Archive for Dairy Industry – Page 2

Dairy MPP is delivering in 2018

Driven by improvements made by congress in the Bipartisan Budget Act of 2018 and USDA’s efforts to inform dairy farmers about the enhanced program, as of early July more than 21,000 dairy farm operations had enrolled in the Dairy Margin Protection Program for the 2018 coverage year. More are still putting the final touches on their enrollment applications. Once final enrollment is tallied, more than 50 percent of the licensed dairy operations in the U.S. will be participating. These farmers purchased MPP coverage on 131 billion pounds of milk, representing approximately 60 percent of the U.S. milk supply.

The total number of dairy farms enrolled in MPP for 2018 was up nearly 1,000 farms, or 5 percent, from 2017 enrollment levels. However, while farm enrollment was up over prior-year levels, the amount of covered milk was down 14 billion pounds. The decline in covered milk is likely due to farmers opting to purchase protection as close to 5 million pounds as possible — the average volume of covered milk per farm is slightly higher than 6 million pounds. More important than enrollment levels, however, is how farmers are using the program to protect against the risk of margin declines.

In 2016 and 2017, fewer than 25 percent of participating dairy operations elected buy-up coverage above the catastrophic $4 per hundredweight coverage level. This year, 95 percent of the enrolled dairy operations elected buy-up coverage and many of those farms elected the highest coverage level — $8 per hundredweight. USDA’s flexibility in allowing farmers to finalize coverage options until June 22 contributed to the upturn in buy-up coverage participation. Figure 1 highlights historical MPP enrollment and buy-up participation rates.


Following the enhancements to MPP, USDA made the coverage retroactive to January 2018 for farmers electing to participate. As highlighted in a recent Market Intel, For Some, New MPP Makes Plenty of Cents, which can be found at, MPP triggered payments at the $7 through $8 coverage levels from February through May. As of early July, USDA has made over $155 million in program payments to dairy operations participating in MPP during 2018. The average payment rate through May was $7,400 per dairy operation, or 29 cents per hundredweight.

At the state level, Wisconsin dairy farmers have received $37 million and farmers in the northeast have received more than $30 million, see Figure 2. To receive these and future benefits, dairy farmers across the U.S. paid more than $65 million in premiums and administrative fees — resulting in a current net benefit of more than $91.5 million. This total will get larger as MPP is certain to be triggered in the coming months due to trade-related price declines.

Currently, USDA’s online MPP decision tool projects for margins to remain below $8 per hundredweight through September, meaning dairy farmers should expect to continue receiving program payments for the next few months. While the MPP payments will not make a dairy farmer whole, it does help to offset recent milk price and margin declines experienced in the market.

For example, July Class III milk futures, a function of wholesale cheese prices, have fallen by 14 percent, or $2.30 per hundredweight, since the beginning of June. Because of these price declines, the projected MPP margin for July declined by more than $1.40 per hundredweight. The price decline comes despite strong dairy product exports, tighter American cheese stocks and slower than anticipated growth in U.S. milk production but coincides with increased trade uncertainty related to Chinese and Mexican tariffs on U.S. dairy products.


Not only will MPP continue to make payments in the coming months, but both the House and Senate farm bills include further improvements to the recently enhanced MPP. The conferenced version of MPP is certain to be an improvement over the original program design. Thus, passing a farm bill on-time is critical to ensure the additional MPP enhancements are in place before the 2019 sign-up.

In addition to the farm bill changes in the dairy title, the Farm Bureau-developed Dairy Revenue Protection insurance product is expected to be available in the coming months, providing dairy farmers another tool in the risk management toolbox. Combined, the enhanced MPP, Dairy Revenue Protection and other risk management tools will provide a much more robust set of risk management tools for dairy farmers going forward.

In addition to these new and retooled dairy safety net programs, USDA also recently announced plans to provide $12 billion in assistance to farmers impacted by trade disruptions. The three-part plan includes a Market Facilitation Program to assist producers through payments to address the impact of tariffs, a Food Purchase and Distribution Program to buy and distribute perishable commodities and a Trade Promotion Program to aid producers in finding new markets for U.S. agricultural exports. The $12 billion package of agricultural assistance announced by the administration will provide temporary relief to dairy farmers who are on the front lines of recent trade disputes.

Combining all of the instruments, even more help is on the way for the dairy industry.


US dairy exports struggle amid a tariff hit environment

The US dairy industry is struggling under the weight of tariff measures in Mexico and China, with the full industry implications only just starting to come to light.Since the end of May 2018, tariff measures of 20 to 25 percent have been imposed on US cheeses going to Mexico, while tariffs of 25 percent have been put in place on US dairy products going to China, in addition to the 8-12 percent tariffs that China already imposed on dairy products from most suppliers around the world.

Speaking to FoodIngredientsFirst, Jaime Castaneda, Senior Vice President, Strategic Initiatives and Trade Policy Executive Director at the National Milk Producers Federation and US Dairy Export Council, accepts that no figures are out yet but admits that dairy farmers are already feeling the pinch. “Anecdotally, I can only tell you that some shipments and orders have been canceled or that companies are starting to say that they will cover some of the costs of the new tariffs, or they will lose the customer,” he notes.

“We certainly have been severely impacted by these tariffs and we have our two larger markets that have been affected. China is obviously a growing market and I’m sure that many of the companies are having to make concessions but that can only be done temporarily; so there is a point at which all of our exports will get hit,” says Castaneda.

Last week, the US Department of Agriculture (USDA) announced that it is preparing a US$12 billion economic assistance program designed to help dairy farmers and other agricultural producers suffering from the effects of retaliatory tariffs imposed by Mexico, China and other key trading partners. Recent NMPF economic estimates indicate that the tariffs will cost US dairy farmers US$1.8 billion just through the remainder of this year, based on the decline in future milk prices since the retaliatory tariffs were implemented.

NMPF has been engaged in ongoing discussions with USDA about how to reduce the economic harm caused by the trade disagreements between the US and other nations. The new plan will use USDA’s authority to help farmers through a combination of direct payments to farmers, product purchases for distribution to feeding programs, and additional export development assistance. Further details about the exact nature of the relief measures will be unveiled later in the summer, USDA officials have said.

Castaneda welcomes the move but stresses that it is too early to comment in detail until specific numbers are disclosed. “We will wait and see what it means for dairy farmers and traders. We don’t know at this stage how much is going be divided out for dairy farmers,” he notes.

“Farmers need the assistance because [this occurred] just when they started to see that the market was improving, as was clear from the futures on the Chicago Commodities Exchange for cheese and powder,” he points out.

“Before the tariffs were announced (last fall), they were looking good and people were confident that they were going to recover and start making money after a couple of years of that not being the case. Now all of that has vanished. I know many farms who called it quits. They were hanging in there because of the futures’ higher prices, but for some that stopped when the prices decreased significantly,” he claims.

The Mexico situation accounts for most of the lobbying efforts of US dairy to date as the impact is so vast and was the first retaliation to strike the industry. Cheese accounts for approximately US$400 million of the US$1.2 billion in dairy sales to the country as a whole. Since a Free Trade agreement is in place with the country, no tariffs existed before the recent spat.

“We have focused a lot of our lobbying efforts on Mexico to finish the NAFTA negotiations. That is critical. If you are paying 25 percent on exporting to Mexico, it is hurting everybody in the US. Even for those who are not selling cheese, it is critical to the pricing for farmers. We are looking to conclude the negotiations and make sure that we open markets in Canada and save what we have with Mexico,” he says.

“China is probably going to take a little longer. So we will see what will happen, but we will continue to ask the administration to make a deal with the Chinese and ask the Chinese themselves to remove us from their retaliatory list. So we have two angles of asking for change,” Castaneda adds.

The dairy implications are huge for a relatively new large-scale exporter. “The US went from a country that exported very little 20 years ago to being one of the most significant sellers in the world. If you look at it by country, rather than by region, [i.e., the EU bloc], we are the largest exporter of several products including Skim milk powder and depending on the year cheese too. This is affecting not only producers who have seen their prices go down even further but also exporters, traders and manufacturers who have worked extremely hard to gain markets in China and Mexico,” he notes.

But can the US domestic market make up for the shortfall in exports by taking up some of the potential overcapacity? Castaneda admits that there will be a danger of cutting prices and flooding the US dairy market.

“Certainly if there is no other market we will have to go somewhere. There are a number of different avenues. I don’t know where they are going to go. Most people are trying to maintain the relationships that they have developed,” he says. “That may not happen all the time, but it is what people are trying. In some cases, there may be movement from some of the orders that have been canceled to try to find a home somewhere else. So normally when you do that in a short period of time you have to do it as a discount, which is not ideal,” Castaneda adds.

Either way, with tensions having eased between President Trump and the EU on potential tariffs of European products, it does not look like US imports of dairy products from the bloc will go down as a result.

Innovation with US dairy ingredients is not slowing down amid these unpredictable times. At the IFT Food Expo 2018, USDEC presented two prototypes that bring dairy protein benefits to life in on-the-go applications: Lemon Ginger Ice Pops with Whey Protein and a Savory Asian Granola with Whey Permeate/Protein Crisps.

In a video interview with FoodIngredientsFirst, Vikki Nicholson at USDEC explains: “We see opportunities in a multitude of applications. Beverages are still hot, snacking is a great opportunity. We also see unique opportunities in bakery and desserts for dairy proteins. For example, we are presenting an Asian inspired high protein granola, with whey protein crisps. Also, it has the flavor profiles of sriracha and soy in order to help give a nice snack, especially for adults, which allows you to engage in having a nice handheld snack that is not heavy. Granola gives a different spin to really show how you can expand on dairy ingredients within the snacking category.”


Source: Food Ingredients 1st

A crisis for dairy farms threatens open space

For the past two years federal and state governments have been accelerating their efforts to help keep farms in business. The efforts have taken several forms including support of local and regional markets to buy what the farms produce. The most innovative was something that farmers used to take for granted, encouragement to ensure that the next generation could take over with some hope of success as the average age of a farmer continued to climb.

It is too early to say whether these market-based approaches or the support for young farmers, both those born on the farm and those attracted to the profession, will have much of an effect in a timely manner.

Instead, we have learned in the past days that forces beyond those governmental efforts are having effects that unless met quickly and decisively could be irreversible.

While this might not appear to be of concern to those who are not in the industry, they have to keep in mind that farms are in many places the last line against development, the best way to ensure open space in a region where each week seems to bring more stories about more developments with hundreds of houses all on land that would be open no more.

The immediate crisis facing farmers is the low price and low demand for milk that has many, especially in Sullivan County, facing a day that nobody ever thought would arrive. Unless things change, some time this summer many farms might find out that nobody wants to buy their milk.

Michelle Lipari, agriculture educator for Cornell Cooperative Extension in Sullivan County, explained in a story in the Times Herald-Record that the whole dairy industry is suffering from low prices and surplus milk.

At “pretty much all these plants and cooperatives there is too much milk and not enough demand, which is what you’re seeing with a lot of the other cooperatives also having to let farmers go.”

One traditional source of relief used to be the federal farm bill which this time around has been riddled with policies that the Trump Administration and Republicans in Congress, including Rep. John Faso of Kinderhook, promoted to the detriment of farms in the Hudson Valley.

Rep. Sean Patrick Maloney, D-Cold Spring, explained why he voted against the bill offering a long list of harmful provisions including inadequate funding for the young farmer program and for programs that helped farmers develop specialty crops to diversify as well as reductions in crop insurance and a lack of support for research needed if farms are going to change in the future.

That fight will continue in Washington. In the meantime, those who value the job that farms do preserving open space need to encourage state efforts to both help dairy farms diversify to stay in business and to purchase development rights on land that now appears more likely to go on the market.

The best way to keep open land open is still to keep it active as a farm. But if the market is moving against that, the state will need to start spending much more for such preservation.


Source: Record Online

NJ dairy farms fighting for survival against milk price control

At the end of the 20th century there were more than 200 commercial dairy farms operating in the Garden State. Not anymore.

“We’re down to 50 dairies. We have 5,500 cows in the state,” said state Agriculture Secretary Doug Fisher.

“We’ve lost some dairy operations in the last several years due to the price being paid for milk. This is the 4th year in a row that farmers are receiving less money for their milk than it costs to produce it.”

Fisher points out dairy farms are an important part of Jersey’s agricultural industry.

“It’s still big business. It’s $22 million of revenue just for the milk alone to our farmers in New Jersey; 119 million pounds of milk production in our state.”

Fisher said the dairy farms that are left are doing many things to help bolster the bottom line, including offering consumers the opportunity to buy Jersey fresh dairy products locally at their own facilities.

“We have for instance the Red Barn milk company in Hunterdon County. Last year they started selling the first Jersey Fresh ice cream, strictly Jersey milk.”

Fisher noted Fulper Farm in Lambertville offers a variety of products “like fresh mozzarella, yogurt, ricotta cheese, farmhouse cheddar and kefir. They even have folks come onto the farm as an agri-tourism adventure.”

U.S. Agriculture data shows farmers spend $1.92 for each gallon of milk they produce, but only collect about $1.32 when it’s sold to processing companies

Fisher pointed out “it’s not just in New Jersey though, it national.”

He explained the current milk pricing formula created by the federal government is “a hodgepodge of rules and regulations that are put together. In many ways the formulas are old fashioned, when milk couldn’t travel as far, and these rules definitely need to be restructured.”

Nationally the U.S. Department of Agriculture says there are 40,219 dairy farms across the country, down from 650,000 in 1970.


How The Trade War Is Impacting The Mass. Dairy Industry

Starting in September, U.S. farmers can apply for the first payments of a $12 billion subsidy program designed to protect them from a growing trade war between the U.S. and several other nations.

