Archive for Dairy Industry

Milk production is rising even as small dairy farms shut down

New USDA data shows that the rate of small dairies that are closing is accelerating — but so is production of milk. That’s one effect of the growth of large dairies like this one operated by Riverview LLP near Murdock, Minn.

Dairy farmers are quitting en masse, but milk production keeps growing in another sign of the terrific forces at work against small dairies in the Upper Midwest.

A report this week from the U.S. Department of Agriculture showed that October milk production in the state grew by 15 million pounds, or nearly 2%, compared to the year before, even though the state lost 10% of its dairy farms last year.

Cows have been growing more productive since World War II, and the survivors in the dairy business today are generally more efficient than the ones who leave.

“Every new generation of cows is better than the ones we had the previous year. Why? Because of better genetics, because of better management,” said Marin Bozic, a dairy economist at the University of Minnesota. “The second factor is that as you have people exit the industry, typically those who exit are those who haven’t invested in their dairy recently, so those that remain will tend to have higher milk per cow than those that leave.”

Minnesota lost one in 10 of its dairy farms in 2018, and the roughly 2,500 that remain are in turmoil. More than 90% said in a recent Minnesota Milk survey that their industry is in crisis, and more than 40% said they either can’t get a loan from a bank or the terms are unreasonable.

The booming growth of dairy in western Minnesota, where Riverview Dairy is building farms that house as many as 9,000 cows, is feeding expansion of milk-processing capacity on that side of the state. Quebec-based Agropur has invested $250 million to triple the milk-production capacity of its cheese plant just across the border in Lake Norden, S.D., to about 9 million pounds per day. First District Association broke ground this fall on an expansion in Litchfield that will add 80,000 square feet to its processing plant there. Associated Milk Producers Inc. (AMPI) is expanding a plant in Paynesville, Minn., 35 miles west of St. Cloud.

“The I-29 corridor of Iowa, South Dakota and Minnesota has definitely seen the most cow growth, so it would make sense for future plants to follow cows wherever they may be,” said Lucas Sjostrom, executive director of Minnesota Milk, the state dairy trade group.

But southeast Minnesota just lost a processing plant. AMPI announced in early November that it is closing its Rochester cheese plant, which employs 75 people. The cooperative also closed its nonfat dry-milk plant in the northeast Iowa town of Arlington. Milk that had been processed at those two locations will be routed to an AMPI cheese plant in Blair, Wis.

The co-op cited a decline in dairy-farm numbers and milk production in the region as the reason for the closures.

Sjostrom insists small farms can be efficient and succeed. Prices are up by more than $4 per hundredweight in the past year for class III milk that’s used to make cheese. December futures for that milk are $18.72 per hundredweight. A Kemps ice cream plant in Rochester continues to accept milk. AMPI is expanding a plant in Sanborn, Iowa, 30 miles south of Worthington.

“Our farmers haven’t lost any choices,” Sjostrom said. “I think we’re in a decent phase of expansion in the Minnesota area that hasn’t happened in a while.”

But the long-term trend of greater efficiency in dairy is inescapable, Sjostrom said.

“We’ve significantly reduced the number of cows in Minnesota,” he said. “We are using somewhere around two-thirds less water and land than we were during World War II to make the same amount of milk.”


Wisconsin’s dairy industry would collapse without the work of Latino immigrants – many of them undocumented

The last time Roberto Tecpile left his home in the mountains of central Veracruz, his daughter Megan was just a few weeks old.

He hugged his wife, his parents and his children, then began the journey north to the USA, crossing through Laredo, Texas. It was the third time since Tecpile’s marriage to Veronica Montalvo that he left his country to work on a Wisconsin dairy farm.

The trip, more than 2,000 miles, is not uncommon among the families in and around Astacinga. The area has almost 7,000 people. Unemployment is in the double digits and virtually everyone – 96% – lives below the poverty level. Money sent from those working in the USA is one of the only ways to build solid new homes made of concrete.


Tecpile left five years ago and remains in Wisconsin. He works six days a week, about 10 hours a day at Rosenholm Dairy in Buffalo County.After work, he prepares dinner, takes a shower and, most evenings, calls home. Every two weeks, he heads to a grocery store in Arcadia and sends $300 to $500 to his family back in Mexico. 

Tecpile and Montalvo want to finish a home they are building in Astacinga – get the bathroom and kitchen done, install a tile floor, paint the walls. They hope to start their own business someday.

That means for now, Megan will know her father only through the nightly calls and by browsing photos on her mother’s cellphone.

“There’s no other option,” Tecpile says.

Reliable numbers on immigrants working in the dairy industry are hard to come by. A national survey taken five years ago for the National Milk Producers Federation estimated the immigrant workforce at 51% of the total.

Workers in Wisconsin express little doubt immigrants account for a larger portion of the dairy industry workforce today. They don’t work on just the biggest farms but also on operations that grew their herd beyond what a family can handle.

While unemployment is low, many farmers fill openings by passing word to Mexican laborers on-site, then accept the new workers who show up without asking too many questions.

Some farmers say they haven’t encountered a U.S.-born applicant in years.

Entry-level jobs may pay $11 to $13 an hour and can include free – albeit modest – housing. The immigrants may have to work nights, milk hundreds of cows every shift, toil in the wind and snow. The job can be dangerous; not everyone makes it back to their family.

Immigrants say the jobs are a ladder to a better life; farmers say the immigrants are the only means of affordable labor. So despite the rancor that surrounds national immigration policy, the workers keep coming and the farms keep hiring.

In dairy barns across Wisconsin, farmers and workers said there is a simple truth: Without the work of Latino immigrants – many, if not most, of them undocumented – the signature industry in America’s Dairyland would collapse.

Hiring immigrants caught on among Wisconsin dairy farms in the late 1990s and early 2000s, according to University of Wisconsin research.

Beginning in 2004, the state increased its annual milk production every year, and beginning in 2009, it annually set records – streaks that continue to this day. In 2012, then-Gov. Scott Walker initiated an incentive program urging farmers to produce even more, in the belief that foreign markets could absorb the increase. This fall, U.S. Agriculture Secretary Sonny Perdue essentially told family dairy farmers in Wisconsin: Get big or get out.

All of that increased production required new workers.

John Rosenow says half of his Buffalo County farm’s 18 employees – including Tecpile – are from Mexico. He started hiring them in 1998 when he was having trouble finding local workers.

He recalls hiring a retired state trooper. Within days, the trooper walked up his driveway and said he was leaving because he couldn’t keep pace with the milking operation. The dairy farmer kept him on but moved him to a new job.

Rosenow made his first immigrant hire after seeing an ad from a Dallas recruiting company. It sent him a worker named Manuel, who knocked out 10 hours a day for 54 days straight. When Manuel left, Rosenow hired two more Mexican workers. Over time, other farmers asked him for help hiring immigrants.

In the past 10 to 15 years, he has probably had about 150 job candidates. Only two were American-born, and neither was willing to do what was necessary, he says. One didn’t want to work on Fridays or weekends.

Omar Guerrero says his experiences are similar. During his time at Elkhart Lake’s Drake Dairy, the farm has received two job applications from American-born candidates. One lasted through an hour of training. The other didn’t really want the job; he just needed to claim he was searching for work to avoid losing food stamps.

When Guerrero arrived in Wisconsin 22 years ago, he didn’t have any difficulties finding a dairy farm job. There were barely any Latinos then. Farmers would even pay bonuses – say, $500 – to workers who could recruit newcomers.

Guerrero, now a citizen and settled with his family in the USA, started out as an undocumented immigrant, working as a milker, one of the toughest jobs on a dairy farm. At Drake Dairy, he learned more about the operation, took on new responsibilities and moved into management. Now he has a stake in the farm.

He is proud to have helped push the farm from 400 cows to 2,500. He says many of the workers are undocumented and only the ones who work outside with tractors are American-born. Across Wisconsin, he guesses, more than 90% of the immigrants in the dairy industry are undocumented.

Guerrero says he does not have difficulty finding workers; he’s built up a network of connections.

Some farms struggle to fill holes. They could compete for workers better if they raised wages, and some have gone to $14 and $15 an hour, Guerrero says. But for farms barely breaking even or losing money, increasing the payroll is prohibitive.

Hans Breitenmoser started to hire immigrant workers at his Merrill dairy farm 15 to 20 years ago. The farm had expanded beyond the point where his family could do the work by itself and the homegrown labor pool wasn’t there. The farm has 450 cows. Nine of the 12 hired workers are Latinos.

Breitenmoser says most dairy farmers are used to the idea of workers not being born in the USA. His parents, after all, came from Switzerland.

Starting pay on his farm is $12 and $13 an hour – a higher rate, he says, than what his farm really can afford. He acknowledges there’s little vetting; hiring the first person through the door is better than being selective and ending up with no person at all.

“I’ll hire them, and I’ll cross my fingers that they turn out to be a good employee,” he says.

The dairy farm that hired Blanca Hernández and her sister Guadalupe in 2006 had never hired anyone, much less Mexican workers. Hernández was told the owners didn’t trust foreigners, but they were unable to keep doing all the work by themselves. A nearby farmer vouched for immigrant workers. Hernández and her sister became the first employees.

By the time she took the job, Hernández had earned a law degree in Mexico and had worked once before in the USA. The law degree didn’t lead to a job, and the work – low-wage jobs for a cleaning company, airplane parts factory and car wash in North Carolina – didn’t allow her to save.

She left her hometown of Texhuacán and headed back across because her sister Guadalupe was going with her 4-year-old daughter. Crossing the border with a child is particularly dangerous; Hernández wanted to help. Once across, they made their way to Wisconsin, where Guadalupe’s partner worked.

Hernández says the Durand farm owners who gave them jobs were surprised to see the sisters writing down the correct number of hours for their pay – at the time, $6.25 per hour.

During their first days at the farm, the sisters cleaned the parlor in addition to milking 320 cows. The milk quality went up because the sisters were vigilant about cleanliness and sanitation.

“If I’m going to be a street sweeper, I’m going to be a good street sweeper,” Hernández says. “If I’m going to be a teacher, I’m going to be a good teacher.”

When the farm grew to 500 cowsor more, Hernández said, she was working 14 hours a day with no days off.

The sisters told the farm owner they were returning to Texhuacán. By then, the owners had undergone a change of heart.

“After four years, the boss wept,” Hernández says.

Immigrants take on risky, difficult jobs

Dairy jobs are inherently risky.

At 6.1 injuries per 100full-time employees in 2018, dairy workers at farms with more than 10 employees suffered higher odds of getting injured than workers in sawmills, according to the U.S. Bureau of Labor Statistics. Nationwide, that meant 6,500 injuries on those larger farms.

From 2012 through 2017, the U.S. Occupational Safety and Health Administration increased inspections of dairy farms with more than 10 employees or a temporary labor camp. At least 51 Wisconsin dairy farms were found in violation of some safety regulations during this period, according to the OSHA data.

Mexican immigrants often work the most wearing jobs. A University of Wisconsin study in 2009 found that immigrants tended to be relegated to routine, lower-paid tasks such as milkers or pushers, who clean manure in the barns and bring the cows to the milking parlors. When the study was done, 62% of the immigrants in the dairy workforce held one of those two jobs; 16% of the American-born workers held them.

Dairy workers averaged 57 hours of work a week and fewer than five days off each month.

In New York state, according to a survey in 2014-15 of 88 immigrant dairy farmworkers – the majority working on farms with more than 500 cows – about half of the workers said they felt rushed on the job, and breaks could be as short as five minutes in a 12-hour workday.

The survey, conducted by the Workers’ Center of Central New York and the Worker Justice Center of New York, found that more than one-fourth of the workers had suffered wage theft and two-thirds had experienced one or more injuries on the job, most of those disclosing they suffered an injury so severe it required medical attention.

John Peck, executive director of the Madison-based advocacy group Family Farm Defenders, says he would like Wisconsin to be a leader in socially responsible milk production, which would take into account paying workers better wages and paying farmers better prices, instead of measuring only the quality of the product.

“Farmers are always struggling to find workers, especially if they are not paying people well,” he says. “But at the same time, there are farmers going bankrupt. So how can they afford to pay workers, if they are losing their farms?”

Peck says consumers may fail to connect inexpensive milk at the store with inadequate pay for farmers, and with low-wage immigrant labor.

“If you want a cheap food policy, that means that you’ll be exploiting workers,” he says. “And the workers that are going to be exploited are going to probably be undocumented immigrants.”

Long, grueling hours

Salvador Salas worked on several farms in Wisconsin and Minnesota. He has good memories of one owner who made breakfast for workers and a farm that offered $12 an hour and paid overtime, as required in Minnesota.

There also was a Wisconsin farm where he worked 11- and 12-hour split workdays without a single day off, even for Thanksgiving or Christmas, for four years. He says the farm owner rarely paid him for more than 10 hours a day, no matter how long he worked cleaning barns, herding cows, feeding calves, pushing feed, milking. He started at $7.25 an hour plus free housing. His wages topped out at $11an hour.

“When one needs to work, there’s no (such thing as) hard work,” says Salas, who was undocumented his entire time here.

The toughest times for Salas were the winters when it was freezing outside and he had to move tires off tarps covering mounds of feed.

“That’s when it feels uglier,” he says. “When the wind is blowing and you are on top.”

He hurt his back working on the farm, he says, and told his boss about the accident – but never asked to see a doctor. He feared the farmer might think he was lying and wouldn’t help him.

Salas returned to Mexico early this year after more than six years on U.S. dairy farms. He was worn out and wanted to see his family.

He lives in Astacinga in a home he built by adding on to his father’s home, using savings from the dairy work. A chiropractor helped alleviate his back pain.

Couple’s plans cut short

Antonia Rodríguez worked in dairy longer than Salas. Her partner, Gerardo Nájera, says she used to take on 12-hour shifts before he was deported in 2012, and she had to cut back to care for their two U.S.-born children.

Her sister, Consuelo, says she would tell Antonia that working at a dairy farm was too hard, a man’s job. But her sister had never been scared of work. At 53, undocumented and living with her two younger children in a trailer that needed repairs, Antonia kept working at Clarks Mills Dairy Farm in Reedsville.

“As a mother, one has to work in whatever you can,” Consuelo says.

The last time the sisters talked on the phone, Antonia sounded weary. It was “one of those times when one becomes sad – you miss your family, your parents, your siblings,” Consuelo says.

Nájera says the plan was for their younger kids to finish school in the USA and for Rodríguez to return one day to Ciudad Juárez. He was building their home, and she was sending money to finish it. She would tell him that she wanted to go back so they could be together.

One afternoon last March, the cows were not lined up properly at the milking parlor. Rodríguez walked up from the pit where workers attach milking machines to udders and onto a concrete pad where the cows lingered. She didn’t have a stick or any physical barrier between her and the cows.

As she tried to move them, a cow knocked her against a half wall. Other employees heard her scream, came to her aid and moved the animal away. Rodríguez was unconscious, and as the ambulance arrived at the hospital, her heart stopped and she died.

The autopsy found rib fractures and lacerations in her heart and left lung.

OSHA fined the 800-cow farm, saying it didn’t ensure employees working with cows were protected from being struck and it didn’t train workers to improve safety.

For that, and another unrelated violation, the farm was fined $15,155.

Robert Goehring, co-owner of the farm, says Rodríguez had worked there since 2014, and he had personally trained her on how to move the animals. The OSHA representative said Goehring needed to train employees on animal behavior, which he says he hadn’t heard about.

Consuelo Rodríguez is taking care of her sister’s younger kids, 10 and 16, so they can finish high school in the USA. She set up a small altar at home for her sister, displaying her glasses, earrings and photos. She took it down because her nephew said it made him sad.

The children speak with their father regularly.

“They say they are fine,” he says. “But one knows they aren’t.”


Latino influence grows

The Rev. Matthew Sauer, pastor at the Manitowoc Cooperative Ministry, says that when he arrived in 2005, there were some Latino workers, but they weren’t very visible in the community. The Manitowoc School District had a 5% Hispanic enrollment.

Sauer noticed the immigrant population rising in 2010-11.

In the most recent school year, the school district had 14% Latino enrollment. In the city of Manitowoc, there are at least five Mexican restaurants, two with small attached grocery stores. In spring, a bull-riding rodeo attracted hundreds of Latinos, many of them from nearby dairy farms.

Manitowoc is among the 30 counties in the USA with the most dairy operations, according to the U.S. Department of Agriculture 2017 census.

Sauer says U.S.-born residents in the area have become more comfortable with the changing demographics. “Younger people are growing up with them, in their classes, which means that parents are meeting these cultures,” he says.

The story is similar in other rural Wisconsin communities. Though many Latino immigrants keep to themselves, their influence is unmistakable. Although many return to their hometowns, some settle in Wisconsin and start a family.

In Clark County, which ranks second in the USDA 2017 census, this month’s historical society newsletter noted a recent quinceañera celebration. In Marathon County, which ranks fourth in the census, the Hispanic Soccer League, founded in 2002, changed its name to the Central Wisconsin Adult Soccer League to be more inclusive, and U.S.-born players have joined immigrants on the pitch.

Trump election sparked worries

When Donald Trump won the presidential election after campaigning to crack down on illegal immigration, many Wisconsin dairy workers were nervous. Some left their jobs; some left the state or the country. Most kept working, and the threats never materialized.

Apolonio Sánchez says he planned to leave for Canada if Immigration and Customs Enforcement officials started to launch raids close by. His boss on a 120-cow farm in the Alma area told him not to worry, that wouldn’t happen. He stayed.

Sánchez says there are still undocumented immigrants arriving to work on the farms. There have been ICE arrests, but nothing approaching a massive crackdown.

Pablo Cruz works on a farm with more than 1,500 cows in Kewaunee County. He says most of the workers are undocumented – not only from Mexico but more recently from Honduras and El Salvador.

