Archive for Dairy Industry

Yogurt sales sour as US breakfast culture changes

Despite shelves full of new varieties — from Icelandic to Australian to coconut-based — U.S. yogurt sales are in a multiyear slump. Yogurt companies are confident that more new products can boost sales. But some analysts are skeptical, saying larger trends — like growing sales of protein bars — will be hard to turn around.

“Consumers are just not eating as much yogurt as they once did,” said Caleb Bryant, associate director of food and drink reports for Mintel, a market research company.

U.S. sales of yogurt and yogurt drinks peaked at nearly $9 billion in 2015. In 2019, they’re expected to hit $8.2 billion, down 3.6% from 2018, Mintel says. They’re expected to fall another 10% to $7.4 billion by 2024.

Chobani — the second-biggest yogurt maker by U.S. market share — thinks innovation can halt that slide. Last month, the company introduced its first oat-based yogurts, capitalizing on booming sales of oat milk and consumer interest in plant-based eating. The move follows market leader Danone’s introduction last July of oat-based yogurts under its So Delicious brand.

“If we stay close to the consumer and continue to give them the food they want from a trend perspective and a health perspective, yogurt continues to grow,” Chobani President Peter McGuinness said.

But for the first time, Chobani is also moving into non-yogurt products. In January, it’s launching four flavors of oat drinks as well as dairy-based coffee creamers. It’s an acknowledgment of market realities: coffee creamer and oat milk sales are climbing even as other products — including Greek yogurt and soy milk — struggle.

Health and animal welfare concerns are driving some Americans away from dairy altogether. In November, the nation’s largest milk processor, Dean Foods, filed for bankruptcy protection, citing a decades-long decline in U.S. milk consumption.

McGuinness insists the move isn’t a defensive one, and that Chobani is still bullish on yogurt. The company felt coffee creamers were a good fit since cream is a byproduct of yogurt manufacturing, he said. And the company is convinced that plant-based eating is a trend with staying power.

“We love yogurt and we still think yogurt is underpenetrated,” McGuinness said. Chobani, which is privately held, says its dollar sales are up 9% so far this year thanks to the introduction of lower-sugar and coconut-based yogurts.

McGuinness said Chobani plans to enter other market categories, too. The company opened a 70,000-square-foot innovation center in Twin Falls, Idaho, earlier this year and has hired additional research and development staff.

Bryant agrees that innovation is important, but he said yogurt companies are just taking share from each other since overall sales aren’t growing.

He predicts yogurt sales will continue to fall because U.S. consumers are eating breakfast on the go and aren’t making time for spoonable yogurt. They have new options, like nutrition shakes and protein bars, and many aren’t keen on dairy products.

“It’s not one major factor. These little things are chipping away at the market,” he said.

In a Mintel survey released this month, 30% of people who bought yogurt in the past three months said they were also buying high-protein foods or probiotic foods instead of yogurt. Meanwhile, 18% said they were overwhelmed by the number of yogurts and yogurt drinks on the market. The average grocery store has more than 300 separate yogurt products, a 4% increase from 2015, said Acosta, a marketing firm.

McGuinness acknowledges that consumers are overwhelmed. He said Chobani frequently prunes its offerings and removes poor sellers.

“We need to stop duplication and make sure we are answering consumer trends and consumer needs,” he said.

Bryant said the market will only grow if yogurt makers attract new consumers and convince them to eat yogurt for different occasions, like snacks or dinner. Yogurt treats for kids, for instance, have helped bring in new buyers, he said.

Yogurts designed for specific diets might also attract consumers, Bryant said. After years of declining yogurt sales, General Mills helped stabilize its market share this year with its YQ-brand high protein yogurt.


‘Pretty bloody hard’: Local businesses in tears as another NSW dairy farm shuts down

The drought has claimed another victim as another dairy farm and processor in New South Wales calls it a day.

Dairy farm key points

Key points:

  • Yet another NSW dairy operation will shut down at the end of the week as running costs render the business unsustainable
  • Ten staff will lose their jobs, and local businesses are expected to feel flow-on effects
  • The operator says a lack of a floor price for milk, as well as the pressure of the drought, have made it impossible to continue

Big River Milk, based in the Clarence Valley at Southgate, will join more than 200 other farms that have shut down over the past decade when it ends more than 15 years of operation at the end of the week.

The operation, which has had numerous owners over the past decade, said the drought was making it impossible to continue.

“You know we were spending in excess of $30,000 a month on bought in fodder, besides our pellets for the dairy,” operations manager Barry Paff said.

“Businesses just can’t continue to do stuff like that.

“We’re at the point now where we’ve had to reduce the herd by two thirds and we’re trying to continue to supply our current customers at that high cost — it’s just crippled the business.

“But going forward it’s about the [dairy cooperatives] of this world understanding too, that they can’t continue to sell milk at $2.65 when the farm base is as tough as it is, and because we specialise in coffee shops, it does make it tough.”

‘A well-known brand’

At its height Big River was milking 250 cows and supplying Coles, as well as coffee shops along the coast, with its product.

The company broke the news of the imminent shutdown to its customers on social media at the weekend, saying its last deliveries will be this Thursday and Friday.

“We were trying up until as late as last Friday, trying to find somebody else to come in and try to take over that part of the business, which would have probably been a big help, but unfortunately just couldn’t do that,” Mr Paff said.

“We have had discussions with other parties over time.

“If we could find someone now that’s prepared to take over the factory, I think the actual owners would then endeavour to keep the farm running and supply so that we can keep it going because it’s a very well-known brand across the area.”

‘A sad reflection’

Shaughn Morgan, the chief executive of lobby group Diary Connect, said the impacts of the closure will be widespread.

“You would have Big River Milk go back into the local community and be able to put the money, their hard earned money back into the local community,” Mr Morgan said.

“Certainly I think it’s vitally important that we’re able to maintain these dairy farms so that future generations of dairy farmers have an opportunity to be able to go back onto the land and ensure the survival of the dairy industry in this state.

“This is a crisis period.”

Mr Morgan said it is imperative that the farm gate price paid to the dairy farmer is above the cost of production.

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“Processors have an obligation to ensure that,” he said.

“In the instance of Big River Milk, they were able to do the entire value chain.

“It will be the flow-on effect to the retailers that will no longer be able to get this locally-produced, premium fresh milk.

“Now we’re going to be in a position that a further dairy farm processor is going to go into possible liquidation.

Flow-on effects

The coffee shops Big River supplied are, according to Mr Paff, “devastated, actually.”

“I’ve had many contact me … I can’t believe the amount of people who have come on Facebook and commented,” he said.

The company will not know until after Friday whether it will even continue to run the herd.

Mr Paff said there has been a push for a floor price for milk.

“Many years ago … we said farmers need to have a price of 75 cents, 70-75 cents would be sustainable,” he said.

“Well that’s a long time ago, so I would believe something like a 90 cent margin would be the price.”

Only weeks from Christmas 10 staff at Big River Milk have been told they no longer will have a job.

“Probably the hardest thing I’ve had to do in a long time, actually,” Mr Paff said.

“Also one of the other hardest things is selling good dairy cows to an abattoir.


I’m a Washington dairy farmer with a lot of cows — is that bad?

Austin Allred standing in front of some of his jersey cows. (Courtesy of the Allred family / )

I am a family dairy farmer producing dairy products from more than 10,000 cows. Sadly, to some that makes me a “factory farmer.” They picture me as a profit-hungry corporate big-shot deserving of being driven out of business. I and other dairy farmers face lawsuits, public criticism, online bullying, ever more regulations, activist generated “undercover” videos, claims we abuse our employees and animals, and abusive enforcement by government agencies. Surveys show that the trust farmers have always enjoyed is being eroded.

My grandpa was a crop farmer with some beef cows. He milked a few cows but on a very small scale. My dad is a crop farmer. Most don’t realize how these different farm types work together. Organic fertilizer — cow manure — helps keep our organic farms growing. Crop rotation and pasture land make farming work together.

Farming, I discovered, is an 18-hour-a-day, 365-day-a-year business. I sure found it wasn’t about the money. Today, national statistics show the average farmer takes in about $60,000 per year. Very few farmers I know could afford to raise a family in Seattle or any other major city with the “profits” they earn on their “factory farm.”

I’m not a “factory farmer,” I’m a family dairy farmer. We sell our milk through a dairy cooperative and like all but a few who process their own milk, our milk is sold on the global market. We don’t control the price we get. The price today is not much more — given inflation — than my grandfather got for his milk about 40 years ago. While the price of milk has not increased much, our costs have gone way, way up. Labor costs have about quadrupled in that 40 years. Total farm costs, including labor, feed, land costs and other items needed to farm, have increased many times over. Important items such as health insurance and medical costs for employees and my family have increased much more.

Porter Allred, 5, stands by some of the family jersey cows coming in for their evening meal. (Courtesy of the Allred family)
Porter Allred, 5, stands by some of the family jersey cows coming in for their evening meal. (Courtesy of the Allred family)

Imagine if you made cars, widgets or software. The price you get for what you make stays about the same, but your costs to make them go up and up and up. Your banker doesn’t like seeing big losses, and when you are already working impossible hours you can’t fix the problem by working more. Something has to give. There are only two real answers: increase productivity or go out of business. America’s farmers have done both.

Today, we have less than one third the number of farms than in the 1940s. The mid-size farm that used to dominate is getting rare. There are large professional farms, and a growing number of small farms that are not large enough to provide a family income. These are hobby or part-time farms. The large professional farms are almost all family farms. Some 97% of America’s farms are owned and managed by families, most often families that have run the farm for several generations and whose current owners, like me, want nothing more than to pass our farm to our children.

My grandfather and father faced many of the same choices that I do today. To stay in business I have to become more productive. Crop farmers have to add more land and equipment. As a dairy farmer it means I need more cows and my cows have to produce more. I have to use the best and latest technology I can possibly afford, and my costs have to be kept to a minimum. Only farms that do that can stay in business, which is why the surviving farms are usually run by some pretty smart, hardworking business owners. The productivity of American dairy cows is truly amazing. They produce nine times more milk per cow than the dairy cows in India. That means our cows produce nine times less greenhouse gas per gallon of milk than cows in India. We also use 60% less water to produce the milk products you enjoy, and as of 2007 we had 63% less carbon footprint per gallon produced than in 1944. Cows and calves are cared for with a new level of professionalism combined with a love for the animals that characterizes all but a few dairy farmers.

‘My take’

Got something to say about a topic in the news? We’re looking for personal essays with strong opinions. Send your submission of no more than 500 words to with the subject line “My Take.”

I’m a professional dairy farmer, and if you enjoy ice cream, real cream in your imported coffee, cheese on your pizza and yogurt in the morning, you may be glad that I am. You are enjoying food that is far safer, far less expensive and far more environmentally sustainable than your parents or grandparents ever had. The price of milk has increased far below inflation rates and most of the increase has gone into selling and distributing milk products rather than to the farmer.

When you hear the few but loud activists claim me and my fellow dairy farmers run “factories,” think about it. To those few, anyone owning more than a handful of cows and selling cheese at a farmers market should go away. But, if I wasn’t milking a lot more cows than farmers did in grandpa’s days, I wouldn’t be farming. So, I’m glad to be one and hope that you, too, are glad that I am.

Austin Allred farms in Royal City and Moxee, Washington. In 2018, he received the Outstanding Dairy Farm Sustainability Award presented by the Innovation Center for US Dairy.


‘They’re Trying to Wipe Us Off the Map.’ Why Independent Farming in America Is Close to Extinction

Mary Rieckmann with her son Russell tending to their cows on Nov. 20, 2019. Jason Vaughn for TIME

For nearly two centuries, the Rieckmann family has raised cows for milk in this muddy patch of land in the middle of Wisconsin. Mary and John Rieckmann, who now run the farm and its 45 cows, have seen all manners of ups and downs — droughts, floods, oversupplies of milk that sent prices tumbling. But they’ve never seen a crisis quite like this one.

The Rieckmanns are about $300,000 in debt, and bill collectors are hounding them about the feed bill and a repayment for a used tractor they bought to keep the farm going. But it’s harder than ever to make any money, much less pay the debt, Mary Rieckmann says, in the yellow-wallpapered kitchen of the sagging farmhouse where she lives with her husband, John, and two of their seven children. The Rieckmanns receive about $16 for every 100 pounds of milk they sell, a 40 percent decrease from six years back. There are weeks where the entire milk check goes towards the $2,100 monthly mortgage payment. Two bill collectors have taken out liens against the farm. “What do you do when you you’re up against the wall and you just don’t know which way to turn?” Rieckmann says, as her ancient fridge begins to hum. Mary, 79, and John, 80, had hoped to leave the farm to their two sons, age 55 and 50, who still live with them and run the farm. Now they’re less focused on their legacy than about making it through the week.


In the American imagination, at least, the family farm still exists as it does on holiday greeting cards: as a picturesque, modestly prosperous expanse that wholesomely fills the space between the urban centers where most of us live. But it has been declining for generations, and the closing days of 2019 find small farms pummeled from every side: a trade war, severe weather associated with climate change, tanking commodity prices related to globalization, political polarization, and corporate farming defined not by a silo and a red barn but technology and the efficiencies of scale. It is the worst crisis in decades. Chapter 12 farm bankruptcies were up 12 percent in the Midwest from July of 2018 to June of 2019; they’re up 50 percent in the Northwest. Tens of thousands have simply stopped farming, knowing that reorganization through bankruptcy won’t save them. The nation lost more than 100,000 farms between 2011 and 2018; 12,000 of those between 2017 and 2018 alone.


Farm debt, at $416 billion, is at an all-time high. More than half of all farmers have lost money every year since since 2013, and lost more than $1,644 this year. Farm loan delinquencies are rising.

Suicides in farm communities are happening with alarming frequency. Farmers aren’t the only workers in the American economy being displaced by technology, but when they lose their jobs, they also ejected from their homes and the land that’s been in their family for generations. “It hits you so hard when you feel like you’re the one who is losing the legacy that your great-grandparents started,” said Randy Roecker, a Wisconsin dairy farmer who has struggled with depression and whose neighbor Leon Statz committed suicide last year after financial struggles forced him to sell his 50 dairy cows. Roecker estimates he’s losing $30,000 a month.

Even large companies are facing unprecedented challenges; Dean Foods, a global dairy producer that buys milk from thousands of small farmers, filed for bankruptcy Tuesday, November 12, and is seeking a sale, a move that could further hamper farmers looking for places to sell their milk.


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Farmers have always talked of looming disaster, but the duration and severity of the current crisis suggests an alarming and once unthinkable possibility — that independent farming is no longer a viable livelihood. Small farms, defined as those bringing in less than $350,000 a year before expenses, accounted for just a quarter of food production in 2017, down from nearly half in 1991. In the dairy industry, small farms accounted for just 10 percent of production. The disappearance of the small farm would further hasten the decline of rural America, which has been struggling to maintain an economic base for decades.

“Farm and ranch families are facing a great extinction,” says Al Davis, a Nebraska cattle producer and former state senator. “If we lose that rural lifestyle, we have really lost a big part of what made this country great.”


A perfect storm of factors has led to the recent crisis in the farm industry. After boom years in the beginning of the 21st century, prices for commodities like corn, soybeans, milk, and meat started falling in 2013. The reason for these lowered prices are the twin forces upending much of the American economy: technology and globalization. Technology has made farms more efficient than ever before. But economies of scale meant that most of the benefits accrued to corporate farmers, who built up huge holdings as smaller farmers sold out. Even as four million farms disappeared in the United States between 1948 and 2015, total farm output more than doubled. Globalization brought more farmers into the international market for crops, flooding the market with soybeans and corn and cattle and milk, and with increased supply comes lower prices. Global food production has increased 30 percent over the last decade, according to John Newton, the chief economist of the American Farm Bureau. If that’s a good thing for feeding the planet, it also reduces what comes back to producers, whose costs don’t fall with prices.

President Trump’s trade war hasn’t helped matters. After the United States slapped tariffs on Chinese goods including steel and aluminum last year, China retaliated with 25 percent tariffs on agricultural imports from the U.S.. China then turned to other countries such as Brazil to replace American soybeans and corn. “This was a market that took years to develop,” says Barb Kalbach, a fourth- generation corn and soybean farmer in Iowa, referring to China. “The president has worked very hard to make our markets unstable.” Her soybeans are harvested and sitting in a grain elevator as she waits to see if China will buy despite the tariffs. Agricultural exports between January and August this year were down 5 percent, or $5.6 billion dollars, from the same period last year. The Trump administration has made $16 billion in aid available to farmers affected by the trade war, though small farmers complain the bulk of the money has gone to huge producers with large crop losses. Around 40 percent of the $88 billion in farm income expected this year is going to come in the form of federal aid and insurance, according to the American Farm Bureau Federation. Farm income absent that assistance, at $55 billion, is down 14 percent since last year and is half of what it was in 2013.

Smaller farms have found it especially hard to adapt to these changes, which they blame on government policy and a lack of antitrust enforcement. The government is on the side of big farms, they say, and is ambivalent about whether small farms can succeed. “Get big or get out,” Earl Butz, Nixon’s secretary of agriculture, infamously told farmers in the 1970s. It’s a sentiment that Sonny Perdue, the agriculture secretary under President Trump, echoed recently. “In America, the big get bigger and the small go out,” Perdue said, at the World Dairy Expo in Wisconsin in October. The number of farms with more than 2,000 acres nearly doubled between 1987 and 2012, according to USDA data. The number of farms with 200 to 999 acres fell over that time period by 44 percent.

Many small American farmers are routinely selling their crops for less than it costs to produce them. “It’s very intimidating, you work hard every day, and every day, it seems like you’re just always struggling,” says Rieckmann.

Prices are so low that farmers like the Rieckmanns are trying to figure out other ways to come up with the money to keep their farm going. But like many other rural areas around the country, their town of Fremont does not have a bustling economy. Both a Kmart and another department store, Shopko, closed in Waupaca county this year, costing dozens of workers their jobs. Mary Rieckmann who will turn 80 in January, got a job delivering newspapers; the family also launched a GoFundMe account. But after Mary crashed her car on a foggy night, her husband and sons convinced her to abandon her paper route. In the past, the family has sold calves to raise extra money, but John recently brought two calves to the stock market and got $20 for one and $30 for another—two years ago, those calves would have brought in $300 to $400 each. “If somebody would have told me 20 years ago what it was going to be like now, I think I would have called him a liar,” Rieckmann says.


Heavy rain and unseasonable snow this year have also hurt many Midwestern farmers. This year “has been one of the most significant weather event years,” said John Newton, chief economist of the American Farm Bureau Federation. Portions of Iowa, Nebraska, and Minnesota experienced record flooding this year, with the upper Mississippi River receiving 200 percent more rain and snow than normal. Unusual rain and snow prevented farmers from planting on 19 million acres this year, the most since the USDA began measuring in 2007. Last year, by contrast, weather prevented planting on just 2 million acres.

