Buckeye Dairy News: Volume 5 Issue 2

  1. Milk Pricing and Policy

    Dr. Cameron Thraen, Additional milk marketing information by Dr. Thraen

    Policy Watch

    In the policy arena, the event to watch is the introduction of Federal legislation specifically aimed at stemming the flow of imported dairy proteins in the U.S. market. The Milk Import Tariff Equity Act (MITEA) of 2003 has been introduced into both the House and the Senate. Major sponsors of the legislation are Senators Larry Craig (R-ID), Mark Dayton (D-MN) and Representatives Don Sherwood (R-PA) and David Obey (D-WI). It has been reported that the Senate version has over 15 co-sponsors and the House version more than 55 co-sponsors. Look for a good battle on this one with the National Milk Producers Federation (supporting) squaring off against the International Dairy Foods Association (opposed). My viewpoint is that the real issue is not one of tariffs or lack thereof, but a support price for nonfat dry milk that is out of whack with market realities. Simply put, the net return for producing nonfat skim milk powder and selling it to the government is a better deal than producing milk protein concentrates and selling them to the food processing industry. Until this is fixed, the economic problem and political debate will be with us.

    New Class 3 and Class 4 pricing rules: The new Class III and IV prices are set to go into effect for milk shipped starting April 1, 2003. These new rules will impact the calculation of the advanced pricing of Class I for April. There is the rumored threat of legal action to stay the implementation of the new rules. Western dairy interests, not in California, claim that the new rules will put them at a distinct disadvantage price-wise with the California industry. I expect they will find a sympathetic judicial ear in Seattle and the battle will be engaged. Let's hope reasoned judgment prevails.

    Market Watch

    The near-term outlook for dairy commodity prices, milk component prices, and Class prices is not very encouraging at this time. The one bright spot I can find shows up in my forecast for the April Milk Income Loss Compensation (MILC) payment. If I am correct on the dairy commodity advanced prices forecast, this payment could reach a record $1.87 per hundredweight. This is achieved for the April MILC payment through a combination of the new Class III / IV pricing rules and a forecast record low Class I mover of $9.53 for April.

    Here is what the markets look like at the end of the first week of March 2003:

    Table 1. Futures Class III Prices: Quarterly Average Settle Prices as of 03/07/2003.

    1st Quarter 2003
    2nd Quarter 2003
    3rd Quarter 2003
    4th Quarter 2003


    Class III prices on the Chicago Mercantile Exchange (CME) lost substantial support for all quarters in 2003 with the release of the January and February milk and dairy products reports and the USDA dairy products and CME inventory reports. Until some news comes in that suggest a significant tightening of production relative to inventories and commercial demand, the markets will struggle to rise above these low levels.

    Table 2. Forecast National Agricultural Statistics Service (NASS) average dairy product prices and the Class III price.

    Dairy Product
    January - March, 2003
    April - June, 2003
    Grade AA Butter ($/lb)
    Cheddar Cheese ($/lb)
    Whey ($/lb)
    Nonfat Dry Milk Solids ($/lb)
    Class III Milk Price
    Class IV Milk Price
    Producer Price Differential
    MILC Payment Rate

    Figure 3. Forecast average market pay prices for milk fat, protein, other solids, and nonfat solids.

    Milk Component
    January - March, 2003
    April - June, 2003
    Fat ($/lb)
    Protein ($/lb)
    Other Solids ($/lb)
    Nonfat Solids ($/lb)


    At this time, it seems that no ray of hope for better prices to the dairy producer are on the horizon. There is, however, a developing trend that may indicate higher prices by the third quarter of 2003. A careful evaluation of dairy cow slaughter numbers published in the weekly Dairy Market News by USDA/AMS indicates that for the first eight weeks of 2003, dairy cow slaughter is running about 12% ahead of last year. Looking back over the last 10 years at comparable periods of low milk prices and high feed prices, this pattern of increased slaughter pulled prices up by anywhere from $1.00 to $2.00/cwt by the third quarter of the year. If history is a reasonable guide, these high slaughter rates will put a brake on the rate of increase in milk production over the next two quarters. The effect of this will show up as a very modest increase in milk output from the first to the second quarter, and then a significant decline in output during the third quarter of 2003. If the general economy can muster some strength that translates into personal income growth and decent commercial demand over the next six months, we very well could see milk prices strengthen by one to two dollars.

