Buckeye Dairy News : Volume 5 Issue 4

  1. Milk Production Enters Slow Growth Phase - Will Milk Prices Rebound?

    As we approach the midpoint of the 2003 calendar year it is time to take stock of where we are milk price-wise and where we are likely to go in the last seven months remaining for 2003.

    The roller coaster that we know as the U.S. dairy market

    As we look back at the dairy markets over the last four years, 1999 through 2002, we certainly can recall those familiar opening lines from Charles Dicken's Tale of Two Cities:

    It was the best of times, it was the worst of times,
    It was the spring of hope, it was the winter of despair
    .

    As a recap on the "spring of hope" and the "winter of despair", recall that milk supply and demand were in tight balance as 1999 came to a close, with National Agricultural Statistical Service, USDA reporting the average All Milk Price at $14.35 and gross income from the sale of milk at a near peak of $23.3 billion dollars. Times were indeed, good! The performance for 2000 lived up to the billing of the worst of times. Milk production grew by 2.98% responding to high prices and cash inflow. However, as often happens with farm production, and dairy is not the exception, rapid production growth outpaces growth in commercial demand. Commercial disappearance, as measured by fat equivalence, grew by 2.54% for 2000 over 1999. By the end of 2000, this imbalance between production and use had sent the all milk price declining by 13.6% and gross income from the sale of milk declining by 11% to 20.8 billion dollars.

    As 2001 began, it appeared that more despair was on the way! This was not to be, however, as difficult weather created harsh production conditions, and milk per cow struggled to keep up with the trend, and finally posted a significant reversal of direction and declined by 0.4% for the year. Even with demand now showing real weakness, this was enough to push the average value of the All Milk Price back up by 21.4% and send gross cash income from the sale of milk soaring to $24.9 billion dollars. It was the best of times once again!

    As is the case for the US dairy, all of that cash income flowing onto the farms was put to good use by producing more milk. With the weather back to more normal conditions for most of 2002, production picked up again, cow numbers increased, yields went up, and US milk production posted a 2.5% gain over 2001. What happened to milk price? You guessed it! The average All Milk Price declined again. This time it fell by a staggering 19.5%. The annual average All Milk Price in 2001 was $15.05, and by the end of 2002, it had declined to $12.11! My, how the winter of despair had returned!

    Why such a large decline in the milk price from 2001 to 2002? The answer to this rests squarely on the recognition that with weak consumer demand across the board, there is too much milk production taking place to support the higher prices we experienced in 1999 ($14.35) and 2001($15.05). Commercial disappearance grew by only 0.3% in 2001 and 0.5% in 2002! In addition, and this is a big factor for the future milk price outlook, we are starting each new production year with an ever increasing inventory of unsold dairy products - butter, cheese, and nonfat dry milk.

    On a fat equivalent basis, commercial inventories increased by 11% in 2001 and by 2.95% in 2002. On a solids-equivalent basis, inventories held by the Commodity Credit Corporation also increased by 284% in 2001 and 50.4% in 2002, primarily as skim milk powder. This is the explanation for why a 2.98% increase in production from 1999 to 2000 resulted in a 13.5% price fall and a smaller, 2.5% increase in production from 2001 to 2002 resulted in a 19.5% price fall.

    Dairy product inventories flatten milk prices

    A seasonal pattern occurs for butter stocks to production ratio (BSPR). Stocks tend to rise during the first half of the year as cream is flush and butter production is full throttle. In the second half of the year, when cream is less available, stocks are drawn down relative to butter production. High milk price years need high butter prices. This is a fact! High butter prices require a moderate to low BSPR. In 2003, the BSPR is running at least two times higher than we would normally expect this time of the year. In fact, we are carrying inventories of butter that we would not expect to see until the peak in the June - August period. This strongly suggests that we will not see wholesale butter price move above the $1.10 to $1.20 range this year, unless something happens to soak up a significant quantity of this butter in commercial storage.

    As with butter but not as obvious, a seasonal pattern occurs for the cheese stocks to production ratio (CSPR). Stocks relative to production tend to rise during the November to February months, and then again during the March to July period. In the second half of the year, when farm level protein tests fall, the cheese industry pulls from stocks to satisfy demand and stocks are drawn down relative to cheese production. Just as we discussed for butter, high milk price years need high cheese prices. And as with butter, higher cheese prices require a moderate to low CSPR. In 2003, the CSPR is running at 4 percentage points higher than we would normally expect this time of the year. While this is higher than we would like to see at this time of the year, this is not nearly as significant as the BSPR. With a pickup in commercial demand, we can anticipate a real rise in the wholesale cheese price. How high can the cheese price rise? Without a return to robust consumer demand, I do not expect to see the reported National Agriculture Statistics Service (NASS) monthly average wholesale cheese price to move above the $1.20 to $1.35 range for the remainder of 2003. In my opinion, the cash cheese price rally posted on the Chicago Mercantile Exchange on the opening days of July is not sustainable as a long-term price level.

