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Whether you’re a Bullvine reader in rural Ontario or a 5000 cow herd in California, you are affected by the image consumer’s have of milk as a food product. That means you’re subject to the same brand demands as Coca-Cola, Starbucks, and Dasani. Only those three companies may have bigger advertising budgets, and they intend to stay ahead of milk on the consumers first choice beverage radar. The names that have become iconic brands in the beverage industry didn’t get there overnight, and they are fighting an ongoing battle to maintain their position at the top of the heap. Do they ever screw up?  Yes!  Do they quit when they’re down?  Never!

“But” you say,” Everybody knows about milk!  There’s nothing new to brand!”  Well.  If that’s where your thoughts take you, then you have just guaranteed that you will be forever under the milk branding Blunder Dome.  (Read more: MILK MARKETING: HOW “GOT MILK?” BECAME “GOT LOST”) Milk is an excellent product.  Milk is a healthy product.  Unfortunately, neither of these attributes will guarantee that milk is the consumer’s first choice of beverage. Don’t try to hide your light under a dome – especially not under a blunder dome.

Salute the Power of Branding

You know that branding has worked when there is only one brand that you would consider using.  For me, all tissues are called “Kleenex.”  I only clean windows with “Windex”. For years, I made “Xerox” copies, regardless of what machine I was actually using to produce them.  Likewise, chap stick and aspirin have moved beyond product names to generic titles used for all similar products. Although I have no explanation for the ”X” factor in the first three examples, I readily admit that branding has influenced this consumer in a major way.

Now let’s look at milk branding, where we have a full range of examples to choose from.  On the one hand grocery aisle, consumers choose milk jugs (USA) or milk bags (Canada) with very little brand identification to choose between.  At the other extreme, our industry has enjoyed celebrity with branding campaigns such as “Got Milk?” and celebrity “Milk Moustaches”.

Wouldn’t it be wonderful if the dairy industry could milk this type of branding for all it’s worth?

Sorry, I find puns irresistible.  But seriously, I wish our dairy products were as in your face.  Before I further jeopardize my opportunity of writing for The Bullvine, let’s take a look at industry blunders, that could undermine dairy industry branding.

BLUNDER #1: Fear of What’s Next

It’s more than six years since Alltech sponsored “Bounce Back 2010” Symposium. This example was presented. “Think of it: There are two beverages. One is full of sugar; rots teeth can rust nails, causes obesity and has zero nutritional value. The other is full of calcium, full of protein, and is nature’s perfect food. The first one sells for $4.39 per gallon; nature’s perfect food for $2.69 per gallon.”

“Why is it we allowed this to happen?” Alltech President Pearse Lyons asked those at the Symposium. He went on, “The first beverage, Coca-Cola, even has the audacity to call itself the “real thing.” Coke has done a tremendous job of marketing itself to consumers and creating a brand image. Milk hasn’t.” Lyons concluded, “Guys, we have to brand our industry, we have to brand our ducts.”


When it comes to a choice of being under attack or being boring, some will deem boring to be acceptable. Being boring has very negative branding consequences that eventually affect all aspects of branding. Can anyone explain the milk marketing love of plastic? If we are trying to sell milk as a first choice beverage, we’ve got to move beyond the big plastic jug and the plastic bag. I am lucky enough to prepare school lunches for my grand-children. It is always a plus when the packaging encourages the selection of milk products, and I don’t have to fall back on, “it’s good for you” or “because I said so”. It is even more exciting when the choice is confirmed and gets eaten.  Milk drinks, yogurt drinks, and cheese, are quite often the first choices.  Remember when ice-cream occupied that dairy space all by itself? Even my five-year-old grand-daughter knows about calcium for healthy bones and teeth.  “Grandparents should drink milk.” And “Oh look we have new yogurt bottles!” I applaud the imagination that ties children’s drinks to containers, colors, and promotions that they can relate to.  It’s great to see more choices that relate to other age groups, including teenagers and seniors!

BLUNDER #3 Terrible Tag-Lines

The right slogan can go a long way toward making a brand memorable. Unfortunately, an awful tagline is also unforgettable. The rule with taglines and slogans is always to Keep It Simple Stupid (KISS).  That’s why “Got Milk” was perfect.  Unfortunately, it is all too easy to turn good intentions into bad taglines.  These three that I have personally penned should have been locked up forever:

“Our good breeding shows.”

“You need an udder drink.”


“We stand behind our cows!”

Yes, I suffer unresolved guilt over these, but I have enjoyed many hours googling “tag lines that failed” so I comfort myself in knowing that even big companies can fall on their branding faces.

One example, although not a beverage, does come from the food industry. In the early 1980s, Wendy’s Old-Fashioned Hamburgers was struggling to differentiate itself from its competitors. At the time, they had this quickly forgotten tagline: “You’re Wendy’s Kind of People.”  I am sure some of us can remember the year 1984 for the introduction of Wendy’s unforgettable octogenarian, Clara Peller, who vaulted Wendy to the top with the catchphrases, “Where’s the Beef?” Now that’s tagline branding the goes from terrible to terrific in three words.

So do your best and then relax.  If you’re trying to improve, you’re in good company.

Blunder #4 Flying Under the Radar

Thinking that it’s a good idea to keep under the radar is a horrific branding blunder.  Modern day families are under every kind of pressure as they fight, and often lose, in searching for work-life balance. The dairy industry can ensure that milk is present at the touch points of everyday life.  Milk at home.  Milk in food establishments, Milk in schools, churches, and community centers.  Failure to promote milk at the benchmark experiences of home and family life represent a failed opportunity for the positive branding of milk. Even if the national industry struggles to do this, we can do our part in our local communities. Milk sponsorships not only celebrates a food product but showcases it with the best parts of community life. Play them up.  Share some milk.  Take every opportunity to let people know why you are passionate about the dairy industry.

BLUNDER #5 Leaving Milk Alone!

One of the biggest mistakes we make is the one of trying to isolate ourselves from competition.  Seriously? Do you have one item menus? We aren’t in competition with the entire food industry.  We are in competition with other beverages. You know what I’m talking about.  We are missing an opportunity if we don’t find perfect partners for the perfect beverage we produce. Milk is a natural for partnerships.  Milk and cookies.  Cheese and Pizza.  Milk and Cake, Pies, etc., etc., etc.  Which partner to choose?  What do you drink milk with?  “If you can’t beat ‘em join ‘em.” is the way to pull the dairy industry out from under the blunder-dome.

Fortunately, in the U.S. DMI (Dairy Management Inc.) is more than six years into partnerships with Domino’s Pizza, McDonald’s and others. We need to move beyond milk as a commodity and promote its value-added role in the value of specific menu items.  Beyond the perfect partnership of taste, it’s time to publicize the move to more nutritional choices.  The big brands are doing it! Let’s bring milk to the table!


At the end of the day, you might tell me that someone else (bigger, bolder or higher up the food chain) is responsible for the branding of milk.  You could be right, but an industry rides on the shoulders of those who produce the product.  We can all do our bit to turn branding blunders into positive branding. Here are five ways to turn blunders around.

  1. Brand Milk FEARLESSLY: Never fear mistakes. Milk branding is all about action.
  2. MILK is EXCITING: Share the milk “WOW” factor whenever you can.
  3. PUT a TAG on MILK: Find a way to put your passion for milk into words.
  4. MILK the CROWDS: Put milk on the table wherever people gather.
  5. FIND MILK PARTNERS: Find great partnerships so that when people think of certain foods, they automatically think of milk too!

The Bullvine Bottom Line

Branding milk is important. But as any good marketer knows, you have to connect with consumers and speak their language.  Let’s not seek so much industry protection that we close ourselves off from success.  It’s time to move beyond Blunder-Dome and continually re-commit to positive branding for the dairy industry.



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Categories : Dairy Industry

Looking Beyond The Dairy Horizon

Thursday, April 21st, 2016

It is hard to look beyond the horizon when a grass fire is approaching your farm buildings. The pressure of the moment keeps us narrowly focused on what is current. That’s where dairy breeders are at today. The cows who are being milked today were conceived in a time of more positive margins in dairying than exists in 2016. However, if they plan to be in business in 2025, they have to widen their perspective. Today’s successes were built on decisions made years ago. Breeders must always be looking into the future when it comes to planning for the cows that they will need to be milking in their herds in three generations. The best advice is – “Don’t look back, you’re not going that way”. So let’s look to dairying in 2025. It is only nine years away.

Global Predictions

The November 2015 World Agricultural Supply and Demand Estimates report predicts ‘Global demand for food and agricultural products is expected to grow until 2025. Crop production will fall a bit, but the outlook for livestock production looks promising’. Farm gate milk prices are forecasted to increase especially from 2020 forward.

In 2015, the distribution of the global human population was 60% Asia, 15% Africa, 14% America (North & South) and 11% Europe. Add to that fact, 83% of the global population growth between now and 2025 will occur in developing countries of which Asia has a high proportion. In developing countries, the population is younger and in most cases there is an expanding middle class both of which will result in the higher consumption of dairy products.

Economic growth on a global basis is forecast to be 3.1% (developing countries 4.7% and developed countries 2.0%) until 2025 slightly below the long-term trend prior to the 2008 financial crisis. The range in economic growth will be Europe 1.8%, North America 2.5%, South America 2.6%, Middle East 4.0%, Asia & Oceania 4.3% (including China 5.3% and India 8.1%) and Africa 4.5%. However, percent growth must also consider the global GDP share by regions: Asia & Oceania 30%, Europe 29%, North America 25%, South America 8%, Middle East 4% and Africa 3%. Dairying should fare well from Asia’s growth potential and its relative global position in share of GDP.

All of this is positive news for dairying. However, that does also mean that there will need to be changes required at the farm level, as we’ll address later.

USDA Predictions

To better understand what is ahead for dairying details contained in the recently released USDA Long-Term Projections – February 2016 gives numbers that dairy farmers can understand and use as they plan for 2025.
Table 1: USDA Dairy Cattle Related Predictions*

Number of Cows (Millions)9.319.319.35
Milk per Cow (Pounds)22,88024,76027,405
US Milk Production (Billion pounds)213230256
Price - all milk (USA$)16.3917.2119.91
Corn (Million acres planted)889088
Corn ($ per bushel)3.653.713.75
Soybeans (Million acres planted)838281
Soybeans ($ per bushel)8.919.059.29
Milk Fat Basis

* Data source – USDA Long-Term Projections – Februrary 2016

A few predictions are noteworthy:

  • Cow numbers will remain constant
  • Production per cow and total national production will increase 20% by 2025. That’s over +2% per year. To achieve the production figure cows, on average, will need to be milked 3x.
  • Corn and soybean acres and prices per bushel will not change over the period
  • Domestic disposal of milk will increase 18% 2016 to 2025, so the USA will need to export more milk products.
  • Export of milk products have decreased in 2016 to 9 billion pounds, due to lower milk prices. However, exports but will return in 2020 to their 2014 level of 12 billion and increase to 14 billion pounds by 2025, when export will be 5.5% of production.
  • Not shown in the table – bovine meat prices are expected in 2025 to be 80% of current prices, number of dairy farmers will decrease at an increasing rate, and average US herd size could average 425 cows by 2025.

Situation 2025

Even though milk producers in many countries are currently stressed because of a perfect storm, 2025 looks promising provided they take steps to adapt their operations. The 2015-2016 perfect storm of EU quota is disappearing, a Russian embargo, China and India production increasing and the USA and NZ producers are not adjusting for the production to demand imbalance, all of which are not likely to occur again any time soon.
Milk producers in planning for 2025 should consider the following:

  • Technology
    • New technology will need to be put in place to achieve year upon year cow production increases of 2% in production. It goes without saying that technology requires more output per cow and cows per herd to be justifiable.
    • With low-cost labor disappearing in many countries, automated systems will need to be purchased.
    • On-farm management expertise will require both training and application of computerized systems. Decision-making ability and accuracy of decisions will need to be increased.
    • State-of-the-art social media will be significantly advanced from today and will become a “must use” by dairy people.
  • Output Per Farm
    • Since 1925 (when milking machines came on the scene) cows per worker has doubled every twenty-five years to where in 2025 there will 80 milk cows plus their replacement per worker.
    • Milk shipped per worker in 2025 will need to be 170% of what it is today (2016). In respect to production efficiency, dairy farming is no different from any other industry. It must always move forward.
  • Trade and Milk
    • Currently 9% of the global milk production crosses country borders. At one time, not too long ago, it was 4%. It will likely remain in the 9% range until 2025.
    • Trade Agreements are here to stay and will impact milk prices more in the future than they have in the past. Once signed all trade agreement clauses must be adhered to.
    • Expect that the agricultural policy of other countries will impact dairying in your country. It is difficult enough to compete today with producers in other countries but having to compete when a foreign government stimulates milk production, or limits imports can be impossible.
    • Currency exchange rates have a significant impact on the amount of trade and business success.
  • Revenue Generation
    • Milk producers will need to plan more for their revenue in the future than they have in the past. That could include doing their on-farm processing and selling or by joining in selling coops with other producers to ensure their incomes. Few producers can survive when they are an island onto themselves.
    • Producers have learned in 2015 -2016 that farm gate milk price stability is job #1. Cost control, although significant, ranks second to revenue generation.
    • Revenue generation from the sale of cull animals or a secondary dairy beef enterprise is not predicted to increase 2016 to 2025.
  • Consumer Demands
    • Verified high-quality safe milk will no longer be taken as a given by consumers. Eventually, producers everywhere will have to be able to verify the quality, safety and production techniques of their milk. Inferior milk will not be allowed to cross borders.
    • The corner has been turned, and low-fat milk will be discounted in price at the farm gate. Butter is back.
    • Milk that is 4.5%F and 3.1%P will give the fat needed without there being excess (unwanted) skim milk powder.

Other trends will continue. One sure thing is that the rate of change will be faster and faster with time.

What Has This Got to Do with Breeding?

The genetic merit or make-up of the 2025 cows will need to be enhanced from today. Here are a few areas:

  • Ratio Fat %: Protein % will need to be expanded from 3.9%F: 3.1%P to 4.5%F to 3.1%P.
  • Selection needs to be to maximize fat and protein yields from minimal milk volume
  • The day of the disposable cow needs to be over (5 not 2.5 lactations per cow are needed)
  • Higher pregnancy rates will be necessary (1.5 not 2.5 average services per-conception)
  • DMI from 80% forage diets needs to increase
  • Cows must be technology friendly and require minimal labor
  • Selection needs to start for resistance to production-limiting and other diseases
  • Selection for a host of new traits will be possible (Read more: Will Genetic Evaluations Go Private?)

The Bullvine recommends that breeders use commercially available mating programs where various breeding program scenarios can be run before semen is purchased. The scenarios studied should consider both programs that depend on revenue from both a) 90+% from milk sales and b) 65% milk and 25% breeding stock sales. Of course on all farm 10% of revenue comes from other sources including culled cows and calves for veal.

The Bullvine Bottom Line

Granted there will always be dairy farmers that have a niche situation, and therefore, they will not be impacted in the same way as the wider population. The norm in 2025 will not be the same in every country. But there is no going back. Change will occur at an ever increasing rate. An objective plan and sound daily enterprise management will be a necessity for all who plan to be dairy farmers beyond the horizon of 2025.



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Categories : Dairy Industry

The Winds of Change Are Blowing…Hard

Monday, January 11th, 2016

Services in the dairy cattle improvement industry have been gradually expanding since WW II. Three main areas have fueled that growth: (1) program participation levels; (2) usage of top sires; and (3) the evolving uses made of data. Almost every dairy producing country in the world has developed an industry organization infrastructure involving breeds, milk recording, artificial insemination, and genetic evaluation centers.

Yet, today in 2016, breeders can be divided into two groups – those who think the industry organization infrastructure of the past will continue to evolve and those who feel that significant industry organization infrastructure changes are necessary. Which of those two groups are you supporting or leading?

Current Model Livestock Improvement Model

The dairy cattle improvement industry that we have today has been built on person-to-person service that involves mandatory third party verification. These services usually include fees that are 60% – 70% used for employee wages and travel. Official registration certificates, official independent animal evaluators, official third party DHI supervisors, breed, approved A.I. technicians, …. almost everything depends on service by human hands and authentication by human eyes.

Well, that must be overseen by authorities approach is wearing thin on breeders who are required to pay for those costs. It is especially irritating to milk production focused breeders. We hear more and more breeders questioning their associations, co-ops, and societies on the reasons for having services that they no longer need and are not willing to pay for or subsidize such as registration certificates, breed marketing, hard copy print and magazines, field and club officer staff, A.I. arm service and DHI supervisor visits. For many breeders these services already considered as practices from the past.

In the future, improvement services must be based on ease, accuracy, need for the information and contribution to decision-making. A business approach for all services must prevail.

Past Growth Industry Growth

In the twentieth century investment from outside agriculture often fueled dairy improvement industry growth.  Herds like Montvic, Curtis, Carnation, Romandale and Hanover Hill in North America purchased top animals for their herds, thereby giving the initial owners financial reward for their efforts. It goes beyond that. Thousands of animals were shipped from Europe and North America to new homes abroad. That continues today but to a much lesser extent as some regions in Asia are still building their dairy herds.

Revenue from animals and semen exported, in the past, built new at both the farm and the industry levels.

Times Have Changed

The farm business model where significant revenue must come from off-farm animal and genetic sales is under considerable pressure. Well, in fact, seed stock sales are already a thing of the past for the majority of breeders in most countries. Revenue from springing heifer sales now barely covers the cost of raising them (Read more: Who Killed The Market For Good Dairy Cattle? and Is There Still Going To Be A Market For Purebred Dairy Cattle In 10 Years?). Animal improvement service providers counting on breeders garnering added off-farm income because of their services are in for big time wake-up calls. Animal and herd improvement services must return increased on-farm profit if breeders are expected to continue usage of them.

Tomorrow’s Realities for Services

There will be fast-paced advancement in all aspects of dairying. Improvement services and industry organization infrastructure will need to adjust to:

  • Big Data, where alliances between service providers exist for benefit of all
  • More in-depth DNA analysis for many more traits
  • Gene Editing where the best or new bovine genes will be prominent in breeds (Read more: Gene Editing – Is It The End of Dairy Breeding?)
  • Data captured totally by computers, cameras, drones and other on-farm equipment
  • Data source labeling for user awareness (eliminating the need for third-party verification)
  • Expanded data for wellness, disease, immunity, environment, nutrition and reproduction
  • 24-7 animal monitoring from birth to departure from the herd (24-7 means complete accuracy)
  • Consumers requiring verified nutrient content along with healthy and safe milk products
  • Additional service providers with new technologies
  • …. and much more

Possibilities for Future Infrastructure

Each year the world is a smaller place, and the pace of change is speeding up for dairy cattle improvements as it is for all aspects of our lives.  Services must be based on needs, not tradition. Here are a few ideas, challenges and opportunities that organizations will have before them as it relates to animal improvement organization infrastructure.

  • Global animal identification, parentage verification, and animal movement
  • Global dairy cattle databases for improvement services including research and development
  • International protocols for DNA analysis and indexing as well as for gene editing
  • Alliances between cooperatives and private companies for content and uses of animal information
  • Moving from total control by one organization to shared control and availability of services and data by multiple organizations
  • Disconnecting from current partners that are not prepared to change their operations and/or services
  • Organizations with proprietary services conducting traditional improvement services (i.e. genetic evaluations and linking genetic indexes to proprietary service data.)
  • Application of new technologies to reduce organization overhead costs and program service fees
  • ….. and many more

Leadership For Change

Breeders in cooperatives need to elect directors that have relevance, vision, leadership and communication skills. We’ve always done it that way or only following what was successful for a previous generation of breeders will not cut it anymore. Agents for change within and between organizations need to be supported by Boards, staff, and breeders.

What will it mean for YOU?

Depending on who you are (breeder, organization director, organization administrator, developer of new services, …., etc.) changes in industry organization infrastructure could range from very little effect to meaning a big deal for you. If you are a leader, you will be faced with or have the opportunity to lead fast-paced advancement on how organizations work with each other.

Will Our Current Dairy Improvement Infra-Structure Crumble?

No.     If long-term vision, cooperation and a what’s best for breeders’ approach are applied by organizations.

Yes.    If the procrastinators, control or don’t change breeders or organizations rule the day.

The Bullvine Bottom Line

For certainty, it is a matter of not if, but when changes in the dairy cattle improvement industry organization infrastructure occur. Attitude to advancement will shape the future for both breeders and their organizations. Breeders will need state-of-the-art animal and herd improvement services. The vision and actions of breeder and industry leaders are critical. Advancement will occur even if current organizations do not adopt and adapt the future technologies and systems.



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Categories : Dairy Industry

From farmgate to retail shelves there are numerous interconnected factors that are required to function properly together to produce the milk that eventually makes it into our homes.

Immigrant Labor could trigger a chain reaction

Like many other important steps in dairy production, labor is one piece that, if affected, has a corresponding impact on all the other pieces. There are concerns ranging from sourcing dairy labour from immigrants to documentation, to wages to political implications. A major concern relates to what would happen if immigrant labor was completely taken away. An updated survey called for by the National Milk Producers Federation and produced by Texas AgriLife Research at Texas A&M University,  predicts serious repercussions if there was to be a loss of immigrant labor on American dairy farms.

Report Findings (Year)

The report shows that of the 150,418 employees working on U.S. dairy farms in 2013, 51 percent of them, or 76,968, were immigrants.  The conclusion drawn by researchers is that losing these workers would double retail milk prices at a total cost to the U.S.  of more than $32 billion dollars. The report suggests that loss of immigrant labour would raise the price of a gallon of milk which sold for $3.37 in June to a whopping $6.40. On top of this — at the other end of the chain … it could also cause the loss of one-in-six dairy farms. (Read more: Losing Immigrant Workers on Dairy Farms Would Nearly Double Retail Milk Prices)

Rising Numbers of Immigrant Labor

Since an original survey of immigrant labor was done in 2009, there has been significant changes in the numbers of immigrants working on dairy farms.  The updated survey shows an increase of 20,000 immigrant workers (35%) in the intervening six years and 27% more of the milk supply coming from farms with immigrant labor.

Beyond the basic statistics, there is concern over documented and undocumented foreign-born workers.

Eighty percent of those who responded to the survey have concerns about immigration raids or unemployment audits due to their lack of confidence in immigrant worker’s employment documents.

Misconceptions about Immigrant Labor

Some believe that immigrants take jobs away from Americans.  According to NMPF’s board chairperson and Missouri dairy farmer Randy Mooney, this is simply not true.  He explains that the average hourly wages offered are  $11.54 and thus are well above the minimum wage of $7.25. Nevertheless even with the three plus dollar increased wage, dairy farmers have been unsuccessful in getting Americans to do these jobs.

The Domino Effect of Failure to Act On Immigration Reform

Not having a reliable, current labor force means an inability to ensure an effective future workforce. Likewise, researchers explain that milk sales also support many more jobs beyond the farm than on the farm. In Canada, the phrase “Milkle-Down Affect” ( ) has been coined to raise discussion on how dairying affects not only the local community but has much wider impacts.  The immediate loss would be from the fact that there would be 76,968 fewer people working on dairy farms. A total loss of immigrant labor on dairy farms would also mean the loss of jobs outside the farm. What is often overlooked is the loss of jobs related to dairying. Those kinds of jobs add up to a loss totaling 131,240 jobs. Almost 200,000 jobs and the numbers keep mounting!

There would also be repercussions beyond the obviously reduced farm milk sales. Losses would be incurred because of the reduced purchasing power, not only of dairy farms but now from the unemployed workers. As well, the lost sales would extend beyond the farm to businesses that support dairy farms, such as feed and equipment dealer, veterinarians, and feed suppliers. . In the bigger dairy picture, there would be an estimated loss of 25% of the national dairy herd and national milk production.  More than 7,000 farms would close

Immigrant Labor is a Hot-Button Election Issue

Discerning observers of the dairy industry feel that Congress urgently needs to address this issue.  Comprehensive immigration reform is necessary for dairy operations to adequately meet their labor requirements. Jim Mulhern, who is the NMPF President and Chief Executive Officer, points out, “Farms that rely on hired foreign workers need their current labor force as well as an effective program to ensure an adequate future workforce.” He warns that the dangers don’t stop at a reduced workforce. “The lack of a reliable source of workers is causing farmers to second-guess decisions to expand,” he said. “That’s economic activity that’s lost to both rural and urban communities — all because Washington won’t act on immigration reform.”

A Catch 22 Situation

This is definitely a problem that needs to be faced with proper action.  It would be wrong, however, if the action taken had negative repercussions for every stakeholder involved.

  1. Dairy farmers need a labor pool to draw upon.
  2. Current immigrant workers rely on the income they are earning.
  3. American workers need to be encouraged to work in agriculture.
  4. Dairy consumers have the right to reasonably priced access to healthy milk products.
  5. It seems that we are coming pretty close to throwing out the baby with the bathwater. The simple solution of throwing out immigrant labor could mean the end of one-in-six dairy farms.

Solving labor problems needs a multi-pronged approach if the solution is going to be effective.

The Bullvine Bottom Line

Sometimes we become complacent in North America because we don’t appear to have the challenges that our dairy peers in the UK and Europe have (see “Cheap Milk Flooding the Grocery Aisles”).  However, while the root causes of disruption may differ, the result could be the same – an irreparably damaged dairy industry.



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Categories : Dairy Industry

Cheap Milk Is Flooding The Grocery Aisles

Wednesday, October 14th, 2015

Who wins when a price war erupts between competing products?  In the case of water and milk in Europe and the UK, the 5% lower store prices for milk may be great for consumers but the 20% loss at the farm gate is terrible for farmers.

Too Much of a Good Thing

Currently, there is so much milk available in Europe that it is selling cheaper than water. Several conditions have caused this milk surplus led by anything that contributes to rising supply and falling demand.

Too Much Milk Production.

Removal of milk production quotas on EU farms marked the opening of the milk floodgates. For the first time in 30 years, farmers were able to produce as much as they wanted.  However, it contributed to oversupply.  Quotas were originally instituted to prevent overproduction of milk and butter that had happened in the eighties. Quotas set limits on production and established penalties for overproduction.  When they were lifted, it was hoped that it would allow European dairy farmers to compete for business in emerging markets, such as in Asia

Not Enough Demand.

Falling milk demand from China, the Middle East and North Africa was not anticipated and adds even further to the over-supply.

Not Enough Exports.

Forget “From Russia with Love”.  In 2014, the Russian food embargo cut butter 24% and cheese import 32% into that country. This continues to have a tremendous impact.

Too Much Price Competition in Supermarkets.

All of the above are further aggravated in the UK by supermarket price wars.

The Worst that Can Happen?  Now Milk is Cheaper than Water!

In England, a bottle of water costs roughly $1.50.  In France, mineral water costs $1.  That’s not new you say.  What is new is that, with the 20% fall in wholesale milk prices, a liter or milk might be selling for just $1.

Milk Slump Escalates Protests from Push to Shove

With the oversupply of milk depressing the sale price to milk producers, farmers are increasingly agitated with the losses they are shouldering. Milk is selling for less than what it costs to produce it In the UK protests have taken place ranging from clearing grocery shelves to throwing fruit and, in one instance, parading cows through a supermarket.  In Brussels farmers, there took matters into their frustrated hands by throwing eggs, hay and fireworks at riot police.

Calls for Relief

Along with the emotional reaction, there have been more reasoned appeals for relief. The British National Union is calling for supermarkets to increase prices to match production costs. With hopes of getting prices returned to an economically viable level, the European Milk Board is calling for the return of production quotas. President of the Milk Board, Romuald Schnaber, sums it up succinctly, “Unless production is reduced, the market will continue deteriorating at a pace.

Where are Governments in These Bad News and The Good News Scenarios?

Proactive support for the dairy industry has been called for and pledges proposed and started.  The EU is offering $555 million, and France put 600 million euros in place in July. If there is a silver lining in this dark scenario, it’s that new and old milk lovers are enjoying the cheap milk prices. Hopefully, increased consumption will continue and help to grow the market and produce more stable future prices at the dairy farm gate.

Who is telling the Whole Milk Truth?

Back in January 2015 Rob Lyons (Spiked) argued that “Milk is not cheaper than water.” The premise he supports this counter headline position with is that “From booze to petrol, water is the scaremongers’ comparison of choice.” Lyons appears to question that no milk could be cheaper than the water that is free when falling from the skies or coming out of taps.  He asks, somewhat naively, after pointing out that milk is indeed cheaper on shelves than the nearby bottled water on the same shelves “And is this having a knock-on effect on the price received by producers?” You think?

Desperate Dairies

Some dairy spokespersons claim that the slashed prices have left UK dairy farmers facing poverty and financial ruin.  None can continue selling for 10 pence less per litre of milk than it costs to produce it.  If you work it out on the basis of an average of 2,500 litres produced daily, it is easy to see how desperate the situation has become. According to the National Farmers Union, approximately 200 dairy producers have left the industry since January.

What is the Answer?

In truth, there are no easy answers that can satisfy everyone affected by the cheap prices being paid for milk.  Who has the most to win?  The producer?  The distributor?  The consumer?  As long as they all compete with each other and fail to find a workable compromise, there is a very real danger that the question of winning will become irrelevant.

The Bullvine Bottom Line

It’s not about short-term wins. From farm gate to grocery aisle, for any of the stakeholders to benefit, there has to be a viable and sustainable dairy industry.   




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Wednesday, July 1st, 2015

After a wonderful weekend at my sister’s guest house in northern Ontario, I returned to the Bullvine refreshed, rejuvenated and enlightened.  While there, I thoroughly enjoyed one of those sessions that can only occur when four adult women have their feet up in a gorgeous garden with favorite food and beverage at hand — I discovered that it’s possible that I have control issues.  What?  As much as I tried to steer (or control) the conversation, I had to finally admit that, despite my sense of adventure, I do like to know what’s happening, when it’s happening and why.  Each visitor that joined us was told of my surprise at the label and, having known me and my family for many years, they unanimously laughed out loud.  So I smiled and made a note to look into this later!

I also smiled when I returned home and the first email I opened was from Andrew who asked me to write something humorous to wrap up introduce the month of July, national celebrations and summer holidays on the Bullvine.  Obviously here was someone who knows the inner me.  So… I went to my desk. Opened my computer and checked the recurring list for the 29th of the month which read– “#1. Laugh out loud!” Trust me — the milk I had been enjoying with my breakfast splashed out my nose and all over my papers. There at the top of the page was the name of my daily list, “Control Journal!” I kid you not.  I have had this list for many, many years and yet, when confronted by my mother, sister and niece, I found the idea of “control”, when applied to me, somewhat hard to admit.  However, in honor of happiness inspired by a new month and a new perspective, I am ready to raise a glass and confess all.

“My Name is Karen.  I have a drinking problem.”

Let’s set the scene by admitting that my drinking problem starts with my husband.  Murray –definitely drinks too much … milk.  Far too often my kids and I have caught him at the Dairy Queen!

I over indulge too.  We try to hide it but family members often smell chocolate milk on our breath. The neighbours are beginning to suspect. Our blue box overflows with empties.

I remember that for me it started with my grandmother. She had great ideas for recycling stuff for crafts. We had chandeliers from milk bottles.  Place mats from braided plastic milk bags.  I loved her and quickly realized that somebody had to drink the milk in order to get those empties.  No wonder I too grew to look to milk containers and dairies for creativity. At my High School Prom the ceiling decorations were tin foil streamers left from making the lids for glass bottles!

For Murray it’s all about supporting the dairy industry.  Is it stealing if he pockets the creamers from fast food restaurants and buffets?  Or is a grandfather supporting the small motor skills of his grandchildren as they learn to take the foil off of the creamers.  For all he knows, it might be keeping him from losing his own dexterity!

“The Milk Stops Here!” 

Our kids have been aware of the family problem and, in their own way, have done everything to stop the trend from spreading uncontrollably. Two of our three offspring have married lactose intolerant partners.

Of course, I can stop any time that I want to!”

It wouldn’t be easy but I could do it. However sometimes when I reflect back on all the milk I drink, I feel proud.   I look into that cloudy empty glass and think about the dairy farmers and dairy cows in the alleys, barns and milking lines.  I think of all their hopes and dreams. If I didn’t drink this milk, they might all be turned out to pasture.  No work. Their dreams would be shattered.   Then I say to myself, “It is better that I drink this milk and let their dreams come true than be selfish and worry about quitting.”

“Milk has left its mark on our family!”

Even though we are getting further away from actually producing milk, our children and grandchildren still recognize their dairy heritage.  Maybe it will be better for them.  When our children were little the milk came fresh from the barn.  Sometimes too fresh.  When they complained about being teased at school, I urged them to adapt.  Explain the benefits of dairy living.  You can call it, “Show and Smell!”