Breitenmoser, the farmer from Merrill, says the rhetoric against immigrants hasn’t been good for a dairy industry that relies on workers not born in the USA.

If all undocumented immigrants were to be deported, he says, “we would have dead cows piled up in our farms.”

He favors a process that would provide a path for undocumented immigrants to acquire legal status. “It’s disgusting that people are treating them like criminals for working their butts off,” he says.

Rosenow, the Buffalo County farmer, says everyone should understand the necessity of immigrants, but “I don’t see the solution happening very soon.”

A push for path to residency

The American Dairy Coalition and the National Milk Producers Federation have pushed to get dairy farms access to foreign agricultural guest workers through a visa program that is limited to seasonal work, such as crop harvesting. Dairy farms can’t hire these guest workers for year-round work.

The American Dairy Coalition has supportedreplacing the guest worker program with one that would eliminate some worker protections, such as the requirement to pay a prevailing wage.

Workers advocate groups pushed for a path to permanent residency and citizenship, which the National Milk Producers Federation supported. The worker advocate groups resisted efforts to expand the guest worker program, saying it leaves workers in a position to be exploited. Under the program, if a worker doesn’t do what an employer asks without complaint, the employer can fire the worker, which in general means the end of his or her visa.

In Wisconsin, Peck, with Family Farm Defenders, says undocumented immigrants are essential to the dairy economy and part of Wisconsin’s rural communities. “If they are so integral to our economy, why can’t they become citizens?” he asked.

In November, after months of negotiations that included agribusiness representatives and workers groups, 49 U.S. House members co-sponsored bipartisan legislation that would provide undocumented farmworkers and family members with a path to citizenship. It would allow dairy farms access to thousands of agricultural guest workers for year-round jobs and would dedicate an additional 40,000 green cards per year for agricultural workers.

Agricultural employers could sponsor workers’ getting green cards, and some seasonal guest workers could apply directly. The bill would create a pilot program with visas allowing workers to move freely among agricultural employers.

The bill would require agricultural employees to use the E-verify program to check whether immigrants are authorized to work. The bill has been referred to four House committees. If passed, it could face an uphill battle in the Senate.

No Wisconsin representative has co-sponsored the bill.

Border crossings more difficult

Tecpile says he would love to travel home, but there’s no guarantee he could get back. Crossing the border on the way north is riskier and more expensive, he says. The smugglers, called coyotes, who guide and transport immigrants illegally ask for $8,000 or more.

When Trump was elected, Tecpile says, he never thought of leaving. He knew American farmers need workers too much.

“I didn’t pay attention,” he says. “I had to work.”

In Mexico, Montalvo, his wife, says it’s hard to be separated this long.

Megan has never had a birthday party when she could hug her father. She wants him to take her to school. She wants him home.

“Sometimes my daughter needs her dad, but he isn’t here,” Montalvo says. “She knows he is working.”

Their son Kevin, 16, says holidays and other special occasions are tough.

“When all the family gathers, he isn’t here,” he says.

Many of Kevin’s friends, he says, also have parents working in the USA who stay away for five or six years at a time. He says he should go to Wisconsin, work on a dairy farm, be with his father and build “a good future.”

He isn’t afraid of trying to cross the border, an attempt that has left many migrants dead. His mother doesn’t want him to go yet. He is too young.

Maybe, she says, he could try crossing after he turns 18.

Source: Aberdeen News

Ernespie Farm is Named the 2019 Scottish Farmer of the Year

Dairy Farm of the Year was Ernespie, whcih is run by David McMiken

The McMiken family have scooped up the top dairy award at this year’s AgriScot, fending off tough local competition from two other farms located in the dairy heartland of Dumfries and Galloway.

Ernespie Farm run by the McMiken family was described as ‘outstanding’ by independent assessors – former chairman of AgriScot Alex Brown, and Robin Young.

David McMiken, who runs the farm along with his partner, Rebecca and his parents, returned to the family farm five years ago after studying automotive engineering at university, teaming with new ideas.

Since his return, he has fitted out a new 290-cow dairy unit plus silage clamps and feed storage with assistance from government and EU funding.

The herd graze outdoors during the day, in the summer months and David is helped on the farm by a full-time herdsman, as well as the help of one further employee and self-employed labour at peak periods.

No animals are brought onto farm, with genetic improvement being assisted by the selective purchase of embryos.

A farm visitor centre has been added which opened this past summer which includes a restaurant, animal barn, soft play area and outdoor facilities. Twenty-nine members of full and part time staff are employed, with Rebecca taking responsibility for the day to day running.

Gilmour Lawrie, who convenes the award on behalf of AgriScot, commented: “There were an encouraging number of farms forward for the award this year and I understand the independent assessors had their work cut out to choose the three finalists, let alone the ultimate Scottish Dairy Farm of the Year.”

The assessors also praised the other two finalists in the category, Baltier Farm, Whithorn, Newton Stewart, where the third generation of the Forsyth family milk 580 high yielding Holsteins and Drum Farm, Beeswing, Dumfries, farmed by the Harvey family.


Canadian dairy farmer says US dairy system needs overhaul

Vic Fremlin at 98th annual Rotary Community Day Parade in Sault Ste. Marie, Ont., on Saturday, July 20, 2019. And the Winner Is … Celebrating the Academy Awards is the theme. (BRIAN KELLY/THE SAULT STAR/POSTMEDIA NETWORK)

Vic Fremlin says the United States dairy industry isn’t going to get any better unless it changes its ways by producing less milk in order to increase its profit margin.

Trying to produce and filter more of its product into Canada’s dairy market is not the path to success, the long-time dairy farmer and owner of Lock City Dairies said Tuesday in a telephone interview.

Last week, American dairy giant Dean Foods filed for bankruptcy protection, claiming declining milk sales is taking a toll on the industry.

Dean Foods produces more than 50 brands, including Country Fresh, Land O’ Lakes and Dean’s. The company says it plans to continue operating and is working within the industry to find solutions.

The U.S. dairy catastrophe has caught the interest of U.S. President Donald Trump who wants to infiltrate more American dairy into the Canadian market.

But Fremlin argues that Dean Foods and the entire U.S. dairy industry is in a precarious position because the American system is broken and dairy farmers can’t make any profit, let alone break even.

“They think that by producing more product they’ll make more money. But that’s not the case. It’s the opposite. They need to produce better quality products, and less quantity in order to get better sales,” Fremlin said.

Canada’s supply management controls ensure that Canadians get the best dairy quality, which improves the market.

And it’s a market product that’s wanted by others, including in China and Japan, which in turn provides a gain to the Canadian market, Fremlin said.

Higher quality standards in Canada, which include no BST or growth hormones or additives, result in better quality products attractive to consumers.

The supply management control system in Canada protects quality and helps the dairy industry, Fremlin said.

The system allows dairy farmers to get a fair market price for the product at the highest quality. Quotas are set for a reason to ensure that the quality remains high and the market isn’t over saturated.

“You don’t dare do anything to jeopardize your quota. We’re allowed to have volumes of certain margins and the consumer doesn’t have to pay for this. It’s all paid by the farmers,” he said, something that’s opposite to the American system.

“Our supply management requirements are such that we don’t take assistance from the taxpayer. We are totally independent.”

Canada has already ‘sold out’ seven per cent of the dairy market to the United States as part of the new NAFTA agreement. A further seven per cent goes to the European market, Fremlin said.

While he expects American dairy to enter Canada over the next year, Fremlin said he’s confident consumers will see that the products are not produced in Canada and the quality is not the same. As well, the more milk they ship, the less they receive per litre.

“That’s not going to help American dairy farmers. They’re cutting their own throat. Producing more product, versus quality product, is not the answer to their problems,” Fremlin said.

He suggests the American market has seen a downturn of about five or six per cent this year while the Canadian market has enjoyed a one per cent growth rate during the same time period.

Fremlin said he believes that the Ontario Dairy Association needs to do a better job to educate consumers about the industry and how it works.

“It’s a very complicated system, but it’s a very successful system and recognized by others,” he said. “Others around the world now want a piece of our market.”

Fremlin said the dairy industry is also good for the Canadian economy, and especially rural areas where the family dairy farms exist.

“Agriculture is very powerful but we need to feed our own people and our standards are triple-A standards and it’s wanted for that reason,” he said.

He said that about every 20 cents of every dollar is driven to the dairy industry, whether it’s to pay staff, purchase equipment and other materials or hire veterinarians, among other things.

“This is a lot of money that helps the rural areas and I don’t think the Canadian government would be dumb enough to give up any more of our market,” he said.

Fremlin said the U.S. dairy industry has been in trouble for a decade and the only way it can fix the market is raise prices 25 per cent and lower volume by 10 per cent.

“That will probably put them into a profit margin,” he said.

In the meantime, the American dairy industry is blaming millennials for less diary consumption as well as an increase in beverage choices ranging from bottled water to juices or organic products.

In 2018, Dairy Farmers of America reported a 7.5 per cent decrease in sales and the organization blamed lower milk prices for the loss.


Increase in milk prices offer a glimpse of hope for dairy farmers

Farmers haven’t had a lot to be optimistic about. Wet weather and a poor harvest have made life more than difficult for those who provide for society to make ends meet. For dairy farmers, however, a small glimpse of hope is showing itself in the form of milk prices.

Cows feeding at Miltrim Farms in Athens, Wis. 11/15/19 (WSAW photo)

“November itself, it just hit $20 per hundredweight of milk. That’s for every hundred pounds, you get $20,” said David Trimner, general manager of Miltrim Farms in Athens, who milks over 2,000 cows daily. “It’s great to see, but we’d love to see a good year.”

According to Trimner, that’s the highest price for milk in the last five years.

“A lot of people, they’ve got unpaid feed bills; they’ve got seed bills that they needed to pay from this last spring; this next spring is coming up and you have to prepay to get discounts,” said Trimner. “This will hopefully give us some hope and help us start to get on track.”

This news comes while new legislation is up for vote in the state Senate, Bill 505, which would provide tuition assistance grants for educational programs aimed at helping prevent farm suicides.

“The fact that the price of milk is going up is good. It probably adds some relief and maybe takes some of that anxiety and depression away,” said Dr. Casper Bendixsen, a center director at Marshfield Clinic’s National Farm Medicine Center. “The fact of the matter is, if there’s other reasons for anxiety and depression, the changes in milk prices don’t change that.”

Trimner agrees, saying that while it’s a relief for many farmers to be able to earn a profit on their milk, the future is still up in the air.

“We’re expecting to not see such a high price going forward but still see reasonable prices,” said Trimner. “Maybe $18, which again, is kind of a price point I feel that people can still start to recover a little bit. There are a lot of variables into that, particularly farm to farm, but right now feed costs are a little bit lower, and hopefully they stay there. I say once we get below $16, you really start to eye things up, see where we’re spending our money and how can we improve that so $16 is really that kind of break even.”

Trimner added that people at home are able to help farmers with the food that they eat.

“Buying a lot of cheese. For every 10 pounds of milk you make one pound of cheese,” said Trimner. “Cheese is a big deal, so eat lots of pizza, lots of things with cheese ingredients; eat your ice cream, that’s always delicious. Those are some big things to really support the dairy farmers.”


Last year was the worst for Wisconsin dairy farms since 2004, new data shows

Wisconsin is known as America’s Dairyland but those family farmers who gave the state its slogan are vanishing.

The state lost 638 dairy farms last year according to Wisconsin’s Department of Agriculture, Trade and Consumer Protection (DATCP). Democrats often put part of the blame on trade wars and President Donald Trump’s policies.

Senator Tammy Baldwin (D-WI) and other Democrats unveiled a new report this week highlighting the fact that Wisconsin lost more than 1,800 dairy farms since Trump took office.

“Wisconsin is America’s dairyland and we’ve seen horrible things happening because of the trade war with China,” Baldwin told 27 News.

While her facts match up, 27 News found Wisconsin has been steadily losing dairy farms over the last 15 years.

Data from DATCP shows in 2004 Wisconsin had 15,904 farms. As of October 2019, more than half of those are gone — only 7,476 remain.

Over the last 15 years, under three presidential administrations, the decline continues. The percentage of dairy farms lost is around 3 percent each year. From 2011-2013, the percentage went up a bit to around 5 percent, then back to 3 percent. The largest jump was in 2017, a 7.2 percent loss.

“We have reason to be concerned and frankly frustrated,” said Baldwin.

Multiple factors play a role in the downturn of the dairy industry: declining milk prices, wet weather, herd sizes getting smaller and trade disputes.

Congressman Bryan Steil (R-WI) and other Republicans in Congress believe new trade deals will help reverse the trend. They are urging Speaker Nancy Pelosi to pass the United-States-Mexico-Canada Agreement to increase access to markets.

“Our farmers are struggling to cope with low milk prices and limited opportunities to sell their products,” Steil told 27 News.

“Farmers share with me their support of the United States-Mexico-Canada Trade Agreement (USMCA) to provide increased access to our trading partners’ markets. We’re proud to be home to the best dairy products in the world. I will continue fighting for Wisconsin farmers and urging Speaker Pelosi to get USMCA across the finish line.”

A new trade deal is in sight according to sources on Capitol Hill. Pelosi said Thursday Democrats plan to hold a caucus meeting to discuss trade negotiations.


Australia approves China-government backed buyout of dairy firm Bellamy’s

Australia cleared a dairy producer part-owned by the Chinese government to buy local infant formula maker Bellamy’s Australia Ltd <BAL.AX> for A$1.43 billion (£766.08 million), but imposed several conditions amid a potential backlash.

The government said on Friday the Foreign Investment Review Board (FIRB) had unanimously decided that the sale of Bellamy’s to Hong Kong-listed China Mengniu Dairy Co <2319.HK> was not against Australia’s interests. Mengniu is 24% owned by Chinese government entity COFCO Dairy Investments.

However, FIRB’s approval was conditional on the much smaller Bellamy’s keeping both its headquarters and most of its board local, along with guaranteed investment in domestic facilities.

The decision shows the Australian government welcoming Chinese money into a politically sensitive industry at a time when relations between the countries have been strained by accusations of political interference by Beijing.

Australia has been under additional pressure due to a U.S.-China trade war because it has strong ties to both countries.

“This approval will ensure Bellamy’s can continue to support jobs in Australia and strengthen its ability to expand its domestic market as well as its export opportunities, particularly into the growing Asian market” said a statement from Treasurer Josh Frydenberg’s office.

“The decision will also provide opportunities for the suppliers that contribute to Bellamy’s products, including Australian dairy farmers.”

Shares of Bellamy’s had halved in the year and a half before it announced the Mengniu buyout in September due to delays getting approval to ship product to the Chinese mainland, its biggest market. That prompted some to question whether the Chinese government had intentionally pressured the company to make it a cheaper takeover prospect.

Bellamy’s deputy chairman John Murphy was quoted in The Australian newspaper saying there was was “no conspiracy” surrounding the takeover. A representative of Mengniu in Australia was not immediately available for comment.

Bellamy’s, which is number four by market share in the Australian infant milk formula market, acknowledged the approval and said it continued to recommend that shareholders vote in favour of the deal at a meeting next month.

The company’s share rose 2% by midsession on Friday to A$13.20, their highest level since July and just below the total Mengniu offer price of A$13.25.


The conditions imposed by FIRB include that Bellamy’s headquarters remain in Australia for at least 10 years, that the majority of its board be Australian citizens living the country and that at least A$12 million is invested in local processing facilities.

Opposition Labor Party treasury spokesman Jim Chalmers said the government needed to explain “how and why this decision is in the national interest.”

“We are not privy to FIRB advice and haven’t been briefed on the decision,” he said in an emailed statement. “We need to know more about the undertakings that have been given and that they’ll be followed through.”

Australia has blocked a number of Chinese investments in recent years, including an attempt by Hong Kong-based infrastructure investor CK Group to buy energy pipeline operator APA Group <APA.AX>. It also banned China’s Huawei from supplying equipment for a 5G mobile network in the country.

Frydenberg said the government would continue to welcome foreign investment “where it is consistent with our national interest.”

“Without foreign capital and investment, Australia’s output, employment and standard of living would be lower.”


Dairy pride is making a big comeback in New Zealand

DWN’s new president Karen Forlong.

Pride is returning to the dairy industry, says the new chair of Dairy Women’s Network, Karen Forlong, a Central Plateau farmer.

“We are starting to stand shoulder to shoulder and be a voice,” she told Dairy News.

“On a personal basis in my time in this role as chair I would like to see that pride grows to a place where dairy farmers are not afraid to say ‘I am a food producer. I feed the world and I am proud of it’.

“Adversity sometimes makes people come together and speak with a collective voice.

“I would like to see the agricultural sector do that because we are all food producers.  The world needs us, New Zealand needs us.”i

Sometimes it is hard to tell our story because of the humble nature of New Zealanders, she says. That was evidenced in the way the All Blacks after their loss to England came out the next week to play with heart and passion, and to salute the crowd, in contrast to the behaviour of some other teams.

“New Zealanders are intrinsically wired to be quite humble but we need to step over that and realise we do have something worth celebrating in this country. It is worth being proud of every aspect of it and that includes the agri sector.

“All of New Zealand should be proud of the agri sector. We are one of the cleanest food producing countries in the world.”

Challenges around water and greenhouse gases need to be faced “but we can get there,” she says. “We can only get there by working together and taking time, not throwing one generation under the bus.”

Former chair Cathy Brown, living the empowerment values of DWN, stepped down from the role to allow Forlong the same opportunity to grow. Forlong says she has “some very big shoes to step into” but sees the role as similar to an orchestra conductor.

“I don’t really play an instrument. There are many components of DWN and my role is bringing all the great aspects of it together.”

The industry is in a state of great change and there is a lot of noise out there, she says.

A key DWN focus is acting as a supporter and enabler through this change. Delivering knowledge, sorting the noise and facts from each other and trying to soften the noise a little to members are important. 

