Public Enemy #1: Cow Flatulence

By Patrick Cavanaugh, Farm News Director

While not a popular or sexy topic of discussion, flatulence is a very natural activity. Who amongst us hasn’t occasionally burped, belched, or otherwise passed a little gas? When guilty of passing waste gases such as hydrogen, carbon dioxide, methane and other trace gases due to the microbial breakdown of foods during digestion, we may say, “Excuse me.”

But for dairy cows and other cattle, manners do not suffice; the California Air Resources Board (ARB) has a low tolerance for such naturally occurring and climate-altering gaseousness. The ARB is planning to mandate a 25% reduction in burps and other windy waftage from dairy cows and other cattle, as well as through improved manure management.

Anja Raudabaugh, CEO of the Modesto-based Western United Dairymen (WUD), said, “The ARB wants to regulate cow emissions, even though the ARB’s Short-Lived Climate Pollutant (SLCP) reduction strategy acknowledges that there’s no known way to achieve this reduction. The ARB thinks they have ultimate authority, even over what the legislature has given them: two Senate Bills—SB 32 and SB 1383—to limit the emissions from dairy cows and other cattle.”

“We have a social media campaign addressing the legislative advocacy components,” Raudabaugh explained, “to make the legislatures aware that this authority has not been given to ARB by the legislature, and to bring that into perspective.” Raudabaugh said while SB 32 is not that popular because it calls for raising taxes, SB 1383 is worrisome, “because if anybody wanted to achieve something of a win for the legislature this year with respect to greenhouse gas emissions, this is the only bill left,” she said.

Raudabaugh said that in order for the ARB to achieve their mandated 75% reduction in total dairy methane emissions, they are proposing that 600 dairy digesters be put on the methane grid by 2030. According to the ARB’s own analysis that could cost as much as several billion dollars—more than $2 million, on average, for each of California’s remaining 1,400 family dairy farms.

“That is not only expensive, but digesters do not work for every dairy. They can be an option for some, but because of their expense and the reality that not everyone ‘dairies’ the same way, digesters cannot be a mandated solution,” noted Raudabaugh. “All dairy personnel and other interested Californians should contact your state legislature and urge them to veto both bills and not allow the ARB more powers than they actually have.”

Cows are at the center of new proposed regulations in an effort to reduce methane levels in California.

The California Air Resources Board wants to reduce the amount of methane emissions by 40 percent by the year 2030. It says much of that is created by manure and gas from cows.

Opponents say the efforts are over-regulating the dairy industry.

“It’s very serious to us. It’s not a laughing matter. When someone tells you to control the uncontrollable or else … my family has been doing this since 1942. We’re proud of what we do. And how we take care of our cows and the environment and we don’t feel like people are taking us seriously,” said Devin Gioletti, Turlock dairy producer.

Some California dairy farmers are fighting back, launching a social media campaign. They claim the air resources board is overstepping its bounds.

Some studies say that happy cows produce more milk and California has claimed for years that its cows are happiest, but new data are proving that Wisconsin’s dairy industry is becoming the bomb for bovines as the Golden State struggles through an epic drought.

Wisconsin produced more milk per cow than California in June and July, according to early estimates from the National Agricultural Statistics Service.

If the numbers hold up, it would mark the first time in an eye-popping 684 months — that’s 57 years, dating back to June 1958 — that Wisconsin topped California in that measure, which played a key role in California’s race past Wisconsin to become the country’s top milk producer in the 1990s.

“It’s amazing to imagine that kind of a trend overturned,” said Mark Stephenson, director of the Center for Dairy Profitability at UW-Madison. “If the numbers hold up, it will reflect a general trend of events that have been happening for awhile.”

That trend reflects hard times for a California dairy industry that looked invincible in 2008 when it produced 41.2 billion pounds of milk, topping Wisconsin’s production by a record 16.7 billion pounds. Since then, Wisconsin rallied, boosting production 13.6 percent to reach 27.8 billion pounds in 2014.

Despite the four-year drought, California set a new production record last year at 42.3 billion pounds, but its growth has slowed since 2008, rising just 2.8 percent since then, allowing Wisconsin to close its California gap by 2.2 billion pounds in 2014. That deficit is expected to shrink even further in 2015.

But Stephenson and other ag economists say Wisconsin isn’t about to surpass California in milk production anytime in the near future.

