Archive for Dairy Industry

Dairy Outlook: October 2018

Current dairy markets are hinting at potential gradual increase in milk price into 2019. Global trade volatility continues to hinder widespread optimism.

The dairy sector, particularly Pennsylvania, has had a few weeks of some optimism along with continued concern. With the tentative agreement on a new North American Trade relationship with Canada and Mexico, the U.S. dairy industry may be poised to strengthen our export markets. While the agreement must still be approved by Congress, there is optimism that this agreement will pass, and eventually the U.S. dairy markets will reap the benefits. Nearby futures prices have not yet responded to this potential boost to exports because the provisions of the trade agreement will not take effect for at least 6 months. A price bump, due to this trade agreement, will probably be noticed in the fall of 2019.

Class III futures prices for the first 6 months of 2019 are up over a dollar compared to the first 6-month Class III prices of 2018. This is good news, especially considering the general oversupply of dairy markets. However, even with the nice boost in Class III prices, most farm gate prices are still below the cost of production in Pennsylvania.

The Penn State Dairy Extension Team’s cash flow work with dairy producers shows that the average farm gate price for January-June 2018 was $15.10/cwt. However, the range of farm gate prices was nearly $4.00/cwt (High of $17.00/cwt, low of $13.10/cwt). That variation in price occurred due to milk components, the type of markets to which the milk was shipped (mostly fluid, or mostly Class III and IV) and the level of extra location adjustment and marketing adjustment taken by the cooperative to which the milk was shipped.

Unfortunately, this has been a particularly challenging growing season, especially in saturated Pennsylvania. Starting with the miniscule harvest windows for small grain forages, forages have been tough to get harvested at optimal quality and dry matter. This has caused some quality and supply issues in the hay markets, causing statewide greater price fluctuations. The end of the season harvests for corn silage and grains are also proving challenging not only to get into fields to harvest, but quality issues are becoming an increasing concern. Though there are some drops in feed prices nationally, as seen in Table 1, Pennsylvania’s feed costs are currently not decreasing at the same pace. Hopefully this is a temporary fluctuation and not a long-term trend.

Income over Feed Cost, Margin, and All Milk Price Trends

Table 1: 12 month Pennsylvania and U.S. All Milk Income, Feed Cost, Income over Feed Cost ($/milk cow/day)

¹Based on corn, alfalfa hay, and soybean meal equivalents to produce 75 lbs. of milk (Bailey & Ishler, 2007)

²The 3 year average actual IOFC breakeven in Pennsylvania from 2014-2016 was $9.00 ± $1.67 ($/milk cow/day) (Beck, Ishler, Goodling, 2018).

Table 2: 12 month Pennsylvania and U.S. All Milk Price, Feed Cost, Milk Margin ($/cwt for lactating cows)

¹Based on corn, alfalfa hay, and soybean meal equivalents to produce 75 lbs. of milk (Bailey & Ishler, 2007)

²The 3 year average actual Milk Margin breakeven in Pennsylvania from 2015-2017 was $12.33 ± $2.29 ($/cwt) (Beck, Ishler, Goodling, 2018).

Figure 1: 12 month Pennsylvania Milk Income and Income over Feed Cost ($/milk cow/day)

²The 3 year average actual IOFC breakeven in Pennsylvania from 2015-2017 was $9.00 ± $1.67 ($/milk cow/day) (Beck, Ishler, Goodling, 2018).

Figure 3: 24 month Actual and Predicted* Class III, Class IV, and Pennsylvania All Milk Price ($/cwt)

*Predicted values based on Class III and Class IV futures regression (Gould, 2018).

Table 3: 24 month Actual and Predicted* Class III, Class IV, and Pennsylvania All Milk Price ($/cwt)

Month Class III Price Class IV Price PA All Milk Price
Sep-17 $16.36 $15.86 $19.20
Oct-17 $16.69 $14.85 $18.80
Nov-17 $16.88 $13.99 $18.90
Dec-17 $15.44 $13.51 $18.40
Jan-18 $14.00 $13.13 $17.00
Feb-18 $13.40 $12.87 $15.90
Mar-18 $14.22 $13.04 $16.00
Apr-18 $14.47 $13.48 $16.40
May-18 $15.18 $14.57 $16.70
Jun-18 $15.21 $14.91 $17.00
Jul-18 $14.10 $14.14 $16.20
Aug-18 $14.95 $14.63 $16.40
Sep-18 $16.09 $14.81 $18.70
Oct-18 $16.52 $14.97 $19.68
Nov-18 $16.71 $15.33 $19.72
Dec-18 $16.63 $15.51 $19.60
Jan-19 $16.42 $15.49 $19.33
Feb-19 $16.09 $15.48 $19.26
Mar-19 $15.90 $15.53 $19.33
Apr-19 $15.92 $15.67 $18.70
May-19 $16.01 $15.86 $18.74
Jun-19 $16.00 $15.95 $18.88
Jul-19 $16.11 $16.13 $19.15
Aug-19 $16.21 $16.24 $19.26

*Italicized predicted values based on Class III and Class IV futures regression (Beck, Ishler, and Goodling 2018; Gould, 2018).

To look at feed costs and estimated income over feed costs at varying production levels by zip code, check out the Penn State Extension Dairy Team’s DairyCents  or DairyCents Pro  apps today.

Data sources for price data

All Milk Price: Pennsylvania and U.S. All Milk Price (USDA National Ag Statistics Service, 2018)

Current Class III and Class IV Price (USDA Ag Marketing Services, 2018)

Predicted Class III, Class IV Price (Gould, 2018)

Alfalfa Hay: Pennsylvania and U.S. monthly Alfalfa Hay Price (USDA National Ag Statistics Service, 2018)

Corn Grain: Pennsylvania and U.S. monthly Corn Grain Price (USDA National Ag Statistics Service, 2018)

Soybean Meal: Feed Price List (Ishler, 2018) and average of Decatur, Illinois Rail and Truck Soybean Meal, High Protein prices, National Feedstuffs (USDA Ag Marketing Services, 2018)


Bailey, K. and V. Ishler. “ Dairy Risk-Management Education: Tracking Milk Prices and Feed Costs ”. Penn State Extension. Accessed 9/20/2017.

Beck, T.J., Ishler, V.A., & Goodling, R. C. 2018. “Dairy Enterprise Crops to Cow to Cash Project,” the Pennsylvania State University. Unpublished raw data.

Dairy Records Management Systems. “DairyMetrics Online Data Report system”. Accessed 9/14/2017.

Gould, B. 2018. “Mailbox Price Forecaster”. Dairy Marketing Tools website. University of Wisconsin-Madison. Accessed 10/8/2018.

Ishler, V. “ DairyCents Mobile App ”. Penn State Extension. #App-1010.

Ishler, V. “ DairyCents Pro Mobile App ”. Penn State Extension. #App-1009.

Ishler, V. “Feed Price List”. Personal Communication. Accessed 10/8/2018.

Microsoft 2016. “Forecast.ets function”, Office Help Website .

USDA National Ag Statistics Service, 2018. Agricultural Prices, Quick Stats version 2.0. Accessed 10/8/2018.

USDA Ag Marketing Serivces, 2018. Milk Marketing Order Statistics. Accessed 10/8/2018.

USDA Ag Marketing Services. 2018. “National Feedstuffs: Soybean Meal, High Protein”. Summary of USDA AMS Grain Reports. Accessed 10/8/2018.


How to get a holistic view of the dairy world?

IFCN, one of the leading Research Networks in the dairy industry, has released the IFCN Dairy Report 2018 on October 8. In this Report, IFCN covered 115 country profiles which represent 98% of the total global milk production. This Report provides comparable, standardized data on several indicators or national dairy sectors with a focus on the dairy value chain.

Cost of Milk Production on average size typical farms in 2017

On the farm level, IFCN has analyzed 177 typical farm types in 53 different countries. So the complexity of global dairy farm economics got simplified. Overall the IFCN Dairy Report 2018 makes it possible to obtain a comprehensive overview to generate information at farm level and to benchmark.

For the first time, the IFCN Dairy Report contains indicators on the sustainability of economic, social subjects and environmental issues. “The best way to improve sustainability of milk production is to benchmark your farming systems with others”, said Dr. Torsten Hemme, Managing Director of the IFCN.

Latest results show that in 2017, dairy farm numbers decreased by 1% and milk production per farm increased by 3,8%. Globally cost of milk production varied in a wide range from 20-105 USD/100 kg standardised milk in 2017. Based on the IFCN long-term monitoring (since 2000) the IFCN Dairy Report 2018 will provide you with the key drivers for this pattern.

The IFCN Dairy Report 2018 adopt viable information to support organizations better in their strategy and business decision process. With this report and our commitment to excellence, you will get real gold nuggets for your business.

See full report here

IFCN specializes in the dairy market analysis and is one of the key players when it comes to dairy data, knowledge and inspiration. Founded by Dr. Torsten Hemme, it serves a wide range of customers, researchers, and partners around the globe. For further inquiries, you may visit our website or e-mail us at


CDN Board of Directors Executive Summary – September 2018

The 2018 Dairy Cattle Improvement Industry Forum achieved record attendance with over 120 attendees including industry leaders associated with dairy cattle improvement organizations in Canada. This year’s event was co-hosted by Valacta and held at the Château Vaudreuil near Montreal, Quebec, which provided a fantastic location and facility for participants to interact and discuss the outstanding program of quality topics and speakers. Other meetings surrounding this year’s Forum included the 23rd Annual General Meeting of Canadian Dairy Network (CDN) as well as meetings of the CDN Board of Directors. The following is a summary of key actions and highlights of those meetings.

  • Given the pending partnership between CDN, CanWest DHI and Valacta, which is targeted for early 2019, the CDN membership agreed it was important to have continuity and stability to achieve this pivotal direction for the industry. For this reason, the CDN voting delegates passed a motion to extend the current term for each member of the Board of Directors by one year. At a meeting of the Board of Directors following the AGM, all officers and other appointments were also maintained for the coming year. Therefore, the CDN Board includes Norm McNaughton (from A.I.) as Chairman, Ed Friesen (from Canadian DHI) as Vice-Chairman, Barbara Paquet also representing Canadian DHI, Harry Van der Linden and Gilles Côté from breeds, Robert Wright and Bill Young from the A.I. sector, Gert Schrijver from Dairy Farmers of Canada (DFC) and David Chalack as a Director-at-Large. As for recent years, Ed Friesen was re-appointed as the CDN representative on the DFC Board of Directors, Gert Schrijver was re-appointed as Chairman of the DairyTrace Advisory Committee, which also includes Robert Wright and Gilles Côté, and David Chalack was reappointed as the CDN Board liaison on the DairyGen Council.
  • The audited financial statements for 2017-2018 were presented during the CDN AGM and subsequently approved by the membership. The year showed a net surplus of operational revenue compared to expenses of $143,118, which increased members’ equity to $442,834 as of March 31, 2018. Operational revenue was +1.7% higher than budgeted at $2,142,545 while expenses were 5.1% below budget totalling $1,999,427, mainly due to lower staff costs. 2017-2018 also marked the first year for CDN to report activities specifically related to the development of the DairyTrace Program, which had revenue and expenses balanced at $165,382. The budget for 2018-2019, as approved by the CDN Board of Directors, was presented to the membership showing a 2.1% increase in operational expenses to $2.042M. Targeting a balanced operational budget for 2018-2019 and planning for an expected reduction in revenue from other sources, the CDN Board approved a 3.5% increase in member funding for evaluation services to $1.927M. For DairyGen activities, revenue remains consistent with last year at roughly $430K and the carryover from year to year is expected to exceed $750K to plan for pending projects submitted for government funding under Dairy Research Cluster 3.
  • The Board considered continued correspondence received from industry partners related to the motion approved in July 2018 to no longer publish Direct Genomic Values (DGV) for any animals with a target implementation date of April 2019. CDN management provided an update on actions taken by CDN including the planning of a significant time slot being allocated for presentation of data analysis and continued discussion during the Open Industry Session to be held in St. Hyacinthe, QC on October 24, 2018, which will be followed by a meeting of the Genetic Evaluation Board (GEB) the next day. In the end, the Board of Directors agreed to allow time for the analysis and discussions to continue via the planned process and to consider any subsequent recommendations that the GEB may bring forward to the next Board meeting in December.

On another topic related to discussions of CDN advisory committees, the Board reviewed actions and recommendations stemming from the Industry Standards Committee (ISC) meeting held on September 5, 2018. The topic of electronic data collection was a major agenda item and the following key points were brought forward to the CDN Board:

  • There seems to be an opportunity for sensor data from at least some robotic systems to be used for herd management information and possibly publishable lactations.
  • Accuracy of sensor data is highly dependent upon the frequency and method of calibration (i.e.: individual cow versus bulk tank averages).
  • There may be a need to implement a strategy to randomly confirm accurate cross referencing within herd between herd management ID and registration number.
  • Routine bulk tank calibration will require producer permission for DHI to access milk payment analysis results controlled by the provincial dairy organizations.

In preparation for the launch of an electronic data collection system, the ISC recommended that CDN assess the current process for assigning lactation publishability status and prepare a proposal for implementing the previously approved concept for labelling lactation records based solely on data collected electronically, including the publication of three distinct parts of a lactation record (i.e.: only kg and BCA milk, addition of kg and BCA for fat and protein, addition of herdmate deviations for milk and components). The Board approved this direction with the understanding that the ISC will plan another meeting early in 2019 to consider the assessment to be completed by CDN with industry partner involvement.

  • Management also provided an update on progress achieved towards the development and implementation of DairyTrace under the vision that CDN becomes the national administrator for dairy cattle traceability. The development by ATQ of the DairyTrace database and associated user interface has continued well as members of the DairyTrace Advisory Committee have completed the process of reviewing and defining the business requirements for dairy cattle traceability. In addition, CDN management has progressed on discussions with other organizations regarding the development of data exchange protocols required for dairy cattle traceability under DairyTrace.
  • The Board of Directors received an update on the status of the development of Compass, in partnership with Holstein Canada, as a genetics-based decision tool for Canadian dairy producers. Given a recent review of the software functionality and the complexity of the technical developments at the root of the decision recommendations, the planned launch date is now expected for some time in 2019.
  • To conclude CDN’s 23rd Annual Meeting, as President of WestGen, Eric Iverson extended an invitation for all industry partners to attend the 2019 Dairy Cattle Improvement Industry Forum and CDN AGM to be held in the Western Canada during the week of September 16, 2019.
  • The CDN Board of Directors confirmed the date of its next meeting as Monday, December 10, 2018 in Guelph, Ontario.

For further clarification regarding these decisions, please feel free to contact any member of the CDN Board of Directors or the management staff.


U.S.-China trade war could cost 16,000 in dairy jobs alone

A trade war scenario of China thumbing its nose at U.S. dairy products could cost U.S. producers $3.4 billion a year and nearly 16,000 jobs over the next five years, according to a study released Monday by Texas A&M AgriLife Extension Service.

The good news: The recently announced U.S.-Mexico-Canada trade agreement likely has saved U.S. dairy’s top market, Mexico.

That’s key because Mexican imports of U.S. cheese alone are predicted to rise from $318 million in 2018 to more than $398 million by 2022 as Mexicans increasingly frequent U.S. restaurant chains and embrace U.S.-style foods. Canada is the second leading importer of U.S. dairy; China is the third.

Researchers completed the study at the request of the National Milk Producers Federation in September, before the USMCA was announced as a trilateral replacement to the 25-year-old North American Free Trade Agreement. Loss of both the Mexican and Chinese export markets could have cost the U.S. dairy industry up to $6.58 billion a year and more than 32,000 workers.

Texas is the nation’s sixth leading producer of dairy, after California, Wisconsin, New York, Idaho and Pennsylvania; exporting $247 million worth of milk products, some 80 percent of which goes to Mexico.

RELATED: After lengthy fight, oilfield landfill to be built near Texas town of Nordheim

Citing threats to national security, President Donald Trump in March announced worldwide tariffs on aluminum and steel and in May removed the exemption for trading partners including the European Union, Canada and Mexico. The tariffs prompted a slew of retaliatory duties on everything from apples to whiskey. Mexico enacted tariffs of 25 percent on imports of U.S. cheese; China put up tariffs on dairy products consisting mainly of whey, dry milk and cheese.