Some families say, “Hello.  How are you?”  We say, “Got milk?” 

There were early hints that I would be attracted to a milk producer.  Even though my father moved off the dairy farm when I was born, our house was decorated with milk cans, milk bottles, and milk crate shelving units that reminded him of his milk producing youth.  One of the best home movies was created on one trip to the islands which gobbled an entire reel as he battled with the coconut that would not yield the milk he sought. Needless to say, he was unusual in his preference for milk.  He loved Bailey’s Irish Cream …. Without the cream!

“Our mom always cried over spilled milk!”

Milk creates strong bones but doesn’t necessarily create the ability to prevent spills.  The old saying goes don’t cry over spilled milk but I remember one time when the problem went way beyond spilled milk. Uncle Mortimer was somewhat creative in his dairy farming.  He loved milk but he didn’t like that the milk fresh out of the udder was hot. So he came up with the idea of keeping his milking gloves in the freezer overnight. The first – and last– time he tried his, the cow shivered uncontrollably.  She kicked the bucket …. And so did my uncle Mortimer. That was one time we ALL cried over spilled milk!

“Not all our family milk stories are bad.”

Cousin Billy Bob’s mother cured everything with Milk of Magnesia. She got quite a bit of attention, by whipping out her blue bottle to help every situation.  One day Billy-Bob was reading a book when he should have been taking the milkers off. By the time he got his mind back to his job, the cow was so upset she kicked him.  Aunt Milly found little Billy-Bob knocked out cold.  He doesn’t actually remember what happened, however, unlike Uncle Mortimer, he survived to milk another day.  He loves to steal Aunt Milly’s thunder and often entertains with s his “milk of amnesia” story!  Unfortunately that family’s love of fresh milk must be cutting into their profits. What other reason would they have for posting this sign in the milking parlor, “NO DRINKING DURING MILKING HOURS?”

“The Psychological implications of Milk Mania”

For some of our family being crazy about milk has been shortened to just being crazy.  How else can we explain our moo-d swings?  When I was young, my imaginary playmate was a calf.  They had to take me to a psychiatrist to have me de-calfinated.  The same thing happened to my cousin Molly (she called herself Molly-Moo). She spend so much time in the fields trying not to think about cows, she starting thinking she was a horse. Now she doesn’t know if she’s been cured or if she is milk dud. Either way, she’s an udder failure!

“Our family stands up for milk!” 

We never know where the next milk joke will come from but we are all ready to recognize dairy comedians.  After the more we laugh, the less time we will have to drink milk.  Some comedians have one liners, we have milk liners.  We don’t drive the punch line, we milk it for all it’s worth!

The Bullvine Bottom Line

Without question, for our family at least, the greatest historical breakthrough came when someone saw milk coming from a cow’s udder and asked, “Why don’t we drink that?” Oh, I grant you that the wheel was also a fine invention, but the wheel does not go nearly as well with cookies. My name is Karen and I am a heavy milker! See you at the Milk Bar!



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Categories : Dairy Industry

It doesn’t matter what industry your business is in, you have probably encountered misperceptions about what you do or what you sell. The problem with misconceptions is that they can be hard to shake. Just like an urban legend, they become beliefs that are assumed to be facts.

Dairy month is a good time for us, as an industry, to consider the stereotypes and misconceptions that affect the dairy industry.  A recent discussion on the Milk House started with the question “What is the biggest misperception that you think consumers have about the dairy industry?” The lively discussion that followed highlighted several misperceptions and even noted some responses that could be helpful. The following list is in no particular order.

#10. “Organic Is Better Than Traditional Milk”

Response: Everyone is promoting what makes their product different.  Consumers are aware of this and look for points to help them choose between products. Says Seth Snook, When organic producers claim no antibiotics no hormones, etc. it is not intended to hurt the conventional producer but the implication that our products are tainted is damaging.

#9. “All Large Dairy Farms are Bad”

Misperceptions are not always outside of an industry.  For example, even those with hands on in dairying are influenced by the good and bad experiences they have been exposed to.  Some, like Dave Puppe, are disappointed by the growth and changes in the industry which leaves them feeling that all large farms are equally bad.

Response:  Painting all big farms with the same brush is playing with the same fire that consumers play with when it comes to farms and livestock in general. It’s safe to say that not all small 40 cow dairies are ethical, and not all big farms are factories. Sloane Michelle Sanders further clarifies her point, The general public seems convinced that every farm that has a free stall/parlor environment over a tie stall/pasture set up is abusive. I’ve seen cows flourish in both settings. Look at Luck-E. Kandie hangs out in the free stalls and still looks perfect.

Response: Cliff Shearer gives this definitive answer. In some ways all farms are ‘factory’ farms and no farms are factory farms. They are all factory farms in the sense that in a contained area ‘ factory ‘ they take a raw product ‘ animal food ‘ and produce a marketable product ‘ milk, beef, eggs, etc. ‘ which is basically how every factory on the planet works. However, none of them are factories because they all deal with animals which makes them into Farms a different thing. No factories are farms because they don’t have livestock, but no farms are factories. To call any farm a factory is misleading – you may as well say General Motors is a farm. Its just yet another word used by ignorant people to try and devalue what farmers do. I don’t think you can call intensive pig and poultry farms factories – they are still farms – just different systems of farming. Even a 20,000 cow farm is still a farm.

Response: Ashley Elizabeth Morin weighed in with this considered response. I would think of a factory as machines producing a product. The work, dedication, time, and effort we put into our livelihoods are what make it a farm. It’s generations of families working together from the past to present to leave an even better tomorrow for our children to carry on. I don’t think the almond milk CEO goes to the factory in the middle of the night because there is a glitch in the system.

You will find the farmer out in the barn, no matter the hour, pulling a calf, iv-ing a cow… the list never stops. That’s the difference to me: the amount of dedication and love it takes to do this every day. It’s not for the faint of heart.

#8. “Dairy Farmers Mistreat Their Animals”

Response: The cows are what make me money, so there’s no way I could ever abuse them.  I think that goes for most dairies in general.  The truth is when prices are down, and cuts have to be made, cows still get fed better than me. Always will.” Noting other aspects of animal care, Mark Yeazel and Amber Kilgour report that people are surprised that the cows are not only registered but have names and are recognized by their spots. All respondents agree, “That we couldn’t care less about our animals really makes us angry!”

#7. “Dairy Farmers Are Hands-Off of Everything Except the Profits”

Supporting this position, Dave Puppe declares “I’ve experienced both the smaller and the mega size….the bigger it is, the less respect for the animal….it turns into a factory and the less hands on debate over large farms, Puppe conceded slightly, “I see your point but confining that many cows to concrete and milking them to death is unnatural and wrong……” To which Sanders responds.

Response:  Milking them to death? Define milking them to death because as far as I can tell, most farms only milk 2 or 3 times a day, regardless of size. I’ve also heard of several smaller herds who never let their cows out of their tie stalls EVER for fear of them hurting themselves. They are in the more-desired (to some) setting, and yet they never see pasture either. There’s good and bad to each. 

Sloane Michelle Sanders responds with her personal experience.

Response: I worked for a farm that milked 1,000 cows. The owner is involved in every single operation on that farm. Every single day, he’s out with the team he’s hired, and can frequently be found out in the barn cutting out cows, pushing them up to the parlor, and on occasion lending an extra set of hands in the parlor.

#6. “Dairies Heartlessly Separate Cows from Calves at Birth”

When non-dairy observers question taking calves from the cow at birth, some dairy managers make the effort of explaining how it is for the good for the health of both mother and calf. In humanizing the event, the general public overlooks the potential for the environment and other animals to pass germs on to the newborn.

#5. ”Dairy Farms Pollute the Water”

The biggest misconception in NZ is that all dairy farmers are filthy rich and also are polluters of the waterways. There is a phrase often trotted out in the media “Dirty Dairying” which means farmers who pollute the water. The belief is that we make so much money that we don’t care about the water or the environment. The truth is that we are most closely watched of all industries in the country, and any pollution is quickly picked up and harshly dealt with. And yes most farm owners [who have worked bloody hard for many decades] are asset rich but we are almost all cash poor. We don’t get our money till we retire.”

Patty Traxler reported a situation regarding an ironic turn of events. “Here in the land of 10,000 lakes as farmers it makes applying manure even more challenging! We have lake people monitoring us all the time which pushes us to do an excellent job. But when the county got a grant to check septic systems of the area 86% of lake homes failed! They now have to put a pipe in to move the waste to a nearby city costing each home hooking up $40,000 or so!!!”

#4. “Dairy Farmers are Rich!”

Since milk is so expensive in the store, consumers assume dairy farmers must be rich.  This misperception was on many lists – some were amused — some wished it was so. Regardless, what farmers get paid is assumed to be making them rich.

#3. “Twice a day Milking” and “Lots of Holidays”

Some who joined the discussion noted that the public thinks “That we simply milk the cows twice a day… And that’s it.” Mark Yeazel’s has experienced this mistaken viewpoint, “You milk with robots, what do you do with all your free time now?” Some were surprised to hear that dairy farmers have vacations, “We have holidays?” Daniel Drummond described dairy farming in a non-holiday framework:” 24/7 on call…..ass to the fire….full bore. Try living with a rocket strapped to your back called debt…..but forget about it when you come in the house and see your kids. Bless the farmer, they need all the help they can get.”

#2. “Women Don’t Do Much on the Dairy Farm”

Dairy women are also misrepresented in the minds of those who don’t know and think “Women don’t do much on the farm. Or that every female farmer is a ‘farm wife’.” Ashley Elizabeth Morin notes, “I’m the farm girl, and my fiancée is the farm wife.” Melynda Naples also pointed out that “Often the female is “the farmer”.  It would make a fascinating article (and statistical study) to see the numbers comparing woman who do the dairying while the husband works off the farm.

#1. “Dairy Farmers are Dumb”

Mark DeBoer and Sam Kenney listed the misperception about farmers being considered dumb.

Kirt Sloan added that some people feel, “Anybody can do it! The truth is that it’s a very complex business with animals, people, and nature… is a calling of maximum intestinal fortitude. And I am grateful to work in this industry.” Michael Steele also notes this misconception is out there and adds. “The truth is that most Americans are 4, 5, 6 generations from the farm, we have to do a better job of educating the public.” On that subject, Patty Traxler shared her experiences.” I spend a lot of time educating kids and the public; I want people to see that I am college educated, that I take amazing care of my animals, that they aren’t just a number, that I can be a great mom & a great farmer, and that I work hard to produce an incredible product for the world!!”

The Bullvine Bottom Line

Thanks to everyone who took the opportunity to share their experiences.  Being heard is really what fighting misperceptions is all about! That … and not being buried in a pile of misinformation!



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Australia misses its quota prices

Monday, April 27th, 2015

Much has been written about what goes on in the market free-zone of the southern hemisphere.

The truth in 2015 is that unless the farms have no mortgage, private price contracts with niche companies or no paid staff, Australian producers are as exposed as any other nation’s to low milk prices.

It is hard to generalise on the producer’s position in the world’s third-biggest milk exporting country, because of its size and diversity. The state of Victoria produces 66% of the country’s total milk production (and 86% of the country’s export milk). So it is Victoria that gives the most complete focus to what the bulk of Australia’s dairy farmers face up to every day.

Most Australian dairy herds are challenged by extreme heat at some point of the season. Photo: Sheila Sundborg.

Most Australian dairy herds are challenged by extreme heat at some point of the season. Photo: Sheila Sundborg.

Australia is the driest continent in the world. Its farmers deal with extreme heat in the summer, and water is expensive and often restricted by the government. With heat also comes the risk of fire — and critical management decisions for animal safety and welfare. Floods are also more common that many would expect — both in the tropical parts of the nation and in other areas.

Most herds stand under sprinklers before and after milkings to ease summer temperatures that can reach regularly reach 45 degrees Celsius (113 degrees Fahrenheit). Photo: Sheila Sundborg.

Most herds stand under sprinklers before and after milkings to ease summer temperatures that can reach regularly reach 45 degrees Celsius (113 degrees Fahrenheit). Photo: Sheila Sundborg.

In short, it’s an extreme climate that is home to volatile milk pricing.

And Australia has become a target for foreign investments hunting milk — encouraged by Australia’s Foreign Investment Review Board regulations (FIRB), which are only triggered by the sale of Australian companies whose assets exceed A$231 million (US$176.67).

Canadian milk processor Saputo, spent more than half a billion Aussie dollars (US$382) early last year, to acquire 87.92% of Australia’s oldest surviving dairy company, Warrnambool Cheese & Butter Factory Co Ltd (WCB).

Cynics could argue they were not necessarily buying access to the Asian market (given that Vancouver is closer to Beijing than Warrnambool) and that they were, in fact, perhaps buying access to the world’s cheapest milk.

Australia’s genetics are competitive on the world stage, with North American embryo sales now well established. And the world’s best families are represented throughout the country. Here are two Golden Dreams from the Sid daughter of O’Kalibra.

Australia’s genetics are competitive on the world stage, with North American embryo sales now well established. And the world’s best families are represented throughout the country. Here are two Golden Dreams from the Sid daughter of O’Kalibra.

Most processors paying 40-45c/litre

LAND MASS: 7.7 million sq km
POPULATION: 22 million
IN PERSPECTIVE: Australia is the planet’s sixth largest country after Russia, Canada, China, the USA and Brazil. It is the world’s largest island and the only one of the largest six nations that is completely surrounded by water. Roughly 20% is desert so it’s hardly surprising that it’s the world’s driest continent.
MILK PRODUCTION: 9.2 billion litres of milk

Most of the major milk processors in Victoria are currently paying around 40-45 Aussie cents a litre (0.31-0.34 US cents), which is the cost of production per litre on most farms — without factoring in a return on investment.

Players pulling the strings include the milk processors and two supermarkets, Coles and Woolworths, who between them have a 72.5% market share of Australia’s grocery sector. None seem too interested in the farmers’ financial struggles.

A milk processor can change the game in the blink of an eye – as Parmalat did at the start of February.

Without warning, it sent an email stripping 23 cents/kgMS (kilogram of milk solids), that’s 18 US cents, off some of its suppliers, leaving mid-season prices at A$6.09, or 47c/litre (US$4.66, US$0.36). And it closed its door to step-ups — which are price rise opportunities — for the rest of the year.

However, it didn’t touch the price for many of its New South Wales suppliers. The price inequality between states and regions (at the discretion of the processers) has long been a bone of contention for producers, regardless of whether milk is being used for manufacturing (export) or for the fresh milk market.

And sadly, sudden price cuts have become routine.

One of Parmalat’s producers, Lloyd and Cathy Chesworth, of Willette Holsteins, said the decision would cost them A$90,000 (US$68,830) this season on a 700-cow herd producing seven million litres.

Lloyd, 66, said, “We had all but ordered an activity system for the cows [to monitor heat and herd health]. As soon as we read that email, we changed our mind.

“When you lose $90,000 in a season without doing anything wrong, it knocks the system. The Australia dollar is down 30% compared to last year and world milk prices are down too. It’s doesn’t make sense, and I think they’re being opportunistic at our expense.”

= In summer, much of Australia has no pasture in the wake of tougher water restrictions.

In summer, much of Australia has no pasture in the wake of tougher water restrictions.

Numbers horrify 

Nutritionist and dairy farmer Andrew “Ange” Angelino, of the Dairy Business Centre, agrees. He has been heavily involved in the industry for more than two decades. He advises many of the best operators in the country, and has deep and credible knowledge of the costs and the margins in both Australia and New Zealand.

“The supermarkets are screwing us without any doubt, and the government is not stepping up to stop it.” – Andrew “Ange” Angelino.

He also operates Kentgrove South, a dairy farm at Mt Schank in South Australia, which this season will milk 700 cows — down from 850 because of low milk prices. In addition, he also owns shares in other dairy farms that milk, in total, about 2200 cows.

He paints an ugly picture of Australia’s future dairy industry unless things change. He says rising core costs on-farm — coupled with milk prices that can drop harder and faster than aeroplanes in heavy turbulence — are taking their toll on this generation, and scarring the next.

Ange says producers need higher and more reliable margins against what nature throws at them, and, more importantly, to encourage their children to get involved.

Tasmania is Australia’s most natural milk-making climate; it’s separated from mainland Australia by 240km of sea.

Tasmania is Australia’s most natural milk-making climate; it’s separated from mainland Australia by 240km of sea.

No happy farmers

SIZE: 268,680 sq km
POPULATION: 4 million
IN PERSPECTIVE: New Zealand is the size of Colorado. New Zealand’s two main components are the North Island and the South Island, separated by Cook Strait. For a small country, it packs a punch. It’s the world’s biggest producer of dairy products, aided by its near-perfect climate for dairy farming.
MILK PRODUCTION: 20.7 billion litres of milk

I can’t sit here and say I know a happy farmer in Australia at the moment,” he said. “Why is it food around the world is a similar price, if not cheaper than in Australia, but the gap between the price of food in Australia and its farmers is bigger? What is happening to our margin.

“The supermarkets are screwing us without any doubt, and the government is not stepping up to stop it. We were supposed to be flying high when more than 50% of our milk production was being used domestically. It’s now at 60% and we’re still done over.”

“Australians have to feed 3.5kg of grain a day, just to get the same value out of their grass as a Kiwi [New Zealand] farmer feeding no grain.” – Andrew “Ange” Angelino

Ange said in the past five years, his farm’s power bill had lifted from A$70,000 (US$53,535) a year to A$220,000 (US$168,255) — backed down to A$160,000 (US$122,370) after a forthright “chat” with the power company. The hourly rate of contractors used for specialist repairs and maintenance had lifted from A$50/hour (US$38) to A$120/hour (US$92/hr) in some cases.

“They charge like doctors, and may as well arrive in an ambulance when you factor in their travelling,” he quipped.

He said staff costs were also debilitating.

“In Australia we battle to get anyone to work for less than A$50,000 to A$60,000 [US$38,240-$45,890], and you often have to follow them around all day because they don’t know what they’re doing,” Ange said.

“We hear about all these seminars about how to farm more efficiently or how to cut costs. We’ve done all that for years. We are among the most efficient producers in the world now — how about we have a conference about revenue raising?”

Australia’s National Holstein Show (International Dairy Week) held each January is the largest dairy show in the Southern Hemisphere. (See 2015 Results here)

Australia and NZ trail the world on payday

Ange said he wasn’t surprised that Australian and NZ producers are also at the wrong end of the deal when he lined up global farm-gate milk prices on an independent website.

Australia is routinely 30-40% behind its EU and US counterparts. Farmers in China are paid 2.5 times more, and Canadians receive almost double Australia’s price for their milk.

“And what really annoyed me about that, was that the prices were factored last year when NZ was paid the highest prices it had ever seen,” Ange said. “And they were still three Euro cents a litre behind the EU. And once you convert that through the exchange rate, they were six to seven cents a litre behind the EU. Again, that’s on the back of the best price New Zealand had ever seen.”

Ange says generally Australia has the world’s cheapest milk and the core (daily) running costs of pasture-based farmers he assessed eight years ago were A$1250 (US$956) a cow. It meant that they were covering their costs once the cows produced 4000 litres/cow (on a 32c/litre payment, which is US$0.24).

A re-assessment of those numbers in today’s market reveals that core costs have risen to $1800-$2000 (US$1375-$1530) a cow. So, to cover the costs (on pasture) at 4000 litres per cow, producers now needed 46 cents a litre (US$0.35), just to achieve par.

“And in the last eight years, farmers have seen 46 cents a litre just once. How do you think everyone went at 36 cents [US$0.28] two years ago?” he asked rhetorically.

Australian farmers have access to much cheaper land than in NZ. But NZ’s dairy producers do not have to compete against mining for its government’s attention. Consequently, it also enjoys markedly more respect as an industry. It also has the power to slow the country if its farmers are not spending.

Searching for the positives, Ange dug deep. The best he could find was that Australia was “a nice spot to live”, and that milk was mostly produced from pasture, and therefore the protein in the ration for the southern hemisphere was relatively cheap.

“If cows can get most of their protein from grass, their producers are a long way ahead of the game. And one day the world will wake up and realise that pasture-based farming does produce a better product … but that’s another story for another day.

“NZ can do that even better because their climate and grass quality is also better. In the TMR [total mixed ration] world, high-production herd rations are generally corn based, which has no protein. So there is subsequently a high requirement for protein and usually they have to feed 7-8kg soya bean meal to keep the ration in balance.

“Imagine if soya bean meal when to $600-$700/tonne [US$460-$535]. It is almost undoable financially. We [Australia] have to be careful not to over-complicate our ration to the point we are that reliant on buying protein.”

China buying up

Ange said increasing sales of Australia’s agricultural land to Chinese buyers did not bother him.

“I hope they [China] buy it all. Many Australians don’t care. The government doesn’t care — why should we? It would be good if the gap between domestic and export was swallowed up, because then we would have more power against the supermarkets, as they do in NZ, and they would have to negotiate with us.

“Wouldn’t it be nice to tell Mr Supermarket, ‘you can go and buy milk powder from China and bring it back here [Australia] and add chlorinated water to it and try and sell it as fresh milk’, because that’s all generic $1/litre [US$0.76] of milk should be. Ask British farmers how they feel at the moment?”

Some of Australia’s top show cattle could easily compete at the worlds largest shows like World Dairy Expo in the US or The Royal in Canada.

World needs quota

Ange’s summation cuts to the core of what Canada faces right now.

“The whole world needs some sort of quota in my opinion,” he said.

“The world needs more milk, we can do it, but we need to get paid for it. I believe we need more control over supply and demand for this type of industry.

“I look at Canada and at 82 cents [A$0.86] a litre (to the farmer) the Canadian consumer doesn’t complain. They know they have a farmer making money and the town he supports is making money. I’m not sure if Coles and Woolworths have taken over every town in Canada, but weren’t regional centres good when everyone went to the butcher for their meat, the baker for their bread and the pub for their beer?

“That’s when towns were vibrant. I drove through Girgarre and Stanhope on the way to Rochester [in northern Victoria] recently and it was a wake-up call to see the buildings that were shut and the general lack of energy in the community.

“These towns are all located in the heart of Australia’s dairying country and they are struggling. These towns were hit hard by prolonged drought and water restrictions, but there’s more going on now.”



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Categories : Dairy Industry

UK Milk Prices – The Twenty Years War

Monday, April 6th, 2015

The old maxim, “Divide and conquer” has been the successful strategy of war lords over the centuries. The same applies today in business and a prime example of how to devalue a national business model; destroy an industry and put thousands of small business “to the sword” was the result of the abolition of the UK Milk Marketing Boards in October 1994.

Almost twenty years ago, UK producers were receiving the same price as today, 24pence-per-litre (ppl) and the industry was on an upward trend. Farmers were making a profit and this in turn allowed reinvestment, expansion and modernisation of plant and equipment. Over the past year, milk prices have dropped from 34ppl to 24ppl and below. Costs have increased for feed, labour and equipment and loans were secured on the premise of a viable return on investment.

As every dairy producer knows, stability is the key to a business model that depends on a long-term investment, requiring a three year lead-in before a unit of production (a cow) starts to repay the investment on her semen and rearing costs. The old adage that it takes three lactations for an animal to pay for her replacement (under “normal” business financial situations it takes all the profit from two lactations – that is why genetics is important) takes a “hit” as milk prices tumble due to market volatility.

Milk Marketing Board

UK dairy farming in the 1930s was extremely volatile as producers loaded milk churns on to trains without the assurance of being paid. Many producers did not receive payment, due to an unscrupulous system and if the milk was not needed, it was sent back. Farmers were at the mercy of the individual dairies. In order to establish a fair and coherent system, the British Government established the Milk Marketing Board (MMB) system for England and Wales as well as, separate Boards for Scotland and Northern Ireland.

The 1933 government statute changed the fortunes of dairy farming. The MMB effectively became the first buyer of milk; but most importantly, became the buyer of last resort. The establishment of the Board guaranteed a minimum price for the dairy farmer, based on agreed price formulae. The system provided stability – in an unstable world – and the Board was heralded as the greatest commercial enterprise ever launched by British farmers.

The system proved successful and capable of withstanding the instability of the markets. The collective strength (remember: divide and conquer) provided a negotiation position and a pricing system that secured the liquid market price – from the instability of milk sold for manufacture. And the Board therefore provided a system of dealing with an extremely perishable product; especially in the days before refrigeration.

Parliamentary Business: House of Commons report. “The MMBs were established to resist downward pressure on producer incomes resulting from the increasing power of the dairy companies.”

The power of the MMB increased over the decades and employed over 7,000 people across its various sections including the establishment of an AI industry off-shoot, which subsequently evolved into Genus. However, the Board system had its detractors and although far from perfect, was seen by its critics at the time, as being monolithic, out of touch with the modern business world and the MMB being self-sustaining in terms of its own interests.

The Thatcher Years

There is an old saying, “If it isn’t broke- don’t fix it.” However, EU dogma and political ideology reared its ugly head as Thatcher doctrine decided that the system that had served the industry well for 60 years; should be abolished. The mantra of “deregulation” and privatisation was part of the Thatcher Government ideology.

Milk producers did not agreed with the political ideology and voted 99.9% to maintain the MMB system. Despite the overwhelming vote, Thatcher abolished the MMB in October 1994 in England, Wales and Scotland and in Northern Ireland in February 1995. As a result, thousands of dairy farmers were subsequently ruined and this in turn created the rise of division; and supermarket power.

At the time of the abolition of the MMB, there was an estimated 30,000 producers in England and Wales. Fast forward 20 years, and that figure is 10,000 or less. In December 2014, an estimated 16 dairy farmers per week were leaving the industry. For some, enough was enough.


Farmers supplying Arla, one of the UK and Europe’s largest food retailers, suffered a reduction of 1.63ppl for December 2014 milk production.  Arla suppliers subsequently received a generous early Christmas present on December 23rd with the further announcement of a 2.03ppl reduction effective, 5th January 2015. The timing was perfect and some cynics would consider deliberate, with the announcement aimed at limiting producer hostility and adverse press reaction over the Christmas recess.

Another UK and European retail giant, Muller, cut its price by 1.2ppl from 10th January and Dairy Crest, the UK milk processor, announced a 1.2ppl reduction from 1st February. In a game of milk price-cut poker, First Milk, a 100% UK farmer-owned cooperative played its New Year double-hand, by announcing a milk price of 20p-per-litre from February 2015; cutting 1.6ppl to 20.1ppl for liquid pool supply, and 2.43p reduction to 20.47ppl for manufacturing.

A few days later, First Milk declared it was delaying milk cheque payments to producers by a further two weeks – the delay expecting to cause further producer chaos. The company cited a cash-flow problem for the delay albeit farmers suffering more financial pain. First Milk suppliers have incurred a minimum 12ppl drop in ten months from April 2014.

After 80 years, UK dairy farmers are once again at the mercy of dairies, processors and the supermarkets; the latter discounting milk as a “loss-leader” in order to entice consumers into their shopping aisles. The ongoing supermarket price war continues to undermine the dairy industry rather than underpin its stability, structure and long-term future.

The MMB pricing structure provided a simple solution to milk pricing and included increases for milk quality and hygiene. The dilemma facing farmers today is confounded by having approximately 50 different milk price payment structures and tied-in contracts to their buyers. Furthermore, if a farmer leaves his current buyer; there is no guarantee another buyer will purchase the milk.

According to official UK Government sources (Defra) post deregulation: “There are 130 milk purchasers and 100 processors. 65% of household consumption of liquid milk and 80% of dairy products are sold primarily through the major supermarkets.”


Many farmers considered the “bad old days” of the 1930s had long surpassed but that has not been the case. Volatility returned in 2012, when Rock Dairies went into administration leaving 22 regional milk producers without an outlet for their future daily production. The business had supplied thousands of shops, super-markets and businesses throughout the north of England.

Rock Dairies financial collapse caused a furore amongst its former suppliers that were left without payment for milk produced in January and February 2012. Today, the furore extends to thousands of milk producers who are suffering a collapse in prices without a positive end in sight.


Michael Howie from the award winning Morwick herd in Northumberland, England

Like many, Michael Howie from the award winning Morwick herd in Northumberland, England, is currently receiving a January milk price of 24.9ppl – well below the cost of winter production. Twenty years on from deregulation he says, “None of this would have happened if the MMB had remained functional. We no longer have a safety-net. There is too much milk being produced – and quotas are set to be abolished in April 2015.”

The UK has produced 10% more milk over the past year and this has not helped the situation. Although the UK remains 80% self-sufficient in milk production, the dairies blame the global-market for the price decline. The old “supply and demand” rule of economics has reared its ugly head with devastating consequences. China, the world’s largest importer of milk reduced imports by over 50% in the first six months of 2014.

Russia, the third largest importer banned dairy imports from the EU in August 2014 in retaliation for the sanctions imposed by the EU following Russian involvement in the Ukraine and Crimea. UK dairy farmers are clearly facing tough challenges according to Andrew Suddes, Senior Consultant with Promar International.

In an exclusive interview for The Bullvine, he said: “Promar expect this trend to continue into autumn 2015. In addition, the Russian ban on imported dairy products is due to end in August 2015 and this may release some of the pressure in the market. Dairy farmers currently face prices that are below the cost of production and long-term, this is unsustainable. The situation will have an inevitable impact on farm businesses and associated supply industries.”

However, Mr Suddes advises farmers to plan ahead. “Farm businesses need to plan carefully to manage in the short and medium term. This will involve a detailed understanding of their cost structure and potentially, a proposal to their business bankers. So far, banks have expressed sympathy with businesses in the dairy sector, but producers will require a detailed and coherent plan to get through what will inevitably be a testing period,” he states.


During the past 20 years, due to quotas and the MMB being abolished, the number of milk producers in England and Wales has declined by over two-thirds; although due to herd expansion, cow numbers have remained fairly stable. This global trend is set to continue – although those dairy farmers that have recently increased herd size and invested in the long-term future, face severe challenges.

Businesses will encounter, possibly for the first time in a generation, increasing losses due to economies of scale. Huge investment and large-scale expansion coupled with calls for greater levels of efficiency; have therefore perpetuated small profits on a pence-per-litre basis multiplied by volume production; and became the de-facto business model. The reverse has happened with ever increasing pence-per-litre losses multiplied by large volumes of production.

Several UK producers, who voluntarily terminated their supply contracts during 2014 with their existing dairies, at a time when the milk price dropped from 34ppl to 28ppl, have subsequently not found a new “home” for their milk with alternate dairy companies. These farmers are currently receiving 20ppl on the “spot” market with some producers rumoured to be receiving spot prices of 16ppl.

Political ideology is legitimised by actions of the state; and in a democratic world the wishes of 99.9% of UK farmers not to abolish the MMB system would, and should have, prevailed. Canada currently provides domestic food security, consumer price affordability and milk production business investment, through its provincial Milk Boards and Federal Regulation supply management system.

Inevitably, one day – calls and policies will be aired regarding the dismantling of a system, considered by some within the production community as well as, international exporters of dairy products, as being far from perfect, but a system that provides – and balances, price stability and market supply – within an unstable global marketplace.

There are many lessons to be learned for milk producers around the world from what is occurring in the UK. Within Canada, such dissension will lead to yet another “Divide and conquer” scenario. Beware: “The enemy is at the farm gate” as well as, from within.


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A “Global” Twist on “Eat Local”

Monday, March 16th, 2015

With two of our three children living outside of Canada, we have been a sounding board for the challenges of trying to eat locally, when you have emigrated from your native country.  For those who went to the US, the changes were small …. Missing Smarties and Tim Horton’s.  Moving to The Netherlands meant not only new and different food, but unrecognizable labels and a foreign language to navigate. Easily recognized brands no longer pointed the way to the ingredients required for home cooking or favorite comfort foods.

This kind of international adaptation is no longer the exception to the rule as the next generations build their career histories and experienced dairy people expand their resumes with jobs farther afield.  Today most who started out on a dairy farm in a small, somewhat isolated rural village have had the opportunity to travel, study and consult in countries beyond the borders of their homeland. This ever moving, international consumer segment, affects everything, not the least of which is producing dairy products to meet local tastes.

Impact of Immigration on North American Food Markets

Most of the North American population growth of the past 20 years is due to immigration. Canada’s annual growth rate in 2011/2012 (+1.1%) exceeded that of other industrialized countries including the United States (+0.7%), Italy (+0.3%) and France (+0.5%). This growth represents a new and growing segment of the food consuming market and opportunities for dairy producers. In the US sales directly from the farm can adapt products more easily than in Canada where increasing the supply managed market means growing a consumer segment. Taking a closer look at the Canadian immigration situation shows that since 2001 most of Canada’s population growth was due to immigration. In 2011, it accounted for 67 percent, according to Statistics Canada, which projects that growth could rely almost entirely on immigration in the future. By 2017, the agency projects one out of every five people could be a visible minority. This raises the question, “How do immigrants fit into or even have the opportunity to buy into the “buy local” proposition?

