You are here
Buckeye Dairy News : Volume 12 Issue 4
MarketView...U.S. Dairy Outlook Brief October-December 2010
Dr. Cameron Thraen, Extension Specialist, The Ohio State University
In this installment of The MarketView, I will take a look at the variability for both dairy commodity prices (butter, cheese, nonfat dry milk, and whey) and the Federal Order 33 Blend Price. This MarketView is a departure from the more traditional dairy cows and market prices review of past articles and tackles the question of variability and sources of variability in your milk price.
On Variability vs. Volatility
We hear a great deal today about the excess ‘volatility’ in milk prices. As an illustration, consider the following quote from Charles Nicholson, agribusiness professor at California Polytechnic State University at San Luis Obispo, addressing the USDA Dairy Industry Advisory Committee meeting this past September. Dr. Nicholson states “There is an issue. There is a problem. There has been an extreme level of volatility and the length and depth of the increases and decreases will grow greater and deeper” (italics added for emphasis).
Now, what is misleading about this statement is the fact that professor Nicholson is making the mistake of confusing volatility with variability. The fact that the dairy industry has experienced an increased level of price variability over the last 11 years is obvious. Increased volatility is not as obvious. Market price lows are at the safety net level; however, the high price levels are historic. However, it is not clear that this translates into an increased level of volatility in milk prices. Volatility has a very precise definition, and simply observing prices that vary, even vary a lot, over time, is not evidence that they are volatile. I will not go into the definition of volatility in this article, but we will save that discussion for the next article. Just keep in mind that the two concepts are not interchangeable.
Identifying the Variability in the Milk Price
Before getting directly at exploring the variability in the Federal Order Blend Price and the sources of that variability, it is necessary to explain the origin of the price series used to support this article. The price series are butter, cheese, nonfat dry milk, and whey. These prices are those reported for each week of a given year by the National Agricultural Statistical Service (NASS) and used to calculate federal order milk prices. The Federal Order 33 blend price is constructed by me for each week by applying the federal order pricing rules (and a couple of other adjustments) to these NASS prices, just as they are done on a monthly basis. Doing this for each week provides more pricing information than using the announced monthly prices. Each price series is deflated (divided) by its standard deviation calculated over the data period, 2000 to 2010. This standardization allows a more direct comparison among the price series and does not change the pattern of variability over time.
Chart 1 shows the pattern of variability for the standardized prices over the past time period 2000 to 2010, 563 weeks. As you look over this chart, recall that in the years leading up to the Federal Order pricing reform, implemented beginning January 2000, the dairy industry, and in particular, dairy producers, wanted a milk valuation system that reflected the changing value of those primary dairy commodities into which milk was manufactured.
Chart 1. Pattern of variability of standardized prices for the Federal Order (FO) 33 blend price, butter,
cheese, nonfat dry milk (NDM) , and whey.
Federal Order 33 Weekly Blend Price:
Focus your attention on the solid line in the chart and its ups and downs over the almost 11 year period. Notice that there are three and one-half periods of price variability where the blend price is high relative to its standard deviation and then declines. For example, in the third period, beginning with week 341 and ending with week 482, and coinciding with the years 2007 and part of 2008, the blend price is almost eight times its standard deviation. Now let’s look at the contributors to this variability.
NASS Nonfat Dry Milk Price:
This price series is depicted by the dashed line. Notice that for the first two periods of blend price increases and declines, there is no real association between the nonfat dry milk price and the blend price. The significant association occurs in the third period when the nonfat dry milk price rises to over seven times its standard deviation. This occurs with the entry of the United States dairy industry, as an exporter, into the world skim milk powder market in 2007. The fact that nonfat dry milk prices were pulled up to this level was the result of a number of factors, including economic, political, and weather driven, which may or may not repeat in the future.
NASS Butter Price:
The NASS butter is depicted as the larger dashed line in the chart. The link between the variability of the butter price and the Federal Order blend price is most apparent. In the first and second major blend price upswing, the butter price plays an important role. Note that as the butter price peaks and declines, so does the blend price, unless the blend price is held up by another dairy commodity price. Even the latest surge in the butter price, occurring in the latter part of 2010, the influence on the blend price is apparent. Note that in the third period of high federal order blend price, the butter price was not a contributor.
NASS Cheese Price:
The NASS cheese price series is the dotted series shown on Chart 1. Note that it moves somewhat in tandem with the butter price, reinforcing both blend price highs and lows. When the cheese price is not in tandem with the butter price, it often carries the blend price itself, as evident in the weeks between 180 and 220 (mid 2002 on into 2003). This is especially evident for the period 2007 through mid-2008 (weeks 380 to 460). The nonfat dry milk price had already declined and the blend price was falling until the cheese price highs produced resurgence in the blend price in late 2008. By the time the cheese price collapsed in December of 2008, all of the other dairy commodity prices had retreated to lower levels, and the blend price came right along.
NASS Whey Price:
A look at the whey price series, shown as the light dotted line in Chart 1, indicates that the variability in this price series contributes to the overall variability in the federal order blend price. This contribution is apparent, although it is less pronounced than the other commodities in its contribution. Note that the whey price contribution to the record high blend price coincided initially with the general dairy commodity price run-up in early 2007 (data points 341 through 410), at which time it retreated, leaving the other commodities the task of keeping up the blend price. The whey price, while improved in the later part of 2010, is currently not a factor in the strengthening of the federal order blend price.