  2. Estimating Manure Phosphorus Excretion by Dairy Cows

    Dr. Bill Weiss

    Manure nutrient management plans are required for large dairy operations and eventually may be required for all dairy farms. An important component of nutrient management plans is phosphorous (P) balance. On average, 55 to 65% of the P fed to a lactating cow is excreted via manure; however, using an average excretion rate is not adequate when developing nutrient management plans. To assist producers in developing nutrient management plans, we summarized several digestibility experiments with Holstein cows conducted at the OARDC. In those experiments, we measured the amount of feed consumed, the concentration of P in the diet, output of feces, fecal P concentration, urine production, and milk production of 130 cows fed 30 different diets. The diets fed were extremely diverse. Forage ranged from 40 to 60% of dietary dry matter (DM). The forage portion of the diet ranged from 100% corn silage to 100% hay crop forage (most of the hay crop forage fed was alfalfa silage, but some studies used alfalfa hay and orchardgrass silage). A wide variety of concentrates were fed, including corn grain, soybean meal, and a host of byproducts. The concentration of P in the diets ranged from 0.32 to 0.46% (average was 0.38% of dietary DM). To meet the NRC (National Research Council, Nutrient Requirement of Dairy Cattle, 2001) P requirement, the average cow in this data set should have been fed a diet with about 0.35% P. On average, diets contained about 8% more P than required.

    To estimate manure P excretion for the lactating dairy cows on a farm, the dairy producer must enter DM intake, the P concentration of the diet fed, and milk production into the following equation:

    Manure P (grams/cow/day) = P intake (grams) - P secreted in milk (grams) - 3.9

    P intake (grams/cow/day) = (Pounds of DM intake/2.2) x (% diet P x 10)
    P secreted in milk (grams/cow/day) = Pounds of milk/day x 0.41

    To convert grams of P excreted/day to pounds divide by 454.

    For example, a farm has a single group of 120 lactating cows, the average DM intake is 45 lb/day, the diet contains 0.4% P (DM basis), and average milk production is 65 lb/day.

    Phosphorous intake = (45/2.2) x (0.4 x 10) = 81.8 g/day per cow.

    Milk P secretion = 65 x 0.41 = 26.7 g/day per cow.

    Manure P = 81.8 - 26.7 - 3.9 = 51.2 grams/cow/day. In pounds, 51.2/454 = 0.11 lb/day/cow of P or 0.11 x 120 cows = 13.5 lb/day of P for the farm (lactating cows only).

    If multiple groups are fed different diets, the same approach is followed except that you have to calculate P intake and milk P for each group. For example, Group 1 has 100 cows with an average intake of 50 lb of DM, the diet has 0.38% P, and milk production averages 80 lb/day. Group 2 has 35 cows with an average DM intake of 40 lb/day with 0.35% P and milk production averages 45 lb/day. Phosphorous intake per cow for Group 1 is (50 lb of DM/2.2) x (0.38 x 10) = 86.4 g (86.4/454 = 0.19 lb). Milk P per cow for Group 1 is 80 x 0.41 = 32.8 g (32.8/454 = 0.072 lb). Manure P per cow for Group 1 = 86.4 - 32.8 -3.9 = 49.7 g (0.109 lb), and manure P for the entire group (100 cows ) is 0.109 lb x 100 cows = 10.9 lb/day. For Group 2, P intake/cow = (40 lb/2.2) x (0.35 x 10) = 63.6 g and milk P per cow = 45 x 0.41 = 18.5 g. Manure P per cow for Group 2 = 63.6 - 18.5 - 3.9 = 41.2 g (0.091 lb). The entire group is excreting 3.2 lb/day of P (0.091 x 35 cows). For the whole lactating herd (135 cows), manure P excretion = 10.9 + 3.2 = 14.1 lb/day.