“We put a strong value on face to face connection where possible.  We have this wonderful group of regional leaders who work voluntarily and tirelessly alongside busy day jobs to bring events together at regional level for members and others to come together face to face. Regardless of the purpose there is nothing quite like being in the same room as other human beings.”

Nimbleness is a DWN strength particularly when there is a real need. The network has responded to issues in the past 12 months — like M. bovis, new labour and housing regulations — with workshops quickly put together for members.

“We got rid of the noise and put the facts to them in a face-to-face situation where they could share their successes and their challenges.”

Aside from expert facilitators they “had that wonderful thing called ‘gold’ in the room, with people on the ground who are actually living the real deal”. 

“We can have all the great ideas written on paper but implementation is key.” Workshops aim to provide proven solutions that can be implemented immediately. 

Forlong says one of her key strengths is she is an inclusive person.

“A priority at times like this is to be inclusive, to allow people a place to land in a safe and trusted place where they can ask the questions, share their challenges. We as a network are there to stand tall with them and walk through this whatever that might be. 

“We are getting better and better at that, we are playing very strongly in the people space, delivering in that aspect, and also supporting the Dairying Tomorrow strategy.”

A key strength of DWN is that it is “pick and mix,” she says. Members can be involved as much or as little as time or inclination allows and in whichever aspect suits. That may include the annual conference, workshops, more structured involvement like business groups and social aspects to get off farm.

True Jersey farmer

Karen Forlong has farmed with her husband Maurice on just over 200ha near Atiamuri in the Central Plateau for 25 years.

They milk 400 Jerseys which is not quite the norm on the Central Plateau where Friesian cross-breds predominate.

Prior to farm ownership, the Forlongs were sharemilking around Waikato, including a contract milking job for Tatua supply which included a Jersey herd.

They were offered the opportunity to buy the herd and go 50/50 share milking as a first step towards farm ownership and they have stuck with Jersey since.

Forlong says she could “talk the merits of Jersey until the cows come home”.

They produce about 100-105% of their liveweight in milk solids, they are very efficient and their lighter frame of 400-420kg does a great job of protecting the steeper contour of the property. 

Forlong has been a member of DWN since 2000 when the first regional group for the Rotorua area was formed.

She has experienced various roles that included being a volunteer regional leader.


A Milk Giant Goes Broke as Americans Reject Old Staples

Dean Foods filed for bankruptcy protection on Tuesday. It’s not the first food giant to be caught off guard by a shift in tastes.

When Samuel E. Dean Sr. founded his milk company at a processing facility in Illinois, milkmen still delivered pints to homes all over the United States and children dutifully drank three glasses a day.

That was 1925. Nearly a century later, milk is quickly going out of fashion and Dean Foods — which is now the largest milk company in the United States — has found itself unable to compete as plant-based and lactose-free dairy alternatives rise in popularity.

Saddled with debt and struggling to adjust to changing consumer habits, Dean Foods filed for bankruptcy protection on Tuesday, signaling another grim chapter in the recent struggles of the dairy industry. The company, whose portfolio of brands includes TruMoo and Lehigh Valley, said it was in talks to sell itself to Dairy Farmers of America, a marketing cooperative that sells milk from thousands of farms.

Across the food and beverage industry, the challenges facing Dean Foods are becoming increasingly familiar. In recent years, consumers have moved away from brands, and even entire categories of food, once seen as household staples. The decline of the milk industry has emerged as a particularly stark example of how these changing tastes are challenging major companies whose products once crowded store shelves.

“Long ago, the public figured out that diets do just fine without milk and no, we don’t have to drink three glasses a day,” said Marion Nestle, a food studies professor at New York University. “Maybe plant-based milks are the coup de grâce, but this industry just can’t seem to keep up with changing tastes.”

Dean Foods is not the only major brand struggling to keep pace as consumer habits shift. Outside the dairy industry, Kraft Heinz has also stumbled.

In 2015, the merger between Kraft and Heinz, owners of some of the best-known brands in packaged foods, created a giant with $28 billion in annual revenue and dozens of products that Americans have eaten for generations.

But as demand for unprocessed and organic alternatives rose, the company’s sales and profits plummeted. Kraft Heinz also made steep budget cuts at a time when research and development should have increased, analysts say, with start-ups competing for shelf space.

Like Kraft Heinz, Dean Foods has watched from the sidelines as smaller rivals dominated the growing market for trendy alternatives, like almond milk and plant-based dairy products. In fact, in 2012, the company started spinning off its units that made such alternatives — a move that in retrospect looks like a strategic error.

Those brands, Silk and Horizon Organic, are now owned by Danone, the French food company.

Dean Foods and Kraft Heinz “both carry a lot of debt,” said Matt Gould, a dairy industry analyst. “And that constrains your ability to try radically different things.”

The two struggling companies have also faced competition from private-label brands developed by retail chains like Walmart and Kroger. Once one of Dean Foods’ most important customers, Walmart opened its own milk-processing plant in 2018.

Dean Foods and Kraft Heinz are not the only food companies facing competition from private-label products, which are often available at steep discounts. In August, Target announced plans for its own line of grocery products, which it expects will include more than 2,000 items and become a multibillion-dollar brand by the end of next year.

“Consumers over all in packaged food are becoming more and more receptive to private-label products,” said Simon Gunzburg, an analyst at the research firm Euromonitor. “They’re seeing them as great value.”

Before its bankruptcy filing, Dean Foods had reported losses for five straight quarters and closed some of its plants, laying off hundreds of workers. The company’s senior leadership has been in a state of flux, with three chief executives in three years. (The Dean family no longer holds a large stake in the company, which was sold in 2001 to a rival, Suiza Foods, which took on its name.)

And across the country, milk consumption is steadily declining. Americans drank 37 percent less milk in 2017 than they did in 1970, according to the Agriculture Department.

This year, the Dairy Farmers of America reported that its milk sales had dropped to $13.6 billion in 2018, from $14.7 billion in 2017. One reason for the decline is a decrease in cereal consumption: More and more Americans are switching to power bars and other breakfast options that can be consumed on the go.

The growing enthusiasm for another dairy product — yogurt — has also hurt Dean Foods by chipping away at demand for cereal. And in recent years, milk alternatives made from almonds, soy, cashews and coconuts have exploded in popularity. Many people consider them more nutritious than cow’s milk, or buy them because they have a milk allergy or lactose intolerance. Others choose them for environmental reasons, or because they want a vegan diet.

In 2016, Starbucks, the world’s largest coffee chain, started offering almond milk to lighten its espresso drinks, responding to consumer demand. And last year, sales of nut and plant milks grew by 9 percent, according to the Plant Based Foods Association, a trade group.

“When I was young, my mother would’ve told me, ‘Here’s milk — drink it,’” said Mark Stephenson, director of dairy policy analysis at the University of Wisconsin in Madison. “We’re doing different things now.”


Rabobank Protein Outlook 2020: Seeking Opportunities in an Uncertain World

RaboResearch Food & Agribusiness published its annual global animal protein outlook. In general, African swine fever (ASF) overwhelms the outlook for 2020 – as it has done during 2019 – and will pull down overall growth, as well as bring uncertainty to all markets.

In short, in 2020, the global animal protein sector faces an uncertain world, which also offers opportunities for some.

Justin Sherrard, Global Strategist Animal Protein at RaboResearch Food & Agribusiness, summarizes what 2020 will bring: “Besides the impact of ASF, many trade disputes and issues are causing uncertainty for global animal protein, with the US-China trade war the most apparent – but not the only – trade uncertainty. In addition, the ongoing rise of alternative proteins also adds to the uncertainty – even though Rabobank has a less bullish view of alternatives than others do.”

The report also covers sustainability developments, which are slightly less prominent than the above issues. However, says Sherrard: “In our view, sustainability is just as important as other areas of uncertainty, as it will shape the growth of animal protein production and consumption through the 2020s.”


Despite the uncertainties, there are also opportunities. “The most obvious area of opportunity in global animal protein is the recovery from ASF, which, in Rabobank’s view, will extend through the 2020s. Winning on sustainability is another opportunity, which can be achieved by harnessing the supply chain and moving ahead of market signals. Finally, investing to secure ongoing trade flows can also be an opportunity, as this can reduce some of the uncertainty and secure continuous market access”, concludes Sherrard.

Production Outlook

Rabobank expects growth in most regions in 2020, but the impact of ASF in Asia overwhelms the outlook. In particular, China’s production losses will exceed the growth in all other regions combined. Across species, aquaculture and poultry will lead production growth in 2020, while beef will be stable, and wild-catch seafood will decline again. All of these changes are minor compared with the production decline in pork.


With regard to seafood, RaboResearch expects a modest growth of salmon supply, with Norway expected to be the main, albeit modest, supply driver in 2020. The shrimp industry is also set for growth, despite low prices, with Ecuador, followed by Vietnam and Indonesia, leading production gains. The fishmeal market sees both lower supply and lower demand in 2020. ASF has impacted the demand for fishmeal in piglet feed in China, countering the effect of lower supply in 2019. Rabobank expects a similar pattern for 2020.

Regional outlooks

North America: Rabobank expects production for all species to rise in 2020 – led by pork, followed by poultry, and finally beef. While domestic consumption will grow, exports will need to pick up to manage this production growth.

Brazil: Production growth is expected for all species in 2020. Export opportunities are the main driver, although domestic demand is also improving.

Europe: Poultry and pork production are set to rise, driven by export opportunities. Beef production is expected to decline, in response to soft consumption.

China: ASF dominates the outlook, with a further decline in pork production in 2020. Production will grow for all other species, given the pork shortage and prices at high levels.

South-East Asia: ASF is already affecting pork production and is expected to spread further in 2020, impacting production. Poultry production will again rise strongly in 2020, partly in response to ASF. Beef production remains flat, but imports are on the rise.

Australia & New Zealand: Tight livestock inventories in Australia will see beef production down and sheepmeat production stable in 2020, with firm prices for both. Rabobank expects New Zealand’s beef and sheepmeat production to rise, with favorable price levels.

Source: The Dairy Site

New Zealand milk production in line with 2018-19

Fonterra’s domestic milk collection is up 0.8% in the year to date according to its latest Global Dairy Update.

Fonterra’s New Zealand collection for September was 179.1 million kgMS, down 0.1% on the same month last season. Season to date collection was 309.4m kgMS, up 0.8% on last season. 

New Zealand milk production was down 0.7% on a litre basis but was up 0.7% on a milk solids basis in September compared to the same period last year. The variance between milk solids and liquid milk indicates improved pasture quality from last September, the update says. 

“Despite several cold snaps in parts of the South Island, average temperatures were recorded across much of the country and on-farm pasture conditions remain good,” the update says.

Fonterra’s North Island milk collection in September was up 1.1% on last September and the season to date is up 1.7% on last season. Favourable conditions are expected to continue for the North Island.i

The cooperative’s South Island milk collection in September was down 2.1% on last September and in the season to date collection was 98.5m kgMS, down 1.1% on last season. 


Why we should be drinking full fat milk

When I was a child almost everyone drank full-fat fat milk. Then, in the 1970s, we were warned saturated fats found in dairy would block our arteries and make us fat.

Concerned about our health, many made the switch to foul-tasting skimmed milk, or gave up cow’s milk altogether. Me included.

As a result, Britons are drinking a third less milk than they were 30 years ago, and consumption rates continue to fall. A recent survey found a third of people under 35 are now considering cutting back on dairy, citing health or moral reasons. Instead, they opt for plant-based alternatives such as soya, almond or coconut ‘milk’.

My 18-year-old daughter Kate is one of them. Cow’s milk makes her uncomfortable and bloated, so in a bid to reduce her symptoms, she made the switch to almond milk.

Kate’s problem is surprisingly common. About 60 per cent of the global population lack the enzyme lactase that helps us digest the sugars in cow’s milk, called lactose. For these people, guzzling milk can lead to unpleasant symptoms such as stomach irritation, gas and bloating. However, the vast majority have minor symptoms and even those with severe lactose intolerance can usually tolerate a tiny splash in their tea.

But for some people, even the odd builder’s tea can cause crippling stomach cramps, not to mention embarrassing wind. So I understand why the alternative milk market is booming. But I also have concerns.

If you are thinking of switching away from dairy, for health reasons, then there are a few things to know, because unless you really understand what it is you are doing, switching from dairy could actually be bad for your bones, heart and brain. And, rather ironically, opting for skinny versions could even make you fatter. After weighing up the evidence, I’ve recently switched to the full-fat variety again – and after reading this you may want to do the same.

Almond milk won’t protect your brain

Cow’s milk contains lots of essential nutrients that nut or oat milks don’t; high levels of protein and Vitamin B12, for instance.

Everyone knows dairy is an excellent, natural source of calcium, essential for healthy bones, but not many are aware of another, equally important nutrient, called iodine. One small glass of cow’s milk (full-fat, semi-skimmed or skimmed) contains almost 70 per cent of our recommended daily intake of iodine – essential for brain development in babies and regulating mood and metabolism in adults.

Studies have shown ‘milk’ derived from plants contains just two per cent of the amount found in cow’s milk. You can also get your iodine ‘fix’ from eating seaweed and it’s abundant in shellfish and other white fish. But cow’s milk remains by far the main source of iodine in the average British diet.

Given the fact that we are one of the most iodine-deficient countries in the world, many of us need every scrap we can get.

Sadly, young women tend to have the lowest levels – and this is the same demographic most likely to shun animal foods in favour of plant-based alternatives. A 2011 study of British teenage girls found nearly 70 per cent had iodine levels well below the acceptable minimum. Iodine is needed to make thyroxine, a hormone released by the thyroid gland that controls how effective your body is at converting food into energy, also known as metabolic rate.

Persistently low levels of iodine lead to depletion of this hormone and the slowing down of vital bodily functions, including burning energy. It is what is known as a ‘hypothyroid’ state, which leads to weight gain and mood swings. More worryingly, iodine deficiency in a pregnant woman can impact the brain of her foetus – a 20-year study of 14,000 pregnant and post-pregnant women discovered that if an expectant mother was mild to moderately iodine-deficient, this had a significant effect on her child’s reading ability and IQ scores.

Another study, looking at almost 50,000 babies, found both maternal and new-born iodine intake to have a significant impact on the child’s neuro-development at three years of age. Low levels of the mineral were associated with delayed language development, behavioural problems and reduced motor skills in children. This happens because a lack of thyroid hormones dramatically halts the brain development of the foetus.

The extra fat can curb your hunger pangs

I switched from full-fat milk to skimmed in the 1980s, amid fears that saturated fat could impact my heart health and my waistline. The trouble was, I found skimmed milk (which is about 0.3 per cent fat) so watery I couldn’t stomach it, so chose semi-skimmed (1.6 per cent fat) instead. This green-top milk remained my go-to for many years until last year. I returned to blue-top after reading a number of recent studies which showed the sorts of saturated fat you find in milk and dairy seems to be protective rather than harmful.

One of the reasons we’ve been told to go for low-fat options, like skimmed milk, is because consuming saturated fats raises level in the blood of LDL, often thought of as ‘bad cholesterol’. High levels of LDL are associated with a greater chance of heart disease.

It was also assumed that because skimmed milk has less than two-thirds of the amount of calories, per glass, of full-fat milk, it would be less fattening.

But we now know it is more complicated than that.

The saturated fat in milk does indeed boost LDL but it also boosts levels of ‘good cholesterol’ known as HDL, and this appears to balance out the damage done by higher LDL.

HDL picks up excess cholesterol in the blood and takes it back to your liver, where it’s broken down and removed from the body.

To many people’s great surprise (including me), there have been a large number of recent studies demonstrating that full-fat milk drinkers not only tend to be slimmer than those on lower-fat varieties, but also have a lower risk of metabolic syndrome – or raised blood pressure, elevated blood sugars and raised levels of fats in the blood that can increase your risk of heart disease.

A recent study of 1,600 healthy middle-aged Swedish men found those who ate butter and drank full-fat milk were half as likely, over the 11-year study period, to become obese than those who went for skimmed milk and low-fat spreads.

And a study of 18,438 American women found those eating the highest amount of full-fat dairy were the least likely to gain a lot of weight over 11 years.

The likely explanation, according to studies, is that consuming high-fat dairy products keeps you fuller for longer, reducing the lure of sugary snacks.

So why not just go one step up to semi-skimmed? Well, you certainly could but it has lower levels of some essential fatty acids, like omega-3, which is linked to slowing cognitive decline and reducing anxiety and depression.

Full-fat milk may have three times the fat content but it also contains 90 times the amount of omega-3 fats as found in skimmed milk, and about twice as much as semi-skimmed, not to mention that the fat-removal process rids the finished product of a host of vitamins, such as Vitamin A and Vitamin D. Some of these vitamins are added back in afterwards, but by no means all.

I like the flavour of full-fat milk and those extra few grams of fat curb my hunger pangs.

I believe my brain, bones, heart – and taste buds – will thank me for it.


November’s Dairy Data Dashboard

Every month, USDEC aggregates domestic and global dairy data to create 10 charts displayed in a one-page, printable dashboard. 

The November Dairy Data Dashboard is now available.

 dashboard (November)

Dairy Farmers of America Wants to Buy Dean Foods But Others May Too

Dairy Farmers of America Inc, the biggest U.S. dairy cooperative, is in advanced talks to acquire U.S. milk processor Dean Foods Co. But other would-be buyers could emerge.

While discussions are taking place between DFA and Dean, no agreement has been reached for the purchase of all or some of the Dallas-based company’s assets, Monica Massey, executive vice president and chief of staff at DFA, said in an emailed response to questions. She didn’t speculate on prospective bidders.

A deal could be a lengthy process, including an antitrust review. Any transaction would require an “extensive review of Dean Foods’ assets, thorough due diligence and other conditions, including approval from the Department of Justice and the Bankruptcy Court,” Massey said. Dean intends to file bidding procedures with the court to conduct a sale.