Back in the mid to late 1990’s, the dairy farming sector was concerned that changing market prices for major dairy products were not being correctly or adequately reflected in the valuation of milk and milk components, as under the old Minnesota-Wisconsin or Basic Formula pricing rules. As consumers demanded and consumed more cheese, for example, dairy producers wanted the increased value of that cheese, in the form of protein and butterfat, reflected directly back into the milk price. Now that you have had the opportunity to review the role of the four major dairy commodity markets and their respective price variabilities into the level and variability of the all important federal order blend price, you can ask yourself the following question: Did we get what we wished for? Perhaps, more than we expected. Clearly, the milk price reflects the variability in the dairy commodity markets.
In the next MarketView, I will discuss and explore the nature of price variability versus price volatility. In doing this, I will address the question of whether or not dairy prices and the milk price have become more volatile over time, or are they simply more variable as we experience new market highs. I will also consider the prospects for the observed variability in dairy commodity prices to continue into the future.
To keep up with the dairy futures market and other important market news, visit the OhioDairyWeb 2010 website: http://aede.osu.edu/programs/ohiodairy.
Feed Prices are A-Changin'!
Dr. Joanne Knapp, Principal Technical Consultant, Fox Hollow Consulting, LLC, Columbus, OH
I expect that this will be my last Buckeye Dairy News contribution for a while, as Dr. St-Pierre has returned from his sabbatical leave and will take up this topic again.
It’s no surprise to anybody in the feed or livestock industries, but feed prices are changing rapidly this fall. Compared to August 2010, the average price of feedstuffs used for this analysis has stayed the same, but individual feeds have changed prices dramatically. Whole cottonseed has dropped $100/ton and is now predicted to be breakeven. Canola has gone from being overpriced to a bargain. These ingredient price changes are impacting nutrient values. The NEl is up 3 ¢/Mcal to 12 ¢/Mcal, while metabolizable protein is down 20 ¢/lb to 27 ¢/lb. Non-effective NDF and effective NDF are relatively unchanged from August. The cost of the key nutrients was estimated using Sesame III software and break-even prices of commodities and forages used in dairy rations were predicted (Table 1). Note that because market conditions are fluctuating substantially from week to week, these evaluations are good only as long as the relative price differences hold true.
Based on early October wholesale prices for central Ohio, feed commodities fall into three groups:
Brewers’ grains, wet
Corn grain, ground
Distillers’ grains w/sol
Alfalfa hay, 44% NDF, 20% CP
Cottonseed meal, 41% CP
Expeller soybean meal
Meat and bone meal
Soybean meal, 48% CP
Soybean meal, 44% CP
The usual caveats with Sesame III™ results apply. You cannot formulate a balanced diet using only the feeds in the Bargains column. These feeds represent savings opportunities and can be utilized in rations to reduce feed costs within limitations for providing a balanced nutrient supply to the dairy cow. Prices for commodities can vary because of quality differences as well as non-nutritional value added by some suppliers in the form of nutritional services, blending, terms of credit, etc. Feeds may also bring value to a ration in addition to their nutrient value, e.g. tallow as a “carrier” and dust suppressant in vitamin/mineral pre-mixes and molasses as a source of sugars.
The detailed results of the Sesame III™ analysis are given in Table 1. The lower and upper limits give the 75% confidence range for the predicted Break-Even prices. Feeds in the “Appraisal Set” are either those that were completely out of price range (outliers) or had unknown prices, such as the alfalfa hays of different nutritional quality.
Table 1. Prices of dairy nutrients, and actual wholesale, breakeven (predicted)
and 75% confidence limits for feed commodities used on Ohio dairy farms.
Energy Balance of Cows and Mastitis: Potential Linkages
Dr. Bill Weiss, Dairy Nutrition Specialist, The Ohio State University (top of page) pdf file
The risk that a cow will develop mastitis is a function of pathogen load at the teat end and the cow’s ability to prevent a bacterial infection from becoming established in the mammary gland. Practicing good cow hygiene (keeping stalls clean, frequent scrapping of allies, and following good milking procedures) will reduce teat end exposure, and good nutrition can improve immune function, thereby reducing infection rates and severity of mastitis. The highest rates of mastitis generally occur during early lactation, and early lactation is the time when most cows experience negative energy balance.
During early lactation, dry matter intake (DMI) by dairy cows is low, whereas nutrient demand is high, which leads to cows being in negative energy balance. Body fat is mobilized to provide the energy needed for maintenance functions and to produce milk. The energy deficient experienced by most cows usually starts a few days before calving and continues for several weeks after parturition. Normal, healthy cows lose 0.25 to 0.5 body condition score (BCS) units in early lactation and reach their BCS nadir by 4 to 7 wk of lactation. Some cows start losing body condition several days or even a few weeks before calving, continue losing condition after calving, and lose more than 1 BCS unit in early lactation. The concentrations of nonesterified fatty acids (NEFA) and beta-hydroxybutyrate (BHBA) in plasma increase as cows mobilize greater amounts of body fat, and experiments have shown that both high concentrations of NEFA and BHBA have direct negative effects on the functionality of certain immune cells in cattle. Other experiments have found that a statistical link exists between energy balance and the prevalence of mastitis; cows with more severe negative energy loss are at a higher risk for mastitis than cows that lose less body condition. However, during the peripartum period, negative energy balance and elevated concentrations of NEFA and BHBA coincides with numerous other events, including hormonal changes, hypocalcemia, and changes in vitamin status; therefore, it is not possible to determine unequivocally that energy balance has a direct effect on immune function. However, enough data are available to strongly suggest that excessive mobilization of body fat and the associated increase in NEFA and BHBA during the peripartum period contributes to immunosuppression. Management and dietary practices that should help reduce excessive body condition loss include:
Prevent cows from becoming too fat in late lactation and the dry period. This may require a pen dedicated to fat lactating cows so that they can be fed a low energy diet. Excess energy consumption is a common problem during the dry period because dry cows only require about 14 Mcal of NEL/day. To meet, but not exceed, the energy requirement, a diet based on less digestible feeds is needed so that the rumen gets full before overconsumption of NEL occurs.