The European Union, Canada, China and others imposed retaliatory taxes — many of which target agricultural businesses in the U.S. — after President Trump instituted tariffs on imports of steel, aluminum and Chinese goods.

Mark Duffy is the director at Agri-Mark Family Dairy Farms in Mass., the co-op best known for making Cabot cheese. He said while he appreciates the federal government is concerned about the agricultural industry, he is worried about the long-lasting impact this trade war will have on the diary industry.

“It’s already had some effect on our cooperative as far as sales, and I share the concern that if it continues long-term that we will lose customers and we will lose those [international] relationships,” said Duffy.

Duffy said he feels the agricultural industry has been singled out.

“We don’t want to be pawns or be used to address an issue that we did not cause and we cannot remedy,” said Duffy.


Wisconsin farmers struggling to stay in business

Farmers from every background met Sunday in Stratford to talk about the effects that they’re seeing on their farms.

“The agricultural sector is really struggling right now,” said crop farmer Michael Tauschek.

It’s the same message from most local Wisconsin farmers.

“We’ve lost 500 dairy farms since 2017 and we’re on track to lose over 500 in 2018. In the last 5 years we’ve lost 20 percent of our dairy farms,” Tauschek added.

That’s why members from the Marathon County chapter of the Wisconsin farmers union are meeting to discuss what they can do to take action.

“In terms of dairy there has been no consistency in the milk prices. I mean they’re up down but you know they’ve been consistently down for the past three years. You know we typically have up and down cycles but we’re not getting the up cycles,” said local dairy farmer Jim Briggs.

Some farmers believe these changes are the results of political changes.

“Most of it is the tariffs and the uncertainty of what is going to happen with the tariffs,” Tauschek mentioned

“We’re getting paid 1980’s prices for our milk virtually. But nothing else fuel, gasoline, equipment, are we paying 1980’s prices for. You can’t do it, there’s no stability, there’s no profit in it right now,” added Briggs.

For farmers who are looking for options on what to do, you shouldn’t do this alone, but rather join with others also struggling.

“If you’re not at the table you’re probably going to be a part of the meal. So I think a lot of farmers, if they’re out there listening maybe you need to join an organization that looks out for the average small family farm and maybe we can stop this erosion that’s going on in the dairy industry,” said Tauschek

Dairy consumers can help too. Buying the product is just as important.

“Dairy is a consumer driven market and the consumers really have the power to change it, and make a difference,” said Briggs.


Source: WSAW7

Australian dairy farmers uniting to form co-op

Mr Hawken said it was evident from discussions UWS has had with both processors and dairy farmers in the past three months, that the group needed to formalise its position.

United We Stand farmers are in the process of legally forming their own co-operative after receiving overwhelming support from the dairying community.

The group has formally elected a committee, which includes chair Marshall Jacobs (Rochester), secretary Cheryl Hawken (Bamawm), spokesman Steve Hawken (Bamawm) and directors Scott Somerville (Timmering), Chris Gamble (Bamawm) and Dehne Vinnicombe (Calivil).

Mr Hawken said it was evident from discussions UWS has had with both processors and dairy farmers in the past three months, that the group needed to formalise its position.

‘‘We have had so much support from the dairy farming community but we now have to do our due diligence and formalise things so we can be taken seriously,’’ he said.

‘‘This isn’t a fly-by-night thing — we are committed to the future of the industry.

‘‘We are offering a glimmer of hope. We are not here for short-term gain — we are in this for the long-term and are setting ourselves up accordingly.’’

Three months ago the group called for expressions of interest from dairy suppliers interested in pooling their milk, and the organising committee’s phones have not stopped ringing since.

Calls have been received from farmers right across the country milking anything from 50 cows up to large herds.

UWS representatives have even spoken to a large group of farmers at Korumburra in south Gippsland.

‘‘It has become evident to us that it doesn’t matter if you are milking 50 cows or 500, everyone has the same problem and that is we need to be paid what our product is worth,’’ Mr Hawken said.

He said they had all had calls from farmers worried about financially being able to pay for the grain and hay they were currently feeding their cows, let alone making it to the first irrigation in spring.

He said milk volumes were in real danger of decreasing even further this year.

‘‘Processors should beware they may not get the milk volumes they are expecting — especially if conditions stay the way they are, production could be down 10 to 20 per cent.’’

Mr Hawken said the Murray Goulburn debacle in 2016 had been a real catalyst for change.

‘‘Processors in Australia have a proven history of paying their suppliers as little as possible for as long as they can.

‘‘Shifting processors will not change the price but the hole in the factory we leave behind will.

‘‘As farmers we need to remember we do have some power — without milk going through their stainless steel, processors don’t have a business.’’


Source: Country News

Sullivan County dairy farms get extension from milk broker

The cows and farmers at several Sullivan County dairy farms will remain employed for at least a few more months, thanks to a recent contract extension by a Connecticut milk broker.

Marcus Dairy Inc. plans to continue buying milk produced by the farms until the fall, according to Daniel Diehl, who helps run his family’s farm in Callicoon with his uncle, Jack Diehl.

“Right now, it’s just at a standstill,” Daniel Diehl said.

The Diehl farm is one of six dairy farms in the county notified by the milk broker in late May that it would no longer purchase their product.

The initial deadline to find another milk buyer was June 30, but the farms previously received extensions through July.

The Diehl farm has been doing business with Marcus Dairy for about 20 years.

The other farms affected by Marcus Dairy’s decision are Diehl Homestead Farm in Callicoon, which is run by Jack Diehl’s nephew, Adam; Earl Myers Century Farm in Jeffersonville; Weissmann Dairy Farm in Callicoon; Dan Peters Farm in North Branch; and Kays Farm in Callicoon, according to Melinda Meddaugh, agriculture and food systems team leader for Cornell Cooperative Extension Sullivan County.

Weissmann Dairy Farm sold its dairy cows last month.

The farms are experiencing the effects of an industry-wide problem. Too much supply and falling demand have forced brokers to let farmers go, which has a ripple effect on the other industries that make dairy farming possible.

Cornell Cooperative Extension Sullivan County is working with a consultant funded by the county’s industrial development agency to find short- and long-term solutions for these dairy farms to sell their milk.

U.S. Rep. John Faso is trying to help as well by making calls to dairy processors in the region, but nothing has come through yet.

Daniel Diehl is hopeful of finding a solution, but noted that another few months isn’t a lot of time.

“It’s just pretty much waiting at this point, finding something different,” he said. “Nothing’s really come up, unfortunately.”



In the Australian dairy industry fortune favours the bold, as Peter Skene discovers

Peter Skene has changed the way Australian Dairy Farms Group operates.

The dairy industry has always been a difficult game unless you know how to milk an opportunity. Australian Dairy Farms Group’s CEO Peter Skene has put in place a bold strategy.

Thanks to popular media, there is a common belief in Australia that milk prices are controlled, and kept low, by the supermarket chains. Dairy farmers suffer, legend has it, because major players Coles and Woolworths are fighting an endless price war and the biggest and best indicator of price, for the supermarkets, is milk. 

However, this is far from the truth – in Victoria at least – explains Australian Dairy Farms Group CEO and director Peter Skene. The dairy industry in Australia’s biggest milk-producing state is, in fact, similar to the oil industry in the way fortunes ebb and flow according to international stimuli. 

The biggest driver of milk prices at farm level is the global milk price, Skene says. This is particularly true for Victorian dairy farmers who produce six billion of Australia’s nine billion litres of milk annually and who export – or realise an export parity price for – 60 to 70 per cent of their product. 

In a territory where the population consumes 100 per cent of what dairy farmers produce, supermarkets likely have a noticeable influence on milk prices. But in the export countries, that’s simply not the case. 

“If there’s a slight increase in production in New Zealand, Australia, the US or European Union, without any change in demand, there will be a reduction in price,” Skene says, describing the typical result of a glut in any market. 

“There is a continuous relationship between price and demand, but this industry is unique as it is in a situation [where] it takes about two years to build up a herd, or a year to decrease it. 

“So, when milk prices are high, it encourages more farmers to grow their herd, perhaps from 350 cows to 600 cows. They also feed the cows more grain, which results in greater milk production – one kilo of grain generally equals a kilo of milk. When prices are high it takes two years for supply to catch up to demand.” 

Prices shot through the roof when China began consuming more dairy products inside the last decade, so all five Australian export territories increased production. A few years later the world was producing too much milk, which brought the price back to a natural floor at which it has sat for three or four years. This has made life very difficult indeed for dairy farmers and dairy businesses. 

“Over the last couple of years, the cost of production on the farm, for the farmers, is not far different from the income they were earning for their milk,” Skene says.

“But sometimes, farmers don’t take a rational look at their return on capital because farming is simply their way of life.” 

In this flat, uninspiring market, Australian Dairy Farms Group saw its share price more than double in a single week (in late March 2018). How could such positive movement have occurred in an environment of doom and gloom? Easy, Skene says – the business simply developed an entirely new strategy. 

A long career in the dairy industry

Skene, perhaps unsurprisingly, is a man of the land. He was born in Camperdown, south­western Victoria, a rich dairy region that produces 23 per cent of Australia’s milk, or around two billion litres annually. 

His father worked at the Camperdown Cheese and Butter company for 50 years and Skene’s first job was in the same factory, sweeping floors and doing odd jobs, before moving to a full-time role with the same company, which became part of Bonlac Foods (which, at the time, boasted 40 per cent market share of all dairy in Australia). The Camperdown dairy factory closed in 2000, after 110 years of manufacturing on a massive 15-acre site. (The small town was without a dairy for 10 years, until Skene founded Camperdown Dairy Company in 2010.) 

As he learned the art of cheese, butter and powder making, Skene sought education, including a diploma and degree in food science and dairy technology from the University of Melbourne, then a commerce degree from Deakin University. In the meantime, he was promoted to production supervisor then production manager, factory manager and then into a head office sales and commercial role. 

“I left the dairy industry briefly and went to George Weston Foods,” he says. 

“I was the general manager of Weston Milling. That was very similar to dairy, only the farmers supplied grain rather than milk. I then returned to the industry as general manager at King Island Company just after it floated on the ASX.” 

“We decided to convert our farms to organic, then we looked at all of the different products we could produce.

What he’d been learning throughout his career was not only how various types of food are processed, but also how the market itself operates. He was absorbing knowledge about the levers that could be pulled in order to create various effects. This would come in handy when he found himself in charge of Australian Dairy Farms Group, as would knowledge gained from the intensive two-month, full-time executive course he completed at Harvard University after leaving King Island Company, and other executive education from both Melbourne and Stanford universities. 

“I obtained first-hand knowledge of the dairy industry by making the products,” Skene says. “I qualified in management both on the job and through further education. Plus, I also had a scientific understanding of dairy products through further education.” 

When shareholders of Murray Goulburn voted to sell its assets to Canadian dairy business Saputo, it was a moment of truth for the dairy industry. If what was once the nation’s largest dairy business couldn’t successfully navigate the competitive landscape, what hope was there for the rest of the industry? 

“If we didn’t make a strategic change, if we kept on going along the same road we’d been travelling, Australian Dairy Farms Group would have struggled to make sustainable financial returns,” Skene says. “We would have had to embark on an acquisition program to gain scale that, by itself, may never have achieved optimised returns for shareholders. In 2012 and 2013, everyone said the world was going to run out of dairy because of [demand in] China, but that didn’t happen. 

“What happened instead was global oversupply because everyone believed that story. Australian Dairy Farms Group was now facing a very stiff head wind to make money and a competitive landscape very different to that contemplated when entering the dairy industry.” 

Organic farming comes of age

Skene and the board’s solution was simple – as an idea, at least. The business would abandon traditional dairy farming and instead adopt organic methods. It’s a strategy that would have had dairy farmers stomping angrily on their Akubra hats even just five years ago, but today it makes a lot of sense. 

“The organic market is very interesting,” Skene says. “It’s a market that five to 10 years ago was very small and very niche. However, now it’s growing quite considerably and while not becoming mainstream is getting some decent volume in the marketplace. It’s a space that’s very attractive to us because of our size, but is too small to be attractive to the larger players in the industry.” 

Larger organisations face numerous barriers to entry, including the fact that individual farmers from whom they source their milk may not be interested in converting to organic farming methods. Such a conversion often means a reduction in milk output, greater expense over the one- to three-year period in which the conversion is carried out and, of course, the simple fact that dairy farmers on family-owned farms like to do things the way they always have. 

However, this was not an issue at Australian Dairy Farms Group, where all six Victorian farms are owned by the business and run by managers employed by the group. The business, which owns the Camperdown Dairy Company, runs 3660 head of cattle and produces almost 18 million litres of milk annually. 

Rolling out new systems into its own farms would not be vastly different to the way a leadership group in any organisation might introduce change into various outlets, offices or departments. 

“We studied the organic industry supply chain from consumers to organic diary farms.”

“We studied the organic dairy industry supply chain from consumers to organic dairy farms,” Skene says. “We realised the current market supply chain includes farms all over Victoria and inbound logistics would be very expensive. After having a good look at that model, we thought we could do it much better. 

“We decided to convert our farms to organic, then we looked at all of the different products we could produce. Milk is an amazing raw material – it can become anything from cheese, butter, yoghurt, bottled milk, UHT milks and milk powders to infant formula. Where along that chain were the best opportunities in terms of organic produce? Organic infant formula gives you the absolute best return by a considerable margin from each litre of milk compared to anything else in the market. Plus, there’s only one material player in the Australian organic infant formula market, which is Bellamy’s.” 

Unlike most dairy producers, Bellamy’s has been a share market darling, but the business makes no secret of the fact it imports much of its milk ingredients from Europe. Australian Dairy Farms Group could go one step better and produce organic milk onshore. 

