Buckeye Dairy News: Volume 8 Issue 2

  1. Dairy Facts: A look at Ohio dairy farm numbers 2002 to 2005

    Dr. Cameron Thraen, Milk Marketing Specialist, The Ohio State University, Additional milk marketing information by Dr. Thraen

    Each February, the United States Department of Agriculture, in the report Milk Production, releases estimates of the number of dairy farm operations by state and the entire United States. These numbers are reported for all operations with at least one milk cow, and beginning in 2003 they provide a separate estimate of licensed dairy operations. They also release information on the number of dairy farm operations classified by the number of cows in the operation. Tables 1 and 2 below show you a summary of this information for Ohio over the time period 2001 to 2005. During this period, the number of US dairy operations, with at least one milk cow, decreased by 14.8%, from 91,990 in 2002 to 78,295 in 2005. The US licensed operations declined by 8% over 2003 to 2005. Today, there are an estimated 64,555 licensed dairy operations in the United States.

    Table 1. Ohio dairy operations with at least one cow by herd size.

    1-29 Head
    30-49 Head
    50-99 Head
    100-199 Head
    200-499 Head
    500+ Head
    Total Operations
    4700 (3960)1
    4500 (3780)1
    4400 (3610)1

    1Number of licensed operations.

    Table 2. Ohio dairy operations with at least one cow by herd size (%).

    1-99 Head
    100-199 Head
    200-499 Head
    500+ Head


  2. Milk and Dairy Product Production Climbs - What's Down the Road for Milk Prices?

    Dr. Cameron Thraen, Milk Marketing Specialist, The Ohio State University

    As we enter the start of the 2006 calendar year, it is time to take stock of where we are milk price-wise and where we are likely to go in the next 12 months. In this column, I will review the trends observed in the cash markets for dairy commodities. If you would like to follow my weekly price projections for the milk and dairy product markets, you can do so by accessing my Ohio Dairy website at this address: http://aede.osu.edu/programs/ohiodairy/ . Here, you will find a wealth of information on the Ohio dairy industry, current cash and futures markets, and my 24 week forecast.

    Cheese market

    After peaking at $1.73/lb in the last week of January 2005, the Chicago Mercantile Exchange (CME) average cheese price has followed a general downward trend through the end of 2005. Over the last 16 weeks of 2005, the CME average cash cheese price has fallen from the comfortable $1.50's/lb to the not so comfortable $1.35/lb mark. This is a price not seen since February of 2004. The last time CME cash price for cheese 40 lb blocks traded below this level was back on June 27, 2003, with a close of $1.275/lb. By the week ending March 4, the CME average cheese price had declined further to $1.115/lb. The last time CME cheese dropped this low was back in April of 2003. The Dairy Market News reports that cheese markets are weak and may remain so well into the first half of 2006. Look for the cheese price to remain low for sometime to come. My crystal ball has the National Agricultural Statistics Service (NASS) cheese price staying in the $1.11 to 1.13/lb range through July 2006. Higher cheese production costs as a result of soaring energy costs have severely squeezed cheese to milk margins and made life difficult for some parts of the US cheddar cheese industry.

    Butter market

    The CME butter market has followed a different path, peaking only recently during the third week of September at $1.72/lb. However, by the end of February 2006, the CME butter market has also lost steam and has slid down to $1.185/lb on the CME cash market. The NASS butter prices have followed this downward slide and were at $1.20/lb by the last week of February. My forecast suggests that butter prices will trade in the $1.20 to 1.23/lb range before regaining strength toward the last quarter of 2006.

    Skim powder and whey markets

    The powder markets have been on an upward trend through all of 2005. Nonfat dry milk (NFDM), benefiting greatly from a very tight world market for skim powder, increased steadily from a low of $0.88/lb to its high of $1.00/lb. In the opening weeks of 2006, NFDM has lost some stream and is currently trading at a price of $0.85/lb. At the current rate of milk production, with the balancing going to the skim powder market, the NASS price for NFDM could drop back to the support price of $0.80/lb by May 2006. Over the past year, the dry whey market moved in lockstep with the rising skim powder market, increasing from a low of $0.24/lb to the current high of $0.35+/lb. World supply and demand reporting for the international market suggests that this price may be the high for the coming year, with the price retreating back to the $0.30/lb level.

