Archive for Dairy Industry

Dairy Girl Network Adds Two New Advisors to Board of Directors

Dairy Girl Network is excited to welcome two new advisors to the Board of Directors. The Dairy Girl Network Board of Directors is comprised of ten voting members along with three advisory members. These individuals are elected representatives serving as dairy farmers and industry professionals and they oversee the overall execution of the organization’s mission. In adding to the organization and supporting dairywomen through connections, encouragement and inspiration, DGN is delighted to announce the two new advisors: Dr. Kelly Reed of Washington and Anna-Lisa Laca of Nevada.

These new advisors join our current advisor Leah Ziemba of Wisconsin. In addition to the advisors, the DGN Board Members is comprised of Laura Daniels, Founder and President, of Wisconsin, Kristy Pagel, Vice President, of Wisconsin, LuAnn Troxel, Financial Officer, of Indiana, Carrie Mess of Wisconsin, Michelle Philibeck of Wisconsin, Sadie Frericks of Minnesota, Tami Smith of Pennsylvania, Michele Schilter of Washington, Katie Dotterer-Pyle of Maryland and Mary Knigge of Washington DC. These individuals are advocates for advancing women within agriculture and are dedicated to the mission and vision of Dairy Girl Network.

“As our organization continues to grow, we look for the expertise and guidance of our Dairy Girl Network advisors on our Board of Directors. Both Kelly and Anna-Lisa are brilliant and impactful dairywomen and their passion for the industry fit perfect with our organization and our vision and mission,” says Laura Daniels, Founder and President of the Dairy Girl Network. “Kelly brings a great wealth of knowledge as a skilled veterinarian and technical specialist, while Anna-Lisa brings a unique combination as she is a well-informed agriculture journalist, accomplished editor and also a dairy farmer. Our new advisors will both bring new knowledge and skills as advisors and will directly support the Dairy Girl Network in moving our mission forward.”

In the spring, Dairy Girl Network put out a call to add a veterinarian advisor to the Board of Directors, and after a nomination and selection process, Dr. Kelly Reed was designated by the Board. Kelly works for Diamond V as a Ruminant Field Technical Specialist in the Pacific Northwest. She was raised on a small family farm in upstate New York and received both her Bachelors of Animal Science and Doctorate of Veterinary Medicine degrees at Cornell University. Kelly has a special interest in calves and still serves as the consulting veterinarian for a 15,000 head calf ranch. Kelly said she has “a passion for the dairy industry specifically in education and collaboration, both within our industry and to our consumers. Dairy Girl Network provides a great opportunity to advance our industry in these ways and so much more. I am very excited for the opportunity to contribute!”

Our second new advisor comes from our partnership with our media sponsor, Dairy Herd Management. Anna-Lisa Laca is an accomplished agriculture journalist who reports on all things agriculture online and in print as the Online and Business Editor for Farm Journal’s MILK and Top Producer. She also owns and runs a dairy with her husband, Scott, and grew up on a West Coast cow-calf operation. Anna-Lisa shared, “It’s an honor to be involved in an organization committed to inspiring, empowering and enabling women to lead their farm businesses to new levels of success.”

With additional leadership and advisors, the Dairy Girl Network will continue to reach and support all women in dairy by connecting, inspiring and achieving. Learn more about the organization and the opportunities DGN offers at www.dairygirlnetwork.com.

Dairy Girl Network is made possible by Vision sponsors: Dairy Herd Management, Diamond V and Mycogen Seeds, in addition to support from Sustaining sponsors: DeLaval, DMI and Land O’Lakes.

The Dairy Girl Network connects all women of the dairy industry, encouraging ideas and camaraderie in an effort to achieve personal and professional development. Designed as a welcoming network of passionate women involved in dairy, relationships will grow through shared experience, support and inspiration.

 

Source: Hoard’s Dairyman

How Milk Is Really Priced in the U.S.

In the U.S., minimum milk price regulations enforced by Federal Milk Marketing Orders are based on a system of mandatory dairy price reporting, milk pricing formulas, price discrimination based on the end-use of raw milk and equity payments from a revenue sharing pool. A recent Market Intel, How Milk Is Priced in Federal Milk Marketing Orders: A Primer, reviewed milk pricing regulations under Federal Milk Marketing Orders.

This complex government framework of determining regulated milk prices that ultimately set the benchmark value of milk at the farm-level begins with price discovery in Chicago. The Chicago Mercantile Exchange has electronic spot markets for butter, cheddar cheese, nonfat dry milk and dry whey – the same products that are surveyed in USDA’s mandatory dairy price report (Background on National Dairy Product Sales Report).

Price Correlation with USDA Survey Prices

Reviewing the weekly average CME dairy spot market prices alongside USDA’s weekly National Dairy Product Sales Report survey prices for cheddar, butter and dry milk powders reveals a high degree of correlation – at or above 98% – for butter, cheddar and nonfat dry milk since 2010. For dry whey, the correlation is 65% from March 2018 to the present. In addition to the high degree of correlation, a regression analysis reveals that all USDA survey prices are statistically linked to CME prices from the prior two weeks. As a result, while not directly linked to USDA’s survey prices, CME settlement prices discovered in Chicago indirectly price all milk across the entire U.S. regulated on FMMOs.

Figures 1 through 5 highlight the strong price relationships observed between weekly average CME spot market prices and USDA’s dairy product survey prices for cheddar cheese, butter and dry milk products.

Expand Image
Expand Image
Expand Image
Expand Image
Expand Image

Trading Volume Relative to U.S. Dairy Product Production

Given the strong link between CME spot market prices and USDA’s survey prices, which are then used in federal milk pricing regulations, it is appropriate to evaluate the spot market trading volume relative to U.S. production levels. To provide this perspective, we compared the CME spot market trading volume over the last decade to U.S. dairy product and milk solids production.

From 2009 to 2018 there were more than 7,200 loads of butter traded on the CME spot market. Based on the maximum contract size, these loads represent approximately 313 million pounds of butter. Over the same period, nearly 18 billion pounds of butter were produced in the U.S. Thus, less than 1.7% of butter production was traded on CME spot markets.

Across cheddar blocks and barrels, approximately 573 million pounds of cheddar cheese was traded on the CME from 2009 to 2018. Meanwhile, U.S. cheddar production totaled 33.5 billion pounds – indicating that 1.7% of U.S. cheddar production was traded on the CME. Similarly, less than 1% of nonfat dry milk was traded on the CME, and in 2018 less than 1% of dry whey was traded on the CME.

Converting these dairy products to their milk solids equivalent indicates that approximately 785 million pounds of milk solids were traded on CME spot markets over the last decade. Compared to total solids production of 257 billion pounds, CME spot market activity represented 0.3% of total U.S. milk solids production – yet it was used as a benchmark to set regulated prices for more than 3.6 trillion pounds of milk. 

Expand Image

Price Discovery Using Spot and Futures

Reliance on futures markets for price discovery is common. For example, grain and oilseed prices are often quoted based on the futures price in Chicago, plus or minus the local basis. The local basis then changes based on regional supply and demand conditions. Cotton prices are linked to prices discovered through futures market transactions on the Intercontinental Exchange. Lean hogs and cattle also rely on futures markets for price discovery.

The difference in price discovery between dairy and the rest of the agricultural sector is two-fold. First, dairy is the only major U.S. commodity that uses (indirectly) CME spot markets in federally regulated pricing formulas. The connection between spot markets to FMMO milk prices may serve as a deterrent to adding trading volume and liquidity – hindering price discovery. Some participants may not be willing to engage in spot market transactions due to the impact it may eventually have on farm-level milk checks. For example, a dairy cooperative seeking to sell surplus cheese, butter or dry milk powders could risk driving commodity and milk prices further down based on the spot market transaction. In this scenario, the actions of the cooperative in the spot market could result in lower farm-level milk prices for all their farmer-members. This occurs only because CME spot market prices indirectly set milk prices.

Second, while the spot market provides an opportunity for buyers and sellers to transact and aids in futures market liquidity, this small sampling is then injected into the regulated milk prices used in FMMOs. The combination of end-product pricing formulas and USDA’s requirement that products sold under terms of a forward contract are excluded from mandatory price reporting results in only spot market transactions facilitating price discovery in FMMOs. Prices established under the terms of a forward contract – which is likely based off futures prices – are not surveyed under mandatory price reporting. As a result, the price discovery and liquidity from these markets have no impact on farm-level regulated milk prices.

Consider Expanding Mandatory Price Reporting

Farm Bureau analysis of USDA’s mandatory dairy product reporting revealed that less than 10 percent of the milk solids in the U.S. were captured in USDA’s survey over the last two decades. One reason is that mandatory price reporting excludes prices established under the terms of a forward contract, e.g., products sold for export typically have agreed upon prices and a later delivery date.

The rationale, some propose, is that regulated milk prices should be based off the current value of milk. But, could farmers share in the risk from a sales price agreed to 60, 90 or 180 days, or even a year, prior? If we are going to have end-product pricing formulas, why not capture more of the dairy market transactions and share in the risk through the revenue sharing pool? If dairy futures prices are truly unbiased, which we should agree they are, the risk sharing should wash out and would be unlikely to change the average long-run regulated milk price.

Expanding the risk sharing by including prices negotiated in a forward contract would increase the volume of products captured in USDA’s mandatory price survey. Moreover, by including both cash settlement and physical delivery transactions, price discovery in milk would be expanded to many more market participants. This would also reduce the impact of spot market transactions on milk prices and may reduce price volatility. Additionally, reducing the role of spot markets on milk price discovery could provide some dairy manufacturers cover to enter the spot market on a more frequent or permanent basis – thereby improving volume and price discovery in the spot market.

Expanding mandatory price reporting should not be considered in a vacuum, and perhaps the products survey should be reconsidered, it could be expanded to other products or used for other purposes such as surveying the value of milk solids. Maybe mandatory price reporting should not be used for regulating prices, but instead to facilitate price discovery in a competitively priced market. In either case, in considering an expansion of price reporting we must also contemplate other tweaks to the FMMO program designed to help modernize, simplify and improve milk pricing for the entire dairy supply chain.

Note: In January 2019, voting delegates to the American Farm Bureau Federation’s 100th annual meeting recommended to the AFBF board of directors that the organization convene a Farm Bureau- and producer-led coalition to review methods to restructure and modernize the current Federal Milk Marketing Order system. This article was prepared to inform that policy development effort. A background paper on CME dairy spot markets, including price settlement procedures and trading hours prepared for AFBF’s Federal Milk Marketing Order working group is available here.

Source: fb.org

Wisconsin dairy farmers are struggling to stay afloat

As Americans consume less milk and turmoil in international markets challenges the country’s dairy industry, many dairy farmers are struggling to stay afloat. In 2018, more than 2,700 dairy farms in the U.S. went out of business, with nearly a third of those closures taking place in Wisconsin, long-known as “America’s Dairyland.” NewsHour Weekend’s Hari Sreenivasan reports.

Source: PBS

China hold-up on dairy sales

A REFUSAL by China to accept dairy heifers from a now-clear bluetongue zone is continuing to cause headaches for northern Victorian producers.

A bluetongue zone was established in Bamawm in October, 2017, after bluetongue virus was detected in a number of 12-month-old heifers, but the temporary 100 km bluetongue zone was lifted on December 5, 2017.

However, 18 months later, China has not recognised the lifting of the exclusion zone and is still not accepting dairy cattle from the area.

For dairy farmers like Wyuna’s Phil Blain, it means there are even less options for people struggling in poor conditions.

“It doesn’t help not being able to sell into China,” Mr Blain said.

“It just takes the option away.”

He said it was particularly frustrating that cows and heifers from the exclusion zone could be bought “for much cheaper” by those in other regions, only to be kept on properties for six months and on-sold to China for more money later on.

Dairy Livestock Services manager Scott Lord said it was an ongoing issue, with poor seasonal conditions worsening farmers’ frustration.

“It’s put a lot of financial pressure on dairy farmers,” Mr Lord said.

“This time of the year would be the time they’d be looking to off-load suitable cattle, but a lot are carrying additional cows because of it.

“We’ve continually communicated with the Department (of Agriculture) and they are aware of the financial implications.

“Unfortunately it’s something that’s out of our control.”

A department spokesperson said a number of livestock export markets had specific requirements relating to bluetongue virus, including China.

“Exports of cattle to China must comply with their importing country requirements, which are outlined in China’s import conditions,” the spokesperson said.

“We are committed to working with all trading partners to ensure importing country requirements are met in all cases including our own.”

The department has previously held discussions with China on the issue.

The bluetongue virus was detected in three 12-month-old heifers near Echuca on October 14, 2017, during pre-export testing, before a further four heifers were found to be affected at the property.

The detection of antibodies in the heifers’ blood indicates previous exposure to BTV, with one heifer believed to have been exposed to the virus in NSW where it is more prevalent.

More than 2500 cows from 98 mobs were tested following the outbreak.

 

SourceTatura Guardian

USDA Now Making Payments for New Dairy Margin Coverage Program

Income-over-feed margin for May triggers fifth payment for 2019 

The U.S. Department of Agriculture’s Farm Service Agency (FSA) opened enrollment for the Dairy Margin Coverage (DMC) program on June 17 and has started issuing payments to producers who purchased coverage. Producers can enroll through Sept. 20, 2019. 

“Times have been especially tough for dairy farmers, and while we hope producers’ margins will increase, the Dairy Margin Coverage program is providing support at a critical time for many in the industry,” said Bill Northey, USDA Under Secretary for Farm Production and Conservation. “With lower premiums and higher levels of assistance than previous programs, DMC is already proving to be a good option for a lot of dairy producers across the country.  USDA is committed to efficiently implementing the safety net programs in the 2018 Farm Bill and helping producers deal with the challenges of the ever-changing farm economy.” 

Authorized by the 2018 Farm Bill, DMC replaces the Margin Protection Program for Dairy (MPP-Dairy). The program offers protection to dairy producers when the difference between the all-milk price and the average feed cost (the margin) falls below a certain dollar amount selected by the producer. To date, nearly 10,000 operations have signed up for the new program, and FSA has begun paying approximately $100 million to producers for January through May. 

May Margin Payment 

DMC provides coverage retroactive to January 1, 2019, with applicable payments following soon after enrollment. 

The May 2019 income over feed cost margin was $9.00 per hundredweight (cwt.), triggering the fifth payment for eligible dairy producers who purchase the $9.50 level of coverage under DMC. Payments for January, February, March and April also were triggered.  

With the 50 percent hay blend, FSA’s revised April 2019 income over feed cost margin is $8.82 per cwt. The revised margins for January, February and March are, respectively, $7.71, $7.91 and $8.66. 

Coverage Levels and MPP Reimbursements 

Dairy producers can choose coverage levels from $4 up to $9.50 at the time of signup. More than 98 percent of the producers currently enrolled have elected $9.50 coverage on up to 95 percent of their production history.

More Information 

On December 20, 2018, President Trump signed into law the 2018 Farm Bill, which provides support, certainty and stability to our nation’s farmers, ranchers and land stewards by enhancing farm support programs, improving crop insurance, maintaining disaster programs and promoting and supporting voluntary conservation. FSA is committed to implementing these changes as quickly and effectively as possible, and today’s updates are part of meeting that goal. 

For more information, visit farmers.gov DMC webpage or contact your local USDA service center. To locate your local FSA office, visit farmers.gov/service-locator

 

Source: USDA-FSA

Outstanding Youth Recognized as Distinguished Junior Members

Holstein Association USA recently recognized six finalists as 2019 National Distinguished Junior Members (DJM) at the National Junior Holstein Convention on June 27 in Appleton, Wisconsin. This is the highest honor a Junior Holstein member may receive and is based on outstanding work throughout their dairy project career.

The contest, held since 1922, has honored 374 outstanding dairy youth for their contributions to the Association and the dairy industry as a whole.

The finalists for this year’s competition are Allison Breunig, Sauk City, Wisconsin; Kalista Hodorff, Eden, Wisconsin; Brock Irwin, Belvidere, Illinois; Sarah Thomas, Pittsboro, North Carolina; Taylor Wolfe, Milton, Pennsylvania; and Lora Wright, Verona, Missouri.

(l-r): Sarah Thomas, Taylor Wolfe, Brock Irwin, Kalista Hodorff, Allison Breunig and Lora Wright

Applicants completed two judging phases. Phase one, the Junior’s entry book, is worth 60 percent of the final score. The book highlights the Junior’s Holstein work, activities and projects, breeding program and personal views.

Phase two takes place at the National Junior Holstein Convention, where the twelve semifinalists are interviewed by a second committee. The interview accounts for 40 percent of the final score. The six individuals with the highest combined scores were recognized at the Gala Banquet as Distinguished Junior Member Finalists and receive an annual renewed membership to the Holstein Association.

“The Distinguished Junior Member program is the longest running Holstein youth program. This recognition is coveted by Junior members working with Registered Holsteins across the United States,” Kelli Dunklee, Holstein Association USA & Holstein Foundation Program Specialist states. “These youth leaders excel at what they do each day and are phenomenal individuals in addition to being role models and spokespeople for the dairy industry.”

The Young Distinguished Junior Member (YDJM) Contest selected eight Junior members as finalists and were recognized at the National Junior Holstein Convention. The YDJM winners were judged on similar criteria to the Distinguished Junior Member Contest, but do not complete the interview phase.

The Young Distinguished Junior Members for 2019 are: Caroline Arrowsmith, Peach Bottom, Pennsylvania; Delana Erbsen, Lanark, Illinois; Austin Holcomb, Lithia, Florida; Kylie Konyn, Escondido, California; Brianna Meyer, Chilton, Wisconsin; Ainsley Noble, Lancaster, Wisconsin; Addison Raber, Gridley, Illinois; and Clarissa Ulness, Valders, Wisconsin.

For more information about Holstein Association USA’s youth programs, visit www.holsteinusa.com/juniors.

Holstein Association USA, Inc., www.holsteinusa.com, provides products and services to dairy producers to enhance genetics and improve profitability–ranging from registry processing to identification programs to consulting services.

The Association, headquartered in Brattleboro, Vt., maintains the records for Registered Holsteins® and represents approximately 30,000 members throughout the United States.

 

End of an era – last dairy operation leaves Powhatan County (Virginia)

An industry that helped shape Powhatan into the community it is breathed its last when the only remaining commercial dairy operating in the county recently moved to a neighboring locality.

After 15 years of operating a dairy in Powhatan County, Tommy Adkins recently made the decision to move his operation of 80-plus cows to Cumberland County and go into partnership with another dairyman, Glen Landis.

Adkins said he loved running a dairy in Powhatan since 2004 but couldn’t deny the benefits of pooling the resources of the two dairies – both in terms of labor and equipment.

“We could use the scale of economies. … He is probably milking 30 or 40 more cows. If you can take 250 cows and spread your costs out over more cows, you’ve got less pennies per cow involved in what each milking unit cost. It really was the only way I saw to be able to stay in the business and make it and him, too,” Adkins said.

While it is good to see Adkins’ dairy continue on, his departure means the end of an industry that was once an essential part of the local economy for decades, said Rachel Henley, a Powhatan County Cooperative Extension agent.

“It is significant because it shows a shift in the agriculture industry as a whole, but then also on the local level, especially when there were so many dairies at one point and it was a way of life and a career that was profitable,” she said.

Powhatan is not abnormal in this change. The dairy farming in Virginia has done the same thing over the last 30 years as the industry saw steady decline, said Robert Harper, a former extension agent.

In addition to the hard work and challenges of running a farm 365 days a year, small commercial dairies then and now hav to compete against a milk glut in the market; low milk prices versus increasing costs of farming, and the competition of alternative dairy products – made from soy, rice, nuts – just to name a few of the factors. There is also the issue of finding successors who want to take on all of that responsibility.

“There are like 500 Grade A dairies in Virginia now. That number is going down all the time and there are economic reasons. It is economics that brought the rise of the family 100-200 cow dairy that milked twice a day. People went into that business and made a good living at it. Then it all changed,” Harper said.

Advent of electricity

Dairy farming in Powhatan saw its heyday arise after the end of World War II, and if a farmer was willing to work hard, he could make a good living for his family, said Bob Cosby, who was a dairy farmer for 45 years.

Before the war, while most local farms would have had cows that produced milk for their families and others around them, the main industry related to dairy cows in Powhatan would have involved Grade B farms, he said. Unlike Grade A farms, which meet fluid grade standards, Grade B milk could only be used in cheese, butter and nonfat dry milk.

Many local farms would have been selling their milk to a cheese factory that was once located in the Village area or skimming the cream off and taking it to a creamery in Farmville, he said. The main hindrances to taking the business much farther was keeping the milk cool during storage and transportation.

“They milked by hand and cooled it in the springs and creek water – whatever they could to keep it cool,” Cosby said.

The turning point for dairy farming in Powhatan was the late 1930s and early 1940s, when efforts were made to bring electricity to the county, said Johns Bailey, a former Powhatan agriculture extension agent. This brought two huge technological advances to the dairy farmers – milking machines using vacuum pumps to do the milking and refrigeration to keep the milk cool.

With these systems, cows could be milked by machines that transferred the milk into refrigerated tanks, he said. The milk went through the entire process of being pasteurized and bottled without touching the air until a customer opens the container of milk.

Census data and how the dairy industry was tracked changed through the years, but the numbers still show some of the evolution, Henley said. In 1944, 220 farms in Powhatan sold dairy products worth $213,506. By 1949, there were 163 farms reporting they sold dairy products, but the income had jumped to $534,925.

By the 1970s, the number of dairies had dropped dramatically, but they seemed to stay steady between 26 and 27 through the census in 1987. Meanwhile, the income from dairy products sold continued to rise – from $2,211,000 in 1974 to $4,675,000 in 1982.

It wasn’t just the dairy farms, which provided good income for many local families, Bailey said. The industry also provided jobs through feed and fertilizer sales, veterinarian care, transportation, processing, and milk and dairy product sales.

“Usually you would say the money generated in a county like Powhatan went through three or four hands,” Bailey said.

Family traditions

Dairy farming changed Cosby’s life in the 1940s and ‘50s. His father, Robert A. Cosby, was raising hogs to sell for meat and doing general farming when a friend suggested starting a dairy. In 1949, he started a Grade B dairy, selling milk in 10-gallon cans to Birtchard Dairy in Amelia to make cheese and ice cream. But by 1952, Robert Cosby’s operation switched to Grade A milk, which brought in more money.

Bob Cosby remembered being in eighth or ninth grade when his father started his dairy. He and his brother, Gabe, would help with the work before and after school.

“I have milked 17 cows by hand and gone to school in this building,” he said, speaking of the Village building, which used to serve as a school. “There wasn’t any way you can get that smell off of you.”

He recalled how the check for the milk would come with the milk truck driver, and when his father got that first $600 milk check for two weeks worth of milk, he was over the moon.

“My brother and I were milking cows and had a few buckets of milk. Daddy was waving that check. He had never gotten that much before and he kicked both of those buckets of milk over,” Cosby said with a laugh.

Cosby went to Virginia Tech to study dairy science and graduated in 1959. He came home and went into business with his father. They were partners until Robert Cosby retired in 1969, at which point Gabe Cosby returned and joined his brother in the business.

Bob Cosby said he was a dairy farmer for 45 years, the last two just waiting for his brother to reach retirement age before they got out of the business together in 2004. That was the same year, Adkins started to rent the dairy operation and part of the farmland.

Cosby said he was fortunate that his family had focused on selling registered cows and breeding stock, because it supplemented his income during his years as a farmer and helped him get really good sale prices when he retired. His cows were sold to operations not only across the United States but in India and Russia.

Owen Walker’s history with dairy farming is similar to Cosby’s story. His father, G.A. Walker, started a Grade A dairy in 1942, also at the encouragement of another dairy farmer in the county. Young Owen was 2 at the time and grew up helping on the farm.

Walker has lived in Powhatan all of his life with the exception of four years at Virginia Tech, two years in the U.S. Army, and two years teaching as a certified vocational agriculture teacher in another locality.

At one point those different avenues represented the direction his life could take – a teacher, a military man or a dairy farmer. But while he did teach for several years at Huguenot Academy after starting up his own dairy farm in 1968, Walker said the farm is where he felt he belonged – “It was in my blood.”