    A little good news please

    From the latest USDA Milk Production report, it does appear that the prolonged financial pain of the past year is beginning to show as a reduced rate of growth in cow numbers, yield per cow, and US milk production. Couple this with weekly numbers from the USDA Federal Inspected Livestock Slaughter - Dairy Cattle report, which indicates that dairy cow slaughter is continuing to run an average of 10 to 11% ahead of last year at this time. If this continues, I expect that we have turned the corner on milk production growth and can expect to see much slower growth on a percentage basis over the next year. If the past is a guide, it will take 3 to 5 quarters of reduced milk output growth with the last couple of those showing a negative rate of growth over the year earlier period for the supply and demand balance to become tight enough for the All Milk Price to show a sustained and substantial increase. When this happens, you can expect to see a $1.50 to $2.00 increase in the monthly value of the All Milk Price by year end.

    Let's take a look at what is ahead for market prices in the last half of 2003 and the first part of 2004

    Until we get a better balance between the inventory of dairy products and commercial disappearance, you should look for the current wholesale price levels of Grade AA butter and Cheddar cheese to remain lethargic for the remainder of 2003 and the first quarter of 2004. The 2003 forecast, June through December, for dairy commodity prices (butter, nonfat dry milk, cheese, and whey), given by quarter, is shown in Table 1. These forecast prices translate into the average milk check value shown in Table 2. The producer differential and the gross milk check price are applicable to producers in the Mideast Federal Milk Marketing Order 33, Cleveland base zone. Milk component pay prices, given the 2003 forecast dairy product prices, will be quite moderate, which will be good news for processors of dairy products facing weak consumer demand and not so good news for dairy producers. Class prices in the remaining months of 2003 will not be as robust as they were in 2002 (Table 3).

    Table 1. Forecast dairy commodity wholesale prices ($/lb), 2002 and 2003..

    Forecast for Planning Year
    Grade AA Butter
    Nonfat Dry Milk
    Cheddar Cheese
    Whey Protein
    2002 Annual Average
    $1.0952
    $0.9077
    $1.1857
    $0.1993
    2003 Quarter I
    $1.063
    $0.812
    $1.115
    $0.166
    2003 Quarter II est.
    $1.076
    $0.803
    $1.127
    $0.147
    2003 Quarter III est.
    $1.160
    $0.801
    $1.267
    $0.160
    2003 Quarter IV est.
    $1.200
    $0.802
    $1.313
    $0.172
    2003 Annual Average Forecast
    $1.125
    $0.805
    $1.206
    $0.161


    Table 2. Forecast milk component pay prices and Class III price, 2003.

     

    Grade AA Milk Fat

    Protein
    Other Solids
    Nonfat Solids
    Base Milk Value
    MILC Payment*
    2002
    $/lb
    $/lb
    $/lb
    $/lb
    $/cwt
    $/cwt
    Annual Average
    $1.30
    $2.01
    $0.06
    $0.76
    $10.93
     
    Forecast for 2003
     
     
     
     
     
     
    Quarter I
    $1.156
    $1.778
    $0.026
    $0.672
    $9.515
    $1.156
    Quarter II est.
    $1.153
    $1.887
    -$0.012
    $0.657
    $9.612
    $1.153
    Quarter III est.
    $1.254
    $2.229
    $0.001
    $0.655
    $11.064
    $1.254
    Quarter IV est.
    $1.302
    $2.329
    $0.013
    $0.656
    $11.599
    $1.302
    Annual Average
    $1.216
    $2.056
    $0.007
    $0.660
    $10.448
    $1.216

    *MILC = Milk Income Loss Compensation


    Table 3. Forecast class prices 2003 with comparisons for 1999 through 2002.

    Calendar Year
    Class I
    Class II
    Class III
    Class IV
    $/cwt
    $/cwt
    $/cwt
    $/cwt
    1999
    15.87
    13.15
    12.44
    12.26
    2000
    13.61
    12.65
    9.74
    11.83
    2001
    16.26
    14.53
    13.10
    13.76
    2002
    13.01
    11.56
    10.43
    10.85
    2003 (estimated)
    12.64
    10.75
    10.45
    9.99

    Projected MILC payment rates

    Now that we have the complete suite of price forecasts for FY2003, we can calculate the implied payment rates under the MILC program (Table 4). In doing this, keep in mind that these are only estimates of the rates and will change as new market and production information becomes available. Remember MILC payment rates increase as the Class III and/or Class IV advanced mover prices decline. A higher MILC payment rate is not what is desired as it lifts only some boats, while across the board strength in all milk prices raises all of the dairy boats.

