Archive for Dairy Industry

Iceland is 2018 CMS Cow of the Year!

The Canadian Milking Shorthorn Society is happy to announce that reigning National Show Grand Champion Richford Ironman Iceland is the 2018 Canadian Cow of the Year.  Iceland is bred and owned by Don and Karen Richardson and family of Richford Farms, St. Mary’s, Ontario.

Iceland has come to notoriety as the the two time Grand Champion at the 2016 and 2017 National Shows. She classified Very Good in first lactation, rescoring 88 points in second lactation. She is also the #45 LPI cow in Canada, building a strong index with breed-leading type as well as above average fat and protein production. Her VG-85 dam by POD was bred by Jenna Kippen, descending from the “Irma” cow family from Shady Brae Farms and originally from Ridgeway Irma EX-7E . Iceland has been flushed this lactation, with embryos sold within Canada.

The other two nominees for Cow of the Year were Oceanbrae Pingerly Betty, owned by Oceanbrae Farms of Miscouche, Prince Edward Island, and Prinsville Pingerly Star, owned by Prinsville Dairy Farms of Bloomfield, Ontario.

The CMSS Cow of the Year is selected by votes by Society members.  Iceland was recognized as Cow of the Year at the 2018 CMSS Field Day and AGM on July 28th, hosted by the Ashton Family in Port Perry, Ontario.


SourceCanadian Milking Shorthorn Society

Multi-million dollar investment in Australian dairy for new player

A QUEENSLAND agricultural company has partnered with a Smithton couple for a multi-million investment in eight dairy farms in the state’s far North-West.

Tim McGavin, who runs the privately owned Laguna Bay Pastoral Company, said the farm purchases had been finalised and the operation was now milking 6500 cows with a target of 10,000 cows.

Mr McGavin said through the Laguna Bay Agricultural Fund 1 the company had entered into a joint venture with Ashley and Cherrylyn Ker to acquire, run and develop the dairies in the dairy heartland of Circular Head. The dairy farms are within a 15km radius of each other.

The dairying business, named 40 South Dairies, will focus on grass-based production with reliable pasture growth and access to surface and bore water for irrigation.

“The state’s dairies are low- cost producers,” Mr McGavin said.

All up, the Laguna fund’s dairy holding in Tasmania spans more than 4000ha.

“We love Tasmania as a place for investment, because it almost has its owned quarantined clean brand.”

Mr McGavin said Laguna Bay Pastoral Company would look for other opportunities to invest in Tasmanian agriculture, whether in horticulture, wineries or beef.

“We’d love to do more investment in Tasmania. We could invest in any agricultural sector.”

Funding for the Circular Head dairy investment was sourced from a pool of North American pension-investment funds.

“We selected the investors that partnered with our aims,” Mr McGavin said.

He said there would be job opportunities in the local area with the expansion.

He said the amount of milk produced would give the business better bargaining power with milk prices.

“We have a unique business module, we get the right structures in place to work with the right operators.

“We’re empowering young farmers and if they have the energy and the skills then we’ll set up an incentive structure for them.”

Mr McGavin said the Tasmanian investment had been challenging to bed down because of “populist politics” and new marketing rules by the Foreign Investment Review Board.


Heartbroken Australian dairy farmer’s message to supporters

Dairy Farmer Shane Hickey says he gets paid $2.46 an hour.Source:Facebook

A heartbroken farmer hoping for change in the dairy industry has pleaded with Australia supermarkets to pay him more for his milk.

Shane Hickey, 42, from Kyogle in the Northern Rivers region of NSW, posted a selfie-style video to Facebook from his drought-savaged farm, explaining how he’d just received a cheque for the month of July.

“I’m a proud dairy farmer … I work very hard,” he says to the camera.

“But I’d like to say that I worked this month [July] and we just got paid in August for a whole month.

“I worked for $2.46 an hour. Something has got to change. You can’t keep this sh*t up.

“People can’t expect farmers to continually work for nothing. That’s basically slavery.”

In the video, the father-of-three calls out Coles, Woolworths, Aldi and IGA as the problem behind the minuscule amount of money he receives each month.

“Coles and Woolies keep selling milk and cheese and keep screwing the arse off us all,” he says.

“If the drought keeps up, I don’t know where they are going to get it from. It’s not coming from here. Our production is down 50 per cent to this time last year and our water is disappearing quickly.”

Supermarkets are usually cast as the villains when it comes to the cost of milk, and how much dairy farmers are getting paid.

And while the video has received more than 1 million views and thousands of comments slamming Australian supermarkets, the Australian Competition & Consumer Com­mission (ACCC) says they are not to blame.

Instead, the focus should be put on the processors who deal directly with the farmers.

But Mr Hickey, who has said he will have nothing left from his pay cheque once the bills and mortgage are paid, said the problem is both supermarkets and processors refusing to come to a solution that supports the farmers.

“The processors and the supermarkets need to get together, but they don’t,” Mr Hickey told “They are all like a pack of three-year-olds fighting over a $2 toy.

“You talk to supermarkets, and they blame the processors, you ask the processor and they say it’s Coles and Woolies.

“I don’t want to fix prices for customers. I’m not asking for that. Farmers just want an award. Everyone else in Australia is guaranteed an award wage, but as farmers we are left to pick up the dregs. We have no protection. We are at the bottom of the barrel. We work and work, and once we get our pay cheque it’s a mystery bag most of the time on what we will get.

“Farmers are getting to a point where they’ve been squeezed so much there is nothing left.”

In May, an inquiry showed that cheap milk at the checkout is not to blame for the dairy industry crisis, or the amount paid to farmers.

“We don’t think that an increase in the retail price of private label milk [supermarket own brand milk] would necessarily benefit farmers, and that any additional profit would mainly be captured by the major supermarkets and processors,” ACCC commissioner Mick Keogh said when the inquiry findings were handed down.

The findings noted that farmgate prices (the amount farmers receive from processors) were “quarantined” from other costs which affect prices earned by supermarkets and the margins earned by processors for cheap label milk.

“Supermarkets have leveraged their buying power to drive wholesale prices down and reduce the profit margins of processors,” the report said. “This has particularly been the case with private label drinking milk. Supermarkets have used some of these wholesale cost savings to reduce real retail prices for Australian consumers.

“Processors earn higher gross margins on branded products than private label products. Branded product margins are a key driver of processors’ overall profitability.

“Increases and decreases in processors’ and retailers’ margins on private label drinking milk have not had any observable impact on farmgate prices, or trends in farm profitability and farm exits.

“The processors set a farmgate price only as high as they need to in order to acquire the volume of raw milk production that meets demand.”

The ACCC instead blamed farmgate prices on farmers’ “weak bargaining position with processors”, recommending a mandatory code to address the large imbalance in bargaining power between farmers and processors.

But Mr Hickey said the “mandatory code” would do nothing for the men and women working the land.

“It will treat us fairly but not pay us any more,” he said.

“It’s pie in the sky stuff. It won’t resolve the main issue of farmers being underpaid. In Canada, a farmer gets 20 per cent more than what we do, and retail their milk for 5 per cent cheaper.

“We get a pay cheque and you don’t know what you’re going to get. It’s a mystery bag most of the time because we don’t get paid a set amount.”

Cheap milk has been a source of controversy since its introduction, with many dairy farmers believing it “denigrates all the effort they put into producing milk”.

Last year, widespread media coverage of struggling dairy farmers led to a boycott of cheap supermarket milkin favour of more expensive branded alternatives.

Last month, Australia’s largest dairy processor, Saputo, came out in support of a mandatory code of conduct for the dairy industry and called for milk price step-downs to be illegal.

“I’d like to see it implemented by the industry players, whether that’s suppliers or processors, through ADIC or other associations,” chief executive and chairman Lino Saputo Jr said at a press conference, as reported by the ABC.

“Our suppliers are telling us this is something they want to have in place.

“The only thing I’m concerned about is the implementation; how onerous will it be in terms of the cost structure. As long as it’s a system that doesn’t cost too much to organise and implement, we’re 100 per cent in agreement with this code being mandatory.”

Speaking to the ABC, president of the lobby group Dairy Connect, Graham Forbes, said the move should spur other processors to do the same.

“It’s just great that we’ve got the largest processor in the country supporting the mandatory code,” he said.

“The recommendations by the ACCC aren’t onerous and I don’t think they’re going to put a huge cost burden at all on the industry.

“We’re just after a level playing field, things like we’re going to have collective bargaining, the ability to negotiate our supply agreements, and be able to have arbitration within those supply agreements and not be locked in indefinitely out of the marketplace.”

A recent survey of 800 farmers from around Australia, looking at farmer confidence, showed less than half of those surveyed remained confident about the industry’s future. The statistic was down from 75 per cent just four years ago.

Gary Kerr from the lobby group Farmer Power said in an interview with the ABC’s 7.30that the lack in confidence was primarily due to the behaviour of milk processors. A change in the mandatory code of conduct would mean a farmer could change processor if they wanted, without any penalties “if those processors aren’t offering a decent price”.

U.S. dairy exports will be critical in next decade

DAIRY EXPORTS: According to Marin Bozik, U.S. dairy exports total $5 billion per year, which is about 15% of U.S. milk production.

Exporting surplus U.S. dairy products is essential to milk prices, Marin Bozik told a group of 250 Midwest dairy farmers and agriculturists, but he acknowledged that dealing with the consequences of a trade war isn’t easy.

“When you go to a fight, you know that there will be casualties. We are the casualties,” Bozik said. “It’s very gutsy to go into a trade war in an election year.”

Bozik, associate professor of dairy foods marketing economics at University of Minnesota, spoke at the inaugural Dairy Experience Forum July 26 in Bloomington, Minn., about dairy trade, policy issues and demand opportunities. In addition to being associate director of the Midwest Dairy Foods Research Center, Bozik is one of eight faculty members of the National Program for Dairy Markets and Policy.

Bozik told the audience U.S. trade competitors are aggressively fighting for market share.

“We are not. We are renegotiating free-trade agreements with Mexico, Canada and South Korea, and fighting a trade war,” he said. “Our competitors are signing free-trade agreements, and we are not.”

Bozik acknowledged that exports are risky, “but we don’t have a milk supply management program, so there is no alternative,” he said.

The dairy economist said exports are critical to U.S. milk prices. “In 2009, we were exporting 16% of our milk, and by the end of 2009, exports dropped to only 11% — and we all know what happened to milk prices.”

By the numbers
Over the past decade, exports have been absorbing most of the growth in U.S. milk production. From 2007 through 2014, the U.S. exported 79% of domestic dairy increase.

What do dairy exports mean for U.S. farmers over the next 10 years?

According to Bozik, U.S. dairy exports total $5 billion per year, which is about 15% of U.S. milk production.

“Dairy exports represent a proverbial drop in the bucket compared to total ag exports,” he explained. “U.S. ag exports total $161 billion per year. While ag imports are also growing, we export far more ag products than we import.”

So how much do U.S. dairy farmers need to export in the next 10 years?

Bozik figures there are 9.4 million cows in the U.S., which has stayed about the same since 2000. The average cow in the U.S. produces 23,000 pounds of milk. He projects that with cows producing on average 1.2% more milk than the previous year, the U.S. dairy herd will produce 2.16 billion pounds more milk this year than last year. In 2016, each person in the U.S. consumed 550 pounds of fluid milk equivalent.

“There is no upward trend in milk consumption,” he noted. “While we are consuming more cheese, fluid milk consumption is declining. I’m going to assume demand for milk is going to be flat in the U.S. for the next decade.”

But the news isn’t all bad. Bozik said consumption of milkfat is rising in the U.S.

“Milkfat consumption has been growing in the last few years,” he said. “People are drinking whole milk and eating butter and full-fat yogurt. The average person consumes 640 pounds of milkfat per year. We don’t really have to export any butter. We can sell it all domestically.”

Overall, Bozik figures the U.S. will need to export 13.4 billion pounds of milk, or 44% of the domestic dairy increase, each of the next 10 years. “It’s a considerable amount,” he said.

As a result, Bozik believes there will be a lot of pressure on medium-size dairy farms in the next decade.

“The 2018 Farm Bill will offer substantial protection for dairy farmers milking 300 cows or less,” he said.

“But medium-size farms, with between 500 and 2,000 cows, will be under considerable pressure. Large dairies with 2,000 cows or more will be fine due to advantages of size and scale.”



Dairy products will be more expensive in the UK after Brexit

Britain imports a lot of dairy produce, nearly all of it from the EU, while at home, the industry employs a large number of workers from the rest of the EU.

Jan Bakker and Nikhil Datta predict that dairy will become more expensive after Brexit. Even if Britons switch to UK-produced dairy, it will take some years for domestic herds to meet demand.

While there still is large uncertainty about the new trading regime between the EU and the UK, businesses on both sides of the channel are trying to prepare for the new trading environment and the wider implications of the government’s Brexit policy. The extent to which different industries are affected by these policy changes varies widely, depending on the intensity with which they are trading with the EU and how much they will be affected by rising trade costs such as regulatory divergence.

In a recent report for LSE Consulting, we study the effect of Brexit on the UK dairy industry along three key dimensions: increasing trade costs, changes in the labour market and changes in final demand.

The UK relies heavily on imports to satisfy consumer demand for dairy products. It has a net dairy trade deficit of more than £1.5 billion, the second largest in the world (China has the biggest). Additionally, 98% of the UK’s dairy imports come from the EU. Thus, any changes in trade costs between the UK and EU will have important effects on the UK consumer as the price of imported goods will increase.

Brexit will invariably result in an increase in trade costs for UK-EU trade; however, there is significant uncertainty surrounding the size of this rise. Studies attempting to project the economic impact of Brexit often assume trade cost increases to be constant across sectors. We take a closer look at different components of post-Brexit trade costs which are likely to be specifically important for the dairy industry, such as customs declarations, rules of origin costs (RoO), animal and food-specific regulations, and imposed check times and port traffic.

Assuming the UK does not have a customs agreement with the EU once it leaves, UK-EU trade will require customs declarations, as is required for UK trade with the rest of the world. Customs declarations are usually made by companies using either an internal digital system or through logistics providers. Fees by providers can go beyond £25 per sea container and this provides a useful benchmark for the involved administrative cost. The ability to easily create customs declarations will rely on the smooth functioning of the Customs Declaration Service (CDS). This new system was designed prior to the Brexit vote and as it stands will only be capable of handling up to 150 million custom declarations a year once active, much less than the 250 million declarations a year the HMRC estimates post-Brexit. Expecting the CDS to run at over 160% capacity could lead to an unstable system which may result in additional waiting times. This compounded with the fact that approximately 130,000 new traders will be required to fill out declarations for the first time, make the prospect of a lack of customs arrangement a concern.

As long as the UK is a member of the European Union, goods can move seamlessly through UK ports, going to or coming from the EU. Outside of the Customs Union this will no longer be the case and customs inspection will take place, which will add to waiting times at border points. Recent research from Imperial College London has estimated the impact of vehicle checks onto the peak-time traffic queue. Using their results, we calculate that an extra seven minutes of check times per vehicle at Dover would imply at least £111 per container increase in transportation labour costs alone at the current wage rate. When one considers the loss of perishable goods, lorry maintenance and general equilibrium effects (all importers and exporters will require more HGV driver time, pushing up wages) this will likely increase. Currently the average check time at the border for goods traded with non-EU countries stands at 20 minutes.

Without a customs arrangement, the dairy sector will be particularly affected by potential border checks as its products are classified as products of animal origin (POAO) which undergo additional controls at border checkpoints. For example, veterinary control checks incur costs of £50.60 per 6 tonne consignment and an additional cost of £45 per consignment for organic certification. The British Veterinary Association has estimated that there will be a 325% increase in the demand for vet checks at the border and importantly, almost half of the newly registered vets in 2016 were non-UK EU graduates. The latter of these two issues points to some first signs of exposure of the dairy industry to migration restrictions. These two forces, increasing labour demand and reducing supply, will invariably result in either increased vet check prices, or, as all POAO shipment must go through these checks, longer waiting times at the border.

Overall, any trade regime that does not involve truly frictionless trade, such as a customs union, is likely to result in increasing prices for dairy products in the short-run. In the long run, these price increases might lead to an expansion of the local dairy industry. However, the time lag is likely to be significant as increasing the size of livestock herds through reproduction can take a number of years. Furthermore, it will involve risky investment on behalf of farmers who face great uncertainty about what the relationship with the EU will be following Brexit day. The expansion of the local dairy industry will also not be able to make up for the loss of variety that makes up a crucial part of the gains from trade. The dairy industry serves as a perfect example for this, as there are certain varieties that must be imported and cannot be produced domestically, such as Danish blue cheese or French brie.

As hinted at above, Brexit will also affect the UK dairy industry through its impact on the labour market. Currently migrants from the EU, and especially the new member states, are an important part of the workforce in the agricultural industry. This is especially the case in food and drink manufacturing where 30% of the workforce are originally from the EU, compared to 6% of overall employment. Despite this reliance on migration, we find that on average the dairy sector is unlikely to experience upward wage pressure in the aggregate. The upward wage pressure from reduced migration is likely to be outweighed by reductions in labour demand due to reduced growth in economic activity due to Brexit, as projected by the Centre for Economic Performance, the National Institute for Economic Research and others.

Nevertheless, more than one third of businesses in the food and drink industry indicated that their business would become unviable if they lost access to (non-UK) EU nationals, indicating that there is likely to be upward pressure on wages and labour shortages for certain occupations. As well as vets, we find HGV drivers is an important exposed occupation for the dairy industry. Labour force data suggests HGV drivers already experienced a rise in nominal wages of around 10% since the referendum. This is in line with reports from industry insiders indicating difficulties in hiring lorry drivers as the sterling depreciation reduced European driver’s real wages in their home currency.