    If you do not know average milk production per group but know herd average production, that number should be used. Using the example above, herd average milk production = 70.9 lb [((100 cows x 80 lb) + (35 cows x 45 lb))/135 cows]. Average milk P = 70.9 lb of milk x 0.41 = 29.1 g. Average P intake for the herd is [((86.4 g x 100 cows) + (63.6 g x 35 cows))/135 cows] = 80.5 g. Average manure P per cow = 80.5 - 29.1 - 3.9 = 47.5 g (0.105 lb) and for the whole herd manure P = 0.105 x 135 cows = 14.1 lb/day.

    We have not collected data on P balance of dry cows; however, manure P should be approximately equal to P intake (grams) - fetal retained P (grams) - 3.9. The NRC estimates that fetal retention of P for a dry cow averages 4.5 g/day. Therefore, estimated manure P for a dry cow (grams) = P intake (grams) - 8.4. For example, if a dry cow consumes 25 lb of DM that has 0.29% P, estimated manure P = (25/2.2) x (0.29 x 10) - 8.4 = 24.5 grams (0.054 lb/day).

    Although these equations were developed from data collected from Holstein cows, they should work reasonably well for Jersey cows (the manure P for a lactating Jersey cow may be 1 or 2 g/day less than estimated and 3 or 4 g/day less for a dry Jersey cow). A spreadsheet is available that will do these calculations for herds with 1 to 10 groups of lactating cows and 1 to 2 groups of dry cows. You need to input the number of cows per group, DM intake per group, percent P in the diets, and milk production.

    The single most effective way (also the easiest and cheapest way) to reduce excretion of P in manure is to feed only enough P to meet a cow's requirement. For most lactating cows, diets with 0.32 (lower producing cows) to 0.38% (higher producing cows) should be adequate. All P fed in excess of the requirement is excreted via manure.

  3. Tri-State Dairy Nutrition Conference

    Dr. Maurice Eastridge

    The 12th annual Tri-State Dairy Nutrition Conference (TSDNC) will be held April 8 & 9, 2003 at the Grand Wayne Center in Fort Wayne, IN. The objective of the Conference is to disseminate current information on the feeding of dairy cattle primarily to individuals who provide nutritional advice to dairy farmers. Feed industry personnel, nutrition consultants, Extension personnel, veterinarians, and interested dairy producers are encouraged to attend. The record attendance for the Conference occurred last year at 535. The Conference is sponsored by The Ohio State, Michigan State, and Purdue Universities and allied industries. The registration fee is $130 per person (discounts available for groups of 10 or more) and is due by March 21. The late registration fee is $155. The registration fee includes refreshments during breaks and the reception, one breakfast, and a copy of the Proceedings. Additional copies of the Proceedings will be available at $20/copy.

    A free pre-conference program is sponsored by Mycogen Seeds with the theme of "Impact of Quality Forages". This program occurs from 8:00 am - 12:00 on April 8. Registration for the TSDNC begins at 11:00 on April 8, with the program beginning at 1:00 pm. The Conference concludes at 12:30 pm on April 9. The themes this year are Nutrition and Animal Health, Carbohydrates, Effective Fiber Sources, and Current Issues. Three speakers are from Canada, and other speakers are from IL, KS, PA, WI, MI, OH, and IA. For additional information or to register, contact Amanda Hargett at OSU (614) 688-3143 or go to our web site: http://tristatedairy.osu.edu. Additional information also is available by contacting: Dr. Maurice Eastridge, The Ohio State University, (614) 688-3059; Dr. Herbert Bucholtz, Michigan State University, (517) 355-8432; or Dr. Timothy Johnson, Purdue University, (765) 494-4810.

  4. Dairy Heifer Replacement Programs

    Ms. Amanda Hargett

    Ohio State University Extension is holding a series of Dairy Heifer Replacement programs at locations around Ohio. Topics of discussion are: Heifer Nutrition, Housing Heifers, Business Management, Heifer Reproduction, and Keeping Heifers Healthy. Speakers will include Bill Weiss, Maurice Eastridge, Normand St-Pierre, Dianne Shoemaker, Tom Noyes, Joe Beiler, and Amanda Hargett; however, speakers will differ by location. If you are interested in getting into raising heifers, already raise heifers, or want to improve heifer management on your dairy farm, check the schedule below for the location nearest you!

