May 2017 Issue No. 454

Inside this months issue …

Our story of the month:
“Secret” Canadian Class 7 Milk Price Formula Revealed!!! (p. 3):
Click Above for Story of the Month.

Adverse Weather Events Pounding Grain & Beef Producers (p. 1):   
     A variety of difficult weather events are making life difficult for the nation’s grain and beef producers – particularly in the heartlands.  Severe flooding has much of the country’s mid-section.  And import grain farming areas haven’t been flooded are facing cold, wet soils in mid-Spring.  Meanwhile, a devastating, late April blizzard killed thousands of beef animals in eastern Colorado and western Kansas.  That blizzard followed earlier wildfires that hurt cattle producers in Oklahoma and Kansas.  Bottom line: weather events that are hammering grain and beef producers have the potential to push up grain and beef prices – factors that will benefit dairy.

Several Signals Indicate Stronger Butter Prices Ahead (p. 2):
   U.S. butter prices are below world market levels.  That fact boosts export opportunities and slows imports.

Focus on Kraft-Heinz Milk Supply Contract at Lowville, NY (p. 2):
  On May 31, the farm milk supply contract between Dairy Marketing Services, LLC and Kraft-Heinz for the latter’s mammoth Lowville, NY plant expires.  Questions are rampant in the Lowville area about the terms of a new contract.  Farm milk supplies are overabundant in the Northeast.

April Class III Price Drops to $15.22/cwt. – Down $.59 (p. 2):
    The April 2017 Class III (Cheese) milk price fell $.50 per cwt., reflecting lower butter and Cheddar prices in USDA’s weekly survey of manufacturers’ sales.

"Secret” Canadian Class 7 Milk Price Formula Revealed!!! (p. 3):
   Our “Story of the Month.”  See the above link in blue to read this complete story.

Geonomics: Tool for Improving Herds Improvement Requires a Plan (p. 4):
  Writer/dairy farmer Jan Shepel reports on comments about genomics by three noted dairy breeders at a March 2017 meeting in Wisconsin.

MMPA Claims “Net Savings” Despite HUGE Deducts from Members’ Milk Checks (p. 5):
  
For its fiscal year ending September 30, 2015, Michigan Milk Producers Assn. claimed profits of just over $5 million.  But those profits were conjured up follow deducts against members’ milk checks that totaled around $745 million in the form of lower PPDs.  MMPA is awash in milk, and incurring big losses getting rid of the stuff.

Dairy Leaders Preparing Pro-GMO, Anti-Activist Onslaught (p. 5):
  As if they didn’t have better things to do (llike sell more dairy products), leaders of top dairy organizations appear to be part of a big push, coming out soon, to promote biotech foods.

Food Safety Starts with an Ethic, But Requires Tools (p. 6):
  We continue with part 2 of our profile of Nelson-Jameson, Inc., with a focus on specific tools available to dairy and food plants in the continuing push for food safety.

Waunakee, WI Dairy Farm Invests in Manure Composting (p. 7):
    Writer/dairy farmer Jan Shepel describes the Endres brothers’ Beryride Farms’ manure composting barn.  Very interesting story!!!  The Endres compost dairy manure year-round.  They find savings in reduced transporting manure to the fields, greater dry matter yields for alfalfa, and no problems with polluting nearby streams.  Yes, composting seems to be working well for the Endres family.

PowerPoint Panels from the ADPI/ABI Meeting (p. 8-9):
    We reprint selected, informative PowerPoint Panels provided by speakers are the recent, combined milk powder and butter industry meeting in Chicago.  Plenty of wisdom at the podium at this event, which was attended by over 1,000 industry representatives

DFA’s 2016 Financial Report: More & More Questions (p. 10):
   Pete Hardin conducts his annual proctology on the latest financial audit of Dairy Farmers of America.  DFA’s 2016 financial report continues to be plagued with the same-old, same-old problems – questionable “assets”  In particular, Hardin questions DFA’s $375 million worth of “Preferred Equity Securities.”  In the past, Moody’s Investors Service has labeled such assets as “debt-line.”  Currently, Moody’s puts a 50% value on those assets.

Bitter Butter Battles Buffeting Badgerland Barristers (p. 10):
   A flurry of lawsuits and administrative actions has taken place in Wisconsin during the past two months.  Wisconsin officials have blocked sales of KerryGold butter.  KerryGold has sued a competitor.  A “grassroots” group has sued Wisconsin state officials.  And Minerva Dairy (Ohio) is claiming that Wisconsin’s butter grading laws inhibit commerce.

Organic Milk: Playground Bullies Still stealing Milk Money (p. 11): 
      Writer Paris Reidhead provides both historic and up-to-date perspectives on the issue of organic dairy integrity and the undue influence of mega-dairies.  Unless the trend of USDA’s ignoring CAFO organic dairies’ violating pasture access rules, organics will go the way of conventional dairynig – with the “big boys” squeezing out the small and medium producers.

How Much Butter Does Wisconsin Make??? (p. 11):
  
Nobody knows.  Why?  Because federal and state agricultural reports cannot reveal totals because that would be a clue ass to how much volume the state’s biggest butter manufacturer (Grassland Dairy Products) has.

Meaningful Reform for Checkoff Programs Pushed (p. 12):
    Jan Shepel covers companion legislation in both the U.S. Senate and House of Representatives that would reform agricultural commodity promotion check-off programs.  About time!!!

Butter has Best Potential Upside in Unsettled Dairy Commodity Scene (p. 13):
  In Pete Hardin’s commodity analysis, he sees butter as the top commodity with room for upwards price movement.  U.S. butter prices are lower than those in Oceania or the European Union -- boosting exports and slowing down imports

Dairy Livestock Prices Flat at Best, But Beef Buyers May Help (p. 14):

  In this spring of discontent, dairy livestock prices remain flat … at best.  But beef buyers are not back in the game – buying dairy livestock for slaughter and placement in beef pens.

Organic Industry Watchdog Wins Major Antitrust Victory (p. 12):
    Will Fantle, co-director of The Cornucopia Institute, reviews the many issues behind that organization’s successful effort in challenging the proposed acquisition of WhiteWave by Dannon.  Dannon will be forced to unload its Stonyfield Yogurt subsidiary.

Among Dairy Commodities, Only Butter Maintaining Price Stability (p. 13):
    The dairy commodity scene is not pretty.  Butter, among the major three commodities, maintains its price integrity.  Cheddar and nonfat dry milk prices are down-trending, compared to levels earlier in 2017.

Dairy Livestock: Springers, Fresh Cow Prices Down $200-$300 (p. 14):
   Prices for springing heifers and milk cows are down in auctions.  Farmers’ finances are limited and there is little incentive to buy more cows, when such prices and marketing condition exist in the U.S. dairy industry.

European Chemical Agency Decides Glyphosate is Not a Carcinogen (p. 14):
   Jan Shepel reports on a recent decision by the European Chemical Agency that determines glyphosate – a widely-used herbicide – is not a carcinogen.

Wisconsin should focus on marketing, sales (p. 15): 
      Pete Hardin lays out a wide range of positive, pro-active solutions by which Wisconsin dairy interests can strive to tailor milk production to demand and to upgrade the image of cheeses produced in Wisconsin.

June 10: Ameri-Milk Jerseys to Find New Homes (p. 16):
  
Don Mielke’s Jersey herd and young stock will be sold by Jersey Marketing Services on June 10 at Mielke’s family farm near Menasha, Wisconsin.  Mielke is an accomplished breeder in both Holstein and Jersey circles.  Writer Jan Shepel interviews Don and profiles his herd of Jerseys.

Wave of “NO Posilac” Edicts Sweeps Across Cheese Industry (p. 16):
   Suddenly, a large number of cheese manufacturers have put out the word: No milk from Posilac-injected herds, starting January 1, 2017.  The expanded list of processors includes new arrivals Land O’Lakes, Associated Milk Producers, Inc; Agropur, Bongard’s Creameries, First District Association, and Saputo Cheese.  This rapid infusion of dairy manufacturers jumping on the “No Posilac” trend is amazing.  Next month, The Milkweed will try to find out what’s propelling this rush to the exits.


April 2017 Issue No. 453

Inside this months issue …

Our story of the month:
“New York-it is” (Dairy Producers Losing Markets) Comes to Wisconsin (p. 1), and
China’s Biggeset Dairy’s Stock Plunges by 90! (p. 1):

     
Click Above for Stories of the Month.

Pete Hardin’s March 30 dairy speech available to view on the Internet (click on this headline to view)

DFA/DMS Will Terminate Remaining “Independent” Producers (p. 2):   
     DFA’s subsidiary, Dairy Marketing Services, LLC, has notified the remaining Northeast “independent” producers in the Northeast that their markets will cease sometime in mid-fall 2017.   That’s DFA’s “final solution” to the matter of marketing “independent” producers’ milk.

Sen. Gillibrand Aims for Milk Pricing Reform (p. 2):
   U.S. Senator Kirsten Gillibrand (D-NY) asked USDA Secretary-Designate “Sonny” Purdue at his confirmation hearing if he would countenance public hearings in New York State regarding milk pricing reform.  Purdue answered affirmatively.

March Class III Price Drops $1.07 to $15,81/Cwt. (p. 2):
  USDA’s benchmark Class III (cheese) milk price for March dropped significantly, following down-trending Cheddar commodity prices.

Feb 2017 Class III Price Up to $16.88/cwt. (p. 2):
    February’s Class III (cheese) milk price rose modestly, to $16.88/cwt.  That price will be the peak for a while, as Cheddar prices at the CME have declined sharply.

JBS Caught in Massive Brazilian Beef Scandal (p. 4):
   Writer Nate Wilson has produced a fact-filled, highly informative sujmary of the meat scandal that’s hit Brazil.  JBS, which is a major U.S. beef and pork processor, was found bribing Brazilian inspectors to “look the other way” when untoward, illegal practices occurred.  JBS is a major buyer of dairy cull cows and steers in the U.S.  Brazilian beef imports have knocked down U.S. beef and dairy producers’ prices received for slaughter animals … as well as all other ages and stages of cattle.

Dairy Chorus Singing “blame Canada’ for Surplus Woes (p. 4):
  Pete Hardin scorns the chorus of dairy leaders and politicians blaming Canada for New York and Wisconsin dairy farmers losing their markets.  The real problem is undisciplined milk production in states such as Michigan, New York, and Wisconsin.

Did Vilsack’s Recent Trip to Mexico Violate Ethics in Government Act??? (p. 5):
  
The Ethics in Government Act clearly specifies restrictions on outgoing, former Cabinet officials (such as USDA secretary).  Did Tom Vilsack – recently departed USDA Secretary – violate the Ethics in Government Act by meeting with Mexico’s agriculture minister during Vilsack’s early March trip to Mexico?

Stonyfield Organic Yogut Sell-Off: Antitrust Anomaly! (p. 5):
  The U.S. Dep’t of Justice has okayed the proposed acquisition of WhiteWave by Dannon.  Publication of the approval in the Federal Register, as well a public comment, will follow.  DOJ is forcing Dannon to divest the Stonyfield Yogurt business.  Stonyfield has a 65% market share of retail organic yogurt sales, according to reporting last summer in The Milkweed.

NFDM Price-Fixing Lawsuit Update (p. 5):
  The Milkweed updates readers on the latest events in the long-running Class Action lawsuit against defendants DairyAmerica and California Dairies, Inc.  Plaintiffs’ attorneys are seeking to include additional defendants (DFA, LOL), add California producers as members of the plaintiff’s class, and upgrade the lawsuit to RICO (anti-mafia) status (triple damages).

Nelson-Jameson: Delivering Value & Serving Dairy & Food Industries (p. 6-7):
    Nelson-Jameson, based in Marshfield, Wisconsin, is the leading supplier of products to the U.S. cheese industry.  The Milkweed visits Nelson-Jameson and profiles this company’s operations and goals.

U.S. Senators Propose 120-day Ban on Brazilian Beef Imports (p. 7):
    Sparked by Montana’s Jon Testor (D) – a rancher – several U.S. Senators are proposing legislation to ban Brazilian beef from entering the U.S. for 120 days.  This move comes in response to a huge scandal over meat quality in Brazil.

“Munchkin Grass Fed” Infant Formulas to Debut in U.S. (p. 7):
   A line of infant formula products, made from grass-fed milk and produced in New Zealand, will soon start being marketed in the U.S. by Munchkin.  Looks like the Kiwis are several steps ahead of U.S. marketers … again!

Foods Made with Special Whey Protein help PKU Sufferers (p. 8-9):
   Writer Jan Shepel contributes a “soup-top-nuts” story outlining the history of a University of Wisconsin-Madison team of researchers that have isolated a whey protein and created a line of commercial food products for individuals suffering from PKU.  Individuals suffering from PKU have sometimes severe health and emotional issues, due to their inability to digest many proteins.  Dr. Denise Ney – a nutritional scientist at UW-Madison – headed up the team.

Whey Protein (GMP) May Helpwith Weight Loss, Osteoporosis (p. 8): 
     Writer Jan Shepel reports on an interesting side-result of whey research at the University of Wisconsin-Madison:  Mice fed GMP whey proteins showed weight loss and increased bone mass density.  Further research is exploring the possible human applications of these findings.

Growing First-Half Sales & Profits for The a@ Milk Company (p. 9):
  
Writer Ken Rabas summarizes the first-half results for The a2 Milk Company, based in New Zealand.  Sales and profits are up, and the company is making plans to expand sales of a2-derived dairy products in the U.S. in 2018.

Midwestern Farm Credit Merger Gets Members’ Approval (p. 10):
    Jan Shepel updates the votes by members approving merger of three Midwestern Farm Credit associations.

Exports Bridge Gap Between Unfettered Milk Production and Mature U.S. Market (p. 10):
  Writer Jan Shepel reports on a recent presentation by UW-Madison dairy economist Dr. Mark Stephenson, where Stephenson took a wide-ranging overview of current U.S. dairy situation.  Strong farm milk production gains and retracting export opportunities are currently squeezing both dairy commodity and farm milk prices.

Biogas Digesters: Non-Solutions to Dairy’s Methane Misadventures (p. 11):

  Writer Paris Reidhead offers a technical perspective on the biochemistry and air quality issues surrounding use of manure digesters on dairy farms.  Overall, Reidhead concludes, using digesters to process dairy wastes is an environmental travesty, and a good way to lose money for investors.

Organic Industry Watchdog Wins Major Antitrust Victory (p. 12):
    Will Fantle, co-director of The Cornucopia Institute, reviews the many issues behind that organization’s successful effort in challenging the proposed acquisition of WhiteWave by Dannon.  Dannon will be forced to unload its Stonyfield Yogurt subsidiary.

Among Dairy Commodities, Only Butter Maintaining Price Stability (p. 13):
    The dairy commodity scene is not pretty.  Butter, among the major three commodities, maintains its price integrity.  Cheddar and nonfat dry milk prices are down-trending, compared to levels earlier in 2017.

Dairy Livestock: Springers, Fresh Cow Prices Down $200-$300 (p. 14):
   Prices for springing heifers and milk cows are down in auctions.  Farmers’ finances are limited and there is little incentive to buy more cows, when such prices and marketing condition exist in the U.S. dairy industry.

Dow-DuPont Merger Moves Forward After Conditional Approval by EU (p. 14):
   Writer Jan Shepel covers EU approval of the proposed merger between two agri-chemical giants, Dow and DuPont.  Consolidation is the name of the game for several sectors of U.S. and global agriculture.

Time for better ideas for the Farm Bill … (p. 16): 
     Pete Hardin offers a few improvements, starting with simplifying the federal milk order system into three milk orders and two classes of farm milk use.

Book Review: Hands Off My Food! Focuses on What’s on Our Plates (p. 16):
  
A newly-released book by Dr. Sina McCullough, Ph.D., takes a close look at what’s in our foods and what government policies have helped bring about our current food system.  McCullough urges individuals to take responsibility for their foods, starting by asking questions and changing habits, when deemed wise.  Her chapters on rbGH, Genetically Modified Organisms, and GRAS (FDA’s food safety qualifications) are must reading.

Immigrant Labor Worries Sobering Dairy Industry (p. 16):
   A major Achilles Heel for the U.S. dairy industry is the large number of undocumented immigrants working on the nation’s farms.  Estimates are that 60-70% of immigrant farm workers are in the country illegally.  And now the Trump administration is starting to crack down on illegal immigrants.


March 2017 Issue No. 452

Inside this months issue …

Our story of the month:
Amended Milk Powder Lawsuit Alleges Fraudulent Criminal Activities by DairyAmerica 
     
Click Here.

Cheddar ^ NFDM Cash Market Prices Turn Sharply Down (p. 1):   
     Prices for Cheddar cheese and nonfat dry milk have tumbled in the past several weeks.  Farm milk supplies are overly-abundant, and buyers are waiting for signs that the price bottoms are near, before they start buying normal quantities.  Mexico’s slower demand for dairy commodities is also a factor pressing on U.S. commodities.

DFA/DMS to De-pool “Independent” Producers in Northeast (p. 1):
   Dairy Farmers of America and its marketing subsidiary, Dairy Marketing Services, will de-pool independent producers in their milk supply.  That means the producers to not have access to class 1 (fluid) markets, nor will they have protections of the federal milk order.  DFA is using the de-pooling threat to coerce independent producers into DFA membership.

“got milk?” Licensed to Promote Products … from INDIA??? (P. 2):
  Writer Jan Shepel investigates a curious situation – the famous, “got milk?” logo (owned by the California Milk Processors Board) is affixed to a line of consumer snacks that includes food items made in India.  Read on …

Feb 2017 Class III Price Up to $16.88/cwt. (p. 2):
    February’s Class III (cheese) milk price rose modestly, to $16.88/cwt.  That price will be the peak for a while, as Cheddar prices at the CME have declined sharply.

Land-Spreading Raw Milk: Feed Soil Biota, Use Surplus Beneficially (p. 3):
   Paris Reidhead explains the benefits of spreading excess raw milk on soils to boost the health and activity of soil microbiota.

Coast-to-Coast, Organic Dairy Markets Struggling (p. 3):
  From Atlantic to Pacific, organic farm milk supplies are overly abundant.  Some marketers are installing quotas on how much milk their producers may ship, other marketers face a tough choice of terminating producers.

Scenic Central Has Payments Dispute with Amish Country Farms (p. 3):
  
Scenic Central Milk Producers – a Wisconsin-based dairy cooperative – is in dispute with Amish Country Farms, a New Jersey-based firm, over funds due from sale of organic milk.  Amish Country Farms has terminated buying milk from Wisconsin dairy farms that were part of Scenic Central’s network.

Northeast FMMO Sanctions “Dumping” for March, April & May (p. 3):
  Once more unto the manure pit!  The Northeast federal milk market administrator has okayed a proposal by Dairy Farmers of America for dumping excess milk in the Northeast for March through May 2017.  Milk supplies in that region will overwhelm dairy’s transportation and processing logistics this spring.

Fuel-Grade Ethanol Distillers Keep Poisoning Cows with Excess Sulfur (p. 4-5):
  Writer Paris Reidhead details the heartbreak of a Tennessee dairy farm family – the Reeds – with a history of their herd health epidemic due to sulfur toxicity.  The source of that excess sulfur in their cows’ diet: Dried Distillers’ Grains (DDGs) – a by-product of the corn-fuel-ethanol industry.

Amended Milk Powder Lawsuit Alleges Fraudulent Criminal Activities by DairyAmerica (p. 6):
    One of our “Stories of the Month.”

Exhibit B  Declaration by Dairy America’s Former Export Account Manager (p. 7):
    We reprint the full Declaration of DairyAmerica’s former export account manager, who details, under oath, numerous illegalities.  One of our “Stories of the Month.”

Early March: Bull Calf Prices Zeroing Out in Wisconsin (p. 9):
   They’re shooting bull calves in eastern Wisconsin in early March.  No willing buyers, as the fed Holstein steer market in the Midwest has collapsed.

To Northeast Dairy Producers Who Are Class Members in the DFA/DMS Antitrust Litigation (p. 10):
   A Message from Jonathan and Claudia Haar.  Two Class Representatives in the Northeast Dairy Antitrust case against DFA/DMS explain why they’re appealing the federal court’s approval of the Settlement.  Jonathan and Claudia Haar are scheduled to appear in Federal Appeals Court in Manhattan on March 29 to state their legal case in opposition to the Settlement.

The Dilemma of Agricultural Production Restraint (p. 11): 
     Pete Hardin offers a wide-ranging review of issues involving restraint of agricultural production.  Recent settlements in lawsuits have hammered agricultural cooperatives’ common efforts to rein in output.  But in Canada, farm milk quotas have failed to meet that nation’s growing consumer demand for dairy.

Organic Conference Spotlights Organic Grain, Dairy Supply-Price Woes (p. 12):
  
The recent MOSES organic conference in La Crosse, Wisconsin gave plenty of opportunity for grain and dairy farmers to learn about supply pressures on their sectors.  Imports of organic corn nearly doubled in 2016, compared to 2015.  That slug of imported corn busted down domestic prices by about $5/bushel.   And organic dairy producers are learning the old conventional truth: CHEAP CORN MAKES CHEAP MILK.  Abundant volumes of cheap, low-priced corn are fueling expanding organic farm milk supplies – also busting prices and markets.

DFA to Terminate NFO Marketing Deal in Northeast (p. 12):
   DFA has announced it will cease its marketing relationship with the National Farmers Organization in the Northeast, effective December 1, 2017.

February 2017 Issue No. 451

Inside this months issue …

Our story of the month:
DFA’s Conspiracey to Control Northeast Producers Dates Back 20 Years 
     
Click Here.

Cheddar Block/Barrel “Split” is a Real Head Scratcher (p. 1):   
     Recent weeks’ cash Cheddar trading activity has demonstrated tremendous variability in the difference between 40-lb. Cheddar blocks and 500-lb. Cheddar barrels.  On January 27, for example, blocks were 24 cents/lb. higher than blocks.  But by February 9, barrels were 3 cents higher than blocks.  The integrity of CME cash markets is questionable.

Milk Per Cow + Strong Economy = U.S. Dairy Growth (p. 1):
   Writer Jan Shepel interviewed University of Wisconsin-Madison dairy economist Mark Stephenson about his perspective on 2017’s dairy events and prices.

U.S. Milk Powder Prices Slipping – Are Mexicans Shopping Elsewhere? (p. 2):
  Industry sources tell of diminished interests by Mexican buyers in U.S. dairy proteins.  Worries are that the Mexican buyers are put off by statements made about their country by President Trump.  Meanwhile, the EU is sitting on a big pile of Skim Milk Powder.  We should not take our historic dairy trading partners for granted!

Rabobank’s Tom Bailey Predicts 2017’s “All-Milk Price” at $16.80/cwt. (p. 2):
    Rabobank’s top dairy economist wrote a recent article in Hoard’s Dairyman, in which he predicted an “All-Milk” price of $16.80 for 2017.  That’s only a modest improvement over 2016’s milk prices.

Trump Pulls United Stats Out of TPP Pact (p. 2):
   As promised, President Trump pulled the U.S. out of all negotiations involving the Trans-Pacific Partnership.  The TPP is kaput.

Jan. 2017 Class III Price Drops to $16.77, Down $.63/Cwt. (p. 2):
  For January, Class III (cheese) milk prices dropped by $.63/cwt.  But both Class II (cultured products) and Class IV (butter-powder) milk climbed over $1.00/cwt. in USDA’s federal milk order program.

Sonny Perdue’s Daunting Challenges at USDA (p. 3):
  
USDA Secretary-designate Sonny Perdue was the final Trump Cabinet nominee.  A former Georgia governor and veterinarian, Perdue faces a big task of addressing policies for agriculture and food.  Perhaps the biggest headache will be what to do about anticipated corn surpluses and low prices for a handful of major agricultural sectors.

“Much Improved” Price Picture Predicted for Dairy in 2017 (p. 3):
  Jan Shepel reports addition comments and insights by UW-Madison dairy economist Mark Stephenson.

DAIRY PRIDE” Bill Gathers Steam in U.S. Senate (p. 4):
  A U.S. Senate bill that proposes banning use of the phrase “milk” for plant-baaed beverages is gaining support in the U.S. Senate.

Vilsack Gains Top Post at U.S. Dairy Export Council (p. 4):
    Former USDA Secretary Tom Vilsack has taken the top job at the U.S. Dairy Export Council.  He’ll be well-paid.  But questions arise.  Prohibitions against former high-level federal employees stipulate that Vilsack may have no contact with USDA, nor advise foreign agents, for a long period.  What will he do to earn his salary???

Glanbia & Three Co-ops Announce Cheese Plant Project in Michigan (p. 4):
    Plans for a big new cheese plant in Michigan have been announced.  Ireland’s Glanbia will team up with Dairy Farmers of America, Michigan Mik Producers, and Foremost Farms in this project that is estimated to cost as much as $400-$500 million.

Transparency, Sustainability Key Buzzwords to Dairy & Food Products Marketing (p. 5):
    Jan Shepel reports on a recent speech about future trends in dairy products by Ryan Sirolli, a dairy innovation leader for Cargill.  He discussed a number of trends driving consumer food product innovation.

CDI and DFA Talking … (p. 5):
   But what are they talking about???

Tafels Tie Together Pasture, Cows, and Consumers’ Wishes (p. 6-7): 
     Paris Reidhead visits a young New York State dairy farm family --- Adam, Margaret Tafel and their family.  The Tafels have a 200-cow dairy herd that’s organic, and fed only grass.  They specialize in cow comfort, and sell their milk to Maple Hill Creamery, earning over $40/cwt. with their Winter grass-fe premium.

Organic Milk Supplies Burdensome – Prices Tumbling (p. 7):
  
The story is the same in the Northeast, Midwest and California – organic farm milk supplies are a burden on marketers and prices are dropping.  Numerous dairies are transitioning to organic status, but marketers already have more milk than they know what to do with, heading into the spring flush.
DFA’s Conspiracy to Control Northeast Producers Dats Back 20 Years (p. 8-9): Pete Hardin digs deep into the history of DFA’s take-over of Northeast dairy farmers – going back 20 years and naming names.  At present, DFA is threatening to cut as many as 900 independent Northeast dairy producers out of their markets by April 1, 2017 … if the Northeast federal milk market administrator doesn’t relax pooling rules.

DFA & DMS Threaten to Terminate Northeast Independent Producers (p. 8):
   This article summarizes recent months’ dirty tricks by DFA and DMS that are hog-tying the Northeast dairy industry.

Key Language in the January 19, 2017 DMS Letter to Independent producers (p. 9):
  
We analyze language of the January 19, 2017 letter sent to DMS’ independent Northeast milk producers.  Ugly.

Depooling Bad or Good?  DFA Economist Hollon Double-Speaks (p. 10):
    The Milkweed catches Elvon Hollon, DFA economist, in self-contradictory statements.  In California in 2015, Hollon claimed that strict pooling regulations were necessary for the integrity of a federal milk order.  But in a January 12, 2017 letter to the Northeast milk market administrator, Hollon asks for completely unrestricted milk pooling rules.

USDA Taking Public Comments on Possible Organic Check-off (p. 10):
    Will Fantle of The Cornucopia Institute writes skeptically about the proposal for an organic commodity check-off that’s now subject to comments by USDA.

McDonald’s Phony “Mozzarella Sticks” Lawsuit Settled Out-of-Court (p. 11):
    Pete Hardin summarizes the now settled lawsuit and related events involving McDonald’s sale of adulterated “Mozzarella Sticks.”  Hardin writes about details that had to be previously kept under wraps.

Judge in California Approves Cancer Warning Label for Monsanto’s Roundup Herbicide (p. 11):
    The headline says it all.  Monsanto’s angry lawyers will appeal, claiming a cancer warning label on Roundup herbicide will hurt sales.

Group Pushes for Return of COOL in Trump’s First 100 Days (p. 12):
    The activist cattlemen's group – R-CALF USA -- is pushing the Trump administration to revive the “Country-of-Origin-Labeling” precepts for labeling meat products.  “Free-trade” politics helped kill earlier attempts to institute COOL, so that U.S. consumers could know that their meat comes from U.S. raised and processed livestock.

Foot-and-Mouth Disease Outbreak Hits South Korea (p. 12):
   Nate Wilson reports on a serious outbreak of FMD in South Korea.  That nation is already suffering a serious outbreak of avian flu.

CME Cheddar Prices Gyrate, Butter & NFDM Down Slightly (p. 13):
  
Our dairy commodity review for the past month finds curious gyrations in the Cheddar cash markets.  Butter is seasonally strong.  Nonfat dry milk prices at CME are reversing some of the progress made during recent months.

Meat Giant JBS in Brazilian Financial Scandal Investigation (p. 14):
    Brazil meat giant JBS, SA is caught up in a big scandal over financing for its purchases of meat packing businesses in the U.S. and Great Britain.  Nice guys, eh??

NY Farmers Solar Panel Fiasco: Boodoggle Update (p. 14):
    Paris Reidhead revisits the Sitts family of Franklin, New York.  Last summer, Paris wrote about their troubled solar panel system for heating water in their milk house.  The firm that installed the system seemed happy to take nearly $30,000 instate subsidies, but has not repaired or replaced the failed system in many months.

NYS Sinking $2.5 Million into DFA Dairy Project (p. 14):
    A DFA investment with several large, western New York dairy farms recently gained a $2.5 million grant from New York State.  That grant will average about $83,000 per employee.

CME price gyrations … what to believe??? (p. 15):
    Pete Hardin dissects the present and historic antics of Cheddar pricing at the Chicago Mercantile Exchange and concludes that something other than honest market opinions reign there from time to time.

Where Does the Imported Grain Audit Trail Track Back To? (p. 16):
    John Bobbe of OFARM – an organic agriculture activist – visits the murky world of imported organic grains and blisters USDA for its failure to inspect the organic integrity of these imports – many of which come from Turkey and Eastern Europe.


January 2017 Issue No. 450

Inside this months issue …

Our stories of the month:
U.S. Positioned as Only Global Source for Residual Butter & Cream
and …
Swiss Valley Farms' Horrid Finances Plague Prairie Farms Merger 
     
Click Here.

U.S. Positioned as Only Global Source for Residual Butter & Cream (p. 1):   
     One of our two “Stories of the Month” for January.  (Click on stories of the month, above.)

DFA/DMS Extending Dirty Tricks in Northeast (p. 1):
   DFA/DMS Extending Dirty Tricks in Northeast (p. 1):  Word from the Northeast is that Dairy Farmers of America and Dairy Marketing Services at at it once again, trying to drain Northeast dairy farmers’ milk checks.  This time, DFA/DMS is offering a bonus to a Dean Foods in New England as part of a scheme to cut Class I handling allowances elsewhere in the Northeast down to zero.  Lose.  Lose.

2017 Kicks Off New Wrinkles for Dairy (p. 2): 
   The New Year brings in some new rules on the farm: no tail-docking, no rbGH/rbST rules from some marketers, restrictions on use of veterinary drugs, and “GMO-free” rules from Dannon.

Surprise!  Butter Boosts December Class III & IV Price (p. 2):
    Higher dairy commodity prices drove up the December 2016 Class III (cheese) and Class IV (butter-powder) prices to $17.40 and $14.97 per cwt., respectively.

Will Wisconsin’s Milk Flow Respond to Plants’ Posilac Ban? (p. 3):
   Starting on January 1, numerous Wisconsin dairy plants laid down the law – no farmer use of Posilac (rbGH/rbST).  Will Wisconsin dairy farmers comply?  What’s driving this dictate?   Export buyers don’t want dairy products processed from milk from herds injected with Posilac.

Wisconsin Gov’t Agencies Roll Out Methane Digesters Master Plan (p. 3):
   Three state agencies in Wisconsin have recently announced a hurry-up plan to subsidize construction of methane digesters for mega-dairies in the state.  To offset adverse publicity about water pollution, Wisconsin’s Republican leaders are betting on digesters.  The way the rules for grant applicants are written, it looks like the table is tilted towards big dairies in polluted Kewaunee County will get most of the marbles in the $20 million pot.

2017 Trends and Predictions for Dairy & Food (p. 4):
  
Food analyst Ed Zimmerman offers his look ahead at 2017 and the major trends that will play out.  Interesting!

No Plans for DFA’s Ex-Quaker-Muller Plant (Batavia, NY);
No Jobs Created, DFA Faces County Tax Levy at 100% (p. 5):

  Writer Nate Wilson digs deep into the non-events surrounding DFA’s closed yogurt plant at Batavia, NY.  County officials have retracted the tax breaks granted to DFA one year ago, because DFA has made no progress … heck, doesn’t even have a plan … or restoring dairy processing to the former Quaker-Muller yogurt plant.

Veterinary Feed Directive for Livestock & Poultry is Now in Effect (p. 5):
  Jan Shepel explains the purpose and general details of the new rules restricting use of certain drugs for livestock and poultry operations.  All livestock producers must pay attention to this one!

Congressional Letter Asks FDA for Stricter Enforcement of the Term "Milk" (p. 6):
    Jan Shepel reports on a mid-December letter sent to FDA by more than 30 U.S. Senators and Congressional representatives.  That letter seeks an FDA ban on the use of the word “milk” in describing beverages made from plant-based materials.

Vilsack to Head USDEC?  Dairy Can’t Say “Good Riddance” (p. 6):
    Some media are reporting that outgoing USDA Secretary Tom Vilsack will be named President/CEO of he U.S. Dairy Export Council.  The Milkweed raises questions about whether, if Vilsack does gain that post, if he will be violating conflict-of-interest statutes.  Vilsack has had multi-million dollar grants to USDEC every year he’s been atop USDA.

For the Past 30 Years (1995-2015): U.S. Commercial Disappearance Has Topped Farm Milk Output (p. 7):
    An anonymous dairy farmer has researched how for the past twenty years, U.S. commercial demand has been higher than U.S. milk production?  Where’s all the “surplus” been???

Major Structural Changes Directly Ahead for U.S. Dairy Cooperatives (p. 8):
   This controversial analysis will upset a few folks.  Pete Hardin explains how many U.S. dairy cooperatives have churned red ink and burned assets during the past two years of poor operating margins.  Some of the troubled dairy co-ops and their problems are laid out.  Hardin explains what’s called “Dairy’s San Andreas Fault” – the practice among lenders (such the Farm Credit System) to use as loan collateral the receivables for both dairy farms and their cooperatives.  Trouble is: Much of what dairy co-ops call “receivables” are actually the farmers’ yet-unpaid money for milk that’s been taken by the co-op.

Farm Credit System: More Worries than Just Dairy Farmers & Co-ops (p. 8):  
     We visit some of the history behind the late 1980s bail-out of the Farm Credit System of Omaha by the federal government, following the brutal farm depression of the 1980s.  With demised finances for many major agricultural commodities, the Farm Credit overseers have plenty to worry about in terms of assets’ values and payment abilities as we enter 2017.

Swiss Valley Farms’ Horrid Finances Plague Prairie Farms Merger (p. 9):
  
Shocking.  One of our “Stories of the Month.”  (Click on stories of the month, above.)

Does Increased High Fructose Corn Syrup Consumption Lead to More Diabetes? (pgs. 10-11):
   Writer Paris Reidhead takes a long look at the science and numbers behind High Fructose Corn Syrup consumption and human diabetes. The causal relationship is not absolute, but a thinking person might want to reach for the water bottle instead of a soda.

F.A.R.M. Program Head Outlines Details to Dairy Audience (p. 12):
  
Jan Shepel covers a speech given a couple months ago by the head of the F.A.R.M. program.  If things are so great, why all the controversy???

Butter Prices Strong; NFDM Pushing Over $1/lb.; Cheddar Varies (p. 13):
    The signs look pretty good for butter, nonfat dry milk and cheese, in Pete Hardin’s monthly dairy commodity trend analysis.

Management Change at Scenic Central Milk Producers (p. 14):
    Terry Hanson is in line to succeed Ron Statz as the manager of Wisconsin-based Scenic Central Milk Producers.

Lots of info in this issue (p. 15):
    Pete Hardin discusses the major stories in this issue

Better to boost beverage milk’s quality, taste & image (Rathern than play “name-games” with plant-based “milks”) (p. 15):
    Dairy leaders are again attacking soy- and almond-milk products, claiming that plant-based beverages should not be called milk.  From Pete Hardin’s perspective, this looks like a symbolic effort and waste of time.  There’s a problem: the same logic that dairy leaders use to claim plant-based beverages shouldn’t be called “milk” is the reverse of the logic they’re using to defend U.S. cheese industry’s use of terms such as “Cheddar,” “Muenster,” and “Parmesan” in name-game battles with Europe’s cheese interests.

Storms Bring Massive Moisture, Easing California’s Drought Worries (p. 16):
    Huge storms coming off the Pacific Ocean have deluged much of California with rain and snow.  The state’s reservoirs are filled well above seasonal norms and the mountain snow packs are far ahead of normal water content.  At press time, more storms are on the way …


December 2016 Issue No. 449

Inside this months issue …

Our story of the month:
Reversing USDA’s Policies of Importing Beef From Nations Infected with Foot-and-Mouth Disease 
     
Click Here.

Optimism about 2017’s Dairy Commodity & Farm Milk Prices (p. 1):   
     Several factors are in place to boost 2017’s farm milk prices above what the Class III futures are currently projecting, in our analysis.  Those factors include: good domestic dairy demand, declining milk output in Oceania and Europe, China’s somewhat heavier dairy import needs, and some tough crop situations in part of the U.S.

Milk Supplies Shrinking “Down Under” (p. 1):
   Australia and New Zealand are seeing big declines in farm milk output at the beginning of their pasture seasons.  Butter is becoming impossibly tight in Australia.

DMS’ Extortion in Northeast Continues (p. 1): 
   Dairy Marketing Services, LLC is demanding that smaller cooperatives in New York that have marketing agreements with DMS allow DMS to deduct unlimited reblends per cwt..  If those smaller co-ops do not agree, DMS threatens to terminate their marketing agreements within 30 days.

Life After rbSTrbGH –One Veterinarian’s Perspective (p. 2):
    Several Wisconsin dairy plants are disallowing use of Posilac (rbGH/rbST), effective January 1, 2017.  Jan Shepel reports on a recent presentation by a veterinarian about how to manage milk cows that cannot be treated with the drug.

Nov. ’16: Class III Price Jumps $1.94/cwt., to $18.76 (p. 2):
   In USDA’s federal milk order program, the Class III (cheese) milk price climbed $1.94/cwt. above the October 2016 level.

Grassland Dairy Products to Control Farm Milk Intake at Wal-Mart’s Plant (p. 3):
   When Walmart’s mammoth fluid milk plant at Fort Wayne, Indiana is complete and operating, a Wisconsin-based dairy firm will manage the farm milk supply entering the plant.  That move constricts competition for those Class I milk sales, as well as likely putting a big slug of cream in Grassland’s control.  Grassland is the biggest butter manufacturer in the country.

Questions About Northeast Federal Order Milk Dumping (p. 3):
  
From Nov. 22 through January 9, the Northeast federal milk order will be allowing “dumping” of extra milk.  We asked some questions and received answers from a USDA spokesperson.

Wisconsin Bull Calves Source of Salmonella Outbreak (p. 4):
  Jan Shepel details a recent Salmonella outbreak that’s spread from bull calves to humans, and then from humans to other humans.  It’s a virulent strain.

Gov’t Seizes 4 Mil. Lbs. of NFDM from MD/VA Co-op Plant (p. 4):
  FDA inspectors found evidence of Salmonella contamination at the Strasburg, Virginia milk powder plant owned by Maryland & Virginia Cooperative Milk Producers.  The product has been seized.

NFDM Prices Up 10% 3 days After FDA Recall (p. 4):
    In the three days following the FDA seizure of 4 million lbs. of nonfat dry milk from a Virginia plant, spot prices for nonfat dry milk at the Chicago Mercantile Exchange climbed 10%.

The a2 Milk Company Report Spectacular Growth, Earnings (p. 5):
    Writer Ken Rabas discusses the sales and earnings picture from the recent annual meeting of The a2 Milk Company.  The firm is showing spectacular growth in Australia, ns well as big gains in its Chinese infant formula market.

Wisconsin Farmers Union Survey: 63% of State Dairy Farmers in Red Ink (p. 5):
    Over 1,000 Wisconsin dairy farmers responded to a survey from the Wisconsin Farmers Union.  A solid majority claimed that they were operating at a loss in 2016.

Dean Foods & Organic Valley Announce Joint Venture (p. 6):
   Details are scarce, but the nation’s leading fluid milk processor (Dean Foods) and the nation’s biggest organic dairy producers co-op (Organic Valley) have announced a joint venture for fluid milk processing and distribution.  Organic Valley needed a new partner, with the pending alighment of Danone and WhiteWave.

Marlin Grimes: Knock Back Cancers (p. 6):  
     We report another story of a dairy industry gentleman who has extended  his life, from the threat of cancers, using the “Beam Ray” light-emiting technology.
Analyst Projects Future Fluid Milk Growth, IF  Dairy Re-Images Products and Re-Targets Consumers (pages 7-10):  The packaged foods analysts at Wells Fargo Securities have shared with The Milkweed a detailed report on future fluid milk sales growth opportunities.  The report parallels milk and coffee consumption patters in the U.S.  Both beverages peaked right after WWII.  Coffee pulled out of its nose-dive in the late 1990s, thanks to innovative products and marketing.  Milk is still waiting for that magic to strike.  But Wells Fargo Analysts argue that milk has a lot of good things going for it … with the proper pushes.   Pages 8 and 9 are devoted to color reproductions of the reports graphs.

New Producer Lawsuit Against DFA/DMS/Dean Foods in Northeast (p. 10):
  
In late October, a new lawsuit was filed in the Northeast, alleging violations of the Sherman Anti-trust Act against Dairy Farmers of America and Dairy Marketing Services, LLC.  The full text of this complaint will be posted on this publication’s website by December 15.

Tradewinds Perform Intercontinental Fertilizer Application (p. 11):
   Paris Reidhead describes the weather patterns that pick up phosphorus-laden dust from northern Africa and re-deposit those materials in the Amazon Basis.

Consolidation Making Organic Dairy Look Like Conventional (p. 12):
  
Will Fantle of the Cornucopia Institute writes about the trends in organic dairy that are benefiting industrial-size dairies to the detriment of small and medium-sized producers.  USDA is failing to enforce laws governing organic agricultural production, the Cornucopia Institute charges.

Butter Prices Yo-Yo, Cheese Prices Fall Amid Good Demand (p. 13):
    The past month has seen butter and Cheddar prices rise and back-slide at the Chicago Mercantile Exchange’s cash trading.  At least butter looks very solid for the coming year.

First Amendment Issue in R-CALF USA Suit vs. Beef Check-Off (p. 14:)
    Writer Jan Shepel explores the lawsuit filed against the USDA-mandated beerf check=off.  Plaintiffs claim that the check-off violates First Amendment protections of the U.S. Constitution.

Stopping Beef Imports from FMD-Infected Nations (p. 15):
    Pete Hardin details the reasons behind seeking a ban on beef imports from nations infected with Foot-and-Mouth Disease.  (See the “Story of the Month.”)

2017: Playing Catch-Up with Milk Prices & Marketing Costs (p. 15):
    During the past two years, marketing service charges have eroded for firms selling farm milk.  Recapturing an equitable portion of marketing costs is a big challenge for the year(s) ahead.

Book Review: The Crops Look Good Ip. 15):
    Pete Hardin reviews a recently published book that details the history of a Wisconsin dairy farm family form the 1920s into the 1960s.  The book relies heavily upon letters written by family members.  Makes a person appreciate all the hard work that our forebears went through.  Reversing USDA’s Policies of Importing Beef from Nations Infected with Foot-and-Mouth Disease (p. 16):  Our “Story of the Month.”

Reversing USDA’s Policies of Importing Beef from Nations Infected with Foot-and-Mouth Disease (p. 16):
    Our “Story of the Month.”



November 2016 Issue No. 448

Inside this months issue …

Our story of the month:
Late October/Early November:  CME Cheddar Cheeses Prices Spike 
     
Click Here.

Trump Election Kills Odds fo TPP “Lame Duck” Passage (p. 2):   
     Newly-elected president Donald Trump has vowed to renegotiate various “Free-Trade” treaties in which the U.S. currently is enmeshed.  The anti-“Free-Trade” spirit coming off the November 8 election will likely kill plans held by the Obama administration to try to sneak through a “lame duck” session passage of the Trans Pacific Partnership.

Oct. ’16: FMMO Class II and Class IV Prices Decline (p. 2):
   Class III (cheese) milk declined by $1.57/cwt. during October, while Class IV (butter-powder) milk declined by $0.52/cwt.

Questions About the Dannon/White Wave “Marriage” (p. 3): 
   The nation’s leading yogurt maker is poised to acquire the nation’s leading marketing of organic fluid milk.  Danone is seeking approval of federal regulators to acquire White Wave.

CDI Earns $137,849 Penalty: Ignored Order to Be Prepared for Settlement (p. 3):
    Defendant California Dairies, Inc. was slapped with a $137,849 penalty for failing to be prepared for a Settlement Conference in the long-running milk powder price mis-reporting case.

USDA: Budget Cuts Eliminate Recent Beef Slaughter Data (p. 3):
   Due to budget constraints, USDA stopped collecting weekly livestock slaughter data in mid-summer 2016.

DFA Focusing on Projects in Western New York and Southwest Kansas (p. 4):
   Writer Nate Wilson puzzles over DFA’s priorities as the co-op builds a big, new dairy ingredients plant in milk-and water-starved western Kansas, while sitting on the ownership of the failed Muller-Quaker yogurt plant in western New York.  The Northeast has been overwhelmed with surplus milk that led to widespread dumping each of the past two years.

No Improvement for (GMO) Yields, Growing Pesticides Use (p. 4):
  
The New York Times recently printed a detailed study of farm practices in the U.S. and western Europe.  Conclusion: there are no yield advantages to genetically-modified crops, and GMOs use more pesticides than conventional crops.

F.A.R.M. Program Adds Insult to Injury for Dairy Producers (p. 5):
  An anonymous Northeast dairy farmer blows his stack about animal welfare dictates from the F.A.R.M. program.

F.A.R.M. “Animal Welfare” Dictates Ignore Synthetic Hormones (p. 5):
  If animal welfare is such a big deal, why doesn’t the F.A.R.M. program address synthetic hormones such as “Posilac.”  The veterinary advisory label for Posilac lists about a dozen and a half potential adverse health issues associated with that milk-spurring drug.

Tough Move: Grassland’s rbST/rbGH-free Decision (p. 5):
    Writer Jan Shepel summarizes a presentation by a representative of Grassland Dairy Products at the recent Food and Policy Summit in Madison, Wisconsin.  The Grassland Dairy Products representative detailed the reasons why his firm has issued a moratorium on milk and cream from herds injected with Posilac. Consumers don’t want it!

Failed U.S. Farm Milk-Pricing System Benefits Foreign Firms that Control Many U.S. Dairy Processing Sectors (p. 6):
    Pete Hardin lays out the foreign ownership interests that control various sectors of U.S. dairy processing.  If Chinese investors make good on rumored attempts to buy Dean Foods (the nation’s largest fluid milk processor), then that will be just one more “biggie” whose profits move offshore.  Hardin explains that the nation’s failed farm milk pricing system benefits these processors, not farmers and not consumers.

Q&A: R-CALF USA CEO on Brazilian Beef Imports & Impact on U.S. Cattle Prices (p. 7):
    Bill Bullard, CEO of the trouble-making cattlemen’s organization – R-CALF USA – provides another fact-filled interview on beef industry trends.  Bullard details how recent imports of beef from Brazil have further soured the pricing structure for cattle and dairy producers in the U.S.

Why is Organic Valley Selling Imported Cheese??? (p. 8):
   The nation’s largest organic dairy farmers’ co-op, Organic Valley, is selling imported Cheddar from England.  With plenty of organic milk around, one might hope that Organic Valley would not need to import organic cheeses.

Spiking Cheese Prices: Big News on Diary Commodity Scene (p. 9):  
     In reviewing the dairy commodity scene, the big jump in Cheddar cheese prices at CME is the primary feature.  As milk supplies in Europe and Oceania struggle, the U.S. is seeing strong domestic dairy product demand boost commodity prices.

Choose Cheese Based on Taste … Not Absence of Milk Fat (p. 10):
  
Writer Paris Reidhead digs into recent scientific journal report that the fat content in cheese has no impact on bad cholesterol levels in humans.  This finding is one more shattering of myths spread against dairy and animal fats over the past five to six decades.

Dairy Price Recovery, if U.S. economy holds … (p. 11):
   Supply and demand signs look good for 2017, Pete Hardin concludes … if the U.S. economy holds up its strength.  Dairy product demand is solid.

Where’s our beef?  Butter from where? (p. 11):
  
Since dairy commodity prices generally fell in late 2014, two factors have propped up dairy farmers’ cash flows and asset values: beef prices and butter prices.  But both those items have taken a beating, price-wise, over the past year or so.  In both instances, high levels of imports have been responsible for knocking down U.S. prices.

MMPA Swipes Extra $1.90/cwt. from Sept. milk checks’ PPDs (p. 11):
    Michigan Milk Producers’ Co-op continues its thievery against members’ milk checks.  For September, the co-op deducted an extra $1.90/cwt. through the “minus Producer Price Differential.”  MMPA president Ken Nobis spouts that dairy farmers should learn to make milk at “world market prices” …. But MMPA’s deducts may be putting that co-op’s members’ prices below world market levels!

Explaining Last Month’s P. 1 Article about U.S. Milk Short of Demand (p. 12):
    We offer further clarification for last month’s article about a presentation at World Diary Expo by Rabobank’s Thomas Bailey.  Bailey stated that U.S. milk production had not kept up with demand for the past 18 mohths – a surprise from this expert dairy analyst, since U.S. dairy commodity prices have generally been low since early 2015.  We reproduce Bailey’s power-point panel from his part of his WDE presentation.

Earth Starts Moving at Walmart’s Fort Wayne Site (p. 12):
    We’ve got a picture!  The earthmovers have just started moving ground.  Walmart will never make the original late 2017 deadline to get that plant on-line.


 October 2016 Issue No. 447

Inside this months issue …

Our two stories of the month:
U.S. Milk Flow Trailed Demand for Last 18 Months (and) Wisconsin Gov’t Bankrolling Water Polluters’ Public Relations Efforts: 
     
Click Here.

Grain Harvest Unsettled in Upper Midwest (p. 1):   
     Since mid-August, wet conditions have prevailed in the Upper Midwest.  But starting around September 11-12, the deluges really started.  Quality concerns about the region’s 2016 grain crop abound., due to moisture-induced molds.  Timely harvesting of soybeans and corn is threatened by wet field conditions.  The U.S. grain trade is stalled, waiting for better signals about the volume and quality of the Upper Midwest’s grain crop.

U.S. Milk Flow Trailed Demand for Last 18 Months (p. 1):
   One of our “Stories of the Month.”  See link above.

USDA Economist: Future U.S. Per Capita Dairy Consumption “Flat” (p. 2): 
   What a dipstick.  At a World Dairy Expo seminar on October 6, Sharon Sydow (a top-tier USDA economist) stated that her agency views future domestic dairy consumption growth as “flat.”

European Union Dairy Producers Fully Contract Q4 Milk Production (p. 2):
    For 2016’s fourth quarter, the European Union is paying contracting dairy producers to make less milk.  Farmers will be paid on the basis of how much milk output they reduce (compared to 2015’s Q4).

Sept. ’16 Manufacturing Class Milk Prices All Decline (p. 2):
   USDA reported that Class III milk for September was $16.39 (down $.52/cwt.) and Class IV milk was at $14.25/cwt. (down $.40) cwt.

10/1/16:  Dean Foods Boosts Consumers’ Fluid Milk Prices (p. 3):
   Talk about larceny!  On October 1, Dean Foods – the nation’s biggest fluid milk processor – dramatically boosted prices for its branded beverage milk products.  Gallon prices went up 16 cents.  Half-gallons and quarts went up 13 cents.  What’s the concern?  In October, federal milk order prices went up about one-third of a cent per gallon!

Walmart Plant Site at Fort Wayne, IN Way Behind Schedule (p. 3):
  
Forget about Walmart’s Fort Wayne, Indiana milk plant coming on line in 2017’s fourth quarter.  Basically, construction hasn’t started.  Curiosity festers in the dairy about when that plant will be at full production.

Monsanto + Bayer: Latest Mega-Merger to Hit Ag Sector (p. 4):
  Writer Jan Shepel fills in details of the Monsanto/Bayer corporate marriage, and covers the wider span of agribusiness mergers taking place in 2016.

Honest Mistake??? — DFA Short-Weights Some August Milk Checks in NY (p. 4):
  Several neighbors in New York found that their settlement checks for August milk from Dairy Farmers of America were thousands of pounds of milk short, compared to their bulk tank weight tickets.  Honest mistake?  Or more of the same from the Milk Mafia?

Huge, Negative PPDs Anger Michigan Milk Co-op Members (p. 5):
    To cover operating losses and inefficiencies, Michigan Milk Producers has been swiping huge amounts of milk income through so-called, “Producer Price Differentials.”  The Milkweed calculates MMPA’s PPD deductions (relative to the prevailing Order 33 PPDs) for June-August 2016 averaged $2.30/cwt.  Ouch.

WI Gov’t Bankrolling Water Polluters’ Public Relations Efforts (p. 6-7):
    This story about dirty water politics in northeastern Wisconsin.  This story is a “Story of the Month.”  See link above.

How to Fix the Dairy Margin Protection Program (p. 7):
    Jan Shepel visits the Vosbergs, who milk cows near South Wayne, Wisconsin.  They’ve found the Normande breed works very well for their mostly grazing-based dairy operation.

Roelli Cheese Earns Top American Cheese Society Award (p. 9):
   Master Cheese Maker Chris Roelli took home the blue ribbon from this past summer’s American Cheese Society convention.  Roelli’s prize-winning cheese is a unique product, called “Little Mountain.”  Writer Ken Rabas wrote this story.

“Big $ugar” Shamelessly Shifted Chronic Heart Disease Blame to Animal Fats (p. 10-11):  
     Writer Paris Reidhead digs deep into recent medical journal article that details how the nation’s sugar lobby “bought off” three Harvard researchers in the 1960s to issue medical studies shifting blame for heart disease away from sugar.

Interview with Leonard Vandenburg (Pacific Gold Milk Producers):
  
Writer Ed Zimmerman poses questions to Leonard Vandenburg, head of Pacific Gold Milk Producers.  Pacific Gold is marketing “differentiated” farm milk at premiums – organic, GMO-free, grass-fed and A2.  Very interesting!

Agri-Mark’s Dilemma: Paying Costs of Animal Welfare Lawsuit Settlement (p. 12):
   Pete Hardin picks on Agri-Mark, the major New England dairy cooperative, for its potential costs as a defendant in the recently-settled animal welfare lawsuit.  Agri-Mark, National Milk Producers, Dairy Farmers of America, Dairylea Co-op and Land O’Lakes were defendants that settled for $52 million.

U.S. Cheddar and Butter Prices Decline as World Markets Soar (p. 13):
  
While U.S. cash prices for Cheddar and butter nose-dive, world market prices are soaring.  Global milk production is struggling and China is back buying significantly.  But U.S. commodity prices are down.

Dairy Livestock: Milk & Cull Cows Take a Beating (p. 14):
    A lot of dairy cows are going to market and buyers’ interest is light. Many dairy cows sold at auction these days are going for about $100 over “kill price” … and “kill prices” are going down hard.

Castelli America Ushsers Out Empire Specialty Cheese (p. 14):
    Writer Nate Wilson closes out a long-running series about the misbegoton Empire Specialty Cheese, LLC.  An Italian firm – Castelli – has acquired the Empire plant at BLockville, in New York State’s westernmost tip.

Kraft’s Lowville, NY Expansion Behind Schedule (p. 14):
    The massive expansion of its Lowville, NY cheese plant is running about two months behind schedule in early October.  That expansion will add three million additional pounds of milk processing capacity … per day!

No way to sustain this vital industry … (p. 15):
    Pete Hardin details what’s wrong with this corrupt, crooked industry and what needs to be done to fix it.

Farmers Spanked for Posilac Use After Signing Affidavits with Cheese Plant (p. 16):
    Two Wisconsin dairy farmers were found violating their signed agreements not to inject their cows with Posilac – the controversial cow growth hormone.  Wisconsin’s agriculture department investigated.  The farmers lost their milk market, but were able to continue shipping milk elsewhere.

September 2016 Issue No. 446

Inside this months issue …

Our story of the month:

NMPF & 4 Dairy Co-ops Agree to $52 Million Settlement With Animal Welfare Activists in CWT “Cow Killing” Case (p. 1): 
     
Click Here.



CME Cheddar & Butter Prices Decline Sharply (p. 1):   
     Starting in late August and continuing into early September, prices for Grade AA butter and Cheddar cash-traded at the Chicago Mercantile Exchange declined sharply.  These market signals seem to contradict current strong demand for U.S. butter and cheese.

USDA to Buy $20 Mil. Of “Surplus” Cheese (p. 2):
   It’s an election year.  USDA Secretary Tom Vilsack responded to requests from the National Milk Producers Federation by agreeing to an emergency purchase of a small amount ($20 million – about 10 million lbs. of cheese) for distribution through hunger and nutrition programs.

Bayer AG Moving to Buy Monsanto (p. 2): 
   Germany’s pharmaceutical giant, Bayer AG, is renewing its efforts to purchase Monsanto.  This proposed take-over continues a number of recent consolidations in the agricultural chemical/seed businesses.

Aug. Class III price $16.91; Class IV Price Drops to $14.65 (p. 2):
    The headline tells the story.

Senators: Investigate New Canadian Dairy Ingredients Trade (p. 3):
   Two U.S. Senators – Tammy Baldwin (D-WI) and Charles Schumer (D-NY) have asked USDA and the U.S. Trade Representative for an investigation into Ontario Province (Canada)’s special pricing for milk processed into dairy proteins.  Canada has dealt with a big influx of Milk Protein Concentrates that have widely displaced Canadian milk and ingredients.

Organic Dairy Farmers’ Market Opportunities Tighten, Despite Fluid Sales Growth (p. 3):
   Markets for organic producers are tightening – despite the fact that organic fluid milk sales are growing so far in 2006 at the rate of 5%!   Prices paid to organic dairy farmers are slipping backwards.  Other organic producers are losing their markets, or unable to find buyers for their milk.

Full-Fat Dairy Products gain Sales, DMI Pushes Low/No-Fat Losers (p. 5):
  
Sales of whole milk and full fat cheese are growing nicely.  But sales of low-fat cheeses and low-fat beverage milk products are slipping badly.  So what products does the nation’s dairy promotion bozos push?  Low-fat and no-fat dairy products?

Modern Sire Selection Process is Worlds Away from Grand-dad’s Methods (p. 6):
  Writer/dairy farmer Jan Shepel details how data derived from bovine genome profiles has dramatically shifted the way that young sires are selected and analyzed

UW’s Center for Dairy Research Over Budget  & Under a Cloud (p. 7):
  Jan Shepel takes a look at the much-delayed project to build a new Center for Dairy Researach at the University of Wisconsin-Madison campus.  The project was supposed to break ground in summer 2015.  But delays have caused budget over-runs and dairy industry funders are squabbling with university and state officials over revised designs and costs.

New Life for an Old Cheese Plant (p. 8-10):
    A small dairy co-op has purchased a closed cheese plant in Hancock, Maryland and is investing $25 million in a revival of that facility.  Securing markets for members’ milk – and gaining potential profits from ownership of processing/marketing operations – are strong incentives behind this project by the Lanco-Pennland cooperative.  For outsiders, it’s hard to imagine how difficult the milk marketing climate in the Northeast has been in the past two years for raw milk sellers.

Depletion of the Ogallala Aquifer is a Looming National Crisis (p. 10):
    Writer Nate Wilson reviews recent articles in national magazines about the declining water tables for the Ogallala Aquifer – which stretches from North Texas up to the Dakotas.  This vast, underground reservoir is depleting without recharge.  Nate also puzzles why Dairy Farmers of America would build a new, $275 million cheese plant in southwestern Kansas – where agriculture is already water-stressed.

“NO rbGH/rbST” Directives Gaining Teeth, But No Test (p. 11):
    Pete Hardin details the continuing rbGH/rbST controversy.  In Wisconsin, two dairy farmers were caught cheating by using the cow growth hormone (“Posilac”) after signing affidavits for their cheese plant that they would not inject their cows with that controversial, but legal, drug.  Those farmers were dropped from their milk markets.

The root of the whole Posilac controversy is that FDA failed its own rules by not requiring rbGH developers to create a residues assay, prior to commercialization.

Thinking about Producing GMO-Free Milk? (p. 12):
    Writer Paris Reidhead reviews the farm practices behind producing “GMO-Free” milk.  The market for GMO-Free milk is growing, as more consumers want GMO-free dairy products.

Empire Special Cheese Waving the White Flag (p. 14):  
     Nate Wilson reports how the much-troubled Empire Specialty Cheese plant in the western tip of New York State is admitting financial troubles.  A local daily newspaper reported that the firm is threatening Chapter 7 bankruptcy, unless a new owner can be found.

Dirty Water” politics heating up in Wisconsin (p. 15):
  
Pete Hardin covers the big problem in Wisconsin: contamination of surface and ground water by some mega-dairies.  Hardin argues that clean water is a finite resource and must be protected.  The state government is failing its mandate to protect the state waters.

New York State dairy marketing situation continues unruly (p. 15):
   The chaos in New York State’s milk industry just gets worse and worse.  More producers have received “drop notices” from Elmhurst Dairies.  DFA and DMS are cutting premiums paid to producers.

Organic Grain Imports Theaten Domestic Markets and Standards (p. 16):
  
We welcome writer and organic grain marketer John Bobbe’s contribution about the threats posed to U.S. organic grain producers by large imports of “organic” grain from the Black Sea region (Turkey, Ukraine).  Bobbe offers devastating facts about organic grain imports that are ruining prices and demand for domestically-produced organic grain.

OFARM and Food & Water Watch Request USDA/OIG Audit of “Organic” Grain Imports (p. 16):
    Two groups – OFARM and Food & Water Watch – have formally requested that USDA’s Office of the Inspector General investigate whether organic grain imports from the Black Sea regino are actually in compliance with U.S. standards.  The integrity of the entire organic foods’ industry is at stake.  Lower costs for imported ‘organic” grain are causing U.S.-produced supplies of organic grains to pile up in storage, as domestic prices decline and the 2016 crops are ready for harvest.


AUGUST 2016 Issue No. 445

Inside this months issue …

Our story of the month:

Weather Events/Posilac Bans: 2017 Looking Like a Better Year (p. 1): 
     
Click Here.



USDA Finalizing Brazilian Beef Imports (p. 1):   
     Writer Jan Shepel details the controversy behind USDA’s recent announcement that the agency is now ready to import beef from Brazil.  Virtually all U.S. livestock groups are outraged at the illogic behind Vilsack’s approval for importing beef from Foot-and-Mouth Disease infected Brazil.

Northeast Dumps 41 Mil. Lbs., Mid-East “Only” Dumps 6.6 Mil Lbs. (p. 2):
   Writer Nate Wilson reports and analyses the hard-to-believe USDA data on dumped milk in the Northeast and Mid-East federal milk orders.  The June total for the Northeast – 41 million lbs. – is shocking.

USDA’s May/June ’16 DMPP Margin Calculation Drops Below $6.00/cwt. (p. 2): 
   For the May-June 2016 period, USDA will actually pay out about $11 million to dairy farmers enrolled in the “safety net” program.

July Class III Price at $15.24/Cwt., Class IV at $14.84 (p. 2):
    Class III (cheese) milk jumped $2.02/cwt. for July – a start for improving farm milk prices.

Brazil Beef Imports: What’s the BIG DEAL??? (p. 3):
   We review the deep background dangers harbored by the U.S. livestock industries, regarding the potential outbreak of a Foot-and-Mouth Disease.  If a FMD outbreak were to occur in the U.S., losses would total in the hundreds of billions of dollars.

NYC’s Elmhurst Dairy to Halt Fluid Milk Processing (p. 4):
   The last fluid milk processing plant in New York City is closing on October 31, ending a long and contentious era.  Elmhurst’s closing raises serious questions about where a sub-dealer, Bartlett, will source half-pints of milk to meet its school milk contracts in the metropolitan area.

Senators Introduce Ag Check-off Reform Act (p. 4):
  
Jan Shepel writes about the recently-introduced legislation that proposes to reform agricultural commodity check-off programs.  Odds of passage for this measure in he current legislative session are almost zero.  But the importance of such corrective legislation is vital.  Maybe next year …

More Dairy Marketers in Wisconsin Declaring “rbGH-Free” (p. 5):
   A growing array of major Wisconsin dairy processors are issuing “No Posilac” edicts.  Effective January 1, 2017, Grassland Dairy, Grande Cheese, Mullins Cheese and Land O’Lakes are setting up those standards for dairy producers.  Since most of the mega-dairies in Wisconsin are using Posilac (the biotech cow growth hormone that boosts milk production), it’s anticipated that Wisconsin milk gains could slow next year.

F.A.R.M. Program Enforcement Getting Ugly (p. 6):
  F.A.R.M. stands for “Farmers Assuring Responsible Management” – a program funded by Dairy Management, Inc. (the milk promotion bozos).  F.A.R.M. is really about control of dairy farmers.  We’re hearing of dairy producers threatened with loss of their markets, because they won’t sign up for the program.  Others are losing premiums from milk quality, due to low F.A.R.M. inspection scores.  What a mess.

Wal-Mart’s Fort Wayne Fluid Milk Plant: 14-15 Months and & Ticking (p. 7):
    Pete Hardin analyzes the industry impact of Wal-Mart’s planned, big fluid milk plant that will be located near Fort Wayne, Indiana.  For a radius of about 300 miles, the industry will be disrupted in many ways – from farm milk supplies to competition among fluid processors for remaining business.

Swiss Valley Farms Won’t Revolve Old Equity (p. 7):
    This July, Swiss Valley Farms’ board of directors had the grace to send out a letter to present and former members, explaining that the co-op won’t revolve any old equities.  Dairy farmers’ equities in cooperatives are increasingly elusive.

NYS Solar Panel Water Heaters: Boon or Boondoggle? (p. 8):
    Writer Paris Reidhead interviews NY dairy producer Garret Sitts about the solar panel installation on his milking barn roof.  Those solar panels – costs of which ran somewhat under $30,000 was almost 100% subsidized by government grants – haven’t worked very well.   The company that installed the solar panels was amazingly unresponsive to Garret’s complaints … until farm journalist Paris Reidhead started making phone calls.

GMO Labeling Bill Becomes Federal Law (p. 9):
    Jan Shepel explores the recently created federal law that dictates labeling of foods containing genetically-modified organisms (GMOs).  It’s estimated that two years will be required to create the administrative rules for the law.  The devil will be in the details.

Survey: 59% of Shoppers Won’t Use Scanners to Look for GMO Food Ingredients (p. 9):  
     Jan Shepel reviews a recent study that shows a majority of consumes will not use scanners to find out whether foods contain genetically-modified organisms.  That’s important, because the recently-passed GMO labeling law specifies QR scanner codes on food packages, rather than clear-cut labels, for GMO content.

Sales of Whole Milks & Organic Milk Climbing Nicely in 2016 (p. 10):
  
Consumers are buying more full-fat milk products so far this year.  Sales of regular Whole Milk are up 5.9% for January-May 2016.  And organic Whole Milk sales are up an amazing 16.4%!

Northeast Dairy Farmers BEWARE: Solar Panel Projects’ Contracts Imperil Mineral Rights!!! (p. 11):
   When one dairy farmer studied the contract he’d been sent to set up a solar panel installation on nearly 200 of his acres, he noticed that the contract also included turning over mineral rights, etc.  That’s a concern, given how so much natural gas lies under upstate New York farmland.  When the farmer proposed that the company remove the contract language about mineral rights, the firm walked away.  Are some solar panel projects merely a scam to gain unwitting farmers’ mineral and gas-drilling rights???

USDA Rates Corn Belt, Plains & Upper Midwest Crops in Great Shape (p. 11):
  
We detail information from the August 8, 2016 USDA Crop Progress Report.  Corn and soybean crops are generally very good, particularly in the Upper Midwest.

Danone + WhiteWave Would Dominate Organic Yogurt Market (p. 12):
   Will Fantle, co-director of The Cornucopia Institute, details wide-ranging concerns about the proposed Danone-WhiteWave corporate marriage.  This firm would control about 72% of the domestic organic yogurt market.

CME Cheddar Price Increases Cause Some Confusion (p. 13):
  With cash prices for 500-lb. Cheddar barrels at $1.88/lb. at the Chicago Mercantile Exchange, Pete Hardin tries to explain what market-based reasons there may be for this rapid price run-up.  In recent months, the U.S. has been producing less Cheddar and demand is excellent.

Dairy Livestock Market Situation Hard to Predict (p. 14):
    Our survey of dairy auctioneers finds prices somewhat stronger this month.  But long-running, low-ball farm milk prices and dry conditions in some dairy regions of the country make it a hard market to project right now.  Where crops are scarce, dairy livestock prices could suffer.

DFA to Reduce Northeast Producers’ Premiums (p. 14):
    In early August, DFA members in the Northeast received a mailing from their co-op that informed of a drastic reduction in milk checks premiums, effective August 1.  DFA cooks up more excuses for draining farmers’ milk checks of income.  Unfortunately, DFA is also enforcing these premium reductions upon other dairy co-ops that belong to Dairy Marketing Services.

Analyst Applauds DFA’s Ability to Deduct from Milk Checks! (p. 14):
    A financial analysis of Dairy Farmers of America by Moody’s Investors Service concludes that DFA is a good risk for lenders, because DFA’s by-laws allow the co-op’s board to deduct money from members’ milk checks.

More Processors Banning Posilac, Best Thing for U.S. Dairy Farmers! (p. 15):
    Pete Hardin explains that restrictions against use of Posilac (rbGH) are good for dairy farmers.  Why produce more milk using technology that the majority of domestic and export customers don’t trust?

Followup to July Story on Loren & Debbie Zehr (p. 15):  
     More details about last month’s feature story about a New York diary farm couple that had excessive marketing deductions swiped form their milk checks.

Holstein Bull Calf Prices Reflect Shattered Idol (p. 16):
  
About 15 months ago, some crazy souls were paying $500-$700 a head for nice Holstein bull calves.  At that time, The Milkweed warned that those bull calves were over-worshipped idols.  Now, in Wisconsin in early August, Holstein bull calves are selling in the $85-$160 per head range.


  JULY 2016 Issue No. 444

Inside this months issue …

Our story of the month:

DFA/DMS Dictated Local Co-op to Deduct NY Farm Family $167,490 in “New Member” Marketing Fees Over Past Year (p. 6-7): 
     
Click Here.



Improving Dairy Commodity Prices (p. 1):   
     The second half of 2016 is looking for higher dairy commodity prices and farm milk prices.  Consumer demand is strong, weather worries abound re: crops for dairies in several regions, and slowing global dairy production are all in play.

Cornell: LED Lighting Degrades Milk Quality in Dairy Case (p. 1):
   Nate Wilson reports on a recent research fiding fron Cornell University that correlates rapid declines in milk quality and taste resulting from exposure from LED lighting.

EU’s Farm Milk Gains Slowing Down (p. 2): 
   Big, monthly gains in early ’16 gains for EU milk output slowed to April’s modest, 1.2% increase.  EU dairy farmers are feeling the financial pinch, also.

May ’16 Dumpage Huge in Northeast & Mid-East (p. 2):
    Nate Wilson provides the May 2016 dumped milk numbers for the Northeast (+35 million lbs.) and Mid-East (+18 million lbs.) markets.

Northeast Antitrust Case Lawyers’ Moo-la Chopped (p. 2):
   Judge Christina Reiss awarded plaintiffs’ lawyers only $7 million of a requested $16.6 million in the Northeast dairy antitrust settlement.

Bounce-Back Starts: June Class III +$.46/cwt., Class IV +$.68/cwt. (p. 2):
   The headline tells it all.

China Restricting Infant Formula Brands Competition by 2017 (p. 3):
  
By 2017, China will sanction only aobut a dozen firms selling infant formula products.  The official reason for that move is to improve quality of such products.  But the real reason is that China wants to capture a bigger portion of profits from infant formula sales for domestic firms.

Demand Tightens Global Protein Complex, Boosting Prices (p. 3):
   Global prices for crude proteins are rising – challenges to South America’s soybean crop and a light harvest of Peruvian anchovies are two factors.   Concerns about a dry, how summer in North America are another driving force.  China is a big importer of soybeans right now.

Some Dairy Producers Hiring Hispanics Face Ballot Dilemma (p. 3):
  Rhetoric by Donald Trump is worrisome to big dairy operators who hire Hispanic workers.  About 70% of all Hispanic workers in agriculture are illegals, it’s estimated.

Decades of False Charges vs. Animal Fats (Like Butter) Finally Disproved (p. 4-5):
    Writer Paris Reidhead digs deep into a recent medical journal article that has dumped the anti-animal fat dietary rhetoric on its head.  Modern analysis of medical diet studies from the 1960s and 1970s now show that a diet low in saturated (animal) fats actually is bad for overall health.

Cornell Extension Dean Told Agents to Pull Their Punches … (p. 4):
    Paris Reidhead recalls an event in the 1970s when Cornell U. Extension Dean David Call told dairy agents (including Paris) to not respond to attacks on butter and other animal fats in the human diet.

Some Definitions Related to Animal Fats vs. Vegetable Oils (p. 5):
   Paris Reidhead has crafted a set of definitions to give clarity for the long-running debate over various dietary fats.

DFA/DMS Dictated Local Co-op to Deduct NY Farm Family $167,490 in “New Member” Marketing Fees Over Past Year (p. 6-7):
    Our story of the month.   See link at the top of the page.

Stray Voltage Remedy Restores Grinde’s Herd’s Health & Milk Production (p. 8):
   Writer Jan Shepel describes the victory by the Grinde dairy farm family against stray voltage.  Every aspect of their diary herd’s performance – breeding, milk production, someat cell count – improved once the solution was found.  Incidenetally, family health measures, including blood pressure and migraines, also eased.  Great article!

Strong Barrel Cheddar Demand Boosts Block Prices, Buter Prices Also Up (p. 9):
    Pete Hardin’s review of the dairy commodity scene shows a lot of positive signs.

GMO Foods’ Labeling Bill Headed for Senate Showdown (p. 10):
    Jan Shepel reports the background issues as the U.S. Senate is poised for a vote on a bill to federally codify labeling of foods containing genetically-modified organisms.

The Northeast “Dumped Milk” rip-off (p. 11):
    If you didn’t know what Pete Hardin thinks about milk “dumping” in the Northeast, you do now!

Dairy Livestock Jerseys, Short-breds & Breeding Age Heifers holding value (p. 11):  
     Except for the above-cited animals, dairy livestock values are softer.  Cash-flow is tight and in some regions, farmers are worried about crop volumes due to dry weather.

Northeast & Michigan Facing Very Dry Conditions in Early Summer (p. 12):
  
Dry conditions are becoming very serious for producers in the Northeast and Michigan.  Regrowth of forages, after the first cutting, is minimal in many areas.  Keep an eye on this one. California and certain other western states continue in the grips of drought.


June 2016 Issue No. 443

Inside this months issue …

Dairy’s Most Overpaid ‘Supernumerary’ – DMI CEO Tom Gallagher (p. 5): 
     
Click Here.


Historic Hardin Farm Listed “For Sale” (p  15):
    
Click Here.

 
Surplus Milk Chaos in Northeast, Mid-East and Upper Midwest (p. 1):
    Big increases in farm milk production have milk hauling and manufacturing plants overwhelmed in these regions.  Huge amounts of milk have been dumped in the Northeast and Mid-East.

What’s Behind Early June 2016 Cheddar Price Boosts at CME??? (P. 1):
   Surprisingly to most, cash Cheddar prices at the Chicago Mercantile Exchange have climbed steadily, starting at the very end of May.  What’s going on?  Strong demand for current production of barrel Cheddar is driving demand.  That’s despite the fact that ample inventories of Cheddar barrels – aged six to 12 months – in in storage.  Problem is: Processors are limited to how much aged barrel Cheddar they may add when making processed cheese products.

Cheeseburger: Symbol of Dairy’s Farm-to-Consumer Price Inequities (p. 1): 
   Over the past four years, dairy produces have seen an up-and-down trends for both their milk and dairy culls/steers.  The Milkweed takes a close look at farm to consumer prices for ground beef and Cheddar cheese during 2013-2015.  Conclusion:  Somebody’s making a L-O-T of money between the farmer and consumer.

CDFA Revises 4b (Cheese Milk) Pricing (p. 2):
    California’s state milk pricing program has permanently revised its formula that values whey powder in the 4b (cheese milk) calculations.  Too late …

May Class III Price Drops to $12.76/Class IV at $13.09(p. 2):
   It’s all in the headline.

Northeast & Mideast April Dumpage:  Huge Increases over 2015’s Totals (p. 3):
   Dairy co-ops in the Northeast milk order dumped over 22 million lbs. of milk in April … after skimming off most of the cream.  Markets in Michigan also dumped record amounts of farm milk.

Grassland Dairy Products Warns Suppliers:  No rbGH/rbST Milk or Milk Products as of 1/1/17 (p. 3):
  
Wisconsin’s biggest dairy processor – Grassland Dairy Products –has advised all suppliers that no milk or dairy materials from herds treated with rbGH will be accepted, as of January 1, 2018.  Besides purchasing large volumes of farm milk, Grassland is also a big buyer of cream and whey products.

Dairy & Food Plants:  The Future is in T-E-S-T-I-N-G (p. 4):
   At a recent day-long seminar hosted by Marshfield Food Safety Labs, the consistent message was that dairy and food processing plants must be ahead of the game when it comes to food safety testing.  The imminent arrival of the federal Food Safety Modernization Act will entail watch-dogging of firm’s sanitary and testing records maintenance.

“Jack-in-the-Box” Hamburger Deaths & Illnesses: U.S. Originally Rejected Contaminated Australian Beef (p. 4):
  An ugly history lesson: “Jack-in-the-Box’s” deadly E. coli outbreak in the early 1990s came from beef originally imported from Australia and rejected by U.S. Customs inspectors.

3 Farm Credit Assns. Talk Merger—Portfolio Value Near $17 Billion (p. 4):
    Three Upper Midwest Farm Credit associations are huddling, talking merger.  Those three are: Badgerland Financial (serving 33 southern Wisconsin counties), AgStar Financial Services (serving Minnesota and northwest Wisconsin), and 1st Farm Credit (serving northern Illinois).  Writer Jan Shepel summarized available information on this news item.

Check-Off Groups Want Immunity from Federal Open Records Laws (p. 4):
    Fourteen agricultural commodity promotion groups overseen by USDA succeeded in convincing the House Appropriations Committee, in its budget bill, to remove commodity promotion groups from rules governing the federal Freedom of Information Act.  What do they have to hide???

Dairy’s Most Overpaid “Supernumerary” – DMI CEO Tom Gallagaher (p. 5):
   Our story of the month.  See link at the top of the page.

“Adopt-A-Dairy-Cow” Program – More Milk for the Hungry (p. 6):
    Writer/dairy woman Jan Shepel details a start-up program involving a Wisconsin-based food program, through Second Harvest Food Bank, that has people able to “adopt” a dairy cow and pledge funds to provide milk at costs to the needy.

Mooney & Brown Before House Ag Subcommittee: Considerable Heat But Little Light … (p. 7):
   Writer Nate Wilson describes recent testimony on dairy before the House Agriculture Subcommittee.  DFA’s board chairman Randy Mooney pontificated about the Dairy Margin Protection Program and blamed Congress for its short-comings.  Univ. of Missouri ag economist Scott Brown explained how turning around dairy’s surplus milk problems would be tough, because many larger operatations simply don’t know how to scale back output.

Russia’s Putin Wages a Non-Military War Against GMOs (p 7):
    Writer Paris Reidhead details recent farm/food policies in Russia, where Vladimir Putin is charging forward against genetically-modified foods.  Interesting …

Three Co-ops Studying Big Michigan Cheese Plant (p. 7):
    Three dairy cooperatives are studying plans for a jointly-owned cheese plant in eastern Michigan.  Those three are: Foremost Farms, Michigan Milk Producers, and Dairy Farmers of America.  Cooperation among those three is a long shot.

Snowville Creamery Marketing Milk and Yogurt from “100% A2/A2 Tested” Cows (p. 8):
    The nation’s most progressive dairy processing firm – Snowville Creamery (Pomeroy, OH) is now selling fluid milk products that are “stacked,”  The attributes of Snowville’s milk include: no-GMOs in cows’ feeds, all “A2/A2 tested cows,” no artificial growth hormones (rbGH/rbST), grass-fed cows, and non-homogenized.  That’s retro!

Analyzing the Northeast Dairy Antitrust Settlement (p. 9):   Writer Joshua Haar (a second-year law student whose parents are Class Representaties in this giant legal skirmish), details his analysis of the Northeast dairy antitrust case.  Haar details many complex aspects and concerns about the conduct of this case.

Explaining the Role of the Chapter 12 Bankruptcy Trustee (p. 9):
  
Writer Mary-Louise Zanoni details the role of the Chapter 12 bankruptcy trustee.  Her article is an excellent lead-in to the next article referenced here.

Kirk Herse’s Battle with “The NY Dairy Farm Bankruptcy Octopus” – Part II (p. 11):
   We continue our reporting on former New York State dairy farmer Kirk Herse against creditors seeking to grab his 176 acres of farmland near Lowville.  The first installment of this series was in the May 2016 issue.  This month’s investigation details how the Chapter 12 Bankruptcy Trustee has apparently sided with the creditors’ questionable actions in this battle.  The bigger question: Chapter 12 Bankruptcy Trustees siphon off up to 10% of all annual payments by debtors.  (13% in instances where annual payments by farmer-debtors exceed $450,000.)  When the farmer/debtor is paying 15-20% of annual payments as combined interest to creditors and trustees’ rake-off, how in Sam Hill is the bankrupt farmer ever supposed to crawl out of the financial hole?

Veterinary Feed Directive Will Change Certain Feed Usage (p. 11):
  Writer Jan Shepel discusses upcoming regulations and reporting requirements involving use of certain medicated feeds for livestock.  These changes will take place on January 1, 2017.  She reports that the biggest impacts will be on swine and poultry producers.  All feed labels designated for “feed efficiency” and “growth promotion” will be discontinued.  The aim is to dramatically reduce use of antibiotics in food creatures’ foods.

R-CALF Group Pushes Cattle Price Drop Inquiry, Opposes TPP (p. 12):
    The “trouble-making” beef producers’ group – R-CALF USA – persists in bringing beef pricing issues to the attention of federal elected officials and regulators.

Judge OKs Motion for Final Approval of Northeast Antitrust Case (p. 12):
    On June 7, federal judge Christina Reiss approved details of the most recent proposed settlement for the long-running Northeast dairy antitrust case.  Defendants Dairy Farmers of America, Inc. and Dairy Marketing Services, LLC (a DFA subsidiary) will pay out $50 million to settle the case, without admitting any wrong-doings.

Cheese & Butter Prices Surge Despite Plenty of Milk & Inventories (p. 13):
   Recent CME cash trading has vested some significant gains for prices of Cheddar.  Butter is rising nicely, also.  And even nonfat dry milk continues its climb out of the sub-basement.  What’s behind Cheddar price increases, what with all the inventories in storage?  Seems that processors can only use a modest amount of aged (over  6 months’) barrel Cheddar in the mix for processed cheese products.  Strong current demand for barrel Cheddar means that prices for fresh product are being driven up … and block Cheddar is following.

Dairy Livestock Situation: Sellers Outnumbering Buyers (p. 14):
    Sellers are long and buyers are short (and tight-fisted) at livestock sales barns lately.  Prices are down.  Absolute top-quality Holstein springers and milk cows are bringing no more than $1,600-$1,800 apiece, depending on the region of the country.

Amid Chaos, Australian Dairy Producers’ Prices Dramatically Reduced (p. 14):
   Chaos, Aussie-style.  The collapse of a major dairy marketer, Murray Golburn, has led to a collapse of farm milk prices in certain parts of Australia.  Murray Golburn is seeking a “claw-back” (i.e., retroactive recapture of milk payments to producers).  Meanwhile, New Zealand’s Fonterra is doing the same dirty trick to its 1,100 producers in Australia.  All kinds of government and private bank bail-outs are coming forth for hard-bitten Aussie dairy producers.

Several Nations Taking Emergency Steps to Aid Dairy Farmers (p. 14):
    In the midst of a global dairy price crisis, several nations are taking special steps to help their dairy farmers.