Mike Rosmann, a clinical psychologist and farmer from Iowa who works with farmers in distress, says that this spring, he got seven calls per week from farmers who were having mental health problems because of their farm’s finances. One farmer called Rosmann to say he was considering suicide — floods destroyed the corn he had already harvested and stored in a grain elevator, but neither crop insurance nor flood insurance would cover it, since he had already harvested the crop. “When that farm is lost, it’s a huge amount of loss of self,” says Scott Marlow, senior policy specialist at the Rural Advancement Foundation, which runs a hotline for farmers in danger of losing their farms. John Hanson, who runs an assistance hotline in Nebraska, says that this year he has gotten calls at midnight from desperate farmers, including one sitting in his kitchen with a loaded shotgun and the lights out.

“It’s very, very bleak for us, and many farmers I know are in the same boat,” said Brenda Cochran, a small dairy farmer in Pennsylvania who says she knows of nine suicides related to low milk prices over the last two years. “It would take a miracle to sustain us for five years.” Farm Aid operates a 1-800 hotline for farmers facing crisis, and calls to that hotline were up 109 percent last year from the year before, says Alicia Harvie, director of Farm Aid’s Advocacy and Farmer Services. The newest farm bill sets aside $50 million over five years for behavioral health supports for distressed farmers.

Rural America has been shrinking for decades, and the Great Recession accelerated that contraction as rural manufacturing jobs disappeared and people moved to cities and suburbs seeking work. That is indeed where the jobs are. Between 2008 and 2017, metropolitan areas that included central cities of at least 50,000 people accounted for 99 percent of all job and population growth, according to data crunched by David Swenson, an economist at Iowa State University. In the Midwest, 81 percent of rural counties saw population declines between 2008 and 2017, and in the Northeast, 85 percent of rural counties shrank over that time period.

Kalbach, the Iowa corn and soybean farmer, says on the square mile of land where she lives, five farm different families used to grow corn, beans, hay, cattle, and pigs. Over the past 15 years, the other four families have given up and moved away. As farmers sold to bigger operations, the local businesses that were dependent on small farmers went belly-up, too. The place where the Kalbachs buy chemicals is now 75 miles away. Her county’s lone pharmacy closed earlier this year. There is no longer a local place where she can get farm equipment repaired. “All the thousands of farmers that have left the land—all the businesses have gone with them,” she says.

So have the institutions that make a community. Around 4,400 schools in rural districts closed between 2011 and 2015, the most recent year for which there is data available, according to the National Center for Education Statistics; suburban districts, by contrast, added roughly 4,000 schools over that same time period. In Wisconsin’s dairy country alone, the Antigo School District, in north central Wisconsin, closed three elementary schools this year, and 44 schools have closed since 2018.

“I used to have a lot of neighbors, now I have almost no neighbors,” says George Naylor, an Iowa corn and soybean farmer who is trying to transition to organic farming to stay afloat.

Cochran is worried about the future of her rural Pennsylvania community as more farmers give up. Two neighbor farm auctions are scheduled soon. The dairy refrigeration supply business where she buys equipment is on the verge of collapse. Young people, seeing economic despair all around them, get out as quickly as they can. “I see this as a wholesale removal — or extermination — of our rural class,” she says.

There’s nothing on the horizon to turn around these rural areas. Americans are increasingly concentrating in a few metropolitan areas — by 2040, 70 percent of Americans will live in 15 states. The regions surrounding America’s family farms may become the country’s next ghost towns. “We have to think about what we really want rural America to look like,” says Jim Goodman, president of the National Family Farm Coalition. “Do we want it to be abandoned small towns and farmers who can’t make a living, and a lot of really big farms that are polluting the groundwater?” (Large farms, which have more animal waste to deal with because of their size, have been found to pollute groundwater and air.)

Most family farmers seem to agree on what led to their plight: government policy. In the years after the New Deal, they say, the United States set a price floor for farmers, essentially ensuring they received a minimum wage for the crops they produced. But the government began rolling back this policy in the 1970s, and now the global market largely determines the price they get for their crops. Big farms can make do with lower prices for crops by increasing their scale; a few cents per gallon of cow’s milk adds up if you have thousands of cows.


Smaller farmers warn that a country without local farmers can create problems in the food supply chain. If one company is providing all the milk or cheese to an entire region, what happens when that plant gets contaminated or a storm isolates it from the rest of the country? “It’s an incredibly fragile supply chain, and when it fails, it fails completely,” says Marlow, of the Rural Advancement Foundation.

Family farmers say concentrating farmland among a few big companies is akin to feudalism, and un-American. It also diverts whatever profits might come from farming to faraway investors, aggravating the economic and geographic divisions that feed the nation’s political divide. “There’s a strong reason to be deeply concerned when instead of having 10 mid-sized dairy farms producing income whose owners spend it in town, you replace that with a large farm owned by a set of investors whose profits go running off to New York and Chicago,” said Peter Carstensen, a professor of law emeritus at the University of Wisconsin law school.

Farmers say the best solution is government policy that cracks down on consolidation of the grocery stores and food processing facilities that buy food from farmers. Existing antitrust law would allow the government to prevent big mergers that mean farmers have fewer places to sell their crops and that supplies are more expensive, but those laws go largely unenforced, says Carstensen. Earlier this year, a Wisconsin congressman introduced legislation to put a moratorium on large food and grocery mergers. Farmers are advocating for better antitrust enforcement across the country; in October, cattle ranchers held a ‘Rally to Stop the Stealin’!’ to urge Congress to protect family farmers from monopoly power, and in Vermont, dairy farmers have filed a lawsuit alleging that a conglomerate of milk buyers conspired to set low prices on milk.

One category of small farmers is thriving in the current marketplace: organic farms who can charge a premium for their crops and who can sell them locally. There were more than 14,000 certified organic farmers in 2016, up 58 percent from 2011. But switching to organic is expensive, and for farmers like the Rieckmanns who are already deeply in debt, not an option. They haven’t gotten a cent of aid from the government, Rieckmann says, since the assistance goes to the farms with the most farmland and animals. They’re not holding their breath that anything will change. “I sometimes feel,” says Mary Rieckmann, “like they’re trying to wipe us off the map.”


Australian dairy industry endures one of its worst years ever amid drought and increasing prices

Australian dairy has endured “one of the toughest seasons in living memory”, said chairman of Dairy Australia, Jeff Odgers. Cowra farmer Ian Hindmarsh, pictured’, is one of the many business owners who have been affected by drought Picture: Renee Nowytarger

The dairy industry is fighting its way through “a perfect storm” of drought, high water prices, and costly feed which has produced one of its worst years ever.

The chairman of Dairy Australia, Jeff Odgers, told the industry organisation’s annual general meeting near Warragul in Victoria’s Gippsland “there is no doubt that 2018-19 was one of the toughest seasons in living memory.”

“Australian dairy has been hit by a perfect storm, which we must try to work our way through,” Mr Odgers told delegates.

Mr Odgers’ remarks came as the association representing NSW farmers said an online survey found 90 per cent of respondents would pay more for milk, and urged retailers to sell it for no less than $1.50 a litre, saying over the past 12 months 51 farmers had left the industry in that state alone.

In northern Victoria, which has been hit by severe drought and where the price for irrigation water on the spot market has risen eight-fold, many farmers endured such losses that they have sold up.

“It’s fair to say that that now is playing out in varying degrees in different parts of the country,” Mr Odgers, who operates a large dairy farm business in Shepparton in Victoria, said.

It was harder to remain profitable, and some farmers just could not see a way forward and were getting out.

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Next week Dairy Australia will release its national plan to secure the future of the industry.

“People will make choices, but this is what the dairy plan is about,” Mr Odgers said.

Milk production declined 5.7 per cent, and dairy farmers needed to carefully work out how to maintain profitability including “having boots on the ground where needed” in the form of professional advice.

“Dairy has a future, and it will continue to evolve,” Mr Odgers said.

But it needed a campaign to achieve greater levels of profitability, efficiency and trust within the community.

“Building community trust is more important than product promotion,” Mr Odgers said.

“Dairy Australia aims to connect with socially conscious consumers.”

A survey had found 70 per cent of respondents trusted the industry, while 84 per cent had trust in its products.

During a question and answer session with the farmers and other industry operators who make up the membership of Dairy Australia, a woman expressed concern that vegans were getting the upper hand in urging consumers to give up milk.

She said in one conversation, a vegan had told her “I am a vegan, I am your enemy.”

Mr Odgers said while such concerns were being addressed with a campaign targeted particularly at millenials, “you can’t replace milk.”

In an interview with The Australian, Dairy Australia’s managing director, David Nation, said “the biggest single challenge facing the industry is its feed base.”

Drought had meant there was less grain and other fodder being grown, reducing supply and increasing price.

“We find we are operating in a difficult, volatile environment,” he said.

Also Friday, the NSW Farmers Association urged consumers to use their power to demand fair pricing for dairy products such as fresh milk, cheese and butter.

NSW Farmers dairy committee chair Colin Thompson said the consumer “is a dairy farmer’s best advocate”, with more than 90 per cent of respondents to an online survey saying they would pay more for generic brand milk in the Association’s Facebook and Twitter polls.

“We need a fair price for our dairy products to ensure farmers can continue producing. The retail price of fresh milk must start at $1.50 per litre,” Mr Thompson said.

“The supermarkets’ private label milk and cheese products have been heavily discounted for a long time now and it has taken its toll on the industry.”

“If something doesn’t happen soon, dairy farmers will continue to exit the industry. Our industry has lost 51 farmers in the past 12 month in NSW and the situation is even worse in states like Queensland.”


Could EU dairy exports to Russia resume?

In 2014, the EU imposed economic sanctions against the Russian Federation. In response, the Russian Federation imposed import bans on agricultural products (including dairy) from the EU.

As a result of the bans, EU dairy exports (30,000 tons of butter, 257,000 tons of cheese, 21,000 tons of SMP and 26,000 tons of whey powder on an annual basis) with a total annual value of €1.4bn ($1.54bn) came to a complete halt.

The countries most adversely affected by the ban were Finland, the Netherlands, Lithuania, Poland and Germany.

Following the introduction of the sanctions, EU dairy prices (butter, cheese and SMP) continued to decrease significantly, the report noted.

The EU economic sanctions are effective until the end of January 2020, however, L’Interform said that it has been hearing the EU and Russia might be reconsidering their current stance.

Should the sanctions no longer be in place, L’Interform said it expects a short-term positive price shock to European dairy prices and significant business opportunities for competitive EU dairy companies.

Russia currently imports around 250,000 tons of cheese per annum, and EU producers used to enjoy almost 60% of the market share. On a smaller scale, the Russian dairy market also has the potential to open up several tens of thousands of tons of additional butter export for EU producers.

As a result of the sanctions, Russia has increased its internal dairy production, however, the increase in production has not been enough to fill the gap, and to reach a self-sufficient domestic dairy industry. Therefore, Russia has still been relying on dairy imports – although at lower volumes – now predominantly from Belarus. In 2018, cheese imports from Belarus accounted for 83% of total Russian cheese imports.

The EU extended economic sanctions against Russia until the end of January 2020, however, according to L’Interform, some EU members, most notably Italy, Hungary, Greece, France, Cyprus and Slovakia are sceptical about the sanctions, and have called for a review.

In addition, due to the recently-introduced additional US import tariffs on a wide range of EU products, dairy products are facing tough sales conditions to the US market.

L’Interform said its sources believe that the parties might consider changing their positions, but it is not clear if this is being driven by economic factors or if political considerations are also involved.

L’Interform said there is a significant business opportunity for European dairy companies should the ban be lifted, or the ban not extended.

Any increases wold come primarily at the expense of Belarus, the report argues, adding that European imports could also compete readily with newer Russian products.

Russia was also recently admitted to the International Dairy Federation​ (IDF).


Dairy Defined: Dean Foods a Reminder of Cooperative Strength

“Disruption” is a present-day buzzword, and dairy has had its share. From the globalization of markets to the rise of plant- and cell-based competitors, farmers are grappling with a shifting landscape, even as dairy farms themselves have changed.

But none of that is as personally disruptive as a missed milk check – the interruption of the cash flow that’s necessary to keep a dairy operating. That’s the disruption some farmers have worried about in recent weeks, following the Dean Foods bankruptcy announcement. It’s one we at National Milk have followed closely, and it’s one that forcefully reminds us of the value of the cooperatives we serve, from their farmer-owners to the consumers who depend on them.

Cooperatives have played a crucial role in protecting their members’ economic interests for more than a century. As the industry deals with the uncertainty surrounding what the processing landscape will look like post-Dean Foods, hundreds of dairy farmers have no doubt been wondering what ultimately will happen to their milk as the bankruptcy sorts itself out.

Some cooperative members might be among those wondering — but their membership in a co-op can help provide more certain answers. Finding markets for milk is what cooperatives do, 365 days a year, regardless of disruptions that may develop. With the strength of the co-op backing them up, farmers know they have expertise and networks they can rely upon to help handle the unexpected. Even in temporary situations when milk deliveries exceed processing capacity, co-op members still have steady, predictable access to markets for their milk.

When processors struggle, co-ops help protect farmers and consumers. Cooperatives also allow farmers to become processors themselves, giving them more opportunity to profit from the production and sale of dairy products and react to changing consumer tastes. It’s no surprise, for example, that as the popularity of butter has risen, the number of cooperative-owned processing plants has risen by 8 percent since 2012, and that the cooperative-created volume of popular dairy products such as butter is rising.

This all comes down to the essence of what a cooperative is: a self-help organization in which farmers stick together in good times and bad – sharing in profits and navigating through difficulties.

Protection against supply-chain disruptions was one of the reasons cooperatives formed the National Milk Producers Federation in 1916. Public desire to see farmers succeed pushed adoption of the Capper-Volstead Act of 1922, which allowed farmers to gain greater influence in their own markets. That same collaborative spirit led NMPF in the 1930s to push for the Federal Milk Marketing Order system, which levels the playing field for farms of all sizes in all parts of the country, helping harmonize pay for producers regardless of the end use of their milk while stabilizing prices for consumers nationwide.

And it animates our efforts to the present day, through initiatives such as Cooperatives Working Together, which helps boost U.S. dairy exports, and NMPF’s own collaborations with organizations including Dairy Management Inc., the U.S. Dairy Export Council, the National Council of Farmer Cooperatives, the International Dairy Foods Association and numerous other dairy groups that span states, regions and the globe.

Cooperatives, to be sure, can’t completely insulate anyone from disruption. But dairy is resilient, and cooperatives are fundamental to that resilience. Despite changing consumer tastes and never-ending, inaccurate campaigns against them, per-capita U.S. consumption of dairy products last year was its highest since 1962. Exports are again rising despite trade turbulence, and with potential new leadership at the U.S. Food and Drug Administration, we’re even more hopeful that our decades-long battle against milk imitators who inappropriately claim our product names will be resolved in our favor.

Dean’s bankruptcy is creating uncertainty for some producers. But seen from another angle, it’s just another disruption this sector will be able to withstand, due in no small measure to the strength of cooperatives and their dairy farmer-owners. That’s worth remembering as disruption continues to challenge dairy.  We’ve always been a much stronger industry when farmers have worked together. That’s true today, and it will remain true in the months and years to come.

(Note: NMPF’s Dairy Defined explores today’s dairy farms and industry using high-quality data and podcast interviews to explain current dairy issues and dispel myths.)


The National Milk Producers Federation (NMPF), based in Arlington, VA, develops and carries out policies that advance dairy producers and the cooperatives they own. NMPF’s member cooperatives produce more than two-thirds of U.S. milk, making NMPF dairy’s voice on Capitol Hill and with government agencies. For more, visit

5 Facts about India’s Dairy Industry

File photo: Children enjoy cartons of milk during World Milk Day celebrations at Mangalajyothi Integrated School at Vamanjoor, Mangaluru, Karnataka

Indians love milk. Milk and its many derivatives are an integral part of our diets, ceremonies and festivals. Milk can also stir up the occasional political controversy, like when a West Bengal minister recently claimed cow’s milk contains traces of gold. He may as well have been speaking metaphorically, because India’s growing dairy industry, its leadership of global milk production (India has been the world’s top milk producer since 1998) and its growing consumption make it an equally precious resource. A large part of the credit for this goes to Dr Verghese Kurien, the Father of India’s ‘White Revolution’, and the man credited for revolutionising dairy farming and milk co-operatives in rural India. On November 26, 2019, Dr. Kurien’s 98th birth anniversary, India celebrates National Milk Day. To mark the occasion, let’s look at 5 facts about the Indian dairy industry.

India produced 22% of the total world milk output last year

In 2018, India produced 186 million tonnes of milk, which was 22% of that year’s global total milk production of 843 million tonnes, according to the UN’s Food and Agriculture Organization (FAO). Milk output grew 5% over 2017 levels in India, while it was just around 1% in the European Union and the US. The last five decades have seen the tide turning for India, which accounted for just 5% of the world’s milk production in 1970. This growth is expected to sustain in the coming years; the Niti Aayog says India will produce 300 million tonnes of milk by 2022.

The nationwide per-capita availability of milk also rose from 225 grammes per day in 2001-02, to 375 gm/day in 2017-18, although this varies widely by region. The increased consumption of milk and milk products, which are typically rich in protein, is also associated with better incomes and nutritional access in developing countries like ours.

India’s biggest milk-producing states, according to 2017-18 data from the National Dairy Development Board, are Uttar Pradesh, Rajasthan, Madhya Pradesh, Andhra Pradesh and Gujarat.

Dairy is a source of livelihood for millions

The dairy industry is both an economic engine and a source of livelihood. Earlier this year, India’s Union Agriculture Minister said that about 80 million rural households are engaged in milk production, with a high proportion comprising landless, small and marginal farmers. The Minister, Giriraj Singh, also added that the country’s milk production has grown by 6.4% annually in the last 4 years, well above the global growth rate of 1.7%. Dairy exports are also seen as a huge untapped opportunity for India, which currently accounts for only 0.01% of the world dairy export market.



File photo: Buffaloes at a cow shed in Jogeshwari, Mumbai

(Credits: Hemant Shirodkar/BCCL Mumbai)

India’s focus on milk production is reflected in its livestock profile

According to the National Dairy Development Board, India has 40 indigenous cattle breeds like the Gir, Sahiwal and Red Sindhi, as well as 13 local breeds of buffalo.

In recent years, government efforts to boost milk production have become visible in the population profile of these animals. According to the 2019 national livestock census, the cattle and buffalo population has been calculated at over 300 million. This number has not changed significantly since the last census in 2012. However, according to the new report, there is a jump in the number of female animals (cows and buffaloes) accompanied by an even more significant decline in the number of the respective male populations. The number of exotic and cross-bred species (which provide more milk) has also increased. These numbers are most likely changing as a result of the government’s and farmers’ focus on maximising milk production.

Climate extremes, fodder availability remain concerns for the industry

Officials claim that the average annual milk production per cow has increased 35% in the last 10 years, to 1700 kg in 2018-19, and there are efforts to improve this even further. However, the Niti Aayog, in a report last year, warned that drought and floods could hit the productivity of milch animals by affecting the availability of fodder and water. Encroachment of pastoral land by agriculture crops also shrinks the available grazing options.

“The overall productivity of Dairy sector is low because of inadequate nutrition from green fodder, along with dry residue and protein concentrate,” the Aayog said, adding that 500 million animals in India were currently deprived of feed and fodder security.



