Dairy
February
1999
ANNUAL MEETING OF MISSISSIPPI DHIA AND AMERICAN DAIRY
ASSOCIATION OF MISSISSIPPI
The 1999 annual meeting of American Dairy Association of Mississippi and the Mississippi DHIA will again be held jointly. The meeting will begin at 10:00 a.m. in the Farm Bureau Federation Building in Jackson, on February 15, 1999. The business sessions of both organizations will be held first followed by the DHIA awards recognition. Awards will be presented to the Master Dairymen listed below along with some of our outstanding DHIA Supervisors. We will also be recognizing one extension agent who has made significant contributions during 1998 to the DHIA program in Mississippi. Lunch will be served after the awards program.
The dairymen listed below are the top 20% of the producers in Mississippi on DHIA. They are ranked according to energy corrected milk (ECM) based on ROLLING HERD AVERAGE AS OF OCTOBER 1, 1998. ECM calculation takes into account pounds of milk, fat, and protein. Congratulations to these dairymen for their accomplishments!
1998
MASTER DAIRYMEN Dairyman County No.
Cows Lbs
Milk Lbs.
Fat Lbs.
Protein Lbs.
ECM Mississippi
State University Oktibbeha 163 21216 902 688 23330 Coastal
Plain Exp. St. Newton 173 22066 818 735 22857 Melvin
Nixholson Newton 122 21607 838 689 22641 Brad
Bean Amite 231 21828 821 695 22536 Dixie
Dairy Sales Carroll 539 21479 831 691 22523 Steward
Farm, Inc. Tate 370 22011 749 703 21726 J
& L Dairy Walthall 195 21616 756 698 21653 Milton
& Terry Jeffcoat Jones 229 21964 742 693 21550 Jeffcoat
& Williams Dairy Jones 61 20729 705 666 20484 David
Robinson & Sons Rankin 129 18512 770 578 19980 Knights
Dairy Farm Jones 139 19947 694 642 19919 N.
Miss. Br. Exp. Sta. Marshall 95 19107 702 623 19616 Thompson
Brothers Marshall 143 19368 692 625 19586 Cal
Maine Foods Dairy Hinds 1668 19169 702 615 19580 Speaks
& Son Walthall 374 18241 728 602 19521 Rowzee
Jersey Farm Newton 142 16344 753 633 19445 A.
L. Boyd, Jr. Walthall 81 20666 626 656 19377 Clemmer
& Hill Dairy Tippah 151 20098 646 638 19323 Ray
Gallop & Sons Monroe 67 19121 652 625 18991 G
& B Dairy Lincoln 67 17168 687 622 18786 Freeman
Dairy Pike 146 18849 617 617 18397
Dr. Alan Rathwell, Assoc. Professor
Dr. Charles Estill, Assoc. Professor
College of Veterinary Medicine, MSU
Historically, we have used lactation curves to show how cows in a herd performed. They also give us some clues as to what may be occurring in the management of the herd. The stage of lactation profile on the DHIA summary sheet also contains this information. This article will deal mainly with some of the rules that we use when we look at fat and protein data.
Milk production in a herd can be acceptable, but the fat and protein levels can suggest that there may be potential problems either reproductively or health-wise in a herd. Typically, fat test on first test date (1 through 40 days) starts around 3.9 to 4% and drops to 3.5% at peak. Peak lactation occurs between day 41 and day 100. Fat test at this time remains constant and then gradually rises to about 4% at the end of lactation. Protein typically starts at about 3.2 to 3.3% and drops to 3.1% at peak. Like fat, protein remains constant between days 40 to 100. Protein at any stage of lactation gradually rises to 3.3 to 3.4% at the end of lactation. Protein values below 3% are considered abnormal. Protein content of milk is usually 80 to 85% of milk fat in Holstein cows.
If a herd suffers from low fat test, this can be due to a number of factors. Low forage or low effective fiber intake will depress fat test. This is typically seen with ensiled forages with small particle size. An excessive number of very thin cows in the herd can also depress milk fat test.
Rations that are low in energy have a tendency to depress milk protein. Low energy intakes are seen in feeding programs that have low concentrations of energy or depressed DMI. Rations with low digestibility can also contribute to low energy intakes.