Historic Hardin Farm Listed “For Sale” (p. 15):
    One of our two “Stories of the Month.”

Kraft Selling Waterlogged “Americano” Singles in Mexico (p. 16):
    Has Kraft no morals.  The so-called “Americano” sliced Singles sold in Mexico list “agua” (water) as their lead ingredient.  What crap!

NY Farmer’s Roadside Barn Signs (p. 16):   Dairyman Donald Dana is not bashful – he puts his opinions on big barn signs alongside busy U.S. Route 11, near Moira … way up in the North Country.


May 2016   Issue No. 442

Inside this months issue …

“The New York State Dairy Farm Bankruptcy Octopus” (p. 6-7): 
     We finally print a years-long probe into a series of farm mortgage holders in New York State.  The primary motive of these mortgage holders seems to have been to bankrupt dairy farmers and seize their land.  Our Story of the Month!

    Click Here.

Dairy: Gushing Red Ink & Eroding Assets’ Values (p. 1):
    The nation is awash with too much milk – especially in the Great Lakes Region.  Too much milk is depressing prices for a range of assets, from cheese to dairy cows.  What a mess

Empire Specialty Cheese Pollutes Tributary of Chatauqua Lake (p. 2):
   Writer Nate Wilson reports the latest mid-adventures of Empire Specialty Cheese, the firm that can’t get much of anything right.  The start-up Italian cheese plant in westernmost New York State was nailed by the state for plant wastes entering a tributary of famed Chatauqua Lake.

WMMB’s James Robson Resigns (p. 2): 
   The long-term CEO of the Wisconsin Milk Marketing Board, James Robson, resigned abruptly in late April, following what amounted to a “no confidence” vote by WMMB’s board.  The Milkweed views Robson as one of the most competent top executives ever in any dairy promotion group.

USDA Cancels July 2016 Cattle Report (p. 2):
    Alleged budget reasons have caused USDA to cancel the valuable July Cattle Report – a semi-annual analysis of the nation’s beef and dairy herds.

April 2016 Class III Price $13.63 – Class IV at $12.68 (p. 2):
   The headline tells it all.

15 Months of Organic, Grass-Based Progress (p. 3):
   Paris Reidhead revisits Maple Hill Creamery.  That dairy firm distributes an array of organic, grass-fed products – fluid milk, yogurt, kefir and cheese.  Maple Hill Creamery’s pay producers to organic, grass-based producers range in the $45/cwt. range – depending upon quality and components.

Wisconsin Dairy Woman Aims for the House (of Representatives) (p. 4):
  
Writer Jan Shepel profiles Sarah Lloyd – a Wisconsin woman who has served on the Wisconsin Milk Marketing Board and the National Dairy Board.  Sarah is seeking the Democratic nomination for the state’s 6th Congressional District race this fall.

R-CALF USA’s Bill Bullard: Questions & Answers (p. 5):
   The CEO of R-CALF USA (a trouble-making bunch of mavericks representing U.S. cattle producers) gives a fact-filled set of answers to R-CALF USA’s recent success in convincing the U.S. Senate Judiciary Committee to call for an investigation of 2015’s slaughter cattle price collapse.  What a well-informed source!

“The New York State Dairy Farm Bankruptcy Octopus” (p. 6-7):
  We finally print a years-long probe into a series of farm mortgage holders in New York State.  The primary motive of these mortgage holders seems to have been to bankrupt dairy farmers and seize their land.  Our Story of the Month!

DFA’s 2015 Audit Features Debt, Nebulous Assets & (Big Negatives) (p. 8):
    Editor Pete Hardin’s ability to knife holes in the annual financial audits of Dairy Farmers of America has never been sharper.  One must wonder, are the auditors and DFA’s lenders out to lunch … or just part of the gravy train?

DairiConcepts: Bargain or White Elephant??? (p. 8):
    On December 31, 2015, DFA acquired its partner’s half-interest in a dairy business named DairiConcepts.  A close look at details of that purchase, as provided in DFA’s 2015 financial audit, raise serious questions about the wisdom of that purchase.

R-CALF USA Wants 205 Cattle Price Collapse Investigated (p. 6):
   The upstart beef producers group – R-CALF USA – is seeking an investigation into last summer’s collapse of slaughter livestock prices.  The beef producers group is claiming undue concentration among beef buyers is destroying competition.

Butter Prices Holding, Cheddar Tumbles & Milk Powder Up Slightly (p. 9):
    Butter prices are holding, nonfat dry milk prices are creeping up from the sub-basement, and Cheddar prices are declining.  Our dairy commodity picture is volatile.

Open Heifer & Baby Calf Prices Mostly Stable, But … (p. 10):
   Prices for many dairy animals are showing the cash-flow stress on U.S. dairy farmers.  Desire to sell animals is strong, inclination to buy is weak.  Baby calves, open heifers and Jersey livestock are generally holding their value.

Zoo-like Evens Preceed Northeast Antitrust Case Fairness Hearing (p. 10):
    May 13 will mark the Fairness Hearing in the long-running Northeast dairy antitrust case.  Expect fireworks.

Too much “New York” stuff??? (p. 11):
    Pete Hardin explains that overt emphasis on events in New York State this month may seek like overkill, but the fundamental issues – both bad and good – should be lessons for all dairy farmers, without regard to where they reside.

Let’s think about honest solutions (p. 11):
    Pete Hardin suggests several ideas to readers for bettering dairy’s situation, and invites ideas from readers.

Hot, Dry Summer Likely for Central U.S. (p. 12):
   At a recent dairy convention, a speaker detailed how rapidly cooling waters in the northern Pacific could translate into a hot dry summer for the central U.S.



April 2016   Issue No. 441

Inside this months issue …

Several Regions Face “Homeless Milk,” Let the Dumping Begin (p. 1): 
     — The Northeast, Mid-East and Central States federal milk orders have okayed pooling of “dumped milk” from April 1 through July 15, 2016.  And the Upper Midwest region will probably see farm milk overflow processing plant capacity.  The U.S. dairy industry is on an insane track that’s busting prices and margins for farms, cooperatives, and cheese plants going to overflow   Get this:  In February 2016, New York State dairy cows produced 7.3% more milk than they did in that same month one year ago, even after “adjusting” for the extra “Leap Year” day.

     Click Here.

Walmart to Build Big Fluid Plant in Indiana (p. 1):
    The nation’s largest food retailer has announced plans to construct a 250,000-square foot fluid milk plant in northeastern Indiana. Many ripple effects will hit the U.S. dairy industry, once this facility is on line in late 2017.

$230 Mil. Cheese Plant Studied for Fair Oaks Farms (p. 1):
   In addition to many planned new constructions and expansions of cheese plants in the eastern quadrant of the U.S., the biggest has yet to be formally announced.  Fair Oaks Farms in Indiana is studying building a $230 million cheese plant.

Green County, Wisconsin Hits a Triple! (p.1): 
   Within the span of a few short weeks, Wisconsin’s Green County has achieved the following:  produced the World’s Champion Cheese, produced the World’s Champion yogurt, and produced the world’s greatest milk-producing cow.

NINE Years Later, FDA Answers rbGH Critics’ Citizen Petition (p. 2):
    Way back in February 2007, a group of critics submitted a Citizen Petition to the federal Food and Drug Administration.  The petitioners sought to halt sale and use of recombinant bovine growth hormone (rbGH, also called rbST).  Nine years later, FDA finally answered that Citizen Petition.  FDA’s reply cited a bushel basket of outdated studies that claimed rbGH use to spur dairy cows’ milk production was perfectly safe.

March 2016 Class III price $13.74 – Class IV $12.74 (p. 2):
   February class prices for manufacturing milk dropped even lower.

USDA Okays Milk “Dumping” in Northeast, Mid-East and Central States (p. 3):
   Facing too much farm milk, milk marketers in several regions of the country have gained USDA’s approval to pool “dumped” milk from April 1 through July 15.  Trouble is: these rules discriminate against firms with independent producers.  One more time, USDA is “kow-towing” to the nation’s big dairy cooperatives.

Wisconsin Artisan Cheese Tops World Championship Contest (p. 4):
  
For the first time in 28 years, a Wisconsin cheese plant won top honors in the World Championship Cheese contest.  Emmi Roth USA’s cheese-making team at Monroe, Wisconsin won the top price with its “Grand Cru Surchoix.”  Writer Jan Shepel covers this event.

New World Yogurt Champion: Sugar River Dairy (p. 4):
   A small Wisconsin yogurt plant’s Whole Milk Plain product took top honors at the recent world championship contest.  Owners Ron and Chris Paris have worked for 14 years to build up their quality product.

Four Big Dairy Processing Projects Announced (p. 5):
   Writer Nate Wilson lists four major dairy plant projects that have been announced recently.  Much new investment in dairy processing plants is taking place.

Natural Products Expo Offers Way Too Much (p. 5):
    Writer Ed Zimmerman reports on food trends he witnessed at the recent “Expo West” event in California.  Yogurt is an “IN” product, and many new high-protein foods are being offered that contain dairy proteins.

Better Butter Data from NASS Desperately Needed (p. 6):
    Pete Hardin analyzes butter industry trends and scorns the lack of transparency in butter inventories from USDA’s “Cold Storage” report. The Cold Storage report includes both domestic and imported products as butter.  Also, imported anhydrous milkfat and butter oil are counted as “butter”  — even though the milk fat in those commodities will never grace the butter dish on American tables.

R-CALF USA Wants 205 Cattle Price Collapse Investigated (p. 6):
   The upstart beef producers group – R-CALF USA – is seeking an investigation into last summer’s collapse of slaughter livestock prices.  The beef producers group is claiming undue concentration among beef buyers is destroying competition.

One Man Successfully Battled Against Cancer … (p. 7):
    An old friend of The Milkweed, who must remain anonymous, relates his successful battle against cancer that had spread throughout his lymph node system and into six organs/glands.  Nine years ago, team of cancer doctors gave “Sam” six months to live, at most.  Nine years later, Sam is alive and kicking.  He used the “Beam Ray” light technology to eliminate cancers from his body.  An amazing story …  The “Beam Ray” dates back about 80 years … and incurred the scorn of the FDA and the American Medical Assn.  One person owning the “Beam Ray” actually went to federal prison for three years for refusing to stop using the light-emitting machine.

“Settling” the Northeast Dairy Antitrust Case:  Try, Try … and Try Again (p. 8):
   Pete Hardin analyzes the behind-the-scenes antics leading up to the latest attempt to gain a settlement in the long-running Northeast Dairy Antitrust case against defendants Dairy Farmers of America and Dairy Marketing Services, Inc.

Hanman’s Own Words Detailed Northeast Dairy Conspiracy (p. 8):
    Way back on September 18, 2000, then DFA President/CEO Gary Hanman made a speech in Kansas City before a group of his co-op’s field personnel.  Hanman bragged, among other things, about how DFA had a deal to force independent Northeast dairy producers into co-op membership.  Because of scrutiny from the U.S. Justice Department at that time, Hanman said that he couldn’t force the issue right then.   But, “[W]e will get that done, given time,” Hanman promised.  In DFA’s top officials own words, the conspiracy to take over milk markets of thousands of Northeast dairy producers was laid out … way back in 2000.  Sounds like “Prior Intent” to commit conspiracy.

What’s Wrong with the Latest Northeast Dairy Antitrust Settlement??? (p. 9):
    Pete Hardin details a few of the perceived shortcomings in the proposed Settlement for the Northeast Dairy Antitrust case.

Donna Hall: Removed as Class Representative (p. 9):
    The last thing that defendants’ DFA and DMS would have wanted was an intelligent, well-spoken Pennsylvania dairy farm grandmother taking the witness stand in front of a jury of Vermont citizens in the Northeast antitrust case.  Worse yet, that “dairy grandma” – Donna Hall – had appeared on Lou Dobbs’ CNN national television news, back when DFA/DMS pirated her milk market from Farmland Dairies.  And then … Donna and dozens of other Pennsylvania got short-changed in payments for their butterfat.  Donna Hall WAS a Class Representative in the Northeast antitrust case.  But mid-stream, the geographic boundaries for claimants were “Gerry-mandered” so Donna forfeited all claims in the case.  Darn.  Donna would have been a compelling witness!

Letter to Northeast Dairy Farmers … (p. 9):
   A young man studying graduate-level law and accounting – Jonathan Haar – has written a letter to Northeast dairy producers outlining his analyses of problems with the proposed settlement of the regional dairy antitrust case.   He’s urging Northeast dairy farmers with claims the case to write the presiding judge, objecting to the Settlement now scheduled for a Fairness Hearing on May 13 in Burlington, VT.

CPI Database Shows Prices Consumers Pay for Milk and Various Cheeses (p. 11):
   Jan Shepel shows how consumers’ costs for cheese products – particularly natural cheese – have not come down much in the past year-plus, despite far lower commodity prices for cheese.  It’s the same old story …

Economist: DMPP a ‘Junk” Program that Isn’t Working for Dairy Farmers (p. 11):
   Writer Jan Shepel analyzes comments by Daniel Basse – president of AgResource Company – in which Basse wrote off as worthless the “Dairy Margin Protection Program” offered to dairy producers by USDA.

Drought-Targeting Crop Advice for Livestock Producers (p. 12):
   Contributor Paris Reidhead details strategies for producing crops during periods of moisture scarcity.  Small grains, such as sorghum and millet – thrive when water-needy corn doesn’t do well.

Butter Prices Strengthen, Milk Powder Weaker, Cheese Under Pressure (P. 13):
   Pete Hardin takes a look at the dairy commodity scene.  The only good news is that butter prices are solid, aming growing demand from U.S. consumers.

Dairy Livestock Prices Generally Down (p. 14):
    Pete Hardin surveys the current dairy livestock picture, talking with auction house operators from several regions.  Really nice animals are holding their value, demand for Jerseys and Jersey-crosses is solid, even perhaps pushing prices up,  Buyers are showing interest in good open heifers.  But in general, the red ink cash-flow situation on U.S. dairy farmers is pulling down dairy livestock prices.

Great Lakes Region:  Dairy’s Emerging Epicenter (p. 14):
    The large majority of new dairy plant construction and announced plans to construct are located in the extended Great Lakes Basin.  Why?  Follow the water!

Déjà vu (early 1980s) all over again? (p. 15):
    Pete Hardin reflects on a mid-March driving trip back to the Northeast.  He met with a lot of very concerned dairy farmers, and puzzles about how much farm machinery and new automobiles are found on dealerships’ lots across the Northeast and Midwest.  To Hardin, he sees a possible replay of the early 1980s.

Dairy’s “industrialization” (p. 15):
   Worry is that dairy is in a sudden rush towards industrialization that wiped out many small and ,medium-sized producers in the pork and poultry industries.

Another farm milk supply control “tool” (p. 15):
  Pete Hardin suggests a “spring take-out/fall put-back” system of taking incentives away from spring flush milk output.  Why not $1.25 or $1.50/cwt. deducted in the spring and paid back in the fall?  Whether for individual cooperatives or for federal milk orders, that’s one way to swing seasonal supplies to better conform with manufacturing plant capacities and consumer demand.

“March Miracle”  — Big Recharge for California’s Reservoirs & Snow Pack (p. 16):
   Truly miraculous precipitation and snow melt helped refill three big reservoirs in northern California, including the state’s two biggest reservoirs – Shasta Reservoir and Lake Oroville.  As of April 7, 2016, California’s reservoirs were up to 85% of normal capacity … with much better moisture contained in mountain snow packs to further refill some reservoirs.  NO … California’s epic Drought is far from over.  But the state’s water situation is looking much better than it did, even one month ago.

March 2016   Issue No. 440

Inside this months issue …

U.S. a “Dumping Ground” in Unsettled Dairy World (p. 1):  Our “Story of the Month.”
     Click Here.


USDA May Cancel Scheduled July 2016 Cattle Report (p. 1):
    Budget woes are forcing senior USDA officials to consider canceling the July 2016 Cattle Report.  That report is a key source of dairy and beef livestock trends.  Don’t like loss of the July Cattle Report?  Call Mike Reilly at 202-720-2707 and give him an earful.

“Wood” in Parmesan: Dairy’s Latste Food Integrity Scandal (p. 2):
   (n mid-February, Bloomberg News reported test results showing that major brands of “Graded Parmesan” contained illegally high levels of “microcrystalline cellulose” – a wood derivative.

Huge Imports Challenge U.S. Producers’ Prices, Orgaic Grain Sector almost as Complex as Dairy! (p. 2): 
    70% of all organic soybeans processed or fed in the U.S. are imported.  And 40% of all organic corn processed or fed in the U.S. is imported.  The strong U.S. dollar threatens to bring in more organic imports.

Feb. 2016 Class III Price $13.80 – Class IV Price $13.49. (p. 2):
    The headline tells the whole story.

Dairy Cull cow Prices Fell in 2015’s Second Half, But Consumer’s Ground Beef Prices Stayed High (p. 3):
    Dairy farmer/writer Jan Shepel analyzes price trends for dairy cull cows and consumers’ costs for hamburger in the supermarket.  In 2015’s second half, somebody made a lot of money keeping hamburger prices high, when slaughter cow prices nose-dived.

PPD Info  & rbST-Free Premiums Vanish from Michigan Milk’s Check Stubs (p. 3):
   Michigan Milk Producers Assn. is reducing information and premiums on members’ milk checks.  For January 2016, MMPA “erased” references to monthly “Producer Price Differentials “PPDs”).  (In December 2015, MMPA “disappeared” about $1.60/cwt. between he Mid-East federal order’s PPD and what MMPA paid out.  Also gone without explanation from January 2016 milk check stubs:; the $0.13/cwt. premium for producing “rbST-Free” milk.

National Milk Producers’ Board Endorses TPP and Questions TTIP (p. 4):
  
Despite a lack of clear benefits for the U.S> dairy industry, the dairy co-op lobby – National Milk Producers Federation – has endorsed the controversial Trans Pacific Partnership “Free Trade” deal.

Early March ’16 Reservoir & Snow Pack Data: California Needs B-I-G Recharge (p. 4):
   Good thing that as March progressed, California got a good shot of moisture, because the early March, the state’s reservoirs were way below normal water levels (53%) and the mountains snow pack was only 83% or normal.

Wisconsin Milk Marketing Board Boosts Social Media Presence (p. 5):
   Jan Shepel reports on social media investments by the Wisconsin Milk Marketing Board are focused on expanding consumers’ knowledge and enjoyment of cheese.  Sophisticated social media outreach is an evolving frontier in dairy outreach.

GMO Foods Controversy?  Opportunity for EnviroLogix Inc.! (p. 6-7):
    Paris Reidhead goes into depth describing the controversy over genetically modified foods, and how a Maine-based testing firm is providing the food and grain industries with quick tools to detect presence of genetically-modified corn ad soybeans in shipments and products.

GMOs: Still Running … But No Longer Able to Hide (p. 7):
    Paris Reidhead updates readers on the latest info in the genetically modified foods controversy, and notes that greater availability of testing equipment will allow greater scrutiny of what’s in our food products.

Could South American Chilled  & Frozen Beef Spread Zika Virus North? (p. 7):
   Little is known about the dreaded Zika virus.  Paris Reidhead explores questions about whether its possible to transmit that virus through the meat products of cattle from infected areas of South America.

Dairyman Disgusted by NMPF’s Animal Welfare Agenda (p. 8):
    A dairy producer for over 40 years, Don Mielke (Menasha, Wisconsin) reports his disgust at the “education” presentation at a recent Wisconsin fieldmen’s conference.  Don has no patience with overpaid dairy industry personnel preaching the animal rights agenda.

Finally!  Empire Specialty Cheese Vacates Amish Cheese Plant (p. 8):
   Writer Nate Wilson reports on cheesy events in the western tip of New York State.  Empire Specialty Cheese has finally started making and selling cheese at its new plant, and that firm finally vacated the cheese plant it had leased from an Amish community in western New York.

Dairy Commodity Prices Relatively Flat, Plenty of Production (p. 9):
    Pete Hardin surveys the dairy commodity scene.  Production is high, and inventories are increasing.

Prices Down at Buttke Auction in North Carolina (p. 10):
    The remaining dairy herd assembled by North Carolina’s Arlin Buttke was sold at auction in late February.  Buttke’s premier herd of Holsteins brought about an estimated $500/head less than what would have been gained two or three months ago, a local expert estimated.

Meet the National Dairy Producers Organization (NDPO) (p. 10):
    The leaders of the NDPO – a group of concerned dairy farmers – explain their organization and its goals.

Cedar Summit Farm’s Dairy Processing Equipment (p. 10):
   The near-complete package of dairy processing equipment for Cedar Summit Farm is for sale.  That organic, producer-handler ceased operations last summer.  For more info, call Dave Minar at 952-212-9506.

I-N-T-E-G-R-I-T-Y of dairy is strained … (p. 11):
   Dairy has a long way to come back in rebuilding the integrity of this industry, Pete Hardin explains.

Surplus?  Drain the skim, eliminate volume premiums (p. 11):
   Too much milk?  There are some easier solutions, such as draining the skim milk off the bottom of the bulk tank, and getting rid of volume premiums paid big dairies.  P.S.  Quit using Posilac, also.

Is Kraft’s “Fat Free Mozzarella” Really Mozzarella??? (p. 12):
   The Milkweed takes a close look at a Kraft-Heinz product,-- Kraft’s “Fat Free Mozzarella” in shreds.  There is no FDA standard of identity for “Fat Free Mozzarella.”  And the cheese portion contains yeast.  Kraft’s ingredients label even notes that yeast is … “Ingredient Not In Regular Mozzarella Cheese.”

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February 2016   Issue No. 439

Inside this months issue …

RICO!  Milk Powder Lawsuit Turns Against DairyAmerica & CDI (p. 1):
    On January 19,  A stunning decision was issued  by Judge Anthony W. Ishii in the long-running cash involving milk powder price misreporting that dates back to 2006 and 2007.  Judge Ishii  restored California Dairies, Inc. as a defendant.  And Judge Ishii opened the doors wide for plaintiffs’ attorneys to elevate the case to a RICO matter.  RICO is a body of federal law that allows victims of mafia-like extortions to recover triple damages and legal fees.
    Click Here.

Recent Dairy Trade Mission to Cuba: Q&A with Bob Wolter  (p. 1):
    Questions and Answers interview with Bob Wolter, Creative Business Services, who took a recent nine day mission dairy trade trip to Cuba.  Cuba's agriculture sector is very under developed. 
    Click Here.


McDonald’s Smacked with Lawsuit Alleging “Adulterated” Mozzarella Sticks (p. 1):

    A class action lawsuit has been filed against McDonald’s Corp. in California, alleging that McDonald’s “Mozzarella Sticks” contain an illegal material -- starch. The case seeks national Class Action status.  McDonald’s has vowed to vigorously fight the legal challenge, claiming that the products contain only 100% low-moisture, part-skim Mozzarella.

Dairy Producers in New Mexico and Texas Bounce Back from Winterstorm Goliath (p. 2):
   Writer Nate Wilson follows up with reports from the blizzard-ravaged dairy region of west Texas and New Mexico.

Signatory Nations Formalize TPP Trade Deal (p. 2): 
    The Trans Pacific Partnership was recently signed.  Now the question becomes: Will the U.S. Congress pass the “Free-Trade” bill?

Jan ’16 FMMO Class Prices Decline: Class III Price $13.72 – Class IV $13.31 (P. 2):
    Ouch.  The headline says it all.

Where’s the Mozzarella?  Some McDonald’s “Mozzarella Sticks” are Hollow! (p. 3):
    A flurry of social media posts include pictures and unhappy comments from customers about some McDonald’s “Mozzarella Sticks” being hollow, or partially filled with cheese.

McDonald’s Early, Angry Responses to Mozzarella Sticks Lawsuit & Publicity (p. 3):
   McDonald’s Corp. officials have denied that their “Mozzarella Sticks” contain starch.  They claim that the cheese portion of the product is 100% low-moisture part-skim Mozzarella.

With U.S. Growers Making All Kinds of Meat and Exports Down, Beef Prices Stay Low (p. 4):
  
Writer Jan Shepel reviews beef industry trends as presented by Dr. Brenda Boetel (UW-River Falls) at the recent UW agricultural outlook forum.

Grain Producers Facing Lower Prices, Also (p. 4):
   Jan Shepel details corn and soybean data trends as presented at the recent UW agricultural outlook forum.

Behnke Family’s “Gigi” Breaks National Production Average With 365-day Record of 74.650 Pounds of Milk (p. 5-6):
   The Behnke family dairy of Brooklyn, Wisconsin has a cow, “Gigi,” who just set the record for milk production for a 365-day milking.  Jan Shepel profiles the family and their now-famous Holstein.

KoKoski Family Unites Land, Jersey Cows, On-Farm Bottling … and Community (p. 6-7):
    Paris Reidhead visits the Kokoski family’s Mapleline Farm near Hadley, Massachusetts.  The Kokoski herd is comprised of Jersey cattle.  Milk from the herd is bottled on the farm and distributed locally.

Northeast FMMO Milk Dumping Spiked in December (p. 7):
    Nate Wilson analyzes data from the Northeast federal milk order about milk dumped in December 2015.  By our best estimates, about $1.35 million lbs. of cream were “skimmed” from 17 million lbs. of “dumped” milk in the Northeast during the period December 16 to December 31, 2015.

The ABCs of Butter Explained by Dr. Robert L. Bradley, Jr., UW-Madison Dairy Food Scientist Emeritus (p. 8-9):
   Butter is our one “hot” dairy commodity.  Dr. Robert J. Bradley explains many technical details about butter.

The Big Fat Surprise --Why Butter, Meat & Cheese Belong in a Healthy Diet (p. 9-10):
    We review this important book by author Nina Teicholz.  She traces the history of the faulty data that pushed the U.S. medical community to turn its back on butter, starting in the 1950s and 1960s.  Teicholz’s book, which was issued in 2014, is a Herculean research project – important reading for folks in the dairy industry.
Fresh Buttery Taste Spread?  No Thank You, Land O’Lakes (p. 10):  We take a close look at this “spread” sold by Land O’Lakes, and puzzle how a dairy farmers cooperative founded on the goal f selling quality butter can market “stuff” like this product.

WI Township’s Report Details CAFO Environmental and Health Impacts (p. 11):
   We report on a recent study commissioned by Sylvester Township, Wisconsin.  That study focused on the environmental and human health concerns about land-spreading of large quantities of animal waste.  We note the Website at which the full, 120-page report is available.

Is USDA at Cross-Purposes on Foot and Mouth Disease Issues? (p. 12):
    Pete Hardin Writes skeptically about the Foot and Mouth Disease threat.  On one hand, USDA is having state agriculture department officials conduct regional “practice drills” in the event of a FMD outbreak in the U.S.  On the other hand, USDA is sanctioning imports of beef from FMD-infected countries in South America and Africa.

Butter Propping Up Dairy Commodity Price Complex (p. 13):
    In our dairy commodity review, we see butter as the only commodity was price strength.  The dairy protein powder complex is a fiasco.

Prices Holding fo Good Livestock, Cull Prices Up a Bit (p. 14):
    We’re closely watching dairy livestock prices.  Good animals are basically holding their own, and prices paid for good cull cows have risen in some markets.  But few buyers ar attracted to dairy livestock with any perceived problems.

World markets, world market prices … & other B.S. (p. 15):
   Pete Hardin goes a bit ballistic at dairy experts claiming that U.S. demand for dairy products is “flat” … as well as dairy leaders who claim that U.S. producers must be able financially survive at world market prices.

One dairywoman’s frustrations with current milk prices (p. 15):
   Our contributor and friend Jan Shepel speaks her mind about the low milk prices now facing dairy producers.  Like many others, she’s worried about the future of her dairy farm and isn’t afraid to admit it.

Q&A with Bob Wolter: Recent Dairy Trade Mission to Cuba (p. 126):
   Green Bay businessman Bob Wolter recently helped lead a dairy trade mission to Cuba.  Bob answers questions about the problems and opportunities he saw in that neighboring island nation.

Could Brazilian Beef Imports Pose Zika Virus Threat (16):
   Questions, not answers, about whether Zika virus could be imported through beef brought into this country from Brazil.  Pete Hardin raises questions, and we’ll rely on Paris Reidhead for some hoped-for answers in next month’s issue.


January 2016   Issue No. 438

Inside this months issue …

2016: Uncertainty for Dairy Producers (p. 1):
    We start 2016 with low dairy commodity (except for butter) and farm mil price (except for butterfat.)  Pete Hardin explains why it’s wrong to write off 2016 as another low milk price year.  One major reason not to panic: Adverese weather events are challenging two major dairy regions of the country – California and the Southwest.
    Click Here.


2016 Trends and Predictions (p. 1):

    Analyst Ed Zimmerman offers his insights about trends to watch in 2014, including: continued strong butter demand, more demand for higher-fat beverage milk products, and California’s dairy production machine gearing up after finally receiving more during the past several weeks..

Analyst Ed Zimmerman offers his insights about trends to watch in 2014, including: continued strong butter demand, more demand for higher-fat beverage milk products, and California’s dairy production machine gearing up after finally receiving more during the past several weeks:  Dairy farmer/writer Jan Shepel surveys opinions in the beef industry for reasons why we’ve seen such a decline in prices for slaughter cattle (dairy and beef) in the past five or six months.

December Class III Price $14.44/Class IV $15.52 (p. 2):
   Federal milk ordser class prices for December headed down again.  The headline tells it all.

TPP’s Impact on U.S. Diary: Darkness, Sounds of Silence (p. 3):
   Anybody else notice how absolutely silent dairy leaders have been regarding any “benefits” form the Trans Pacific Partnership?  Congress will vote in early 2016 on whether to accept that “Free-Trade” package negotiated by the Obama administration.

Accesss to U.S. Dairy Markets: Historic Goal of NZ, EU (p. 3):   
    Pete Hardin tells the history of the infamous “Flanigan Report” – the Nixon White House’s secret trade negotiating strategy that would have sold U.S. dairy farmers down the river.  Hardin’s point: Access to U.S. consumer dairy product markets has been a goal of dairy exporting nations for more than 40 years.

CA’s Water Reserves Depleted After Four Straight Drought Years (P. 4):
    Writer Jan Shepel reports on presentations about California’s water situation and its potential impacts on agriculture.

Clarification: What to Call McDonald’s Mozzarella Sticks? (p. 5):
    Pete Hardin follows up last month’s cover story about McDonald’s suspicious Mozzarella Sticks.  Hardin lists all the different names that McDonald’s calls that “stuff.”  And after receiving a box of the product (as shipped to McDonald’s stores), Hardin reports on the list of ingredients as well as one dairy plant from which the Mozzarella Sticks have been sent to McDonald’s stores.  That plant: Sargento Cheese’s facility at Kiel, Wisconsin.

PPDs: The Interesection of Confusion and Grand Larceny (p. 6):
    Pete Hardin explores the “Producer Price Differentials” in federal milk orders and how they’re a great source of confusion as well as a way fo some dairy marketers to make part of the producers’ milk check disappear. 

Swiss Valley Farms’ PPDs Drained Members’ Milk Checks in 2015 (p. 7):
   For 2015’s first 10 months, the PPD’s paid by Swiss Valley Farms to its Order 32 producers came out $.99/cwt. lower than the monthly PPDs cited by the milk order.  Low PPDs are just one way that Swiss Valley Farms seems to make members’ money disappear.

Michigan Milk Producers Threatens Members: Sign Up for F.A.R.M. or Lose Your Milk Markets (p. 7):
   We reprint an item from the November 2015 Michigan Milk Producers’ member newsletter, which warns members they have to sign up for and comply with the dictates of National Milk Producers Federation dairy livestock care protocols.

Winterstorm “Goliath” Kills 30-35,000 Milk Cows in New Mexico & Texas (p. 8-9):  What a mess!
    This report, and related stories, are available on line as or “Story of the month.”

Solvita: Second New Kid on Agriculture’s Testing Block (p. 10-11):
    Paris Reidhead details new testing for measuring the micro-organism content of soils.  Populations of soil microbiota are increasingly recognized as important for fertility and crop yields.

Muller-Quaker Yogurt Plant Kaput: DFA Picks Up Pieces (p. 11):
   As predicted in the November 2015 issue of The Milkweed, the struggling Muller-Quaker yogurt plant at Batavia, New York closed its doors and Dairy Farmers of America will purchase the relataively new facility.  Muller-Quaker did about everything wrong as a late entrant to the overly competitive U.S. yogurt market.

Will 2016 Mark Death of Wisconsin’s Town Board Powers? (p. 12):
    Tony Ends details legislative proposals in Wisconsin that would basically strip local township boards of any powers involving land use oversight and environmental requirements on businesses, including agriculture.

Butter’s Price Strength Preventing Complete Market Collapse (p. 13):
   In Pete Hardin’s dairy commodity analysis, butter’s price strength is about the only good news around.  With butter prices at CME holding above $2.00/lb., and strong consumer demand for butter, things are looking up for that commodity.  At CME, Cheddar is bumbling along in the $1.50/cwt. range and nonfat dry milk cash prices are “retro” – back in the mid-1970s’ range.

Dairy Livestock Prices Generally Declining, with Some Exceptions (p. 14):
    Except for top-end cows, springing heifers, Jerseys, and good open heifers, dairy livestock prices are generally declining, Pee Hardin reports.
The collapse of slaughter cow prices has dropped dairy cull prices and values for bull calves.

Retail Hamburger & Steak Prices Remain Top—Shelf (p. 14):
    Jan Shepel covers prices for hamburger and steaks reported by the federal government’s Consumer Price Index.  Guess what?  U.S. shoppers paid almost as much for hamburger and steaks at supermarkets in November 2015 as they did one year ago!  Somebody between the farmer and consumer is getting fat!

Tail-Docking?  Get serious about dairy’s wellness issues (p. 15):
    Pete Hardin blasts leaders of the U.S. dairy industry for worrying about animal rights’ activists’ clap-trap over issues such as tail-docking.  Hardin also reports that dairy has failed to address animal health problems – such as Johne’s Disease, recombinant bovine growth hormone, and bovine leucosis.  Those items entail human health concerns, which should be addressed.

Map of Global Sea Surface Temperatures Anomalies (p. 16):
    The violent, aberrant weather events hitting the U.S. in recent weeks and months has a commonality – warmer ocean temperatures.  The El Nino event – hot Pacific Ocean temperatures at the Equator – show up clearly in this recent map.

Highlights of Past Issues...

December 2015  Issue No. 437

Story of the Month:  2016 Milk & Commodity Prices?  Pay Attention to California! (p. 1):
    Let’s wait abit and watch California’s dairy tends, before believing these low ball milk prices projected for 2016.
    Click Here.


McDonald’s Breaded Mozzarella Sticks: Adulterated & Misbranded (p. 1):

    The Milkweed has conducted laboratory tests on the cheese core portion of McDonald’s “Breaded Mozzarella Sticks.”  Those tests revealed the presence of 3.76% starch.  Starch is not an allowable ingredient, under FDA’s standard of identity for Mozzarella.  This story could blow sky-high.

Additional  (p. 2):
    The November value for Class III (cheese) milk in the federal milk order system declined modestly in November.  Meanwhile, on the strength of butter prices, the Class IV (butter-powder) milk price jumped up $.46/cwt.

Dairy Promotion Check-Off … “created McDonald’s mozzarella sticks” (p. 3):
   Hard to believe, but U.S. dairy farmers’ promotion check-off dollars funded creation of McDonald’s phony “Breaded Mozzarella Sticks.”  No less an authority than Dairy Management, Inc.’s CEO Tom Gallagher recently crowed that group was responsible for McDonald’s adulterated, misbranded product.

FDA Standards of Identity Are Explicit: Only Approved Ingredients (p. 3):   
    We directly quote the following definitions from FDA rules:  adulteration, mislabeling, and Mozzarella’s standards of identity.

Labor, Farm Organizations Report Deficiencies in FPP Trade Pact (p. 4):
    Writer/dairy woman Jan Shepel analyzes criticisms of the recently concluded Trans Pacific Partnership.  That “Free-Trade” pact will go to the U.S. Congress in early January 2016 for approval.  Jan also analyzes concerns about the TPP from the perspective of the Canadian dairy industry.

Obama’s TPP Legacy Endangered by WTO Ruling Against U.S. “COOL” Law (p. 5):
    Writer Nate Wilson analyzes the problem facing the Obama administration’s trade policies.  On one hand, President Obama lashed out at critics of the Trans Pacific Partnership last spring, claiming that critics were wrong to argue that “Free-Trade” deals impaired this nation’s self-governance.  But now that the World Trade Organization has ruled that the U.S. must deep-six our “Country Of Origin Labeling” laws for meat products, it’s clear that distant global tribunals may in fact dictate U.S. laws.  Interesting …

Why Should Dairy Farmers Be Forced to Follow NMPF’s Lead? (p. 5):
    Down how many bad paths is the National Milk Producers Federation leading U.S. dairy farmers???  Let’s count ‘em: the Dairy Margin Protection Program, the F.A.R.M. “animal welfare” inspections, abuse of the “REAL® Seal, and NMPF’s “latest” – asking Congress to kill the “COOL” meat-labeling laws. 

Dick Smith – Old-School Milk Inspector – Hangs Up His Clipboard and Speaks His Mind (pages 6-7):
    Paris Reidhead interviews Dick Smith, a dairy plant field man who has retired after 45 years on the job in central New York.  Dick voices a lot of opinions and insights about a lot of subjects … from Posilac and the P.I. Count to “animal welfare” proponents.

Big Gov’t Subsidy for Kraft/Heinz in New York (p. 7):
   Kraft/Heinz announced closings of three NYS dairy plants, with a loss of about 900 jobs.  Kraft/Heinz had intended to expand its Lowville, NY.  To save face, New York State pliticians like Gov. Andrew Cuomo and U.S. Senator Charles Schumer cooked up a scheme to match, dollar-for-dollar, all Kraft/Heinz costs to expand the Lowville plant and add 100 more jobs.  Net job loss: 800.

Fear of FMD Warranted in Opposing Beef Imports from Namibia (p. 8):
    Jan Shepel details criticisms of USDA Secretary Tom Vilsack’s dumbest move yet: Importing beef from the African country of Namibia.  Namibia has already had a Foot-and-Mouth Disease outbreak in 2015!  Jan quotes from numerous opposing comments on this latest brain-dead scheme from the “Free-Traitors” in Washington, D.C.

Butter Finally Starts Sliding, Cheddar & Nonfat Prices Also Down (p. 9):
    Pete Hardin reviews the dairy commodity scene.  Demand for butter and cream is strong.  Cheese prices are slipping, due in part to pressures from almost no remaining warehouse capacity in the Northwest.

Dairy Livestock Prices Generally Holding, Except for Culls (p. 10):
   We review the dairy livestock picture.  Declining prices for dairy cull cows is the big problem, lately.  That price decline leads to serious speculation about undue market share controlled by the nation’s largest buyer of slaughter cattle.

Dairy’s “Animal Welfare” Agenda Going Bonkers (p. 10):
    How many more overpaid “experts” going farm-to-farm, telling dairy farmers how to run their businesses, do we need?  No tail-docking?  We learn some farmers with robotic milkers dock tails, because sometimes the robot’s electronic eye will attach one of the teat cups to the cow’s tail!

Adulteration + misbranding = F-R-A-U-D (p. 11):
   Pete Hardin shares his rather pointed opinions about McDonald’s adulterated/misbranded Mozzarella and the stupidity of Dairy Management, Inc.’s using farmers promotion dollars to develop that illegal product.

Only 12 pages, but … (p. 11):
    Pete Hardin shares some of his year-end musings.

Just One PowerPoint Panel Foretold So Much … (p. 12):
    Late last April, at a dairy conference, a meteorologist showed a global map of ocean temperatures.  Those higher temperatures accurately presaged aberrant weather events that have since occurred.

a2 Milk Company: Strong Sales Growth in Infant Formula Products (p. 12):
    The a2 Milk Company’s recent annual meeting provided a fresh set of data for this fast-growing company based in New Zealand.  Sales of the firm’s Platinum® infant formulas have grown by about 350% during the first four months of fiscal 2016, compared to the prior year.


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.

October 2015  Issue No. 435

Inside this months issue …

Butter Price Gyrations Beg Rational Explanations (p. 1):
    During the past three weeks, Grade AA butter prices traded at the Chicago Mercantile Exchange have zoomed to an all-time peak ($3.1350/lb.) and then dropped by nearly $.80/lb.  Pete Hardin takes a long look at butter price events and other market trends 
    Click Here.

June-July 2015: $4 Million Grand Larceny by Northeast “Cream Separators”(p. 1):
   Remember all the “dumped” milk in the Northeast in June and July 2015?  The Milkweed estimates that 1.2 million lbs. of butter “disappeared” in that dumping.  Our story of the month.

Earlier Reports of TPP’s Death Appear Greatly Exaggerated (p. 2):
   Nate Wilson writes an update of the surprising events that came together to create the 12-nation, Trans Pacific Partnership trade deal in early October.

Analyst Finds Few TPP Benefits for U.S. Dairy Farmers (p. 2):
    Penn State dairy educator Matt Haan analyzes the recent TPP deal, looking for impact on U.S. dairy producers’ markets.  Haan can’t find much in the way of positive results for our nation’s dairy producers.

Sept. 2015 Class III Price $15.82 – Class IV $15.08 (p. 2):
    The headline tells the story for September 2015 manufacturing milk class prices in USDA’s federal order program.

August Milk Dumpings in Orders 1 & 33 Back to “Normal” (3):
    Nate Wilson reports that, almost miraculously, there were no extra volumes of farm milk dumped in federal orders 1 (Northeast) and 33 (Mid-East).  Farm milk supplies have turned tight in the Northeast, after months of “dumping.”

Empire Specialty Cheese – More of the Same (p.3):
    Once again, the troubled Empire Specialty Cheese plant project in western New York State has missed a promised “start up” date.  It’s mid-October and the NYS Dep’t of Agriculture & Markets cannot state that the Empire Specialty Cheese plant has passed needed inspections.  One other problem: Empire is almost two years late for payment of school and property taxes – a looming obligation of more than $90 million.

Big, New Barrel Cheese Plant Starting Soon in Southwest Wisconsin (p. 4):
    In 2015’s fourth quarter, owners expect that a 1.7 million lb./day capacity barrel cheese plant will start operations near Darlington, Wisconsin.

Wisconsin Milk Marketing Board Helping Push Cheese Curds’ Demand (p. 5):
   The Wisconsin Milk Marketing Board (WMMB) is promoting cheese curd consumption on several fronts.  Retail cheese curd sales are up 20% in the past year.  That’s amazing.  WMMB is also partnering with restaurant chains to boost curd sales.

TTNDFD is the Fiber Digestibility Lab Assay Method Most Preferred by Dairy Cows (p. 6):
    Paris Reidhead profiles a new dairy nutrition analysis that better predicts dairy cows’ response to measures of fiber digestibility.  The relatively new test, called “Total Track Neutral Detergent Fiber Digestibility (TTNDFD) opens a new chapter in measuring crops’ milk-producing capabilities.

California’s Newly-Emerging, Sustainable Organic Dairy Market (p. 7):
    Writer Ed Zimmerman details the background and milk check-boosting results (about $8/cwt.) that were achieved when organic dairy producers in California marketed their milk commonly.

DFA Breaks Ground in Generous Garden City, KS (p. 7):
   Chinese investors bailed out of the project.  So only the last minute assumption of some $240 million in debt by the liberal taxpayers of Garden City, Kansas has allowed Dairy Farmers of America to break ground on a dairy plant project that’s grown in cost estimates to around $350 million.  Nate Wilson how DFA is plunging forward on this project.

These Wisconsin Ag Bankers Speak Their Clients’ Language (p. 8-9):
    Writer Jan Shepel profiles two agricultural bankers based in Brooklyn, Wisconsin.  These bankers wear many hats, as moms, dairy farm family members, and ag lenders.  Rene Johnson and Jill Uhe offer insights into the communications necessary between agricultural lenders and their clients.

NMPF: “MMP is function as it was intended.” (p. 9):
    The Milkweed takes to task a string of recent comments by Jim Mulhern, CEO/President of the National Milk Producers Federation, about how USDA’s Dairy Margin Protection Program (DMPP) is working “as intended.”  DMPP – cooked up by NMPF over almost four years – is widely scorned by dairy farmers as being completely worthless (like NMPF).

Sworn Testimony of Ralph Douglas White, June 18, 2015 (p. 10-11):
    Plaintiffs’ lawyers in the long-running milk “powder mis-reporting case” recently submitted to the court a sworn statement by defendant DairyAmerica’s former sales manager.  In that sworn statement, R. Douglas White detailed how for a long period, management of DairyAmerica submitted erroneous reports on weekly nonfat dry milk sales prices.

“Whistle-Blower” Tells All in Milk Powder Price-Misreporting Case (p. 11-12):
    The Milkweed analyzes the sworn statement of R. Douglas White (see above) involving DairyAmerica’s management submitting erroneous weekly milk powder price reporting data to USDA.

DFA Closing Borden’s Cheese Plant at Plymouth, WI (p. 12):
    DFA is closing the processed cheese plant at Plymouth, Wisconsin that has operated under the Borden’s label for many decades.  DFA is a distant competitor in the processed cheese category – a category of cheese demand that’s shrinking.

Butter Up/Down, NFDM Price Rise, Cheddar Stagnant (p. 13):
    It’s been a volatile past month for dairy commodities.  Butter prices skyrocketed and then crashed.  Milk powder prices are improving modestly.

Dairy Livestock Prices Generally Heading South (p. 14):
    Prices for cull dairy cows, dairy bull calves, open heifers and Jerseys are all headed south for the time being.  Declining prices paid in the beef industry, in tandem with lower farm milk prices, have taken the shine off most dairy livestock values.

Taking care of business at home … (p. 15):
    The bloom is off the export rose,and the U.S. dairy had better starting finding novel ways to sell more dairy products to U.S. consumers.  Pete Hardin offers several ideas, including: cheese curds, better butter marketing, direct-to-consumer cheese sales, A2 milk, and “Grass-fed” dairy products. 

McDonald’s “Baked Mozzarella Sticks” Barely 50% Cheese (p. 16):
    The Milkweed takes a close look at McDonald’s new “Baked Mozzarella Sticks.”  We separated the cheese portion from the breading and found that the cheese totaled only 50.8% by weight of the total product.  This product is a overpriced rip-off.

“Heifer-Plus® Boosts Percent of Female Calves (p. 16):
    At World Dairy Expo, one of the exhibitors was “Heifer-Plus®.  That firm sells small vials of a blue powder that slow down male sperm and boost the rate of female calves delivered to about 75% (or more).  This product allows the farmer to use any semen he or she may desire for their cows.

September 2015  Issue No. 434

Inside this months issue …

Butter Better: McDonald’s to Quit Use of Margarine & Butter Oil (p. 1):
    McDonald’s franchises will eliminate margarine and veggie oils, in a shift to higher-quality butter.  Industry sources estimate that move will add at least 25 million lbs. of annual consumption for butter. 
    Click Here.

Butter Is, and Will Be, Dairy’s Price Driver (p. 1):
    Strong demand for butter and high-milk fast products is driving up butter prices.  And butter prices drive up farm milk prices … as well as retail dairy costs.

Sept. 30 Deadline for DMPP Sign-Ups (p. 2):
   Dairy farmers have until September 30 to sign up for the 2016 Dairy Margin Protection Program (DMPP).  Due to that program’s complete failed performance, Pete Hardin advises farmers to stay home and breed their “freemartins.”

“TPP Dead”; Canadians Seen as Prime Suspects (p. 2):
    While the funeral has not been set, consensus is that efforts to create the Trans Pacific Partnership (TPP) – the world’s biggest “Free Trade” deal – are kaput.  That’s good.

Butter Prices Strong, Cheddar Holding, Nonfat Powder in Septic Tank (p. 3):
    The dairy commodity scene is mixed.  Butter and cheese are fairly well positioned, but the dairy protein powder complex is a total mess.

China Looking More and More Like a Bubble (p. 3):
    China’s economy is heading downhill.  Several structural problems are present, including eroding stock market values, a real estate boom losing steam, and large quantities of non-performing debt held by banks.

Agri-Mark’s Bob Wellington Criticizes DMPP Feed-Cost Data (p. 3):
    At last, a dairy co-op official has complained aloud that USDA’s Dairy Margin Protection Program is failing.  Wellington cites mistaken feed cost data collected by USDA.  Funny thing:  Wellington’s stinging letter to USDA Secretary Tom Vilsack failed to mention the errors in calculating dairy producers’ milk prices by the “All-Milk Price.”

Judge Trashes Revised Proposed Settlement in Northeast Antitrust Case (p. 4):
    Strike Two!  Federal judge Christina Reiss threw out a second Proposed Settlement from lawyers in the sticky Northeast dairy antitrust case against DFA and Dairy Marketing Services.  What’s next?  To trial???

Drought & Wildfires: Just the Start of Eco-Disasters in California?  (p. 5):
   Pete Hardin projects that the current Drought and widespread wildfires in California are setting up the state for additional eco-disasters this coming wet season.  Powdery dry soils and lack of vegetative cover raise the specter of severe erosion from burned-off acres.  And that erosion could head into the reservoirs – reducing reservoir capacity.

Faraway Milk Displacing Local Milk at Dean’s Chemung, IL Plant (p. 5):
    Milk trucks from Michigan, Indiana, and even Ohio are pulling into Dean Foods’ fluid milk plant at Chemung, Illinois.  Local milk supplies are being bumped out of Chemung, resulting in higher hauling costs.

Organic Milk — It’s Not Just for Drinking Anymore (p. 6):
    We welcome new contributor Ed Zimmerman’s first effort in The Milkweed.  Ed, a veteran dairy and food marketer, details success and growth of food products (other than fluid milk) using organic dairy products.

“Mr. Holstein” Turns to Jerseys and Wishes He Had Done It Sooner (P. 7):
    Writer Jan Shepel profiles dairyman Don Mielke of Menasha, Wisconsin.  Mielke, who’s been dairy farming since he was 14, enjoyed many accomplishments in the Holstein breed, but has switched his 55-cow herd to mostly Jerseys.

Butter and Cream: Dairy’s Opportunity for Growth (p. 8):
    One of our “Stories of the Month.”

Why is U.S. Importing Butter from Foot-and-Mouth Disease-Infected India? (P. 9):
    One of our :Stories of the Month.

New Zealand Desperate to Unload (p. 9):
    One of our “Stories of the Month.”

NEJM Spotlights Human Health Hazards Spawned by Herbicide-tolerance (p. 10):
    Writer Paris Reidhead reviews recently published information in the New England Journal of Medicine about human health issues relating to use of Herbicides.

Monsanto’s Discredit Bureau (p. 10):
    Paris Reidhead summarizes information revealed earlier this year about Monsanto’s activities to denigrate opponents of genetically-modified organisms.

Biotech Feeding Frenzy Follows NEJM Anti-GMO Paper (p. 11):
    Following publication of a damning article by two scientists in the New England Journal of Medicine, writer Paris Reidhead tracks the “blow-back” from Monsanto and biotech interests against those authors.

Latest DFA Crapshoot: Big, New KS Plant Atop Declining Aquifer (p. 12):
    Nate Wilson researches several questions about DFA’s new plant project in Garden City, Kansas.  One key question: what about future water availability, as the underlying aquifer drops fast?

Empire Specialty Cheese Getting Closer … Maybe … just maybe! (p. 12):
    Nate Wilson continues to bird-dog efforts to start a new cheese plant in the far western corner of New York State.  More than one year after its original intended deadline to start cheese production, Empire Specialty Cheese may be close …

CME Butter Prices Far Stronger; NFDM Prices Up a Bit (p. 13):
    Big gains in butter prices at the Chicago Mercantile Exchange in the past month are the buzz in dairy.  Pete Hardin reviews commodity production and demand trends.

Dairy Livestock Prices Holding or Lower in Past Month (p. 13):
    We survey recent dairy livestock price trends.  Top-quality animals are holding their own, but values for just about everything else are down-trending.

Why is DFA Building an Ingredients Plant in Kansas? (P. 14):
    Pete Hardin follow deeper into questions raised by Nate Wilson elsewhere in this month’s issue. Hardin explains that a lot of Chinese EB-5 money is probably involved.  The U.S. State Department operates a program – EB-5 – that allows into this country foreign nationals who invest $500,000 (or more) in the U.S.

Dairy Farmers Should Not Feel Helpless (p. 15):
    Yes, things are getting tough financially on many U.S. dairy farms. But Pete Hardin reviews some of these challenges and urges dairy farmers to not act helplessly, but rather fire up their organizations and elected officials to represent dairy farmers’ interests.


August 2015  Issue No. 433

Inside this months issue …

California's Heat, Drought & Low Milk Prices Slowing U.S. Milk Flow (p. 1):
    Our "Story of the Month." Click Here.

Usual Experts’ Dire Milk Price Outlooks Not Fundamentally Based (p. 2):
    Yes, farm milk prices are significantly below 2014’s record levels. But Pete Hardin doesn’t buy the bottom-end gloom and doom.  The “experts” are missing the impact of California’s Drought on their forecasts.

July 2015 Class III Price $16.33/Cwt. – Class IV $13.15/Cwt. (p. 2):
    July’s manufacturing class milk prices in the federal milk orders declined, tracking commodity prices.

USDA Announces Sept. 22 Hearing on Proposed CA Federal Milk Order (p. 3):
    On September 22, USDA will convene what’s expected to be a multi-week hearing on proposals to create a federal milk marketing order for California.  This move culminates years of frustration on the part of California dairy producers with their state-operated milk pricing system.

Butter Prices Strong, Cheddar Holding, Nonfat Powder in Septic Tank (p. 3):
    The dairy commodity scene is mixed.  Butter and cheese are fairly well positioned, but the dairy protein powder complex is a total mess.

James Paul Eichstadt: 1953 – 2015 (p. 3):
    We regret to print the obituary of colleague and friend Jim Eichstadt.

PA Ag Commissioner Warns of $8/Cwt. Milk Prices, Urges DMPP Sign-Ups (p. 4):
    Scare tactics??? Pennsylvania agricultural commissioner Russell Redding warns that dairy farmers could face $8/cwt. milk prices, and that they’d better seek the protection of USDA’s Dairy Margin Protection Program (DMPP).  We find Redding’s comments irresponsible non-solutions.  If things are that bad, what else is Redding doing to protect his state’s dairy industry???

Hawaii TPP Trade Talks Come to Naught (p. 4):
    The dozen nations working on the Trans Pacific Partnership concluded a late July meeting in Hawaii with no results.  Nations’ sacred cows (so to speak) are probably blocking resolution of this matter for at least a couple years.

Genske’s August 4, 2015 Letter Scorches DFA Directors (p. 5):
   California-based dairy farmer and Certified Public Accountant Gary Genske unloaded a multi-page letter on Dairy Farmers of America’s board of directors in early August.  Genske scorned DFA’s financial audit that shows intangible assets and accumulated losses exceeding reported members’ equity.

Tough Times Down Under: Producers Unrest Targets Fonterra (p. 5):
    With about 90% of the island nation’s milk under its control, Fonterra is the target of dairy producer frustrations and New Zealand milk price projections sink lower and lower.

Empire Specialty Cheese: Unpaid Property/School Taxes … (p. 5):
    Writer Nate Wilson unveils the latest saga of Empire Specialty Cheese – the NJ-based Italian cheese firm that’s been delayed for one year in attempts to open its new cheese plant in western New York.  Empire Specialty Cheese is a property and school tax delinquent.

High Components, Sturdiness & Longevity Among Traits Making Jersey Cattle a Hot Commodity (p. 6-7):
    What’s driving the booming prices for Jersey dairy livestock?  Jan Shepel interviews a wide range of livestock personnel to obtain a wide range of insights about why buyers want Jersey cows and heifers.

Jersey Gains Continue into Semen Sales (p. 7):
    Sales of Jersey semen are far exceeding what would be needed to service female Jersey animals, both in the U.S. and abroad.  That’s a clue as to just how popular Jersey genetics are for cross-breeding other dairy livestock.

New “Stacked” GMO Crop Protection Promises Greater Agri-Chemical Use (p. 8):
    Paris Reidhead delves into what concerned scientists are saying about the potential for adverse results from increased use of herbicides and pesticides.  New GMO crops are designed to resist multiple herbicides – which will result in far greater applications of agri-chemicals per acre.

Lawyers Delay August 7 Pre-Trial Hearing in Northeast Antitrust Case (p. 9):
    Attorneys for both plaintiffs and defendants have submitted a new proposed settlement to the court in the long-running Northeast dairy antitrust case.  This settlement is nearly identical to the one rejected earlier this year by presiding judge Christina Reiss.  Expect more fireworks.

Beef Prices in Northeast Starting to Collapse … (p. 10):
    In late July, prices for finished steers and culls started dropping about 20% in the Northeast.  Consensus in the region’s industry was that the pending imports of beef from Brazil and Argentina are torpedoing those prices.

Foot-and-Mouth Disease Threats to U.S. Livestock Economy (p. 10):
    Pete Hardin lists reason why USDA’s intention to allow imports of beef from Foot-and-Mouth Disease infected countries such as Brazil and Argentina constitute a very, very, very bad idea for this nation’s livestock producers, rural economies, and consumers.

Brazilian firms control majorU.S. food companies (p.11):
    Expect some dirty dealing as Brazilian firms take control of major U.S. food companies.  3G Capital now controls Anheuser-Busch and Heinz-Kraft.  At Heinz and Anheuser-Busch, 3G Capital has instituted 120-day payments schedules to suppliers.  And JBS, SA – this nation’s largest processor of beef – is also Brazilian-owned.  JBS will benefit from the imports of beef from South America to knock down U.S. cattle and dairy producers’ prices, Pete Hardin analyzes.

My book project … (p. 11):
    Editor-publisher Pete Hardin is in the final stages of completing a book about the evils of recombinant bovine growth hormone.  Batten the hatches …

Lost a best friend & right-hand man … (p. 11):
    Pete Hardin remembers Jim Eichstadt’s unique talents.  Jim, an important contributor to The Milkweed, passed away in early July.

Drought, Wildfires Devastating California (p. 12):
    The many wildfires devastating California this summer are a logical extension of that state’s being deep into the fourth year of prolonged drought – the worst drought since some time in the 1500s.  Agriculture must scrap to keep its limited access to water.

July 2015  Issue No. 432

Inside this months issue ...

Vilsack

Inside this months issue ...

Vilsack Drops Huge Bomb: Approving Beef Imports from FMD-Infeded Brazil & Argentina (p. 1):

    Our story of the month by Jim Eichstadt.  Read our story of the month here.

“All-Milk Price” DOESN’t Include Deducts! (p. 1):
    The Milkweed finally wangled answers our of USDA regarding whether milk check deductis for things like marketing costs, milk hauling, promotion assessments, etc. are factored into the monthly “All-Milk Price.”  To the best of our ability to interpret USDA’s anawer, the answer is No.  Thus, the DMPP “safety net” program, which relies on the “All-Milk Price” as its income measure, is flawed.

Dairy Marketing Realities to Appreciate (p. 2):
    Mozzarella demand is good and inventories are little, if any.  Butter sales are good.  Barrel Cheddar demand is good, and no foreign firms make barrel Cheddar.  California’s future milk output is unknown, due to the Drought.  Those factors are helping hold up U.S. farm milk prices.

Current Weak Area: Dairy Protein Powders (p. 2):
    Except for high-end whey powders, the entire dairy protein powder market is glutted and is of concern due to the potential for lower prices.

Judge Sets August 7 Date for Pre-Trial Hearing (p. 2):
   A pre-trial hearing has been scheduled for the Northeast dairy antitrust litigation by Judge Christina Reiss.

June ’15 Class III Price $16.72/Cwt. – Class IV $13.90/Cwt. (p. 2):
    The headline tells the story for June’s manufacturing milk price classes in USDA’s federal milk order program.

Widespread Milk Dumping: Are Co-ops Pursuing “Last Man Standing” Strategy? (p. 3):
    In the Northeast and Mid-East federal milk orders, large volumes of milk continue to be dumped, due to lack of plant capacity and lack of willingness by processors to take in more milk.  What’s really going on???  Pete Hardin theorizes that big co-ops in those regions think that California milk production will tumble and they’ll be in an advantageous position to compensate for California’s shortfall of commodities.  In the meantime, dummies running a certain co-op are paying big volume premiums, adding new members, dunning members for monthly marketing losses, and watching a director more than double his herd size.  The big losers are small- and medium-sized dairy producers … who are viewed as expendable by some big co-op leaders.

Milk Dumping in Orders 1 & 33 Ramps-pp Dramatically (p. 3):
    Writer Nate Wilson analyzes the volumes of farm milk dumped in the Northeast and Mid-East federal orders in May 2015.

David vs. Goliath: Saputo Tries to Block Lanco’s Cheese Plant Project (p. 4):
    Last winter, Saputo Cheese sold its closed Hancock, Maryland cheese plant to resellers.  Saputo’s lawyers failed to restrict the deed to that property to prohibit another firm making cheese there.  Now Saputo is in court trying to stop a small cooperative that’s purchased the plant from making cheese to help its members find a market for their milk.

China & Russia Collaborating to Build 100,000pcow Dairy (p. 4):
    Cow Comrades???  Plans to build a 100,000-cow dairy on the China-Russia border have been announced.  Chinese will operate the dairy, Russians will provide forage and feed.

Genetically Engineered Crops Multiply Herbicide Use (p. 5):
    Paris Reidhead delves into the data that shows reliance on genetically-modified crops has caused overall increased use of agricultural pesticides and herbicides.

USDA: History of Failed Foot-and-Mouth Disease “Regionalization” (p. 6):
    Writer Jim Eichstadt details in five prior instances, USDA’s efforts to “regionalize” beef imports from nations that were infected with Foot-and-Mouth Disease have failed because of subsequent flare-ups of FMD in those supposed “safe” areas of the five countries. Beware!

Mid-June 2015 Crop Tour Reveals Mounting Corn Belt Weather Concerns (p. 7):
    Writer Jim Eichstadt tracked crop conditions over a 2,000-milk trip through the heart of agricultural America in mid-June.

Dean Foods Among Investors Pursuing A2 Milk Corp. (p. 8):
    A group of investors – from Australia, China, and U.S.’ Dean Foods – are chasing after a take-over of the A2 Milk Corp. of New Zealand.  Interesting …

United Nations Codex Alimentarius Reviews rbGH at July Session (p. 8):
    The United Nation’s food safety branch, the Codex Alimentarius, reviewed issues concerning residue levels of recombinant bovine growth hormone at its early July meeting in Geneva, Switzerland.   The agency will deliberate maximum levels of residues.

Milk Powder Prices Weaker; Butter Holding, Cheddar Down & Up (p. 9):
    The dairy commodity scene has uncertainty, but one thing’s for sure: prices for dairy protein powders are in the dumpster, since the world is glutted with product.  All eyes are watching the impact of Drought upon California’s upcoming months’ milk production.

Grain Prices Shoot Up as Weather, USDA Crop Outlook Turn Sour (p. 10):
    Jim Eichstadt discusses the factors behind recent weeks’ upwards moves in grain prices.

Reuters Reports Monsanto’s Dicambia Intentions (p. 10):
    According to press reports, biotech giant Monsanto is planning to produce a Dicambia pesticide, since biotech controls for certain crop pests are less and less effective.

IARC Classifies 2,4-D Herbicide as Group 2B Carcinogen (p. 10):
    The cancer research baranch of the United Nation’s World Health Organization has classified the herbicide 2,4-D as a Group 2B carcinogen.  That means scientific research considers 2,4-D a “likely” cancer-causing agent.

Responding Intelligently to Vilsack’s beef import insanity (p. 11):
    How to respond rationally to irrational behavior?  Pet Hardin’s puzzling over that one.

Producers Beef Price Equity?  Forget USDA! (p. 11):
    Pete Hardin suggests that beef producers say to heck with USDA and develop a private logo to signify U.S. born and raised beef products for consumers.

Mid-June 2015 Corn Belt Crop Tour Photos and Captions (p. 9):
    We feature crop photographs to accompany Jim Eichstadt’s mid-June survey of crops across the central U.S.


June 2015  Issue No. 431

Inside this months issue ...

Story of the month: USDA Approval of Brazilian Beef Imports Coming Soon?? (p. 1):

    Contributor Jim Eichstadt sorts through media reports that the U.S. is about to allow imports of fresh beef from Brazil – a nation with Foot and Mouth Disease. Not pretty! Read our story of the month here.

May 2015 Class III Price $126.19/Cwt. – Class IV $13.91 (p. 2):
    Both classes of manufacturing milk move up in May. Class III (cheese) milk will go higher in June, but Class IV (butter-powder) probably will not.

Despite Low Milk Prices, Dairy Livestock Prices Strengthening (p. 3):
    Key livestock marketers report that prices for dairy livestock are stronger. Open heifers and good Jerseys of any age are particularly strong.

Is Today’s Holstein Bull Calf an Idol??? (p. 3):
    Pete Hardin examines what’s behind the big premiums paid for dairy bull calves (vs. heifer calves) and concludes that such events are anti-husbandry. Bull calf prices are being driven by shortages of animals for beef feedlots. That short-term need is skewing values of young dairy animals. The pricey Holstein bull calf is posed as an idol, a symbol of dairy’s wider failed guidance.

January-April 2015 U.S. Butter Imports up 196% vs. 2014 (p. 4):
    High U.S. commodity prices and a strong U.S. dollar are combining to attract larger volume of butter from abroad.

Avian Flu: Problems Creating Expanding Opportunities for Beef, Dairy (p. 5):
    At two recent Wisconsin county dairy farm breakfasts, yogurt is being substituted for eggs on the menu. Why? Egg prices are through the roof and supplies are uncertain. No Response from USDA on Dairy Program Questions (p. 5): USDA personnel failed to respond, despite promises to do so, to a series of questions submitted by contributor Jim Eichstadt concerning the Dairy Margin Protection Program and impact of the 7.2% “sequestration” upon other farm payments programs. The DMPP is a fiasco.

More Free Trade Chickens Coming Home to Roost (p. 6):
    Contributor Jim Eichstadt takes a wide-ranging look at various “Free Trade” deals and their impact upon U.S. agriculture.

What Meteorological Forces Caused Texas Flooding in May? (p. 7):
    Paris Reidhead puts on his old U.S. Air Force weatherman’s hat and explains in detail exactly what forces of Nature were responsible for the incredible deluge of rainfall that hit Texas and the Southern Plains during May. Interesting …

Uebersetzig’s New Location, Shift to Organics Ensure Next Generation’s Farming Future (p. 8-9):
Writer/dairy woman Jan Shepel profiles a Wisconsin dairy farm family that’s made the transition to a new farm and to organic milk production. She explains how the higher, more stable tier of organic milk prices also helps a solid, planned transition to the Uebersetzig’s next generation of farmers.

40+ Year Perspective on the New York State Dairy Industry (p. 10-11):
    Not a pretty story. Pete Hardin goes all the way back to his early 20s and details how repeated efforts by major dairy cooperatives to control producers in New York State have resulted in an irrational milk marketing situation. Hardin details the conspiracy hatched in the late 1990s between the predecessor organizations of Dairy Farmers of America and Dean Foods led to thousands of independent Northeast dairy producers having their milk markets taken over by DFA and Dairy Marketing Services.

Northeast Antitrust Case Squabbling Continues, Intervention Sought (p. 12):
    Disagreements continue between several class representatives and their attorneys in the Northeast dairy antitrust case. In late May, the presiding federal judge received a submission from two former state agricultural commissioners (and ex-dairy farmers) to enter the case as class representatives, along with their lawyers becoming co-counsels.

Canadian Milk & Poultry Quotas a Political Football (p. 12):
    Nate Wilson does a good job digging into Canada’s political battle involving that nation’s farm production quotas for dairy and poultry. On one hand, Canadians are told that they have to give up those quotas, to be embraced by the Trans Pacific Partnership. On the other hand, Canadians are tired of being dictated to by the United States on domestic matters.

Prices: Butte lips, Block Cheddar Stronger & Powder Still Stinks (p. 13):
    The past month’s events at the Chicago Mercantile Exchange have seen cash butter prices decline, while Cheddar blocks and barrels are stronger. Nonfat dry milk is stuck in the basement.

DMPP: Farmers on the “givin’ list” … not on the “gittin’ list” (p. 15):
    USDA’s new Dairy Margin Protection Program is a complete fiasco and waste. Pete Hardin apologizes for advising subscribers to sign up for the dairy “safety net’ that’s full of holes. Many dairy producers are concluding that the DMPP is taking money, not paying it out. USDA is unable to explain how the “All-Milk Price” is determined.

Four more years … (p. 15):
    Pete Hardin announces his retirement plans. Goal: four more years. That’ll make 40 years of publishing The Milkweed. Much to write about in the next four years.

“Rex Block” Split Jet Stream: Global Weather Factor (p. 16):
    Paris Reidhead explains the complicated weather events of the past month. Good stuff.

Big Difference in U.S. Drought Map: Six Wet Weeks (April 21 to June 2) (p. 16):
    We contrast two spring 2015 U.S. Drought Monitor maps – “before” and “after” the May 2015 deluges hit Texas and the Southern Plains.

May 2015  Issue No. 430

Inside this months issue ...

Butter Prices Zooming Up; Cheddar Solid; Milk Powder Weak (p. 1):
    Butter prices at the Chicago Mercantile Exchange are showing surprising strength, topping the $2/lb. mark on May 11. Cheese demand is solid. Dairy Protein powder markets are weak.

CA’s Surface Water Metrics: That’s All Folks (p. 1):
    California’s reservoirs are 20% below seasonal normal capacity in early May. With zero snowpack left to melt, what’s in the reservoirs is all Golden State residents have until late next fall. Agriculture is taking a lot of criticism for its water use.

Gov’t “Sequestration” Reduces DMPP Pay-Out by 7.3% (p. 1):
    A law passed by Congress in 2011 means that USDA payments to the Dairy Margin Protection Program will be reduced by 7.3%. Not that the half-cent payout on $8.00 margin insurance for the January-February 2015 DMPP period was any bargain.

March ’15: Mozzarella, Butter & Yogurt Output All Lower (p. 2):
    Three key dairy sectors – Mozzarella, butter and yogurt all showed surprisingly weak numbers for March 2015, compared to one year ago.

Listeria Contamination Forces Recall of All Blue Bell Ice Cream (p. 2):
    A listeria contamination problem has closed all Blue Bell Creameries’ plants and a 100% recall of products. Three persons were killed by the contamination. FDA has released information indicating that Blue Bell execs knew about the problem a couple years ago.

April 2015 Class III Price is $15.81/cwt.; Class IV is $13.51 (p. 2):
    The numbers tell it all. Rising butter prices will lift class prices in coming months.

Trans-Pacific & Atlantic Trade Pacts Loom as Congress Advances “Fast Track” (p. 3)
    Contributor Jim Eichstadt dissects the political events in Washington, D.C. and puzzles why certain dairy producer groups would support Free-Trade measures that would denigrate our nation’s supply food integrity.

Fonterra & University of Wisconsin Too Friendly with China’s Dairy Industry (p. 4):
    Now that global milk prices have crashed due to rising Chinese milk production and diminished dairy import needs by China, Pete Hardin wonders what rationale there was/is for major dairy interests to help China grow its own milk production … if the end result is lowball milk prices.

NY Gov’s Trade Junket to Cuba Included Cayuga Milk Ingredients & Chobani (p. 4):
    In late April, NY governor Andrew Cuomo went on a trade mission to Cuba. Tagging along with Cuomo were representatives of New York State dairy processors … hoping to drum up business.

Some Suggested Solutions for New York State/Northeast Dairy Industry Mess (p. 5):
    Pete Hardin offers suggestions regarding the New York dairy marketing crisis. They include: Review USDA’s calculations for the “All-Milk Price,” have USDA make emergency purchases of frozen hamburger, conduct an emergency analysis of dairy marketing conditions in the Northeast, declare the Northeast dairy industry an economic disaster zone, and create an emergency USDA program to offer low-interest loans to producers and milk haulers in the event of handler bankruptcies.

Recent Dairy Conferences: Differing Fortunes for Cheese & Butter vs. Dairy Proteins (p. 6):
    Read our “Story of the Month” here.

New York Dairy Situation a Huge Mess (p. 7):
    Pete Hardin digs into the imbalance of dairy supply/demand in New York State.

Northeast & Mid-East FMMOs Pooling “Dumped” Milk (p. 7):
    For the period April 1 to June 15, 2015, two beleaguered federal milk orders will pool milk that’s dumped. That’s how bad supply/demand imbalances are in that part of the country.

Key ADPI Speakers’ Important PowerPoint Panels (pp. 8, 9 & 16):
    We reproduce important PowerPoint panels provided by speakers at the recent American Dairy Products Institute/American Butter Institute annual conference. Along with key graphics, we offer summary analysis.

The Lancet Draws Monsanto’s Fire (p. 10):
    Writer Paris Reidhead reports further on the events surrounding the recent declaration by the International Agency for Research on Cancer’s determine that Glyphosate is a likely cancer causing substance. The Lancet – a British medical journal – caused Monsanto executives to howl in anger over that journal’s reporting of IARC’s findings.

“Con Job” – Monsanto’s Hitmen Target Dr. Oz (p. 10):
    Ten “distinguished” medical doctors recently wrote Columbia University, seeking removal of famous television doctor, Dr. Oz, from that institution’s medical faculty. The issue: Dr. Oz’s repeated denigration of biotech foods. One of the “distinguished” doctors actually served in federal detention for Medicaid fraud. These clowns are fronting for Monsanto.

Stover: Baled Cornstalks Gaining Favor as Cheap Substitute for Hay (p. 11):
    Contributor Jim Eichstadt goes into great depth discussion the growing practice of feeding corn stover to livestock. He details the reasons (scarcity of hay) and nutritional values. Great article!

Empire Specialty Cheese Project: Suddenly, Nobody Wants to Talk … (p. 12):
    Writer Nate Wilson again details what’s (not) going on at the long-delayed Italian cheese plant project in western New York. A lot of public money has been committed to this long-delayed construction.

Chobani Custody Battle? All in and All Done (P. 12):
    Writer Nate Wilson reports on news media summaries of the custody battle for Chobani Yogurt waged by founder Hamdi Ulukaya and his ex-wife, Dr. Ayse Giray.

Sorghum Can Thrive in Dry Conditions; Rootwork Control, too (p. 13):
    Writer Paris Reidhead talks about sorghum’s benefits: about half the moisture requirements of corn and two years of “free” rootworm control after the sorghum is harvested.

Cultivate and fertilize domestic markets smarter … (p. 15):
    Now that the Golden Idol of exports markets has again tarnished, Pete Hardin details why it makes more sense for U.S. dairy interests to do a far better job developing increased at-home demand.

Does Monsanto’s failed bid for Syngenta signal plan to pull back from GMO seeds? (p. 15):
    Pete Hardin comments on a recent report in The New York Times that Monsanto’s failed bid to buy Syngenta represents a strategy to “morph:” Monsanto back ot a chemical firm and move away from seed biotechnology.

Dean Foods U nveils “DairyPure” Milk (p. 16):
    Dean Foods has rolled out a national milk label – “DairyPure.” Doesn’t matter what they call the product, as long as Walmart is charging $2.00-$2.50/gallon more for Dean’s branded milk than what Walmart’s store brands go for.

April 2015  Issue No. 429

Inside this months issue...

Dairy Industry Weighing Impact of Many Unknowns (p. 1):
    The range of factors impacting futures dairy production and marketing trends right now is mind-numbing: from California’s Drought to Western Europe’s dairy farmers coming off milk quotas.

CA’s H20: SOL (p. 1):
    California’s water situation has dramatically deteriorated during the past month. About two-thirds of the Sierra Madre mountain snowpack disappeared from early March to early April – much of that moisture evaporated rather than melted.

Hard to Gauge What’s Ahead with Dairy Commodities (p. 1):
    The U.S. dairy commodity picture is unsettled right now. Cheddar and Grade AA butter prices have been relatively stable. Nonfat dry milk prices continue relatively weak. Watch California!

B-I-G Deal! Heinz & Kraft Foods = Kraft Heinz Company (p. 2):
    H. J. Heinz and Kraft announced acquisition of Kraft Foods by the condiment manufacturer. The moo-la behind this deal: Brazil’s 3G Capital and investor Warren Buffett’s Berkshire Hathaway. Deal is contingent upon Kraft stockholders, who’ll get a big bonus out of the deal. The bigger picture? Desire of big global money to dive into U.S. food industries, before possible advent of major new “Free Trade” deals.

March 2015 Class III Price is $15.56/cwt.; Class IV is $13.80 (p. 2):
    USDA’s Class prices for manufacturing milk basically flattened, after several months of declines.

New York State Milk Marketing Situation Faces Brutal Spring Flush (p. 3):
    A lot of sick chickens are coming home to roost in New York State this spring. For the last year, the major marketer has been dumping milk. Heading into the spring flush, the state is awash in milk. Some handlers are terminating dairy farmers marketing arrangements. New York’s vaunted yogurt industry is producing less volume than anticipated. What a mess!

Kraft Suppliers: Beware of Dirty Cash Flow Games from New Owners (p. 3):
    If financial practices at Anheuser-Busch are any clue, suppliers to Kraft Foods have reason to worry once the Kraft Heinz deal is completed. Brazil’s 3G Capital is behind the Kraft-Heinz marriage. 3G Capital took over Anheuser-Busch in 2008 and has put suppliers on a 120-day payments basis. Don’t worry: 3G Capital requires incoming financial obligations to be settled on a 30-day basis!

Judge Dismisses Proposed Settlement in Northeast Antitrust Case vs. DFA/DMS (p. 4):
    On March 31, Judge Christina Reiss of the Federal District Court for the District of Vermont dismissed the proposed settlement in the Northeast dairy antitrust litigation. Reiss ruling stated that the Proposed Settlement was not in the best interests of the classes.

Animal Rights & Wrongs: PETA, HSUS, Mercy for Animals & FARM (p. 5):
    The animal welfare agenda is front-burner for dairy. Animal rights groups are pushing more practices for dairy farmers to follow, and big dairy processors/marketers are caught in the middle. Meanwhile, National Milk Producers Federation is pushing hard for its FARM program – detailing animal treatment protocols backed up by inspections. But the animal rights’ agenda and NMPF’s demands are all the same: approaching suppliers with demands for on-farm practices.

Lowball “All-Milk Price” Undercuts Dairy Margin Protection Program (p. 6):
    Read our “Story of the Month” here.

Canadian Milk Quota System to the in the Cross-hairs of World Trade Negotiations (p. 7):
    Writer Nate Wilson details how Canada’s dairy farm milk quota and milk-pricing system are perhaps on life-supports. Canadian dairy producers have increased milk production only one percent in the past four or so decades, while the nation’s population has nearly doubled. MPC imports used in cheese and yogurt manufacture are killing demand for domestic farm milk.

Handlers Dump About 10 Large Dairies in NY (p. 7):
    Private handlers have terminated about ten large dairy farms in New York State – a sign of that area’s disrupted milk marketing situation.

Kraft Foods’ Demised Retail Fortunes Track Back to Processed Cheese Swill (p. 8-9):
    Pete Hardin offers a perspective on where Kraft Foods went wrong during the past 25+ years since Philip Morris Companies acquired the nation’s largest cheese marketer. From price manipulation at the old National Cheese Exchange to “dumbing down” processed cheese products with cheap dairy ingredients and fillers ... Kraft made all the wrong moves. Read what a former top-level Kraft cheese executive said!!!

Food Biotech Follies ... (p. 10):
    Paris Reidhead details a recent fiasco for a Monsanto-inspired, pro-food biotech executive on a French television interview. The Monsanto guy first offered to drink Roundup (Monsanto’s herbicide), and then refused, telling the interviewer, “What do you think I am, an idiot?”

New York Times Writer: Why are We Guinea Pigs? (p. 10):
    Paris Reidhead summarizes the recent column by Mark Bittman that appeared in the NYT. Following announcement that the World Health Organization’s cancer-research branch had declared glyphosate a likely carcinogen, Bittman asked why humans are subjected as guinea pigs for the array of chemicals and pesticides in our food and environment?

Milk Market Order Systems: Plain People on the Interstate of Commerce (p. 11):
    Robert Wills, owner of Cedar Grove Cheese (Plain, Wisconsin), details his concern about the performance of federal milk marketing orders.

FMMO Reform: Fluid Milk Processors’ Perspective (p. 11):
    Warren Taylor, co-president of Snowville Creamery (Pomeroy, Ohio) details the problems facing small-sized fluid processors due to inequities of the federal milk order pricing system.

OSHA Violations Cited as Clear Horizons Defies Dane County’s Default Notice (p. 12):
    Contributor Jim Eichstadt reveals the latest events in the exploding, polluting dairy manure digester in northern Dane County, Wisconsin. County officials have issued a default of contract notice to the digester’s operator, Clear Horizons Dane LLC. But that firm’s lawyer basically denies any violations or problems in a recent letter to the County.

Chobani Yogurt Custody Hinges on Euphrates Cheese Ownership (p. 14):
    Former spouses are at it again, battling in court in Manhattan over control of Chobani Yogurt. Recently, a hearing was held to determine ownership of Euphrates Cheese – a small feta cheese plant in eastern New York. The ex-wife of Chobani’s owner claims that he diverted money from Euphrates Cheese to start Chobani Yogurt.

The “Hardin Plan” ... Suggested FMMO Reforms (p. 15):
    Pete Hardin let’s fly with his proposals for federal milk order reform, including: one class for farm milk, farm-point pricing, zero Class I shipping requirements and zero Class I pooling provisions, zero transportation credits, a “seasonal incentive program” with real teeth, only two federal orders – delineated by the Continental Divide, regular audit by USDA of the protein/fat content of fluid milk packages at retail, plus continued federal audits and rules for components and quality testing. Think about it.

U.S. Drought Beyond CA (p. 16):
    The latest drought monitor map the federal government shows serious drought extending across major portions of the western two-thirds of the U.S. Serious stuff.

March 2015  Issue No. 428

Inside this months issue...

California’s Water Situation Worsens in Past Month (p. 1):

    Read our story of the month  here.

DFA Manufacturing/Distributing Imitation Cheese (p. 1):
    The Borden’s division of Dairy Farmers of America is selling “Sandwich-Mate” – imitation cheese slices.

What’s Dean Foods Up To??? (p. 2):
    The nation’s largest fluid milk processor isn’t hitting on all cylinders. Recent months’ revelations of internal Dean Foods’ documents show a desperate effort to boost margins and get a handle on accounts receivable (especially from Walmart).

Dean Foods: 2014 Loss, Little Cash on Hand (p. 2):
    Preliminary reports from Dean Foods indicate a modest loss. But the company reported only $16 million cash on hand as of 2014’s end.

February 2014 Class III Price is $15.46; Class IV at $13.82 (p. 2):
    Manufacturing class milk prices in USDA’s federal milk orders continue to fall, reflecting key commodities’ prices.

Collapse of Cooperative Marketing in Northeast, Mid-East and Southeast (p. 3):
    Too much milk has caused milk-marketing chaos in many parts of the country east of the Mississippi.

USDA Requests Comments on FMMO Issues (p. 3):
    USDA has requested a wide-ranging set of comments involving future operations and, indeed, continuation, of federal milk orders. Comments due April 13.

2014 Mozzarella Output was Dairy’s Shining Star (p. 4):
    Last year, U.S. Mozzarella production hit an all-time record: 3.983 billion lbs. That’s an increase of 6.5% atop 2013’s total.

Good Question: What about “Reblends” and Monthly “All Milk Price” (p.4):
    We try to answer a dairy farmers questions about the impact of dairy co-op marketing loss deductions (“reblends”) upon USDA’s calculation of the “All Milk Price” for the new “milk margin insurance” program.

Several Class Representatives Petition Judge to Replace Plaintiffs’ Lawyers in NE Dairy Antitrust Litigation (p. 5):
    An unusual turn of events in the Northeast dairy antitrust litigation … Several lead plaintiffs have written the presiding judge, asking that their lawyers be replaced.

“The System” is Making Milk Irrelevant (p. 5):
    Snowville Creamery owner Warren Taylor explains why dairy leadership’s conventional wisdom is taking the industry in the wrong direction.

Free Trade Update: China Using Foreign Investment Protections (p 6):
    Contributor Jim Eichstadt takes a hard look at global trade negotiations. He offers many cautions about ongoing trade talks.

OIL, Corn & Milk: Three Commodities with Common Headaches (p. 7):
    Pete Hardin explores the supply-demand & price headaches facing these three important industries. Emphasis on prodiction is killing prices.