“It was a lot of hard work, but if you managed right, back in those days you could make a good living,” he said. “I basically started on my own and it was tough. Daddy helped. We swapped equipment back and forth.”

Walker recalled the community of dairy farms in Powhatan, including seven within a mile of his house at one point.

Walker’s decision to retire from the dairy business in March 2006 wasn’t difficult, he said. He had four daughters who were interested in the work but found better jobs. He was also already getting into the beef cattle business.

“I was tired,” he said matter-of-factly.

Everything changes

When Bailey came to work as an extension agent in Powhatan in 1970, dairy farming “was the largest agricultural industry that we had in the county.”

“It had dropped some. But for Powhatan not being any larger, that was a pretty large number,” he said. “I would say middle 80s to early 90s, that is when the decline really started. That is when we were really getting the pressure from development from Richmond and milk prices started to decline.”

Farmers were largely outdone by their own efficiency, Cosby said. Breeding techniques and improvements to how they raised the cows led the animals to produce an overabundance of milk – so much so that a glut in the market was making it difficult for farmers to get decent prices.

There were programs that sought to help the situation, including a whole-herd buyout program, Bailey said. Farmers agreed to sell their whole herds for slaughter since simply selling them to another dairy wouldn’t have solved the issue of too much milk on the market.

The number of dairies in Powhatan continued to drop, according to census data. From 27 in 1987, the numbers just kept getting smaller: 16 in 1992; 14 in 1997; 10 in 2002; three in 2007, and one in 2012. That was Adkins.

Adkins started dairy farming 2004 in what he called his very own 40-year-old midlife crisis. At the time, he was the Select Sires representative for all southeastern Virginia. He and his wife, Andrea, wanted to raise their children in a country environment, and Adkins sincerely had a passion for raising cows.

So he took a leap. Cosby had just retired that year, so Adkins rented his dairy operation.

Adkins undertook the challenge at a time many would have called him crazy for doing so. Thousands of struggling small dairy farms across the nation had been selling out or going out of business for decades.

In addition to the hard work and challenges of running a farm 365 days a year, small commercial dairies still had to compete against a milk glut in the market; low milk prices versus increasing costs of farming, and the competition of alternative dairy products.

“I wasn’t scared of that. Anybody in this world that wants to make something or do something gets up at 4 a.m. and works 12 hours. If you want something, you go for it. Scared isn’t the right word. I have had a lot of anxieties over the years about whether it was going to rain or the crop was ever going to come, but I was never really scared about doing it based on what other people told me,” Adkins said.

Through the years, Adkins said he has experienced firsthand the struggles of a dairy with a midsize herd. To be profitable, many operations either have to grow exponentially or severely cut back and cater to the organic crowd.

“We could have sold cow shares. But I wanted to keep farming like I knew. I probably could have cut back to about 10 cows and grossed more money at the end of the year than with 100 cows,” he said.

He also knows he could probably be making more money driving an eight-hour shift in an air-conditioned truck, and not having to deal with the constant pressure of running a farm – although that has been relieved some by having a business partner to share the load.

“It is just not like that. Your heart has to be in it. If it was just the money, I would have quit all the way. I wouldn’t have relocated up here,” he said.

Source:  richmond.com

Rabobank says global dairy prices have peaked, putting pressure on dairy companies’ farmgate milk price

THE peak in the global dairy market appears to be over for this year, putting pressure on Australian dairy companies’ opening farmgate milk prices for the new season.

The Global Dairy Trade price index fell 0.4 per cent last week to $US3302 a tonne — the fourth consecutive fortnightly decline.

In its Agribusiness Monthly report released last week, Rabobank said the weakness in the dairy commodity market was not unsurprising.

“Large importers have accumulated short-term inventory cover following an aggressive period of buying activity,” the report said.

“At the same time, the northern hemisphere milk production season, while underwhelming, has now peaked.

“While the global fundamentals are supportive of elevated commodity prices, Rabobank is suggesting that the peak in the cycle has now passed.”

Rabobank has reiterated its expectation of an Australian milk price of $6.60/kg of milk solids, a price well below what large and smaller dairy processors are offering in Australia.

Rabobank senior analyst Michael Harvey said the discrepancy in prices was a function of local competition for anticipated smaller supplies of milk and the markets processors supplied.

“Processor margins are lower in terms of their earnings and gross margins on volumes of products they are producing are lower and that’s because they are paying more out in milk price,” Mr Harvey said.

“You can look at some companies and their milk pricing and rationalise that because you know their product mix is skewed more towards a high value domestic market or less commodity in their mix.

“There is a reminder, though, that a big volume of milk is sold into the commodity markets and the way we model it, that is only going to deliver $6.60/kg.”

Mr Harvey said that while markets had peaked, it could readily change.

“Production in the US is a bit lower than what we were modelling for because there are now some feed price pressures there,” he said.

“If weather has an impact on the New Zealand season next season and that is less than expected, then we could see a quicker recovery in (global) prices.”

Mr Harvey said irrigation farmers in Victoria’s north would continue to suffer from high water prices, with Rabobank expecting milk production in the region to decline by about 5 per cent.

Production in Gippsland and the Western District might help offset the decline in northern Victoria, but it would take some years to fully recover from the downturn.

“If you are heavily reliant on water or heavily reliant on buying in feed, that will have some margin pressure,” he said.

“Even if things shape up reasonably well in those regions that might fare better, it is still going to be a multi-year recovery.”

 

Source: The Weekly Times

New Oman dairy set to produce a million litres of milk a day

Mazoon Dairy is currently in the final stages of launching production in Oman

Oman’s first dairy project, which plans to produce a million litres of milk per day, is set to open within the next three months.

According to a report in the Times of Oman, the company is in the “final stages of launching production”.

Saleh Al Shanfari CEO of Oman Food Investment Holding Company (OFIHC) told the newspaper the company, Mazoon Dairy, would start producing 350,000 litres of milk per day, but targeted one million litres-a-day within ten years.

He said the farm has the capability for 25,000 cows, with a current, growing herd of 4,000 animals.

“The complexity and size of this unprecedented project in addition to the need to liaise with both local and international contractors has meant we are being cautious about naming our launch day, but having said this, I can assure you that our plan is to deliver the product to the market towards the end of the third quarter in 2019,” Al Shanfari was quoted as saying.

Al Shanfari also said bulk milk production has already begun and is being used for testing. At the same time, excess milk is being exported and sold locally to SMEs and major milk producers.

 

Source: Arabian Business

More Midwest farmers leave dairying

Inside the barn at the Groth family farm, the stalls are empty. The bedding is still there, but the cows are gone. Glen Groth’s family has been milking cows south of Ridgeway for 50 years. After earning a degree in dairy science, he became the third generation of dairy farmers in his family and the local Farm Bureau president in one of Minnesota’s top milk-producing counties. “That was my dream — to build a big dairy farm,” he said.

Sometimes life has other plans. This February, Groth and his wife made the difficult decision to sell their 62-cow herd, stop milking, and focus on crop farming. “It was emotionally wrenching, and it took place over the course of three years,” Groth said of the decision. “It was like putting your dog down. You know your dog is suffering, but still, you don’t want to take your dog to the vet,” he explained. Groth feels fortunate nonetheless. He didn’t have to search for a job in town, and he managed to sell his herd for a decent price. Groth and his family are now in a position to be more successful and have more free time. “We didn’t stop farming, and our farm financial situation is more stable for [the decision],” he stated. “It doesn’t mean I don’t feel bad about it a few times a day.”

Groth is not alone. Across Winona County and across the Midwest, years of persistently low prices have pushed dairy farmers to the point where many are leaving the industry and way of life. Between 2012 and 2017, the U.S. lost one-fifth of its dairy farms, according to the U.S. Department of Agriculture’s (USDA) Census of Agriculture. 

Wisconsin alone lost 2,736 dairy farms, while the number of Minnesota dairies fell by 1,211. In percentage terms, the decline was even more drastic in Winona County, where the number of dairies fell by a third, from 205 to 136 farms. Some of those former dairy farmers are now crop farming, raising beef, working off-farm jobs, or some combination.

Why are farmers leaving the dairy industry? “The margins haven’t been there,” Riverland Community College Farm Management Instructor Tom Anderson said. As some dairy farms continue to increase in size in order to achieve economies of scale, overall milk production is going up, he noted. However, that increased supply combined with tariffs, which limit the marketing of U.S. milk abroad, have created oversupply that depresses prices, Anderson explained. On top of that, many dairy farms — not just the largest ones — face major regulatory hurdles in expanding and modernizing their facilities, he stated.

Minnesota milk prices fell from over $26 per hundredweight in 2014 to under $13.50 last year. Ups and downs are normal in agriculture, but the recent slump in dairy profitability just won’t go away. “We’re in the fifth year of a three-year downturn,” Minnesota Department of Agriculture (MDA) Commissioner Thom Petersen said.

Since 2015, prices have rarely topped $18, according to the USDA. The Minnesota State Farm Business Management Program reported that the average cost of production on Minnesota dairies is $17.29 per hundredweight of milk. That means that, for four and a half years, Minnesota dairy farmers have rarely been able to make a profit on all their hard work. The Minnesota State Farm Business Management Program report found that the average dairy farm brought in a grand total of $14,729 in net income in 2018. Some categories of farms lost several thousand dollars on average.

“It’s been quite challenging for the last couple years when you can’t cover your costs and payments and labor,” Lewiston-area dairy farmer Duane Wirt stated. “It’s not easy mentally — getting up in the morning and knowing that each cow you milk is going to lose you money. And how long do you want to bleed red ink?” he added.

Wirt is an established dairy farmer, and despite the challenges, he said he is not getting out of the business anytime soon. “If you’ve got most of your bills paid and you’re not buying a farm or anything, you’re going to lose some equity, but your bills are paid, so you can keep plugging forward,” Wirt stated.

Groth is a younger farmer, and he said the investment needed to expand and modernize his milking operation proved to be a major challenge. “The problem when you’re trying to grow in the dairy industry is almost all of your investments are in infrastructure,” he stated. The tractors and equipment needed for crop farming can be re-sold at decent prices, but a $1-million barn is another story. “You can get pennies on the dollar when you try to sell it,” Groth stated. It is hard to finance capital improvements like a new barn in the first place when profit margins are so thin. “The principal and interest would eat up much of our income,” Groth said.

The loss of dairy farms has a ripple effect on the rural economy. When farmers switch from milking to raising crops, Anderson explained, “You don’t need a vet, you don’t the livestock supply places, you don’t need the equipment repair shops.”

Groth employed a part-time farm hand to help with milking and other livestock chores, but when he sold the herd to focus on crop farming, he no longer had work for his employee. “We normally have a full-time person for every 50 cows on a dairy farm. When you go to a crop farm, you maybe have a full-time person for every 1,500 acres,” Anderson stated.

“If we don’t have livestock in Southeast Minnesota, we’ll become a Southwestern Minnesota community,” Anderson stated. “A lot of those communities don’t have a gas station anymore. They don’t have a grocery store. And what happened? Well, they didn’t have livestock anymore.”

The federal and state governments are trying to offer some help to dairy farmers. The 2018 federal Farm Bill established a new dairy insurance program called Dairy Margin Coverage (DMC), which offers farmers insurance against drops in profitability. If profit margins drop below a certain level, the program will compensate milk producers. Catastrophic coverage against very, very low — and very unlikely — dips in profit margins is available for just $100 per year, and farmers can buy various levels of higher coverage. DMC replaces a similar program in the old Farm Bill, but federal officials say the new program will be more responsive to farmers’ needs and offer them better protection than the old one.

To encourage farmers to participate in the federal margin insurance program and to provide some immediate financial relief, the MDA rolled out its new Dairy Assistance, Investment, and Relief Initiative (DAIRI) last month. That program will offer a 10-cent-per-hundredweight payment to small- and mid-sized dairies — those with up to 60 million pounds of milk per year or around 775 cows — that enroll in the DMC for five years. The legislature appropriated $8 million to the program, most of which state officials expect will be spent making the first 10-cent-per-hundredweight payments. After that first payment, any remaining money will be divided between participating farms and the program will end. Farmers can apply for both DAIRI and DMC at local Farm Service Agency offices.

“This program is really focused on making sure medium and small dairy farms can stay in business when prices dip,” Assistant MDA Commissioner Whitney Place said. “The intent for this program was to incentive medium- and small-sized dairy farms to sign up for the [DMC] program for five years, and the additional goal is that they’ll be receiving a payment from the state that’ll help them hold on until federal payments come.”

Why spend money trying to save dairy farms? “In 2018, we lost about 300 dairy farms in Minnesota,” Place answered. “That’s just a number, but that loss is very real. It takes an emotional toll on farmers. We know we’re dealing with a lot of stress and mental health issues in our rural communities. That affects those rural communities, it affects the businesses on Main Street, and we think it’s worth investing in these small- and medium-sized dairy farms.” While the market is currently favoring larger dairy farms, smaller farms are not doomed, Place said. “Once prices come back up, some of these farms could make it. They just need to get through this dip,” she stated.

Back on the farm outside Ridgeway, Groth joked that he had become a spokesperson for selling one’s herd. It was an extremely difficult decision, but ultimately the right one, he said. “I thought in the back of my mind, ‘There are all of these people I admire and look up to that went through these dramatic career changes. They didn’t just stick with it no matter what. They made a change, and they’re better off for it,’” Groth said.

The declining number of dairies is not just a new phenomenon. Many of Groth’s neighbors have stories about when they sold their herd, he said. It may have happened 20 or 30 years ago, but all throughout the neighborhood there are people who went through the same experience, he stated.

Source: Winona Post

Drought An Unlikely Bonus For Cash-strapped Australian Dairy Farmers

Drought-affected milk supply is driving a bump in the price paid to Australia’s dairy farmers as processors scramble to secure product.

Paul Mumford, president of United Dairyfarmers of Victoria, said a reduction in milk supply, driven by the drought, had pushed up farmgate prices.

He said it was a relief for farmers that milk prices were now fair and equitable, but the increased price highlighted the Australian dairy industry was going through a tumultuous time.

“Because we have seen so many farmers leave the industry, the pressure is now on the pro cessors,” Mr Mumford said.

“They are scrambling for milk, which is good for dairy farmers but it is showing the stresses of the Australian dairy industry.”

New Zealand-owned dairy giant Fonterra revealed in May that the reduction in the Australian milk pool had forced a planned closure of its plant in Dennington, in the Western District of Victoria, near Warrnambool.

Fonterra said that like many processors and farmers across Australian dairy, it continued to feel the impact of industry structural challenges and a reduction in the milk pool, which led to excess processing capacity across the industry.

Mr Mumford said it was a “farmers’ market” right now as processors were already offering a counter-offer to their recent rec ord opening milk prices.

Fonterra recently raised its opening milk price for the new season by 20c to $6.80 a kilogram of milk solids. Bega Cheese increased its new season’s opening price by 15c to $6.75/kg MS.

Local farmers are now getting about 50c/kg MS more than the global price.

Investment bank Morgans outlined that it appeared that processors were overpaying for milk supply. Morgans analyst Belinda Moore said that on the back of dry conditions and significantly increased farming costs, Australia’s milk supply was expected to decline again in fiscal 2020, following a particularly challenging season in fiscal 2019.

“Falling milk supply and excess manufacturing capacity is leading to fierce competition for milk and causing dairy manufacturers to once again offer a farmgate milk price in excess of what it should be under more normal circumstances,” Ms Moore said.

Specialist agribusiness bank Rabobank recently lifted its milk price forecast. It outlined in its latest Global Dairy Quarterly report that tightening global milk supply, reduced stocks and solid demand meant market fundamentals remained strong for dairy exporters.

Rabobank senior dairy analyst Michael Harvey said in the report that despite the improving outlook for milk pricing, the challenge to begin rebuilding milk supply would linger into the new Australian season.

“Many dairy farm operators will need time to rebuild herds. With a return to profitability as milk prices improve, an immediate focus will be on repairs and maintenance ahead of major expansion projects,” Mr Harvey said.

Source: The Australian

8,000 years of drinking milk – the Ancient History of Producing Milk

Milk-producing mammals were an important part of early agriculture in the world. Goats were among our earliest domesticated animals, first adapted in western Asia from wild forms about 10,000 to 11,000 years ago. Cattle were domesticated in the eastern Sahara by no later than 9,000 years ago. We surmise that at least one primary reason for this process was to make a source of meat easier to get than by hunting. But domestic animals also are good for milk and milk products like cheese and yogurt (part of what V.G. Childe and Andrew Sherratt once called the Secondary Products Revolution). So―when did dairying first start and how do we know that?

The earliest evidence to date for the processing of milk fats comes from the Early Neolithic of the seventh millennium BC in northwestern Anatolia; the sixth millennium BC in eastern Europe; the fifth millennium BC in Africa; and the fourth millennium BC in Britain and Northern Europe (Funnel Beaker culture).

Dairying Evidence

Evidence for dairying―that is to say, milking dairy herds and transforming them into dairy products such as butter, yogurt, and cheese―is only known because of the combined techniques of stable isotope analysis and lipid research. Until that process was identified in the early 21st century (by Richard P. Evershed and colleagues), ceramic strainers (perforated pottery vessels) were considered the only potential method of recognizing the processing of dairy products.

Lipid Analysis

Lipids are molecules which are insoluble in water, including fats, oils, and waxes: butter, vegetable oil, and cholesterol are all lipids. They are present in dairy products (cheese, milk, yogurt) and archaeologists like them because, under the right circumstances, lipid molecules can be absorbed into ceramic pottery fabric and preserved for thousands of years. Further, lipid molecules which are from milk fats from goats, horses, cattle, and sheep can be easily distinguished from other adipose fats such as that produced by animal carcass processing or cooking.

Ancient lipid molecules have the best chance of surviving for hundreds or thousands of years if the vessel was used repeatedly for producing cheese, butter or yogurt; if the vessels are preserved near the production site and can be associated with the processing; and if the soils in the vicinity of the site where the sherds are found are relatively free-draining and acidic or neutral pH rather than alkaline.

Researchers extract lipids from the fabric of the pots using organic solvents, and then that material is analyzed using a combination of gas chromatography and mass spectrometry; stable isotope analysis provides the origin of the fats.

Dairying and Lactase Persistence

Of course, not every person on the earth can digest milk or milk products. A recent study (Leonardi et al 2012) described genetic data concerning the continuation of lactose tolerance in adulthood. The molecular analysis of genetic variants in modern people suggests that the adaptation and evolution of the ability of adults to consume fresh milk occurred rapidly in Europe during the transition to agriculturalist lifestyles, as a byproduct of the adaptation to dairying. But the inability of adults to consume fresh milk may also have been a spur to inventing other methods for using milk proteins: cheese making, for example, reduces the amount of lactose acid in dairy.

Cheese-Making

Producing cheese from milk was clearly a useful invention: cheese may be stored for a longer period than raw milk, and it was definitely more digestible for the earliest farmers. While archaeologists have found perforated vessels on early Neolithic archaeological sites and interpreted them as cheese strainers, direct evidence of this use was first reported in 2012 (Salque et al).

Making cheese involves adding an enzyme (typically rennet) to milk to coagulate it and create curds. The remaining liquid, called whey, needs to drip away from the curds: modern cheesemakers use a combination of a plastic sieve and a muslin cloth of some sort as a filter to perform this action. The earliest perforated pottery sieves known to date are from Linearbandkeramik sites in interior central Europe, between 5200 and 4800 cal BC.

Salque and colleagues used gas chromatography and mass spectrometry to analyze organic residues from fifty sieve fragments found on a handful of LBK sites on the Vistula River in the Kuyavia region of Poland. Perforated pots tested positive for high concentrations of dairy residues when compared to cooking pots. Bowl-form vessels also included dairy fats and may have been used with the sieves to collect the whey.

Source: ThoughtCo

Easterday family plans to re-open Oregon’s second-largest dairy

It’s been five months since Lost Valley Farm closed and sold off its remaining herd of dairy cattle. The facilities have now been scrubbed clean, and the massive free-stall barns await their new tenants.

Lost Valley’s owner had big ambitions when he opened the dairy in spring 2017 near Boardman, Ore. It was supposed to have 30,000 animals at full capacity, making it the second-largest in the state. Instead, it became a high-profile disaster as regulators cited more than 200 wastewater violations and its owner declared bankruptcy within a year.

Cody Easterday is aware of the controversy. At the same time, he believes the dairy will be successful with the right management and the right approach.

 

Easterday Farms purchased the property, including the buildings and infrastructure, for $66.7 million in February. The cattle had been sold at auction separately. A new corporation, Easterday Farms Dairy LLC, was registered with the state on March 20.

On July 1, Easterday Farms Dairy submitted an application to the Oregon Department of Agriculture for a new Confined Animal Feeding Operation permit, otherwise known by the acronym CAFO. The permit would allow Easterday Farms to reopen the dairy.

Based in Pasco, Wash., Easterday Farms is a fourth-generation, family-owned business with 70,000 head of beef cattle and 25,000 acres of potatoes, onions, grain and forage in the Columbia Basin.

As president of Easterday Farms, Cody Easterday said the company plans to invest $15 million in the dairy, including completion of a wastewater treatment system that was never finished under the previous owner and bringing the farm into full environmental compliance.

“It’s a state-of-the-art dairy. It just needs to be finished, and it needs to have the correct management,” Easterday said. “It will be a solid, environmentally sound dairy.”

First dairy

While Easterday Farms has decades of experience running ranches, farms and feedlots in Washington, this will be the family’s first foray into the dairy industry.

According to its CAFO application, Easterday Farms Dairy will have up to 28,300 cattle, though not all of those will be milking cows. The dairy lists 8,000 mature dairy cows and 2,650 dairy heifers housed under roof, along with 1,700 mature dairy cows and 5,950 heifers in open confinement.

Some 10,000 cattle will also be kept in open confinement for beef production.

“We’ve operated CAFOs in Washington,” Easterday said. “We understand it. We’re good, clean operators and we know what we need to do.”

In Oregon, CAFOs are jointly regulated by the state Department of Agriculture and Department of Environmental Quality. Permits must include an Animal Waste Management Plan that describes how the farm will handle large amounts of manure without contaminating groundwater or surface water.

Easterday Farms Dairy expects to generate roughly 5.4 million cubic feet of liquid manure, 5.9 million cubic feet of solid manure and 11.7 million cubic feet of processed wastewater annually. That’s enough manure to fill 128 Olympic-size swimming pools.

The dairy plans to recycle all that nitrogen-rich manure by using it as fertilizer on the surrounding farmland, growing irrigated crops such as potatoes, onions and wheat, as well as forage for cattle. Easterday said the manure will be applied at agronomic rates on 5,390 acres of cropland.

By operating in a closed-loop system, Easterday said the farm will reduce its purchases of commercial fertilizer by about 3 million pounds per year.

“We think that it’s going to work really well,” he said.

Permit review

Wym Matthews, CAFO program manager at the Oregon Department of Agriculture, said there is no timeline for reviewing Easterday Farms’ permit application.

Once the agencies have written a draft permit, Matthews said it will be made available for public review and a hearing. He suspects there will be a lot of interest in the Easterday Farms proposal, based on the fallout from Lost Valley.

“The site is exactly the same,” Matthews said. “The concerns, at least in our minds, are no different.”

The site is within the Lower Umatilla Basin Groundwater Management Area, designated by DEQ in 1990 for having elevated levels of groundwater nitrates that exceeded the federal safe drinking water standard. A coalition of environmental, animal rights and small farm advocacy groups opposed Lost Valley from the beginning, raising alarms over potential harmful impacts on air and water quality.

As the facility racked up violation after violation, the groups called for a moratorium on so-called “mega-dairies” until regulators could strengthen protections. So far, that has not happened.

In a written statement, the 13-member coalition urged Gov. Kate Brown “not to repeat the same mistakes and hope for a different outcome.”

“If Governor Brown’s Department of Agriculture has really learned the lesson of the Lost Valley disaster, it will not entertain another ‘too big to fail’ mega-dairy permit for nearly 30,000 cows on the same site,” the groups wrote. “Allowing a new mega-dairy in an area with existing groundwater pollution, water scarcity and air quality issues will only exacerbate these public health, economic and environmental harms.”

