Archive for Dairy Industry

The milk that can change the world

New study seeks to understand more about milk variant – and the huge changes it potentially brings.

Somewhere in Auckland, 20 men and 20 women are drinking lots of milk and eating lots of cheese – and they could help change not only the digestive comfort of 65 per cent of the world’s population but the make-up of our dairy herd and the direction of the dairy industry.

The reason is A2 milk, the genetic variant supposed to aid digestion for people who find dairy products a difficult assignment to eat or drink.

Professor David Cameron-Smith and study lead Dr Amber Milan, University of Auckland researchers from the Liggins Institute, are overseeing the research, designed to learn more about A2 milk – the product which saw the a2 Milk Company become New Zealand’s biggest company by market capitalisation ($9.5 billion) in March.

Buoyed by popularity in Australia and China (many Chinese “overwhelmingly” can’t digest the lactose, say Cameron-Smith and Milan), the A2 variant is gaining attention worldwide – but it is still not fully understood why it is digested differently to conventional milk (which contains both A1 and A2 proteins).

Cameron-Smith, Milan and AgResearch conducted a trial last year involving 40 women (30 with dairy digestive problems, 10 who didn’t) drinking conventional milk, A2 milk (which has no A1 protein) and lactose-free conventional milk. They found A2 prevented some symptoms of lactose intolerance and eased others – even though it contains the same amount of lactose as conventional milk.

Lactose-free milk has a disadvantage as a product; ice cream and other dairy products made from it do not taste as good, so A2 milk has obvious potential application for those who suffer after eating dairy.

This first study did not answer all questions nor show that all symptoms are eased in everyone. After drinking a huge amount of A2 milk, it was at least as effective as lactose-free milk at preventing or easing some of the symptoms of lactose intolerance, including nausea, stomach pain and bloating. But it didn’t reduce others, like gastric reflux and flatulence, says Milan.

To understand more, Milan is now running a study involving the 40 men and women, aged 20-40, drinking the various forms of milk and eating the various forms of cheese, in reasonable daily doses, to gauge the benefits of A2 milk consumed over a longer period.

The daily dairy is being delivered to the participants’ homes and they are asked to eat and drink twice daily over a two-week period.

“Each participant takes about eight weeks to go through the study,” she says. “They are all lactose-intolerant people and they will consume conventional milk and cheese for two weeks, then A2 milk and cheese for two weeks – with a break in between.”

Cameron-Smith says: “This research will help us to work out who benefits [from A2 milk] and why – and whether there are any downsides. We might not be able to change the inability to digest lactose but we might be able to minimise the effect of the A1 protein and give people more digestive comfort.

“When you understand that about 65 per cent of the world’s population is lactose-intolerant, you can see how far-reaching it could be.

“It could challenge conventional milk – and may encourage New Zealand to change the genetics of the dairy herd, for example.”

Conventional milk contains both A1 and A2 proteins. It’s thought all cows originally produced only A2 – with the A1 mutation appearing thousands of years ago. In terms of herds, Jersey cows tend to produce A2, Herefords A1 milk though many New Zealand dairy cows are described by Cameron-Smith as “bitsers”.

“The study could help the decision-makers with some big decisions,” he says. “For a start 65 per cent of the world’s population is a big figure we may be able to help – and this research may help when considering whether the country needs to get behind something like A2 milk.

“We know dairy is a beneficial food and we should, as a country, be doing everything we can to continue to produce high-quality, world-class dairy.”

“The fundamental question is: At what point will this research achieve a tipping point where we can clearly delineate who will benefit from A2 milk?”

The study is due to end around the end of July.

 

Source: NZ Herald

NZ may produce record volumes of milk this season, Rabobank says

New Zealand milk production may grow to a record of nearly 23 billion litres in the 2018/19 season, bolstered by a favourable milk price and adequate feed reserves, and assuming normal weather conditions, according to Rabobank’s dairy analyst Emma Higgins.

In Rabobank’s latest Dairy Quarterly report, Higgins forecasts the nation’s year-on-year milk production will grow 2 per cent for 2018/19, the year that started on June 1.

Given Fonterra Cooperative Group’s estimate that its own milk collections will increase 1.5 per cent year on year, national milk supply could increase as much as 4 per cent, Higgins noted in the report.

“If realised, this would be a record for New Zealand milk production,” said Higgins, adding milk output would be 872,000 tonnes higher than the previous season.

Rabobank expects 2017/18 milk production to match that of 2016/17, resulting in 21.4 million tonnes of milk, according to Higgins.

Meanwhile, a stalling in the pace of milk supply growth across the world’s seven main dairy exporting regions in recent months offers reasons for a more bullish market, according to the report.

A New Zealand milk price of $6.80 per kilogram of milk solids is now within reach for 2018/19, Higgins said.

“With milk supply growth out of Europe and the US failing to meet market expectations, global farmgate milk prices have moved off the lows posted at the start of the year and are expected to move seasonally higher through the second half of 2018,” according to Higgins.

To be sure, “a mix of upside and downsized market risks warrant monitoring,” Higgins noted. “In particular, the start of the upcoming New Zealand season and the level of escalation in trade wars are likely to set the stage for the fourth quarter of 2018 and the first half of 2019 dairy markets.”

 

Source: NZ Herald

Managed dairy system enticed Coca-Cola to build Ontario milk plant: Dairy Farmers

Coca-Cola didn’t comment on Canada’s dairy system, but said tariffs were a deterrent to importing its Fairlife ultrafiltered milk from the United States

Coca-Cola Canada’s decision to invest $85 million in a new milk processing plant in Ontario shows why the Canadian government should continue to defend the country’s supply management system, said the general manager of the Dairy Farmers of Ontario.

Prime Minister Justin Trudeau caused worries in Canada’s dairy sector when he said on NBC’s Meet the Press that Canada would consider allowing U.S. dairy greater access to the Canadian market as part of the renegotiation of the North American Free Trade Agreement.

“As far as I know the government is going to continue to support the Canadian dairy system. This is a perfect example of why he ought to,” Dairy Farmers general manager Graham Lloyd said in an interview Tuesday.

He said the system is attracting investment from around the world.

“It’s a good example of why this system works, and when you compare it to the other systems and dairy industries they’re just not sustainable and not growing.”

The U.S. beverage giant didn’t comment on Canada’s dairy system, but said tariffs were a deterrent to importing its Fairlife ultrafiltered milk from the United States.

Coca-Cola also likes to make products in the country where they are sold, said Fran Mulhern, vice-president of Coca-Cola and general manager of the farm to table business.

The company plans to build a plant adjacent to its 70-year-old Minute Maid frozen juice facility in Peterborough, Ont., to produce lactose-free milk that is rich in protein and lower in sugar than traditional milk.

The operations, set to open in the first quarter of 2020, will create 35 new jobs and support 100 jobs at the existing juice plant, which supplies North America with frozen juice.

Changing consumer habits towards products with less sugar makes it a perfect time to make Canada the first international market for Fairlife products such as ultrafiltered milk, said Mulhern.

“We see lots of opportunities for this to really grow dairy, and bring consumers back into dairy,” she said in an interview.

In the year after the product was launched in the U.S. in 2015, 40 per cent of the consumption came from buyers who were not drinking milk, according to a Nielsen survey, she said.

Canadian milk consumption has been declining about one per cent annually for years, but value-added products are growing five per cent per year and account for 20 per cent of Canada’s dairy market. Almost 20 per cent of Canadians consume lactose-free dairy.

The plant will be supplied with milk from local dairy farmers in Ontario.

“Anything that will grow the dairy market and increase dairy production and increase dairy consumption is quite exciting, and that’s why we’re quite supportive of this opportunity,” Lloyd added in an interview from Ottawa.

The milk uses a patented cold filtration process to remove lactose and sugar, leaving it with 50 per cent more protein and 50 per cent less sugar than traditional milk.

Coca-Cola has been in a joint venture with Select Milk Producers, the sixth largest U.S. dairy co-operative, to make Fairlife products that are added to the multinational’s broad portfolio of beverages.

Coca-Cola Canada employs 6,200 people in more than 50 facilities, including six production facilities across the country.

 

Source: Financial Post

Don’t let supply management myths spoil the milk

The way Canadian dairy farmers are portrayed in the NAFTA debate might lead you to believe they drive Porsches to the milking barns. Farmers who own quota in our food system, where dairy along with poultry fall under supply management, are often portrayed as a lobby group rather than people we rely on for food security.

In fact, opposition to supply management in Canada is based on misrepresentation. If we want a food system that is efficient, sustainable and promotes health, then we should protect supply management vehemently and even expand it to other foods. That means confronting the myths about this system that are bandied about like fact.

Supply management works by ensuring farmers don’t produce more milk (or eggs or poultry) than we need. The marketing boards for these foods tell farmers how much they can produce – their quota – and then calculate the sale price by considering the cost of production. This is broadly known as demand-supply co-ordination. Neither the federal nor the provincial governments are directly involved – aside from passing laws and maintaining protective taxes that allow supply management to work. The system isn’t perfect – for one, it doesn’t always consider how to produce the healthiest foods – but it’s not what critics say it is.

Myth 1: Supply management stands in the way of a free market. Compare the way milk is produced in the United States to in Canada. Here, supply management ensures farmers’ costs of production are covered by the price they get for what they produce. This means Canadian taxpayers do not subsidize these farmers. However, in the United States, taxpayer dollars subsidize American dairy for irrigation, nutrition and feed as well as through government loan programs. They need this state support because the market price usually doesn’t cover their costs of production. They also need it because, unlike in Canada where supply is matched to demand, American farmers often produce more milk than they can use. This leads to the destructive boom-and-bust cycles so typical of farming. Now they want to sell us their excess and put an end to Canadian supply management.

Myth 2: Supply management only makes some farmers rich. We have supply management in Canada because farmers and governments recognized that it was hard for farmers to make a living in the marketplace. There’s a paradox that makes food different from other commodities: A really lean season means similarly lean income while a bumper crop floods the market and lowers the price, leading to more lean income. Farmers who own quota in a supply management system typically fare better than farmers who don’t. Also, the price guaranteed by supply management provides Canadians with a price-stable, high-quality source of dairy. Milk prices don’t suddenly spike. Moreover, the system has enabled Canadian farmers to have smaller herds than American farmers where herds are as large as 100,000 cattle. Slowing the growth of big dairy farms has left rural communities with more small farms, which in turn contributes to the richness of rural life that even city people experience when they head to the country.

Myth 3: Canadians will benefit if we scrap supply management. A recent study found that Canadians pay less on average than Americans and Australians for dairy and our prices are less volatile. But price isn’t the only consideration when it comes to food. Food, and the way it is produced, determines how healthy we are. And the way food is produced on the farm and then processed has an impact on the environment. Not to mention that farms are part of the social fabric of this country – when farms go out of business because of boom-and-bust cycles, social and community health is negatively affected.

So rather than back away from supply management, Canada should consider how demand-supply co-ordination can be improved by making sustainability and health explicit goals in this system and in national food policy. Such an approach ensures resources are used efficiently, reduces the distance food travels and lessens food waste. These are all good things.

But demand supply co-ordination isn’t popular in a food system run primarily by private interests. And it’s especially not popular with the Trump administration looking for a market for the excess milk flowing from its skewed dairy supports.

Seeing the benefit in supply management asks us to confront our biases and step away from the drumbeat of globalization that makes it seem like supply management stands in the way of progress. If we want a healthy and sustainable food policy, the government needs to protect it for our sake.

Source: The Globe and Mail

How Canada’s controversial dairy supply management system works

Canada’s dairy sector is the target of blistering verbal and Twitter attacks from U.S. President Donald Trump who complains tariffs, as high as 314 per cent, are unfair

Source: Calgary Herald

Australian dairy industry calls for skilled visa reform amid labour shortages

The Australian dairy farmers’ peak body says the industry is in crisis and visa reform could be the answer.

The peak body for Australia’s dairy farmers is calling on the government to overhaul its skilled migrant visa program to help solve a labour crisis in the industry.

Australian Dairy Farmers says the industry is losing hundreds of millions of dollars a year in employee turnover.

President Terry Richardson said: “we don’t have that succession [of families] like we did in the past, we’re relying more on labour outside”.

Mr Richardson said farmers were left in the lurch when the government abolished the 457 visa system earlier this year.

“We have farmers that have opportunity to grow their business but because of labour shortages they’re unable to do so.”

Some dairy farm workers are now eligible for a Temporary Skills Shortage visa but Australian Dairy Farmers is asking the government to provide longer visas and pathways to permanent residency.