    These are scheduled as one-day programs. Registration fees include a comprehensive notebook and lunch. Registration fees may differ by site. Extra notebooks are available at $20 each; contact Amanda Hargett at 614-688-3143 or hargett.5@osu.edu.

    April 1, 2003 - Williamsfield, OH. Contact Dave Marrison at 440-576-9008.
    April 2, 2003 - Ottawa, OH. Contact Glen Arnold or Tim Demland at 419-523-6294.
    April 3, 2003 - OSU Centers South in Piketon, with satellite links to: South Centers in Jackson, Fayette County Extension Office, and Southern State Community College - Fincastle. Contact Dave Mangione at 740-286-2177.
    April 10, 2003 - Dutch Valley Restaurant, Sugarcreek OH. Contact Chris Zoller at

  5. Cost of Nutrients in Feedstuffs

    Dr. Normand St-Pierre

    From feeds to nutrients

    In appearance, dairy cows are feed converters. They ingest feeds and produce milk. But, we know that the amount of milk produced per unit of feed ingested is not constant across all feedstuffs. This is because fundamentally, feeds are carriers of nutrients. It is these nutrients that cows really need to produce milk. Cows have requirements for nutrients and not for feeds. Cows do not need hay but need effective fiber. Cows do not need corn but need energy. Thus, in essence, when you buy a feed you actually are buying a mixture of nutrients.

    From apples to oranges

    Imagine that a bag of fruits sells for $6. There are 3 apples and 1 orange in it. Neither do we know the price of one apple, nor do we know the price of one orange. All we know is that 3 apples and 1 orange cost $6. Next to this bag, we find a basket of fruit with 1 apple and 3 oranges. It sells for $10. Just looking at the basket, we don't the price of one apple; neither do we know the price of one orange. However, if we combine the information from the bag of fruit with that from the basket of fruit, we can determine the price of one apple and one orange. You may have forgotten the algebra required to do this, but by trial and error, you would eventually determine that one apple costs $1 and one orange costs $3.

    When feeding cows, feedstuffs are the equivalent of the bag and the basket. Nutrients are the equivalent of the apples and oranges. If we have enough feedstuffs (bags and baskets) being traded and if we know their prices, we can calculate the implicit cost of nutrients (apples and oranges). With many feedstuffs and many nutrients, finding the best solution is not trivial, which is why we wrote a software program, Sesame, to do this for us. Check with you local Extension office to inquire about a training workshop in your area for how to use this software.

    The cost of nutrients: Ohio, March 2003

    We used the nutrient composition table from the National Research Council (2001) for 24 feedstuffs available in Ohio. Prices used were wholesale prices for North Central Ohio for the first week of March 2003, with the addition of $20/ton to account for mixing and delivery charges. These prices approximate a farm delivered price in large, bulk quantities as commodities or blends of commodities. For nutrients, we selected Net Energy for lactation (NEL), rumen degradable protein (RDP), rumen undegradable protein (RUP), effective neutral detergent fiber (e-NDF), and non-effective neutral detergent fiber (ne-NDF). Other nutrients (e.g. minerals, such as phosphorus) may also have a value, but their contributions to the price of the selected commodities are generally small and negligible.

    Estimated costs of nutrients are reported in the following table. The numbers in this table are costs expressed in dollars per unit. For example, the cost of one mega-calorie of NEL is about $0.07. Similarly, the cost of one pound of digestible RUP is about $0.22 and one pound of e-NDF is approximately $0.10.

    Take note that based on current market conditions, RDP and ne-NDF both have an implicit cost of $0.00. That is, the current market does not attribute any cost to these two nutrients.

    Now that we know the unit costs of nutrients, it is very easy to calculate the break-even price (i.e., the market value of the nutrients) for each commodity. This price is reported in the following table in the column labeled "Predicted".