In general, nutritional factors tend to have opposite effects on milk, fat and protein. For example, concentrate added to a ration increased energy intake which results in increased milk protein and decreased milk fat. Finely chopping the forages will also increase energy intake and most likely increase milk protein but will cause a decrease in milk fat. However, too much concentrate and too finely chopped forage will also depress dry matter intake. This will decrease total energy intake causing low protein and fat test as well as poor milk production.
Milk fat percentages lower than protein percentage is called protein fat inversion. Most cases are caused by grossly over-feeding concentrate, but can also be caused by forages that are too finely chopped. We also see this condition in total mixed rations where the mixing is prolonged. The mix wagon then decreases the effective fiber in the ration. Protein-fat inversions at the end of lactation (> 250 DIM) often indicate that animals are being over-fed concentrate (high in protein, low in fiber). Fiber energy should be maximized to allow animals to gain weight at the end of lactation. An abnormal increase in milk protein percentage in late lactation (> 200 DIM) may indicate excess protein intake or a high incidence of sub-clinical mastitis.
If milk protein is in excess of 3.4% in Holsteins in early lactation (50 ñ 80 DIM), this may indicate a deficiency of ration fermentable energy or an excess of rumen degradable protein in the diet. These types of herds have a tendency to suffer reproductive problems.
Other factors that can affect percent of milk protein are the types and quantities of proteins that are fed. A deficiency of degradable and non-degradable proteins can reduce milk protein percent.
When a dairyman examines the stage of lactation profile and observes the percent fat and percent protein, the numbers will only suggest that problems exist. It takes analyses of not only the ration that is on paper but the analyses of how this ration is being fed to the cows in order to determine where the problem lies. However, by examining the stage of lactation profile every month, the data will tell you if the current feeding program is meeting requirements.
DECEMBER
HONOR ROLL HERDS* Dairy County No.
Cows Lbs
ECM** 2X/3X RHA
Milk RHA
Fat RHA
Prot DOT MACTOC
FARM OKTIBBEHA 198 71.3 2X 25695 932 843 12/10/98 MELVIN
NICHOLSON NEWTON 127 69.0 2X 22047 832 700 12/21/98 NORTH
MISS BR EXP STATION MARSHALL 92 68.3 2X 19798 724 650 12/10/98 JEFCOAT
& WILLIAMS DAIRY JONES 62 67.6 2X 20190 691 637 12/16/98 JODY
DEBLANC PIKE 27 67.5 2X 0 0 0 12/16/98 STEWARD
FARM INC TATE 405 65.6 2X 22016 760 702 12/13/98 COASTAL
PLAIN EXP STA NEWTON 188 65.0 2X 21297 7930 693 12/08/98 TURNIPSEED
DAIRY MONROE 454 63.2 2X 17822 653 563 12/20/98 RAY
GURNEY AMITE 244 60.5 2X 18141 657 600 12/21/98 THOMPSON
BROTHERS MARSHALL 138 59.4 2X 19564 699 631 12/14/98 MILTON
AND TERRY JEFCOAT JONES 226 59.1 2X 21761 742 685 12/21/98 FREEMAN
DAIRY PIKE 146 58.1 2X 19226 633 637 12/10/98 TURNIPSEED
DAIRY MONROE 446 57.9 2X 17519 645 555 11/30/98 A
L BOYD JR WALTHALL 79 56.4 2X 20490 611 647 12/08/98 PAUL
W EDWARDS NEWTON 131 56.4 2X 17847 638 582 12/20/98 ABE
MILLS SCOTT 260 55.0 2X 15393 587 502 11/27/98 JERRY
CORKERN LEAKE 100 53.8 2X 14197 507 491 12/05/98 MS.STATE
UNIVERSITY OKTIBBEHA 173 53.7 2X 21176 909 688 12/14/98 ROWZEE
JERSEY FARM NEWTON 149 53.6 2X 16202 736 624 12/14/98 KNIGHTS
DAIRY FARM JONES 140 53.3 2X 19802 677 640 12/02/98 JAY
PAUL HOOVER NOXUBEE 151 52.9 2X 17510 0 0 12/19/98 ELWAYNE
MAST NOXUBEE 157 52.4 2X 17421 0 0 12/17/98 SPEAKS
& SON WALTHALL 365 52.3 2X 17977 711 591 12/02/98 ABE
MILLS SCOTT 259 52.3 2X 15546 591 507 12/19/98 FLOWERS
DAIRY JONES 76 52.1 2X 15786 553 522 12/14/98 JERRY
SISCO LINCOLN 126 51.8 2X 15215 569 509 12/21/98 DAVID
CAIRE WALTHALL 77 51.2 2X 17405 595 542 12/09/98 SUMMERS
DAIRY MARION 607 51.0 2X 18502 679 582 11/30/98 GRAHAM
DAIRY PONTOTOC 109 50.1 2X 18066 543 576 11/30/98 RAY
GALLOP AND SONS MONROE 68 49.8 2X 18280 626 599 12/21/98 *
Top 30 herds enrolled on supervised DHIA testing
programs by test day energy corrected milk.
