June 2010 Issue No. 371
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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 administration.
Cheese Importer Lobbyist Wants USDA/OGC Job (p. 11):
Phillip Fraas, a Washington, D.C.
attorney/lobbyist with strong ties to both dairy importers (CIAA, Fonterra) and
big dairy companies (Dean Foods, Kraft) wants a top legal job at USDA.
Dairy Groups Promoting Unnecessary RFID Chips for Cattle
(p. 12):
Writer Mary Zanoni details how National Milk
Producers Federation and a host of other dairy groups (Idairy) are promoting a
totally unnecessary set of electronic computer chips for dairy animals, in order
to supposedly comply with dairy “Country of Origin Labeling: (COOL) proposals.
First Prosecution in Wisconsin: “Amish” Farmer Won’t
Register Premises (p. 12):
A farmer in Clark County, Wisconsin is the first
to be charged with a crime for failing to comply with Wisconsin’s mandatory
premises registration law. This program – the first step towards mandatory
computer chipping of all creatures – is becoming dangerously absurd.
Cheddar, Grade AA Butter and Milk Powder Prices All Decline
(p. 13):
Values for all major dairy commodities have
declined in trading at the Chicago Mercantile Exchange in the past month. Milk
Powders are in the sub-basement.
500 U.S. Dairy Heifers Assembled in Northeast for Shipment
to Russia (p. 14):
A loads of 500 U.S. dairy heifers are now at an
export quarantine facility near Watertown, New York – awaiting final testing
before they move to Canada to go on a ship headed for Russia. For a year, The
Milkweed has been reporting developments in this potential market for U.S. dairy
animals.
Discipline Supply to Demand (p. 15):
Pete Hardin argues that only with a modern,
effective effort to match U.S. farm milk supplies to demand (both domestic and
global) will the destructive up-and-down price cycles be buffered. The
“same-old, same-old” mistaken approaches to running our industry will not work.
USDA Still Sees Second Largest Corn Crop Ever (p. 16):
John Bunting analyzes the November 10 Crop
Production report issued by USDA. Despite lower acreage estimates for both corn
and soybeans, USDA foresees a 12-billion corn crop: this nation’s second
largest. Weather continues to bother harvest of slow-drying corn in numerous
areas of the country.
October 2008 Issue No. 351
DFA: $300 Million More Debt in 2008 (p. 1):
So far in 2008, Dairy Farmers of America has added another
$300 million in debt. That comes to roughly $30,000 per DFA member. Moody’s
Investors’ Service upgraded DFA’s financial credit rating by one notch, advising
lenders: Don’t worry, if needed, DFA can always take money out of dairy farmers’
milk checks.
Sept 2008 Class III Price $16.28 – September Class IV
$15.45. (p. 1):
Farm milk prices are heading down, following
commodity trends.
Injunction vs. USDA’s Revised “Make-Allowances” Denied (p.
2):
Legal efforts have failed, in an attempt by a
group of smaller dairy co-ops trying to block imposition of USDA’s higher
“make-allowances” for butter plants and cheese plants. Effective October 1,
2008, higher credits for those plants will drain about $.30/cwt. from all dairy
farmer income, through the federal milk order pricing system.
2008: Farm Milk Price Down: Consumer Dairy Costs Up (p. 2):
So far in 2008, dairy farmers’ milk prices have
dropped about $2.20/cwt. (Jan.-July). But at the same time, “commercial
disappearance” has climbed 3.24% (Jan.-July) in 2008, and U.S. consumers are
paying 4.04% more for dairy products (January-August data). Go figure!
China’s Diary Industry Slammed by Melamine Contamination
(p. 3):
Some 90,000 Chinese infants have been made sick by
continued contamination of dairy products by melamine. China is in an uproar.
Demand for (even honest) dairy products is way down.
FDA Bails Out China: High Melamine Levels for Foods (p. 3):
At a time when the U.S. is on its hands and knees
begging China for further investment capital … our Food and Drug Administration
sets (on October 3) an unduly high level of melamine contamination for foods:
2.5 parts per million.
Illegal Chinese Yogurt in U.S. (p. 3):
Since 2002, China has shipped nearly 100 metric tons of
yogurt into the U.S. All of that is illegal, because yogurt sold in the U.S.
requires that farms supplying the milk, milk trucks that haul it, and dairy
plants all be in full compliance with U.S. Grade A dairy sanitation codes. No
such facilities in China are Grade A. Once again, our FDA is asleep at the
switch.
Fonterra’s Chinese Partner: Worst Melamine Cheater (p. 3):
San Lu, a Chinese dairy processing firm that’s 43% owned by
New Zealand’s dairy giant, Fonterra, is China’s worst offender in the evolving
melamine contamination story.
Dean Foods Replacing DFA Milk in Certain Markets (p. 4):
Dean Foods is aggressively moving to replace milk
supplied by Dairy Farmers of America in several plants within the Dean Foods
system. Dean Foods is drawing away from DFA, which will hurt DFA in many ways.
More Questions Raised about Bovine TB Issues (p. 5):
The bovine tuberculosis problem raises more
questions. Why did California state ag officials need more than five months from
the time they first detected a potential TB dairy animal in a slaughterhouse
last December, before issuing quarantines? Another question: how can Wisconsin
state veterinarians test nearly 260 dairy animals without even a single
“positive reactor?” Normal veterinary procedures yield from two to five percent
“reactors” in the initial screening test for TB.
WI Bovine TB Surveillance Sites (p. 5):
In early July, Wisconsin animal health officials
put three premises in the state under TB surveillance, since those sites had
received animals from a TB-contaminated farm in California. Those three sites
are: American Breeders Service (DeForest, WI); Alta Genetics (Watertown, WI);
and Milk Source, LLC (Kaukauna, WI).
Milk Powder Prices Crash to $1/lb. at CME; Surplus Sold to
CCC (p. 5):
The market for nonfat milk powder has crashed hard
in recent weeks. California Dairies, Inc. – the nation’s largest processor of
nonfat dry milk – has started selling “surplus” to USDA at roughly $.80/lb.
Ouch.
Price-Cost Squeeze Threatens to Kill California’s Dairy
Dream (p. 6):
The wide spread between milk production costs and
milk prices is putting a big negative financial squeeze on California’s dairy
farms, which could prove fatal.
Neighbors’ Lawyer Skewers A. J. Bos’ Engineer in Trial (p.
6):
California dairy impresario A. J. Bos’ hopes to
build a mega-dairy in northwestern Illinois took a step backwards. In trial,
Bos’ engineer admitted that he’d built Bos’ dairy atop a streambed! Illinois law
prohibits construction of new livestock premises atop streambeds! Neighbors
opposing Bos’ mega-dairy hope this illegality, and other factors, deny the
project’s completion.
McCain Ag Advisor Has Deep Ties to New Zealand’s Fonterra,
Dean Foods (p. 7):
Bert Pena – a Washington, D.C. lawyer with a long
history of representing New Zealand’s dairy interests – is a top agricultural
advisor for John McCain’s presidential campaign. Fonterra has been dumping
hundreds of thousands of dollars into lobbying efforts in the U.S. With a
dangerous “Free Trade” deal proposed involving New Zealand, what’s ahead?
CWT Has $100+ Million in Bank; Where’d the $12,560,000
Disappear To? (p. 7):
The CWT program operated by National Milk
Producers Federation is a joke. The latest? CWT has over $100 million in the
bank. CWT officials managed to lose $12,560,000 in carry-over funds between
December 31, 2007 and January 1, 2008. Where’d the millions go???
Massive Chinese Dairy Exports Entering the U.S. (p. 8):
Huge quantities of dairy products, plus processed
food products and ingredients containing dairy proteins, are entering the U.S.
from China each month. Can the safety of these products and ingredients be
trusted, in light of the continuing melamine scandal???
Feature Story: Relooking Gregg Engle$’ 2007 Salary/Compensation (p. 9)
Farmer Mac Bailout: CEO Fired, Agricultural Credit May Be
Impaired (p. 9):
Farmer Mac is an agricultural lender and guarantor
of farm loans written by other banks. Farmer Mac needed a bailout, because so
many of its financial resources have gone into failed investments. Farmer Mac’s
CEO, Henry Edelman, was fired.
Farm Energy Needs Will Rewrite Crop Practices (p. 10):
Our “bio-energy guy” Paris Reidhead lists answers
to commonly asked questions about biodiesel.
Milk Producers Council Questions the Integrity of NASS
Price Reports (p. 11):
The Milk Producers Council – a dairy farmers’
trades association in California – has asked USDA to review price surveys for
nonfat dry milk, because of tremendous differences in export prices (per pound),
compared to prices on which dairy farmers’ prices are calculated. Where’s the
money going to???
The Cornucopia Institute Report (p. 12):
Will Fantle details a set of new complaints by his
organization against large, CAFO-style “organic” dairy farms in western states.
Again and again, large factory-style dairies produce organic milk without
apparently completely following organic farming practices.
Milk Powder Prices Fall Way Down; Cheese, Butter Sectors
Nervous (p. 13):
The huge decline in milk powder prices will hit
hard, and the cheese and butter sectors are worried about their own commodity
price declines.
Elanco Finalizes Posilac Purchase From Monsanto Oct. 1 (p.
14):
Monsanto shed Posilac – recombinant bovine growth
hormone – into the naïve hands of Elanco (the animal products subsidiary of Eli
Lilly & Co.).
Financial Crisis: Will Need Years to Unravel (p. 15):
Editor Pete Hardin details his insights into the
nation’s financial crisis, including “what the big boys don’t want you to know.”
Our financial mess is more complex, and will last far longer, than anyone hopes
to admit.
U.S. Economy Deeply Troubled (p. 1):
The news is just going to get worse. More than half of all
the adjustable rate home mortgages written in the past three-four years come due
for renegotiation this fall.
August 2008 Class III Price $17.32 – August Class IV $16.34
(p. 1):
USDA’s class prices for the federal milk order
program declined in August.
Monsanto Finds a Sucker (Elanco) to Buy Posilac (p. 2):
A miracle! In mid-August, Monsanto and Elanco
announced the latter would pay $300 million for Posilac—Monsanto’s controversial
biotech cow hormone drug. Sale is to take place in 2008’s fourth quarter.
Feature Story #1: Dean Foods’ CEO Gregg
Engle$: $66,080,000 Compensation in 2007 (p. 2):
For years, The Milkweed has painted Dean Foods CEO
Gregg Engle$ as an Ivy-league, yuppie MBA obsessed with draining corporate
coffers to line his pockets. Now comes the proof! Read all about it
here.
AFACT (Posi-Lackies) Begging for $$$ (p. 2):
A “grass-roots” dairy farmers group that appeared
in 2007 to fight for “technology” (i.e., Posilac) seems to have come upon tough
times, now that Monsanto is retrenching “investments” in championing the drug.
Lawsuit Delays Sept. 1 Imposition of Higher FMMO “Make
Allowances” (p. 2):
Some dairy producer groups have brought legal
action against USDA’s scheduled imposition of higher “make allowances” in the
federal milk order system. Those higher fees to cheese and butter-powder plants
were scheduled to go into effect on Sept. 1.
NZ Milk Current Output is Big Question, as Global Dairy
Prices Weaken (p. 3):
How will New Zealand milk production bounce back
from last year’s big, drought-induced decline? Global dairy commodity prices are
weakening, in anticipation of more milk from New Zealand.
Dean Foods Moving Back to Direct Procurement of Farm Milk
(p. 3):
In multiple markets around the country, Dean Foods
– the nation’s largest fluid milk processor – is going back into the country to
procure its own milk supplies. In 2003, Dean Foods dumped its 2500+ producers
into the clutches of DFA.
Foot-and-Mouth Disease “Regionalization” Threatens U.S.
Economy (p. 4):
USDA wants to “regionalize” Argentina – dividing
that nation into north and south regions, based on areas infested by, and free
from, Foot-and-Mouth Disease. In a dangerous precedent, USDA is “regionalizing”
some U.S. states into “Free” and “infected” areas, relative to bovine
Tuberculosis. Whether it's other nations, or U.S. states, the notion that
government bureaucrats can draw arbitrary lines dividing to establish public
safety from these dangerous livestock diseases is questionable. Beware!
Dairy States Fear Spread of California’s Bovine TB Outbreak
(p. 5):
The outbreak of bovine Tuberculosis in California
was first detected in lesions of slaughtered dairy animals in December 2007. It
took CDFA officials nearly six months to announce the problem – during which
hundreds of animals moved from TB-infected premises to sites in California and
other states.
Three WI Herds Under TB Surveillance: No Reactors Found (p.
5):
State agriculture officials in Wisconsin have
three dairy herds under TB surveillance, due to those sites receiving animals
from TB-infected California herds. Those “imports’ have been slaughtered.
Testing on most animals at the Wisconsin sites has yielded no positive reactors.
Rumor: China to Enter U.S. Corn Market Big-Time (p. 6):
Watch out for China to jump into the U.S. corn
market, this fall or winter, and cash-in a lot of its U.S. dollar holdings for
grain. That’s the rumor we’re reporting … if China does start buying corn
big-time, look for skyrocketing prices for this critical commodity.
Cornell Extension’s Nutrition Advice “Bass-ackwards” (p.
7):
Writer John Bunting just couldn’t take it anymore:
seeing that dumb highway billboard near Delhi, New York, telling kids to “Drink
1% OR Non-Fat Milk.” John points out how per capita calories from dairy have
declined since 1970, and calories from corn-based sweeteners have increased
472%. Where’s the problem??? Not Milk!!!
Feeding the Iron Horse (Growing Our Own Biodiesel) (p.
8-10):
Writer Paris Reidhead details a wide range of
technical details about growing canola for dual use as both a diesel fuel
substitute and also a high-protein meal for livestock and poultry. This article
is a landmark piece of agricultural journalism.
Update on Dustin Sherwood Bankruptcy Case (p. 11):
Last month, The Milkweed reported on Missouri
farmer Dustin Sherwood, who’d had his farm stolen (legally, of course) by John
Deere Credit and a wolfpack of Kansas City lawyers. Things have only gotten
worse for Dustin – the 36-year old farmer (who started this mess with $10
million in assets and $3 million in debts) – has been transferred to the federal
penitentiary at Leavenworth, Kansas – due to medical problems. The bankruptcy
trustee, who’s garnering 11% of all Sherwood’s assets for her “services,” has
appointed her husband as the second-leading attorney in the bankruptcy
proceeding!
Bos’ Lawyer Threatens Illinois Opponents of Mega-Dairy (p
11):
Lawyers for A. J. Bos – the California dairy
empresario who wants to build what could become a pair of dairies totaling
20,000+ cows – have threatened members of a local citizens’ group fighting
against Bos’ plans to “Californicate” their community’s air and water quality.
USDA (Reluctantly) Releases New Info about National Animal
ID System (p. 12):
Activist Mary Zanoni reports the latest
information surrounding USDA attempts to impose national program for installing
computer chips in virtually all food animals. Strong stuff!
Cheddar Prices Rising; Butter Flat; NFDM Prices Declining
(p. 13):
That’s our analysis of the U.S. dairy commodity
scene right now. Plenty of speculation and uncertainty in the dairy commodity
picture.
Foster Farms (CA) To Drop about 18 Producers on Nov. 1 (p.
14):
A private California dairy processor, Foster
Farms, has notified its dozen and a half producers that the company will drop
those raw milk suppliers on November 1.
Bush Antitrust Legacy: 1 Case Filed in Eight Years (p. 15):
Pete Hardin lays bare the competitive realities
for the dairy industry – from the farm to the consumer – for years of antitrust
neglect by the Bush administration. Example: Dean Foods now has 90% of all fluid
milk distributed in the state of Michigan. (That’s how Gregg Engle$ -- Dean
Foods’ CEO – was able to garner $66 million in salary and compensation last
year!)
Feature Story #2: USDA Sept. Crop Report
Unduly Optimistic for Corn (p. 16):
Despite severe weather difficulties during the planting and
growing seasons for many farmers in grain country, the “Crop Production” report
issued by USDA on September 12 maintained overt, indeed, undue optimism about
2008’s corn crop. Read Pete Hardin’s report here.
Monsanto Will Try to Sell “Posilac” – Buyer Unknown (p. 1):
In early August, Monsanto announced plans to sell off its
controversial biotech cow growth hormone – Posilac. No buyer named. The company
has too many successful operations to continue carrying this sick dog.
Bravo! Ag Issues Sack Global Trade Negotiations (p.2):
World Trade Organization talks collapsed, as India
and China refused to open up their doors to agricultural imports. U.S. dairy
farmers have nothing to gain from this anti-democratic foolishness.
July 2008 Class III Price $18.24 – July Class IV $16.60 (p.
2):
Milk prices are headed down, following trends for
dairy commodity trading at CME.
Even More NFDM Reporting Questions Surface (p. 3):
Writer John Bunting analyzes how USDA is failing
to enforce the rules for reporting nonfat dry milk prices … and that’s fine with
the milk powder co-ops, whose managers have refused to comply with requests for
revised pricing data.
RbGH “Greenwashing” Study Claims Posilac’s Environmental
Benefits? (p. 4):
Cornell University has recently issued a study
promoting the environmental benefits of Monsanto’s biotech cow hormone, Posilac.
This study brings the issue full circle, as Prof. Dale Baumann – Cornell dairy
scientist – was this study’s lead author. Bauman, who’s become a rich man thanks
to Monsanto money, wrote the first research involving dairy cows and the biotech
hormone, way back in the early 1980s.
23 or 24 years Fighting Posilac (p. 4):
Editor/publisher Pete Hardin ruminates on the key
issues of activists’ battling recombinant bovine growth hormone (rbGH, sold by
Monsanto as Posilac). Monsanto’s announcement of intentions to sell the biotech
cow hormone drug is viewed as the beginning of the end.
Farmers Lose Income with Depooling and Negative PPDs (p.
5):
Why is that big hole in farmers’ milk checks
called “Negative PPDs?” John Bunting shows how fast-rising Cheddar prices lead
to theft of farmers’ milk money.
Class III & IV Make-Allowance Increase Reduces ALL FMMO
Milk Costs to Processors (P. 5):
USDA’s recent decision to take more money out of
farmers’ values for cheese milk (Class III) and butter-powder milk (Class IV)
leads to reduced value for ALL class of milk, including Class I (fluid) and
Class II (cultured products and ice cream). Why should fluid milk processors’
costs be reduced because cheese plant operating costs need further subsidy?
Maryland/Virginia Co-op Financial Signs Become More Sour
(p. 6):
Members of the Maryland/Virginia Milk Co-op should
be worried. Incompetent management and directors have created a financial mess,
and now the co-op has to tighten up its finances. Steps include boosting equity
requirements, delaying pay-out of equities (including estates!), and creating an
$.80/cwt. premium for large-volume producers in the Southeast to keep from
losing more producers.
Maryland/Virginia Co-op Staggering Under Long-Term Debt (p.
6):
In the past nine years, Maryland/Virginia’s long-term debt
has ballooned from $8.5 million to $43 million! The co-op has basically done a
lot of growth on borrowed money, and time’s due to pay the piper.
Organic Valley Finally Quits Buying Milk from Texas Factory
Farm (p. 6):
Under intense pressure, top management of Organic
Valley Co-op has at long last quit buying raw milk from the mega-dairy in Texas,
Natural Pastures. Why did Organic Valley ever get into this mess in the first
place?
Grass Roots Bio-Diesel Production Works (p. 7):
Paris Reidhead gives an insider’s look at how a
small, start-up bio-diesel co-op in upstate New York is put together to make
fuel-substitute for diesel-powered tractors and trucks.