Overall, we find that in the absence of frictionless trade and appropriate government policy to address skill shortages, Brexit is likely to have a negative effect on consumers through higher prices for dairy products. This pinch will be exacerbated by the fact that Brexit-related inflationary pressures and uncertainty have already cost the average household approximately £1,270 – and projections suggest that post-Brexit, increasing trade costs could result in further losses.


Hard times, but the future’s rosy, says new Dairy Australia chief

The number one issue the Dairy Australia board wanted to know from its incoming managing director was how he would tackle the industry’s confidence battles.

David Nation took over from Ian Halliday — who spent nine years in the role — at the end of last month.

Dr Nation had previously held lead roles at the DairyCRC, which then became DairyBio, and is well known in the industry for his work with technology and communicating with farmers.

Dr Nation said his response to the board’s question was to focus on what Australian dairy does well. While focusing on the positives, he did not shy away from what he said were challenges, in the past two years especially, and he also spent a lot of time outlining how the research development and extension organisation would tackle the national feed shortage this season.

Among the positives, Dr Nation emphasised the lower price of land and viable markets both internationally and domestically as well the “secure” agreement between the industry and government for funding of Dairy Australia. He said farmers around the world would love to have a Dairy Australia, where farmer levy money was matched by government.

“In most countries dairy farmers might put their own money together and then have to always go cap in hand to government for this and that,” he said. “To have this secure environment … is absolutely desired by most other dairy industries all around the world.”

With global dairy experience, Dr Nation hopes to bring perspective to Australian dairy.

“I’ve lived and worked in dairy industry for more than 20 years and I’m enormously proud of what the dairy industry collectively has achieved and I represent that now as managing director of (Dairy Australia),” he said.

“And one of my greatest frustrations as someone who is passionate about the dairy industry and loves to watch it succeed is that the industry is often its own worst enemy at losing perspective.”

He said this perspective became lost because “there’s so much happening on a dairy farm every day and it’s a tiring job”.

He also pointed the finger at $1 a litre house brand milk which he said was “driving negative sentiment”.

“The last two years have been hard,” he said.

“I don’t have any problem with anyone who is dairy farming saying it has been a hard two years and it is really hard for me to keep my perspective about what is positive about the dairy industry, that’s entirely reasonable. “

Australian consumers moved away from buying $1 a litre milk during the “dairy crisis” two years ago, but there has been a slow move back towards the cheap milk.

Dr Nation said those sales trends were “hard to sustain” but “when the general population thought dairy was struggling it wanted to do something to help”.

He said this house-brand milk delivered a “personal hurt” to dairy farmers.

“Do retailers value our product highly enough and through the way they price the product, make farmers feel good about all the effort to produce a litre of milk? Clearly not when they sell milk for a $1 a litre,” he said.

“You can argue whether there is an economic hurt to this, there is a personal hurt to dairy farmers. Dairy farmers have every reason to say “I don’t think that is fair”.

“It’s things like that which cause negative sentiment in the dairy industry, but again my challenge is to say despite how the supermarkets have priced their milk, which is actually out of your control and my control, if you are travelling the world with round-the-world ticket and your job was to become a dairy farmer somewhere, I still reckon it is a pretty smart bet to become an Australian dairy farmer.”

A $10 per cow per year improvement to more than $20/cow return for genetic progress is something Dr Nation refers to as a strength of the industry — a “success story”. New pasture varieties where described as “game changers”.

With escalating grain, fodder and irrigation water prices, Dr Nation said helping farmers manage through the coming season was a Dairy Australia priority. He recommended farmers look to their local regional development program for advice.

“For the first instance our recommendation is for farmers to talk about it in discussion groups,” he said. “We’ve seen in past years, there’s danger in overreacting and culling stock early and farmers regretting it.”

Dairy Australia had a “conservative” estimate of 1 per cent milk volume increase for this coming year, but Dr Nation said it is too early to determine what the coming season would bring.

Farm business management programs such as Taking Stock will be rolled out in NSW and East Gippsland as dry conditions bite. Queensland started with this program earlier.

The dairy industry narrative has concentrated on profit rather than productivity in the past few years. This approach has helped farmers tackle tough seasonal conditions and volatile markets, Dr Nation said. But he wants to move away from talk about financial literacy and rather discuss business plans.

“I think most people if you ask them have a plan, of course, how much is in their head and how much is in a form that we can understand and work out how to better assist are two different things,” he said.

“I’d never accuse any dairy farmer of not having a plan. The question I have of dairy farmers is what you have with your plan. Is it something that you can ask anyone else to help you, even within your own family an RDP or anyone else? That is the ultimate question really.”

Source: The Weekly Times

Dairy farmers across the United States are struggling

Dairy farms across America have been struggling recently to keep their barn doors open. Recent studies show that the number of dairy cows has decreased by 20 percent over the last five years. But why is that the case?

“Well there’s a number of contributing factors,” Dairy Farmer Ed McBroom told TV6. “We’ve got bad government policy in regards to dairy pricing, there’s a lot of pressure on foreign markets and what’s going on with the value of the dollar. Then there’s just the general cost of doing business has gone up, whether it’s for fuel or for equipment.”

Another reason being that there is decrease in demand in dairy products, but local farmers say that’s not necessarily the case in the U.P.

“As far as consumption goes for dairy products in the Upper Peninsula, it’s still solid. People are enjoying their cheese, their milk, their ice cream,” McBroom added. “I encourage people to continue to enjoy those products and buy local when you can.”

Buying local can be more difficult than you’d think with more U.P. stores going out of state for their products.

“A number of the big retailers, like Meijer and others, are bringing milk up from Indiana and are no longer utilizing milk that’s produced locally,” McBroom said. “Now it’s still a good quality product, but it is changing the dynamic significantly up here.”

McBroom says places like Jilberts, Debackers and Sargentos are all places that do use local dairy from the U.P.


High BPI cows contribute more to dairy businesses

With DataGene’s latest release of Australian Breeding Values (ABVs) out this week (13 August), dairy farmers have one more good reason – worth about $300 per cow – to focus on Balanced Performance Index (BPI) when selecting bulls.

The BPI is a blend of ABVs for the traits that influence a dairy cow’s contribution to the farm business: production, fertility, functional type, survival, cell count, workability and feed saved.

In a major study, the ImProving Herds project used actual data from commercial dairy herds to determine contribution of genetics to dairy farm businesses. The results showed that on average, the top 25% of cows in a herd (based on BPI) produce a margin over feed and herd costs of $300 per cow more than the bottom 25%.

Michelle Axford from DataGene said the findings held across different dairying regions and feeding systems.

“The message is clear: the daughters of high BPI bulls perform better under Australian conditions,” she said.

“A simple and effective way to put this into practice is to breed replacements from bulls that carry the Good Bulls logo and meet your breeding priorities.

“You can be confident that using Good Bulls will improve the Balanced Performance Index of your herd,” she said.

Bulls that carry the Good Bulls logo meet DataGene’s minimum criteria for BPI and reliability and are available for purchase.

“There is a wide range of Good Bulls, giving farmers plenty of choice for Good Bulls that meet their priorities for specific traits, budget and company preferences,” she said.

The August ABV release includes 1039 Holstein Good Bulls, 134 Jersey Good Bulls and a selection of Red Breed and Guernsey Good Bulls.

Lists of Good Bulls are available in the Good Bulls App (available from Google Play or the App Store) or the Good Bulls Guide which is available in pdf or excel format from DataGene’s website. 

Visit for the latest ABV results and more information about results from the ImProving Herds project.

DataGene is an initiative of Dairy Australia and the herd improvement industry.


USDA Purchases Milk to Help Combat Hunger

The U.S. Department of Agriculture (USDA) announced it will purchase, for the first time ever, $50 million in pasteurized fluid milk to benefit Americans in need who do not have regular access to milk. The milk will be distributed through food assistance programs and food banks, such as those under Feeding America – the nation’s largest domestic hunger relief organization. The USDA is expected to purchase between 12-15 million gallons of fat free, low-fat (1 percent), reduced-fat (2 percent) and whole milk as part of this nationwide initiative. According to the department, today’s announcement is not part of the funding allocated to support farmers and producers negatively impacted by unfair trade practices.

“As many as 41 million Americans, including nearly 13 million children, face hunger daily and are at risk of missing out on essential nutrients when they don’t have access to milk,” said Michael Dykes, D.V.M., International Dairy Foods Association (IDFA) president and CEO. “Simply having more milk available for those in need can make a positive impact on public health.”

According to Feeding America, the monetary “meal gap,” or the resources to purchase enough food to meet the needs of those who face hunger, is $21 billion a year. And while consumers are generous with canned foods and dry goods, food banks only provide the equivalent of less than one gallon of milk per person, per year.

“Milk is one of the most requested nutrition staples at food banks, yet it is rarely available,” said Julia Kadison, chief executive officer at MilkPEP. “And as one out of two kids ages 9 and up are falling short on calcium, vitamin D and potassium – essential nutrients that milk provides – there is an even greater need to make sure milk is getting to children and families who need it most.”


Since 1935, the USDA has directly purchased farm goods (under Section 32 of the Agricultural Adjustment Act Amendment) to encourage consumption of domestic agricultural products. Working with states to determine need, the department will work with states through The Emergency Food Assistance Program (TEFAP) to provide the milk to programs and charities that assist struggling families. USDA’s official announcement can be found here.

As only USDA-approved vendors can participate, both IDFA and MilkPEP strongly encourage interested fluid milk processors to apply as soon as possible. More information on how to become an approved vendor can be found here:

If fluid milk processors are interested in becoming approved vendors, it is critical to apply now as the approval process can take several weeks. Potential new vendors can contact the USDA for questions at Milk processors can contact IDFA and MilkPEP directly for more information.  


“This purchase addresses one of our country’s significant challenges – hunger – and, at the same time, will have a positive impact on the dairy industry at a time of significant market uncertainty,” added Dykes. “The nation’s milk processors welcome the opportunity to provide nutritious milk, rich in calcium, vitamin D and potassium, which are nutrients most often missing in kids’ diets.”


Source: IDFA

Two new dairy processing plants expected in Michigan by December 2020

Michigan dairy farmers are getting a $510 million boost. Two new dairy processing facilities are scheduled to be built in St. Johns, north of Lansing. The plants are expected to create more than 250 new jobs.

“This is a tremendous win for the dairy farmers in our state, for all of Michigan,” said Governor Rick Snyder, who is a fan of Michigan’s cows.

“We have the second most productive cows in the entire nation, second only to Colorado and they’re not even close in terms of number of cows,” Snyder said. “So, we have the best cows in the country.”

The idea is to give Michigan a local place for milk, instead of having to haul it out of state.

John Wilson of Dairy Farmers of America said this will help Michigan dairy farmers – who have been hit hard recently with a milk surplus and uncertainty on the trade front.

“This plant’s gonna soak up eight million pounds of milk a day, and that’s a big deal for dairy farmers in the state of Michigan,” he said.

The money comes from private investors – supported by more than $20 million in grants and tax abatements from the state. Those are in the final stages of being approved. Construction for the facilities is expected to start in September and be finished by December 2020.


Source: Michigan Radio

Wisconsin farmers head to New York for ‘Dairy Together Movement’

Farmers from across the Wisconsin are leaving their cattle for a few days to head to New York for the ’Dairy Together Movement.’

Paul Adams’ dairy farm has been functioning in Eleva, near Eau Claire, since 1872.

Adams said he’s had industry concerns all of his life, especially the “come and go” of industry pricing.

Two years ago he took a 25-percent cut in pay and said it has been nearly impossible to survive.

The trip to New York is organized by the Wisconsin Farmers Union and Agri Mark Cooperative.

“Personal goal is to meet with some people that might have the same ideas and get ideas on what can or will work. Maybe now we might have enough going on that we can all get together and do something positive for the country,” said Adams.

Adams leaves bright and early tomorrow morning, then returns with the rest of the Wisconsin farmers on Tuesday.


Source: WBAY


The Planned Destruction of the American Dairy Farmer

A public hearing was held at the Fire Hall in Lairdsville, Pennsylvania, on July 24 to voice concern over the current financial crisis facing dairy farm families throughout America–aptly termed, the economic “Dairy Depression”. Organized by Farm Women United (FWU), the event called for similar hearings to be held across the countryside to gather testimonies that “Congress itself should be gathering but refuses to do so in what is the most outrageous and blatant example of dereliction of duty by federal legislators in modern American agricultural history that is patently undermining the Constitutional rights of American family dairy farmers.” The plea is for Congress and the current Administration to intervene with a “$20 Emergency Floor Price” for milk and mandatory federal hearings to investigate and resolve the crisis.

Gerald Carlin has authorized his written testimony to be published on (reproduced here by permission with minor formatting and punctuation edits). In his closing, Gerald addresses the many politicians who have failed to respond to the dairy crisis, to whom he says, “Your silence and excuses are deafening and damning.”

Testimony for the Dairy Farm Family Crisis Hearing, Lairdsville, PA

July 18, 2018

I want to thank everyone for taking time out of your busy schedules to attend this important hearing. I also want to thank my wife Tina for all of her hard work in helping to organize this hearing.

My name is Gerald Carlin. My wife Tina and I are former dairy farmers and are now raising beef cattle and vegetables on our century farm in Susquehanna County, PA.

I was asked to speak today on some of the history of events leading to this dreadful state of affairs in the dairy farming business and farming in general. The list of events is too long to cover, but I will mention some of the important ones.

In the period following the Civil War, a number of industries became monopolized including: Railroads by Vanderbilt, Oil by Rockefeller, Steel by Carnegie, and there were efforts by some to take control of agriculture. The Sherman Anti-trust Act of 1890 made monopolizing trade a felony and gave the Attorney General and US Attorneys the responsibility to prosecute those who monopolize, attempt to monopolize, or conspire with others to monopolize trade among the several states. Enforcement of Anti-trust has been lacking at best.

Farm owners are not allowed to unionize but in 1922 Congress passed the Capper-Volstead Act which enabled farmers to form marketing cooperatives to market their products as a group and to bargain for fair prices. The farmer-owned co-ops were granted special protections. As cooperatives have merged and morphed into giant corporations–distant, detached, and unaccountable to their farmer-owner members–these giant co-ops now hide behind their protections granted to them by the Capper-Volstead Act, while they abuse their farmer-owner members with immunity.

In 1937, Congress passed the Agricultural Marketing Agreement Act (AMAA) which established the Federal Milk Marketing Orders (FMMO) that created equal pay for farmers through pooling within the orders to create a uniform price for milk regardless as to how the milk was used. The provision in 7 U.S.C. Section 608 (c) 18 of the 1937 AMAA mandated that the Secretary of Agriculture consider regional production costs in the raw milk pricing formula. FMMOs still exist as a result of the 1937 AMAA but the “cost of production” part has been ignored and scorned for the last 37 years.

In July 1962, the Committee for Economic Development (CED)–made up of some 200 corporate executives, economists and other distinguished experts (not one farmer)–released An Adaptive Program for Agriculture with a stated goal of reducing the farming population by one third within five years. The report complained about wasted resources in farming, particularly labor, as technology increased productivity in agriculture and the large public expenditures for vocational training for young farmers in public schools. They proposed a policy of actively discouraging young people from getting into farming as well as actively trying to coax existing farmers to exit agriculture and even proposed public funds be spent to assist farmers in moving expenses to relocate their families off of the farm.

Kenneth E. Boulding, Ag Economist with the Department of Economics at the University of Michigan and member of the research advisory board for the CED, stated the following:

The only way I know to get toothpaste out of a tube is to squeeze, and the only way to get people out of agriculture is likewise to squeeze agriculture. If the toothpaste is thin, you don’t squeeze very hard, on the other hand, if the toothpaste is thick, you have to put real pressure on it. If you can’t get people out of agriculture easily, you are going to have to do farmers severe injustice in order to solve the problem of allocation.

Although this quote does not appear in the text of An Adaptive Program for Agriculture, the sentiment is still evident. The sentiment expressed by these distinguished experts was that farmers were merely disposable pawns in an economic plan. If the inefficient farmers would just leave farming, the farmers who are left will prosper. Efficient farmers will produce food more cheaply, people will spend less money for food, leaving more disposable income to spend on consumer goods, which will cause economic growth and increase income for all, or so the theory goes. Of course, consumer food prices have continued to rise even as farmers get less and less of the retail dollar. I guess there is a fly in the ointment somewhere.

There were 1.1 million farms with dairy cows in the United States in 1964, 600,000 in 1969, and some 40,000 today; so those who are left are really prospering, right? Oh wait, they are struggling more than ever before. Obviously there are still too many. You get the point.

The official belief that there are too many farmers has grown and become entrenched in public policy evidencing itself in numerous ways, not the least of which are burdensome and senseless regulations on many fronts. Technology, including patented GMO and Terminator seeds, limits farmers’ ability to preserve seeds while increasing the power and control of corporate seed giants. Food additives extend yields of “food” with less raw product. Irradiation and Ultra-pasteurization, along with other questionable practices, ruin the real nutrition of food while extending shelf life. The list could be endless, but the goal is to put food under corporate control, with as few farmers as possible. This, of course, is called “progress”.

The belief that farmers are not important is evidenced in the attitudes and actions of both co-ops and processors as they believe that they are turning worthless raw product into something of value–(Some believe that milk has no value until it is at least pasteurized). Dairy farmers are lucky that the milk truck stops at the farm, takes the hazardous material, and actually pays them for it. No wonder farmers are strapped with paying “make allowances” to insure that the processor can make a profit, and of course, farmers have to pay the hauling charges, advertising fees, and all other appropriate fees, as a co-op or processor sees fit. Countless rural communities that rely on agriculture and provide Ag-related services have been decimated. Social impacts are obvious.