File photo: A rickshaw-puller drinking a glass of butter milk on a warm afternoon

(Credits: Suman Reddy D/BCCL Vijayawada)

Adulteration is not a major problem, says India’s food regulator

The Food Safety and Standards Authority of India (FSSAI), in 2018, conducted the first-ever comprehensive survey to test the quality and safety of milk, amid nationwide concerns of milk products getting mixed with harmful chemicals. The ‘National Milk Safety and Quality Survey 2018’ found that nearly 93% of the tested milk samples were safe for human consumption.

Out of the total 6,432 milk samples tested, about 456 failed the examination; and of these 456, only 12 samples were found to be deliberately adulterated through the use of adulterants such as hydrogen peroxide, detergent or urea. Some 7% samples, especially ones of processed milk, had safety issues due to contaminants like Aflatoxin-M1 (a result of poor storage practices of animal feed and fodder), antibiotics and pesticides.

FSSAI chief executive Pawan Agarwal stressed that contamination was a far bigger issue as compared to dilution of milk. He further stated that to address this issue, a scheme for testing and sampling for organised dairy would be implemented from January 1, 2020. All in all, contrary to popular perception, a majority of the milk samples were found safe for consumption in FSSAI’s survey.


Scottish dairy sector ‘on a knife edge’

Scotland’s dairy sector is on a ‘knife-edge’, according to a survey of industry confidence released at the AgriScot industry event.

Scottish Dairy Hub, dairy market analyst Chris Walkland and the Kite Consultancy revealed the results of the survey at the Ingliston event.

With more than 125 responses, the survey provided an excellent snapshot of the state of the sector in Scotland – and more than 60% of dairy farmers who responded said they are ‘not so confident’ or ‘not at all confident’ about the direction of travel for the Scottish dairy industry. Just over 15% said that they were ‘extremely confident’ or ‘very confident’.

However, there were some mixed messages. Around 30% of respondents said they have ‘no confidence’ to invest in the short term but the same proportion say they are ‘very confident’ or ‘confident to invest’, with a further 40% falling somewhere in between.

That led the survey’s authors to state that confidence levels can easily swing one way or another, depending on what happens with regards to future agricultural policy and the milk price – and note that both Government, and milk buyers therefore have a role to play in those confidence levels. When compared to 2016, when milk prices crashed, a third of respondents said that their businesses were stronger, but two thirds believed their businesses were unchanged.

Looking to the future, a third of farmers are now intent on expansion, mostly by up to 10%, but two thirds of farmers will keep output the same. Only 7% were looking to cut production volumes. Based on those results, it looks as if milk volumes in Scotland will continue to grow.

There was also reasonable optimism among farmers for life post-Brexit. Some 60% stated that their businesses will be about the same or better off after Brexit.

Summarising the survey results, Kite Consulting’s senior advisor in Scotland, David Keiley, said: “Scotland has a very polarised milk field, with some farmers getting very good milk prices but most aren’t.

“A lot of businesses have been cash negative for a while, and that is putting a lot of pressure on them. Many are on a knife edge currently having to deal with increasing overdrafts, higher levels of debts per cow and creditor burdens,” noted Mr Keiley.

“Whilst we have very efficient businesses in Scotland, the survey results reflect the position of the Scottish dairy industry and the need, going forward, to determine a clear strategy for the future in light of the present challenges facing dairy farmers.”

NFU Scotland’s milk policy manager Stuart Martin, who also runs the Scottish Dairy Hub, said: “The survey and its results are significant and have implications for the whole supply chain in Scotland and the many stakeholders that engage with Scottish dairy farmers.”


Dairy Out of India-US Trade Talks for Now

India and the US have identified almost 40 products like pistachios, walnuts and apples that can be considered for duty concessions. The two sides are also trying to zero in on workable concessions for medical devices.

The issues were discussed at an official-level meeting between trade negotiators of the two countries last week even as there were no talks on dairy imports. “Discussions are mostly around agricultural goods,” a source said.

Washington is also said to have asked New Delhi to reduce the import duty on pulses. The US, along with Canada and Australia, had moved the World Trade Organization (WTO) against India’s ban on import of certain pulses to check falling prices in the domestic market. India, however, doesn’t have any issues with increased import of pistachios from the US, sources said.

“There is slow progress on the talks,” said one of them. The progress comes after commerce and industry minister Piyush Goyal met US Trade Representative (USTR) Robert Lighthizer and American medical devices industry representatives in the US a fortnight ago. Lighthizer is likely to visit India soon.

Price controls on medical devices and dairy imports are the other key issues that the two sides have been trying to resolve.


Goyal has said that protecting the farming community and religious sensitivities while importing products having animal feed in their food chain are the red lines in India’s trade negotiations with the US. Dairy was one of the sectors that had vehemently opposed the Regional Comprehensive Economic Partnership (RCEP) trade agreement that India decided not to join after seven years of negotiations.

Experts called the progress in the India-US talks a steppingstone towards a trade package.

“This is a good progress because both sides have sensitive issues. The way the two sides are progressing, a trade package could be finalised in a month or two,” said an expert on trade issues.


Would you pay more for milk to keep farmers in business?

The dairy industry is rallying the major supermarkets to increase the price of their own branded milk.

New South Wales Farmers is calling for milk to be priced at $1.50 per litre, to ensure the sustainability of the sector.

The past 12 months has seen 51 dairy farmers leave the industry in the state.

Dairy Committee Chairman Colin Thompson told Macquarie’s Rural Reporter Eddie Summerfield, while prices rises this year have been welcomed, more is needed.

“The price didn’t change for 8 years, it was at a heavily discounted price, and then we’ve had things like floods, and unprecedented drought,” Mr Thompson said.

“This is putting incredible pressure on farmers to remain viable, and it’s why we’re seeing a mass exodus of farmers from the industry.”

In the past 12 months, 51 farmers have left the industry in New South Wales leading to a 7 percent drop in productivity.

Colin Thompson says consumers have benefited from discounted prices for too long.

“They’re probably going to pay a little more for their dairy products, they’ve been purchasing milk at prices that the industry cannot afford to give any longer.”

Coles, Woolworths, and Aldi were given the opportunity for interview.

Woolworths and Aldi provided written statements — Coles failed to respond to inquiries.

Source: 2gb

USDA October Milk Report

Wisconsin milk production was slightly higher during the month of October when compared to the same time last year.

According to the USDA’s monthly milk production report, state output totaled 2.56 billion pounds during the month, up 1.0 percent from October 2018, and higher than September’s 2.52 billion pounds, which had less days on the calendar. It was the second month in a row that prices increased from year-ago levels after falling four consecutive months since June. Nationally, 17.3 billion pounds of milk was produced in the 24 major dairy states for the month. That was a 1.7 percent increase over 2018, and more than the previous month’s 16.8 billion.

Meanwhile, the number of milk cows on farms in the 24 major states was 8.81 million head, 1,000 head less than October 2018, but 5,000 head more than September 2019. The average number of milk cows on Wisconsin farms for the month was 1.27 million head, which was unchanged from last month, but 6,000 fewer than last year. Monthly production per cow averaged 2,025 pounds, which was 30 pounds more than last year’s figures.

Source CWBRadio

The Monopolization of Milk

Earlier this year, both The New York Times and National Public Radio reported that Chinese retaliatory tariffs in Trump’s trade war were accelerating the loss of U.S. dairy farms. In the first half of 2019, dairy exports to China were down 54 percent from the previous year, at a time when dairy farmers rely on exports to market a surplus of milk that’s driven milk prices below most farmers’ break-even point for nearly four years.

Meanwhile, Trump’s Secretary of Agriculture has told dairy farmers that the only way to stay afloat in these tough times is to get big, or get out, while promising new markets for U.S. dairy products in the yet-to-be-ratified U.S.-Mexico-Canada agreement.

These declarations reflect a powerful conventional wisdom about the plight of America’s farmers, namely, that agricultural consolidation is inevitable, and that American farmers must export their way to profitability. But that conventional wisdom, which is shared even by some leading voices in the Democratic Party, is seriously out of focus. Although trariffs and technology play a role, they are hardly the main factors in the dairy crisis.

One critical reason dairy farms feel pressure to consolidate is because milk retailers, buyers, and, processors have spent years consolidating around them—and neither the Trump nor previous administrations have done much to stop it. Now, a merger between major milk monopolists threatens to deal another blow to ailing dairy farmers, and its not clear if federal enforcers will do anything to stop it.

Last week, America’s largest dairy processor, Dean Foods, filed for Chapter 11 bankruptcy and announced that it was in advanced talks to sell to America’s largest cooperative, Dairy Farmers of America (DFA). These two goliaths are a case study in how unchecked mergers beget abusive monopolies that harm both farmers and consumers. But because Dean has filed for bankruptcy, this otherwise questionable union could avoid antitrust scrutiny under the failing firm defense, which allows for mergers when one firm would otherwise go out of business. In other words, two monopolists may soon join forces to create an even bigger monopoly.

DFA is the amalgamate of a three-way cooperative merger in late 1997 and Dean Foods rose to prominence by buying up regional milk brands since the 1980s. Today, DFA has a near monopoly in many regional markets, and controlsroughly 30 percent of all raw milk in the U.S., handling more than two and a half times as much milk as the next largest co-op. At the same time, Dean sells 12 percent of all fluid milk and claimed to be five times larger than its next competitor in 2013.

As detailed by Leah Douglas in the Washington Monthly last year, these giants have been accused of colluding against the interest of dairy farmers and consumers for years. Two groups of farmers have settled multi-million-dollar antitrust claims with DFA, and another has spun-off a case to seek more damages in court. On the consumer end, Dean Foods reached an antitrust settlement with grocery chain Food Lion in 2017 over allegations that the firm avoided competing with DFA-owned National Dairy Holdings to raise retail milk prices.

A Dean Foods-DFA merger would make this otherwise illegal collusion perfectly legal, since our antitrust laws permit collusion once it occurs within a single corporation. “The more DFA expands downstream into fluid milk processing the greater the leverage it’s going to have in a variety of ways,” Peter Carstensen, a Professor Emeritus at the University of Wisconsin Law School and former Department of Justice antitrust attorney, told me. So-called “‘tacit’coordination becomes much more possible because … that will be an internal corporate [decision].”

The merger means that dairy farmers have even fewer processors competing to buy their milk. As a producer, I’m concerned about DFA making this large a purchase,” said Charles Untz, a farmer and former DFA board member. “It puts a lot of the control of the fluid market in the hands of one co-op. That sends a little fear as far as the milk price goes, because they can literally dictate what they pay for milk.”

What’s more, the deal would exacerbate DFA’s conflict of interest between its processing operations and its members, since processing operations reap higher profits the less they pay farmers for milk. Proponents argue that investing in processing ultimately helps DFA farmers by guaranteeing markets and eliminating the middleman, but Carstensen argues that a fair share of processing profits “never seems to make it to the farmers.”

To make matters worse, DFA takes further cuts from farmers’ milk checks to pay for its processing business under the justification that these investments help farmers in the long-run. A recent report by the Government Accountability Office found that these investment withholdings lower farmers short-term earnings.

As a former DFA board member, Untz stands behind some of the group’s processing investments, but worries that this deal with Dean could put farmers at financial risk given its substantial size. “It’s easy to buy something when it’s going broke, it’s [harder] when you got to pay for it,” he said. “It would have to be paid for by the farmers and that’s a pretty scary situation after making a lot of other purchases.”

If DFA operated the way co-ops are supposed to, its farmer owners would be able to decide if a major deal like acquiring Dean Foods was worth the risk. But because of its vast size and entrenched management, farmers have little control—an issue highlighted in the GAO’s recent report. Ironically, a third of Dean’s bondhodlers who have hired an attorney to advocate for alternative bankruptcy solutions may have a better chance at blocking the sale.

Should a Dean and DFA deal go forward, the fate of farmers will ultimately be left to the Justice Department, which may or may not embrace the faulty logic of the failing firm defense.

Carstensen, for his part, argues that there are other ways to restructure Dean’s business without selling wholesale to DFA. “My preference would be to break Dean up, seperate out more facilities, and sell to separate operators,” he told me. In fact, Carstensen sees Dean’s relentless efforts to expand as part of the reason for its bankruptcy, calling into question the very notion that bigger is better.

Because, it turns out, the consolidation of American agriculture is not a universally efficient or inevitable result of market forces. It is the product of policies that permit and reward monopoly power, regardless of the risks to producers, consumers, and even, ironically, to monopolists themselves.


Dean Bondholders Just Say No to Merger With Dairy Co-op

Dean Foods Co., the biggest U.S. milk processor which filed for Chapter 11 bankruptcy protection Tuesday, has said it’s in advanced talks to sell assets to milk cooperative giant Dairy Farmers of America. Bondholders, however, aren’t convinced that’s a good deal.

At a first-day bankruptcy hearing, an attorney for a third of the company’s bondholders said that while Dean is “focusing exclusively” on a combination with the co-op, that option won’t be “value-maximizing.” The deal may not even be feasible due to antitrust concerns, the attorney said in front of Judge David Jones in U.S. bankruptcy court for the Southern District of Texas in Houston.

Both companies are giants in the dairy industry. DFA provides about 60% of Dean Foods’ milk, and Dean in turn accounts for about 20% of DFA’s sales.

“We don’t want a quick sale, a fire sale, without a true market check or opportunity for other potential bidders to put in a real proposal,” said Bob Britton, an attorney at Paul, Weiss, Rifkind, Wharton & Garrison LLP, which represents the group.

The bondholder group approached Dean to offer alternatives, including capital to invest in a standalone restructuring plan and alternative financing. But the proposal “made no headway,” Britton said.

When asked by the judge if the group had enough capital to buy Dean Foods, Britton’s answer was yes.

Brian Resnick, an outside lawyer for Dean Foods, said the company’s looking forward to working with bondholders.

‘Not Bothered’

“I’m just going to sit back and watch,” Judge Jones said, responding to the company’s expressed willingness to engage with the bondholder group given their complaints about the sale. “I’m not bothered at all.”

At the first day hearing’s conclusion, Dean Foods won approval to access $475 million of the $850 million in debtor-in-possession financing, allowing it to pay employee wages and benefits, and pay suppliers and vendors in full under normal terms provided on or after Nov. 12.

Dean ranks as the biggest U.S. dairy processor, employing about 15,000 people and delivering about 2.2 billion gallons a year of milk and other dairy products, according to its bankruptcy declaration. The company’s long list of institutional customers includes McDonald’s Corp., Starbucks Corp. and Target Corp.

Dean has suffered as competition from almond, rice and soy milk eroded demand for conventional dairy. Retailers have also been using milk as a loss leader to bring customers in, putting pressure on the dairy giant’s margins. Losses deepened after the company’s biggest customer, Walmart Inc., built its own milk plant. The company’s bonds due 2023 slumped below 20 cents on the dollar Wednesday.

Facing financial distress, Dean looked into selling all or parts of the company among other options to strengthen its balance sheet, according to the court filing. But the company faced an obstacle in its underfunded multi-employer pension plan, for which it might wind up owing more than $700 million. That stymied any hope of out-of-court transactions, and meanwhile results were deteriorating faster than Dean had forecast, the company said.

With cash running short, Dean’s managers became concerned about “potentially ruinous customer flight” if the company couldn’t keep milk flowing to 30,000 school lunch rooms, thousands of coffee shops, fast-food restaurants and grocery stores. That sealed the decision to file for Chapter 11 protection, Dean said.

The case is Southern Foods Group LLC, 19-36313, U.S. Bankruptcy Court for the Southern District of Texas (Houston).


China Dairy Giant Buying Kirin Assets for $419 Million

China is planning a record sale of sovereign bonds in dollars, with a potential $6 billion offering, according to people familiar with the discussions.

The Ministry of Finance is considering tenors of three years, five years, 10 years and 20 years, according to the people, who asked not to be named as the talks aren’t public. The ministry didn’t immediately respond to a request for comment.

This marks the third straight year for China to issue dollar debt, and underscores the nation’s continued interest in building out an offshore market where its companies and local authorities can tap funding. The 20-year note will fill a gap between 10-year and 30-year securities issued in 2018.

“It reaffirms China’s determination to develop an orderly offshore dollar bond market for Chinese issuers,” Anne Zhang, head of fixed income for JPMorgan Private Bank in Asia, said of the offering. “The new deal will further complete a sovereign curve,” she said.

China’s sale is planned for as soon as Tuesday, the people familiar with the discussions said. It follows the country’s first euro bond in 15 years — which saw blowout demand among investors eager to snap up securities with positive coupons amid a swathe of negative-yielding debt.

A $6 billion dollar issue would be double the size of last year’s, and triple the amount sold in 2017, when China resumed issuing sovereign dollar debt for the first time since 2004.

The Chinese dollar bond market now exceeds $740 billion, according to data compiled by Bloomberg, and is both a key source of funding for domestic borrowers and an outlet for investing Chinese foreign-currency deposits.

Issuance dipped in 2018 after a record 2017, hurt in part by depreciation of the yuan as the U.S.-China trade war erupted. But sales have rebounded this year as U.S. Treasury yields came down. The yuan has also stabilized in recent weeks, following the resumption of Sino-American trade negotiations.

Chinese borrowers have issued $195 billion of dollar bonds so far this year, a record pace, according to data compiled by Bloomberg. The all-time high for a full year was $211 billion in 2017.

Builder Binge

Investment-grade securities account for about 53% of Chinese dollar bonds, with high-yield notes at 38%. Property developers have racked up record issuance of $78.5 billion this year.

While China has the world’s second-largest bond market, in some ways it remains relatively underdeveloped, according to Becky Liu, head of China macro strategy at Standard Chartered Plc in Hong Kong. The country is still building out a domestic institutional investor base such as the pension funds and insurers that are a major feature overseas. Banks are the main holders of bonds onshore.

“There is a good number of companies that do not have a funding channel at home,” Liu said. That’s why even domestic-focused enterprises can tap the dollar-debt market, she said.

The record China sale isn’t huge relative to some other sovereign issues. Italy sold $7 billion of dollar bonds last month. Argentina sold $9 billion in January 2018.

China holds the fifth-highest investment grade rating at Moody’s Investors Service, S&P Global Ratings and Fitch Ratings. That’s below South Korea, though on par with Japan, Moody’s and S&P scales show. China’s planned bond issue will be unrated.


Why Australian dairy industry needs a milk floor price and decent code of conduct

It’s been 20 years since John Howard’s Coalition Government, deregulated Australia’s dairy industry.

Howard did not act precipitously. Rather, he took the next steps in a long period of necessary reform beginning with Labor Primary Industries Minister, John Kerin.

Many dairy farmers immediately left the industry, taking advantage of exit packages funded by a temporary 11 cents a litre levy placed on consumers.

The processing sector re-shaped itself as the big players moved in and slowly squeezed out the dairy co-operatives Australians had grown so fond of.

Deregulation was economically rational and there were winners – most of them big players with an eye to export markets

The big supermarkets saw opportunity too, using fresh milk as a loss-leader in a strategy to build market share at the expense of the corner store.

It was a strategy that by 2011 gave birth to “dollar milk” so despised by dairy farmers.

Deregulation was economically rational and there were winners – most of them big players with an eye to export markets where they sought to grow profits by marketing higher-value dairy products like cheese, milk power and infant formula.