** ECM = (.3246 x test day milk) + (12.86 x test
day lbs fat) + (7.04 x test day lbs protein)
UPCOMING
EVENTS Mississippi
Jr. Dairy Round-Up Show February
6 Southern
Dairy Conference ñ Atlanta, GA February
8-9 Southern
Dairy Conference ñ Atlanta, GA February
15 Extension
and Research Advisory Meeting February
23 Artificial
Insemination School, March
29-31
Farm Bureau Federation Building ñ Jackson,
MS
Raymond, MS
Mississippi State University
Dr. C.W. "Bill" Herndon
Dairy Economist, MSU
BFP Sets Another Record High, but Cheese Prices Crash
The December Basic Formula Price, or BFP, continued to react to extraordinary strength in cheese prices during the last six months of 1998 and established another -- for the third month in a row -- all-time record high price of $17.34 per hundredweight (cwt). This month's increase of 50 cents per cwt. indicates that the BFP has gone up for the seventh straight month and has risen a total of $6.46 (+59.4%) since the June 1998 BFP of $10.88 was reported by the USDA. Milk production increased sharply during the last quarter of 1998 with national output increasing 2.4% for the last three months of 1998 compared to the same period of 1997.
As expected, three factors have caused this response in milk output: (1) record high milk prices; (2) moderate feed prices/costs; and, (3) improved availability of quality forages. Dairy product prices have begun their anticipated decline as more and more milk has been made available for processing into cheeses, butter, and milk powders. Demand for manufactured products began to ebb with the end of the Christmas and New Year holidays but remained strong until the playing of the Super Bowl. Historically, consumption of U.S. dairy products is usually at their annual and seasonal low points in March April and May. Unfortunately, these are the exact same months of the "spring flush" when milk production is at the seasonal peak and prices usually plummet as excess milk supplies drag down the market.
Florida handlers exported about 50-60 loads per week to processing facilities around Christmas and New Year's and after most Southeast balancing plants ran at full capacities while schools were on holiday recesses. But, milk has been reported in "good balance" in January and Florida handlers have not imported milk other than from "usual" sources. Cheese prices have suffered a free fall in January and have plunged more than 50 cents a pound during the first weeks of 1999 (see details below). Obviously, dairy producers need get ready for an anticipated sharp decline in milk prices during 1999. The November BFP was reported at $17.34 per cwt. which represents an INCREASE of $0.50 cwt. (up 3.0%) ABOVE the November BFP of $16.84. December 1998's BFP is $4.55 per cwt. (or 34.2%) HIGHER than the December 1997 BFP price of $13.29. Dairy producers need to remember that the December BFP will be used as the base price to calculate the February 1999 Class I and Class II milk prices and the December 1998 Class III milk price. Because about 80 percent of Mississippi milk is utilized as Class I and Class II products, farmers will not notice the majority of this 50 cent increase in the December BFP until they receive their March 1999 checks as payment for milk sold in February.