Roundup Ready: Manure and Mother’s Milk … the Gyphosate Curse (p. 8):
    Writer Paris Reidhead starts what will be at least a two-part series about the workings of glyphosate-type herbidices and their potential harm to human beings.

GMOs & Diseases” – A Transformational Presentation by Dr. Warren Porter (p. 9):
    Pete Hardin widely summarizes information presented by Dr Warren Porter at the late February 2015 MOSES conference in LaCrosse, Wisconsin. Dr. Porter presented a wide range of human health issues relating to genetically-modified crops and their accompanying herbicides. He also reviewed other human health data involving agri-chemicals.

Clear Horizons Controversy Continues amid County’s Warning, Town’s Settlement (p. 10):
    Jim Eichstadt continues with his series on the failing manure digester in the Town of Vienna (Dane County, Wisconsin). The latest: the operator has been given a letter from Dane County demanding a plan to improve operations within 30 days.

DMI’s Outlandish Executives’ Compensations Varied Dramatically Under IRS Reporting Rules (p. 12):
    “Nontaxable benefits” one year, “deferred compensation” the next. Bonuses and “other compensation.” Pete Hardin tracks the ridiculously high salaries and compensation to top executives at Dairy Management, Inc. – the behemoth behind spending dairy farmers’ promotion check-off dollars.

Scenic Central Annual Meeting: Growth in 2014 (p. 12):
    Pete Hardin reports on the annual meeting of Scenic Central Milk Producers – a 300-member Wisconsin dairy cooperative that operates with efficiency. Less than 1% of total revenue went to administrative costs last year.

Dairy Commodity Scene: Milk Powder Prices Weaken (p. 13):
    Milk powder demand and prices are weak. But demand for cheese and butter seem seasonally okay.

Empire Specialty Cheese Misses Another Plant Start-Up Date (p. 14):
    Writer Nate Wilson stays on the case of Empire Specialty Cheese’s continued failure to meet announced deadlines for start-up of its new (taxpayer subsidized) plant in western New York. Nest date? April 1, 2015. (April Food’s Day).

NJ Health Dep’t Slaps Empire Specialty Cheese (p. 14):
    Writer Nate Wilson reveals what New Jersey health officials found during their inspection of Empire Specialty Cheese’s plant in Fairfield, NJ following a fire in October 2014.

Summary of comments to Scenic Central Milk Producers Annual meeting (p. 15):

February 2015  Issue No. 427

Inside this months issue...
 

Butter & Nonfat Dry Milk Prices Rebound Slightly (p. 1):
    In late January, a surprising up-tick in prices for Grade AA butter and Grade A nonfat dry milk occurred at the Chicago Mercantile Exchange’s cash-trading. Butter inventors are seasonally light, and domestic demand good.. But milk powder inventories are bulging. Cheese prices at CME are relatively stable, and demand is good.

Early Feb. California’s Snowpack Water Content Extremely Low (p. 1):
    We reproduce a chart that measures current and historic volumes of water content in California’s mountain snowpack. As of Feb. 4, current levels are tracking near all-time lows, as California enters its fourth consecutive of epic drought.

Unexpected, Late January Surge Propels CME Butter & Grade A Nonfat Prices (p.2):
    Behind the scenes, what’s happening? Sources point to an giant, Asian conglomerate – Olam – as driving up recent butter and nonfat dry milk prices at the CME. Why? That remains to be determined.

January Class III Price: $16.18/cwt; Class IV at $13.23/cwt. (p. 2):
    Manufacturing class milk prices in USDA’s federal milk order program continue following declines in key dairy commodities for January 2015.

Several Plaintiffs Disavow Proposed Northeast Antitrust Settlement at Jan. 29 Hearing (p. 3):
    On January 29, at the Fairness Hearing for the Proposed Settlement of the Northeast dairy antitrust case, several main plaintiffs disavowed their attorneys’ proposed settlement and gave presiding judge Christina Reiss an earful of woes. One particular item that caught Reiss’ attention: failure to address defendants DFA and DMS continued testing of non-members’ milk samples. In turn, Reiss gave attorneys an earful.

2005 Events Showed DFA/DMS’ Dirty Milk-Testing Games (p. 3):
    In summer 2005, when DFA/DMS took over marketing milk for 300+ independent producers shipping to Farmland Dairies, four angry ex-Farmland shippers appeared on Lou Dobbs’ nationally televised news broadcast, complaining about lack of competition. What did DFA/DMS do? For August 2005, those producers all received low, 3.43% butterfat tests. A subsequent investigation by the Pennsylvania Department of Agriculture determined that the computerized lab tests hand been manually overridden at the DairyOne lab. So much for free speech!

Three Dairy Cooperatives Petition for California Federal Milk Order (p. 3):
    Californians have given up on their state milk pricing system. Three major dairy cooperatives operating in the Golden State have petitioned USDA to start the legal process to create a federal milk order for California.

DMI & MilkPEP Blowing Smoke on “Get Real” Initiative (p. 4):
    Dairy’s two biggest milk promotion groups – Dairy Management, Inc. and MilkPEP – announced a counterattack to defend milk’s demised image. Can’t these clowns do better than ring little cow bells?

DMI CEO’s 2013 Compensation Jumped 37.7% (p. 4):
    Just released salary information from IRS Form 990 shows that Dairy Management, Inc.’s CEO Tom Gallagher enjoyed total compensation of $1,263,507 for 2013. That figure represented a 37.7% jump from his 2012 compensation package.

Fonterra Misses Deadline for Renewing U.S. Cheese Import Licenses (p. 5):
    Contributor Jim Eichstadt reports that NZ’s Fonterra geniuses failed to file paperwork to renew their 2015 U.S. dairy import licenses. The report details just one mistake in our long-running series of reports on mistakes by Fonterra.

Too Much Manure Is a Pollutant: Federal Judge Rules Against WA Dairy (p. 5):
    A federal judge has ruled that a Washing State dairy’s storage and spreading of manure constituted a pollution of surface and groundwater supplies. Now it’s on to trial for the Cow Palace Dairy. Three neighboring dairies face similar charges in a citizens’ class action lawsuit.

Un-Clear Horizons: Manure Digester Mess Lingers as Officials Weigh Options (p. 6):
    Contributor  Jim Eichstadt follows up his story last month about the mismanaged, disaster-prone manure digester in northern Dane County, Wisconsin Problems and potential liabilities mount. Company officials told The Town of Vienna that they are bankrupt (without any such filing) and elsewhere express their possible interest in exiting the taxpayer-subsided project. But the Dane County Executive says not to worry.

Is Walmart Kicking Dean Foods’ Tires??? (p. 7):
    Vendors doing business with 81 Dean Foods’ subsidiaries have been asked to submit detailed financial information about accounts … to BENTONVILLE, ARKANSAS. That city is the home of Walmart. What’s cooking???

Tim Joseph (Maple Hill Creamery CEO) Explains Company Mission (p. 8):
    Paris Reidhead interviews the CEO of Maple Hill Creamery – an organic, all-grass dairy processor.

Almonds Symbolize California’s Demand on Scarce Water Resources (p. 8):
    California has nearly 1 million acres of almond tree groves. Doing the math shows that each almond requires about one gallon of water. At the start of the state’s fourth year of epic drought, agriculture faces some tough decisions over water allocations.

Questions & Answers: Tim Joseph – Maple Hill Creamery (p. 9):
    Questions/Answers with the CEO of Maple Hill Creamery.

Feature story – A2 Milk: Golden Opportunity for Dairy (p. 10):
    Read our story of the month here.

U.S. Imported Butter in 2014 from 9 Nations with Foot-and-Mouth Disease Problems (p. 11):
    Why would the United States government allow imports of butter from nine different nations that have festering Foot-and-Mouth Disease problems?

Wisconsin Farmers’ Union Rejects “Organic Check-off” (p. 12):
    Will Fantle of the Cornucopia Institute details how the Wisconsin Farmers’ Union delegates voted down support of the proposed “Organic Check-off.”

Weekly Dairy Cow laughter Totals Edging above Last Year’s Pace (p. 13):
    By a nose, weekly USDA data through the week of January 24, 2015 shows dairy culls are just 3,300 ahead of 2014’s first four weeks.

On the farm, don’t let low prices spook you (p. 15):
    Pete Hardin urges patience ss several very important events play out in 2015’s first quarter. Weather in Oceania and California, plus beef prices, are among the key factors to be watching.

Why not address farm milk over-production??? (p. 15):
    Instead of dumping tanks of milk and assessing farmers’ milk checks, why don’t dairy buyers start signaling how much milk is needed … and let producers act accordingly?

2/4/15: CA Reservoirs at 67% of Normal Seasonal Capacity, Water Content of Mountains’ Snowpack near All-Time, Historic Low (p. 16):
    Goodness, California’s water metrics are horrid as the nation’s largest food-producing state enters its fourth straight year of epic drought.

China – Milk Powder Imports & U.S. vs. International Prices (both p. 16):
    We reproduce and analyze two key dairy charts provided by University of Wisconsin-Madison dairy economist Dr. Mark Stephenson at the January 21, 2015 agricultural outlook conference.

January 2015  Issue No. 426

Inside this months issue...
Feature Story #1: Some Regions’ Dairy Marketing Descends into Chaos (p. 1):

    One of our two “Stories of the Month.” Read it here.

Distinct Price/Demand Trends: Organic vs. Conventional (p. 1):
    Look at the trend lines and the early 2015 prices paid. Organic milk sales are climbing significantly, while conventional fluid milk sales sag backwards. Pete Hardin estimates that by February-March 2015, high-end prices for conventional milk will be nearly three times as high as conventional dairy producers’ returns.

December 2014 Class III Price $17.82/cwt.; Class IV at $16.70/cwt. (p. 2):
    Class III (cheese) milk prices in USDA’s federal milk order program tumbled by $4.12/cwt. Given present key commodities’ prices, there is another haircut coming.

DFA Sold Sulfamethazine-Contaminated Milk in August: Huge Recall (p. 3):
    Two contaminated loads of farm milk from Beaver Creek Farm (Coopersville, MI) were marketed by DFA. A recall resulted. Firms’ with products in that recall include: Dannon, Dean Foods, Unilever, and Continental Dairy Facilities.

Northeast Antitrust Claims Filings by Producers Now Delayed Until May31, 2015 (p. 3):
    Forget the Jan. 15, 2015 deadline for dairy producers to file claims in the Northeast Antitrust Settlement vs. DFA. That deadline is now May 31, 2015. The Jan. 15 date was impossible for the regional federal milk order’s personnel to meet requests for producers’ milk output histories.

Nose-Diving Milk Prices Will Reduce Dairy Livestock Values, BUT … (p. 3)
     This article is a discussion of how falling milk prices will impact dairy livestock prices. Good news: the all-time peak cycle for beef should help undergird dairy livestock prices against collapse.

2014 Dairy Culls Lag 300,000 behind 2013’s Total (p. 4):
    Do the math: some 300,000 milk cows are overdue for their passage through the Golden Arches.

Managing Your Dairy Operation in These Trying Times … (p. 4):
    Here are some suggestions for coping with this rapidly arrived low milk price cycle. #1: Don’t panic.

Dairy Protein Powder Complex: Inventories Heavy, Prices & Demand Weak (p. 5):
    Across the entire array, demand for U.S. dairy protein powders is light. And prices still have not apparently hit bottom.

CME Cheddar Prices Stabilize … for Now (p. 5):
    Of late, cash Cheddar prices at the Chicago Mercantile Exchange have stabilized in the mid- to high $1.50s/lb. That’s good. But some in the industry are expecting further erosion, perhaps significant.

CME Butter Prices Fall, But 11/30/14 Inventories Are Light (p. 5):
    Seasonally, USDA’s Cold Storage report shows relatively light butter inventories as of the end of November -- 100.9 lbs. That’s manageable. Domestic butter sales grew nicely during 2014, but exports dropped sharply in last year’s second half.

Co-ops Fighting Each Other: Mid-East Milk Market War Erupts (p. 6-7):
    Amid a precarious supply balancing problem over the Christmas holidays, DFA was kicked out of Dannon’s Minster, Ohio yogurt plant. Michigan Milk Producers Assn. and Foremost Farms replaced DFA. DFA retaliated, involving access to Mid-East order fluid milk plant access. MMPC is hammering members’ milk checks with big holes in monthly PPDs.

Explaining FMMO PPDs & Dumped Milk (p. 7):
    An anonymous industry dairy figure explains two emerging issues: Producer Price Differentials (PPDs) and dumped milk.

Feature # 2: Clear Horizons Manure Digester: Public Funds Wasted on Huge Fiasco (p. 8-9).
    This amazing article of solid research and reporting by Jim Eichstadt is one of our two “Stories of the Month.” Read it here.

Grass-Based Organic Milk … Much More than Just a Niche (p. 9):
    Paris Reidhead visits Paul and Phyllis van Amburgh, who produce organic, 100% grass-fed milk near Sharon Springs, New York. Paul also works in milk procurement for Maple Hill Creamery – a fast-growing small dairy processor in eastern New York. Brief Description of Maple Hill Creamery (p. 9): Paris Reidhead profiles the history of Maple Hill Creamery, which processes and markets 199% grass, organic milk.

All-Grass/Organic: Paul and Phyllis van Amburgh (p. 11):
    The van Amburghs answer questions about their feeding and breeding programs in their all-grass/organic dairy farm.

New Zealand Facing Declining Moisture Situation (p. 12):
    Writer Ken Rabas reviews current articles from “down under” about rapidly developing dry pasture conditions.

Founder Hamdi Ulukaya’s Position at Chobani Uncertain (p. 13):
    Writer Nate Wilson summarizes what’s being reported about efforts to limit founder Hamdi Ulukaya’s responsibilities at Chobani Yogurt. Ulukaya’s style drove the firm nearly to insolvency earlier in 2014, major newspapers are reporting.

DFA Hitting a Lot of Serious Potholes Lately (p. 14):
    If you believe what’s in The Milkweed, DFA has a whole bunch of serious problems; dumped milk, contaminated product recalls, and the money-losing, new milk powder plant at Fallon, Nevada. Word is that DFA CEO/President “Tricky Rick’ Smith is starting to shoot his generals.

Milk marketing chaos reigns (p. 15):
    Pete Hardin discusses recent ugly events and poses some suggestions about wiser dairy marketing in the future. Example: Trash the notion that milk buyers are obligated to take all the milk in the bulk tank and find a home for it.

Dean Foods to Pocket 30-cent/Gallon Class I Price Drop in Midwest (p. 16):
    We reproduce an internal Dean Foods communication detailing how the firm will not reduce milk prices in January 2015 to customers, despite a 30-cent drop per gallon in raw milk costs. Dean Foods failed to respond to questions posed about the authenticity of the memo and whether the practice was corporate-wide.

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.

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.

 

October 2014  Issue No. 423

Inside this months issue...

Feature Story: Milk Prices About to Tumble from All-Time Peaks (p. 1):
    Read our story of the month here.

Almost Everything Going Wrong for U.S. Corn Producers (p. 1):
    The nation’s corn producers face tough times: a bumper harvest awaits, rail car shortages are holding up sales of old crop, and prices are falling.

Dairy Producers: Strategize Financial Transition from 2014 to 2015 (p. 2):
    We recommend numerous strategies for dairy producers as they transition from the financial best year ever to 2015’s uncertainties.

Dairy Farmers face HUGE 2014 Income Tax Obligations Unless Congress Boosts Section 179 Elected Depreciation (p. 2):
    As the law currently exists, elected depreciation allowances for 2014 revert back to $25,000. For the past few years, that allowable amount had been $500,000. Unless Congress restores the $500,000 allowance by year’s end … Uncle Sam may be the primary beneficiary of 2014’s dairy farming profits.

Sept 2014 Class III Price $24.60/Class IV Price $22.58 (p. 2):
    The September 2014 was the highest-ever Class III (cheese) milk price in the history of USDA’s federal milk order program.

Analyzing August 2014 U.S. dairy Protein Powder Output/Inventories (p. 3):
    Dairy protein powder output is up-and-down, depending on export orders for specific items. However, inventories are piling up dangerously.

Signing Up for Dairy Margin Protection Program Looks Wise (p. 3):
    Dairy farmers should take a very close look at signing up for the dairy margin protection program for 2015. If producers have the option to pay all premiums in 2014, aim high.

Warming to Dairy Producers: “Cheap” DDGs Pose Sulfur Toxicity Health Problems to Cows (p. 4):
    Collapsed export demand for U.S. dried distillers’ grains (DDGs) has dropped costs to domestic users. Dairy farmers should beware of putting undue quantities of DDGs in their herd’s rations – for fear of deadly sulfur toxicity.

Vilsack Morning to Impose New Tax for Second Beef Promotion Program (6):
    Behind the scenes, USDA Secretary Tom Vilsack has been involved with beef industry efforts to increase the $1/head assessment promotion fee tacked on sale of beef and dairy cattle.

2014 Corn Harvest: Crop Significantly Behind on Normal Maturity (p. 6):
    In late September, USDA estimated that the maturity of the 2014 corn crop was about ten percentage points behind normal. The biggest problem of slwo-maturing corn is in the Upper Midwest and Plains states.

Retail Sales Data Track Chobani Yogurt’s Rise & Fall (p. 7):
    Retail sales data for the past several years tracks the spectacular growth of Chobani Yogurt. But in mid-spring 2014, Chobani’s “Year over Year” sales growth turned negative – following the company’s reduction of serving portions and a price hike.

Wilson Dairy’s “Generation 3” Barley Sprouting System (p. 8-9):
    Writer Paris Reidhead pays a return visit to the dairy farm operated by Ken and John Wilson near Hammond, New York. The Wilsons now use their “third generation” of barley-barley sprouting to sustain their 130 Holstein milk cows.

Question & Answer Interview with Ken Wilson (p. 8):
    Ken Wilson answers questions about the operation of his latest barley-sprouting system and details the benefits to his milking herd.

Past Century’s Agricultural Depressions Stoked by Export Fever (p. 10):
    Pete Hardin details how short-term agricultural exports have fueled undue optimism (and excess capitalization) by U.S. farmers, at various times over the past century. The bottom line: our succession of agricultural depressions/recessions have followed. What’s ahead????

Bad Idea: Forcing Dairy Producers into “FARM” (p. 11):
    In response to recent videos of dairy cow abuses, National Milk Producers Federation is pushing a scheme to require all dairy farmers to comply with its “FARM” program. Bad idea!!!

Organic Valley’s Lawyer Takes the Helm at the OTA (p. 12):
    Melissa Hughes – the attorney for the Organic Valley co-op – is the newly elected chairperson for the Organic Trade Assn. OTA is promoting an industry-wise promotion check-off scheme.

Recent Study Suggests Artificial Sweeteners Alter Body’s Metabolism (p. 12):
    Scientists are discovering that artificial sweeteners negatively impact the human gut flora. Not good.

Cheese & Butter Prices Ease Back, But Demand Still Solid (p. 13):
    In the past couple weeks, CME prices for Grade AA butter and Cheddar cheese have slipped from all-time peaks. However, inventories remain relatively light and domestic demand is solid.

Northeast Chaos: Fluid Milk Sales and Yogurt Output Sharply Decline (p. 14):
    Northeast dairy marketers – especially in New York State – are facing burdensome supplies of farm milk. What’s wrong??? Regionally, fluid milk sales are way, way down (below national declines). And the much-ballyhooed New York yogurt industry has actually produced less yogurt every month for the past year, starting in September 2014. Why is NYS Ag & Markets hiding dairy statistics from 2012 and 2013???

Southeast Milk Litigation: Where is Dean Payment #3? (p. 14):
    Writer Julie Walker details the legal hassles behind issuance of the third payment to qualified persons in the Dean Foods portion of the Southeast Antitrust Litigation.

Is China “Gaming” U.S. Grain/Dairy Pricing Systems??? (p. 15):
    Pete Hardin lays out a black scenario comparing China’s habits as a major purchaser of U.S. grain and dairy. China’s “hot and cold” status as a buyer is threatening the value of U.S. assets devoted to these commodities. Coincidence? Or part of a darker plan to buy U.S. farm and food assets for dimes on the dollar???

Who’ll feed the refugees? What? (p. 15):
    As dairy commodities pile up in the U.S. and western Europe, Pete Hardin contrasts that “abundance” with the dire food needs of the hundreds of thousands of refugees being created by civil conflict and natural disasters. How to collect financial resources to acquire and properly distribute dairy products and food to those facing hunger?

“Tote” Label Tracks Milkfat/Salt Concoction from NZ’s Fonterra to Kraft Foods (p. 16):
    We reproduce the label from a 2200-lb. “tote” shipped from NZ to Kraft Foods in the U.S. This amalgam of milkfat and salt is designed to end-run U.S. tariffs. Different circus, same clowns … Fonterra selling “stuff” to Kraft Foods.

“Understanding Dairy Markets” – An Online Gold Mine of Dairy Data (p. 16):
    Contributor Jim Eichstadt details a Web site created by the University of Wisconsin-Madison dairy economist Dr. Brian Gould. That tool allows interested persons to generate their own insightful dairy data.

September 2014  Issue No. 422

Inside this months issue...

Cheese/Butter Remain Seasonally Strong, Milk Powder Sector Collapsing (p. 1):

    Dairy commodity prices are going in two directions at once. Domestic shortages of cheese and butter are propelling those commodities to peak prices. But the bottom has collapsed out of the U.S. milk powder sector, as export demand has seriously eroded.

Beef Imports from FMD-Infected Nations??? Vilsack Endangers U.S. Livestock & Food Supply (p. 1):
    In a page 1 editorial, Pete Hardin labels USDA Secretary Tom Vilsack a “dangerous ignoramus” and calls for his removal from office. What did Vilsack do? He’s back with two proposals to import beef from Foot-and-Mouth-Infected Argentina. Hardin concludes that Vilsack is a poor steward of the nation’s livestock and food supply, for repeated proposals to import beef from FMD-infected nations.

Beef from FMD-Infested Argentina After 10/28/14? (p. 2):
    Contributor Jim Eichstadt has discovered that an August 28 announcement by USDA means that beef from the Patagonia Region of Argentina may start entering the U.S. in late October. Argentina has a Foot-and-Mouth Disease problem.

August 2014 Class III Price Announced at $22.25, Class IV at $23.89 (p. 2):
    Class prices for USDA’s federal milk orders are up again for August.

Russian Embargo Disrupts Global Trade; U.S. Dairy to Feel Shrapnel (p. 3):
    Russia’s embargo of dairy and food products from the EU nations, the U.S. and Australia has disrupted normal commerce in the global dairy industry. Since the U.S. has not set any dairy products to Russia since some time in spring 2010, the impact on this nation will be indirect. But high butter and cheese prices here will draw distressed global products.

New Russian Banking Sanctions Threaten Swiss Dairy Export Hopes (p. 3):
    Banks in Switzerland handle about 80% of Russia’s oil industry banking. Swiss authorities have now announced sanctions against five Russian banks and their Swiss subsidiaries. Take that, Putin!

Chinese Dairy Imports Above 2013, But U.S. Market Share Declining Sharply (p. 3):
    Trade data show China’s diary commodity imports for the first half of 2014 are significantly ahead of 2013’s first-half numbers. But the U.S. is finding it hard to maintain exports. Our prices have increased during 2014, while global market prices have generally declined. The U.S. milk powder sector sees prices declining sharply.

Nice Holstein Herd Brings Nice $$$ at Wisconsin On-Farm Auction (p. 4):
    The Milkweed attended the August 25 herd dispersal of Richard and Paulette Keene near Barron, Wisconsin. Their well-tended herd averaged about $2,250 apiece for the 100+ milk cows.

DFA Dumping Milk, Reblending Losses from Northeast Members’ Checks (p. 5):
    Hard to believe, but Dairy Farmers of America has been dumping large volumes of milk in the Northeast in June and July. DFA is blaming Chobani Yogurt for reducing milk intake at that company’s upstate NY yogurt plant. But the story goes far deeper than that. DFA smacked members’ milk checks with a 15-cent/cwt. marketing loss assessment for July deliveries. More to come, The Milkweed projects …

WMP & SMP Exports/Production Way Down (p. 6):
    Due to decreased global demand, U.S. production of Skim Milk Powder and Whole Milk Powder has declined from early monthly totals. WMP is piling up in warehouses, according to USDA data.

Questions/Answers with AMPI Butter Guru Jim Walsh (p. 7):
    With commodity butter prices at a few cents below $3.00/lb., one of the nation’s most respected butter marketing professionals answers some “buttery” questions from The Milkweed.

Empire Specialty Cheese: See You in September? (No Way) (p. 7):
    Writer Nate Wilson takes another look at the lack of construction at a cheese plant in western New York State that, early last June, was promised to be completed this month. What with all the grants promised by various government agencies, there’s a big embarrassment brewing here.

Good Dairy, Better Dairy … GREAT Dairy! (p. 8):
    Pete Hardin reviews the many changes in descriptors on dairy product packages. Consumers want more information about what’s in their dairy products and how they’re processed. Where is the industry headed???

Feature Story #1 – USDA Proposes Beef Imports from FMD-Infected Argentina as U.S. Cattle Numbers Plummet (p. 9):
    Jim Eichstadt dishes out the dirty details of USDA’s latest proposals – as U.S. cattle numbers slide to the lowest level in 60+ years – to import beef from Foot-and-Mouth Disease-infected nations. Read all about it here.

Impending Drought? Let’s Fight Back! (p. 10-11):
    Writer Paris Reidhead makes a wide-ranging review of science involving moisture and crop issues. Modern agronomy and seed practices make major U.S. crops more susceptible to drought damages.

Artisan WI Plant Quits Raw Milk Cheese Output, Due to FDA’s Confusion (p. 12):
    Uplands Cheese Company – an award-winning business – has quit making raw milk cheeses. Owner Andy Hatch cites confusing rules coming from FDA about a variety of issues, including wooden aging boards, for his decision to quit producing a popular raw milk variety.

Feature Story #2 – R-CALF USA’s Bill Bullard Provides Insights on Critical Issues Facing Cattle Producers (p. 12-14):
    Read our second story of the month here.

Strange: Butter Prices Soar, Cheese Strong, Powder Prices Nose-Dive (p. 13):
    Pete Hardin analyzes the ups and downs of the current dairy commodity scene. Export demand has hammered the milk powder trade.

Dairy at the convergence of nutrition, wellness and health (p. 16):
    Intelligent dairy farmers and marketers can be at or near the head of the parade that links nutrition, wellness and health. The linkage of good dairy nutrition gains increased scientific backing. But dairy must do much more than just repeat the same-old, same-old mantras about milk and health.

Time to cull a failed USDA Secretary (p. 15):
    Pete Hardin beats up on poor Tom Vilsack again.

CA’s H2O Supplies Dire, Entering 3rd Year of “Worst Ever” Drought 11 Biggest Reservoirs 20.5% of Capacity, Restrictions on Well Drilling (p. 16):
    Using recent reservoir capacity data from the California Department of Water Resources, Pete Hardin calculates that the state’s 11 biggest reservoirs are only at 20.5% of their full capacity. Meanwhile, state legislators have passed a bill implementing stricter oversight of drilling wells for water.

USDA Rolls Out Dairy Margin Protection Program Details (p. 16):
    USDA has released information for dairy farmers who wish to study the new federal milk program. The program is based upon levels of margins over production costs.

August 2014  Issue No. 421

Inside this months issue...

Feature Story: Top Springers’ Prices Climb to $3,600 at CA, MN Auctions in Late July (p. 1):

   Read our “Article of the Month” here. The headline says it all. The surge of dairy livestock prices has pegged top springers at $3,600 in two major dairy auctions (Escalon, CA and Zumbrota, MN) in late July. Dairy livestock values have climbed a50-175% (or more) in the past year.

“Milk Prices Might Crash, Lock in Your Margins” … and Other Baloney (p. 1):
    The experts have totally missed the 2014 run-up in farm milk prices, but keep bad-mouthing future milk prices. We advise dairy farmers to “ride the market” and not sign fixed-price deals for upcoming months’ milk prices.

Butter Output & Inventories Down: Recent Prices Peak & Fall Off Peak (p. 2):
    Butter cash market prices climbed above $2.60/lb, before retreating back to the $2.40/lb. range in early August. Production is down. Inventories are very tight. Looks like we’ll see imports entering the country, as recent months’ high U.S. prices preclude most exports.

July ’14 Class III Price Announced at $21.60 – Class IV at $23.78 (p. 2):
    Prices for Class III (cheese) and Class IV (butter-powder) milk increased slightly in July, compared to June 2014 prices used in USDA’s federal milk order program. Strengthening butter prices get credit for those increases.

B-I-G Deal: Agropur (Biggest Canadian Dairy Co-op) Buys Davisco (p. 3):
    Davisco Foods International now flies the Maple Leaf flag. Davisco – the leading U.S. firm developing whey and whey by-products – was transacted for an unannounced price on August 1. Interesting …

Watch Build-Up of U.S. Whole Milk Powder Supplies (p. 3):
    Global dairy protein powder prices are sliding backwards. U.S. dairy manufacturers have geared up to produce more WMP in the past year. But their warehouses are filling with unsold product in the past two or three months. Watch this one!

NY Dairy Farmer “Got the Shaft” from Dairylea on PI Count (p. 4):
    North country dairyman Don Dana put up a big sign on his barn alongside State Route 11, near Moira, New York. That sign reads: “Dairylea Cooperative got the gold mine. I got the shaft.” Dana is irked because Dairylea deducted $8,000 in quality penalties the last month in 2013 he shipped to that co-op. Those penalties were due to alleged high “PI” bacteria counts. Funny thing: Dana received a “Quality Milk Award” from Cornell University in 2013 for having ten months SCC counts below 200,000/ml.

Northeast Dairy Antitrust Case: Lead Plaintiffs Opposed, So Judge Denies Proposed Preliminary Settlement (p. 5):
    The Northeast dairy antirust case has fallen into legal limbo. Class Representatives (lead plaintiffs) informed their attorneys and court clerk in early July that they opposed the proposed settlement reached by attorneys for both sides that was submitted to the judge on July 1. The judge’s denial of the proposed settlement was scathing.

Five Pieces of the Weather/Crop Puzzle (p. 6-7):
    Writer Paris Reidhead explores the scientific community’s expertise on the related events involving weather patterns and agricultural crops (particularly corn).

Russia: Biggest Supplier of Potash (Critical Fertilizer) to U.S. (p. 7):
    As the U.S. and its allies in western Europe ratchet up the economic pressure on Putin’s Russia … and Putin responds with his own embargoes … a key fact in this interdependent world is that Russia is the biggest source of potash used by U.S. agriculture.

2014 Corn Outlook Cloudy After Roaring Start (p. 8-9):
    Contributer Jim Eichstadt takes a long look at many key events in the current U.S. corn market. Those matters include: current crop conditions, weather matters, global market conditions … all compounded by USDA’s struggles to release details of the new farm programs that were belatedly passed by Congress in early 2014.

Grain Producers Face Much 2014 Farm Program Uncertainty (p. 9):
    While USDA finalizes new program details for grain producers, Jim Eichstadt discusses what we do know about the new federal grain program. Details of the federal program are all the more important, due to sharp declines in corn prices and a bin-busting 2014 harvest.

Organic Dairy Production with the End in Mind (p. 10-11):
    Colorado veterinarian Arden J. Nelson delves deep into the changes in milk composition over the past 50+ years. He details how the ration of Omega-3 acid to Omega-6 acid has been dramataically changed, due to cows consuming less forage and more grain in their diets. Nelson then presents information about improved dairy cow breeding when cows are fed diets enhanced with Omega-3s. Further, he lists the top 10 causes of human mortality in the U.S. – while noting six of those top ten are linked to low Omega-3 levels.

Corporate Influence Eroding USDA’s Organic Standards (p. 12):
    Will Fantle of the Cornucopia Institute details a study of voting patterns by members of USDA’s controversial National Organic Standards Board (NOSB). While real organic farmers voted consistently to uphold strong standards, appointees with corporate backgrounds voted in favor of less strict oversight of ingredients and practices.

Empire Specialty Cheese Late Milk Payments (p. 13):
    Writer Nate Wilson revisits the bad boys at Empire Specialty Cheese in western New York. Seems that Empire was late paying for May 2014 milk deliveries to the Amish producers supplying that plant. The New York agriculture department is watching this situation, following a complaint about late payments.

Sept. Start for New NY Cheese Plant? No Construction Permits Issued Yet (p. 14):
    The “other half” of Nate Wilson’s reporting assignments this month. Empire Specialty Cheese is supposedly constructing a new cheese plant at the site of an closed meat packing facility in western New York. The project lined up numerous government grants – county, state and federal. As late as June 2014, a principle at Empire claimed the plant would be running by September 2014. But Wilson’s digging found that NO CONSTRUCTION PERMITS have even been issued yet for that project! Combined with late milk checks to its producers for May milk, Empire Specialty Cheese looks like a bunch of cash-flow challenged New Jersey creeps.

Proposed Northeast antitrust settlement: a crock (p. 15):
    Pete Hardin gives both barrels (.10-gauge slugs) to the unfortunately drafted proposed settlement of the Northeast dairy antitrust case. What’s particularly strange: secretive clauses (not disclosed in written materials provided to potential claimants that disallow farmers filing for damages claims to sue the defendants (DFA, DMS) or their agents, subsidiaries, etc. for anything that was done prior to 2014. Now, why the secretive prohibitions against future lawsuits? Hardin goes on to detail how a series of investor LLCs in western New York – operating over the past dozen-plus years – have bought up dairy farmers’ mortgages and driven virtually every such farmer into bankruptcy! These LLCs have Dairylea Co-op’s DNA all over them, Hardin asserts. Worse yet: land grabbed from bankrupted farmers has frequently ended up in the possession of big dairies with special relationships with Dairylea/DFA/DMS.

Methane Digester “Blows Its Top” in Dane County, Wisconsin (p. 16):
    A trio of methane digesters northwest of Madison, Wisconsin continues to have operating problems. The latest: one digester exploded and “blew its top” in early August. This event is just one in a long series of mechanical failures and broken pipes. Maybe taxpayers in Dane County are subsidizing a real stinker. What’s worse: USDA Secretary Tom Vilsack is moving ahead with long-intended plans to build methane digesters on many U.S. dairy farms.

July 2014  Issue No. 420

Inside this months issue...

Feature Story: Whiplash? Chinese Back Off Dairy Imports; May Sell Grain (p. 1):

    Read our story of the month here.

U.S. Butter Inventories Light, Prices Shrink Exports (p. 1):
    U.S. butter inventories are about 130 million lbs. lower than last year’s figure (as of May 31). U.S. prices are right around $1/lb. higher than Fonterra’s recent electronic offerings. High U.S. butter prices preclude butter exports.

Butter Basking in “Good News” Amid Rising Prices and Scarce Inventories (p. 3):
    We take a wider look at the current dynamics of the U.S. butter market – including a tidal wave of favorable publicity.

Tracking Butter Imports in 2014 (p. 3):
    The Milkweed starts tracking monthly butter import data (vs. year-ago). We’re watching government data for confirmation of the big slug of butter imports heading this way.

Chobani Yogurt’s Cost Per Ounce Climbs 30% in 2014’s First Half (p. 4):
    With smaller cup sizes and higher prices per cup, Chobani has bumped up the cost per ounce of its yogurt by 30% just in 2014. Where is the price pressure point for consumer purchases.

Bilateral Investment Treaty with China Should Raise Red Flags in U.S. (p. 4):
    Contributor Jim Eichstadt details how, on July 9, 2014, U.S. negotiators sat down with their Chinese counterparts to discuss a bilateral investment treaty. Some critics view such treaties as dangerous to the democratic process, because foreign nations and their corporations are exempt from the U.S. legal system under such treaties.

DFA/DMS Settle Northeast Antitrust Case: $50 Million (p. 5)
     The big trial scheduled for July 8 in Vermont was delayed by a proposed settlement forged by opposing attorneys. Defendants Dairy Farmers of America and Dairy Marketing Services will pay a total of $50 million to defendants, from which court-approved attorneys’ fees and expenses will be deducted before the remaining funds are divvied out to eligible dairy producers. We include key excerpts from the proposed settlement agreement.

Arkansas Co-op Goes Belly-Up (p. 5):
    The small Arkansas Dairy Cooperative Assn. is no more, as of late June.

Molasses Motivates Microbes … the Soil-Friendly Kind (p. 6-7):
    Writer Paris Reidhead explores the emerging practice of boosting soil microbiota by addition of molasses. Molasses “feeds the little creatures” also.

Midwest Crop Picture Might Brighter than Last Year’s – Except in Minnesota (p. 7-8):
    Contributor Jim Eichstadt shares his observations from a long, 2,300-mile trip through America’s agricultural heartlands in mid-June. (Hint: Minnesota is again the “Land of 100,000 Lakes.)

DMI/NDB/UDIA Officials Meet with WMMB Board (p. 8):
    On June 17, national dairy promotion officials met in Wisconsin with the Wisconsin Milk Marketing Board directors and staff. Pete Hardin contrasts the entities’ differing styles of marketing U.S. dairy products. Advantage: Wisconsin.

Dairy Commodity Scene: Strong Prices Still Holding (p. 9):
    At press time, CME cash prices for butter were in the high “230s” and Cheddar prices were just below the $2.00/lb. benchmark. Domestic dairy demand is good, and inventories of cheese and butter are light.

Cheese board fiasco: wooden heads at FDA (p. 11):
    Pete Hardin blasts away at recent ridiculous dictates from FDA as that federal agency implements the Food Safety Modernization Act (FSMA). Overall, Congress has created a set of rules that challenge the IQs of FDA personnel to implement in the real world. Hardin details how many food safety problems are the fault of poor inspections by federal employees.

Grundy Center, IA: Same Field Mid-June 2014 & 2013 (p. 12):
    Jim Eichstadt photographically contrasts 2013’s and 2014’s fortune for the same cornfield in Iowa’s corn country.

July 5: Hardin’s 1st cutting finally done! (p. 12):
    At long last, weather permitted the harvest of Pete Hardin’s grass hay crop on July 5. Making first-cutting dry hay in the Upper Midwest this year has been near impossible.

June 2014  Issue No. 419

Inside this months issue...

Overall Market Confidence Sustains Commodity Prices During “Spring Flush” (p. 1):

    Increased milk production in the Southwest and big losses in fluid milk sales in the Northeast have strained dairy manufacturing plant capacities in recent weeks, but the worst of the “Spring Flush” seems over. Marketers of distress milk are taking a beating on prices. But overall dairy commodity prices are relatively stable so far.

Butter “On the Water, Heading This Way” (p. 1):
Butter buyers are backing off orders, anticipating possible lower butter prices as shipments of butter and high milk fat products sail towards the U.S.

May ‘14 Class III Price at $22.57 – Class IV $22.65 (p. 2):
    The manufacturing milk class prices for USDA’s milk order system for May 2014 each went backwards, predictably. But rising butter prices buffered the impact of lower Cheddar and nonfat dry milk prices in USDA’s formulae.

Several Regional Dairy Superpools Falling Apart … (p. 3):
    In the Southeast, Mid-East, and Upper Midwest, regional dairy cooperative superpools have fallen apart or else are buckling under the strain of less disciplined movement of milk.

Canadian Dairy Quota System Under Pressure (p. 3):
    Canada’s provincial milk quotas are under serious pressure from several angles: “Free Trade” deals, Chinese investors buying farmland and setting up milk processing plants … and just the simple fact that Canada’s milk production hasn’t kept pace with that nation’s consumer demand.

Prairie Farms Reports Massive Losses (p. 3)
    The first couple months of Prairie Farms’ fiscal year yielded several million dollars in red ink.

Beef Product Recalls Raise Doubts about Competence as USDA Pushes Brazilian Import Proposal (p. 4):
    Recent beef recalls in California and Michigan raise serious questions about the overall competence of USDA to adequately police meat safety. Meanwhile, USDA is mulling its proposal to allow beef imports from 14 supposedly “Foot-and-Mouth Disease” free states in Brazil.

NCBA Demands Brazilian Inspection Reports (p. 4):
    The National Cattlemen’s Beef Assn. is demanding USDA stop withholding important information regarding recent review of beef handling procedures in Brazil.

Why USDA’s Screw-Ups Matter (p. 4):
    Contributor Jim Eichstadt puts the pieces of the puzzle together: USDA’s failed domestic meat safety oversight and the foolish proposal to allow Brazilian beef into the U.S. If USDA can’t enforce our domestic meat slaughter and processing rules, how can USDA pretend that foreign nation’s meat safety practices are adequate???

Greek Yogurt Hits the Fan as Chobani Custody Battle Heats Up (p. 5):
    Writer Nate Wilson will have you rolling on the floor in laughter at the legal antics in the mushrooming Chobani Yogurt custody battle between owner Hamdi Ulukaya and his former wife, Dr. Ayse Giray. In mid-March, Ulukaya recharted Chobani as a Delaware-based LLC – deep-sixing the prior corporate structure (Chobani, Inc.) Ululaya’s lawyers didn’t admit the corporate switcheroo until almost six weeks after the fact. Her lawyers charge fraud.

Say “Whoa” Before Feds go Hog Wild Building Methane Digesters (p. 6-7):
    Writer Paris Reidhead presents a detailed explanation of the science and dynamics behind dairy methane digesters. Paris advises that serious consideration must be given to questions whether methane digesters really help solve greenhouse gas problems.

Feature Story #1: Extended Great Lakes Region: Future Global “Food Basket” (p. 8-9):
    Pete Hardin puts traction to a fast-emerging reality: incredible global investment interest in farmland and food processing resources the extended Great Lakes Region – both in Canada and the U.S. Why? The Great Lakes Region has a unique set of resources: soil, moisture, climate, modern agriculture and food processing … plus political and economic stability. Read the story here.

Feature Story #2: Some Canadian Farm Papers Report Chinese Ag/Food Investments (p. 9):
    A review of reporting about Chinese investments in Canada from articles written by two Canadian writers. Strong stuff … Read the story here.

Northeast Antitrust Trial vs. DFA & DMS to Start July 7 (p. 10):
    A huge dairy antitrust trial is scheduled for jury selection on July 7 in federal district court in Burlington, Vermont. Pete Hardin digs deep into the issues that find Dairy Farmers of America and its subsidiary, Dairy Marketing Services, defendants in a $600-$800 million dollar legal fracas. Plaintiffs charge that the cooperatives unduly restricted access to Northeast fluid milk plants and they also underpaid regional dairy farmers for their milk. If plaintiffs’ damages claims are sustained by jurors, damages will be triples u under federal antitrust laws.

OTA’s Robo-Calls Irk Organic Farmers During Spring Planting (p. 11):
    Will Fantle of the Cornucopia Institute details the public relations thrust behing the Organic Trade Association’s efforts to build support for an organic promotion check-off program. OTA is funding robo-calls soliciting organic producers’ opinions on the check-off. OTA snuck in such a proposal in recently passed federal farm law.

New Study: Conventional “Wis-dumb” on Saturated Fat Deeply Flawed (p. 12):
    Writer Nate Wilson details findings of a recent published book tiled, “The Big Fat Surprise: Why Butter, Meat and Cheese Belong in a Healthy Diet.” This book – written by Nina Teicholz – traces the evolution of policies that scorned saturated fats in the diet, instead promoting vegetable oils and grains. Good reading!

Update on GIPSA Investigation of NY’s Empire Livestock (p. 12):
    Nate Wilson offers more details about cattle trading irregularities by characters in Pennsylvania, including the owner of the Morrison’s Cove Sales Barn in Claysburg, PA.

April Dairy Products: Mozzarella, Cheddar & NFDM Up; Butter Down (p. 13):
    We summarize April 2014 and January-April 2014 dairy commodity production totals, with analysis.

Dairy Producers; Don’t Get Panicked into Signing Futures Contracts! (p. 14):
    The milk price decline from too-high peaks earlier this year has the “usual experts” telling farmers to sign fixed-price milk contracts to lock in their profit margins. These guys can sing only one misguided song.

Nearly 40 years of journalism invested … (p. 15):
    Pete Hardin reflects on nearly 40 years of detailing the incompetence of major Northeast dairy cooperative leaders, as a lead-in to the big dairy antitrust trial set for federal court in Burlington, Vermont in early July. Hardin puzzles how many thousands of hard-working Northeast dairy farm families have been pushed off their farms by ruinous prices generated by the region’s curdled milk marketing system.

January-April 2014: U.S. Dairy Exports’ Prices Underperformed CME (p. 16):
    Interesting! For the first four months of 2014, the price relationships between Chicago Mercantile Exchange monthly averages and the average price (per lb.) of U.S. exports of cheese, nonfat dry milk and butter reversed fortunes, compared to 2012 and 2013 prices. This year, monthly prices of these dairy exports ranged below CME cash market. One factor: increased advance commitment of export sales that tightened domestically available supplies in following weeks and months. prices.

May 2014  Issue No. 418: Our 35th Anniversary Issue!

Inside this months issue...
Feature Story: Butter Looks Like Dairy’s Prime Price Mover in 2014 (p. 1):

    Read our “Story of the Month” here.

California’s Water Woes Worsen: Snowpack Shrinks, Little Recharge of Reservoirs (p. 1):
    From early April to early May, California’s water metrics worsened. Much of the snowpack disappeared, within little boost to reservoirs’ water levels.

Dairy Commodity Review: Butter Prices Strengthen, Cheddar & NFDM Slip (p. 2):
    The dairy commodity scene features rising butter prices, offset by declines in cash values for nonfat dry milk and Cheddar.

China: Stiffer Rules for Milk Powder/Infant Formula Imports (p. 2):
    China just announced stricter rules for imports of dairy protein powders and infant formulas. This move is probably part of a wider move to consolidate the infant formula industry in China.

April 2014 Class III Price Sets Record: $24.31 (p. 2):
    The April 2014 cheese milk price for USDA’s federal milk order system peaked again … at $24.31/cwt.

Great Lakes States’ Corn Planting Off to Slow Start (p. 3):
    Cold, wet spring weather conditions have significantly slowed down corn planting in the states around the Great Lakes.

Public Comments Blast USDA’s Brazilian Beef Import Proposal (p. 4):
    We review the comments submitted to USDA on the proposal to open up 14 states in Brail for imports of chilled and frozen beef to the U.S.

FDA Web Site Reveals Many Contaminated Food Imports (p. 5):
    Contributor Jim Eichstadt walks us through the maze of contaminated food imports seized by the FDA.

Robotics: Efficiency’s Cutting Edge for Cheese & Food Plants (6-7):
    We visit Quest Industrial (Monroe, Wisconsin) – the nation’s leading integrator of robotic technologies for dairy plants. Owner Don Wickstrum details the many efficiencies that robots can bring to a cheese plant.

Select PowerPoint Panels from ADPI/ABI Conference (p. 8):
    We reprint selected PowerPoint Panels from speakers’ presentations at the recent, combined annual conventions of the American Dairy Products Institute and the American Butter Institute.

New York’s Engelbert Family: Cornerstones of American Organic Dairying (p. 9-10):
    Paris Reidhead profiles the Engelbert family of Nichols, New York – the nation’s first organically certified dairy farmer. They farm 30 miles west of Binghamton, New York.

Dairy Livestock Prices Moving Up (p. 10):
    In most markets, prices for dairy livestock are moving up vigorously.

Snowville Creamery Starts GMO-Free Feed Testing for Producers (p. 11):
    Ohio’s progressive Snowville Creamery has started a testing service for producers shipping to that dairy: testing feed samples for genetically modified organisms (GMOs).

Mixed Bag: Upstate Niagara Released 2013 Financial Report (p. 12):
    Nate Wilson reviews background issues of Upstate Niagara’s financial report. Bottom line: a good year, price-wise, for dairy farmer members translates into reduced profits for a cooperative’s operations.

Organic Milk supplies Impossibly Tight in Midwest (p. 12):
    The headline says it all.

Complicated Legal Settlement of DFA’s Long-Ago Cheddar Manipulations (p. 14):
    A $46 million settlement has been achieved between attorneys for Dairy Farmers of America and plaintiffs in a wide-ranging class action lawsuit involving DFA’s manipulations of CME Cheddar prices in 2004.

Dairy faces Biotech Foods Battle Gain (p. 15):
    Pete Hardin reviews dairy organizations’ prior lining up behind Monsanto in the biotech foods battle and suspects that they’ll repeat in the brewing battle over consumers’ demands to GMO content of their foods.

USDA’s “Cold Storage” Data Overstated? (p. 15):
    Pete Hardin explains that recent industry events – including longer-term sales contracts and longer holding periods for finished packaged products (for safety-testing) mean that dairy manufacturers are holding increased volumes of inventories. Hardin details that slower turn-out of finished products puffs up USDA’s monthly data on the Cold Storage Report.

LOL Spread at ABI/ADPI Breakfast (p. 15):
    Land O’Lakes hosted the complimentary continental breakfast on Monday, April 28 at the combined annual conventions of the American Butter Institute and the American Dairy Products Institute. At that breakfast, “Fresh Buttery Taste Spread” (less than 2% butter) was served. We knew butter supplies are tight, but that situation is ridiculous!

Severe Western Drought Projected Through Mid-Summer (p. 16):
    Current projections call for no improvement in the Drought conditions hammering California and the Southwest.

April 2014  Issue No. 417

Inside this months issue...

Dairy Commodities Tumble from Earlier, Too-High Peaks (p. 1):

    Cash markets for Cheddar, butter and milk powder have fallen from their price peaks in March. But that’s not bad. Too much, too soon isn’t healthy for the overall dairy markets. Cheese demand is strong, both domestically and for export. Butter and cream will be scarce in the second half of 2014.

Jan-Feb. ’14 U.S. MPC Exports Top Imports (p. 1):
    Hard to believe. Global dairy proteins are so scarce in early 2014 that the U.S. has become a source, not the usual “dumping ground” for Milk Protein Concentrates.

Resolution of March 2014 Class III “Futures” – Big Pain or Big Gain??? (p. 2):
    Participants in March 2014 Class III Futures positions either suffered big pain or enjoyed big gain. The acceleration of commodity Cheddar prices and the ensuing ripple effect on the Class III (cheese) milk futures levels in USDA’s farm milk pricing program left some very poor … and some very rich … bettors.

March 2014 Class III at $23.33/Cwt., While Class IV at $23.66/Cwt. (p. 2):
    In USDA’s classified price calculations for March 2014, Class III (cheese) milk was down by two cents per hundredweight. Meanwhile, Class IV (butter-powder) milk climbed by twenty cents to $23.66 per hundredweight.

Huge Jump for Jan.-Feb. 2014 U.S. Dairy Exports (p. 3):
    For the first two months of 2014, U.S. exports of cheese climbed 45% and butter exports rose 92% -- compared to 2013.

Beat THAT! $1.33/lb. Live Weight Paid at Auction for Cull Dairy Cow (p. 3):
    A big Holstein cow that wouldn’t get rebred brought $1.33/lb. live weight at an auction for a southern Indiana dairy producer. Beat that. U.S. cattle supplies are tight.

Ex-Wife’s Court documents Tarring Chobani Yogurt Founder’s Image (p. 4):
    Documents filed in their “she say/he say” lawsuit over controlling interest of Chobani Yogurt by found Hamdi Ulukaya’s former wife allege a bevy of financial misdeeds, as well charges he paid a competitor’s former employee for that competitor’s secret Greek yogurt recipe. One way or another, Chobani Yogurt is in play.

Astronomical 2012 Salaries for Dairy Mgmt. Inc.’s Top Executives (p. 4):
    The Milkweed depicts the 2012 salary and compensation packages for Dairy Management, Inc.’s top executives in a new way: the number of dairy cows (of average milk production) needed to bankroll these dairy promotion bozos. On average, the U.S. dairy cow produces 22,000 lbs. of milk each year – or $330 total from the mandatory, $.15 promotion check-off. Example: Tom Gallagher (DMI CEO) needed 2,760 dairy cows to support his $910,786 salary/compensation package for 2012.

USDA: Interferon’s Key to Immediate Immune Defense Against FMD (p. 5):
    Writer Nate Wilson explores the science behind USDA’s recent claims of having successfully fashioned a vaccine for Foot-and-Mouth Disease. Problem is: the swine product “works” but requires such great quantities of materials so as to be mostly impractical. And USDA has nothing new in the way of cattle vaccines against FMD.

Fight Winter Energy Shortage with Early Energy Peak (p. 5):
    Paris Reidhead writes about high-energy yields from harvesting 60-day BMR corn.

What Caused Weird Winter Weather? What to Do Crop-wise? (p. 6):
    Paris Reidhead takes a long look at the scientific explanations for the past winter’s long-lasting, bitter cold. Unfortunately, it looks like spring will be slow and cold in northern states. He then explores crop strategies to cope with Mother Nature’s anticipated “cold shoulder” at the start of this year’s planting season.

Russian Dairy Plant Workers’ Video Catches Bathing in Cheese Vat (p. 7):
    “Comrade, pass the soap.” A drunken bunch of Siberian cheese plant workers celebrated New Year’s Eve with a bath in the cheese vat. Trouble was: somebody took a video of that party and the video went viral.

Feature Story #1: U.S. Dairy Industry Fighting Self-Inflected Injury as GI Battle Heats Up (p. 8 & 10):
    Read the first of this month’s “Stories of the Month” here.

Feature Story #2: European Cheese Name Fight Rooted in U.S. Dairy Import Assessment (p. 9):
    Read our second “Story of the Month” here.

Cheese Name Q&A with Bel Gioioso’s Errico Auricchio (p. 9):
    The president of Bel Gioioso Cheese – Errico Auricchio – is chairman of the Consortium for Common Food Names. In a question-and-answer format, Mr. Auricchio details the industry’s concerns about European Union proposals to disallow use of “Geographic Indicators” for dairy products and foods. Long story short: the Europeans don’t want U.S. firms to produce and market products such as “Parmesan.”

NMPF’s “REAL® Seal” User Fees Sparking Complaints (p. 10):
    The project by National Milk Producers Federation to revise and revive dairy’s “REAL® Seal” is butting against unhappy dairy product marketers. NMPF wants to impose a stiff, annual fee for use of the “REAL® Seal” – which has been available without cost for more than three decades.

Obama’s Dairy Greenhouse Gas Plan: Methane Digesters “Uber Alles” (p. 11):
    As part of the administration’s effort to reduce greenhouse gasses (GHGs), massive construction of methane digesters on large dairy farmer has been proposed by USDA Secretary Tom Vilsack. This proposal merits a lot of study.

DFA “Cleans Up” 2013 Audit … But Still “Lipstick on a Pig” (p. 12):
    Pete Hardin obtained a copy of DFA’s 2013 financial statement earlier than normal this year. Hardin digs into DFA’s 2013 financials and finds some improvement, but basically the same old bundle of bogus assets and debt. Watch DFA ongoing courtroom battles for potential liabilities!

Jan.-Feb. 2014 Dairy Export Data Reflects Major Destinations Shifts (p. 13):
    Export to China up. Exports to Mexico down in the first two months of 2014. Interesting shifts of export destinations for U.S. dairy products.

For 2013, AMPI Recorded $1.8 Bil. In Sales, $7.5 Mil. Earnings (p. 14):
    Associated Milk Producers, Inc. reported 2013 performance at its annual meeting in Bloomington, Minnesota on March 24-25. The co-op has a good story to tell and timed shift of its equity fund generation well, coinciding with current dairy trends.

Kill Transatlantic “Free Trade” talks & deprive Europeans’ “Geographical Indicators” forum (p. 15):
    ete Hardin rants about the notion of depriving U.S. cheese and food marketers of common, traditional names for products. European Union representatives are making noises about putting the “Geographical Indicators” issue on the table at the upcoming Transatlantic Trade and Investment Partnership (T-TIP). Hardin’s solution: junk such future “Free Trade” negotiations. “Free Trade” treaties can supersede U.S. Constitutional guarantees!

Pete Hardin’s comments to USDA Re: regionalization of Brazilian beef imports (p. 15):
    Pete Hardin cites five different instances in which USDA had “regionalized” (okayed) portions of Foot-and-Mouth Disease-infected nations in which new FMD outbreaks generally occurred within a few months. Hardin draws upon the classic definition of “insanity” to conclude in comments to USDA that “doing the same thing repeatedly and expecting different results is insanity.” Readers are urged to make their own comments on “regionalizing” Brazil’s beef industry for imports into the U.S.

Low Reservoirs & Puny Snow Moisture “Lock-In” 2014 California Drought (p. 16):
    The early April 2014 data are in from California for reservoir levels and the moisture content of the snow pack in the mountains. Reservoirs are 15% below normal capacity. Snow moisture content is 29% of normal.

March 2014  Issue No. 416

Inside this months issue...

USDA Analysis: FMD Outbreak Costs Would Be “Extremely High” (p. 1):

    Jim Eichstadt details the “risk benefit” analysis accompanying USDA’s proposal to open up beef imports from Brazilian states that are considered free of dreaded Foot-and-Mouth Disease. If the U.S. were to import FMD from Brazilian beef, USDA estimates costs of $37 to $45 billion. That figure is less than half of what Homeland Security personnel estimated a FMD outbreak in the U.S. would costs … eight years ago!

All-Time Record Milk Prices for February 2014 (p. 1):
    The Class III (cheese) milk and Class IV (butter-powder) milk prices for Feb. 2014 in USDA’s milk order program reached their highest-ever peaks.

Feature Story: Dairy Livestock Prices Zooming from Outhouse to Penthouse (p. 1):
    Read one of our “Stories of the Month” here.

Dairy Commodity Scene: Strong Export Demand Pushing Prices Higher (p. 2):
    Incredibly strong recent months’ export demand for U.S. dairy commodities and products has seriously tightened our supply-demand scene. We continue to watch: California’s Drought, China’s imports, and Midwest milk production.

Russian Imports – Including Illegal Yogurt – Entering U.S. (p. 2):
    Dairy imports from the Soviet Union have entered the U.S. for the past decade … at least. The U.S. can’t s ship yogurt to Russia … as Chobani found out during the Olympics. However, Russian yogurt is entering the U.S. That’s illegal, because all yogurt sold in the U.S. requires Grade A certification of farms, trucks and plants by qualified inspectors.

Feb. 2014 Posts All-Time Class III ($23.35) and Class IV Prices ($23.46). (p. 2):
    The headline says it all.

DairyAmerica/Fonterra to Cut Marketing Relationship (p. 3):
    After nearly a dozen years, the U.S. milk powder cartel 00 DairyAmerica – believes it can bike on its own in the world without the “training wheels” provided by New Zealand’s Fonterra. About time.

“Milk Mustache” Ads Finally Killed by Fluid Processors’ Promotion (p.3):
    Why is fluid milk consumption in trouble? In part, because the nation’s dairy processors can’t do anything better with their generic promotion than to run the same ineffective advertising campaign for 20 years. The “Milk Mustache” ads have been killed.

Is China’s Dairy Demand a “Bubble”???? (p. 4):
    Pete Hardin takes a long look at the variety of factors weighing on China’s extraordinary demand for dairy imports. Jan. 2014 saw the greatest volume of dairy imports ever entering China. Conclusion: China’s demand for imports is probably solid, at least through the medium term, unless a global financial collapse hits.

FDA: Boost Milkhouse/BulkTank Security (p. 4):
    Here the government goes again … FDA wants to hear comments on proposals ot secure farm milkhouses from food terrorists that might put toxic materials in farm bulk tanks. Writer Nate Wilson reports.

Harvesting “Early Energy Peak” Corn Silage Can Support 2X or 3X Cropping on Same Acres (p. 6-7):
    Paris Reidhead writes about a possible future approach to producing home-grown feed/forages for dairy livestock. He details what cutting corn for silage at tassel can yield to second and third crops in the same year.

Snowville Creamery’s New Community Capitalism (8-9):
    Owner Warren Taylor details his business model at Snowville Creamery (Pomeroy, Ohio). This small dairy processing plant produces beverage milk products, yogurt, and a high-fat sour cream. He uses grass-based milk from local farmers and follows minimal processing procedures.

“Uproar”: USDA’s Brazilian Beef Import Scheme Draws Strong Public Protests (p. 9):
    Contributor Jim Eichstadt profiles the wide-ranging uproar that’s brewing in cattle country over USDA’s proposal to import beef from Brazilian states that are considered “Free” of Foot-and-Mouth Disease. This issue is coming to a serious boil. Almost all of 500+ public comments have been negative.

Success Strategies in the “New World” of Dairy Farming Profits (p. 10):
    Pete Hardin covers a variety of management considerations for dairy farmers as we’ve suddenly turned the corner and enter much higher livestock prices as well as higher farm milk prices. What to do???

Feature Story: R-CALF’s Bill Bullard Responds to Questions on FMD, Related Matters (p. 11-12):
    Jam-packed with facts and truth ... read our second “story of the month” here.

New U.S. Farm Law Creates Organic Promotion Check-Off, Skeptics Abound (p. 14):
    Some politician(s) snuck into the recent federal farm law a proposal for an organic promotion check-off. Haven’t farmers and the public suffered enough such waste. In fact, the soybean and pork promotions have done a good job, we’d admit.

MPC & FMD ... different circus, same dangerous clown act (p. 15):
    Pete Hardin let’s fly with a blast at the parallels between the long-running Milk Protein Concentrate furor and USDA’s very recent proposal to “regionalize” supposedly FMD-free states in Brazil for importing chilled and frozen beef. In each instance, major food processors use imports of sub-standard proteins to knock down prices paid to U.S. producers. And Uncle Sam is fully complacent in both instances.

Feb. 4 to March 6, 2014: Calif. Reservoirs Regained Only 1.2% of Normal Capacity (p. 16):
    The Milkweed analyzes early Feb. and early March water levels at California’s major reservoirs and calculates that only a 1.2% relative increase occurred during that month. Meanwhile, the moisture content of the snowpack doubled in that month – all the way up to 219% of normal! California farmers have been told by both state and federal water projects not to expect any irrigation water this year.

February 2014  Issue No. 415

Inside this months issue...
 

Four Mega-Events Disrupting Dairy Supply-Demand (p. 1):
    Four major events are unsettling dairy supply-demand. Those events are: California’s “worst-ever” drought, China’s serious declines in milk production, strong demand for dairy animals for beef, and poor-quality stored feeds and forages in the Upper Midwest.

Finally! Politicians Achieve 2014 U.S. Farm Law (p. 1):
    Writer Nate Wilson provides basic details of the dairy portion of the just-passed federal farm and food legislation. The devil will be in the details, Wilson concludes.

Whopping $2.20/Cwt. Jump for January Class III Price (p. 2):
    USDA’s January 2014 Class III (cheese milk) price survey gained most of the month’s early cash market gains. The Jan. Class III price rose to $21.15/cwt. The Class IV (butter-powder) price was announced at $22.29/cwt.

UW Dairy Economists Sharing “Cracked Crystal Ball” for Milk-Price Forecasts (p. 3):
    UW-Madison dairy economists Bob Cropp and Mark Stephenson started off 2014 predicting significant drops in this year’s farm milk prices vs. 2013 price levels. Time will tell …

Major Yogurt Makers Using “Kosher Gelatin” (from Beef Hides) as an Ingredient (p. 4):
    What is “Kosher Gelatin”? The Milkweed dug into that question following a tip from a supermarket customer. Some big yogurt makers use “Kosher Gelatin” as an ingredient. “Kosher Gelatin” is made from extracts from beef hides. Muller-Quaker fruit-laden yogurts use a different “Kosher Gelatin” – derived from tilapia (a fish). Do yogurt consumers really want beef hide extracts and “fishy” materials in their food?

UpState-Niagara Co-op Limiting Members’ Milk Production … (p. 5):
    The major dairy co-op in western New York has imposed limits on members’ milk production gains for 2014. That seems strange, due to all the growth in dairy processing plant capacity in New York State in 2013 and more big plants coming on line in 2014.

John Kinsman, 87: Kinsman to Many (p. 5):
    Energetic farm/food activist John Kinsman of LaValle, WI passed away in January. Kinsman – an organic dairy farmer for six decades – was the father of the “anti-rbGH” movement and a visionary.

Agronomist Learns from 2013 Growing Season (p. 6-7):
    Writer Paris Reidhead put a series of questions to agronomist Tom Kilcer about what Kilcer observed, crop-wise, in the Northeast in 2013. Very interesting!

Feature Story: U.S. Allows Dairy Product Imports from Many Countries with Foot-and-Mouth Disease (p. 8-10):
    Read our story of the month here.

Quick Looks at Key 2013 U.S. Commodity Production Data (p. 11):
    We analyze 2013’s important trends in dairy commodities – Mozzarella, nonfat dry milk, Skim Milk Powder, and yogurt. Annualized monthly data from USDA shows a dynamic industry.

DMI Data Show Key Dairy Sales Numbers (p. 11):
    DMI’s year-end dairy marketing summaries reveal some interesting trends, such as: California’s fluid milk sales collapsed by 4.2% in 2013, and Greek yogurt sales showed a 45.9% increase last year.

Scenic Central Co-op Annual Meeting Highlights (p. 11):
    We attended the annual meeting of Scenic Central Dairy Co-op – a 285-member raw milk marketing co-op in Wisconsin that features ZERO debt and a member annuity savings program.

Horizon “Organic” Factory Farm Accused of Improprieties, Again (p. 12):
    Will Fantle of the Cornucopia Institute details alleged problems with WhiteWave’s industrial-sized organic dairy in Idaho.

Dairy Commodity Prices Easing After January Spikes (p. 13):
    Cheddar prices have retreated about 20 cents per pound from their all-time price peaks achieves in January. The post-Super Bowl surge for cheese has subsided. Ahead, The Milkweed projects strong export demand in 2014, but domestic demand will be challenged by high retail prices.

Chobani Yogurt Hits Brick Walls in Europe: (p. 14):
    In separate matters, Chobani Yogurt was kicked around in Europe. The Russians have denied Chobani ability to ship U.S. yogurt to this nation’s Olympic athletes. And a British court ruled that Chobani could not sell U.S.-made “Greek yogurt’ in that country. Dairylea Co-op Members OK DFA Merger (p. 14): On Feb. 4, Dairylea members approved merger of their co-op with Dairy Farmers of America – proving once again hast P. T. Barnum was right.

Weak U.S. dollar + classified pricing = “cheap” U.S. dairy exports (p. 15):
    Pete Hardin shares his opinion that a single class milk pricing system is needed. Returns for various domestic producers vary dramatically – with fluid milk processor margins rock-bottom. Meanwhile, prices and returns for specialized dairy proteins and ingredients for export (particularly as infant formula in Asia) are highly lucrative. Our four-class milk pricing systems are antiquated.

U.S. Farm Law Immoral (p. 15):
    Pete Hardin takes exception to the fundamental of the newly signed federal farm and food law. That law guarantees the crop insurance industry a 14% return on gross sales volume, removed payments limits of $750,000 to individual farmers, and cuts funding for supplemental nutrition programs (food stamps).

After Worst-Ever Drought in 2013, California’s Moisture Scarce in Early 2014 (p. 16):
    As of Feb. 4, 2014, California’s reservoirs were at only 33% of normal capacity. And the snow pack contained only 12% of normal moisture. Last year was California’s worst-ever drought. Even some nice precipitation around Feb. 8-9 won’t make much of a difference ot reservoirs. Very serious situation …

January 2014  Issue No. 414

Inside this months issue...
U.S. Dairy Prices Zooming Up; Cheese & Milk Powder Scarce (p. 1):

    Between when the December 2013 issue went to press and the January 2014 issue’s printing, cash prices for block and barrel Cheddar at the Chicago Mercantile Exchange rose 31 cents and 38 cents, respectively. A wave of exports has drained U.S. dairy commodity inventories – sparking higher prices. In the analysis of The Milkweed, 2014 will be a year of sky-high farm milk prices and extremely tight dairy commodities in the U.S.

2013 Forages & Corn Silage Will Challenge WI’s 2014 Milk Output (p. 1):
    Except for the southern two tiers of counties, Wisconsin dairy farmers generally face tough stored forage and silage conditions, due to incredibly adverse weather last year (and 2012). 2014’s milk production will be significantly pulled down by such widespread problems with both volume and quality of crops from 2013.

2014 Farm Bill: Same Ship Piles Up on Same Rocks (p. 2):
    Nate Wilson reports that arguing over dairy provisions of what’s now the 2014 federal farm legislation is now the main stumbling block to passage.

U.S. Milk Powder Inventories Z-E-R-O (p. 2):
    The headline tells it all. Buyers are waiting for lab test clearance to gobble up truckloads of scarce U.S. nonfat dry milk.

“Polar Vortex” Creates Widespread Dairy Logistics Problems (p. 2):
    Closed Interstate highways, closed dairy processing plants, transportation fleets crippled by “gelled” diesel fuel ... take your pick. What a mess in early January, due to that blast of Arctic air.

December 2013 Class III Price $18.95 / Class IV $21.54 (p. 2):
    Strong prices for nonfat dry milk pushed a $1.02/cwt. gain in the Class IV price in USDA’s federal milk orders. Fast-rising cash Cheddar prices will help the Class III play “catch-up” in January 2014’s numbers.

China’s Milk Output Down Double-Digits, Import Needs Will Be Heavy (p. 3):
    Even though accurate dairy data is tough to come by in China, consensus is that China’s recent milk production is down “double-digits” compared to late 2012’s totals. And “2” may be the first number of that decline. Elimination of small- and medium-sized dairy herds and an outbreak of Foot and Mouth Disease are pulling down China’s farm milk supplies. That nation’s dairy export needs are exploding.

Food Retailer Class Action Lawsuit Reinstated in Southeast (p. 3):
    A federal appeals court has restored plaintiffs’ antitrust lawsuit in the Southeast against the usual suspects: Dean Foods, Dairy Farmers of America, National Dairy Holdings, the Southern Marketing Agency, and Dairy Marketing Services. Plaintiffs are food retailers that claim the defendants conspired to unduly raise supermarkets’ costs of packaged milk.

Southeast Milk Litigation: DFA Settlement Checks Mailed (p. 3):
    Merry Christmas in the Southeast ... after more than a decade of lumps of coal. 6000+ eligible present and former Southeast dairy producers received settlement checks from Dairy Farmers of America that averaged a bit over $14,000 each.

Cheaper Raw Milk Helps Shift Chobani Production from NY to ID (p. 4):
    Chobani yogurt’s Twin Falls, Idaho plant is now operating at full tilt, according to the company. Meanwhile, starting in December, production at the firm’s New York State plant scaled back significantly. Why? In part, The Milkweed estimates that Chobani’s raw milk costs – using November 2013 as an example – were $3.00 to $3.30 per hundredweight cheaper in Idaho. The same firm – DFA – supplies both Chobani locations with farm milk. DFA is price-undercutting itself!

Chobani: Employee Lay-Offs, Reduced Shifts and Days of Operation in NY (p. 4):
    In December 2013, Chobani started scaling back production in New York State. About 300 temporary workers were laid off, and less farm milk is coming into the plant. NYS milk is a lot more expensive than Idaho milk.

Whole Foods Chain Won’t Sell Chobani Yogurt (p. 5):
    Because Chobani can’t guarantee its milk is not made from herds eating Genetically-Modified feeds, the upscale food retailer Whole Foods is taken Chobani yogurt off its shelves. Whole Foods is asking the virtually impossible of Chobani. The Milkweed suspects Whole Foods wants shelf space for possible marketing of its own house-brand “365” Greek-style yogurt.

DFA’s List of Serious Financial Challenges Grows Longer (p. 5):
    The nation’s largest dairy farmers cooperative falls further and further into financial doo-doo. First, DFA and two subsidiaries (National Dairy Holdings and Dairy Marketing Services) are defendants in a Southeast class action lawsuit by food retailers that was recently restored by a federal appeals court. Retails claim that the plaintiffs – which also include Dean Foods – illegally conspired to raise packaged milk costs. Also, The Milkweed cites a 2005 Moody’s Investors Service report that noted a $150 million “asset” claimed by DFA –”Preferred Equity Securities” was not asset. Take $150 million off the “asset” ledger and make it a liability – that wipes out about $300 million DFA’s so-called net worth.

Picture Worth 1,000 Words: Why MPC Drew Such Scorn (p. 5):
    We revisit those thrilling days of yesteryear ... the early days of the Milk Protein Concentrate brouhaha. We reprint a bag of “Milk Protein Concentrate” that had an adhesive, secondary label of product identity by the seller – the crooked Wilfran Agricultural Industries. The new label identified the product as “Low Heat Nonfat Dry Milk.”

Where’s the Milk? Wisconsin’s 2013 Forages & Corn Silage (p. 6):
    Writer Paris Reidhead details 2013 haylage and corn silage samples from the state of Wisconsin that were analyzed by Dairyland Labs (Arcadia, WI). 2013’s crops were generally poor, from a nutritional standpoint. Starch levels in corn silage and sugar content in haylage are particularly low.

Feature Story: Beef Imports from China Pose Serious FMD Threat to U.S. Livestock Industry (p. 8-9):
    Contributor Jim Eichstadt has unloaded a 10,000 bomb – uncovering USDA data showing that beef imports entered the U.S.  from China during 2012 and 2013, even after China was listed as a “Foot-and-Mouth Disease” nation. Read our story of the month ... here.

NMPF Blunders Drive Dairy’s Cherished “Real Seal” into the Ditch (p. 10):
    Jim Eichstadt tracks the history of dairy’s “REAL Seal” and the legislation that governs the dairy promotion check-off. In 2011, USDA changed the rules to disallow programs funded by the National Dairy Board form identifying “Made in the U.S.” dairy products. That change was lobbyed through Congress by National Milk Producers Federation – the dairy co-op lobby. But now, NMPF is in charge of the revived “REAL Seal” and is promoting the icon for “Made in the U.S.” dairy products only.

Q & A: Virginia Dairyman Tom Watson (Southeast Antitrust Plaintiff): (p. 11):
    Long bound to silence, dairy farmer Tom Watson of Bedford, Virginia answers questions about some details of the long-running Southeast dairy antitrust case. Millions and millions disappeared through the corrupt dairy cooperative marketing efforts.

WhiteWave Foods Mooooving Aggressively (p. 12):
    Will Fantle of the Cornucopia Institute tracks changes at WhiteWave Foods.

Cheddar and Nonfat Prices Climb: Butter Starts to Move Up (p. 13):
    Pete Hardin’s dairy commodity analysis shows that 2014 is looking like “The Year of Scarcity and High Prices” for dairy. Big gains in cash Cheddar prices at the CME have brought forth few sellers. Nonfat dry milk buyers are hand-to-mouth. Butter inventories have now dropped 180 million lbs. between July 31 and November 30, 2013.

The “F-Acronym” (FMD) – China’s Dairy Dilemma (p. 15):
    Following up Jim Eichstadt’s revelation about beef imports coming in from FMD-infected China, Pete Hardin’s opinion comments take out after USDA’s failed oversight to protect this nation’s livestock producers from that dreaded disease. Hardin goes so far as to suggest that dairy personnel stop travelling between the U.S. and China. He puzzles why UW-Extension crops experts need to spend so much time in China, when Wisconsin was hit with the worst forage crisis in its history in 2012-13. Let Chinese visitors attend World Dairy Expo “virtually” (i.e., at home, over the internet) Hardin suggests.

DFA/Dairylea Merger: Told You So (p. 15):
    Most likely, the DFA/Dairylea co-op merger will be approved by Dairylea members in early February. But Hardin’s getting in line fast with an “I told you so” warning about all of Dairy Farmers of America’s bogus assets and serious pending lawsuit liabilities. Another big lawsuit – the Southeast food retailers’ class action – was just put back on the docket.

U.S. Dairy Import/Export Data Shows Widening Gap (p. 16):
    We comment on six years’ dairy import/export data assembled by the U.S. Dairy Export Council. China’s growing dairy demand should boost global opportunities.

Olympic Smoke Screen: Chobani Cuts Portion Size by 11.67% (p. 16):
    What cheapskates! Chobani yogurt has reduced the portion size of its best-selling containers from 6.0 to 5.3 ounces – a reduction of 11.67%. But retail prices will remain the same!

December 2013  Issue No. 413

Inside this months issue...
2014: Great Year Ahead for Dairy Producers with Good Stored Crops (p. 1):

    View our “Our Story of the Month” here.

U.S. Buyers “Shorted,” NFDM Down, SMP & WMP Soar (p. 2):
    U.S. dairy protein powder manufacturers have shifted production to increased amounts of Skim Milk Powder and Whole Milk Powder. Meanwhile, domestic buyers of nonfat dry milk are facing late deliveries and extremely tight milk supplies. A bad situation developing here …

Embattled Farm Bill Staggers into Another New Year (p. 2):
    Legislators in the nation’s capital have given up trying to pass federal farm legislation … again. Maybe something will come together in early 2014. Commodity programs may be under further scrutiny.

November 2013 Class III Price $18.83 – Class IV Price $20.52 (p. 2):
    USDA’s manufacturing milk prices for the federal order program climbed modestly in November, compared to October’s prices. Rising prices for nonfat dry milk promise more propulsion lies behind the Class IV (butter-powder) price.

Dairy Commodity Scene: Milk Powder & Cream Very Tight (p. 3):
    Dairy commodity markets are tightening visibly. Milk powder supplies are scarce and prices rising steadily. Cream is extremely tight, due to strong demand for holiday treats manufacture.

U.S. NFDM/SMP Exports to Mexico Drop 31.5 Million Lbs. (p. 3):
    For August-October 2013, U.S. exports of nonfat dry milk and Skim Milk Powder fell 31.5 million lbs. below sales of those commodities to Mexico during the corresponding months in 2012. Mexican buyers backed of purchases as prices rose in mid-summer – wrongly better that prices would decline.

U.S. Butter Inventories Decline Dramatically in October (p. 4):
    According to USDA’s “Cold Storage Report,” U.S. butter inventories declined by 60 million lbs. during October 2013. That decline – coupled with 30 million lbs. drops in both August and September – has dropped U.S. butter inventories down to around 180 million lbs. – a big decline from worrisome the early summer peak.

NASS 12/3/13 Data for NFDM Don’t Add Up (p. 4):
 
Sometimes the numbers don’t always add up. That appears to be the case, unfortunately, for the Nonfat Dry Milk portion of USDA’s latest “Dairy Producers Report” that was issued on December 3, 2012.

Reviewing Yogurt Sales Data … Some Eye-Popping Trends (p. 5):
    Data from retail check-out scanner networks shows very vigorous changes in yogurt sales in the U.S. Chobani is the big winner, while General Mills and Dannon have taken a pretty serious drubbing in yogurt sales during much 0f 2013.

Can Modern Nutrition (A2 Milk) Revive the Guernsey Breed (p. 6-7):
    Very interesting! Write Paris Reidhead explores both the historyof the Guernsey breed in the U.S., as well as the science and marketing details behind the “A2 Milk” phenomenon. A2 milk is believed by some to be superior both nutritionally and health-wise in comparison to conventional cows’s milk. About 90% of Guernsey cattle carry the A2 gene – likely a legacy to their being isolated on small island for thousands of years.

A2 Milk Sales in Australia up 51%, NZ’s A2 Corp Expands (p. 7):
    Recent news from “Down Under” … the A2 Corporation (which holds the patents and testing labs for the A2 dairy cow gene … reports sales of A2 Milk in Australia climbed 51% -- to $91 million – for its recently completed fiscal year. That’s significant.

Karen Kelley’s Dreams Come True … in 265 Flavors! (p. 8-10):
    Karen Kelley is a dairy farm woman from Fond du Lac, Wisconsin. Karen dreamed of farmstead processing the Kelley family’s milk. In 2010 – after much study – Kelley Country Creamery (an ice cream plant and retail shop) opened near their 65-cow dairy farm. This year, the Kelleys made 265 different flavors … and were featured on the “Good Morning America” -- the ABC network television show.

DFA Settlement Finalized to Release Funds to SE Farmers; Judge’s OK Awaited (p. 10):
    Southeast dairy farmers await a $86 million pay-out from the DFA settlement of the private antitrust lawsuit. Checks should be mailed soon, unless a legal challenge comes forth.

WTO Doha Round Negotiators Reach Last-Minute Trade Deal at Bali (p. 11):
    The long-stalled WTO (world trade) negotiations were breathed back to life, after years of stalled negotiations. Jim Eichstadt updates details for our readers.

Rep. Ron Kind Cheerleads for Transpacific Trade Deal with NZ, “Fast Track” Renewal (p. 11):
    Western Wisconsin’s Ron Kind is perhaps the most vocal supporter of “Free Trade” in the U.S. Congress. Ironically, Kind’s Second District -- which stretches far up and down the Mississippi River – has more the most dairy farmers of any Congressional District in the United States … more cows than people. And dairy is one of the major industries most threatened by “Free Trade” deals espoused by Kind.

Trans Pacific Partnership Free Trade Agreement Expected Soon (p. 12):
    Negotiators at the Transpacific Trade Partnership talks have apparently made a lot of progress and may conclude their work early next year. Virtually all details have be kept from t he American public by the Obama administration. Dangerous.

Oct 2013 Whole Milk Powder Exports Equal to (2.5% of U.S. Monthly Output (p. 13):
    An amount equal to over 90% of all Whole Milk Powder produced in the U.S. during October 2013 was exported – another example of increased dairy protein powder production heading abroad.

U.S. Corn Prices Nosedive Heading into Big 2013 Harvest (p. 14):
    Contributor Jim Eichstadt studying recent months’ corn price trends and what data is available from the 2013 grain harvest.

A2 Milk: Symbol of Dairy leaders’ attitudes (p. 15):
    Pete Hardin why certain dairy products with perceived nutrition/health advantages and double-digit sales growth – such as A2 milk and organic milk – are not given wider respect by dairy’s “big boys.” Hardin concludes that dairy’s “Big Vested Interests” thrive on the status quo – pushing dictates about what “Can’t” be done: “rBGH-Free” labeling, raw milk sales, and no visible support for A2 milk in the U.S.

Let the better times roll … and maintain them (p. 15):
    Pete Hardin lays out a long list of suggestions to improve dairy’s antiquated pricing and marketing practices. A few examples: one class of milk in federal milk orders, have raw milk processors pay at least half of documented milk hauling costs, and shift to a protein-energy (milk fat)-based pricing system.

DFA Document Tries to Explain “Financial Strength” (p. 16):
    The Milkweed reproduces a DFA “Talking Points” document released by the co-op on November 27, 2013 that instructs field staff how to answer the acknowledged barrage of questions about DFA’s financial condition. Pete Hardin then rebuts DFA’s claims of financial strength. Example: “‘Solid financial performance’??? DFA reported operating losses of $133 million in 2012, following losses of $36.7 million in 2011. During fiscal 2011, DFA wrote down $252 million in equity – dropping the co-ops’ ‘Assets/Equity’ ratio from 32.1% (at the end of 2010) to 15.5% as of 12/31/12.” Get the picture?

Dairylea/DFA Merger: Family History and the New York Milkshed (p. 16):
    Why does editor-publisher Pete Hardin find the proposed Dairylea/DFA merger objectionable. Hardin’s family’s history goes all the way back with Dairylea. His great-grandfather was a Dairymen’s League founder in 1907 and served as a director and office of the cooperative for 50 years. Very interesting reading about the history of Dairylea and its recent years’ entanglements with DFA.

November 2013  Issue No. 412

Inside this months issue...
Major Factors Point to Tight Milk Supplies Relative to Strong Demand (p. 1):
    Our “Story of the Month” here.

DFA’s Debts & Liabilities Cloud Dairylea Merger (p. 1):
    In early October, the proposed merger of two major dairy cooperatives was announced: Dairy Farmers of America and Dairylea Co-op. DFA’s massive indebtedness (at least $100,000 per member) and possible liabilities in two big lawsuits make DFA a scary merger partner. Dairylea’s debt per member equals just under $5000.

Late April 2014 Date for B-I-G Northeast Antitrust Trial vs. DFA & DMS (p. 2):
    In the Northeast antitrust litigation, plaintiffs’ lawyers are seeking $600-$700 million dollars in damages. If damages are awarded by the jury, the damages will be tripled, under antitrust rules. The trial is set for late April 2014. Defendants are Dairy Farmers of America and Dairy Marketing Services.

Farm Bill: House and Senate are Finally Talking (p. 2):
    More than one year after they failed to achieve a 2012 federal farm bill, House and Senate conferees have sat down to talk. Big deal.

CDFA Keeps Temporary Milk Price Hike: No change for Whey Formula (p. 2):
    Following a mid-September 2013 hearing, California’s Department of Food and Agriculture has rejected any proposed changes in the formula for calculating whey factors in the state’s 4b (cheese) milk formulae. CDFA will continue the temporary price hike on all classes of milk 12.5-cent per hundredweight on all classes of milk.

