America’s biggest milk producer has just filed for bankruptcy — a newsflash that’s been a bit like hearing thunder after seeing lightning: stunning, but predictable.
Alternative products and changing consumer trends proved the undoing for Dean Foods, which had been a robust survivor in almost a century of dairy dominance. The company powered through the Great Depression and the Second World War, cementing itself as a case study in how to outpace rivals in a dairy industry churning with technological change. Now it’s become a cautionary tale about disruption.
Causes of the curdle
As the chart below shows, there were plenty of warning signs that things were beginning to curdle. Revenues for Dean Foods had reached a record high of $12.6 billion in 2011. But by last year, these had almost halved, sinking to $7.5 billion. Its share price plummeted accordingly — down 80% over the last year, with investors pressing the ejector seat after four quarters of negative earnings and mounting debt. Most analysts, though, didn’t even see this coming: just 30 days ago, four out of five coverage analysts still had a Hold rating; only one advised Sell (Credit Suisse). When disruption happens, it happens fast.
Dean Foods CEO Eric Beringause explained these numbers in the context of a tough market for dairy as a whole. “Despite our best efforts to make our business more agile and cost-efficient,” he wrote, “we continue to be impacted by a challenging operating environment marked by continuing declines in consumer milk consumption.”
The ghost of a WhiteWave past
This sudden shift in consumer demand is one of the totems we used to build out our recent White Paper, a thesis charting the reasons for launching our New Carnivore Fund. But a sour sectoral outlook is not the whole story. The moral of this downfall is not that they failed to respond to the rise of alt milks. They had. Instead, the story is a more ironic tale of turning their backs on them. Shockingly, Dean Foods was well-positioned for the changes ahead when, in 2002, it acquired WhiteWave Foods, the maker of Silk Soymilk, for $205 million.
And what an acquisition it was. WhiteWave was founded back in 1977 by a 29-year old ex-hippie named Steve Demos living in Boulder Colorado; its mission: the “creative integration of soy into the average American diet.” After iterating on hundreds of products, Steve eventually landed on Silk Soymilk. He built authentic and mission-driven branding, and had the ingenious idea to position Silk in the dairy aisle, away from other unrefrigerated soy beverages he called “Armageddon food.” From then on sales soared. Dean’s initially bought a small piece of the company as part of a distribution agreement but seeing the growth, acquired WhiteWave in 2002. But by 2012, the execs at Dean Foods had other ideas and decided to spinout WhiteWave to “destroy unlock significant shareholder value,” taking it public at a $3 billion valuation and forking dividends out to shareholders. Five years on, Danone buys WhiteWave for $12.5 billion. And Dean Foods has now gone bust.
The surprising New Carnivores
The decision of Dean Foods to distance itself from alt protein should serve as a cautionary tale for the animal products industry more broadly. The same changes we’ve seen over the last few decades in dairy are inevitably coming to the animal protein market. But with the path already paved and with a much greater market opportunity, we can expect that change to happen much more quickly this time around.
Fortunately many in the industry seem to get it. When we launched our New Carnivore Fund, we expected most investor interest to come from vegan and impact investors, but surprisingly most investor interest is coming from veteran players in the meat and dairy industry. Quietly and decisively, investors and executives are taking stock of consumer trends and are choosing to embrace change. The demise of Dean Foods only serves as another reminder of the need to do so.
Former Ag Secretary Tom Vilsack addressed farm broadcasters at the National Association of Farm Broadcasting annual convention in Kansas City.
Currently the President and CEO of the U.S. Dairy Export Council, Vilsack said the dairy industry has reasons for optimism in spite of the Dean Foods bankruptcy announced this week.
“I think you have to understand that there is actually good news in the dairy industry, ninety-four percent of households in the US have fluid milk in their refrigerators. Butter is at a 50-year high consumption domestically, and cheese is at a record high domestically. We’ve seen increases in exports since we began our next five percent plan both in volume and in value. Value is up almost a billion dollars more than it was just a couple of years ago. And I think it’s reflected in the fact that prices are at the highest they’ve been in five years. So I think we’re beginning to see some rebound for dairy farmers.”
Vilsack says the dairy industry has come a long way in recent months, and is also an industry that has embraced innovation.
The $555 million dairy processing operation taking shape just north of the city’s downtown isn’t expected to be operational until November 2020, but the 375,000-square-foot facility where 8 million pounds a milk a day will be processed into cheese and whey is already taking shape.
It sits in the St. Johns industrial park, amid construction trailers and equipment, one of three structures being built on 146 acres as part of what is expected to be the largest food-processing plant in Michigan.
Glanbia, an Irish food and nutrition company, announced plans for the $470 million cheese plant last August. The project also includes an adjacent $85 million adjacent facility belonging to Proliant Dairy Ingredients, an Iowa company.
Glanbia will own 50% of the milk processing facility. Dairy Farmers of America and Select Milk Producers, large dairy cooperative investors, will own the other half.
It will be state-of-the-art, and employ about 250 people, said John Dardis, senior vice president of U.S. corporate affairs for Glanbia.
The new St. Johns operation is modeled after a Glanbia and Dairy Farmers of America and Select Milk Producers partnership in New Mexico, Southwest Cheese Company LLC.
The latest expansion of that operation was last year, Dardis said.
Today the plant in New Mexico, which also produces cheese and whey, processes 14 million pounds of milk daily and employs more than 400 people, more than doubling the milk it processed since it opened in 2006.
Its success is a reassurance, Dardis said, that there’s demand for the operation under construction in St. Johns.
It is also a good sign that the facility could grow in the future, he said.
“Cheese demand is strong, and the dairy ingredient stream has become a real value product,” Dardis said. “It’s the same dynamic that’s driving Southwest Cheese, so we’re confident about those dynamics into the future. We wouldn’t be building it with our partners if we weren’t.”
When it’s finished the St. Johns milk processing facility will capture about 20% of Michigan’s milk, said Glanbia Project Manager John Murphy. Right now, however, it’s an active build site, where an estimated 350 to 400 people go to work every day.
The walls of the milk processing facility went up in February, Murphy said. Since then crews have been building out its refrigeration area, installing 50-foot storage tanks, laying tile flooring and building an intricate pipe system that will run throughout the building transporting milk and water.
Glanbia’s 75,000-square-foot cheese-making area is taking shape too. A large cheese-belt, where milk curds will be separated from whey, was installed in August.
“These rooms look enormous but they fill up pretty quickly,” Murphy said during a recent walk-through of the building.
Roughly 800,000 pounds of American-style cheddar cheese will be made on site every day when the facility opens. Most of it will be cut into 40-pound blocks, packaged and shipped to retailers and food service and ingredient companies.
“From the moment the milk is pumped out of the silos (and comes) in to be pasteurized, and comes out as cheese in a package is a couple hours,” Murphy said. “It’s very quick.”
Glanbia will concentrate the protein from the whey, creating another byproduct called permeate. Proliant, the Iowa company,will dry the permeate into powdered dairy solids used in making baked goods, confectionery products, beverages and animal feed.
The Glanbia facility will operate 24 hours a day, seven days a week, Murphy said. Between 100 to 125 trucks carrying milk each day will get to the facility on Walker Road.
“The milk never really stops coming,” he said.
The milk processing plant is being built under the assumption it will expand, Murphy said.
“You can’t make predictions, but we have designed and built this with the assumption that it will,” he said.
The plant won’t have the capacity to process more than 8 million pounds of milk a day, Dardis said, so increasing production would require an expanded footprint.
The dairy operation currently occupies 30% of the city’s industrial park, St. Johns Community Development Director Dave Kudwa said. There are an additional 20 acres of land within it that hasn’t be developed yet.
Hopes for the future
Right now milk from Kevin Weber’s third-generation dairy farm in Leslie is trucked as far away as Wisconsin and Pennsylvania to be processed.
Milk from his cows will go to Clinton County when the milk processing operation opens, he said.
“It will benefit us by keeping our milk more local and it will reduce some of the hauling to get our milk processed,” Weber, 53, said.
He isn’t the only one with high hopes for the St. Johns operation.
Murphy gives two or three site tours a week at the property, to local and state officials, legislators and dairy farmers.
He’s “lost count” of how many there have been, he said.
St. Johns City Manager Jon Stoppels got a closer look at the operation on a recent tour.
“Anytime you go into it for the first time you’re impressed,” he said. The scale of the operation and the efficient, precise way it will operate is encouraging, Stoppels said. So is its potential to boost the city’s economy and population.
“I hope that people will not only work there but live here,” he said. “I would love to see our town grow. This is the swan song. St. Johns is known as the mint city, but I’d like to see it be known as the cheese city as well.”
Glanbia operates a cheese innovation center in Idaho, Dardis said, and a few years ago opened Glanbia Cheese Marketplace, a store that offers different types of cheeses the company has developed there.
Is a cheese store possible in Michigan?
“I don’t know, is the answer,” Dardis said.
When the St. Johns operation opens the company will first be focused on ensuring an efficient operation, he said. It’s how the company handled Southwest Cheese when it opened more than a decade ago.
“If you get that fundamentally right then you expand the market and you add in to meet that demand,” Dardis said.
“Please God, that’s how things will turn out in Michigan too.”
Investigators can’t say with certainty what caused the 2018 airplane crash that killed a prominent Kewaunee County business-owner and two other northeastern Wisconsin men.
Dairy-owner John Pagel, his son-in-law, Steve Witcpalek of Kewaunee, and pilot Nathan Saari of Bellevue died Feb. 22, 2018, when their twin-engine Cessna slammed into the ground east of Lafayette, Indiana.
The National Transportation Safety Board’s final report on the crash, made public last week, blamed “an in-flight-loss of control.” But investigators could not determine if mechanical or human factors caused the loss.
The report marks the end of NTSB’s investigation of the crash, said Terry Williams, a spokesman for the board.
Saari was a 35-year-old professional pilot who was raised in Marquette, Michigan. He had reported the aircraft “a little out of control” shortly after takeoff from Eagle Creek Airpark in Indianapolis, the NTSB report says.
The pilot radioed that he was able to get the plane straight and level. But upon reaching an altitude of 18,300 feet, he reported the aircraft’s trim — it’s ability to remain stable — “is kind of going out on me,” the report says.
Air-traffic controllers then lost contact with the aircraft. An NTSB animation shows the plane flew in a tight circle above rural Rossville, Indiana, then crashed into a muddy field just north of Rossville about 20 minutes after takeoff.
With his family, the 58-year-old Pagel operated Pagel’s Ponderosa Dairy, a farm with more than 5,300 cows, 100 employees and 8,500 acres. Pagel also owned The Cannery Public Market in downtown Green Bay, represented Casco on the Kewaunee County Board, and had been a Kewaunee School Board member.
He was well-known in the Kewaunee area for philanthropic efforts that included a “boot camp” where local students could learn about working on a farm, and playing a major role in designing and building the agricultural sciences center at Kewaunee High School, his alma mater.
Witcpalek, who was married to Pagel’s daughter Jamie, also was active in the community. He was instrumental in planning and building an inclusive playground for children with special needs in Kewaunee.
Donald Trump’s idea of a good farm program seems to be “Hee Haw.”
On a trip to Wisconsin, he drew guffaws from the state’s hard-hit dairy farmers by proclaiming that — thanks to his policies — the farm economy was looking good. “We’re over the hump,” he gloated.
Perhaps Trump thought that farmers are rubes, unable to do simple math.
But those dairy farmers were painfully aware that it costs them $1.90 to produce a gallon of milk, while the processing giants that control the milk market are paying them only $1.35 a gallon.
That 55-cent-a-gallon loss quickly adds up to a huge loss of income, and a devastating loss of farm families. Wisconsin lost 638 dairy farms last year and another 551 so far this year.
Far from “over the hump,” farm prices have been further depressed by Trump’s tariff clash with China: U.S. dairy sales to China fell by 54% in just the first half of this year.
Meanwhile, monopoly power is crushing prices. An $8 billion behemoth named Dean Foods now controls 90% of Wisconsin’s milk market, empowering it to commit daylight robbery, essentially stealing farmers’ product — and their farms.
Yet U.S. Agriculture Secretary Sonny Perdue — the one national official who’s supposed to stand up for farmers — nonchalantly kissed them off, smugly declaring it natural for the big to devour the small.
There’s nothing he can do for family operators, he says, except tell them to “go out” of agriculture.
Perdue and Trump are simply inept stewards of America’s farm economy. What we need is a different approach — a path to a revitalized, family-farm-based food system that will break the corporate stranglehold over U.S. agriculture.
As dairy farms continue to shut down in the Badger State, Randy Gurski is finding a new way to bring in money.
The farm that Gurski lives on is one that’s full of rich family history.
“My grandpa had this since the 40’s,” Gurski said. “This farm has been around for generations.”
Dairy farming served as an identity for Gurski and his family.
“I started milking cows when I was 12-years-old,” Gurski said. “I’m in my 60’s now so pretty much all my life I’ve been milking cows.”
A few years ago, Randy had to step away from the dairy industry because of struggles agriculture experts say are creating difficult times for many farmers across the state and in central Wisconsin.
“Prices probably was a concern and battling the weather,” Gurski stated. “Trying to get the crops in, trying to get the crops off, trying to make hay in the summer time; it’s a combination of everything. A lot of people my age, it’s a change. Got to look at something different.”
After accepting that he could no longer do what he’d known his whole life, which was the dairy farming business, he decided to go into property maintenance.
“We are seeing more farms transition and get out of farming,” said Marathon County Agriculture Expert Heather Schlesser. “The mindset becomes if I have to continue to struggle and have this maintained stress, is there something else out there that’s a little bit less stressful or a lot less stressful?”
Gurski said transitioning into a 40-hour-a-week job was a little difficult as first, but it became much easier as time progressed.
“It’s hard if you haven’t had no experience doing nothing else,” Gurski added. “It’s hard to get into the workforce.”
Despite having to turn away from dairy farming, Randy is finding a positive in the situation.
“Not getting up at 4 o’clock is kind of a relief,” Gurski said. “You know the long hours that was kind of hard, but it was kind of sad to see the cows go.”
Gurski currently does beefing and cash cropping on the side as a way to make ends meet and to make more money. He mentioned for other farmers who find themselves having to leave the business they’ve known for so long; it gets better as time progresses, and starting off part-time could help build the new skills needed to jump into a new full-time job.
If you are a farmer facing challenging times you can click here for helpful resources.
Nearly half of dairy farm businesses are shrinking in value as the gulf widens between the best-managed enterprises and the rest, according to new research.
Rather than increasing herd size, farmers should focus on improving the profitability of each cow to remedy this, said Neil Adams, from dairy consultancy business Promar.
“We have some farmers that are doing phenomenally well and we have some farmers that are doing phenomenally poorly,” said Mr Adams.
“It is management, more than anything, that determines the difference between top and bottom.”
Some 45% of milk producers saw a fall in the net worth of their business in the financial year ending March 2019, after rising feed and energy costs outstripped improvements in milk prices and production.
“The milk price is not going to save you. If you can’t make it work at these prices, you really need to have a sit down and figure out how you are going to make it work,” he said.
Better-performing businesses even took on the greatest amount of new debt, but were using it as capital investment, while poorer businesses had lower debt, but were using it to survive, said Mr Adams.