- Avoid a large decrease in DMI during the prepartum period. The DMI can decrease by more than 20% during the last 1 to 2 weeks of gestation. This large drop in intake causes cows to mobilize fat which can infiltrate the liver, causing fatty liver and ketosis. The drop in intake can be mitigated by feeding a less digestible diet to far-off dry cows so that average DMI for a Holstein cow during the dry period is around 25 to 27 lb/day. Cows with high DMI during the early dry period tend to have a greater decrease in DMI during late gestation than do cows that have more moderate DMI during the early dry period. The peripartum decrease in DMI can also be moderated by feeding a well-balanced prefresh diet (e.g., good forage, 30 to 35% dietary NDF, and 30 to 40% concentrate). Intake by specific animals can be reduced when pens are overcrowded. Make sure pens containing prefresh animals have adequate bunk space and stalls.
- Promote a rapid increase in energy intake post calving which usually requires a rapid increase in DMI. Feeding excessive grain (i.e., starch) or fat to increase the energy density of diets (i.e., Mcal/lb) usually is counterproductive because it often reduces DMI. Feeding a well-balanced diet based on high quality forage that contains moderate concentrations of fiber (approximately 30% NDF) and starch (22 to 25%) and <5% total fat improves DMI. Overcrowding fresh cows greatly restricts intake of certain cows, putting them at greater risk of increased body fat mobilization and mastitis.
- Prevent cows from becoming too fat in late lactation and the dry period. This may require a pen dedicated to fat lactating cows so that they can be fed a low energy diet. Excess energy consumption is a common problem during the dry period because dry cows only require about 14 Mcal of NEL/day. To meet, but not exceed, the energy requirement, a diet based on less digestible feeds is needed so that the rumen gets full before overconsumption of NEL occurs.
Composition of Corn Silage Harvested in 2010
Dr. Maurice Eastridge, Extension Dairy Specialist, The Ohio State University
With the limited amount of rainfall, and to some extent the wide swings in temperature, the dry down of corn was very rapid this year. Yields of corn silage have been quite variable across the state and even within a farm and field, from moderate to quite good based on rainfall and ridges versus valleys in fields. There were a lot of problems with molds and mycotoxins in the 2009 crop, but there is much less of a problem with mold this year. Based on the data from the Dairy One Forage Laboratory (http://www.dairyone.com/) in Ithaca, NY, the corn silage harvested this year has higher starch and lower NDF concentrations compared to the 2009 crop (Table 1). This likely reflects a higher ear to stalk ratio in the corn than for last year. At first glance, one would think that this means a higher energy value for the 2010 corn silage. However because of the rapid dry down, some farmers may have harvested the silage at higher DM than desired (harder kernels) and if a silage processor was not used, digestibility of the carbohydrates may be low. Digestibility should improve with advancing storage time. On the other hand, with proper stage of harvest and the higher starch (lower NDF) concentrations, rations need to be formulated with careful attention to physically effective fiber, particle size of the dry corn grain, and source of grain (dry versus high moisture versus steam flaked) that can affect ruminal pH and rate and extent of starch fermentation. The new crop corn silage should be analyzed, be allowed to stay in storage for at least several weeks if possible based on forage inventory, rations reformulated, and then observe cow performance (yield and composition of milk).
Table 1. Composition of corn silage harvested in 2010 versus 2009.1
PA/NY 2010 (n = 539)
May 2009 – April 2010 (n = 17,838)
1CV = Coefficient of variation [(standard deviation/average)*100], DM = dry matter, CP = crude protein,
ADF = acid detergent fiber, and NDF = neutral detergent fiber.
2010 Dairy Judging and Quiz Bowl Teams
Mrs. Bonnie Ayars, Extension Dairy Program Specialist, The Ohio State University
The September calendar includes the best cow shows in the nation, and the premier judging contests are held in conjunction with these events. These students have been quite visible in the parlor at the Ohio State Fair, as volunteers in 4-H state-wide programs, and as members of Buckeye Dairy Club. Many of the readers of this newsletter will have found themselves associated with these “judges.”
The OSU dairy judging teams have traveled in 8 different states, competing in 4 separate contests. The primary Scarlet team, including Hannah Thompson, Laura Gordon, Jason Miley, and Curtis Bickel, finished 4th overall at the Eastern States Exposition. Also traveling on this trip was another team composed of Linda Brahler, Katie Cole, and Sabrina Eick. The "Scarlet" team earned 1st place honors in Jersey and 3rd in Brown Swiss and Ayrshire. As an individual, Jason was high in Brown Swiss and 2nd in Jersey, while Sabrina Eick earned top honors in the Ayrshire division. Laura Gordon placed second in reasons as did the team.