Luis Ribera, an agricultural economist with the university’s Center for North American Studies, said that while the situation with Mexico “was basically resolved,” producers still had reason to fear losing the Chinese market.

The Chinese middle class has been growing, and with it the nation’s appetites for dairy products including cheese and whey for use in baby formula. China in 2017 imported $577 million in dairy markets, making it the third leading market for U.S. dairy. Both the Mexican and Chinese dairy markets have fallen 42 percent since the Trump administration enacted the tariffs.

Ribera’s team weighed three scenarios.

The first was a natural economics-at-play situation where shoppers in the two nations adjust to higher prices by buying less. Ribera likened it to a consumer faced with a 50 percent price hike for avocados making less guacamole and avocado toast but not foregoing the fruit completely.

A second scenario mirrors what has already been seen, which is importers for political reasons either sourcing elsewhere or just stocking less of the commodity.

“In China, it makes a lot of sense because it’s centralized. So everything that’s imported, it’s the government that has the decision,” Ribera said. “That’s what we’re seeing basically with soybeans right now. Even though they need the soybeans, even though they cannot purchase more soybeans from Brazil, they’re still not trying to buy from the U.S.”

In a third, and most dire, scenario, almost all of the two countries’ U.S. dairy imports are replaced by imports from competing places such as the New Zealand and the EU, which is expected to reach a free trade agreement with Mexico by 2020.

“It was basically we lost the market,” he said.


Australian dairy farmers prepare to cull up to 15 per cent of herd as grain prices skyrocket

Up to 15 per cent of the national dairy herd could be culled because grain is too expensive, farmers have warned.

The South Australian Dairy Association says the price of grain has doubled, leaving farmers little choice but to send cows to the abattoir.

SADA president John Hunt says the lack of feed in Australia means the numbers just don’t stack up and dairy farmers are losing money.


Source: ABC News

Fonterra CEO Miles Hurrell responds to claims co-op is a failed experiment

This week, the Herald published an article by industry observer Tony Baldwin, which argued in some depth that Fonterra has been a failed experiment. What follows is a response from Fonterra CEO Miles Hurrell to that article.

I took the job of CEO of Fonterra because I believe in the Co-op’s potential and the positive difference it makes to New Zealand and consumers around the world.

It’s clear the challenge is big and we don’t always get everything right. I’ve been open about that with our farmers, unit holders, employees and the New Zealand public. Now our focus has shifted to rolling up our sleeves and getting on with the job.

We are well underway with our business review, which will deliver a balanced portfolio of high-performing investments, aligned to strategy and delivering returns across the short, medium and longer term. We are also undertaking a critical review of our forecasting capability, so that farmers and investors will know more clearly what to expect from us.
Like with any big task, we have to start somewhere and that’s exactly what we’re doing.
It hasn’t stopped people commissioning their own reports and there’s no shortage of vested interests and opinions on where we should go from here.

I understand Kiwis will have an opinion about us. I’m totally okay with that. It’s to be expected when you’re New Zealand’s largest company and so many people are relying on you to get things right.

I have a team of 22,000 passionate and committed people around the world who come to work every day to do our farmers and New Zealand proud – taking our milk to the world and competing against the really big players on the international stage.

As a proud Kiwi, I do hope that New Zealand will get in behind us and be part of something positive.

We’ve never asked for a handout from the public, but we do need a level playing field to shore up the longer-term contribution of the dairy industry to the country and give New Zealand owned dairy companies a fair go on the international stage. New Zealand needs to back Kiwi businesses, big and small, so we can get the most from our dairy industry.
It’s already delivered a lot for the country and Fonterra has been an important part of this.

Last year, alone, we injected over $10 billion into the New Zealand economy and we provide jobs here in New Zealand for around 12,000 Kiwis – from the top of the North to the bottom of the South. The price our farmers earn for their milk is now comparable with their peers in Europe and the US – before Fonterra, our farmers got less than half. That’s good for farmers but it is also good for the country because for every dollar a farmer earns, they spend up to 50 cents in their local community.

Our value-add business, which didn’t exist in any great scale in 2001, is now bigger than the rest of the New Zealand dairy industry combined, and makes up close to half of our volumes. Our Foodservice business is now a $2 billion a year operation.

More needs to be done to lift our performance. That’s my priority. And I hope New Zealand can and will back us in building Fonterra into the national champion we all want it to be.


Canadian dairy farmers angry at Trump, terms of trade deal

Workers milk cows at Armstrong Manor Farm in Caledon, Ontario. Computers measure how much milk each cow produces, then shut off the milking process when the flow decreases below a certain amount. Credit: Jason Margolis/The World

The new NAFTA agreement covers nearly 2,000 pages. Its 34 chapters address a wide range of issues, including digital trade, textiles, intellectual property and the environment. But if you were listening to President Donald Trump recently, you might’ve thought the agreement boiled down to one thing: Canadian milk. 

The president has been railing against Canadian dairy farmers in rallies and Tweets for months. 

The new trade agreement between the US, Canada and Mexico, called the USMCA, still needs approval by the legislative bodies in each nation. Under the newly-reached agreement, Canadian dairy tariffs wouldn’t go away entirely, but US dairy farmers would get more access to Canada, a worrying prospect for Canadian dairy farmers.

Phillip Armstrong’s family has been farming the same piece of land in Caledon, Ontario, since 1869. Obviously, dairy farming has evolved a lot since then. It’s also made huge leaps since Armstrong graduated college 37 years ago. Today, each of his 380 cows wears a high-tech collar.

“The collar that they have on them is ID, but it also measures her eating habits, on an individual cow. It measures her rumen, the stomach movements to make sure that that’s going well. It measures her lying down time, it measures her activity,” Armstrong says.

Combine that technology with better breeding and nutrition, and Armstrong says his cows are nearly twice as productive as four decades ago. This might seem great, but it’s also created a problem for the world’s dairy farmers: They’re producing too much milk. To keep things in check, Canada has a system. Put simply: They match supply with consumer demand.

“Each farm has a quota and that’s our share of the Canadian market,” says Armstrong.  

As part of its supply management system, Canada also places high tariffs on foreign dairy imports, up to about 300 percent. Canada does let in some American dairy before tariffs kick in, and as part of the updated trade deal, Canada would open up 3.6 percent more of its market to American dairy. 

“And you go, ‘OK, well, it’s not much,’” Armstrong says. “But that’s growth in income that we’re giving up that allows us to modernize, to expand and everything like that. So, it’s frustrating for us as dairy farmers.”

Canadian dairy farmers have also given up more access to Europe, New Zealand and Australia through other recent trade deals.

The dairy trade between the US and Canada is a sliver of overall trade between the two nations. And Armstrong is annoyed that President Trump singled out Canadian dairy as the major problem.

“He was distorting the facts or maybe didn’t understand the facts, I don’t know,” Armstrong says. “And he said we were hurting their dairy farmers. Well, the Americans had a $600 million surplus with us. But he got into his head that we were mistreating their farmers.”

Many American dairy farmers agree with President Trump and applaud him for standing up for them. They point out that Canada also recently redefined some of its products — protein concentrates called ultrafiltered milk — and created price supports to effectively shut out American products. The new category — called Class 7 — will be eliminated under the new NAFTA agreement. 

The pain on American dairy farms is real. Thousands of small American dairy farms have shut down in recent years.  It’s not all because of Canada though, far from it. American farmers have been squeezed out by consolidation, corporate agriculture, global competition and low prices. People are also simply consuming less milk.

“A lot of milk, in the past, has been dumped because it couldn’t be processed in an appropriate amount of time, or sold at an extreme discount,” says Brian Gould, a professor of agribusiness at the University of Wisconsin. “It’s just too much milk. We have too much milk in the US.”

While US dairy farmers may be in a bad place, Gould says the US shouldn’t be telling Canada how to manage its internal agriculture.  

“We have no right to do that. I really think we’re on thin ice when we demand that they get rid of their quota system.”

Gould says to think of the reverse: Canada telling the US to dismantle its system. The US government sets a minimum price for milk and also provides subsidies to American dairy farmers. 

And, the US has its own high tariffs on certain products — the US sour cream tariff, for example, is 187 percent.

“On other cheeses, you have like 50 percent tariffs,” says Graham Lloyd, the CEO of the Dairy Farmers of Ontario.

Lloyd says the whole milk spat with Canada is really about politics.

“Wisconsin being a significant, important state to the Republicans, namely Speaker [Paul] Ryan, and it was a state that carried Trump, became a political lightning rod,” Lloyd says.

Back on the farm, Armstrong says the new NAFTA agreement doesn’t address the fundamental problem: American farmers are producing too much milk. And Armstrong believes opening a little bit more of Canada won’t make a dent in that.

“I feel for the dairy farmer in the United States. I mean, it’s got to hurt,” Armstrong says. The new trade agreement, he says, “is going to hurt us here, but it has no impact on their well-being at all.”

Again, plenty of Wisconsin and New York farmers see things differently. They’re glad to have more access to Canadian markets.  Still, there’s an ironic twist here: Many American dairy farmers and organizations are actually now looking into a supply management system of their own … similar to Canada’s.


a2 Milk becomes first mainstream dairy brand to ditch plastic bottles

Product will be sold in 100% recyclable FSC-certified paper-based cartons

The first mainstream fresh dairy brand to switch from plastic milk bottles to cartons goes on sale in UK supermarkets on Wednesday, in the latest drive to reduce the use of single-use plastics.

With millions of plastic milk bottles disposed of daily in the UK, a2 Milk is switching to 100% recyclable paper-based cartons that use 80% less plastic than bottles and carry the Forest Stewardship Council label. That means they are made with pulp from FSC-certified forests and/or recycled sources.

The UK uses 38.5m plastic bottles every day, of which 15m are not recycled, and they are now standard packaging for mass-produced cows’ milk sold in UK supermarkets.


Source: The Guardian

Coles criticised over milk levy fund

Queensland dairy farmers have called the Coles levy a “ridiculous PR stunt” and Woolworths’ Drought Relief milk range a “farce”.

Coles has come under fire from Queensland dairy farmers for refusing to distribute cash from its 10¢-a-litre private-label milk levy through processors.

When Coles announced the 10¢-a-litre price increase on three-litre bottles of private-label milk last month it said 100 per cent of the cash would be donated to farmers through the National Farmers Federation’s drought relief fund. Coles has had a partnership with the NFF since 2012.

However, the NFF has quietly declined to administer the funds, prompting Coles to this week establish a Dairy Drought Relief Fund and invite farmers to apply for grants.

Coles has appointed PwC as an independent auditor to oversee the application process and verify that funds raised are allocated to drought-affected dairy farmers.

The Queensland Dairyfarmers Organisation has called the levy a “ridiculous PR stunt” and said there was a simpler way for Coles to get the money back to farmers – by paying its private-label milk suppliers, Norco and Saputo.

“By refusing to engage with the two processors of Coles private label, Coles is ensuring they can pull the levy at an time, irrespective of whether farmers are still being affected by drought,” said QDO vice-president Matthew Trace.

A Coles spokesman said that after consulting with the NFF and other industry stakeholders, it was decided that a fair, efficient and direct way to distribute the funds was to set up the Coles Dairy Drought Relief Fund.

“As the QDO is aware, the Coles Dairy Drought Relief Fund is independently audited and Coles has committed to raising money for the fund through a 30¢ increase on the price of our three litre own brand milk until the end of the year,” he said.

The QDO has also denounced Woolworths’ new “Drought Relief” milk range, which hit the shelves this week, as a “farce”.

The new range is priced at $1.10 a litre, $2.20 for two litres and $3.30 for three litres. The extra 10¢ a litre will be distributed to drought-affected dairy farmers through Woolworths’ supplier, Parmalat, overseen by a committee that includes an independent auditor.

The QDO has called for milk levies to be applied across all brands and all milk bottle sizes nationwide to maximise funds raised. However, Coles and Woolworths believe that by applying the levy to a dedicated brand or particular size of bottle, they are giving consumers choice to support farmers or not.


Hopes for a Chinese cash cow in France milk country sour

The opening of a Chinese-owned infant milk powder plant in a small town in the Brittany region of western France in 2016 was heralded as an economic saviour for the region and a win for French dairy farmers.

The €170 million (US$196 million) Carhaix factory would provide some 120,000 tonnes of high quality powdered milk a year to China, where demand for foreign infant milk products has soared after a years of food scares.

France’s biggest dairy cooperative Sodiaal signed a 10-year contact with Synutra, China’s third largest baby milk formula producer, to be the plant’s leading supplier. It would collect 288 million litres of milk a year from 800 farms in Brittany and beyond.

“No infant milk formula company in the world can produce such quantities,” Synutra France CEO Christian Mazuray said at the time.

But now Sodiaal, whose brands include Yoplait, Entremont and Candia, is negotiating with Synutra to purchase part of the Carhaix plant to recover its upfront investment.

Sodiaal confirmed plans in August, but has been tight-lipped about its relationship with the Chinese firm.

French media have otherwise painted a partnership soured by unpaid bills and milk formula exports to China that were 50 per cent less than forecast.

“The pitiful failure of the Chinese in Brittany.” declared La Croix newspaper.

“Dream becomes a nightmare,” reported Ouest-France.

Attempts to obtain comment from Synutra were unsuccessful.

“There will be no negative impact either on the level of collection, the price of milk or the shares,” Sodiaal’s president Damien Lacomb told Ouest-France last month in a bid to quell farmers’ fears about the future.

Beyond that, the cooperative, which describes itself as an organisation governed by and for its 12,500 producers, has revealed nothing more concrete about its plans – and French farmers are anxious.

“The Chinese mirage Synutra disappeared … and it was predictable!”, exclaimed a newsletter of the eastern France branch of the agricultural union, Coordination Rurale (CR).

“We are concerned about the pertinence of such a project, especially given the glaring lack of transparency and information about the move and what the future holds,” said Véronique Le Floc’h, CR’s secretary general and head of the National Organisation of Dairy Producers.

“The eventual repurchase of a production facility with no commercial outlet will inevitably impact the cooperative and the farms.

“What will be demanded of producers in the event of that?”

A report in Le Monde speculated that the Carhaix buy-back was part of a strategy for the French milk giant to sell to China direct.

But that may not be as easy at it sounds.

“To enter the Chinese market, you need Chinese partners”, said Pascal Nizan, a milk farmer representative for Sodiaal in Brittany.

He also said the current situation needed to be analysed in context: Synutra represented only 5 per cent of Sodiaal’s total milk output.

Elsewhere, farmers from a Normandy dairy cooperative have also complained about Synutra, after exports of growth milk under the Candia brand fell by almost a half since last year.

Synutra halted exports from Les Maîtres Laitiers du Cotentin (Cotentin Dairy Masters) factory late last year on the grounds it had discovered protein residue at the bottom of packaging.

Some observers speculated that Synutra could be seeking ways to reduce its presence in France, for reasons that have not been made clear.

“This Chinese group would not seem to be the partner of choice,” claimed an article in the agri-food industry magazine, Process Alimentaire, which cautioned other French dairy co-operatives hoping for a slice of the lucrative Chinese market.

China has been a major importer of dairy products for 25 years and is now the world’s biggest importer of such goods. The Carhaix plant was billed as China’s largest foreign investment in the milk processing sector.

But Le Floc’h, a cattle breeder in Elliant, said farmers warned elected representatives and Sodiaal directors early last year of the “risk of seeing the Chinese abandon their orders” in Carhaix.

However, Sodiaal she said, reassured unions there was no such risk because “Sodiaal had a 10-year contract with the Chinese, and that the Chinese would not invest then just leave”.

Furthermore, concerned farmers were told they should stop worrying as they would “happily benefit” in the future from the capital gains generated by this agreement.

“Unfortunately, it is clear the fears expressed at the time have proven true much earlier than imagined.”

The farmers’ union is demanding a meeting with Sodiaal’s board of directors and a referendum on its bid for the Carhaix plant.

“We have been left in the dark, as rumours run wild and anxiety about the affair mounts,” said Marie-Andrée Luherne from the National Federation of Milk Producers.