    Table 4. The FY2003 forecast Milk Income Loss Compensation (MILC) payment rate ($/cwt) by month.

    Month
    Days
    Forecast MILK Payment Rate (Actual **)
    Oct '02
    31
    $1.5930 **
    Nov
    30
    $1.3905 **
    Dec
    31
    $1.3950 **
    Jan '03
    31
    $1.4085 **
    Feb
    28
    $1.557 **
    Mar
    31
    $1.746 **
    Apr
    30
    $1.8225 **
    May
    31
    $1.791 **
    Jun
    30
    $1.7775 **
    Jul
    31
    $1.7640 **
    Aug
    31
    $1.485
    Sep
    30
    $1.1655
    Oct
    31
    $1.0215
    Nov
    30
    $0.873
    DEC
    31
    $0.9405


    Winding up

    It is hard to be up-beat and rosy with quarterly average prices that look, at this point, not to be much better than 2000 or 2002. It is fair to ask what could alter my dairy product and milk price forecasts for 2003. Ignoring the unpredictable element of weather, there are really three economic factors at this point. One factor on the production side and two factors on the demand side.

    First, higher feed costs and extremely unfavorable margins over feed costs are beginning to show up in reduced rate of growth in production per cow and in milk cow numbers. This must continue and grow in strength over the remainder of the year. For those of you who like to follow the numbers, early signs of better prices will be USDA reported cow numbers running 0.5 to 1% below year earlier levels, accompanied by output per cow coming in at 0.5 to 1.5% below year earlier levels. This is what is required to adequately slow the rate of growth in milk production and dairy product inventory and could push wholesale market prices and milk prices higher.

    Second, the current slow recovery in the general US economy must continue to gain momentum. We are now headed toward the traditional peak consumer demand months for dairy products, and we need a real strong growth to get consumers back into the buying mood. If this happens, we could see consumer demand gain in strength, indicated by more rapidly declining inventories of butter and cheese. We could see prices for butter and cheese rise above those in this forecast and would be welcome news indeed for dairy producers.

    Third, the current low wholesale price will slowly be reflected in prices in the supermarkets, pizza parlors, and sub-shops. Low prices do perform the function of making dairy products a better value for the dollar and this increases consumer demand that eats away at excessive inventories. Slowly, yes - but it does happen, and this will get market supply back into a better balance with consumer demand. Remember, it was just the right kind of poor weather that rescued milk prices and dairy farm revenue in 2001 from the lows of 2000, perhaps it will do so again in the remaining months of 2003!

  2. Cost of Nutrients in Feedstuffs

    Dr. Normand St-Pierre, Dairy Specialist, Ohio State University

    The summer season always brings opportunities for reducing feed costs if one is attentive enough to the changes occurring in the markets. The supply of some high-fiber byproducts increases noticeably in the summer months (e.g., wheat middlings), while the demand for feeds drops due to pasture utilization and reduced animal intake from the warmer weather. Thus, there can be real buying opportunities for those who realize that corn and soybean meal are not perfect price drivers (i.e., everything is not priced based on the cost of these two feed ingredients). Understanding that feedstuffs are vehicles of nutrients and that markets are indirectly pricing nutrients when they are pricing feedstuffs is an important concept in valuing feedstuffs.

    As of early July, unit costs of some major nutrients have dropped compared to those calculated in mid-spring (Table 1). The costs per pound of rumen degradable protein (RDP), digestible rumen undegradable protein (d-RUP), and effective NDF (e-NDF) have dropped by 1.47, 1.57, and 0.80 cents per pound, respectively. The cost per unit of net energy lactation remains high, at about 7.5 cents per megacalorie. Non-effective NDF is actually traded at a discount of negative 2.5 cents per pound.

    Table 1. Estimates of nutrient unit costs.

    Nutrient name
    Estimates
     
    NEL - 3X (2001 NRC)
    $0.074940
    **
    RDP
    $0.018090
     
    Digestible RUP
    $0.151839
    **
    Non-effective NDF (ne-NDF)
    $-0.025063
    ~
    e-NDF
    $0.088950
    **

    - A blank means that the nutrient unit cost is likely equal to zero.
    - ~ means that the nutrient cost may be close to zero.
    - * means that the nutrient cost is unlikely to be equal to zero.
    - **means that the nutrient cost is most likely not equal to zero.

    Because of these changes, it may be time to reconsider the ingredients in your dairy diets. Based on prevailing prices in Central Ohio during early July, the following ingredients can be purchased at a significantly lower price than what they are worth nutritionally (Table 2): ground corn, distillers dried grains, corn gluten feed, corn hominy, and wheat middlings. These are the ingredients that when used in a balanced ration can significantly reduce your feed costs. Likewise, the following ingredients are currently over-priced: beet pulp, canola meal, citrus pulp, meat meal, molasses, and soybean hulls. Their use in dairy rations should currently be minimized. Menhaden fish meal and blood meal should be avoided completely unless your cows' level of productivity warrants balancing for amino acids (70 to 75 lb/day of milk for a Holstein herd). Even if amino acids are factored in the evaluation, fish meal is still grossly overpriced and should be avoided entirely.