Yogurt Wars … From Supermarket Dairy Case Courtroom (p. 3):
    How can a product as nutritious as yogurt be such a battleground? We look at retail sales trends of Chobani Yogurt (up 30X in 40 months ending mid-May 2013)! Chobani’s gains come at the expense of yogurt sellers like Stonyfield Organic. In the courtroom, a trial is set for mid-December 2013 pitting Chobani founder Hamdi Ulukaya against claims by his ex0wife that she’s due 53% of the entire firm’s assets plus $530 million in damages.

Global Dairy Prices Fall at Second Consecutive Fonterra Online Auction (p. 3):
    On Nov. 5, average prices for dairy commodities offered at Fonterra’s every-other-week on-line auction declined.

Oct 2013 Class III Price $18.22 – Class IV Price $20.17 (p. 3):
    The numbers tell it all.

Infant Formula Firms’ Combined Damages Nearly $600 Mil. from Fonterra’s WPC 80 Recall Goof-Up in Aug 2013 (p. 4):
    Following the August 2013 recall of WPC 80 by New Zealand’s Fonterra, two global firms – Danone and Abbott Labs – have announced costs associated with the recall totaling nearly $600,000,000. That amount will challenge Fonterra’s finances and credibility.

Outside Evaluation of Fonterra’s WPC 80 Debacle (p. 4):
    An internal report on Fonterra’s August 2013 WPC 80 recall details many, many problems in the firm’s system.

Kraft Foods’ Patent Restores “Dairy Flavor” to UF Milk (p. 4):
    Amazing! Kraft Foods has a patent application pending that uses dairy elements added back to ultra-filtrated (UF) milk to restore lost flavor. Milk Protein Concentrates are UF milk. Wonder why the critics blasted Kraft for years concerning poor flavors and quality of dozens of the firm’s MPC-laden food products.

Milk Powder & Butter Prices Stronger as CME; Cheddar Mostly Flat (p. 5):
    Pete Hardin takes a long look at the market factors behind tighter butter and nonfat dry milk prices – reduced inventories and stronger global demand for U.S. production. Some very interesting data trends are developing.

USDA: Record Corn, Big Soybean Crops (P. 4):
    In early November, USDA announced its crop production estimates for 2013. The U.S. corn crop is projected at 13.99 billion bushels. Soybean volume is estimated at 3.26 billion bushels.

Empire Specialty Cheese, LLC at the Trough … Again (p. 6):
    Writer Nate Wilson details how a New Jersey-based Italian cheese company – Empire Specialty Cheese, LLC – has gained over $1.25 million in various taxpayer subsidies to refurbish an old slaughterhouse in western New York to cheese production. This is the same firm refused to pay local Amish Grade B milk producers for $1.2 million in 2011. New York politicians chirped a merry tune over all the jobs that will be created. Empire Specialty Cheese: Company & Owners’ Sketchy History (p. 6): Pete Hardin digs into the sketchy history of Empire Specialty Cheese, including: the cheese plant manager’s failure to pay $1.25 million to local Amish producers in 2011, the main owner’s history with the Concord Marketing (NJ Italian cheese firm) in the late 1990s, and the main owner’s son-in-law status with the infamous, cheesy bankrupt, Ben Scheps. “It’s a family tradition …”

2014: New York Dairy Plants’ Capacity Will Dramatically Exceed Milk Supplies … (p. 7):
    Next year will see a wave of new dairy processing plants come on line in New York State. On top of recent dairy plant constructions and expansions, New York State will end up with more dairy plant processing capacity than available milk.

“Inequitable” Merger: Dairylea’s Assets & DFA’s Debts/Liabilities (p. 8-9):
    Pete Hardin analyzes the merits of the proposed DFA/Dairylea merger. Issues such as debt per member and potential legal liabilities raise questions about the wisdom of this merger, for Dairylea members. Questions provided.

Is “Tricky Rick” Throwing Old Buddies’ Assets Under the DFA Garbage Truck? (p. 8):
    DFA CEO/President Rick Smith was formerly Ceo of Dairylea Co-op. Now Smith’s overseeing a merger of the two. But are Dairylea’s members’ assets being sacrificed to DFA’s mountain of debt and pending lawsuit liabilities?

Fuel Ethanol By-Product Grains Still Causing Sulfur Toxicity (p. 9):
    Writer Paris Reidhead revisits a subject he covered 18 months ago. Heavy use of distillers’ grains (from corn ethanol production) poses a potential problem: too much sulfur.

Holsteins Evolving as Dual Purpose Breed: Dairy/Beef (p. 10):
    Increasing numbers of Holstein heifers are headed to beef feedlots – as the U.S. beef industry faces its lowest commercial cattle numbers in 60 years. Dairy cull cows bring a pretty good return, these days, also. What’s happening: prices for dairy livestock are being bid up by the beef trade.

Brush, Colorado Top Springers Up $200-$300 in Past Month (p. 10):
    The price-trend leading dairy auction market in the West – Brush Livestock in Colorado – saw top-end Holstein springers top the $2000 market in early November. That’s a price jump of $200-$300 per head on the top end. Pete Hardin theorizes that after a couple years of relatively low prices for dairy livestock, both dairy and beef interests are bidding up the value for heifers.

Southeast Dairy Industry in Turmoil: No Strength (p. 11):
    The Southeast dairy industry is in a mess. Producers have been devastated by years of high marketing costs (deductions) from a succession of dairy co-ops. Fluid milk processors are hurting. No basis of strength in the region.

Five Problems Defining Southeast Dairy Industry (p.11):
    Pete Hardin details five major flaws in the Southeast dairy industry’s history, culture and structure that limit the region’s dairy producers from taking advantage of what should be an excellent regional supply-demand opportunity.

Dairy Cattle Replacement Prices … (p. 14):
    We track dairy livestock prices from around the country. Springer prices are rising. Open heifers’ prices are flat, at best.

Future Milk Pricing? Follow the Cement Trucks … (p. 15):
    Classified pricing has no future in the dairy industry. All milk should be priced the same, Pete Hardin opinionates. Just look at all the “ingredients” plants recently on line, under construction, or in the planning stages. Valuing “ingredients” plants’ milk at the Class IV (butter-powder) price would fail to return honest value to dairy producers. High-balling fluid milk prices of Class I processors is a bad idea, also.

Like “NO-Bamacare”? You’ll Love TP and FSMA (p. 15):
    The bureaucratic incompetence surrounding implementation of the Affordable Care Act is just the beginning. Watch out for the Trans Pacific Partnership “Free Trade” deal. U.S. officials have been hiding details from the American public. And FDA is rolling out implementation of the Food Safety Modernization Act – with dangerous implications for both small and medium farmers and food processors.

DFA/Select Milk Producers to Fuel Southwest Milk (p. 15):
    A region-wide transportation system using trucks powered by Compressed Natural Gas (CNG) is almost ready to roll in the Southwest. Start-up time is scheduled for January 2014. Fuel savings of up to $1.50 to $2.00 per gallon-equivalent are possible.

South Dakota Ranchers Devastated by Freak Blizzard in Early October (p. 16):
    Contributor Jim Eichstadt – who grew up on a South Dakota livestock/grain farm – details the tragic blizzard that hit western South Dakota’s cattle ranchers in early October. Losses are still being counted, and are believed to range from 30,000 to perhaps three times that amount. U.S. cattle inventories are the lowest since 1952.

October 2013  Issue No. 411

Inside this months issue...
Early ’14 U.S. Cheese Class III & IV Futures HALF of NZ’s Farm Milk Prices (p. 1):

    Our story of the month can be viewed here.

Fast-Moving Global Dairy Supply-Demand Events (p. 1):
    Most of the action involves China, as global dairy prices are rising and available of product is constricting.

Shutdown: USDA $$$ and Dairy/Ag Data Stop Flowing (p. 2):
    The federal government’s shutdown halted many vital USDA services to the nation, from issuing funds to providing important data.

Farm Bill: GOP’s Cantor in the Catbird Seat (p. 3):
    The nation continues without a farm/food policy, since Congress didn’t deal with the old farm law that expired on September 30, 2013. Eric Cantor, the Virginia Republican, may be succeeding in his effort to divide farm and nutrition policies from the same legislative package.

September 2013 Class III Price $18.14 – Class IV Price $19.43 (p. 2):
    Those are the manufacturing class prices for farm milk processed into cheese (Class III) and butter-powder (Class IV) in the federal milk order program for last month.

China’s Emerging Dairy Import Dynamics: Whole New Dairy Demand Paradigm (p. 3):
    Pete Hardin details how internal and global supply-demand realities in China are shaking the entire dairy world.

Organic Valley Cancels Farm Milk “Base” Program (p. 4):
    Less than onedefinmonth after announcing a “base” program to restrict production, Organic Valley has dumped that notion.

Danone Wants Compensation from Fonterra for ALL Losses Due to WPC Product Recall (p. 4):
    Media reports from New Zealand tell that global giant Danone is seeking full damages associated with this summer’s WPC 80 recall by Fonterra – the seller. Fonterra is balking.

Mueller Quaker German-made Yogurt Still Sold in U.S. Dairycases (5):
    Despite start-up of U.S. production last spring, Mueller Quaker is still selling some yogurt products made in Germany to U.S. consumers. Mueller Quaker’s new yogurt plant in Batavia, New York was supposed to provide great new demand opportunities for U.S. dairy farmers.

Backsplashes from Chobani Yogurt’s Idaho Product Recall (p. 5):
    The late summer recall of Chobani Yogurt products from the firm’s Twin Falls, Idaho plant has created many headaches. Additional demand for farm milk in the Northeast in early September – to replace production in Idaho – drove up spot milk premiums as high as $8.00 cwt. (over the prevailing federal milk order class price). And some stores don’t want Chobani yogurt products made in Idaho.

DairiConcepts “For Sale” – DFA/Fonterra Joint Venture (p, 5):
    The DairiConcepts firm – a DFA/Fonterra joint venture – is for sale. Fonterra – which has a small portion of the stock but takes 50% of the profits – is walking. The business model – predicated on cheap imported cheeses – is no longer viable.

Dead Zones: Green Bay Repeating the Gulf of Mexico’s Tragedy (p. 6-7):
    Writer Paris Reidhead explores the toxic run-off that’s caused “dead zone” in the Great Lakes’ biggest estuary – Green Bay. Almost half of the run-off entering Green Bay is from agriculture. Reidhead warns that 20 civilizations have disappeared, due to soil loss.

Does China’s Growing Hunger for Dairy Imports Raise FMD Threat to U.S.? (p. 8-9):
    The fact that China harbors a serious, long-running (8 years) Foot-and-Mouth Disease problems is little known. But as China buys more dairy products from abroad … and more dairy industry personnel travel to China for various reasons … the potential to spread FMD to “clean” nations increases.

DFA: Failure to Send Members Timely Audits Breaks NYS Law (p. 9):
    Writer Nate Wilson submitted a set of questions to the New York State Department of Agriculture & Markets, focusing on obligations for dairy cooperatives to send out annual financial statements to NYS members, prior to the annual meeting. Guess what big dairy co-op has repeatedly failed to comply with that law? DFA Announces Two New Projects: Plants in MI & NY (P. 9): DFA has announced construction of two new projects: an ingredients plant in Michigan’s “Thumb” and a “cold separation” plant in western New York.

Agricultural Cooperatives’ Equity: Vital Asset … But Too Often “No Return” (p. 10-11):
    Pete Hardin takes a long, tough look at the subject of agricultural cooperatives’ equity and retained earnings. Too frequently, those earnings and equities never make it back to the farmer … unless the farmer passes away. Hardin sifts through the debris of the equity game …

FDA Food Safety Proposals Threaten Ruin of Local and Organic Family Farmers (p. 12):
    Will Fantle, co-director of the Cornucopia Institute, details how the federal Food and Drug Administration is implementing food safety rules that that threaten many small and medium farmers and food processors. FDA is charged with implementing the Food Modernization and Safety Act. Look out!

“Lights Out” for USDA Dairy Data, As Global Supply-Demand Volatility Rises (p. 13):
    Wouldn’t you know, on the same day that the federal government’s partial shutdown hit, the Global Dairy Trade’s electronic auction sent stronger price news to he world’s dairy industry. What’s up? China is buying heavily to stockpile needed dairy commodities.

Dairy Cattle Replacement Prices … (p. 14):
    Prices for #1 springing Holstein heifers are up about $100 per head in numerous auction markets across the U.S. in early October.

Better ways to price farm milk (p. 15):
    Pete Hardin rummages through several thoughts about how to honestly price farm milk in the U.S., in the absence of an effective pricing tool. Paying only one price for milk solids (like NZ)? Having an electronic sales desk (auction) for U.S. commodities? Producing products that the world wants – like unsalted butter and real Gouda? Getting rid of Posilac?

“Something Big is Coming, But …” (p. 16):
    Pete Hardin reports on a World Dairy Expo “mini-seminar” conducted by the Stewart-Peterson market advisory firm. The projection was that something big was coming, but the firm’s analysts left the door open as to whether that “big something” was up or down for dairy commodity and farm milk prices. The firm reviewed much relevant data.

September 2013  Issue No. 410

Inside this months issue...

Feature Story #1: Major U.S. Dairy Areas Facing Severe Forage Crisis (p. 1):
    Our story of the month here.

Finally! Fluid Milk Processors’ Check-Off to Promote P-R-O-T-E-I-N (p. 2):
    About a decade into America’s “protein wave,” the nation’s fluid milk processors’ board will fund commercials and videos that tout beverage milk’s protein value! Long time coming …

NZ Government-Sponsored Tests Don’t Detract Clostridium Botulinum in Fonterra’s WPC 80 (p. 2):
    Extensive tests conducted by New Zeraland’s government have found that Fonterra’s Whey Protein Concentrate 80 was not contaminated with the botulism strain of the Clostridium bacteria. Was the global recall of many dairy products in August 2013 all for nothing. Meanwhile, an internal review found that Fonterra employees had “reprocessed” an off-grade batch of whey powder.

August 2013 Class III Price $17.91 – Class IV Price $19.07 (p. 2):
    The numbers tell the story for the August 2013 values for that month’s values of farm milk processed into cheese and butter-powder, respectively. For USDA’s federal milk order program.

2013 Farm Bill Follies: Bet on 2008 Farm Law Extension (p.3):
    Writer Nate Wilson again digs into the federal farm bill confusion and comes to the usual conclusion – the best bet is for another extension of the 2008 federal farm low … sometime after September 30, 2013.

U.S. Butter Prices FAR BELOW World Market Prices (p. 3):
    Jim Eichstadt reviews three butter price quotes: the Chicago Mercantile Exchange cash markets, Fonterra’s Global Dairy Trade from early September, and USDA’s Dairy Market News cited range of butter prices in western Europe. Big differences! The GDT quote was $.26 higher than CME, while the Western Europe price was a full $1.19 per pound higher than CME.

MILC “Safety Net” Expires After August 2013 (p. 3):
    USDA’s dairy farm milk price “safety net” expired with the end of August. There will be no further MILC payments unless that program is restored by Congress.

New Lawsuit Targets CWT, NMPF & Several Member Cooperatives (p. 3):
    A Milwaukee, Wisconsin food business – Hampton Foods – is the plaintiff in what’s proposed as a class action lawsuit against a pack of dairy cooperatives. At issue: the alleged illegal structure of the “Cooperatives Working Together” program – a scheme by which dairy farmers funded a program to reduce milk production (and raise farmers’ milk prices) by buying and killing entire herds of milk cows. Plaintiff’s attorneys charge that the CWT program was illegally doing business with farmers who weren’t members of the cooperative.

Organic Valley Instituting Farm Milk Production Bases Effective 10/1/13 (p. 4):
    Awash in organic milk, the Organic Valley cooperative has informed members that the co-op will institute a base program for milk marketing on October 1. Over-base milk will be paid a price of $12 per hundredweight.

Volcanoes Cloud End Growing Season in Northern U.S. (p. 6):
    The Pacific Rim has witnessed new volcanic activity in summer 2013 – resulting in cooler, drier weather for parts of North America. Writer Paris Reidhead takes a long look at the history of and impacts of volcanoes upon human culture.

Volcanic Explosivity Index (VEI) Rates Volcanoes’ Impact (p. 7):
    Paris Reidhead describes how scientists measure the relative impact of volcanoes. The model is much like the Richter Scale used to measure earthquakes.

Fonterra’s Failed History of Dairy Product Quality (p. 8-10):
    Jim Eichstadt and Pete Hardin take a long, hard look at Fonterra’s history of dumping substandard dairy products on global buyers. A common theme: the Kiwi’s can’t seem to throw away undergrade products that should be fed to fish. This set of articles covers Powdergate (glue sold for human food use), aluminum shavings-laden cheese sold to U.S. buyers for human food use, and the August 2013 botulism recall matter. Very thoroughly researched!

Mastitis “Solutions” Usually Ignore Problem: Milking Equipment Design (p. 11):
    Bill Gehm, a partner at L.R. Gehm, LLC, details his company’s perspective on the futility of treating costly mastitis, when the real problem is the design of much milking equipment used by dairy farmers.

Dean Foods Payment #2 Ok’d in Southeast, DFA Payment in Late ’13? (p. 12):
    The presiding federal judge has signed off on payments to Southeast dairy producers for round #2 of the Dean Foods’ settlement. Meanwhile, many dairy farmers in the region want to know when they’ll see the one-time settlement payments coming from Dairy Farmers of America. Answer: don’t bet on their arrival before the Thanksgiving turkey.

Udderly Kentucky: State-ID Retail Milk Label Start-Up (p. 12):
    Writer Julie Walker details a new program in Kentucky that’s using state-produced and state-processed farm milk as a marketing tool.

Dairy Commodity Picture Waiting for Stronger Market Signals (p. 13):
    All dairy commodities have modestly strengthened in the past month. The industry waits for better signals on U.S. milk production trends, as well as domestic and global demand.

Dairy Cattle Replacement Prices at Auction Markets Across the USA (p. 14):
    Price signals are mixed, both regionally and by age, for dairy animals across the nation in recent weeks.

Southeast Marketplace Transitioning: Local, Quality, and Competition (p. 14):
    Writer Julie Walker writes about changing marketing dynamics in the Southeast – local identity fluid milk products, higher quality standards, and increased competition for farm milk.

Thoughts for Food (p. 15):
    Pete Hardin notes the abundance of apples on trees in southern Wisconsin this summer – their response to try to preserve the species, following 2012’s brutal drought. He contrasts the apple trees with U.S. politicians, who cannot forge new federal farm/food policies.

Bad Idea: Dumping Dairy’s Standards of Identity (p. 15):
    Pete Hardin gives a lashing to dairy leaders who want to dump federal standards of identity for mainstream dairy products. Those leaders – such as WhiteWave’s Gregg Engles and Dairy Management, Inc.’s Tom Gallagher – claim standards of identity “stifle” innovation. Hardin argues that such standards keep scurrilous food processors from filling dairy products with all kinds of crapola, in their drive to cut costs and dumb down products.

USDA’s Latest Drought Overlay Maps for Soybeans & Corn (p. 16):
    One of our stories of the month. Read it here.

August 2013  Issue No. 409

Inside this months issue...
 

Feature Story – 2013: Just How BAD a “Weather Year” Still Being Determined (p. 1):
    U.S. agriculture entered spring 2013 with minimal reserves of forage and grain, prior to 2013’s crop harvests. So far this year, many areas of this nation have been hammered with adverse weather. Ahead? Questions about whether there will be adequate heat during the rest of this summer to bring the corn crop to maturity. Read our August feature story here.

Mid-August to Mid-October: Worsening Drought for NZ (p. 1):
    The Global Drought Monitor projects “severe” and “extreme” drought blanketing almost all of New Zealand in the coming two months. That period is the start of New Zealand’s pasture-based milk production cycle.

Botulism-Contaminated Whey Powder Stains Fonterra’s Exports & Reputation (p. 2):
    New Zealand dairy export behemoth Fonterra recently announced a recall of whey powder products and finished goods containing whey powders. Reason: botulism bacteria in the powders.

July 2013 Class III Price $17.38 – Class IV Price $18.90 (p. 2):
    Those numbers tell it all. The FMMO class prices should be heading up for August, based upon most commodity price trends (except butter).

The Great Forage Shortage of 2013-2014 (p. 3):
    The Milkweed has put the name on it. U.S. livestock owners face terrible shortages of forage until at least mid-spring 2014. In many parts of the country, forage will be impossibly tight and expensive.

Survival Strategies for Tight Forage & Feed Supplies/Costs (p. 3):
    We offer general and specific suggestions about how dairy farmers may strategies if they’re facing tight feed supplies. For example: Lock in grain prices RIGHT NOW, while corn and soybean prices are low.

What is the Food Safety Modernization Act of 2011??? (p. 4):
    FDA is struggling to put into place a wide array of food safety rules, in response to a mandate to a federal law passed in 2011. Dairy plants will be an early focus on a set of tougher inspections. Take this one seriously!

ACS Panelists Discuss FDA Dairy Plant Inspections (p. 4):
    At the recent American Cheese Society convention in Madison (early August), two cheese plant operators and a food safety expert discussed what to do when the federal inspectors come knocking on your plant door. Start being prepared in advance!

Forage Shortfall & Higher Costs Pulling down Bull Calf Markets (p. 5):
    Prices for day-old bull calves have fallen by more than 500% in the past couple months in both California and Wisconsin. (We didn’t have time to survey other areas for this relatively obscure matter.) Scarce supplies and high costs of forage are inspiring many producers not to add any more forage-munching critters.

“The inspectors are coming. The inspectors are coming.” (p. 5):
    Federal food safety inspectors won’t be the only ones knocking on your door. Private food processors and retailers are setting up their own inspections to try to protect from potential liabilities in the event of food-borne illnesses.

Tom Kilcer’s Insights: Climate Change … or Climate Cycles? (p. 6-7):
    Paris Reidhead interviews Tom Kilcer – who runs the Cornell Research Farm at Valatie, New York – about the need to relook cropping choices and strategies in light of cyclical climate events. Kilcer offers a lot of insights regarding evolving weather issues and more appropriate crops to meet those challenges.

Two Nutrition Peaks – Silk and Dent – For Corn Harvested as Silage (p. 7):
    Interesting! Cornell University’s Tom Kilcer explains how corn plants intended for harvest as silage have two nutrition peaks: the first at the silking stage and the second at maturity. Dairy farmers with late-planted corn this year should consider early chopping if the corn is questionable about making maturity.

New Zealand Dairy Menace Extends Far beyond Recent Botulism Outbreak (p. 8-9):
    Writer Jim Eichstadt starts the first of an intended, two-part series detailing the long and sordid history of Fonterra and its predecessor, the New Zealand Dairy Board. Time and time again, Fonterra has taken advantage of naïve U.S. dairy groups and politicians while pushing a “Free Trade” agenda that torpedoes U.S. dairy interests.

“Wild Bill” Johnson’s Farm Radio Show Back on the Air (p. 11):
    Retired dairy farmer “Wild Bill” Johnson – 88 years young – has revived house weekly, hour-long farm radio show on radio station WTBQ. Johnson lives in Orange County, New York … birthplace of the nation’s fluid milk industry.

Tight Forage & Milk Supplies Ahead (p. 11):
    The Milkweed offers its future perspective, which includes: less farm milk output, reduced number of milk cows, higher dairy commodity and farm milk prices. A great factor driving these changes will be scarcity of forage.

GAO Audit of USDA Organic Dairy Practices Oversight Misses Mark (p. 12):
    In July 2013, USDA’s Office of the Inspector General completed a two-year audit of alleged illegal practices by large-volume organic dairy farms. Ironically, visits by OIG inspectors missed key states and premises cited by those whose original complaints sparked the probe. Will Fantle analyzes the shortcomings of USDA’s probe.

August Doldrums Provide False Calm over Dairy Commodity Markets (p. 12):
    Things are too quiet in the dairy commodity sector, Pete Hardin analyzes. Events involving weather and crops – in the U.S. and abroad – bear close scrutiny from dairy analysts.

Plenty stirring in the Dust in California … (p. 14):
    From the collapsing bull calf market to rising forage costs, California dairy producers are watching a lot of big changes.

All in the dairy reporting game … (p. 15):
    Pete Hardin tries to make sense of many different stories contained in this month’s issue, from alfalfa shortages to food safety issues.

Fonterra’s WPC recall doesn’t make sense (p. 15):
    Pete Hardin puzzles about details of Fonterra’s recent WPC 80 product recall. Why did it take Fonterra 15 months to announce the botulism contamination? What good is a recall 15 months after production? Hardin concludes that Fonterra’s management is looking pretty incompetent.

Persistent Drought & Heat across Western Half of U.S. Kindle Concern (p. 16):
    Weather patterns in the western U.S. are very hot and dry. We reproduce three-month outlooks for those factors for the entire nation. Also, we reproduce the August 4, 2013 “Corn Condition” table from USDA’s weekly Crop Progress Report. Key corn states show a high percent of their corn stands classified as less than “Good” or “Excellent”. And in some states, the corn crops look outstanding … if they get enough heat from here on out.

Swiss Valley: Meager Pay-Out for Long-Ago Retained Earnings (p. 16):
    Those rascals running Swiss Valley Farms – a Davenport, Iowa-based dairy producers cooperative – again dramatically shorted pay-out of long-ago retained earnings. Producers who shipped to Swiss Valley Farms about 12-13 years ago received a paltry pay-back of retained earnings from that period. More importantly: members are closely watching impact of a new milk pay price system instituted by Swiss Valley for July 2013 milk sold to the co-op. The new pay price system features producers paying ALL the milk hauling costs. More next month.

July 2013  Issue No. 408

Inside this months issue...
 

Serious New Zealand Drought Projected for 2013’s Second Half (p. 1):
    The London-based Global Drought Monitor projects serious drought for New Zealand during the second half of 2013. The drought worsens between July and September, and then somewhat eases in NZ’s South Island by December. If the Global Drought Monitor’s future outlook is accurate, then “Katy Bar the Door” as far as global dairy commodity supplies and prices. Much current logic in dairy is that milk production in New Zealand will be close to “normal” as the pasture season starts in August.

Feature Story: All Wet? USDA’s Latest Crop Report Ignores Grim Corn Belt Weather Realities
   
During a 2,300 mile tour of the central and western Corn Belt in mid-June, contributor Jim Eichstadt compares his own direct personal observations of corn and soybean conditions -- and reaches reach far different conclusions than USDA’s latest Crop Progress report. Read about it here.

June 2013 Class III Price $18.02 – Class IV Price $18.88 (p. 2):
    The numbers tell it all for June manufacturing class prices in the federal milk order system. Look for July prices to decline.

Two Dozen Wisconsin Counties Declared Ag Disaster Areas (p. 3):
    Adverse weather that has caused about a 50% alfalfa winterkill in Wisconsin and delayed the planting of corn in key dairy counties has gained 24 Wisconsin counties federal disaster status. Eight of Wisconsin’s nine biggest milk-producing counties are considered disaster areas.

Squeezed by Wal-Mart, PA Milk Marketing Board Drops Class I Premiums (p. 3):
    Packaged milk supplied to about 80 Wal-Mart and Sam’s Club stores in eastern Pennsylvania are doing the “cross-border shuffle”. Pennsylvania farm milk is being trucked to dairy plants in New Jersey and Maryland, where that product is processed and package. Then, the fluid milk containers are trucked to Wal-Mart outlets in Pennsylvania. This practice end-runs Pennsylvania’s state milk order premiums.

Chinese Infant Formula Items Stay in the News … (p. 4):
    CBS interviewed a Chinese mother who brought back 19 suitcases filled with infant formula from a business trip to the U.S. And China is investigating foreign infant formula makers for alleged “price-fixing”. By 2017, infant formula sales in China will be a $25 BILLION industry.

DFA CEO/President Rick Smith at Southeast Meeting (p. 5):
    Writer Julie Walker attended a July 11 meeting in Statesville, North Carolina at which DFA Rick Smith met with some plaintiffs from the Southeast dairy antitrust case. Rare that Smith is out in public. Southeast producers hope to see their dairy cooperatives work better in the marketplace and recover marketing costs. Can DFA change its stripes?

Global Milk Prices Rebound for Milk Powders, Butter (p. 5):
    On June 18 and July 2, prices for milk protein powders and butter increased at the Global Dairy Trade auction conducted by New Zealand’s Fonterra.

Dairy (and Agriculture) in Times of Aberrant Climate (p. 6):
    Pete Hardin thinks futuristically about key elements needed for a sustainable, food system. “Business as usual” isn’t working. Our water and our soils are being unduly depleted. One controversial notion detailed: metering and volume-based taxation of groundwater draw. That’s just the start …

After Show Trial: Raw Milk Issues Still Front-Burner in Wisconsin (p. 6):
    Following the State of Wisconsin’s failed effort to throw Amish dairy farmer Vernon Hershberger (father of 10 children) in the hoosegow for a variety of violations pertaining to raw milk sales, jurors in that trial spoke publicly about their impressions. And some state elected officials are preparing legislation to make raw milk sales legal – a move the governor opposes.

House OKs Farm Bill, Splits Farm/Nutrition Policies: Impasse Ahead (p. 7):
    On July 11, the U.S. House of Representatives narrowly passed its version of the Farm Bill. But the Republican-led body stripped out any nutrition and supplemental feeding programs. This bill is Dead on Arrival if it ever gets to a conference committee with the U.S. Senate. Nate Wilson does a good job analyzing this very recent event.

Normande-Cross Cows Help Millams Rebound from Barn Fire (p. 8-9):
    We profile a Minnesota dairy farming couple – Craig and Miriam Millam. After a barn fire in April 2012, they designed and built a milking parlor and bulk tank room in six month, bringing their beloved Normande-cross dairy cattle home. It’s a love affair involving the Millams and their dairy animals.

Normande Enthusiast Explains Appeal of the Breed (p. 9):
    Ken Rabas, who lives in Southeast Iowa, explains his 15 years’ experience with the Normande dairy cattle breed and why those animals are special.

Some Science Behind Dairy Heterosis (Cross-Breeding) Bonus (p. 10-11):
    Writer Paris Reidhead uses his talents to research and report the general phenomenon of cross-breeding. Paris notes that dairy is the only major U.S. livestock sector that has not widely incorporated cross-breeding of dairy cattle. Interesting!!!

New Dairy Plants & Tough Forage Conditions: Tighter Northeast Supply/Demand (p. 12):
    In New York and the Northeast, dairy plants are being dramatically built new and others are expanding. With generally terrible conditions for crops this spring and early summer in NY and New England, where’s the milk going to come from to fill these plants?

Lower CA Output & Export Deal Tighten NFDM; Cheese &Y Butter Abundant (p. 13):
    Pete Hardin’s dairy commodity review finds milk powder supplies due to lower production in California and a big export deal that’s being filled. Meanwhile, heat in the West and poor crops in the Midwest are reducing milk volume and/or milk-solids content of farm milk. Plenty of butter and cheese in inventory at present.

Incredibly Wet Spring Delays Field Work in NY and New England (p. 14):
    We’re privileged to print a summary and analysis of Northeast weather trends written by Steve Taylor. Steve paints a picture (in watercolors) of record rainfall across New York and New England, and the impact on local crops.

Ramblings on current events … (p. 15):
    Editor Pete Hardin tries to make more sense out of a number of current events, from weather the politics.

What’s Up at Swiss Valley Farms Co-op??? (p. 15):
    Letters have gone out to members of Swiss Valley Farms, the Davenport, Iowa-based milk cooperative. Members will no pay all trucking costs to the nearest milk outlet served by Swiss Valley. Is Swiss Valley preparing to sell off its assets and “do an Alto”? (Note: Several years ago, Alto Co-op of Waupun, Wisconsin sold its assets to Canada’s Saputo Cheese and relinquished the producers from heir contracts.)

June 2013  Issue No. 407

Inside this months issue...
 

Cold, Wet Weather Dampens 2013 U.S. Crop Picture, Global Outlook Worsens (p. 1):
    Cold, wet weather has slowed spring planting and emergency of annual crops like corn and soybeans. Jim Eichstadt details how U.S. crops are lagging behind normal progress, but that U.S. and United Nations food analysts are still talking about near record harvests. This article takes a “global” look at crop inventories and progress … and finds sobering conclusions.

Dairy Waits for Clear Signals from Crops, Supply & Demand (p. 1):
    The U.S. dairy industry is waiting for clearer signals involving weather, crops and dairy demand. Dairy inventories of cheese and butter are ample. But the U.S. is the only source of residual dairy products in the world! We n note that recent Global Dairy Trade prices for Cheddar cheese were 48 cents per pound higher than corresponding block Cheddar prices at the Chicago Mercantile Exchange.

Wisconsin Dairy Industry Faces SEVERE Forage Crisis (p. 2):
    Entering this spring, Wisconsin farmers had virtually zero carry-over inventories of forage. And this spring has turned sour for forage producing. Alfalfa has suffered untold tens of thousands of acres of winterkill. And continued wet weather means normal first cuttings of forage are behind schedule.

Screwy House Ag Politics: Lucas Stalls, Boehner Caves In (p. 2):
    The circus known as the U.S. House of Representatives now has the “Farm Bill ball” and Congress is fumbling. House Ag Committee Chair Frank Lucas (R-OK) recently claimed he’s not sure there will be a farm bill debate in mid-June. And House Speaker John Boehner (R-OH) did a 180-degree turn and now says he’ll vote for any farm bill package.

May 2013 Class III Price $18.52 – Class IV Price $18.89 (p. 2):
    May manufacturing class milk prices in USDA’s federal milk order system increased nicely. But June prices should slide backwards, due to recent commodity price declines.

U.S. Senate Passes Farm Bill, But Obstacles Ahead (p. 3):
    Writer Nate Wilson tracks recent events in the 2013 farm bill progress. The U.S. Senate has passed its farm bill package. That package includes the “Dairy Security Act”. Now the battle moves to the House of Representatives, where proposed funding for food assistance programs is a prime contention.

Lifeway Buys Former Golden Guernsey Plant (p. 3):
    A federal bankruptcy judge has awarded ownership of the former Golden Guernsey dairy plant in Waukesha, Wisconsin to Lifeway Foods – the nation’s predominant manufacturer of kefir. Winning bid: $7.5 million.

DFA/Dairylea Boost Quality Penalties, Northeast Demand Goes Backwards (p. 4):
    Two major Northeast dairy cooperatives have informed members that stiffer penalties against farm milk testing above 500,000 Somatic Cell Count are in place, effective June 2013. Unstated revisions in volume premiums are also in place. A letter from the co-ops complained that more producers are collecting volume and quality premiums. Meanwhile, a cool spring has combined with slow fluid milk demand and less need for milk into yogurt manufacture.

Ohio Holstein Assn. Bounces Checks from spring Consignment Auction (p. 5):
    What a mess! Consigners to the spring sale held by the Ohio Holstein Assn. ended up with $169,000 worth of rubber checks. The money was seized, per court order, for losses involved in a 2011 heifer export deal gone wrong. Don Alexander, manager of the Ohio Holstein Assn., allegedly “free-lanced” the deal and somehow involved the association without knowledge of or approval from the board of directors.

Chobani Yogurt in NYS: Dark Sides to “Success” (p. 6-7):
    Did you know that Chobani Yogurt’s plant in South Edmeston, New York takes in 70 big trailers of milk per day? But that Chobani’s wells are drawing two to three times that much water each day from the underlying aquifer? Neighbors’ wells are drying up. Paris Reidhead visits neighbors of Chobani’s plant and finds a lot of frustration, involving new power transmission lines, property tax breaks, etc.

Wisconsin’s Raw Milk “Show Trial” Yields Slap on Wrist to Producer (p. 7):
    The State of Wisconsin’s prosecution of Loganville dairy farmer Vernon Hershberger for alleged illegal sale of raw milk ended in with the Sauk County jury convicting Hershberger on only one charge. State prosecutors sought to jail the father of ten children for one year. Even after his victory, state lawyers proposed jailing Hershberger for alleged violation of his bail agreement.

Feature Story: DFA’s 2013 Financial Audit Horrid, Even by DFA’s Low Standards (p. 8-9):
    Our story of the month … and it’s not pretty. Read all about it here.

Farm Bill Clause Gives Huge Advantage to Multiple-Herd Operators (p. 10):
    Writer Julie Walker analyzes a key section of the dairy portion of the proposed 2013 federal farm legislation. That provision specifies that producers with more than one milking operation may participate in the dairy gross margin insurance program selectively. In other words, they could sign up one dairy for gross margin payments, and make all they milk they want at other sites.

Chinese Buying Largest U.S. Pork Producer/Processor (p. 10):
    China’s largest meat processing firm – Shuanghui International Holdings, Ltd. – is proposing to buy the United States’ biggest pork producer and processor: Smithfield Foods. This deal has many ramifications … starring with China’s dire need to boost available food for its citizens in the face of disease problems with both poultry and pork.

Erroneous Acid Whey Article Prompts Industry Response (p. 11):
    Nate Wilson explores alleged controversy about Greek yogurt plants’ acid whey disposal issues. A recent start-up farm magazine article depicted that acid whey as an environmental evil. Nate does a reality check.

Water. Water. Water. Critical Issus of Supply & Quality (p. 12):
    Pete Hardin takes a long look at a variety of recent water issues in the news. Conclusion: the availability of adequate supplies of quality water looms as THE issue of the future in the United States.

Dairy Prices in Limbo, Awaiting Weather, Crop & International Signals (p. 13):
    In the past month, U.S. dairy commodity prices have mostly slid backwards a bit. Inventories are relatively high, here in the U.S. But the world has virtually no dairy commodity reserves. Milk flow is strong, in part due to cool spring weather in the Northeast and Midwest. Buyers are waiting for signals that the dairy commodity prices have bottomed out before they start buying in normal quantities.

Dairy Cattle Replacement Prices at Auction Markets across the USA (p. 14):
    We offer this month’s summary of the dairy livestock trade.

Harvesting Complete Proteins from Wastewater-Fed Yeast (p. 14):
    Pete Hardin writes about the “most amazing wonder I have witnessed” in 49 years as an agricultural journalist. Pete takes readers back to snowy northern Maine in January 1978 – where he saw wastewater from a potato processing plant used to grow yeast. When adult (6 hrs.) the yeast were “harvested” (by centrifuging the water and drying the slurry), the yield was a 44% complete protein powder. Hardin puzzles how such technologies could revolutionize the protein sector in a protein-scarce world.

A2 Milk vs. Aspartame: health vs. neurotoxins (p. 15):
    Pete Hardin looks at the marketing success and health claims associated with “A2 Milk” – the genetic variant detailed by Paris Reidhead in the May 2013 issue of The Milkweed. Hardin contrasts the health-based marketing aspects of A2 milk, with the idiocy here in the U.S. that finds dairy’s two major trade associations promoting policies to put “non-nutritive sweeteners” (like Aspartame/NutraSweet) into more than a dozen dairy products with no front-panel notice. We project that A2 milk – which is not commercially marketed at this time in the U.S. – could be a great opportunity for small and medium size dairy processors and producer-handlers.

U.S. Dairy Prices Continue to Lag Strong Global Markets (p. 16):
    As of early June 2013, cash market prices for block Cheddar at the Chicago Mercantile Exchange lagged about 48 cents per pound behind Cheddar prices in international trading. Ouch.

Fluid Milk Promotions Stink (p. 16):
    Fluid milk sales are in the dumpster. Hard to believe, but a total of 35 cents per hundredweight (just over three cents per gallon) is collected by government programs on milk processed into Class 1 for promotion. Talk about a waste of money!

May 2013  Issue No. 406

Inside this months issue...
 

U.S. & global Dairy Walking Tightrope with No Safety Net (p. 1):
    Both the U.S. and New Zealand are coming off severe droughts. We analyze how severe droughts often carry a “long tail” that stretches into the next year’s milk output. Parts of the U.S. face serious alfalfa winterkill problems.

Wet, Cold Spring Clouds 2013 Crop Outlook (p. 1):
    Writer Jim Eichstadt takes a long look at the package of factors weighing on U.S. farmers here in spring 2013. Increasing delays on spring planting are perceived to be reducing grain yields … question is, by how much?

USDA to Start Issuing MILC Funds; Tight Money Stalls Fieldwork (p. 2):
    Writer Nate Wilson details how in his corner of western New York State, normal spring field work on local dairy farms is slow this spring, due to scarcity of money. Wilson reports that USDA has finally announced it will be issuing much-needed checks for the MILC safety net program.

April 2013 Class III Price $17.59 – Class IV Price $18.10 (p. 2):
    Slight gains for the cheese and butter-powder milk prices in USDA’s federal milk orders … after five months of declines.

DFA Hammered by Record $133,000,000 Loss in 2012 (p. 3):
    Small wonder that DFA was light on financial details at its annual meeting. The nation’s biggest dairy cooperative suffered its worst-ever bottom line in 2012: -$133 million. $212 million worth of litigation costs pulled down the year’s bottom line. Funny thing: at the 2012 annual meeting one year ago, CEO “Tricky Rick” Smith claimed that lawsuits against DFA were “ridiculous”. Well, DFA paid down $212 million worth of “ridiculous” last year … with plenty more cases facing DFA in court.

Reflecting Critical Global Dairy Situation (p. 3):
    The recent American Dairy Products Institute’s annual conference drew a record 850 attendees. Key questions focused on what’s going on in the world’s dairy industry, from supply-demand standpoints.

NCIMS Again Rules Against 400,000/ml SCC for Grade A Milk (p. 4):
    Once again, the National Conference of Interstate Milk Shippers voted against a proposal to reduce the legal limit for Somatic Cell Counts in Grade A milk at that group’s every-other-year conference in April.

Q1 2013 Cheese Exports & Revenues +8%: But NO Price Increases Per Unit (p. 4):
    All the hoopla about U.S. dairy exports focuses on volume, but ignores prices per unit. In 2013’s first quarter, U.S. cheese exports and revenues rose 8%. But CME block Cheddar prices were up 14 cents per pound for the relevant time frame (Dec. 12 – Feb. 2013). U.S. butter exports for 2013’s first quarter were up 19%, but sales volume rose only 14%.

China’s Protein Supply (Dairy, Meat) Facing Serious Challenges (p. 5):
    A serious of poultry and pork health problems have hit China, just at the same time China’s biggest dairy import supplier – New Zealand – has seen milk flow dry up. Bottom line: China’s supply of human-quality protein is becoming scarcer.

China’s Infant Formula Demand Spike Explained: More Babies! (p. 5):
    One reason why the Chinese are scouring the world for quality infant formula products is because of a baby boom last year. The “Year of the Dragon” – which ended in early 2013 – is considered the best year for having a child in China. So many families planned accordingly …

MPC “GRAS” Safety Petitions Withdrawn Due to Infant Formula Questions (p. 6):
    Two dairy groups – the American Dairy Products Institute and the U.S. Dairy Export Council – have temporarily withdrawn a petition seeking FDA’s consent for GRAS (safety) approval of Milk Protein Concentrate (MPC) as a food ingredient. The hold up: stricter rule concerning MPC use in infant formula products.

Would FDA GRAS Approval for Infant Formula Open Door for Substandard, Imported MPCs? (p. 6):
    THE Question. The recently withdrawn petition seeking GRAS safety okay for MPCs was held up by questions regarding infant formula use – for good reason. Danger is: okaying MPCs would leave infant formula makers able to use imported dairy proteins … without the benefit from modern dairy production and sanitation. Contaminated dairy protein products in infant formulas have been linked to infant deaths in the past.

Feature Story: Analyzing Key ADPI Speakers’ PowerPoint Panels (p. 8-9):
   
The recent American Dairy Products Institute (ADPI) annual conference in Chicago (April 28-30) was loaded with speakers and valuable information. Our May feature story looks at some of the highlights here.

A2 Milk – New Chapter of Dairy Health from an “Old Gene” (p. 10-11):
    Writer Paris Reidhead; takes us on a long, scientific trip through the genetics and potential health benefi8ts of “A2 milk.” A minority of U.S. dairy animals express proteins that seem to address some persons’ discomfort following milk drinking. Interesting!

SMA Bleeding Southeast Members’ Milk Checks (p. 12):
    Writer Julie Walker profiles a scary current mess in the Southeast. The regional milk transportation superpool – the Southern Marketing Agency – has lost DFA as a member. Suddenly, hauling costs during the “spring flush” have climbed to the moon. What’s going on???

Commodity Prices Up/Down: Industry Gauging “Spring Flush” & Global Events (p. 13):
    Dairy commodity cash prices at the Chicago Mercantile Exchange are up/down, given uncertainty about global weather events and their impacts upon milk out in major dairy nations/regions.

Chinese “Organic” Imports: Not Good Enough for Pet Food (p. 14):
    At a Congressional hearing in early May, a stinging review of poor-quality food imports (including organics) from China was aired. Will Fantle from the Cornucopia Institute reports on this hearing.

California’s Feb.-Mar. 2013 Milk Flow: -4% (p. 14):
    Milk production for the nation’s largest milk-producing state fell an average of four percent in February-March, according to USDA data (adjusting for 2012’s Leap Year). Dry soils don’t portend well for California’s production of crops in 2013.

Dairy just part of Farm Bill foolishness … (p. 15):
    Pete Hardin scorns the current farm bill process as a subsidy for insurance company profits. Better than taxpayer-subsidized “Gross margin insurance” for dairy, the dairy industry should attain a fair price for producers from the market place. Trouble is: politicians would rather pass indirect taxpayer subsidies than see consumers pay full price at the supermarket!

Obama White House politics thick, troubling in D.C. (p. 15):
    The latest scandal of siccing the IRS on “tea party” groups is just the latest in a recent series of wrong-headed White House endeavors.

Global Dairy Prices Continue to Beat U.S. CME Prices by Wide Margin (p. 16):
    The most recent Global Dairy Trade auction conducted by Fonterra saw prices generally slip. However, these global dairy prices remain well above U.S. cash market prices.

Drought in NZ, Central U.S. Estimated to Persist Through 2013 (p. 16):
    We cite forward projections by the Global Drought Monitor to show that coming months will show little relief for New Zealand’s drought. Meanwhile, the Central U.S. continues generally dry.

April 2013  Issue No. 405

Inside this months issue...
World Dairy markets Surge as Drought Stunts Milk Production in South Pacific (p.1):

    Read our story of the month here.

MILC Payments “Sequestered” But USDA Offers No Details (p. 2):
    USDA personnel cannot explain what’s going on with the “sequestered” MILC program payments to dairy farmers. That’s probably because USDA’s top officials don’t know.

Record Corn Price Tumble Defies Short-Term Fundamentals (p. 2):
    Late March gov’t report shook about $1 per bushel out of cash corn markets in the following week, probably for no good reason. The grain trade seems all to willing to be spooked down by USDA reports, while the weather situation is not good for early spring.

March 2013 Class III Price $16.93 – Class IV Price $17.75 (p. 2):
    The headline says it all. These prices should be the bottoms for some time.

Mid-East Co-op Superpools Collapsing: Ripple Effect to Hit Chicago (p. 3):
    The Continental Co-op has assumed a full raw milk supply deal with the Meijer’s stores fluid milk plant in western Michigan. That move boots out other local raw milk suppliers. The Michigan superpool is collapsing. The Mid-East (Order 33) superpool will likely die by May 1. Look for this chaos to spread to Order 30 (Upper Midwest).

Serious Global Shortage of Human-Quality Protein Ahead (p. 4):
    Adequate, complete protein is a daily requirement for proper human brain and muscle function. Global supplies of human-quality proteins are constricting.

England Limits Shoppers’ Purchases of Infant Formula as Chinese Visitors Empty Retail Store Shelves (p. 4):
    Halfway around the world, the government is taking action to protect the nation’s customers from Chinese travelers vacuuming up infant formula to take back to China. Producers’ Class Action Lawsuit vs. DairyAmerica and CDI (p. 5): We explore details of the major class action lawsuit by dairy producers against two dairy cooperatives – DairyAmerica and California Dairies. At issue: admitted misreporting of weekly milk powder prices to USDA’s NASS. Those unduly low weekly sales reports depressed farmers’ milk prices under USDA’s federal milk order program.

SE Milk Litigation: The Fairness Hearing Signals End is Near (p. 6):
    Writer Julie Walker has attended all but one courtroom session of the Southeast Dairy Antitrust Litigation … and she’s happy to report the end game: an April 3, 2013 “Fairness Hearing” at which regional dairy farmers commented on the $140 million settlement with Dairy Farmers of America. A lot of eloquent Southeast dairy famers are quoted.

Southeast Dairy Litigation Payments Appear Taxable by IRS as “Gross Income” (p. 6):
    DFA taketh away. The courts restoreth. IRS taketh away some of what the court restoreth.

“Retired” Dairyman Sam Simon’s Rx: Quality Milk Niche Markets (p. 8-9):
    Paris Reidhead describes the “Hudson Valley Fresh” dairy co-op – a nine-member group in New York’s lower Hudson Valley that markets its own brand of top-quality dairy products processed from their top-quality milk. Sam Simon (a retired osteopathic surgeon) grew up on a local dairy farm and has dairy in his blood – and a top-notch marketing concept for the co-op.

Boice Brothers Dairy, Inc. … 99 Years Young and Growing (p. 9):
    New York State’s oldest, family-owned dairy processing business turns 100 next year. The Boice family is now in its fourth generation of family members working at the plant. Boice Brothers custom processes dairy products for Hudson Valley Fresh co-op, which is described in this issue.

Wisconsin’s “Milk uber Alles” Policies Draw Citizen Ire, USEPA Scrutiny (p. 10):
    Wisconsin’s state government is pushing dramatic growth for its farm milk supply to meet perceived milk shortages relative to state dairy plants’ needs. But along the way, key water quality oversight is failing, critics charge.

Sen. Gillibrand Proposes Federal Dairy Policy Reform Alternatives (p. 11):
    U.S. Senator Kirsten Gillibrand (D-NY) has unveiled a set of dairy policy proposals that seek to boost dairy farmers’ safety net and provide transparency to the milk pricing process.

Detailing Milk Needs of Major Northeast Plants (P. 11):
    Nate Wilson starts on a project to estimate the raw milk needs for the many new dairy palnts coming on line in the Northeast. Looks like too many dairy plants will be chasing too few cows.

Aspartame/NutraSweet: Dairy Doesn’t Need Another Food Safety Battle (p. 12):
    We review articles written four years ago by Paris Reidhead about the evils of Aspartame/NutraSweet and certain other artificial sweeteners. FDA is taking citizens’ comments on proposals to allow “non-nutritive sweeteners” in a wide array of dairy products.

Fueled by Global Shortages, All Dairy Commodities Show Big Gains (p. 13):
    Holy cow! In the past few weeks, dairy commodity prices at the Chicago Mercantile Exchange’s cash trading have shot up dramatically. Why? Severe adverse weather in New Zealand and Australia has dried up the global dairy trade.

Obama Pushing Trans-Pacific and New European “Free Trade” Pacts (p. 14):
    Major trade deals are being pushed hard for both the Pacific and Atlantic trading partners by the Obama administration. Dairy interests should beware: access to U.S. dairy markets has been the goal of foreign interests for more than 40 years.

Rx for milk pricing: One class of milk, free hauling (p. 15):
    Milk is tight globally, and it’s getting tight in the U.S. Pete Hardin tries to cut through all the bull in milk pricing/policy and explains why a single class of milk, nation-wide would be best. And free-hauling (for producers) for dessert!

Early April 2013 U.S. Drought Conditions Worse than Year-Ago (p. 16):
    Adjoining U.S. Drought Monitor maps, one for early April 2013 and the other for early April 2012, show that drought conditions are dramatically worse west of the Mississippi River this year than last year. Sobering. The Missouri River watershed is really in trouble!

Chobani’s “Blood Orange” Yogurt: Adult Dairy Product Perfection??? (16):
    Editor Pete Hardin has fallen in love … with Chobani’s “Blood Orange” yogurt. The combination of lactic acid and citric acid on the taste buds is addictive.

March 2013  Issue No. 404

Inside this months issue...

Feature Story: Oceania’s Milk Output Falls, Global Dairy Prices Soar (p. 1):

    Read our “Story of the Month”  here.

Volatile U.S. Dairy Climate Looms … (p. 2):
    Global and national weather events, grain supplies, tightening global dairy supplies and the financial uncertainty surrounding Dairy Farmers of America and Dean Foods all present a volatile outlook the U.S. dairy industry in for 2013.

February 2013 Class III Price $17.25 – Class IV Price $17.75 (p. 2):
    Cheese milk prices are down, while butter-powder milk prices climbed a hair for February 2013.

Dean Foods Losing Hundreds of Walmart/Sam’s Club Accounts (p. 3):
    Starting in mid-March, Walmart/Sam’s Club stores will shift packaged milk suppliers in several parts of the country. Dean Foods is set to lose significant business volume, as Walmart has rebid milk suppliers.

DFA Members Deserve Straight Answers at March 18-19 Annual Meeting (p. 3):
    What about that additional $1.2 billion of debt that Rick Smith talked about in late January in Atlanta? How much is Smith’s total compensation from DFA and subsidiaries/joint ventures? If ever DFA members deserved straight answers about their cooperative’s financial condition, that time is n-o-w.

Greek Yogurt Casts Shadows on Competitors (p. 4):
    Retail data from 2012 suggests that most of the growth in Greek yogurt sales has come at the expense of non-Greek competing products? Greek yogurt grew by 71% in retail sales last year.

Whole Foods Will Label Food’s GMO Content (p. 4):
    Starting in 2018, the Whole Foods chain will start labeling genetically-modified organisms’ content in its food products. Bravo!

ZERO Grass-roots Support for National Milk’s Dairy Plan at FarmFirst Convention (p. 4):
    How many of the 300 or so delegates/members attending the FarmFirst dairy co-op annual meeting in Wisconsin in early February raised their hands, when polled whether they understood and would sign up for the Gross Margin Insurance program contained in the Dairy Security Act? Z-E-R-O!

Superior Dairy (Ohio) Bidding for Golden Guernsey Plant (p. 4):
    The parent firm of Superior Dairy (Canton, OH) has submitted a $5.5 million bid to acquire the property of Golden Guernsey dairy in Waukesha, Wisconsin. Superior Dairy has a unique distribution model – shrink-wrapping flat-topped- plastic gallon containers of milk for its Costco account. No lost plastic dairy crates.

Strategizing Your Dairy through these Volatile Times (p. 5):
    Ideas to study for dairy farmers facing tough cash flow times.

“Non-Nutritive Sweeteners” in Dairy Products? (p. 5):
    Talk about a bad idea. Dairy’s two largest lobby groups have petitioned the federal Food and Drug Administration to include “non-nutritive sweeteners” (like aspartame and saccharin) in a wide array of dairy products. Another battle dairy does not need!

GIPSA FOIA Follies: A “Rookie” Dairy Journalist’s Initiation (p. 6):
    Retired dairy farmer Nate Wilson tells a semi-humorous tale about his long-running battle with USDA bureaucrats to obtain information from a finalized investigation involving fraudulent sale of livestock by personnel at Empire Livestock in New York State. We reprint one of the few documents that USDA’s Grain Inspection Packers & Stockyards Administration provided: a page with four dozen redacted (blanked out) portions.

PepsiCo/Muller “FrütUp” Yogurt Contains Fishy Gelatin (p. 7):
    The Milkweed gives “two thumbs down” to the “FrütUp” yogurt products now being sold by the PepsiCo/Muller joint venture. These yogurts – produced in Germany as a U.S. plant is being built – are disappointing in many ways. Perhaps worst of all: the “fruit mousse” contains a gelatin made from tilapia (a fish). No allergen warning for persons allergic to fish!

Fair Oaks Dairy Harvests Low-Cost Bio-Gas and Ammonia Fertilizer from Manure (p. 8-9):
    High-tech processing of manure can now yield both bio-gas fuel for trucks, as well as a high-nitrogen fertilizer. That’s the research bearing fruit at Fair Oaks Dairy in northwest Indiana. Project manager Mark Stoermann leads us through this cutting-edge manure management. He also explains possible revolutionary aspects to dairy transportation available through RNG (Renewable Natural Gas, from methane) and Compressed Natural Gas.

Ex-NY Dairyman Terry Dye Went West … (p. 10-11):
    Paris Reidhead visits Dyecrest Dairy at Fort Collins, Colorado. Dyecrest sports a 30,000+ pounds of milk herd average on 1500 milk cows. The Dye family pays a lot of attention to detail and retaining quality employees.

Colorado Wildfires Will Cut Ag Water as Big Dairy Expansion Underway (p. 10):
    As Colorado’s dairy industry is poised to expand milk production, water realities pose a serious threat to future growth. Water coursing off slopes of burned-off mountains is bringing with it ash and other pollutants that are seriously harming water quality.

WI Ag Dep’t Slaps Cheese Labeling Scofflaw on Wrist … Again! (p. 12):
    When does this horse manure stop??? Once again – for the third time -- The Milkweed exposed the same Sun Prairie, Wisconsin business for illegally labeling imported processed cheese as Gouda. Once again, Wisconsin’s agriculture department investigated and found violations. And once again, the state wrote a “nasty letter” to the violator.

Southeast Milk Litigation: Money in Escrow; Next Chapters (p. 12):
    Julie Walker details the continuing legal process that follows settlement of the DFA antitrust lawsuit in the Southeast. Dairy farmers who sign up to receive damages payments will receive one lump sum from the settlement.

Blessing or Curse?: Ominous Build-Up of NFDM Inventories (p. 13):
    Pete Hardin’s dairy commodities report analyzes the astronomical accumulation of nonfat dry milk inventories in the U.S. But a the same time, global dairy commodity prices are sky rocketing, due to adverse weather that’s seriously pulling down farm milk output in New Zealand and Australia.

Crop Watch: Pay Close Attention to Soybeans, Forages (p. 14):
    As we exit winter, critical feed resources are getting scarce – such as soybeans and dairy-quality forages.

Milking another man’s “bad-luck cow” … (p. 15):
    Pete Hardin discusses long ago wisdom about how the only time some in agriculture may profit is when other farmers suffer bad luck or bad weather. He poses the current question: do U.S. dairy marketers (particularly cooperatives) have the gumption to produce and market U.S. dairy products to catch the fast-climbing world market prices? Historically, U.S. dairy cooperative marketers have given it away.

Protein. Protein. Protein. (p. 15):
    Protein is the “hot item” in food marketing. Sources of human-quality protein are becoming increasingly scarce and expensive. The U.S. dairy industry offers the lowest-cost, high-quality proteins available – in a glass of milk. Why don’t the over-paid geniuses working for dairy promotion organizations promote fluid milk’s cost-efficient protein content???

California Water Reservoirs & Mountain Snowpacks near Normal Levels (p. 16):
    We survey the latest maps and graphics from the California Department of Water Resources. Despite relatively dry conditions in early 2013, state-wide reservoirs and snowpacks are very close to normal levels. That’s good.

Did DMI Pay Julian Toney $859,197 for 8 Months’ Work in 2011??? (p. 16):
    In his final partial year of employment with dairy promotion organizations, “poor” Julian Toney appears to have netted $859,197 from Dairy Management, Inc. for a whopping eight months’ work in 2011. It takes a good tax lawyer to try to figure out Toney’s final take-home. Toney cashed out about $1.4 million in deferred income in 2011. The Milkweed has long contended that DMI executives are ridiculously over-paid.

February 2013  Issue No. 403

Inside this months issue...
Feature #1: Late 2012 “NSPF Cheese” Import Surge Helps Sink Cheese, Milk Prices (p. 1):

    This report is one of our “Stories of the Month.” Read it here.

Producers Must Sign Up by Feb. 29 For 2013 MILC Program Eligibility (p. 2):
    USDA has unveiled new rules and regulations for the new MILC program. But dairy farmers must sign up by the end of February to qualify for these payments.

December ’12 Nonfat Powder Production/Inventories Soared Dangerously (p. 2):
    December 2012 saw an astronomical increase in both production and inventories of nonfat dry milk in the U.S.

January 2013 Class III Price $18.14 – Class IV Price $17.83 (p. 2):
    The numbers say it all!

Dean to Lose Big Chunks of Wal-Mart Business in Early 2013 (p. 3):
    Wal-Mart bid out fluid milk supply contracts over many parts of the U.S. last fall. Results are coming in. From mid-March through late April 2013, Wal-Mart will be replacing some of its milk suppliers with competitors. Sources say that Dean Foods will take some serious hits as these changes roll out.

Founder’s Ex-Wife Sues for 53% of Chobani Yogurt Empire (p. 4):
    The former wife of Chobani yogurt king Hamdi Ulukaya sued him last August, seeking 53% control of the nation’s largest yogurt firm … plus $530 million in damages. Ulukaya disputes per claims. She claims to have a letter written by Ulukaya detailing her ownership share. Post-divorce, she loaned him money to start into dairy processing.

Aftermath: Costs of DFA’s “Bad Form” Business – A Billion Dollar Moving Target (p. 5):
    Another story available in full as a “Story of the Month.”

Southeast Litigation: Settlement, Smith, Speaking Out and Stepping Up (p. 6):
    Julie Walker details the post-mortem details of the settlement of the Southeast dairy antitrust litigation.

DFA’s “Tricky Rick” Obfuscates Again (p. 7):
    Pete Hardin details the long history of DFA CEO “Tricky Rick” Smith’s inability to be truthful about the history of his cooperative’s financial condition.

Twice Scorched by Drought, Now Well-Stocked with Forage (p. 8):
    The father-and-son team of Pat and Andy Leonard operate a picture-perfect dairy farm in Lafayette County, Wisconsin. They “hedge” the feed and forage needs for their 48 registered Holsteins by storing nearly a year’s worth of forage and other feeds.

Feature #2: December ’12 Ugly: More Milk & Cheese Imports, Minus Lost Fluid Sales (p. 9):
    This story is available here as a “Story of the Month.”

Farmers’ Response to 2012 Drought: Adopt or … Shrivel (p. 10-11):
    Paris Reidhead takes a lengthy look at crop and soil moisture management strategies that dairy farmers may use to lessen the impact of moisture shortages.

Castor Bean Oil Seed: Valatie, NY Research Update: (p. 12):
    Last fall, Paris Reidhead detailed exciting bio-fuel research at a Cornell University research farm in the Upper Hudson Valley. Bottom line: bio-fuel extracted from castor oil beans equaled 170 gallons per acre! And the castor oil bio-fuel has a “gelling point” of -78 degrees F.!

Organic Promotion Check-off Proposal Pushed Hard by Industry Lobby Group (p. 12):
    Will Fantle of the Cornucopia Institute writes about a proposal circulating in organic farming circles that would set up a mandatory USDA promotion check-off. More questions than good answers here.

Cheese Imports & Nonfat Dry Milk Glut Pulling Down Commodity Prices (p. 13):
    Recent big gains in production of nonfat dry milk and cheese have put those commodities’ price structures in uncertain positions. Meanwhile, a big slug of “Other NSPF Cheese” entered the U.S. in late 2012 – displacing U.S.-produced barrel Cheddar.

NYS Needs 180,000 More Cows; Environmentalists Wary (p. 14):
    Writer Nate Wilson will be covering the emerging debate in New York State about how to fill all those yogurt plants that are now under construction or expanding.

NZ’s Fonterra is part of the problem … (p. 15):
    Pete Hardin lists a long list of antics by New Zealanders that have “skunked up” the U.S. dairy market place. Aluminum shavings in your cheese, anybody???

“Muscle Milk” Claims “No Milk” Despite Dairy-Derived Ingredients (p. 16):
    Talk about a bunch of baloney! We list the ingredients for “Muscle Milk” – a product that claims “Contains No Milk.” But several of the dairy ingredients are dairy ingredients …and the allergen statement warns of ingredients derived from milk.

Post-Collapse, Many Details Remain in “Settling” Golden Guernsey (p. 16):
    Many legal issues remain to be sorted out, following the early January 2013 shuttering and Chapter 7 bankruptcy filing of the Waukesha, Wisconsin-based fluid milk processor, Golden Guernsey.

January 2013  Issue No. 402

Inside this months issue...
 

When Will Factors Pull Down U.S. Milk Production??? (p. 1):
    Despite many tough factors, U.S. dairy farmers continue cranking out more milk. Many industry sources believe the flow of farm milk will start going backwards in very few months.

USDA’s FSA Devastating New MILC Program Details (p. 2):
    Details to follow … Farm Service Agency staffers are drawing up details the the Milk Income Loss Contract (MILC) program authorized by legislators in the rolled-over federal farm legislation.

USDA’s Final Grain 2012 Analysis Close to Recent Estimates (p. 2):
    The January 11, 2013 WASDE grain analysis by USDA comes close to prior months’ data. Single statistic to watch: “carry-over” stocks. As of 8/31/13, USDA expects that both corn and soybean stocks will be down to about two weeks supply!

December 2012 Class III Price $18.56 – Class IV $17.83 (p., 2):
    The headline says it all. Manufacturing milk class prices are being pulled down by lower dairy commodity prices.

The 2012 Farm Bill Goes the Way of the Dodo (p. 3):
    Writer Nate Wilson digs into the politics and personalities behind the early January roll-over of federal farm legislation to what expired last September 31. Dairy did get an adjustment on the MILC program.

Farm Law Extension Stops “$8 Gallon Milk Price” Hoopla (p. 3):
    Thank goodness! In an effort to scare federal legislators, dairy politicians crafted a big lie: that consumer milk prices would rise to $6-8/gallon if the new farm bill expired without replacement.

Southeast Dairy Antitrust Trial Now Set for January 22 (p. 4):
    Barring an out-of-court settlement, the epic Southeast dairy antitrust trial starts on January 22. Remaining defendants include Dairy Farmers of America, present and former DFA subsidiaries, and ex-DFA president/CEO Gary Hanman.

Farm Bill Setback Hurt Kozak’s and Peterson’s Egos (p. 4):
    Two of dairy’s biggest phonies – Jerry Kozak and Collin Peterson – took it very personally when the 2012 farm bill efforts failed. It was all about them, to hear their post-game hissy-fits.

Kaput: Golden Guernsey (WI) Fluid Plant Shuts Doors Without Notice (p. 5):
    In early January, one of Wisconsin’s dairy processing icons – Golden Guernsey – shut the doors on its Waukesha, Wisconsin fluid milk plant with no notice to employees, suppliers or customers. A Chapter 7 bankruptcy filing followed.

NYC’s Beyer Farms Shuts Doors Abruptly (p. 5):
    New York’s largest milk distributor – Beyer Farms – was pulled down by unpaid millions owed to Dean Foods.

Chobani Commences Yogurt Production in Idaho (p. 5):
    The mammoth, new Chobani yogurt plant has started production in Idaho. Idaho is now a “milk deficit state.”

Dean Foods/SMA Settlement Payments to Southeast Producers Authorized (p. 6):
    Southeast dairy farmers’ long wait for initial pay-out of funds from the private settlement of antitrust charges by Dean Foods and Southeast Marketing Agency should be in their mail boxes soon.

DFA Up to Same Old Tricks in Missouri (p. 6):
    On December 31, 2012, Dairy Marketing Services (DMS – a DFA subsidiary) stopped marketing milk for independent producers in Missouri (among other states).. Word from Missouri is that DFA was threatening competing raw milk procurers with a variety of items if they added any of those 100+ producers to their milk routes. Same old stuff …

Forbes Magazine Latest to Scorch Failing Fluid Milk Sales (p. 7):
    The latest business publication to rake the dairy industry’s failed efforts to market fluid milk and gain added value from advanced marketing is Forbes magazine in its January 4, 2013 issue. Author Hank Cardello gives dairy marketers an earful.

More GIPSA Enforcement Actions Against Livestock Auctions & Personnel (p. 7)
    USDA’s branch that oversees livestock trading has come out with a new round of penalties against livestock auctions and individuals. Sounds like more penalties are coming.

Feature Story: Time to Break DFA/DMS Stranglehold Supplying Milk to Chobani Yogurt in NY (p. 8-9):
    Read our “story of the month” here.

Desertification Can Be Prevented … and Reversed (p. 10-11):
    Writer Paris Reidhead takes a long, in-depth look at the spread of deserts and how grazing animals are key elements in the maintenance of grasslands and the restoration of lands being lost to desertification. Ever heard of the Dust Bowl?

Barley: Ancient & Modern Grain (p. 11):
    Paris Reidhead takes us from Biblical times to the present day … with the miracles of barley discussed.

Watch Barley for Round-Up Reside Contamination (p. 12):
    We report on a recent presentation by Dr. Donald Huber, emeritus professor from Purdue University. Huber details how “burn down” of barley crops – i.e., application of RoundUp herbicide – is used as a pre-harvest management practice. Trouble is: major barley users – brewers – are increasingly rejecting barley grain due to RoundUp residues contaminating the grain. Next stop: animal feed!

Early 2013: Milk Abundant, Dairy Commodity Prices Flat, But … (p. 13):
    Dairy commodities have lost a lot of value in cash-market trading during the past two months. We analyze that Cheddar, whey and nonfat dry milk may not yet have found their bottom rung, price-wise.

Teamsters Union Pension Obligations: Headache for Many Processors (p.14):
    On top of other headaches facing dairy processors, the pensions portion of some Teamsters Union contracts with dairy plants present some pretty inequitable situations. You’ve never read this info in any other dairy publication!

Milk pricing/marketing system is toxic (p. 15):
    If toxicity is killing, then what’s happening to our nation’s dairy farmers, “thanks to” our current milk pricing and dairy marketing systems?

U.S. Dairy Farmers Better Off Without DFA (p. 15):
    The Nation’s largest dairy cooperative has failed the equities and interests of its members. DFA faces some very tough times ahead – all the harder to do when management and directors are in denial.

Drier Weather Conditions Projected in U.S. & “Down Under” (p. 16):
    We take a close look at key climate maps: U.S. current drought conditions, the 90-day forecast for drought in the U.S., and a six-months out look at growing drought in Australia and New Zealand. Serious stuff. Stay tuned.

December 2012  Issue No. 401

Inside this months issue...

CME Cheddar & Butter Prices Fall: Farm Milk Prices to Follow (p. 1):
    Starting right after Election Day, commodity Cheddar prices at the Chicago Mercantile Exchange have taken a tremendous plunge. Meanwhile, CME butter started their seasonal swoon in mid-November. Those two commodity price declines will add up to a farm milk price decline by about $4.50 per hundredweight by January or February, compared to peak prices dairy producers received this fall.

Reduced Missouri River Flow Impairs Mississippi River Commerce (p. 1):
    On top of lower water levels due to drought, the Army Corps of Engineers has started diverting over half of the flow of the Missouri River to store water for next year’s irrigation needs. That means the Mississippi will be barely navigable for barge traffic, over the 180-mile stretch from St. Louis to Cairo, Illinois. Many elected officials are seeking President Obama to override the Army’s actions.

CDFA Sets Dec. 21 State Order Hearing: Short-Term Hikes to All Classes of Milk? (p. 2):
    California agriculture department secretary Karen Ross has called a December 21 hearing to explore short-term increases for all Classes of milk under that state’s milk pricing program. Too little? Too late?

Barring Out-of-Court Settlement, DFA’s Southeast Antitrust Trial Set for Jan. 15, 2013 (p. 2):
    Unless attorneys for the two warring sides settle the case pre-trial, the epic Southeast dairy antitrust litigation goes to trial on Jan. 15.

November 2012 Class III Price $20.83 – Class IV $18.86 (p. 3):
   
Take a good look. Farm milk prices will follow recent steep declines in dairy commodity prices.

Dire Seed Corn Shortages Look: Lock in Supplies Yesterday! (p. 3):
    The Milkweed projects a 20-24 million acre shortfall of seed corn supplies currently on hand to meet next spring’s corn planting intentions. Weather in many Southern Hemisphere areas is not cooperating with emergency plantings of seed corn acreage intended for quick turn-around after harvest in several months for planting here next spring.

2012 Farm Bill Likely Headed to Impasse in Gridlocked Congress (p. 4):
    The lame duck session of Congress has many responsibilities to address, including new farm legislation – and probably won’t by the end of the year. Most likely: a one-year extension of the recently expired farm law early in 2013.

Northeast Dairy Producer Lawsuit Back on Track (p. 4):
    The presiding federal judge has certified the classes for plaintiffs in the Northeast dairy antitrust lawsuit against Dairy Farmers of America and its subsidiary, Dairy Marketing Services.

U.S. Grain Outlook Remains Uncertain Going into 2013 (5):
    USDA’s latest analysis shows little change in estimates for supply and demand of corn and soybeans for the current crop, now that the harvest is virtually finished. Lots of uncertainty about next year’s crops and demand – starting with the weather.

Brazil Hid Confirmed “Mad Cow Disease” Case for Two Years (p. 5):
    We reprint in full a press release from R-CALF USA – a U.S. cattlemen’s group – detailing how Brazil “buried” a suspected (and later confirmed) case of “Mad Cow Disease” for two years. R-CALF USA is demanding that the federal government suspend imports of Brazilian beef into the U.S.

Dwarf Sorghum Silage Far Outperforms Corn on Shale Soil in PA (p. 6-7):
    Writer Paris Reidhead digs deep into the 2012 cropping program and nutritional results harvested by Pennsylvania dairy farmer Rick Beatty. Beatty took two cuttings of “winter forage” before planting dwarf sorghum around July 4. His total yields: about 31 tons per acre of silage from the two crops. The article also discusses inputs and nutrition profile of the crops harvested.

Dairylea’s 3/31/12 Audit Masks Failed Milk-Pricing Mission (p. 8):
    We analyze Dairylea Cooperative’s March 31, 2012 financial audit. The co-op’s looks better than a few years ago, but the far-flung system of dairy farmer services conducted by subsidiaries won’t last long if the milk prices don’t sustain Northeast dairy producers.

Fundamentals Don’t Explain Cheddar Cash Market Collapse (p. 9):
    In summary, Pete Hardin tries to find fundamentals supporting the Cheddar price collapse at the Chicago Mercantile Exchange and comes up short.

Milk Pricing: Purposefully Indirect Path from Farm to Consumers (p. 9):
    Jim Goodman, a Wisconsin producer of organic milk and beef, offers his impressions of the nation’s milk pricing system, following a meeting with officials of the Chicago Mercantile Exchange.

Dairy Market News Cheese Analyses – October, November & Early December 2012 (p. 10-11):
    The Milkweed
goes back and reprinted selected excerpts of weekly analyses about cheese marketing conditions from USDA’s Dairy Market News. These weeks cover the fall months leading up to the Cheddar price collapse that started on November 7, 2012 ... and beyond. Inventories were light and demand seemed solid ... right up to the crash.

Page 12 – Our “Stories of the Month.”
   
Read our December feature stories here.

Devil in the Details? Questions Re: By-Laws in WI Co-op’s Merger (p. 13):
    Members of three Wisconsin-based dairy cooperatives are voting on merger, which will take place on Jan. 1, 2013, if approved. The Milkweed takes a hard look at the proposed by-laws for the proposed entity – FarmFirst Dairy Cooperative – and is shocked. Example: By-laws give directors powers to “borrow money, without limitation as to amount of indebtedness or liability.”

Two Key Milestones Ahead for Southeast Dairy Antitrust Case (p. 13):
    Julie Walker details two big pending events in the Southeast dairy antitrust case: #1 – either settlement, or trial starting Jan. 15; and #2 – likely mailing of the first round of settlement checks to Southeast dairy producers in coming weeks. This payment will be the first of several installments from the $140 million settlement by Dean Foods.

“Too Good to be True” – Likely When Crop Insurance Concerned (p.14):
    Julie Walker details many unansered questions and pitfalls about the proposed 2012 farm legislation that basically turns over U.S. farm policy to crop insurance firms. Beware!

USDA December Crop Report Sees Slightly Lower Grain Prices (p. 14):
    We discuss the recently-released USDA analysis of domestic and global grain production, stocks and demand.

Many Modern Corn Hybrids Sacrifice Quality for Quantity (p. 15):
    Writer Paris Reidhead takes a tough look at modern corn hybrids and finds some desired traits wanting.

A.J. Bos Agrees to Abandon Traditions Mega-Dairy Project Near Nora, IL (p. 16):
    After a five-year battle against local opponents, California dairyman A.J. Bos announced he won’t build a mega-dairy on the thin soils of Jo Daviess County, Illinois. Bos’ quitting the project came as part of an agreement with the Illinois Attorney General’s office.

Cheddar, Butter Cash Prices Way Down, Despite Modest Inventories (p. 17):
    Our analysis of the current dairy commodity scene.

Dairy Cattle Replacement Prices at Auction Markets Across the USA (p. 18):
    Prices for dairy livestock are good, so far, for quality springers and good milk cows. Otherwise, not much buyer interest.

Nov. 2012 CME Events akin to Oct. 2001 Shenanigans (p. 19):
    Pete Hardin explores parallels between the November 2012 Cheddar price collapse at CME and the October 2001 Cheddar price debacle. Note: October 2001 saw CME block Cheddar prices decline by 49 cents per pound – the biggest single-month price collapse in Cheddar cash trading at CME. Funny thing: USDA’s “Cold Storage” report for October 31, 2001 showed American-style cheeses had their greatest single month’s decline in the history of that report. Hardin notes ironically the “perfect correlation” – 1:-1. So much for supply/demand.

What to Do About Cheddar Pricing Complaints (p. 19):
    Pete Hardin lays out his strategy: a formal complaint to the federal Commodities Future Trading Commission regarding recent weeks’ Cheddar price collapse.

Nonfat Milk Powder Prices Low, Relative to Supply/Demand (p. 20):
    We continue our “Spotlight on Nonfat Dry Milk” series with an analysis of recent year’s trends for milk powder production, inventories, and prices. No reason – from a supply-demand basis – why U.S. nonfat dry milk prices collapsed by ten cents per pound in October – when supplies in the industry were incredibly tight.

November 2012  Issue No. 400

Inside this months issue...

Feature Story: Nonfat Dry Milk Analysis: Output, Stocks & Shipments Declining Sharply (p. 1)

    Our “Story of the Month” here.

Nov. Crop Report: Higher Corn & Soybean Yields, Lower Grain Prices (p. 2):
    USDA’s Nov. 9, 2012 report on global grain stocks found slight increases in U.S. corn and soybean yields. Supplies remain tight.

Time for Hard Work on Budget, Farm Law in D.C. (p. 2):
    Lawmakers return to Washington, D.C. in lame duck session to address federal budget matters and the uncompleted new farm law.

October 2012 Class III Price $21.02 – Class IV $18.54 (p. 2):
    USDA’s monthly manufacturing milk class prices rose sharply in October, compared to September 2012 figures. Take a good look. Recent cheese price declines are going to pull down Class III prices at least for a couple months.

Too Much Expansion, New Construction of Dairy Plants!!! (p. 3):
    Dairy processors have gone hog-wild in their expansions and new construction of dairy plants across much of the U.S. This over-building promises several years’ headaches, because the U.S. farm milk supply cannot rise to meet expanded plant capacity.

Latest LGM-Dairy Foolishness: Now You See It, Now You Don’t (p. 3):
    In late October, with a couple days’ notice, USDA opened up bidding for some $14.9 million of LGM-Dairy insurance. Must have been a pre-election ploy.

608(c) 18 Progress Looks Like “The Stall” (p. 3):
    If you’ve ever watched a high school basketball game, you’re familiar with “The Stall.” That’s how USDA seems to be responding for inputs from persons pushing the608(c) 18 petition process to try to raise farm milk prices during this emergency.

Chobani to Start Yogurt Production in Idaho in Coming Months (p. 4):
    The vaunted Chobani yogurt firm will start production in its brand new Idaho facility in a short while. Questions arise: How much milk will Chobani need? What firm(s) will supply the milk? At what cost to Chobani? Initial impressions: DFA may be pulling an anti-competitive stunt in Idaho, just like it’s done with exclusive control of milk supplies to Chobani’s plant in New York State.

Three Wisconsin Dairy Co-ops Announce Merger Intentions (p. 4):
    Come January 1, three Wisconsin dairy cooperatives intend to merge into a single co-op. They are: Family Dairies USA, Manitowoc Milk Producers and Milwaukee Milk Producers Assn.

Consumers Soaked for 1.9-Cent per Gallon “Milk Mustache Tax” (p. 5):
    USDA adds a 20-cent per hundredweight fee to fluid milk processors’ raw milk costs to pay for the “Milk Mustache” program. That cost is passed along to consumers, who foot the tab for such foolishness. Meanwhile, the big dairy processors’ lobby is “milking the cow” for all it’s worth.

Tritent Targets Top-Shelf Chinese Infant Formula Market (p. 6):
    Tritent International is completing one dairy plant in northeastern Iowa … and has just bought another dairy plant in Platteville, Wisconsin … to produce and market infant formula for the high-end Chinese market. Despite warnings about unauthorized circulation, this firm has posted its 53-page business plan on its Web site. Interesting reading …

NYT Article Jolts DFA Members Awake: Legal Claims Total Hundreds of Millions??? (p. 7):
    A recent, long article in The New York Times about crooked dealings in he dairy industry has jolted many DFA members regarding their cooperative’s potential liabilities in the upcoming Southeast dairy antitrust trial.

Fact or Fiction: GIPSA Protects Livestock Producers???
    We review the general responsibilities of USDA’s GIPSA – the Grain Inspection, Packers and Stockyards Administration. This review is important, due to a fast-growing number of incidents of fraudulent livestock transactions.

The New York Times Details Engles’ & Hanman’s Milk Moo-la Schemes (p. 8-9):
    A series of sweetheart deals between the top employees of the nation’s largest fluid milk processor and the nation’s largest dairy farmers cooperative is just about to go to trial in Tennessee – one of the biggest legal dairy cases in history. On October 28, The New York Times took a long look at dairy’s dirty dealings that enriched a few insiders, while robbing money from dairy farmers in the Southeast.

Selected Excerpt from Oct. 28, 2012 New York Times Article (p. 9):
    Read some of the juicy portions for yourself …

Does Drought Stress Reduce Corn Starch? (p. 10-11):
    Writer Paris Reidhead discusses why drought-stressed corn can test low in starch content. He supplements his writing with test results from labs in New York State and Wisconsin.

“Irregularities” Surface at Empire Livestock, LLC (p. 11):
    Writer Nate Wilson tries to track the facts behind a June 2012 “settlement” between USDA’s Packers & Stockyards Administration and Empire Livestock (in New York State). Funny thing: the folks involved don’t want to release many details.

Dean Foods’ Horizon Unit Continues Ruthless Management Practices, Sued by Former Farm Manager of Vertically-Integrated Feed Operation (p. 12):
    Will Fantle of the Cornucopia Institute writes about how a former dairy farm manager for industry giant Horizon Organic has sued his former employer, alleging a lot of wrong-doing.

Drugs Found in Fonterra Dairy Powder Shipment to Algeria (p. 12):
    Authorities in Algeria have found 165 kilograms of a hard drug – either heroin or cocaine – in a shipment of milk powder from New Zealand’s Fonterra.

Cheddar Prices Weaken Significantly in Early November (p. 13):
    In two trading days right after the Nov. 6 elections, CME cash trading saw the all-important block Cheddar market collapse by 23 cents per pound. Industry sources tell The Milkweed that overall Cheddar demand is strong.

Emergency Hearing Proposed for California Whey Pricing (p. 14):
    Terrible red ink losses by California dairy producers have sparked long looks at the state’s milk pricing system. Refusal by CDFA officials, earlier this year, to approve a whey price formula change that would have boosted producers’ incomes has become a nasty contention. Most recently, three cooperatives submitted a proposal for a new whey price hearing.

U.S. Food Policies: Disaster Ahead (p. 15):
    Pete Hardin reviews this nation’s current food situation – with particular emphasis on supplies of human-quality proteins. Then, he discusses some basic elements that a rational, future federal farm/food policy ought to contain.

Dairy Data: USDA’s Valuable Contribution (p. 15):
    Pete Hardin says something good about USDA – the professionals at Dairy Market News, NASS, and the federal milk order program to collect and disseminate so much helpful information. Dairy has more publicly-available, near-current information than any other industry in the country.

Strike Three! “Usual Suspect” Caught Mislabeling Cheese Again (p. 16):
    Here they go again. One more time, we’ve caught those scofflaws – Weyauwega Cheese – selling adulterated and mislabeled products as Gouda (a cheese with a federal standard of identity). We’ve made another complaint to the Wisconsin Department of Agriculture, Trade and Consumer Protection. Maybe this time …

October 2012  Issue No. 399

Inside this months issue...
Feature Story #1: What’s Ahead? Watch Calif. Milk & NFDM Output/Inventories (p. 1):
    This report is one of our “Stories of the Month.” Read it here.

Oct. 11 USDA Grain Report: Corn Supplies Down, Soybeans Up (p. 1):
    USDA’s Oct. 11 agricultural supply/demand report concludes only a tiny decline in estimated corn acres per bushel (122.0 vs. 122.8), compared to the prior report in September. Meanwhile, USDA estimates that the soybean harvest will be about 8.6% greater than estimated in September. That bigger harvest estimate bumps up beginnings stocks, total supply, year-end stocks and also lowers price estimates. Hard to believe some of these conclusions.