“We have been monitoring Dean Foods’ financial performance closely since the business began showing signs of distress and have been preparing for various scenarios, including a bankruptcy filing, in order to minimize the impact to DFA,” Massey said. “Our farmer leaders and management have built our cooperative to withstand a situation like this. Our members and employees will get paid, schools will get milk, and dairy products will remain on the shelves across the country.”

Dean Foods is the biggest customer of the Kansas City-based cooperative, which has around 14,500 family farmer members around the country. DFA is focused on “ensuring we have secure markets for our members’ milk,” she said.

While Americans may be drinking less conventional milk, 94% of U.S. households also keep it in their refrigerators, Massey said. The dairy category as a whole remains strong, with cheese and butter at all-time consumption highs. Americans ate 2.5% more dairy in August than they did the year before, and the retail market is worth over $100 billion, she said.


Dean Foods Bankruptcy Is “Not Reflective Of U.S. Dairy Industry”

Dean Foods, America’s largest milk producer, Tuesday filed for Chapter 11 bankruptcy.

A prominent figure believes the U.S. dairy industry should be optimistic, despite this shortcoming.

Former United States Agriculture Secretary Tom Vilsack now serves as president and chief executive officer of the U.S. Dairy Export Council (USDEC). Vilsack, presenting at the 76th annual National Association of Farm Broadcasting Convention, says industry officials are starting to see a rebound for dairy farmers.

“There is good news in the dairy industry. Ninety-four percent of households in the U.S have fluid milk in their refrigerators. Butter consumption is at a 50 year-high; cheese is at a record high, domestically. We’ve seen an increase in exports both in volume and value. Value is up almost a billion dollars more than it was a couple years ago,” Vilsack said.

Vilsack makes note of Dean Foods decision to file for Chapter 11 bankruptcy. He calls the situation an “unfortunate circumstance,” but does not believe it is reflective of the industry.

“We’re selling the most nutritious product around. As they say, ‘Nature’s most perfect food,’” Vilsack said. “We have an interesting environmental story to tell; dairy farmers are the only farmers that reduce greenhouse gas emissions. We have an animal welfare program that’s internationally certified. A lot of good news in the dairy business.”

Vilsack says all of this good news stems from recent advancements within the industry.

“This is an industry that has embraced innovation,” Vilsack said. “You’re beginning to see a lot of different products. We just shocked the world, if you will, at the World Cheese Awards. A cheese from Oregon was voted ‘Best Cheese in the World.’ Rogue Creamery, with their bleu cheese, won 131 medals, the highest ever. I think the world is beginning to realize that U.S. dairy and U.S. cheeses are quality.”

Vilsack adds, “The long-term future looks good for the U.S. dairy industry,” which sets its sights on opportunities for increased exports to Japan, Southeast Asia, Mexico and Canada.


Why P.E.I. dairy farmers are worried about how they’ll feed their cows this winter

One fifth-generation dairy farmer in Marshfield, P.E.I., says this was the toughest growing season he has seen in 42 years of farming.

The farm has nutritionists that take samples of feed to be analyzed, then advise on what supplements he needs to add for extra energy. (Randy McAndrew/CBC)

Some dairy farmers on P.E.I. are worried about how they will feed their cows this winter after a poor growing season and damage from post-tropical storm Dorian. 

Gordon MacBeath, a fifth-generation dairy farmer in Marshfield, P.E.I., said this was the toughest growing season he has seen in 42 years of farming. 

“It’s been a challenge since early spring, there was a lot of winterkill on our grasses and then it was cold, wet and the forages got off to a poor start,” said MacBeath, who milks 100 cows at Goldenflo Holsteins, along with his son.

“Then of course we were hit with a hurricane and then followed by some early frost so, yeah, it’s it’s been a tough year.”

MacBeath has giant piles of corn silage that he was able to harvest, but said the issue now is quality.

MacBeath says the grain content in the farm’s corn silage was around 55 per cent last year. This year it’s 35 per cent. (Randy McAndrew/CBC)

“The hurricane compromised the plants and so it didn’t finish maturing,” MacBeath said.

“Corn is an energy source and the energy is in the kernel and if that doesn’t mature properly, their energy content will be down, the digestibility will be down and that’ll impact the intake of the cow.”

Lost energy

The farm has nutritionists that take samples of feed to be analyzed, then advise MacBeath on what supplements he needs to add for extra energy.

MacBeath said the expense of adding those supplements this year will be “significant.”

“Last year, our grain content in our corn silage was around 55 per cent. This year it’s 35 per cent,” MacBeath said.

“We have to replace that with another energy source, either locally which will be tough because the grain growers, their crop was compromised as well so likely, in the end, we’ll be importing from off-Island.”

MacBeath said the extra expense is necessary to maintain milk production.

“For a healthy comfortable cow to produce large volumes of milk then she’s got to have good quality feed going in,” MacBeath said.

“If your crops are compromised and their digestibility goes down, that feed will just sit in the cow stomach for longer periods of time, rather than digest and pass through and generate milk.”

MacBeath says the energy is in the kernel and if that doesn’t mature properly, energy content will be down. (Randy Drenth/Twitter)

Request for financial assistance

The P.E.I. Federation of Agriculture has submitted a request for the provincial government to enact the federal-provincial program that helps farmers recover from natural disasters.

MacBeath says this was the toughest growing season he has seen in 42 years of farming. (Randy McAndrew/CBC)

The request includes corn and livestock producers as well as apple growers on P.E.I.

The AgriRecovery Framework provides financial assistance to producers for extraordinary costs related to harvesting after a natural disaster.

Potato producers on P.E.I. received $15.6 million from the AgriRecovery Framework after 2,800 hectares of potatoes were left in the ground in the fall of 2018 when rain and cold weather made it impossible to harvest them.

Harold MacNevin, the chairman of the Dairy Farmers of P.E.I., says the wet, low corn on the ground is also going to cause concerns about moulds and toxins in the corn after it’s harvested and stored. (Randy Drenth)

Harold MacNevin, the chairman of the Dairy Farmers of P.E.I., supports this year’s application.

“Producers are going to be struggling to have enough feed for the winter,” MacNevin said. 

“I’ve heard farms that generally have surplus feed that sell that surplus feed do not have the surplus this year to sell. They’re struggling to have enough for themselves.”

MacNevin says producers have been struggling to harvest the corn. (John Robertson/CBC)

MacNevin said some producers may end up selling some of their livestock if they don’t have enough feed.

“You don’t have the feed, you can’t get the feed, you can’t get the feed for a price that’s manageable and justified then yeah, selling livestock will be the option that they’ll have to choose.”

Wait for next year

MacBeath described the feed situation, for him, as a setback but not insurmountable.

“We’ve always had a good relationship with our nutritionist and our veterinarians,” MacBeath said. 

“But I think I’m going to have a more intimate relationship with my banker this year.” 

MacNevin says some producers may end up selling some of their livestock if they don’t have enough feed. (Randy McAndrew/CBC)

MacBeath said it will be a long winter for some dairy producers.

“We can’t harvest another corn crop until next October,” MacBeath said. 

“So we’ll spend the next year dealing with the challenges of this past growing season and then we’ll hope that we have a winter that our forages will come through and we can start off on a fresh foot next spring.”


US dairy on high alert over NZ threat in CPTPP trade deal

The US food and agriculture industry says New Zealand is among those “stealing” markets from American exporters as pressure ramps up on the Trump administration to secure a trade deal with Japan.

The US National Milk Producers Federation (NMPF) and nearly 90 other industry signatories have written to the US Trade Representative, saying US interests are increasingly disadvantaged by competing regional and bilateral agreements with Japan, including the new Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) of which New Zealand is a member.

“Japan recently decreased tariffs on agricultural imports from the European Union and CPTPP member countries, which the group (signatories) warned, is stealing markets once enjoyed by American exporters,” said the federation in an industry note.

“Expanded agricultural market access to Japan is vital for America’s struggling rural economy, and that access needs to be on par with what’s already enjoyed by US competitors,” it said of the message delivered to the administration.

“The administration finally took the necessary step of announcing talks late last year, formally starting negotiations last month. NMPF is focused on touting the urgent need for a deal with Japan that helps US dairy exporters maintain and grow their competitiveness in this dairy-hungry market,” it said.

The latest lobbying effort follows the US Dairy Export Council sounding the alarm early this year about New Zealand’s first trade agreement with Japan via the CPTPP.

New Zealand and Australia, which is also a member of the CPTPP, are Japan’s two largest dairy suppliers. Japan is New Zealand’s 5th largest dairy export market with an annual value of about $450 million.

The CPTPP eliminated tariffs on all New Zealand exports to CPTPP economies with the exception of beef to Japan and some dairy products into Japan, Canada and Mexico, where access is improved through partial tariff reductions and duty-free quotas.

US President Trump withdrew from Trans-Pacific Partnership trade talks, the precursor to CPTPP, in 2017.

NMPF said the US exported US$270m (NZ$411m) of dairy goods to Japan last year, making it the fifth largest buyer of US dairy products.

It said the letter to Washington highlighted a US Dairy Export Council study earlier this year which showed America could double its share of the Japanese market over the next 10 years if given “appropriate” market access.

“Without positive action from trade officials, the (council) study forecast that dairy exports to Japan will fall 20 per cent over the next 5 years as Europe, Australia and New Zealand increase their dominance in the market, given the benefits their own trade treaties with Japan provide them.

“A US trade agreement with Japan is needed quickly and it must include market access provisions at least equal to the terms of the CPTPP and the EU-Japan EPA (economic partnership agreement), building on those precedents where possible,” NMPF said the letter spelled out.

The CPTPP, signed by 11 Asia-Pacific countries, which collectively were the destination of 30 per cent of New Zealand exports worth $16.7 billion last year, has been ratified by six of the countries. It came into force in December.

The Government says the agreement has the potential to deliver about NZ$222m of tariff savings a year once fully in force.

The Japan-EU trade agreement took effect earlier this year.

As the Herald reported in February, the economic impact study commissioned by the US Dairy Export Council on the potential fallout for the US from the CPTPP, concluded competitors including New Zealand could seize US$1.3b in sales from the American industry in the next 10 years.

This could climb to US$5.4b once the two trade agreements were fully implemented over 21 years, the study claimed.

The report also claimed New Zealand and Australia had “limited capacity to increase their supply” to Japan, the second biggest importer of cheese in the world after the UK.

As a result Japan had looked to the US and the EU for extra supply, the study said.

It found if the US had the same market access as its competitors, American dairy exporters share of the Japanese market could grow from 13 per cent in 2017 to 24 per cent in 2027.


America’s No. 1 milk company declares bankruptcy amid drop in demand

Dean Foods, America’s biggest milk processor, filed for bankruptcy Tuesday amid a steep, decades-long drop-off in U.S. milk consumption blamed on soda, juices and, more recently, nondairy substitutes.

The Dallas company said it may sell itself to the Dairy Farmers of America, a marketing cooperative owned by thousands of farmers.

“Despite our best efforts to make our business more agile and cost-efficient, we continue to be impacted by a challenging operating environment marked by continuing declines in consumer milk consumption,” CEO Eric Berigause said in a statement.

Since 1975, the amount of milk consumed per capita in America has tumbled more than 40%, a slide attributed to a number of reasons but mostly the rise of so many other choices, including teas, sodas, juices and almond and soy milk.

That has hit dairy farms and milk sellers hard, leading some smaller family farmers to quit the business.

Another blow to Dean Foods came when Walmart opened its own milk processing plant in Indiana last year.

Dean Foods has lost money in eight of its last 10 quarters and posted declining sales in seven of the last eight.

The company said it will continue operating normally while it puts its finances in order under Chapter 11 bankruptcy. It has lined up about $850 million in financing from lenders.

Its stock rose 2.3% in morning trading.


America’s biggest dairy co-op may buy Dean Foods. Milk monopoly?

After Dean announced it had filed for bankruptcy, Dairy Farmers of America said it was in “advanced discussions” on an acquisition. A merger would all but guarantee lower income for struggling farmers.

One of America’s biggest dairy companies, Dean Foods, filed for Chapter 11 bankruptcy on Tuesday, leaving the future uncertain for its milk suppliers, some of whom don’t know whether they can stay in business if their major buyer goes belly up.

It’s no secret that the timing is terrible. Federally established milk prices remain low, dairy exports are down thanks to the trade war, and domestic milk consumption has fallen steadily since 1970. But one of the most pressing issues posed by Dean Foods’s bankruptcy is the possibility that farmers won’t be able to find anywhere else to sell their product.

Companies like Dean Foods buy fluid milk from dairy farms, which they then process and distribute to retailers across the country. Farmers can sell directly to processors, or they can sell to dairy cooperatives, which in turn, negotiate with processors and retailers on members’ behalf. However, rapid consolidation among dairy co-ops limits the number of options for farmers.

In addition to representing more than 13,000 dairy farmers, DFA controls 30 percent of milk production in the U.S.

“We really have not had any significant options to sell our milk in the last 10 years,” says Ernie Jones, who runs a 300-cow dairy farm in Tennessee with his daughter. Jones has sold directly to Dean Foods for the past two decades.

In its announcement, Dean Foods said that it was “engaged in advanced discussions” with Dairy Farmers of America (DFA), the country’s biggest dairy co-op, regarding a possible acquisition. For one antitrust expert, however, that raises concerns about anti-competitive activity.

Though it’s supposed to advocate for dairy farmers, DFA’s involvement in processing also means it has an incentive to keep prices of inputs (read: milk) as low as possible.

“The problem with DFA is the conflict of interest that will result from [trying] to lower prices to farmers in order to increase their revenue as a milk processor,” says Peter C. Carstensen, a professor emeritus at the University of Wisconsin Law School and a former attorney for the antitrust division of the United States Department of Justice (DOJ). 

Carstensen isn’t the only one concerned. Some farmers have accused the co-op of conspiring to suppress milk prices in order to maximize its own profits. And a recent government watchdog report found that competing interests within co-ops can impact farmers’ earnings. 

Though it’s supposed to advocate for dairy farmers, DFA also has an incentive to keep milk prices as low as possible.

In addition to representing more than 13,000 dairy farmers, DFA controls 30 percent of milk production in the U.S. Carstensen warns that a DFA buyout of Dean Foods could give it monopoly-like power over the milk market. “What you’re going to see is increased risk of tacit collusion on the consumer side, raising the price of milk for consumers,” he says.

In 2007, dairy farmers in the southeast U.S. filed a class-action lawsuit against Dean Foods and DFA, claiming that the two had conspired to keep milk prices low. According to the complaint, Dean Foods agreed to make DFA its sole dairy supplier in exchange for a guarantee of low milk prices. The lawsuit was later split, with Dean Foods settling for $140 million in 2011, DFA settling for $168 million in 2013, and neither company admitting to wrongdoing. In 2009, farmers in the northeast filed a separate class action on similar grounds, which Dean Foods settled for $30 million in 2011 and DFA for $50 million in 2014.

Farmers I spoke with for this story had another reason for feeling pessimistic about a DFA buyout: Unlike Dean Foods, cooperatives aren’t required to pay farmers federally set minimum milk prices.

“We could very well be in for quite a bit of a substantial decrease in our price for milk,” Jones says. “And we’re already teeter-tottering on low prices.”

Jones adds that he wouldn’t be able to afford lower milk prices at this point: “I’ve about had all I can stand.”

“It was one of those things we knew could likely happen but were hoping wouldn’t.”

In the 24 hours since Dean Foods filed for bankruptcy, news outlets—including CNN, Fast Company, Associated Press, and Barron’s—have been quick to blame the company’s downfall on decades of decline in American milk consumption and consumer interest in plant-based alternatives. 

But Andrew Novakovic, professor of agricultural economics at Cornell University, says the narrative here is more complicated than that.

“The decline in beverage milk sales is not the same story as the failure of this company,” Novakovic says, listing off the names of countless other milk processors that haven’t filed for bankruptcy. “I don’t think you can lay all the blame for their problems on the fact that they’re heavily invested in a declining sector.” But, he says, “it sure as hell didn’t help them.”

Last year, some farmers caught a preview of what it would mean to sever ties with Dean Foods, after the company terminated 100 dairy contracts in eight states in a purported effort to balance its supply with retail demand. Among current suppliers, Tuesday’s news wasn’t particularly a surprise. Speculation that Dean Foods would file for bankruptcy had been circulating for months.

“It was one of those things we knew could likely happen but were hoping wouldn’t,” says Milton Beard, another Tennessee-based dairy farmer. “There’s not a whole lot we can do about it at this point. We just hope we’re able to get paid.”


The milk, the whole milk and nothing but the milk: the story behind our Australia’s dairy woes

The plight of Australia’s dairy farmers is on the political agenda this week, after One Nation leader Pauline Hanson narrowly failed in her Senate bid for a minimum milk price. But getting fair payment for their goods is far from the only challenge dairy farmers face.

Pressure has been mounting on the industry for the past decade. Existing milk alternatives are growing their market share, helped by a rise in veganism and public concern around animal welfare. The agriculture sector is under pressure to reduce its contribution to climate change, and technology advances mean milk may one day be produced without cows at all.

All this has been compounded by devastating and prolonged drought. So here’s the full story of the hurdles farmers face, now and in the future, to get milk into your fridge.

Dairy cattle at milking time at a farm in Rochester, Victoria.AAP/Tracey Nearmy

Fluctuating farm gate price

The rate at which processors pay farmers for milk is known as the farm gate price. The prices are not regulated and are set by market forces.

In 2016 the milk price crashed when Australia’s two largest dairy processors, Murray Goulburn and Fonterra, lowered the price they would pay from about 48 cents a litre to as low as 40 cents.

This dramatically cut the incomes of milk suppliers. The number of dairy farmers in Australia fell by 600, or 9% over four years. This exit has been exacerbated by drought.

Since then, the farm gate milk price has increased and in 2019–20 is expected to be 51 cents per litre, due to a weaker Australian dollar and demand from export markets. But forecast global prices for butter, cheese and whole milk powder this financial year remain below that of previous years.