    Let's take a look at what is ahead for milk prices

    With milk cow numbers increasing, dairy slaughter low, and the energy prices siphoning disposable income from the consumer pocketbook, we can anticipate low milk prices over the next 12 months. Projected Federal Order 33 producer prices for 2006 are shown in Figure 1. With butter and cheese prices staying just above support price levels, the estimate for the 2006 Federal Order 33 mailbox price is $12.63/cwt. At the low Class III prices, the Milk Income Loss Contract (MILC) program will contribute another $0.60 to 0.80/cwt on eligible milk shipments.

    It remains to be seen what impact the Cooperative Working Together (CWT) program will have on these forecasts. The membership of CWT voted this past week to double the program's current $0.05/cwt assessment, in order to accumulate the additional financial resources necessary to address the surge in US milk production that is beginning to depress farm-level prices. The higher assessment will begin on July 1 and run through 2007. In addition to voting for a higher assessment, members also modified several other features. The regional safeguard levels in the northeast, southeast and midwest were raised. Whole milk powder (WMP) was added to the list of dairy products eligible for export bonuses, and Mexico, a major market for WMP, was added to the list of eligible destinations for WMP. The target price for cheese under the export assistance program was lowered from $1.40 to 1.30/lb. The target butter price remains at $1.30/lb.

    Figure 1. Federal Order 33 Mideast price information: 2000 to 2006 (estimate).1

    1Blend = Federal Order 33 Uniform or Blend Price ($/cwt), PPD = Federal Order 33 Producer Price Differential ($/cwt), MBPrice = Calculated Federal Order 33 Mailbox Price ($/cwt), and Year 1= 2000, 2 = 2001, etc.

    The 2006 prices are generated to be consistent with the CME Class 3 futures contract prices as of March 13, 2006. The producer price differential (PPD) and the mailbox price (MBPrice) for 2006 are estimates based on the average CME Class 3 futures price for 2006 and historical price averages for Federal Order 33. Consistent with the 2006 price, the 2006 MILC payment will average $0.59/cwt on a maximum of 2,400 cwt. For comparison, the MILC payment averaged $1.20/cwt in 2002 and $1.63/cwt in 2003, both years of low Federal Order 33 mailbox prices.

    Useful MILC web links

  3. Feed and Nutrient Pricing

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

    Commodity feed markets have been relatively flat for the last 6 months. Besides the usual seasonal trends for commodities, such as brewers grains and wheat middlings, commodity prices have remained relatively constant over the last semester. Consequently, the implicit prices of nutrients as calculated by the software SESAME have remained relatively constant and near their long-term averages (Table 1).

    Currently, there are great opportunities to reduce feeding costs through the judicious selection of ingredients to be included in the ration (Table 2). Ingredients that are currently trading well under their break-even prices are: bakery by-product, corn, corn silage, whole cottonseed, distillers dried grains, gluten feed, hominy, and wheat middlings. These are the current bargains. Feed ingredients trading significantly above their break-even prices are: alfalfa hay, beet pulp, canola meal, citrus pulp, meat and bone meal, molasses, soybean hulls, blood meal, and fishmeal. The use of these overpriced ingredients should currently be minimized.

    Milk prices have been dropping abruptly since the beginning of the year. The large increase in milk supply resulting from the increase in the size of the national herd (number of cows) compounded with substantial increases in cow productivity (lb/cow/day) have led to a 5.9% annual increase in milk supply during February 2006. Although the demand for milk and dairy products has been very strong, the markets cannot keep absorbing huge increases in supply without significant price adjustments. Milk prices have been relatively strong over the last 2 years. Dairy farm profitability has ranged from good to excellent over that period of time. Unless unforeseen events occur to curb milk supply, we can expect relatively low milk prices in the foreseeable future. As shown in Table 3, income over nutrient costs dropped by $1.71/cow/ day between November 2005 and March 2006. On most farms, this reduction equates to the average daily profit made on a lactating cow. Consequently, things are once again getting tough on our dairy farms.