Rabobank Projects 15% Global Food Inflation through Mid-2013 (p. 2):
    The world’s largest agricultural lender projects a new dose of “ag-flation” for the world. Rabobank estimates global food costs will rise 15% for the year ending June 30, 2013. Rabobank foresees likely “food hoarding” and export embargoes by some nations.

CDI Offers Members Financial & Psychological Counseling (p. 2):
    California’s largest in-state dairy cooperative California Dairies, Inc. – is offering distressed producer-members free psychological and financial counseling services. In truth, the best “tonic” to cure what ails California dairy producers would be an honest price on nonfat dry milk. CDI is the nation’s biggest producer of nonfat dry milk.

Vilsack: Feed Costs Reasonable Element in Milk Pricing (p. 2):
    At a World Dairy Expo conference on food policy, USDA Secretary stated that a milk pricing formula that factored in feed costs would be a reasonable element in farm milk pricing calculations.

September Class III Price $19.00 – Class IV $17.41 (p. 2):
    For September 2012, USDA’s price benchmarks for cheese milk (Class III) and butter-powder milk (Class IV) rose $1.27 and $1.65 per hundredweight, respectively. More price increases are on the way …

2012 Seed Corn Harvest Looks Like a 50-50 Proposition: 50% More Acres Planted, 50% Loss on Hoped-For Yields (p. 3):
    Once again, The Milkweed is at the cutting edge of seed corn industry analysis. For 2012, following extensive talks with persons in the field, we estimate that U.S. seed corn firms planted 50% more acreage in 2012 (vs. 2011’s disaster), but that intense heat/Drought reduced the total 2012 seed corn harvest to only half of intended yields. With ZERO carry-over of seed corn entering 2013, that means U.S. corn producers face an even tougher situation for seed corn in 2013 than they did in 2012. We estimate that domestically-produced seed corn supplies will be about 20 million acres short of U.S. 96+ million acres planted in 2012. A big push to grow more seed corn over winter in the Southern Hemisphere is ongoing.

UDIA Trolling for More Moo-la (p. 3):
    The United Dairy Industry Assn. is trying to squeeze more annual dues out of state/regional dairy promotion groups. Exactly why UDIA continues to exist is a good question.

Farmers Seek $419 Mil. In Damages as DFA Loses Appeal in SE Lawsuit (p. 4):
    Barring an out-of-court settlement, Southeast dairy farmer plaintiffs will go to trail against Dairy Farmers of America in mid-January 2013. This long-delayed trial seeks damages from the nation’s largest milk cooperative, alleging that DFA constricted access to regional fluid milk plants and underpaid producers.

Management Strategies in an Ever-Changing Dairy Farming World (p. 5):
    Pete Hardin details a set of eight management strategies to help guide dairy farmers through these precarious times. Sample: Lock in needed grain and forage supplies now, but “ride the market” on milk prices.

Why Did DairyAmerica Import Foreign Milk Powder? (p. 5):
    Ohio dairy farmer John Rahm has researched U.S. Customers Service records and finds several instances where DairyAmerica – the “cartel “ of U.S. milk powder-producing cooperatives – imported milk powder in 2008. DairyAmerica even imported milk powder after the price collapse in October 2008 – at the same time that milk powder was being sold as surplus to USDA’s Commodity Credit Corporation.

DFA Financial Situation: Bad News Travels in Threes (p. 6):
    No mercy for these clowns. In recent weeks, DFA has: 1) seen Standard & Poors announce a likely downgrade of its debt ratings for DFA, 2) has pushed back payback of retirees’ equities from 10 years to 12 years, and 3) the co-op’s lawyers admitted in federal court in eastern Tennessee that when tripled, damages claims could total $1.2 BILLION dollars in the Southeast antitrust litigation. Small wonder that in September 2012, DFA restructured its finances and added more debt!

Dairy Cow Slaughter Remains Above 2011’s Data (p. 6):
    For each of the past six weeks (ending 9/29/12), USDA reports more dairy cows have been slaughtered in the current year than last year. Through 2012’s first three quarters, dairy cow slaughter is running ahead of last year by 136,900 animals.

Absent Farm Law, “$38/Cwt. Milk Price” Chatter Irresponsible (p. 7):
    Dairy products are being used as a political football, in scare tactics by proponents of the 2012 farm law (as passed by the U.S. Senate and the House agriculture committee). Claims that dairy product prices could double at the supermarket are being thrown around by the likes of USDA Secretary Tom Vilsack, NY Senator Charles Schumer, and greasy Jerry Kozak (CEO of National Milk Producers Federation). NO – consumers don’t face a doubling of retail dairy prices due to failed attempts to pass the federal farm bill.

NMPF’s Kozak Hoots about Helping Kill MILC Extension (p. 7):
    Jerry Kozak – the NMPF CEO who keeps ten percent of the nation’s oil reserves in his hair – has recently been yukking it up about helping kill an extension of the Milk Income Loss Contract program. MILC was “sort of” a USDA milk price safety net program that had helped farmers offset low incomes (particularly relative to feed costs). Kozak’s ego is topping dairy farmers’ income needs.

Grape View Dairy (Western NY) Dairy Converts to Robotic Milking System (pages 8-9):
    In western New York, dairy farmers Chad and Jill Fredd installed four Lely A4 milking robots late last January. Since then, they’re holding milk output steady, while milking 200 cows (instead of 252 head). Feed costs are down and three fewer employees are needed. Writer Nate Wilson details the transitions at Grape View Dairy.

Drought Increases Aflatoxins in Corn (p. 10):
    Suddenly, dairy farmers face a critical issue: aflatoxin contamination in corn silage and feeds … plus transfer of aflatoxins to their bulk tank. Paris Reidhead digs deep into the whats, whys and wherefores of this growing headache.

Take Aflatoxin Testing in Farm Milk Very Seriously! (p. 11):
    Many milk marketers are testing for aflatoxin contamination in trailer loads of farm milk. Dairy farmers can obtain reasonably-priced aflatoxin testing kits for their milk and corn.

B-I-G Deal: Dean Foods’ Morningstar Unit “For Sale”: (p. 11):
    Dean Foods is offering for sale its Morningstar Foods unit. Morningstar processes UHT dairy products, aerosols, dried soup mixes, ice cream … and more. This move is designed to try to work down indebtedness. Question: once Morningstar is gone, will Dean Foods’ remaining operations – primarily fluid milk processing – be financially viable as a stand-alone business?

Aurora Organic Dairy Scandal Ends: $7.5 Mil. Settlement (p. 11):
    A private class action lawsuit against Colorado-based Aurora Organic Dairy has ended with a $7.5 million settlement for plaintiffs. At issue: widespread, long-running violations of USDA’s organic dairy standards by Aurora. Aurora packages organic milk for a wide range of supermarket chains, including Wal-Mart.

True Measures of Drought-Stressed 2012 Grain: Quality & Nutritional Function (Not Bushels/Acre) (p. 12):
    Reports from early harvest of corn and soybeans indicate some serious nutritional and quality problems are being found. In particular, corn is suffering both from aflatoxin contamination and low levels of starch. We’re hearing of some corn tests coming back with only about one-third of normal starch content. The 2012 Drought has a long tail … perhaps one segment of which should be to price grain purchased by livestock producers on a nutrition/quality basis, not just merely by the bushel.

Cheddar & Milk Powder Supplies Tight …and will Get Tighter (p. 13):
    Pete Hardin’s dairy commodity marketing picture shows primary concern for U.S. milk powder production and inventories. Any further declines in California milk production will come out of farm milk volumes available to milk powder plants. Sources report that milk powder supplies are already hand-to-mouth in many instances.

USDA Crop Insurance – Distorted Figures Create “Drought of Doubt” (p. 14):
    Writer Julie Walker has hit a grand-slam with this one. She traces what appears to be the intentional “down-sizing” of estimate annual profits enjoyed by the crop insurance industry. Some time after a 2010 report that noted a 17% annual profit margin for crop insurers (from 1991 through 2009), suddenly various official analyses down-graded the 17% figure to 14%. When one realizes the taxpayer subsidies paid to crop insurers … and the current farm law proposals to rely even more on crop insurance programs … what’s going on? Wells Fargo – the nation’s largest farm lender and the nation’s largest crop insurer – is obviously the biggest beneficiary.

Taxpayers should not bail out milk-pricing inefficiencies (p. 15):
    Pete Hardin blows his top on the foolish notion of taxpayer-subsidized “dairy margin insurance” proposed in the farm bill. He argues that dairy farmers’ milk incomes are unduly low, because the nation’s gutless dairy cooperatives are giving away farm milk to big buyers without any effort to recover costs of marketing and transportation. Examples: Billionaires like James Leprino (owner of Leprino Foods, worth $2.6 BILLION) and Hamdi Ulukaya (owner of Chobani Yogurt, worth $1.1 BILLION) receive huge volumes of farm milk from cooperatives like Dairy Farmers of America and Dairy Marketing Services at prices far below actual costs of marketing and transportation. Hardin scores the idea of subsidizing dairy farmers’ milk price losses by taxpayers, when the big dairy cooperatives are incapable of extracting costs from the market place in what amount to a set of exclusive raw milk supply contracts.

John Bunting Reports to His Friends (p. 15):
    Paris Reidhead recently visited John Bunting at the rehabilitation facility in Stamford, New York. Paris passes along John’s message to friends.

Feature Story #2: The U.S. Dairy Farm Crisis: October 2012 – Honest Solutions (p. 16):
    This is one of the “stories of the month.” View it here.

DFA Borden “Singles” Strike Out: Contain MPC (p. 16):
    Here they go again: Dairy Farmers of America is selling “Borden Singles” full of Milk Protein Concentrate. Where’s “Mr. Yuk” when you need him??

September 2012  Issue No. 398

Inside this months issue...

Latest Crop Estimates: USDA “Stays on Script” (p. 1):
    On Sept. 12, USDA released its agricultural supply/demand estimates. The 2012 corn crop output remains the same, with a tiny reduction in yields per acre and zero reductions in acreage. We’ll see …

Dairy Prices Climbing: Tighter Supplies Ahead (p. 1):
    It’s generally perceived that scarcity is setting in to the extended U.S. dairy picture. Grain, nonfat milk powder, and money are all tight.

NFDM Supplies Tight, But Key Survey Prices Moving Up Shortly (p. 2):
    Despite higher output this year, supplies of U.S. nonfat dry milk are very tight. Spot prices are up to $1.90 pound., despite the fact that California and USDA weekly survey data prices are in the high “1.20s” and mid “$1.30s” per pound.

Will the 2012 Farm Bill Be Completed by Sept. 30??? (p. 2):
    No.

August Class III Price $17.73 – Class IV $15.76 (p. 2):
    Dairy commodity prices are rising. Butter and nonfat dry milk survey prices used for setting the August Class III/IV prices have a long way to go to catch up to current cash spot market prices.

Feature Story #1 – Milk Price Petition: 608(c) 18 Update & Strategies (p. 3):
    This is one of our “stories of the month.” Summary: Pete Hardin suggests upgrading milk used to process yogurt to Class I status. Also: shift to “farm-point pricing” – a system where independent producers (and members of efficient cooperatives) do not pay hauling. The transfer of milk takes place at the bulk tank, PERIOD. Read the full story here.

NYS Governor Holds 1st “Yogurt Summit” – Where’s the “Moo-la”??? (p. 4):
    NY Governor Andrew Cuomo wants to boost milk production to fill all those yogurt plants being built/expanded in his state. He had a big meeting. Little discussion focused on paying dairy farmers more money for their milk.

Southeast Dairy Antitrust Trial Postponed AGAIN (p. 4):
    The tentative new trial date is January 15, 2013. This trial has been delayed just short of two years. Many documents have not been made public.

Bonus Feature Story – California’s Dairy Industry Sitting Atop Many Structural Faults (p. 5):
    Pete Hardin details several critical problems facing California dairy producers – focusing on the man-made matters. Class 1 “Quota,” too-liberal make-allowances for manufacturing plants, nonfat dry milk pricing thievery, etc., etc. Read our bonus story  here.

Milk Hauling: Next “Cost Squeeze” Facing Dairy Industry (p. 6):
    One industry problem has to get solved, before it worsens: dairy farmers’ paying milk hauling charges off the farm. Bad as this inequity currently is, unless things change, pending War in the Middle East promises to drive diesel fuel prices far higher! If so, the “usual suspects” will ask the dairy farmer to … you guessed it … pay more hauling costs.

Bonus Feature StoryCalifornia Dairy Situation in Turmoil (p. 6):
    What a mess as the Golden State dairy industry melts down. Finge-pointing ensues. State agriculture commissioner Karen Ross is appointing a committee to solve all these problems in three months!!! Read our bonus feature story here.

Cotton Market in Tatters: Risky Forward Contracting in Volatile Times (p. 7):
    The ups and downs of the cotton industry in the past few years have lead to a large number of failed deliveries and broken futures contracts – by both buyers and sellers. Experiences in the cotton trade are key to lessons possibly ahead for dairy.

Domestic Food Security & the 2012 Farm Bill (p. 7):
    Julie Walker keeps digging into the Risk Management system of crop insurance … and is hitting a brick wall when it comes to putting her hands on a key USDA report from 2010 that criticized crop insurers’ profit margins. Keep at ‘em, Julie!

Feature Story #2 Double-Foraging: WI Dairyman Ensiled 3+ Tons/Acre of Green Chop Before Planting Corn in Mid-May (p. 8-9):
    Read our second “Story of the Month” here.

Retired Extension Agent Conducts Alternative Crop Research (p. 10-11):
    Paris Reidhead visits retired Cornell extension specialist Tom Kilcer, who’s now running a Cornell research farm at Valatie, New York (Columbia County). Kilcer details the types of research being conducted at the farm, including castor bean stands.

Castor Bean: Bio-Diesel Miracle Crop (p. 11):
    Imagine … a crop that yields 200 gallons of high-quality bio-diesel per acre! Imagine … a bio-diesel oil with a gelling point of -78 degrees Fahrenheit.

SCC & Udder Health: Look at Equipment Issues (p. 12):
    William Gehm writes about equipment issues (specifically, milking equipment issue) as a factor in the long-running failure to get on top of mastitis problems.

Dairy Commodity Demand Strong: More Price Increases Expected (p. 13):
    Cheese sales seem stronger. Buyers can’t find enough nonfat dry milk. Dairy commodity users are stocking in extra inventories, when they can find them, in anticipation of even higher prices.

Dairy Livestock Replacement Prices (p. 14):
    Flat to weak. Money is tight in dairy country. Good thing cull prices are strong.

Two Recent Shocking Dairy Statistics (p. 14):
    As of July 31, 2012 USDA’s “Dairy Products” report found that manufacturers stock of nonfat dry milk had declined 32.3% from year-ago totals. What happened??? That big, 30,000 metric ton sale to Algeria in June-July 2012, which “cleared the decks” of any extra U.S. milk powder.

608(c) 18 discussion (p. 15):
    Pete Hardin details what’s ahead on the 608(c) 18 petition to USDA to raise farm milk prices. About 100 such petitions have been received. USDA’s come-back will likely be to ask for general or specific suggestions. Early suggestions from Hardin include: moving milk processed into yogurt to Class I status (with compensatory payments assessed for use of Grade A nonfat dry milk); and “farm-point pricing.” (Let the buyer pay all the freight off the farm. Failure of USDA to move quickly on these proposals (and likely others) should result in: effigy of Tom Vilsack, prior to November 6 elections; and formation of a dairy producers “guild.”

Dairy Faces Uncertainty Over Soybean Supplies, Prices (p. 16):
    U.S. soybeans may be in more trouble than the 2012 corn crop. This year’s soybean crop is coming in way below hopes. Soybean carry-over is limited. And export commitments are long. At least one analyst is projecting that without export controls, the U.S. will run out of soybeans some time next spring.

August 2012  Issue No. 397

Inside this months issue...

USDA Optimistically Drops 2012 Corn Yield to 123.4 Bu./Acre (p. 1):
    On August 10, USDA revealed its latest 2012 crop supply/demand estimates. Corn yields dropped 22.6 bushels/acre from the early July forecast. The Milkweed contends vigorously that USDA’s latest estimate is way too optimistic. Corn supplies will be way down, and prices far more expensive.

Feature Story: U.S. “All Milk Price” vs. Production Costs (Losses per Cwt. Jan.-June 2012) (p. 1, p. 3):
    See our “Story of the Month” here and the related Petition to USDA to Raise Milk Prices.

2012 Seed Corn Losses at Least as Bad as 2011’s; More Acres Planted (p. 2):
    We project a 40-50% loss of the anticipated U.S. seed corn harvest for 2012. That loss will be somewhat tempered by increased acreage plantings. USDA maintains no data base on seed corn acreage. More next month.

Slow Food Movement: No Farm Bill, Congress Heads Home (p. 2):
    Given what’s in front of them, it’s best that Congress took a summer vacation without the full House voting on the 2012 food and farm legislation. Great pressures will come forward in September to marry-up the farm bill proposals that have passed the U.S. Senate and House ag committees to Drought relief measures.

July 2012 USDA Milk Order Manufacturing Class Prices: Class III $16.88 (+$1.05) – Class IV $14.45 (+$1.21) (p. 2):
    At long last, the manufacturing milk prices for USDA’s federal milk order system are moving up. We see tremendous upside for milk price in the coming months – same for grain and forage costs.

150+ House Members Ask EPA to Waive Ethanol Mandate (p. 3):
    Dramatically reduced corn supplies – present and future – have inspired 156 House of Representatives members to write Environmental Protection Agency administrator Lisa Jackson to reduce or eliminate the fuel ethanol mandate while corn supplies are tight.

NMPF’s “Safety Net” Full of Holes (p. 3):
    The “Margin Insurance” program for dairy – as proposed in the current legislation in Washington, D.C. – is full of holes. Example: If dairy producers’ “margins” (milk prices vs. feed costs) turn down, the “every two month” windows (Jan.-Feb., March-April, for example) would mean long delays before producers ever saw any “insurance-type” payments for their losses.

Tough Decisions Facing Many U.S. Dairy Farmers (p. 4):
    Many U.S. dairy farmers face tough choices, as they’re caught in a swirl of low milk prices, high feed/forage costs, and Drought-reduced crops. What to do? In this long article, The Milkweed details how primarily emphasis should be placed upon getting the young stock through until next spring. A tremendous decline in dairy cattle numbers lies ahead. We emphasize the importance of maximizing asset value in the face of tough times and tough decisions. Come spring, the surviving diary animals will be worth a heck of a lot more than they are in late summer and fall 2012.

Swiss Valley Farms Equity Pay-Out Falls Way Short (p. 4):
    Swiss Valley Farms – a dairy co-op based in Davenport, Iowa – paid out only 10% of the anticipated, decade-old equities/retained earnings. No explanation to recipients was given for the low and slow pay-backs.

DFA Members Suffering Low Milk Payments in Many Regions (p. 5):
    In many parts of the country, DFA members’ milk checks are taking a terrible red ink bath. The co-op continues deducting marketing losses and stripping away premiums. “Biggest Losers?” DFA members in Utah, who were paid $3.38/cwt. BELOW the federal order Class III (cheese).

Plaintiffs’ Prove DFA’s Conduct Violated Sherman Act; Trial Set for November 6 (p. 5):
    The presiding federal judge in the Southeast dairy antitrust litigation declared that plaintiffs’ attorneys had proven that DFA’s alleged violations of antitrust laws adequately enough to proceed to trial.

SMA Failed Because DFA Gutted Integrity (p. 6):
    No dairy region of the U.S. has greater opportunity … nor have the producers’ milk checks in any region been more abused, than in the Southeast. In this article, The Milkweed details how the Southeast producers got into their current mess, and offers suggestions as to how to get out. In summary: the regional over-order pricing agencies have not served producers’ interests.

July’s Weekly Dairy Cow Slaughter Totals Rising (p. 6):
    We’re tracking USDA’s weekly dairy cow slaughter numbers – and volume is starting to rise fast above last year’s figures. No surprise.

Drought Lesson: Diversified Needed in Farm Bill – More “Safety Net” than Crop Insurance! (p. 7):
    Writer Julie Walker lays out a lot of details about the “big beneficiaries” of USDA crop insurance schemes: Wells Fargo Bank and several foreign-owned insurance firms. Lots of facts. Julie’s contention is that basing federal farm relief programs on “crop insurance”-type mandates is wrong-headed policy.

Last Dairy in Michigan’s Kalkaska County: Surviving & Thriving (p. 8-9):
    Megan Filhart – a Michigan college student – graces our pages with her first contribution. The Shetler family of western Michigan operates a 40-cow dairy, and processes their milk into fluid products, smoothies and custard-style ice cream. Sons Pete and Kaleb join their parents – George and Sally – and bring a lot of enthusiasm to this family enterprise. Milk from Shetler’s Family Dairy features low-temperature pasteurization, is packaged in glass bottles, and delivered to enthusiastic customers within a 60-mile radius.

Appeals Court Reverses Farmers’ Milk Powder Misreporting Lawsuit (p. 9):
    Very important! In 2009, four dairy farmer plaintiffs charged that milk powder price mis-reporting occurred in 2006-2007 by two major cooperatives – DairyAmerica and California Dairies, Inc. Those illegal actions deprived dairy farmers, whose milk is priced through USDA’s milk order system, of untold millions of dollars of income. In 2012, a lower federal court tossed that lawsuit. But on August 7, a federal appeals court in California reversed the lower court and concurred that the plaintiffs had legitimate claims to damages. (NOTE: The Milkweed broke this story in March 2007.)

Managing Drought-Stressed Corn for Dairy Cows (p. 10-11):
    Paris Reidhead reviews a lot of considerations facing dairy farmers, as they seek “salvage value” for their weather-stressed corn. Chopping up stands of corn with low grain yields as silage for dairy and beef cows requires a lot of careful considerations.

Could Drought & Heat Dethrone “King Corn”? (p. 11):
    Paris Reidhead visits a very important question: are weather issues threatening the reign of corn as the nation’s premiere agricultural crop? Hot weather and drought are ruining the U.S. corn harvest for the second year in a row. The future???

Attention Secretary Vilsack: Quite Praying and DO SOMETHING (P. 12):
    Pete Hardin challenges USDA Secretary Tom Vilsack to get off his butt and take needed actions. Examples: invoking 608(c) 18’s emergency milk pricing powers, emergency purchases of hamburger for school meal and nutrition programs, and allow Drought-stressed farmers to go “interest only” for USDA loans and guaranteed loans.

Dean Foods to IPO 20% of WhiteWave (p. 12):
    Mark Kastel of the Cornucopia Institute reviews and analyzes the curious doings at Dean Foods and its subsidiary, WhiteWave – following the firm’s recent conference call with investment analysts and recently completed second quarter finances. Dean Foods is spinning off 20% of WhiteWave investors, Gregg Engles will step down as Dean Foods’ CEO, but continue as board chairman. He’ll assume both CEO and board chair posts at WhiteWave. More next month!

Milk Powder Very Tight; Future Supply Worries Boost Cheddar Prices (p. 13):
    Pete Hardin reviews domestic and global dairy supply/demand factors. Milk powder is almost to obtain on a spot basis in the U.S. right now. U.S. Drought worries are boosting global dairy commodity prices. But watch out for the immense drought that’s hitting much of India’s agricultural regions! India is the world’s largest dairy producing nation.

Short Term: Cattle Stampede Towards the Golden Arches; Medium Term: Scarcity Will Skyrocket Livestock Values (p. 14):
    Short-term, a tremendous slug of dairy and beef cattle will head to slaughter, due to scarce forage and feed. Short-term, we see declined values for almost all ages of dairy livestock. This year could be the worst Drought since the 1930s – and comes at a time with little carry-over of grain or forage.

What’s ahead????? (p. 15):
    Pete Hardin projects the future – taking a tough look at this nation’s arrival at resource scarcity, when it comes to food. Thought provoking …

Corn Use for Ethanol Slows In Recent Weeks, But … (p. 16):
    The U.S. Energy Information & Renewable Fuels Assn. provides weekly data on corn use for ethanol production. Recent weeks’ use has dropped significantly – about one million bushels lower than year-ago levels.

July 2012  Issue No. 396

Inside this months issue...

July 2012: Critical Month for U.S. Food Supplies (p. 1):
    July 2012 is the most critical month in many decades, in terms of our nation’s food stability. Extreme drought extends across many key food-producing regions of the country. Corn reserves are very low. Seed corn supplies are zero.

USDA & White House Face Tough Dilemma on Corn Shortfall (p. 2):
    The federal government’s leaders face a tough choice: how to best cope with serious shortfall in the 2012 corn harvest. Private estimates are that the nation has already lost 20% of the corn crop (likely more). USDA’s July 10 report admits a 12% crop loss in the past month – to 148 bushels per acre. Will Washington reduce corn use in ethanol? Curtail exports? Doing nothing to curtail domestic, non-food use of scarce corn is a prescription for food security disaster.

June 2012 USDA Milk Order Manufacturing Class Prices; Class III $15.63 (+$.40) – Class IV ($13.24 (-$.31) (p. 2):
    Cheese milk prices have started back up. Butter-Powder milk prices have bottomed out in June, as those commodities’ prices start moving up.

U.S. Firms Underbid EU Nations to Gain Big Algerian Milk Powder Contract (p. 3):
    U.S. firms secured 100% of a 30,000 metric ton bid put out by Algeria for delivery in June-July 2012. We undercut EU firms. The sale should substantively clear out U.S. powder inventories … and prices have already started up. The global market for diary protein powders is weak, due to China’s reduced purchases.

Dairy/Ag Trade Mission to Russia Stalled (p. 3):
    Nothing has happened yet regarding a trade mission to Russia to try to iron out problems that have caused Russia to ban U.S. dairy imports for almost two years.

Kraft Foods’ Cheezy Patents: Lots of MPCs & Water (p. 4):
    For more than a decade, Kraft Foods has conspired to fill processed cheese products with low-quality Milk Protein Concentrates that absorb plenty of water!

DFA Lost $300 Million in Sale of NDH (p. 4):
    In courtroom testimony, a plaintiffs’ lawyer detailed that Dairy Farmers of America lost $300 million in the sale of National Dairy Holdings in 2009. That’s news!

Rising Grain Prices Would Blow Taxpayer Costs Sky-High Under NMPF’s Foolish “Gross Margin Insurance” Scheme (p. 4):
    Proposals for taxpayer-funded “Dairy gross margin insurance” in the current farm bill scheme would cost an arm and a leg, as weather drives up grain and forage costs. Taxpayers beware on this one!

Farm Bill Needs Recheck on Risk Management Transparency, and Money Flow (p. 5):
    Writer Julie Walker hits a big one here. She analyzes a Wall Street Journal article detailing how many of the big insurance companies handling USDA’s “Crop Insurance” are foreign-owned. She puzzles: “what could the 2012 drought cost the public?”

January-March 2012 Beef Imports Rose 26.7% (p. 5):
    As U.S. beef slaughter prices rose, beef processors turned to their oldest trick: imports. Canada, Australia, Mexico and little Uruguay showed significant gains in beef imports to the U.S. in 2012’s first quarter.

Southeast Class Action Trial, Postponed Again (p. 6):
    Defendant Dairy Farmers of America succeeded in kicking the can down the road again – the Southeast dairy antitrust case has been rescheduled to start on November 6, 2012. DFA has used tactics to delay that trial for nearly one and a half years. What’s DFA hiding?

Survival Strategies for Dairy Farmers in These Times (p. 7):
    Dairy farmers facing impaired crop situations should calculate promptly what estimated feed sources will be and how many animals they can carry over winter. We’re on the verge of serious shortages of grain and forage in the U.S.

“The Future is in Barley” (p. 7):
    Pete Hardin expands upon the miracles of feeding barley sprouts to livestock and poultry – but particularly dairy livestock. Weather shortages and moisture limitations mean some dairy producers must find alternatives to traditional feeds and forages.

2012 U.S. Corn Crop Imperiled by Drought, Record Heat (p. 8-9):
    See this issue’s “Story of the Month” here.

Can Organic Crops Defend Themselves Against Pests? (p. 10-11):
    Paris Reidhead focuses his talents on organic crops and their natural defenses against pests … along with many other considerations in the health soils to healthy plants theme he’s been detailing.

Is 2012 the “Year of the Bugs”? (p. 10):
    Paris Reidhead reviews several reasons why U.S. farmers are being plagued by insects and creepy-crawlies this year.

Armyworms Chew Through Crops in Western NY & PA (p. 11):
    Nate Wilson writes about farmers’ crop devastated crops in western New York, due to an invasion of armyworms.

Organic Watergate Unfolding at USDA as Rules Bent (p. 12):
    Will Fantle of the Cornucopia Institute writes about that organization’s cutting-edge efforts to shine light on widespread abuses of rules by USDA. These abuses include improper appoints to the National Organic Standards Board and that board’s approval of seemingly illegal materials for use in organic food processing. Cornucopia’s efforts were recently spotlighted in a big article in the July 8, 2012 issue of The New York Times.

Heat, Drought & Big “Powder Dump” Tighten Dairy Commodities (p. 13):
    Mother Nature is hammering present and future U.S. milk production, through intense heat and drought in many key areas of the U.S. Also, U.S. milk powder co-ops cut-prices to unload 30,000 metric tons of nonfat dry milk to Algeria during June-July. That “big dump” will dramatically constrict available milk powder supplies in coming months.

Drought Forcing Exodus to Slaughter – Lowering Most Dairy Livestock Values (p. 14):
    Crop conditions and milk prices started moving additional numbers of dairy cows to slaughter – lowering prices by at least ten cents per pound. That’s supply-demand at work. Exports of short-bred and open heifers to Russia are providing some price for those animals.

Saving dairy’s critical mass … (p. 15):
    Pete Hardin takes a long look at multiple failures by federal regulators that all seemed to start around 2000. These failures include: antitrust, food ingredients (MPCs), dairy commodity price manipulations at the Chicago Mercantile Exchange, and federal milk order shenanigans. Systemic failure for roughly the past twelve years leaves U.S. dairy farmers ill-prepared for what’s coming.

Core Power: Dairy Beverage Links Fair Oaks Farms Brands & Coca-Cola (p. 16):
    A new milkshake-type dairy beverage – aimed at persons who want restorative nutrition – has being jointly marketed by Fair Oaks Farms Brands and Coca-Cola. The immediate target: “Muscle Milk” – a degenerate product that contains virtually no dairy products. Dairy needs some innovative product development and marketing.

Exodus to Slaughter Starts: Second Quarter Dairy Cull Totals Accelerate (p. 16):
    Through June 16, weekly totals of dairy cull cows going to slaughter have climbed significantly above same-week totals for 2011. We’ll track this data, since culling should further quicken, due to weather and crop realities.

June 2012  Issue No. 395

Inside this months issue...

2012 is a “Weather Year … Long Way to Go (p. 1):
    Weather events in the next month-plus are critical for maintaining the nation’s delicate food reserves. The U.S. entered the 2012 planting/growing season with virtually zero projected carry-over of corn stocks and zero remaining seed corn. July Corn Belt temperatures (at pollination time) are particularly critical.

NZ MPC Imports Torpedoed U.S. Milk Prices (p. 1):
    We follow up last month’s findings of big Jan.-Feb. MPC imports every three years – that coincide with low milk price years for U.S. dairy farmers. Guess what? New Zealand is the source of virtually all those imports. And every third year, New Zealand dumps a load on us. We demonstrate how Kraft Foods’ research patents developed MPC-laden products and processes in the late 1990s and early 2000s. Heavy use of imported MPCs has held down farm milk prices.

Research: Calcium Supplements Dramatically Boost Heart Attacks (p. 2):
    Skip the Tums. Research reported recently in the British Medical Journal suggests that calcium supplements are responsible for distinctly higher levels of heart attacks among persons taking them. Sounds like dairy calcium is best!

May 2012 USDA Milk Order Manufacturing Milk Classes: Class III ($15.23 (-$.49) – Class IV Price $13.55 (-$1.25): (p. 2):
    The numbers tell the whole story. Declining dairy commodity prices in recent weeks continue to pull down farm milk prices. However, we may have hit bottom and are bouncing back.

Update on John Bunting’s Health; Contributions to his Family Welcome (p. 3):
    John has been moved to a rehab facility near Kingston, New York. His speech and movement are somewhat impaired. Persons wishing to send a get well card and/or a check to help out should write to John’s daughter: Abby Bunting Walley, 4000 East Brook Rd., Walton, NY 13856.

Class Action Complaints Filed vs. General Mills & Safeway Re: Use of Milk Protein Concentrate in Greek-Style Yogurt (p. 3):
    Finally … Class action lawsuits have been filed against General Mills (Yoplait) and Safeway (Lucerne brand) for illegal use of ingredients in yogurt. Much more to come on this issue, we predict.

U.S. Senators Question FDA Re: Unapproved Ingredients in Yogurt (P. 3):
    In 2012, four U.S. Senators have written the head of the Food and Drug Administration, demanding answers as to why that agency continues to fail to prosecute use of illegal ingredients in yogurt products. Most recently, Senators Gillibrand (NY), Lugar (IN) and Coates (IN) have all written FDA. In late January, Vermont Senator Bernie Sanders write a letter asking similar questions. Four-plus months later, Sanders has yet to suffer the grace of a reply.

OIG Report Faults USDA’s Meat Plant Inspections (p. 3):
    Federal meat plant inspectors are failing their jobs. A recent study by USDA’s Inspector General finds many inspectors – for many reasons – fail to inspect meat slaughter and processing plants on a daily basis, as mandated by law.

DFA’s 2011 Financial Audit Defies Accepted U.S. Accounting Principles (p. 4):
    Contriving to claim a profit for 2011 – when in fact DFA netted a $40 million LOSS – has the nation’s largest dairy cooperative side ways with its accounting firm. The Milkweed analyzes DFA’s 2011 financial statement and concludes that are pretty ugly at this point.

DFA CEO “Tricky Rick” Smith’s Long History of Audit Prevarications (p. 5):
    DFA CEO/President Rick Smith has a problem: leveling “bad news” in the audit of the cooperative he’s heading. We discuss Smith’s long history of this problem, dating back to is days with Dairylea Co-op.

Dairy Farmers’ Comments at Southeast Milk Litigation Hearing (p. 5):
    Julie Walker reports on the May 15, 2012 hearing in the Southeast dairy antitrust litigation. That day, plaintiffs had their chance to tell their stories to the federal judge presiding over this trial.

Some Recent Months’ Cheese Contains Serious Quality Defects (p. 6):
    Too much long-distance, distress milk … too many “hot” starters used means quality problems for some cheeses in the U.S. in recent months. The U.S. is sitting on record quantities of sub-quality cheese.

USDA Rules Seem to Disallow Legal “Pink Slime” Use In “Chopped Beef,” Ground Beef” and “Hamburger” (p. 7):
    Oops. It’s the law. It’s illegal to sell ground beef or hamburger containing “Pink Slime” in the U.S., according to USDA definitions of chopped beef, ground beef and hamburger. Clearly, ground meat products that have contained imported beef were improperly sold to consumers.

Iowa State Study: LFTB (“Pink Slime”) = Low Quality Protein (p. 7):
    Research conducted at Iowa State University reported that “Pink Slime” contains a bit more than 10% quality proteins, compared to beef chuck. LFTB also contains more blood proteins and connective tissue than ground beef chuck.

Feature Story: Lean Beef Trim Imports (Used for “Pink Slime”) = 40%-50% of All U.S. Dairy Cull Cow Meat in 2011 (p. 8-9):
    Read here how cheap beef imports from inadequately inspected foreign meatpacking plants are putting a lid on dairy cull cow prices in the U.S.

Biotechnology Causes “Devil’s Domino Effect” In Food Chain (p. 10-11):
    Well, writer Paris Reidhead really did it this time! He has composed an encyclopedia tracking unhealthy soils (due to chemicals) all the way through to unhealthy humans. This article represents a “life statement” by this great writer.

DMI Budgets Paltry $2.1 Mil. for 2012 Dairy Import Promotion Fee (p. 12):
    When the U.S. dairy promotion fee was expanded to cover imports, NMPF CEO Jerry Kozak claimed import promotion fees would bring in $6-$7 million annually. For that deal, Kozak got Congress to change U.S. laws, disallowing use of U.S. dairy farmers’ promotion dollars to promote U.S.-produced dairy products. Now, it looks like import fee revenue will only generate $2.1 million – only a few hundred thousand dollars more than Jerry Kozak’s salary.

“Winter/Spring Flush” Ends; Milk Tighter, Blocks & Butter Prices Rise (p. 13):
    Pete Hardin takes a look at the current dairy marketing and supply/demand picture, determining that the worst is over. Some dairy commodity prices are starting back up, after a late winter and spring that strained many sectors of the dairy industry.

Dairy beef: problem & opportunity (p. 15):
    After detailing the negative impact on Lean Beef Trim imports (used in “Pink Slime”), Pete Hardin details strategies for dairy farmers – individually and in groups – to gain more value from direct sales of live cattle and frozen processed meat.

Cheap Proteins, Junk Food, Health & “Free Markets” (p. 15):
    Pete Hardin details how government agencies’ failed oversight of food safety Issues and nutrition leads to health problems. In the current atmosphere of “less government,” failure to assure food safety and integrity leads directly to U.S. human health and medical issues.

In “Bad Years,” NZ Jan.-Feb. MPC Imports Jumped 107.2% (p. 16):
    We demonstrate, using a multi-colored graph, how New Zealand MPC imports – every three years – skyrocket in January-February. Those years are “bad milk price years” for U.S. dairy farmers.

May 2012  Issue No. 394

Inside this months issue...
MPC/Casein Imports Peak Early in Low Milk-Price Years (p. 1):
    Read the first of our two “Stories of the Month” here.

Current Dairy Supply/Demand Picture Downright Ugly (p. 1):
    In mid-spring 2012, the U.S. is awash in raw milk supplies. Milk powder inventories are building rapidly. Long-distance hauls of milk from both the East and West Coasts are finding low-ball prices paid at Midwest dairy manufacturing plants (-$6 to -$7 per cwt.).

John Bunting Suffers Strokes, Undergoes Brain Surgery (p. 1):
    The Milkweed’s “right-hand man” – John Bunting – is hospitalized, recovering from two strokes and brain surgery. We’ll keep folks posted on our Web site home page – www.themilkweed.com

“Good News Department” (p. 2):
    The shelf if pretty empty. The spring flush has either peaked early or started to recede. And cull cow prices are high, due to a shortage of beef.

April Class III Price $15.72 – Class IV $14.80 (p. 2):
    Falling dairy commodity prices are generally pulling down manufacturing milk prices in the federal milk order program. More to come, likely.

Big Export Sales to China Reducing U.S. Corn Supply (p. 3):
    In recent weeks, China has purchased large volumes of U.S. corn. Some of these purchases are for shipment this marketing year (by August 31). Other sales are for the following grain marketing year. Remaining stocks of grain are running scarce. USDA’s latest grain analysis – issued May 10 – shows an anticipated 18+ bushel per acre gain in this year. Price-wise: USDA projects cash corn markets will be $4.20 to $5.00 per bushel. We’ll see …

Negotiations Pending Re: Russian Embargo of U.S. Dairy Products (p. 4):
    For nearly two years, Russia has embargoed U.S. dairy products – in a dispute over animal health certification, details of which are vague. A team of U.S. negotiations are trying to schedule a trip to Russia to iron out these problems. Russia is the world’s biggest importer of cheese and butter.

U.S. Dairy Import Discussions Far Along with China (p. 4):
    In April 2010, China enacted a ban against U.S. dairy imports – perceived as a strategy for some strange reason. Negotiations are ongoing … so are exports to China.

ERROR! USDA/AMS Goofs Whey Price for Week of March 31 (p. 4):
    For the first week of USDA’s new dairy price data collection, the AMS goofed up by four cents per pound on whey prices. The error was not acknowledged until three weeks later.

Farm Bill Events – The Right Progress, or Not? (p. 5):
    Writer Julie Walker updates details on dairy’s portion in the 2012 farm bill discussions. It’s doubtful that – in a big election year – a farm bill will pass. That’s probably good. Also, Julie lists a long array of questions that she thinks ought to be asked regarding the dairy provisions of the farm bill.

Protein Imports Disrupt U.S. Dairy Markets, Weaken Producers (p. 6-7):
    Our other “Story of the Month” can be read here.

Greek-Style Yogurt Sparking U.S./Canada “Border War” (p. 7):
    Chobani yogurt – the most successful consumer product launch in U.S. dairy industry history – wants to sell product in Canada. But yogurt giants Dannon and Yoplait want the Canadian government to impose a 200+% import surcharge. Meanwhile, “smuggling” of Chobani yogurt from the U.S. to Canada is going on.

In-Depth Research of Ground Beef Controversy: Facts Don’t Support Claims of “Safety” for LFTB (p. 8-10):
    Writer Paris Reidhead has exhaustively researched the LFTB (“pink slime”) details and lays out a comprehensive history of what’s evolved as a big ground beef battle between meat processors and consumer groups. Most of the material used in LFTB in the U.S. is imported trim. Disgusting stuff, this ammoniated mash from slaughterhouse cutting room floors … domestic and otherwise.

Holsteins Now Dual-Purpose Breed: Dairy/Beef (or Beef/Dairy?) (p. 10):
    Holstein bull calves are bringing more than grade Holstein heifer calves at many auctions. Light-weight Holstein heifers are being bought to go into beef feedlots. Many dairy cows’ value is primarily for hamburger right now. Pete Hardin explains how the Holstein dairy cow has become a dual-purpose breed.

Organic Promotion Check-off Proposal has Farmers Wary (p. 11):
    A processor-dominated trade group – the Organic Trade Association – is proposing an across-the-board organic foods promotion board, overseen by USDA. Many farmers are skeptical, given the track record of USDA-managed agricultural promotion groups. Sounds like another tax …

DFA/DMS Dilemma: Can’t Assess Non-Members as Marketing Losses Climb (p. 11):
    Just about everything is going wrong for DFA and its marketing clone, Dairy Marketing Services. Huge losses are piling up as the pair tries to get rid of surplus milk from coast to coast. DFA can pass on these marketing losses to co-op members (called “reblends)), but not to “independent” producers whose milk is marketed by DMS.

Some Southeast Producers Confused by Milk Marketing Details (p. 12):
    As farmers submit milk marketing volumes to collect claims in the Southeast dairy antitrust lawsuit, they’re encountering problems and confusion. Some DFA members are learning that the co-op marketing some of their milk in Florida, but the farmers never got any extra money! Now, they can’t collect on those marketings because the milk volume was not pooled on either Order 5 or Order 7.

On NAIS, National Milk Producers Sings Same Old Song: To Heck with Farmers (p. 12):
    Writer Mary Zanoni explains how the dairy co-op lobby – National Milk Producers Federation – is sneakily pushing is agenda of mandatory, electronic identification for dairy cows. Why???

Dairy Commodities in Surplus, Under Several Downwards Price Pressure (p. 13):
    Egad. Lots more milk than anyone needs is stressing truckers and dairy manufacturing plant workers. Nonfat dry milk is piling up. Dairy exports are weak, both volume- and price-wise.

Too Much Competition? DFA Running Backwards in Ohio (p. 14):
    “DFA is all done in Ohio.” That’s what several folks are saying, following many setbacks for DFA’s milk marketing in the Buckeye State. DFA members have lost virtually all premiums. Milk has been dumped. Members building new farms are told the co-op won’t take their milk. What’s wrong? Among other items, Ohio is too competitive for the nation’s largest dairy cooperative.

Why? Why Not (Selected Short Subjects) (p. 15):
    Pete Hardin let’s off a few short bursts on short-term “helps” for the dairy surplus problems, the evils of “Free Trade,” and DFA’s failure to provide 2011 financial audits ot its members.

33 years complete, and … (p. 15):
    The May 2012 issue completes 33 years of continuous publication for The Milkweed. Editor/publisher Pete Hardin looks back and looks ahead.

Closer Look at Klondike Cheese’s “Continuous Coagulation” System (p. 16):
    We follow up last month’s article about Klondike Cheese’s Feta cheese production/marketing with a photo essay detailing the German-made, continuous coagulation system. Imagine! A cheese curd making system without stainless steel sidewalls!

April 2012  Issue No. 393

Inside this months issue...

Supply/Demand Stressing Plant Capacities, Marketers & Prices (p. 1):
    In several regions of the country, farm milk is close to overwhelming manufacturing plant capacity. Milk output is rising. Retail demand for milk and cheese is down – same for global demand. What’s ahead? Keep your eye on the weather.

Lower Corn Inventories, More Acreage Planted (p. 1):
    We summarize recent USDA reports that show less carry-over corn inventory, more acreage to be planted, and reduced yields per acre. Corn seed inventories are down to zero, at best.

February 2012 MILC Payout: $.39/Cwt. (p. 2):
    USDA’s FSA will pay out $.38 per hundredweight to dairy producers contracted in the Milk Income Loss Contract program for February 2012.

2011: DFA Lost $36.7 Mil. (p. 1):
    The headline says it all. No DFA audit here yet.

March Class III Price $15.72 – Class IV $15.35 (p. 2):
    The manufacturing class prices for USDA’s federal milk order system continued to decline in March – pulled down by lower commodity prices.

DMI Dumps REAL Seal® into NMPF’s Grubby Mitts (p. 3):
    The organization that controls dairy farmers’ milk promotion dollars has turned over management of the REAL Seal® to National Milk Producers Federation. This move is a sham – NMPF changed rules in the 2002 federal Farm Law to disallow use of dairy promotion dollars to promote U.S.-sourced milk and milk products.

Rumor: Nestle Studying Buying Dean Foods Purchase (p. 3):
    Global food giant Nestle is looking at purchasing Dean Foods – this nation’s largest fluid milk processor. Meijer’s Chain Buys Bareman’s Plant (Holland, MI) (p. 3): Meijer’s – the Grand Rapids-based retail super power – now has an in-house dairy plant for fluid milk and ice cream. Meijer’s bought the Holland, MI dairy plant of Bareman’s Dairy. Prairie Farms acquired Bareman’s trademarks and routes. This move hurts Dean Foods, which has been Meijer’s exclusive fluid milk supplier.

WI Governor Targets 30 Billion Lbs. of Milk as 2020 Goal (p. 4):
    Wisconsin governor Scott Walker announced a new set of grants to help state dairies grow milk production to 30 billion pounds in 2020. Problem is: current trend lines point to that goal in 2020, prior to any extra help.

Are Dairy Processors Overbuilding, Relative to Milk Supplies & Demand?? (p. 4):
    A survey of major dairy processing plant expansions and new constructs raises very serious questions: 1) Where will the farm milk come from to fill these plants?, and 2) Will adequate consumer demand exist to handle the additional processing? This situation is serious.

The Cheese Plant that Feta is Expanding … (p. 5):
    The third and fourth generations of the hard-working, inventive Buholzer family operate Klondike Cheese (Monroe, WI). They’ve recently expanded their plant to accommodate fast-growing sales of Feta cheese. It takes a tough Schweitzer to make Greek cheese.

NZ’s Fonterra Picks U.S. Dairy Pockets as Big Co-ops Slumber (p. 6):
    We take a good, running kick in the --- at the many antics of Fonterra – New Zealand’s dairy export behemoth. Fonterra takes advantage of the U.S. dairy industry, coming and going.

Public Disgusted by USDA Allowing “Pink Slime” in Hamburgers (p. 7):
    A big food fight blew sky-high in March, when a Texas mother filed an electronic petition to USDA Secretary Tom Vilsack, seeking to stop putting 15% “lean finely textured beef” in School Lunch ground beef. After the initial public and media uproar, the “cowboys” of the beef industry went on the counter-attack, pulling in many allied politicians and university experts.

April 30 Deadline for SE Producers’ Antitrust Claims (p. 7):
    Dairy farmers in the Southeast – anyone making milk from 2001 to 2010 in federal milk orders #5 and #7 – must register by April 30 with the appropriate firm in order to qualify for settlement payments from Dean Foods. Videos Detail Southeast Dairy Antitrust Case Allegations (p. 8-9): Our story of the month.

Feature Story – Videos Detail Southeast Dairy Antitrust Case Allegations (pp. 8-9):
   
This month we feature transcripted highlights of videotaped depositions presented January 20, 2011 at the Southeast dairy antitrust litigation cases in U.S. District Court for the Eastern District of Tennessee (Greeneville Division). Read all about it here.

High Sulfur Content in Corn Distillery By-Products Harming Cows’ Health (p. 10-11):
    Writer Paris Reidhead digs deep into how use of sulphuric acid in corn for ethanol processing has created higher levels of toxic sulfur in corn ethanol by-products fed to dairy cows. This story is one of Paris’ finest research efforts ….

IDFA 2010 Execs’ Salary Data: Connie Tipton Grossed $1.336 Million (p. 11):
    Data gleaned from the 2010 IRS Form 990 shows International Dairy Foods Assn.’s top executive – Connie Tipton – grossed $1.336 million in total compensation in 2010. A whopping $758,000 of that amount was for “retirement and other deferred compensation.”

NY Myth: Increased Yogurt Plants Boost Producers’ Net Income (p. 12):
    Writer John Bunting takes a deep look at federal milk order data to s how big increases in farm milk processed into yogurt in the Northeast have not boosted dairy farmers’ net share of milk revenues. Hauling costs for milk sent to yogurt plants are eating up any income gains.

Gavilon’s Milk Powder Strategies Confusing (p. 12):
    Gavilon – a major commodities trader – is confounding dairy commodity players with big purchases of nonfat dry milk, while selling at prices seemingly lower than what the firm is paying for products. Gavilon is owned by investors including zillionaire George Soros.

Dairy Livestock Price Summary (p. 13):
    Dairy livestock prices are steady, at best. Big decline in springer prices in some western markets. Cull cow prices continue to strengthen.

Aquentium’s Ozone Technology Enhances Results for Fodder Food Growers (p. 13):
    Aquentium is shifting its patented ozone-based sanitation systems to applications that include forage fodder production. Interesting.

Farm Milk Supply Overwhelming Plants, Dropping Cash Markets (p. 14):
    Pete Hardin’s dairy commodity review this month finds little good news, except that American cheese inventories were lower in February 2012 than in January 2012. Milk supplies are pushing manufacturing plants’ daily capacities to the max in several regions of the country. Milk powder supplies are burdensome.

DFA’s press release on 2011: profit or loss? (p. 15):
    A first read of DFA’s March 21 press release announcing the co-op’s 2011 financial results includes the phrase, “ … net income of $40.2 million for 2011 …” If one reads on, nebulous words talk say, “adjusted to include a “76.9 million non-cash loss …” First impression is that DFA made $40.2 million last year. In fact, DFA lost $36.9 million. Why is CEO/President “Tricky Rick” Smith up to his prevaricating ways? Is DFA in financial trouble – particularly as massive potential lawsuit liabilities loom?

Ground beef furor needs more facts (p. 15):
    Pete Hardin lists details that are needed before a reasoned opinion may be reached regarding the “pink slime” furor that’s infected the ground beef sector.

March 2012  Issue No. 392

Inside this months issue...
E
asy Winter (More Milk) + Reduced Sales = Lower Milk Prices (p. 1):
    Early in 2012, both supply and demand are going in the wrong directions. An easy winter means more milk per cow. And Pete Hardin reviews several measures of fluid milk sales data to conclude that those numbers are troublingly down.

Interpreting New 400,000 SCC Rule: LOWEST Monthly Test Will Be OK (p. 2):
    The way the rules are being interpreted, USDA’s new dictates about maximum monthly 400,000 SCC counts may be just a bunch of hokum. Raw milk buyers may take repeated samples and choose the lowest sample as the official test.

Whey Prices Shaky: Chinese Purchases Declining? (p. 2):
    More milk processed into cheese … and slowing global demand … mean the whey complex price structure is shaky.

February Class III Price $16.06 – Class IV $15.92 (p. 2):
    Lower dairy commodity prices mean reduced values for farm milk processed into cheese and butter-powder.

Dairy Producers: Gear Up for MILC Payments Soon (p. 3):
    USDA’s “safety-net” payments to contracting dairy farmers for the Milk Income Loss Contract (MILC) program will probably start in March or April. Producers need to be sure that they are signed up and that all information is current as their local FSA office.

CDC Report Grossly Distorts Raw Milk Health Issues (p. 3):
    The federa1 Centers for Disease Control (CDC) recently issued an incredibly biased analysis of raw milk-caused human diseases. Among other errors, CDC blamed raw milk cheese health problem on raw milk. And CDC even counted disease outbreaks in foreign countries!

Casein Imports Rose 30% in 2011 (p. 3):
    Casein – a dairy protein import – climbed 30% in 2011. Casein binds up a lot of water for food processors.

Continued, Blatant, Illegal Cheese Labeling by JS Brands (p. 4):
    Despite another complaint by The Milkweed … and another warning letter from Wisconsin’s agriculture department, JS Brands of Wisconsin and Weyauwega Stary Dairy continue to put illegally-labeled cheese products on supermarket shelves in Wisconsin.

Kraft Foods Cheese Div. Profits Up in 2011’s 4th Quarter (p. 4):
    Despite the fact that frm saw a nice boost in profits in 2011’s fourth quarter, Kraft Foods’ management continues to complain about ingredient costs in dairy.

DFA Buys Guida’s – Connecticut Fluid Milk Processor (p. 5):
    Dairy Farmers of America (DFA) has purchased Guida’s Milk and Ice Cream Company – based in Connecticut.

What Does DFA’s Guida’s Purchase Mean to Relationship with HP Hood? (p. 5):
    DFA is HP Hood’s raw milk supplier. DFA now owns a competing fluid milk processor – Guida’s. What does that mean?

NJ Italian Cheese Firm Squeezes NY “Plain Faith” Producers (p. 6):
    Retired dairyman Nate Wilson has aggressively researched events surrounding non-payment for 96 days’ worth of milk in mid-2011 by a New Jersey-based Italian cheese company to dozens of “Plain Faith” dairy farmers in western New York.

2008-2010: Top 7 DMI Execs’ Total Compensation Rose About $278,000 Each (page 7):
    Our “Story of the Month” here.

Old-Fashioned Dairy Goodness in a Glass Bottle (pp. 8-9):
    We visit the Schrock family near Russellville, Kentucky. Willis and Edna Schrock (and their kids) operate JD Country Milk – processing “old-fashioned” milk in glass bottles. Demand for their milk and drinkable yogurt products is skyrocketing!

Consumer Price Index: Shoppers Pay More and More (p. 9):
    Writer John Bunting shows the historic and recent relationships among dairy farmers’, processors’ and retailers’ fluid milk returns. Guess who’s making out like a bandit.

Seed Corn Shortage: Mother Nature Not Entirely to Blame (pp. 10-11):
    Writer Paris Reidhead has done a lot of digging on U.S. seed corn issues, concluding in part that bigger seed corn companies are more at risk to Mother Nature’s vagaries than are small, locally-focused firms.

2012-Raised Corn Seed from Southern Hemisphere (p. 11):
    Pete Hardin details the logistical and natural problems associated with bringing seed corn raised in the Southern Hemisphere during the 2011-12 growing season for planting in the U.S. this spring. Headaches: USDA delays testing seed corn for mold and weed seeds; and poor germination from recently-harvested seeds.

Not Enough Seed Corn? Don’t Replant GM Corn Stocks. Monsanto Uses Spy Satellites to ID Illegal Plantings (p. 11):
    Farmers facing shortages of seed corn should NOT replant carry-over Genetically-Modified, patented seeds they harvested last fall. Monsanto altered the appearance of GM plants (when they are photographed from spy satellites). That’s how Monsanto catches “cheaters.”

Southeast Milk Litigation Nears Resolution with Dean Foods and SMA (p. 12):
    Julie Walker updates fast-moving events in the Southeast dairy antitrust case. Producers must file their claims for payments from the $145 settlement involving Dean Foods, Southern Marketing Agency and James Baird by May 1. ALSO … the New York Times has won legal access to video clips playing in a court hearing back on January 20, 2011. These clips were from depositions of defendants. ALSO … The Milkweed warns Southeast dairy producers to watch out for “Carpet-Bagging Manure Spreader Chasers” trying to sign up dairy producers for a big percentage of their antitrust pay-out.

Brave New World Challenging Conventional Wisdom: Alltech’s Global 500 (p. 13):
    Julie Walker reports from the December 2011 Alltech symposium in Lexington, KY. Interesting!

Commodity Prices Flat: Lots of Milk, Slower Domestic & Export Sales (p. 14):
    Pete Hardin takes a tough look at the U.S. dairy commodity marketing scene. An easy winter and declining fluid milk sales put stress on manufactured dairy product commodity prices.

The “Common Sense” Federal Dairy Plan (p. 15):
    Pete Hardin lays out his vision for appropriate future federal dairy policy – starting with encouraging as much milk production as feasible in regions where the population is located and where the water comes down free. Other proposals include: lumping fluid milk, cheese and yogurt milk into Class I in the federal milk orders; vigorous enforcement of federal food standards; committing USDA to a base level of purchases of dairy products and hamburger for hunger/nutrition programs; a producer/milk hauler security program (a 1% loan in the event of a handler default); and allowing dairy farmers to democratically vote whether they want to continue the national dairy promotion check-off.

Pay Close Attention to California’s Water Reserves (p. 16):
    We reprint to very recent maps detailing California’s reservoir levels (vs. normal) and the moisture content of the snow mass (vs. normal). Keep an eye on these items.

Jerry Kozak’s 2010 Salary/Compensation: $1,132 Million – Up $410,000 (p. 16):
    “His Arrogance” garnered total compensation from National Milk Producers Federation of $1.132 million for 2010 – an increase of over $400,000. We list the whole array of NMPF’s senior staffers’ compensation for 2010.

NMPF & USDEC Flip-Flop on “Free Trade” with NZ (p. 16):
    After many years, two of dairy’s most systemic organizations are finally making noises about the dangers of New Zealand’s Fonterra global dairy trading giant. For years, those two groups have snuggled up to Fonterra. Better late than never … maybe.

February 2012  Issue No. 391

Inside this months issue...

Dairy Commodity Price Drops Mean Tough Months Ahead (p. 1):
    All three major dairy commodities (Cheddar, butter, and nonfat dry milk) have gone below $1.50 per pound. And whey prices are softening. These lower commodity prices translate into several dollars’ decline in farm milk prices, within a month or two. A major problem: expanding milk supplies and shrinking fluid milk demand. Those factors – in tandem – are helping drive down cheese prices.

Too Much Milk? NW Dairy Assn. Creates April-Sept. Bases & Over-Base Penalties (p. 1):
    The predominant farm milk buyer in the Pacific Northwest -- Northwest Dairy Assn. – has announced establishment of April-September production bases for members. Worries are that farm milk will overwhelm dairy processing plants’ capacities, if the co-op doesn’t put a cap on member output. Two levels of penalties will hit “over-base” milk.

No Profits. No Loans. Bankruptcy Reorganization Won’t Work (p. 2):
    Writer John Bunting details the brutal situation facing many California dairy producers right now, as milk prices tumble and expenses stay strong. Attempting a bankruptcy filing is not an option, experts tell Bunting, because no honest plan can be devised that projects favorable returns from estimated milk prices and grain/forage costs.

2012 Farm Bill: “All About Insurance.” (p. 2):
    With the American Farm Bureau Federation now supporting a “risk management” insurance-based federal farm policies for the 2012 farm bill, concerns are that the interests of insurance companies (like AFBF) will drive federal agriculture policies.

December Class III Price $17.05 – Class IV $16.56 (p. 2):
    The headline says it all. Manufacturing class prices in federal milk orders are headed down.

Southwest Super Pool (GSA) Collapsed on January 1, 2012 (p. 3):
    Lone Star Milk Producers quit membership in the Southwest co-op super pool on January 1, 2012. This article cites five reasons Lone Star detailed for this move in a recent letter to members.

Something Bigger Brewing? Southwest Super Pool Chaos May Hit Southeast (p. 4):
    This long article explains how the January collapse of the co-op super pool (over-order pricing agency) in the Southwest could spread to hit the Southeast. Many of the players are the same in both regions. The Milkweed’s analysis: a net set of dairy marketing relationships is being born, with the long-term bully (DFA) pretty much sitting on the sidelines.

400,00 SCC Limit Details Look Stranger & Stranger (p. 5):
    In January, new rules kicked in stipulating that dairy producers whose milk ends up in products shipped to the European Union must meet three-month, rolling average Somatic Cell Counts under 400,000 parts per milliliter. USDA has set up a series of “indulgences” (actually $136/hour x 2 hours) payments to USDA if a farmer goes over the SCC limit but is trying hard to do better.

Schools’ Ban on Flavored Milk Products Hammers Class I Use in California (p. 5):
    Starting last fall, several school districts in California (including Los Angeles) banned sales of flavored milk beverages – due to concerns about childhood obesity. We analyze October 2011 sales trends for flavored milks in California – finding a significant decline that accounted, in net, for two-thirds of all fluid milk declines in California that month.

Early DOJ Agriculture Antitrust Rhetoric Stalls (p. 5):
    Despite some strong language early on in the Obama administration … and a few successes … the Antitrust Division of U.S. Department of Justice is pretty much on low cruise control regarding agricultural antitrust issues right now.

Losses Force $158/cwt. DFA December “Reblend” in Mountain Area (p. 6):
    Without clarification, DFA members in Utah, Idaho and Colorado opened their final payments for December 2011 milk – only to find deductions totaling $1.58/cwt. (excluding normal DFA deducts of up to 36 cents per cwt. DFA has deducting tremendous amounts of marketing losses since Leprino Foods opened its new cheese plant at Fort Morgan in late October.

Whey 101: From Hog Slop to a Gold Mine (p. 7):
    Here’s a general evolution of whey pricing/marketing events … dating back to the early 1980s and FDA’s approval of use of whey products in human foods.

Declining Whey Prices Mean Lower FMMO Milk Prices (p. 7):
    After building strength for more than two years, whey prices are softening. Declining whey values mean lower Class III (cheese) and perhaps lower Class I (fluid) milk prices in the federal milk order system.

Feature # 1: Repeated Illegal Marketing of Imports as “Wisconsin Cheese” (p. 8):
    One of our “articles of the month” here.

Northeast Yogurt Plant Expansions are Mind-Boggling (p. 9):
    Writer John Bunting traces the growth of Greek-style yogurt and the impact that production of that specialty yogurt has driving the Northeast yogurt industry.

Tordon: Toxic Vietnam-era Herbicide Still Sold to U.S. Farmers (p. 10):
    Writer Paris Reidhead has meticulously researched the history of “Agent White” –a powerful Vietnam era herbicide that was widely used in Southeast Asia. Tordon is still sold to U.S. farmers

Feature #2: Comparison of Selected 2011 Milk Prices in Upper Midwest For 15 Farm Milk Buyers – Base and Mailbox Prices.
    See our second “Story of the Month” here.

Organic Dairy Producers in Price Squeeze (p. 12):
    Mark Kastell of the Cornucopia writes about tough cash-flow conditions facing organic dairy producers. Recently, two major buyers raised organic milk prices by about $2.00 per cwt.

Dairy Cattle Replacements (p. 13):
    In some markets, prices for springers and heifer calves are up.

Dairy Commodity Values Decline Across the Board (p. 14):
    Editor Pete Hardin takes a look at the “not so pretty” dairy commodity price structure. Lots more farm milk + reduced Class I demand have translated into a lot more cheese. All major commodity prices are below $1.50 per pound.

“Straight Talk” (p. 15):
    Pete Hardin’s “opinion page” summarizes the following: “Dairy pricing/marketing system is broken,” “War drums beating …and “Concerns about “Insurance-based U.S. farm policies.”

October 2011: California’s Organic Fluid Milk Sales Climbed 15.4% (p. 16):
    Now there’s some good news! Organic demand is strong, and marketers are having tough times finding increased, needed supplies.

“Jay Robb Whey Protein” Retails for $36.56 Per Pound! (p. 16)
    A fancy-pants whey protein powder (approx. 83% whey protein) sells for $2.49 for 30 gram packages. Valuable stuff.

January 2012  Issue No. 390

Inside this months issue...

The Really Big Issues Facing Dairy in 2012 (p. 1):
    Pete Hardin lists his perceived eleven biggest issues facing dairy in 2012. #1? What else … the weather.

Lactose Emerges as Important Residual Value in Milk (p. 2):
    John Bunting details how lactose – milk sugar – has gained value and export use in recent years. Interesting …

Global Dairy Trade Auctions: Up and Down (p. 2):
    Several dairy commodities’ prices were up in recent Fonterra-sponsored electronic auctions – buttermilk powder, Cheddar, and milk protein concentrate. Meanwhile, Skim Milk Powder prices declined.

December Class III Price $18.77 – Class IV $16.87 (p. 2):
    Declines in dairy commodity prices in recent months are pulling down manufacturing class milk prices in USDA’s federal milk order system.

DFA’s 11 Dairy Import Licenses Revealed (p. 3):
    Who else, but our friends at Dairy Farmers of America? The nation’s biggest dairy farmers’ cooperative holds 11 dairy import licenses … despite receiving subsidies to export U.S. dairy products.

1/6/12 Wall Street Journal Finally Reports Seed Corn Shortage (!) (p. 3):
    At long last, four months after The Milkweed first reported the story in depth, the Wall Street Journal finally smelled the coffee and reported the U.S. 2011 seed corn crop failure – estimating a 25-50% loss.

Farm Bill in 2012? AFBF Wants Insurance-Based Programs (p. 3):
    The American Farm Bureau Federation – an insurance consortium disguised as a farmers’ organization – announced it is now looking hard at a “risk-management insurance” package of programs to undergird farm programs in the upcoming farm legislation debate. What would one expect an insurance company to do???

Feature Story: “Stuff” (Sometimes Illegal) In Cheese Boosts Volume by About 30% (P. 4):
    This month’s feature story looks at how U.S. cheese yields in recent years appear about 30% greater than one would expect from the volume of farm milk dedicated to cheese vats. Read the full story here.

Fraudulent: Electronic Deed Registry Threatens U.S. Housing Market (p. 5):
    In one sentence: The Mortgage Electronic Registration Systems (MERS a firm created to “bundle” packages of residential mortgages for resale and holding more than 50% of all residential mortgages in the United States – has failed for many years to properly register and pay fees to counties for title registration changes.

USDA’s Final Report on 2011 Crop Production: Corn/Soy/Wheat/Hay/Cotton Harvests All Down (p. 5):
    USDA’s final report for 2011 crops found declines in virtually every major and minor crop in this nation.

Raw Milk: A Surprisingly Potent and Cheap Fertilizer (p. 6):
    Paris Reidhead writes about experiments by farmers in Missouri and Nebraska that have demonstrated raw milk’s value as a fertilizer. Only three to five gallons of milk per acre are needed. When combined with fish emulsion, the impact on soil fertility is amazing.

Federal Judge Refuses to Certify Class in Northeast Antitrust Case (p. 7):
    Ouch. Federal Judge Christina Reiss declined to certify the class sought by plaintiffs in the Northeast antitrust trial that’s based in Burlington, Vermont. Reiss seemed to leave the door open for plaintiff’s attorneys to try again.

Foul-Up in Antitrust Payouts to Northeast Producers (p. 7):
    The firm in charge of mailing out payments to Northeast dairy farmers who qualified for compensation under the $30 million settlement from Dean Foods has goofed. Some checks sent out near Christmas were too high, others were too low. A second round of checks will be issued, pending the court’s approval.

Thirsting for Justice in America’s Dairyland (p. 8-12):
    In a blockbuster story, organic farmer Tony Ends writes about the battle by a local township to try to enforce water quality monitoring for a big dairy that’s a proven stream water polluter. This case is now awaiting a decision from the Wisconsin Supreme Court. Read the entire story here.

Organic Milk Shortages Reflect Producer Pricing Inequities, Opportunities (p. 12):
    Particularly in the Northeast, organic dairy producers are bleeding red ink, due to high grain costs. This article lays out the players, the inequities and the opportunities.

Organic Grain Guru: Milk Producers Need $5 More (p. 12):
    Mary-Howell Martens, who co-owns Lakeview Organic Grain (Penn Yan, New York), expresses her insight that organic dairy producers in the Northeast need another $5 per cwt. in milk payments, to cover their feed costs.

Dairy Commodity Scene Ugly: No Place to go but Up? (p. 14):
    Pete Hardin covers the dairy commodity price and marketing scene. Prices are down, seriously down.

Let me share a few serious thoughts … (p. 15):
    Editor Pete Hardin professes why he’s lost his patience with dairy’s fools, incompetents, and grand larcenists. The lack of integrity of certain ingredients in products such as cheese and yogurt leave little tolerance for claims that “surplus” cheese is causing low farm milk prices.

Winter Brewing Global Corn Supply Worries for 2012 & Beyond (p. 16):
    Unduly hot, dry weather in corn-growing regions of South America is causing additional nervousness about global grain stocks.

Federal Ethanol Subsidy Mercifully Kaput (p. 16):
    On December 31, 2011, the 45-cent per gallon federal ethanol blending subsidy died. That event will safe U.S. taxpayers about $5-$6 billion dollars annually.

December 2011  Issue No. 389

Inside this months issue...

Maelstrom of Current Events Creates Tremendous Uncertainty (p. 1):
    A huge number of critical global and national events have created tremendous uncertainty in the financial and food worlds. No conclusions.

35-Year History of Dynamic Dairy Consumption Trends (p. 1):
   
The Order 32 federal milk order’s staff published, in October, a wide range of charts depicting trends in per capita dairy product consumption, from 1975 to 2010. We reproduce those charts and analyze the spectacular dairy consumption changes in that 35-year period, from the demise of fluid milk sales to skyrocketing demand for cheese and yogurt.

FMD in China, East Asia: Big Threat to U.S. Livestock Producers (p. 2):
   
Major outbreaks of dreaded Foot and Mouth Disease are being reported in several Asian nations. Yet the U.S. government incautiously is pushing for more “Free Trade” deals with that region. FMD has been labeled this nation’s biggest bioterrorism threat.

Federal Budget “Supercommittee” Fails Task; Secretive Farm Package Derailed (p. 2):
    The committee of six Republican and six Democratic elected officials – charged with cutting federal deficits – failed to come to any agreement by the November 23 deadline. Good news: the secretive federal farm policy package fast-fried for approval by that committee has died.

November Class III Price $19.07 – Class IV $17.87 (p. 2):
    Take a good luck, these prices will decline next month.

Incredible Market Instability for U.S. Food Producers (p. 3):
    Bundle the European debt woes and instability of the EU’s big banks, along with the failure of MF Global (an investment and brokerage firm) … and you’ve got a mess that has destabilized financial and commodity markets world-wide.

IDFA’s Rep. Submits Bill to Kill Federal Milk Orders (p. 3):
    Illinois Congressman Joe Walsh – a family-values Republican who owes his ex-wife over $100,000 in unpaid child support payments – has submitted H.R. 3372 into the House legislative hopper. This bill would kill off federal milk orders. He also wants to get rid of the U.S Postal System – a move that would harm his rural constituency.

Milk Processed into Products Headed to Europe Can’t Exceed 400,000 SCC by Early 2012 (p. 4):
    USDA’s Agricultural Marketing Service has dictated to the dairy industry that, effective in early 2012, dairy farms’ milk processed into products sold to the European Union nations, must meet strict EU somatic cell count (SCC) rules. That means a rolling average of less than 400,000 SCC. This mandate is the third time that the government has tried to force this change. Only good news: the EU milk quality rules will not apply to all dairy producers – only those whose milk ends up in products headed to EU.

Computerized SCC Testing Far from Perfect (p. 4):
    Computer milk quality testing equipment has a 10% margin of error for somatic cell count. That’s a wide margin of error, when dairy farmers’ ability to ship milk is calculated atop new rules from USDA.

Natural Gas Fracking “Wealth” – At a Terrible Cost? (p. 5):
    Environmental, health and legal problems are festering in areas of New York, Pennsylvania, and Ohio where deep-well drilling for natural gas – using an array of secret chemicals – is taking place.

Prairie Farms Anticipates Lower Earnings, Split Pay-Out of 2004 Patronage Dividends (p. 5):
    Prairie Farms’ management estimates earnings for its recently concluded fiscal year would be about 85 cents per hundredweight on members’ milk. Prairie Farms will pay out its 2004 revolved earnings in two installments – citing tighter current earnings.

Hilmar Cheese Refusing to Provide Price Data to CDFA (p. 5):
    The cheese firm producing 70% of California’s Cheddar has told the state ag department to “take a hike” regarding data used to set monthly producer payments for 4b (cheese) milk.

High Grain Costs (Around $700.Ton) Threaten Northeast Organic Milk Supply (p. 6):
    Organic dairy producers in the Northeast are facing terribly high costs for purchased grain – a factor that threatens both profits and continuation of their farms. Will there be a confrontation between Northeast organic dairy producers and the buyers of their milk???

Berry College Dairy: Branding a Small Jersey Herd, Building Business Entrepreneurs (p. 7):
    Writer Julie Walker visits Berry College (Rome, Georgia) and describes that small school’s wide-ranging dairy program. The college instructs students in the areas of dairy herd operations, marketing of cheeses, and, now agri-tourism. Interesting!

Feature Story: Milk Prices Have No Correlation to Cheese Inventories (p. 8-9):
    John Bunting explains how farm milk prices have demonstrated zero statistical correlation with USDA’s reported cheese inventories – ever since Milk Protein Concentrates started invading the U.S. in the late 1990s. Brilliant explanation of dairy’s manipulated price system. See our “Story of the Month” here.

Federal Reserve Secretly Loaned $7.7 Trillion to U.S. & Foreign Banks (p. 9):
    Bloomberg News fought the Obama administration all the way to the U.S. Supreme Court to gain release of documents showing how Federal Reserve secretly loaned $7.7 trillion to troubled banks. Not even Congress was told about this.

Filtered Waste Vegetable Oil Beats Down Farm Energy Costs (p. 10):
    Paris Reidhead describes the simple, low-tech waste vegetable oil processing system operated by NY dairy farmer Jon Close. In 2011, Close kept his diesel fuel costs to $2 per gallon, by producing 1700 gallons of fuel from local restaurants’ supplies of used frying oil.

Big Corporations Adding Wood Fiber to Many Food Products (p. 11):
    News media reports have unveiled use of wood fiber products in many consumer foods. Why? The tiny wood fibers soak up water and “fill” processed foods with cheap volume!

GAO-12-46 Economic Adulteration (p. 11):
    The Government Accountability Office has criticized FDA for failed oversight in what’s labeled “Economic Adulteration” of food products. In other words, FDA has allowed use of cheap fillers and substitutes in manufacture of many food products.

Shamrock Farms Organic CAFO Dairy Suspended by USDA for Violations (p. 11):
    Shamrock Farms – a dairy processor located near Phoenix, Arizona – has suffered suspension of its organic dairy farm, where thousands of cows are milked – due to violations of USDA’s organic standards.

2011 U.S. Seed Corn Harvest Probably 25-30% Short (p. 12):
    Months of bird-dogging this issue lead us to this year-end conclusion.

Pepsi to Build “Biggest Yogurt Plant in North America” (p. 12):
    Batavia, New York is the announced site for plans by PepsiCo to build the biggest yogurt plant in North America. Where will the milk come from???

Dairy Livestock Prices Mostly Down, Except for Culls, Top Springers and Cows. (p. 13):
    Money and forage supplies are tight. Grain prices are high. These events are pulling down values for most dairy livestock. Prices for open heifers and short breds are down.

Cheddar “Takes a Header” at CME, Other Commodities Price-Stable (p. 14):
    In about three weeks, block Cheddar cash prices at CME fell back 32.5 cents per pound. Cheddar barrels fared even worse. Only good news is that global demand for butterfat is pushing up prices on Fonterra’s twice-monthly auction.

“… when money failed in the land of Egypt … (p. 15):
    Pete Hardin cites Genesis 47: 13-27 as a reference for the ancient wisdom that the farmer must receive a “Fair Share,” and then briefly extrapolates a certain modern nation’s failure to comprehend that necessity.

Canada: Cheese Standards (p. 15):
   
The Canadian Supreme Court has upheld changes in cheese standards that disallow certain major food processors’ cheap ingredients. Lawyers for Kraft Foods and Saputo Cheese took this issue all the way to the top of Canada’s legal system.

November 2011  Issue No. 388

Inside this months issue...

Feature Story #1: Forage Supplies/Price & Cull Prices Will Constrict 2012 Milk Flow (p. 1):
   
Editor Pete Hardin looks at how the expected scramble for available forage supplies and sky-high cull cow prices in 2012’s first quarter will seriously depress 2012 U.S. milk flow. Read all about it here.

Brutal Dairy Policy Battle in Washington, D.C. (p. 1):
    Conflicting dairy policy interests are battling each other over future federal dairy policy in the nation’s capital. The big conflict: efforts to rush the Dairy Market Stabilization Program” through the budget-cutting “Super Committee.” National Milk Producers Federation – the dairy co-op lobby – is behind this scheme.

October Class III Price $18.03 - Class IV $18.41 (p. 2):
    The manufacturing class prices in the federal milk order program each fell about $1.00 per cwt. from the September levels.

Tiny Budget, More Computer Screw-Ups For USDA’s Dairy Gross Margin Insurance (p. 3):
    Retired dairy farmer Nate Wilson makes his reporting debut for The Milkweed with a well-researched article about the mess behind USDA’s October 28-29, 2011 “bidding” for dairy farmers hoping to participate in the pilot Livestock Gross Margin for Dairy program. What went wrong? First, some bidders got a 40-minute head start on others. Next, the computer system failed. All this for a paltry annual budget allocation of $7 million nationwide!

Study Reveals: NMPF Dairy Scheme Would Lower Farm Income (p. 4):
    We report on a very recent study by university dairy economists Chuck Nicholson and Mark Stephenson that analyzed the financial impact upon dairy farmers’ milk incomes of the current dairy policy proposals being pushed before the federal budget “Super Committee.” The economists conclude that dairy farmers would lose as much as $.92 per cwt. over the 2012-2018 timeframe.

Can Down-trending Fluid Milk Sales Be Reversed? (p. 5):
    Pete Hardin takes a tough look at U.S. fluid milk sales trends and concludes that dairy needs to offer a better product to consumers. Ways to improve fluid milk sales would include: re-image milk as affordable, complete protein; eliminate items such as rbGH, Ultra-High Temperature processing, High Fructose Corn Syrup, use of bovine reproductive hormones in milk cows, and give consumers more choices for non-homogenized milk. Why are organic milk sales booming (+10%) and fluid milk sales declining?

Members’ Purchasing Efficiencies Propel All Star Dairy Assn.’s Growth (p. 6-7):
    “In the analysis of The Milkweed, it’s hard to find a dairy trade association that demonstrably benefits members’ bottom line financials better than All Star.” Unquote. Based in Lexington, Kentucky, All Star offers a wide variety of services to members, particularly with group volume purchasing efficiencies. Members include dairy processors, food processors, suppliers, and milk transportation firms.

Studying Dairy Products at Kroger Stores (p. 7):
    Editor Pete Hardin’s practiced eye takes readers through the dairy product sales sections of Kroger supermarkets in Kentucky. Kroger offers an amazing array of cheeses at its “Market Place” stores. And Kroger pounds branded marketers of fluid milk, cheese and yogurt with its store-brand items.

Home-Grown Sprouted Barley “Fodder” Boosts Milk Efficiency, Components, Food Health & Longevity (p. 8-9):
    Ken and John Wilson – a son-father team of New York dairy farmers – have designed a system that produces sprouted barley fodder in six days. Feeding that fodder to their 130 Holstein milk cows has yielded many benefits to the farmers and their dairy animals. The Wilsons plan to market their system. This piece is the most amazing story ever published in the 32+ year history of The Milkweed.

Declining Fluid Sales: Tied to Social Complexities (p. 11-12):
    Writer John Bunting takes a close look at societal and economic trends that are partially responsible for declining fluid milk use. Examples: less consumption of cereal for breakfast, more moms working and not having time to prepare traditional meals, and the explosion of processors’ and retailers margins since the Reagan administration decoupled farm milk prices from parity while at the same time cutting out most of the federal antitrust budget.

Reminder: Send in NAIS Comments to USDA by December 9 (p. 12):
    Mary Zanoni reminds readers who are opposed to mandatory federal animal identification schemes to formally share their opinions with USDA during the present comment period ending December 9, 2011.

Stammer Succeeds Johnston at Agri-Mark (p. 12):
    Now CEO-ing for Agri-Mark, Dr. Richard Stammer, who replaces CEO for life Paul Johnston.

Dairy Cattle Replacement Prices at Auction Markets Across the USA (p. 13):
    Demand for top-end springers and milk cows is keeping prices solid, but virtually all other categories of dairy livestock are seeing prices slip backwards, for the most part. Money is scarce, uncertainty is ample.

Feature Story #2: What Our Politicians Would Do With Two Milk Cows (p. 13):
    Old humor recirculates about what different forms of government would do to a farmer with two milk cows. Editor Peter Hardin updates that humorous with speculation on how various politicians would manage two cows. Read it here.

Cheddar Prices Rebound, Butter Declines (p. 14):
    The past month has seen a 20-cent rebound for Cheddar prices at CME. But butter prices are falling, and the market for nonfat dry milk is soft.

No current dairy policy proposals will sustain producers (p. 15):
    “None of the above” gets Pete Hardin’s vote among the choices bantied about in Washington, D.C. Why analyze policies that are going to create milk prices averaging $15-$16 (or so) for the next seven years, Hardin asks. At that rate, “We might as well debate what color pansies Uncle Sam should put on the gravestones of the majority of U.S. dairy farmers.” Rather, we need a whole new farm milk pricing system, one that includes factors such as milk production costs, investment in dairy farm overhead, commodity prices, and retail prices paid by consumers.

Not So Fast Creating U.S. Food/Farm Policies (p. 15):
    Whoa! Why the race to lock in federal food/farm policy for the next five years. The current process completely ignores the public and is basically marked by a behind-closed-doors, “Hurry up and shut up” attitude.

Barley sprouts: most amazing story in 32+ years (p. 15):
    We refer to the barley sprout story in this issue (p. 8-9). Imagine a dairy cow feed that raises components, improves longevity, improves foot and leg conditions, reduces manure output, and reduces producers’ reliance on purchased feeds/forages. Ken and John Wilson – New York dairy farmers – have designed a 16’ x 20” unit that can produce 130 tons of six-day old barley sprouts per year.

Frozen Dairy Desserts “Dumbing Down” Ice Cream Category (p. 16):
    Look closely, that yummy-looking product in the ice cream section of your supermarket may not be ice cream, but “Frozen Dairy Dessert” – a cheap, knock-off product.

October 2011  Issue No. 387

Inside this months issue...

Ugly: Farm Milk Price Decline Ahead (p. 1):
    During the past two months, declines in dairy commodity prices set the stage for a drop of $4.00/cwt. (or more) by November – compared to average prices received during July-September -- for U.S. dairy farmers milk prices.

The Milkweed Estimates U.S. Seed Corn Harvest About 30-35% Below Expected 2011 Supply (p. 1):
    One month ago, this publication estimated a 20-30% shortfall in the 2011 U.S. seed corn harvest. Based on subsequent news and weather events, we up the ante to a 30-35% estimated decline (below expectations) for the vital seed corn crop. That estimate may be conservative.

U.S. Rushing to Resume Japanese Beef Imports Despite FMD Threat (p. 2):
    Despite the fact that Japan is on the back end of a Foot & Mouth Disease battle, USDA wants to expedite approval of Japanese beef imports into this nation. In 2007, the Homeland Security agency warned that FMD was the leading bioterrorism threat. Who needs Al-Qaeda when we’ve got USDA’s Animal Plant Health Inspection Service???

Correction: NASS’ Texas & New Mexico July Milk Totals DID Correlate with Federal Order Figures (p. 2):
    The Milkweed made a Texas-sized error last month, when we incorrectly asserted that July 2011 milk production between NASS and USDA’s federal milk order did not square. Correctly stated, the data was the same. Even so, folks in the Texas dairy industry can’t believe July 2011 milk output was up 8%. And nor can they believe that August 2011 milk volume increased by 11%.

September Class III Price $19.07 – Class IV $19.53 (p. 2):
    Take a good look, following months’ prices will decline.

“Devil in the Details” as Peterson/NMPF Morph FFTF into H.R. 3062 (p. 3):
    National Milk Producers Federation (the dairy co-op lobby) and its beholden Congressman (Colin Peterson, D-MN) have packaged NMPF’s “Foundation for the Future” program into H. R. 3062. The program has been changed extensively since early summer. Little understanding or support for H.R. 3062 may be found in farm country.