“We’ve had people from Europe … the Philippines … some from Korea, so there’s a wide variety of countries from which we source those people,” Mr Richardson said.  

But the Australian Council of Trade Unions (ACTU) insists the government should focus on training local workers.

Andrea Maksimovic of the ACTU said: “we need to look at what kind of skill shortages we have and what kind of training and education programs we can use to complement them”.

While sixth-generation farmer John Fairley of Country Valley dairy farm near Sydney said underlying issues need to be addressed, to make farming a viable career choice for young workers. 

“[There’s] just not enough money around to be able to get those debt levels down,” he said.

“I’m sure some of the kids would look at that and go, ‘no way, I’m out of here’.”

 

Source: SBS News

Canadian dairy Saputo urges end to pricing system opposed by U.S.

Saputo Inc, one of Canada’s largest dairies, supports ending a domestic milk ingredient pricing system that has angered the United States, Chief Executive Lino Saputo Jr. said on Monday, showing a rare crack in solidarity among processors and the country’s sheltered dairy farmers.

The Class 7 pricing agreement, struck in 2016 between Canadian dairy processors including Saputo and farmers, allowed processors to pay lower prices for domestic milk ingredients used to make cheese and yogurt, and to export the rest.

“They want their cake and they want to eat it too,” Saputo Jr. said in an interview, referring to farmers. “Which doesn’t make sense. You can’t hold onto your milk supply-managed system and have a class of milk competing with world markets at the same time.”

Saputo Jr.’s remarks came after U.S. Agriculture Secretary Sonny Perdue said on Friday he did not see how the countries could go forward in trade talks without an end to Class 7.

Dairy Farmers of Canada (DFC), the sector’s main lobby group, said the industry still speaks with one voice.

“Although (Saputo’s) comments took us by surprise, perhaps they are the product of confusion around the notion of flexibility suggested by the federal government,” said DFC Chief Executive Jacques Lefebvre, referring to Prime Minister Justin Trudeau’s comments to a U.S. television network this month about talks on dairy.

Dairy Processors Association of Canada, of which Saputo is a member, said Class 7 was an effort to “modernize” the system, and its support has not changed.

“We view efforts to expand the dairy sector’s contributions to the Canadian economy as positive,” DPAC Chief Executive Mathieu Frigon said in a statement.

Canada matches dairy production to domestic consumption, yielding less than 10 percent of the market to imports through tariff-free quotas. Above those quotas, imported dairy faces high tariffs.

Class 7 was struck to create a domestic market for Canadian milk ingredients, after cheaper U.S. volumes that were not subject to high tariffs flooded into Canada. Those U.S. shipments dried up after Class 7 took effect, riling farmers and processors in Wisconsin and New York state.

Saputo Jr. said his company felt forced to support Class 7 through its association. He said he is speaking out now because scrapping Class 7 would be “logical,” and less damaging than surrendering additional tariff-free volumes to the United States, similar to what Canada did in trade deals with the European Union and Asia-Pacific nations.

“The system is broken,” Saputo Jr. said, adding that it would not surprise him to face a farmer backlash. “The problem is everyone is putting their heads in the sand and no one really wants to find solutions until they’re forced. We’re in a position today when we can control our own destiny.”

Saputo shares finished 1 Canadian cent lower in Toronto at C$43.74.

 

Source: Reuters

Australian dairy processors on the lookout for suppliers

A new era of milk competition is upon us according to a dairy industry analyst, and northern Victoria continues to be a hot spot as processors pull out all the stops to attract suppliers.

Driven by the purchase of Murray Goulburn Co-operative by Canadian processing giant Saputo, and factory expansions by Fonterra, Australian Consolidated Milk and Freedom Foods, Rabobank senior dairy analyst Michael Harvey said suppliers needed milk more than ever.

The fall of the co-operative had opened up a new period in the industry with more supplier shifts and less loyalty, Mr Harvey said.

‘‘Farmers were very loyal to the co-op and are not as loyal to any other type of processors,’’ he said.

‘‘The theme is a lack of milk supply in the system, there’s a lot of stainless steel not being used.’’

With Saputo racing to make up the inherited shortfall in milk supply — its current processing levels have one billion litres of additional capacity — the competition for supply is leading to industry changes.

‘‘You’re already seeing a lot of the price announcements coming out,’’ Mr Harvey said.

‘‘Now, they may not be where they finish and might not be that attractive, but … they’re going earlier to market and offering longer-term contracts all because they’re trying to secure milk supply.

‘‘You’ve got a whole heap of companies that in the past wouldn’t have gone to market until Murray Goulburn … now everyone is waiting for Saputo because they’re the biggest player yet to go to market.’’

The assault has been taken to all corners of the region, with processors including Saputo and Bulla taking out full-page newspaper advertisements in an attempt to draw new suppliers into the fold.

For Katunga dairy farmer Daryl Hoey, this year’s supply battle is certainly more public than in previous years.

‘‘Previously it’s probably been more one-on-one, driving down a driveway,’’ Mr Hoey said.

‘‘(But) farmers are looking for a sustainable milk price going forward … There’s always been movement (between suppliers) but that’s probably grown in the past two years and some people have made it very clear they’ll be looking elsewhere.’’

While there were hopes the competition would lead to increased farm gate milk prices, Mr Harvey said costs such as fodder and water continued to climb, impacting the gains that would result from an increased milk price.

The milk battle comes as a group of 20 northern Victoria dairy farmers have so far secured 100million litres of milk supply with the intention of taking the collective milk pool to processors and bargaining for a higher milk price.

UDV president Adam Jenkins said ultimately, dairy farmers needed early and transparent opening prices to budget for the year ahead.

‘‘Farmers are desperate for certainty and it is simply unacceptable, especially considering the challenging conditions of the past two seasons, for processors to stall or misrepresent their opening price announcements,’’ Mr Jenkins s

 

Source: Country News

Milk Producers Want To Know: “What Drives People To Drink?”

There was a time when milk producers confidently positioned themselves as producers of the healthiest beverage on the planet. Milk producers didn’t fight battles defending the production or the breakdown of components. However, today, trends in fat consumption and diet fads have significantly impacted consumer choices. Today the fight is on to determine what motivates people to quench their thirst.

The battle for The Beverage Bottle

A recent article discussed the idea that water has now become milk’s biggest competitor. Michael Dykes, CEO of International Dairy Foods Association (IDFA), reported water consumption as follows: “The North American bottled water market was expected to reach 391 billion litres by 2017” To put that into perspective, consider that, in 2007, single-serve water consumption was recorded at 212 billion litres. As these numbers became a reality, it has also become common to see people with bottled water in hand everywhere you go. Public speakers, church pastors, business leaders and club members have water within reach at all times.  Although many of our food choices are driven by price, the beverage industry points out that consumers are choosing the expensive bottled water over the water they could drink directly from the taps in their homes: “It is calculated by drinking two litres a day from the tap would cost $1.50 a year compared to more than $2800 to do the same with single-served bottle water.”

Conscientious Consumers Are Drinking to Their Health

Whether it’s water, milk or the latest speciality drink, there is probably a health component that is luring consumers to choose one over the other.  Flip through a magazine or recall the latest TV commercial and you can probably repeat the “punch line” or picture that celebrates milk products that now contain a health-desired ingredient.  New market demographics are being reached by milk products that promote ultra-filtered milk that has extra protein. That is the case with Fairlife (a product marketed through Coke Cola partnership) in the USA. 

Where Does Milk Fit into The Beverage Game Of Choice?

Dairy producers work hard 24/7 to produce healthy nutritious dairy foods.  Having said that, once milk leaves the farm, the beverage industry takes over, and milk becomes just one of many players competing in the high stakes game of consumer choices.

Before you read any further, get yourself something to drink. What did you choose?  What options are in your refrigerator? In your pantry? Besides your favourite chair? How many of us are holding milk or a dairy drink in our hands?

How Old Are Milk Drinkers?

There was a time when milk drinkers were automatically categorized as predominantly babies and growing children. Now there are target markets in all age groups.  One of the largest group is the Millennials, who are seen as the functional food group consumers. Athletes and exercisers are also finding that milk is the new sports drink. The massive market of Baby Boomers who have entered the Seniors category is being encouraged to look to milk for their health and wellness needs. Depending on the demographic, there has been massive growth in energy drinks and ready to drink beverages. For Millennials the energy sector has seen 56% growth between 2009 and 2014and the ready to drink market has had an astounding 166% growth since 2009. 

A Day in the Life of Millennials and Milk

As a Baby Boomer, I have a fascination with labels put on the generations that precede and follow my own.  Currently, Millennials are often profiled by groups whom we seek to understand them better for consumer, political or employability reasons.  In the area of beverage consumption, statistics show that Millennials are a drinking crowd. They choose beverages for managing stress, combating fatigue, and for improving weight loss. Given their extreme use of digital tools they also look to beverages to assist in maintaining eye health. Savvy milk marketers promote the strong nutritional profiles of milk beverages as a way for Millennials to meet these goals. Milk energy drinks and milk-enhanced smoothies are becoming a well-recognized way to start a nutritious day. We have also learned from Millennials that the right beverage can help us to survive that mid-afternoon slump or a long night of computer research and study.

Milk Moves into First Place In Thirst Quenching

A study from August 2011 suggested that milk is superior to water and sports drinks at replenishing fluids following exercise. The study author was, Dr Brian Timmons, an assistant professor of medicine at McMaster University in Hamilton, Ontario Canada.

“Milk is better than either a sports drink or water because it is a source of high-quality protein, carbohydrates, calcium and electrolytes,” He explained, “Milk has a high salt concentration which helps the body retain fluid better and replaces sodium that’s lost through sweating.” Results of the peer-reviewed findings were presented in Cornwall England at a conference on children and exercise. A simplified summary of the methodology explains, “McMaster researchers had 14 eight to 10-year-olds exercise on a stationary bike for 40 minutes, then gave them either skim milk, water, or a sports drink to measure hydration. After a two-hour recovery period, 75 per cent of the skim milk was retained in the milk drinkers, compared with 60 per cent from the sports drink, and 50 per cent from the water. Water drinkers also produced twice as much urine than milk drinkers.”

Packaging Also Impacts Consumer Choices

There are many considerations affecting consumer choices.  On the one hand, the science proving health benefits reaches more audiences but, at the most basic level, clever advertising also has an impact. Probably the most significant change in the beverage marketing relates to how beverages are packaged.  There are many new and innovative ways to drink milk.  Wax milk cartons and the iconic Canadian bags of milk are now sharing shelf space with square bottles, round bottles, bottles with flip lids and containers with screw lids. Large and small bottles are competing to be seen as the handy and convenient option for consumers on the go who are looking for a quick meal replacement or satisfying hunger or thirst.

Is the Milk Industry Finding Ways to Be in The Right Place at The Right Time?

While it helps to educate the consumer about milk benefits, at the end of the day, the challenge boils down to making sure that milk beverages are available in the places where people are most likely consuming them. Milk marketers need to get milk into school lunch programs and office building lunchrooms. Milk needs to be at sporting events.  Milk needs to sponsor health programs, senior’s activities and other public events for which milk benefits are recognized. The celebrity aspect of drinking milk is also a way to raise milk’s beverage profile.  I read recently that the day could be coming soon when sports events, such as baseball and football, end their biggest finals at the end of the year by dumping a few gallons of milk on the coach!

Move Milk from The BUCKET LIST to The MILK-IT List

Perhaps it’s time to get milk moments onto our Dairy Bucket List? At the very least, we need to promote the MILK-IT list. We need to be able to talk fluently about the benefits of milk in today’s meal planning. Once we are comfortable sharing the benefits, we need to work socially, politically and on the home front to make sure milk is part of sports, social and business venues. We also can raise the profile of milk as part of a contribution to world economies and for those populations who face poor health due to environmental, economic or political issues.

The Bullvine Bottom Line

Whether you do your own personal household beverage survey, or you do research on the Beverage Industry in your province or state, the fact remains that today we have many more choices than ever before, when it comes to what we drink. If our dairy industry is to remain viable, we must take an active and involved interest. What drives you to drink milk?

 

 

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Canadian dairy Saputo criticizes supply management system, siding with U.S. in ongoing dispute

Saputo Inc, one of Canada’s largest dairies, supports ending a domestic milk ingredient pricing system that has angered the United States, Chief Executive Lino Saputo Jr. said on Monday, showing a rare crack in solidarity among processors and the country’s sheltered dairy farmers.

The Class 7 pricing agreement, struck in 2016 between Canadian dairy processors including Saputo and farmers, allowed processors to pay lower prices for domestic milk ingredients used to make cheese and yogurt, and to export the rest.