The Milkweed Tests Organic Milk for CLAs & Omega-3s
(p. 8):
This publication collected ten samples of organic
whole milk sold at retail and tested them for content of Conjugated Linoleic
Acids (CLAs) and Omega-3s. These substances are highly regarded for their health
benefits, and correlate highest in milk from cows fed grass diets. The “winner”
was Cedar Summit Farm (New Prague, MN) and the “loser” was Aurora Organic Dairy
from Colorado (a mega-dairy). Interesting!
CLAs & Omega-3s: Pasture Health Benefits Transferred to
People (p. 9):
Paris Reidhead details how diets of fresh grass
benefit food animals (beef and dairy, poultry) with beneficial compounds in
those creatures’ foods available for human consumption.
The Dustin Sherwood Case: Bankruptcy Abuse of Process (p.
10):
How can a Missouri grain farmer with $10 million
in assets (vs. $3 million debts) end up broke and in prison as a “menace to
society”? That’s what’s happened to Dustin Sherwood. Financial advisor Sidney
Perceful details this incredible, shocking story.
Protein Scarcity: Serious Future Meat Shortages Ahead! (p.
11):
Across the board – beef, pork, poultry and farmed
fish – growers are cutting back their starts of young meat “critters.” Grain
prices are a major problem. The U.S. is heading for severe shortages of meat and
poultry.
USDA Moves on Enforcement Action Against Rogue Organic
Cattle Supplier (p. 12):
Cornucopia Institute fellow Will Fantle details
USDA’s actions against Promiseland Livestock – a heifer-raising operation in two
states that’s run afoul of rules for organics. Promiseland is a major supplier
of “organic” dairy heifers to mega-dairies like those owned by Horizon Organics
and Aurora Organic Dairy.
Monsanto Uses “Spy Satellites” to Find GM Seed “Cheaters”
(p. 14):
Pete Hardin details how Monsanto uses “spy
satellites” to take pictures of farmers’ crops. Monsanto has altered biotech
plants so that they look “different” (than conventional crops) to overhead spy
satellites. Welcome to Monsanto, Modern Food’s “Big Brother/”
Feature Story: New Farm Law Needs Big
Overhaul (p. 15):
Pete Hardin reveals major flaws in the 2008 Farm Bill
recently signed into law in Washington, D.C., and then discusses what types of
food/energy policies and practices this nation should be encouraging. Our food
system is failing!!! Read Pete’s commentary here.
Predicted Cool Weather Could Harm Slow-Maturing 2008 Corn
Crop (p. 16):
Our analysis: the delayed conditions of the 2008
corn crop will lead to far less corn output than USDA’s August 12 “Crop
Production” report estimated. The U.S. corn crop, in many areas, is two to three
weeks behind normal schedule, with cool weather predicted for the rest of the
summer and early fall.
U.S. Dep’t of Justice Launches Antitrust Probe of Northeast
Dairy Industry (p. 2):
Why? The U.S. Department of Justice has started an
antitrust investigation of the Northeast dairy industry. It is believed that DOJ
is investigating elimination of competition in the procurement and sale of raw
milk. One entity – Dairy Marketing Services – controls sales of over 80% of all
farm milk produced in the region.
June 2008 Class III Price $20.25 – June Class IV $15.92 (p.
2):
Cheese milk prices jumped $2.07 per cwt. for June,
compared to May, in USDA’s federal milk order system.
No NASS Milk Powder Revisions: Co-ops Ignore Request (p.
3):
USDA’s National Agricultural Statistics Service (NASS)
is unable to conduct a mandated revision of weekly milk powder prices dating
back several years. Why? Because the dairy co-ops that report weekly nonfat dry
milk sales to NASS refused to provide revised data!
Deteriorated Milk-Feed Price Rations: USDA Ignores the Law
(p. 4):
Section 608 (c) of the federal law establishing
USDA’s milk order program specifies that the gov’t must adjust farm milk prices
based upon regional dairy costs of production – including grain prices. But in
this time of fast-rising grain costs for dairy farmers, USDA continues to fail
to do its job.
The Coming Corn War: Who’s Going to Pay the Price? (p. 4):
Writer Karen Kinstetter lays out what she calls
the coming “Corn War” that will pit buyers competing for scarce supplies come
harvest time this fall.
Make Allowance Decision (p. 5):
USDA has issued a vaguely-titled, “Tentative
partial final decision” on the long-running “make-allowance” hearing. This
matter credits dairy manufacturing plants more money out of funds that would
otherwise go to dairy farmers. Costs? On Class III (cheese) milk, the cost is
$.34 - .35 per cwt.
Senate Judiciary Committee Asked to Probe DFA (p. 5):
More than two dozen farm, consumer and public
interest groups have formally written the Senate Judiciary Committee to
investigate Dairy Farmers of America (DFA) – the nation’s largest milk
producers’ cooperative. The co-op has repeatedly violated competition in dairy.
Unique status for agricultural co-ops under the “Capper-Volstead Act” has
created a “no-man’s land” of seeming invulnerability to the law – especially
when politics are infused.
Feature Story -- Fonterra: Dominate U.S.
Dairy Industry with NZ “Free-Trade” Deal (p. 6):
Dairy farmers watch out! The political wheels are
being greased to cook up a “Free Trade” deal between the U.S. and New Zealand.
Read this “story of the month” on-line here.
Cedar Summit Farm: Unique … from Calves to Cream (p. 7-9):
We profile one of the most unique dairy operations
it the country: Cedar Summit Farm of New Prague, Minnesota. This family business
is an organic dairy farm where the cows’ diet is 100% forages. Their milk is
processed at a small creamery at the farm and then distributed throughout the
Twin Cities.
“Doing What Comes Naturally” Dramatically Cuts Calf Losses
(p. 10):
At Cedar Summit Farm, the calves stay with their
mothers for the first six to eight weeks after being born. Letting calves nurse
their mothers has dramatically reduced calf mortality and boosted overall
health.
Dean Foods’ Stock Drops to All-Time Low (p. 11):
The nation’s largest fluid milk processor is
struggling financially. In early July, Dean Foods’ common stock had fallen to
just below $18 per share. Lower fluid milk sales, higher costs for energy and
plastic resin are commonly cited examples for Dean Foods’ poor financial
performance. But payments of interest and principle on the company’s debt are
crippling.
Flooding in Midwest Disrupts Grain Transportation (p. 12):
Karen Kinstetter details how the June 2008
flooding in the Midwest damaged the transportation infrastructure (barge traffic
on the Mississippi, railroads, and highways) is adding delays to movement of
grain to markets.
NASS Milk Powder Price Lowest in the World (p. 12):
Writer John Bunting details how the NASS prices
for nonfat dry milk are the lowest in the world. Why???
House Ag Appropriations Chair DeLauro: Mandatory NAIS for
School Lunch Program Meat (p. 13):
Mary Louis Zanoni details how the chair of a key
house committee wants to mandate NAIS (premises identity and individual animal
ID chips) for any sources of meat (beef, pork and poultry) consumed in the
School Lunch Program.
Organic Valley’s Integrity at Stake: Caught Buying Milk
from TX Mega-Dairy (p. 14):
Organic Valley – the founding firm of the organic
dairy movement – has been caught buying milk from a non-member Texas mega-dairy.
Big controversy. Meanwhile, Organic Valley is jerking around producers in
Louisiana – trying to drop their milk prices by $7.50/cwt. to $28 per cwt.
NZ “Free-Trade” Deal Would Let Fox Inside Henhouse (p. 15):
Pete Hardin rails against the dangers of a
“Free-Trade” deal between the U.S. and New Zealand. The political wheels are
being greased for this one.
Modern Agricultural Wisdom: Don’t Sign Nuthin’ (p. 15):
Beware of contracts, in these times. Pete Hardin
details how contracts for Class III “futures,” grain contracts, and natural gas
leases can all blow up in the signees’ faces.
Big Story in Dairy Commodities: What’s After Labor Day (p.
16):
The dairy commodity picture will start its “second
half” some time after Labor Day – when marketers realize that high grain prices
and rough forage conditions mean far less milk production this fall … and
beyond! Don’t take milk and dairy commodities for granted!
Spring Weather Threatens Severe Grain Shortages Later in
’08 (p. 1):
Millions of acres of U.S. farmland in the Midwest have been
drowned by torrents of rainfall in 2008. Easily, we’ll see $8 per bushel corn
prices. The U.S. food production system has evolved to rely on ample, cheap
corn.
DFA Faces Federal Indictment for Cheddar Price
Manipulations (p. 2):
On May 19, The Wall Street Journal reported that the U.S.
Department of Justice was investigation Dairy Farmers of America for alleged
Cheddar price manipulation at the Chicago Mercantile Exchange. That paper
implied that DFA will soon be indicted on such charges. We analyze …
May 2008 Class III Price $18.18 – May Class IV $15.26 (p.
2):
We report the May 2008 USDA class prices for cheese milk and
butter-powder milk.
Key Dairy Provisions of the 2008 Farm Bill (p. 3):
Finally, legislators in Washington, D.C. have created a 2007
farm law! It’s mostly the “same-old, same-old.” Details are discussed. Most
interesting is a “Modified MILC Program” which will be further clarified next
month.
NMPF Announces Another Round of Cow Killings (p. 3):
Here they go again! The National Milk Producers Federation
has announced details of yet-another round of killing U.S. dairy cows. This time
NMPF’s rationale is to relieve dairy farmers of high costs. NMPF will kill bred
heifers too – offering $1050 per head. That’s about half of prevailing market
prices.
Fonterra Claims $1.2 Billion Profits in U.S. Trading (p.
3):
At the expense of U.S. dairy farmers, Fonterra (New Zealand’s
quasi-dairy trading monopoly) has announced profits from U.S. trading ventures
of $1.2 billion last year. Told you U.S. co-ops were giving away milk powder to
Fonterra!
Feature Stories -- DFA’s Mounting
Losses, $1 Million Payout & Antitrust Investigation
Read this month’s reports
of the latest news on how the nation’s largest dairy co-op continues to screw up
in every way possible.
No Honest Market: One Trade at CME in 10 Years (p. 5):
Writer John Bunting shows how there’s was only ONE trade of
nonfat dry milk for 10 years at the Chicago Mercantile Exchange. That’s no
“market,” but rather a price-setting mechanism for the milk powder price-fixers.
Farm Milk Prices: European Union & Oceania (p. 5):
We discuss prices received by dairy farmers in western Europe
and Oceania. U.S. milk prices, right now, are among the lowest among major,
modern dairy-producing nations.
Shocker: Illinois Ag Department Oks Bos’ Mega-Dairy (p. 6):
On May 30, the Illinois Department of Agriculture approved
plans for the first “mega-dairy” proposed by Californian A. J. Bos at a site
near the tiny community of Nora in Jo Daviess County. Locals are fighting back
with lawsuits against the proposal.
Bos’ California-to-Nevada Raw Milk Sales Irksome (p. 6):
Californian A. J. Bos has ticked off dairy producers on both
sides of the California/Nevada border with a scheme moving farm milk to fluid
processors in Nevada. Nevada dairy producers whose milk has been displaced from
local plants are forced to send their milk to California for processing into
lower-priced butter and milk powder.
2007: CME Class III Futures Averaged $4.00/cwt. Below
Settlement Price (p. 7):
Any dairy farmers want to lost $4.00/cwt. (plus commissions)?
Just sign up for CME Class III futures contracts. In 2007, the average
difference between CME Class III (cheese milk) futures contracts and actual
monthly settlement prices was $4.00 per cwt. What a farce!
Clyde Rutherford’s “Dairy of ‘Di-STINK-tion’” (p. 8):
The cows are gone from “Old Clyde” Rutherford’s home farm. So
this “president for life” of Dairylea Co-op (and DFA director) has some cows at
a dairy farm where the manure handling problems create a big stink. Read about
the Northeast’s most prestigious dairy leader’s slop-hole farm.
2004 CME Cheddar Price Manipulations Detailed (p. 9):
Here’s where the bear went through the buckwheat! 2004 was a
wild, roller-coaster ride for Cheddar pricing at the Chicago Mercantile
Exchange. That’s the year, according to The Wall Street Journal, that DFA faces
indictments for alleged price manipulations of Cheddar at CME. Writers John
Bunting and Pete Hardin detail that year’s cash block Cheddar’s up-and-down
cycles … with behind-the-scenes motives included.
Farm Bill Fiasco: Import Assessment “Fix” Satisfies No One
(p. 10):
After many years, National Milk Producers Federation
successfully lobbied for a jiggering the rules of the rules on the mandatory,
15-cent per cwt. assessment levied against dairy farmers’ milk incomes. But the
“fix” stinks. That “fix” entails:
* Extending the U.S. dairy promotion assessment to producers
in Hawaii, Alaska and Puerto Rico (all deficit milk production areas). The
promotion assessment is also charged to importers … but at the rate of 7.5-cents
per cwt. Importers may also collect a refund on their assessments! WHAT A DEAL:
* Half the assessment, refundable. Many U.S. dairy farmers
would gladly accept that deal.
Tight Times Revive Good Management Tips for Dairymen (p.
11):
Writer Paris Reidhead reviews some basic good
management for dairy farmers who are looking to tighten up their farming
operations, in light of higher costs for grain and forage.
Organic Dairy Update (p. 12):
Writer Will Fantle of the Cornucopia Institute updates
readers on legal matters involving challenges to the organic status of Aurora
Organic Dairy of Colorado.
Details of the Wiese’s Lawsuit (p. 12):
Former dairy farmers Walter and Carla Wiese of Athens,
Wisconsin have struck back, legally, against the Community Bank of Central
Wisconsin – the bank that foreclosed on their farm. The Wieses filed a detailed
federal lawsuit naming the Bank, numerous employees, the Bank’s board of
directors, and USDA’s Farm Services Agency.
Weather Poses Big Headaches for Many Agriculturists (p.
13):
Organic farmer Karen Kinstetter writes about how tough
weather is hammering many kinds of farmers across the Midwest and Plains.
Karen’s report is full of key data about the U.S. and global food situations.
Dairy Cattle Replacement Prices at Auction Across the USA
(p. 14):
Dairy livestock prices are up in many parts of the country.
HOWEVER:
Widespread bad weather in the Midwest may force distress sale of livestock, due
to shortages of grain and forage, in areas that have been smashed.
Vicious Spiral: Oil Imports + Federal Deficit = Weaker U.S.
Dollar (p. 14):
Pete Hardin details the cycle of a weak U.S. dollar (due to
federal deficits) and higher energy prices – especially oil. Until the U.S.
currency is strengthened by long-term commitments, our costs of energy will keep
climbing as OPEC nations raise oil prices to keep their net, dollar-based
incomes stable.
DOJ Should Take Over DFA as a “Corrupt Organization” (p.
15):
In Pete Hardin’s opinion piece, he lays out why compelling
national interests would be best served by the U.S. Department of Justice’s
taking over Dairy Farmers of America as a “corrupt organization.” That move
would be parallel to DOJ’s seizure of the Teamsters Union in the 1960s. No
interests are served by “business as usual” at DFA that would lead to a
financial collapse.
Cheddar peaks, Then Tumbles at CME: Uncertainty Ahead (p.
16):
Cheddar blocks continued their up-and-down price
cycles at the Chicago Mercantile Exchange. But massive damage to this nation’s
grains and forages mean that future dairy prices are unpredictable, but likely
much higher.
Turning Over Some Pieces of the Dairy Puzzle (p. 1):
The past month has allowed editor Pete Hardin to
see more clearly what’s ahead for dairy, including: constricting U.S. milk
supplies, higher grain prices and energy prices, global scarcity and higher
prices for dairy products, and reduced U.S. consumer demand.
USDA Secretary Claims Powers to Suspend Ethanol Mandates
(p. 1):
In seemingly unnoticed comments buried deep in an
article in the Chicago Tribune on April 18, USDA Secretary Ed Schafer claimed
that he has authority to reduce mandates for converting corn to ethanol, if U.S.
corn production is limited.
April 2008 Class III Price $16.76 – April Class IV $14.65
(p. 1):
Federal milk order class prices for cheese and butter-powder
milk drop lower.
Worst Drought of Century Drops NZ Milk output by ?.?% (p.
2):
As the NZ milk production season concludes, debate ensues as
to just how much less milk that island nation really made. Some reports say NZ
is finishing at –6.5%, others say NZ lost only a couple percentage points.
Regardless, NZ’s dairy export near-monopoly, Fonterra, is scrambling to secure
global dairy product inventories. That’s because it’ll be tough for NZ dairy
cows to bounce back from the rigors of this year’s drought.
Global Dairy Trade: Fonterra Milk Powder Auction (p. 2):
Starting later this year, Fonterra (NZ’s dairy export giant)
will conduct a multi-tiered auction for poor nations to buy limited amounts of
available dairy proteins.
Extremely Wet Spring Weather Stalls Upper Midwest
Fieldwork; USDA: May 10 Corn Planting 26 Percentage Points Behind Normal (p. 3):
Spring field work is way behind in the U.S. – particularly in
states like Indiana, Iowa, and Illinois. Corn planting is 26 percentage points
behind the five-year average. The 2008 U.S. corn crop is in trouble already.
USDA Playing Games with ’08 Corn Crop Estimates (p. 3):
USDA recently announced that this year’s corn crop could be off 7%, compared to
last year, due to bad weather at planting time. USDA is trying to buffer the bad
new of coming crop problems and higher food costs: farmers’ planting intentions
for corn were down 8% before they ever hooked up the corn planters. Bad weather
will cause a double-digit decline in U.S. corn output for 2008.
Why Can’t U.S. Dairy Farmers Get World Market Prices? (p.
4):
John Bunting estimates that from July 2007 through March
2008, U.S. dairy farmers whose milk prices are set by the federal milk order
program lost an average of $3.51 per cwt. of milk because our dairy commodity
prices lag far behind global prices for butter, Cheddar cheese and nonfat dry
milk.
Feature Story: DFA Scandal: Hanman Secretly
Paid Ex-Board Chairman $1 Million (p. 5)
Read all about the latest mega-scandal to rock
Dairy Farmers of America here.
Monsanto’s Tentacles Threaten Derry Brownfield’s Radio
Career (p.6):
One of the nation’s leading farm broadcasters and agriculture commentators –
Derry Brownfield – got his you-know-what in the wringer with an April 18
broadcast blasting Monsanto. Next day, the Learfield Network (which Derry
co-founded) announced his broadcasts would be terminated. Read about this
situation and other background on Monsanto’s long-term intimidation of media
critics.
One Cup at a Time: Sugar River Dairy’s Excellent Yogurt (p.
7):
Ron and Chris Paris have been making yogurt in their small
dairy plant in Green County, Wisconsin for six years. The Milkweed profiles
their yogurt production and marketing. Interest in small-scale dairy processing
is growing rapidly.
Bio-Fools Rule: Raising Corn for Ethanol Fuel is a Very
Dumb Idea (p. 8-9):
The headline clearly describes writer Paris Reidhead’s
thoughts on the corn-for-ethanol issue. Paris reaches back into his encyclopedia
of information to explain why, for many reasons, corn ethanol is a lose-lose
deal for society. He also has a well-based question-and-answer section.
USDA to Promote NAIS with Promotion Check-off Funds (p.
10):
Writer Mary Zanoni details how the business plan of USDA’s
Agricultural Marketing Service plans to use agricultural commodity promotion
funds (beef, dairy and pork) to promote the mandatory National Animal
Identification System.
CME Changes Will Reduce Trading Information (p. 10):
In mid-May, the Chicago Mercantile will remove key
information from daily trading activities – including the number of trades!
Another step backwards for transparency in dairy pricing!
Global Pork Industry Collapsing??? (p. 12):
Karen Kinstetter takes a close look at trends in the global
pork industry. High grain prices and a weak U.S. dollar mean that foreign
producers are getting slammed by both high costs and undercutting of their
prices by U.S. product. But U.S. hog producers are going backwards financially,
too.
