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Making a Living on a Small Farm

Article by John Ikerd

In times past, forty acres, a mule, and a lot of hard work were all that it took to make a living on a farm. But those times are gone. A family could live well on a lot less money in those times, but hard work also was worth a lot more back then – regardless of whether it was done by a mule or by a man. The conventional wisdom was that anyone who was willing to work hard enough could make it on the farm. During the financial crisis of the 1980s, many farmers virtually “worked themselves to death” trying to save their farm. If they could just work hard enough, they could make it. But, they couldn’t  – they went broke.

Work simply isn’t worth as much as it once was – at least not on the farm.  Tractors took the place of horses and mules.  Other machinery and equipment took most of the work out of most jobs around the farm.   Physical labor isn’t worth any more than the cost of using a machine to do the same job – maybe even less because machines are less bothersome to fix or replace and far easier to manage than are humans.

Mechanization made farming easier.  Farmers became machine operators rather than laborers.  But a mechanized farmer could farm a lot more land or raise a lot more livestock than could a farmer doing everything by hand.  And farmers still had to expect to put in full-time on the job if they expected to make a full-time living.  So a full-time mechanized farmer had to have a lot more land and a lot more capital tied up in machinery and equipment just to make a living.  With mechanization, farms became larger and it became more difficult to make a living on a small farm.

Agricultural chemicals also made farming easier, taking some additional labor out of farming, but mostly, making a farm far easier to manage.  A farmer didn’t need to know nearly as much about maintaining the natural fertility of the soil  – they could take a soil test and apply the right fertilizers.  They could specialize in crops or livestock – they didn’t need manure to go back onto the fields to maintain fertility.  Farmers didn’t need to know how to till the fields to control weeds – they could spray with herbicides.  They didn’t need to understand how to use crop rotations to control weeds, insects and other pest – they could use commercial pesticides.  Livestock farmers didn’t need to know how to keep their animals healthy and growing, they had antibiotics and hormones to fill in the gaps in their knowledge.  Farmers now could farm by recipe.  As farms became easier to manage, each farmer was able to farm more land or raise more livestock.  However, a farmer still had to expect to put in full time on the job to earn a full time living.  So with increasing use of agricultural chemicals, farms grew still larger, and it became still more difficult to make a living on a small farm.

In economic terms, there are only four basic factors of production, or four basic ingredients in any production process – land, labor, capital, and management.  Over time, machines, agri-chemicals, and other technologies have resulted in substitution of capital and land for labor and management.  Consequently, a typical full-time farm today requires far more land and capital today than fifty years ago.  It takes far more money to buy and operate a farm today because of high land and equipment costs and expenses for fertilizers, pesticides and other commercial inputs.  But, in a typical farm today, labor and management are far less important than fifty years ago.  If a farmer has enough land and enough money to buy the latest equipment and technology, they don’t have to work much or even think much – except about how to manage their money.

In economic terms, each of the four factors earns something in return for its contribution to productivity.  Land earns rent, labor earns wages, capital earns interest, and management earns a salary.  Profit or loss is the reward or penalty for taking the risk associated with investing land, labor, capital, and management in an enterprise without knowing whether the net results will be positive or negative.  Profit is the reward for taking the risk of farming rather than renting the land, putting the money in an insured CD, and working for someone else. In general, each factor of production earns a return in relation to its contribution to the production process.

As the nature of farming has changed, the returns to land and capital have grown and the returns to labor and management have declined.  It isn’t necessary to quote statistics; it’s just plain common sense.   Returns to labor and management are returns to the farmer – to the human investment in a farming operation.  The land and capital can be owned by anyone – increasingly by someone other than the farmer.  Actual farming is about working and thinking – labor and management.  And in general, the return to farming can be no more than proportional to the working and thinking done by the farmer.  If there isn’t much working and thinking going into producing a crop or a batch of livestock, there isn’t going to be much in it for the farmer – and it will be tough to make a living without a lot more land and capital. Farmers who don’t do much working or thinking simply can’t expect to make a living on a small farm.

