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Dairymen briefed on economic situation, industry innovations

Thursday, March 5, 2009

Dealing with the current economic situation and innovative technology were among the themes discussed at the Monett Chamber of Commerce's Dairy Day conference, held on March 3 at the Monett National Guard Armory.

The economy is so bad now, said Joe Horner, state agricultural business specialist for the University of Missouri in Columbia, that dairymen can expect their expenses will surpass their revenues by $100 per cow every month for the next six months.

Milk prices are at a very low point, though they were worse in 1997 and 2000. However, at that time costs for feed, fuel, fertilizer and other expenses were significantly lower.

In the past year, Horner said, milk production was good, but the collapse of the world economy resulted in demand destruction. Dairy producers have been getting relatively high prices for milk, which encouraged them to milk more cows and keep their herds larger. That led to an oversupply of milk at a time when the economy went into a nosedive.

Supply and demand needs to be realigned, Horner continued. That can happen in as little as six months by culling herds. Horner showed from history that cycles like this happen every three years, and did it last in 2006. With corrective action, the industry can see a positive position again in 2010-12, although the cycle could repeat itself right after that.

In the meantime, Horner urged dairymen to watch their cash flow, and sell off non-producing assets to tide them over for the next six month. He remained positive about the industry in the long run.

Larry Moennig from First State Bank, another speaker, told the dairymen that banks are still making loans to agriculture. He urged detailed record keeping to show bankers exactly how money was spent and managed. Those with business plans who can show how they can reach their goals were the most likely to receive a positive outcome from meeting with a banker.

The diary business has a history of trying new approaches in the midst of uncertain times. Barry Steevens, state dairy specialist with the University of Missouri in Columbia, talked about how the industry has evolved over the last 30 years. In sheer numbers, Missouri's dairy herds have gone from 275,000 cows in 1978 to 112,000 today. There are fewer producers, and cows are making more milk.

Through genetics, cows have gotten larger. Just 10 years ago, Steevens said only a few dairymen though a cow could produce 100 pounds of milk a day. Today such production is common.

The university has watched changes in operations by studying the family farmer. Production systems have been impacted by computers. At one point, dairymen started cows wearing a neck tag with a computer so that a cow could get grain when she came near the barn. That approach has come and gone, he said, in favor of mixed rations today.

Milk parlors have evolved. Low lying milking systems were tried, and now the New Zealand approach of high lying systems have been introduced. Benefits have included different milking equipment that is more gentle, thus reducing mastitis problems.

In the area of nutrition, different approaches have been pursued. Alfalfa has gained prominence and has remained a staple because of its high food value. Steevens observed everyone has an opinion about fescue. While complaints are common about the detrimental circulatory problems that arise from eating the natural fungus endophyte common in the grass, others still see fescue as green, edible, and keeps the soil from washing away.

Byproducts from other farming operations have been introduced as feed. Around 1984, Steevens recalled, whole cotton seeds were shown as feed at the Southwest Research Center Field Day near Mt. Vernon. One dairyman declared cows would never eat it, but they do. It was an innovation in the Midwest, tried previously with success in California.

Other innovations have included the round bailer for silage. This enabled growers to beat Missouri weather, which produces rain regularly at the time of the first hay cutting. Steevens also pointed to pasturing with a purpose. Intensified grazing became a management system, changing the life of many dairymen. Crossbred cows added new vigor to herds, and computer technology has allowed individual management of cows, which has been most applicable to confinement dairies.

Steevens was very optimistic that the dairy industry has a place in Missouri, and will continue to hold its own here. "Grass is a natural resource to focus on," he said.

In providing management tips for dairymen, Dr. John Lory, state nutrient management specialist with the University of Missouri in Columbia, talked about good use of manure. He stressed manure was a valuable asset and should be treated accordingly. He urged dairymen to use it as fertilizer, to have their manure tested for its chemical content, and to apply it uniformly for an even result in the grass that will grow.

Some cows have excessive phosphorous in their diet, which can put too much of the chemical back in the fields through manure. Other farms may be deficient in phosphorous and potassium. Soil testing can help find a balance, and good strategies in applying manure to result in better milk from the cows.

Around 70 people attended the dairy conference, double last year's figures. The Monett Chamber served lunch to those attending. Big Baldy's Barbecue catered the meal. Twenty-three vendors had tables sent up in the trade fair for the day.

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