Over a period of six to 12 months, Skene and his senior management consulted with their farm managers and staff, explaining the reasoning behind the shift to organics. They received enormous interest and support. Rather than the business forcing change onto employees, its farm managers actively assisted the change program. The strategic shift to organic milk production was announced to the market in March, along with a feasibility study on organic infant formula. 

“The share market has been very happy with our direction,” Skene says. “The way I look at it is that at this point in time we’re a bottler of milk. We produce butter and we produce yoghurt and we own farms. In each of those three categories, in each state, there would be at least 10 to 12 competitors. We’re in a highly competitive market where it’s very hard to differentiate.” 

Breaking from the herd

Skene’s willingness to adapt Australian Dairy Farms Group’s focus to an evolving market, which is increasingly health conscious and mindful of the production process, has proven crucial. Not content with this success, Skene also has plans to expand the business further, which is where the bold move into infant formula comes into play. 

“When you go into organics, the trust factor is [already] there. If you go into infant formula, the trust factor is essential because it’s what people are going to feed to their babies,” Skene says. 

“Subject to final feasibility outcomes, we’re moving this business from being focused on milk, butter and yoghurt to one that provides nutrition for newborns. 

“We’ll have a completely different focus in an area where product is quite scarce and where differentiation is absolutely possible and very powerful. This will be market-driven rather than supply-driven and will include building brand equity based on trust, providence and quality.” 

In the newborn formula business, Skene is hoping to find new fortunes for Australian Dairy Farms Group. It wouldn’t be the first time a pivot pays off for Skene, and don’t bet the farm on it being the last.


Source: InTheBlack

Virginia is losing dairy farms at an alarming rate

The state’s dairy farms are leaving the industry at an alarming rate.

“There were about 650 Grade-A dairy permits this time last year, and now there are only 550,” noted Tony Banks, a Virginia Farm Bureau Federation commodity marketing specialist who tracks dairy trends. “Unfortunately, the losses will probably continue well into the second half of the year.”

He noted that factors affecting the decline in dairy farms include decreased consumer demand for fluid milk; an oversupply of milk that outpaces consumer demand for dairy products; and the cost of production for farmers, especially labor, machinery repairs, health insurance and regulatory compliance costs.

Industry analysts are concerned that marketplace changes are moving dairy farms one step closer to vertical integration—a similar path taken by poultry and pork producers. Banks said large retailers are opening their own dairy processing plants and contracting directly with fewer, but larger dairy farms.

“At the same time, other retailers and processors are changing milk suppliers, which has caused additional market disruption and price uncertainty here in the South,” he explained. “Add in potential negative demand impacts on American dairy because of U.S. trade negotiations with NAFTA, Europe and China, and the immediate future for U.S. farm milk prices is very discouraging.”

Dr. Jewel Bronaugh, Virginia Department of Agriculture and Consumer Services Commissioner, said she has been concerned for some time about the loss of dairies in Virginia, and the loss continues. “Milk has been in the top five agricultural commodities for years. Production is relatively stable, but the loss of individual farms is disturbing on many levels, including the potential loss of tååhat valuable farmland,” Bronaugh shared.

The leading dairy counties in Virginia are Rockingham, Franklin, Pittsylvania, Augusta and Washington.

Jeremy Daubert, the dairy science agent for Virginia Cooperative Extension in Rockingham County, recently told the Shenandoah County Board of Supervisors that Virginia lost about 4,000 dairy cows between 2014 and 2016 and has fallen from 23rd to 24th in the U.S. milk production rankings.


Source: Augusta Free Press

Growth in dairy: World to consume extra 304m tonnes of milk by 2030

The world will be consuming an extra 304 million tonnes of milk (295 billion litres) per year by 2030 as global population increases, according to a new report.

Between now and 2030, worldwide demand growth for milk and milk products will heavily increase due to population growth, growing prosperity and worldwide dairy investment.

Today, about 876 million tonnes of milk is produced worldwide, with Oceania, EU and India among the leading producers.

But according to the International Farm Comparison Network (IFCN) Dairy Research Network, more milk will be needed on the market.

The dynamics of structural changes of dairy farms internationally will continue and farms will intensify their farming systems, according to IFCN Managing Director, Dr Torsten Hemme.

Dr Hemme said that by 2030, forecasts show an increase in milk production and demand in total by 35%.

Fewer, but larger farms

IFCN have created this projection using consumption and population trends. In order to satisfy this growing demand, the global dairy herd is expected to increase by 12%, or 417 million more dairy animals, with milk yields improving to fill the gap.

Milk production is expected to increase across the globe, but south Asia is expected to see the largest rise (up 64%). The increase in Western Europe is expected to be a more modest 14%.

Forecasts show that there will be fewer farms but larger farm sizes in 2030. In the next 13 years, 14 million dairy farms will close down to a world total of 104 million.

This indicates the ongoing consolidation process as fewer farms will produce a greater amount of milk. Only in Africa will a significant number of new dairy farms emerge (+9.8%), mainly driven by the population growth accompanied by new smallholder farmers.

At the global level average farm size will expand to 4 head / farm, which corresponds to a global increase of 29% in average farm sizes.


Source: Farming UK

American farmers plead for better milk prices

The voices speaking out Tuesday on behalf of dairy farmers were loud and clear: low milk prices are making it difficult to survive.

One by one, farmers and others shared stories and woes of the industry at the Dairy Farm Family Crisis Hearing, held at the local fire hall.

“Give these farmers a fair price for their milk,” said Arden Tewksbury, general manager of Progressive Agriculture Organization.

He blamed politicians for allowing the demise of dairy farming, particularly the small farms.

“Everything that is good for dairy farming they get rid of,” he said.

Tewksbury and others also blamed the dairy cooperatives.

Cooperatives are businesses owned, operated and controlled by dairy farmers who are meant to benefit from its services, sharing in profits in proportion to the volume of milk they market through the cooperative.

Gerald Carlin, a former dairy farmer, said it hasn’t worked out that way.

Dairy farmers, he said, continue to lose everything, including hope.

“Cooperatives aren’t standardized across the nation,” said Judy Oliver, a lifelong dairy farmer. “We don’t know which ones are better for farmers.”

Donny Rovenolt, owner of a farm equipment business in Watsontown, said he has seen first-hand how dairy farmers are struggling.

“I am really concerned about small dairy farmers,” said Rovenolt, of Rovendale Ag & Barn Inc. “Every day, we are losing more farmers.”

He said he increasingly finds himself extending credit to farmers who otherwise cannot afford buying equipment.

Brenda Cochran, president of Farm Women United, said farmers must unite to fight for reasonable milk prices.

“You’ve got to be able to make money at what you are doing,” Oliver said.

Tewksbury noted a small percentage of dairy farmers produce the majority of the milk consumed by the public.

Various regulations over the years have ended up hurting dairy farmers.

“Our elected officials have a lot of blood on their hands for allowing the demise of dairy farming,” he said.

Carlin said dairy farmers are ignored by their elected officials and are up against the forces of government and lobbyists who are not looking out for their best interests.

Also addressing the hearing was Sally Fallon Morell, president of the Weston A. Price Foundation and

She called for the increased sales of unpasteurized, or raw, milk.

She noted how dairy farmers such as she and her husband produce raw milk to turn a profit.

Morell touted the healthy benefits of raw milk and said pasteurization removes many of the nutrients from milk.

“Every single vitamin is reduced,” she said.

But raw milk has its critics.

The U.S. Centers for Disease Control and Prevention report that raw milk can carry harmful bacteria and other germs that can cause illnesses or even prove to be fatal.

Morell boldly predicted that people will be drinking nothing but raw milk in 20 years.

Raw milk sales are legal on the farm and in retail stores in Pennsylvania. But many other states outlaw its sales.


Source: Sun-Gazette

Western Australia dairy farmers to feel effects of live export ban

WAFarmers dairy section president Michael Partridge and WAFarmers president Tony York.

WAFarmers president Tony York has warned dairy farmers they will not escape the fallout from a live export ban or crippling over-regulation.

Speaking in Busselton at the WAFarmers annual dairy conference yesterday, Mr York said though the live export problems were focused on sheep, there would be ramifications for other industries if there was a ban.

They included the industry becoming over-regulated to the point it stopped exporters from operating.

“Dairy farmers are not directly involved to a great extent in the live cattle trade, but there will be possible ramifications if things are drastically changed in the live sheep trade,” he said.

“There are a few cattle that go out on those boats, on pretty well every voyage, from Fremantle.

“There is always the concern if the live trade, particularly in cattle, from the north is severely impacted, then that will come back and affect beef markets (including culled dairy cattle) too.

“There will be consequences depending on how this situation evolves.”

Separately, all three major dairy processors operating in WA, Parmalat-owed Harvey Fresh, Lion and Brownes Dairy, said their supply and demand was expected to be reasonably balanced this year.

This was in sharp contrast to 2017 when there was oversupply and three Harvey Fresh suppliers were at threat of losing their supply contracts, but eventually had these renewed.

WAFarmers dairy section president Michael Partridge said the investment by Brownes was a major factor in achieving the industry balance.

“Things were already getting pretty close to being in sync after years of overproduction, but recent investment by Brownes in cheese processing will also provide a big advantage,” he said. Mr Partridge said another contributor to supply and demand being in sync was the late arrivals of autumn rains meaning there was less pasture available, reducing excess milk production during winter and spring.

Brownes Dairy managing director Tony Girgis said the Brunswick Cheese factory was on track to start commercially producing by early September.

Agriculture Minister Alannah MacTiernan, who opened the conference, announced a two-year $200,000 grant to help the farmer-levy funded Western Dairy strengthen and grow the WA dairy industry.

The funding would be used to attract co-investment in dairy research and development, to capture milk processing and export opportunities, thereby building a long-term sustainable industry.


Source: The West Australian

No-deal Brexit would cause severe dairy shortages in UK

Tighter supplies and significant price hikes for dairy staples such as butter, cheese and yoghurt have been forecast for Britain if the country crashes out of the EU next March.

A London School of Economics (LSE) report, which was commissioned by the dairy processor Arla Foods, has warned that the UK will face severe dairy shortages if a Brexit deal is not secured.

Britain is a net importer of dairy produce and depends on supplies primarily from Ireland, Denmark, Holland, Germany and France for everyday items such as cheddar cheese and butter.

However, the report warns that tariffs of between 41pc and 74pc will be imposed on dairy produce if EU-UK trade reverts to WTO rules.

Reacting to the findings of the report, Ash Amirahmadi, the UK managing director of Arla Foods, warned of serious implications for both the supply and price of dairy products.

“Most likely we would see shortages of products and a sharp rise in prices, turning everyday staples like butter, yoghurts, cheese and infant formula, into occasional luxuries. Speciality cheeses, where there are currently limited options for production, may become very scarce,” Mr Amirahmadi predicted.

While a no-deal Brexit could represent an expansion opportunity for UK-based dairy processors, Mr Amirahmadi cautioned that Britain would struggle to fill the supply shortfall for at least three to four years.

Ireland is a major supplier of dairy produce to Britain, with butter, powders and various cheddar cheese brands accounting for the bulk of the exports.


Label change for plant-based “milk” could boost dairy industry

As consumers around the globe increasingly turn to plant-derived options for drinks what used to come from lactating animals, the Food and Drug Administration is looking to offer an assist to dairy farmers.

FDA Commissioner Scott Gottlieb is making the case for banning the word “milk” from the labels of plant-based products, citing consumer confusion.

“One area that needs greater clarity — and which has been the subject of much discussion of late — is the wide variety of plant-based foods that are being positioned in the marketplace as substitutes for standardized dairy products,” Gottlieb said on Thursday, while noting “a proliferation of products made from soy, almond or rice calling themselves milk.”

Saying the products vary widely in nutritional content, the commissioner, who’s a physician, listed cases of young children fed rice-based drinks being stricken with kwashiorkor, a severe form of protein malnutrition. Another toddler has been diagnosed with rickets, a disease caused by vitamin D deficiency, after drinking a soy alternative instead of cow’s milk.

The commissioner’s view is in line with that of the American Dairy Association, which offers a cautionary take on plant-based alternatives on its website, “While true milk comes from an animal and contains the natural sugar lactose, there are other ‘milks’ sold in the dairy case, but they are not created equal.”


The notion that people are confused by products such as soy, almond and coconut milk was disputed by Danone North America, which has made the case that both dairy and plant-based products are clearly labeled with nutrition facts that consumers can use to fit their dietary needs and preferences.

“People understand the difference between dairy milk and plant-based choices and we do not believe further labeling standards are necessary, whether they are government or industry proposed,” emailed a spokesperson for Danone, which sells both plant-based and dairy-derived products. “Soy milk, almond milk and coconut milk are the ‘common and usual’ names for these products under the meaning of FDA regulations, and multiple federal courts have ruled as much.”

Danone in 2016 acquired WhiteWave Foods — the parent of plant-based brands including Silk and Vega — for $12.5 billion.

Further, the human nutritional need for milk from a cow diminishes greatly once one is no longer an infant or child, and about 60 percent of adults around the world have difficulty digesting it, at least the version with lactose.

The FDA held a hearing Thursday to gather public comments about the issue, part of a strategy it unveiled in March to address poor nutrition and its role in preventable diseases.

The agency has indicated that it could prohibit the use of the word “milk” on packages of plant-based beverages based on existing FDA standards on the definition of milk. That said, Gottlieb acknowledged that suddenly enforcing a rule that hadn’t been enforced for years should be reviewed first.