Average profit a cow across all 520 farms on Promar’s books fell by 13% as total variable costs increased by 1.3p/litre to 17.2p/litre, but farm income only increased by 0.84p/litre.
Best still making profits
However, the best farmers still managed to make significant profits and grow their net worth, despite the challenging year.
When ranked by operating profit (before rent and finance), the top 25% made £750 more a cow last year than the worst 25%, as yields were higher and management of costs was significantly better.
These highest-profit farms had milk yield a cow of 9,102 litres – 794 litres more than the poorest 25%.
This also helped to keep variable costs 17% lower and overhead costs 28% lower for each litre of milk produced, said Mr Adams.
Despite the challenging year, the best kept bought-in feed costs down to 9.86p/litre, compared with 11.5p/litre for the worst.
And, as The Wall Street Journal reports, it has something to do with a little East Asian country whose name rhymes with angina.
While dairy has never traditionally been a go-to for Chinese paletes (people who descend from East Asian communities are heavily affected by adult lactose intolerance), a recent influx of milk, cream, and cheese is adding a whole new pizazz to Chinese cuisine.
Cream cheese tea… uhhh, yum?
Wholesale skim-milk and whole-milk powder prices have both risen toward the top as a spike in consumer demand has Chinese culinary establishments adding a new (hopefully) fresh take to classic goodies — like salted duck-egg yolk. This time adorned with cream.
Skim-milk powder prices have increased by 26% to 47% across the US, Europe, and Oceania over the past year. According to the US Dairy Export Council, the average price in those 3 areas hit over $2.5k per metric ton in October — the highest average since October 2014.
Let’s not forget New Zealand
New Zealand-based Fonterra Dairy — the world’s largest dairy exporter — is really capitalizing on China’s coup for cream (China is one of Fonterra’s biggest customers).
In October, the co-op said it’s selling skim-milk powder at even higher markups than companies in the US and Europe, and soon expects whole-milk powder sales to rise as well.
The US hasn’t profited as much off China’s dairy addiction as they have benefited from dairy consumption in other parts of Asia. But, according to the WSJ, European farms are on pace to produce less skim milk in 2020, which could present even moo’re dairy opportunities for the US (milked it).
Associated Milk Producers Inc., Minnesota’s 17th-largest private company, is closing a facility in Rochester and laying off 74 employees in the process.
New Ulm-based AMPI said it will close its plant at 700 1st Ave. SE by early February 2020, according to a filing with Minnesota’s Department of Employment and Economic Development. AMPI, which is a dairy farmer owned cooperative, will be laying off mainly manufacturing and warehouse workers.
The cooperative has been hit hard by some tariffs. The cheese market has fallen by as much as 25 percent since U.S. trading partners imposed counter-tariffs on U.S.-made cheese in reaction to U.S. tariffs on their goods. AMPI is also paying more on shipping, because the U.S. has put a 25 percent tariff on Canadian-made cardboard.
Associated Milk Producers has roughly $1.6 billion in annual revenue, according to the Business Journal’s list of largest private companies.
Struggling dairy farmers are finally getting some relief after a wave of closures that hit particularly hard in the presidential election battlegrounds of Wisconsin and Minnesota.
Even as Americans drink less milk, prices on commodity markets have surged to five-year highs, providing some help to those still operating.
While it may be too late to save many farms, the turnaround eases the financial pressure on a swath of President Donald Trump’s rural base ahead of next year’s election. The Trump campaign is trying to pick up Minnesota, which he narrowly lost in 2016, and fighting to hold onto neighboring Wisconsin, which he won last time by fewer than 23,000 votes.
Dairy is especially important to Wisconsin. “America’s Dairyland” as the slogan reads on the state’s license plates. Residents embrace the nickname “Cheeseheads,” and foam cheese-wedge hats are staples at sports events and tourist shops. Towns across the state depend on the money dairy farmers spend at equipment dealers, feed stores, cafes and local retailers.
“By spring, if we keep the prices where they are now, farmers are going to be in a better mood,” said John Rettler, 57, who with his three sons operates a 240-cow dairy operation near Neosho, Wisconsin.
He and his neighbors have endured a five-year glut and trade disputes that have cut access to key export markets. Weather hasn’t been kind either, with a wet spring delaying grain planting and then early snowstorms in October ruining some of the crop of silage and hay farmers planned to feed their cows with over the winter.
Dairy farmers are “very crabby” right now, said Rettler, who also presides over the FarmFirst Dairy Cooperative board. “They’re beaten up so badly. How many times do you get kicked in the stomach and get back up?”
Many didn’t. In the 12 months ended Oct. 1, one in 10 dairy farms in Wisconsin closed and one in eight in Minnesota.
All those closures are finally having an impact on the downtrodden U.S. milk market. Class III futures, which represent milk used to make cheddar cheese, are up about 40% in 2019, heading for the best year since 2007.
“People will recover some footing,” said Marin Bozic, a dairy economist at the University of Minnesota. “They’re stepping back from the brink. And they have time to make strategic decisions on their own terms.”
Traditional dairy farmers still face tough competition from a shift toward larger operations, with some groups owning tens of thousands of cows, Bozic said.
The milk price increase is already hitting food companies such as Dean Foods Co., the top U.S. dairy processor, which cited higher costs for milk in reporting a wider-than-expected loss in the second quarter. Starbucks Corp. singled out higher dairy costs in the current year in an Oct. 30 earnings call. Kraft Heinz Co., meanwhile, said it boosted prices last quarter in the U.S. on products such as macaroni and cheese and Philadelphia cream cheese.
Food processors with out-sized exposure to dairy, including cheese, butter and infant formula, face lower margins, said Amit Sharma, an analyst with BMO Capital Markets. Consumers are switching to other beverages as milk prices rise, he added.
Even with the higher prices, Bozic expects dairies to continue to close at an above-normal rate, predicting another 6% to 7% operating farms will shut down within a year.
“There are a lot of farms that their balance sheets have been so damaged that there’s no recovery,” said Mark Stephenson, director of dairy policy analysis at the University of Wisconsin.
In some cases, farmers are hanging on in the hope that their inventory of cows and equipment will command higher prices when they sell, said Wayne Gajewski, 59, who has an 80-cow operation near Athens, Wisconsin.
“For some I’ve talked with, if they get some equity back, it will be an opportunity to exit the industry because they will have something to walk away with,” Gajewski said. “It’s just the stress of the industry with the margins being so tight.”
Gajewski grew up on a farm near his current operation, which he’s been running since 1979. He plans to stick it out and takes the milk-price increase as a sign the industry is moving in the right direction. He expressed hope that the Trump administration will conclude trade deals with China and Japan and win passage of the U.S.-Mexico-Canada Agreement.
“Hard times aren’t always necessarily bad because they help people become better managers of what they have,” he said. “For those that survive it, agriculture can have a brighter future.”
Lactanet Canada recently achieved an historic milestone by enrolling its 100,000th cow from robotic systems, on milk recording. With about 700,000 cows total on milk recording in the country, robotic herds have become an important and sizeable segment for Lactanet.
According to Richard Cantin, Lactanet’s Business Development Manager, “It was roughly 20 years ago that we did the first North American DHI sampling in a robotic system. It was new to us back then and the learning curve was very steep, but today DHI testing in robotic systems has become fairly routine.” He adds, “Over the last year, we’ve added 10 to 12 robotic herds to our services each month. The trend is strong and shows no sign of slowing down.”
Individual cows’ milk samples in robotic systems are collected with an automated sampling device. This aspect is very different and unique, but much of the rest of the DHI process is similar to any other herds.
Lactanet herd management data and services are a great complement to the on-farm data from the automated milking system. Their combination make a very powerful management tool. “For Lactanet, the challenge is to ensure we can both add to and complement the on-farm data, so dairy managers and their advisors have the best possible information available for making decisions” states Cantin.
Lactanet has lots to offer and can bring excellent value and payback to robotic herds through a wide variety of services:
Lab services such as fat, protein, SCC, MUN, KetoLab, Johne’s, Leukosis, BVD, contagious mastitis and GestaLab pregnancy testing;
Calculated information such as Milk Value, BCAs, lactation totals, lifetime production, rankings and benchmarking;
The ability to participate in genetic evaluation and official breed programs.
Cantin concludes, “It’s hard to predict how popular and widely adopted robotic milking will become on Canadian farms, but no doubt it will continue to play a significant role in our industry. We’re pleased to count a large number of robotic farms as our customers and to be part of their herd management solution, today and into the future.”
Lactanet is an organization providing profitable dairy management and genetic solutions to dairy producers across Canada.
Due to two major developments in the past two decades at a global level – income growth and changes in consumer preferences- food consumption has been growing at a faster pace than world population.
These developments have resulted in a consumption increase of products of higher value (such as meat and dairy products) in emerging economies. In parallel, rising societal and environmental concerns in developed economies have influenced consumer preferences, leading to lower red meat consumption for example. These are among the main findings of the ‘Global food supply and demand, consumer trends and trade challenges’ market brief, published by the European Commission.
For beef, the largest consumers are in North America, with a consumption of 35 kg per capita, closely followed by South America. The EU is the fourth biggest consumer (15 kg per capita), after Oceania at above 20 kg per capita. About 15% of global beef production is traded, with the largest surplus found in South America. The trade position of the EU has changed significantly over time. For the last three decade consumption per capita has decreased due to shifts in consumer preferences, and from a net-importer, the EU became a net-exporter. The reduction of domestic supply could bring the EU close to self-sufficiency by 2020.
The largest beef consumers can be found in North America (above 35 kg/capita), followed by South America (below 35 kg), Oceania (above 20 kg), with the EU and the Black Sea at lower levels (15 kg). Eating more beef is recent in Asia, where consumption reaches only 5 kg per capita. In Africa, beef consumption is more traditional, but limited by availabilities and income disposal at a level slightly above 5 kg per capita.
Very different patterns can be observed globally: a strong reduction in beef intake in North America and Oceania and a smaller one in the EU. In South America, consumption per capita continues growing, but at a slow pace. In Asia, the change in per capita consumption is small but in view of population growth, it represents a significant increase in total volume.
About 15 % of global production is traded. The largest surplus is found in South America, where production grew significantly in the 2000s and in Oceania (Australia). While in South America 85% of the beef is consumed locally, exports are close to 3 times higher than domestic use in Oceania.
The deficit of Asia and Africa is increasing, reaching respectively 13% and 8%. US and Canada export significant quantities of beef but they also import and trade between themselves, leading North America as a region to self-sufficiency. The net-trade position of the EU varied significantly over time. For three decades, per capita consumption decreased in the EU due to shifts in consumer preferences and from a net-importer, the EU became a net-exporter. But the subsequent reduction of domestic supply could bring the EU close to selfsufficiency by 2020 (although exporting around 5% of its production).
The EU and North America are the largest users of dairy products with both around 270 kg of milk equivalent per capita. In South America, consumption grew to 150 kg per capita. While in Asia it will reach 70 kg per capita in 2020. The African consumption remains stable at below 50 kg per capita, however the population growth leads to a significant increase in total use and a deeper deficit due to production not keeping with demand. The main suppliers are Oceania, the EU and North America. Oceania exports 200% of its use, as the EU’s surplus reaches more than 10% of its use.
The EU and North America are the largest users of dairy products with around 270 kg of milk equivalent per capita.
In Oceania, consumption is slightly lower as well as in the Black Sea. In South America, consumption
grew to 150 kg per capita. In Asia, consumption rose significantly to 70 kg per capita by 2020. In Africa, the per capita consumption remains stable (below 50 kg) but population growth leads to a significant increase in total use and a deeper deficit, as production does not keep up with demand. Only South Africa is self-sufficient.
The rising import needs of Asia (especially of China) mainly drive the world trade developments.
The main suppliers of dairy products are Oceania, the EU and North America. Oceania exports 200% of its use (and New Zealand 90% of its production). In the EU, the surplus reaches more than 10% of use.
Regarding wheat, the EU is the second largest global user with around 250 kg per capita, after the Black Sea region. EU consumption has been growing steadily over time, driven mainly by the development of the livestock sector due to the use of wheat in animal feed. Four regions supply the world with wheat: the EU, the Black Sea region, North America and Oceania. The EU is a major wheat exporter, trading up to 20% of its use.
North America is by far the largest user of maize, reaching almost 900 kg per capita, significantly above use in South America at 240 kg per capita and the EU at 140 kg per capita. The substantial global increase in maize is linked to the expansion of livestock production and more recently to the production of maize-based ethanol. With almost 15% of global maize production traded, the main suppliers are South and North America followed by the Black Sea region. In contrast, the EU is the biggest maize importer, with close to 25 million tonnes of imported maize in 2018/2019.
As soya bean, it is a crop mainly produced and traded by the Americas. They represent 82% of production. At a global level, two thirds of availability is crushed into meals to be used in feed. The EU is the main destination market for soya meals, representing 30% of world trade. However EU import needs are declining by using alternative sources such as cereals and more recently pulses.
Sugar per capita consumption is much more stable worldwide. The largest user is South America, at above 50 kg per capita, where market conditions influence the quantity of sugar that is channelled as food or ethanol production. In the EU, the level of consumption, at 37 kg per capita, is above North America’s at 30 kg per capita. This is due to the EU processing more sugar into ethanol and because of lower use of other sweeteners such as isoglucose. As global production, 40% is located in Asia and 30% in South America. Following the 2006 sector reforms and the end of the sugar production quota in 2017, the EU now oscillates between self-sufficiency and a small surplus.
The EU is by far the largest consumer of pigmeat, as its preferred meat, with a consumption above 40 kg per capita. It is followed by North America at below 30kg per capita. Pork is also the favoured meat in Asia, where it should reach 15 kg per capita by 2020. Less than 8% of global production is traded, with more than 80% of exports originating from North America and the EU. Both regions have had a slight decrease of consumption, together with higher production, leading to an increase of surplus. The latter reached 30% of use in North America and 12% in the EU.
For poultry, consumption increases significantly in all regions of the world, and gains over other meats being cheaper and more convenient. It is the first meat eaten in the Americas, Oceania and Africa. The largest consumer is North America, at above 50 kg per capita, followed by South America, Oceania and the EU at above 25 kg per capita. 12% of global production is traded, with the Americas as the main suppliers. The EU is also a major poultry exporter for certain cuts and imports high value cuts such as breasts, leading to a surplus of 5% of its use.
More detailed information is available in the market brief for global consumption and trade trends for the wheat, maize, soya bean, sugar, beef, pigmeat, poultry and dairy sectors.
Iowa, the nation’s 10th-largest milk producer with 1,150 dairy farms, has lost about 80 this year. Zachary Boyden-Holmes, DesMoines
With local dairy farms continuing to disappear, American Milk Producers Inc. has shuttered its dry milk plant in Arlington, Iowa, costing 49 workers their jobs.
The company also closed its cheese plant in Rochester, Minnesota, saying farmers in the area didn’t produce enough milk to keep the factories open.
“With less milk in the region, there has been less milk for processing into nonfat dry milk, which makes operating the plant unsustainable,” AMPI Vice President Sarah Schmidt said in an email.