    You feed your cows to provide them with the nutrients required to sustain a desired level of production. There are many sources of such nutrients (feeds). Thus, there are many combinations of feeds that can make a good, balanced ration for your cows. Some of these combinations of feedstuffs can be considerably cheaper than others.

    Table 2. Calibration set.

    Name
    Actual ($/ton)
    Predicted ($/ton)
    Lower limit ($/ton)
    Upper limit ($/ton)
    Alfalfa Hay, OH Buckeye D
    150
    150.834
    135.028
    166.640
    Bakery Byproduct Meal
    118
    131.140
    118.119
    144.161
    Beet Sugar Pulp, dried
    155
    115.503
    103.952
    127.108
    Brewers Grains, dried
    142
    142.114
    130.989
    153.239
    Brewers Grains, wet
    30
    31.515
    28.801
    34.229
    Canola Meal, mech. extracted
    175
    144.365
    133.880
    154.850
    Citrus Pulp, dried
    139
    113.901
    104.127
    123.675
    Corn Grain, ground dry
    106
    128.478
    114.697
    142.258
    Corn Silage, 32-38% DM
    40
    55.296
    49.942
    60.651
    Cottonseed, whole w lint
    211
    217.144
    197.329
    236.960
    Distillers Dried Grains, w sol
    123
    144.285
    134.928
    153.641
    Feathers Hydrolyzed Meal
    230
    257.928
    241.607
    274.249
    Gluten Meal, dry
    98
    137.156
    129.719
    144.593
    Gluten Feed, dry
    257
    265.074
    245.064
    285.084
    Hominy
    106
    119.187
    109.470
    128.904
    Meat Meal, rendered
    235
    213.434
    200.217
    226.650
    Molasses, sugarcane
    118
    92.399
    80.287
    104.511
    Soybean Hulls
    97
    79.761
    63.339
    96.183
    Soybean Meal, expellers
    253
    230.922
    217.337
    244.506
    Soybean Meal, solvent 44%
    203
    183.298
    169.858
    196.737
    Soybean Meal, solvent 48%
    213
    202.605
    190.987
    214.222
    Soybean Seeds, whole roasted
    250
    252.429
    239.896
    264.961
    Wheat Bran
    80
    91.960
    80.587
    103.333
    Wheat Middlings
    73
    101.942
    92.065
    111.820


    Table 3. Appraisal set.

    Name
    Actual [$/T]
    Predicted [$/T]
    Blood Meal, ring dried
    445.00
    312.080
    Fish Menhaden Meal
    600.00
    264.543

    These estimates were derived using the software SESAME Version 2.05 written at The Ohio State University. For additional information, please refer to Buckeye Dairy News Vol. 5, Issue 2, March 2003.

  3. Delay Placing Fly Control Ear Tags

    Dr. William Shulaw, Extension Veterinarian, Ohio State University

    Did you realize that cattle raisers during the Civil War didn't have to worry about the horn fly, and my grandfather didn't have to worry about the face fly? Both pests were introduced (about 1860 for the horn fly and the 1950s for the face fly) to the US. Today, flies are an economically significant problem for cattle farmers.

    The horn fly only lays its eggs in fresh manure, and it is generally recommended not to begin control efforts using tags and sprays until the fly numbers reach an economic threshold - about 100 to 200 flies per animal. Treatment with these methods too early isn't cost effective, and since you never really get all of them (or your cattle are parasitized by your neighbor's flies), early treatment doesn't usually prevent a buildup.

    If you use ear tags for horn fly control, treatment too early may actually be counter productive. Many of these tags have an effective lifespan of five months. If they are put in during the early spring, the drug may be nearly gone by the time fly numbers peak (late summer). If the tags remain in the ear after their effective period of use is over, the pesticide (drug) may be below effective killing concentration at that time, and the flies can quickly develop resistance to it. Resistance was observed in a relatively short period of time after ear tags for horn fly control were first introduced. Therefore, it is recommended not to put fly tags in place until the economic threshold of horn flies is reached and to take them out when the manufacturer indicates the tag should be removed.

    Unfortunately, spring turnout is often a convenient time for producers to apply ear tags. In fact, it is the observation of many veterinarians and parasitologists that fly tags are usually put in and removed when it is convenient, rather than at the time when they will do the most good. Taking them out when the cattle are brought off pasture or when they are worked in October or November (beef cattle) is a common practice and almost surely has contributed to the resistance problem.

