Study Confirms Things We Need to Remember

“Exposure of fluid milk to LED light negatively affects consumer perception and alters underlying sensory properties.” Furthermore, it confirms that we have recognized for decades that light affects the flavor of milk.

 “Light-induced flavors in dairy products are in no way an unexpected or novel observation (Browne, 1899). This study differed from earlier work in the use of more modern LED light illumination and the incorporation of a large consumer study with descriptive sensory measures. Light-activated flavors have been shown to produce robust negative consumer response (White and Bulthaus, 1982)…. Producing milk in packaging protected from sunlight has been discussed for almost 100 years.”

We Are Being Told That It’s the Color of the Light That Matters.

“Although the wavelength of LED lights is of lower total power than fluorescent lighting, they emit strongly in the blue spectrum (Heffernan et al., 2007; Narukawa et al., 2010). This isn’t far from the 450nm absorption maximum of riboflavin.  Riboflavin has been found to be the most destructive (by Choe et al. 2005). Thus it may be more effective in degrading riboflavin and releasing energy to the milk.”

Two Things Speed up the LED Reaction: 1. The Color 2. The Brightness

So what?  Well, the data is showing that even a relatively short exposure to LED light (4 hours) will readily induce light-oxidized flavor, thus reducing consumer liking (Hoskin and Dimick 1979.

So next time that “Why Does the Milk Taste Bad?”  conversation comes up, here are four tasteful points that will prove especially enlightening.

“Bad taste.  Bad milk.  That’s NOT the truth. “

1. The milk is not going bad.

“The whole problem starts with trying to be too bright.”

2. Light is having an effect on consumer perceptions and taste buds.

“Blue Light May Be COOL Cool, but it is NOT the RIGHT light.”

3. The real culprit is blue light which is causing the deterioration. LEDs can be mixed to any color temperature, so those making the selection need to turn to “warm white” instead of “cool blue.”

“When good Milk leaves a bad taste, put the BLAME where it belongs.”

4. Marketing studies proclaim that lighting done right will increase retail sales. Now managers need to combine this art of attraction with results that also prove that milk may need special consideration to prevent the taste going off.

“It’s All in the Eye of the Beholder”

If retail stores remember that the customer is always right, they will accept the “perceived” reality that taste is being affected by the lights and make sure that they don’t try to make milk sales by providing too much bright blue light. If they ignore this, public perception will turn to the reality of deteriorating milk.  I tend to agree with the viewpoint that sums up the situation this way, “This research points the way to home milk delivery, in brown or blue glass bottles, as is used for other beverages whose flavor we care about.”

The Bullvine Bottom Line

At the end of the day – or when you’re in the grocery line — it seems that milk producers and consumers are destined to keep getting caught between LEDs and a dark place. Is it too bright?  Or too blue?  Milk’s journey from stable to table has many twists and turns.  The one thing that we want is for it to arrive healthy, fresh and delicious. We can all drink to that!!

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Are We Puppet Masters or Yo-Yos?  There are many things that can be a bother to hard working dairy managers but the one that comes up most often under “it drives me crazy” is the dairy yo-yo effect of rising and falling milk prices. Asked about the state of the dairy industry, 95% of the time you only get two answers from producers:

1. Milk prices are up.
2. Milk prices are down.

For some reason these two answers never seem to change.  They’re a constant source of stress to everyone in the dairy industry. If they were the only two fluctuating prices it would be one thing but the same dizzying rise and fall happens with commodities such as corn, soybeans, canola, corn gluten, cotton seed and whatever you need at a particular time! Is it predictable?  Is there anything to be done about it?  Well if there is absolutely nothing that can be done, I find myself asking, “Why stay in the dairy industry?”

Up is Good!  Right?

You might think that rising milk prices are a good thing.  But unless you have control over keeping them in that beneficial position, you end up feeling like a puppet on a string.  Today the show goes on.  Tomorrow you’re jumping to someone else’s tune.  Instead of always responding to extremes, is there anything to be said about risk management that considers a less reactive and more proactive response?

THE MILK PRICE IS THE UNSEEN HAND MANIPULATING DAIRY MANAGEMENT

Dairy managers will tell you that they buy feed, nutrition rations, replacement cows and other inputs based on the price of milk.  Some members of the Hunt family object to this strategy saying, “That is like buying my car based on the price of gas.”  Another Hunt responds, “If that were true, we would all drive Chevy volts.” On the farm, reluctance to take a different approach means that we drive ourselves into over-supply situations. When everyone does that it means more total national production. Even when there are farms exiting the industry the total national production goes up. This is definitely not a good scenario.  You might even say it’s wooden headed!!

PAST MARKET STRING PULLING FAILS

Back in the 1980’s the publicity over the whole herd buyout program was so negative many were sure that that particular string would never be pulled again. Well not until 2002 that is, when prices dropped from $15 per cwt in 2001 and $12 per cwt in 2002. The terms were different this time but the critics are still debating whether the program actually worked.