Methane, and milk alternatives

Methane and other livestock emissions comprise about 10% of Australia’s greenhouse gas emissions.

As the Intergovernmental Panel on Climate Change made clear in its land use report in August, changes must be made across the food production chain if the world is to keep global warming below the critical 1.5℃ threshold. For beef and dairy livestock, this means changes such as land and manure management, higher-quality feed and genetic improvements. Meeting this challenge cost-effectively, while improving productivity, is no small task.

Technology may help in curbing greenhouse gas emissions from cows, but it also threatens to replace the dairy industry altogether. Advances in biotech may enable liquid analogous to milk to be produced through bioculture systems, without a cow in sight.

Elsewhere, the rise of plant-based alternatives derived from soybeans, almonds, oats and other sources threatens traditional milk products. This can partly be attributed to increasing numbers of people adopting a vegan diet.

Farmers must overcome a host of challenges to deliver milk to consumers.Paul Miller/AAP

Taking calves away from cows

For a mammal to produce milk, it must usually become pregnant and produce offspring. Female calves generally go into a farm’s pool of replacement animals, while male dairy calves are sold.

Pure-breed male dairy calves do not naturally lay down a lot of muscle and so do not generally make good beef livestock. Many are sent to the abattoir for slaughter, typically between 5 and 30 days of age. This practice has prompted welfare concerns and means the industry must carefully manage the handling and transport of vulnerable young calves.

Potential solutions include artificial insemination of cows using only semen that will produce female calves. The use of this technology is limited because it reduces conception rates.

There is also growing public concern about the separation of cows and calves not sent to the abbatoir. The calves are typically taken within the first 12-24 hours and reared together in a shed, where they are fed milk or milk replacer. This is thought to maximise the amount of saleable milk and minimise disease transfer from cow to calf, particularly Johne’s Disease. However, recent research has found little evidence to support these practices.

Research has shown that calf-cow separation in the first day of life causes lower distress than abrupt separation at a few weeks of age or older, when the bond is stronger. This is not to say that early separation is not a concern. Rather, in the face of consumer demands for certain ethical standards, simple fixes may be hard to implement.

Topless animal welfare activists protest in Melbourne in February 2019 to raise awareness of what they claim is cruelty within the dairy industry.Ellen Smith/AAP

The message for consumers

Challenges to the dairy industry will take time and effort to address. Some, such as drought, are out of farmers’ control. Dry conditions and high cost of water, fodder and electricity have forced farmers to cull less productive dairy cows, leading to a decline in production.

The pressures, and associated debt, create intense stress for farmers, increase family tensions, and have negative flow-on effects throughout rural communities.Putting aside the political push for a regulated milk price, the key message for dairy consumers is clear. If we want our milk produced in a certain way, we must pay a fair market-based price to cover the costs to farmers of fulfilling our wants.


Trump’s trade wars are hurting farmers. Can Sonny Perdue keep them happy?

The remark reverberated across the country, prompting calls for his resignation from farm groups, angry editorials and even criticism from his own party. Critics said Perdue’s “go big or get out” line played into existing fears that the Trump administration is more interested in helping large corporations than the little guys. Perdue later said he was only acknowledging the current market reality.

Over the last year, Perdue has emerged as President Trump’s key evangelist in bruising trade wars, traveling the country to give folksy pep talks to frustrated farmers who have seen their incomes drop and exports hit hard by tariff disputes.

As talks between China and the United States on a possible first phase of a trade deal continue, Perdue could have some welcome news for this key constituency that helped elect Trump — a third round of bailout payments on top of the more than $26 billion already being spent.

Two economists at the Agriculture Department, who spoke on the condition of anonymity because they were not authorized to speak publicly, said a third round of payments for farmers increasingly is seen as inevitable, particularly if a trade deal with China is not reached soon. The amount has not been determined.

Perdue said Thursday he was “hopeful” that the pending trade deal would “supplant any type of farm aid needed in 2020.” But a third round of aid could be crucial to shoring up Trump’s support in rural America as the election looms, analysts say.

In more than two years in office, Perdue, a former Georgia governor, has perfected the art of flattering the president — a must for any high-ranking Trump official. He spent more time in a recent podcast with Trump’s former press secretary Sarah Sanders lauding Trump than discussing farmer woes. Trump has said that what he doesn’t know about farming, “Sonny teaches me.”

Mick Mulvaney, Trump’s acting chief of staff, said the White House thinks its support within the farming community is “overwhelmingly solid” in large part because of Perdue’s efforts.

“The president really likes people who know their stuff. And it’s been very clear from very early on that Sonny knows this industry, that Sonny knows the people, Sonny knows the issues, he knows how to communicate the issues,” Mulvaney said in an interview. “So there’s a certain level of expertise that immediately sort of, you know, moved him to the head of the class.”

As the head of the USDA, Perdue has been a disrupter in the Trump mold. He has worked to transform the sprawling $140 billion agency of nearly 100,000 employees by cutting staff, jettisoning research and rolling back directives on forest preservation and food safety.

Perdue has run afoul of Democrats in Congress, child poverty advocates and science groups, who worry about his skepticism of climate change — “I think it’s weather patterns, frankly,” he said recently — and moves they say have weakened the agency’s research wings.

Internally he’s been praised for his relentless promotion of the administration’s agenda. In recent days he’s been out touting China’s alleged commitment to more than double its agriculture purchases from the United States — a trade agreement celebrated by Trump but not yet committed to paper, much less signed.

But patience with Perdue’s sunny bromides is waning in rural America, where farm bankruptcies and loan delinquencies are rising. Before the “big get bigger” misstep, Perdue was booed in August in Minnesota over an ill-timed joke that suggested farmers were whiners.

“He’s supposed to be the head of the Agriculture Department, a true representative of farmers, but it felt like he was pretty out of touch with what was going on here in farm country,” said Darvin Bentlage, 63, a cattle producer in Golden City, Mo. A third trade bailout would help, he said, “but it won’t make us whole and we don’t want to be making our money at the mailbox. We’d rather be making it at the marketplace.”

Farmers worried

When he arrived at an early morning breakfast recently with produce growers just blocks from the White House, Perdue, 72, was all smiles, backslapping greetings and posing for photos. “Y’all know President Trump is trying to stand up [against] some of the practices that China has been engaged in for a number of years,” Perdue told them.

China and the United States have imposed tariffs on billions of dollars worth of goods since Trump imposed the first round of tariffs on China for allegedly unfair trade practices in July 2018, profoundly impacting the global economy.

Some of the farmers who had gathered to see Perdue said they were worried and they can’t hold out forever. Agriculture exports to China fell from nearly $20 billion in 2017 to $9 billion last year, according to the American Farm Bureau Federation, with farm bankruptcies rising 24 percent.

The USDA said in an August report that net farm income is forecast to increase slightly this year, but it’s still down more than 35 percent of its high of $136 billion in 2013.

Bob Mast, president of CMI Orchards, which grows apples, pears and cherries in Washington state, said that because of the trade war, he’s been able to ship only a quarter of the cherries he normally would to China.

“China typically takes the largest amount we grow, and they’re willing to pay premium for it,” Mast said. “We have gotten some relief money from government. That’s helped, but we need a resolution to it by cherry season next year.”

Experts say that many large farm operations — whom critics say benefited more from the first round of trade aid than mom-and-pop operations — may be able to hold out longer by tapping into their equity. Others won’t be as fortunate.

As Perdue himself often says, “You can’t pay the bills with patriotism.”

Still, most farmers remain in Trump’s camp. Trump’s job approval rating among rural Americans remains higher than the country as a whole — by 54 to 38 percent — according to a Washington Post-ABC News poll in September.

During his first speech to the USDA staff in April 2017, Perdue made a point of stripping off his suit jacket, tossing away his tie and rolling up his sleeves.

“Y’all need to know I was a farmer first,” he said to applause. “We’re going to get comfortable in working clothes.”

The next day, he rushed to the White House to help convince Trump not to immediately withdraw from the North American Free Trade Agreement, clutching charts and graphs to explain how farmers would be hurt.

“Secretary Perdue sat down with him and explained how important this agreement was to farmers,” said Zippy Duvall, president of the Farm Bureau and a fellow Georgian who has known Perdue for more than a decade. “That had a huge influence on the president.”

Perdue oversees an agency whose work affects almost every part of people’s lives — feeding millions through its food stamp program, advising farmers when and how much to plant, protecting America’s forests, formulating nutrition guidelines for schoolchildren and safeguarding the nation’s food supply.

He declined to be interviewed, but his staff sent a list of accomplishments, including deregulatory moves they said saved $157 million; opening new markets for beef in China, pork in Argentina and rice in Colombia; and a reorganization they say places a greater emphasis on trade and rural development. Farmers have praised his efforts to expand rural broadband and push for simpler rules for guest worker visas.

Critics have said there is a revolving door at Perdue’s USDA in which industry employees move in and out of the department. He has filled his agency’s upper ranks with lobbyists, industry executives and people with whom he has done business (Perdue is worth well over $5 million).

Perdue’s chief of staff until last year, Heidi Green, was a partner in Perdue’s shipping business. His undersecretary for trade worked for agricultural conglomerates. His senior adviser worked as a lobbyist for the pesticide industry association.

Meanwhile, morale at USDA, as measured by a respected survey, has plummeted amid staff shrinkage. Perdue especially angered employees with a plan to uproot workers at the agency’s National Institute of Food and Agriculture and the Economic Research Service and force them to either move to Kansas City or quit their jobs. Many voted to unionize, and at a meeting with Perdue this summer, they stood and turned their backs on him in protest.

Since taking over the USDA, Perdue’s mantra has been “Do right and feed everyone.” At the same time, his agency has tried to cut funding for Supplemental Nutrition Assistance Program, also known as food stamps, which helps feed 9.5 million families with children.

The proposal to limit SNAP beneficiaries has not gone over well with Democrats, who see it as an end run around Congress, which did not make such cuts when it passed the mammoth farm bill late last year.

“I’m not sure what the motivation was, but it’s wrong. Why would you address something we purposefully did not take up in the farm bill?” said Rep. Marcia L. Fudge (D-Ohio), chair of the House Agriculture subcommittee on nutrition, oversight and department operations.

Perdue’s staff said that the proposed changes would “make major strides in reining in dependence on government assistance.”

Chief consoler

As Trump’s reelection campaign looms, Perdue is expected to continue to play his role as Trump’s chief consoler to struggling farmers as well as pushing passage of the new U.S.-Mexico-Canada trade agreement. “They recognize that there’s going to be some short-term difficulties as we try and hammer out these agreements, to get fair trade with China,” Mulvaney said.

Perdue’s close relationship with the president paid off politically last year when Trump surprise-tweeted his endorsement of Brian Kemp, a Perdue ally, in Georgia’s gubernatorial primary. Kemp later won a narrow victory over Democrat Stacey Abrams.

Perdue remains a popular and a powerful force in Georgia politics, said Charles S. Bullock III, a University of Georgia political science professor. Perdue’s cousin, David, was elected to the U.S. Senate in 2014, and Sonny Perdue is likely to have a say as Kemp moves to fill the seat of Sen. Johnny Isakson, who is stepping down.

During his tenure as governor from 2003 to 2011, Perdue was an aggressive free-trade exponent, with the state opening trade offices in China, Brazil and France. Exports grew 77 percent, according to the state’s office of economic development.

Ethics questions followed him throughout his time as governor. He refused to put his agribusiness assets in a blind trust, and he was twice cited by the state’s ethics board — once for failing to report a trip on a private airplane owned by one of his family businesses, and once for $18,000 in excessive campaign donations.

Critics also point to a last-minute retroactive tax break that saved him $100,000 in 2005, as reported then by the Atlanta Journal-Constitution. Perdue and his supporters have said that the ethics criticism was politically motivated and the tax break benefited all Georgians, not just him.

“That he and Donald Trump would be close does not surprise anybody,” said DuBose Porter, a former state legislator and former chairman of the Democratic Party of Georgia. “I think their personalities and their vision of the world is very similar. They don’t think the rules apply to them and they see government as a way to enrich themselves and their friends.”

When he left Georgia for Washington, Perdue, a Baptist who once prayed for rain on the State House steps during a drought, was given a missionary’s send-off at a church where his son is now a pastor, according to an account in the Baptist Press. Perdue had told worshipers a few days before that God spoke to him and his wife and called them “to serve Trump in his Cabinet.”

Given how frequently Trump fires his Cabinet secretaries, it is no small political feat that Perdue has managed to hold on so far, said former agriculture secretary Dan Glickman.

“This is an administration where day-to-day no one knows what’s going to happen, and yet, there’s been no scandals. No talk of Sonny leaving. He seems secure in his job. And the president actually listens to him,” said Glickman, who headed the USDA for six years in the Clinton administration.

“The way he’s presented himself to Trump is as a problem solver on renewable fuel, on the trade war. I know Sonny’s not thrilled about how this impacted farmers. But he’s not been disloyal to Trump when talking about it. It’s a tight rope to walk.”


Wisconsin’s statehouse is at war over its dairy crisis.

In April 2019, Ryan Dunham sold the 50 dairy cows on his farm in Westby, Wis. Dunham, due to the challenging finances he faced from low milk prices.Peter Thomson/AP Photo/La Crosse Tribune

In April 2019, Ryan Dunham sold the 50 dairy cows on his farm in Westby, Wis. Dunham, due to the challenging finances he faced from low milk prices.Peter Thomson/AP Photo/La Crosse Tribune

In Wisconsin, one of the nation’s key battleground states for the 2020 presidential election, dairy is big business. But low milk prices and chronic overproduction are squeezing small- and mid-sized dairy farms, which are shutting down at a rate of more than two per day. Massive dairy operations, meanwhile, continue to proliferate, concentrating manure and causing tension with neighbors over putrid odors and fouled water. This week, these twin crises have inflamed a long-simmering squabble between Democratic Gov. Tony Evers and the GOP-controlled Wisconsin Senate.

 In January, Evers’ appointed Brad Pfaff to lead the state’s department of agriculture, trade, and consumer protection. Pfaff, who grew up on a Wisconsin dairy farm, had previously served as an administrator in President Barack Obama’s Department of Agriculture and deputy chief of staff to US Rep. Ron Kind (D-Wis.).

But in Wisconsin, the governor’s choices for cabinet posts like ag department chief are subject to approval by the full senate. And Evers faces a senate still stinging from the midterms: In 2018, he narrowly defeated GOP stalwart Scott Walker, who had served as governor from 2011 to 2018, and had gained national fame for his attacks on public-sector unions and his hot pursuit of the anti-tax and deregulatory agenda favored by his financial backers, the Koch brothers.

Still under GOP control, the senate has refused to vote on most of Evers’ cabinet picks, leaving them to serve as acting heads of their departments. And on Tuesday, the senate effectively fired Pfaff. It voted Pfaff out along party lines, 19-14—the first time the legislative body has voted to remove a governor’s cabinet pick in at least three decades. For now, Pfaff’s deputy agriculture director, who isn’t subject to approval by the senate, will run the department.

The Republicans’ complaints with Pfaff were two-fold. In July, Pfaff rebuked the senate for refusing to release $100,000 in allocated state funding for mental health services for farmers. Since milk prices started to slide in 2015, America’s Dairyland (Wisconsin’s official nickname) has seen about a quarter of its dairy farms fold. As the attrition grinds on, calls to a mental-health hotline for farmers have spiked, and there’s evidence of an uptick in farmer suicides (though precise data is hard to come by). “There’s no two ways about it: Republicans have chosen to leave farmers behind,” Pfaff said back in July, after Republican lawmakers declined to release the funds. Senate Majority Leader Scott Fitzgerald shot back that Pfaff’s comments were “flippant” and “beneath your position.” The senate ultimately released the funds in September. 

Pfaff had also been pushing through new rules on large dairy farms, forcing them to keep manure pits at least 600 feet from neighbors’ property lines (current regulations require a 350 foot setback). The dairy industry vigorously opposed by the changes, and the senate Republicans declared them “burdensome.” 

The Wisconsin Farmers Union, which represents small- and mid-sized farms, supports manure reform. According to Kara O’Connor, the union’s government relations director, the state’s manure pit regulations have not changed since 2006 and “are desperately in need of an update, because they’re deeply out of touch with the reality that’s unfolding in rural communities.” The number of massive dairies that confine several thousand cows has expanded steadily since the current rules were formulated, and “we have a lot of members who have expressed deep concerns about odor from these operations,” she said. 

The tension between Wisconsin’s governor and his legislature is playing out in the hothouse of national presidential politics. Sen. Fitzgerald, who spearheaded Pfaff’s firing, is now running for Congress. He has denounced impeachment proceedings against President Donald Trump as a “political witch hunt” and a desperate attempt to deny Trump a second term.

And a top Trump official has weighed in on Wisconsin’s dairy crisis. Responding to a reporter’s question about the plight of the state’s farms at the World Dairy Expo in Madison in early October, US Department of Agriculture Secretary Sonny Perdue declared that “in America, the big get bigger and the small go out…I don’t think in America we, for any small business, we have a guaranteed income or guaranteed profitability.”

Days later, Gov. Evers lashed out at Perdue. “He kind of put the pox on small farming in the state,” Evers told reporters, according to the Journal Sentinel. “Are they struggling? Absolutely. But I think at the end of the day we need to get behind them rather than saying, ah maybe you should go larger… I, frankly, resent that the Department of Agriculture secretary from the federal government came in and kind of lambasted them.”

