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November 2015  Issue No. 436

Inside this months issue …

Dairy Producers’ 2015 DMPP “Cost-Benefit Ratio” About 100:1 (p. 1):
    Our “Story of the Month” demonstrates how USDA’s new dairy farmer margin protection program is a scam. 
    Click Here.

White House Politics Behind Brazil Beef Imports Decision (p. 2):
   Our sources have explained how USDA’s decision to allow imports of beef from areas of Brazil and Argentina that are allegedly not infected with destructive Foot-and-Mouth Disease was a top-down White House dictate.

Oct. 2015 Class III Price at $1.46/Class IV Hits $16.43 (p. 2):
   Cheese milk prices declined for USDA’s October FMMO program.  But prices for Class IV (butter-powder) rose on the strength of better butter and nonfat dry milk prices.

Details of TPP Emerge as Agencies Sing Its Praises (p. 3):   
    Details of TPP Emerge as Agencies Sing Its Praises (p. 3): Writer Jan Shepel summarizes the early pronouncements from the administration regarding the impact of Trans Pacific Partnership (TPP) talks.  Behind these glowing reviews is the political reality that legislators in Washington, D.C. must study the details and then vote to pass the TPP.  Strong opposition exists.

Two Livestock Groups Say TPP Will ‘Devastate” U.S. Beef Producers (p. 3):
    The National Farmers Union and R-CALF USA have registered early opposition as some details of the Trans Pacific Partnership emerge.

Fonterra’s Members Should Be Running Scared (p. 4):
    What’s going on at Fonterra – New Zealand’s dairy behemoth?  In one year, Fonterra’s debt has soared by 1888% to $7.5 billion.  (That’s just over $700,000 per member for Fonterra’s 10,500 members.)  Fonterra has put some of its non-dairy farmer suppliers on notice that they’ll be paid on a 90-day basis.  New Zealand press reports that three-quarters of Fonterra’s dairy farmer members have taken out interest-free gov’t loans to help their cash flow.  Dairy is New Zealand’s biggest single industry and Fonterra’s financial stability is critical to that nation’s economy.

Kraft/Heinz Closing 3 NYS Plants, But Boosting Capacity at Lowville, NY (p. 4):
    Newly merged Kraft/Heinz is slashing operations and employees.  Three NYS dairy plants – at Avon, Campbell and Walton – are set to be closed, while Lowville will expand.  NYS politicians have intervened, gaining a Kraft/Heinz’ concession to keep plants open while searching for new owners. 

Tail-Docking Ban is Big News at NMPF Meeting (p. 4):
    The big news emanating from National Milk Producers’ recent annual meeting was a resolution banning tail-docking, starting in 2017.  In these times, is that the biggest issue the dairy co-op lobby can confront?

Behind the Scenes: USDA’s Critical Dairy Data Reporting Systems (p. 5):
   We visited Washington, D.C. and met with Mike Miller and Donnie Fike – the USDA staffers who oversee, respectively, the monthly Milk Production and Dairy Products reports.  We detail how these reports come together, from data collection at the state/regional level to scrutiny of data in Washington, D.C.  Dairy is blessed with data!

Teat Scrubber and Ozone Solutions Make Perfect Sense in Dairy Parlor (p. 6-7):
    Write/dairy farmer Jan Shepel reports on technologies marketed at World Dairy Expo last month.  An Italian company – Puli-sistems – has created a hand-held teat-scrubber.  And a Canadian dairyman is marketing an “Ozone Generator” that works in tandem with the teat scrubber to prep cows’ teats for milking with a scrubbing of warm water and ozone.  Ozone is a natural disinfectant/germicide that helps heal the skin.  Interesting!

Q&A With Eric Deeble, VMD: U.S. FMD Preparedness (p. 7):
    A veterinarian who is on staff with U.S. Senator Kirsten Gillibrand (D-NY) details the programs and funding sources that the federal government would kick in if a Foot-and-Mouth Disease outbreak hits the U.S.  Basically, to pay for costs of killing all livestock within designated radii from FMD infection sites, the federal government would have to borrow a lot of money.  Further, the only indemnification appears to be for loss of livestock.  Any crippling of rural economies or dairy-related businesses would not be covered by existing programs.

Reviewing Teat Dip Germicides (p. 7):
   Writer/dairy farmer Jan Shepel discusses issues concerning traditional bovine teat dips, such as iodine-based products.

Obreza Trucking Ties Together Farmers, Handlers … and Past to Present (p. 8-9):
    Writer Paris Reidhead visited the Richard OBreza Trucking, Inc. business near Mohawk, New York.  This well-run milk hauling firm picks up milk from 200 farmers in east-central New York State, serving a number of dairy marketing firms.  President Matt Obreza answers many questions in profiling the firm’s operations and philosophy.