On April 26, 1971, US Secretary of Agriculture Clifford M. Hardin announced the formation of the Young Executives Committee which consisted of 15 members, each of which represented an agency of the Department of Agriculture. They were asked by the Secretary to undertake a review of the farm income question. The following is quoted from their report:

Agriculture should be viewed as an industry which consumes resources, provides employment, and produces goods of value to society. The Committee believes that national agricultural policy should aim at creating an environment which would enable the industry to provide adequate supplies of food and fiber at reasonable prices to meet domestic needs and compete in world markets. The level of farm income earned from the production of agricultural commodities, either per farm or in aggregate, should not be an end in itself. That is, the Department’s objective should not be to assure any particular level of income from farming for the nation’s farmers. Income from farming should be of concern only to the extent that it affects the level of resources attracted to the industry, and, hence, the industry’s ability to produce efficiently, adequate supplies of food and fiber. The industry should not be evaluated on its ability to provide an adequate level of living for all participants regardless of the size of their operation or managerial ability. If adequate supplies of food and fiber are being made available at reasonable prices, we should conclude that the nation has a healthy, viable agricultural industry. . . Agricultural policy should be directed toward maintaining agriculture as a viable industry and not as a way of life . . . Given these conditions, agriculture cannot and should not be expected to provide employment opportunities sufficient to preserve the nation’s rural towns and communities. If these towns and communities are to grow, additional off-farm employment opportunities must be found.

The Committee also called for the elimination of parity pricing.

In April 1973, Agricultural Trade and the Proposed Round of Multilateral Negotiations (aka the Flanigan Report) was published. This document basically sought the elimination of any and all protections and trade barriers for farmers domestically and worldwide. It was their dream and goal that eventually no country on earth would be able to offer any special protections for their farmers. Farmers would be forced to be “efficient” and would no longer be able to be such a pesky, if not powerful, lobbying force in Washington, DC, or any other country in the world. Eventually through a number of trade agreements, negotiated by “esteemed” and unaccountable experts, the farmer has essentially lost all protections and all rights to seek redress of wrongs because international trade agreements supersede farmers’ rights and domestic food policy. Politicians can throw their hands in the air and declare that there is nothing that they can do, or, as most have chosen, just ignore the concerns of farmers, because, after all, there are more important issues to deal with and more important people to talk to.

On April 1, 1981, President Ronald Reagan signed legislation that decoupled farm milk prices from parity and incrementally decreased the support price from $13.60 at that time down to $9.90 and eventually the support price was eliminated in the 2014 Farm Bill.

In 1996, the United States Congress instructed Secretary of Agriculture Dan Glickman to reform the Federal Milk Marketing Orders. In July 1999, USDA put their order reform up for producer referendum. Only Option 1B was offered. Although many did not like 1B, the referendum passed because cooperatives like Dairy Farmers of America (DFA) used the “block voting” option. Several dairy cooperatives sought an injunction against the proposed order reform on the basis that 1B would financially harm milk producers in most of the country. In the St. Albans Cooperative Creamery, Inc., et al., Plaintiffs versus Dan Glickman, Secretary of Agriculture, Defendant case an injunction was granted. U.S. District Judge William Sessions III did not focus on the merits of 1A vs. 1B but rather cited Dan Glickman for failure to consider dairy farmers’ cost of production. Judge Sessions made clear in his “Opinion & Order” that ”. . . this Court looks to the direct language of the statute to determine the sufficiency of the Secretary’s consideration, which makes no mention of indirect consideration being adequate in meeting the requirements of 608c(18). The record shows no direct consideration of regional costs in feed, feed availability, or other region specific economic factors.”

Judge Sessions also stated that “. . . the Court finds the Secretary’s Final Order and Decision violates Congress’ mandate under the 1937 Agricultural Marketing Agreement Act (AMAA) . . . “ and “. . . that Plaintiffs have a likelihood of success in their claim that the Secretary’s Final Order and Decision violates the AMAA by failing adequately to consider economic factors regarding the marketing of milk in the regional orders across the country.” Furthermore, Judge William Sessions found “. . . that the balance of hardship weighs heavily in favor of the Plaintiffs.” Judge William Sessions, III made no fewer than five references to USDA’s failure to act according to the 1937 Agricultural Marketing Agreement Act, section 608c(18). In his “Opinion and Order” statement, one such discussion spans seven pages. In late 1999, Congress instructed USDA to implement Option 1A. This satisfied the Plaintiffs, (were the Plaintiffs following the intent of the Capper-Volstead Act?) and the case was dropped without resolution of the cost of production issue.

In May 2000, USDA held hearings on Class III and IV pricing in which testimony was offered in support of implementing a cost of production factor in these formulas. In December 2000, USDA released the Tentative Decision on Proposed Amendments for Class III and IV pricing. Once again, USDA ignored the mandates of 7 U.S.C. 608 (c) 18 maintaining that the Class III and IV prices “. . . are such prices as will reflect the aforesaid factors. . .” [General Findings (b)]. This is ludicrous in light of the volatility of Class III and IV prices. However, USDA did concede that “if a sound mechanical concept could be advanced that overcomes the objections relative to supply and demand, it should be considered.”

United States Department of Agriculture issued an invitation for proposals on changing Class III and IV pricing in the summer of 2006. Approximately 40+ proposals for cost of production were submitted. National Family Farm Coalition submitted a somewhat detailed proposal to base Class III and IV pricing on a national average cost of production. In the pre-hearing, February 2006, USDA officials insisted that they do look at 608c (18) regularly and implied that they are following it. USDA turned down NFFC’s proposal. As a result, several members of the Dairy Sub-committee, particularly Arden Tewksbury and Gerald Carlin of Pro Ag, drafted legislation using the NFFC proposal as its basis. Senator Arlen Specter’s office put the draft into bill form, and it was introduced in the Senate on June 27, 2007, by Senator Arlen Specter and Senator Robert Casey, Jr. The bill is known as the Federal Milk Marketing Improvement Act of 2007 or S1722. Senator Casey, who is on the Senate Agriculture Committee, was unable to get support for S1722 to become part of the Farm Bill. The Bill was reintroduced in 2009 as S889 and then after a few changes introduced again as S1645. The Bill was introduced again in 2011 as S1640.

Forward Contracting appeared in the 2002 Farm Bill as a pilot program which was to expire on December 31, 2004. The industry and lenders continue to pressure farmers to forward contract in an effort to undermine Federal Orders and secure milk at lower prices.

In late 2004, a massive investigation of DFA and Dean Foods was launched by the United State Department of Justice in conjunction with over 20 state Attorneys General. The investigation focused mostly on abusive, anti-competitive market practices in the Southeast, where farmers were paid less than minimum FMMO prices. Small co-ops were coerced, gobbled up, or controlled by DFA and farmer members were sucked into DFA and its affiliates against their will. Some 200 file boxes of evidence were reportedly collected along with scores of sworn affidavits. The investigation ground to a halt in the fall of 2006. It may have been completed by that time but no action was taken by the Department of Justice in spite of numerous calls to do so from politicians and others.

Another investigation of dairy co-op Anti-trust issues was started during the Obama administration then promptly terminated.

The 2014 Farm Bill eliminated the MILC program and Dairy Price Supports and replaced them with the failed MPP Program and the meaningless Dairy Product Donation Program.

On January 8, 2018, the Report to the President of the United States from the Task Force on Agriculture and Rural Prosperity was released, with five main objectives related to agriculture: (1) increase e-connectivity, (2) improve H-2A visa program to facilitate more H-2A work visas, (3) expand biotechnology and public acceptance of genetically modified products, (4) increase ag exports, (5) increase access to capital. No mention of farm price or consumer choice in the report.

The 2018 Farm Bill continues the globalist agenda with apparently no intention of correcting low farm product prices and bad farm policy.

On the trade front, President Nixon pushed for expanded trade with China. Ag trade surpluses were to offset trade deficits in manufactured products. This never happened.

On January 1, 1994, NAFTA went into effect. US investment went south for cheaper wages and Mexican wages actually decreased as our trade with Mexico went into deficit.

In a 1994 lame duck session of Congress, the massive General Agreement on Tariffs and Trade (GATT) passed, putting more control of our economy in the hands of unelected and unaccountable people.

In 2000, the US Congress approved Permanent Normal Trade Relations (PNTR) with China, and as many predicted, our trade deficit with China exploded as companies invested in China for even cheaper labor. China has become a growing threat to our nation’s security even as we have lost our ability to produce basic necessities for our own people.

In dairy trade the United States imported far more dairy products than we exported from the late 1990s to early 2000s. The USDA has become much less transparent on dairy imports as they tout increased dairy exports. Even so, we are still importing a large amount of dairy products. The “oversupply” in dairy has been created in large part by the use of Milk Protein Concentrate (MPC), Milk Protein Isolate (MPI), and Ultra-filtered Milk (UF). I will talk more about MPC later.

So where does this leave dairy farmers? Dairy farmers have lost their equity, lost their retirement, lost their ability to pay their suppliers in a timely manner, lost their dignity, feel misunderstood, marginalized, and scorned. They have lost their next generation of dairy farmers, lost their hope, in some cases lost their marriages, and some have lost their lives. They have been scoffed at by their cooperatives and experts. They have been ignored by politicians. The list of politicians ignoring farmers is long, but to save time I will just say that not one of the 66 member of the House and Senate Ag Committees had the decency to respond to a thoughtful survey sent to them by Farm Women United (FWU). Also, Governor Wolf and Governor Cuomo have not had the decency to respond to letters sent to them by FWU. Agri-Mark was also sent letters, but they too have failed to respond. It doesn’t matter what a politician may say in private. If they do not openly and publicly declare their support for Dairy Farm Families and offer constructive solutions to this crisis, there is no other choice but to conclude that they simply do not care. If they cared, they would speak out. Further, if dairy cooperatives cared, they too would take constructive steps to solve this crisis. Your silence and excuses are deafening and damning.

We urge support for a $20 Emergency Floor Price and hearings to determine a path forward to create a sustainable future for the dairy farms that remain. Failure to act will result in the near total destruction of traditional family dairy farms as we have known them and the continued decline in access to locally produced wholesome food.

Thank you for your time and patience
Gerald Carlin, Meshoppen, PA
2 Attachments – see posted below

How Much Milk is MPC/Ultra-filtered Milk Displacing

by Gerald Carlin – July 22, 2018

No one really knows how much milk MPC/Ultra-filtered Milk is displacing since the Federal Milk Marketing Orders (FMMO) do not collect data on MPC/Ultra-filtered Milk production and use. This is considered proprietary information. MPC and Ultra-filtered Milk are now being used in all four classes of milk products.

MPC and Ultra-filtered Milk are not approved ingredients in standardized cheeses, but the Food and Drug Administration (FDA) has “exercised discretionary enforcement” in this area, as reiterated on August 11, 2017. FDA went further and stated, “. . . we do not intend to take action against companies that manufacture standardized cheeses and related cheese products that contain fluid Ultra-filtered Milk or fluid Ultra-filtered Non-fat Milk without declaring them in the ingredient statement, as long as their labels declare milk or non-fat milk in the ingredient statement.”

We can, however, look at cheese production compared to Class III utilization in the FMMOs and California Class 4b (cheese) utilization to gain some insight. The traditional yield factor for cheese is 10.01 lbs. per 100 lbs. of fluid milk containing 3.5% butterfat and 2.99% true protein. Higher average components may yield 11 lbs. of cheese per 100 lbs. of milk. National cheese production last year (2017) for cheese falling under Class III or California Class 4b was approximately 12.4 billion lbs. Class III utilization (weighted average) in all Federal Orders was 41%. If this rate of utilization is true nationally, the average cheese production would be 14.1 lbs. per 100 lbs. of milk. The Class 4b utilization in California for 2017 was 46.2%, making an average cheese yield of 13.66 lbs. per 100 lbs. of milk. Given this information, it seems unlikely that the national average cheese yield is less than 13.5 lbs. per 100 lbs. of milk. This translates into at least 20 billion pounds of farm milk being displaced by the use of MPC/Ultra-filtered Milk in cheese. Low-fat and Non-fat dairy products are being promoted. The fat that traditionally would go into these products is used with MPC/Ultra-filtered milk to produce substandard cheese. Much of this use violates cheese standards. How much milk is being displaced in other dairy products because of MPC/Ultra-filtered Milk? Prices are in the gutter because of a supposed 4 or 5 billion pound surplus.

How much effect does farm milk price have on retail price?

US City Retail Price
Natural Cheese August 2014 — $5.56#
Natural Cheese June 2018 — $5.23#

Ice Cream August 2014 — $4.75 ½ gal.
Ice Cream June 2018 — $4.66 ½ gal.

Whole Milk August 2014 — $3.67 gallon
Whole Milk June 2018 — $2.88 gallon

US Average FMMO Mailbox Milk Price
May 2014 — $24.37
March 2018 — $15.04

California Dairy Statistics Annual 2017
Market Summary and Utilization Report Agricultural Marketing Service
Dairy Products 2017 Summary USDA NASS
Milk cows and production by state and region NASS and ERS
Dairy Market News

The four classes of milk products are: (1) fluid milk, (2) soft dairy products like yogurt and cream, (3) cheeses, and (4) butter and dry milk products like nonfat dry milk.

Thoughts Concerning Free Market in Dairy

By Gerald Carlin – May 6, 2018

In a functional free market system for dairy, dairy farmers form cooperatives to give them both bargaining power and marketing ability. The co-op would be owned by, and controlled by, its farmer-members.

Today, National Milk Producers Federation (NMPF) is the only voice for dairy farmers in Washington, as it claims to represent some 75% of the nation’s dairy farmers. NMPF is made up of “farmer-owned” co-ops and processors who are associate members.

Let’s examine the current “benefits” of being a farmer-owner of a large modern-day co-op. The farmer-owner, hereafter referred to as owner, pays the dairy cooperative management, hereafter referred to as employees, to market the owner’s milk. The employees are not required to pay the owner the Federal minimum milk prices.

  • The owner has no right to know what the employee’s salary is.
  • The owner has no right to know where his milk is going on any given day.
  • The owner has no right to know who all of the other co-owners are.
  • The owner can lose his market if he is critical of, or even questions his employees, therefore, most owners remain silent in fear of retaliation. Employees make examples out of owners who get out of line.
  • The employees vote in Federal Order referendums without the consent of the owner.
  • The employees have been seen at Federal Order hearings trying to get more money out of the owner without the owner’s knowledge.
  • The owner has no ability to call a meeting of fellow owners.
  • The owner has no practical ability to fire an employee.
  • The employees try to dictate how the owner runs his business.
  • The employees have plenty of lobbyists at all levels of government to ensure that their control over the owners continue.

This is the unseen and untold story of “farmer-owned” co-ops.

Farm Women United Mission Statement
Farm Women United seeks to maintain a serious, honest, and open dialogue, giving a voice to farmers who are the real stewards of the earth and the foundation of any free and civilized society. Farmers produce food that sustains life. We are a culture of life. Farm Women United seeks to restore cultural respect for farmers which will result in a just and equitable value being placed on the life sustaining food which we produce and allow farmers to continue to produce food with dignity.



Milking cows on an industrial scale arrives in western Minnesota

Louriston Dairy, built and operated by Riverview LLP, is home to 9,500 cows, 40 times more than the average U.S. dairy, and part of its fast-growing network of farms.

The milking carousel at the Louriston Dairy turns 22 hours a day and milks more cows in half an hour than most dairies do all day.

Cows step onto the slow-moving merry-go-round in single file. A worker sprays disinfectant on each cow’s udder, another wipes the teats clean with a paper towel, and another secures suction cups onto the teats for milking during a seven-minute trip around the room. Gleaming silver tanks in the next room fill with flash-cooled milk as 106 cows are milked at once.

The farm 18 miles west of Willmar is home to 9,500 cows, 40 times larger than the average U.S. dairy operation. It is part of a fast-growing network of giant farms built and run by Riverview LLP, a Morris, Minn.-based firm that is a game-changer for the Minnesota dairy industry. The company owns 92,000 milk cows — more than all the farmers in Illinois or Virginia — and 60,000 of them are in western Minnesota, where it has nine dairies and is building more.

“We are really bullish on the dairy industry, especially in the Upper Midwest,” said Brad Fehr, one of the company’s founders.

But farmers at smaller dairy operations are aghast. How, they ask, can a company build such huge operations when milk prices yield meager profits and many of their neighbors are leaving the business?

“All the large dairies — not just the ones in Minnesota, all over the country — they’re just flooding the market with milk,” said Heidi Beyer, who raises beef cattle near Clontarf, about 18 miles from Murdock, and helps her parents run the 60-cow dairy where she grew up. “Why are they doing this to other dairy farmers?”

For 30 years, farms in the Upper Midwest have gotten bigger and farmers who used to work a couple hundred acres now work a couple thousand. In that time, new methods of raising livestock emerged to take advantage of efficiencies of scale. Hogs, poultry and beef cattle disappeared from fields and were moved into massive barns.

This upsizing has come more slowly to dairy farming, but as the number of U.S. dairy farms shrinks, milk production continues to rise. Amid low milk prices and a trade war threatening exports, Riverview is placing massive bets: $50 million in construction and startup costs for each new dairy.

The basics of Riverview’s farms are not so different from other dairies, but in Minnesota, their scale is unprecedented. The cows at the Louriston barn drink enough water to drain an Olympic-sized swimming pool in just over two days, and produce enough manure to fill one every three days. For each new dairy, the Fehrs must show they can get sufficient feed and water and process and distribute the manure without harming the environment.