Between July 2003 and February 2006 the USA cow numbers which initially went down by 100, 000 head rebounded to the original levels by 2006. Milk prices briefly averaged $26 per cwt in 2004 and $15 per cwt in 2005.  But by 2006 prices again averaged less than $13.

2016 MARKET MILLION DOLLAR STRINGS

There are many strings that get pulled on the dairy industry at any given time, but in an election year, The National Milk Producers Federation (NMPF) asked USDA for $100 million to $150 to offset milk surpluses from increased production and declining export sales. The response was unusually quick, but the string was shortened to a $20 million purchase of cheese that was donated to food shelves.  This string-pulling had the unforeseen effect of causing cheese prices to fall and had only a negligible effect on cheese inventories which continued to rise.

WHO PULLS YOUR MONEY STRINGS?

As a (Canadian) outsider looking in, it seems that Banks have a lot of say in how dairying Is carried out in the US.  They have a lot of pull in Canada too, where we market under Supply Management.   We sometimes have asked our American neighbors why they don’t moderate their herd numbers in response to the fluctuating price of milk.  They respond, “To keep our banker happy we must maintain our level of income. So the only way to do that in a time of low farm gate price is to milk more cows, ship more milk and personally work longer hours”

HIDDEN PUPPETEERS

Are any of these puppeteers in control of your dairy operation.  Whether it’s a nameable politician, political party, banker or government subsidy, we are all too willingly to put the power in their hands.  Which puppet master is pulling your strings?  How high are they making you jump?

YO-YO or NO GO?

Today’s dairy economy has been dangling on a string in a “sleeper recession for several years.  The world dairy economy spins at the bottom in many countries.  Everyone wonders how long the “spin” will continue before we witness total collapse of the market.  It’s hard to tell whether dairying is improving or not because the economic indicators keep yo-yoing between signs of improvement and indications of collapse

POOR LITTLE PUPPETS

Of course, once you acknowledge you’re being controlled by puppeteers, the inclination is to cry over the manipulation.  Perhaps before that dairy farmers need to admit their role.  Are we manipulated? Or responsible? Sometimes we are so sure that the market manipulation we support, whether it’s subsidies, supply management or government buy-outs, is right and we insist that our position is right long after failure is right in our face. “It’s not my fault!” is no more believable than “The dog at my homework!” The end result is still failure. Your failure to control your own purse strings!

WHO YA GONNA BLAME

When you like dancing to someone else’s tune then you will likely choose to keep things the way they have always been. Fluctuating markets have always been part of the industry.  “It’s not in my hands”.  Having said that, it’s 2016 and there are new technologies and approaches.  There are consultants who recognize that their only way to survive in the modern dairy industry is to make sure that your bottom line survives.  There are many who think assigning blame will keep their hands in your pocket.  Actually, you don’t need to know who is at “fault”. You want to know what your nutritionist, genetics company, feed supplier or veterinarian is going to do to help you make money on the correct side of the market. Yes, there are many who will try to talk you out of your different approach.  But who wants to be that 80-year-old dairy farmer who remained in the rut so long that he now looks back and blames someone else for not letting him dance to his own tune!  Today he would maintain, “I should have taken the risk!” Those who did appear to be thriving.

LET’S BE HONEST

You don’t have to be a market strategist or political economist to recognize some truths about dairy markets.  First of all.  Do you know of any market on the face of the earth that only moves up?  What is your experience?  What direction are markets moving?  Is your milk market growing? The answer is not, “Wait and see!”  It is,” We need to be promoting what is working and getting rid of what isn’t.” We have been through these ups and downs, so we should be planning for them before they come. Being reactive does more harm to dairy business and jobs than being proactive which allows us to take control. We can wait for the invisible hand (the ups and downs of the many players in the dairy industry) to work things out, or we can try out different strategies for getting optimal results based on current conditions

BETTER or WORSE?  SMARTER OR STRONGER?

Sometimes we hesitated to take more control because we feel we are not smart enough or strong enough to be in charge. We trade individual independence for group think.  We hand over our own strings to someone “Smarter” or “Stronger” rather than take control of our own risk management. We comfort ourselves by saying, “It could be worse” as we look at the dairy convulsion we’ve seen in the UK.  The downside is that we could be next.

The dairy marketplace has untold possible outcomes.  Its complexity comes from the tremendous variety of inputs that come from countless permutation of ways to do achieve milk production from dairy cows. Furthermore, it is complicated by the many numbers of individuals simultaneously trying to do the same thing and simultaneously affecting the outcomes for each other.  Dairy market rules are not written down anywhere.  They are not controlled by a single entity.  The industry is constantly evolving.  Individuals, businesses and governments are all players. At any given time, they may think they are in control.  But are they players or being played?

The Bullvine Bottom Line

Puppets and Yo-yos may be good analogies to use in describing aspects of the dairy industry marketplace.  However, at the end of the day, we are NOT about playing GAMES, but we are about DOING BUSINESS! … Who’s responsible? … Are you the puppet or the puppeteer?

