The Florida Dairy Business
(Acrobat version)

Volume 3 Issue 6

June 1998

 

 

 

Milk Prices

Well, it happened. The quick turn around in cheese prices was not quick enough to save the May Basic Formula Price (BFP). Remarkably, even with the $1.13 drop, and a fall of $2.44 over the last three months, the May, 1998 BFP is still $.18 above a year ago - a testament of the strong milk prices this year. The graph at the middle of the page shows these BFP prices.

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Don’t panic. The June BFP will bounce back - strongly. There has been unexpected strength in the cheese markets confounding some analysts, and cheese and butter prices have jumped 30% in late May and early June. Reasons given for this increase include: El Niņo (no joke - lower production in California), record-breaking temperatures in the South, short supply of fresh cheese, growth in cheese demand, processors building inventory, buying frenzies, a short butterfat market, and market manipulation.

 

BFP0698.JPG (18304 bytes)

The May BFP is used to compute July Class I and II milk prices. Thus, the BFP along with co-op Class I premiums largely determine changes in mailbox milk prices from month to month. The July Class I prices and announced premiums are shown in the table at the right. A planned $.30 premium increase for July will take some of the bite out of the $1.13 BFP drop for Florida co-op members. The July announced premium is $.80 higher than that for May.

 

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For May, Florida production was 7% lower than for May a year ago. The very hot weather has Florida about two weeks early in importing milk into the state. According to the USDA, milk supplies are tightening throughout the Southeast, and milk is starting to travel longer distances to supply Florida needs. This will increase over the next few months.

Even with decreasing mailbox milk prices for the DRU, shown in the top graph , the Florida Milk to Feed Price Ratio is not decreasing (see graph below). This is because of the favorable trend in feed prices. A decrease in the ratio would mean it is costing more to feed relative to the value of milk. The BFP has bottomed out for the year, with a strong increase expected for June. Feed prices are not expected to increase - short of unforeseen weather problems in the middle of the country this summer. Strong milk and low feed prices are causing the USDA to revise the forecast for national production upwards.MTF0698.jpg (25036 bytes)

Federal Order reform will likely be delayed 6 months, giving the USDA until April, 1999 to announce its decision on the various reforms. Congress will get until October, 1999 to "oversee" the decision. Read this as legislatively override the decision if Congress doesn’t like it. Federal dairy politics are expected to heat up this summer along with the weather.

 

 

 

 

 

Class I Milk Prices and Net Premiums*

 

May 98

Jun 98

Jul 98

Location

Class I

Premium

Class I

Premium

Class I

Premium

Atlanta

16.89

1.00

16.39

1.30

15.26

1.30

Up. FL

17.81

1.42

17.51

1.92

16.68

2.22

Tampa

18.51

1.82

18.21

2.32

17.38

2.62

Miami

19.21

2.22

18.91

2.72

18.08

3.02

*Announced

 

 

Something to Think
About . . .The Manure
Enterprise in Your Dairy

Environmental issues related to manure put priority on managing manure carefully. It will become essential to maintain records to document how manure nutrients are distributed. Such a focus on manure management goes a long way toward delineating an enterprise within the dairy that we haven’t focused on previously.

Many dairies already consider, and account for, heifer rearing and cropping as separate enterprises. Since there isn’t much choice regarding the need to manage manure, cost accounting for this new enterprise can provide an opportunity to identify potential profits, or at least evaluate low cost alternatives. If least-cost alternatives are identified and manure nutrients must be shipped off-farm, the dairymen may even be able to negotiate sub-contracting manure management to an outside entrepreneur (entremanure?).

You may think manure management is only a sink-hole of expense, but there is enough resource value in manure to warrant evaluation. Most lactating dairy cows are excreting 250 to 350 lb N/year, 40 to 70 lb P, and 90 to 150 lb K. These nutrients have fertilizer value when recovered and utilized. Their value might be estimated in terms of commercial fertilizer.

Let’s assume for the moment that recovered nutrients per cow yearly are 120 lb N, 50 lb actual P, and 100 lb actual K. It is not uncommon to lose 60% of the N to the atmosphere as ammonia or nitrogen gas that is lost before it is applied. Commercial fertilizer values are $.36/lb N, $.32/lb P2O5 ($.73/lb actual P), and $.15/lb K2O ($.18/lb actual K). This converts to a recovered fertilizer value of $97.70, or almost $100/cow yearly. However, often manure is applied to supply all of the N needs of the crops and, thus, the P and K are applied in excess. Therefore, the N value may be the primary value realized, i.e., $43. The large P value ($36.50) and much of the K would be wasted if we are applying manure to soils that have a long history of manure application and have accumulated large reserves of P and K.

Manure has value beyond the value of N, P, and K, for example calcium, trace elements, and organic matter, but those values are more difficult to quantify.

Russ Giesy, with interaction from others of us with interest in managing manure nutrients and forage production, is initiating a study of the capital costs required for manure management on a number of different Florida dairies. This will be a start in evaluating the Manure Management "Enterprise."

-H. H. (Jack) Van Horn

 

 

Dairy and Poultry
Sciences Update

Budget compression in Colleges of Agriculture around the US have forced administrators to develop strategies which will allow us to continue current programs with less support. IFAS shares in that challenge, and has elected not to increase faculty numbers so the resulting salary savings can be used for program support. All vacant positions go into a pool, and only those considered most critical are filled. In the latest competition, a position in basic embryo development was released jointly to Animal and Dairy/Poultry Science Department. The new person will provide the basic science support to our current reproductive physiology group. That will be a real help to our research effort.

