Archive for Dairy Industry – Page 2

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

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




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

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

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

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

Mr Trace says farmers are devastated by the outcome.

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

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

Neither accepted our offer.

Coles provided this statement:

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

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

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

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


Top 20 Milk Processors collect 25% of milk worldwide

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

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

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

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

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

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

Source: IFCN

Fonterra director election system diluting farmer influence

Canterbury dariry farmer John Nicholls.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


Michigan lost 143 dairy farms in the past year

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

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

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

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

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

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


Saputo raises farmgate milk price

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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


Wackershauser promoted to Executive Director of the Wisconsin Holstein Association

The Wisconsin Holstein Association (WHA) is pleased to announce that Laura Wackershauser, formally Editor of the Wisconsin Holstein News, has been promoted to Executive Director.

As Executive Director, Wackershauser will lead the Wisconsin Holstein Association staff, manage the association financials, assist in event planning and lead strategic vision for the association. Wackershauser will continue to oversee publication of the Wisconsin Holstein News.

Wackershauser has extensive experience in the day-to-day operations of WHA and overall goals of the association during her 17 years employed by the association. As the Editor of the Wisconsin Holstein News, she was responsible for full production of the magazine including advertisement sales and design, magazine layout and production scheduling. In that role, she also served as lead editor for the Midwest Holsteins publications.

In addition to her editor position, Wackershauser has also been WHA’s resident photographer, capturing images from events and shows. She played a large role this summer coordinating efforts for district shows and managing the office.

“I’m excited to continue serving the members of the Wisconsin Holstein Association and look forward to working with the team to position WHA for success,” Wackershauser said.

Wackershauser is a graduate of UW-Platteville with a degree in Agricultural Business and Animal Science with a dairy emphasis. She grew up on a Registered Holstein farm near Lancaster, Wack-E-View Holsteins, and still owns a handful of cows and heifers that are now housed by other farmers.

“Wisconsin Holstein has been fortunate to have had Laura doing great work for its members for many years. She continues to push herself and has proven more than capable to take on a new challenge as the Executive Director,” said Craig Carncross, president of WHA. “Laura comes into her new role with many great ideas and strong sense of what needs to be done to lead WHA into the future.”


Pennsylvania announces $5M for dairy farmers

Pennsylvania has made $5 million available to help dairy farmers.

The funding was made available under the Pennsylvania Dairy Investment Program, which helps farmers to modernize or expand their operations.

Milk sales have dropped in recent years, partly because more people are buying soy, almond, and other non-dairy substitutes.

Agriculture Secretary Russell Redding said the grants will help dairy producers diversify their businesses and strengthen operations to keep up with the increasingly competitive market.


Source: ABC27

PepsiCo announces Russian dairy plant investments

PepsiCo has announced the completion of new investment projects at its Rubtsovsk dairy plant in Russia. The global food and beverage giant’s Russian subsidiary has finished work on a whey processing section and treatment facilities.

A high-tech ultrafiltration unit has been installed in the whey processing section. It will allow the processing of serum, obtained during the manufacture of cheese, in a concentrate of whey proteins. The production capacity of the new equipment will be ten tons of dry whey protein concentrate per day.

Neil Starrock, the president of PepsiCo’s business in Russia, said: “The development of whey processing is an important technological solution that will contribute to the expansion of waste-free production in the enterprise.

“It will allow [us] to increase the life cycle of dairy raw materials and will make it possible to use products obtained as a result of processing whey for the production of new products both inside the company and in other food industries.

“The resulting whey protein concentrate can be used for the production of modern dairy and functional products – yogurt, sports nutrition and others.”

The treatment facilities will reduce the “environmental burden of the enterprise on the sewerage network of the city of Rubtsovsk” and thereby improve the quality of life of citizens, Starrock said.

The Rubtsovsk dairy plant has produced Lambert brand cheese for the last 15 years.


Australian dairy farmers betrayed by Coles

Milk suppliers to Norco are feeling betrayed by Coles’ introduction of a drought levy on three litre milk.

30 cents from the sale of each of the supermarket’s Own Branded milk will go towards the National Farmers Federation’s drought appeal.

The Woolworths initiative will see the money go directly to Parmalat, that’ll be passed directly to farmers.

Rural reporter Eddie Summerfield caught up with Queensland dairy farmer Peter Garrett, and United Dairy Farmers of Victoria President Adam Jenkins.

Download this podcast here

Milk fat now worth more to farmers than protein

In what is the most significant change to global dairy trade in the past 20 years, milk fat will earn dairy farmers more than protein in the 2018-19 season.

DairyNZ strategy and investment leader Dr Bruce Thorrold said fat had been a low value milk component but had seen a steady rise in recent seasons due to consumer-driven market value.

”That’s a welcome change for New Zealand dairy farmers who are set to receive a strong 2018-19 milk price, buoyed by the value of milk fat.”

Milk price and the relative value of fat and protein are the biggest factors in the breeding worth (BW) of dairy cattle.

The changes in fat price have produced large shifts in BW both between and within breeds.

Of the top 200 bulls by BW in 2019 (BW2019), 70% are Jersey, 5% Holstein-Friesian and 25% Cross-Bred (Jersey and Holstein-Friesian), Dr Thorrold said.

On average, Jersey bulls are increasing by $23 BW while Holstein-Friesian decrease by $28 BW. Cross-bred and Ayrshire bulls are relatively unchanged (-$4 and -$3 BW).

Within breeds, individual bulls will shift up or down by as much as $40 BW relative to their breed’s average shift.

New Zealand Animal Evaluation (NZAEL), a wholly owned subsidiary of DairyNZ, administers a BW index, which is used to rank cows and bulls according to their ability to meet the national breeding objective of breeding dairy cows that will be the most efficient converters of feed into profit for farmers.

NZAEL has recently finalised the economic factors that will be used to calculate BW from February 2019.

Dr Thorrold said due to a sizeable shift in fat and protein value, BW2019 is being published early for all sires enrolled with NZAEL, this will give farmers insights into which bulls can add the most value to their breeding programme in a market where fat is a high value component.

The economic values for fat and protein are calculated by partitioning the milk solids price into a value for fat and protein, and then accounting for the cost of producing each component.

The value of fat relative to protein has been increasing for the past three seasons and this trend is forecast to continue.

New Zealand is uniquely positioned to take full advantage of strong demand for fat-based milk products due to the strong influence of Jersey genes in the national herd.

Dr Thorrold said the shift in consumer demand for fat and the consequent change in BW are big changes for dairy farmers.

” If current fat prices are maintained, then the shift in favour of high fat bulls will continue next year.”


Source: Otago Daily Times

Sixth-generation Australian farmer leaves industry because of ongoing stress from dairy crisis

Brad Missen is leaving his Gippsland farm after 23 years as a dairy farmer. (ABC Rural: Isabella Pittaway)

A Victorian dairy farmer whose family has been farming in Gippsland for 164 years has walked away from his Denison farm because of ongoing stress from the dairy crisis, which led to his late diagnosis of Tourette Syndrome.

Sixth-generation dairy farmer Brad Missen was calm but concerned as he said goodbye to his 300-head herd before they were sold at auction.

Tourette Syndrome

  • A person with Tourette syndrome will have physical and vocal tics lasting more than a year
  • It is a neurological disorder with symptoms that are made worse by stress
  • Treatment includes medication and behavioural therapy
  • Tourette’s does not have serious complications, but it may be accompanied by other conditions, such as ADHD, and these can cause learning difficulties.


“It’s a sad day to see them go. They’ve been part of our family for so long but it’s time to move on,” Mr Missen said.

“I think I’ve done my grieving a few weeks ago, so today hasn’t been as bad as I thought it would have been.

“It’s a major thing to do but I think it’s been done at the right time.”

End of an era for family

As he walks through the saleyard it is clear Mr Missen knows these cows well — after all, he and his family have been looking after them for decades.

His grandfather started the herd in 1951 and Mr Missen said the family had formed close bonds with the animals.

“People don’t realise how diverse their temperaments and personalities are.

“We’ve hand-reared some through droughts, hand-fed all the way through until they’re 12 months old.

“You’re well aware of who they are, what they do and what they’re like.”

Stress creates health risks

When Murray Goulburn and Fonterra retrospectively cut milk prices in 2016, many farmer suppliers were left hundreds of thousands of dollars in debt and the industry was plunged into crisis.


Since then, many farmers have exited the industry or cut back their operations.

For Mr Missen, the stress of the past two years has had a significant effect on his health.

“When the crisis hit it was pretty stressful for quite a few weeks, and at this point that’s probably the most stressed I’ve ever been,” he said.

“We just sat down as a family and we sort of said we’ll ride this one out and reassess in a couple of years.

“We thought we would have got through it without too much trouble, but we just didn’t recover as well as we thought.”

Tourette Syndrome diagnosis

Shortly after the dairy crisis, a visit to the doctor led to Mr Missen being diagnosed with Tourette Syndrome.

“It was probably the stress at that point that brought the symptoms on much stronger,” he said.

“It changes the way I’ve got to do things; I can’t really write anymore and I can’t type really quickly because I just keep pressing the wrong buttons all the time.

“Hopefully once the stress is gone I might get back to where I was.”

Mr Missen said the diagnosis explained much of the behaviour he had been experiencing.

“There’s a lot of issues with that I do tend to swear at people and myself a lot and click my tongue and stuff,” Mr Missen said.

“I actually recently found out that leaves you a bit more susceptible for stress

“Maybe that’s why I’ve felt it more than others.”

Mr Missen said the diagnosis was the catalyst for change, and it had forced him to make a significant change and step away from the farm.

Leaving the farm part of a wider trend

Earlier this year a report from Dairy Australia showed one in five farmers reported they were making plans to leave the industry.

Mr Missen said he was normally an optimistic person, but he was concerned about the future of Australia’s dairy industry.

“I think the potential’s still there to have a vibrant industry, but we’ve got to do a better job of looking after the families in it,” he said.

“A lot of business people don’t realise that a farm is not just a farm and a business, it’s a farm and a business and a family, for family-owned farms.

“If the family’s not doing well, the farm’s not doing well. We need to do a better job of supporting farming families.”


Desperate dairy farmers use GoFundMe to save way of life

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. Wochit

Hurting but proud, Theresa Depies never imagined starting a GoFundMe campaign to help save her dairy farm.

Yet hundreds of donations later, and blended with other help, she had raised $165,510 to keep Springbrook Organic Dairy from closing less than a week before a foreclosure auction.

“We were getting very scared because people were already coming to look at the farm ahead of the auction. That made it very real. That freaked us out,” Depies said.

Springbrook, in Washburn County, is one of thousands of farms nationwide that have used GoFundMe to raise money to stay in business or to get through a crisis.