What’s Missing in Local Markets? How to Find the Taste of Home?

It’s human nature to look for what’s familiar. Amid change, stress and the daily demands of work and family, everyone seeks the comfort of food that is familiar.  While young children in a new country may adapt more quickly to eating the same as their contemporaries, research shows that parents “want something that tastes like home.” If they can’t find those familiar dairy products, their diet switches away from dairy.

Who’s Got Milk?

From the dairy production side, the problem basically comes down to the fact that, without a consumer for the dairy products we produce, the industry is not sustainable. Overlooking the dairy preferences of the immigrant market is short-sighted in planning for the next generation of dairy producers. While great strides are made in genetics, genomics, and dairy management, it will all be pointless if there is no one drinking milk. And yet the questions must be asked, “Who lobbies for milk consumption?” (Read more:  MILK MARKETING: How “Got Milk?” BECAME “Got Lost” and “Got Milk” is becoming “Got More”)

Ethnic Specialist Finds Markets Could Be Hiding in Plain Sight

Sometimes the markets are not as far away or as difficult to supply as we might imagine. Nissim Avraham is an Israeli-born ethnic market specialist for the Dairy Farmers of Ontario (DFO). You might ask, “What is an ethnic market specialist?” Basically, Avraham looks for markets – some hiding in plain sight — in Canada’s immigrant population. While working on a project for his M.B.A. at the University of Guelph, his research looked into demand for dairy products for the Middle Eastern community in the Toronto area. Following a presentation to Canadian dairy farmers the first question was, “Why don’t they make their own?” For Avraham, the answer was to point out that there was an enormous opportunity there. “At the time, the Middle Eastern opportunity had a value of 10 million liters (4 million lbs.) of milk in the Toronto area alone.”  From this opening dialog, Avraham got an interview with DFO, and a new job focused on filling demand for the eleven Middle Eastern, South Asian and Chinese populations in Ontario. Today, he’s a popular guy throughout the Canadian provinces, and his successful practices in Ontario are being replicated elsewhere.

Lost in Translation of the Supermarket Aisle

It could be as simple as an added sign or label. Living in a country where every food product has both French and English (explanations), it doesn’t seem problematic to me to let a particular consuming segment clearly understand the dairy products being offered. However, as my immigrant children will tell you, it can be frustrating and time-consuming to try to find products you want in a foreign, to you, supermarket. Looking for familiar dairy products could make a quick shopping trip into a morning or afternoon of hide and seek. One such example is Paneer.

“We have newcomers from Asia shopping for the first time looking for Paneer. They’re vegetarians who drink full-fat milk, eat yogurt, want a higher-fat butter, and would consume nearly double the dairy products in a year that a native North American would. They couldn’t find Paneer in the market, except a cheap version.” Avraham points out that “Paneer is actually pressed ricotta.” Avraham helped an Italian cheesemaker create and label a more traditional Paneer, which quickly took 30% market share in those markets.

Since that first big success, the calls just keep coming. Avraham now consults with dairy processors in other Canadian provinces,  convincing them that rather than making another version of an existing product, they can go after a market already waiting for them.

Targeting, not Changing, Ethnic Markets

Avraham thinks targeting ethnic markets with specific products is something more countries should look into, including the United States.  “Sure, I can advertise a mozzarella or cheddar to different ethnic groups,” Avraham said. “But why would you go there? You think you’re going to change 5,000 years of Chinese tradition? It’s the first generation that we can target with these products.

Certification Clarity

While it may be difficult to find the familiar, it is also challenging when moving to a new culture to find foods that are important to different religions. When the requirements are understood, labels with particular types of certifications provide a shortcut for consumers who would otherwise have to read an often-complicated ingredient list to see whether they can consume products to conform to their religious preferences. Both sides experienced a learning curve. Processors were not familiar with Halal certification, but Avraham describes it as “Kosher-light”, meaning if you fit Kosher certification — a designation many Ontario processors were already comfortable with — you also fit Halal.

Trade Hurdles

Avraham knows Canadian processors who have orders for their ethnic products in the U.S. However, between exporting tariffs and the higher cost of Canadian milk, trying to fill that market from north of the U.S. border is nearly impossible. Of course, it means that there is potential waiting to be realized by American dairy entrepreneurs who merely have to tap into local ethnic demand.

Niche Markets

Developing markets is something of a Catch 22 situation.  Do you invest millions of dollars in developing a new product?  Millions of dollars converting generations of taste buds to an unfamiliar product. Or take the small step route of modifying products to be more aligned with the new immigrant locals.  In the latter case, there is already identifiable models to build from…the popularity is guaranteed. The challenge is making the match that “tastes like home”. While these modified niche markets will never be huge, they do represent an opportunity.  In the Canadian supply management program, it represent more milk that can be made by dairy farmers.

Growing Local Markets

The 62-year old specialist, Nissim Avraham, has been tagged as the ethnic market milkman.  A more fitting title might be market matchmaker, as he brings together distributors, eager to buy, with processors, who need a little coaching in product presentation. Success stories continue to grow:

  • With Avraham’s encouragement, Ontario processors are now making butter ghee, a type of clarified butter; lassi, a fruit-flavoured yogurt drink; and dahi yogurt, a market that has grown from 200,000 to more than two million litres per year.
  • There are now about 25 Ontario cheese and yogurt makers with halal certification.

2.2% Growth

In Ontario, products that Avraham helped introduce are now worth 2.2% of the market.  Not huge. But a start.  It’s the incremental growth that says it’s worthwhile in the modern dairy market. The hardest part is having the decision makers recognize the opportunity.

The Bullvine Bottom Line – Eating locally!  Together!!

Regardless of the culture you were born in, trading recipes and eating homegrown and locally grown foods is not only healthy but also an excellent way to build community. Shopping, sharing and eating together creates connections that are good for everyone involved. We may not recognize the opportunities an ethnic market specialist points out but, if the dairy industry doesn’t open itself up to these new markets, we could go from “Got Milk!” to “Not Milk!”


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Categories : Dairy Industry

Dairying Breeding in 2025

Monday, December 1st, 2014

Almost weekly, there are news updates on what dairying will be like in the next quarter year or the next year.  Just recently, there have been some significant alarms surrounding the farm gate milk price in the immediate future. Supply will exceed demand, and the milk price has already dropped to below the cost of production for UK dairymen. In the United States, the farm gate prices will be lower in 2015 than they have been in 2014. Yet in Australia, according to a leading A.I. manager, the strong demand for Australia milk in SE Asia could continue to keep the farm gate price level.

However, strategic planning on dairy farms and in dairy cattle breeding must look much further into the future than 3 to 24 months. We here at the Bullvine decided to consider global circumstances that will determine the genetics that will be needed in 2025 in order to assist breeders as they transition from their current breeding programs.

The future milk market will be vastly different than it is today:

  • Market Size There will be one billion more people by 2025. FAO predictions are that the demand for milk protein from dairy animal sources, including cows, goats, buffalo and sheep, will be in strong into the future. Market size could well be over 25% above what it is today. To keep pace with that expansion, breeders will need to increase production by 2.5% per year for the next ten years. Whether that is by increasing average cow production by 2.5%, cow numbers by 2.5% or a combination of both, will be a decision that each manager will need to make. Making no change in output will mean that the farm will fall behind. Not a good situation as the margin of revenue over costs narrows.
  • Milk Production LocationTwo current global trends will continue – urbanization everywhere and significant global population increases in Asia and Africa. An increase in milk production will need to occur on those two continents; otherwise considerable expense will be incurred in moving dairy products from the countries where production exceeds demand. Many developing countries have recognized the need for increased milk production and have already initiated programs to domestically produce a higher proportion of their milk. Breeders in developed countries cannot automatically expect to expand their volume of production in order to meet the demands for milk from Africa and Asia.
  • Milk Products The vast majority of milk will not be consumed in a liquid unprocessed form – it will be eaten. The trend toward consumers wanting natural products will continue. Consumers will know the product source and product composition in exacting detail. Breeders will need to be produce milk that has attributes for which they have not previously been paid. Processors will want to know more than the fact that the milk they buy is 4% butterfat and 3% protein. Processors will base their payment to producers on the level of specific proteins and/or fatty acid composition. Since breeders currently do not have genetic information on the composition of the protein or butterfat that their animals produce, they will be at a disadvantage compared to the processor. A2A2 milk in Australia (Read more: 12 Things You Need to Know about A2 Milk) already receives a premium farm gate price. Breeders there are already using sires genetically tested to be A2A2.

Dairy farming will be different as well:

  • Herd SizeIn developed countries a minimum of 300 – 500 cows will be needed to cover the cost for the purchase of technology. Breeders in those countries will design their operations based on their strengths and specialties. While in countries with developing dairy industries herd size will vary from a few cows per owner in village herds to very large herds that are located in close proximity to cities and that buy all their inputs. Breeding decisions will be made by groups of cows and not on an individual cow basis.
  • Automation There is no doubt that dairying, like all other modern industries, will undergo very significant changes in the degree of mechanization that will occur. Cows will be electronically monitored for a multitude factors. Managers will be focused on managing systems and will have much less time to attend to problem animals. The traditional definition of a breeder’s cow sense will be replaced by breeders using facts, figures, and information on which to base decisions. (Read more: The Future of Dairy Cattle Breeding Is in the Data and Robotic Milking: More than just automation it’s a new style of herd management.)
  • Feed – Forages and human food processing bi-products will form the majority of the animal diets. Dairy cow diets will be more finely tuned and balanced on a profit generated basis, instead of on a production level basis. Managers will make the investment to obtain expert advice.
  • Genetic Merit –The level of the genetic ability of the general population of dairy cows for their ability to return a profit to their owners will need to be 25-30% higher than it is today. Breeders, over the next decade, will need to invest in the genetics that return their farms the most profit.
  • Animal Welfare – Big strides will continue to be needed in animal welfare. Cow comfort and cow mobility will be continuously monitored and will be essential to herd profit. Consumers will demand that cows be polled, not be confined to a tie stall and treated humanely. Breeders will need to use genetic information to help address some of these issues.

Beyond the farms, other factors will affect dairy farming:

  • The Environment – Practices that are detrimental to the environment will not be tolerated. The current list of factors including greenhouse gas levels, GMOs, carbon footprint, and damaging product residues is only a short list of what farm managers will have to keep on top of in 2025.
  • Research / Education – Research and Development (R & D) will be an integral part of every business decision. Some farms will produce milk as well conduct R & D. Ownership of intellectual property will be closely guarded, which will be a new approach for many parts of dairy farming. Continuing education will be something farm managers will consider important to keep current with on a daily or weekly basis.

What will this all mean for animal breeding?

There will be no looking back. Cows will need to be different and genetically improved from what they have been in the past and what they are today. The changes in the TPI™ and NM$ formulae that will be implemented on December 2nd will not be progressive enough for 2025.

It will take research and development to change the genetics of our cows. It could even go as far as the need to develop a new breed or new strains of cows.  Breeders will need to take action. Breeders, their leaders and the suppliers of genetic products and services need to be taking time right now to understand how the genetic profiles of the cows of 2025 will need to be different than the genetic profiles of today’s cows.

The Bullvine Bottom Line

It cannot be assumed that someone other than breeders will address the challenges of developing the cows best suited for 2025. A vibrant, viable and sustainable dairy breeding industry in 2025 is not guaranteed, but it is possible. The payoff will be that the breeding industry will be able to shape its best future.


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Categories : Dairy Industry

World Dairy Markets: Hot, Cold or Cooling?

Friday, November 21st, 2014

One of the best feelings I’ve experienced in the dairy industry is the pride that comes from being part of an industry that is world class, profitable and sustainable. When the industry you work in is thriving, it makes daily problem solving a challenge and not a burden.  However, realistically, sustainable profitability doesn’t apply across the board in the 21st Century dairy industry and there are many variables. While one area moves ahead, others fall behind and finding a sure thing to invest in is, itself, one of the fast changing variables.

Consumption Drives the Dairy Industry

Global dairy consumption is expected to increase by 2% per annum; production is expected to increase by 1.8% per annum. The impact that this will have on the global dairy cross border trade is far more powerful than what the deficit number may initially suggest. The deficits exist primarily in markets that are already short of product and where demand is rising fastest due to rising incomes such as China, India, ASEAN (and Indonesia in particular) and the Middle East. Such markets will have to turn to the global dairy trade to try to satisfy the domestic demand.

Dairy as an agricultural investment sweet spot

Even a rudimentary knowledge of economics, such as mine, accepts that supply and demand are key to investment growth of any global product.  Dairy is unique in the fact that it has great versatility and can be marketed as many different products. Prem Maan, marketing from Southern Pastures in New Zealand, outlines the positives. “In its powdered form it has a long shelf life and can be transported and consumed at room temperatures. It is the only acceptable animal protein source for India’s primarily vegetarian population and is certifiable as Halal for Muslim markets. Infants can consume milk thereby providing protein during the critical development phase as they progress from mothers’ milk to solids. Dairy products are easily consumed by and fortified for the elderly for their protein, calcium and vitamin needs.” A Harvard study showed that even people who smoke and have high blood pressure reduce their risk of having heart related issues if they consumed grass fed milk. Having said that, markets are in a constant state of change and there is volatility in milk prices.  Milk prices are expected to remain high as movements in global supply have a material impact. The volatility is due to many factors including climatic conditions in India, USA, NZ, Australia and Europe and feed costs.

What Markets are Hot, Cold and Cooling?

As 2014 winds down, it could be informative to look at how the industry is doing from a global perspective.  Let’s look at what has been hot, cold or cooling in the past year.

New Zealand is Hot

New Zealand has a 37% market share of the global dairy trade; it is twice as important to the global dairy trade as Saudi Arabia is to oil.

The New Zealand dairy industry is based on grass-fed milk and sells at a premium compared to milk from other countries that rely on milk production from non-forage feeds. Hormones are not used.  Any cow given antibiotics is excluded from milking.  New Zealand dairying has a low carbon footprint.  For example, products are deliver to UK consumers at less than half the carbon footprint of local products.
New Zealand’s production has been built on its fortunate geographical positioning that provides it with a temperate climate blessed with rich water resources. Lacking subsidies and consuming only 3% of the country’s milk production New Zealand has been forced to seek export markets and free trade agreements. New Zealand now exports dairy products to over 150 countries and accounts for around 90% of China’s imported dairy products.

New Zealand dairy industry structure, the bulk of the country’s milk production is sold to farmer owned cooperatives, provides unique advantages. It ensures that global dairy prices are transmitted in a timely and transparent manner to farmers whilst providing a greater part of the dairy value chain as the cooperatives profits are distributed back to shareholding farmers. In the current season when milk payments to farmers in other exporting countries such as Australia, US and Europe has increased by 25%, New Zealand farmers have enjoyed a 40% increase (and from a higher base).

In this latter respect New Zealand is well insulated against price volatility – a pastoral dairy farm locks in the bulk of future feed costs. New Zealand continues producing, when other key producers are culling cows due to high feed costs.

New Zealand enjoys the benefits of producing a premium product, a material market share, and the ability to withstand high feed prices.

Africa is heating up.

It looks like Africa is the new land of milk and money and could be a booming market for global agricultural investment.  Speaking in Lexington Kentucky Charles Moore from Cape Town South Africa, outlined the challenges and opportunities involved in the rising African beef and dairy industries. Moore suggests Angola, Zimbabwe, Kenya and South Africa are most suitable for dairy investment.

Angola:  The strong economy fueled by the oil industry makes Angola excellent for dairy.  The large population, suitable climate and access to water also are positive attributes.  Furthermore, proximity to Middle East and Southeast Asian markets is also an asset.

Zimbabwe: On the one hand Zimbabwe has a built-in infrastructure, a culture that values cattle, a favorable climate and quality water sources.  On the other hand, political upheaval could be a major negative to realizing the full potential.

Kenya: The numbers are right in Kenya.  A million Kenyan dairy farmers milk 3 million cows. At only 3 cows per farmer, there is a lot of room for growth of the home based, small land base dairy industry.

South Africa: Moore believes that South Africa needs to look at value added products to increase profitability. Much like the rest of the world, there is a lot of consolidation within the South African dairy industry. Farmers there are on the cutting edge compared to the rest of the continent. South Africa produces approximately 50% of Africa’s milk. Moore believes that South Africa’s model will be “the way to go in Africa with 500 to 1,000 cow herds. The small producers are going to get eaten up.”

On the cool side is Russia.

When Russian authorities banned all dairy imports from Ukraine, the decision was justified by authorities as being based, among other things, on misleading branding.  However, banning has been used in the past by Russian officials in retaliation for strained relations. Banning wine from Georgia and fruits and vegetables from Moldova are two examples.

India is Hot

Before 2025, India will overtake China to become the most populous country in the world. Milk and dairy products are fundamental to Indian tradition and culture, Having said that, there is high regional diversity in eating habits and thus huge potential for supplying dairy products that meet that diversity. Distribution is currently a complex market with 15 million scattered retail ships.  Furthermore, there are millions of dairy farmers with two or three animals, making a huge potential to expand national dairy numbers.  In this direction, there has been effective development of a strong cooperative movement in India as the dairy industry becomes organized.  For example, AMUL, turned a small dairy collecting 200 liters of milk per day into a dairy giant handling 16.6 million liters of milk daily.  As of 2012 that placed that processor at #18 of the 20 top milk processors in the World.

China is Hot

Rising consumption (12.8% annually) is driving dairy imports into China, with 82% of those imports being skim or whole milk powder. Liquid milk imports from the US grew from 40 tons in 2010 to 2,750 tons in 2012.  It is reported that four foreign companies have capitalized on the uncertainty which grew out of the melamine and price-fixing scandals. They now have 42 percent of the Chinese infant formula market. Here too, as in India and Africa, there is huge potential to grow from the small herds.  Before 2007 there were 2.1 million farmers milking less than five cows.  That number fell to 1.7 million in 2010. At the same time, herds over 1,000 cows grew from 330 to 836.  The herds from 500 to 999 cows grew from 760 to 2,061. Investors are setting targets for investment in China.

Canada/China Heat is Cooling

Last year 5.2 billion in agriculture export sales to China made Canada their second largest agriculture trade partner after the U.S.  That $5.2 billion represents only five percent of China’s agriculture imports.  A column in June by John Ivison writing for the National Post states that “China is debating moving its North American base from Toronto to New York.”  Besides concerns over investment performance, Ivison feels that “dairy would be another area for mass a (investment) appeal were it not for the aberration of supply management.”

The US is a Catalyst

As investors look for the best place to grow their dollars and dairy producing countries seek ways to be attractive to those investors, there is a growing niches for dairy expertise. When China went looking for this the UW-Madison was chosen from a wide field that included top agricultural schools in several countries says UW dairy science professor, Dr. Pamela Rueeg.  She believes the UW-Madison was selected because of its reputation as a world leader in dairy science overall and particularly in the area of milk quality and food safety, which have been major issues for milk processors in China. Another key factor was the UW-Madison’s long experience doing dairy training in China and its extensive network of connection within the Chinese dairy industry.”

The Bullvine Bottom Line

It’s time for all dairy producers to recognize that we are in a world of global trade. Global supply and demand economics means that milk prices, inter and intra seasonal volatility notwithstanding, should continue to appreciate. The potential for dairy investment is attractive.


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Categories : Dairy Industry

Is It Milk or Is It Make Believe? 

Wednesday, November 19th, 2014

I have always said, “If you can name the problem you can solve it.”  Today when it comes to food production, the problem being named is unsustainable dairy production.  The answer? Create a synthetic dairy.  California now has Muufri (“Moo-free”) where they are perfecting artificial cow’s milk made from a special variety of yeast that has been genetically engineered to produce milk proteins. In Ireland there is a completely artificial milk being developed.  This is a reaction to the sins of environmental damage, greenhouse gases and water pollution that are held up in the headlines as being committed by industrial farming operations.

The “Name’ Game.

It is ironic that in the beverage advertising industry the word of choice is “milk”.  Today everything from soybeans, to almonds, to rice and nuts is masquerading as “milk”. In California they’ve gone beyond imitation naming to bioengineering.  Perumal Gandhi and Ryan Pandya – two bioengineers in California… are trying to go beyond other milk imitators. Their “out-of-body-udder” aims to match the popularity and health benefits of real milk. This is certainly startling.  After daily focus on developing each udder to realize its full potential, we are now faced with milk that can be created in test tubes.

But Will It Taste the Same?

Imitators come and go.  Successful imitators make the grade by being identical to or better than the original product. Most fall by the wayside, because of poor taste.  Although that sounds more like social commentary, in this case it really does refer to the fact that, so far, the imitators don’t taste like milk.  But what if Muufri can get the taste just right? Then the price factor enters the equation. Is the imitator expensive?  Cheap?

The “Claim” Game

To win the market, milk imitators must make claims that resonate with milk drinkers.  One that is out there is that “Dairy is unsustainable?”  It is up to consumers to ask the second question. “Unsustainable compared to what?”  If you’re talking plants.  Where is the land base that will produce all those crops?  The issues are many.  Too hot.  Too cold.  Not enough ground cover.  And then, as mentioned previously, what do plant based milks taste like?

Is Everything Unsustainable?

The vegan inventors of synthetic milk — Gandhi and Pandya – market their invention as a solution for “overcrowded dairy barns where cows are fed a constant cocktail of growth hormones and antibiotics and have their tails docked and their horns removed.”  It sounds horrible but is it truthful? If we look back at the bioengineers, it is like saying everyone who works in a lab is male, with above average IQ who dresses only in white lab coats.  Talk about unsustainable!

The Negative is Heard Louder Than the Number

When the inventors of milk were making their formula, what percentages moved them forward?  It is frustrating when small statistics are reported to imply large negative impact. In this case the quote is “According to the Food and Agriculture Organisation of the United Nations, dairy production is responsible for 3 percent of the world’s annual greenhouse gas emissions.” Who or what is responsible for the other 97%.  Is 3% a huge amount to be attributed to one source?

Who’s Making It?  Who’s Faking It?

Fortunately for Gandhi and Pandya, synthesising cow’s milk is a relatively simple process. It’s got less than 20 components, and consists of about 87 percent water. Here is the breakdown, according to John Anderson at Gizmag, “Muufri milk will contain six proteins to help form its structure, and eight different fatty acids to give it its rich flavour.” He outlines the process. “The milk is made using the same process that pharmaceutical companies use to produce insulin. DNA is extracted from dairy cows and certain sequences are inserted into yeast cells. The yeast culture is then grown in industrial-sized petri dishes at just the right temperature and concentrations, and within a few days, the yeast will have produced enough milk for harvesting.”

It’s All Milk and Mirrors!

Real milk is the starting point reports  National Geographic “Although the proteins in Muufri milk come from yeast, the fats come from vegetables and are tweaked at the molecular level to mirror the structure and flavour of milk fats,” “Minerals, like calcium and potassium, and sugars are purchased separately and added to the mix. Once the composition is fine-tuned, the ingredients emulse naturally into milk.” This of course means that all of the nutritional values can be tweaked by Gandhi and Pandya, so their artificial milk could potentially be even better for you than regular milk.”

Is this Milk Worth It at Any and All Costs?

Initially Muufri milk will be more expensive to buy than regular milk. This is not an insurmountable problem. Gandhi and Pandya hope to eventually make it cheaper as their production is scaled up. But because it won’t contain bacteria like regular milk does, the shelf-life will be much longer. The pair hopes to have their milk on the market by mid-2015.

The Magic in the Milk Glass

Before ensuring family health, getting to the bottom of the glass can be a double edged sword. Where do you get your information?  Is your Doctor providing preventive medicine?  Do you believe the press?  TV? Your own intuition and feelings? Is there any way to be certain that what you eat and drink is good for you?

With so many sources – good and not so good — you can’t be blamed if you wish there was magic wand that would just fill your table and lunch boxes with the best, safest and healthiest food. However, wishing for a “sure thing” may be what has led to the situation where we now have pretend food. Food that is completely man made … it bypasses all that bad agriculture … drugged animal controversy!  So are you ready for “Let’s Pretend It’s Healthier?”

Perfection from the Petri Dish

It seems that we are dissatisfied with the food provided by agriculture … now we seek perfection from the petri dish. We have actually come to the point where we have “Bogus Beef and Imitation Milk”.  A quick search tells us that today we have imitation egg mayonnaise, imitation milk and coming soon to a grocery store near you – petri dish meat. Cows are NOT all Bad.

After All, Cows Poo It Forward!

We milk them for all their worth.  They poo it forward by returning fertilizer to the land.  That fertilizer, unlike most, is not created in a laboratory. Manure does a great job building soil structure. It reduces erosion, nitrate leaching, and the energy needed to make natural gas-based nitrogen. We can do a better job in using this valuable resource.

Nature or Nurture?  Cows or Culture?

The one thing that is as sure as death and taxes is our need to consume healthy food and water on a regular basis.  Of course, it’s up to each one of us to choose what actually goes into our moths.  They say that imitation is the sincerest form of flattery but is imitation healthy?

And then there’s “Buy Local!”

Two or three hours north of our farm buying local becomes a question of what can be grown.  This summer market garden producers didn’t get a harvest before the “summer” people – their largest consuming demographic – returned to the city.  It was an unprofitable season and that, only logically, will have a serious impact on the next season, let alone getting through the winter.  And, this is only a very mall example of the actual problems in producing plant based diets.

My questions is, “Are we going to ignore livestock which is renewable?”

Bold statements and brash claims are all well and good.  But, at the end of the day, we’ve got to produce food.

The Bullvine Bottom Line

Are you ready to skip the cows and go directly to the Lab.?  Are you thinking outside the barn?  Not only your livelihood is at stake. Your health is at stake.  Are you ready to fake it?


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Categories : Dairy Industry

The Future Of Dairying Is Uncertain!!

Wednesday, October 8th, 2014

You are committed to dairying. You have recognized that changing markets and rising demand for milk, means you will have to expand, specialize or exit. You’re staring at a future that is looming with complications from genetics to finances, and you are not entirely sure which direction you should be headed in. Suddenly an unforeseen challenge is right on your doorstop, and it could mean disaster for everything you have invested in your dairy business.  You thought things were fine.  That’s what “they” have been telling you.  You can’t be blamed for asking, “Why didn’t we see this coming?”

Stuck in the “If only Rut” While the Future is Bearing Down Fast

If only the economy would turn around.  If only government would give us support and protect our markets. If only the consumer would understand that producers are part of their team too!  If only we had unconditional support from the membership.  Oh yes…. And it would be great “If only we had the right people leading us?  You know the ones.  People we like.  So we don’t have to deal with personalities, politics and publicity.”  Yes, the if-only rut is a deep one and very hard to dig yourself out of, once you have given all responsibility for change to someone or something else!  If only that worked!  But … it doesn’t.

Who Is Representing YOU?

Sometimes it seems like the rest of the world continually underappreciates the hard work, planning and vision of modern dairy farmers.  Part of the reason for this is that they are not supported with that same focus and energy when it comes to their boards, suppliers and associations. That is too bad because they impact our long-term viability as an industry.  Take, for example, your breed association, milk recording agency or cooperative AI stud.  You have just read the newsletter where they voted in a direction that has nothing to do with actually supporting your dairy objectives.  Not surprising since the board itself is grossly under-represented by progressive dairy operators who are hands on and in tune with modern dairy growth. In fact, the business agenda hasn’t changed in thirty years.  And neither has the makeup of boards.  They are entirely missing the issues that are well beyond the writing on the wall stage.

Why Aren’t Dairy Associations Relevant To Modern Dairying?

Boards who move industries or associations or dairy operations realize that if great work is going to get done they will have to do it.  However, that takes long term vision, and it is difficult to rock the boat and chance finding yourself out of work. Currently – too many decisions are made that keep people in their jobs and have less to do with making the dairy industry profitable. When it becomes a choice between keeping a grant, maintaining the interests of a major financial supporter or putting some other agenda ahead of the actual dairy operators’ needs, it’s easily seen who wins out. Furthermore, too many dairy co-ops or board decision makers don’t work entirely on farm and see what they do as a perk or supplement or cushion for retirement.  Too often this means they are not motivated to carry out the hard decision making that forward progress always requires.

Who is Serving?  Who is Hiding?

If the boards, associations and suppliers are actually serving the industry they must be comprised of the people who understand what it takes to be sustainable and profitable in the dairy industry.  All sectors of the industry – commercial, show type breeding, purebred – must, at the end of the day, be both profitable and sustainable. We have all been at industry meetings, where the folks at the front of the room said all the right words about where the industry needs to be, but there is always one thing missing.  First: Progress.  Secondly: Actual actions undertaken.  If the group is in exactly the same position as they were a year ago at this time, that actually means they are falling behind. It’s frustrating to receive dairy industry meeting agendas where the only change in the format, presenters and reports is the date at the top of the first page.

Does The Buck Stop In The Barn Or In The Boardroom!

“You have to continue to move forward.  The moment you decide to stand still, the rest of the industry goes by you very quickly.” Thomas Boch speaking of the college sports industry.

To move forward.  Being a board member isn’t a reward for surviving in the dairy industry to the point where you have time to attend meetings.  Time – is the kicker.  The ones who are so busy 24/7 in dairying that they don’t have time to travel for meetings…. to do the homework — know the issues. They aren’t prepared to say “No!” to the status quo. Having said that, it’s amazing how fast a meeting can be wrapped up if one or more of the attendees is showing at a dairy show the next day. There are ways to manage the time, place and length of meetings.  After all, the most important part of a board meeting happens when it is written up and the actions and whom they are assigned to has been recorded. Then the real measure of success comes when the work gets done. Too often the action item remains “incomplete” for far too long.

How Many Of Your Dairy Leaders Use These Excuses!

The Bullvine is fortunate in being able to dialogue with all dairy stakeholders from all sectors of the industry.  We enjoy nothing more than sharing our viewpoints, learning those of others and, best of all, challenging those we meet to confront change for the good of the industry.  We are making excuses when we face something hard but here are the ones that we are getting for the lack of leadership currently facing many dairy organizations and the industry as a whole.

“I would, but I’m too busy” This speaks to the previously mentioned self-preservation priority.

“We would lead but we are currently facing too much competition amongst ourselves.”  This says that they don’t care about you until they can be sure they are the only ones in your wallet.  “We would lead but we are in the midst of downsizing.”  They see the challenges ahead, and they want to hang on to as much as they can for as long as they can, even if it reduces their own effectiveness.

In other words – rather than  making changes that meet the needs of the current and future membership, the associations who make excuses are only considering their own needs. Unfortunately, they don’t recognize that, without a sustainable, profitable industry, they too will disappear.  As Benjamin Franklin put it so clearly, “We must all hang together, or assuredly we shall all hang separately!”

This is NOT a News Flash!

If it was easy to foresee the future, our industry would not be facing the issues and challenges it does. It’s hard work to be progressive.  When you picture the time it takes to serve on industry boards, associations and consulting groups, you might not be blamed for seeing it as a waste of time.  Who needs to sit around a table offering platitudes at best, sharing gossip at worst, and all the time thinking, “My time could be so much better spent back on the farm?”  You’re not wrong if that’s the kind of organization you’re specifically thinking about. Who wants to endure lengthy, time-consuming presentations (aka death by PowerPoint) , bickering board members, deadlocked decision-making, sneaky power grabs or, worst of all, a rubber-stamp committee that might as well not exist at all. Maybe it’s better to wait and see and hope that it all changes (positively) on its own.

Procrastinate Until They Legislate

Indeed, procrastination does lead to change.  If left to its logical negative end, someone will step in, whether it’s the government, banks or competitors. They will then take the decision making right out of our hands. If we are not ready to determine the genetics, herd size, animal care or leadership we need, someone else will do it for us.  The trouble is we won’t have any say, and certainly it will be neither profitable nor sustainable for those who give up their voice. Do we want to be forced to change?

Looking Back.  Looking Ahead.

Thirty years ago not all farmers cared about international markets, research or genetics – let alone genomics.  That didn’t mean, however that Boards, Associations or Universities where ignoring these issues.  Indeed the worldwide reputation of North American dairy cattle impacted the entire industry right back to the farm gate.  Riding that wave may one of the reasons contributing to our current complacency and willingness to rest on past laurels.

Today the very success of not only North American dairying but dairying in developing countries as well has contributed to a more level global playing field.  Contrary to resting on past achievements, it is time once again to take the industry to the next level in all areas: genetics, research, health, tools, equipment and systems. Once again we need leadership.  It’s time to accept that not all of us see the dairy industry in exactly the same way, but all of us need to embrace change that will build the future. Take risks.  Do things differently.   Never lose your courage to move ahead.  Don’t be paralyzed by what is coming at you.  Be energized.