Completing infrastructure

Cleanup is still underway at the dairy, and Easterday said it’s gone smoothly. The milking parlor and barns were scrubbed down, and wastewater lagoons are gradually being emptied.

It’s a far cry from photos of Lost Valley that showed cows standing ankle-deep in manure, and reports of overflowing lagoons and illegal wastewater discharge.

Lost Valley owner Greg te Velde declared bankruptcy and lost control of the dairy — as well as two other dairies he owned in California — in September 2018 for reasons that ranged from cash flow problems to alleged gambling and drug abuse. A federal trustee, Randy Sugarman, was appointed to manage Lost Valley, overseeing the sale and cleanup.

Easterday Farms was the lone bidder at auction. Cody Easterday said it is “the right place and the right facility” for a dairy.

“I think all the pieces are here,” Easterday said as he toured the dairy last week with a reporter. “The initial design of the dairy is very solid.”

Waste from the cows is separated into solids and liquids. Liquid manure is held in open-air lagoons, which have the capacity to store 10.4 million cubic feet of liquid for up to 134 days during an average year. From there, it is pumped to irrigation pivots and applied on crops.

But Easterday said the system was never finished, meaning it could not reach enough land to accommodate the volume of manure the herd produced.

 

“Part of the issue with compliance is the waste system was not completed, and not adequate to some extent,” Easterday said.

Easterday said the farm will not bring any cattle onto the dairy until all the infrastructure is completed. Similarly, solid manure will be  kept on an impervious soil pad and used as fertilizer or composted for animal bedding.

Matthews, the CAFO program manager, said conditions of the dairy’s permit would likely follow the same general guidelines as Lost Valley, which at the time was held up as having the most extensive monitoring of any facility in the state.

“Once the facility is built and functional, our plan for a dairy this size would be to be out there (for inspections) three or four times a year,” Matthews said. Ordinarily, CAFOs are subject to an inspection every 10 months.

Community partners

At full capacity, Easterday said the farm and dairy combined will have about 100 employees, including new hires from local communities.

“We’re going to be the pride of Morrow County when we’re done here,” Easterday said.

Don Russell, a Morrow County commissioner, said he met with Easterday earlier this year and is confident the dairy can be run responsibly. He pointed to the success of Threemile Canyon Farms, located west of Boardman, as proof.

With 65,000 cattle, Threemile Canyon Farms is Oregon’s largest dairy. It opened in 2002 and supplies milk to Tillamook Cheese, which runs a plant at the nearby Port of Morrow.

Russell said the businesses offer good-paying jobs, and because of their large scale they can offer benefits that smaller dairies can’t — such as more regular work hours, and investing in technology such as methane digesters that  reduce air emissions and create renewable energy.

Problems with Lost Valley, Russell said, boiled down to management. In the end, he said the state’s regulators did what they were meant to do.

“We know it can be done right,” Russell said. “I think, locally, people understand that we had a guy who had an addiction problem, and didn’t do things right.”

Easterday said the dairy could consider a methane digester in the future, but that is not in the immediate plans. The goal, he said, is to open Easterday Farms Dairy by fall of 2020.

As envisioned, the dairy would produce 550,000 pounds of milk a day. He said they are still looking for buyers, but are confident in the dairy market.

Easterday said the farm is prepared for the scrutiny that will inevitably come with operating the dairy, and is looking forward to the opportunity.

“We knew the environment we were going to be in,” he said. “We’re prepared. We think we have a great story.”

Source: Capital Press

More farmers Midwest farmers leave dairying

After years of challenging prices, third-generation dairy farmer Glen Groth is one of many local farmers who made the hard decision to stop milking cows.

Inside the barn at the Groth family farm, the stalls are empty. The bedding is still there, but the cows are gone. Glen Groth’s family has been milking cows south of Ridgeway for 50 years. After earning a degree in dairy science, he became the third generation of dairy farmers in his family and the local Farm Bureau president in one of Minnesota’s top milk-producing counties. “That was my dream — to build a big dairy farm,” he said.

Sometimes life has other plans. This February, Groth and his wife made the difficult decision to sell their 62-cow herd, stop milking, and focus on crop farming. “It was emotionally wrenching, and it took place over the course of three years,” Groth said of the decision. “It was like putting your dog down. You know your dog is suffering, but still, you don’t want to take your dog to the vet,” he explained. Groth feels fortunate nonetheless. He didn’t have to search for a job in town, and he managed to sell his herd for a decent price. Groth and his family are now in a position to be more successful and have more free time. “We didn’t stop farming, and our farm financial situation is more stable for [the decision],” he stated. “It doesn’t mean I don’t feel bad about it a few times a day.”

Groth is not alone. Across Winona County and across the Midwest, years of persistently low prices have pushed dairy farmers to the point where many are leaving the industry and way of life. Between 2012 and 2017, the U.S. lost one-fifth of its dairy farms, according to the U.S. Department of Agriculture’s (USDA) Census of Agriculture.

Wisconsin alone lost 2,736 dairy farms, while the number of Minnesota dairies fell by 1,211. In percentage terms, the decline was even more drastic in Winona County, where the number of dairies fell by a third, from 205 to 136 farms. Some of those former dairy farmers are now crop farming, raising beef, working off-farm jobs, or some combination.

Why are farmers leaving the dairy industry? “The margins haven’t been there,” Riverland Community College Farm Management Instructor Tom Anderson said. As some dairy farms continue to increase in size in order to achieve economies of scale, overall milk production is going up, he noted. However, that increased supply combined with tariffs, which limit the marketing of U.S. milk abroad, have created oversupply that depresses prices, Anderson explained. On top of that, many dairy farms — not just the largest ones — face major regulatory hurdles in expanding and modernizing their facilities, he stated.

Minnesota milk prices fell from over $26 per hundredweight in 2014 to under $13.50 last year. Ups and downs are normal in agriculture, but the recent slump in dairy profitability just won’t go away. “We’re in the fifth year of a three-year downturn,” Minnesota Department of Agriculture (MDA) Commissioner Thom Petersen said.

Since 2015, prices have rarely topped $18, according to the USDA. The Minnesota State Farm Business Management Program reported that the average cost of production on Minnesota dairies is $17.29 per hundredweight of milk. That means that, for four and a half years, Minnesota dairy farmers have rarely been able to make a profit on all their hard work. The Minnesota State Farm Business Management Program report found that the average dairy farm brought in a grand total of $14,729 in net income in 2018. Some categories of farms lost several thousand dollars on average.

“It’s been quite challenging for the last couple years when you can’t cover your costs and payments and labor,” Lewiston-area dairy farmer Duane Wirt stated. “It’s not easy mentally — getting up in the morning and knowing that each cow you milk is going to lose you money. And how long do you want to bleed red ink?” he added.

Wirt is an established dairy farmer, and despite the challenges, he said he is not getting out of the business anytime soon. “If you’ve got most of your bills paid and you’re not buying a farm or anything, you’re going to lose some equity, but your bills are paid, so you can keep plugging forward,” Wirt stated.

Groth is a younger farmer, and he said the investment needed to expand and modernize his milking operation proved to be a major challenge. “The problem when you’re trying to grow in the dairy industry is almost all of your investments are in infrastructure,” he stated. The tractors and equipment needed for crop farming can be re-sold at decent prices, but a $1-million barn is another story. “You can get pennies on the dollar when you try to sell it,” Groth stated. It is hard to finance capital improvements like a new barn in the first place when profit margins are so thin. “The principal and interest would eat up much of our income,” Groth said.

The loss of dairy farms has a ripple effect on the rural economy. When farmers switch from milking to raising crops, Anderson explained, “You don’t need a vet, you don’t the livestock supply places, you don’t need the equipment repair shops.”

Groth employed a part-time farm hand to help with milking and other livestock chores, but when he sold the herd to focus on crop farming, he no longer had work for his employee. “We normally have a full-time person for every 50 cows on a dairy farm. When you go to a crop farm, you maybe have a full-time person for every 1,500 acres,” Anderson stated.

“If we don’t have livestock in Southeast Minnesota, we’ll become a Southwestern Minnesota community,” Anderson stated. “A lot of those communities don’t have a gas station anymore. They don’t have a grocery store. And what happened? Well, they didn’t have livestock anymore.”

The federal and state governments are trying to offer some help to dairy farmers. The 2018 federal Farm Bill established a new dairy insurance program called Dairy Margin Coverage (DMC), which offers farmers insurance against drops in profitability. If profit margins drop below a certain level, the program will compensate milk producers. Catastrophic coverage against very, very low — and very unlikely — dips in profit margins is available for just $100 per year, and farmers can buy various levels of higher coverage. DMC replaces a similar program in the old Farm Bill, but federal officials say the new program will be more responsive to farmers’ needs and offer them better protection than the old one.

To encourage farmers to participate in the federal margin insurance program and to provide some immediate financial relief, the MDA rolled out its new Dairy Assistance, Investment, and Relief Initiative (DAIRI) last month. That program will offer a 10-cent-per-hundredweight payment to small- and mid-sized dairies — those with up to 60 million pounds of milk per year or around 775 cows — that enroll in the DMC for five years. The legislature appropriated $8 million to the program, most of which state officials expect will be spent making the first 10-cent-per-hundredweight payments. After that first payment, any remaining money will be divided between participating farms and the program will end. Farmers can apply for both DAIRI and DMC at local Farm Service Agency offices.

“This program is really focused on making sure medium and small dairy farms can stay in business when prices dip,” Assistant MDA Commissioner Whitney Place said. “The intent for this program was to incentive medium- and small-sized dairy farms to sign up for the [DMC] program for five years, and the additional goal is that they’ll be receiving a payment from the state that’ll help them hold on until federal payments come.”

Why spend money trying to save dairy farms? “In 2018, we lost about 300 dairy farms in Minnesota,” Place answered. “That’s just a number, but that loss is very real. It takes an emotional toll on farmers. We know we’re dealing with a lot of stress and mental health issues in our rural communities. That affects those rural communities, it affects the businesses on Main Street, and we think it’s worth investing in these small- and medium-sized dairy farms.” While the market is currently favoring larger dairy farms, smaller farms are not doomed, Place said. “Once prices come back up, some of these farms could make it. They just need to get through this dip,” she stated.

Back on the farm outside Ridgeway, Groth joked that he had become a spokesperson for selling one’s herd. It was an extremely difficult decision, but ultimately the right one, he said. “I thought in the back of my mind, ‘There are all of these people I admire and look up to that went through these dramatic career changes. They didn’t just stick with it no matter what. They made a change, and they’re better off for it,’” Groth said.

The declining number of dairies is not just a new phenomenon. Many of Groth’s neighbors have stories about when they sold their herd, he said. It may have happened 20 or 30 years ago, but all throughout the neighborhood there are people who went through the same experience, he stated.

Source:winonapost.com

Former Westland Dairy shareholders fighting for $11 million

A group of former Westland Dairy shareholders is fighting for millions they are owed.

Shareholders voted to sell the co-op to Chinese dairy giant Yili yesterday, for $588 million.

Former suppliers says they are owed $11 million from shares not yet paid out.

The group’s spokesman, Peter Williams, told Mike Hosking Westland Dairy is hiding from its original pay-back commitment.

“Essentially that debt which is owed to us will transfer as an unsecured credit, interest free to the new Chinese entity until 2023.”

Nearly 94 percent of shareholders voted in favour of the sale to Chinese dairy giant Yili.

Grey District mayor Tony Kokshoorn says it’s sad to see the company change hands, but he says the farmers have made the right decision.

Kokshoorn says rather than death by a thousand cuts, they’ve decided to accept the takeover bid and move on.

The deal now needs approval from the Overseas Investment Office and the High Court to get across the line.

 

Source: Newstalk ZB

Tougher NZ bank capital rules could slice 10% from dairy profit

Stricter bank capital requirements would severely dent dairy farm profits if the Reserve Bank goes ahead as planned, warn dairy interests in submissions on the contentious proposals.

“Our initial estimates are that the proposals could – at least in the short term – result in approximately a 10 percent decrease in profit for the agriculture sector,” Rabobank New Zealand said in its submission.

The Reserve Bank this week released almost all of the 161 written submissions on proposals requiring lenders to hold more high-quality capital to mitigate the impact of a severe financial crisis. It plans to publish a response and the final decisions on the proposals in November.

The central bank wants to set a tier 1 capital requirement equal to 16 percent of a lender’s risk-weighted assets for the big four and 15 percent for all other lenders. The current requirement is for 8.5 percent, a 6 percent minimum plus a 2.5 percent buffer, although the banks’ current equity is around 12 percent.

Federated Farmers got ahead of the curve, releasing its submission early and backing the New Zealand Bankers’ Association, which has been lobbying for the regulator to rein in its plans.

Members of the dairy sector argue that the capital requirements will lift lending costs and see more conservative lending policies. Agricultural lending stood at $63.5 billion at the end of May, with around two-thirds assigned to the dairy sector.

The proposed increase, together with the increased risk-weighed asset allocations to agricultural debt, will have “a significant adverse impact on the dairy and wider agriculture sectors,” said Fonterra Cooperative Group in its submission. Of the dairy group’s $7.75 billion of total borrowings, it holds about $1.95 billion of bank debt.

Fonterra said the proposals come at a time when farmers are already struggling with non-debt related costs, reduced access to capital and rising interest rates. “Some farmers are at risk of becoming financially unviable and may eventually be forced to exit dairying.”

This impacts regional economies and puts Fonterra at risk of reduced milk supply and underused and/or stranded assets, it said.

The proposed five-year implementation period is also extremely short, it said.

Fonterra commissioned research showing the extra cost to the average farm would be $50,794, based on interest rates being 125 basis points higher. Because most farms pay interest only, if they shifted to include principal repayments, the extra cost would jump to $155,558 per farm.

Dairy Holdings, which operates 75 farms in the South Island, said some trading banks are already hiking interest rates by up to 50 basis points on fixed term loans and margins above wholesale floating rates when existing debt matures.

It said there is a significant risk of a “perfect storm” where banking margins increase by 100 or more basis points due to extra capital costs and higher customer risk ratings, tighter credit sapping land market liquidity, and a milk price shock triggering a massive deterioration in all asset values.

Dairy Holdings recommends the RBNZ implement the increase in capital costs over a longer period of time than is currently proposed or at least have the option to extend the time period if required.

The Dairy Women’s Network also voiced concern about the impact on farming families and called on the RBNZ to carefully reconsider reducing the requirement of capital from a 200-year shock to 100 years or to transition the change over an extended period of time to allow our farming businesses to adjust.

DairyNZ said not enough work has been done.

“As an organisation, we believe that: the minimum level of a bank’s money coming from its owners should not change until a more robust analysis of the economic impacts associated with changing them has been undertaken.”

The industry group’s analysis shows “an additional interest cost of $200 per hectare or $31,000 per farm is likely be borne, assuming an increase of 100 bps.”

The total annual cost to dairy farms is likely to be $347 million, or 9 percent of annual dairy farm profit.

If a 100-basis point impact is assumed, it suggests that around 4 percent of farmers will become insolvent, it said.

“Overall, DairyNZ believes that the proposed change in capital-adequacy ratios for New Zealand banks outlined … lacks a credible and transparent evidence base.”

Synlait Milk said the proposals have the potential to see more limited access to credit and higher funding costs.

“Whilst we don’t see this having a material direct impact on Synlait (or the institutional banking sector), this will have implications for Synlait’s farmer suppliers,” it said in its submission.

“In our view, any moves towards the adoption of increased bank capital requirements should be made with caution, given the likely unintended consequences to certain sectors. As a minimum, we ask that the RBNZ undertake a comprehensive cost/benefit analysis of the proposals as they apply to the agri sector before any further steps are taken.”

The central bank has appointed three external experts to independently review the analysis and advice underpinning its bank capital proposals.

The external experts are being asked to decide whether the problem that the capital review is seeking to address has been well specified and whether the Reserve Bank adopted an appropriate approach to evaluate and address it.

They are also being asked to review the inputs to the review and to decide whether the analysis and advice has taken into account all relevant matters, “including the costs and benefits of the different options.”

 

Source: Scoop

Dairy industry funds coffee bars in schools to create a buzz for milk

A coffee stand at Cypress Creek High School in Orlando, Florida. The district did not receive dairy industry grants for its coffee bars, but the local dairy council provided the signs and menus.

Coffee bars selling $3 iced lattes are popping up in high schools, helped along by dairy groups scrambling for new ways to get people to drink milk.

It’s one small way the dairy industry is fighting to slow the persistent decline in U.S. milk consumption as eating habits change and rival drinks keep popping up on supermarket shelves.

At a high school in North Dakota, a $5,000 grant from a dairy group helped pay for an espresso machine that makes lattes with about 8 ounces of milk each. The drinks used 530 gallons of milk this year.

“We buy a lot of milk,” said Lynelle Johnson, food service director for the Williston Public School District.

It’s not clear how much coffee drinks in high schools might help boost milk consumption. But with consumption of milk in the U.S. down 40% since 1975, the dairy industry is looking for all the help it can get.

The industry famous for its “Got Milk” advertising campaign hopes its newer “Undeniably Dairy” slogan will help fend off the almond, oat and soy alternatives that are becoming popular. Regional dairy groups are encouraging schools to serve milky drinks like smoothies and hot chocolate, as well as iced lattes.

The efforts come as the dairy industry is also trying to adjust to changing views about diet and nutrition.

With fat no longer seen as a dietary evil, skim milk has suffered the sharpest declines in demand in recent years. And it’s difficult for dairy producers to reduce production of skim milk because it is left over after making other products such as butter and cheese .

As skim milk becomes tough to sell, Organic Valley is even drying some of the surplus and mixing it back into low-fat and fat-free milk to boost the nutrients and make it creamier.

“We’re just exploring everything we can,” said George Siemon, who was CEO of Organic Valley when the plans were developed.

The dairy industry blames rules that limit the fat content of milk in schools for consumption declines, arguing that generations of students are growing up disliking milk because of the watery taste of skim.

In the meantime, it’s hoping that lattes can make milk go down easier. In Florida, a dairy group said it paid for coffee carts in 21 high schools this past school year. In the Southwest, a dairy group gave grants to seven schools .

Schools in Orange County, Florida, have used coffee drinks to get students to buy lunch. For an extra $2, students can turn the cup of milk served with lunch into a coffee drink at a nearby cart. Without the lunch, it costs $3.

The Orange County schools did not receive industry grants for the coffee bars, but the local dairy council provided chalkboard-style signs and menus.

Cafeteria directors and dairy groups say coffee drinks in schools have to follow nutrition standards, making them healthier than the lattes students would get anyway outside schools.

The U.S. Department of Agriculture, which sets rules for schools participating in its meal programs, says high schools can sell espresso drinks that are no bigger than 12 ounces, and that are made with fat-free or 1% milk. The drinks have around 150 calories, school food directors say.

But not everyone thinks teens should drink coffee, or that they need milk.

The American Academy of Pediatrics discourages caffeine consumption among children, citing potentially harmful effects on developing bodies. And while dairy is an efficient way to get calcium and vitamin D, it’s not the only way to get such nutrients, said Dr. Natalie Muth, a pediatrician and representative for the American Academy of Pediatrics.

Exactly how schools prepare coffee drinks can vary, but milk is a primary ingredient for lattes. “It’s really milk with some coffee, as far as proportion,” said Julie Ostrow of Midwest Dairy.

It’s why the group is providing a grant for a coffee bar at a fourth high school in the Fort Zumwalt, Missouri, district for the coming school year.

But the group might not be happy about a newer option: This past year, the district’s coffee bars began offering almond milk for 40 cents extra, said Paul Becker, the district’s food director.

Source: omaha.com

Milk and dairy products can help prevent chronic disease

An adequate consumption of milk and dairy products at different life stages can help prevent various chronic diseases. For example, there is a positive link between the moderate intake of milk during pregnancy and birth weight, length, and bone mineral content during childhood. In addition, a daily intake of milk and dairy products among elderly people may reduce the risk of frailty and sarcopenia.

These are just some of the conclusions of a systematic review of 14 articles dealing with the role of milk and dairy products in the prevention of chronic diseases. The findings of the review were recently published in Advances in Nutrition, the third most important scientific journal in the world in the field of Nutrition and Dietetics.

The review was conducted by scientists from different Spanish, European, and American universities, and coordinated by Professor Angel Gil of the University of Granada (UGR) and Professor Rosa M. Ortega of the Complutense University of Madrid. The work was funded via the European Union project H-2020 No. 734451 and supported thanks to the collaboration of Spain’s Interprofessional Dairy Organisation (INLAC).

The study reviews worldwide scientific literature on the role of dairy products in health and in the prevention of chronic diseases (cardiovascular, metabolic syndrome, colon or bladder cancer, and type 2 diabetes). It also examines the effects of dairy products on growth, bone mineral density, generation of muscle mass, and during pregnancy or breastfeeding. Milk and dairy products contain multiple nutrients and contribute to meeting the nutritional requirement for protein, calcium, magnesium, phosphorus, potassium, zinc, selenium, vitamin A, riboflavin, vitamin B12, and pantothenic acid. Yet the consumption of dairy products is on the decline, falling short of the level recommended in many countries, as the potential benefits of milk and dairy products are starting to be questioned.

This review, coordinated by the UGR, aims to evaluate and synthesise the scientific evidence on the effect of milk and dairy product consumption in terms of health and prevention of various chronic diseases and all-cause mortality, bearing in mind the importance of maintaining an adequate quality of diet in the different stages of the life cycle. The evidence gathered in the study is based on the findings of meta-analyses and systematic reviews of observational studies, randomized controlled trials, and reviews.

Dairy products and chronic diseases

This review synthesizes the current scientific evidence pertaining to various topics of great interest to the scientific community. All refer to articles dealing with systematic review and/or meta-analysis, based on different types of study design. The topics studied in depth include:

Effect of milk and dairy product consumption during pregnancy and breastfeeding.

Effect of dairy product consumption on the height and bone mineral density of children.

Consumption of milk and dairy products and risk of mortality.

Effect of milk and dairy product consumption on the risk of frailty and sarcopenia, and cognitive performance in older people.

Effect of milk and dairy product consumption in the prevention of osteoporosis and osteoporotic fractures.

Consumption of dairy products in the prevention of metabolic syndrome.

Effect of milk and dairy product consumption on type 2 diabetes.

Effect of milk and dairy product consumption on cardiovascular diseases.

Association between dairy product consumption and the risk of colorectal cancer in adults.

Consumption of milk and dairy products and the risk of prostate cancer and mortality.

Consumption of milk and dairy products and the risk of bladder cancer.

Consumption of milk and dairy products and inflammatory biomarkers.

The role of fortified dairy products in cardio-metabolic health.

The researchers also found that a higher intake of dairy products presents no clear association with a decrease in total osteoporotic fracture or hip fracture risk, but there is an association with decreased vertebral fracture risk.

In the analysis of the differences between high vs. low consumption of dairy products, no association was identified between dairy product consumption and increased risk of mortality. The total intake of low-fat dairy products was associated with a reduced risk of metabolic syndrome, supporting the view that the consumption of dairy products does not increase the risk of cardiovascular disease and could have a slightly protective effect.

Inverse associations were observed between dairy product consumption and ischemic heart disease and myocardial infarction. Current scientific evidence also suggests that the consumption of such products, especially low-fat dairy and yoghurt, may be associated with a lower risk of type 2 diabetes.

It has also been shown that moderate consumption of this food group is associated with a lower risk of colorectal cancer and bladder cancer, while no associations were found for prostate cancer. Nor has the intake of milk or dairy products been shown to demonstrate a proinflammatory effect on overweight or obese individuals, or on those presenting other metabolic abnormalities.

Fortification of dairy products with phytosterols and omega-3 fatty acids appears to constitute a suitable strategy for improving cardiometabolic risk biomarkers.

 

SourceEurekAlert!