“They want their cake and they want to eat it too,” Saputo Jr. said in an interview, referring to farmers. “Which doesn’t make sense. You can’t hold onto your milk supply-managed system and have a class of milk competing with world markets at the same time.”

Saputo Jr.’s remarks came after U.S. Agriculture Secretary Sonny Perdue said on Friday he did not see how the countries could go forward in trade talks without an end to Class 7.

Dairy Farmers of Canada (DFC), the sector’s main lobby group, said the industry still speaks with one voice.

“Although (Saputo’s) comments took us by surprise, perhaps they are the product of confusion around the notion of flexibility suggested by the federal government,” said DFC Chief Executive Jacques Lefebvre, referring to Prime Minister Justin Trudeau’s comments to a U.S. television network this month about talks on dairy.

 

Dairy Processors Association of Canada, of which Saputo is a member, said Class 7 was an effort to “modernize” the system, and its support has not changed.

“We view efforts to expand the dairy sector’s contributions to the Canadian economy as positive,” DPAC Chief Executive Mathieu Frigon said in a statement.

Canada matches dairy production to domestic consumption, yielding less than 10 percent of the market to imports through tariff-free quotas. Above those quotas, imported dairy faces high tariffs.

Class 7 was struck to create a domestic market for Canadian milk ingredients, after cheaper U.S. volumes that were not subject to high tariffs flooded into Canada. Those U.S. shipments dried up after Class 7 took effect, riling farmers and processors in Wisconsin and New York state.

Saputo Jr. said his company felt forced to support Class 7 through its association. He said he is speaking out now because scrapping Class 7 would be “logical,” and less damaging than surrendering additional tariff-free volumes to the United States, similar to what Canada did in trade deals with the European Union and Asia-Pacific nations.

“The system is broken,” Saputo Jr. said, adding that it would not surprise him to face a farmer backlash. “The problem is everyone is putting their heads in the sand and no one really wants to find solutions until they’re forced. We’re in a position today when we can control our own destiny.”

Saputo shares finished 1 Canadian cent lower in Toronto at C$43.74.

Source: globalnews.ca

NZ produces record milk volumes

New Zealand milk processors collected record levels of milk in the last two months of the 2017/18 season as favourable weather boosted pasture growth, helping make up for trying conditions during the spring and early summer.

Dairy Companies Association of New Zealand data shows the country’s milk processors collected 88,812,000 kilograms of milk solids in May, up 5.7 percent from May last year and setting a new record for the month. That follows a record collection of 148,177,000 kg/MS in April, and means production for the full season to the end of May was down 0.6 percent from the previous year.

“The 2017/18 season will be remembered by many dairy farmers for the trying conditions they were dealt during the spring and early summer,” AgriHQ chief analyst Susan Kilsby said in a note. “Milk production was hampered during the spring by extremely wet conditions which restricted pasture growth. This was followed by an early summer drought. However, extremely favourable conditions for pasture production prevailed in the later part of the season. This resulted in additional milk in the vat during the later months of the season.”

The total milk collection for the 2017/18 season of 1,839 million kg/MS is 2.7 percent behind the 2014/15 season when New Zealand’s milk intake peaked at 1,890 million kg/MS, AgriHQ said.

Dairy products are New Zealand’s largest export commodity.

Source: pro.newsroom.co.nz

Dairy exit set to increase as Australian farmers continue to lose confidence

Dairy farmers are looking at walking away from their farms, as the dairy crisis starts to impact according to a national confidence survey of dairy farmers.

The annual national farmer survey of 800 farmers from around Australia, looked at farmer confidence, which showed that less than half of farmers surveyed remained confident about the industry’s future.

This figure has fallen from 75 per cent four years ago, and has been declining over the past three years.

The confidence of farmers has not been recorded this low since 2013 when it was at 43 per cent, which was at a time when farm gate returns were low, and there was challenging seasonal conditions as well as a high Australian dollar.

The trends were recorded across all dairy regions, however Victorian dairy farmers are the least positive.

Over a quarter of respondents in Western Victoria and South Australia are looking a leaving the industry, with 16 to 19 percent of farmers in these regions already in the winding down phase.

Pressure on small farms

Smaller farms of fewer than 150 cows were those most likely to be winding down.

The survey found that larger farms with over 500 cows were more optimistic about the future and were more likely to stay.

Most farmers were looking at increasing their herd size, with 37 per cent of farmers considering that option.

Farmers were more optimistic about their own operation, than the broader dairy industry.

Uncertain about prices

John Droppert, senior analyst with Dairy Australia said overall, farmers were happier with their own businesses but less so about the industry.

“This is a reflection of uncertainty around the structural changes and that will take some time to settle,” he said.

The report also found that dairy farmers were feeling uncertain about the prices they received from processors with 18 per cent of farmers having switched milk processors that they supply.

There was another 14 per cent of milk suppliers who were also looking to change who they supply their milk to.

 

However, a greater number of famers did report making a profit last financial year — 60 per cent of respondents, with 67 per cent of farmers expecting to make a profit this financial year.

The report delivered an optimistic market outlook for milk prices, with global demand shifting to Australian produced dairy products.

While this outlook is for more promising prices for milk, farmers are faced with increasing costs as the dry conditions have forced farmers to buy fodder as they have been faced with more challenging seasonal conditions.

Mr Droppert said hay, grain and irrigation water prices were all eroding margins and “presented significant headwinds for the season ahead, particularly in those parts where dry conditions persist.”

Saputo opening price announced

Meanwhile Canadian dairy company Saputo, who earlier this year took over dairy co-operative Murray Goulburn announced their opening price for the 2018/19 season.

They have opened at $5.75 per kilogram milk solids for its southern milk regions of Victoria and Tasmania and 49.6 cents per litre for their suppliers in the NSW Sydney market region.

In its announcement to its suppliers, Saputo said that this opening price was responsible and allowed room for upward movements if improved market conditions area realised throughout the year.

The company has not released it final milk price for the 2017/2018 season, which they say is dependent on external factors that could impact returns.

This announcement only leaves Fonterra and Bega Cheese to announce their opening price for the upcoming season.

Source: abc.net.au

Maine Offers Loans to Help Dairy Farms

Maine is launching a new loan program to help dairy farms be viable in the state.

The state agricultural and financial agencies are hosting an informational meeting in Augusta for dairy farms on Thursday.

The new Dairy Improvement Fund will provide revolving loans to fund capital improvements to Maine dairy farms. The program will help farmers who are commercially producing cow milk or cow milk products.

The maximum loan amount is $25,000, and loans can be taken out at a one percent fixed interest rate for a term of up 30 years. Loans can fund up to 90 percent of projects costing $100,000 or less, and up to 75 percent of projects costing over $100,000.

Borrowers much inject at least 25 percent private funds into projects over $100,000.

Source: U.S. News

Canada’s Biggest Cheesemaker Says Trump Has a Point on Dairy Policy

Canada’s largest dairy processor is voicing an opinion that’s probably unpopular with the nation’s farmers: Donald Trump has a point.

Canada should consider eliminating its Class 7 milk policy in order to renegotiate the North American Free Trade Agreement with the U.S., Saputo Inc. Chief Executive Officer Lino Saputo Jr. said.

The policy was rolled out last year and makes it cheaper for Canadian processors to buy domestic supplies of ultra-filtered milk, a concentrated ingredient used to boost protein content in cheese and yogurt. It has also effectively blocked U.S. dairy imports while creating an “incredible imbalance” on world markets, Saputo said.

“I understand the frustration of the U.S. side and quite frankly I think they have every reason to be upset,” he said Monday in a telephone interview from Montreal. “In the Nafta negotiations, the elimination of Class 7 would go a long way in trying to get the dairy file closed.”

Saputo’s comments come just one week after the U.S. President took aim at Canada’s supply-managed dairy system. As Trump departed the Group of Seven summit, he skewered Canada’s dairy tariffs, which run as high as 270 percent on some products, labeling them unfair to U.S. farmers. Dairy has emerged as one of the biggest areas of dispute as trade tensions between the two nations escalate. Canada has vowed to defend its supply-managed dairy system, which isn’t covered by the current Nafta agreement, during the negotiations.

The uncertainty caused by the trade negotiations has made it difficult for Saputo Inc. to decide where to deploy capital, Saputo said. While the company isn’t petitioning for Canada to dismantle its supply-managed dairy system, which controls output by matching with demand through quotas and tariffs, the country wants to “have its cake and eat it, too” with the Class 7 policy, he said. The system has shut out imports from the U.S. and created more milk solids in an industry that’s already dealing with a glut, he said.

“There has to be some give,” Saputo said. “The Canadian dairy farmers and the Canadian dairy industry cannot put their head in the ground thinking we’ll come out of this unchanged.”

 

Source: bloomberg.com

Professor blames full-fat trend for dairy trade spat

What started the trade spat between the U.S. and Canada over dairy?

Blame consumer demand for higher fat products.

Marin Bozic, assistant professor in the department of applied economics at the University of Minnesota, explains that as nutrition science has pointed out some positives of full-fat products, demand for lower-fat products has fallen while demand for things like butter has increased, both in the U.S. and in Canada. That led to Canada relaxing its supply management and creating a new milk classification to meet the domestic demand for butterfat, which in turn led to a surplus of skim milk powder that Canada began exporting.

Canadian tariffs on certain milk products had been in place for years and were in no way a violation of the North American Free Trade Agreement, Bozic explains. He says the Canadian measures to keep their dairy industry a “fortress” were not a big deal until they started to enter the export market. Since the U.S. dairy industry had become largely an export market, that led to market disruptions for U.S. producers.

Basically, Bozic explains, Canada was trying to “sit in two chairs” by both protecting higher prices in its domestic market and making money in the export market.

“That becomes a huge problem for us,” Bozic says.

He finds the Trump administration’s negotiating tactics over NAFTA intriguing, calling them “shrewd.” The president’s willingness to withdraw from the decades-old agreement brings other industries and other complications into the matter, which may make Canada more willing to consider change in its dairy industry, he says.

Negotiating changes to dairy along with other trade discussions is where Bozic sees a solution to the problem. What he cautions against, though, is the idea that Canada should be forced to get rid of supply management.

The United States, Bozic explains, had a “great run in dairy exports” from 2005-14. During that time, the European Union was under supply management and couldn’t “dump their surpluses on the world market.”

In 1996, 3.6 percent of U.S. production of total milk solids was exported, according to the U.S. Dairy Export Council. The U.S. Department of Agriculture’s Economic Research Service says the value of U.S. dairy product exports more than quadrupled from 2004-14, and the United States became the world’s third-largest dairy product exporter, behind New Zealand and the European Union.

Then, on April 1, 2015, the European Union abolished the milk quotas that had been in place since 1984. That allowed European dairy producers to produce more milk and for European countries to put more into exports.

“Our competition is more fierce” now, Bozic says.

While the percentage of U.S. production sold into export markets fell slightly after the European Union change, 14.7 percent of U.S. production of total milk solids — 4 billion pounds — was exported in 2017. The value of the exports, however, fell off after the European quotas went away.

If Canada were to get rid of its supply management program, some dairies in that country likely would go out of business that otherwise would not have, Bozic expects. However, others would expand and new dairies may start up. The cold conditions there generally are good for cows to flourish.

“We could see a lot more cows in Canada,” he says.

That’s why Bozic doesn’t see pushing Canada to get rid of its supply management program as the answer to the problems of the U.S. dairy industry.

“When we publicly request for them to remove supply management, I think we should be careful what we wish for,” he says.

Source: grandforksherald.com

Saputo Dairy Australia calling for more suppliers

Milk processor Saputo Dairy Australia has raised the call for more suppliers just six weeks after officially taking over Murray Goulburn Co-operative.

The Canadian processor bought Murray Goulburn for $1.31billion after suppliers overwhelmingly voted in favour of selling the co-operative in April.

In an advertisement to the region, Saputo touted its credentials as the ‘‘largest dairy processor’’ in Australia, including being the owner of the country’s oldest dairy processor Warrnambool Cheese and Butter, as well as the newly-acquired Murray Goulburn.

‘‘We believe the combination of these two iconic dairy companies is a positive development for all our farmer suppliers and unites some of Australia’s best loved brands,’’ the ad reads.

‘‘As a supplier of Saputo Dairy Australia you can expect our commitment to pay competitive prices for milk, a dedicated team who understand the dairy industry and integrity in every aspect of our business relationship with you.’’