Scarlet Team: Curtis Bickel, Jason Miley, Laura Gordon, Hannah Thompson, and
Coach Bonnie Ayars
At the Pennsylvania All American Contest, the "Scarlet" team was 5th overall and high in the Brown Swiss division. Individually, Laura Gordon had a very good day placing 3rd overall, and Hannah Thompson was 4th with her reasons. Onto the national competition at World Dairy Expo in Madison, Wisconsin, the "Scarlet" team was 5th overall out of 20 universities represented. They were 2nd team in Brown Swiss, 5th in Jersey, Guernsey, and reasons. Jason was 3rd in Brown Swiss, and Laura was 3rd in Holstein. The top 25 in the contest are presented with the title of “All American” and are eligible to apply for a variety of scholarships. Jason, Laura, and Hannah all received this status, with Hannah in 8th place, Laura in 12th, and Jason in 17th.
A core of volunteers assisted on these trips, and thanks are extended to them for contributing their time and expertise. These include Kelly Epperly, Bernie Heisner, and Julie Delavergne.
The "Gray" team traveled to the Accelerated Contest held annually in Wisconsin. Bill Langel (OSU alumnus) traveled with this group composed of Rachel Foureman, Matthew Borchers, Dan Nicol, and Derik Baumer. Dan had a positive day as 8th high individual. This team will also travel to the North American Dairy Show contest in November.
Gray Team: Bill Langel, Derik Baumer, and Matt Borchers (back row),
Rachel Foureman and Dan Nicol (front row).
Following are the links for more detailed results...
Eastern States: http://www.thebige.com/fair/agriculture/documents/10dairyjudging4yrres.pdf
Pennsylvania All American: http://www.allamerican.state.pa.us/PressReleases.aspx?PRID=366
World Dairy Expo: http://www.worlddairyexpo.com/media-news-releases-display.cfm?RecordId=449
Our 4-H team at Pennsylvania and Wisconsin included one member, Jacqueline Sherry. Jacqueline is now a freshman at Ohio State, and she finished right in the middle of both contests. What a great experience she had as she was mentored carefully by the collegiate teams. One of your good questions would be to inquire why we did not have a team of four. As you know, kids have many different activities…especially sports. I find it challenging when some of best talent makes a choice other than judging. Even my diligent efforts cannot make up for such pressures that 4-Hers and their parents must experience.
However, we did have plenty of 4-Hers training at our Maryland State Fair “boot camp” trip. They were disciplined and skilled, and were developing into a talented group. I learned many of these have the opportunity to be in 4-H for two more years. With the support of my volunteers, we decided to let them mature before using them in the major contests. Keep an eye on this group. They have been coming up through the ranks, and yet, some are “raw” talent discovered in our judging clinics at the State Fair. With their passion, you will be hearing more out of this group. Four of those include Dan Grim (Lorain County), Stacie Steel (Tuscarawas County), Eileen Gress (Wayne County), and Rachel Townsley (Champaign County). They will be judging in Louisville at the North American contest.
Ohio will also have a Quiz Bowl team competing in the national contest on November 6th in Louisville, Kentucky. The team includes Rachel Townsley, Eileen Gress, Sam Weeman, Brandon Meier, and alternate Billy Grammer. Their expertise has been enhanced by seasoned quiz bowl coaches, Lisa Gress and Lorraine Townsley, with support from Julie Martig.
Let’s wish all our “Buckeye” teams’ good luck!
What Does Discovery of Bovine Tuberculosis in a Herd in Ohio Mean for Ohio Livestock Farmers?
The July 7, 2010, a press release from the Ohio Department of Agriculture (ODA) announcing that a dairy herd had recently been detected with bovine tuberculosis (bTB) and subsequently depopulated was perhaps a surprise to some people, but to those who have been observing similar kinds of discoveries in other states, it was not. In fact, in an article in the Ohio BEEF Cattle Letter that appeared just before the ODA press release, we briefly discussed biosecurity and the concern of introducing diseases, like TB and others characterized by “silent” infections, into herds and flocks. In the short term, the impact of this discovery on Ohio farmers will be rather minimal and limited to the herd affected, the herds in which animals from this herd were traced, and the regulatory agencies charged with the tracing and testing activity (of course, they are supported with our tax dollars). Should additional herds be discovered in the next two years, the possibility of loss of our “free” status with respect to bTB exists. This could have a profound impact on Ohio farmers.
The current situation in Ohio and the U.S., with respect to bTB, does give us some insight into changes that have occurred over the past 20 to 30 years. Herd size has tended to increase, especially in the dairy industry. Some of this expansion occurred with retention of natural additions to herds, but for many herds, it also involved movement of animals from one herd to another. In some cases, bTB has been traced to Mexican cattle entering the US as Holstein feeder animals and roping/rodeo steers. Unfortunately, in a few cases, contact between these animals and other animals destined for breeding herds has occurred. This time frame has also seen the growth of farmed deer, elk, and bison herds, much of which was unregulated until recent years and in which some level of bTB may have persisted.