    Sesame uses statistical procedures to estimate the cost of nutrients. This enables the software to calculate a "probable" range for the break-even prices. Take bakery by-product meal (bakery waste) as an example. The current market price is $115/ton and the break-even price is estimated at $126.96/ton, with a probable range of $112.82 to $141.10. Thus, bakery by-product meal is currently priced under its break-even price but not enough to make it a real bargain. Gluten feed would be an example of a bargain feed, whereas soybean hulls are currently grossly overpriced. The same information is reported visually in the following figure.


    Feeds located above the top red line (very top line) are considered overpriced; those between the two red lines (very top and very bottom lines) are priced according to their respective nutrient content; those under the bottom red line (very bottom line) are bargains.

    This does not mean that a balanced diet (ration) can be made exclusively of bargain feeds. What this implies is that opportunities to reduce feed costs exist by maximizing the use of bargain feedstuffs while minimizing the use of overpriced ones. A nutritionist equipped with a valid ration balancing software is still required to determine the amounts of feedstuffs to be mixed to produce a sound ration.

  6. Are Your Cows Hot Yet?

    Dr. Normand St-Pierre and Ms. Dianne Shoemaker

    Did you know that, on an average, Ohio gets two days of heat stress in the month of April and ten days during the month of May? Thus, you shouldn't wait to start planning and implementing a heat abatement strategy for your herd. Otherwise, you will likely end up loosing an average of $120/cow this summer.

    To help you plan and design a cost effective heat abatement system, Buckeye Dairy News will publish a Special Issue: The Nuts and Bolts of Efficient Cow Cooling. This special issue is scheduled for release on April 18 and will cover: the economics of heat stress in Ohio, what happens during heat stress, measuring heat stress, basic cow cooling systems, and management and nutrition aids to reduce the impact of heat stress. Software, tables, and figures will be provided with all the details to design an effective system for your farm.

  7. Dairy Farm Labor

    Mr. Robert Fleming

    About a year ago, I wrote: "Several trends are quite clear in the broad area of farm management. More farms are using hired labor, family or non-family, regularly to accomplish their goals. Farm labor laws, while still retaining some exceptions, are becoming more consistent with non-farm laws and regulations. Human resource management is important in the long-run success of the farm, regardless of the size or type of farming operation." Let's review some major employment rules for agricultural labor including dairy farms.

    Federal Tax Withholding (http://irs.ustrea.gov)

    Since January 1, 1990, agricultural employers have been required to withhold Federal income taxes on their employees. Agricultural labor has always been subject to FICA taxes and its withholding, with a few exceptions, but the withholding of income taxes had been optional. Agricultural employers must now withhold, deposit, report, and pay income taxes and Social Security taxes on their employees.

    Who Is Subject?

    The withholding of income taxes will affect agricultural employers who are paying wages subject to FICA (Social Security) taxes. Those include any employee receiving cash wages of $150 or more during the year or all employees if the employer paid wages of $2,500 or more during the year. Cash wages paid to a spouse are subject to FICA taxes. Children under the age of 18 at the start of the year in the employ of a parent, who is a sole proprietor, are not subject to FICA taxes. Farmers who expect to exceed either of the tests should withhold income and FICA taxes at the start of the year. Wages paid in commodities are not currently subject to withholding or FICA taxes but do count toward the $2,500 test. See "How Do Employment Taxes Apply to Farm Work" from IRS Circular A, 2003.

    Changes In The Employment Tax Deposit Rules

    The IRS updated regulations in 2001 covering how often deposits of federal employment taxes must be made.

    General Rules

    Under the rules, each agricultural employer will be classified as either a monthly or semi-weekly depositor of payroll taxes. Your deposit status will depend on the amount of employment taxes, including withheld federal income taxes, reported for a one-year "lookback" period. The "lookback" period for agricultural employers is the second calendar year preceding the current year. For example, the lookback period for calendar year 2003 is calendar year 2001.

    If the employment taxes reported during the lookback period were more than $50,000, you will be classified as a semi-weekly depositor. If the employment taxes reported were $50,000 or less, you are a monthly depositor. The IRS will notify employers each November as to what your deposit status is for the coming year.