The Bullvine Bottom Line

The goal is not to avoid the issues or to completely eradicate them.  There isn’t a three step plan that will guarantee the future.  The future of the dairy industry will be made by initiators who figure out how to keep moving, when it seems that the only choice is to stay still and remain stuck.  Let’s use our insights to keep this industry where it deserves to grow … in the spotlight!




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Categories : Dairy Industry

As breeders we seldom give thought to the new milk products that consumers will want in the future. We assume that the composition of the milk we ship will not be different from what our cows currently produce. So we continue to select for the proportions of fats and proteins that have existed, wellalmost, forever. But our assumption of no composition change may not be correct. Let’s dig deeper.

Value Added Is the New Game

Some breeders have not been willing to accept the generic approach and average price for the milk they ship. To that end we see A2 milk taking market share in some countries, butter making a comeback (Read more: 12 Things You Need to Know About A2 Milk) and breed specific milks also catching market share. All in an effort to generate more revenue. It takes effort but the rewards appear to be well worth it.

The growth in milk’s market share of the food dollar will come from new specialty, health or pleasing to the palate products. Cold fluid milk in not currently the drink of choice in countries where the population growth will occur and it cannot be priced above other beverages.

To get new value added products will take something other than the milk our cows have been producing. This has been talked about for some time but until genomics came on the scene it had only been talk, as we had no way of linking genetics to products.  (Read more: The Dairy Industry – Past, Present and the Future,  “Got Milk” is becoming “Got More” and MILK MARKETING: How “Got Milk?” BECAME “Got Lost”)

Takes Shareholder Collaboration

For the vast majority of milk produced, the customers next in line for the milk producers sell, are the processors.  So to garner the maximum farm gate price, breeders will need to supply their processor with the milk that can be used to yield the value added product. But it’s not a simple thing.

Changing Milk Composition – Possible or Impossible?

What we are talking about is genetically changing for instance the protein composition of the milk cows produce. It is possible to feed cows a special diet or grow feeds on a certain soil type and relatively quickly alter composition to produce a specific product. It takes time to identify the desired parents, select for and then produce the cows that will produce the milk with unique composition.

A study currently underway in Scandinavia is collecting genomic data on individual cows and three breeds for the proportions of casein and whey proteins they produce. The Jerseys have higher concentrations of kappa casein known to be favourable for cheese making. The Swedish Red have a higher concentration of genes not as favourable to cheese making and the Holsteins have the highest relative composition of beta casein. However, within each breed, there are cows that have the ‘good’ genetic make-up, favorable for increased cheese production. The next steps of the study will be to actually quantify relationships and, once the results are available, refine selection for increased cheese production.  The good news is that producers wishing to receive increased returns for the milk they sell for cheese, will be able to develop herds that allow them to do that.

Can Breeders Get Started Now?

At present the tools to identify animals with the ‘good’ genes are not available. However that should not stop breeders wishing to develop bloodlines that will give them more cheese. Selecting for protein yield or CM$ (Cheese Merit Dollars) are good starting points. Instead of using NM$ (Net Merit Dollars) or FM$ (Fluid Merit Dollars) for sire or dam selection, breeders should use CM$. To maximize on-farm profit, selecting for CM$ is superior to using single trait selection and selecting for protein yield only. As more information relating genomic profiles with cheese production becomes available, breeders will be able to fine tune their selection.

Sires that Stand Out

At the present time genomic and daughter proven sires that stand out for CM$ include the following:

  • Mr Mogul Delta 1427 (203HO01468) CM$ 1115
  • Cogent Supershot (224HO02881) CM$ 1099
  • MR Shot Dozer (151HO00696) CM$ 1067
  • Roylane Socra Robust (7HO10524) CM$  921
  • Clear-Echo Nifty Twist (20HO14335) CM$  885
  • Kings-Ransom Erdman CRI (1HO09880)  CM$  856

The Bullvine Bottom Line

Breeders wishing to position themselves for having breeding stock and producing milk that is favourable to cheese production need to get started on using sires in their breeding program that have CM$ values over $1000 CM$ for genomic sires and $800 CM$ for daughter proven sires.




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Categories : Dairy Industry

As dairy breeders, we pay special attention to the nutritional needs of our dairy herds.  As food consumers, we are also well aware of the responsibility of keeping ourselves and our families healthy.  It sometimes feels like being placed between a rock and a hard place. This is especially true when we read headlines that vilify farmers or the food we produce. Fortunately, in the case of butter, the pendulum is swinging in a more positive direction.

“Who Can You Believe?”

Over time butter has been blamed for everything harmful from obesity to heart disease. Dr. Ancel Keys – an American scientist who studied the influence of diet on health – believed saturated fats were the leading cause of heart disease because of their high caloric values and cholesterol levels. In 1961, the American Heart Association endorsed Keys’ hypothesis on fat, and the war against saturated fats was on. That same year, Keys was featured on the cover of Time magazine. Needless to say, margarine sales flourished while butter purchases plummeted.

“The Start and End of My Butter Blues!”

I am exactly the right age to remember the campaign against fat that came to the forefront in the 1960s.   I distinctly recall the difference that switching to margarine made in the taste of food. Butter had always been at the top of my list for improving bland tasting foods.   Gradually my grandparents and parents were won over to the idea of margarine as a healthier alternative to butter. I wish I had known that I could have pointed them to master chef Julia Child. It might have helped.  But maybe not. Sometimes the way we accept information is more mystery than recipe!

“Good Sense. Good Science.  Butter Brings Them Together Again!”

It has taken a long time, but hindsight regarding butter is becoming 20/20. Using the considerable data collected it is now possible to compare inverse relationships as the consumption of butter dropped and cancer and heart disease soared.  Certainly the rise in cancer and heart disease can no longer be blamed on high-saturated-fat butter. Indeed new research points to other contributing factors which need pro-active attention. Common sense needs to become more common.

The New Tune “Bring Butter Back” Is Hitting the Health Charts

Whenever we are in agreement with opinion reversals, we happily report that the change of tune. Today, after additional research and failures to curb obesity and type 2 diabetes, researchers are indeed singing a new tune. So-called heart healthy spreads, hydrogenated vegetable oils, margarine and shortening are under scrutiny. Excess dietary sugar creates insulin and leptin resistance, which can lead to obesity and inflamed arteries – which both raise the risk for a heart attack.  It’s not over-dramatic to declare that fighting obesity is a battle we all wage. But not all of us recognize the harm that one or two cans of soda can inflict. (Every American consumes on average 400 8 oz. servings of Coke products per year!) However, let’s stay focused on butter.

“Butter UP!” It’s High Time We Melted Those Butter Myths.”

Currently, both sides of the butter market — production and consumption — are strong.  In 2014 butter consumption in the US reached its 40 year peak of 5.6 pounds per capita, compared to 4.1 pounds in 1997. Meanwhile, margarine has fallen to a 70-year low. The butter boom, at least in part, has been attributed to a shift in consumer preferences away from processed foods and back toward natural foods.

“What you Don’t Know About Butter, Could Fill a Crock!”

It’s time to review and revise what you know about butter.

  • Almost as harmful as bad science is misleading advertising. Everyone who has a product to sell uses advertising to support purchases by targeted consumers. Imitation products made from vegetables, weeds, seeds or nuts are packaged like real dairy products and have the words “milk” or “dairy” in their names or advertising. They are a choice. But they are definitely not dairy even though advertisers keep churning things up.
  •  “Overall intake of dairy products was not associated with mortality. A possible beneficial association between intake of full-fat dairy and cardiovascular mortality needs further assessment and confirmation.” (European Journal of Clinical Nutrition (2010) 64, 569–577; doi:10.1038/ejcn.2010.45;)
  • There are a lot of fat soluble vitamins in butter. This includes vitamins A, E and K2.
  • Butter contains short and medium chain fats which are metabolized differently from other fats. They lead to improved satiety and increased fat burning.
  • Butter is an excellent source of a fatty acid called Conjugated Linoleic Acid. This fatty acid has powerful effects on metabolism and is actually sold commercially as a weight loss supplement.
  • Conjugated Linoleic Acid has been shown to have anti-cancer properties as well as lowering body fat percentage in humans. However, some studies on CLA show no effect on body composition.
  • In 2013, the USDA began the process of banning trans fats from the American food supply.

“Upgrade to a Butter Vocabulary”

New terms that you may want to spread around are Vitamin K2 and Butyrate.

Vitamin K2. As previously mentioned, butter contains Vitamin K2. Vitamin K2 is somewhat rare in the modern diet. It is involved in calcium metabolism. Low intake of K2 has been associated with many serious diseases, including cardiovascular disease, cancer and osteoporosis.

Butyrate: The 4-carbon fatty acid butyrate is created by bacteria in the colon when they are exposed to dietary fiber. Butter, is about 3-4% butyrate. In fact, butyr-ate derives its name from butter.

“Does Butter Make My Butt Look Bigger?”

Nutrition authorities often recommend that we choose low-fat dairy products. That way, we can get the calcium we need without all those “bad” fats and calories. Furthermore, despite the higher calorie content, eating high-fat dairy products is NOT associated with obesity. Modern research results point to high caloric intake and artificial ingredients as the more likely culprits impacting current health challenges.  In 2012, a study examined the effects of high-fat dairy consumption on obesity, cardiovascular disease and other metabolic disorders. They discovered that high-fat dairy did NOT increase risk of metabolic disease and was associated with a reduced risk of obesity.

“Always Consider Where It’s Coming From”

Making better choices is what makes life such a challenge and an opportunity.  Always consider where the information you’re buying into is coming from.  Try to avoid agendas of the information provider.  Obviously The Bullvine has a definitely pro-dairy viewpoint.  Having said that, the choice to accept, reject or react is up to you!  With instant access to news, we are bombarded with information 24/7.  We need to understand that headlines sometimes are aimed at sensationalism and are not necessarily scientific fact. Furthermore, when it comes to eating, you can have too much of a good thing. Just because something is good for you, it doesn’t follow that you should overindulge. But, having said that, there are some well-supported reasons for choosing butter.

“Butter is the Source for GOOD Fats.”

Healthy Saturated Fats The “war” against saturated fat was NOT based on real science. And speaking of good, there are good fats, and there are bad fats for us to learn to recognize. Saturated fats raise HDL (the good) cholesterol and change the LDL from small, dense (very bad) to Large LDL, which is benign.

Butter Does Your Heart Good

Recent studies suggest that there is no association all between saturated fat and cardiovascular disease. Unfortunately in our misguided enthusiasm we replaced healthy butter with unhealthy highly processed Trans fats. Trans fats are the bad guys and cause all sorts of diseases. In the Framingham heart study, they examined the effects of butter and margarine on cardiovascular disease.

Margarine significantly increased the risk of cardiovascular disease, while butter had no effect.

Another study revealed that high-fat dairy consumption reduced the risk of heart disease by a whopping 69%, most likely due to increased Vitamin K2 intake.

Conclusion: “You can’t Beat Butter.”

Well, actually you can beat butter but in terms of better eating, butter bashing has gone bye, bye!

In all the hype over good and bad, we sometimes are told or assume that if it tastes good it must be bad for you. It’s important to weigh the facts and make responsible choices.  Allowing butter to regain its place at the table, is a win-win-win for science, health and good taste.

The Bullvine Bottom Line

It`s time to bury the myth that butter is bad for you right along with  the accompanying threats, scare tactics and alarm bells.  The information is out there. It is based on real science and makes good sense and most importantly you can declare with confidence, “If you know what’s good for you …. eat butter!”




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Categories : Dairy Industry

Are New Dairy Farmers Prepared?

Thursday, July 10th, 2014

When our family dairy farm was at a crossroads in 1988, we asked our three children how they felt about dairy farming.  At that time aged 11, 14 and 17, they didn’t see themselves as future dairy farmers and so their grandparents’ animals went under the hammer.  Within ten years we were not only the proud parents of a manager for a Canadian A.I. company, an animal nutritionist for an American feed company  and a budding dairy marketer who owned and operated his own business, but hubby, and I had moved onto the farm and were both working for a national dairy genetics marketing association.  So much for not foreseeing our continuing future in the dairy industry.

“Learn to Do By Doing”

That 4H motto, “Learn to do by Doing” is an excellent mantra for anyone looking seriously at a dairy farming career. What four out of five of us were not prepared for in 1988 was the daily care and management of a dairy herd. With the exception of Murray. Murray was not only up to the challenge but, throughout 45 years of our married life, always managed dairy cows – in addition to whatever other career responsibilities he has taken on. While this has led to exciting opportunities and rather major challenges it probably isn’t a roadmap that others would choose to follow.  The good news is that to this day we live next door to the 96-year-old matriarch of his family who has lived her entire life here.  In today’s dairy marketplace, there has been so much change that it is forcing new and different ways to do well as new dairy farmers.

Required Education & Training

Dairy farming has always meant mastering many skills including feeding, administering medication, managing waste, operating milking equipment two to three times daily, and other daily duties. A growing number of dairy farmers hold a two or four year degree in dairy science, animal science, agriculture, or a closely related field of study that is the driving force in moving their goals forward since coursework for such degrees generally includes dairy science, anatomy, physiology, reproduction, crop science, farm management, technology, and agricultural marketing.  Nevertheless, there is no substitute for direct, hands-on practical experience and working on a farm with dairy cows is a necessary prerequisite for becoming a dairy farmer.

From Family Tradition to Farm Apprenticeships

In the past, the majority of new farmers learned the business from the ground up on the family farm.  Today those opportunities are dwindling and those who are inspired to choose a dairy career often apprentice with an established operation before venturing out on their own.  Those who intend to remain viable recognize that a lifetime of learning – classroom instruction, farm visits, seminars, videos and Internet – is necessary for the continuous improvement that is necessary for a sustainable, profitable dairy business.

New Education and Training

When you do a little research to discover the resumes of successful dairy farmers or, for that matter, most people working in the industry, you learn that many have backgrounds in 4-H, ag-education or courses and seminars to round out their hands-on expertise.  Today’s dairy operators hone skills in calculating application rates, determining genetic merit of livestock or trading grain on the futures market.  Continuing your agricultural education is like money in the bank.  You can farm without it, but it`s sure a lot easier to farm with it.

New Dairy Farmers Start Out Herd First!

Canadian dairy farmers face the first hurdle of quota purchase before they can become part of the national dairy industry. Figuring out a way to get a foot in that door is a major challenge. In the US, many beginning dairy farmers pursue a “herd first” strategy—that is, they buildup their herds before they make fixed investments in land and buildings.  This is a logical first step which builds equity, before investing in buildings and equipment which can depreciate quickly. Cows are also an investment that is relatively easy to buy and sell. The “herd first” strategy is a good way to start generating an income while managing debt.

Advice from Those Who Have “Been there done that!”

  1. Get experience on someone else’s farm before going it on your own. Build equity in cattle, while you work.
  2. Get a positive credit and community history in the area where you want to farm.  It is invaluable to have support and references from local farmers and Ag business people.
  3. Be willing to start a little lower than where you want to end up. A farm that needs work may also come with an entry price that can be the first step to your dairy dream.
  4. Buy used equipment and keep it in good condition.
  5. Whenever possible use your own sweat equity.  Production costs can be controlled if you are willing and able to do more than you hire someone else to do.
  6. Farming is always ready to teach patience.  You can’t get everything at the beginning. A plan that adds value every year is one that will see you build a sustainable operation.
  7. Listen to, learn from and work like other successful farmers.
  8. Target having a barn full of cows as soon as possible, so that you can keep the milk and cash flow flowing.
  9. Don’t get too far into debt. Specifically, stay at or under $2000 per cow
  10. Management skills are essential. Work smarter, not harder.

What is the Outlook for Dairy Farming?

Hundreds of new farmers get started in dairying every year.  Compared to other types of livestock farming, dairying can provide a higher income per animal, a monthly milk check, and, in many areas, more markets.  As the average age of farmers continues to climb, there will continue to be farms selling our or needing to be taken over.  Here a young farmer may find the perfect partner/mentor to work with in planning a future that includes farm ownership.  Modern dairy succession is not always through family lines and, in fact, non-related succession will probably become the norm that it is in other industries.

The Off-Farm Job is Important

In a Wisconsin survey (1996-1999) 51 percent of 300 beginning dairy farmers or their spouses worked off farm.  It reported that “Twenty-four percent of those taking over the family farm and 33 percent of those starting out on their own had off-farm jobs. Off-farm jobs can provide beginning farm families with additional income, health insurance, life insurance and other benefits.  Off-farm income can help meet family expenses when milk prices are low.  With an off-farm job, often a family farm can support two households without having to expand herd size or increase the number of milkings per day.”

Research and Development

Most major industries recognize the necessity of having constantly evolving research and development to keep the industry moving forward.  When times are good, we imagine that the markets will stay that way and feel overwhelmed when outside forces impact what we have grown comfortable with.  As much as we need a new generation to take over the dairy operations, we need next-generation scientists and researchers with a passion for dairy to choose careers that will have a positive impact on dairying.  Whether it’s genetics, engineering, architecture or economics, new minds need to accept the challenge of finding solutions, and creating new ways to provide food under changing environmental, political and demographic conditions. It’s frustrating for young people who enter agricultural graduate programs when times are good to discover that funding has been cut, and their futures are anything but sustainable. Five or more years of budget cutting and financial downturns, is having a detrimental effect on dairy research and development.

New Facilities

The positive outcome of the constant change in the industry is that there is a change in educational institutions as well. The Rayner Dairy Research and Teaching Facility in Saskatchewan, Canada plays a significant role in teaching undergraduate and graduate students within the College of Agriculture and Bioresources and the Western College of Veterinary Medicine. Research conducted in the new facility will involve dairy nutrition and feed development, animal fertility and health, animal management, technology development, and development of green technologies for improved sustainability. The facility will also be used to further research from the College of Agriculture and Bioresources, College of Engineering, the Western College of Veterinary Medicine, and VIDO/InterVac.

USDA Help for New Farmers

New and beginning farmers are the future of American agriculture,” said US Deputy Secretary of Agriculture, Krysta Harden. “The average age of an American farmer is 58 and rising, so we must help new farmers get started if America is going to continue feeding the world and maintain a strong agriculture economy. The new policies announced June 23, 2014 will help give beginning farmers the financial security they need to succeed. Our new online tool will provide one-stop shopping for beginning farmers to learn more about accessing USDA services that can help their operations thrive.”  Agriculture institutions worldwide are revising and upgrading their dairy offerings.  In Canada, the University of Guelph answers the challenge with a Dairy Education Series which they report is “available as a resource for university and secondary school students, industry personnel, and interested consumers around the world.” As well the University of Guelph has a new dairy facility: The Livestock Research Innovation Centre. Construction began in 2013.

USDA’s New Farmers website has in-depth information for new farmers.  The New Farmers website has been built on issues identified by new farmers as top priorities. It will also feature instructive case studies about beginning farmers who have successfully utilized USDA resources to start or expand their business operations.The website includes how to increase access to land and capital; build new market opportunities; participate in conservation opportunities; select and use the right risk management tools, and access USDA education, and technical support programs.

The Bullvine Bottom Line

Dairy farming is constantly evolving from a craft to a science, and more extensive training is necessary, especially for those starting out. There are many tools that new dairy farmers must recognize and use well. Those who make the wisest use of all the education, mentorship and hands-on tools will be the new dairy farmers that also stand out.




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On Friday, a new undercover video from the non-profit group Mercy for Animals Canada was released showing abuse of dairy cattle at Canada’s largest dairy farm, Chilliwack Cattle Sales.  The video, shot by a former employee of the farm, shows dairy cows being whipped and beaten with chains and canes, as well as being punched and kicked.  This totally unacceptable conduct is a black eye for everyone in the dairy industry around the world.

The video is horrific.  To dairy farmers the video is heartbreaking.  A large majority of the people who dairy farm have family run organizations and treat their animals as if they are part of the family.  To see a dairy cow being treated in such a horrific manner is absolutely disgusting.

For their part, the Kooyman family has also expressed their concerns over the treatment of the cattle on their farm and they first suspended all employees involved, pending investigation, and have now fired them.  (Read more: Kooyman family in shock after allegations of employee animal cruelty and Employees terminated, cameras to be installed following release of video)  The challenge is that this should never have happened in the first place.  In watching the video, it would seem that these are isolated cases.  You see multiple employees abusing a cow at one time, even while knowing that they are being videotaped.  This indicates that the employees were comfortable with their actions.  It would seem to show that those actions were generally accepted on the farm.  Even though you, as owner or manager, might never take part in such actions yourself, what happens on your farm and how your cows are treated there is your responsibility.

As very large dairy farms are becoming more common, it often means hiring help that have not come from a dairy cattle or animal handling background, especially when trying to hire works for the night shift on farms that milk three times a day, as may have been the case here.  As a result, they have not been properly trained around dairy cattle and don`t understand animal behavior.  Quite likely, up to the point of being hired, they have not been exposed to the art of dairy stockmanship.  Recently we published an article about the lost art of dairy cattle stockmanship in response to growing concerns, which triggered our alarm bells.  (Read more: The Lost Art of Dairy Cow Stockmanship.  When Push Comes to Nudge.)   With the now firing of the individuals involved, there is potential additional legal action that could be taken by these individuals against Chilliwack Cattle Sales, claiming that this is how they were trained and the generally accepted conduct at the farm, and so firing them for these actions is unfair.

It’s really about culture and engagement

Ben Loewith from Summitholm Holsteins, one of Canada’s top managed herds, comments on the situation with proactive advice.  “Take this opportunity to discuss proper animal care with everyone on the farm.  Create a culture where improper handling is reported to you.”  Having been on Summitholm’s Lynden Ontario farm numerous times, I can attest to the fact that, at Summitholm, every cow is treated with the utmost respect and care.  This practice is a synchronization of the exceptional animal husbandry and people management of the Loewith family that is a priority of their personal management style.  They know that a comfortable cow is the most profitable kind of cow there is.  I have been told by employees at Summitholm, of which some have been there over 20 years, that “If you yell at a cow, let alone kick or hit a cow, you might as well start looking for new employment.”

The handling of this issue reminds me of a quote from Richard Branson, founder of Virgin Enterprises and sixth richest citizen in the UK, where he said, “The way you treat your employees is the way they will treat your customers.”  Well, for me, the same is true on a dairy farm.  The way you treat your employees is the way they will treat your cows.  Properly trained and respectfully treated employees follow the rules.  They know they are doing a good job, are less stressed, and use their energy toward being more productive. (Read more: 80 Ways to Build a Dairy Dream Team – Employees are what make dairy farms successful today)

The following are some key benefits of properly training and treating your employees:

  • Less risk
    A well-trained and managed employee is less likely to administer a wrong product or treat an animal incorrectly.  One mistake from an untrained or unhappy employee could cost you financially and personally.  Why risk your company’s reputation?
  • Consistency
    Happy well-trained employees are consistent employees.  When you have a good training program, you’ll have a much more dependable output regardless of employee pre-dairy experience.  You’ll see more consistent compliance with protocols, and workers will understand why following these protocols are necessary.  When employees follow protocols, production increases.
  • Better company culture
    While some may think that “corporate culture” is not relevant on a dairy farm, they could not be more wrong.  Workers cannot know if they are doing a good job if they do not clearly understand what the job requires.  Lack of training creates stress and a culture of disengaged employees, which can also lead to higher turnover.  Proper training and treatment help communicate the value of employees’ roles, which drives engagement and motivation for employees to put forth extra effort from the beginning.
  • Increased profitability
    Having fully developed and engaged employees will allow you, the owner or manager, to focus on strategic goals.  You’ll have confidence that employees know how to operate efficiently.  In addition, they too will have confidence, which further contributes to increased efficiency.  Knowing the proper protocols means that no one has to wait on owners or managers for instructions or approval.

Social Outrage

Dairy farmers from across the country took to social media to share their outrage towards the culprits who were caught abusing dairy cows. Many also tried to counter the negative press by sharing pictures and tweets about how animals are cared for on their farms.  Times like these are exactly why we need more dairy farmers involved in initiatives like proAction.  The proAction Initiative is a way of showing our customers and consumers that we have improved the management of our farms over time. That we take responsibility for our on farm food safety, quality of milk, care of our animals, and care of the environment. We are doing things to enhance biosecurity to limit or prevent diseases from coming onto our farms. It’s going to be a way of not only telling our consumers that we are doing a good job but we will have a way of measuring and proving that claim. It will be a way of defending our best practices that we are implementing on our farms. Showing is better than just telling all the great things we as Canadian dairy farmers are doing in the area of sustainability.  (Read more: TOM HOOGENDOORN- Family man, Farmer & Our Face to the Consumer!)  Michele Pay-Knoper, an agriculture agvocate points out that “We have a tendency to be modest, stubborn and independent – and extraordinarily busy milking cows, putting up hay and taking care of business. However, telling your story is a business practice today”.  (Read more: Michele Payn-Knoper – Standing Up and Speaking Out for Agriculture)

It’s times like these that we need to share messages and videos like the one Dairy Carrie – Carrie Mess – produced entitled “Undercover Dairy Farm Video”.    While the title might have you expecting to see something similar to that of the Mercy for Animals Canada at Chilliwack Cattle Sales, instead what you see is what really goes on behind the doors of a dairy farm which is calm comfortable dairy cows, eating and producing high quality milk. (Read more: Dairy Carrie – Diary of a City Kid Gone Country)

 The Bullvine Bottom Line

As dairy farms grow larger, it is important that the quality of stockmanship does not decline.  It is important to take the time to train your employees on what high quality stockmanship involves. Training and upgrading of animal handling skills is an ongoing priority.  The challenge is that everyone on the dairy operation must recognize the importance of proper treatment and care of the herd. Ideally, the monitoring is everyone’s role.  There can never be an “I didn’t know!” excuse. Ultimately, whether you have 10 or 10,000 cows, you are responsible for the proper care and treatment of your cattle.

For more an proper care and handling of farm animals check out The Code of Practice for the Care and Handling of Farm Animals: Dairy Cattle.



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International Markets. Who’s Catching Up?

Wednesday, April 16th, 2014

Two forces are coming together that are going to have a major impact not only on the North American dairy industry but on global dairying as well.  On the one hand, after generations of being in the forefront of the global dairy industry, North America is being joined by other expanding dairy economies.  In the 21st Century exponential growth in dairy consumption means that countries such as China, India and Vietnam are assimilating dairy practices from market leaders and leapfrogging to the top.

As the momentum picks up, headlines monitor the changes. “China Grows Its Dairy Farms “and “Emerging Dairy Markets in India “. It isn’t surprising therefore to see large agricultural marketing companies entering these markets, sending in products and partnering in on-site development.  Commercial representatives and government fact finding missions are reporting back that the potential is enormous.  Meanwhile on the home front, progressive dairy members are keeping pace through international exchanges of students, set-up expertise and, of course, dairy products. It isn’t unusual to be exposed to seminars, panelists and big picture visionaries who are making presentations on every aspect of this growth.  The message is repeatedly reinforced that China, India, Asia and Africa are not only improving their own dairy industry balance sheets but providing profit potential for North American dairy exports – real and intellectual—as well.

Over the past 40 years I have had mostly arm-length exposure to what dairying in these locations has included.  It is exciting to hear the vast potential that is being recognized today.  It can be compared to the way countries have leapfrogged from the not having even basic telephone systems to the smart phone generation. Using that as the comparison and you will have some idea of how dairy technology is moving ahead by leaps and bounds.

Already dairy and crop farming are looking more like the North American model as they move forward. Farmers in Asia are able to skip the generations of evolution that Europe and North America look back on.  They are not constrained by having to build tie stall barns.  They have the advantage of seeing the benefits of going directly to freestalls and milking parlors. Even in countries such as Africa where progress is more likely to use the freehold model, they are benefiting from the tools, genetics and science of modern farming.  The advice and role models, so easily shared with modern communication, can be applied to the type of efficient grass converting animal, high quality feed and accessible practices that will make it possible to keep people productively working in the countryside, instead of joining the city poor.

Many years ago, on the crop farming side, I witnessed firsthand the bottleneck that under-mechanization makes. We were visiting Africa and representing the good intentions and good will of the North American dairy industry. In Zimbabwe farmers were not able to keep the wonderful tractors running.  All too soon they would find themselves running out of draw pins or other small parts (not accessible) and the whole team had to revert to hand tools for planting, maintaining and harvesting crops.  The very real threat of starvation is always a bigger priority than unsustainable mechanization.

Today, whether it’s through equipment subsidies as was done in China or through supporting input costs or crop prices as was done in India, mechanization is moving forward.  Granted there are still many fields tilled by hand or using oxen but there is progress from walk behind tillers to mid-size tractors.  Some big name North American farm equipment dealers are moving with the times in these developing countries.  John Deere manufactures mid-size 80 and below horsepower tractors in India and China.  To put this in perspective, you have to recognize that China has over 90 percent of the corn acreage of the U.S. even though the yields are much lower. First mechanization.  Then these countries are in a position to turn their attention to crop and soil science and animal genetics.  This spins off into consumer desire for more fresh milk, Farmers, with the aid of governments and outside expertise, are meeting the demand by building 1,000 cow dairies that are comparable to those found stateside.

Threat or Opportunity

Let’s consider that China has the third largest cattle herd and is the second largest milk producer. India is the largest milk producing country in the world and could even overtake the European Union by 2020.  At first glance, this growing independence may seem like a double threat.  First they will require fewer imports.  Secondly they will become competitors in the marketplace.  However the discerning global watcher recognizes there is an even bigger change that is having the biggest impact of all.  It’s happening because of changes in the diets of consumers in every one of these countries.  Consumer demand for dairy products and protein is far outstripping the ability of their own country to provide for all their needs.  That is the first opportunity for the developed world. Other opportunities range from being mentors to help support this growth to becoming actual partners in overseas operations.  There is such a steep learning curve for countries who are undertaking modern dairy practices that it takes more than internet searches and a few weeks of visiting market leading operations. Then they have to go beyond accommodating best management practices.  Many of these countries have climate challenges.  Climate affects not only the cropping side tut also the milk production potential of the cattle.  The goal is healthy, high producing cows but, while great strides can be made by adapting equipment and modifying building styles, the same is not so readily converted when it comes to animal genetics, nutrition, health and reproduction.

China Has a Growing Thirst for Milk

As an example of how living standards and changing consumer tastes are impacting dairying, you need only look to China.  The former Chinese Premier, Wen Jiabao, used milk as a symbol for China’s rising wealth and living standards.  In 2006 he declared that it was his goal to ensure that all Chinese people could get enough milk. Eight years later progress has been steady with per capital liquid milk consumption rising from 1 kg per head in 2000 to 9.4 kg in 2011.  Furthermore, in the past four years demand for milk has consistently outstripped supply, with prices rising at an average of 12 percent a year. Having said that, it might seem counter-intuitive that it is expected that the population of milkable cows in China could fall from around 14.5 million in 2012 to 14.2 million in 2013.

The Bullvine Bottom Line

The scenario taking place in China is one example of the tremendous growth in dairying that is occurring in many countries around the world. As the fortunes of dairymen change in those markets, there is a corresponding impact on dairy farming in North America and Europe. In each market the goal is to supply consumers with quality food, dairy training, cattle genetics and technology.

The gaps are definitely closing.  There is potential for everyone to move forward.



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12 Things You Need to Know About A2 Milk

Tuesday, March 18th, 2014

When a new food trend presents itself a considerable amount of the success or failure in consumer uptake relates back to the way the product was introduced to the marketplace.  Drinking milk is by no means a “new” marketing trend but with the acknowledged trend toward healthier eating and better diet choices, the entry into the marketplace of a “new and better” milk drink is making ripples in milk glasses around the world. Milk has certainly seen its share of positive and negative marketing.  Everyone relates to and has positive feelings about the “milk moustache” campaign.  But mothers worldwide deal with the issues of “lactose intolerance” and “mother’s milk versus cow’s milk”. Every dairy producer faces the arguments of natural, unnatural or pasteurized.  And even with the acceptance or more flavored milks, the health issues have not been truly answered. What does this “new” milk mean to dairy producers?

Something Exceptional? Or Exceptional Marketing?

An Australia based firm – A2 Corp. – has been selling a brand of A2 milk in New Zealand and Australia for the past 10 years and is poised to launch into the North American market. Their growing body of research suggests that A2 milk may provide the answer for the 1 in 4 Americans who suffer from lactose intolerance.  The A2 Company hypothesizes that the problem is that they are unable to digest A1, a protein most often found in milk from high producing Holstein Cows. They propose that the A2 protein which predominates in milk from Jersey, Guernsey and most Asian and African cow breeds is more easily digested.

It’s about Leaky Gut Syndrome.

