Archive for Dairy Industry – Page 2

World has had dairy oversupply for 50 years

There has been a worldwide oversupply of dairy products for much of the past 50 years. In the 1970s, Rep. Kiki Delagarza, chairman of the House Agriculture Committee, expressed an understanding for the need for supply management of dairy.

However, the rest of Congress decided to go the way of “Fantasy Island,” a term used by Rep. Delagarza. Congress decided to ignore the need for a supply management system for dairy. The oversupply situation has only gotten worse since then, leaving many farmers penniless and farm communities broken.

Canada’s supply management system is a realistic response to the worldwide oversupply of dairy products. We have chosen a very harmful and unrealistic policy of little to no controls. This is why we have the continuing dairy farm crisis.

Our nation sees the ownership of land going to fewer and fewer landowners; they are often dependent on out-of-the-area lenders. This historically has not boded well for any nation.

Samuel Dyer, who was quoted in your May 1 dairy article, understands this problem very well after being in the dairy industry for 35 years. Rep. Elise Stefanik should listen to him. She should support the institution of a supply management system for our dairy farms. Why would anyone who is in the know suggest a program to encourage young people to get into the dairy industry when only misery is in the offering with the ongoing oversupply situation?

Dr. George Palmer, who was also quoted in your May 1 article, asked why we can’t export the powdered milk. The reason is that there is a worldwide surplus of dairy products. It is poor business to produce for a nonexistent market. The price received is below the price of production. Why would anybody do it?

The family farm system, supported by supply management, is good for the consumer and for the producer. It is definitely good for the greater agricultural community.

Our elected officials should be reasonable and support supply management for the dairy industry. You can no longer ignore the fact that we’ve had a worldwide oversupply of dairy products for more than 50 years.


Source: Watertown Daily Times

Utah dairy farmers struggling to stay afloat

Farmers in Utah – and across the country right now – are struggling to stay afloat. Some are going under and there are even reports of farmers committing suicide.

Milk prices are continuing to drop and Ron Gibson, a dairy farmer in Weber County tells us he has been operating at a loss for the last 6 months.

In spite of that he loves what he does. He is a 6th generation farmer and says if things continue to go badly, he might consider selling some of the land – but has no desire to sell off everything.

He wants to pass the farm on to his children and keep another generation of farming going.

He says, if you want to help farmers, shop local and try to visit the farmer’s market when you can.


California Dairies, Inc., Dairy Farmers of America and Land O’Lakes, Inc. Announce Unified Support of the California Federal Milk Marketing Order

The three largest milk marketing cooperatives in California, California Dairies, Inc. (CDI), Dairy Farmers of America (DFA) and Land O’Lakes, Inc., today announced that, on behalf of their respective members, they have voted in support of the California Federal Milk Marketing Order (CA-FMMO) as proposed by the United States Department of Agriculture (USDA).

Since the very beginning the three cooperatives collaborated to create a potential California Federal Milk Marketing Order as a means of helping the state’s dairy farmers receive more equitable, market-based milk prices.

“Three years ago, farmer leaders of our cooperatives agreed to work toward a change in the regulatory structure, one that would benefit California dairy farm families. Following careful consideration of the final decision issued by USDA, we believe the proposal will better address disparities between farm gate prices in California and the rest of the nation. It is our pleasure to now conclude this administrative process with joint support for the proposed Federal Order language,” said the three cooperatives in a joint statement.

After USDA’s release of the final decision on March 30, the three cooperatives held educational sessions for their member-owners to provide an overview of the final decision, address specific questions and discuss their voting preferences. Each of the cooperatives then participated in bloc voting, meaning a single affirmative vote from each cooperative represents the voting cooperative’s total membership in the state.

USDA will officially announce the results of the referendum in the coming weeks. If the results support approval of the CA-FMMO proposal, the new system is expected to be in place by November 1, 2018. 


Source: PR Newswire

1 Percent Chocolate Milk In Back in US Schools

The U.S. Department of Agriculture will allow all schools to offer 1% flavored milk in school lunch, breakfast and Smart Snacks for the 2018-2019 school year without a special exemption. 

Schools now have the flexibility to offer additional milk options in schools to ensure children receive the nutrients provided by milk. Check out this survey to learn about the potential impact of serving 1% chocolate milk in schools.


Source: NDC

Small dairy farmers are disappearing as milk prices stay low

The Boedeker Brothers Farm is the last dairy farm left in Lincoln and Pike Counties Missouri, and come Wednesday the heard that was built over 80 years will be dismantled in a matter of minutes.

The Boedeker Brothers Farm was started in 1936. Tom, Joe Burt, and Bill Boedeker have been working on the farm all their lives. A job they work seven days a week starting around 5 a.m. and ending about 8 p.m.

Tom Boedeker said there used to be about 20 other small farms near them but now they are the only ones left.

Right now, the Boedekers have 80 cows but on Wednesday they have to take them all to auction. Tom said a lot of other small dairy operations they can no longer make a profit. He said milk prices have been extremely low for about two and a half years. Small dairy farms are struggling to make enough money to keep operating.

Tom said the mega-dairy operations are taking over. They can milk for 24 hours a day and processors can pick up one trailer load of milk there instead of stopping at 15 smaller farms. He said they are keeping milk prices so low that small farms can’t buy new machines or cows to keep up.

According to the Missouri State Milk Board, Missouri lost 63 Grade A dairy farms from 2016 to 2017.

The Boedeker family can’t imagine a farm without cows come Wednesday but they will continue to farm, focusing on their corn and beans.


Crackdown on New Zealand dairy outputs always on the cards

OPINION: Arguably the most predictable thing about Environment Minister David Parker’s comments on Sunday that under the new Labour-led Government, some dairy farmers may have to reduce cow numbers in order to address the pollution of the country’s waterways, was that it would be seen as an attack on the dairy industry.

When it could easily be argued that what Parker’s comments on TVNZ’s Q+A programme were really a signal that a process that has been under way for some years would continue, and thus should have come as no surprise to the industry.

Parker implied things may have to shift scale for some farmers. Those would be the ones he believed were “in denial” about the contribution of dairy farming to the pollution of the country’s rivers, who would “have to be regulated to do the right thing”.

Realistically, though, regulation of dairy farming’s effects on fresh water, via limits on the nutrient loads allowed to leach into waterways from farms, has been around for years, with numerous examples highlighted in the media of individual farmers trying to address the issue on their own properties, through practices such as riparian planting and the fencing of streams and rivers to keep stock out.

Most affected farmers should therefore have been pleased to hear he was not proposing limits on inputs like stock numbers per hectare or the amount of fertiliser they can use, but looking to continue the traditional New Zealand focus on environmental effects, the outputs of farming activities. That allows farmers to make their own decisions in pursuit of set environmental targets.

In Canterbury, Plan Change 5 to Environment Canterbury’s Land and Water Regional Plan, which has been in train for several years, and, according to the ECan website, is currently the subject of seven appeals to the High Court, would see some farmers having to change their practices, possibly through reducing herd sizes, to cut nutrient discharges, ECan chairman David Bedford predicted in 2017.     

Of course, the need to reduce stock numbers on some farms, with Parker’s indication this will not be compensated, because “you don’t compensate people for stopping polluting”, is sure to draw some industry fire.

But there shouldn’t be too much protest, certainly not on party political lines, when it’s taken into account that a Ministry of the Environment report released in April 2017 found there had been a 69 per cent increase in dairy cattle numbers nationally between 1994 and 2015. In Canterbury, Statistics NZ figures showed a six-fold increase, from 200,000 to more than 1.2 million, from 1994 to 2016, hardly surprising given the sheer volume of dairy conversions over a number of years, some in locations, like the Mackenzie Basin, seen by the environmental lobby as completely unsuitable for dairying.      

While Opposition leader Simon Bridges on Monday characterised Parker’s comments as “an attack on the regions”, his own National colleague, and then Minister for Primary Industries, Nathan Guy, acknowledged when the report was released last year that there was a limit to how many dairy cows New Zealand could support, and the industry’s future would rely on increasing the value of its exports.

For dairy farmers leveraged to the hilt, who could now be faced with reducing stock or even changing their land use, Parker’s words may be difficult to swallow, but the figures show it was always going to happen. All a change in government has done is to hasten the inevitable. 


Source: Stuff

Not your grandparents’ dairy: Washington operation shows scale of modern milk production

Case VanderMeulen’s oldest brother inherited his family’s 100-cow dairy in the Netherlands. So the younger brother came to America and built his own milking enterprise that never sleeps.

He has 68 full-time employees who milk his 6,800 Holstein cows three times a day in two huge milking parlors. The farm also grows some of its feed and operates its own water processing plant on the sprawling 3,300-acre Coulee Flats Dairy he purchased a decade ago outside of Mesa, Washington.

Built on an existing crop farm and expanded over time, Coulee Flats operates 24 hours a day, every day, and now grosses between $30 million and $50 million a year.

“I’ve got milk running through my veins,” VanderMeulen said. “I grew up in a dairy. It fascinated me.”

VanderMeulen’s fascination has led to a complex, science-based operation that takes byproducts left over from a variety of crops and mixes them with other feeds so that every cow has all the nutrition it needs to produce about 10 gallons of milk a day.

The milk from Mesa is trucked to 11 processing plants, including one in Spokane operated by Darigold, the marketing arm of the Northwest Dairy Association.

That co-operative of about 465 dairy producers in Washington, Oregon, Idaho and Montana then processes the raw milk into everything from jugs of 2 percent for the morning corn flakes to cheese, butter and powdered milk that is exported to 20 countries, including Morocco, Egypt, Japan and China.

Steve Matzen, the senior vice president of the Northwest Dairy Association, said the farmer members of the organization has declined from about 1,600 in the 1980s to about 465 members today. It’s a business that evolved from the early 1900s, when farmers still milked cows by hand.

“Our region is a great place to be a cow,” Matzen said. “The climate is nice. It’s a great place to grow high-quality feed.”

While the number of co-operative members has dropped, production has more than quadrupled through advances in automated milkers and advances in nutrition. It’s the story of conventional agriculture as large and successful farms, orchards, dairies and ranchers get bigger to supply a consistent demand for food from a growing global population.

“In the early 1980s, we produced about 2 billion pounds of milk” from the 1,600 producers, Matzen said. “Now we are producing 8.5 billion pounds.”

The dairies in the regional cooperative produce about 2.3 million gallons of milk a day. All that milk is trucked by a third-party contractor to the Darigold plants, which produce about 35,000 pounds of butter every hour and 195 million pounds of cheese a year.

About 25 percent of the milk stays in liquid form and the rest gets processed into cheese, butter, yogurt and powdered milk. Of those finished products, some 40 percent are exported to other countries and 60 percent are sold to consumers in the U.S., Matzen said.

As a result, fluctuations in the markets anywhere in the world likely will affect the price that VanderMeulen gets paid per pound for his milk in Mesa.

“This gets back to the complexity of milk pricing,” Matzen said. “The things that impact milk prices are not so much what happens in Seattle or Spokane. It’s what happens around the world.”

For example, prices fluctuated in 2017 after farmers, including VanderMeulen’s older brother, in the 28 countries that make up the European Union started producing more milk.

“Then we saw a global imbalance,” Matzen said. “So, we had downward pressure on prices.”

During those times, consumers pay less for milk and producers, like Case VanderMeulen, get less money per pound, even though the cost of feed, fuel and employees may continue to rise.

“It’s something that people really don’t understand,” Matzen said. “It’s pretty impressive how hard (producers) work and what they get done. In our society today, there is such a disconnect between food production and what it takes to produce food. The appreciation just isn’t there like it was 50 years ago.”

Those international influences are why farmers get nervous when officials from China and the United States begin threatening a trade war, he said.

“It could have a negative impact on our farmers,” Matzen said. “If all of the sudden we didn’t have access to international markets, you could imagine the supply-demand imbalance.”

That gets back to the reason why all the producers joined to form the co-operative, which has a staff of 1,600 people who produce, market and promote the dairy products.

“Every one of those 465 farmers are owners of the co-op,” Matzen said. “Our core purpose is to provide a secure market for our member-owners. We’ll be there to pick up the milk and maximize the value.”

Coulee Flats Dairy

Case of Milk

VanderMeulen, 52, came to the United States in 1989 and worked in California after it was clear he wasn’t going to get the family dairy in Holland.

In 1991, he moved to Washington and started with a small dairy in Grandview.

He later operated two dairies in Sunnyside before looking for a new home that didn’t have a growing population, as close-set dairies can cause conflict between new neighbors, and cows in confined spaces can generate a powerful odor.

VanderMeulen began looking to relocate to a place that offered a good labor market, quality roads for transporting his product and access to lots of feed. He found the land that would become Coulee Flats in 2007.

As a result, he was able to design the dairy to maximize efficiency in both production and to meet strict regulations that prohibit waste from leaving the site. The dairy is just off U.S. Highway 395, west of the small town of Mesa, and the prevailing wind pushes the smell away from homeowners. It is one of about 480 dairy farms in Washington that collectively milk more than 200,000 cows.

The farm has long rows of steel roofs that provide shade for the cows in the summer and cover from the rain and snow in winter. When the temperature rises above a certain level, computers kick on sprinklers that allow the cows to cool off.

Crews are constantly moving equipment into the pens to break up the soil to make it soft for the cows, which have milking careers that average about five-and-a-half years. After that, he said, they are sold for beef.

“We treat every cow like it’s our only cow,” he said. “These ladies work very hard. We keep them comfortable. If they are not comfortable, they are not going to work for us very hard.”

When it’s time to eat, the cows walk over to long stretches of concrete slabs that are bordered by the feed bunkers. As the cattle stand and eat their ration, the farm flushes water down the concrete slabs at regular intervals. The water pushes waste downhill into huge steel grates.

That wastewater is then pumped to a treatment facility, which separates out solids and sends the rest of the wastewater to settling ponds where it eventually is recycled back into the system.

“We contain every ounce of water on our facility,” he said.

Front-end loaders load the solid waste into trucks and it’s hauled to another area of the farm, where crews drop it in long rows to compost. A huge machine that looks like a cross between a tank and a combine crawls down the rows and turns the composting waste to ensure it gets enough oxygen.

Within about three months, the compost rows are bagged and sold to landscaping crews or used on the farm as fertilizer.

Leftovers to food

To keep all those cows producing milk, crews must process and haul 370 tons of feed per day, or about 100 pounds of food every day for every cow.

“A big part of a cow’s daily ration is byproducts” that are shipped by train to the Tri-Cities and trucked to Mesa, VanderMeulen said.

The feed includes what’s leftover from corn after it has been processed for ethanol; mill run, or leftovers from wheat after flour production; and similar byproducts from soybean, canola and cotton seeds.

One bin even had what VanderMeulen said were refried beans that had been rejected by Taco Bell.

All are mixed at varying degrees with silage – chopped, fermented corn or other row crops that are stored under plastic. Crews also add vitamins, minerals and supplements and water to aid digestion as the food is mixed.

“Those (cows) out there are transforming byproducts, things we as humans can’t digest, and making a top quality product for us,” VanderMeulen said.


The portions are all dumped into huge mixing machines that create the “total mixed ration.” The mixers push the feed onto a conveyer belt that transports the mixture into a waiting truck.

But it gets even more complicated. A nutritionist visits the farm every week and suggests changes in the diets of some cows. VanderMeulen installed electronic tags in every cow and he has records that can show what that cow ate yesterday or even a month ago.

“Different groups of cows get specialized feed for where they are at in the cycle,” he said.

Cows produce milk for their calves, so the farm keeps them in a perpetual cycle of pregnancy. The cows are segregated based on where they fall in that lactation cycle.

Some pens hold heifers, or young cows that have not yet had a calf, and other pens hold cows that are ready to give birth. Some cows have orange die on their back, indicating they are not yet pregnant. Others have green, which tells the breeder he’s already inseminated them.


The farm has one employee whose sole job is to manage 30 cows that give birth every day. All those calves join about 1,500 others in separate pens. An employee feeds them off of flatbed trailers containing hundreds of milk bottles.

VanderMeuelen’s operation uses specialized, or “sexed” semen to artificially inseminate all the cows, ensuring that about 95 percent of the calves are girls. Any boy calves eventually get sold for beef.

VanderMeuelen used 4001 as the number on the ear tag for the first heifer calf born on his farm. The latest ear tag, this past week, numbered 42,799.

“That’s how many heifers I’ve produced,” he said.

VanderMeuelen said it’s daunting to think of the advances in the industry since he learned to milk his first cow at his family farm. He said technology is already emerging for devices that can tell dairy owners when a cow is not feeling well or when it needs to be bred, he said.

“In 20 years from now, there will probably be a lot of cows milked by robots,” he said. “It’s already been done, but the technology is very expensive.”


SourceThe Spokesman-Review

New report lines up Fonterra beside local competitors

A new dairy industry report says for the first time Fonterra’s financial performance can be benchmarked against its growing New Zealand competitors – and it claims the big dairy company has been found wanting.

A review of New Zealand dairy companies by financial and economics consultancy TDB Advisory said taking a2 Milk, Synlait and Open Country Dairy as being representative of Fonterra’s consumer brands, ingredients and commodity businesses respectively, there is now a performance benchmark for Fonterra and it showed Fonterra has not produced adequate risk-adjusted return for its supplier-shareholders.