Consumption of animal-based milk has steadily declined, falling 22 percent from 2006 to 2016, according to global figures recently released by Cargill, which produces animal feed for the meat and dairy industry. On the other hand, sales of dairy alternatives tripled from 2000 to 2016, according to the data Cargill compiled to help its customers understand the shift in consumer preferences.


Rabobank issues Global Dairy Top 20 – no new entries and Nestlé stays top

Peter Paul Coppes, senior analyst – dairy, said that for the second consecutive year, there were no new entrants to the Dairy Top 20 list, with the $5bn threshold difficult to achieve due to a scarcity of large acquisitions or mergers.

“However, while the names have remained the same, the order shifted in 2017,” Coppes said.

The world’s largest food & beverage company, Switzerland’s Nestlé, still tops the list, but the gap between number one and number two has narrowed. Moving into second place, ahead of fellow French company Danone, is Lactalis, which has been boosted by its acquisitions of US yogurt businesses Stonyfield and Siggi’s.

Both France and the US have four entries in the top 20.

Danone slipped to third after divesting Stonyfield following the acquisition of WhiteWave, reducing its stake in Yakult, and selling its holdings in the Al Safi Danone joint venture in Saudi Arabia.


Fonterra and FrieslandCampina also swap positions, in fifth and sixth respectively, with Saputo and Yili also exchanging places in eighth and ninth, due in part to Saputo’s acquisitions, including Australia’s Murray Goulburn.

The only company jumping more than one place is German cooperative DMK, which rises two places to 13th .

M&A on the rise

The report also notes that merger-and-acquisition (M&A) activity in the dairy sector grew in 2017, fueled – as in other sectors – by the availability of cheap capital. However, unlike other food & agribusiness sectors, the large deals that did occur – Danone/WhiteWave and Saputo/Murray Goulburn – had limited impact on rankings within the Global Dairy Top 20.

Rabobank said the dairy sector trails other sectors in terms of industry consolidation through large-scale acquisitions. However, while M&A does occur in the dairy sector, dairy acquisitions tend to be limited in size and financial impact.  

China opportunities

Chinese companies need to address the integration of non-Chinese management as they consider growth opportunities around the globe, the report also notes. Increased collaboration between Chinese and non-Chinese companies in China has the potential to create a pipeline of global management talent.

The report notes that the dairy industry is becoming more global in scope. Previously, milk production, processing, and consumption occurred locally, especially in markets dominated by fluid milk consumption.

However, economies of scale in milk production and the conversion of milk into longer shelf-life products like butter, cheese, and dry dairy ingredients has required many dairy companies to be more globally-oriented, the report concludes.

Rabobank said it also sees an increased amount of ‘disruption’-based M&A deals, either defensive or opportunistic. By nature these deals are often small and involve start-ups, but they are growing in volume.


CWT Assists with 765,004 Pounds of Cheese and Butter Export Sales

Cooperatives Working Together (CWT) member cooperatives accepted offers of export assistance from CWT that helped them capture contracts to sell 489,426 pounds (222 metric tons) of Cheddar, Colby and Monterey Jack cheese and 275,578 pounds (125 metric tons) of butter going to customers in Asia and Oceania. The product has been contracted for delivery in the period from August through December 2018.

CWT-assisted member cooperative 2018 export sales total 44.538 million pounds of American-type cheeses, 12.085 million pounds of butter (82% milkfat) and 20.106 million pounds of whole milk powder to 28 countries on five continents. These sales are the equivalent of 829.763 million pounds of milk on a milkfat basis.

This activity reflects CWT management beginning the process of implementing the strategic plan reviewed by the CWT Committee in March. The changes will enhance the effectiveness of the program and facilitate 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

Dairy Report: June milk production up 1.2 percent according to USDA

The latest milk production data from USDA shows farmers are still generating a lot of milk despite low prices. June 2018 U.S. milk production, up a moderate 1.2 percent compared to a year earlier, should be bullish for prices. However, ongoing tariff wars with major export customers cloud the price picture. 

Reviewing the USDA estimates for June 2018 compared to June 2017:

  • U.S. milk production: 18.3 billion pounds, up 1.2 percent
  • U.S. cow numbers: 9.404 million, unchanged
  • U.S. average milk per cow per month: 1,943 pounds, up 23 pounds ( highest per cow average since 2003)
  • 23-state milk production: 17.2 billion pounds, up 1.3 percent
  • 23-state cow numbers: 8.745 million, up 12,000 head
  • 23-state average milk per cow per month: 1,964 pounds, up 23 pounds
  • Colorado surged ahead, increasing production by 11% from last year. Kansas followed with a 7.5% increase and Texas jumped up in production by 6.6%.


Source: USDA Milk Production report, July 20, 2018

California Milk Advisory Board Announces 2017-2018 Dairy Princess Representatives

Young Dairy Leaders to Serve as Advocates on Behalf of Dairy Industry

The California Milk Advisory Board (CMAB) recently welcomed the 2018-2019 class of Dairy Princess representatives for a three-day session to launch their year of service as California dairy industry advocates. Nineteen Dairy Princesses and Alternates from Districts 1 to 9 attended the Dairy Princess Training in July where they learned presentation and public speaking skills, etiquette and social media tips and an overview of industry programs and issues.

The 2018-2019 California Dairy Princess Class includes:

District Contest Results

District 1

  • Dairy Princess Madeline Holmes, Ferndale
  • First Alternate Austynn Gallagher, Eureka
  • Second Alternate Dairy Princess Annabelle Raven, Fortuna

District 3

  • Dairy Princess Jeanette Furlong, Petaluma
  • First Alternate Dairy Princess Megan Binford, Novato
  • Second Alternate Dairy Princess Sarah Kiser, Sonoma

District 4

  • Dairy Princess Grazia Machado, Orland
  • First Alternate Dairy Princess Hannah Gonzalez, Hamilton City
  • Second Alternate Dairy Princess Tessa Flournoy, Orland

District 5

  • Dairy Princess Emily Bavaro, Escalon

District 6

  • Dairy Princess Sophia Vander Dussen, El Nido
  • First Alternate Dairy Princess Caroline Lee, Modesto

District 7

  • Dairy Princess Jolene Simas, Hanford
  • First Alternate Dairy Princess Kiera Searcy, Hanford

District 8

  • Dairy Princess Monserrat Vazquez, Riverdale
  • First Alternate Dairy Princess Elizabeth Martin, Fresno

District 9

  • Dairy Princess Kaylee Faria, Visalia
  • First Alternate Dairy Princess Lindsay Mendonca, Tulare
  • Second Alternate Dairy Princess Jenna Koetsier, Tulare

2017-2018 Dairy Princess Representatives

California is the nation’s leading milk producer. It also produces more butter, ice cream, and nonfat dry milk than any other state. The state is the second-largest producer of cheese and yogurt. Dairy products made with Real California Milk can be identified by the Real California Milk seal, which certifies that the products are made exclusively with milk produced on California dairy farms by California dairy farm families.


Australian processors split on dairy code

Fonterra’s managing director Rene Dedoncker has called for patience when it comes to any changes to the current dairy code.

Fonterra Australia and Saputo Dairy Australia have different views on whether a voluntary or mandatory code of conduct is the best way forward for the dairy industry.

Fonterra’s managing director Rene Dedoncker has called for patience when it comes to any changes to the current dairy code.

‘‘We absolutely support the voluntary code and we just think it needs time to be tested,’’ he said.

‘‘We need to give it space, give it an amount of time so we know it works before they move to a mandatory code.

‘‘A mandatory code is a step too far, too soon, and will have unintended consequences that will make everyone risk-averse and potentially make more costs.’’

Despite costs also being an issue for Saputo chair Lino Saputo, he is in favour of the Australian Dairy Industry Council’s recommendations.

‘‘We continue to support the 11 points listed in the voluntary code of conduct put forth by ADIC, and believe this code should be mandatory for all processors — big and small,’’ Mr Saputo said.

‘‘We believe that a mandatory code of conduct should be managed by dairy industry bodies and the supplier community.

‘‘Our only concern in regards to a mandatory code of conduct is cost.

‘‘We want to ensure its regulation/enforcement isn’t onerous on the system.

‘‘We are ready and willing to support its implementation in any way we can.’’

Mr Saputo even provided a recommendation of his own.

‘‘We would also like to add a provision stating that step-downs (and claw-backs) should be illegal.’’

Dairy Connect chief executive Shaughn Morgan welcomed Mr Saputo’s views and hoped other processors would follow suit.

‘‘Dairy Connect will be reaching out to members to seek their views as to key points to be contained in a mandatory code. We will be doing this in the coming days,’’ he said.

‘‘Areas of concern would include transparency and certainty, dispute resolution, improving price signals, the ability to switch to new processors without penalty and written acknowledgement that all parties understood the terms of contracts.’’

Farmer Power executive officer Garry Kerr agreed with Mr Saputo.

‘‘With more and more evidence of contracting practices that are exploitive of dairy farmers, some possibly illegal, it is clear that the existing voluntary code is not working,’’ Mr Kerr said.

‘‘A mandatory code is needed to put some fairness back into the industry.’’

As part of its 18-month review into the industry, the Australian Competition and Consumer Commission also called for the code to be mandatory.

The UDV is against a mandatory code, saying the ACCC’s review confirmed its concerns about the time a mandatory code would take to develop.


Source: Country News

The Dairy Dilemma: an inside look at the struggles of American farmers

The dairy industry has been around for hundreds of years, and while much has changed, the basics remain the same — farmers raise and care for the cows, the cows produce milk, and the milk is sold to pay the bills.

The industry has struggled with peaks and valleys over the years, but now more than ever, keeping local dairy operations viable has become a difficult challenge. Farmers are calling for changes, because without them, many say local farms will not survive much longer.

In an industry vital to feeding America, what has changed to make the business so difficult?

LouAnn Parish is a dairy farmer in Adams and a member of the Agri-Mark Dairy Co-op. She and her husband have felt the intense pressures to stay afloat in the dairy farm business.

“Something has to get done or we all lose our business. I don’t think I’ll be here by the end of the year,” she said. This is largely caused by the milk market, which Mrs. Parish refers to as “broken.”

William Stine is an organic dairy farmer in Redwood. His family has been farming for five generations, and Mr. Stine has known no other lifestyle.

He explains why the market is as bad as it is right now: “I guess the simple answer is, just incredible overproduction. We’re producing probably the most perishable product in commodity land, and we’ve gotten very, very good at doing what we’re doing.”

Brien L. Tabolt is the general manager of the Lowville Producers Co-op. His job is to ensure the product the 144 member farms are producing is quality, and then to market that milk. The co-op is also feeling the pain of the milk market’s dip.


“This co-op, in a good year, can do $76 million for milk receipts paid to the farmer. Lately, it’s down to around $60 million, which is basically a break-even point for the farmers, and in many cases, not even a break-even point,” he said. “Farmers have become too efficient. They already have more milk than they can handle. You’ve probably heard of milk being dumped and warehouses of cheese filling up.”

But slowing production is not an option for these farmers. Dallen Farney is a partner at Silvery Falls Farm in Lowville, where he and his family manage 280 cows. He said other industries are able to handle a falling market, but farmers cannot.

“Ford doesn’t make trucks when they don’t have a market for it, but unfortunately you can’t just shut off a cow on Sunday if you can’t ship the milk,” he said.

Mr. Tabolt and the Lowville Producers Co-op are trying relentlessly to get farmers more for their milk, but “those opportunities just haven’t come about, and probably won’t until milk gets down a little closer to demand. It’s too easy for big processors to say, ‘If I can’t get your milk at the right price, there’s another co-op right down the road that I can buy it cheaper from.’”

And there is. Patrick Grimshaw is a member of the Jefferson Bulk Co-op. His milk is priced at about $13 per 100 pounds of milk, which is still very low, because he has been a co-op member for several years. However, farmers trying to get into a co-op now to market their milk aren’t as lucky.

Dairy farmers are still taking amounts well below their cost of production because they desperately need the market a co-op can supply.

“People are afraid to lose their milk market if they put up too much of a fuss, because they’ll get dropped,” Mr. Grimshaw said.

This overproduction and lack of market for milk has thrown most dairy farmers deep into debt, often causing emotional distress and affecting personal life.

“I only milk 350 cows and I’ve already borrowed $600,000 to pay my bills within the last six months,” Mr. Grimshaw said. He’s not alone in his struggle.

“I’m minus-$650 in my bank account,” Mrs. Parish said, frustrated. “I can’t eat, I can’t afford to fix the kitchen sink that’s been broken for eight months. I have been washing dishes in the barn sink. I had to buy a loaf of bread using the penny change in my car.”


Mr. Tabolt frequently hears his co-op farmers suffering emotionally from debt they are increasingly drowning in.

“I get phone calls every week with farmers not able to pay their bills, asking what else they can do. Farm wives will call me up crying on the phone because her husband had to let the hired man go because they can no longer pay him.,” he said “It’s not a good situation out there right now; they’re going further and further into debt. Older farmers are using their retirement to stay going.”

Mr. Farney, only 28 years old, came into the farming business as his family was about to sell the farm due to financial hurdles.

“I think financial struggles just snowball into debt. That’s where other farmers get depressed,” he said.

The Center for Disease Control and Prevention and the Department of Veteran Affairs showed suicide rates for farmers were higher than that of war veterans in recent years.

John Peck is the owner-operator of Peck Homestead in Champion, where his family has been farming since 1825. He is candid about the topic of farmer depression and suicide, though farmers are often stereotyped as reserved on displaying emotions.

Mr. Peck recalls one instance in 2009 when a New York farmer killed all of his cows, then himself after becoming depressed over his debt and failing farm.

