Rick Phillips, policy analyst for Dairy Farmers of Canada, is scratching his head as he looks at dairy policy south of the border.backThe National Milk Producers Federation (the largest producer group in the U.S.), says they are happy with the dairy portion of the U.S. Farm Bill, Phillips says: "I don't know why." In his view, both American producers and consumers will lose as a result of the latest U.S. government efforts to develop dairy policy.
"I observe that U.S. policy is not well developed to ensure that the market will be stable over the next few years," Phillips says. "We will have to see how that develops." Here's what American dairy farmers are getting out the current Farm Bill which will take the country into the next century:
- A souped up Dairy Export Incentive Program;
- The end to a 10-cent-a-hundredweight assessment to fund exports;
- A lower support price;
- Consolidation of marketing orders, in effect reducing the number of milk pools to 14 from 33;
- A "recourse loan" for processors;
- An export body, along the lines of the New Zealand Dairy Board, must be established to move lower-priced product out of the country.Phillips speculates that the NMPF is pleased because the new U.S. farm policy will bolster the Dairy Export Incentive Program (DEIP), making export subsidies available to ship product almost anywhere in the world. He predicts that Americans will push hard to break into markets in southern Asia, including the rapidly developing Philippines, which are now mostly the bailiwick of New Zealand and Australia. The result, Phillips concludes, will be slightly lower world prices. "It could have a modest impact on the world price. That's the main impact we would likely see from it," he says. Canada has some export markets in places such as Libya and Algeria, where it sells product every year which helps retain a market to sell a major surplus if there is one. Phillips doubts that U.S. export policies will have much effect on Canada.
As well, Washington will do away with a 10-cent-a-hundredweight assessment on milk shipments which now takes US$150 million a year out of farmers' pockets. "I guess it gets rid of the assessment and uses the Dairy Export Incentive Program to the fullest," Phillips says. "I think they have given up an awful lot to do that in terms of their long-term ability to maintain reasonable producer returns."
What American dairy farmers are settling for is a lower support price for their milk. Over the next few years, support prices for American dairy producers will fall to US$9.90 from its current $10.50 level. The lower support price will have no immediate effect in the U.S., since all milk is now selling above the current support price. Phillips says farmers no longer have a safety net. If prices do fall through the floor, there is nothing to stop them. Every time support prices fall, Phillips says, it allows for wider swings in dairy pricing. And that benefits neither producers nor consumers. "They have a problem down there if they don't control production and have no mechanisms to export and can't share lower returns."
Some U.S. farmers will likely see lower returns because part of their production must be exported, compared to farmers in other areas who mostly ship fluid milk.
Lower support prices will allow for bigger swings in prices. "It is clear that they don't have a consensus in the States about what the Farm Bill should be," Phillips says.
There is an additional benefit, which accrues only to processors. It's a recourse loan which processors can use to take product off the market and enhance domestic prices temporarily. Trouble is, Phillips says, "you can't store milk."
He asserts that between March 1991 and June 1995 there was higher inflation in the U.S. dairy price index than in Canada, even though U.S. producer prices were falling and Canadian producers were getting more for their product.
Watered milk case remains unresolved
By ROBERT IRWIN
There's been a surprise development in a chain of strange events which have been plaguing a Prescott County bulk milk truck route, located about 75 kilometres east of Ottawa, for the past two years. On April 1, all criminal charges were stayed against Johan Broeckx of Alfred who was accused of adding water to his milk between March and August 1994.Broeckx had also been accused of falsely reporting 16 cows stolen when the milk watering allegations surfaced. Even before this, at least one silo at a Kraft Foods processing plant at Ingleside, near Cornwall, was contaminated with inhibitors from an undetermined source along the route. In an earlier incident, a highly respected farmer on the route escaped being penalized for inhibitors when it was revealed someone was seen around his milk house under suspicious circumstances.
On the same route, in September 1995, a trailer containing 25,000 litres of milk mysteriously contaminated with inhibitors had to be dumped. Although the Dairy Farmers of Ontario (DFO) called police on that occasion, an investigation produced no results.
"I've always maintained my innocence," Johan Broeckx says as he gazes across the backyard of his home to the modern green and white dairy barn he once operated with his father and brothers. Broeckx resigned from 752383 Ontario Inc., the Broeckx family farm, when the then milk board accused him of watering milk.
"I was shipping over quota. Why would I want to put water in the milk?" asks Broeckx who describes himself as "the sacrificial lamb."
The stay of proceedings means Broeckx isn't guilty of any crime. Barring extraordinary developments during the next year, the Crown won't be proceeding with one charge of fraud over $5,000 against Broeckx for allegedly defrauding the milk board in 1994 and another charge of fraud over $5,000 for allegedly filing a false claim of $23,900 against the Western General Mutual Fire Insurance Company of Woodstock, in connection with the reported cattle theft.