“We, the milk producers, are the main ones affected after all.”

She said farmers were still reeling from January’s salmonella contamination scandal which saw Lactalis withdraw 12 million boxes of powdered baby milk from supermarket shelves, affecting 83 countries.

“Now once again producers are paying the price,” she told Terra, Brittany’s weekly farming journal.

“All farmers (in western France) are extremely worried about the possible impact on prices paid.”


To be truly successful, Canadian dairy farmers need more than Ottawa’s money

They may not know it yet, but the United States-Mexico-Canada Agreement (USMCA) could become the watershed moment for which Canadian dairy farmers have been waiting. Prime Minister Justin Trudeau’s government has committed to compensating the dairy sector for either lost sales, higher per-unit costs or the loss in value of quotas. The government has been clear on intent, but woefully short on details.

What we can be sure of, however, is that the amount the federal government will come up with won’t be to farmers’ liking. But giving billions away in compensation would be more damaging to farmers than the effects of the trade deal itself. If the Trudeau government really wants to support the sector in its pursuit of a brighter future, it should think beyond simply compensating for losses that do not actually exist.

The quota system itself has artificially created wealth for a small group of farmers. By restricting production and suppressing competition at the border, dairy farmers who received quotas for free when the system was established almost 50 years ago, have accumulated assets worth more than $5-million on average. For every litre of milk produced, dairy farmers in Canada receive 72-per-cent more than the world average price.

As a result, the average family income for dairy farmers exceeds $160,000, which is well above the Canadian average. Dairy farmers are not part of an underprivileged group – far from it. Farmers do work punishing hours and should be much-admired for the work they do for all of us, but many other Canadians put in the same amount of work and contribute equally to the economy.

But for dairy farmers, wealth and salaries are theatrically inflated by a highly protectionist system. Compensating affluent farmers when many other Canadians remain food insecure would be a political hard-sell.

A sense of entitlement and the belief that the system is real is so entrenched in the sector that it makes it impossible to have challenging conversations about its future.

With supply management, the thinking has always been based on our own domestic needs. Obviously, allowing more imports can only be perceived as losses for the industry instead of an opportunity to expand and look for market openings. The USMCA adds to the pressure generated by two other trade agreements signed in the past few years. According to Dairy Farmers of Canada, market-share losses from recent trade deals with Asia, Europe, and now North America, total 18 per cent, an amount worth $1.8-billion to milk producers.

Given that supply management is about producing what the domestic market needs, that would equate to almost 1,800 dairy farms we no longer need. It is a zero-sum game environment, with very few conversations about how to repurpose these farms.

Dairy farmers desperately need to become more market-focused and in sync with an increasingly fragmented market. With more allergies, intolerances or different culinary traditions and tastes, consumers are looking for different food products. Imagine blue moon, banana cream or black cherry low-fat, lactose-free milk. These exist, but not in Canada. Vodka made from milk is also a product whose popularity is increasing, but other countries have beaten us to the punch.

The Canadian economy needed this deal, as supply management represents only 1 per cent of gross domestic product, so signing with the United States and Mexico was critical. But before we make senseless decisions on how to support our dairy sector, a clear vision and strategy for its future is imperative, with a forward-looking focus on both domestic and foreign markets.

The Canadian Dairy Commission will need to entice our dairy farms to become more competitive by changing the pricing formula that has been used to compensate farmers. Instead of going with averages, it should create high-performance benchmarks. Secondly, a quota system for export markets should be put in place that would allow new entrepreneurs, and new ways of thinking, to enter the market. And finally, as other countries have done before us, an exit program should be created, as soon as possible, to encourage farmers who don’t see themselves participating in an open economy. Not everyone wants to compete, but this should not be at the expense of hard-working taxpayers.

All of this can be achieved with minimal subsidies. At present, Canadian farmers are in fact less subsidized than American farmers, but just barely. In Canada, 9.6 per cent of all farm revenues are subsidized compared to 9.9 per cent in the United States, according to the OECD. In Australia, where a similar supply management scheme was dismantled in 2000, only 1.7 per cent of general farm revenues are subsidies. Subsidies can help, but only for a while, and should be considered a stop-gap for farmers, not an industry norm.

Without these measures, any compensation given to dairy farmers can only be considered agricultural welfare, and our dairy farmers deserve better. Canadians expect more. This is the only way we can keep some of our Canadian dairy farms.


Financial blow for Fonterra farmers as expected income falls by up to $78,000

Fonterra farmers will be as much as $78,000 poorer this season than they expected following the latest drop in the farmgate milk price forecast.

Fonterra has cut its 2018-19 forecast farmgate milk price from $6.75 per kilogram of milksolids to a range of $6.25-$6.50.

Chief executive Miles Hurrell said milk supply was growing, and despite a rise in Chinese demand for whole milk powder, there was still a mis-match between supply and demand.  

“I know how hard it is for farmers when the forecast farmgate milk price drops, but it’s important they have the most up to date picture so they can make the best decisions for their farming businesses.”

Just over a month ago the dairy giant dropped the forecast from $7 to $6.75.

At the lower price, farmers with the average milking herd size of 414 will be $78,000 less well off than they thought they would be, at $6.50 they will receive a $39,000 reduction in expected income.

Federated Farmers dairy group chairman Chris Lewis said the cut would have a direct impact on farmers and the wider community.

“Farmers will hold back from committing to upgrading infrastructure. This comes off the back of rocketing fuel prices as well.”

Lewis said it was not a good look for Fonterra.

“A good communications strategy is to get the bad news over in one hit, but this follows a cut only six weeks ago. The new CEO and chairman have got a lot of work to do,” Lewis said.

He pointed out that whole milk powder prices – on which the farmgate forecast is largely based – had not dropped significantly and the New Zealand dollar had dived which should have helped exports.

New Zealand milk volumes have risen by 1.3 per cent this season compared to last and Europe, United States and Argentine production was tracking ahead of last year.

ASB analyst Nathan Penny said the cut was not unexpected as Fonterra previous forecasts for this season had looked on the high side.

“The forecast range is now set at a more realistic level. Furthermore, the shift to using a range rather than a point estimate is an acknowledgement of the uncertainties to the outlook.”

The ASB was sticking to its $6.50/kg forecast, but said it continued to carry risk of being trimmed. 

Hurrell described the range as a new move to provide the best possible signals.

“We operate in a hugely volatile global market place, so it is very difficult to pinpoint an exact forecast farmgate milk price this early in the season. For example, weather conditions can change suddenly and this can have a significant impact on the global milk supply.”:

“As a result, we have chosen to give a range of $6.25-$6.50 per kgMS and be clear that the advance rate is based on $6.25 per kgMS. The final price could be outside this range as we are still early in the season and up against considerable volatility. We therefore recommend farmers budget with ongoing caution,” Hurrell said in a statement.

The timing of today’s update was driven by available market information and was not requirement under the Dairy Industry Restructuring Act. Fonterra is required to give a forecast for DIRA purposes by December 18.


Source: Stuff

Drought runs milk dry at Australian dairy farm

Low dairy prices coupled with a crippling drought has put the Blanch’s ownership of the Lower Mount Walker dairy farm at a bigger threat than any other time in their 64-year history.

Mr Blanch senior bought the 230ha property in 1954 before Steve and his brother took over in 1990.

While much has changed in the world since 1990 – the price of milk hasn’t.

“Milk was a dollar a litre in 1993 and it’s still a dollar per litre,” Steve said.

“Try and find any other industry selling a commodity at 1993 prices – you won’t.”

There is an expectation Aussie farmers will push on, continuing to provide food for millions.

But Steve’s defiance and drive on during tough times is stripped raw when he talks about the wretched deal for dairy farmers.

“All of our expenses continue to go through the roof, everything from wages to drought-driven things like feed,” he said.

“The trouble is when you’re continually making nothing out of it and going further and further into debt there is a consideration that I don’t know how much longer we can continue what we’re doing.

“It’s a shame to think we’ll lose the family farm through no fault of our own.”

Steve’s father died five years ago and his three sons have secured trade jobs – realising the future was bleak on the farm.

It was a heartbreaking decision for Steve, who hoped he would one day hand the property over.

“The idea to keep the family farm was the whole idea of it,” he said.

“We do consider throwing it in but we love where we live and we’re on a good farm.

“If we would have known five to six years ago milk was going to stay at $1 we probably all would have jumped.”

Steve hopes about 1.5 million litres of milk will be produced by the farm’s 350 milking cows.

The family is paid about 55 cents for each litre.

He says a 10c increase will make farming viable again.

“If we can do that we don’t need a massive shift in the milk price, as much as we’d like it,” he said.

“Every 10c is $150,000.

“It would be the difference between living and dying.”

When Steve left school in 1988 his father was getting about 58c per litre of milk.

“Today we struggle to get 56c,” Steve said.

Drought has added to the family’s heartache, spending thousands of dollars to keep cattle alive.

“There’s a lot of mouths to feed when it doesn’t rain,” he said.

The dwindling number of dairy farms in Queensland also concerns Steve.

In 2001 there were 1550 dairy farms and today there is less than 370.

The state cannot afford to lose farms.

Queensland’s population consumes about 600 million litres of milk each year.

Only 400 million is supplied by Queensland farms, with the 200 million-litre shortfall filled mostly by Victoria.

Steve is begging people to buy branded milk rather than Coles and Woolworths’ $1 bottles.

He supplies Norco; Australia’s largest farming co-op.

“Every cent of every litre of Norco milk goes back to the farmer in one way or the other,” he said.

Source: The Weekly Times

Canada opened its dairy market. But by how much?

Dairy was a big sticking point for Canadian and US officials as they renegotiated NAFTA.

In the end, Canada agreed to open up its market and allow American farmers to sell more milk, cheese and other dairy products north of the border. It also agreed to end a pricing system that limited imports of certain milk ingredients.
President Donald Trump is calling the deal a win for US dairy farmers, and Canadian farmers are angry. But some experts are downplaying the impact.
“Honestly I don’t think it’s going to have a terribly noticeable impact on US dairy farmers in general,” said Andrew Novakovic, a professor of agricultural economics at Cornell University.
Under the new deal, which will be called USMCA, Canada will set new quotas for dairy imports from the United States. It will still put tariffs on dairy products that exceed the quotas, ranging from 200% to 300%.
The new quotas are expected to give American dairy farmers access to up to 3.6% of Canada’s market. Estimates suggest this will increase exports to Canada by $70 million, or 0.0003% of US GDP, a BofA Merrill Lynch Global Research report said.
“At the end of the day, this is not a trivial thing. But the United States is a big market, and this is a relatively small amount of dairy products relative to the total,” Novakovic said.
The Canadian dairy market produced roughly 17% of what the United States did each year over the past three years, according to US government data.
The United States sends far more dairy to Canada than the other way around. The United States exported an annual average of $675 million of dairy products to Canada and received about $282 million over the past few years.
But American dairy industry groups lobbied to make sure a rewrite of NAFTA would address Canada’s protectionist dairy policies. They had support from lawmakers on both sides of the aisle.
In a statement made Monday, the groups thanked the Trump administration for fighting against Canada’s practices, but also called the change “incremental.”
“This agreement, when implemented, should give us additional marketing opportunities that will allow us to provide high-quality American dairy products to Canada, which means we’ve made incremental progress,” said Jim Mulhern, president and CEO of National Milk Producers Federation.
Opening up the market, and eliminating the pricing system for milk ingredients, were the groups’ top priorities. They were still reviewing the text to better understand the impact.
The US dairy farmers were also pleased the outlines of the original NAFTA deal remained intact. The deal, struck in 1994, has significantly opened American farmers’ access to Mexico, which is now the biggest export market for them.
But Mexico has put tariffs on US cheese in retaliation for the Trump administration’s tariffs on steel and aluminum.
“We’re all happy NAFTA negotiations have concluded. But it’s critical that the 25% retaliatory tariffs are also removed. They are really hurting us,” said Jaime Castaneda, senior vice president of trade policy at the National Milk Producers Federation.
Meanwhile, the Dairy Farmers of Canada quickly came out to criticize the new trade agreement. The group was “disappointed” over the concessions the government made, especially after Canadians agreed to open up its dairy market for the Trans-Pacific Partnership and for a trade deal with the European Union.
“The announced concessions on dairy in the new USMCA deal demonstrates once again that the Canadian government is willing to sacrifice our domestic dairy production when it comes time to make a deal,” said Pierre Lampron, president of Dairy Farmers of Canada.
Canada also limits domestic milk production, keeping prices higher. Despite the concessions made, its supply management system largely remains intact. Though, they argue that the policies are needed to compete with other countries that also protect their dairy farmers. The United States offers subsidies to its dairy farmers and puts tariffs on some specific dairy products, too.
Under the USMCA, the United States also agreed to open up some of its own market to Canadian imports. It will allow more Canadian dairy, peanuts and peanut products, and a limited amount of sugar to cross the border, according to a document from US Trade Representative’s Office.
Trump and his Mexican and Canadian counterparts are expected to sign the deal by the end of November. It will then be up to Congress to approve the deal, which is likely to come up for a vote next year.
Source: CNN

‘Buy local’ dairy campaign sparked by trade deal that allows more U.S. milk into Canada

The latest trade deal allowing more U.S. milk to pour into Canada has sparked a rallying cry to buy Canadian dairy.

The message comes not only from dairy farmers upset over losing market share but also from many Canadian consumers pledging their support on social media.

“My heart hurts for the local industry,” said software engineer Erum Tanvir in Winnipeg. Last week, she posted a Facebook message to buy Canadian milk.

Tanvir says she’ll choose Canadian over U.S. dairy products — even if they’re more expensive.

“I’m OK paying a little more as long as the money goes local.”

A consumer-driven, buy-Canadian campaign first ignited in June after U.S. President Donald Trump imposed tariffs on domestic steel and aluminum products.

The focus on dairy revved up following the United States-Mexico-Canada Agreement. The trade deal, which came together on Sept. 30, grants U.S. farmers access to an extra 3.9 per cent of Canada’s dairy market, estimates Dairy Farmers of Canada (DFC).

The deal still needs to be ratified by lawmakers in the three countries before additional U.S. dairy exports start flowing into Canada. 

Sue Alexander in Breslau, Ont. plans to buy only Canadian dairy products to the best of her ability. (submitted by Sue Alexander)

“If you ask most Canadians, they would probably say that Canada got roughed up a little bit in this agreement,” said Toronto retail consultant Bruce Winder.

“When this kind of thing happens, there are a number of Canadians who, their patriotism sort of rises to the top.”

Sue Alexander’s Facebook pledge to buy Canadian dairy, along with a picture of a cow, has netted more than 6,000 shares.

“I want the dairy farmers to know they’re not on their own,” said Alexander who lives in Breslau, Ont. and runs a dog training business.

“We got a raw deal in this agreement.”

Look for the labels

The Canadian government has said farmers will be compensated for their losses. However, concerns remain about compensation details which have yet to be announced, and the long term impact of further opening up the market.

“It is a major blow to our industry,” said Manitoba dairy farmer and DFC vice-president, David Wiens. His organization estimates all trade deals combined to date open up 18 per cent of Canada’s dairy market to tariff-free imports, resulting in a $1.3 billion revenue loss to the domestic industry.

“It’s death by 1,000 cuts.” 

David Wiens, a Manitoba dairy farmer and vice-president of Dairy Farmers of Canada, says the recent trade deal was “a blow to the industry.” (submitted by David Wiens)

Wiens says a key line of defence at this point is to ramp up efforts to encourage Canadians to buy local.

Winder, the retail expert, warns that sometimes consumers make patriotic purchasing pledges without actually following through. But this time, they’ll get reminders from the dairy industry.

Last week, both DFC and Dairy Farmers of Ontario (DFO) posted messages on social media, indicating what labels to seek when searching for all-Canadian dairy products.

DFO also posted a fact sheet extolling the virtues of Canadian milk, including that it doesn’t contain artificial growth hormones. Conversely, a minority of U.S. farmers inject cows with the substance to increase milk production.

“It’s going to be ever more important for us to differentiate ourselves in the marketplace,” said Wiens.

