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Chris Zoller, Extension Educator, Agriculture and Natural Resources, Tuscarawas County, Ohio State University Extension

The United States Department of Agriculture Economic Research Service (USDA ERS) publishes a monthly Livestock, Dairy, and Poultry Outlook.  The March report is available here: https://www.ers.usda.gov/webdocs/outlooks/106119/ldp-m-345.pdf?v=4174.3.  This article will highlight portions of the dairy report.

Supply and Use

The most recent USDA National Agricultural Statistics Service (NASS) estimate of U.S. milk production for 2022 was revised up 0.1 percent compared to 2021.  For 2022, the number of milk cows was reduced by 2,000 head.  The average number of cows and milk production per cow in January 2023 were higher than the same month a year prior. 

Data from the NASS Agricultural Prices Report and the USDA Agricultural Marketing Service compare various costs for January 2022 and January 2023.  These items are summarized in the table below.

Based on the USDA, Dairy Margin Program, in January 2023, the spread between milk prices and feed costs ($7.94/cwt), narrowed compared to January 2022 ($11.54/cwt).

Dairy culling rates in the first few weeks of 2023 were at a brisk pace, as represented in the table below.

Restaurant Performance Index

According to data from the Restaurant Performance Index (RPI) from the National Restaurant Association, product sales were strong in January 2023.  The index rose 0.9 percent from December 2022 to January 2023, the strongest monthly increase in 15 months.  The National Restaurant Association is optimistic about sales growth, as 58 percent of operators expect sales growth to increase in the next six months.

Forecast for 2023

For 2023, USDA ERS is projecting an increase of 0.20 billion pounds of milk higher than last month, and 10,000 more milk cows than projected in the prior month’s report.  However, cow numbers are expected to decline throughout the year because of lower numbers of replacements and higher cull cow prices.

Glen Arnold, Extension Field Specialist, Manure Nutrient Management, Ohio State University Extension

Coming out of a warm, wet winter most dairy producers have plenty of manure on hand going into spring. Rather than applying manure to fields prior to spring planting, and potentially facing planting delays, a growing trend in the Midwest is surface applying manure using a drag hose overtop newly planted corn or soybeans.

An application of 10,000 to 12,000 gallons per acre of dairy manure to newly planted crops will not hinder germination and can actually provide moisture to encourage emergence of the crop. The only precaution is that the field needs to be firm enough to support the drag hose to avoid scouring piles of dirt and burying the seeds too deep. Spring worked fields that have not been firmed up through rainfall are not good candidates for a drag hose.

For soybeans, the manure application needs to be within a few days of planting and definitely before the soybeans begin to emerge. Once emerged, soybeans can be killed by the application of manure until they reach the V3 stage of growth and can handle the damage from both the manure and the drag hose.

For corn, it is becoming common to make two dairy manure applications spaced a few weeks apart. The first is immediately after the crop is planted and the second application is anytime up to the V4 stage of growth (four leaves with collars).  The smaller the corn, the less damage will be obvious from the tractor tires as the drag hose is pulled across the field.

A five-year drag hose treatment was conducted at the OARDC Northwest Station concluding in 2018 to determine what stand damage and potential yield loss may occur from the V1 to the V5 stages of corn (Table 1). A six-inch diameter drag hose, filled with water, was pulled across each plot twice (going in opposite directions) at corn growth stages V1 through V5.

Table 1. 2014-2018 OARDC drag hose damage corn plot results.

The results of this five-year research study suggest corn could be side-dressed or top-dressed with liquid livestock manure using a drag hose through the growth stage V4 without a yield loss. More than 60% of the corn plants snapped off at the V5 stage. While the snapped off plants regrew, they did not produce reasonable ears of grain.

Leaving manure on the soil surface will not capture as much of the manure nitrogen as incorporating the manure. Be sure to have a manure sample collected during the application process and use the analysis to understand what nutrients were applied.