“Anything can happen,” Stephenson said. “But California still has a substantial lead in total milk production relative to Wisconsin so I’m not sure anybody should be waving that flag of victory yet. It could lead to some crow that you’d have to eat a little bit later.”

What interests the dairy experts is how and why the two states’ dairy industries are moving in opposite directions and what it means for their respective states. The explanation begins with the quality of feed. Farmers believe the better the cows eat, the more milk they produce.

In California, where dairy farmers buy the majority of their feed rather than grow it, high feed prices due to the drought and other factors have forced them to opt for cheaper, less nutritious feed, Stephenson said. They are also culling more cows to make ends meet.

Stephenson said California farms that have grown corn or alfalfa for their cows in past years have had to scrap those plans because of water shortages. Some are using the land to plant nut trees that don’t need as much water and provide better opportunities for profit. Others are selling and getting out of the business.

After maintaining a consistent per-cow production average through 2014, the bottom has fallen out this year for California’s dairy industry. It has yet to have a month that matched or bettered the same month from last year.

If the June estimate stands up, California’s per-cow production numbers will have dropped 7 percent from the previous month and nearly 11 percent since reaching a record high of 2,140 pounds in March 2014.

Early estimates from NASS had Wisconsin milk production at 1,915 pounds per cow in June, which topped California by just five pounds, and at 1,955 pounds in July, which was 40 pounds better than California. California had topped Wisconsin’s per-cow production by 175 pounds this March and by nearly 300 pounds in some months in 2014. That latter gap was the norm for much the past 30 years.

It’s not out of the question that Wisconsin could top California for the year in per-cow production. Wisconsin trailed by nearly 1,500 pounds through July last year and finished 1,916 pounds behind at the end of the year. This year, Wisconsin has put together the strongest increase in per-cow production among the top milk-producing states and trailed California by just 615 pounds through July, according to NASS data.

That loss of production is big news in California, where dairy has maintained its edge as the biggest money maker for its mammoth agriculture industry. The total losses from the drought are expected to reach $2.7 billion for the state’s ag industry in 2015, with job losses reaching 18,700, according to an economic impact analysis of the drought.

“It’s really serious. There are some really good farms that are in financial difficulty,” said Stephenson. “This drought is going to impact California for a long, long time. We have a pretty strong El Niño that is forming and that could bring more rain and moisture to California this winter, but it won’t be enough to declare the drought broken and gone. It’s going to take awhile for that to happen.”

Adding to the bad news for California — the top dairy product exporting state — is a forecast from the U.S. Dairy Export Council for another weak year for sales of U.S. dairy products worldwide, which will lead to a milk surplus that will keep prices down.

“When you go back to 2010, there was more of a feeling of panic from the people I worked with,” said Annie AcMoody, director of economic analysis for Western United Dairyman, an organization whose members in California produce 60 percent of that state’s milk. “Now it’s more frustration and an inability to change things to where they want them to be.”

The best explanation for Wisconsin’s surge in milk production is higher-quality feed due to a couple of excellent growing seasons, Stephenson said.

Also, more Wisconsin farmers have pulled their cows out of tight, cramped quarters and are adding creature comforts like comfy bedding and free-range stalls in their barns, parallel milking parlors that are more comfortable for the cows and more nutritious pastures that have been part of the California dairy infrastructure for decades.

“One of the things we saw after World War II and into the 1990s was the lack of reinvestment in the infrastructure of the (dairy) industry, and that slowed our opportunities down,” said Patrick Geoghegan, spokesman for the Milk Marketing Board of Wisconsin. “Now you’ve seen that reinvestment in the infrastructure in the processing and farm side and that has propelled the growth that you’ve seen the last decade.”

Even if California stays on a long-term downward trend in milk production, it is still unlikely that Wisconsin will overtake it because California has nearly 500,000 more cows and Wisconsin’s proud history as a small-farm dairy state will limit the growth of more big farms that can dramatically increase cow numbers. “The land can become available slowly over time, but that explosive growth that is needed (to increase production rapidly) is very difficult in this region,” Stephenson said.

Geoghegan believes strengthening the state’s dairy industry is more important than regaining its crown as the milk production leader.

“That points to efficiency, and that’s absolutely necessary if you want to be competitive in the dairy industry,” he said.