U.S. milk arrives in stores

Perhaps a sign of things to come, the buy-Canadian campaign has already sparked anger over U.S. milk brand fairlife which recently started appearing on store shelves.

“Every bit coming from outside, it hurts us,” said dairy farmer, Lila Lee in Saint-Bernard-de-Lacolle, Que.

After learning the milk was for sale in Canada, Lee headed to the grocery store to scope it out.

“I wanted to see what we’re up against.”

Some consumers and dairy farmers were rattled to discover fairlife, a U.S.-produced milk brand, in Canadians stores. Owner Coca-Cola says the milk will soon be 100% Canadian-made. (Coca-Cola)

Fairlife’s owner, Coca-Cola said it launched the product in Canada in September and that it’s building a production facility in Peterborough, Ont. That means come 2020, its milk — which is lactose-free and contains extra protein — will be 100 per cent Canadian.

Until then, the U.S.-based company said it has permission to temporarily import the product under a special permit. “This allows us to build a consumer base and demand for the product,” said Coca-Cola spokesperson Shannon Denny in an email.

The milk doesn’t contain artificial growth hormones, she added.

Still, DFC says it would prefer Coca-Cola hold off until it’s ready to bottle fairlife domestically.

“We would rather that they set up their plant here first and then use Canadian milk right from the start,” said Wiens.

Dairy farmer Ryan Wert in Avonmore, Ont. posted a Facebook video last week, encouraging consumers to support Canadian dairy farmers. (Ryan Wert/Facebook)

Before the arrival of more U.S. milk, Canadian dairy farmers have started sending their own personal messages, asking for support.

Last week, farmer Ryan Wert in Avonmore, Ont. posted a Facebook video with his cows in the backdrop, encouraging Canadians to buy local.

He also nominated fellow farmers to do the same.

Wert’s video has already garnered more than 60,000 views and at least three other farmers have responded by posting similar videos.

“I thought it was a good idea maybe to just try to put some names and faces to that so people could see really where their dairy comes from,” said Wert.

“It is our livelihood and it is our future.”


Canadian milk producers need to move on to Plan B, such as moving more production west

Alberta should be part of a new policy to move dairy production westward, says columnist Will Verboven.

I expect most everyone, including the entire Canadian dairy industry, knew that the federal government was going to capitulate to more American dairy imports under a new trade agreement. That happened with the Canada-EU trade agreement and the Trans-Pacific Partnership deal.

It’s always been a simple equation for NAFTA; political consequences from upsetting 10,000 dairy farmers are a lot less than that from hundreds of thousands of unemployed autoworkers.

Considering that the agriculture community generally votes Conservative, they should be lucky the Liberal government didn’t give away even more concessions. There isn’t a lot of public relations value for milk producers in whining about what was going to happen anyway. That negative approach doesn’t go over well with consumers who already don’t understand what supply management is — except that it seems to mean higher retail prices.

The industry should move aggressively with a Plan B to deal with new dairy imports which will still amount to less than 15 per cent of their market — perhaps a national milk production transformation. One presumes that the supply managed commodities — dairy, eggs, and poultry — with their sophisticated marketing expertise would have developed merchandising strategies in anticipation of the loss of market share from trade agreements. Surely, they were not relying completely on their highly effective lobbying machine that has seen every provincial and federal political party and government toe the line in favour of supply management.

Producers of supply managed commodities need to be reminded that the right to operate their production and price control marketing scheme is not a God-given entitlement. It was given to them 50 years ago by the people of Canada under federal and provincial enabling legislation. I would suggest such legislation would never be considered in today’s political and economic situation. Having said that, supply management has proven to be one of Canada’s best food marketing systems — it provides top quality and fairly priced food products positively benefiting producers, processors, marketers and consumers.

One only has to compare it to the milk production and marketing disaster in the American dairy industry. Their system assures ruinous production prices and wasted surpluses all subsidized by U.S. taxpayers. Some naive folks consider that a good system for Canada. It’s more a short-term pain for long-term pain marketing system.

The brain trust in the supply managed commodities needs to come up with a long-term strategy. Realistic compensation should be the main route to retire any excess production. It should be specifically targeted to buying out willing producers in Quebec and Ontario where the majority of inefficient small-scale milk producers operate. It will work; there are successful precedents.

Alberta should re-evaluate its position in national supply management schemes, specifically in dairy production. Unlike B.C. and Eastern Canada, Alberta has the space, feed and expertise in large-scale livestock operations that could see significant expansion in more cost-efficient milk production. From an economic reality more of the dairy industry needs to move west.

However, the biggest roadblock to real change in supply management in dairy is intransigence in altering the distribution of quotas across Canada. That has to do with provinces protecting their own interests — but is it fair that Quebec controls up to 40 per cent of milk production whilst having only 23 per cent of the population? Focused regional compensation could force that production level back to a fairer share for other provinces. Can it be done?

In the past Alberta has forced changes to increase its share of the national chicken production quota by threatening to withdraw from the national scheme. Is it far-fetched to take that perspective? How about this for an Alberta discussion strategy — Quebec doesn’t want our oil — well, we don’t want their dairy products. It would be a good start to reforming national supply management — a 50-year-old agreement that needs to be modernized and soon.


Farmer says Canadian dairy industry ’sacrificial lamb’ of trade negotiations

Kevin MacLean stands with Quest, one of his dairy cows, at his Napanee farm on Wednesday, Oct. 3, 2018.

Some dairy farmers in Lennox and Addington County are upset at concessions made by the Canadian government during recent trade negotiations between the United States, Canada and Mexico.

The newly struck United States-Mexico-Canada Agreement (USMCA), drafted to replace the North American Free Trade Agreement, grants U.S. dairy farmers 3.6 per cent more access to the Canadian dairy market, a compromise that has, according to one Napanee farmer, left many operators in Canada’s dairy supply management system feeling betrayed by a government that promised to protect their interests.

Kevin MacLean, a third-generation dairy farmer who owns Ripplebrook Farm in Napanee, has followed Canada’s international trade negotiations closely over the past several years, both as an operator in the industry and in the past as a representative for Dairy Farmers of Ontario.

“It appears as if we’re going to lose at least 3.6 per cent of our market share over some period of time,” he said. “We’re not sure what that period will be. How it rolls out, we’re not sure.”

That translates to about a $138,000 loss for MacLean’s share of the dairy market, money he would have to put out to recoup his lost milk quota if he wants to continue to supply the same quantity of milk to the market as he does today.

If he doesn’t replace that quota share, then his business will lose approximately $40,000 per year.

“I know that this is the last cut I’m going to take,” MacLean said.

MacLean said that another element to the dairy concessions was the elimination of Class 7 milk products — concentrated milk protein used in products like cheese.

Canadian dairy farmers created the product class in 2017 to compete with products coming from the U.S., MacLean said.

MacLean said that in recent years, the Comprehensive Economic and Trade Agreement (CETA) gave 2.25 per cent access to European dairy producers, and the Trans-Pacific Partnership (TPP) another 3.25 per cent to international markets.

“Over the last 10 years, all of these trade deals have added up to over 18 per cent of our market lost. My question is, why do we continue to be the sacrificial lamb in these trade talks?” he said.

Canadian dairy farmers are managed by a supply management system that controls supply and demand within the country, allowing milk prices to be set to prevent fluctuation and controlling the dairy permitted into the country from outside producers. Farmers supply the country’s demand through a closely managed quota system that dictates how much milk each farmer can sell, which provides a stable source of income for Canadian dairy farmers.

“In the States they don’t have that luxury,” MacLean explained. “They are subject to the peaks and valleys of the market. If they oversupply the market, the price goes down. In Wisconsin alone, 400 farmers have gone out of business this year. Eventually, if they keep going out of business, the supply will diminish, the price will go up. It’s just a roller-coaster ride.”

Canada’s quota system means that most Canadian dairy farmers are family-owned.

“We’re a family farm, and 97 per cent of the [dairy] farms in Canada are family farms,” MacLean said. “I know my cows by name. I know their calves. There’s a social connection to your animals. In the States, you are talking numbers with 1,000-cow herds.”

The Canadian government says it will compensate its dairy farmers for the market share loss, just like it did during the CETA deal, but MacLean says that for the $86,500 worth of the market that he lost in that deal, he was given $16,000, which had to be matched on his part by 50 per cent and could not be used to replace his operation’s quota loss.

“That’s the frustrating part, and you had to fill out a lot of paperwork to receive that. Only a quarter of the farmers in this county applied for that compensation, because it was so difficult,” he said.

According to a Postmedia Network article, Pierre Lampron, president of Dairy Farmers Canada, criticized the trade deal on Monday.

“We fail to see how this deal can be good for the 220,000 Canadian families that depend on dairy for their livelihood,” Lampron said in a statement.

“Granting an additional market access of 3.59 per cent to our domestic dairy market, eliminating competitive dairy classes and extraordinary measures to limit our ability to export dairy products will have a dramatic impact not only for dairy farmers but for the whole sector,” Lampron said. “This has happened, despite assurances that our government would not sign a bad deal for Canadians.”

MacLean has been talking to farmers in the region, and he says that the latest slice of Canada’s dairy market that the government has conceded could be the nail in the coffin for a number of local dairy operators. He knows at least three farmers in the Lennox and Addington County region who plan to close their operations following the trade deal.

“There are farmers that are considering leaving the industry for one reason or another. Age, no one to take over the operation, can’t pay the bills, financial reasons. This is going to give them a reason to leave,” MacLean said.

MacLean said the continued cuts to the Canadian dairy market are undermining the rural economy.

“There are 240 people or businesses that we’ve paid cheques to in the past 10 years,” he said. “These are real numbers, real dollars being put into our rural economy. Not a single American dollar is going to be paid to those businesses from this deal.”

As for the effects that the new trade agreement will have on dairy businesses, MacLean believes every farm will likely take a hit.

“I’ve lost an employee, so long-term I question whether I will replace that milker,” he said. “In the short term, I will probably be doing more work myself and spending less time with my family. That’s one employee on one farm. You compound that across all the farms in the province and that’s upwards of 3,500 to 4,000 jobs.”

MacLean hopes Canada will not follow down the path that the U.S. has travelled with the undermining and all-too-often demise of the small-town dairy producer. He cites small towns that have lost their family dairies in upstate New York as an example, describing those communities as “ghost towns” now.

“That’s what’s going to happen to our dairy industry in Canada if they keep allowing this to happen,” he said. “The small farmers are going to get out, the big farmers are going to get bigger. I don’t think it’s a road we want to go down.”


Source: WHIG Standard

Federal Agriculture Minister deals with dairy farmers protest at P.E.I. infrastructure announcement

Federal Agriculture Minister Lawrence MacAulay was shouted down in his own riding Friday by more than 100 furious dairy farmers.

The dairy farmers showed up at Kaylee Hall for an announcement MacAulay was making about money for road improvements in rural P.E.I., but no one heard much of what he said during his actual speech.

As MacAulay was reading from prepared notes, he was constantly drowned out by the voices of angry dairy farmers who are not happy with the United States-Mexico-Canada (USMCA) free trade agreement.

What Canada gave up in the deal was the opening of an additional 3.59 per cent of the national dairy industry to American imports and a tweaking of the rules around Class 7 dairy products, like skim milk powder, in favour of the U.S. industry.

Related: Dairy still in distress, despite new USMCA, says P.E.I. MP Wayne Easter

Doctor said they hoped to convince MacAulay not to vote in favour of the USMCA.Deanna Doctor, who runs a milk producing farm with her father and helped organize Friday’s protest, said they decided to show up in big numbers to show MacAulay how they feel.

“I mean, we’re not even allowed to export anymore,’’ she said. “If you look at the fine print, we cannot export without the U.S. signing off on that. How insane is that? This is our country; this is our milk; why is (U.S. President) Donald Trump deciding what is going to be in our grocery store, what is going to be on your family’s dinner table?’’

“I mean, we’re not even allowed to export anymore,’’ she said. “If you look at the fine print, we cannot export without the U.S. signing off on that. How insane is that? This is our country; this is our milk; why is (U.S. President) Donald Trump deciding what is going to be in our grocery store, what is going to be on your family’s dinner table?’’
-Deanna Doctor

Doctor doesn’t buy the government’s argument that it was the best deal they could get, noting that no deal would have been better than the USMCA.

Deanna Doctor was one of the dairy farmers who helped organized a protest against the recent free trade deal at Lawrence MacAulay’s infrastructure announcement in Pooles Corner on Friday. Doctor was hoping the protest would convince MacAulay not to vote in favour of the United States-Mexico-Canada Agreement (USMCA). -Dave Stewart
Deanna Doctor was one of the dairy farmers who helped organized a protest against the recent free trade deal at Lawrence MacAulay’s infrastructure announcement in Pooles Corner on Friday. Doctor was hoping the protest would convince MacAulay not to vote in favour of the United States-Mexico-Canada Agreement (USMCA). -Dave Stewart

MacAulay said he met with the Dairy Farmers of P.E.I. organization on Friday prior to his announcement in Pooles Corner. At that time he told them the plan is to put together a compensation package for producers.

“They had a loss, and that’s why it’s so important that we work together,’’ MacAulay told the media over the shouts of protesters. “I met with the Dairy Farmers of P.E.I. today and what we’re going to do is sit down and put an appropriate package together to make sure the industry remains stable for the long term.’’

Dewar MacLeod, who operates Shadow Hill Farms, doesn’t want to hear about it.

“We don’t want compensation,’’ he told The Guardian bluntly. “We want a sustainable industry, one we can raise ourselves without taxpayers paying money for it. They haven’t yet, and we don’t intend on having them start. We’re losing money every day. Every trade deal they make we lose more money.’’

Bloyce Thompson, another dairy farmer, said the 165 dairy farms on the Island have been hit bad again.

“It’s almost too much to bear,’’ Thompson said. “It’s affecting our incomes and our livelihoods, and we’re here to protect the family farm. Our markets are being taken away by the American product. It’s (a) cheaper, less superior product that’s coming and it’s going to affect our bottom line.’’

Despite repeated calls from the protesters on Friday to vote against the deal, MacAulay said he won’t be voting no.

“I can understand, truly, how they feel being a dairy farmer myself, but I can tell you $2 billion a day (of trade crosses) the border. We cannot have that stop. (They) had to pay a price and that’s unfortunate. I am fully aware it’s not easy.’’

A P.E.I. dairy farmer, left, voices his displeasure with federal Agriculture Minister Lawrence MacAulay over the United States-Mexico-Canada Agreement (USMCA). More than 100 dairy farmers showed up at MacAulay’s infrastructure announcement in Pooles Corner Friday to protest the trade deal. -Dave Stewart
A P.E.I. dairy farmer, left, voices his displeasure with federal Agriculture Minister Lawrence MacAulay over the United States-Mexico-Canada Agreement (USMCA). More than 100 dairy farmers showed up at MacAulay’s infrastructure announcement in Pooles Corner Friday to protest the trade deal. -Dave Stewart


Canadians: ‘Our Government Sold Us Out’ Over Trade Deal

With major concessions from Canada on dairy, some Ontario critics say they’re concerned about what NAFTA’s proposed replacement means for the industry.

The United States-Mexico-Canada Agreement (USMCA) has plunged some dairy farmers into uncertainty, with some concerned that they might not be able to survive. (Ben Brewer/Reuters)With major concessions from Canada on dairy, some Ontario critics say they’re concerned about what NAFTA’s proposed replacement means for the industry.

The provisional deal known as the United States-Mexico-Canada Agreement (USMCA) has plunged some dairy farmers into uncertainty, with some now concerned that they might not be able to survive.

The new deal would give U.S. farmers greater access to Canada’s dairy industry, worth about 3.6 per cent of Canada’s current dairy market, according to the Dairy Farmers of Canada.

Dairy farmer Vicki Cork has heard from Dairy Farmers of Ontario that the number could even be as high as 3.9 per cent and says the higher figure gets her worried.

“The bigger the number, the worse it’s going to be, so we’re just sort of [bracing] for the worst,” she told CBC News Saturday at the Norfolk County Fair in Simcoe, Ont. — one of the largest agricultural fairs in the province.