Dairy manure can also be applied to wheat.  A lone application of 10,000 to 12,000 gallons per acre will not provide enough nitrogen to maximize a grain yield, but the moisture and nutrients will spur crop growth, and this can make for a better wheatlage harvest. Using drop nozzles, some dairy farms make a 2^nd application to the wheat field a few weeks after the 1^st application. The drop nozzles place the manure at the soil surface and keep it off the leaves of the wheat plants.

Allen Gahler, Extension Educator for Agriculture and Natural Resources, Sandusky County and Jason Hartschuh, Dairy Management and Precision Livestock Field Specialist, Ohio State University Extension

While things are muddy with hints of green in northern Ohio, we are hearing from colleagues in central and southern Ohio that spring is definitely here and bringing things to life, including pasture grasses and hayfields. After green-up happens in your part of the world, it’s the ideal time to be scouting hayfields and pastures for winter damage, legume crown health, heaving of the root systems, and pesky winter annual weeds. Over the next few weeks, it may be necessary to rescout fields as they receive additional frost freeze events and ponding rain fall. 

Depending on where you are located and what type of forage fields you have, winter damage may be one of the most significant reasons to be scouting for now. In northern Ohio, where we do not have a lot of grass hayfields or pastures, but alfalfa fields are plentiful. This is yet another year for major concern. There was never a period of more than 5 to 6 days where the ground was frozen in most of the state, and the same can be said for snow cover. Both of these things can be good for an alfalfa field if they last. But when they do not and leave behind standing water, or provide for constant freeze-thaw cycles throughout the winter, alfalfa and other legumes can suffer and even die. Recent walks in some alfalfa fields in north-central Ohio have revealed just what we are concerned about...heaving of the crown and root system, which can lead to disease, less stems and lower yield, and eventual crown die-off.  In some cases, as we saw in the spring of 2020, and again last year, when warmer temperatures occur sporadically in February and March, followed by short freezes, the roots will heave enough to expose the taproot and many plants will not even survive into April and May. Remember, alfalfa suffers from cumulative stress loads – once it is stressed in some way, its yield potential and life expectancy goes down permanently, and those stresses add up over the life of the stand. So be sure to get down to ground level when scouting and observe those alfalfa crowns to see if field renovation with grasses may be necessary, or if there may even be enough die-off to warrant crop rotation and an alternative forage plan for 2023. 

            If you do observe significant heaving, but crown health seems to be intact, or at least the plant will attempt to produce enough stems to offer a profitable tonnage, adjustments on the hay mower may be in order before first cutting. Cutting too low on heaved crowns can not only damage the crown and slow regrowth but can also damage the root system, often causing immediate death and no second cutting. Growers should certainly be looking at how many healthy crowns and/or stems per square foot are visible in alfalfa fields to make a decision on whether or not to keep that stand. Most forage specialists and researchers commonly use 55 and 40 as key numbers when assessing stem counts. This means a good stand of alfalfa has 55 or more healthy stems per square foot, and yield potential is still at or near 100%. When a field falls between 40 and 55 stems per square foot, yield is still acceptable and considered economically viable, but counts below 40 indicate that the stand should be rotated to another crop and a new field prepared. At 40 stems per square foot you can expect about an 80% yield, and when counts fall to 30 stems, yield declines to 60% of the maximum dry matter yield. Additional factors such as taproot health, asymmetrical growth out of a crown, or discolored crowns should also be considered along with stem count when assessing a field. When doing your stem count, don’t count the stems on crowns that are unlikely to survive first cutting, such as stems that have heaved more than 2 inches out of the ground. When reviewing crown health, the charts below can help you rate crowns (Undersander et al., 2011). A healthy stand will have less than 30% of crowns rating 3 or 4 and no crowns in the count rating 5, which are dead plants.

After you have completed your stand assessment and if renovations are needed to meet your forage needs, begin lining up seed now. Marginal stands can be improved with grasses and clovers for a couple more years of forage production. If stands are poor, there are many options for summer annual forages to meet your forage needs. Some of them are easier to make as dry hay, such as Teff grass, Italian ryegrass, or Berseem clover. Summer annual cereal grain forage such as oats, spring triticale, or spring barley are other forage options that could possibly be made as dry hay but may be easier to harvest as silage or baleage. Spring seeding new alfalfa fields is an additional option if planted with a companion crop, which can result in forage this year and a full stand ready for maximum yield next year. Higher-yielding options such as sorghum, sudangrass, sorghum-sudan, or corn silage can also be planted with higher yields achieved with May plantings than June plantings with all of these crops. 