But there is room to have some fun once in a while, so there was no shortage of commentary when the discussion turned to which state has the happiest cows.

Stephenson said it’s common knowledge that cows prefer temperatures below 50 degrees, so while California is warmer and sunnier, the happier home for cows is Wisconsin.

“We might not like it (the colder weather), but that is really where the cows are happiest,” he added.

THE LAND IS bare, except for a few weeds, and the ground is cracked. For the second year in a row, Dan Errotabere is fallowing one third of his ranch: 1,700 acres of California farmland that might have grown tomatoes, garlic, onions and garbanzo beans.

“I can’t do this every year,” Errotabere said, inspecting an idle field on his family’s Fresno County farm. “I’ve got to grow. I’ve got to farm.”

This is the state of California agriculture in the fourth year of record-setting drought. With deliveries of surface water through state and federal pipelines slashed by 70 percent overall, the state’s 77,000 growers are struggling to produce the diverse agricultural bounty that makes California the nation’s leading farm state. At least 800,000 acres likely will sit idle this year, or nearly 9 percent of the statewide total, according to the California Farm Water Coalition. The coalition says about 690,000 acres were taken out of production last year due to drought, although other estimates have been lower.

Even as many farmers cut back their planting, California’s farm economy overall has been surprisingly resilient. Farm employment increased by more than 1 percent last year. Gross farm revenue from crop production actually increased by one-fifth of 1 percent last year, to $33.09 billion, according to the U.S. Department of Agriculture. The revenue figures don’t take into account animal agriculture, such as beef and dairy production.

The statistics don’t mean farmers and their employees are having an easy time of it. Rather, the data show how farmers are coping with the water shortages. Forced to make choices, they’re diverting more of their dwindling water supplies to keep high-value crops going. Almond prices, for example, have been sky high, and farmers such as Errotabere have idled other crops to preserve their almond orchards and reap the financial rewards. As for jobs, many of the crops that have held up the best also happen to be the most labor intensive, such as strawberries, which has helped pump up employment.

“The agricultural economy is, in a general sense, not that bad if you have a product to sell,” said Dave Kranz, spokesman for the California Farm Bureau Federation. “If you don’t, you’re not going to be able to take advantage of that.”

Without question the drought is reining in a sector of the economy that’s been a juggernaut. Between 2003 and 2013, annual agricultural output adjusted for inflation grew by 24 percent, to $46.4 billion. The full impact of the unplanted acreage won’t be known for months, but it’s obvious that many farmers are cutting back.

Some 27,000 acres of California grapevines have been ripped up in the past year, and another 20,000 acres of orange and lemon trees are expected to be bulldozed this year. Sacramento Valley’s rice crop likely will shrivel by at least 25 percent, and growers fear they’re losing access to critical export markets because they can’t meet obligations to customers.

While crop revenue grew last year, the profitability of farming was depressed. Farmers in much of the state had to pay considerably more for their water, said farm economist Vernon Crowder, a senior vice president at Rabobank.

“Sometimes aggregate numbers lose sight of the very real challenges that farmers are experiencing on a local level, the incredible difficulties some of them are experiencing in getting water,” said Mark Jansen, chief executive of Blue Diamond Growers, the giant almond cooperative based in Sacramento. Almond production is expected to decline slightly this year as water problems interfere with yields.

So far the drought hasn’t had huge impacts on consumers. California’s celebrated wine grapes will be relatively plentiful. Overall food prices haven’t risen much. A large part of the drop in production has occurred with crops, such as rice, where California contributes a relatively small share of the world’s supply and doesn’t have much impact on price. The crops in which California dominates world production – almonds, strawberries, many vegetables – have seen only limited declines in output.

“Consumers mostly won’t notice at all,” UC Davis farm economist Daniel Sumner said. “Your California rolls might be a nickel more expensive because the price of rice became more expensive.”


Changing consumer tastes have spurred a revolution in California agriculture that began well before the drought. In the past decade, farmers have nearly doubled the number of acres devoted to almonds and pistachios in order to meet growing global demand, taking out hundreds of thousands of acres of cotton and other lower-value commodities. With last year’s almond crop estimated at nearly $6.5 billion, almonds have overtaken wine grapes as the second-largest California farm commodity, trailing only the dairy industry.