FMMO Class I Sales Down 2.54 Percent in 2008’s First
Quarter (p. 13):
January-March 2008 saw overall fluid milk sales decline by
2.54% in the federal milk order, when adjusted on a daily-average basis. That
adjustment is needed because February contained an extra day.
Milk Haulers’ Cost Dilemma: Outside Tank-Washing Fees (p.
13):
Instigated by Dean Foods, more and more milk processing
plants are refusing to allow milk haulers to wash and sanitize their tanks at
the plant. Outside costs for washing and sanitizing a milk trailer can run
around $300 – that’s a bit more than $.50 per cwt. in costs.
The Russians ARE Coming (To Buy U.S. Dairy Heifers) (p.
14):
Arrangements have been sealed between the respective nation’s
governments. Russia will now commence serious purchases of U.S. dairy heifers.
Junction of Agriculture & Antitrust: Leahy (p. 15):
Pete Hardin picks on Vermont’s U.S. Senator Patrick Leahy
(whom he likens to a woodchuck) as a critical player in the federal government’s
inability to do ANYTHING constructive for dairy farmers and consumers. Without
adequate antitrust enforcement, agriculture programs mean nothing.
Export Deals & Grain Costs to Tighten U.S. Dairy Scene (p.
16):
Pending export deals for both dairy protein powders and
butter will tighten up U.S. dairy supplies. Meanwhile, high grain costs are
starting to depress U.S. milk production.
Feature Story #1: DFA (Enron of the Dairy
Industry): “10 Years and Crumbling” (p. 1)
This story is one of our articles of the month.
Read all about it here.
March 2008 Class III Price $18.00 – March Class IV $14.17
(p. 1):
Class prices in USDA’s federal milk order program are under
downwards pressure due to plenty of milk in late winter/early spring. Class IV
(butter-powder) is way down.
Skyrocketing Commodities’ Prices Foretell Inflation &
Economic Chaos (p. 2):
Just in the first 10 weeks of 2008, spectacular inflation of
core commodities took place. Corn up 25.5% … hard winter wheat +42.3% … natural
gas +31.6% … and on and on. But Cheddar cheese (in CME trading) was the only
core commodity to register a double-digit decline in this year’s first 10 weeks.
Farm Policy Impasse Persists in D.C. (p. 2):
Looks like Representatives and Senators will fail
to meet their mid-April deadline for passing new federal farm legislation. Don’t
hold your breath on this one!
Butter Fraud Indictments Issued (p. 2):
Two individuals and a warehousing firm have been indicted for
fraud involving illegal repackaging of inedible butter and sale of some of that
"stuff” for human consumption.
Despite Shortages, U.S. Wheat Exports Up 69% for Marketing
Year (p. 3):
Despite the fact that many fear the U.S. could run out of
wheat before our new crop is available in early summer, massive quantities of
wheat are being shipped out of the country. The Bush administration is asleep at
the switch on this one.
New Zealand Dairy Industry Faces Worst Drought in 100 Years
(p. 3):
New Zealand’s dairy marketers had expected a 3% gain in milk
output for that key island nation’s 2007-2008 dairy production year. But severe
drought is causing what looks like a –3% net for the year, which is now
finishing up. Global dairy markets are tight!
March ’08 Milk-Feed Ration Worst in Decades (p. 3):
Fast-increasing grain prices translate into USDA’s
calculation that the relationship of farm milk prices to dairy producers’ costs
for purchased grains is the worst in decades. And grain prices keep rising.
DFA Not Worth a Darn: $500 Million of Worthless Assets (p.
4):
DFA counts a total of $500 million combined
“Goodwill” and “Other Intangible Assets on its balance sheet – as part of the
co-op’s claimed $682 million equities. Further, when one subtracts out as yet
unposted losses and unpaid pension program obligations … DFA’s real net worth
looks very close to zero.
“Worst of the Worst” in DFA’s 2007 Audit (p. 4):
In 2007, DFA’s equities declined by $190 million;
“Goodwill” and intangible assets ballooned to $500 million of “assets;” NDH lost
$63.5 during October-December, after that subsidiary’s losses were posted on
DFA’s books; and pension liabilities (at least one listing) total $57 million.
DFA’s Subsidiaries and “Non-Member Businesses” Drain
Members’ Equity (p. 4):
DFA is structured so that profits from so-called
“non-member businesses” are not shared with DFA’s member-producers. But profits
in 2007 were very negative, resulting in huge losses at DFA’s subsidiaries have
caused write-downs of members’ equities.
Feature Story #2: DFA’s White Elephant—NDH—Lost
$134,200,000 Last Year (p. 5):
The 2007 audit of DFA reveals absolutely HORRID financial
performance for its biggest subsidiary—National Dairy Holdings. Find out just
how bad it was here.
“Old-fashioned Tillage & Seeds Reduce Mycotoxins in Ear
Corn (p. 6):
Writer Paris Reidhead visited the Perry family’s dairy farms
in western New York, where moldboard plowing and use of non-genetically modified
seeds results in virtually zero contamination of their ear corn by mycotoxins.
Valid Reasons for Perry’s Round-Up Ready Seed Worries (p.
6):
Paris Reidhead explores the scientific bases for
concerns about harm to animals and soils from using of “Round-Up ready seeds.
USDA OIG Credits The Milkweed for Revealing Milk
Powder Scandal (p. 7):
In March, USDA’s Office of the Inspector General
unveiled a long-running investigation of nonfat dry milk price reporting. OIG
found that USDA’s National Agricultural Statistics Service had repeatedly failed
to heed warnings about misreporting of weekly milk powder prices. Those prices
are used in USDA’s formulae to calculate monthly producer prices through the
federal milk order program. OIG credited The Milkweed with breaking apart this
scandal.
U.S. NFDM Exports’ Volume Highest When Prices Low (p. 8):
Writer John Bunting explores historic data to show
that U.S. exports of dairy protein powders coincide with periods of low domestic
prices. U.S. dairy farmers are failing to reap returns commensurate with global
dairy protein powder prices.
U.S. Milk Powder Exports: Quality Concerns (p. 9):
John Bunting details long-term problems with
quality that cause U.S. dairy protein powders to be devalued on global markets.
Too many scorched particles and too much moisture content are specific problems.
What ever happened to quality control???
How Much Longer Can DairyAmerica/Fonterra Export Deal Last?
(p. 10):
For the past seven or eight years, New Zealand’s
Fonterra has held exclusive export control over all dairy protein powders
produced by DairyAmerica’s cooperatives. How much longer can this inequitable
relationship last? We explore related issues.
U.S. Butter Exports Face Stiff Tariff Barriers (p. 10):
Other nations’ import tariffs on butter are one
major reason hampering U.S. exports of butter.
CME Keeps Growing: Adds NYMEX (p. 10):
The CME Group keeps growing. Following addition of
the Chicago Board of Trade within the past several months, the CME group has now
added the New York Mercantile Exchange to its holdings.
Dangerous Animal Feed Contaminant: What are Mycotoxins? (p.
11):
Paris Reidhead explains this feed contaminant.
More about Mycotoxins and Related Feed Contaminants (p.
11):
Feed industry professions are very worried about
mycotoxins and related feed contaminates.
AMPI’s Mark Furth to Retire (p. 11):
Long-time manager of Associated Milk Producers,
Inc., Mark Furth, will retire at the end of 2008.
Famine in America? Food Banks Severely Pinched (p. 12):
Writer/farmer Karen Kinstetter details how U.S.
food banks are running out of both food donations and money … just as needs for
food aid are skyrocketing.
Poultry Producer Scales Back: High Grain Costs (p. 12):
Pilgrim’s Pride, the world’s largest producer of
poultry, is scaling back U.S. production and processing operations, due to high
costs for feeding chickens.
Grain Costs Slaughtering U.S. Pork Producers (p. 12):
The squeeze between low pork prices and high grain
costs is driving many pork producers out of business as fast as they can go.
DFA & DMS Abusing Competing Marketers & Producers in
Northeast (p. 13):
With increased frequency, Dairy Farmers and its subsidiary –
Dairy Marketing Services – are shafting small marketing cooperatives and
producers.
More on Nora, Illinois “Mega-Dairy” Battle (p. 13):
Illinois ag dep’t officials send a long letter in
early April to A. J. Bos, demanding to know many more details about the proposed
“mega-dairy” for Nora, Illinois. Special focus is on the bedrock geology
underling the site of the proposed dairy, which could house as many as 20,000
milk cows and heifers.
Audits Needed: UpState-Niagara, DMS, MD/VA, Agri-Mark & CWT
(p. 13):
The Milkweed is putting out an alert to
subscribers to help us get possession of audits from several dairy cooperatives.
Dairy Cattle Replacement Prices at Auction Markets across
the USA (p. 14):
The glut of milk in California, coupled with high
feed costs, is causing demand for springing heifers and milk cows to back off in
most parts of the country. Meanwhile, prices for breeding age heifers and
younger, open heifers remain steady.
Monsanto Tries to Push NY & VT Ag Chiefs on rbGH Labeling
(p. 14):
Monsanto-friendlies are now leaning on the
agriculture commissioners of New York State and Vermont to clamp down on dairy
products’ “rbGH-Free” labeling claims.
DFA: Worthless Assets, Lying Leaders (p. 15):
Pete Hardin analyzes DFA’s financial and
leadership problems.
Tough Times Ahead for All Sectors of Dairy (p. 15):
Higher costs of all kinds, coupled with declining
ability to pay by consumers, presents the U.S. dairy industry with many
challenges to sustain both volumes and profits.
Disconnect: U.S. Milk Glut/Global Scarcity: Go Figure (p.
16):
There’s a certain irony to watching California
dairies dump milk and their marketers shipping milk/cream long distances out of
state … while New Zealand’s milk production is atrophying under the worst
drought in 100 years. Will U.S. dairy commodity prices ever catch up to world
prices? Stay tuned!
The Big Picture: U.S. Economy Very, Very Precarious (p. 1):
We try to summarize the mega-events that are weighing against
the U.S. economy … from energy costs to home foreclosures. The headline tells it
all.
February 2008 Class III Price $17.03 –February Class IV
$14.67 (p. 1):
Class III (cheese) and Class IV (butter-powder)
are declining – reflecting lower dairy commodity prices.
Dean Foods: Profits Down, Stock Values Nosedives (p. 2):
Fortunes at the nation’s largest fluid milk processor are
down. Profits for 2008 were down. Stock values have plunged into the very low
“$20s.”
Canada’s New Cheese Standards (p. 2):
Canada has new regulations defining cheese
standards, which has U.S. processors howlin’ mad. Why? Canadian standards don’t
allow elevated ratios of “whey proteins to casein” in finished products. That’s
one way to limit how much Milk Protein Concentrate (MPC) can be used in cheese
products.
Jan. Cheddar Price Zaps Mar. FMMO Class I Price $2.98/cwt.
(p. 2):
The price dip for Cheddar prices at CME in mid-
and late-January 2008 set off a big price decline for Class I (fluid) milk The
March 2008 Class I base price in federal milk orders will declines $2.98/cwt.
Ouch.
Fertilizer Costs Keep Climbing Higher & Higher (p. 3):
High grain commodity prices are spurring increased
global production. The weak U.S. dollar and strong demand for grain production
in 2008 are driving up fertilizer costs. U.S. reliance on a large amount of
imported fertilizer makes costs all the more expensive.
Alto Co-op Members Overwhelmingly OK Sale to Saputo (p. 3):
In late February, members of Alto Co-op (Waupun,
WI) voted almost unanimously to accept the purchase offer for their cooperative
from Saputo Cheese of Canada. Members got a $10,000 bonus and full pay-back of
their equities.
Saputo Denies Mob Link Stories (p. 3):
A flurry of recent news stories in Italy and Canada have
discussed alleged ties between Saputo Cheese and organized crime. Saputo
personnel vigorously deny the stories have any basis.
Octogenarian Michigander’s Cow-Colostrum Cancer Cure
Survives Trial (p. 4):
A jury in Marquette, Michigan found a local man
“not guilty” of all but one charge in a federal trial in late February. The man
was treating cancer patients with an unapproved practice: injecting a cancer
patient’s blood into the pregnant cow and then having the patient drink large
volumes of colostrum that contained anti-bodies.
Worst Drought in Century Cuts NZ Milk Flow (p. 4):
The worst drought in 100 years is seriously
constricting New Zealand’s milk flow late in the Kiwis’ milk production season.
Fonterra—New Zealand’s global dairy marketing agent—has oversold and is scouring
the globe to find additional dairy supplies.
Beef Processor’s New Math #3 + #4 + #5 = #1 (p. 4):
In a flash, the Brazilian meat powerhouse JBS SA
acquired two U.S. fluid processors – consolidating the third, fourth, and fifth
biggest beef packing businesses in the U.S. into a single entity, which is now
the largest U.S. beef processor. Will federal Antitrust enforcers take notice?
Don’t bet on it!
Biggest-Ever Beef Recall from Unscrupulous CA Meat Plant
(p. 4):
You’ve seen or heard about the pictures of abuse
of downer cows in the Chino, CA meat packing plant. Ugly.
Global Wheat Shortage Causes Price Spikes: Famine Looms (p.
5):
Writer Karen Kinstetter has meticulously studied
grain markets and details many of the factors driving up wheat prices around the
world. Excellent article.
Bakers Up in Arms over High Grain Prices (p. 5):
U.S. baking interests took their protest to
Washington, D.C. They’re crying the blues, as wheat prices skyrocket.
Feeding Corn-Ethanol Distillers Grains Spikes E. Coli
0157:H7 in Cattle (p. 6):
Writer Paris Reidhead details research showing big
increases in the presence of the powerful, dangerous E. Coli variant – 0157:H7 –
in the intestines of dairy and beef cattle fed distillers grains from processing
corn into ethanol.
Florida “Milk Wars” Subsiding??? (p. 6):
Looks like things have settled down in Florida’s
fluid milk supply war. Too much bleeding of finances occurred when an alternate
raw milk supplier took over supplying most of the milk to Dean Foods’ plants in
Florida from the local co-op.
Feature Story: Charts Detail Who’s Got Milk
Pricing Power (p. 7):
View the March feature story
here.
Clayton Yeutter: Sire & Architect for Decades of Failed
U.S. Farm and Trade Policies – from “Free Trade” to Biotechnology (pages 8-10):
Want to put an ugly face on decades of misbegotten
U.S. farm and trade policies? Then Clayton Yeutter’s your man. This guy has
served in posts such as USDA Secretary, U.S. “Special Trade Ambassador” and even
head of the Republican National Committee. In later years in the private sector,
Yeutter has championed the interests of New Zealand dairy farmers and food
biotechnology.
Nora, IL Update: State Attorney General’s Office Requests
Delay (p. 10):
No final word from northwestern Illinois in the
battle over siting a California investor’s mega-dairy. Illinois’ Attorney
General’s Office has weighed in, directing the state agriculture department to
be very cautious in reviewing the application.
Harkin Supports National Animal Identification System,
Plans Hearings (p. 11):
U.S. Senator Tom Harkin (D-IA), chair of the
Senate Agriculture Committee, has stated he wants to push mandatory livestock
identification. Chair of the House Agriculture Committee – Collin Peterson
(D-MN) – is making similar noises. Article submitted by Mary Zanoni, executive
director of “Farm for Live” – an organization based in Canton, New York that
opposes mandatory registration of livestock/poultry premises and creatures.
Canadian Court Rules Against Raw Milk Exports to U.S. (p.
11):
Finally, the Canadian court has ruled in a case
involving illegal shipments of farm milk from Ontario Province into New York
State. This issue ought to be a complete embarrassment to the New York State
Dep’t of Agriculture & Markets.
Purchased Feed Costs Punishing Organic Milk Producers (p.
12):
Away for the Upper Midwest, costs for purchased
organic dairy feed rations (16% protein) have topped the $600/ton mark. Major
buyers remain relatively insensitive to pleas for price help from organic dairy
farmers. The organic dairy dream is turning into a nightmare for many
family-based producers. Ironically, big “organic” mega-dairies owned by major
processors are both responsible for gobbling up grain supplies and holding down
prices.
Milk Haulers to Review Tank Washing at April 21-22 Meeting
in Arizona (p. 12):
The International Milk Haulers Assn. meets in
Mesa, AZ in late April. The contentious issue of tank washing is on the agenda.
Interested persons may find out more details at the organization’s web site at:
www.milkhauler.org/events.htm
Weekly Data on Cow Imports From Canada (p. 2):
We analyze weekly numbers for dairy cows entering
the U.S. from Canada. Most are going to farms in Michigan, Wisconsin, Ohio and
Indiana.
Still No Answers About Cow/Horse Safety Tests for GM
Alfalfa (p. 13):
Writer Paris Reidhead explores issues relating to
GM alfalfa – including the fact that he still can’t get a return phone call from
the developers of “Roundup Ready Alfalfa” about what, if any, safety tests were
ever conducted on cows and horses.
Dairy Cattle Replacement Prices at Auction Markets Across
the USA (p. 13):
Our monthly review of dairy animal prices shows
stronger prices in some markets. Interest in open heifers is picking up.
Questions for Maryland & Virginia Co-op Members to Ask (p.
13):
The upcoming annual meeting of Maryland & Virginia
Cooperative Milk Producers provides good time for concerned members to ask
questions about their co-ops management and finances.
Tighten Up (p. 11):
Editor Pete Hardin scorns wasteful practices and strategies
in dairy marketing/pricing. Hardin notes that it’s time to get back to basics,
and promote fluid milk for its nutritional value, emphasize in-home use of dairy
products, etc., etc. These times do not allow for such waste as goes on in dairy
promotion, pricing and marketing.
Cheese, Milk Powder & Whey Prices Decline: Butter Gains (p.
16):
Dairy commodity prices are falling, except for
butter. Business as usual in dairy markets. Global dairy prices are being
propelled by serious drought in New Zealand.
Up/Down, Up/Down: CME Cheddar Price Gyrations Mystify
Industry (p. 1):
The up-and-down price cycles of Cheddar prices at the Chicago
Mercantile Exchange cash markets defies a market-based explanation.
January 2008 Class III Price $19.32 – January Class IV
$16.29 (p. 1):
Class prices for the federal milk orders are down from the
previous month—reflecting lower dairy commodity prices surveyed by USDA’s NASS.
Pennsylvania Issues New Milk Labeling Regulations (p. 2):
After much controversy, Pennsylvania has issued “new” milk
labeling laws regarding “absence labeling” (i.e., “no this” or “no that”) for
dairy processors and marketers. The announcement cools down the blaze set when
state agriculture department secretary Dennis Wolff tried to bolster Monsanto’s
sagging fortunes in the “No rbGH/rbST” wars.”
Rumor Mill: Pending DFA “Reblend” in Northeast (p. 2):
Due to operating losses in the region, DFA will institute a
$.20 per cwt. charge against members’ milk checks to make up for losses.
Inefficient.
St. Albans Co-op Sets 20-Cent Reblend (p. 2):
Monkey see, monkey do. St. Albans Co-op—Vermont’s
largest dairy co-op—is instituting a $.20/cwt. charge to make up for losses. The
more St. Albans has “run with the big dogs,” the worse its financial performance
has become.
Alto to Become Alpo? Saputo Offers $160 Million Buyout Deal
(p. 3):
The big news in Wisconsin is the $160 million
buyout offer to Alto Co-op (Waupun, WI). The struggling dairy co-op members will
vote in late February as to whether to accept the deal. Details: Alto members
will get paid $10,000 bonus if the deal is passed, plus get paid off on 100% of
their equity! Alto producers who stay with Saputo can sign up for a two-year,
$.35/cwt. loyal premium. Sounds like a deal too good to be true.