Fonterra’s competitors now had aggregate revenues of more than $2.5 billion, a 16 per cent share of the milk processing market at more than 3.5 billion litres a year, and returns on invested capital of more than 10 per cent, said the report, whose authors have current and past close links to Open Country.

TDB said that over the past three years, Waikato’s Tatua co-operative had achieved the highest adjusted return on assets of the traditional milk processors at 18 per cent per year, followed by publicly-owned Open Country Dairy at 11 per cent, listed Synlait at 9 per cent, with the co-operative Fonterra at 7 per cent.

ATM was the benchmark for the consumer market segment.

“We found that the often promoted ‘move up the value chain’ from commodities to more specialist products had not been necessary to achieve strong risk-adjusted financial returns,” the report said.

One of its authors, TDB director Geoff Taylor, said the main message was the industry had moved beyond two “theoretical” performance benchmarks. One was the premise for Fonterra’s creation from an industry merger in 2001 in a “privileged, monopoly position”. The merger, enabled by special legislation, the Dairy Industry Restructuring Act (DIRA) , gave Fonterra 96 per cent of the country’s raw milk supply, which has since fallen to 82 per cent.

The other benchmark now redundant was Tatua’s enviable reputation as the country’s milk payout leader. The relatively small volumes of milk it processed made it flawed as a valid industry benchmark.

For the first time farmers and the industry had the market benchmarks of Open Country being a standout commodity-based processor, Synlait being the standout ingredients processor, and a2 being the standout consumer business,” said Taylor.

“Bundle them all together and for the first time you get a comparable market-based benchmark to make judgements about Fonterra’s performance.”


Source: NZ Herald


Some Ohio dairies liquidate, close in response to low milk prices

Worldwide demand and a low number of cows had dairy farmers milking the profits four years ago.

Now, the situation is reversed and low milk prices are forcing dairy farms in northwestern Ohio to either close or liquidate a large portion of their herds.

Six dairies in Mercer County and four in Auglaize County closed or reduced their herds over the past year, according to The Daily Standard.

Data from the state Department of Agriculture showed Mercer has 89 dairies compared to 121 six years ago, and Auglaize has 35 compared to 58. The state saw a drop in 59 licensed dairy farms just over the past five months.

Smaller dairies have to increase their size to remain profitable, and the investment is too much of a risk, said Ohio State University Extension educator Denny Riethman.

Milk prices averaged at $23.26 per 100 pounds in 2014. The average this year is at $14.43, a 38 percent decline.

St. Marys dairy farmer Melvin Fledderjohann, 82, said he plans to stay in the dairy business. He and his son save costs by doing all the work on their 70-cow operation.

“We have a couple of dollars in the bank, so we will wait and see what’s down the road,” he said.

New Breman farmer Lou Brown also has no hired help. He said he plans to wait through the downturn.

“I am an older farmer in my upper 50s and well established versus one who is not and building a barn,” he said. “Some of those are the guys the bank has foreclosed on.”

Agriculture officials still expect more dairies to close in the future.

“There’s just so much excess milk right now,” said Dianne Shoemaker, a dairy production economics specialist. “It looks like that’s going to continue to be the case for a while.”

Huppert Dairy among hundreds selling out

The dairy herd built over 80 years was dismantled in minutes.

When the auctioneer’s call faded, the end had come for another small dairy farm.

As a reporter, I’ve covered this story before. But this time, it’s personal. This time it’s the third-generation family dairy on which I grew up.

“This is on its way out,” my brother Jay Huppert concedes as the last cow is sold. “I got one more generation out of it than it maybe should have been.”

The upper Midwest has been losing dairy farms at a rate once unimaginable. During the past 15 years, Wisconsin and Minnesota have seen the demise of roughly half their dairy farms.

Now, as milk prices have entered the third year of a prolonged slump, the trend has accelerated. Combined, Minnesota and Wisconsin are losing dairy farms at the rate of 15 a week.

“I’ve got a neighbor down the road three miles this way that sold his cows last Friday,” Jay says, gesturing to his left. “A guy down the road this way is selling his cows next week – we’re selling ours – it’s just kind of the trend, all the small farms are just quitting and moving on to something else.”

Jay is my younger brother by four years. He’s 52-years-old and more fit than many people in their 20s. Our grandparents, Clarence and Ethel Kusilek, purchased the family farm in 1938 and began building the herd.

Jay and Lisa Huppert share a moment during the sale of their milk cows. (Credit: Boyd Huppert, KARE 11)

In the early 1970s, our parents, Andy and Janet Huppert, took over the dairy and introduced my four siblings and me to the benefits of hard work and endless time spent together as a family.

But the dairy industry has changed. Today, technology has allowed for dairies with thousands of cows, increasingly milked by robots.

Andy Huppert, Boyd Huppert’s father, took over the family dairy in the early 1970s. (Photo: Paula Mohr)

Sexed semen, artificially inseminated, allows dairymen to produce primarily heifer calves – the females that grow into milk cows. More heifers give dairymen the means to expand herds quickly should milk prices spike, but also results in more supply, which just as quickly can drive prices down.

Today, one 6000 cow herd can equal the production of a hundred small dairy farms like the one Jay and Lisa have been running.

A few nights before the auction, Jay and Lisa milked their 60 cows together. Most cows are greeted by name. “Hi Sasha, hi sweetheart, how are you?” Lisa asks, as she hugs a Holstein around her neck.

Lisa Huppert hand feeds her dairy cows. (Credit: Boyd Huppert, KARE 11)

Few of Jay and Lisa’s neighbors saw the sale coming. “It caught me by surprise,” says Dennis Kusilek, as he power-washes one of Jay’s John Deere tractors.

It’s Dennis’ third day volunteering his time to help his neighbors get ready for their auction.

“I thought Jay would be farming for 10 more years because he was so good at it, and he always seemed to love it,” Dennis says.

Both Jay and Lisa loved farming. They grew up on dairy farms within miles of each other and started dating in high school. Together, they were awarded the trophy seven years in a row presented to Pierce County’s top producing dairy herd. During those seven years, Jay never missed a milking. No vacations. No days off.

“He’s out the door at five in the morning,” Lisa says. “The earliest he comes back in is eight o’clock at night.”

Jay has never been one to complain about the work, but the grind of 15-hour days has become more difficult when there’s so little to show for his efforts financially.

Lisa and Jay Huppert in their dairy barn near River Falls, Wis. (Credit: Boyd Huppert, KARE 11)

Outside, Jay’s tractors are lined up for the sale. The newest among them is 27-years-old. Jay can’t begin to think about replacing old equipment when tractors have tripled in price, while the price of milk is stuck at 30 years ago.

“We can borrow all kinds of money, but you know someday they’re going to want it back,” Jay says.

In a strange way, their century-old barn and well-used tractors have become Jay and Lisa’s greatest assets. The couple can walk away from dairy farming, pay off their modest debts with the proceeds of their sale, and continue to own their farm. Other dairy farmers have found themselves too deep in debt to do the same.

Jay and Lisa Huppert’s tractors lined up for the auction. (Credit: Boyd Huppert, KARE 11)

Jay has taken a job at a factory. Lisa will continue to cut hair at her in-home salon. After making their decision to sell their herd, they rented their land to a crop farmer.

“Most of the neighbors are going to tell you Jay is one of the best dairymen around,” says Terry Kuhn, Jay’s feed dealer. “There’s a lot of dairy farmers out there, kind of taking notice, wondering, ‘If Jay is selling out, where does that leave me?’”

If their children had been interested in farming, Jay and Lisa might have tried to get bigger themselves. But how could they encourage their children to farm, with milk prices so unsettled?

So, both agreed, it was time to quit – a conclusion Jay reached first.

“The hardest thing he said to me was, he was afraid he was letting me down that he was quitting,” Lisa says, with her voice breaking. “And I don’t feel that way at all. I want him to feel good and be happy.”

Lisa says she’ll miss the animals and the time she and Jay spent together working. They’ve always made such a good team.

“Dairy let me down, the industry changed,” Jay says, acknowledging that technology and consolidation has brought change to other industries too. Hardware stores have closed too, when a Home Depot opens nearby. The similarities cannot be missed.

Jay’s auctioneer, Barry Hager, has completed two dozen dairy herd sales this spring. A former dairyman himself, Barry now conducts sales for others.

“Unfortunately, the prices today are to a point, even if you’re the best manager with zero debt, even on the best day, you’re breaking even,” the auctioneer says.

Barry can drive down most any rural road and count the empty barns where he’s conducted sales. “It’s sad to see that,” he says. “It’s an era that’s on the way out unfortunately – the small family farm.”

The Huppert Dairy on auction day. (Credit: Boyd Huppert, KARE 11)

Within a couple hours of the start of the sale, Jay and Lisa’s cows are loaded into trailers and shipped off to other dairies whose owners are still hoping for a turn-around.

There is sadness, but Jay and Lisa acknowledge it feels as if a weight has been lifted.

“It was fun, it was a great life, but I think there’s better things out there.” Jay says.


In Japan, Doing More With Less Means Getting a Robot to Milk Your Cows

National push for automation reaches farms, as human workforce heads out to pasture.

It’s milking time at the Kato farm, but when a Holstein ambles into the milking pen, nobody is there. A robot shoots out four arms and attaches a suction tube to each teat while she enjoys a tasty treat. Within 10 minutes, it is the next cow’s turn.

The Kato family invested about $2 million to build a shed that relies on a pair of $230,000 robots to milk some 90 cows and an $18,000 robot to help feed them. Here on the northern island of Hokkaido, whose flat farmlands laid out in neat grids resemble Wisconsin more than Japan’s main island, hundreds of the robots have been enlisted in recent years because human help is hard to find.

“We have to change the way we live and the way we work,” said Kenichi Kato, 67 years old, who started his farm with three cows more than 40 years ago. “Some people may say that doesn’t apply to dairy farms, but we’ll never get anywhere that way. Young people won’t come.”

Getting robots to milk Elsie-san is the kind of investment that just might rescue Japan. The country is struggling to deal with its declining population, and there is a problem even with those who are still working: They are only about two-thirds as productive as Americans, on average, says the Organization for Economic Cooperation and Development.

Agriculture is at the bottom of the heap, with the average American farmer producing 40 times as much as the average Japanese farmer, according to Toyo University economist Miho Takizawa.

Scale is a big reason. The average rice farm in Japan is just a few acres, whereas an American corn or wheat farmer can till thousands of acres with high-efficiency combines.

Now a labor crunch is forcing Japanese businesses of all sizes to step up capital spending on robots and other information technology to speed everyday tasks such as delivering packages and taking sushi orders at conveyer-belt restaurants.

If you ask Japanese companies what they are investing in, “it’s all IT capex—replacing humans with machines,” said Goldman Sachs strategist Kathy Matsui.

A recent push by the government to restrict extreme working hours following a rash of suicides linked to overwork has added to the pressure. “If you’re going to maintain output, you’ve got to boost productivity,” Ms. Matsui said.

The Bank of Japan says labor productivity is improving thanks in part to companies’ software investment, which has risen the past two years and is expected to rise 8.1% in the current fiscal year.

Dairy farmers have long relied on milking machines, but even that requires a lot of work by hand. At an older cow shed on the Kato family farm, someone has to hook up the machine to each teat.

Fully robotic milkers first took hold in Europe in the 1990s. The number of the robots used in Japan has doubled in the past two or three years to more than 500, according to Masao Nishimura of Hokkaido’s Cornes Ag. Corp., which imports the machine used by Mr. Kato, made by Dutch manufacturer Lely International NV.

One reason for the increase: Farmers who are trying to get bigger and more efficient can tap government funds for up to half the price of a robot milker.

The milking robot is the size of a small truck. Before milking, a unit extends under the cow and cleans her udder; tubes carry the milk to a refrigerator. The machine also checks the cow’s identity from tags on her ears and stores data on each cow’s production.

The Katos also bought an R2-D2-sized robot that rolls up and down the shed every two hours pushing feed closer to the cows’ enclosure so they can keep munching.

The family now has about twice as many cows producing milk without having to add any people.

Mr. Kato’s son Masaharu said he was working from 4 a.m. to 9 p.m. every day before introducing the robot shed four years ago. Now the cows in the robot shed require only about three or four hours a day of care, and he can head home around 6:30 or 7 p.m., giving him more time at night with his five children.

Robot labor has also enabled the family to branch out beyond milk. Masaharu’s younger sister, Yoshie, makes cheese sold under the Kato name at a handful of shops in Hokkaido, including at the Sapporo airport.

“Installing the robot made more time for me, so I was able to focus on dairy products and cheese production,” she said. She borrows space in a cheese-making plant rented from the city, but in a year she hopes to open her own factory on the Kato homestead where she can produce cheese, butter and other dairy products with milk from the Katos’ cows.

“We want to automate whatever we can in the new factory,” she said. Still, for final quality control, “it has to be a human who tastes it and smells it and looks at it.”

Other Japanese companies are experimenting with automating jobs previously thought to require the human touch. Convenience store chain Lawson Inc. in late April began a trial at three Tokyo stores in which customers can scan their own items and pay with a smartphone—similar to supermarkets with self-checkout but eliminating the need to stand in line.

There is still a long way to go for many Japanese service industries or farms to reach U.S. levels of productivity, and the declining population of places like Hokkaido can make the problem worse. In 2016, the local rail company reported that about one-eighth of its stations, 58 in total, had one passenger or less a day. Many remain open today because it takes time to get people to accept the closure of their local stations, said a spokesman for the company, JR Hokkaido.

For the Katos, who also grow corn and other crops on their 210 acres, using machines wisely is the key to keeping the farm going in future generations.

“I feel that people in the future will stop doing jobs that require work from morning till night, 365 days,” said Kenichi Kato. “A job with some breathing room allows for family love and family time.”


Source: The Wall Street Journal

U.S Dairy Exports Set a New Record in March

U.S. dairy exports set a new record high in March on a total volume basis surpassing the previous record high set in March 2014. Exports of whey protein concentrate and lactose each hit all-time highs.

On a total milk solids basis, exports were equivalent to 17.3 percent of U.S. milk production.

U.S. dairy exports set a new record high in March on a total volume basis surpassing the previous record high set in March 2014. Exports of whey protein concentrate and lactose each hit all-time highs.

Suppliers shipped 204,453 tons of milk powder, cheese, butterfat, whey and lactose during the month, up 26 percent from March 2017. U.S. exports were valued at $510 million, 8 percent greater than in March 2017 and the highest total value since April 2015.

Ingredient sales drove much of the gains. Shipments of nonfat dry milk/skim milk powder (NDM/SMP) to Southeast Asia were nearly double the prior-year level and sales to Mexico were the second-most ever. Shipments of lactose to China increased by 57 percent during the month and were at a record high.

Overall NDM/SMP exports were 67,154 tons, up 38 percent from last year. Sales to Mexico increased 43 percent from the previous year. (Official U.S. Bureau of Census data continues to show an increase in WMP exports to Mexico. However, Mexican import data and trade sources don’t corroborate this, and we believe this volume represents SMP sales that were misclassified at the port. Therefore, we’ve adjusted NDM/SMP and WMP trade data for June 2016 to March 2018 to account for this misclassification.)

For more detailed trade data accompanied by tables and charts, download USDEC’s three-page (PDF) document.
GDMO May 2018

Lactose exports were 37,966 tons in March, the most ever, and 19% greater than levels a year earlier. Shipments to China (9,282 tons) led the gains and were 57 percent greater than what they were in March 2017.

Cheese exports were 33,844 tons in March, the most in ten months, and up 9 percent from a year earlier. U.S. suppliers increased sales to China (+56 percent) and Japan (+30 percent), which continued to offset slower sales to Mexico. Shipments to Mexico decreased 16 percent in March.

Total whey exports were 53,079 tons in March, up 19 percent vs. the prior year. Shipments of whey protein concentrate were at an all-time high while exports of dry whey were at a nearly four-year high.

Butterfat exports totaled 3,714 tons in March, up 180 percent from the year  before. Sales to Canada were up 129 percent. Shipments to the Middle East also firmed and rose 279 percent against low comparable figures one year ago.

On a total milk solids basis, U.S. exports were equivalent to 17.3 percent of U.S. milk production in March. Imports were equivalent to just 3 percent.

To use interactive charts with current and historical trade data, see’s page on U.S. export data.

Raw milk supplier responds to customers

Mark and Kelsey Williams and their children Addison and Reeve with a favourite cow 111, named Annabelle.

Raw milk sales are providing a way for a Canterbury dairy farmer to diversify and get closer to customers, writes Heather Chalmers.

Supplying raw milk direct to customers has led Central Canterbury dairy farmer Mark Williams to rethink some of his farming practices.

Customer feedback for A2 milk, no palm kernel and no killing of bobby calves is being applied not just to his separate raw milk herd, but to his entire dairy farming operation.

Williams and his wife Kelsey are completing their fifth dairy season following their conversion of a property at Aylesbury, west of Christchurch. In addition to their main herd of 400 cows, since Labour Weekend 2016 they have also run a separate herd of 10 to 20 cows to supply raw milk under the Aylesbury Creamery brand.

Mark Williams in the raw milk herd which is selected for temperament and low somatic cell counts.HEATHER CHALMERS/STUFF

Mark Williams in the raw milk herd which is selected for temperament and low somatic cell counts.