She declined to comment on what kind of severance package the workers received as a result of the closure Saturday. In a press release Friday, American Milk Producers said it would give the workers “resources, training and opportunities to apply for available jobs at AMPI facilities.” The closest American Milk Producers plants to Arlington are both nearly 150 miles away, in Blair and Portage, Wisconsin.
The company will also keep its milk shipping and receiving stations open in nearby Earlville, Iowa, and Prairie du Chien, Wisconsin.
Fayette County Economic Development & Tourism Director Mallory Henson said the offer to relocate employees would hurt the local workforce.
“This is going to be a blow for the employment base of our county,” she said. “But unfortunately, these things happen.”
The Maquoketa Valley Cooperative opened the factory in 1960, 11 years before American Milk Producers acquired it and renamed the plant. It had been the Arlington Division of AMPI for 48 years.
According to the Iowa Department of Agriculture & Land Stewardship, 347 of the state’s dairy farms have closed since October 2015, representing a 22% drop. Hugo Ramirez, a dairy nutrition professor at Iowa State University, said market conditions drove farmers out of businesses.
Fewer immigrants have worked on farms in Iowa in recent years, he said, driving up the cost of labor. In addition, the dollar has been strong against other currencies, decreasing the value of U.S. dairy sales overseas. Ramirez said there also has been excess supply, keeping the price down.
“We have too much milk in the market and not enough milk buyers,” he said.
Ramirez, however, said he could not think of another Iowa plant that has closed because of the tough environment for milk producers.
Henson said this was the first significant closure in the northeast Iowa county since Art’s Way Manufacturing in West Union, a maker of agricultural equipment, shut down its operation around 2015. Nick McIntyre, the former plant manager and now West Union’s city administrator, said that factory also shut down because of a downturn in the local agricultural economy.
The plant employed about 20 welders and assemblers. It moved all of its operations to the company’s corporate headquarters in Armstrong, Iowa.
McIntyre retired from factory life after the closure. But he said some of the welders moved to a Caterpillar plant about 25 miles southeast in Elkader, Iowa. That plant, in turn, shut down in 2017.
“It was a hit for West Union,” McIntyre said of the Art’s Way closing. “Obviously, jobs, whether it’s one or 20, it affects the community — it was a good-paying job with a good company. And the economy just dictated that they shut this one down.”
Under Communism, farmers labored in the fields that stretch for miles around this town west of Budapest, reaping wheat and corn for a government that had stolen their land.
Today, their children toil for new overlords, a group of oligarchs and political patrons who have annexed the land through opaque deals with the Hungarian government. They have created a modern twist on a feudal system, giving jobs and aid to the compliant, and punishing the mutinous.
These land barons, as it turns out, are financed and emboldened by the European Union.
Every year, the 28-country bloc pays out $65 billion in farm subsidies intended to support farmers around the Continent and keep rural communities alive. But across Hungary and much of Central and Eastern Europe, the bulk goes to a connected and powerful few. The prime minister of the Czech Republic collected tens of millions of dollars in subsidies just last year. Subsidies have underwritten Mafia-style land grabs in Slovakia and Bulgaria.
Europe’s farm program, a system that was instrumental in forming the European Union, is now being exploited by the same antidemocratic forces that threaten the bloc from within. This is because governments in Central and Eastern Europe, several led by populists, have wide latitude in how the subsidies, funded by taxpayers across Europe, are distributed — even as the entire system is shrouded in secrecy.
A New York Times investigation, conducted in nine countries for much of 2019, uncovered a subsidy system that is deliberately opaque, grossly undermines the European Union’s environmental goals and is warped by corruption and self-dealing.
Times Insider: The Story Behind the Story
Europe’s machinery in Brussels enables this rough-hewed corruption because confronting it would mean changing a program that helps hold a precarious union together. European leaders disagree about many things, but they all count on generous subsidies and wide discretion in spending them. Bucking that system to rein in abuses in newer member states would disrupt political and economic fortunes across the Continent.
This is why, with the farm bill up for renewal this year, the focus in Brussels isn’t on rooting out corruption or tightening controls. Instead, lawmakers are moving to give national leaders more authority on how they spend money — over the objections of internal auditors.
The program is the biggest item in the European Union’s central budget, accounting for 40 percent of expenditures. It’s one of the largest subsidy programs in the world.
Yet some lawmakers in Brussels who write and vote on farm policy admit they often have no idea where the money goes.
One place it goes is here in Fejer County, home to Hungary’s populist prime minister, Viktor Orban. An icon to Europe’s far right and a harsh critic of Brussels and European elites, Mr. Orban is happy to accept European Union money. The Times investigation found that he uses European subsidies as a patronage system that enriches his friends and family, protects his political interests and punishes his rivals.
Mr. Orban’s government has auctioned off thousands of acres of state land to his family members and close associates, including one childhood friend who has become one of the richest men in the country, the Times investigation found. Those who control the land, in turn, qualify for millions in subsidies from the European Union.
“It’s an absolutely corrupt system,” said Jozsef Angyan, who once served as Mr. Orban’s under secretary for rural development.
The brazen patronage in Fejer County was not supposed to happen. Since the earliest days of the European Union, farm policy has had outsized importance as an immutable system of public welfare. In the United States, Social Security or Medicare are perhaps the closest equivalents, but neither of them is a sacrosanct provision written into the nation’s founding documents.
The European Union spends three times as much as the United States on farm subsidies each year, but as the system has expanded, accountability has not kept up. National governments publish some information on recipients, but the largest beneficiaries hide behind complex ownership structures. And although farmers are paid, in part, based on their acreage, property data is kept secret, making it harder to track land grabs and corruption. The European Union maintains a master database but, citing the difficulty of downloading the requested information, refused to provide The Times a copy.
In response, the Times compiled its own database that, while incomplete, supplemented publicly available information on subsidy payments. This included corporate and government records; data on land sales and leases; and leaked documents and nonpublic land records received from whistle-blowers and researchers.
The Times confirmed land deals that benefited a select group of political insiders, visited farms in several countries, and used government records to determine subsidy payments received by some of the largest of these beneficiaries. The Times investigation also built on the work done by Hungarian journalists and others who have investigated land abuses despite a media crackdown by Mr. Orban’s government.
Farm subsidies helped form the basis for the modern European Union. Today, they help underwrite a sort of modern feudalism in which small farmers are beholden to politically connected land barons.
The European Union provides $65 billion to farmers each year. It’s the largest line item in the E.U. budget and one of the biggest subsidy programs in the world.
The centerpiece of the program is that people get paid based on how much land they farm. The system is supposed to help hard-working farmers and stabilize Europe’s food supply.
But in former Soviet bloc countries, where the government owned lots of farmland, leaders like Hungary’s prime minister, Viktor Orban, have auctioned off land to political allies and family members. And the subsidies follow the land.
A company formed by the Czech prime minister, Andrej Babis, collected at least $42 million in subsidies last year.
Even as the European Union champions the subsidy program as an essential safety net for hardworking farmers, studies haverepeatedlyshown that 80 percent of the money goes to the biggest 20 percent of recipients. And some of those at the top have used that money to amass political power.
In the Czech Republic, the highest-profile subsidy recipient is Andrej Babis, the billionaire agriculturalist who is also the prime minister. The Times analysis found his companies in the Czech Republic collected at least $42 million in agricultural subsidies last year. Mr. Babis, who denied any wrongdoing, is the subject of two conflict-of-interest audits this year. The Czech government has, in recent years, ushered in rules that make it easier for big companies — his is the biggest — to receive more subsidies.
“The European Union is paying so much money to an oligarch who’s also a politician,” said Lukas Wagenknecht, a Czech senator and economist who used to work for Mr. Babis. “And what’s the result? You have the most powerful politician in the Czech Republic, and he’s completely supported by the European Union.”
In Bulgaria, the subsidies have become welfare for the farming elite. The Bulgarian Academy of Science has found that 75 percent of the main type of European agricultural subsidy in the country ends up in the hands of about 100 entities. This spring, the authorities carried out raids across the country that exposed corrupt ties between government officials and agricultural businessmen. One of the largest flour producers in the country was charged with fraud in connection with the subsidies and is awaiting trial.
In Slovakia, the top prosecutor has acknowledged the existence of an “agricultural Mafia.” Small farmers have reported being beaten and extorted for land that is valuable for the subsidies it receives. A journalist, Jan Kuciak, was murdered last year while investigating Italian mobsters who had infiltrated the farm industry, profited from subsidies and built relationships with powerful politicians.
Despite this, proposed reforms are often watered down or brushed aside in Brussels and many other European capitals.
European Union officials dismissed a 2015 report that recommended tightening farm-subsidy rules as a safeguard against Central and Eastern European land grabbing. The European Parliament rejected a bill that would have banned politicians from benefiting from the subsidies they administer. And top officials swat away suggestions of fraud.
“We have an almost watertight system,” Rudolf Mögele, one of Europe’s top agricultural officials, said in an interview earlier this year.
Unstated is that, while audits can catch incidents of outright fraud, rooting out self-dealing and legalized corruption is far more difficult. The European Union seldom interferes with national affairs, giving deference to elected leaders.
Few leaders have attempted such widespread, brazen exploitation of the subsidy system as Mr. Orban in Hungary. At rallies, he deploys a false narrative that Brussels wants to strip away farm aid and use it to bring in migrants, and that he alone can stop it.
Farmers who criticize the government or the patronage system say they have been denied grants or faced surprise audits and unusual environmental inspections, in what amounts to a sophisticated intimidation campaign that harkens to the Communist era.
“It’s not like when a car comes for you at night and takes you away,” said Istvan Teichel, who farms a small plot in Mr. Orban’s home county. “This is deeper.”
One man who did speak up was Mr. Angyan, the former under secretary for rural development. A jowly, gray-haired rural economist with a mischievous smile, Mr. Angyan became an unlikely crusader for small farmers. He served under Mr. Orban, initially thinking him a reformer, only to leave angry and disillusioned. He canvassed the countryside, documenting the government’s dubious land deals and mistreatment of small farmers.
And then he disappeared from public life.
A Thief Economy
To understand how leaders like Viktor Orban exploit Europe’s largest subsidy program requires going back 15 years, to when Hungary was spinning with optimism and change.
In a moment that symbolized Western triumph in the Cold War, the European Union officially absorbed much of the breadbasket of Central and Eastern Europe on May 1, 2004. Hungary, the Czech Republic, Poland and Slovakia — all former Soviet satellites — were among 10 nations that joined the bloc that day (Romania and Bulgaria joined three years later).
Amid the celebrations, Mr. Orban was in political purgatory. He had been the prime minister who helped guide Hungary into the union — only to see voters turn him and his party, Fidesz, out of office in 2002. Now he noticed one of the first protest groups to emerge in the new Hungary: farmers.
Hungarian farmers clogged Budapest’s narrow streets in 2005 for a mass demonstration. They did not oppose European Union membership. Far from it. As new European citizens, they wanted the subsidies they were eligible for under the bloc’s Common Agricultural Policy, or C.A.P., but the payments hadn’t arrived. Hungary’s left-leaning government was too disorganized and unprepared.
From the outset, the European subsidies represented a pot of money scarcely fathomable to farmers accustomed to Communist austerity. The program was designed after the Second World War to boost farming salaries and ramp up food production in countries laid waste by conflict. Over time, it became a critical foundation in creating the borderless economy that would grow into the modern European Union.
European leaders understood that absorbing former Soviet satellites would bring challenges, but never fully grasped the potential for corruption in the subsidy program.
At its heart, the program is defined by a simple proposition: Farmers are mostly paid based on how many acres they harvest. Whoever controls the most land gets the most money.
And Central and Eastern Europe had lots of land, much of it still state-owned, a legacy of the Communist era. European officials worked closely with incoming governments on issues such as meeting food testing standards, or controlling borders, yet only limited attention was paid to the subsidies.
“They thought they would change us,” said Jana Polakova, a Czech agricultural scientist. “They were not prepared for us.”
Mr. Orban showed hints of what was to come even before Hungary joined the bloc. Before he left office in 2002, Mr. Orban sold 12 state-owned farming companies, which became known as the “Dirty Dozen,” to a group of politically connected buyers. Buyers got cut-rate deals and exclusive rights to the land for 50 years, making them eligible for subsidies when Hungary became part of the system two years later.
“This is a crony economy, where friends and political allies get special treatment,” said Gyorgy Rasko, a former Hungarian agriculture minister. “Orban didn’t invent the system. He’s just running it more efficiently.”
Out of office, Mr. Orban watched the farmers’ protests in Budapest and saw the potential political and economic power of subsidies in the countryside. He also was intrigued by the man who negotiated successfully on behalf of the protesters: Jozsef Angyan.
After the fall of Communism, Mr. Angyan made the case that small landholders could keep villages alive through sustainable practices. He founded an environmental program at one of the nation’s most prestigious universities and helped build an organic farm called Kishantos with 1,100 acres of wheat, corn and flowers.
“He wanted to help the local farmers,” said Mr. Teichel, the farmer from Fejer County, who said Mr. Angyan was a rare champion of the small farmer in a countryside where corrupt politicians ran a “thief economy.”
Eight years after losing office, Mr. Orban again ran for prime minister in 2010 and wanted to court the rural vote. Mr. Angyan was now a member of Parliament, and his ties to the farmers gave him political clout in the countryside. Mr. Orban summoned him to his modest home west of Budapest.
It was a chilly February morning and Mr. Angyan had a cold. So Mr. Orban fixed tea over a wood-burning stove and, for two hours, the two men spoke about the future of Hungarian farms.
Mr. Angyan envisioned a government that gave small farmers more political and economic clout. Mr. Orban made it clear that he wanted to implement Mr. Angyan’s ideas and offered to make him under secretary of rural development.
“When Orban speaks, he speaks with such conviction,” Mr. Angyan said. “You believe him. I believed him.”
After a landslide victory, Mr. Orban moved quickly, just not as Mr. Angyan had anticipated.
Mr. Angyan’s proposal called on the government to carve up its massive plots and lease them to small and midsize farmers. But Mr. Orban instead wanted to lease whole swaths of land to a coterie of his allies, a move that Mr. Angyan predicted would make the countryside beholden to Mr. Orban’s party, Fidesz, and its allies.
He also knew that European subsidies would follow the land, widening the gap between rich and poor and making it easier for those at the top to wield power.
“I had absolutely no chance to carry out what I wanted to do,” Mr. Angyan said.
In 2011, Mr. Orban’s new government began leasing out public land. At first, officials said that only local, small-scale farmers would be eligible for leases. But the plots ultimately went to politically connected individuals who, in some cases, had been the sole bidders present at auctions. By 2015, hundreds of thousands of acres of public land were leased out and much of it went to people close to Fidesz, according to records obtained from the government and Mr. Angyan.
New leaseholders paid low rates to the government, even as they became eligible for European subsidies. The deals drew sharp criticism in the local media, yet ordinary farmers stayed quiet, despite being left out.
In one example, a powerful Fidesz lawmaker, Roland Mengyi, inserted himself into the leasing process in Borsod-Abauj Zemplen County, where one of his associates won leases for more than 1,200 acres. Mr. Mengyi is an outsized character, who referred to himself as “Lord Voldemort.” He was later convicted and sentenced to prison in a separate case for corruption related to European subsidies.
