Keeping a lid on production costs

Feed and labour costs at the Haanstras' Oxford dairy farm average 14.5 cents per litre of milk sold

By DON STONEMAN

High milk production doesn't mean much if costs are through the roof.

Keeping a lid on production costs is the key to profitability, says Uniondale, northern Oxford county, dairy producer Cees Haanstra. Production from 220 cows at his family's Greiden Farms averages just over 39 litres per cow day. The BCA last year was 265-224-259, with 3.54-per cent fat, and 3.28-per cent protein.

Haanstra credits "a lot of little things" for the high milk production. Homegrown feeds and grains are carefully stored and topped up with a variety of commodities in the TMR mixer. The well-ventilated freestall barn is bedded with wood shavings; cows are bred to proven sires; a herd health plan is administered every 14 days by local veterinarian Rob Bell.

Feed, both home-grown and purchased, costs 11.5 cents per litre of milk sold. Labour costs three cents per litre, down from 3.5 cents per litre a year ago, due to increased production. There are two full-time hired workers as well as a part-time milker.

Cees and Hinni Haanstra, who came to Canada from the Netherlands seven years ago with their four children and two employees, farm 800 acres and custom work 250 acres for another farmer. Of their own land, 550 acres is contained in a single block without a fenceline. They grow 300 acres of alfalfa, harvested both as haylage and small square bales. Another 300 acres produces corn silage and high-moisture corn, while 200 acres is devoted to soybeans.

Some of the soybeans are roasted, while the remainder is sold, reducing the overall feed costs. Cottonseed, soy meal, brewers grain and sugar beet pulp purchased from Miracle Feeds in London are also added to the once-a-day TMR feeding.

There are two reasons for using commodity feeds, Haanstra says. Small amounts of several ration ingredients boost milk production and decrease the fat test. Commodity ingredients also decrease the amount of high-moisture corn in the rations, which he asserts is healthier for cows. He strives to cut corn silage at an average 30-per cent dry matter. The haylage is 45- to 50-per cent dry matter.

Haanstra cuts established alfalfa four times a year, with direct-planted new seeding getting three cuts. They do all their planting, spraying and forage harvesting. A custom operator combines corn.

Haanstra strives to make the best use of harvested feed. The four pit silos are relatively small: 155 x 25 x 8-foot silos for haylage and corn silage. The small pit face allows rapid feeding of silage, eliminating spoilage and loss of dry matter. Brewers grains ferment for at least three weeks in two 70 x 12 x 4-foot bunkers.

The silos are sealed tight with two layers of plastic. The covers are firmly anchored between the pits with sand, then weighted down with old car tires.

Milking cows are fed a once-a-day TMR in two groups. One gets a ration balanced for 35 litres of production, the other for 40 litres. The low group gets more hay in the ration.

Most heifers are fed in the low group, as are all fresh cows for the first two weeks after milking. Haanstra feels that older cows in particular are more persistent in their lactations if they get off to a slower start.

Dry cows are fed in three groups: a dry-off group, a far-off dry cow group and a closeup group ready to calve.

Haanstra makes a point of doing the morning milking, starting the first cow into the double-10 parallel parlour at about 4:30 a.m. It takes a little more than three hours to milk all the cows. A hired milker handles most 8 p.m. milkings and averages two afternoon milkings a week as well. On busy days Hinni drives tractors or helps in the barn.

The Haanstras raise all their own replacements. The cows are all registered purebreds bred to top sires from Canada and the U.S. Haanstra chooses bulls from ABS, Select Sires, Alta Genetics and Gencor. AI is either done in-house or by a Gencor technician.

Haanstra likes his new milking heifers, which are offspring of American bulls from Select Sires, Prescott and Jolt. Another good bull for him has been Luke, now from the Alta Genetics program. Heifers from the Canadian bulls Aeroline and Rudolph come into production this year.

The four-row barn has an insulated roof with side curtains. The 110-inch-long stalls are bedded weekly with fresh sawdust, spread with a tractor-mounted blower. Manure is cleaned out with a scraper system into centre and end drops for transfer to a 110 x 13-foot concrete storage. Manure is spread with a tanker.

Heifers get chopped wheat straw in their diet. Haanstra says the wheat straw adds volume to heifer rations, giving them more body and preventing them from getting fat. They are raised in a freestall on a farm leased from a neighbour.