Assistant Crown Attorney Ronald Laliberte says the stay of proceedings option has been used increasingly during the past few years, to help cope with an overburdened criminal court system.
Although each criminal case is evaluated on its merits, crimes against property like theft and fraud are lower priorities than violent offenses. "To have prosecuted Broeckx to the fullest extent of the law would have meant a few weeks of trial time. While prosecuting Broeckx, I was prosecuting a father who sexually assaulted his three daughters," says Laliberte.
Neighbours and area dairymen had hoped a trial would shed some light on area milk transport. DFO Director of Marketing and Production Peter Gould admits there were inhibitor problems on the route, which couldn't be traced to any producer. But he says that's not unusual.
"It happens maybe once a year across the province. It's fair to say, though we had concerns about milk being marketed from the area."
The then milk board had already cancelled 6,761 kg of quota valued at approximately $225,000 from Broeckx Farm before the criminal charges were laid. Broeckx estimates that's about one-third of the family's total quota holdings. It meant they had to sell about one-third of the farm to maintain cash flow. He claims the board used a single sample from his tank, showing 80 per cent water, to calculate the quota cancellation.
It would have been impossible for water levels to be so high, for months on end, as the board has claimed, says Broeckx. "A driver's got to be either blind or stupid not to see water levels that high and if there's any doubt he's not supposed to pick it up."
Broeckx says the driver on his route failed to agitate milk according to regulations. "We've timed him a few times. He didn't agitate for two minutes most times. It's supposed to be five minutes."
Gould won't confirm the 80-per-cent level but says, "I would like to think that if there was that much added water it should have come to our attention sooner than it did." The board eventually confronted Broeckx a few days after it was notified of problems by Villeneuve Milk Transport Company. As a goodwill gesture, the board compensated Kraft for added water and paid for two silos which tested positive for inhibitors.
Gould won't reveal the amount paid. A reliable DFO source estimates total disposal and compensation costs for just the two silos at about $160,000.
Following the silo incidents, a pilot project to screen milk before entering the plant, previously under discussion by the board, was implemented at Kraft.
The voluntary procedure was extended to most other plants across the province in August 1995. Since then the DFO has stopped accepting responsibility for milk which has entered the plant.
"The board acted upon the accused harshly," explains local Ontario Provincial Police case manager Jim Horner.
He says the large quota penalty which effectively deprived Broeckx of his livelihood was more severe than what the criminal system would normally mete out to someone accused of a similar crime, who like Broeckx had no previous conviction. Johan Broeckx's father and brother, who continue to operate the Broeckx family farm, have signed an undertaking not to pursue any claim against the insurance company in return for the Crown granting a stay in Johan's case. Western General President Bruce Wallace says that's good enough for him. "This makes efficient use of court resources."
Johan Broeckx, who wasn't required to give any undertakings himself, says his father and brother's insurance claim period had expired March 30, 1996 anyway, so they weren't sacrificing anything by their agreement with the Crown.
Laliberte describes the quota loss as a deterrent to others. He terms it "the cornerstone of my decision."
"They were already judged by the milk marketing board system which is probably better equipped than the criminal system. They paid the price. We want to send out a message that you just don't do that."
Broeckx withdrew his appeal of the milk board's quota cancellation soon after he was charged criminally. Like the insurance time limit, the appeal period for the quota suspension has now also elapsed.
"The day our appeal was to be heard I was to appear in court for my first appearance. In my opinion they used the criminal system to squash the appeal," Broeckx says.
Broeckx could sue the DFO for losses he and his family have suffered. "Unfortunately, they did a good job of killing our livelihood and lawyers don't work for nothing," he says. In addition to the cancelled quota, he lost an off-farm job with a nearby farm supply dealer, which he held from the time he resigned from Broeckx Farm.
The Broeckx family has been permanently torn apart by events. Johan sees that as his biggest loss.
His wife, father and one brother stuck by him. "I'll be eternally grateful for that," Johan relates. He says others in the family turned their backs when the milk board descended and none of his in-laws now speaks to him.
Corn silage still rules for Alfalfa King
By DON STONEMAN
Tom Core occasionally sports a T-shirt that says Alfalfa King, a gag Christmas gift from family members. But 1995's Ontario Forage Master admits that there's a reasonably new corn silo standing beside the towers devoted to haylage on his dairy farm east of Sarnia.The reason? Core, the winner of last year's Ontario Soil and Crop Improvement Association forage growing contest, says corn-silage-fed cows keep their condition better during lactation, and herd health in general has improved. Furthermore, adding corn silage to the ration spreads out the workload.
Feeding a high-alfalfa ration meant pushing hard to get 115 acres off in sometimes tricky weather. A mere 80 acres, with corn silage coming off in September, is more manageable. But cutting back on alfalfa acres is only one change on the Core farm, which is run jointly with brothers Ron and John, chairman of Dairy Farmers of Ontario.