At the time of the sale to Saputo, MG chief executive officer Ari Mervis said current suppliers could expect terms ‘‘no less favourable’’ than their current situation until July 2023.

Saputo has previously committed to pay a competitive milk price that is no less than the greater price of the offer to Warrnambool Cheese and Butter, which was already owned by Saputo, or the final weighted average of the farm gate milk price published by the two largest processors in the relevant region.

 

Source: Country News

Trade Wars – China Places Tariffs On U.S. Dairy Products

China responded to the $34 billion tariffs President Trump placed on Chinese goods on Friday, with a promise to impose reciprocal levies on a range of American products, including agricultural products, cars and seafood. Among products listed are whole milk powder and skimmed milk powder, two products the U.S. has traditionally sent in large quantities to China. Lactose, infant formula, casein and caseinates are the only powder products not included on the list. Tariffs on $34 billion of goods will take effect from July 6, according to Reuters. Other tariffs will be announced at a later date. 

“China and the U.S. have conducted several rounds of negotiations in an attempt to resolve our differences and achieve win-win results,” a spokesperson for China’s foreign ministry said on Friday. “We deeply regret that the United States has disregarded the consensus it has formed and flip-flopped, provoking a trade war.”

“We will immediately introduce taxation measures of the same scale and with the same intensity,” the country’s commerce ministry said. All the economic and trade achievements previously negotiated by the two parties will become invalid.”

The United States Trade Representative on Friday released a list of $50 billion in Chinese imports that would face tariffs. Levies are scheduled to take effect for roughly 800 of those products on July 6, while the remainder could face tariffs pending a final decision by the trade office.

The tit-for-tat trade measures amount to a sharp escalation of conflict between the U.S. and China. In May, Treasury Secretary Steven Mnuchin said a trade war with the world’s second-largest economy was “on hold.”

According to data from the U.S. dairy export council, U.S. exports to China, who was our fourth largest export customer in 2017, have been up in 2018 compared to the previous year. In 2017 total value of dairy exports shipped to China January – April was $179 million. The same time frame in 2018 totalled $203 million.

Victorian dairy farmers unite in fight for better milk price

A group of Victorian dairy farmers is trying to reclaim bargaining power in a fight for a better milk price by offering processors a collective pool of milk.

The farmers, based in northern Victoria, are extremely concerned about the future of the dairy industry and have decided to act and form a collective bargaining group, United We Stand.

The group has fielded dozens of calls with interest from as far as Tasmania.

In less than a month, the group has had 85 million litres of milk pledged from more than 40 farmers, who supply the major processors Fonterra and Saputo as well as Australian Consolidated Milk, Tatura and Parmalat.

Echuca dairy farmer Steve Hawken said he feared for the future of dairy farming as it was struggling to keep and attract farmers.

“You’ve only got to look at the average age of the dairy farmer. We’re talking mid-60s.

“If I owned a milk processing plant that’s a number I’d be paying a hell of a lot of attention to because where’s the next 50 years’ worth of milk coming from?”

Mr Hawken said the response the group had been incredible.

“The sky’s the limit. I think if these farmers are willing to pledge their milk towards this cause that sends a very clear signal to the industry ‘something’s broke here fellas’.”

Pay rates are an issue

Mr Hawken said lobby groups like United Dairyfarmers of Victoria and Dairy Australia were dealing with peripheral problems but nobody wanted to take on the big problem of money.

“At the moment we can’t attract people into the dairy industry because we can’t afford to pay them.

He said the difference in hourly rate dairy farmers could offer a farm worker compared with the minimum wage for working in a factory was astounding.

“We need to rectify the problem and teach the dairy farmer we belong on the top of the food chain because without us there simply is nothing else,” he said.

Earlier this year, the ACCC dairy inquiry found there was a large imbalance in bargaining power between farmers and processors.

It stated that farmers’ ability to secure an appropriate share of profits depended on their bargaining power and that most had little power and limited scope to reposition their businesses.

Collective bargaining has its risks

While collective bargaining can help negotiate a better price, it is not without its dangers.

Dairy Australia in its guide to collective bargaining raises issues farmers should consider including the level of commitment people have, their appetite for risk, and having unrealistic expectations.

Mr Hawken said the group was not making promises and if it failed would not be because of a lack of trying.

“We’ve endeavoured to cover all our bases,” Mr Hawken said.

“If we can’t get a better offer for our farmers from any of the processors people still have the ability to make up their own minds and go where they need to go to survive.”

New dairy era

Rabobank dairy analyst Michael Harvey said with Murray Goulburn gone, the industry was dealing in a new era.

Mr Harvey said intense competition for supply had created an opportunity for farmers to leverage.

 

Source: ABC

April U.S. Dairy Exports Surge to All-Time High

On a total milk solids basis, exports were equivalent to 18.8 percent of U.S. milk production. Volume up 31 percent from April 2017.

On a total volume basis, U.S. dairy exports were at an all-time high during April. Exports surpassed the previous record set just one month prior in March 2018. Shipments of whey protein concentrate and lactose were each at highs during the month. Exports of milk powder and whey products were the second-highest ever.

Suppliers shipped 213,115 tons of milk powder, cheese, butterfat, whey and lactose during the month, up 31 percent from April 2017. U.S. exports were valued at $518 million, 1.7 percent greater than in March and 15 percent larger than levels in April 2017. On a dollar-basis, exports were the highest total value since April 2015.

Ingredient sales again drove the gains. Shipments of nonfat dry milk/skim milk powder (NDM/SMP) to Southeast Asia were up by 70 percent and sales to Mexico were the fourth-highest ever. Shipments of lactose to China, for the third month in a row, were at record highs.

Overall NDM/SMP exports were 76,052 tons, up 37 percent from last year. Sales to Mexico increased 30 percent from the previous year.

(Official U.S. Bureau of Census data continues to show an increase in WMP exports to Mexico. However, Mexican import data and trade sources don’t corroborate this, and we believe this volume represents SMP sales that were misclassified at the port. Therefore, we’ve adjusted NDM/SMP and WMP trade data for June 2016 to April 2018 to account for this misclassification.)

Lactose exports were 37,986 tons in April, the most ever, and 23 percent greater than levels a year earlier. Shipments to China (10,626 tons) again led the gains and were 79 percent greater than what they were in April 2017.

Cheese exports were 32,865 tons in April, up 22 percent from a year earlier and (on a daily-average basis) on par with March 2018. April cheese sales to Mexico topped the previous year for the first time in three months, rising 11 percent. Shipments also continued higher to Japan (+31 percent) and South Korea (+15 percent).

Total whey exports were 53,665 tons in April, up 24 percent vs. the prior year. Record shipments of whey protein concentrate were led by sales to East Asia up 123 percent.

Butterfat exports totaled 4,945 tons in April, up 190 percent from the year before. Sales to Mexico shot up 1,172 percent against a low comparable and totaled 2,292 tons. Shipments to Canada were up 37 percent.

On a total milk solids basis, U.S. exports were equivalent to 18.8 percent of U.S. milk production in April. Imports were equivalent to just 3.1 percent.

 

Source: U.S. DEC

China sets guidelines to improve their dairy industry

China on Monday unveiled guidelines to make a series of improvements to its dairy industry. By 2020, the country should have achieved substantial results in the supply-side structural reform of the dairy industry and made marked progress in modernizing the sector, according to guidelines released by the General Office of the State Council.

Milk self-sufficiency should be maintained above 70 per cent, according to the guidelines.

The guidelines said quality, competitiveness and the reputation of infant formulas must be significantly improved, and dairy supplies should better match demand, with consumers having stronger confidence in the country’s products.

By 2025, the dairy industry should have been “invigorated in an all-round manner,” with milk supplies, dairy processing and quality, and industrial competitiveness at world-leading levels.

High quality and green development should be the goal of the dairy industry’s development, said the guidelines, which laid out measures to improve cow breeding, dairy processing, product distribution and quality supervision.

 

Source: The Cattle Site Desk

UK government group to look at post-Brexit dairy export strategy

The UK’s All-Party Parliamentary Group (APPG) on Dairy, headed by Scott Mann MP, has launched a new inquiry to look at the future of dairy exports.

The Dairy APPG will hear from a range of industry speakers later this month, including representatives from Defra and AHDB, who will outline current export data and take a look at what future export strategy could look like post-Brexit.

Mann said, “I’m delighted to launch this inquiry on behalf of the Dairy APPG and understand the framework within which British dairy exports can thrive. These are exciting times but I want to know what practical and realistic help the Government can provide to help the industry post-Brexit.”

In the coming year the Dairy APPG will also look at sustainability and the dairy sector, as well as look at innovations in milk packaging.

Written contributions to the inquiry can be sent to the APPG secretariat.

Mann was elected new chair of the Dairy APPG in February. Four vice-chairs were also elected: Steve Double MP, Angela Smith MP, Chris Davies MP and David Simpson MP.

 

Source: Dairy Reporter

A UK Dairy company awards a German company the contract to deliver milk directly to UK households

Dairy company Milk & More has awarded a contract to German logistics group Deutsche Post DHL Group to send 200 StreetScooter electric vans to Britain so it can deliver milk to UK households in a “quiet and environmentally friendly way”.

Reviving a decades-old tradition
After decades of having milk delivered early in the morning, in glass bottles carried by the “Milkman”, on a purring electric cart, the service all but disappeared. Now, however, the advent of the “environmentally friendly” consumer, with a distaste for plastic containers, has prompted a resurgence in traditional milk delivery.

Milk & More, which is owned by the German dairy group Theo Mueller makes more than 1.5 million deliveries a day to over 500,000 British households.

Deutsche Post developed the StreetScooter for its own burgeoning parcel delivery business but has since decided to build and sell the ECVs to other customers. This has prompted speculation of a possible sell off of the StreetScooter business.

The company was initially keeping tight-lipped but Reuters today reported that DHL is considering floating the StreetScooter business.

 

Source: Fleet Europe

Supply management is crucial to Canada’s dairy industry, says local farmer

Tommy Faulkner of London Dairy Farms says ending the supply management system will ruin the Canadian dairy industry and won’t help the U.S. industry, which he says is struggling because of oversupply and low prices. (Andrew Lupton/CBC)

The nation’s dairy industry and its system of supply management are at the centre of a tense trade war between Canada and the United States.

The system includes policies that tightly control the price of dairy products like milk, cheese and eggs. It also maintains stable prices to ensure a farmer’s living income.

U.S. President Donald Trump said the system is unfair to dairy farmers across the border and calls for its complete dissolution. In response, Prime Minister Justin Trudeau vowed to protect the system.

CBC News reporter Andrew Lupton spoke with farmer Tommy Faulkner of London Dairy Farms about the dispute and its implications on local dairy producers.

The farm located south of Hwy. 401 has been around for about 14 years and houses thousands of cows.

What has Canada’s system of supply management done for your industry?

It is a very good thing.

Supply management allows us to fill the marketplace without overfilling it. When a commodity is overfilled to the market, the prices depress in an exponential way which leads to bankruptcies.

In our system, we supply all the milk the market needs and probably a little more but not too much more than it would cause disruptions in the market place.

U.S. President Donald Trump has described this system as “very unfair” to American farmers. How do you respond?

I don’t see it that way.

In the U.S. they have different prices for milk according to different locations like different areas.

You could argue this but they have supply management as well. Their idea of supply management is to let thousands of dairy farmers go broke, have their lives and families in turmoil … and that does no good for anyone.

What is something that needs to be understood is that a lot of business in the world are not necessary monopolies but oligopolies and farmers are probably the last area where true competition can exist. So supply management is in many ways just collective sales.

And if you look at retail prices in the U.S. they are very similar to ours. In our country, the farmers get a slightly larger share of the retail profit. In the U.S. they get a smaller change. In the U.S. now prices are at a historic low, bankruptcies are at a historic high and retail price of milk hasn’t changed any significant extent so that system doesn’t work very well.

How about Canadians? Are they paying too much for dairy products?

If you compare our retail prices to retail prices in another jurisdiction around the world, we’re not even on the high end.

If you look at other jurisdictions that have eliminated supply management … the consequences of it were horrendous. The consumers did not get a lower price of milk.

Are you worried now that the system of supply management is in the spotlight?

I worry that we will suffer the death of a thousand cuts because the system has been eroded over the last number of years over trade agreements in other countries. It’s at a point now where it can’t stand another weakening or there really is no system.

I don’t see any negotiations of our system as beneficial; it probably is lean now as it can be.

Why would we want to take something that’s serving our needs as a country in every respect and go into a system where the only outcome is turmoil, bankruptcy and subsidies?