As with many health food trends, evidence shows they often get the first foot hold in the alternative medicine field.  From that perspective, the leading explanation for why some people can’t tolerate A1 milk is attributed to leaky gut syndrome. The idea that loose connections in the gut, “like tears in a coffee filter, allows proteins to enter the body and run wild.  In response the body sends immune cells to fight the autoimmune invaders and the result is swelling and pain from the resulting inflammation.  These symptoms are associated with arthritis, diabetes and autism.

What’s wrong with A1?

The real fiend in A1 milk according to A2 proponents is that, when digested, A1 beta-casein releases beta-casomorphin7 (BCM7), an oploid with a morphine-like structure.  Numerous recent tests report higher-than-average levels of BCM7 in blood from people with autism and schizophrenia. Furthermore, a recent study that is currently under review in the Journal of Nutritional Biochemistry reports on cell cultures research by Richard Deth and Malav Trivedi, both in the Pharmacology Department at  Northeastern University in Boston, that shows similar high amounts of BCM7 in gut cells causes a chain reaction that creates a shortage of antioxidants in neural cells.  This is a condition that other research has tied to autism.

Where’s the SCIENCE?

As for leaky gut, this is a condition that many adults may suffer from.  However, the condition is normal in babies under a year of age, who naturally have semi-permeable intestines.  Therefore, when they’re fed typical cow-milk formula, problems arise with digestion.  “A 2009 study documented that formula-fed infants developed muscle tone and psychomotor skills more slowly than infants that were fed A2-only breast milk.  Researchers in Russia, Poland and the Czech Republic have suggested links between BCM7 in cow milk and childhood health issues.  Another more recent study implicates BCM7 in sudden infant death syndrome, reporting that some “near-miss SIDS” infants had blood serum containing more BCM7 than the blood of healthy infants of the same age.” Research is ongoing to support these claims.

Partners on the Frontier

Bob Elliott, Professor of Child Health Research at the University of Auckland opened up discussions about A1 milk and diabetes in Samoan Children.  In a 1997 study published by the International Dairy Federation, Elliott showed A1 beta-casein caused mice to develop diabetes. In 2000 he partnered with entrepreneur Howard Paterson, then regarded as the wealthiest man on New Zealand’s South Island, to found the A2 Corporation.

False and Misleading?

Those charged with responsibility for public health and safety are feeling the pressure from this new product. In 2009 the European Food Safety Authority reported that they found no link between consumption of A1 milk and health and digestive problems.  To date, much of the supporting research has come from the A2 Corp., which holds a patent for the only genetic test that can separate A1 from A2 cows. Some fear a conflict of interest arises here.  In 2004, the same year that A2 Corp. went public on the New Zealand Stock Exchange, Australia’s Queensland Health Department fined A2 marketers $15,000 for making false and misleading claims about the health benefits of its milk and, at least for New Zealand’s Food Safety Minister, the debate was resolved.

The Door is Open to Welcome New Milk

Debate over or not, the A2 Corporation moved forward to market its a2 brand milk in New Zealand and Australia, where its currently accounts for about 8 percent of dairy product sales Down Under. In 2012, A2 expanded distribution through the Tesco chain into Great Britain. Currently a two-liter bottle sells at an 18 percent premium over conventional milk. Building on consumer acceptance in these locations, A2 is poised to re-launch into the U.S. market where they feel, unlike on their previous entry, there are now enough American consumers willing to pay a premium for A2 milk. The good news appears to be that A1 is not the causative agent for diabetes, heart disease and cancer.

Ready for Research

In building the A2 hypothesis, it becomes necessary to compare its benefits to the problems of A1 milk. In 1993 Elliott proposed that consumption of A1 milk could account for the unusually high incidence of type-1 diabetes among Samoan children growing up in New Zealand.  A colleague, Corran McLaclan, later found strong correlations between per capita consumption of A2 milk and the prevalence of diabetes and heart disease in 20 countries.  Critics explain the relationships away by other  factors such as diet, lifestyle and exposure to Vitamin D as suggested by research published by  Elliott  and  in the book written by Keith Woodford,(Devil in the Milk: Illness, Health and the Politics of A1 and A2 Milk.). The time is ripe for responsible research to resolve these issues.

Coming to A Grocery Store Near You

A2 Corporation is understandably cautious about suggesting that consuming its products is a solution to preventing serious diseases.  Their marketing emphasizes instead the digestive benefits of its fluid milk, fresh cream and infant formula products. Regardless of your current position in this “Battle of the Milks”, when it comes to the health of the next generation, we all need to take a stand. Worldwide A2 Corporation is into several years of expansion into the UK, Ireland and China.

A2 From the Farm to the Table

Along with being exposed to new dairy products, today’s consumer wants verification for what they are being sold. A2 Corp. explains that the company’s farmer-suppliers use DNA analysis of tail hair from each cow to certify she is producing A2 milk, which is kept segregated through processing.  They also report that it is now possible to convert a herd of A1-producing cows to A2- producing cows. They are working with selected dairies that are making this conversion and test-marketing A2 milk in a number of U.S. states.

A1, A2 and AI

AI companies are well aware of the A1/A2 debate and are taking steps to stay up on new developments.  Many US and Canadian AI companies keep records of the A1/A2 genetics of their genetic offerings. The development of A2 producing Holsteins is gaining momentum and breeders with long term vision are phasing out A1 cows and are confident they can maintain high production throughout the transition. At the leading edge are those who seek niche markets using the A2 dominant breeds such as Jersey, Guernsey and Normande.

The Bullvine Bottom Line

As with any other health claim, there will be early adopters and those who wait until the facts are all in.  I can’t help but ask, “When was the last time, you were absolutely certain of the nutritional science behind all the food you eat?”  Having said that, it isn’t difficult to accept the proposition that there are certain people in the population, particularly babies, who react severely to the A1 protein.  Four fifths of our family can dine delightfully on shellfish without incident.  Our baby risks anaphylactic shock from merely sniffing some on a buffet. So back to A1 and A2.  Is the market big enough for both?  Is one right?  The other one wrong?  The spotlight is on milk in a positive way. Sometimes we spend so much time defending the tradition that we miss the opportunity of bringing a whole new consumer into the dairy aisle.



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In 2013 more US dairy farmers left the business than in any year since 2007.  For an industry that has seen almost 64% percent of its members leave in the span of one generation, these are not positive stats.  Continued high feed costs, despite high milk prices, have seen margins get tighter and tighter causing over 2,321 dairy farmers to leave dairying in the last year alone.

Figure 1 Licensed US Dairy farms

Click on image to enlarge

TABLE 1: Licensed U.S. Dairy Farms & Average Herd Size by year

AIR-OSA-EXEL M DEE-ETMOUNTFIELD SSI DCY MOGUL-ET2361Joey Airosa & Henry & CarolynTipton , CA
DA-SO-BURN UNO 781AMIGHETTI NUMERO UNO-ET2647Darin & Sonya BurnikelCresco , IA
S-S-I JEROD MINAL 8777-ETDE-SU JEROD 1223-ET2598Select Sires Inc.Plain City , OH
ROORDA MAY MCBABY 15866-ETDE-SU D MAYFIELD 893-ET2522John & Larry RoordaPaullina , IA
MS KOENEN NUMEROUNO 5835-ETAMIGHETTI NUMERO UNO-ET2508Gregory B Moret & Koenen DairyPrairie Du Chien , WI
ROORDA CUT MCCINDY 15917-ETDE-SU BKM MCCUTCHEN 1174-ET2493John & Larry RoordaPaullina , IA
ROORDA CUT MCJANE 15914-ETDE-SU BKM MCCUTCHEN 1174-ET2489John & Larry RoordaPaullina , IA
S-S-I GLX MAYBELINE 8725-ETDE-SU FREDDIE GALAXY-ET2487Select Sires Inc.Plain City , OH
NORTH-ECHO MOGUL 2893-ETMOUNTFIELD SSI DCY MOGUL-ET2469Clear Echo Farm LLC & North FoSchuylerville , NY
SEAGULL-BAY MOGUL 1723-ETMOUNTFIELD SSI DCY MOGUL-ET2465Seagull Bay Dairy Inc.American Falls , ID
MORMANN UNO LIVANA 2184-ETAMIGHETTI NUMERO UNO-ET2465Daniel Sandra & Jennifer MormaNew Vienna , IA
HOLYLAND ECLIPS UNO 2145-ETAMIGHETTI NUMERO UNO-ET2462Daniel F. & Joseph N. LoehrMount Calvary , WI
OCD PARISH DAFFODIL-ETPLAIN-KNOLL PARISH 5534-ET2459Oakfield Corners DairyOakfield , NY
JOOK SUPER SIRE 6839-ETSEAGULL-BAY SUPERSIRE-ET2447Lester C. Jones & Sons Inc.Massey , MD
SEAGULL-BAY MOGUL 1725-ETMOUNTFIELD SSI DCY MOGUL-ET2445Seagull Bay Dairy Inc.American Falls , ID
JOOK HEADLINER 6910-ETSEAGULL-BAY HEADLINER-ET2438Lester C. Jones & Sons Inc.Massey , MD
S-S-I STCHL MICK 8753-ETERBCREST SATCHEL P2438Select Sires Inc.Plain City , OH
DE-SU SALEEN 2492-ETFUSTEAD SALEEN2432Darin MeyerNew Albin , IA
CO-OP DAY ROSETTE 6920-ETMINNIGAN-HILLS DAY-ET2428Genesis Cooperative HerdShawano , WI
DE-SU EPIC 2515-ETGENERVATIONS EPIC2418De Su Holsteins LLCNew Albin , IA
MORMANN UNO LIQUOR 2209-ETAMIGHETTI NUMERO UNO-ET2418Daniel Sandra & Jennifer MormaNew Vienna , IA
JOOK MOGUL 6736MOUNTFIELD SSI DCY MOGUL-ET2416Lester C. Jones & Sons Inc.Massey , MD
END-ROAD MAYFIELD BLAZEDE-SU D MAYFIELD 893-ET2416Duane & Janet MolhoekFalmouth , MI
KHW MCCUTCHEN AFLIRT-ETDE-SU BKM MCCUTCHEN 1174-ET2416High Altitude SyndicatePlatteville , WI
S-S-I OCOSMO MARIAH 8714-ETO-COSMOPOLITAN-ET2414Select Sires Inc.Plain City , OH
LANGS-TWIN-B S-SIRE 4961-ETSEAGULL-BAY SUPERSIRE-ET2414F. & L. Baumann and F. LangMarathon , WI
KP-ACK HUNTER 316-ETCOOKIECUTTER MOM HUNTER-ET2412Kevin & Pete AckermanSauk Rapids , MN
AL-LEW MGL ALABAMA 1196-ETMOUNTFIELD SSI DCY MOGUL-ET2409Scott I. SollenbergerSaint Thomas , PA
CLEAR-ECHO CLARTA 2868-ET2405Clear Echo Farm LLCSchuylerville , NY
PENN-ENGLAND RUTHIE 9512AMIGHETTI NUMERO UNO-ET2404Barry M. & Diane H. EnglandWilliamsburg , PA
T-SPRUCE O-COSMO 7270-ETO-COSMOPOLITAN-ET2399Arnold B. GruenesRichmond , MN
OCD PARISH DARLING-ETPLAIN-KNOLL PARISH 5534-ET2396Oakfield Corners DairyOakfield , NY
AL-LEW MGL ARCADIA 1194-ETMOUNTFIELD SSI DCY MOGUL-ET2392Scott I. SollenbergerSaint Thomas , PA
NORTH-ECHO MOGUL 2856-ETMOUNTFIELD SSI DCY MOGUL-ET2390Clear Echo Farm LLC & North FoSchuylerville , NY
NO-FLA PETRONE 34760-ETWELCOME SUPER PETRONE-ET2389North Florida HolsteinsBell , FL
S-S-I SHAN TEANNA 8755-ETLADYS-MANOR MAN-O-SHAN-ET2388Select Sires Inc.Plain City , OH
ROYLANE BOOKEM MEG 5457-ETDE-SU 521 BOOKEM-ET2388Gary & Bruce RoylanceWarden , WA
KP-ACK MOGUL 320-ETMOUNTFIELD SSI DCY MOGUL-ET2386Kevin & Pete AckermanSauk Rapids , MN
PINE-TREE 4283 NUM1 5577-ETAMIGHETTI NUMERO UNO-ET2384Matthew J. SteinerMarshallville , OH
S-S-I MASSEY BARRIE 8784-ETCO-OP BOSSIDE MASSEY-ET2379Select Sires Inc.Plain City , OH
SEAGULL-BAY ALEXA II-ETDE-SU BKM MCCUTCHEN 1174-ET2377Seagull Bay Dairy Inc.American Falls , ID
JOOK 1H10297 6667EILDON-TWEED SUPER CHAP-ET2376Lester C. Jones & Sons Inc.Massey , MD
OCD MCCUTCHEN DETROIT-ETDE-SU BKM MCCUTCHEN 1174-ET2376Oakfield Corners DairyOakfield , NY
ROORDA MCCUT DANNY 15902-ETDE-SU BKM MCCUTCHEN 1174-ET2375John & Larry RoordaPaullina , IA
CLEAR-ECHO ODADDY 2892-ETRONELEE SSI O DADDY-ET2365Clear Echo Farm LLCSchuylerville , NY
ROORDA MCCUT MOANA 15909-ETDE-SU BKM MCCUTCHEN 1174-ET2362John & Larry RoordaPaullina , IA
KP-ACK MOGUL 319-ETMOUNTFIELD SSI DCY MOGUL-ET2361Kevin & Pete AckermanSauk Rapids , MN

Of the 84,549 dairies that left the industry in the past 22 years, the majority did so between 1992 and 2002.  Regardless that does not negate the fact that since 2003 the decline every year has been at least 3.3%.

How the West Was Won

TABLE 2 Regional Herds, Cows and Herd Size Since 1992

TABLE 2 Regional Herds Cows and Herd Size Since 1992

Click to enlarge

figure 2 herds by region 2013

Click to enlarge

Despite the reduction in the  number of dairy farmers, national cattle numbers actually held seeing only a 0.1% reduction to 9.221 million cows.,  Production actually increased slightly (0.3%) to 201.2 billion pounds.  However, that is the slowest rate of production growth recorded in the past 5 years.

figure 3 herd size by region 2013

Click to enlarge

An obvious trend over the past 22 years is the significant growth in herd sizes.  The national average herd size has risen from 74 cows per herd in 1992 to 167 cows in 2013.  The biggest change in herd size has occurred in the West where there has been a 58% increase to 279 cows per herd.  In fact that average herd size in the West is more than 5 times the size of the herds in the other regions.

The Story by State

TABLE 3 Dairy Farm Numbers by State

1FAGENOFidji x Ruacana152141121RSH
2RED MISTElburn x Spencer149135120WEU
3ERAGONElburn x Spencer149130127RSH
4ELSPEElburn x Spencer147134122RUW
5TABITTableau x Mr Burns144136120RUW
6MORRISFidelity x Spencer144137121RUW
7DESMONDDesk x Malvoy143136129RUW
8ELLMAUElburn x Carmano142124123RUW
9MILKYWAYMitey x Lawn Boy142132116RUW
10LANZAROTELaron P x Mr Burns142125126RUW
11GEERTFidelity x Spencer141135114RUW
12ATTIKAAxion-Red x Oman141134109RUW
13CAN BECamery ISY x Carmano141124120RUW
14AIRY-P-REDColt P x Pembroke140124118RSH
15FILIASFidji x Mr Burns140126118RSH
16DESKDestry x Gogo140129124RUW
17FIEROFiction x Tocar14014298RUW
18COLOUR PColt P x Destry140123133RUW
19LADYS SONLaron P x Zabing140128124RUW
20TARGETTableau x Ramos140125121RUW
21PASCHA REDSavage x Spencer140126116RUW
22LACOSTELarson x Destry140129132LTR/ZBH
23FALSTERFiction x Mr Burns139135118LTR/ZBH
24DEEPSPACEDeedle x Tocar139139124RUW
25KUMOFiction x Spencer139138105RU

Figure 4 Herds by State Heat Map 2013

The greatest percentage of declines has occurred in the Southeast region (6.5% decline), and the greatest total decrease occurred in the Midwest (1,755).  The only state to actually show an increase was Pennsylvania that had a 60 herd (0.8%) increase in 2013.

TABLE 4 Total Milk Production by State 2013

1ELWOODElayo x September137132119MAR
2MALVOYMarmax RF x Celsius136127109RUW
3SELONOSpencer 2 x Achtung13512999RSH
4LARON PLawn Boy x Shottle133115120ZBH
5LEVANTLawn Boy x Classic132128113WEU
6COLD BOYSpencer 2 x Oman13212093RUW
7TABLEAUTlanet x Faber132121117RUW
8MAXIMO-REDMarmax RF x BW Marshall131137106OHG
9TOCARTopred x Lucky Leo131140106RUW
10JERUDOJerom x Rudolph130121108VOSt
11GOLDEN EYEGogo x Lightning128127106RUW
12LA CROSSEColby-Red x Dutch Boy127132107ZBH
13MALLOWMalvoy x Talent127122117RUW
14SERANOSeptember x Stoll126120102RUW
15FALIPOFaber x Tulip126122106RBW
16LUCATONILaruel x Talent125111116WEU
17CRUNCHCarmano x Lightning125116108WEU
18CAREMCarmano x Colby-Red124112121RUW
19BURLENTMr Burns x Talent124113119RBW
20CARAMELCarmano x Modest123114117RUW
21WESTPOINTWestwind x Kian123104112RUW
22STYLEStabilo x Origin123123106RUW
23STERNBOYStabilo x Komtur12312595MAR
24EMDARUElayo x Talent123124116RSH
25JOTANJordan x Durham123109125MAR

Figure 5 Total Milk Production by State 2013

Figure 6 Production per Herd – By State 2013

Table 5 Dairy Cattle Population by State 2013

1SNOWMANOman x BW Marshall x147145126GOEP
2GUARINIGoldwyn x Oman147131125RBB
3BILLARDBillion 3 x Oman145139110RUW
4MAGORIANMascol x Oman145145102Masterrind
5OMEGAOman x Manat14313695RMV
6MAVIDMascol x Eminenz142137108WEU
7BJÉRKBolton x Oman142139116Masterrind
8MALIXMascol x Oman140128104WEU
9FROSKOFrosty x Shottle139138105LTR
10ENZOEncino x Oman13913598RUW
11OMAGICOman x Lambada13913394RUW
12BAKOMBREBaxter 2 x Goldwyn139131119Masterrind
13MASCOLMtoto x Rudolph138127105LTR
14NOG MATOMascol x Laudan138123115RMV
15MARACASOman x Convincer13813197Masterrind
16BANDINIBillion 3 x Morty137130109RBB
17SHOWTIMEShottle x Brett137131123RMV
18MASCARPONMascol x Oman137130100WEU
19GIBORGibbon x Sunnyboy137120103RUW
20GUNNARGoldwyn x Ford137125128RMV
21MAINAUOman x BW Marshall x136125100Masterrind
22JUGADORJardin x Finley136139118RBB
23WIZZARDWebster x Cash136130101OGH
24STERNGOLDStol Joc x Shottle136117120RUW
25LEKOLaudan x Jocko Besn136126119RBB

Figure 7 Dairy Cattle Population by State 2013

Figure 8 Herd Size by State 2013

Figure 9 Production per Cow by State 2013

Table  6 Top States 2013 by Milk Production Efficiency

LONG-LANGS OMAN OMAN-ET3212149083820.250.2712
DE-SU GILLESPY-ET298725746969-0.22-0.1213
BADGER-BLUFF FANNY FREDDIE2985171766590.030.025
ENSENADA TABOO PLANET-ET296624978982-0.030.018
FREUREHAVEN NIAGARA2943221091770.10.038
END-ROAD O-MAN BRONCO-ET292322917075-0.1306
REGAN-ALH DIPLOMAT-ET29051382497300.2410
UFM-DUBS ALTAESQUIRE-ET2864973110630.690.273
GEN-I-BEQ BRAWLER285591062460.260.1410
SILDAHL JETT AIR-ET2824129272310.23-0.112
MAPLE-DOWNS-I G W ATWOOD281859662300.370.0919
GOLDEN-OAKS MEDFORD-ET28001555120430.58-0.068
CRACKHOLM FEVER279762056200.32015
DOMICOLE CHELIOS279484578410.440.1114
MAINSTREAM MANIFOLD2789179585700.170.092
O-BEE MANFRED JUSTICE-ET2780144780750.250.25-3
GEN-I-BEQ TOPSIDE2768119772450.260.0512
OCONNORS JAY2764129260740.120.2710
LIRR DREW DEMPSEY275636442340.290.1915
GEN-I-BEQ ALTABUZZER2748141782460.2806
SCHILLVIEW GARRETT-ET2746166965580.030.034
DELABERGE DEMOCRACY274544369470.490.289
HYLLTOP PRESLEY RED273486678560.430.246
BUTOISE BAHAMAS272617255273-0.10.146
WABASH-WAY EUREKA271116795169-0.10.127
CROCKETT-ACRES EIGHT-ET2706120570720.240.280
SANDY-VALLEY BOLTON-ET270620337157-0.03-0.089
EMILANE LARKIN270216464157-0.180.039
DEWGOOD BENEFIT270084145490.130.187
DE-SU BOWMAN-ET2692137771440.19-0.0110
ALLYNDALE-I ATTICUS268019447220.380.1414
CLAYNOOK TENNESSEE267459238400.150.1813
MORNINGVIEW HASKEL2670193587640.150.015
REGANCREST-PJ MAXLIFE-ET266971583450.530.1910
BRAEDALE GOLDWYN265631749280.360.1612
DYMENTHOLM SOLSTICE2655148570680.150.164
GILLETTE WINDBROOK265493762400.260.0715
CHARLESDALE SUPERSTITION-ET265317792857-0.33-0.029
SANDY-VALLEY BRYSON-ET2649160269520.07-0.0210
COMESTAR LAUTREC2648116872470.260.079
UFM-DUBS OLEGANT-ET263912864042-0.070.018
WA-DEL JUNCTION-ET263871193570.620.3-4
ROCKYMOUNTAIN LEGACY2629225788530.04-0.184
COMESTAR LAUTHORITY262852559260.380.0815
COMESTAR BRIGADE2622193977600.06-0.029
WINDY-KNOLL-VIEW PARTNER2617114248640.070.238
WESSELCREST AIRBORNE-ET261515212843-0.24-0.058
JOLICAP CARRERA2612159662580.050.065
VIORIS SLEEMAN260924506889-0.190.074
STANTONS ALTARIC-RED260890671550.350.226
VALBLANC LIBRA260610241833-0.18-0.0113
KARONA FANTASY260518465161-0.1306
BO-IRISH ALTON-ET259822347177-0.090.031
TRAMILDA-N ESCALADE-ET259569352220.24-0.0113
GINARY ALTABERNIE258718154251-0.21-0.085
BOMAZ OMAN KRAMER 561-ET258521955953-0.2-0.165
CHASIN-RAINBOWS JADON-ET258114324852-0.040.0410
DUDOC MR BURNS258013103267-0.150.27
EXPRESS BOLLY257787654400.20.17
CHARITY ALTAGRATIS-ET257159957440.320.219
HEATHERSTONE-V MCGUIRE-ET257014174929-0.02-0.159
MORSAN BORIS256939857300.410.1511
JEWELED-ACRES SHARKY-ET256422287882-0.040.07-4
GINARY JAKE256326765958-0.33-0.247
GILLETTE CANYON25631214435100.17
GILLETTE JORDAN256284947290.150.0110
DIAMOND-OAK FROSTY-ET2560143166540.120.060
BRYHILL LOYAL256065955290.290.0611
GILLETTE WATCH OUT2558128191430.40.013
PICSTON SHOTTLE-ET2558115646340.04-0.0410
GENO MARITIME2557171365480.03-0.067
SILDAHL AIRRAID2555169082410.19-0.136
TRUE-BLUE SHOWBOAT-ET2552117946500.030.116
R-E-W SUNBURN2551118752550.090.1410
BEAUCOISE RHAPSODY255177532450.030.177
SMITHDEN AARON255196349410.120.0710
GINARY BRAD254516654245-0.16-0.099
GEN-I-BEQ LAVAL254121526561-0.12-0.086
ARDROSS STERLING2539112577590.330.195
CRACKHOLM FOCUS2539116946570.020.173
HARDWOOD BOSTON-ET253946744380.260.27
SMITHDEN ADMIRAL253895673390.350.077
PETHERTON ROX ITAK253687448480.150.175
GREENLEA ARTIE-RED-ET253558936470.140.2411
REGANCREST REGINALD-ET253538641290.260.1414
NURRES SLUGGER-ET253313363960-0.090.147
DEMARC RANCH253215074051-0.130.015
KERNDT BRILLO-ET252823725466-0.28-0.14
REGAN-ALH DU RITE-ET252887850600.160.284
HENDEL BIGSTONE-ET252895861600.240.244
ROCKYMOUNTAIN MARKER252518754851-0.18-0.19
VELTHUIS SOLSTICE252512729310.230.248
BREEZE HILL CIRCUIT2525-33755140.660.2314
COMESTAR LAWMAN2521129372350.23-0.0613
CLEAR-ECHO DRISCOLL-ET252186881340.460.064
MICHERET INFRAROUGE252171029280.030.047
DUDOC RADIUS251813443839-0.11-0.054
GILLETTE STANLEYCUP251160065220.40.0213
GILLETTE WINDHAMMER251160065220.40.0213

Figure 10 Top States 2013 by Milk Production Efficiency

In evaluating which states are doing the best you can look at which states have the most production (i.e. California, Wisconsin & New York), or you can look at which states have the most producers (i.e.  Wisconsin, Pennsylvania and New York).We prefer to rank by which states are producing the most milk per cow from the most efficient herds.  Using that ranking  we see the following top 10: New Mexico; Arizona; Nevada; California; Colorado; Idaho; Texas; Washington; Florida; Utah).  It is interesting to note that all of these herds are located in the West except for Florida and that Wisconsin, despite having the most producers and the most cattle, falls to #23 in the rankings for milk production efficiency.

How Does Canada Compare?

Table 7 – Canadian Statistics

VEAZLAND MARION-ET212928905664-0.43-0.25-1
KELSTEIN OLIVER244627898289-0.17-0.031
FUSTEAD EMORY BLITZ-ET207327031623-0.71-0.538
GINARY JAKE256326765958-0.33-0.247
DE-SU GILLESPY-ET298725746969-0.22-0.1213
B-HIDDENHILLS MAR MARMAX-ET229425384471-0.43-0.1-2
WILLOW-MARSH-CC GABOR-ET216225122143-0.61-0.323
ENSENADA TABOO PLANET-ET296624978982-0.030.018
STANTONS SILENT204024693159-0.51-0.18-4
BRAEDALE BIGBEN16002463435-0.75-0.382
VIORIS SLEEMAN260924506889-0.190.074
MORSAN ROSETTE218724454348-0.42-0.261
MORNINGVIEW-MT-I LAKEVIEW227123835677-0.28-0.020
KERNDT BRILLO-ET252823725466-0.28-0.14
DRIFTY-HOLLOW MASTODON226523714354-0.39-0.23
END-ROAD O-MAN BRONCO-ET292322917075-0.1306
GINARY ROCKEFELLER195822824937-0.29-0.315
ROCKYMOUNTAIN LEGACY2629225788530.04-0.184
MR MILLION MEGA-MAN-ET213922573536-0.4-0.322
MAINSTREAM CROWN-ET178622522613-0.5-0.514
BO-IRISH ALTON-ET259822347177-0.090.031
JEWELED-ACRES SHARKY-ET256422287882-0.040.07-4
FREUREHAVEN NIAGARA2943221091770.10.038
ETAZON ADDISON170922051165-0.62-0.06-7
COMESTAR EL TOREADOR226722015042-0.27-0.259
REGANCREST LONGTIME237321962457-0.5-0.1310
BOMAZ OMAN KRAMER 561-ET258521955953-0.2-0.165
GEN-I-BEQ LAVAL254121526561-0.12-0.086
BONTEMPS-I ASHTON231021524049-0.34-0.188
MR ELITE-ET192321362148-0.51-0.190
DA-SO-BURN DAMASK-ET165921221934-0.51-0.3-3
PETHERTON DARBY18992121838-0.6-0.260
VELKOMMEN-VALLEY JORIDY-ET196020941735-0.53-0.282
RENADO ROCKWOOD237120724144-0.31-0.22
MY-JOHN DENBY-ET205320504351-0.28-0.14-4
ROCKYMOUNTAIN LONGSUIT226820405453-0.18-0.117
GEPAQUETTE CYCLONE193020363736-0.33-0.261
SANDY-VALLEY BOLTON-ET270620337157-0.03-0.089
COXLYN CAVAN197120232641-0.43-0.222
LE-O-LA EMERSON CLASSIC-TW239720092055-0.47-0.093
RICH-J SOSA-ET184320091733-0.51-0.28-3
MS POSIBILITY PRODUCER-ET226020034949-0.2-0.134
DELABERGE LAZARO18842000-937-0.72-0.24-3
PREMIER-G BLACKSMITH-ET240719955152-0.19-0.115
RICECREST MURPHY-ET234219785662-0.14-0.02-2
ALTAPPEL GLENDOR242119706943-0.02-0.172
CO-OP LONDON COSMO-ET23411967757-0.56-0.07-1
COMESTAR LITTORAL20781967340-0.61-0.215
SANDY-VALLEY BRISK-ET173419673038-0.37-0.22-6
DOMICOLE CHESTER235919595452-0.18-0.116
BENNER JUDO2345195884440.12-0.175
LA PRESENTATION CHARLY13891955740-0.57-0.21-13
STANTONS ENTER211519491041-0.55-0.191
COMESTAR LOUDANO194019442339-0.42-0.210
BEYERCREST JUDD-ET203019412229-0.43-0.291
COMESTAR BRIGADE2622193977600.06-0.029
MORNINGVIEW HASKEL2670193587640.150.015
WELCOME GARTER-ET209419334949-0.2-0.120
EMERALD-ACR-SA T-BAXTER247319146838-0.02-0.216
THORNSPYC TOYBOY17171907521-0.58-0.353
HORSTYLE MAXWELL-ET218319013467-0.310.044
EMERALD-ACR-VR CHASER-ET212319013053-0.35-0.07-8
LADYS-MANOR LANCE-ET174818871630-0.49-0.28-1
MY-JOHN ROB-ET221218823276-0.340.122
GLEN-TOCTIN LASHBAX-ET230218782453-0.4-0.084
ROCKYMOUNTAIN MARKER252518754851-0.18-0.19
COMESTAR LAUBUCK211918655929-0.07-0.277
GILLETTE WALLACE233318594042-0.26-0.168
GILLETTE WHITEFACE233318594042-0.26-0.168
RALMA-RH TRUMPET-ET222618595535-0.12-0.223
CLOVERHILLFM PLYMOUTH-ET237318576258-0.05-0.033
SUNNYLODGE SEYMORE17721856926-0.52-0.28-1
KARONA FANTASY260518465161-0.1306
GEPAQUETTE MESQUIN216118454154-0.24-0.061
GILLETTE WINDOVER202618431422-0.47-0.328
JNP-ATH-MOR MOSAIC-ET195118333439-0.31-0.191
MOHRFIELD FORM TRADEMARK-ET17381821-226-0.61-0.29-1
GINARY ALTABERNIE258718154251-0.21-0.085
POLY-KOW ALLTOP-ET247918114247-0.22-0.17
MISTER MADAGASCAR195718093137-0.31-0.2-1
STANTONS PRONGER12621806-913-0.69-0.39-1
MAINSTREAM MANIFOLD2789179585700.170.092
CHARLESDALE SUPERSTITION-ET265317792857-0.33-0.029
CRESCENTMEAD-A MOSES-ET14081777624-0.53-0.29-10
ROCKYMOUNTAIN LOCKMASTER226617764731-0.16-0.226
OCD ALTAPAXTON-ET20811771435-0.55-0.191
PLUSHANSKI ATMEN-ET225817672821-0.33-0.318
LEHOUX FESTIVAL219317612336-0.39-0.196
BLOSSOMDAIRY CALVIN183917583336-0.27-0.18-7
HA-HO CUBBY MANFRED-ET226017484752-0.17-0.04-8
JOCKO BESN221517424663-0.170.06-2
GILLETTE WOLF195317342216-0.37-0.344
GILLETTE WYMAN195317342216-0.37-0.344
SPRINGHILL-OH ELLIPSIS-ET17961728619-0.51-0.322
BUTOISE BAHAMAS272617255273-0.10.146
WALLACEVIEW PATTON2411172063410-0.133
BADGER-BLUFF FANNY FREDDIE2985171766590.030.025
RALMA COPPER226617165121-0.12-0.36

*Rankings are where each province would rank in the U.S.

