Buying local not all good for dairy supply chainBuying local not all good for dairy supply chain
December 10, 2015
BUYING local might be appealing for individual local restaurants and businesses, but research conducted by Chuck Nicholson at the Pennsylvania State University Smeal College of Business revealed surprising effects on supply chains for fluid milk products in the Northeast if there are large increases in local purchases.
Nicholson, a clinical associate professor of supply chain management at Smeal, collaborated with four Cornell University researchers for the study, which was recently published in the journal Environmental Science & Technology.
The researchers found that if the supply chains for fluid milk products in five Northeast states were reconfigured so the milk consumed in those states was also produced and processed there, it would increase the total distance the fluid milk and other dairy products must travel, the total supply chain costs and the emissions of greenhouse gases.
The study also concluded that the additional employment and economic activity generated in the region from the reconfiguration would be modest.
"When considered as a system based on a limited resource like farm milk that can be allocated to the manufacture of different dairy products, we find that localizing food systems can have unexpected impacts," Nicholson said. "The 'global' effects of scaled-up 'localization' can be counterintuitive."
The study found that supply chain reconfiguration to support within-state regional consumption of fluid milk in the Northeast would increase total distances dairy products must travel by 7-15%, with impacts of a similar magnitude on greenhouse gas and particulate matter emissions. Total supply chain costs would increase 1-2% for the region.
According to the research, reconfiguration would generate about four new jobs in the Northeast region and about $1 million per month in additional economic activity. However, the effects of localizing fluid milk in the Northeast were not limited to that region. The average distance other dairy products had to travel increased as many as 150 miles in the southeastern U.S. as a result of changes in milk allocation due to reconfiguration required elsewhere in national supply chains.
"Our study does not indicate that local food is a bad idea, but it suggests that careful analysis of food systems may be required to achieve the desired economic, social and environmental objectives," Nicholson said.
The researchers' work was supported, in part, by a grant from the U.S. Department of Agriculture's National Institute of Food & Agriculture and is part of a larger research project called "Enhancing Food Security in the Northeast through Regional Food Systems."
This project engages more than 40 individuals at multiple universities, nonprofits and government agencies to examine whether a greater reliance on regionally produced food could improve food access in low-income communities while also benefiting farmers, food supply chain firms and others in the food system.
Profitable beef genetics
Jersey bull calves can't compete with beef breed carcass performance, but a fairly new program is giving dairy producers a new tool to add value to the herd while delivering consistent, repeatable results for packers.
Wulf Cattle has been raising Limousin cattle successfully for several decades, but it wasn't until 2010 that the operation discovered that breeding Limousin and LimFlex genetics to Jersey females is a game changer for adding value to the bull calves.
With beef operations in Minnesota, South Dakota and Nebraska, Wulf Cattle has a feedlot capacity of 40,000 head and markets approximately 60,000 head of fed cattle per year. The operation also partners with Riverview Dairy (which has facilities in Minnesota and South Dakota) as well as with replacement heifer farms in Arizona and New Mexico.
In the summer of 2010, Wulf Cattle began a trial program with Riverview Dairy by artificially inseminating Jersey females to Limousin bulls, a cross that is now called Beef Builders. The program was so successful that the company approached Genex Cooperative Inc. leadership in 2012 to market Limousin semen genetically tailored to dairies through a program called Breeding to Feeding. By 2014, Select Sires, Alta and CRV also began offering the program.
Wulf Cattle also agreed to purchase dairy/beef feeder cattle from dairy producers who utilize the program.
"We want a chance to raise Wulf Cattle genetics in our feedyards so we can have predictable cattle coming into our feedyards," Wulf Cattle president Jerry Wulf said.
For the program, dairy farmers identify cows to breed for replacement heifers using dairy bull semen. For the remaining cows, semen from Wulf Limousin bulls is used to make a Beef Builder calf that will ultimately be placed in a feedlot.
Wulf said the concept takes a dairy steer from selling at a $6 discount to getting premiums of several dollars over the beef market.
In fact, he noted that a 3,000-cow Texas dairy made a significant premium by breeding one-third of its cows to Wulf Limousin bulls. Over a 26-month period, the operation made a $237,110.94 premium over what would have been earned if only straight dairy genetics had been utilized.
Wulf said Limousin were chosen because the breed has a lower birth weight and is feed efficient. Additionally, he said Limousin have been called the "carcass breed" for decades.
A 2013 University of Minnesota study found that the average daily gain for Beef Builder steers was nearly twice the gain of straight Jerseys. Additionally, the hot carcass weight of the Beef Builder steers was 192 lb. more than the Jersey steers. However, feed:gain for the Jersey was significantly higher than the Beef Builders. Rib-eye area was about 3 in. larger in the Beef Builder, and the percentage of cattle that graded Choice was also greater for the Beef Builder steers.
The cross between the Jersey and Limousin also creates black cattle, Wulf said, adding that 35-40% of the cattle even qualify for the Certified Angus Beef program.
"The cattle perform well for us, and our customers are extremely happy," he said.
Residue prevention manual
The National Milk Producers Federation (NMPF) has released an updated version of its "Milk & Dairy Beef Drug Residue Prevention Manual" — one of the key components of the National Dairy Farmers Assuring Responsible Management (FARM) Program.
In order to share the information widely with dairy farmers, the manual can be accessed for free on the Dairy FARM program website at nationaldairyfarm.com. This year's manual includes additional information that focuses on ways the dairy industry can proactively engage in antimicrobial stewardship efforts.
The drug residue prevention manual offers a concise review of appropriate antibiotic use in dairy animals and can also be used as an educational tool for farm managers as they develop the best management practices necessary to avoid drug residues in milk and meat.
"We know that there is increased attention to the use of medicines in livestock, and in order to maintain the ability to use those products to treat sick animals, we have to demonstrate that we are using them judiciously," NMPF president and chief executive officer Jim Mulhern said. "This newly revised manual represents the ongoing commitment dairy farmers have to using antibiotics responsibly and prudently."
Additions to the 2016 version include a section on avoiding potential residue violations from extra-label drug use in an unapproved class of cattle, cephalosporin extra-label use prohibitions and an updated drug and test kit list.
The 2016 manual also includes a certificate of participation that can be signed by producers and their veterinarians to demonstrate their commitment to the proper use of antibiotics.
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