Buckeye Dairy News: Volume 11 Issue 3
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MarketView...U.S. Dairy Outlook Brief 2010
Dr. Cameron Thraen, Milk Marketing Specialist, The Ohio State University (top of page) pdf file
Chart 1 depicts the long term relationship between the Class 3 milk price (line, left axis) and the rate of change in U.S. milk production (bars, right axis). The inverse relationship between price and rate of increase in milk production is evident. The dashed horizontal line at 2% shows the annual rate of growth in demand for milk and milk products in the United States. Production expansion higher than this pushes down the milk price, while production expansion at a rate lower than 2% drives up the price of milk. The rapid rise in the milk price beginning in 2007 was caused by slow growth in U.S. milk production and, what is not shown on Chart 1, slow growth in milk production outside the United States. This in turn resulted in additional export demand for milk proteins from the U.S. and the historically high U.S. milk price. The 2008 collapse in U.S. and world demand, coupled with continued U.S. milk production expansion above the 2% line, resulted in the collapse of the farm milk price.
Chart 1
The rate of growth in U.S. milk production has been slowing for the past 12 months, finally nearing zero in June 2009. Over the first six months of 2009, this reduction in the rate of growth has not been severe enough to halt the decline in the U.S. milk price. While milk cows have been culled aggressively, milk yield per cow has not moderated. Overall production has slowed, but not enough.
Chart 2 shows the long term history of milk yield per cow (right axis) and the number of milk cows for the United States (left axis). The upward trend in milk productivity is evident. Average annual milk per cow grows at a rate of 1.7% per year. Milk cow on farms shows a much more varied history. Beginning in January 2004, the U.S. dairy herd started on an aggressive expansion path. This expansion ran out of steam mid-year 2008 and began a significant downward adjustment January 2009.
Chart 2.
For milk prices and dairy farm profits to return to a more sustainable level, a painful process needs to take place. The number of dairy cows in the United States must be reduced by a significant amount. The current level, 9,190,000 head is much too high. With the unabated increase in milk output per cow, the adjustment must come from increased dairy cow slaughter. The recent round of the Cooperatives Working Together dairy cow removal program will remove an additional 86,700 head when completed; however, this is not nearly enough. The U.S. dairy cow numbers must decline by at least another 200,000 head. U.S. milk cow numbers must get back to the level of January 2004. This means that a significant number of dairy farms operations will have to exit the industry over the coming months. Today, dairy producers expect the U.S. milk price to return to the $17 to $19 dollar range and this is only possible with a U.S. dairy herd below 9 million head.
As the financial pain is spread across the thousands of medium to small dairy operations in the U.S., the political pressure to rescue these operations is mounting. The U.S. Secretary of Agriculture has increased the support prices offered on Cheese and Nonfat dry milk. The U.S. Senate has passed legislation supporting even higher effective support prices. There is pressure to increase payments under the Milk Income Loss Payment program. All of these measures will only serve to extend the pain. The only way to sustained higher prices for U.S. dairy farms is to reduce the number of milk cows and production. The process has started and now it needs to run its course over the coming months. -
Dairy Critical Issue Briefs (DIBS): 24 now available online address issues facing dairy producers dealing with today’s continuing pitiful milk prices
Ms. Dianne Shoemaker, Extension Dairy Specialist, Ohio State University Extension (top of page) pdf file
Dairy Issue Briefs (DIBS) target critical management issues facing Ohio’s economically bruised dairy farms. Cost-cutting decisions must be made with full awareness of both short and long-term production and economic consequences. OSU Extension’s Dairy Working Group, a collaboration of OSU Extension and OARDC faculty is identifying and addressing critical issues in five areas:
• Nutrition and feed costs,
• Reproduction and health,
• Calf and heifer management,
• Business issues, and
• People and stress management.The emphasis is on “brief”, with a short explanation of the issue, the conclusion and contact information for the author(s) if you have further questions. DIBS can be found at the OSU Resources for Ohio’s Dairy Industry website: https://dairy.osu.edu.
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Corn Silage Harvest
Dr. Bill Weiss, Dairy Nutrition Specialist, The Ohio State University (top of page) pdf file
Because of high feed costs and low milk prices, maximizing the nutritional quality of your corn silage and minimizing shrink are more important than ever. At this time in the growing cycle, the most important manageable factor that will influence the nutritional value of this year’s corn silage is maturity at chopping. Harvesting corn silage too early (i.e., silage with less than about 30% dry matter) usually results in a lower starch concentration in the silage, which means more corn grain may need to be supplemented. Corn silage is usually among the least expensive ingredients in a diet and high inclusion rates will reduce feed costs. However, because wet silage can reduce feed intake by dairy cows, dietary inclusions rates for wet silage are usually less than for normal silage which can increase overall feed costs.
Over mature corn silage (silage with more than about 38% dry matter) also has less nutritional value than normal corn silage because of lower fiber and starch digestibility. Kernel processing partially reduces some of the negative effects of maturity on starch digestibility and is strongly recommended for mature corn silage, but it will not make mature corn silage equal to corn silage harvested at the optimal dry matter concentration (30 to 38% dry matter).
A portion of the crop that is harvested will be lost during fermentation and storage. That loss is considered shrink. Factors that affect shrink include:
- Type of silo structure: (bags and sealed silos usually lowest, conventional upright silos intermediate and bunkers usually have greatest shrink).
- Moisture concentration at filling. Wet silage can have high shrink because of excessive fermentation and seepage. Dry silage can have high shrink because of spoilage (for example, mold) during storage and feed out.
- Chop length. Chopping too coarsely increases the amount of air trapped in the silage mass and reduces compaction. Chop just coarse enough to provide enough ‘chewable matter’ for the cows. Approximately 5% of the material on the top screen of the Penn State shaker box is usually adequate.
- Rate of filling. Slow filling reduces the rate of fermentation so that pH stays high for a longer period of time which increases shrink. The faster you fill and pack (filling faster than you can pack will increase shrink), the less shrink.
- Air trapped in the silage mass and air infiltration into the mass promotes yeast and mold growth causing shrink. Pack, pack, pack, and when you think you have packed enough, pack some more.
- Not covering the silage in a bunker silo greatly increases shrink. Several studies have shown that covering a bunker with plastic returns around $8 in savings for every $1 invested in plastic and labor needed to cover the silo. For maximum benefit, cover quickly after the silo is filled.
- Silage inoculants can increase, decrease, or not affect shrink (how is that for a useful statement). The standard silage inoculant (lactic acid bacteria) usually reduces fermentation losses slightly (i.e., reduces shrink) but often slightly increase spoilage losses during feeding. If spoiling during feed-out has been a problem on a specific farm, then use of lactic acid bacteria may increase overall shrink and would not be recommended. If spoilage has not been a problem on a specific farm, then use of lactic acid bacteria should be considered because of the reduction in fermentation losses. If spoilage has been a problem, propionic acid bacteria (Lactobacillus buchneri) is recommended. This inoculant often increases fermentation losses but usually reduces spoilage losses more.
Summary
- Maximize nutritional value of corn silage by chopping when corn is between 30 and 38% dry matter.
- Minimize shrink by chopping fine enough (but not too fine), filling rapidly, packing well and sealing the silo with plastic. Lactic acid bacterial inoculants will reduce shrink a bit if spoilage during feedout is not a problem. Lactobacillus buchneri inoculant will reduce spoilage during storage and feedout but will increase fermentation losses slightly.