Craig Cramer   "Is BGH in my future?" If cows could talk, that's a question they'd be asking. Thousands of dairy farmers are wondering the same thing. It's a troubling question for many of those farmers because of the conflicting advice they get. Critics of bovine growth hormone (also known as bovine somatotropin or BST) predict a host of ills if farmers use the production-enhancing hormone–not the least of which is even lower milk prices due to increased supplies and decreased consumer demand. Proponents–most notably the four drug companies waiting for approval to start selling BGH–maintain it's just another technological advance that will increase milk production 10 to 15 percent and make dairies more efficient.

Pasture Basics With rotational grazing, cows harvest their own high-quality feed from intensively managed pastures near milking facilities. Fencing is used to parcel out forage in small sections (called paddocks). Cows are moved to fresh forage at its nutritional peak as often as twice a day. Surplus forage is harvested for winter feed, deferred for grazing later in the season, or stockpiled in the field to early spring grazing. Less grain and fewer supplements need to be grown or bought, fed and then hauled away as manure. Fresh air and exercise help keep cows healthy. ON PASTURE Low-cost feed. Healthy cows. Less pollution. Low costs for equipment, energy and facilities. Less labor. Profitable for small and large herds. Inspires consumer confidence.

BGH Basics BGH is a hormone naturally produced by cows, that regulates lactation. When injected with nearly identical BGH synthesized by genetically engineered bacteria, cows maintain peak levels of production longer through their lactation cycle. Feed conversion is also improved if the ration is carefully balanced–usually with purchased grains. Extending this high level of performance longer through lactation under confinement feeding can stress cows, and lead to more metabolic, reproductive and other health problems, compared to pasture-based dairying. ON BGH High-cost rations. Stressed cows. Pollution potential from cropping, manure storage. High costs for equipment, energy, and facilities. Labor to inject cows, manage herd health. Risky for small farms. Consumers skeptical.

"Dairy farmers are faced with a very important choice. They're told that it's the early adopters of BGH who will benefit most, so you better get on that train early," says Dr. Bill Liebhardt, director of the University of California's Sustainable Agriculture Research and Education Program (SAREP), based at UC-Davis. "But making that choice will take a lot of them down a track they don't really want to travel.

"I feel that farmers–and consumers–should have an option to being herded like a bunch of cattle into BGH–especially those farmers who would be reluctant to use it, but feel as if they have no other choice to stay in business."

`Good Technology'
The option Liebhardt has in mind to keep dairy farmers on the right track is rotational grazing. "I've followed grazing for many years. But it's been like a poor stepchild–it just hasn't been getting enough attention," he observes. "Rotational grazing is a way to make the best use of the resources on your farm. BGH is just another off-farm purchase." To help put pastures back in the limelight, Liebhardt assembled a team of experts to compare the benefits of rotational grazing to those of BGH. The wide-ranging study –which includes grazing case studies, summaries of consumer surveys and economic analyses – is scheduled for release later this year. (See "Study Considers More Than Science," next page.)

The case studies show rotational grazing is a profitable option for herds ranging from less than 30 to more than 750 cows. Dairy farmers report benefits including:

• Production increases of up to 66 percent.
• Feed-cost savings of up to 36 percent.
• Total annual savings of up to $270 per cow.
• Lower costs for machinery, labor and energy.
• More days in milk, and higher milk protein.
• Better herd health.
• Improved quality of life for farmers.

In many cases, production increases seen when farmers switched to pasture-based dairying were equal to or greater than those expected from BGH, notes Liebhardt. Out of the 18 case studies that had good records both before and after switching, eight had milk production increases of more than 500 pounds per cow per year. For another eight, production was essentially the same–with increases or decreases of less than 500 pounds. Only two dropped by more than 500 pounds.

On average, milk production increased. But what's important is that even on the two farms where milk production dropped, lower costs made up the difference, and the farmers still think grazing is a good technology," reports Liebhardt. "Just as important, in contacting the farmers and talking to them, I found that they all seem to enjoy farming a lot more now than before they started grazing."

Big Risk, Small Profit
Unfortunately, it doesn't matter how much fun dairying is if you don't make money at it. But Liebhardt maintains that rotational grazing is a better way to increase profits than using BGH. "The two just approach profitability from opposite ends of the spectrum," he observes. "With BGH, you spend more but hope to increase production enough to cover the higher costs. With rotational grazing, you spend less to lower your cost per hundredweight, and you may still end up increasing production."

