In times like this, when the milk price is low and profitability seems unattainable, it seems that everyone is looking for a solution to the dairy industry’s raw milk pricing dilemma.
Many try to solve it by addressing global issues like imports and exports. A number in the industry think that cost of production should be factored into milk price calculations.
Some spend a great abundance of time and effort in attempts to increase demand through product promotion.
Still others talk about supply management as the solution to our problems.
All of these can and do affect the bottom line of profitability, however, when discussions are held on these questions the only consensus reached by those participating is that there are more questions than answers.
Even the CWT program being implemented this summer, while being able to gather more support than any other effort previously attempted, is still being rethought and altered minute by minute.
Start at home. With broad answers to low milk prices remaining elusive, focusing specific efforts on our individual operations appears yet to be our best option.
When we ask, “How can I improve my operation?”, answers like “price risk management”, “specialization”, “expansion”, “low input operations”, “increased dry matter intake” and the ever dreaded, overused voodoo suggestion “increased efficiency” are thrown about.
And it is very relevant to continue to have discussions on all of these management suggestions as well as those attempting to address milk prices.
But when all is said and done, the most effective efforts in determining productivity and profitability are those directed into our own specific operations.
Managing what we control. The foundation on which good management is built is complete and accurate records. Yes, maintaining good records is a time-consuming task, but it is well worth it.
Without proper documentation, all the planning, organizing, and staffing cannot be effectively directed or controlled and the result can be classified as little else but wasted time.
The only good aspect of not keeping good records is that you don’t know how much time you wasted or the money you’ve lost.
When we consider keeping records, we must also determine what type of records we need, for there are many types.
Financial. One of the most important and most common types of records we maintain, at least to keep the IRS happy, is our financial records. These records are required to fill out our taxes, to apply for loans, and for the most part to justify our labor and efforts.
Dairy Excel’s 15 Measures of Dairy Farm Competitiveness is an excellent source to use to compare your operation with industry standards.
Measurements included are: operating expense ratios, dairy investment per cow, net farm income, asset-turnover ratio, rate of return on farm assets, and debt-to-asset ratio.
Contact your local extension office for more information on the 15 measures.
Production. Production records are some of the most fulfilling records to keep and are usually the records that most dairy producers can quote completely.
Milked shipped, rolling herd averages, pounds of milk sold per worker, breeding records, calving intervals, and feed consumption are all examples. Everyone should be familiar with these and a complete list is not only lengthy but also probably unnecessary.
Animal health. The importance of these records has increased the last decade as drug residue tolerances decrease and drug screening test sensitivity increases.
The beef and dairy quality assurance programs has provided critical drug residue prevention information and has established a mandatory system of compliance.
BSE, foot-and-mouth, and Johne’s disease have also increased awareness of the risks of infectious diseases and have led many to develop on-farm biosecurity plans and records.
As the consumer demands greater assurance of a safe food supply, how can a more accurate and complete record keeping system be denied?
Animal ID, drug use treatment logs, residue testing results, veterinary recommendations, visitor logs, and shipping records may all be required in the future.
Product quality. In livestock agriculture, product quality goes hand in hand with animal health.
With market competition continuing to increase the quality of our product must also remain high and above reproach. Therefore, it is imperative that each individual operator monitor and record quality issues such as has been done by dairy cooperatives and processors in regards to bacteria and somatic cell count.
Other on-farm records could include sanitation procedures, system maintenance, product temperature, and chemical inventories.
Environmental impacts. The latest 300-pound gorilla in the industry is the concern over animal agriculture’s impact on the environment and the rules that are being established to limit it.
Until recently, a limited number of livestock operations have been required to apply for permits, however under the new U.S. EPA guidelines, every operation that has the potential to discharge will be required to at least apply for a CAFO/NPDES permit.
A good portion of the permit has to deal with the documentation of manure storage and application practices. Complete records are required to show that an operation is in compliance of EPA’s discharge rules.
Unlike the U.S. trial system, when it comes to environmental degradation, it seems that most parties are considered guilty until proven innocent.
It’s recommended that all livestock operators develop and implement a Comprehensive Nutrient Management Plan that has been approved by their local soil and water conservation district using USDA standards.
Records included in a manure plan would include soil and manure analysis data, cropping rotations, manure application methods and amounts, water monitoring test results (ground & surface), and emergency contact information (in the case of a spill).
According to Ohio’s new Livestock Environmental Permitting Program, producers will also have to monitor and document pests such as flies and rodents.
Third party assessments. A great way to know if you are up to speed with today’s changing environmental requirements is to participate in a third party, on-farm assessment.
One program that is recommended because of its high level of confidentiality is the On-Farm Environmental Assessment and Review program sponsored by the Ohio Livestock Coalition and it’s free.
For more information on this program go to www.ohleap.org on the web or call 614-246-8288.
Animal well-being practices. As mentioned before, consumer expectations and demands are continuing to increase.
The conflict seen by most producers is that consumers want a higher quality, lower risk product, that is raised in a manner that does not negatively affect the environment nor does it cause undo stress or discomfort to the animal; and they want it cheap.
Those who are able to document that generally accepted best management practices (BMPs) are being used on their operations will be ahead of the curve when it comes to market competitiveness.
Emergency management. One of the most important types of records may be one of the most overlooked on today’s dairy operations. Dairymen are generally concerned with the day-to-day operation of their dairy and have little time to consider, “What if……?”
A written Emergency Action Plan lets anyone involved in the operation promptly react in the case some emergency is encountered. This documentation can save as little as a few minutes to as much as the life of an individual.
Some of these details include: emergency contact numbers, facility maps, locations of hazardous chemicals, underground containment units, and procedures for handling things such as catastrophic mortalities and spills.
You may also consider contacting your local emergency management personnel.
(The author is an OSU Extension associate with the dairy industry enhancement program. Questions or comments can be sent in care of Farm and Dairy, P.O. Box 38, Salem, OH 44460.)