Raw milk is straight from the cow, and unlike supermarket milk is not pasteurised, homogenised, or skimmed of cream. As raw milk bypasses the bug-killing heating process of pasturisation, its public sale requires heightened hygiene, auditing and milk testing requirements. It attracts a regular core of buyers who say it is like milk used to be, filling and creamy.

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An Aylesbury Creamery customer Ron Smith, of Rolleston, who arrived for a refill says “it tastes like milk”. “It’s like the old days when I was a kid with a glass bottle of milk with the cream on top.”

Customer Ron Smith of Rolleston says raw milk in glass bottles tastes like milk when he was a kid.HEATHER CHALMERS/STUFF

Customer Ron Smith of Rolleston says raw milk in glass bottles tastes like milk when he was a kid.

Williams says becoming a raw milk supplier came partly out of necessity for diversification of income, during low-payout years. He invested in a large dispensing machine at the farm dairy, selling raw milk and reusable glass bottles. A previous role running a water bottling company, Spring Fresh, at Tai Tapu, means he has previous experience with marketing and auditing. Only 20 operators across New Zealand are registered with MPI to sell raw milk.

“In today’s world consumers care where their products come from and how they are made. We see it as our duty at Aylesbury Creamery to deliver a healthy, safe and nutritious product,” he says. 

The specially-selected raw milk herd is milked once-a-day in the morning before the main herd to ensure the milking plant is pristine. Extra hygiene steps are required, with staff washing the cows’ teats, udder and legs as well as their own hands and arms. “The cows’ udders are washed, dried, sprayed with teat spray and dried again. If a cow defecates then we have to start again. We cull for that and three strikes is out. We can’t have a cow that wastes your time.”

Mark Williams and son Reeve are dwarfed by giant sterile miscanthus grass used as stock shelter.HEATHER CHALMERS/STUFF

Mark Williams and son Reeve are dwarfed by giant sterile miscanthus grass used as stock shelter.

Raw milk cows are selected for good temperament and low somatic cell counts.Ten cows are calved in autumn to maintain milk quality over winter.

As it is critical that the milk is cooled quickly, a secondary cooler is used just for the raw milk to drop it to 7C. It is then chilled to below 4C in the vending machine.

Williams’ raw milk is tested every 10 days for pathogens including E coli, listeria, campylobacter and staphylococcus and it is an instant stop if tests come back positive. Customers must sign in when they buy milk so they can be notified if there are any issues. “Even if results are fine, we use them as an indicator of how well our hygiene is. There’s a lot of extra paperwork and auditing.”

The centre pivot irrigator can roll right over giant miscanthus grass used as stock shelter.HEATHER CHALMERS/STUFF

The centre pivot irrigator can roll right over giant miscanthus grass used as stock shelter.

Williams says the biggest risk with raw milk is once it has left the farm. “I try to educate people to store milk properly. The biggest risk is people not chilling milk on the way home and not washing bottles properly. Those travelling more than five minutes with raw milk should store it in a chiller bag with ice.”

Local publicity and a Facebook page have helped to generate sales and in the next week or two he will launch an Aylesbury Creamery website that has been six months in the making.

“Word of mouth is a big thing. We have great local support from the local community with our raw milk and after that we have a great team on the farm of contract milkers Rory Burgess and his partner Jeanette Williamson and second-in-charge Casey Peychers.”

Aylesbury Creamery's raw milk dispensary at the farm dairy.HEATHER CHALMERS/STUFF

Aylesbury Creamery’s raw milk dispensary at the farm dairy.

With the towns of Rolleston, West Melton and Darfield nearby and Christchurch not far away, they have a ready population base to market to with 26,000 people living within a 10km radius of their farm. “Some people come religiously. Some people have formed a group, with four families taking turns to come once a month, buying 12 or 16 litres between them each week. The biggest problem is that people are too busy and time-poor to make a special trip.

“Ideally I’d like to be milking 40 raw milk cows, one row of the 40-aside herringbone shed.”

Before setting up Aylesbury Creamery, Williams sought advice from established raw milk suppliers Village Milk in Takaka.

Aylesbury Creamery's sign on the corner of the farm attracts customers.HEATHER CHALMERS/STUFF

Aylesbury Creamery’s sign on the corner of the farm attracts customers.

Feedback from raw milk customers means only A2 cows will be used in future. “We have been breeding for A2 for the last two years and have just DNA-tested the whole herd. Within the next week or two, once the tests come back, we will only supply A2 milk through the raw milk vending machine. There is quite a demand for it. Some people will only buy A2 milk.

“We’ve changed our farming system in response to customer requests. We don’t do bobby calves any more. Instead of using jersey bulls over our heifers we now use murray greys, so their calves can be sold and finished for dairy-beef. People who buy raw milk don’t want calves being killed, so we are changing to cater for this.

“We are not organic, but try to farm as sustainably as we can. We don’t use acid fertiliser, but reactive phosphate rock instead of superphosphate and in future we won’t spray paddocks out with glyphosate, but just plough them. We want to adopt a simpler system as farms seem to be under more and more pressure from weeds, pests and diseases.

“In earlier seasons we were milking more cows, but have decided to ease off and run a lower input system with less pressure on everything.”

The farm is a predominantly pasture-based system with some supplementary feeding of silage or grain, but no palm kernel. While cows have been wintered on fodder beet and he has a bumper crop this year, he will not grow it again as he believes it is contributing to a rise in empty rates.

The 100ha home block is fully irrigated, with an additional 40ha leased across the road. Another 16ha is used to cut and carry silage back to the milking platform. Effluent is applied across the whole farm through the centre pivot. 

In a project with Lincoln University, they have trialled the giant multi-purpose sterile grass miscanthus and have several plots along the road boundary and in corners of paddocks for shelter.

“We will probably plant more of it. In a recent southerly the whole herd was huddled behind a block of miscanthus as it blocks the wind so well. The stock will eat it when it’s green.

“You can mulch it up and use it for calf bedding as the moisture goes straight through it, though I haven’t tried it yet. The only downfall is that if you harvest it for bedding in late autumn, then it is not available for winter shelter.”

Miscanthus dies back with the frosts, then starts growing again in September and by January can be four metres high. As a perennial that regrows from its underground rhizomes, miscanthus can last for many years. Miscanthus is not only an effective shelter plant for animals, it also shelters pasture, promoting grass growth and reducing moisture loss. As it is a sterile hybrid it cannot reproduce itself by seed and it is not invasive. 

The plant’s flexibility means the farm’s centre pivot irrigator can just roll right over it.

Originally from a family beef  operation near Fox Glacier where his brother still farms, Williams had no dairy farming experience before converting his farm.

“I had a week at Telford on a dairy unit when I was younger and swore I’d never be a dairy farmer.” He was growing lucerne for racehorses, but decided that dairying provided a better return for pastoral farming.

“I converted this farm without dairy experience, but drew on the knowledge of experts.

“The basics of farming are there, such as how to grow grass and feed stock well.”

A major setback came when the September 2013 windstorm blew over the farm’s 760 metre centre pivot, causing significant damage. “We only had two spans left standing.

“The centre pivot wasn’t operational until Christmas so we improvised with K-line on 60ha and had to spend $350,000 on extra feed.”


Ireland’s desperate bid to Brexit-proof its dairy industry

Larry Hannon on his farm in County Kildare, Ireland | Simon Marks

A bold plan by one of Ireland’s largest dairy businesses to shield itself from Brexit has hit a road block: angry locals.

The fight over the €77 million Dairygold project neatly encapsulates the difficulties Ireland faces as its closest trading partner leaves the EU single market. The U.K. buys €4.5 billion of Irish food and drink exports a year, roughly 35 percent of the total — a market at risk under the feared scenario of high customs tariffs between the U.K. and Ireland after Brexit.

Businesses hedging against the possibility of increased trade friction are looking further afield. For the Dairygold cooperative, the plan is to shift production from making cheddar destined for British consumers to cheese popular in new markets — in this case, Norwegian Jarlsberg for North America, Australia and the rest of the EU.

The Irish firm has teamed up with Tine SA, Norway’s largest farmer-owned dairy cooperative, to build a new plant capable of processing 20,000 tons of Jarlsberg a year.

But the project, which was granted planning permission last month on a site in the village of Mogeely in County Cork, has raised fierce local objections.

Up to 65 percent of Ireland’s cheddar cheese exports go to the U.K.

Residents are worried the factory’s outflow from a 10.6 kilometer underground pipeline will pollute the pristine waters in the tranquil Ballinacurra River estuary, harming wildlife, salmon stocks, an oyster farm and children in the local rowing club who use the bay.

“If you have the wind blowing here and you come down and see those windows, you’ll see all the salt water on them. Now they’ll have grease as well,” says Benedict Deady, who jokes that he was named after the pope and has run the local rowing club for the past six years. “It’s oil and stuff that they’ll be pumping into this place,” he said, voicing local people’s worst fears about what will be coming down the pipe if the project goes ahead.

Conor Galvin, head of commercial business development and innovation at Dairygold, said the factory’s waste will fully comply with environmental rules. He points out that An Bord Pleanála, Ireland’s urban planning authority, as well as the country’s water and environmental bodies have signed off on the project.

“The waste is treated in a way that the Irish water authority and the EPA [Environmental Protection Agency] say they are happy with and it is compliant with standards in Ireland,” he says, adding that he expects work to start on the factory within three months.

The Ballinacurra river estuary in County Cork | Simon Marks

Charlie Haynes, a member of the residents’ group in East Ferry fighting the project, says discussions are underway among locals about appealing the planning decision to Ireland’s Supreme Court.

That happened in the case of Apple’s planned €850 million investment in a data center in Athenry, near Galway, which was approved in February 2015 and was fought by locals through the courts for years.

“There’s salmon that goes up there in season. There’s sea bass, which is a protected species. There’s otters here, there’s kingfishers. It’s a place full of wildlife and we would be very suspicious of anything that might damage the water further,” Haynes says during an interview in his garden surrounded by his three dogs.

Like several locals here, Haynes says wastewater pumped into a thin stretch of inland water that his home overlooks would never make its way out to the ocean due to strong currents and a narrow mouth leading out to sea from the nearby harbor, instead remaining trapped. “All local experience is that things don’t go out,” he says.

Bad timing

The Dairygold venture comes at a difficult time for the industry. Up to 65 percent of Ireland’s cheddar cheese exports go to the U.K. along with large shipments of butter and infant formula. In total, 30 percent of Ireland’s dairy production is sold to the U.K, according to Bord Bia, the Irish Food Board.

Interviews with farmers and executives at some of Ireland’s largest dairy companies paint a familiar picture. In a nutshell, there is no obvious panacea for Ireland’s exposure to the British market should Brexit trade talks go sour.

Larry Hannon tends to his herd of cows on his farm in County Kildare | Simon Marks

“You can’t think you’re going to shift big volumes into the European market overnight because the market is already supplied. Just take Emmental, it’s a French thing and there are French companies doing it. Why go into a market that’s probably overcrowded anyway?” asks Padraig Walsh, who rears more than 300 cows in the Irish midlands selling 80,000 tons of milk powder per year to Glanbia, the country’s largest cooperative.

Walsh, who was president of the Irish Farmers’ Association between 2006 and 2010, says that while Ireland is increasing exports to countries beyond the U.K., nothing can quite make up for the benefits of trade access to the U.K.

“The U.K. market is so important to us as it has a similar taste. And also it’s so close, it’s the same culture, the same language,” he says. “Fair enough, we’ve managed to develop markets all over the place at this stage, but you won’t shift the volumes [going to the U.K.].”

For many farmers in Ireland, the idea of diversifying into new markets is something they have little control over as they are wholly dependent on the country’s cooperatives to market the products derived from their milk.

“At farm level we’re all very focused on producing more of the same thing. It’s a very narrow focus. It’s about volume as opposed to markets,” says Larry Hannon, who supplies 1.4 million liters of liquid milk to Glanbia from his farm in Ballitore, County Kildare. “Am I looking at changing my business to mitigate against Brexit? No, because there is nothing I can do to do that,” he says, tucking into a plate of Irish steak, potatoes and grilled tomatoes in his kitchen.

Lannon explained that producing more infant milk formula for the Asian market is often cited as a way to shelter the dairy market from Brexit. But doing so requires producing and selling huge volumes to add value for farmers, as the margins are so low.

“You’re talking big volumes,” he says, noting that Dairygold’s decision to produce Jarlsberg is a rare tale of hope for Irish farmers trying to hedge their bets in light of Brexit. “To add real value to my bottom line, I don’t know where that’s going to come.”

New markets

While farmers have doubts about the future, those in the government are more optimistic. Shane Hamill, who overseas Brexit issues and international trade at Bord Bia, says the country’s dependency on the U.K. is in fact decreasing.

Exports to the EU not including the U.K. increased by 16 percent to €4 billion in 2017, while exports to the rest of the world went up by 17 percent to €4.1 billion. Meanwhile, exports to the U.K. grew just 7 percent in the same year. So Ireland’s food exports to the U.K. made up for 35 percent of the total in 2017, down from 37 percent the previous year.

Hamill says Bord Bia has implemented a “massive market diversification exercise” with industry looking at consumer trends, market dynamics, the cost of doing business, regulatory issues and distribution channels in markets in Asia, the Middle East and Africa. The body has also opened the Thinking House, a resource center for businesses looking to access new markets.

The production site for the Dairygold cooperative in Mogeely, County Cork | Simon Marks

Glanbia, he says, is looking at producing more of cheeses such as Edam and Gouda, while Teagasc, the Agriculture and Food Development Authority, has partnered with Ornua, a huge marketer of Irish dairy products, to research the kind of tastes and textures of dairy products enjoyed in China.

“There are some actions taking place,” he says. “Brexit has meant that we are putting in a lot more resources to make sure that the diversification process is faster.”

But as Dairygold has discovered, there will be obstacles to overcome at home as well.

“They’re like a Rottweiler,” says Deady, the local resident in East Ferry, when asked if the locals would allow the company’s Jarlsberg investment to go ahead. “When they grab on to you they won’t let go.”


Low milk prices forcing Ohio dairy farmers out of business

Low milk prices are forcing dairy farms in northwestern Ohio to either close or liquidate a large portion of their herds.

Six dairies in Mercer County and four dairies in Auglaize County have closed or reduced their herds in an effort to cut costs while milk prices remain low, The (Celina) Daily Standard reported.

Data from the state Department of Agriculture showed Mercer has 89 dairies compared to 121 six years ago, and Auglaize has 35 compared to 58. The state saw a drop in 59 licensed dairy farms just over the past five months.

Smaller dairies have to increase their size to remain profitable, and the investment is too much of a risk, said Ohio State University Extension educator Denny Riethman.

Milk prices averaged at $23.26 per 100 pounds in 2014. The average this year is at $14.43, a 38 percent decline.

St. Marys dairy farmer Melvin Fledderjohann, 82, said he plans to stay in the dairy business. He and his son save costs by doing all the work on their 70-cow operation.

“We have a couple of dollars in the bank, so we will wait and see what’s down the road,” he said.

New Breman farmer Lou Brown also has no hired help. He said he plans to wait through the downturn.

“I am an older farmer in my upper 50s and well established versus one who is not and building a barn,” he said. “Some of those are the guys the bank has foreclosed on.”

Agriculture officials still expect more dairies to close in the future.

“There’s just so much excess milk right now,” said Dianne Shoemaker, a dairy production economics specialist. “It looks like that’s going to continue to be the case for a while.”


New Zealand milk production falls 1%

The world’s top dairy exporter, New Zealand’s Fonterra Co-operative Group Ltd, said on Tuesday that milk production in its home market fell 1 percent in March, a respite for global dairy prices.

The fall in production came despite an improvement in weather conditions, the dairy exporter said in a statement.

Last month, the Global Dairy Trade Price Index climbed 2.7 percent, with an average selling price of $3,587 per tonne, in its latest auction.

The index had fallen for the fourth time in a row at the previous sale, edging down 0.6 percent.

“All up, this auction result hints at strong global demand. And with NZ production still relatively weak heading into winter, we expect prices, if anything, to creep a little higher over coming months,” said ASB rural economist Nathan Penny, in a research note.

Prices had been slipping in recent weeks thanks to New Zealand, the world’s largest dairy exporter, posting stronger-than-expected production as bad weather conditions eased up.

Nevertheless, the Pacific nation was still struggling with below-average supply due to extreme weather fluctuations and analysts said buyers were starting to realise that and snap up any New Zealand products they could find.

A total of 19,262 tonnes was sold at the latest auction, an increase of 11.8 percent from the previous one, the auction platform said.


Source: Farm Ireland

Shining a light on U.S. Dairy Hypocrisy

Will Canada need to make substantial access concessions on dairy in order to secure support for passage of NAFTA 2.0 from House Speaker Paul Ryan and Senator Chuck Schumer?

Schumer, a Democrat from New York, knows how to play the media and plays it incessantly. Indeed, it is said the most dangerous place in Washington is between Schumer and a television camera. New York has built an important Greek-type yogourt industry. Did it benefit from industrial development funding? Chobani certainly received support for their second plant in Twin Falls, Idaho.

Ryan, a Republican from Wisconsin, reportedly told President Donald Trump and Prime Minister Justin Trudeau that if there is no “fix” on dairy, particularly Class 7 milk, NAFTA 2.0 will not pass. Apparently POTUS has repeated this demand as his own.