The conspicuous feature of this change is the nature and amount of animal movement. In a recent news article, it was reported that last year more than 19 million of the nation's 30 million beef cows and 9 million dairy cows crossed state lines (1). It is now fairly common for herds, both beef and dairy, to contain animals that were born in one state; raised, comingled with other animals, and bred in one or more different states; and relocated to yet another for breeding or production purposes. In fact, in the Ohio herd recently found with bTB, the animals in that herd had their origin in at least 17 different states and Canada. Much of this movement is done with no, or minimal, attention to the potential for introduction of disease. Some of it is done illegally; perhaps more than we would like to believe. The recent National Animal Health Monitoring System (NAHMS) surveys suggest that routine biosecurity measures for animal disease prevention are not regularly practiced by many farms (2). Diseases like bTB, Johne’s disease, anaplasmosis, and bovine viral diarrhea (BVD) are readily moved about by animals that are infected but which show no visible signs of disease. This tremendous amount of movement of animals back and forth across the country, which happens virtually every day, has led some people in the animal health field to observe that we now have a “national” herd merely split up among different temporary owners. To the extent that animals are moved without individual identification and records, the job of tracing disease outbreaks becomes enormous.
Perhaps this is a good time to discuss “health certificates.” Actually, the term “health certificates” is a bit of a misnomer since they do not really certify the complete “health” of the animals being moved. Although the term is still used almost universally, today it is reserved for forms and certificates provided by the USDA for interstate and international animal movement (including dogs and cats). Most states, including Ohio, now issue a “certificate of veterinary inspection” which perhaps more appropriately describes what they are. They are the paperwork that is usually required for interstate, and sometimes intrastate, movement of animals. They list all official forms of identification of each of the animals, their source/owner and destination, and the results of any tests that may have been required for movement to the destination. In some cases, no actual animal tests are required. They also require the signature of a veterinarian that indicates that he/she has performed the appropriate tests, that the information on the certificate is correct and complete, and that he/she has examined the animals for evidence of infectious or contagious disease. Some states require additional statements regarding the status of a specific disease for the source herd to be placed on the certificate. An accredited veterinarian and state of origin issue the certificate with the original accompanying the animal and copies sent to the state of destination.
Although the certificate of veterinary inspection is a very important legal document and does verify testing and examination for some kinds of diseases, it does not imply that the animals listed on the certificate are free of disease. For infectious diseases that have long incubation periods, like bTB, or diseases that may be transmitted from apparently healthy carriers or shedders, like Johne’s disease, BVD, or anaplasmosis, a “health certificate” may provide little protection to the farm or herd of destination. Furthermore, the requirements for interstate and intrastate movement may vary somewhat by state, depending on what a state believes is in the best interest of their citizens. For example, a disease of beef cattle that is getting more attention every year is trichomoniasis (commonly called “trich”), an infection carried by non-virgin bulls that can be transmitted to cows at breeding and cause early embryo loss and a high level of open cows at calving. It has been most common in several western states and is gradually spreading to other states. Some states require multiple tests for this infection on bulls prior to them entering their state, and some do not. Currently, a farmer in Ohio can buy a potentially infected bull from another state and move it to Ohio without any testing for this disease.
The United States embarked on a bTB eradication program in 1917 at a time when an estimated one in every nine human deaths was from TB. It has been estimated that 10% or more of those human TB cases were due to the bovine form acquired from cattle or indirectly from cattle products. (3) That estimate does not count the crippling, non-fatal infections. We made astounding progress in just the first few decades, thanks to the financial and moral commitments of your grandparents and mine, and we continued to make significant strides toward eradication through the early 1990s when most states were declared “Free” and granted that status by the federal government [For a very interesting account of this read (3)]. Today, many states do not require TB testing for cattle being imported from “Free” states.
So We Have bTB. “What’s All the Fuss About?”
Since the bTB eradication program began in 1917, huge changes in the livestock industry have taken place. By the late 1980s, most states had been given “Accredited Free” status with respect to bTB. Although the disease was not eradicated, the prevalence had become so low that infected herds were only infrequently detected. These herds were almost always depopulated quickly, and often no evidence for further spread was found.
In the early 1970s, the “every-six-years” bTB testing of cattle herds by township was discontinued in Ohio. Sometime in the early 1980s, routine testing of Ohio-origin cattle being exhibited in Ohio was discontinued (Yes, I am old enough to remember doing township TB testing and TB testing 4-H market steers going to the county fair). For many years, the primary form of surveillance for bTB has been routine post mortem inspection at state and federally inspected slaughter facilities, although some routine herd and individual animal testing is still done. The USDA does not currently require bTB testing for most classes of cattle if they move between Accredited Free states, and many states, but not all, have similar rules for importation of cattle into their state (4). Ironically, the success of the bTB eradication effort, along with the largely successful effort to eradicate bovine brucellosis, may have created a sense of complacency.
Having USDA “Accredited Free” status has been a major benefit for a state’s livestock producers. However, for sneaky diseases with long incubation periods and imperfect diagnostic tests, like bTB, the potential for spread is always present until they are completely eradicated. With the coming of today’s large, multi-source herds; the tremendous amount of movement of animals for breeding, feeding, grazing, and exhibition; and the reduced level of animal and herd testing, outbreaks of bTB in many states over the last decade are not too surprising. And the meaning of “free” may not mean the same thing now that it did in 1985. Until very recently, the finding of two or more infected herds within a state within a 48-month period caused it to lose its free status. The states of CA, NM, MI, and MN have all lost their free status over the past decade, and several more have discovered infected herds in very recent years (TX, NE, IN, KY, CO, SD, and now OH). For MI and MN, the discovery of wild white-tailed deer with bTB in the areas where cattle herds with bTB were found has tremendously complicated their efforts to regain free status. In the past, when a state lost its “Accredited Free” status, farmers and ranchers of that state who wished to sell or move their animals interstate or internationally had to test their animals or herds to be eligible for movement. The resulting costs to the individual and the state can be enormous as exemplified by the situation in Michigan since the discovery of bTB in the northeastern Lower Peninsula in 1994.