Whether you’re a Bullvine reader in rural Ontario or a 5000 cow herd in California, you are affected by the image consumer’s have of milk as a food product. That means you’re subject to the same brand demands as Coca-Cola, Starbucks, and Dasani. Only those three companies may have bigger advertising budgets, and they intend to stay ahead of milk on the consumers first choice beverage radar. The names that have become iconic brands in the beverage industry didn’t get there overnight, and they are fighting an ongoing battle to maintain their position at the top of the heap. Do they ever screw up?  Yes!  Do they quit when they’re down?  Never!

“But” you say,” Everybody knows about milk!  There’s nothing new to brand!”  Well.  If that’s where your thoughts take you, then you have just guaranteed that you will be forever under the milk branding Blunder Dome.  (Read more: MILK MARKETING: HOW “GOT MILK?” BECAME “GOT LOST”) Milk is an excellent product.  Milk is a healthy product.  Unfortunately, neither of these attributes will guarantee that milk is the consumer’s first choice of beverage. Don’t try to hide your light under a dome – especially not under a blunder dome.

Salute the Power of Branding

You know that branding has worked when there is only one brand that you would consider using.  For me, all tissues are called “Kleenex.”  I only clean windows with “Windex”. For years, I made “Xerox” copies, regardless of what machine I was actually using to produce them.  Likewise, chap stick and aspirin have moved beyond product names to generic titles used for all similar products. Although I have no explanation for the ”X” factor in the first three examples, I readily admit that branding has influenced this consumer in a major way.

Now let’s look at milk branding, where we have a full range of examples to choose from.  On the one hand grocery aisle, consumers choose milk jugs (USA) or milk bags (Canada) with very little brand identification to choose between.  At the other extreme, our industry has enjoyed celebrity with branding campaigns such as “Got Milk?” and celebrity “Milk Moustaches”.

Wouldn’t it be wonderful if the dairy industry could milk this type of branding for all it’s worth?

Sorry, I find puns irresistible.  But seriously, I wish our dairy products were as in your face.  Before I further jeopardize my opportunity of writing for The Bullvine, let’s take a look at industry blunders, that could undermine dairy industry branding.

BLUNDER #1: Fear of What’s Next

It’s more than six years since Alltech sponsored “Bounce Back 2010” Symposium. This example was presented. “Think of it: There are two beverages. One is full of sugar; rots teeth can rust nails, causes obesity and has zero nutritional value. The other is full of calcium, full of protein, and is nature’s perfect food. The first one sells for $4.39 per gallon; nature’s perfect food for $2.69 per gallon.”

“Why is it we allowed this to happen?” Alltech President Pearse Lyons asked those at the Symposium. He went on, “The first beverage, Coca-Cola, even has the audacity to call itself the “real thing.” Coke has done a tremendous job of marketing itself to consumers and creating a brand image. Milk hasn’t.” Lyons concluded, “Guys, we have to brand our industry, we have to brand our ducts.”

BLUNDER #2 ACCEPTANCE of BORING

When it comes to a choice of being under attack or being boring, some will deem boring to be acceptable. Being boring has very negative branding consequences that eventually affect all aspects of branding. Can anyone explain the milk marketing love of plastic? If we are trying to sell milk as a first choice beverage, we’ve got to move beyond the big plastic jug and the plastic bag. I am lucky enough to prepare school lunches for my grand-children. It is always a plus when the packaging encourages the selection of milk products, and I don’t have to fall back on, “it’s good for you” or “because I said so”. It is even more exciting when the choice is confirmed and gets eaten.  Milk drinks, yogurt drinks, and cheese, are quite often the first choices.  Remember when ice-cream occupied that dairy space all by itself? Even my five-year-old grand-daughter knows about calcium for healthy bones and teeth.  “Grandparents should drink milk.” And “Oh look we have new yogurt bottles!” I applaud the imagination that ties children’s drinks to containers, colors, and promotions that they can relate to.  It’s great to see more choices that relate to other age groups, including teenagers and seniors!

BLUNDER #3 Terrible Tag-Lines

The right slogan can go a long way toward making a brand memorable. Unfortunately, an awful tagline is also unforgettable. The rule with taglines and slogans is always to Keep It Simple Stupid (KISS).  That’s why “Got Milk” was perfect.  Unfortunately, it is all too easy to turn good intentions into bad taglines.  These three that I have personally penned should have been locked up forever:

“Our good breeding shows.”

“You need an udder drink.”

AND

“We stand behind our cows!”

Yes, I suffer unresolved guilt over these, but I have enjoyed many hours googling “tag lines that failed” so I comfort myself in knowing that even big companies can fall on their branding faces.