“I grow what people want,” said Errotabere, whose operation includes 900 acres of almonds and 100 acres of pistachios.

No one’s rushing to thank him. Environmentalists and others have been pummeling farmers for taking 80 percent of the water used by people in California. (Farmers say they account for just 40 percent of the state’s supply when river water left to the environment is taken into account.) Critics have been particularly scornful of almond growers south of the San Joaquin Valley for planting comparatively thirsty permanent trees in a region where water rights are weak and the supply has been unreliable for years.

The farmers’ response: They are reacting to booming worldwide demand for almonds and using good economic sense by putting the water on a high-value crop. Farmers are continuing to plant new almond orchards.

“I don’t apologize for using water,” said Errotabere, whose family has been farming in the San Joaquin Valley since the 1920s. “We need it to grow crops. I’m a pretty good steward.”

Errotabere, 59, farms in one of the most drought-stricken regions of the state. Much of his farm sits in the giant Westlands Water District, which normally buys its water from the federal government’s vast statewide plumbing network, the Central Valley Project. Not so this year: Westlands is getting no water whatsoever from the project, for the second year in a row.

That doesn’t mean farms in the region have gone completely dry. Westlands growers expect to pump 650,000 acre-feet of groundwater this year, said the district’s general manager Tom Birmingham. An acre-foot is 326,000 gallons.

The pumping leaves no one particularly happy. Westlands still expects half its fields to lie fallow, and growers are wary about wells going dry.

“Groundwater is a finite supply,” Errotabere said, standing alongside a well irrigating a tomato patch. “We’re already taking out too much.” The Legislature enacted the state’s first groundwater regulations last year, although local agencies have another five to seven years to develop plans for implementation.

A Westlands board member, Errotabere, like many farmers in the parched San Joaquin Valley, criticized government policies that he said have resulted in too much river water being diverted for fish in recent years. To him, the situation raises troubling questions about farming’s future in California.

“Ultimately, the question is, does California want agriculture?” Errotabere said. “We’re farming in an urban state (where) the connection to agriculture over the years has drifted apart. We’re not understood.”

Even with higher prices for almonds, Errotabere said the drought has taken a toll. He used to pay $150 an acre-foot for water delivered by the Central Valley Project. Now he spends about $200 to pump water from underground, and hundreds more for whatever supplies can be scrounged on the open market.

Every acre that’s quiet, he said, represents 30 hours of lost labor, at about $12 an hour. With 1,700 acres out of production, that’s about $600,000 in lost wages.

“We’re not a big faceless company here,” he said. “This is family farming.”


The drought’s impact goes beyond the farm fields. Holt of California, a farm-equipment dealer with offices from Redding to Los Banos, reported a 30 percent drop in sales of its largest machines – the tractors and combines that sell for anywhere from $200,000 to $500,000 apiece.

“Farmers are being very careful with their capital,” said Kent Monroe, president of Holt. “I would say that’s all drought-related, with the farmers not willing to take the risk on a capital outlay.”

Standing last week in a field that normally would be under several inches of Sacramento River water but this year has been left idle, Colusa County rice grower Donald Bransford gestured toward a series of businesses that depend on farmers to raise crops.

“That seed plant employs people,” Bransford said. “That’s a storage facility; it employs people. There are some rice mills over here.”

Even commodities that had withstood the effect of drought in prior years are a source of anxiety. Last year, the tomato industry in California delivered a record crop, 14 million tons’ worth, as farmers responded to record prices offered by manufacturers of pasta sauce and other products. So far this year, prices haven’t been set and it’s unclear how big the crop will be.

“Most growers are struggling with the water issues,” said Winters farmer Bruce Rominger, chairman of the California Tomato Growers Association. “A lot of those people are out in the market, trying to buy water.”

California’s giant dairy industry, the state’s largest farm commodity, is losing its price cushion. Producers enjoyed a 24 percent jump in revenue last year, to around $9.4 billion, thanks to increased milk prices, according to a study produced by UC Davis for the industry-supported California Milk Advisory Board. The high prices helped dairy farmers cope with the drought, which drove up the cost of feed.

The situation is different this year. Annie AcMoody, director of economic analysis at Western United Dairymen, said farmers are getting squeezed because feed prices are still high but milk prices have plunged by one-third. Now in retrenchment mode, California dairy farmers have scaled back production by 3 percent compared with last year, AcMoody said.