    Table 1. Prices of nutrients, central Ohio.

    Nutrient name
    Net energy for lactation - 3X (NRC, 2001; $/Mcal)
    Rumen degradable protein ($/lb)
    Digestible-rumen undegradable protein ($/lb)
    Non-effective NDF ($/lb)
    Effective-NDF ($/lb)

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

    Table 2. Commodity assessment, Central Ohio, March 2006.

    Actual ($/ton)
    Predicted ($/ton)
    Lower limit ($/ton)
    Upper limit ($/ton)
    Alfalfa Hay, 44% NDF, 20% CP
    Bakery Byproduct Meal
    Beet Sugar Pulp, dried
    Brewers Grains, wet
    Canola Meal, mech. extracted


    Citrus Pulp, dried
    Corn Grain, ground dry
    Corn Silage, 32 to 38% DM
    Cottonseed Meal, 41% CP
    Cottonseed, whole w lint
    Distillers Dried Grains, w solubles
    Feathers Hydrolyzed Meal
    Gluten Feed, dry
    Gluten Meal, dry
    Meat Meal, rendered
    Molasses, sugarcane
    Soybean Hulls
    Soybean Meal, expeller
    Soybean Meal, solvent 44% CP
    Soybean Meal, solvent 48% CP
    Soybean Seeds, whole roasted
    Wheat Bran
    Wheat Middlings

    Table 3. Nutrient costs and income over nutrient costs, Central Ohio.1

    March 2006
    November 2005
    ------------------------------ $/cow/day --------------------------------
    Nutrient costs2











    Vitamins and minerals



    Milk gross income





    Other solids



    Income over nutrient costs

    1Costs and income for a 1400 lb cow producing 75 lb/day of milk, with 3.6% fat, 3.1% protein, and 5.9% other solids. Component prices are for Federal Order 33, August 2005.
    2NEL = Net energy for lactation, RDP = rumen degradable protein, RUP = rumen undegradable protein, ne-NDF = noneffective neutral detergent fiber, and e-NDF = effective neutral effective fiber.

  4. Spring Applications of Manure and Inorganic Fertilizer to Cool Season Grasses

    Drs. Robert Mullen, Mark Sulc, and Maurice Watson, School of Environmental and Natural Resources, OARDCDairy Nutrition Specialist, The Ohio State University 

    Fertilization of cool season grasses with either organic manure or inorganic, commercial fertilizer should be done to optimize the production system and meet your goals as a producer. The goal of this article is to provide some information on fertility management of cool season grasses.

    Pre-establishment fertilization

    Soil testing to determine soil nutrient status is the best way to quantify the amount of phosphorus (P) and potassium (K) you need to supply as a manager. With the cost of these inputs rising over the past few years, routine soil sampling should be utilized. Soil testing should be conducted the same way as we recommend for row crop production. Collect 15 to 25 random soil cores to a depth of 8 inches, make a composite sample, and submit it to a soil testing laboratory for analysis. Recommendations for fertilizer P and K based upon soil test levels are available online in the Ohio Agronomy Guide in the Forage Production chapter (http://ohioline.osu.edu/b472/0008.html).