One example, although not a beverage, does come from the food industry. In the early 1980s, Wendy’s Old-Fashioned Hamburgers was struggling to differentiate itself from its competitors. At the time, they had this quickly forgotten tagline: “You’re Wendy’s Kind of People.”  I am sure some of us can remember the year 1984 for the introduction of Wendy’s unforgettable octogenarian, Clara Peller, who vaulted Wendy to the top with the catchphrases, “Where’s the Beef?” Now that’s tagline branding the goes from terrible to terrific in three words.

So do your best and then relax.  If you’re trying to improve, you’re in good company.

Blunder #4 Flying Under the Radar

Thinking that it’s a good idea to keep under the radar is a horrific branding blunder.  Modern day families are under every kind of pressure as they fight, and often lose, in searching for work-life balance. The dairy industry can ensure that milk is present at the touch points of everyday life.  Milk at home.  Milk in food establishments, Milk in schools, churches, and community centers.  Failure to promote milk at the benchmark experiences of home and family life represent a failed opportunity for the positive branding of milk. Even if the national industry struggles to do this, we can do our part in our local communities. Milk sponsorships not only celebrates a food product but showcases it with the best parts of community life. Play them up.  Share some milk.  Take every opportunity to let people know why you are passionate about the dairy industry.

BLUNDER #5 Leaving Milk Alone!

One of the biggest mistakes we make is the one of trying to isolate ourselves from competition.  Seriously? Do you have one item menus? We aren’t in competition with the entire food industry.  We are in competition with other beverages. You know what I’m talking about.  We are missing an opportunity if we don’t find perfect partners for the perfect beverage we produce. Milk is a natural for partnerships.  Milk and cookies.  Cheese and Pizza.  Milk and Cake, Pies, etc., etc., etc.  Which partner to choose?  What do you drink milk with?  “If you can’t beat ‘em join ‘em.” is the way to pull the dairy industry out from under the blunder-dome.

Fortunately, in the U.S. DMI (Dairy Management Inc.) is more than six years into partnerships with Domino’s Pizza, McDonald’s and others. We need to move beyond milk as a commodity and promote its value-added role in the value of specific menu items.  Beyond the perfect partnership of taste, it’s time to publicize the move to more nutritional choices.  The big brands are doing it! Let’s bring milk to the table!

Turning BLUNDERS into BRANDING:

At the end of the day, you might tell me that someone else (bigger, bolder or higher up the food chain) is responsible for the branding of milk.  You could be right, but an industry rides on the shoulders of those who produce the product.  We can all do our bit to turn branding blunders into positive branding. Here are five ways to turn blunders around.

1. Brand Milk FEARLESSLY: Never fear mistakes. Milk branding is all about action.
2. MILK is EXCITING: Share the milk “WOW” factor whenever you can.
3. PUT a TAG on MILK: Find a way to put your passion for milk into words.
4. MILK the CROWDS: Put milk on the table wherever people gather.
5. FIND MILK PARTNERS: Find great partnerships so that when people think of certain foods, they automatically think of milk too!

The Bullvine Bottom Line

Branding milk is important. But as any good marketer knows, you have to connect with consumers and speak their language.  Let’s not seek so much industry protection that we close ourselves off from success.  It’s time to move beyond Blunder-Dome and continually re-commit to positive branding for the dairy industry.

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It is hard to look beyond the horizon when a grass fire is approaching your farm buildings. The pressure of the moment keeps us narrowly focused on what is current. That’s where dairy breeders are at today. The cows who are being milked today were conceived in a time of more positive margins in dairying than exists in 2016. However, if they plan to be in business in 2025, they have to widen their perspective. Today’s successes were built on decisions made years ago. Breeders must always be looking into the future when it comes to planning for the cows that they will need to be milking in their herds in three generations. The best advice is – “Don’t look back, you’re not going that way”. So let’s look to dairying in 2025. It is only nine years away.

Global Predictions

The November 2015 World Agricultural Supply and Demand Estimates report predicts ‘Global demand for food and agricultural products is expected to grow until 2025. Crop production will fall a bit, but the outlook for livestock production looks promising’. Farm gate milk prices are forecasted to increase especially from 2020 forward.

In 2015, the distribution of the global human population was 60% Asia, 15% Africa, 14% America (North & South) and 11% Europe. Add to that fact, 83% of the global population growth between now and 2025 will occur in developing countries of which Asia has a high proportion. In developing countries, the population is younger and in most cases there is an expanding middle class both of which will result in the higher consumption of dairy products.

Economic growth on a global basis is forecast to be 3.1% (developing countries 4.7% and developed countries 2.0%) until 2025 slightly below the long-term trend prior to the 2008 financial crisis. The range in economic growth will be Europe 1.8%, North America 2.5%, South America 2.6%, Middle East 4.0%, Asia & Oceania 4.3% (including China 5.3% and India 8.1%) and Africa 4.5%. However, percent growth must also consider the global GDP share by regions: Asia & Oceania 30%, Europe 29%, North America 25%, South America 8%, Middle East 4% and Africa 3%. Dairying should fare well from Asia’s growth potential and its relative global position in share of GDP.

