Economics and agriculture in the future

Jay Matteson

I couldn’t find a fortune teller with a crystal ball so I called two people who have a good grasp on what expectations are in the dairy industry for the coming year. They are members of the informal cadre of people I turn to for guidance on what is happening in agriculture. Ron Robbins is an owner of North Harbor Dairy Farm near Sackets Harbor, a 1,000-cow dairy operation. Ron’s family owns Old McDonald’s Farm, an agricultural educational and entertainment destination.  Ron has served on a variety of state, regional and national organizations and was the state executive director of USDA Farm Service Agency for New York for a number of years.

                Bruce Krupke is the executive vice president of Northeast Dairy Foods Association based in Syracuse, serving dairy processors across eight states in the northeastern United States. Bruce also serves on many state regional and national committees. Both Bruce and Ron do a good job of keeping their finger on the pulse of the dairy industry.

                Dairy farmers have been suffering through very difficult times for the past two years.  The price they are paid for their milk, measured in units of one hundred pounds of milk shipped, or hundredweights (cwt), has been well below the cost of production.  The average cost of production in Northern New York tends to run at $18 per hundredweight or one hundred pounds of milk shipped. Prices have dipped as low as $14 per hundredweight over the last two years.  At $14, if the price stayed that low the entire year, a 500-cow dairy with each cow producing an average of 90 pounds of milk per day per cow would lose approximately $657,000 for the year. That is a significant loss.

                Mr. Robbins indicates that it is looking like prices will remain below cost of production until halfway through 2017.  Why? According to Ron there is a tremendous supply of milk and milk products on the market.  Even though demand is strong for dairy products, the low milk prices over the last two years allowed manufacturers to build a tremendous inventory of products that now has to work its way out of the system. Ron indicates that even though U.S. production continues to be “on a tear” with cow numbers increasing and production per cow moving higher, world production is coming down.  That could be very beneficial to U.S. dairy prices paid to the farmer.  Mr. Robbins believes the last six months of 2017 will hopefully see farm gate prices finally cross the profitable threshold.  Unfortunately, it will take many months for farms to recoup the losses they’ve incurred through this low price cycle.

                Bruce Krupke indicates a similar trend, anticipating prices to gradually rise into 2017.  Mr. Krupke heavily emphasized the importance of the world market for U.S. products. “This is where our future lies” Mr. Krupke said.  World dairy prices are rising enough to bring parity with U.S. dairy prices allowing our industry to become competitive. Bruce indicated that we would benefit most if we could achieve a good dairy trade situation with our neighbor to our north. Canada is putting heavy tariffs on ultra-filtered milk products that are hurting two dairy plants in New York, one in Batavia and one in Cayuga County. Bruce indicates concern that the situation will “back up” milk supply in the state.

                I also asked both gentlemen about expectations for the impacts of the Trump administration on agriculture.  Mr. Robbins said right now there is mixed expectations about President Trump.  President Trump’s pro-business tendencies are welcomed in agriculture. The last several years of intense regulatory burden, rapidly increasing cost of business due to federal policies and heavily increasing tax burdens are expected to ease and that will be very welcome. Ron said there is a nervous anticipation within the industry at the same time.  Agriculture, including the dairy industry, is heavily impacted by foreign trade.  There is concern about the unknowns of the new president’s trade policies.  Much work is being done behind the scenes to help the administration better appreciate the importance of trade to agriculture and our farms.

                Bruce Krupke shared a very positive outlook for the business policies of President Trump.  Mr. Krupke indicated he believes that the administration will be very business friendly and that should generate a positive outlook for dairy manufacturers. Bruce hopes that the president will improve our dairy trade opportunities with Canada which will especially benefit New York’s dairy industry.

                Let’s hope that the expectations of both men are correct. Our dairy farmers need a light at the end of the tunnel.  Prices have been too low for too long.   If we can improve the business climate for our farms and manufacturers, the dairy industry can thrive.  Should our business climate improve, perhaps more dairy or food manufacturing opportunities will come along.