One must hope Canadian Prime Ministers do not take marching orders from Congressmen no matter how senior they are. Canada is not a vassal state to the U.S. nor to any American state.

Speaker Ryan is one of the most powerful legislators in the Washington swamp. Dairy is important to Wisconsin, a state where there are more cows than in all of Canada. Identifying reasons for dairy farmer problems in Wisconsin must be focused locally and nationally. There is no reason to blame Canada.

Here are a few facts to keep in mind:

  • There are no subsidies to Canadian dairy farmers. Class 7 milk is similar to Class IV in the U.S. milk management and price control system.
  • Class 7 milk is available at the same price for all end uses. It is not contingent on export nor on import replacement. It is WTO consistent.
  • Canada’s tariff rate quotas are not inconsistent with NAFTA and WTO rules. The U.S. challenged Canada’s TRQs to NAFTA panel in 1996 and lost.
  • These tariffs apply to volumes over and above duty-free quota allocations. The WTO has approved the TRQ system.

The U.S. also has tariff rate quotas on dairy products, several of them on cheese. The U.S. also imposes high tariffs to imports above the quota levels, with a similar justification to Canada’s. There are 40 other countries with WTO approved TRQs. Canada is no different.

Clearly, many U.S. dairy farmers, primarily small family farms in New England, are experiencing problems. In Vermont, many farmers have not been able to recover their cost of production and have been forced to abandon dairy farming.

Steel and dairy have many of the same problems – supply glut. And Canada, with less than 1 per cent of the world’s production, is not the cause of the milk glut in the U.S. or globally. There is too much milk and not enough demand in the U.S.  Demand in China too is declining, thus there are more dairy products on global markets without a home. Gluts are never good for commodity markets.

Congress has tried to fix the plight of U.S. dairy farmers by modifying the Margin Protection Program for Dairy (MPP-Dairy). The farmers’ share of premiums has been reduced by 42 per cent to make it easier to enrol them and the premium-free benefit has been increased by 25 per cent from US$4/cwt (hundred weight) to US$5/cwt. The cost of this latest cash injection exceeds $1 billion U.S..

Ryan and Schumer will better understand dairy industry problems by looking into the mirror and, indeed, some American politicians have publically recognized the imbalance in supply and demand. U.S. milk production has increased by 16 per cent between 2007 and 2017.

USDA growth projections over the next decade include 16 billion pounds of exports or 42 per cent growth in exports. U.S. demands to expand access to Canada and limit Canada’s production, already subject to supply management, are designed to permit U.S. dairy processors to find a home for surplus production on the backs of Canadian dairy farmers. Doesn’t this remind us of arguments against excess Chinese steel production?

Production of milk in Wisconsin increased by 29.5 per cent and New York by 23.8 per cent over this period. U.S. milk consumption has declined significantly in recent years in large part because of fad diets and increased popularity of plant-based beverages.

Production has exceeded consumption of milk since 2007. From 2012 to 2016, annual sales of conventional milk declined by more than 4 billion pounds — or approximately 8 per cent. There have been increased sales of organic milk but far less than the declines seen for conventional milk consumption.

Canada is the second largest market for U.S. dairy products. U.S. exports have increased rapidly. As the Government of Canada has explained frequently, the trade balance in dairy is 5:1 in favour of the United States.

In 2006, the U.S. shifted from a net importer to a net exporter of dairy products.

Since at least 2006, average farm gate price for milk has been below the fully absorbed cost of producing it. I rely on the fully absorbed cost because that is the standard adopted by the WTO in Canada – Dairy.

At the same time, U.S. consumption of dairy products has increased by 5.4%. Within the overall consumption experience, consumption of fluid milk, which brings U.S. farmers the highest price, has declined by 16.3%. This appears to be due in significant part to consumer taste and fad diets.

In Wisconsin, Secretary Ryan’s home state, the deficit in 2016 was US$10.07 cwt; that is a loss for every pound of milk produced.

In New York State it cost US$16.34 cwt more to produce milk than it returned at the farm gate in 2016.

In its simplest terms, exporting below fully absorbed cost is dumping.

By its marketing orders, USDA establishes minimum prices for sales from dairy farmers to selected processors.

The price of milk used in producing powder is at the lower end of the scale because the fat has been removed and because the powder requires additional processing. It costs more to produce than fluid milk.

The fuss President Trump raised about Canada damaging Wisconsin farmers during his visit to the Dairy State, ignored what Wisconsin dairy farmers actually said at the time and since.

The issue in the dairy farmers’ view was overproduction, and reduced consumption due in large part to the popularity of plant-based dairy products.

Grassland Dairy was already terminating contracts with Wisconsin farmers before it blamed Canada. Class 7 competition was not an overnight surprise. Dallas Weutrich of Grassland Dairy admitted that Grassland had been aware of the issue for over a year before giving its farmers notice. Was this disclosed to POTUS?

The Wisconsin Farmers Union refers to blaming Canada as Milking Scapegoats.

Dean Foods cancelled contracts with more than 100 farmers when Walmart built a plant in Fort Wayne, Indiana which will bottle 100 million gallons of milk annually to serve 600 Walmart stores. Other grocery giants, Publix and Kroger, were already supplying milk to their stores from their own processing plants.

Land O’Lakes encourages its supplying farmers to limit their milk production.

There are less U.S. dairy farmers than there used to be, but each cow is producing more milk and total production is up and the glut increases.

The U.S. dairy industry has made its own problems in an evolving and unfriendly market. Politicians like Schumer and Ryan should not be allowed to fix their problems on the backs of Canadian dairy farmers.


Dairying: not all doom and gloom

It seems to  be the era of bad news for the dairy industry The seemingly never ending formal NAFTA discussions are a daily subject of discussion by politicians and dairy groups and around the kitchen and small town coffee tables across the land.

Is China going to sign new contracts for more agricultural products? Stories of dairy farms receiving milk termination notices from their processors leads to the question; are we next? Milk prices received by farmers are lower than the cost of production. Milk from other states moving into Wisconsin by a never ending line of tankers for processing. Dairy herds being dispersed across the state and nation as farmers leave dairying.

Add in the quandary of illegal immigrants employed on most every farm over 100 cows and one wonders about the future of dairying in this, the one and only “dairy state.” Who will milk the cows, is the unanswered question?

Anneliese Hebbe, born in February is the queen of the farm. (Photo: John Oncken)

Angel and Chris

Yet, not is all doom and gloom across dairyland. Several weeks ago, at the annual Dairy Strong Conference hosted by the Wisconsin Dairy Business Association, I by chance met Angel Hebbe, a young dairy farmer from Cambridge, who related how she and her husband Chris were building a dairy herd. And, how I should come down and visit them one day.

Several weeks later, I called to make arrangements for a visit and got no answer from her cell phone. I later found out that when I called Angel was busy having a baby – a girl they named Anneliese.

Fifth generation

Chris told how the farm dates to 1901 when his great, great grandparents, Herman and Anna bought the farm.

“Actually the ownership skipped a generation,” Chris says. “My parents never lived on this farm and I was raised on a small farm near Ft. Atkinson.”

“Would you believe, we met at a bar,” Angel says with a laugh. “You hear about these things, but we really did.”

Five acres, five hutches

After a brief sojourn working in Appleton, Chris in construction, Angel managing another pizza outlet, the couple came back to southern Wisconsin and bought five acres near Kaiser (east of DeForest).

“We started with five acres and five calf hutches near DeForest, in 2007, with the idea of raising dairy steers,” she began. “By 2013 they were up to 120 steers and custom raising heifers and buying feed from Blue Star dairy that owned the adjacent land.

“We were both working at Blue Star (from 2006 to 2013) at the time,” she says.

At Blue Star

Both Angel and Chris worked at Blue Star Dairy over the years, as did Angel’s mother, Nancy, who milked cows and raised calves there before and after marrying Walter Meinholz in 1991.

“My mother milked at 3 a.m. and we girls (four of us, ages 11, 10, 8 and 6) ) often slept in the car or break room at the dairy,” Angel remembers.  (Nancy Meinholz died last January, Walter several years ago.)

In 2013, Chris and Angel moved to their current farm that was owned by Roger Lehmann, Chris’ grandfather. “We started by raising custom heifers,” Chris explains.

Lehman was a well known Berkshire hog raiser and also raised steers and heifers and the dairy barn had been stripped of equipment after milking had stopped in 1993.

“We put in stanchions, pipeline and all the milking equipment,” Chris says. “The equipment came from another old barn and I did most of the work myself.

“We bought 13 cows and started milking,” he continues. “Then went to 30, 45 and now 55 cows and by September we plan to be milking 90 cows. We have some replacement heifers that will go into the herd and will have to buy additional animals,” he says. “Cows are relatively low price these days.”

The cows are housed in a freestall barn just outside the barn, Chris explains.

“We only milk in the barn, in fact, it does not have water piped in. It has 40 stanchions, so we are switching cows each milking – our plan is to milk 90 cows thus making two barns full at each milking: milk one barnfull, turn them out and bring another in. (This may sound strange to many dairy folks, but the California flat barn system is similar and has been used for decades.)

Milking at 5:30 a.m.

Anna Evenson, a high school girl from nearby Cambridge helps with the milking: she’s always here by 5:30 a.m. and then goes to school, Chris says. She also works at her mother’s dress shop in town and in the summer works at the Madison International Speedway in the town of Rutland. (Two miles from the former Oncken farm.)

One of the challenges this couple faces is that Red Cedar Lake is located just south of the farmstead, not a quarter of a mile away, with a field between the buildings and lake.

“We’ve worked with the NRCS and constructed contours, terraces and a grass filtration system to keep the lake clean,” Chris says. “Yes, we do a lot of no-till but we have plenty of land away from the lake for our manure, only clean water gets into our lake.”

The Hebbes have added two calf barns since they began farming and admit they don’t buy new equipment, still pick corn with a New Idea picker and have a corn crib for storage.  “We don’t even have a barn cleaner, I use the ‘armstrong” method of handling manure.”

While we were talking at the kitchen table, I heard and saw someone on the front porch. “Oh, he’s just getting eggs, “ Angel explained. “The Lehmans were well-known for their chickens and selling eggs. We still have a hundred hens and people come and pick up their eggs — it’s on the honor system.”

“But, not for long,” Chris added. “Chickens take a lot of work and we’re going to put our efforts toward our cows, cow comfort and raising good feed.”

Does no good

“What about the doom, gloom and low prices in the dairy market,” I asked.

“There is not much we can do about that, and complaining doesn’t do any good,” Chris says. “Hopefully the cycle will change as it has in the past.”

Good luck to the Hebbes and thanks for the enjoyable and optimistic visit.

John Oncken is owner of Oncken Communications. He can be reached at 608-222-0624, or email him at

NZ dairy farming future uncertain

What does the future of farming look like in New Zealand? That was the big question at the Fonterra National Conference in Auckland where more than six hundred farmers from across the country gathered, including Māori landowners.

Land, cows and milk were on the agenda at the My Connect Fonterra conference.

But, according to Tūhoe kaumātua Paki Nikora, there’s much more to be shared and much more to be discussed.

“Māori have our own knowledge and so do Pākeha. There’s nothing better than working together”.

Tiaki Hunia is Fonterra’s general manager of Māori strategy.  He says the conference has been the perfect platform to engage with Māori farmers from across New Zealand.

“Here we meet with Māori farmers and listen to their thoughts as well as their concerns so that we can forge a pathway into the future”.

The Ministry of the Environment highlighted a 69 percent increase in dairy cattle numbers between 1994 and 2015 and found that freshwater biodiversity was in decline.

Hunia says a key focus today was the environment.

“It’s an important topic- how do we improve and conserve the state of the environment, the water and land?”.

Nikora doesn’t believe that the future of farming in New Zealand lies within the dairy industry.  He says the environmental impacts are too harsh.

“I don’t think that using our land to produce dairy is the right thing to do.  It’s better if we reduce the number of cows that are allowed to graze on one single hectare of land”.

However, he’s open to the thought of Fonterra building dialogue with Māori and being included in discussions about where to go from here.


Sale of dairy herd marks the end of an era in Woodstock IL

Linnea and Joel Kooistra stand in their office at Kooistra Dairy Farm, flanked by young stock.

In 1931 the population of dairy cows in McHenry County totaled about 85,000 – the second largest in the country. The most recent agriculture census from 2017 showed about 3,000. That number decreased again in April when the owners of Kooistra Dairy Farm sold their entire herd of 280 milk cows, the last remaining large dairy herd in the county.

Joel and Linnea Kooistra were born into Woodstock-area farming families that were in business during the heyday of dairy farming in Northern Illinois. Their families spanned three generations of farming near Woodstock and a long family history of farming in Netherlands and Sweden.

“All I remember ever wanting to do was farm,” said Joel Kooistra, who grew up in his dad’s shadow on Kooistra Dairy Farm on Thayer Road.

In 1980, he and his wife bought out his dad and made the business their life. The couple proudly carried on the family tradition of caring for the earth and their cows and valuing their family, employees and community.

Joel describes dairy farming for him as very intense – something he needed to be on top of at all times. As a person who loves a challenge, Kooistra thrived in this environment.

“I live and breathe it,” he said. “You see a new life every day.”

While Joel is primarily in charge of the production segment of the farm, Linnea handles the business portion of the partnership. A son, Danik, works full time on the farm.

As a result of her active involvement in the business, Linnea’s been the first woman in many circles.

She not only participates but also has been a leader in many arenas. Her business savvy has kept the family business competitive and led to the distinction of being one of the first farmers to use futures trading for milk, something she has helped teach other farmers.

She has been involved locally on the Zoning Board of Appeals and as a member of the Farm Bureau.  Serving on the U. S. Dairy Sustainability Council has given her an opportunity to educate colleagues on modern dairy practices.

Both Joel and Linnea have been awarded the distinction of being named Prairie Farmer Magazine Master Farmer.

Continually educating themselves through University of Illinois Extension services and seminars, the Kooistras have worked to stay on the cutting edge of best practices for dairy farms, including conservation efforts.

“When the cows left, it was difficult for all of us.”

– Joel Kooistra

The decision to sell the herd and discontinue milk production was not easy for the couple. Reaching retirement age was one consideration. Linnea also named the economics of the industry as another factor, pointing out that dairying was in the third year of a down cycle.

She noted that large-scale animal agriculture has been leaving McHenry County because of a spreading population and lack of infrastructure; however, niche farming seems to be thriving.

An important condition of the sale was that the entire herd be sold together. Like other herd animals, members of a dairy herd are a cohesive group of individuals with an established hierarchy and intricate relationships. Splitting the herd would have greatly disrupted the herd dynamics and unreasonably stressed the animals.

“We always treated our animals well,” said Joel, explaining how the buyers who purchased their cows agreed, saying they’d never seen such a tame, relaxed herd.

The new owners are just a few miles away in Lake Geneva, Wisconsin. The herd of 280 will boost their total milking animals to 2,000, a quantity of animals that reflects the current trend.

“Having them stay together meant a lot,” Linnea added. “We wanted the best for them.”

Joel found it hard to put into words how much the sale of the herd affected him. “When the cows left, it was difficult for all of us,” he said.

Beyond the animals and the responsibilities that went with them, he misses his employees, who he worked closely with every day and whom he considered practically members of his family.

“Everybody did every job,” Joel said. They were so well-rounded.”

Joel also named the veterinarian who visited once a week and the milk hauler who frequented the farm on a daily basis as another facet of the daily life of a dairy farmer that he’ll miss.

While they’ve sold the dairy herd and ceased milk production, they retained 280 young animals – up to age 2 – that they will continue to raise. Once mature, these animals will be sold and added to the farm that bought the original herd.

“We’re slowly weaning ourselves off animals,” Linnea said.

As crop farmers, the Kooistras will continue to run about 800 acres of grain. Joel will keep all the equipment running properly while Linnea will pitch in driving the combine and hauling  grain.

Regarding what she’ll do now that some of the responsibilities of the farm have been lifted, Linnea said, “I’m looking forward to time to do more things locally and enjoy our home and back yard.”


Australian dairy farmers caught in an industry without balance

SEE that empty paddock over there? That’s where the horse was before it bolted.

The horse, in this case, is dairy company Murray Goulburn and the carnage it has caused to the Australian dairy industry.

The Australian Competition and Consumer Commission this week recommended a mandatory code of conduct for the industry to rectify the power imbalance between farmers and the dairy processors.

For thousands of former Murray Goulburn suppliers, it appears to be a case of too little, too late. The co-operative this week officially passed into Canadian hands.

The ACCC found that even where the farmers owned the processor — as was the case with Murray Goulburn — that didn’t stop the co-operative screwing the farmers.

The ACCC discovered an industry where all the power rests with processors, where farmers are rarely told accurately what they could expect to be paid for their milk and where the processors had all the information and the farmers very little.

“Processors are also far better informed about the minimum price that farmers are likely to accept than farmers are about the maximum price that processors are willing to pay,” the report concluded.

It found contracts between processors and farmers were so heavily in favour of processors that the companies could claw back money from farmers for milk supplies months before, as Murray Goulburn and Fonterra did two years ago, without fear of retribution.

Farmers, the ACCC discovered, can’t readily jump out of dairying into another enterprise, because they have so much invested in what is basically an on-farm factory in the form of a dairy.

And the power imbalance leaves farmers unable to invest in their farms to become more efficient, because they never really know what their income will be.