Source: CBC

New York Dairy Farmers Struggling To Stay In Business

June is “National Dairy Month,” but this year, many New York family farmers say they have little to celebrate.

Before the month is over, dozens of them may be out of business, including six in Sullivan County.

CBS2’s Tony Aiello spent the day with some of them in the Catskills.

On a lush hillside overlooking the Callicoon Creek Valley is The Diehl Family Dairy Farm, established in 1842.

Adam Diehl is generation number five to run the milking operation with his wife, Alice. Their daughter, Michaela, hopes to be generation six.

“It’s in their bloodstream, it’s part of their DNA to be farmers” said Alice Diehl. “It’s what they do, it’s what they love to do.”

Family matriarch Alice Diehl says the twice daily milking ritual is weeks away from a reckoning.

“We’re scrambling to find another creamery to take us on and buy our milk wholesale,” said Alice Diehl.

The Diehl farm is one of six in Sullivan County, and 52 statewide, losing their wholesale contract. As of July, there’s no one to buy what they produce.

Farmer Tom Bose is the local supervisor who is working to help the six Sullivan farmers.

“Probably the most difficult time I’ve seen in my lifetime,” said Bose. “Mentally, physically, emotionally, horrible.”

Farm advocates say a good picture of the state of agriculture in Sullivan County can be found on Cattail Road where a barn is seen, collapsing, on one of the 60 dairy farms that have gone bust in the last 40 years.

Global forces are hitting local farms, everything from increased production in China, to Walmart bottling its own milk in Indiana. Tastes are changing too. The average American drinks 37% less milk today than in 1970.

Some consumers, choosing almond milk and other alternatives.

“I don’t know how you milk an almond, but, whatever,” joked Alice.

Farmers are encouraged that researchers are questioning the alleged link between whole milk and childhood obesity.

The Obama administration banned whole milk in schools. Farmers are working to overturn that. Some want a quota system to prevent mega-farms from producing so much milk it hurts family farms. Many want price supports so they at least break even.

“To create a floor, for the milk price,” said dairy farmer, Cindy Gieger. “So it can’t drop down below cost of production.”

“Elected officials can deal with this now,” said Wes Gillingham, Co-Director of Catskill Mountainkeeper. “They need to act now and address the problem and fix the situation that we’ve gotten ourselves into.”

Advocates say if not, expect to see more barns like the one on Cattail Road.
Source: 

 

Family dairy farms are staring at extinction

Family-owned dairy farms across the country are struggling as milk prices have fallen in the last few years due to an abundance of supply on the market.

In Sullivan County, New York, six dairy farms are losing their wholesale contracts, and 52 are losing them statewide. That means as of July, no one is buying what these farmers produce.

“We’re scrambling to find another creamery to take us on and buy our milk wholesale,” Alice Diehl told WCBS News in an interview at the Diehl family farm — a business founded in 1842. In Wisconsin, 500 dairy farms shuttered in 2017, while the total number of milk-cow herds is down about 20 percent from five years ago.

The dairy industry has been shifting toward larger, corporate farms over the last 15 years, creating conflicts with local residents and environmental activists because the farms produce massive amounts of waste.

Walmart is bottling its own milk in Indiana, for example, while China is ramping up domestic production — adding to the milk glut. And tastes have changed: The average American drinks 37 percent less milk today than in 1970. Many choose alternative products like almond or hemp milk instead.

What can be done to help the farmers in Sullivan County? Some want a quota system to prevent massive corporate farms from producing so much milk it hurts family farms. Many would like government support for prices so they can break even.

Officials need to “to create a floor, for the milk price, so it can’t drop down below cost of production,” dairy farmer Cindy Gieger told WCBS. 

Source: CBS

Dairy farms struggle even as Walmart milk plant opens

Walmart’s 250,000 square-foot milk-processing plant at 2322 W. Pleasant Center Road in southern Allen County is among the industry’s largest.

Recent years have not been easy for the dairy industry, and Indiana’s milk producers welcome any help they will see from the processing plant Walmart just opened in Fort Wayne.

More than 100 farmers across much of the country, including at least 25 in Indiana, were notified earlier this year that due to an oversupply of milk, their contracts with Dean Foods would not be renewed. They had until May 31 to find a new market for their milk.

In Indiana, “they were scattered throughout the state,” said Doug Leman, executive director for Indiana Dairy Producers. “Most of the larger farms that were affected were in central to northern Indiana.”

Because Dean Foods supplies Walmart with milk, there was speculation in the dairy-farm community that the additional milk processing capacity coming to the industry from the new Fort Wayne plant contributed to Dean’s decision to cut back on the amount of milk it would process.

“That was used as a reason, but Walmart’s plant has been coming for three years.; we’ve all known it was coming,” Leman said. “This was not a Walmart issue; it was not a Dean issue. It was a ‘too much milk’ issue, is what that boils down to.”

Low milk prices resulting from oversupply have driven a number of Indiana dairy farms out of business. Leman estimates the state lost at least 50 dairy farms last year and easily the same number in 2016.

“Traditionally there is quite a bit of volatility in the dairy market but, since 2015, it has been sustained lower prices,” said Jackie Boerman, an assistant professor in animal sciences and dairy extension specialist at Purdue University. “For many dairy producers it is below the cost of production.”

In Indiana, this means that there were a number of farms that went out of business.

“For the first time since Indiana was settled and dairy cows were introduced, we are under 1,000 dairy farms,” she said.

Folding farms sell off what equipment and livestock they can, so the number of cows in the state has not dwindled, and the loss of dairy farms in Indiana has not reduced its milk production.

“Even though farms are going out of business, these cows are being absorbed by other farms,” Boerman said. “This is similar to what is going on across the country. Overall milk prices are low; farms are going out of business. But, the total cow population is remaining pretty constant to slightly increasing. A lot of farms are running out of equity and are needing an increase in milk price to stay in business.”

Walmart announced in 2016 it planned to build a milk-processing plant of more than 250,000 square feet at 2322 W. Pleasant Center Road  in south Allen County. That makes it one of the industry’s largest.

Executives with the company said the highly efficient facility would leverage the latest technologies to process white and chocolate milk for more than 600 Walmart and Sam’s Club locations, sold under the Great Value and Member’s Mark labels.

It will supply milk to stores in Indiana, Ohio, Michigan, Illinois and northern Kentucky and was expected eventually to create more than 200 jobs, from milk processing to transportation.

Gov. Eric Holcomb was on hand June 13 when Walmart celebrated the grand opening of the facility, which originally had been expected to open by the end of last year.

At the time Walmart announced plans for the plant, Indiana ranked 14th in the nation for milk production and second for ice-cream production, with about 184,000 milk cows capable of producing 61 pounds of milk per day, accounting for close to 2 percent of U.S. milk production.

“Walmart has direct contracts with a number of farms to supply milk,” Boerman said. “These farms now have contr

acts with Walmart so they have a place for their milk to go as long as the contract exists. I do not believe that Walmart is offering much of a premium over the open market. There is another portion of their milk that they are getting from cooperatives; this is supplying a market for farms who are in those co-ops.”

More milk produced in Indiana, Ohio and Michigan will be processed in Indiana as a result of the Walmart plant’s location in Fort Wayne, and because producers bear the cost of getting their milk to a processing plant, the facility’s location could reduce transportation costs for some farmers in the region.

“Having more jobs locally impacts the broader economy but, I am not sure that it will increase dairy-cow numbers locally because there is currently a lot of milk available in a short distance from Fort Wayne,” Boerman said.

Leman believes the Walmart plant had most of its direct dairy-farm contracts in place before Dean announced it would be cutting back its processing. But some Indiana farms losing Dean contracts arranged to sell to co-ops supplying the facility.

“When something like this happens, milk has to go through a shuffle,” he said. “When somebody stops buying, it does not mean demand has gone away. Unfortunately, there were some farms that did not pick up a new market. The reality is it’s a career change for that family that is a very difficult thing.”

“A couple of those farms I know were ready to exit the business, but they all were not ready to exit the business,” he said. “But if you don’t have a market, you can’t produce milk. It is a business decision that has to be made and it has to be made immediately.”

Leman is glad Walmart located the plant in Indiana instead of Ohio, Michigan or some other state, and expects it to have a favorable long-term impact on Indiana’s dairy industry.

There are efforts underway to reduce the oversupply of U.S. milk by increasing the nation’s dairy exports, and Leman said a boost of a couple of percentage points with that “could make a huge difference.”

In the meantime, “everybody just needs to drink a little more milk. Milk is good and it’s good for you,” he said. “We don’t care what kind you buy; just buy milk.”

Source: FWbusiness

‘Tone of the market is changing’: Farmers welcome recent milk price increases

Farmers have welcomed recent positive milk price moves in recent weeks and some now believe that commodity prices indicate that a farmgate price of 30p per litre is achievable.

Recent price announcements from First Milk, Muller and Arla reflect the strengthening seen in dairy commodity prices.

Farmer-owned First Milk announced a milk price increase of 1.2p per litre for July taking its price on a liquid standard litre to 27.20p, whilst the manufacturing standard litre will be 28.12ppl.

NFU Scotland’s Milk Committee, which visited First Milk’s headquarters in Paisley on Tuesday (12 June), said the “tone of the market is definitely changing”.

Milk Committee Chairman, John Smith said: “We firmly believe that a farmgate price of 30p per litre is achievable. It is essential that all parts of the supply chain ensure strengthening markets are reflected quickly in prices.

“More increases must follow as futures markets and physical sales of commodities are both very positive. All processors must take this opportunity to build trust in their pricing models by increasing farmgate prices at a pace and magnitude that reflects where the market is.”

Key price indicators, the Actual Milk Price Equivalent (AMPE) and Milk for Cheese Value Equivalent (MCVE) now sit at an average of more than 33p per litre.

Prices for milk powders, butter and cream are all up by more than 10 percent in the past month.

Mr Smith added: “That justifies price increases that would allow dairy farmers to start to rebuild their balance sheets after a very difficult extended period of poor prices and higher costs due to a very difficult winter.”

Open-dialogue

At the visit to First Milk, committee members heard more about the co-op’s recent move back to a simpler pricing model for all members, and the development of a strong farmer governance structure.

The new focused strategy is designed to simplify and streamline the First Milk business for the benefit of their members after several difficult years for the co-op.

The committee also discussed the need for a more open dialogue with milk buyers on Red Tractor standards and the prospect of legislation on dairy contracts, after Defra accepted a recommendation from the Grocery Code Adjudicator (GCA) that dairy farmers are disadvantaged by an imbalance of power in the dairy supply chain.

Milk Policy Manager, George Jamieson said UK farming unions want to see this as a “massive opportunity” for the entire dairy supply chain to develop an agreement on contracts that build “trust and fairness”, which also resolves volatility.

“That there is a problem is clear to see. Any progressive processor confident in their business and who values their milk supply should view this initiative as an opportunity,” Mr Jamieson said.

“Sadly, the reaction of some processors is to view this as a threat and are already using ‘fear’ tactics to cloud the issue.”

 

Source: Farming UK

Holstein UK Honour Lifetime of Achievement

The Holstein UK Lifetime Achievement Award celebrates an individual who has shown considerable passion, drive, and commitment to the Holstein breed. This year, Holstein UK is pleased to award the accolade to long-serving Midland Holstein supporter, Alan Shufflebotham of the Avondale Herd at Childswickham, near Broadway, Worcestershire.

At the Holstein UK AGM and Celebration in Yorkshire on Wednesday 14th June 2018, the society presented Alan with the award, applauding his outstanding service to the Holstein Society and breed. 

To receive this award the nominee had to have at least 20 years’ service to the breed and has been nominated by a member of Holstein UK. Applications for this prestigious award are reviewed the Board of Trustees for Holstein UK who vote to select the winner each year.

2018 Lifetime Achievement Award Winner

Alan worked on numerous dairy farms throughout his career before taking tenancy of his first farm in 1955. This comprised of 5.5 acres, 4 jersey cows and a poultry unit. In 1961 Alan took tenancy of a 172-acre farm in Derbyshire before moving onto a 325-acre farm in Worcestershire in 1965. Here Alan built up a 200-pedigree Jersey cow herd and followers.  Alan was unsuccessful in his application for a Nuffield Farming Scholarship to study Holstein cattle and milk production in North America, so instead, he organised his own trip with fourteen others. It was during this time that he became convinced by the superiority of the North America Holstein cow. In 1973 he borrowed £25,000 from his bank, and Alan made a trip to Canada to purchase 61 in-calf heifers and a bull to establish the Avondale Herd. After 2 years Alan dispersed the Jersey herd to concentrate on the Holstein breed. Alan joined the Holstein Society and started showing cattle, winning Supreme Champion at both the National Holstein Show and Royal Show. He was also a founder member of the Midland Holstein Breeders Club.