Brent Young Receives 2019 Young Jersey Breeder Award

Brent Young, Dallas, Wis., received one of six Young Jersey Breeder Awards given by the American Jersey Cattle Association in ceremonies June 28, 2019, during the association’s 151st Annual Meeting in Canton, Ohio.

The Young Jersey Breeder Award is presented to individuals or couples who are at least 28 years old and under the age of 40 on January 1 of the year nominated, who merit recognition for their expertise in dairy farming, breeding Jersey cattle, participation in programs of the American Jersey Cattle Association and National All-Jersey Inc., and leadership in Jersey and other dairy and agriculture organizations.

Young is the third generation to operate the all-Jersey herd at Dority Valley Dairy. Since 2004 he has been a partner with his father. His focus remains on improving the herd by expanding and updating facilities, expansion using only home bred replacements, increasing cow comfort and using milk testing to guide culling decisions. By these efforts, the 100 cow milking herd has been maximized for production and longevity. Their current actual rolling herd average is 17,932 lbs. milk, 867 lbs. fat and 639 lbs. protein.

Outreach to dairy consumers is another aspect Young strongly believes in. He started a Facebook page for the farm in 2012 to give the public an insider’s perspective on a working Jersey operation. They discuss many common farming topics and the uniqueness of the Jersey breed which has gained them a lot of interaction and positive discussion while portraying honest, accurate information.

In addition to his duties on the home farm, Young is active on the state and parish levels of the Wisconsin Jersey Breeders Association serving as both a past president and director at large. He and his wife, Tara, have also opened their farm to the community hosting and supporting farm-to-table events that promote the Jersey breed and agricultural industries.

The American Jersey Cattle Association was organized in 1868 to improve and promote the Jersey breed. Since 1957, National All-Jersey Inc. has served Jersey owners by promoting the increased production and sale of Jersey milk and milk products. For more information on its programs and services, visit www.USJersey.com or call 614/861-3636.

 

High input cost creating difficult challenges for Australian dairy industry

Last month’s National Dairy Farmer Survey held a spotlight over farmers’ views of their own industry. And the image was dark.

Only 34 per cent of dairy farmers felt confident about the future of our industry, while just 43pc expect to turn a profit this year.

Yes, farmers can expect an above-average price for their milk this season, courtesy of the increased competition among processors to fill their stainless steel. But the rising cost of feed and water due to the ongoing drought continues to outstrip any earnings.

Hay is now fetching up to $478 a tonne in regions such as north-west Tasmania, while farmers on the Darling Downs in Queensland can expect to pay as much as $563 a tonne for grain.

The cost of irrigation water is also skyrocketing. The 12-month average price of water in Northern Victoria was $353 per megalite to April 2019, a 255pc jump on last year. In the Murray Irrigation System, water prices jumped 260pc to $337/ML. Spot water prices have soared above $600/ML.

This is simply outrageous. But while nearly two thirds of farmers remain concerned about the cost and availability of feed and water, there is no indication that prices will come back down.

In fact, all signs point to a brutal few months and we should all do our best to prepare. The Bureau of Meteorology is forecasting dry weather will persist at least until the end of September with just a 30pc chance of average rainfall over the next three months.

The BOM has predicted above average temperatures, putting the chance of exceeding average maximum heat levels at 80pc.

Rabobank has lowered its forecast for wheat production by more than 11pc, to 21.2 million tonnes, down from its March estimate of 23.9 million tonnes and 14pc below the 10-year average.

All of this translates to scarce feed over the next few months, and the possibility that fodder prices could go further north.

This difficult situation will no doubt further erode farm profit margins at a time when farmers are most feeling the pinch.

Farmers are making every effort to address cost pressures on their businesses, ensuring they make the most efficient use of their production systems, but there is a limit to what is achievable, and this is only a short-term solution.

The federal government and individual state governments are offering assistance for rural communities, especially those suffering through drought.

At the federal level, this includes the farm household allowance, rural financial counselling service to help develop an action plan for managing finances, and the drought communities program.

I would encourage anyone feeling the pressures of the volatile climatic conditions to consider your options for government assistance.

But despite the poor outlook – looking at the broader picture – there is still some good news for our industry.

Domestic dairy consumption in Australia is strong, with per capita consumption among the highest in the world. Supermarket sales of major dairy products are generating value growth.

Global commodity markets remain well-balanced, supported by a 3.2pc increase in global demand in the past year and growth in key markets such as China and South-East Asia.

The dairy industry is also developing an industry-wide Australian Dairy Plan to define priorities for the next five years. My hope is that the Dairy Plan, in seeking to maintain an industry that is confident, united, and profitable, will address the unprecedented volatile conditions, including farm input costs, afflicting our industry.

I understand that, for many, it is difficult to think beyond the present when your businesses are suffering from factors outside your control.

But we must also think about what we want our industry to look like in the future. It is a difficult task, but we must try to navigate the divide between the reality of today and the optimism of the future.

 

Source: North Queensland Register

Dairy Farmers of America eyes merger with US dairy cooperative

The board of directors of St Albans Cooperative Creamery (SACC) has voted unanimously to recommend to its membership a merger with Dairy Farmers of America (DFA).

Vermont-based SACC said the merger proposal reflects a desire to position SACC members “for a secure, long-term future amid rapidly changing market dynamics”.

The proposed merger requires approval by SACC’s members, who will be asked to vote during a special meeting in late July.

DFA said the merger provides its members with established customer relationships, investments in critical hauling and manufacturing assets in the northeast of the US and increased milk marketing activities in the region. SACC has been a member cooperative of DFA since 2003.

“DFA and St Albans have always had closely aligned philosophies and values, with both cooperatives focused on providing value to members and committed to preserving the northeast tradition of family dairy farming for years to come,” said Brad Keating, senior vice president and chief operating officer of DFA’s northeast area.

Harold J Howrigan, chairman of the SACC board of directors, said: “Our board has been working nearly two years to strategically plan for the future of our members.

“With increasing shifts in customer needs, an imbalance in supply and demand and a volatile milk price cycle, it is clear change is needed for our cooperative; however, with change comes great opportunity.

“DFA offers increased value to our members with the ability to make continued investments in operations, a clear vision for the future and the depth of leadership to carry out that vision.”

Leon Berthiaume, SACC chief executive officer, added: “I have seen the dairy industry evolve and the continued need for dairy farmers to work together. DFA has been a strategic partner and I am very enthusiastic about what they will bring to our members, community and state.”

Last year, DFA secured a deal to acquire Agropur’s facility in Saint Paul, Minnesota, to expand its extended shelf-life capabilities and introduce aseptic processing into its portfolio.

Dairy industry needs USMCA

The United States-Mexico-Canada Agreement (USMCA) would benefit many commodity groups throughout the United States. For instance, free trade with Mexico and Canada is worth $1.8 billion to the beef industry, and the pork industry has exported $700 million worth of product to Canada and Mexico. However, one industry that the USMCA would benefit the most within Iowa is the dairy industry.

I recently had the opportunity to attend a roundtable event with former U.S. Secretary of Agriculture Tom Vilsack, and he stressed the importance of the USMCA to protect farmers and their resulting exports. Regarding dairy exports, Mexico and Canada are the two biggest markets for these products from the U.S. In 2018, the U.S. exported $1.4 billion in dairy products to Mexico and $731 million in dairy products to Canada. There are many people across the country that are dependent upon this industry for their livelihoods, including many people in Iowa.

Secretary Vilsack is now the president of the U.S. Dairy Export Council, and he has stressed the importance of the USMCA to the dairy industry. Canada currently restricts imports of dairy products using tariff-rate quotas, which can be as high as 315.5%. Canada also adopted their Class 7 milk price classification to address their surplus skim milk supplies that came along with the strong demand for butter within the country. Class 7 includes skim milk components that are used when processing dairy and made it so skim milk products were cheaper to produce within Canada. Thus, the U.S. lost their exports of high protein, ultra-filtered milk to Canadian cheese and yogurt processors. Ultra-filtered milk exports to Canada have also decreased from $107 million in 2015 to $32 million in 2018. This is hurting thousands of dairy producers across the U.S.

With the USMCA, Canada would eliminate the Class 7 pricing six months after the USMCA is first enforced. The USMCA would also ensure that Canada has more transparency regarding their laws and regulations on how they price their milk, their processing margins, and their yield factors.

The U.S. currently dominates the dairy market in Mexico. In fact, dairy products from the U.S. accounted for 80% of Mexican dairy imports in 2018. The dairy market in Mexico keeps increasing, which makes it attractive to many U.S. competitors. The U.S. relies upon the Mexican market to keep their export numbers high. Passage of the USMCA is necessary to protect the U.S. advantage in the Mexican market.

Dairy exports create a lot of jobs within Iowa and benefit the state’s economy as a whole. There are 1,501 Iowa jobs created by dairy exports, which generates $118 million. The Iowa dairy industry also has a $323 million impact on Iowa’s economy. The demand for Iowa dairy products is increasing, so it is vital that there is tariff-free trade among the countries in North America to ensure that trade-supported jobs are maintained.

Secretary Vilsack has stressed that ratification of the USMCA by Congress could provide momentum to reach new agreements with China, which has recently placed retaliatory tariffs on U.S. dairy exports. Because of these tariffs, exports to China have dropped by more than 40% in the first quarter of 2019 compared to the same quarter last year. The U.S. needs to resolve this dispute so dairy exporters can effectively compete within the Chinese market.

Clearly, the USMCA is vital to keep the U.S. dairy industry exports and profits high. We need our members of Congress to ratify the USMCA now.

 

Source: The Courier

Murray Darling plan pushing desperate farmers to the brink

Bart Doohan wraps an arm around his teenage daughter, Hayley, as they look out across their empty dairy. Hayley lets the tears flow. At 17, this is her first harsh taste of injustice.
 
The Doohans have put their farm near the small Southern Riverina town of Blighty, New South Wales, up for sale after gradually destocking in recent months.
 
The last of their cows were loaded onto a truck and sent to the meat works in a crushing blow to a family that’s already in “dire straits”.
“The dairy industry is in such turmoil there was no option to send our cows to other dairy farms,” Bart said.
 
The last irrigation season was the nail in the coffin for the Doohans’ operation. Under the Murray Darling Basin Plan, they were on zero water allocation, meaning they didn’t receive any water under their fixed entitlement. 
 
And with losses of up to $3 million over the past 18 months, they couldn’t afford to buy water on the temporary market to keep the operation running.
 
“Every dairy farm in this area is going backwards and we just can’t keep sustaining that,” Bart said.
 
There’s a cruel twist to the water crisis on the Murray. They may have been impacted by drought over the past 12 months, but at the height of the last irrigation season there was an abundance of water in the region. The two main dams were more than 50 per cent full while the Murray itself was flowing fast past their properties.
 
But under the MDBP, that water was pushed downstream to South Australia where landholders received 100 per cent of their allocations, leaving NSW Murray farmers high and dry. 
 
According to Murray Dairy, 72 dairy farms are operating in the NSW Murray region, down from 89 during the 2017-18 irrigation season. But farmers who are more acutely aware of operations in the regions, say that number is more likely to be around 30.
 
And on July 1, South Riverina dairy farmers received the unsurprising news that “due to the severity of the drought” they’ve once again been denied an allocation for the next season, which for many will be their last. 
 
The Murray Darling Basin Plan is driving a key agricultural sector to extinction as New South Wales dairy farmers, like Bart Doohan, walk off their properties at record rates.
 
Accusations of mismanagement and misleading science have dogged the Murray Darling Basin Authority and the evidence is piling up against them.
 
In a report released last month, The Australia Institute outlined how the Murray Darling Basin Authority failed to comply with its own objectives by denying an allocation to NSW Murray general security holders, while flooding the Barmah-Millewa forest and draining the Menindee Lakes.
 
“While everyone else in the Basin was dealing with drought, the MDBA created a flood and lost large volumes of water,” said Maryanne Slattery, senior water researcher at The Australia Institute.
 
The farmers I met in the Southern Riverina are beyond the tipping point. They’re desperate and living on borrowed time. They want the 2012 Plan to be paused for the sake of their survival. But governments are staying the course, promising to deliver the plan in full.
 
Making matters worse, city-based traders who don’t own agricultural land are pricing farmers out of the temporary water market.  
 
Lachlan Marshall uses a poker analogy to describe his family’s dilemma.
 
“Four generations of the same family and we’re all in,” he said.
 
Lachlan, 38, and his brother Adam, 36, are milking 900 cows three times a day on their property near the Doohans. 
 
They’re only just holding on, but at a huge price. 
 
Between October and late December last year the Marshalls spent $1 million on water on the temporary market, where prices are at record highs. 
 
“The price has gone up exponentially and it’s been driven up by speculators and traders … who are making astronomical profits off the hardship of people who are trying to make a living,” said Lachlan Marshall.
 
They say water on the temporary market reached a spike of $650 per megalitre last year; up from $30 dollars per megalitre when they moved to the region in 2006.
 
“These people are leaving the industry and they’re leaving burnt and jaded and angry and they’re not coming back,” Lachlan Marshall said.
 
“There’s a real concern for our nation’s food security unless we’re happy as a nation to be buying overseas food.”
 
Another season on zero allocation will likely spell the end for this fourth-generation operation.  But they won’t walk off their farm without a fight, which is why the brothers have joined a class action.
 
Barooga farmer, Chris Brooks, is leading the action, accusing the MDBA of negligence and mismanagement, which has cost up to 1800 landholders a total of $750 million.
 
“The payout will compensate for the losses last year but the main objective is to take the MDBA to account,” said Brooks.
 
The MDBA claims water was sent downstream to South Australia to meet environmental commitments.  But severe erosion at the Barmah Choke and along the banks of the Murray River are evidence that the Basin Plan is causing major environmental damage.
 
The Australia Institute report shows that 1700 gigalitres of water was wasted by flooding the Murray system, which would have been enough to provide an allocation to Southern Riverina dairy farmers.
It’s no wonder calls for a royal commission into the MDBP are growing louder. An independent review, at the very least, is critical to the survival of yet another endangered Australian industry.
 
The plan is a mess. It’s based on questionable science. And by failing to act, the federal government is allowing wealthy traders to reap enormous profits at the expense of farmers who can’t make ends meet.
 
There’s an opportunity now to find a better, more equitable way to manage water in Australia. If that opportunity is not seized, the death of the dairy industry will become a dark legacy for the Prime Minister in years to come.
 
 
Source: 9news

Westland Milk chairman disputes that management bonuses are a conflict

Westland Milk Products chairman Pete Morrison has defended planned bonus payments to his senior management team if the sale of the co-operative to a Chinese buyer goes ahead.

Morrison took issue with Stuff‘s reporting of the incentive plan, which would see the company’s executive staff collectively pocket well over $1 million if the deal goes through when farmer shareholders vote on it on July 4. Chief executive Toni Brendish stands to receive $680,000, with other executive staff in line for payments from $100,000 to $360,000.

Morrison disputed descriptions by some commentators that the payments were a conflict of interest. He argued that it was Westland’s board that would approve the proposed deal, and board members would get no benefit from the incentive scheme.

“The concept that senior management has said yes to the Jingang tranaction because of their entitlements under the management incentive plan is… incorrect and irrelevant,” Morrison said.

He also provided more detail about the payment of the incentives to the senior managers. He said 15 per cent had been paid on Westland’s entry in to the scheme implementation agreement with Jingang/Yili. Sixty per cent would be paid on implementation, and the remaining 25 per cent after six months, provided the manager was still employed by Westland. 

He said Stuff‘s reporting that the incentives were negotiated when the Jingang/Yili offer was made last year was incorrect, as the bid was not confirmed until March this year. He also disputed that Jingang would be paying the bonuses, although he acknowledged that the outstanding 85 per cent would be paid by Westland under Jingang ownership, if the sale went ahead.

Investment bank Macquarie’s fees for its part in organising the sale had been reported as $5.8 million even if the sale didn’t go ahead, and more if it did. That information was from a shareholder source. Morrison dismissed the figure but declined to say how much Macquarie would receive as a success fee. It would be on “typical market standard terms” and would “effectively be for Jingang’s account” as the new owner.

Source: Stuff

Brent Wickstrom Receives 2019 Young Jersey Breeder Award

Brent Wickstrom, Hilmar, Calif., received one of six Young Jersey Breeder Awards given by the American Jersey Cattle Association in ceremonies June 28, 2019, during the association’s 151st Annual Meeting in Canton, Ohio.

The Young Jersey Breeder Award is presented to individuals or couples who are at least 28 years old and under the age of 40 on January 1 of the year nominated, who merit recognition for their expertise in dairy farming, breeding Jersey cattle, participation in programs of the American Jersey Cattle Association and National All-Jersey Inc., and leadership in Jersey and other dairy and agriculture organizations.

Wickstrom is the third generation to operate Wickstrom Dairy Farm alongside his father and grandfather. He manages the reproductive and mating decisions with an emphasis on high production and components with a long productive life and high reproductive efficiency. They have a current actual rolling herd average of 19,043 lbs. milk, 939 lbs. fat and 729 lbs. protein on 2,403 milking cows.

Under Wickstrom’s guidance, the herd began an IVF program in 2014 with the goal to improve GJPI using embryos from the highest genetic value animals based on genomic merit. Since then they’ve done about 1,000 embryo transfers each year. They have also established an IVF collection center on-site at the dairy and hold oocyte collections every other week. The animals created via IVF average +250PTAM, +12PTAF and +10PTAP higher than their natural conception herdmates.

A graduate of Cal Poly San Luis Obispo, Wickstrom earned his degree in dairy science with a minor in ag business and crop science. During his college career, he was active with Los Lecheros Dairy Club and Dairy Challenge. He is a sire committee member of Jerseyland Sires and in 2018 received the California Jersey Association Young Jersey Breeder Award.

The American Jersey Cattle Association was organized in 1868 to improve and promote the Jersey breed. Since 1957, National All-Jersey Inc. has served Jersey owners by promoting the increased production and sale of Jersey milk and milk products. For more information on its programs and services, visit www.USJersey.com or call 614/861-3636.

 

George A. Miller Chosen as Distinguished Leadership Award Recipient

Jeff Ziegler accepts award on behalf of George A. Miller

A defining mark of leadership is the ability to look ahead, identify opportunities and take action to move them forward. This year’s Distinguished Leadership Award recipient, George A. Miller of Columbus, Ohio, has dedicated his career to advancing dairy cattle genetics, and improving productivity for farmers around the world.

It only takes one decision to change a life, or an entire breed, forever. August 30, 1965 is a day that George will never forget. On a farm 50 miles west of Washington, D.C., Round Oak Rag Apple Elevation was born — a sire that would forever influence the Holstein breed. George proposed the magical mating to his cousin, Ronald Hope, because he recognized something special in that genetic combination.

From the day he was born, Elevation stood apart, and he would go on to become a global breeding phenomenon. With more than 80,000 daughters and at least 2.3 million granddaughters, Elevation is known as the most influential dairy bull ever born. It is estimated that more than 95 percent of all Holstein animals worldwide can trace their bloodlines back to Elevation. None of this would have been possible without George’s vision of what could be, and his determination to see it through.

Hailing from Virginia, George grew up helping on his uncle’s Round Oak Farm. He and Ronald worked with the milking herd, and it was there that George developed an interest in the breeding aspect of the herd and pedigrees of Holstein cattle.

In 1943, George graduated as salutatorian from Lincoln High School in Virginia. He went on to study dairy husbandry at Virginia Polytechnic Institute (VPI) and graduated in 1952 with his bachelor’s degree. During his time at VPI, he worked as the dairy’s herdsman and was the dairy science club president. Thriving on education, George received his master’s degree in dairy science from VPI in 1956.

After graduation, George joined the Virginia Artificial Breeders Association (VABA) as a fieldman. He was soon promoted to sales manager and then to general manager. While manager, George oversaw many new developments and changes to the dairy and A.I. industry.

During his tenure, VABA converted from liquid semen production to a 100 percent frozen semen product. Together with other A.I. managers, he created United Semen Exchange. This allowed small A.I. organizations, and the dairymen they served, to access a wider selection of sires from across the country.

Sharing his talents and enthusiasm with Virginia breeders, George enjoyed offering advice on matings to help develop a sound herd. Respecting a farmer’s time and finances, George directed the development of Do-It-Yourself insemination programs, so farms could reduce the costs of incorporating A.I. in their herds.

A lifelong student of Holstein ancestry, George is respected by Holstein enthusiasts everywhere. Retired in 1996, his example continues to inspire the dairy community and its leaders. George is a strong advocate for the U.S. Holstein cow and enjoys sharing the opportunities presented by top U.S. Holstein sires to cattle breeders.

George’s 40-year career in the A.I. industry, coupled with the revolutionary Elevation sire, has been an incredible contribution to the Holstein breed and the entire dairy community. His commitment and vision will continue to inspire for generations to come.

About the Award

This award recognizes an individual who has made a career of providing outstanding and unselfish leadership for the betterment of the dairy industry. Miller received the award at the recent National Holstein Convention in Appleton, Wisconsin.

Holstein Association USA, Inc., www.holsteinusa.com, provides products and services to dairy producers to enhance genetics and improve profitability–ranging from registry processing to identification programs to consulting services.

The Association, headquartered in Brattleboro, Vt., maintains the records for Registered Holsteins® and represents approximately 30,000 members throughout the United States.

 

Holstein Association USA Holds Board Meeting in Appleton

The Holstein Association USA, Inc. (HAUSA) board of directors met June 23-24, 2019 in Wisconsin. Chaired by President Boyd Schaufelberger, the business meeting was held in conjunction with the 134th Annual Meeting and convention at the Red Lion Hotel Paper Valley.
 
Committee and management staff reports
 
The board heard reports from the Audit, Genetic Advancement, International, and Type Advisory committees.
 
The Board approved a recommendation from the Type Advisory Committee to investigate adding rear legs-side view back into the foot and leg composite at an appropriate weighting and a recommendation from the Genetic Advancement Committee to research formulating a dollar value for TPI® as a secondary number.
 
The Board heard an update on two genetics research projects which are currently underway and funded by the Holstein Association.
 
Dr. Christian Maltecca of North Carolina State University is the primary investigator for the research project which utilizes genomic information to increase genetic gain and minimize the unfavorable effects of inbreeding in the U.S. Holstein population. Lead researcher, Dr. Anna Denicol of the University of California-Davis is overseeing another project looking at breeding Holstein cows for heat tolerance using the slick hair gene.
 
The Association is currently inviting research grant proposals with expected outcomes to benefit the profitability of Holstein cattle. Research may involve traditional production disciplines of genetics, nutrition, or reproduction as well as dairy foods or economics. The submission deadline is August 15, 2019. Applications will be reviewed, ranked, and the successful project announced later in the year.
 
Management staff updated the board of directors on the 2019 Management-by-Objective business plan and financial report.
 
Other news
 
During a dinner on June 24th, the board honored outgoing President Boyd Schaufelberger of Illinois and Director Mark Kerndt of Iowa.
 
Newly-elected President Corey Geiger of Wisconsin took the chair during a reorganization meeting of the board on June 27th. The board welcomed newly-elected Vice President Jonathan Lamb of New York, and Director Spencer Hackett of Minnesota (Region 6), along with returning Directors Steve Keene of Maine (Region 1), Benjamin Newberry of Georgia (Region 4), and Peter Dueppengiesser of Wisconsin (At-Large). Officers serve two-year terms, and directors serve three years.
 
 

Specialty Milk EQUALS Money Everyday!

Milk lost some of its unique identity over sixty years ago! When bulk on-farm pickup rolled in the lane differentiation was sacrificed for one truck convenience. Premium milk for fat content or other specific composition no longer reached the processor’s door. 

Guernsey Gold, could no longer be sold for its high carotene content as milk from Guernseys became  simply part of the load of milk from all dairy herds in an area.  Back then milk was primarily considered as a liquid drink and the need for keeping unique milks identified separately was given no importance.

“Set Yourself Apart or Be Set Aside”

The market and the consumer have both evolved. Today consumers want to know that what they are purchasing will have a positive effect on themselves and their families. Meeting these changed needs means that producers, of generic milk, will have a very narrow profit window. The choices for success, for those producers, have dwindled down to a small list:

  1. Size up so that you profit from economies of scale
  2. Use technology to minimize labor and to assist management practices.
  3. Fine tune feed preparation, feed composition and feed delivery to cut costs or differentiate.
  4. Breed beyond production and conformation to produce value-added milk.