The ultimate low-return agriculture is contract production.   Farmers are being told that the only way they can remain competitive in agriculture is by signing a comprehensive production contract with one of the giant agribusiness corporations.  But, farmers need to stop and think – who can logically expect to benefit from contract production?  Under most contracts, the corporation arranges for capital – mostly loans to be repaid by the grower. The corporation provides all of the technology – genetics, equipment, feed, health care, etc.  And the corporation provides virtually all of the management – the grower’s mainly do what they are told to do.  The grower provides the labor, but the highly mechanized operations require little labor.  Contract livestock or poultry operations require little land, although the grower is expected to find some place to dispose of manure.  In summary, the grower provides a small amount of equity capital, a small amount of land, and some low-skilled labor.  The corporation provides everything else. The grower gets a fixed amount per animal produced, regardless of costs or price, so the contractor even takes most of the risk.  So who is going to benefit from a corporate contract operation?  Certainly not the grower – the grower doesn’t do anything that would justify making a living in such an operation.

So what does all this say about making a living on a small farms?  It says small farmers have to put a lot more of themselves into their operations – a lot more management and labor – than do most farmers today.  It says a farmer can’t expect to make a decent living if someone else makes all of the important decisions and they only contribute some low-skilled labor.   It says that farmers must rely on management and labor far more and rely on land and capital far less if they expect to make a living on a small farm.  It says that the way to turn a small farm into a full-time farming operation is to find ways to substitute management and labor for land and capital.

There is a limit to how hard anyone can work or, more important, would want to work on a farm.  Working harder is still not the secret to making a living on the farm – even though most of us would be better off if we did a bit more physical labor and a bit less sitting.  However, thinking is potentially far more productive and is far less limiting than is working. So the key to making a living on a small farm is more intensive management mixed with an appropriate amount of skilled labor.  A small farmer has less land and capital so they have to do more thinking and decision making per acre or dollar invested – and they have to be willing to work when working is the logical thing to do.  They have to put more of themselves into it if they expect to get more for themselves out of it.  The successful farmer of the future might quite accurately be labeled a thinking worker or a working thinker – the key is to do both together, simultaneously, in harmony.

It takes more thinking to work with nature to reduce costs of inputs and increase profits while taking care of the land  – more eyes per acre as Wes Jackson says.  It takes more thinking to find and keep customers who want, and are willing to pay for, the things a small farmer can produce in harmony with nature – relationship marketing as Joel Salatin calls it.  It takes more thinking to fit your unique talents and skills as a farmer to the needs of your land, to your particular customers and your community – linking people, purpose, and place.  Literally thousands of these thinking workers are on small farms today all across the land – putting more of themselves into their operations and are getting more for themselves in return.  Each is doing something different, but one by one they are finding ways to make a good living on a small farm.

Link Photo by Robert Moore

 

Take a peek at some of the Farm Masters content with this awesome video with Fred Mertz about a new way of farming.

Do you live on a small farm? Share your story!

 

 

Farm Transfer Strategies

Many families spend years accumulating wealth and are interested in keeping another generation on the farm. However, not all farms will or should be transferred to the next generation. Many farms are not large enough or the next generation may not be interested in being in agriculture. Some children may be interested in farming as a part-time occupation. Other families may look outside their own family for non-related parties to bring into the farming operation. Some families will retain ownership of the land, following the parents’ deaths, as an investment.

Building a Management Team

The first step towards a successful business transfer is to build a management team. Team is the key word. Over time, it needs to be a team decision. Early on many of the decisions may be made by the older party. Ultimately, the younger party may make most of the decisions. The older party should focus on improving the management skills of the younger party. The training should cover all parts of the business so they gain an understanding of how all components of the business fit together.

The next key phrase is open communication. Everyone needs to feel that their ideas and opinions are respected. All involved parties are encouraged to speak up. There also needs to be a strategy for dealing with conflict or differences of opinions as well as regular performance evaluations that highlight both strengths and weaknesses in the business and relationships.

The parties have to work together. They also may need to have other players on the team such as insurance agents, accountants, legal experts and others. Better record keeping may help facilitate better team work.