All of this is positive news for dairying. However, that does also mean that there will need to be changes required at the farm level, as we’ll address later.

USDA Predictions

To better understand what is ahead for dairying details contained in the recently released USDA Long-Term Projections – February 2016 gives numbers that dairy farmers can understand and use as they plan for 2025.
Table 1: USDA Dairy Cattle Related Predictions*

* Data source – USDA Long-Term Projections – Februrary 2016

A few predictions are noteworthy:

• Cow numbers will remain constant
• Production per cow and total national production will increase 20% by 2025. That’s over +2% per year. To achieve the production figure cows, on average, will need to be milked 3x.
• Corn and soybean acres and prices per bushel will not change over the period
• Domestic disposal of milk will increase 18% 2016 to 2025, so the USA will need to export more milk products.
• Export of milk products have decreased in 2016 to 9 billion pounds, due to lower milk prices. However, exports but will return in 2020 to their 2014 level of 12 billion and increase to 14 billion pounds by 2025, when export will be 5.5% of production.
• Not shown in the table – bovine meat prices are expected in 2025 to be 80% of current prices, number of dairy farmers will decrease at an increasing rate, and average US herd size could average 425 cows by 2025.

Situation 2025

Even though milk producers in many countries are currently stressed because of a perfect storm, 2025 looks promising provided they take steps to adapt their operations. The 2015-2016 perfect storm of EU quota is disappearing, a Russian embargo, China and India production increasing and the USA and NZ producers are not adjusting for the production to demand imbalance, all of which are not likely to occur again any time soon.
Milk producers in planning for 2025 should consider the following:

• Technology
  • New technology will need to be put in place to achieve year upon year cow production increases of 2% in production. It goes without saying that technology requires more output per cow and cows per herd to be justifiable.
  • With low-cost labor disappearing in many countries, automated systems will need to be purchased.
  • On-farm management expertise will require both training and application of computerized systems. Decision-making ability and accuracy of decisions will need to be increased.
  • State-of-the-art social media will be significantly advanced from today and will become a “must use” by dairy people.
• Output Per Farm
  • Since 1925 (when milking machines came on the scene) cows per worker has doubled every twenty-five years to where in 2025 there will 80 milk cows plus their replacement per worker.
  • Milk shipped per worker in 2025 will need to be 170% of what it is today (2016). In respect to production efficiency, dairy farming is no different from any other industry. It must always move forward.
• Trade and Milk
  • Currently 9% of the global milk production crosses country borders. At one time, not too long ago, it was 4%. It will likely remain in the 9% range until 2025.
  • Trade Agreements are here to stay and will impact milk prices more in the future than they have in the past. Once signed all trade agreement clauses must be adhered to.
  • Expect that the agricultural policy of other countries will impact dairying in your country. It is difficult enough to compete today with producers in other countries but having to compete when a foreign government stimulates milk production, or limits imports can be impossible.
  • Currency exchange rates have a significant impact on the amount of trade and business success.
• Revenue Generation
  • Milk producers will need to plan more for their revenue in the future than they have in the past. That could include doing their on-farm processing and selling or by joining in selling coops with other producers to ensure their incomes. Few producers can survive when they are an island onto themselves.
  • Producers have learned in 2015 -2016 that farm gate milk price stability is job #1. Cost control, although significant, ranks second to revenue generation.
  • Revenue generation from the sale of cull animals or a secondary dairy beef enterprise is not predicted to increase 2016 to 2025.
• Consumer Demands
  • Verified high-quality safe milk will no longer be taken as a given by consumers. Eventually, producers everywhere will have to be able to verify the quality, safety and production techniques of their milk. Inferior milk will not be allowed to cross borders.
  • The corner has been turned, and low-fat milk will be discounted in price at the farm gate. Butter is back.
  • Milk that is 4.5%F and 3.1%P will give the fat needed without there being excess (unwanted) skim milk powder.

Other trends will continue. One sure thing is that the rate of change will be faster and faster with time.

What Has This Got to Do with Breeding?

The genetic merit or make-up of the 2025 cows will need to be enhanced from today. Here are a few areas:

• Ratio Fat %: Protein % will need to be expanded from 3.9%F: 3.1%P to 4.5%F to 3.1%P.
• Selection needs to be to maximize fat and protein yields from minimal milk volume
• The day of the disposable cow needs to be over (5 not 2.5 lactations per cow are needed)
• Higher pregnancy rates will be necessary (1.5 not 2.5 average services per-conception)
• DMI from 80% forage diets needs to increase
• Cows must be technology friendly and require minimal labor
• Selection needs to start for resistance to production-limiting and other diseases
• Selection for a host of new traits will be possible (Read more: Will Genetic Evaluations Go Private?)

The Bullvine recommends that breeders use commercially available mating programs where various breeding program scenarios can be run before semen is purchased. The scenarios studied should consider both programs that depend on revenue from both a) 90+% from milk sales and b) 65% milk and 25% breeding stock sales. Of course on all farm 10% of revenue comes from other sources including culled cows and calves for veal.