Milk’s future value (2025+) will be highly dependent on its solid’s makeup or methods of production. Over 80% of milk, once processed, will end up in solid form. The dairy industry needs to re-think the way milk is bred for, fed for, transported and processed. However, as we all know, changing those factors does not happen suddenly. With future needs for milk and its solids in mind, The Bullvine promotes for consideration, discussion, planning and production, milk that will be used for solids, new and specialty purposes.

“Analyze What You Are Producing Or Paralyze Your Profits”

Every week at The Bullvine we join our dairy industry peers in thinking, writing and talking about the future of dairy farming.  As a milk producer, you live it every day.

A recent US study reported that the reason almost 85% dairy operations will go out of business will be because of one or a combination of poor management, lack of application of the economies of scale and/or not keeping up with the times in consumer demands.

Productivity and profit will be key contributors to on-farm success.  Most often dairy farmers think and talk about cost reduction but even more critical than squeezing every last penny out of costs is the revenue generated by the milk that leaves the farm. The dairy industry, farm to fork, has evolved. Keeping up with change is not a choice.  It is a necessity.

 “Want More Money!  Provide More Processor Value”

The first rule for the processor of a product is that the value of the product to the consumer rules the day. For most dairy farms their immediate consumer is the processor.

 If the value that the processor can derive out of the milk that leaves your farm is the base product price, then expect the current approximately $15-16(US) per cwt to continue.  Below the true on-farm COP.

The value of milk will be set by consumers not by dairy farms.

  • Only if the processor can make higher valued products from milk received can farms expected to get a 10% to 30% higher farm gate price.
  • Only for a limited number of dairy farms that self-process, will producers be the price setters.

Tomorrow’s Consumers’ Demands

As we move forward healthy low-cost grocery store foods will continue to be demanded by consumers and governments will continue to support and demand cheap food. Only foods that meet specific health, nutritional or lifestyle needs will be able to be priced higher than the base in-store price.

New products made from milk are being sought out all the time.. Groceries can be ordered on-line and delivered just in time to people living in developed countries. Milk products need to fit into that evolving model.

Where is Your Milk Value Added?

How many of these can you check “Yes” to when your milk leaves the farm gate?

Fat % composition or processing

  • -full fat milk ,
  • unique butters,
  • specialty cheeses,
  • unpasteurized or unique milks

Protein Composition

  • beta casein (A2 allele),
  • kappa casein (B allele)

Feeds

  • organic
  • forage (grass) fed
  • carbon footprint reduced

 Management

  • totally traceable,
  • animal health and welfare (including dehorning),
  • favorable animal environments,
  • clean water source,
  • farm with pristine industry image,
  • grown locally,
  • milk haulage pooling for differentiated milk,
  • data management system to support verification,
  • DNA testing for breeding, culling, feeding and marketing …

Denying the need to add a unique feature to the milk that leaves a farm will mean the farm is not keeping up with the times. Consumers buy on features not just on basic nutritional need.

“Value Added Indexes are Here.  Use them.  Develop Them. Ask for More.”

The following are some genetic factors/ indexes that will help milk processors derive more income from the milk producers ship. Most of these have become available during this century and farmers can expect more of these value-added indexes to become available in the future.

  • Fat %
  • Casein composition – A2A2, BB
  • Reproduction – conception, calving ease, embryonic survival, haploid avoidance, …
  • Polled and sound functional feet
  • Health – DW$, CW$, Immunity+, Feet/Heel/Mobility, combined health trait indexes (CDCB/CDN), …

Producers who do not use this information are continuing to hitch their futures to horse and buggy days instead of going modern and meeting consumer demands. There are many sires, reasonably (semen) priced, with high NM$ (over $800) or Pro$ (over $2000), that have the consumer demanded characteristics and are above breed average for all traits or indexes. There is absolutely no need to use sires not in the top 25% of the breed for all economically important traits.

Is it Too Late or Are You Too Tired?

NO, not too late, … but … it is time to stop the procrastination in expanding trait selection. Delaying or denying the inclusion of value-added traits in sire or embryo selection will result in the milk shipped being of less value to processors. 

The Bullvine Bottom Line

Shipping milk off farm that milk processors can sell at an increased price (to build their margins) will be very important to the future viability and sustainability of dairy farms.  Producers, when selecting their future genetics, need to move past what has governed their past selection practices and think first of consumer needs and demands.

 

 

 

Get original “Bullvine” content sent straight to your email inbox for free.

 

 

 

 

The 2019 Mid-Year Global Dairy Business Review

See the significant mergers, acquisitions, joint ventures, new facilities, executive hires and marketing initiatives for the first six months of 2019.

The U.S. Dairy Export Council tracks global dairy business developments every day from news media and other sources around the world. We curate and summarize the most important items in our weekly, members-only newsletter, Global Dairy eBrief.

In January and July, we bundlethe newsy nuggets we have been collecting and put them into a single roundup article like the one below. These reports typically attract high readership, proving their popularity and usefulness.

Below is the 2019 Mid-Year Global Dairy Business Review. It’s your one-stop, one-of-a-kind archive of the most important global dairy business developments in the first half of 2019. 

We begin with news from our January 4 newsletter and end with our June 28 edition. We put company names in bold for easy scanning because this blog post is long—about 9,800 words.

Look for the full-year 2019 Global Dairy Business Review in January.  

January-2

Nestléis planning a push into the plant-based food market, starting with a vegan “burger” under the label Garden Gourmet. The company is currently experimenting with plant-based beverages—one made from walnuts and blueberries, another featuring spirulina algae. Nestlé hopes to grow plant-based product sales to more than $1 billion within the next decade. (Bloomberg, 12/28/18)

Fire damaged one of the buildings at Hilmar Cheese Co.’sHilmar, California, manufacturing site just before the new year. Fire officials estimated the fire caused about $2 million in losses, although Hilmar has not confirmed the figure . . . China’s Yili Grouprolled out a new logo as part of a brand upgrade aimed at strengthening its presence in the international marketplace. For more on the logo and to see what it looks like, click here. (Fresno Bee, 12/29/18; Reuters, 12/17/18)

Major manufacturers continue to launch and/or expand distribution for plant-based products meant to replace dairy. Here are some of the latest developments: (1) Both Chobaniand Danoneintroduced coconut-based “yogurt” lines in the U.S. this month. The Chobani offering comes in nine flavors; Danone will market its line under the OikosDanone said it expects plant-based “yogurts” to eventually comprise 10 percent of yogurt sales. (2) Danoneis also set to launch its Silk vegan oat “milk” under the brand name Oat Yeahthis month across the U.S., while Califia Farmswill roll out Oat Barista Blendin February followed by an unsweetened oat beverage variety in April. (3) Unileveris expanding its Magnumvegan “ice cream” bars to Australia after debuting it in select European countries. The product—in classic and almond flavors—is made from pea protein and coated in vegan chocolate. (4) Pea protein supplierRoquetteexpects to open a $300-million pea protein plant—reportedly the world’s largest—in Manitoba, Canada, later this year, and is exploring pea protein “milk” opportunities. (Company reports; Fortune, 1/9/19; Live Kindly, 1/8/19; Plant Based News, 1/7/19; FoodNavigator.com, 1/4/19)

Chinese dairy giant Mengniu Dairypaid $44 million for a 51 percent share of Inner Mongolia Shengmu High-tech Dairy, a subsidiary of China Shengmu Organic Milk. As part of the agreement, China Shengmu will transfer all its downstream dairy business and related assets (including subsidiary Huhehaote Dairy) to Shengmu High-tech Dairy. The deal shores up Mengniu’s raw milk supply and provides China Shengmu with a much-needed influx of cash as well as the support of Mengniu’s production and distribution network to expand organic dairy product sales. (Company reports; just-food.com, 1/2/19; Caixin, 12/23/18)

Arla Foodssold its cheese factory in Bad Wörishofen, Germany, and all of its shares in French cheese packager Martin Sengelé Produits Laitiersin Muhlbach-sur-Munster, France, to Belgian cheesemaker Vache Bleue. The German plant mainly produces emmentaler that is packaged at the Martin Sengelé facility . . .Fonterra Co-operative Groupsold its livestock division to Kiwi agricultural conglomerate Carrfieldsas part of its strategic review of assets . . . German dairy processor Hochlandbought a 25-percent stake in Greek feta maker Greek Family Farm. . . Swiss-owned Wisconsin cheesemaker Emmi Rothpurchased Great Lakes Cheese’sSeymour, Wis., blue cheese plant. The facility makes more than 3,100 metric tons of cheese annually. Emmi Roth plans to use it to develop new blue cheese formats and varieties . . . In a bid to boost profitability, Saudi Arabian dairy company Almaraisold its 33 percent stake in United Farmers Holding Co., a joint venture to produce grain and fodder through farm investment outside Saudi Arabia. Joint venture partner Saudi Agricultural and Livestock Investment Co.bought out its stake. (Company reports; Stuff.co.nz, 1/9/19; TopAgrar, 1/7/19; Arabian Business, 1/2/19)

Finnish dairy co-op Valiosecured a permit from Chinese authorities to export powdered infant formula from its Lapinlahti plant and ready-to-drink liquid infant formula from its Turenki plant. The company says it is currently engaging with potential customers with an eye on building the Valio name in China. (Company news)

Vietnamese children’s nutrition specialistNutiFoodand Japanese beverage and food maker Asahiformed a new joint venture—Asahi-NutiFood—to target the Vietnamese infant nutrition market. NutiFood will work with Asahi to develop products specifically suited for Vietnamese tastes and nutritional needs. Asahi will manufacture the products in Japan and export to Vietnam. (Saigon Times, 1/10/19)

Arla Foodscombined its product management and R&D functions into a single new “Product and Innovation” group. The company says the new organization will enable closer collaboration between its commercial zones, market and supply chains, accelerating product development and creating products better aligned with consumer needs. The co-op named Arla veteran Lars Dalsgaard to the new position of senior VP, product and innovation, to head up the group. (Company reports)

Singapore-based business group Jardine Cycle & Carriageis increasing its stake in Vietnam’s Vinamilkto nearly 12 percent. (USDEC Southeast Asia office)

Louis Dreyfus Co.said it will sell or wind down its small dairy business by the middle of the year . . . BK Brasilis opening a new Burger King location every 3-4 days in Brazil, a pace that will push the fast-food chain past McDonald’s to become the country’s largest chain. Burger King currently has about 740 Brazilian outlets vs. about 940 for McDonald’s. BK Brasil also plans to open 300 Popeyes stores in Brazil over the next decade . . . CEC Entertainmentsigned development agreements with franchisees for 25 new Chuck E. Cheese restaurants in Bahrain, Egypt, El Salvador, Kuwait and Mexico . . . Shakey’s Pizza Ventures Asiaplans to spread out from the Manila metro area, opening 20 new stores in 2019. That would push the total number of Philippine outlets to 248. (USDEC Southeast Asia office; Company reports; Reuters, 1/16/19; Bloomberg, 1/9/19)

Glanbia Irelandand Dutch cheese and dairy manufacturer Royal A-wareare teaming up to build a €140-million (about US$159-million) greenfield cheese manufacturing plant in Belview, Ireland. The plant, which will be built near Glanbia’s infant nutrition plant, will handle nearly 500,000 metric tons of raw milk per year, producing cheese for the EU and global markets. After spending €343 million since 2014 to facilitate a 42-percent increase in milk production from its farmers, Glanbia said it needed to diversify its product mix and create “a new route to market” for that milk. (RTE, 1/22/19; Agriland, 1/22/19; Checkout, 1/22/19)

France’sLactalisbought Egyptian cheese and dairy company Greenland Group for Food Industriesand the milk products business of India’s Prabhat Dairy. Lactalis acquired Prabhat’s Sunfresh Agro Industries via its wholly owned Indian subsidiary Tirumala Milk Products and purchased Greenland through its Middle Eastern joint-venture operation Lactalis-Halawa. Greenland operates five plants in Egypt, including a whey production facility. Prabhat makes milk, milk powder, butter and ghee at two plants, and exited dairy production to focus on its cattle feed business. (Almal News, 1/23/19; DairyReporter.com, 1/23/19; VC Circle, 1/22/19)

Franchise business in Thailand is thriving, particularly in the food and beverage sector. Minor DQ Ltd., the franchisee for Dairy Queenin Thailand, plans to double the number of Thai units to 1,000 by 2023, with 40 coming on line this year. Thailand is already the third largest Dairy Queen market outside of the United States. Thoresen Thai Agencies, a shipping company that broke into the franchise market last year withPizza Hutin Thailand, opened the first Thai Taco Bell this week in Bangkok. The outlet features a menu adapted specifically for Thai tastes. (USDEC Southeast Asia office; Reuters, 1/22/19)

New Zealand dairy cooperative Westland Milkis reportedly considering proposals from more than 25 parties, including Canada’s Saputo, interested in buying all or part of the business. The co-op announced a capital structure review last month. (Stuff.co.nz, 1/23/19)

Nestléopened a new R&D center in Limerick, Ireland, to support innovation in milk-based maternal and infant nutrition products for the global market. The $30-million facility is adjacent to Nestlé’s Wyeth Nutritionplant . . . Mexico’s Grupo Lalacompleted a $14-million upgrade to the San Ramon, Costa Rica, dairy facility it purchased from Florida Bebidasin 2016. The facility will initially process fluid milk for Walmart stores in the region, eventually expanding to other products including butter . . . Domino’s Pizzasaid it expects to add 9,700 new stores by 2025, more than two-thirds them in international markets. It projects sales will more than double to $25 billion over the same period . . . FrieslandCampinaopened a 333,000-sq.-ft. distribution center in Meppel, Netherlands, for storage and transfer of dairy products meant for export markets. The facility holds 43,000 pallets and replaces four existing FrieslandCampina distribution centers . . . Laticínios Porto Alegre is spending $8 million to build a UHT milk processing facility in Rio Novo do Sul, Brazil . . . Malaysia’s Dutch Lady Milk Industriesis planning a push into the hotel, restaurant and catering market. (USDEC Mexico office; USDEC Southeast Asia office; Company reports; Milkpoint, 1/18/19; Nation’s Restaurant News, 1/17/19)

February

Vietnamese dairy leader Vinamilk expects to open a dairy manufacturing plant in Myanmar this year as part of an aggressive global expansion initiative. The Myanmar facility will be its second in Southeast Asia after the company’s Cambodian facility, which debuted in 2016. Vinamilk is also discussing a joint venture in Indonesia and expects to enter the Chinese market this year. The company says it has set aside $750 million for mergers and acquisitions, plant constructions and farm investments. (Nikkei Asian Review, 1/25/19)

French dairy cooperative Sodiaalplans to invest €80 million (about US$91 million) to expand R&D activities centered around its new research hub in Rennes, France. About half the money is coming in the form of a loan from the European Investment Bank. The cooperative expects to focus on infant nutrition, functionalization of dairy components, processing technologies and new packaging for products targeting European as well as global markets. (European Investment Bank, 1/24/19)

Thailand’sCP Foodsopened a new $43-million R&D center in Wang Noi that it expects will drive a 10-12 percent sales gain in 2019. The company plans to launch a line of “smart” products including functional drinks in the first quarter and develop other lines aimed at particular nutritional and dietary needs, such as foods and beverages for medical uses, specific groups including seniors or specific conditions like insomnia. Other areas of study will include sustainable packaging that minimizes environmental impact and biotechnology. (USDEC Southeast Asia office)

Singapore-based commodities giant Olam Internationalplans to invest $3.5 billion over the next 5 years to strengthen high-growth-potential ag sectors, including dairy. Dairy investments will include farm expansions in Russia and spending on ingredient processing facilities in unspecified locations . . . Dubai’s Horeca Trade, a subsidiary of Bidfood Group, signed a deal to become the exclusive distributor of Fonterra’s Anchor Food Professionals foodservice products in the UAE . . . Former Fonterra Chairman John Wilson passed away at age 54. Wilson became a Fonterra director in 2003 and served as chairman from 2012 until July 2017 . . . Tetra Pakappointed company veteran Adolfo Orive as president and CEO to replace Dennis Jönsson, who is stepping down after 14 years at the helm. (USDEC Southeast Asia office; Company reports; Stuff.co.nz, 1/28/19)

Mazoon Dairy Co., a new, vertically integrated dairy company in Oman, received its first shipment of 1,600 dairy cows and expects to inaugurate its manufacturing plant in Al Sunayna in the second quarter of this year. The $260-million project was conceived as a means to reduce Oman’s dependency on dairy imports. Imports now account for about 70 percent of consumption. The facility will make milk, cream, yogurt, laban, cheese and ice cream. The company expects its farms will produce 200,000 tons of milk per year to start, growing to more than 900,000 tons per year. (Times of Oman, 2/3/19; Gulf Business, 2/4/19)

Milco, a consortium led by Israel’s Central Bottling Co.(CBC), offered $359 million for a 60-percent stake in South African dairy and consumer foods maker Clover Industries. CBC also owns Israel’s Tara Dairy. . . Coca-Colapurchased the outstanding 60 percent of Nigerian dairy and juice processor Chi Ltd.It bought a 40 percent stake in Chi in 2016 . . . Myen Pte Ltd, a Singaporean subsidiary of Danone, is forming a joint venture with Thai functional drink marketer Sappeto market healthy beverages in Thailand . . . Organic Meadow, a subsidiary of Canada’s Agrifoods International Cooperative, acquired the Rolling Meadow grass-fed dairy business from brand developer GreenSpace. Organic Meadow had been the primary contract packer for Rolling Meadow. (USDEC Southeast Asia office; Company reports; BusinessDay, 2/4/19; Reuters, 2/4/19; IEG Vu, 2/4/19)

Britain’s Dairy Crestis spending £75 million (about US$97 million) to upgrade and expand its Davidstow facility, increasing cheese production from 54,000 metric tons per year to 77,000 metric tons. Increased capacity is earmarked for domestic and overseas markets . . . Britain’s Crediton Dairyis investing £12 million (about US$16 million) to expand flavored and functional milk capacity at its Devon, UK, dairy plant. Product will be sold in domestic and overseas markets . . . British cheesemaker Wyke Farmsis doubling capacity at its Bruton, UK, manufacturing plant to bolster capacity for global markets. The company’s five-year growth plan is focused on increasing export sales . . . Great Lakes Cheeseis building a new 300,000-sq.-ft. manufacturing and warehousing facility and a new headquarters in Geauga County, Ohio . . . Blue Diamond Growersbroke ground on a 52,000-sq.-ft. expansion at its Turlock, Calif., almond drink facility. The addition will boost production of the almond base for its Almond Breezebeverage to meet rising demand. (FoodManufacture.co.uk, 2/5/19; Cheese Reporter, 2/1/19; FoodBev.com, 1/30/19; Modesto Bee, 1/29/19; Food & Drink International, 1/28/19)

Wattle Health Australiapaid A$46 million (about US$33 million) to increase its stake in Australian infant and nutritional formula contract manufacturer Blend and Packfrom 5 percent to 51 percent. The deal includes an option to acquire an additional 29 percent. Wattle has plans to expand overseas sales and distribution of organic milk powder products, with a focus on China. Blend and Pack is licensed to produce infant formula for China. Wattle said last month that it was awaiting accreditation from China’s State Administration of Market Regulation to start exporting organic formula to China. In late 2018, Wattle formed a joint venture with Organic Dairy Farmers of Australia to build a dedicated organic milk spray dryer in Geelong, Victoria. The partners expect to have the plant, Corio Bay Dairy Group, operational by the third quarter of this year. (Company reports; SmallCaps, 2/11/19)

DMK Groupopened a €145-million (about US$164 million) infant formula plant in Strückhausen, Germany. The plant will produce formula for EU and international markets . . . Restaurant Brands Internationaladded 1,000 Burger King, Tim Hortons and Popeyes Louisiana Kitchen outlets globally in 2018 and the company plans to continue expanding its international presence. Speaking specifically about Burger King, the company said it is “still severely underpenetrated and has tons of white space to grow in most markets around the world” . . . Darigoldnamed Grant Kadavy as chief operating officer effective immediately. Kadavy, who joined Darigold as chief commercial officer in 2016, is now responsible for strategic development, innovation, supply chain and day-to-day commercial operations and will take on a higher profile representing the co-op externally in the industry . . . China’s Yili Groupsigned a memorandum of understanding with German human milk oligosaccharides (HMO) firm Jennewein Biotechnologieto develop infant formula and dairy products specifically tailored to the Chinese market featuring HMO. (Company reports; Wall Street Journal, 2/11/19)

Australia’s Bega Cheeseplans to build a new lactoferrin production facility at its Koroit, Victoria, manufacturing site. The A$34 million (about US$24 million) plant will produce about 35 tons of lactoferrin extract annually, complementing Bega’s existing lactoferrin plant at Tatura, Victoria. Production is earmarked for pharmaceutical and nutritional powder manufacturers. A new long-term lactoferrin supply contract was one of the drivers behind the project. (Finance News Network, 2/15/19; North Queensland Register, 2/14/19)

Brazilian conglomerates Sooro Groupand Renner Herrmannagreed to merge their dairy ingredient businesses (Sooro Concentrado and Relat-Latícínios Renner) into a new company called Sooro Renner Participações. The company will focus on WPC, WPI, lactose, permeate, whey powder and derivatives. Sooro Renner will operate plants in Marechal Cândido Rondon, Paraná (also company headquarters), and Estação, Rio Grande do Sul. A third facility in southern Brazil is in the planning stages. (USDEC South America office; Company reports; Milkpoint, 2/13/19)

Glanbiaplc paid US$89 million for Connecticut-based non-dairy ingredient business Watson Inc.Glanbia called it a “complementary addition to our Nutritional Solutions business [that] will help broaden our capabilities in the ingredients sector” . . . Hormel Foodssold its CytoSportbusiness, including Muscle Milkproducts, to PepsiCo. PepsiCo is the long-standing distributor of Muscle Milk. . . Israel’s Central Bottling Co.bought its joint venture partner’s stake in Romania’s Muller Dairy Ro, the importer/distributor of the German Müllerbrand in Romania. (Company news; Minneapolis Star Tribune, 2/19/19; Romania Insider, 2/14/19)

Brazil’s Latícínios Tirolwill start construction in June on a US$19 million UHT milk plant in Ipiranga in the Campos Gerais region. The facility, which will handle about 1,250 metric tons of milk per day, is due to open in January 2021 . . . Encouraged by strong demand for its UHT milk and ghee in Singapore and Hong Kong, India’s Tamil Nadu Cooperative Milk Producers’ Federation(also known as Aavin) began exporting UHT milk to Qatar this month and plans to expand to additional Middle Eastern and Asia markets later this year . . . Smucker’s Foods of Canadais spending US$9 million to add heavy cream capacity and increase packaging flexibility at its Sherbrooke, Quebec, dairy plant. (USDEC South America office; USDEC Southeast Asia office; Company news; a Rede, 2/8/19, 1/14/19)

 

March-3

Fonterra Co-operative Grouptook a minority stake in Boston-based bioengineered-food start-up Motif Ingredients. Motif, spun-off this week from Gingko Bioworks, is developing alternatives to animal proteins using biotechnology and fermentation to solve some of “the biggest challenges” facing the food industry: “sustainability and accessible nutrition.” Fonterra said it is making the investment to “futureproof” the co-op and because it believes plant, insect, algae and fermentation-produced nutrition will exist alongside animal proteins in the years ahead. Additional Motif investors include Louis Dreyfus Cos., Breakthrough Energy Ventures and Gingko. (Company reports; Xconomy, 2/26/19)

Ireland’s Carbery Groupis spending €78 million (about US$89 million) to expand and diversify its Ballineen, Co. Cork, manufacturing site. The facility solely makes cheddar, but the project will add capacity for mozzarella and other cheeses to meet rising demand from emerging markets, particularly Asia and the Middle East. The expanded facility, when complete in early 2020, will process up to 4,100 metric tons of milk per day. (The Southern Star, 2/22/19)