Feature Stories of the Month: click
here
to view our two feature stories for February.
Nonfat Dry Milk
Déjà vu:
DairyAmerica to Underperform Again?
AFACT–”Grassroots” Group Bankrolled by Monsanto
Hispanic Dairy Products 101 (p. 5):
Hispanic consumers make up about 15% of the U.S.
population currently—headed for 20% by 2020. The Milkweed profiles the
demographics of Hispanics and their dairy product consumption patterns. Hispanic
foods and cuisine extend far beyond their population numbers.
Lender Liability: Complex, Important Legal Issue for
Agriculture (p. 6):
Attorney Susan LaCava (Madison, Wisconsin) writes
about the complex area of “lender liability” … with a special focus on
questionable farm lending practices. Interesting reading!
Nora, IL (pop. 200): “Ground Zero” for California
Zillionaire’s (?)?,???-Cow Mega-Dairy Plans (pages 7-10):
In this special four-page report, Editor Pete Hardin lays out
the battle at Nora, Illinois, where California dairy figure A. J. Bos is
proposing to drop what he wants to become a pair of mega-dairies totaling more
than 20,000 dairy animals. Neighbors opposing Bos’ plans are fighting back, and
have succeeded in gaining votes against the project from a key committee and,
very recently, the full Jo Daviess County board of supervisors. Final say in
siting of mega-farms in Illinois rests with the state department of agriculture.
Critics see severe “faults” in Bos’ mega-dairy plans, due to karst bedrock
(fractured dolomite limestone). In the grander scheme of things, what’s
happening: A. J. Bos’ move to Illinois represents an early wave of an exodus
from California dairying.
Fly Problems at Aurora Organic Dairy’s Gill, CO Dairy Irk
Neighbors (p. 11):
Aurora Organic Dairy’s farm at Gill, Colorado had
the neighbors hopping up and down made due to fly problems in 2007. Fly control
measures at the organic dairy failed … completely. Neighbors want to close down
the farm.
Aurora Organic Dairy: Vertically-Integrated Scam (p. 11):
Fly control is just one of the many questions
surrounding Aurora Organic Dairy. How can dairies with thousands of dairy
animals get the mandatory, 120-day access fresh pasture???
Aurora Organic Dairy Owner Buys Most Expensive Home in
Boulder, CO (p. 11):
Yuppies and their castles! Owner of Aurora Organic
Dairy—Marc Peperzak—has recently acquired the most expensive residence in
Boulder, Colorado. Peperzak paid about $1150 per square foot for his new condo.
Most of what You Want to Know About Bovine Manure (p. 12):
Paris Reidhead details a most important subject:
bovine manure.
Dairy Animal Prices Poised for More Gains (p. 13):
Lots of questions about what good dairy animals
are worth … and what they’ll be worth in the future. Pete Hardin surveys dairy
animal prices with some key considerations for owners who wish to maximize their
net worth over time.
CWT Announced Program to Kill Bred Dairy Heifers (p. 14):
The ignorance of National Milk Producers is truly
reflected in the most recent announcement from the “Cooperatives Working
Together” program: to subsidize KILLING bred dairy heifers. Pete Hardin scorns
the motives and mentality behind this idea.
Shut Up and Eat Your Wheatie (p. 15):
$15/bushel wheat? Pete Hardin details data on the
shortage of wheat-—both globally and in the U.S. If anything, the U.S.
government is being naïve in its handling of the wheat crisis. Hardin analyzes
how bad weather has badly damaged the winter wheat crop in the southern and
central Plains. The world is scrambling for wheat supplies, with U.S. exports
rising. It’s likely that the U.S. will run out of wheat before the new crop is
in—unprecedented!
CME Cheddar Prices Vary; Butter and Powder Prices Decline
(p. 16):
Our monthly review of U.S. dairy marketing trends
… with big question marks hanging over the irrational ups and downs of cash
Cheddar markets at the Chicago Mercantile Exchange.
Dairy’s “New Era:” Higher Prices, Costs; Greater Risks and
Opportunities (p. 1):
The world of dairy we knew has changed dramatically. Higher
grain and energy costs are causing a recalculation of just about every imagined
“efficiency” in the modern U.S. dairy farm community. Pete Hardin discusses
these topics in a wide-ranging thought-piece on dairy’s new realities.
December 2007 Class III Price $20.60—December Class IV
$19.18 (p. 1):
Take a good look. It’ll be at least a few months before we
see “$20-something” FMMOs class prices for manufactured dairy products.
USDA January 11 Grain Reports Jolt Agriculture (p. 2):
A set of grain reports and projections were issued by USDA on
January 11—and the near-immediate response was to propel most 2008 corn future
above $5 per bushel, while soybeans nearly hit $13 per bushel. Global grain
shortages, and a weak U.S. dollar, are driving grain prices sky-high.
NYS “Canada Milk Imports” File: 300 Pages Missing (p. 2):
NYS Department of Agriculture & Markets officials decided to
withhold more than 300 pages of documents about the Canadian milk import scandal
from an open records request by writer John Bunting. What’s so secret that a
reporter can’t see it??? Does Gov. Eliot Spitzer have another scandal brewing?
We’ll dig further.
Feature Story #1: Wheat Shortages Loom for U.S. and World (p. 2)
Feature Story #2: Russian Buyers Likely in U.S. Dairy Heifer Market by Mid-2008 (p. 3)
Rumor mill: Dean Foods Puts on Lipstick for Pepsi (p. 3):
A number of new executives hired at Dean Foods seem to have a
common tie: backgrounds with PepsiCo. Is the financially-troubled Dean Foods
trying to sell the cow before it dies?
Closer Look at Cheddar Prices & Markets (p. 4):
John Bunting takes a hard look at a lot of data on U.S.
Cheddar production, pricing and market trends. Conclusion: Something’s terribly
wrong with Cheddar pricing—and that impacts virtually all dairy pricing.
U.S. Milk Powder Problems: Exports Down, Production Up (p.
5):
Milk powder prices are falling in the U.S. and western
Europe. Pete Hardin explores the complex relationship between Fonterra (NZ) and
DairyAmerica (the U.S. milk powder pricing cartel). Conclusion: Fonterra has
repeatedly failed to foresee coming waves on behalf of its efforts to sell
DairyAmerica’s milk powder exports.
Milk-Feed Price Ratio: History No Clue to Future (p. 6):
The sudden upsurge of grain costs, and short-term declines in
milk prices, promise to squeeze dairy producers buying grain and hay. Tough
times ahead staying ahead of grain costs. Writer John Bunting projects that,
using March 2008 CBOT grain futures for corn and soybeans (as of January 11,
2008), dairy farmers would need a milk price of $34.55/cwt. to maintain a 3:1
milk price feed ratio.
History of “rbGH-Free” Dairy Product Labeling Battles (p.
7):
Editor Pete Hardin has been beating up Monsanto and Posilac
(rbGH) in print for more than 20 years. Hardin reflects on the long history of
legal battles involving Monsanto’s direct and indirect attempts to deny
concerned consumers’ right to know whether their milk and dairy products come
from cows injected with Monsanto’s controversial biotech hormone.
“Dumb Luck” Drywall Recycling: Many Advantages for Dairy
Farmers (p. 8-11):
Jim Kramer of Brooklyn, Wisconsin has a unique
business—recycling scraps of drywall into a lime-like powder that has many
benefits to agriculture. The gypsum powder chemically reacts with ammonia
produced from livestock wastes to: reduce odors, improve health of baby animals
(like calves and swine), reduce fly populations, and other benefits. AMAZING
STORY!
What’s Driving Budget-Budget Organic Grain Prices (p. 11):
Writer Paris Reidhead has spent a lot of time interviewing
sources in the organic grain trade to find out why prices are so high. Organic
dairy farmers who are buying grain are finding it very difficult to cash-flow
positively.
Analysis: Inside Organic Grain Trends (p. 11):
We welcome Kewaunee, Wisconsin dairy farmer and organic
certifier Karen Kinstetter as a contributor! From her inside perspective, Karen
details the almost impossible shortage of organic feed in the U.S.
U.N. World Food Outlook Troubling (p. 12):
The United Nations’ Food and Agriculture Organization takes a
critical look at global grain supplies. Wheat and corn supplies are very scarce.
Mostly Quiet on rbGH Front (p. 12):
Mercifully, the past month has seen few changes in the status
of Monsanto-inspired efforts to get individual states to block “rbGH-Free”
labeling claims by dairy processors and retailers.
USDA Wants Mandatory Animal ID System for Nearly All Dairy
Farms (p. 13):
We welcome another new contributor—Mary Zanoni of Canton, New
York. Mary heads a group, “Farm for Life,” which opposes federal and state
efforts impose mandatory premises and animal identification systems. Get this:
Mary reports in this issue that at least U.S.-based dairy breed associations and
many DHIA (herd testing) organizations plan to impose mandatory premises ID
registration requirements on their members in 2008!
Beware of Class I Impact When Cutting Whey Values (p. 14):
Pete Hardin warns changing whey formulae in state and federal
milk pricing systems will cut Class I (fluid) milk prices—which is a bad idea.
Dairy Cattle Replacement Prices at Auction Markets Across
the USA (p. 14):
Our latest survey of dairy cattle prices from more than a
dozen markets around the country. Some sales are strong, but buyers are getting
nervous about trends in both milk and purchased feed prices.
“Can’t Do” Acting USDA Chief “Feels Sorry For” Livestock
Producers (p. 15):
Pete Hardin blasts acting USDA Secretary Chuck Conner for
comments that official made on an early Saturday morning farm radio program, in
which Conner said he “felt sorry for” livestock producers (due to the upwards
explosion of grain prices). Hardin notes that Conner has the legal directive to
raise farm milk prices, if milk supplies are threatened by high grain costs paid
by dairy farmers. NEVER has USDA imposed such powers. Section 608c (18) of
USDA’s laws give the Secretary that power. Hardin reprints that law on his page.
CME Cheddar Price Antics Not Rational (p. 16):
The ups and downs of Cheddar prices at the CME are not based
on honest market trends. Here in early 2008, prices for both Cheddar and nonfat
dry milk are declining, as domestic milk volume is up and demand is worrisome,
due to the nation’s economic problems.
Cheese Market Remains Tight, Despite CME Price Ups & Downs
(p. 1):
Block Cheddar prices at the Chicago Mercantile
Exchange remain near all-time peak prices, despite a one-day decline (Nov. 29)
of 19.25 cents/lb. U.S. Cheddar output off significantly since April. Domestic
and export demand strong.
November 2007 Class III Price $19.22 – November Class IV
Price $20.40 (p. 1):
Prices for dairy commodities (except butter) are
driving strong producer prices in USDA’s federal milk order system.
Dean Foods Again Procuring Own Independent Producers (p.
2):
In parts of the Southeast and Northeast, Dean
Foods is back in the country directly procuring milk from independent producers.
What’s up with DFA’s “exclusive” raw milk sales deal to Dean Foods?
Whey Less: CDFA Cuts Producers’ Cheese Milk Price (p. 2):
OUCH! The California Department of Food and
Agriculture has announced a new pricing system that will reduce prices paid
producers for Class 4b (cheese) milk by between $1.50 and $2.00/cwt. Processors
have whined loudly about whey prices being too high.
PA Governor Says “WHOA!” to Milk Labeling Restrictions (p.
3):
Deluged by angry calls, e-mails, letters and faxes
from consumers, Pennsylvania governor Ed Rendell has at least temporarily halted
the state’s agriculture department from implementing a ban on “absence labeling”
of dairy products. Is Pennsylvania “Posilac’s Last Stand?”
Kraft Will market Some “rbGH-Free” Cheese Products (p. 3):
Kraft Foods will start selling 2% natural and
“Singles” made from “rbGH-Free” milk soon. As goes Kraft …
WI Ag Dep’t Sneaking Through Raw Milk Farm-Share Ban? (p.
4):
Opinion diverge, but many fear that Wisconsin’s
agriculture department is using a massive revision of state dairy sanitary codes
to effectively halt raw milk sales in the state.
CA Using Coliform Test to Kill Raw Milk Sales (p. 4):
Without notice to the raw milk community
(producers and consumers), California’s legislature approved bills that now
mandate coliform tests which will make it impossible to sell raw milk in the
state.
California Water Supplies & Politics Critical for Ag (p.
5):
Water issues are very critical in California, and
other western states. Good question: how long can low-end use of water to grow
alfalfa for dairy cows compete with higher-end industrial and human needs?
Don’t Expect 2007 U.S. Farm Law in 2007 (p. 5):
The headline says it all.
$6.50/Vial: HeiferPlus Dramatically Boosts Heifer Calf
Numbers (p. 6):
Writer Paris Reidhead details how an inexpensive,
new product—HeiferPlus—helps change the normal yields of heifer calves up to
nearly 80%. This product could revolutionize the U.S. dairy industry!
NYS Ag Commissioner Goes Bonkers over Canadian Imports (p.
7):
NYS Agriculture Commissioner Patrick Hooker has
weirded out over the story last month in The Milkweed. Hooker claims to be
fighting against illegal Canadian raw milk imports, when in fact his department
let them in!
NYS Ag Dep’t Broke Own Rules (p. 7):
Last May 23, 2007, the NYS agriculture department
allowed Canadian milk to keep flowing into the U.S., despite a final ruling by
the Canadian Supreme Court that cross-border milk flow was illegal. The Milkweed
explains how at least for one week, NYS’ ag department violated its own rules by
allowing milk imports before state inspectors could complete necessary
inspections.
Bad Idea: U.S./India “Free-Trade” Deal Proposed (p. 8):
At a speech in India, California Congressman David
Dreier stated he’ll introduce a bill calling for “Free-Trade” negotiations
between the U.S. and India to be started. From a livestock disease standpoint,
The Milkweed explains how such an idea would be very bad. India is a hotbed of
“Foot and Mouth Disease” outbreaks. FMD disease may survive several weeks in
processed food products—plenty of time to travel by ship from India to the U.S.
176 In Congress Belong to Caucus on India (p. 8):
A not-so-grand total of 176 members of the U.S.
House of Representatives belong to the “Caucus on India and Indian Americans”—a
likely incubator for a U.S./India “Free-Trade” deal. The Milkweed lists some of
the Congress persons who should know better!
USDA FINALLY Answers Senators’ Letters Re: Milk Powder
Pricing (p. 9):
At long last, USDA has finally replied to two letters,
written months ago, by groups of U.S. Senators demanding answers about nonfat
dry milk powder reporting and pricing problems. No, the letter didn’t really
answer many hard questions.
Monsanto P.R. Firm Hosts “Rural Americans for Hillary”
Event (p. 9):
This past fall, a Monsanto-linked public relations
firm—Troutman Sanders Public Affairs Group—hosted a fund-raiser in Washington,
D.C. for the “grassroots-sounding” political group: “Rural Americans for
Hillary.” It’s the silly season.
U.S. Dairy Livestock Price Report (p. 10):
Prices steady for springers and open heifers in many parts of
the U.S. Watch hay and feed supplies carefully. Hay is tight and limits buyers’
interest in young dairy animals.
What’s Going to Happen with Milk Prices??? (p. 1):
Pete Hardin offers his projections on farm milk prices
through the first half of 2008, along with the factors that will drive them. In
quick summary, he projects 4th quarter 2007 prices will be $1.00-1.50 lower than
2007’s third quarter. For January-March 2008, Hardin estimates farm milk prices
will drop another $1.25-1.75/cwt. below 2007’s fourth quarter. And for 2008’s
second quarter, Hardin bets that milk prices will rise to at least something
close to the 4th quarter of 2007.
Big Algerian Milk Powder Deal Fizzles/U.S. Prices Decline
(p. 1):
Around November 1, it became clear that U.S. nonfat dry milk
would not supply a big (25,000 metric ton) purchase offer from Algeria. Instead,
U.S. powder will comprise only about 10-15% of that deal. Sources say that
Fonterra (the New Zealand group that has exclusive contract to export U.S. milk
powder) misgauged world markets and missed the sale. As a consequence of failure
to seal the Algerian deal, milk powder prices at CME and DairyAmerica’s spot
price immediately dropped.
October 2007 Class III Price $18.70 – October Class IV
$21.31 (p. 1):
USDA’s announced Class III (cheese) and Class IV
(butter-powder) milk prices for October 2007. Class III represents a decline of
$1.37 from the September 2007 price. Class III remains strong for this month.
Some California Milk Buyers to Limit Producers’ Daily
Volumes (p. 2):
California is brimming over with farm milk. Finally, some
buyers are taking steps to limit how much milk producers can expect the
marketers to handle at market prices.
Australian Drought Continues, Oceania Dairy Supplies
Tighten (p. 2):
Milk production in Australia is hammered by prolonged, severe
drought. Meanwhile, New Zealand’s farm milk output is not able to allow
marketers to fulfill contracted sales of manufactured dairy products.
Protein Shortage: Massive Soy Imports Entering the U.S. (p.
2):
Gov’t data bear out this nation’s protein shortage: exports
of soy products for the first eight months of 2007 equal less than one-tenth of
soybean imports entering the U.S. Most soybean imports have come from
Canada—where the currency appreciation (vs. the U.S. dollar) means further
imports from that source will be costly.
Dairy Promotion Questions Unanswered in Farm Bill Fracas
(p. 3):
As the politicians fight over the 2007 farm bill,
questions about dairy promotion programs have become verboten subjects for many
of the big wigs. Despite reauthorization of the National Dairy Board for another
five years, House and Senate ag leaders don’t want to hear questions about
accountability and effectiveness.
The Russians Are Coming … and They Want Heifers (p. 3):
Russia, which is brimming over with surplus funds from energy
sales, wants to modernize and grow its food system—with a big emphasis on dairy.
Russians are looking for up to half a million dairy heifers—they’re buying
heavily in Europe and Canada. Will Russian demand boost prices for U.S. heifers,
either directly … or through cross-border deals with Canadians?
Agriculture to Shift from Arid West; Midwest Farmland
Values to Soar? (p. 4):
Severe drought, which threatens to become prolonged, will
force a dramatic shift of food production from arid western deserts back to the
Upper Midwest—where the moisture usually is available free. Energy and drought
threaten to change the face of American agriculture faster than anyone can
imagine.
Details of Cornell University’s rbGH Test Scarce to Come By
(p. 5):
In the early 1990s, USDA hired Cornell University to develop
a test for rbGH residues in cow’s milk. In 1997, the U.S. Patent Office granted
a patent for the test. But details are hard to track down, as writer Paris
Reidhead determines. Reidhead also reports that a test to determine of milk has
been produced from cows receiving injections of Posilac (Monsanto’s diabolical
cow growth hormone) will be announced in Spring 2008.
Ohio Holds Hurry-Up rbGH-Labeling Meeting (p. 5):
Following Pennsylvania’s lead, the Ohio Department
of Agriculture held a public meeting about issues concerning labeling of
consumer dairy products made from milk from herds that do not inject their cows
with Posilac. It’s doubtful that Ohio will mimic PA’s ban.
“Quickie” NY Inspections Save Canadian
Farms’ U.S. Milk Markets (p. 6):
This shocking expose by John Bunting is our “Story
of the Month.” Read all about it here.
PA Bans “rbGH-Free” Dairy Product Labeling, Effective 1/08
(p. 7):
In late October, under flimsy reasons,
Pennsylvania’s Secretary of Agriculture, Dennis Wolff, banned dairy processors
from labeling their consumer products in any fashion that states the contents
came from dairy herds where the cows have not been injected with Monsanto’s
Posilac. Dairy processor and consumer groups are plotting legal challenges.