References:

Undersander, D., C. Grau, D. Cosgrove, J. Doll, and N. Martin. 2011. Alfalfa Stand Assessment: Is this stand good enough to keep? University of Wisconsin-Madison, Accessed March 30, 2023, https://fyi.extension.wisc.edu/forage/alfalfa-stand-assessment-is-this-stand-good-enough-to-keep/

Dr. Maurice L. Eastridge, Professor and Extension Dairy Specialist, Department of Animal Sciences, The Ohio State University

The parents of CFAES undergraduate Austin Ayars have launched a memorial scholarship fund in honor of their late son, Dr. Austin Ayars.    Dr. Austin Ayars

Features of his life and information regarding the memorial fund are available at:

https://cfaes.osu.edu/stories/parents-cfaes-undergrad-austin-ayars-launch-memorial-scholarship-funds?utm_source=sfmc&utm_medium=email&utm_campaign=faes_alumni-newsletter_fy22_cfaes-connect-mar&sfmc_id=59397428&sfmc_key=00517453

Also, a video sharing reflections of Dr. Ayars life are available at: https://buckeyefunder.osu.edu/project/34136, along with information on how to contribute to the fund to honor his life and support the education of students, aimed especially for those with interest in dairy cattle.

Chris Zoller, Extension Educator, Agriculture and Natural Resources, Tuscarawas County, Ohio State University Extension

The United States Department of Agriculture Economic Research Service (USDA ERS) released its Livestock, Dairy, and Poultry Outlook on January 19, 2023.  The full report is available here: https://downloads.usda.library.cornell.edu/usda-esmis/files/g445cd121/gx41nx08z/hh63v522z/LDP-M-343.pdf. This article summarizes portions of the dairy report.

Dairy Supply and Use

The November estimate by the National Agricultural Statistics Service (NASS) of milk production was 18.2 billion pounds. This represents a 1.3% increase from November 2021. Cow numbers were also reportedly higher – 1,000 more than the previous month and 38,000 greater than the year prior. Milk production per cow for November was 1,937 lb, an increase of 17 lb compared to November 2021.

Numbers from the NASS Agricultural Prices report, with comparisons to 2021, are summarized in the table below.

2023 Forecast

USDA is projecting a decline of 15,000 head of dairy cattle in 2023. This is the result of expected lower milk prices and steady to increasing feed costs. The January 31 Cattle on Feed Report from USDA will provide a better indication of future dairy numbers. Average milk production remained unchanged and is projected at 24,370 lb/cow.

USDA Projected 2023 Dairy Prices ($/cwt)

Moving Forward

Early indications are that 2023 will be a challenging year for dairy farms. While there has been a drop in fertilizer prices, many inputs look to remain steady or increase in price. This scenario will require budgeting, monitoring, and evaluation on a regular basis. 

I encourage you to have open conversations with your lender, input suppliers, and Extension professional as you work through the year. There are many resources and people available to help you be successful.

Jason Hartschuh, Field Specialist, Dairy Management and Precision Livestock, Ohio State University Extension

Remodeling existing facilities to improve cow comfort can improve the longevity and production of your herd. When remodeling with a few improvements, you may consider free stall size, bedding material, water availability, lighting, floor grooving, and fan placement.

If an expansion is in your future, many of the same decisions will apply along with alley widths, the distance between cross-overs, and the alley cleaning system. All of these building projects will be affected by the availability and price of construction materials.

Inflation and rising interest rates are beginning to influence the construction industry, with fewer new construction projects being planned. In October 2022, the architecture billing rates index dropped below 50 which is considered the required amount for construction to remain fully booked (an index above 50 represents an increase in billed architectural plans and below 50 a decrease compared to the prior month). Construction will remain busy through 2023 with a 9 to 12-month lag between a decrease in architecture billing hours and construction projects. Since the architects complete most of their work prior to construction beginning there is a lag. Over the past year, construction has seen a 3.3% increase in total needed employees, but like other industries, it is struggling to attract enough employees which is causing delays in construction project completion.