Nominator, Mike Miller, past Chairman of the West Midland Club, said; “Alan has made an outstanding contribution to the ‘Holsteinisation’ of the black and white breed in the UK through the importation of cattle from Canada. He has been fundamental in developing a high production herd of highly classified cow families and welcoming many visitors. Alan is in his eighty-eighth year, so it is wonderful to be able to honour him with this prestigious recognition, which he so worthily deserves. When Alan changed to milking black and white cows, he had the foresight to import pure Holsteins from Canada. He has been a prominent member of the British Holstein Society and a very keen showman. He also bred many bulls and together with Don Rowntree set up the Transatlantic Breeders Sale held at Avondale House which gave breeders the opportunity to purchase Canadian genetics without having to travel.”

The nomination was further endorsed by Christopher Norton of Norton Brooksbank, Andrew Stafford of Saxelby Holsteins, Robert Musson of West Midlands Holstein Club, all who over the years have known Alan through showing, sales, travelling and industry networking events.

Andrew Birkle, Holstein UK Chairman, concludes; “Holstein UK is honoured to present Alan Shufflebotham with this accolade. Alan has been a remarkable ambassador for the Holstein breed and wider dairy industry, always striving for the very best. He has Alan has been instrumental in innovating the Holstein breed, importing top-class cattle from Canada and establishing a prestigious herd and we feel proud to be able to celebrate his success and achievement with the 2018 Holstein UK Lifetime Achievement Award.”

Deadline extended again for dairy farmer safety net program

The U.S. Department of Agriculture has again extended a deadline for dairy farmers to sign up for a federal safety net program. 

Farmers now have until June 22, 2018 to sign up for the Margin Protection Program (MPP), which aims to safeguard participating dairy producers by issuing payments when the margin – the difference between the price of milk and feed costs – falls below levels of protection selected by the applicant.

The USDA says it has already issued more than $89 million for margins triggered in February, March, and April.

This will be the last opportunity for producers to take advantage of key adjustments Congress made to provisions of the MPP program under the Bipartisan Budget Act of 2018, according to the agency. 

Those interested in the program should contact their county Farm Service Agency. 

Dairy MAX and Western Dairy Association Announce Completion of Merger

Newly joined regional dairy council represents 900 dairy farmers across seven states

Nonprofit regional dairy councils Dairy MAX and Western Dairy Association today announced the completion of a merger between the groups.

Two of the leading dairy councils in America, Texas-based Dairy MAX and Colorado-based Western Dairy Association, have a long history of affirming the efforts of dairy farmers in their regions and providing information about the nutrition and benefits of dairy. The combined organization, which will be known as Dairy MAX, represents more than 900 dairy farmers and their families in seven states: Colorado, southwest KansasMontanaNew Mexico, western OklahomaTexas and Wyoming.

Dairy MAX is part of a nationwide effort to promote dairy, develop new dairy foods, provide educational information and increase consumption. It does so with a team of experts in dairy farming, education, health and wellness and business, working with organizations such as the National Dairy Council (NDC) and Milk Processor Education Program (MilkPEP).

“It is an exciting day for our regional dairy council and for the dairy farmers we represent,” said Mike Konkle, CEO of Dairy MAX. “Dairy MAX highlights the importance of American agriculture and dairy farming, helping to grow impact in our communities year after year. We believe that dairy products are simple solutions to everyday hunger, nutrition and dietary needs – and that’s a key message we’re committed to sharing as part of the newly shaped Dairy MAX.”

Long considered a nutrient powerhouse, dairy plays an impressive role in community health, whole child wellness, athletic performance and family meal enjoyment. Dairy MAX works through five key program areas to bring this message forth:

  • Business Development teams up with the NFL, specifically working in DallasDenver and Houston. In 2016, Dairy MAX was proudly named the official nutrition partner of the Dallas Cowboys. The group also partners with colleges, high schools and regional businesses.
  • Consumer Communications corrects dairy myths, shares dairy recipes and highlights trending topics to reach families through digital media content and social media, as well as live appearances at family-friendly gatherings like state fairs and stock shows.
  • Health and Wellness communicates science-based research to and with dietitians, physicians, sports nutritionists, lecturers, chefs and bloggers, reaching out at conferences and in the media to share healthy recipes that showcase the power of dairy in delicious culinary applications.
  • Industry Image and Relations shares the story of the dairy farmer through videos, fact sheets and farm tours, reaching consumers, industry stakeholders and future advocates. The organization excels at providing training resources for farmers seeking help with an industry issue, positive or negative.
  • School Marketing reaches students, school educators and parents with youth wellness programs. This includes education on the important connection between good nutrition, physical activity and academic success, primarily through the execution of Fuel Up to Play 60 programming alongside NFL partners.

To learn more about hardworking dairy farm families, dairy’s role in nourishing our communities and fighting hunger and the health benefits dairy provides, visit DairyMAX.org.

 

Canadian Dairy Farmers Cling to Protections as Trump Demands Concessions

Canadian dairy farmers want trade negotiators to keep their hands off the protected sector in increasingly contentious talks with the United States, however loudly U.S. President Donald Trump demands greater access, an executive with Canada’s biggest dairy lobby group said on Monday.

The sector, worth C$21 billion ($16.2 billion) in farm and processed dairy shipment sales, is the target of blistering verbal attacks and Twitter posts from Trump who complains that Canada’s tariffs, as high as 314 percent, are unfair to the United States.

Dairy has emerged as the latest flashpoint between the U.S. and Canada as they renegotiate the 1994 North American Free Trade Agreement. Trump’s attacks accelerated leading up to the weekend Group of Seven summit in Quebec, which ended with Trump withdrawing U.S. support for the G7’s communique and criticizing Prime Minister Justin Trudeau.

Dairy “should be off the table for these negotiations,” David Wiens, a Manitoba dairy farmer and vice-president of Dairy Farmers of Canada (DFC) said of NAFTA talks.

Canada’s 11,000 dairy farmers are concentrated in vote-rich provinces Quebec and Ontario, giving the industry out-sized influence in domestic politics.

In recent trade deals with the European Union and a group of Asia-Pacific nations, Canada conceded larger tariff-free dairy quotas.

But the DFC’s stance that it is unwilling to support more concessions may not be reaching politicians.

Trudeau last week said in a U.S. television interview that Canada had “flexibility” on dairy, while U.S. Agriculture Secretary Sonny Perdue told U.S. Farm Report that Canada offered dairy concessions that were insufficient. Trudeau was scheduled to meet with DFC on Tuesday afternoon.

Ten percent of the Canadian dairy market is open to imports, with the rest effectively blocked by massive tariffs. Since the 1970s, Canada has controlled supplies of dairy, poultry and eggs to match domestic consumption, and prices are set by a government corporation and provincial boards.

The DFC’s Wiens said giving up further market share would “make it very difficult for us to continue the growth and investment we’ve seen in the past several years. Opening to the U.S. market would be devastating.”

The U.S. Dairy Export Council reported the value of U.S. dairy exports in 2016 as $4.8 billion.

Processors and farmers would be less likely to modernize operations, Wiens said.

With enough concessions, the value of farmers’ production quotas, worth about C$25,000 per cow, could fall as other countries gain market share, said Mike Gifford, a retired government official who was Canada’s agriculture trade negotiator on NAFTA.

Canada will have to make dairy concessions to get a U.S. trade deal, but it does not have to mean dismantling supply management, Gifford said.

“If you’re a negotiator you have to know what’s sensitive for the other guy and what does the other guy need to get in order to say there’s a win-win outcome,” Gifford said.

The United States has its own protected sectors, such as sugar. Dairy is sensitive because the United States produces too much milk for a saturated global market, DFC president Pierre Lampron said in a statement.

The U.S. is not seeking dismantlement of supply management, just greater access and the end of a Canadian system of pricing milk protein ingredients that is undercutting global prices, said Tom Vilsack, chief executive of the U.S. Dairy Export Council and a former U.S. Agriculture Secretary.

“They can continue to have a supply management system, but they can’t have the incredibly high tariffs and other barriers and maneuvers that they do to deal with the problems that are created by the supply management system,” Vilsack said.

But Gregg Doud, the chief agricultural negotiator in the Office of the United States Trade Representative, told Reuters on Thursday that the U.S. has “very serious concerns about the subsidies and the structure of Canada’s dairy industry.”

Source: Reuters 

Queso Chaos: Mexican tariffs impacting U.S. cheese

On Friday, June 1 Mexico announced that it would impose retaliatory tariffs on a number of US exports in response to duties the US placed on imports of Mexican steel and aluminium. Of the commodities singled out, cheese was one which will impact the US and Mexican dairy industry most directly. Market reactions to date have been muted, August cheese futures are only 3% lower at the time of writing.

Details of Mexico’s new tariffs emerged on June 5 and further details continue to trickle in. As of June 5 nearly all US cheese exports, which were previously exempt from tariffs under NAFTA, now face tariffs of 10% to 15% with a further round of increases planned for July 5th, at which point they will increase to 20-25%.

In 2017, the US exported 97k MT cheese to Mexico, accounting for 28% of total US cheese exports, and representing 80% of Mexico’s cheese imports. US cheese exports accounted for 12% of all cheese consumed in Mexico in 2017. This is not the first time Mexico has placed tariffs on US cheese. In 2010 Mexico placed nearly identical tariffs on US cheese during tensions over Mexican trucks’ access to US roadways. However, US cheese exports to Mexico only slowed marginally during the period (-1% year on year, 2010 vs. 2011), for a number of reasons:

1. Mexico had no alternative suppliers 

2. MXN was stronger relative to the USD helping affordability

3. NAFTA was not in limbo

4. Option to shift to other cheese variety


This time around things may be different:

1. Mexican Peso has depreciated against the dollar

2. EU trade agreement has been signed, giving Mexico leverage

3. US-Mexico relationship are not as amiable today

4. More comprehensive cheese variety coverage

Source: GTIS

So what is Mexico to do? For now it appears Mexico may be well stocked, with up to an estimated 6 months of cheese in stores. However, if the tariffs remain in place Mexico will need to seriously consider its options.

The newly signed Mexico-EU FTA is not yet in effect, but there is the possibility that Mexico may expedite implementation of tariff reductions on EU cheese. New Zealand, is in the process of negotiating a trade agreement with Mexico, which may also be expedited. One would think Canada could also look fill the void, given their presence in NAFTA. However, Canada is unlikely to have milkfat to spare for exports.

Under the new tariffs the US will continue to have preferential rates (25% vs. 45%) for some of the cheese types (cheddar, Gouda, Monterey, and fresh cheese). However, Mozzarella and hard Italian style cheese appear to have equal rates (20%) compared to other cheese exporters. This may result in a shift in the balance in the style of cheese being exported to Mexico. 

Going forward, cheese prices in the US may feel some pressure due to lower exports. While prices are unlikely to fall too far in the short term, if these tariffs remain in place for over 6 months, cheese producers will need to work hard to find new markets and dairy producers may see their milk prices coming in a little lower. 

Given that milk powders were exempt from the tariff hikes, Mexican cheese manufacturers will be able to import milk powders to be used to help domestic cheese production – to the extent they have capacity. As a result, the US might see a slight uptick in non-fat dry milk powder exports to Mexico. 

Longer term potential implications for US dairy exporters may be detrimental. While individual exporters are doing their best to be good partners and to solve these new challenges, the reality remains that the US may be viewed as a less reliable trade partner going forward. This is not ideal given the ever-increasing presence of the US as a significant player in the global dairy export market, and the invaluable quality of being a reliable partner. 

Possible impacts to cheese manufacturers:


o Higher cheese inventorieso Prolonged tariffs may could put downward pressure on cheese priceso Higher than expected NFDM prices – assuming uptick in imports

o Higher uncertainty in market may increase demand for price risk management tools

o Shift in product mix (non-tariff cheese or into non cheese products where capability exists)

o More pressure on Mexican cheese manufactures to increase output

o Realization of urgent need to broaden US dairy export market capabilities (trade agreements, sales teams, international market knowledge)

· Rural

o The longer the tariffs are in place, the greater downward price pressure on farm-gate milk prices in major cheese producing regions

o Increased uncertainty/lack of faith in markets

 

 

Destinations for US cheese exports in 2017. Source: GTIS

 
Source: Robobank

Alberta Dairy Farmers Stand Up Against President Trump

Alberta family dairy farms are recently getting caught in the crossfire regarding the North American Free Trade Agreement (NAFTA) and tariffs. The American dairy industry wants access to Canada to try to solve their serious over production concerns.