But by any measure, our dairy farmers have been the losers.

Long caught in a cost-price squeeze, dairy farmers are leaving in droves as the drought adds to their woes.


Their production costs continue to rise while the price of fresh milk and cheese remain stubbornly low.

Yet many dairy industry leaders are resisting change.

None has been more vocal than SA Dairy Farmers president, John Hunt, who argues supporting our farmers will hurt our export industry.

To Mr Hunt I say: if we need to pay our farmers below their cost of production to be competitive in international markets then maybe they are markets we should not be in.

Pauline Hanson’s plan

In federal parliament two weeks ago Labor teamed with Pauline Hanson’s One Nation and others in a second attempt to save our dairy farming families by supporting a Bill which largely mirrored a policy Labor took to the 2019 election; a proposal to introduce a minimum farm gate milk price.

The concept is a simple one.

An independent regulator would regularly assess the cost of producing milk within each dairy region.

It would then set a minimum farm gate price just above that cost.

A mandatory code of conduct would protect farmers from the power of the big processors while still allowing farmers to negotiate the best price for their milk – though no less than the price set by the regulator.

The processor would either absorb the additional cost in their bottom line, or pass it through to their mainly big retail customers who in turn, would take the hit on their own bottom line or pass it through to customers.

Intense competition in the retail sector would likely still deliver supermarket customers milk at a good price.

Senator Hanson’s Bill failed in the Senate 30 votes to 31.

Liberal and Nationals senators voted together to defeat the proposal.

Dairy code imbalance

So, too, did the SA- based Independent and Centre Alliance Senators, no doubt influenced by local industry leader John Hunt.

Sadly, last week we learned the government is working hard to water-down its own draft code. – Joel Fitzgibbon

The vote took place the same day it was becoming clear that the Morrison-McCormack Government was not even capable of implementing a code of conduct to manage the power imbalance between our farmers and the processors who purchase their milk.

Finally dragged screaming to support a code, it’s been 20 months since the implementation process began.

Sadly, last week we learned the government is working hard to water-down its own draft code.

The more enlightened farm leaders advise that the amended draft code would be worse for farmers than not having a code at all.

Levelling the playing field

The dairy code is supposed to level the playing field for dairy farmers by – among other things – stopping claw-back provisions in contracts which retrospectively cut payments to farmers.

When asked four times on ABC radio this week to explain the dilution, Agriculture Minister, Bridget McKenzie, declined to do so four times.

It is not overreach to suggest that without change, we could lose our dairy industry and find ourselves importing our drinking milk.

Already we import around half of the dairy products we consume.

Yet Scott Morrison refuses to act and National MPs are either unwilling, or unable, to stand up for our farmers and to him.

Black Jack McEwen will be rolling in his grave!


Canadian dairy compensation payments starting to roll

Agriculture Minister Marie-Claude Bibeau announced recently that Canadian dairy producers will start to receive the promised compensation of $1.75 billion over eight years as a result of commitments made under CPTPP and CETA.

As of late last week, letters are being sent to all eligible Canadian dairy producers to outline the process to access compensation through the Dairy Direct Payment Program, which is administered by the Canadian Dairy Commission.

In the first year, $345 million will be made available in direct compensation, and will be distributed based on individual quota holdings as of August 31, 2019. For an average farm of 80 cows, this translates into approximately $28,000.

Producers will be able to choose if they would like to receive their compensation amount before the end of December, 2019, or in the new year before March 31 2020.


China Mengniu Dairy to buy a second Australian dairy firm for $407 million from Kirin

China Mengniu Dairy Co Ltd (2319.HK) plans to buy the owner of some of Australia’s best known milk brands from Japan’s Kirin Holdings Co Ltd (2503.T) for A$600 million ($407 million), its second Down Under dairy buyout in two months.

FILE PHOTO: Boxes of Mengniu’s milk products are seen at a supermarket in Beijing June 19, 2013. REUTERS/Kim Kyung-Hoon

The sale of Lion Dairy & Drinks Pty Ltd would advance Kirin’s strategy of offloading underperforming assets outside Japan while giving the Chinese government part-owned company control of Australian household brands like Pura, Dairy Farmers and Moove flavored milk.

China Mengniu received Australian government approval to buy infant formula maker Bellamy’s Ltd (BAL.AX) for A$1.43 billion just 10 days earlier.

“Its access to the significant volume of highly-regarded Australian milk pool, its large scale of 13 manufacturing facilities across Australia and the extensive cold chain distribution network … make (Lion Dairy) a strong comprehensive vertically integrated dairy player,” China Mengniu said in a statement.

Owning both Australian companies would give China Mengniu “a stronger foundation to excel in the Asia Pacific markets,” the Chinese company added.

The deal comes in a strained period for Australia’s relationship with its biggest trading partner just four years into a free trade agreement. The Australian government has sought to curb suspected political influence from Beijing, while China has accused Australia of acting like a “condescending master” with respect to the region.

That has resulted in some China-to-Australia buyout attempts being blocked on grounds of national security, including attempted purchases of energy and infrastructure assets.

Chinese companies have meanwhile sought to buy Australian health and dairy companies to offset local supply shortages and benefit from demand for foreign produce amid lingering concerns about a contamination scare a decade ago.

Australian Treasurer Josh Frydenberg, who oversees the country’s Foreign Investment Review Board, said the government did not comment on specific foreign investment matters.

Tokyo-listed Kirin, which picked up Lion Dairy in 2009 as part of a broader takeover of Australian alcoholic drink maker Lion Nathan, has been looking to unload underperforming overseas assets and expand instead in health and cosmetics.

In 2017 it sold its money-losing Brazilian beer business, bought for $3.9 billion in 2011, to Heineken NV (HEIN.AS) for $1.09 billion.

Kirin took an impairment loss of around 57.1 billion yen ($511.56 million) from Lion in April and had been considering a sale as part of a review of its business portfolio, which spans alcoholic and non-alcoholic beverages, food and drugs at home and overseas.

The Japanese company said it would focus on growing its Australian alcohol business following the dairy sale “by strengthening the allocation of resources to high margin categories in alcohol beverages and premium non-alcohol beverages.”

The company would also target a new global growth market of craft beer.


Milk production is rising even as small dairy farms shut down

New USDA data shows that the rate of small dairies that are closing is accelerating — but so is production of milk. That’s one effect of the growth of large dairies like this one operated by Riverview LLP near Murdock, Minn.

Dairy farmers are quitting en masse, but milk production keeps growing in another sign of the terrific forces at work against small dairies in the Upper Midwest.

A report this week from the U.S. Department of Agriculture showed that October milk production in the state grew by 15 million pounds, or nearly 2%, compared to the year before, even though the state lost 10% of its dairy farms last year.

Cows have been growing more productive since World War II, and the survivors in the dairy business today are generally more efficient than the ones who leave.

“Every new generation of cows is better than the ones we had the previous year. Why? Because of better genetics, because of better management,” said Marin Bozic, a dairy economist at the University of Minnesota. “The second factor is that as you have people exit the industry, typically those who exit are those who haven’t invested in their dairy recently, so those that remain will tend to have higher milk per cow than those that leave.”

Minnesota lost one in 10 of its dairy farms in 2018, and the roughly 2,500 that remain are in turmoil. More than 90% said in a recent Minnesota Milk survey that their industry is in crisis, and more than 40% said they either can’t get a loan from a bank or the terms are unreasonable.

The booming growth of dairy in western Minnesota, where Riverview Dairy is building farms that house as many as 9,000 cows, is feeding expansion of milk-processing capacity on that side of the state. Quebec-based Agropur has invested $250 million to triple the milk-production capacity of its cheese plant just across the border in Lake Norden, S.D., to about 9 million pounds per day. First District Association broke ground this fall on an expansion in Litchfield that will add 80,000 square feet to its processing plant there. Associated Milk Producers Inc. (AMPI) is expanding a plant in Paynesville, Minn., 35 miles west of St. Cloud.

“The I-29 corridor of Iowa, South Dakota and Minnesota has definitely seen the most cow growth, so it would make sense for future plants to follow cows wherever they may be,” said Lucas Sjostrom, executive director of Minnesota Milk, the state dairy trade group.

But southeast Minnesota just lost a processing plant. AMPI announced in early November that it is closing its Rochester cheese plant, which employs 75 people. The cooperative also closed its nonfat dry-milk plant in the northeast Iowa town of Arlington. Milk that had been processed at those two locations will be routed to an AMPI cheese plant in Blair, Wis.

The co-op cited a decline in dairy-farm numbers and milk production in the region as the reason for the closures.

Sjostrom insists small farms can be efficient and succeed. Prices are up by more than $4 per hundredweight in the past year for class III milk that’s used to make cheese. December futures for that milk are $18.72 per hundredweight. A Kemps ice cream plant in Rochester continues to accept milk. AMPI is expanding a plant in Sanborn, Iowa, 30 miles south of Worthington.

“Our farmers haven’t lost any choices,” Sjostrom said. “I think we’re in a decent phase of expansion in the Minnesota area that hasn’t happened in a while.”

But the long-term trend of greater efficiency in dairy is inescapable, Sjostrom said.

“We’ve significantly reduced the number of cows in Minnesota,” he said. “We are using somewhere around two-thirds less water and land than we were during World War II to make the same amount of milk.”


Wisconsin’s dairy industry would collapse without the work of Latino immigrants – many of them undocumented

The last time Roberto Tecpile left his home in the mountains of central Veracruz, his daughter Megan was just a few weeks old.

He hugged his wife, his parents and his children, then began the journey north to the USA, crossing through Laredo, Texas. It was the third time since Tecpile’s marriage to Veronica Montalvo that he left his country to work on a Wisconsin dairy farm.

The trip, more than 2,000 miles, is not uncommon among the families in and around Astacinga. The area has almost 7,000 people. Unemployment is in the double digits and virtually everyone – 96% – lives below the poverty level. Money sent from those working in the USA is one of the only ways to build solid new homes made of concrete.


Tecpile left five years ago and remains in Wisconsin. He works six days a week, about 10 hours a day at Rosenholm Dairy in Buffalo County.After work, he prepares dinner, takes a shower and, most evenings, calls home. Every two weeks, he heads to a grocery store in Arcadia and sends $300 to $500 to his family back in Mexico. 

Tecpile and Montalvo want to finish a home they are building in Astacinga – get the bathroom and kitchen done, install a tile floor, paint the walls. They hope to start their own business someday.

That means for now, Megan will know her father only through the nightly calls and by browsing photos on her mother’s cellphone.

“There’s no other option,” Tecpile says.

Reliable numbers on immigrants working in the dairy industry are hard to come by. A national survey taken five years ago for the National Milk Producers Federation estimated the immigrant workforce at 51% of the total.

Workers in Wisconsin express little doubt immigrants account for a larger portion of the dairy industry workforce today. They don’t work on just the biggest farms but also on operations that grew their herd beyond what a family can handle.

While unemployment is low, many farmers fill openings by passing word to Mexican laborers on-site, then accept the new workers who show up without asking too many questions.

Some farmers say they haven’t encountered a U.S.-born applicant in years.

Entry-level jobs may pay $11 to $13 an hour and can include free – albeit modest – housing. The immigrants may have to work nights, milk hundreds of cows every shift, toil in the wind and snow. The job can be dangerous; not everyone makes it back to their family.

Immigrants say the jobs are a ladder to a better life; farmers say the immigrants are the only means of affordable labor. So despite the rancor that surrounds national immigration policy, the workers keep coming and the farms keep hiring.

In dairy barns across Wisconsin, farmers and workers said there is a simple truth: Without the work of Latino immigrants – many, if not most, of them undocumented – the signature industry in America’s Dairyland would collapse.

Hiring immigrants caught on among Wisconsin dairy farms in the late 1990s and early 2000s, according to University of Wisconsin research.

Beginning in 2004, the state increased its annual milk production every year, and beginning in 2009, it annually set records – streaks that continue to this day. In 2012, then-Gov. Scott Walker initiated an incentive program urging farmers to produce even more, in the belief that foreign markets could absorb the increase. This fall, U.S. Agriculture Secretary Sonny Perdue essentially told family dairy farmers in Wisconsin: Get big or get out.

All of that increased production required new workers.

John Rosenow says half of his Buffalo County farm’s 18 employees – including Tecpile – are from Mexico. He started hiring them in 1998 when he was having trouble finding local workers.

He recalls hiring a retired state trooper. Within days, the trooper walked up his driveway and said he was leaving because he couldn’t keep pace with the milking operation. The dairy farmer kept him on but moved him to a new job.

Rosenow made his first immigrant hire after seeing an ad from a Dallas recruiting company. It sent him a worker named Manuel, who knocked out 10 hours a day for 54 days straight. When Manuel left, Rosenow hired two more Mexican workers. Over time, other farmers asked him for help hiring immigrants.

In the past 10 to 15 years, he has probably had about 150 job candidates. Only two were American-born, and neither was willing to do what was necessary, he says. One didn’t want to work on Fridays or weekends.

Omar Guerrero says his experiences are similar. During his time at Elkhart Lake’s Drake Dairy, the farm has received two job applications from American-born candidates. One lasted through an hour of training. The other didn’t really want the job; he just needed to claim he was searching for work to avoid losing food stamps.

When Guerrero arrived in Wisconsin 22 years ago, he didn’t have any difficulties finding a dairy farm job. There were barely any Latinos then. Farmers would even pay bonuses – say, $500 – to workers who could recruit newcomers.

Guerrero, now a citizen and settled with his family in the USA, started out as an undocumented immigrant, working as a milker, one of the toughest jobs on a dairy farm. At Drake Dairy, he learned more about the operation, took on new responsibilities and moved into management. Now he has a stake in the farm.

He is proud to have helped push the farm from 400 cows to 2,500. He says many of the workers are undocumented and only the ones who work outside with tractors are American-born. Across Wisconsin, he guesses, more than 90% of the immigrants in the dairy industry are undocumented.

Guerrero says he does not have difficulty finding workers; he’s built up a network of connections.

Some farms struggle to fill holes. They could compete for workers better if they raised wages, and some have gone to $14 and $15 an hour, Guerrero says. But for farms barely breaking even or losing money, increasing the payroll is prohibitive.

Hans Breitenmoser started to hire immigrant workers at his Merrill dairy farm 15 to 20 years ago. The farm had expanded beyond the point where his family could do the work by itself and the homegrown labor pool wasn’t there. The farm has 450 cows. Nine of the 12 hired workers are Latinos.

Breitenmoser says most dairy farmers are used to the idea of workers not being born in the USA. His parents, after all, came from Switzerland.

Starting pay on his farm is $12 and $13 an hour – a higher rate, he says, than what his farm really can afford. He acknowledges there’s little vetting; hiring the first person through the door is better than being selective and ending up with no person at all.

“I’ll hire them, and I’ll cross my fingers that they turn out to be a good employee,” he says.

The dairy farm that hired Blanca Hernández and her sister Guadalupe in 2006 had never hired anyone, much less Mexican workers. Hernández was told the owners didn’t trust foreigners, but they were unable to keep doing all the work by themselves. A nearby farmer vouched for immigrant workers. Hernández and her sister became the first employees.

By the time she took the job, Hernández had earned a law degree in Mexico and had worked once before in the USA. The law degree didn’t lead to a job, and the work – low-wage jobs for a cleaning company, airplane parts factory and car wash in North Carolina – didn’t allow her to save.

She left her hometown of Texhuacán and headed back across because her sister Guadalupe was going with her 4-year-old daughter. Crossing the border with a child is particularly dangerous; Hernández wanted to help. Once across, they made their way to Wisconsin, where Guadalupe’s partner worked.

Hernández says the Durand farm owners who gave them jobs were surprised to see the sisters writing down the correct number of hours for their pay – at the time, $6.25 per hour.

During their first days at the farm, the sisters cleaned the parlor in addition to milking 320 cows. The milk quality went up because the sisters were vigilant about cleanliness and sanitation.

“If I’m going to be a street sweeper, I’m going to be a good street sweeper,” Hernández says. “If I’m going to be a teacher, I’m going to be a good teacher.”

When the farm grew to 500 cowsor more, Hernández said, she was working 14 hours a day with no days off.

The sisters told the farm owner they were returning to Texhuacán. By then, the owners had undergone a change of heart.

“After four years, the boss wept,” Hernández says.

Immigrants take on risky, difficult jobs

Dairy jobs are inherently risky.

At 6.1 injuries per 100full-time employees in 2018, dairy workers at farms with more than 10 employees suffered higher odds of getting injured than workers in sawmills, according to the U.S. Bureau of Labor Statistics. Nationwide, that meant 6,500 injuries on those larger farms.

From 2012 through 2017, the U.S. Occupational Safety and Health Administration increased inspections of dairy farms with more than 10 employees or a temporary labor camp. At least 51 Wisconsin dairy farms were found in violation of some safety regulations during this period, according to the OSHA data.

Mexican immigrants often work the most wearing jobs. A University of Wisconsin study in 2009 found that immigrants tended to be relegated to routine, lower-paid tasks such as milkers or pushers, who clean manure in the barns and bring the cows to the milking parlors. When the study was done, 62% of the immigrants in the dairy workforce held one of those two jobs; 16% of the American-born workers held them.

Dairy workers averaged 57 hours of work a week and fewer than five days off each month.

In New York state, according to a survey in 2014-15 of 88 immigrant dairy farmworkers – the majority working on farms with more than 500 cows – about half of the workers said they felt rushed on the job, and breaks could be as short as five minutes in a 12-hour workday.

The survey, conducted by the Workers’ Center of Central New York and the Worker Justice Center of New York, found that more than one-fourth of the workers had suffered wage theft and two-thirds had experienced one or more injuries on the job, most of those disclosing they suffered an injury so severe it required medical attention.

John Peck, executive director of the Madison-based advocacy group Family Farm Defenders, says he would like Wisconsin to be a leader in socially responsible milk production, which would take into account paying workers better wages and paying farmers better prices, instead of measuring only the quality of the product.

“Farmers are always struggling to find workers, especially if they are not paying people well,” he says. “But at the same time, there are farmers going bankrupt. So how can they afford to pay workers, if they are losing their farms?”

Peck says consumers may fail to connect inexpensive milk at the store with inadequate pay for farmers, and with low-wage immigrant labor.

“If you want a cheap food policy, that means that you’ll be exploiting workers,” he says. “And the workers that are going to be exploited are going to probably be undocumented immigrants.”

Long, grueling hours

Salvador Salas worked on several farms in Wisconsin and Minnesota. He has good memories of one owner who made breakfast for workers and a farm that offered $12 an hour and paid overtime, as required in Minnesota.

There also was a Wisconsin farm where he worked 11- and 12-hour split workdays without a single day off, even for Thanksgiving or Christmas, for four years. He says the farm owner rarely paid him for more than 10 hours a day, no matter how long he worked cleaning barns, herding cows, feeding calves, pushing feed, milking. He started at $7.25 an hour plus free housing. His wages topped out at $11an hour.

“When one needs to work, there’s no (such thing as) hard work,” says Salas, who was undocumented his entire time here.

The toughest times for Salas were the winters when it was freezing outside and he had to move tires off tarps covering mounds of feed.

“That’s when it feels uglier,” he says. “When the wind is blowing and you are on top.”