“I’m depressed more about the situation that we’ve been going through in that people still don’t care, still don’t pay attention and the only way we get media attention that we’ve been in a downward cycle is when farmers were committing suicide this winter,” he said. “That pisses me off.”

Mr. Tabolt agreed the hardships farmers face aren’t often addressed.

“I don’t think the average public has any idea of the hardships. Some people know farms and know they’re having a tough time, but most farmers don’t want to tell anybody they’re really hard up. They’re proud people. If they’re having real financial troubles, they just don’t say anything to anybody,” he said.

Kirk Herse, of Adams, however, is not afraid to say something. His farm went bankrupt in 2006, and he said the bank claimed all of his animals and equipment, and police came to repossess them. Mr. Herse has been an activist for small dairy farms ever since.

“The second week in June a statement was released where Governor Cuomo asked, ‘Why aren’t farmers asking for help?’ and we had these letters sent in asking for help dated in March,” Mr. Herse said, waving papers in his hand.


“It’s a Mafia,” he said, referring to the government. “The farm credit system is controlled by the government, they’re the mob bosses. The DFA, Dairy Farmers of America, is being puppeted,” Mr. Herse said.

He, Mr. Grimshaw and Mrs. Parish believe the government needs to be exposed for trying to get rid of small farms to replace them with corporate ones through selective financing, a push for over-supply and using taxpayer money for grants. They refuse to complete their milk reports, which detail how much their farms are making and how many cows they are milking because they fear the government will use that information against them.

Mr. Herse calls the financing system for farmers “criminal.”

“If you want to stay in farming as a little guy, you can’t. It’s all selective financing,” he said.

But the facts indicate that small farms are not left out of the financial assistance process.

Farm Credit is a loan system across America, with 73 independent institutions that “support rural communities and agriculture with reliable, consistent credit and financial services.” In their mission statement, it says, “We serve every part of agriculture from the smallest operations to the largest — and everything in between.”

Tom Cosgrove is a senior vice president at Farm Credit East. He defends Farm Credit, saying, “We’re not a part of the government, we’re a cooperative with an elected board of directors, one of which is a local farmer from Adams.”

“We finance farms of all sizes, it’s something we measure. Last year we had around 8,000 loans specifically to small farmers,” he said.

The annual report shows that since December of 2017, Farm Credit East has already had over 40 percent of all loans go to small farms.

Kimberly M. Morrill is the regional dairy specialist at the St. Lawrence County Cooperative Extension. With her experience, she understands why some farmers may be frustrated with the government.

“The big picture here is, everyone in the dairy industry, big or small, is under financial pressure, and has been for three years. And when things get stressful, people look for someone to blame,” she said.

Mr. Grimshaw said he believes large farms are partially to blame, because they are selected for grants if they are the kind of farm the government includes in their choice of production.

“Big farms are receiving grants when we don’t even have enough money to pay bills,” Mr. Grimshaw said. “I overheard a CEO saying, ‘Just wait until the small guys are done and gone, soon enough,” They just want to get their choice in production.”

However, Mrs. Morrill disagrees.

“Grants are specifically available to small farms through a cost-share program, and this is because the dairy industry needs farms of all sizes, and there is a place in the industry for small farms, medium farms and large farms alike,” she said.


Mr. Farney milks about 250 cows, considers himself to be a small farm, and was a recipient of such a government grant to improve his farm environmentally.

“We got a grant for this farm. It was a cost-share grant because the cows used to come outside to an inside feed bunk, and the rainwater would hit it and hit their manure on the other side,” he said. “We want to be environmentally compliant, and don’t want to have any runoff, so we actually got a grant for part of the roof of this barn to have everything inside where the rainwater won’t hit it.”

His farm was also approved for another cost-share grant for a bigger manure storage.

“I think all farmers will tell you they don’t want to run the business off subsidies from taxpayers,” Mr. Farney said. “If we could find a way that the business could run and be environmentally sound and humane with the profit we’re getting from milk instead of tax subsidies, we would.”

Mr. Tabolt said farmers have a difficult relationship with the government.

“Farmers have a tendency to like the government to stay out of things. Farmers aren’t looking for a handout. They’re looking for some sort of legislation that would maybe cause stability,” he said. “So far, no politician has come up with that, or even talked about it.”

The 2018 Farm Bill didn’t have much to say in the way of farmers, Mr. Stine said.

“My personal feelings with the Farm Bill is it shouldn’t be called that at this point. We have SNAP in there, now there’s talk about iron, mining and things like that, so why is this the Farm Bill?,” Mr. Stine said. “The overwhelming amount of funding going into a Farm Bill is set aside for these different programs that are outside of what I view as farming; I don’t think it justifies what it was meant to do.”

“It’s absolutely useless,” Mr. Peck, a Jefferson County legislator, said. “It’s the same repackaged broken MPP (Margin Protection Program) with a brand new name on it. It’s a typical politician sleight-of-hand move and there’s virtually no changes.”


Change is what farmers so desperately need in this broken milk market with a rising contributing factor: Boycotting of dairy products in America.

“Some of our biggest challenges as farmers don’t come from traditional things,” Mr. Peck said. “Weather is not the thing that worries me the most anymore … it’s the external human factors — the interest group factors, the humane society, the Sierra Club, other environmental groups and just consumer groups. They’re being sold into an idea that our natural resources are being exhausted and animal agriculture is inefficient.”

In addition, the word milk is now being applied to a plethora of nondairy products.

“We’re losing ground now to the plant based, soy milk, coconut, almond, honey milk … let’s not call that stuff milk, but either way we’re losing market share there,” Mr. Stine said.

The U.S. Department of Agriculture has just concluded a study on this, and new regulations that will ban the use of the word “milk” in nondairy products could soon be issued.

Furthermore, the change from whole milk to skim in schools has given the dairy industry a blow as well.

“Now we’re basically giving the consumer water,” Mrs. Parish said.

“Skim milk doesn’t taste nearly as good as whole milk, so kids are learning a new habit of ‘I don’t like milk,’” Mr. Tabolt said. “We are losing a whole generation of milk drinkers, and this problem will continue to get worse until we find a way to get our kids back drinking a good, healthy product.

“That’s the sad part for me, is boycotting the dairy industry. The milk price lowers, cows are worth less and less, it doesn’t pay to keep them around, which is unfortunate,” Mr. Farney said. “I feel like a lot of people that cold-turkey quit dairy maybe are not uneducated, but rather don’t know the ins and outs of our everyday life and why we do things. “

Misconceptions about dairy cow welfare are not uncommon, and are contributing to the dairy boycott.

“You hear a lot about PETA groups, and people have been taking it out on the farmer, saying he’s not taking care of his cows the way he’s supposed to, or that it’s inhumane,” Mr. Tabolt said. “But farmers know that the more comfortable a cow is, the better she produces. There’s no misuse to the way our cows are being treated. Most people are really proud of them and will show you every new calf when you visit their farm.”

So with so many factors and misconceptions contributing to the dairy dilemma, what can be done to reverse the damage?

“Call out Congress people,” Mrs. Parish said. “We’re in crisis mode. They’re not doing right by farmers, we need all the help we can get. I’m going to call out Patty Ritchie and you need to call out Governor Cuomo.”

“To save farmers we need an emergency floor price not sponsored by the government. And although we can’t stop the big corporate guys from expanding their farms, we can decrease the worth of their milk so we level the playing field,” Mr. Grimshaw said.

The Agri-Mark Co-op has sought this kind of help from the government earlier this summer by sending a letter to the U.S. Secretary of Agriculture Sonny Perdue asking for implementation of minimum wholesale prices for butter, cheese and nonfat dry milk. The letter also called on the U.S. Department of Agriculture to purchase those products for government programs, like school lunches, at these requested wholesale price floors: $2.30 per pound of butter, $1.64 per pound on cheddar cheese, and minimum 81 cents per pound of dry milk. According to Agri-Mark economist Robert D. Wellington, these floor prices would prevent the milk prices from worsening for farmers, while also encouraging private consumers to raise their offers to beat out the government for goods.

“A system, any system, that can control at least some of our overproduction, would be really good, along with more processing plants in New York,” Mr. Tabolt said.

As for locally? The response across the board was to simply consume more dairy products to help farmers.

“Get extra cheese on the pizza at Pizza Hut, drink an extra half gallon of milk a week, anything consumers can do to take advantage of and consume what we’re producing would certainly be appreciated,” Mr. Stine said.

Other farmers agreed.

“Eat! Just eat. Enjoy. Tell your friends and neighbors, ‘Hey, let’s go and eat ice cream.’ It’s about consumption,” Mr. Peck said. “Be proud of what’s produced locally, but don’t take it for granted because things are changing and you may not have that local farm down the road forever.”

And Mr. Peck is right. With the unsteady milk market, overwhelming debt, loans or no loans, grants or no grants, and a nationwide dairy boycott on the trend, farmers are finding that the lifestyle they love and dedicate themselves to is becoming unbearable and unattainable.

“Nothing can prepare you for how challenging farming can be at times,” Mr. Farney said.

“I don’t know if anybody could just walk up and say, ‘I want to be a farmer’ and make a go of it. I just don’t know how you could. And that is something we all need to reflect on,” Mr. Stine said.


Source: Watertown Daily Times

Trump’s Trade Wars Have Mobilized Canada’s Dairy Cartel

With a trade war in its early stages against China, the election of a left-wing populist in Mexico, and several new cases against trading partners in the World Trade Organization (WTO), there aren’t a lot of reasons to be optimistic about the state of free trade in the United States. Unfortunately, the outlook in Canada is no better. Negotiations on NAFTA have been at a standstill since the Trump administration demanded that Canada accept a sunset clause to the agreement and abandon its unfair trade policies that protect its dairy industry, often referred to as supply management.

Trump is right to call out Canada’s trade policies on dairy. But he neglects to mention the trade-distorting subsidies that the United States grants to its own dairy farmers. In 2015, U.S. dairy farmers received $22.2 billion in direct and indirect subsidies, according to a report commissioned by the Dairy Farmers of Canada. In other words, there are people to blame on “both sides”.

Hypocrisy aside, Canada’s supply management system for dairy is particularly and notoriously isolated from competitive pressures. Coveted quotas (valued at a total of $32 billion in Canadian dollars) are sold to a limited set of dairy farmers by the Canadian government, prices are set at a guaranteed minimum rate by provincial marketing boards, and tariffs on dairy products are so prohibitively high that they effectively bar all dairy imports from the United States and the rest of the world. 

Prime Minister Justin Trudeau has pushed back against Trump’s demands—most notably at the G7 summit which resulted in a top Trump advisor saying that Trudeau deserves a “special place in hell” for using an international platform to deliver a message for domestic consumption. But Trudeau’s posturing to maintain supply management is earning him support among voters, and that has given him a stronger hand domestically to continue negotiations on NAFTA.

Posturing against reforming supply management is also a tenet of the Conservative Party—the party that is currently the Official Opposition in Parliament. Shortly after Trump’s flurry of tweets attacking Canadian dairy policies, Opposition Leader Andrew Scheer sidelined the only outspoken critic of supply management, Member of Parliament for Beauce Maxime Bernier. Last year, Bernier was narrowly defeated in the Conservative Party leadership race against Scheer, largely due to the latter’s support from the politically powerful dairy lobby.

Bernier ran on a libertarian-leaning platform that included policies such as getting the federal government out of healthcare and ending corporate welfare. The latter policy included questioning the efficacy of supply management, the sacred cow of Canadian politics. Scheer continues to face pressure from fellow Conservative MPs to further isolate Bernier by kicking him out of the Conservative caucus. Bernier is being ostracized by the Conservative Party for daring to articulate the party’s supposed principles.

There’s a cultural explanation for the unflinching impulse to defend supply management. It comes from a longstanding sensitivity about maintaining a Canadian identity that is independent from the economic and cultural leviathan to the south. This sensitivity has also manifested itself in the form of cultural protectionism for creative industries under the regulatory authority of the Canadian Radio-television and Telecommunications Commission (CRTC), where quotas for Canadian content are required for broadcasters. Former Prime Minister, and father of Justin, Pierre Trudeau (1919–2000) once said of the United States: “Living next to you is in some ways like sleeping with an elephant. No matter how friendly and even-tempered the beast, one is affected by every twitch and grunt.” When NBC’s Chuck Todd confronted the younger Trudeau with his father’s analogy, Trudeau responded by likening Canada to a moose—strong, stubborn, yet acutely aware that it is massively outweighed by the elephant.

The bipartisan show of support for Canada’s dairy cartel has shown that the national debate surrounding supply management is even less centered on the economic arguments of consumer choice and protected industries than it was before Trump’s rhetoric. The conversation is now about whether or not Canada is surrendering to a bully, and no politician wants to be maligned as a trade-defeatist in an effort to let milk flow freely—especially with elections on the horizon in 2019.


Tariffs with Mexico hurting the dairy industry

Last month, Mexico announced new tariffs on U.S. exports in retaliation for U.S. tariffs on Mexican steel and aluminum.

These tariffs are affecting the U.S. dairy industry. More than 60 dairy associations have asked President Trump to suspend these tariffs, including the Virginia Dairymen’s Association.

Mexico is one of the largest export opportunities for U.S. dairy products; last year, they imported $400 million worth of U.S. dairy, which is 25% of the total milk that the U.S. exports.

“Before, we were enjoying tariff free, duty free trade with Mexico,” explained Eric Paulson. “Now, those are going up as high as 25% for some products.”

Paulson has already seen an impact on milk futures in the last couple of weeks.

“The future income for dairy farmers drop by 1.8 billion dollars in the last six months of this year,” said Paulson.

An extra two or three percent surplus can devastate milk prices.