Last year, the USDA published its intent to develop a new approach to its management of bTB (5). This was driven by the recognition that the current rules were developed before changes in herd size and animal movements have come about and that the actual number of infected cattle in infected herds tends to be small. Requiring depopulation of all animals in infected herds, and paying indemnity for them, has become very expensive and harder to justify to a public that is more animal welfare conscious. The steps needed for a state to regain its free status require a tremendous investment in public and private resources, and the unaffected farms in that state share heavily in that burden. In a Federal Order issued on April 15, 2010, the USDA announced its intention to suspend its enforcement of federal law that downgrades a state’s “Accredited Free” status to a lower status when bTB is found provided that the state animal health officials:
- “Are maintaining all affected herds under quarantine;
- Have implemented a herd plan for each affected herd to prevent the spread of tuberculosis;
- Have implemented a program to periodically test the animals under quarantine for tuberculosis and remove and destroy those that do not test negative; and
- Are conducting surveillance adequate to detect tuberculosis if it is present in other herds or species.” (6)
In addition, cattle from herds in that state that are not known to be infected with, or exposed to, TB may be moved interstate without restriction for TB. Indemnity for herd depopulation will still be available “when the evaluation indicates that other options will not mitigate disease spread, there is an imminent public or animal health risk, and/or it is cost-beneficial to do so.” Similar policy is being extended to states that have had their status downgraded one level providing there is no evidence of a wildlife reservoir. The USDA intends to reevaluate this Order in two years.
This is good news for most producers in states that have had their status downgraded and for states that have already found a bTB infected herd within the last few months. It will ease the USDA-imposed bTB restrictions for interstate movement for them and reduce the cost of doing business. It also somewhat reduces the burden on state animal health officials.
However, for farmers whose herds are found to have bTB, little is changed. Indemnity may still be an option, but federal monies for indemnity have been very sparse in the past few years. Approximately $207 million of emergency funding has had to be infused into the bTB program since 2001 (5). Much of this went for indemnity payments and tracing efforts to and from infected herds. If the funds available for indemnity don’t change, it is possible, if not likely, that farmers will be expected to share more of the burden of having bTB. An infected herd may not have to depopulate, but they will remain in quarantine, and the herd plan will almost certainly require multiple years of intensive testing if they expect to regain uninfected status. Commercial dairy farms may be able to remain in business, but the animals that leave the farm will have to go directly to slaughter under supervision of the state authorities or into approved feeding facilities. Slaughter markets may be somewhat limited as not all plants may want to deal with the requirements for slaughter of cows from these herds. For commercial beef herds, requirements for animals leaving the farm may make marketing them very difficult. For purebred herds selling seed stock, being under quarantine could effectively end those sales.
The bigger picture requires answering the question of how we will decide to deal with bTB for the future. If we expect to really eradicate the disease, it will take a renewed commitment on the part of the livestock industry and government. Because government money comes from taxpayers, it may mean they will have to be convinced that there is benefit to everyone to justify the cost. Furthermore, since much of the risk to public health is controlled by pasteurization of milk and inspection of meat, there may be reluctance to support what might be viewed now, almost 100 years after eradication efforts began, as “only” a livestock problem that should not be supported with public monies. There is current precedent for this very opinion in the United Kingdom (UK) (7). The bTB in the UK has become an enormous problem where there are now several thousand farmers living with bTB restrictions on their herds. The bTB problem in the UK is complicated by a significant reservoir of the disease in wildlife, principally the European badger, and reluctance by government and the general public to cull them even in high-risk areas. We must not let the disease become established in wildlife populations – for many reasons. England’s Bovine TB Advisory Group report, published about a year ago, provides us with a glimpse of the challenges we face if our bTB situation deteriorates. A quote from that Report is instructive:
"Finally, there is a need to acknowledge the human costs of this disease. TB has negative effects not only on the health of animals and trade but also the health and well-being of the herd owners involved. It has become apparent in discussions with industry that the stress of dealing with herd breakdowns, particularly in areas of repeated or extended breakdowns, has very real effects on individuals that extend beyond the immediate cost of the animals that are slaughtered. Some form of support (both business advice and direct financial support) is needed to help farmers to manage the impact of living under disease restrictions.” (8)
If we expect to effectively manage, let alone eradicate, bTB, we must realize that our individual actions regarding the biosecurity of our herds and flocks impact everyone, including people not involved in livestock production (9). And, we must develop a more effective system of livestock traceability to enable livestock disease control officials to track the movements of diseased and exposed animals. Those herd owners that have had to deal with a bTB infection in their herds can attest to the value of having even minimal methods of identification and recordkeeping in reducing the impact on their farm.