Mr. Orban’s sudden change in policy left Mr. Angyan disillusioned, and feeling betrayed. He quit the government in 2012 but remained in Parliament, where he tried to push his vision, even as the government moved in the opposite direction.
At a closed-door meeting in early 2013, Mr. Angyan confronted Mr. Orban in front of the prime minister’s most trusted allies in Parliament.
“You’re going to destroy the countryside!” Mr. Angyan recalled saying.
“You are a well-poisoner,” Mr. Orban shot back, according to Mr. Angyan, startling the crowd with a blunt rebuke of a former member of his cabinet. “You have abandoned me.”
As a shocked silence fell over the party faithful, Mr. Orban launched into a soliloquy comparing politics to a battlefield. Those who are loyal, he said, could count on their brothers in arms for protection.
“But those who aren’t?” the prime minister asked. “We will also fire at them.”
A Modern Feudalism
In 2015, Mr. Orban started moving even faster. His government sold hundreds of thousands of acres of state farmland, much of it to politically connected allies. Technically, it was an auction. But many local farmers say they were told not to bother bidding because winners had been predetermined. Few could afford the large plots, anyway, and many more did not even know about the sales.
One pensioner, Ferenc Horvath, 63, lives in a shack in Fejer County, and belatedly discovered that the government had sold all the state-owned land surrounding his tiny plot.
“It happened so fast,” Mr. Horvath said. “We had no idea you could buy land here.”
On nearly all sides, Mr. Horvath had a new neighbor, Lorinc Meszaros, a childhood friend of Mr. Orban and former pipe-fitter who is now a billionaire. Fences sprung up overnight, and the stench of pig manure fell over the area.
Mr. Meszaros, along with his relatives, has bought more than 3,800 acres in Fejer County alone, according to a Times analysis of land data compiled by Mr. Angyan and other sources, and confirmed by visits to the farm. Mr. Orban’s son-in-law and another friend of the prime minister’s have also bought large estates a short drive away, The Times found.
The prediction made by Mr. Angyan — that Mr. Orban’s policies would make the countryside beholden to Fidesz and his allies — was being realized.
It is a type of modern feudalism, where small farmers live in the shadows of huge, politically powerful interests — and European Union subsidies help finance it. In recent years, according to a Times analysis of Hungarian payment data, the largest private recipients of farm subsidies were companies controlled by Mr. Meszaros and Sandor Csanyi, an influential businessman in Budapest.
Last year alone, companies controlled by the two men received a total of $28 million in subsidies.
The two men have radically different relationships with Mr. Orban and his party.
Mr. Csanyi is seen as someone Mr. Orban cannot afford to antagonize. He is chairman of OTP Bank, one of the nation’s most important financial institutions, and has a reputation for outlasting mercurial leaders. He has hired out-of-work politicians from all parties, and his farming conglomerate, led by his son, now controls two of the “Dirty Dozen” companies privatized by Mr. Orban.
Mr. Meszaros’s fortune, by contrast, is tightly bound to the prime minister. He has built an empire by winning government contracts for projects largely financed by the European Union and has recently snapped up companies that once belonged to a business tycoon who had fallen out of favor with Mr. Orban.
They are eligible for a range of subsidies under the Common Agricultural Policy, whether direct payments based on acreage, subsidies directed at livestock and dairy farming or rural development programs — all of which is distributed at the national level by the Fidesz government.
“I’m always accused, and I am very angry about it, that I got the biggest subsidies,” Mr. Csanyi said in an interview. The reason, he said, is not politics. It is pigs. “I produce about one-sixth of the Hungarian pig production.”
On paper, landowners should face restrictions. The Hungarian government has capped subsidy payments to the biggest farms, a seemingly progressive policy advocated by reformers. But farmers say it is easy to skirt the rule by dividing plots and registering the land to different owners.
Rajmund Fekete, a spokesman for Mr. Orban, said that Hungarian subsidy procedures “fully satisfy” European regulations but declined to answer specific questions about Mr. Angyan, or about land sales that benefited Mr. Orban’s relatives and allies.
“Hungary is also fully compliant in the sale of state land, which is regulated by law,” he said.
In Brussels, European officials were specifically warned about problems in Hungary even before the auctions. A May 2015 report, commissioned by the European Parliament, investigated land grabbing and cited “dubious land deals” in Hungary. The report even cited Mr. Orban’s home of Fejer County.
More broadly, the investigators found that wealthy, politically connected landowners had the power to annex land across Central and Eastern Europe. “This is particularly so when they conspire with government authorities,” the report said.
In Bulgaria, for example, land brokers had pushed for laws allowing them to effectively annex small farms.
Investigators pointed to the farm subsidy program as a major factor, saying it encouraged companies to acquire more and more land.
“The C.A.P. in this sense has clearly failed to live up to its declared objectives,” said the report, which was prepared by the Amsterdam-based Transnational Institute.
In a written response, European agricultural officials denounced the findings as unreliable, and in bold letters declared that it was up to the countries’ leaders to set and enforce national land use policies.
That deference to national governments is a hallmark of the European Union. But it has left the bloc unable or unwilling to confront leaders who try to undermine its efforts, said Tomás García Azcárate, a longtime European agriculture official who now trains the Continent’s policymakers.
“The European Union has very limited instruments for dealing with gangster member states,” he said. “It’s true on policy, on agriculture, on immigration. It’s a real problem.”
As Mr. Orban’s government began auctioning off thousands of acres to his allies, Mr. Angyan began his own project. Out of government, he meticulously studied the land sales, compiling a record that officials could not easily purge. He interviewed farmers who had been abandoned by the government and mapped political connections among the buyers — findings now supported by the Times analysis.
Beyond the biggest oligarchs like Mr. Meszaros, other supporters and sympathizers of Mr. Orban got blocks of public land.
In Csongrad County, for example, family members and associates of Janos Lazar, a Fidesz lawmaker, were among the biggest buyers, obtaining about 1,300 acres. In Bacs-Kiskun County, associates and family members of a former business partner of Mr. Meszaros bought big chunks of land. And in Jasz-Nagykun-Szolnok County, associates and relatives of current and former Orban government officials were among the biggest winners in the land auctions. Many have since leased the plots, with a markup, to big agricultural firms that receive European subsidies.
“This is what the European Union resources do, and the revenues from the land do,” said Mihaly Borbiro, a former mayor of Obarok, a tiny village in Fejer County, a short drive from Mr. Orban’s hometown.
While political patrons get rich, many small farmers count on the subsidies to survive. That discourages them from criticizing the system too loudly, many of the farmers said, especially in the face of retribution.
Ferenc Gal, who raises cows, alfalfa and a few pigs on his family farm, said he applied to lease about 320 acres because the European subsidies alone would have made it profitable before he even planted anything. Local farmers were supposed to get preference, but the land went to wealthy out-of-town investors.
When he complained, he quickly found himself a pariah. He said government inspectors showed up at his farm, suddenly concerned about environmental and water quality. He said local officials told him not to bother applying for future rural grants.
“Once you’re on a black list,” Mr. Gal said, “that’s it.”
A Policy of Fear
Retribution also found Jozsef Angyan.
Months after he quit the cabinet, government officials retracted the lease on Kishantos, the organic farm he had helped operate for 20 years. They gave the land to political loyalists, who plowed over the fields and sprayed the cropland with chemicals.
Then school officials shuttered Mr. Angyan’s department at Szent Istvan University, destroying his legacy.
“Orban understands when to keep people in fear,” Mr. Angyan said.
In interviews in Hungary, some agricultural scientists and economists refused to discuss land ownership or asked to not be identified when discussing their research. Farmers, too, saw what happened to the man who spoke up for them.
“If Angyan can’t do anything, what can I do?” said Mr. Teichel, the family farmer near Mr. Orban’s hometown.
Mr. Orban’s control of the European subsidies helps prevent another rural uprising, Mr. Angyan said. As long as the government administers the grants, nobody can afford to speak up. “If you’re critical of the system,” he said, “you get nothing.”
Besides, he added, there is no real opposition in the countryside. Mr. Angyan’s small farmers’ association forged an alliance with Mr. Orban’s far-right party to get the prime minister re-elected. That relationship has outlasted Mr. Angyan, and those in charge of the farming group now hold powerful government positions.
Mr. Angyan has receded from public life. This year, he met twice with The Times, providing the data he had been compiling.
After the second meeting, Mr. Angyan stopped returning phone calls.
When Mr. Teichel saw him recently at a funeral, he looked defeated. “He’s given up the fight,” Mr. Teichel said. As usual, Mr. Angyan asked how the farmer and his family were doing.
“I don’t matter,” Mr. Teichel replied. “I’m just a soldier. How are you doing? You are the general.”
Mr. Angyan replied: “How should I continue when nobody is behind me?”
One of Wisconsin’s largest dairy groups says it still doesn’t trust the state’s agriculture department or its plans for dairymen in the state.
The Wisconsin Dairy Alliance on Monday said it is not enough that the Wisconsin Department of Agriculture Trade & Consumer Protection is delaying a vote on siting rules that would change how local governments control farmland. The Dairy Alliance wants the proposed rules killed.
“These proposed changes would have a devastating impact on the struggling dairy industry in Wisconsin and we urge the DATCP Board to reject them at their meeting on Thursday, November 7th,” WDA President Cindy Leitner said. “The dairy industry has been sounding the alarm bells on these rule revisions for months, and DATCP simply ignored us.”
The proposed rules, officially known as changes to ATCP 51, would have local governments give more emphasis to environmental concerns during the siting process for farm expansion, and require farmers to put any manure collection facilities further away from roads or neighbors.
On Friday, the DATCP announced it would not be voting on the rules at this Thursday’s meeting.
“We listened intently to input from the public and industry stakeholders on this rule. The DATCP Board has also showed strong interest in this topic, and we appreciate their willingness to move ahead on the public engagement process,” acting DATCP Secretary Brad Pfaff said in a statement. “Since holding public hearings earlier this year, the department has held ongoing, constructive meetings with stakeholders on this complex rule. Given the tremendous importance of our dairy and livestock industries to the state of Wisconsin, we’ve decided to take more time to continue these discussions.”
But opponents of the plan don’t want more time. They want the clock to stop on the proposal.
State Rep. Gary Tauchen, R-Bonduel, said farmers and dairymen across Wisconsin have been clear for months, and will be clear in the future, they don’t want the rules to change.
“[This] announcement on ATCP 51 provides the Department an opportunity to listen to and collaborate with farmers, agricultural leaders and stakeholders,” Tauchen said. “I strongly encourage DATCP to consider and adopt input to find a final product that will truly encourage, as originally intended, ‘growth and viability of animal agriculture in this state,’ but remains ‘protective of public health’.”
Leitner is going even further. She wrote in an open letter that DATCP has been paying lip service to “listening” without addressing the volume of issues in the rule identified by the collective Ag groups in the state.
“Why should the dairy industry trust DATCP to listen now when they haven’t been listening to us throughout this process?” Leitner asked. “It’s time for the DATCP Board to reject ATCP 51 revisions!”
The DATCP is not saying when regulators may act on ATCP 51.
Morris Heitman knows the risk of flood and farming river bottomland. His family farmed there for more than 140 years.
Flooding that began March 16 remains. Floodwaters stayed longer than they did in 1984, 1993, 2010 and 2011, Heitman says. There is no end in sight.
It is harvest time and there are no crops to harvest. The Missouri River, which remains 6 feet over flood stage, covers most of Heitman’s farmland.
He says 60,000 acres of land in Holt County flooded this spring. He can’t recall a year when crops went unplanted. This is that year for many.
Things do not bode well for 2020 either. University of Missouri Extension agricultural engineering specialist Jim Crawford says there is a 50-50 chance to plant on bottomland next year. Dams in North Dakota and South Dakota remain full, and elevated river levels in Missouri will continue through December.
Traveling between work and home has become a struggle for northwestern Missouri residents. As waters started to recede, rain returned the first week of October, and the U.S. Army Corps of Engineers continued to release northern floodwaters.
Sections of key roads and highways remain closed. Floodwaters ebbed and flowed all summer. Some residents had to leave their homes several times to avoid being stranded.
“We are still nervous and will be for a couple of years,” Crawford says.
Farmland remains in peril because repairing levees takes time and requires cooperation among multiple agencies. Crawford says workers closed the northern breach in late August and water receded some in the northern half of Holt County. It may be next year before workers can plug levees in the county’s southern end.
Current repairs will allow levees to protect against 25-year floods. Restoring levees to withstand 100-year floods will wait until at least spring 2020, depending on the weather.
Atchison County farmers reported 55,971 prevented-planting acres to USDA’s Farm Service Agency. This represents 18% of the county’s cropland. Holt County farmers reported about 60,000 prevented-planting acres. Overall, Missouri ranked fourth in the nation in prevented-planting acres, according to FSA.
At the peak of flooding, water covered 85,000 acres in Atchison County. Crawford estimates about 30,000 of those acres are still underwater. “It has been and will continue to be a long process,” he says.
Damage appears to be worse and longer-lasting compared to previous floods, says MU Extension agronomist Wayne Flanary. Sand and debris need to be removed before planting can begin next year.
Flanary offers moral support for now, but his real work begins when farmers seek research-based guidance on nutrient management and crop management. Likely topics include fallow field syndrome, soybean inoculants and tilling methods.
In 2011, the National Oceanic and Atmospheric Administration was able to alert residents two weeks ahead of flooding. Flanary says area property owners received one day’s notice this year when levees broke and water gushed.
Emergency officials ordered the town’s 250 residents to evacuate after May rains. “It went into Craig like it was going for lunch,” Heitman says.
Farmers scrambled to move livestock and equipment to higher ground. They hauled grain stored in bins as fast as they could find trucks and laborers.
Some farmers, like brothers David and Eddie Drewes, had to choose between saving livestock or machinery. Their sons moved animals through mud to higher ground while the dads made makeshift levees and piled sandbags around grain bins. On March 16, as floodwaters rose, David had to evacuate the family to safety on a sprayer.
A neighbor of the Drewes, Welton Haer, a Korean War veteran, stayed in a local motel to avoid entrapment. He moved back when he thought it was safe. Floodwaters from early October rains then surrounded his home.
Heitman’s land lies in Holt County where the Mill Creek and Big Tarkio levees broke. Mill Creek and the Big Tarkio River are Missouri River tributaries. The Mill Creek breach was 81 feet deep; the one at Big Tarkio was 51 feet. The scour hole was nearly 28 acres.
In Holt County, a mishmash of 17 individual levee districts makes securing funds for repairs complicated and time-consuming.
The Federal Emergency Management Agency, the Army Corps of Engineers, the state of Missouri and the USDA Natural Resources Conservation Service all work to repair levees.
“We’re trying to dance with four different agencies,” Heitman said. “All these agencies have their own requirements and parameters, and we’re trying to coordinate those to build a secure system against the river.”
Repairs mean protection as well as relief from high crop insurance rates.
“Earthen levees are not built to withstand three months of water,” he said. Even after temporary repairs, seep waters strip nitrogen from the soil.
A nonstop caravan of trucks hauls rocks to fortify levees, railroad embankments and roads. The town bustles with construction workers while farmers reluctantly sit idle at the coffee shop and wait for next year.