Some interesting stats present themselves when we compare Canada to the U.S.

For example:

  • All of Canada has about the same number of herds as Wisconsin and Missouri combined
  • Both Wisconsin and California have more cattle each than all of Canada
  • More milk is produced in each of Wisconsin and California than in all of Canada
  • The average Canadian herd is about 60% smaller than the average herd in the U.S.
  • The average US cow produces about 5% more milk than the average Canadian cow.  (21,807 lbs vs 20,712 lbs)

The Bullvine Bottom Line

While there are certainly drastic differences in operation size across the different regions in the USA, the trends seem to be the same.  The number of dairy farmers is getting smaller and smaller and production is increasing at a slower rate than that of the U.S. population.  Continued increasing feed costs and decreased margins are only going to cause more producers to leave the US industry.  Since 2009 a perfect storm of plummeting milk prices and high feed costs have combined to push dairy margins to the brink.  Thousands have been forced out of business and many of those who survived are now deeply in debt.  Nationwide, dairy farmers lost $20 billion in net equity between 2007 and 2009.

Increasing global dairy marketplace competition and a US milk price that, although at a record high, remains lower than prices in Canada, China, Australia and New Zealand is driving producers out of the industry.  Unless more is done to protect dairy margins, these alarming trends are going to continue.  The day is coming in the United States when there will be very few milk producers left.  Is the US dairy industry coming to an end or a turning point?



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Say Good-Bye to Supply Management

Friday, January 24th, 2014

For years the topic of Supply Management has been a hot button issue for dairy producers around the world.  Those who operate under a supply management system, such as the one in Canada, are strong advocates for the program.  While those that do not, such as New Zealand, Australia, and the US, tend to look at it with envy and even disdain. Recently there has been a lot of international talk about supplying of the supply management in the dairy sector.  The EU is removing supply management and the US government, who was  proposing a supply management system,   removed it in their most recent farm bill (Read more:  Dairy Farmers from Across the Nation Oppose Supply Management and  Compromise Reached: Supply Management OUT of Dairy Policy in Farm Bill).  With world trade becoming a greater and greater reality for all countries, it is only a matter of time before supply management, as we know it, no longer exists.

With that in mind we decided to take a look at the Canadian Supply Management System and the resulting impact, if it were removed.  Canada’s Milk Supply Management System was created to solve milk surpluses and low returns to farmers.  Understanding how this policy originally came into practice helps explain its longevity.  And understanding how the system works in practice points to the pressures it faces today.  These include astronomical quota costs, unanticipated dairy imports and globally uncompetitive pricing.  The system has had to evolve to address a range of domestic and trade changes.  The current milk supply management operates under three “pillars”: production controls (quota), administered pricing, and import controls.  As conditions have changed, regulations under supply management have changed.  It has been broadly successful in doing so, but its complexity has created operating costs and burdens for government and the dairy industry. Furthermore, with a more global economy, it has recently become a stumbling block in Canadian government world trade talks.  (Read more: Are We Playing Hide and Seek With Supply Management? and  Why the Future of the North American Dairy Industry Depends on Supply And Demand).

What’s the Story around the World?

Comparing Canada to the rest of the world, we find that New Zealand and Australia are at the highly market-oriented end of the continuum.  Canada is at the highly protectionist end. The U.S. and Netherlands/EU are in between.

Canadian milk production has been essentially constant since the mid-1970s and is actually down compared with the early 1960s.  At the same time, milk production in the U.S. has increased steadily.  In Australia, it has increased markedly following policy changes, prior to recent years when widespread drought limited production.  Netherlands dairy production increased steadily before quota controls were imposed in the 1980s and it has been relatively steady since, with a recent increasing trend.  New Zealand’s milk production is significantly up.

And what about milk pricing?  The national patterns diverge to a degree.  The available data suggests that prior to the mid-1980s, milk prices in the countries considered here broadly increased.  Canadian milk prices have continued to increase since the 1980s.  In the U.S. prices abandoned their trend of increases in the 1980s and have since become more volatile, consistent with the reduction in support pricing.  Similarly, in the Netherlands, the increasing price trend ended in the late 1980s.  Milk prices in Australia increased through the 1980s and plateaued in the 1990s. However, with the recent super market price wars, the price for milk in Australia has been extremely volatile.  New Zealand has seen a trend of higher prices and increased volatility, with some similarity to Australia.

Say Good- Bye to Supply Management - figure 1

Figure 1 presents divergences in milk pricing, using the U.S. as a reference.  The chart plots monthly P5 Eastern Milk Pool27 (Canada) blend milk prices versus U.S. Federal Order blend prices for New York/New Jersey and for the Upper Midwest since 1997.  Milk prices in Canada are generally much higher than those in the U.S. Over that period, the eastern Canadian price averaged $C63.05/hl, while the U.S. Midwest price averaged $C39.42/hl and New York/New Jersey averaged $C44.31/hl.  Moreover, because U.S. milk prices are much more volatile than those in Canada, the price differential is commonly wider than these averages suggest.  For example, the price spread between eastern Canada and the Upper Midwest U.S. has frequently exceeded $C40/hl— more than the average value of the Upper Midwest price itself. (Read more: Canada’s Supply-Managed Dairy Policy: How Do We Compare?)

The key advantage that Canadian producers have enjoyed over its peer countries is that fluid milk markets are characterized by seasonality that creates surpluses, which are diverted to industrial milk markets and thus result in lower industrial milk prices.  Sudden losses of export markets exacerbate domestic surpluses and depress milk prices.  Under persistent surpluses, with their associated inequities and low returns to farmers, the initial response is to mitigate adjustment through 27 The P5 Eastern Milk Pool is an interprovincial pooling agreement among Canada’s eastern provinces (Ontario, Quebec, Nova Scotia, New Brunswick, and Prince Edward Island) mandated pooling systems and more interventionist policies, such as price supports, product surplus removal programs, and production quotas.  These are eventually reduced or eliminated due to their cost burden.  The industry then adjusts, resulting in market growth.  Canada has not experienced the same pressures to reduce or eliminate interventionist policy that its peer countries have, so Canada continues to use certain approaches that its peers have dropped.  Nevertheless, industry adjustment has occurred in Canada, but without the market growth seen elsewhere.

Therefore, while Canada has not seen the growth that other world markets have, it also has not seen the extreme volatility that those other markets experience.  This stability is very much appreciated by Canadian milk producers, despite the high cost of entry and production (Quota, and Quota financing costs).

The World is Changing!

After 30 years in a supply management system the UK has now abandoned it.  Moreover, the EU as a whole is pushing for other countries to remove supply management as well.  (Read more: Canada May Drop Cheese Tariffs to Access EU Beef Market and Canada’s dairy farmers ‘angered and disappointed’ by EU trade deal that would double cheese imports).  This is causing great pressure for Canada to follow suit.  As the Canadian government seeks to open trade for all industries, especially Oil, Lumber and Beef, that access often comes at a cost. In Canada’s case that cost is opening up the Canadian dairy market.  More competition will mean that Canada’s high milk costs will have to go down thus decreasing the net return to producers.  While I don’t foresee the abolishment of the quota system immediately, it will happen.  As Canada opens up its markets to the world, that means that the Canadian government will have to further subsidize the milk price or allow the milk price to drop.  As the Canadian government is already running tight on its fiscal position, they are not likely to subsidize this system for very long.

While no one is arguing the benefits that supply management has had for the Canadian dairy farmer, that protection has come at a cost.  One of the greatest costs that I don’t think many realize is that it has allowed many producers to become complacent about their operations.  They have not been forced to be as efficient as possible.  Those that have been the most complacent are the ones who are going to feel the greatest hurt as Canada continues to open up access to world markets.  For those Canadian dairy farmers who think that the Canadian government will protect them till the end….what about the beef farmers, lumber and oil industry?  How can the Canadian government afford to protect and grow the market for all of them?  Everything has a price. (Read more: Save Frank & Marjorie Meyers Farm – The Army Is At The Gate & This Farmers Number Is Up!)

As a clarification point, while supply management as we know it is threatened, there is no question that the Canadian government is committed to a strong domestic agricultural industry.  Many other countries, including the European Union and the United States enact policies that subsidize (directly or indirectly) domestic production. This is something Canada does not currently do.  As the world market evolves, the Canadian system may have to move toward global markets and away from supply management.  It is also important to note that Canada gives more access to imported products than many other countries give in any single sector. Canada currently imports over 6% of the market for dairy products and more than 7.5% for poultry.  In contrast, the United States gives only 2.75% access to their market for dairy products and Europe offers a mere 0.5% for poultry. These will all be areas that will be addressed as world trade evolves.

The Bullvine Bottom Line

The world is rapidly moving to a free market economy.  This highly market oriented system will mean that those producers who can produce milk the most cost effectively will excel and those that are not efficient will perish.  Canada and its quota system that has done an amazing job at protecting its producers are most likely to be the hardest hit by these global forces.  Producers that are looking to the next generation need to seriously evaluate their operations and become as efficient as possible as fast as possible.  The message is clear.  Canada will be saying goodbye to the current supply management system.


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Recently I took the opportunity to review the Canadian Breed Strategy presented by Holstein Canada.  (Read more: Holstein Canada Breed Strategy, The Bullvine Feedback) I started to ask myself, “What, exactly, is the role of a modern dairy cattle breed association?”

First of all let’s get one thing clear.  I have the Holstein Canada logo tattooed on my chest.  That was a decision that I made as a young adult in order to display my passion for two of the greatest things in the world, Holstein cattle and Canada.  So for me to take a critical look at this is something I do with passion.  The perspectives that motivate me result from personally observing both the producer side as well as the association side.  My father was head of type classification and genetic improvement at Holstein Canada for 18 years.  That background motivates my review which essentially boils down to one question.  “Are breed associations still relevant?”

Now let’s be realistic, the role of the Holstein breed associations is much different than that of the colored breed associations.  Holsteins represent 92% of the dairy cattle in North America.  So for the colored breeds focus is driven by the need for  awareness and preservation.  What is the focus of the Holstein breed associations?

Politics vs. Corporation

For me this question really begins with the fact of how you look at breed associations?  Are they similar to a government entity and therefore they are to represent the best interests of their members and function mainly in a political role?  Or are they to function similar to a corporation and work at growing the profitability of the association and its members?  For me, I would answer that it’s a little bit a both.

The Elephant in the Room

It`s time now to consider the elephant that is hiding in the corner of the room.  In North America  approximately 22% of all Holstein cattle are registered with either Holstein USA or Holstein Canada.  That means that the large majority (78%) of the Holstein cattle in North America are not registered with either breed association.  When such a large majority is not seeing the value in registration and the association programs, I have to ask, “Are Holstein associations relevant to the majority of today’s dairy producers?”

On a personal level, I see great value in purebred dairy cattle, registrations, type classification, and the many other programs.  But obviously the fact that almost 78% of the Holstein Cattle in North America are not registered tells me that the large majority do not see the value.  Why is that?

When I ask that of many the commercial producers that I chat with the answer often boils down to one comment.  “I don’t see the value in the investment.”  Most of the time this position is held by commercial producers that run their operations more like a corporation, rather than passion for a specific breed or way of life.  While many are larger operations, I get the same answer from both large and small.

Technology has changed the world

In the 1980s the value of a purebred heifer of fresh cow was far greater than that of a grade.  But in today’s marketplace, the difference in prices does not warrant the need for registration.  Also reducing the  pressure  for registrations is the fact that computerized record keeping has evolved to a state that the records available on-farm are as complete as those available from the breed associations.  This has further reduced breeder’s perception of the value of registration.

So then it comes down to the other programs that breed associations provide.  The largest of them has to be type classification.  Now let’s be clear I am a HUGE fan of type classification.  But more and more I hear producers wondering if it is really worth it.  (Read more: Is type classification still important?)  They cite things like the use of genomics as a reason that they no longer need to type classify.  Well as we all know Genomics is not a perfect (Read more: The Genomic Bubble Has Burst?, Genomics – Lies, Miss-Truths and False Publications! and How Genomics is Killing the Dairy Cattle Breeding Industry), but it is a great tool.  However, in order to improve its accuracy, the breed still requires the phenotypic data from programs like type classification and milk recording.

While we are talking about technology, why can’t we use more of this on-farm information for genetic evaluations?  Sure I have heard the concerns about accuracy of data, and the ethics of allowing producers to record their own data.  But who said that this data had to be used for female genetic evaluations?  Why can’t we include this large data set in bull genetic evaluations, so that we can greatly increase the accuracy of sire proofs?  We could even develop more management based genetic evaluations that connect more directly to the bottom line?

Who Cares About Index?

From many of the most passionate breeders in the world, I hear “mixed” comments about the index systems, like TPI, LPI, etc.  (Please note that TPI is a trademark of Holstein USA) Yet breed associations continue to focus on this as a major issue.  While there is no doubt that having a national index has done wonders for marketing and genetic advancement.  In reality every breeder should have their own index.  The best index is the one that the works hand in hand with specific management goals.  Having one National Index isn’t working.  First of all we are in a global marketplace.  Secondly, we need at least have three difference indexes.  One that represents the needs of the seed stock producer (similar to TPI or LPI).  One that represents the needs of the commercial producer (similar to NM$).  Finally one that works for those breeding for the show ring (similar to CONF or PTAT).  Only then will you start to settle this debate.

As long as we continue to try to promote one “unified” national index, it will continue to be seen as nothing more than a marketing tool.  If you really want to have a tool that is for breed advancement and not for marketing, you need to understand that every breeder’s needs are different.  And when you start to look at things from the different perspectives of all producers, and try to represent and respect each one of their individual needs, you will start to see the greatest advancement in the breed.

The Bullvine Bottom Line

Really the breed strategy must come down to, “How do you make me more profitable?”  All other issues are secondary to that.  For years I have heard “Well a higher classified cow will last longer in your herd and produce more milk over their lifetime.”  Well I am sorry to tell you that the data does not always support that conclusion.  What if the cow has reproduction issues?  What if they don’t milk very hard?  All of these challenges to profitability also greatly reduce their productive life, yet they are not factored into most of the programs that breed associations currently offer.  If you really want to get a larger share of the national herd pie, you need to show the average producer the measurable effect that registered animals and the associated programs have on their bottom line.  All other issues are just smoke and mirrors that many of the politicians (Breed association board members) spend far too much time focusing on.  I want my breed association to “Show me the money!”


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Culture wars are being waged at a supermarket near you.  Traditional yogurt is under attack from upstart Greek-style brands. For a dairy industry that is starved for product innovation, this could be a great thing. Greek yogurt is leading the charge and winning by far the largest share of the marketplace. When was the last time you talked about your new “healthy snack”?  Greek yogurt which is creamy, thick and slightly tangy is a tasty subject not only in North America but around the world as well.  New brands continue to strive for marketplace position as they try to meet the insatiable appetite for this dairy product.

It could mean the challenge is now to other dairy products.

Over a third of the yogurt in a typical grocery store is now Greek, in varieties from low-fat to fruit-on-the-bottom to tubes for kids.  Because shelf space is limited, the Greek squeeze means consumers have had to say goodbye to some varieties of traditional-style yogurt and more obscure flavors.  In addition pudding cups, margarine and other products with the misfortune of usually sitting near yogurt also are harder to find. This could turn into a civil war where there are losses in other parts of the dairy marketplace.

Global Yogurt Products Set a Good Example

Looking globally Europe has much more choice to entice consumers.  With the North American focus on eating yogurt primarily for breakfast there are still opportunities to expand into the lunch and dinner specific markets.  Marketing that emphasizes the health benefits are also realizing expanded sales. Yogurt is a great addition to the diet to help meet the recommended three servings of low fat and fat free dairy. The reality is that most North Americans are currently consuming only about half of the recommended servings. Here is a ‘better for you’ dairy industry opportunity waiting to happen. If you’re still not convinced, look at the lineup outside the next Yogurt Bar that you pass.

Yogurt consumption around the world, and especially in the U.S., has boomed.

We are decades past the yogurt reputation as an odd hippie concoction.  Today yogurt sits at a North American eating-trend sweet spot.  Today many people are eating fewer sit-down meals and favor hearty snacks on the go. Yogurt provides many options and may come as a drink, frozen product or dessert. Some brands are also fortified with extra vitamins, minerals and fiber. Yogurt is portable, high in protein and consumers often perceive it as healthier than other sweet snacks (though many varieties are high in sugar). On the bright side, this rapidly growing market has room to continue to evolve as emphasis on kid friendly lower sugar snacks are sought out.  (Read more: MILK MARKETING: How “Got Milk?” BECAME “Got Lost” and “Got Milk” is becoming “Got More”)

Riding that healthy wave, Greek products have shown phenomenal growth.

Most yogurt with Greek on the label is strained, making even low-fat varieties dense and creamy.  The process leaves more protein and fewer carbohydrates, making it a hit with the health-conscious crowd. In 2012, Greek yogurt sales were 34 percent of total yogurt dollars and 22.5 percent of total yogurt volume sales. From 2011 to 2012, non-Greek yogurt fell 10 percent by volume while Greek volume rose 71 percent in the same time period. Market analysis indicates that sales were primarily from two types of consumers: women who were already yogurt eaters and men who saw Greek yogurt as a new sports nutrition product. These men were new consumers who were substituting Greek yogurt for other protein supplements. Over half of U.S. households bought Greek over the last 12 months, according to data from retail research firm IRI.

Yogurt Could be Cannibalizing Other Dairy Product Sales

Greek varieties are bringing new customers to the yogurt aisle and driving overall sales.

But what is the cost of this Greek yogurt trend?  It is likely that newer Greek products increased the overall usage of milk. But the product is often touted as a substitute for sour cream, buttermilk, cream or other cooking uses and thus has cannibalized other dairy product sales. Then there is also Greek yogurts dirty little secret.  The production of Greek yogurt creates a nasty byproduct called “acid whey.”

Working on the Downside of Yogurt

Of course, every upside usually is accompanied by a corresponding downside.  In the case of yogurt that downside is the liquid waste by product that can’t be dumped, because it would prove too toxic.  Now yogurt companies and scientists are trying to find some productive — and preferably profitable — use for acid whey.  One scientist wants to extract the small amount of protein to use in infant formula. Other scientists believe they can extract the sugar to be used in other foodstuffs. And one farmer is converting the lactose into electricity generating methane.  One thing for sure is that with the Greek yogurt market now worth $2 billion and still growing, it’s a problem that’s only going to get larger.

The Bullvine Bottom Line

One way to keep both our industry and ourselves healthy and growing is to keep producing new innovative dairy products like Greek Yogurt that taste good and meet healthier diet initiatives at the same time.  There is no question that as an industry we need to get our heads around new product innovation.  From targeting youth in North America with exciting new healthy treats, to getting milk products into the diets of regions around the world that are experiencing massive population growth, milk needs to be the product that is literally on the tip of everyone’s tongue.


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I cannot tell you the number of times that I have heard dairy farmers from many countries refer to dairy farming as a way of life.  But more and more I am noticing a transition from dairying being about the way of life and becoming a discussion focused on strategic business planning.  This shift from “How do we live?” to “How are we profitable?”  has forced many to decide to leave the industry.

The US Situation

The US dairy industry and agriculture industry has faced the problem of overproduction for the past 100 years.  Improvements in equipment and machinery, better genetics, better feed, have made US dairy farmers more successful at what they do. Well, successful at everything except for making money.  And while many dairy operators support trying to keep overall production lower in order to increase prices, none have been willing to cap their own production in order to do so.

Just as small industrial enterprises might seek to boost profits by becoming bigger and more efficient, American dairy farmers for the most part have gotten larger and larger and consolidated their operations to become more efficient and increase margins.  Let’s look at the facts. They tell you that the average herd size in the US is currently 115 cows and that 74% of dairy farms have fewer than 100 cows.  But the key stat to take not of is that farms with more than 100 cows produce 85 percent of the milk.  This means that a mere 26% of the producers account for the   majority of the milk production in the US.

Furthermore, today’s  larger operations are not typically the  family run operations that we usually  associate with  “The way of life” phrase that we all love to pass around.  While, there are exceptions, many large dairy herd operations are more often owned by huge conglomerates, multinational firms or absentee stockholders.  In 1900, half of the labor force were farmers, but by the end of the century only 2 percent worked on farms.  Nearly 60 percent of the farmers at the end of the century worked only part-time on farms; they held other, non-farm jobs to supplement their farm income.  Today, only about 6 percent of all farmers are under the age of 35. The high cost of capital investment — in land and equipment — makes entry into full-time farming extremely difficult for most potential farmers

Sadly, less than 25 percent of all farms in America bring in gross revenues in excess of $50,000. It has been estimated that living expenses for the average farm family in the US exceed $47,000 per year. Clearly, many farms that meet the U.S. Census’ definition would not produce sufficient income to meet farm family living expenses. In fact, fewer than 1 in 4 of the farms can cover living expenses. As a result between 1970 and today the United States has lost 88 percent of its dairy farms.

As these numbers demonstrate, the American “family farm”, rooted firmly in the nation’s history and celebrated in the myth of the sturdy yeoman, faces powerful economic challenges. Urban and suburban Americans continue to rhapsodize about the neat barns and cultivated fields of the traditional rural landscape, but it remains uncertain whether they are willing to pay the price — either in higher food prices or government subsidies to farmers — of preserving the family farm in such a picturesque form.

The Canadian Story

In Canada the story is a little different.  Supply management has helped control the overall milk price so that smaller dairy farmers can be profitable enough to support the “way of life” that everyone dreams about.  But there are other challenges that have come with supply management.  The cost of entry is so high that it is an impossible hurdle for many of the next generation.

It’s a situation we have all experienced in our own families.  The next generation has worked years on the family farm, while the spouse has worked part time off the farm as well as the done the majority of the work raising the children.  In many case, the challenge is they did   not build up enough equity/capital in order for a bank to be willing to loan them the millions of dollars needed to purchase the farm and the quota.  As a result the multi-generational family farm has is sold, and the dairy industry loses another passionate young breeder due to economic circumstances.

Sure a good farm succession plan would have helped (Read more: Farm Succession: Which Exit Is Yours? And Farm Succession: Kicking the Hornet’s Nest?).  However, most young people these days are not too eager to choose dairy farming as a career.  A lot of young adults that grew up on family dairy farms have decided that investing millions of dollars in a business that requires you to work 12 hours or more per day most of the year for very meager wages is simply not worth it.

The Bullvine Bottom Line

There is no question that the face of dairy farming and agriculture as a whole is changing.  While a small few (in relation to production) still work at trying to preserve the “family farm”, dairy farming as a whole has become big business focused on margins and sustainability.  In order to compete with these corporate farms, many farm families need to run their operations more as a business than a way of life.  (Read more: What’s the Plan?)  If they don’t, they will go the way of the dodo bird.  Nothing more than a vague memory from the past.

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Like many Bullvine readers I grew up on a small dairy farm, took part in 4H clubs and fell in love with a breed of cows.  I attended college and studied animal agriculture. I graduated during the Green Revolution, not green like we know it today, but green in the fact that the developed countries felt that they could ramp up production and feed the world without the need for developing countries to produce their own food.  And since that time animal agriculture has focused on animals producing more and more. Well the truth is that both of these models where animals produce more and more and where only developed countries need to produce food are broken. We ignored factors such as a country needing a strong agricultural base to be successful and more and more milk per cow leading to poor and poorer reproduction rates.  Furthermore the idea that the majority of the world’s population growth would occur in the developing nations never even crossed our radar screens back then.  How could we have been so wrong in our thinking? Are we thinking any clearer in 2013, when it comes to dairy feeding people in the years ahead?

Today’s Dairy World

Few of us are aware that India is the country that has the most cows (48 million) kept for milk production purposes. The production of India’s cows is low (1,200 lbs per year) but through improved husbandry there is great potential. China’s rapid growth as an importer of dry milk powders (whole and skimmed) is predicted to grow in 2013 by 12% and 18%. The USA in 2013 is exporting the equivalent of 15% of its annual production where just a few years ago it was thought that USA milk prices were too high for significant exportation to take place. USA cheese exports in 2013 will be double the exports in 2008 and that will make it the largest single exporting country for cheese. Cheese is the darling child of milk products when it comes to exports and EU countries which export almost half of the cheese globally are looking for new customers. To say the least, the world is hungry for dairy products. The demand for dairy is expected to increase at a rate faster than the world’s population growth. (Read more: “Got Milk” is becoming “Got More” and MILK MARKETING: How “Got Milk?” BECAME “Got Lost”)

Tomorrow’s World       

We have all seen the prediction that there will be 9 billion people by 2050. That is a 25% increase. If dairy is to fill more of the average global diet the world will need 30 to 35% more milk to be produced in 2050 than there is produced today. The rapidly expanding middle classes in China and India will consume more milk products as will consumers in Africa, SE Asia and Russia. At the processing industry level, expect new products (including low lactose and ingredient enriched milk products) and more uses for milk. At the farm level the rate of applying technology will be at an ever increasing rate. But the dairy industry does not exist on a vacuum.

Over the past few years besides population growth and environmental concerns, the major issue before all countries has been trade. (Read more: Why the Future of the North American Dairy Industry Depends On Supply and Demand) Trade is important in the EU which once had production quotas but where now farm prices are no longer guaranteed and narrower on-farm margins are resulting in increased herd sizes in order to efficiently apply technology and provide critical mass. In the future no country will be an island onto itself when it comes to producing milk and trading in milk products. Canadian dairy farmers are facing that matter after the Canada and the EU signed a tentative trade agreement last week in which more EU cheese will have access to the Canadian market.  Read more: (Read more: Canada, EU close to sealing trade deal with concessions on cheese, beef and Canada’s dairy farmers ‘angered and disappointed’ by EU trade deal that would double cheese imports)

Agenda: Theirs, Yours and Ours

Feeding the growing world population, the application of technology, the elimination of duplication and waste and the best use of all resources will be on every country’s agenda. Are these issues too big or too far away? We lose if dairy is replaced in the diet. All things dairy lose if we think too small, only nationally or only about self preservation. All dairy agendas are inter-related.

Tear Down the Silos. Ramp Up the Herd.

It is paradigm shift time. The big picture question is how can more milk be efficiently produced to feed a hungry world?

Are farmers, their organizations, their service providers, the milk processors and the global traders thinking in terms of mutual (collective) benefit or individual benefit? The survivors will be in supply chains that can provide a quality product at a price that consumers are willing to pay. Quality is the watchword. For those that are not prepared to work with others it will not be Who Moved My Cheese but who replaced my cheese with their product.

What will that look like? At the farm level the list of changes needed will be extensive but in the immediate future it is likely to include larger herds to take advantage of technology, information and critical mass. At the industry level our organization leaders will need to dismantle and re-create new organizations and structures to provide the best and most relevant services dairy farmers will need. If you are looking for an example read the announcement in the Bullvine last week to merge Dairylea Cooperative Inc. and the Dairy Farmers of America in the USA (Rad more: Dairylea announces proposed merger with DFA).

The Bullvine Bottom Line

Everyone in the dairy world will need to think collectively and globally. The rewards will go to those that can adapt, adopt and act. Cattle breeders in just ten years will be using technology and information that is hardly on the researcher’s bench just now. If you are looking for an example we need only to remember back five years to 2008 when we asked each other how to pronounce genomics. Today it is an important tool in breeding dairy cattle for the future. Will you and your farm be part of dairy’s future or part of its history?

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Farming With the Stars!

Tuesday, August 27th, 2013

From soap bubbles of the past to the milk moustaches of today, farming is putting stars in our eyes!

Whether it’s famous celebrities like Dwayne Johnson or Carrie Underwood or newly minted rising stars like the Petersen Brothers, agriculture is turning on the star power! Actors used to sell soap and cars and endorse life insurance. Today they’re milking farming for all it’s worth.  Well known and wannabe stars both see the benefit of appealing to the rural roots of the spending public.  Milk jugs and melting butter are sharing the spotlight with bachelors and beauties down on the farm!

We Have Stars in Our Ears!

There’s big money in celebrity-endorsed advertising and the agents who spend their days poring over Nielsen ratings and viewer demographics are happy to have their stars in the agricultural spotlight.  From the consumer side, we feel we “know” these folks and because of that familiarity and their obvious success, we tend to listen to what they’re saying.  Rightly or wrongly we are prepared to trust these folks who are high above us in the stratospheres of fame. They capture our attention.

Agriculture’s Rising Star

There is no question that the “So God Made a Farmer” commercial that aired at Super Bowl XLVII on February 2013 resonated with millions of viewers.  It began:  “And on the eighth day, God looked down on his planned paradise and said, “I need a caretaker.”  Entirely comprised of pictures it nevertheless told a story that engaged the audience and generated an avalanche of comments.

Star Roars

Not all celebrity attention brings a pat on the back.  On April 18th 2013, singing star Carrie Underwood posted her viewpoint on the so-called ag-gag bill on Twitter and Facebook.  It rapidly went viral with huge numbers of views and comments.  Probably unwisely Tennessee State Rep Andy Holt responded that Underwood “should stick to singing”. Carrie’s prompt comeback verified how wrong it is to try to shut-down social media or to bully the opposition. She replied. “I should stick to singing? Wow…sorry, I’m just a tax paying citizen concerned for the safety of my family.”

Look Who’s Talking

There are two sides to every story.  Celebrity draws the attention.  Agriculture needs to respond with the same desire for what is best for the consumer, while making reasoned explanations of the valid issues facing farmers.  When the bright light is shining on the stars it can also pick out all the details of any skeleton’s agriculture might prefer to have in the shadows.

Farmers Are Stars Too!

You don’t have to have millions of dollars and an advertising slot at the Super Bowl to become an agricultural celebrity. The video filmed by the 11 year old sister of the Peterson Farm Brothers proved that.  Their parody “I’m Farming and I Grow It’ is a parody of LMFAO’s “I’m Sexy and I Know It.” It was uploaded to YouTube on June 25th. Three days later the video had broken the 1 million views mark and continues to generate a phenomenal response.  At this writing it stands at 8,644,701 views and continues to light up farm Agvocacy with lively discussions around the issues of growing the food we need to survive.  Another of their parodies is my personal favorite.  Entitled “Fresh Breath of Farm Air” it is a Fresh Prince Parody and is making stars of these three farm boys simply by showing every day farming exactly like it is.

The Bullvine Bottom Line

While we might hope that all the publicity farming gets is positive, at the end of the day what is most important is that agriculture is being talked about.  Open communication is the first step toward positive progress.  Personally – good or bad — bright or dull — I love it “when the stars come out!”

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“The Dairy Queen” has All the Answers!

Tuesday, August 20th, 2013

jerseyadMany of us grew up with the jingle, “Let’s all go to the Dairy Queen!”  The promise then – and now – is that dairy products, especially fresh frozen ones, are a delicious answer to the question, “What should we do now?”

Derrick Frigot, WJCB President, was raised on a well-known dairy farm on Jersey.  Today as an co-author and with an international team of researchers and contributors, he has helped carry to completion the book “The Dairy Queen.”  This isn’t a cold calorie laden dairy dessert but it does dish up dairy information about Jersey cattle that is magnetic in its appeal, broad in scope and richly satisfying.

The Isle of Jersey Marks the Beginning

Derrick thoroughly enjoyed those early days on his uncle’s farm. “He was a leading breeder and exporter of Jersey cattle. As a youngster it was exciting to meet well-known North American Jersey importers like Paul Spann and Lea Marsh.” This experience prepared Derrick for his career path. “When leaving school, I worked in the office of the Royal Jersey Agricultural & Horticultural Society for six years, followed by a couple of years in a livestock feed company, and finally as manager of the Jersey Artificial Insemination Centre Ltd, the Island’s first AI company.”

Co-Author Derrick Frigot

Co-Author Derrick Frigot

Artificial Insemination Provides the Background for Authorship

AI on the island of Jersey became the next influence on the unfolding of Derrick’s career. “In 1975 the island’s government took over the local operations of artificial breeding and our company concentrated on cattle and semen exports from Jersey.  In the mid 1980s we began importing international Jersey semen into the UK and became the leading suppliers to UK Jersey breeders. “

Now not everyone who works in the AI field automatically becomes an author but for Derrick writing “The Dairy Queen” was a welcome extension of his interest in Jersey dairy cattle. “I was delighted to be asked to assist with the completion of this book so ably started by Hans Norgaard who is a dedicated Jersey breed historian from Denmark. “

Co-Author Hans Norgaard

Author Hans Norgaard
(Photo by Niels Damsgaard Hansen)

“The Dairy Queen” is the Unique Written Record of an Exceptional Breed

jersey bulletinA book for anyone interested in dairy cattle, The Dairy Queen, is the first truly global account of the development of the world’s most efficient dairy producing cow. Derrick points out the unique features of this special book. “It tells the story from the early origins of the breed to modern times, throughout the world.  It will appeal to all dairymen interested in cattle breeding and its 300-plus pages with over 700 pictures is a glorious presentation of the Jersey breed.  The great cattle breeders and individuals who influenced the historical progress of the Jersey cow are well documented along with anecdotes of incidents that literally changed the progress of the breed.  For example, the concerns of cattle breeders in the Island of Jersey in 1947 when dockworkers refused to load cattle onto ships for export – they were concerned about shortage of milk for island families following the five-year occupation by German forces in World War II.