Organic Foods are Found to be More Nutritious (p. 8):
A study from England found that organic foods are
far more nutritious than their non-organic counterparts.
Dairy Today/Monsanto Cancel All “Forums” for Nov. 5-9 (p.
8):
Strange. With only a couple days’ notice, Dairy
Today (a dairy farmers’ publication) and Monsanto cancelled about ten meetings
for dairy producers for the week of November 5-9. The meetings were to have been
held in an area stretching from western New York and Pennsylvania to Indiana.
Russian Buyers Reject U.S. Butter Due to Lactic Acid (p.
8):
Several hundred metric tons of U.S. butter in
Russian warehouses are being refused because they were manufactured using lactic
acid (a preservative). It’s been a long time since the Russkies could afford to
turn up their noses as perfectly good food!
Cornucopia to USDA: Make Aurora Pay $.15/cwt. Promotion Fee
(p. 9):
The organic industry’s watchdog—the Cornucopia
Institute—has complained to USDA’s Agricultural Marketing Service that Aurora
Organic Dairy of Platteville, Colorado should be retroactively forced to pay the
$.15/cwt. fee assessed for dairy promotion. In 2005, USDA exempted organic
dairies from paying the promotion assessment. But Aurora’s recent problems with
complying with organic rules raise questions about whether the company could
validly have been exempted from these payments.
Organic Foods Groups and Consumers File Suits Alleging
Aurora Organic Dairy Committed Fraud (p. 9):
Food groups and consumers have filed lawsuits
against Aurora Organic Dairy, alleging that firm fraudulent labeled dairy
products as “Organic” when, in fact, USDA recently determined that more than a
dozen, long-term, “willful” violations of organic rules had been committed by
Aurora.
Dairy Cattle Replacement Prices (p. 10):
Our monthly profile of national dairy livestock prices shows
prices steady. Top end springers are hot. In the Southeast, producers are
selling off young heifers to get money to buy hay for milk cows.
Canadian Border to Open November 19 – Don’t Worry (p. 10):
On November 19, the Canadian border will reopen for transfer
of dairy animals from Canada to the U.S. Some in dairy have posited this event
as the worst thing since Bruce L. Osis, but The Milkweed puts an opposite spin
on this event. For starters, the value of the Canadian dollar will make
importing dairy heifers very expensive.
Milk from rbGH-Injected Cows IS Different (p. 11):
Pete Hardin explains, citing various studies, four
ways in which milk from rbGH-treated cows is different from “normal” cows’ milk.
So much for the “no difference” and “the same” claims by Monsanto and its
allies.
Cheddar Prices Post Gains at CME, But Milk Powder Prices
Decline (p. 12):
Cheddar prices at the Chicago Mercantile Exchange
have risen about 15 cents per pound in the past few weeks—up to the $2 per pound
level. Butter prices are showing some life recently—up to $1.39 per pound range.
And milk powder prices are falling—due to a failure to gain more volume from a
big Algerian sales contract.
Could Senate Meltdown Leave House Plan as Only Farm Bill
Option? (p. 1):
The Senate agriculture committee is paralyzed by staff
in-fighting. Majority leader Harry Reid (D-NV) has warned ag committee chairman
Tom Harkin (D-IA) that unless Harkin gets the job done by the end of October,
Reid will take the horrid House bill to final mark-up. The Milkweed reviews the
key dairy portions of the House ag bill and finds them lacking.
Senate Ag Committee Staff Chaos Imperils Farm Bill Process
(p. 1):
Failure to move ahead on farm bill considerations is placed
squarely on the shoulders of Senate ag committee chief of staff Mark Halverson …
and his political patron, Iowa Senator Tom Harkin. “Total chaos” is how Capitol
Hill insiders describe events within the Senate ag committee.
September 2007 Class III $20.07 – September Class IV $21.61
(p. 1):
Class III and Class IV prices stay above the $20/cwt. mark
for September, although it looks like Class III (cheese) milk prices will fall
below the $20 level in October.
Crops: Plenty of Corn, But Soybeans & Forages Look Very
Tight (p. 2):
A big U.S. corn crop, in tandem with a sharp decline in the
fortunes of the ethanol sector, mean that in corn country, there will perhaps be
more corn by late fall than anyone knows what to do with. USDA estimates a 13.3
billion bushel crop. But soybeans are a completely different story. Soybeans are
estimated at only 2.6 billion bushels—down 19% from 2006’s crop. And The
Milkweed’s analysis on soybeans is that USDA’s October 12 crop estimate was
overtly optimistic on yields. Coupled with tight forage supplies, dairy farmers’
costs of purchased proteins in the upcoming year will be very, very expensive.
On the Organic Dairy Front … (p. 2):
We review three key areas of interest to organic dairy
farmers—1) sky-high grain costs, 2) buyers pounding organic milk prices, and 3)
Aurora Organic Dairies’ threats against activist groups that continue to hound
that Colorado mega-dairy over massive violations of the USDA’s organic rules.
CWT – Here They Go Again with Phony Numbers (p. 3):
Writer John Bunting takes apart recent claims by the
“Cooperatives Working Together” program that CWT has added $.75/cwt. to U.S.
producers’ milk prices so far in 2007. The various numbers for dairy exports
claimed by CWT don’t add up—either by CWT’s prior claims or by its academic
hireling Scott Brown. CWT is a cash-flow scam.
More Raw Milk Marketers Going “rbGH-free” (p. 3):
Prairie Farms … the Central Milk Producers Cooperative … some
DFA regions … (and soon) Smith’s Dairy—all are new entrants, or are planning to
join soon, the “rbGH-free” milk bandwagon. Couple other items: Cheese and yogurt
marketers are now under growing “rbGH-free” pressure. And we must wonder, how
much longer can Monsanto profitably keep marketing Posilac?
Dean Foods Drops Earnings Forecasts, Blames High Milk Costs
(p. 4):
Blaming high milk costs as a convenient excuse, Dean Foods
has dramatically scaled back its earnings estimates for the second half of 2007.
The real problem: too much debt. Debt repayment and interest costs dramatically
exceed Dean Foods’ historic (2004-2006) quarterly profits. Wall Street is not
being kind to Dean Foods’ stock value.
Next Dairy Pricing Scandal: Butter (p. 4):
Right now, cash prices for Grade AA butter at the Chicago
Mercantile Exchange are $1.28 per pound. That’s less than half of the price for
Western Europe reported by USDA’s Dairy Market News. As best we can, The
Milkweed is putting together all the pieces in butter, including: U.S. prices
half of global prices, reports that foreign interests own much butter and
anhydrous listed as “inventories” by USDA’s monthly “Cold Storage” data, butter
and anhydrous milkfat exports listed by the CWT scam (that don’t show up on U.S.
gov’t export data), and insiders telling us that foreign interests are waiting
until January 2008 export subsidy declines to move huge quantities out of this
country. Once again, the U.S. dairy farmers see low commodity prices while
global markets are sky-high. This situation is shaping up just like the “milk
powder pricing scandal” of the past year!
Look Out! DFA Launches “Cost-Cutting” Efforts (p. 5):
Dairy Farmers of America is under financial pressure to
dramatically cut costs. Nothing like a big co-op meeting in Kansas City for Rick
(alias, “Tricky Rick”) Smith to tell the co-op’s big-wigs that news. What’s
wrong??? The new era of caution by financial lenders raises some serious
questions about DFA’s assets, debts, and certain red-ink operations. Of course,
the easiest way for DFA to “cut costs” is simply to pay producers less for their
milk.
DFA Lawyers Goof Up Internal Property Transfer in Louisiana
(p. 5):
How many errors can DFA’s in-house counsel David Geisler make
on a seemingly simple, in-house transfer of real estate properties in Washington
Parish, Louisiana? Let’s see: 1) No complete statement of remuneration, 2) No
witnesses names on the title transfer documents, and 3) DFA isn’t even listed as
the owner of some of the property transferred!
Dairy Farmers Should See Red: U.S Commodity
Prices Way Below World Levels (p. 6-7):
This story is our “Story of the
Month.”
U.S. Powers that “Bee” Continue Ignoring EU GM Research (p.
8):
Paris Reidhead revisits the subject of bee “Colony Collapse
Disorder,” reviewing what U.S. scientists believe may be responsible for the
scary disappearance of many bee colonies. But virtually ZERO scientists in the
U.S. are looking at the possibility that bee deaths may be linked to
genetically-modified (GM) crops. In Europe, governments have destroyed tens of
thousands of acres of GM canola, due to research linking bee deaths to GM
pollen. See no evil.
Dairy Cattle Replacement Prices at Auction Markets Across
the USA (p. 10):
Our markets survey finds that prices for Holstein springers
are increasing in some markets, and declining in others. Breeding-age, open
heifer prices remain strong.
No Word from USDA to Senators on Milk Powder Pricing
Scandal (p. 10):
USDA has still given no formal answer to two letters (written
in May and August 2007) by a group of U.S. Senators who asked tough questions
about the milk powder pricing scandal of the past year. A cover-up???
Judge OKs Antitrust Lawsuits to Proceed vs. DFA & Dean
Foods (p. 10):
The private antitrust lawsuit against Dairy Farmers of
America and Dean Foods has progressed to the “discovery” phase. Lawyers for
plaintiffs, who allege that DFA, Dean Foods (and other cooperatives and
individuals), conspired to deny access to fluid milk markets in the Southeast.
This one is a GO!!!
Better Ideas for the 2007 Farm Law (p. 11):
Pete Hardin details some items that ought to be in the 2007
federal Farm Law, to help create a more equitable and modern dairy industry. Not
all of these suggestions will be welcomed by the “big boys.”
U.S. Dairy Commodity Prices All Below World Market Levels
(p. 12):
Pete Hardin discusses a variety of factors in the dairy
market place and projects that, after a downturn in farm milk prices in 2007’s
fourth quarter (compared to quarter three), a combination of tight purchased
protein supplies and (sometime in 2008) demise of Monsanto’s Posilac will create
tighter U.S. milk supplies and even higher prices for U.S. dairy farmers. Beware
when U.S. prices approach global levels!
Feature Story: rbGH & Human Safety Special Section
Complex, Unknown Factors Delay Honest Dairy Forecasts (p.
1):
Intense interest in dairy focuses on questions concerning
“what’s ahead” for U.S. production and prices. The Milkweed takes the position
that there are too many uncertainties right now to make an intellectually honest
call. Shortages of hay and uncertainty about the quality/volume of 2007 crops
(especially soybeans) have us waiting until the grain combines mostly park for
the winter, before we’ll have a good grip on dairy forecasts.
August 2007 Class III Price $19.83 – August Class IV $21.87
(p. 1):
Lower whey prices helped drive down Class III (cheese) milk
prices for August 2007.
FDA: Top Priority for Changing Yogurt Standards (p. 2):
The Food and Drug Administration has listed as a top priority
completing the petition submitted by the National Yogurt Association (NYA) for
changes in standards for dairy products allowed in the manufacture of yogurt.
NYA wants to use any “milk derived ingredients” in the manufacture of yogurt.
Yuk!
New York Times Reports: “World Shortage of Milk” (p. 2):
Must be true, when the daily press reports that global milk
supplies are very, very tight!
Wall Street Analyists Hammer Dean Foods’ Stock Ratings (p.
2):
The tide is going out on Dean Foods’ stock values. Stock
prices are dropping seriously. Wall Street watchers are turning negative in
their ratings for Dean Foods’ future prospects.
Fraud: 99% of CWT’s 2007 Anhydrous Exports Fictitious (p.
3):
A highly-placed source in the CWT program has revealed that
only a tiny fraction of the anhydrous milk fat exports claimed to have been
subsidized by the “Cooperatives Working Together” program in 2007 have actually
occurred.
CWT’s 2006 Anhydrous Exports Not Substantiated (p. 3):
Same story for 2006—exports of anhydrous milk fat claimed by
CWT are far lower than total export data for that category reported by the U.S.
International Trade Commission.
SMI to Retain $.50/cwt. from Milk Checks, Will Restructure
Fluid Plants (p. 4):
Southeast Milk, Inc. (SMI) has announced it will retain
50-cents per hundred from members’ milk checks for July 2007 through June 2008,
in order to bolster the co-op’s financial reserves. SMI—Florida’s major
co-op—has been pounded by loss of in-state outlets for its raw milk by a
competing milk co-op that’s bringing in farm milk from as far away as New
Mexico.
If “Posilac” Goes Adios, 5-6% Decline in U.S. Milk Volume
Projected (p. 4):
The Milkweed details how the disappearance of Monsanto’s synthetic,
milk-stimulating cow hormone (trademarked and sold as “Posilac) would cause a
five to six percent decline in the nation’s milk supply, on a short-term basis.
USDA Slaps Aurora Organic Dairy for Multiple Violations (p.
5):
A settlement between USDA and Aurora Organic Dairy
(Platteville, CO) has resulted in penalties and cutbacks of production,
resulting from more than a dozen documented violations by Aurora of USDA’s
organic rules. But gutlessly, USDA didn’t put Aurora out of business!
USDA Creates GMO Alfalfa Stand Hot-line (p. 5):
In compliance with a judge’s ruling earlier in 2007, USDA has
created a phone “hot-line” and Web site for concerned persons to check on
whether there are stands of Monsanto’s “Roundup Ready” alfalfa planted near
them.
Monsanto’s Latest Dairy Technology: Sexed Semen—Dollars, If
Not Sense (p. 6-7):
To try to reverse shortages of U.S. dairy heifers, USDA
helped develop, and Monsanto is marketing, so-called “sexed semen”—which promise
about 85% heifers. Atop concerns about further narrowing of dairy cattle’s
genetic base, lower rates of conception and higher costs for “sexed semen” don’t
always add up, compared to normal AI.
RFID Chips Caused Malignant Tumors in Lab Rodents (p. 7):
OMIGOSH!!! Tests conducted as far back as ten years ago
showed that laboratory animals implanted with “radio frequency identification” (RFID)
chips caused cancer tumors. Government agencies ignored these warnings, and are
pushing ahead with programs to mandating RFID chips be placed in U.S. food
animals.
U.S. Whey Prices Dropping Significantly Below Global Prices
(p. 8):
Whey prices are sliding in the U.S., down into the “50s”
(cents per pound), even though global whey prices are in the “high 60s). Looks
like certain parties are trying to knock down their cheese milk costs by
attacking the whey complex price structure.
“Grassroots” Dairy Group Promoting BAD Idea: Mandatory “Son
of CWT” (p. 8):
A so-called “grassroots” dairy group based in Vermont—Dairy
Farmers Working Together”—is running around the country babbling about a dairy
policy idea that would create a $.15/cwt. deduction from dairy farmers’ milk
checks to subsidize dairy exports and kill cows—a clone of National Milk’s
(worthless as tits on a boar) “Cooperatives Working Together” program. BAD IDEA.
F&A Dairy of California, Inc. Bounces Checks to Milk
Suppliers (p. 9):
In late August, about half the checks issued to raw milk
suppliers by F&a Dairy of California, Inc. started bouncing. Will producers be
fully repaid? Will F & A be forced into bankruptcy? The plant takes in 40
trailers of milk per day—critical volume in California’s stretched-to-the-seams
milk plant picture.
California Whey Hearing Set for October 10 (p. 9):
On October 10, the California Department of Food and
Agriculture will hold a hearing on a proposal by F&A Dairy of California (see
above) to eliminate the whey price factor from Class 4-b (cheese) milk pricing.
Worry is, that if CDFA gives the cheese plants this request, that the USDA
federal milk order program will follow. Whey pricing IS a problem for cheese
plants.
National Dairy Livestock Price Report (p. 10):
We find overall price stability for dairy livestock around
the country. Some markets up, some markets down. Some holding. Where markets are
stronger, local crops are better.
R-CALF Member Reports “Cattle ID” Woes in Australia (p.
10):
Proponents of mandatory animal ID in the U.S. point to
Australia’s similar program, that’s been in effect for three years. But
“success” is not what a visited from the upstart cattle producers group—R-CALF
USA—reports from a recent visit.
“No Test” Impairs “rbGH-Free” Integrity (p. 11):
Yes, the skunks (Monsanto and friends) are on the run, but
the lack of an actual residue assay test to detect whether milk has been
produced from herds where rbGH is injected into cows looms as a critical
problem. Inability to PROVE that milk is truly “rbGH-Free” could haunt dairy’s
image with concerned consumers.
Cheese Prices Strengthen, Then Fall; NFDM Flat; Butter and
Whey Drop (p. 12):
Our dairy commodity market review finds Cheddar prices at CME
dropping a total of 16 cents per pound in the last two days before we went to
press. CME prices for Cheddar, Grade AA butter and nonfat dry milk are all
significantly below world-market prices.
Feature Story: Sky-High Global Prices = Future U.S. Prices, IF … (p. 1)
U.S. Hay/Forage Supplies Dangerously Tight, Prices Climbing
(p. 2):
In many parts of this country, 2007’s harvests of hay and
forage have been very disappointing. We’re setting up to see availability of
forage as a critical limiting factor for milk production in the coming year.
Has DFA Engaged in “Phantom” Exports of Anhydrous Milkfat?
(p. 3):
For the first five months of 2007, National Milk Producers
Federation’s “Cooperatives Working Together” program claims to have subsidized
exports of 1995 metric tons of “anhydrous milkfat” (99% pure butter oil) through
Dairy Farmers of America. But data from the U.S. International Trade Commission
for January-May 2007 shows exports of that category (under World Trade
Organization classifications) of only 145 metric tons—less than 10% of NMPF’s
alleged exports. A USITC official told The Milkweed that it would be “virtually
impossible” for so great an amount of exports to leave the country without
showing up on his agency’s records. Where’s the moo-la???
July 2007 Sets New Records: Class III – $21.38, Class IV -
$21.64 (p. 3):
The numbers tell it all.
NASS Finally Issues Mandatory Dairy Commodity Auditing
Rules (p. 4):
Only seven years after originally by Congress to do so,
USDA’s National Agricultural Statistics Service has proposed interim rules for
oversight on weekly dairy commodity prices reported to the government.
Details Scarce: NMPF Gets USDA Contract to Promote NAIS (p.
4):
USDA has handed out a contract National Milk Producers
Federation to “facilitate the registration of dairy farm, dairy calf and heifer
grower premises as part of the National Animal Identification System.” It’s all
about money!
Barley: New Look at an Old Grain (p. 5):
Writer Paris Reidhead takes a long look at one of mankind’s
oldest grains—barley—in a new light.
Former Auditor’s Lawsuits Beg Integrity of USDA’s Milk
Order Program (p. 6):
A former auditor for USDA’s Appalachian milk order (Order #5)
has filed suits in federal court, claiming, among other things, that high-level
USDA personnel have both rules of the federal milk order, as well as failed to
enforce Grade A sanitary standards on dairy plants in their federal order. The
lawsuit charges that USDA personnel overlooked maggots (fly larvae) in Grade A
milk processed at the Valley Milk, LLC plant in Strasburg, VA.
Milk Powder Price Scandal: U.S. Senators Demand Answers (p.
7):
On August 1, nine U.S. senators wrote a strong letter to
USDA’s secretary, Mike Johanns, and USDA Inspector General Phyllis Fong. These
senators wanted better answers from USDA about the conclusions regarding the
“milk powder pricing scandal” that USDA investigated earlier this year. The
senators’ letter noted USDA’s failure to even answer an earlier letter, dated
May 9, 2007.
Wall Street Pounds Dean Foods’ Stock Value (p. 7):
Wall Street is taking a dim view of Dean Foods’ stock values,
these days. Company CEO Gregg Engles is crying about a “perfect storm” of events
hurting the company’s profitability. This is the same character who, last
spring, put $39 million of company stock bonuses in his own pockets. That
bonus—paid out at the rate of $15/share—was done on $1.94 billion of borrowed
money!