Canadian dairy giant Saputowill pay about £975 million (about US$1.3 billion) to purchase British dairy processor Dairy Crest. Dairy Crest’s main manufacturing plant is the cheese and ingredient facility at Davidstow, where it recently announced a major expansion project. It also operates packaging, distribution and R&D sites. Saputo said the acquisition will enable the company “to expand its international presence and enter the UK market [with] a well-established and successful industry player with a solid asset base.” (Company news)

Australia’s Bega Cheeseclosed its Coburg, Victoria, cheese plant, citing the suburban Melbourne location as unsuitable for expansion . . . Begaalso signed a partnership agreement with organic baby food and goat-milk formula marketer Bubs Australia. Under the terms of the deal, Bega unit Tatura Milk will turn fresh goat milk into infant formula nutritional base for Bubs . . . Mexico’s Grupo Lalaannounced a licensing agreement to distribute and market almond beverages in Mexico from Blue Diamond Growers . . . Gem State Dairy Productsis building a 200,000-sq.-ft. aseptic milk processing plant in Twin Falls, Idaho. It expects to break ground this summer and complete the facility by summer 2020. (USDEC Mexico office; AAP, 2/27/19; Finance News Network, 2/27/19; KLIX 2/25/19)

Regulatory authorities gave the greenlight to the merger of Ireland’s Lakeland Dairiesand Northern Ireland’s LacPatrick Dairies, removing the last significant hurdle to completing the deal . . . Private investment firm Borgman Capitalacquired Wisconsin-based processed cheesemaker Gilman Cheese Corp.(BizTimes, 3/4/19)

New Zealand’s Fonterra Co-operative Groupnamed interim CEO Miles Hurrell as its permanent chief executive effective immediately . . . Mike Durkin, president and CEO of Leprino Foods, and Lino Saputo Jr., chairman and CEO of Saputo Inc., joined the board of directors of Global Dairy Platform. (Company reports)

General Millssold its Yoplait business in China to Chinese private equity investment fund Tiantu Capital. The deal includes a production facility in Kunshan, near Shanghai, and a license to the Yoplaitname in China . . . Australian infant food manufacturer Bubs Organicis forming a joint venture with China’s Beingmate Baby & Child Foodto distribute Bubsbrand goat’s-milk-based infant formula and baby food products in China . . . Singapore-based palm oil trader Wilmar Internationalpaid US$300 million for the 50 percent of Australian dairy and food group Goodman Fielderthat it did not already own . . . Colombia dairy processor Alpina Productos Alimentospurchased a 19 percent stake in importer/distributor Atlantic Food Service. . . Saudi Arabian dairy processor Almaraipaid $29 million for value-added halal meat and poultry processor Premier Foods. (USDEC China office; USDEC Southeast Asia office; USDEC South America office; USDEC Middle East office; New Zealand Herald, 3/12/19; FoodBev.com, 3/7/19)

Yum Chinaopened an integrated R&D facility in Shanghai to speed development of new products targeting local taste preferences . . .Yum Chinais also partnering with Sinopecand China National Petroleum Corp.(CNPC) to open KFC locations at the two companies’ gas stations. The deals call for more than 100 units over the next three years. Sinopec and CNPC operate more than 50,000 total gas stations across China . . . New Zealand’s Fonterra Co-operative Grouppromoted Judith Swales to chief operating officer, Global Consumer & Foodservice. (USDEC China office; Company reports)

China’s Yili Groupstrengthened its Kiwi footprint with the purchase of New Zealand’s second largest dairy co-op Westland Co-operative Dairy. This is Yili’s second dairy purchase in New Zealand: It bought Oceania Dairy in 2013 and subsequently invested NZ$650 million in milk powder, infant formula and UHT milk production there. The Chinese dairy giant (through subsidiary Hongkong Jingang Trade Holding) is paying NZ$3.41 a share (equal to NZ$588 million or US$403 million) to acquire Westland. The proposed deal follows a strategic review by Westland’s board brought on by a series of disappointing farmer payouts. The board said it engaged with 25 parties before deciding on the Yili offer, which it unanimously approved. As part of the deal, Yili has agreed to pay existing Westland suppliers a competitive milk price at least equal to Fonterra Co-operative Group’s for the next 10 seasons starting with the year beginning in August 2019. Yili also will acquire NZ$342.5 million in Westland debt and other liabilities. Westland has been looking to increase the value of its farmers milk in recent years, investing NZ$134 million on infant formula capacity in 2016/17. Westland farmers will vote on the deal in early July. Initial reaction has been mixed, according to media reports this week. New Zealand regulators also must approve the deal. (Company reports; New Zealand Herald, 3/20/19)

French dairy co-op Sodiaal took over the processing portion of Synutra’s Carhaix, France, infant formula plant. China-based Synutra will continue to oversee packaging and has contracted for half the volume at Carhaix for distribution in China. The Carhaix facility can produce 65,000-80,000 tons of formula per year, depending on type. The two companies began discussing the changeover last summer. (Reuters, 3/12/19)

Fonterrasold its interest in its Venezuelan joint venture Corporacion Inlacato trading company Mirona Food. As part of its plan to sell NZ$800 million in assets, the co-op also put its 50-percent stake in its DFE Pharmajoint venture with FrieslandCampina on the market. DFE Pharma specializes in pharmaceutical excipients . . . Upstate Niagara Milk Cooperativepaid an estimated $20 million-$25 million for the former Alpina Foodsyogurt plant in Batavia, N.Y. Niagara said it had not yet settled on how it would use the plant, which had closed in January. (Company reports; The Daily News, 3/3/19; The Batavian, 3/2/19)

Nestléopened a $12-million UHT beverage processing line for value-added milk-based products including Nesquikdrinks, Nidoand NANinfant and children’s formulas. The line is part of a four-year, $127-million investment in Argentina’s dairy market by the Swiss dairy and food giant . . . Wisconsin’s Cedar Valley Cheeseexpects to complete a $15-million expansion by the end of the month, doubling capacity and adding storage, a QC lab and other space. In addition to domestic sales, the company ships to Mexico and Canada . . .Minor Food Groupplans to double the number of its restaurants in Thailand and internationally to more than 4,400 over the next four years. The company operates in 27 markets around the world, although 1,500 of its current 2,270 units are in Thailand, where it owns the Dairy Queen, Burger King, The Pizza Company, Swensen’s, The Coffee Club and other brands . . . Dine Brands, owner of the IHOP and Applebee’s names, plans to open its first IHOPstore in Pakistan in Karachi by the end of the year, followed by 18 more units over the subsequent nine years. It has also recently signed deals to expand into Ecuador and Peru. (USDEC South America office; USDEC Southeast Asia office; Milkpoint, 3/18/19; Bloomberg, 3/18/19; Ozaukee Press, 3/13/19)

Danoneofficially opened its new €240-million Nutricia infant formula plant in Cuijk, Netherlands. Danone is billing the plant as a “sustainable, zero-waste facility powered with 100 percent renewable energy.” The plant doubles the capacity of the older Cuijk facility it is replacing while using 60 percent less water and 25 percent less energy and emitting half the CO2. It produces specialized infant formula for babies with specific health needs. (Company reports)

Nestlé opened a new R&D center in Beijing and a system technology hub in Shenzhen. The R&D center, with 40 specialists working across multiple product sectors, aims to accelerate trend-based innovation in what the company calls “one of the fastest-changing food and beverage markets in the world.” It features a consumer insights area, a rapid-prototyping lab and other product development resources and will work closely with local universities and innovation partners. The system technology hub’s focus is on beverage systems. (Company reports)

Vietnam’s Vinamilkoffered to buy a 47 percent stake in GTNFoodsfor $65 million. GTNFoods is majority shareholder of Moc Chau Milk Co., one of the largest milk producers in north Vietnam, with a herd of more than 23,000 cows . . . Colombian dairy co-operative Unilacis merging with Colombian dairy and food company Colanta. . . Kroger Co.is selling its Turkey Hill Dairy operation in Pennsylvania to investment firm Peak Rock Capital. (USDEC South America office; Vietnam Investment Review, 3/14/19)

Irish Farmers Journalreported that Coca-Colais considering building a dairy processing plant in County Cork. Coca-Cola called the report “speculative” and said that recent meetings with officials were part of its normal course of doing business
. . . Dairy Farmers of America(DFA) joined GDT Marketplace, Global Dairy Trade’s 24/7 online dairy trading platform. DFA products on GDT Marketplace will include milk powder, MPC, AMF and cheese. (The Irish Times, 3/28/19; GDT)

April-2

Australian goat’s milk infant formula marketer Bubs Organic paid A$25 million (plus A$10 million in Bubs stock) for Melbourne-based Deloraine Dairy. Deloraine owns one of 15 Australian infant formula canning facilities licensed by Chinese regulators to export to China. The plant’s capacity is 10 million tins per year, but Bubs said it could double output with incremental capital investment. Bubs has been moving aggressively this year to secure Chinese expansion, signing a contract manufacturing deal for infant formula base with Bega Cheese in February and securing a joint-venture distribution deal with China’s Beingmate Baby & Child Food last month. In tandem with the Deloraine deal, Bubs also secured A$15 million in funding from China-focused private equity firm C2 Capital Partners. (Business News Australia, 4/1/19)

Sill Groupis spending €85 million (about US$95 million) for a new milk drying tower in Landivisiau, France, to produce infant formula. The investment is part of a five-year, €180-million company-wide investment plan. When completed, Sill expects to produce 18,000 tons of infant formula annually at Landivisiau exclusively for export to China, the Middle East and Africa. It expects to begin production at the beginning of 2021. (L’Usine Nouvelle, 3/26/19; web-agri, 3/25/19)

Ireland’s Lakeland Dairiesand Northern Ireland’s LacPatrick Dairiesofficially merged. Michael Hanley, current CEO of Lakeland Dairies, will remain as head of the combined organization Lakeland Dairies Co-operative Society . . . Switzerland’s Emmiacquired a two-thirds stake in Austrian goat and sheep’s milk processor Leeb Biomilch GmbH. Leeb Biomilch also began marketing a dairy alternative line in 2016 called MyLove-MyLifebased on almonds, coconut and oats . . . Germany’s DMK Groupacquired the baby food brands and sales and distribution channels of fellow German food processors Alete GmbHand German Babyfood GmbH. DMK expects the brands will complement its infant formula line. (Company reports; Agriland, 4/1/19)

McDonald’splans to open 400 new stores in mainland China this year . . . Milkom, a unit of Russia’s Komos Group, reportedly signed a contract with China’s Li Hua Economic and Co.to ship 40 tons of ice cream and 500 tons of “other” dairy products per month to China. The company did not specify what the other products were . . . Norwegian dairy TINEand food and personal care giant Orklaare reportedly collaborating to add cheddar manufacturing capacity to TINE’s Meieriet Verdal plant in central Norway. Output is earmarked for Orkla pizzas, although TINE says domestic demand for cheddar at retail and in processed foods is rising in Norway. (USDEC China office; Dairy Markets, 3/27/19; The Dairy News, 3/25/19)

China’s Health & Happiness International Holdingspurchased the Farmland Dairyinfant formula blending and packaging plant in Auburn, New South Wales. The company is looking to expand into goat-milk formula under its Biostimebrand . . . Australian Dairy Nutritionals Group, owner of Camperdown Dairy, purchased A$5 million in used infant formula and cheesemaking equipment and plans to install it at its Camperdown facility in Victoria. (Australian Financial Review, 4/4/19; The Weekly Times, 4/4/19)

Chicago-based Fairlifeis building a new $200-million-plus milk processing facility in Goodyear, Ariz., to produce products for domestic and international markets. The company expects to begin operations in the second half of 2020 . . . Nestléopened a $2-million Latin American business support center in Asunción, Paraguay. The operation will offer internal support (human resources, financing, accounting, etc.) to Nestlé’s operations in 21 countries in the region . . . Australia’s Camperdown Dairyextended its production contract with New Zealand yogurt brand The Collectivefor an additional two years until 2024. (USDEC South America office; Company reports; AAP, 4/7/19)

Hilmar Cheese Co. is selling its Turlock, Calif., milk powder facility to California Dairies Inc. (CDI). The sale aligns with Hilmar’s new strategic focus announced in March, which looks to “evolve and adapt” the company to the changing business environment. That includes focusing on three core product areas: cheese, whey protein and lactose. Hilmar completed the plant in 2015. The deal is expected to close in May. (Company reports)

Polish dairy processor Polmlekacquired a 30% stake in fellow dairy Lacpoland claims it has lined up enough shares from additional investors to give it a controlling interest. The combined operations of Polmlek and Lacpol would make the company the No. 2 dairy in Poland just ahead of Mlekpol and behind only Mlekovita. Together, Polmlek and Lacpol operate 15 manufacturing plants. (Dairy Markets, 4/15/19; Forbes, 4/9/19)

Italian dairy processor Granaroloincreased its stake in Italian cheesemaker Venchiaredofrom 33.5% to 57.5%. Venchiaredo specializes in stracchino cheese . . . FrieslandCampinasold Creamy Creation(its cream liqueur operation) to Dutch investment company Wagram Equity Partners. . . Bubs Australiasold its Coach House Dairyflavored milk brand to Australian dairy marketer The Remarkable Milk Co.Remarkable Milk targets Asia Pacific retail markets with organic and conventional dairy and nutritional products . . . South Africa’s Brimstone Investment Corp.is pulling out of the consortium to buy South Africa’s Clover Industriesamid opposition from an anti-Israel group. The consortium, Milco SA, is headed by Israeli beverage firm Central Bottling Co.Brimstone has secured two possible investors to take its place. (Company reports; just-food.com, 4/17/19; Reuters, 4/12/19; FoodBev.com, 4/12/19)

Glanbia Ingredients Irelandexpects the latest expansion at its Belview, Co. Kilkenny, plant will be fully operational just ahead of peak EU milk flows in May. The €160-million project includes new milk intakes, pasteurizers, evaporation facilities, drying facilities and bagging equipment. It will increase raw milk handling capacity at Belview by 15,500 tons per week . . . Brazilian dairy processor Lacticínios Tirolmore than doubled its investment in a new UHT milk processing facility in Ipiranga, Paraná, to US$39 million. When completed in 2021, it will handle 620,000 tons of raw milk per day. (USDEC South American office; Agriland, 4/15/19)

Fonterra Co-operative Groupand Coca-Colaformed an “exploratory” alliance to launch ready-to-drink beverages in Southeast Asia starting in Vietnam. The first item from Asean Fonterra & Coca-Cola Strategic Alliance is a milk/fruit juice drink under Coca-Cola’s Nutriboostlabel. The new Nutriboostline, which debuted last week in Vietnam, is made from a Fonterra recipe and features Fonterra milk powder but is contract manufactured by a third party. The Alliance next plans to target Indonesia and Thailand. A range of products is in the works, including children’s beverages, adult breakfast drinks and a skincare line. Some will reportedly feature Fonterra’s Anchorbrand name. Clare Morgan, the Alliance’s marketing director, said the project is exploratory at the moment but could develop into a full-fledged joint venture over time. “Coke certainly wants to become more dairy based,” she said. (USDEC Southeast Asia office; New Zealand Herald, 4/20/19, 4/18/19)

Mehsana Dairy, one of the founding members of Indian dairy behemoth Gujarat Cooperative Milk Marketing Federation(also known as Amul), plans to cut ties with the co-op and go out on its own. Mehsana reportedly accounts for about 10 percent of GCMMF’s $4.7 billion in annual revenues. The company will start its own label Dudhsagar,since it will lose access to the flagship Amulbrand. Media reports suggested the divorce was triggered by infighting between Mehsana and Amul leadership, exacerbated by the varying political links between GCMMF’s 17 member co-ops. (Business Today, 4/23/19)

Iowa-based Wells Enterprisesacquired Fieldbrook Foods, which operates ice cream plants in New York and New Jersey. The move expands Wells’ capacity and extends its geographic coverage . . . Cheese wholesaler Zijerveld, a unit of FrieslandCampina, acquired Dutch cut-and-wrap operation W. Bakker Kaashandel. (Company reports; Foodnews, 4/17/19)

Malaysia’s QSR Brands Holdingsplans to open 60 Pizza Hut and 67 KFC outlets nationwide over the next three years. The company is also exploring collaborating with Pizza Hut Japanand KFC Japanto develop Halal-certified stores in Japan and train personnel to handle the influx of Muslim tourists for next year’s Tokyo Olympics . . .Luckin Coffee Inc., a Chinese challenger to Starbucks, is looking to raise up to $800 million through an IPO next month. Luckin operates 2,370 stores in China with plans to open another 2,500 this year, a feat that would displace Starbucks as China’s largest coffee chain. (USDEC Southeast Asia office; Reuters, 4/22/19)

May-2

Judging by two recent new product rollouts, Nestlé has its eyes set on nutritional appeal when it comes to dairy R&D in Southeast Asia. Nestlé Thailand unveiled Milo UHT No Sucrose, a product deliberately developed to reflect the government public health policy of encouraging Thai people to consume an appropriate amount of sugar in their diets. The product carries the Thai Healthier Choice logo, a state-backed labeling scheme started in 2016 that aims to improve national health. Meanwhile, Nestlé Indonesia rolled out Nestlé Acticor, a milk-based drink containing beta glucan (a sugar with immune enhancing qualities) and inulin (sometimes used to lower cholesterol). Heart disease is the No. 1 cause of death in Indonesia, and the Acticormarketing campaign is built around heart health. The product also aligns with the Indonesian government initiative “Movement for Healthy Living Society,” which encourages healthier dietary patterns to improve quality of life. (USDEC Southeast Asia office; Company reports; Indopos, 4/29/19)

Coca-Cola Mexicoopened a new $105-million fluid milk and juice plant in Lagos de Moreno, Jalisco. The facility, part of Coca-Cola’s Jugos del Valle-Santa Clara non-carbonated beverage division, can produce 120 million liters per year. It is the company’s second milk facility in Mexico; the first is in Pachuca, Hidalgo. The Lagos de Moreno plant will initially produce milk under the Santa Claralabel for the domestic market, but Coca-Cola is eyeing export opportunities in Latin America and the United States as well. (USDEC Mexico office; Company reports; Forbes, 4/29/19)

Canada’s Saputoentered into an agreement to purchase the specialty cheese business of Australia’s Lion-Dairy & Drinksfor A$280 million (about US$208 million). The deal includes two manufacturing plants located in Burnie and King Island, Tasmania, two dairy farms and a number of brands, including Mersey Valley, South Capeand King Island Dairy. Saputo previously purchased Lion’s Coon, Cracker Barreland Mil Lelcheese lines in 2015. Saputo says the deal will further diversify its product offerings, expanding and complementing its current activities in Australia. Lion is still looking to divest its fluid and fresh dairy operations in Australia. (Company reports; North Queensland Register, 4/19/19)

Australia’s Freedom Foodscompleted a key commissioning step for a new lactoferrin production line at its Shepparton, Victoria, manufacturing site. It expects to produce 16 tons of lactoferrin annually. The plant also began producing micellar casein in February and native whey protein isolate in March . . . Russia’s Galactika Groupexpanded its partnership with Finland’s Valio, opening a new production line for yogurt and dairy desserts at its facility in Gatchina, Leningrad Oblast . . . Domino’s Pizzaexpects to add nearly 10,000 additional locations in 85 markets worldwide by 2025 . . . Ornua’sKerrygoldbrand is the first Irish food brand to top €1 billion in retail sales, according to Irish Ag Minister Michael Creed . . . Northern Ireland’s Dale Farmis not renewing the contract for the Fivemiletown Creamery cheese plant it was leasing from Fivemiletown & Brookeborough Co-operative. The company will transfer production to its facility near Culleybackey. (Newstalk, 4/30/19; Agriland, 4/25/19; The Dairy News, 4/25/19; Yahoo Finance, 4/24/19; Motley Fool, 4/3/19)

Infant formula marketer Bubs Australiasigned a deal with Fonterra Australiawhereby Fonterra will supply Bubs with organic milk powder for a new line of infant formula under the Bubs Organiclabel. Bubs will distribute the formula in Australia starting June 1, with distribution in China to follow via its joint venture with Beingmate Baby & Child Food and through Chinese ecommerce giant Tmall. Bubs is aggressively pursuing the Chinese infant formula market, cutting a series of deals over the past three months to bolster manufacturing and distribution. Fonterra will reportedly source the milk from its New Zealand organic milk pool and manufacture the powder at its Darnum, Victoria, Australia plant. Fonterra recently regained full ownership of the Darnum plant after exiting its Australian joint venture with Beingmate. (New Zealand Herald, 5/7/19; Small Caps, 5/6/19)

Dutch dairy giant FrieslandCampinareorganized its ingredients business, folding its four individual operating companies—DOMO, Kievit, DMZV and Nutrifeed—into a new product-oriented structure to better tap into the growing global nutrition market. The former operating companies are now four strategic segments: Early Life Nutrition; Adult Nutrition (performance, active and medical nutrition); Food & Beverages; and Animal Nutrition. FrieslandCampina Ingredients runs five regional sales offices located in Brazil, China, the Netherlands, Singapore and the United States. (Company news)

Canada’s Saputoannounced plans to close its Dresser, Wis., cheese facility at the end of the month. It acquired the plant late last year with its purchase of F&A Dairy Products. . . The government of Canada is investing C$1.5 million (about US$1.1 million) to modernize equipment at the St-Albert Cheese Co-operativefacility in Ontario. The money is part of the government’s Dairy Processing Investment Fund, which was established to help the nation’s dairy sector cope with increased competition due to the EU-Canada Comprehensive Economic and Trade Agreement. (Company reports; The Sun, 5/3/19)

New Zealand’s Synlait Milkinsists that it is “working through” an appeals court ruling that calls into question its rights to build a nutritional powder facility in the North Island town of Pokeno. The trouble is that the NZ$250-million facility is nearly complete. Synlait started constriction last May after the original court ruling removed covenants restricting the land to grazing, lifestyle farming and forestry. The new ruling says those covenants never should have been lifted. The Pokeno plant was supposed to be ready for the start of the 2019/20 production season. It has a reported capacity of 45,000 tons per year. (Company reports; Newsroom, 5/13/19)

New Zealand’s Fonterrasold its Tip Topice cream brand and manufacturing facility in Auckland to Froneri, the UK-based ice cream joint venture between Nestléand R&R Ice Cream. Froneri also acquired the license to manufacture Fonterra’s Kapitiice cream brand . . . Australian dairy and poultry processor TasFoodspaid US$8 million for fellow Tasmanian dairy Betta Milk. Betta recently upgraded its manufacturing plant in Burnie, Tasmania . . . Troubled Argentine food company Arcor increased its stake in struggling Argentine dairy processor Mastelloneto 43%. (USDEC South America office; Company reports; AAP, 5/13/19)

New Zealand’s Fonterra Co-operative Grouplowered the high side of its projected farmgate milk price by 20 cents, dropping its payout range for the year ending May 31 to NZ$6.30-$6.40 kg/MS. It also lowered its earnings per share to 10-15 cents (from 15-25 cents). Both numbers are at the low end of analysts’ expectations, suggesting Fonterra is still struggling to find its footing. The co-op continues to look for ways to improve its financial performance and reduce debt after a lackluster year. It announced it was closing its milk powder plant in Dennington, Victoria, Australia, and embarking on a strategic review of its two Chinese farm hubs and its Dairy Partners America Brazil joint venture with Nestlé. Dennington has reportedly been operating at about 30% capacity, in part due to reduced milk flows in Australia. The strategic reviews relate to the co-op’s efforts to prioritize its New Zealand milk supply and simplify its global portfolio. (Company reports; Stuff.co.nz, 5/22/19)

Darigoldadded four in-country sales and logistics personnel in Mexico to enhance customer service and deepen integration with its Mexican customers. The company expects the additions will “enable greater insight to provide solutions tailored for customer- and country-specific needs.” Darigold does business in Mexico as Darigold Mexico and NW Dairy Pioneers. (Company reports)

