The Countdown to 400,000

Compliance required by Aug. 1

If you’ve been confused by the deadlines for meeting the European Union’s certification requirements for dairy exports, you are not alone. Even today, documents on USDA’s website indicate that if a farm’s three-month somatic cell count (SCC) average is above 400,000 cells/ml, the farm will not be able to ship milk that is used in export products on May 1.

The reality, according to Ken Vorgert, chief of USDA’s Dairy Grading Branch, is that the clock starts ticking on April 30. That’s the date by which dairy processors must notify USDA which farms are above 400,000 cells/ml.

January, February and March of 2012 will be used to establish a farm’s rolling three-month average. If a farm’s three-month SCC average is above 400,000 cells/ml, the farm’s milk buyer must report that fact to USDA in April.

To be out of compliance, and thus ineligible to sell milk for export, a farm’s rolling three-month average must be above 400,000 for the month of notification, April, and three more consecutive months—May, June and July. "It’s only if the three-month rolling average is above 400,000 for four months that it becomes an issue," Vorgert says.

If a farm’s average cell count drops below 400,000, the clock is restarted. However, the farm’s rolling mean continues to roll forward. If the rolling mean exceeds 400,000, USDA must again be notified and the farm then has the month of notification plus three more consecutive months to bring it back down.

The standard for fluid Grade A milk within the U.S. remains at 750,000 cells/ml. Grade B milk going into cheese sold domestically also has a 750,000 cells/ml limit.

In the past, processors who exported dairy products to Europe merely had to certify that their silos and commingled tanker loads of milk from multiple farms met the 400,000 SCC limit. Now, as in Europe, individual farms must meet the standard.

In effect, however, the 400,000 SCC level will become the new national standard. That’s because milk is processed into ingredients which then go into various dairy and other food products.

Once those ingredients enter the marketing stream, there is no way to differentiate between products made from high-SCC milk and those made from low-SCC milk. In order to comply, all milk will essentially have to meet the standard unless a producer can find a local processor who will accept the milk or can obtain a temporary exemption.

It’s anyone’s guess as to how many farms won’t be able to meet the new export requirements. "It could be as many as 5,000 farms nationally, or roughly 10%," Vorgert says. "I’m being told that a lot of people are making an effort to come into compliance. But we will not get to zero for a while."

If there is any agreement, it’s that the volume of milk will be much less than the percentage of noncompliant milk volume.

A study completed by two USDA agencies last year suggests that 15% to 18% of herds that ship milk into four of the 10 Federal Milk Marketing Orders and 7% to 8% of Dairy Herd Improvement (DHI) herds nationally would not have met the 400,000 SCC standard in 2010.

The herds that would have struggled to meet the requirement tend to be smaller. The volume of milk ranged from 6% to 8% of Federal Orders milk to about 3% of DHI milk.

"We have seen a decrease in our somatic cell count coooperative-wide in the past year," says Sarah Schmidt, communications director for Associated Milk Producers Inc. "We won’t know how many of our members will be unable to meet the new standard until later this spring and summer, but we don’t anticipate it will be very many," she adds.

"We haven’t spent a lot of time slicing and dicing farm compliance statistics yet," adds Jim Carroll, vice president of quality assurance and regulatory affairs for Dairy Farmers of America.
Although Carroll does not expect a substantial number of members to exceed the compliance level, of those who could, he says, "we have a significant number of farms between 400,000 and 500,000. But with the three-month rolling average and how it’s calculated, it will not take significant changes on many of these farms to get below 400,000."

Another national cooperative confirms that 10% of its Midwest herds are above a 400,000 cell count average. But that’s a significant improvement over just a year ago, with most of those herds now between 400,000 and 500,000. It’s mostly smaller herds, those that ship less than 100,000 lb. per month, that are in jeopardy. Two thirds of this co-op’s herds are below 300,000, and 40% are below 200,000.

Milk quality specialists within these cooperatives expect more farms to come into compliance as the deadline approaches. "With cull prices as high as they are, farmers will cull their chronic cows, replace them with heifers and not miss a beat," says one specialist. "Farmers still have time to push counts down."

A bigger issue for some of the larger cooperatives and processors is simply tracking where the milk is coming from. Each processing plant will be required to document that the milk it receives comes from farms that meet the EU certification standards. When loads are pooled and shared among co-ops and proprietary plants, it becomes more challenging to tell which farm’s milk is
going to which plant.

Exemption Qualifications

USDA will allow farms to apply for one of two temporary exemptions, called "derogations," to the 400,000 SCC standard.

An annual derogation can be applied for if the farm is not meeting the 400,000 SCC average but is making progress toward that standard, says Ken Vorgert, chief of USDA’s Dairy Grading Branch. As long as the farm is making progress, USDA will likely renew the derogation for a second year.

The second type of derogation will be for seasonal problems. Here, farms must be in compliance for nine months of the year and have a consistent history of problems due to seasonality for the other three months. Seasonal derogations will have to be renewed every three years.

USDA will bill processors $136 per application. Some processors, but not all, could pass that cost plus their own administrative costs on to farms. So some farms could be looking at a total cost of $200 to $300 per derogation application.