Animal Identification (ID), Traceability, and the Future of bTB Control
When I first began veterinary practice in 1971, cows on many farms were identified by names such as “Blackie,” “Bonnie,” or “Sparky.” (Ah yes, I remember Sparky well!) Since then, there has been an explosion in the methods one can use to identify animals. These range from simple numbered metal and plastic ear tags to sophisticated electronic identification systems that allow storing much more information about an animal than just a number on an ear tag. Tags and boluses that not only identify the animal but which can also monitor body temperature and report it to a hand held device or computer are now available as well (10). Systems are being tested that could allow remote monitoring of an animal’s location via computers and GPS technology. In fact, one of my colleagues has been using this technology for some time to track wild ducks in his avian influenza research program.
Not all of these new systems will prove commercially viable for the livestock industries, but some have already proven their usefulness. As long as three years ago, I collected blood samples from animals in a 300-cow beef herd that were identified with radio frequency identification (RFID) tags, and we were able to scan their ID directly into a computer and print off bar-code labels for the blood vials right beside a working chute located far from a barn. The capability exists to use this technology to scan animal ID directly into animal health forms and for a laboratory to scan the bar code on the blood vial to put that information into their computer system and subsequent reports. This has tremendous potential to reduce human error in the testing process and to make work faster and easier at the farm and laboratory. The RFID tags used at this farm have had an extremely high retention rate and have frequently allowed the correct ID of animals that have lost their visual ID tag, making them a valuable tool in animal management.
It was recently reported that “Last year, more than 19 million of the nation's 30 million beef cows and 9 million dairy cows crossed state lines” (11). Available data suggest that only about 28% of adult cattle have any form of official ID that would readily allow tracing their movement in case of a disease outbreak (11). “Official” ID refers to a method of ID unique to an animal or premise that is specified by state or federal government. Approved methods vary somewhat by state, species, and class of livestock but are typically ear tags, registry numbers, and tattoos. Perhaps, the most familiar of these are the alphanumeric metal ear tags from the National Uniform Ear Tagging System and which are provided by the USDA. These typically begin with a two-digit number that is unique to a state, followed by capital letters and then four numbers, such as 31ATM4444. The “31” indicates that the tag was applied by a veterinarian to an animal that was located in Ohio. Official tags are now available that use the 15-digit international standard numbering system, including RFID tags. The national Scrapie Eradication Program uses a special premise ID numbering system, and all breeding sheep, most exhibition sheep, and any sheep over 18 months old must be identified when they change ownership or move in interstate commerce. This identification scheme has been in place since late 2001, and we are making remarkably good progress in eradicating scrapie.
Officially identified animals, accompanied by appropriate paperwork, allow animal disease officials to trace animals that may be exposed or otherwise involved in a disease outbreak after they have left the farm. However, the system is far from perfect and can fail us. Unfortunately, this may be when we need it most, such as in outbreaks of serious disease like bTB, brucellosis, or, heaven forbid, foot and mouth disease. There are some common ID problems animal health officials encounter in tracing animals involved in disease outbreaks. The first is that ear tags are notorious for becoming lost. If an animal that has lost its tag is not retagged, and is subsequently comingled with other animals without ID, its identity may be gone and finding it again may be very difficult. This problem is compounded by failure to keep records on animals and their comings and goings at the herd level. As an example of this, imagine a situation where an animal is exposed to bTB in one herd and is then sold for breeding or into another commercial channel where it finds its way to a second herd. Assume that a short time after it entered the second herd, it lost its tag and the tag was not replaced, or the replacement tag number was not recorded in such a way as to link it with the first one. If bTB is diagnosed in the original herd, tracing of animal movements from it may lead to the second herd, but finding that exposed animal may now be impossible, especially if the second herd is a relatively large one. This may require quarantining the entire second herd and testing all the animals until it can be fairly certain that bTB has not become established in it.
Another problem is the removal of ID tags after an animal is relocated. This might be done to facilitate the record keeping system at the second location or because the old tag was difficult to read. If the old tag number, and the available RECORDS on that animal, is not retained, future ID of it may be impossible. It is important to know that intentional removal of an official form of ID is against the law. Of course, the reason for this is to maintain a way to trace an animal’s movement or source in the event of disease exposure. Official ID tags from USDA, like those of the National Uniform Ear Tagging System, can be recognized by a shield with the characters “US” inside it printed or stamped on the tag.
A third animal ID problem regulatory veterinarians frequently encounter during disease investigations is that an animal is found with multiple tags; perhaps all of them Official ID tags. This indicates that the animal probably has been moved across state lines multiple times, but it may be impossible to track that movement, except for perhaps the most recent instance, and multiple tags could even delay the tracing effort. Multiple tags in an animal may happen for several reasons, but it is usually because the last time an animal was moved, it was difficult or inconvenient to read an existing tag, and it was simply easier to apply a new one. If multiple forms of official ID are present on an animal, all of them should be recorded on a Certificate of Veterinary Inspection and a new one should not be added. All official ID should be a part of an animal’s permanent record on the farm. Keeping those records is as much a protection for the owner as it is a tool for regulatory officials in tracking disease and exposures. Farm records need not be complicated or elaborate, but having them and being able to provide ID and information about an animal’s movement history in the event of a trace-out of disease to the farm may make the difference between experiencing an inconvenience and being quarantined and having to test the herd.