On the other side of the coin, Michael DeLorenzo has asked for, and has been granted, a one-year leave of absence. There is no assurance that he will return when the leave is over. Among other things, he has been heading up our business analysis project and was actively involved in milk marketing. In his absence, Marvin Hoekema and Russ Giesy will run the business analysis project. Marvin is completing his Masters degree in the department and has been heavily involved in the project during his degree program. In the future, probably two years from now, we intend to start transitioning the program into a pay-as-you-go service to the dairy industry and possibly expand it to include dairymen in some of the neighboring states.

Russ Giesy will also take responsibility for the educational portion of the program. In the past few years Russ has been actively involved in the data collection for the project.

We recently started milking our herd at the DRU through our new milking parlor. The new parlor is a double twelve, rapid exit with an automatic ID system. We operate with one person in the pit and are able to milk more than 500 cows in about 6 hours. The old parlor gave way to a new freestall barn which will allow us to house the entire herd of more than 600 cows. Consider this an open invitation to come and visit the unit any time you are in the area. You do not need to call ahead, but, if you do, we can be prepared to give you a tour of the facilities.

-Roger P. Natzke

 

 

Heat Stress Causes
Acidosis?

Heat stress is rough on dairy cows. It causes a drop in feed intake at a time when the cows’ energy requirements climb as they try to cool themselves. It also appears that heat stress lessens a cow’s capacity to buffer the acidity in her own rumen. A cow will slug feed, do more sorting of feed, and ruminate less when the temperature rises into the 80’s. All of these factors can make the rumen more acidic.

In addition, as the cow pants to cool herself, the amount of bicarbonate available to buffer the rumen decreases. A study from Missouri showed that, independent of the ration, cows in hot environments (85F) had lower rumen pH than did cows in cool environments (65F) (see figure below). The hotter cows also had more lactic acid in their rumens. The effects of environment on the cow, not on the rumen, caused the differences. So, it appears that heat stress can create or add to acidosis problems in a herd.

Acidosis is already a problem if you see:

Very variable manure in the same feeding group (everything from stiff manure to diarrhea -- cows are varying their own diet as they feel sick or better).

Ground grain coming through in the manure.

"Mucous" in the manure. The "mucous" is either intestinal lining, or a "fibrin cast" produced when the intestine is irritated.

Less than 50% of the cows not eating or sleeping (or panting?) are chewing their cuds.

Coarse particles more than 0.5 inches long in the manure.

Whole cottonseed with the lint still on it in the manure.

Ruminal acidosis is related to many problems: digestive upset, displaced abomasum, laminitis, decreased production, poor fiber and grain digestion, and others. To reduce the chance of cows suffering from ruminal acidosis during heat stress:

Cool the cows! (See Dave Bray.)

Feed enough fiber (about 30% for TMR, 40% for one-shots).

Feed enough effective fiber (long enough so that at least 50% of the cows are chewing their cuds).

Feed more than once per day.

Offer the cows more feed in the evening when they are likely to eat more.

Mix the ration so the cows can’t sort out the fiber from the grain.

Feed sodium bicarbonate at 0.75% of ration dry matter. Raise potassium (1.5%), sodium (0.6%), and magnesium (0.3%) levels, as well.

-Mary Beth Hall

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Mailbox Milk Prices

Location

Mar 97

Mar 98

Dif From Florida

Florida1

Southeast

Mid-Atlantic

New England2

Upper Midwest

Texas

NM - West Texas

15.71

13.97

13.16

13.10

13.22

12.92

12.25

16.43

14.82

14.17

14.02

13.99

13.98

13.00

0

-1.61

-2.26

-2.41

-2.44

-2.45

-3.43

1Three order weighted average

2Includes effect of NE Compact

 

 

 

 

 

 

Florida Dairy Extension

Andy Andreasen - Jackson Co. Wayne Odegaard - Hernando Co.
David Bray - Dairy & Poultry Sci. Travis Seawright - Manatee Co.
Michael DeLorenzo - Dairy & Poultry Sci. David Shannon - Calhoun Co.
Roger Elliott - Escambia Co. David Solger - Washington Co.
Shepard Eubanks - Holmes Co. Mary Sowerby - Multi-county
Russ Giesy - Multi-county Charles Staples - Dairy & Poultry Sci.
Mary Beth Hall - Dairy & Poultry Sci. Robert Tervola - Suwannee Co.
Larry Halsey - Jefferson Co. Paulette Tomlinson - Columbia Co.
Pat Hogue - Highlands Co. James Umphrey - Dairy & Poultry Sci.
Patrick Joyce - Duval Co. Jack Van Horn - Dairy & Poultry Sci.
Elzy Lord - Alachua Co. Chris Vann - Lafayette Co.
Pat Miller - Okeechobee Co. Marvin Weaver - Gilchrist Co.
Roger Natzke - Dairy & Poultry Sci. Dan Webb - Dairy & Poultry Sci.

The Florida Dairy Business newsletter is published on a monthly basis by the University of Florida, Dairy and Poultry Sciences Department as an educational and informational service. Please address any questions, comments or suggestions to Michael DeLorenzo, Editor, The Florida Dairy Business, P O Box 110920, Gainesville, FL 32611-0920. Ph: (352) 392-5594.