The cycle is crippling for many, particularly, those on smaller farms.

The report paints a picture of the big end of town running riot because it can. Mmmmm, sound familiar?

A mandatory code of practice would compel processors to provide far greater levels of information to farmers.

Yet, the push for a mandatory code has been opposed by the industry’s two biggest farmer groups, the United Dairyfarmers of Victoria and Australian Dairy Farmers.

They both have said a review of the current voluntary code of conduct needs to be completed before a mandatory code should be considered.

I can’t see a lot of their farmer members agreeing with that stance.

Ironically, concerning the other controversial element of the industry, the ACCC gave the $1-a-litre milk in Coles and Woolworths a pass, saying the price on the shelf made little difference to what farmers were paid.

According to the report: “Farmers’ lack of bargaining power means that they are unlikely to benefit from an increase in the retail (or wholesale) prices of private label milk or other dairy products.

“Even if processors were to receive higher wholesale prices from sales to supermarkets, this does not mean the processors will pay farmers any more than they have to secure milk.”

The report paints the picture of an industry completely out of whack.

But a 240-page report could never sum up the imbalance in the dairy industry more than this single line revealed in The Weekly Times last week: Murray Goulburn chief executive Ari Mervis will be paid $5 million for 10 months’ work this financial year.

If only the farmers could get the same deal.

Looks like the horse had plenty in its saddlebags when it bolted.



Source: The Weekly Times

Canadian Dairy Is Having Its Cake and Eating it Too

Canadian dairy farmers are expected to increase milk production this year by 4 percent, to 21.6 billion pounds. This follows three consecutive years of growth in Canadian milk production. In fact, since 2014, Canada’s milk production has grown by more than 16 percent, more than any other major dairy-exporting region. For comparison, from 2014 to 2018, U.S. milk production will grow 6 percent, the European Union is expected to grow 4 percent and New Zealand milk production is expected to remain flat.

Spurred by increasing demand for butter and higher milkfat-containing products, the growth in Canadian milk production does have a downside: increased supplies of less desirable skim milk solids, i.e. nonfat dry milk powder. During 2015, nonfat dry milk powder inventories in Canada reached a 38-year high of 60,000 metric tons. Partially in response to these growing inventory levels, as well as imports of competitively priced U.S.-produced ultra-filtered milk proteins, Canada introduced a national ingredients pricing scheme designed to lower the price of skim milk solids and reduce dairy product imports from the U.S. (Canada Closes Door on U.S. Dairy Farmers). The scheme was fully implemented in 2017. Equally trade distorting, the lower prices for Canadian-produced skim milk solids allowed Canada to engage in the export market in a significant way.

In the decade prior to 2016, Canada exported an average of 11.3 thousand metric tons of skim milk powder per year using export subsidies. In 2016, Canadian skim milk powder exports to the world climbed 74 percent year-over-year, to 24 thousand metric tons. The 2016 export volume represented approximately 23 percent of Canada’s nonfat dry milk production. By 2017, and as a direct result of the national ingredients strategy, total skim milk powder exports from Canada increased 203 percent, to 72 thousand metric tons, Figure 1. This trend is expected to continue in 2018, as USDA projects total Canadian skim milk powder exports to increase by 13 percent, to 85,000 metric tons – representing 61 percent of their nonfat dry milk production. 

The recent surge in Canadian skim milk powder exports has cannibalized sales of U.S.-produced skim milk powders in foreign markets. For example, during 2017, Canada exported 4.5 thousand metric tons more skim milk powder to Mexico than the prior year – an increase of 122 percent. Meanwhile, U.S. skim milk powder exports to Mexico dropped by 2.5 thousand metric tons. Similar shifts in market share were observed in the Philippines, Indonesia, Vietnam, Jamaica, Saudi Arabia, Jordan, Uruguay and Sri Lanka, Figure 2. 

The largest beneficiaries of Canada’s newfound exporting prowess include Algeria, Jordan, South Africa, Uruguay and Sri Lanka. The import volume of skim milk powder from Canada to these countries combined increased 1,000 percent to over 2,000 percent.

In a perfectly competitive market, there would be nothing wrong with Canada’s milk pricing and exporting actions with respect to skim milk solids. However, Canada’s dairy farmers do not operate in a competitive market like U.S. dairy farmers do. To insulate its domestic dairy market, Canada maintains strict tariffs and import quotas and administers a milk supply management system – effectively making farm-level milk prices, and thus consumer (retail) dairy product prices, much higher than in many other countries.

For dairy products that Canada’s domestic market desires, consumer prices are artificially higher due to its supply management system. The higher returns from their provincial government-imposed supply management system allow for both the exporting of skim milk solids into international markets and for Canada’s milk processors to buy Canadian-produced skim milk solids at artificially low prices. The lowering of prices for Canadian-produced skim milk solids made Canada more competitive in export markets and simultaneously made U.S. imports into Canada less competitive.

The bottom line is that for products in surplus in the market, i.e. skim milk solids, the national ingredients pricing scheme functions similarly to an export subsidy and allows Canada to dispose of the surplus product in global markets at or below international market-clearing prices. That type of trade-distorting policy is one factor that has contributed to lower U.S. milk prices.

There is no doubt that U.S. trade negotiators have this issue, as well as the supply management system, as one of the top agricultural issues to negotiate with Canada in a North American Free Trade Agreement modernization. Repealing the national ingredients strategy will go a long way toward making trade fairer and improving the income of U.S. dairy farm families. 


Cheese Producer To Cut Contracts With 11 Wisconsin Dairy Farms

Arla Foods Plans To End Ties With Producers In 60 Days

Eleven Wisconsin dairy producers are losing their contracts with international dairy cooperative Arla Foods.

The company said it would stop buying milk from about a third of the farms that supply milk for its cheese plant in Hollandtown, in Brown County.

Arla Foods says it has no plans to cut production at the Hollandtown plant and that 24 farmers will continue to supply it.

A spokeswoman said in a statement that “increased production and market volatility” led to the cuts.

Mark Stephenson, director of Dairy Policy Analysis at the University of Wisconsin-Madison, said those same issues make it more challenging for dairy farms that lose their contracts to rebound.

“It was the case that if a plant happened to drop their customers or go out of business, that you’d typically have another plant right there on the farm the following day looking for additional milk supplies, because the state was tight on milk production,” Stephenson said. “That’s not true now, and so we find ourselves in a different kind of position, and farms need to worry about not having a home for their milk.”

The news comes a year after Grassland Dairy Products announced it would stop buying milk from 75 Wisconsin producers.

Stephenson said the industry is likely to see more such cutbacks going forward.

“Last month it was Dean Foods that was dropping about 100 producers over in the eastern part of the country,” Stephenson said. “This is something that’s a bit new to our industry, but I suspect we’ll see more of it.”


Boclair: UKs Premier Herd

l to r – John Brewster, David Brewster and the cow is Boclair Windbrook Elegance

The Brewster family of the admired Boclair herd, crowned as Holstein UK Premier Pedigree Herd in 2017, is delighted to be hosting the annual Premier Pedigree Herd Open Day on Thursday 28th June 2018 from 10am until 3pm. The day will run in conjunction with the Holstein Scotland Open Day, where the Club will hold a stock judging fundraiser.

Established by Jack Brewster back in 1952, the family business is now run by Jack and Marion’s sons, David and John. The family are now delighted to invite guests to their farm at Bearsden, near Glasgow, for this exclusive open day supported by principal sponsors Lely, ForFarmers and Worldwide Sires.

The Boclair herd has dominated many Scottish Holstein Club awards and competitions and is well regarded nationally for their exceptional confirmation, production and breeding attributes. Boclair is a world-renowned, premier herd with some of the finest dairy cattle in the UK.

Boclair Farm
The Brewster family runs 850 acres, with most of the land at Boclair and some additional land at the nearby Bogton, Bardowie and Branziet farms. Arable ground accounts for 450 acres, whilst 400 acres are kept for silage and grazing during the summer months. The 200-cow herd is based at Boclair, alongside a further 300 youngstock. All heifers are artificially inseminated using high genomic sexed semen and there are over 140 animals classified either VG or EX. The herd has a twelve-month rolling average of 13,408 litres at 3.67% butterfat and 3.22% protein, with a 404-day calving interval.

The Boclair herd has always been pedigree, with the Brewster family showing a strong interest in high quality cattle and genetics. A bull which stands out in Boclair history is Boclair Objective, an animal which was registered over 20 years ago and has had a major impact on breeding within the herd.  The herd has won the prestigious Holstein UK Master Breeder Award twice, which is a significant achievement considering a herd is only eligible to receive this every ten years, therefore highlighting Boclair’s consistent breeding excellence.

Why Pedigree
Holstein UK is the largest independent cattle herd book in Europe and is wholly owned and run by its members. By supporting the improvement of Holstein and British Friesian breeds, Holstein UK maintains and makes available accurate records to enable profitable breeding. Increased cattle value, breeding information and knowledge and improved herd quality are all evident factors of how a herd benefits from being pedigree.

David Brewster, Boclair Holsteins, said, “It is with great pleasure that my family and I welcome Holstein advocates, members and young aspiring breeders to join us at Boclair Farm on 28th June. We will look forward to showing visitors around our farm and the Boclair herd. Wining the Holstein UK Premier Pedigree Herd Competition last year was a major highlight for us, adding credibility to our farming methods, breeding and genetics, and we look forward to sharing further insight into our business in June.”

For further information please contact the Holstein UK events team on 01923 695200 or email

Directors of Australia’s biggest dairy company quit board over VDL’s future direction

Five non-executive directors who quit the board of Australia’s largest dairy company this week say they resigned over a difference of opinion about the future management of dairy farms in north-west Tasmania.

Moon Lake, owned by Chinese businessman Xianfeng Lu, purchased the Van Diemen’s Land Company (VDL) dairy farms in north-west Tasmania in 2015.

All of the non-executive directors of Moon Lake — Dr David Crean, Keith Sutton, Rob Poole, Bruce Donnison and Simon Lyons — resigned on Monday, and VDL Farms chief Evan Rolley announced he would not extend his contract beyond June 30.

Former deputy chairman Dr Crean said they felt continuing as directors was untenable because they believed Mr Lu was not accepting their advice about a proposed new governance structure.

“Under the restructure Mr Lu will be the CEO of all of the companies including the VDL farms, and running that with a general manager,” Dr Crean said.

“We said to him that was not acceptable, that you needed a dedicated CEO to run the VDL farms.”

Dr Crean said Mr Lu also rejected the board’s recommendations about capital expenditure on the farms, including about irrigation infrastructure.

“There’s inadequate irrigation, so we strongly recommended that as the number one priority that adequate water storage facilities be built to provide irrigation in future years to mitigate against drought, and that was rejected,” he said.

Moon Lake says new corporate structure will help it grow

On Tuesday, Moon Lake announced the Foreign Investment Review Board (FIRB) had approved its proposed corporate restructure.

Currently Mr Lu is the sole owner of Moon Lake, and its ownership will be transferred to Shenzhen Stock Exchange-listed company Chinese Ningbo Xianfeng New Material Co Ltd (APlus), in which Mr Lu has a 35 per cent share.

Moon Lake and sister company VAN Dairy will come under the control of a new Australian holding company with a chief executive and board, which will appoint general managers to run Moon Lake and VAN Dairy.

Mr Lu said the new structure would allow the group to become a vertically integrated dairy business which sells dairy products in Australia and internationally.

“We are of the view that the corporate governance structure of the Australian operations needed to change in order to best achieve these strategic goals,” he said.

“However, given the restructure and proposed new governance structure, the non-executive directors and the CEO of VDL Farms agreed to part ways.”

Mr Lu said there would be no change to operations at the VDL farms and no job losses.

Mayor of the Circular Head Council Darryl Quilliam said he had already spoken to Moon Lake managing director Sean Shwe, who had allayed his concerns about on-the-ground impacts.

“He reassured me that there’s not going to be any change on the farms at all, there’s just change in the governance of the company,” Mr Quilliam said.

“So I’m really pleased about that for our farmers and for the suppliers of Moon Lake it’s business as usual.”

Company focus on capital, Asian markets

PAC Partners dairy analyst Paul Jensz has been in contact with Mr Lu and Moon Lake for about three years.

He said Mr Lu had always intended to transfer ownership of Moon Lake to the listed company, but the move had been delayed by the Australian dairy price crisis of 2016 and issues with the FIRB.

“Mr Lu and the A-Plus team want to grow a very large dairy business and use access to capital both here and potentially in China to do that, and it was hard to do that off his personal balance sheet, it was a much easier process and a much more transparent process to do that in a listed vehicle,” Mr Jensz said.

He said the new board was likely to have more members with specialist knowledge of the Chinese market.

“One of the opportunities that Mr Lu and his team sees is that linking Tasmanian dairy with the Chinese market, so there would be both local representation here in Tasmania, and there would also be representation in the distribution channels in China as well.”


Dairy farmers face destruction from low milk prices

Wisconsin lost 500 dairy farms in 2017, and about 150 have quit milking cows so far this year, putting the total number of milk-cow herds at around 7,600 — down 20% from five years ago

Gina Stokes says she will keep fighting for her family’s dairy farm, where the cows have names, not numbers, and the land tugs at her heart. 

“There is no better place to raise my family,” Stokes said about her farm, near Omro, Wis., that she and her husband, Dan, have with their four children.

“It’s a fair representation of what true life is,” Stokes said. “I cannot expose my kids to anything more real than the struggles, the benefits and the responsibility we all take in it.”

Wisconsin lost 500 dairy farms in 2017, and about 150 have quit milking cows so far this year, putting the total number of milk-cow herds at around 7,600 — down 20 percent from five years ago.

Last month, more than 50 groups from across the country — including the Wisconsin Farmers Union, Family Farm Defenders and the National Family Farm Coalition — asked Congress for emergency relief from the deepening troubles on small dairy farms.

Among other things, they want the government to set a minimum price that farmers would get for their milk — at a break-even point of $20 per hundred pounds, or about 11 gallons, compared with $13 paid in some months of the downturn.

They’re seeking a milk supply management system to stabilize volatile markets. And they’re asking the government to purchase surplus milk for use by emergency food providers, such as food pantries.

Some of the solutions may seem extreme, but so is the crisis that’s rapidly eroding America’s rural economy and threatening families, according to the farm groups.

“The milk checks are not covering the bills,” Stokes said of her family’s dairy operation, which has about 75 cows.  

Yet there’s strength and defiance in her voice as she talks about the value of small family farms and why people in the city might buy more milk if they knew the stories behind them.

“What you are going to find here is love. You are going to find animals that are treated like our children and that get more pampering than the adults on this farm,” Stokes said. “If I have to cut back on something to make sure the bills are paid, and say a few more prayers, that’s what I’m going to do because I am a lifer in this business.”

That last notion, at least, is often expressed by farmers searching for answers in a crisis that threatens their way of life as well as their livelihood.

Suicide worries in dairy country

The situation has become so dire that dairy marketing cooperatives have started providing suicide hotline information to members along with milk checks. 

Yet critics say the proposals being put forth to save family diary farms could make matters worse. 

“I have always felt that the market is the best way to sort out the amount of milk required,” said Mike North, president of Commodity Risk Management Group in Platteville, Wis.

Creating a minimum price, especially without supply management, could encourage farmers to ramp up milk production in a market already awash in it.  

“It’s a very temporary fix followed by the same headaches down the road,” North said. “Any time the government becomes the leading decision-maker of how much is produced, you immediately ruin a market.”

Some of the farm groups cite Canada’s dairy system as an example of how milk supply management, coupled with price controls, has kept small farms in business.

But Canada has its flaws, too, said Gordon Speirs, a former Canadian dairy farmer who now milks about 2,000 cows in Brillion, Wis.

“I can tell you that it doesn’t run as smoothly as they would like you to believe. Seemingly every year they are trying to change the rules … to deal with overproduction or underproduction or meeting a quota,” Speirs said.

“All of those things we have witnessed happening in the U.S. are in fact also happening in Canada, just not as quickly.”

Still, Speirs sympathizes with farmers’ complaints about the U.S. government’s Dairy Margin Protection Program, which is kind of an insurance policy for farmers when their milk price plummets.

“It’s like a safety net that is hanging five feet above the ground when you are jumping off the Sears Tower. It’s not going to save you,” he said.

‘Too damn good’

Dairy farmers face tough decisions when milk prices are low because producing more  lowers their cost on a per-unit basis but adds to the oversupply problem.

Even as the number of dairy farms has fallen, milk production has soared from better cow genetics and improved livestock feed.

“We are just too damn good at what we do, as an industry,” said Speirs, who is on a committee of farmers advising Edge Dairy Farmer Cooperative in Green Bay, Wis.

Small farms say the milk surplus has crushed their market, even at some local cheese plants that used to buy from them, but now get cheaper milk trucked in from Michigan and other states. 

“We have non-farm income to keep us afloat, so far. But it feels like we’re one bad decision, or one bad weather event, from falling off the edge,” said Randy Wokatsch, a dairy farmer near Wausau, Wis.

“Prices are already adjusting themselves,” said North, with Commodity Risk Management Group.

“That’s how these markets work. They ebb and they flow,” he said.

Looking to supply and demand

Not everyone agrees.

Some farm groups say the dairy industry is not a marketplace where the supply-and-demand equation sorts itself out naturally, because it’s driven by government policies.