Transfer Strategies

To increase the ease of transferring, several critical issues should be addressed in the succession plan.

These critical issues are the:

  • transfer of labor
  • transfer of management
  • transfer of assets
  • identification and management of possible risks or barriers

These issues tie in with potential areas of conflict that should be addressed in the business plan. The first area of concern is “Hierarchy of Control.” Who will be in control of the decision making process? How will decisions be made? In a farm business, the older generation may not be willing to give up control. Often the first area the older generation is willing to give up is labor. The business plan should outline a timeline for the transfer of management as well. It should also address the topic of the transfer of assets and the process for doing that. Which assets first? What are the barriers and how might they be dealt with?

Another area is “Stability versus Growth.” If we are going to have more people living off of the current farm operation, is it large enough to provide the needed income? If it isn’t, how will this issue be addressed? If the operation is in a growth mode it may have reduced available cash for distributions for living expenses.

The “Business Life Cycle” for a typical business is an initial shortage of capital and profits matched with an abundance of labor. Over time the business builds up capital and management. Eventually the owners want to start taking capital out for retirement and reducing labor contributions. By bringing in new people we can restart the business cycle before it peaks and build upon the capital and management already in place.

Another area the transition plan should address is the issue of “Personal versus Business Goals.” This relates to the issue of where the capital gets allocated as well as individuals’ time and management. Small businesses often have goals besides maximizing profits. Do we shut the combine down to go to a son or grandson’s football game? Do we remodel the kitchen or do we put money into new farm equipment?

Another area to be addressed is the “Lack of Formality” that is often a part of ag businesses. Are we going to have a formal business structure such as a Limited Liability Company or are we going to be more informal? Do we develop an in-depth operating agreement that lays some of these things out?

Transfer of Labor and Fair Compensation

Often the younger party only brings labor to the ongoing business. However, along with this labor they bring new ideas and reason to continue and grow the business. They may also bring skill sets that are currently lacking in the business such that fair compensation is sometimes difficult to assess. There are surveys for general compensation information, and it is vital to pay today what each party deserves today. Statements like “someday this will all be yours” or “if you stick with me in the tough times I will take care of you someday” should be approached with caution. Look for ways to compensate people today; perhaps with an equity position in the business.

Usually, the older generation is looking to reduce the amount of labor they contribute. The business plan should give some indication for the time frame and the level of reduction of labor. It should also give some indication as to the labor requirements for the younger party.

Transfer of Management

The issue of who controls the management can be a barrier to successful transitioning. This can also be an issue for spouses or siblings depending on the business structure and how it has operated in the past. Young people bring new ideas to the business and often would like to try to implement them as quickly as possible. Often they require additional capital to implement.

The older party may have a different view of what retirement is compared to others. Retirement to some means slowing down, doing the things one likes to do, and taking off time when one likes. For others retirement means that one is not involved in any of the management or daily operations. Many farmers are somewhere in between. With today’s technology one is able to farm much longer than past generations and as life expectancies have increased some farmers have farmed into their 80s or even 90s.

If we are to be successful in transitioning the business there has to be a plan to transition management. By the third year the younger party should be involved in management in some form. It may be they are responsible for all of a small area or they are part of the decision making process for the total operation. In grain farming it may be easy to have the younger party farm his own piece of land that he rents from the older party. This will give him some experience in financing, buying inputs, machinery expenses and marketing.

The speed at which management is transferred and the level of which it is transferred is based on many factors. It must happen and the older party should actively push to make it happen.

Transfer of Assets

At some point the transfer of assets will need to occur. How fast and which assets are based on many of the things already discussed. The method for transferring will also be impacted by the type of business structure.

The control of machinery is often transferred by lease or by sale. Related parties may also involve gifts. In the very early stages the older party may trade the value of machinery for the value of labor. Or they may rent machinery to the younger party on a “per acre per trip” basis at a rate that covers repairs and depreciation.

Another method is the “buy and trade” where the older party sells a piece of equipment to the younger party and then the younger party trades it in on a new piece of equipment that the younger party owns. This allows for the sale of the equipment to be stretched out over time and the younger party to stretch out the time to purchase a line of equipment.