“We can’t flip an on and off switch. Our dairy cows are producing,” said Paulson. “The market said, ‘Hey we have all this export, we need to create it,’ but all of a sudden that milk doesn’t have a home anymore.”

Although not all Virginia farmers are exporting their product, the surplus from other farms hurts prices across the country.

“We were exporting about 18% of our milk every year, so right now, about one out of every seven days, all of the milk produced in the U.S. was being exported overseas or to neighboring countries,” said Paulson.

The market does not allow for a consistent salary for farmers.

“They have no control over what their prices are,” said Paulson. “It makes it very challenging when we have this extreme volatility between great years like 2014 and very challenging years like 2017 was and 2018’s proving to be even more so.”

In the first six months of this year, 35 dairies have shut down.

Paulson says milk prices were starting to look positive for the fall, but the tariffs have destroyed that optimistic look ahead, because U.S. dairy products are now 25% more expensive in Mexico.


Source: WHSV

US Dairy Exports Increase 604% since 1995

With the international spotlight shining brightly on trade policies and both Mexico and China imposing new tariffs on U.S. dairy products, this is a good time to take a look at U.S. Dairy exports by the numbers.

We created this infographic to provide a visual snapshot.

The bottom line is this: Dairy creates jobs, exports create more. How?

Exports expand dairy’s economic footprint, supporting more jobs in more places. Exports boost rural, suburban and urban economies while creating additional tax revenue for the common good.

For state-by-state fact sheets on exports, go here. For more U.S. data on exports, go here.

Farmers share perspectives on dairy oversupply management strategies

A July 19 webinar shared farmer perspectives of one management strategy to reduce milk oversupply. Farmers from Scenic Central Milk Producers, Dairy Farmers of America, and Land O’Lakes talked about their personal experiences with the base-excess plans launched by their cooperatives. A base-excess plan assigns each cooperative member a “base” level of production pegged to the farm’s production history, and then assesses an “excess” fee on any milk that the farm produces beyond the base.

Base-excess plans are usually a temporary response to a particular market condition. The plans executed by Scenic Central, DFA, and Land O’Lakes differ in terms of how the farmer’s base is calculated, and how the excess fee is assessed. The details of each plan are described in the webinar, which can be viewed for free under Resources at

“Times are really tough right now for dairy farmers,” said Wisconsin Farmers Union Government Relations Associate Bobbi Wilson. “Wisconsin Farmers Union has been pushing for long-term solutions to the dairy crisis, and this issue has been front and center for our organization. What we envision is a viable economy for all family farmers and rural communities.”

Wilson said the webinar was a step forward in that effort. “Dairy farmers need a fair and predictable pay price, and there is a lot of work that needs to be done to get there,” she said. “By holding this presentation, we are not saying that this is the answer, or that base/excess plans will solve the dairy crisis, but we are trying to demonstrate one thing that co-ops can do that is a step in the right direction.”

Grant County dairy farmer Jerry Volenec explained that his cooperative, Scenic Central, launched its base-excess program when the co-op lost milk contracts and found itself selling spot loads of milk for $4 under the Class 3 price. The purpose of the plan was to bring the level of production in line with the volume that the cooperative had contracts to sell. Volenec milks 320 cows on his Montford farm.

“There were producers who wanted to add cows or bring on another family member, but the co-op just couldn’t take any more milk. The spot load price, which historically could be at a premium, was driving everybody’s mailbox price down,” said Volenec. “If you want to expand, we’re not saying you can’t, but you’re going to bear the burden for that extra milk. It’s not going to dilute everyone’s pay price.”

The Western Area Council of Dairy Farmers of America has had a base-excess plan much longer, since 2008. George Mertens, who milks 800 cows on his Sonoma, California farm, was chairman of the council when the base-excess plan went into effect. Within 3-4 months, the plan had succeeded in eliminating the co-op’s excess production, and the co-op was able to turn the program off.

“It’s simply a management tool for your co-op to manage production,” Mertens said. Several years later, supply started creeping up and the region again found itself in an oversupply situation. Mertens said that all it took was for the co-op to mention that it was thinking of re-instituting the base program, and supply fell back to where it needed to be.

Despite the program’s success, “it was hard at the beginning,” Mertens acknowledged. “There were definitely some unhappy people. Later I asked one of the detractors, ‘why don’t you propose a resolution to get rid of the base program?’” The member had changed their tune, telling him, “I think it’s a good tool.”

Land O’Lakes member Jeff Strassburg was likewise skeptical when he first heard his co-op would be implementing a base-excess program. He milks 900 cows on his Wittenburg dairy farm. “When I was first presented with the idea of a base, I thought it sounded un-American,” Strassburg said. “Over time, I’ve really found that it’s worked out well, both for myself and for the co-op.”

“I commend the Land O’ Lakes staff for implementing this,” Strassburg said. “Did they take some heat? Yes, and I was probably one of the ones who gave them that heat. Looking back, it was a good move.”

Strassburg noted that no farmers with Land O’Lakes have been terminated due to oversupply and that all farms cutting back a little eliminates the need for any farm to be cut off entirely. He observed that part of what has made Land O’ Lakes’ base-excess program successful has been good two-way communication between the farmer and the co-op.

Strassburg had some words of encouragement for farmers and cooperatives who are considering a base-excess plan as a management tool. “I don’t think someone should be afraid of a base program,” he said. “I see it as something that can move the next generation forward, so there is a future for them on the farm.”

NZ dairy herds may change from black to brown

In coming years, we are likely to see the colour of New Zealand dairy cows change from predominant black and white to a mix containing more brown and brindle. It will be a response to changes in the relative price of protein and fat.

Black and white Friesian cows produce about 1.2 kilograms of fat for every kg of protein. In contrast, the brown Jerseys produce about 1.4 kg of fat for each kg of protein.

Jersey milk is also richer with less water. Jersey milk is about 5.7 per cent fat whereas Friesian milk is about 4.5 per cent.

Farmers will also have to factor into their calculations the higher beef value of male Friesian calves versus Jerseys.WARWICK SMITH/STUFF

Farmers will also have to factor into their calculations the higher beef value of male Friesian calves versus Jerseys.

For many years, protein has been worth a lot more than fat, but in the last two years that has changed.

Milk protein prices are the lowest they have been for many years whereas fat prices are at record highs. This is the reason why butter is now so expensive in our supermarkets.

There are multiple reasons why fat and butter have come back into favour, but a key one is that the public has become convinced that butter is no longer the health demon it was portrayed to be. 

Many medical researchers would say that the public has actually got confused between the different effects of saturated versus non-saturated fats, but in the market place it is what the public thinks that counts.

Media articles always express the price that farmers receive for their milk as a price per kg of “milksolids” (written as one word, often with a capital, and also abbreviated to S/kgMS).

This is defined as the amount of fat plus protein combined. Other solids – mainly lactose but also minerals – are ignored in the pricing calculations. 

On rare occasions when these other solids are included, then “milk solids” is written as two words, and never with a capital.  So there is lots of potential confusion for the uninitiated.

When it comes to actually paying the farmers, the companies pay separately for fat and protein. They also charge a penalty for the natural water in the milk, because most of this has to be evaporated-off to produce long-life products.   

Given that natural water in milk is just a nuisance for manufacture of long-life products, New Zealand has bred a different type of cow compared to elsewhere in the world, where payments are often on a per litre basis.

New Zealand cows might look the same as cows elsewhere but they produce thicker milk.

Coming back to the pricing issue, the current prices we are seeing will lead increasingly to Friesian farmers with low fat percentages being paid less per kg of milksolids than the quoted milksolids prices, and those with the brown Jersey-type cows will be paid more.

Fonterra and other companies base the payments for fat and protein on a three-year rolling average of market price relativities. Accordingly, these effects will be increasingly felt over coming years, with this year really just the start.

Changing the breed of the cows is something that farmers are not talking about widely just yet. It will only be when they see discounts coming through into their milk payments over the next two years that it will come to the fore in their thinking.

Many farmers already have KiwiCross cows which are a mix of Friesian and Jersey, so they are already on the journey. These KiwiCross cows also show some hybrid vigour benefits. 

However, farmers will also have to factor into their calculations the higher beef value of male Friesian calves versus Jerseys.

As from next year, farmers will also see these differences starting to show up in the “breeding worth” values of bulls in the breeding catalogues. Jerseys are going to leap ahead and Friesians will drop back. There will also be changes of relative value within a breed.

Changing price relativities for fat and protein are also leading to other behaviours in the international market place. With whole-milk powder now worth much more than skim-milk powder, a new product has come to the fore called “fat-filled powder”.

This fat-filled powder is a mix of skim-milk powder and vegetable fat, with the predominant vegetable fat coming from palm oil. This product is widely used in poorer countries.

Before people get too upset – and please don’t shoot the messenger – this product is actually likely to have a better health profile than the genuine whole-milk powder.

But no doubt the fact it comes from palm oil will upset many people, who understand neither the ubiquitous presence of palm oil in our food chain nor that it is a healthy fat. 

And before readers use this information to lambast the New Zealand industry, please remember that the manufacture of fat-filled powder is predominantly from European-sourced skim-milk powder. However, some New Zealand skim-milk powder will also be used this way.

Source: Stuff

338 Wisconsin Dairy Farms Have Closed Down This Year

Wisconsin, which produces more dairy than any other state in America, is experiencing a steep decline in dairy farms. In June, 54 Wisconsin dairy farms left the industry, and in May, 78 facilities also closed up shop. This information was confirmed by the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP), a state government agency.

So far in 2018, 338 dairy farms have “stopped milking cows,” magazine Dairy Herd admits. According to DATCP data, the number of dairy farms in the state has declined every year for more than a decade. Dating back to August 2003, Wisconsin was home to 16,264 dairy farms. Now, the total number sits at just 8,463.

While the number of farms in the state continues to decline, more than 1.2 million cows still exist in Wisconsin’s dairy system. The state is the top producer of cheese in America, making 27 percent of the country’s total supply.

However, the state appears to be shifting its focus away from dairy products. In June, it was revealed that Wisconsin chefs and locals were embracing the Impossible Burger, a plant-based beef-style burger that cooks, looks, and tastes like meat. Additionally, restaurants in Wisconsin are increasingly adapting their menus to cater to the changing market.

The decline of dairy production is not exclusive to Wisconsin; the unsteady trajectory of the dairy industry has been reported all around the world. One food and beverage company in Finland has shifted it’s focus from cow’s milk to plant-based oat milk instead after realizing that vegan products will “take over” dairy. In New Zealand, animal cruelty in the dairy industry prompted the Green Party to demand better standards of animal welfare. Further, a study in France found connections between the consumption of raw dairy milk and an outbreak of Hemolytic Uremic Syndrome in children, a condition that can lead to kidney failure. And the Indian public has been urged to go vegan to spare the lives of calves that are killed in the dairy industry. In the U.S, some dairy farmers affected by the decline of the industry are looking to grow crops instead.

Amidst the growing opposition of the dairy industry, usually for health, environmental, and animal welfare reasons, more consumers than ever are opting for vegan dairy products. The dairy alternative market made $9.8 billion last year and is expected to keep surging.


Vermont Dairy Farm of the Year Lauded for Stewardship

A 400-head dairy farm in Berkshire is Vermont’s 2018 Dairy Farm of the Year.

Aires Hill Farm has earned the distinction from the University of Vermont Extension and the Vermont Dairy Industry Association in cooperation with the New England Green Pastures Program.

The farm is primarily managed by Karie Thompson Atherton, who took it over in 2014 after her father and uncle decided to retire.

The extension service says the farm, which is part of St. Albans Cooperative Creamery, consistently earns awards for high-quality milk and is a good steward of the land. The service says the farm instituted conservation practices before the state agriculture agency mandated them, including using buffers, blocking access of cattle to streams and developing a nutrient management plan.


Source: U.S. News

FDA to crack down on non-dairy beverages labeled as ‘milk’

Non-dairy products such as soy milk and almond milk may not be able to label themselves as “milk” anymore, federal regulators announced this week.

Non-dairy products such as soy milk and almond milk may not be able to label themselves as “milk” anymore, federal regulators announced this week.

As noted by The New York Post, milk is defined as coming from the “milking of one or more healthy cows,” according to federal rules, and soy milk and almond milk do not fall under this category.

This often-unenforced rule is one of many listed by the FDA for mandating how certain names of products must be identified. The FDA abides by “standards of identity” when determining how manufacturers can label their products, according to PBS. Federal standards define milk as the result of the “milking of one or two healthy cows.” Soy, almond, and other milks are created without the use of dairy. 

Mammals produce milk, plants don’t,” as Jim Mulhern, president of the National Milk Producers Federation, said last year.

Commissioner Scott Gottlieb of the FDA said on Tuesday that we have not been “enforcing our own standard of identity” by letting these rules go unenforced, according to the Post.

This announcement comes on the tail of similar disputes about alternative food products, which have been gaining popularity in recent years.

On the other side, the Plant-Based Foods Association argues that the FDA’s strict naming guidelines were adopted to prevent lower-quality dairy products from edging out products made entirely with dairy. For example, FDA standards of identity would prevent a carton of watered-down milk product from being labeled as milk. This would prevent cheaper, lower-quality alternatives from edging out real milk.

This is not what plant-based food producers are trying to do with their products, the PBFA argued in a press release. They assert that non-dairy milks are clearly labeled as such and that consumers are specifically seeking out these products because they don’t include dairy.

The Good Food Institute, an advocate for plant-based alternatives, says the term “milk” should be allowed for non-dairy drinks “for the same reason that you can have gluten-free bread and rice noodles.”

Changes to the industry are not expected to happen overnight, however. The FDA must first notify the companies of these products, and ask for a public comment. Those notifications are likely to be issued in about a year.