“We’re a sixth-generation dairy farm, and we’re probably not going to survive this, so I guess it just sucks to be us.”

Dairy farmer Vicki Cork speaks to CBC about the impact of the USMCA trade deal. 1:36

Foreign Affairs Minister Chrystia Freeland said Monday that farmers will receive compensation from the federal government, but details weren’t immediately available.

Cork claims that she hasn’t received any communication on what compensation may look like outside of a “pretty vague” email she got from the Dairy Farmers of Ontario.

“I look after the books for the farm, so I’m terrified,” she said. “Until they actually say something official, we really have no idea what the compensation will look like.”

Ontario’s Minister of Agriculture Ernie Hardeman told CBC News that consultations will be made with the province’s agriculture community to determine the cost associated with the new deal. He said he plans to ensure the federal government foots the bill.

Ontario’s Minister of Agriculture Ernie Hardeman says consultations will be made with the province’s agriculture community to determine the cost associated with the new deal. (Keith Burgess/CBC)”It is quite obvious that opening up the market to the American market is going to hurt our producers,” he said at the Norfolk County Fair. “They made the deal, they should pay for the penalty that is caused by the deal.”

Some critics say the deal also erodes the supply management system, which puts quotas on the amount of milk farmers are allowed to produce. The quotas prevent overproduction that would otherwise hurt prices and farm incomes.

The system also put high tariffs on foreign producers trying to sell in the Canadian market, limiting foreign products on Canadian shelves.

Cork says Canada’s supply management system has been successful and the envy of countries around the world.

“The quota system was put in place because the government told us to manage our own system and we did and we were successful. We were too successful,” she added. “Other countries wanted into that. They wanted access to it, and our government sold us out.”

Cork says she has no animosity toward other dairy farmers or American dairy farmers, but rather the government.

The new USMCA deal would give U.S. farmers greater access to Canada’s dairy industry. (CBC)”[Americans] envy our supply management and they want the government to help them implement supply management in the United States,” she said. “So why not help them do that instead of taking away from us because we had something successful?”

The deal would also eliminate Class 7, which essentially created a discounted price on Canadian-produced milk ingredients, so they could compete with similar products exported into Canada from the United States. The pricing system was introduced in March last year, which made the American equivalents uncompetitive.

Now with the new trade deal in motion, Cork is asking that Canadians specifically look for products that are made in Canada to help farmers at home.

“I would really hope that the general public would just really support your Canadian farmers,” she said. “You might pay a few cents more, but it was grown here. It was grown ethically and safely, and you’re supporting your neighbour.”


U.S. dairy farmers see new hope in new trade deal

Dairy farmers are hopeful that the new U.S. trade deal with Mexico and Canada may help alleviate some of the pain they’ve experienced the last few years as the price of milk has cratered, threatening their livelihoods.

The overhaul of NAFTA, now dubbed USMCA for the U.S.-Mexico-Canada Agreement, aims to end discriminatory pricing and limit Canadian policies regarding its dairy powder exports. U.S. dairy farmers claim those policies have unfairly restricted their ability to compete and allowed Canada to flood world markets with its own versions. Milk powder is popular in countries with poor transportation infrastructure and refrigeration, as it can provide a milk substitute that doesn’t need to be refrigerated. It is also used in food products like pastries and chocolate. 

The deal would expand U.S. access to up to 3.75 percent of the Canadian dairy market, versus 3.25 percent in the abandoned Trans-Pacific Partnership. Above that level, U.S. dairy farmers will still face Canada’s punishing tariffs on dairy imports from the U.S., which can approach 300 percent.

Still, some dairy farmers are encouraged by the deal.

“This is a good step in the right direction,” Morgan Peck, owner of Penokee Range Holsteins in Highbridge, Wisconsin, told CBS affiliate NBJR. Added Peck: “Every little bit helps. You know, we’re happy to see that trade is getting back on track.”

Peck said if the deal increases milk prices by just $1.50 per pound, that’s an extra $120,000 annually for his 325-cow farm — though it still leaves room for improvement.

“We need $20 milk at a sustained pace for about two or three years,” Peck said. “We aren’t going to get that for a while.” Farmers are currently getting around $16 per 100 pounds of milk.

The sentiment was echoed by Chequamegon Dairy Association President Peter Thewis, who said while prices may move higher in the short term, it will take time for farmers to see the deal’s benefits, and longer-term issues with milk supply will require more work.

“Milk has been staying pretty flat in price right now,” said Thewis. “A lot of this will depend on being able to deal with the oversupply right now in the U.S.”

He added that “For long-term issues, there’s less optimism looking at the trend that we see mainly with small farms, and some bigger ones, not being able to reduce our amount of supply to create a better price for the farmer so that they will continue being able to pay their bills.”  


Source: CBS News

Michigan dairy farmers either exit or eat up equity

Exhausting. That’s how Hank Choate describes the last three years in Michigan as dairy farmers there have continued to receive the lowest milk price in the country. “The impact, the economic toll it is having on many producers is heart-wrenching,” he says.

The fifth-generation dairy farmer from Cement City operates Choate’s Belly Acres in partnership with his family. The Centennial farm can trace back its roots in southern Jackson County more than 180 years.

Choate says that strong foundation and an incoming generation with a desire to farm are helping him push through one of the most challenging economic times of his career. “It’s not fun to sit down and try to pay the monthly bills with our current milk check,” he says.

Choate says he is deeply saddened by the suffering that’s taken place in Michigan’s dairy industry and questions what it will look like in just five years.

“Because of the dairy economy, we’ve made a decision that we were going stop our building mode, pay down some debt and just try to hold our own,” he says.


The farm has been in a growth mode for more than 15 years and added a heifer barn in 2014 to expand the herd to 480 cows. Low prices have put some plans on hold.

Since 2016, it’s been difficult for most dairy farmers to cover 100% of their cost of production. Choate says that has meant burning equity to stay afloat, and it’s a reality in all sectors of agriculture he’s seen as a board member of GreenStone Farm Credit Services.

“There’s even been some producers GreenStone is working with to be interest-only customers to cover debts,” he says.

For dairy farmers the coffers are running dry, and according to Choate, simply selling the cows isn’t enough. “There are so many cows going to market right now, and the number of purchasers has diminished so much that the value of the cows is 60% of their worth on a producer’s balance sheet,” he says.

What’s left?
The question for many has come down to how much equity is left? Ken Nobis, Michigan Milk Producers Association president and a dairy farmer, says the length of the downcycle has expedited some farmers’ decisions to leave the business.

“You can only burn equity for so many years, and either your lender strongly suggests that you exit the industry, or what I’ve seen more of is that farmers are just getting worn out after three consecutive years of a downturn,” he says. “You are starting to see more of them making the decision that enough is enough.”

Over the last 10 months, MMPA has lost more than 120 farms. “That’s more than 10% of our membership on an annual basis because that doesn’t include the months of August and September on farms going out,” says Choate, who serves as a district director on the board.

A large portion of the farms have been Amish. “The Amish are getting out of the dairy industry very, very rapidly and getting into other sectors of agriculture to operate their farms,” Choate says.

While there’s been an uptick in the number of dairy farms that have closed, milk production is not declining as much as is needed. “Up till now it would appear that those cows are just going on other farms, says Chuck Courtade, Dairy Farmers of America regional manager, who covers Michigan and parts of Indiana and Ohio.

“All farms are under stress right now. It doesn’t matter what size, [or] how many generations have been on the farm. Everybody is struggling right now,” he explains.

Fewer dairies have also added pressure to the milk hauling system. According to Courtade, 25% of Michigan’s production is shipped across stateliness to be processed. “If you have a remote area where there aren’t a lot of dairy farms, and two or three decide to sell out, it puts a real challenge on getting haulers there at the same time we’re experiencing a driver shortage,” he says.

Michigan’s milk production had been growing 4% to 5% annually, until this year it started to contract. USDA reports July 2018 production declined 0.9% from last year, which Choate believes is not only a sign more farms are exiting the business, but also more cows in general are being culled.

“You used to see maybe 25% of the herd being sold going to slaughter when a dairy sold. Today that’s now about 30% to 40% and even entire herds in some cases,” he says.

Tough times have only become amplified with retaliatory tariffs from China and Mexico, as well as reduced feed supplies after a dry growing season.

“Purchasing feed when you’ve got a narrow margin on your milk check already is going to be very, very difficult for a lot of farmers,” Choate warns.

Courtade expects finances for farms to get even tougher this winter. “You take the cost of planting a crop and then not getting one, having to buy feed with a milk check that’s small already, it is just putting tremendous strain on a lot of families,” he says.

Nobis believes prices will get better, but farmers are too efficient to ever experience similar highs to what was seen in 2014 with $24 milk. “Our producers around the world are too good at what they do. Unless we can get the pricing structure changed and permanently remove subsidies that exist in some corners of the globe for dairy, like the EU, we’re going to have a challenge,” he says.

Is more processing enough?
Michigan farmers have nearly doubled milk production since 2000, with about 40% more cows. “It has put us a little behind the eight ball compared to our neighboring states because we don’t have enough processing capacity,” Nobis says.

He attributes the lack of processing and unbalanced dairy processing portfolio for some of the lower dairy prices in the state. “We’re short on the Class III category, which plays heavily in the producer pay price and puts us at a disadvantage with neighboring states,” he says.

MMPA saw the need for more processing in Michigan as early as 2007, according to Nobis. “We expanded our facility at Ovid, but nobody expected production to increase at the rate that it did for as long as it did,” he says. “In our co-op, that’s kind of where we got behind. We incorporated other expansions over this time frame. But with the rapid increases in production, we weren’t keeping up.”

Nobis believes the low milk prices in Michigan are not solely tied to a lack of processing. “The real game-changer was when the European Union did away with their quota system in March of 2015, and production increased so dramatically it added too much milk to the global supply system,” he says.

Courtade says while some farmers may be wondering how they’ll keep operating until the new St. Johns processing plant opens in 2020, it will raise the tide for all farmers. “The more milk that can stay in the state, it’s less hauling costs. It’s less under-order-pricing. In fact, there will be a premium on the sales to the cheese plant,” he says.

 It’s estimated the plant will provide at least $50 million annually to the state’s dairy industry, which Courtade believes is a conservative number.

Choate says recent processing projects in Michigan will only treat the symptoms rather than treating the “illness.”

“Global production is increasing more than 2.2% to 2.3% at a time when consumption is only increasing 1.7% to 1.8%, which is creating a gap of overproduction,” he says. Choate believes until that gap narrows, recovery to profitability is not possible.

Is supply management needed?
Choate says the cost of production for dairies still is highly variable, which would make it difficult for the industry to set one price for milk. Farms that have expanded to lower costs and provide living wages for family members typically benefit from economies of scale, but size has not necessarily protected them from the downcycle.

“There have been producers who have been asking for some type of production controls, and we’ve been told the tone of the conversation nationally has reached a point where producers may be more willing to bring production and utilization more in-line,” he says.

For supply management to work, Choate says it needs to be a national decision for farmers, and he believes there’s more urgency for the discussion.

As the industry continues to struggle, Nobis, who serves as the first vice chair of the National Milk Producers Federation, says talk of taking control of the supply has increased, but the method of doing that is extremely complicated.

“If you’re going to talk about something like the quota system in Canada and what was in the EU, I don’t see that ever happening in this country,” he says.

Nobis expects pricing milk in a way that excess milk is priced lower will be more seriously looked at in the next several months.

Two years from now when the St. John’s plant is operational, Courtade believes Michigan farmers will go into another expansion mode, but they need to be careful. “We probably need to watch that a little bit more and manage it better to maintain the prices, so we don’t get right back into this situation,” he says.

Take the margin
Choate says the continued tight prices has forced him to take the margin when available in the market, rather than waiting for something higher.

“Over the last three years, there’s been marketing opportunities we’ve seen go by that we haven’t taken advantage of that would have put us in a better situation,” he explains.

Choate calculated that during that time, if he had received $1 more per cwt, he could have captured at least $500,000 more for his operation.

Over the past four years, about 20% of Michigan dairy farms have closed, according to the Michigan Department of Agriculture and Rural Development.

The department reports the state has 1,331 Grade A dairy farms, down from 1,662 in October 2014. Nearly half of those closures have occurred since September 2017.

The county that lost the most dairy farms during that period was Hillsdale County, down 46 dairy farms, or 38%. The current plight of the state’s dairy farmers, according to the department, is caused by depressed milk prices due to oversupply of milk and high transportation costs due to the current lack of milk processing facilities in the state.

In 2017, the loss to Michigan milk producers was more than $164 million, according to MDARD.

USDA continues to report Michigan’s all-milk price as the lowest in the country, $14.20 per cwt in July, $1.20 below the national average.


Global milk supply growth slowing

Global milk supply growth slowing despite bumper start to NZ season – Rabobank

While combined milk supply growth across the world’s ‘Big 7’ dairy exporters slowed during quarter three, a bumper start to the New Zealand milk production season has seen soft demand for Oceania-origin dairy products in recent months, according to Rabobank’s latest Dairy Quarterly report, with the bank now forecasting a lower New Zealand milk price of NZD6.65/kgMS for 2018/19.

The specialist agribusiness bank says the slowdown in combined milk production growth seen in quarter two 2018 from the ‘Big 7’ (the EU, the US, New Zealand, Australia, Uruguay, Argentina and Brazil), at just one per cent year-on-year (YOY), has trickled through to quarter three, driven by a number of factors including drought conditions in parts of northern and western Europe.

The report says decreased milk production from drought impacted areas is at odds with the start to the New Zealand dairy season where near-perfect weather and more cows milked over the winter period resulted in production growth of five per cent YOY over the seasonal trough period from June to August.

Report author, Rabobank dairy analyst Emma Higgins says the jump in New Zealand milk supply has created a lack of buyer urgency for Oceania-origin products over the past quarter and this continued in the most recent GDT Event.

“This lack of buyer urgency has resulted in weaker pricing which fed into the bank’s downward revision to its full-year forecast from NZD 6.80/kgMS to NZD 6.65/kgMS for the 2018/19 season,” she said.


Source: Scoop

Milk production growth could impact dairy prices

The strong start to the New Zealand dairy season is starting to weigh on prices, analysts said.

At yesterday’s GlobalDairyTrade auction, prices overall fell by 1.9 per cent, led by a sharp fall in the price of fats.

Anhydrous milk fat prices were down 4.4 per cent and butter prices dropped by 5.9 per cent.

Whole milk power prices, which have the greatest bearing on Fonterra’s farmgate milk price, fell by 1.2 per cent to US$2753 a tonne, and have lost 14 per cent since the start of the season.

Favourable weather has seen the dairy season get off to a strong start, with production rising by 4.7 per cent for the month of August compared with the same month last year, according to data from the Dairy Companies Association of NZ (DCANZ).

Season-to-date milk production was up by 5.5 per cent and for the 12 months to August, production was up 0.5 per cent, DCANZ said.

“The main thing is that the weather has been pretty supportive,” ASB Bank senior rural economist Nathan Penny said.

“The market has seen that 5.5 per cent number and it’s starting to factor in the likelihood that New Zealand production is going to be pretty good,” Penny said.

Analysts pointed out that the period to August represented just 8 per cent of the season’s production.

But they said prices would come under more pressure if the trend of strong production growth continued through the high producing months of September through to January.

Fonterra’s farmgate milk price forecast for 2018/19 sits at $6.75/kg but commentators have shifted their forecasts down to around the $6.25-$6.50/kg level.

DairyNZ’s estimate of break-even for the current 2018/19 season is $5.40 to $5.50 a kg of milksolids.

“From here, New Zealand production will be a key factor for the direction of dairy prices over the remainder of the season,” Penny said.

ASB based its $6.50/kg forecast on production to lifting by 2 per cent over last season’s.

Penny said the bank’s forecast would drop if production rose significantly above that level.


Trade deal kills Class 7, allows more U.S. milk access

Dairy pays heavy price for Canada to secure North American trade deal

A new North American trade deal agreement has been reached it and will have significant implications for Canadian dairy farmers.

The deal, agreed upon last night, is now called the United States-Mexico-Canada Agreement (USMCA).

The U.S. will be given 3.59 per cent access to the Canadian dairy market.