IDFA Media Campaign Blasts Federal Milk Orders (p. 4):
    The nation’s dairy processors’ lobby – the International Dairy Foods Assn. (IDFA) – has opened a public barrage aimed at eliminating the federal milk order program. IDFA’s blitz of advertisements claims that consumers have suffered unduly high milk costs due to the antiquated federal milk order program and its bureaucrats.

U.S. Consumers Pay 1.7 Cents Per Gallon “Milk Tax” (p. 4):
    The International Dairy Foods Assn. controls a $110 million/year fund generated by a “Milk Tax” (1.7 cents per gallon). USDA added $.20 per cwt. to fluid milk processors’ raw milk costs, and diverts those receipts to management of IDFA. The MilkPEP program is (in)famous for the insipid “Milk Moustache” ads. IDFA – the same group complaining about federal milk orders (see immediately above) – rents office space and manages MilkPEP. Wonder if IDFA’s “in-house” travel agency books flights for MilkPEP personnel???

Top Producer Premiums $2.50/cwt. in Eastern Ohio Market (p. 5):
    Stiff competition for farm milk in eastern Ohio is erupting, due to fluid milk and cheese plants’ expanding volumes to supply customers. The top-shelf premium to producers is $2.50 per cwt. Wow.

Animal Rights Group Sues NMPF/CWT, Illegal Milk Price Enhancement Alleged (p. 5):
    An animal rights group (Concerned Over Killing, or COK) has filed suit against National Milk Producers Federation for the cow-killing program known as “CWT.” NMPF paid dairy farmers to kill their milk herds, to reduce milk production and boost farmers’ prices. The basis of the legal complaint: CWT was not properly structured as a “Marketing Agency in Common,” because it included independent producers (i.e., not members of a cooperative).

Seed Corn T-I-G-H-T; Contract 2012 Supplies Yesterday (p. 6):
    The headline says it all, in tandem with the article on page 1.

“Triple Stax” GMO Corn Suffering Premature Ear Loss (p. 6):
    Here’s one Monsanto et al. don’t want farmers to realize: the super-dooper “Triple-Stax” GMO corn (infused with three biotech traits) has a problem. Significant numbers of ears are falling off this fall, before they can be harvested.

Feature story: New Dairy Pricing Concept: “Protein & Energy” from Feed Bunk to Supermarket Dairy Case (p. 7):
   
Pete Hardin expands his thesis that dairy farmers are NOT in the “milk business.” Rather, dairy farmers are in the “protein and energy business.” Read all about it here.

Digging Deeper into CME’s Influence on Dairy Pricing (p. 8-9):
    Writer John Bunting continues his search for nuggets of truth in milk pricing, with further investigation into antics at the Chicago Mercantile Exchange.

USDA’s Food Programs Make “Cheap Dairy” Bargain (p. 9):
    The single largest purchaser of dairy products in the United States is Uncle Sam. Thus, to keep within budgets, Uncle Sam may have less than full interest in investigating complaints that certain events unduly lower farm milk prices.

Grain Costs Impair Peak Milk Production Profits (pp. 10-11):
    Writer Paris Reidhead takes a long look at how higher grain (energy) costs mean feeding for peak production in dairy cows is probably a money-losing endeavor. High-end milk output requires a lot more grain per pound of output.

Bad Gas? Ethanol May Harm Gas Engines (p. 11):
    You won’t like the idea of putting ethanol-blended gasoline in your car (or chain saw) after reading Paris Reidhead’s explanation of why corn ethanol goofs up engines.

New USDA NAIS Requirements for Cows & Horses Compared (p. 12):
    Writer Mary Zanoni takes on USDA’s new proposed rules for animal identification, which focus mainly on creatures crossing state borders. Required reading for skeptics of mandatory government animal ID requirements.

Dairy Livestock Prices Downtrending, Except for #1 Springers (p. 13):
    The headline says it all. High feed/forage costs and declining milk prices mean there’s a lot less buyer interest in dairy livestock, except for top quality animals.

Dairy Commodity Prices Sink, Pulling Down Inventory Values (p. 14):
    The dairy commodity price collapse that has hit Cheddar, butter and nonfat dry milk means firms holding inventories are generally upside-down.

$30/Cwt. in Canada, NZ and Even China, But Here??? (p. 15):
    Pete Hardin takes a long look at milk prices and pricing events and wonders why, when other nations (developed and otherwise) see dairy producers getting $30 per cwt., where’s the share for U.S. producers.

If you’re staying in the game … (p. 15):
    Pete Hardin discusses strategies and realities for dairy farmers who want to be survivors.

Southeast Milk Antitrust Litigation Trial Delayed Until Spring 2012 (p. 16):
    Writer Julie Walker, who’s followed the case very closely, gives an update on events in the big dairy antitrust trial in Tennessee. She explains that the trial – once scheduled for March 2011 – will not be started until at least Spring 2012.

Free Weekly U.S. Hay Price List E-Mail (p. 16):
    Interested persons may sign up to receive a free, weekly analysis of forage supply/demand and prices. Rick Mooney is the editor of eHay Weekly. To learn more, go to: www.hayandforage.com

September 2011  Issue No. 386

Inside this months issue...

U.S. 2011 Seed Corn Harvest Way Down: -20% to -30%? (p. 1):
    Extreme hot weather in July impaired corn pollination. As this year’s seed corn crop – vital to next year’s corn plant – is harvested, firms are adding up the damages.

Cheese Leads Dairy Commodity Decline at CME (p. 1):
    Since late July, Cheddar dropped about 40 cents per pound at Chicago Mercantile Exchange cash trading. There are numerous signals and data in the dairy industry to indicate that the Cheddar price drop was not justified.

Several Milk Shortages Ahead: Southwest, Southeast, Northeast and ??? (p. 2):
    Adverse weather has pounded several key milk-producing regions of the country. And California dairy producers are in for a shock as they are now negotiating annual grain supply contracts. Current (and rising) grain prices mean $20/cwt. production costs for most Golden State dairies.

Early Corn Harvest: Lower Yields, Light Test Weights (p. 3):
    Early reports from the U.S. corn harvest are varied, but in general, yields are lower than anticipated and “test weights” are light. Light test weights mean reduced nutritional value per bushel.

June 2011 Record Class III Price $21.67 - Class IV $20.14 (p. 3):
    Take a good look. With dairy commodity prices declining in the past month-plus, it will be at least several months before these price peaks are attained again, despite clear future challenges to producing farm milk.

Southeast Antitrust Trial vs. DFA Postponed Indefinitely (p. 4):
    The intended September 13 starting date for the Southeast antitrust trial pitting farmer plaintiffs against Dairy Farmers of America has been postponed indefinitely. Judge Ronnie Greer has issued confusing rulings about the status of the subclass of DFA member (and ex-member) plaintiffs. So it’s best to sort out that confusion before the trial starts.

WARNING! Southeast Producers Should Ignore Lawyers Offers to Settle SE Antitrust Case (p. 4):
    Dairy farmers in the Southeast are receiving offers from companies seeking to represent dairy farmers in the filing of settlement claims stemming from the big antitrust hearing. The Milkweed advises producers to ignore solicitations from such characters and allow their interests to be represented by counsel for plaintiffs and other possible court-appointed legal representatives. Dairy farmers’ claims date back to January 2001 – so giving up one-third of their claims to a bunch of hucksters from places like New Jersey and New York would be a mistake.

Peterson Flip-Flops FFTF Numbers; NMPF Scorns “Milk Tax” Critics (p. 5):
    U.S. Representative Collin Peterson (D-Minn.) changed some of the reference points in the version of the working draft of proposed dairy legislation circulating in Washington, D.C. Peterson, fronting for National Milk Producers Federation and the “Foundation for the Future” policy package, has changed numbers to make it somewhat less likely that assessments would kick in against dairy farmers’ milk checks.

FFTF’s Structural Defect: Rising Grain Costs Likely to Outpace Future Farm Milk Price Gains (p. 5):
    The Milkweed’s analysis is that, relatively speaking, there is much more upside to grain costs than farm milk prices in the future – in part due to global grain scarcity as well as a weak U.S. dollar. Therefore, the formula based up farm milk prices and grain/forage costs that’s proposed for the Foundation for the Future could result in assessments against dairy farmers’ milk checks, even if there were no U.S. milk surplus.

September 7: WI Supreme Court Hears Mega-Dairy Siting Arguments (p. 5):
    On September 7, the Wisconsin Supreme Court heard arguments in a case pitting the rural Town of Magnolia against Larsen Acres, a 2900-cow mega-dairy. Testing of a local stream reveals high levels of nitrate contamination. But the mega-dairy has contested the local town’s right to set water quality standards on the dairy.

Mega-Dairies: Broken Model for U.S. Milk Production (p. 6):
    Writer John Bunting digs deep into the structural model of factory-scale dairies and concludes that for many, the future is bleak. High grain prices have broken the cost structure on which many factory-scale dairies were founded.

Bovine TB Used to Push Animal ID; Mexico’s TB Role Ignored (p. 6):
    USDA is back with a scheme to require animal identification technologies on all animals moving between states. USDA is ignoring the fact that most of the bovine tuberculosis problems have stemmed from both cows and humans crossing the border from TB-racked Mexico.

Attn. Dairy Producers: You’re N-O-T in the Milk Business, You’re in the P-R-O-T-E-I-N and E-N-E-R-G-Y Business (p. 7):
    Pete Hardin explains from the decisions on which seeds to plant and when/how crops are harvested/stored/fed, dairy farmers are merely producing/purchasing crude proteins and energy … and then managing dairy herds to convert those crude forms of energy and protein into the liquid carrier for these refined forms of protein and energy (butterfat) that are biologically available to humans in the array of dairy products. Think about it!

Feature Story: Kraft Foods Up to Its Old Tricks … As Cheddar Prices Nose-Dive at Chicago Mercantile Exchange (pp. 8-9):
   
Read our feature story of the month here.

Kernel Processor Boosts Corn Silage Feeding Efficiency (p. 10):
    “Corny” Reidhead (our writer, Paris) explores the improved feed efficiency gained by adding a kernel processor to silage choppers. Kernel processors further break down corn kernels in chopped silage – making the nutrients in each kernel more biologically available to the dairy cow. This story includes farmer testimonials and insights.

Dairy Taking Chocolate Milk Critics Seriously (p. 11):
    Critics of chocolate milk in schools have scored some successes in getting flavored milk removed from some schools in the U.S. Criticisms include the caloric content of chocolate milk, which is tied into the overall obesity problem in a large percentage of American children. Chocolate milk sales in school equal about 4.9% of total U.S. fluid milk sales. Dean Foods has rolled out a lower-calorie chocolate milk: “TruMoo.”

NAIS Rises from the Grave: USDA Wants Mandatory Animal ID (p. 12):
    Writer Mary Zanoni reports on USDA’s latest scheme to revive the mandatory animal ID program. USDA wants all livestock moving between states to be enrolled in an animal ID program.

Drought-Forced Exodus of Southwest Livestock to Slaughter Pulling Down Dairy Cull Cow Prices in Several Regions (p. 12):
    Large numbers of cattle – beef and dairy – are moving to slaughter from the Southwest. Beef slaughter facilities in the Upper Midwest, Southeast, and even the Northeast, are receiving trailer loads of cattle from the Southwest. Short-term, these large numbers of animals and knocking down cull cow prices in those regions. But The Milkweed projects all-time high dairy cull prices by the first quarter of 2012, once the emergency exodus to slaughter of Southwest cattle is over.

NASS Shifting to Regional Offices, Reducing Presence in States (p. 13):
    USDA’s National Agricultural Statistics Service (NASS) is consolidating its 50 state offices into nine regional offices, in a move to save money. Employees will be disrupted. Farmers will see further decline in the accuracy of NASS’ reports.

Dairy Commodity Prices Take Big Tumble (p. 14):
    The headline says it all.

Dairy & Uncle Sam (p. 15):
    Pete Hardin offers his basic notions about what appropriate federal dairy policies should be, starting with a commitment by USDA to purchase a variety of foods for domestic hunger and disaster relief efforts. Such foods would include components from several agricultural commodities: example—frozen pizza.

Never Have Seen Such Uncertainty (p. 15):
    Weather … the economy … pending food shortages. Pete Hardin puzzles over what a seemingly intractable mess this nation faces.

New Book Details Wisconsin Dairying – Origins to Present (p. 16):
    A newly published book, “Creating Dairyland,” captures the history of Wisconsin’s dairy industry, from the vision that drove it to modern day participants’ roles on the farm and in the industry. In The Milkweed’s analysis, the development of Wisconsin’s dairy industry was the greatest economic development project in the history of the nation – a success story now including the sixth, seventh, and eighth generations. Author Ed Janus has crafted a gem of a book that ought to be under a lot of Christmas trees in “America’s Dairyland” … and a lot of other states, too!

USDA’s Sept. 12 Crop Reports Show Big Problems (p. 16):
    USDA has chopped off nearly five bushels per acre on estimated corn yields in the past month, according to a big report issued on September 12. Soybean yields fell also. A total of 20% of U.S. corn acreage is categorized as “Poor” or “Very Poor” – last year, that combined total was 12%.

August 2011  Issue No. 385

Inside this months issue...

Summer Heat/Humidity Devastate Milk Flow & Components (p. 1):
    July’s heat seriously depressed milk flow and butterfat in several regions of the country. Serious questions remain about how dairy cows will bounce back from the weather stresses.

USDA Maintains Corn Acreage Optimism (p. 10):
    The August 11, 2011 Crop Production report from USDA continued estimates from late June that U.S. corn acreage was 92.3 million. USDA’s latest report apparently ignores flooding along the Missouri River and its tributaries.

NMPF: Half of FFTF “Milk Tax” Would Go to Uncle Sam (p. 10):
    Uncle Sam wants his mitts on 50% of any “Milk Tax” that would be assessed against dairy farmers under the proposed “Foundation for the Future” program. Why? Because assessments would reduce dairy farmers’ income tax liabilities and Uncle Sam would lose money. Go figure.

CFTC Fines Belgium-based Ecoval for NFDM Price Manipulation at CME (p. 2):
    Ecoval, a major international dairy trading firm, was recently fined $1.3 million dollars for attempts to manipulate NFDM futures. The fine covers activities in the second half of 2007.

Antitrust Write-Downs Curdle Dean Foods 2nd Quarter Earnings (p. 2):
    The nation’s biggest fluid milk processor wrote down $131 million in legal settlements against its 2011 second-quarter earnings, resulting in a loss per share of $.28.

June 2011 Record Class III Price $21.39 – Class VI $20.33 (p. 2):
    Strong increases in Cheddar and whey prices propelled the Class III (cheese) milk to an all-time peak in USDA’s federal milk order program: $21.39/cwt.

Feature Story: FFTF’s Proposed “Milk Tax”: History Repeating 1983 Events? (p. 3):
    Dairy farmers should prepare their milk income for a “Collin-oscopy” … if Congressman Collin Peterson’s “discussion draft” of NMPF’s proposed Foundation for the Future dairy legislation becomes law. Read all about this “brain dead” legislative scheme here.

Many Dairy Co-ops Searching for CEO Replacements (p. 4):
    We count five U.S. dairy co-ops in the CEO search mode, although at press time one of those spots was filled. Surprise: Foremost Farms board is looking to replace Dave Fuhrmann.

IF SE Antitrust Case vs. DFA Goes to Trial, The Milkweed Will Offer Daily Web Site Coverage (p. 5):
    The long-awaited Southeast dairy antitrust trial is set for August 16. We’ll try to offer daily coverage and documents’ posting on our Web site: www.themilkweed.com.

Questions/Answers – What’s the Southwest Feed Situation for Dairy Producers? (p. 5):
    Veteran dairy nutritionist Dan Loper shares his insights about crop availabilities and costs facing producers in the Southwest.

About Time! FDA Slams “Muscle Milk” Products as Misbranded, Etc. (p. 6):
    The federal Food and Drug Administration has sent a warning letter to CytoSport, Inc., manufacturer of “Muscle Milk” nutrition beverages and bars, warning that those products do not conform to definitions of milk and are otherwise misbranded.

Lawsuit: “Muscle Milk” Unfair, Unlawful, Deceptive & Misleading (p. 6):
    A California law firm has filed a class action complaint against CytoSport, manufacturer of “Muscle Milk” products, claiming a variety of violations of California consumer protection laws. Setting the Stage for Trial: Timeline of the Southeast Milk Antitrust Litigation (p. 7): Julie Walker, who will cover the antitrust trial for us, gives an in-depth history of Southeast dairy antitrust events.

Tight Global Butter Supplies Driving High Milkfat Prices (p. 8):
    Writer John Bunting explores events in the butter industry that have lead to the current strong commodity prices.

Dairy Livestock Slaughter Numbers Trending Up (p. 9):
    John Bunting analyzes the trend towards more U.S. dairy cows being sent to slaughter.

Northeast Dairy Antitrust Plaintiffs Want Structural Change (p. 9):
    At a hearing before Judge Christina Reiss in federal court on July 18, plaintiffs’ attorney Kit Pierson emphasized that his clients wanted structural change in the Northeast dairy industry as part of any settlement with the remaining defendants, Dairy Farmers of America and Dairy Marketing Service.

Biodiesel Keeps Up With New Engine Design (p. 10-11):
    Writer Paris Reidhead explores his passion – biofuels and their beneficial aspects on performance of diesel engines.

Standard & Poor’s Downgrades U.S. Government’s Credit Rating (11):
    What’s behind the recent downgrade of U.S. government securities?

Major Canadian Organic Grain Exporter’s Certificate Suspended (p. 12):
    Writer Will Fantle of the Cornucopia Institute details how a major Canadian-based source of organic soybeans sold in the U.S. has been caught cheating and has lost its organic certification.

Promiseland Forfeits USDA Organic Status (p. 12):
    Will Fantle reveals that a major supplier of “organic” dairy and beef animals has been exposed as a cheat.

Dairy Livestock Auction Prices (p. 13):
    Market prices vary around the country, in great part determined by local crop and weather conditions.

Why Are Dairy Promotion Personnel Involved in Policy Issues? (p. 13):
    Despite clear-cut prohibitions, dairy promotion personnel are engaged in trying to influence federal dairy policy. Example: Tom Gallagher, CEO of Dairy Promotion, Inc., is listed on the committee that’s been developing “Foundation for the Future.” That effort is pure politics.

Industry Weighs Impact of Heat on Dairy Commodities’ Output (p. 14):
    When cheese prices are above $2.00 per pound, some folks get nervous. But other folks are nervous, wondering where the dairy products will come from after this summer’s heat/humidity and crop damage.

“NO NEW TAXES: -- Doesn’t NMPF Understand? (p. 15):
    Pete Hardin skewers National Milk Producers Federation for its dairy policy proposals that include a “Milk Tax” on farmers’ milk income. Very simply: NMPF doesn’t seem to get the current drift in Washington, D.C.

Please Help Expenses Reporting DFA Antitrust Trial (p. 15):
    Pete Hardin asks subscribers to contribute to the daily coverage we’ll offer on our Web site by sending modest donations to Julie Walker – the reporter on the scene. The trial is anticipated to last eight weeks, if it doesn’t settle privately. The Milkweed will offer daily analysis and post key documents on our Web site – www.themilkweed.com.

Corn Infused with “Timex* Gene” Rebound from Wind Damage (p. 16):
    The pictures tell the whole story. Severe damage from 70-mile per hour winds on July 11 left much corn in southern Wisconsin horizontal. But five days later, most stands were upright and headed to tassel. Jokingly, Pete Hardin suggests that the corn plants have been infused with a “Timex Gene” – playing off the old Timex watch television commercials that claimed Timex watches “would take a licking and keep on ticking.”

July 2011  Issue No. 384

Inside this months issue...

Feature Story 6/30: USDA Reports More Corn Acres, But Ignores Flooding (p. 1):
  
  Read our “Story of the Month here.

Dean Foods/Farmer Plaintiffs Reach Settlement in SE Antitrust Case: $140 Mil.  (p. 2):
   
A pre-trial settlement removes the nation’s largest fluid milk processor from a big antitrust trial scheduled to start in mid-August.  Dean Foods will pay out $140 million over five years.  Now the spotlight turns to Dairy Farmers of America as the sole major defendant.
 

2011: Year-to-Date Cheese Imports Up Almost 25% (p. 2): 
   
John Bunting analyzes dairy import/export volumes for 2011 and finds … surprise … imports are way up!
 

June 2011 Class III Price $19.11 – Class IV $21.05 (p. 3):
    Strong dairy commodity prices show up in farm milk prices for June 2011.
 

Wisconsin Cheese Squeeze: Less Milk, More Plant Capacity (p. 3):
   
Wisconsin cheese plants – with expanded capacity – are now chasing less milk, as farms produced less milk in May.
 

USDA: Big Boss Customer at Cheese Counter (p. 3):
   
Guess what entity is the biggest, or second biggest cheese buyer in the nation?  USDA.  Maybe that’s why USDA looks the other way at cheese pricing irregularities.
 

Where Will Southeast Find Extra Fall/Winter Milk Supplies? (p. 4):
   
As Drought, high grain prices and financial frustration pull down Southeast milk production, the question becomes: where will supplemental milk output come from to supply the Southeast’s needs later this year?  All major supplying regions are tight on milk.
 

Southeast Milk Litigation: Context and Complexities – Setting the Stage for Trial (p. 5): 
   
Writer Julie Walker – who has attended most of the hearings in this case – reports the background and issues for the upcoming Southeast dairy antitrust case scheduled for trial on August 16.
 

Fluid Milk from Mexico Now Selling in Several U.S. Markets (p. 6): 
   
A Mexican dairy company is now importing and selling UHT fluid milk in several regions of the U.S. 
 

FDA’s Third-Party Certifications: Okaying Foreign Grade A Dairy Plants (p. 6):
    The U.S. Food and Drug Administration now has a program to let private firms inspect and okay foreign dairy plants to meet U.S. Grade A dairy sanitation rules … so they can send imports to the U.S.
 

A. J. Bos Retreating from Nora, Illinois Mega-Dairy Project? (p. 7): 
   
Retreat?  Neighbors around the proposed mega-dairy site near Nora, Illinois are chuckling as they watch de-construction crews take apart roofing panels and trusses from huge buildings once intended to house thousands of cows at a project owned by Californian A. J. Bos.
 

Waste Vegetable Oil Powers Sullens Transport’s 50 Milk Trucks (p. 8-9):
   
Sullens Transport LLC has 50 milk truck on the road, operating within a 500-mile radius of McMinnville, Tennessee.  The fleet is fueled by biodiesel processed from waste vegetable oil.  Here’s how these inventive folks do it!
 

Grain Supply Crunch: Options for Dairy Producers (p. 10): 
   
With anticipated high grain prices for years ahead, Paris Reidhead offers some strategies for dairy farmers to consider as alternative, cheaper feeding strategies for their animals. 

Brush Livestock: an Exclusive Interview by The Milkweed (p. 11): 
   
Brush Livestock is one of the most vigorous livestock auctions in the country.  Read what the operators have to say about their business and locale.
 

Organic Feed Sources in Danger: Crop Producers Switching Back to Conventional (p. 12):
   
Writer Heidi Griminger Blanke details the pressures on organic grain producers that are forcing a cutback of organic crops in the U.S.  This situation makes it hard to visualize growth in organic dairy, down the road.  Very interesting article.
 

Dairy Cattle Auction Markets (p. 13):
   
Prices for springers are either flat or down about $100 across the U.S.  Meanwhile, there’s strength in prices for breeding-age heifers and baby calves.
 

Livestock Notes (p. 13):
   
Pete Hardin details how fewer dairy animals are moving through livestock auctions, plus how Drought in the Southwest is busting regional livestock prices as producers must send animals to market due to lack of feed. 

Domestic Dairy Demand Softens; Milk Output to Tighten (p. 14):
   
Pete Hardin covers the wide-ranging dairy supply/demand picture.  Marketers are nervous about Cheddar prices.  But high grain price and adverse weather should pull down U.S. milk output in coming months.
 

“Foundation for the Future” is Brain-Dead (p. 15):
   
Pete Hardin unloads on the insipid proposal for dairy policy changes by National Milk Producers Federation.  Hardin scorns the proposal for: eliminating more than  80% of all butterfat pricing in federal orders, as well as 100% of all protein pricing; proposing “milk taxes,” on farmers’ milk checks, going to a two-class milk price system, having taxpayers fund “insurance” for dairy farmers’ profits, etc., etc.  Bad idea, period.

June 2011  Issue No. 383

Inside this months issue...
For REAL: CME Cheddar Market Tops $2 Per Pound (p. 1):
    In the past month, block Cheddar cash market prices at the Chicago Mercantile Exchange have gained nearly 50 cents per pound. Many factors – from stronger global demand to product contamination problems – have shorted U.S. cheese supplies and drive up prices.

U.S. Likely to Exhaust Corn Reserves before 2011 Harvest (p. 2):
    You won’t get Tom Vilsack to admit it, but the U.S. will run out of corn before the current crop is harvested. Mother Nature is throwing many challenges at U.S. farmers this year. Implications for this nation running out of corn are unprecedented.

Product Contamination: TX Plant Loses 2+ Weeks of Cheese (p. 2):
    Plastic residues shredding from a conveyor belt forced the Hilmar Cheese plant at Dalhart, TX to withdraw more than two weeks of cheese production from commercial channels – about 12-15 million pounds of finished product.

May 2011 Class III Price $16.62 – Class IV $20.29 (p. 3):
    Wait ‘til next month!

CME Goofs, Then Quits Weekly Butter Inventory Report (p. 3):
    In May, the Chicago Mercantile Exchange discovered a huge error in its weekly survey of butter warehouse inventories. Previously, about HALF of CME’s surveyed warehouse butter inventories were apparently unreported. Following this fiasco, CME has ceased weekly butter inventory reports. CME had instituted weekly butter inventory to provide information for parties trading in butter-related futures/options contracts.

Comparing Milk Powders’ Protein Costs (p. 3):
    Writer John Bunting analyzes various costs of dairy protein, per pound, from different measures of nonfat dry milk and skim milk powder values.

Speculators Drive Petroleum Markets … Just Like Dairy (p. 4):
    Why do certain energy-related sectors and dairy have in common? Narrowly-traded futures/options and a few powerful players.

Closer Look at Dean Foods’ Q1 Earnings: Tax Refund & Yogurt Sale Created “Profit” (p. 4):
    The modest $25 million profit registered by struggling Dean Foods in 2011’s first quarter was due to a tax refund and sale of the Mountain High yogurt business that combined for $240 million in special revenue.

Dairy Downgraded to Lowfat Side Order; USDA Replaces Food Pyramid with “Plate” (p. 4):
    Say good-bye to the confusing, antiquated “Food Pyramid.” USDA has replaced it dietary recommendations icon with a plate. Trouble is: dairy is literally “off the plate” as a low-fat side entry.

Chinese Dairy Industry Seeking U.S. Investors: BEWARE!!! (p. 5):
    We poke fun at the hyperbole surrounding investment potential in a Chinese dairy farm development firm. For a good laugh …

Excellent Wisconsin Cheeses at Real Good Prices (p. 6):
    Want good Wisconsin cheeses at really good prices? Then visit the Wisconsin Dairy State Cheese Company factory store at Rudolph, Wisconsin. We profile owner Mike Moran and the 100+ varieties/flavors of Wisconsin cheeses the store offers customers. To Mike, an “import” is a cheese from Iowa!

NYS Producers’ Mailbox Milk Prices Unduly Low (p. 7):
    John Bunting compares USDA’s “mailbox” milk prices in New York to other states. Why are NYS producers’ prices so low? Because marketing co-ops (like DFA and DMS) are bleeding farmers’ milk checks for unrecovered marketing costs.

DFA’s 2010 Financial Audit Dismisses/Ignores Legal Liabilities (p. 8):
    This is one of our June “stories of the month” features. Read it here.

Another Southeast Antitrust Complaint (p. 8):
    Lawyers in Mississippi have filed ANOTHER class action lawsuit on behalf of dairy producers seeking damages from the “usual suspects” (DFA, Dean Foods, etc.) in the Southeast.

DFA’s Bogus “Assets” Equal 86% of Members’ Equity (p. 9):
    See this “Story of the Month” whopper here.

“Intangibles” and “Goodwill” Grew Faster than the DFA’s Net Income (p. 9):
    Another “Story of the Month” selection available here.

Siggi Yogurt: Icelandic Style, but All-American (p. 10-11):
    Paris Reidhead reports the history of Siggi’s Yogurt, processed by a farmstead yogurt factory in Central New York. The operation is distributing nearly 12,000 cases of product per week at the current time.

Southeast Antitrust Trial Set for Aug. 15, Barring Settlement (p. 11):
    We explore the behind-the-scenes events involving the combined Southeast dairy antitrust cases.

FDA: Yogurt Ingredients Rule Not Being Enforced (p. 12):
    Following a complaint about yogurt ingredients to Wisconsin’s agriculture department, the federal Food and Drug Administration has explained that it’s not enforcing ingredients standards for yogurt! Goodness knows, if an ingredient came out of a cow’s teat anywhere in the world, that’s good enough for FDA to put in our yogurt!

Dairy Cattle Replacement Prices at Auction Markets Across the USA (p. 13):
    We not top springing Holsteins topped the $2100 mark at Brush, Colorado. It’s spotty – depending on local crop conditions – but dairy livestock prices are either flat or stronger. Breeding age heifers and baby calves are bringing more money. Top end cull prices are in the $.75 to $.83 per pound, live weight.

Rep. Peterson Ready to Introduce NMPF’s FFTF in June (p. 13):
    Look for Minnesota Congressman Collin Peterson to introduce a legislative package that includes proposals to shift future federal dairy policy to National Milk Producers’ Federations’ proposed foolishness called “Foundations for the Future.”

AJCA Analyzes FFTF Unfavorably (p. 13):
    National All-Jersey, the milk pricing policy arm of the Jersey dairy breed association, has analyzed NMPF’s “Foundation for the Future” program and concluded that such a program, if made national policy, would erode dairy producers’ incomes.

Several Factors Propel Block Cheddar above $2/lb. at CME (p. 14):
    Our discussion of dairy commodity price and marketing trends provides a host of reasons why Cheddar cash markets have rocketed above the $2 per pound level in the past several weeks.

FDA Debases Yogurt: What’s Ahead? (p. 15):
    Pete Hardin puzzles what’s become to dairy product integrity, when the FDA is not enforcing a wide range of rules regarding sanitation, ingredient safety and standards of identity.

Don’t Change U.S. Dairy Policies in 2011 (p. 15):
    Pete Hardin wants to avoid the rush to dairy policy changes, arguing that food scarcity in 2011 will mean it’s wiser to wait a year and reform federal dairy policies as part of a larger package of national food policies.

NOAA Soil Moisture Map Reflects U.S. Weather Extremes (p. 16):
    We reproduce a May 2011 soil moisture map from the National Oceanic and Atmospheric Administration (NOAA) that shows soil moisture levels in each state. The U.S. simultaneously suffers from both major wet weather and major drought.

May 2011  Issue No. 382

Inside this months issue...
 
Word Turning to U.S. for Dairy & Food Reserves (p. 1):
    The U.S. is viewed as a last reservoir for dairy and corn reserves. Good luck, all.

Court Transcript Reveals Hanman’s Conspiracies, Salary Bonuses & Payola (p. 1):
    Former DFA CEO Gary Hanman’s salary details, along with his role in strong-arming many independent into DFA-controlled markets, AND HANMAN’S “BONUS COMPENSATION” FROM DEAN FOODS FOR KEEPING DEAN FOODS’ RAW MILK COSTS LOW. See our “Story of the Month” in this issue.

Dean Foods 1st Quarter Earnings Favorable (p. 1):
    The nation’s biggest fluid milk processors’ first-quarter earnings confounded rumors circulating about first-quarter performance. Dean’s bottom line was boosted by sale of Mountain High yogurt and a tax refund.

Mark Davis (Davisco Foods) Offers Asian Dairy Demand Insights (p. 2):
    Following separate trips to Japan and China in April, Mark Davis, head of Davisco Foods (LeSueur, MN) offers his insights regarding Asian needs for U.S. dairy products. Basically, China will take whatever we’ve got, regardless of price.

May 8 Crop Progress Report: U.S. Corn Plantings Way Behind (p. 2):
    USDA’s May 8, 2011 weekly Crop Progress report shows that national data on corn planting is about two-thirds completed, relative to a recent, five-year historic base.

April 2011 Class III Price $16.87 – Class IV $19.78 (p. 2):
    USDA’s manufacturing class prices for April 2011 showed cheese milk (III) taking a hit, but butter-powder milk (IV) mostly holding its own. The Class IV price will be the foundation for Class I (fluid) milks in the next couple months.

Pending Multi-Region Problem: Too Much Dairy Plant Capacity (p. 3):
    In several regions of the U.S., dairy plants have been, or are being, overbuilt relative to available milk supplies. Right now, the situation is worst in the Northeast, where yogurt plants are popping up like dandelions in springtime. But Wisconsin is on a vigorous dairy plant expansion binge, and California dairy plants will likely suffer due to the impact of grain/forage prices on dairy farmers’ ability to continue.

Trade Mission Learns: $30-35/cwt. Milk in China! (p. 3):
    Chinese dairy farmers are paid about $30-35 per hundredweight for their milk, a recent group of U.S. dairy visitors to that nation recently found out.

Snapshots of Tornadoes’ Devastation in Southeastern States (p. 4):
    Julie Walker – a new contributor to The Milkweed – reviews what’s known about how the horrid, late April tornadoes in the Southeast impacted some dairy farm families. Thank you, Julie!

Cash Flow Chaos When Dairy’s “Money Chain” Breaks (p. 5):
    This article explains how a single dollar of milk revenue is used as collateral for debts at three levels of the dairy industry: processor, dairy co-op supplying the processor, and the farmer. We use real names to better raise the question: what happens when the cash flow chain is broken?

“Floating” Cows’ Teeth Can Boost Butterfat, Health & Longevity (p. 6):
    A truly amazing story by writer Paris Reidhead! A New York dairy farmer had a first calf Jersey heifer with what he thought was a tooth abscess. The farmer had a veterinary clinic treat the abscess, but the vet determined the real problem was that the animal’s upper molars were too sharp. The vet filed down the sharp points on the Jersey’s upper molars. When she returned home, feed intake, milk volume, and butterfat all took off. Then the farmer treated all 40 of his Jerseys in the same fashion, and has seen big gains in butterfat ever since!

U.S. Would Need More Milk, if Cheese Contained Less “Stuff” (p. 7):
    John Bunting really hits the nail on the head this time out! He shows how the so-called U.S. “dairy deficit” really results from a lot of “stuff” (for lack of a four-letter word) put in cheese as extenders. If Americans were getting honest, solid cheese, Bunting theorizes that U.S. cheese plants would need 30% more milk. We also print, citing a 2010 U.S. Patent, all of the “stuff” (for lack of a four-letter word) that Leprino Foods (supplier for Pizza Hut) puts in “cheese.”

Feature Story: Court Transcript Details Southeast Dairy Antitrust Conspiracy (pages 9-10):
    An alleged, long-running conspiracy that blocked access to regional fluid milk plants for many Southeast dairy farmers was eloquently detailed in courtroom testimony on January 20, 2011 by attorney Robert Abrams of the Howrey law firm. Abrams is plaintiff’s lead counsel in the Southeast dairy antitrust case that fingers Dean Foods and Dairy Farmers of America (DFA) as blatant antitrust conspirators and violators. Read key excerpts from the transcript here.

Global “Free Traders” Seek to Ban Food Export Restrictions (p. 10):
    Hard to believe, but nations that participate in the World Trade Organization are not allowed to embargo food products, with few exceptions. Even if a nation’s people were starving, WTO rules imply that food export embargoes are not allowed. The masters of “Free Trade” are working to tighten up rules and sanctions.

Jan.-Feb. 2011 U.S. Dairy Export Volumes Way, Way Up (p. 10):
    The first two months of the year saw big gains in U.S. dairy exports, compared to 2010. Examples: Cheese +98.8%, Butter +87.3%, and Milk Powders +162%.

Organic Milk Market … Looking More Like Conventional (p. 11):
    Mark Kastel from the Cornucopia Institute (an organic food industry watch-dog) details the funny business going on in the production and marketing of organic milk in the U.S. He draws a parallel to the “controlled by a few parties” situation that prevails in conventional milk sales.

Foremost Farms’ CEO Straddling Political Barbed Wire Fence (p. 12):
    Ouch! A recent article in the Watertown, New York Daily Times revealed that Dave Fuhrmann, CEO of Foremost Farms co-op (Baraboo, WI) donated $500 to the political action committee of the International Dairy Foods Assn. – the dairy processor lobby that’s vigorously fighting the “Foundations for the Future” dairy policy proposals being championed by National Milk Producers Federation. Funny thing: Fuhrmann is in hot water with fellow co-op leaders in the Midwest for supporting FFTF.

Dennis Wolff: Two Classes “Would Not Increase Milk Prices” (p. 12):
    Dairy lobbyist Dennis Wolff has been taking money from both dairy farmers and dairy processors to represent their seemingly contrary interests in the 2012 farm bill. In March 2011, The Milkweed revealed that fact. Now comes information from a meeting of the USDA Dairy Industry Advisory Committee, at which Wolff testified, in which he claimed a “two-class” pricing system (supported by dairy processors) would not raise farm milk prices! Will Wolff’s farmer-sponsors pay for that foolishness, when he’s further exposed?

If NMPF Dairy Plan Were in Effect for March 2011: “Milk Tax” Would Have Swiped 4% of Producers’ Income (p. 13):
    We pick up information provided by Sherry Bunting in the April 15, 2011 issue of Farmshine (a dairy weekly published in Lancaster County, PA). Ms. Bunting shows how, if NMPF’s “Foundations for the Future” dairy policy foolishness were the law, dairy farmers who produced no more milk in March 2011 than their Dec. 10-Feb. 11 “base” would have USDA deduct four percent of their milk income. Farmers don’t want more “Milk Taxes,” we believe.

Butter, Milk Powder Supplies Very Tight, Cheddar? (p. 14):
    Pete Hardin reviews the dairy commodity production/inventory/price scene. He contends that butter and nonfat dry milk are very tight – exports are moving more product out of the country than for 2010’s first quarter. Cheese is a tough call right now.

1-page, Understandable U.S. Dairy Policy (p. 15):
    Editor Pete Hardin cites exasperation with the variety of dairy policy proposals put out for the 2012 farm bill process and explains what dairy farmers deserve is understandable package of dairy policies that would all fit on one page. He cites his own suggestions and offers subscribers to share their wisdom.

Analyst Reviews Grain Situation at ADPI Convention (p. 16):
    Steven Nicholson of International Food Products (St. Louis, MO) offered a wide-ranging vantage point on the global and national grain situations at the recent American Dairy Products Institute meeting. Nicholson concluded that optimum corn harvest in North America is vital to even maintain current low corn carryover inventories for the 2011/2011 grain marketing season. Subsequent weather events make Nicholson’s hopes for optimum corn harvest a very low-odds shot.

April 2011  Issue No. 381

Inside this months issue...

Cheddar Cash Markets Crash at CME … WHY??? (p. 1):
    Since the second week of March, we’ve seen block Cheddar prices crash by more than $.40 per pound at the Chicago Mercantile Exchange. Dairy’s yo-yo cash Cheddar and farm milk prices swings continue. We are not watching a “natural market” at work.

Latest USDA Grain Stocks Report: Serious Corn Shortage Looming (p. 2):
    A late March USDA grain use report found that the first quarter of 2011 was the biggest first quarter ever for U.S. corn use (domestic and abroad). Earlier in 2011, USDA projected only a three-week global carry-over, at the end of the grain marketing year (August 31, 2011). Looks like that wee bit of carry-over will be even smaller.

March 2011 Class III Price $19.40 – March Class IV $19.41 (p. 2):
    USDA’s announced Class III (cheese) milk and Class IV (butter-powder) milk prices for March 2011 were the highest in a long, long time …but will not hold, as dairy commodities have plunged.

NMPF’s “Foundation for the Future” Is Incomprehensible (p. 3):
    The lack of details makes the proposed federal dairy policy changes being promoted by National Milk Producers Federation very difficult to analyze. NMPF wants to avoid discussion of specific prices per cwt. Rather, NMPF is promoting a “grain-price vs. milk-price” margin insurance. Class III & Class IV milk would be deregulated. Multiple component pricing would be lost. Regional fluid milk premiums are believed to be lost. And on and on and on.

U.S. Dairy Products Sales to Japan Disrupted (p. 3):
    Japan’s tragedies leave a big question: how will the Japanese people be fed. Japan has been a major importer of U.S. dairy products: 32.8 million pounds of cheese and 96 million pounds of whey in 2010. Some ocean-carriers are leery of going to Japan, for fear of crews’ safety. Purchase of draft horses in the U.S. by Japanese buyers has increased dramatically, as the Japanese may replace sushi with U.S. “horsey.”

Farmers in Canada & New Zealand Enjoying $30+/cwt. Milk Prices (p. 4):
    While U.S. dairy farmers are led to think that $15-16 per hundredweight for their milk ought to be viewed as a good price, writer John Bunting details how Canadian dairy farmers are receiving $30+ per cwt. for their milk. Same price, basically, down in New Zealand. Where’s ours????

Dean Foods/DOJ Forge “Consent Decree” in Wisconsin Fluid Milk Case (p. 5):
    Dean Foods and the U.S. Department of Justice are proposing a “Consent Decree” to settle the legal matter involving DOJ’s opposition to Dean Foods’ acquisition of the Foremost Farms’ fluid milk plants in eastern Wisconsin in 2009. The agreement proposes that Dean Foods sell the Waukesha, WI fluid milk business. Problem is, as we see it, what sane entity would buy a business from a seller that would remain in place as THE major competitor?

D-U-M-B: USDA Finalizes Import Promotion Fee (p. 5):
    USDA announced final details of the dairy import promotion assessment. Imports will be hit with the (refundable) assessment of 7.5 cents per cwt., starting on August 1, 2011.

Management Tips to Help Control Dairy Producers’ Grain Costs (p. 6):
    Writer Paris Reidhead discusses some money-saving tips to help control dairy producers’ grain costs. Example: Feed ear corn, instead of shell corn. By weight, the cob has a dry-matter equivalent of 20% of the kernels. Paris concludes that at current grain prices, farmers harvesting shell corn to feed to their dairy animals are leaving $237 PER ACRE in ruminant nutrition value when the cobs are left to rot in the field.

Success Formula for Perrys: Moldboard Plowing, Feeding Ear Corn, No GMOs (p. 6):
    Paris Reidhead focuses on western New York dairy farmers Leon and Jim Perry and their set of corn management strategies that work for them. Old-fashion moldboard plowing and avoidance of generically-modified seed corn leaves the Perry brothers with virtually zero mycotoxins. And feeding ear corn is a big energy-booster in the rations.

Ho-Hum. USDA Dairy Advisory Committee Issues Final Report (p. 7):
    After about a year of deliberations, USDA’s Dairy Industry Advisory Committee (DIAC) came out with 23 recommendations for public policy and/or study. Cornell professor Andy Novakovic carefully guided the committee to reach the intended goal of systemic mediocrity.

Feature Story: Adulterated & Misbranded: Numerous “Yogurt” Product ts Sold in U.S. Contain Illegal Ingredients
   
Shockingly, numerous yogurt products facing this nation’s consumers in the dairy case contain illegal ingredients, according to federal Food and Drug Administration (FDA) standards of identity for yogurt. And some of the world’s biggest yogurt firms – global giants Dannon and Yoplait – are manufacturing and marketing what appears to be adulterated and misbranded yogurt products. Read all about it here in this month’s feature story.

Can Northeast Milk Supplies Meet Expanded Plants’ Needs? (p. 11):
    Manufacturing plant expansions, in tandem with sky-high grain prices, leave many in the Northeast wondering where the milk will come from to fill dairy plants’ needs.

Organic Dean Dairy Product: Illegal Ingredient (p. 11):
    Will Fantle of the Cornucopia Institute details Dean Foods’ use of DHA oil in certain Horizon organic dairy products is illegal, based upon a finding by USDA’s National Organic Standards Board in 2010.

Formal Complaint Filed with USDA Inspector General (p. 12):
    The Milkweed prints in full its formal complaint filed with USDA’s Office of the Inspector General regarding excess salaries at Dairy Management, Inc. (DMI – the milk promotion mafia). This complaint was based upon a story that appeared in the March 2011 issue of this publication, which, among other things, noted that the top seven “carry-over executives” at DMI (i.e., senior executives who were listed by DMI on IRS Form 990 for both 2008 and 2009) compensation climbed more than $150,000 in 2009 (vs. 2008). One top-level DMI executive, Julian Toney, received over half a million dollars in deferred compensation in 2009!

Are Dairy Promotion Salaries Excessive? (p. 12):
    Ohio dairy farmer John Rahm contrasts DMI senior managers’ salaries and compensation with other promotion groups for beef and pork producers.

Dairy Cattle Replacement Prices (p. 13):
    Higher milk checks in March brought out the buyers. Springer prices were up $200-300 per head. Short-bred heifers and breeding age heifers were also stronger. Cull prices continued to strengthen.

Letter to USDA’s Vilsack Revealed Roundup Ready® Dangers (p. 13):
    In early January, retired Purdue University professor Don Huber detailed numerous scientific concerns about use of Roundup Ready® crops. (Crops that have been genetically-engineered.) Huber warned of novel life forms created in the soil, and already transferred to the food creatures’ guts.

Roundup Ready® Alfalfa: LOL Responds … Sort of (p. 14):
    Paris Reidhead posed some questions about Roundup Ready® alfalfa to Land O’Lakes – co-owner and marketer of genetically-modified alfalfa. His questions focused on safety for horses, cows and humans. No safety tests have been conducted on horses (major consumers of alfalfa). FDA has approved Roundup Ready® alfalfa as a human food, although it is doubted genetically modified seeds would be used for “sprouts” for humans.

Dairy Product I-N-T-E-G-R-I-T-Y (p. 15):
    Pete Hardin details how the integrity of dairy products – particularly their legal ingredients – is a slippery slope down which some in dairy are sliding. Rising food prices and costs for human-quality proteins may well create a future where more “glop” disguised as dairy products will be put in front of consumers who don’t know any better.

Additional Cheddar Testing “Catches No Fish” (p. 15):
    Our second round of mild Cheddar sample testing (five samples, six brands) came up with no significant average differences for any brands. Doing investigative research is like going fishing: sometimes you come up empty. We will test aged Cheddar samples later this year.

The Problem with Roundup Ready® Food (p. 16):
    A blast from the present! Joel McNair (editor/publisher of Graze) authors a wide-ranging viewpoint about the dangers posed by genetically-modified foods to soil, food animal, and human health/safety. This article originally appeared in the March 2011 issue of Graze – an excellent publication. (Editor’s note: Joel McNair is my brother-in-law, but he was ornery before I ever met him.)

March 2011  Issue No. 380

Inside this months issue...

Dairy Caught in Swirling Industry & Global Events (p. 1):
    The global food shortage is drawing down U.S. dairy product reserves. Butter and nonfat dry milk powder inventories are very low. Behind the scenes: major export buyers are lining up both current inventories and future product output. China?

Current Dairy Commodity Prices Pinpoint $20 Milk, BUT … (p. 1):
    With block Cheddar and Grade AA butter cash prices now above $2.00 per pound, and nonfat dry milk in the $1.80 per pound neighborhood, those commodity prices point easily to $20 per cwt. milk. But the question is WHEN will farmers see $20 milk checks, given the way milk powder prices lag used to set USDA and California milk prices lag far behind cash markets. Then there’s depooling, when threatens to rip-off dairy farmers in several federal milk orders.

U.S. Butter Inventories Scarce; Quarterly Growth Lagging (p. 2):
    In early March, the Chicago Mercantile Exchange counted 22 million pounds of butter in 74 surveyed warehouses -- a tiny amount. Inventory growth is slow during a period when marketers are usually storing large amounts of butter.

Alfalfa in Northern Central Valley Edging Close to $300/Ton (p. 2):
    Dairy producers in the northern Central Valley of California have watched top-quality alfalfa prices close in on the $300 per ton mark. Quality forage is tight, as the new harvest season commences.

Feb 2011 Class III Price ($17.00 – Class IV $18.40 (p. 2):
    The Feb. 2011 cheese milk price in federal milk orders jumped $3.52 per cwt.. And Class IV milk (butter-powder) rose by $1.98. More increases ahead.

“Details” Finally Available for NMPF’s Federal Milk Order Plans (p. 3):
    Just how National Milk Producers Federation would alter federal milk orders has been a closely held secret. But following the March 7-8 approval of NMPF’s legislative package of dairy policy changes, the “details” are out. Confusing, dangerous, etc.

Dean Foods’ CEO Greg Engle$ Adds COO Responsibilities (p. 3):
    Losses in the fourth quarter of last year have caused a management change at Dean Foods. Is Gregg Engle$ up to the task?

Cheddar Test Results Done: Another Trip to Laboratory Needed (p. 4):
    Test results on 20 samples of Cheddar have been analyzed by The Milkweed. Five “suspicious” samples are prompting another round of tests, using five samples from each of the suspicious Cheddar brands. We’re testing for impaired chloride:sodium ratios – a sign that something untoward is going on in the cheese vat.

OMB Signs Off on Dairy Import Assessment Language (p. 6):
    Look for USDA to announce implementation of the controversial dairy import assessment soon. The Office of Management and Budget okayed the final language. Dairy imports will be assessed at the rate of 7.5 cents per 100 lbs. of milk (equivalent). But importers may ask for a refund at the end of the year.

Expect Big Battle Over USDA Approval for Genetically-Engineered Alfalfa (p. 5):
    Watch the fur start to fly over USDA’s approval of genetically-engineered alfalfa. No equine safety studies have been conducted. It’s likely no human safety studies have been conducted. Why human safety studies for a forage seed? You’ve heard of alfalfa sprouts, eh?

Canadian Cheese Standards Upheld (p. 5):
    A Canadian appeals court has ruled against appeals by Kraft Canada and Saputo Cheese to dumb down standards for ingredients in natural cheeses. Bravo!

Feature story #1: DMI “Fat Cats” Compensation Jumped $131,308 in 2009 (p. 6):
    This is one of our “Stories of the Month” – available in its entirety here.

Feature story #2: NMPF CEO Kozak Enjoyed $722,593 Salary in 2009 (7):
    This story is also available as a “story of the month.” Read all about it here.

Why Are USDA & California Nonfat Dry Milk Powder Prices Lagging 45-50 Cents Behind CME? (p. 8-9):
    Writer John Bunting takes a long look at how nonfat dry milk is valued. His conclusion: it’s a scam that robs dairy farmers of honest value that should be in their milk checks.

Lower SCC Milk Levels? Look at the B-I-G Mastitis Picture (p. 10):
    Bill Gehm, of the CoPulsation™ firm details how a major portion of mastitis problems may relate to poor performing equipment. With proposals ot tighten SCC regulations, lowering incidents of mastitis is economically very important.

Global Protein Shortages? Animal Products to the Rescue. (11):
    Writer Paris Reidhead informs us about the importance of protein in the human diet and shows how the world wants more quality dairy proteins.

February “Big Freeze” Disrupts New Mexico Dairy Plants (p. 11):
    More than 100 trailers of farm mill k had to be dumped in New Mexico recently. Why? Because a mid-February blast of frigid, Arctic air froze pipes in big cheese plants’ raw milk intakes.

Milk in, Milk Out: Southeast Producers Pay Coming & Going (p. 12):
    Dairy farmers in the Southeast are focusing on THE question: Why can’t their regional dairy cooperatives pay an honest blend price?

DFA Members Griping About Quality and Volume Premiums (p. 12):
    DFA continues to find new and unique ways to take money from members’ milk checks. Hauling and milk quality are but two of those ways.

Dairy Livestock Strategies in these Volatile Times (p.13):
    Dairy and beef are changing fast, due to high grain costs, high cull prices, and high milk and beef prices. We offer some strategies.

Diesel Fuel Headed to $5/Gal., Who’ll Pay Higher Hauling Costs? (p. 14):
    We pinpoint rising energy costs and hauling costs as a future source of friction between dairy co-ops and their members. Why can’t the costs come out of the buyer?

Why Not? (p. 15):
    Editor Pete Hardin explains two of the projects that need doing the most for dairy integrity: a)selling boxes of Wisconsin cheese (approx 10 pounds apiece) for $55 - $60 per pound. This endeavor would boost incomes for dairy producers, cheese plants, and working folks.

Guest Opinion: Why I Support NMPF’s Foundations for the Future (p. 16):
    California dairy producer Geoffrey Vanden Heuvel details his reasons for supporting The “Foundation for the Future” proposal from NMPF. The space was granted out of respect for Mr. Vanden Heuvel, not National Milk.

February 2011  Issue No. 379

Inside this months issue...

Feature Story:
Dairy “Surplus” Myth Evaporates: Few Commodities Available (p. 1):
    Read our “Story of the Month” here.

U.S. Tangled in Global Food Crisis (p. 1):
    Tight global grain supplies are causing a rush for U.S. dairy commodities.

Recent Events Blow Dairy Commodity Prices to the Moon (p. 2):
    Spectacular price increases have occurred in the past month for all three major U.S. dairy commodities: Cheddar, butter and nonfat dry milk. Export requests cannot be met. Raw milk production on both coasts is declining.

Dean Foods Reportedly Headed for Disassembly (p. 3):
    Sell-offs of Dean Foods’ yogurt businesses are just the beginning. The outlook for Dean Foods is to be sold off in parts. But what firm would want the fluid milk “part” of the business?

Checkbook Volume-Building “Payola” in SE: Dean Foods Buys Food Lion Private Label Fluid Milk Business (p. 3):
    One more time, Dean Foods has pulled out the checkbook and written a check for untold millions of dollars to a supermarket chain. That payment that sets up Dean Foods as a virtual exclusive supplier of private label packaged milk. Funny thing: Food Lion is in court, suing Dean Foods (and DFA) on antitrust charges.

Sodium Gluconate Seller Objects to The Milkweed’s Reporting (p. 3):
    A top employee of a company selling Sodium Gluconate has written an e-mail, threatening that if The Milkweed does not stop reporting that the company recommends use of Sodium Gluconate at levels up to 10% of weight of curd in the cheese vat, he’ll take legal action! We quote from that firm’s patent for Sodium Gluconate use cheese-making: “The amount of sodium gluconate is within the range of greater than zero to 10% of the weight of the curd, to result in a cheese having 0.26 to 2.8% gluconate in the cheese.

“REAL” California Milk Volume in Significant Decline (p. 4):
    Weather, mud, high grain prices, hay prices, high beef prices and financial failures are all pulling down California’s milk flow in early 2011. Plant intakes are down five percent … or more.

Wal-Mart “Withdraws” Millions of Lbs. of Butter (p. 4):
    A problem with the ink from the paper wrappers bleeding into the quarter-pound sticks of butter meant that Wal-Mart recently conducted a massive “withdrawal” of butter from its operations.

Fat Dairy Cull Prices in Mid-High “70s” (¢/lb.) Live Weight: (p. 5):
    Prices for top-quality dairy cull cows have moved quickly into the “70s” – cents per pound that is. The high end seems to be peaking about $.78 per pound, at press time. More gains in cull prices to come.

What Happened to Organic Dairyman John Boere’s Cull Cows??? (p. 6):
    Why were Modesto, California dairy producer John Boere’s ten organic cull cows and a bull, destined for slaughter, alive several days after their scheduled demise? Why were they kept at an off-site feed lot near Modesto and fed moldy, soaked hay? If this is how the organic beef processor that bought Boere’s animals operates, then may some enforcement action is due.

DFA Objects to Dean Foods’ Proposed Northeast Settlement (p. 7):
    Co-defendant Dairy Farmers of America has deluged the federal court in Vermont with more than two dozen objections to the proposed $30 million settlement involving plaintiffs’ attorneys and Dean Foods. From a strategic standpoint, DFA appears to want to throw confusion into the class of potential plaintiffs.

Big Northeast Co-op’s Charge Low Class I Premiums: Fluid Processors’ Profits Raised (p. 8-9):
    Writer John Bunting digs deep into available data to show how since 2006, the Northeast dairy cooperatives’ superpool (GNEMMA) has first lowered, and then flat-lined the published Class I premium assessed to fluid milk processors in the region. In other regions of the country, the Class I surcharges have virtually doubled since 2005. What's up? Once NJ’s Farmland Dairies was out of the picture, DFA dropped Class I premiums to keep any competing milk sellers away from the region’s big fluid milk processors’ doors.

Moisture Extremes Dampen Global Wheat Prospects (p. 10-11):
    Writer Paris Reidhead takes a long, far-ranging look at global grain supplies and needs. Conclusion: the world will be severely challenged to meet its grain needs, unless near-perfect weather is at hand for major grain-growing regions of the country. China’s grain needs are particularly desperate, as major Drought spreads across that highly-populous nation.

FDA Enforcement on the Rise: Crackdown on Drug Residues in Milk; New Food Safety Act Provisions on Dairy (p. 12):
    Mary Zanoni reviews the matter of FDA cracking down on dairy-beef drug residue violations back to the milk tank. For any dairy farmer with multiple drug residue problems in cull cows, FDA will do milk tank testing. Marketers are recommending that no milk be marketed from farms that are subject to such testing.

Giant Howrey Antitrust Law Firm Headed to Splittsville (p. 12):
    Howrey LLP – once the nation’s largest antitrust law firm – is breaking up due to financial woes. Howrey is the lead law firm for plaintiffs in the Southeast dairy antitrust cases now headed for trial in late June 2011.

Dairy Cattle Replacement Prices … (p. 12):
    Pulled up by cull prices and prospects for improved milk prices, prices for springing heifers have started up – up about $100-150 during the past month. Prices for open (unbred) dairy animals are declining.

Dairy Beef Slaughter Numbers Higher; Replacement Heifers Also Higher (p. 13):
    USDA data shows an increase in dairy cow slaughter numbers (above same-week, prior-year) that started about early October 2010 and continues to the present. USDA also reports that replacement heifers numbers are also up.

Strategies for the Unprecedented Times Ahead (p. 14):
    Pete Hardin details a few strategies for dairy farmers in these times of fast-rising prices and costs. Example: DO NOT sign any fixed-price milk contracts.

“Free-Trade” & Biotech No Solutions to Hunger (p. 15):
    Pete Hardin blows steam on the emerging solutions for global hunger from the Obama administration: “Free-Trade” and biotechnology. Neither practice is valid, Hardin argues.

Organic Farmers Howl Following USDA Approval of GE Alfalfa (p. 16):
    Writing for The Cornucopia Institute, Will Fantle details the background political pressures and shattered trusts in the organic foods community, in the aftermath of USDA Secretary Tom Vilsack’s approval of planting genetically-engineered alfalfa this spring. GE alfalfa, unlike any prior genetically-engineered corps, is a perennial, not an annual. Spread of GE alfalfa pollen, by wind, birds or bees, threatens to contaminate the entire nation’s alfalfa crop, in time, and wipe out the integrity of alfalfa raised and fed by organic livestock producers. Mr. Fantle’s article is required reading for anyone who supports organic agriculture and is skeptical of government’s ability to protect citizens from contamination by genetically engineered crops.

January 2011  Issue No. 378

Inside this months issue...
Feature Story:
Butter $ky-High; Powder Prices Rise; Cheddar Starts to Rise (p. 1):
    Read our “story of the month” here.

Dec. 2010 Class III Price (p.1)

Dairy Cull Prices Rising, Some Cows Worth More Dead than Alive (p. 2):
    The combined factors of little discretionary cash flow, high cull prices and high grain prices, leave many U.S. dairy cows worth more as hamburger than what they’d bring as milk cows right now.

“Killer Whale” vs. DFA Legal Battle Settled Pre-Trial (p. 2):
    Shucks. The legal fireworks scheduled for Jan. 3 in Minneapolis were postponed, due to settlement. This trial featured a dairy commodity trader seeking about $20 million in damages from DFA’s admitted manipulations of Cheddar markets at the CME in 2004.

Dean Foods’ Proposed Northeast Antitrust Settlement A “Mixed-Bag” – 50% Peanuts and 50% B-------t (p. 3):
    We scorn the completely inadequate $30 million proposed settlement that’s proposed to settle Dean Foods’ obligations in the Northeast private antitrust case. The Milkweed estimates that $30 million, by the time lawyers’ fees are deducted, will work out to less than 50 cents per dairy farmer per day in the region.

Schreiber to Buy Dean Foods’ WI Yogurt Plant (p. 4):
    Recent announcement of plans by Dean Foods to sell three yogurt plants to Schreiber Foods creates some serious questions about market concentration in the Midwest yogurt business.

Dairy’s REAL Seal™ Adorns This Imported Cheese (p. 4):
    It’s perfectly fine for imported cheeses to bear dairy’s “REAL Seal™” – once the sign of dairy products made in the “good old U.S. of A.” Changes in rules governing the U.S. dairy farmers’ promotion check-off have made it illegal for farmers to advertise U.S. dairy products!

“Usual Suspects” Low-Ball Year-End Nonfat Milk Price (p. 5):
    At the end of 2010, California marketers dumped almost 30 million pounds of nonfat dry milk onto the market at prices far below prior weeks’ levels. We puzzle whether these apparent “old” inventories were legally reported to USDA/NASS weekly dairy data system.

NMPF: Spring 2011 Target for Passing Dangerous Dairy Proposals (p. 5):
    NMPF ceo Jerry Kozak (the $647,000 man … at least according to salary data for 2008 filed with the IRS) warns that the dairy co-op wants to push through Congress its package of massive dairy policy changes by early or mid-Spring – ahead of the 2012 farm bill deliberations. NMPF’s policy changes would be very bad for dairy, The Milkweed warns.

U.S. Cheese/Butter Exports Grow When CME Prices Low (p. 6):
    Writer John Bunting researches and analyzes the correlation between low Cheddar and butter commodity prices at the Chicago Mercantile Exchange with peaks in U.S. exports of those items.

June-October 2010 Fluid Milk Sales in the Tank (-2.54%) (p. 7):
    Something is seriously wrong with fluid milk sales. Nationally, fluid milk sales declined by 2.54% during June-October 2010, compared to 2009’s figures.

January 3-7: Butter Prices Start New Year with a BANG (p. 7):
    At the CME, during the first week of January 2011, Grade AA butter prices zoomed up by 43 cents per pound. Nationally and globally, butter supplies are very tight.

BAD Idea: Gov’t Mandate for Higher U.S. Fluid Milk Solids (p. 8-9):
    Bad ideas may resurface. That’s the case with the proposal to adopt California-style milk solids standards for the U.S. Who would pay for that luxury? Consumers? Processors? Dairy Farmers?

Corn-based Ethanol in Gasoline: Still Poor Public Policy (p. 10-11):
    Writer Paris Reidhead revisits the issue of corn-derived ethanol in our gasolines … and again determines, for many reasons, this product is a detriment to taxpayers and topsoils.

Deconstructing Dean Foods: Spinning-off Organic/Namebrand Division (p. 12):
    Mark Kastel of the Cornucopia Institute analyzes how the Horizon/WhiteWave segment of Dean Foods could be a better purchase by another firm: eschew supplies of organic milk from factory farms, starting with those owned by the company itself!

The U.S. Dollar & World Cheddar Prices: Unusually Close (p. 13):
    John Bunting researches the parallel fortunes of the U.S. dollar and world Cheddar prices … curious!

New Zealand Milk Flow Falling Way Off (p. 14):
    Serious drought is curtailing milk flow in New Zealand. How will NZ marketers compensate for earlier optimism that projected double-digit milk gains just a few months ago?

Who will provide this nation’s food/protein??? (p. 15):
    Pete Hardin puzzles about how a nation can pay so little heed to the fortunes of its food producers, when, in fact, laws on the books direct USDA officials powers to raise dairy farmers’ milk prices under such circumstances.

Legal or Not? The Milkweed to Test Retail Cheese Samples (p. 15):
   
We’re assembling a couple dozen samples of retail cheese for submission to a testing laboratory. We’re looking for samples of products with contents indicating that they were made using improper procedures. At issue: Sodium Gluconate – a chemical not approved for use in manufacture of cheeses with standard identities (Cheddar, Mozzarella, etc.).

What Costs for Gross Dairy Margin Insurance? Who’ll Pay? (p. 16):
    NMPF’s notion of shifting federal dairy programs to an insurance-based, “Gross Dairy Margin Insurance” (over grain costs) is not appropriate. Why should taxpayers for such a mess?

Excellent Choices for Ag Chiefs in NY, WI & MN (p. 16):
    Three sterling citizens have been newly designated as state agriculture commissioners: Darrel Aubertine in New York, Ben Brancel in Wisconsin, and David Frederickson in Minnesota.

December 2010  Issue No. 377

Inside this months issue...

Cheddar Price Declines to Squeeze Milk Prices (p. 1):
    Dairy farmers are looking at $3.50 to $4.00 less for their milk, come January 2011, compared to their peak price received this past fall. Another milk price downturn comes at a tough time for U.S. dairy farmers … who only recently climbed out of the red ink.

Nov. 2010 Class III Price $15.44 – Nov. Class IV $16.68 (p. 1):
    Manufacturing milk prices in USDA’s federal milk orders are heading down.

DFA vs. “Killer Whale” Trial Starts January 3, 2011 (p. 2):
    The first private lawsuit against Dairy Farmers of America’s spring/summer 2004 Cheddar price manipulations at the Chicago Mercantile Exchange is set to start in Minneapolis on January 3, 2011. Commodities speculator Mark Anderson seeks $20 million to cover his losses, legal fees and interest costs.

Foundation for the Future: Bad Vision (p. 2):
    John Bunting explains the dairy policy alternative being pushed by National Milk Producers Federation.

Dean Foods’ Stock Price Edges Close to $7/Share (p. 3):
    Wall Street is turning decidedly negative on Dean Foods. The firm’s stock closed as low as $7.13/share in early December, before bouncing back about $1.50 shares on the “strength” of the company’s issuing $400 million in new “senior notes” at a 9.75% interest rate!!! In other short articles about Dean Foods on this page, we report that Dean Foods was named the “Worst Performer” on the Standard & Poor’s Index by Bloomberg News. Also, Dean Foods has offered to settle for $30 million its portion of the Northeast class action lawsuit.

Serious Drought Lowering NZ Milk Output Forecast (p. 3):
    Another serious drought is hitting major parts of New Zealand’s dairy regions. Earlier optimism about double-digit milk production gains for the 2010-11 pasture season over the past season was overstated. New Zealand’s milk output will be very close to last years. Watch this one! Global dairy prices will soar if New Zealand comes up short.

Small Scale Dairy Processing: Opportunities & Risks (p. 4):
    Pete Hardin offers general insights about a growing factor in dairy marketing: small-scale dairy processing (often farmstead plants). Hardin points to yogurt and cheese curds as two fast-growing, popular products for entrepreneurs to consider.

Birth Imminent for Dairy Import Assessment (“Kozak’s Baby”) Imports Pay Half (vs. U.S. Farmer); Import Fee 100% Refundable (p. 5):
    Very soon, USDA will start collections of a dairy promotion tax on imported dairy products entering this country. This fee paid by importers is only half the amount charged to U.S. dairy farmers. Worse yet: importers may recover their deducts at the end of the year. For this “deal,” National Milk Producers Federation’s CEO Jerry Kozak helped make it illegal for the National Dairy Board to promote “U.S.-produced” dairy products.

USDA Import Rule Suspension is Big Victory for U.S. Dairy Farmers (p. 5):
    In December, USDA announced new rules for administering Section 6.25(b) – a statute that requires smaller importers that do not utilize annual dairy import quotas, not to have to forfeit those unused portions to bigger companies.

Scrutinizing the November 2010 CME Cheddar Price Crash (p. 7):
    Writer John Bunting takes a close look at recent weeks’ events in cash markets for both Cheddar and Grade A butter.

WI Ag Dep’t Sends Warning Letter Re: Illegal “Gouda” (p. 7):
    Following up last month’s revelation in The Milkweed, Wisconsin’s Department of Agriculture, Trade and Consumer Protection investigated the matter of illegally labeled “Gouda” cheese and sent warning letter to “Steve’s Wholesale, LLC” – a Sun Prairie firm responsible for the illegally labeled “Gouda.”

Feature Story #1: How Much of That “Stuff” is Really Cheddar? Dairy’s Biggest Scandal: Consumer Product Integrity
    The single most important issue facing U.S. dairy farmers is the diminished integrity of numerous dairy products sold to consumers our nation. Most of our dairy products are honest, quality foods. BUT … The practices of certain dairy manufacturers and food processors focus on a “cheap, cheaper, cheapest” approach to end products. The public – dairy farmers, consumers and honest processors – are being defrauded. Read all about it here.

Kraft Foods Denigrated Processed Cheese Quality (p. 10):
    A bit of history … how pressures from their corporate parents – Philip Morris’ “tobacco boys” for undue profits from Kraft Foods’ cheese division pushed Kraft Cheese towards cheaper ingredients.

Anaerobic Digesters: California Nixes Noxious Noxes (p. 12):
   
Environmental regulators in California are decommissioning some methane digesters on dairy farmers. Why? Because combustion of methane in those digesters creates increased amounts of nitrogen/oxygen gases – some of which environmental problems.

Beware of “Gross Margin Insurance” as Dairy Policy (p. 13):
    Pete Hardin warns that taxpayers won’t be happy about picking up the tab for mandatory “Gross Margin Insurance.” And dairy farmers won’t be happy about being forced into the program. Nor will dairy farmers like the premiums they’ll have to pay for additional insurance.

Will NMPF’s Mandatory Milk Margin Insurance Plan Violate “Plain Faith” Farmers’ 1st Amendment Rights (p. 12):
    Compelling all U.S. dairy farmers to participate in USDA’s mandatory “gross margin insurance” program is not going to sit well, we believe, with some members of so-called “Plain” faiths. The 1st Amendment to the U.S. Constitution specifies that Congress shall make no law that establishes a religion, nor may Congress prohibit citizens’ free exercise of their religion.

Reasons Why U.S. Dairy Export’ Prices Lag Behind World Prices (p. 13):
    To answer the question posed in the November 2010 issue, Pete Hardin details numerous reasons why U.S. dairy commodity exports’ prices don’t hold up to global price levels. Why? Our nation’s dairy farmers use recombinant bovine growth hormone; our 80% milkfat, unsalted butter are not globally desirable; the global benchmark for dairy protein powders is Whole Milk Powder – of which we produce relatively little; oftentimes, our packaging is substandard, and too many U.S. exporters lack their own sales forces.

CME Cheddar Prices Up/Down; Butter Way Down (p. 14):
    Block Cheddar at CME has dropped nearly 40 cents per pound since the mid-October peak price, and Grade AA butter is down about 60 cents per pound from its price peak. Cheddar inventories are ample. Butter inventories are scarce. Business as usual at CME.

Economic famine for dairy producers unless … (p. 15):
    Pete Hardin details the most critical changes needed to stabilize and improve U.S. dairy farmers’ incomes.

A. J. Bos’ Lawyers Deny U.S. EPA Requests (p. 15):
    Lawyers for California dairy investor A. J. Bos have denied a request by the U.S. EPA to conduct a large number of new tests for surface and ground water at the site of Bos’ proposed mega-dairy near Nora, Illinois. We report State EPA test results from water samples polluted by the discharge that occurred from Bos property in early October.

Feature Story #2 - New Producer Group Now Claims Half of Dues Won’t Fund Magazine (p. 16):
    Some parties became very angry about a report in last month’s issue of The Milkweed that concerned how half of the $80 dues sought by a start-up dairy farmers’ group were supposed to be spent for a subscription to AgribusinessDairyman edited by Tom Van Nordwick, one of the organizers of the fledgling National Dairy Producers Organization. The Milkweed’s “clarification” of the matter quotes two NDPO directors (Rozwadowski and Tewksbury) who stated in mid-October that half the dues would go to the magazine subscription. Read the story here.

Want Faster Delivery of The Milkweed? Upgrade to First Class “Fast Pak” (p. 16):
    Delays in receiving this publication – particularly on the East and West Coasts – means we’re pushing current subscribers to upgrade their second class subscriptions to speedier First Class mailings. We use a handy chart to help interested persons calculate the additional costs ($4/month) of this upgrade to speedier service.

November 2010  Issue No. 376

Inside this months issue...

Grain Prices Spike; CME Cheddar Prices Collapse (p. 1):
    Two commodity price trends are going in opposite directions: grain prices and Cheddar. At the Chicago Mercantile Exchange, block Cheddar prices have lost about $.37/lb. in the month. Dairy farmers are once again headed for cash flow Hades unless Cheddar prices bounce back.

Why Are U.S. Dairy Commodity Prices So Low? (p. 1):
    As of late October/early November, U.S. dairy commodity prices were far below global prices. Cheddar was $.46/lb. below Oceania prices, nonfat dry milk/skim milk powder was $.1875 per pound below Oceania prices, and U.S. butter was $.32/lb. below Western Europe’s butter prices. We’ll explore this issue in greater detail next month.

October 2010 Class III Price $6.94 – Oct. Class IV $17.15 (p. 1):
    Take a good look.

USDA Secretary Has Authority to Raise Milk Prices Due to High Feed Prices, to Assure Adequate Milk Supply (p. 2):
    It’s the law. USDA Secretary Vilsack has the power to review milk prices and raise them, on a regional basis, when milk prices are inadequate (relative to grain prices) to sustain an adequate milk supply. Section 608 (c) 18 of USDA’s rules grants that power.

Poor Q3 Results Pull Down Dean Foods’ Stock (p. 2):
    Net earnings of only $23 million by Dean Foods soured investors even further. Following the November 9 announcement of Dean Foods’ third-quarter earnings, Wall Street shaved off more than a quarter of Dean Foods’ stock value, which currently rests somewhere in the “7s” ($/share).

New Zealand Production Slightly Above Last Year (p. 2):
    October saw New Zealand milk volumes about three percent above last year, BUT that figure is far from the double-digit gains that New Zealand dairy leaders were projecting for the 2010-11 pasture season.

Hillary Clinton Yaks Up Pacific Free Trade Deal in NZ (p. 3):
    U.S. Secretary of State Hillary Clinton was gabbing up “Free Trade” on a recent stop in New Zealand. Dairy farmers should fear any Pacific nations’ “Free Trade” deal, because that would give New Zealand dairy products a free ride into the U.S.

Pizza Hut Lawsuit vs. DFA: Revealing Leprino Cheese Sales Data (p. 3):
    The recent lawsuit by the parent firm of Pizza Hut, in tandem with franchise owners that control more than 3000 Pizza Hut restaurants in the U.S., details some information on cheese purchases by Pizza Huts. Interesting reading.

IRI Retail Sales Data: Cheese (-1.0%) & Fluid (-3.3%) (p. 3):
    The latest retail dairy sales data is out, and ugly. For the three month period ending September 26, U.S. fluid milk sales data fell 3.3% below year-ago levels. Meanwhile, total cheese sales dropped one percent for that same time-frame.

Democrats’ Election Fiasco Upends DOJ’s Antitrust Strategy (p. 4):
    Loss of control in the U.S. House of Representatives by the Democrats probably means that there will be no legislative attempts to rein in agricultural antitrust in the next two years. The whole intent of the series of five agricultural antitrust hearings around the country by U.S. Departments of Justice and Agriculture was to gain as basis for legislative proposals to take to Congress. Good luck on that in the 2011-12 legislative cycle.

Election Reshuffles Senate & House Ag Committees (p. 4):
    The current chair persons of both the Senate and House agriculture committees are out. Senator Blanche Lincoln (D-Arkansas) lost her re-election bid. And Colin Peterson (D-Minnesota) is now in the minority party, so he’s out as chair for 2011-2012. Big question: will John Boehner’s regaining the House Speaker role mean that federal agricultural programs’ costs will REALLY be addressed?

Foremost Farms Offers to Redeem “Old” Equities at $.60 on the $1(p. 5):
    Foremost Farms will redeem “pre-1995” equities held by present and former members at the rate of 60 cents on the dollar. Parties may apply for the pay-back by December 1. All equity pay-outs are at the discretion of the board of directors at the co-op.

FDA Food Import Detention List Unavailable (p. 5):
    After several months, the apparent excuse that technology problems are causing the federal Food and Drug Administration to not post its monthly lists of detained food imports starts to look suspicious. What’s going on??? What is Sodium Gluconate? (p. 5): Writer John Bunting takes a close look at sodium gluconate – the chemical being illegally used in cheese vats as part of a 1-2 process to dramatically boost cheese yields.

Feature Story: “Product of Germany” – “Wisconsin Cheese” It’s NOT (p. 6):
    No other product so defines a single state in the minds of American consumers as “cheese” conjures up Wisconsin. But … JS Brands’ German Smoked Gouda, English Stilton, French Port du Salud being marketed as real “Wisconsin Cheese” is anything but! Read our feature story here.

Why did Dairylea/DMS Keep Marketing Elmer Johnson’s Milk??? (p. 7):
    The Elmer Johnson farm at 2722 State Route 205 near Mount Vision, New York was littered with dead milk cows, the milk quality was terrible, and the premises were a mess. Why did Dairylea Co-op keep marketing the milk from that farm? Because that’s where Dairylea president Clyde Rutherford’s cows were kept … all part of a scheme so that bewigged old phony (Rutherford) could call himself a “dairy farmer” and keep co-op presidency that was rewarding him to the tune of about $500,000 annually.

50% of New Dairy Producers Group’s Dues Go for Magazine Subscription (p. 7):
    The fledgling “National Dairy Producers Organization” is putting half of its $80/year membership dues into a full-rate subscription for a dairy magazine: AgribusinessDairyman. That magazine is normally distributed free to dairy producers in several western states. Is this how the new dairy organization plans to throw away dairy producers’ dues??? UPDATE: Read our December 2010 update on this issue here.

Exports, Ethanol Subsidies & Weak U.S. Dollar: All Add Up to California Feed-Price Crunch (p. 8-9):
    John Bunting takes a long, close look at the factors boosting U.S. corn prices, as well as California milk production. Conclusion: the recent spike of grain prices, in tandem with falling Cheddar prices, means that California dairy producers’ toughest times lie directly ahead.

Too Much Fat? New York Times Smacks USDA/DMI Cheese Promotions (p. 9):
    On November 9, the New York Times carried a long review of Dairy Management Inc.’s cheese promotion activities, concluding (wrongly, we think) that growing cheese consumption is the prime cause of this nation’s obesity trends. If anything, the paper gave more credit to DMI’s cheese promotion activities than perhaps are merited. The article contrasted cheese promotion efforts, compared to USDA’s dietary messages aiming to reduce fat content.

Food Chains: Phosphorus May Be the Weakest Link (p. 10-11):
    Paris Reidhead explores the complex worlds of plant and animal energy metabolism – and the roles of the element phosphorus therein. Summary: phosphorus (in its various forms) is critical to plant growth and animal well-being. Reidhead details how very few countries control the global phosphate supplies. The supplies are to a degree “cartelized.” And global sources are increasingly scarce.

10/27/10: EPA Final Compliance Demand to A. J. Bos (p. 11):
    The federal Environmental Protection Agency has sent a letter to the lawyer for A. J. Bos, demanding compliance with a long list of requests for information detailed earlier this year (which Bos has refused to provide). EPA’s letter demands compliance, or the implicit threat of enforcement action will be taken. The pollution running off Bos’ farm near Nora, Illinois into a stream has brought down the wrath of federal and state agencies upon Bos’ unfinished mega-dairy.

Replacement Heifers: Big Challenge for “Organic” CAFO Dairies (p. 12):
    Mark Kastel, co-director of The Cornucopia Institute, details how the purchase of heifers that have not been raised organically provides a big cost advantage to “organic” mega-dairies (compared to smaller, conventional organic dairies that raise all their heifers).

RBGH-Free Dairy Product Trends Continue (p. 13):
    Rick North writes about the continued expansion of the number of dairy processors/marketers offering products they certify are free from milk of farmers where cows are injected with synthetic growth hormones.

Upstate-Niagara: rbGH/rbST “Free” on 4/1/11 (p. 13):
    The biggest dairy cooperative in western New York State will not accept milk from herds where cows are injected with Posilac – the synthetic bovine growth hormone that stimulates milk production.

CME Cheddar Prices Crash; Grade AA Butter at $2.00/lb. (p. 14):
    The pain will spread. As of press time, CME Cheddar block prices had crashed by $.37 per pound. That move pulls down inventory values, and farm milk prices will follow. Butter supplies remain tight.

“High” grain prices: new realities (p. 15):
    Editor/publisher Pete Hardin details how dairy farmers’ well-being would be best served, quickly, by enforcing existing federal/state rules. Areas for heightened use of existing laws/regulations include: raising milk prices due to higher grain costs (USDA -- Section (c) 18], enforcement of cheese standards, and antitrust enforcement.

MI Group Details Vreba-Hoff Bankruptcies, Environmental Violations (p. 16):
    A citizens’ group in Michigan that opposes environmental pollution by mega-dairies has issued a list of bankruptcies of the “Vreba-Hoff” dairies in Michigan, Ohio, and Indiana – a total of 24! Further, the group (Environmentally Concerned Citizens of South Central Michigan) lists more than 1000 instances of environmental violations in the Hudson, Michigan area alone. The “Vreba-Hoff” model generally involved transplanting dairy producers from The Netherlands and setting up mega-dairies (upwards of 700 cows on very few acres).

Michigan Milk Pays $1.13/Cwt. Bonus on September 2010 Milk (p. 16):
    Michigan Milk Producers Assn. paid out $1.13 per cwt. on members’ September 2010 milk volume as a “bonus” for accumulating annual net revenues. The money was welcome. MMPA is well-structured, financially.

October 2010  Issue No. 375

Inside this months issue...

Grain Price Spike to Stress Nation’s Future Milk Supplies (p. 1):
    Fast-rising prices for corn and soybeans mean big increases in costs for dairy farmers who buy large quantities of grain to feed their herds.

Pizza Hut & Big Franchisees Sue DFA: Cheese Costs Damages Alleged (p. 1):
    Dairy Farmers of America has been sued by the owner of Pizza Hut and three giant franchisees for alleged damages caused by DFA’s manipulations of Cheddar at the Chicago Mercantile Exchange. Unfortunately (for DFA), the co-op has already settled with the government on the matter, paying a $12 million fine.

Sept. 2010 Class III Price $16.25 – Sept. Class IV $16.76 (p. 1):
    Prices for manufacturing milk continue climbing, based on recent strength in prices for cheese and butter.

Chobani Yogurt’s Sales Growth Spurs Big Expansion (p. 2):
    A New York-based yogurt company, Agro Farma, is making a $100 million expansion in its facilities to help handle big sales gains for the firm’s popular, Greek-style Chobani yogurt.

NZ Milk Output Far Below Expectations (p. 2):
    After presuming double-digit gains in milk output for New Zealand during the 2010-2011 pasture season, bad weather in recent weeks is putting a severe damper on the Kiwi’s flow of farm milk. NZ dairy cows came off last pasture season in reduced condition, due to widespread drought. Early into the current production season, a foot of snow fell on much of NZ’s South Island, denying cows access to vital grass for several days. Bottom line: Fonterra will be stressed finding enough dairy products to sell to Asian buyers, and may have to turn to the U.S.

Russia Bans U.S. Dairy Imports in Late September (p. 3):
    Claiming that the U.S. had repeatedly failed to Russian concerns about veterinary health certifications, Russia banned further import of dairy products from the U.S. at the end of September. This moves comes following heavy Russian purchases of U.S. dairy products so far in 2010.

Rabobank Sues Vreba-Hoff Units; Over $55 million sought (p. 3):
    Rabobank, the Netherlands-based agricultural lender, has filed legal actions against the Vreba-Hoff dairy empire in the U.S. At issue: some $55 million in unpaid loans and other liabilities.

Early Harvest Corn Prices Surprise Dairy & Grain Industries (p. 4):
    U.S. corn prices have basically kept climbing since mid or late August 2010, as the harvest has commenced. The Milkweed discusses the multiple factors driving up corn prices.

Corn Prices: Other Shoe –Poor Quality Carryover – Yet to Fall (p. 4):
    In the analysis of The Milkweed, the remaining poor quality of the carryover 2009 corn crop means that a certain percentage of that corn is really unfit for human or livestock/poultry use.

Antitrust & Cheese Price-Fixing Lawsuits Threaten DFA’s Future (p. 5):
    Dairy Farmers of America faces more than a half-dozen serious private lawsuits charging various antitrust or commodity cheese manipulations. The potential impact on DFA’s operations cannot be understated.