    As an agricultural employer, if you accumulate less than $2,500 of employment taxes for the entire year, no deposits during the year are required. You can pay the employment taxes for the year with Form 943, Employer's Annual Tax Return for Agricultural Employees, by January 31st. An option is to make a deposit by December 31st to take the deduction during the current year for the employer's share of Social Security taxes.

    If you are uncertain that your employment taxes will be less than $2,500 during the current year, make deposits under the appropriate rules (monthly deposits) to avoid the possibility of being penalized. That is, for any amount you pay employees, make a deposit of the employment taxes by the 15th of the following month. Doing so will avoid potential problems if your total payroll tax bill for the year turns out to be $2,500 or more. See Circular A (Publication 51), Agricultural Employers Tax Guide, Rev. January 2003.

    State & School District Income Taxes (http://www.state.oh.us/taxfarm)

    Farmers are not required to withhold Ohio income taxes or School District income taxes from their farm employees unless the employee requests it and the employer agrees.

    If an employee's Ohio plus School District income taxes total more than $500, he/she must file an estimated tax declaration and make quarterly estimated tax payments unless the withholding will meet their obligation.

    Ohio New Hire Reporting (http://newhirereporting.com/oh-newhire)

    Under Ohio Revised Code (Sec. 5101.312), all employers including farm employers are required to report all new hires within 20 days of employment. The required report includes seasonal, part-time, and employees under 18 years of age and there is no exception for family members. Reporting can be by fax, mail, electronic, file transfer protocol, magnetic tape, or diskette.

    Workers' Compensation (http://www.ohiobwc.com)

    Workers' compensation coverage is required of all farm owners and operators with one or more employees. Employees covered include farm workers under the age of 18, part-time, full-time, and seasonal employees. Family members who are employees of the business must also be covered. There is optional coverage for the officers of a farm corporation.

    Workers' compensation coverage does not extend to an independent contractor and his/her employees. Wages reported for premium determination must include any wages paid in commodities to farm employees.

    Workers' compensation pays for all employees' medical care related to occupational injuries or diseases. Workers' compensation also provides compensation to the worker and/or dependents in the case of job related disabilities or death. The employer's own private health and accident insurance policy may not cover expenses that should have been covered by Worker's Compensation.

    Federal Minimum Wage (http://www.dol.gov/esa/whd)

    The minimum wage is currently $5.15 per hour. Agricultural employees who employ more than 500 man-days of labor in any calendar quarter of the preceding calendar year must pay at least the minimum wage. Agricultural employers using less than the 500 man-days of labor are exempt from the minimum wage provisions. A man-day is any day during which an employee does agricultural labor for at least one hour. Five hundred man-days is about equivalent to seven employees working fulltime in a calendar quarter.

    The employer's immediate family who are employees are not included in the 500 man-day test unless the employer is a farm corporation.

    Immigration Reform and Control Act (http://www.immigration.gov)

    The Immigration Reform and Control Act affects all American employers. The law makes it illegal to hire unauthorized aliens. ALL employers must establish employment eligibility and the identity of new employees by completing Form I-9. Employers need to keep completed I-9's for three years or one year after an employee leaves. Form I-9 is available from the Immigration and Naturalization Service, Department of Justice.


    There are other farm labor provisions such as Child Labor, O.S.H.A., E.P.A. and others that may affect farm labor. Here are some additional websites that provide farm labor management and regulation information:

    Mid-American Agr & Hort Services, Inc., http://www.midamservices.org
    Gempler's Alert, http://www.gemplers.com/alert.htm
    Northwest Extension District, http://northwest.osu.edu
    Department of Agricultural, Environmental & Development Economics,
    The Ohio State University, http://aede.osu.edu/people
    (go to Agribusiness/Farm Management and Bernie Erven publications)
    Agr. Business Enhancement Center, http://www.ag.ohio-state.edu/~abe

    Properly and legally managing labor will help dairy farms make progress toward their mission statement, goals, and objectives.