On its website, GoFundMe boasts that it has raised billions of dollars for charitable causes since 2010. Through the service, people can donate directly to individuals in need, like victims of Hurricane Florence.

There are now more than 2,500 U.S. dairy farms on the website, with some farmers urgently appealing for help after their finances were ruined by three years of low milk prices.

“I have never asked for a handout, but I can’t keep borrowing money to pay for things,” one Wisconsin farmer wrote. “Thank you from the bottom of my heart for even considering helping us continue our journey.”

Springbrook was hit by a confluence of events, including a multi-year drought that wiped out its grazing pasture and added $200,000 in hay costs.

Struck with Lyme disease that was undiagnosed for years, Theresa Depies’ husband, Jeff Depies, was barely able to work.

“When you’re a farmer, your self-worth is based on how much you can get done in a day. When you can’t do anything for months, and that turns into years, it’s ugly,” Theresa Depies said.

She spent months putting together a GoFundMe campaign, beginning last year, telling the farm’s story in words, pictures and a video.

It worked. Donations poured in as people learned of the farm’s plight. Much of the money was raised locally, but some of it came from out-of-state and even overseas.

“I was surprised at the generosity of people. And I was surprised at the people who did not support us,” Depies said.

The campaign didn’t offer any perks, like a T-shirt or a hat for pitching in a few bucks.

“There were no ‘name-a-calf rights,’ nothing like that,” Depies said.

But the farm has a cheese and yogurt plant supplying local grocery stores, and that helped because customers at least knew and trusted the Springbrook name. 

The campaign, along with other donations and personal loans, generated enough cash to reach a $169,510 settlement on about $340,000 in federal Farm Service Agency debt.

Still, it left Depies feeling down. She never imagined turning to GoFundMe donors to keep from losing the farm. 

“I felt a huge sadness after the campaign. I felt shame,” she said.

And yet, saddled with low milk prices, debt and high operating costs, thousands of dairy farms have folded. Wisconsin lost 500 in 2017 alone, according to state records, and about 430 closed in the first eight months of this year. 

As farms struggle for survival, Depies said, they ought to consider crowdfunding for things such as establishing a cheese plant to generate more income, or growing produce for local grocery stores and individual consumers. 

Reach out to people and let them be part of your business plan, she suggested. 

“I will never go to a lender again,” Depies said, though she doesn’t blame the USDA Farm Service Agency for her trouble. 

Like ‘It’s A Wonderful Life’

Such efforts are not a panacea.

Many farms that launch GoFundMe campaigns raise only a few thousand dollars, or in some cases, nothing. 

But in Door County, Dale and Karen Cihlar have generated $92,000 from a campaign aimed at saving their 145-year-old dairy farm that milks about 30 cows. 

Their financial trouble began after they took out a loan to put in a manure storage system.

Milk prices crashed and they struggled to make loan payments and cover their bills. 


Mired in debt, the Cihlars could have filed for bankruptcy. But it would have spelled the end of their dairy farm, which has been in the family for four generations. 

“We weren’t ready to walk away,” Karen Cihlar said.

Their GoFundMe campaign was aimed at raising $35,000, but they got $40,000 in a matter of hours as donations poured in from Wisconsin, Michigan, Kansas, Nebraska, Florida, Washington, Hawaii and other states.

“It was like the movie, ‘It’s a Wonderful Life,’ where at the end all of the people come and give money,” Dale Cihlar said.

“It has restored our faith in mankind. There were two or three negative reactions, but everything else was positive,” Karen Cihlar said.

They’ve kept the campaign going even as they’ve eclipsed their goal.

“We’ve paid off all our high-interest loans and credit cards. We just have our mortgages left,” Dale Cihlar said.

If milk prices don’t fall any further, they say, the farm should survive.

The Cihlars even decided to pay it forward for a similar cause. They made a $250 donation to a GoFundMe campaign for a Fond du Lac County dairy farm that was nearly destroyed by a tornado last month.

Six buildings, including a large cattle barn, were destroyed in the Aug. 28 tornado that slammed Pebble Knolls Dairy east of state Highway 49.

While family members and employees escaped injury, five cows in the 650-cow herd died of injuries from flying debris, and another 24 were shipped to slaughter because of injuries suffered from the sharp edges of twisted sheet metal.

The remainder of the displaced herd was trucked to nine other farms, where the cows will stay until Pebble Knolls is back in operation.

“We are moving forward, slowly,” said farm owner Richard Wetzel. 

A neighbor, Melissa Daane, said her children urged her to establish a GoFundMe campaign for the Wetzel farm, which is run by several generations of the Wetzel family. 

“The farm is a huge part of the family’s life, and I can’t imagine what they must be going through,” she told the Wisconsin State Farmer newspaper.

‘It’s your identity’

Some GoFundMe farm campaigns stem from even worse events.

In April, one was launched for a Barron County family who lost a father and a son in a farm accident.

Dan Briel and his 14-year-old son, David, died after being trapped in a grain silo March 24. Another son, Caleb, managed to escape from the grain bin and called for help.

The GoFundMe campaign was established to help cover funeral expenses and other costs. In 12 days it raised $102,280 from 1,423 donors.

A private donor covered GoFundMe’s processing fee so that 100 percent of the donations went to the Briel family.

For some farms, heavily in debt and unable to cover expenses, donations may only be a temporary solution if their business plan isn’t sustainable. 

“GoFundMe is not going to save them,” said Carrie Mess, a dairy farmer from Watertown.

Yet sometimes farmers need a helping hand to get through a crisis, and Mess said she’s donated to GoFundMe campaigns for that purpose. 

“I really can’t think of anything that’s more all-consuming than farming. It’s your identity,” she said. 

GoFundMe has had scams.

Some people have embellished their own sad narratives, or they’ve invented one from whole cloth.

Yet the dairy farming crisis is very real across the country, not just in Wisconsin. 

In Postville, Iowa, Donna Eberling can attest to that. She’s been trying to raise $10,000 in a GoFundMe campaign aimed at helping save her farm. 

“We are doing everything we can to cut costs and make ends meet,” she said.

“Our electricity is on the verge of being disconnected every month because the money just isn’t there. We are mentally tired from the stress of trying to make everything work. We are physically tired from working too many jobs to try to keep afloat. … We are tired of the struggle, but we’re too stubborn to give up.”


Slowdown in World Milk Supply Growth

Global supplies of milk continue to outpace last year, although growth has slowed in recent months. July saw the smallest year on year increase in milk deliveries since the start of the year, with total volumes up 1.0% compared to 2.7% qrowth at the beginning of the year and 1.5% in the previous month.

The main change in recent months has been lower production growth in both the EU and the US. In the EU, deliveries have been impacted by the hot dry summer, while US production has been impacted by low prices, leading farmers to sell off cows.

Supplies from the southern hemisphere nations of Argentina and New Zealand remain up on last year, while Australia’s production has been impacted by drought conditions, leaving them down on last year by about 1m litres per day (-4.2%).

World Milk Supplies Jul 18


Source: AHDB Dairy

Finnish dairy giants settle “milk war”

The biggest dairy firms in Finland have settled a long-running dispute over unfair competition, but they are keeping mum over the details.

Arla and Valio, the two companies that dominate Finland’s milk market, have settled a dispute over price dumping.

The case started in 2014 when Arla filed suit demanding compensation for Valio selling milk on the wholesale market at below the cost of production.

The row had been ruled on by the Market Court and the highest administrative court in the land, with compensation of 70 million euros due to be paid to Arla.

The courts took the view that Valio, which is a co-operative owned by producers and collects some 80 percent of Finland’s raw milk from farms, had underpriced its milk in an effort to force out Denmark-headquartered Arla from the Finnish market.

Arla and Valio announced on Thursday that they have reached an agreement on the compensation but will not publish details of the deal.


Source: YLE

New Record Per Cow as US Milk Production Continues to Climb

According to USDA, August milk production continued to climb, up 1.4 per cent on the year. Production per cow in the top 23 dairy states was set at 1,974 pounds during August, the highest for the month since reporting began in 2003 and a continues last month’s record setting pace. Milk production in the U.S. totaled 18.3 billion pounds for the month. The national herd size declined by 4,000 from last year to 9.4 million head but was up by 5,000 from last month. Colorado had the highest per-cow production average at 2,245 pounds and Michigan was a close second. Texas had the highest year-over-year increase in milk production during August, up 9.5 per cent followed by Colorado and Kansas. Florida had the largest decrease in production, down more than seven per cent.

Market stacked to destroy Canadian dairy farming if artificially cheap U.S. milk allowed

B.C. dairy farmers are watching nervously as U.S. negotiators turn their attention to Canada’s dairy market in the marathon renegotiation of the North American Free Trade Agreement.

Western capitalism is decades into the “bigger is better” operational model. Free markets have long been governed by a continual need for expansion and growth in order to justify success. But amidst our ever-more globalized economic structure, the time has come to view this strategy as both unsustainable and shortsighted.

Be it unchecked population growth, pollution, or dwindling resources — the economic world our children grow into is sure to be more challenging than ours. Since the post-war era of industrial expansion and innovation, a dominating undercurrent of growth has been dogmatically applied to sustain the North American economic model. But what happens when we’re out of trees, land to build on, or fish in our seas? We’re quickly transitioning into an era where sustainable business practices are needed.

Amidst ongoing NAFTA negotiations, our differing national approaches to agriculture are caught up in this issue. The U.S. is the textbook poster-child of expansion, strength and dominance as the defining structure of its economic ambitions. In Canada, our approach has been more relaxed.

Using dairy as an example, the average number of cows on a B.C. dairy farm is about 127. In the U.S., it can be upwards of 10,000 at some mega-farms. While we’ve adopted new methods and technology, our farms have a small and sustainable footprint. We control our supply of milk and aim to carefully produce an amount that will supply our domestic needs. Dairy farming in Canada is still primarily a family business, which is good for rural economies, the environment, animal welfare and a host of other positives.

In the U.S., meanwhile, the size of farms expands unchecked, using size and technology to crank out ever-more milk without even establishing markets for their products. In the dairy world, this had already lead to record U.S. bankruptcy of dairy farmers, as their product is increasingly devalued, and often sold below the cost of production.

To further prop up this misaligned system, the U.S. farm bill provides a trillion-dollars-a-decade support net to artificially lower the cost of the end-product and help establish market dominance through exports by undercutting foreign competition. Sound fair? It’s not. It’s predatory economics.

As NAFTA talks continue, all this means significant risk for Canada. Neither U.S. President Donald Trump nor, frankly, the U.S. agricultural structure is playing fair. U.S. dairy overproduction issues are so large that regardless of whether they have increased access to the Canadian market, they will continue to result in the wasteful dumping of millions of gallons a year in excess milk.