The Bullvine Bottom Line

Granted there will always be dairy farmers that have a niche situation, and therefore, they will not be impacted in the same way as the wider population. The norm in 2025 will not be the same in every country. But there is no going back. Change will occur at an ever increasing rate. An objective plan and sound daily enterprise management will be a necessity for all who plan to be dairy farmers beyond the horizon of 2025.

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Services in the dairy cattle improvement industry have been gradually expanding since WW II. Three main areas have fueled that growth: (1) program participation levels; (2) usage of top sires; and (3) the evolving uses made of data. Almost every dairy producing country in the world has developed an industry organization infrastructure involving breeds, milk recording, artificial insemination, and genetic evaluation centers.

Yet, today in 2016, breeders can be divided into two groups – those who think the industry organization infrastructure of the past will continue to evolve and those who feel that significant industry organization infrastructure changes are necessary. Which of those two groups are you supporting or leading?

Current Model Livestock Improvement Model

The dairy cattle improvement industry that we have today has been built on person-to-person service that involves mandatory third party verification. These services usually include fees that are 60% – 70% used for employee wages and travel. Official registration certificates, official independent animal evaluators, official third party DHI supervisors, breed, approved A.I. technicians, …. almost everything depends on service by human hands and authentication by human eyes.

Well, that must be overseen by authorities approach is wearing thin on breeders who are required to pay for those costs. It is especially irritating to milk production focused breeders. We hear more and more breeders questioning their associations, co-ops, and societies on the reasons for having services that they no longer need and are not willing to pay for or subsidize such as registration certificates, breed marketing, hard copy print and magazines, field and club officer staff, A.I. arm service and DHI supervisor visits. For many breeders these services already considered as practices from the past.

In the future, improvement services must be based on ease, accuracy, need for the information and contribution to decision-making. A business approach for all services must prevail.

Past Growth Industry Growth

In the twentieth century investment from outside agriculture often fueled dairy improvement industry growth.  Herds like Montvic, Curtis, Carnation, Romandale and Hanover Hill in North America purchased top animals for their herds, thereby giving the initial owners financial reward for their efforts. It goes beyond that. Thousands of animals were shipped from Europe and North America to new homes abroad. That continues today but to a much lesser extent as some regions in Asia are still building their dairy herds.

Revenue from animals and semen exported, in the past, built new at both the farm and the industry levels.

Times Have Changed

The farm business model where significant revenue must come from off-farm animal and genetic sales is under considerable pressure. Well, in fact, seed stock sales are already a thing of the past for the majority of breeders in most countries. Revenue from springing heifer sales now barely covers the cost of raising them (Read more: Who Killed The Market For Good Dairy Cattle? and Is There Still Going To Be A Market For Purebred Dairy Cattle In 10 Years?). Animal improvement service providers counting on breeders garnering added off-farm income because of their services are in for big time wake-up calls. Animal and herd improvement services must return increased on-farm profit if breeders are expected to continue usage of them.

Tomorrow’s Realities for Services

There will be fast-paced advancement in all aspects of dairying. Improvement services and industry organization infrastructure will need to adjust to:

• Big Data, where alliances between service providers exist for benefit of all
• More in-depth DNA analysis for many more traits
• Gene Editing where the best or new bovine genes will be prominent in breeds (Read more: Gene Editing – Is It The End of Dairy Breeding?)
• Data captured totally by computers, cameras, drones and other on-farm equipment
• Data source labeling for user awareness (eliminating the need for third-party verification)
• Expanded data for wellness, disease, immunity, environment, nutrition and reproduction
• 24-7 animal monitoring from birth to departure from the herd (24-7 means complete accuracy)
• Consumers requiring verified nutrient content along with healthy and safe milk products
• Additional service providers with new technologies
• …. and much more

Possibilities for Future Infrastructure

Each year the world is a smaller place, and the pace of change is speeding up for dairy cattle improvements as it is for all aspects of our lives.  Services must be based on needs, not tradition. Here are a few ideas, challenges and opportunities that organizations will have before them as it relates to animal improvement organization infrastructure.

• Global animal identification, parentage verification, and animal movement
• Global dairy cattle databases for improvement services including research and development
• International protocols for DNA analysis and indexing as well as for gene editing
• Alliances between cooperatives and private companies for content and uses of animal information
• Moving from total control by one organization to shared control and availability of services and data by multiple organizations
• Disconnecting from current partners that are not prepared to change their operations and/or services
• Organizations with proprietary services conducting traditional improvement services (i.e. genetic evaluations and linking genetic indexes to proprietary service data.)
• Application of new technologies to reduce organization overhead costs and program service fees
• ….. and many more

Leadership For Change

Breeders in cooperatives need to elect directors that have relevance, vision, leadership and communication skills. We’ve always done it that way or only following what was successful for a previous generation of breeders will not cut it anymore. Agents for change within and between organizations need to be supported by Boards, staff, and breeders.