    Ideally, P and K should be applied and incorporated prior to seeding based on the recommendation. A small amount of nitrogen (N) should also be supplied prior to planting, whether as commercial fertilizer or as manure to promote good stand establishment. The amount of N needed is around 30 lb/ acre. If you are supplying manure for N, remember that you are also supplying P and K, so make certain to quantify the amounts you are supplying. Knowing the amount of nutrients you are providing will ensure that they are not at a level that will limit production. Additional information on nutrient content of various manures can be found at: http://ohioline.osu.edu/b604/b604_15.html. Manure applied should be adequately incorporated into the soil, and seeding should not be done immediately after manure application. Seeding just after manure application (especially at high rates) can inhibit seed germination. Avoid gross over-application of both N and K (which includes manure), as they can lead to forage nutrient balance issues, especially early in the spring. Quick growth and excessive K uptake can decrease plant uptake of magnesium (Mg). Ruminant animals being fed this Mg deficient plant material can develop grass tetany. Dry cows being fed a forage high in K can develop milk fever.

    Maintaining an optimum soil pH for the grass you are growing is also important for stand longevity. Different grasses require different pH levels, so know where you need to be with soil pH. If soil pH is too low (acidic), lime can be applied to adjust soil pH to the optimum level. Ideally, lime should be applied well before seeding (preferably 6 months), but if you need to make an adjustment, make the application whenever possible. Make certain that the lime is adequately incorporated into the soil so that it can neutralize soil acidity as fast as possible.

    Fertilizing established stands

    Soil test information is the best guide for making fertilizer decisions on established stands. The recommendations for established stands are the same as they are for pre-establishment. When soil nutrient levels are above optimum, the timing of P and K application is not critical; it can be done anytime during the growing season. When soil test levels are below the optimum, split applications is the best way to supply needed nutrients. The recommended split is after the first cutting in the spring and after the final cutting in fall. This is especially true for K due to grass tetany and milk fever concerns. Care should be taken when utilizing manure as the nutrient source in the spring. Remember, manure not only supplies N, but it also supplies K, so applying manure to get the desired N response can lead to high K levels, which can represent risk to animals. In addition, avoid smothering the grass with an excessive manure application.

    Nitrogen application should also be split to ensure that N is available throughout the growing season. The current recommendation is that N be supplied at a rate to match yield potential and that the total N budget be split between N applied prior to green-up and after each cutting. Forty percent of the total budget should be applied prior to green-up in the spring and 30% of the budget should be applied after each cutting. Nitrogen recommendations for cool season grasses can be found in the Ohio Agronomy Guide in the Forage Production chapter (http://ohioline.osu.edu/b472/0008.html).

  5. Manure Storage and Land Application - Where are we going? How fast can we get there?

    Mr. Jon Rausch, Waste Management Extension Associate, The Ohio State University 

    In today's economic climate, manure nutrients have more value than ever. The cost of commercial nitrogen (N) is at an all time high and continuing to increase. Phosphorous (P) and potassium (K) are following this same trend. The demand for animal manure as a viable nutrient resource is once again being determined by economic forces. What has changed is the addition of environmental protection through regulations and the voice of society.

    Historically, animal manure has been spread very close to the animal production facility, resulting in soil nutrient levels in excess of plant requirements. As farm size, environmental concerns, and crop nutrient input cost increase, the need to move nutrients further has become more necessary and more economical.

    Water and air quality standards should drive the environmental requirements placed upon manure handling, storage, and nutrient recycling practices. Water quality impacts from land use activities are becoming more evident as restrictions to point source discharges become more stringent. This translates into increased scrutiny of non-point sources in an attempt to advance water quality improvements. These non-point sources primarily stem from land use activities, and the largest land owners have traditionally been rooted in agriculture.

    Air quality standards are looming on the horizon as research efforts begin and air quality issues play out in the scientific, policy, and public opinion arena. Gas, odor, and particulate emissions associated with the animal production facilities are the primary concerns relative to air quality. Air quality recommendations and regulations will most likely develop in much the same manner as today's water quality standards, but probably at a faster pace.

    Social acceptability of animal manure handling, storage, and nutrient recycling may be the largest unknown for many producers, especially as farm size increases. Finding a system that strikes a balance between the economic requirement for the farm and the need to mitigate environmental and social concerns will continue to be a significant challenge. Certainly, the costs of manure management will increase. These additional costs will have to be off-set by some source of revenue (cost reduction).