While the project's economists are fine-tuning their analyses, Liebhardt offers some simple kitchen-table arithmetic to illustrate the dilemma faced by average dairy farmers. Take, for example, a 50-cow herd averaging 15,000 pounds per cow with milk at $10 per hundredweight. Gross sales would be $75,000 per year.

Add a 13.5-percent increase in production from BGH. That would increase gross sales by $10,125. But added costs for the BGH and extra feed are estimated to be about 11 percent of the gross, leaving just a 2- to 3-percent margin. The added net would likely be in the $1,500 to $2,250 range, says Liebhardt.

"No realistic scenario with cows averaging 15,000 pounds increases profits more than $50 per cow. That's a picayune increase in profits for all the extra management. Are you going to risk alienating consumers for that kind of increase?" he asks.

Bottom-line economics change for BGH with different herd averages and milk prices. "You need to pencil-out the scenarios for yourself. But they don't look as good as you'd expect," says Liebhardt.

With grazing, the economics look a lot less risky. Case studies from New York show that even farmers who saw no production increase with grazing cut production costs by about $1 per hundredweight, reports Liebhardt. That would mean $7 ,500 added profit per year for the 50-cow herd averaging 15,000 pounds. Case-study dairies that substantially increased production reduced costs by $2 to $3 per hundredweight.

"Dairy farmers like to see a $2 return on each dollar they invest," observes Liebhardt. "You'll have a hard time getting that with BGH, while with grazing the returns are usually in the $3.50- to $4-range."

The economic risks of BGH could be even greater for smaller dairies, notes Dr. Richard Plant, an agronomist and statistician at UC-Davis who is contributing to the study. "The data we have from industry trials show a wide variability in response to BGH," he says. If that variability is really due to how individual cows respond to BGH, then the larger your herd, the more likely it is that your increase in production will be within the predicted 10- to 15-percent average, says Plant.

With smaller herds, overall production gains would likely be more variable and your chances of falling outside that range would be greater. "If the break-even response is 10 percent and the average response of individual cows is 13 percent, then the smaller your herd the more likely it is that your actual increase will fall below the 10-percent breakeven," he concludes.

Part of the problem is that not enough industry data has been released to the public so researchers can accurately predict that variability, says Plant. With what we have, it's hard to tell what's biological reality and what's statistical artifact."

Economics 'Consumer-Driven'
But even these farm-level analyses may be moot. That's because–like many industry studies–they don't take into account the effects of consumer demand on milk prices, says Dr. Gail Feenstra, a nutrition education specialist and writer on SAREP's staff.

Feenstra analyzed studies of consumer attitudes about BGH for the report. Those studies consistently show that consumers are leery of milk produced with BGH. In one study, 84 percent said they would not purchase BGH milk even if it were cheaper, and 44 percent said they would pay more for milk produced without BGH. Surveys also show that consumers with children under 18–the big milk drinkers–express the most concern about BGH.

"The industry's attitude has been that consumer concerns can be alleviated with educational programs," says Feenstra. "But to me these figures indicate the possibility that milk consumption will decline if farmers use BGH.

"As a farmer, it's risky adopting this technology knowing there are strong consumer concerns. The economics of BGH are going to be consumer-driven," predicts Feenstra.

The surveys counter the argument that BGH would lead to greater consumption by reducing retail milk prices, reports Feenstra. A Virginia study predicts a 14-percent decrease in consumption with BGH use if retail prices stay the same. If prices decrease 40 cents per gallon, consumers still said they would decrease purchases by 9 percent. A New York survey shows a 19.4-percent drop in consumption, even with the 40-cent price break.

Whether or not it is scientifically valid, concern about the human health effects of BGH residues in milk is what worries consumers most, says Feenstra. But that's not all. Consumers also expressed concern about the economic effects of BGH on dairy farmers, the welfare of the cows and the ethics of manipulating fundamental life processes through biotechnology.

"It's also interesting to note who consumers trust for information," says Feenstra. High on the list were family doctors (61 percent rated them trustworthy), consumer publications (53 percent) and nutritionists (48 percent). Consumer spokespeople (36 percent) beat out university scientists (33 percent) and the Dairy Board (31 percent). Drug companies fell last (15 percent).