Opportunities for NY hemp production

Jay Matteson

Jay Matteson

Last June, the state Legislature passed legislation that allows for the transportation, processing, sale and distribution of hemp grown as part of New York’s research pilot program.

Gov. Andrew M. Cuomo signed the legislation into law, kicking off an opportunity for universities and colleges to partner with farms to establish research trials and businesses to produce industrial hemp. This action became permitted through the 2014 U.S. Farm Bill.

So what exactly is hemp?

According to the website hempbasics.com, hemp is primarily cannabis sativa, a species of the plant cannabis that grows wild throughout all 50 states. Cannabis sativa is grown for industrial use and has no drug properties because of its low THC, delta-9-tetrahydrocannabinol, content. Cannabis indica is the species of cannabis commonly known as marijuana and has enough THC content to produce a psychoactive response.

Hemp was grown by Presidents George Washington and Thomas Jefferson and was a major American crop from 1776 to 1937. The plant is used in the production of fiber, which has antimicrobial properties. The fiber can then be made into twine and cordage, yarn, rope and webbing. It is reported that a single acre of hemp will produce as much fiber as two to three acres of cotton. Hemp fiber is stronger and lasts longer than cotton fiber.

Paper products may also be produced from hemp fiber, from tissue paper to cardboard. It takes two to four acres of trees to produce as much paper as an acre of hemp. Many websites reported that hemp can be used to produce fiberboard that is as strong as wood.

Trees take many years to grow before they can be used for wood or fiber production. Hemp requires 120 days to grow before it is ready to harvest. A substance similar to cement can be made from the silica that is leached from the soil, combined with unslaked lime. This material is waterproof and fireproof.

Hemp seed oil provides essential fatty acids, lanolin and linolenic acids. You can purchase food items such as smoothies and have hemp seed oil added to enhance the nutritional benefit of the smoothie. Hemp oil is also being used in the production of body care products. The protein produced from hemp seed has the potential to produce tofu, veggie burgers and salad oils and can be ground into flour.

Hemp has potential for biomass production. Researchers are looking at hemp for biofuel production as 70 percent of the plant is the “hurd” or woody core of the plant. The oil from hemp may be used in biodiesel production.

With so many good uses of hemp, why is it not grown commercially across the United States?

Because it is difficult to visually distinguish between the different species of cannabis, prohibitions were put in place to prevent the growth of any cannabis species legally. Even though THC levels are extremely low in hemp, there was concern that it might be possible to extract THC from the plant. Canada, Australia, the United Kingdom, the Netherlands and Germany have allowed hemp farming and commercial production.

The Germans use hemp fiber in composite automotive panels. Other countries are looking at hemp derivatives as a replacement for petroleum-based chemicals. Slowly, we are seeing the easing of regulations against growing hemp in the U.S., allowing this historically valuable plant to come into production again.

It appears there is a future for hemp production in the United States. There is reportedly a bill working through the state Legislature to allow full commercialization of hemp production.

The challenge will be to enforce laws that prohibit growing marijuana while allowing growth of hemp.

 

Agri-Business: Farm-based beverage sector grows

Within the past decade, Jefferson County and Northern New York witnessed a refreshing emergence of new businesses making beverages and growing ingredients from agricultural products. Our region is well known for producing large amounts of high-quality milk and turning that milk into award-winning cheeses and cultured dairy products. Our dairy industry will continue to thrive and grow for the foreseeable future. But the emergence of other opportunities in agriculture has invigorated local entrepreneurs not interested in dairy farming. The question is, what can our region support? [Read more…]

Bumper corn harvest expected if farmers avoid killer frost

Corn tassels wave in the wind on Maxon Road near Watertown. Farms could yield 25 tons per acre. Justin Sorensen / Watertown Daily Times

The corn harvest is expected to be abundant for farmers, but some could be scrambling to avoid a late-season killer frost.