CDFA Sets August 28 Hearing on Controversial Milk Powder
Pricing (p. 8):
The red-hot issue of how the California Department of Food
and Agriculture sets prices for Class 4a milk (butter-powder) will be aired out
on August 28. California’s dairy producers have lost hundreds of millions of
dollars of needed income so far in 2007, because the data CDFA used to calculate
producers’ prices relied on what appear to have been unduly low milk powder
prices provided by major cooperatives.
Consumer Milk Costs Increases Modest Over Century (p. 9):
Writer John Bunting goes back a century and explores, in
25-year increments, costs of “basics” for consumers, including a gallon of milk,
a gallon of gasoline, a new car, and a house. He also notes average income. Milk
prices have climbed far less than any other items surveyed.
GAO Questions CME Cheese Market at Pittsburgh FMMO Hearing
(p. 9):
An employee of the Government Accountability Office (GAO)
entered his agency’s recent report on dairy commodity pricing at the ongoing
USDA federal milk order hearing in Pittsburgh, PA.
National Dairy Livestock Price Report (p. 10):
Some markets are holding, some markets are falling backwards.
Looks like availability of forage may be tempering buyers’ interest in dairy
livestock. We’re watching this one closely.
Collin Peterson Short-Circuits Dairy “Cost of Production”
Study (p. 10):
Collin Peterson, chairman of the house agriculture committee,
recently mothballed an attempt by several congressional representatives to study
dairy farm “cost of production.” Peterson operates at the behest of the big
cooperatives.
July Meeting May Unveil USDA/FSA Loan Scandals (p. 11):
Pete Hardin explains how a series of meetings in Washington,
D.C. during July 16-17 may start to unravel one of USDA’s biggest
scandals—unfair persecution off farmers who’ve borrowed from USDA’s Farm
Services Agency. Would you believe that FSA loan officers get a commission on
recovered assets from defaulted FSA borrowers???
Roots of Milk Powder Scandal: Lack of Competition (p. 11):
Dairy’s shortcomings all boil down to a lack of competition.
USDA must end its love-fest with dairy co-ops and enforce the laws of the land,
before things will get better for dairy farmers and consumers.
Butter Prices Poised to Rise, Whey Decline Likely (p. 12):
Butter is the next dairy commodity to “take off” price-wise.
Right now, the price of commodity butter in western Europe is roughly $1/lb.
higher than the Grade AA butter price at the Chicago Mercantile Exchange. Whey
prices are weakening.
Drought Covers Most of U.S., Future Food Supplies Uncertain
(p. 1):
Global supplies of wheat and corn were scarce,
heading into the growing-harvest season in the Northern Hemisphere. This was the
year that the world needed cooperation from Mother Nature for a good grain
harvest—to boost reserves. Unduly dry weather encompasses most of the U.S.
(except for parts of Texas, Kansas and Oklahoma). This nation’s food stability
is threatened. We need to wait and watch crop/weather events for the next six to
eight weeks to have a better handle on futures supplies and costs for a wide
variety of food.
Huge Antitrust Lawsuits Filed Against DFA, Dean Foods and
Others (p. 2):
Two class action lawsuits were filed on July 5, 2007,
alleging violations of the Sherman Act. Plaintiffs are groups of present and
former dairy farmers in the Southeast. Defendants are Dairy Farmers of America,
Dean Foods, National Dairy Holdings, two “marketing agencies”—Southern Marketing
Agency and Dairy Marketing Services, as well as a variety of individuals named
directly and cited as co-conspirators. The complaints are available on The
Milkweed’s Web site: www.themilkweed.com.
Click the “Antitrust Lawsuits” bar on the home page.
June 2006 Cheese and Butter-Powder Milk Prices Top $20/cwt.
(p. 2):
June 2007 saw both the Class III (cheese) and Class IV
(butter-powder) prices in the federal milk order system to above $20/cwt.
How Can Dean Foods’ Repay Loans, Interest from Profits? (p.
3):
Paying off all that debt (and interest) is going to challenge
Dean Foods. For the period April 2007 through March 2008, Dean Foods is obliged
to pay down roughly $90 million per month in principal … plus interest. The big,
$4.8 billion chunk of debt that Dean Foods bit off earlier in 2007, that
included $1.94 BILLION in payouts as a $15/share stockholder bonus, will be hard
to pay off from operations.
GAO Study on CME Admits Potential for Price Manipulation
(p. 3):
The General Accountability Office has recently completed a
study on dairy commodity cash trading at the Chicago Mercantile Exchange.
Conclusion: current practices leave the door open for price manipulation.
Imports from China Threaten Health and Lives in the U.S.
(p. 4):
Toothpaste, tires, foods and food ingredients … what can you
say? Many dangerous foods and consumer products are entering the U.S. from
China. John Bunting puts his unique twist on these current events.
What is Protein? (p. 5):
We face a global shortage of human-quality, dietary proteins.
Writer Paris Reidhead goes back to square one and discusses the fundamental
question: “What is Protein?” Paris covers a lot of basic nutrition and details
how the proteins from the dairy cow are wonderfully complete and nutritious.
Feature Story - “Whitewash”: USDA Milk
Powder Price Review (pages 6-8):
The Milkweed performs a proctology on the recent pair of
reports by USDA that reviewed the milk powder pricing scandal. Bottom line—USDA
cannot be trusted to police itself or the dairy cooperative sector.
Read the story.
U.N. OECD Report Projects High Ag Prices for Next Decade
(p. 9):
A United Nations food agency branch has just surveyed global
food economic trends and projects that “high” food commodity prices could last
at least for the next decade.
Dairy Cattle Replacement Prices at Auction Markets Across
the USA (p. 10):
Most prices for healthy animals are up, up and up. Strong
demand for sound dairy animals of all ages is witnessed across the country.
Dairy Producers—Holler Long & Loud About USDA’s Milk Powder
“Whitewash” (p. 11):
Pete Hardin explains how dairy farmers must make loud noise
to their U.S. Senators and Representatives, in order to get a legislative
investigation of the “Milk Powder Price” scandal. Hardin details what was wrong
with the recent USDA “whitewashes” of milk powder pricing errors. USDA cannot be
trusted to investigate itself.
Long-Term Strength, Growth for Dairy Commodity Prices (p.
12):
The U.S. dairy commodity outlook foresees tightening supplies
of fluid milk (especially in the Southeast) and severe scarcity of nonfat dry
milk supplies in the second half of 2007. Get used to scarcity and high prices.
CME Cheddar Prices Soar Close to $2/lb. Mark (p. 1):
CME Cheddar prices have climbed to within spittin’ distance
of the $2.00/lb. price level, at press time. Cheddar is probably overpriced
somewhat now … but prices will probably be higher in the fall.
6/1/07 Commodity Prices Lock $20 Class III/IV Prices (p.
1):
The array of dairy commodity prices—taken after CME trading
on June 1—will yield both $20/cwt. milk for Class III (cheese) and Class IV
(butter-powder) milk in USDA’s pricing formulae for the federal milk orders.
Three European Nations Tearing Up GM Canola Fields (p. 2):
Because of findings by German research scientists linking
honey bee mortality problems to pollen from genetically-modified canola, three
European nations are tearing up “mistakenly” planted stands of GM-canola. Those
nations are England, France, and Sweden.
Florida Milk “War” at Standoff for Now (p. 2):
Florida’s predominant dairy co-op (Southeast Milk, Inc.) lost
the majority of the raw milk volume it was selling to Dean Foods’ fluid plant at
Orlando. SMI has been replaced by the Southern Marketing Agency (a co-op group
spearheaded by Lone Star and Maryland & Virginia). The real challenge will be
for the new suppliers to meet its supply responsibilities, once milk turns tight
in early July.
Scarce Water Supplies to Impact California Farm
Productivity (p. 3):
Virtually any measure of California’s water
inventories—except reservoir capacity—are way below normal. “Whatcha ya gonna do
when the well runs dry?”
May 2007 Class III Price $17.60—May Class IV Price $18.48
(p. 3):
And there’s more, perhaps much more, to come.
Center for Food Safety Follows up on Roundup Ready Alfalfa
Injunction (p. 4):
Restrictive orders have been placed on the marketers of
Roundup Ready (genetically-modified) alfalfa. This crop is one too many in the
food biotech compost pile.
DFA Still Producing & Marketing Imitation Cheese Food
Garbage!!! (p. 5):
We’re rediscovered “Sandwich-Mate ‘Singles’”—an imitation
pasteurized process cheese food marketed by Borden (a wholly-owned subsidiary of
Dairy Farmers of America).
Dean Foods: High Milk & Energy Costs Threaten Profits (p.
5):
Is the nation’s largest fluid milk processor about to hit
tough times??? Dean Foods’ projected milk costs in the “mid-teens” for 2007. The
second half will probably see fluid milk costs around $25/cwt. for Dean Foods.
That’ll raise costs and lower demand. Dean Foods’ recent debt package has the
company due to pay back over $1 BILLION in the next year—that’s about $85
million per month—higher than Dean Foods’ historic profits. The yuppies are
about to learn about the milk business.
Feature Story #1 - Producer Losses Nearly
$1 Billion, Head(s) to Roll at USDA (p. 6)
The USDA milk powder price scandal is growing
bigger. Unofficial sources indicate that the total losses to dairy farmers whose
milk is priced by USDA’s federal milk marketing order (FMMO) program will total
close to one billion dollars. Read all about it
here.
USDA: No Public Details on Milk Powder Pricing Scandal (p.
6):
Officially, USDA officials are saying virtually nothing about
the milk powder pricing scandal—as they assess damages.
Feature Story #2 - Milk Powder Price
Scandal: Show Dairy Farmers the Money (p. 7):
Step #1 in getting to the bottom of the massive milk powder
price scandal is to determine the approximate size of the damages to U.S. dairy
producers’ milk incomes. USDA is at work on that portion of the clean-up. Read
all about it here.
CA Powder Price Trails DairyAmerica “Spot” by $1.00/lb. (p.
7):
With high grain and energy costs, things aren’t going to get
much better financially for California dairy producers until their state
department of agriculture gets modern and includes an honest value for the price
of milk processed into butter-powder. Right now, the milk powder price CDFA uses
for setting producers’ milk prices is almost exactly $1/lb. LOWER than the
DairyAmerica “spot” price for milk powder.
“Peak Oil” Threatens Foundation of U.S. Farm/Food System
(p. 8):
At some point, global oil supplies will peak … as demand
continues climbing. The implications of “Peak Oil” (and beyond) to the U.S. food
system—production, processing, transportation—are staggering.
House Ag Proposal Would Deny State/Local Control of GMOs
(p. 9):
A provision snuck into proposed farm bill language by the
House Subcommittee on Livestock, Dairy and Poultry specifies that no state,
county or municipal governments could regulate agricultural products inspected
and passed by the U.S. Secretary of Agriculture, or specified by the Secretary
to have “non-regulated status.” Worries are that such stealth language will be
used to block local efforts to oversee genetically-modified foods.
House Farm Bill’s Dairy Proposals: Same Old “Stuff” (p.
10):
Rep. Collin Peterson (D-MN) has crafted dairy provisions for
the 2007 farm bill that basically refry the same old “stuff” as future dairy
policy.
Protein Integrity: Little Compromise (p. 11):
Pete Hardin discusses the Chinese-sourced, “phony protein”
found in dog and cat foods … and takes the logic of “cheaper ingredients”
straight to your kitchen table! Big-city newspaper reporters don’t have to
travel to China to find dangerous, illegal sources of protein in the HUMAN diet.
Hardin also wonders if the intense, heat-treatment of long-life beverage milk
renders the proteins in that product less biologically available.
“Too High” Cheese Prices May Stick; Powder Sky-High (p.
12):
In our review of current dairy commodity prices and trends,
Cheddar cheese (around $2/lb/.) looks a bit high. But U.S. milk powder prices
are at world market prices—and keep rising.
Too Dry … Too Wet: Weather Challenges U.S. Agriculture (p.
1)
A lot of U.S. farm country is either too wet or
too dry. Weather challenges to the 2007 grain harvest threaten global food
stability.
Feature Story: “$20-Something/Cwt.” Milk Prices Ahead! (p. 1)
Milk Marketing Armageddon in the Sunshine State? SMI Out as
Dean’s Milk Supplier at Orlando, June 1 (p. 2):
Dean Foods has notified Southeast Milk, Inc. that,
as of June 1, 2007, the Florida-based co-op will not supply raw milk to the
massive Dean Foods plant in Orlando. SMA—a group of Southeast co-ops—proposes to
take over supplying the Orlando plant. SMA will have to bring in milk from as
far away as New Mexico (1500 miles). Dean Foods’ is acting in tandem with Dairy
Farmers of America—like a pair of Mafia thugs.
Foremost Farms Lost $12.5 million in 2006; Indicators (p.
3):
Here are some of the 2006 financial indicators
from Foremost Farms’ belatedly released 2006 audit (compared to 2005 data):
interest costs (+47%), borrowings (+$16.4 million), packaged fluid milk sales
(-11%), plants/equipment 67% depreciated, repeated violations of minimum debt
ratios with lender, IRS auditing 2002-2005 financial reports, etc. Ed Brooks,
Foremost’s board chairman (and an ex-banker) says, “I don’t think that members
have to be seriously worried.”
April 2007 Class III Price $16.09 (p. 3):
Rising cheese, whey and butter prices moved the
Class III price for April 2007--up to $16.09/cwt. in USDA’s milk order system.
Much more price improvement is built into the pricing system, because of rising
dairy commodity prices.
State of Wisconsin Backs Off May 1 Deadline for Dairy Farm
ID (p. 4):
With 500-700 dairy producers having not registered their farm’s under
mandatory Premises ID, Wisconsin’s agriculture department failed to go through
with its threat to disallow sales of milk from those farms on May 1. More than
100 protesters jammed the board room of at the state agriculture building on
April 25, at a hearing on this issue. Dairy farmer Mark Brothen, of Viroqua,
Wisconsin, gave compelling testimony in which he cited the November 8, 2004
Federal Register, which had published rules for the federal National Animal
Identification System (NAIS—which starts with Premises ID). Brothen showed how
federal rules list the program as “voluntary” and those rules supercede any
related state rules.
New Global Realities Propelling Dairy Prices (p. 5):
Many global factors have combined to push up
demand and prices for dairy proteins. Those factors include: global shortages of
dairy proteins, China’s growing demand, a weaker U.S. dollar, global grain
shortages. Meanwhile, U.S. dairy marketers have “missed the boat” in perceiving
that global dairy exports shifted to a “demand economy” in late 2005.
USDA Admits Serious Milk Powder Pricing Scandal! (p. 6-7):
The USDA milk powder pricing scandal—first
detailed by The Milkweed—has blown sky-high. In mid-April, USDA admitted that
erroneous data for nonfat dry milk sales had been reported to the gov’t by “one
plant” (hint: DairyAmerica—the co-op powder cartel). USDA has embarked on a
review of the past year’s weekly milk powder sales/price data reported to it.
Meanwhile, 11 U.S. senators have written USDA Secretary Mike Johanns, demanding
many answers to “what did USDA know and when did they know it”. And both the
National Farmers Union and National Milk Producers Federation have written USDA,
demanding financial compensation for USDA under “Section 32” authority. This
article details the day-by-day key events of the past month.
U.S. Senators Demand Answers from USDA About Milk Powder
Price Scandal (p. 7):
On May 9, eleven U.S. senators sent a letter to
USDA, demanding detailed information about events surrounding misreporting of
milk powder prices during much of the past year. Powerful letter—reprinted in
this issue.
Beware of NMPF in Milk Powder Scandal (p. 7):
NMPF—the dairy co-op lobby—has joined on, asking
USDA for compensation to dairy producers for errors in calculating farm milk
prices by USDA’s milk order program. But at a DFA meeting in California in early
May, word from DFA was that NMPF will seek to “make the crime legal” by
proposing changes in USDA’s weekly commodity price reporting rules to make
long-term export prices legal.
Organic Producers Facing Downwards Pressure from Buyers (p.
8):
Pressures are on organic dairy producers in the
Midwest and Northeast to sign annual contracts for lower milk prices in the year
ahead. More organic milk—primarily from the Southwest and West—is coming on
line, boosting supply. The Milkweed suggests a “base + ‘riser’” formula for
organic producers’ annual contracts.
Cornell Food Scientist Discounts PI Count Test’s Importance
(p. 8):
Dr. Kathryn Boor, food scientist at Cornell
University, has prepared a one-page memorandum that reviews the lack of science
in certain processors’ emphasis about “Preliminary Incubation Counts” being used
to jeopardize dairy farmers’ markets. We reprint Dr. Boor’s memo in full.
New German Research: GM Pollen Compounds Honeybee Trauma
(p. 9):
What’s wrong with our honeybees? Writer Paris
Reidhead details research from Germany that shows how exposure to pollen from
Genetically-Modified (GM) plants harms honeybees. This subject deserves to be
front-page on the New York Times!
FMMO Whey Costs Drain Cheese Plants’ Profits (p. 9):
We explain how rising whey prices are draining more money
from cheese plants. In fact, whey prices are threatening the stability of cheese
plants whose milk is priced by USDA’s federal milk marketing order system.
National Dairy Cattle Replacement Prices (p. 10):
Many markets are showing big gains in dairy
livestock—especially springing heifers. One market averaged $2215 per head for
700-800 springers. Another market showed gains of $400-600 per head in prices
for springers between its early April and early May auctions! Only in The
Milkweed!
DFA Plans to Sell Off or Joint-Venture Cheese Plants (p.
10):
DFA’s closing of its Lovington, New Mexico cheese plant is just the beginning.
The co-op hopes to close, sell or joint-venture all of its cheese plants during
2007. Corona, California looks like a “$100 million bath”.
DO NOT Contract Milk or Gamble in “Future/Options/Puts”:
Upwards Price Potential Too Great to Miss Out On! (p. 10):
The Milkweed strongly advises dairy farmers to avoid any
fixed-price milk deals or “gambling” on milk prices. There is simply too much
upwards potential in the market right now to settle for current prices. In fact,
we offer exact advise on how to respond to milk commodity brokers trying to sell
these items.
Gov’t Owes Compensation for Milk Powder Scandal (p. 11):
USDA is now totaling the damages in an unaudited review of
the past year’s milk powder price reporting to NASS by DairyAmerica. Pete Hardin
argues that USDA owes big-time financial damages to dairy farmers whose milk
prices were understated by erroneous milk powder price reports … that the
government should have known were wrong!
DairyAmerica’s Spot NFDM Prices for 2007 (p. 11):
From January 1 to May 4, 2007, DairyAmerica raised “spot”
prices for nonfat dry milk from $1.20/lb. to $2.25/lb. We detail each price
increase.
Antitrust Lawsuit vs. DFA Soon (p. 11):
As a famous man once said, “Ho! Ho! Ho!”
Dairy Commodities Continue to Shrink (p. 12):
Dairy commodity inventories are shrinking and prices are
rising. We’re looking at scarce dairy commodities for much of 2007 and
beyond—along with very high prices.
Projected 15% Gain in ’07 Corn Acreage Eases Prices, BUT …
(p. 1):
Corn futures at the Chicago Board of Trade have eased off
somewhat, following USDA’s late March announcement that intended corn plantings
will boost acreage 15% this year, compared to 2006. But don’t take this year’s
corn crop for granted until it’s in the bin.
Dean Foods Stock Drops $15/Share after $15/Share Pay-Out
(p. 1):
Following pay-out of the special, $15/share
dividend by Dean Foods, the company’s stock value at the New York Stock Exchange
fell $15/share. Dean Foods borrowed $1.9 Billion to make that pay-out. Damn
greedy yuppies.