Concrete costs have risen 11.6% over the last year and are expected to stay at these levels through most of 2023, with tight supplies of both cement and sand (Figure 1). Lumber prices are remaining strong as of September with soft lumber being up 14.5% and plywood up 19.6%. A few materials have come down, including steel which is 23.8% lower than last quarter but still 200% higher than 2018 prices. Since September, lumber has declined 9% from quarter 3 to quarter 4 of 2022 and is still about 110% higher than in 2018. Construction companies are expected to remain at full capacity through most of 2023 and building costs to not decrease until late into 2023. The location has a great effect on the construction market outlook.

Figure 1. Construction Connection, Bureau of Labor Statistics https://www.ecmag.com/magazine/articles/article-detail/falling-into-place-2023-construction-outlook

When installing new free stalls, they should be sized to match the largest 25% of the cows in the group. Compromises do occasionally have to be made if your groups have a high percentage of first lactation cows in the group, especially if there is intolerance for manure on the back of stalls. Mature Holstein cows need 3 to 4 feet of open space in front of the stall for cows to lunge or they will lay at diagonally in your stalls, leaving manure in the corners instead of the alley. Stalls that are against a wall should be 10 feet from the back of the stall to the wall while head-to-head stall platforms should be a total of 18 feet. Even in head-to-head stalls when they are too close together, cows lunge to the side, especially cows who are socially intimidated by a dominant cow. 

1000-pound cows should have stalls that are 42 inches on center with 64 inches from the curb to the brisket locator and 58 inches from the curb to the neck rail. A 1600-pound Holstein cow needs a stall that is 50 inches on center with 70 inches from the curb to the brisket locator and 64 inches from the curb to the neck rail. Other cow sizes can be found in Figure 2.

Figure 2. Freestall sizes based on animal weight. Dairy Freestall Housing and Equipment, Midwest Plan Service, Iowa State University, Ames.

Water availability is another critical component. Cows consume 30 to 60% of their water needs shortly after milking so waters need to be located close to the parlor or robot exits and throughout the barn. The stand-by has been 2 inches of assessable water trough perimeter per cow, but recent research has shown this needs to be 3 to 5 inches per cow, especially in the summer during heat stress periods. Each group of cows should have at least two waters so that more timid cows can access water when a dominant cow is controlling them. Barn crossovers and alleys with water or feed should be 14 feet wide so that eating and drinking cows are not disrupted by cows walking by.

Figure 3. Distance for fan air plume to reach cows and dissipate. Comparing the fans, the first black fan has a 20-foot gap before it reaches cow height. With a 24-foot spacing, the black, red, and blue fans can be shown to provide the overlap necessary to eliminate dead zones between fans. (The Dairyland Institute, https://thedairylandinitiative.vetmed.wisc.edu/home/housing-module/adult-cow-housing/ventilation-and-heat-abatement/)

Assessing barn ventilation also is critical during the building process. Stalls should have an air speed of 200 to 400 ft/minute at the cow lying height, about 2.5 ft off the stall surface. Air speeds over 400 ft/minute provide little additional heat abatement benefits. A 48-inch fan previously was used to cover 40 ft, but newer research shows that when these fans are pointed correctly for cooling while cows are lying down, they need to be closer at 24 ft apart or 5 times the blade diameter. It takes about 20 ft for air to reach the cow’s back from the fan, so fans that are 40 ft apart are really covering 60 ft with a 20-ft dead zone (Figure 3). Best wishes with your upcoming construction projects, whether it is a renovation or new construction.     