The Cores milk 66 cows in tiestalls, the same number as in 1981. They started feeding a total mixed ration in 1979, long before most farmers, and also feed high-moisture corn from a silo. "When we win this GATT panel, the goal will be to produce as much milk as we can and keep a healthy herd and feed economically," Tom Core says.
Of 500 acres that are cropped, 200 are devoted to the cows, and Core is constantly fine-tuning the field cropping. The crop rotation is corn, soybeans, wheat, with alfalfa being put on all but the most distant farm sometime in the rotation. Core gets his alfalfa to persist longer than most growers. One field is now going into its sixth year in alfalfa. After the first cut is harvested this spring it will likely be plowed down and planted to soybeans. Another alfalfa field will yield its fifth crop this year.
A new field planted this spring will use oats as a cover crop for a new alfalfa stand. "We've tried it a number of ways," Core says. He is opting for a cover crop in the hope that oats will provide competition for weeds and reduce the amount of chemical sprays used.
Previously, he had abandoned oats because oatlage didn't fit into the feeding program. Plans are now to custom round-bale the oats and sell the crop to a beef farmer.
"I think the oats give the alfalfa a little micro-climate that help the alfalfa survive some of the elements," in particular the wind, he says. The oats also prevent soil from drying off and hindering consistent germination.
He plants 16 pounds of alfalfa and timothy seed mix per acre and puts a bushel of oats on as a cover crop. Timothy is about 15 per cent of the forage seed mix.
The field has been fall plowed and will be spring cultivated. Core runs a cultipacker over top to firm up the seedbed and make sure the alfalfa seed has good contact with the soil. He plants with a conventional seed drill with presswheels and drops the seed behind the double disc opener. The wheels push seed a maximum of one-quarter inch into the ground.
Core tried direct seeding alfalfa into fall planted winter wheat a year ago, but wet weather last summer prevented speedy removal of the straw and it killed the alfalfa. "We ended up plowing that experiment down."
He planted into the frozen wheat field about March 24 with the same conventional seed drill. Core says other farmers spray alfalfa seed on with their urea in the spring.
Either way, the technique is risky. There is no crop insurance available for it. This summer he may summer-seed a wheat field after fall harvest. "I have done that a couple of times and it worked."
Core has backed down to three cuts of alfalfa a growing season from four. He found that with four cuts, the alfalfa was too high in protein and too low in acid detergent fibre (ADF) and neutral detergent fibre (NDF).
He delays the harvest of the first cut by a week, and leaves five to seven days extra between each cut. The third cut is now finished by the third week of August, whereas he used to take off the fourth cut in the first week of September, very close to the critical fall harvest date in that part of the province.
Core strives for 20-per-cent protein, 30-per-cent ADF and 40-per-cent NDF in his haylage. "Twenty-three-per-cent haylage is hard to balance in a dairy ration," Core says. Nutritionists would rather see 20 per cent.
Core cuts with a 17-foot haybine and tries to ensile at 65-per-cent moisture.
He takes six of the 12 knives off the harvester to get a one-inch theoretical cut on the haylage, and some stems are up to five inches long. When harvesting second and third cuts, he adds water from a 100-gallon tank mounted on the harvester to keep the haylage moving smoothly through the auger and the blower. At 57-per-cent moisture, there is a tendency for haylage to bung in the cutter. "It makes a big difference to field problems," and keeps the harvester clean, he says.
The tank on the harvester adds water through two nozzles, about 10 gallons a load. There is a 2,000-gallon tank sitting on the truck at the edge of the field and filling the tank on the New Idea 680 harvester takes only a few minutes, a lot less time than unclogging the harvester.
Haylage is stored in two open-top 20 x 80-foot silos that are dedicated to the forage crop. There is also a 20 x 80 tower for corn silage and a 16 x 70 for high-moisture corn.
Core also bales about 1,000 bales of dry hay a year. The last couple of years, most was sold off the fields to a neighbour. His normal fertilizer pattern is a split application of 400 pounds of 0-11-44, half after each of the first two cuts. This year he will likely spread 100 to 200 pounds after the second cut only, to provide nutrients for the fall when alfalfa builds up root stores for the winter.
Cow manure generally goes onto wheat fields in the summer after harvest. The Core operation had enough manure storage for a year, so they aren't pushed to make applications onto wet fields.
Core has never spread solid manure onto an alfalfa field. Occasionally, liquid manure has gone onto alfalfa "but we don't make it a standard practice.
"Maybe it is the cash cropper in me. I think of alfalfa as a row crop. You don't drive across row crops.
"I'd just as soon be putting [manure] onto a field where the crop has already been taken off."
He is keenly aware of the current concern with high potassium levels in dry-cow rations and he plans to do more soil testing of alfalfa fields now.
"Cows that don't eat aggressively-we've had some concerns around that recently.
"We wonder if we can attribute that to high potassium levels in alfalfa."