Killer Whale Wins Key Points vs. DFA (p. 5):
    The lawsuits by Mark Anderson and his commodity business, Killer Whale Holdings, LLC, vs. Dairy Farmers of America gained great traction when a federal judge in Minnesota ruled that the statute of limitations for the plaintiffs’ commodity manipulation started on December 15, 2008 – when DFA’s settlement for Cheddar price rigging at the Chicago Mercantile Exchange was publicly known.

NZ Dairy Leader Caught Up in “Induced Calving” Scandal (p. 6):
    Fonterra board chairman Sir Henry van der Heyden is caught using an unethical, banned animal husbandry practice to squeeze every last drop of milk from his dairy herds.

Feature Story #1: Clyde Rutherford’s $750,000 Luxury Mansion in New JERSEY (p. 6):
   
How can a Dairylea director, who alleges to represent that co-op’s District 1 (east-central New York), live large in a New Jersey a fancy mansion in central New Jersey? Read the story here.

Scenic Central Co-op Members Benefit from Cash Retirement Plan (p. 7):
    A small dairy cooperative in Wisconsin – Scenic Central – has a member program that shifts five cents per cwt. into a dedicated retirement program for participating members. Members may match or exceed the co-op’s contributions.

Why NMPF’s “Foundation for the Future” is B-A-D (p. 7):
    In The Milkweed’s analysis, the farm policy proposals from the dairy co-op lobby are fatally flawed. National Milk Producers wants to de-regulate Class III (cheese) milk from USDA’s federal milk orders, and then use a competitive survey price of what prices cheese plants pay for their milk as a basis for Class I (fluid) prices. Our problem with this fallacy: there are major buyers of cheese milk that do not pay competitive prices, such as Leprino Foods (which is supplied almost exclusively with a long-term contract by DFA).

Feature Story #2: Low-Ball Nonfat Dry Milk Pricing is Continued Drain on Financial Drain on Dairy Farmers Milk Checks (pp. 8-9):
  
 If one believes the CEO of the nation’s milk powder pricing cartel, his explanation for the drop in U.S. nonfat dry milk prices since early June 2010 is simple: old-fashioned supply and demand. Trouble is: the facts disprove Mr. Lewis’ continued prevarications. Read the story here.

DO NOT Sign Fixed-Price Contracts (p. 9):
    Many marketers are putting pressure on dairy farmers to sign long-term, fixed-price milk contracts. We advise against that practice.

Powder Imports Depressing Chinese Farmers’ Milk Prices (p. 9):
    What do Chinese and U.S. dairy farmers have in common? Their milk prices are being reduced because of imports of dairy protein powders.

Chinese Data Shows $.30/lb. Higher Milk Powder Import Prices (p. 9):
    Data between the Chinese and U.S. governments show a serious divergence in prices for U.S. milk powder sent to China. The U.S. data shows the product going out of the country for approximately $1.14 per pound in recent months, while Chinese data shows the price of nonfat dry milk imported from the U.S. at $1.44 per pound.

“Fly Farm” Produces Protein, Reduces Greenhouse Gases (p. 10-11):
    The world of protein is changing. Writer Paris Reidhead explores an experimental process operated by Eco-Proteins, Inc., that uses common houseflies to digest the wastes in manure, helping reduce air pollution. Then, the adult flies are captured, dried, and used to create a high protein meal for poultry, swine and fish-farming.

Federal Appeals Court Overrules Ohio’s “rbGH/rbST” Milk Label Rules (p. 11):
    Mary Zanoni writes about the recent federal appeals court decision that overturned Ohio’s restrictions on claims of “rbGH” or “rbST” “Free” consumer dairy products.

Feature Story #3: IDFA Form 990: Connie Tipton’s 2009 Compensation was $1 Million+ (p. 12):
   While the nation’s dairy farmers financially starved last year, the head of the nation's sole processors lobby group was made “a million dollar woman” in 2009. Read all about it here.

Dairy Livestock Price Picture: Lots of Uncertainty (p. 13):
    Pete Hardin details present and future considerations for dairy livestock prices. Must reading.

Wisconsin Animal Health Officials Dealing with Bovine TB Herds (p. 13):
    A handful of dairy herds in Wisconsin are under “trace-back surveillance” for Bovine Tuberculosis. A couple hundred animals exposed to imports from problem herds in Texas and Ohio have already been slaughtered, with perhaps another couple hundred animals headed for the abbatoir.

Cash Cheddar Prices Gain, Grade AA Butter Slides Back a Bit (p. 14):
    In the past month, commodity prices for Cheddar cheese and butter are up, but butter has slid back about a nickel. Great uncertainty makes the dairy industry nervous. What’s ahead???

2012 Farm Bill Plans? NONE of the above. Just enforce existing laws. (p. 15):
    Pete Hardin explains how the U.S. dairy industry doesn’t need a whole bunch of new laws and programs. What’s needed: enforce a perfectly fine set of existing laws and rules, which, for some reason, federal bureaucrats are ignoring – from antitrust to FDA food standards.

IL Atty. General Investigating A. J. Bos’ “Deep Purple” Stream Pollution (p. 16):
    The Illinois Environmental Protection Agency has requested the state’s Attorney General to investigate illegal discharge into a stream by the unfinished Traditions South Dairy, near Nora, IL. On October 1, a neighbor found the stream running off Traditions South property bright purple. Subsequent private testing of water samples showed Biological Oxygen Demand at 410 – more than TWICE the pollution factor contained by raw sewage!!! We carry color pictures of the stream and site.

September 2010  Issue No. 374

Inside this months issue...

Feature Story #1 -- Butter, Cheddar Prices Strengthen; Far Higher Milk Prices Ahead (p. 1):
    See our first “story of the month” for September 2010 here.

Aberrant Weather Disrupting Global Food Output & Reserves (p. 1):
    The global wheat shortage – which must be viewed as more than just a one-year phenomenon – is the tip of the iceberg in terms of far wider issues of global food reserves. Serious concerns are growing about the world’s ability to feed itself in coming years.

August 2010 Class III Price $15.18 – August Class IV $15.61 (p. 1):
    Prices for manufacturing milk in USDA’s federal milk order program keep climbing, based on rising dairy commodity values. And there’s more in the pipeline.

Wall Street Boosts Dean Foods’ Stock on Dannon Purchase Rumor (p. 2):
    Late August/early September saw Dean Foods’ stock price perk up a bit, based on rumors of a possible acquisition by the French-based yogurt/bottled water giant Dannon. Folks watching Dean Foods’ demised stock and operating conditions puzzle why Dannon would want the whole shebang, since fluid milk processing is so low-margin.

Global/Dairy Trade Early September Auction Prices Up 15% (p. 3):
    The early September auction of dairy commodities conducted by New Zealand dairy trade giant Fonterra saw prices increase about 15% compared to the August auction.

No “Progress” on China’s Ban or EU’s 400,000 SCC Rule (p. 3):
    Still no word on China’s delayed ban of U.S. dairy products and ingredients. And gov’t reps on both sides of the Atlantic are still blathering about the European Union’s proposed ban on milk from U.S. milk trailers exceeding 400,000 parts per milliliter.

May-July Cheese & Fluid Retail Sales Declined (p. 3):
    For the latest three month period, fluid milk and cheese sales at retail declined. The fluid sales decline of 3.1% (vs. same period in 2009) is a serious problem.

Weather Events Threaten Global Wheat Reserves (p. 4):
    Critical issue! Global wheat production has been impaired in many key wheat-producing nations in 2010. Likelihood is, particularly in drought-scorched Russia and flooded-out Pakistan, that normal planting of the 2011 winter wheat crop has already been lost.

Hamburger Supply/Demand to Lift Cull Prices (p. 4):
    Tight commercial beef numbers and strong hamburger demand will dramatically increase demand for dairy cull cows to end up between a sliced hamburger bun. Watch for big boosts in prices paid for quality dairy cull cows.

Politics Offers Dairy Farmers No Short-Term (p. 5):
    Don’t waste your time on politics. Nothing dairy-wise will happen before the 2012 Farm Bill (which will take effect later in 2013). The dairy supply-demand situation is changing fast. The political landscape could change dramatically in November, with Democrats losing control of the House and/or Senate.

Farmers Face Double Whammy: Free Trade, Import Assessment Collide (p. 5):
    Here’s an evolving mess. On one hand, dairy importers want to optimize their advantages under a proposed rules change that would assess imported dairy products a “promotion fee. On the other hand, the European Union is seeking, through global trade rules, to disallow U.S. cheese marketers to use traditional names for cheeses made in America. Names in conflict could include: Cheddar, Parmesan, Muenster, etc., etc.

Feature Story #2 -- More $$$ Coming in the Milk Check (p. 6):
    Read our second “story of the month” here.

Four Ex-Employees of Montana Dairy Co-op Indicted (p. 6):
    The federal Justice Department has indicted four former employees of Country Classics Dairy (Bozeman, MT) for theft of hundreds of thousands of dollars. Ex-CEO Mike Monforton and the McCown “gang” engaged in a scheme that saw personal credit card expenses charged off against the cooperative, as the bookkeeper Jeanette McCown oversaw the scam.

Foot and Mouth Disease – A Potential Imported Disaster for Dairy Producers (p. 7):
    The president of R-CALF USA, Max Thornsberry, DVM, lays out the scary scenario of how relaxed “Free Trade” rules and oversight on meat imports entering the U.S. could lead to a devastating Food and Mouth Disease epidemic here. Thornsberry explains how hundreds of farms in England were depopulated of creatures and all buildings were leveled and destroyed in England about a decade ago. Some 80 British farmers whose farms were wiped out committed suicide!

Global Financial Woes Pulled Down U.S. Milk Prices (p. 8):
    Writer John Bunting takes a long look at two subjects: 1) how the global financial crisis in mid-2008 pulled down U.S. milk powder exporters’ ability to move out product, despite continuing global demand, and; 2) how the resulting credit crisis has financially devastated U.S. dairy farmers, despite continued strong demand for their dairy products. Thought provoking!

Sodium Gluconate Controversy Grows (p. 9):
    Writer John Bunting again digs into the illegal additive being used in cheese vats to boost cheese yields: Sodium Gluconate. National Milk Producers Federation – the dairy co-op lobby – has issued an early, limp excuse for the practice. Guess where most of the Sodium Gluconate used in the U.S. comes from … China!

Egg Recalls: Disaster Long in the Making (p. 10):
    Writer Paris Reidhead delves into the recent scandal involving Salmonella contamination of eggs by huge egg factory farms in Iowa. Lots of insightful facts here … make a person want to buy home-produced eggs.

Lew Gardner, DFA Corporate Director, Files Bankruptcy Again (p. 11):
    Lew Gardner, who sits on the corporate and regional boards of Dairy Farmers of America, has filed bankruptcy AGAIN. The Milkweed digs through Gardner’s embarrassing bankruptcy filing of May 6, 2010 to show how “Lew the Screw” basically repeated his filing of 2006. Gardner’s bankruptcy papers show he received $17.00/cwt. for his milk in March 2010 (a couple dollars higher than his neighbors), and earned over $17,000 as a corporate director in 2010, prior to his bankruptcy filing. Gardner still owes Agri-Financial Services (a DFA/Dairylea lending subsidiary) about $700,000 for the unpaid balance on a $1.5 million THIRD MORTGAGE on Gardner’s 100-acre farm and herd of scrub Holsteins. HOT STUFF!

Northeast Dairy Producers Antitrust Claims Proceeds to Discovery (p. 12):
    The Northeast class action lawsuit against several dairy cooperatives and fluid milk processors has been given the “green light” to proceed to discover by the presiding federal Judge in Vermont. Interestingly, the judge ruled that the regional over-order pricing agency (GNEMMA) does not have Capper-Volstead protection in the lawsuit.

Foremost Farms: State Ward (p. 12):
    The Milkweed gives Foremost Farms a good kick in the kiester. After glomming a secretive $3.4 million grant from the state of Wisconsin earlier this year, Foremost has now received $45 million in tax credits for cheese plant expansion. And don’t forget that this co-op is holding on to 20 years’ worth of “retained earnings” from members.

Rising Milk Prices Will Pull up Dairy Livestock Values (p.13):
    Pete Hardin details how fast-rising farm milk prices will drag up values of all dairy livestock. BUT these anticipated livestock price boosts may wait a little while, until dairy farmers pay down some bills and loans.

Southeast Antitrust Case Gains Class Certification (p. 13):
    At long last, the presiding judge in the Southeast dairy producers’ class action antitrust cases levied against Dairy Farmers of America, Dean Foods, et al., has gained certification of class – an important step to move forward to trial.

CME Butter at $2.2250/lb., Cheddar Rising; Powder Waking Up (Finally) (p. 14):
    Editor Pete Hardin surveys the dairy commodity price and marketing scene, revealing how tight cream and butter are. Scarcity of (and high prices for) milk are slowing down cheese output at some cheese plants.

Strategies to Survive and Prosper in Better Times (p. 15):
    Pete Hardin starts what should be a longer-running discussion on how dairy farmers can survive and prosper as they come out of tough financial times and enter a period of higher milk prices. Rule #1: DO NOT, REPEAT, DO NOT lock in fixed-price milk contracts for anything that does not have a “2” in front of it.

A.J. Bos’ Lawyers Tell U.S. EPA to “Bug Out” (p. 16):
    In the continuing battle at Nora, Illinois, lawyers for Californian dairy impresario A.J. Bos have told the U.S. Environmental Protection Agency that they will not respond to the July 1, 2010 demands by EPA for further, extensive testing of surface and groundwater flow at the site of Bos’ half-built, mega-dairy in northwestern Illinois. Bos’ attorneys claim that EPA has such jurisdiction. The Milkweed also reveals correspondence from the Illinois Department of Environmental Protection that shows A. J. Bos never submitted the proper form, nor did he pay the related fee, for the required IEPA “Section 401 Water Quality Certification Fee Worksheet.” Without that document, A. J. Bos could not legally operate his mega-dairy. Yet Bos (and his gang) have widely blamed local activists for delaying completion of his “Monument to Stupidity.”

Ernie Yates “Back to Work” on January 1, 2011 (p. 16):
    Ernie Yates, whose intended employment shift to a competitor was blocked by Dean Foods lawyers, will start back to work in milk procurement in early January, 2011.

August 2010  Issue No. 373

Inside this months issue...

Future Milk Prices? Up? Sideways? Down? (p. 1):
    Pete Hardin explores the major factors that could influence coming months' farm milk prices -- for better or not. Those factors include: weather events that are depresssing farm milk volumes and components content; continued strong milk and cheese production (at least through June), declining retail demand for cheese and fluid milk, unduly low butter production and inventories, strong demand for hamburger, and desperate financial conditions on many U.S. dairy farms. We project both reduced U.S. farm milk output and reduced demand.

July 2010 Class III Price $13.74 -- July Class IV $15.75 (p. 1):
    USDA's measures for cheese and butter-powder milk continue rising. Strong butter prices provide much of the monthly gains. More gains ahead.

Butter, Cheese Commodity Strength Building Stronger Milk Prices (p. 2):
    At press time, with CME prices for Grade AA butter pushing $1.90 per pound and block Cheddar just over $1.60 per pound, momentum for the best farm milk prices in two years is in place.

Bovine TB Trace Backs Blanket 75 Dairies in 20+ States (p. 2):
    Under the radar screen, the U.S. dairy industry is building an unfortunate track record of Bovine Tuberculosis trace backs. A "trace back" occurs when animals from a TB-infected source are shipped to other premises. Problem herds in Texas and Ohio are the major sources of these trace backs.

global/Dairy Trade: August 6 Auction prices down (p. 2):
    Once again, Fonterra's monthly auction of dairy protein powders and anhydrous milk fat declined -- pointing to looser supply-demand conditions in the global dairy market place.

Wheat Prices Surge: Weather Events & Export Ban Tighten Global Supplies (p. 3):
    The big news in grain is W-H-E-A-T. Weather problems in Russia, India and Canada have caused deep concerns about global wheat supplies. Prices are rising. Russia invoked a wheat export ban in early August -- jolting the global grain trade.

Feature Story: Cheese Importers Want to Use Dairy's REAL Seal!! (p. 4):
    Remember dairy's REAL Seal? Due to changes in federal laws, U.S. dairy promotion efforts may not emphasize U.S.-produced dairy products any more! So, cheese importers are requesting details how they can use dairy's icon on their imported products. Read all about it here.

April-June 2010 Retail Sales Eroded for Cheese/Fluid Milk (p. 5):
    For the 90-day period ending June 27, 2010, retail sales for both cheese and fluid milk declined significantly. This problem is serious.

Loss or REAL Seal: Only One of Many Import Assessment Dangers (p. 5):
    We explain how the "dumbing down" of dairy's REAL Seal is just one of many brain-dead elements in dairy promotion leadership's inept pursue of a promotion check-off on dairy imports.

Posilac, IGF-1, and Cancer: the Medical Train Wreck Continues (p. 6-7):
    Writer Paris Reidhead details a long medical research history linking development of certain cancers (including breast and prostate) to elevated levels of IGF-1 in blood. IGF-1 content in milk is dramatically elevated by injecting lactating dairy cows with recombinant bovine growth hormone (rbGH -- marketed as "Posilac" by Elanco). Despite FDA's claims to the contrary, it is commonly believed that casein (a milk protein) ushers milk-borne IGF-1 through the human stomach and into the bloodstream. Reidhead also presents a chart depicting annual milk duct cancers in post-menopausal women -- data showing a tremendous spike following commercial introduction of rbGH in 1994.

Feature Story #2: Big Cheese Yield Gains, But Sodium Gluconate is Weak Link in High-Tech Cheese Vat Shenanigans (p. 8-9).
    See our "Story of the Month" written by John Bunting here.

Recession and Farm Milk Prices (p. 10):
    John Bunting details how farm milk prices dropped during the most recent recession (Fall 2007 through Fall 2009), but that consumer prices for dairy products dropped minimally in that period. Somebody made a lot of money off the farmer's milk price drop.

Dean Foods -- Playing the Organic Shell Game (p. 11):
    Mark Kastel of the Cornucopia Institute details how Dean Foods is shifting to non-organic inputs in various food items that were once marketed as organic, or using organic ingredients.

USDA Bans Organic Certifier from Working in China (p. 11):
    USDA has banned the Organic Crop Improvement Assn. (OCIA) -- one of the nation's biggest and (supposedly) respected certifiers of organic crops and foods -- from further activities in China. OCIA used organic certifiers with ties to China's government. Will Fantle of the Cornucopia Institute wrote this story. His organization has long been critical of "organic" foods coming from China and alleged failures in oversight by certifiers.

June 2010 Powder Exports Up, But Prices Lag (p. 11):
    John Bunting shows how milk powder exports in 2010 are up, volume-wise, but prices (per unit) are down. John points out some late-June 2010 funny business involving powder prices and exports.

Federal Legislators Likely to De-Fund NAIS, But ... (p. 12):
    Writer Mary Zanoni details how both current agricultural funding bills in Congress for the October 2010 federal fiscal year have removed funding for the National Animal Identification System (NAIS). Will the brazen, "Big-Ag" interests that have promoted this program all along continue???

Dairy Cattle Replacement Prices (p. 13):
    Prices for most dairy livestock are flat, at best, except for demand for dairy cull cows to feed America's strong hamburger demand.

Food Lion Dairy Antitrust Lawsuit Gains Judge's Okay (p. 13):
    In the Southeast, complaints by Food Lion (and other supermarket chains) against Dean Foods, Dairy Farmers of America (and others) for unduly elevating raw milk prices for Class I (fluid) use have gained approval of the presiding federal judge to move ahead. However, the judge granted only one of the original complaints filed by the plaintiffs.

Former USDA Official Gaming Dairy Import Licenses (p. 13):
    An unnamed, former USDA official is gaming the dairy import license game, using shell corporations and strange addresses to pile up dairy import licenses.

Dairy Commodity Scene: Butter Tight, Cheddar & Powder Plentiful (p. 14):
    Pete Hardin analyzes the current dairy commodity scene. Butter is tight, but Cheddar is long and milk powder prices have recently declined. Watch the July-August 2010 milk production reports (and related levels of butter fat and protein) for real signals about where this industry is headed.

"Misbranded" Cheese is Killing U.S. Dairy Farmers (p. 15):
    Using John Bunting's "Story of the Month" from this issue -- which details how use of an unapproved ingredient sprinkled atop curds in the cheese vats -- is helping some cheese plants gain product yields as high as three pounds of cheese per cwt. of farm milk. That ingredient is Sodium Gluconate. These extra three pounds of cheese are causing the buildup of surplus cheese in the U.S., despite strong demand for cheese during 2009 and early 2010. Hardin calls for an action plan by concerned persons to attack use of sodium gluconate in cheese production, when cheeses of standard identity (Cheddar, Mozzarella) are being manufactured. "Help us beat the tar out of illegal use of sodium gluconate," Hardin urges. By August 25, The Milkweed will have posted on its Web site a list of specific actions that concerned person may take.

REAL Seal Needs New Management (p. 15):
    Pete Hardin proposed that the bozos who control U.S. dairy promotion give back the REAL Seal to the California Milk Advisory Board and, in turn, that body could turn over dairy's REAL Seal to a private group to run the program as intended -- promoting only U.S.-produced milk and dairy products.

EPA & Weather Pound A. J. Bos' Illinois Mega-Dairy Dreams (p. 16):
    The long-running battle by California dairy empresario A. J. Bos to complete construction of a mega-dairy site in the northwestern corner of Illinois has run into recent roadblocks that could likely be fatal to Bos' dreams. First, the U.S. Environmental Protection Agency (EPA) issued, on July 1, 2010, a demand that Bos submit plans for extensive, complex testing of surface and ground water flow patterns. Bos is also under demand to prove an earlier statement to EPA that no Karst bedrock (fractured sandstone/limestone) is underneath the site and under areas where Bos proposes to spread manure.                 
    Mother Nature also messed with Bos' plans. On July 22-24, rain storms dropped as much as 10-12 inches of water on that area. A berm in one of Bos' 14-acre animal waste storage ponds burst -- even though the pond was empty! (No cows are present at Bos' half-completed site, into which he has dropped about $30 million (estimated) to date. Pardon our enthusiasm, but The Milkweed declares this battle over and the winners will be the tight-knit group of citizens who have fought against imposition of Bos' dairy (manure) dreams in their environmentally-sensitive, beautiful corner of Illinois.

July 2010  Issue No. 372

Inside this months issue...

Farm Milk Price Improvement Finally at Hand (p. 1):
    See our July “Story of the Month” #1.

Cream Scarce, “Multiple” High (p. 1):
    Cream supplies in the U.S. are impossibly tight in early summer, driving up costs to processors.

June 2010 Class III Price $13.82 – June Class IV $15.45 (p. 1):
    Manufacturing milk prices in USDA’s federal milk orders are inching up.

DOJ/USDA Dairy Antitrust Workshop: Listening & Posturing (p. 2):
    The Madison, Wisconsin dairy antitrust workshop on June 25 drew 600+ attendees. Pete Hardin details the high points and the low points. The good news: dairy antitrust issues are hot, and DFA is running scared.

No Further Details on Threatened China’s Ban of U.S. Dairy Imports (p. 2):
    In negotiations … the headline tells it all.

Upscale Emmi Yogurt: Retail Price +$400/cwt. (Contains MPC!) (p. 3):
    At $1.59 per six-ounce cup, one might hope that Emmi yogurt firm could market their upscale yogurt without using Milk Protein Concentrate (MPC) as the second leading item in their “plain” variety. The package claims that the product is based on an “Original Swiss Recipe” – raising the question: Is MPC a legal food ingredient in the European Union and Switzerland?

NMPF’s “Foundation for the Future” – Roadmap to Hades (p. 4):
    The dairy co-op lobby has done it again – proposing a dramatic change in federal dairy policies that contains some very bad, and ill thought-out ideas. NMPF proposes junking USDA’s safety net programs for dairy producer income (MILC & the support price program) in favor of a mandatory milk margin insurance program that nets out to a $4.00/cwt. loss.

Marvin Hoekema Analyzes NMPF’s Foundation for the Future” (p. 4):
    We quote liberally from a seven-page analysis of NMPF’s proposed dairy policy changes by Visalia, California dairy consultant Marvin Hoekema. Marvin really puts the wood to NMPF.

Did ’09 Failure to Export Surplus Powder Cause Current Cheese Glut? (p. 5):
    We offer this analysis as July’s second “Story of the Month.”

Latest CWT Export Scam (p. 5):
    John Bunting writes about a recent subsidy of $1.40 per pound paid by Cooperatives Working Together (CWT) to several big co-ops to export cheese to the Middle East. With conventional cheese prices in the $1.39 range – the co-ops received roughly $2.79 per pound for their product! What a scam!

Take a Long, Long Look at Butter & Cream (p. 6-7):
    John Bunting analyses historic and present supplies of butter and cream, and their increasing demand factors. He also explains the “Cream Multiple” – which at present is near an all-time peak.

“Gulf-Hopping” Spotlights Ag Solutions to Energy Dilemma (p. 8-9):
    Paris Reidhead investigates many facts and details about the globe’s oil supply, with a special focus on facts concerning the Gulf of Mexico oil reserves. Conclusion: the U.S. must look to farmland as an increased source of its energy to provide fuel for transportation in the future.

Dairy Cattle Replacement Prices at Auction Markets Across the USA (p. 9):
    On a market to market basis, dairy livestock prices are steady to declining. Prices for springing heifers are generally down about $100 per head in the past month. Livestock prices are collapsing in Texas.

1930s U.S. Supreme Court Dairy Decisions Relevant (p. 9):
    Ah, the good old days, when the U.S. Supreme Court recognized the law of the land to be that dairy is an industry whose good fortunes are in the public interest and that USDA’s role is to sustain farmers’ purchasing power as a matter of national economic interest. The laws are basically the same, only the enforcement is lax.

Butter & Milk Powder Tight; Plenty of Cheddar (p. 10):
    Pete Hardin reviews current dairy commodity events. Butter and cream supplies are very tight.

Divergent Chorus: “Blame the Supermarkets” (p. 11):
    At the June 25 dairy antitrust workshop in Madison, Wisconsin, Pete Hardin found it humorous that directors and senior staff members of Dairy Farmers of America chose to blame the supermarkets for dairy’s pricing inequities. That same theme was reached by UCONN economist Dr. Ronald Cotterill. The “blame the supermarket” chorus is picking up members, some of whom probably want to divert attention from their own misdeeds.

Good Idea: USDA/Dairy Industry Advisory Panel (p. 15):
    At a recent dairy industry convention, Hilmar Cheese’s Rick Kaepernick suggested a formal dairy industry advisory to USDA, to try to keep gov’t bureaucrats from issuing such stupid edicts. Good idea, but a group of three to five persons would probably be better.

Organic Raw Milk Souring Political Battles Shift to Wisconsin and Massachusetts (p. 12):
    Will Fantle of the Cornucopia Institute updates the latest events in the expanding, raw milk battle front.

RR Alfalfa: Monsanto Misfires on Reporting High Court Ruling (p. 12):
    Paris Reidhead details the recent U.S. Supreme Court decision regarding USDA’s environmental impact oversight of Monsanto’s genetically-modified alfalfa. Monsanto promoted the decision as a “win” … but that’s not completely accurate.

June 2010  Issue No. 371

Inside this months issue...

Feature Story of the Month: Special Dairy Antitrust Issue (p. 1-6, 15-20):
    Read all about the major antitrust issues facing the U.S. dairy industry in this month
’s special issue.

Cheese Inventory Growth Holding Down Milk Prices (p. 7):
    Getting harder to figure … despite strong cheese sales, cheese inventories (measured by USDA) keep growing. This is one of the quirks in the dairy commodity scene.

EU Demands for 400,000/ml SCC on U.S. Farm Milk Stalled in Negotiations (p. 7):
    Dictates by the EU that U.S. farm milk be no more than 400,000 Somatic Cell Count are in negotiations. But some U.S. milk procurers are already instituting the 400,000/ml SCC requirement as a demand on U.S. farmers.

May 2010 Class III Price $13.38 – Class IV $15.29 (p. 7):
    That was May. June prices for Class III (cheese milk) look like they’ll come in below May 2010 levels.

Northeast Dairy Antitrust Case Moves to Discovery (p. 8):
    The private antitrust complaint against numerous co-ops and fluid milk buyers has received the okay from the presiding federal judge to move to discovery.

China’s Ban on U.S. Dairy Food Imports “In Negotiations” (p. 8):
    Chinese and U.S. negotiators continue trying to work out a settlement to the imminent ban by China of U.S. dairy products/ingredients used for human food. Veterinary health issues are at the core of the problem, it appears.

EU Won’t Honor Low Bids for Skim Milk Powder Auction (p. 8):
    The EU had put out invitations for bids to buy surplus butter and skim milk powder. But EU leaders didn’t like the prices, so they failed to fulfill the bids. ????

Grazing Ruminants Lower Greenhouse Gas Emissions (p. 9):
    Paris Reidhead describes recent studies showing that grazing ruminants reduces production of greenhouse gasses, particularly nitrous oxide. Good news if dairy can properly handle manure.

Chicago Mercantile Exchange (CME) is Everything in U.S. Cheese & Cheese Milk Pricing (p. 10-11).
    John Bunting explores the long, long history of cheese price manipulations. And he further details how top level federal officials are literally refusing to acknowledge that dairy’s pricing inequities start at the CME.

Straight talk (p. 13):
    Pete Hardin reveals the “radical” Willie Sutton/Pete Hardin milk-pricing plan: a surtax on supermarket dairy profits. Why? Because, as the famous bank robber Mr. Sutton explained, “That’s where the money is.” Hardin reports seeing a 6-oz. cup of MPC-laden yogurt in a Washington, D.C. food store priced at $1.59 per cup – that’s almost $400 per cwt., farm milk price equivalent.

Total Cheese Excuse: Numbers Don’t add up (p. 14):
    John Bunting details how recent months’ cheese data doesn’t square. Example: Wisconsin milk supply is up 5-6%, but that state’s cheese production is slightly off, according to USDA data. Meanwhile, New Mexico’s milk production is mostly flat, but cheese production is way up! What’s going on???

May 2010  Issue No. 370

Inside this months issue...

Uncertainty Abounds in Dairy (p.1):
    Short & sweet: there is so much volatility in our industry and our nation’s economy that it’s very difficult for predict too far in advance.

Dean Foods Q1 Profits Down, Stock Collapses (p. 1):
    On Monday, May 10, Dean Foods announced the first quarter results. As predicted in the March 2010 issue of The Milkweed, Dean Foods’ first quarter results were way, way down. Wall Street panicked, dumping Dean Foods’ stock by more than 35% in two days.

April 2010 Class III Price $12.92 – April Class IV Price $13.73 (p. 1):
    Good thing for high butter prices – that helped cushion some of the shock from lower cheese prices in USDA’s survey that collects commodity price data used to figure monthly milk prices. Good thing for high butter prices – that helped cushion some of the shock from lower cheese prices in USDA’s survey that collects commodity price data used to figure monthly milk prices. Some strength is building under commodity prices, mercifully.

Sounds Crazy: Beef Prices May Be Dairy’s Salvation (Short-term) (p. 2):
    Every sign indicates that strong consumer demand for hamburger and a scarcity of commercial beef animals heading slaughter means packers will continue to raise the ante paid for cull dairy cows. Higher cull cow prices will somewhat lower milk output, and strengthen values of all dairy livestock.

ADPI/WCMA Meetings Provide Good Dose of Market Intelligence … (p. 2):
    Two of the big dairy processing trade meetings of the year happened in April – the Wisconsin Cheese Makers Assn. and the American Dairy Products Institute. These meetings yielded a lot of hints about market conditions, including: butter will be very tight and very expensive this fall.

Goliath (Dean Foods) Kicking David (Prairie Farms) in the Butt … HARD (p. 3):
    Fluid milk giant Dean Foods has responded to irksome competitive behavior by Prairie Farms the new-fashioned way: giving Prairie Farms the boot from many dozens of Wal-Mart stores spread between Nebraska and the Ohio-Indiana boarder. Dairy industry watchers are stunned.

LOL to Close Tulare (CA) Cheese Plant (p. 3):
    The combined factors of perceived future scarcity of farm milk in the second half of 2010, plus reduced demand for cheese by the major buyer (Kraft Foods), has forced Land O’Lakes to announce closure of its cheese plant at Tulare, California. Butter-powder operations at the multi-plex site will continue … for now.

Bombshell! China Threatens to Embargo U.S. Dairy Products/Ingredients (p. 4):
    In late April, the U.S. dairy learned of a threatened boycott of U.S. dairy imports by China, effective May 1. A month’s grace period was worked out, but the threat of loss of Chinese markets for U.S. dairy products has stunned the industry. Details have been too scarce, and we wonder if USDA didn’t fall down on the job regarding health certificates demanded by the Chinese.

Canada Out of China’s Dairy Market Since March 1 (p. 4):
    Canadian dairy officials failed to heed China’s demands for updated animal disease health certificates on a timely basis and China banned Canadian dairy imports, effective March 1, 2010. Canada is still out of the Chinese market.

Chinese Dairy Import Ban: Another USDA Screw Up??? (p. 5):
    USDA is making a habit of last-minute notices to the U.S. dairy industry regarding foreign food safety and health demands. The Chinese dairy product ban is not the first such instance. In January 2010, USDA announced new somatic cell count rules for exports of cheese and other dairy products to Europe – with no advance notice!

Feature story: Huge New Cheddar Price Manipulation Antitrust Suit Filed vs. DFA (p. 6)
    For many years, the anti-competitive actions by Dairy Farmers of America have been characterized as “mafia-like.” But now those allegations are official: DFA has been recently named as defendant in a privately-filed “RICO” lawsuit. Read this big story here.

IDFA Uses Select Data on Farm-to-Retail Milk Price Spread (p. 7):
    To try to defuse public uproar over high mark-ups of fluid milk products by processors and retailers, the economist for the International Dairy Foods Assn. has recently compiled data on that matter, claiming off-farm margins for fluid milk are within historic ranges. Trouble is: that economist – Bob Yonkers – skipped 2009 data – the year that farm milk prices and consumer milks dramatically diverged.

Farm Costs Up Steadily, But Milk Prices Fluctuate (p. 8):
    What’s new? Farm costs keep rising, milk prices are down and up and down again for too long.

Bankers/Suppliers Can’t Ignore California’s Dairy Crisis Much Longer (p. 8):
    Writer John Bunting takes a long, detailed look at the history that build California’s modern milk producing industry … and explains why equity burn-down for producers during the last two years has created an explosive mixture of high debts and low asset values. Incisive reporting ….

Why So Much More Milk in Wisconsin??? (p. 9):
    Pete Hardin takes a tough look at the factors building Wisconsin’s fast-growing milk production momentum. In addition to a general shift of dairy resources to the Great Lakes States, Wisconsin put in place several years ago a two-pronged milk stimulus package: a state board to approve mega-dairies (that takes away prior rights by counties and townships to approve siting big farming operations) and a package of tax breaks to encourage large dairies in the state.

Next Scam: “Milk Over Feed Costs” Insurance (p.10):
    Setting a “fair” milk price is seemingly impossible, what with all the politics and crooks in the dairy business. So USDA’s latest banana for dairy is to push an insurance program that locks in (for a producer-paid premium) a “margin” of milk prices over feed costs. Why can’t USDA simply come up with an honest milk pricing system? Why more programs that boost the number of parasites between the farmer and his milk check?

WI Raw Milk Bill Awaits Governor’s Signature (p. 10):
    No sign in “America’s Dairyland” whether outgoing governor Jim Doyle will sign the recently-passed legislation legalizing raw milk sales by farmers to consumers. This bill grew from grassroots support and passage through the state legislative bodies – against the wishes of the state’s dairy powers.

Does Volcanic Activity Heighten Climate Change … or Visa Versa? (p. 11):
    Writer Paris Reidhead takes a long look at the relationship between volcanic activity and climate change … and visa versa. Credit Paris with the ability to dig into agricultural and scientific subjects and leave his readers much better informed for the experience!

USDA Organic Board to Disallow Wrongly-Approved “Accessory Ingredients” (p. 12):
    Writer Will Fantle, on behalf of the Cornucopia Institute, reports on a recent decision by USDA’s National Organic Standards Board to overturn prior rules and disallow use of so-called “accessory ingredients” in organic products. At issue, in great part: use of synthetic Omega-3 and Omega-6 oils in “organic” infant formula products. These synthetic products should not have been previously approved, but were. Some babies drinking these organic formula products suffered serious health problems.

Dairy Producers Face New Competition – from “Milk Drink” (p. 12):
    A product dubbed “Organic Milk Drink” is being sold in a low-priced West Coast convenience story. The product has very few ingredients that ever came out of a cow, and is another example of abuse of organic standards, according to the Cornucopia Institute’s Mark Kastel.

Dairy Cattle Replacement Auction Prices (p. 13):
    Dairy livestock prices are generally flat, compared to last month. Cull cow prices and bull calf prices are stronger. Less demand for open heifers translates into slightly lower prices.

Nitrate Fertilizers Add to Greenhouse Gasses (p. 13):
    Paris Reidhead clarifies how nitrous oxide (N2O) is a dangerous greenhouse gas about which agriculture interests should be aware as an upcoming environmental issue.

Butter Supplies Will Get Tighter, Powder Tight, Cheddar Abundant (p. 14):
    In our dairy commodity review, Pete Hardin covers the gamut of dairy commodity production and price trends. Look for butter to become very, very tight and pricey in coming months. Milk powder is tight. And folks are wondering how so much cheese can keep piling up, when comparing production vs. demand.

Big Risks, Little Return for Dairy Farmers (p. 15):
    Pete Hardin dissects the lack of logic behind calls for the U.S. to jump heavily into the international dairy markets. The latest: China’s pending ban of U.S. dairy imports, is proof of just how fickle that global markets can be. Between currency values and oil prices, global dairy exports are a slippery slope for U.S. dairy commodities.

DOJ/USDA Dairy Antitrust Workshop: June 25 in Madison, WI (p. 15):
    Details are virtually final: the joint dairy competition workshop held by the U.S. Departments of Justice and Agriculture will be June 25, 2010 in Madison, Wisconsin.

Global Roadmap to Disaster: “Bain Report” (p. 16):
    In recent months, a fancy, expensive consultant’s report originally concluded in October 2009 has come to light, the “Bain Report.” This study recommends that the U.S. dairy industry pursue an aggressive path towards world markets. The Bain Report is designed as political cover for a big push for reliance on exports for policies in the 2012 farm legislation.

Latest Retail Sales Data: Cheese +1.9%, Fluid Milk (-2.3%) (p. 16):
    The latest three month retail sales data for cheese and fluid milk shows the categories diverging: retail cheese sales continue strong, but fluid milk sales are declining seriously.

April 2010  Issue No. 369

Inside this months issue...

Milk Powder Will Drive Up Other Dairy Commodities’ Prices (p. 1):
    We believe that milk powder price/demand trends are predicting far higher dairy commodity and farm milk prices ahead. U.S. milk powder output is down, demand is stable. Globally, NZ milk output is down and demand is rising as China faces a food emergency due to drought and spread of deserts.

Fonterra’s Latest Auction (p. 1):
    The early April 2010 auction of dairy protein powders New Zealand’s Fonterra saw big increases in price paid by bidders, compared to the prior auction. Example: Skim Milk Powder prices rose by 25.5%, up to $1.67 per pound!

March 2010 Class III Price $12.78 – March Class IV $12.92 (p. 1):
    Hopefully, these Class prices will be the lowest cheese milk and butter-powder milk prices we ever see again in USDA’s federal milk order system. Commodity price gains that started in late March should push up these critical pricing bases.

Feature Story #1: “Hamburger Helper” – Dairy Livestock & Milk Prices to ZOOM UP! (p. 2):
    This important story is one of our “Stories of the Month.” Read it here.

30 U.S. Senators Warn of Dangers to Dairy Farmers from Proposed Trans-Pacific Partnership Free-Trade Deal (p. 2):
    Two and a half dozen U.S. Senators have written U.S. Trade Representative Ron Kirk, stating major concerns about harm to U.S. dairy farmers’ prices if dairy products from Oceania are included in the Obama administation’s proposed “Free-Trade deal” that would cover the Pacific Ocean countries.

2008 DFA Audit: Same Old Worthless Assets (p. 3):
    It’s time for Pete Hardin’s annual dissection of the latest financial audit from Dairy Farmers of America. Pete starts with DFA’s alleged $688 million in “equities” and then rummages through “worthless assets” to show how DFA’s actual worth ought to be close to zero. Examples: DFA’s “goodwill” is $118 million; DFA’s “Intangible assets” are $236 million; DFA’s “Preferred Equity Securities” of $150 million are a collateralized liability, not an asset; and DFA includes an “unrecognized actuarial losses of $151.4 million” in its employee pension program. Do the math …

Gov’t Data Shows – Strong Consumer Dairy Demand (p. 3):
    John Bunting sorts through a heapin’ pile of federal government data about personal expenditures for dairy products for January 2008 through February 2010 and concludes that Americans are buying more dairy products, and paying higher prices for them … despite baloney about “dairy surplus” and obvious low farm prices.

USDA Releasing Aged Milk Powder for Non-Human Use (p. 4):
    In a controversial move, USDA started auctioning off 79 million pounds of “surplus” nonfat dry milk. This move zeroes out USDA’s reserves of nonfat dry milk. What’s wrong? USDA used a private brokerage, not sell-backs of inventory at prices 110% above the purchase price. USDA did not denature (color) or even mark on the bags that the powder was not for human use. Word is that product leaving the country lacked paperwork specifying that the product was not for human use.

Dean Foods Holding Most Southeast Farmers to Agreements (p. 5):
    Dean Foods will hold the 150 (or so) independent producers who gave notice seeking to leave their markets with Dean Foods to the contractual, 90-day periods between when they turned in notice and when they’ll actually be allowed to leave.

Dean Foods’ Motion Denied by Federal Judge in Antitrust Complaint vs. Foremost Buy (p. 5):
    A federal judge has denied Dean Foods motion to reduce the number of antitrust complaints filed by federal/state justice departments in January 2010, relative to Dean Foods’ April 1, 2009 purchase of the consumer products division of Foremost Farms. The Foremost deal married up the two largest distributors of fluid milk in Wisconsin.

“Killer Whale” vs. DFA: Cheddar Price Manipulation Lawsuit Moves Ahead (p. 6):
    A private commodity trader’s lawsuit against DFA will proceed towards trial. Mark Anderson and his “Killer Whale Holdings” firm sued DFA, claiming $12 million in losses, due to DFA’s manipulations of Cheddar prices at the Chicago Mercantile Exchange in spring/summer 2004. See a copy of the court ruling here.

Feature Story #2: Fonterra Selling “Aluminum-Enhanced” (Contaminated” Cheese in U.S. (p. 7):
    This story is reproduced in full, with accompanying documents, as one of the “stories of the month.” Read all about it here.

China’s Food Challenges: Desertification & Drought (p. 8-9):
    John Bunting takes a sobering look at weather challenges facing China’s ability to feed its 1.3 billion citizens. Deserts are spreading in northern China at the rate of over 1300 square miles per year. Worse, on a short-term basis: since last August, severe drought in southwestern China has basically cut of moisture to an area greater than 500,000 square miles. China has six percent of the world’s arable land, and 20% of the world’s population.

CBS News Tackles the MRSA Livestock Antibiotic Use Issue (p. 9):
    Writer Paris Reidhead details the coverage of CBS’ Evening News broadcast of February 10, 2010, which provided a detailed analysis of the correlations of widespread, non-therapeutic use of antibiotics in livestock and poultry … with spread of the deadly MRSA contagion.

“Cruel & Unusual Punishment?” Illinois’ Prisoners’ Food Overloaded with Soy (p. 10)
    Oh, no. Paris Reidhead brings together two items into a scary story. #1) A food advocacy group – the Weston A. Price Foundation – has sued the State of Illinois prison system because prisoners are fed so much soy proteins and soy materials in their diets that serious physical problems are occurring. #2) Paris also reviews the documented human health dangers associated with persons engaging in soy-heavy diets.

NAIS Supporters Object to New, “State-Based” Framework (p. 12):
    Writer Mary Zanoni details how the vested money interests in the animal identification industry are objecting to USDA Secretary Tom Vilsack’s recent announcement that the program would be instituted on a state-by-state basis.

Amish Farmer Wins WI Premises ID Fight (p. 12):
    A Wisconsin county judge ruled that a lawsuit against an Amish farmer in Clark County was invalid. This farmer was one of the first in a “show-trial” directed at farmers refusing to comply with the state’s mandate to register farm premises. That registration is the first step towards animal identification – a policy scorned by the Amish (and others) based upon warnings in the Bible’s Chapter of Revelations.

Organic Valley Buying Non-Member Milk in WI, Then Moving Trailer Loads to Supply-Tight NE (p. 12):
    Organic Valley, the organic co-op based in LaFarge, Wisconsin, is buying non-member milk in Wisconsin and trucking that milk to the Northeast, where organic milk supplies are tight, relative to demand. Why is Organic Valley buying non-member milk, when, at the same time, the co-op is restricting members and “new arrivals” (former HP Hood shippers) to quotas? Somebody’s blowing smoke …

Dairy Replacement Prices At Auction Markets Across the USDA (p. 13):
    Dairy livestock prices are mostly flat. Stronger interest in breeding-age heifers. Cull cow prices are strengthening.

Frozen Pizza Sales Strong Past Two Years (p. 13):
    Nearly 10 percent of all cheese manufactured in the U.S. finds its home atop frozen pizzas. This category has grown dramatically in the past two years, a time when pizza parlor sales have declined.

Dairy Antitrust Workshop Rescheduled for 6/25/10:
    DOJ and USDA have again rescheduled the antitrust workshop to be held in Madison, Wisconsin. The new date is Friday, June 25, 2010. See you there!

Dairy Commodity Scene (p. 14):
    Milk powder prices are rising, Cheddar prices were down and up in the past month. Butter remains stable.

Restrict Capper-Volstead Protections Only To Raw Products’ Procurement/Sale (p. 15):
    Pete Hardin’s opinion of the growing flap over charges that the Antitrust Division of the U.S. Department of Justice wants to get rid of agricultural co-ops’ legal protections for Antitrust? The Capper-Volstead Act should be amended to include only the original procurement and sale of agricultural products. Anything else: the co-ops should operate on the same accounting and financial bases as any other businesses. Hardin concludes: “U.S. agriculture and consumers will be better when the antics of major agricultural cooperatives are partially declawed, defanged, deloused, dehorned, “denutted” and delivered into a modern era of competition and financial transparency.

Get Ready for the Coming Milk/Dairy Livestock Price Upsurge (p. 15):
    Pete Hardin offers strategies to dairy producers to protect their financial interests as we start what should be a strong up-tick of dairy commodity, milk price, and dairy livestock values.

Recent Study Estimates Posilac® Use at 12-14% of U.S. Dairies (p. 16):
    Rick North details how a recent study conducted by University of California-Davis researchers estimates that 12-14% of U.S. dairy farmers continue to use the synthetic growth hormone, Posilac® on at least some of their cows. What’s the #1 reason why dairy farmers have cut back Posilac® use? Public opinion against the synthetic hormone!

Story Exposing Dairy Execs’ Big $alarie$ Causes Big Stir (p. 16):
    Last month’s story about salaries paid to some top dairy executives really caused an explosion throughout the industry. We will dig deeper into these matters in a future issue. What a scam!

March 2010  Issue No. 368

Inside this months issue...
Entering Spring, U.S. Dairy Farm Economy in Dire Straits (p. 1):
    Recent weeks’ declines in cheese prices promise another round of lowball farm milk prices – which will prove ruinous to many U.S. dairy producers who are reeling from last year’s disastrous milk prices.

U.S. “Milk-Deficit” Nation in 2009, Again (p. 1):
    Once again, 2009 found U.S. milk production BELOW consumer demand. That’s been the case every year since 1996.

February 2010 Class III Price $14.28 – February Class IV $12.90 (p. 1):
    These are the federal milk order prices for February 2010. Enjoy.

2009: U.S. Dairy Farmers’ Combined Losses & Equity Erosion Equaled 1/1/09 Entire Value of Nation’s 9 Million Milking Herd (p. 2):
    By our analysis, the combined operating loss losses and erosion of milk cow values during 2009 equaled the entire value of the U.S. dairy herd as of 1/1/09.

Kraft Foods’ Year-End Numbers Show Firm’s Clout (p. 2):
    Kraft Foods attributed 17% of its 2009 consolidated earnings to cheese. Kraft’s cheezy profits were in great part attributed to lower product costs.

U.S. Dairy Advisory Committee to Finally Meet in D.C. Week of April 12 (p. 2):
    At long last, USDA Secretary Tom Vilsack’s office informed members of his dairy advisory committee that they will meet in Washington, D.C. during the week of April 12. ‘bout time!

Rumor: Fair Oaks/Kroger Talking Milk Deal (p. 3):
    The Mid-East and Southeast dairy markets should take notice: “on-again, off-again” talks between Fair Oaks Dairy/Continental Milk Producers and The Kroger Company over a full milk-supply agreement are in the works. Kroger operates five milk processing plants in those regions.

Dean Foods Losing Producers, Field Staff in Southeast (p. 3):
    Intense anger over milk quality and butter fat testing has compelled about 140 dairy producers in Kentucky and Tennessee to turn in “quit notices” to Dean Foods – only a couple months after they’d started shipping milk to the company. Sources say Dean Foods will hold those producers to a 90-day period between announcing termination and actually leaving. Dean Foods’ efforts to establish its own milk supply in the Southeast are not going well, mainly because the company’s personnel and logistics are inadequate.

Dannon Gains Wal-Mart’s Private Label Yogurt from Struggling Dean Foods: French “Full Nelson?” (p. 3):
    Early in 2010, French yogurt giant Dannon took away the huge, Wal-Mart private label yogurt business from Dean Foods. This move comes as Dannon is rumored to be studying Dean Foods for possible acquisition.

Kraft Starts Selling at CME, Cheddar Prices Drop Sharply (p. 3):
    Here they go again … After years of using surrogates in CME Cheddar trading, Kraft Foods has emergedin recent weeks as an active seller at CME – and prices have dropped sharply.

Feature Story: Fonterra’s Long Tentacles Linked to U.S. Dairy Woes (p. 4-5):
    In June 2008, a New Zealand dairy newspaper carried an article in which the head of Fonterra (NZ’s dairy export monopoly) bragged that his firm had netted $1.3 BILLION on $2.5 BILLION of gross sales in the U.S. in Fonterra’s prior fiscal year. The Milkweed provides more detailed history of Fonterra’s activities and political connections in the U.S. – all working towards President Obama’s proposed “Trans Pacific Partnership” trade agreement that would devastate U.S. dairy farmers with even more, cheap dairy imports. Beware! Read the full story here.

Vreba-Hoff Dairy Empire in Many Legal, Financial Troubles (p. 5):
    The Ohio-based Vreba-Hoff dairy development empire – which for years helped Dutch farmers sell their holdings in Europe and then invest in big, new U.S. dairies – is entangled in a mountain of lawsuits. Vreba-Hoff main man Willie van Bakel looks like Bernie Madoff with gouda cheese on his breath!

Feature Story: IRS Form 990 Reveals Many Dairy Executives’ Salaries (p. 6-7):
    This article is our “story of the month.” Want to get mad? Read about dairy promotion executives’ salaries at Dairy Management, Inc. and how the top eight executives averaged $450,000 per year with nearly $100,000 in non-taxable benefits! These guys have been living high on the hog while dairy farmers starve! Read all about it here.

Credit Scarce in 2010 for Dairy Producers (p. 7):
    After last year’s financial fiasco that wiped out equity and reduced livestock values, there’s little room for bankers to extend any more loans to dairy farmers … just as spring planting season arrives.

Wisconsin Raw Milk Issue Burning Hot (p. 7):
    Wisconsin is in a frenzy over the raw milk issue, as state regulators try to wipe out the practice and raw-milk activists fight back.

Producers Down-and-Up Ride: Share of Fluid Milk Dollar (p. 8):
    Writer John Bunting details how dairy farmers’ share of the consumer’s dollar spent for fluid milk has declined over time. Milk producers have little market power, and thus suffer price erosion.

Rumor: Dannon Kicking Dean Foods’ Tires for Possible Buy (p. 9):
    French giant Danone (“Dannon” in the U.S.) is studying Dean Foods as a possible acquisition. Dean Foods’ financial and operating situation is becoming desperate and the “Yuppie Textbook” dictates its time to find a sucker.

Terrible First Quarter Shaping Up for Dean Foods (p. 9):
    Leaks coming from Dean Foods indicate that the company is lagging behind 2010 first quarter operating profit projections by several tens of millions of dollars. That fact, when it comes out to financial analysts in late April/early May, will not inspire stock prices upwards.

Antibiotic Resistant Microbes: Tiny Critters Cause Big Trouble (p. 10-11):
    Writer Paris Reidhead starts a long, science-based, discussion of the roles that widespread, non-therapeutic use of antibiotics in livestock and poultry raising, leads to emergence of drug-resistant bugs that can harm human health.

Haitian Relief: Letter to the Editor … (p. 11):
    Wisconsin farmer John Malcheski, who has visited Haiti a dozen times while working with a local charity that helps plant trees, slow down soil erosion, and help stimulate local food production, discusses what kind of assistance Haiti really needs to stand on its feet as a nation.

Family Farmers Call New USDA Organic Pasture and Livestock Rule a Victory for Fair Play (p. 12):
    Will Fantle, co-director of the Wisconsin-based Cornucopia Institute, details how USDA’s new organic pasture rules for dairy and beef animals, will result in a much more fair environment for family-size, organic farms.

US Dairy Cattle Replacement Prices (p. 13):
    Except perhaps for short-bred heifers, demand and prices for U.S. dairy livestock are down.

USDA Mandating “European Somatic Cell Limits” For U.S. Farm Milk Made into Exported Cheeses (p. 13):
    The incompetents at USDA strike again! In late January 2010, with virtually zero advance notice, USDA’s Agricultural Marketing Service informed low-level personel at cheese plants that farm milk supplies had to be monitored for European-style SCC counts in order to legally export cheese to EU nations. USDA/AMS wanted those rules implemented on January 26, 2010! An industry-wide furor has delayed implementation at least until October.

GAO Report: MPC Not Legal Food Ingredient (p. 13):
    Recently, the government accountability Office issued a report on the failure of the Food and Drug Administration, during the Bush administration, to honor “Citizen’s Petitions” submitted to FDA. As part of that report, GAO noted that Milk Protein Concentrate is NOT a legal food ingredient, because that dry dairy protein has never been subjected to mandatory safety protocols.

Cheddar, NFDM Prices Nose-Dive; Will Cause Big Drop in Farm Milk Prices (p. 14):
    Pete Hardin analyzes the dairy commodity scene. It’s ugly.

Emergency Actions Needed ASAP (p. 15):
    Pete Hardin details emergency actions that are needed by USDA to avoid complete financial chaos in dairy country this spring. Those recommendations include: emergency purchases of hamburger by USDA to sustain cull cow markets; emergency loans for spring planting and fieldwork; and a $18.00 Class 1 floor price to boost producer income; with all revenues derived from higher fluid milk prices shared equally by all farmers in the federal milk order program.

Nov.-Dec. Retail Cheese Sales Gains Lower, Retail Fluid Milk Sales Turn Negative (p. 15):
    Retail cheese sales during the past three months showed gains, but reduced gains. Meanwhile, fluid milk sales turned negative during the November 2009 - January 2010 period (compared to year-ago data).

Opposition’s Analysis: Continuing rBGH War (p. 16):
    Rick North, project director for the Oregon Chapter of the Physicians for Social Responsibility, provides an update on the ongoing battle between consumer groups and (now) Elanco, over use by dairy farmers of Posilac – the synthetic hormone veterinary drug that boosts injected cows’ milk volumes. North details the continuing stream of factual misrepresentations emanating from Elanco and that company’s surrogate hirelings.

February 2010  Issue No. 367

Inside this months issue...
Don’t Believe Projections of Normal 2010 Milk Flow (p. 1):
    USDA tells us that 2010 farm milk output will be virtually the same as 2009’s. Class III futures for 2010 are dropping at the CME, on word of “more heifers.” Pete Hardin contends that this nation is on the verge of a severe milk supply crisis, as many factors from 2009 – poor quality grain and forages, poor herd maintenance, and poor milk prices – all hit home in 2010.

January 2010 Class III Price $14.50 – January Class IV $13.85 (p. 1):
    The numbers tell it all. February 2010 Class prices in USDA’s federal milk order program will decline based on lower nonfat dry milk and whey values.

OUCH! NFDM Export Deal Collapses; Prices Follow (p. 2):
    In early January 2010, a big export deal for nonfat dry milk collapsed. The marketer – California Dairies, Inc. – dumped the product on the market, and nfdm prices collapsed by $.25 per pound in two weeks.

USDA Dairy Advisory Committee: No Meeting Scheduled Yet (p. 2):
    Yoo-hoo, Tom? Anybody home??? USDA’s Secretary Vilsack has not yet informed members of his Dairy Advisory Committee when and where they’ll first meet.

CME Plans Cheese Futures Trading by Mid-2010 (p. 2):
    Why? The Chicago Mercantile Exchange will start monthly trading in non-deliverable cheese futures, sometime in mid-year. More gambling toys for dairy.

Texas Dairymen Tell Bank – Take the Cows, But Bank Waits Three Days: Many Cows Die (p. 2):
    This mess makes a little tail-docking video seem downright pretty. Hundreds of cows at two dairy farmers in Texas died, after two “flying Dutchmen” called their bank from the airport, telling the bank to take the cows. The bank didn’t move for three days. Many of the untended animals died, the rest were fit only for immediate slaughter.

Feature Story #1 – Dairy Breeding Impaired by Energy-Short Diets, Farm Finances (p. 3):
     Word on the farm and in the artificial insemination industry is that a dairy livestock breeding crisis is unfolding in the U.S. – particularly in the eastern third of the nation – from Texas to Wisconsin and east. Read our first story of the month here.

When Severe Adverse Weather Hammers Dairy, Impact Felt Most Dramatically in Following Year (p. 3):
    When weather crises impacts crops, the impact on milk production is usually felt the NEXT year. That was the lessons from the 1988 Drought in Wisconsin.

What’s Up? No New Nominees for National Dairy Board (p. 3):
    USDA Secretary Tom Vilsack is four months late appointing the next round of 12 directors to the National Dairy Promotion board. Word is the White House wants better representation for minority groups.

NZ Trans Pacific Trade Deal: Doom for U.S. Dairy Farmers? (p. 4):
    President Obama’s proposed Trans Pacific Free Trade Deal would let in dairy imports from New Zealand (and other countries whose dairy products NZ markets) into the U.S. without barriers. Such a trade deal, if completed, would hammer already-suffering U.S. dairy producers.

Feature Story #2 – California’s “Cheddar” Yields (13.7 lb./cwt): Huge Scandal (p/5):
   John Bunting reports on how suspiciously high Cheddar cheese yields in California raise serious questions about the use of Milk Protein Concentrates to fortify cheese vats. Read our second story of the month here.

2009 Cheese Records Include Huge “Spreads” Beyond Farmgate (p. 5):
    Writer John Bunting details farm-to-processor and farm-to-retailer “spreads” for 2001-2009, showing how those spreads reached their ever-biggest margins in 2009. Somebody made a lot of money in 2009 on dairy products … and it wasn’t the dairy farmer!

Chipotle Tracking Cheese Supply-Chain Back to Farm (p. 6):
    A unique, three-way effort involving the Chipotle Mexican Grill Restaurants, Meister Cheese (Muscoda, WI) and Scenic Central Milk Producers Co-op has worked out a dairy livestock treatment protocol sought by the restaurant chain.

Supreme Court Will Hear Monsanto’s GM Alfalfa Appeal (p. 7):
    A federal judge’s injunction against sales of Monsanto’s genetically-modified (GM) alfalfa will go all the way to the U.S. Supreme Court. What’s unique about the GM alfalfa, it’s the first perennial crop that was approved by USDA.

More GHG Insight: “Moo-thane” not the Worst Problem (p. 7):
    Writer Paris Reidhead details other methane sources (bubbles on the ocean bottom of the Caribbean) and dairy manure handling issues to reduce Green House Gas production.

Feds & States Sue Dean Foods: Take Apart Foremost Farms Acquisition (p. 8):
    Pete Hardin analyzes the January 22, 2010 legal complaint filed against Dean Foods by the U.S. Department of Justice’s Antitrust Division and three states’ attorneys general offices. The complaint seeks to disallow the April 1, 2009 acquisition by Dean Foods of the Consumer Products Division of Foremost Farms.

How DOJ Antitrust Lawsuit vs. Dean Foods Came About … (p. 9):
    Here’s the array of behind-the-scenes events that came together to spur the antitrust lawsuit against Dean Foods by federal and state officials. Pete Hardin credits Wisconsin’s U.S. Senators Russell Feingold and Herb Kohl, Feingold’s staff, Vermont Senator Bernie Sanders, federal Antitrust Division chief Christine A. Varney and her newly created food/agricultural unit … and The Milkweed.

Grade AA Butter Cash Markets: Up & Down (p. 10):
    Writer John Bunting takes a close look at the CME Grade AA butter markets for during the first five weeks of 2010. More funny business …

Animal Abuse Video at NY’s Willet Dairy Shocks Nation (p. 11):
    John Bunting writes about some of the other sordid events that have taken place at the mega-dairy in Central New York where the “Mercy for Animals” video showing tail-docking was filmed. Call the place a cesspool with cows.

Retail Cheese Strong, Fluid Milk Sales Drop (p. 11):
    The last quarter of 2009 featured continued strong retail sales of cheese (+5.3%) above year-ago figures. But fluid milk sales declined 0.1% below the last quarter data for 2008.

NAIS Not “Abandoned,” NAIS is Mandatory (p. 12):
    Mary Zanoni details the facts behind USDA’s recent smokescreen that claimed the department was backing off demands that the National Animal Identification System continue. In fact, as Mary demonstrates, USDA continues to require mandatory animal ID for all farms participating in USDA animal health programs, such as Brucellosis, bovine TB, scrapie, Coggins Disease, etc.

Dairy Cattle Replacement Prices … (p. 13):
    Ouch. Springing heifer prices are down about $150 per head in the U.S. during the past month. The decline is progressively worse, going from east-to-west.

Federal Judge Dismisses Nonfat Dry Milk Misreporting Lawsuit (p. 13):
    On February 8, 2010, federal judge Anthony W. Ishii dismissed a complaint filed in March 2009 against DairyAmerica and California Dairies, Inc. The lawsuit alleged that dairy farmers whose milk was priced by federal milk orders during 2006 and 2007 lost large volumes of revenue due to acknowledged misreporting by the defendants. OUCH.

Milk Powder Prices Collapse; Butter Up & Down; Cheddar Stable (p. 14):
    As always, the dairy commodity scene continues to be a puzzle in progress. In January 2010, milk powder prices collapsed. Butter suffered an up-and-down cycle, and Cheddar held reasonably firm in cash market trading at the Chicago Mercantile Exchange.

“Wait ‘til the year after the year after next year …” (p. 15):
    Pete Hardin rips into the “free-trade” mentality in dairy, as reflected in a recent report advising dairy farmers to “hang in there” until 2013, when a big boom in export demand is anticipated. Baloney. Hardin tracks how virtually every U.S. agricultural recession/Depression of the past century is linked to a run-up in prices due to big export demand – only to have those markets collapse and farmers lose their shirts.

“Trade Act” to Reform Flawed “Free Trade" Agreements, And Help Guide Future Trade Negotiations (p. 15):
    A wide-ranging coalition of labor, farm, policy and religious groups has coalesced around companion bills in both the U.S. Senate and House of Representatives. Those bills would require comprehensive reviews of potential impacts – including food safety – before any further approval of new “free trade” deals involving the U.S. S0-called “Fast Track” presidential authority would be stripped away, allowing for a more democratic review of merits.

Controversy Over Pending Organic Livestock/Pasture Rules is HOT (p. 16):
    Will Fantle of the Cornucopia Institute details how the long-running controversy involving pasture access for milking animals on organic dairy farms is coming to a boil. Rules are anticipated out soon from USDA, tightening up requirements for organic dairy animals to get specific volumes of grass from fresh pasture a minimum of 120 days per year.

January 2010  Issue No. 366

Inside this months issue...

Feature Story #1: What’s Ahead for Dairy in 2010??? (p. 1):
    One of our stories of the month. Read it here.

2010: Milk Supply Will Sharply Decline, Raising Prices (p. 1):
    Several factors—grain and forage quality, dairy farmers ceasing production, and tight finances/credit – will all conspire to drive down 2010’s U.S. milk production.

December 2009 Class III Price $14.98 – November Class IV $15.01 (p. 1):
    Take a good look. Prices are heading down in January.

USDA/DMI Contract to Reduce Dairy’s Greenhouse Gas Output (p. 2):
    USDA has contracted Dairy Management, Inc. to oversee a 25% reduction in U.S. greenhouse gas emissions by the U.S. dairy industry by 2020. The major emphasis will be to build methane digesters at all U.S. dairy farmers with 1000 or more milk cows. The Milkweed contends that such an effort is a waste of taxpayer funds and an environmental travesty.

USDA Announces 17-Member Dairy Advisory Committee (p. 2):
    USDA Secretary Tom Vilsack has announced the seventeen dairy industry persons who will help USDA try to forge a long-range strategy for federal dairy policy.

Finally: USDA Issues Dairy Farmer Assistance Payments (p. 2):
    At long last, dairy farmers finally received the DELAP emergency payments around Christmas.

Feature Story #2: Costs for USDA-Recommended Animal ID Package: $9,995 (p. 3):
    With start-ups cost like this, what will government bureaucrats and their anointed corporate beneficiaries conjure up next? Read all about it here.

Kraft Sells Off Frozen Pizza Unit, to Raise Cash for Cadbury Takeover (p. 3):
    Kraft Foods sold its frozen pizza unit to Nestle, in order to assemble cash for a hostile takeover of the British candy company, Cadbury. Logic behind Kraft’s move seems fuzzy.

“Milking the Street” at CME (p. 4):
    Writer John Bunting has researched the Cheddar trading patterns at the Chicago Mercantile Exchange for 2009, with particular emphasis on the run-up and decline of block Cheddar prices in the fall and early winter.

Global Dairy Commodity Prices Remain High (p. 4):
    In early January, according to USDA’s Dairy Market News’ global analysis, Cheddar at the dock in New Zealand is priced at $1.81 to $2.04 per pound. That range is $.40 to $.60 per pound higher than CME prices.

Wisconsin Gifts Foremost Farms $3.4 Million (p. 5):
    In last-minute state budget negotiations last fall, Wisconsin State Rep. Jennifer Shilling (D-La Crosse area) snuck in a “lulu” that ended up with Foremost Farms being the only applicant for a $3.4 million dollar grant to expand cheese plant capacity. The line item was written specifically so only Foremost Farms could qualify for it.

Dairy Labor Costs Track Perfectly with Petroleum Costs (p. 6):
    Writer John Bunting has researched the seemingly perfect correlation between farm costs for petroleum and labor all the way back to 1940. Labor costs are going up!

“Muscle Milk” … Not Cow’s Milk & Not Much Human Kindness (p. 7):
    We see “Muscle Milk” in stores. Sounds great, until you look at the ingredients. Muscle Milk is not what the dairy industry thinks of as “milk.” But that hasn’t stopped the products owner from suing a wide range of companies that incorporate the world “milk” in their name.

Dairy’s Beef: No Respect at the Slaughterhouse (p. 7):
    Max Thornsberry, D.V.M. (president of the board of R-CALF-USA, a ruckus-raising livestock producers’ organization), details why dairy beef is undervalued by slaughterhouses.

Dairy Manure Management & Methane Digesters … Green or Dirty Brown? (p. 8-10):
    Writer Paris Reidhead explores the science behind producing methane from livestock manure and then burning the resulting gas to produce electricity. Each pound of methane burned produces 2.75 pounds of Carbon Dioxide – another bad greenhouse gas. Access this must-read report here.

Strong (+7%) Retail Cheese Trends Persist; Fluid Sales Slowing (p. 11):
    The September-November 2009 period showed continued solid strength in retail cheese sales. For that period, retail cheese sales rose 7.0%. Fluid milk sales gains are slowing. That same period saw fluid milk sales rise only 0.3%.

Health Reform Legislation: Who May Be Exempt from Penalties for Failure to Obtain Insurance? (p. 12):
    Writer Mary Zanoni reviews the complex matter of which persons, due to their long-term religious beliefs, may be exempt from penalties for failing to participate in the brewing national health care program.

Control Freak: Vilsack Increasingly Despised within USDA (p. 12):
    USDA chief Tom Vilsack really has the troops scratching their heads, wondering at his control fetishes. Example: employees at USDA’s federal milk order program cannot talk to reporters. Apparently, agency-wide, Vilsack doesn’t want anyone except “talking heads” to talk to the media … and make sure Vilsack gets credit for all good deeds.

Dean Foods/DFA “Smoke Peace Pipe” Over Milk Supply Squabble (p. 13):
    Dean Foods and DFA have settled their squabble over milk supplies. DFA milk going to a dozen-plus Dean Foods plants is now being invoiced by Lone Star Milk Producers, effective January 1, 2010. Three months ago, Dean Foods had told DFA, “You’re outta here!”

Cheddar Block Prices Collapse Just Prior to Christmas (p. 14):
    Our commodity watch focuses on the price collapse of block Cheddar just prior to Christmas. Block Cheddar prices collapsed about $.30 per pound.

We Can’t Afford to Repeat 2009 (p. 15):
    Pete Hardin details what went wrong in 2009 and what concerned dairy persons need to do to make 2010 a much better year.

Methane Digesters: Dirty Brown Scam (p. 15):
    Pete Hardin rips into the foolish waste of money and pending environmental disaster at hand, if USDA proceeds with plans to build methane digesters on every dairy farm with 1,000 or more milk cows.

A. J. Bos Wins Courtroom Battle to Build IL Mega-Dairy (p. 16):
    California dairy impresario A. J. Bos won the legal battle against neighbors trying to block construction of a mega-dairy in Jo Daviess County, Illinois. Bos is proceeding with construction. Plaintiffs are plotting their appeal of the case.

December 2009  Issue No. 365

Inside this months issue...

Obama Proposes Trans-Pacific Partnership ‘Free Trade’ Deal (p. 1):
    Just what U.S. dairy farmers don’t need! On his mid-November Asian trip, President Obama announced an effort to create a Trans Pacific “Free Trade” deal. Bad news. We don’t need New Zealand getting a free shot at our dairy product markets.

Bureaucrats Delay Emergency Payments to Producers (p. 1)
    Where’s the money? USDA’s bureaucrats in Washington, D.C. are to blame for severe delays in getting emergency federal payments to dairy farmers. One farmer was told by personnel at his county Farm Services Agency that the “Dairy Economic Loss Assistance Program” was the worst mess ever seen at USDA.

November 2009 Class III Price $14.08 – November Class IV $13.25 (p. 1):
    Manufacturing class milk prices in the federal milk order keep moving up, but not high enough.

Astronomical Cheddar Pricing Gap at CME: Block-Barrel “Split” (p. 2):
    At press time, there was a 24-cent difference between the cash market prices for Cheddar blocks and Cheddar barrels at the Chicago Mercantile Exchange. What’s going on? Production of 500-lb. Cheddar barrels is exceeding consumer demand for processed cheese. One industry guru claims many Kraft Foods’ processed food products do not contain cheese.

Why No Cheese in Kraft “Singles”??? (p. 2):
    The Milkweed went shopping at the supermarket and bought two American cheese processed products marketed by Kraft: “Deli Deluxe” and “Singles.” Deli Deluxe is Kraft’s top-shelf sliced product, and lists “American cheese” as the first ingredient. But Kraft’s “common fare” – “Singles”—does not list cheese as an ingredient.

Another Big Inventory Error: USDA Drops American Cheese Stocks (p. 3):
    John Bunting details how, once again, USDA personnel have screwed up, big-time, on a critical survey of dairy industry data. In November, USDA announced that had wrongly “presumed” inventories of American cheese at four warehouses. Those errors averaged 18 million pounds of American cheese (including Cheddar) each of the first eight months of 2009. That’s roughly 140 million pounds, cumulatively. In other words, USDA had guessed wrong in what amounts to ONE-QUARTER OF THE NATION’S AMERICAN CHEESE RESERVES.

January 2010: DairyAmerica to Revise Nonfat Dry Milk Pricing (p. 4):
    Starting in January, DairyAmerica – the nation’s milk powder cartel – will revise its pricing system so buyers may chose to lock-in prices. Some see the as benefiting the industry. Others are skeptical. Accompanying articles not that DairyAmerica is losing membership and that DairyAmerica did not bid on a recent offer to purchase milk powder from Algeria.

“Farm to Processor Spread” for Cheese Grows Ever Wider (p. 4):
    John Bunting details how, since January 2008, the “spread” (difference between farm value and retail value) of cheese has grown by 100X!!! Somebody’s making money on cheese.

Dairy Credit Crisis: Part One (p. 5):
    John Bunting takes a long look at the nation’s credit crisis.

Dairy Credit Crisis: Part Two (p. 5):
    John Bunting starts poking around some of the financial fiascos that have dairy farmers’ shorts in a knot. The Farm Credit system is taking a beating on dairy.

Huge Idaho Dairies Sue Co-op, Claiming Fraud on 2007-2008 $13.35/Cwt. Fixed-Price Contracts (p. 6):
    Talk about a bad deal! In late 2006, two of Idaho’s largest dairies (Aardemas and Bettencourts) individually signed two-year, fixed-price contracts with their cooperative, Northwest Dairy Assn. (now Darigold). That price was the best the co-op could do, the producers were told. Those farmers lost all of the “good times” of milk prices in 2007-2008. They’re suing the co-op.

Dean Foods’ Butter Plant On-Line soon at Nashville, TN (p. 6):
    Dean Foods will soon start up a critical, “missing link” in dairy processing system: a butter-plant at Nashville, Tennessee. This plant will go a long way towards helping Dean Foods balance its milk supply, as the firm moves to build its own raw milk supply.

Sen. Specter Wants Dairy Promotion Accountability (p. 6):
    Pennsylvania’s U.S. Senator Arlen Specter has written a long letter to USDA, demand key information about dairy promotion programs.

2009 Grain Harvest Headaches Threaten World Food Security (p. 7):
    A failure of the U.S. grain harvest – particularly corn – threatens global food security, in Pete Hardin’s analysis. The U.S. was supposed to have its second-largest corn harvest in history. But a significant small percentage was still standing in the fields, with the first blizzards hit the Midwest and Plains. Many quality issues (molds/toxins) are being found in the corn that was picked. Lack of plant maturity, due to an unduly cold growing season, raises questions about the nutritional value of much of the 2009 U.S. corn crop that’s been picked and stored.

Feed Quality and Livestock Health Issues: You Can Run But Not Hide (p. 8):
    Writer Paris Reidhead discussed specific quality issues facing livestock owners feeding 2009 corn to their animals.

GMO Corn: Greater Mold/Toxin Problems (p. 9):
    Writer Paris Reidhead enters the early stages of considerations that genetically-modified corn is far more susceptible to mold and toxin contaminations. The core of this question is HUGE.

Dean Foods Coming up Short on Self-Procurement (p. 10):
    Dean Foods is failing to attract the volume of independent dairy farmers the firm needs to supply a dozen-plus fluid milk plants in the Southeast and Mid-East. Problems about at Dean Foods, starting with a newly-arrived “Pepsi Generation” of management that doesn’t know a teat canal from the Erie Canal. Dean Foods’ pay offers to producers are too cheap and one-sided.

Strong Growth Continues for Retail Sales of Cheese & Fluid Milk (p. 10):
    The latest, 13-week survey of retail computer check-out scanner data shows continued strong sales for both cheese (+7.4%) and fluid milk (+1.9%), compared to year-ago data. Dairy’s spectacular sales gains in supermarket purchases tell a tremendous story: changing U.S. families’ food habits as they shift towards far more home-preparation of meals.

Organic Integrity Issues Coming to Center Stage (p. 11):
    Will Fantle of the Cornucopia Institute – the organic watchdog organization – explains two big items: #1 – USDA has de-certified Promiseland Livestock – the major supplier of organic dairy heifers to factory-style dairies. Promiseland failed to comply with USDA dictates to turn over records; #2 – A recent “friend of the court” brief submitted by the Organic Trade Assn. (OTA—a front for “organic” big-boys) was paid for by Organic Valley, a farmer-owned cooperative based in Wisconsin. One more time, Organic Valley has been caught playing footsie under the table with the big boys!

Mexican – NZ Connection: MPC Tariff Loophole Tied to Senator Larry Craig (p. 11):
    Last month, in The Milkweed’s analysis of the “Mexican Loophole” in NY Senator Charles Schumer’s bill to slap tariffs on imported Milk Protein Concentrates, we found that such a measure originated six years earlier in legislation proposed by Idaho’s toe-tapping U.S. Senator, Larry Craig. Where does Craig get his motivation? Perhaps $48,000 in political contributions paid to Craig between 2000 and 2006 by Altria – the parent firm of Kraft Foods—helped Senator Craig defang this legislation.

36 Year Ago, “Flanigan Report” Proposed Selling Out U.S. Dairy Farmers with Imports (p. 12):
    We review the ancient history of how, on April 12, 1973, Minnesota senator Hubert Humphrey laid bare, on the Senate floor, the Nixon administration’s secret “Free Trade” plan that would have traded off large volumes of U.S. cheese and butter demand for other trade concessions. The parallel with Obama’s proposed “Trans Pacific” proposal is positively exiting.

Dairy Cattle Replacement Prices at Auction Markets across the USA (p. 13):
    Prices for #1 Holstein springers are up about $100-150 per head during the past month or two. But money is tight for many dairy producers who would like to add animals.

DOJ/USDA Announce 2010 “Competition Workshops” Details (p. 13):
    In 2010, the U.S. Departments of Agriculture and Justice will hold joint hearings on competition issues in U.S. agriculture. For dairy, the workshop will be held on June 7, 2010 in Madison, Wisconsin. See you there!

Block Cheddar & Nonfat Powder Tight; Barrel Cheddar Supply Excessive (p. 14):
    Too little block Cheddar, too much barrel Cheddar. Supplies of nonfat dry milk are very, very tight, currently.

Let’s chat … (p. 15):
    This story is our “Article of the Month.” Click here to read.

New Zealand Milk Flow Falls Way Below 2008-2009 Levels (p. 16):
    USDA’s Dairy Market News reports, in its December 10, 2009 analysis, that New Zealand’s farm milk production is off to a slow, disappointing start: down about 3.9% for the first few months of the current pasture season (which begins in our mid-late summer). New Zealand marketers had naively imagined that their island nation would rebound (from last year) with an eight percent milk production gain. Needless to say: global dairy commodity markets are tight and virtually all of New Zealand’s manufactured dairy products are committed to buyers. We also include Dairy Market News’ “global dairy commodity price ranges” but define them in terms of U.S. dollars per pound (low and high end of the reported price ranges).

November 2009  Issue No. 364

Inside this months issue...

Feature story: “Upper Teens” (Cwt.) U.S. Farm Milk Prices Ahead, IF … (p. 1):
    See our story of the month here.

October 2009 Class III Price $12.82 – October Class IV $11.86 (p.1):
    Slowly the federal milk order manufacturing prices creep up.

Employee Share of Darigold’s “Risk Management” Profits: $18 Million Bonuses (p. 2):
    Somebody’s making money! Earlier in 2009, the directors of Darigold – the predominant dairy co-op in the Pacific Northwest – fired the co-op’s Chief Financial Officer after he shared in a formula-based, $18 million bonus – his share of the co-op’s “risk management” earnings. Did Darigold’s position as a big seller of block Cheddar earlier in 2009 help Darigold gain profits from settling its dairy futures/options positions at CME?

USDA Trying to Pay $290 Million to Dairy Farmers by Year’s End (p. 2):
    The check is … somewhere around here! USDA hopes to get the $290 million in payments out to dairy farmers by year’s end. Maybe farmers can pick up the checks on the same trip to town as when they get their H1N1 Swine Flu shots!

Dean Foods Starts “Growing” Own Milk Supply (p. 3):
    Dean Foods’ representatives are scouring the country in the Mid-East and Southeast, soliciting dairy farmers to ship direct to the firm. But Dean Foods’ pay price offers are somewhere south of “cheapo.” Watch for a big scramble for milk and some sharp elbows where Dean Foods is chasing farmers.

Southeast Dairy Co-op Marketing Agencies Pondering Response to Dean Foods’ Moves (p. 3):
    What are the Southeast dairy “superpools” going to do to respond to Dean Foods’ moves? One possibility: cut premiums in the region to zero.

Southeast Marketing Chaos Could Spread: Possible Danger to Other Regions’ Superpools, FMMOs (p. 3):
    The “Southeast disease” could spread to other regions of the country. If Southeast dairy superpools (or Dean Foods) kick out the struts, the industry could see collapse of regional common marketing agencies in other regions, and perhaps demise of some federal milk orders. Chaos ahead, likely.

Land O’Lakes CEO’s Pay Totaled $6.7 Million in 2008: Up 237% in Two Years (p. 4):
    Omigosh! Land O’Lakes CEO Chris Policinski saw his total compensation for 2008 climb to $6.727 million dollars. That’s an increase of 237% in just two years. LOL’s top five executives all enjoyed 100%+ compensation gains in that same time.

LOL Screws Up: Shortage of Retail 1/lb. Butter in Quarters (p. 4):
    With LOL executives enjoying 100% compensation increases in the past two years, you’d think those bozos could do something right! Currently, a shortage of one-pound retail packages of butter cut into quarters afflicts the nation. Why? Because LOL didn’t keep enough equipment on line to keep the supply pipeline full! The pre-Thanksgiving to Christmas season is the busiest retail butter sales period of the year.

Developments in the Dairy Antitrust Scene … (p. 5):
    The Milkweed offers an in-depth analysis of current events in the dairy antitrust scene. Only in The Milkweed …

CME Cheddar Pricing: Too-Powerful a Dairy Price Signal (p. 5):
    John Bunting details how CME Cheddar cash market pricing is too powerful a signal for dairy.

NFDM Again (p. 6):
    Here we go again! Writer John Bunting details how weekly NASS prices for nonfat dry milk submitted to USDA are $.30+ cents per pound below spot markets. Is there another nonfat dry milk pricing scandal brewing?

Idaho Irony: Less Milk, More CME Cheese Sales (p. 7):
    A large volume of Cheddar sold at the Chicago Mercantile Exchange have come from Idaho is 2009. Why does Idaho have extra cheese? Milk production is down in the state. Cheddar sales are strong, nationwide. Why all the sale of Idaho-based Cheddar?

Low-Flying Dairy Farmer’s “Good Neighbor Policy” (p. 8):
    Read the remarkable story of Steve Holesinger. He has only been milking cows for one and a half years, he’s selling raw milk to consumers in northwestern Illinois … and obtaining $63 per cwt. for his milk. But Steve’s former career in avionics leaves him uniquely prepared as the “aerial surveillance officer” for a neighborhood group fighting a proposed siting of a 5,000-6,000 cow dairy across the road from Steve’s farm. Illinois’s smallest farmer fights against the dreams of California dairy empresario A. J. Bos to become Illinois’ biggest dairy farmer!

H.O.M.E.S. vs. A. J. Bos – Trial Starts November 23 (p. 9-10):
    Early Thanksgiving week, a trial starts in Galena, Illinois that pits neighbors fighting plans for Californian A. J. Bos to impose mega-dairy farm in their community. Objections: what kind bedrock lies underneath Bos’ half-built site? And what about the streambed that appears to have been built upon by Bos’ contractors? We show a lot of the background.

CROPP Will Take Over HP Hood Organic Producers’ Marketing (p. 11):
    On January 1, 2010, CROPP (Organic Valley) will take over milk marketing for independent dairy producers who have been selling their milk to HP Hood. Lots of questions raised here …

New E-book Details FMMO “Gaming” …(p. 11).
    A former USDA milk order employee has spilled the beans on dirty dealings in milk regulation in a new electronic book titled, “Corruption in the USDA.” Interested? Go to the following Web site: http://www.lulu.com/product/download/corruption-inside-the-usda/5636387

USDA: Eliminate Pesky Citizen TB Program Input; Cram Down NAIS (p. 12).
    Writer Mary Zanoni details USDA’s latest effort to shut off citizen input on issues related to the National Animal Identification System. USDA is proposing new livestock tuberculosis rules that end-run the federal Administrative Procedures Act. Why? To remove citizen participation from rule-making that brutally enforces mandatory national animal identification programs.