Surveys consistently showed consumers want BGH milk labeled, says Feenstra, noting that 77 to 95 percent expressed that preference. "If the FDA doesn't listen and doesn't label BGH milk, the dairies may fill the niche and label non-BGH milk."

Deathblow To Dairies
A 14-percent decrease in milk consumption "would be the deathblow to family-sized dairy farms," says Tim Atwater, co-director of Rural Vermont, a nonprofit farm and rural advocacy group based in Montpelier. The current 2- to 3-percent surplus has triggered a 33-percent drop in prices paid to producers, bringing them to an all-time low when adjusted for inflation, he notes.

Atwater, with help from land grant economists, is looking at how BGH- induced changes in the market could affect dairy farmers. He conservatively calculates that a 10-percent decrease in demand, coupled with a slight increase in supply, would reduce prices by at least $1 to $1.50 per hundredweight. That would cost the average million- pound-a-year Vermont dairy more than $10,000.

"The effect would be devastating. Even the largest, best-managed dairies –where BGH might work oil the farm level– would lose money when you figure in the price drop, " he says.

For those who doubt that demand will drop if farmers use BGH, Atwater points to the antibiotic-residue scare in '89. Then, milk consumption fell 20 to 25 percent for several days in Washington and New York. "That was a one-shot deal. If there is an ongoing consumer campaign against BGH–and you can bet there will be– it's not unreasonable to expect a long-term decline," he says.

Dr. Bees Butler, a dairy market economist at UC-Davis, is also trying to compare the effects of BGH and grazing at both the farm and industry levels. "It's an exciting but difficult exercise," he says. "The results just don't come out very neatly."

Butler assumes lower costs for grazing, but also lower production. That's been his experience managing a dairy farm in New Zealand, where feeding supplemental grains is almost unheard of. With those assumptions, the farm-level economics look almost the same for grazing as for BGH use, according to his preliminary calculations.

On the other hand, if you assume production increases comparable to some of those shown in the case studies, rotational grazing has a big advantage. "But I can't believe the margins could be that wide," says Butler. "If they were, we wouldn't need to study it. The higher profits would drive the switch to rotational grazing. There must be some other barrier keeping farmers from doing it–perhaps the dramatic changes involved."

Less Labor, Stress
Could a combination of BGH and pasture-based dairying give farmers the best of both technologies? "Probably not," says Dr. Bill Murphy, a grazing expert from the University of Vermont (UV). "It's already difficult to balance rations for high-producing cows on pasture. Until we can do that, BGH won't do much good."

Murphy, along with Dr. John Kunkel, a veterinarian at UV, contributed to the study a comparison of confinement feeding vs. rotational grazing. They cite scientific research that supports many pasture advantages noted by farmers in the case studies, including:

• Feed costs reduced by as much as 83 percent.
• Reduced incidence of mastitis, lameness and metabolic diseases such as parturient paresis, ketosis, displaced abomasum and laminitis.
• Improved heat detection and reproductive performance.
• Lower costs for equipment and facilities.
• Less soil erosion and water pollution from pesticides, fertilizers and manure.

In many cases, says Murphy, milk production also increases. And when cows harvest their own feed and spread their own manure much of the year, labor needs are reduced. "The intent of year-round confinement feeding ostensibly was to reduce labor. But the result has actually been the opposite," he reports.

"The quality of life for dairy farmers has to be improved," he continues. "You can't keep running from dawn to dusk just trying to pay off debts. There's already too much stress, and very few young people want to come in. BGH isn't going to help that. It's going to contribute even more to that stress. "

For Liebhardt, the choice is clear: The future of dairying, especially for family-scale operations, lies in green pastures– not hormone-enhanced production. "Some of the farmers I've talked with say they wouldn't be farming today if it weren't for grazing. They feel this is the only way they can compete with the larger confinement dairy down the road."

Liebhardt hopes this study will spurt support for research and Extension programs to help more farmers get the most from grazing technology. But he admits, it won't be easy.

"If you're against BGH, you're portrayed as anti-science, anti-technology, and anti-progress," he says. "But I always have to ask, 'Who is the progress for? Who will ultimately benefit from the research?'

"Farmers, consumers and society are looking for appropriate technologies. Grazing isn't right for every farm. But it will work for more dairies than BGH will."