    Feed additive larvacides or growth regulators can be used to control horn fly populations. These chemicals work by preventing the development of flies in the manure. They are administered in feed, loose mineral, or block form, and all animals in the group must consume the recommended dosage for effective control. Because horn flies can move from herd-to-herd over a distance of several miles, oral larvacides must be used rather extensively across an area or region in order to be effective. They are not effective in controlling other fly populations that breed in sites other than manure.

    Certain systemic dewormers, now commonly used, also provide a significant measure of horn fly control and may be useful in an integrated approach to control of horn flies. However, some controversy exists surrounding some of these products and other products that provide control of fly larvae in the manure. Research has indicated that populations of some beneficial insects that use the manure for some part of their life cycle, such as the dung beetle, may be harmed or reduced. Dung beetles reportedly can aid in the control of horn flies by removing and burying manure before the life cycle of the horn fly is completed.

    Field observations and field research indicate that sustainable horn fly control may be best attained by an integrated approach that involves within-season rotation of chemical classes and treatment approaches. Reliance on just one chemical class or one strategy usually results in poor control and may select for resistant horn flies.

  4. Feeding Lower Quality Hay Crop Forages

    Dr. Bill Weiss, Dairy Specialist, Ohio State University

    This year's rainy spring had negative effects on the quality of first cutting hay crop forages. Rain either delayed cutting, caused substantial weather damage to mowed crops that could not be removed quickly from the field, or forced farmers to harvest hay or silage at improper moisture contents.

    Delayed harvest means that forages were more mature when they were eventually cut. Fiber (NDF) and lignin concentrations increase and protein and energy decrease as forages mature. The negative effects of maturity are greater for grasses than for legumes. Rations should be formulated to contain adequate, but not excessive concentrations of forage NDF (usually between 18 and 21% of dietary DM). High concentrations of forage NDF in diets reduce DM intake and milk production. Intake depression becomes substantial when diets have more than about 25% of the DM as forage NDF. If forages have high NDF, diets should contain less forage. For example, if corn silage makes up 25% of dietary DM and has 44% NDF, it will provide 11% forage NDF (0.25 x 44). If alfalfa has 40% NDF and the dietary target is 21% forage NDF, the diet should contain 25% alfalfa (21% in total diet - 11% from corn silage = 10; 10/0.40 = 25% alfalfa). If the alfalfa contained 50% NDF, then the diet should contain 20% alfalfa (21 - 11 = 10; 10/0.5 = 20%). Additional supplemental protein may be needed because of the lower concentration of protein in the more mature forage.

    Weather damage reduces the concentrations of protein, energy, and soluble carbohydrates, and increases the concentration of fiber. These changes are caused by rain leeching away soluble compounds and concentrating the less soluble compounds. Although the cause of quality loss is different for weather damage and maturity, the results are the same - DM intake decreases. Indeed, depression of intake can be greater in weathered forages than mature forages because of the development of mold and other anti-quality factors. The same diet modifications as described above should be made when weather-damaged forages are fed.

    Silage made with too much moisture because of poor wilting conditions can undergo an abnormal fermentation. Wet silage (especially when moisture is >70%) can have high concentrations of acetic and butyric acids and a low pH and often adversely affects intake. About the only solution to this problem is to feed less of the poorly fermented silage. Some experiments have shown positive effects on intake when wet silage with low pH is treated with sodium bicarbonate (2 to 4% of silage DM) immediately before feeding. Positive results were reported for corn silage only, not hay crop silages.

    Hay baled with too much moisture usually becomes moldy and heats. Heat-damage reduces the digestibility of energy and protein, but proper diet formulation can minimize those effects. Effects of mold are more complicated. Moldy alfalfa hay that contained no detectable mycotoxins reduced intake by dairy heifers (approximately 300 lb of body weight) but not beef steers (about 600 lb of body weight). Cattle in both experiments sorted against severely molded hay. Moldy hay also can contain mycotoxins which may adversely affect health and production. Because of the risks, moldy hay should not be fed to high producing dairy cows. Several commercial binding products are available, but their value has not been proven in controlled experiments with dairy cows.

    Recommendations for feeding low quality hay crop forages

    1. Have the forage analyzed. Concentrations of NDF and available protein are important quality measures. Alfalfa with > 44% and grasses with > 53% NDF can reduce milk production.

    2. If possible, feed lower quality forages to animals with lower nutrient needs, such as growing heifers and late lactation cows. Feed early lactation cows the highest quality forage available on the farm.

    3. If forage quality is poor because of high NDF concentrations, reduce the amount of forage in the diet but ensure that the diet still contains adequate NDF. Diets with >25% of the DM as forage NDF usually reduce intake.