What will it mean for YOU?

Depending on who you are (breeder, organization director, organization administrator, developer of new services, …., etc.) changes in industry organization infrastructure could range from very little effect to meaning a big deal for you. If you are a leader, you will be faced with or have the opportunity to lead fast-paced advancement on how organizations work with each other.

Will Our Current Dairy Improvement Infra-Structure Crumble?

No.     If long-term vision, cooperation and a what’s best for breeders’ approach are applied by organizations.

Yes.    If the procrastinators, control or don’t change breeders or organizations rule the day.

The Bullvine Bottom Line

For certainty, it is a matter of not if, but when changes in the dairy cattle improvement industry organization infrastructure occur. Attitude to advancement will shape the future for both breeders and their organizations. Breeders will need state-of-the-art animal and herd improvement services. The vision and actions of breeder and industry leaders are critical. Advancement will occur even if current organizations do not adopt and adapt the future technologies and systems.

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From farmgate to retail shelves there are numerous interconnected factors that are required to function properly together to produce the milk that eventually makes it into our homes.

Immigrant Labor could trigger a chain reaction

Like many other important steps in dairy production, labor is one piece that, if affected, has a corresponding impact on all the other pieces. There are concerns ranging from sourcing dairy labour from immigrants to documentation, to wages to political implications. A major concern relates to what would happen if immigrant labor was completely taken away. An updated survey called for by the National Milk Producers Federation and produced by Texas AgriLife Research at Texas A&M University,  predicts serious repercussions if there was to be a loss of immigrant labor on American dairy farms.

Report Findings (Year)

The report shows that of the 150,418 employees working on U.S. dairy farms in 2013, 51 percent of them, or 76,968, were immigrants.  The conclusion drawn by researchers is that losing these workers would double retail milk prices at a total cost to the U.S.  of more than $32 billion dollars. The report suggests that loss of immigrant labour would raise the price of a gallon of milk which sold for $3.37 in June to a whopping $6.40. On top of this — at the other end of the chain … it could also cause the loss of one-in-six dairy farms. (Read more: Losing Immigrant Workers on Dairy Farms Would Nearly Double Retail Milk Prices)

Rising Numbers of Immigrant Labor

Since an original survey of immigrant labor was done in 2009, there has been significant changes in the numbers of immigrants working on dairy farms.  The updated survey shows an increase of 20,000 immigrant workers (35%) in the intervening six years and 27% more of the milk supply coming from farms with immigrant labor.

Beyond the basic statistics, there is concern over documented and undocumented foreign-born workers.

Eighty percent of those who responded to the survey have concerns about immigration raids or unemployment audits due to their lack of confidence in immigrant worker’s employment documents.

Misconceptions about Immigrant Labor

Some believe that immigrants take jobs away from Americans.  According to NMPF’s board chairperson and Missouri dairy farmer Randy Mooney, this is simply not true.  He explains that the average hourly wages offered are  $11.54 and thus are well above the minimum wage of $7.25. Nevertheless even with the three plus dollar increased wage, dairy farmers have been unsuccessful in getting Americans to do these jobs.

The Domino Effect of Failure to Act On Immigration Reform

Not having a reliable, current labor force means an inability to ensure an effective future workforce. Likewise, researchers explain that milk sales also support many more jobs beyond the farm than on the farm. In Canada, the phrase “Milkle-Down Affect” (http://www.milkledowneffect.ca/ ) has been coined to raise discussion on how dairying affects not only the local community but has much wider impacts.  The immediate loss would be from the fact that there would be 76,968 fewer people working on dairy farms. A total loss of immigrant labor on dairy farms would also mean the loss of jobs outside the farm. What is often overlooked is the loss of jobs related to dairying. Those kinds of jobs add up to a loss totaling 131,240 jobs. Almost 200,000 jobs and the numbers keep mounting!

There would also be repercussions beyond the obviously reduced farm milk sales. Losses would be incurred because of the reduced purchasing power, not only of dairy farms but now from the unemployed workers. As well, the lost sales would extend beyond the farm to businesses that support dairy farms, such as feed and equipment dealer, veterinarians, and feed suppliers. . In the bigger dairy picture, there would be an estimated loss of 25% of the national dairy herd and national milk production.  More than 7,000 farms would close

Immigrant Labor is a Hot-Button Election Issue

Discerning observers of the dairy industry feel that Congress urgently needs to address this issue.  Comprehensive immigration reform is necessary for dairy operations to adequately meet their labor requirements. Jim Mulhern, who is the NMPF President and Chief Executive Officer, points out, “Farms that rely on hired foreign workers need their current labor force as well as an effective program to ensure an adequate future workforce.” He warns that the dangers don’t stop at a reduced workforce. “The lack of a reliable source of workers is causing farmers to second-guess decisions to expand,” he said. “That’s economic activity that’s lost to both rural and urban communities — all because Washington won’t act on immigration reform.”