Establishing market sustainability requires a change in thought. Rather than using U.S. posturing and rhetoric from the podium, Trump should cease his efforts to strike down Canadian supply management and find ways for the U.S. to implement a version of our structure. This shouldn’t be a “we versus them” issue. Trade agreements were designed to be of mutual benefit to all parties. The U.S. is attempting to strong-arm access into the Canadian dairy industry to clean up its own undisciplined production regime. We deserve better and so do U.S. dairy producers.

Canadian negotiators have done a great job at defending the Canadian dairy structure so far in the NAFTA negotiations. It’s enraging Trump.

Canadians need to realize that their food doesn’t magically appear on store shelves. It’s takes a lot of hard work by Canadians in the agricultural sector to produce the high-quality products that Canadians enjoy. Outside of our cities, agriculture is a major employer. Food sovereignty and food security are important issues. Producing our own agricultural products can’t be put at risk because a pouting foreign diplomat demands it.


Dairy farmer resumes operations 7 1/2 years after Fukushima disaster

Tetsuji Sakuma, right, unloads a cow from a truck in the Fukushima Prefecture village of Katsurao on Sept. 13, 2018, as he resumes operations at his dairy farm for the first time since the Fukushima No. 1 Nuclear Power Plant disaster. (Mainichi)

A 42-year-old man resumed operations at his dairy farm on Sept. 13 with the arrival of eight cows at his barn, after an evacuation order for the 2011 nuclear crisis was lifted in most parts of the village here.

Tetsuji Sakuma, who is aiming to ship milk for public sale from the beginning of next year, restarted his business for the first time in 7 1/2 years after the Fukushima No. 1 Nuclear Power Plant disaster. He did not give up hope of resuming his work even after being forced to evacuate and losing all his cattle as a result. “I hope to restore my finances and to lead this area (to recovery),” said the farmer, taking one step toward the reconstruction of his hometown.

Sakuma unloaded the cows from a truck into his barn with the help of his 68-year-old father Shinji. Sakuma laughed bitterly as he suddenly felt old, realizing he had “lost strength after not doing such work for 7 1/2 years,” but flashed a smile as he watched the cattle graze.

Sakuma took over running the ranch when he was just 20 years old. He successfully increased the number of cows and barns, and was raising a total of 129 dairy cattle before the nuclear crisis struck. He grew corn and grass to feed the cows, which he raised from when they were calves, and brought them up in a stress-less environment to produce large quantities of high quality milk. The cows were like members of the family and he used to ship the largest amount of raw milk among farmers in Fukushima Prefecture.

After the deadly quake struck on March 11, 2011, a tanker did not come to collect his milk the next day, forcing him to discard it. Dairy cattle can die if they are not milked and Sakuma thought that “cows sacrifice themselves to produce milk, and throwing it away is like wasting their lives.”

Everyone in the village was advised to evacuate on the night of March 14, 2011. Sakuma let his wife and child evacuate to Gunma Prefecture while he took shelter in the city of Fukushima with his parents. Ten of his cows were found dead when he returned on May 18.

Some 25 of his young cows were sent to a ranch in Hokkaido in June that year and the rest were shipped off to be culled for their meat following inspections. “People can evacuate, but cows have nowhere to escape,” the distressed farmer thought as he apologized to the cows.

Sakuma moved into a temporary housing complex in the town of Miharu in Fukushima Prefecture with his wife and child. He helped his friend’s civil engineering work while serving as a village assembly member, and waited for a chance to start farming again. Restrictions on shipments of milk were lifted in December 2016, half a year after the easing of the nuclear evacuation order. Sakuma rushed to prepare for the reopening of his dairy farm, such as repairing milking machines.

The excited farmer bought eight dairy cattle at an auction in Hokkaido on Sept. 11, exactly 7 1/2 years after the Fukushima disaster. Sakuma will check the level of radiation in the cows’ milk once a week, to accomplish his goal to ship milk for public sale from the beginning of next year. His future dream is to have 300 cows graze on his farm.

His wife gave birth to three more children while they lived as evacuees and this spring, the family moved into a new home he built in the place where their old home used to stand in the town of Katsurao. The father of four feels proud every time his eldest son Ryoji, 13, says he wants to “become a dairy farmer.”

Sakuma never once thought of shutting down his dairy farm. “I don’t want to be perceived as someone who quit in exchange for compensation. If I stop farming, I would feel like I have lost to these circumstances,” he stated. Sakuma has to repay a 100 million yen loan he took out to resume operations at his dairy farm and to work to eliminate damage caused by harmful rumors, as well as face many other challenges. “This is the point of no return,” said Sakuma, as he rolled up his sleeves to start his difficult journey.


Australian dairy processors warned on milk prices

The ACCC has warned dairy processors not to mislead drought afflicted dairy farmers on milk prices.

The warning follows reports of processors blaming their private-label milk contracts with supermarkets for the low prices offered to farmers, according to the ACCC.

“The ACCC has heard reports from a number of dairy farmers in NSW and Queensland who are struggling to cover costs in the face of drought conditions,” the competition regulator said.

“These reports allege that processors say they cannot pay farmers more for their milk because of the low $1 per litre price for private label milk. Given the existence of these pass-through clauses, this is not correct.”

According to the ACCC, a key finding of its recent Dairy Inquiry was that almost all contracts for the supply of private label milk allow processors to pass-through movements in farm gate prices to supermarkets.

In addition, farmers are paid the same price irrespective of whether their milk goes into private label or branded products. 
The findings were drawn from detailed evidence provided by supermarkets and processors, the ACCC said.

“Dairy processors need to be honest with farmers. We have written to a number of processors warning them not to mislead farmers by blaming private label milk contracts for the prices offered for milk at the farmgate,” ACCC Chair Rod Sims said.

“We’re concerned this is misleading as the power lies with processors to raise the farmgate price paid to farmers, and then pass these higher farmgate prices on to supermarkets.”

“Almost all contracts between processors and supermarkets for the supply of private label milk allow processors to pass-through movements in farmgate prices to supermarkets. This means processors set their farmgate prices independent of the supermarkets’ retail prices.”

Source: Food & Drink Business

Is Canada’s ‘dairy cartel” really milking the system?

I never used to pay much attention to the price of milk. It was always on the list, and you paid what you paid. But now I keep a close eye on it.

Alerted by the current debate over supply-management in Canadian agriculture, I figured the best place to discover the evil deeds of the so-called “dairy cartel” was on the shelves of my local grocery store.

This week, a four-litre bag of 2% milk is going for $4.99. That’s $1.25 a litre, cheaper than any of the sugary drinks for sale there and half the price of the many milk substitutes that now crowd the dairy shelves.

I keep waiting for the dairy cartel to tighten the screws and begin to charge as much as its sugar-water competitors do. But reality stubbornly persists in contradicting the alarmist rhetoric that politicians and pundits spin about greedy farmers, to the point that the contrast between what happens in the dairy aisle and the political outcry it provokes has become bizarre.

Somehow, the orderly, fair-all-round provision of basic food has split the Conservative Party and become a major sticking point in Canada’s most important trade negotiations of the century.

But that’s what happens when ideology attacks evidence — either from without, in the case of Donald Trump, or from within, in the form of Canadian free traders who simply cannot abide the existence of a successful counter-example to their orthodoxy.

It is a matter of opinion that Canadian milk is wildly overpriced, and that oppressed consumers annually transfer unearned billions to fat-cat farmers. It is a matter of fact, according to data firm Nielsen, that Canadian milk was on average cheaper than the equivalent U.S. product in 2017. So was Canadian butter, cream, cheese and yogurt.

Even consumers in New Zealand, a dairy powerhouse with 4.7 million people and 6.5 million milk cows, pay quite a bit more for dairy products than Canadians.

Ideology tells supply-management critics that deregulation will lower prices and turn Canada into a dairy-exporting giant. They often point to Australia, which deregulated dairy in 2000, as an example of the right path.

The facts are that Australia’s share of international dairy exports have dropped from about 9 per cent to 4 per cent since deregulation. Milk production has dropped from about 12 billion litres annually to about nine billion litres today. Farmers are losing their livelihoods by the hundreds ever year, and suicide prevention is now a major focus of Australian dairy policy.

And the price of milk in Australian supermarkets is on average higher than it is in Canada.

The reality is that there is no free market beckoning enterprising Canadian farmers. The world market is chronically awash with subsidized products that make competition almost impossible. By not playing along, Canada has developed a dairy industry now envied worldwide by the victims of deregulation gone wrong.

U.S. subsidies and tariffs have encouraged farmers to steadily increase production in the face of declining demand. As a result they dump almost 200 million litres of milk a year on fields and into streams. The national cheese stockpile, designed to support prices by warehousing excess dairy production in non-perishable form, has grown to 635,000 tonnes. As family farms disappear amid a now-familiar epidemic of suicides, U.S. farmers regularly tell reporters they need Canadian-style production controls to survive.

In the European Union, which abandoned dairy quotas in 2015, overproduction has taken the form of a skim-milk powder mountain that now weighs 380,000 tonnes – and has triggered new subsidies amounting to $760 million annually to support farmers driven to the wall by the policy.

Yes, growth-hormone-laced milk in the U.S. is cheaper than hormone-free milk in Canada. Much of it is produced in massive factory farms staffed by undocumented immigrant workers earning starvation wages. Without that dubious advantage, the U.S. dairy industry itself has estimated, retail milk prices there would increase 90 per cent.

How cheap is too cheap? If ideology paused long enough to recognize reality, it might eventually consider an answer. In the meantime, $1.25 for a litre of milk produced on prosperous family farms is a bargain Canadians would be crazy to give up.


False Reports in Regards to Canadian US Dairy Trade Imbalance

“The U.S. dairy system benefits from the Canadian market to the tune of $600 million and we question why they need more access.” That according to Graham Lloyd, CEO of Dairy Farmers of Ontario.  Who argues that dairy trade between the U.S. and Canada are unfair are not true.

Llyod contends that dairy has become a target in NAFTA talks because of President Trump’s aspirations for support in Wisconsin rather than efforts for a solution to managing surplus milk. He comments that the Canadian supply management system works and providing the U.S. more access to the Canadian marketplace would harm Canadian dairy farmers.  “It’s important to our rural economy, it’s one of the reasons our rural economy is thriving, and I think it’s important to understand I think that’s why the Canadian government continues to defend it.”

According to Lloyd, overproduction in the U.S. is hurting rural economies in American and causing more farms to go out of business, which is why he believes some U.S. farm groups are looking to Canada as a model of a production system that works. He says Canada’s dairy production totals less than the state of Wisconsin’s and represents less than one per cent of the global export market.

Dairy Farmers of Ontario represents nearly 3,500 dairy farmers with an average herd size of 80 cows.

New Study Shows Eating Dairy Reduces Risk of Dying

A new 12-year study by a Polish University presented at the annual congress of the European Society of Cardiology, involving 24,474 adults shows that consuming dairy products, particularly cheese and yogurt, will reduce the chance of death by two to eight percent.