Once a hot topic, the flood rarely gets mentioned, Heitman says. “It’s the 800-pound gorilla in the room that no one wants to talk about.”
Until floodwaters recede, the full extent of Mother Nature’s damage will remain unknown. It is a game of wait-and-see for resilient farmers with a can-do spirit.
“The frustration is that people want to do something,” Heitman says. “You can’t do anything. You just wait and get out of the way. Things work out. They always have.”
In April 2019, the American Simmental Association (ASA) and Holstein Association USA (HAUSA) announced the formation of the HOLSimTM branded beef program that identifies elite SimAngusTM bulls with specific production attributes as mating solutions for dairy producers who breed some of their herd to beef.
Today the ASA and HAUSA are happy to present to you the new Top Ranking HOLSimTM Qualified November 1, 2019 Bull List. Attached is the list of 253 bulls that rank highest on the new HOLSimTM List.
We are also happy to provide you with the expanded list of HOLSim sires whose offspring qualify for the HOLSimTM American Beef Program. The bulls on this list include all of the bulls that were on the original HOLSimTM Index List published in April and the November HOLSim bulls.
The program’s objective is: to provide additional revenue to dairy producers through the production of value-added terminal calves; to offer new marketing avenues for progressive beef seedstock operations; and to offer a consistent supply of high-quality calves better situated to capture market premiums; and to deliver mating solutions for dairy farmers who breed some of their herd to beef.
Qualifying for the sire list is not easy, and bulls that do so represent an elite group of beef genetics. All bulls in the program will be required to include the HOLSim logo in all marketing and promotional material.
“The bulls must be homozygous black, homozygous polled, have a minimum birth weight accuracy of .4, and meet a minimum threshold in the HOLSim Index,” according to Chip Kemp, ASA Director of Commercial and Industry Operations.
The HOLSim Index uses the IGS Feeder Profit CalculatorTM (FPC), the industry leader in feeder cattle evaluation, as the foundation for this effort.
The results from the FPC are then adjusted for the unique economic situations relevant to Holstein cattle, namely, the need for added calving ease, muscle conformation, grading ability and sensitivity to carcass length.
The program is underpinned by HAUSA’s industry-leading animal identification program, something that will add increasing value in the marketplace as consumers require more information about where their food comes from. Because dairy operations calve year-round, a continuous and steady supply of high-quality beef will be available to distributors, retailers and restaurateurs that have struggled historically with seasonal fluctuations of supplies.
To qualify for the program, all animals must have a Holstein dam identified through the Holstein Association USA and be sired by SimAngus bulls from the Qualified Bull Lists.
The HOLSim program is the first of its kind and offers dairy farmers a unique opportunity to build new profit centers.
“To my knowledge, this is the first time that a beef and a dairy breed association have collaborated to have a specific program to benefit both organizations and their respective members and industries,” John M. Meyer, Holstein Association USA Chief Executive Officer says.
Those wanting to learn more can visit simmental.org or holsteinusa.com, or contact Darin Johnson at 802.451.4048, or by email.
Waikato’s two sheep milk companies are starting to expand as more farmers look for alternatives to bovine dairy to lower their environmental footprint.
The growth comes as farmers are being put under increasing pressure to meet tough new regulations around water quality and carbon emissions. Both Maui Milk and Spring Sheep Dairy are holding open days over the next several days as they look to further showcase the industry to potential suppliers.
Spring Sheep Milk’s business manager Thomas Macdonald said they had signed up a supplier in Karaka, South Auckland who was milking 600 ewes on an outdoor farm system and had up to three more suppliers set to begin milking sheep next season.
After a Central Valley food plant uncovered thieves had been pilfering their cheese for years, a months-long probe ended in the arrest of two men accused of running an operation to sell the product across the state, sometimes even going door-to-door, officials said Wednesday.
An investigation was opened Aug. 22, after about $50,000 worth of cheese was stolen from the Leprino Foods Co. plant in Lemoore, according to a news release from Lemoore police.
Lemoore sits between Fresno and Bakersfield.
Leprino Foods is the world’s largest producer of mozzarella, with annual sales of more than $3 billion, according to Forbes.
Company officials estimated that their cheese had been targeted by thieves since 2017, but they didn’t know who could be behind it.
Police detectives determined the stolen product was being sold throughout Fresno, Tulare, Kings and Riverside counties via social media, door-to-door salesmen, on the street and various flea markets.
After identifying multiple people involved in the sales operation, authorities served search warrants in Tulare and Kings counties.
Evidence recovered — which included a large amount of stolen cheese — led police to identify 24-year-old Jairo Mariano Osorio Alvarez of Lemoore as a suspect.
After further investigation, detectives determined the cheese was coming from an inside source: Roderick Domingo Ransom, 34, of Lemoore, who works at the plant.
Alvarez was booked on suspicion of being in possession of stolen property, while Ransom was being held on suspicion of grand theft and embezzlement, officials said.
Authorities say they’re continuing to investigate the long-running theft ring.
Support from dairy checkoff food scientists has helped McDonald’s USA produce a reduced-sugar, low-fat chocolate milk that will be unveiled nationwide in January.
The new formulation has 25 percent less sugar than McDonald’s previous chocolate milk and is no longer a fat-free product.
Dairy Management Inc. (DMI), which manages the national dairy checkoff, has had a partnership with McDonald’s since 2009. DMI provided on-site support from food scientists and other resources and worked closely with the McDonald’s team to create the final product.
“Chocolate milk has been a longtime customer favorite at McDonald’s and U.S. dairy farmers are glad to see the chain roll out a great-tasting chocolate milk that has even more nutritional benefits than previously,” said Pennsylvania dairy farmer Marilyn Hershey, who serves as chair of DMI. “This is a great example of a foodservice leader listening and responding to customer demand. It also benefits dairy farmers because McDonald’s will offer an improved milk product to millions of customers, which could lead to similar changes at other restaurants.”
About Dairy Management Inc.
Dairy Management Inc.™ (DMI) is funded by America’s nearly 37,000 dairy farmers, as well as dairy importers. Created to help increase sales and demand for dairy products, DMI and its related organizations work to increase demand for dairy through research, education and innovation, and to maintain confidence in dairy foods, farms and businesses. DMI manages National Dairy Council and the American Dairy Association, and founded the U.S. Dairy Export Council, and the Innovation Center for U.S. Dairy.
Welcome to the Pulse of the Prairies! The Saskatchewan members of Holstein Canada will be hosting the 2020 Holstein Convention and Annual General Meeting in Regina, SK from April 15-18, 2020!
From Keith Flaman, Chairman of the 2020 National Holstein Convention:
“In planning the 2020 Convention, the committee considered many ideas to ensure visitors take home a taste of Saskatchewan. This year, the festivities will begin in Saskatoon, with an ice breaker Wednesday evening, followed by farm tours to Regina, and a show, all culminating with the AGM and Master Breeder Awards. Showcasing top of the line Holstein cows and dairy operations will present participants with insight into dairying on the prairies. The tours and experiencing Saskatchewan produced food and drink will provide a taste of life as a flatlander.”
“We look forward to seeing you in our province. Saskatchewan has hosted two previous conventions, the first in 1992 and again in 2005. The industry has evolved to fewer and larger farms, as it has throughout the world. This is an exciting time, many of the farms have transitioned to the next generation and you will have the opportunity to meet the current stewards of the industry.”
USDA currently projects farm income in 2019 to reach $88 billion – the highest net farm income since 2014’s $92 billion, but still 29% below 2013’s record high. In addition, nearly 40% of that income – some $33 billion in total — is related to trade assistance, disaster assistance, the farm bill and insurance indemnities and has yet to be fully received by farmers and ranchers (Is Farm Income Really Up?).
Moreover, farm debt in 2019 is projected to be a record-high $416 billion, with $257 billion in real estate debt and $159 billion in non-real estate debt. The repayment terms on this debt, according to data from the Kansas City Federal Reserve, reached all-time highs for a variety of categories. All non-real estate loans saw an average maturity of 15.4 months, feeder livestock had an average maturity period of 13 months, other livestock had a maturity period of 18 months and other operating expenses, i.e., loans primarily for crop production expenses and the care of feeding livestock, had an average maturity period of 11.5 months – all record highs. Put simply, farmers are taking longer to service their debt – a trend made easier due to historically low interest rates.
Chapter 12 Bankruptcy by State
With record-high debt, and more farmers extending their repayment terms, it should come as no surprise that Chapter 12 farm bankruptcies remain elevated. Data from the U.S. Courts reveals that for the 12-month period ending September 2019, Chapter 12 farm bankruptcies totaled 580 filings, up 24% from the prior year and the highest level since 676 filings in 2011. For the third quarter of 2019, Chapter 12 bankruptcies decreased slightly to 160 filings, down 2% from the previous quarter.
Total bankruptcies filed by state vary significantly, from no bankruptcies in some states to more than 20 filings in others, as shown in Figure 2. Bankruptcy filings were the highest in Wisconsin at 48 filings, followed by 37 filings in Georgia, Nebraska and Kansas. Iowa, Kansas, Maryland, Minnesota, Nebraska, New Hampshire, South Dakota, Wisconsin and West Virginia all experienced Chapter 12 bankruptcy filings at or above 10-year highs.
As seen in Figure 3, the increase in farm bankruptcies was the highest in Oklahoma at 14, followed by Georgia at 12, California at 11 and Iowa and Kansas at 10 each. Oklahoma had the sharpest increase in bankruptcy filings, increasing from two filings last year to 17 during the previous 12 months.
Chapter 12 Bankruptcies by Region
All regions of the U.S. saw higher bankruptcy rates over the previous 12 months compared to the prior year. More than 40% of the farm bankruptcies, 255, were in the 13-state Midwest region. Bankruptcies in the Midwest were up 13% compared to prior-year levels and were at the highest level in more than a decade. Following the Midwest, the Southeast had 118 Chapter 12 bankruptcies over the past year, representing an increase of 31% compared to year-ago levels. Figure 4 highlights Chapter 12 bankruptcy filings by region and the year-over-year change.
Chapter 12 farm bankruptcies continue to increase as farmers and ranchers struggle with a prolonged downturn in the farm economy that’s been made worse by unfair retaliatory tariffs on U.S. agriculture as well as two consecutive years of adverse planting, growing and harvesting conditions. Over the prior 12 months, Chapter 12 bankruptcies totaled 580 filings and were up 24% from the previous 12 months.
While filings remain well below the historical highs experienced in the 1980s, the trend is a concern. The support provided to farmers in 2018 and 2019 is expected to alleviate some of the financial stress, however, not all farmers will benefit from trade assistance, farm bill programs, crop insurance or disaster aid. As a result, it could take some time for the financial relief to manifest in the farm bankruptcy trends. Chapter 12 bankruptcies in the third quarter of 2019 were down only slightly, 2%, from the previous quarter.
It took Kevin Ellis more than two years to navigate China’s trade barriers and win approval to export $25 million worth of dairy products from Central New York to the world’s most populous nation.
His persistence paid off in June 2018 when China allowed Cayuga Milk Ingredients — a $101 million milk processing plant on the edge of Auburn — to send its first two shipping containers of skim milk powder to Shanghai.
But before the cargo ship arrived, the trade war President Donald Trump started with China hit home in Central New York: The Chinese announced they would impose retaliatory tariffs of 25% to 40% on U.S. dairy exports.
“When the tariffs went in place, we actually had our first shipment on the water,” said Ellis, chief executive officer of Cayuga Milk Ingredients.
“To go from New York to Shanghai is about 32 days, so we were able to clear the goods before the tariffs hit,” Ellis said. “But there wasn’t a repeat order because the tariffs basically made our product uncompetitive.”
Now the company, stung by the loss from China and uncertainty the trade war has caused in the global dairy industry, has decided to delay the centerpiece of a planned $89 million expansion.
The expansion would increase production at Cayuga Milk Ingredients by 35%, creating up to 80 new jobs, Ellis said. The company had planned to buy an extra 700,000 pounds of milk per day from local farmers.
The setback is the latest example of the toll the U.S. trade war in China is taking on Upstate New York.
As the international battle continues with no end in sight, the impact has trickled down from big corporations to small businesses and family farmers who are increasingly dependent on the global economy.
At Cayuga Milk Ingredients, the decision to delay the expansion will affect some 28 farmers at 30 locations across Central New York who are counting on new export markets to keep their farms in business.
The lost opportunity comes at a time when Upstate New York dairy farmers are fighting for survival.
Overall, the state had about 2,100 fewer farms in the latest census, the largest drop in more than two decades, according to the New York Farm Bureau.
With no end in sight to the trade war between the U.S. and China (the world’s two largest economies), some already struggling farmers may see little reason to stay in business, said Lauren Williams, associate director of national affairs for the New York Farm Bureau.
“I think it doesn’t help when the outlook doesn’t look bright,” Williams said.
Trump has slapped tariffs on about $550 billion worth of Chinese imports since July 2018, attempting to force structural changes in China’s state-directed economy and address unfair trade advantages.
The Chinese responded with about $90 billion in retaliatory tariffs on American goods sold to customers in China, including American dairy products.
Before the start of the trade war, China bought about $24 billion worth of food and agricultural products from the U.S. each year.
The two sides declared a truce on new tariffs this month after trade negotiations in which China agreed to increase its purchases of American farm products. The Trump administration did not disclose details on the timeline, price or products that would be included in an interim deal.
Back in Central New York, the uncertainty is starting to wear on farmers like Kelly O’Hara, whose family’s Oakwood Dairy sprawls across 4,000 acres in the towns of Aurelius and Springport in Cayuga County.
O’Hara is one of the 28 farmers who own a piece of neighboring Cayuga Milk Ingredients. He’s the second largest shareholder of the company with a 15% stake.
“We’ve been successful with operations, but we’ve kind of been the victim of global markets and politics,” said O’Hara, who employs 35 people on a farm with 2,000 cows and 1,800 replacements.
“All of these retaliatory tariffs have affected our price of milk,” O’Hara said. “We saw a reduction about five or six months ago when they announced the next level of tariffs.”
The 9% decrease in milk prices was the latest blow as dairy farmers cope with a third consecutive year of depressed milk prices, O’Hara said.
Price supports from the federal government don’t even begin to make up for the losses. After futures prices for milk dropped by $1.30 per hundred weight this year, the USDA agreed to make up only 16 cents per hundred weight on a small percentage of O’Hara’s milk.
“The government price supports have not even been able to cover 10% of our losses and the effect that lower milk prices have on the farms,” O’Hara said. “So, we just try to get as efficient as possible, and cut costs where we can. But animals have to be fed and employees have to be paid.”
O’Hara said he has been forced to suspend capital investments on the farm and restrict purchases of new equipment.
“In turn, that’s less money in our local economy with equipment dealers and car dealers and other people we buy from,” he said.
To raise cash this summer, he decided to sell valuable timber from wood lots on his land for the first time in 20 years. But even the price of the timber he sells has declined because Chinese retaliatory tariffs have taken a toll on lumber companies that sell American hardwoods.