    4. If forage quality is poor because of a bad fermentation (wet silage), reduce the amount of that particular silage in the diet. Neutralization of the acids in wet silage with sodium bicarbonate may help increase intake.

    5. If forage quality is poor because of mold (wet hay), intake may be poor and toxicity risks are present. This type of forage should not be fed to high producing cows and may or may not be acceptable to other types of cattle. Moldy hay can increase sorting which may increase ruminal acidosis. Other than not feeding or severely limiting the amount fed, little can be done to overcome the problems with moldy hay.

  5. Reporting of Independent Contractors

    Mr. Robert Fleming, District Farm Management Specialist, Ohio State University

    Farm labor laws continue to evolve and become more consistent with non-farm labor requirements. Managing farm labor effectively requires following current regulations. Since October 1, 1997, all Ohio employers, including farmers, have been required to report all newly hired, re-hired, or returning-to-work employees within 20 days of hire or rehire date. Now, recent changes in Ohio law requires employers to report some independent contractors as well to the Ohio New Hire Reporting Center.

    Provided below are some common questions/answers from the Ohio New Hire Reporting Center:

    1) What is the new law that requires independent contractors to be reported as new hires?

    The statute defining who must be reported as a new hire has changed. The new definition requires that Independent Contractors also must be reported as new hires. Pursuant to section 3121.891 of the Ohio Revised Code, employers are obligated to report all employees who reside or work in the state of Ohio. Ohio Revised Code, section 3121.89 defines an "employee" as "an individual who is employed to provide services to compensation to an employer and includes an individual who provides services to an employer under a contract as an independent contractor and who is an individual, the sole shareholder of a corporation, or the sole member of a limited liability company."

    2) When did this change occur?

    This law is now in effect. You should begin reporting independent contractors as soon as possible.

    3) Do I need to report all independent contractors, both individuals and companies, which I use?

    ORS Section 3121.891 defines an independent contractor for new hire reporting purposes as outlined in question 1. Companies should only be reported if they meet these requirements.

    4) How should I report an independent contractor?

    Employers may report new hires via one of the manual methods listed below:

    New Hire Form
    · A printed list
    · A copy of the employee's W-4 form with employer information, employee date of birth, date of hire, and work state added.
    · A copy of the independent contractor's W-9 form with the independent contractor's social security number, date of birth, date of hire, and work state as well as employer information added.

    When reporting an independent contractor, please be sure to indicate their status as a contractor on your submission.

    Independent contractors can be reported either electronically or manually. Request or print the current New Hire Form, brochure, and more information from:

    Ohio New Reporting Center
    P.O. Box 15309
    Columbus, OH 43215-0309
    http://www.oh-newhire.com
    Fax: 888-872-1611
    Phone: 888-872-1490 or 614-221-5330

    5) What information should I report for an independent contractor?

    Ohio Revised Code Section 3121.892 requires the following information to be reported for both employees and independent contractors:

    · Employee name, address, date of birth, and social security number; date of hire, rehire, or return to work; and state of hire, and
    · Employer name, address, and federal employer identification number.

    6) I do not have a social security number for the independent contractor I am reporting. Can I use their federal employer identification number instead?

    No, ORC section 3121.892 and OAC 5101:1-30-12 require that the social security number be reported.

    7) What are the potential penalties for noncompliance?

    An employer who fails to make a new hire report can be fined up to $25.00 for each failure to report. If the failure to make a report is the result of a conspiracy between the employer and the employee not to report or to supply false or incomplete information, the fine can be up to $500.00 for each failure to report.

    Summary

    Human resource management is a skill that can be acquired by farm employers through education, experience, and commitment to the directing function of management. Following legal requirements is a part of that management effort. Progress toward your mission statement, goals, and objectives is enhanced by actions consistent with these functions.

  6. Nutrition of Jersey Cows - Little Holstein Cows or a Breed Apart?,

    Dr. Chris Reynolds, Department of Animal Sciences, Ohio State University

    The Jersey breed has a passionate following, and there is ample evidence that this is justified. Surveys and research have indicated that when compared with Holstein cows, Jersey cows have earlier first calving, easier calving, reduced mastitis and lameness, and greater longevity, while their temperament and size means they are friendly to both farmer and pasture. Although their total milk yield is lower, the Jersey cow typically produces more milk solids per pound of body weight (BW). Milk from Jersey cows has a higher fat (and therefore energy) content, as well as a higher milk protein content and manufacturing quality. A higher dry matter (DM) intake per pound of BW generally accompanies this higher milk energy output.

    As a consequence of the above factors, it is likely that interest in the Jersey breed will continue to increase. In addition, there is currently an increase in the use of Jersey cows in cross-breeding programs. However, it is now recognized that in many ways, the Jersey cow cannot be treated simply as a mini-Holstein cow in terms of nutrition and ration formulation, but only limited scientific information is available on which guidelines for Jersey cows can be based. This article reviews some of this information.

