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November 2014  Issue No. 424

Inside this months issue...

Feature story: U.S. Dairy Exports Skid as Global Demand, Commodity Prices Cool (p. 1):
    Read our story of the month here.

CME Cheddar Prices: Up/Down, Up/Down (p. 1):
    The Cheddar price collapse on Nov. 11 was the second big down turn in the past month’s up/down, up/down cycle. The cheese industry is nervous about inventory values.

Alert: Dairy Farmers & Agribusinesses Must Urgently Contact Elected Officials Re: Section 179 Depreciation!!! (p. 2):
    Unless Congress takes action by year’s end, U.S. businesses (including agriculture) will be knocked back to a $25,000 annual depreciation election for qualified purchases. In 2013, that amount was $500,000. Betting is that Congress will at least somewhat boost that depreciation election. If things don’t change, dairy farmers face the specter of getting a big tax bill for 2014 – their best year ever.

Downtrend Starts: Class III Price $23.82 – Class IV at $21.36 (p. 2):
    The headline explains it all, regarding USDA’s Class III (cheese) milk and Class IV (butter-powder) milk for October 2014.

Whole Milk Powder Piling Up, NFDM Producers Unload at Cut-Rate Prices (p. 3):
    U.S. inventories of Whole Milk Powder were nearly 25 million lbs. as of Sept. 30, 2014. Those inventories are bulging. Meanwhile, nonfat dry milk processors moved a lot of milk powder by offering steep discounts in September.

Strategize 2014’s Year-End Business to Minimize Tax Man’s Bite (p. 3):
    Pete Hardin revisits the subject of advantageously reckoning 2014’s year-end financial strategies for dairy farmers.

NYS Yogurt Production in Big Decline, Counter to Politicians’ Boasts (p. 4):
    Using data from New York State’s agriculture department, The Milkweed shows that state’s yogurt production for the first half of 2014 was 13.6% below 2014’s first half. Don’t worry: Governor Andrew Cuomo recently announced a plan to boost yogurt sales … feeding yogurt to inmates in state prisons and correctional facilities!

DMI Announces Strategy to Reverse Fluid Milk Declines (p. 5):
    The nation’s dairy promotion “umbrella” group – Dairy Management, Inc. – recently announced a $500 million, multi-year strategy to boost fluid milk sales. Sounds impressive, but the strategic partners are actually few.

DMI’s Last Fluid Promo: Britney Spears Fiasco (p. 5):
    The last big DMI fluid milk promotion – more than a dozen years ago – it flopped. Using Britney Spears posters in schools (just as schools were closing for the summer) was a fiasco.

Corn and Soybean Crop Updates Nov. 2014 (p. 6):
    Contributor Jim Eichstadt reviews that latest data and trends in the grain markets.

U.S. Dairy Heifers Still Sailing to Russia (p. 6):
    Shiploads of U.S. dairy heifers continue to sail to Russia, despite Putin’s ban on food imports. Building its dairy industry is a key part of Russia’s strategy to boost that country’s food production.

Too Much Milk! Marketers Worried About Plant Access, Discounted Prices (p. 7):
    East of the Rockies, the current farm milk marketing picture is turning downright ugly, Pete Hardin reports. Already, excess loads are being priced at several dollars under prevailing monthly fmmo class levels. Uncertainty about dairy commodity prices leaves dairy plants leery about paying too much for farm milk supplies.

Let’s Turn Back the Clock with Barley and Corn (p. 8):
    Writer Paris Reidhead traces a 150-history of grain acreage in the U.S., and shows how barley has atrophied. Paris details the many attributes of that wondrous grain.

Q&A: Warren Taylor Interview (p. 9):
    More insights from Warren Taylor (Snowville Creamery, Pomeroy, OH) on strategies about feeding non-GMO crops to dairy animals.

Citizens Claim Wisconsin Failing Safe Water Drinking Act Oversight (p. 10):
    In late October, several environmental groups filed a petition with the U.S. Environmental Protection Agency regarding allegations that Wisconsin’s Department of Natural Resources is failing to uphold precepts of the federal Safe Water Drinking Act. Kewanee County, Wisconsin is “ground zero” for this battle, as locals charge that more than 30% of local wells are polluted by nitrates or bacteria associated with livestock.

Wisconsin’s “Milk uber Alles” Policies Leaving a Dirty Trail (p. 10):
    Pete Hardin reviews the dog-chasing-its-tail situation as Wisconsin state officials “grow” the milk supply because dairy plants don’t have enough milk. But the cheese plants’ capacity keeps growing. Water and air quality have been some of the victims in this scenario.

“Yo2Go” – New Concession Fare at NY State Fair (p. 11):
    For the first time, New York State dairy groups offered a “yogurt bar” at the State Fair last August. A modest start for an excellent idea! Read the details …

Weird Weather in the Works? (p. 11):
    Writer Paris Reidhead talks with experts about what many of us are discussing … the weather.

DFA Meeting in NYS: “FARM” Going Over Like a Pregnant Pole Vaulter (p. 12):
    A recent DFA meeting in New York State had farmer-members angry about being forced to contract with the “FARM” program that specifies rules about animal treatment and premises design. DFA – the biggest member of National Milk Producers Federation – is running into a hornet’s nest of opposition. NMPF’s leaders declared at a recent meeting that 100% of all dairy farmers shipping to marketers participating in FARM must be in the program.

Oct. CME Butter Prices Drop over $1.00/lb., Before Modest Rebound (p. 13):
    CME butter prices fell off their too-lofty perch in October. However, butter inventories remain reasonably good and domestic sales are solid.

DMPP Considerations Must Weigh Ever-Changing Price/Cost Realities (p. 14):
    Dairy farmers considering whether to participate in the new Dairy Margin Price Protection Program run by USDA have many, many factors to review before the December 5, 2014 deadline for 2015 sign-ups. Pete Hardin wades through some of these considerations.

More criticisms of FARM (p. 15):
    Pete Hardin gives both barrels (again) to NMPF’s FARM program. Why would dairy farmers sign a contract to allow a third party inspector to dictate animal treatment an premises design? Hardin wonders: when are dairy farmers going to tell do-gooders to “take a hike?”

John Bunting at Peace (p. 15):
    Our long-time dear colleague and friend, John Bunting, passed away in early November. Pete Hardin writes: “John Bunting was one of the most amazing persons I have ever known.” Amen.

Republicans in D.C. must now govern … or else (p. 15):
    Contributor Jim Eichstadt opines that Republican control of both elected bodies in Washington, D.C., the leadership mantle is on their shoulders and it’s time to lead after years of monkey-wrenching the cogs of government.

DFA’s Oakhurt Dairy Selling “100% Dairy Free” Almond Milk (p. 16):
    Gottcha! Pete Hardin smacks Dairy Farmers of America for a fluid milk subsidiaries selling “100% Dairy Free” Almond milk in Maine. Basically, DFA is saying, “Nuts to you” to its dairy farmer owners.

California’s 12 Biggest Reservoirs Await Fall-Winter Precipitation (p. 16):
    California is at the historic start of its “wet season.” After nearly three years of record drought, California’s snowpack and reservoir levels are very, very low.

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