Rice growers along the Sacramento River, whose historic water rights are strong compared with other regions of California, are using that positioning to create their own financial buffer. They’ve lost 25 percent of their federal water this year – a heavy hit, but far better than the zero water deliveries for landholders with lesser rights. Many growers have agreed to sell a portion of their remaining water, mainly to farmers in Westlands and other districts south of the San Joaquin Valley, for $665 an acre-foot.

Selling the water is probably a bit more lucrative than actually planting rice at today’s crop prices, said Bransford, who is president of the Glenn-Colusa Irrigation District.

But it also means fallowing more fields, which puts more stress on the valley’s rice industry. Production fell by 25 percent last year and probably will decline further in 2015.

One casualty is the export business, which normally consumes about 55 percent of the valley’s rice crop. The diminished output is hurting sales; so is the strength of the U.S. dollar, which makes California’s rice comparatively more expensive. Valley farmers are starting to lose business in Turkey, Jordan and certain other markets they’ve spent years cultivating, said Kirk Messick of Farmers’ Rice Cooperative, a Sacramento marketing firm owned by farmers.

Getting those customers back won’t happen overnight.

“When you lose a market, you just don’t lose it for a year,” said Tim Johnson, chief executive of the California Rice Commission. “It takes a number of years to get that market back (and) re-establish relationships.”

U.S. farm officials will consider installing a federal pricing system for California’s $7.6 billion milk industry, replacing the current state-run pricing scheme, during a public hearing beginning Sept. 22 in Clovis and expected to run for several weeks.

Because the U.S. Department of Agriculture will base any decision solely on testimony and evidence placed on the hearing record, it will include arguments and counter arguments, and an administrative law judge will oversee the proceedings.

California milk producers have struggled in recent years in a highly volatile market for their milk and sought reforms in the state pricing system. However, disputes within the dairy industry, primarily clashes between producers and dairy processors, tripped up those efforts.

That same sort of scenario is shaping up for the federal hearing.

Dairy cooperatives, mutual companies owned by producers, first proposed a federal milk marketing order. But three competing proposals have since been filed, primarily one from the Dairy Institute of California, which represents processor interests.

Annie Acmoody, an economist for Western United Dairymen, which supports the cooperative proposal, said dairy producers see the California pricing system as faulty.

“They feel the price here in California is lagging,” she said.

What they seek is somewhat higher wholesale milk price.

“Not really higher prices than in the rest of the country, but a higher price than they have now, putting them on a level playing field with the rest of the states,” Acmoody said.

Bill Schiek, an economist for the Dairy Institute, said his processors group sees no need to change pricing systems.

“We don’t feel there’s any disorderly market that needs to be addressed by a federal order,” he said.

Schiek said the institute’s proposal differs from that proposed by the dairy cooperatives in how it calculates the minimum milk price; rules for milk-pricing pools; and in handling the so-called quota, essentially a price premium for milk production in place before the state system was imposed.

“We think our proposal is more reflective of how the other orders in the U.S. operate and how they are designed to operate,” he said.

Both the state and federal systems determine minimum prices milk processors pay to producers for milk going to various uses, such as liquid milk, cheese, butter and milk powder. There are no price controls on processed dairy products at wholesale or retail levels.

The California dairy industry is the nation’s largest, accounting for 20 percent of all U.S. milk production. Milk is perennially among the leading commodities in San Joaquin County, with an estimated value of $429 million in 2013.

California dairy farmers and cheese processors faced off once again at a public hearing before the California Department of Food and Agriculture about how much producers should be compensated for whey, a byproduct of cheese production.

The department, which sets minimum milk prices paid to dairy farmers, called the hearing on its own motion, specifically to consider adjustments to the pricing formula for Class 4b, or milk used to make cheese.

Two proposals were submitted: one from the state’s three dairy producer organizations—Western United Dairymen, Milk Producers Council and California Dairy Campaign—and the other from the Dairy Institute of California, which represents processors.

During the hearing, producers renewed their call for a more “fair” pricing structure that would align the state’s 4b price closer to the Class 3 price in the federal milk marketing order. Cheese makers say setting milk prices at the level producers have proposed would force small cheese plants out of business, stifle investment in new plant capacity and reduce demand for milk while increasing supply.