The study suggests that the current advice to limit dairy intake should be reconsidered, especially for those who consume yogurt and cheese as opposed to milk.

“The consumption of dairy products has long been thought to increase the risk of death, particularly from coronary heart disease, cerebrovascular disease and cancer, because of dairy’s relatively high levels of saturated fat,” the society said in a news release. “Yet evidence for any such link, especially among U.S. adults, is inconsistent.”

Whole milk still appears to increase the risk of heart disease, although the study authors did not quantify how great the increase was. But most other dairy products, especially cheese and yogurt, were found to protect against both total mortality — death from any cause — and mortality from cerebrovascular causes.

Dr. Maciej Banach of the Medical University of Lodz, Poland, who led the study, and his co-researchers examined data from the 1999–2010 National Health and Nutrition Examination Survey, conducted by the Centers for Disease Control and Prevention. The average age of the 24,474 adult study participants was 47.6 years old, and 51.4 percent were women. During the follow-up period of over six years, 3,520 deaths were recorded, including 827 from cancer, 709 from cardiac causes and 228 from cerebrovascular disease.

Researchers found that those study subjects who consumed dairy of any kind had a two percent lower risk of death of any kind. And if they consumed a dairy diet consisting mostly of cheese their chance of death was 8% lower. In addition, the risk of death from stroke was 4% lower with total dairy consumption, and 7% lower with just milk consumption.

However, the risk of heart disease was increased with higher milk consumption, which the study’s authors from the Medical University of Lodz, Poland, said needs further study.

“This was a study of an eating pattern — which is really what we need to be focusing on — eating patterns as opposed to individual foods or food groups,” Beth Kitchin, an assistant professor of nutrition science at the University of Alabama at Birmingham who was not affiliated with the study, said in an email. “Dairy foods like milk, cheese, yogurt and kefir are great sources of high-quality protein, calcium and phosphorus. Milk and yogurt are good sources of potassium — which is tough to get enough of in our diets. Diets high in potassium help lower blood pressure. Unless you’re allergic to milk, there really aren’t downsides — unless you eat so much of them that you gain weight.”

Dairy products are major sources of saturated fat and contribute to approximately one-fifth of total saturated fat intake in the U.S. diet. Eating saturated fats increases bad cholesterol levels, called LDL, and may induce chronic inflammation, leading to an increase in cardiovascular disease, but specific fatty acids in dairy have been shown to lower heart disease risk in recent studies.

In a study published in December 2014 in the American Journal of Clinical Nutrition, researchers from Tufts and Harvard universities found that people with very high dairy consumption had a significantly lower risk of diabetes, a major risk factor for developing heart disease, compared with people who had a very low dairy consumption.

While cheese and other dairy products are being reconsidered as heart-healthy add-ons, they are far from lifesaving, and most medical professionals still consider a balanced diet the healthiest option.

“I recommend that people limit whole-milk dairy products and cheese portions,” said Dr. Holly Lofton, director of the weight management program at NYU Langone Health. “Cheese can be quite satisfying and filling for patients but it is also often eaten in mindless settings like dinner parties. This can lead to weight gain, which increases cardiovascular risk.”

Hokkaido dairy farmers hit by quake work together to overcome hardship

With many dairy farmers in Hokkaido forced to dump thousands of liters of fresh milk following power outages and a scarcity of water triggered by the powerful earthquake on Sept. 6, local communities are trying to overcome the hardship by banding together.

“Because a milk shipment factory stopped operating due to the power outage after the quake, I had to throw away 4,000 liters of fresh milk that had been stored in cooler tanks,” Takamitsu Igarashi, the owner of a dairy farm in the city of Tomakomai, said during an interview with The Japan Times on Tuesday.

Milk, which is around 30 degrees Celsius when extracted from dairy cows, has to be stored at temperatures under 5 degrees Celsius. Anything above that temperature would allow bacteria to spread inside storage tanks, making the milk undrinkable, Igarashi said.

Cows also have to be milked every 12 hours or they will develop diseases and sometimes even die.

Igarashi was probably better prepared for disasters than many of his peers. Learning from the Great East Japan Earthquake in 2011, which heavily disrupted the electricity supply across Japan, he had purchased a private power generator and only had to dispose of milk produced in the two days following the deadly magnitude 6.7 quake that rocked the northern prefecture.

Igarashi even allowed his power generator to be used by others who needed to operate their milking machines until electricity was restored Saturday afternoon.

“Usually milking has to be done around the same time … but since there were not enough power generators, some dairy farmers who usually do milking at 5 a.m. had to wait until 3 p.m.,” Igarashi said, noting that the failure to milk cows on schedule can cause their udders to become bloated, leading to inflammation and infection.

But even after the electricity was restored, a lack of clean water has continued to pose a serious problem for dairy farmers, as they need to give cows about 100 liters of water every day and have not been able to clean the already bacteria-tainted storage tanks, Igarashi said.

Water has been delivered by truck to the quake-hit areas, including Tomakomai, where two people died, but the amount is not enough for the dairy industry.

Tomoyuki Yamate, a veterinarian who was visiting Igarashi’s farm to check the condition of the livestock there, said Tuesday that about 10 animals have shown symptoms of dehydration in Tomakomai and the adjacent towns of Abira and Atsuma. Yamate, whose hospital is in Abira, added that medicine is also running short and that the delivery of medical supplies is difficult as some roads have closed after the quake.

The quake has also damaged cowsheds, leading farmers in Abira to evacuate their cows to a nearby facility owned by a livestock market. Around 190 cows were being sheltered there as of noon Tuesday, a spokesman said.

The quake was an additional blow to the farmers who had seen their cowsheds damaged by Typhoon Jebi, which devastated parts of western Japan and also affected Hokkaido the same week.

“I was repairing the cowshed roofs, some of which had been blown off by the typhoon — then the strong quake hit,” said Igarashi. Some farmers were too busy to be interviewed, with the owner of Kohanawa farm in Abira saying he was occupied with repair work.

Pioneer Farm in Tomakomai, which trains race horses, said it did not suffer severe damage from the quake, but referred to the powerful typhoon and the quake on its Facebook page. “Been a few rough days here at Pioneer Farm … Just to let everyone know we have had a big shake up but we are all well & as usual taking it in stride!”

Adrian Sakuma, a New Zealander and the owner of the farm, said the treadmill for horse training could not be used during the power outage.

But he said he had experienced many quakes in New Zealand and knew what to do. “We prepared for a potential quake and made sure we had sufficient food stocks and water for our horses.”

Sakuma said they had been able to get sufficient water for the total of 50 horses on his farm, which consume 50 liters daily, thanks to support from his peers and others. “People in the city have been really helpful to us, delivering water and such,” he said.

Igarashi said the two consecutive disasters were terrible, but that things would have been much worse had the quake hit a month before or after. “In summer, we must use cooling fans to keep the cows from overheating, and in winter, electric heaters are a must to keep water from freezing.

“In either of those cases, the quake would have caused severe damage to the cows and the potential impact on my business would have been horrible,” he explained.

The milk dumping after the quake seems to have also affected consumers.

“All milk products, eggs and bread are gone. I could not find any at the convenience store,” said Yasuhiro Watanabe, who was at his home in Abira when the quake hit. He is currently staying at his brother’s house in Chitose.

Even in Sapporo, dairy product shortages have been noticeable. On Tuesday, shelves usually home to milk products at a convenience store were empty, and a notification showed that the products would not be stocked until further notice.

Lieke van Vroonhoven, a 29-year-old native of the Netherlands who moved to Sapporo with her husband just a month ago, said she still sees many product shortages in the city.

“The supermarket I always go to is still low on many products, especially milk, bread, eggs and tofu. I think they are getting some stocks, but less than usual,” said Vroonhoven. “I also talked to some people who live in (my neighborhood) Makomanai, and they said many people go to the supermarket as soon as it opens and buy as much as possible.”

Megmilk Snow Brand Co., a major dairy producer, said a milk factory in Sapporo restarted operations Sunday. But it said it is putting priority on delivering milk to schools and has been unable to deliver the dairy products to supermarkets in the amounts that have been requested.


Source: The Japan Times

Wisconsin to hit highest loss of dairy farms since 2013

Wisconsin is on pace for losing the most dairy farms this year since 2013.

The state Department of Agriculture, Trade and Consumer Protection says Wisconsin lost 47 dairy farms in August alone, the Wisconsin Public Radio reported .

There were fewer than 8,400 licensed dairy producers at the beginning of this month, which is 429 fewer than at the start of the year, according to the data. The decline is the biggest one in four years, when the state lost 434 farms in the first eight months of 2013.

The decline isn’t surprising given the current market and long-term trend toward industry consolidation, said Mike North, president of the Dairy Business Association.

“There’s lots of motivating factors in this but it’s a trend that’s been going for my entire lifetime,” he said.

North also said price reactions to new tariffs on U.S. dairy products have led some farmers to leave the industry early this year. But for some farms, low milk prices for more than three years just became too much, said Shelly Mayer, executive director of Professional Daily Producers.

“For some of these farm families, that they just can’t continue on with the businesses and that’s what we always find difficult and devastating, to lose the farm numbers in that way,” she said.

Mayer said Wisconsin will likely see continued declines in the number of producers, especially given that expenses continue to increase for dairy farmers despite low prices.

“Those costs just don’t go down,” she said. “The cost of labor is there. The cost of all of our inputs: electric, gas, insurance. All of those costs continue to rise including the cost of replacing machinery.”


It’s being suggested the Fonterra financials paint an even worse picture than the headlines

The dairy co-operative lost almost 200-million dollars last financial year – its first ever net loss.

Andrew Kelleher from JMI Wealth says investors were expecting bad news.

They knew the co-op had lost value in its Beingmate investment, and had to pay a 180-million dollar settlement to French company Danone .

But Kelleher says looking underneath all of that, actual operational earnings were disappointing as well.

He says its debt is up to 6.2-billion dollars, which is outside of borrowing guidance ratios, the return on capital is lower, and expenses are higher.


Source: NZ City

New Zealand dairy giant posts loss after China stake sours

New Zealand’s largest company, which sells dairy products, said Thursday it will completely review its business investments after a disastrous financial year saw it post its first-ever loss.

Fonterra lost hundreds of millions of dollars on its investments in China and also had to pay a large arbitration settlement following a 2013 botulism scare. The company has a new leadership team, which is promising to turn things around, after both the chief executive and board chairman recently quit.

Fonterra is the world’s largest exporter of dairy products and controls more than 80 percent of New Zealand’s milk supplies. Its largest market is China, which uses New Zealand’s sought-after milk powder to make infant formula.