He hurt his back working on the farm, he says, and told his boss about the accident – but never asked to see a doctor. He feared the farmer might think he was lying and wouldn’t help him.

Salas returned to Mexico early this year after more than six years on U.S. dairy farms. He was worn out and wanted to see his family.

He lives in Astacinga in a home he built by adding on to his father’s home, using savings from the dairy work. A chiropractor helped alleviate his back pain.

Couple’s plans cut short

Antonia Rodríguez worked in dairy longer than Salas. Her partner, Gerardo Nájera, says she used to take on 12-hour shifts before he was deported in 2012, and she had to cut back to care for their two U.S.-born children.

Her sister, Consuelo, says she would tell Antonia that working at a dairy farm was too hard, a man’s job. But her sister had never been scared of work. At 53, undocumented and living with her two younger children in a trailer that needed repairs, Antonia kept working at Clarks Mills Dairy Farm in Reedsville.

“As a mother, one has to work in whatever you can,” Consuelo says.

The last time the sisters talked on the phone, Antonia sounded weary. It was “one of those times when one becomes sad – you miss your family, your parents, your siblings,” Consuelo says.

Nájera says the plan was for their younger kids to finish school in the USA and for Rodríguez to return one day to Ciudad Juárez. He was building their home, and she was sending money to finish it. She would tell him that she wanted to go back so they could be together.

One afternoon last March, the cows were not lined up properly at the milking parlor. Rodríguez walked up from the pit where workers attach milking machines to udders and onto a concrete pad where the cows lingered. She didn’t have a stick or any physical barrier between her and the cows.

As she tried to move them, a cow knocked her against a half wall. Other employees heard her scream, came to her aid and moved the animal away. Rodríguez was unconscious, and as the ambulance arrived at the hospital, her heart stopped and she died.

The autopsy found rib fractures and lacerations in her heart and left lung.

OSHA fined the 800-cow farm, saying it didn’t ensure employees working with cows were protected from being struck and it didn’t train workers to improve safety.

For that, and another unrelated violation, the farm was fined $15,155.

Robert Goehring, co-owner of the farm, says Rodríguez had worked there since 2014, and he had personally trained her on how to move the animals. The OSHA representative said Goehring needed to train employees on animal behavior, which he says he hadn’t heard about.

Consuelo Rodríguez is taking care of her sister’s younger kids, 10 and 16, so they can finish high school in the USA. She set up a small altar at home for her sister, displaying her glasses, earrings and photos. She took it down because her nephew said it made him sad.

The children speak with their father regularly.

“They say they are fine,” he says. “But one knows they aren’t.”


Latino influence grows

The Rev. Matthew Sauer, pastor at the Manitowoc Cooperative Ministry, says that when he arrived in 2005, there were some Latino workers, but they weren’t very visible in the community. The Manitowoc School District had a 5% Hispanic enrollment.

Sauer noticed the immigrant population rising in 2010-11.

In the most recent school year, the school district had 14% Latino enrollment. In the city of Manitowoc, there are at least five Mexican restaurants, two with small attached grocery stores. In spring, a bull-riding rodeo attracted hundreds of Latinos, many of them from nearby dairy farms.

Manitowoc is among the 30 counties in the USA with the most dairy operations, according to the U.S. Department of Agriculture 2017 census.

Sauer says U.S.-born residents in the area have become more comfortable with the changing demographics. “Younger people are growing up with them, in their classes, which means that parents are meeting these cultures,” he says.

The story is similar in other rural Wisconsin communities. Though many Latino immigrants keep to themselves, their influence is unmistakable. Although many return to their hometowns, some settle in Wisconsin and start a family.

In Clark County, which ranks second in the USDA 2017 census, this month’s historical society newsletter noted a recent quinceañera celebration. In Marathon County, which ranks fourth in the census, the Hispanic Soccer League, founded in 2002, changed its name to the Central Wisconsin Adult Soccer League to be more inclusive, and U.S.-born players have joined immigrants on the pitch.

Trump election sparked worries

When Donald Trump won the presidential election after campaigning to crack down on illegal immigration, many Wisconsin dairy workers were nervous. Some left their jobs; some left the state or the country. Most kept working, and the threats never materialized.

Apolonio Sánchez says he planned to leave for Canada if Immigration and Customs Enforcement officials started to launch raids close by. His boss on a 120-cow farm in the Alma area told him not to worry, that wouldn’t happen. He stayed.

Sánchez says there are still undocumented immigrants arriving to work on the farms. There have been ICE arrests, but nothing approaching a massive crackdown.

Pablo Cruz works on a farm with more than 1,500 cows in Kewaunee County. He says most of the workers are undocumented – not only from Mexico but more recently from Honduras and El Salvador.

Breitenmoser, the farmer from Merrill, says the rhetoric against immigrants hasn’t been good for a dairy industry that relies on workers not born in the USA.

If all undocumented immigrants were to be deported, he says, “we would have dead cows piled up in our farms.”

He favors a process that would provide a path for undocumented immigrants to acquire legal status. “It’s disgusting that people are treating them like criminals for working their butts off,” he says.

Rosenow, the Buffalo County farmer, says everyone should understand the necessity of immigrants, but “I don’t see the solution happening very soon.”

A push for path to residency

The American Dairy Coalition and the National Milk Producers Federation have pushed to get dairy farms access to foreign agricultural guest workers through a visa program that is limited to seasonal work, such as crop harvesting. Dairy farms can’t hire these guest workers for year-round work.

The American Dairy Coalition has supportedreplacing the guest worker program with one that would eliminate some worker protections, such as the requirement to pay a prevailing wage.

Workers advocate groups pushed for a path to permanent residency and citizenship, which the National Milk Producers Federation supported. The worker advocate groups resisted efforts to expand the guest worker program, saying it leaves workers in a position to be exploited. Under the program, if a worker doesn’t do what an employer asks without complaint, the employer can fire the worker, which in general means the end of his or her visa.

In Wisconsin, Peck, with Family Farm Defenders, says undocumented immigrants are essential to the dairy economy and part of Wisconsin’s rural communities. “If they are so integral to our economy, why can’t they become citizens?” he asked.

In November, after months of negotiations that included agribusiness representatives and workers groups, 49 U.S. House members co-sponsored bipartisan legislation that would provide undocumented farmworkers and family members with a path to citizenship. It would allow dairy farms access to thousands of agricultural guest workers for year-round jobs and would dedicate an additional 40,000 green cards per year for agricultural workers.

Agricultural employers could sponsor workers’ getting green cards, and some seasonal guest workers could apply directly. The bill would create a pilot program with visas allowing workers to move freely among agricultural employers.

The bill would require agricultural employees to use the E-verify program to check whether immigrants are authorized to work. The bill has been referred to four House committees. If passed, it could face an uphill battle in the Senate.

No Wisconsin representative has co-sponsored the bill.

Border crossings more difficult

Tecpile says he would love to travel home, but there’s no guarantee he could get back. Crossing the border on the way north is riskier and more expensive, he says. The smugglers, called coyotes, who guide and transport immigrants illegally ask for $8,000 or more.

When Trump was elected, Tecpile says, he never thought of leaving. He knew American farmers need workers too much.

“I didn’t pay attention,” he says. “I had to work.”

In Mexico, Montalvo, his wife, says it’s hard to be separated this long.

Megan has never had a birthday party when she could hug her father. She wants him to take her to school. She wants him home.

“Sometimes my daughter needs her dad, but he isn’t here,” Montalvo says. “She knows he is working.”

Their son Kevin, 16, says holidays and other special occasions are tough.

“When all the family gathers, he isn’t here,” he says.

Many of Kevin’s friends, he says, also have parents working in the USA who stay away for five or six years at a time. He says he should go to Wisconsin, work on a dairy farm, be with his father and build “a good future.”

He isn’t afraid of trying to cross the border, an attempt that has left many migrants dead. His mother doesn’t want him to go yet. He is too young.

Maybe, she says, he could try crossing after he turns 18.

Source: Aberdeen News

Ernespie Farm is Named the 2019 Scottish Farmer of the Year

Dairy Farm of the Year was Ernespie, whcih is run by David McMiken

The McMiken family have scooped up the top dairy award at this year’s AgriScot, fending off tough local competition from two other farms located in the dairy heartland of Dumfries and Galloway.

Ernespie Farm run by the McMiken family was described as ‘outstanding’ by independent assessors – former chairman of AgriScot Alex Brown, and Robin Young.

David McMiken, who runs the farm along with his partner, Rebecca and his parents, returned to the family farm five years ago after studying automotive engineering at university, teaming with new ideas.

Since his return, he has fitted out a new 290-cow dairy unit plus silage clamps and feed storage with assistance from government and EU funding.

The herd graze outdoors during the day, in the summer months and David is helped on the farm by a full-time herdsman, as well as the help of one further employee and self-employed labour at peak periods.

No animals are brought onto farm, with genetic improvement being assisted by the selective purchase of embryos.

A farm visitor centre has been added which opened this past summer which includes a restaurant, animal barn, soft play area and outdoor facilities. Twenty-nine members of full and part time staff are employed, with Rebecca taking responsibility for the day to day running.

Gilmour Lawrie, who convenes the award on behalf of AgriScot, commented: “There were an encouraging number of farms forward for the award this year and I understand the independent assessors had their work cut out to choose the three finalists, let alone the ultimate Scottish Dairy Farm of the Year.”

The assessors also praised the other two finalists in the category, Baltier Farm, Whithorn, Newton Stewart, where the third generation of the Forsyth family milk 580 high yielding Holsteins and Drum Farm, Beeswing, Dumfries, farmed by the Harvey family.


Canadian dairy farmer says US dairy system needs overhaul

Vic Fremlin at 98th annual Rotary Community Day Parade in Sault Ste. Marie, Ont., on Saturday, July 20, 2019. And the Winner Is … Celebrating the Academy Awards is the theme. (BRIAN KELLY/THE SAULT STAR/POSTMEDIA NETWORK)

Vic Fremlin says the United States dairy industry isn’t going to get any better unless it changes its ways by producing less milk in order to increase its profit margin.

Trying to produce and filter more of its product into Canada’s dairy market is not the path to success, the long-time dairy farmer and owner of Lock City Dairies said Tuesday in a telephone interview.

Last week, American dairy giant Dean Foods filed for bankruptcy protection, claiming declining milk sales is taking a toll on the industry.

Dean Foods produces more than 50 brands, including Country Fresh, Land O’ Lakes and Dean’s. The company says it plans to continue operating and is working within the industry to find solutions.

The U.S. dairy catastrophe has caught the interest of U.S. President Donald Trump who wants to infiltrate more American dairy into the Canadian market.

But Fremlin argues that Dean Foods and the entire U.S. dairy industry is in a precarious position because the American system is broken and dairy farmers can’t make any profit, let alone break even.

“They think that by producing more product they’ll make more money. But that’s not the case. It’s the opposite. They need to produce better quality products, and less quantity in order to get better sales,” Fremlin said.

Canada’s supply management controls ensure that Canadians get the best dairy quality, which improves the market.

And it’s a market product that’s wanted by others, including in China and Japan, which in turn provides a gain to the Canadian market, Fremlin said.

Higher quality standards in Canada, which include no BST or growth hormones or additives, result in better quality products attractive to consumers.

The supply management control system in Canada protects quality and helps the dairy industry, Fremlin said.

The system allows dairy farmers to get a fair market price for the product at the highest quality. Quotas are set for a reason to ensure that the quality remains high and the market isn’t over saturated.

“You don’t dare do anything to jeopardize your quota. We’re allowed to have volumes of certain margins and the consumer doesn’t have to pay for this. It’s all paid by the farmers,” he said, something that’s opposite to the American system.

“Our supply management requirements are such that we don’t take assistance from the taxpayer. We are totally independent.”

Canada has already ‘sold out’ seven per cent of the dairy market to the United States as part of the new NAFTA agreement. A further seven per cent goes to the European market, Fremlin said.

While he expects American dairy to enter Canada over the next year, Fremlin said he’s confident consumers will see that the products are not produced in Canada and the quality is not the same. As well, the more milk they ship, the less they receive per litre.

“That’s not going to help American dairy farmers. They’re cutting their own throat. Producing more product, versus quality product, is not the answer to their problems,” Fremlin said.

He suggests the American market has seen a downturn of about five or six per cent this year while the Canadian market has enjoyed a one per cent growth rate during the same time period.

Fremlin said he believes that the Ontario Dairy Association needs to do a better job to educate consumers about the industry and how it works.

“It’s a very complicated system, but it’s a very successful system and recognized by others,” he said. “Others around the world now want a piece of our market.”

Fremlin said the dairy industry is also good for the Canadian economy, and especially rural areas where the family dairy farms exist.

“Agriculture is very powerful but we need to feed our own people and our standards are triple-A standards and it’s wanted for that reason,” he said.

He said that about every 20 cents of every dollar is driven to the dairy industry, whether it’s to pay staff, purchase equipment and other materials or hire veterinarians, among other things.

“This is a lot of money that helps the rural areas and I don’t think the Canadian government would be dumb enough to give up any more of our market,” he said.

Fremlin said the U.S. dairy industry has been in trouble for a decade and the only way it can fix the market is raise prices 25 per cent and lower volume by 10 per cent.

“That will probably put them into a profit margin,” he said.

In the meantime, the American dairy industry is blaming millennials for less diary consumption as well as an increase in beverage choices ranging from bottled water to juices or organic products.

In 2018, Dairy Farmers of America reported a 7.5 per cent decrease in sales and the organization blamed lower milk prices for the loss.


Increase in milk prices offer a glimpse of hope for dairy farmers

Farmers haven’t had a lot to be optimistic about. Wet weather and a poor harvest have made life more than difficult for those who provide for society to make ends meet. For dairy farmers, however, a small glimpse of hope is showing itself in the form of milk prices.

Cows feeding at Miltrim Farms in Athens, Wis. 11/15/19 (WSAW photo)

“November itself, it just hit $20 per hundredweight of milk. That’s for every hundred pounds, you get $20,” said David Trimner, general manager of Miltrim Farms in Athens, who milks over 2,000 cows daily. “It’s great to see, but we’d love to see a good year.”

According to Trimner, that’s the highest price for milk in the last five years.

“A lot of people, they’ve got unpaid feed bills; they’ve got seed bills that they needed to pay from this last spring; this next spring is coming up and you have to prepay to get discounts,” said Trimner. “This will hopefully give us some hope and help us start to get on track.”

This news comes while new legislation is up for vote in the state Senate, Bill 505, which would provide tuition assistance grants for educational programs aimed at helping prevent farm suicides.

“The fact that the price of milk is going up is good. It probably adds some relief and maybe takes some of that anxiety and depression away,” said Dr. Casper Bendixsen, a center director at Marshfield Clinic’s National Farm Medicine Center. “The fact of the matter is, if there’s other reasons for anxiety and depression, the changes in milk prices don’t change that.”

Trimner agrees, saying that while it’s a relief for many farmers to be able to earn a profit on their milk, the future is still up in the air.

“We’re expecting to not see such a high price going forward but still see reasonable prices,” said Trimner. “Maybe $18, which again, is kind of a price point I feel that people can still start to recover a little bit. There are a lot of variables into that, particularly farm to farm, but right now feed costs are a little bit lower, and hopefully they stay there. I say once we get below $16, you really start to eye things up, see where we’re spending our money and how can we improve that so $16 is really that kind of break even.”

Trimner added that people at home are able to help farmers with the food that they eat.

“Buying a lot of cheese. For every 10 pounds of milk you make one pound of cheese,” said Trimner. “Cheese is a big deal, so eat lots of pizza, lots of things with cheese ingredients; eat your ice cream, that’s always delicious. Those are some big things to really support the dairy farmers.”


Last year was the worst for Wisconsin dairy farms since 2004, new data shows

Wisconsin is known as America’s Dairyland but those family farmers who gave the state its slogan are vanishing.

The state lost 638 dairy farms last year according to Wisconsin’s Department of Agriculture, Trade and Consumer Protection (DATCP). Democrats often put part of the blame on trade wars and President Donald Trump’s policies.

Senator Tammy Baldwin (D-WI) and other Democrats unveiled a new report this week highlighting the fact that Wisconsin lost more than 1,800 dairy farms since Trump took office.

“Wisconsin is America’s dairyland and we’ve seen horrible things happening because of the trade war with China,” Baldwin told 27 News.

While her facts match up, 27 News found Wisconsin has been steadily losing dairy farms over the last 15 years.

Data from DATCP shows in 2004 Wisconsin had 15,904 farms. As of October 2019, more than half of those are gone — only 7,476 remain.

Over the last 15 years, under three presidential administrations, the decline continues. The percentage of dairy farms lost is around 3 percent each year. From 2011-2013, the percentage went up a bit to around 5 percent, then back to 3 percent. The largest jump was in 2017, a 7.2 percent loss.

“We have reason to be concerned and frankly frustrated,” said Baldwin.

Multiple factors play a role in the downturn of the dairy industry: declining milk prices, wet weather, herd sizes getting smaller and trade disputes.

Congressman Bryan Steil (R-WI) and other Republicans in Congress believe new trade deals will help reverse the trend. They are urging Speaker Nancy Pelosi to pass the United-States-Mexico-Canada Agreement to increase access to markets.

“Our farmers are struggling to cope with low milk prices and limited opportunities to sell their products,” Steil told 27 News.

“Farmers share with me their support of the United States-Mexico-Canada Trade Agreement (USMCA) to provide increased access to our trading partners’ markets. We’re proud to be home to the best dairy products in the world. I will continue fighting for Wisconsin farmers and urging Speaker Pelosi to get USMCA across the finish line.”

A new trade deal is in sight according to sources on Capitol Hill. Pelosi said Thursday Democrats plan to hold a caucus meeting to discuss trade negotiations.


Australia approves China-government backed buyout of dairy firm Bellamy’s

Australia cleared a dairy producer part-owned by the Chinese government to buy local infant formula maker Bellamy’s Australia Ltd <BAL.AX> for A$1.43 billion (£766.08 million), but imposed several conditions amid a potential backlash.

The government said on Friday the Foreign Investment Review Board (FIRB) had unanimously decided that the sale of Bellamy’s to Hong Kong-listed China Mengniu Dairy Co <2319.HK> was not against Australia’s interests. Mengniu is 24% owned by Chinese government entity COFCO Dairy Investments.

However, FIRB’s approval was conditional on the much smaller Bellamy’s keeping both its headquarters and most of its board local, along with guaranteed investment in domestic facilities.

The decision shows the Australian government welcoming Chinese money into a politically sensitive industry at a time when relations between the countries have been strained by accusations of political interference by Beijing.

Australia has been under additional pressure due to a U.S.-China trade war because it has strong ties to both countries.

“This approval will ensure Bellamy’s can continue to support jobs in Australia and strengthen its ability to expand its domestic market as well as its export opportunities, particularly into the growing Asian market” said a statement from Treasurer Josh Frydenberg’s office.

“The decision will also provide opportunities for the suppliers that contribute to Bellamy’s products, including Australian dairy farmers.”

Shares of Bellamy’s had halved in the year and a half before it announced the Mengniu buyout in September due to delays getting approval to ship product to the Chinese mainland, its biggest market. That prompted some to question whether the Chinese government had intentionally pressured the company to make it a cheaper takeover prospect.