A Catch 22 Situation

This is definitely a problem that needs to be faced with proper action.  It would be wrong, however, if the action taken had negative repercussions for every stakeholder involved.

1. Dairy farmers need a labor pool to draw upon.
2. Current immigrant workers rely on the income they are earning.
3. American workers need to be encouraged to work in agriculture.
4. Dairy consumers have the right to reasonably priced access to healthy milk products.
5. It seems that we are coming pretty close to throwing out the baby with the bathwater. The simple solution of throwing out immigrant labor could mean the end of one-in-six dairy farms.

Solving labor problems needs a multi-pronged approach if the solution is going to be effective.

The Bullvine Bottom Line

Sometimes we become complacent in North America because we don’t appear to have the challenges that our dairy peers in the UK and Europe have (see “Cheap Milk Flooding the Grocery Aisles”).  However, while the root causes of disruption may differ, the result could be the same – an irreparably damaged dairy industry.

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Who wins when a price war erupts between competing products?  In the case of water and milk in Europe and the UK, the 5% lower store prices for milk may be great for consumers but the 20% loss at the farm gate is terrible for farmers.

Too Much of a Good Thing

Currently, there is so much milk available in Europe that it is selling cheaper than water. Several conditions have caused this milk surplus led by anything that contributes to rising supply and falling demand.

Too Much Milk Production.

Removal of milk production quotas on EU farms marked the opening of the milk floodgates. For the first time in 30 years, farmers were able to produce as much as they wanted.  However, it contributed to oversupply.  Quotas were originally instituted to prevent overproduction of milk and butter that had happened in the eighties. Quotas set limits on production and established penalties for overproduction.  When they were lifted, it was hoped that it would allow European dairy farmers to compete for business in emerging markets, such as in Asia

Not Enough Demand.

Falling milk demand from China, the Middle East and North Africa was not anticipated and adds even further to the over-supply.

Not Enough Exports.

Forget “From Russia with Love”.  In 2014, the Russian food embargo cut butter 24% and cheese import 32% into that country. This continues to have a tremendous impact.

Too Much Price Competition in Supermarkets.

All of the above are further aggravated in the UK by supermarket price wars.

The Worst that Can Happen?  Now Milk is Cheaper than Water!

In England, a bottle of water costs roughly $1.50.  In France, mineral water costs $1.  That’s not new you say.  What is new is that, with the 20% fall in wholesale milk prices, a liter or milk might be selling for just $1.

Milk Slump Escalates Protests from Push to Shove

With the oversupply of milk depressing the sale price to milk producers, farmers are increasingly agitated with the losses they are shouldering. Milk is selling for less than what it costs to produce it In the UK protests have taken place ranging from clearing grocery shelves to throwing fruit and, in one instance, parading cows through a supermarket.  In Brussels farmers, there took matters into their frustrated hands by throwing eggs, hay and fireworks at riot police.

Calls for Relief

Along with the emotional reaction, there have been more reasoned appeals for relief. The British National Union is calling for supermarkets to increase prices to match production costs. With hopes of getting prices returned to an economically viable level, the European Milk Board is calling for the return of production quotas. President of the Milk Board, Romuald Schnaber, sums it up succinctly, “Unless production is reduced, the market will continue deteriorating at a pace.

Where are Governments in These Bad News and The Good News Scenarios?

Proactive support for the dairy industry has been called for and pledges proposed and started.  The EU is offering $555 million, and France put 600 million euros in place in July. If there is a silver lining in this dark scenario, it’s that new and old milk lovers are enjoying the cheap milk prices. Hopefully, increased consumption will continue and help to grow the market and produce more stable future prices at the dairy farm gate.

Who is telling the Whole Milk Truth?

Back in January 2015 Rob Lyons (Spiked) argued that “Milk is not cheaper than water.” The premise he supports this counter headline position with is that “From booze to petrol, water is the scaremongers’ comparison of choice.” Lyons appears to question that no milk could be cheaper than the water that is free when falling from the skies or coming out of taps.  He asks, somewhat naively, after pointing out that milk is indeed cheaper on shelves than the nearby bottled water on the same shelves “And is this having a knock-on effect on the price received by producers?” You think?

Desperate Dairies

Some dairy spokespersons claim that the slashed prices have left UK dairy farmers facing poverty and financial ruin.  None can continue selling for 10 pence less per litre of milk than it costs to produce it.  If you work it out on the basis of an average of 2,500 litres produced daily, it is easy to see how desperate the situation has become. According to the National Farmers Union, approximately 200 dairy producers have left the industry since January.

What is the Answer?

In truth, there are no easy answers that can satisfy everyone affected by the cheap prices being paid for milk.  Who has the most to win?  The producer?  The distributor?  The consumer?  As long as they all compete with each other and fail to find a workable compromise, there is a very real danger that the question of winning will become irrelevant.

The Bullvine Bottom Line

It’s not about short-term wins. From farm gate to grocery aisle, for any of the stakeholders to benefit, there has to be a viable and sustainable dairy industry.   

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