New Chief Executive Miles Hurrell said Fonterra failed to meet the promises it had made to the more than 10,000 farmers who own the company under a cooperative structure.

“Throughout our business, we underperformed,” he said.

Many farmers worry that Fonterra has lost touch with its agricultural roots by employing thousands of high-paid executives and making large, opaque investments in foreign markets.

Fonterra announced an after-tax loss of 196 million New Zealand dollars ($129 million) for the year ending July, compared to a profit in the previous year of $745 million New Zealand dollars ($489 million).

Much of the loss was due to a write-down of NZ$439 million on Fonterra’s investment in China-based infant food company Beingmate.

Fonterra also lost NZ$232 million in an arbitration payout to Danone of France, for recall costs from the 2013 food scare. The recall was made out of concerns, which proved later to be untrue, that some Fonterra products supplied to Danone in Asia were tainted by bacteria that can cause botulism.

Board chairman John Monaghan said the company would be reviewing all its investments over the next few months, starting with its stake in Beingmate. Fonterra plans to reduce its debt by NZ$800 million, in part by selling some of its investments.

The results came during a year when farmers benefited from relatively high milk prices. One bright spot was that Fonterra’s revenue was up 6 percent to NZ$20 billion thanks to the higher prices, despite a drop of 3 percent in the volume of products sold.

Former chief executive Theo Spierings announced in March he was quitting, followed by former chairman John Wilson who left in July. Spierings’ compensation last year of NZ$8 million angered many farmers, who thought it was too high.

Monaghan said Hurrell’s pay, which would be disclosed next year, would be “substantially less” than what his predecessor was paid and would be in line with market forces.

Chris Lewis, the dairy chairman for farmer’s lobby group Federated Farmers, said in a statement that Fonterra must do better, something he’s hopeful will happen under the new management.

“I hope those two have a new broom for the shop floor,” Lewis said.

Hurrell said he saw an opportunity to turn the company’s fortunes around.

“It’s a tough job, and I don’t hide from that,” he said. “We’ve got a challenge in front of us.”


Source: The Washington Post

CDCB Industry Meeting: Future of Phenotyping

The Council on Dairy Cattle Breeding (CDCB) invites producers, industry representatives and genetic enthusiasts to discuss how technology is shaping phenotypic data and genetic evaluations. The CDCB Industry Meeting will be conveniently held during World Dairy Expo in Madison, Wis., on Tuesday, Oct. 2 from 8 a.m. to 1 p.m. in the Exhibition Hall (Mendota Room 4). Register and review the agenda at this link

“We’re in a new era of precision dairy, big data and genomics. As these innovations influence the day-to-day management of dairy herds, technology also holds growing potential to capture data and develop quality genetic evaluations,” said João Dürr, Chief Executive Officer of the CDCB. “Adopting innovation has improved the health and productivity of our dairy herd, and that progress can rise to a new level with improved data flow, enhanced genetic information and promise of new genetic traits.”

The meeting will be headlined by three keynote presentations on dairy data.

  • How sensors and automation are changing dairy data for good, by Steven Sievert, Manager of Quality Certification Services Inc.
  • Value of cooperative phenotypic databases in the genomics era, by Dr. Albert DeVries, Associate Professor, University of Florida
  • Producer needs and opportunities for data recording, Paul Trierweiler, President of the Board of Directors, NorthStar Cooperative Inc.

These future-forward presentations will be followed by discussion on how “big data” for cow performance, health, body measures and activity can flow into a national database and continue serving the common good through public research and independent assessment services. The panel will be moderated by event emcee, Corey Geiger of Hoard’s Dairyman.

Staff from CDCB and USDA Animal Genomics and Improvement Laboratory will also provide progress updates on research and future developments, with ample time for questions and discussion.

“In the past 10 years, genotyping and genomic evaluations have revolutionized dairy cattle breeding in the U.S. and worldwide, resulting in significant genetic progress,” stated Dürr, “The U.S. has an exceptional reputation – a world leader in dairy cattle genetic improvement with an envious legacy and 100-plus year history of cooperation. That spirit of collaboration and drive for continuous improvement will help tap the limitless potential of big data and genetic progress as we work to breed a healthy, productive and sustainable dairy herd.”

While pre-registration is appreciated, walk-ins are welcome on October 2 with registration and refreshments at 8 a.m. and program start at 8:30 a.m.


9 percent of Michigan Dairies Close Since Last September

 According to the Michigan Department of Agriculture  there are currently 1,331 Grade A dairy farms operating in the state, down 20 percent from four years ago. At least nine percent of Michigan dairy farms in the state have closed since last September. 

“Up till now it would appear that those cows are just going on other farms.”

There has been an increase in the number of dairy farms that have closed, milk production is not declining as much as is needed to increase milk prices.

Michigan Milk Producers Association president Ken Nobis comments that three years of low prices have been depressing for farmers and some are cutting their losses.  “You are starting to see more of them making that decision that enough is enough.”

Dairy Farmers of America regional manager Chuck Courtade adds that farms large and small have been leaving the business and it’s added pressure to the milk hauling system.  “If you have a remote area where there aren’t a lot of dairy farms already and two or three decide to sell out, it puts a real challenge on getting haulers there and there’s already a driver shortage.”

Over the last 10 months, MMPA has lost more than 120 farms with  a large portion of them have been Amish members.  “That’s more than 10 percent of our membership on an annual basis because that still has the months of August and September on farms going out.”


Fonterra loss of $196m its first ever, Spierings gets $8m farewell pay

New Zealand’s largest company, Fonterra, has announced its first ever net loss after tax of $196 million for the 2017-18 year, but ex-chief executive Theo Spierings has left with a final year’s salary of $8.08m.

Last year Spierings was paid $8.32m, a 57 per cent jump from the previous year, made up of a $2.46m base salary, superannuation benefits of $170,036, and performance payments for 2016 and 2017 of $1.83m and $3.85m.

That works out to about $159,000 a week, or $22,000 a day.

In 2015, there was an outcry against his pay packet which led to Spierings requesting a pay freeze for the 2015-16 year, amid losses of more than 700 staff.  

New chief executive Miles Hurrell said Fonterra would immediately start with a strategic review of its investment in its Chinese partner Beingmate.

Last year it posted a $745m after-tax profit, but in March it announced a $348m half year loss, following a write down of its Beingmate investment by $405m and payment to Danone of $183m following a court case over the 2013 botulism scare.

Hurrell said the dairy giant’s business performance must improve.

“There’s no two ways about it, these results don’t meet the standards we need to live up to. In FY18, we did not meet the promises we made to farmers and unitholders,” Hurrell said.

Besides the Beingmate investment write down and the Danone payment, there were four main reasons for Fonterra’s poor earnings performance.

“First, forecasting is never easy but ours proved to be too optimistic. Second, butter prices didn’t come down as we anticipated, which impacted our sales volumes and margins. Third, the increase in the forecast farmgate milk price late in the season, while good for farmers, put pressure on our margins. And fourth, operating expenses were up in some parts of the business and, while this was planned, it was also based on delivering higher earnings than we achieved.”

“Even allowing for the payment to Danone and the write down on Beingmate, which collectively account for 3.2 per cent of the increase in the gearing ratio, our performance is still down on last year.”

The $196m loss was on turnover of $20.4 billion. The full year dividend remains at the 10c already paid in April.

Hurrell said the board and management had outlined a plan based on three immediate actions:

1. Taking stock of the business – it will re-evaluate all investments, major assets and partnerships to decide if they support its strategy, are hitting their target return on capital and whether it can scale them up and grow more value over the next two-three years. 

2. Getting the basics right – the level of financial discipline will be lifted throughout so debt can be reduced and return on capital improved.

3. Ensuring more accurate forecasting – the business will be run on more realistic forecasts with a clear line of sight on potential opportunities as well as the risks.

“It will also be clear on its assumptions, so farmers and unitholders know exactly where they stand and can make the decisions that are right for them and their businesses.”

Chairman John Monaghan said Fonterra was being clear on what it would take to achieve the forecast earnings guidance.

“For the first time we are sharing some business unit specific forecasts. These see the ingredients and consumer and food service businesses achieving an EBIT (earnings before interest and tax) of between $850m and $950m, and between $540m and $590m, respectively.”

“You can expect to see strict discipline around cost control and respect for farmers’ and unitholders’ invested capital. That’s our priority,” Monaghan said.

Federated Farmers dairy chairman Chris Lewis said the big disappointment for him was the increase in debt. Fonterra’s gearing ratio has lifted to 48.4 per cent, up from 44.3 per cent. 

“Fonterra needs to be match fit to take on the competitors such as Open Country Dairy and Synlait, it has had 17 years to become match fit but by taking on more debt it is failing to be that.”

“Should heads roll? Let’s give the new CEO and chairman time to clean out the stables. It sure needs a new broom,” Lewis said. 

ASB analyst Nathan Penny said Fonterra was showing a worrying trend because, not taking account of the Beingmate and Danone issues, the underlying profit (EBIT) had fallen two years in a row for a combined $456m loss.

Grant Davies, investment advisor at Hamilton Hindin Greene, described it as a “pretty disappointing result”.

“They’ve come in below what they have previously forecast, with the result outside the previously indicated range.”

“Even when you strip out one-offs like Danone and Beingmate, earnings have halved. They’ve got increased costs and debt levels are rising, they have higher interest expenses. Everything is going in the wrong direction.”

Davies said he was not a fan of Fonterra’s investment structure. 

“Non-farmer shareholders receive no voting rights – you’re just along for the ride. If you go back to 2012 and look at the prospectus the return was about 42c per share, and in 2013. 43c per share. So it’s weakened considerably, people have a right to be disappointed.”

Other highlights:

* Total cash payout for 2017-18 season: $6.79 
* Farmgate milk price $6.69 per kgMS 
• New Zealand milk collections: 1505 million kgMS, down 1 per cent
• Sales volumes: 22.2 billion Liquid Milk Equivalents (LME), down 3 per cent 
• Normalised EBIT: $902 million, down 22 per cent 
• Normalised gross margin: 15.4 per cent, down from 16.9 per cent
• Return on capital: 6.3%, down from 8.3% 
• Normalised earnings per share: 24 cents 
• Gearing ratio: 48.4 per cent, up from 44.3 per cent 
• FY19 forecast Farmgate Milk Price: $6.75 per kgMS 
• FY19 forecast earnings per share range: 25-35 cents


Source: Stuff

Fonterra under pressure to reveal future plans

Dairy giant Fonterra is expected to post a substantial annual loss when it releases its financial results on Thursday, but as much attention will be on its future plans as on the numbers.

Analysts expect the farmer-owned dairy co-operative to report a net loss of about $150 million for the 12 months ended July, driven by a drop in profit margins across Fonterra’s global ingredients and consumer and foodservice businesses.