Another strategy is the “trade and buy back” where the older would like to buy more equipment but doesn’t want to lose use of a piece of equipment. For example, the older farmer wants to buy a new tractor, and also would like to sell the old tractor to the younger party. The older party trades in the tractor on the new one and then the younger party buys the old one back from the dealer.

Sometimes the older party will want to sell all of his equipment on contract. The problem with this is that all of the depreciation is recaptured in the year of sale and if sold to a related party the capital gains is taxable in the year of sale. You will also see the older party lease the equipment in five or seven equal payments with ownership being transferred to the younger party after they make the final payment. This would be a disguised sales contract subject to recapture as well.

Another method is to lease the equipment with the valuation adjusted each year and the payment based on a capitalization rate and the buyout based off of market value. Consult with your tax person before entering into any agreements.

The transfer of livestock can be at an inventory time such as the start of the fiscal year or when the inventory is lowest. It could involve the sale of the finishing livestock or just the breeding livestock or both. The older party might sell part or the entire breeding herd to the younger party.

If you sell part of the breeding herd and jointly own livestock you need to realize that you may now look like a partnership with the associated benefits and liabilities.

The sale of land to a younger party is usually very limited because of the capital requirements and the younger party can normally get higher returns from other types of assets. However, there are some beginning farmer programs to encourage and assist in purchasing land.

Leasing land is covered at the end of this publication and may be a more viable strategy. There may be beginning farmer tax credit programs to provide incentives to lease to beginning farmers.

Transfers by gifts or by will are covered in another publication.

Business Structures

There are two common models for setting up the new business to bring in another party. One is the “Super Firm”; the other is the “Separate but Share.” A variation of this is the “Spin Off” where they start out together as a super firm but spin off the new business at some point.

With the super firm the younger party usually starts off as an employee of the business. As time goes on he may invest his own capital in the firm and he becomes more involved in the management. Eventually he may take over management of the super firm and acquire some or all of the assets of the firm.

A variation of this is when at some point in time the younger party takes their capital out of the super firm and creates his own firm. This may come as the result of a conflict, but there are several other reasons to do this.

With the “separate but shared” approach the younger party starts his own firm. They may lease equipment or land from each other, share in the purchasing of equipment or inputs to attain economies of scale, jointly market grain and trade labor. Each operation stands on its own merits. They do not operate as a partnership. They operate as sole proprietors.

A partnership is when two or more persons share in ownership (not necessarily equally) in the operating of a business. Partnerships end at the retirement, sale or death of one of the partners which often limits the use for transitioning.

More common for “Super Firms” would be the use of C corporations, S Corporations or Limited Liability Companies. You will also find these used in combination with sole proprietors or in combination with each other. It is also more common to see Family Limited Partnerships being used for estate tax planning.

These entities have shares or units of ownership which can be sold, gifted or inherited or transferred as compensation for management provided.

Risks or Barriers

In transferring a business there are many areas where problems could occur. It could be as basic as communication. It could be an untimely disability or death. It could be a period of low or negative profits. Your transfer plan needs to identify as many of these as possible and develop possible strategies to deal with them. That might include insurance, buy-sell agreements, operating agreements, first right of refusal on offers to rent or sell. It could also involve the use of trusts to maintain control of assets after the death of a key person.

There are situations where transferring the farm business will not be feasible. Other options such as liquidation or leasing may then come into play.

Liquidation

Some farms will be liquidated during the current owners’ life. Parents may want to maintain or improve their standard of living and they may not have other resources. As people live longer, inflation and health care costs may result in the need to generate more income than the land might provide.

In this situation managing income taxes and investing the additional capital generated become the focus. Deductions for health care costs may offset some of the tax liability. Selling land on contract will allow you to stretch out capital gains taxes. Keep in mind that capital gains from contracts are treated as “income in respect of decedent,” for income tax purposes if you die before the contract is paid off. You also have to evaluate what future tax brackets you might be in, how long you might live, and the current as well as future estate tax laws.