“It’s absurd to call it a free market,” said Kara O’Connor, government regulations director for Wisconsin Farmers Union.

“Our nation’s supply of milk badly exceeds the demand,” O’Connor said.

Most agriculture subsidies go to a few, but very large, agribusinesses, said U.S. Rep. Ron Kind (D-Wis.).

“Policy-makers have had their thumb on the scale, and unfortunately that scale has tilted away from our small and midsize farms for too long,” Kind said.

The Wisconsin Farm Bureau Federation, the state’s largest farm group, doesn’t favor a minimum milk price or a supply management system. 

There have been improvements made in the Dairy Margin Protection Program, and more changes are coming, said Kevin Krentz, a Farm Bureau board member with a 600-cow dairy farm in Waushara County.

Farm Bureau says it supports growth in the export of dairy products, and increased consumption of milk domestically, as ways for the industry to work through the price slump. 

No government program is a “quick fix” for scores of dairy farms on the edge of shutting down, according to Krentz.

“That is the sad part about this, but it’s the reality,” he said.

Wokatsch and his wife, Kerry, milk 55 cows on their 330-acre farm. 

He would like to see some type of supply management system included in the Dairy Margin Protection Program.

“I believe we can turn things around, or if not, at least slow the current trend. But this can only happen if farmers and non-farmers become informed, engaged and work toward the goal of saving the legacy of Wisconsin’s family dairy farms,” Wokatsch said.


Supermarket $1 milk has ‘no direct relationship’ to prices paid to farmers, ACCC inquiry finds

Increasing the price of supermarkets’ $1-a-litre milk would have no impact on the price paid to farmers, a long-awaited report into Australia’s dairy industry has concluded.

But the dairy industry is unlikely to accept the findings of the Australian Competition and Consumer Commission’s final report released on Monday, which instead called for a mandatory code of conduct be implemented to improve contracting practices between dairy processors and farmers.

“Dairy farmers are understandably frustrated the retail price of milk has declined in real terms, since retailers adopted their milk pricing policies,” ACCC Commissioner Mick Keogh said in a statement.

“The price set by retailers is arbitrary and has no direct relationship to the cost of production for the supply of milk.

“In examining the impact of this on farmgate prices, however, the ACCC found almost all contracts for the supply of private label milk allows processors to pass through movements in farmgate prices to supermarkets.

“Therefore, there is no direct relationship between retail private label milk prices and farmgate prices.”

Mr Keogh said if supermarkets agreed to increase the price of milk and processors received higher wholesale prices, “processors would still not pay farmers any more than they have to secure milk”.

“Given this, the ACCC believes that increases in the supermarket price of private label milk are unlikely to increase the farmgate prices received by farmers, unless farmers have improved bargaining power in their negotiations with processors,” he said.

Mr Keogh said a mandatory code of conduct would “address problems arising from the large imbalance in bargaining power and information that exists between dairy farmers and processors”.

“Currently, processors can impose milk prices and other terms of milk supply contract terms that are heavily weighted in their favour,” he said.

“Some milk supply contracts also contain terms that restrict farmers’ ability to change processors for a better offer. These issues ultimately harm dairy production efficiency and reduce the effectiveness of competition between processors.”

Earlier this month, the ACCC approved the takeover of Murray Goulburn by Canadian dairy giant Saputo.

Saputo chief executive Lino Saputo has previously flagged the end of $1 milk, saying he didn’t “know the economics” of the deals that allow supermarkets to sell milk for less than the price of bottled water.

Last last year, Australian Dairy Farmers CEO David Inall hit out at the interim report, calling for a return to “sustainable” dairy pricing. “$1-a-litre milk is not sustainable as it takes money out of the supply chain,” he said.

“If you extract significant moneys out of a supply chain over a long period of time nationally, it just makes sense that it will impact farmers. We need to ensure a fair price for everybody.”

World’s first floating dairy farm being built

The operation in the Dutch city of Rotterdam will supply urban residents with milk and showcase agriculture

It has taken a lot of time to get the green light, but construction of the world’s first floating dairy farm is finally underway in the Netherlands.

This innovative farm is being built at Rotterdam and will be home to 40 dairy cows when completed. The idea is that the farm will supply the city with fresh dairy products every day, produced, say the developers, “in an animal-friendly and circular manner.”

Three concrete floats are currently being constructed in a drydock that together form the foundations for the floating farm.

The plan is that these floats are expected to be shipped to their final location in the Merwe4Haven in Rotterdam in the middle of May.

However, a few target dates have been shifted over the course of developing the farm, which has prolonged the final opening.

The brains behind this bold move are from Courage, the innovation institute of the Dutch agriculture and dairy sector, Uit Je Eigen Stad, the national frontrunner on city farming, and Beladon, a leading Dutch company on floating concepts.

Peter van Wingerden, project initiator on behalf of property developer Beladon, said this is a real milestone for the project.

“We are absolutely delighted that construction of the floating farm has now begun,” he said.

“After all the preparations, this is an unprecedented milestone for everyone who has worked to get this project up and running.

“Building on water always brings additional challenges with it, although it offers us the opportunity to restore food production to the inner city at the same time.

“We believe that building on water is the way ahead in a country with a changing climate and ever increasing urbanization. A floating farm is the perfect scalable solution for cities such as Rotterdam, with a lot of space on the water.

“In addition, we see huge opportunities for this prototype all over the world. We will be building with all due speed in the months ahead so that we can welcome our first cattle later this year.”

Other benefits of such a system, close to urban populations, include reducing the distance that milk and other dairy products need to be transported to urban consumers, reducing greenhouse gas emissions and putting shoppers back in touch with nature and farming.

The farm will house 40 cows on the floating structure, measuring 40 by 32 metres.

The cows will be able to use a “cow garden” at the top of the structure with a soft floor, which will have the feel of a natural living environment. There will be trees and bushes available to offer areas of shade, and the roof of the cow garden can be entirely opened.

Urine produced by the cows will drain through the floor into an airtight storage facility. By keeping it contained there, ammonia emissions will be limited and it will be able to be distributed for use as fertilizer for city farms. Manure, on the other hand, will be collected and stored separately.

A biodigester will turn the manure into biogas and fertilizers, which in turn can be used to help grow the grass used to feed the cows.

Rainwater will be collected and filtered for the cows to drink.

Cows will have access to an adjacent pasture by using a bridge between the farm and the dock when tides permit.

The cows will be milked with a robotic milking machine and have access to additional grass on the farm grown under LED lighting.

The goal is to extend the facilities once the trial period is deemed a success so that the farm can house 200 cows producing 5,000 kilograms of milk a day.

Raw milk will be dispensed to consumers through a public “milk tap,” and vending machines will sell processed produce. Dairy produce will also be sold to local catering outlets, hotels and shops.

The new farm will showcase the latest technology that money can buy and is said to be an enormous asset for the Dutch agricultural sector.

“Realization of the floating farm is an enormous asset for the Dutch agricultural sector as a whole,” said Carel de Vries, project initiator on behalf of the Courage innovation organization.

“It’s almost impossible to bring cows and dairy processing closer to the city residents. Moreover, the latest technology will be tested on the floating farm going forward with the aim of drastically reducing environmental impact.

“We are developing opportunities that will benefit the entire dairy farming sector throughout the country in the fields of animal welfare, manure processing and circularity. We are thankful for the help we have had to date from all partners involved.”

Source: The Western Producer

Governor, Ag Secretary, Fsa Director Tour Wisconsin Farms Damaged By Blizzard

Government leaders want Wisconsin farmers impacted by the recent blizzard they will help them recover.

Wisconsin Ag Secretary Sheila Harsdorf tells Brownfield, “The northeast was hit hard with this storm and we, between the federal government and the state, we want to do whatever we can to get people back on their feet.”

Harsdorf joined Governor Scott Walker and USDA Farm Service Agency Director Sandy Chalmers on a tour of storm-damaged farms Wednesday.  Walker says storm damage from the entire state should be reported, and the Insurance Commissioner’s office can also help.  “This is fairly unique, so depending on the insurer, if farmers and other property owners identify (or) have a feeling that maybe the adjusters aren’t as attuned to the challenge that you might have on a farm situation, again, that’s why we have a hotline where people can contact us.”

Chalmers says county FSA offices will collect storm damage information, which can be used to determine if Ag Secretary Sonny Perdue will declare a disaster.  She tells Brownfield farmers impacted by the storm should see what FSA can offer them.  “It would take too much time to explain the ins and outs of all of the programs we have available, but give your local (FSA) office a call and they can walk you through what you might be eligible for.”

Walker, Harsdorf, and Chalmers talked to Brownfield while touring Birling’s Bovines, a 3-thousand cow dairy near Black Creek, where drifts as high as six feet caused roofs to collapse.


Source: Brownfield

Senators introduce bipartisan bill to recruit and train next generation of farmers

‘Next Generation in Agriculture Act’ would address top challenges for young farmers

The National Young Farmers Coalition (NYFC) applauded today’s introduction of the ‘Next Generation in Agriculture Act’ by Senators Heidi Heitkamp (D-ND) and Susan Collins (R-ME). The bill would address key barriers to entry for young producers, including access to farmland, training, and federal programs.

“As the majority of our nation’s farmers approach retirement age, we need bold action to ensure that their legacy continues,” said Lindsey Lusher Shute, co-founder and Executive Director of the National Young Farmers Coalition. “Young people across the country are stepping up and looking to be the next generation of growers, but they need our help. We applaud Senators Heitkamp and Collins for recognizing the urgency of this moment and leading the way on behalf of young farmers. The future of farming and the success of our rural communities depend on it.”

Senators Heitkamp and Collins introduce the Next Generation in Agriculture Act at a critical time, as Congress writes the next farm bill amidst troubling demographic and economic trends. Farmers in the U.S. over the age of 65 now outnumber farmers under 35 by a margin of six to one, and U.S. farmland is overwhelmingly concentrated in the hands of older farmers. Nearly two-thirds of farmland is currently managed by someone over 55, and the National Agricultural Statistics Service estimates that over the next five years—the lifespan of the next farm bill—nearly 100 million acres of U.S. farmland are expected to change ownership and will need a new farmer.

The Next Generation in Agriculture Act would address some of the top barriers identified by the 2017 National Young Farmer Survey conducted by NYFC, including challenges accessing farmland, a lack of business training, and difficulty finding and affording skilled labor. Young farmers also cited burdensome paperwork and a lack of familiarity as their top barriers to accessing USDA programs. The bill would make significant progress minimizing those barriers by supporting key portions of NYFC’s Young Farmer Agenda, including:

  • Reauthorizing and increasing mandatory funding for the Beginning Farmer and Rancher Development Program (BFRDP), the only federal program exclusively dedicated to training the next generation of farmers and ranchers. BFRDP provides competitive grants to nonprofits and universities to develop new farmer education, extension, outreach, and training initiatives, including incubator farm programs, business planning resources, and innovative farm and ranch transfer strategies.
  • Adding new flexibility for and emphasis on BFRDP projects that address urgent needs, including farmland transition and succession planning for new and retiring farmers and food safety. The bill would also eliminate BFRDP’s matching funds requirement, expanding access for lower-resource organizations that serve high-need populations of farmers.
  • Creating new positions at USDA to assist young and beginning farmers with technical assistance, help identify resources and opportunities for training, and help coordinate outreach efforts with local stakeholders and service providers.

As they thanked Senators Heitkamp and Collins for introducing the bill, NYFC called on every Senator to endorse the bill and advocate for its inclusion into the next farm bill.

How farmers are dealing with low milk prices in NY

Valatie dairy farmer Tim Ooms said it’s been a tough couple of years for those in the dairy industry.

“Unfortunately we’re a supply and demand economy and we’re making too much milk right now,” Ooms said.

Countries like China and Russia used to purchase a lot of U.S. produced milk. But that’s changed recently due to global milk production being on the rise.

Coupled with the fact that fewer people are drinking milk the U.S. these days, about 1,000, or 20 percent of dairy farms in New York State have closed in recent years.

But, that hasn’t helped with the supply surplus:

“At the same time other farms have expanded,” New York Farm Bureau Manager of Public Affairs Steve Ammerman said. “We’re still about the same number of cows in New York producing milk. A lot of times at the farm goes out of business they’ll sell their cows to their neighbors, they’ll sell their land to their neighbors as well.”

Though sales of dairy products like cheese and yogurt are expanding, they don’t earn as much as fluid milk does.

As a result, many farmers are looking for ways to cut costs:

“Three years ago in June we put in robotic milkers which is basically just an arm that goes across, cleans the cow off, hooks the machine up and when it’s done takes and sprays each teat with iodine then they go, it’s all on a voluntary basis,” Ooms said.

A Ooms and Sons Dairy Farm uses solar power to heat water used in the production process. They also have collar monitors that record everything from milk production and feed intake to ovulation times in an effort to increase their chances of impregnating the cattle.

Though Ooms is looking to make his farm as efficient as possible, there are some things he’s not willing to compromise:

“Even in tough times you got to take care of your cows, we try to feed them the best ration possible,” Ooms said. “If you take care of them they’ll take care of you.”

The Department of Agriculture issued a statement on Monday, saying they’re expediting Milk Marketing Advisory Council to research new and innovative uses for New York Dairy Products and increase consumption of New York produced milk.


Source: WNYT

Dairy Australia announces search to find new managing director

Dairy Australia has launched an international recruitment process after managing director Ian Halliday today announced he would not seek to renew his contract when it expires at the end of the year.

After nearly nine years in the role, Mr Halliday said it was time to bring in some fresh thinking to assist the Dairy Australia Board in the development and implementation of a new strategic plan.

“It has been an absolute privilege to work with the Dairy Australia team and people from right across the dairy and government sectors and I am proud of the way we’ve been able to all work together through some incredibly challenging times,” Mr Halliday said.

Mr Halliday said he would be working with the Dairy Australia Board to ensure a smooth transition to a new managing director.

“With Jeff Odgers elected as the new Chair in late 2017 and my contract coming to an end in 2018, it’s time to bring in a fresh perspective,” he said.

Mr Odgers praised Mr Halliday’s contribution to the dairy industry during his time at the organisation.

“Ian’s leadership has brought Dairy Australia closer to farmers and that has put the organisation in a stronger place,” Mr Odgers said.

He said the Dairy Australia Board was now focussed on finding a new managing director and had engaged recruitment agency Spencer Stuart to manage the process.

“There is an incredible depth of capability among the Dairy Australia staff and the board has every confidence in them as we transition to a new leadership phase for the organisation,” Mr Odgers said.

Mr Halliday joined Dairy Australia in January 2010, after a string of senior executive roles across the food processing sector.

SourceDairy Australia

Special issue of the Journal of Dairy Science® highlights advances in silage research

A new collection details the science and management of multiple aspects of silage


Source: Elsevier

California milk producers have golden opportunity to join FMMO

The California dairy industry can change its destiny with the current Federal Milk Marketing Order (FMMO) vote.

Three years ago, the three large dairy cooperatives that control about 75 percent of California’s milk asked the USDA to allow them to join the federal milk marketing system and leave the regulatory control of the California Department of Food and Agriculture. That petition led to about two months of hearings that to the layman made as much sense as the sounds the adults made in the “Peanuts” specials we enjoyed on television as kids.

For all the noise over the past umpteen years about how poorly California dairymen are treated by state milk regulators when it comes to milk pricing, one would think the FMMO vote would be a slam-dunk. After attending a meeting recently in Tulare, Calif. and chatting with industry representatives I was shocked to learn that it may be anything but.

If there’s one thing I’ve learned it’s that there can never be consensus in a room full of dairymen.

I’m told the milk cooperatives will “block vote,” meaning each cooperative will cast one vote on behalf of its entire membership. It’s understandable that some dairymen want the opportunity to vote as individuals, but this is the cooperatives’ petition. Surely dairymen and their cooperative boards agreed at the time the petition was submitted.

After hearing how many attempts it took to get a simple quorum in the recent state milk quota referendum the block vote is in everyone’s best interest.

Then again it may not be that simple. It never is with dairy pricing. I’m also told that one of the cooperatives might see the inclusion of depooling in the California FMMO as a “poison pill” and could vote against the measure over that alone. The question then becomes how much milk does that cooperative control and would that be enough to shut down the entire FMMO in the unlikely event that pigs fly and every other dairyman voting supports the FMMO.

California dairy producers can ill-afford to shut this down because they didn’t get everything they wanted in the proposed federal order. The alternative is a system proven unfriendly to California milk producers.

This is a good opportunity for the industry to come together and work for the common good of all milk producers, including the idea that bickering over formula pricing is not increasing consumer demand for U.S. dairy products that appear to be losing the marketing battle against plant-based alternatives.


Low milk prices force farmers to make tough decision

It was always Kyle Kurt’s dream to run his own a dairy farm. The owner of Kurt Dairy has been in the farming business since he was a teen.

“I started working for the previous owner when I was about 13 years old. And I’ve worked for him up until I brought it,” he said.

Milk prices have taken a dramatic turn downward over the past four years. After more than 15 years of running “Kurt Dairy” in Dane County, owner Kyle Kurt was forced to put it up for auction due to the prolong low milk prices.

His farm has been struggling for the past two years. Kurt said farmers are getting $13.50 per hundred pounds for their milk, which is well below what they were getting just a few years ago. Kurt thinks there is too much milk in the market, which has contributed to the lower prices.