    One source is fully recycling manure nutrients on and off the farm. Efficient utilization of these nutrients can be used to reduce the out-of-pocket cost of purchasing commercial fertilizer or become a revenue source from the sale of these nutrients. Many animal operations have the potential to broker/sell manure nutrients and associated agronomic benefits. However, this typically requires more time and resources dedicated to the management of manure.

    Manure requires management to minimize adverse impacts to farm profitability, the environment, and neighbors. As crop production costs and the pressure from outside sources continue to increase, those individuals that find less costly alternatives will be more profitable. Animal manure may be one of these alternatives and as the demand for this commodity increases, the need to increase management will also increase. For example, to reap maximum return from manure may require minimizing the water content to concentrate the nutrients. Again, this may require more financial and human capital to provide a product that would demand such a premium.

    Manure management is different on every farm. For some, the sale of manure nutrients and "mining" excess nutrients currently available may be more economical than transporting manure further from the production site. For others, investing capital in nutrient segregation technologies, such as liquid-solid separation, may be more economic. Yet, others may find the addition of adsorbing organic sources will transform a relatively sloppy manure mix into a stackable and marketable commodity with the addition of financial and human capital. The speed at which producers move toward changing manure handling, storage, and application practices will be driven by economic, environmental, and social demands.

  6. 2005 Average Milk Production for Ohio Dairy Herds by Breed

    Dr. Maurice Eastridge, Extension Dairy Specialist, The Ohio State University

    The average production of milk, fat, and protein by breed for Ohio dairy herds in 2005 using the Dairy Herd Improvement (DHI) program are provided in the table below. Not all herds on DHI are included in the table below, given that some of the herds consist of other breeds than the ones shown and some herds have a mixture of breeds. Information about the programs provided by the DHI Cooperative, Inc. in Ohio is provided at: http://www.dhiohio.com.

    Number of Herds
    Milk (lb/lactation)
    Milk fat (%)
    Milk protein (%)
    Brown Swiss


  7. Appointment of New Extension Associate in Animal Welfare - Dr. Naomi Botheras

    Dr. Maurice Eastridge, Extension Dairy Specialist, The Ohio State University

    Beginning February 13, 2006, Dr. Naomi Botheras began in the position of Animal Welfare Program Specialist, Department of Animal Sciences, The Ohio State University. Her primary responsibilities will be in the development of professional programs for producer and youth education in the area of animal welfare, specifically related to dairy, swine, and poultry production. She will particularly be involved in the development and introduction of computer-based training packages for US food animal producers that target employee behavior. The training aims to improve animal welfare and productivity, and also job satisfaction and labor retention. These packages have been developed at the Australian Animal Welfare Science Centre, where Naomi has been based for the past 5 years.

    Naomi is originally from the state of Victoria, in Australia, and received a bachelor of science degree in zoology from The University of Melbourne in 2001 and has just completed a PhD degree in dairy cow behavior and welfare also from The University of Melbourne. She grew up on a beef and sheep farm about 2 hours from Melbourne and is actively involved in the management of the farm - well as much as she can be from the other side of the world! She has conducted research on swine and dairy cow behavior and welfare, and brings with her extensive experience and knowledge of animal behavior and welfare. Naomi is keen to get out and observe and learn about food animal production methods in the US, as most animals in Australia are managed outdoors all year round. She is also eager to work with farmers to introduce animal welfare as a positive concept, both for farm profitability and animal well-being.

    You can contact Naomi at: 222 Animal Sciences Building, 2029 Fyffe Court, Columbus, OH 43210, botheras.1@osu.edu, (614) 292-3776, FAX (614) 292-1515.