In some situations, family members may want to buy the land. There are special tax rules for sales to family members. Review IRS Publication 537 “Installment Sales.” Sales below fair market value or sales with discounted interest rates may involve gift tax issues.

Keep in mind that there are special rules for the sale of your home. If you decide to sell off the acreage and move, you will find very favorable tax laws relating to the sale of the home.

Leasing Land

Much of the land is leased out when farmers retire if there isn’t a plan to continue the business. Sometimes this isn’t a total stoppage but more of a transition. It may include the selling of the livestock, a shift to some custom farming, or renting out a portion of owned land.

Generally, when you shift to a rental arrangement you are no longer subject to FICA taxes on the income if you do not meet the “material participation rules.” You can have a crop share lease and not be materially participating. In recent years there has been more of a trend toward cash rent leases. Some of these do involve a bonus or flex payment based on yield, price or more commonly both price and yield.

Retaining ownership until death allows the heirs to receive a “step up” in basis at the death of the owner, often eliminating a significant amount of capital gains tax.

For larger estates, qualifying for “special use valuation” may be a useful way to reduce federal estate taxes. To qualify you must look at the use of the land before retirement, after retirement and ten years after death.

This material is based upon work supported by USDA/NIFA under Award Number 2010-49200-06200.

Article courtesy of Kelvin Leibold from Iowa State University Extension and Outreach.

Link photo courtesy of D. Clow

 

Creative Negotiation

The very thought of negotiating sounds intimidating, yet we are all experienced negotiators. Any time we come to an agreement on anything, we are negotiating. Some of it we may do somewhat subconsciously, such as taking turns merging into traffic or deciding who says hello first. Determining where to go out for dinner with your spouse, or asking your daughter for help in training a colt also involves negotiation. More traditional issues we associate with negotiation may include agreeing on (1) a pruning price with your vineyard crew, (2) how much you are going to pay to have your dairy barn constructed, or (3) how much you will get for your export cherries. The greater the importance of the outcome, the more stressful or emotional the negotiation can be.

A typical approach is to either yield or compete. We are most likely to yield if we feel there is little chance in winning, or if the outcome is more important to the other person than to us. Yielding is not only noble, but often the best decision. But not always. If saying yes today means living with frustration or resentment tomorrow, yielding is not a virtue.

Competing, like yielding, means one person gets his way. Or at least it seems so at first. In the long run both parties often end up losing. It does little good, for instance, to get a wonderful contract for your new dairy barn if the contractor is not able to complete the project and goes out of business. Competition tends to focus too much on a particular episode rather than on long term viability. Also, the focus is more on the present goal than on the relationship. I know a retired manager who brags that his subordinates soon learned he was not always right—but always the boss. Although this manager may have obtained worker compliance from his winning tactics, I doubt he got much in terms of employee commitment. Losers often hold grudges and find ways of getting even.

Compromise is an alternative to either competing or yielding. Some types of compromises involve an arrangement somewhere between two positions; others may mean alternating the beneficiary. An example of the former is paying 20 cents per vine pruned when management wanted to pay 18 cents and crew workers asked for a quarter. An instance of the latter may involve alternating who gets first crack at using the computer at the barn. Greater trust and maturity is often required by this second type of compromise.

On the plus side, compromise takes a measure of goodwill and little creativity. On the minus side, compromise often involves lazy communication or problem solving. You may have heard the classic tale of two sisters who argued over who would get an orange. They compromised and split it in half. One sister ate her half and threw away the peel; the other, who was involved in a cooking project, grated the peel of her half and threw away the rest of the orange.

 

Creative Negotiation

Creative negotiation involves looking for the hidden opportunities presented by challenges. An integral part of this creative effort requires that possible solutions meet the needs of each stakeholder. The task at hand involves overcoming at least four difficulties.

First, our natural tendency is to come up with stances, that is, we give our best solution to a given set of needs. A greenhouse manager may ask his production supervisor to review the color picking scheme with the harvesting crew. Pickers have been harvesting too many green tomatoes lately. The greenhouse manager’s need is to lower the number of tomatoes harvested that do not meet minimum color requirement. His stance, or position, is to have the workers re-trained by the production supervisor.