Safe/Not Safe? Milk Hormone Rumble Intensifies (p. 2):
Arguing about the “safety” of milk from cows
injected with Monsanto’s synthetic growth hormone gets louder. On one side,
activists have petitioned FDA to immediately suspend approval of sale of
Posilac®. On the other hand, Monsanto and its “allies” have asked both FDA and
the Federal Trade Commission to disallow dairy marketers’ differential of dairy
products, based upon whether they contain milk from Posilac-injected cows.
Round 3: NY Assemblyman Aubertine vs. MPCs (p. 2):
Once again, NYS Assemblyman Darrel Aubertine has introduced
legislation that would curb use of Milk Protein Concentrates, caseins and
caseinates from use in dairy products in New York State. Twice before, Aubertine
has gained unanimous approval for similar bills in the NYS Senate & Assembly.
Once, the Republican governor vetoed it. Second time ‘round, NYS Ag & Markets
has refused to implement the law.
Agri-Mark Claims $2.5 Mil. “Profit” Despite $9.7 Mil. of
Deducts (p. 3):
Agri-Mark, the struggling dairy co-op in New
England, has set some new “low” for co-op accounting—claiming profits in a year
when the co-op drained nearly $10 million from members’ milk checks to cover
operating losses.
No Milk Sales After May 1 by WI Farms Without Premises ID
(p. 4):
After a long time, the issue of mandatory farm
premises registration in Wisconsin is finally heating up. Critics pounded the
Wisconsin ag dep’t for its policy of disallowing any sales of milk by dairy
producers who haven’t registered their farm premises after May 1. Despite this
pounding, looks like the state ag bureaucrats are intent to push ahead with the
plan.
DOJ Antitrust Official Weasels Dairy Antitrust Answer in
Hearing (p. 4):
On March 7, Thomas Barnett, Assistant Attorney
General for the Antitrust Division at DOJ, answered a question from Wisconsin
Senator Herbert Kohl about the dairy antitrust investigation by DOJ. Barnett
stated that investigation continued. The Milkweed contends that Mr. Barnett
totally misrepresented the truth.
Federal Judge: USDA Ignored Environmental Oversight for GM
Alfalfa (p. 5):
A federal judge in San Francisco, California ruled
on Feb. 12, 2007 that USDA had failed to conduct proper environmental oversight
in its approval of Monsanto’s genetically-modified alfalfa. Writer Paris
Reidhead takes a long look at the surrounding issues.
Feature Story: California Producers Scared:
Milk Prices Lag Behind Soaring Costs (p. 6)
California dairy producers, who generally swaggered through
dairy price downturns over the past two decades, are quickly changing their
attitudes after feed costs, milk prices and weather all started going in the
wrong direction last year. Major screw-ups by the state milk pricing bureaucracy
have only made these problems worse in recent months. Read this month’s feature
story on how the California dairy paradigm has
changed.
Demand USDA Investigate DairyAmerica for Undue Price
Enhancement (p. 7):
This article details the enforcement powers held
by the USDA Secretary to bring actions against cooperatives that unduly enhance
the price of an agricultural commodity. We contend that DairyAmerica, the milk
powder “cartel”, has unduly raised nonfat dry milk prices to domestic
processors, and should be called on the carpet. IMPORTANT!
Federal Judge Halts Sale, Planting of GM “Roundup Ready”
Alfalfa (p. 8):
In mid-March, the federal judge in San Francisco
issued a ruling, blocking sale and planting of “Roundup Ready” alfalfa, a
genetically-modified variety. This ruling follows a February 2007 decision that
USDA had not conducted appropriate environmental or economic analyses on
Monsanto’s GM alfalfa.
Milk Powder Update (p. 8):
Tidbits from the milk powder trade.
Dairy Cattle Replacement Prices at Auction Markets Across
the USA (p. 10):
Some of the poop is still steaming in the ring from these
up-to-date sales reports of dairy livestock prices from across the U.S. HOT
MARKET: Brush, Colorado, where the top 288 springing Holstein heifers averaged
$2005 on March 5! 800 springers were sold that day.
Jan-Feb. 2007 Northeast Milk Output Down Nearly 8% (p. 10):
Bad crops and bad milk prices are combining to
dramatically constrict milk flow in the Northeast.
What’s Right for the ’07 Farm Bill? (p. 11):
Pete Hardin explains what he thinks ought to be in the
federal government’s new farm laws. Hardin reproduces the National Farmers
Union’s recommended dairy plank as an excellent basis for dairy policy.
Entire Dairy/Ag Commodity Picture Tightening (p. 12):
Production and inventories of virtually all dairy
commodities is tightening. Except for whey, all prices are strengthening. Milk
and dairy commodities will be impossibly tight in the second half of 2007, in
our analysis.
Feature story: USDA’s
Milk-Pricing Fails: Producers Lose Half a Billion Dollars (p. 1)
Our March feature story on
the “Missing Milk Powder Millions” scandal is a MUST READ about the systemic
USDA bureaucratic failures and big co-op bungling that has cost U.S. milk
producers about half a BILLION dollars of legitimate, direly-needed income on
milk marketing under federal milk marketing orders in recent months.
Dean Foods to Pay $15/share Bonus (Using Borrowed Funds)
(p. 2):
Dean Foods has announced it will pay shareholders a one-time,
$15/share dividend this spring. The firm will borrow $1.93 BILLION to pay out
the $15/share bonus. President/CEO Gregg Engles pocketed $39 million in this
swift move.
Illegal Yogurt Imports from 13 Nations Entered U.S. in 2006
(p. 2):
Data from the Department of Commerce shows that 15 nations
exported yogurt to the U.S. last year. But only two nations’ have facilities
that have been inspected under U.S. Grade A milk sanitary codes. The rest of
those imports were all illegal.
Feb. 2007 Class III: $14.18 (p. 2):
USDA’s price for cheese milk priced through the federal milk
order program rose $.62/cwt. last month, to $14.18/cwt.
Federal Judge in Ohio OKs Make-Allowance Increase (p. 3):
Legal efforts to block imposition of higher “make-allowances”
for farm milk processed into Class III (cheese) and Class IV (butter-powder) in
the federal milk order system were defeated.
Farm Milk Price Surge Starting (p. 3):
At long last, signs are pointing towards a significant
upwards movement in farm milk prices, in our analysis.
UCONN: Retailers Profit More (per Gallon) than Dairy
Farmers Paid (p. 4):
An analysis of farm-to-consumer price margins for November
2006 by the insightful folks at the University of Connecticut’s Food Marketing
Policy Center determined that net profits for supermarkets’ sale of a gallon of
milk averaged higher than what dairy farmers were paid for that same gallon of
milk.
rbGH (Posilac) Battle Intensified; Monsanto Scared (p. 4):
As more and more U.S. dairy processors are demanding
“rbGH-Free” raw milk supplies, this ugly controversy is headed towards end-game.
Monsanto employees are worried that at some point in the future, the company may
not be able to efficiently manufacture and distribute rbGH.
NDB Chairman Les Hardesty Erroneously Boasts Exports’ Price
Impact (p. 7):
Chairman of the National Dairy Board (and DFA director) Les
Hardesty recently proclaimed that big milk powder exports are boosting dairy
farmers’ milk checks. That’s a lie.
NFFC Files Milk Powder Pricing Complaint with USDA/OIG (p.
8)
In late February, the National Family Farm Coalition handed a
formal complaint, alleging improper reporting of milk powder sale data, to
USDA’s National Agricultural Statistics Service (NASS) to USDA’s Office of the
Inspector General.
Testimony of Bryan Wolfe on Feb. 28, 2007 (p. 9):
We reprint the powerful testimony of Bryan Wolfe (an Ohio
dairy farmer) at the recent USDA national milk order hearing in Strongsville,
OH. Way to go, Bryan!
Beef Import Letter Triggers R-CALF Shakeup (p. 9):
The Ranchers -Cattlemen’s Legal Action Fund United
Stockgrowers Association purged its national president—a good sign. Casualties
include Texas cattleman Chuck Kiker, who had strayed from the organization’s
historic opposition to imports of beef from Canada. Joining Kiker in a hasty
exit was Bill Hawkes, a long-term Bush administration high-level USDA official
and R-CALF advisor.
Dean Foods to Buy Friendship Dairies (NY) (p. 9):
Pending final approval of government agencies, Dean Foods
will pay about $130 million to acquire Friendship Dairies of Jericho, NY.
Dairy Cattle Replacement Prices at Auction Markets Across
the USDA (p. 10):
Holy mackeral! On March 1, the top 113 Holstein springers at
the Brush, Colorado auction averaged $2115!
WI Organics “Hangs On” (p. 10):
The Wisconsin agriculture department has disallowed Wisconsin
Organics from buying any producer milk directly, as the company tries to work
off back-due milk obligations. Wisconsin Organics is buying some milk from
outside providers.
The Milk Powder Mess: Aftermath (p. 11):
Pete Hardin tries to make sense of the “Missing Milk Powder
Millions” foolishness. First of all, he editorializes, USDA should indemnify
producers from lost milk income. He also suggests investigation DairyAmerica
under Section II of the Capper-Volstead Act. If wrongdoing has occurred, Hardin
believes that DairyAmerica should be put out of business, permanently.
From Corn & Hay to Milk Powder: Tight (p. 12):
Reporter John Bunting reviews a wide range of commodities
integral to milk production and pricing. Most of the basics are tight in supply.
Feature Story: By Dec. 31, 2007, Global
Corn Reserves Could be Only 2.5 Days’ Use (p. 1):
Starkly stated, if projections from USDA’s Foreign
Agriculture Service on global corn production and demand for 2007 prove
accurate, the world faces close to the lowest carry-over of corn supplies in
modern history. Read John Bunting’s story about this emerging concern
here.
January 2007 Class III $13.56 (p. 1):
The federal milk order Class III (cheese) milk price for
January was $13.56. Sky-high whey prices are driving up the cheese milk price.
Ben Yale Sues to Block New FMMO “Make-Allowances” (p. 2):
Ohio attorney Ben Yale has filed actions against USDA’s
attempts to implement the new “make-allowances” in the federal milk order
program. Yale’s challenges focuses, in part, on the government’s failure to
include consideration of section 608 (c) 18—price relief for dairy farmers due
to high grain prices.
Altria Group to Spin-Off Kraft Foods (p. 2):
Kraft’s corporate parent will send the large, but
poorly-performing stepchild out into the cold world, in March.
Huge Die-Offs of Honey Bees Reported (p. 2):
No reason known. Massive kills of honey bee colonies have
occurred in fall 2006. If this trend continues, major implications for human and
livestock food crops could be felt.
California Dairies, Inc. Bans rbGH, Effective August 1,
2007 (p. 3):
The nation’s second-largest dairy co-op—California
Dairies, Inc.—announced it would not accept milk from herds whose cows are
injected with “Posilac”—Monsanto’s milk-stimulating, synthetic hormone. CDI
members produce eight percent of the nation’s milk and 45% of California’s milk.
Organic Milk Demand Softens in
Midwest, West (p. 4):
Worries about large volumes of organic milk coming on
line later in 2007 are causing Midwest organic milk marketers to be skeptical
about taking on extra supplies right now. The big volume of anticipated
conversions is primarily from western and southwestern states.
Monsanto Data Shows Posilac-Injected Cows Need More Energy
Per Unit of Milk (p. 4):
Dairy cow ration data from Monsanto details how
Posilac-injected cows need more units of energy in their daily diet for all milk
produced. High corn prices mean that higher-producing, Posilac-injected cows’
net profitability is significantly reduced.
Lawyer Tells Midwest Co-ops: How to NOT Pay Back Farmers
Equities! (p. 5):
Joel Dahlgren, a Minneapolis lawyer with many major clients
in the farm cooperative field, sent out a letter in September 2005, seeking
money from farm co-ops to challenge IRS rules penalizing write-downs of members’
equities and retained earnings. Not so behind the scenes, ag co-op leaders are
trying to figure out how not to pay back farmers’ equities.
Global Dairy Price Confusion: U.S. Commodity Prices
Sometimes Lower (p. 6-7):
John Bunting details global dairy price data, showing how for
key items like nonfat dry milk and Cheddar cheese, global market prices are
higher than U.S. cash dairy markets. Why?
USDA Won’t Release Order 30 FMMO Vote on “Make-Allowances”
(p. 8):
Details of the referendum among co-ops taken late last year
to reauthorize the Upper Midwest milk order cannot be made public. USDA refuses.
But the Secretary of Agriculture does have the power to release the numbers.
Déjà vu … Seems like 1972-74 All Over Again (p. 8):
Economic and political events in recent months look eerily
parallel to the “bad old days” of 1972-74, which inflation hit the price of
everything. Watch food prices spiral upwards!
Ed Slusarczyk: 84 Years Young (p. 9):
Noted farm broadcaster Ed Slusarczyk of Remsen, New York
passed away in late December, leaving a rich legacy.
USDA Calls New “Make-Allowance” Hearing (p. 9):
On February 26, 2007, in Strongsville, OH, USDA will revive
the long-running, absurd “make-allowance” hearing. Some dozen and a half
proposals are being aired out. Lawyers win!
Dairy Cattle Replacement Prices (p. 10):
Prices for milk cows, bred heifers, and calves are down in
many parts of the country. Prices for open heifers are holding in several
markets.
Straight Talk (p. 11):
Pete Hardin takes several pokes, including: Corn-based
ethanol is dumb; dairy has a devastating price emergency; and he proposes a
$5.00/cwt. emergency Class 1 surcharge to cover farmers’ higher grain costs.
Dairy Commodity Outlook: Lull Before the Storm (p. 12):
Dairy commodity prices are low, relative to what’s coming
in the months ahead.
DFA Foresees Big Milk Prices, Big Reblends for Southwest
(p. 1):
A confidential DFA milk price forecast, prepared on Jan. 2,
2007, was secreted to The Milkweed. Internally, DFA’s senior management projects
the “blend price” in the Southwest milk order (F.O. 126) to peak near $18/cwt.
in October 2007. BUT for Southwest dairy producers, DFA sees “reblends”
(marketing costs) averaging $.80/cwt. for June-Dec. 2007. That’s DFA …
projecting continued inability to recover costs of marketing milk from the
buyers for a whole year in advance!
Feature Story: Special Edition on
Dairy Antitrust (12 pages)
Don’t miss Editor
Pete Hardin’s blockbuster special edition
describing how the nation’s biggest dairy co-op (DFA—the
Enron of the dairy industry) and fluid milk processor (Dean Foods) increasingly
dominate the U.S. dairy business at the expense of dairy farmers and consumers.
Best Guesses: What’s Ahead for Dairy in 2007?? (p. 1):
We foresee higher milk prices, domestic and global dairy
product shortages, higher grain prices … all in all, a crazy year.
“Cryan Time Again”—USDA 12/11/06 National Class I/II
Hearing (p. 2):
One more time, NMPF dairy economist Roger Cryan cried the
blues (off key) on the witness stand at a federal milk order hearing. NMPF’s
proposal to raise Class I milk prices by $.77/cwt. does not have widespread
support—even among some regional dairy farmer groups.
Whey Prices Spike, Driving Up Class III (p. 3):
John Bunting analyzes how the global dairy protein shortage
is driving up whey products’ prices, which in turn are propelling the Class III
(cheese) milk prices in federal milk orders. Whey exports are up. Whey
production is down. Supplies are tight.
Higher U.S. Prostate Cancer Incidents (Males, 60 and Over)
May Parallel Increased rbGH Usage (p. 4-5):
Investigative reporter Paris Reidhead explores annual data on
prostate cancer in U.S. males (ages 60+) from 1980 through 2003, and discusses
the increase in that type of cancer with use of recombinant bovine growth
hormone (rbGH) in U.S. dairy cows, which started commercially in 1994. Needed:
More research and statistical analysis.
2006 NYS Producer Mailbox Prices: Marketing Costs Way Up
(p. 5):
John Bunting analyzes how milk marketing costs have eaten up
an increased portion of New York State dairy farmers’ milk checks during 2006.
Global Corn Stocks Scarce, Ethanol Demand Rising Fast (p.
6):
Carry-over global stocks of corn, measured on a per-capita
basis, ended 2006 at their lowest-ever level. If there are any serious weather
disruptions of global grain prices in 2007, the table is set for sky-high corn
(and grain) prices for the next several years. Corn is seeking new price
plateaus, and that factor will drive food costs through the chain from farm to
consumer.
Dairy Cattle Livestock Prices (p. 7):
Only in The Milkweed … national dairy livestock
pricing trends. Buyers are looking for breeding age heifers and short-bred
heifers—as they project big milk price increases in the second half of 2007.
DairyAmerica “Allocates” 2007 Milk Powder Supplies to
Buyers (p. 7):
DairyAmerica—the nation’s milk powder cartel—finally issued
2007 allocations to buyers in mid-December. At best, buyers got 50% allocations
for 2007 (based upon 2006) sales. And three days after DairyAmerica issued those
allocations, some buyers were told those allocations had been cut another 50%.
Some buyers will get zero milk powder allocations in 2007. DairyAmerica has
boosted surcharges (energy surcharges, pallet costs) to buyers, while also
shifting to a “spot pricing” basis for 2007 sales. Where is all the money going?
Certainly, not to the dairy farmer.
Starbucks, Safeway Trending Towards “rbGH-Free” (p. 8):
Two of the biggest retailers in the nation—Starbucks and
Safeway—are moving incrementally towards “rbGH-Free” milk supplies. Over 2000
company-owned Starbucks stores are now rbGH-Free. And Safeway has gone to
“rbGH-Free” store-brand fluid milk in all its stores in the Pacific Northwest.
Bravo!
No Move (Yet) by DOJ on Proposed Dairy
Antitrust Indictments (p. 1):
Proposed indictments of some of dairy’s biggest
players—authored by career professionals at the Antitrust Division of the U.S.
Department of Justice—lie on the desk of DOJ’s higher-ups. Will DOJ move on
these recommendations … or let politics continue to interfere with enforcing
antitrust laws in dairy, from the farm to the consumer?
USDA Holds Another National Milk
Order Hearing (p. 1):
Here they go again. USDA held another national milk order
hearing in Pittsburgh, PA, starting on December 11, to air a proposal by
National Milk Producers Federation to boost Class I (fluid) milk prices by
$.73/cwt.
Private Law Firm Investigating Dairy
Antitrust (p. 1):
A huge antitrust law firm is nosing deep into dairy antitrust
violations.
Democrats Will Control U.S. Senate/House:
Ag/Dairy Implications? (p. 2):
The November
elections shifted control of both legislative houses in Washington, D.C. to the
Democrats. In January, Midwesterners will control key agriculture and
appropriations chairmanships. The Senate ag committee will hold several new,
fresh faces.
Nonfat Dry Milk “Fundamentals” Deny
Reality (p. 3):
John Bunting
explores the crazy situation in milk powder prices, where global prices are
higher than CME prices, and CME prices are below “spot” prices.
Fonterra Sees Chile as Bridge for
Exporting to U.S. (p. 3):
New Zealand sees
the opportunity to move more dairy products into the U.S., through Fonterra’s
purchase of a share of dairy products firm in Chile. Fonterra believes that it
can move NZ dairy products into the U.S., unencumbered by any trade
restrictions, through a “free trade” deal involving the U.S. and Chile.
$/Membership Losses Put Foremost Farms on
“Watch List” (p. 4):
Foremost Farms is
losing large amounts of money and members in 2006. Tightening up efficiencies
is hard, with so many members bolting. LOL is pressuring Foremost to proceed
with the controversial plan to turn over Foremost’s hauling routes to LOL’s
Northwest Transport subsidiary. How can Foremost’s management pull out of the
nose-dive?