The most important and anticipated (but dreaded) market news in the dairy industry has been the plummeting of dairy product prices witnessed in the first weeks of January 1999. Most market analysts have been predicting that cheese and butter prices would decline sharply from the record highs recorded during 1998 because milk production was expected to respond to milk prices and overpower the continued strength in dairy product demand. Simply stated, this plunge in cheese prices has been in reaction to increasing milk supplies reported in most regions of the country. January 6 saw the first significant decline in cheese prices on the Chicago Mercantile Exchange (CME) when block prices fell 20.25 cents and barrel prices dropped by 19 cents per pound. So for, 40# block prices have fallen a total of 65 cents while barrel prices have dropped 57.25 cents (-31.8%) during January. Block cheese prices were reported at an all-time record high of $1.9000 as recently as January 4 versus $1.2500 on January 20 -- a 65 cent (or -34.2%) decrease over this two-week period. Barrel prices displayed this same pattern but narrowed the price gap between blocks and barrels -- and reduced the price difference between these products (which is usually 2 to 4 cents) -- and fell by 57.25 cents (or -31.8%) from $1.8150 to $1.2250 between December 18 and January 20. The butter market has not experienced a similar decline in January because butter prices plunged sharply in November, then recovered in December and have comparatively stable in 1999. On the CME, Grade AA butter prices have decreased four cents per pound (-2.7%) between December 18 ($1.4700) and January 19 ($1.4300) and the market tone has been described as "mixed" with processors building inventories with the available surplus milk supplies. Nonfat dry milk (NDM) prices have also exhibited a similar price decline as the cheddar cheese market, while the USDA has halted its recent practice of selling back CCC stocks into the cash market. The market tone has been "weak"and Grade A NDM prices on the CME fell from $1.1525 on December 20 to $1.0700 on January 19, or declining 8.25 cents per pound (-7.2%), but has remained well above the price support level.
Milk production has reacted to the improved profitability conditions as dairy farmers aggressively responded to record high milk prices, affordable feed costs, and improving forage quality and availability. National milk output was reported by the USDA to have increased substantially during the last quarter of 1998 (+2.4%) and was up 0.8% (+1,281 million lbs.) for the 12 months of 1998 -- compared to the same data for 1997. In the 20 reporting states, December 1998 production increased 3.0% (330 million lbs.) above the output level for the same month of 1997. Comparing the final quarters of 1998 and 1997, state-level statistics indicate that of the 14 U.S. states suffering a decline in milk output -- 10 were located in the Southeast. Ten of the 11 Southeastern states experienced decreased production (Arkansas was the only state reporting increased milk output) and these states of the Southeast produced 535 million lbs. less in 1998 ( a total of 12,786 million lbs.). Milk production in Mississippi declined 7.7% (11 million lbs.) when comparing the last three months of 1997 versus 1998 and annual output decreased 8.4% (53 million lbs.) -- down from 634 to 581 million lbs. in 1997 and 1998, respectively. Mississippi dairy farmers milked 3,000 fewer cows in the last quarter of 1998 (41,000 cows) versus 1997 (44,000 cows) and, on average, milk output per cow declined from 14,409 lbs in 1997 to 14,170 lbs in 1998. The states reporting the largest incremental increases during the final quarter of 1998 were located all across the U.S. and, specifically, were Arkansas (+11.8%), Nebraska (+11.1%), Idaho (+10.3%), North and South Dakotas (+8.2%), New Mexico (+8.1%) and Arizona (+6.6%). Again, these data indicate that Southeastern consumers are becoming more and more dependent on imported milk supplies because these reproducers are being forced out of the dairy business because of high production costs and inadequate revenues generated from milk sales.
The past several months has been a period when the U.S. dairy industry had been "holding its breath" in expectations of plummeting dairy product prices. That period is over and now dairy farmers are "gasping for breath" as cheese prices plunge with the spring flush increasing milk supplies and an ebbing of the seasonal demand for dairy products. The steep price "crash" predicted by market analyst has begun for cheddar cheese which is usually followed by corresponding decline in the BFP. Using the usual rule of thumb that indicates that a one cent change in cheese prices will cause a 10-cent change in the BFP, the 60+ cent decline in cheese price recorded in early January is expected to cause a $6.00+ plunge in farm level milk prices. So, this procedure would forecast that a severe plunge in the BFP and this price series is expected to fall to a low of $11.50 per cwt. over the next several months.
While dairy farmers can now enjoy the record high milk prices, this period will soon be over and by April or May milk producers will again be struggling to manage very volatile and wide swings in the amount of revenues derived in their monthly milk checks. The most pessimistic milk price forecasts forecast that 1999 will be "bleak" compared to the last six months of 1998 and the BFP probably will fall below $12.00 but not below $11.00 as it did in 1997 and 1998. Bottom line, dairy farmers should be making plans to endure much lower milk prices and revenues during 1999.