Bellamy’s deputy chairman John Murphy was quoted in The Australian newspaper saying there was was “no conspiracy” surrounding the takeover. A representative of Mengniu in Australia was not immediately available for comment.

Bellamy’s, which is number four by market share in the Australian infant milk formula market, acknowledged the approval and said it continued to recommend that shareholders vote in favour of the deal at a meeting next month.

The company’s share rose 2% by midsession on Friday to A$13.20, their highest level since July and just below the total Mengniu offer price of A$13.25.


The conditions imposed by FIRB include that Bellamy’s headquarters remain in Australia for at least 10 years, that the majority of its board be Australian citizens living the country and that at least A$12 million is invested in local processing facilities.

Opposition Labor Party treasury spokesman Jim Chalmers said the government needed to explain “how and why this decision is in the national interest.”

“We are not privy to FIRB advice and haven’t been briefed on the decision,” he said in an emailed statement. “We need to know more about the undertakings that have been given and that they’ll be followed through.”

Australia has blocked a number of Chinese investments in recent years, including an attempt by Hong Kong-based infrastructure investor CK Group to buy energy pipeline operator APA Group <APA.AX>. It also banned China’s Huawei from supplying equipment for a 5G mobile network in the country.

Frydenberg said the government would continue to welcome foreign investment “where it is consistent with our national interest.”

“Without foreign capital and investment, Australia’s output, employment and standard of living would be lower.”


Dairy pride is making a big comeback in New Zealand

DWN’s new president Karen Forlong.

Pride is returning to the dairy industry, says the new chair of Dairy Women’s Network, Karen Forlong, a Central Plateau farmer.

“We are starting to stand shoulder to shoulder and be a voice,” she told Dairy News.

“On a personal basis in my time in this role as chair I would like to see that pride grows to a place where dairy farmers are not afraid to say ‘I am a food producer. I feed the world and I am proud of it’.

“Adversity sometimes makes people come together and speak with a collective voice.

“I would like to see the agricultural sector do that because we are all food producers.  The world needs us, New Zealand needs us.”i

Sometimes it is hard to tell our story because of the humble nature of New Zealanders, she says. That was evidenced in the way the All Blacks after their loss to England came out the next week to play with heart and passion, and to salute the crowd, in contrast to the behaviour of some other teams.

“New Zealanders are intrinsically wired to be quite humble but we need to step over that and realise we do have something worth celebrating in this country. It is worth being proud of every aspect of it and that includes the agri sector.

“All of New Zealand should be proud of the agri sector. We are one of the cleanest food producing countries in the world.”

Challenges around water and greenhouse gases need to be faced “but we can get there,” she says. “We can only get there by working together and taking time, not throwing one generation under the bus.”

Former chair Cathy Brown, living the empowerment values of DWN, stepped down from the role to allow Forlong the same opportunity to grow. Forlong says she has “some very big shoes to step into” but sees the role as similar to an orchestra conductor.

“I don’t really play an instrument. There are many components of DWN and my role is bringing all the great aspects of it together.”

The industry is in a state of great change and there is a lot of noise out there, she says.

A key DWN focus is acting as a supporter and enabler through this change. Delivering knowledge, sorting the noise and facts from each other and trying to soften the noise a little to members are important. 

“We put a strong value on face to face connection where possible.  We have this wonderful group of regional leaders who work voluntarily and tirelessly alongside busy day jobs to bring events together at regional level for members and others to come together face to face. Regardless of the purpose there is nothing quite like being in the same room as other human beings.”

Nimbleness is a DWN strength particularly when there is a real need. The network has responded to issues in the past 12 months — like M. bovis, new labour and housing regulations — with workshops quickly put together for members.

“We got rid of the noise and put the facts to them in a face-to-face situation where they could share their successes and their challenges.”

Aside from expert facilitators they “had that wonderful thing called ‘gold’ in the room, with people on the ground who are actually living the real deal”. 

“We can have all the great ideas written on paper but implementation is key.” Workshops aim to provide proven solutions that can be implemented immediately. 

Forlong says one of her key strengths is she is an inclusive person.

“A priority at times like this is to be inclusive, to allow people a place to land in a safe and trusted place where they can ask the questions, share their challenges. We as a network are there to stand tall with them and walk through this whatever that might be. 

“We are getting better and better at that, we are playing very strongly in the people space, delivering in that aspect, and also supporting the Dairying Tomorrow strategy.”

A key strength of DWN is that it is “pick and mix,” she says. Members can be involved as much or as little as time or inclination allows and in whichever aspect suits. That may include the annual conference, workshops, more structured involvement like business groups and social aspects to get off farm.

True Jersey farmer

Karen Forlong has farmed with her husband Maurice on just over 200ha near Atiamuri in the Central Plateau for 25 years.

They milk 400 Jerseys which is not quite the norm on the Central Plateau where Friesian cross-breds predominate.

Prior to farm ownership, the Forlongs were sharemilking around Waikato, including a contract milking job for Tatua supply which included a Jersey herd.

They were offered the opportunity to buy the herd and go 50/50 share milking as a first step towards farm ownership and they have stuck with Jersey since.

Forlong says she could “talk the merits of Jersey until the cows come home”.

They produce about 100-105% of their liveweight in milk solids, they are very efficient and their lighter frame of 400-420kg does a great job of protecting the steeper contour of the property. 

Forlong has been a member of DWN since 2000 when the first regional group for the Rotorua area was formed.

She has experienced various roles that included being a volunteer regional leader.


A Milk Giant Goes Broke as Americans Reject Old Staples

Dean Foods filed for bankruptcy protection on Tuesday. It’s not the first food giant to be caught off guard by a shift in tastes.

When Samuel E. Dean Sr. founded his milk company at a processing facility in Illinois, milkmen still delivered pints to homes all over the United States and children dutifully drank three glasses a day.

That was 1925. Nearly a century later, milk is quickly going out of fashion and Dean Foods — which is now the largest milk company in the United States — has found itself unable to compete as plant-based and lactose-free dairy alternatives rise in popularity.

Saddled with debt and struggling to adjust to changing consumer habits, Dean Foods filed for bankruptcy protection on Tuesday, signaling another grim chapter in the recent struggles of the dairy industry. The company, whose portfolio of brands includes TruMoo and Lehigh Valley, said it was in talks to sell itself to Dairy Farmers of America, a marketing cooperative that sells milk from thousands of farms.

Across the food and beverage industry, the challenges facing Dean Foods are becoming increasingly familiar. In recent years, consumers have moved away from brands, and even entire categories of food, once seen as household staples. The decline of the milk industry has emerged as a particularly stark example of how these changing tastes are challenging major companies whose products once crowded store shelves.

“Long ago, the public figured out that diets do just fine without milk and no, we don’t have to drink three glasses a day,” said Marion Nestle, a food studies professor at New York University. “Maybe plant-based milks are the coup de grâce, but this industry just can’t seem to keep up with changing tastes.”

Dean Foods is not the only major brand struggling to keep pace as consumer habits shift. Outside the dairy industry, Kraft Heinz has also stumbled.

In 2015, the merger between Kraft and Heinz, owners of some of the best-known brands in packaged foods, created a giant with $28 billion in annual revenue and dozens of products that Americans have eaten for generations.

But as demand for unprocessed and organic alternatives rose, the company’s sales and profits plummeted. Kraft Heinz also made steep budget cuts at a time when research and development should have increased, analysts say, with start-ups competing for shelf space.

Like Kraft Heinz, Dean Foods has watched from the sidelines as smaller rivals dominated the growing market for trendy alternatives, like almond milk and plant-based dairy products. In fact, in 2012, the company started spinning off its units that made such alternatives — a move that in retrospect looks like a strategic error.

Those brands, Silk and Horizon Organic, are now owned by Danone, the French food company.

Dean Foods and Kraft Heinz “both carry a lot of debt,” said Matt Gould, a dairy industry analyst. “And that constrains your ability to try radically different things.”

The two struggling companies have also faced competition from private-label brands developed by retail chains like Walmart and Kroger. Once one of Dean Foods’ most important customers, Walmart opened its own milk-processing plant in 2018.

Dean Foods and Kraft Heinz are not the only food companies facing competition from private-label products, which are often available at steep discounts. In August, Target announced plans for its own line of grocery products, which it expects will include more than 2,000 items and become a multibillion-dollar brand by the end of next year.

“Consumers over all in packaged food are becoming more and more receptive to private-label products,” said Simon Gunzburg, an analyst at the research firm Euromonitor. “They’re seeing them as great value.”

Before its bankruptcy filing, Dean Foods had reported losses for five straight quarters and closed some of its plants, laying off hundreds of workers. The company’s senior leadership has been in a state of flux, with three chief executives in three years. (The Dean family no longer holds a large stake in the company, which was sold in 2001 to a rival, Suiza Foods, which took on its name.)

And across the country, milk consumption is steadily declining. Americans drank 37 percent less milk in 2017 than they did in 1970, according to the Agriculture Department.

This year, the Dairy Farmers of America reported that its milk sales had dropped to $13.6 billion in 2018, from $14.7 billion in 2017. One reason for the decline is a decrease in cereal consumption: More and more Americans are switching to power bars and other breakfast options that can be consumed on the go.

The growing enthusiasm for another dairy product — yogurt — has also hurt Dean Foods by chipping away at demand for cereal. And in recent years, milk alternatives made from almonds, soy, cashews and coconuts have exploded in popularity. Many people consider them more nutritious than cow’s milk, or buy them because they have a milk allergy or lactose intolerance. Others choose them for environmental reasons, or because they want a vegan diet.

In 2016, Starbucks, the world’s largest coffee chain, started offering almond milk to lighten its espresso drinks, responding to consumer demand. And last year, sales of nut and plant milks grew by 9 percent, according to the Plant Based Foods Association, a trade group.

“When I was young, my mother would’ve told me, ‘Here’s milk — drink it,’” said Mark Stephenson, director of dairy policy analysis at the University of Wisconsin in Madison. “We’re doing different things now.”


Rabobank Protein Outlook 2020: Seeking Opportunities in an Uncertain World

RaboResearch Food & Agribusiness published its annual global animal protein outlook. In general, African swine fever (ASF) overwhelms the outlook for 2020 – as it has done during 2019 – and will pull down overall growth, as well as bring uncertainty to all markets.

In short, in 2020, the global animal protein sector faces an uncertain world, which also offers opportunities for some.

Justin Sherrard, Global Strategist Animal Protein at RaboResearch Food & Agribusiness, summarizes what 2020 will bring: “Besides the impact of ASF, many trade disputes and issues are causing uncertainty for global animal protein, with the US-China trade war the most apparent – but not the only – trade uncertainty. In addition, the ongoing rise of alternative proteins also adds to the uncertainty – even though Rabobank has a less bullish view of alternatives than others do.”

The report also covers sustainability developments, which are slightly less prominent than the above issues. However, says Sherrard: “In our view, sustainability is just as important as other areas of uncertainty, as it will shape the growth of animal protein production and consumption through the 2020s.”


Despite the uncertainties, there are also opportunities. “The most obvious area of opportunity in global animal protein is the recovery from ASF, which, in Rabobank’s view, will extend through the 2020s. Winning on sustainability is another opportunity, which can be achieved by harnessing the supply chain and moving ahead of market signals. Finally, investing to secure ongoing trade flows can also be an opportunity, as this can reduce some of the uncertainty and secure continuous market access”, concludes Sherrard.

Production Outlook

Rabobank expects growth in most regions in 2020, but the impact of ASF in Asia overwhelms the outlook. In particular, China’s production losses will exceed the growth in all other regions combined. Across species, aquaculture and poultry will lead production growth in 2020, while beef will be stable, and wild-catch seafood will decline again. All of these changes are minor compared with the production decline in pork.


With regard to seafood, RaboResearch expects a modest growth of salmon supply, with Norway expected to be the main, albeit modest, supply driver in 2020. The shrimp industry is also set for growth, despite low prices, with Ecuador, followed by Vietnam and Indonesia, leading production gains. The fishmeal market sees both lower supply and lower demand in 2020. ASF has impacted the demand for fishmeal in piglet feed in China, countering the effect of lower supply in 2019. Rabobank expects a similar pattern for 2020.

Regional outlooks

North America: Rabobank expects production for all species to rise in 2020 – led by pork, followed by poultry, and finally beef. While domestic consumption will grow, exports will need to pick up to manage this production growth.

Brazil: Production growth is expected for all species in 2020. Export opportunities are the main driver, although domestic demand is also improving.

Europe: Poultry and pork production are set to rise, driven by export opportunities. Beef production is expected to decline, in response to soft consumption.

China: ASF dominates the outlook, with a further decline in pork production in 2020. Production will grow for all other species, given the pork shortage and prices at high levels.

South-East Asia: ASF is already affecting pork production and is expected to spread further in 2020, impacting production. Poultry production will again rise strongly in 2020, partly in response to ASF. Beef production remains flat, but imports are on the rise.

Australia & New Zealand: Tight livestock inventories in Australia will see beef production down and sheepmeat production stable in 2020, with firm prices for both. Rabobank expects New Zealand’s beef and sheepmeat production to rise, with favorable price levels.

Source: The Dairy Site

New Zealand milk production in line with 2018-19

Fonterra’s domestic milk collection is up 0.8% in the year to date according to its latest Global Dairy Update.

Fonterra’s New Zealand collection for September was 179.1 million kgMS, down 0.1% on the same month last season. Season to date collection was 309.4m kgMS, up 0.8% on last season. 

New Zealand milk production was down 0.7% on a litre basis but was up 0.7% on a milk solids basis in September compared to the same period last year. The variance between milk solids and liquid milk indicates improved pasture quality from last September, the update says. 

“Despite several cold snaps in parts of the South Island, average temperatures were recorded across much of the country and on-farm pasture conditions remain good,” the update says.

Fonterra’s North Island milk collection in September was up 1.1% on last September and the season to date is up 1.7% on last season. Favourable conditions are expected to continue for the North Island.i

The cooperative’s South Island milk collection in September was down 2.1% on last September and in the season to date collection was 98.5m kgMS, down 1.1% on last season. 


Why we should be drinking full fat milk

When I was a child almost everyone drank full-fat fat milk. Then, in the 1970s, we were warned saturated fats found in dairy would block our arteries and make us fat.

Concerned about our health, many made the switch to foul-tasting skimmed milk, or gave up cow’s milk altogether. Me included.

As a result, Britons are drinking a third less milk than they were 30 years ago, and consumption rates continue to fall. A recent survey found a third of people under 35 are now considering cutting back on dairy, citing health or moral reasons. Instead, they opt for plant-based alternatives such as soya, almond or coconut ‘milk’.

My 18-year-old daughter Kate is one of them. Cow’s milk makes her uncomfortable and bloated, so in a bid to reduce her symptoms, she made the switch to almond milk.

Kate’s problem is surprisingly common. About 60 per cent of the global population lack the enzyme lactase that helps us digest the sugars in cow’s milk, called lactose. For these people, guzzling milk can lead to unpleasant symptoms such as stomach irritation, gas and bloating. However, the vast majority have minor symptoms and even those with severe lactose intolerance can usually tolerate a tiny splash in their tea.

But for some people, even the odd builder’s tea can cause crippling stomach cramps, not to mention embarrassing wind. So I understand why the alternative milk market is booming. But I also have concerns.

If you are thinking of switching away from dairy, for health reasons, then there are a few things to know, because unless you really understand what it is you are doing, switching from dairy could actually be bad for your bones, heart and brain. And, rather ironically, opting for skinny versions could even make you fatter. After weighing up the evidence, I’ve recently switched to the full-fat variety again – and after reading this you may want to do the same.

Almond milk won’t protect your brain

Cow’s milk contains lots of essential nutrients that nut or oat milks don’t; high levels of protein and Vitamin B12, for instance.

Everyone knows dairy is an excellent, natural source of calcium, essential for healthy bones, but not many are aware of another, equally important nutrient, called iodine. One small glass of cow’s milk (full-fat, semi-skimmed or skimmed) contains almost 70 per cent of our recommended daily intake of iodine – essential for brain development in babies and regulating mood and metabolism in adults.

Studies have shown ‘milk’ derived from plants contains just two per cent of the amount found in cow’s milk. You can also get your iodine ‘fix’ from eating seaweed and it’s abundant in shellfish and other white fish. But cow’s milk remains by far the main source of iodine in the average British diet.

Given the fact that we are one of the most iodine-deficient countries in the world, many of us need every scrap we can get.

Sadly, young women tend to have the lowest levels – and this is the same demographic most likely to shun animal foods in favour of plant-based alternatives. A 2011 study of British teenage girls found nearly 70 per cent had iodine levels well below the acceptable minimum. Iodine is needed to make thyroxine, a hormone released by the thyroid gland that controls how effective your body is at converting food into energy, also known as metabolic rate.

Persistently low levels of iodine lead to depletion of this hormone and the slowing down of vital bodily functions, including burning energy. It is what is known as a ‘hypothyroid’ state, which leads to weight gain and mood swings. More worryingly, iodine deficiency in a pregnant woman can impact the brain of her foetus – a 20-year study of 14,000 pregnant and post-pregnant women discovered that if an expectant mother was mild to moderately iodine-deficient, this had a significant effect on her child’s reading ability and IQ scores.

Another study, looking at almost 50,000 babies, found both maternal and new-born iodine intake to have a significant impact on the child’s neuro-development at three years of age. Low levels of the mineral were associated with delayed language development, behavioural problems and reduced motor skills in children. This happens because a lack of thyroid hormones dramatically halts the brain development of the foetus.

The extra fat can curb your hunger pangs

I switched from full-fat milk to skimmed in the 1980s, amid fears that saturated fat could impact my heart health and my waistline. The trouble was, I found skimmed milk (which is about 0.3 per cent fat) so watery I couldn’t stomach it, so chose semi-skimmed (1.6 per cent fat) instead. This green-top milk remained my go-to for many years until last year. I returned to blue-top after reading a number of recent studies which showed the sorts of saturated fat you find in milk and dairy seems to be protective rather than harmful.

One of the reasons we’ve been told to go for low-fat options, like skimmed milk, is because consuming saturated fats raises level in the blood of LDL, often thought of as ‘bad cholesterol’. High levels of LDL are associated with a greater chance of heart disease.

It was also assumed that because skimmed milk has less than two-thirds of the amount of calories, per glass, of full-fat milk, it would be less fattening.

But we now know it is more complicated than that.

The saturated fat in milk does indeed boost LDL but it also boosts levels of ‘good cholesterol’ known as HDL, and this appears to balance out the damage done by higher LDL.

HDL picks up excess cholesterol in the blood and takes it back to your liver, where it’s broken down and removed from the body.

To many people’s great surprise (including me), there have been a large number of recent studies demonstrating that full-fat milk drinkers not only tend to be slimmer than those on lower-fat varieties, but also have a lower risk of metabolic syndrome – or raised blood pressure, elevated blood sugars and raised levels of fats in the blood that can increase your risk of heart disease.

A recent study of 1,600 healthy middle-aged Swedish men found those who ate butter and drank full-fat milk were half as likely, over the 11-year study period, to become obese than those who went for skimmed milk and low-fat spreads.