    Feed efficiency: A number of research summaries have indicated that the Jersey breed has advantages in terms of the milk solids output relative to metabolizable energy intake and the production of milk energy from forage. Her energetic advantage is largely due to a greater milk energy output relative to total maintenance requirement, which is associated with the higher solids content of her milk. These comparisons also assumed that the maintenance requirement of the Jersey cow is the same as for the Holstein cow, but there is evidence from non-lactating animals that the maintenance requirement of the Jersey cow is higher.

    Intake and feed digestion: As the DM intake of Jersey cows per unit of BW is often higher than Holstein cows, their intake can not be predicted from BW and milk yield using equations developed for Holstein cows. Increased rate of passage of digesta through the gut has been observed for the Jersey cow. This may be a consequence of increased milk energy output, driving higher DM intakes or, alternatively, more effective mastication and rumination may increase the rate of passage and allow greater DM intake. Regardless, the higher intake in Jersey cows relative to her body size does not appear to reduce diet digestibility.

    Milk fat composition and ration fiber content: The higher milk fat content of Jersey milk is associated with an increase in the relative proportion of shorter-chain fatty acids. These fatty acids and other medium length fatty acids are synthesized in the mammary gland, using lipogenic volatile fatty acids produced in the rumen. As the production of these precursors is promoted by forage digestion, it is generally believed that Jersey cows may need higher fiber levels in their rations. However, feeding too much fiber may impose a limit on their DM intake. Further research is needed to clarify the 'effective fiber' requirements of the Jersey cow and the consequence of errors in balancing rations for fiber, starch, or fat. Indeed, articles in the popular press have suggested that Jersey cows are more tolerant of low fiber rations than Holstein cows, and should be fed less long fiber to achieve maximal DM intake.

    Milk fever and transition diets: One disadvantage of Jersey cows is that they have a higher incidence of milk fever. This has been attributed to fewer vitamin D receptors in the intestine. These receptors increase calcium absorption in early lactation via mechanisms which are inhibited by high blood pH. Therefore, it has been recommended that the cation-anion difference of transition rations for Jersey cows be adjusted for a lower target urine pH (5.8-6.2) than for Holstein cows (6.2-6.7), but the basis for these recommendations is sketchy and the potential negative effects of supplemental dietary anions on metabolism and health must also be considered.

    Energy metabolism: Two calorimetric comparisons of lactating Jersey and Holstein cows from the first half of the century suggested little difference between the two breeds in terms of energy metabolism. However, more recent research conducted at USDA in Beltsville, USA indicates that:

    · Relative yield potential of the two breeds was similar for the individuals studied; fat corrected milk yield per pound of metabolic BW (BW0.75) at peak lactation and DM and energy intake per kg BW0.75 were not different. Thus, the genetic merit of the cows used provided a good basis for a breed comparison.
    · Metabolizable energy intake as a percentage of intake energy was not different: digestibility of energy was higher in the Jersey cows, but this was countered by slight increases in urine and methane energy losses.
    · Energy balance (milk plus body tissue energy) as a percentage of intake energy also was not different between breeds; higher milk fat content for the Jersey cows was associated with greater milk energy output, but corresponding tissue energy retention was numerically lower. This was an important difference between the breeds.
    · This study did not detect differences in the maintenance energy requirement of lactating animals, but higher metabolizable energy intake was required to avoid tissue energy loss in the dry Jersey cows. This may in part be due to differences in body composition, as well as a genetic difference between the breeds.

    Conclusions: When compared on the basis of milk energy output per pound of metabolic body size, the energy requirements of lactating Jersey and Holstein cows are remarkably similar. Differences in milk energy output also explain differences in DM intake and body energy balance between the two breeds. Although further research is needed, factors which should also be considered when formulating rations for the Jersey cow include a higher rate of digesta passage, the higher incidence of milk fever, and the fiber content of the ration.

  7. Monitoring MUN in Dairy Cows - Ohio Data

    Milk urea nitrogen (MUN) is related to dietary protein intake, as well as protein-energy ratio in the dairy cow's diet. The normal/target values for MUN are within the range from 10 to 15 mg/dl. High values typically indicate inefficient protein utilization, either because of feeding of excess protein or insufficient amount of energy in relation to protein in the diet. Low values, on the other hand, may indicate insufficient protein feeding.

    The Department of Veterinary Preventive Medicine at the OSU College of Veterinary Medicine and Ohio DHI collaborated in a study, evaluating MUN concentrations in 24 randomly selected Ohio dairy herds over a one-year period. Half of the herds (n = 12) were defined as low producers (Rolling Herd Average (RHA) milk production < 16,000 lb) and half (n = 12) as high producers (RHA milk production > 23,000 lb). The MUN concentration was measured in the DHI laboratory from individual cow's monthly test day milk samples. The study herds comprised of 1681 cows altogether.