“In 2014, for a couple months, we got around $24, $25 a hundred,” he said.

But he said they need at least $18 just to break even.

“Kurt isn’t the only farmer in the area who is struggling. A neighboring farmer says low milk prices have forced him to put his cows up for sale.”

Just a mile away, James Mulcahy’s dairy farm is up for sale because of low milk prices.

“It’s very tough. It’s very disheartening because we’ve stuck a lot of soul into that place. We’re 3rd generation. It’s not easy,” he said.

Kurt feels if prices don’t take a dramatic turn upwards, there won’t be many small family farms left.

“Especially for a young person to start farming is virtually impossible. You’re going to have to have a lot of backing from generations before you to get into dairy farming.”


Source: WKOW

Canadian Dairy Network Board of Directors Executive Summary – April 2018

The CDN Board of Directors held one meeting on February 26 at the Dairy Farmers of Canada office in Montreal and a second meeting on April 13, 2018 at the Hilton Quebec Hotel in Québec City. Immediately following this latter meeting, representatives of CDN member organizations attended a Special General Meeting of Members. The following is a summary of actions, recommendations and decisions stemming from these various meetings.

  • At the Special General Meeting of Members held on April 13, 2018, the voting delegates unanimously approved that By-law No. 3, which is a by-law to amend and restate By-law No. 2, become the new by-law of the Corporation. In addition, the membership also unanimously approved the amendments to the articles of the Corporation as proposed by the Board of Directors. These approved amendments included all modifications to the current CDN by-laws and articles that are required to proceed with the proposed partnership between CDN, CanWest DHI and Valacta, which is scheduled to be effective on October 1, 2018. Earlier in March, the required by-law amendments for CanWest DHI to move forward with the partnership were unanimously supported and the process for Valacta is expected to take place in the coming weeks.
  • During the meetings of the CDN Board of Directors an important topic discussed was the ongoing collaboration between CDN and Dairy Farmers of Canada (DFC) towards the establishment of a national dairy cattle traceability solution for Canada. This program, named DairyTrace, was a vision developed by the DFC Board of Directors but defines CDN as the legal entity to become responsible for dairy cattle traceability across Canada. Given the approved governance structure for the DairyTrace Program, the CDN Board of Directors approved the establishment of a new committee, the DairyTrace Advisory Committee. The committee composition includes representatives from the Boards of Directors of CDN and DFC, as well as industry partner organizations and regional representatives from provincial dairy associations, and the CDN Board appointed Gert Schrijver as Chairman. Following its establishment by the CDN Board in February, the DairyTrace Advisory Committee held its first meeting in March, for which a separate summary will be provided.
  • Based on 12 months of activity for the fiscal year ending March 31, the unaudited projected total revenue is 1.7% above budget, mainly due to additional contracted services provided internationally during the year. Unaudited operational expenses are projected to be 4.1% lower than budget, mainly due to reduced staff salaries and benefits resulting from a vacancy during the year. Overall, the year-end result is expected to be a significant net surplus of revenue over expenses, estimated at ≈$120K, translating to Members’ Equity of ≈$420K at March 31, 2018. For DairyGen activities, administrative expenses as well as funding of ongoing and new projects were lower than budgeted, resulting in a carry-over of ≈$800K instead of the budgeted amount of $533K. Given the various activities related to the new DairyTrace Program, associated expenses and revenue totalling ≈$200K are presented under Special Projects in order to separate them from ongoing operational activities.
  • For 2018-2019, the CDN Board of Directors approved a budget that balances revenue and operational expenses at a level just exceeding $2M. Operational expenses are budgeted at 1% higher than projected expenses for the past fiscal year, which now includes a full complement of staff. Given the expected revenue from other potential sources during the coming year, the budgeted level of funding from members increased by 3.1% compared to the 2017-2018 budget to a total of $1.927M. In addition, CDN will be offering administrative services on behalf of the Canadian DHI partners for the implementation of their new data access and usage policy to be implemented during the year. Budgeted revenue remains consistent with the pre-defined levels collected from A.I., breeds and DFC, totalling $430K while expenses are expected to include contributions to new projects submitted to AAFC as part of the Dairy Research Cluster 3 under the Canadian Agricultural Partnership (CAP). The 2018-2019 budget also includes balanced revenue and expenses of $500K for the next year of the development and implementation of various activities related to the DairyTrace Program.
  • CDN management updated the Board regarding the recent offer of employment accepted by Dr. Allison Fleming, who will join the CDN team of geneticists in the coming months. After completing her BSc (Agr), MSc and PhD degrees at the University of Guelph she comes to CDN from her post-doctoral position within the Centre for Genetic Improvement of Livestock (CGIL) at the University of Guelph. Dr. Fleming’s responsibilities will cover a wide range of activities including research and development leading to new genetic/genomic evaluation services from CDN as well as contributing to the continued effort in terms of extension and communication to industry personnel and Canadian producers.
  • The Board of Directors received a presentation to demonstrate the new software being jointly developed between CDN and Holstein Canada. Named Compass, this web-based genetics decision tool will be freely available to Canadian dairy producers of all breeds with an expected launch in the fall. The Board also reviewed and discussed the suggested themes and presentation topics for the 2018 Dairy Cattle Improvement Industry Forum, which will be held at the Château Vaudreuil Hotel & Suites, Vaudreuil, Quebec on Wednesday, September 19, 2018. The 23rd Annual General Meeting of CDN will take place the following morning on September 20th.
  • As usual at the start of each year, CDN circulated the call for nominations for the 2018 Dairy Cattle Improvement Industry Distinction Award. All industry organizations are encouraged to identify quality candidates and submit the nomination form in advance of the May 31, 2018 deadline for consideration by the CDN Board of Directors.
  • The next CDN Board of Directors meeting will be held in Quebec City on Thursday, July 19, 2018.

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

Canadian farmers deny U.S. dumping allegations on dairy

Low milk prices in the United States are due to overproduction, not a lack of access to Canada’s dairy market, says Dairy Farmers of Canada

Canada exports some skim milk powder, but it’s not dumping, says Thérèse Beaulieu, the Dairy Farmers of Canada’s assistant director for policy communications.

“We can export as long as it is the same price as the domestic market,” Beaulieu said in an interview April 13 in response to American allegations that Canada dumps surplus skim milk powder on world markets, depressing prices.

‘Dumping’ is defined as selling products in a foreign market for a price lower than received in one’s domestic market. It’s illegal under World Trade Organization rules.

“They (American dairy farmers) believe that Canada’s supply management program has not only prevented access for their products going up there, but it’s also resulted in surpluses of products that are then dumped onto world markets,” United States Deputy Agriculture Secretary Stephen Censky told reporters attending the North American Agricultural Journalists’ annual meeting here April 9.

Minnesota Congressman Collin Peterson also accused Canada of dumping, but added “they are allowed to do it.”

Canada’s supply management system, which also applies to eggs and poultry production, has been on the United States’ hit list for years.

Last year President Donald Trump blamed Canada’s supply management system for shutting down U.S. exports of ultrafiltered milk and vowed to restore U.S. exports through a renegotiated NAFTA deal.

Canada has a high tariff on imported ultrafiltered. The Americans got around it by exporting diafiltered (filtered twice) milk to Canada.

Canada reacted by matching American prices for the same product, Beaulieu said.

Diafiltered milk is a milk protein increasingly used as a food ingredient.

Their own fault

U.S. dairy farmers are suffering from low prices, and have been for several years, but it’s not Canada’s fault, she said.

“The problem the U.S. is having is because of overproduction,” Beaulieu said.

“Canada, with 35 million people, is a 10th of its size. If they flooded our whole market it’s 10 per cent of their production, so we’re not a solution for them.

“We import more (dairy products) from them than they import from us. The trade balance is in their favour.”

Under supply management, farmers control domestic supply through production quotas and restrict imports with high tariffs to keep supply in line with demand.

Critics say the system costs consumers more than in an open market and limits farmers’ and processors’ export opportunities.

But Canadian dairy prices are similar, and in some cases much lower than in the U.K., Australia, New Zealand and the European Union, according to a study prepared by Export Action Global.

“Virtually all of these jurisdictions swapped regulation for new and larger subsidies,” the report says. “Consumers pay for their products once at the retail level and again through their tax dollars.”

Most farmers participating in supply management like it because revenues are predictable and steady.

Although Peterson condemned supply management, he seemed envious of it too.

“Probably the wealthiest people in Canada are the ones who own (dairy) quota,” he said.

When told he could buy quota, Peterson replied: “Yeah, I know, but I don’t want to pay for it. Then it’s not such a good deal, but if they give it to me I figure I make $300,000, $400,000 net (a year).”

Beaulieu said that sounds high. Net revenues vary among farms, she added.

However, Peterson’s estimate that the quota for a 100-cow dairy farm costs $2 million “is in the ballpark,” Beaulieu said.

In Quebec quota costs around $24,000 per kilogram of milk produced per day, she said.

According to Beaulieu, Canadian dairy farmers, on average, are more efficient than their American counterparts.

Canadian dairy farmers aren’t much interested in exporting because international markets are often depressed, she said.

“We are exporting a small amount of fine cheese to New York and Florida,” Beaulieu said. “If you go to Disney you find some Canadian cheese there. We do have some niche market opportunities.

“We don’t see it as a big opportunity when it’s a dumping ground.”

U.S. system

While the U.S. condemns supply management, it restricts access to its dairy market and also subsidizes it.

“We may have 300 per cent tariffs (on butter in Canada), but they (U.S.) have equivalent protective trade measures that… have the same effect,” Agri-Food Economic Systems agricultural economist Al Mussell said in a recent interview with Glacier FarmMedia. “It is very hard to export to the U.S., I would argue it’s almost equivalent (to Canada).”

Meanwhile, the U.S. government recently added another $1 billion to its Margin Protection Program to help bolster dairy farmers’ returns.

The U.S. government also buys surplus milk to donate to food banks.

Not all Wisconsin dairy farmers blame Canada for their woes.

A year ago Shane Sauer, who farms east of Madison, told CBC he and other farmers were producing more milk because processors said there was a demand for it.

“We don’t blame you (Canada),” Sauer told CBC at the time. “We just want solutions.”

According to CBC, Wisconsin alone has more dairy cows than all of Canada.

VegNews, which promotes veganism, claims Americans are shifting from milk to plant-based alternatives and the dairy industry hasn’t adjusted.

“In the first eight months of 2016, dairy farmers nationwide purged 43 million gallons of excess milk into manure lagoons, fields, and animal feed — with the surplus hitting an all-time high of 78 million gallons last year,” according to a Feb. 13 VegNews story condemning the U.S government’s dairy aid.


Source: Manitoba Co-Operator

How Rural America Got Milked

Linda and Steve Meyer are owner-members of the Westby Cooperative Creamery in Westby, Wisconsin, a holdover from an era when co-ops helped independent farmers make a good living.

Should you ever find yourself crossing the Coon Prairie, you’ll come in good time to a place where the speed limit slows and a wooden sign reads “Velkommen til Westby.” Affixed below are insignias from the Jaycees, the Kiwanis Club, and other local fraternity groups, and a plaque reading “ ’78 ’85 ’86 State Football Champs.” Founded by Norwegian settlers in the nineteenth century, today Westby, Wisconsin, is a hamlet of 2,200, populated mostly by their descendants.

Unlike most farm towns across middle America, Westby is holding its own. South Main Street is graced by the Treasures on Main antique shop, Dregne’s Scandinavian Gifts, and Borgen’s Café, where a hanging sign promises “Good Food” to passersby. There’s also the handsome but unpretentious Bekkum Memorial Library, dedicated in 1986 with more than 16,000 books. Few, if any, rich people live here, but poor people are rare, too. Thanks in part to Westby’s strong support for its public schools, 90 percent of the adult population has graduated from high school and more than one in five has a bachelor’s degree or higher, roughly in line with national averages.

If you stay a spell in Westby, you’re likely to notice another of its distinguishing features. Most of the major businesses in town are cooperatives, meaning they’re owned by the same people who use their services. The local phone, cable, and Internet service provider is a co-op dating back to 1950, when local farmers, tired of waiting for distant monopolies to run wires to their homesteads, got together and formed their own telephone company. Similarly, the local electrical utility is a co-op formed in 1938 to bring electricity to the countryside when the power companies didn’t see enough profit in it. The Vernon Electric Cooperative, part of the region’s larger Dairyland Power Cooperative system, is still going strong as it expands into solar and continues to write checks to its 10,000 local owner-users for their share of its surplus revenues. Meanwhile, the Westby Co-op Credit Union offers Westby residents the chance to be their own bankers, and an old-line farmers’ co-op, now called Accelerated Genetics, offers cattle-breeding services to its members.

And then there’s Westby’s most storied cooperative business, the Westby Cooperative Creamery. It dates back to 1903, when dairy farmers in the surrounding area each pitched in $10 to form a co-op that would provide a stable and competitive market for their milk. Today, around 220 local dairy farm families share ownership of the co-op, many of them third-, fourth-, or even fifth-generation “patrons,” as they’re known locally.

Across rural America, the powerful co-operative movement has either faded or, worse, become co-opted by giant monopolies that prey off the very small-scale producers they’re supposed to protect.

Every day, a dozen gleaming silver tank trucks transport both conventional and organic milk from these local family farms to a brick creamery roughly the size of a small supermarket on Main Street. The creamery employs about 130 people and generates $50 million in revenue for the local economy, turning out products ranging from cottage cheese and yogurt to sour cream and French onion dip. You can buy Westby-brand milk products at the small store on the premises or at selected outlets throughout the region, from the Piggly Wiggly in Beaver Dam, Wisconsin, to the Hy-Vee in Owatonna, Minnesota. They’re also now available online.

Darin Von Ruden, an organic dairy farmer and the president of the Wisconsin Farmers Union, says he joined the co-op in 1991 because “it’s still a true cooperative.” He’s pleased that it’s not controlled by highly paid executives who live somewhere else, but by active local farmers like him who “[milk] cows morning and night.” As a part owner of the co-op, he is not only paid for his raw milk, but also shares in the revenue the creamery earns from selling milk and milk products to food processors, retailers, and the public.

All in all, Westby is a corner of rural America that’s still modestly prosperous. And while its legacy of locally controlled cooperative businesses isn’t the only reason, it’s a big part of the story. Local farmers are not totally at the mercy of giant agribusinesses when they bring their products to market. Their ownership of the Westby creamery allows them to cut out middlemen and bargain collectively with food processors and retailers to get a fair price. The rest of the town benefits as well from the creamery and the other locally owned co-ops, as money and power that would otherwise flow to the absentee owners and managers of distant corporations instead stay within the community.

But Westby is the exception, not the rule. It’s a holdout from an earlier era when co-ops helped farmers and rural communities keep a much larger share of the nation’s wealth than they do today. Most everywhere else across rural America, the powerful cooperative movement has either faded or, worse, become co-opted by giant monopolies that prey off the very small-scale producers they’re supposed to protect. In that way, they reflect a broader change in the economy. While pretending to represent farmers’ interests, these co-ops in fact dictate prices to farmers just as Amazon dictates prices to book publishers and Walmart to its suppliers.

The depressed state of rural America is getting a fresh look as a result of the 2016 election, and rightly so. People are asking how to bring back rural prosperity and restore small-town civic life. A good first step would be to recreate the successes of places like Westby. That starts by asking why co-ops aren’t doing the same thing elsewhere.

For Vince Neville, it was trucking. The independent New York State dairyman, who passed away last year, complained that Dairy Farmers of America used its control over local milk haulers to prevent him from doing business with anyone else. For Garrett Sitts, it was the abuse of food safety protocols. He charges that milk inspectors controlled by DFA threatened him and many other farmers with health care violations if they dared to raise questions about DFA’s business practices. For Jonathan Haar, it was a failed attempt to escape DFA’s grip. After nearly ten years with DFA, he tried to leave for another co-op, Agri-Mark. But after promising negotiations, Agri-Mark suddenly went silent. Haar says he was told that Agri-Mark and DFA had an unwritten agreement not to work with each other’s farmers.

Over the last several years, dairy farmers like Haar, Neville, and Sitts have banded together with thousands of others to sue DFA, the largest milk processor in the country and possibly the world. They charge that DFA conspires with other large agribusinesses to drive down the prices they receive for their milk. And they say DFA retaliates against any farmers who complain or try to escape its clutches.

In a statement, DFA senior vice president Monica Massey said, “These allegations are ridiculous. Indeed, a small sliver of farms have brought litigation. There are no facts to back up the claims.”

The odd thing is that the farmers who are suing DFA also own it. At least on paper, DFA is a co-op. Just like the Westby Cooperative Creamery, it’s supposed to work on behalf of its member farmers. But DFA certainly doesn’t look or behave like Westby.

In 2006, DFA got rid of its private jet after it became too controversial, but today its executives are still doing quite well for themselves. In 2017, they moved into a spanking-new $30 million world headquarters in Kansas City that they had built to their own specifications. The sprawling, glass-enclosed, 110,000-square-foot building, designed by the global architect firm HOK, has amenities like bocce and basketball courts, a gym, family rooms, and a milk bar “where employees can help themselves to a variety of milk flavors all day long,” in the words of the building’s designer.