That’s a significant loss for Canadian dairy, as when the U.S. had signed onto what was then known as the Trans Pacific Partnership, 3.2 per cent access had been given for the entire TPP block, including Australia, New Zealand and the U.S. The U.S. eventually withdrew from TPP, and a new Comprehensive Progressive Trans Pacific Partnership is currently before the Canadian House of Commons for ratification.

Farmtario columnist Kelsey Johnson of iPolitics reports that Class 7 will be eliminated. However, three products that made up most of the volume of Class 7, milk protein concentrate, skim milk powder and infant formula, will be priced on the U.S. price for those products. That will mean that U.S. farmers will be able to compete on price for those products in Canada, but so will Canadian farmers, at the same price.

They had been classed at world price.

Other dairy goods under Class 7 will be price according to their end use.

Peter Clark, a trade lawyer and long-time observer of the said in a Twitter post that in a quick reading of the text, Canada has also agreed to export limits on dairy.

“A quick review of parts of #USMCA text shows dairy sector has paid more than in #TPP,” he said in a Twitter post. “U.S. interference and oversight of special milk classes is an abomination. Effectively extraterritorial application of US law.”

There have also been concessions on poultry, which is also supply managed, but it’s not clear yet what those are yet.

It is unclear that there were any gains for Canada in the deal, only the maintenance of some key provisions on dispute resolution and the guarantee of no tariffs on auto.

Farmtario will continue to update this story during the day.


Source: Farmtario

How much of our home grown dairy has Justin Trudeau really given away to President Trump?

Prime Minister Justin Trudeau has given away hundreds of millions of dollars to the American administration as part of the recent United States Mexico Canada Agreement (USMCA), but the damage inflicted goes beyond concessions made on our dairy market.

Conceding parts of our market to the US does not tell the whole story. Canadian products made with locally produced milk from Canadian dairy farms are being pushed off the shelves to make way to US-imported products. Once the recent trade deals[1] come in effect, the total dairy imports will make up approximately 18% of the Canadian dairy market. In other words, the thousand cuts from cumulative trade deals over the past decades[2] will have displaced 18% of our homegrown high quality milk. At the farm gate alone, this represents an annual loss of 1.3 billion dollars for farmers.

While this is staggering enough, the true damage caused by USMCA is not limited to the access granted to the US. Our government has decided to tie our hands on the other side of the equation; constricting the Canadian dairy sector’s ability to export Canadian high quality dairy products, not only to the US, and Mexico, but also around the world! As part of the USMCA, Canada has agreed to the US demands to cap Canadian exports of skim milk powder, milk protein concentrates, and infant formula. Added together, these measures also limit our ability to grow the Canadian domestic market.


“Our government is not only allowing the dismantling of our dairy model in Canada, it is giving up our sovereign right to also benefit from future trade agreements. The total access given up by the federal government in the past decades is bad enough, but now, we (farmers and processors together) are not able to compete in our own market, nor to export high quality dairy. Canada caved in to the US demands to ensure our dairy products would not compete with American made ones on the world markets. So much for Canadian sovereignty.”

Dairy Farmers of Canada (DFC) is the national policy, lobbying and promotional organization representing Canada’s farmers. DFC strives to create stable conditions for the Canadian dairy sector, today and in the future. It works to maintain policies that foster the viability of Canadian dairy farming and promote dairy products and their health benefits.

Breaking down dairy aspect of Trade Deal

We’re getting new details on exact changes that open up markets for dairy exports.

Trade negotiations between the US and Canada turned into a battle over dairy products.

As part of the United States Mexico Canada Agreement, Canada agreed to end its new milk pricing system..which made certain American dairy products too expensive to sell in Canada.

The deal also allows American farmers to sell more kinds of milk, cheese and other dairy products to Canada and Mexico.  

Congressman Rodney Davis (R-IL) says that’s a victory for the US. 

“Making sure Canada wasn’t punishing dairy producers here in this country for products being shipped into Canada. That’s the whole gist of free trade, it should be free both ways,” says Davis. 

Still, Democrat Senator Tammy Baldwin (D-WI) says the new agreement won’t solve all of dairy farmers’ and producers’ problems. 

“There’s an oversupply. The price for milk is very low,” says Baldwin. 

The USMCA does not address President Trump’s tariffs on steel and aluminum, meaning Mexico’s retaliatory tariffs on U.S. cheese are still in place. 

Baldwin says that continues to hurt Wisconsin cheese producers. 

“They are seeing their export market just close down,” Baldwin says. 

Both Baldwin and Davis hope the new deal, will allow the three countries to resolve their remaining trade issues and take the pressure off U.S. dairy farms.

Source: Ozarks First

Say cheese: Why Americans are adopting Swiss dairy farmers

Swiss farmers Agnes and Paul Barmettler spent the summer tending to their cows on an Alpine pasture, turning the raw, full-fat milk from the herd into buttery cheese.

The unique flavor of their sharp Sbrinz and other organic cheeses comes from the fresh herbs and wildflowers on Alp Bleiki, the meadow where their cattle graze from May until the end of September.

This month, after the herds make their annual trek to spend the winter in lower pastures, their handcrafted cheese will be offered for sale. And it has nothing in common with the generic “Swiss cheese” sold in U.S. supermarkets.

Although Switzerland exports annually between 8,000 and 9,000 tons of cheese to the United States, they are primarily mass-produced varieties. The genuine Alpine cheese that uses only raw milk from cows grazing on natural grasses at high altitudes is harder to find.  But thanks to a program called Adopt-an-Alp, which “matches” American retailers with Swiss dairy farmers, dozens of specialty shops in the U.S. now import this cheese directly from Alpine pastures.

One of them is Skagit Valley Food Co-op in Mount Vernon, Washington, which “adopted” Alp Bleiki in 2015. The store initially purchased 10 wheels (about 150 pounds) of the Barmettlers’ cheese, buying more in the following years.

“Being able to bring in amazing artisan cheese from small producers tucked away up in the Swiss Alps is a great opportunity,” said Galen LeGrand, the co-op’s cheese manager.

This cheese, which the co-op sells for $20 a pound, “is completely different from what we have in the U.S. The customers love it,” he added.

The Barmettlers are also happy to know their product is appreciated on the other side of the Atlantic. “We are honored that our cheese is loved in America,” Agnes said.

Adopt-an-Alp is the brainchild of Swiss expat Caroline Hostettler, who runs a cheese import business in Fort Myers, Florida. She founded the program in 2013 with a unique mission: “to offer U.S. consumers a chance to taste genuine Alpine cheeses and to give Swiss dairy farmers an opportunity to export their products that wouldn’t otherwise make it to America.”

The “matchmaking” is done online, where interested Americans can choose and negotiate directly with Swiss farmers. Currently. there are 80 retailers in the United States who have “adopted” one or more of 27 Alpine cheesemakers, based on what kind of cheese they’re interested in. Different herds graze on different pastures, nuancing the flavors in the milk, so each farmer’s cheese is unique. 

But there’s also another aspect to Adopt-an-Alp: preserving an ancient tradition of transhumance, which means that the livestock spends winter months on low pastures and climbs back to highlands in the spring to graze in lush meadows so that their milk is flavorful.  

Hostettler has traveled across the United States and Switzerland, personally meeting farmers and retailers to find people who “are passionate about the way Alpine cheese is made,” she said. “Only by understanding transhumance can we fully appreciate all the work these farmers do.”

Skagit’s LeGrand got a glimpse of the hard work needed to produce Alpine cheese he sells at his store when he visited the Barmettlers on Alp Bleiki in 2016.

“It was a life-changing experience,” he said.

 “I gained a lot of respect not just for the cheesemakers but also for Switzerland as a whole,” he added. 

Sonja Hoffmann, owner of RacletteCorner online shop based in Sioux Falls, South Dakota, joined the program earlier this year. She has ordered 20 wheels of her specialty, raclette — a semi-hard cheese used for melting — from Alp Maran, a dairy in a picturesque area of eastern Switzerland.

Now she is spreading the word of her new adoptee through her blog and newsletter.

“My customers are super excited to get great Alpine raclette cheese from Switzerland, while supporting the age-old tradition of transhumance,” she said.

Source: USA Today

Why are UK Cheddar Imports Rising?

Previously, AHDB has investigated the growing UK trade deficit in cheddar, identifying increased imports of EU cheddar as the main driver. The question is, why is the UK importing more EU cheddar?

A good start could be by identifying which factors aren’t causing the increase. For example, it doesn’t appear to be because the UK is producing less of its own cheddar, as production in both H1 2018 and H2 2017 were up on their year ago counterparts.

It’s also unlikely to be that demand from consumers is growing; fluctuations in retail sales have been relatively small compared to the shifts in imports. There is a possibility that demand is growing for cheddar to use in food products, but this is hard to verify.

With the available data suggesting we can rule out a shortage developing for cheddar, it seems more likely that imports have increased in order to build up stocks. It is interesting that the increase in cheddar imports in H1 2018 vs H2 2017 came almost entirely from Ireland.

This leads to the possibility that the increase could be the result of some de-risking actions by Irish manufacturers, building up stocks in the UK to mitigate potential border and customs issues post-Brexit.


Source: AHDB Dairy

Dairy Farmers’ livelihood sacrificed again

Dairy farmers across Canada are deeply disappointed over the news of the concessions made on the dairy sector to conclude a new USMCA agreement. Once again, dairy farmers again paid the price to conclude an international trade agreement.

“The announced concessions on dairy in the new USMCA deal demonstrates once again that the Canadian government is willing to sacrifice our domestic dairy production when it comes time to make a deal,” said Pierre Lampron, President of Dairy Farmers of Canada (DFC). “The government has said repeatedly that it values a strong and vibrant dairy sector – they have once again put that in jeopardy by giving away more concessions,” he added.

USMCA follows two previous trade agreements in which access to the Canadian dairy market was granted, CETA and the CPTPP, which sacrificed the equivalent of a quarter of a billion dollars annually in dairy production to industries in other countries. This new agreement once again weakens the dairy sector which, among other things, employs more than 220,000 Canadians and contributes some 20 billion dollars a year to Canada’s gross domestic product. The livelihood of these thousands of Canadians and the future generations of dairy producers is seriously at risk.

“Today, the message sent to our passionate, proud and quality-conscious farmers and all the people who work in the dairy sector is clear: they are nothing more than a bargaining chip to satisfy President Trump,” added Mr. Lampron.

For consumers, each concession replaces Canadian dairy products, products made with great care by Canadians, using extremely high-quality Canadian milk with no artificial growth hormones. The USMCA agreement is opening the gate even further by letting foreign products, made according to standards inferior to our own, onto the shelves of our grocery stores.

The Canadian government has said loud and clear that it wants a prosperous dairy sector. It will be interesting to see how it can reconcile the concessions made in the negotiation of this agreement with its goal of prosperity.

Video (high-resolution) reactions of Pierre Lampron, President of DFC and David Wiens, Vice-president can be downloaded from this link:

Dairy Farmers of Canada (DFC) is the national policy, lobbying and promotional organization representing Canada’s farmers. DFC strives to create stable conditions for the Canadian dairy sector, today and in the future. It works to maintain policies that foster the viability of Canadian dairy farming and promote dairy products and their health benefits.

SOURCE Dairy Farmers of Canada (DFC)

Canada once again well represented at 2018 EYBS

For the past several years, Holstein Canada has teamed up with the provincial Holstein branches to send a team of young enthusiasts to Battice, Belgium, to compete at the European Young Breeders School (EYBS). This international dairy event assembles over 120 youth from 12 different countries in Europe as well as Canada. This year’s team Canada was composed of Teresa Hylkema (Sask.), Connor Halpenny (Ont.), Rebecca Redner (Ont.), Bobby Tolhurst (Que.), Martha MacKinnon (Que.) and Cynthia Campbell (N.S).

Team Canada had a strong team once again this year, with all the delegates finishing in the top five of their respective heats in showmanship. Furthermore, Connor Halpenny finished 8th overall, and in the overall top 10 in showmanship. Cynthia Campbell also had notable results, finishing second in her heat and in the final six for showmanship. She finished 33rd overall. Rebecca Redner finished 22nd overall, Martha MacKinnon was 25th overall, Bobby Tolhurst was 38th, and Teresa Hylkema was 42nd.

The Canadian delegates took part in the five-day event with numerous workshops, activities and competitions. The delegates at EYBS compete for top honors in fitting, judging, showmanship and conformation competitions. Each team was also judged on participation, display and team work.

Holstein Canada has been partnering with the provincial branches for the past five years to send six delegates from across the country. Delegates are chosen from their respective provinces by winning provincial competitions and/or successfully completing an interview process.

A hands-on interactive event, EYBS falls under the “Practical Leaning Opportunities” pillar of the Holstein Canada Young Leader Program, with the added bonus of the international travel component. Young Leaders interested in becoming members of the future EYBS team are encouraged to contact their provincial Holstein Branch for more information, or visit the website!


Source: Holstein Canada

New York dairy farmer who couldn’t break even sells his cows

Cheyenne Keppler captures one last image of the dairy cows on her family’s farm in Knox before they were sold at an auction out west.

When Paul Keppler wakes up in the morning, for the first time in years, it’s quiet. But it’s not peaceful; it’s unsettling. Because, on a farm, a quiet morning means something’s wrong.

“If you go to a farm, there’s always something going on,” he explained.

Now, he said, there are no fans running in the barns, no vacuums pumping milk, and no cows lowing. In early September, after being unable to break even for months, Keppler and his family sent their cattle — 62 dairy cows and about 40 young stock, or calves — to an auction out west. Two large barns now sit empty on his property.

“Can’t really do much for them; they’re set up for a dairy operation,” said Keppler, who is 54.

The decision to end an operation that he’s been a part for nearly his whole life left him heartbroken.

“If you do something you enjoy then, to get rid of it, it hurts,” he said.

His dilemma is not unique.

Ten percent of dairy farms across the country shut down just last year, according to the national Farm Bureau. And, according to Steve Ammerman, spokesman for the New York Farm Bureau, New York State alone lost around 1,000 dairy farms since 2012.

“We’ve lost almost 20 percent of dairy farms in New York in the last five years,” he said.

Recently, President Donald Trump’s trade wars have hurt United States dairy farmers.

“We think tariffs ultimately only hurt farmers and can potentially damage the market,” Ammerman said.

The Enterprise — H. Rose Schneider
Cheyenne Keppler stands with her two dogs, Moose and Jackson, at her family’s farm in Knox on Monday. Behind her, the last of the Keppler cattle are being loaded into another farm’s truck.

The Farm Service Agency, under the United States Department of Agriculture, is now administering payments to farmers under a trade mitigation program in what is described as temporary aid that “will allow President Trump time to strike long-term trade deals to benefit our entire economy,” according to a press release from the USDA.

The signup period for this market facilitation program runs until January, and offers payments to those “significantly impacted by the actions of foreign governments.” Payments are based on half the total production of a farm, with dairy farmers receiving 12 cents per 100-weight, which Ammerman said is not a considerable amount.

“It is some relief for farmers,” said Ammerman. “We don’t know how much in reality it will really help.”

Under this program package, the USDA is also helping find new markets for farmers, and intends to purchase and distribute commodities for food. Last month, the department announced it would be purchasing $50 million worth of milk.

“They want trade; they don’t want aid,” said Ammerman, of farmers.

The aid came too late for the Kepplers.

Paul Keppler’s daughter, Cheyenne, observed the irony of a farming celebration on the same day as her family worked to close down their dairy operation. The Tommell Farm, a thriving beef farm nearby, was hosting the Cornell Cooperative Extension’s “Family Farm Day.” She fumed on Facebook as she saw photos of politicians posing for pictures at the event while she and her family “cried as we loaded up our last round of cows, shut the milk pump off for the last time and watched the cattle trailers pull away.”

— Photo from Cheyenne Keppler

“It’s too quiet”: The view of Knox Valley Farm from the back of Cheyenne Keppler’s horse shows two grain silos and turquoise-colored milking parlors. While her horses have stayed, her father sold his dairy cows earlier this month, leaving the farm eerily silent.