    Based on these Ohio data, MUN concentrations, on average, were higher in the high than in the low-producing herds. The herd level MUN concentrations varied between 5.0 and 15.1 mg/dl in the low producing herds (overall average 11.3 mg/dl) and between 10.1 mg/dl and 19.2 mg/dl in the high producing herds (overall average 13.9 mg/dl). The MUN concentrations varied with month of lactation, as well as with the season of the year. Great variability in MUN was observed from test day to test day in both production groups, and therefore, it is advisable to monitor MUN monthly to establish a baseline MUN concentration for a herd. If the average for the herd (or for a particular group of cows) is outside the target range, it is a good idea to try to determine the cause. The data from this study indicated that herds with RHA milk production over 24,000 lb can have overall MUN as low as 10 to 11 mg/dl. This suggests that using MUN measurements as a practical monitoring tool might provide an opportunity to improve protein feeding efficiency, reduce feed costs, and improve profitability of the herd.

    The association between MUN and fertility of dairy cows was also evaluated from these data. Increasing MUN concentrations were negatively correlated with fertility of cows and were associated with a lower likelihood of detectable pregnancy at herd checks. Cows with MUN concentrations below 10.0 mg/dl in early lactation were 2.4 times more likely and cows with MUN levels between 10.0 and 12.7 mg/dl were 1.4 times more likely to be confirmed pregnant than cows with MUN values above 15.4 mg/dl (the values are adjusted for cow's milk yield). Negative effects on reproduction have previously been reported when MUN concentration is above 19 or 20 mg/dl. The results from this Ohio study would suggest that the levels of MUN that are adversely associated with fertility are likely lower than reported earlier. However, when evaluating reproductive problems in a herd, it is always important to consider MUN in the context of the entire herd management and not to target at low MUN just to improve reproduction without considering the associations between MUN, nutrition, milk production, and reproduction in a herd.

  8. Environmental Rules for Animal Agriculture - Who Are You Going to Call?

    Dr. Maurice Eastridge, Dairy Specialist, Ohio State University 

    There was a cartoon a few years ago, the "Ghostbusters". The central focus was that evil ghosts prowled upon people and capturing the ghosts required the special skills of the "Ghostbusters". The theme song contained the words, "So who are you going to call, The Ghostbusters." Sometimes I think environmental risks are viewed somewhat like ghosts in the cartoon. Environmental risks are everywhere but not at my place, at least I don't think so. But come to think about it, I really haven't given it much thought. Then it happens, the Environmental Busters got a tip from someone and they are invading - "What is going on, who are these people?" Or better yet, maybe you have questions to ask so that you can be better prepared at lowering environmental risks - so who are you going to call? Well, in Ohio it's not that simple - we have many different agencies with different responsibilities. So let's review the primary agencies that can help us with environmental compliance on livestock farms:

    Ohio Department of Agriculture: regulatory authority for Concentrated Animal Feeding Operations (CAFO) and monitors point source discharge from animal facilities, (614) 387-0470, lepp@odant.agri.state.oh.us, http://www.state.oh.us/agr/LivestockRegIndex.HTML

    Ohio Department of Natural Resources (ODNR):
    Division of Wildlife - protects waterways thorough enforcement of stream litter and wildlife protection laws, 1-800-wildlife, wildinfo@dnr.state.oh.us, http://www.dnr.state.oh.us/wildlife/default.htm
    Division of Soil and Water Conservation - Administers non-point source pollution control assistance, state cost share, and pollution abatement complaint programs, (614) 265-6610, dswc@dnr.state.oh.us, http://www.dnr.state.oh.us/soilandwater

    Ohio Environmental Protection Agency (Division of Surface Water): authority to implement laws and regulations regarding water quality standards, (614) 644- 2001, http://www.epa.state.oh.us/dsw

    USDA Natural Resources Conservation Service: provides information on soil capabilities, surface and subsurface drainage, and erosion control measures, (614) 255-2472, http://www.oh.nrcs.usda.gov; locate local offices at http://www.oh.nrcs.usda.gov/contact/directory/directories.html

    The most accessible, local contact that will help you follow through the channels of environmental rules is the ODNR-Division of Soil and Water Conservation. Each county has a local soil and water conservation district (SWCD). You can find the phone number in the local telephone directory or go to: http://www.dnr.state.oh.us/soilandwater/swcds.htm. Being PROACTIVE is good. Get to know the SWCD personnel and the assistance that they can provide.

    Note: Ohio House Bill 152 was introduced to the 125th General Assembly to revise Ohio's environmental rules for CAFO to abide by the new Federal rules. The Ohio Legislature passed Bill 152 and it remains in Governor Taft's office for signature.