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March 2018 Issue No. 464

Inside this months issue …

OUR STORY OF THE MONTH (Click below on the blue title to read "the complete story"):

March Dairy Meetings Somber in Wisconsin (p. 5)


Mideast Milk Flooding Into Upper Midwest (p. 1)

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Trump’s Trade Policies: Risky for U.S. Farmers & Deteriorating (p. 1): 
What more needs to be said.

China’s January ’18 Dairy Import Tonnage Jumped 45% (p. 1):
China’s dairy import needs are climbing, due in part to a 9% decline in that nation’s farm milk output for 2017.

Jan-Feb.’18: NZ’s Drought Pulls Down Milk Solids by 5.85% (p. 2):
A serious drop in milk solids content of NZ’s milk supply started in December 2017 and continues at least through February 2018.

June 1 Deadline for “Revised” MPP-Dairy Sign Ups (p. 2):
USDA has announced details for the “new” MPP-Dairy program.  Farmers may sign up to participate by June 1.

Bounce Back: March Class III Price at $14.22/cwt. (+$0.82/cwt.) (p. 2): 
All manufacturing milk classes in USDA’s federal milk order program rose during March.  The all-important cheese milk price was $14.22/cwt.

“Double-Whammy” Hammering Dean Foods’ Prospects (p. 3):
As 100+ dairy farmers shipping milk to Dean Foods as “independents” count down that market’s ending on May 31, most of the “blame” for that situation has been placed on Walmart’s new fluid milk plant at Fort Wayne, Indiana.  But in a separate matter, the European owners of several East Coast supermarkets chains have informed Dean Foods that they’ll be seeking other suppliers of packaged fluid milk.  Two of those chains are Food Lion and Hannaford’s.

Fonterra’s Red Ink to Push Out CEO (p. 3):
A bad investment in a Chinese infant formula manufacturer and a huge liability for contaminated dairy proteins sold to Danone added up to a $348 net loss for Fonterra during the July-December 2017 period.  Fonterra’s CEO will depart.

Byrne Dairy (NY) Won’t Renew Local Co-op’s Contract (p. 3):
Byrne Dairy, based in Central New York State, has notified one of its milk suppliers – the Finger Lakes Milk Producers – that it will not renew contract negotiations at the end of 2018.

Plaintiffs’ Attorneys Sparring with DFA Over Disclosures in Northeast Case (p. 4): 
DFA doesn’t want to release data about top executives’ salaries and the profits generated by major subsidiaries.  That’s the take-away from a March 14, 2018 filing by plaintiff’s attorneys in the Sitts et al. v. DFA & DMS case now being aired in federal court in Burlington, Vermont.  To counter DFA’s claims that executives are not being spoiled at the expense of DFA’s member-farmers, plaintiffs’ attorneys quote descriptions of DFA’s new headquarters in Kansas.  Hilarious.

Chaos in Mid-East & Southeast Markets (p. 4):
Chaos reigns in the Mid-East and Southeast markets, as dairy farmers scramble to find new markets.

Pay-Out from Northeast Antitrust DFA/DMS Settlement Taking Time (p. 4): 
Class members of the Northeast antitrust settlement involving defendants DFA and DMS may see their checks by fall 2018.  Maybe …

Story of the Month (Click Above to view the PDF of the complete story):
March Dairy Meetings Somber in Wisconsin (p. 5):
The Milkweed’s editor-publisher attended two dairy meetings in Wisconsin in mid-March (before catching the flu).  Dairy farmers are scared about their futures.

At 20-Year Mark: DFA’s Audit Full of Same Old “Stuff” (p. 6):
Twenty years … and DFA’s financial audit is still full of bogus assets and laden with debt.  DFA members should know that their milk checks and equity are subordinated to the co-op’s creditors.

Excerpts from DFA’s Rick Smith’s March 13 Handwritten Letter to Members (p. 6):
When times are tough, DFA President/CEO Rick Smith likes to sent out a hand-written letter to members.  Times are tough.  Smith’s letter paints DFA as remarkably powerless to do anything about improving milk prices … three-plus years into the current milk price Drought.

FDA Inspectors Find Melamine in Dairy Imports from China (p. 6):
Why would any U.S. food processors import dairy ingredients from China?  Regardless, FDA inspectors in January 2018 found melamine-contaminated Buttermilk and Whey Protein Concentrate sent to the U.S. from China.

--Kappa Casein BB & A2 … Genetic Dynamic Duo Boosts Cheese Yields and Meets Consumer Demand (p. 7):
Writer Ken Rabas takes a long, insightful look at two emerging qualities for farm milk – Kappa Casein BB and A2 proteins.  Rabas finds a remarkable correlation in sires that have the Kappa Casein BB and A2 traits. Kappa Casein BB boosts cheese yields by 10%.