In an earlier post, she put up photos of her family’s black-and-white Holsteins and reminisced about fresh milk in the mornings and spreading manure on a hot day. But her frustrations poured out as well:

“You who vowed to buy local products — and then went to Walmart to get your dairy and produce. You who asked what can we do to help. You talked a big game. We waited. We tried for years to come out on top. We waited for you to save us. You failed us. You failed every small farmer across the country. Now we watch every last cow get loaded into a trailer,” she wrote.

Cheyenne Keppler, who is 22, said that, when she was younger, she had never thought much of what the future held for her family and the farm. She assumed she or her older sister — who, like her, now works for New York State — might have had a boyfriend who would want to work the farm, or maybe her father would just keep working into his eighties.

“That’s not realistic but, when you’re 12 or 13, you don’t look past 15 or 18,” she told The Enterprise on Monday. “We just thought it was going to be a dairy farm forever.”

Paul Keppler’s parents — Inez and Paul Sr. — bought the farm and about 80 dairy cows and young stock in 1966 when he was still a young child. Keppler grew up on the farm before taking it over with his brother, Patrick, in 1985. The two have done much of the work themselves, with some part-time help from local youth in the summer.

Paul Keppler said that he is thankful for his brother’s help as well as for help from two volunteers — Carter Warner and Jeremy Springer — who worked on the farm for no pay.

“Whenever I needed help, they showed up,” he said.

Keppler has spoken to other farmers — his friends and neighbors — both before and after he made his decision to sell his cows. This group of farmers all inherited their farms, or at least had a parent who was a farmer.

But there are now very few dairy farms left in the Hilltowns, said Keppler, recalling a time when drivers on the Knox-Gallupville road could easily see eight or nine farms; now there is only one. Keppler can’t fault the younger generation for not getting involved.

“A young couple, a young person who wants to get involved in farming right now could never afford to get in farming,” he said.

“I enjoy farming, I enjoy cows, I enjoy the open space … ,” Paul Keppler said. “I don’t see a neighbor for miles; there ain’t neighbors for miles. I do what I want back here; it’s just freedom, I guess, freedom.”

The Enterprise — H. Rose Schneider

Paul Keppler stands near a young bull at his farm in Knox on Monday. He sold his dairy cows earlier this month after milk prices dropped to the point he couldn’t make a profit, and has decided to sell hay and corn instead.

The economics of farming

Keppler and his brother have also been growing hay, and this year began growing corn as well. The dairy cows provided their main source of income, and they are gambling on whether what had once been a supplementary income can sustain the farm alone, now that the expenses of running the dairy farm are gone.

“It’s going to be one day at a time … ,” Keppler said. “Don’t got no backup plan …. First time in my life I don’t got a steady paycheck.”

Keppler’s farm was part of the farmer-owned dairy cooperative through Cabot Cheese in Vermont. The milk produced at his farm was delivered to Cabot, where it would be processed. A month later, he’d get a check back with what he earned, and often it was less than what he spent on his cows and his farm.

“It’s been under for years now,” Keppler said. “We’ve just been holding on and holding on and hoping for better days.”

Keppler said that he was paid about $15 per 100 pounds of milk (roughly 11 gallons of milk) before he decided to close the farm. It’s the same price that his parents were paid during the 1960s and 1970s, he said. The difference being, of course, the cost of everything else, he said, including feed for the cows ($1,200 a month), diesel for the tractor ($3 a gallon), and the tractor itself ($50,000 to $70,000).

“When you work 14 hours [a day] and get paid nothing — I get tired,” he said.

When Keppler took over in the 1980s, milk was around $17 to $18 per 100-weight, he said. Even a few years ago, there was a spike in prices that saw milk going from $14 to $24 and $25 per 100-weight.

Keppler attributes the most recent price drop to the surplus of milk in the country. He blames most of this on factory farms, which he defines as those having 500 to 5,000 cows.

Keppler also noted that production has gotten “too good,” saying that an average cow has gone from being able to produce 15,000 pounds of milk per year to being able to produce 28,000 pounds of milk. His daughter added that so many more people are no longer drinking milk.

Keppler said that he was fed up with local politicians who didn’t offer concrete answers. He had grudgingly applied for any program offering assistance to the farm but didn’t qualify, Keppler said.

“A farmer don’t want handouts,” he said.

He thinks a quota system could work, but that it wouldn’t provide relief until a few years after it was enacted.

“Big farmers don’t want that … ,” said Keppler. “Family farms would love that, because it would hurt the big farms and help the small farms.”

Glut explained

Where did this glut, and subsequent price cuts, come from?

Ammerman said that there had been a push four or five years ago for farmers to increase their production as milk prices increased.

Yogurt proved to be an incredible drive, especially Greek, or strained, yogurt which is produced with more milk. Farmers restructured their businesses, often buying more animals.

Ammerman said that yogurt and cheese remain in high demand, but demand for fluid milk has decreased.

The problem, was, said Ammerman, when demand was no longer as high, farmers still had the same amount of milk to sell.

“You don’t just turn off the cows’ production,” he said.

Farmers aren’t likely to be selling some of their cows or cutting back on production in any way, said Ammerman, despite the glut of dairy. The “double-edged sword” is that farmers now need to produce that extra milk to make the most of the low prices received for them.

“Our farmers set our policy,” said Ammerman. But, unlike Keppler, most farmers don’t want a quota system or a supply-management put in place, he said.


What solutions, then, are out there for farmers?

Ammerman said that the Farm Bureau has been looking at the federal Farm Bill for answers: changes to the Dairy Margin Protection Program — a safety-net program for small and medium-sized farms — a new crop insurance program, and asking the United States Department of Agriculture to look into a milk-pricing system that would better inform farmers about the market for dairy.

Ammerman said that the bureau is also advocating to reduce regulations for dairy farms to increase production, and to have the state help with marketing local milk.

But at the state level, there is less that can be done, said Ammerman.

“It is a hard situation because ultimately it comes down to supply and demand,” he said.

So what can be done at the state level?

According to Richard Ball, the New York State Agriculture Commissioner, his department has been active at the federal level in lobbying for policies to help dairy farmers, stressing as the importance of trade.

The department will also participate in the Tri-National Agricultural Accord, in which agricultural officials from Canada, Mexico, and the United States meet to discuss trade and development issues in agriculture.

At the state level, said Ball, the department has reconvened the Milk Marketer Advisory Council, which is made up of members from the Farm Bureau, the Secretary of State’s office, Cornell University, dairy producers and processors, and dairy farmers.

According to Ball, what the state can do to alleviate the situation is to help increase the productivity of dairy farms by modernizing. He said the state has, over the last two years, invested over $50 million in farms to increase their capacity.

The department has partnered with Empire State Development to market local milk and other dairy products with its “New York Grown and Certified” program.

“We happen to be a few hours away from the biggest market,” Ball said of New York City.

Ball also said that the state has combined its anti-hunger efforts with boosting dairy profits by providing incentives in school cafeterias to have at least 30 percent of their menus be made from New York State products.

Ball said that, rather than “supply management,” which is what a quota system is, the industry is going toward “managing supply.” He said farmers didn’t want government to dictate how many cows they could have, and that the government can either try to throttle milk production or encourage market growth.

Ultimately, said Ball, it comes down to either selling more product or trying to have a viable production.

World view

Ammerman said that a major factor in a surplus on the domestic market is the constraints on exporting milk overseas. Low demand overseas stems from a number of factors, he said, ranging from Russia closing off dairy imports and creating a glut in Europe, to increased production in places like New Zealand.

But the main issue now lies in volatile trade deals with countries like Canada, Mexico, and China. Milk had been increasing in price, reaching $18 per 100-weight, said Ammerman. Then, when Trump’s trade wars began in June, prices fell by 10 percent, he said, and cost the state $125 million.

President Trump’s tariffs against China total $200 billion, with China retaliating with its own tariffs on $60 billion worth of U.S. goods. Retaliatory tariffs from China and Mexico are estimated to cost dairy farmers as much as $16 billion.

While the president came to a tentative agreement with Mexico — a huge purchaser of New York milk — a month ago on the North American Free Trade Agreement, he has threatened to remove Canada from the agreement altogether — although Congress has said this can’t be done on the current U.S. legal path.

The dairy market could be a key component of NAFTA talks with Canada. Canada’s dairy market operates under its own supply-management system, but also targets U.S. dairy imports through tariffs to make it cheaper for Canadians to purchase items like ultra-filtered milk domestically.

The most positive outcome, according to Ammerman, would be Canada opening up trade for U.S. dairy imports, particularly a new product known as ultrafiltered milk, which has a higher concentration of protein and can be used as a muscle-building sports drink or for creating dairy products like cheese, said Ammerman.

It is produced in western New York, he said, and the product is valued more highly than standard milk due to its increased protein content. In April 2017, said Ammerman, Canada’s quota system took effect and reclassified ultrafiltered milk.

Knox Valley Farm

On Monday night, Keppler was trying to load a 2,000-pound bull he had been loaned into a trailer to return the bull to its Westerlo farm. That and another smaller bull would make up the last of the cattle on the farm. Two young beef cattle had been brought into a barn to be raised not for a profit but for meat.

A skinny barn cat ran across the deserted milking room, and the Kepplers’ two dogs — who had been traveling in tandem — split up, one following Cheyenne Keppler as she went to turn off a hose for water for her horses, and the other following her father as he drove a small bulldozer.

She remarked that they really were farm dogs — they were used to riding in the bucket of the machine.

Paul Keppler’s attempts to coax the bull into the trailer failed. He said he had been trying repeatedly for months now, but the bull wouldn’t budge, and he wasn’t going to force it.

That evening, Cheyenne Keppler walked inside the milk parlor for the first time since the cows had been moved off the farm.

“It’s too quiet,” she said.

The Keppler’s Knox Valley Farm is over 150 acres tucked between the hills in Knox at the foot of a dead-end road. Fields of corn surround the turquoise barns, which stood out against a darkening sky. Paul Keppler remarked correctly on Monday night that he expected a cold rain the next day.

The day most of the dairy cows were taken away, Cheyenne Keppler said she rode her four-wheeler to the top of a hill and watched as they were loaded into trucks. She assumes the cows were split up and sold in small groups — no one could buy 62 cows at once these days, she said.

She wondered if they would have the same treatment they had gotten at her father’s farm, with pastures to roam in and the healthiest grain to eat. She regrets that the next generation of her family won’t have what she and her sister had.

“You never think that this is going to happen, and then one day, it does,” she said.

She said that there had always been times where her father would tell the family that the farm might be in trouble, as even the weather could change the outcome of its profits. The milk checks kept coming in with lower and lower amounts.

One day, the man who was hired to milk the cows at night stopped showing up. After realizing the cows were going to be sold, her uncle, Patrick Keppler, found a job at the factory Hannay Reels in Westerlo. Her father found out that an auction was coming up — and everything came together.

She worries now not so much for the farm, but for her family. Her father, she said, is “stubborn as a bull,” and would never want to work for someone else.

She has memories of her father working through Christmas and Thanksgiving on the farm. Finally, she said, he’ll be able to spend all the holidays with them, though she wished it were for other reasons.

“He never thought that this was going to happen to the industry,” she said.

But he was adamant that no one should feel sorry for him.

“I’m not down and out … ,” he said. “I’ve made the choice … Now whether it was the right choice or not, time will tell.”


Dairy Farmers of America explores blockchain technology

As companies across the globe increasingly embrace blockchain technology, Dairy Farmers of America, a national cooperative owned by dairy farm families across the U.S., is testing blockchain’s capabilities in the area of food and agriculture. DFA has partnered with, a food tech startup focused on using blockchain technology to transform the food supply chain for data transparency, so consumers can be confident in their food from farm to fork. Through the pilot project, DFA is hoping to increase supply chain transparency and better connect our farmer owners with customers.

“Consumers today want to know where their food comes from and blockchain technology, like, gives consumers real-time data, which can really help increase trust and confidence about food production from start to finish,” said David Darr, vice president sustainability and member services at DFA.

The pilot project is utilizing the platform and leverages data from a group of DFA member farms as well as one of DFA’s manufacturing plants to support more consumer engagement.

“We know that there’s a lot of application for blockchain technology within agriculture, and we ultimately want to help our dairy farmers be on the forefront,” Darr said. “For now, our goal is to evaluate the technology and explore how it might benefit our supply chain.”


Recently, completed the 2018 Sprint Accelerator program, which is also sponsored by DFA. The Accelerator is a 90-day, immersive program that helps accelerate and grow startup businesses.

“We’ve led and participated in many other pilot projects and know there are tremendous possibilities with blockchain and agriculture,” says Raja Ramachandran, CEO and co-founder at “DFA has been a great partner for us, and we look forward to working with them to better understand the potential value blockchain can provide for dairy.”


European cheese slow to arrive in Canada despite trade deal

With more dairy concessions on horizon, EU deal reveals challenges of opening the Canadian market

As Canada marks the first anniversary of its trade deal with the EU this month, consumers may be wondering why they aren’t seeing more European cheese in their local stores.

New varieties have been slow to trickle in — a reminder of how complicated it can be to pry open Canada’s protected market.

Canada also agreed to import more foreign dairy products in the Pacific Rim trade deal now being ratified. And even more access to Canada’s domestic market appears to be part of the current renegotiation of NAFTA.

The Comprehensive Economic and Trade Agreement (CETA) was provisionally applied on Sept. 19, 2017. More European cheese began to arrive last fall.

“It’s not totally clear how this is implemented in Canada,” said Bernd Lange, the German member of the European Parliament who chairs its international trade committee and continues to monitor how the deal he helped broker is working out.

In an interview with CBC News this summer, Lange said that when Canadian and European officials gather for their first joint committee meeting this fall, the EU side will raise the concerns of European cheesemakers who aren’t sure they’re getting all they bargained for, thanks to the way Canada is administering its imports.

International Trade Diversification Minister Jim Carr will host European Trade Commissioner Cecilia Malmstrom in Montreal Sept. 26-27 for what’s being billed as “stocktaking and a promotional tour.”

Data available online suggest why Europeans may be concerned.

A thin slice of quota

For 2018, the first full year the trade deal is in effect, Canada agreed to import 5,333 tonnes of EU cheese.

As of the first week of September, only 1,821 tonnes of EU cheese had been imported — just over a third of the amount Canada agreed to allow in. Even taking seasonal buying into account (cheese is popular during the holiday season), the imports aren’t on pace to meet Canada’s commitments.

Separately, the CETA increased the EU’s share of Canadian dairy imports under World Trade Organization rules. About 68 per cent of that total was used by Sept. 5.

Smaller volumes of cheese imports were allocated for Sept. 21 to Dec. 31, 2017. Roughly 96 per cent of the total allowance arrived.

Between now and 2022, the amount of cheese Canada has committed to import annually from the EU will rise gradually to 16,000 tonnes.

There’s also a five-year phase-in period for imports of EU industrial cheeses (used in food processing) up to a limit of 1,700 tonnes. Canada isn’t close to importing as much industrial cheese as it promised, either.

The federal government grants licences to control which businesses import EU cheese. Then-trade minister François-Philippe Champagne decided to split the imports 50-50 between Canadian grocery retailers and processors currently active in the domestic cheese industry.

The federal government also split the imports 50-50 between large and small or medium-sized enterprises, to give a range of businesses a share of the profits.

CBC News asked Global Affairs Canada for a breakdown of 2018 imports according to the categories the department set when it awarded its import licences. It declined to release this data, making it impossible to find out what categories of importers may be lagging — retailers or processors, small or large.

“We’re following it closely,” said Mathieu Frigon, president and CEO of the Dairy Processors Association of Canada. “We do understand there are some players for which this is new business, and it might require time to set up.

“I suspect at the end of the year the fill rate will be 100 per cent.”

When import quota has been allocated to dairy processors, they have never failed to use it, he said in a later statement.

“What we are seeing now,” he said, “is that [quotas] have been allocated to retailers and distributors that have little expertise and know-how in importing short shelf-life products such as the soft cheeses that the Europeans would like to bring in.”

On background, a senior federal official also expressed confidence that all the imports would arrive by the end of the year.

