Nearby Class III milk futures rallied late this week and are now within 20 cents of the contract high posted earlier this month. But prices aren’t the only factor in the profitability equation.
Input costs like feed, energy and labor also influence the bottom line. Corn prices, for example, soared in 2012 as the worst drought in 50 years curtailed U.S. production.
In response, some Midwest dairy producers looked for cheaper sources of protein that might better tolerate weather extremes.
They discovered a product that ruminants seem to use more efficiently. And after implementing the unlikely feedstock, the Wisconsin producers agreed: sugar beets are, indeed, sweet. Josh Buettner explains.
Autumn in the Midwest offers a colorful backdrop for farmers taking to the field to reap what they’ve sown. And while fall harvest is a common sight across the land, what one group outside the town of Antigo is pulling out of the ground is anything but typical for America's Dairyland.
Mark Maus/Evergreen Dairy: “I think we’re the only ones in Wisconsin so far growing them to feed cows.”
Though sugarcane, a tall perennial grass which houses sugar in its stalk, is grown in states with more tropical climates, over half of the entire U.S. sugar supply actually ripens underground. Sugar beets, cultivated in a wide variety of temperate environments across the nation, stores sweetener in its root.
Craig Talley/Animal Nutrition Technology Lead – Betaseed, Inc.: "That’s about a seven-pounder.”
Over one million acres of the sucrose-producing flora are grown annually in the U.S. According to USDA, the Land of Ten-Thousand Lakes reported a record 12.3 million tons of the crop in 2012. And while the Red River Valley Region of Minnesota and North Dakota has traditionally logged hefty yields, companies like Minnesota-based Betaseed seek further expansion by scientifically augmenting sugar beets to offer what it claims is the best nutrient balance among livestock feed options.
Craig Talley/ Animal Nutrition Technology Lead – Betaseed, Inc.: "This is just over twenty percent sugar…We call them feed beets, these are meant for feed. The feed beets will bring the sugar, the carbohydrate and then also the digestive fiber in one crop."
For many livestock owners, feed can be their highest annual expenditure. While most cattle feed is corn-based, some producers near sugar facilities have been able to take advantage of the sweet crop’s added nutrition.
Trucking in this alternative ration has rarely proven cost-effective. But swapping out neary cornfields with sugar beets is a notion that’s picking up steam.
Craig Talley/ Animal Nutrition Technology Lead – Betaseed, Inc.:“What really spawned this whole thing was when the price of corn hit $6, $7...we had feedlot operators calling us saying, 'Can I plant beets? I love beet pulp and I'll feed it all day. Can I get more? Can I grow my own beets?'. Well certainly you can. In Wisconsin, obviously it’s the number two dairy state in the country, so there’s a lot of cows here that could use this type of forage to maximize their milk production and beets are a great fit."
Though California has overtaken the Badger State as the nation's top dairy-producer, Wisconsin’s strong infrastructure remains intact. Farmers looking to compete in a global marketplace must keep an eye on the efficiency of their operations. And sugar beets are highly effective in this regard because of the slow release of sugars locked in the plants' pectin, a dietary fiber. For cows, consuming beets may create an ideal digestive process capable of improving the quality of the animal's liquid commodity.
Mark Maus/Evergreen Dairy: "Sugar beets are 80 percent digestible versus corn. Corn silage is only around that 45, so in the rumen it has more available…so their stomachs… So in return we should make more milk and that's less going out the back end. Cows will be able to utilize it faster and more efficient.”
And proponents say sugar beets employ cornfield nutrients more effectively than the grain itself. While corn roots permeate the soil up to almost two feet below the surface, sugar beet roots, reaching 6 to 8 feet underground, scavenge for deep excess nitrogen that corn can’t reach. Preliminary results indicate higher yields from beets versus corn when considering the same field area.
Mark Maus, along with business partner Marc Braun, launched a speculative venture with Betaseed, who cut Evergreen Dairy a deal on feed beet seeds for their initial planting. And now the dairy partners are poised to benefit from the new feedstock. Braun also holds an interest in another dairy farm outside Green Bay, which is introducing feed beets to cows.
Mark Braun/Evergreen Dairy: "So our idea was to raise beets in two different areas of Wisconsin, going to two different breeds of cows with two sets of nutritionists so that once we get these beets harvested, that we have a good understanding of how they feed and what we can do with them in a diet."
Jeff Betley is a third generation dairyman near Pulaski, Wisconsin. With a herd of around 1,900 Holsteins, the idea of expanding feed rations intrigued him. While dairy prices currently are above most producers’ cost of production, Betley still sees room for improvement.
Jeff Betley/Betley Farms LLC: " We're hoping for some savings, but if we could keep everything equal and have a healthier cow, I think it’s going to be worth it. As a dairyman we watch the markets. I'm a buyer of corn but the price of corn and all feeds being high has brought the price of milk up because of, you know, the price of everything. The sugar beet is a way for us to get a little niche market and use our ground a little bit more advantageously especially up north of Green Bay.”
The extremes of the upper Midwest climate are capable of wreaking havoc on corn and soybean fields, though genetically modified seeds have allowed more resilience in the face of wild weather swings. Sugar beets provide a drought resistant crop which basically lies dormant during periods of intense heat. When water returns, the plant resumes growth. And post-harvest, a textbook Wisconsin winter could offer the benefit of cheap, outdoor storage before the product reaches its consumer.
Craig Talley/ Animal Nutrition Technology Lead – Betaseed, Inc.: " If you get 55 degrees or cooler root temperatures, it makes for ideal storage. It comes down to how much can we raise this crop for versus say growing corn or hay. I'm from the Minnesota, North Dakota region and our typical cost of production in beet production is on the low side...maybe $22 a ton to as high as $30. Corn silage is at $28 to $30, $32 a ton range… So it comes down to what it's going to cost. Your input per cow should be better with beets."
For Market To Market, I’m Josh Buettner