It will also reflect the large compensation payout to French food company Danone, as well as a write down of its investment in Chinese dairy company Beingmate, which were the reasons for the first half loss of $348m.

Revenue is expected to be down nearly 5 percent to about $20 billion, compared with $19.2b the year earlier.

Harbour Asset Management director Oyvinn Rimer said the market would be listening carefully to hear what the executive team had to say about the review, any change of plans for Beingmate and its debt position, which was likely under pressure.

“Latest set of announcements suggest that the balance sheet is probably a bit stretched, and could see gearing slightly higher than their targets,” he said.

“And I think that what we just recently saw with the earnings downgrades and the farmgate milk price downgrade as well, is that they are using that balance sheet flexibility to ensure that debt holders are looked after and to defend the credit rating in the short term.”

Over the past month Fonterra has lowered its payout forecast for the just ended season by 5 cents to $6.70 a kilo of milk solids, and also cut its forecast for the season just started by 25 cents to $6.75 per kg.

There will be no final dividend for the year, and earnings will be at the bottom end of its forecast range because the high price of milk had hit the earnings and margins of its high value consumer products.

The newly appointed chairman John Monaghan has highlighted the squeeze the company is going through and its underperformance, while the turbulence at the top of the co-operative has been highlighted by its halting of the search for a new chief executive, and the appointment of company insider Mike Hurrell to step-in while the co-operative’s future is reviewed.

Mr Rimer said the key issue was how the company decided to balance its ingredients business at home, versus its drive to create global consumer brands to compete with the likes of global food companies, Nestle and Danone.

“I don’t expect any radical changes, at least this week, but over time we could get some steer on how the company is going to play the big asset portfolio back home in New Zealand versus the offshore brands opportunities. That is just a conundrum,” he said.

“We’ll see if the new management board has any fresh thinking on that … we’ll wait and see.”


Source: RNZ

Dairy export numbers hint at tariff effects

Aside from the data, USDEC says numerous exporters have talked of lost contracts, expectations of losing contracts and adjusting prices lower to hold onto market share.

U.S. dairy exports in July were seasonably lower and the lowest since January, but they were still ahead of year-ago levels.

Suppliers shipped 170,100 tons of milk powders, cheese, butterfat, whey and lactose, up 11 percent over July 2017. Those exports were worth $434 million, a 3 percent increase over a year earlier, U.S. Dairy Export Council reported.

But the data also seem to show some effects from retaliatory tariffs on U.S. dairy by China and Mexico, with a big hit to whey and cheese exports to China and a slight drop in cheese exports to Mexico — the top market for U.S. cheese.

Alan Levitt, USDEC vice president of communications, said it’s tough to draw firm conclusions on the effects of the tariffs based on a single month’s data.

Those lower exports could be a function of the normal month-to-month fluctuations of tactical buying. For instance, buyers could have stocked up in previous months ahead of the new tariffs, he said.

It’s also noteworthy that whey prices are up more than 50 percent since March, which could have given buyers pause, he said.

“But that said, just about all the product lines and markets affected by the new tariffs saw a decline in July, so we would theorize that the tariff effect is real,” he said.

Whey, skim milk powder and cheese are the main products affected by China’s tariffs. Whey and cheese exports to China in July were down 26 percent and 56 percent, respectively, while skim milk powder did OK, he said.

“Meanwhile, lactose, which is not hit with new tariffs, continued to flourish (up 53 percent),” he said.

The only product directly affected in Mexico is cheese, and cheese exports to Mexico — which were up 7 percent in 2017 — were down 1 percent in July.

Meanwhile, skim milk powder exports to Mexico were up 31 percent, butterfat was up 345 percent, lactose was up 42 percent, whole milk powder was up 105 percent and fluid milk was up 23 percent.

“So Mexico was still buying from us, just not as much cheese,” he said.

That could have been because buyers bought ahead in June before the new tariffs were to go into effect. U.S. cheese exports to Mexico in June were up 43 percent, he said.

Aside from the data, USDEC has heard from numerous U.S. exporters stories of lost contracts, expected lost contracts when buyers can shift suppliers and efforts to adjust pricing to retain business given the importance of the market, he said.

“Going forward, I would expect the trend to continue,” he said.

In China, that would mean a loss of sales on the affected products and still some whey exports, but much less than before, he said.

“There’s a possibility China could add lactose to the tariff list. And if that’s the case, I would expect a similar trend as whey — still moving some volume, but less than before,” he said.

“On Mexico, we still have a competitive advantage, even with the retaliatory tariffs, and I would hope U.S. exporters would continue to maintain most if not all of their volumes there,” he said.


Who benefits from China’s massive investment in Kiwi dairy?

If it goes ahead, New Zealand Milk’s planned listing will give local dairy farmers who are currently in co-operatives different options for supply and ownership. When the revelation hit the press in March, the move was painted as a dinkum solution of the Kiwi dairy industry, by the Kiwi dairy industry and for the Kiwi dairy industry.

Fast forward to last month: founding shareholder Inky Tulloch appeared emotional as he watched the first tanker arrive at Mataura’s recently opened NZ$240m (US$156.8m) facility, declaring, “We’ve finally done it !”

Mataura Valley Milk is the vision of local shareholders like Tulloch who saw the need to “add more value to farmer and shareholder returns than the traditional New Zealand dairy farming/processing model,” according to its marketing material.

So what links these two companies, other than the industry in which they operate and their ambition? By such measures alone, they would appear to be true-blue Kiwi to the core. In reality, though, their businesses have been transformed by substantial Chinese investment.

Milk NZ began life after Chinese billionaire Jiang Zhaobai’s vehicle Shanghai Pengxin bought the Crafar farms, once New Zealand’s biggest family-owned dairy business, in April 2012 for a reported NZ$200m (US$130.5m).

It has since expanded to be one of the biggest dairy farm groups in New Zealand, managing 29 farms, milking 30,000 cows on 12,000 hectares of land, and producing some 10m kgMS each year. Milk NZ exports UHT, fresh milk and powders to China under the Theland brand.

Likewise, the Mataura Valley Milk plant benefitted from a NZ$200m cash injection by the China Animal Husbandry Group, a Chinese state-owned enterprise, in 2016. This was in return for just under a 72% stake in the site, which will process fresh milk into UHT, nutritionals and powders.

With a number of other substantial deals either on the anvil or completed, Milk NZ and Mataura are not alone in the changing landscape of the Kiwi dairy business.

Last year, China’s Bright Food, a Shanghai-based state-owned food industry conglomerate, announced the acquisition of the New Zealand Dairy Company for NZ$56.5m (US$36.9m). The capital investment was made by Synlait Milk, another Kiwi company Bright took over in 2010, which will benefit from the deal by substantially lifting its blending and canning capacity.

Close ties

China and New Zealand have had a close relationship based on, according to one former minister, four “firsts”. These refer to New Zealand being the first western country to conclude a bilateral agreement with China on its succession to the World Trade Organisation, the first developed country to recognize China’s status as a market economy, the first developed country to enter into free trade agreement negotiations, and the first to sign a high quality comprehensive balanced free trade agreement with China.

These arrangements have worked well for the two countries. In New Zealand, China has a trusted mass exporter of dairy, with its shipments accounting for around a quarter of all milk to the country, and over 80% of butter.

The free-trade agreement, signed in 2008, has benefited both sides and helped New Zealand become the center of the global dairy export market, to which it exports 95% of its production. Last year, it shipped nearly NZ$3.3bn (US$2.2bn) of milk powder, butter and cheese to China, according to Stats NZ.

Though China’s investments in New Zealand have dwarfed outlays in the opposite direction—NZ$2.5bn (US$1.6bn) compared to NZ$47m (US$30.7m) overall last year, according to Stats NZ—Fonterra, the world’s biggest dairy company, is sizing up the possibility of building processing plants in China to create products from its China farms.

It currently uses third-party products to process milk from 28,000 cows at two hubs, with a third being built.

“There is a natural cap to how much you can do through third parties so we’re assessing all the options, but we’re not in a position to say a definite timeline or make a commitment at this point,” said Christina Zhu, Fonterra Greater China’s president, last month.

Its Anchor brand is now the top seller in both stores and e-commerce, five years after launch, while Fonterra’s business in China has quintupled in turnover to NZ$5bn (US$3.3bn) over the same period. Its brands account for 11% of China’s total dairy consumption and 36% of dairy imports alone.

However, its NZ$756m (US$493m) mega-investment in Chinese infant food company Beingmate has been criticized as it threatens to hit the rocks, with Fonterra having so far written down NZ$405m (US$264m) of the deal’s value.

But as the dairy major looks to ramp up its milk supply in China, Chinese firms seem to be determined to integrate New Zealand deeply into its supply chain.


It hasn’t all been plain sailing for these companies. After buying the Crafar farms in 2012, Shanghai Pengxin looked to increase its land ownership by making a NZ$56m (US$36.5m) bid to buy the iconic Lochinver farm in the Waikato, only for the deal to be unexpectedly blocked by the government.

In return, Pengxin then pulled the plug on another deal to buy a group of farms 3,300 hectares in size, saying it was “not confident ” of approval from the government, considering its previous experience.

Terry Lee, director Pengxin’s subsidiary, Milk New Zealand, said at the time that he wanted “clarity ” on the requirement used to assess the sale of farmland bigger than five hectares to foreign buyers.

Not all sections of the Kiwi dairy industry are sanguine about how rapidly Chinese firms have been buying into the market. Indeed, some members of the Federated Farmers of New Zealand have been vocal about the scale of the purchases.

New Zealanders don’t have an issue on ownership at a low level. No one would be concerned if 5% of farmland was owned by overseas buyers ,” said William Rolleston, former president of the lobby group.

But if 95% of the land in New Zealand was owned by overseas buyers, I think we would have an issue—it would reduce our strategic options in the future .”

Dr Rolleston’s views echo public concern at the time of Pengxin’s Crafar deal, which sparked a debate about national identity.

Meanwhile, politicians largely on opposition benches have stoked such fears by saying that New Zealanders risked becoming “tenants in their own land.

One powerful figure, deputy prime minister Winston Peters, a nationalist firebrand, last year accused China of “exporting from New Zealand—to itself, ” in a reference to the country’s ownership and control of the infant formula supply chain between the two countries.

Right under our noses China has scored a massive coup. All the wealth and the added value is gushing out of New Zealand ,” he added.

Kiwi pragmatism

Yet New Zealanders are broadly in favor of increasing Chinese investment, which is widely seen as a positive development that puts money in farmers’ pockets, improves infrastructure and drives the industry forward at a frenzied pace. Indeed, government and trade organizations strongly maintain the country remains open for business.

One of New Zealand’s biggest dairy farmers, Colin Armer, summed up the general feeling when he told the BBC, “Bring it on! Foreign investment is great for New Zealand—it’s needed. I hope [the foreign investors] do well—I hope New Zealand does well out of it as well.