“Trump is picking on family farms like mine because the USA just has too much milk,” says Albert Kamps, vice chairman of Alberta Milk and dairy farmer near Lacombe. “They are over producing and want to dump their oversupply in Canada but we’re full.”

The Canadian supply management system keeps the majority of your dairy (and poultry) products being supplied by Canadian farms. This is done through quota that manages the production of milk and tariffs on some foreign dairy. Tariffs are a way for our farmers to be shielded against the heavily subsidized dairy coming into Canada. For example, American dairy farmers cheques are subsided 73 per cent (or $2.2 billion) from their government (Grey, Clark, Shih and Associates, 2017).

“What the American administration also doesn’t tell you is that no tariffs are paid on the first 10 per cent of products. The USA only allows three per cent tariff free, but we’re labeled as the bad guys.” Kamps continues.

Canada has a five-to-one trade imbalance with the U.S. on dairy, meaning we import about five times more dairy than they do. The Canadian market is too small to make a dent in US overproduction where the state of Wisconsin produces more milk than all of Canada.

Canadians want Canadian milk
Two recent polls (Abacus and Ipsos) suggest that Canadians overwhelmingly suggested that they want to support Canadian dairy farms, rather than importing their milk. The dairy industry in Canada supports nearly $20 billion towards the GDP and sustains about 215,000 jobs

Comparing American and Canadian dairy
Number of cows per farm
Canada: 85
US: 225

Number of dairy farms 
Canada: 11,000
USA 41,800

Use of synthetic hormones
Canada: illegal
USA: legal

Cost of milk*
Canada: $1.51/L
USA: $1.63/L
*AC Nielson, 2017. Based on comparable products (rbST-free)

Government subsidization
Canada: $0
USA: 73% of their cheque or about $22 billion

Production method
Canada: supply management through quotas.
USA: Open market

 

Source: Alberta Milk

April US dairy exports break record

U.S. dairy exports surged to an all-time high in April, but retaliatory tariffs on U.S. cheese by Mexico could put a dent in exports there.

Exports of U.S. dairy products set an all-time monthly record with shipments of 213,115 metric tons of milk powder, cheese, butterfat, whey and lactose.

Those exports were up 31 percent from April 2017 and broke the record of 204,453 metric tons set just a month earlier, according to the latest report from U.S. Dairy Export Council.

April exports were valued at $518.4 million, up 15 percent over a year earlier and the highest monthly value since April 2015.

Exports of ingredients continued to lead the way. Shipments of nonfat dry milk and skim milk powder to Southeast Asia were up 70 percent in volume year over year and sales to Mexico were the fourth-highest ever. Shipments of lactose to China were at record highs for the third month running, USDEC reported.

Total exports of nonfat dry milk and skim milk powder were 37 percent higher in volume than a year earlier, with sales to Mexico increasing 30 percent.

Total whey exports were 24 percent higher in volume and included record shipments to East Asia, up 123 percent.

Butterfat shipment increased 190 percent in volume, with shipment up 1,172 percent to Mexico on low comparables and 37 percent to Canada.

China again led the gains in lactose sales, increasing its imports 79 percent. Total lactose exports increased 23 percent in volume over year-earlier levels.

Cheese shipments were 22 percent higher with increases of 11 percent to Mexico, 31 percent to Japan and 15 percent to South Korea.

But USDEC is concerned with future cheese sales to Mexico, following retaliatory tariffs Mexico has put on imports of U.S. cheese in response to U.S. tariffs on Mexican steel and aluminum.

Mexico is the top export destination for U.S. cheese. With $391 million in purchases last year, Mexico imported 28 percent of all U.S. cheese exports. It is by far the largest U.S. cheese export market, exceeding second-place South Korea by $178 million in sales in 2017, USDEC said.

“Tariffs on cheese will potentially eliminate the competitive advantage we have in our No.1 market,” Tom Vilsack, USDEC president and CEO, said in a press release.

The retaliatory tariffs range from 10 to 15 percent on certain U.S. cheese products, rising to 20 to 25 percent after July 5.

“This is a significant setback for our farmers, processors and our exporters,” Jaime Castaneda, USDEC senior vice president for trade policy, said in the release.

Last year, U.S. suppliers shipped 96,413 metric tons of cheese to Mexico and the U.S. held a 75 percent share of Mexico’s cheese market. Over the last decade, both volume and value of U.S. cheese exports to Mexico have nearly tripled, according to USDEC.

Source: capitalpress.com

Saputo hopes to benefit from Mexican dairy tariffs, after drop in profits

Canadian cheese and dairy giant Saputo Inc. is hoping to use its international operations to milk the Mexican market in the wake of impending tariffs.

The Montreal-based company doesn’t have a large Mexican presence yet, but could see opportunities in the country crop up if U.S. dairy producers retreat from Mexico because of tariffs of up to 25 per cent on U.S. cheese exporters, said chief executive officer Lino Saputo in a conference call on Thursday.

“Mexico might look at other parts of the world to service their dairy needs,” he said, noting that Saputo now owns Australian milk processor Murray Goulburn Co-operative and has operations in Argentina.

“There might be some great opportunity for us to find Mexico a decent market for us for a long time to come.”

Despite the potential opportunities in Mexico, Saputo believes the upsides and downsides of the tariffs — a response to U.S. President Donald Trump’s tariffs on steel and aluminum from Mexico and Canada — will be equal because some dairy companies will send less or no product to Mexico and instead, funnel their surplus inventory back into the U.S., where Saputo does a lot of business and might face heightened competition.

Nonetheless, Saputo appeared to be optimistic about how the company will fare in coming months, revealing that it has “financial flexibility” of at least $3 billion that it could use for acquisitions.

“Our pipeline remains extremely full,” he said. “I think within this fiscal year, we have the potential to materialize a few more acquisitions that I think are going to help platforms like Saputo Cheese USA, perhaps platforms in international…Canada also can be well served with acquisitions.”

He also said the company will build a “state-of-the-art” facility in Port Coquitlam, B.C. to serve the western Canadian market, but sell its Koroit dairy plant in the state of Victoria and another plant in Burnaby, B.C. in 2019.

Saputo’s remarks came as the company announced its profit dropped sharply in its latest quarter due to a combination of higher costs, exchange rates, and lower selling prices in export markets compared with last year.

Its net income for the fourth quarter ended March 31 was $130.0 million, down 21.3 per cent from $165.2 million a year earlier.

Net income per diluted share was 33 cents, down from 42 cents, and adjusted net earnings dropped 18.1 per cent to $135.3 million.

Revenue edged up 0.9 per cent to $2.744 billion from $2.720 billion in last year’s fiscal fourth quarter. However, a fluctuation in the value of Canada’s dollar compared with other currencies had a $93-million negative impact on revenue.

Revenue from the United States fell to $1.435 billion, from $1.487 billion, while revenue from other international markets dropped to $328.4 million from $373.5 million. Canadian revenue increased to $980.9 million from $959.8 million.

The company’s earnings were also negatively affected by a combination of a higher cost of milk as a raw material, lower selling prices in export markets, higher transportation costs, and other expenses including a higher tax rate.

Source: ctvnews.ca

More dairy farmers feeling financial pressure in New Zealand

More farmers are feeling under financial pressure, and satisfaction with their banks has slipped, the May 2018 Federated Farmers’ Banking Survey shows.

The biannual survey drew 1,004 responses, more than double that of the last survey in November. While results indicate the vast majority of farmers are still satisfied with their banks, those saying they were ‘very satisfied’ or ‘satisfied’ fell from 81% to 79% since November.

The fall was particularly pronounced for sharemilkers (68.5% satisfaction, down from 77%) although for them the drop was mainly driven by more of them having a neutral perception rather than being dissatisfied.

Perceptions of ‘undue pressure’ have also picked up, from 8.1% in November to 9.6% in May. The increase is mainly down to dairy, where the increase was from 10% to 13.8% (with sharemilkers rising from 9.7% to 13.5%). However, this pressure is still less than experienced in 2016 when one in five sharemilkers felt undue pressure.

Just on 15% of arable farmers reported feeling under more pressure from their bank, but there were only 46 respondents from that sector.

Federated Farmers Vice-President Andrew Hoggard said while the average mortgage across agriculture has decreased in the past six months, it’s up from $4.6 million to $5.1m for dairy – the highest level since the surveys began in August 2015.

“We need to be careful interpreting these figures. It may just be a reflection of the profile of those who took part in the May survey compared to November participants.

“But it’s a fact that dairy holds two-thirds of the total agricultural debt of around $61 billion, and a growing proportion of that dairy debt is held by highly-indebted dairy farms.”

It’s worth noting the Reserve Bank also released its six-monthly Financial Stability Report this week and continues to view dairy debt as a financial stability risk.

“On the positive side, the Reserve Bank observed that better and more stable dairy prices mean most dairy farms are currently profitable, allowing some farms to repay some debt,” Andrew said.

“But it warned dairy farming remains highly indebted and vulnerable to any future downturn in dairy prices. It identified Mycoplasma bovis as an emerging risk that has potential to negatively impact productivity and profitability, and noted that dairy faces long-term challenges, including the impact of response to environmental concerns, such as stricter regulations.”

New Zealand Bankers’ Association Deputy Chief Executive Antony Buick-Constable was pleased the survey showed most farmers remain satisfied with their banks.

“Banks work closely with their agri clients, through good times and bad. Keeping the lines of communication open is critical to the ongoing success of farmers and their banks,” Antony said.

The survey, conducted by Research First, also showed interest rates appear broadly stable, although sharemilkers continue to pay higher rates than farm owners, reflecting the fact they don’t have the same levels of security as farm owners.

Just under a third of ‘all farms’ reported having detailed and up-to-date budgets for the season about to begin but as usual sharemilkers did better in that regard, with two-thirds having that budget in place.

Farmers’ satisfaction with communication from their banks remained stable at around 74%, with sharemilkers the least satisfied.

 

Source: Scoop

20,000+ Dairy Farms Have Signed up for MPP; Deadline to Register Extended

The Department of Agriculture this week said more than 20,000 dairy farmers have enrolled in the Dairy Margin Protection Program, for which enrollment closes Friday. USDA undersecretary Bill Northey told Politico he expects more producers to enroll in the program compared to last year. In 2017, roughly 20,300 dairy farmers enrolled in the program, accounting for 64 percent of U.S. milk production. Congress earlier this year revised MPP retroactively for 2018, including lower premiums for higher levels of coverage.

Dairy groups had long advocated for changes to the program that “did not provide a meaningful safety net,” according to the National Milk Producers Federation at the time. Northey says USDA has already sent about $19 million in checks to producers who signed up for higher levels of coverage, and therefore would have received an MPP payment in the last few months. The enrollment deadline was originally June 1st, but was extended a week by USDA.

America’s Dairyland Is Hurting and Wisconsin Seeks Solutions

America’s Dairyland is hurting and a new task force plans to spend the next year figuring out how to save the industry that’s integral to Wisconsin’s economy and identity.

Gov. Scott Walker on Tuesday announced creation of the task force tasked with coming up with recommendations to save the Wisconsin dairy industry, which pumps $43.3 billion into the state’s economy every year, accounts for nearly 80,000 jobs and produces roughly 14 percent of the nation’s milk — second only to California.

But the dairy industry has been struggling with collapsed milk and other commodity prices the past three years because of an abundance of milk on the market.

Wisconsin lost 500 dairy farms in 2017 while the total number of milk-cow herds is down about 20 percent from five years ago.

The dairy industry has been shifting toward larger, corporate farms over the last 15 years, creating conflicts with local residents and environmental activists because the farms produce massive amounts of waste.

Announcement of the task force came on the same day that the Wisconsin Supreme Court ruled in favor of a massive dairy farm in central Wisconsin that was looking to expand but had been blocked over zoning concerns.

Walker, a Republican who faces re-election in November, said the state agriculture department will join forces with the University of Wisconsin System to create the dairy industry task force. It is designed to bring industry experts together to create solutions to help farmers, processors and related industries.

“We need to work together to develop a strategy to maintain our state’s legacy as the Dairy State,” Walker said in a statement.

Members of the task force will be appointed by Wisconsin Department of Agriculture, Trade and Consumer Protection Secretary Sheila Harsdorf and University of Wisconsin System President Ray Cross.

A similar task force focused on the dairy industry was convened in 1985. It made 75 recommendations for the industry, which were then implemented to retain the state’s recognition as a dairy leader, Walker’s office said in announcing the latest effort.