Back in 2016, Trump won Wisconsin by fewer than 23,000 votes. Four years earlier, then-President Barack Obama took the state by more than 200,000 votes. According to New York Times electoral analyst Nate Cohn, Wisconsin is a toss-up for 2020, with former vice president Joe Biden and Sen. Bernie Sanders (D-Vt.) holding slim leads in polls over Trump, and Sen. Elizabeth Warren (D-Mass.) locked in a dead heat with the president. Warren and Sanders  have both called for policies that stabilize prices for farmers, an idea that’s increasingly popular in Wisconsin dairy country. Over the past two years, members of the Wisconsin Farmers Union and the more more industry-aligned Wisconsin Farm Bureau both voted to express tentative support for supply management—an idea embraced by Canadian dairy farmers but widely seen as radical in the United States.   

“Until recently, dairy farmers have been hesitant to support supply management because of this thought that ‘getting government involved’ was going to put them out of business,” O’Connor of the Wisconsin Farmers Union said. “But dairy farmers are walking up to the fact that the economic climate will put them out of business a lot more swiftly and efficiently than any government policy every has.” 


Australian dairy industry needs political intervention

We need our politicians to intervene and fix the market imbalance and lack of profit in our industry.

Politicians across the country now feel it necessary to intervene and yes, interfere with the way the dairy industry is structured, how it is managed and how it is run.

Nobody wants to ask for outside help. Certainly, our farmers would much prefer to fix their own problems and have in the past expected their leaders to do so.

But the time for hoping for the dairy industry to be fixed internally has passed.

In the past few weeks, QDO has submitted three separate submissions to the Australian Government – a review into the Research Development Corporation (RDC) system; the Senate Inquiry into the performance of the dairy industry and its profitability since deregulation, and feedback on the exposure draft of the Mandatory Code of Conduct.

Three major reviews and notices to remedy that tells us that the government no longer has faith in the nation’s dairy industry to fix itself.

The Australian Dairy Key Directions Statement released by the Dairy Plan Committee on November 1 should have unequivocally shown that the dairy industry has got itself together.

The five key priority statements in this document are meant to show us that our industry leaders have taken exactly what they were told in consultation and are addressing the key issues that were blatantly obvious to everyone involved.

I’m yet to be convinced.

An awful lot of money and resources have been poured into getting the Dairy Plan to this point. However, the Key Directions Statements do not tell us anything new.

They certainly don’t give any clue as to how the lead organisations intend to put plans into actions that can turn our industry around.

So, if the Dairy Plan is not our industry’s silver bullet, then we need our politicians to intervene and fix the market imbalance and lack of profit in our industry.


U.S. dairy farmers praise the power of collaboration in Mexico

On a week-long governance mission, DMI board members saw how USDEC facilitates business partnerships in Mexico that benefit farmers back home.

Trade agreements, as critical as they are, do not in themselves create trade.

Trade happens when people connect with people, a reality five Dairy Management Inc. board members, all dairy farmers, witnessed on an October 20-25 governance mission to Mexico, organized by the U.S. Dairy Export Council.

Simply put, one-to-one business connections matter. They always have. They always will.

“That was my biggest takeaway, my aha moment, realizing how valuable the relationships are,” said Marilyn Hershey, a Pennsylvania dairy farmer who chairs the DMI board that oversees USDEC, a nonprofit subsidiary.

“It’s not something that’s accomplished in one year. It’s something that happens over the years through developing relationships and increasing collaboration. That’s when the payoff comes, when you see that collaboration.”

Other DMI board members seeing what nearly 25 years of USDEC work in Mexico has accomplished had the same takeaway.

“Relationships are vital,” said Larry Hancock, a Texas dairy farmer with 4,200 cows who was recently elected USDEC’s new chairman. “The thing I want to really get across to the DMI and USDEC boards after this trip is how important relationships are and how well USDEC facilitates those relationships. It was a really cool and amazing for me to see.”

USDEC sells no products. Its mission is to see U.S. dairy exporting companies do the exporting, benefiting farmers and the entire industry. In 2018,  sales to Mexico reached $1.4 billion, about one-fourth of all U.S. dairy exports around the world.

Because value is dependent on world prices, which go up and down, volume may be a more reliable indicator of year-after-year progress. The chart below shows the results of sustained effort — a 450% increase in 25 years.

Consistent export volume growth means more and more U.S. milk has crossed the border to Mexico through dairy products and ingredients. 

Two-way relationship

Twenty-five years ago, the North American Free Trade Agreement (NAFTA)  opened a door of opportunity for tariff-free trade with Mexico. Processors and farmers alike were united in the belief that an organization was needed to facilitate U.S. dairy exports not just to Mexico, but the world.

DMI founded USDEC 24 years ago. Through the dairy checkoff, farmers continue to fund USDEC, accounting for about three-fourths of USDEC’s budget. 

Missions to Mexico and other U.S. dairy markets give DMI board members an opportunity to assess with their own eyes and ears USDEC programs and activities, the ROI for farmers and the potential for continued growth.

“This is a two-way relationship,” said Evan Hillan, who milks 350 cows and farms 1,400 acres in Ladysmith, Wis. “We’re not just exporting our products to them. We are also importing their knowledge to us. What they have done in the fluid market and the yogurt market has just been tremendous. You see it walking down the aisles of supermarkets like Walmart and H-E-B. It’s an eye-opening experience.”

Kathleen Skiba, who runs a 180-cow dairy in North Branch, Minn., was equally impressed by the dairy products on display in Mexico. Skiba shared her insight into the post below on Facebook. 

Economic impact 

“The Impact of NAFTA on U.S. Dairy Exports to Mexico” by Informa Economics is a 35-page analysis commissioned by the U.S. Dairy Export Council and the National Milk Producers Federation in 2017.

One of the most striking findings of the Informa study is this: Every $1 of U.S. dairy exports to Mexico generates $2.50 of economic activity in the United States.

Put another way, the U.S. dairy industry’s investment in Mexico has yielded more than “double the bang for the buck” in the U.S. economy, with benefits spread out not just to farmers, but the broader U.S. economy.

“The biggest aha moment for me was seeing how the U.S. and Mexican dairy industries need each other,” said Chace Fullmer, who runs a 2,500-cow dairy in Sigurd, Utah.

Dairy industries unite on common causes

Over the years, the dairy industries of the U.S. and Mexico have found ways to cement their common interests with partnerships.

In 2016, USDEC and the National Milk Producers Federation created the U.S.-Mexico Dairy Alliance with ANGLAC, the Confederación Nacional de Organizaciones Ganaderas (CNOG), and Cámara Nacional de Industriales de la Leche (CANILEC).

On Oct. 21, dairy leaders from both countries met in Torreón, Mexico. They issued a statement agreeing to work collaboratively on 12 issues that will benefit the dairy sectors of both countries. It was the fourth annual meeting between U.S. and Mexican dairy leaders.

2019 programs and activities in Mexico

Among other efforts so far this year, USDEC has:

  • Represented U.S. Dairy in the United States-Mexico-Canada trade agreement. Funded by membership dues, not checkoff resources, USDEC trade policy staff played a critical role in providing technical input to U.S. negotiators about U.S. Dairy’s needs in USMCA. That input is critical because USMCA will replace NAFTA if and when approved by the U.S. Congress and the legislative bodies of Canada and Mexico.  
  • Fought for common cheese names. The Consortium for Common Food Names, founded by USDEC, battled the EU’s campaign to monopolize common cheese names through geographical indications (GIs). 
  • Helped keep the border open. USDEC addressed a threat to close the U.S. border with Mexico over immigration through swift and far-reaching communication efforts. 
  • Worked to eliminate tariffs. USDEC stressed the need to remove Section 232 tariffs on Mexico that triggered retaliatory tariffs on U.S. cheese. The U.S. lifted its tariffs and Mexico eliminated its retaliatory tariffs on cheese.
  • Promoted dairy ingredients. USDEC launched two ingredient seminars aimed at increasing dairy utilization by the Mexican food processing industry. 
  • Formed new retail partnerships. USDEC launched partnerships with two major Mexican retailers this year: Costco Mexico and Chedraui.
  • Explored new opportunities. USDEC held two seminars for Mexican feed manufacturers to highlight the benefits of using permeate and lactose in swine feeding programs.
  • Put more boots on the ground. Edgar Garcia is USDEC’s new business development manager in Mexico to bolster in-country representation and get closer to buyers and consumers.

Mexico remains número uno

The U.S. dairy industry has seen exports grow in other parts of the world, particularly Asia, but the mission showed DMI board members that USDEC does not take its No. 1 market for granted.

It’s about maintaining and building relationships.

“You can’t just come in to a different country, slap down a trade agreement and expect people to buy your product,” said Hershey. “There has to be this back and forth. There has to be respect by both parties and I really feel like we are making headway with that.”

Source: U.S. Dairy Export Council.

Dean Foods announcement causes more worry for Wisconsin dairy farmers

Farmers across southern Wisconsin sell their milk to Dean Foods’ De Pere plant in Brown County and Dean’s plants in northern Illinois. The state’s dairy industry is closely watching Dean’s bankruptcy developments because Dean is the largest dairy processor in the country. It owns famous brands like Deans, Land O’Lakes, and DairyPure.

Early on in the process experts say nothing is likely to drastically change. Dean says it isn’t looking to close plants and is still honoring partnerships with other dairy companies. But the news is just another sign dairy farming is changing quickly.

People are drinking less milk and many processors and vendors are struggling to find new markets and develop new products.

Mark Stephenson, Director of Dairy Policy Analysis at UW-Madison believes Dean will focus on new markets and products as it restructures. He says if Dean closes plants as a part of that process, Wisconsin farmers will struggle to find new places to sell their product.

“If that happens, then milk will still be sold but it will have to go to another plant farther away and those plants would be paying more in transportation costs to get that milk from their farm to the plants,” Stephenson explained.

John Judd, a Mount Horeb farmer, says he used to sell to Dean Foods and knows several farmers who still do. He says there’s no reason to make drastic decisions based on today’s news but he’s telling friends who work exclusively with Dean to find backup customers.

“Better be in touch with their market, their field reps and management to make sure they have a market for their milk,” Judd said.

As for Dean’s announcement, Judd says he’s not surprised. He said he knows the dairy industry is struggling at all levels because the demand for milk is falling while farmers continue to produce large amounts of milk.

Dairy experts say the best case scenario for local farmers would be if Dean Foods either sells to a company that will keep its plants, or if Dean finds a way to keep its operations normal while it restructures.


‘Losing two farms a day’: Wisconsin is facing a serious dairy crisis

Wisconsin leads the nation in farm bankruptcies this year, and dairy farmers are carrying the brunt of the burden.

According to NPR, nearly 10% of Wisconsin dairy farmers may go out of business in 2019. And Wisconsin has seen an increase in suicide rates over the last few years. According to the Wisconsin State Journal, experts are attributing many of those deaths to farmers facing economic challenges.

“You look at the weather, you look at the crops you can’t get off the field, you look at the bills you can’t pay,” Patty Edelburg, vice president of the National Farmers Union, told Yahoo Finance. “Bankruptcies are up. Wisconsin is attributed as the No. 1 bankruptcy in the nation right now, when it comes to dairy farmers. That number is up, I think, 24% from last year already. We’re losing two farms a day.”

They’re literally being denied loans’

Over the past 15 years, there has been a 49% decrease in the number of dairy farms in Wisconsin. U.S. Courts data reveals that the Western District of Wisconsin had the highest number of Chapter 12 farm bankruptcies in 2017. And between 2016 and 2018, Wisconsin lost almost 1,200 dairy farms. (The USDA saw a 6.8% decrease in farms across the country in 2018.)

“Farming is such a stressful occupation by itself,” Edelburg said. “When you start adding financial stress on top of it, it’s just going to add more stress. Farmers can’t pay their bills, they have no extra money, they have people honing down their neck looking to pay bills. They’re going to banks and they can’t get loans. They’re literally being denied loans.”

She explained that the USDA farm agency trains its farm loan officers in how to look for warning signs as part of suicide prevention.

“The bankers are the first and the forefront to see a lot of these things,” Edelburg said. “They’re delivering the bad news, and these farmers are dealing with it on that level.”

Farming is in his DNA’

The plight of Wisconsin dairy farmers has come under the spotlight recently. On Tuesday night, Wisconsin’s agriculture secretary nominee, Brad Pfaff, was denied his post. This came after Pfaff criticized the state legislature’s budget committee for refusing to release funds towards farmer mental health.

He noted that the current budget of the Department of Agriculture, Trade and Consumer Protection (DATCP) had only enough money to help five farmers, and that the committee members had a choice to make: “Which five farmers will it be?” This didn’t sit well with the Senate GOP who voted successfully against Pfaff’s confirmation.

“Governor Evers is right about one thing: farmers are struggling,” Wisconsin Senate Majority Leader Scott Fitzgerald (R) said in a statement. “Unfortunately, his pick for DATCP secretary was part of the problem, not the solution. He tried to place burdensome rules on Wisconsin farmers at a time they can least afford it and repeatedly engaged in partisan political games targeting the Legislature. The liberal Evers Administration has been no friend to farmers. The Senate will continue to take its role of oversight seriously and will exercise our responsibility to hold them in check.”

Wisconsin’s Senate Democratic Leader Jennifer Shilling (D-La Crosse) was among those in support of Pfaff’s nomination.

“Brad was raised on a family farm in western Wisconsin and has dedicated his life to improving outcomes for our farmers,” she said in a statement. “Simply put, farming is in his DNA. At a time when Wisconsin in the middle of a dairy crisis, it is irresponsible and callous for Republicans to reject the appointment of Brad Pfaff. Wisconsin communities are sick and tired of these petty political theatrics. It’s time for Republicans to accept the results of the election last fall.”

Darin Von Ruden, the president of the Wisconsin Farmers Union, said that Pfaff was right in his comments on farmer mental health.

“The real struggle that a lot of farmers face is when you are that third, fourth, even fifth generation to be on the land and all of a sudden, you become insolvent,” he told Yahoo Finance. “The bankers or the creditors start coming after your farm and you end up losing it.”

He added: “In a lot of cases, it’s not any fault of that farmer themselves. It’s really the system we have here in the United States. We’re told on a monthly basis that we need to produce more to feed the world. More and more of the world is starting to feed themselves and that’s part of the reason that production in the United States is starting to affect our prices so much.”

‘We have no brakes on the system’

Although there are numerous factors at play, the “main underlying cause” is the fact that there is overproduction, according to Wisconsin dairy farmer Sarah Lloyd.

“Farmers get pretty stuck with unpredictable prices,” she told Yahoo Finance. “And so when the price is low and you’ve got a bunch of debt to service, the banker says, ‘Well, why don’t I lend you some more money and you can put some more cows on, and then you’ll be better able to service your debt?’ Then, when prices go high, obviously everyone scrambles to produce more to take advantage of the high prices. So, we have no brakes on the system.”

Lloyd added: “If you take an Econ 101 class, you would imagine that when prices were low, that would reduce production because people would be backing off in response to the low price signal from the market. But people don’t do that because they have to pay the bills. So, to me, it’s like we’re on a treadmill and we don’t have any brakes on the treadmill.” 

Trade uncertainty is another factor at play for Wisconsin dairy farmers. As of June 2019, total U.S. dairy exports were down 8.1% year-to-date compared to 2018, according to data provided to Yahoo Finance by the U.S. Dairy Export Council.

Aside from the U.S.-China trade war, which has been a game of tit-for-tat tariffs since March 2018, dairy farmers are also still waiting for ratification of the U.S.-Mexico-Canada Agreement (USMCA), which some see as a gateway for more dairy markets.

However, Edelburg doesn’t think the USMCA is a “fix-all” for dairy farmer woes.

“The little bit of product that we’re going to trade with Canada is going to be minuscule compared to the amount of product that we need to get off the supply,” she said. “There’s only so much that you can trade to Canada. They already have enough milk. The amount of milk that we’re going to trade up there is going to be minuscule compared to what we need to get out of the country. We still have way too much supply in this country to think that Canada’s going to be a fix-all. We have to find more, better export markets. Canada’s not the fix-all for that.”


China’s demand for dairy drives up prices worldwide

There was a time, like 25 years ago, when it was next to impossible to get dairy products in China. Now entire neighborhoods in Shanghai smell like butter. Since China is still not especially known for its booming dairy industry, it’s been importing milk from overseas, driving up prices worldwide. All this is summarized in an excellent Wall Street Journal headline: “Sweet Cheeses! The Milk Road to China Is Driving Dairy Prices Higher.”

The story describes how Chinese people have developed a taste for nai gai cha, or tea topped with cream cheese, and have been incorporating cheese into other traditional foods, such as glutinous rice balls, fried rice, and spring rolls. The rising demand hasn’t affected U.S. dairy producers yet, but analysts believe that it will, despite trade tensions between the U.S. and China, because of shortages in Europe and Australia.

What about the East Asian propensity toward lactose intolerance (70%-100% in some communities)? A little suffering is worth it, young Chinese people told the WSJ, especially if it comes from eating ice cream in hot weather.

Australia’s Record Farmgate Prices Weighed Down by High Costs

Dairy Australia’s October Situation and Outlook report for the first quarter of the season shows record high farmgate milk prices continue to be weighed down by high input costs and a dry weather outlook.

Another warm and dry winter has impacted feed cost and availability, while the cost of irrigated water has continued to increase for farmers in the Murray region. Feed supply is forecast to remain tight with a dry outlook for the remainder of the year and drought conditions persisting in some regions.

Australian milk production declined 6.9% in the season to August as a result of cost pressures, low rainfall in some regions and reductions in herd numbers. Dairy Australia retains its forecast of a 3-5% decrease in national milk production to 8.3-8.5 billion litres for the full season.

“Australian dairy farmers have entered a season of record farmgate milk prices, however milk production has continued to contract due to ongoing high production costs and dry conditions in many areas,” said Dairy Australia Senior Industry Analyst John Droppert.

“There is a mixed picture across the country. For many farmers in southern Australia, good early season rainfall has provided a head start on pasture growth and fodder conservation, but those in drought affected areas further north are facing a second season with few palatable options.”

Strong farmgate milk pricing is supported by buoyant international commodity prices (with subdued milk production in key dairy exporting regions and robust global demand) and intense competition for milk supply among processors due to reduced Australian milk production.