There is a lot to be said for this view. Looking at Milk NZ, the dairy has invested more than NZ$500m (US$326m) in its farms, including NZ$38m (US$24.8m) on new projects to “protect the environment, improve the living conditions for farm workers and enhance animal health ,” according to its managing director, Tony Nie.

One example of our on-farm investment is the construction of 300km of fencing to keep livestock away from lakes and waterways for our 16 farms in the North Island ,” he told DairyReporter .

He did, however, lament the “major challenges ” to its business the company faces, including the uncertainty caused by the Overseas Investment Office, which regulates foreign investment, and the time it takes to approve applications.

He also criticized the “special conditions imposed to prevent Pengxin and all its related parties from having more than 50% of interest in any dairy processing plant, and the requirement for the remaining 50% to be owned by New Zealanders.

Nevertheless, the relationship between the two countries remains on strong ground, he said.

The NZ-China FTA and good bi-literal relationship also contribute to the long-term investment in NZ. Milk NZ will continue to add value to New Zealand premium milk by providing consumer products to the Chinese market .”

Knowledge and capital

As Milk NZ weighs up its floatation and eyes new lands, and Mataura begins processing at its new plant, with some of its production due to be sent to the land of its major investor, there is still debate over the pros and cons of foreign investment in New Zealand’s dairy industry.

But, according to the Asia-New Zealand Foundation, an independent Kiwi non-profit, in an assessment of investment into New Zealand, the new captains of industry have been demonstrating a commitment to business growth and providing knowledge and capital to improve the competitiveness of the businesses.

“Successful investment requires a fit between the investors’ commitment, knowledge and networks; the businesses’ capabilities and resources; and their surroundings [such as] the community and business ecosystem,” it said.

By pursuing this fit, foreign investors have enhanced the connectedness between New Zealand and Asia, while ramping up the development of the local dairy business.


10% of dairy losses caused by tariffs to be offset by USDA plan

An estimated $127 million in direct payments from a dairy-specific financial assistance package provided by USDA is estimated to represent less than 10 per cent of American dairy farmers’ losses caused by the retaliatory tariffs imposed by both Mexico and China.

Since the retaliatory tariffs were announced in late May, milk futures prices have lost over $1.2 billion through December 2018. The price drop resulting from these tariffs has not been gradual – it’s hurting U.S. dairy producers right now and will continue to do so.  Milk prices for the balance of the year are now expected to be $1.10-per-hundredweight lower than were estimated just prior to the imposition of the tariffs on U.S. dairy exports.

A new study by Informa Economics on the impact of the retaliatory dairy tariffs projects dairy farmer income will take a hit of $1.5 billion this year if the tariffs remain in place through the end of 2018.  That’s in addition to $16.6 billion if the tariffs are left in place long-term over the next five years, through 2023. The impact of lost sales to China accounts for most of the losses, accounting for 73 per cent of the total. That sizable decline in farmer incomes comes at a time when low prices and financial losses that dairies have already felt.

Dairy farmers are particularly vulnerable to downward price swings because, unlike crop farmers who harvest once a season, dairy producers harvest and market their product daily and cannot store their product and sell well prices improve. If these loses continue the US will lose more farms.

“We appreciate that USDA has been seeking ways to help producers weather these volatile economic times. The product purchase program and the Trade Promotion Program are important elements of the overall package, and we will continue working with the department to best accomplish our shared goals of supporting dairy farmers’ prices in light of the harm caused by retaliatory tariffs. Although there may be a second direct aid package at the end of the year, dairy producers are greatly disappointed that the farmer aid portion of today’s trade relief package does not adequately address the harm done to dairy

Given today’s other news that the Trump Administration has reached a trade deal with Mexico, we are repeating our request that the administration provide relief to farmers by restoring normal trading conditions so that our product exports to Mexico – as well as to China – are not penalized by retaliatory tariffs. In addition, we believe it’s essential that the administration also pursue the opening of new market access opportunities through trade agreements that expand U.S. dairy exports. Those steps on trade would pay meaningful dividends to our farmers.

Dairy industry, rural banks ask Wisconsin Supreme Court to review stray voltage case

Paul Halderson stands on his Galesville, Wis., dairy farm in this 2005 file photo. Halderson sued Xcel Energy for more than $4 million claiming stray voltage from the Minnesota-based utility’s lines harmed his herd for nearly 20 years. James A. Bowey, Winona Daily News

Wisconsin’s dairy industry and a group of rural banks are asking the state Supreme Court to uphold a jury’s decision to award more than $13 million to a Trempealeau County farmer in what would have been the state’s largest stray voltage settlement.

In August 2017, a jury found that Northern States Power Co., a subsidiary of Xcel Energy, was negligent and failed to follow state regulations, causing more than $4 million in losses for Paul Halderson and his wife, Lyn, who operate a nearly 1,000-cow dairy farm near Galesville.

The Haldersons claimed their herd suffered from illness and decreased milk production for more than a decade because of improperly grounded power lines.

The jury awarded the Haldersons about $4.5 million, finding deliberate violation of statute, which would entitle the Haldersons to triple damages. But Judge Scott Horne later overruled that “wanton and willful” finding on the grounds that Xcel conducted multiple tests on the Halderson farm but failed to find unacceptable levels of stray voltage.

A higher court denied the Haldersons’ appeal, upholding Horne’s decision, saying “the evidence at trial was insufficient for a reasonable jury to find by clear and convincing evidence, that NSP’s conduct was willful, wanton, or reckless.” The appeals court also denied Xcel’s request for a new trial.

The Haldersons are now asking the Supreme Court to review the case, which they say hinges on an issue “of compelling statewide importance.”

They say Xcel’s expert “intentionally violated the applicable rules at every test so as not to find” stray voltage and that the judge introduced concepts of evidence not found in the jury instructions or case law when he dismissed the triple damages award.

Xcel has not responded to the Supreme Court petition but argued before the appeals court that the Haldersons’ cows never came into contact with excessive voltage and that their case relied on a “stunt” by their hired expert.

“We continue to be disappointed in the verdict,” said company spokeswoman Chris Ouellette. “We have to evaluate our next steps and let the process play out.”

In a motion filed Friday, the Dairy Business Association along with Pigeon Falls State Bank and two branches with no relationship to the Haldersons seek to weigh in on the case, saying utilities have “paid lip service to eradicating this scourge but have routinely flouted collaborative rules” to protect dairy farmers.

Utilities will take the appeals court decision “as license to perform inadequate testing” while affected farmers go out of business without the money to afford litigation.

“I think it’s a hugely significant issue in the dairy industry,” said Tim Jacobson, the attorney for the DBA and bank. “For farmers and for lenders who are providing financing to farmers for a whole farm economy.”

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Stray voltage refers to current that leaks from neutral wires into the earth. Animals that come into contact with a grounded object — such as a watering trough — can receive small shocks. This can cause dairy cattle to avoid eating, become stressed and generally produce less milk, according to research from the U.S. Department of Agriculture.

According to the Haldersons’ suit, NSP found excessive voltage in one of their barns beginning in 1996 but failed to report it. In 2011, a consultant hired by the Haldersons found high levels of electricity and concluded it was coming from the utility’s distribution system.

The suit claimed this led to reduced milk production and the loss of $5.8 million in profits before Xcel installed new equipment.

If the Haldersons are granted triple damages, it would be the largest stray voltage damage award in state history, according to the Haldersons’ attorney.

In 2010 a Grant County farmer won a record $5 million settlement against Scenic Rivers Energy Cooperative, and last year the Minnesota Court of Appeals upheld a $9 million verdict against Crow Wing Cooperative Power & Light Co.


Can 10c/litre more save drought-ravaged Australian dairy farms?

Soaring feed costs will force up to a third of NSW and Queensland dairy farmers to quit the industry if significant rain does not arrive to ease eastern Australia’s drought within months, or milk prices don’t rise.

Dairy farmers say the industry badly needs access to more sustainable, quality feed supplies and better farmgate returns to cover feed costs which have doubled in the past few months.

With nervous dairy companies already jockeying to secure enough fresh milk supplies to maintain their market commitments, latest farmer survival rate estimates from Queensland Dairyfarmers Organisation have highlighted the hurt being felt in the wake of big blowouts in grain, hay and silage costs.

QDO is pushing hard for supermarkets to agree to a 10 cent a litre increase in all fresh milk prices – including $1 a litre house brand milk lines – to funnel much needed extra payments back into farmers’ withered feed budgets.

A 10c retail price rise could potentially add an extra $250 million a year to dairy farmer earnings.

QDO claims every litre of milk its members now produce costs them at least 20c more in fodder expenses than they were outlaying three months ago.

That cost increase alone is equivalent to about a third of their total farmgate payments.

Given milk was worth $1.30/litre or more prior to 2011, it seems a pretty fair ask supermarkets to break their $1/litre mindset now when seasonal conditions are so tough for farmers

Other farmer groups and individuals Australia-wide have also been loudly critical of the supermarkets, particularly Coles, for refusing to budge on $1/litre milk, which became the standard discount price for house brands when the retailer initiated its “Down Down” price campaign back in January 2011.

Coles won’t comment on the 10c/litre price lift proposal, but said it had already directed more than $11m to drought affected communities, including $6m-plus which came from funds raised and matched by the retailer at store checkouts.

“We appreciate the drought’s devastating impact on farmers in all sectors – from beef and lamb producers to horticulture, poultry, cropping and dairy,” a company spokesman said.  

“Coles decided the most effective way we can assist farmers affected by drought is to raise and match funds at our checkouts to provide to the Country Women’s Association to help cover farmers’ household expenses.”

However, the dairy sector points out while farmgate returns stagnate, its drought cost hikes are also compounded by other increasing input expenses, particularly labour and energy price rises, which have hit farmers hard.

Worried Norco pays extra

The NSW-based Norco co-operative has responded by announcing a temporary five cents/litre increase to suppliers’ base payments, funded from its own bottom line.

The co-op said its 200 farms in northern NSW and southern Queensland can’t wait any longer for the supermarkets to recognise the seriousness of the cost blowout problem.

Norco’s milk recivals slipped 11 per cent year-on-year in July and August in direct response to feed shortages and rising costs.

The company has also ramped up its counselling services to struggling farmers and has its farm services division working in overdrive to find new fodder supplies after a dry, cold winter zapped pasture feed prospects on Norco farms from the Hunter Valley to Kingaroy in Queensland.

Chairman, Greg McNamara, said Norco began talking to retailers in June about the serious need for better farmgate returns to help them cope with dry conditions, especially in south-east Queensland where 30pc to 40pc of its supplies originate.

We know this will be of direct benefit to help address some … of the rapidly increasing costs of production – Greg McNamara, Norco

“Our base price increase for milk alone will inject approximately $1.8m over a two month period into our members’ businesses,” he said.