The new task force will be chaired by Mark Stephenson, director of Dairy Policy Analysis at the University of Wisconsin-Madison. Stephenson said he hopes the group will begin meeting later this summer and gather information across the state for a year before issuing its recommendations.

“People don’t think we’re coming with all the ideas and prescription for what this task force is going to end up with,” Stephenson said. “We need to listen to people and capture their ideas both about what the problems are and the potential solutions.”

Better understanding the current situation, which Stephenson described as a “relatively seismic shift in the environment of milk production,” will help those in the dairy industry navigate it and better prepare for the future, even if all the problems can’t be easily solved.

“This is not a simple or quickly treated kind of question,” he said, while noting the importance of the dairy industry both to the state’s economy and its identity.

Known as “America’s Dairyland,” a slogan that’s been on license plates since 1939, Wisconsin has been home to the World Dairy Expo for 50 years. The annual event held in Madison every fall is considered the largest dairy cattle show in North America and also the biggest dairy-focused trade show in the world.

Wisconsin also honors its dairy heritage in many ways. It The dairy cow is the state’s official domestic animal, the official beverage is milk and its state quarter design features both a cow and a round of cheese.

“When I stop and think about the state, what is unique about this state, it probably is dairy,” Stephenson said. “There’s no other state that has as much dairy and dairy resources as Wisconsin does. I don’t think that’s a mistake.”

Source: nytimes.com

DeLaval Presents its Latest Innovations, a New Experience for Cows and Customers

DeLaval presents its latest innovative solutions for dairy farmers on 26 June. There will be a number of press events happening worldwide, at different locations.

“DeLaval’s innovation and customer focus around the clock has helped our customers globally to stay profitable for over 135 years. We are very excited about the future of dairy farming and these events are just the beginning of something exciting, new and better for our customers”, says Joakim Rosengren, President & CEO.

Dairy farmers all over the globe are facing similar challenges. These latest innovations are aimed to help milk producers to alleviate them from unstable labour availability and keep them at the forefront of animal welfare and food safety. These solutions will ensure dairy farming is a profitable option today and an appealing career choice for future generations.

If you wish to know more about the location and how to join these events, contact the DeLaval representative in your local market here.

 

From Farm to Table – Midwest Farm Families Share Insights on How to Make a Strong Community Connection and Highlight Dairy’s Many Benefits Through National Dairy Month Events

There is no denying it—the conversation around dairy has changed. Consumers are now more interested than ever in where their food comes from – including how the animals are treated on the farm, what the environmental effects of farming are and how dairy products get from farm to store. 

National Dairy Month is the perfect opportunity for farmers to open their doors and make a stronger connection with the community—highlighting dairy’s many benefits.

To provide some tips and best practices, we’ve asked farmers from across the Midwest to share insights on what they’ve done to connect with consumers and bridge the farm to table gap. Whether you are a dairy farmer looking to host your first community event, or you’re a seasoned pro and are simply looking for some ideas on how to take your event to the next level, we hope these insights provide inspiration as you connect with your community this June and beyond.

“Whether during National Dairy Month or any time during the year, it’s important for dairy farmers to share their story through opening their farms to consumers,” said Lucas Lentsch, CEO of Midwest Dairy. “A visit to a farm is a perfect way to joyfully bring dairy to life and give consumers an excellent dairy experience.”

Among the farm families we spoke to include:

  • Jennifer Holle: Northern Lights Dairy – Mandan, North Dakota
  • Melissa Reed: Hildebrand Dairy – Junction City, Kansas
  • Pat Bakeberg: Goldview Farms – Waverly, Minnesota
  • Matt Berning: Berning Dairy – Galena, Illinois
  • Doug Ode: Royalwood Farms – Brandon, South Dakota
  • Aubrey Fletcher: Edgewood Dairy and Edgewood Creamery – Purdy, Missouri
Question: How does your event make a difference to the community or to the dairy community?
 
Holle: These days, most communities are removed from the farm and people have no idea anymore where their food comes from. Therefore, we try to be very open and transparent during our events so that people can see that we are not only providing a nutritious, high quality product, but we do so by using the best practices and technologies for the safety and happiness of our animals.
 
Bakeberg: Our Breakfast on the Farm event brings the urban community and the dairy community together. Kids these days are so far removed from the farm, most have never seen a cow in person, let alone pet one. It’s a day to highlight the dairy industry, show the people how well the animals are cared for and how much work really goes into a farm.
 
Question: Why is it important to host an event during National Dairy Month, or other times during the year?
 
Reed: If we don’t tell the story of our farm we’re leaving the door open for someone else to tell the story for us. By opening our farm to the public, we’re showing transparency, sharing stories and giving people a good feeling when they think of dairy farming.
 
Bakeberg: For the first event we held, we were expecting around 500 people and well over 750 people attended. It has continued to grow every year and last year we had around 2,000 people attend. The need is there to have conversations with the public and they want to learn. Many of the kids believe the chocolate milk comes from the brown cows. Or, when asked where milk comes from, they say the grocery store. Anytime you can capture the attention of the public and show them the benefits of dairy products, it is time well spent.
 
Berning: It is important because it connects people with agriculture. It is an opportunity for the community to not only see what goes into farming first-hand, but to also have a hands-on experience on the farm.
 
Question: Can you share a few tips or best practices for other dairy farmers who might be interested in hosting an event for National Dairy Month?
 
Holle: Talk to a farmer that has already done an event and follow in their footsteps. We have helped a few other farmers around North Dakota host their own events by sharing tips.
 
Reed: Facebook is a powerful tool and by far the best way we market our events. We also suggest planning on the weather being hot and sultry. That said, we’ve moved our Dairy Month event from the afternoon to the evening and have seen interest in our event go way up compared to past years.
 
Bakeberg: Work with your state or regional dairy association – they have resources that can help. Also, having a good core event committee is crucial.We are on our 10th year, and we as a committee knowwhat needs to be done. Work with your industry leaders (such as your nutritionist or vet) to help out and get additional resources. And the last key: volunteers, volunteers, volunteers! It takes a lot to make the day go smoothly. We work with our local FFA and 4-H to help with the breakfast.
 
Berning: We talked to the dairy farm who hosted this event last year to hear how they did it—what worked and what didn’t, and we’re using those tips for this event. And while this is the first Dairy Month event we’ve hosted, we have hosted several school groups before, and we learned to keep it simple.
 
Fletcher: Be as prepared as possible. Plan for more people than you think will come and have everything set up in advance so you can do any last-minute tweaks. Also, you will get off-the-wall questions, just be honest and informative. People will get excited when they see cows and or calves. Have food. Whether you invite food trucks to the farm or set up your own, people get hungry. Keeping them on the farm as long as possible only increases the chances of educating them about dairy. Since we have the creamery and make cheese, we serve up grilled cheese sandwiches and fried cheese curds each year. They are a huge hit!
 
Question: In your experience, what has worked best? What hasn’t worked as well as you expected? Why?
 
Holle: Reaching out to local businesses and vendors is a great place to start. About four months before our event we send a letter to all our businesses and vendors asking for their help – whether it be providing door prizes, setting up a table at our event, monetary, or just to share any ideas they have. Don’t try to do too many things on the day of the event. Focus on showcasing the farm.
 
Bakeberg: We do guided tours around the farm and make stops at different educational booths. We create a punch card for the kids and if they stop at every booth and get the card stamped they get a free gift before they leave. This encourages them to go to the different booths and learn about various aspects on the farm and about dairy.
 
Berning: Keep it simple. Don’t overwhelm kids or people with information, rather give them an opportunity to experience the farm, get close to the animals and make it as much of a hands-on experience as possible. Let them touch the cows, feel the feed, feed the cows and let them ask lots of questions. It’s the personal experiences that allow them to connect with agriculture and learn about where their food comes from.
 
Ode: We try to add little things every year to freshen it up and keep people coming back. Last year, we held a raffle and gave out several pounds of butter.
 
Fletcher: Our most successful farm events happen when we can have small group discussions. We have farm tours all day, where 30 people can ride our tour trailer. This smaller group allows us to be able to answer questions and have dialogue back and forth about the farm or dairy.
 
Question: Do you have any specific examples of something you did, or feedback you’ve received on how your event was able to make stronger connection with the community and highlight dairy’s many benefits, whether it be taste, nutrition or on-farm practices?
 
Holle: Let the experience be as “high touch” as you can. On the tour wagons, you can ask, “Who likes the ice cream?” And then explain how the milk goes from the cows, to the plant, to their house and they can make all the connections because they see the whole process while on the farm. We have a lot of displays since we have people of all ages there, they all need to understand the full circle.
 
Reed: Visitors ask us a variety of questions about their milk. We love that they are turning to us, the farmer, for answers about topics including animal welfare, milk quality and antibiotic usage. We’d much rather visit with them regarding these topics than have them searching online where they may stumble upon false or inaccurate information.
 
Bakeberg: One stop we have on our tour is a station focusing on milk quality. We have the local state inspector educate the public what goes into making sure that milk is the safest product out there. We also get good feedback on the vet station. They educate how we take care of the animals and us strict guidelines with antibiotics.
 
Ode: Guests often say their parents were dairy farmers or farmers in general, and how we do things today is different than it was 30 or 40 years ago, which allows us to have discussions about how things were done then versus how it is done today. Cows are cared for much better today – we use fans, sand beds, and misters to keep them cool. We milk them three times a day, so there is less stress on the udders.Every load of milk that leaves the farm is checked for antibiotics. The public often doesn’t realize the care, attention and processes we go through.
 
Fletcher: People from all over come to our event, and it offers the perfect opportunity to share the many benefits of dairy and having dairy as a part of their regular diets. We have great help from Midwest Dairy, who typically set up a fun, informational booth as well as hand out fun and creative dairy-related information. People enjoy going out to the pasture where the cows are grazing. Our farm is quite picturesque, and I feel that helps people feel good about farmers, and we get to share with them our unique on-farm practices.
 
Question: How has conversations with consumers changed over the years? What were the common questions you used to get 10 years ago versus the common questions you get today?
 
Holle: Conversations lately have gotten vaguer. Ten years ago, they were more specific because people understood farming a little more. But as the number of dairy farmers has decreased over the years, so has the knowledge of dairy in general. You have to be ready for any type of question.
 
Bakeberg: Adults like to ask questions about things they have read on social media. From the kids’ aspect, the questions really have not changed. You get the common questions, like does chocolate milk come from those brown cows and why do you take the calf away from the mom?

Ode: Before they were asking about things in the barn, now they are asking about things like tail docking, dehorning, reproductive shots. Questions are also more health conscious than they were before. We get a lot of questions about the milk – how often it’s picked up, where it goes?

Fletcher: When we first started the creamery in 2015, we were flooded with questions about GMOs, hormones and raw milk. The misconceptions about modern-day farming are quite skewed to the general public. When we explained the concepts behind their questions some understood and others less so. We explained to them that we are real farmers and this is our livelihood. We take great care of what we do, or we wouldn’t be able to keep doing it. We still get a few of those questions from time to time, but the majority of people now are interested in how we make cheese and how to milk cows or raise calves.

Question: Any pieces of advice or words of encouragement you can offer farmers who might be hesitant to host an event?

 
Holle: Get on the phone, talk to a dairy farmer that does events, and just follow in their footsteps. It really isn’t as overwhelming as you may think and as long as you have the basic bases covered, then everyone will have an awesome experience on the farm. Also, lean on your businesses and vendors. Most love to do community work and they will have awesome support and ideas that you can implement.
 
Reed: While preparing for an event is hard work, the rewards are well worth the efforts. We find the community is far more welcoming of our farm and comfortable with what we do, knowing that we are happy to open our farm to the public.
 
Bakeberg: Just do it. It’s very rewarding to see the smile on the kids’ faces. It is hard work, but with a good committee it makes it a lot easier. Don’t be afraid to ask for help.
 
Berning: It is so important to get involved and do things for the community, and opening up your farm is a great way to make those connections. Talk to other farmers who have done it and take their advice when it comes to hosting your own on-farm event. That will make it much easier.
 
Ode: Just do it. It’s hard work, but it’s good to be proactive in showcasing your place and dairy farming as a whole.
 
Fletcher: Be real and be transparent. Consumers are genuinely curious about their food and where it comes from. With so much false information so easily accessible, be thankful people want to hear straight from the source. And remember no question is a dumb question. Most people have never been on a farm and have no idea how any of it works. If you can help educate one person to choose dairy, I think the entire day is worth it!
 

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