Because crops were planted later than usual in May, most farmers in the north country are running about two weeks behind schedule and waiting for corn to finish growing or dry, said Michael E. Hunter, field crops expert for Cornell Cooperative Extension of Jefferson County. Some farmers started harvesting corn last week, he said. Those who didn’t are expected to start before the end of the month.

Because of the threat posed by freezing weather, some farmers might decide to start harvesting corn before it’s fully mature, Mr. Hunter said. On the night of Sept. 18, temperatures in Jefferson and Lewis counties dropped into the range of 27 to 35 degrees. When temperatures drop to 28 degrees or lower, corn and soybeans are in peril.

Some cornfields were unscathed by the frost, Mr. Hunter said. But the outcome was worse for other cornfields, which have drooping cornstalks with dead leaves and low moisture content.

“They can withstand 30 degrees for a few hours,” he said. “But if you get to 28 degrees or below, it doesn’t take long to fully kill” crops.

Cornstalks that appear to be dead can be deceiving, however, because they often retain a lot of moisture after cold spells, Mr. Hunter said. Leaves of the cornstalk are only about 10 to 15 percent of the total weight of harvested silage. That’s why it’s important for farmers to test the moisture of corn to make sure they aren’t chopping it too early, he said.

“We still have a lot of moisture in the corn and ear, and it’s going to be wetter than people thought,” Mr. Hunter said. “You don’t want to harvest wet, because you can lose nutrients.”

Dairy farmer Lyle J. Wood of Cape Vincent said he got a jump-start by harvesting 200 acres of corn last week. Mr. Wood, who co-owns a 1,150-cow operation on County Route 9 with Scott F. Bourcy, said that 2,000 acres of corn and 700 of soybeans planted in the spring weren’t affected by last week’s cold weather. [Read more…]

Annual ‘Day at the Farm’ set Saturday in Chase Mills

People tour the Stauffer Farm in North Lawrence during the annual Day at the Farm in 2011. Melanie Kimbler-Lago / Watertown Daily Times

The eighth annual Day at the Farm event will come to Chase Mills this year, as the fifth-generation McKnight’s River Breeze Farm will play host this weekend.

The activities take place from 10 a.m. to 2 p.m. on Saturday and are free and open to the public.

The Day at the Farm is sponsored by the St. Lawrence County Farm Bureau and is hosted by a different dairy farm each year.

“It is financially supported by the agricultural business and is all done by volunteers from the farming community,” program chairperson Mary Lou McKnight said. “This is our second time here. We did it at this location six years ago as well.”

The farm is operated by Stephen, Mary Lou, Travi, and Natalie McKnight.

The business was recently awarded the New York state Agricultural Society Centennial Farm award. The recognition is for a designated farm that has been in operation for at least 100 years.

“We do guided farm tours that include educational stations, such as animal nutrition and welfare, a milking center presentation, calf raising and care, and we also do nutrient management,” Ms. McKnight said. “Our main objective for the day is to give the public the opportunity to see an operating dairy farm.” [Read more…]

Watertown Farm & Craft Market draws large opening day crowd

People browse Bonnie’s Decorative Painting on the opening day of the Farmer’s Maket on Washington Street Wednesday. Justin Sorensen / NNY Business

People browse Bonnie’s Decorative Painting on the opening day of the Farmer’s Maket on Washington Street Wednesday. Justin Sorensen / NNY Business

Washington Street was filled Wednesday, as the Watertown Farm & Craft Market launched its season in a big way.

Hundreds of people came out for the event, despite lower-than-expected temperatures and steady winds. Linda I. Gibbs, owner of Linda Gibbs Handmade, took the cool in stride, showing off a collection of crocheted scarves, hats and bags in front of City Hall. Her traffic was pretty busy for opening day.

“A lot of people came back,” Ms. Gibbs said. “I love seeing return customers.” [Read more…]

John Gaus’s startup to launch agriculture robots for tilling vegetable crops

John P. Gaus, entrepreneur and founder of Golden Technology Management, Potsdam, recently launched Agbotic Inc. He is pictured at NNY Business magazine’s ‘20 under 40’ luncheon in December at the Hilton Garden Inn in Watertown, where he was the keynote speaker. Watertown Daily Times Files.