Another example is the introduction of multiple component pricing that triggered the strong move to Jerseys in the USA coupled with the success story of Hilmar Cheese in California, owned by a group of Jersey cattlemen that has expanded the breed greatly in that state and also Texas.”

Showing in the first half of the 20th Century (A page from the book)

Showing in the first half of the 20th Century (A page from the book)

The Written Word is Inspired and Supported by Jersey Enthusiasts

Such a significant undertaking obviously would require a huge commitment of time.  Derrick appreciates those who influenced his work on the book. “Anne Perchard, MBE who was the Patron of the World Jersey Cattle Bureau and a long-time close friend of mine.  Anne was the World Dairy Expo’s “International Person of the Year” in 2011 and the first woman to be awarded honorary membership of the American Jersey Cattle Association. She wrote the foreword for the book and sadly, passed away just a month before publication.”  Derrick also appreciates “All the Jersey breeders of this world for sharing their stories.  It has been my privilege in working with the dairy industry all my life, which your readers will agree, is the greatest industry in the world.”

The Bullvine Bottom Line

The Bullvine does agree with Derrick Frigot that dairying is the world’s greatest industry and so we congratulate him on the publication of “the Dairy Queen” and for answering so thoroughly the question “And why is that?” So next time you need to discover more about the people and passion that have made such a positive impact on the Jersey Breed, you would be wise to go to “The Dairy Queen!”

To learn more about how to get your copy of “The Dairy Queen – A History of the Jersey Breed Worldwide” check out their Facebook page.

“Got Milk” is becoming “Got More”

Monday, August 12th, 2013

“Drink your milk.”  Dairy farmers aren’t the only ones who have been raised with this mantra and its follow-up don’t-argue-with-me reasoning, “It’s good for you!”  There are many parenting proverbs that haven’t stood the test of time. but milk`s goodness has.

Milk has Already Got More Good Stuff

There is significant recent scientific research to prove that milk contains several disease- fighting compounds. Research is also evaluating the potential health benefits of proteins that are found in milk.

Cows are Putting More Good Stuff Into the Milk

With the proof of milks’ already healthy properties, comes the good news that scientists have learned that these properties can be increased by feeding cows specialized diets. The potential is definitely here for dairy farmers to change the way they feed their cows and thereby raise the health-enhancing properties of milk.

For example, in a recent study, Oregon State researchers were able to increase the level of omega-3 fatty acids in milk.  They also were able to decrease the amount of saturated fat.  Both these results came through feeding flaxseed to cows. This is great news for consumer health.  Less cholesterol and more omega-3 fatty acids in our human diet reduces the risk of heart disease.

What More Has Milk Got for Me?

Research trials have shown that consuming butter with elevated levels of CLA can reduce the size of cancerous tumors. CLA is Conjugated Linoleic Acid and is a naturally occurring anti-carcinogen. Researchers at several universities, including Cornell. have discovered they can increase the level of cis-9 trans-all CLA by feeding cows certain nutrients.

Other news from this area reports that a2 brand milk comes from cows specially selected to produce A2 beta-casein protein rather than A1. Most cow milk contains both types of beta-casein protein – A2 and A1. The A1 beta-casein protein has been linked with digestion and health issues so having more A2 is a plus.

A2 Corporation, the manufacturer of a2 brand milk products, targets three areas of growth: building its beverage business in Australia and New Zealand, capturing niche shares of global milk and dairy product markets and developing an infant formula business with an initial focus on China.  In April 2012, they announced a strategic agreement with Synlait Milk Limited in New Zealand to manufacture a2 brand nutritional powders, including milk powders and infant formulas for A2C.  According to A2C managing director Geoffrey Babidge, the a2 brand’s growing credibility will provide a platform for the firm’s expansion plans in the UK, Ireland and China. In December 2012 production of the China-destined a2 branded infant formula was set to begin.

Milk has Got to Have More Taste!

When a food has earned the label “good for us”, we sometimes choose not to eat or drink it claiming it doesn’t register on our taste scale.  Since the 1970s milk consumption has been declining and certainly consumer taste preferences are part of that statistic.  In the U.S. the volume of total liquid dairy is declining. Consumption of white milk is forecast to decline by 6.5% between 2011 and 2015.  But then comes the “good taste” news.  Consumption of flavored milk is growing and expected to increase to 9.5% by 2015. Flavored milk, the second most widely consumed Liquid Dairy Product (LDP) after white milk, is forecast to increase globally by a compound annual growth rate (CAGR) of 4.1% between 2012 and 2015, rising from 17.0 billion liters to 19.2 billion liters.

The World Wants More Flavors

In the past five years, 2009 to 2013, four emerging countries – Brazil, China, India and Indonesia – are driving the increased demand for flavored milk. While developing countries accounted for 66% of flavored milk consumption, this is forecast to rise to 69% by 2015.

Research shows that China, South Asia and Southeast Asia drink more than half the world`s flavored milk. In fact, just six Asian countries – China, India, Indonesia, Malaysia, the Philippines and Thailand – consume 47% of the world`s flavored milk.  This highlights that emerging economies are the growth engines of the dairy industry.

North America`s Got Apple Pie Milk and More

While not leading the consumption of flavored milk, North America is certainly not out of this tasteful picture.  Just in time for birthday celebrations on Independence Day Shatto Milk Co. of Osborn, Mo., stocked store shelves with apple pie-flavored milk to celebrate its own 10th anniversary.  Other flavors this flavorful company produces include cherry chocolate and mint chocolate milk. According to Dennis Jonsson, President and CEO of Tetra Pak Group “For consumers unwilling to compromise on taste, health or convenience, flavored milk is proving to be an increasingly popular alternative to other beverages.”

Flavored Milk’s Got More with Less Packaging

Cartons have become the established packaging format for flavored milk, according to Tetra Pak.  They accounted for 62% RTD (ready to drink) flavored milk packaging in 2012, up from 57% in 2009, and are expected to rise to above 64% in 2015. Portion packs are expected to reach 81% of RTD flavored milk consumption.

Milk’s Got More Added Value

Whether you`re attracted to milk for its high nutrition, health benefits or good taste, milk products today can meet a huge range of  needs.  It starts with the desire for nutritious and healthy food.  Developing countries are turning to nutrient-rich milk products.  In prosperous urbanized areas of the world the fast pace of modern life demands tasty, flavored milk in convenient packaging. Consumers are eager to try new and unusual food and drinks. New varieties of milk products will most definitely increase milk consumption.  Additionally, these “designer” dairy products could sell for premium prices.

The Bullvine Bottom Line

Kudos to dairy producers, the scientific community and marketing wizards.  The production of milk with so many “Got-More” features means we are improving the health of the consumer and the health of the dairy industry simultaneously! Now that’s more like it!  So “Drink your milk!  It’s good for you!”

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When it comes to supply management, many proclaim to know the absolute truth. They either profess “It will never be sold out.” or they’re emphatically on the other side stating “Supply Management is dead!” (Read more: Why the Future of the North American Dairy Industry Depends On Supply and Demand) Unless you can read the minds of the politicians (and even The Bullvine won’t pretend to go that far), you are putting your future in someone else’s hands.

Come Out Come Out Wherever You Are!

The issue of supply management raised its head in the late 60s. Many think that once implemented that’s all there was to it! WRONG.  In 1976 the MSQ was decreased by 18% in response to a serious surplus of production.  RIGHT MOVE. Then later on the word was out that Supply Management was coming to an end. Some prepared instantly. WRONG.  Today many aging dairy farmers want to retire … but their children are not sure whether the “security” their parents had is going to continue.  Others worry that a closed off dairy industry will be unable to provide the opportunities they’re looking for.

In the Beginning

Supply-management was introduced by the federal government in the 1970s as a way to ensure local farmers could meet domestic demand and be rewarded fairly for their effort.  The introduction of quota levels helped to control supply while creating stable prices for Canadian consumers. Prices for milk worldwide had led to fluctuating prices and instability in Canadian markets.  The government sought to fix this by implementing a system to provide milk and poultry for the Canadian market by Canadian producers.

Is Government the Game Changer?

Why do we modern day business people never ask ourselves what our parents did to adapt to change? Unlike them – we accept that their solution is “forever”. At a certain age somewhere between 40 and 65, we assume that we have done all that there is to do and the way things are right now is the way they should remain…. full STOP.  But that’s just the problem.  Why would the next generation want to come into an industry that is fully stopped?

But back to the issue of supply management.  What if— supply management ends in the next 5 to 10 years? What if supply management stays?  How will your children continue dairying? Oh! They’re not interested you say.  Well then how will the next generation of dairy farmers get interested in getting into the industry?  We know it’s an awfully expensive entry price.  And, if we keep the status quo, the industry is shrinking from both ends of the marketplace.  Less consumption.  Fewer producers.  What’s the game changer that we MUST find?

Is Everybody Playing Fair?

Canada`s milk supply management is increasingly a hot button issue when it comes to trade negotiations.  Many quote rules of fair trade that exclude supply management never acknowledging that there are hidden subsidies supported by other players in other countries.  Subsidies accounted for only 14% of gross farm receipts (2011) in Canada.  Considerably less than the 19 per cent average of among OECD countries.  This raises the question of what would happen if in the interest of big picture trade negotiations Canadian officials eliminate farm marketing boards and subsidies while other countries were able to keep subsidizing their farmers?  In Japan, South Korea, Norway and Switzerland that means more than half of what farmers earn is from government support.  Yes! Over 50%!!

Are Governments Changing the Playing Field?

Everyone loves to throw the term “level playing field” into the discussion.  But is it really possible?  After all can you name any industry that isn’t subsidized?  And secondly, is a level field really what you want when it involves food production.  After all, without food we die.  That’s more level than I’m looking for!

True Lies

The theory is that if supply management was terminated, larger more efficient farms would readily compete against cheaper imports.  Really?  And who is prepared to deal with how “larger” farms will rile up the anti-large contingent?  But consumer prices will be lower and that makes it all worth it, right? WRONG. The cost comparison between supply management and the market-determined price is like comparing apples and oranges. When the market sets the price, the direct expense to consumers does not generally reflect the outlays incurred by the farmer.  As a result, government must provide billions of dollars worth of subsides annually to farmers if they are to stay in business. The critics of supply management do not factor these hidden taxpayer dollars into the cost of a litre of milk, no matter how critical that support may be to its production.

Is Free Trade Fair Trade?

Economists Jason Clemens and Alana Wilson of the Fraser Institute unfortunately get it wrong in their assessment of Canada’s supply-management system for dairy products in their May 15 column: “Free market for groceries is better for the poor”. Where is their proof that there is suddenly a lower retail price without supply management? A real example is the experience in New Zealand.  They once had supply-management before switching to a free-market situation in the mid-1980s. Surprisingly, to some, prices increased for consumers and a monopoly was established where one dairy controls 90 per cent of the milk farms.  A parliamentary investigation has been undertaken to determine why prices increased. Milk is known there as white gold.

It’s Better for the Consumer

Opponents claim that supply management gouges consumers at least when compared with prices set by “the market”. They talk glowingly about free trade and the positive impact of open markets on industry.  Where do they look when there are market meltdowns, rising unemployment and natural catastrophes? It’s obviously their choice to turn a blind eye to the crutch provided by governments in these “healthy” economies. Even if we could accept the global marketplace who decides the priority markets when drought devastates the food supply of your global partner?  I suspect that the home market would be highest on the list.

Who (or What) is Hiding?

There are certainly a considerable number of issues with the Canadian food system. Surface comparisons would suggest that food is much cheaper in the States.  Closer to reality, is the fact that there are 300 million more people to share the cost of subsidizing the industry. Ron Versteeg of Dairy Farmers of Canada says Canadians have nothing to hide. “We stand alone in providing, clean, consistent and transparent access to our market, while other countries hide behind phony non-tariff barriers.” There is no hidden subsidy provided by Canadian taxpayers to dairy farmers.  Each time consumers buy milk or cheese they contribute to dairy sustainability and resilience, to say nothing of this country’s food security.   By comparison, U.S. Subsides to dairy producers represent about 40 per cent of American dairy farmer incomes, when it reaches them.  These subsidies come directly from taxpayers’ pockets.  At the store, the U.S. consumer pays only a portion of the overall cost of producing milk.  The rest is paid through their taxes. Without that hidden support, American dairy products would be much more costly for consumers, and much more expensive than the equivalent Canadian product.

But You Can’t Get Into the Game!

The quota value for a small forty cow operations is over $1 million. Barrie McKenna, columnist with the Globe and Mail, suggests decline in farms is directly related to barrier of entrance in the industry. Making it impossible for young farmers to finance that in addition to cattle, land, barns and equipment.  Supporters of supply-management argue the high quota shows that the industry is healthy and, like other profitable businesses, dairying require high start-up costs, similar to purchasing franchise fees to begin operations. There are many other non-agricultural businesses that no longer have “mom and pop” operations.  Decreasing economies of scale make it difficult for small businesses to compete; this decline in numbers extends beyond the dairy industry.  Having said that, just because the problem is difficult does not mean that we should give up.

The BULLVINE BOTTOM LINE “Nowhere to Hide!”

You can hide in the bushes and hope that it will all turn out right in the end. But wouldn’t you rather be “It!”  In the past successful builders of the dairy industry did not wait for the dreaded pronouncement “You must be caught!”  Supply management was their solution.  What is ours?


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In North America we are accustomed to having the freedom to pursue our chosen business, in our case dairying and to proudly wave our American and Canadian flags at every opportunity. We assume that all is well with the world when we can raise cattle, make milk and pay the bills on a regular basis.  In June 2013 I read a Hoard’s Dairyman article by Utah dairy producer, John Nye entitled, “Opportunity Knocks, New Zealand’s Fonterra Answers”.   It turned out to be a wakeup call for me.

I don’t have a background in finance and economics but I will admit I am reassured by headlines that say things like “Markets well supported at mid-year” or “U.S. exports reach record levels in April”

The shrinking world is a fact of everyday life.  It’s exciting to correspond with fellow dairy breeders from every corner of the globe and share our dairy passions.  We can – and do – learn from one another.  Dairy genetics, dairy technology and dairy sales are being shared worldwide.  What we may be missing is the very important point of who controls what we are taking to the bank today and, most definitely, what our financial success will be tomorrow.  When our hard earned dairy dollar takes a dive we blame it on the weather, the government,  the fickle market or numerous variables that are out of our control.  Realistically, we should be blaming at least some of the effect on ourselves!

We take huge care to see that genetics inputs and management don’t skim off our profits but then we leave the economics of the marketplace in other hands.

Three facts from the previously mentioned Fonterra article stood out for me. Firstly, Fonterra owns enough supply in the US that they could dump supply domestically thus lowering prices and therefore making the export of US product more affordable for them.  Secondly, Fonterra’s partnership in mega dairies (10,000 to 20,000 cow dairies in China) gives them the financial leverage to pay twice what Americans can afford for alfalfa hay. And thirdly this raised the question for John Nye, “How does New Zealand that produces about as much milk as Wisconsin, control the world`s market like they do?”

As a Canadian, with supply management in place, it’s hard to imagine that our hard earned dairy income could be manipulated by outside forces from another county.  Or is it?  If we are so focused on keeping a protected wall around our shrinking dairy market, would we even notice if a third party came in and quietly scooped up the opportunities for growth and development?

What is the growing edge of the dairy industry in 2013?  If you can’t answer that question, that is exactly what has allowed companies like Fonterra and investors from offshore to make billions of dollars at the expense of a naive North American dairy industry.  As Nye quotes in the article, “Fonterra’s attitude is that dairymen in the U.S. could not agree on what kind of rope to hang themselves with.  As long as we are divided on dairy policy, Fonterra is very happy to take advantage of us.” The finger of blame for who is responsible for this predicament points squarely at us, “They are pretty sure we will never get together as an industry with one voice in this country.”

We are not only divided we are in opposition to each other.  It is so much easier to pick a fight with the neighbour you see – whether he’s over the fence or on one side or the other of the USA-Canada border.  While we are wrangling over the fine details of who has bragging rights for being the “best” and how to prevent each other from chipping away at our market share — the well-organized, unified and government supported visionaries from other countries are scooping up not only the opportunities but doing it with our permission.

The challenges for the USA and Canada include:

  • Politicians (some with no ag understanding) are making crucial decisions
  • Politicians with their own agenda have the final say
  • Outside interests are getting their voices heard first
  • Is short term financial gain the best way to “sell off” our commodities?
  • Why do processors have so much more influence than producers?
  • Pricing schemes (and even price protection) don’t work if, in the long term, we are preventing the sustainability of our dairy industry
  • Everyone can state that the dairy producer’s price is being eroded.  Who is doing anything about it?
  • Even if we appear to be holding our own today, what about the future of the industry?

Being able to state the problem is the first step.  Doing something about it is next.

Who PAYS THE (export) PIPER?

Regardless of which side of the border you’re on (actual residence or political leaning), you have to have an informed answer to the question, “Is there a downside to the market for dairy exports?”  What this means is that there is the potential that not ALL exports are good. At the end of the day, is the farmer getting any benefit?  Working 24-7 with more and more members of the family working off the farm doesn’t seem the best way to keep a healthy bottom line.

Let’s Mind Our Own Business

Politics, economics and world markets have tremendous impact on the dairy industry.  Like us those areas have experts who can weigh the pros and cons and their lasting effects.  Once again it isn’t necessary to “win” or “beat” these interests.

The Bullvine Bottom Line

We need to cooperate and work together as dairy businesses with shared interests and common goals.  The potential is there. If we don’t mind our own business, who will?


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Sixty-six years ago, did organizers know that fairy tales would be getting renewed attention in the 21st Century? Last year there was Snow White And The Huntsman and then Hansel And Gretel: Witch Hunters  and now Jack The Giant Slayer. None of them however have the hands on experience (pun intended) of “Alice in Dairyland”, who writes a new chapter of dairy memories in Wisconsin every year. It may not start, “once upon or time” but for 25 year old, Kristin Olson, who is the current Alice in Dairyland, carrying out this role is definitely a dream come true.


Seeing the World Through The Milking Glass

Every good dairy tale starts on a farm and Kristin‘s story is no exception.  The 2013 Alice recounts some of the benchmarks that prepared her this role. “I grew up in Fond du Lac, WI with my family’s small show herd, Crestbrooke Holsteins and Jerseys, with my parents, Tim and Barb, and brother, Kyle. Throughout my youth, I was very active in the Wisconsin Holstein Association, as well as 4-H and FFA. I pursued a degree in Life Sciences Communications from UW – Madison, where I held numerous leadership roles in the Association of Women in Agriculture, Badger Dairy Club and National Agri-Marketing Association, and several internships, before graduating in 2010. After graduating, I worked at Accelerated Genetics in Baraboo for about three years as the Dairy Advertising Coordinator, before being selected for my current role as the 66th Alice in Dairyland last month. I reside in the Windsor-Deforest area with my husband, Trent, who is still involved with his home farm in Lewiston, MN, and is also employed with ABS Global in Deforest.”

Kristin (Natzke) Olson, with her family.

Kristin (Natzke) Olson, with my parents, Tim and Barb, and hubsand Trent and brother, Kyle.

Kristin has always felt a magical connection with agriculture!

We should always remember no matter what role we play in business, life or the dairy industry that we are making lasting impressions on formative young minds.  Such was the case for Kristin. “Having first met Alice in Dairyland in 4th grade, Alice has always been a figure I’ve looked up to and respected throughout my life. All of my combined experiences during my youth and college years really developed my passion for communicating agriculture’s story.”  With such strong early impressions of Alice and her lifelong ties to agriculture, it isn’t surprising to hear her say, “I am so excited to now be able to share my passion with Wisconsin and hopefully inspire people along the way!”
alice and swine

Waving the Agriculture Wand On Behalf of Wisconsin!

Kristin’s enthusiasm is exactly what the Wisconsin Department of Agriculture, Trade and Consumer Protection looks for in their official agricultural ambassador. Becky Paris, the Alice In Dairyland Program Manager, outlines how the selection of this one year, full-time public relations employee is made. “Each year a diverse group of highly qualified applicants make the position selection a difficult process.  The Alice in Dairyland selection puts everyone through a rigorous three day series of interviews including public speaking, writing, TV and radio interviews, tours and an individual interview.” The 66th Alice in Dairyland Finals were held in Calumet County in the Northeast section of Wisconsin. Speaking of the  selected candidate, Becky notes “Kristin proved she possessed the ability to positively impact Wisconsin agriculture in the role of Alice in Dairyland.” Kristin deflects the emphasis from herself and onto the host county. “Calumet County’s agriculture is so diverse, which was showcased on the agri-business tours they put on. We enjoyed a wide variety of tours from an innovative dairy farm featuring a rotary parlor, to Honeymoon Acres greenhouse which offers a variety of plants for everyone and sells over 15,000 hanging baskets annually, to the world renowned Sargento cheese. There was so much to see and learn!”  A gracious  Alice indeed!

Kristin doing an interview with WSAW channel 7

Kristin doing an interview with WSAW channel 7

Dairyland: “All the better to delight you with!”

With her banner and tiara and her ongoing passion for dairying, Kristin will go far and experience much as Alice in Dairyland. “Throughout my year as Alice, I will travel nearly 40,000 miles, make over 400 appearances and speak with 10,000 students on the importance of Wisconsin’s $59 billion agriculture industry. I’m very much looking forward to traveling throughout the state and meeting people from all backgrounds and walks of life while sharing the message of Wisconsin agriculture!” Becky Paris tells us the ways in which this is a one-of-a-kind program is constantly changing to reflect innovations in Wisconsin’s agriculture industry.  “Alice is unique in the versatility of her role: one day her role is relaying the modern picture of agriculture to a growing urban population, the next she is educating students on careers in agriculture, and the next she is reaching out to all consumers through TV interviews discussing one of the many diverse agricultural facets in Wisconsin.  Working with our agricultural industry partners, Alice provides a relatable link between producers, processors and consumers.”

Thanks to the Wisconsin Corn Promotion Board Alice in Dairyland will travel 40,000 miles in the flex fuel Tahoe across the state on E-85, a cleaner burning fuel made from corn!

Thanks to the Wisconsin Corn Promotion Board Alice in Dairyland will travel 40,000 miles in the flex fuel Tahoe across the state on E-85, a cleaner burning fuel made from corn!

Alice’s Ag Adventure is Just Beginning

Alice in Dairyland is contracted public relations position for which Kristin will receive a $40,000 state paid salary.  Coinciding with Dairy Month, the fully packed year of activities is off to a good start says Kristin. “Having started on June 3, I’m just beginning to scratch the surface of all of the wonderful opportunities that lie ahead for the year. So far, my greatest experience has been traveling throughout the state and meeting wonderful people while being able to celebrate June Dairy month in America’s Dairyland and share my passion of the dairy industry with others.”

aliceindairyland-working with kids

Life Before Alice In Dairyland

No doubt there will be many times during the coming year when Kristin will reflect on the experiences, training and personal support that led her to this exciting opportunity.  She gives much of the credit to her parents Tim and Barb Natzke. “At a very young age my parents   taught me the importance of hard work, dedication and perseverance. From practicing leading stubborn calves for hours and hours on end as a little girl in order to win that showmanship contest, to preparing for the Alice in Dairyland finals in order to make a dream a reality, they’ve always been there for encouragement and also to push me to my highest potential.”

kristin olsen showing

The Bullvine Bottom Line

Both Kristin and Becky encourage others to seek out this once-in-a-lifetime opportunity. “Whether you’re considering the job of Alice or not, I advise people to cultivate their passion for all things agriculture and spread its message to those you meet. It is our food, fiber, fuel and for many, a way of making a living.” Kristin agrees with Becky and invites people to follow Alice on her travel blog or on Facebook and Twitter and adds this endorsement. “Consider the role of Alice in Dairyland and then absolutely go for it.”

It is indeed a wonderful dairy world out there. Congratulations to Kristin and warm thanks for inspiring our Bullvine readers to share the Alice in Dairyland message “Agriculture! Happily ever after!”


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Categories : Dairy Industry

It’s haying season here.  A wonderful time of year for dairy farmers who produce the food that feeds the cows that produce the milk that feeds the consumers.  As we are watching the weather with one eye and with the other one on the cows and machinery, do we ever spend any time thinking about the next person who buys our dairy genetics? We love dairying and we do it to the best of our ability.  Our hearts and minds are engaged.  Do we consider engaging the hearts and minds of our genetics customers? Or are their wallets all we care about?

We have to be careful that we don’t think only of the pay cheque and forget that we are providing a product for real people.  In today’s marketplace we have two distinct customers.  First, the milk drinkers who we are more or less involved with, depending on the product we produce and what country we produce it in.  And secondly, the cattle buying customer.  Just as our future in the dairy aisle depends on the product we deliver, our future in the genetics industry depends on what we deliver and not what we can get away with.

The milk drinking public gets turned off by the media message of scary farm practices, rising health issues and poor animal care.  These concerns reflect badly on each one of us in the dairy industry.  We can’t separate ourselves from the message. Likewise, when it comes to selling cattle, we have to respect ourselves and our customers enough that buyers know what we stand for. If we allow ourselves to be the type of business where responsibility ends once the cheque is cashed, then we deserve to have our sales drive out the lane and forget us the next time they buy.

Dairy Sales Are All About People First

If you ever found it impossible to find out details about animals in a sale. If you have been disappointed after purchasing an animal to find out that there is an issue that wasn`t revealed. If you ever found that you were taken in by the fine print in a contract, you know where bad feelings start. “It’s nothing personal.” is the exact opposite of how you feel.  It’s very personal!

Good Business is Built on Trust

Good dairy business kicks in when marketers are smart enough and brave enough to work side by side with their buyers for the same end result – good dairy cattle.  When full disclosure allows you to make informed decisions, you remember it.  You will go back to that source again and again.  Of course, this means that a huge opportunity exists. You will likely do best if you avoid misdirection and pandering and instead embrace an honest approach to doing business. RULE #1: Build trust by treating your customers like respected peers and admired family members.

As Good as Your Word

Think about the last time you were impressed by how you were treated in a sales transaction.  It’s unfortunate that it’s rare enough to be remarkable. It is so refreshing to find your issues meaning more than a dollar sign and receiving more than was promised and not simply the legal bare bones. Today – especially with the instant sharing possible through social media – your happy transactions and your sad ones are shared far and wide. The word gets out and has instant repercussions on your business credibility and bottom line.

Marketing is More About the Stories than the Sales

Social media has found its way into the dairy business and is having a tremendous impact. Everyday there are new blog posts, videos and press releases. While this is fantastic for agriculture as a whole, it can be really hard to get your dairy business noticed. If you want to rise above the herd, you have to have a good story that captures attention. You need to share what you believe in, who you are and what you stand for.  The invisible face behind a magazine ad or an AI brochure listing is too easily lost in the 21st century crowd.

Today You DON’T Get What You Pay to Advertise For

In the not too distant past dairy players where the ones with the money to step up to the marketing table. It took advertising money to make money. Today, with social media, a business of any size can connect with customers and do it without spending a dime on paid advertising. Social media has changed the game and now anyone can compete regardless of the size of their marketing budget.

Where to Go?  What to do?

No sooner do you get comfortable with one or two pieces of modern technology, then a whole handful more present themselves to your flying fingers. Sites like Facebook, Twitter, Reddit, and YouTube have totally changed the relationship we have with present and future customers.  It can be challenging to figure out where to focus your time and energy. Here again it’s not the single choice of one site over another.  In easily understood farmer terms, it’s about cultivating relationships. Find the way to tell your story in a way that is comfortable, honest and open and you will engage customers loyal to you and your business.

Talk is NOT Cheap

This may sound like a complete reversal from the “free” advertising mentioned earlier but, in this case, it is referring to what happens after everyone finds you and then has the ability to share their experience and thoughts, not just with the neighbor over the fence, but with hundreds to thousands of people.  Today, more than ever, you must walk the talk and be accountable to your customers.  The minute what happened in your barn, in your office or at your auction sale hits the wires it becomes the measure of your business.  Believe it!  When bad news gets out there it’s going to be shared so quickly it will make your head spin and your bank balance shiver in fear.  In the past when bad news raised its ugly face, you had a certain amount of time to plan how to respond.  Today, if you wait to respond, it can be too late.  Responding in real time with real information will be more successful in transforming negative publicity into a building opportunity.

The Bullvine Bottom Line

Is there a way to use social media so that you won`t have to suffer through scary mistakes?  No! Mistakes happen in any environment.  Equipment fails.  Hay weather upsets the routine.  Cows get sick. And that’s just one farm.  Ramp that up to real-time techie interaction on the web and you can’t expect perfection of yourself or anyone else.  Rather than worrying about making mistakes, you should be worried about not making them!  If you’re not experimenting with social media that means you’re missing out on a myriad of ways to win hearts, minds and wallets!



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Boarded Up? Above Board? or Bored Silly?

Thursday, June 6th, 2013

There are basically three ways that boards operate that are familiar to dairy farmers. First there are the ceremonial ones that largely rubber-stamp whatever the CEO wants.  Then there are the traditional boards that try disjointedly to attempt to influence.  Finally there is the progress board that is comprised of a group of experienced leaders who add value. I have no doubt that you have experienced at least two of these three main board types.

We all give lip service to the fact that we would like to have the highest performing boards leading our dairy associations. Are we successful? A quick check of how we put board members in place might hint at a less than performance-oriented selection process.  Boards are only as good as the directors that sit on them.

To my mind, a healthy board is one where there are numerous potential candidates eager to lead.  Healthy boards have a rigorous nomination process and, after the directors are in place, there are periodic checks of board performance and, more and more frequently, peer evaluations.  Do these steps sound familiar?  Probably not.

There was a time when members were face to face with board directors often enough to have a real idea of their position on issues and ability to deal with them. Boards today often cover much larger geographical areas and rely on electronic reporting.

Nothing is more disappointing then having the opportunity to vote on qualified candidates and then discover the individuals can’t, won’t or don’t deliver as expected.

After all, this isn’t like government (or we say it isn’t) where the expectations are already low and there is skepticism. But on most dairy boards the directors are our friends and peers.  They’re nice. That’s the conundrum.  It would be easier to accept if they were grumpy, snarly and complete strangers.  That NOT being the case , we are faced with living out our disappointments when we realize that the change we hoped for isn’t going to happen or, unfortunately, the problems are getting worse.

Boarded Up!

Sometimes we need to identify the root problem that causes some directors not to grow. That problem is often a loss of passion and enthusiasm on the part of members of the Board. For whatever reason they either didn’t have or have lost their spark. An effective board is composed of people who have real excitement for the work of the organization and can sustain that excitement. Of course, that’s easier said than done.

If only we were able to build good boards from the get-go! Clearly, the framework of the board as a whole, and of each director, is paramount.  The stakes are even higher when selecting directors today when the talent pool of people who are willing to accept new directorships is shrinking while the need for effective decision making by dairy organizations is becoming even more crucial.  At the very least, the board as a whole needs at least eight competencies represented by several directors:  business judgment; general management experience or perspective; finance; industry knowledge and trends; leadership; international markets; strategic thinking ability and crisis management expertise. Depending on the organization, the threats and opportunities may require more depth in some of these areas than others.

Plank by Plank the Board Platform is Built

With the right people in place it is imperative that they know what their role is.  It is far too easy for Board members get bogged down in the administrative details. After all, many of them run their own businesses.  They are comfortable with the details.  However staff focus is on the details and the Board focus is on vision, policies and financial oversight. There are three main areas that every board member should be aiming to contribute toward.

  1. Lead domestically, collaborate globally. (Even national or local Boards must keep the global picture in mind).
  2. Innovate continuously for a sustainable future
  3. Inspire the next generation

Above Board

We need to raise our expectations. For the sustainability of our industry, boards need to become more results oriented. And we as members need to hold them accountable. Too often we see Boards getting mired down in the administrative details that should be left to staff to carry out.  It is the vision and policy (and of course finances) that are the concern of the Board.  A strategic plan with measureable outcomes and assignment of tasks is the main work of a Board.  It doesn’t end there.  It needs to be dynamic.  The biggest weakness of any Board occurs when they do not have an “ACTION” agenda that is reviewed, revised and put in place.

Tracking Open Action Items is key to Board effectiveness. One of the first indicators that an organization is struggling is that open action items are not tracked and reviewed. (Open action items are required actions that have not yet been completed.) Instead, directors only see and react to the latest “fires” that are presented around the board table. Whether open action items are critical to address now or not, they should not entirely be forgotten.