USDA Forecasts another tight year for Dairy Farmers

The USDA expects margins for dairy farmers to remain tight into next year. While feed costs were lowered in the July outlook, it’s not enough to offset depressed milk prices.   USDA expects the all milk price to average $16.10 for 2018 and $16.75 for 2019.

“Margins are still going to remain under some pressure most of the way through ’18, through most of ’19.” comments, USDA’s World Ag Outlook Board Chair Seth Meyer.  He says too much cheese and butter, competitive export prices, and increasing milk production continues to pressure prices. 

Trump’s Tariffs Hurting California Dairy Industry

California dairy farmers are feeling the effects of the trade war with Mexico that started when President Donald Trump imposed tariffs on Mexico‘s steel and aluminum.

In retaliation, Mexico in June imposed a series of tariffs on U.S. goods, such as pork, apples, potatoes, bourbon and different types of cheese. 

While it’s only been six weeks since the tariffs started, the economic effect for California dairy farms has been brutal. Cheese requires thousands of gallons of milk to produce. 

“The market in the last two weeks of June dramatically dropped,” Frank Konyn, owner of Konyn Dairy, said.  “I am losing $1,400 a day, about $40,000 a month here in this dairy.”

The tariffs increased the price of milk coming from the United States, meaning more milk is staying in the local economy. And that’s bad for business.

“Because all those products are staying here at the market, there is a greater supply,” Konyn said. “And as a result of the great supply, the price goes down.”

According to the California Council of Milk Producers, losses for the industry surpassed $380 million in the last six weeks, though it notes that not all the losses can be blamed on the trade war.

“[B]ut the industry would undoubtedly be better off if it hadn’t become one of many casualties in the trade war,” the group said in its July newsletter.

For dairy farm workers such as Miguel Aldana, there are concerns the trade war could cost him his job.

“So sad because I’ve worked since I was 20 in this industry and suddenly you can be out of a job,” Aldana said in Spanish.

For now, workers at Konyn Dairy can relax. No job cuts have been contemplated so far, Konyn said.

“We cannot do that,” he said. “The cows need to have their feed. They need to have their water. They need to be milked. I can’t just stop milking them and come back in a week.”

Konyn hopes the trade war will end soon and both countries could come to an agreement.

“I want to see a strong economy in Mexico and I want to see a strong economy in the United States,” he said. “If we can get a strong economy going everywhere, I’ll get my money back in the future and everybody comes out as a winner.”

Heat and drought could put Swedish dairy farmers out of business

The dry weather during May and June is putting an increasing strain on Sweden’s farmers. If the rain does not come soon, there is a risk that several farms will have to close down, reports Swedish Radio P4 Jönköping.

Thomas and Bettan Svensson are dairy farmers in central Sweden.

Thomas Svensson is a dairy farmer in Kullhestra in Småland (central Sweden). He only collected about half of the harvest that he needed, and with everybody having the same problem, there is a lack of animal fodder all around the country now, with the prices shooting through the roof.

“It is reasonably difficult. So far we are managing, but there will be trouble if we don’t get water,” Svensson told P4 Jönköping.

Other factors

A few years ago, the Federation of Swedish Farmers, LRF, estimated that five dairy farms a week were going out of business, due to the low prices they got for their milk, coupled with the competition from abroad.

Now, there is a risk that more people will feel that they cannot go on, says Thomas Svensson.

“For those to stand there, already considering to throw in the towel.. this may be the last straw,” he says.


Source: Eye on the Arctic

Slumping milk prices force dairy farmers to think outside the barn

Dairy farmers have seen low milk prices before, but the current downturn has been severe in its duration. As some dairy farms fail, others are finding new paths forward.

Twelve years ago, Terry Edge, in his mid 20s and descended from Wisconsin dairy farmers, turned his back on the family business and took a job in construction. It didn’t last long. Six months later he bought 50 cows, moved them into his grandfather’s old barn, and threw himself into the subtleties of cow breeding, determined not just to follow the old dairying life but to improve on it, raising animals that were healthier and better suited to grazing on the lush green hillsides of southwest Wisconsin.

“I went that route thinking it would help me make ends meet,” he says. “But it didn’t work out that way.”

Now Mr. Edge has come to the end of the line. He sold most of his cows at an auction last month, undone by a stretch of low milk prices that has lasted 3-1/2 years and imperiled dairy farmers across the country.

Some like Edge are being forced out of the dairy business. For others, the hard times are focusing new attention on strategies that go beyond just milking cows in big barns, such as making cheeses or switching to goats or sheep. ​And some farmers, pointing to a quota system of production in Canada that keeps milk prices more stable there​, say new policies might be the answer​.

“This is probably the biggest challenge dairy farmers have faced in their lifetime,” says Darin Von Ruden, a dairy farmer and president of the Wisconsin Farmers Union.

Overproduction worldwide has yielded a glut of milk, driving prices below what farmers say it costs them to produce it, for months at a time. Farmers are used to fluctuations in milk prices, but previous downturns have usually lasted only a year or 18 months.

The US Department of Agriculture predicts that milk prices will rise this year and into next. But no one expects a big increase. The Trump administration’s trade disputes and the prospect of trade wars involving agricultural products have only deepened the uncertainty.

‘Running as fast as we can’

As this downturn reaches the middle of the fourth year, many farmers are struggling just to hang on, borrowing against land and equipment to pay their bills, betting the farm that prices will turn.

“Once you’ve invested a million dollars in a milking parlor, you’re going to milk cows,” says Sarah Lloyd, a farmer in Wisconsin Dells. The result, she says, is that “my husband and I are on the treadmill and we’re running as fast as we can. That’s happening to a lot of families.”

Not all farmers are struggling. Some have managed to pay down debts. And, as in other types of farming, large operations often enjoy economies of scale. Big farms can run milking parlors around the clock and negotiate discounts for things like feed and breeding services.

Wisconsin alone lost about 5 percent of its dairy farms between 2016 and 2017. Just 15 miles west of Edge’s farm, William and Kelle Calvert had gone into debt to buy a 450-acre farm, and gave up dairying because they were afraid of losing everything. They sold their cows to save the farm. Now they cash-crop corn, soybeans, and hay and raise a few animals for other people.

“We had a good sale,” says Mr. Calvert, who now works at an agricultural feed company. “There were tears shed, but we felt it was a good day.”

Finding new pathways

The milk crisis has also inspired farmers to think harder about new strategies with their dairy herds, including alternatives to conventional dairying. Some are championing rotational grazing, a method that involves sending cows out to pastures rather than confining them in big barns, as many dairy farms do. Grazing requires a lower investment in buildings, machinery and feed, and dairy experts say it offers a small economic advantage over conventional dairying.

Organic milk production has for decades offered a profitable alternative for smaller farms, and although organic milk prices have fallen recently, too, organic producers haven’t suffered as much as conventional producers.

Other farmers are trying to diversify, raising beef cattle or producing milk for a niche market. Some have switched to milking goats or sheep; the number of goat and sheep farms in Wisconsin almost doubled between 2015 and 2017. Richard Cates, who directs the Wisconsin School for Beginning Dairy and Livestock Farmers, says he “can’t imagine” starting out as a conventional dairy farmer these days. “You have to be innovative and entrepreneurial,” he says. “You have to do what other people are not doing.”

The Marcoot Jersey Creamery, in Greenville, Ill., is one example. It grew out of a common predicament: an older farmer thinking of selling his cows. Instead, he and two daughters started a cheese-making operation on the farm in 2010. Today Marcoot has 14 employees and about 100 cows. It makes 20 varieties of cheese, which it sells at an on-farm store and ships to scores of restaurants and grocery stores in the Midwest.

“It made the most economic sense to turn the milk into cheese,” says Laura Wall, who gives tours on the farm.

Meanwhile, some young people are still finding a way – carefully – into dairy farming. John Richmond, who is 24, is a grazer, feeding his cows grass and hay that he grows himself. He has avoided massive debt by renting rather than buying land and equipment. He’s still not sure if he’ll break even.

Mr. Richmond is a realist: If he can’t make a living as a dairy farmer, he’ll switch to some other kind of farming. “Really,” he says, “someone could do anything with this land.”

A model in Canada?

As farmers struggle, agricultural agencies in dairy states are trying to help, offering financial advice, credit mediation services, and access to counseling. But across the countryside, farmers are feeling angry and bewildered.

“Our pride and perseverance has allowed us to survive the hardships of the past,” wrote Thomas Litkea, a 67 year-old farmer in New Lisbon, Wis., in a recent letter to Dairy Star magazine. “However, we need actions and answers now more than ever.”

A growing number of Midwestern dairy farmers are showing an interest in policies that would raise milk prices by controlling production. They’ve looked to Canada, which has a supply management system that imposes quotas on farmers (and barriers on imports from countries like the United States).

“It has kept prices stable,” says Alan Ker, director of the Institute for the Advanced Study of Food and Agricultural policy at the University of Guelph in Guelph, Ont. “It takes out a lot of risk for farmers.”

This spring, hundreds of farmers converged on meetings in Michigan and Wisconsin to hear about the Canadian system directly from Ontario dairy farmers. “As farmers especially, we need to take a look at why we keep producing more and more when there’s no market for it,” says Mr. Von Ruden, who helped organize the meetings.

On his farm in New Diggings, Terry Edge decided he could no longer make it work. On a recent morning, there’s activity everywhere. Hunting dogs strain at their leashes, turkeys waddle through the long grass, and calves bawl in small sheds. The yard is muddy from an early downpour.

Looking to his next chapter, this fifth-generation dairy farmer is now planning to raise beef. “My hope is within two years to have maybe 100, 120 beef cattle,” Edge says. He’ll have more time for work off the farm. He’ll also have more time at home with his wife (a nurse) and three children, who were often asleep by the time he got home from milking his cows.

But the farming won’t be the same. He’ll miss the close work with his cows, the familiarity with them that for many farmers is both the pleasure and burden of dairy farming.

He walks to the edge of a large pen, not far from the barn, where a small, brindled cow strains against the wooden fence. He reaches down and scratches the coarse hair between its ears.

“Any dairy farmer will tell you, it’s more the interaction with the animals than anything else,” he says. “That’s what I’ll miss the most.”


Source: The Christian Science Monitor

Canadian dairy farmers came together from coast to coast for Annual General Meeting in Quebec

Dairy Farmers of Canada (DFC) had its Annual General Meeting (AGM) yesterday in Quebec’s beautiful capital, bringing together farmers from all regions of the country and industry stakeholders.

DFC President Pierre Lampron addressed the assembly, highlighting that the Canadian dairy industry is facing new challenges, including international trade and the questioning of the nutritious value of dairy products. “There is a compelling case for us, as dairy farmers, but also for the whole sector, to speak with one voice. This AGM presents a perfect opportunity for us to reaffirm the value of the dairy sector to our economy and our commitment to a healthy future for Canadians.”

He added: “Our industry has been carved out by international trade agreements like CETA and CPTPP. Now, Canadian dairy is in the sights of the US government in NAFTA renegotiations. We need to be vigilant.”

The Annual General Meeting also serves as an opportunity for stakeholders and farmers to discuss and learn about various factors affecting the viability and health of the dairy sector. Yesterday’s sessions tackled a few difficult topics, including discussions on farmers’ mental health and challenges to dairy consumption in the future. The CEO of Abacus Data, David Coletto, also brought his unique perspective on how millennials are impacting the dairy sector.


Source: PR Newswire

FDA to crackdown on non-dairy products labeled as ‘milk’

Soy and almond drinks that bill themselves as “milk” may need to consider alternative language after a top regulator suggested the agency may start cracking down on use of the term.

The Food and Drug Administration signaled plans to start enforcing a federal standard that defines “milk” as coming from the “milking of one or more healthy cows.” That would be a change for the agency, which has not aggressively gone after the proliferation of plant-based drinks labeled as “milk.”

FDA Commissioner Scott Gottlieb talked about the plans this week, noting there are hundreds of federal “standards of identity” spelling out how foods with various names need to be manufactured.

“The question becomes, have we been enforcing our own standard of identity,” Gottlieb said about “milk” at a Politico event Tuesday. “The answer is probably not.”

Standards of identity have been the source industry spats as American diets have evolved, including fights about what gets to be called mayonnaise and yogurt. More recently, there are disagreements over what to call meat grown by culturing cells, a science that’s still emerging.

The FDA can’t just change the way it enforces a standard without warning, Gottlieb said. Since it plans to take a different approach to enforcement, he said the FDA will have to first develop guidance notifying companies of the change and ask for public comment. That guidance will probably be issued in a year, he said.

Gottlieb said the agency expects to get sued, since dictionary definitions are broader and say milk comes from a lactating animal or a nut.

The National Milk Producers Federation said it welcomes Gottlieb’s recognition that the labeling practices of many “plant-based dairy imitators” violate federal standards. The industry group had recently renewed its push for the FDA to crack down on nondairy drinks calling themselves “milk.”

The Good Food Institute, which advocates for plant-based alternatives, says the term “milk” should be permitted with modifiers for nondairy drinks.

“For the same reason that you can have gluten-free bread and rice noodles, almond milk and soy milk are the most clear and best terms for describing those products,” said Bruce Friedrich, the group’s co-founder.

The FDA declined to comment on whether the agency would enforce other standards, such as for yogurt.

Source: USA Today

Humorous new ‘Got Milk?’ ads focus on younger, more diverse audience

The California Milk Processor Board (CMPB), which owns the iconic ‘Got Milk?’ trademark, is launching a new phase of the long-running campaign, ‘You Can Always Count on Milk’ that utilizes kids to great effect and is designed to appeal to millennial families throughout California.