Second, we are inclined to focus exclusively on our needs and assume it is the other stakeholder’s responsibility to worry about having her needs met. Ironically, by showing a sincere interest in the needs of others we increase the chances to have our needs met. When interviewing the greenhouse crew workers we may find they understand perfectly well the correct color to harvest tomatoes. Yet, because they get paid a piece rate crew workers find it difficult to meet their economic needs if they devote too much attention to quality. The greenhouse manager and crew workers can initiate problem solving armed with the combined knowledge of both of their needs.

Third, our emotions get in the way regularly. Nothing kills creativity quicker than anger, pride, embarrassment, envy, greed, or other strong negative emotion. Anger is often an expression of fear, or lack of confidence in our ability to get want we think we want. Anger is very much self centered. Emotional outbursts tend to escalate rather than solve a conflict. If we can improve our ability to manage our emotions and respond without getting defensive, we have gone a long way toward creative negotiation.

Fourth, we frequently fail to explore beyond the obvious solution—like the sisters who split the orange in half. It helps to validate the other stakeholder’s needs as a starting point in exploring creative solutions and as a way to reduce negative emotion. “You need to get home by four today. Let’s think of how we can get you home by four and get the animals fed, too.”

As we practice creative negotiation, faith in our ability to turn challenges into opportunities will increase. This self-confidence will help us focus on problem solving and reduce the chances of falling back on contention, negative emotion or competitive negotiation. So, next time you find emotions getting the better part of you see if creative negotiation will not help to fill your needs as well as those of the other stakeholder.

Article courtesy of Gregorio Billikopft

Link photo courtesy of Jonny Goldstein


For more information on effective negotiation skills, feel free to check out our video series by Brady Wilson from Juice Inc. on negotiating.

Business Management Tools for Purebred Cattle Producers

Are you are purebred cattle producer looking for business management tools to better understand the profitability and risk in your operation?

Through support from the PBRA project that was primarily funded through the Private Sector Risk Management Partnerships (PSRMP) a Business Risk Management program of Agriculture and Agri-Food Canada, the Canadian Beef Breeds Council (CBBC) has developed a number of resources and tools for purebred producers which go above and beyond the current management systems you are likely using now.

Available free of charge some of the tools include:

CBBC Purebred Producer Cost of Production (COP), Product Pricing and Benchmarking Workbook

“One key to long-term profitability in the cattle business is to analyze and manage production costs. There is no greater risk to business success than a lack of profitability; banks demand profitability, and families need it.

This unique COP workbook is tailored specifically to purebred beef cattle producers. It is an interactive tool providing both key cost-analysis and benchmarking functions. It can help you manage your production costs, make the most of available resources. The information tracked and evaluated through this tool allows you to make informed decisions, evaluate the return on investment and profitability of each aspect of your purebred cattle programs, and plan for the future. The tool has the option for producers to anonymously provide relevant data to CBBC to help update national benchmarks.” ~from the CBBC website

Purebred Sales Reporting Workbook

“This Purebred Sales Reporting Workbook provides a tracking tool to capture annual purebred sales. This provides a handy sales reference tool for producers and the information it captures is critical to help establish sector benchmarks.” ~ from the CBBC website

Other resources include: Bull Valuation Calculator and a number of capital, lending and risk management tools.

You can find all of the above mentioned resources, and free downloads on theCBBC website
As always, if you are looking for assistance with the CBBC tools, or are interested in other related resources, be sure and give me a shout at jen.jenkins@farmon.com or click on the orange tab on the right of the screen where it says “Farm Support”

Check out The Woman Who Think Like a Cow to find more ways to manage your cows.

A Proper Milking Routine: The Key to Quality Milk

Article by Andrew P. Johnson

Total Herd Management Services, Inc., Seymour, Wisconsin

 

Milk quality is a world wide issue. The consumer has demanded a better quality product so it is the dairy producers and dairy industry’s obligation to meet that request. All consumers have choices and if the dairy industry does not meet their needs, they will buy other products.