And a study of 18,438 American women found those eating the highest amount of full-fat dairy were the least likely to gain a lot of weight over 11 years.

The likely explanation, according to studies, is that consuming high-fat dairy products keeps you fuller for longer, reducing the lure of sugary snacks.

So why not just go one step up to semi-skimmed? Well, you certainly could but it has lower levels of some essential fatty acids, like omega-3, which is linked to slowing cognitive decline and reducing anxiety and depression.

Full-fat milk may have three times the fat content but it also contains 90 times the amount of omega-3 fats as found in skimmed milk, and about twice as much as semi-skimmed, not to mention that the fat-removal process rids the finished product of a host of vitamins, such as Vitamin A and Vitamin D. Some of these vitamins are added back in afterwards, but by no means all.

I like the flavour of full-fat milk and those extra few grams of fat curb my hunger pangs.

I believe my brain, bones, heart – and taste buds – will thank me for it.


November’s Dairy Data Dashboard

Every month, USDEC aggregates domestic and global dairy data to create 10 charts displayed in a one-page, printable dashboard. 

The November Dairy Data Dashboard is now available.

 dashboard (November)

Dairy Farmers of America Wants to Buy Dean Foods But Others May Too

Dairy Farmers of America Inc, the biggest U.S. dairy cooperative, is in advanced talks to acquire U.S. milk processor Dean Foods Co. But other would-be buyers could emerge.

While discussions are taking place between DFA and Dean, no agreement has been reached for the purchase of all or some of the Dallas-based company’s assets, Monica Massey, executive vice president and chief of staff at DFA, said in an emailed response to questions. She didn’t speculate on prospective bidders.

A deal could be a lengthy process, including an antitrust review. Any transaction would require an “extensive review of Dean Foods’ assets, thorough due diligence and other conditions, including approval from the Department of Justice and the Bankruptcy Court,” Massey said. Dean intends to file bidding procedures with the court to conduct a sale.

“We have been monitoring Dean Foods’ financial performance closely since the business began showing signs of distress and have been preparing for various scenarios, including a bankruptcy filing, in order to minimize the impact to DFA,” Massey said. “Our farmer leaders and management have built our cooperative to withstand a situation like this. Our members and employees will get paid, schools will get milk, and dairy products will remain on the shelves across the country.”

Dean Foods is the biggest customer of the Kansas City-based cooperative, which has around 14,500 family farmer members around the country. DFA is focused on “ensuring we have secure markets for our members’ milk,” she said.

While Americans may be drinking less conventional milk, 94% of U.S. households also keep it in their refrigerators, Massey said. The dairy category as a whole remains strong, with cheese and butter at all-time consumption highs. Americans ate 2.5% more dairy in August than they did the year before, and the retail market is worth over $100 billion, she said.


Dean Foods Bankruptcy Is “Not Reflective Of U.S. Dairy Industry”

Dean Foods, America’s largest milk producer, Tuesday filed for Chapter 11 bankruptcy.

A prominent figure believes the U.S. dairy industry should be optimistic, despite this shortcoming.

Former United States Agriculture Secretary Tom Vilsack now serves as president and chief executive officer of the U.S. Dairy Export Council (USDEC). Vilsack, presenting at the 76th annual National Association of Farm Broadcasting Convention, says industry officials are starting to see a rebound for dairy farmers.

“There is good news in the dairy industry. Ninety-four percent of households in the U.S have fluid milk in their refrigerators. Butter consumption is at a 50 year-high; cheese is at a record high, domestically. We’ve seen an increase in exports both in volume and value. Value is up almost a billion dollars more than it was a couple years ago,” Vilsack said.

Vilsack makes note of Dean Foods decision to file for Chapter 11 bankruptcy. He calls the situation an “unfortunate circumstance,” but does not believe it is reflective of the industry.

“We’re selling the most nutritious product around. As they say, ‘Nature’s most perfect food,’” Vilsack said. “We have an interesting environmental story to tell; dairy farmers are the only farmers that reduce greenhouse gas emissions. We have an animal welfare program that’s internationally certified. A lot of good news in the dairy business.”

Vilsack says all of this good news stems from recent advancements within the industry.

“This is an industry that has embraced innovation,” Vilsack said. “You’re beginning to see a lot of different products. We just shocked the world, if you will, at the World Cheese Awards. A cheese from Oregon was voted ‘Best Cheese in the World.’ Rogue Creamery, with their bleu cheese, won 131 medals, the highest ever. I think the world is beginning to realize that U.S. dairy and U.S. cheeses are quality.”

Vilsack adds, “The long-term future looks good for the U.S. dairy industry,” which sets its sights on opportunities for increased exports to Japan, Southeast Asia, Mexico and Canada.


Why P.E.I. dairy farmers are worried about how they’ll feed their cows this winter

One fifth-generation dairy farmer in Marshfield, P.E.I., says this was the toughest growing season he has seen in 42 years of farming.

The farm has nutritionists that take samples of feed to be analyzed, then advise on what supplements he needs to add for extra energy. (Randy McAndrew/CBC)

Some dairy farmers on P.E.I. are worried about how they will feed their cows this winter after a poor growing season and damage from post-tropical storm Dorian. 

Gordon MacBeath, a fifth-generation dairy farmer in Marshfield, P.E.I., said this was the toughest growing season he has seen in 42 years of farming. 

“It’s been a challenge since early spring, there was a lot of winterkill on our grasses and then it was cold, wet and the forages got off to a poor start,” said MacBeath, who milks 100 cows at Goldenflo Holsteins, along with his son.

“Then of course we were hit with a hurricane and then followed by some early frost so, yeah, it’s it’s been a tough year.”

MacBeath has giant piles of corn silage that he was able to harvest, but said the issue now is quality.

MacBeath says the grain content in the farm’s corn silage was around 55 per cent last year. This year it’s 35 per cent. (Randy McAndrew/CBC)

“The hurricane compromised the plants and so it didn’t finish maturing,” MacBeath said.

“Corn is an energy source and the energy is in the kernel and if that doesn’t mature properly, their energy content will be down, the digestibility will be down and that’ll impact the intake of the cow.”

Lost energy

The farm has nutritionists that take samples of feed to be analyzed, then advise MacBeath on what supplements he needs to add for extra energy.

MacBeath said the expense of adding those supplements this year will be “significant.”

“Last year, our grain content in our corn silage was around 55 per cent. This year it’s 35 per cent,” MacBeath said.

“We have to replace that with another energy source, either locally which will be tough because the grain growers, their crop was compromised as well so likely, in the end, we’ll be importing from off-Island.”

MacBeath said the extra expense is necessary to maintain milk production.

“For a healthy comfortable cow to produce large volumes of milk then she’s got to have good quality feed going in,” MacBeath said.

“If your crops are compromised and their digestibility goes down, that feed will just sit in the cow stomach for longer periods of time, rather than digest and pass through and generate milk.”

MacBeath says the energy is in the kernel and if that doesn’t mature properly, energy content will be down. (Randy Drenth/Twitter)

Request for financial assistance

The P.E.I. Federation of Agriculture has submitted a request for the provincial government to enact the federal-provincial program that helps farmers recover from natural disasters.

MacBeath says this was the toughest growing season he has seen in 42 years of farming. (Randy McAndrew/CBC)

The request includes corn and livestock producers as well as apple growers on P.E.I.

The AgriRecovery Framework provides financial assistance to producers for extraordinary costs related to harvesting after a natural disaster.

Potato producers on P.E.I. received $15.6 million from the AgriRecovery Framework after 2,800 hectares of potatoes were left in the ground in the fall of 2018 when rain and cold weather made it impossible to harvest them.

Harold MacNevin, the chairman of the Dairy Farmers of P.E.I., says the wet, low corn on the ground is also going to cause concerns about moulds and toxins in the corn after it’s harvested and stored. (Randy Drenth)

Harold MacNevin, the chairman of the Dairy Farmers of P.E.I., supports this year’s application.

“Producers are going to be struggling to have enough feed for the winter,” MacNevin said. 

“I’ve heard farms that generally have surplus feed that sell that surplus feed do not have the surplus this year to sell. They’re struggling to have enough for themselves.”

MacNevin says producers have been struggling to harvest the corn. (John Robertson/CBC)

MacNevin said some producers may end up selling some of their livestock if they don’t have enough feed.

“You don’t have the feed, you can’t get the feed, you can’t get the feed for a price that’s manageable and justified then yeah, selling livestock will be the option that they’ll have to choose.”

Wait for next year

MacBeath described the feed situation, for him, as a setback but not insurmountable.

“We’ve always had a good relationship with our nutritionist and our veterinarians,” MacBeath said. 

“But I think I’m going to have a more intimate relationship with my banker this year.” 

MacNevin says some producers may end up selling some of their livestock if they don’t have enough feed. (Randy McAndrew/CBC)

MacBeath said it will be a long winter for some dairy producers.

“We can’t harvest another corn crop until next October,” MacBeath said. 

“So we’ll spend the next year dealing with the challenges of this past growing season and then we’ll hope that we have a winter that our forages will come through and we can start off on a fresh foot next spring.”


US dairy on high alert over NZ threat in CPTPP trade deal

The US food and agriculture industry says New Zealand is among those “stealing” markets from American exporters as pressure ramps up on the Trump administration to secure a trade deal with Japan.

The US National Milk Producers Federation (NMPF) and nearly 90 other industry signatories have written to the US Trade Representative, saying US interests are increasingly disadvantaged by competing regional and bilateral agreements with Japan, including the new Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) of which New Zealand is a member.

“Japan recently decreased tariffs on agricultural imports from the European Union and CPTPP member countries, which the group (signatories) warned, is stealing markets once enjoyed by American exporters,” said the federation in an industry note.

“Expanded agricultural market access to Japan is vital for America’s struggling rural economy, and that access needs to be on par with what’s already enjoyed by US competitors,” it said of the message delivered to the administration.

“The administration finally took the necessary step of announcing talks late last year, formally starting negotiations last month. NMPF is focused on touting the urgent need for a deal with Japan that helps US dairy exporters maintain and grow their competitiveness in this dairy-hungry market,” it said.

The latest lobbying effort follows the US Dairy Export Council sounding the alarm early this year about New Zealand’s first trade agreement with Japan via the CPTPP.

New Zealand and Australia, which is also a member of the CPTPP, are Japan’s two largest dairy suppliers. Japan is New Zealand’s 5th largest dairy export market with an annual value of about $450 million.

The CPTPP eliminated tariffs on all New Zealand exports to CPTPP economies with the exception of beef to Japan and some dairy products into Japan, Canada and Mexico, where access is improved through partial tariff reductions and duty-free quotas.

US President Trump withdrew from Trans-Pacific Partnership trade talks, the precursor to CPTPP, in 2017.

NMPF said the US exported US$270m (NZ$411m) of dairy goods to Japan last year, making it the fifth largest buyer of US dairy products.

It said the letter to Washington highlighted a US Dairy Export Council study earlier this year which showed America could double its share of the Japanese market over the next 10 years if given “appropriate” market access.

“Without positive action from trade officials, the (council) study forecast that dairy exports to Japan will fall 20 per cent over the next 5 years as Europe, Australia and New Zealand increase their dominance in the market, given the benefits their own trade treaties with Japan provide them.

“A US trade agreement with Japan is needed quickly and it must include market access provisions at least equal to the terms of the CPTPP and the EU-Japan EPA (economic partnership agreement), building on those precedents where possible,” NMPF said the letter spelled out.

The CPTPP, signed by 11 Asia-Pacific countries, which collectively were the destination of 30 per cent of New Zealand exports worth $16.7 billion last year, has been ratified by six of the countries. It came into force in December.

The Government says the agreement has the potential to deliver about NZ$222m of tariff savings a year once fully in force.

The Japan-EU trade agreement took effect earlier this year.

As the Herald reported in February, the economic impact study commissioned by the US Dairy Export Council on the potential fallout for the US from the CPTPP, concluded competitors including New Zealand could seize US$1.3b in sales from the American industry in the next 10 years.

This could climb to US$5.4b once the two trade agreements were fully implemented over 21 years, the study claimed.

The report also claimed New Zealand and Australia had “limited capacity to increase their supply” to Japan, the second biggest importer of cheese in the world after the UK.

As a result Japan had looked to the US and the EU for extra supply, the study said.

It found if the US had the same market access as its competitors, American dairy exporters share of the Japanese market could grow from 13 per cent in 2017 to 24 per cent in 2027.


America’s No. 1 milk company declares bankruptcy amid drop in demand

Dean Foods, America’s biggest milk processor, filed for bankruptcy Tuesday amid a steep, decades-long drop-off in U.S. milk consumption blamed on soda, juices and, more recently, nondairy substitutes.

The Dallas company said it may sell itself to the Dairy Farmers of America, a marketing cooperative owned by thousands of farmers.

“Despite our best efforts to make our business more agile and cost-efficient, we continue to be impacted by a challenging operating environment marked by continuing declines in consumer milk consumption,” CEO Eric Berigause said in a statement.

Since 1975, the amount of milk consumed per capita in America has tumbled more than 40%, a slide attributed to a number of reasons but mostly the rise of so many other choices, including teas, sodas, juices and almond and soy milk.

That has hit dairy farms and milk sellers hard, leading some smaller family farmers to quit the business.

Another blow to Dean Foods came when Walmart opened its own milk processing plant in Indiana last year.

Dean Foods has lost money in eight of its last 10 quarters and posted declining sales in seven of the last eight.

The company said it will continue operating normally while it puts its finances in order under Chapter 11 bankruptcy. It has lined up about $850 million in financing from lenders.

Its stock rose 2.3% in morning trading.


America’s biggest dairy co-op may buy Dean Foods. Milk monopoly?

After Dean announced it had filed for bankruptcy, Dairy Farmers of America said it was in “advanced discussions” on an acquisition. A merger would all but guarantee lower income for struggling farmers.

One of America’s biggest dairy companies, Dean Foods, filed for Chapter 11 bankruptcy on Tuesday, leaving the future uncertain for its milk suppliers, some of whom don’t know whether they can stay in business if their major buyer goes belly up.

It’s no secret that the timing is terrible. Federally established milk prices remain low, dairy exports are down thanks to the trade war, and domestic milk consumption has fallen steadily since 1970. But one of the most pressing issues posed by Dean Foods’s bankruptcy is the possibility that farmers won’t be able to find anywhere else to sell their product.

Companies like Dean Foods buy fluid milk from dairy farms, which they then process and distribute to retailers across the country. Farmers can sell directly to processors, or they can sell to dairy cooperatives, which in turn, negotiate with processors and retailers on members’ behalf. However, rapid consolidation among dairy co-ops limits the number of options for farmers.

In addition to representing more than 13,000 dairy farmers, DFA controls 30 percent of milk production in the U.S.

“We really have not had any significant options to sell our milk in the last 10 years,” says Ernie Jones, who runs a 300-cow dairy farm in Tennessee with his daughter. Jones has sold directly to Dean Foods for the past two decades.

In its announcement, Dean Foods said that it was “engaged in advanced discussions” with Dairy Farmers of America (DFA), the country’s biggest dairy co-op, regarding a possible acquisition. For one antitrust expert, however, that raises concerns about anti-competitive activity.

Though it’s supposed to advocate for dairy farmers, DFA’s involvement in processing also means it has an incentive to keep prices of inputs (read: milk) as low as possible.

“The problem with DFA is the conflict of interest that will result from [trying] to lower prices to farmers in order to increase their revenue as a milk processor,” says Peter C. Carstensen, a professor emeritus at the University of Wisconsin Law School and a former attorney for the antitrust division of the United States Department of Justice (DOJ). 

Carstensen isn’t the only one concerned. Some farmers have accused the co-op of conspiring to suppress milk prices in order to maximize its own profits. And a recent government watchdog report found that competing interests within co-ops can impact farmers’ earnings. 

Though it’s supposed to advocate for dairy farmers, DFA also has an incentive to keep milk prices as low as possible.

In addition to representing more than 13,000 dairy farmers, DFA controls 30 percent of milk production in the U.S. Carstensen warns that a DFA buyout of Dean Foods could give it monopoly-like power over the milk market. “What you’re going to see is increased risk of tacit collusion on the consumer side, raising the price of milk for consumers,” he says.

In 2007, dairy farmers in the southeast U.S. filed a class-action lawsuit against Dean Foods and DFA, claiming that the two had conspired to keep milk prices low. According to the complaint, Dean Foods agreed to make DFA its sole dairy supplier in exchange for a guarantee of low milk prices. The lawsuit was later split, with Dean Foods settling for $140 million in 2011, DFA settling for $168 million in 2013, and neither company admitting to wrongdoing. In 2009, farmers in the northeast filed a separate class action on similar grounds, which Dean Foods settled for $30 million in 2011 and DFA for $50 million in 2014.

Farmers I spoke with for this story had another reason for feeling pessimistic about a DFA buyout: Unlike Dean Foods, cooperatives aren’t required to pay farmers federally set minimum milk prices.

“We could very well be in for quite a bit of a substantial decrease in our price for milk,” Jones says. “And we’re already teeter-tottering on low prices.”

Jones adds that he wouldn’t be able to afford lower milk prices at this point: “I’ve about had all I can stand.”

“It was one of those things we knew could likely happen but were hoping wouldn’t.”

In the 24 hours since Dean Foods filed for bankruptcy, news outlets—including CNN, Fast Company, Associated Press, and Barron’s—have been quick to blame the company’s downfall on decades of decline in American milk consumption and consumer interest in plant-based alternatives. 

But Andrew Novakovic, professor of agricultural economics at Cornell University, says the narrative here is more complicated than that.

“The decline in beverage milk sales is not the same story as the failure of this company,” Novakovic says, listing off the names of countless other milk processors that haven’t filed for bankruptcy. “I don’t think you can lay all the blame for their problems on the fact that they’re heavily invested in a declining sector.” But, he says, “it sure as hell didn’t help them.”

Last year, some farmers caught a preview of what it would mean to sever ties with Dean Foods, after the company terminated 100 dairy contracts in eight states in a purported effort to balance its supply with retail demand. Among current suppliers, Tuesday’s news wasn’t particularly a surprise. Speculation that Dean Foods would file for bankruptcy had been circulating for months.

“It was one of those things we knew could likely happen but were hoping wouldn’t,” says Milton Beard, another Tennessee-based dairy farmer. “There’s not a whole lot we can do about it at this point. We just hope we’re able to get paid.”


The milk, the whole milk and nothing but the milk: the story behind our Australia’s dairy woes

The plight of Australia’s dairy farmers is on the political agenda this week, after One Nation leader Pauline Hanson narrowly failed in her Senate bid for a minimum milk price. But getting fair payment for their goods is far from the only challenge dairy farmers face.

Pressure has been mounting on the industry for the past decade. Existing milk alternatives are growing their market share, helped by a rise in veganism and public concern around animal welfare. The agriculture sector is under pressure to reduce its contribution to climate change, and technology advances mean milk may one day be produced without cows at all.

All this has been compounded by devastating and prolonged drought. So here’s the full story of the hurdles farmers face, now and in the future, to get milk into your fridge.