The owner of New Zealand Industrial Park Ltd. sent a cease and desist request to Synlait Milkcalling for the company to halt work on its Pokeno, North Island, nutritional powder facility. The park is adjacent to the under-construction facility, and the owner, Qing Ye, is the person behind the challenge to Synlait’s right to build a factory on the land. Despite the cease and desist request, Synlait said it would continue construction and it plans to have the facility ready to receive milk for the 2019-20 season. Synlait said it was discussing the matter with all involved parties but believes the project is consistent with zoning rules. (Stuff.co.nz, 5/22/19; Otago Daily Times, 5/22/19)

California Dairies Inc.completed its acquisition of Hilmar Cheese’sTurlock, Calif., milk powder plant . . . France’s Lactalissaid it was looking to acquire a dairy company in northern India to make it a truly national player in the country. Lactalis has built its business in India through acquisition, purchasing Tirumala Milk Productsin 2014, Anik Industriesin 2016 and Prabhat Dairyearlier this year. (Company reports; The Hindu Business Line, 5/14/19)

The threat from plant-based dairy alternatives continues to spread, with food companies in Asia and South America rolling out products aimed at shifting consumers away from dairy. Thai natural products maker Heritage Grouprolled out a pistachio beverage under the Sunkistbrand. Chinese mineral water marketer Nongfu Springlaunched a plant-based “yogurt” made from non-GMO soy beans. Chilean start-up Not Co. developed plant-based “milk” and “ice cream.” And Sweden’s Oatleyopened a sales office in Shanghai and hopes to build a Chinese manufacturing facility for its oat-based beverage. The company has gone as far as developing a new Chinese character for “vegan milk,” but it also markets its line in Asia using the tagline “the new milk.”  Highlighting dairy protein’s nutrition and sustainability benefits in the face of stronger competition from alternative proteins is a primary goal of USDEC’s ingredient program and plays a significant role in industry outreach.(USDEC staff; USDEC South America office; USDEC Southeast Asia office; South China Morning Post, 5/28/19; FoodNavigator-Asia.com, 5/20/19)

New Zealand’s Happy Valley Milksecured the necessary consents to build an NZ$280-million (about US$183 million) infant formula and nutritional powder plant in Otorohanga on the North Island. Groundbreaking is set for September and the company expects to have the facility completed by August 2021. Happy Valley plans to use A2 and organic milk to make its products. (Rural News Group, 5/28/19)

French dairy giantLactalissigned a deal with the Brazilian state of Minis Gerais, wherein Lactalis will invest US$9 million in the region. The money is earmarked for plants in Pouso Alto, Ravenna and Curral Novo for a series of projects, including brie and parmesan production lines. As part of the deal, Lactalis committed to training and hiring additional staff, while the government agreed to assist Lactalis in finding new milk suppliers. (USDEC South America office; Diário do Comércio, 5/28/19)

Mondelez Internationalcompleted the sale of its Kraft-branded cheese business in the Middle East and Africa to Arla Foods. Philadelphiacream cheese and Joccacottage cheese were not part of the deal . . . Italian confectionery company Ferrerobought a controlling stake in Spanish ice cream manufacturer Ice Cream Factory Comaker. . . Subsidiaries of Hong Kong-based retailer Dairy Farm Internationaland Singapore dairy, food and beverage firm Fraser & Neavepurchased the license to operate Starbucksoutlets in Thailand. Their joint venture, Coffee Concepts Thailand,now controls 372 Thai Starbucks units and plans to focus on accelerating new store development. (USDEC Southeast Asia office; Arabian Business, 5/29/19; FoodBev.com, 5/29/19; Bloomberg, 5/23/19)

Australia’s Freedom Foodsis looking to raise A$130 million (about US$90 million) to meet rising demand for UHT milk products in Australia, China and Southeast Asia. About A$100 million of the funds would go to expanding its Shepparton, Victoria, facility . . .F&Nsaid it plans to reformulate about 70% of its product portfolio to offset Malaysia’s new sugar tax set to take effect July 1. The tax will add a penny per liter for drinks that exceed certain baseline sugar content guidelines, including a number of dairy-based drinks. (USDEC Southeast Asia office; Country News, 5/29/19)

June-2

Arla Foodsis moving certain processed cheese and sterilized cream production lines from plants in Denmark and Saudi Arabia to its recently acquired manufacturing facility in Manama, Bahrain. Arla gained ownership of the Manama plant as part of its purchase of Mondelez International’s Middle Eastern processed cheese business. The Manama plant’s current capacity exceeds 66,000 tons per year. Arla is moving an estimated 26,000 tons of annual processed cheese capacity from its Bislev site and 18,000 tons from its AKAFA site (both in Denmark). And unspecified volume is shifting from its Riyadh, Saudi Arabia, facility. Arla said the reorganization will provide supply-chain advantages and heighten its competitiveness, since the products making the move are primarily sold in the Middle East and North Africa. One big benefit: It is gaining four weeks of shelf-life due to reduced shipping times. It also said the pilot plant in Manama will help improve the company’s capacity to innovate to regional trends. (Company reports)

Vietnamese infant formula maker Vietnam Nutrition Food Co. (NutiFood)officially opened its joint-venture manufacturing facility in Bjuv, Sweden. NutiFood owns half the facility while Swedish dairy co-op Skånemejerier Ekonomisk Föreningand Swedish private investment firm Backahill Groupeach own 25%. The $20-million facility will produce about 5,000 tons of infant formula and 10,000 tons of milk powder annually for European and international markets. A planned Phase 2 expansion will focus on fresh and canned organic milk. (USDEC Vietnam office)

French dairy giantLactalisacquired Italian cheese manufacturer Nuova Castelli, buying an 80% stake from UK investment fund Charterhouse Capital Partner and the remaining 20% from additional stakeholders. Nuova Castelli operates 13 sites in Italy and three abroad in Hungary, Poland and the United States. It recorded turnover of €460 million (about US$518 million) in 2018, about 70% of which came from exports. Nuova Castelli produces a number of Italian cheeses, including Parmigiano Reggiano and Mozzarella di Bufala Campana. The deal bolsters Lactalis’s already hefty Italian brand portfolio, including Parmalat, Galbani, Invernizzi, Vallelata, Locatelliand Cademartori. (Le Courier, 5/31/19; FoodBev.com, 5/31/19)

Citing unnamed sources, Britain’s The Telegraphrevived speculation that Mondelez Internationalis exploring the sale of its Philadelphiacream cheese business. Rumors that the company is looking to offload the brand have been circulating on and off over the last four years. (The Telegraph, 6/1/19)

Prairie Farms Dairyrecently introduced milk snacks, new ice cream flavors and premium milk in quart and 14-ounce containers. New products also include small batch ice cream, available in 25 flavors and whole milk yogurt.  
Besides keeping up with changing consumer demands, these efforts are meant compete with alternative beverages.(FarmWeekNow.com, 6/11/19) 

Four USDEC members are represented on the list of finalists for the 2019 World Dairy Innovation Awards.Darigoldis a finalist in the best dairy drink category for its FITproduct. Sargento Foodsis a finalist in best dairy snack for Sunrise Balanced Breaks, and Agropurfor best butter/dairy spread for Natrel Whipped Cottage Cheese Dip. Dairy Farmers of Americais a finalist in four categories: best functional dairy (Live Real Farms Whole Milk Smoothies); best manufacturing/processing innovation (GoPro Camera Installation at Scale), best marketing campaign or initiative (Mud Season Milk), and best new brand/business (Craig’s Creamery). The World Dairy Innovation Awards celebrate and highlight the best dairy industry developments. Winners in all 22 categories will be announced on June 26. (FoodBev Media, 6/4/19) 

Lao-Jagro—a joint stock company with investors from Laos and Japan—and Vietnam’s Vinamilkhave started construction of an organic dairy “resort’ in Xiangkhouang, Laos. The long-term goal is to develop a farm complex with 100,000 cows, up from the initial 24,000 cows … Saputo Inc.has announced the renewal of its partnership with Le Grand défi Pierre Lavoie, a non-profit organization representing one of the largest health movements in Quebec. Saputo is contributing more than $2.1 million over four years to fund two events: a 270-kilometer youth running relay and a 1,000-kilometer cycling relay. (Dairy Reporter, 6/11/19; Global Newswire, 6/11/19) 

Taiwan’s Jetton Biochemistry Co.plans to open a new facility in Nampa, Idaho, creating 25 jobs and processing 2.4 million pounds of milk per year. It will be a blended powder factory that produces a proprietary dairy formula, according to a press release from the Idaho Department of Commerce … Chinese dairy processors Yiliand Mengniuare adding new manufacturing sites to pump up production of fluid milk products. Mengniu announced it is building a new factory in Jiaozuo and Yili will reportedly build a fluid milk site in Lin Dian County … Retailer Spinneys has announced plans to open eight more supermarkets in the United Arab Emirates this year … Oman Food Investment Holding Company has reportedly secured $46 million in financing for new food projects in the Middle East … UK dairy company Müllersays it is targeting a total sugar reduction of 25% across its branded yogurt portfolio by June 2020 … At least three dairy companies have expressed an interest in buying Fonterra’sDennington site—a milk powder and cream production facility on the outskirts of Warrnambool, Australia. Fonterra announced last month that it plans to close the plant.(Idaho Press, 6/11/19; Food Navigator, 6/6/19; Arabian Business, 6/1/19, 6/4/19; Dairy Reporter, 6/11/19; The Weekly Times, 6/11/19)

Darigoldhas expanded its Mexico operations, hiring four new team members to increase market presence and target a growing Mexican middle class. “We are excited to grow our team in Mexico to deliver services through the addition of these talented individuals,” said Jonathan Spurway, leader of Darigold’s ingredients business. “Given their experience, we are confident the team in Mexico will be able to help Darigold create and foster direct relationships with our customers in Latin America and thereby better understand and serve their unique needs.” 

Arla Foods has developed a new artificial intelligence tool to better predict milk production from its farmer-owners, which will allow the Denmark-based dairy cooperative to better utilize the milk it receives and make the value chain more sustainable. Arla’s AI tool predicts milk production from 1.5 million cows in only a few hours rather than days. And the predictions are more accurate than when they were made manually using Excel sheets. (Dairy Reporter, 6/17/19)

Swiss dairy companyEmmi is increasing its stake in Laticínios Porto Alegre Indústria e Comércio S/A, based in Brazil, from 40% to 70%New Zealand’sKeytone Dairy Corporation has executed a binding agreement for the strategic acquisition of Omniblend Pty Ltdfor A$22.6 million (US$15.5 million). Omniblend is an Australian developer and manufacturer of health and wellness powdered and UHT drink products. (Dairy Reporter, 6/18/19, 6/17/19) 

Construction on the $260 million Mazoon Dairyin Oman is 80% complete, and the facility is set to open in July. The dairy is expected to house 5,000 dairy cows by the end of this year – and 25,000 eventually … Saputo Inc.completed a series of acquisitions last year which contributed to higher revenues. In the fiscal year ending in 2018, Saputo posted CAD$11.5 billion (US$8.6 billion) in revenues, which increased by 17% in 2019 … Ekosem-AgrarAG, the German holding company of Russian milk producer Ekoniva Group, has built a 6,000-cow facility in Siberia’s Novosibirsk region … U.S. free-range milk company Hart Dairyhas secured $10 million in funding to expand its dairy product capabilities and continue to innovate its animal-welfare practices. Australian-based investment firm Alium Capital helped the process. (ConstructionWeekOnline, 6/11/19; Dairy Reporter, 6/17/19; FoodBev Media, 6/7/19) 

Fonterra Co-operative Groupsold its 51% stake in UK WPC-maker Fast Forwardto its joint venture partner First Milk. Effective next month, First Milk will become the sole owner of the joint venture’s WPC manufacturing operation at its Lake District Creamery plant. In addition, First Milk unveiled a new sales and distribution partnership with Havero Hoogwegt, part of the Hoogwegt Group. Havero Hoogwegt sells to more than 50 countries and will market Fast Forward’s products. Separately, Fonterra is launching a line of value-added dairy products including UHT milk, milkshakes and yogurt in India through Fonterra Future Dairy, its joint venture with India’s Future Consumer. Fonterra Future Dairy will collaborate with contract processor Schreiber Dynamix Dairiesfor the initial rollout in Mumbai this month. It expects to start producing its own products at a facility in Tumkur, Karnataka, as it expands distribution nationally. Fonterra is also looking at expanding the product range to include paneer and other cheese. Fonterra originally entered India 20 years ago through a joint venture with Britannia Industries. It exited that JV in 2007. (FoodBev.com, 6/25/19; Dairy Markets, 6/18/19)

Land O’Lakesand Dutch ag co-opRoyal Agrifirm Groupare setting up a dairy animal feed joint venture in China. The new company, Agrilakes, will initially be based in Agrifirm’s existing manufacturing plant in Tianjin, with plans to build a new dairy premix and specialty plant on adjacent property. Chinese dairy farm growth in northwestern China and producers’ growing sophistication is driving demand for enhanced animal nutrition and productivity, the companies said. (Company reports)

Saudi Arabia’s National Agricultural Development Company(NADEC) announced it was abandoning plans to acquire Al Safi Danone(the Saudi Arabian joint venture between Danoneand Al Safi Holding). The deal has been in the works since early 2018. NADEC and Al Safi Danone said the deal was no longer in either company’s best interests . . . Mexican dairy processor Grupo Lalafinalized its acquisition of the Costa Rican dairy brand Mu!from owner Florida Ice and Farm Co.Earlier this year. Lala completed a $14-million upgrade to its San Ramon, Costa Rica, dairy facility . . . Central American investment firmMesoamerica Grouppurchased a 35% stake in Colombian dairy manufacturer Alquería. (USDEC South America office; La Republica, 6/26/19; The National, 6/23/19)

Japanese dairy trader Lacto Japan Co.plans to establish a wholly-owned sales unit in the Philippines by October to address rising dairy ingredient demand in the country. The official name for the unit will be Lacto Asia (Philippines) Inc. . . . Irish food promotion group Board Biaopened a new office in Tokyo, its third in Asia . . . China’s Junlebao Dairyplans to open a $72-million infant formula and adult nutritional milk powder facility in Tangshan City in October. Plant capacity is reportedly 22,000 tons per year. (USDEC China office; USDEC Southeast Asia office; USDEC Japan office)

 

Source: US Dairy Expo Council

David Norman Receives Distinguished Service Award

David Norman, Liberty, Pa., received the Distinguished Service Awards given by the American Jersey Cattle Association in ceremonies June 29, 2019, during the association’s 151st Annual Meeting in Saratoga Springs, N.Y.

The Distinguished Service Award is presented to individuals who have rendered outstanding and unselfish service for many years and thereby have made a notable contribution to the advancement of the Jersey Breed in the United States.

Norman has served two three-year terms as Director of the Third District of the AJCA during which he served on the Breed Improvement, Development and Information Technology/Identification Committees. He also chaired the Finance Committee while serving as a member of the Joint Operations Committee. For 30 years Norman served as the secretary-treasurer of the Pennsylvania Jersey Cattle Association (PJCA). During his tenure with PJCA, he played multiple roles in the state’s hosting of three Annual Meetings of the USJersey Associations. He also served the organization as director and president.

For nearly three decades, the Norman family has sponsored the Norman Genetic Award to Pennsylvania’s highest herd for genetic merit. The family is also a president’s level donor to the AJCC research foundation. Fittingly, Norman with his wife, Aggie, placed the final bid on two of three canvas giclee prints of “The Jersey” offered at the 2018 AJCC Research Benefit Auction in Canton, Ohio for a combined $7,200.

Norman has merchandised his elite genetics to fellow Jersey breeders through private treaty and public sales. He has consigned to the National Heifer Sale, the All American Jersey Sale and the Pot O’Gold Sale. A 1987 recipient of the AJCC Young Jersey Breeder Award, Norman remains a staunch supporter of youth involvement. He has encouraged many young Pennsylvania breeders to apply for the award on the state and national levels with mentorship and support.

Norman grew up on Normandell Farms, operated by his family for over 90 years. In 1978 he went into farm partnership with his father and brother, Ernest. Today the two brothers milk 110 cows and farm 300 acres.

The American Jersey Cattle Association was organized in 1868 to improve and promote the Jersey breed. Since 1957, National All-Jersey Inc. has served Jersey owners by promoting the increased production and sale of Jersey milk and milk products. For more information on its programs and services, visit www.USJersey.com or call 614/861-3636.

 

 

Dairy tech firm ordered to pay $825k over price fixing case in NZ

Dairy technology company GEA Milfos has been ordered by the High Court in Auckland to pay $825,000 after admitting to a charge of price-fixing with a competitor, Dairy Automation Limited (DAL).

GEA Milfos also agreed to pay the Commerce Commission $100,000 in legal costs for bringing the case to court.

The court heard that German-headquartered Milfos and Hamilton-based DAL were competitors in the supply, installation, and maintenance of milk sensors and herd-management systems.

They agreed to use a shared pricing spreadsheet for customer quotes, however.

In his judgement, Justice Edwin Wylie noted that the fact the conduct was in anticipation of a legitimate exclusive supply arrangement was not a defence.

He said Milfos and DAL were competing in a market that was important to the New Zealand dairy industry, and one which had limited providers for farmers to choose from.

“In my view, Milfos’ conduct was certainly careless – even grossly careless,” Justice Wylie said.

“While Milfos and [DAL] did not set out to enter into an illegal arrangement or understanding, they nevertheless engaged in conduct that gave them an improper advantage over their customers and competitors.”

The partner of Milfos in this action, DAL, was later purchased by the Livestock Improvement Corporation (LIC).

LIC chief executive Wayne McNee said his managers put a stop to the practice and reported it to the Commission as soon as they became aware of it.

“Since then, we have fully co-operated with the Commission and were granted immunity from prosecution under its leniency programme,” Mr McNee said.

“The Commission is not taking enforcement action against LIC, its employees or subsidiaries.

“Our co-op exists to serve the best interests of our farmer shareholders, who own the company. That’s why we acted swiftly to put a stop to this conduct and report it to the Commission.”

 

Source: Radio NZ

Ryan Junio Receives 2019 Young Jersey Breeder Award

Ryan Junio, Pixley, Calif., received one of six Young Jersey Breeder Awards given by the American Jersey Cattle Association in ceremonies June 28, 2019, during the association’s 151st Annual Meeting in Canton, Ohio.

The Young Jersey Breeder Award is presented to individuals or couples who are at least 28 years old and under the age of 40 on January 1 of the year nominated, who merit recognition for their expertise in dairy farming, breeding Jersey cattle, participation in programs of the American Jersey Cattle Association and National All-Jersey Inc., and leadership in Jersey and other dairy and agriculture organizations.

Junio has been involved with Jerseys since he was 13 years old. Today he manages Four J Jerseys with his family. They own over 6,000 Registered Jersey cows and heifers and have an actual 2018 rolling herd average of 18,819 lbs. milk, 919 lbs. fat and 700 lbs. protein.

Genomic testing has been a key tool in helping Junio reach his goals as a breeder. In 2018, a homebred Four J heifer was the high seller at the Arethusa Avonlea Summer Splash II sale at $92,000. Other accomplishments include having had 135 Hall of Fame lactations and over 124 of the animals currently ranked among the top 1.5% for GJPI. Over 1,900 cows in the herd are scored Excellent or Very Good.

In 2017 Junio received the California Young Jersey Breeder Award. He also served as a delegate for Select Sires last year.

The American Jersey Cattle Association was organized in 1868 to improve and promote the Jersey breed. Since 1957, National All-Jersey Inc. has served Jersey owners by promoting the increased production and sale of Jersey milk and milk products. For more information on its programs and services, visit www.USJersey.com or call 614/861-3636.

 

Josh and Katie Carpenter Receive 2019 Young Jersey Breeder Award

Katie and Josh Carpenter, Attica, N.Y., received one of six Young Jersey Breeder Awards given by the American Jersey Cattle Association in ceremonies June 28, 2019, during the association’s 151st Annual Meeting in Canton, Ohio.

The Young Jersey Breeder Award is presented to individuals or couples who are at least 28 years old and under the age of 40 on January 1 of the year nominated, who merit recognition for their expertise in dairy farming, breeding Jersey cattle, participation in programs of the American Jersey Cattle Association and National All-Jersey Inc., and leadership in Jersey and other dairy and agriculture organizations.

The Carpenters established the “All Bright” prefix in 2010 as first generation Jersey breeders. Today their Registered Jersey herd consists of 30 cows with a 2018 actual rolling herd average of 19,526 lbs. milk, 988 lbs. fat and 723 lbs. protein. They fulfilled their lifelong dream of purchasing their own farm in 2017 and have plans to include a micro-creamery with on-farm processing facilities to market A2 milk, yogurt and cheese curds in a joint start-up project with another fellow breeder, Vintage Cow Farmers Market LLC.

Katie and Josh began by growing the group of Jerseys within the Holstein herd at Plato Brook Dairy where they were managers and later partners. They intensified the breeding program for production and type, laying the foundation of the herd today. They also enjoy showing their animals with their two young sons, Kyle and Gavin.

The Carpenter family is also active in their state Jersey community. They are active members of the Niagara Frontier Jersey Cattle Club and the New York State Jersey Cattle Club. Katie has served on New York’s Next Generation Sale Committee for the past three years and is co-chair for the 2019 National Heifer Sale.

The American Jersey Cattle Association was organized in 1868 to improve and promote the Jersey breed. Since 1957, National All-Jersey Inc. has served Jersey owners by promoting the increased production and sale of Jersey milk and milk products. For more information on its programs and services, visit www.USJersey.com or call 614/861-3636.

 

Economist warns Fonterra could end up in foreign hands

Economist Peter Fraser: ‘Fonterra is a private tennis club for the enrichment of its members.’

Fonterra is heading for an “apocalypse cow” which threatens its survival, economist Peter Fraser says.

The dairy giant’s problems are deep seated, and the farmers who own it are partly to blame because they demand too high a price for their milk and starve Fonterra of the capital it needs.

This week Fraser employed fire-and-brimstone rhetoric in a Victoria University presentation entitled Apocalypse Cow: why Fonterra has failed.

The self-described “guerrilla economist” has left a sour taste in the mouth of Fonterra management, who claim he has a conflict of interest because he has advised Agriculture Minister Damien O’Connor on changes to the dairy industry.

At the same time he is a consultant to a rival processor over the Dairy Industry Restructuring Act, which will be amended later this year. The act created Fonterra.

Fraser, who can often be found on Wellington streets in the early hours working at his specialist water blasting business, says it is no secret he is advising one of the independent dairy companies regarding the DIRA review.

“New Zealand’s a small place, all the experts on DIRA know each other and whenever there’s a DIRA review, it’s the same group of people who turn up.”

As far as being part of a recent “clandestine” meeting with O’Connor – described as such by a rural media publication – Fraser said he had never lobbied to meet with the minister but had received an invitation that he was happy to accept.

Last month O’Connor released the Government’s proposals to amend DIRA for the first time in 17 years, which were met with a mixed response.

In a bow to public concern about “dirty dairying”, the new law will allow Fonterra to refuse milk supply from farmers in circumstances where milk is not compliant or unlikely to comply with Fonterra’s terms and standards of supply or is supplied from newly converted dairy farms.

Fonterra’s terms of supply will include environmental, animal welfare, climate change and other sustainability standards.

But whether a revamp of the act will address the fundamental issues that Fraser raises is uncertain.

He says when the Government changed the law in 2001 to create Fonterra, it was to allow them do great things for the country and farmers, but instead little wealth has been created in the co-op.  

At bottom the problem is that Fonterra pays farmers too much for their milk. The “retentions” – what is left over to run the co-op after farmers are paid – have not been enough to put it on a sound financial footing.

At the same time its share price has fallen by 40 per cent since 2012; in the last year, its total value has dropped from $8.2 billion to $6.25b. On the plus side, it has paid out $2.5b in dividends to farmers and unit holders since 2013.

But what of the $10 billion Fonterra returned to its farmer shareholders last year through the milk price and which has a direct impact on the rural economy? Farmers are estimated to spend about 46c of every dollar in their local community, and create jobs on farms and in factories.

Fraser argues even without the creation of Fonterra, there would have been a relatively thriving dairy industry. Most of the value Fonterra has created has gone into soaring land values.