Milk quality is dependent on three key areas. These areas are the milking routine, the cows and their environment, and the milking equipment. I refer to the interaction of these three areas as the “Mastitis Triangle.” A common reason why many milk quality programs fail is people fail to look at all three areas together and all causes of the problems are not identified.

The milking routine is critical to the production of quality milk. People need to clearly understand there is huge economic differences between different regions of the USA so the significance of a quality milk can be different in all these areas. In my opinion, money should not be the driving force to producing quality milk because research has clearly shown herds with lower SCC do make more profit by the production of more milk. Under most circumstances, the milking routine can be the key reason for the production of quality milk. The secret is to make sure every one on the dairy farm clearly understands the importance of a consistent milking routine and implements this routine at every milking. On the vast majority of the dairy farms that I consult with, fine tuning the milking routine is necessary to get to the new level of milk quality every one wants. To have success in changing a milking routine, you have to implement procedures that clearly demonstrate the need for change. When the milkers can clearly understand the need for change, you are much more likely to succeed in the implementation of any change.

When evaluating a dairy during milking, the most important factor that I look for is consistency of the milking routine. Having a milking routine that every one can follow at every milking is very important. Once you have evaluated milking practices long enough to understand their normal routine, the next thing to look for is timing.

Recent studies have clearly demonstrated that regardless of which region of the country a dairy farm operates, there are definite economic benefits to having a good milking routine with the right timing. Their studies showed the ideal lag time from the start of the milking routine to unit attachment was 60 seconds. On many of the dairies I consult at, there is a wide variation in lag time depending on who is doing the milking and many of the cows do not have adequate let down prior to unit attachment. I call this “over milking” at the start of milking. A quick and easy way to determine if the proper lag time has existed is to examine the teats prior to unit attachment. If the teats are swollen with milk, you know the stimulation and lag time is good. When the teats are empty, you know the units are being applied too soon and there is a greater chance of udder health problems and longer milking times. One of the hardest things to accomplish on a dairy is to develop a milking routine that every one understands and can easily follow. Many of the milkers have milked at various other farms and tend to utilize the skills they had acquired from those farms. It is not uncommon to see three or four different routines on each farm. I try to look at the advantages of each routine and then develop a routine that gives the dairy the best of what is already being done and will lead to better milking performance and milk quality.

Every milking routine should start by having the milkers wear milking gloves. In my experience, hands are a common source of bacteria to the cow’s udder. Hands are a common source of Staph aureuswhich is a common contagious bacteria affecting most farms. Wearing gloves is important, however, keeping the gloves clean is equally important. Gloves can be cleaned periodically by sticking them in a bucket of warm water and sanitizer or by using automatic faucets to clean them in a parlor. Milking with clean gloves is an important way to reduce the level of mastitis on any dairy operation. If milkers are not using gloves, I feel it is enough of a reason to terminate them from employment.

Every milking routine must properly sanitize the teat skin and teat end. There are many different ways to accomplish this, however, most dairies are now using predip to sanitize the teats. Predipping is an excellent way to control environmental bacteria as well as Staph aureus, which tends to colonize on the teat skin. In order to make predipping more successful, two things must happen. The predip must cover the entire surface of the teat that will be inside the teat cup during milking and be on the teat long enough to kill the bacteria. My goal is to have 75-90% of the teat surface covered with predip and have it on the teat for a minimum of 20-30 seconds. An easy tool to use to see if teats are getting proper coverage is to use a white paper towel and wrap it around the teat and see how much of the teat has been covered with dip. DO NOT assume the teat has been properly sanitized just because a teat dipper is being used.

In my consultation practice, fore-stripping is a critical step in the production of quality milk. In a recent study done by a national milking machine manufacturer, it was clearly shown that cows that are fore-stripped will have higher flow rates and milk close to one minute faster. In other words, you can spend a few more seconds prepping a cow because the shorter milking time will make up more than that difference. My experiences have shown that herds that fore-strip will have faster milking, lower SCC, and actually get more milk production. Fore-stripping should be done either as the first step prior to predipping or immediately after predipping. The argument for fore-stripping after predipping is the milkers will work the predip into the teat skin and do a better job of cleaning the teats. The only thing that matters to me is to make sure the teats are never fore-stripped after drying because the teats are then re-contaminated with bacteria and the lag time will be too short.