John P. Gaus, entrepreneur and founder of Golden Technology Management, Potsdam, recently launched Agbotic Inc. He is pictured at NNY Business magazine’s ‘20 under 40’ luncheon in December at the Hilton Garden Inn in Watertown, where he was the keynote speaker. Watertown Daily Times Files.

Robots that will automatically till soil for vegetable crops are coming to the north country.

Entrepreneur John P. Gaus launched a technology startup in January called Agbotic Inc., which has designed agriculture robots that it plans to test this summer at farms. Agbotic is owned by Golden Technology Management of Potsdam, a firm founded by Mr. Gaus in 2004 that oversees technology ventures and employs graduates of the Clarkson University School of Business.

Mr. Gaus said Agbotic is close to securing nearly $500,000 in investments that will enable it to launch robotic technology this summer. The Development Authority of the North Country also has assisted the firm by applying for a $99,650 grant from the state Department of Agriculture and Markets to buy robotic equipment. [Read more…]

Dairy farmers get crash course on OSHA rules to prepare for random inspections

Ronald L. Williams with the U.S. Department of Labor’s Occupational Safety and Health Administration told farmers Tuesday that the agency will begin conducting inspections at random beginning Oct. 1. Ted Booker / Watertown Daily Times

Ronald L. Williams with the U.S. Department of Labor’s Occupational Safety and Health Administration told farmers Tuesday that the agency will begin conducting inspections at random beginning Oct. 1. Ted Booker / Watertown Daily Times

Dairy farms across upstate New York will be held to tougher enforcement of safety rules by the government, starting next fall.

The Occupational Safety and Health Administration will begin conducting inspections at random when the federal fiscal year starts Oct. 1, Ronald L. Williams told farmers during a presentation Tuesday at the Copenhagen Fire Hall hosted by Cornell Cooperative Extension of Jefferson and Lewis counties.

Mr. Williams, a compliance assistance specialist at OSHA’s Syracuse office, said OSHA has decided to launch a “dairy local emphasis program” in New York to curb the increasing number of farm-related accidents and deaths in the state. About 20 farmers attending the workshop learned about a dozen farm hazards that cause most OSHA violations. For example, all tractors manufactured after October 1976 must be equipped with roll-over protective structures; manure lagoons must be protected with barriers to avoid machinery-related accidents; a sink eyewash station must be situated where corrosive chemicals are used, and warning signs must be posted at areas where employees could be physically harmed.

Farmers peppered Mr. Williams with questions throughout the two-hour workshop, which was followed by an afternoon tour of Milk Street Dairy, Woodville, led by James Carrabba, agricultural safety specialist at the New York Center for Agricultural Medicine and Health.

Anxiety about OSHA inspections is pervasive among farmers, and for a reason: In 2012, inspection officers from the agency’s 24-county Central New York region, which includes the north country, handed out 1,346 violation citations to businesses during 592 inspections. Fines totaled $2.6 million, with the average about $2,500 and the highest about $7,000. The inspections included various businesses, including agriculture, manufacturing and construction. It was unclear how many of the violations pertained to farms.

OSHA officers now inspect dairy farms only when they receive a safety or health-related complaint or referral from an employee, resident or other agency, Mr. Williams said. Starting next fall, the agency will begin conducting inspections at random on dairy farms. OSHA started a similar inspection program in Wisconsin in 2012.

“We’ll come up with a listing of all establishments, and then we’ll randomly choose them for inspections,” Mr. Williams said.

A lively discussion during the meeting centered on what rights OSHA inspectors have during farm visits. Inspections are permitted only on farms that have 11 or more employees, and/or have established a temporary labor camp during the past 12 months. Despite what many believe, OSHA does not have the authority to inspect the living arrangements of farmworkers, Mr. Williams said; those inspections are done by the Department of Labor’s Wage and Hour Division.