2009 Crop Quality: A Mixed Bag (p. 13):
    Writer Paris Reidhead details the many considerations about crop quality, following a tough weather year in many parts of rural America.

Nonfat Dry Milk & Butter Supplies Tight; But Mucho Barrel Cheddar (p. 14):
    Pete Hardin offers a wide-ranging perspective on the dairy marketing climate right now. Nonfat dry milk and butter are very tight. But the industry is awash in barrel Cheddar. Looks like a lot of foreign MPCs are being used to make “Cheddar” in the U.S. Numbers for U.S. milk volume and amounts of dairy products being made from that milk simply do not add up.

Without Much of a Push, Consumers’ Retail Dairy Purchases Skyrocket (p. 15):
    The U.S. dairy industry is seeing the greatest-ever shift in consumer purchasing and use habits. Retail sales of cheese are up over five percent for 2009. In recent months, fluid milk sales are up 2.5%. What’s happening? People are engaged in more home-prepared meals. They’re buying cheese and fluid milk and yogurt for home use. Trouble is: except for the Wisconsin Milk Marketing Board’s cheese promotion efforts, little effective dairy promotions are being conducted to effectively push these fast-developing consumer trends. Hardin urges some old fashioned solutions – dairy-heavy recipes (for a new generation of consumers), coupons, emphasis on taste and nutrition!

Fatally Flawed: Schumer MPC Tariff Bill Exempts Mexican Imports (p. 16):
    Earlier, we’d hoped that S.1452 (the “Milk Tariff Equity Act”) sponsored by U.S. Senator Charles Schumer (D-NY) would help put a stop to the imports of cheap, foreign dairy proteins (milk protein concentrates). But review of that bill shows a loophole that exempts Mexico. What with free-trade deals between New Zealand/Mexico, and “transshipment” trickery, Schumer’s bill is worthless. That loophole dates back to a 2003 bill sponsored by infamous Idaho Senator Larry Craig (“tap your foot three times if you want me”). Following Craig’s footsteps on MPC issues is a big, big mistake.

October 2009  Issue No. 363

Inside this months issue...

U.S. Milk Prices: No Place to Go But UP (p. 1): See our “story of the month #1.”

Dean Foods, DFA Warring Over Milk Supplies (p. 1): See “story of the month #2.”

September 2009 Class III Price $12.11 – September Class IV $11.15 (p. 1):
    Milk prices in USDA’s federal order program are FINALLY starting up. The Milkweed projects that current dairy commodity prices “lock in” about $1.75/cwt. more increase in the Class III price for the coming two months.

USDA to Allocate Sander’s $350 Million for Dairy: $290 Million to Producers, $60 Million Gov’t Cheese Buys (p. 2):
    A political log-jam that dammed up allocation of a $350 million budget item destined for dairy farmer price relief has been cleared. Based upon a budget measure driven through the U.S. Senate by Vermont’s Bernie Sanders, USDA will allocate $290 million in direct payments to dairy producers. Another $60 million will purchase cheese.

Gamblers Making Big Money in Dairy Futures/Options Betting (p. 2):
    One company reports spectacular returns on investment ($546.5% in 2007) by betting on dairy futures/options. They’re soliciting investors, at $50,000 a pop. So far in 2009, the return on investment is only 25.38%. Creepy.

Grupo LALA Buys NJ’s Farmland Dairies (p. 2):
    Mexico’s largest fluid milk processor – Grupo LALA – continues to grow in the U.S. Latest purchase: Farmland Dairies (Wallington, NJ).

Massive Northeast Antitrust Lawsuit Hits DFA, DMS, Dean Foods & HP Hood (p. 3):
    A private antitrust lawsuit has been filed against Dairy Farmers of America, Dairy Marketing Services, Dean Foods and HP Hood alleging that those firms unduly reduced competition (and prices) for farm milk in the Northeast. Big stuff!

Cheese (+5.7%) & Fluid Milk (+2.3%) Continue Spectacular Retail Growth (p. 3):
    The headline says it all: for the 90 days ending September 2, retail sales of cheese and fluid milk continued their spectacular growth spurt.

MPC Imports Vary According to Currency Values (p. 4):
    Writer John Bunting reports on his research showing that during the past year, months in which high levels of MPC imports were reported also coincided with high values for the U.S. dollar vs. the New Zealand dollar. Conclusion: MPC imports are not about “dairy processing efficiency,” they’re about money.

CWT’s Latest Scheme: $.25/Cwt. Mandatory Assessment on All Milk (p. 5):
    In September, details leaked out regarding National Milk Producers Federation’s latest scheme: try to make CWT a mandatory federal program with a twenty-five cent per hundredweight deduct from all dairy farmers. Who’d get the money? NMPF, of course!

Hard Times on the Farm: Lessons from the Loss of Section 22 (p. 5):
    Today’s crisis of dairy protein powder imports traces back to the Uruguay Round of the World Trade Organization in the mid-1990s, when the U.S. gave up “Section 22” – tariff protection against imports harming domestic agricultural support programs. MPC – which was not recognized in the mid-1990s – started hitting our shores shortly after the U.S. dropped its protection.

Vermont’s U.S. Senators, DOJ Antitrust Chief, Discuss Dairy Competition (p. 6):
    On September 19, the U.S. Senate Judiciary Committee held a field hearing in St. Albans, Vermont. Subject: Competition in the Northeast Dairy Industry. The state’s two U.S. Senators – Patrick Leahy and Bernie Sanders – vented their concerns. Leahy imported Christine A. Varney – head of the Antitrust Division of the U.S. Department of Justice. On pages 6-7, The Milkweed quotes extensively from this high-powered trio’s remarks.

USDA “Commercial Disappearance” Data Miss Class II Milk, Chocolate (p. 7):
    “Supply and demand” supposedly rules the U.S. dairy industry. But writer John Bunting’s research shows that USDA’s “Commercial Disappearance” data DOES NOT INCLUDE CLASS II MILK (YOGURT, ICE CREAM, SOUR CREAM AND COTTAGE CHEESE. How can USDA estimate the nation’s dairy “supply/demand” when failing to account for an array of products that total about 12% of all farm milk use in the federal milk order system?

Dean Foods Dumps DFA as Milk Supplier from Dozen+ Plants (p. 8):
    Dean Foods has notified that DFA will not be the raw milk supplier in about 14 milk plants, starting in January 2010. Dean Foods is seeking its own farm milk supply for selected plants in the Southeast, Mid-East and Northeast regions.

Spat Won’t Impact Antitrust Cases’ Progress (p. 8):
    Milk supply wrangling between Dean Foods and DFA will have no impact on the combined antitrust cases in the Southeast, in which Dean Foods and DFA are major defendants. If anything, plaintiffs’ lawyers like to see the two tussling.

Wide-Ranging “Ripple Effects” from Dean Foods’ Moves (p. 9):
    The Milkweed examines some of the fallout from the Dean Foods/DFA milk supply spat, including: possible demise of DFA, collapse of multi-regions’ fluid milk superpools, and possible demise of federal milk orders.

DFA’s Borden Cheese Using MPC! (p. 9):
    Borden Cheese, a wholly-owned subsidiary of Dairy Farmers of America, uses Milk Protein Concentrate as an ingredient in Borden’s “Grilled Cheese Melts.”

R-CALF USA’s President Details Many Dangers of NAIS (p. 10):
    Max Thornsberry, DVM, writes about the three elements in USDA’s plants to register movement of all livestock from birth farms to … wherever. This guy knows his stuff!

Horizon Organic: No Help Wanted (p. 11):
    We take a look at some of the foolishness that goes on in organics.

Maryland Shoppers Warned of Organic Milk “Shortages” (p. 11):
    On October 1, shoppers at a Safeway supermarket in Annapolis, Maryland were warned of supply shortages for organic milk. WHAT???

New Organic Factory Farm Dairy Complaints Being Investigated: Change in the Wind at the USDA’s National Organic Program (p. 12):
    The “new” USDA is showing much more curiosity about complaints regarding violations of organic dairy standards by “factory-style” organic milk producers. Further, the appointment of Miles McEvoy to head USDA’s National Organic Program is viewed as a positive change. McEvoy’s predecessor had too-cozy a relationship with lobbyists and big food processors.

Elanco Touts Posilac® “Safety” (p. 12):
    The new owner of Posilac®, Elanco, has issued a new report detailing claims of “safety.” This report is refried, Monsanto-style baloney.

What’s Wrong with Mandating Higher Fluid Milk Solids Standards (p. 13):
    Pete Hardin explains some comments from the September 2009 issue in which he opposed mandatory imposition of higher non-fat milk solids standards for beverage milk.

Nonfat Milk Powder Tight: Plenty of “Cheddar”* (p. 14):
    Our dairy commodity analysis shows milk powder supplies tightening dramatically. Whey prices and butter prices are rising globally – to levels not expressed in commodity prices in the U.S. … yet. Plenty of cheese in warehouses, but one must wonder how much of that product is actually cheese that complies with FDA’s standards of identity.

More than a one-horse hit needed to pull us out of this mess (p. 15):
    We discuss the range of major dairy issues confronting dairy, and note that mere farm milk quotas and “cow-killing” programs won’t let us get a handle on dairy imports. Farm milk supply management is just one “horse” in a four-horse hitch that must also include import controls, Antitrust enforcement, and modern milk pricing.

“Specter-Casey” Dairy Bill Now S. 1645 (minus Casey) (p. 16):
    The so-called “Specter-Casey” dairy bill in the U.S. Senate has again been renumbered – to S. 1645. Senator Casey is no longer a co-sponsor. Specter has said he will not push the legislation.

Cargill Develops Non-Dairy Cheese Substitute (p. 16):
    Cargill has developed a non-dairy, soy-based pizza cheese substitute that it will soon sell in Europe. No thank you, Cargill.

September 2009  Issue No. 362

Inside this months issue...

Milk Tight Everywhere But in Upper Midwest (p. 1):
    Headline says it all. In all regions of the U.S. except the Upper Midwest, milk supplies are very, very tight. Cool summer weather has helped prop up summer milk volume in Wisconsin and Minnesota.

August 2009 Class III Price $11.20 – Class IV $10.38 (p. 1):
    Class prices for manufacturing milk are creeping up in USDA’s milk pricing scheme. But those prices have a long way to go before dairy producers can turn black ink.

Credit Availability: Next BIG Dairy Farm Crisis (p. 2):
    The next crisis facing dairy farmers is obtaining and/or maintaining credit. Banks lending to dairy farmers are in a panic, as red-ink operations and equity deterioration have slammed dairy farmer borrowers. Watch out for many more foreclosures on dairy farms in coming months.

Vilsack Seeking Nominations for Dairy Advisory Board (p. 2):
    USDA is seeking nominations for a 15-member “advisory board” to help the Secretary forge better dairy policy options. Who’ll be on the board?

“Reverse Flow”: Kansas/Oklahoma Milk Shipped to Needy California Plants (p. 2):
    Hard to believe … but big dairies in western Kansas and Oklahoma are sending their milk to California, where manufacturing plants are desperate for milk.

May-July Retail Sales Solid: Cheese +5.8%, Fluid Milk +1.9% (p. 3):
    Retail sales data for the 13 weeks ending August 2, 2009 show continued solid growth in both cheese and fluid milk sales.

European Commission Dairy Price Investigation (p. 3):
    Why have consumer fluid milk prices at supermarkets in England remained so high? The European Commission wants to find out. After they’re done over there, they could continue their digging in the U.S.

MPC – A Story of Control (p. 4-5):
    Writer John Bunting takes a long look at the arguments opposing the notion that Milk Protein Concentrates are not the cause of low farm milk prices.

Fonterra WMP Auction Up Dramatically Again (p. 5):
    Fonterra’s early September auction of whole milk powder showed another increase – up 24.2%! That gain follows a 25% increase in the early August WMP auction. Global dairy commodity prices are rising.

Milk Check Scheme: Dairylea Employee Stole $595,000 (p. 6):
    Cheryl Nelli, an employee of Dairylea Co-op, diverted nearly $600,000 of co-op funds to her personal financial accounts during the period 2002-2009.

UW-Madison Caves in to Systemic Ag Carnivores: Stifling Michael Pollan’s Book, “Omnivore’s Dilemma (p. 6):
    The book selected from a search among 100 titles for a campus-wide reading/discussion – Michael Pollan’s “Omnivore’s Dilemma,” was dumped by the UW-Madison chancellor’s office following complaints from agriculture groups and the UW ag school dean.

Senate Dairy Bills Would Halt Flood of Cheap Milk Protein Imports (p. 7):
    Two bills currently introduced to the U.S. Senate would help dairy address the milk protein imports problem. Those bills are “The Quality Cheese Act of 2009” (S. 666 – introduced by Wisconsin’s Russell Feingold) and “The Milk Import Tariff Equity Act” (S. 1542 -- introduced by New York Senator Charles Schumer.)

Transcript of August 20 NPR Dairy Antitrust Broadcast (p. 8-9):
    The Milkweed, reprints in its entirety, a transcript of the long broadcast about dairy antitrust that was carried on August 20, 2009 by the National Public Radio news program, “All Things Considered.”

Sept. 10: Big Court Date for Southeast Dairy Antitrust Cases (p. 9):
    Two key issues were aired on September 10, 2009 in the combined antitrust cases in the Southeast. Issues at hand: objections to the judge’s order to publicly open all documents, plus certification of classes.

NMPF’s Kozak Should Resign (p. 10):
    The accumulation of years of actions against dairy farmers’ interests by National Milk Producers Federation (the dairy co-op lobby) should propel CEO Jerry Kozak on to his next employment. The skids under Kozak are being greased.

Quality Hay Scarce in Northeast, Upper Midwest (p. 10):
    Unusually wet weather during the late spring and much of the summer leaves quality, dry hay in scarce supply over two key dairy regions of the country – the Northeast and the Upper Midwest. Come winter, quality hay will be expensive.

Excerpts from Southeast Dairy Antitrust Case Documents (p. 11):
    We reprint key documents from a recent document filed in the combined Southeast Dairy Antitrust cases that lays out reasons why plaintiffs’ lawyers believe that all documents should be made public. Powerful stuff!!!

Ruminants + Grazing Can Help Reverse Desertification (p. 12-13):
    Paris Reidhead digs into the research explaining how loss of ruminants grazing has contributed to deterioration of drylands into deserts. As usual, Paris presents readers with solid food for thought – and makes a good case for ruminant agriculture.

Dairy Cattle Replacement Prices at Auction Markets Across the U.S. (p. 13):
    Not much change in dairy livestock prices around the country. In the Southeast, most springing heifers are being transacted in “barter” transactions.

Cheddar Prices Rise, Fall: Support Price or Demand??? (p. 14):
    Cheddar and nonfat dry milk prices have increased over the past few weeks at the Chicago Mercantile Exchange. But are factors driving those increases related to supply-demand or USDA’s dairy support price increase?

Feature Story: Good Ideas/Bad Ideas (p. 15):
Click here for our “Story of the month.”

ISGA Releases Final Report on Karst Under Mega-dairy (p. 16):
    We seldom reprint press releases. But this story from HOMES – a group of neighbors fighting against a California dairy operator’s plans to dump a mega-dairy in their back yards – is compelling. Sophisticated testing of bedrock formations at the site of A. J. Bos’ proposed mega-dairy just west of Nora, Illinois shows karst bedrock all over the site, including under the locations of manure storage ponds.

August 2009  Issue No. 361

Inside this months issue...

Dairy Farmers’ Price/Equity Crisis Continues (p. 1):
    The table is being set for improved farm milk prices: milk supplies are tightening in the west, consumers’ retail purchases of cheese and fluid milk are spectacular, and USDA’s temporary dairy product price support increase is also helping raise commodity prices at the Chicago Mercantile Exchange. But so far producers have seen no improvements in their milk checks. In a wide-ranging survey of current dairy events, Pete Hardin analyzes that U.S. dairy farmers have lost about $7 billion in milk income for the first six months of 2009 and have lost about $12 billion in livestock equity values since October 1, 2008.

July 2009 Class III Price $9.97 – Class IV $10.15 (p. 1):
    Enough said.

USDA Announces Three-Month Dairy Product Support Price Increase (p. 2):
    At the end of July, USDA announced a three-month increase in prices paid for surplus dairy commodities. This move is a short-term band-aid, but dairy producers will take any extra money they can get right now.

USDA/DOJ to Hold “Agricultural Competition” Workshops in 2010 (p. 2):
    These two federal departments will hold joint, public workshops on agricultural competition issues in 2010. This announcement is another sign that the Obama administration wants to take a stronger view of antitrust issues in food and agriculture.

Gillibrand Wants MILC Boost (p. 2):
    NY Senator Kirsten Gillibrand has offered two bills into the U.S. Senate that would revise USDA’s farm milk price “safety net” (the Milk Income Loss Contracts, or MILC). She proposes doubling the amount of payments to producers (to 90%), making those 90% payments retroactive to March 2009, and adjusting the MILC price calculator for inflation.

California Block Cheddar Yields Defy Legal Explanation (p. 3):
    In 2007, California’s cheese plants producing 40-lb. block Cheddar saw their cheese yields grow by 1.2 pounds – up to 13.7 pounds per hundredweight of milk in the cheese vat. However, farm milk protein content in 2007 in California actually decreased a tiny fraction (compared to 2006). And less nonfat dry milk was used in cheese manufacture that year. These facts beg the questions: what proteins are in those cheese vats to boost yields? And how can much of that “Cheddar” be legal?

Biggest MPC Danger May Lie Ahead! (p. 3):
    Now that dairy commodity prices are heading up, the greatest danger to milk price improvement may be continued, illegal use of Milk Protein Concentrates in cheese making.

Crunch Times: “Golden State” Milk Output Declining Rapidly (p. 3):
    Look for USDA’s July 2009 milk production data for California to show a big decline.

“Articles of the month” #1:   Click here to view all four stories in this first set of “articles of the month.”
 * Vermont Senator Bernie Sanders Targets Dean Foods, Dairy Antitrust (p. 4)

 * Senators Seek Antitrust Scrutiny of Dean Foods (p. 4)
 * Letter to DOJ Requesting Antitrust Investigation of Dean Foods (p. 5)
 * Dean Foods Announces Big Profits for April-June 2009 Quarter: $64.1 Million (p. 5):

 

Credit Shortage Sparked Sales of Surplus NFDM to CCC (p. 6):
    John Bunting details how shortage of credit to major dairy co-ops, not “surplus,” sparked sales of nonfat dry milk to the Commodity Credit Corporation last fall and winter.

Competition Has Put $$$ In Wisconsin Farmers’ Milk Checks (p. 7):
    John Bunting contrasts “mailbox prices” in Wisconsin and New York State, and demonstrates how Wisconsin dairy farmers fared better, price-wise, even though that state has far less Class I (fluid) use. The difference? Competition for raw milk.

Fast Cheddar Price Increase? Beware of “Depooling” in FMMOs (p. 6):
    If Cheddar prices spark big gains in federal milk order prices, the danger of “depooling” lurks. “Depooling” is removal of Class III (cheese) milk from a month’s federal order revenue pool, when a price inversion occurs. In other words, when cheese milk prices are higher than fluid milk prices.

“Article of the month” # 2: Imports. Imports. Imports. U.S. Dairy “Surplus” – A Complete Lie (p. 8-9):
    View this big story here.

Senator Charles Schumer Bill to Fix Tariffs on MPCs, Casein (p. 9):
    New York’s U.S. Senator Charles Schumer has proposed import tariffs on Milk Protein Concentrates and Caseins.

Chinese Demand + South American Problems = Tight Global Soy Supply (p. 10-11):
    Writer Paris Reidhead analyzes the global soy situation, detailing how increased Chinese demand and crop problems in Argentina have combined to make the global soy supply tight.

Spectacular April-May Retail Sales: (Cheese +7.1%) & Fluid Milk (+1.%) (p. 11):
    Retail sales of cheese and fluid milk continue spectacular sales performance during the April-June 2009 period.

National Mil Producers, Big Ag Groups Stand to Profit from Proposed “Animal Welfare” Fix in Michigan (p. 12):
    Michigan’s legislature is on the verge of passing a law dictating that dairy farmers must follow animal welfare guidelines developed by the National Milk Producers Federation – a Washington, D.C. dairy co-op lobby. Trouble is: NMPF hasn’t yet even finalized those guidelines!

Dairy Cattle Replacement Prices (p. 13):
    Slightly better interest in springing heifers has increased prices in some markets by $100-200 per head. Prices for baby calves are down – reflecting future perceptions of heifer prices.

Dean Foods Paid $35 Million for Foremost Farms’ Consumer Products Division (p. 13):
    According to Dean Foods 10-Q statement filed on August 6, the company states it paid $35 million for an unidentified acquisition for its fluid milk division on April 1, 2009. That’s the same day that Dean Foods announced purchase of the consumer products division of Foremost Farms, a Wisconsin-based dairy co-op.

Dairy Commodity Prices Increase, USDA June 2009 Data Suspect (p. 14):
    Pete Hardin analyzes trends behind recent dairy commodity price increases. He notes a huge disconnect between June 2009 milk output data from USDA (showing a –0.1% decline) with significant increases in all forms of dairy usage: fluid milk, cheese production, butter production, and nonfat dry milk production. Goofy data.

New Voices/Ideas vs. Same Old “Stuff” (p. 15):
    Pete Hardin discusses some of the “new” voices involved in trying to improve dairy, and contrasts their ideas with the “same old stuff” proposed by the big dairy co-ops and other “mega-interests.”

Russ Feingold and the “Quality Cheese Acts”: A Brief History (p. 15):
    A few Wisconsin legislators, like U.S. Senator Russell Feingold, have been trying for nearly a decade(!) to clean up the integrity of cheese through federal legislation, by banning use of MPCs in “cheese.”

Vilsack: Changes in Works at National Organic Program (p. 16):
    Will Fantle, with The Cornucopia Institute, details comments by USDA Secretary Vilsack at an organic milk price “rally” near La Crosse, Wisconsin in late July. Vilsack promised to enforce the law in organic dairy production. That’d be a change from USDA’s historic failure to enforce “pasture access” rules for organic mega-dairies.

CWT Paid $4.9 Mil. in Interest + $3 Mil. Overhead (p. 16):
    CWT’s financial records, available on the internet, show how last year the organization paid $4.9 million in interest and amassed overhead totaling $3 million. Why is CWT, with income of about $10 million per month, borrowing in the range of $100 million?


July
2009  Issue No. 360

Inside this months issue...

Needed: New Practices and Policies, Not Bigger Band-Aids (p. 1):
    Click here for our first “story of the month.”

June 2009 Class III Price $9.97 – Class IV $10.22 (p. 1):
    As bad as those prices are, they’ll probably be a bit worse in July.

Money & Cash Flow Woes Abound in Dairy Country (p. 2):
    Six months+ of milk prices several dollars below costs of production leave no money and few positive emotions on America’s dairy farms. Many dairy farmers’ finances and emotions are right at the brink of collapse. Dairy livestock prices and farmland values are pulled down by the farm cash flow crunch.

Late Summer/Early Fall Corn Silage Purchases Will Make or Break Many Big Dairies (p. 2):
    Want to pick one event that will signal whether dairy farms (especially larger ones that rely on purchased feed inputs) will live or die? In late summer and early fall, ability to purchase corn silage from contractors will determine such farms’ fates. Contractors must be able to see payments, before they chop corn stands for silage for dairy farmer neighbors. Otherwise, they’ll let the stands mature for ear corn. Without recharged adequate stocks of corn silage for over-winter feeding, dairies cannot continue very long.

Critics Charge New USDA Rules Will Kill U.S./State Dairy Promotions (p. 3):
    Click here for our second “story of the month.”

Organic Dairy Producers Told to Cut Back Production (p. 4):
    Organic dairy markets are in chaos. Several big buyers have instructed producers to restrict raw milk marketings, because demand has declined from historic 15-20% annualized gains down to a modest decline. Contracts are being torn up, producers are being dumped out of markets.

March-May 2009: Spectacular Gains for Retail Cheese & Fluid Milk Sales (p. 4):
    For the 90-day period ending May 31, 2009, retail sales of cheese and fluid milk showed spectacular gains (compared to year-ago data). Cheese sales arose 5.1% and fluid milk sales climbed 1.2%. What “dairy surplus?”

“I’d love to pet a cow!” (p. 5):
    Warwick, New York dairy farmer Tunis Sweetman, Jr. details how he hosted 50 employees of the food purchasing section of New York City school system for a tour of his farm. The city folks loved their tour … and the questions flew both ways.

California’s 2007 Block Cheddar Yields 13.7 Pounds/Cwt. (p. 6):
    John Bunting uses data from California’s Department of Food and Agriculture to reveal that California plants producing 40-lb. block Cheddar in 2007 averaged astronomical yields of 13.7 pounds per 100 lbs. of farm milk. Under normal, legal practices, such yields are impossible. What’s going on? Funny business in the California cheese vats that’s yielding undue quantities of Cheddar cheese!

Farm to Supermarket: Price Transmission Failure (p. 7):
    John Bunting details how the “spread” between farm milk prices and consumers’ fluid milk costs virtually doubled from January 2008 to May 2009. Somebody’s making a lot of money by not passing through to consumers the lower milk prices that farmers are being paid.

NMPF’s Jim Tillison Prevaricates: Says Imported MPCs No Problem (p. 7):
    The head of the CWT program – Jim Tillison – recently claimed on a radio interview that imported MPCs are not a factor in low milk prices being received by U.S. dairy farmers. There is no U.S. milk surplus.

June 2009 “All Milk Price” at 25% of Parity (p. 7):
    Writer John Bunting details how dairy farmers’ milk prices in June 2009 equaled 25% of “parity” – a long-running measure of relative purchasing power.

Sexed Semen Technology Could Turn Dairy Upside Down (p. 8):
    Writer Paris Reidhead presents an overview of “sexed semen” technologies. Additional heifers gained from farmers using “sexed semen” presents what looks like a tidal wave of heifers waiting to come into the milking string in the coming year.

Dairy Cattle Replacement Prices at Auction Markets across the USA (p. 9):
    In one word: bad. #1 springing heifers are down to $900-$1100 per head, with extreme tops at $1300. In the Southeast, virtually no market exists for dairy animals.

Dairy Commodity Picture Basically Unchanged (p. 10):
    ‘Nuf said.

U.S. a “deficit milk producing nation” since 1996 (p. 11):
    Pete Hardin lays out USDA’s “commercial disappearance” numbers since 1990. The data shows that starting in 1996, U.S. consumers have used more dairy products than U.S. dairy farmers have produced. Dairy “surplus” is a myth. Low milk prices are victim of dairy imports – used specifically to keep down big dairy processors’ costs.

Courts Consolidate CME Manipulation Lawsuits vs. DFA (p. 12):
    Five separate lawsuits filed against Dairy Farmers of America, following DFA’s $12 million penalty assessed by the Commodities Future Trading Commission in December 2008, have been consolidated into a single case in the federal district court in Chicago. Good news: the courts deem these complaints valid enough to go to trial.

Camerlo Angrily Defends DFA’s CME Price-Fixing, Imports (p. 12):
    If DFA board chairman Tom Camerlo were a real dairy farmer, his comments would be laughable. Camerlo, the “playboy of the western dairy industry,” recently wrote a nasty letter to a small farm organization (the National Family Farm Coalition), complaining that DFA was being unfairly criticized for its price-manipulations at the Chicago Mercantile Exchange and importing dairy products. Camerlo said that DFA “only” imported a million pounds of dairy products last year. The Milkweed kicks Camerlo in the keister, puzzling how a man who, over the years, has owned a ski resort, a liquor distribution business, a car dealership and part-ownership in a bank, can claim to represent dairy farmers!

June 2009  Issue No. 359

Inside this months issue...

Dairy Farmers Facing No Good Way Out (p. 1):
    After six months of ruinous milk prices, U.S. dairy farmers face some very difficult decisions about their future. But deteriorated dairy livestock values are now in decline, making the option of selling the herd a financially painful one. One auctioneer in the Southeast is advising: don’t schedule a herd sale until at least September.

Vilsack: U.S. Agriculture “Incredibly Prosperous” (p. 1):
    In late April, USDA Secretary Tom Vilsack wrote a letter announcing nine NAIS “listening sessions” around the country. Vilsack’s first sentence in that letter stated, “The United States has an incredibly prosperous agricultural industry.” Does Vilsack know anything about current farm economics?

May 2009 Class III Price $9.84 – Class IV $10.14 (p. 1):
    Self-explanatory.

USDA Posts New DEIP Export Subsidies, Stirring Global Complaints (p.2):
    USDA has announced a new round of dairy export subsidies, through the Dairy Export Incentive Program. Foreign dairy nations are crying “foul.”

USDA Ignored Inquiries to Buy 200 Mil. Lbs. of Surplus Milk Powder (p. 2):
    Earlier this year, a Tennessee-based businessman had lined up export buyers for all of USDA’s surplus milk powder. USDA paid no attention to this request to move all that product out of the country and into international feeding/nutrition programs.

Private U.S. Marketers “Locked Out” of DEIP Powder Sales? DairyAmerica & Fonterra Look Like Prime Beneficiaries (p. 2):
    The latest USDA dairy export incentives will basically “lock out” many private exporters from nonfat dry milk exports. That’s because the U.S. milk powder “cartel” – DairyAmerica – will sell no milk powder for export except to its partner in crime, New Zealand-based Fonterra.

Angry Western Dairy Farmers Pull Back from Milk Dumping Plan (p. 3):
    A group of western dairy farmers – including some of the nation’s largest producers – backed off from a planned, two-day, milk-dumping to protest low milk prices. The group has strongly urged California’s major dairy co-ops to develop strong restrictions on how much milk farms may market.

Grupo LALA Paid $435 Million to DFA for NDH (p. 3):
    Mexico’s largest fluid milk processor – Grupo LALA – paid $435 million to Dairy Farmers of America in the May 2009 purchase of National Dairy Holdings. The Milkweed urges DFA members to find out if DFA sold future raw milk supplies to Grupo LALA on an el cheapo basis.

USDA Releases Details for “Dairy Import Assessment Fee” – Dairy Farmers Will Be Mad (p. 4):
    USDA’s newly released proposed rules for the “Dairy Importers Assessment Fee” are out … and they’re goofy. What’s wrong? Our National Dairy Board may no longer promote “U.S.-produced” dairy products! Dairy importers may set up their own promotion program! Importers pay only half the amount assessed U.S. dairy farmers! And importers may get a full refund of promotion assessments!

Dairy Importers Plotting to Create Own “Qualified Program” (p. 4):
    Money attracts. The Cheese Importers Association of America (CIAA) is already plotting to set up its own dairy promotion “qualified” program, under rules for assessing dairy imports recently released by USDA.

Fonterra’s Financial Position Has Eroded Dramatically (p. 5):
    The dairy export giant – Fonterra – is New Zealand’s biggest corporation. Down under, analysts are watching a serious erosion of Fonterra’s financial wellness. Fonterra’s equities have eroded from $4.5 billion to $3.8 billion over the past seven years.

Fonterra Netted 52% on U.S. Sales! (p. 5):
    The New Zealand press has reported (in June 2008) that Fonterra netted $1.3 billion on $2.5 billion in U.S. sales in a recent fiscal year. Is Fonterra pulling an offshore tax scam? Nobody makes that much money … unless something untoward is going on.

Strong NZ Dollar Hurts NZ Farmers’ Incomes (p. 5):
    The strong value of the New Zealand dollar is hurting efforts by Fonterra to export dairy products and return a good pay price to New Zealand dairy producers.

DOJ “Relooking Foremost/Dean Foods Deal (p. 6):
    A key test of antitrust oversight is shaping up early in the Obama administration: the April 2009 sale of Foremost Farms’ consumer products businesses to Dean Foods. That deal – approved by DOJ – leaves virtually zero competition for school milk contracts in eastern Wisconsin. Sources indicate that DOJ is relooking its earlier approval of the deal, which occurred before the new head of the Antitrust Division was appointed.

Did Dean Foods Pay $35 Million or $90 Million for Foremost Farms’ Consumer Products Division? (p. 6):
    Dean Foods’ 10-Q statement filed with the Securities and Exchange Commission on May 1, 2009 lists two subsequent purchases of dairy processing businesses that occurred early in the second quarter. Those unidentified purchases are listed at $35 million and $90 million. Which purchase was for Foremost Farms’ fluid milk business???

Feature Stories: DFA Joint Venture Sells “Cheese Replacers and Extenders” & Jan.-April ’09: Massive Increases in Milkfat-type Imports (p.7)
    Read our two June feature stories here.

El Paso Kids Paid Dearly for School Milk in 2007-2008 (p. 8):
    When the local competition ceased bidding for school milk, Dean Foods’ subsidiary in El Paso, Texas (Price’s Creameries) jacked up the base price for school milk half-pints by almost 12 cents.

Breakdown of El Paso School Milk Costs: Dean Foods Didn’t Pass Through All Milk Cost Reductions (p. 8):
    We offer a breakdown of El Paso Independent School District’s month-by-month school milk costs for the 2007-2008 academic year. Despite contractual language, Dean Foods’ local subsidiary did not pass through contractual reductions that occurred during the 2007-2008 school year.

Texas Dairies Use Aquifer Water for Irrigating Alfalfa (p. 9):
    Sustainable? Green? The big new cheese plant at Dalhart, Texas has spurred development of local dairies that require a massive draw from aquifer ground water to grow alfalfa. Texas is making lots of milk. But is the draw down of aquifer water a reasonable use of that depleting resource?

Synthetic Sweeteners: Ticking Medical Time Bombs (pages 10-11):
    Writer Paris Reidhead finishes his two-part series on the human health concerns related to artificial sweeteners. He cites scientists’ reports and human health anecdotes. Reidhead’s focus on this issue is because two big dairy lobbying organizations want to allow “non-nutritive sweeteners” in the standards of identity for 17 different dairy products.

Scandal Fuels Meltdown in Organic Dairy Industry; Farmers Seek Justice form Obama, USDA; Consumers Headed Back to Court (p. 12):
    The Cornucopia Institute’s Will Fantle updates the ugly picture facing many organic dairy farmers. A judge has dismissed the lawsuit filed by Cornucopia, among others, against Aurora Organic Dairy. That lawsuit had claimed that Aurora’s numerous, documented violations of USDA’s organic standards meant that Aurora’s fluid milk was not “organic.” The judge disagreed.

Connecting the Dots: No U.S. Surplus (p. 12):
    John Bunting takes a look at USDA’s “commercial disappearance” data for 1990 to the present, and concludes that since 1996, the U.S. has consumed more dairy products than it has produced. We’re a “milk-deficit” nation.

Commodity Prices at CME Show No Spark (p. 13):
    Few favorable trends at the Chicago Mercantile Exchange’s cash dairy commodity markets.

Dairy Cattle Replacement Prices (p. 14):
    Except for baby calves, U.S. dairy livestock prices are dropping. Top-end Holstein springers are bringing not much more than $1500 at auctions and private-treaty sales.

Weather and Crops – Look Out for Soybeans Shortages (p. 14):
    John Bunting takes a look at weather forecasts, USDA’s crop progress reports, and marketers’ analyses to conclude that soybeans could be very short later this year.

Time for overdue changes (p. 15):
    Pete Hardin lets fly with his ideas about what dairy (and government) must do to restore a profitable, sound dairy industry. Hardin sees the need for using consumer prices paid for cheese and fluid milk as one basis in a completely revised federal dairy program.

NAIS: a losing proposition (p. 15):
    Hardin’s opinion: USDA’s National Animal Identification System is a completely foolish endeavor, best killed. Many of our worst food-safety fiascos have come from imported foods – even the “Jack in the Box” hamburger contamination back in the early 1990s.

Farmers to USDA Secretary: Ditch NAIS (Is Vilsack Listening?)(p. 16):
    Writer Mary Zanoni summaries results from seven of the nine USDA “listening sessions” conducted in May 2009. Roughly 90% of persons commenting at these meetings spoke against NAIS. The notion of “computer-chipping” food producing animals (and horses) is apparently a directive from the United Nations and USDA is promoting this bone-headed scheme for compliance with global “Free Trade” rules.

May 2009  Issue No. 358

Inside this months issue...

Stories of the Month: Dean Foods Pocketed Big First Quarter Raw Milk Price Drop (p. 9) and What to do ... (p. 15)

Many U.S. Dairy Farms on Verge of Financial Collapse (p. 1):
    Losing several dollars per cwt. for several consecutive months is a prescription for financial disaster. Despite many positive events in the dairy market place, the warehouses are full of cheese in the Midwest and Cheddar cash prices at the Chicago Mercantile Exchange lie near support prices. The nation’s ability to produce adequate milk supplies to feed its citizens is imperiled.

Fonterra: Huge Milk Protein Sales to China (p. 1):
    Fonterra – New Zealand’s dairy export monopoly – has announced a huge sale (160,000 metric tons) of dairy protein powders, which should basically empty Fonterra’s warehouses by July. China is back in the world market.

April 2009 Class III Price $10.78 – Class IV $9.82 (p. 1):
    Farm milk prices stay ugly.

1st Quarter Supermarket Sales Strong: Fluid Milk +0.9%, Cheese +1.7% (p. 2):
    First quarter (Jan.-March) 2009 data shows strong gains for both fluid milk sales and cheese sales at supermarkets (excluding Wal-Mart). Consumers are coming back to dairy.

“Cheez Whiz” from Philippines Detained Again (p. 2):
    The FDA detained imports of Kraft Foods’ “Cheez Whiz” at the Port of Los Angeles. The “Cheez Whiz” was made in the Philippines and was not properly labeled. Thank you, Kraft Foods!

MPC Imports Go Sky-High in Early 2009 (p. 3):
    Milk Protein Concentrate imports entering the U.S. in January-February 2009 totaled 29.166 million pounds – an increase of 71% over the first two months of 2008. MPC imports are bumping demand for U.S.-produced nonfat dry milk adding to “cheese” production beyond U.S. farm milk production gains. Small wonder warehouses in the Midwest are brimming full of cheese. MPC has never been approved for use in human foods by FDA’s mandatory food safety tests.

NFDM Price Collapse = Big Processors’ Windfall Profits (p. 3):
    Some firms made a lot of money off the farm milk price collapse that allegedly was caused by loss of some U.S. milk powder exports. John Bunting estimates that net losses in farm income (due to lost milk powder sales, after subtracting out payments by the CCC for surplus powder purchases) totaled $250.9 million (“Export loss”). But U.S. dairy farmers lost $2.267 BILLION in milk income for January-February 2009. Bunting’s conclusion: big companies used the lost milk powder exports as a smokescreen to help drop prices and boost their profits.

“For Sale” Sign at Farmland Dairies (NJ) (p. 4):
    One of the Northeast’s old-line fluid milk processors – Farmland Dairies (Wallington, NJ) – is for sale. It’ll be interesting to see who the new owner is.

DFA to Sell National Dairy Holdings to Mexican Firm (p. 4):
    Dairy Farmers of America announced sale of its “white elephant” fluid milk subsidiary – National Dairy Holdings – to Grupo LALA (Mexico’s biggest fluid processor).

Cedar Grove Cheese Selling Well at “The Shoe Box” (p. 5):
    A Wisconsin cheese plant has installed a cheese case inside a highly-trafficked shoe store. Results: lots of good Cedar Grove cheeses are being sold in this non-traditional outlet.

U.S. NFDM “Surplus” is Really MPC Import Tsunami (p. 5):
    Writer John Bunting details dairy protein markets.

Aspartame: One Man’s Poison … Another Man’s Profit (p. 6):
    Writer Paris Reidhead has prepared the first part in a series about the human health concerns and dangers regarding Aspartame (sold as “NutraSweet” and “Equal”). Why? Two big dairy groups want to include “non-nutritive sweeteners” (like Aspartame) as part of the standards of identity for 17 dairy products.

California Water Woes Will Impair Agriculture (p. 7):
    John Bunting updates readers on California’s water woes, which will reduce agricultural productivity in the “Golden State.”

Big Lawsuit Filed against Dean Foods’ Directors, DFA, etc. (p. 8):
    A huge, new legal complaint has been filed against Dean Foods’ directors, DFA, and other dairy entities. Allegations are that farmers’ milk prices have been unduly depressed and that consumers’ retail prices have been unduly high – all through concerted actions of the parties named in the lawsuit. Interesting!

Consumer Demand for Raw Milk Grows Steadily (p. 10):
    A free-lance writer, Rosanne Lindsay, takes readers deep into the health benefits and health concerns that are spurring what may dairy’s fastest sector of growth – raw milk.

Holstein Assn. Takes Lead on Farm Milk Production Restraint Program (p. 11):
    Dairy’s predominant cattle breed association – Holstein Assn. USA – is trying to build a groundswell of dairy producer support for a national change in milk marketing practices. Holstein Assn. USA leaders are preparing a legislative package that would mandate on-farm milk production restraint for U.S. dairy farmers.

Vilsack’s NAIS “Listening Sessions” Avoid Hotbed States (WI, MO, MI) (p. 12):
    Activist/writer Mary Zanoni bares the avoidance mechanisms being used by USDA Secretary Tom Vilsack to try to paint a “happy face” on efforts to create mandatory “animal ID” rules. Vilsack has scheduled seven listening sessions across the U.S. – none near “hotbed” states where protests are strong.

Cheddar at Support Price; Sales Excellent, But Midwest Warehouses Full (p. 13):
    Cheddar prices at CME hover near USDA’s dairy product support prices (per pound). Warehouses are full of cheese in the Upper Midwest. Dairy protein markets may strengthen, due to the big deal between China and NZ, and severe drought in the western U.S.

LOL to Close Huge Madison, WI Butter Plant (p. 14):
     Land O’Lakes is closing its big butter plant at Madison, Wisconsin. Loss of this plant capacity will make it tougher for marketers of cream in the region.

Dairy Cattle Prices (p. 14):
    Strongest demand in dairy markets is for open heifers. That’s good, because a lot of farmers are selling heifers to raise money. Springer prices “mostly” steady over past month, with variation in individual markets.

The Milkweed: 30 years and kicking … (p. 15):
    Pete Hardin reflects briefly upon completing this publication’s 30th year. (I could write a book!)

China’s Dairy Processors Learning from Melamine Fiasco (p. 16):
    British dairy analyst Richard Field – an expert on China’s dairy industry – recently spoke at the annual convention of the American Dairy Products Institute in Chicago. Field detailed how China is back in the global dairy markets, and that last year’s melamine scandal will actually help modernize attitudes and practices about food quality/safety for Chinese processors, consumers and regulators. Interesting!!!

S. 889: Cost of Production for Some (p. 16):
    Writer John Bunting pans the recently created Senate Bill 889, which proposes a national cost-of-production calculation for dairy farmers. The bill was introduced by Pennsylvania Senator Arlen Specter ands has one co-sponsor (PA’s Bob Casey). Bunting’s major criticism: big variations in regional dairy farm costs of production would weight profitability towards some regions and not meet high-cost regions’ needs.

April 2009  Issue No. 357

Inside this months issue...

Many Indicators Point to Tighter Dairy Supply-Demand (p. 1):
    Click here for our story of the month.

March 2009 Class III Price $10.44 – Class IV $9.64 (p. 1):
    About the only good thing one can say is that the March cheese milk price in federal orders gained $1.13 over February’s low ebb.

Feb. 2009: Big Gains for Retail Fluid Milk & Cheese Sales (p. 2):
    Data from IRI (a firm that monitors supermarket checkout scanner data) shows big gains in February 2009 for fluid milk and cheese sales. Fluid milk sales rose approximately 2.8% and supermarket cheese sales climbed 3.8%.

Repeated Software Failures Delay Most USDA MILC Payments (p. 2):
    Desperate dairy farmers are still waiting for USDA to get its computer software working so county Farm Services Agency offices can issue “relief checks” through the Milk Income Loss Contract program. Two rounds of software have failed to work properly.

February ’09 MILC Payment $1.51/cwt. (p. 2)
    ‘Nuf said.

California Water Emergency to Curtail Ag Productivity (p. 3):
    In early April, California basically concluded its moisture season with the snowpack moisture at 81% or normal and reservoirs at about three-quarters of capacity. A state-wide water emergency means dramatic curtailments of water for agriculture.

DFA Turns in “Quit Notice” to DairyAmerica (p. 3):
    Dairy Farmers of America has submitted notice to quit membership in DairyAmerica (the milk powder cartel). The first big rat has donned its life preserver and is preparing to jump ship.

Dean Foods Buys Foremost Farms’ Consumer Products Division (p. 4):
    School milk competition in Wisconsin will never be the same! Dean Foods – the nation’s largest fluid milk processor – has purchased the consumer products division of Foremost Farms (Baraboo, WI). The two firms WERE the two largest fluid milk distributors in Wisconsin.

School Milk Contracts: Key Measure of Competition (p. 4):
    Pete Hardin explains how the sordid history of school milk contract bid-rigging once compelled the Antitrust Division of the U.S. Department of Justice to study school milk contracts as the critical portion of dairy merger/acquisition reviews.

Dean Foods’ Purchase of Foremost’s Fluid Division: One Anti-Competitive Acquisition Too Many??? (p. 4):
    Did Dean Foods buy Foremost Farms’ fluid milk business at the wrong time? A new administration in Washington, and a soon-to-be confirmed head of the DOJ’s Antitrust Division, may bring far sharper focus to dairy merger reviews. With Wisconsin U.S. Senator Russell Feingold already chomping at the (dairy antitrust) bit, maybe the Dean/Foremost deal will get another, sharper look.

2008 DFA Audit: Same-Old, Same-Old “Stuff” (p. 5):
    The financial audit released at DFA’s late-March annual meeting shows that “intangible assets” and other nebulous assets total $460 million. Throw in other major obligations (pension program deficit -- $107 million, retained earnings deficit -- $59 million, and “preferred equity securities -- $150 million) and you’ve got the nation’s biggest dairy co-op likely worth less than nothing.

Over Half of 100 Largest Dairy Processors “rbGH-Free” (p. 5):
    Hallelujah! According to the Oregon chapter of the Physicians for Social Responsibility, over half of the top U.S. dairy processors (by $ volume) are now either partially or completely “rbGH-Free.”

Transfer Pricing: Global Giants “Stick It” to U.S. Dairy Farmers, Taxpayers with Help from USDA Import Rules (p. 6):
    Huge quantities of dairy product imports entering the U.S. mask an equally serious problem to the U.S. Treasury – outflow of potential taxable income. This article explains how “Section 6.25” abets major foreign dairy traders’ ability to move U.S.-earned profits outside the country. Dairy is pinpointed as one of the biggest sectors of this tax shell game.

All USD Surplus Directed to Nutrition/Feeding Programs (p. 7):
    In late March, USDA Secretary Tom Vilsack ordered that all 200 million pounds of U.S. nonfat dry milk that had been purchased as “surplus” by the Commodity Credit Corporation be committed to domestic nutrition and feeding programs. That move basically erases any “surplus” nonfat dry milk.

DairyAmerica’s Future? Uncertain … at Best! (p. 7):
    Following a massive lawsuit directed at DairyAmerica’s failure to properly report commodity prices to USDA, Dairy Farmers of America’s notice to quit membership later this year means the first rat is jumping ship. The dairy industry is preparing for DairyAmerica’s long overdue funeral.

Global Milk Powder Prices Rising, Oceania’s Output Down (p. 7):
    Fonterra’s monthly whole milk powder price auction saw increased prices – a good sign for global demand. Meanwhile, New Zealand’s milk production is running about four percentage points below projections for the concluding milk production season.

Retail Cheddar ($5/lb.) vs. Low Farm Milk Prices (p. 8):
    Writer John Bunting details the continued divergence of prices paid by consumers for Cheddar cheese at supermarkets, with what dairy farmers are paid for Class III (cheese) milk. February 2009 was the worst month in history, Consumers paid nearly $5/lb. for Cheddar at supermarkets (according to the Consumer Price Index) while dairy farmers received roughly $.90 per pound for the protein and milk fat components going into that pound of cheese.

Dairy Cow Slaughter 129,000 Head Above Five-Year Average (p. 9):
    Through mid-March, USDA calculated that nearly 130,000 more dairy cows had been sent to slaughter than for prior five-year average (2004-2008).

Massive Casein Imports – Stealth Milk (p. 9):
    Writer John Bunting details how casein imports – just in January 2009 – equaled 700 million pounds of skim milk. USDA does not include casein when calculating its supply/demand estimates.

Details for CWT’s Next “Big Kill” (p. 9):
    The schmucks who run National Milk Producers Federation have announced details to kill another 300,000 airy cows through their “CWT” program. Why is NMPF’s biggest member – DFA – importing foreign dairy products, if there’s a dairy surplus?

USDA: May 4 Producer-Handler Hearing in Cincinnati (p. 9):
    What a farce! USDA will hold a national milk order hearing on May 4, 2009 in Cincinnati, Ohio on proposals to require producer-handlers (milking over about 270 cows) to pool all Class I sales on the federal milk order program. Such a hearing is a waste of time and resources, given all the problems facing the milk-pricing system.

CoPulsation Milking System Reduces Cow-to-Cow Transfer of Staph. aureus Infections (p. 10-11):
    Writer Paris Reidhead writes about a controversial, small company that makes a unique milking system: CoPulsation Milking Systems. Cornell U. research documents that the company’s milking system almost eliminates cow-to-cow transfer of the dangerous Staph. aureus bacteria. Staph. aureus is the toughest mastitis bug facing dairy farmers. INTERESTING!!!

Family Farmers Fear Being Run Over by Food Safety Juggernaut. Organic, Local and Direct Marketers Seek Protections in Washington (p. 12):
    Controversy surrounds various legislative proposals in Congress that aim to tighten up our nation’s food-safety oversight. Will Fantle, who’s with the Cornucopia Institute, details the background and controversies as Congress fumbles around on the issue.

Cheddar, Milk Powder Supplies Tighten, But Prices Stagnate (p. 13):
    tronger retail demand for fluid milk and cheese has tightened manufacturing milk supplies. But dairy commodity prices have not really moved up very much … yet. Dairy Cattle Replacement Prices (p. 14): In recent weeks, prices for springing heifers have shot up nicely. In some markets, prices are up $300-400 per head in the past month.

USDA Crop Intentions Report Doesn’t Reflect Uncertainty (p. 14):
    In late March, USDA issued its planting intentions report. Trouble is: government bureaucrats don’t pay much heed to tremendous financial problems and uncertainty (over prices and costs) for grain farmers as they prepare to plant this spring.

$9.90/cwt. Dairy Product Price Support: Public Policy of Failure (p. 14):
    John Bunting raises the key question: is the $9.90/cwt. support price for dairy products a proper mechanism for supporting dairy farmers’ milk production costs? Answer: Absolutely NOT!

Cheese Milk Pricing: We’re using the wrong measuring tool (p. 15):
    Pete Hardin lays out the numbers – showing that CME cash market-based dairy commodity pricing (that USDA uses for setting Class milk prices in the federal orders) is the wrong measuring instrument. With retail Cheddar prices at $5/lb., dairy farmers deserve better than the pittance they’re receiving through USDA’s manipulated milk pricing system.

NFDM/IDFA Want Aspartame in Milk Products (p. 15):
    Dairy’s two biggest lobby groups – the National Milk Producers Federation and the International Dairy Foods Assn. – have requested FDA allow use of Aspartame (“NutraSweet”) in 17 different dairy products without notifying the public. THIS IS THE WORST FOOLISHNESS SINCE MONSANTO ROLLED OUT BOVINE GROWTH HORMONE! Aspartame is a neurological toxin!

Researchers Solve Flatulence Problems with U.S. Milk Powder Exports (p. 16):
    Pete Hardin details how UW-Madison scientists have discovered that by adding a three percent solution of “Beano” to nonfat dry milk produced in the U.S., flatulence problems experienced by Asian and African persons using our milk powder may be relieved. The new product will be marketed as “Non-Fart Dry Milk.”

NYS Milk Price-Gouging Law Not Enforced (p. 16):
    New York State law limits prices to how much supermarkets may charge for consumer fluid milk products, based upon the Class I (fluid) milk price in USDA’s milk order program, the size of the package, location of retailers, etc. Since late last year, NYS’ Agriculture & Markets overseers have quit taking retail studies. The agency claims it has no funds.

March 2009  Issue No. 356

Inside this months issue...

Dairy Marketing Situation: Imports Torpedo Good Demand (p. 1):
    U.S. consumers’ food consumption habits are changing dramatically with the tough economic times: more meals eaten at home. That’s driving a shift towards increases in at-home cheese use and a visible, monthly slowing of the decline (on a percentage basis) of monthly fluid milk sales (compared to same month, year ago figures). BUT in the fourth quarter of 2008 (and since), dairy imports are flooding into the U.S. And those imports are helping create the appearance of more “surplus” milk powder than is really the case. Export sales of U.S. dairy products are also slowing.

February 2009 Class III Price $9.31 – Class IV Price $9.45 (p. 1):
    We never imagined we would once again report such low, monthly class prices for USDA’s milk order program.

Incredible Surge of Dairy Cattle to Slaughter (p. 2):
    During the first eight weeks of 2009, 112,700 more dairy cows went to slaughter than for the average of the previous four years. Massive dairy cow kill is ratcheting down milk output, in tandem with other factors.

Two Western Dairy Co-ops Facing Financial Irregularities (p. 2):
    Two small dairy cooperatives in western states have seen managers depart amid concerns about the books. In northern California, the Humboldt dairy co-op held back $2 million from its 50 member-patrons in February, as protection against cash flow problems. (Do the math: That’s $50Gs per member!) And in Montana, around the beginning of the year, the manager of Darigold of Montana departed as press reports of possible irregularities with the books were being examined.

Dairy Producers Sue California Dairies, Inc. and DairyAmerica: Claim NFDM Price Misreporting Resulted in Milk Income Loses (p. 3):
    See our “story of the month.”

Ron Kirk (U.S. Trade Representative-Designate) Earned $250,000/yr. as Dean Foods Director (p. 4):
    “Free-Trade” kook Ron Kirk will hate to give up his board post at Dean Foods to take the post as U.S. Special Trade Representative. He’s been making nearly $250,000 year in that position.

Coalition Forming to Oppose FMMO Producer-Handler Changes (p. 4):
    Phoenix, AZ-based lawyer Al Ricciardi is putting together a coalition of concerned dairy processors (and others) to fight against proposals before USDA to eliminate the producer-handler exemption for many dairy businesses that both milk cows and processing fluid milk. Ricciardi may be contacted at 602-248-8203.

By-Laws a Legal Trap: DON’T Sign CWT Contract (p. 5):
    No wise person signs a contract without looking at the fine print. And the by-laws for the “Cooperatives Working Together” (CWT) program are strictly one-sided. Beware.

CWT Can’t Seem to Get Started (p. 5):
    Since publication of this article, CWT officials have announced that they have reached their goal of 67% of the U.S. milk supply to obtain a $200 million loan to kill more cows. Not to be trusted.

Amid NY Milk Price Crisis, Dairylea President Clyde Rutherford Hiding in NJ (p. 6):
    The herd at the dairy farm near Mt. Vision, New York – where Dairylea Co-op president Clyde Rutherford kept some cows so he could keep his name on a milk check – was removed. Dead animals littered the free-stall barn, atop several feed of accumulated manure. How much longer will Rutherford – a bewigged phony & the northeast dairy co-ops’ longest reigning leader – continue to claim he’s a “dairy farmer?”

Section 6.25 Dairy Imports Rule Would Favor Big Foreign Firms (p. 7):
    Watch out for proposed changes in import rules that would force even more imports into the U.S.

DFA’s 2008 Dairy Import Licenses Revealed (p.7):
    Dairy Farmers of America – the nation’s largest milk producers’ cooperative – held 12 dairy import licenses last year. How does that benefit DFA’s members? For what reason did DFA need to import “Butter Substitutes?”

Farm Milk Prices: A History of Manipulation (pages 8-10):
    NY dairy farmer/writer John Bunting takes a detailed, historic perspective on farm milk pricing. He traces relative equity in dairy (among producers, processors and retailers) back to 1981 – at which time the Reagan administration decoupled farm milk prices from parity. Since then, it’s been all downhill for dairy farmers, in terms of their relative earning power.

Farm Milk Up, Fluid Milk Sales Down: Massive Shipments of Milk from Florida (p. 10):
    Decreased fluid milk sales and increased milk volume during the past six to eight months has put Florida dairy marketings in a bind. Massive movement of burdensome milk supplies is moving out of state – in recent weeks, as much as 140 to nearly 200 loads per week.

Orbeseal (Dry Cow Treatment) Causes Defects in Aged Cheddar (p. 11):
    Writer Paris Reidhead details how a veterinary treatment for "dry cows” (animals that have finished their lactation) causes serious quality defects in aged Cheddar cheese.

Microchips, Cancer, and Animal Identification (p. 12):
    Mary Zanoni details the background on how Radio Frequency Identification Devices (RFID), when implanted in laboratory animals, caused numerous cases of cancers. She details how application of these devices to humans was short-circuited by cancer-causing concerns, so the industry turned to livestock!

NY Sen. Aubertine’s Bill: MPC & Casein “Not Dairy” (p. 12):
    New York State Senator Darrell Aubertine has introduced legislation calling for removal of dairy identifiers from consumer food products which contain Milk Protein Concentrates and Casein.

Dairy Commodities Remain Flat (p. 13):
    About the only good thing a person can say about CME dairy commodity prices is that they haven’t gone down in the past month!

Dairy Cattle Replacement Prices (p. 14):
    Our monthly survey of dairy livestock prices shows some gains in prices paid for springing heifers in some markets, but that’s about all the good news.

Tough Questions for DFA’s Management at Annual Meeting (p. 14):
    In an attempt to help DFA delegates focus on the real problems of their organization, we offer some questions to ask at the upcoming annual meeting in late March. “Business as usual” will mean that management tried to lacquer over b.s. and members sleep through the proceedings.

Ontario Milk Quota/Pricing Article Sparks Much Thought, Discussion (p. 15):
    Pete Hardin ruminates on follow-up to the article about the large volume of responses to John Bunting’s article about Canadian milk pricing and farm milk quotas in the February 2009 issue. If the “American way” of milk pricing is these periodic, ruinous crashes, is there a better way?

Milk Production & Parity (p. 15):
    John Bunting looks at U.S. milk production and dairy parity. He wants to dispel what John views as a myth that too-high farm milk prices (generated by late 1970s 80% of parity) generated burdensome milk supplies.

(More) Dairy Solutions (p. 16):
    We continue to throw out ideas, including: *Dairy farmers should form guilds to regional guilds, to truly represent their interests in policy debates and industry matters. A guild could provide accurate information and leadership – two factors that currently are sorely lacking among organizations. *Let’s cut the CCC “make-allowance” for nonfat dry milk by $1.00/cwt. It’s currently $1.73 per cwt. That “make-allowance” (paid for by taxpayers) constitutes “double-dipping,” since processors of butter-powder already receive a similar “make-allowance” from federal/state milk orders. *Change Wisconsin’s producer-security program. Currently, Wisconsin’s agriculture department promises to secure producers’ income from handler default in a variety of sectors – dairy, livestock, grain, etc. Given all the financial pressures (including a possible financial collapse of a huge grain dealership), The Milkweed argues that the state should shift from guaranteeing payment of lost farm income (in the event of a default) to merely offering a low interest (1%?) loan for three years to tide over producers’ cash flow. That system would be cheaper and simpler.

February 2009  Issue No. 355

Inside this months issue...

How Long Will These Rock-Bottom Milk Prices Last? (p. 1):
    No easy answers to this question. Negative factors: declined export markets, increased imports and bad national economy. Positive factors: heavy culling of milk cows in west, scary outlook for water in California. Nobody knows.

January 2009 Class II Price $10.78 – Class IV $9.59 (p. 1):
    Milk prices are headed backs to where they were during Jimmy Carter’s presidency.

USDA Forecasts Lowest “All Milk Price” Since ’76 (p. 1):
    USDA dairy economists project low milk prices all year long – the lowest “all milk price” since 1978. If true, that won’t leave much for the buzzards to pick over.

Surplus Milk Powder Sales to CCC Are Mind-Numbing (p. 2):
    Strange trends behind sales of surplus milk powder to CCC, including big increase in imported dairy proteins in late 2008.

Big Surge of Milk Cows to Slaughter in West (p. 2):
    The march to slaughter is a massive parade for dairy cows in western states. Many late lactation and dry animals are being slaughtered.

Fonterra Gave Melamine Info to Chinese Partner (p. 2):
    Aha! It has now come out that Fonterra – New Zealand’s shady dairy export monster – gave officials of its Chinese dairy processing partner information about use of melamine in dairy products! No wonder the Chinese are mad at Fonterra!

Estimated Dairy Livestock Equity Washout: $10+ Billion (p. 2):
    The Milkweed estimates that U.S. dairy farmers have seen a $10 Billion erosion of their equity in dairy livestock values since October 1, 2008.

CWT Set to Launch “BIG KILL” Program (p. 2):
    National Milk Producers is putting together a massive dairy cow kill subsidy program. Financial details are now available.

Dire California Water Prospects: Reservoirs & Snowpack Way Down (p. 3):
    The biggest story in the country could be California’s seriously depleted water reserves. Reservoirs are way below normal, the mountain snowpack is below normal depth, and the moisture content of that snowpack is 39% below normal.

Saputo Cheese USDA Zeroes Out Hauling Subsidies & Volume Premiums (p. 4):
    Saputo Cheese, effective February 1, 2009, slashed to zero its subsidies for farm milk hauling in Wisconsin. Volume premiums were eliminated, also.

Agri-Mark: Stiff Penalties for rbGH Milk (p. 4):
    Long time coming … Agri-Mark (the big co-op in New England) has finally announced severe penalties for members injecting their dairy cows with Posilac, as of August 1, 2009.

Big Dairy Groups: Terminate Producer-Handler Status (p. 4):
    USDA has announced that two major trade groups – National Milk Producers and the International Dairy Foods Assn. – have requested elimination of producer-handler status from federal milk orders. “Small” producer-handlers would be allowed current exemptions.

Chipotle Mexican Grills Feature Sour Cream from Grass-fed Herds (p. 4):
    Interesting! The upscale Mexican restaurant chain, Chipotle, is now serving sour cream made strictly from farms whose milk cows are grazed.

Boomerang Effect: Cheese Exports Return to U.S. (p. 4):
    Cheese that was exported from the U.S. in mid-2008 is now returning, unopened. Shifts in international currency values dictated that some companies (including Kraft Foods) bring back the product.

Yogurt Lobby: Kill “Grade A” Rules (p. 5):
    The Food and Drug Administration is taking public comments on a proposal by the National Yogurt Assn. that would seriously “dumb down” yogurt quality. NYA’s proposal calls for eliminating the “Grade A” sanitary ingredients for all dairy ingredients contained in yogurt sold in the U.S. That move would open up our yogurt containers to scurrilous, foreign imports. BAD IDEA!

Soy “Milk"-- Low Ingredient Costs = High Profits (p. 6):
    Writer Paris Reidhead tells us more than we want to know about soy “milk” – a growing competitor to dairy. Did you know that Dean Foods is the nation’s biggest seller of soy milk? Did you know that monks in China drink unfermented soy foods to suppress their libido?

Canadian Farm Milk Quota System Yields Rewards to Producers, Rural Dairy Communities (p. 8-9):
    Click here for our “Story of the Month.”

USDA vs. Darwin Rice: Strange Case Becomes Even Stranger (p. 10):
    Our November 2008 issue profiled the long battle between USDA and Iowa farmer Darwin Rice. Now things have turned even stranger. On 12/4/08, the Rices home and farm properties were sold by the county sheriff. USDA bought the Rice properties for $510,980. BUT just three days prior, USDA’s Farm Services Agency issued a secret, $510,980 loan to Darwin Rice. Darwin never asked for it, never signed papers, and certainly never got the money! Now, having taken his farm, USDA is issuing a dunning notice, demanding that Rice pay in full (with interest & penalties) the $510,980 loan! Even stranger: in early January, their home and adjoining 40 acres were transferred back to the Rices … without their knowledge. What’s next … an angry letter from the IRS demanding payment of a “gift tax” from the farm?

To Save Organic Dairy, Obama Must Change USDA Mindset (p. 12):
    Organic activist Mark Kastel details how organic dairy is at a critical moment, and USDA’s enforcement of pasture rules by factory “organic” dairies is causing smaller-sized, honest dairy farms to lose their milk markets.

Cheddar Bumps Up a Bit, But Dairy Commodity Prices Remain Low (p. 13):
    Pete Hardin analyzes dairy commodity markets, noting that global dairy protein marketers are now in a game of “chicken” – seeing which can cut prices more.

Dairy Cattle Replacement Prices (p. 14):
    It’s ugly.

U.S. NFDM Stocks Accumulating Rapidly (p. 14):
    Surplus volumes of nonfat dry milk are piling up rapidly at warehouses leased by USDA’s Commodity Credit Corporation. But users are being “shorted” on buttermilk powder supplies. What’s wrong???

U.S. Milk Supply Management? Or Honest Commodity Values (p. 15):
    Pete Hardin talks about how it may be time to rethink the “American way” of dairying (boom and bust cycles) and look hard at milk supply management. Or else, perhaps easier, restore honesty to dairy commodity prices and farm milk pricing/marketing.

(More) Towards a Better Dairy Industry (p. 16):
    Here are some more ideas to improve our dairy industry, including: *Change cheese pricing formulas to account, in part, the retail price of cheese paid by consumers. THAT’s the market … not the price-manipulators at the Chicago Mercantile Exchange.
    *Sell Surplus Milk Direct China. We have the surplus, the Chinese have tens of millions of hungry citizens being sent back to the countryside to forage for non-existent jobs. The main U.S. conduit for milk powder sales – Fonterra – is now a dirty word in China, following the melamine scandal.
    *USDA should buy hamburger. Instead of funding a dairy cow kill, USDA should simply commit itself to buying additional hamburger for nutrition and hunger programs. That way, the beef cattle interests should not get their shorts in a knot.

January 2009  Issue No. 354

Inside this months issue...

Chaos Ahead: CME Cheddar & Butter Prices Plunge to Support Levels (p. 1):
    Early in January 2009, cash prices for all three major dairy commodities plunged in trading at the Chicago Mercantile Exchange to levels at or below USDA’s Dairy Product Support Price program. That means U.S. dairy farmers are looking at milk prices in the sub-$10 to $12 per cwt. price level early at hand. Farm milk prices have gone from reasonable to ruinous in three months.

CFTC Fines DFA $12 Million for CME Price Manipulations (p. 1):
    On December 16, the Commodities Futures Trading Commission announced a $12 fine against Dairy Farmers of America and two former executives. The fine concluded a long-running investigation involving DFA’s manipulation of cash Cheddar prices at the Chicago Mercantile Exchange and limits violations of futures contracts by DFA. CFTC let DFA get away easy.

Dec. 2008 Class III Price $15.28 – Dec. Class IV $10.35 (p. 1):
    Prices for cheese milk (Class III) and butter-powder milk (Class IV) fell in December, according to USDA’s federal milk order program. Big declines to follow in January.

Sept.-Nov. Retail Cheese Sales Down, Prices Up (p. 2):
    How do U.S. supermarkets cope with declining cheese prices? They raise prices! Data for three months (Sept.-Nov. 2008) shows total cheese sales in supermarkets declined by 1.6%, but total dollar sales of cheese rose by 9.0%.

Obama Picks Iowa’s Vilsack as USDA Chief (p. 2):
    Tom Vilsack has been nominated as the next USDA secretary by President-elect Obama.

FSA Registering Dairy Producers for New MILC Program (p. 3):
    USDA’s farm milk price “safety net” – the Milk Income Loss Program – will start making payments in early 2009. Producers may register at their local Farm Services Agency office.

5 Co-ops Quit CWT; Big Loan Sought to Kill 400,000 Cows (p. 3):
    National Milk Producers’ “Cooperatives Working Together” (CWT) program is unraveling. In early January, five dairy co-ops quit the program, in disputes over too many export subsidies paid to DFA and Land O’Lakes. NMPF is now trying to secure a big loan ($200 to $300 million) to fund a big dairy cow kill program. Trouble is: if CWT tries to kill several hundred thousand cows, that would plug up the slaughter facilities and drop beef prices.

Dairy Producers Can Select Rapidly for the A2 Trait (p. 4):
    Paris Reidhead details the genetics behind selecting for the A2 milk in dairy cows.

Cheddar Price Volatility Increased after Trading to CME (p. 5):
    John Bunting examines historic ups and downs of cash Cheddar prices at CME. Since Cheddar trading moved to CME, the ups and downs of cheese price movements have become more pronounced!

Powder Export & NASS Price Data: July-October 2007 & 2008 (p. 5):
    For July-October 2008, milk powder exports were far higher than the same period in 2007. Why are dairy co-ops saying that powder exports are down?

Amish Farmer Faces Trial, Possible $5,000 Fine: Failed to Register Livestock Premises in Wis. (p. 6):
    A Wisconsin farmer faces trial in March, on charges he failed to register his farm with the state’s mandatory premises law. Wisconsin is the nation’s “test plot” for a national effort USDA wants to impose: mandatory registration of all farms with food-production creatures.

Fluid Milk Indexes Show Big Gains for Processors & Supermarkets (p. 7):
    Data collected by the Bureau of Labor Statistics shows monthly margins for fluid milk. The supermarkets and dairy processors are making out like bandits.

13-Week Fluid Milk Sales Ending 11-30-08 vs. Same Period for 2007:
    Fluid milk sales in the U.S. declined 2.0% in September-November 2008, compared to the same period one year ago. Prices declined 6.0%. A shift to gallon containers, from half-gallons, is evidenced.

Feature Stories of the Month (pp. 8-9):
    #1 All Vital Signs Bad for Dairy Farmers of America, #2: Will DFA’s Pending Financial Fiasco Hit Dairy Marketing Services?

2008: DFA’s Worst Year (So Far) (p. 8-9):
    From announcing $109 million in losses for 2007 to the $12 million CFTC fine in December (and all the lawsuits that followed) … 2008 will go down in DFA’s history as the worst to date.

Is NMPF at War with DFA over Dairy Programs (p. 9):
    Looks like NMPF – the dairy co-op lobby – is at war with USDA on a variety of fronts. Not a good sign.

Summary of Lawsuits vs. DFA (p. 10):
    John Bunting wades through some details of the numerous lawsuits filed against Dairy Farmers of America which involve alleged Cheddar price manipulation at the Chicago Mercantile Exchange.

$9.90/Cwt. Dairy Product Support Price Won’t Sustain Milk Producers (p. 11):
    Review the details behind the “Dairy Product Price Support Program” – may not be what we think.

Are Firms Selling Dairy Surplus to CCC “Double-Dipping on “Make-Allowances”? (p. 11):
    Dairy processors manufacturing cheese, butter and nonfat dry milk receive a “make-allowance” from various state/federal milk order programs. “Make-allowances” are credits meant to subsidize plants’ costs, profits and return on investment. But when dairy surplus is sold to the Commodity Credit Corporation at USDA, another make allowance is paid. Double-dipping?

USDA Memos: NAIS Premises ID Now Automatically Assigned in Many Programs (p. 12):
    Mary Zanoni details what she’s uncovered in her Freedom of Information lawsuit against USDA involving mandatory registration of farm premises for compliance with a variety of USDA livestock programs. USDA cancelled one memo, wrote another one the next day … and refuses to publicly release either memo!

U.S. Economic Picture Won’t Improve Soon (p. 12):
    John Bunting takes a hard look at the economy … which is not pretty.

Industry Panics: Cheddar Falls Below Support Price (p. 13):
    The dairy industry is taking a terrible beating, as dairy commodities have tumbled below the dairy support price levels in cash trading at the Chicago Mercantile Exchange.

Trial Set: Niagara Co-op Sues Dissident Ex-Members (p. 14):
    Absurd. A handful of former dairy farmer members are being sued by Niagara Co-op (NYS) for failing to accept terms of a one-sided merger of their co-op. The merger occurred in 2006. Trial starts in Buffalo on February 23 … Could be fireworks.

Choose Life (p. 15):
    Pete Hardin ruminates about dairy farming as an industry full of Life, whose dreams and history are being killed by inequitable milk pricing.

DOJ Should Take Over DFA as a “Criminal Organization” (p. 15):
    Just like the DOJ took over Jimmy Hoffa’s Teamster’s Union, the U.S. Department of Justice should take over Dairy Farmers of America as a “criminal organization” and clean up the mess. If DFA goes bust, Hardin details why a three-year, 1% loan program to help on cash flow of farmers, milk haulers, and others is seriously needed. DFA markets one-third of all the milk in the country.

Towards a Better Dairy Industry … (p. 16):
    We’re trying to spark a debate about a better, future dairy industry. Here are some of Pete Hardin’s suggestions ….

December 2008 Issue No. 353

Inside this months issue...
Despite Solid Consumer Sales, Cheddar Cheese & Butter Prices Tumble (p. 1):
   
Fourth-quarter 2008 sales trends for cheese and butter remain strong. But after Thanksgiving, cash prices for both Cheddar cheese and Grade AA butter nose-dived at the Chicago Mercantile Exchange. Milk powder prices – which lead the way down – do not reflect high levels of export sales/prices that continued in October.

MILC “Safety Net” Ready: Perhaps for January 2009 (p. 1):
    Plunging dairy commodity prices mean far lower farm milk prices. The revised MILC program – dairy farmers’ “safety net” – will probably kick in for January 2009 milk prices.

October Milk Powder Export Numbers Outrageous (p. 1):
    Just-released data on October 2008 exports details that out-of-country shipments of dairy protein powders continued high and prices received averaged about 50 cents per pound HIGHER than the monthly NASS price reported by USDA.

November 2008 Class III Price $15.51 – November Class IV $12.25 (p. 1):
    “Down, down, down into that burning ring of fire” for federal milk order manufacturing class prices.

Dean Foods’ Stock Nose-Dives; Gregg Engle$ Dumps Shares (p. 2):
    In late November, Dean Foods’ stock plunged to below $12/share. CEO Gregg Engle$ had to sell off 950,000 shares of company stock to cover other failing investments’ margin requirements.

CA’s Central Valley Project Estimates: Zero Water for Farmers in ’09 (p. 2):
    Egad. On November 20, officials of California’s massive Central Valley Project estimated that irrigation water deliveries to agriculture in 2009 will be Z-E-R-O. Thirty percent of the nation’s food is produced in the Central Valley.

Warmer Climate Reduces California’s Mountain Snowpack by Evaporation (p. 2):
    Warmer temperatures result in more evaporation of snow pack in California. Evaporating that stored snow means less water available for irrigation of crops.

Drought in Oceania Reducing Milk Flow (p. 2):
    Dry “Down Under” again this year. Milk output in New Zealand is constricting.

Christmas Holiday Balancing: “No Room at the Inn” for Some (p. 3):
    The Christmas holidays will likely see raw milk dumped in several regions of the country. Not enough manufacturing plant capacity to handle raw milk volumes while schools are out.

Abundance of Milk: WI Premiums in Danger (p. 3):
    Farm milk premiums paid to Wisconsin producers by dairy plants are in danger, due to bigger amounts of milk.

Feature Story: Confusion Reigns Over World of Milk Powders (p.4)

NMPF Lawsuit Halts USDA’s Private Sales of Surplus Powder (p. 5):

    Quick legal action by National Milk Producers Federation gained a Temporary Restraining Order issued against a USDA scheme to allow a private firm to auction off surplus nonfat milk powder.

FDA “Downer Cow” Rule Would Require: On-Farm Removal of Brains, Spinal Column (p. 5):
    Here’s a “no-brainer” – to protect the safety of the nation’s pet food supply, the Food and Drug Administration is dictating that, starting in April 2009, no “downer cows” may be removed from farms unless the brains and spinal cords have been removed.

“Cow Poop Tax” – Farm Bureau Fans Clean Air Flames (p. 6):
    Do not worry about hyped-up reports that the EPA will tax livestock exorbitant amounts due to greenhouse gas. This furor is a mis-reading of federal reports by the American Farm Bureau Federation.

NY Dairyman Nets. $.25 for 74-lb. Holstein Bull Calf (p. 6):
    Demand for bull calves is down across the country. We reprint a check issued to a NY dairy farmer for $.25 for his sale of a bull calf, and explain why prices are so low.

Greenhouse Gas Worries: Methane is THE Bad Guy (p. 7):
    Paris Reidhead explains some of chemistry behind why methane is THE greenhouse gas for dairy to worry about. Putting manure in anaerobic conditions is a mistaken practice.

Greenhouse Gas “Facts”: Dairy Needs Reasoned Study (p. 7):
    Pete Hardin opines that it’s how humans handle cow manure that creates the biggest environmental problems. Don’t rush out and buy a manure digester or methane flaring system!

A2 Milk: Intriguing Niche Market Will Challenge Dairy (p. 8-9):
    Writer Paris Reidhead explores the concerns behind “A2 milk” – a niche market down in Australia and New Zealand that’s just being introduced here in the U.S. A2 is the original genetic version of milk. Far more common “A1” milk is a variant. A1 milk is believed by some to be linked to a wide variety of human ailments.

Big Opposition to A2 Milk in New Zealand: Fonterra (p. 9):
    The biggest opponent of A2 milk “down under” is Fonterra, New Zealand’s quasi-monopoly for dairy exports. That’s usually the way things work.

History of the Dustin Sherwood Case (p. 10):
    John Bunting details the woes of Dustin Sherwood and family. This Missouri grain farmer is wasting away in prison, the result of John Deere Credit’s seizing Sherwood’s financial assets. Dustin has lost all his financial resources – and the bankruptcy trustee is even chasing after his wife’s wedding ring. THIS ARTICLE IS ON OUR WEB SITE.

Dustin Sherwood Legal Update: More Indictments (p. 11):
    On December 3, the U.S. Attorney in Kansas City hauled incarcerated Missouri grain farmer before another grand jury and came up with eight new federal indictments! This action occurred the same day that Ohio Congressman Dennis Kucinich wrote the U.S. Department of Justice, asking DOJ to hold off any further actions in the Sherwood case, until a wider review could occur. Sherwood pleaded “not guilty” and trial is set for January 7, 2009.

Invisible “For Sale” Signs Sprouting in Dairy (p. 11):
    Poor-performing and poorly-equitized firms are facing some tough edicts from their lenders. Read The Milkweed’s list of what’s quietly “for sale” in dairy.

Last Minute Rulemaking by Bush USDA Threatens Organic Family Farms (p. 12):
    Will Fantle of the Cornucopia Institute details that organization’s deep concerns about proposed, recent revisions by USDA on how dairy animals must be fed and housed.

Cheddar & Grade AA Butter Nose-Dive at CME (p. 13):
    Cheese and butter prices have sharply declined at the Chicago Mercantile Exchange, despite strong consumer sales up to this point. What’s going on???

Survival Strategies (p. 14):
    Here are a few basic guidelines for dairy farmers who are trying to intelligently navigate the squeeze between lower milk prices and production costs.

It’s the Money-Changers, not the Cows! (p. 15):
    Pete Hardin details how the band of “money-changers” positioned between what the consumer pays for dairy products at retail, and what farmers are paid for their milk, is a major source of dairy farmers’ financial woes. No-holds barred here!

Corn & Crude Oil: Volatile Prices Track Closely (p. 16):
    John Bunting presents nearly 20 years’ prices between corn prices and crude oil prices. Over time the correlation is amazing. Even in volatile 2008 … corn and crude oil prices tracked very, very closely.

J. Bos Giving Farmers a Bad Name (p. 16):
    Steve Holesinger, who lives near Stockton, Illinois, details some of the nasty tactics that Californian A. J. Bos is using against neighbors opposing the proposed mega-dairy. Bos has sent registered letters to opposing plaintiffs, detailing their personal assets and threatening to clean then out financially if Bos wins the legal matters. Bos has event threatened to take a 90-year old, wheelchair-bound woman’s 1986 Toyota Corolla! Bos = S.O.B. Spelled Backwards!

November 2008  Issue No. 352

Inside this months issue...

Dairy Prepares for Tough Times, from Farm to Consumer (p. 1):
    Constricted demand for dairy products – both at home and abroad – is creating some deep worries for dairy marketers. Lenders to firms holding dairy inventories are nervous, because of volatility in dairy commodity values.

Wal-Mart Dairy Case “rbGH-Free” in Early ’09 (p. 1):
    The nation’s largest food retailer – Wal-Mart – has informed dairy product suppliers that during the first quarter of 2009, Wal-Mart wants only “rbGH-Free” dairy products on its shelves. Wal-Mart is a trend-setter for food retailers. Wal-Mart’s move promises even tougher times for fortunes of “Posilac” (the trademark name of the drug).

October 2008 Class III Price $17.06 – October Class IV Price $13.62 (p. 1):
    Lower dairy commodity prices are translating into lower Class prices for raw milk through USDA’s federal order pricing system.

What’s Up for Dairy/Agriculture As Obama Heads to White House? (p. 2):
    Former Iowa governor Tom Vilsack looks like the front-runner in the race for USDA Secretary in the new Obama administration. Farm, food and nutrition issues will require the wisdom of Solomon.

Dean Foods Earnings Increase, But Stock Drops (p. 2):
    The nation’s largest fluid milk processor reported improved third-quarter earnings, but stock analysts don’t like what’s ahead. Dean’s stock has tumbled into the $15-16/share range.

FDA Issues Melamine-in-Food Warning – Somewhat Late (p. 3):
    The federal Food and Drug Administration has issued a warning for foods manufactured in China or using foreign-sourced dairy ingredients – all due to the Chinese melamine scandal. ‘bout time!

FDA Food “Safety”: 8 Inspectors to China (p. 3):
    Who’s kidding whom? FDA will send eight food safety inspectors to cover many thousands of food and food-ingredient processing plants in China. Inadequate.

Financial Crisis Forces DFA to Add More Debt (p. 3):
    A letter to DFA members dated October 14, 2008 details, among other things, how the co-op has been forced to add to debts, due to overnight money-markets no longer being available. The Milkweed estimates DFA’s overall debt now totals around $1.3 to $1.5 billion.

DFA Throws Buckey Jones from the Gravy Train (p. 3):
    Another DFA director has been found taking illegal payments. This time it’s Mississippi’s Buckey Jones, who is described as “management’s trained peckerwood” with an “IQ ten points south of Gomer Pyle’s.”

Double-Whammy (Demand & Credit) Hits Global Dairy Powder Industry (p. 4):
    Declining demand, in tandem with constricted global credit, is causing dairy protein powders to pile up in the U.S. Prices are falling, millions of tons of surplus nonfat dry milk are being sold to the government.

Opponents Win Preliminary Injunction Against Bos’ Illinois Mega-Dairy (p. 5):
    A judge in Jo Daviess County Court has ruled favorably on behalf of a local citizens’ group that sought a “Preliminary Injunction” to halt construction of Californian A. J. Bos’ mega-dairy project near Nora, Illinois. Judge Kevin J. Ward found that the mega-dairy constituted a present and future potential harm to the community.”

CWT Impact: Figures Don’t Lie, But Liars Figure (p. 5):
    Writer John Bunting details large chunks of baloney behind the “Cooperatives Working Together” program run by National Milk Producers Federation.

DMS Illegally Duns Amish Farmers for Trailer Loads of “Spoiled” Organic Milk (p. 6):
    Independent dairy producers, with contracts to sell organic farm milk to H. P. Hood, are being illegally dunned for financial penalties by the firm that actually handles milk hauling and payments – Dairy Marketing Services (DMS  – a DFA subsidiary). Rules of the Northeast federal milk order specify that the only financial penalties against producers may be assessed for antibiotic contamination.

Southwest FMMO “Mailbox Prices” Way Below Uniform Prices (p. 7) & DFA Members in TX/NM Receive Pay-Back Checks for Money “Lent” to Help Build Southwest Cheese (p. 7):
    SEE STORY OF THE MONTH!

Vindictive Prosecution? Feds Hound Darwin Rice, Iowa Farmer (p. 8-10):
    Foreclosure looms on December 4 for Iowa farmer Darwin Rice. The Milkweed exposes a long list of illegal actions by USDA – and Rice’s prosecution/conviction by the U.S. Department of Justice – as part of a conspiracy to hound this farmer, who, years ago, unearthed one of the biggest financial scandals at USDA. See the full story here.

Black Farmers Association Charged Phillip Fraas with “Attorney Misconduct and Legal Malpractice” in Pigford Case (p. 11):
    As association of black farmers, who won an important class action lawsuit against USDA, claims to have been then ripped off by lawyers who botched (and pocketed) the settlement. Phillip Fraas, a Washington, D.C. attorney/lobbyist, was specifically singled out in testimony before a Congressional Committee in 2004. Fraas is seeking an appointment for a high-level USDA legal post in the incoming Obama