The most important step in both the cleaning and stimulation of the teat is drying. The drying towel removes the most bacteria from the teat and provides extra stimulation to the teats. The secret to successful drying is to make sure the teat end is wiped dry. If the teat end is not properly cleaned, the dairy will have more problems with environmental mastitis. When wiping the teats dry, the milkers must make an actual pass across the teat end. If the milkers wipe the teats dry in a circular motion, it is very easy to wipe the teat ends dry without spending any additional time.

The best way to monitor how good of a job the milkers are doing cleaning the teat ends is to wipe the teat ends with an alcohol pad prior to unit attachment. Often times, the teat walls are very clean, however, the teat end is still covered with manure. The teat end is the most important piece of real estate on any dairy operation.

Once the teats have been properly cleaned, the units need to be put on the teats with as little air admission as possible. The more air that is leaked in during attachment, the more irritation there is to the udder and milk quality can suffer. If properly trained, 95 out of 100 teat should have the teat cups put on without any audible air leaks. I understand this is being picky, however, it does make a difference in the total milk quality program.

After proper unit attachment, every milker needs to take a few seconds and properly align the unit on the udder. The key is to make sure the unit hangs squarely on the udder so liner slip in minimized. Poor unit attachment is a common cause of poor milk outs and liner slip. It doesn’t matter if you have a parlor or stanchion barn, unit alignment must be done.

All units need to come off when the cow is done milking. Many dairies are now using automatic take offs (ATO) which have been very beneficial. ATO’s bring consistency to milking regardless of who does the milking. The key is to make sure the ATO’s are properly set so they come off when the cow is done milking and do not over milk the cows. New studies that are currently being done clearly show the benefits of not over milking cows. The best way for you to evaluate whether cows are being properly milked out is to do strip yields immediately after the cow is milked out. Take a kitchen measuring cup and strip out all the milk left in the udder. If there is less than 250 ml of milk evenly distributed in the udder, the cow is milked out. By doing strip yields, you can also determine when cows are milking out unevenly because many times one quarter has most of the milk left when the unit comes off. When you have done many strip yields, you will find many units don’t come off the cow soon enough because there is only 50 to 75 ml of milk left in the udder. The simple task of strip yields can answer many questions.

Once the units are removed from the cow, I would like to see the teats dipped with an effective teat dip. My idea of proper teat dipping is a teat that has 75-90% coverage on the entire teat. Since the milking machine is one of the best washing machine ever built, the teats are bathed with milk during the milking process. In my mind, the key reason to teat dip is to remove the milk film left on the teat after the machine comes off. If milk film is left on the teat, the film will provide food for bacteria to grow especially in facilities with organic bedding. Convincing milkers to slow down and get good coverage is one of the biggest challenges I face. Many people feel that since they are dipping, they must be doing a good job. The secret is not to splash the dip on but to squeeze the dip on getting excellent coverage. Using the white paper towel to check teat coverage is a great tool to show teat coverage with the post dip.

An excellent way to monitor a good milking routine on a dairy is to look at the milk filters after milking. If the filters are dirty, it is clear that teats are not being properly cleaned. If the filters are full of gargot, it is clear clinical milk is being missed. If there is lots of bedding on the filter, there may be too many fall offs or teats are not being properly cleaned.

Once the milking routine has been properly evaluated and a new routine has been developed, the new routine should be typed up and a copy given to every employee. Another great practice is to post the milking routine in the parlor or milk house so people are reminded of what is expected form them. I have found the most success in implementing a new milking routine when everyone who milks cows is given a chance to discuss the changes and give their input. Keeping everyone involved is the secret to milk quality success.

A good milking routine is the key factor in the production of quality milk. If the right routine is implemented on any dairy operation, the farm should milk cows faster, get more milk, have better milk quality, and be more profitable.

Link Photo courtesy of Judy Baxter