  8. 2006 Ohio Dairy Challenge Contest

    Dr. Maurice Eastridge, Extension Dairy Specialist, The Ohio State University

    The 2006 Ohio Dairy Challenge was held February 17-18 and was again sponsored by Cargill Animal Nutrition. The Dairy Challenge provides the opportunity for undergraduates at Ohio State University to experience the process of evaluating management practices on a dairy farm and to interact with representatives in the dairy industry. The program is held in a contest format whereby students are grouped into teams of 3 to 4 individuals, and the first place team received $800, the second place team $300, and the third place team $200 from Cargill Animal Nutrition. The farm selected for the contest this year was Assen Dairy LLC in London, OH, and it is owned by Pieter and Johannes Assen and their families. They have a herd of 670 Holstein cows that are housed in free stalls and are milked 3-times-a day in a double-24 herringbone parlor. The contest started by the students and the judges spending about 2 hours at the farm on Friday evening, assessing the strengths and weaknesses of the operation by interviewing the owners and examining the specific areas of the dairy facility. On Saturday, the teams spent 4 to 5 hours reviewing their notes and farm records to provide a summary of the strengths and opportunities for the operation in the format of a MS PowerPoint presentation. The students then had 20 minutes to present their results and 10 minutes for questions from the judges. The judges were Mr. Keith DiDonato (Cargill Animal Nutrition), Dr. Steve DeBruin (Veterinarian for Assen Dairy LLC; Feeder Creek Veterinary Services), Dr. Maurice Eastridge (Professor, Department of Animal Sciences, OSU), Dr. K. Larry Smith (Professor Emeritus, Department of Animal Sciences, OSU), and Dr. Richard Meiring (Clinical Assistant Professor, Department of Veterinary Preventive Medicine, OSU).

    The contest was very successful this year, with a record year for the number of participants. The students among the teams that participated were: Team #1 -Julie Fluharty, Melissa Gibbons, and Annette Rubeck; Team #2 - Jarred Converse, Tim Lamb, Kristen Meiers, and Kathleen Zann; Team #3 ( Third Place) - Greg Hartschuh, Bryan Hirschbach, Matt Jackson, and Dan Ziegler; Team #4 - Gina Berry, Alicia Kissell, Sheryn Schlairet, and Erin Stone; Team #5 - Craig Link, Daryl Pena, John Schroeder, and Eric Weitzel; Team #6 - Matt Hartlein, Dan Sanders, Zach Stammen, and Kyle Warvel; Team #7 (First Place) - Brian Hartschuh, Mike Klein, Michelle Lahmers, and Jason Nuhfer; Team #8 (Second Place) - Mary Beth Fulk, Anton Henry, Amy Sprunger, and Allison Stammen; and Team #9 - Becky Galioto, Stacey Moritz, Maureen O'Brien, and Amanda Todd. The top 4 individuals for the contest selected to potentially represent Ohio at the 2006 National Contest were Michelle Lahmers, Jason Nuhfer, Dan Sanders, and Amanda Todd. The awards banquet was held at the Buckeye Hall of Fame Café, where the students and judges were joined by Pieter Assen and his fiancé.

  9. 2006 Tri-State Dairy Nutrition Conference

    Dr. Maurice Eastridge, Extension Dairy Specialist, The Ohio State University 

    The 15th annual Tri-State Dairy Nutrition Conference (TSDNC) will be held April 25 & 26, 2006 at the Grand Wayne Center, Ft. Wayne, IN. The Grand Wayne Center is newly renovated with much more space than before.

    The objective of the Conference is to disseminate current information on the nutrition and 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 Conference is sponsored by The Ohio State, Michigan State, and Purdue Universities and allied industries. The registration fee is $130 per person (discounts are available for groups of 10 or more) and is due by April 7, 2006. Registration after the deadline and at the door 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 Monsanto. This program takes place from 8:00 am to 11:45 on April 25, with a complimentary breakfast buffet starting at 7:00 am. Registration for the TSDNC begins at 11:00 am on April 25, with the program starting at 12:50 pm. The Conference concludes at 12:30 PM on April 26. The themes this year are Nutrition and Animal Health; Ration Formulation and Forages; and Nutrition and the Environment.

    For additional information on the Conference or to register, contact Laurie Winkelman 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.