The CMPB, together with lead agency-of-record Gallegos United, today (July 11) is launching the new $16m, statewide advertising initiative. The campaign, with both English and Spanish-speaking spots, highlights the everyday challenges kids face in their lives, using a comedically honest tone that’s just as fitting for adults.

In one spot, kids are seen at a table, talking over the rough days they’ve had. One girl states how tough her time at ‘Take Your Kid to Work Day’ was for her, while another laments the diorama she had to make for class. The third nails his rough day by stating that he got cast as a fence in the school play, then states that his allowance negotiations are being low-balled. They all commiserate over glasses of cold milk, brought by a sympathetic and familiar server. In a six-second spot, a kid with a glass of milk by a jukebox states, flat out, that he doesn’t trust any man who doesn’t drink milk.

Two Spanish language spots show similar tough days for kids. In one, two kids observe their friend being fawned, hugged and pinched by overly-friendly relatives, much to the chagrin of the lovingly mauled child.

The spots illustrate that no matter how tough daily life can get for the average kid, milk is the one thing they can continue to count on.

‘You Can Always Count on Milk’ is the first campaign for Gallegos United, and partner agencies Rox United and Canvas United, following the CMPB’s decision to consolidate advertising agencies in early 2018 to better focus on all California which is more diverse than ever within millennial households, which are led by the growing multicultural audiences, a key growth segment.

The campaign is backed by plenty of information on the Got Milk? website.

“California is a complex market, one that is rapidly evolving on a number of fronts, from demographics and media landscape to technology and lifestyle,” said Steve James, executive director of the CMPB. “As a result, what it means to be a Californian has evolved since the ‘Got Milk?’ campaign was launched 25 years ago. As one of the most diverse states in the US, our future success lies in reaching consumers through culturally-attuned campaigns that connect and resonate with what it means to be a Californian today.”

Added chief executive officer of Gallegos United, John Gallegos: “Today’s culturally diverse consumer straddles multiple cultures, not just ethnicity. For milk, our strategy is to take a consumption-based focus and lean into it to create strategies and creative that are more culturally attuned for the composition of today’s families, enabling us to resonate with the entire California market to drive growth.”

The ‘You Can Always Count on Milk’ campaign will touch all California consumers and advertising will be unified across all segments with English and in-language communications in Spanish, Chinese, Korean and Tagalog.


Source: MI News

Study looks at consumption of whole dairy foods

Enjoying full-fat milk, yogurt, cheese and butter is unlikely to send people to an early grave, according to new research by The University of Texas Health Science Center at Houston (UTHealth).

The study, published today in the American Journal of Clinical Nutrition, found no significant link between dairy fats and cause of death or, more specifically, heart disease and stroke – two of the country’s biggest killers often associated with a diet high in saturated fat. In fact, certain types of dairy fat may help guard against having a severe stroke, the researchers reported.

“Our findings not only support, but also significantly strengthen, the growing body of evidence which suggests that dairy fat, contrary to popular belief, does not increase risk of heart disease or overall mortality in older adults. In addition to not contributing to death, the results suggest that one fatty acid present in dairy may lower risk of death from cardiovascular disease, particularly from stroke,” said Marcia Otto, Ph.D., the study’s first and corresponding author and assistant professor in the Department of Epidemiology, Human Genetics and Environmental Sciences at UTHealth School of Public Health.

Dariush Mozaffarian, M.D., of the Friedman School of Nutrition Science and Policy at Tufts University, was senior author of the study, funded by the National Institutes of Health.

The study evaluated how multiple biomarkers of fatty acid present in dairy fat related to heart disease and all-cause mortality over a 22-year period. This measurement methodology, as opposed to the more commonly used self-reported consumption, gave greater and more objective insight into the impact of long-term exposure to these fatty acids, according to the report.

Nearly 3,000 adults age 65 years and older were included in the study, which measured plasma levels of three different fatty acids found in dairy products at the beginning in 1992 and again at six and 13 years later.

None of the fatty acid types were significantly associated with total mortality. In fact one type was linked to lower cardiovascular disease deaths. People with higher fatty acid levels, suggesting higher consumption of whole-fat dairy products, had a 42 percent lower risk of dying from stroke.

The 2015-2020 Dietary Guidelines for Americans currently recommend serving fat-free or low-fat dairy, including milk, cheese, yogurt, and/or fortified soy beverages. But Otto pointed out that low-fat dairy foods such as low-fat yogurt and chocolate milk often include high amounts of added sugars, which may lead to poor cardiovascular and metabolic health.

“Consistent with previous findings, our results highlight the need to revisit current dietary guidance on whole fat dairy foods, which are rich sources of nutrients such as calcium and potassium. These are essential for health not only during childhood but throughout life, particularly also in later years when undernourishment and conditions like osteoporosis are more common,” Otto said.

Evidence-based research is key to educating people about nutrition, Otto said.

“Consumers have been exposed to so much different and conflicting information about diet, particularly in relation to fats,” she said. “It’s therefore important to have robust studies, so people can make more balanced and informed choices based on scientific fact rather than hearsay,” she added.


How profitable is dairy farming?

The economic state of milk production in the United States right now is pretty somber.

It’s extremely difficult to net anything after depreciation and expensing all unpaid labour. Our farm, for instance, has younger family members receiving salary that were also gifted a few hundred thousand dollars worth of livestock and equipment (equity), by the three principal owners. The three principals, including me, in turn, have taken no salary for some years, in my case since 2011. I’ve accumulated farm land which, after paying for twice, now generates sufficient rent income for a very good living.

Income as distribution of profit from milk production is not part of any equation at this point in time for most milk producers, including ourselves.

The United States Department of Agriculture has some milk margin subsidies that can help out small and medium sized dairy farms, but do little or nothing for large scale farms.
Much of the recent low value of cheese and butter is because Mexico and the PRC cancelled orders in response to tariffs.

For some 50 years, about four percent of dairy farms quit producing every year, right now the liquidations are a little faster, perhaps, as the industry is consolidating at a faster rate.

In the 1960s, one truck would stop at 12 or 15 dairy farms each day and get a load of milk to go to a bottling or processing plant. Many farms now have to produce a full tanker of milk each day in order for a buyer to want their milk at all. Also, some dairy farmers have been notified that their milk buyer is going out of business, and sometimes another buyer can’t be found.Milk production is like any other commodity producing business, as the value or price migrates toward the cost of production over time. Right now 100 pounds of milk brings about $15 to the farmer. The farmer has to pay shipping which is about a dollar per hundred, netting $14. Very, very, very few dairy farms, new or old, large or small, hand-milking or robot-operated can survive more than two or three years on that kind of income. Many can’t make it until Thanksgiving.

That said, there were a couple weeks in August, 2017, and three or so weeks in May and June, 2018, where farmers, including me, had the opportunity to forward contract some or all of their milk on the Chicago Mercantile Exchange for $16 to $17. I stopped losses on half our milk at that time, but hindsight indicates I should have sold more milk or bought more put options. Forward contracts and option trading allow dairy farmers to mitigate risk and sometimes live to milk another day.

Right now, dairy farming is very unprofitable. However, over the course of a lifetime, milk production is often a better living than beef, pork, or cash grain production. Milking cows requires more dedication of time, and milk production is more sensitive to management than most of the other common farm products produced in the United States.



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Expert sees U.S. dairy industry creamed in trade disputes

 The ongoing trade frictions initiated by the United States have brought significant impact on America’s dairy products export, a U.S. expert in the dairy industry said.

If the disputes did not end soon, the United States would lose over 1 billion U.S. dollars as well as a lot of farmers, Jaime Castaneda, senior vice president of the U.S. Dairy Export Council, told Xinhua in a recent interview.


The U.S. dairy industry, which has been increasingly dependent on foreign markets after years of shrinking domestic consumption, has been stung by the trade disputes provoked by Washington.

The Trump administration’s new tariffs on many countries, including Mexico, Canada and China, major destination for U.S. milk products, have prompted retaliatory actions.

Retaliations from Mexico and China, two vital export markets for the United States, have brought damage to American dairy farmers and companies, said Castaneda, who has been in the industry for over 19 years.

Mexico, accounting for roughly one-fourth of total U.S. dairy exports, has recently added as high as 25-percent tariffs on American-made cheeses as a punishment of U.S. steel and aluminum tariffs. China has also imposed extra tariffs on imports of milk, butter, cheese and other products from the United States.

According to the U.S. Chamber of Commerce, the Mexican tariffs could affect as much as 578 million dollars in U.S. dairy goods and China’s tariffs could influence 408 million dollars of cheese, whey and other products.

The impact has already been felt. The milk futures have dropped “in a significant way,” Castaneda said.

“We are calculating that farmers may be losing between 1 billion to 2 billion U.S. dollars just in the next few months,” the senior staff at the non-profit trade council said.

“At this very moment, I don’t think we’re going to lose a lot of exports, but what we are going to lose are a lot of farmers,” he said.


Castaneda predicted that if the trade tensions cannot be eased soon, “it’s gonna to be a significant, significant problem for us.”

To voice their concern, more than 60 companies and organizations representing U.S. dairy farmers and cheese makers wrote a letter to U.S. President Donald Trump in late June, urging the administration to reconsider the imposition of new tariffs on Mexico.

U.S. farmers are “hard working individuals and normally they don’t complain,” Castaneda said.

“What they are asking now more than ever is to allow us to actually export our products,” he said.

Castaneda said that the Trump administration’s trade policy may boost the steel and aluminum industry in the United States, but the agricultural prices will surely be influenced negatively.

“You cannot choose one industry over another. We are manufacturing too,” the expert told Xinhua.

Castaneda pointed out that as U.S. dairy farmers and companies have already put a significant amount of investment into the overseas expansion, it will be very difficult to reverse the trend.


“China has been an amazing market and an amazing partner,” Castaneda said.

In 2017, the U.S. dairy industry exported an estimated 577 million dollars of products to China, a 49-percent increase on a yearly basis.

“We try to deliver to China the products that China is not necessarily producing and making sure the consumers in China actually have really good wholesome products at a reasonable price,” Castaneda said.

Castaneda said that over the past years, the dairy industry in the United States has evolved and changed significantly amid a diminishing domestic market and a growing demand in international consumption.

In March 2018, the export of U.S. dairy goods reached a new high, rising from 5 percent of the total production years ago to 17.3 percent.

“We are aiming at reaching 20 percent in the next five years,” Castaneda said.

However, given the current situation, the expectations are at stake.

“This is why it’s so important and we (should) resolve these issues sooner rather than later,” Castaneda said.


Source: New China 

Attention Members of the Dairy Industry: It’s time to take back the word “milk”!

The FDA is currently accepting public comments leading up to a public hearing that will be held on July 26, 2018 in regard to modernizing FDA’s statutory “standards of identity” to provide more flexibility.

Currently, the FDA’s standard of identity for the labeling of milk products mandates the product must be derived from a lactating animal (the standard of identity for “milk” is in the 21 CFR 131.110 — lacteal secretion, practically free from colostrum, obtained by the complete milking of one or more healthy cows).

It is crucial the dairy industry speaks up and ensures the FDA understands just how crucial it is for them not only to uphold their current standards of identity for milk, but to enforce these standards — restricting the use of the word “milk” on all future plant-based milk alternative product labels.

The dairy industry is in a state of crisis:

Dairy farms are going out of business at an alarming rate and the price of milk continues to decline. Meanwhile, the sales of plant-based alternatives are up 61 percent over the past five years and are projected to continue to gain market share into the future. As the consumption of fluid milk continues to decrease, we simply can no longer stand by and let deceitful plant- based alternative beverage marketing tactics slide by unchallenged.

It appears this FDA hearing could open the door to a new definition of milk, which would allow plant-based products to legally use the FDA standard when labeling plant-based alternative products. We must not let this happen. We are asking you to send in written comments and, if possible, testify in person at this hearing on: July 26, 2018 8:30 a.m. – 5:30 p.m. EST Hilton Washington DC/Rockville Hotel 1750 Rockville Pike Rockville, MD 20852. Electronic or written comments on this public hearing must be received no later than August 27, 2018. Your comments should be based on EPA’s request for consideration to modernize their standards of identity to provide more flexibility for the development of healthier products, while making sure consumers have accurate information about these food products.

Tell the FDA:

  • FDA must enforce the current standard of Identity for “milk” that is required under current law.
  • FDA must prohibit the use of the word “milk” from all future labels when describing plant-based alternatives that do not come from a lactating cow (such as plant or nut beverages).
  • The use of the word “milk” on labels of plant-based alternative products purposely misleads consumers to think they are purchasing milk. Consumers for years have understood the nutritional and wholesome value of consuming milk. Milk provides 30 percent of the daily recommended calcium intake for most of the U.S. population and is a primary source to provide 3 of the 4 under consumed nutrients of public health concern as identified by the Dietary Guidelines for Americans ( Calcium, Vitamin D and Potassium). Milk also contains 8 grams of complete, natural protein per 8 ounce serving. Intentionally allowing consumers to falsely believe they are buying a plant based product that will provide the same nutrition as milk is not only dangerous, it is deceitful.
  • The dairy industry has worked hard to establish standards to maintain consistency in milk products no matter the brand or the store the milk is purchased from. With color-coded milk fat percentage labels, consumers can bank on the fact that product will be the same every time they purchase it, no matter where it is purchased from. Allowing plant-based alternative products to call themselves milk and appear next to real milk in the dairy case only confuses consumers.
  • While the contents of plant-based alternative products contain a variety of gums, additives, stabilizers, and flavorings; milk, no matter the brand, always contains the same wholesome ingredients: milk, vitamin D, and vitamin A (if purchasing a reduced milk fat product). There is no standardization in the plant-based alternative product industry.


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