O’Hara sells his timber to Gutchess Lumber in Cortland, the subject of a separate story about the Chinese trade war reported last month by Syracuse.com | The Post-Standard. The company was forced to furlough or reduce hours for its 500 employees after China imposed retaliatory tariffs of 20% to 25% on U.S. hardwoods.
O’Hara, like many American dairy farmers, had counted on exports to China to make up for flat to sagging sales at home.
The trade war brought any growth to a grinding halt, according to the U.S. Dairy Export Council, a group that represents the trade interests of American dairy farmers.
When the Chinese retaliated against U.S. tariffs by imposing their own 25% tax on U.S. dairy imports in June 2018, it meant that American producers could no longer compete with other global dairy producers.
The cost of skim milk powder that Cayuga Milk Ingredients shipped to China increased from $2,200 per metric ton to $2,750 with the tax. The tariff is paid for by Chinese importers, who easily avoided it by buying from nations in the European Union and other countries.
Dairy exports from the U.S. to China plummeted by 48 percent from September 2018 through August 2019 as the full impact of the tariffs hit American dairy producers, said Alan Levitt, the council’s vice president of market analysis and communications.
“You had this huge growing market, the biggest import market in the world, buying more of what we make,” Levitt said. “Not only did we lose one of the top markets, but we lost the opportunity to grow with them.”
China, with a growing middle class of about 400 million people, has developed an increasing appetite for westernized diets that include more burgers and pizza and dairy products, Levitt said.
“It’s so unfortunate,” Levitt said of the lost opportunity for American dairy farmers. “Over the last two years, China has accounted for two-thirds of the growth in world trade. The sooner we can get this resolved, the better it is for exporters… In the short term, it’s been kind of devastating.”
Farmers from across the nation have shared their concerns with members of Congress and the Trump administration, Levitt said. But so far, the effort has made little difference.
“Unfortunately, in the U.S. it’s not dairy that’s driving the trade war,” he said. “We’re sort of collateral damage.”
Levitt said the dairy industry has depended on exports as part of its growth strategy for the last decade.
Ellis, the CEO of Cayuga Milk Ingredients, said local farmers had the same strategy when the plant opened in 2014, touted as a “miracle in a cornfield.” The farmer-owners viewed the plant as a way to open new markets and have more control over the profit they earn from their milk.
Today, the plant has $133.7 million in annual sales, employs 74 people and has an annual payroll of more than $5.8 million. The average employee wage is about $65,000 per year.
To keep the plant running at full capacity, Ellis said, he has been forced to become more flexible to adjust to changes in export markets. The company exports about 60% of its dairy products.
Ellis said he doesn’t want to experience a repeat of what happened with China, so he has set a new rule: The company won’t make more than 25% of its total sales to any one country, region or customer. Cayuga Milk Ingredients now exports to 77 countries around the world.
“I’m not going to live and die with one country,” Ellis explained.
If the trade war with China is resolved, he said, the company would add the planned ultra-high temperature pasteurization line. It would allow liquid milk to be packaged in sterile, hermetically-sealed packages that keep milk fresh for months, allowing for shipment overseas without refrigeration.
Ellis said his experience with the trade war has only solidified his view that American politicians have forgotten about people like him and the farmers he works with.
He voted in the 2016 election but left the presidential ballot line blank because he didn’t support Trump or Hillary Clinton.
Asked if he had any advice for President Trump about ending the trade war, Ellis said he understands why China’s trade practices are a concern. But he said “tweetstorms” from the president won’t resolve the issue.
“Knowing the Asian culture and Chinese culture like I do, the way the administration is going about is wrong,” Ellis said. “These people are all about saving face. They don’t take kindly to being publicly shamed.”
The company that makes dairy products under “The Collective” brand and its former directors have been fined almost half a million dollars for repeatedly failing to report positive listeria results.
Angus Allan, former director of Epicurean Dairy Limited, being sentenced today in the Waitakere District Court. Photo: RNZ / Jordan Bond
Epicurean Dairy Limited – whose products include yoghurt and ‘suckies’ marketed to children – and the company’s former general manager Angus Allan, pleaded guilty to a total of 10 charges of failing to report positive environmental listeria results when they appeared in the Waitakere District Court today.
The charges followed an investigation by the Ministry for Primary Industries.
The company was fined $369,000, and Allan was fined $54,000. Court costs of $80,000 were also imposed.
The company’s former operations manager Ilya Pyzhanhov was convicted and fined $60,000 after pleading guilty earlier this year to five charges of deliberately withholding positive environmental listeria results.
The MPI probe began after investigators were given credible information about the West Auckland company from a confidential informant.
MPI director of compliance Gary Orr said that from 2012 to 2016, the company deliberately and repeatedly failed to report positive listeria results that were taken from a floor at the company’s factory in Avondale. During this period, the company also falsified official related records.
He said a total of 190 positive listeria results went unreported during this time.
Some of the dairy products manufactured under The Collective brand. Photo: Supplied
“This was serious, systematic and sustained deception – there’s no other way to describe it,” Mr Orr said.
“The company was regularly audited to ensure its manufacturing environment was in accordance with regulatory requirements but it lied about what the true situation was.
“The part of the factory that was producing positive environmental listeria results was an area where the most stringent food safety requirements applied. It was where yogurt and cheese was being produced for human consumption.
“It’s clear that if the company had reported the positive results, there would’ve been significant costs associated with remedying the problem, which included replacing a cracked and unhygienic floor, as well as a halt to production due to the work that needed to be done.
Mr Orr said there was no excuse for this type of offending.
No product was affected and there were no consumer health impacts. Since the MPI investigation, the company has replaced the worn factory floor where the listeria was present.
The company continues to operate with no further issues, MPI said.
In a statement, Epicurean Dairy Limited apologised to the public, and said it understood there would be concern about the charges.
“We want to apologise and reassure everyone that food safety is a top priority for us and that no unsafe products [were] ever sold to the public,” the statement said.
“As soon as were informed of the misreporting we acted immediately. The factory manager who was responsible for this reporting left the business three years ago.”
Mr Allan left the court immediately after the sentence was handed down and did not comment to media.
However during sentencing his defence lawyer said Mr Allan had no direct knowledge of the offending, and that he was kept in the dark by former operations manager Ilya Pyzhanhov, who has already been sentenced and fined.
He said there were two occasions where Mr Allan became aware of the positive tests, and instructed staff to report them both times.
The lawyer said Mr Allan was “genuinely remorseful”, stating that his children and their friends eat the yoghurts, and he’s “horrified” something went wrong in the company that he built from the ground up and has invested in.
The statement went on: “We conducted a thorough independent investigation and made significant updates to our factory and processes. We have been working closely with MPI long before the misreporting instances and since. Together, we have undertaken a frequent testing and auditing programme and have now achieved MPI’s highest level rating possible for our quality systems (Level 5.1).
“It’s important to note that this investigation relates to reporting undertaken between October 2012 to August 2016. There have been no issues with non-reporting since then.”
The federation representing Quebec dairy producers accuses the nuns at the Virgin Mary of Consolatory monastery of selling milk products without a permit. But the nuns say they have just two cows, whose milk is only for their consumption.
Nuns living in a secluded monastery in the Laurentians, northwest of Montreal, were shocked to discover they’d been fined nearly $75,000 — over cows’ milk.
The Fédération des producteurs de lait du Québec (PLQ), the group representing Quebec dairy producers, accuse the Greek Orthodox nuns at the Virgin Mary of Consolatory monastery of selling milk products without a permit.
The monastery’s administrator, Sister Macrina, said the nuns only own two cows, Guernseys which produce milk for the nuns themselves and their visitors — milk that is not for sale.
“It’s not something we make business out of,” she said. “Mistakes happen, we’re human, but you can’t fine me for that.”
The nuns do make and sell goat milk products from the monastery, but that’s not the problem.
Sister Macrina said she has tried to get in touch with the dairy producers’ federation several times in the two years since the monastery got its cows to find out what its responsibilities are.
“For two years I’ve been making phone calls, asking questions, just to be enlightened about what the law is, because I know it’s quite regulated,” she said.
“For all this period of time, no one was communicating with me; no one was answering my phone calls. I was totally ignored.”
Sister Macrina said she finally spoke with someone from the federation who asked her about the number of cows at the monastery, what the nuns do with the milk, and how many litres the cows produce.
She said she doesn’t work directly with the cows, and as the call came as she was scrambling to make dinner, she got the information from one of the other nuns and gave the caller a figure.
“The next thing I see is, I open a letter and I see a fine of $75,000 that I received from the PLQ,” she said.
The letter states the monastery has produced more than 38,000 litres of milk without a quota, and that it had 10 days to pay its fine.
But Sister Macrina said she only saw the letter two days before the Aug. 29 deadline.
An unfair investigation, Sister Macrina says
She said the federation’s investigation was neither fair nor transparent: she did not know the phone call was being recorded, and she wasn’t prepared with answers to their questions.
The nuns do not keep a registry of their cow milk production because they consume what the cows produce.
“I understand the point of view of the PLQ,” she said. “I understand they’re doing their job to keep control of abuse or misuse of the system, and I totally agree with them. But if you want to do something like that, do it respectfully.”
She said the nuns would accept the fine if she thought it was merited.
“If we wanted to abuse the system, I wouldn’t have been calling them over two years’ time,” she said.
She said the 26-year-old monastery is already struggling to stay afloat, and it doesn’t even have facilities for the nuns to have their own rooms.
“If, God forbid, we have to pay this amount, it’s ruining the monastery,” she said. “It’s destroying everything we’ve been trying to do for 26 years.”
“We’re trying to build something — a heritage.”
Federation ‘has a legal mandate’ to fine nuns
PLQ spokesperson François Dumontier said the federation is just doing its job by fining the nuns. He said it has reason to believe the nuns have been commercializing the cow milk.
“The Quebec dairy producers have the mandate to apply the Quebec regulation on the milk marketing plan and on the dairy quota regulation,” he said. “We have a legal mandate to apply those regulations.”
He said quotas are critical to the supply management system and the collective marketing of Quebec dairy products.
Dumontier said he would not comment on the investigation into the monastery or what tipped his organization off that the nuns had been producing milk without a quota.
“Obviously, nobody is above the law, and those regulations need to be respected, so that is why action has been taken,” he said.
He also said he would not comment on the next steps, but said the federation has shown a willingness to negotiate with the nuns to help them comply with provincial regulations.
A Missouri farmer who played a role in the largest organic grain fraud scheme in U.S. history has been sentenced to nearly two years in federal prison.
John Burton became the 5th farmer to receive prison time in the “Field of Schemes” case on Monday, when he was sentenced by a federal judge in Cedar Rapids to 22 months behind bars.
Prosecutors said that Burton grew grain that he knew was not organic and sold it to Missouri farmer Randy Constant, knowing that Constant was going to market and sell it as organic.
Burton also worked for Constant, often spraying his fields with chemicals and fertilizers that are not allowed to be used on organic fields.
Constant is considered the mastermind of the $142 million fraud scheme, which tainted countless products that were marketed as organic. He died by suicide in August, weeks before he was to report to prison to begin serving a 10-year term.
Prosecution lifts lid on manager at an Auckland dairy factory who told staff to hide positive listeria results and risked damaging a vital NZ industry. Sam Hurley reports.
A top New Zealand dairy company has been ordered to pay nearly $450,000 after a former manager directed staff to conceal positive environmental listeria results for four years.
Details of the previously suppressed criminal prosecution can now be reported after court papers were released to the New Zealand Herald and the company, along with two of its ex-senior leaders, have been sentenced.
The Ministry for Primary Industries (MPI) charged Epicurean Dairy Limited (EDL), which trades as The Collective and markets a wide range of yogurt products in New Zealand and overseas.
The government department also prosecuted its former general manager and one of the company’s founding directors, Angus Allan, and Ilya Pyzhanov, a former operations manager and director.
The case came after MPI discovered EDL quality staff were directly told by Pyzhanov to not report positive environmental listeria results at the company’s Avondale factory, court documents released to the Herald reveal.
There were some 235 unreported positive results for listeria, which equated to one positive result a week for the entirety of the offending period between 2012 and 2016.
Despite no evidence suggesting any contaminated products were on the market for public consumption or affected any foreign markets, Pyzhanov’s practice facilitated the concealment of the positive listeria results.
EDL, which pleaded guilty to eight charges under the Animal Products Act, and Allan, who admitted two charges, were sentenced today in the Waitakere District Court.
The company was fined $369,000 and ordered to pay $80,000 in legal costs, while Allan was fined $54,000.
Pyzhanov, who was described as the architect of the offending at today’s sentencing, has already been convicted and fined $60,000.
He was fired from EDL in November 2016 when EDL was placed under notice by MPI and was also removed as a director of the company and ceased to hold any shares.
As operations manager, Pyzhanov was in charge of the production and quality-control teams, which reported to him. He was also on the company’s senior leadership team and the EDL board.
Because listeria is prevalent in the dairy industry, a rigorous testing and reporting regime is required under the Animal Products Act and EDL operated under a risk-management programme (RMP).
Allan, a chef with experience in business development focusing on food products, was listed as the “responsible person” of the RMP, while Pyzhanov was the “designated day-to-day” manager and responsible in Allan’s absence.
As general manager, Allan – also an EDL shareholder – was responsible for several teams and was the head of the senior leadership team and a member of the EDL board.
In August 2013, after receiving several positive results for listeria during the previous year – which were not reported – some staff requested a meeting with Allan as further positive results were detected.
They sought permission from Allan to report the positive results, which Allan agreed with, court papers read.
There are several species of listeria but only the bacterium listeria monocytogenes is considered harmful to humans and can cause serious infection, disease, harm pregnant women, and in a vulnerable person even result in death.
A positive result for listeria monocytogenes at EDL’s factory was reported on August 9, 2013 to the company’s regular auditor Eurofins New Zealand, which is a recognised agency and approved by MPI to conduct diary RMP audits.
EDL was told to take corrective actions, including placing product on hold.
However, from mid-2013, EDL staff under Pyzhanov’s direction had instructed the Eurofins lab to separate positive environmental listeria results from negative results and to also provide them separately.
On 32 occasions between June 20, 2013 and April 18, 2016 the quality team at EDL was supplied with certificates of analysis wherein the positive and negative results were recorded on separate certificates, court documents read.
This practice led to the concealment of the positive results, court papers read.
Between April 5, 2012 and August 29, 2016 EDL staff were notified by the Eurofins lab of at least 145 positive results for listeria monocytogenes and 90 positive results for environmental listerial innocua.
From June 20, 2013 to April 25, 2016 there were at least 82 positive results for environmental listeria monocytogenes from samples taken at the factory’s critical hygiene level.
The factory floor, court papers read, was initially believed to be the source of the listeria and was identified to Allan, Pyzhanov and EDL’s board in several reports and communications from 2013 to 2016.
They were told the floor needed replacing but it would have required EDL to halt its production.
During every audit from April 5, 2012 to April 30, 2016 EDL concealed all positive environmental listeria results at the direction of Pyzhanov, court papers read.
Only two results of listeria monocytogenes were reported in August 2013 at the instructions of Allan.
During one audit when EDL staff were asked why there were no sample results from a specific area of the factory they said they had run out of swabs.
Court documents show Pyzhanov knew listeria, including pathogenic listeria monocytogenes, was a recurring issue in EDL’s level-three area where yogurt and cheese was being produced.