Dr. Shaun Wellert, Senior Lecturer, Agricultural Technical Institute, The Ohio State University

The 23^rd annual Northeast Ohio Regional Dairy Conference will be held Wednesday, February 15, 2023, at Fisher Auditorium on the Wooster campus of Ohio State University.  This program is hosted by the Killbuck Valley Veterinary Medical Association. The keynote speaker will be Dr. Joao Costa from the University of Kentucky, an expert in animal behavior and precision dairy technologies, and he will be discussing activity monitoring systems for adult cows, automated calf systems, and the how to use the information that these systems provide to improve farm management.  A discussion panel of local dairy farmers who use activity monitoring systems in the management of their farms will be held to allow anyone interested to ask questions and gain more insight about these game changing technologies. Along with the educational portion of the Conference, a trade show of over 50 vendors will be present to update attendees about their products and services.  Thanks to generous sponsorship, the registration is free and breakfast and lunch will be provided. This is a great opportunity for learning and fellowship with fellow dairy farmers and industry professionals. Anyone interested is encouraged to attend, just please register before February 5^th to allow an accurate count for meals. For more information and to register, go to NEOdairy.com. 

Appendix

For those of you who use the 5-nutrient group values (i.e., replace metabolizable protein by rumen degradable protein and digestible rumen undegradable protein), see Table 4.

Table 4. Prices of dairy nutrients using the 5-nutrient solution for Ohio dairy farms, November 25, 2022.

Jason Hartschuh, Field Specialist, Dairy Management and Precision Livestock, Ohio State University Extension

The Dairy Margin Coverage (DMC) program through the Farm Service Agency sign-up deadline is quickly approaching on December 9^th, 2023. DMC has payouts when the margin between the all-milk price and the DMC feed cost falls below the selected protection level of $4.00-9.50/cwt. Now is the time to consider if this program will improve your risk management in 2023. For the current year, 2022, 73.17% of Ohio dairy farms signed up for some level of coverage. While the first half of 2022 had strong margins well above $9.50/cwt, margins fell below the $9.50/cwt level in August to $8.08/cwt and in September was $8.62/cwt. The margins for the rest of 2022 have improved compared to earlier this month, but lower margins are predicted to continue into 2023.

With margin payouts currently forecasted for most of 2023, reviewing the DMC program could be beneficial for your operations bottom line. Table 1 shows the current forecasted all milk price, feed price, and the forecasted DMC margin for each month of 2023 from the DMC decision tool. The forecasted all milk price has a high of $23.53/cwt in November and bottoms out at $22.37/cwt in July, with a yearly average of $22.86/cwt. At the same time, forecasted average yearly feed cost is $13.59/cwt, reaching its highest in January at $14.53/cwt, and its lowest really depends on next year’s crop but is currently seen in December at $12.92/cwt. After reviewing these milk and feed cost forecasts, the margin forecast ranges from $8.65-10.48/cwt. After reviewing Table 1, you can start to make informed decisions about what level of margin coverage to utilize.

The DMC is a two-tiered program with you needing to make decisions on your production history below 5 million pounds, separate from your production above 5 million pounds. The premium cost for the first 5 million pounds is much more reasonable, with the $9.50/cwt coverage level costing $0.15 per cwt. With the current forecast on 5 million pounds of coverage, the producer premium is about $7,481, but the net total payout is about $22,200. The premium cost is covered by the payout during the first three months.

For production over 5 million pounds, the maximum coverage is $8.00/cwt, but the premium is $1.813/cwt. This coverage needs thought about carefully. There are no months below the $8.00 margin level at this time. This means you may only want to use the $4.00 margin coverage that does not have a premium or maybe the $5.00 margin which has a premium of $0.005/cwt in case the margin gets even worse for production history over 5 million pounds. Remember this is only a forecast, so hopefully milk price improves and so does income over feed cost margins so that the program doesn’t have payouts for all of 2023.

The DMC program does allow producers to participate in the other subsidized risk management programs that are administered through USDA-Risk Management Agency. Those programs include the Dairy Revenue Protection program, which allows producers to use a Class III, Class IV, or component blend futures-based program to set a floor under their milk price by quarter. Another program more like DMC is the Livestock Gross Margin-Dairy that allows producers to use Class III milk, corn, and soybean meal futures to lock in a margin above feed cost. These programs are available to all producers, regardless of pounds of milk shipped per month but could be a much better option for milk production over 5 million pounds.

Table 1. Forecasted all milk price, feed price, and DMC margin for each month of 2023.¹