Tracking Board and Chief Executive effectiveness is also key.  Too often (especially if there isn’t a crisis) there isn’t a procedure in place to evaluate BOTH roles.  Quite often boards just go through the motions. In the end this could weaken the entire structure of the organization.  Commitment comes from having a stake in the outcome.

Silly Board or Bored Silly?

With decades of board experience, I no longer have the patience for what I term” silly agendas”. It’s frustrating to commit time and energy to find that you are merely required to rubber stamp the agenda of the CEO, Staff or a particular interest group. In those cases, it might have been more honest to send out a report, ask for an email vote and have the vote sent in.

When you are not actively involved, another weakness can take hold— the “numb out” factor. One of the first signs that a board is in trouble is when members have opinions that they don’t express during meetings. If you find yourself sitting in a board meeting and realize you have “numbed out”, then you’re not doing your duty as a board member.  Effective boards guard against this by providing full backgrounds to directors at least a week before each meeting. One of the clearest indicators to board members that the organization is not taking them seriously is if they don’t get materials in time for adequate review before board meetings. Committee reports, action reports, financial report and  materials that can help board members act on any major decisions should be available before decision-making is required.

Once directors are fully informed the entire board should be invited to comment. Really invited—not just presented with the rote question, “Is there any discussion?  Whenever there’s good dialogue and everybody feels like their opinions are valued and that it’s okay to open their mouths, that’s when progress will be made.  Directors should get their work done in between meetings not in between agenda items as the meeting is progressing. Good director research will be brought to the table. Good information will form the basis for discussion. The board will be aligned and involved and transparent. This is the kind of Board that makes a difference to the industry.

In all of this discussion we mustn’t forget to ask, “What is the role of the membership?” Regardless of the people and the goals of the Board, unless the membership is engaged no progress will be made.  The work of the Board doesn’t start and end at the Board table.  There must be commitment to keeping open, transparent communication with the membership. And the membership is responsible to keep it going both ways.  Support works best when it comes from both sides.

The Bullvine Bottom Line

A healthy board process creates dynamics in which everyone is engaged and listening, adding value, supportive of open and authentic exploration of ideas and participating in balanced ways.  You know you have the right directors in place, when they are providing the membership with a springboard to a sustainable dairy future!

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Categories : Dairy Industry

DAIRY PRIDE: Presumed MISSing!

Tuesday, May 28th, 2013

Today the average North American is three generations removed from a farm. Food is still being provided even though the numbers would suggest that dairy farmers themselves are going missing. Both husband Murray and I represent the fourth generation to live on the family dairy farm, which puts us among the 2 percent who still live on farms.  Although each succeeding generation has spent more time working off the farm, all three of our children are in agricultural careers in A.I., nutrition and ag marketing.

In the modern marketplace milk and the dairy industry are misjudged and misunderstood. (Read more: How got milk? Became got lost?) Those of us who remain are concerned about what happens to the milk they produce between the time it leaves the farm lane and takes up shelf space in the dairy aisle. This formerly “perfect food” is marked by a hit and miss journey that has many more misses than hits. Targeted by misconceptions, misinformation, and communication is it any wonder that there are days when both sides feel that dairy pride could be presumed missing?

MIStaken Identity

Every one of us who grew up with a farmer as a role model is astonished today at the metamorphosis from “Farmer in the Dell” to “The Farmer is the Devil”.  However on the farmer side of the fence, we too shouldn’t jump to the conclusion that the consumer is “the Big Bad Wolf.” ready to huff and puff and blow our dairy world down. None of these images fully portrays the real strengths, challenges and fears facing 21st Century farmers and their customers.


It’s extremely difficult to understand how some of the public perceives farmers as “MOST WANTED!” for abuses against our own animals.  The immediate question arises, “How can anyone imagine that people who work daily with livestock don’t care about the animals?” It would seem to be a no-brainer that only the best possible care allows animal handlers to survive and thrive on the farm.  Having said that, neither are financial reasons the main motivation. “You do it because you love the animals.  Otherwise why would you be up before sunrise and making final rounds after sunset day in and day out?”  You wouldn’t.


Over time, fewer and fewer find the rewards that are commensurate with the commitment and dedication that dairying demands.  For those who do have the desire, farming methods have become more efficient.  Technology has contributed to the sustainability.  Automated equipment, robotic milkers and GPS tractors are just a few of the tools that keep efficiency growing. As in any other industry, investing in new technology requires that the business, in this case the farm, must get bigger. In responding to the challenges, it is frustrating to be labeled with the implied derogatory term, “Factory Farmers.”  The truth is 98% of farms are family owned (what other business can claim that) and the goal is, as it has always been, to provide food …. for everyone.  Not selfish.  Not criminal.


It’s ironic in this day and age of mass production, mega stores and IMAX that big farms are judged to be bad. It’s hypocritical to accept the growth of computer assembled cars and think that food producers can remain at a static size. There was a time when one famer fed five.  Everyone respected their hard work. Today one farmer feeds 200 and it seems like everything from motives, to ethics to animal husbandry is being questioned.  Is there any other profession, where the consuming public insists on reverting to the past?  If you’re reading this, you are using a computer.  How many channels are available on your TV? Is your transportation provided by a “mom-and-pop” car shop? Do you drink your water from a pump in your yard or do you reach for a plastic bottle?


As an industry we need to accept responsibility for debunking myths that have taken hold in consumer understanding.  Jude Capper, assistant professor of dairy science at Washington State University spoke at the Alltech Symposium. “Organic dairy farming certainly has a very favorable consumer perception. But, productivity on the typical organic dairy farm is lower than conventional farms – anywhere from 14 to 45 percent lower in terms of milk yield per cow.” she said.  “What that means is that more cows are needed in the organic systems, along with more natural resources, to make the same amount of milk as the conventional systems. And, that increases the carbon footprint per pound of milk.”  Since 1944 the carbon footprint per pound of milk has been reduced by 63%.  Dairy farmers have made major progress and it is something they should be proud to declare and share.


For whatever reason – perhaps because of their agrarian forefathers – people feel quite comfortable assuming their expertise about modern farming. Where they might tread lightly in pronouncing how factories should be managed yet there are many “activists” who can speak against modern agricultural practices.  Genetically modified organisms deepen the divide between farmers and consumers.  GMOs are crops that have been scientifically altered to enhance the plant’s quality and resistance to elements and pesticides.  In a national survey 64 percent of people said they were unsure if eating GMOs was safe.  It is time for the dairy producer to stand proudly behind the products we produce, eat, drink and serve to ourselves and our children.


Farmers and consumers too often have an “us against you” mentality, which the media intensifies by focusing on negative instances that can colour the entire industry.  More consumers are asking questions about where their food comes from and about farming in general. That’s great. Just asking questions is the best way for the public to learn about farming.  Asking and getting an answer is the only way to bridge the gap between emotional finger pointing and mutual thumbs up!

MISSing the Opportunity

The time is long past, where we can rely on our good intentions to spread the good word to the consuming public.  It’s time to proactively take whatever role we are most comfortable with.  Rather than witness a loss in dairy and consumer confidence – I would rather stand on my soapbox, share great stories, teach what I believe in, and raise my voice at every opportunity.  It’s time to be the “change I wish to see!”

The Bullvine Bottom Line

It’s not easy being on the receiving end of blame. However whether producer or consumer it’s in our best interest to make sure that there are voices, from both sides, speaking with pride, about the products we produce and eat!


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AUSTRALIA: Is Down Under Going Under?

Tuesday, April 30th, 2013

Dairy producers around the world can be forgiven for having a romanticized vision of producers in Australia. We imagine that, like the country, the industry is big, bold and populated by the friendliest people you could ever meet. Well, that`s the story. But unfortunately our peer group is finding it impossible to stick with it! Headlines report that a full blown “Crisis” is turning things upside down with “Massive job losses!” and “Rural Debt Approaching $60 Billion” It is hard to imagine what they’re going through.  However, it isn’t only financial strife that is hitting that usually Teflon group known as Aussie dairy farmers.  The downturn has gone on so long that it is spreading beyond the farm. Many rural towns that rely on farm dollars are closing businesses because of the financial impact.   Banks are closing down on lending.  It’s dire straits for everybody. In the long term it doesn’t look any better.  ABARES (Australian Bureau of Agricultural and Resource Economics and Sciences) forecasts a 36 cents per litre farm-gate price within five years – well below the cost of production. For many families who make up the backbone of Australia’s third biggest agricultural industry, the threat of going under has turned from “it will never happen” to “it could happen soon”!

Quit or Lose Everything?

Yes! Although renowned for their warmth and informality and universal love for their country, today’s Australian dairy farmer is facing serious challenges. It is estimated that 20 per cent of south-west Victorian dairy farmers are potentially in great trouble with the banks. The current 6,700 dairy farmers in Australia is a number that is down considerably from 12,000 a decade ago. And instead of enjoying productivity and success even fourth generation dairy farmers are on shaky ground and seeking options before it’s too late. For many that time is here. “There comes a time when you’ve got to stop.  That’s why we’re getting out because I don’t want to walk away with nothing.”  Year after year of losses have affected what options they face in leaving too. Those who have clung desperately to their dairy operations are finding it next to impossible to sell, especially in the last two years.  There are hundreds of dairy farms for sale in south-west Victoria. Unfortunately there are very few buyers. Farmers who previously expect up to $7000 an acre are struggling to get offers of $4000 or $5000. On the sale of an entire farm that could mean a million dollars less after years of dedication and hard work.

Dollars and Senselessness

From the outside looking in, we would love to identify what caused this situation in Australia and, hopefully, guarantee that our own national industry, wherever we’re from, isn’t on the same path.  However, the causes of Australia’s crisis are eerily familiar:

  1. Milk prices are NOT rising.
  2. Input costs – electricity, fuel, wages, feed and water – ARE rising.
  3. Investments were made that look foolish in hindsight.
  4. New policies and new taxes add new burdens.
  5. Not heeding #’s 1 to 4.

… C.O.P.s and Robbers

Two variables have had particularly unpleasant repercussions in Australia.  Dairy farmers are usually resilient and cope with Cost of Production challenges with belt-tightening and management methods that have seen them through the regular up and down cycles of the dairy industry.  However, COP creativity can’t make a stand against the highway robbery that appears to be happening in Australian grocery store aisles.  Press releases report that “At the moment the milk price we’ve been getting is 25 or 26 cents a litre.  The cost of production does vary from farm to farm, but for us it’s around 43 cents a litre.”  As if that wasn’t disheartening enough, the strong Aussie dollar (and who doesn’t want a strong national currency) is severely weakening the dairy industry. But the blows just keep on coming.

Coles says the milk war is not to blame for lower prices.

Coles says the milk war is not to blame for lower prices.

Milk Wars

Dairy producers worldwide face country specific challenges. Even so the battle between two parts of the same industry is disconcerting for Australian producers. “Two years ago Coles discounted its home brand milk to $1 a litre.  Its decision sparked a milk war as the other supermarket chains followed suit. This has driven down the farm gate milk price. Coles argues the milk war is not to blame and has undertaken an advertising campaign to put a better spin on their role. Dairy Farmers president Noel Campbell replies, “Part of the reason why people are so angry with the Coles situation is, whether you supply domestic or the export market, people think milk being sold for $1 a litre is just wrong. “The amount of capital expended on the farm,. The amount of labour expended on the farm, long hours etcetera, people just see it as a slap in the face.”

Seeking Solutions

When milk is cheaper than water, a universal cry is raised, “Help!” Some Australian groups turn to the government. “The government should appeal to the consumer to support our local dairy industry and the additional 50 cents per litre would be distributed direct to each farm by way of 12 cents per liter and would keep this quality product on our supermarket shelves,” Coffey Hunt On-Farm Agribusiness partner Garry Smith said.  “We need to get more money paid for our milk and continue to reduce our costs and inputs.” Good suggestions but another hurdle is thrown up since there have been savage cuts to agricultural R&D right around the country. Places to seek innovative solutions and leadership are running out. Farmers are understandably agitating for low interest or no interest loans to help them through until prices improve.  One suggestion is that there could be a consumer-paid 50-cents-a-litre Dairy Industry Support Initiative on milk.

Is Today’s Crisis Tomorrow’s Disaster?

Wherever they are, but most especially in Australia, farmers need to start thinking about the big picture beyond the farm gate. Failure to face the future could mean that the opportunity to build a sustainable industry is lost.  Profitability is the goal.  We need to stop internal competition and fighting before the entire industry is lost.

The Bullvine Bottom Line – Who’s Next?

The milk industry is volatile and affected by many variables. That’s not new but now there is a new world order of dairying nations.  Everyone – perhaps foolishly – buys into the story of a glowing future where demand soars and there is a wealthy future for dairy farmers.  Unfortunately here and now Australian dairy farmers must face the reality that they are no more profitable now than they were a decade ago. Something needs to change or the down under romantic story will become the down under dairy industry tragedy.


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Categories : Dairy Industry

With the recent announcements about both Canada and the US entering significant trade negotiations with the European Union (EU), there has been a great deal of discussion by breeders on both sides of the border about what this means to the future of the North American Dairy Industry (Read more:  A Nation Held Hostage By Dairy Cows and Dairy Groups Welcome Launch of U.S.-EU Negotiations).  One thing I learned in my microeconomics class is that in any competitive marketplace the price is determined by supply and demand.   As we enter into a more competitive global marketplace there is no question that the dairy industry will  depend on this economic model to determine its future.

The Future of Supply Management

It’s really pretty simple. In any industry you need a buyer and a seller.  If you have more buyers (demand) than you do sellers (supply) the price goes up.  If you have more sellers than you do buyers then price goes down.  Well, unless you are in Canada, where there is supply management and then that is  a completely different story.  In Canada the 12,700 dairy farms have been protected from this economic model because of the supply management system. It  blocks foreign competition from coming into Canada by placing elevated tariffs on milk and milk products thus making it impossible for imports to compete. Only about 5% of the Canadian dairy marketplace is supplied by imported products.  It has also controlled the level of production domestically (Quota) so that there is not an oversupply in the marketplace. This protects the price of milk so that dairy producers in Canada have been able to enjoy a stable milk price and consistent predictable revenue.

The challenge with this is that the world is very quickly moving to a global marketplace.  In addition, one of the global requirements is that there is “fair” and equal trade in all industries.  This means that systems like supply management are being removed in many countries and certainly are key issues in international trade negotiations.  Many Canadian producers have millions of dollars tied up in quota. Compare this to the $12 billion a year trade negotiations Canada is having with the EU and you can see why there is concern about  the future of supply management.  While I totally can see the benefits to Canadian farmers from the system, you simply cannot deny the benefits of world trade to the whole country. Hence you can see why these programs are severely at risk.

Canadian dairy farmers simply need to look south of the border to see what life without supply management is like.  Dairy operations have to operate very differently when sale price and production is not set by a managed system.  There you are forced to run your farm more like a corporate organization, with detailed analysis of profit and loss and all decisions dependent on the effect it will have on the bottom line instead of on emotion.  Yes it makes dairy farming more of a business than a way of life, but that is the future. The other is the past.

It also means that the marketplace will determine who stays in business and who goes under.  If there is an over production of milk, milk price will go down.  Those organizations that are having challenges will go under.  It’s simple business.  Run a good business you will succeed. Run a poor business and you will fail.  Notice how I said business and not farm.   Dairy farmers have to start looking at things differently.  Dairy farmers need to be business persons first and farmers second.  This could be a  change that many farmers are not able to make.

Demand the Other Side of the Equation

The  second part that I learned in my long and boring microeconomics class is that if you want to increase milk price and cannot decrease supply, then you need to increase demand.  According to estimates, the world population is set to reach 9.3 billion by 2100.  Much of this growth is set to come from countries like China, South America and Africa.  Very impressive numbers for sure, but let’s look at milk consumption in those regions.  China averages 28.7 kg/capita/year, most African countries average less than 50 kg/capita/year, and most South American countries average around 100 kg/capita/year.  That is nowhere near the 253.8 kg/capita/year that Americans consume, 206.83 kg/capita/year for Canadians and over 225 kg/capita/year for most EU countries.
Current Worldwide Total Milk Consumption per capita

Therefore, if population growth alone is not going to help significantly increase demand for dairy products, we then need to look at how milk and dairy products compete for market share.  As we highlighted in our recent article, Milk Marketing: How “Got Milk?” became “Got Lost”, the land of milk and money is gone.  As an industry we  forgot about the consumer, we  forgot about the product, and we forgot how to innovate!

demand variety

A simple trip to the local grocery store reveals that while products like organic foods, international foods and soft drinks are always innovating and battling for market share. Milk, for the most part, has not done anything.  Look at these pictures that show the amount of shelf space (key in driving sales) these other products have compared to milk.  We can no longer rest on our milk stools.  We have to compete for the marketplace with all the old beverages … and countless innovative new ones.  That may seem to be a daunting task but it can no longer be ignored!

The Bullvine Bottom Line

The world is changing, old systems and production models are being eliminated and new ones are being established daily.  Those that sit and try to battle to keep the old will be left behind.  We need to look to the future instead of fighting for the past.  Consumer demand is the most serious issue impacting  the future of the dairy industry.  We need to understand what the consumer wants instead of fighting for what we used to have. If you want to be part of the future, think about SUPPLY and DEMAND. There are good reasons why it is NOT called The Law of Supply and PROTECT!!


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People are starting to realize that the old market for purebred cattle, if not dead, is definitely endangered.  Why is this once “healthiest” of marketplaces facing the current flat line?

The basic assumption has always been that there is a premium for purebreds that is paid back on sale day.  Ever since there have been purebred cattle there has been a movement to convince commercial operators of the value of owning purebreds and registering their cattle.  For about the past 20 years the focus has gone from educating the commercial producer on the increased value of purebred cattle to making the process and the system a better fit for the commercial producer.  While the intentions were great, this change in philosophy has ultimately led to the demise of the premium received for purebred cattle.

Industry vs. Breeders – Whose Fault Is It?

For years I have heard both sides of this discussion.  Seed stock cattle breeders complain that industry executives in organizations like milk recording and A.I., as well as geneticists, would not know a good cow if one kicked them in the head.  I have also heard the other side of this argument where these geneticists and officials complain that purebred seed stock breeders don’t know how to see the bigger picture and the two sides have batted heads at the board level all along the way.

The part that many people don’t understand is that these industry officials did not set out to harm seed stock breeders.  Neither were they looking to discriminate against them.  Rather they saw this group as a niche segment of the market place and thought they needed to serve the bigger picture instead of catering to this small, but vocal group.

For many years the only organizations that seemed to hear the cry of the seed stock breeders were the breed associations.  Initially, the breed associations were great about trying to build new marketplaces, as well as trying to help educate commercial producers on why they should pay a premium for these purebred cattle.  They also educated commercial producers that by registering their cattle they too would receive a premium when they went to sell these cattle.  Ironically, all that changed when breed associations started to try to become a greater service provider to commercial producers, instead of building the marketplace for purebreds.  This shift in emphasis from worldwide market potential to bottom line domestic cattle and membership numbers, as much as anything, killed the premium paid for purebreds.

It Started Slowly, but Got Rolling Quickly

In the beginning the changes were small.  They simply made it easier for commercial operations to register their cattle.  Then came subtle (and necessary) changes to the classification systems to target a more commercial friendly cow.  Followed by significant changes where breed associations stopped being a marketplace developer and focused on being a service organization to the commercial producer.

While this helped increase registrations and showed that the breed as a whole was growing, the objective set out by our breeder boards, it started to have a small but significant side effect.  As the system changed to be more commercial friendly, the premiums commercial producers were expecting to receive for selling purebred animals disappeared.  Take a look at many of the sale barns today and compare the price of a grade fresh heifer to that of a registered one.  There is not as much difference as there once was.  There is certainly not enough for many commercial producers to justify the cost and effort of registration and type classification.  Add to that the fact that in many regions and with certain high end sires, there are no longer semen incentives for young sire usage, semen cost for young sires is almost as expensive as proven, and commercial producers ask, “If it doesn’t make financial sense, why do it?”

Without that premium selling price, many producers will stop registering their cattle.  With less herds registering, that means that costs for the programs will fall on the niche group of seed stock breeders.  Breeders who already have less income from fresh animal sales, and like all milk producers are battling the increased cost of production and the decreased milk sale price.  It certainly isn’t a time to take back additional expenses.

Yes, your top 0.1% index seed stock breeder is seeing greater prices than ever.  In addition, there is certainly still value in consistent generation after generation breeding families that provide a stable investment (more on that to come next week) but we are talking your average every day purebred breeder.  They have certainly seen the prices for fresh heifers go down.  Many have attributed that to the introduction of sexed semen and genomics.  I would contend it was more accurately due to the fact that the cost of milk production went up, milk prices worldwide went down, and commercial producers, the buyers of these animals, no longer see the need for the extra investment in the purebred pedigree they once did.

The Bullvine Bottom Line

By making that small shift from building the marketplace for purebred cattle, to trying to woo the commercial producers into registering their cattle, the industry as a whole has, in a sense, contributed to its own demise.  Now all sides need to find a way to work together, before it’s too late.

Has the heart of the industry stopped? Is there time for resuscitation? Who knows marketplace CPR?



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CDX LOGO - exhibitor“X” marks the spot for dairy lovers this February.  The inaugural Canadian Dairy XPO is being held at the Stratford Rotary Complex on February 6th and 7th, 2013.  CDX is the realization of a dream conceived by CDX founders, Jordon Underhill and Talo Tamminga, who felt passionately about providing a platform for the Canadian dairy industry, its people and its possibilities.

Lineup of “X”perts!

Day one of the two day event starts with Andrew Dellava, Marketing Manager of Hoard’s Dairyman Magazine.  This knowledgeable Master of Ceremonies will welcome everyone to an “x”citing dairy classroom education program, which includes several internationally recognized experts.  The program is designed to give you tons of content you can use from key people in the dairy industry.  This is where you get to have your questions answered on the following topics:

  • Genetic Advancement HIR trait
    • Brad Sayles, Semex Alliance – Canada
    • Dr. Bonnie Mallard, University of Guelph
  • Technology and Social Media
    • Billy Frey, Alltech Ag Network – USA
  • Nutrition
    • Dr. Charles Swab,  University of New Hampshire –USA
  • Global Dairy Summit Meeting
    • 5 dairymen from USA, UK, Hungary, Poland, Brazil and of course Canada
  • Economics and Animal Welfare
    • Joep Driessen, CowSignals, Netherlands
  • Consumer Connection
    • Lynn Crawford, Celebrity Chef Toronto, Ontario

“X”po Recognizes Female “X”pertise

The full spectrum of agricultural opportunities and leadership will be highlighted over the two-day program.  Three women who are making their mark in diverse areas of the dairy business are recognized by CDX.  Vicky Morrison, of Bally Bright Farms in Bright, Ontario is originally from Northern Ireland and now milks around 100 cows with her husband Mark.  They have recently installed two robots and she is keen to share her experiences and says she is “grateful to have worked with some wonderful people in research, extension and practical agriculture.”  Like Vicky, Kathryn Kyle, General Manager of Jersey Canada, encourages “all women passionate about the industry to step forward and take advantage of the countless opportunities our rapidly progressing industry has to offer.”  Kathryn is looking forward to face-to-face time with breeders who visit the exhibition halls.  Dr. Bonnie Mallard, Professor of Immunogenetics at the University of Guelph is one of those who is enjoying a career that grew from her lifelong connection with farming.  Her career journey has provided the opportunity to focus on learning about genetic regulation of the immune system and its impact on dairy health.  Her talks will highlight how these new genetic tools are ways to improve animal health and well-being as well as food quality and safety.

Excited to Explore

From the complimentary pancake breakfast that will start each morning to the demonstrations, exhibitions, genetics showcase, robotic showcase and extensive seminars, there is something for everybody at this showcase of dairy innovation.  Attendees will get to evaluate the latest tools and technology for growing their dairy business.  They will learn about initiatives and all that is dear to the heart of dairy cattle breeders and industry stakeholders.  Three tradeshow halls and the Britespan Cow Coliseum (itself a massive 65 ft x 300 ft structure) will guarantee that everything is bright, light and right at hand for spectators to discover.

Real Know-How and Real X-amples

Everyone knows that the best part of attending seminars is the one-on-one opportunity to ask questions, get answers and learn from the best in the industry.  The opportunity to get up close and personal with the leading technology will be a definite highlight of CDX.  Three demonstrations will be feature twice daily in the Britespan Cow Coliseum.

  • Real Time Somatic Cell Count Testing Using An iPhone
    Milk GuardianTM using patents pending technology From Dairy Quality Inc. will demonstrate how after a sample is drawn, the device scans the milk, an image is captured and analyzed and displayed on the iPhone seconds later.  The cell activity will then be shown to spectators on a TV screen.
  • Live Colostrum Management/Feeding Demo
    The unique aspect of the ColoQuick system is a hygienic way of handling and storing colostrum without de-naturing it.  The demonstrations will show how pasteurized colostrum can be taken from frozen to feeding in less than 15 minutes and immediately fed to newborn calves.
  • Live Demonstration of Tranfaunation Using the Rumen
    Transfaunation involves the removal of rumen fluid from a healthy herd mate that is then drenched into a sick cow.  In addition to treating sick cows, research at Cornell University also shows the benefit of using this rumen fluid to greatly reduce scours in calves’ first 14 days of life.  Should every producer have a healthy fistulated cow on farm?  Come see for yourself!

As well there will be four simulated milking robot demos LIVE under one roof!

Canadian Dairy Xpo

Buildings are already being constructed.

Event organize enthusiastically proclaim that these robot demos are “first for the world!”  As the technology expands CDX is providing a showcase for dairy producers to see and compare the latest in robotic milking excellence.  They report: “In the last 15 years, milking robotics and on-farm automation have gone from expensive curiosities to redefining the dairy industry.  The growing use of robotics on Canadian dairy farms demonstrates that this technology is not only proven, but that there isn’t just one approach to farming anymore.”

X” tras  Make the Xpo Experience “X”ceptional!

It goes without saying that you will want to see Celebrity Chef Lynn Crawford who will be cooking with 4-H kids and photo opportunities with the TV star will be available.

Genervations will be selling tickets on four high genomic Holstein heifers that will be showcased in the Cow Coliseum as part of their dairy daughter showcase.  Not only an eye-full but also potentially a winning opportunity!  Tickets available to 4-H’ers at the XPO and a draw at the end of the XPO where one lucky youth will get choice of the 4 heifers for their 2013 4-H project…WOW!

Dave Carson Auctions will present an Elite Embryo LIVE auction with 100% of the sale commission proceeds going to 4-H. Support for 4-H and our future dairy industry is a recurring theme throughout the event.

The Bullvine Bottom Line

The Canadian Dairy XPO hopes to inspire both the current generation and the tech-savvy next generation.  Of course, the CDX TEAM has put their hearts into this event and are confident in saying to dairy lovers everywhere “We trust you will find this a rewarding experience!”.

Click here for a $10 off Admission Coupon

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Categories : Dairy Industry

taylor-swift-got-milk2013ectIt’s just eight days into a New Year and already I’m thinking about the ‘good ol’ days!”.  Remember when the dairy industry was at the top of the agricultural sustainable list, milk was the “perfect food” and milk moustaches were seen on celebrities and sports stars? Hmmm. Where has all the glory gone? In 2013, the dairy industry is fighting to stay alive, the North American diet, including milk, is under attack as obesity from babes to the elderly is out of control and, when all is said and done, milk is a slipping way down on the favorite beverage list!

The land of milk and money is gone. In the cold light of the soul searching brought on by a new year, it seems that this shocking state of affairs has happened suddenly and for no apparent reason.  In actual fact, the signs have been there for more than thirty years and we as an industry let it happen.

MILK OF AMNESIA – We forgot the basics

It took three steps for the milk market to evaporate!

  1. We forgot about the consumer.
    The first commandment of business, “The customer is always right!”  in the dairy industry has become “The cow always comes first!”
  2. We forgot about the product.
    Somewhere production, with the myriad of logistics in between, pulled out in front of the inherent value of our end product – milk.
  3. We forgot delivery.
    Despite the first two failures, we still expected that the product we produced could be delivered in boring, hard-to-open cardboard cartons, heavy jugs or even plastic bags and compete against the “cool” the “sexy” and the “handy” beverages provided by competitors – who wanted — and stole — our market share!

MISSING THE TARGET:  Where’s The Consumer? Where’s the market?

Consumer demand is the key to market sustainability. There’s no use producing a product if there is nobody to buy it. The truth is demand for milk has been in a free fall for the last three decades.  North American milk consumption has dropped a startling 36% since the 1970s. The continuing economic downturn has refocused consumers on value.  They not only are choosing private label products and discount store venues, they are seeking low calorie, reduced sugar and functional value in the beverages they consume. Milk – even though billions of pounds are being produced is losing out to fortified, organic, sports drinks and a myriad of better-for-you products. We are paying the piper for focusing on just one highly commoditized product, ignoring market trends, and trying valiantly to sell what we make rather than what people want.  If we don’t give consumers what they want, someone else will.

LOOK BEYOND THE PAIL: Think outside the box stall.

For decades industry strategy has been to make dairy operations more efficient.  It has succeeded: From 1970 to 2006, the number of cows declined 25%, output per cow more than doubled. But while the dairy industry focused on squeezing more milk out of fewer cows, they largely ignored the fact that demand was getting squeezed as well. That’s the nature of business. Where’s the competitive spirit that drives all the other parts of the dairy industry?  Even the perfect sire or model cow, needs to be marketed.  Our over-riding concern to “protect” ourselves from each other, the economy and even mother-nature, has made us put on blinders to the dangers of not being relevant to the marketplace.  Breeder beware! We could protect our industry right to zero!!


Three steps got us into this mess.  Let’s start with four to get us out.

  1. Pay Attention:
    With per-capita North American milk consumption down 36% between 1970 and 2011, it isn’t whether or not there is a problem. The fact is the dairy industry is in trouble.
  2. Make it Functional:
    You’ve got to get the drink – in our case milk – into consumers’ hands. This is no time for doing things the way they’ve always been done.  Look at Nestle.  They wanted their milk drink containing probiotic for children to have a shelf life of one year.  Realising that it is impossible to keep the probiotic alive at room temperature for more than a few days.  The solution was a shelf-stable nutritional drink with the probiotic in the straw, instead of in the drink.  Inside the patented straw of boost Kid Essentials is the probiotic lactobacillus reuteri ‘protectus’, released by the liquid when the consumer drinks through the straw! Now that’s functional!  On-the-go consumption is increasing. Milk packaging needs to conform to this trend.  Consumers are increasingly looking for a range of package sizes to suit different beverage types and thirst levels, as well as functional and aesthetically-pleasing packaging. Not my area, you say as a dairy farmer?  Whose is it?  Who cares?
  3. Make it Healthy:
    Whether it’s the health benefits you get from drinking milk or the environmental benefits of how it is packaged – the consumer cares about both! Parents are increasingly concerned about the nutrition and sugar content of the products consumed by their children.  This can work for us (with soft drink competition) or against us (sugar added milk products).  Again packaging enters the discussion. Studies in 2011 showed there is a substantial proportion of European consumers that would be prepared to pay extra for glass containers, especially for milk, yoghurts, juices and wine. “it may well be that consumers are willing to pay more as good packaging protects the health benefits and taste of the product for longer”. The health and wellness trend is not going away.  We have a healthy product but it won`t sell itself if we continue our milk-sells-itself mind set!
  4. New Products. New Location.
    We`ve got to ask ourselves what does the market want and then find innovative ways to provide it. Perhaps even before we answer those questions we have to zero in on “where” the market will be.  In a global marketplace, we need to consider the enormous potential of focusing on the end user – perhaps in another country!

LIVE OR DIE MILK BATTLE: Consumption is the Key

We can no longer rest on our milk stools. We have to compete for the marketplace with all the old beverages … and countless innovative new ones. That may seem to be a daunting task but it can no longer be ignored.  Again.  The world is waiting.  Look at the graphic below.  While our own markets are mature in the milk marketplace, there are HUGE opportunities for dairy in the global scene. 

Consider this: One glass of milk per day per child in China could surpass the milk consumption of the entire North American market. It’s a new frontier to be won!


We can’t continue to let narrow focus override finding the consumer and serving them the milk products they want. Laying blame won’t stem the downward trend of the dairy industry.  Remember when land-line phones had a monopoly on communication? Think about large phone companies (another almost monopolistic industry, especially in Canada). Where would they be today, if they had continued to whine about the intruders into the marketplace?  The faster we learn from their example, the sooner we’ll prove that the North American dairy industry isn’t ready to kick the milk bucket yet!

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