The local consolidator

Riverview started in 1995 when brothers Gary and Brad Fehr, with the help of their father, Lloyd, decided the only way for them all to stay in farming was to expand. They were raising beef cattle then, but they decided to shift into dairy.

“If you’re going to add people, you have to add work,” said Brad Fehr. “One of the reasons we chose the dairy industry is it was one industry that hadn’t consolidated.”

The Fehrs studied dairies in other states and built big, then bigger. The company, which now employs 1,200 workers and offers ownership to employees, owns cows in Minnesota, South Dakota, Nebraska, New Mexico and Arizona. It builds dormitories at new dairies to house workers. It contracts with nearby farmers to assure a steady supply of feed for its cattle. And it processes manure from its cattle into fertilizer that those same nearby farmers can use to help grow more feed.

And each day, an average of 25 new calves are born at each dairy. Half of them are dairy cattle that will be shipped to New Mexico to grow up in warm weather for about 18 months before returning to Minnesota to be milked and bred for several years. The other half are beef cattle that get sold to beef feedlots, mostly in South Dakota.

All of the milk that’s trucked away from Riverview’s nine dairies in Minnesota goes to make cheese. Riverview is a major source of milk for five cheese factories in western Minnesota and South Dakota.

“All the processors in the region work with them, and to a good extent, because of Riverview’s expansion over the last two decades, we haven’t seen as many cheese plant closures as we might have otherwise seen,” said Marin Bozic, a dairy economist at the University of Minnesota.

An Agropur cheese factory in Lake Norden, S.D., that’s a chief customer for Riverview is tripling its capacity by early next year. Riverview is building a new dairy in Swenoda Township, a few miles west of the Louriston Dairy, that will also supply the Agropur expansion at Lake Norden.


There are other large dairies in the United States: in California, Idaho and even Wisconsin. The most famous dairy in the country is probably Fair Oaks Farms, halfway between Indianapolis and Chicago, where 36,000 cows are milked across 11 barns. It’s also something of a tourist destination.

In Minnesota, Riverview is by far the biggest player, but its rapid growth frustrates some other farmers.

Within the past year, three smaller dairies in Swift County — home to three Riverview dairies and another under construction — have closed. Beyer said she worries milk prices won’t rise, that small dairies won’t survive and that their demise will ripple out in rural communities, hurting local farm-implement dealerships, veterinarians and feed companies.

Riverview already has a dairy operating 2 miles northwest of the Beyers’ farm. She and her husband helped push back a proposal from the company to build another one a mile to the southeast. They didn’t want to be sandwiched between two massive farms.

“Have some compassion for somebody else in the industry, who loves the dairy industry, who’s been working in it their whole life, taken it over from their father, their grandfather,” Beyer said. “You’re forcing them out. Nobody can argue that.”

Fehr said he hears that concern a lot, but he said all sizes of dairy are necessary to meet market demand. No cheese plants are turning away milk, he added.

“I do understand the perception,” Fehr said. “I don’t agree with that argument, because I don’t think us adding 9,000 cows changes the global milk market. It just doesn’t.”

A gut punch

Milk cows drink around 30 gallons of water a day, so abundant groundwater is critical when Riverview builds one of its farms.

The company had to drill an extra well near a dairy in Campbell to make sure it wasn’t pumping too much from the aquifer under the dairy. Riverview has also been scrutinized for its role in depleting the aquifer in a heavily farmed valley in southeast Arizona, where it operates a dairy and grows its own feed to supply it.

But Riverview is also admired for the tidiness of its operations — the stalls are cleaned thoroughly when the cows head out to be milked — and its work with other local farms. The Minnesota Pollution Control Agency monitors the company’s operations and, once in 2014, put a halt to one of its proposed farms by seeking a deeper, more expensive review. Each new proposal from Riverview is accompanied by soil, water and air-quality studies done by contract inspectors that are available for public review and comment.

Fehr said the company will build a new dairy typically only when nearby farmers support it, or even request it. When Riverview floated the idea of building a dairy near the Beyer farm, the township board pointed to an ordinance that capped the number of cows at a dairy farm and the company backed out without making a formal proposal.

“We have no desire to fight,” Fehr said. “If the core group of farmers around the site aren’t excited about it, it doesn’t work.”

Fehr believes Minnesota is well-positioned for the milk business because of its cool climate and abundance of water and corn. “Dairy cattle like to eat corn and corn silage, and most of the corn in the U.S. is grown in the Upper Midwest, so generally speaking we have a cheaper feed supply,” Fehr said. “We’re also from here.”

Change accelerates

While the vast majority of dairies in the U.S. are still small with an average of about 240 cows, farmers have been quitting for decades. The number of U.S. dairies fell from 678,000 in 1970 to fewer than 40,000 this year. Just under 3,000 are in Minnesota, the nation’s seventh-largest milk producer.

The balance of production in the industry shifted to large farms from small farms in the last decade. In 2001, dairy farms with fewer than 500 cattle produced two-thirds of the nation’s milk. By 2009, their share fell to 40 percent. The large farms also proved to be more productive, yielding more milk per cow, according to federal data.

Today, milk prices are down by a third since their most recent peak in 2014. Growth in demand has lately been driven by exports, mostly to Mexico, which have plateaued. Now President Donald Trump has launched an international trade war and cheese factories in the region are already running at full capacity, so they are not bidding up prices for local milk, said Bozic, the U dairy economist.

Bozic shocked many in the state’s dairy sector when he estimated in legislative testimony at the State Capitol earlier this year that 80 percent of the remaining dairies in Minnesota are “last generation” farms. He suggested that small farmers get out of the business to preserve their wealth, saying, “The sooner they exit the sector the more equity they will preserve.”

In an interview, Bozic said he regrets not expressing sympathy for “the little guy” and noted the federal farm bill provides a safety net for many dairy farmers. But the upsizing and consolidation of the industry will go on, he said.

‘You hope so’

Brothers Chris and Andy Emmert run a dairy with a quonset-shaped white barn east of Hancock, just a few miles southeast of Morris, where Riverview and the Fehrs started. Two robotic, Dutch-made machines handle milking of the Emmerts’ 140 cows. The machines spray and scrub their udders and, guided by lasers, position milking cups onto the cows’ teats.

Even with such high-tech efficiency, Chris Emmert said the business is tough. “We’re break-even right now at $14 milk,” he said, referring to the price of 100 pounds of milk, or hundredweight.

The Emmerts’ father bought the farm in 1959, and Chris Emmert’s wife grew up on a dairy, too. He said he knows all his cows individually by sight, and some have lived on the farm for 16 years.

Twenty miles to the southeast, near Clontarf, John Beyer, Heidi’s husband, said he wonders whether his children will be able to carry on their grandparents’ dairy legacy. “That’s the question I ask every day,” he said. “You hope so.”

Asked why Riverview needs to keep growing, Fehr said that drive comes from the company’s employees, about 15 percent of whom own a stake in the firm. When he and his brothers floated the idea of getting into dairy, their father could have said no, but he was “all in.” And for that, Fehr is grateful.

Now a similar dynamic is at work. New owners in the partnership want to expand, and Fehr isn’t going to stand in their way, he said.

“They want to be owners. They want to grow. I’m with them,” he said. “That’s some of the why. Truthfully, that’s a lot of the why.”


Trade war hits Idaho dairies


Cows line up in a feed barn at Sunridge Dairy in Nampa, Tuesday, July 31, 2018. The family dairy milks 2,900 cows in the Treasure Valley, sending roughly 250,000 pounds of milk down the road to the Sorrento Lactalis cheese plant every day. As a result of retaliatory tariffs, co-owner Adrian Kroes and other local dairy producers saw a 15 percent drop in milk prices below what was projected for July. Kroes estimates they’ll close the month of July with a $150,000 loss, and stand to lose at least $100,000 more in August.

SunRidge Dairy in Nampa says it’s losing more than $4,000 a day. 

The family dairy milks 2,900 cows in the Treasure Valley, sending approximately 250,000 pounds of milk down the road to the Sorrento Lactalis cheese plant every day. Co-owner Adrian Kroes and other local dairy producers saw a 15 percent drop in milk prices below what was projected for July. Kroes estimates they’ll close the month of July $150,000 under projected revenue, and stand to lose at least $100,000 more in August.

State dairy associations say SunRidge Dairy isn’t alone, and despite ongoing industry labor shortages, there’s one obvious reason for the loss.

Story continues below video

“Our dairymen have sustained tremendous losses already,” said Rick Naerebout, CEO of the Idaho Dairymen’s Association. “We were starting to see a resurgence — but then the trade war started.”

Tariffs impacting key Idaho trade partnerships

Earlier this year, the Trump administration placed tariffs on steel, aluminum and billions of dollars of Chinese goods, prompting retaliatory tariffs on U.S exports from key trade partners.

Idaho businesses — especially in the agricultural industry — are already paying for these retaliatory tariffs. Canada, China and Mexico were among Idaho’s top foreign export destinations in 2017, according to the Idaho Department of Commerce.

In June and July, Mexico put tariffs on cheese, pork, apples, potatoes, steel and aluminum, among other products; Canada put tariffs on steel and aluminum; and China upped its tariffs on dairy, beef and other agricultural products an additional 25 percent. The European Union in June also imposed tariffs on several U.S. exports with significant Idaho industries — the largest being kidney beans, according to an analysis by the Idaho Department of Commerce.

Before retaliatory tariffs, the U.S. enjoyed extensive free trade with both Canada and Mexico under the North American Free Trade Agreement (NAFTA). Renegotiations of trade agreements with both countries are ongoing, with rumors of agreements looming.

In 2017, Idaho exports to Canada and Mexico topped $1.07 billion, with $353 million more in exported goods to China.

Idaho State Department of Agriculture spokeswoman Chanel Tewalt said the tariffs have an undeniable effect on Idaho’s economy. Twenty percent of all sales in the state come from agriculture, Tewalt said. Their department has been fielding worried calls from businesses across the state.

“When you look at all states in the United States and you see how much GDP is agriculture generated, we are the fourth highest in the nation,” Tewalt said. “When there are disruptions in the ag market, it will be felt in a state like this.”

‘Tremendous amount of stress’ for dairy producers

Before tariffs were imposed, Idaho’s dairy industry was already feeling the strain. Low unemployment is difficult for an industry that has no access to a temporary worker visa program, such as the H-2A agricultural visa program increasingly used by Idaho farmers. The lack of access to foreign worker visas means Idaho’s dairy industry has historically employed more undocumented foreign workers than in other industries, Naerebout said. A national crackdown on immigration threatening a sparse workforce creates uncertainty for dairy producers and employees alike.

The dairy industry represents about one-third of Idaho’s agricultural sector, according to an analysis by the Idaho Dairymen’s Association.

“There is a tremendous amount of stress for the average dairy producer right now,” Naerebout said. “Our dairymen are growing increasingly frustrated that their voices are not heard.”

Mexico alone imported more than $14 million in Idaho cheese and whey products in 2017. Representatives from Sorrento Lactalis are expecting the tariffs to hurt their Nampa cheese plant. Ninety percent of the milk they use comes from Treasure Valley producers.

“Mexico is an important export market for our cheese, and the majority of the products we export to Mexico are manufactured at our Nampa facility,” spokesman Pierre Lorieau emailed to the Idaho Press. “The tariffs imposed by Mexico in retaliation for U.S. tariffs on Mexican steel and aluminum are likely to have a significant impact on our business to Mexico, and therefore will adversely affect our Nampa facility.”

Naerebout estimated Idaho dairy producers have lost $1 to $2 a cow every day since 2018 began. That matched with SunRidge Dairy in Nampa.

“It’s been few years since it’s been a good year,” Kroes said. “There was hope that the second half of this year would see a recovery in milk prices, but that’s kind of been pushed back.”

The trade war has cut both ways, however. While Idaho milk producers are suffering from retaliatory tariffs, some Treasure Valley businesses are dealing with the impact of Donald Trump’s tariffs on Canadian aluminum.

Steel and aluminum tariffs hit local businesses

Treasure Valley businesses have seen a recent increase in steel and aluminum prices significant enough to cause concern. Local metalworking companies and brewers have both seen production costs go up.

President Trump imposed a 25 percent tariff on steel and 10 percent tariff on aluminum metal imports this year. The administration cited a national security risk as justification for the steel and aluminum tariffs, according to the Associated Press.

Price jumps may be directly tied to the tariffs, or indirectly based on regular market fluctuations. Either way, Treasure Valley businesses say the changes are noticeably larger than normal.

“If anyone is in the metal business here, it’s affecting them,” said Jeremy Adams, president of Excalibur Metal Design in Meridian.

Excalibur Metal Design, which sells products mostly within the United States, makes a variety of custom railings, gates and furniture among other metal fabrications. Since January, Adams said, the price of flat steel has increased 60 percent.

“There’s no telling what the effects are going to be if prices are going up and the tariffs continue,” he said.

Other Boise metalworkers confirmed seeing drastic price increases for steel and aluminum products.

Local brewers are seeing a rise in aluminum packaging products. Suppliers point to the tariffs by way of explaining the cost hike.

Mother Earth Brew Company brews and cans 750,000 cases of beer in Nampa. Eighty percent of that ends up in either aluminum cans or stainless steel kegs, said owner Daniel Love, so the 10 percent U.S. tariff on Canadian aluminum and steel makes an impact.

“If this continues over an indefinite amount of time, it might affect 1 percent of bottom line,” Love said. “Whether I believe tariffs are good or bad, they aren’t great for my business.”

Love said Mother Earth had no plans to raise prices, but instead plans to absorb the costs to keep their beer affordable.

Bart Watson, chief economist for the Brewers Association, a craft brewers trade group, said they are hearing from members that this is a trend nationwide. In the brewing industry, aluminum cans make up 28.5 percent of packaging products.

Mike Francis, owner of Payette Brewing Company, said an increase in aluminum material for packaging is on their radar.

“Over time if prices go up for raw materials,” he said, “prices are going to go up for consumers.”

Fruit growers feel the impacts of apple and cherry tariffs

Chinese tariffs on apples and cherries as of July 6 have risen to 50 percent from the previous 10 and 25 percent tariffs imposed in April, according to the Idaho Department of Commerce.

Idaho is one of the top five cherry-producing states along with Washington, Oregon, California and Michigan. In 2017, China became the top market for Northwest cherry exports with nearly 3 million 20-pound cases imported, according to the Northwest Horticultural Council.

Sally Symms, vice president of sales and marketing at the Symms Fruit Ranch in Caldwell, said the tariffs have forced farmers to reduce their prices in order to sell their fruit. The Chinese market is now significantly less accessible for farmers, creating an over-supply of cherries within the U.S. markets.

“You can’t have the third-biggest market closed without affecting all other markets,” Symms said.

Cherries that are shipped to China are grown specifically in size and quality for their market. Now, farmers have had to find other options to sell.

Other nations have also imposed tariffs on apples and cherries. Mexico’s 20 percent tariff on apples has been in effect since May. Last year alone, Mexico imported nearly 14 million 40-pound cartons of apples, according to the Northwest Horticultural Council.

“Everyone is very hopeful that the tariffs will be removed,” Symms said, “and not only in China.”

Idaho ag still uncertain about promised relief

The U.S. Department of Agriculture’s announcement that it will dole out $12 billion in emergency relief to farmers and producers impacted by the retaliatory tariffs wasn’t a comfort to some Idaho farmers.

“I’m not a big fan of subsidies,” Kroes from SunRidge Dairy said. “I think they end up harming the industry at the end of the day. I can understand that there may be a need for it. It all depends on how it’s done.”

Symms declined to comment on the possible relief because of the lack of details provided so far. She wasn’t sure if it would help Symms Fruit Ranch.

Naerebout said he and other dairy producers remained skeptical the plan will help Idaho dairies, although details of the emergency relief program remain sparse. The average herd size for Idaho dairies is 1,400 cows, Naerebout said, compared to the national average of 300 cows. Naerebout said such relief programs usually have a subsidy cap based on that national average.

“They won’t have as much impact on Idaho producers as across the country,” Naerebout said.

Naerebout said there’s already a “misconception” that dairies are a heavily subsidized industry, but independence is point of pride for the average dairy producer. Instead of subsidies, Idaho dairies would prefer the federal government broker a rapid solution to the trade dispute, reopening the markets they’ve enjoyed access to for more than a decade.

But while Idaho businesses are suffering the consequences of the trade war, the solution is still out of their hands.

Idaho has been losing about 10 to 15 dairies a year, according to Naerebout. If the trade dispute isn’t resolved quickly, Naerebout thinks they could see double that number close by the end of 2018. There are currently 472 dairies and more than 500,000 milk cows in Idaho, according to the Idaho Dairymen’s Association.

“The end result is going to be the loss of family business in Idaho,” Naerebout said. “We’d like to try to avoid that in Idaho. We can only do that at the federal level. There is nothing we can do to fix this at the local or state levels.”


Rare heifer triplets thriving on Taieri farm

Holy cow – it’s a girl. Or in the case of a heifer calving on a Taieri dairy farm last week, it was a gaggle of girls, handful of heifers.

The first-calver produced a very rare set of heifer triplets on the Miller family’s farm at Maungatua. Andrew Miller and his father Jim had never encountered triplet calves before.

Andrew was particularly amazed the Kiwi-cross calves had all survived and were now doing well in the calf shed.

While exact figures on the probability of a dairy cow having triplets were difficult to find, it was an extremely unusual occurrence and the suggestion was made that there was a better chance of winning Lotto.

Clutha Vets Milton-based veterinarian Tom Wallbank had not encountered triplets before and he reckoned it was “probably in the hundreds of thousands” when it came to probability.