Empire Specialty Cheese: Test Runs Soon.  Unpaid Property/School Taxes Loom (p. 9):
   Writer Nate Wilson revisits Empire Specialty Cheese’s belated attempts to start making cheese at a new plant in the western tip of New York State.  It appears that the firm is about to start “test runs” of product.  The firm owns is approaching the two-year mark for unpaid property and school taxes, and is about $90,000 in arrears.

Northeast (Particularly New York State) in Milk Marketing Chaos (p. 10):
    What a mess!  Following a spring/summer of “dumped” milk and dairy farmers losing their markets, the Northeast federal milk order features some farmers receiving prices way below the Statistical Uniform Price and one handler invariably late in its payments to producers.

Better Foods Require Better Milk (p. 11):
    Writer Ed Zimmerman offers his perspective on changing consumer food preferences that demand a new approach to food production and marketing … including dairy!  Interesting survey of food industry trends from this long-term food marketer.

WI’s Liberty Milk Failure Leaves a Big Mess (p. 11):
    In December 2014, the small Liberty Milk co-op in Wisconsin went into receivership and ceased business.  Court officials are trying to sort out the mess, which is compounded by lack of records.

Leader of USDA Organic Program Subject of Ethics Investigation (p. 12):
    Co-director of the Cornucopia Institute, Will Fantle, details allegations and formal complaints made against Miles McEvoy, head of USDA’s National Organics Board.  Allegations include McEvoy’s bending rules on approving synthetic substances in organic foods and intimidations of board members.

Past Month’s Prices: Butter Rebounds, Cheddar Flat, NFDM Drops (p. 13):
    Pete Hardin reviews the past month’s dairy commodity price and production/demand trends.  Butter is where the strength is in dairy commodities, despite the likely price drop around Thanksgiving.  Bet on butter in 2016.  Meanwhile, fortunes for nonfat dry milk and the rest of the dairy protein powder complex look bleak. 

NC Sale Averages $2,410/Head (Mostly Crossbreds) (p. 14):
    The Nov. 3 herd dispersal of Dean Ross in North Carolina brought surprising results.  Bidders drove up prices of these milk cows and bred heifers, paying top dollar (just over $2,400) per head.  Many of the animals were Holstein/Jersey crosses – which yielded a 3.95% butterfat test.  Dairy farmers are paying good money for good genetics that produce butterfat.

Animal Welfare: “Comply or Else” Dictates to Producers (p. 14):
    Dictates by some dairy groups are going too far.   In New York State, we’re hearing that DFA field staffers are telling producers they must join and follow the F.A.R.M. animal welfare protocols, or else those farmers could lose their milk markets.  That’s coercion.  In the Southeast, Dean Foods is telling producers they must keep record books listing drug treatments for individual cows.

CEO Gallagher Boasts DMI Created All McDonald’s Dairy Products (p. 14):
    What a phony blowhard!  Recent comments by Dairy Management, Inc.’s CEO Tom Gallagher claim that his organization is responsible for developing all dairy products sold at McDonald’s.

Brazilians tactics threaten U.S. food & beverage industries (p. 15):
    Pete Hardin goes after the Brazilian owners of Anheuser-Busch, Kraft/Heinz, and JBS, SA for their brutal tactics.  The Obama administration is allowing Brazilian interests to change the complexion of the U.S. food and beverage industries.

Proposal: 3 FMMOs, 2 classes of milk (p. 15):
    Pete Hardin laid out a simplified, common-sense proposal for future federal milk orders.  That proposal: 3 federal milk orders – one east and one west of the Continental Divide, plus Florida; 2 classes of farm milk (all but butter-powder in Class I, common butterfat value for both classes); no Class 1 pooling requirements; handlers pay half of documented hauling costs; no value for whey in formulas; component (protein, milk fat) pricing; component pricing; and mandatory payments schedules.

Move to Kansas?  This Kansas Dairy Farm Family Wants O-U-T! (p. 16):
    Meet Laurel and Tim Iwig.  They milk cows and operate a small dairy processing plant near Topeka, Kansas, supplying three dairy stores with fluid milk, ice cream and butter.  But since the Iwigs cannot market to the only farm milk buyer – DFA – extra milk, they’re forced to milk only about 35 cows.  Their business plan – with son Samuel studying dairy science and desiring to pursuing a career milking cows – won’t work.  So despite all the hoop-la about dairy farmers moving ot Kansas to help fill an intended new dairy plant at Garden City, the Iwigs want out.  They hope to move to Wisconsin, where they’ll welcome more than a single, dictatorial buyer for their milk. 

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