Under construction now is a building to house calf hutches. Haanstra thinks the pole barn will protect the hutches from blowing snow, while the hutches themselves will keep drafts off the calves.

Haanstra didn't have to think very hard about switching to 3X milking nearly two years ago: His cows told him to.

Milking every 12 hours wasn't enough, he says. With three hours to go until milking time, top producing cows were standing at the gate to the holding area, leaking milk from their bulging udders.

It's a nice problem to have. Milk production averaged 35 to 36 litres per cow per day then. The switch to 3X milking boosted production to just about 40 litres a cow. Right away, Haanstra says, there was an extra 700 litres of milk in the tank per day.

© copyright 1999 Agricultural Publishing Company Limited.


back

Subsidy allegations badger beef

U.S. trade commission expects to rule mid-January on whether Canadian Wheat Board and support programs distort trade

BY DON STONEMAN

Elmwood cattle exporters Wally and Ken Schaus will be watching the news from Washington this week very closely. They and other Ontario exporters have a piece of Canada's $1.3-billion live cattle trade, which hangs in the balance.

A group of U.S. beef producers calling themselves R-CALF has called for trade action against Canada. The U.S. International Trade Commission is expected to rule Jan. 18 on whether U.S. producer complaints have enough validity to proceed with a formal trade action against Canadian live cattle exports. The Americans charge that Canadian government policies and programs subsidize live cattle trade with the U.S. to the tune of 11 per cent of its value.

If the Americans win, Canadian producers such as the Schauses and their feeder suppliers would take a big hit. Schaus Land and Cattle Company feeds as many as 8,500 head of cattle at a time in yards in western Ontario, shipping much of its production to packing plants in Michigan and Illinois. Live cattle trade with the U.S. makes up a substantial amount of Canadian beef industry farm gate receipts, valued at $5.2 billion in 1997.

Every province from Quebec to B.C. has a substantial cattle movement to the U.S. in either fed cattle or cull cows. A decision in the Americans' favour could lead to backed up fed cattle markets across the country.

If "preliminary evidence of injury" is found by the trade commission, the American farmers' case will go to a final determination, perhaps late in the year, says Dennis Laycraft, executive director, Canadian Cattlemen's Association. If Canada prevails at the Jan. 18 hearing, the trade investigation will come to a stop.

Laycraft feels Canada has a strong case in support of its exports, and it will stand up at a final hearing. "We feel confident our injury arguments will hold up, either on the 18th or in a final injury determination. Both cases are certainly winnable from our perspective."

The Americans have charged that Canadian producers get a 10 per cent advantage in feeding cattle because of Canadian Wheat Board policies they claim lower the price of feed grain to feedlots on the Prairies. Laycraft points out that feed grain prices recently have been stronger in Canada than in the U.S., even to the point where grain has been imported from the U.S. That point is in Canada's favour, Laycraft says.

Another Canadian program that is coming under scrutiny is the Net Income Stabilization Account (NISA) program, which Americans charge makes up a one per cent difference between Canada and the U.S.

As well, the R-CALF group has named a slew of other Canadian programs to justify their charges that the industry is subsidized, Laycraft says, but those programs add up to less than half of one per cent of the value of cattle trade. Some of the programs named include feeder association programs in Alberta and Ontario that give producers a break on interest rates because of secured loans from banks. Even Ontario's rabies control program is named as a subsidy.

"They pretty well threw everything they could against the wall trying to see if anything would stick," Laycraft says.

This is the first formal trade action that has been taken against the Canadian beef industry in recent memory, says Laycraft. Recently, there have been four studies looking at the impact of Canadian government programs on beef exports to the U.S. This is the first time that the beef industry has faced a threat this serious, Laycraft says.

Losing a trade battle with Canada's largest meat trading partner would cut deep. American pork producers targeted Canada's pork tripartite stabilization program in the mid-1980s and won. The countervail that resulted crippled Canada's pork industry for much of the next decade. Even when the offending stabilization program was removed, Canadian pork farmers found it difficult to get the countervail removed.

If Canada were found to be subsidizing its industry, trade penalties could be levied in two ways, Laycraft says. A countervailing duty rate, similar to the countervail on pork, might be applied to live cattle exports.