Then the fact the heifer was a first-calver, that there were three heifer calves and that they all survived, added up to being a particularly unusual occurrence. Dairy cows were also less likely to have triplets than beef cows, he said.

Calving was going well throughout the region and the weather was much better than the “horrendous” conditions last year. There had been reports of some big calves, Mr Wallbank said.


‘True type with extra bit of style’ – says judge

The judge of the forthcoming Diageo Baileys Champion Dairy Cow competition says he will be looking out for “a cow that emulates the true type model, not necessarily big, but balanced with that extra bit of style.”

He is David Hodgson and farms 350 acres just outside Carlisle, in partnership with his wife Louise and his parents. Their Wormanby Herd consists of 190 milking cows with an average of 11,000kg on twice a day milking. The Herd won the prestigious Holstein UK Premier Herd in 2015 and has been a Master Breeder Herd since 2009.

David has been on the Holstein UK National Judging Panel for the last 15 years. He has judged the UK National Herd Competition Final (2015), ABAB Calf Show (2015), South West Dairy Show and the Celtic Showcase. This will be David’s third time judging in Ireland, having judged Charleville a number of years ago and the All Ireland Calf Show just last year. He also said he was ‘honoured to be asked to judge the Diageo Baileys Champion Cow because it was one of the most prestigious shows to be held in the UK and Ireland’.

The Diageo Baileys Champion Cow has a 10,000 Euro prize fund. It is co-sponsored by Glanbia Ireland, suppliers of cream to Diageo for Baileys and takes place on 22nd August at the Virginia Show in Co. Cavan.


SourceFarming Life

Dr. Robert Moore Named 2018 Dairy Cattle Improvement Industry Distinction Award Winner

On behalf of its industry partners, the Board of Directors of Canadian Dairy Network (CDN) has announced its selection of Dr. Robert Moore, Scientific Manager at Valacta, as the recipient of the Dairy Cattle Improvement Industry Distinction Award for 2018. This award recognizes his many contributions to the Canadian dairy cattle sector throughout his 39-year career.

Robert Moore is a graduate of McGill University and the University of Guelph. He started his career at PATLQ/DHAS with Dr. John Moxley, as well as in the Animal Science Department of McGill University, in 1979. PATLQ (Quebec Dairy Herd Analysis Program) became Valacta, the Dairy Production Centre of Expertise, in 2006. Dr. Moore works as the Scientific Manager (R&D) and in this capacity he has greatly contributed to the development of the technical specifications for the national milk recording database, which has close and essential ties to CDN.

Since 1982, Dr. Moore has been fully committed to the advancement of milk recording services, and his contributions to the high quality of data used for national genetic evaluations are remarkable. He has been a member of the Genetic Evaluation Board (GEB) and DairyGen Council of CDN for several years. Dr. Moore’s important contribution to the development of the centralized Canadian DHI database (Vision2000) is little-known and must be acknowledged today. He has not only played a key and pivotal role in the establishment of the Vision2000 business requirements, but he is also one of the key resource persons contributing to its development and ensuring the smooth data exchange with CDN and industry partners. The quality of data collected by milk recording and supplied to CDN serves as the foundation of the Canadian genetic evaluation system. Dr. Moore’s technical understanding of genetic evaluation methods and models, as well as his knowledge of the operational and transactional nature of milk recording, paired with his practical understanding of what dairy producers record (and why), make him a unique and exceptionally valuable contributor to the genetic improvement of dairy cattle in Canada. In 2001, he received the Valacta John Moxley Award for his exceptional contribution to the development of Vision2000.

“Dr. Moore’s studies and his entire career have been devoted to the dairy cattle improvement industry and for this reason, we think that he fully deserves this recognition,” says Norm McNaughton, Chairman of the CDN Board of Directors.

Canadian Dairy Network is the national genetic evaluation centre for dairy cattle and provides services to Canadian dairy producers and member organizations including breed associations, DHI agencies, A.I. organizations and Dairy Farmers of Canada. The award will be presented to Dr. Robert Moore during the 2018 Dairy Cattle Improvement Industry Forum on September 19th at the Château Vaudreuil Hotel & Suites, Vaudreuil, Que., in advance of the 23rd Annual General Meeting of CDN the next day.

Saputo criticises Canadian milk scheme

Lino Saputo Jr: “I’m not against the milk supply management system in Canada, it works well for Canada.”

The owner of Australia’s largest milk processing company Lino Saputo Jnr has lashed out at a Canadian dairy export support scheme.

Speaking after the release of Saputo’s quarterly results on Tuesday, Mr Saputo said he backed concerns of United States, Australian and New Zealand farmers about the scheme.

But he supported Canada’s milk supply management system.

The system sets domestic production quotas and the milk price paid to farmers, while Canada blocks imports from other countries by imposing high levels of tariffs.

In 2016, a new Class 7 pricing scheme was struck, which allowed processors to pay lower prices for domestic milk ingredients used to make cheese and yoghurt and to export the rest.

Mr Saputo said Canadian producers were trying to have their cake and eat it too.

“I’m not against the milk supply management system in Canada, it works well for Canada,” he said.

But Mr Saputo said he was opposed to the Class 7, which was behind the 1.5 billion litre increase in Canadian milk production to 9.5 billion litres in the past two years.

The excess production was being sold as powder into international markets.

“So what I am saying is if Canada wants to have a supplied milk system, you’ve got to manage that supply to domestic consumption, which is what the milk supply managed system is all about,” he said.

“So perhaps that means that 1.5 billion litres of milk has to come off the table from Canada.

“So Canada cannot have a two-tier system, which is what they have with the Class 7 – that’s not fair trade.”

Mr Saputo also blamed Class 7 for difficulties at the farmgate that had prompted the Canadian Dairy Commission to impose a 4 per cent increase in the price paid to farmers.

“The suppliers are complaining about lower revenues,” he said.

“Well, Class 7 has contributed to lower levels at the farm level because Class 7 is set at international prices and suppliers are getting a blended price.

“So, of course, the economics at the farm level aren’t making sense.

“But Class 7 is a culprit there.”

Mr Saputo said the Canadian dairy industry would have to give something in the negotiations for the North American Free Trade Agreement (NAFTA).

“If we think that there is going to be a NAFTA deal signed and there is going to be no change to the dairy industry, then I think we are all crazy. That’s not going to happen,” he said.

Removing Class 7 would be better than offering incremental import licences to the US.

Mr Saputo also lashed out at what he called irrational behaviour by companies in the US in the wake of the Trump-led tariff war.

US processors initially panicked and, concerned that export markets might be closed to them, started to look to place more product domestically, he said.

The international supply pipeline also filled up as buyers moved to sure up supply before tariffs were imposed.

US stockpiles of product had subsequently grown to 1.4 billion pounds.

This had led to dairy processors in the US trying to sell their products at lower prices.

“We are seeing things going on in our industry we haven’t seen before,” Mr Saputo said.

But he said Saputo was not prepared to fight for every market segment.

If it was a long-standing customer in a market for a product it could produce competitively, Saputo “will have to fight”, but if it was less profitable, “we will cut those products loose”.

“We’ve got deep enough pockets that we can fight the good fight wherever we choose to go,” he said.

“Sometimes we choose to fight and sometimes we choose to walk away depending on the importance of customer and divergence of the product mix.”


SourceThe Australian Dairyfarmer

New dairy organization signs ‘Contract with Producers’

To: U.S. dairy producers
As U.S. dairy producers, business owners and multi-generational farmers in America, as well as members of the board of directors of the National Dairy Producers Organization Inc., we come to every dairy producer in America seeking your support of a national effort to organize the producer sector of the U.S. dairy industry.

We have established and are committed to growing and funding a national organization that represents the needs and financial interests of all dairy producers in America.

We offer a viable, business-oriented and profit-driven alternative to the more than four decades of severe instability and losses that have, to date, resulted in the elimination of thousands of dairy producers nationwide. Producer profitability is our number one priority and our number one responsibility.

While change is never easy, it is time for every dairy producer to make a decision. Do you stay with the status quo or do you take full control of and responsibly for your financial future, as well as the economic vitality of the vendor businesses that support the dairy industry and the continued economic growth of your communities, your counties and your states who rely not only on your survival, but your ability to produce milk and get paid a profit for doing so?

We offer the following “Contract with Producers,” and stand committed to provide the necessary leadership, expertise and management team to ensure the success of each proposal in this contract. We say to every producer in the country, “The time for decision is now; the time for action is today.”

In keeping with our resolve to reach these goals in the shortest time possible, we the founding members make a solemn commitment to every producer in the U.S. and the entire dairy industry to rapidly move forward with organizing the entire producer sector as the first step toward accomplishing the following tasks:

We pledge to thoroughly and immediately review and study each of the issues that impact the price of milk paid to producers in order to determine and facilitate needed changes that may be required to reach our stated purpose of producer profitability, for now and in the future.

Having determined what needs to be done, we will hire and manage qualified personnel and specialists with specific expertise as may be necessary to accomplish the goals of the organization, including the implementation or change of national policies, so as to accomplish the required work in the shortest possible time.

We stand committed to working with and supporting organizations and their agendas who will likewise assist us in our efforts to reach these stated goals and who are willing and able to support our agenda, keeping the financial interests and needs of producers as the prime motivation.

We pledge to establish and maintain an effective communication network in keeping with the needs of producers across the country that will provide both the organization and the producers with a needed free flow of information in order to maximize the efforts of all parties.

We are committed to influencing changes and/or additions to the laws and policies governing the U.S. dairy industry, so as to maximize producer profits, minimize government involvement, remove government assistance and provide for the smooth and easy market management of the industry.

We agree to always maintain a strong spirit of cooperation with our partners in the dairy industry – co-ops, processors, retailers and the consumers of milk and milk products.

We recognize them as vital to our own success and stand committed to shoulder our share of the responsibility and hereby commit our resources to work in harmony with these important partners as we push toward the realization of our goals and purposes.

We agree to work closer than ever with political leaders, national organizations, national, state, county and city legislators across the country to expand the level of knowledge, communication and understanding amongst those parties who play such a vital role in the long-term health and vitality of the dairy industry, holding them and ourselves to the same high standards of support for and accountability to the U.S. dairy producers.

We pledge to establish and maintain a much higher level of industry education, participation and understanding amongst the producers and all of the dairy industry, so as to foster maximum contribution to the greater good by all of the resources that exist within the dairy industry, thereby facilitating the growth of existing producers as well as the development of the next generation of dairy producers.

In consideration of the support of all U.S. dairy producers, we commit to immediately beginning the process of implementing the following 10 changes within the dairy industry in support of the financial needs of dairy producers.

1. We support working with any and all organizations throughout the country who truly demonstrate a concern for and the will to restore and maintain dairy producer profitability nationwide.

We stand willing and able to support well-managed and effective programs that ensure dairy producer profitability and sustainability.

2. We will work to establish and/or assist in the establishment of a national supply management program.

History has clearly and repeatedly demonstrated that there has never been market stability for producers in the dairy industry, nor will they ever reach or maintain producer profitability until there is a supply management plan in place that will effectively reduce volatility.

We support the immediate implementation of a well-managed national supply management program focused on producer profitability and long-term sustainability.

3. We support an overhaul of price discovery to better reflect the true value of milk on the farm.

We are committed to studying the various producer pay price discovery alternatives, to secure a permanent and improved change in how milk is priced on the farm.

In our opinion, the existing CME system has not been a fair system for producers, while processors and retailers have been allowed to earn substantial profits in stark contrast to the record losses recorded by most dairy producers.

We stand steadfast with other producer organizations in support of retaining the current method of calculating the Class I Mover which uses the “higher of’’ the Advanced Class III or IV price calculated by product price formulas.

4. We support immediate federal legislation to further regulate the importation of milk and milk products, including milk protein concentrates (MPCs) that might prove detrimental to producer profitability.

We will work to correct deceptive milk importing practices that dramatically impact the value of milk produced domestically. The continued importation of concentrated milk products and ingredients have displaced the use of U.S. domestic production by as much as 10 percent.

These practices have created oversupply issues that have had a dramatically negative impact on the value of all domestic milk. As a result, U.S. producers are penalized for the oversupply of raw milk.

5. We will seek improved legislation for “Country of Origin Labeling (COOL),” “100% American” labeling and improvement of U.S. inspection standards as important tools to ensure food safety as it relates to milk imports intended for U.S. consumers.

Most, if not all imported items, require country of origin labeling, so why not dairy products? From the producer perspective, we should not allow milk protein concentrates to be imported into the country, which are then used in the production of “American cheese.”

Loose or nonexistent standards provide a free pass on country of origin labeling on all dairy products imported into the U.S.

We call upon Congress to enact mandatory country of origin labeling policies for all dairy products being imported into the U.S., which identifies product origin and classifies for import tariff purposes, milk products, milk components and/or other milk ingredients, including milk protein concentrates, casein, caseinates, starters and mixed milk products, etc.

6. We will seek legislation to improve Grade A Milk Standards from the current 750,000 Somatic Cell Count (SCC) level to a 400,000 count.

This important change is not only needed to match standards that have been set by world marketers, but should be addressed because it will provide consumers with a more flavorful and healthy milk product. There are however, material costs involved in producing high-quality, low-bacteria raw milk.

We are not only in favor of adopting the 400,000 SCC standard but will develop a plan for paying producers more money for their milk to compensate them for the increased costs that must be invested to ensure that the entire country participates in producing cleaner and healthier milk.

7. We support the continuation and the expansion of the exportation of U.S. milk and milk products that actually provide a profit to U.S. dairy producers.

We support and will seek methods to improve or establish producer profitability from the exportation of U.S. dairy products.

While we are in full support of expanding our ability to meet a growing world demand for milk and milk products – certainly American producers could and would produce all the milk the world needs.

However, recent history has shown that producer profitability never precedes the words “dairy exports.” All U.S. producers are in favor of “profitable dairy exports.”

8. We support the reform of or elimination of the processor “make allowance.”

The processor “make allowance,” which is sometimes referred to as a “processor guaranteed profit,” has been acknowledged as one reason for the overproduction of dairy products, which are eventually sold through domestic or export markets at low prices.

Of equal concern is that overproduction has now fostered the need to subsidize export transactions with producer funds just to enhance sales and to promote increased product disappearance.

9. We will pursue the return of the 8.7 percent and 3.5 butterfat milk standard for all U.S. milk.

These recommended standards return the milk standard to what most cows naturally produce. Processors have enjoyed the profit from harvesting milk components from naturally produced milk and diverting those components into other manufactured milk products, reducing the milk quality sold to consumers, thereby adding to the surplus of other dairy products.

Under the current system, processors gain direct benefit and extra profit at the direct expense of dairy producers.

10. We support the immediate review of government subsidies and protective tariffs currently in place that artificially support the production and blending of ethanol in the U.S.

Current U.S. fiscal policies have made our dollar weaker, allowing U.S. grain to be more easily exported at a time when Russia and China have become big players in the grain markets. Combine these conditions with the current U.S. energy policy which subsidizes the production and blending of ethanol at a higher rate than ever before.

The dairy industry has become an unintended victim due to the dramatic impact on grain prices, speculative or otherwise, that have occurred in the past six months.

These issues have also been given “Top 10” status due to their overall impact on current conditions in the dairy industry, especially as they relate to the financial needs of dairy producers.

However, it is critical that producers understand that the list of issues that need attention does not end with the Top 10 that have been addressed in this contract. Our board of directors and members have identified 10 other issues that have been placed on our working agenda.

We are well aware that higher input prices will continue to impact producer operations from almost every source imaginable. Producers must have a plan and a management team in place working specifically for producers to achieve long-term profitability, stability and growth.

We advocate that the most intelligent solution is for every U.S. dairy producer to support a national organization that is working every day to ensure producers receive their fair share of every retail dollar, while working hand-in-hand with each of our partners in the U.S. dairy industry.

The following list comprises 10 additional issues our board of directors and members have identified and that have been placed on our working agenda.

• We support stricter enforcement of the Pasteurized Milk Ordinance.

• We support a producer-funded and producer-operated charitable food program as part of a comprehensive national supply management program.

• We support compliance standards regarding animal care and the ethical treatment of animals.

• We support immediate dialogue to review producer-funded assessments in order to provide a more direct benefit to producers.

• We support every effort to minimize government involvement in the U.S. dairy industry, thus making the whole industry more self-reliant and self-regulated.

• We support proper labeling and accurate promotion of all dairy products and will take steps to stop the improper promotion of non-dairy products.

• We support needed effort as may be required to assist in local and regional issues affecting dairy producers.

• We oppose block voting within dairy organizations and will take steps to secure a one producer, one vote process.

• We support a .15 per hundredweight (cwt) assessment on all imported gross milk equivalents paid to a producer-controlled fund.

• We support the reduction of the national dairy herd through beef breeding, Johne’s eradication, a producer-funded cow cull program, and we will work to provide other producer/compliance incentives as part of a comprehensive national supply management program.

In conclusion
We are confident that over time some issues will fade into insignificance and others will rise to the level of major concern. But we remain steadfast in the knowledge that our members and our board of directors possess the will, the skills and the determination to resolve these and every issue as they are brought forward.

Rooted in this knowledge and our own determination, we toffer this “Contract with Producers” for the study, the review and ultimately the support of every dairy producer in the U.S. and commit on behalf of the membership and ourselves to doing everything in our power to bring to reality the solutions offered in this document.

In doing so, we respectfully ask for the same level of commitment from every dairy producer in America to do their part; to learn, to listen and then decide on their own acceptance and support of this contract, so that from their support and collective membership the whole industry can survive and prosper together.