Higher retail prices have delivered value growth for all major dairy products in Australian supermarkets, mainly in private label and branded milk but also dairy spreads. Premium priced speciality products like health-style yoghurts and deli-cheeses have also experienced sales growth.

“This season’s farmgate milk price will provide some farmers with the chance to make up some ground financially, however, high costs of feed and water and ongoing drought will continue to hold back profitability. Whilst these challenges persist, milk production is likely to remain subdued,” Mr. Droppert said.

Dairy Australia Managing Director David Nation said the dry weather outlook for the remainder of the season was concerning:

“The outlook for continued dry conditions is likely to see ongoing pressure on feed costs. Conditions are favourable in some areas, but we’re urging all farmers to monitor their feed plans and use the resources available via Dairy Australia’s website to make informed decisions.”

An updated forecast will be published in a new December Situation and Outlook report. Feed planning resources are available via Dairy Australia’s website


UK dairy farms making average losses of 1p/litre

Falling feed costs have not been enough to pull dairy farmers back into profit-making territory this year, with producers forecast to make average losses of 1p/litre, analysts have warned.

Milk production costs are predicted to fall by nearly 1p/litre this year, as good grass and grain harvests have allowed dairy producers to buy less feed at a reduced cost, but they will still be losing money, said Kite analyst Edward Lott.

The average net cost of production is set to be 29.1p/litre in the year ending March 2020, down from 30.03p/litre the previous year, according to Kite benchmarking figures.

The figures include both variable and fixed costs, and allows for rent, finance and family labour, but also takes subsidy income into account.

A decline in the milk price from some processors, as well as a fall in income from cull cow and calf sales, have held back producers from recovering, said Mr Lott.

There have also been increased costs brought about by the continuing weakness of the pound.

Speak to banks early

Farmers who feel they will need additional financial support to get through the costly winter season need to rapidly gain an accurate idea of their costs and speak to their bank as early as possible, Mr Lott advised, as many are not as eager to lend as they were in the past.

“Efficiency at a cow level is absolutely key,” he said. “Output of milk per farm will still inevitably grow as the industry restructures, but environmental pressures mean we need to make sure every cow place is being maximised.”

The outlook comes after a challenging year for the sector, when nearly half of dairy farm businesses shrunk in value and the gulf widened between the best-managed enterprises and the rest, according to new research.


A2 Milk faces new China competition driving down share prices

The benchmark S&P/NZX 50 Index shed 82.36 points, or 0.8 percent, to 10,759.18. Within the index, 29 stocks fell, 14 rose and seven were unchanged. Turnover was $130.2 million.

A2 shares fell 46 cents, or 3.6 percent, to $12.30. About 646,000 shares hands, down from a daily average of about 740,000 the past three months.

“The biggest weight on the market was A2 – that share price has been trending down for a wee while now. It’s really come off the boil since August,” says Grant Williamson at Hamilton Hindin Greene.

A2 shares peaked at $18.04 on July 31, although they are still 22 percent higher than a year ago.

Broking firm Citi says domestic Chinese infant formula company Junlebao, controlled by the Hebei provincial government, has gained State Administration for Market Regulation – SAMR – registration for its infant formula, which also contains only the A2 protein, and will be allowed for sale in offline retail channels, such as mother and baby specialty supermarkets.

A2 is already competing against other foreign brands produced by Mead Johnson, Danone and Nestle, which also produce infant formula containing only the A2 protein – most milk contains both the A1 and A2 proteins.

Williamson says the A2 brand is still very strong in China “but any increase in competition will hurt to some degree. Personally, I think the market may have over-reacted a little.”

Bucking the negative trend, Pushpay shares jumped 12 cents, or 3.8 percent, to $3.29 after it reported a US$6.5 million net profit for the six months ended September, a turnaround from the previous first-half’s US$4.4 million net loss.

The digital church collection payment app maker started generating positive operating cash flow during the past 12 months, and that stepped up to US$8.9 million in the six months ended Sept. 30 from about US$2 million in the March period.

Church customer numbers rose to 7,905 from 7,420 a year earlier, while monthly average revenue per customer was up 20 percent at US$1,272.

Also bucking the trend, shares in Restaurant Brands rose 1.3 percent to $11.90 while shares in pharmaceuticals distributor Ebos climbed 2.8 percent to $25.45.

Williamson says Restaurant Brands shares are thinly traded since Mexico’s Finaccess Capital took control of the company in a partial takeover last year.

“But it continues to produce some very good numbers.” Last month, the fast-food restaurant operator said it anticipates net profit will be at least 10 percent higher next year as it continues to roll out new stores and looks at buying others.

Williamson says while Ebos used to be regarded as a yield stock, it is now viewed more as a growth stock.

Ebos is expecting a significant increase in earnings this year with the Chemist Warehouse Group supply contract kicking in from July 1, which is expected to add about $1 billion to annual sales.

The company’s revenue was $6.9 billion in the year ended June.

Meridian Energy shares were unchanged at $4.60 after earlier dipping as much as 2.4 percent. Almost 3.5 million shares changed hands, compared with its 1.5 million daily average the past three months.

Not only is Meridian and its fellow electricity generator/retailers prized for its high dividend yield, but the threat of closure of the Tiwai Point aluminium smelter by its majority owner, global mining giant Rio Tinto, is hanging over the entire sector.

Meridian is the smelter’s major electricity supplier but, since the smelter takes about 13 percent of New Zealand’s electricity, its closure would release excess power that would take some time to absorb.

Rio Tinto has said the plant is struggling with global aluminium prices near a three-year low.

Genesis Energy shares were down 0.8 percent at $3.155 and Mercury NZ shares sank 1.6 percent to $4.79.

Among other yield stocks, telecommunications network company Chorus shares shed 2.1 percent to $5.315, phone company Spark shares eased 1.9 percent to $4.38 and retirement village operator Ryman Healthcare fell 2.2 percent to $13.15.

The 10-year swap rate edged up to a bid price of 1.5025 percent from 1.4900 percent yesterday.


New Zealand dairy giant holds back global ambition

New Zealand dairy giant Fonterra has held back from its global ambition to avoid further loss, a strategy confirmed on the company’s annual meeting on Thursday.

At the meeting, Fonterra management admitted that company had dropped its volume-based ambition early on.

“Eighteen months ago, we may have said we’re a global diary giant here to make a difference in the lives of 2 billion people, through a volume ambition of 30 billion liters of milk by 2025. Today, we stand for value,” Fonterra Chairman John Monaghan said at the meeting.

Fonterra’s former CEO Theo Spierings set a goal for the company to achieve a 35-percent increase in milk volume over five years. In order to achieve this goal, Fonterra would have needed to spend large amounts on sourcing milk from overseas farmers.

“With that driver gone, we are prioritizing New Zealand milk and only looking to our global milk sources when needed,” Monaghan said.

Fonterra posted a record loss of 387 million U.S. dollars this year. The shift away from volume to value had helped cut its costs dramatically. Fonterra had shed more than 1,400 people, frozen salaries for our people earning over 64,000 U.S. dollars and decided not to pay performance bonuses for the financial year. Total staff numbers now are 20,000, down from a high of 22,000 in 2015.

The financial priority of the company set at Thursday’s meeting is to lower its debt and capital expenditure.

Fonterra has a heavy investment in China farms. It is understood that the company has invested around 0.64 billion U.S. dollars over the past 10 years, including establishment costs and operational losses.


IFCN publishes 2019 dairy report

The report covers 120 country profiles, which represent 98% of the total global milk production, and provides comparable, standardized data on development, trends and drivers of the last 20 years.

The report includes information on: farm comparison and farm economics, sustainability of farms, monitoring of global dairy economic indicators, status, and trends and drivers of milk production.

The 20th anniversary edition of the IFCN Dairy Report presents data and analysis from 176 typical farm types in 54 countries. It explains the development, trends and drivers of the last 20 years and gives a glimpse into milk production developments by region.

Globally, there are 116m farms with an average of 3.2 cows, but IFCN identifies a deep structural change that is often underestimated in terms of its speed. Since dairy farm structure dynamics drive milk supply, the report allows those in the dairy value chain to anticipate future developments.

India and Pakistan together with Western Europe accounted for 47% of milk production in 2018. Dynamics differed widely by region and IFCN observed that strong regions grew and weak regions declined by 3-5% every year between 2013 and 2018.

In 2019, researchers from more than 100 countries and more than 140 agribusiness companies are members of the global IFCN network. IFCN serves its members with annual conferences, data, tools and market intelligence.


New Book Focuses On Ohio Women in Dairy Farming

Abbe Turner hopes her new book, ‘The Land of Milk & Money,’ will serve as a ‘roadmap’ for people interested in agriculture — both consumers and producers. She co-wrote the book with her daughter, Madeline.

Abbe Turner, owner of Lucky Penny Creamery in Kent, wrote “The Land of Milk & Money” with her daughter Madeline– a millennial and dairy farmer herself. Turner says she hopes the book serves as a “toolkit” for people who may be interested in starting a career in agriculture.

“Just shed a little light on some of the challenges: balance between family and work and production and farming and the animals and trying to navigate what it really means to be a small farmer that’s producing food.”

Turner adds that the book is not just for budding farmers, but also for consumers.

“It’s intended as a consumer piece to shine a light on why local food might be a little harder to access. And the challenges about getting nutrient-dense local food to your family table.”

Turner says one of the biggest challenges for women dairy farmers is access to capital.

“When we were out looking for funding to start Lucky Penny Creamery, people said things to us like well who would want to milk a goat?’ Or, ‘nobody eats goat cheese.’ And many people want to milk goats and raise goats – whether it be for their meat or their fiber or the wonderful dairy products they produce – but many people didn’t understand the business model.”

About half of the 18 operations profiled in the book are in Northeast Ohio.



Global demand fuelling growth in New Zealand sheep milk industry

Global consumer demand is driving major growth in New Zealand’s burgeoning sheep milk industry.

After launching in 2015, one of the major players in the sector Spring Sheep Milk has moved into multiple export markets with various high-value sheep milk products. 

Chief operating officer, Nick Hammond told attendees at the company’s annual farm open day near Cambridge that interest in New Zealand’s sheep milking industry was continuing to grow. 

“It is fast becoming a very compelling opportunity as the proven farm models and market growth have made it a viable option for farmers,” he said.

“Combining this with the environmental benefits of sheep milking, farmers are taking notice.”

Earlier this year, Spring Sheep also launched a premium sheep milk formula for toddlers in Malaysia – the first of its kind in the market.

It plans to roll out its full cream sheep milk powder and premium infant formula range to Australia and New Zealand and other key export markets soon.

Growth in the industry is also behind the construction of the new Melody Diaries spray dryer on the campus of the Waikato Innovation Park in Hamilton.

It will sit alongside the existing Food Waikato dryer and will have 2.4 times its capacity at 1.2 tonnes of powder per hour. 

Hammond said there was a growing global demand for sheep milk products.

“The segment is experiencing strong growth on the back of increasing consumer demand for alternative dairy.”

The open day at Spring Sheep’s outdoor pilot farm near Cambridge attracted more than 400 people and showcased a  fully-outdoor, cow-conversion model.

Hammond said investment in research and development was paying off.

“We’re particularly pleased with the rapid productivity gains that have been powered by the right combination of farming models, capability and the availability of high-performance genetics.” 

Spring Sheep Milk business manager Thomas Macdonald said the new genetics were boosting milk production.

“Ewes on our pilot farms set new records last year, increasing average production by 70 litres per ewe to reach an average of 270 litres with the top sheep over 500 litres. 

“This year we are on target to achieve over a 300 litre average with a significant number of sheep over 400 litres,” he said.

Historically in New Zealand, prior to imported genetics, ewes on average would only produce 100-150 litres each per season which made the model economically challenging for farmers. 

“A good return, however, is now possible using imported genetics coupled with the right farming systems and capable farmers.”

The company is bringing on new farmers for the 2020 season as its markets continue to grow.


Minnesota’s dairy farmers remain positive but continue to struggle

With the closure of Associated Milk Producers Inc. (AMPI) cheese plant in Rochester late last week, there are questions about how dairy farms in the region are doing.

Whether it’s high operation costs, shortage of hay, or low milk prices, small dairy operations in our area and across the country are struggling to make ends meet.

Dairy farmer Ron Pagel’s farmRon Pagel has been a farmer his whole life, so he’s seen the industry fluctuate through the decades. While times have been tough for dairy farmers, he has faith that things will begin to improve.

In recent decades, there has been a steady decline in the number of dairy farms around the region. “I think a lot of it is lifestyle,” said Pagel.

That’s mostly because farmers are retiring and in many cases, their kids are choosing not to take over the farm. “This was my dad’s place,” said Pagel. “He bought it in 1961 and I’ve been here all my life.”

Pagel owns a dairy operation south of Eyota and milks about 80 cows twice a day. As a small operation, Pagel has felt the same effects as every other small dairy farm the past few years.

“You know, the dairy industry has suffered for poor prices for two years,” said Pagel. “We’re seen a

rebound in prices there. I think in the near future, forage supplies, if you’re buying hay in particular, the costs are going to be pretty expensive. Feed costs in general I think are holding their own, you can see that from the struggles that the crop farmers are having.”A calf at Ron Pagel’s dairy farm

While Pagel sells his milk to Land O’ Lakes, he has neighbors who sell to AMPI.

“You know, I don’t think they are worried about a market for their milk, Blair and Jim Falls, Wisconsin is taking a lot of that production,” said Pagel. ” I think this is something that was planned out ahead of time by the powers to be within AMPI. It’s a plan. It’s an old plant, they aren’t going to reinvest in downtown Rochester. If they are going to invest in a plant, they are going to probably go to where the milk is.”

Pagel hopes that the recent increase in milk prices will help dairy farmers get back to running their operations more efficiently.


Why Indian dairy giants fear disruption from New Zealand companies

India’s top dairy giants, from Amul and Hatsun Agro to Mother Dairy, have got into a defensive huddle, apprehensive that New Zealand’s smaller milk makers may soon disrupt domestic prices by exporting their produce here.

Discussions on a free trade agreement (FTA) with milk-producing countries such as New Zealand and Australia under the proposed Regional Comprehensive Economic Partnership (RCEP) may open up India’s sprawling dairy sector to foreign players from these countries.

India may be the largest producer of milk globally, but all of it is consumed by its huge population. “Around 40% of India’s milk is consumed in villages. One third of the surplus comes to the organised sector and the rest goes to the unorganised sector,” said R S Sodhi, MD of Amul.

In comparison, New Zealand, which is the world’s seventh largest milk producer, exports 90% of its dairy because its population of 42 lakh people is too tiny to sustain demand. Indian cooperatives and private companies fear that even if one-fifth of New Zealand’s dairy exports reaches Indian shores, domestic companies will be forced to reduce prices.

DAMImage (18).

“New Zealand is selling milk powder at Rs 160 per kg. We are selling it at Rs 280 per kg. To make 1 kg of powder, we need 10.5 litres of milk. So, tomorrow, if they come to India with such low prices, why will other companies buy milk from us,” said Sodhi.

Cooperatives and private dairy companies in India buy milk from small farmers at around Rs 31 per litre. With NZ’s proposed entry into the sector, that amount could plummet by Rs 10, warned industry experts.

“Farmers will be devastated. Agriculture accounts for around12% of India’s GDP and a major portion of that is from milk. Milk provides liquidity to farmers for their day-to-day needs,” said R G Chandramogan, MD of India’s largest private dairy, Hatsun Agro.

Value of milk output for 2016-17 was Rs 6.14 lakh crore at current prices, which was higher than combined value of paddy and wheat and sugarcane, according to data from NDDB (Mother Dairy).

“Any decision to reduce the tariff barrier would encourage import of cheap milk powder in the country. Our country will be pushed into a state of import dependence, jeopardising our nutritional security as is the case in many Asian, particularly, South Asian and South East and Far East Asian countries,” said NDDB chairman Dilip Rath.

While domestic dairy companies argued that India is self-sufficient in dairy, with milk production in the country having increased with a CAGR of more than 6.5% in the last five years, New Zealand dairy farmers have a different opinion.

“In India, local dairy demand is outpacing dairy supply and some analysts have estimated that by 2025 India will represent 39% of the world’s dairy consumption. We believe that there is a role for New Zealand dairy exporters in India alongside domestic processors. Our diversified product offerings also allow us the ability to play a complementary role in helping to meet India’s dairy demand like exporting proteins, advanced ingredients for sports & active and medical nutrition applications,” said Kimberly Crewther, executive director, Dairy Companies Association of New Zealand (DCANZ).

“New Zealand’s milk production is highly constrained due to a number of factors, including our geographic size and commitment to farming within environmental limits. This means that New Zealand production is unlikely to grow significantly from current levels in the future,” Crewther added.


Australian Dairy Industry Feels the Cost of Production

Deregulation has not treated the dairy industry well, says WAFarmers that has made submissions to previous dairy industry Senate committee inquiries.

Dairy farmers this month have a last chance to comment on an industry code of conduct due to become law in January and also to comment to another Senate committee inquiry looking at possible reintroduction of a milk floor price as part of a wider review.

An “exposure draft” released Monday of a proposed mandatory code of conduct to regulate dealings between dairy farmers and milk processors is open for comment until November 22 – it is the first written in legal terms with two previous public comment periods have been on general code principles.

The code requires dairy farmers and processors to negotiate supply contracts “in good faith”, requires processors to publish a “standard form” contract on June 1, bans retrospective price step downs and exclusive supply provisions and sets out a dispute resolution process.

It was the major recommendation of the last review of the dairy industry conducted by the ACCC in 2017 and 18.

On October 17 the performance of the dairy industry and profitability of dairy farmers since industry deregulation in 2000 was referred to the Senate Rural and Regional Affairs Committee for inquiry.