In August 2016, a composite sample of yogurt and halloumi tested positive for listeria monocytogenes and was reported but the following month EDL withheld further positive environmental results.
During the following month, after a request by MPI, Pyzhanov purported to supply the government department with EDL’s previous 12 months of environmental listeria.
But he omitted all positive listeria results.
In October 2016, and at the direction of Pyzhanov, EDL also falsely said in a statement it had “achieved 8-day consecutive negative environmental results between 23rd to 30th September”.
It had in fact received positive results for listeria monocytogenes during that period.
In an interview with MPI investigators, Allan said he did not know the details of the process of pathogen swabbing and had no knowledge of positive results which were not being reported.
He also said he was unaware that documents were being falsified.
The court heard today an employment investigation had cleared Allan of any wrongdoing and pointed the finger at Pyzhanov.
The court heard Allan remains employed at EDL but in a creative role.
Pyzhanov, however, claimed he told Allan of the positive results but was instructed not to report them.
He said he believed the positive results were mainly from the factory floor and the company should have been reporting them.
Pyzhanov said he made inquiries and gained quotes to replace the floor but the request was denied every time. Court papers, however, show Pyzhanov’s claims are not supported by contemporaneous documentary evidence.
After MPI discovered the non-reporting breaches, EDL’s processing was closed for two to three weeks from November 2016.
In a statement to the Herald, EDL said it accepted there would be public concern about historical misreporting of listeria results at its factory.
“We want to apologise and reassure everyone that food safety is a top priority for us and that no unsafe products ever sold to the public,” the company said.
“As soon as were informed of the misreporting we acted immediately. The factory manager who was responsible for this reporting left the business three years ago.”
EDL said a “thorough independent investigation” was also conducted which led to significant updates to its factory and processes.
“We have been working closely with MPI long before the misreporting instances and since. Together, we have undertaken a frequent testing and auditing programme and have now achieved MPI’s highest level rating possible for our quality systems.”
Other steps EDL said it had taken included investing in all key areas where there may have been a source of contamination including building and plant upgrades, as well as new equipment.
New managers who are well-credentialed with extensive industry and quality control experience have also been appointed, EDL said.
The company assured the Herald there had been no non-reporting issues since August 2016.
The discovery of genes responsible for asexual reproduction in a tropical grass may reduce the environmental impacts of cattle farming.
The grass captures carbon, reduces gas emissions from soils, restores degraded land, and improves cattle health and productivity
Cattle are a mainstay for many smallholders but their farms are often on degraded lands, which increases cattle’s impact on the environment and lowers their production of milk and meat. Researchers at the International Center for Tropical Agriculture (CIAT) have shown that Brachiaria grass species can reduce greenhouse gas emissions from cattle and increase productivity – and breeding improved varieties can potentially augment the environmental and economic benefits.
But the breeding process is difficult, time-consuming and expensive. A breakthrough on Brachiaria’s complex genome may make breeding much more efficient, and potentially increase the speed with which new grasses begin benefiting cattle farmers and the environment.
Margaret Worthington, a geneticist at CIAT and the University of Arkansas, and colleagues created the first dense molecular map of B. humidicola, a robust and environmentally friendly forage grass. They also pinpointed the candidate genes for the plant’s asexual reproductive mechanism, which is a huge asset for plant breeders. The findings were published in January in BMC Genomics.
“The idea is to create a better crop with less time and less money and to get it out faster to farmers,” said Worthington. “By using this molecular marker, you increase the odds of finding that rare winner.”
Traditional plant-breeding methods for Brachiaria grasses involve one of two complex techniques. One is to grow the plant to seed, and to study the seeds under a microscope to determine if the plant reproduced asexually. The other involves excising the plant’s embryos and conducting a similar analysis. Both techniques require many weeks, significant funds and highly trained specialists.
Asexual reproduction through seed, called apomixis, is key for developing new crop varieties for widespread use. Crops that reproduce through apomixis conserve the same traits from one generation to the next, essentially locking in sought-after characteristics such as drought tolerance or high nutritional value. Plants that reproduce sexually do not reliably pass on desired traits to subsequent generations.
With this molecular marker, plant breeders can run a quick and inexpensive test when Brachiaria grasses are seedlings to identify whether they reproduce through apomixis. The results are available in a couple of weeks. This allows plant breeders to select only asexually reproductive plants for trials, allowing them to allocate more time and resources to plants that have the potential to produce new cultivars.
Brachiaria grasses have often been considered an “orphan crop,” due to a lack of investment in research, but their potential for making tropical farms more productive and better for the environment is well known among tropical forage specialists. One recent study found that B. humidicola was especially adept at reducing the nitrous oxide, a strong greenhouse gas, emitted from soil as result of cattle urine deposition. In addition, CIAT researchers have identified mechanisms that this tropical grass uses to efficiently acquire nutrients from soil.
Brachiaria breeders also value apomixis for smallholders in developing nations who have limited resources for investing in improving their farms. Improved grass varieties that produce sufficient quantities of trait-retaining seeds can eliminate the need to purchase new seeds for every planting, which is a potentially expensive barrier to adoption.
“This breakthrough allows for the acceleration of our breeding program for multiple traits, including the development of tropical forages that can help reduce greenhouse gas emissions and make farming more eco-efficient,” said Joe Tohme, a senior scientist at CIAT and study co-author.
“This discovery represents a milestone in the path toward developing mitigation technologies in the livestock production sector,” said Jacobo Arango, a study co-author who is an environmental biologist from CIAT and a Lead Author for the next Assessment Report on Climate Change Mitigation of the Intergovernmental Panel on Climate Change (IPCC).
The Cattle on Feed report provides monthly estimates of the number of cattle being fed for slaughter. For the report, USDA surveys feedlots of 1,000 head or more, as this represents 85% of all fed cattle. Cattle feeders provide data on inventory, placements, marketings and other disappearance.
The report showed a total inventory of 11.278 million head for the United States on October 1. This year-over-year decrease of 1.1% is right on the dot of analysts’ expectations, which also anticipated an average decrease of 1.1% in feedlot inventories.
While total inventories are an important component of the report, other key factors include placements (new animals being placed on feed) and marketings (animals being taken off feed and sold for slaughter). This report came out at a time of some uncertainty in the market, particularly in placements. In terms of placements this September, analysts predicted an average 1.5% increase from August 2018. However, there was a great degree of uncertainty in analysts’ expectations for the placement number, resulting in a very large range of a 4.9% decrease to an 7.6% increase. Placements in September totaled 2.093 million head, which is 2% above 2018 levels. The number of placements came in slightly above the average analyst forecast, but remained well within the large range. September’s number breaks the four-month streak of year-over-year declines in placements.
Many factors contributed to the uncertainty surrounding analysts’ estimates. Feeder and fed cattle prices have largely recovered since the August fire at Tyson’s packing plant, which some thought could mean the market was in a better place to pull more animals through the system. Drought conditions in key cow-calf regions in the U.S., as shown in Figure 2, are another key variable that could potentially impact placements. Drought across parts of Texas and the Southeast could have forced producers to pull animals off of pasture early to place on feed, which could have increased the number of feeder cattle on feed in the lighter weight categories. This report somewhat confirmed this theory, with larger increases in placements occurring in lighter weight classes year over year, as well as month over month, for the most part. Although, placements were up month-over-month in all weight classes. Month-over-month increases were highest in the 600-699 lbs category, coming in at an increase of 55,000 head.
Marketings in September were 1.738 million head, up 1.1% from a year ago, matching the average analyst expectation of a 1.1% increase.
Cooperatives Working Together (CWT) member cooperatives accepted eight offers of export assistance from CWT that helped them capture sales contracts for 952,397 pounds (432 metric tons) of Cheddar and Gouda cheese, and 224,872 pounds (102 metric tons) of cream cheese. The product is going to customers in Asia and Oceania. It will be delivered during the period from November 2019 through March 2020.
These contracts bring the year-to-date totals to 45.4 million pounds of American-type and Swiss cheeses, 277,782 pounds of anhydrous milkfat, 4.5 million pounds of butter (82% milkfat), 5.6 million pounds of cream cheese and 43.5 million pounds of whole milk powder. The products are going to 27 countries in six regions and are the equivalent of 888.9 million pounds of milk on a milkfat basis.
Assisting CWT members through the Export Assistance program positively affects all U.S. dairy farmers and dairy cooperatives by strengthening and maintaining the value of dairy products that directly impact the milk price. It does this by helping member cooperatives gain and maintain world market share for U.S dairy products. As a result, the program has significantly expanded total demand for U.S. dairy products and U.S. farm milk.
The amounts of dairy products and related milk volumes reflect current contracts for delivery, not completed export volumes. CWT pays export assistance to the bidders only when export and delivery of the product is verified by required documentation.
All dairy farmers and dairy cooperatives should invest in CWT. Membership information is available on the CWT website, www.cwt.coop.
The Cooperatives Working Together (CWT) Export Assistance program is funded by voluntary contributions from dairy cooperatives and individual dairy farmers. The money raised by their investment is being used to strengthen and stabilize the dairy farmers’ milk prices and margins. For more information about CWT, visit http://www.cwt.coop/
Once CUSMA comes into force, Dairy Farmers of Canada estimates that 8.4 per cent of Canada’s total milk market will be newly open to foreign producers.
When the federal government announced its $1.75-billion aid package to Canadian dairy farmers in this year’s federal budget, Gerrit Damsteegt breathed a sigh of relief, sort of.
Mr. Damsteegt grew up on a dairy farm in the Netherlands, but in 1986 moved to Nova Scotia to pursue his vocation in Canada. “The main reason I came wasn’t for the weather,” he says. “It was because of supply management.”
Canadian dairy production has been governed for decades by the supply management system, under which the country’s 11,000 dairy farmers purchase production quotas, and produce only as much milk as their quota permits. Imports of dairy products are limited, provided that domestic producers can meet demand, and prices that farmers receive for their products are set by provincial regulatory boards.
The system has been the subject of fierce debate for years. Detractors suggest it stifles free-market competition and inflates food prices for consumers; advocates say it ensures that Canadian producers aren’t flooded by cut-rate imports and they receive reliable, consistent prices for production – critical for long-range planning in a capital-intensive business.
The issue has been a persistent sticking point for the government during free-trade negotiations and, in recent years, Canada has opened part of its domestic market to foreign producers. The 2017 Canada-European Union Comprehensive Economic and Trade Agreement (CETA) doubled the amount of European access to the cheese market, and the 2018 Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) opened up 3.25 per cent of the overall dairy market. Once the Canada-U.S-Mexico Trade Agreement (CUSMA) comes into force, Dairy Farmers of Canada (DFC) estimates that 8.4 per cent of Canada’s total milk market will be newly open to foreign producers.
Hence this year’s aid package, to be doled out over eight years, and aimed at mitigating the effect of lost market share. By March 31, 2020, the first $345-million will be paid directly to farmers based on the value of their quota. (Details on how the remaining $1.4-billion will be distributed in future is still being negotiated between the federal government and DFC.)
“I want to stay positive,” Mr. Damsteegt says “so certainly I have to be very clear that these trade deals aren’t helping. Getting compensation will help, but it won’t replace that lost market share.”
That’s why many farmers are now taking a hard look at exactly what they’ll do with the compensation money coming their way. For many, it will mean making long-deferred investments, consolidating operations to save on costs, or improving their operations’ efficiency – all the better to position their farms for sale or family succession.
“What happens is when these trade deals are announced, people tend to pull back on improvements and investments to see what’s going to happen,” says David Wiens, Manitoba vice-president on DFC’s national board of directors. Mr. Wien believes that’s a recipe for decline given the pace of technological change in the agriculture sector and the wear-and-tear inherent to the business.
Mr. Wiens hopes the package will inject enough confidence into the sector to encourage more modernization and improvements. With his brother, Mr. Wiens operates a third-generation family farm, milking 220 cows. The investments he’s eyeing are largely focused on cutting labour costs and improving conditions for animals, which he explains is beneficial for their comfort and welfare, and boosts their milk production.
“On some farms investments will be things like footbaths or automated brushes that cows can use to groom themselves,” Mr. Wiens says, “or even rubber mats for walking around, and misters to cool the barn in summer.”
The catch is that the money offered in the first year – an estimated $28,000 for an 80-cow farm, the average size of a Canadian operation – is a relative drop in the bucket compared to the costs of the major improvements.
Holger Schwichtenberg milks about 170 cows in British Columbia’s Fraser Valley, east of Vancouver. This summer, the 58-year-old built a new barn and installed a robotic milking system. A study by University of Calgary researchers in 2017 found that farmers who switched to robotic milkers were able to increase their milking herds by about 10 per cent, and reduce the number of employees.
“This way I’m not always beholden to milking times,” Mr. Schwichtenberg says, “and it allows the animals to choose when they’re milked, and they’re not being poked and prodded. Instead, they come and go as they please.”
But only seven per cent of Canadian farms use robotic milkers, mainly because of the daunting cost.
Mr. Schwichtenberg’s upgrade was a once-in-a-generation investment, setting him back $3-million. He hopes the operating savings put the farm in a better position should fears about tighter margins come to pass. He points out, however, that his ability to make the investments was thanks less to government compensation and more to leveraging high land values in his region – not something every farmer can rely on.
In New Brunswick, farmer John Schenkels runs a 185-cow farm near Miramichi, in the province’s north. He’s planning to consolidate his farm with another, bringing the total to around 500 animals in one facility – an order of magnitude larger than the average Canadian milking herd of 80.
“We’ve spent a lot already, made the decision to get more efficient two years ago,” Mr. Schenkels says. “A new barn and robotics, so that investment’s been made. But we’ll have to look for more to drive our cost of production down.”
Mr. Schenkels describes the situation facing many farmers in his region as “expand or retire” and believes the loss of market share may tilt some producers in the latter direction. “I definitely think it’ll affect willingness for young people to get involved.”
That’s the situation facing Mr. Damsteegt, who, at 56, is exactly the median age of a typical Canadian farmer. He’s hoping to re-invest enough to prepare the farm for any of his own children – now in their teens and early 20s – who may want to take over. He’s eager to see what form the compensation takes in subsequent years and hopes the government is committed to helping ensure the industry will remain viable for future generations.
“[My children] do wonder, ‘where is it going to stop?’,” he says. “So it’s a concern, and they have lots of questions. But like anything in life, you have to be willing to take some risks.”
Major dairy-producing organizations around the world are challenging the European Union’s (EU) decision to disregard market realities and international trade standards by granting Denmark sole ownership of the generic name “havarti” cheese in Europe. With the EU’s publication of the decision yesterday, “havarti” will be granted a geographical indication (GI), even though the name “havarti” does not refer to any geographic region in Denmark, and most havarti cheese is produced outside of Denmark – including by Danish company Arla Foods in the United States. The move blocks any producer outside of Denmark from selling cheese by that name within the EU and will add “havarti” to the list of popular food names such as parmesan, feta and chorizo that the EU is attempting to monopolize in global trade.