Dairy cattle at milking time at a farm in Rochester, Victoria.AAP/Tracey Nearmy

Fluctuating farm gate price

The rate at which processors pay farmers for milk is known as the farm gate price. The prices are not regulated and are set by market forces.

In 2016 the milk price crashed when Australia’s two largest dairy processors, Murray Goulburn and Fonterra, lowered the price they would pay from about 48 cents a litre to as low as 40 cents.

This dramatically cut the incomes of milk suppliers. The number of dairy farmers in Australia fell by 600, or 9% over four years. This exit has been exacerbated by drought.

Since then, the farm gate milk price has increased and in 2019–20 is expected to be 51 cents per litre, due to a weaker Australian dollar and demand from export markets. But forecast global prices for butter, cheese and whole milk powder this financial year remain below that of previous years.

Methane, and milk alternatives

Methane and other livestock emissions comprise about 10% of Australia’s greenhouse gas emissions.

As the Intergovernmental Panel on Climate Change made clear in its land use report in August, changes must be made across the food production chain if the world is to keep global warming below the critical 1.5℃ threshold. For beef and dairy livestock, this means changes such as land and manure management, higher-quality feed and genetic improvements. Meeting this challenge cost-effectively, while improving productivity, is no small task.

Technology may help in curbing greenhouse gas emissions from cows, but it also threatens to replace the dairy industry altogether. Advances in biotech may enable liquid analogous to milk to be produced through bioculture systems, without a cow in sight.

Elsewhere, the rise of plant-based alternatives derived from soybeans, almonds, oats and other sources threatens traditional milk products. This can partly be attributed to increasing numbers of people adopting a vegan diet.

Farmers must overcome a host of challenges to deliver milk to consumers.Paul Miller/AAP

Taking calves away from cows

For a mammal to produce milk, it must usually become pregnant and produce offspring. Female calves generally go into a farm’s pool of replacement animals, while male dairy calves are sold.

Pure-breed male dairy calves do not naturally lay down a lot of muscle and so do not generally make good beef livestock. Many are sent to the abattoir for slaughter, typically between 5 and 30 days of age. This practice has prompted welfare concerns and means the industry must carefully manage the handling and transport of vulnerable young calves.

Potential solutions include artificial insemination of cows using only semen that will produce female calves. The use of this technology is limited because it reduces conception rates.

There is also growing public concern about the separation of cows and calves not sent to the abbatoir. The calves are typically taken within the first 12-24 hours and reared together in a shed, where they are fed milk or milk replacer. This is thought to maximise the amount of saleable milk and minimise disease transfer from cow to calf, particularly Johne’s Disease. However, recent research has found little evidence to support these practices.

Research has shown that calf-cow separation in the first day of life causes lower distress than abrupt separation at a few weeks of age or older, when the bond is stronger. This is not to say that early separation is not a concern. Rather, in the face of consumer demands for certain ethical standards, simple fixes may be hard to implement.

Topless animal welfare activists protest in Melbourne in February 2019 to raise awareness of what they claim is cruelty within the dairy industry.Ellen Smith/AAP

The message for consumers

Challenges to the dairy industry will take time and effort to address. Some, such as drought, are out of farmers’ control. Dry conditions and high cost of water, fodder and electricity have forced farmers to cull less productive dairy cows, leading to a decline in production.

The pressures, and associated debt, create intense stress for farmers, increase family tensions, and have negative flow-on effects throughout rural communities.Putting aside the political push for a regulated milk price, the key message for dairy consumers is clear. If we want our milk produced in a certain way, we must pay a fair market-based price to cover the costs to farmers of fulfilling our wants.


Trump’s trade wars are hurting farmers. Can Sonny Perdue keep them happy?

The remark reverberated across the country, prompting calls for his resignation from farm groups, angry editorials and even criticism from his own party. Critics said Perdue’s “go big or get out” line played into existing fears that the Trump administration is more interested in helping large corporations than the little guys. Perdue later said he was only acknowledging the current market reality.

Over the last year, Perdue has emerged as President Trump’s key evangelist in bruising trade wars, traveling the country to give folksy pep talks to frustrated farmers who have seen their incomes drop and exports hit hard by tariff disputes.

As talks between China and the United States on a possible first phase of a trade deal continue, Perdue could have some welcome news for this key constituency that helped elect Trump — a third round of bailout payments on top of the more than $26 billion already being spent.

Two economists at the Agriculture Department, who spoke on the condition of anonymity because they were not authorized to speak publicly, said a third round of payments for farmers increasingly is seen as inevitable, particularly if a trade deal with China is not reached soon. The amount has not been determined.

Perdue said Thursday he was “hopeful” that the pending trade deal would “supplant any type of farm aid needed in 2020.” But a third round of aid could be crucial to shoring up Trump’s support in rural America as the election looms, analysts say.

In more than two years in office, Perdue, a former Georgia governor, has perfected the art of flattering the president — a must for any high-ranking Trump official. He spent more time in a recent podcast with Trump’s former press secretary Sarah Sanders lauding Trump than discussing farmer woes. Trump has said that what he doesn’t know about farming, “Sonny teaches me.”

Mick Mulvaney, Trump’s acting chief of staff, said the White House thinks its support within the farming community is “overwhelmingly solid” in large part because of Perdue’s efforts.

“The president really likes people who know their stuff. And it’s been very clear from very early on that Sonny knows this industry, that Sonny knows the people, Sonny knows the issues, he knows how to communicate the issues,” Mulvaney said in an interview. “So there’s a certain level of expertise that immediately sort of, you know, moved him to the head of the class.”

As the head of the USDA, Perdue has been a disrupter in the Trump mold. He has worked to transform the sprawling $140 billion agency of nearly 100,000 employees by cutting staff, jettisoning research and rolling back directives on forest preservation and food safety.

Perdue has run afoul of Democrats in Congress, child poverty advocates and science groups, who worry about his skepticism of climate change — “I think it’s weather patterns, frankly,” he said recently — and moves they say have weakened the agency’s research wings.

Internally he’s been praised for his relentless promotion of the administration’s agenda. In recent days he’s been out touting China’s alleged commitment to more than double its agriculture purchases from the United States — a trade agreement celebrated by Trump but not yet committed to paper, much less signed.

But patience with Perdue’s sunny bromides is waning in rural America, where farm bankruptcies and loan delinquencies are rising. Before the “big get bigger” misstep, Perdue was booed in August in Minnesota over an ill-timed joke that suggested farmers were whiners.

“He’s supposed to be the head of the Agriculture Department, a true representative of farmers, but it felt like he was pretty out of touch with what was going on here in farm country,” said Darvin Bentlage, 63, a cattle producer in Golden City, Mo. A third trade bailout would help, he said, “but it won’t make us whole and we don’t want to be making our money at the mailbox. We’d rather be making it at the marketplace.”

Farmers worried

When he arrived at an early morning breakfast recently with produce growers just blocks from the White House, Perdue, 72, was all smiles, backslapping greetings and posing for photos. “Y’all know President Trump is trying to stand up [against] some of the practices that China has been engaged in for a number of years,” Perdue told them.

China and the United States have imposed tariffs on billions of dollars worth of goods since Trump imposed the first round of tariffs on China for allegedly unfair trade practices in July 2018, profoundly impacting the global economy.

Some of the farmers who had gathered to see Perdue said they were worried and they can’t hold out forever. Agriculture exports to China fell from nearly $20 billion in 2017 to $9 billion last year, according to the American Farm Bureau Federation, with farm bankruptcies rising 24 percent.

The USDA said in an August report that net farm income is forecast to increase slightly this year, but it’s still down more than 35 percent of its high of $136 billion in 2013.

Bob Mast, president of CMI Orchards, which grows apples, pears and cherries in Washington state, said that because of the trade war, he’s been able to ship only a quarter of the cherries he normally would to China.

“China typically takes the largest amount we grow, and they’re willing to pay premium for it,” Mast said. “We have gotten some relief money from government. That’s helped, but we need a resolution to it by cherry season next year.”

Experts say that many large farm operations — whom critics say benefited more from the first round of trade aid than mom-and-pop operations — may be able to hold out longer by tapping into their equity. Others won’t be as fortunate.

As Perdue himself often says, “You can’t pay the bills with patriotism.”

Still, most farmers remain in Trump’s camp. Trump’s job approval rating among rural Americans remains higher than the country as a whole — by 54 to 38 percent — according to a Washington Post-ABC News poll in September.

During his first speech to the USDA staff in April 2017, Perdue made a point of stripping off his suit jacket, tossing away his tie and rolling up his sleeves.

“Y’all need to know I was a farmer first,” he said to applause. “We’re going to get comfortable in working clothes.”

The next day, he rushed to the White House to help convince Trump not to immediately withdraw from the North American Free Trade Agreement, clutching charts and graphs to explain how farmers would be hurt.

“Secretary Perdue sat down with him and explained how important this agreement was to farmers,” said Zippy Duvall, president of the Farm Bureau and a fellow Georgian who has known Perdue for more than a decade. “That had a huge influence on the president.”

Perdue oversees an agency whose work affects almost every part of people’s lives — feeding millions through its food stamp program, advising farmers when and how much to plant, protecting America’s forests, formulating nutrition guidelines for schoolchildren and safeguarding the nation’s food supply.

He declined to be interviewed, but his staff sent a list of accomplishments, including deregulatory moves they said saved $157 million; opening new markets for beef in China, pork in Argentina and rice in Colombia; and a reorganization they say places a greater emphasis on trade and rural development. Farmers have praised his efforts to expand rural broadband and push for simpler rules for guest worker visas.

Critics have said there is a revolving door at Perdue’s USDA in which industry employees move in and out of the department. He has filled his agency’s upper ranks with lobbyists, industry executives and people with whom he has done business (Perdue is worth well over $5 million).

Perdue’s chief of staff until last year, Heidi Green, was a partner in Perdue’s shipping business. His undersecretary for trade worked for agricultural conglomerates. His senior adviser worked as a lobbyist for the pesticide industry association.

Meanwhile, morale at USDA, as measured by a respected survey, has plummeted amid staff shrinkage. Perdue especially angered employees with a plan to uproot workers at the agency’s National Institute of Food and Agriculture and the Economic Research Service and force them to either move to Kansas City or quit their jobs. Many voted to unionize, and at a meeting with Perdue this summer, they stood and turned their backs on him in protest.

Since taking over the USDA, Perdue’s mantra has been “Do right and feed everyone.” At the same time, his agency has tried to cut funding for Supplemental Nutrition Assistance Program, also known as food stamps, which helps feed 9.5 million families with children.

The proposal to limit SNAP beneficiaries has not gone over well with Democrats, who see it as an end run around Congress, which did not make such cuts when it passed the mammoth farm bill late last year.

“I’m not sure what the motivation was, but it’s wrong. Why would you address something we purposefully did not take up in the farm bill?” said Rep. Marcia L. Fudge (D-Ohio), chair of the House Agriculture subcommittee on nutrition, oversight and department operations.

Perdue’s staff said that the proposed changes would “make major strides in reining in dependence on government assistance.”

Chief consoler

As Trump’s reelection campaign looms, Perdue is expected to continue to play his role as Trump’s chief consoler to struggling farmers as well as pushing passage of the new U.S.-Mexico-Canada trade agreement. “They recognize that there’s going to be some short-term difficulties as we try and hammer out these agreements, to get fair trade with China,” Mulvaney said.

Perdue’s close relationship with the president paid off politically last year when Trump surprise-tweeted his endorsement of Brian Kemp, a Perdue ally, in Georgia’s gubernatorial primary. Kemp later won a narrow victory over Democrat Stacey Abrams.

Perdue remains a popular and a powerful force in Georgia politics, said Charles S. Bullock III, a University of Georgia political science professor. Perdue’s cousin, David, was elected to the U.S. Senate in 2014, and Sonny Perdue is likely to have a say as Kemp moves to fill the seat of Sen. Johnny Isakson, who is stepping down.

During his tenure as governor from 2003 to 2011, Perdue was an aggressive free-trade exponent, with the state opening trade offices in China, Brazil and France. Exports grew 77 percent, according to the state’s office of economic development.

Ethics questions followed him throughout his time as governor. He refused to put his agribusiness assets in a blind trust, and he was twice cited by the state’s ethics board — once for failing to report a trip on a private airplane owned by one of his family businesses, and once for $18,000 in excessive campaign donations.

Critics also point to a last-minute retroactive tax break that saved him $100,000 in 2005, as reported then by the Atlanta Journal-Constitution. Perdue and his supporters have said that the ethics criticism was politically motivated and the tax break benefited all Georgians, not just him.

“That he and Donald Trump would be close does not surprise anybody,” said DuBose Porter, a former state legislator and former chairman of the Democratic Party of Georgia. “I think their personalities and their vision of the world is very similar. They don’t think the rules apply to them and they see government as a way to enrich themselves and their friends.”

When he left Georgia for Washington, Perdue, a Baptist who once prayed for rain on the State House steps during a drought, was given a missionary’s send-off at a church where his son is now a pastor, according to an account in the Baptist Press. Perdue had told worshipers a few days before that God spoke to him and his wife and called them “to serve Trump in his Cabinet.”

Given how frequently Trump fires his Cabinet secretaries, it is no small political feat that Perdue has managed to hold on so far, said former agriculture secretary Dan Glickman.

“This is an administration where day-to-day no one knows what’s going to happen, and yet, there’s been no scandals. No talk of Sonny leaving. He seems secure in his job. And the president actually listens to him,” said Glickman, who headed the USDA for six years in the Clinton administration.

“The way he’s presented himself to Trump is as a problem solver on renewable fuel, on the trade war. I know Sonny’s not thrilled about how this impacted farmers. But he’s not been disloyal to Trump when talking about it. It’s a tight rope to walk.”


Wisconsin’s statehouse is at war over its dairy crisis.

In April 2019, Ryan Dunham sold the 50 dairy cows on his farm in Westby, Wis. Dunham, due to the challenging finances he faced from low milk prices.Peter Thomson/AP Photo/La Crosse Tribune

In April 2019, Ryan Dunham sold the 50 dairy cows on his farm in Westby, Wis. Dunham, due to the challenging finances he faced from low milk prices.Peter Thomson/AP Photo/La Crosse Tribune

In Wisconsin, one of the nation’s key battleground states for the 2020 presidential election, dairy is big business. But low milk prices and chronic overproduction are squeezing small- and mid-sized dairy farms, which are shutting down at a rate of more than two per day. Massive dairy operations, meanwhile, continue to proliferate, concentrating manure and causing tension with neighbors over putrid odors and fouled water. This week, these twin crises have inflamed a long-simmering squabble between Democratic Gov. Tony Evers and the GOP-controlled Wisconsin Senate.

 In January, Evers’ appointed Brad Pfaff to lead the state’s department of agriculture, trade, and consumer protection. Pfaff, who grew up on a Wisconsin dairy farm, had previously served as an administrator in President Barack Obama’s Department of Agriculture and deputy chief of staff to US Rep. Ron Kind (D-Wis.).

But in Wisconsin, the governor’s choices for cabinet posts like ag department chief are subject to approval by the full senate. And Evers faces a senate still stinging from the midterms: In 2018, he narrowly defeated GOP stalwart Scott Walker, who had served as governor from 2011 to 2018, and had gained national fame for his attacks on public-sector unions and his hot pursuit of the anti-tax and deregulatory agenda favored by his financial backers, the Koch brothers.

Still under GOP control, the senate has refused to vote on most of Evers’ cabinet picks, leaving them to serve as acting heads of their departments. And on Tuesday, the senate effectively fired Pfaff. It voted Pfaff out along party lines, 19-14—the first time the legislative body has voted to remove a governor’s cabinet pick in at least three decades. For now, Pfaff’s deputy agriculture director, who isn’t subject to approval by the senate, will run the department.

The Republicans’ complaints with Pfaff were two-fold. In July, Pfaff rebuked the senate for refusing to release $100,000 in allocated state funding for mental health services for farmers. Since milk prices started to slide in 2015, America’s Dairyland (Wisconsin’s official nickname) has seen about a quarter of its dairy farms fold. As the attrition grinds on, calls to a mental-health hotline for farmers have spiked, and there’s evidence of an uptick in farmer suicides (though precise data is hard to come by). “There’s no two ways about it: Republicans have chosen to leave farmers behind,” Pfaff said back in July, after Republican lawmakers declined to release the funds. Senate Majority Leader Scott Fitzgerald shot back that Pfaff’s comments were “flippant” and “beneath your position.” The senate ultimately released the funds in September. 

Pfaff had also been pushing through new rules on large dairy farms, forcing them to keep manure pits at least 600 feet from neighbors’ property lines (current regulations require a 350 foot setback). The dairy industry vigorously opposed by the changes, and the senate Republicans declared them “burdensome.” 

The Wisconsin Farmers Union, which represents small- and mid-sized farms, supports manure reform. According to Kara O’Connor, the union’s government relations director, the state’s manure pit regulations have not changed since 2006 and “are desperately in need of an update, because they’re deeply out of touch with the reality that’s unfolding in rural communities.” The number of massive dairies that confine several thousand cows has expanded steadily since the current rules were formulated, and “we have a lot of members who have expressed deep concerns about odor from these operations,” she said. 

The tension between Wisconsin’s governor and his legislature is playing out in the hothouse of national presidential politics. Sen. Fitzgerald, who spearheaded Pfaff’s firing, is now running for Congress. He has denounced impeachment proceedings against President Donald Trump as a “political witch hunt” and a desperate attempt to deny Trump a second term.

And a top Trump official has weighed in on Wisconsin’s dairy crisis. Responding to a reporter’s question about the plight of the state’s farms at the World Dairy Expo in Madison in early October, US Department of Agriculture Secretary Sonny Perdue declared that “in America, the big get bigger and the small go out…I don’t think in America we, for any small business, we have a guaranteed income or guaranteed profitability.”

Days later, Gov. Evers lashed out at Perdue. “He kind of put the pox on small farming in the state,” Evers told reporters, according to the Journal Sentinel. “Are they struggling? Absolutely. But I think at the end of the day we need to get behind them rather than saying, ah maybe you should go larger… I, frankly, resent that the Department of Agriculture secretary from the federal government came in and kind of lambasted them.”

Back in 2016, Trump won Wisconsin by fewer than 23,000 votes. Four years earlier, then-President Barack Obama took the state by more than 200,000 votes. According to New York Times electoral analyst Nate Cohn, Wisconsin is a toss-up for 2020, with former vice president Joe Biden and Sen. Bernie Sanders (D-Vt.) holding slim leads in polls over Trump, and Sen. Elizabeth Warren (D-Mass.) locked in a dead heat with the president. Warren and Sanders  have both called for policies that stabilize prices for farmers, an idea that’s increasingly popular in Wisconsin dairy country. Over the past two years, members of the Wisconsin Farmers Union and the more more industry-aligned Wisconsin Farm Bureau both voted to express tentative support for supply management—an idea embraced by Canadian dairy farmers but widely seen as radical in the United States.   

“Until recently, dairy farmers have been hesitant to support supply management because of this thought that ‘getting government involved’ was going to put them out of business,” O’Connor of the Wisconsin Farmers Union said. “But dairy farmers are walking up to the fact that the economic climate will put them out of business a lot more swiftly and efficiently than any government policy every has.” 


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