Nearly 60 dairy farms in Indiana have closed since the start of the year

Nearly 60 dairy farms in the state of Indiana have closed down since the beginning of the year and many local dairy farms in Michiana are facing the same threat.

Doug Leman, Executive Director of Indiana Dairy Producers, explained this threat is nothing new. It all boils down to economics. Leman said over the last 50 years, dairy farmers have been producing more milk than is being consumed.

Dairy farmers who have been running family farms for generations are now facing the tough decision whether or not to close down for good.

“It’s a very hard thing to have to go through,” said Leman. “It’s emotionally, mentally and physically tough when you reach that point.”

Many farmers are blaming the decline on larger corporations like Walmart, who partner with farms for direct shipping to their stores. “They have some direct shippers now, which is farms,” said Leman. “So some people will say it’s a Walmart farm. Basically that means Walmart is their market. They are their farms, by no means do they own them. They have an agreement with that farm.”

The National Milk Producers Federation estimates tariffs imposed by the Trump Administration will cost U.S. dairy farmers close to $1.8 billion through the end of 2018.


Source: WNDU

Australian dairy farmers plan to walk away from industry after years of financial uncertainty

Steve Dalitz is a third generation dairy farmer.

Dairy farmer Steve Dalitz loves his cows and knows them all by name, but he is preparing to say goodbye to them.

Mr Dalitz has made the tough decision to put his dairy farm on the market.

“I’ll miss the cows but one day I just decided it,” he said.

The combination of low milk prices and high feed and water costs have put enormous financial pressure on the Dalitz family.

“None of our boys are interested in milking cows and I’m 50 now, and it’s just getting harder and harder to make a living from it,” he said.

With a $70,000 annual interest bill just to keep the farm running, the third generation farmer is not surprised the next generation does not want to follow in his footsteps.

“I’m happy for our kids to do whatever they want to do, and they’ve probably seen the worst ten years of dairy farming that there’s been,” he said.

“Our oldest son is 20 so he would’ve been 10 when the drought started and all that sort of stuff, so I don’t blame them for not going into dairying.”

Mr Dalitz is not alone.

A recent national survey of dairy farmers found less than half remain confident about the future of the industry, down from 75 per cent four years ago.

In some parts of the country, over a quarter of dairy farmers are thinking about quitting.

Tensions between farmers and milk processors

Dairy farmers say part of their lack of confidence is due to the past behaviour of milk processors.

In 2016, Murray Goulburn and later Fonterra announced sudden and retrospective milk price cuts to farmers, sparking a crisis across the dairy industry.

Gary Kerr from the lobby group Farmer Power said it destroyed the trust between suppliers and processors.

“The impact was huge on dairy farmers, it really was,” he told 7.30.

“As a result there was suicides, there was family split ups, there was farmers walking off the land and that’s been ongoing since then.”

The Government asked competition watchdog ACCC to investigate, and earlier this year it released its long-awaited report.

One of the key recommendations was a mandatory code of conduct for dairy processors, which it claimed would “address problems arising from the large imbalance in bargaining power and information that exists between dairy farmers and processors”.

Mr Kerr said the Government should legislate the mandatory code of conduct.

“It means that farmers can change processors, if they want, without any penalties or breach of contract or anything like that if those processors aren’t offering a decent price,” he said.

Mandatory or voluntary code of conduct?

Almost every state dairy industry lobby group in the country has backed the mandatory code, except for the Victorian and national peak body.

Terry Richardson, from the national dairy farmer lobby group Australian Dairy Farmers (ADF), said it was reviewing the existing voluntary code first.

“ADF hasn’t backed a mandatory code or a prescribed voluntary code,” he said.

“We’ll continue with a review of the voluntary code of practice, which has been agreed or been put in place with the agreement or support of all the processors and all the state farming organisations.”

ADF receives around $1 million of funding from milk processors every year — double what farmers contribute.

Mr Richardson disputes claims that this influences the organisation’s policy positions.

“It’s not a bad look because there is a clear line of accountability for that money or the funds that we receive from processors,” he said.

He also denied recent media reports that two processors had threatened to withdraw their funding unless the ADF opposed the mandatory code of conduct.

Agriculture Minister David Littleproud said he was open to a mandatory code of conduct if there is broad industry consensus on the issue.

ADF said it hoped to declare its position to the minister by the end of the year.

Processors have been ‘despicable’

Ben Govett is a third generation dairy farmer, but like Mr Dalitz he thinks he will probably be the last in his family on the land.

“If there’s not major changes then I definitely wouldn’t want [my son] to go down that path,” he said.

“For the amount of work you put in, the reward’s just not there and I think there’s a lot easier ways to live your life and have a better life than dairy farming at the moment.”

He said dairy was a tough industry at the best of times, but the behaviour of milk processors had made it even tougher.

“The processors have been pretty despicable in their actions over the last couple of years, particularly Murray Goulburn and Fonterra with their clawbacks,” he said.

“While the other processors didn’t follow the same suit they still used it to their advantage and cut their own prices in the following seasons. I think that’s the big issue.”

Mr Govett is hoping the mandatory code of conduct will be introduced to restore the faith of farmers before too many more leave the industry for good.

“There’s always days where you think, ‘why am I doing this and why should I keep continuing in an industry where I’m not making any money and I’m working you know 100 hours a week in the rain and the heat and the cold mornings?’.

“But I do really enjoy the industry, I love cows, I love farming. So as long as I can hold on and the banks will keep dealing with me, I guess I’ll keep trying.”

7.30 contacted both Fonterra and Murray Goulburn but they declined to comment.

Letting Hay Rot In A Failing US Dairy Farm Economy

In recent years, milk prices have dropped. And dairy farms — including some in western Massachusetts — have sold off their cows. Some say their hay customers are disappearing along with the animals.

Dairy farmers often grow feed, like hay or corn, for their own cows, along with extra to sell.

As I trudged up a pasture on a dairy farm in Shelburne, Massachusetts, Pete Williams’s Jersey cows ambled towards me. Since they’re about 1,000 pounds each, it was a bit unnerving.

“You might actually want to stand by that post,” said Williams. “They will stampede behind me.”

As Williams moved a fence to give his “girls” — as he calls his cows — a fresh slice of pasture to eat, the animals followed him, tearing into the red clover, timothy and orchard grasses.

These hills were alive not with music, but with munching.

Williams explained how cows digest grass with four stomachs, one of which is like a fermentation tank.

“They can keep the grass in and they’ll bring it up,” he said. “They’’ll re-chew it actually, chew their cud and re-swallow it. Over time they get quite a bit of nutrition out of that.”

Dairy cows, beef cattle and horses also get nutrition out of hay — grass that’s cut and dried. Williams grows 100 acres of it. And he gathers it into huge round bales.

“They weigh just shy of 1,000 pounds,” he said. “I have gotten $50 reliably.”

Williams used to sell $6,000 to $8,000 worth. He calls it his “butter and egg money” — extra cash the farm could rely on.

“I lost very big, good customers of mine last year, and I have not been able to find a replacement,” he said. “Nothing that sold more than a dozen bales.”

Williams attributes his loss of hay sales in part to horse and beef farms that have gone out of business. And to the loss of dairy farms.

Since 2014, more than 14 percent of Massachusetts dairy farms have gone out of business. It’s been that long since farmers were paid anything close to the cost of producing milk.

“While the milk price has been crashing… so many farms have gone out,” Williams said. “Not only does that mean there are less animals eating hay, but a lot of those farms figured they could sell the cows, and get by just selling feed for a few years. And that’s collapsed the hay market.”

In other words: there are fewer cows, but still just as much hay.

Data in the above chart comes from the Massachusetts Department of Agricultural Resources. Chart by Heather Brandon for NEPR.

This year, with hardly any sales, Williams stuffed as much hay as he could into his barn. Then he dumped nearly 75 tons in a pile to rot. That was hay he spent time and money growing and baling.

Other dairy farmers in Franklin County, including those who have sold off their herds, also said they’ve lost hay customers.

Just up the road, Norm and Lisa Davenport pointed out their farm’s sweeping view. Until recently, for more than 100 years, the family milked cows there.

“It starts at the stone wall,” Norm Davenport said. “The cows over in the corner — those are the steers and now yearlings of what’s left of my milking herd.”

The Davenports sold most of their milk cows in 2005, and the last of them six months ago.

“It is very tough bookkeeping to say we were making money. We were treading water at best,” Norm Davenport said.

Not milking cows has been rough.

“It’s still difficult,” said Lisa Davenport. “It’s as much watching him, ’cause this has been his livelihood. It’s been his whole life. But yeah, it’s hard.”

The Davenports still grow hay. Last year, they sold only two-thirds of their crop.

The golden unsold remnants stretched atop a green hill. Norm Davenport pulled it out of the barn.

“Put it on the edge of the field, let it compost or rot, simply so you could get this year’s crop in,” he said. “Into the barn.”

This year, Davenport is growing a third less. Still, he’s got 500 fresh bales in. It’s worth $30,000, if he can sell it.

Ten years ago, he sold twice as much.

“Now we are in a position where everybody has hay,” he said. “Nobody has the animals to consume the hay. So that price is going to start dropping.”

And it’s not just hay that’s not selling.

The milking machines at Yazwinski Farm in Deerfield kept a steady pulse as Sam Yazwinski moved from cow to cow.

The Yazwinskis have sold another kind of cow feed since 1971: fermented field corn, called corn silage. They’ve also slowly lost customers over the last five years.

“We were selling corn to some farmers in Conway and in Colrain,” Yazwinski said. “And they both, due to different reasons, have sold. With the milk economy, finding a market for more is going to be a challenge.”

This year, the farm is growing only about a quarter to half of the corn for silage that they normally grow.

Chet Yazwinski, Sam’s cousin, said that at $65 a ton, selling less is a big loss to the farm — especially as milk prices drop.

“It helped pay off a lot of the bills,” Chet Yazwinski said. “It helped pay us to do a lot of things — expand, put in the new barns.”

Chet Yazwinski said that without that income, they have to be careful.

“You are not looking to expand, and you’re not looking to go out and buy anything new,” he said. “You’re slowly backing yourself into a hole, because you got to replace. Do our own repairs. Make sure you don’t break things, and be smart what you buy.”

Claire Morenon of Community Involved in Sustaining Agriculture said that when dairy farms constrict their spending, there’s a ripple effect in the broader farm economy.

“Even though there are not as many dairy farms here as there are other types of farms, they are spending a lot more money on feed, on veterinary bills, on repair for their equipment — that sort of thing,” she said.

She added that the challenges in the hay market are an example of that secondary impact.

“[It’s] the sort of not-enormously-visible-to-consumers impact that can happen when there’s a certain important piece of the agricultural system that starts to falter,” she said.

Pete Williams, whose family started a farm in 1871, says that if left untouched, hayfields would grow into brush, and eventually forest. Or in some cases, they’d be developed.

“They say it’s more than just the cows that we are losing,” he said.

Even though he will lose money, he said he’s “loyal” to the land, and will keep it open by haying it.

“But at this point, it’s a kind of a losing proposition, unless that market can perk up,” he said. “And I really don’t see a future where that could happen.”

Norm Davenport, who sold off his milk cows, wants to bet on that future.

“The whole notion of selling the hay is to keep the land open, with the hopes that someday we could get back into livestock farming, and generate income to sustain ourselves,” he said.

But it’s not clear how much longer these land stewards can make hay without making money.

New Zealand dairy farmers face a potential $78,000 income cut

Dairy farmers will not welcome a fall in Fonterra’s farmgate milk price. An update is expected later this month.

The average Fonterra farmer might be $78,000 less well off a year if dairy prices fall as predicted.

ASB analyst Nathan Penny said the dairy giant has forecast farmers will receive $7 per kilogram of milksolids for the 2018-19 season, but that is under threat after a 9 per cent fall in global dairy auction (GDT) prices in recent months.

Penny predicted the price would drop to $6.50.

Dairy NZ economist Matt Newman said while a 50 cent fall might not appear a lot, it did when translated into an average farmer’s annual earnings.

For a farmer with the average milking herd size of 414, producing 157,000 kg of milksolids, the “loss” would amount to $78,000. However, because farmers have not yet received payments at the $7 level, it is a loss of expectation.

ASB rural economist Nathan Penny says the bank's own lower prediction of $6.50 is also under threat.ASB rural economist Nathan Penny says the bank’s own lower prediction of $6.50 is also under threat.

Prices following Wednesday’s GDT were largely unchanged, but the result confirmed that key Chinese demand had shifted lower and taken prices with it, Penny said.

“In dairy terms the 9 per cent drop isn’t huge, it’s an adjustment but not a material change in markets.”

“Initially, with global demand still firm, the fall looked like it could prove temporary. But this no longer appears the case.”

“The catalyst for change has been the escalation in US-China trade tensions, but the mechanism through which dairy prices have been impacted has been currencies. In particular, the Chinese yuan has fallen against not just the US dollar, but also the New Zealand dollar,” Penny said.

Prices would come under further pressure once milk production came on stream in the next three months.

Penny said ASB’s own forecast of per $6.50 was under review.

Rabobank analyst Michael Harvey was more optimistic, saying the GDT result would be encouraging for dairy exporters given it brought to an end four consecutive falls at the previous trading sessions.


Feds compel dairy farmers to label natural milk ‘Imitation Milk Product’

A Maryland creamery is suing the federal government over what it’s telling them to put in their “all-natural” milk.

The farmers refuse to pour vitamin serum into their milk. So, the government says it must be labelled “imitation milk product.”

For more than 30 years, early every morning, farm owners Randy and Karen Sowers have been milking more than 100 dairy cows.

Later in the morning, their employees at South Mountain Creamery in Middletown, Maryland sanitize and bottle the milk.

But one thing the Sowers refuse to do is to add in the government-mandated vitamins to skim milk.

“You buy it by the gallon,” Randy Sowers says. “You draw it up in a syringe and squirt it in a tank and mix it up. But that’s not what we’re about. We’re about all natural.”

Whole milk includes Vitamins A and D. Cut out the fat to make skim milk and you cut out the two vitamins. Federal regulations say farmers need to buy and pour vitamin serum into their milk to make skim milk have as many vitamins as whole milk.

“Milk is the most perfect food in every way,” Randy Sowers says. “It’s got calcium and riboflavin and all these things naturally in there that your body can absorb and use where a product that you put in there that’s man made or extracted is not the same.”

While they can sell skim milk in Maryland, the Food and Drug Administration requires the Sowers family to label their skim milk as “imitation milk product” if they want to sell it across state lines.

The Sowers refuse. And with the help of the Institute for Justice, a legal advocacy group, they are suing the FDA in federal court.

“It is not imitation,” Karen Sowers says. “It is the real thing.”

The FDA declined to answer our questions about the Sowers lawsuit, pointing us to read federal regulations about fortifying milk with vitamins.

The USDA led the effort to require Vitamins A and D in milk during the 1930’s to fight back against child bone diseases.

Dairy farming is a daily struggle.

“We want to do the midnight milking,” Karen Sowers says. “We usually get up pretty easy compared to getting up a second time, it’s our harder time getting up at the 8:30 one.”

And the Sowers look to pass their farm onto family. But before that, there’s one more struggle, which could have legal impact for farmers nationwide.


Source: WJLA

Supermarket giants hurting Australian dairy farmers more than the drought

As the drought worsens across New South Wales and Queensland, some farmers say it’s the supermarket giants sending them broke, not a lack of rain.

Third-generation dairy farmer Peter Haertsche says he’s “angry and frustrated” at the handouts being given to farmers, which he says don’t fix the real problem.

Peter is based at Augathella in Queensland’s central west and says other farmers are being beaten into submission by the drought.

“It was heartbreaking to go through Charleville yesterday, that town is dying.

“A lot of the shops are boarded up. They’ve had no meaningful rain since 2011.”

For Peter though, it’s the price war being waged by Coles and Woolworths that is killing his business.

“Alan, don’t rile me up this early in the morning.

“Every group’s needs are different and our needs are for a better price in milk.

“I’ve got plenty of water. I water-proofed my farm 10 or 15 years ago.”

Peter’s business partner Jim Strong says the government must step in and regulate the industry.

“80 per cent of the milk is being bottled and consumed by the consumer.

“Why can’t that 80 per cent be a regulated price of $1.50 a litre, immediately?”



Calling it Quits – More than 4% of Wisconsin Dairy Farmers left the business so far in 2018

To say that the Wisconsin dairy industry has had it tough this year is an understatement.  In the past seven months, 382 dairy farms have left the business. That’s an attrition rate of 4.3%, and there are still five months to go. At this time last year, 283 Wisconsin farms had exited the business, an attrition rate of 3% year-to-date.  With a total of 465 dairy farms left the business by year-end in 2017.

On the positive side, just 44 farms called it quits in July which was 10 fewer farms than had left the business in June. There are currently 8,419 dairy farms licensed in Wisconsin, according to the Wisconsin Department of Agriculture, Trade and Consumer Protection.

Canada Importing Less Milk Protein from the US

According to a USDA report, Canadian imports of milk protein substances (MPS) dropped 37% in 2017 compared to 2016 levels. Over the same period Canadian cheese production grew 7% in 2017. Since Canadian cheese makers have used increasing volumes of MPS in cheese manufacturing, this drop off in imports suggests MPS is being sourced domestically.

The USDA report shows that total imports of liquid and dry MPS from the U.S. fell 51% in 2017. This could be due to the Class 7 pricing system set in place in February 2017 which provides Canadian cheese manufacturers greater access to domestically produced MPS. When the Class 7 system was established, several U.S. manufacturers lost business and were forced to terminate contracts for around 100 dairy producers in Minnesota, Wisconsin and New York. The status of the Class 7 system is one of the negotiating hot buttons in NAFTA negotiations. 

