Milk lost some of its unique identity over sixty years ago! When bulk on-farm pickup rolled in the lane differentiation was sacrificed for one truck convenience. Premium milk for fat content or other specific composition no longer reached the processor’s door.
Guernsey Gold, could no longer be sold for its high carotene content as milk from Guernseys became simply part of the load of milk from all dairy herds in an area. Back then milk was primarily considered as a liquid drink and the need for keeping unique milks identified separately was given no importance.
“Set Yourself Apart or Be Set Aside”
The market and the consumer have both evolved. Today consumers want to know that what they are purchasing will have a positive effect on themselves and their families. Meeting these changed needs means that producers, of generic milk, will have a very narrow profit window. The choices for success, for those producers, have dwindled down to a small list:
- Size up so that you profit from economies of scale
- Use technology to minimize labor and to assist management practices.
- Fine tune feed preparation, feed composition and feed delivery to cut costs or differentiate.
- Breed beyond production and conformation to produce value-added milk.
Milk’s future value (2025+) will be highly dependent on its solid’s makeup or methods of production. Over 80% of milk, once processed, will end up in solid form. The dairy industry needs to re-think the way milk is bred for, fed for, transported and processed. However, as we all know, changing those factors does not happen suddenly. With future needs for milk and its solids in mind, The Bullvine promotes for consideration, discussion, planning and production, milk that will be used for solids, new and specialty purposes.
“Analyze What You Are Producing Or Paralyze Your Profits”
Every week at The Bullvine we join our dairy industry peers in thinking, writing and talking about the future of dairy farming. As a milk producer, you live it every day.
A recent US study reported that the reason almost 85% dairy operations will go out of business will be because of one or a combination of poor management, lack of application of the economies of scale and/or not keeping up with the times in consumer demands.
Productivity and profit will be key contributors to on-farm success. Most often dairy farmers think and talk about cost reduction but even more critical than squeezing every last penny out of costs is the revenue generated by the milk that leaves the farm. The dairy industry, farm to fork, has evolved. Keeping up with change is not a choice. It is a necessity.
“Want More Money! Provide More Processor Value”
The first rule for the processor of a product is that the value of the product to the consumer rules the day. For most dairy farms their immediate consumer is the processor.
If the value that the processor can derive out of the milk that leaves your farm is the base product price, then expect the current approximately $15-16(US) per cwt to continue. Below the true on-farm COP.
The value of milk will be set by consumers not by dairy farms.
- Only if the processor can make higher valued products from milk received can farms expected to get a 10% to 30% higher farm gate price.
- Only for a limited number of dairy farms that self-process, will producers be the price setters.
Tomorrow’s Consumers’ Demands
As we move forward healthy low-cost grocery store foods will continue to be demanded by consumers and governments will continue to support and demand cheap food. Only foods that meet specific health, nutritional or lifestyle needs will be able to be priced higher than the base in-store price.
New products made from milk are being sought out all the time.. Groceries can be ordered on-line and delivered just in time to people living in developed countries. Milk products need to fit into that evolving model.
Where is Your Milk Value Added?
How many of these can you check “Yes” to when your milk leaves the farm gate?
Fat % composition or processing
- -full fat milk ,
- unique butters,
- specialty cheeses,
- unpasteurized or unique milks
- beta casein (A2 allele),
- kappa casein (B allele)
- forage (grass) fed
- carbon footprint reduced
- totally traceable,
- animal health and welfare (including dehorning),
- favorable animal environments,
- clean water source,
- farm with pristine industry image,
- grown locally,
- milk haulage pooling for differentiated milk,
- data management system to support verification,
- DNA testing for breeding, culling, feeding and marketing …
Denying the need to add a unique feature to the milk that leaves a farm will mean the farm is not keeping up with the times. Consumers buy on features not just on basic nutritional need.
“Value Added Indexes are Here. Use them. Develop Them. Ask for More.”
The following are some genetic factors/ indexes that will help milk processors derive more income from the milk producers ship. Most of these have become available during this century and farmers can expect more of these value-added indexes to become available in the future.
- Fat %
- Casein composition – A2A2, BB
- Reproduction – conception, calving ease, embryonic survival, haploid avoidance, …
- Polled and sound functional feet
- Health – DW$, CW$, Immunity+, Feet/Heel/Mobility, combined health trait indexes (CDCB/CDN), …
Producers who do not use this information are continuing to hitch their futures to horse and buggy days instead of going modern and meeting consumer demands. There are many sires, reasonably (semen) priced, with high NM$ (over $800) or Pro$ (over $2000), that have the consumer demanded characteristics and are above breed average for all traits or indexes. There is absolutely no need to use sires not in the top 25% of the breed for all economically important traits.
Is it Too Late or Are You Too Tired?
NO, not too late, … but … it is time to stop the procrastination in expanding trait selection. Delaying or denying the inclusion of value-added traits in sire or embryo selection will result in the milk shipped being of less value to processors.
The Bullvine Bottom Line
Shipping milk off farm that milk processors can sell at an increased price (to build their margins) will be very important to the future viability and sustainability of dairy farms. Producers, when selecting their future genetics, need to move past what has governed their past selection practices and think first of consumer needs and demands.