Dairy Information: Center Focus Column

Emergency Preparedness: Catching a Falling Sky

By John Frey, Executive Director

We all remember the children’s fable about Chicken Little and her falling sky. In the dairy business and especially on the dairy farm, there is little room for angst or worry over what may happen. Each year in the spring, we plant corn not knowing what the weather pattern will bring, and with every newborn calf, we commit to investing two years before we actually see any return. But having a plan for the “What if’s?” is critical to ensure the viability of your business for the long term.

FreyCurrently milk production in the Northeast and Mideast region is up dramatically from a year ago, with milk production in Federal Order 1 (Northeast) up 2.1 percent for the first quarter of 2015 and production in Federal Order 33 (Mideast) up 18 percent, which is huge. Processors have more milk than they can handle right now, and we are in uncharted waters in terms of balancing and moving milk through the system.

Coupled with that is a change in the utilization of that milk. Over the past 10 years, Class I or fluid milk sales have traditionally accounted for about 45 percent of the utilization in the Northeast. But that dynamic is changing, with Class I sales falling to well below 40 percent in 2014 and 2015. The percentage of milk in the Northeast moving into Class IV, which is sold at a lower price than Class I, is up significantly, causing premiums in the Northeast to erode.

Across the countryside, we have heard reports of producers losing everything from premiums, to their ability to use technology, to their access to the marketplace. In a few situations, entire herds have gone to the market because their owner no longer had a market for their milk. If you’re watching some of what’s going on right now, it might feel a little like the sky is falling.

As we have conversations across the countryside, we have heard that this is a short term situation that cooperatives and processors are working through the best they can, with long-term solutions currently being evaluated at every level. However, the current environment should serve as a reminder to all of us that we can’t take anything granted and we have to continue to evaluate the “What If’s” in all aspects of our business.

Currently, a coalition of dairy organizations in the Middle Atlantic region is meeting to discuss what would happen if a disease outbreak would occur in the dairy industry, similar to what has occurred with Avian Influenza in the poultry industry. Are we as an industry prepared? Are you as an individual farm business prepared?

Foot-and-mouth disease (FMD), sometimes referred to as “hoof and mouth”, is a highly contagious viral disease of cattle and other cloven-hooved animals such as pigs, sheep, and goats. While the most recent outbreak of FMD in the US was a long time ago in 1929, the disease is common in other parts of the world and poses a risk to the U.S. If FMD is diagnosed in the U.S., the movement of cattle and animal products over the road would be restricted. These restrictions, imposed by federal and state animal health officials, would eliminate the milk available to processors from affected farms and neighboring farms until there is a plan in place to control and prevent the spread of FMD.

To prepare for such a situation and be eligible to ship milk in an announced FMD outbreak, this coalition is asking dairy producers to voluntarily choose to have their state veterinarian in the Middle Atlantic Region precertify their farm to participate in the Middle Atlantic Secure Milk Supply plan. If you want to learn more, call (717) 772-2852 or send an email to RA-ahds@state.pa.us.

This discussion and the issue with the current market environment should make all producers consider what would happen if you lost your milk market, either because of an oversupply or biosecurity issue? Do you have the finances to sustain the business in the short term with the lost income? Do you have a strategy in place move the milk?

And, along the marketplace concerns, producers have to consider all of the “What If’s” that could affect their business. If you are in a partnership, what happens if one of the partners become injured, incapacitated or dies? Is there a contingency plan in place? Do both partners have a Will?

What if there is a fire or catostrophic accident that eliminates your milking facilities? How are you going to get the cows milked? Do you have the people and resources identified that you would pull to keep your business functioning through a crisis situation.

While we can’t all sit around and worry about whether the sky is falling, we do have to consider what we would do in cases of the “What If’s.” It’s called emergency preparedness. Corporations and communities across the country are putting a lot of heads around the table to identify what their emergency preparedness plans are for every possible situation. It may be worth spending some time at an upcoming management team meeting for your business to do the same.

That plan could become your life line when you’re sitting on a sinking ship and the one thing that allows you to catch that falling sky. In most cases, there’s too much at risk not to consider what your plan is. To learn more about resources from the Center for Dairy Excellence, call 717-346-0849 or email info@centerfordairyexcellence.org.