During USDA fiscal year 2009, six bTB cases in fed cattle (non-adult) were detected at slaughter (12). Fortunately, ear tags allowed ID of the source herds and travel history for three of those animals. However, no unique animal ID was available for one feedlot-origin animal, and multiple consignors had contributed to the feedlot pen from which it had originated. If animal ID is not available, or not recorded, at the slaughter plant where most surveillance for bTB is done, tracing investigations on all animals in a pen or shipment may be necessary to try to locate the source of the infection.
Even when the source herd for a TB-infected animal can be identified easily, the subsequent investigations can be an enormous effort. As just one example illustrates - in April of 2009, a cull cow with bTB was detected at slaughter, and the source herd of 800 adult beef cows in north central Nebraska was identified. Subsequent testing of this herd detected an additional infected cow (12). Investigation of the cow movements into and from this herd, as well as fence-line contacts, resulted in the quarantine of 61 herds in 20 counties and the testing of 21,764 animals (13). No additional infected herds were found, but the costs of testing, borne by taxpayers and herd owners, and the financial and emotional strain of quarantine on herd owners are not easily quantified.
Earlier this year, the USDA announced that it was abandoning its plan to develop a National Animal Identification System (NAIS) that has been in the development phase for several years and which was somewhat controversial. In February, it announced that it was initiating a new effort to develop a framework for animal disease traceability (14). It is holding a series of public meetings and has solicited the assistance of the stakeholders in the livestock industries in developing the plan. It would apply only to animals moving in interstate commerce and would be implemented by the states. Coordinating individual state plans for making traceability both usable and efficient will be a major challenge. Obviously, an effective system will be of benefit for tracking important diseases other than bTB.
In her report to the Committee on TB at the October 2009 meeting of the United States Animal Health Association, Dr. Alecia Larew Naugle, National TB Program Manager (and 1998 OSU Veterinary College graduate), suggested that farmers consider the following with respect to bTB and the need for a new approach to managing it:
“In this new approach, producers and industry will also have responsibilities:
- Advancing their knowledge about bovine TB and risk factors for introducing TB into their herds,
- Evaluating their management practices to identify if any of these risk factors are present and implementing mitigations to reduce these risks,
- Developing industry- and producer-driven components of the TB program and generating the funds necessary to support these activities , and
- Continuing to engage in discussions with State and Federal animal health officials concerning the TB program.” (12)
If we, collectively, decide that the bTB eradication program, started by our grandparents in 1917, is important to finish, we can do it. We have the technology and basic infrastructure to do so if we want to. Writing in the American Journal of Public Health in 1973, Roswurm and Ranney wrote: “The primary problem we face in tuberculosis eradication is a people problem.” and in the following paragraph: “The result is that in the animal health field, we have a few people that have considerable interest in seeing the bovine tuberculosis program completed; and many, many people who care little about this work. The people problem transcends all of the technical problems.” (15) We, the people, have to decide what inheritance we will leave our grandchildren.
- http://nahms.aphis.usda.gov/beefcowcalf/beef0708/Beef0708_is_Biosecurity.pdf and http://nahms.aphis.usda.gov/dairy/dairy07/Dairy07_ir_Biosecurity.pdf
- Olmsted, A. and Rhode, "An Impossible Undertaking: The Eradication of Bovine Tuberculosis in the United States." 2004. The Journal of Economic History vol. 64, No. 3 at: http://www.unc.edu/~prhode/Impossible_Undertaking.pdf
- http://www.aphis.usda.gov/animal_health/animal_diseases/tuberculosis/downloads/tb-umr.pdf USDA Uniform Methods and Rules for bTB
http://www.aphis.usda.gov/animal_health/animal_diseases/tuberculosis/downloads/tb_concept_paper.pdf “A New Approach for Managing Bovine Tuberculosis: Veterinary Services’ Proposed Action Plan”
USDA Concept Paper, Issued July 2009 and available early fall 2009
- http://www.aphis.usda.gov/newsroom/content/2010/04/printable/federal_order_tb.pdf Federal Order -- Bovine Tuberculosis: Requirements Applicable to Accredited-Free and Modified Accredited Advanced States or Zones . April 15, 2010.
- Torgerson PR and Torgerson DJ. Public health and bovine tuberculosis: what’s all the fuss about? Trends in Microbiology 2010 Volume 18, No. 2 pp. 67-72.
- http://www.defra.gov.uk/foodfarm/farmanimal/diseases/atoz/tb/documents/tbag-finalreport.pdf “Bovine Tuberculosis in England: Towards Eradication” A Final Report of the Bovine TB Advisory Group. April 8, 2009.
- http://beef.osu.edu/beef/beefJune1610.html the Ohio BEEF Cattle Letter, Issue # 691, June 16, 2010, Miller and Shulaw articles.
- http://www.drovers.com/directories.asp?pgID=712 - a list of identification device suppliers.
- http://www.usatoday.com/news/washington/2010-08-08-livestock-usda-regulations_N.htm USA Today (online issue), August 8, 2010.
- http://www.usaha.org/committees/reports/2009/report-tb-2009.pdf - Proceedings of the 113th United States Animal Health Association Meeting, report of the Committee on Tuberculosis, October 2009.
- http://www.midwestagnet.com/Global/story.asp?S=12276490 Midwest AGnet, April 8, 2010.
- http://www.aphis.usda.gov/traceability/ - announced February 5, 2010.
- Roswurm JD, Ranney AF. Sharpening the attack on bovine tuberculosis. Am J Public Health 1973;63:884-886.