According to a USDA report, the U.S. is the largest supplier of MPS to Canada, taking advantage of duty and quota-free status for MPS under the North American Free Trade Agreement (NAFTA). Beginning in September 2017, the EU also had duty and quota-free status while product from New Zealand, Australia and Switzerland are under a tariff-rate quota system. 


Composite Dairy Cattle Registry – 5th Anniversary

The Composite Dairy Cattle Registry is celebrating 5 years of service to owners and breeders of “non-traditional” dairy breeds in North America (USA and Canada), the UK and other countries.

Breeds represented in the registry are Milking Fleckvieh, Montbeliarde, ProCross, Viking Red’s, Norwegian Reds, the still developing North American Red along with other crosses and with our open herdbook the traditional dairy breeds.

In celebration of our 5-year anniversary we are offering very special pricing during August 1stthru the 31st, 2018.Registrations for animals of any age can be registered for $5 USD each.

Membership in the Composite Dairy Cattle Registry is $10 USD for Juniors and $25 USD for Individuals, Partnerships/Syndicates and Corporations.

Visit our website for membership and registration applications.

Our Mission: To provide programs and services that enhance the economic and genetic potential of Composite Dairy Cattle. We pledge to strive for the success of our members and the dairy industry by creating marketing opportunities that add economic value.

Currently, we have over 300 bulls listed on our website in the “Bull Listings” with cross reference information.This list is continually growing.Our membership includes members from the USA, Canada, UK and other countries.

Why should you register your animals?

Registering your animal provides documentation on their parentage that aid in tracking an animal’s heritable traits. Also, a registration certificate has the potential to add value to your animal and its offspring.

Dr. Les Hansen, dairy geneticist at the University of Minnesota, applauds and supports our efforts.His comment to us is, “My observation is you are making remarkable progress in a short period of time in getting people to think more open-mindedly about allowing the accurate identification on cattle from the non-traditional dairy breeds in the U.S. as well as their crossbred offspring.”

Become part of a growing organization!

Interest in crossbreeding continues to grow in use and popularity not only in North America (USA and Canada) but in other countries as well.Through the dairy organizations and their International representation, dairy associations and registries of the US will increase their International presence in other countries.Increasingly, the US will become the genetic pool from which the International dairy community will continue to draw.This would indicate that the worldwide activity of US dairy organizations will expand in the future, serving both the domestic as well as International interests.

In his book, Gus Bowling stated, “It may be difficult for us to think of a time, in the dairy cattle breeding industry, when there were no pedigreed cattle, no breed registry organizations and no Herd Books to which we could go for aid in building pedigrees or identifying bloodlines within the breed.”

By networking together with other owners of “non-traditional” breeds and crossbred animals, as the old saying goes “there is strength in numbers”, then the voice will get louder and carry more weight.The Composite Dairy Cattle Registry is continually searching for solutions and improvements in the system and working toward building bridges between different segments of the dairy industry.

So, PLEASE take the time to visit our website,, and while you are there, go to our “Fees and Forms” page and print out a membership application and join today!


Fonterra charges premium for A2 milk but pays farmer the same

Selling for $3.99 a litre, A2 milk is the highest priced on supermarket shelves.

Consumers are paying top price for the newly launched Anchor A2 milk, but Fonterra is paying no more to the farmer who supplies it with the special variety.  

That approach is at odds with the deal the dairy giant has with organic producers in which it pays farmers well over $2 extra per kilogram of milksolids, compared with conventional farmers.

The new line of milk is fetching the premium price of $3.99 a litre in North Island supermarkets.

Federated Farmers dairy chairman Chris Lewis said it was smart of Fonterra to be charging a high price for the milk while paying suppliers the same.

“If they are managing to get a premium for the milk, then good on them.”

Synlait supplier and Canterbury farmer Michael Woodward said he received 20 cents per kg for his A2 milk above conventional.

“Fonterra’s not offering any incentive for farmers to shift over because they don’t want to be seen to be disadvantaging farmers who supply it with A1 milk,” he said.

A1 milk contains a beta-casein which has been linked to a rising tide of type 1 diabetes, although Fonterra has argued against the findings.

However after years of holding out, it has now joined forces with the A2 Milk Company, which offers a proprietary testing system and a marketing brand that Fonterra is keen to exploit.

Fonterra Brands New Zealand acting sales director Grant Watson said “the consumers have spoken” as the reason why Fonterra had dipped its toe into A2.

“A2 brings to Fonterra a fantastic product that meets consumer needs. Twenty years ago we had two varieties of milk, today we have 10, ranging from organic to lactose-free, there is a need there and we will deliver.”

“It’s about providing consumers with choice, we can create value across both varieties. A1 milk is great, A2 is great. We believe it’s priced appropriately, it shows the premium nature of the product,” Watson said.

Following the launch, there was a greater demand than predicted.

“We’re only a few days into this but we’re seeing significantly higher demand than we originally expected, it will take some time before we truly understand the demand,” Watson said.

A2 Milk chief executive Jayne Hrdlicka said the company’s prospects were positive. At one stage this year it was the largest company by capitalisation on the New Zealand stock exchange.

“It’s the number one premium milk brand in Australia, we have been pulled into China driven by consumer demand, we are also selling fresh milk in China, and are very excited about the demand from US consumers.”

It had supply partnerships with Synlait and Fonterra only, and distribution relationships in China and the United States. South-east Asia was also a relatively untouched market.

Asked why Fonterra did not develop its own testing system, Watson said there was “no point in reinventing the wheel, and more importantly the A2 brand is very strong”.

Hrdlicka said the companies could do things separately but together they would be stronger, and get better and faster results.

Lewis said farmers were taking the move to A2 cautiously because they were unsure of the demand, did not want to flood the market and shifting their herds over to A2 was costly and time consuming.

His own herd was 66 per cent A2, but it would take another five years before he converted it over completely.

“I could separate them out into two herds now but I’m just watching to see what happens,” Lewis said.

Fonterra said in the future it would be sourcing A2 milk from a Fonterra-owned farm near Palmerston North.


Source: Stuff

Nut Milk Exposed By Hilarious Facebook Video

A viral comedy video on Facebook exposes “nut milking” and the labelling of plant-based beverages that are often called “milk.” Nick Saik at Know Ideas Media clearly had some fun making this video about “organic, grass-fed nuts” and the liquid that we get from them. Yes, it’s all very satirical.

Recently USDA and U.S. the dairy industry has been working to implement and enforce the rules about what products can call themselves milk. Dairy farmers are making the case that nut milks aren’t really milks, because they don’t come from lactation. 

“Milking a 600 kg Holstein, now that’s easy. Milking a 1 gram almond, that’s hard.” That statement might raise some eyebrows for dairy farmers, but it’s intended to use humour to highlight to the consumer just why “Nut Milk” is not Milk.

The video made its debut on Aug. 3 by the Facebook page seeking “to bring pragmatism back to topics that are too far divided to allow for mutual understanding.

And though this video is satire, it asks a very serious and important question at the end.

Dairy Herd Expansion Neutralized to Balance Dairy Market Values

The NASS estimate of total milk cows at mid-year was unchanged from a year earlier.  This reconciles with other data from NASS showing less than half a percent increase in cows being milked during the spring quarter compared to the same quarter in 2017, which was a decline from the winter quarter milking herd of 3,000 cows (9.403 million cows).  Milk production during the spring quarter was up 0.8% from a year earlier, which compares to a 1.5% increase, year-over-year, during the winter quarter.  The slowdown in production reflects a sensitivity to lower milk prices (down close to 10% this spring from a year earlier while alfalfa hay prices are up close to 20% over the same interval.  The milk-feed price ratio published by NASS is at its lowest level since the spring of 2016.

The crux of the challenge for the dairy industry is ebbing demand for fluid milk.  Fluid milk product sales have been in a downtrend for several years, with no sign of stabilization yet.  Fluid milk product sales volumes in May were down 3.2% from a year earlier, one of the bigger year-over-year declines in the last few years.  Countering these declines, usage of cheese and butter are gaining, but not by enough to offset fluid milk usage declines and increases in milk production. 

American-type cheese usage has been on a stellar growth path this year, resulting in a reversal of trend in building inventories of this type of cheese in cold storage.  Mid-year American-type cheese inventories in cold storage were down 1% from a year earlier and cheddar cheese prices at the wholesale level were slightly higher than a year ago during the spring quarter.  The situation for Italian-type and other cheeses is not as sanguine as the American-type cheese market.  Domestic usage growth was impressive during the winter quarter but lost some momentum during the spring.  This is a bit of surprise, given the impressive growth in restaurant and foodservice sales during the quarter.  Inventories of these types of cheese in cold storage are up 16% from a year ago at mid-year.  The Class III milk price has suffered, accordingly.


Union concerned at growing price gap for milk producers

UFU dairy committee chairman, William Irvine, believes farmers are rightly concerned about the growing gap in base milk prices. 

“The fodder issue is on everyone’s mind. We are facing a potentially costly winter with more bought in feed and need a strong cash flow now to prepare for that. The price disparity between local processors simply cannot be justified,” warned Mr Irvine.

The committee chairman and County Armagh dairy farmer says farmers receiving a milk price 2.5p/litre less than what others are being paid are automatically at a disadvantage.

He added: “Put simply, many farmers feel short-changed. What they see is one processor paying what the market is capable of delivering, while at the other end of the scale, others are seemingly dragging their heels. The reason for this disparity needs to be explained by these businesses, whose suppliers are becoming more and more disillusioned.” The UFU says it is urging all dairy processors in Northern Ireland to pay what the market is returning.

“Only then will local dairy farmers have a chance of tackling what could be a challenging autumn and winter,” concluded Mr Irvine.

Meanwhile, AHDB Dairy is reporting a general slowdown in trade on wholesale markets that has minimised increases in the market value for milk in July. Despite cheese markets remaining firm through the month, butter and skimmed milk powder (SMP) prices fell on the back of limited demand.

The slowdown in the market in July, in itself, is unlikely to generate upward movements in farmgate prices going into the autumn. Other factors, such as any impacts of higher on-farm production costs on milk supplies, will also influence how milk prices move through the next few months.

According to AHDB, July has been a quiet month for wholesale dairy trading, as the holiday season kicked off. Buyers were seemingly not drawn back into the market despite production falling towards the seasonal trough and concerns over the increasing dry, hot weather.

Cheddar seems to be one of the only markets with a bit of positivity surrounding it at present. Stocks do not appear to be ample and, despite being relatively quiet on the trading front like the other markets, prices held firm in July.


Source: Farming Life

Idaho dairy losing over $4,000 a day as a result of trade disputes

SunRidge Dairy in Nampa says it’s losing more than $4,000 a day.

The family dairy milks 2,900 cows in the Treasure Valley, sending roughly 250,000 pounds of milk down the road to the Sorrento Lactalis cheese plant every day. Co-owner Adrian Kroes and other local dairy producers saw a 15 percent drop in milk prices below what was projected for July. Kroes estimates they’ll close the month of July $150,000 under projected revenue, and stand to lose at least $100,000 more in August.

State dairy associations say SunRidge Dairy isn’t alone, and despite ongoing industry labor shortages, there’s one obvious reason for the loss.

“Our dairymen have sustained tremendous losses already,” said Rick Naerebout, chief executive officer of the Idaho Dairymen’s Association. “We were starting to see a resurgence — but then the trade war started.”

Tariffs affect Idaho

Earlier this year, the Trump administration placed tariffs on steel, aluminum and billions of dollars of Chinese goods, prompting retaliatory tariffs on U.S exports from key trade partners.

Idaho businesses — especially in the agricultural industry — are already paying for these retaliatory tariffs. Canada, China and Mexico were among Idaho’s top foreign export destinations in 2017, according to the Idaho Department of Commerce.

In June and July, Mexico put tariffs on cheese, pork, apples, potatoes, steel and aluminum, among other products; Canada put tariffs on steel and aluminum; and China upped its tariffs on dairy, beef and other agricultural products to 25 percent. The European Union in June also imposed tariffs on several U.S. exports with significant Idaho industries — the largest being kidney beans, according to an analysis by the Idaho Department of Commerce.

Before retaliatory tariffs, the U.S. enjoyed extensive free trade with both Canada and Mexico under the North American Free Trade Agreement (NAFTA). Renegotiations of trade agreements with both countries are ongoing, with rumors of agreements looming.

In 2017, Idaho exports to Canada and Mexico topped $1.07 billion, with $353 million more in exported goods to China.

Idaho State Department of Agriculture spokeswoman Chanel Tewalt said the tariffs have an undeniable effect on Idaho’s economy. Twenty percent of all sales in the state come from agriculture, Tewalt said. Their department has been fielding worried calls from businesses across the state.

“When you look at all states in the United States and you see how much GDP is agriculture generated, we are the fourth highest in the nation,” Tewalt said. “When there are disruptions in the ag market, it will be felt in a state like this.”

Stress for dairies

Before tariffs were imposed, Idaho’s dairy industry was already feeling the strain. Low unemployment is difficult for an industry that has no access to a temporary worker visa program, such as the H-2A agricultural visa program increasingly used by Idaho farmers. The lack of access to foreign worker visas means Idaho’s dairy industry has historically employed more undocumented foreign workers than in other industries, Naerebout said. A national crackdown on immigration threatening a sparse workforce creates uncertainty for dairy producers and employees alike.

The dairy industry represents about one-third of Idaho’s agricultural sector, according to an analysis by the Idaho Dairymen’s Association.

“There is a tremendous amount of stress for the average dairy producer right now,” Naerebout said. “Our dairymen are growing increasingly frustrated that their voices are not heard.”

Mexico alone imported more than $14 million in Idaho cheese and whey products in 2017. Representatives from Sorrento Lactalis are expecting the tariffs to hurt their Nampa cheese plant. Ninety percent of the milk they use comes from Treasure Valley producers.

“Mexico is an important export market for our cheese, and the majority of the products we export to Mexico are manufactured at our Nampa facility,” spokesman Pierre Lorieau emailed to the Idaho Press. “The tariffs imposed by Mexico in retaliation for U.S. tariffs on Mexican steel and aluminum are likely to have a significant impact on our business to Mexico, and therefore will adversely affect our Nampa facility.”

Naerebout estimated Idaho dairy producers have lost $1-2 a cow every day since 2018 began. That matched with SunRidge Dairy in Nampa.

“It’s been few years since it’s been a good year,” Kroes said. “There was hope that the second half of this year would see a recovery in milk prices, but that’s kind of been pushed back.”

The trade war has cut both ways, however. While Idaho milk producers are suffering from retaliatory tariffs, some Treasure Valley businesses are dealing with the impact of Trump’s tariffs on Canadian aluminum.

Fruit growers feel it

Chinese tariffs on apples and cherries as of July 6 have risen to 50 percent from the previous 10 and 25 percent tariffs imposed in April, according to the Idaho Department of Commerce.

Idaho is one of the top-five cherry-producing states along with Washington, Oregon, California and Michigan. In 2017, China became the top market for Northwest cherry exports with nearly 3 million 20-pound cases imported, according to the Northwest Horticultural Council.

Sally Symms, vice president of sales and marketing at the Symms Fruit Ranch in Caldwell, said the tariffs have forced farmers to reduce their prices in order to sell their fruit. The Chinese market is now significantly less accessible for farmers, creating an over-supply of cherries within the U.S. markets.

“You can’t have the third-biggest market closed without affecting all other markets,” Symms said.

Cherries that are shipped to China are grown specifically in size and quality for their market. Now, farmers have had to find other options to sell.

Other nations have also imposed tariffs on apples and cherries. Mexico’s 20 percent tariff on apples has been in effect since May. Last year alone, Mexico imported nearly 14 million 40-pound cartons of apples, according to the Northwest Horticultural Council.

“Everyone is very hopeful that the tariffs will be removed,” Symms said, “and not only in China.”

Relief still uncertain

The USDA’s announcement that it will dole out $12 billion in emergency relief to farmers and producers impacted by the retaliatory tariffs wasn’t a comfort to some Idaho farmers.

“I’m not a big fan of subsidies,” Kroes from SunRidge Dairy said. “I think they end up harming the industry at the end of the day. I can understand that there may be a need for it. It all depends on how it’s done.”

Symms declined to comment on the possible relief because of the lack of details provided so far. She wasn’t sure if it would help Symms Fruit Ranch.

Naerebout said he and other dairy producers remained skeptical the plan will help Idaho dairies, although details of the emergency relief program remain sparse. The average herd size for Idaho dairies is 1,400 cows, Naerebout said, compared to the national average of 300 cows. Naerebout said such relief programs usually have a subsidy cap based on that national average.

“They won’t have as much impact on Idaho producers as across the country,” Naerebout said.

Naerebout said there’s already a “misconception” that dairies are a heavily subsidized industry, and independence is point of pride for the average dairy producer. Instead of subsidies, Idaho dairies would prefer the federal government broker a rapid solution to the trade dispute, reopening the markets they’ve enjoyed access to for more than a decade.

But while Idaho businesses are suffering the consequences of the trade war, the solution is still out of their hands.

Idaho has been losing about 10-15 dairies a year, according to Naerebout. If the trade dispute isn’t resolved quickly, Naerebout thinks they could see double that number close by the end of 2018. There are currently 472 dairies and more than 500,000 milk cows in Idaho, according to the Idaho Dairymen’s Association.

“The end result is going to be the loss of family business in Idaho,” Naerebout said. “We’d like to try to avoid that in Idaho. We can only do that at the federal level. There is nothing we can do to fix this at the local or state levels.”


Michigan dairy farmers among those affected by trade war

The ongoing trade war is taking a toll on some Michigan farms and families.