Alternate Marketers Emerging for A2 Products (p. 7):
Separate from The a2 Milk Company, two other dairy processors – Nestle and Mengniu – are unveiling their own consumer products containing only A2 dairy proteins.

Strong Chinese Business Volumes Building On Dairy Consumption (pages 8-9):
Writer Jan Shepel details the success of a Chinese businessman – Zhu Like.  Mr. Zhu has built a network of 1,000+ dairy stores in China’s “smaller” cities.  These stores are sort of like Starbuck’s stores, except that they sell milk and yogurt-based foods.  Zhu’s firm buys milk from 6,000 cows.    

Selling U.S. Dairy in China Means Building Relationships (p. 9):
Writer Jan Shepel details efforts by Wisconsin’s Ellsworth Creamery to develop markets for that co-op’s cheese and cheese curds in China.  The secret to marketing gains in China entails long-term, personal relationships.

Dairy Not (Yet) In Cross-Fire of U.S./China Trade War Threats (p. 9): 
So far, dairy products have not been specifically mentioned in the verbal sparring between China and the U.S. that threatens a trade war.  Why?  Maybe because China seriously needs more dairy imports to meet needs.

New Test from Iowa State Univ. Verifies Grass-fed Milk (p. 10-11):
Very interesting!  Writer Paris Reidhead describes a brand new lab test developed by Iowa State University’s Leopold Center for Sustainable Agriculture.  That test detects whether milk from cows comes from cows that have grazed on fresh forage.  This test, if widely applied on commercial basis, could go  long way towards answering questions about the integrity of “organic” mega-dairies.

Two Ships of “Organic” Grain Fail to Arrive at Stockton, CA (p. 11):
OFARM – the organic grain producers’ marketing agency – reports that two ships bearing cargoes of “organic” grain were due to unload at the Port of Stockton, California during the first week of March.  Neither of those ships has yet arrived.  One – from Argentina – eventually unloaded its cargo as “feed-grade wheat.”  The other ship – from Turkey – is moored in San Francisco By, going no where.  The owner of the cargo is objecting to USDA demands to test the cargo.
     Michigan Milk Producers Posts 9/30/17 Financial Results (p. 11):  After deducting almost $2.00/cwt. from member milk checks to cover marketing losses last year, Michigan Milk Producers Assn. managed to declare a “profit” for its fiscal year ending September 30, 2017.  MMPA’s membership is angry at the co-op’s failure to stem marketing losses.

NYS Dubiously Throwing Big $$$ at Dairy Processors (p. 12):
Writer Nate Wilson gives the sorry history of New York State Gov. Cuomo’s failed scheme to make NY the “yogurt capital of the world.”  State gov’t has sown big subsidies to expand milk production and dairy plant expansions – creating a mess as national yogurt consumption has slid backwards for the past three years!  Wilson digs into specific subsidies doled out to certain dairy plants.

Butter Prices Strengthen; Cheddar Prices Rising; Nonfat??? (p. 13): 
Pete Hardin covers the dairy commodity scene.  Commodity prices are rising, with butter in the lead.  Marketers have serious questions about recent increases of nonfat dry milk.

Dairy Livestock Markets All Down, $$$ Tight in Farm Country (p. 14):
Dairy livestock prices are in the tank.  Money is tight in dairy country.  Many farmers are looking to sell cattle in down-turned, buyers’ market.

Is this what “Industrialization” looks like??? (p. 15):
Pete Hardin takes a look at the financial mess known as the United States dairy industry.

Trade War threats – playing games with gasoline and matches (p. 15):
Agriculture is the guaranteed loser when it comes to “trade wars.”

NZ dairy exports in January 2018 up 12.8%, despite lower milk solids output for Dec.-Jan. (p. 15): 
Bigger exports and lower total dairy products manufactured last December-January mean New Zealand dairy marketers re drawing down their stockpiles.

Data Shows NZ’s Seasonal Milk Solids Production Declining Sharply (p. 16): 
We cite a monthly chart of New Zealand’s milk solids output, showing data from 2014-2017, as well as January and February 2018.  Bottom line: the Kiwis’ milk solids are depressed by drought and historic trends only show lower levels each month, until milk production starts picking up again in August.  Interesting to see the wide swings in New Zealand’s seasonal milk production patterns.

Researchers Claim Russians Fomenting Anti-GMO Attitudes (p. 16): 
What a bucket of bologna!  Two researchers from Iowa State University are claiming that Russians are helping spark attitudes in the United States that oppose genetically-modified organisms (GMOs).  Blaming the Russians for long-prevailing attitudes in this country that are skeptical of GMOs is pure bunk.


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