Parmesan, cheddar top EU imports

Travellers to Europe often enjoy inexpensive cheeses they can’t find at home. Has the EU deal brought them to Canada?

Online data show the most common products from the EU so far in 2018 were varieties of parmesan, making up about a third of the new cheese imports. Parmesan has a long shelf life, making it profitable to ship longer distances.

Other common imports were varieties of cheddar, gouda and brie.

Canadians ate a lot of domestic cheddar before the imports arrived. Is the EU agreement living up to its promise of offering consumers more choice, or simply bumping off Canadian cheese?

You can’t draw that conclusion from the data, according to Karl Littler of the Retail Council of Canada. New varieties coming in from Ireland or the U.K., for example (think of Lancashire, Wensleydale or Cheshire cheeses) may be lumped into import categories that seem like cheese already available in Canada, but they’re actually unique.

“We may well be seeing more diversity within that category,” he said.

High compliance costs

The retailers Littler represents lobbied for the right to import all the new cheese, not just half of it. Having domestic processors import cheese adds another middleman to the supply chain, they argued.

“The closer you put it to the consumer, the fewer people who are tollgating it through on the way, the greater the likelihood that consumers will see the price benefit,” Littler said.

If importers don’t run their own stores or sell online, they have to negotiate shelf space with grocery chains, often at considerable cost.

But dairy farmers and domestic processors asked the government to give them a slice of import profits, as compensation for their lost market share. Over the next two decades, dairy processors say, the implementation of the CPTPP will result in a $700 million loss in their return on investments.

Global Affairs Canada requires detailed audits from importers, causing some to question whether their compliance costs are worth the benefit they’re supposed to be realizing from this freer trade.

Importers were told to return any import quota they weren’t going to use by Aug.1, so it could be reallocated.

The government won’t disclose how much quota was returned. It also will not say how it reallocated any returned quota.

CPTPP, NAFTA focusing minds

Lessons learned from the European experience may need to be understood quickly.

While the CETA offered new market access for just one product — cheese — the Comprehensive and Progressive Trans-Pacific Partnership now being ratified by its 11 Pacific Rim partners provides new quotas for 20 types of dairy, egg and poultry imports, phased in between 11 and 19 years.

It’s unclear whether shipping logistics make it practical to import products from categories like fluid milk, eggs or fresh poultry from across the Pacific, but the new quotas were designed with American products in mind. U.S. President Donald Trump subsequently withdrew from the Trans-Pacific Partnership, but the quota wasn’t adjusted.

How much access Canada provides to Americans, and for what specific products, remains a bone of contention.

Without speculating on the outcome of the NAFTA talks, Frigon said dairy processors are “adamant that any new dairy imports should not follow the CETA model.”

Meanwhile, Global Affairs Canada held a consultation over the summer to hear feedback on how to fulfil its CPTPP commitment.

Littler suggested that if the new CPTPP quota was divided up similarly between small and large, and retailer and processor categories, the volumes for some of the new products — at least in the early years of the long phase-in period — might be too small to be worth bidding on.

Cheese is a high-margin product. Milk powder, for example, isn’t.

The minister for trade diversification told CBC News last month he was “making no assumptions” and “relying in this case on consultations” to figure out how to administer the next wave of imports.

“We’re always looking at fixing things that aren’t working well enough, and improving the way things have always been done,” Carr said.


Source: CBC News

Leadership & Vision: A View from the Sidelines – The 2018 Dairy Cattle Improvement Industry Forum

The Bullvine’s Murray Hunt was one of the presenters at The 2018 Dairy Cattle Improvement Industry Forum and the 23rd Annual General Meeting of CDN. Watch at Murray discusses Industry Leadership & Vision: A View from the Sidelines and ask the question: “Are we varnishing the past or building the future?”




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Australian milk levy a ‘con job’, dairyfarmers group says

Supermarket giants Coles and Woolworths have been accused of ‘tricking’ consumers with their introduction of a drought levy on milk for dairy farmers.

Mathew Trace, the vice president of the dairy farming organisation that pushed for the levy, accused the supermarkets of doing a con-job on the public by applying the levy to only a couple of lines of milk.

The supermarkets’ approach would deliver an average of between only half a cent and one cent a litre to farmers, rather than the 10 cents the Queensland Dairy Farmers Organisation had been campaigning for.

Mr Trace says farmers are devastated by the outcome.

Mr Trace today added to these concerns saying he feared the levy, as it has been imposed, could actually make things worse for dairy farmers by encouraging people currently buying branded milk, which provides a higher return to farmers, to instead buy the own-brand milk with the levy on it.

Queensland Drive invited representatives of both Coles and Woolworths onto the program today to respond to the issues raised by Mr Trace.

Neither accepted our offer.

Coles provided this statement:

“100 per cent of the money raised through the 30c price rise on 3L Own Brand milk will be available to dairy farmers dealing with the impact of drought across the country.

“Coles is also supporting Norco’s decision announced earlier this month to increase farmgate prices paid to dairy farmers by 5c per litre.

“With the generous help of our customers, we’ve already committed almost $12 million to drought relief, including $5 million from the Coles Nurture Fund, to assist drought-affected farmers.”

Woolworths referred us to their initial media release saying its levy was not intended to solve structural issues within the dairy industry, saying that was a matter for the government to resolve, following the release of an ACCC report on the issue.


Top 20 Milk Processors collect 25% of milk worldwide

IFCN, the Dairy Research Network, published the IFCN Top 20 list of milk processors around the globe. This list is published every second year and shows the market share of biggest milk processor giants.

New results from IFCN Top 20 Milk Processors List 2018 shows that 25.4 % of produced milk worldwide is processed from top 20 dairy giants. The total collection of top 20 milk processors rose steadily from 200 in 2015 to 211 million tonnes of milk in 2017. Like the 2016 ranking, Dairy Farmers of America topped the list in 2018 with 29.2 million tonnes milk intake holding 3.5% of the total market share of world’s total milk production.Top 3 Leaders DFA, Fonterra, Lactalis of the list stay stable their positions compared to the previous ranking in 2016.

The companies Arla, Nestlé and Friesland Campina take ranks 4 to 6 with milk intake of ca. 14 mill t milk intake.Saputo increased intake by about 2.1 million tonnes milk through the acquisition of the Australian Murray Goulburn company. 

Amul from India is a new entry in the Top 10 ranking in 2018 with 9.3 million tonnes milk enjoying shifting from 13th to 9th position since previous ranking in 2016. This shift was driven by growing milk intake and the fact that IFCN decided to standardise milk intake from natural content to 4 % fat and 3,3 % protein.

Two big Chinese milk processors, Yili Group and Mengniu show rise in milk intake by about 1 million tonnes since 2016 ranking list, together summed 13.6 million tonnes milk. 

It is worth mentioning that estimated turnover per kg milk ranges between 0.5-2.0 USD kg in 2017 which is average 1.0 USD for top 20 milk processors. Every even year published IFCN Top 20 Milk Processors List provides validated, comparable variables to better understand the large dairy processors worldwide.

Source: IFCN

Fonterra director election system diluting farmer influence

Canterbury dariry farmer John Nicholls.

Fonterra’s director election system is diluting farmer influence on the board by selecting directors who don’t depend on the monthly milk cheque for their livelihoods, says election candidate John Nicholls.

The Canterbury dairy farmer is one of five contenders for three farmer-director vacancies on the board of New Zealand’s biggest company.

Nicholls is self-nominated with the required support of 35 shareholders to stand for election.

Fellow Cantabrian farmer and former director Leonie Guiney is also self-nominated.

The pair chose not to take part in Fonterra’s so-called independent nomination process, in which candidates are nominated by the board after being recommended by an independent selection panel.

The other three candidates, Zespri chairman Peter McBride, agribusinessman and Māori Television chairman Jamie Tuuta, and sitting director Ashley Waugh who is seeking re-election by rotation, came through the independent nomination system.

Nicholls, who owns six dairy farms in mid-Canterbury, said he was “really struggling” with Fonterra’s farmer-director election system.

Fonterra, a farmer-owned cooperative with dividend-carrying public units on the stock exchange, has up to 11 directors. Seven must be shareholders through dairy farming interests, and four are independent and appointed by the board.

“We are selecting directors whose livelihoods don’t depend on the milk cheque on the 20th of each month. The system is effectively diluting farmer influence on the board at a time when we need to win the hearts and minds of shareholders and farmers,” Nicholls said.

Fonterra, an exporter formed 17 years ago under special enabling legislation to be a national champion, has sparked a crisis of confidence among its farmer-owners through heavy investment losses in China, weak financial performance and destruction of shareholder value. Its share price has fallen more than 20 per cent since the start of the year.

This month the company posted a historic annual loss of $196 million. Its performance has been under fire from the Beehive.

Former chairman John Wilson and chief executive Theo Spierings recently exited about the same time.

It was left to new chairman, long serving farmer-director John Monaghan, and interim chief executive Miles Hurrell to announce the annual loss.

Seventeen years on and still mostly producing commodity products, Fonterra’s balance sheet is showing the strain of conflicting demands on its earnings. As a cooperative it must meet its shareholder-suppliers’ expectations of the highest possible milk price, while finding enough capital to fund a promised value-add product strategy.

Trying to resolve its capital issue, along the way it has listed units in farmer-owned shares, effectively becoming a hybrid. Neither farmers or investors appear happy with the results.

Nicholls’ concerns reflect the tensions over purpose and delivery that have developed.

“The loyalty and engagement of our fellow farmers and the support of New Zealanders is critical to a strong Fonterra and yet we are losing their trust,” he said.

Other candidates also cite the need to restore confidence in Fonterra – and its balance sheet.

McBride, who is a shareholder in a large Tokoroa dairy farm and is chief executive of Trinity Lands, a 19-farm entity in south Waikato, said Fonterra needs to re-establish relationships.

“It has a key challenge to re-establish its relationships with the New Zealand government, the public and indeed to win back the hearts and minds of its own farmers and shareholders.”

McBride steps down as Zespri chairman in the New Year and as a director in July. He will have been on the board of the national kiwifruit marketer for 17 years.

“The performance of the company [Fonterra] and some of the decisions that have been made concern us. It’s essential for New Zealand farmers that the dairy industry has a successful co-op leading it.”

Leonie Guiney, who left the board last year after three years, saying she was prevented from standing for re-election, wants to contribute to “a different direction”.

Guiney has recently settled with the Fonterra board after suing it for defamation.

The board took court action earlier this year gagging her from speaking about Fonterra business.

“We need to clarify where our comparative advantage is. The jewel in our crown is the ingredients business. But first we need to protect our balance sheet because we are not in a strong position.

“And we have to stop investing outside our capability which we’ve been doing a lot,” she said.

Jamie Tuuta, who is the Māori Trustee and has held executive and governance positions in the agribusiness, fishing, investment, health and education sectors, said Fonterra was critical to New Zealand’s economic and environmental success.

Making Fonterra a global leader required it to maximise the value of farmers’ milk and make quality decisions regarding capital allocation, he said.

“We are operating in a very dynamic environment that requires the cooperative to understand our risks and devise means to reduce exposure and build our resilience.

“We have mounting public pressure domestically and need to win the confidence of the government whilst at the same time ensuring that we continue to focus on a consumer-led strategy that is globally competitive and delivers value to our shareholder-farmers.”

Sitting director Ashley Waugh is seeking a second term on the board.

The Te Awamutu farmer is chairman of Moa Brewing and a director of Seeka and Colonial Motor Co. He is a former chief executive of Australia’s National Foods.


Michigan lost 143 dairy farms in the past year

According to updated numbers of Grade-A dairy permits from the Michigan Department of Agriculture & Rural Development’s (MDARD) Dairy Division, the state has lost 143 dairy farms in the last 12 months. (MGN)

According to updated numbers of Grade-A dairy permits from the Michigan Department of Agriculture & Rural Development’s (MDARD) Dairy Division, the state has lost 143 dairy farms in the last 12 months.

In addition, Michigan Farm Bureau Livestock Specialist Ernie Birchmeier says that Michigan is producing too much milk for existing processing capacity.

Michigan cows produce an average of 72.3 pounds of milk each day.

Birchmeier said a study of the numbers hint at a more troubling symptom currently haunting Michigan’s dairy industry.

“The 10 percent losses in Grade-A dairy permit licenses, contrasted with a relatively minor 1.2 percent reduction in cow numbers and less than a 1 percent reduction in total monthly production, means those cows from the 143 operations that opted to get out of milking cows, are simply being relocated to other operations, and/or, they are being displaced by freshening heifers entering the state’s dairy herd,” he said.


Saputo raises farmgate milk price

Canadian dairy giant Saputo has lifted its farmgate milk price for its southern suppliers with the step-up to be paid next month.

In a statement yesterday, Australia’s largest milk processor said it would increase its price by 14 cents a kilogram of butterfat and 28c/kg of protein. It said this took its southern region price to $5.95 a kilogram of milk solids from an opening of $5.75kg/MS.

Other dairy processors have yet to step-up prices this season, but some started the year ahead of Saputo.

Saputo traditionally reviews its milk price quarterly, in October, January, April and June.

Yesterday’s step-up will be paid next month with proceeds from this month.

The step-up comes as preliminary Dairy Australia figures, seen by The Weekly Times, reveal a production drop of 3.9 per cent across Australia for the financial year-to-date.

The biggest plunge has been in Victoria, with August production down 6.9 per cent compared to the same time last year. In western Victoria — Saputo heartland — it was down 11.9 per cent for August.

This comes as dairy farmers continue to move processors as they case better farmgate milk prices and cull cows as the fodder shortage and dry conditions bite.

NSW market milk Saputo suppliers also received a step-up today.

Their price will rise 28 cents a kilogram of butterfat and 42c/kg protein. This takes the price to 52 cents a litre, according to Saputo a rise from 49.6c/litre.


a2 Milk becomes first mainstream UK dairy brand to ditch plastic bottles

The first mainstream fresh dairy brand to switch from plastic milk bottles to cartons goes on sale in UK supermarkets on Wednesday, in the latest drive to reduce the use of single-use plastics.

With millions of plastic milk bottles disposed of daily in the UK, a2 Milk is switching to 100% recyclable paper-based cartons that use 80% less plastic than bottles and carry the Forest Stewardship Council label. That means they are made with pulp from FSC-certified forests and/or recycled sources.

The UK uses 38.5m plastic bottles every day, of which 15m are not recycled, and they are now standard packaging for mass-produced cows’ milk sold in UK supermarkets.

Cartons are already used for long life or ambient milk and drinks, and for chilled drinks including non-dairy (soy, rice, oat and almond) milk substitutes, but this is the first such move into UK supermarket chiller sections by a fresh milk brand.

In the UK, plastic waste has become a highly emotive national issue, with TV programmes such as Blue Planet II exposing its impact on the oceans and warning of the dangers of a global plastic binge.

This backlash has led to more people signing up to doorstep deliveries for milk in traditional glass bottles, although its share of the sector across the country remains steady at about 3%, according to trade body Dairy UK.

Research from Kantar earlier in the year highlighted consumer worries about plastic in the UK – a quarter (25%) expressed “extreme concern” about plastic and 21% said industry should go even further and opt for entirely plastic-free packaging.

The a2 Milk brand is growing in the UK (it has a 10% market share in Australia and is big in the US) and has become popular for people who suffer an adverse reaction to regular milk. It comes from selected cows on farms in Shropshire, Cheshire and north Wales that produce milk containing only the A2 beta casein protein type, and is free from the A1 protein type present in conventional milk, which some people believe is harmful.

“It is hugely impressive that a relatively small brand in the dairy industry should be the first to make the switch from plastic bottles to paper-based cartons,” said Rosie Teasdale from the Forest Stewardship Council UK. “If all milk in plastic bottles used in the UK were changed to cartons we could significantly cut plastic use.”

The move is the result of a new partnership with Crediton Dairy, a supplier of flavoured chilled and long life milks and creams to the UK retail trade.

The a2 Milk Company has always been a pioneer and the introduction of our new sustainable cartons in the UK market is another first,” said Simon Hennessy, general manager, international development of the a2 Milk Company.

In the US, the inventor of the milk carton took out his patent in 1915 and the storage method has largely replaced glass bottles.


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