  8. Ohio Dairy Industry Forum (ODIF) Hosts Trade Discussion

    Mr. Tim Demland

    On February 11th, several Ohio dairy stakeholders attended ODIF's quarterly business meeting and trade discussion, with the following special guests: National Milk Producers Federation (NMPF) Trade Specialist, Jaime Castenada; Ohio Department of Agriculture (ODA) Dairy Division Chief, Lewis Jones: and OSU Extension Milk Marketing Specialist, Cameron Thraen. The main focus of the discussion was the effect that shipments of Canadian raw milk were having in the Midwest and what efforts could be taken to assure that market equitability in the region is sustained.

    Currently, shipments of raw milk continue to move into Ohio's neighbors, Pennsylvania and Indiana. Ohio's Department of Agriculture has avoided these shipments by asserting that comprehensive antibiotic testing of Canadian milk will be required before unloading. Certain drugs considered carcinogenic and prohibited in the US are allowed for use in dairy cattle in Canada.

    Concern was raised that if this disallowing of the milk into Ohio continues, Ohio's dairy processors may be put at a competitive disadvantage. In the past, it was agreed that efforts should be made to encourage a level marketing environment, which would also include the opening of Canadian markets for finished products. Currently, Canada's trade policy discourages shipments of dairy products into the country.

    The milk being exported into the US is classified as "non-quota" milk in Canada, and is therefore, not regulated by their milk program. In light of the World Trade Organization's (WTO) recent decision against Canada's milk export programs, this may not be the case for long. Mr. Castenada encouraged attendees and dairy producers across the region to initiate and participate in grass root efforts that contact government officials urging stricter and immediate enforcement of the WTO ruling. He also suggested that the best-case scenario to restore a more equitable marketing environment is for Ontario and Quebec officials to start regulating "non-quota" milk. If this is done, the milk will "disappear" because under Canada's quota system, there is no provision for "non-quota" milk.

    Until enforcement of current marketing agreements is more strict, it will be important to encourage USDA, the Pasteurized Milk Ordnance (PMO), and Interstate Milk Shipment (IMS) enforcement agencies not to grant Canadian farms Grade A milk marketing status. Charles Twining with the ODA stated that there are three scenarios that foreign produced milk can be granted Grade A status: (1) when a state or authorized entity performs all regulatory functions in the foreign country exporting the milk, (2) when the exporting country completely adopts the PMO and IMS standards, or (3) when the FDA determines that the exporting country's milk program is equivalent to the PMO and IMS standards enforced by the states.

    Another major concern raised during the meeting was that once raw milk crosses the border, there are no established means to track the location or use of the milk. This effectively eliminates any ability to monitor product safety, biosecurity, and raises definite concerns during this time of increased security against terrorist activities. Mr. Castenada said that the FDA was not required to track such shipments and that these efforts are at the sole discretion of Customs officials.

    At the conclusion of the meeting, the parties attending decided that increased communication between the parties was needed and it was agreed that the ODIF should act as a liaison to gather and distribute information on future events.

  9. Risk Management Education

    Mr. Robert Fleming

    Milk producers and the milk industry are faced with a new management challenge - managing their risk due to volatile milk prices. Understanding the complex milk marketing area requires effort and dedication but does offer substantial returns.

    Milk producers and others are invited to enroll in a letter-study course on "Achieving Risk Management Success in Dairy" written and edited by the Ohio Dairy Risk Management Team as a part of the multi-state A.R.M.S. program. This 18-issue course will include topics such as:

    • Milk Price Risk Management Strategies
    • Marketing Plans & Your Risk Tolerance
    • Understanding How Milk is Priced
    • Following and Using Outlook and Pricing Trends
    • Income Tax Aspects
    • Relationships with Brokers and Lenders
    • Tools for Managing Price Risk in Milk Markets

    To register for this letter-study course, send your name and address to:

    Robert D. Fleming
    District Specialist, Farm Management
    OSU Extension - N.W. District
    1219 West Main Cross
    Suite 202
    Findlay, OH 45840

    Because of budget constraints and required cost recovery, the registration fee is $65.00/per person. The mailing will begin weekly by mid-April.

    A letter-study course lets you participate at your convenience and review as often as you want. There will also be a special offer made to participants at the end of the course. Will spending a few dollars and a few hours on Risk Management help you progress toward your mission statement, goals and objectives? To learn more, register now.