Dairy farmer William J. Marks, a managing partner at Marks Farms in Lowville, said he is disconcerted that OSHA inspectors sometimes are accompanied by representatives from advocacy groups when they conduct inspections. One such group he referred to is the Workers’ Center of Central New York, a Syracuse-based organization that advocates for the rights of undocumented immigrant farmworkers.

“There are some advocacy people that OSHA is dealing with, and these groups claim they have the same rights as OSHA,” Mr. Marks said. “But you can tell them to get off your site because they don’t have the authority.

But we don’t know how to handle it, because these advocacy groups come on hard. Is it my job to call the police? Because I think OSHA should be responsible to make sure they’re not there, because they’ve created a liability.”

In response, Mr. Williams said farmers have the right to refuse access to advocacy groups that wish to participate in OSHA inspections. He said OSHA would be responsible for advising such a group to leave if a farmer objects. But he did not know whether the agency could force the group to do so.

Mr. Marks continued, “How do we comply with any of these regulations? I’ve dealt with OSHA people throughout the state, and it’s all up for interpretation.”

Farmers learned Tuesday that, on average, it takes OSHA about six months to resolve an investigation.

Michael R. Burger, owner of Deer Run Dairy in Adams, said his farm already has made some changes to comply with OSHA regulations. It has improved its training program, for instance, to ensure employees know about the farm’s health and safety policies. Though the OSHA guidelines have spurred Mr. Burger to make changes, he said, most large dairy operations already provide a safe working environment without government intervention.

“The problem is that farming is not like operating a factory because we’re busy doing different things all the time,” Mr. Burger said. “Accidents are going to happen, and not necessarily because of work safety issues.”

Farmers can view a webinar on OSHA compliance or download the PowerPoint presentation from Tuesday’s workshop at http://wdt.me/o5UVNf.

-Ted Booker, Watertown Daily Times

Beef farmers planning commingled cattle pool to do business with big buyers

Farmer Donald H. Holman checks some of his cattle in his pasture on Route 178 in Adams. Norm Johnston / Watertown Daily Times

Farmer Donald H. Holman checks some of his cattle in his pasture on Route 178 in Adams. Norm Johnston / Watertown Daily Times

North country beef farmers are preparing to do business with farms across the Midwest next fall by pooling their calves into a commingled herd.

Livestock educators from six counties across the region have offered training over the past three years with that goal in mind, encouraging farmers to adopt cattle similar calf management practices needed to establish the feeder pool, said Betsy F. Hodge, who leads Cornell Cooperative Extension’s Northern New York Regional Livestock Team. To establish a commingled herd marketed to buyers, she said, beef calves all would have to be similarly bred, weaned and vaccinated. They should be preferably crossbred, weigh in the range of 450 to 650 pounds and be bred with black hides.

Creating the feeder pool would enable buyers to purchase a large number of cattle with the same weight, color and health treatment. Those feeder cattle likely would be marketed and sold at the Canandaigua-based Finger Lakes Livestock Exchange, along with local cattle backgrounders and finishers who raise them to be slaughtered. The Finger Lakes sales barn, which hosts auctions twice monthly from September through December, sells calves to farmers who raise them for slaughter.

Beef cattle producers in Jefferson, Lewis and St. Lawrence counties already have considered joining the pool, Ms. Hodge said. Some 80 beef farmers own farmland in Jefferson and Lewis counties; there are about 80 beef farmers in St. Lawrence County alone. Some farmers have begun to raise their calves using practices recommended by educators, she said, who launched the feeder pool initiative in 2012.

“I think we’ve reached a point where they could get a group together, because we’ve worked on this a long time,” said Ms. Hodge, who recently applied for a $7,000 research grant to kick-start the initiative from the Northern New York Agricultural Development Program. That funding will go toward research to determine what management practices farmers are using to raise calves.

“We want to get a handle on how farmers are marketing calves to sell now so that we know where to start,” said Ms. Hodge, a livestock educator at St. Lawrence County’s extension office. “Farmers who haven’t been to our meetings need to get on the same page.”