Artistic features pay homage to DFA’s origins and continuing formal status as a dairy co-op. As you enter the lobby, you’re greeted by a glossy, white, 25-foot-high, floor-to-ceiling molded sculpture meant to evoke a cascading, seamless flow of milk. Other flourishes include faux barn boards and walls decorated with molded white patterns depicting old-fashioned milk bottle caps, cow tags, cheese graters, and ice cream scoops. Acquiring and installing these objets d’art cost $1.5 million.

When the facility opened in June, president and CEO Rick Smith praised its appropriation of old-time dairy imagery, telling a trade publication, “This building is a testament to our family farmers and the sustainable practices they employ on their dairies each and every day.” Other executives spoke of how the new headquarters made DFA such a cushy place to work. Monica Massey, senior vice president and chief of staff, told the same publication, “Our goal is to be an employer of choice in Kansas City and this building and all its amenities reflects that commitment to focus on employee satisfaction.”

Yet if DFA’s management is pleased with its new digs, many of its putative owners are not. The distance DFA has traveled from a traditional dairy co-op is breathtaking. The co-op reported a net income of nearly $132 million in 2016; meanwhile, the number of dairy farmers in the U.S. continued to plummet, hitting a new low of 58,000. Historically, the role of a dairy co-op was to engage in collective bargaining with the typically much larger corporations that process and market milk and milk products. This was, and remains, crucial to farmers’ receiving a fair price, because of what economists call monopsony power.

Monopsony occurs in markets where many sellers compete for the business of a few big buyers. In such markets, sellers have to accept the terms and prices the buyers dictate. This has always been a particular problem for individual dairy farmers because there are always more of them than there are food processors and potential buyers of their raw milk. Making matters worse, milk is a highly perishable product. Unlike with grain, farmers can’t store it in silos waiting for the right price.

In days of old, the co-op was the answer to the dairyman’s monopsony problem. Co-ops typically negotiated on behalf of their member farmers with food processors like Borden or Carnation Evaporated Milk and with retailers that sold dairy products under their own private labels. Co-ops also helped farmers negotiate better rates from the trucking firms they depend on to get their milk to market on time. In some cases, such as in Westby, dairy co-ops also became involved in processing and marketing their own milk products. Perhaps the best-known example of this is Land O’Lakes, which started out as the Minnesota Cooperative Creamery Association in 1921.

This system never worked perfectly. During periods of overproduction and slack demand, dairy farmers’ income has depended on federal government “marketing orders” that maintain the minimum prices they can be paid for raw milk. But throughout most of the twentieth century, co-ops helped to maintain reasonable competition within the dairy industry by making sure that large agribusinesses didn’t abuse their monopsony power in negotiations with farmers.

Today, however, DFA has upset that balance by joining forces with the parties on the other side of the negotiating table. The organization says it represents more than 13,000 member farmers in forty-eight states. But it simultaneously has grown to the point that it owns or controls entities up and down the entire dairy industry supply chain, from milk truckers to food processors to marketers. It’s an obvious conflict of interest: the less these entities have to pay DFA farmers for their milk, the more money they—and DFA—make. According to its 2016 financial statement, 60 percent of DFA’s net income that year came from “non-member business earnings,” none of which was shared with members.

Dairy farmer Garrett Sitts charges that milk inspectors controlled by his own co-op, Dairy Farmers of America, threatened him and many other farmers with health care violations if they dared to raise questions about DFA’s business practices.

DFA claims that controlling the supply chain helps protect farmers. “Cooperatives of any reasonable size, in the U.S. and around the world, own manufacturing and trucking assets,” Massey said.

In all, DFA controls about 30 percent of all milk sales nationally and a far higher share in many regions. That means that many, if not most, dairy farmers don’t have a way to even get their milk off their farms without accepting the terms imposed by DFA. “You can’t look at DFA as anything now but a corporation,” says Nate Wilson, a longtime journalist for the Milkweed, a publication that covers the dairy industry. “The management of DFA is consistently working against the rank-and-file members.”

To all appearances, Gary Hanman was a man of the people. Often seen in worn overalls, muddy boots, or bright red suspenders, the Missouri native had a down-home appeal that charmed the many dairy farmers he worked with. His affability helped him climb the ladder in the dairy cooperatives where he made his name. As the head of Mid-America Dairymen, he grew the cooperative through nearly fifty mergers. Then, in 1998, he spearheaded the biggest merger in dairy cooperative history, uniting Mid-America and three others to form Dairy Farmers of America.

From there, Hanman went on to expand DFA’s vertical control over milk production and distribution. For example, he and DFA worked to engineer mergers giving the food processor Dean Foods a dominant market share of milk sales in many regional markets—and then forged deals with Dean making DFA its sole supplier. Meanwhile, through its marketing arm, Dairy Marketing Services, DFA’s dominion extended to milk testing and hauling from farm to market in many parts of the country.

All this was done, Hanman said, in order to help the little guy, the local dairy farmer, to better bargain with giant food processors and retailers, who were themselves merging at a frenzied pace. The story Hanman told dairy farmers was that they had to let him consolidate their local co-ops into a vertically integrated Goliath in order to stand up to the even bigger agribusiness giants.

Dairy Farmers of America controls entities up and down the entire supply chain, from milk truckers to food processors to marketers. It’s an obvious conflict of interest: the less these entities have to pay DFA farmers for their milk, the more money they—and DFA—make.

But, over time, more and more farmers began to wonder who Hanman was actually working for. During his time at DFA, executives traveled on a private jet, called Delta Foxtrot Alpha. Hanman made $31 million during his seven years as CEO of the cooperative, while, as the New York Times has reported, other executives and DFA business partners also came away with multimillion-dollar side deals.

Hanman’s indulgences didn’t sit well with dairy farmers. Farmers’ margins narrowed each year he was at the helm of DFA, and many lost their farms. During the Clinton and George W. Bush administrations, some tried to interest the U.S. Department of Justice in prosecuting DFA for antitrust violations. But regulators made only a minimal effort to investigate anticompetitive practices in the dairy sector. In 2004, the Department of Justice began an investigation into the relationship between Dean and DFA, but it ground to a halt in 2006 for unexplained reasons. Peter Carstensen, a law professor at the University of Wisconsin at Madison and an expert on the dairy industry, says that the DOJ “is absolutely petrified of the dairy industry,” and “that’s the only explanation for their failure to enforce the antitrust law.”

In 2008, the Commodity Futures Trading Commission fined Hanman, who had retired in 2006, and another DFA executive $12 million for illegally manipulating the price of milk by purchasing block cheddar cheese on the Chicago Mercantile Exchange. Hanman’s successor, CEO Rick Smith, sold off the corporate jet and promised other reforms. But none of these efforts brought structural change to the role and power of DFA.

One reason DFA has gotten away with all this is, perversely, its legal status as a co-op.

Coming into the 1920s, the cooperative movement in the United States was flourishing, particularly in the agricultural sector. Not only was the cooperative that became Land O’Lakes taking off, so were co-ops like the American Cranberry Exchange, which handled 66 percent of the nation’s cranberries, and the California Associated Raisin Company, which shipped 86 percent of U.S. raisins. The promise of collective ownership became an appealing platform for political leaders in both parties, as it provided an all-American alternative to both monopoly capitalism and socialism. It was also especially popular among civil rights leaders. The scholar Jessica Gordon Nembhard wrote in her 2014 book Collective Courage that “almost all African American leaders were involved in Black co-ops in some manner.”

But as cooperatives grew in size and power, they also attracted powerful enemies. Large food processors charged that farmer co-ops were illegal cartels, and pressed regulators to prosecute them under the Sherman and Clayton Antitrust Acts. After decades of debate and unsettled law, two Republican members of Congress offered what they hoped would be a solution. They were Arthur Capper, who served as governor of Kansas from 1915 to 1919 and then as a senator from 1919 to 1949, and Andrew Volstead, a congressman from Minnesota who had recently become chair of the House Judiciary Committee.

The two men persuaded Congress and the Harding administration that as long as co-ops were comprised of genuine, small-scale producers, they should be largely exempt from antitrust prosecution. “Participation by farmers in the marketing of farm products through cooperative associations,” Capper argued, amounted to “giving them the right to bargain collectively with buyers.” This would result, he promised, “in stabilizing the market, preventing waste, and . . . [giving] the producer and the consumer their due.”

The Capper-Volstead Act of 1922 establishes an antitrust exemption for farmer co-ops, which has left room for intensive lobbying and litigation over just who is and is not a real farmer. In 1977, the Fifth Circuit Court of Appeals ruled that members of farmer co-ops had to be “ordinary, popular sense of the word ‘farmers,’ ” and not processors, packagers, or other supply chain actors. The court also asserted that at the time of its passage, Capper-Volstead was meant to protect the interests of “small, individually-owned farms.”

But in subsequent years, neither the courts nor Congress nor successive Democratic and Republican administrations have applied any real scrutiny to the question of whether entities operating as co-ops are really representing the little guy. The Capper-Volstead Act empowers the secretary of agriculture to take action against a co-op that engages in anticompetitive behaviors, but that power has never been used. Because of that, Dairy Farmers of America has been able to expand into all aspects of food processing, marketing, and distribution while still being protected as a co-op from antitrust prosecution.

Frustrated by the refusal or inability of government officials to constrain DFA’s power, thousands of DFA farmers have banded together to bring their own private class-action antitrust lawsuits, charging DFA with engaging in conspiracies to fix prices. The results have been mixed. One of these suits, brought by DFA members in the Southeast, ended when DFA agreed in 2013 to a settlement of $140 million. Another, brought by 8,900 members in the Northeast, led to a $50 million settlement, or about $4,000 per farmer. But it is being contested by some of the plaintiffs, who charged that DFA colluded with their attorney and strong-armed other farmers into signing the settlement. In the most recent development, a group of 115 DFA members won standing to pursue a separate suit against DFA. In refusing DFA’s motion to dismiss the case, the judge ruled that because the plaintiffs are clearly subject to DFA’s monopsony power, they “may plausibly allege anti-trust injury.” Just maybe they’ll get justice before they go broke.

What lessons can we take from this sad story? One, obviously, is that it’s high time for Congress to take a hard look at the laws governing co-ops. It needs to be made clear that no corporation gets the legal privileges of a co-op unless it truly represents the little guy without any conflicts of interests. While there is nothing wrong per se with co-ops becoming vertically integrated, the law should ensure that the money co-ops make on all their operations goes back directly to their members.

In a sense, we are all dairy farmers now. Employees, independent contractors, and small-scale producers of all kinds, including members of the creative class, find that corporate consolidation means fewer and fewer companies competing for their services. One answer may be to re-empower cooperative enterprise in every sector of our political economy.

Another lesson is that monopoly begets monopoly. Gary Hanman wasn’t wrong when he told farmers that the increasing concentration of ownership among agribusinesses meant that farmer co-ops had to grow bigger, too. But he didn’t tell them that as their traditional co-ops merged and consolidated into the Goliath that became DFA, they were creating a new oppressor. This dynamic is what Supreme Court Justice Louis Brandeis meant when he referred to “the curse of bigness.”

The final lesson is that we are all dairy farmers now. As more and more sectors of the economy become highly concentrated, more and more of us become victims of monopsony power. That’s true if you’re a nurse trying get a raise after the last two hospitals in town merge. It’s true if you’re a doctor trying to negotiate fees with the last remaining health insurer doing business in your county. It’s true if you’re a small manufacturer trying to get Walmart to stock your product. It’s true if you’re a small retailer who can’t reach customers except by agreeing to the fees and terms that Amazon sets. And it’s true if you work for a newspaper, magazine, or journal that has no choice but to take the prices Google or Facebook offer for internet ads.

Everywhere we turn, employees, independent contractors, and small-scale producers of all kinds, including members of the creative class, find that corporate consolidation leads to fewer and fewer companies competing for their services. Stronger antitrust enforcement is part of the answer. But so is finding new ways of re-empowering cooperative enterprise in every sector of our political economy.


Help America’s Dairy Farmers bring milk prices to the 21st Century

America’s farmers are the life line for all of us. Without farmers raising their crops and livestock, we wouldn’t have food on the table or in our bellies. What’s more disturbing is the lack of funding to help the farmers be able to make a living wage without going into debt and losing their farms to bigger conglomerate farms. You know something is seriously wrong with the farming industry when your creameries are sending out letters with suicide prevention resources with the farmer’s milk checks.

Milk prices today are at the same price they were back in 1978 and this hasn’t given farmers a fighting chance. Three years ago my parents at ages 61 and 57 had to make a decision that would change their lives forever. They chose to grow the family farm into 120 cows from 70 cows because they couldn’t afford to retire and they were still financially supporting my dad’s parents who are 92 and 86 years old and still live on the family farm. Building a new barn was the best thing in the world because it meant the herd they had in the old barn doubled their milk production just by moving them into a modern barn that promoted cow health. At the time of them considering & going through the building process the price of milk was at $22 per hundred weight. Since building 3 years ago there has been a steady drop in the price of milk. As of their last milk check posted this week the price is $14.20 per hundred weight, well below affordable price to make ends meet. As of 3 weeks ago my parents were denied funding to purchase seed corn or other supplies for this growing season which is setting them up to be foreclosed upon as early as this fall. Everyone says they can’t thank the farmer enough but when we see the price of $14.20 per hundred weight how can we feel thanked by Americans when the farmer cannot even afford to put ‘food on the table’ for our precious cows who give us the milk we sell. Milk processing plants have even gone as far as sending letters out in the milk check trying to help farmers deal with depression and anxiety because they know the farmer can’t afford to pay their bills on the milk check they are receiving.

Over the course of the last 10 years you, as ‘The Government’, have bailed out  the banking industry due to failing housing market prices and predatory lending, the auto market due to failing prices in the automobile market, and several other markets. If the government and people of the United States of America say they ‘cannot do it without the farmer’ then why is the price of a gallon of milk higher than ever in the store but yet ‘in the gutter’  for the farmer? Why is the housing, banking, auto, and other industries doing very well and the economy appears to be very strong but yet the farmer that creates your meals not able to put food on their own table due to low milk prices?

What we are asking of you is this. What can the government do to augment the price of milk in the very near future (i.e. in the next 30 days as emergency relief) to help our dairy farmers  of our great nation make it this growing season? We are looking to achieve $20 per hundred weight and create legislation to keep it no less than $20 so all farmers can continue doing what they love, farming!

 Please take this into serious consideration. The next 60 days with the price of milk will determine whether my parents will be able to keep the 120 year old family farm and share it with their grandchildren or will they be required to liquidate the farm and be left with nothing for not only their future, but Dad’s parents’ future. Please consider this an EMERGENCY and look to create an emergency fund to help ‘bail dairy farmers out’ of this horrible situation.

Click here to sign petition

USDA Re-Opens 2018 Enrollment for New Dairy Margin Protection Program

The National Milk Producers Federation (NMPF) today expressed thanks to Agriculture Secretary Sonny Perdue for his agency’s prompt implementation of changes in the dairy Margin Protection Program (MPP), and urged dairy producers to review the new coverage options available under the improved program, which will have a new enrollment window from April 9-June 1, 2018.

“We appreciate the steps taken by USDA to implement the new MPP provisions. It is important to provide information on the changes to dairy farmers so they can make informed decisions about enrollment in the program for this year, and we look forward to assisting the department in this effort,” said NMPF President and CEO Jim Mulhern.

The U.S. Department of Agriculture (USDA) announced today that it will re-open the sign-up period next week, and encouraged producers to take a second look at the program since it was revised under the Bipartisan Budget Act passed by Congress in February.

“NMPF worked with Congress during the past year to improve the dairy safety net to make it more effective for all farmers,” Mulhern said. “While the previous structure of the program offered an inadequate safety net, the changes made this year greatly enhance the value of the program to farmers, and we really want them to consider how to use this program in 2018. With these changes in place, we will continue to work with USDA and Congress to further strengthen the program in the 2018 Farm Bill.”According to USDA, dairy producers must select new coverage for 2018, even if they enrolled during the previous sign-up period last fall. Coverage choices made this spring for calendar year 2018 will be retroactive to Jan. 1, 2018. All dairy operations desiring coverage must sign up during the eight-week enrollment period. USDA also announced that dairy producers can participate in either MPP or the Livestock Gross Margin program for dairy (LGM-Dairy), but not both.

The changes to the MPP were part of a larger dairy package that was included in the disaster spending bill passed by Congress two months ago. The provisions include:

  • Adjusting the first tier of covered production to include every dairy farmer’s first five million pounds of annual milk production history (about 217 cows) instead of four million pounds
  • Reducing the premium rates, effective immediately, for every producer’s first five million pounds of production history, to better enable dairy farmers to afford the higher levels of coverage;
  • Modifying the margin calculation to a monthly (from bi-monthly) basis;
  • Raising the catastrophic coverage level from $4.00 to $5.00 for the first tier of covered production for all dairy farmers; and
  • Waiving the annual $100 administrative fees for underserved farmers.

The disaster package also lifted the $20 million annual cap on all livestock insurance, including the Livestock Gross Margin (LGM) program. This will allow USDA to develop a wider variety of additional risk management tools.

To the right is the updated premium chart following the MPP changes.

USDA’s web tool allows dairy farmers to quickly and easily combine unique operation data and other variables to calculate their coverage needs based on price projections. NMPF’s Future for Dairy website also offers informative resources and tools to help farmers determine the best insurance options for their operations.


Source: NMPF

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