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December 2014  Issue No. 425

Inside this months issue...

Transitioning from Dairy Producers’ Greatest Year … to Something Less (p. 1):

    Farm milk prices are following the same downwards track as recent months’ dairy commodity trends. Looking beyond 2015’s first quarter, The Milkweed isn’t about to push the panic button for 2015. Weather events and strong beef prices are major factors that make predicting dairy price beyond 2015’s first quarter a guessing game.

Export-Heavy West Coast Dairy Cooperatives: Big Inventory Losses, Members’ Checks Assessed (p. 1):
    In recent weeks, two major dairy cooperatives – California Dairies, Inc. and Northwest Dairy Assn. – have announced major deducts against members’ milk incomes. The deducts are to compensate for lost export sales and declining dairy inventory values.

October U.S. Dairy Exports Reflect Lower Values, Tough Competition (p. 2):
    USDA data on dairy export activity for October 2014 shows big declines for both butterfat and dairy protein powders. But cheese mostly held is own, compared to Oct. 2013 numbers. Strong price-cutting by global competitors is seen in the dairy protein powder sector.

U.N. Forced to Cut Syrian Refugees’ Food Aid (p. 2):
    Great demand for global food aid, coupled with scarce funds, has forced the United Nations to scale back December 2014 distribution of food vouchers for up to 1.7 million refugees from Syria’s Civil War who are in camps in neighboring countries.

November 2014 Class II Price $21.94 – Class IV at $18.21 (p. 2):
    In USDA’s latest monthly manufacture price announcement, farm milk values are tracking dairy commodity prices … down.

Managing Year-End & New Year Dairy Farm Business Decisions (p. 3):
    The Milkweed concludes its series on ideas for dairy farmers to legally minimize 2014 net income and push some expenses and income into the future.

U.S. Milk Powder & Cheese Exports to Mexico Often Price-Sensitive (p. 4):
    The Milkweed analyzes several years’ data for dairy exports to Mexico. We report that milk powder sales are sensitive to prices. Meanwhile, cheese exports ot Mexico through 2014’s first ten months were 51.6% higher than 2010’s numbers. (Note: Severe drought in Mexico in 2011 and 2012 cut back that nation’s milk output.)

Dairy Protein Powders Analysis (p. 4):
    We’re keeping a close watch on dairy protein powders. U.S. production of nonfat dry milk is up significantly, while Whole Milk Powder output is way down.

NMPF’s “FARM” Program Costs California Producers $1,000 Annually (p. 4):
    Holy cow! The FARM program – into which NMPF is trying to force many dairy farmers – costs $1,000 per year in California.

U.S. Dairy Industry Faces Key Global Challenges in 2015 (p. 5):
    Contributor Jim Eichstadt takes a close look at key areas of concern for dairy farmers in 2015. Many of those concerns focus on “free-trade” deals and USDA’s proposals to let in beef from Foot and Mouth Disease-infected nations such as Brazil and Argentina.

2014 Corn Harvest Lags in Wisconsin and Michigan (p. 6):
    SDA’s latest data shows that the corn harvest in dairy states such as Wisconsin and Michigan is way behind historic levels. A slow-maturing crop and wet, cold fall weather are the culprits.

Cheddar Price Drops, Cheese & Butter Demand & Inventories Good (p. 6):
    CME Cheddar prices have dropped in the past month. Butter prices are basically flat. Demand and inventories for both are in good shape for late 2014.

Judge OKs Northeast Antitrust “Fairness Hearing” for Jan. 29 (p. 7):
    A proposed preliminary settlement in the Northeast dairy antitrust case will be subjected to a “Fairness Hearing” in federal court in Burlington, Vermont on January 29, 2015. At issue: settlement of charges against Dairy Farmers of America and Dairy Marketing Services that the two illegally conspired to reduce competition and underpaid regional farmers’ milk values. Empire Specialty Cheese Start-up Delayed Again (p. 7): Writer Nate Wilson is bird-dogging a sketchy New Jersey-based Italian cheese company’s efforts to complete a new cheese plant in westernmost New York State. Well over a million dollars of taxpayer funds are committed to the project … if and when it gets off the ground.

Details of Simplified Employee Pension IRA (SEP-IRA) (p. 7):
    Tax accountant Ken Dundon (Corry, PA) briefly details one strategy to LEGALLY divert business income to a personal pension program. Pay attention to this one!

Immunocal® Contains Cell Health-Boosting Cysteine (a Whey Protein) (p. 8-9):
    Read our “Story of the Month” here.

Major Brands Accused to Turning Health Food into Junk Food (p. 9):
    The Cornucopia Institute has just published a long project that analyzes nutrition content, ingredients, and the healthfulness of over 100 yogurt products sold in the U.S. The full report is available at www.cornucopia.org)

El Nino and a North American Weather “Sandwich” (p. 10-11):
    Paris Reidhead puts on his old Air Force meteorologist’s hat and details what was behind the late November blasts of cold that nailed many areas of the U.S. – particularly the Midwest, Plains, Southeast, and Northeast. Interesting stuff … now that some folks have finally stopped shoveling and shivering.

Remembering John Bunting (p. 14):
    We reprint a memorial tribute to former colleague and friend John Bunting that was written by Paris Reidhead and appeared in November in Country Folks – a New York-based weekly farm paper.

Cysteine: junction of dairy, health & wellness (p. 15):
    Pete Hardin digs into how cysteine (a whey protein) can boost cellular health and combat some forms of cancer. Hardin poses the dairy industry’s possible capability to recover more cysteine from milk (and whey) as an important opportunity to spotlight the value of milk and dairy products in human health and wellness.

Overproduction of milk must be directly addressed (p. 15):
    As dairy commodity prices fall and inventories of dairy protein powders climb, Pete Hardin hit the nail on the head with comments that the signal needs to go out to dairy farmers that their marketers cannot wisely take all the milk that the farms want to produce. Hardin notes that beef prices offer a big tool to better align milk supplies with demand. Such decisions about saleable monthly milk volumes are best left determinations between producers and their milk buyers.

Fire Source at Empire Special Cheese HQ: “Illegal Hot Box (Smoker) (p. 16):
    Another “Story of the Month” … this item – complete with Fire Department pictures – is hilarious, except for the fact that this New Jersey company was selling cheese “smoked” by burning waste paper and cardboard in 55-gallon steel drums inside their plant. Read it here.

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