CCC Lowers Milk Price Supports for 1999
The 1996 Farm Bill mandated that the USDA gradually reduce milk price supports through a lowering of dairy product support prices over a four-year period from 1996 to 1999 and culminating with a complete elimination of all dairy price supports scheduled for January 1, 2000. Accordingly, the CCC decreased the support price for milk by 15 cents to $9.80 per cwt. for 3.5% butterfat milk and this price will be effective during 1999. Because the CCC provides this level of milk price support through the purchase of manufactured dairy products, this price reduction translates into a lowering of government buying prices for cheese, butter and milk powder. This scaled down support level means that the CCC will reduce the prices paid for cheese, butter, and nonfat dry milk as follows: (1) the suport price for cheddar cheese was decreased by 1.5 cents per lb. and was set at $1.10 for 40# blocks and $1.07 for 500# barrels; (2) nonfat dry milk support price fell 1.8 cents per lb. and was established at $1.01 for non fortified nonfat dry milk; and, (3) the butter support price remains unchanged at 65 cent per lb. for Grade A butter. During 1998, the CCC purchased no cheese and no butter products but did buy 113.5 million pounds of nonfat dry milk -- most of these amounts were purchased during late spring and summer.
While the current market prices for these three dairy products are above these support levels, the free fall of dairy prices during January certainly creates a market environment that threatens these support levels. Cheddar cheese prices are within 15 cents of their support levels and nonfat dry milk is within six cents of its support price. Because cash market dairy products prices have been above support levels for several years, the CCC has not been forced to purchase large quantities to increase milk prices. However, 1999 may prove to be much different with the record high prices recorded in 1998 inducing a flood of milk that is expected to burden the market and could drive dairy prices below their support levels. Weather conditions affecting milk output will again be the most important factor influencing milk price and, ultimately, CCC dairy product purchases.
Southeast F.O. #7 "Blend" Price Increases to $18.70 in December.
The Southeast Federal Order Milk Market Administrator reported the December 1998 "blend" or uniform prices for milk delivered in Federal Order (FO) #7 at $18.70 per cwt. (for 3.5% Butterfat milk) in Zone 7, see the Mississippi map for zones (Zone 5 minus $0.25, Zone 6 minus $0.10, Zone 8 plus $0.10, Zone 9 plus $0.20, Zone 10 plus $0.32, Zone 11 plus $0.50, and Zone 12 plus $0.57 per cwt.). The December "blend" price of $18.70 for Zone 7 of FO #7 represents an INCREASE of 78 cents per cwt. compared to the November uniform price of $17.92. The December 1998 blend price is $3.27 (or +21.2%) ABOVE the December 1997 blend price of $15.43. This 78-cent increase in the December blend price occurred because of significant increases in all three classes of milk while the Class I utilization rate declined by 0.5%. The rise in the December blend price is attributed to a 94-cent increase in both the Class I and Class II milk prices and a 50-cent rise in the Class III price. Class I utilization fell 0.5% (from 81.5% in November to 81.0% in December), while Class II utilization went up by 0.5% (from 7.7% in November to 8.2% in December) and Class III utilization remained unchanged (at 10.8% for November and December ). The December Zone 7 "blend" price was calculated using: (1) the October BFP price of $16.04 plus the $3.08 Zone 7 Class I differential for a Class I price of $19.12; (2) the October BFP price of $16.04 plus the 30 cents per cwt. Class II differential for a Class II price of $16.34; and, (3) the December Class III price of $17.34 (which is the BFP). Please consult the map in this newsletter to determine which Zone the plant you sell your milk to is located in FO #7. A dairy producer's uniform price and the amount of his milk check is affected by where the plant that processes his milk is located in the Southeast FO.
UNIFORM
or "BLEND" PRICE FOR DECEMBER 1998 ZONE
5: $18.45 ZONE
9: $18.90 ZONE
6: $18.60 ZONE
10: $19.02 ZONE
7: $18.70 ZONE
11: $19.20 ZONE
8: $18.80
CLASS
I PRICE FOR FEBRUARY 1999 (using the December 1998
BFP) ZONE
5: $20.17 ZONE
9: $20.62 ZONE
6: $20.32 ZONE
10: $20.74 ZONE
7: $20.42 ZONE
11: $20.92 ZONE
8: $20.52
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Last Modified: Wednesday, 18-Feb-04 11:05:54
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