In the last several months, President Donald Trump has increased tariffs on imported goods. In response, countries like China and Mexico have increased their tariffs.

One of the goods the United States exports is dairy products.

Shelli Adamczyk spoke with farmers and shows us how one of Michigan’s top industries could be affected.

Amy Martin operates Gingrich Meadows Dairy in Osceola County. Her nearly 500 cows produce milk that is shipped within the U.S. and internationally.

“Agriculture as a whole is really huge for the entire Michigan economy,” Martin said. “We are unfairly tariffed with products going out and in, in any industry.”

Those tariffs include countries like Mexico and China, which Martin says is making it difficult to pay the bills.

“I think this month we probably lost about $25,000 or $30,000 just for this month, the month of July,” she said.

Experts say Mexico is dairy’s biggest trading partner, and this trade war came at the worst time for dairy producers.

“We’ve already gone through three years of severely depressed margins on dairy farms, and now we’re going into our fourth year, and now it’s just an added effect,” dairy farmer Ken Nobis said. “If it were just a one-year effect, it wouldn’t be nearly as bad, but we’ve just been through three years where you were lucky if you broke even.”

While dairy farmers are taking a hit, experts don’t expect this to affect the price of milk for consumers.

The tariffs increase the price of milk exported to those counties, which means the price for milk could even go down in stores, because there’s more product remaining in the U.S.

“With the addition of the tariffs, it has made us noncompetitive with foreign competitors,” Nobis said.

Some farmers have already been unable to keep going.

“We’ve already lost quite a few,” Nobis said. “If this tariff issue goes on any longer, I think we’re going to lose a lot more.”

The Department of Agriculture has recently announced that starting next month, a $12 billion subsidy plan will be available for farmers who have been impacted by the trade war.


Dairy MPP is delivering in 2018

Driven by improvements made by congress in the Bipartisan Budget Act of 2018 and USDA’s efforts to inform dairy farmers about the enhanced program, as of early July more than 21,000 dairy farm operations had enrolled in the Dairy Margin Protection Program for the 2018 coverage year. More are still putting the final touches on their enrollment applications. Once final enrollment is tallied, more than 50 percent of the licensed dairy operations in the U.S. will be participating. These farmers purchased MPP coverage on 131 billion pounds of milk, representing approximately 60 percent of the U.S. milk supply.

The total number of dairy farms enrolled in MPP for 2018 was up nearly 1,000 farms, or 5 percent, from 2017 enrollment levels. However, while farm enrollment was up over prior-year levels, the amount of covered milk was down 14 billion pounds. The decline in covered milk is likely due to farmers opting to purchase protection as close to 5 million pounds as possible — the average volume of covered milk per farm is slightly higher than 6 million pounds. More important than enrollment levels, however, is how farmers are using the program to protect against the risk of margin declines.

In 2016 and 2017, fewer than 25 percent of participating dairy operations elected buy-up coverage above the catastrophic $4 per hundredweight coverage level. This year, 95 percent of the enrolled dairy operations elected buy-up coverage and many of those farms elected the highest coverage level — $8 per hundredweight. USDA’s flexibility in allowing farmers to finalize coverage options until June 22 contributed to the upturn in buy-up coverage participation. Figure 1 highlights historical MPP enrollment and buy-up participation rates.


Following the enhancements to MPP, USDA made the coverage retroactive to January 2018 for farmers electing to participate. As highlighted in a recent Market Intel, For Some, New MPP Makes Plenty of Cents, which can be found at, MPP triggered payments at the $7 through $8 coverage levels from February through May. As of early July, USDA has made over $155 million in program payments to dairy operations participating in MPP during 2018. The average payment rate through May was $7,400 per dairy operation, or 29 cents per hundredweight.

At the state level, Wisconsin dairy farmers have received $37 million and farmers in the northeast have received more than $30 million, see Figure 2. To receive these and future benefits, dairy farmers across the U.S. paid more than $65 million in premiums and administrative fees — resulting in a current net benefit of more than $91.5 million. This total will get larger as MPP is certain to be triggered in the coming months due to trade-related price declines.

Currently, USDA’s online MPP decision tool projects for margins to remain below $8 per hundredweight through September, meaning dairy farmers should expect to continue receiving program payments for the next few months. While the MPP payments will not make a dairy farmer whole, it does help to offset recent milk price and margin declines experienced in the market.

For example, July Class III milk futures, a function of wholesale cheese prices, have fallen by 14 percent, or $2.30 per hundredweight, since the beginning of June. Because of these price declines, the projected MPP margin for July declined by more than $1.40 per hundredweight. The price decline comes despite strong dairy product exports, tighter American cheese stocks and slower than anticipated growth in U.S. milk production but coincides with increased trade uncertainty related to Chinese and Mexican tariffs on U.S. dairy products.


Not only will MPP continue to make payments in the coming months, but both the House and Senate farm bills include further improvements to the recently enhanced MPP. The conferenced version of MPP is certain to be an improvement over the original program design. Thus, passing a farm bill on-time is critical to ensure the additional MPP enhancements are in place before the 2019 sign-up.

In addition to the farm bill changes in the dairy title, the Farm Bureau-developed Dairy Revenue Protection insurance product is expected to be available in the coming months, providing dairy farmers another tool in the risk management toolbox. Combined, the enhanced MPP, Dairy Revenue Protection and other risk management tools will provide a much more robust set of risk management tools for dairy farmers going forward.

In addition to these new and retooled dairy safety net programs, USDA also recently announced plans to provide $12 billion in assistance to farmers impacted by trade disruptions. The three-part plan includes a Market Facilitation Program to assist producers through payments to address the impact of tariffs, a Food Purchase and Distribution Program to buy and distribute perishable commodities and a Trade Promotion Program to aid producers in finding new markets for U.S. agricultural exports. The $12 billion package of agricultural assistance announced by the administration will provide temporary relief to dairy farmers who are on the front lines of recent trade disputes.

Combining all of the instruments, even more help is on the way for the dairy industry.


US dairy exports struggle amid a tariff hit environment

The US dairy industry is struggling under the weight of tariff measures in Mexico and China, with the full industry implications only just starting to come to light.Since the end of May 2018, tariff measures of 20 to 25 percent have been imposed on US cheeses going to Mexico, while tariffs of 25 percent have been put in place on US dairy products going to China, in addition to the 8-12 percent tariffs that China already imposed on dairy products from most suppliers around the world.

Speaking to FoodIngredientsFirst, Jaime Castaneda, Senior Vice President, Strategic Initiatives and Trade Policy Executive Director at the National Milk Producers Federation and US Dairy Export Council, accepts that no figures are out yet but admits that dairy farmers are already feeling the pinch. “Anecdotally, I can only tell you that some shipments and orders have been canceled or that companies are starting to say that they will cover some of the costs of the new tariffs, or they will lose the customer,” he notes.

“We certainly have been severely impacted by these tariffs and we have our two larger markets that have been affected. China is obviously a growing market and I’m sure that many of the companies are having to make concessions but that can only be done temporarily; so there is a point at which all of our exports will get hit,” says Castaneda.

Last week, the US Department of Agriculture (USDA) announced that it is preparing a US$12 billion economic assistance program designed to help dairy farmers and other agricultural producers suffering from the effects of retaliatory tariffs imposed by Mexico, China and other key trading partners. Recent NMPF economic estimates indicate that the tariffs will cost US dairy farmers US$1.8 billion just through the remainder of this year, based on the decline in future milk prices since the retaliatory tariffs were implemented.

NMPF has been engaged in ongoing discussions with USDA about how to reduce the economic harm caused by the trade disagreements between the US and other nations. The new plan will use USDA’s authority to help farmers through a combination of direct payments to farmers, product purchases for distribution to feeding programs, and additional export development assistance. Further details about the exact nature of the relief measures will be unveiled later in the summer, USDA officials have said.

Castaneda welcomes the move but stresses that it is too early to comment in detail until specific numbers are disclosed. “We will wait and see what it means for dairy farmers and traders. We don’t know at this stage how much is going be divided out for dairy farmers,” he notes.

“Farmers need the assistance because [this occurred] just when they started to see that the market was improving, as was clear from the futures on the Chicago Commodities Exchange for cheese and powder,” he points out.

“Before the tariffs were announced (last fall), they were looking good and people were confident that they were going to recover and start making money after a couple of years of that not being the case. Now all of that has vanished. I know many farms who called it quits. They were hanging in there because of the futures’ higher prices, but for some that stopped when the prices decreased significantly,” he claims.

The Mexico situation accounts for most of the lobbying efforts of US dairy to date as the impact is so vast and was the first retaliation to strike the industry. Cheese accounts for approximately US$400 million of the US$1.2 billion in dairy sales to the country as a whole. Since a Free Trade agreement is in place with the country, no tariffs existed before the recent spat.

“We have focused a lot of our lobbying efforts on Mexico to finish the NAFTA negotiations. That is critical. If you are paying 25 percent on exporting to Mexico, it is hurting everybody in the US. Even for those who are not selling cheese, it is critical to the pricing for farmers. We are looking to conclude the negotiations and make sure that we open markets in Canada and save what we have with Mexico,” he says.

“China is probably going to take a little longer. So we will see what will happen, but we will continue to ask the administration to make a deal with the Chinese and ask the Chinese themselves to remove us from their retaliatory list. So we have two angles of asking for change,” Castaneda adds.

The dairy implications are huge for a relatively new large-scale exporter. “The US went from a country that exported very little 20 years ago to being one of the most significant sellers in the world. If you look at it by country, rather than by region, [i.e., the EU bloc], we are the largest exporter of several products including Skim milk powder and depending on the year cheese too. This is affecting not only producers who have seen their prices go down even further but also exporters, traders and manufacturers who have worked extremely hard to gain markets in China and Mexico,” he notes.

But can the US domestic market make up for the shortfall in exports by taking up some of the potential overcapacity? Castaneda admits that there will be a danger of cutting prices and flooding the US dairy market.

“Certainly if there is no other market we will have to go somewhere. There are a number of different avenues. I don’t know where they are going to go. Most people are trying to maintain the relationships that they have developed,” he says. “That may not happen all the time, but it is what people are trying. In some cases, there may be movement from some of the orders that have been canceled to try to find a home somewhere else. So normally when you do that in a short period of time you have to do it as a discount, which is not ideal,” Castaneda adds.

Either way, with tensions having eased between President Trump and the EU on potential tariffs of European products, it does not look like US imports of dairy products from the bloc will go down as a result.

Innovation with US dairy ingredients is not slowing down amid these unpredictable times. At the IFT Food Expo 2018, USDEC presented two prototypes that bring dairy protein benefits to life in on-the-go applications: Lemon Ginger Ice Pops with Whey Protein and a Savory Asian Granola with Whey Permeate/Protein Crisps.

In a video interview with FoodIngredientsFirst, Vikki Nicholson at USDEC explains: “We see opportunities in a multitude of applications. Beverages are still hot, snacking is a great opportunity. We also see unique opportunities in bakery and desserts for dairy proteins. For example, we are presenting an Asian inspired high protein granola, with whey protein crisps. Also, it has the flavor profiles of sriracha and soy in order to help give a nice snack, especially for adults, which allows you to engage in having a nice handheld snack that is not heavy. Granola gives a different spin to really show how you can expand on dairy ingredients within the snacking category.”


Source: Food Ingredients 1st

A crisis for dairy farms threatens open space

For the past two years federal and state governments have been accelerating their efforts to help keep farms in business. The efforts have taken several forms including support of local and regional markets to buy what the farms produce. The most innovative was something that farmers used to take for granted, encouragement to ensure that the next generation could take over with some hope of success as the average age of a farmer continued to climb.

It is too early to say whether these market-based approaches or the support for young farmers, both those born on the farm and those attracted to the profession, will have much of an effect in a timely manner.

Instead, we have learned in the past days that forces beyond those governmental efforts are having effects that unless met quickly and decisively could be irreversible.

While this might not appear to be of concern to those who are not in the industry, they have to keep in mind that farms are in many places the last line against development, the best way to ensure open space in a region where each week seems to bring more stories about more developments with hundreds of houses all on land that would be open no more.

The immediate crisis facing farmers is the low price and low demand for milk that has many, especially in Sullivan County, facing a day that nobody ever thought would arrive. Unless things change, some time this summer many farms might find out that nobody wants to buy their milk.

Michelle Lipari, agriculture educator for Cornell Cooperative Extension in Sullivan County, explained in a story in the Times Herald-Record that the whole dairy industry is suffering from low prices and surplus milk.

At “pretty much all these plants and cooperatives there is too much milk and not enough demand, which is what you’re seeing with a lot of the other cooperatives also having to let farmers go.”

One traditional source of relief used to be the federal farm bill which this time around has been riddled with policies that the Trump Administration and Republicans in Congress, including Rep. John Faso of Kinderhook, promoted to the detriment of farms in the Hudson Valley.

Rep. Sean Patrick Maloney, D-Cold Spring, explained why he voted against the bill offering a long list of harmful provisions including inadequate funding for the young farmer program and for programs that helped farmers develop specialty crops to diversify as well as reductions in crop insurance and a lack of support for research needed if farms are going to change in the future.

That fight will continue in Washington. In the meantime, those who value the job that farms do preserving open space need to encourage state efforts to both help dairy farms diversify to stay in business and to purchase development rights on land that now appears more likely to go on the market.

The best way to keep open land open is still to keep it active as a farm. But if the market is moving against that, the state will need to start spending much more for such preservation.


Source: Record Online

NJ dairy farms fighting for survival against milk price control

At the end of the 20th century there were more than 200 commercial dairy farms operating in the Garden State. Not anymore.

“We’re down to 50 dairies. We have 5,500 cows in the state,” said state Agriculture Secretary Doug Fisher.

“We’ve lost some dairy operations in the last several years due to the price being paid for milk. This is the 4th year in a row that farmers are receiving less money for their milk than it costs to produce it.”

Fisher points out dairy farms are an important part of Jersey’s agricultural industry.

“It’s still big business. It’s $22 million of revenue just for the milk alone to our farmers in New Jersey; 119 million pounds of milk production in our state.”

Fisher said the dairy farms that are left are doing many things to help bolster the bottom line, including offering consumers the opportunity to buy Jersey fresh dairy products locally at their own facilities.

“We have for instance the Red Barn milk company in Hunterdon County. Last year they started selling the first Jersey Fresh ice cream, strictly Jersey milk.”

Fisher noted Fulper Farm in Lambertville offers a variety of products “like fresh mozzarella, yogurt, ricotta cheese, farmhouse cheddar and kefir. They even have folks come onto the farm as an agri-tourism adventure.”

U.S. Agriculture data shows farmers spend $1.92 for each gallon of milk they produce, but only collect about $1.32 when it’s sold to processing companies

Fisher pointed out “it’s not just in New Jersey though, it national.”

He explained the current milk pricing formula created by the federal government is “a hodgepodge of rules and regulations that are put together. In many ways the formulas are old fashioned, when milk couldn’t travel as far, and these rules definitely need to be restructured.”

Nationally the U.S. Department of Agriculture says there are 40,219 dairy farms across the country, down from 650,000 in 1970.


How The Trade War Is Impacting The Mass. Dairy Industry

Starting in September, U.S. farmers can apply for the first payments of a $12 billion subsidy program designed to protect them from a growing trade war between the U.S. and several other nations.

The European Union, Canada, China and others imposed retaliatory taxes — many of which target agricultural businesses in the U.S. — after President Trump instituted tariffs on imports of steel, aluminum and Chinese goods.

Mark Duffy is the director at Agri-Mark Family Dairy Farms in Mass., the co-op best known for making Cabot cheese. He said while he appreciates the federal government is concerned about the agricultural industry, he is worried about the long-lasting impact this trade war will have on the diary industry.

“It’s already had some effect on our cooperative as far as sales, and I share the concern that if it continues long-term that we will lose customers and we will lose those [international] relationships,” said Duffy.

Duffy said he feels the agricultural industry has been singled out.

“We don’t want to be pawns or be used to address an issue that we did not cause and we cannot remedy,” said Duffy.


Wisconsin farmers struggling to stay in business

Farmers from every background met Sunday in Stratford to talk about the effects that they’re seeing on their farms.

“The agricultural sector is really struggling right now,” said crop farmer Michael Tauschek.

It’s the same message from most local Wisconsin farmers.

“We’ve lost 500 dairy farms since 2017 and we’re on track to lose over 500 in 2018. In the last 5 years we’ve lost 20 percent of our dairy farms,” Tauschek added.

That’s why members from the Marathon County chapter of the Wisconsin farmers union are meeting to discuss what they can do to take action.

“In terms of dairy there has been no consistency in the milk prices. I mean they’re up down but you know they’ve been consistently down for the past three years. You know we typically have up and down cycles but we’re not getting the up cycles,” said local dairy farmer Jim Briggs.

Some farmers believe these changes are the results of political changes.

“Most of it is the tariffs and the uncertainty of what is going to happen with the tariffs,” Tauschek mentioned

“We’re getting paid 1980’s prices for our milk virtually. But nothing else fuel, gasoline, equipment, are we paying 1980’s prices for. You can’t do it, there’s no stability, there’s no profit in it right now,” added Briggs.

For farmers who are looking for options on what to do, you shouldn’t do this alone, but rather join with others also struggling.

“If you’re not at the table you’re probably going to be a part of the meal. So I think a lot of farmers, if they’re out there listening maybe you need to join an organization that looks out for the average small family farm and maybe we can stop this erosion that’s going on in the dairy industry,” said Tauschek

Dairy consumers can help too. Buying the product is just as important.

“Dairy is a consumer driven market and the consumers really have the power to change it, and make a difference,” said Briggs.


Source: WSAW7

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