“We know this will be of direct benefit to help address some, although not all, of the rapidly increasing costs of production that our farmers have been confronted with.”

With grain prices jumping from $250 a tonne to $500/t in just a few months, he said dairy farmers everywhere had moved into drought survival mode, culling milker numbers to trim feed costs.

Culling cows to save farm

“The lesson we learnt when drought hit in the 2000s was those who culled cows early were more likely to be the farmers who survived,” Mr McNamara said.

“Unless you get paid more to cover your higher feed costs your profitability declines with the more cows you feed in times like this.”

Australian Dairy Farmers director and Wagga Wagga farmer, Simone Jolliffe, said most of Australia’s 5800 milk producers faced tough feed budget decisions in the next three or four months.

Related reading: Dairy farmers agree on mandatory code

While southern Australian farms were generally not, yet, as badly off as those further north, milk producers’ options would centre on borrowing more funds to buy what  good quality grain, or preserved fodder they could get, or selling cows to help pay extra feed costs and to reduce total supplementary feed consumption.

Much would hanging on the success of what grain crops survived the tough winter, and the output from pasture or forage crop growth in spring.

Mrs Jolliffe’s own family’s herd production at Currajugle Holsteins had slipped almost 40pc this year.

“Conditions here got tough during a very wet winter in 2016, then turned into a dry summer-autumn and haven’t improved since,” she said.

Farmer attrition rate grows

QDO executive officer, Eric Danzi, said drought and other costs pressures forced about 6pc of Queensland dairy farmers to leave the industry last year.

He anticipated almost another third could follow this year unless payments improved and seasonal conditions turned around.

That could mean up to 100 Queensland farmers quitting dairying.

Mr Danzi noted major Queensland processor, Parmalat had acknowledged farmers’ cost price squeeze and was promising to pass on the full increase in any retail price rise, however the supermarkets remained uncommitted.

Nobody’s moving unless Coles also agrees to – Eric Danzi, QDO

“I think we’ve got Woolies across the line on this issue, and comments we’ve had from Aldi suggest they will follow, but nobody’s moving unless Coles also agrees to,” he said.

“Coles is the problem.”  

Who’ll move first?

However, Coles officials are politely doubting their rivals’ sincerity, saying if other retailers felt a 10c/l shelf price increase was the right thing to do, what was to stop them making the first move.

Regardless, there has been robust public support Australia-wide for a retail price lift to help farmers at such a critical time.

“Given milk was worth $1.30/litre or more prior to 2011, it seems a pretty fair ask supermarkets to break their $1/litre mindset now when seasonal conditions are so tough for farmers,” Mr Danzi said.

The Federal Agriculture Minister David Littleproud threw his his support behind the 10c/litre campaign last week saying he could could help facilitate a legislated levy as a temporary measure to ensure the money went directly to farmers.

Prime Minister Scott Morrison has been less committed to supporting a government imposed tax,  but he was prepared to hear arguments on milk pricing from the dairy sector and Mr Littleproud.

However, Norco’s Mr McNamara said while the retail milk price rise campaign was “well founded with good intentions”, any increase should not be permanent, not a temporary drought relief measure.

The price rise should be an “embedded increase” flowing through to farmgate milk values, to address the escalating costs of production.


Wisconsin dairy farmers are struggling, but what can be done?

A state where “America’s Dairyland” is emblazoned on license plates, dairy farms are going out of business at an alarming rate. More than 500 farms closed across Wisconsin in 2017, according to the state Department of Agriculture, up 20 percent from the past five years. Mitch Breunig is hoping his farm isn’t one of the next to close. Breunig, a board member for the Professional Dairy Producers of Wisconsin, owns a registered Holstein farm in Roxbury. I talked to him about what Wisconsin farmers are facing, and why everyone should care. This is the edited conversation. 

Explain what dairy farmers and the dairy industry are experiencing right now.
Prices are low, so the margin of what the cost of production is and the price we’re receiving is probably negative on many, many farms right now, and it’s been that way probably since February.

Why are we in this situation?
There’s an abundance of milk. That seems to be the recurring theme. But it’s also that processing isn’t available. Last year Canada stopped taking [Wisconsin-based] Grassland [Dairy Products ultra-filtered] milk and New York milk. We basically grew those markets with the intent to export those products to Canada. And when you turn that off, all of a sudden you’ve got to find a new home for that milk, and it’s a real struggle.

How is the international trade situation affecting farmers here?
They announced we’re going to have tariffs with Mexico, and Mexico is going to [impose a] tariff [on] our cheese. Mexico is the No. 1 importer of Wisconsin dairy products, so to have that market disrupted and have them look for other people to get their products from, that’s a really big deal. We don’t know what the impact of that is, but in the long term, if Mexico buys fewer dairy products, it really affects Wisconsin. We keep talking about Canada. Canada is really not the issue. It’s more like Mexico and China and all these new markets that we’re trying to develop.

The governor announced he’s going to start a dairy task force run by the University of Wisconsin–Madison and the Wisconsin Department of Agriculture, Trade and Consumer Protection. Can that help, or what is it that farmers really need right now?
Until we do something about having too much milk, I don’t know what we’re going to do to change the situation. And yet when you look at a farm as its own unit — I don’t have too much milk on my farm. The way that I’m going to be more profitable is to sell more milk, because as I sell more milk, my cost to produce it probably goes down. It’s that way in any business. If Culver’s sells more ButterBurgers, they make more of a profit. And yet when you look at it collectively, if everybody has more milk, the issue is [that] there’s too much milk. 

What does the general public need to understand about what’s going on here?
Consumers really like dairy products. They eat butter, cheese, ice cream. What they need to understand when buying that milk is the true nutritional value of that product. I mean it’s second to none what they’re being able to buy for $2. So try to find the local brands, what’s manufactured in Wisconsin, and support those farms and understand that we need to sell more of our product. It truly is family farms. It’s families that are struggling right now with these low prices. They’re losing their equity and all the money that they’ve built in their businesses over the years. All of a sudden it’s just going away and they need to either make a huge change or sell out before their equity is gone. When you sell your farm, you sell your house, you sell your livelihood. You sell a lot of things besides just cows and machinery.


Dairy Products Federation warns mandatory code will cost more

The Australian Competition & Consumer Commission recommended the dairy industry introduce a mandatory code of conduct, but milk processors and manufacturing companies warn this would cost the industry rather than improve it.

Australian Dairy Industry Council’s voluntary code of conduct, which was introduced in July last year, already has support from the industry.

The voluntary code provides guidelines for good faith milk supply negotiations between processors and farmers.

Increased industry regulation through a mandatory code would not allow farmers and processors to pivot quickly in response to market forces, Australian Dairy Products Federation president Grant Crothers said.

“Participants along the whole supply chain are already managing cost, compliance and market volatility pressures, we do not need additional regulation,” he said.

“Domestically, energy costs continue to rise, we are paying compliance costs to implement food labelling and quality standards, and dairy exporters are up against high tariff levels and technical trade barriers in trading with our major economic partners.”

The perishable nature of milk and its seasonality means a flexible relationship between all members along the supply chain is needed, Mr Crothers said.

“These relationships have been built over time, without government intervention, through a mutual respect for delivering value across the whole dairy supply chain. There is nothing to indicate that a mandatory code would do anything but open a divide between dairy farmer and processor,” he said.

A mandatory code would add additional costs, such as cost recovery fees and penalties for non-compliance with commission administration requirements, he said.

“It will lead to businesses – both farm sector and processor alike – becoming more risk averse, therefore limiting investment and stifling innovation.”

However, the federation agrees the existing code of practice should be strengthened, taking the findings from the commission’s dairy inquiry into account.

Agriculture and Water Resources Minister David Littleproud weighed into the debate this week, saying the commission’s report identified “market failure”.

“I asked the dairy sector to come to a united position on a response to the report and a mandatory code of conduct for the dairy industry. This has not yet happened,” Mr Littleproud said.

Instead, he suggested a temporary 10 cent levy per litre of milk could give the industry time to come to a united position on structural reform.


Source: The Examiner

CWT Export Assistance Tops 1 Billion Pounds of Milk in 2018

In a major milestone for the farmer-managed export assistance program, Cooperatives Working Together (CWT) has helped its member dairy cooperatives export over 1 billion pounds worth of milk so far in 2018. That sum represents 50 percent of the overall rise in U.S. milk production through August of this year.

To date, 2018 export sales through CWT total 49.64 million pounds of American-type cheeses, 12.96 million pounds of butter (82% milkfat) and 45.70 million pounds of whole milk powder to 34 countries on five continents. These sales are the equivalent of 1.083 billion pounds of milk on a milkfat basis. That figure compares to an estimated total increase in U.S. milk production of 2.095 billion pounds during the first eight months of 2018, compared to the same period last year.

“This is a huge milestone, not just for the members of CWT, but also for the wider U.S. dairy industry,” said Jim Mulhern, president and CEO of NMPF. “CWT’s success at ensuring nutritious dairy products reach customers all over the world demonstrates the importance of dairy cooperatives coming together to build a better economic future for our dairy community.”

Founded in 2002, CWT is a voluntary membership program funded by contributions from NMPF’s member cooperatives and more than 100 individual farmers. The funds raised from the CWT membership fee of $0.04/cwt. help maintain U.S. exports in an increasingly competitive world market.

Mulhern noted that “with milk production rising around the world, as well as in the United States, CWT helps maintain and build market share for our products as we tap into growing consumer demand across the globe for made-in-America dairy products.”

In addition to CWT’s work through the year, this past week, member cooperatives accepted nine offers of export assistance from CWT that helped them sell 963,420 million pounds (437 metric tons) of Cheddar and Monterey Jack cheeses, and 4.26 million pounds (1,933 metric tons) of whole milk powder. The product has been contracted for delivery in Asia, the Middle East and South America for the period from September 2018 through February 2019.

This recent activity reflects a new strategic plan that was approved by the CWT Committee in March to enhance the effectiveness of the program and member export opportunities.

Assisting CWT members through the export assistance program in the long term helps member cooperatives gain and maintain market share, thus expanding the demand for U.S. dairy products and the U.S. farm milk that produces them. This, in turn, positively affects all U.S. dairy farmers by strengthening and maintaining the value of dairy products that directly impact their milk price.

The amounts of dairy products and related milk volumes reflect current contracts for delivery, not completed export volumes. CWT will pay export assistance to the bidders only when export and delivery of the product is verified by the submission of the required documentation.


Source: CWT

Is Canada’s supply management system the cause of disappearing dairy farms in U.S.?

The West Block visits dairy farmers in New York to find out why supply management has become such a key issue for U.S. NAFTA negotiators and if access to Canada will make a difference for some U.S. dairy farms.


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