“Fonterra is a private tennis club for the self-enrichment of its members. If you overpay for milk, the capital appreciation does not go into the share price but into farmers’ land.”

For years the mantra has been to add value to the milk Fonterra collects. Strenuous efforts have been made to do just that, so from a low base in 2001, 45 per cent of milk is now used for value add products.

Fraser is scathing in his assessment of the efforts.

“The foodservice business uses 45 per cent of milk and supplies 33 per cent of revenue. It’s not earning anything, they are wasting their time. What is foodservice? It’s getting a 25kg block of cheese, grating it and putting it in a bag for Pizza Hut. It’s a value added product but it’s not that flash. They would be better off putting it into milk powder.”

Analyst TDB Advisory backs this view of where Fonterra should focus its efforts. It says the return on commodities is surprisingly good, and suggests it should look at returning to shareholders a large amount of the $5b capital invested in its consumer and foodservice, China farms and international milk pools.

Fraser has little time for the complaint by Fonterra that it is hamstrung because under DIRA it has to collect most farmers’ milk. Rather, he says, “the milk has turned up because Fonterra wanted it”.

He points to the goal set by former chief executive Theo Spierings in 2016, to add a further billion kg of milksolids by 2026.

“Given it took 100 years to get to 1 billion, to get an extra billion in 10 years would be going really well.”

To start to turn the co-op around, Fraser would immediately remove 50c off the promised payment to farmers for 2019-20, restore the dividend to 30c, turn over the setting of the base milk price to an independent body, and ensure milk goes to the highest value processors.

He is not happy with the Government’s DIRA moves, which he says are a minor tweaking of the milk price setting regime and a weakening of the pro-competition measures.

He warns the proposed sale of Westland Milk Products to an offshore buyer is just a “dress rehearsal” for a potential sale one day of Fonterra to a foreign buyer.

Fonterra managing director co-operative affairs Mike Cronin responded in a statement:

“Our focus right now is on the future of our co-op. We’re well down the path of a strategy review which will enable us to deliver on our potential and meet people’s expectations. We know where we want to go, but how we get there will take time. We will play to our strengths – our New Zealand provenance, our pasture-based farming model and our dairy know-how.”

Source: stuff.co.nz

Use of Beef Sire Semen in the Canadian Dairy Industry

Economics drives profitability! In the dairy industry, there have been various factors in recent years that have affected the economics of genetic selection and herd management decisions. One of the significant outcomes has been a growing trend towards the use of beef sire semen for breeding Holsteins and dairy cattle of other breeds. Let’s take a closer look at the current status of this recent trend in Canada.

Current Trends

As part of the Lactanet database used for genetic evaluations, over 1.5 million new insemination records are added each year. For Holstein females, nearly 30 million breeding records have now been accumulated since 2000. As part of this data, the service sire is recorded, including its breed. Figure 1 shows the trend in terms of the proportion of Holstein females bred by semen grouped into three categories:

  1. Holstein sires
  2. Other dairy breed sires, including Ayrshire, Jersey, Brown Swiss, Guernsey, Canadienne and Milking Shorthorn
  3. Beef breed sires

Figure 1 clearly shows that the percentage of Holstein females bred to sires of another dairy breed has remained very low at roughly 0.5%. Given the stability of this trend, the relationship between the two other trends is completely opposite. Prior to 2005, the use of Holstein semen to breed Holsteins was consistently 98% but this dropped slightly to 96% over the period from 2005 to 2013. More recently, however, the rate of this decreasing trend has been faster to hit 92% for 2018. Based on the data currently available for 2019, which represents approximately 40% of the full year, an all‐time low has been reached with only 89% of Holsteins being bred with Holstein sire semen, and this statistic is expected to be even lower as the year progresses. Figure 1 shows clearly that this decreasing trend of Holstein on Holstein breeding has completely resulted from a simultaneous increased popularity of breeding Holstein females with beef breed sires. The use of beef on dairy was consistently below 3% before 2013 but has now surpassed the 10% level so far in 2019.

What has Changed?

Dairy production relies on pregnancies to produce heifer calves that end up as future replacements for the milking herd. Under normal circumstances, half of all pregnancies result in a bull calf, which are usually sold soon after birth, and until recently most Canadian dairy producers simply kept and raised all of the resulting heifers until they calved for the first time. While the number of heifer replacements needed depends on the herd replacement rate, raising all heifers born on the farm generally produces too many cows in the milking herd. When prices offered for bred heifers and/or young cows are high, selling them to other producers or for export make good economic sense.

Two major technologies changed the standard thinking and economics of dairy production in recent years. The first was the use of sexed semen to breed the best females in the herd, which translates to a 90% chance of producing a heifer calf from each pregnancy. In the most extreme scenario, the same number of heifer calves can be produced from 55% of the pregnancies if they resulted from sexed semen compared to using 100% conventional semen. Genomic testing is the second new technology with a major impact on dairy production economics. At a current cost of $33 per animal, producers are better able to determine which young heifer calves are not worthwhile raising to enter the milking herd, which then saves significant dollars otherwise spent on rearing costs.

Therefore, dairy producers using some level of sexed semen in the herd have two options available to them. The first includes producing even more heifer calves than needed for herd replacements but then genomic testing an appropriate proportion of them so as to know which to sell at a young age. A second option when using sexed semen to breed the top dams in the herd is to make different breeding choices when mating the poorest cows in the herd. These days, such breeding choices include the use of beef sire semen when there is already no interest in producing a heifer calf replacement from a given dam, and when there is a premium sale price for young calves, either male of female, that are beef x dairy crossbreds.

Summary

In the end, there are three economic realities related to breeding decisions that dairy producers need to think about for maximizing their herd profitability:

  1. It is costly to raise every heifer calf born in the herd, especially when using sexed semen, unless there are plans for herd expansion during the next year or two.
  2. Genomic testing helps to better identify which heifer calves are not likely to perform well in the milking herd and can be sold at a young age to save on rearing costs.
  3. While it is important to get most cows in the herd pregnant to start another lactation, it is not necessary to produce a heifer calf from all such dams and it may be most economical to breed the poorest cows with beef sire semen to benefit from the premium sale price obtained from beef x dairy crossbred calves.

Author:           
Brian Van Doormaal, Chief Services Officer, Lactanet

Download a PDF copy of this article

Boutique dairies on the rise, as Australian farmers look to process their own produce and set prices

Kel and Mahlah Grey with The Pines Micro-Dairy’s next generation, Eliza, at their Kiama farm.

They may be small, but boutique dairies are thinking big.

Boutique farms across New South Wales are choosing to bypass processors in favour of on-site processing in an effort to create more sustainable farming practices, set a more reasonable price for their products and create niche products to sell directly to their consumers.

On the state’s south coast, where many dairy farmers are struggling off the back of a three-year drought, The Pines Micro-Dairy in Kiama milks just 26 cows.

It is a small operation, but one with big ideas.

All the products on Kel and Mahlah Grey’s micro-dairy are processed and packaged on the farm, before being sold at farmers markets between Kiama and Sydney.

Quality not quantity

Mahlah Grey said, unlike most other dairy farmers, they were able to control their price point, by selling directly to consumers.

The farm faced fewer challenges than some others in the region, she said.

“Controlling our price gives us more security.”

More recently, the Greys have started making cheese and developing a range of boutique products to complement their milk.

As a sixth-generation farmer, Kel Grey knew he had to think outside the box with their products if they were going to survive as a business.

“We expanded into cheese and yoghurt and we are still experimenting with that,” Mr Grey said.

“We are in the best position we have been in for three years.”

On the mid-north coast, an hour west of Port Macquarie, Ian McKittrick runs a small number of Jersey cows and sheep at Ewetopia and creates his own niche sheep-milk products including cheese and yoghurt.

These are processed and bottled on his farm.

Like the Greys, Mr McKittrick is more interested in producing a high-quality product, than large amounts.

“Sheep-milk products do give us a point of difference,” Mr McKittrick said.

“Sheep’s milk is high in fat and protein and that is what cheese is all about,” he said.

Ewetopia sells its boutique sheep’s cheese at farmers markets and to upmarket restaurants but Mr McKittrick said they did have plans to sell more widely eventually.

“We thought we would be at that point now, but because of the drought, no,” he said.

And even though they don’t make a lot of money selling their milk they know it is a good product, and enjoy the contact with their regular customers.

“We do have very loyal customers here, and it has been more about meeting our local supply,” he said.

Selling directly to consumers creates appreciation for farmers

Both The Pines Micro-Dairy and Ewetopia rely on their local farmers market for direct contact with their consumers.

Trisha Ashelford, who runs two farmers markets on the NSW south coast, said their success showed many people wanted direct contact with their local farmers.

“Having a direct base is so important,” Mrs Ashelford said.

“Farmers are actually getting the right price for their products.

“It is also an education process for consumers because they can chat to farmers, find out where their food comes from and how much it costs to produce,” she said.

 

Source: ABC News

Owens Brothers Receive Master Breeder Award

Wilfred, Walter and Roger Owens

Willfred, Walter and Roger Owens of Owens Farms Inc., Frederic, Wis., received the Master Breeder Award given by the American Jersey Cattle Association in ceremonies June 29, 2019, during the association’s 151st Annual Meeting in Saratoga Springs, N.Y.

The Master Breeder Award is presented to an AJCA member, family, partnership or corporation that has bred outstanding animals for many years and thereby made a notable contribution to the advancement of the Jersey breed in the United States.

Owens Farms Inc. was established in 1912 by the late Wilfred Owens (grandfather of award recipients) and in 1936 his son, the late Harold Owens (father of award recipients) introduced Jerseys to the farm. The rest of the family followed suit and have since dedicated their lives to the proliferation, promotion and advancement of the Jersey breed.

Wilfred, Walter and Roger have been involved with the daily duties of the operation from a young age. In 1959 Wilfred purchased his first project heifer, Basil Commando Gertrude, Very Good-85%, who became a herd matriarch with 20 direct maternal generations and over 3,500 registered females to date in herds across the country. The “Gertrude” line also has over 145 registered bulls with over 34,000 daughters.

Other notable individuals include O.F. Berretta Rebekah, Excellent-90%, dam of influential sires O.F. Barber Rocket and O.F. Mannix Rebel-ET who together have over 21,000 daughters in 15 countries; past All American Premier Performance Cow, 1999 Wisconsin Cow of the Year and 2015 Jersey Journal Great Cow Contest finalist, O.F. Lester Ladyslipper, Excellent-94%; and the herd sire O.F. Montana Saber-ET with over 8,500 daughters in 970 herds. The Owens have marketed their elite genetics throughout the United States with approximately 1,900 females sold over the past 35-plus years to 230 buyers representing 18 states.

The three Owens brothers are active in their communities and various agriculture organizations. Wilfred has served as a 4-H leader for 37 years and on the Polk County 4-H Leaders Federation Board for 26. Roger has served as a 4-H leader, on the Lorain Town Board and on the Frederic School Board. Walter was a 4-H dairy judging coach for over 37 years and served on the Board of Directors of the UW-River Falls Ag Alumni Association and on the Polk-Burnett County DHI Board, 10 years of which he was president. In addition, all three men have served on the Wisconsin Jersey Breeders Association board of directors, with Walter and Roger serving terms as president. Wilfred was on the AJCA Board of Directors for six years where he chaired the Registration Committee. Walter served as AJCA Director since 2012 and is the current AJCA Vice President. He also serves on the Finance and Development Committees.

The Owens Farms Inc. herd consists of 721 cows on test with a December 2018 actual rolling herd average of 18,970 lbs. milk, 947 lbs. fat and 732 lbs. protein.

The American Jersey Cattle Association was organized in 1868 to improve and promote the Jersey breed. Since 1957, National All-Jersey Inc. has served Jersey owners by promoting the increased production and sale of Jersey milk and milk products. For more information on its programs and services, visit www.USJersey.com or call 614/861-3636.

 

Despite improvements, NY dairy industry faces mounting challenges

Small and mid-size dairy farms in New York and nationwide are disappearing, as farmers face a choice: Either scale up, or shut down.

Recently released agricultural census data illustrate the overall decline in the number of dairy farms, coupled with the consolidation of mid-size farms that are being squeezed by low milk prices and disruptions caused by weather and trade disputes.

Between 2012 and 2017, New York lost over 880 dairy farms across the state. In an eight-county area that includes the Capital Region, there were 100 fewer dairy farms in 2017 than five years earlier.

The data show the biggest losers have been mid-size farms.

The number of New York dairy farms with between 20 and 200 heads of dairy cattle fell by nearly a quarter in the five-year census span, while the number of farms with over 200 dairy cows grew  more than 11 percent in the same time.

Nationally, there were 17 percent fewer dairy farms with less than 200 head of dairy cattle in 2017 compared to 2012, while the number of farms with at least 2,500 dairy cows grew 24 percent over the same time.

“One thing striking about the census is that sort of the middle-size, smaller to middle-sized (farms) are declining, shrinking in number, shrinking in importance in terms of overall contribution to the dairy sector, and the large-scale farms are increasing,” said Andy Novakovic, a professor of agricultural economics at Cornell University, a nationally known expert on the dairy industry. “The larger-scale farms are showing a greater ability to survive.”

Sales haven’t necessarily gone up for farmers, even as there are fewer farms. Dairy farmers in Rensselaer County alone collectively saw $3.1 million less in sales in 2017 than five years earlier.

And yet recent data for 2019 show dairy farmers are largely in a better place than they’ve been over much of the last four years.

Data from the U.S. Department of Agriculture show milk prices at this point of the year are up about 11 percent over last year, and in May were higher than anytime since 2014.

“2019 is significantly better than (2018). That says more about how lousy ’18 was than that ’19 is really that great,” Chris Laughton, an agricultural economics analyst with Farm Credit East, said during this month’s Milk Marketing Advisory Council meeting. “It’s kind of gone from terrible to mediocre.”

But the majority of gains dairy farmers might normally have seen from this sort of price increase have been wiped out by the rising cost of animal feed. With farm fields in much of the country flooded and out of production, the price of corn, soybeans and other feed crops has risen significantly for dairy farmers.

“Although 2019 is going to look good by itself, it isn’t enough to make up for the hole we dug going back to 2015,” Novakovic said. “The average farmer is not going to be losing money in 2019, but they’re not going to make up for everything they lost in the previous four to five years.”

Alan Chittenden runs Dutch Hollow Farm near Stuyvesant with his parents and two brothers. The operation is one of the region’s largest, with 750 dairy cows over 2,000 acres.

Chittenden pointed to the lack of corn and soybeans that have been planted as a result of flooding, and thus higher feed prices raising on-farm costs.

But he also noted that ongoing trade disputes ignited by President Donald Trump, who has sought more reciprocal trade relationships with countries like China and Mexico, have cut off some dairy export markets. That’s become problematic for dairy farmers, who export 10 to 15 percent of U.S. dairy products to foreign countries.

In an industry like dairy farming with notoriously slim margins, any disruptions to the market can throw things off, he said.

“Agriculture is quite often the sacrificial lamb for other areas,” Chittenden said. “(President) Trump didn’t help us any with any of his dealings.”

Another, smaller factor that’s depressed demand for dairy products is the rise of plant-based alternatives, like vegan “butter” or almond milk — products growing in popularity that could portend a shrinking demand for dairy products moving forward.

“These are volume sales that otherwise would’ve been milk and now are something else. It clearly has an impact,” Novakovic said. “There’s also a feeling that this is just the beginning. We’re looking at non-dairy yogurt, vegan butter … we’ve got plant-based ice creams. It kind of feels like the worst is yet to come.”

Chittenden and his brothers took over the farm from their parents, and while he said it’s difficult for young people to enter an industry facing slimming profit margins, he said the farm will again be passed down again to younger relatives in the family — despite whatever challenges farmers may be facing today.

“Its in their blood, it’s in my blood,” he said.

“It’s a challenge. You’ve go to love it to be in it,” Chittenden said. “That’s the way it is. That’s the way it’s always been.”

Source: timesunion.com

Vermont dairy farmers back in business

A recent reprieve from the wet weather is providing Vermont’s dairy farmers a sunnier outlook.

Franklin County farmers say the ground is finally good to grow.

But they’re still about three weeks behind and the rain caused some significant problems. The moisture in the ground deprived the grass of vital nutrients.

Farmers say the first cut of hay should have between 18 percent and 20 percent of protein, but this year’s crop only had about 10 percent to 12 percent. That impacts the quantity of milk and beef and it means feeding the cows more corn, costing farmers more.

“As difficult as it’s been here, when we turn on our TV and look at the big rivers in the Midwest that are still underwater, and there’s people that haven’t planted their crops at all… We’ve harvested our first cut, so we’re hoping the rest of the summer is more moderate and normal weather,” said Harold Howrigan of the St. Albans Cooperative Creamery.

Farmers say they’ll feel the repercussions of the delay caused by this wet spring through next year.

 

Source: WCAX3

Why Westland is being gobbled up by Yili

Westland’s dairy farmers are expected to vote to sell Westland Milk to China’s Yili for $588m next week. Rod Oram details their two big historic failures that led to the sale, and what the rest of New Zealand exporters can learn from it.

Westland is a small dairy co-op but a big cautionary tale for our entire economy, not just the primary sector or narrowly dairying or even just co-ops. It shows how incredibly hard it is for a small commodity producing country like ours to move up global value chains to niches of greater value and market power. Astute strategies, excellent execution and diligent governance are required every step, every day.

And when we sometimes fail, it is often massive, well-resourced overseas companies that out-bid New Zealand companies for the valuable assets. Often, they already have the direct access to consumers at the top of the value chain which makes them dominant.

This is the case with Westland. On Thursday, its 429 farmer-shareholders will vote on whether to sell their co-op to Yili, the largest dairy company in China and Asia. It is the only viable option they have left after the co-op’s decade and a half of rapid expansion. In many ways the growth was good. But some long running bad decisions about capital management and strategy have cost the co-op its independence.

The $588 million deal makes sense for the farmer-owners in the short and medium term. They will receive $3.41 a share for their equity. Grant Samuel has valued it at $63.3 million to $99.7 million, compared with Yili’s $246 million offer, with the rest of the $342 million purchase price being the assumption of Westland’s liabilities and its excessive debt.

And Yili is promising to at least match Fonterra’s milk payout for the next decade, a welcome relief to farmers after Westland’s consistent under-performance against Fonterra in recent years because of its higher overheads and debt.

There’s no knowing whether Yili will pay more than Fonterra in years to come. It could if it was smart, and if it wanted to it could. It has invested $650 million in New Zealand since 2013 buying and expanding Oceania Dairy, a south Canterbury processor. If Westland accepts its offer, Yili’s investment here will hit $1.2 billion, slightly exceeding Fonterra’s investment in China in Beingmate, the troubled infant formula company, and farms.

Scale for a big ‘Kiwi’ brand

Oceania plus Westland would give Yili a big enough milk supply and production base to create a high-end, NZ-based brand under which to sell NZ dairy products to discerning consumers in China. If it succeeds, it could afford to pay its suppliers more than Fonterra pays because Yili controls its value and supply chain right to many of its customers, capturing value all the way up. Treating suppliers very well would guarantee their loyalty and innovation.

Of course, Yili could decide instead to maximise its profits here by only paying New Zealand farmers enough to stop them switching to competing processors. West Coast farmers would be particularly vulnerable to low payouts. It seems highly unlikely a competing large scale processor would invest there, given the efficiency challenge of collecting milk down the very long, thin coast.

Theoretically, a few premium, boutique dairy processors might set up on the coast over time to play to its magnificent natural environment. But they would need only groups of nearby suppliers. It’s hard to imagine Yili facing competition on much of the coast.

Fonterra couldn’t buy Westland

The opportunity for a New Zealand solution to Westland’s woes are long past. A few years ago, it might have sold some assets, most likely its Canterbury ones, to reduce its debt. But retreating to the West Coast would have only exacerbated its geographic limitations. Or, it might have found a joint-venture partner from home or abroad to increase its capital base, share the risks, increase its opportunities and maintain partial independence.

Being taken over by another dairy co-op was out of the question. Fonterra was the only candidate. But it has plenty of challenges of its own, thanks to its ill-considered and badly executed $1 billion investment in China. That has squandered its scarce equity capital, and increased its debt. Those in turn have forced changes of leadership, culture and strategy, and asset sales.

In essence, Fonterra has made some of the same mistakes as Westland. But, thankfully it has enough scale, skills and resources to dig itself out of its troubles. However, it might well have to bring in some external capital if it is to fulfil its potential.

Even if Fonterra was in better shape and willing to take on the Westland challenge, a merger was out of the question because of a disastrous capital decision Westland’s board made in their deep conservatism years ago. It has long kept its share price artificially low, currently at $1.40 a share, which is a fraction of Fonterra’s. Since shareholder-suppliers have to have shareholdings in proportion to the volume of milk they want processed each season, it was far cheaper to join Westland than Fonterra.

An equity-lite expansion

But that meant Westland raised far less equity capital than it could have to fund its expansion, thereby making it far more reliant on debt; and if Westland was to merge with Fonterra, its farmers would have to invest in its higher-priced shares. Many of them could not afford to, given the financial strains caused by Westland’s lower payouts.

It’s no surprise that the banks that have debt funded the rapid growth of dairying on the West Coast are among the most enthusiastic supporters of selling out to Yili. Some farmers are so strapped they can’t put their farms on the market for fear of losing much of their equity. They live on the forbearance of their banks, which are being careful to ensure an excessive number of farms for sale don’t depress the price.

ANZ, a big dairy farm lender on the Coast, stated in late May that the Yili offer was a “timely cash injection” for farmers who have struggled to recover losses incurred because Westland’s milk price lagged behind other dairy companies.

In other words, Yili is not only getting Westland’s shareholders off the hook, but also ANZ and the other banks they’ve borrowed from.

Yili helping ANZ too

ANZ went on to say that the deal was good for the economy of the West Coast, given dairy farming and processing accounts for some 14 percent of its economic activity. But that’s a rather unintelligent view of our economic potential. Yes, farmers get paid for their raw milk, and Yili’s workers get paid for their labour, and those locals in turn spend some of their money in their communities.

But by far the bulk of the wealth ultimately generated by that milk accrues to Yili and its shareholders and employees overseas. Yili’s offer is the best Westland shareholders can get. Yet such foreign ownership is absolutely not the best model for our entire dairy or primary sector, or the economy at large. We have to have the skills and capital to build up our own ownership of businesses that can push far up the value chain globally to where the real rewards lie.

That’s why Westland’s recent history is so important to understand and learn from. Back in 2001, when our dairy sector amalgamated to create Fonterra, Westland and Tatua were the only two co-ops, both small, that decided to go it alone. Waikato-based Tatua was in the heart of dairy country and was already moving away from commodity products. Its progressive culture and financial discipline have driven its subsequent growth and success.

But Westland began its independent life with three big disadvantages: its geographic isolation on the West Coast which, for example, increased transport and other costs; its commodity focus; and its conservative culture.

Over the subsequent 17 years it has substantially improved itself. It has strongly expanded its supplier base on the West Coast and over the mountains in Canterbury. It has expanded its milk collection by 34 percent just in the past seven years alone; it has invested in plant and overseas markets to move into higher value products such as infant formula; it has developed a full range of corporate functions it needs as an independent company, which it didn’t need when it was a small co-op dependent on the Dairy Board for marketing and innovation.

These days, for example, it has an office in Shanghai with some 20 staff to help handle its sales in China which were worth $118 million in 2018. This was its largest overseas market accounting for some 17 percent of its revenues that year.

Westland’s two big, bad decisions

But that admirable progress has cost Westland its independence because of two big, bad, decisions it made over the years – the capital one, and its decisions not to pursue its early lead in A2 milk. For excellent analysis of this please read this piece by Keith Woodford, the highly respected dairy sector consultant and researcher who had worked closely with Westland.

This is not just a dairy sector story.

Westland and Fonterra’s travails offer crucial lessons about governance, culture and strategy that apply widely across our economy. If we truly want to build and own a high value, resilient economy, we need to learn and apply them with every step, every day.

 

Source: Newsroom.

Send this to a friend