The alternative is that Canada might be charged with dumping product at below the cost of production. Every major exporter would be investigated, and an industry average would be established. Exporters like the Schauses would post a deposit when they shipped cattle across the border. Transactions would be reviewed at the end of the year and if an exporter were determined to be dumping it would lose the deposit. If there were no dumping margins determined, the money would be refunded, Laycraft says.

© copyright 1999 Agricultural Publishing Company Limited.


back

On-farm quality assurance

A number of sheep producers have expressed interest in being part of a pilot program for the Canadian industry

By Richard Charteris

A measure of the regard the Canadian sheep industry holds for Ontario producers, packers and animal health practitioners will soon be weighed out in a national quality assurance (QA) program for the industry, based largely on provincial efforts.

Three years ago, the Ontario Sheep Marketing Agency commissioned what chairman Ralph Stephen calls a "farm gate to processor's cooler" look at the province's sheep industry. The report (now in final draft) and its underlying research and analysis sparked the interest of the Canadian Sheep Federation, which in late 1997 asked OSMA to take the lead in developing a national on-farm QA program.

"We had our own report and program underway," says Stephen, "with a good scientific base in HACCP principles, so CSA asked if we'd act on behalf of the national program, which is being funded 90 per cent by the Canadian Food Inspection Agency. CFIA is taking the view - shared by retailers we've spoken with, too - that each commodity must have quality assurance or that industry simply isn't going to have a market. We want to be ready and proactive, not reactive."

Phase One of the national program was developing a strategy. That took place early December at a meeting on Toronto's airport strip attended by representatives from Alberta, Saskatchewan, Ontario, Quebec, New Brunswick, Nova Scotia and Newfoundland. (B.C. and PEI aren't CSF members, but Stephen has hopes they'll adopt the program nonetheless). "Essentially we went over the Ontario QA audit," says Stephen, "and concluded that our next steps should be developing a good management practices system and pilot program as Phase Two, followed by implementation, then certification and accreditation for quality-assured status." Stephen reckons the process will take two years to roll out.

Good management practices was a logical starting point, says Stephen, because it encompasses so many aspects of the producer's business. "The manual we're using is far out of date - 1972 - and it's something CFIA and all of us agreed on as being the basis for HACCP."

Among the areas and practices to be examined and documented, says Stephen, are feed; water; environment (housing and air); lambing and flock management (reproductive practices); flock health (including medicines); rodent and predation control; transport and handling; shearing and wool and pelt management; dairy sheep management; and emergency facilities. The latter, says Stephen, comes to the table on the heels of last year's ice storm: "We had a number of flocks in larger barns that had ventilation problems when the power went out. Lambs were catching pneumonia, ewes were faltering because of stale air. Having been hit by it already we knew it was too important to not deal with up front."

Veterinarian Tom Sanderson has been hired as the lead consultant on the project, following on similar work he's completed in designing QA programs for the pork and veal industries. While he pleads "a bit of a knowledge gap" in the sheep business, his livestock background is impeccable, beginning with "halter breaking calves on dad's farm when I was six or seven." On graduation from the Ontario Veterinary College, he spent 21 years in large animal practice at Listowel, two more in OMAFRA research at Mount Forest and followed that up with "14 years pushing paper and running the externship program" for University of Guelph's veterinary medicine program before retiring two years ago.

So far, Sanderson likes what he sees. "Though aspects of these QA programs cross over to all livestock, sheep has some real positives in terms of public perception of the business. In many cases you have free-ranging pastured animals and individual freehold-type farm operations" - not a typical picture in pork and veal.

In Ontario, Sanderson will draw on the expertise of Paula Menzies, a small ruminant vet at University of Guelph, to develop a sheep medicine course, certification in which Stephen expects will be a compulsory part of QA accreditation. Dr. Brian Buckrell, a reproduction and sheep AI pioneer, on the sheep production front, and long-time small ruminant vets John Martin and Peter Rich will contribute to the program as well.

Stephen admits that the introduction of any new program "is greeted with a certain amount of trepidation," but says a number of producers have already expressed interest in beingpart of the pilot program. "People are wondering what it will cost for annual accreditation, too, but we don't know precisely yet. I'm guessing in the $150 range."

© copyright 1999 Agricultural Publishing Company Limited.


back