A few farmers in Jefferson and Lewis counties are interested in contributing cattle to the feeder pool, said Ronald A. Kuck, livestock educator for Jefferson County’s extension.

“We’re trying to recruit a group of like-minded beef farmers to do everything similar,” he said. “That’s going to attract a group of outside buyers that will be willing to make a trip to the north country. They’re willing to pay higher prices for cattle that have been vaccinated, castrated and weaned correctly.”

Those large groups of cattle could net up to 45 cents more per pound on the market than what they’ve garnered individually at auctions, Mr. Kuck said. That difference would equate to sales of about $270 more per head for 600-pound cattle.

The feeder pool initiative is expected to be launched on a small scale, Mr. Kuck said, then grow incrementally in successive years.

“If 10 guys contribute 10 calves, and five guys contribute 20, that would give us a pool of 200 to start out with,” he said.

The biggest buyers at the Canandaigua auction are seeking to buy large quantities of cattle, with 70 to 100 head that are transported in tractor trailers, said Michael J. Baker, beef cattle specialist at Cornell University, Ithaca. Dr. Baker, who helped launch the feeder pool program here, is hopeful enough beef farmers will participate to launch the program in the fall of 2014.

“Even if we don’t get the magic 70-head number to sell that trailer load next fall, we could get three or four farms to put together 50 or 60 calves,” Dr. Baker said. “We could either send them down together to the Finger Lakes sale barn, or we could leave them on the farms and have them described and presented at the sale; maybe even with a video, so that buyers can bid on them without being there at the barn.

“That would remove the stress of shipping them to the sale barn, and then to their ultimate destination. Those loads are going out of state to Kansas, Texas, Missouri and a variety of places, because we just don’t have a large feeding industry in New York.”

Out-of-state buyers are lured to the Canandaigua auction mainly because of the comparatively low prices for preconditioned feeder cattle, Dr. Baker said. Those calves now are sold at a relatively low price at the Finger Lakes Livestock Exchange, according to findings from a three-year study led by Cornell University. Data from the second year of the project, collected on nearly 10,000 cattle head and 3,900 lots, show they were sold at an average of $2.80 per hundredweight; that price is 29 cents per hundredweight less than the national average.

Adams beef farmer Donald H. Holman, who raises Angus cattle to be finished, said he might be interested in selling and buying calves in large numbers by participating in the feeder pool if it’s established. He now buys anywhere from 100 to 150 calves from about eight farmers who live within 50 miles of his farm. Once calves became full-sized adults with a weight of 1,200 to 1,500 pounds, he transports them to an auction barn in Paradise, Pa. He sells about 250 to 300 cattle a year.

If enough beef farmers join, “this pool could be phenomenal because you could go to one place, one time, and pick up 50, 100 or 200 head,” Mr. Holman said. “I now buy almost everything I need from private individuals, but if they join the pool then I’m going to still get those cattle, because I know them.”

The most lucrative market for cattle in the pool, however, likely will be among Midwest buyers, Mr. Holman said.

“The whole point of this pool is to get buyers from the Midwest to come up here because they can buy a potload of cattle,” he said. “They’ll keep coming here as long as they can take them in potloads of about 45,000 pounds.”

-Ted Booker, Watertown Daily Times

Training for OSHA farm visits set Tuesday

Training for farmers to prepare for unexpected visits from the federal Occupational Safety and Health Administration will be from 10 a.m. to 3 p.m. Tuesday at the Copenhagen Fire Hall, 9950 Route 12. The cost is $30 to attend the program, which includes lunch.

The workshop hosted by Cornell Cooperative Extension of Jefferson County will include an afternoon visit to Milk Street Dairy, Woodville, to put the morning workshop into perspective.

To RSVP, contact Arthur Baderman from Jefferson County’s Extension office at 788-8450 or afb2@cornell.edu, or Peggy Murray from Lewis County’s Extension office at 376-5270 or mlm40@cornell.edu.

-Watertown Daily Times