“This is an egregious overstep that attempts to shut the door on competition from the many producers of havarti around the world – including within the EU itself,” said Jaime Castaneda, Executive Director of the Consortium for Common Food Names (CCFN). “And the fact that the Danes are making havarti in Wisconsin made with milk from Wisconsin cows calls into question the defining factor of GIs: that they are tied to a specific ‘geography’ or place,” said Castaneda.
Less than half of the world’s havarti is made within Denmark, according to CCFN estimates; other major producers include the United States and Canada, with additional production in Australia, New Zealand, and in other European nations such as Germany. (See infographic.)
Leading dairy associations from Argentina, Australia, New Zealand, Uruguay and the United States together with CCFN sent a letter to EU Commissioner for Trade Cecilia Malmström and EU Commissioner for Agriculture Phil Hogan expressing outrage at the EU’s disregard of established international standards and protocols for fair trade.
“Such an approval lays bare the fact that all too often the EU GI system is used not for legitimate intellectual property protection, but instead for barely concealed protectionism and economic gain,” the letter states.
Individual havarti producers are also expressing their disapproval. “We’ve been making havarti for many years, and our havarti has won numerous awards, including third place in the most recent World Championship Cheese Contest,” said Luke Buholzer, vice president of sales and fourth generation cheesemaker at Klondike Cheese, Monroe, Wis. “It’s outrageous, really, that anyone would claim to have sole ownership of this name.”
Another consideration is the history of the cheese itself, added Dominique Delugeau, Senior Vice President of Specialty Cheese and International Trade at Saputo Cheese USA Inc.
“Within Europe there have been many variations of havarti made. In fact, the true original smear rind Danish havarti for the most part has been replaced by a style of havarti for large-scale production. Why should this deserve a GI?” Delugeau said. “In addition, havarti has been produced in the U.S. for many years by talented cheesemakers. The name ‘havarti’ is clearly a generic term.”
CCFN and other organizations in the EU, Latin America and Oceania suggested that an acceptable, legitimate GI would include the geographic component of the name, such as “Danish Havarti”; this mirrors existing GIs such as “Orkney Scottish Island Cheddar”, a specialty type of cheddar cheese.
Havarti is one of 12 cheeses whose characteristics and manufacturing standards are registered in the Codex Alimentarius, whose Commission is one of the leading international standards-setting bodies and a centerpiece of the Joint FAO/WHO Food Standards Programme. The EU and Denmark actively participated in and approved of “havarti” in the Codex cheese standards, a process that clearly defines the method of production and generic name for those cheeses.
For the first time since 2000, Milking Shorthorns will parade on the shavings at the Royal Agricultural Winter Fair in Toronto. This year, the RAWF has invited dairy breeds who hold their National Shows elsewhere to participate in the Quality Seeds Supreme Dairy Championship on Saturday, November 9th. The Canadian Milking Shorthorn Society was keen to participate and we are happy to have both of our National Champions heading to Toronto next week to participate.
Our 2019 National Grand Champion is North Star Jacks Dorito VG-88 (4-4), owned by the Ashton Family of Port Perry, Ontario. Dorito was the 1st place Mature Cow and Grand Champion this year after placing multiple times in the top three in previous years, both as a heifer and a cow. Dorito was bred by the Pederson Family of Minnesota and was imported to Canada as a heifer. In third lactation, Dorito produced 8380 kgs of milk at 3.9% fat and 3.5% protein for BCAs of 279-273-302.
The 2019 National Show Junior Champion is Prinsville Bolero Stars, owned by Prinsville Dairy Farms of Bloomfield, Ontario. Stars was the 1st place Senior Yearling and comes from a cow family that includes two previous National Show Grand Champions, with her dam (Prinsville Pingerly Star VG-87-2y) named Reserve Grand Champion in 2017. Stars is sired by Rovin Bolero-EXP and her dam had a two year old record of 8003 kgs milk at 4.1% fat and 3.5% protein for BCAs of 331-334-352.
Special thanks go to our major sponsor, The Dairy Distillery, for their assistance in having Dorito and Stars attend the RAWF. The Dairy Distillery has a unique, dairy-based product that has garnered significant attention recently. According to Omid MacDonald of the Dairy Distillery, “in looking at normally wasted milk permeate, we saw an opportunity to create world class spirits to the benefit of dairy farmers and the environment. We’ve created a process that transforms milk permeate into delicious vodka we call Vodkow. Not only does Vodkow reduce waste, its takes half the amount of energy to produce compared to traditional vodkas. Vodkow is lactose and sugar free with a hint of sweetness and is remarkably smooth. It’s now available at in liquor stores across Ontario, Nova Scotia and Alberta.”
If you are headed to the Royal Agricultural Winter Fair in November, be sure to stop by our stalls in the barn to see our Champions and pick up some information on modern Canadian Milking Shorthorns. More information on the breed can be found at www.milkingshorthorn.ca.
The Holstein Young Breeders (HYB) Australian Exchange returns for a fourth year, with a passionate HYB member awarded the trip of a lifetime down under in January.
Boarding a flight to Australia in early January 2020 will be Catherine Bunting, a member of the Derbyshire HYB Club. Her love for the dairy industry and passion for cows developed during her studies in Agriculture at Newton Rigg College in 2015. Since starting a job with the Sterndale and Peak herds, her enthusiasm has grown further over the last year and she has enjoyed learning lots of new skills.
Catherine was announced as the winner of the HYB Australian Exchange at the All Breeds All Britain Calf Show in Peterborough on Sunday 20th October. On finding out that she had won the competition, Catherine said “I didn’t believe it when I heard my name read out. I have only just come down off cloud nine. In January I turn 21 and I couldn’t wish for a better birthday present.”
The month-long trip down under will see 20-year-old Catherine gain first-hand experience of its dairy industry. Her visit will include the National Dairy Youth Camp, staying on Holstein Australia member farms in three geographically diverse regions across two states (Victoria and South Australia), participating in the International Dairy Week (IDW) Youth Challenge and working with the Holstein Australia team at IDW. Catherine will also get to spend a day visiting Genetics Australia with a member of Holstein Australia. The trip is an all-expenses-paid adventure, completely funded by Holstein UK and Holstein Australia, and a once in a lifetime opportunity; a chance to gain knowledge and experience of other cultures. As part of the exchange, an Australian young breeder will come over to the UK in September to coincide with some of the UK’s leading dairy events, such as UK Dairy Day, the Dairy Show and the All Breeds All Britain Calf Show.
Catherine said, “I am looking forward to seeing the differences between UK and Australian dairy farming, although I am mostly looking forward to meeting new people and going to the Youth Camp where everyone has the same interests but in such a vast and differing industry.”
A relative newcomer to HYB events, Catherine has competed at two weekend rallies and has enjoyed making new friends and learning new skills such as linear judging. She has also become part of the Sterndale and Peak showing and prepping team so regularly helps with washing, clipping and halter breaking. Alongside developing these skills in Australia, Catherine is looking forward to learning about new cow families.
Catherine adds, “My particular interest is to find families that have great type and stature, have longevity with a good milk production but not necessarily the highest yield. I am also looking forward to making lifelong friends and contacts within the Australian dairy industry.”
Hannah Williams, Head of Events & Marketing at Holstein UK, commented, “HYB wishes Catherine an amazing trip of a life time down under. The Australian Exchange is a fantastic opportunity to see first-hand how the southern hemisphere dairy farming industry operates and the experience will be hugely beneficial – not only from a social and personal development point of view, but, most importantly, to develop breeding, husbandry, showmanship and dairy management skills. Seeing first-hand how Australian dairy farmers run their businesses and breed productive cattle, with different climates and production methods, is the best way to develop Catherine’s knowledge, skills and experience, which she can apply in practice on her return to the UK.”
Mike Carey, the owner of H.C. Dairy Farm, says there’s never been a more challenging to be a dairy farmer in Florida.
His farm is the only one left in Polk County, operating at 902 Walker Road, for more than 40 years.
During the height of production at the location, Carey said they had 850 cows producing 6,000 gallons of milk a day. Before the tornado hit, the cows were producing upwards of 1,600 gallons. The storm cut that number in half.
“Sometimes, you can love things, but you’d like to make a living at it,” Carey said.
The Oct. 18 tornado ripped through the heart of Carey’s farm. The storm killed six cows, but, another 12 were seriously injured. Carey’s heard of 120 now down to a little more than a hundred.
“We are probably gonna have to put them down,” Carey said. “They got cut from the flying debris and tin, things like that. This storm, thankfully, we didn’t have any buildings fall on them.”
Covered in dirt, sweat, and still cleaning debris, Carey worked the land until the sunset over the horizon. Another day on the farm, whose days might be numbered.
“I’ve worked all my life. Maybe, you know, I haven’t seen some of the United States; maybe I’d like to do that before something else happens,” Carey said with a smile. “Sometimes, you can love things, but you’d like to make a living at it.”
Inclement weather, global warming, poor milk sales, labor issues and tariffs on China are all hurting business, Carey said.
The stress caused by the tornado will hurt milk production for more than a year. Each cow brought in an estimated $12,600 in milk each year. The storm might claim a total of 18 cows seriously hindering production.
“My total damage is between $300,000 and $400,000,” Carey said.
Weeks before the tornado hit, Carey said his insurance provider dropped coverage.
Carey and his wife are now praying for a miracle and any help the community of Lakeland can provide.
USDA’s Animal Plant Health Inspection Service (APHIS) announced Friday (Oct. 25) it has suspended its plan to phase-in the use of electronic ID (RFID) tags for cattle and bison.
In April APHIS announced its plan for Animal Disease Traceability with a factsheet posted to its web site. The factsheet detailed USDA’s plan to transition to radio frequency identification (RFID) tags from metal ear tags for cattle and bison. Friday, October 25, USDA’s Animal and Plant Health Inspection Service (APHIS) removed a fact sheet on the issue from its website.
Here is a APHIS statement on its decision to pause the effort to incorporate RFID technology into animal disease traceability:
Last April, APHIS posted a factsheet to provide producers with information about the Agency’s guidelines and goals related to Animal Disease Traceability. Since the Factsheet was posted, APHIS has listened to the livestock industry’s feedback. In light of these comments and current Executive Branch policy, APHIS believes that we should revisit those guidelines. APHIS has removed the Factsheet from its Web site, as it is no longer representative of current agency policy.
Recent executive orders have highlighted the need for transparency and communication on the issues set forth in the Factsheet before placing any new requirements on American farmers and ranchers. See Executive Orders 13891 and 13892. Consistent with these orders, APHIS has decided not to implement the requirements outlined in the April 2019 Factsheet regarding the type of identification devices that USDA-APHIS will regard as official eartags and the dates by which they must be applied to cattle.
While the need to advance a robust joint Federal-State-Industry Animal Disease traceability (ADT) capability remains an important USDA-APHIS objective, we will take the time to reconsider the path forward and then make a new proposal, with ample opportunity for all stakeholders to comment.
As we undertake this reconsideration of whether or when to put new requirements in place, we will encourage the use of Radio Frequency Identification (RFID) devices through financial incentives that are also consistent with suggestions we have received from cow/calf producers and others. We continue to believe that RFID devices will provide the cattle industry with the best protection against the rapid spread of animal diseases, as well as meet the growing expectations of foreign and domestic buyers.
It is important to note that despite any future actions USDA-APHIS may take regarding official identification devices, the underlying ADT regulations apply only to sexually intact beef animals over 18 months of age moving in interstate commerce, cattle used for exhibition, rodeo and recreational events, and all dairy cattle. Those regulationspermit brands and tattoos as acceptable identification if the shipping andreceiving states agree.
USDA’s goals to enhance Animal Disease Traceability (ADT) have not changed; our aim is to:
Encourage the use of electronic identification for animals that move interstate under the current ADT regulation;
Enhance electronic sharing of basic animal disease traceability data;
Enhance the ability to track animals from birth to slaughter; and
Increase the use of electronic health certificates
OPINION: Kit Wykeham-Musgrave was 15 years old in 1914. He was serving aboard the British cruiser HMS Aboukir. Suddenly there was a massive explosion and the huge ship began to sink.
Kit jumped into the freezing water and was quickly rescued by the HMS Hogue. Standing on the deck dripping wet there was another explosion and the HMS Hogue began to sink.
So again he jumped into the water and swam free of the sinking ship. Luckily Kit was picked up by the HMS Cressy.
He had he just clambered aboard but the deck of the Cressy, when there was yet another explosion and the HMS Cressy, begins to sink.
Again Kit jumps into the water and swims away. This time he clung to a piece of driftwood until he was rescued by a Dutch fishing trawler.
Kit Wykeham-Musgrave had been sunk three times in the space of one hour.
Kit was either incredibly unlucky for been sunk three times or very lucky to have survived three sinkings. After all 1397 sailors died that morning.
These three giant cruisers had been sunk by the German U-boat U9. No one really thought these flimsy little craft were any threat. Not even the Germans thought their U-boats were that useful. The Royal Navy was more worried about the giant German destroyers.
But after September 22, 1914 everyone was well aware of the power of one small flimsy submarine.
Around 100 years earlier the Royal Navy came across another small insignificant piece of equipment, that everyone initially ignored. In the early 1800s, the Navy began switching from wind power to steam-powered ships.
Other than wind the only other way to propel a boat forward was with oars. The automated version of an oar is a circular paddle.
So these first steamships had giant paddles at the sides of the ship. Then someone invented the propeller.
But the Admiralty wouldn’t accept this small device could work. They ran trials and the propeller boat won every time. But the top brass was not convinced.
So in 1843, they took two identical steamships, one with paddles and one with a propeller and tied a cable between them. They conducted a ship version of the tug of war.
The ship with the propeller began towing the paddled powered ship backwards.
Now the Admiralty had seen it with their own eyes, and there was no longer any doubt that the small insignificant looking propeller was indeed superior.
Now I’m aware that this is supposed to be a column that resembles something agricultural. So I’ll alert you to a growing trend of farmers and micro-producers of milk popping up around the country in increasing numbers.
Farm Fresh South selling raw milk with a vending machine and home delivery in Southland. Further north Holy Cow and Windy Ridge selling pasteurised milk to Otago. Roan Farm just launched in Christchurch selling pasteurised milk, and Aylesbury Creamery have started home delivery of raw milk to Christchurch too.
There’s plenty in the North Island. Jess Hill’s Dreamview dairy in Raglan recently appeared on Country Calendar, Balaclava Milk in Northland have been going for a while. Jersey Girl Organics have been very successful & continue to grow around the North Island. Origin Earth in the Hawkes Bay is doing great things too.
There are many others too, but perhaps the best example of how these smaller businesses can have a dramatic impact on their local communities is Oaklands Milk in Nelson.
They’re a family-run dairy farm that dominates the cafe market in Nelson. With most cafes in the region using their milk in reusable glass bottles. They also have a network of vending machines around the region selling hundreds of litres of milk per day. Of course its all in reusable bottles too.
Imagine if 80 per cent of Auckland cafes used reusable containers like they do in Nelson. There are many reasons why this hasn’t happened yet, but it will change in time.
Just 10 years ago the plastic problem was not a priority in many peoples lives.
But that has changed, it’s a major concern of many New Zealanders according to Colmar Brunton’s recent research.
It’s possible we’re quite close to the point where it becomes clear to everyone that the solution to the plastic problem is the insignificant and fragile-looking small local producers.