In her testimony, Annie AcMoody, director of economic analysis for Western United Dairymen, said a change to the state pricing formula is needed because the gap between Class 4b and federal Class 3 is too wide, with the whey value creating the most variance between the two class prices. This growing gap impedes farmers’ ability to use risk management tools because of the unpredictability of the spread, she added.

If the producers’ proposal had been in place during the past five years, she said, the 4b price would have averaged $1.46 per hundredweight higher, while the Dairy Institute proposal would have increased that price by only 41 cents per cwt.

Even though cheese plants in federal orders can avoid paying the minimum price by depooling, AcMoody pointed out that the Class 3 price is still used as a benchmark to price milk, and California processors should also have to abide by it.

“It is widely recognized that the whey stream has generated considerable revenues for the cheese processing industry,” she said. “These revenues should be shared in the pool.”

William Schiek, an economist with the Dairy Institute, said producer advocates’ assumption that cheese plant margins “are so large that cheese makers can easily absorb and sustain big increases” in the 4b prices is “flat out wrong.”

He said most California cheese plants receive no revenue for the whey byproduct and those that do earn some revenue receive less than the value in the 4b formula, which is based on dry whey. Some small- and medium-sized plants have invested in equipment to concentrate liquid whey, which is increasingly sold to other cheese plants for finishing. But he noted most of those small and medium plants still incur a significant disposal cost for the liquid permeate that results from making liquid whey.

The Dairy Institute has proposed changing the whey scale in the 4b formula so that it is no longer based on dry whey but rather on the average of the weekly “Central and West 34 Percent Whey Protein Concentrate-Mostly” prices published by the U.S. Department of Agriculture.

Testimony from producer representatives and dairy farmers also pointed to the tough economic conditions farmers face and how that has been made worse by the drought, which has caused hay and other feed prices to soar.

Despite last year’s record-high milk prices, which have since dropped substantially, California dairies continue to close, with a loss of 26 last year, testified Lynne McBride, executive director of the California Dairy Campaign. She gave several examples of dairies that have shut their doors and the factors that led to their decision, including depressed milk prices, rising feed costs, regulatory pressures and lucrative offers from those who want to buy the dairies to grow nut crops.

“We would not continue to see so many of these dairies go out of business if our California pricing system had paid dairy producers a price that was in line with the federal milk marketing order system,” she said.

Peter Van Warmerdam, a second-generation dairy farmer in Sacramento County, also touched on the loss of dairies during his testimony, noting how land in his region is increasingly being converted to trees and vines that are more profitable than milking cows.

“You see all these grapes and almonds going in. That’s hard to see when you’re a dairy farmer,” he said, adding that his own family also diversified into winegrapes to earn extra income even though dairy farming is “what we have a passion for.”

To illustrate the economic struggles of dairy farmers during the last seven years, Rob Vandenheuvel, general manager of the Milk Producers Council, pointed to CDFA’s cost-of-production analysis for dairies in relation to the milk prices they received, showing an average loss of 77 cents per hundredweight and a cumulative loss of $1.38 million for a thousand-cow dairy producing an average of 70 pounds of milk per cow per day.

“While 2014 was a year of strong milk prices that exceeded the cost of producing that milk, in the context of the past several years, we are still an industry trying to recover,” he said.

Processors said if there were less milk supply, they would be forced to pay more for it in order to keep their plants running. But several cheese processors, including Jose Sanchez of Los Altos Food Products in Los Angeles County, testified that although dairy farms have closed, milk production has not dropped significantly, indicating a consolidation of farms.

David Ahlem of Hilmar Cheese in Merced County said this trend is not unique to California. Hilmar Cheese CEO John Jeter, who testified with Ahlem, urged CDFA to “step back” and not try to “fix things.” The focus, he said, should be increasing demand for California milk, not the regulated price for milk.

The mindset of California dairy farmers has changed, testified Tulare County dairyman Frank Mendonsa. Having endured severe financial hardships in recent years, many producers are not looking to expand, as was the trend prior to 2007. Now, with the drought, limited feed and land, and increasing market volatility, dairy farmers are even more wary about milking more cows, even during a profitable year such as 2014, he said.

CDFA has 62 days from the June 3 hearing date to make a decision. If any change results from the decision, the department has 10 days prior to the effective change to announce the plan.