The committee is to report back to the Senate by March and has called for public submissions by November 29.

The terms of reference require the committee to “pay particular attention” to Dairy Australia’s ability “to act independently and support the best interests of both farmers and processors”, accuracy of statistical data collected by Dairy Australia and Australian Bureau of Statistics and funding of Dairy Australia and its stakeholder consultation on how milk levy revenue is spent.

It is also required to consider the merit of tasking the Australian Competition and Consumer Commission (ACCC) to investigate how it can regulate the milk price per litre paid by processors to farmers, alternative approaches to supporting a viable dairy sector and introduction of a mandatory industry code of practice.

Introduction of the dairy code in January – at least six months earlier than originally intended – and referral to the Senate committee of a dairy industry inquiry were both seemingly triggered by the actions of Queensland’s One Nation senator Pauline Hanson earlier this month.

Senator Hanson, one of two One Nation senators on the cross benches, sparked a turf war with The Nationals over dairy farmer hardship three weeks ago when she claimed she had written to every sitting Federal Nationals MP seeking support for her proposal to review industry performance and profitability.

Senator Hanson also threatened to withdraw One Nation’s votes for all non-essential legislation unless the government moved to help dairy farmers.

Her call for a Senate inquiry was backed by Labor and crossbench senators.

Last week WAFarmers dairy section president Mike Partridge pointed out WAFarmers had made submissions to a previous Senate committee inquiry in 2016-17 and to the ACCC inquiry and was still waiting for the imbalance between what consumers paid for milk and what it cost WA farmers to produce to be resolved.

He said one element of hope that the new inquiry might achieve a better outcome for farmers than previous ones was a specific reference to the impact of deregulation.

“Deregulation has not treated our industry well,” Mr Partridge said.

“It affectively put control of the market place in major retailers’ hands and they devalued the product we produce.

“With the extended drought situation and rising feed costs increasing cost of production over the last few years we have had no capacity to pass those increases on to the consumer.

“While we won’t necessarily be advocating for reregulation, we would want some alternative mechanism in place to get value back into the supply chain for farmers.

“At our regional meetings across the South West for the Australian Dairy Plan, the second biggest concern was that there is no mechanism to bring value back to the farm gate.”

In 2009-10 the Senate Economics References Committee looked at pricing and competition in the dairy industry, in 2011 it looked at impact of supermarket pricing – introduction of $1-a-litre milk – and in 2016-17 it was directed “to establish a fair, long term solution to Australia’s dairy crisis, with particular reference to fresh milk security”.

The 2016-17 inquiry followed Eastern States’ price “step downs” enforced on farmers by the former Murray Goulburn co-operative, once the largest dairy processer in Australia and threatened step downs by processor Fonterra.

The ACCC inquiry ran in parallel with the previous Senate committee inquiry and looked at the relationships between dairy farmer and processor and recommended a mandatory code of conduct.

Currently the dairy industry is conducting its own Australia-wide review, headed by former Victorian premier John Brumby, to create the Australian Dairy Plan to guide the industry into the future.

Last week Federal Agriculture Minister Bridget McKenzie announced the mandatory code regulating contracts between dairy farmers and processors will be brought forward to January, instead of July as initially forecast.

“We are delivering the mandatory code as soon as possible in order to provide clearer safeguards for how farmers are treated as members of the supply chain,” Ms McKenzie said.

“Our government also committed $560,000 to Australian dairy farmers to design, develop and market test new milk pricing and trading concepts.

“My department will seek initial feedback on these concepts while consulting on the code.

“I remind the dairy industry again that they are on notice to make sure that the contracts offered to farmers are appropriate and fair ahead of its formal introduction – the community expects no less.”

To make a comment on the dairy code go to

For information on the Senate committee inquiry contact the committee secretary, (02) 6277 3511 or


Scots dairy farmers given notice by Muller following 25% production surge

Dairy farmers in Scotland are to be served notice by Muller as the processor seeks to tackle an ‘unprecedented’ surge in Scottish milk production.

The 25 per cent increase, which equates to 33 litres of additional milk per year for every person in Scotland, has seen milk being trucked to England in order to find a market for it.

Muller said this had resulted in more than 6,000 tanker movements travelling a total of 2.5 million miles, meaning it was not sustainable and highlighted ‘significant environmental consequences’.

Following a month-long review, Muller said 14 out of 230 dairy farms and suppliers would be served a year’s notice.

These are all north of Aberdeen – areas which present heightened or complex logistical transport challenges for Muller. Any businesses which find an alternative buyer before the end of their notice period will be allowed to go.


The processor will also introduce a tiered transport charge for dairy farmer suppliers in Scotland from February 2020 ‘with the fastest expanding dairy farmers shouldering a proportionately higher charge than those who have grown production more modestly’.

Rob Hutchison, milk supply director for Muller Milk and Ingredients said: “We fully appreciate these measures will be extremely unwelcome and destabilising for our farmer suppliers particularly in the North East of Scotland, but the current situation is unviable and we must act.

“We completed the largest single investment in fresh milk processing in Scotland in more than a decade at our dairy in Bellshill last year and we will continue to do what we can to stimulate new demand for fresh milk.

“But with fresh milk already in 96 per cent of the nation’s fridges and overall consumer demand for the product in marginal decline, the reality is that it is extremely unlikely that this sector will soak up the heightened levels of milk production from farms which we have seen.”

Muller will now work with affected dairy farmers to help them adjust to the changes.

During the review period, Muller sought views and input from the Muller Milk Group farmer board elected to represent dairy farmers, NFU Scotland and Scottish Government.

NFU national dairy board chairman Michael Oakes said: “This latest announcement from Muller, coming just a fortnight after the collapse of Tomlinsons Dairies in Wales, will raise even more concerns that the liquid milk market in the UK is broken.


«Tight margins throughout the dairy supply chain have meant many businesses are failing to achieve sustainable returns which is threatening the long-term prosperity of the sector and leaving farmers carrying much of the risk.

“The NFU has written to the Environment, Food and Rural Affairs Select Committee calling for an urgent investigation into the country’s liquid milk processing sector to help safeguard the future of British dairy and to determine how industry can work together to create a more robust and resilient market for both farmers and processors.”

NFU Scotland president Andrew McCornick added: “This is clearly devastating news and the livelihoods and viability of all those Scottish dairy farmers supplying Muller have been undermined by the outcomes of this review.

“Given the considerable commitment and investment made by dairy farmers, we now have producers looking to find a new buyer in the next year if they wish to continue milking cows while others, through haulage charges, face a significant cut in income at a time when milk prices are struggling to cover the cost of production.»

Transport Charge for surplus volumes –
• Greater than 15% expansion – 0.85ppl on all litres produced
• Above 5% to 15% expansion – 0.55ppl on all litres
• Up to 5% expansion – 0.25ppl on all litres
• Base year for calculation – 2019 v 2017 actual 12 months production
• The charge will apply across all farms and groups except Aberdeenshire farms who already pay a transport charge
• Charge rates will be reviewed annually with changes in customer demand and farm supply volumes reflected in the review’

Source: FGinsight

How California’s Blackouts Are Affecting The State’s Dairy Farmers

Many dairy farmers in California are struggling to adapt to frequent power outages. Farmer Cody Nicholson Stratton talks with NPR’s Ailsa Chang about how it has impacted his livestock and business.


Firefighters are still trying to contain wildfires burning across California. And as part of the effort to prevent additional fires, the state’s largest utility, Pacific Gas and Electric, has been deliberately cutting power to millions of residents, even residents who are relatively far away from the current wildfires. Businesses in California are taking a real hit from these rolling power outages, which can last several days at a time. And to talk more about that toll, we’re joined now by Cody Nicholson Stratton. He’s a dairy farmer in the Northern California town of Ferndale.



CHANG: So I just to start out by giving people an idea of how much your business relies on electricity because I guess a dairy farm may not seem to suffer in obvious ways when there’s a blackout, compared to say, like, laundromat a or a restaurant. Can you just tell us how much your farm depends on electricity?

NICHOLSON STRATTON: Well, our farm’s entirely dependent on electricity. We use it to run our milk barn, which is a twice-a-day operation, for about seven to eight hours. We need power to cool our milk tanks to maintain legal temperatures, as well as to run electric pumps to pull water for the cattle to ensure that they have water throughout the day. And so as far as keeping the farm operational and cows healthy and happy, we need power.

CHANG: Constantly. But I mean, I imagine that you do expect occasional blackouts to occur, like, as a result of storms. So how do these planned, longer power outages – how different do they feel compared to, say, naturally occurring blackouts?

NICHOLSON STRATTON: They feel a fairly bit different. We do plan on power outages. However, knowing they’re coming and having them last for several days, opposed to a couple hours, is quite a bit different for us. There’s also a level of uncertainty with them as far as the different agencies relaying different information and different timelines as to when power is going out, which results in us generally running on generators when we may still have power because we can’t lose power during milking.

CHANG: Wow. What about procuring enough fuel to run these generators? Does that become a problem?

NICHOLSON STRATTON: So we were able to fill our on-farm fuel tanks in advance, but there’s definitely been rationing within the county and fuel selling out. And that, you know – for a business, that becomes a problem, not to mention as for individual families.

CHANG: Yeah. Yeah. So it sounds like there are tremendous ripple effects that happen when there is this planned power outage. Can you just give me a picture of how your daily life has been reordered during one of these blackouts?

NICHOLSON STRATTON: Yeah. Our farm is multigenerational, and there’s several family members that work on it. And as a result of the wildfires – my dad actually is a volunteer firefighter – left and is fighting fire, which left me alone on the farm. You know, I get up now at 2 o’clock to start generators.


NICHOLSON STRATTON: I will have to stay up until 10 or later to make sure that cows have water. And my night went from a six to seven hours of sleep to two or three at a time.

CHANG: That’s incredible. How much money do you think your farm has lost directly because of these planned power outages by PG&E?

NICHOLSON STRATTON: I’m – I won’t know for sure until the bills come, I suppose. But we’ve definitely seen a decrease in production. Despite the fact that we do our best to make sure that they have water, there’s always difficulties in keeping water in front of them, which decreases production. So we’re making less milk, and then we’re spending quite a bit more on diesel. So I’m sure there’s going to be a bit of a economic loss for us in this.

CHANG: I mean, when you’re looking at the whole situation, though, do you feel like you could blame PG&E for doing this? Or do you think that they’re handling the problem in a way that is unnecessarily costly to people like you?

NICHOLSON STRATTON: I think at the end of the day, we have family that lost homes in the 2017 fires in Santa Rosa. And we have family in the Healdsburg and Windsor area that’s – have been impacted, as well as friends that farm down there. And I understand needing to shut the power off. And I think it’s a hardship, personally, that I’m willing to bear if it saves families and saves human lives.

CHANG: Well, I wish you all the best. Cody Nicholson Stratton is a dairy farmer based in Ferndale, Calif.

Thank you very much for joining us.

Source: NPR

USDA milk production report shows preliminary output up

Some call it a September surprise. Others call it fodder for the bears. The USDA’s latest Milk Production report showed preliminary output at 17.6 billion pounds, up 1.3% from September 2018. Output in the top 24 states totaled 16.8 billion, up 1.6%. Revisions added 10 million pounds to the original 50 state August total, now put at 18.29 billion pounds, up 0.2% from August 2018. Revisions added 32 million pounds to the top 24 states output.

Cow numbers continued to slip. The head count in the 50 states totaled 9.315 million, down 2,000 from August, which was revised lower by 1,000 cows, and 53,000 head below a year ago. Output per cow averaged 1,891 pounds, down 72 pounds from August but 34 pounds above a year ago.

California output was up 1.6%, thanks to a 35 pound gain per cow offsetting 5,000 fewer cows milked. Wisconsin was up 0.6%, on a 20 pound gain per cow. Cow numbers were down 6,000 from a year ago.

Virginia had the biggest loss, down 7.3% on 8,000 fewer cows, followed by Arizona, down 4.9% on 11,000 fewer cows. Texas showed the biggest increase, up 9.3%, thanks to 30,000 more cows and a 70 gain per cow.

The overall increase came on milk-per-cow gains, even when forage quality and quantity are questionable, says the University of Wisconsin’s Dr. Robert Cropp and Dr. Mark Stephenson in their monthly podcast. The two remain optimistic on milk prices and don’t see a major downfall in the near term, assuming there is not a collapse in cheese demand.

HighGround Dairy says “It is unlikely that U.S. milk output will see declines in the near term” and warned that “Production expansion has returned for good and will become the new normal yet again, ending the declines seen in three different months earlier this year and contributing to a return to global milk production expansion.”

Matt Gould, analyst and editor of the Dairy and Food Market Analyst newsletter, said the Milk Production report “represents the fastest growth rate in milk supply in about a year,” in the Oct. 28 Dairy Radio Now broadcast.

He warned that milk output is also growing in Europe “So we’re exiting a period where milk production was negative worldwide and entering, or maybe we’re already in, a period where milk production is positive.” That will put downward pressure on prices, though we are entering “the demand season of year,” but “volatility is probably the one thing you can predict will continue.”

He doesn’t see a freefall in prices and says “Next year’s lows are probably going to be the highest lows that we have seen in several years.” He also said it’s possible that prices may be even higher. “The big difference is we started this year with a mountain of milk powder in European inventories and now it’s all gone. We don’t have buffer stocks to insulate markets from volatility.”

Demand will also continue to play a big role. U.S. cheese at retail has been growing 2-3%, he concluded, “and we’re still growing per capita consumption.”

FC Stone stated in its Oct. 24 Early Morning Update: “In a broader view, a generally tighter milk production situation coupled with Class IV prices running above Class III early in the year (and, to some extent, California moving into the Federal Order) has tightened the availability of fresh cheddar (to say nothing of several production hiccups we’ve heard about in the past few months). This has partly led some users to whittle down, rather than building inventories for the holidays as they had last year.”

The September Milk Production report fed the bears. The September Cold Storage report likely added a little more fodder.

September butter stocks totaled 302.1 million pounds, down 2.2 million pounds or 0.7% from August but were 19.8 million or 7.0% above September 2018.

American cheese stocks totaled 771.4 million pounds, up 5.5 million pounds or 0.7% from August but were 32.3 million or 4.0% below a year ago.

Stocks in the “other” category climbed to 571.6 million pounds, up 2.1 million pounds or 0.4% from August but were up 26.5 million or 4.9% from a year ago.

The total cheese inventory crept up to 1.369 billion pounds, up 6.4 million pounds from August but 10.5 million pounds or 0.8% below September 2018.

Midwest cheesemakers continue to report a lack of spot milk, says Dairy Market News, but keep a close eye on how much to take on due to production capacity and potential resale concerns. Demand reports continue to be steady but slower than a few weeks ago and inventories in the region are “mostly in balance.”

Class I milk prices will move higher. The Agriculture Department announced the November Federal order Class I base price at $18.14 per hundredweight, up 30 cents from October, $2.62 above November 2018, and the highest Class I since January 2015. It equates to $1.56 per gallon, up from $1.33 a year ago. The 11 month average is $16.78, up from $14.82 a year ago and $16.41 in 2017.

The Oct. 17 Livestock, Dairy, and Poultry Outlook stated that, “based on recent data for milk cow numbers and dairy cow slaughter, milk cows for third quarter 2019 are expected to number 9.32 million head, 5,000 higher than forecast last month. Milk per cow for the third quarter is expected to be 5,805 pounds, an increase of 15 pounds from the last forecast.

Milk production for third quarter is thus expected at 54.1 billion pounds, up 200 million pounds than the last forecast. The fourth-quarter milk production forecast was unchanged at 53.8 billion pounds.

The 2019 forecast is 218.2 billion pounds. The forecast for the 2020 milking herd was unchanged from last month at 9.34 million head. Milk yield per cow was forecast at 23,725 pounds, an increase of 35 pounds from the last forecast, as more rapid yield growth in late 2019 should carry over into 2020. Due to the higher milk per cow forecast, the 2020 production forecast was raised 400 million pounds to 221.6 billion pounds.

U.S. dairy products continue to leave the country via the Cooperatives Working Together program. Member cooperatives accepted five offers of export assistance this week to facilitate sales of 965,625 pounds of Cheddar cheese and 180,779 pounds of cream cheese.

The product is going to customers in Asia and the Middle East from November through March 2020 and brings CWT’s 2019 sales to 44.4 million pounds of American-type and Swiss cheeses, 277,782 pounds of anhydrous milkfat, 4.5 million pounds of butter (82% milkfat), 5.3 million pounds of cream cheese and 43.5 million pounds of whole milk powder. The products are going to 27 countries and are the equivalent of 878.3 million pounds of milk on a milkfat basis.

Dairy Management Incorporated board members were in Mexico this week getting a first-hand look at dairy checkoff programs going on there, sponsored by the U.S. Dairy Export Council.

USDEC points out that Mexico is the U.S. No. 1 export market, accounting for one-quarter of U.S. dairy exports and that nearly 90% of Mexico’s dairy imports come from the U.S. Those sales amounted to $1.4 billion in 2018, says USDEC, and have increased for nine consecutive years. Exports to Southeast Asia were second, totaling about half those to Mexico, followed by Canada, China, South Korea, South America, and Japan.

HighGround Dairy reports that “EU milk production showed the strongest year over year growth since April, supported by higher production from the top five milk producing countries on the continent and especially good output from both Ireland and Poland.”

For the first time ever, a cheese from the United States has been judged “Best in the World” at the World Cheese Awards. A panel of 260 judges from 25 countries ranked Rogue Creamery’s Rogue River Blue No. 1 on Oct. 18 in Bergamo, Italy. There were 3,804 entries.

Rogue Creamery is located in Central Point, Oregon. The USDEC praised the award and what it means for U.S. cheese globally now that U.S. cheeses can be found in fine cheese shops and restaurants in Europe, the UK, Australia, Japan, and around the globe. Complete details are posted at the USDEC website.


Send this to a friend