Milk Regulatory Equity Act of 2005
Hurting CA Fluid Market Share (p. 4):
Milk from outside
California is flooding into that state’s Class I utilization. John Bunting
analyzes that this trend has been boosted by the last spring’s federal law that
reined in producer-handlers in the federal milk order system. That law change,
ironically, was championed by California dairy interests.
Lawsuits Fly Following UpState-Niagara
Merger in NY (p. 5):
Last spring saw a
quickie, “hurry up and shut up” merger involving western New York’s two local
dairy co-ops—Niagara Milk Co-op and UpState Farms Cooperative. Lawsuits now
thrive regarding settlement terms for former Niagara members, as their share of
the co-op’s “fair value”. Niagara members were paid out $12,730,577, but
earlier in 2006, a consultant had valued Niagara’s business at $41 million.
Where’s the missing $28+ million?
Feature Story #1:
Unilever (Breyer’s & Good Humor) Using Genetically-Modified Fish Antifreeze
Protein in Ice Creams (p. 6-7):
The nation’s
largest ice cream—Unilever (owner of Good Humor-Breyer’s)—is using a
genetically-modified “antifreeze” protein from a polar fish in certain low-fat
ice cream and novelty products. In the U.S., the FDA approved this technology
in 2005. In Great Britain, that country’s food safety agency is getting an
earful from concerned scientists about the inadequacy of the human safety
testing data provided by Unilever to FDA here in the states. What’s of
concern? FDA allowed “safety tests” from blood proteins of cod fish to
substitute for the actual fish whose proteins are replicated and used in the ice
cream (the ocean pout, or conger eel). Cod fish and ocean pout differ greatly.
On the “Order of Species” listing used by scientists, the elephant and the
platypus (an egg-laying marsupial) have more in common than do the cod and ocean
pout. Hilariously, a spokesperson for “Ben & Jerry’s” (also a Unilever-owned
firm) told a trade association publication that “We would never dream of putting
anything like that in our products.”
It’s the same old story: corporate greed (for cheaper
products) using questionable food biotech products in consumer products … with
no notice to the consumers eating the stuff! Read all about it
here.
Book Review: Real Food—What to Eat and
Why (p. 8):
An exciting new
book by writer Nina Planck details an new, “old-fashioned” food
philosophy—eating non-processed foods, like our grand-parents and
great-grandparents dined upon. Ms. Planck’s book combined both a philosophy and
a lot of food facts that will make many readers rethink their diets.
Advise & Consult: Penn State’s Bailey Out
of Bounds (p. 8):
Penn State
agricultural economist Dr. Ken Bailey is advising dairy farmers to lock in
“fixed-price” deals for future milk sales. But he’s also now on the payroll of
Downs O’Neill as a paid consultant … advising dairy farmers to sign fixed-price
milk sales contracts. The decision timetable for Penn State to offer “Doc”
Bailey tenure must be drawing near. Bailey, who failed to get tenure at
Missouri, looks like he’s hedging his bets.
USDA Issues Make-Allowance for Class
III/IV (p. 9):
USDA has issued a decision on
“make-allowances” for cheese and butter-powder plants. Few parties are happy.
Dairy farmers don’t want more money taken from their milk checks to subsidize
manufacturing plants. And cheese/butter-powder plant operators claim they need
more subsidies from FMMOs to stay profitable.
Monsanto Reports Far Lower Profits from
Posilac Sales (p. 9):
Reduced sales of
Posilac (recombinant bovine growth hormone) are pulling down profits from that
division for the owner—Monsanto.
National Dairy Cattle Replacement Price
Map (p. 10):
Prices are solid,
indeed, rising for some kinds of dairy animals, and dropping for others. Only
in The Milkweed.
Feature Story #2: We must
fairly price cheese/cheese milk (p. 11):
Discontent reigns
over both USDA and California pricing systems for milk made into cheese. Cheese
must be our milk-pricing basis. Half of all U.S. farm milk goes into the cheese
vat. Think about it: scientists can clone cows and sex semen, but dairy can’t
equitably price cheese milk to keep producers and cheese plants financially
viable. Read Editor/Publisher Pete Hardin’s well-reasoned thoughts on cheese
pricing here in our second “article of the
month.”
Same-Old,
Same-Old: Cheese and Butter Prices Lower (p. 12):
Prices for Cheddar cheese and Grade AA butter fall lower at
the Chicago Mercantile Exchange. These lowball prices do not square with tight
demand for cheese and many factors that will weigh against more U.S. output in
2007.
“rbGH-Free” Issue Burning Hot in Dairy
(p. 1):
The “no growth
hormones in milk” trend just keeps gaining more press. Fluid milk dealers delay
New Jersey’s state premium until a court hearing in mid-December. Pennsylvania
“Monsanto clones” complain their farming practices are being impaired. RUMOR:
Dean Foods will go “rbGH-Free” system-wide in early January 2007.
Struggling Midwest Dairy Co-ops Mulling
Big Merger (p. 2):
Behind the scenes,
merger talks are brewing in the Upper Midwest, where cheese-making co-ops are
wallowing in red ink. Their common lender—CoBank—is scared. Learn why.
CME & CBOT Propose Merger in 2007 (p. 2):
Two of the
nation’s largest agricultural commodity exchanges are proposing merger in early
2007.
Feature Story #1: Corn Prices Zooming Up Quickly
(p. 3):
Never has the
U.S. grain trade seen a mid-harvest corn price run-up without severe adverse
weather conditions … until fall 2006. For dairy farmers who buy grain, the rise
will translate into higher grain prices. The real question is, how high will
grain prices go and how long will high prices last? Read the story
here.
High-Level USDA Official Exists, Amid
NFDM Scandal Charges (p. 4):
In complete
violation USDA laws, a high-level official (Bert Farrish) of USDA shifted 25
million lbs. of surplus gov’t nonfat dry milk to his “alma-mater” (Mississippi
State University) for catfish feeding research. MSU had only requested one
pallet’s worth. Parrish kept hitting the “replay button” on this scam. DOJ
officials have declined to press criminal charges—proving that white collar
crime pays.
No Milk Powder: Baking/Candy Plants to
Temporarily Close (p. 4)
Due to shortages
of nonfat dry milk, several (unnamed) food processors that use nonfat dry milk
in their products are preparing to temporarily close production—just before the
peak demand time for their consumer products.
Wisconsin Dairy Farmer Finds “The Enemy”
Along Roadside (p. 5):
In late September, Wisconsin dairyman Joel Narges tripped
over an object in his roadside while he was changing grazing access for his cows
at night. Joel tripped over a box of imported cheese from Uruguay—which leads
to a review of the massive quantities of cheese imported from that region.
Consumers Paying
$40-45/cwt. for Cheese, Fluid Milk at Retail (p. 6):
When analyzing
prices paid for cheese, fluid milk and yogurt in supermarkets, it’s clear that
consumers are paying at least $40-45 per cwt. (in farmer terms) for their retail
dairy products. The money IS in the market place … farmers
simply aren’t getting their fair share.
Many Prices for Nonfat Dry Milk (p. 7):
Many prices are
being reported/paid for nonfat dry milk in the U.S.—from $.91/lb. (USDA’s weekly
NASS survey) to up to $2.75/lb. (for “rbGH-Free” milk powder). Guess what price
is used to calculate the farmers’ value in federal milk orders?
Harvard Symposium: Milk, Hormones and
Human Health (p. 7):
Writer John
Bunting attended a wide-ranging symposium about milk and human health issues at
Harvard University in late October. He marvels at some of the cutting-edge
health/nutrition research and findings.
Importer Schuman Behind Mystery Cheese
Box (p. 8):
The Milkweed’s
research department tracks down that
empty box of imported cheese (described on page 5) to its importer—Arthur
Schuman, Inc., of Fairfield, New Jersey. Schuman is a long-term snake in
efforts to dump cheap South American and Eastern European dairy products into
the U.S.
Feature Story #2: Law
Requires USDA to Adjust Milk Prices for Grain Costs (p. 8)
The Agricultural Marketing Agreement Act of 1937 requires the
Secretary of Agriculture to adjust farm milk price within all federal milk
marketing orders to “reflect the price of feeds, the available supplies of
feeds, and other economic conditions which affect market supply and demand for
milk or its products.” Read writer John Bunting’s
story on how enforcement of the law would help dairy farmers receive a fair
price for their milk.
Summary of Hardin’s Late Oct. Northeast
Speeches (p. 9):
We summarize the main points
made by Pete Hardin at a series of speeches to dairy producers in the Northeast
in late October. Among Hardin’s suggestions: Zero hauling costs to producers
for Class I milk, and no more than half charges for other milk being hauled—an
overall reduction in hauling costs of 75%, or almost $1/cwt. He also laid out
suggestions for the 2007 farm bill, and urged producers to “Kick the D-minuses
in the butt”. (The “D-minuses” are DFA, DMS and Dairylea—called that label for
their negative impact on producers’ milk checks.)
FDA/IMS: Foreign Agents Can OK Offshore
Grade A Status (p. 9)
The federal Food
and Drug Administration and the National Conference on Interstate Milk Shippers
are proposing that foreign agents be allowed to inspect foreign dairy farms and
plants for compliance with U.S. “Grade A” dairy sanitary regulations. Where’s
“Mr. Yuk” when you need him???
National Dairy Livestock Price Map (p.
10):
Only in The
Milkweed—up to date reports on nearly a dozen and a half livestock markets
around the country!
Northeast Dairy Troubled (p. 11):
Editor/Publisher
Pete Hardin details his trip through the Northeast in late October, and then
discusses why this region has the greatest of all opportunities in the future to
produce both food and energy.
Milk Powder
Prices Sky-High; Cheddar & Butter Unsettled (p. 12)
Dairy commodity
prices at the Chicago Mercantile Exchange are fitful—up and down. Meanwhile,
nonfat dry milk supplies are impossibly tight. Demand for cheese is strong.
Butter markets are nervous, worried about a big slug of products from New
Zealand in early 2007.
Feature Story: Will Co-ops Vote Out USDA’s
Milk Orders … SOON? (p.1):
Some day soon, folks in the U.S. dairy industry may wake up
to learn that several federal milk marketing orders no longer exist! In this
month’s exclusive story, Pete Hardin explains
how the big dairy co-ops may be preparing to vote out selected federal orders,
and how this may in turn trigger the demise of the entire federal milk marketing
order system.
Cash Prices for Nonfat Dry Milk Zoom Up (p. 1):
In recent days, the cash price for nonfat dry milk has
climbed 34 cents/lb. at the Chicago Mercantile Exchange. Milk powder users are
desperate to find product. DairyAmerica—the milk powder “cartel”—is promising
it’ll deliver monthly commitments next year!!!
House Ag Committee Ignores National Milk Producers Fed. (p.
2):
On September 20, the House Agriculture Committee held an
important hearing in Washington, D.C., taking inputs from national farm
commodity groups about the 2007 farm bill. Dairy—alone among ag commodities—was
not represented on the hearing panels. Ag Committee staffers told the
once-vaunted dairy lobby, National Milk Producers, to stay home. Who’s
representing dairy farmers???
July ’06 Saw Huge Increase in MPC Imports (p. 2):
Imports of Milk Protein Concentrate entering the U.S. in July
totaled 7063 metric tons in July (that’s nearly 160 million lbs.). MPC imports
for the first seven months of 2006 are running 29% higher than 2005’s record MPC
import total. MPCs are foreign dairy proteins used primarily in dairy product
processing—such as processed cheeses.
Consumers Paying Big Premiums for “No rbGH” Milk (p. 3):
More fluid milk processors are demanding “rbGH-Free” milk
supplies. Processors and retailers are putting big mark-ups on “rbGH-Free” milk
in the stores. The New York Times reported on October 7 that Seattle, Washington
shoppers were paying a $1.10 per half-gallon premium for “rbGH-Free” milk,
compared to store-brand milk that’s not guaranteed “rbGH-Free”. A $1.10 per
half-gallon premium = $25.00/cwt.
Europeans Move to End Fonterra’s Butter Import Monopoly (p.
3):
A European court has restricted access Fonterra’s access to
European Union butter markets for the remainder of 2006. What about 2007? That
NZ butter could end up in the U.S.
DOJ OKs Prairie Farms’ Purchase of Southern Belle (p. 4):
Southern Belle, the fluid processor in southern Kentucky,
will be sold to Prairie Farms. DOJ Antitrust officials compelled DFA to sell the
business. DOJ has required Prairie Farms to be supplied with fluid milk by DFA.
2007 Farm Bill/Money Talks Louder Than Public Interest (p.
5):
Writer John Bunting details contributions to key agriculture
senators, as legislators approach the all-important 2007 farm bill negotiations.
Sarah Farms’ Lawsuit: MREA Violated U.S. Constitution (p. 6): Hein and Ellen
Hettinga, owners of Sarah Farms—a large producer-handler in Yuma, Arizona—have
filed a federal lawsuit, claiming last April’s Milk Regulatory Equity Act
violated their constitutional rights. The Hettingas claim that the MREA
specifically targeted their operation—in alleged violation of the Constitution’s
prohibition against “Bills of Attainder”.
CMAB Funds In-Depth Study of State’s Dairy Industry (p. 7):
The California Milk Advisory Board has unveiled a detailed
study of that state’s dairy industry by analysts at McKinsey & Co.
Infant Formula Imports Rise in United States (p. 8):
For the first seven months of 2006, infant formula imports
entering the U.S. rose 6.3%. Among importing countries, the big gainers were
Venezuela (+48.7%) and Portugal (+270.8%). FDA does not require milk ingredients
in imported infant formulas to meet U.S. Grade A sanitary specifications.
Farmer’s Testimony Ignored at FMMO Hearing (p. 8):
Ohio dairy farmer Bryan Wolfe tried to enter testimony at the
recent federal milk order hearing in Strongsville, Ohio, only to be advised by
the presiding judge, in advance of Bryan’s comments, that “I indicated that I
probably wouldn’t take it.” What’s it come to when FMMO hearings ignore
testimony of the few attending farmers?
New York Organic Consignment Sale a “Success” … Sort Of (p.
9):
The October 7 sale of organic dairy animals in central New
York was held. But prices came in below levels reported for private-treaty
transactions. The quality of the animals wasn’t generally the best, and
consignors didn’t provide as much information as buyers of high-value animals
normally expect.
National Dairy Livestock Price Map (p. 10):
Some livestock markets are a bit stronger, while others are
declining. Areas with good feed supplies are seeing stronger prices for bred
heifers. Look for an exodus of dairy animals in the Northeast and Southeast this
fall and winter.
Curtains for federal milk orders? What’s next? (p. 11):
Pete Hardin commences the discussion of what the U.S. dairy
industry will look like, if federal milk orders disappear. Hardin foresees a
“Wild West” milk-pricing environment. States and regions will have to step
forward to assure dairy producers are paid fairly and promptly.
Milk Powder & Whey Prices Rise Sharply; Cheddar Declines
(p. 12):
Dairy commodity prices are wacky. In the past few days, CME
cash prices for nonfat dry milk have skyrocketed—up about 34 cents per pound.
Milk powder is tight. But prices for Cheddar cheese (both blocks and barrels)
have declined. Unless greed is rational, dairy markets defy rational explanation
at this time.
USDA Re-Opens National “Make-Allowance” Hearing (p. 2):
USDA, on rapid notice, reconvened the national federal milk
order hearing on manufacturing plant “make-allowances” that had been held in
late January 2006—Sept. 14 in Ohio. A new study by Cornell University will be
the sole item on the hearing agenda. Cornell’s study basically finds current
“make-allowances” are pretty much close to average operating costs.
World Dairy Expo Names Hanman “Dairy Industry Person of the
Year” (p. 2):
World Dairy Expo will honor retired DFA CEO/president Gary
Hanman as its industry person of the year. This situation is like the “Sons of
Italy” naming Al Capone as its “man of the year”.
Fluid Milk Price Asymmetry (p. 3):
The farm-to-processor spread for fluid milk shows a widening
gap.
DMS Stealing Ex-Farmland Producers “rbGH-Free” Premiums (p.
3):
Dairy Marketing Services (DMS—a DFA subsidiary) stole
“rbGH-Free” premiums from ex-Farmland Dairies producers whose milk marketing was
taken over (involuntarily) by DMS in summer 2005. At a hearing of the New Jersey
Department of Agriculture, the plant manager for Farmland Dairies (Tim Barber),
testified that his firm was paying “rbGH-Free” premiums to DMS, but DMS wasn’t
paying them to his former producers!
Lew Gardner’s Bankruptcy: Long Line of Unpaid “Suckers” (p.
5):
We follow upon the Lew Gardner bankruptcy, by printing a list
of all the creditors named in Gardner’s bankruptcy filing. Gardner is the top
DFA director in the Northeast. Curiously, Lew borrowed $1.554 million from
Agri-Financial Services (a Dairylea co-op subsidiary). Lew reported a per cwt.
level of income of $15.33/cwt. for May 2006 (a “director’s special” milk
price?). Lew even stiffed DFA for $12,714 in milk check advances. Hilarious
reading!
First Northeast Organic Consignment Sale Scheduled (p. 6):
A consignment sale of organic dairy animals will be held on
October 7, 2006 near Mohawk, New York. Good place to find the value of organic
animals.
Agri-Mark Debt $133 Million; Lenders Want More Equity (p.
6):
At recent membership meetings, Agri-Mark’s leaders have more
openly revealed the co-op’s painful financial condition. Agri-Mark’s debts now
total $133 million—that’s roughly $100,000 per member (using 11/30/05 member
totals). Agri-Mark’s lender—CoBank—has the co-op on a weekly cash-flow reporting
basis, while demanding the co-op boost equities by $20 million in three years.
Gov’t Dairy Data/Analysts’ Blabber Disconnected from
Reality (p. 7):
There’s a wheelbarrow full of bad government. numbers, and a
manure spreader full of dairy “experts’” analyses about what’s going on,
supply/demand-wise, in the U.S. dairy industry. Dairy commodity prices are
unduly low … and dairy inventories (especially nonfat dry milk and butter) are
scarce. Why the low prices and babble about their justification—a lot of people
don’t want farmers to know what’s really going on.
CME in the Media (p. 7):
In recent weeks, news of the investigation by the Commodities
Futures Trading Commission’s investigation into dairy cash
markets/futures-options trading at the Chicago Mercantile Exchange has gained a
lot of attention in the business media. But only The Milkweed is reporting these
events among the dairy industry media.
Chi. Tribune: Cows Get No Grass at Horizon’s Organic Dairy
in MD (p. 7):
On Sunday, August 20, the Chicago Tribune published an
investigative piece by reporter Andrew Martin about the lack of access to fresh
pasture at the 500-cow “organic” dairy owned by Horizon (Dean Foods) in eastern
Maryland. The article quoted both the former grazing manager and the former
veterinarian as saying that the grass was strictly for appearances.
CFTC Airs CME Dairy Market Gripes on August 1st (p. 8):
On August 1, the Commodities Futures Trading Commission
(CFTC) held a public hearing in Washington, D.C. on the subject of “thin
markets”. Most of the testimony and comments focused on dairy cash market
trading at the Chicago Mercantile Exchange. Writer John Bunting drew a lot of
attention from the audience for two points he made during his testimony: 1) One
trader allegedly drove up the CME cash Cheddar prices in both the second half of
November 2004 and January 2005. He then made money on the settlement of his
cheese-based futures positions, vs. the cash market results. That person bragged
of building an $8 million house with the proceeds and still having $20 million
left over. 2) Bunting noted the benefits of low CME Cheddar prices on Kraft
Foods’ earnings and stock value. Millions and billions!
Grass-Based Dairying: Niches for Small/Medium Producers (p.
9):
Grazing expert Joel McNair explains why small/medium dairy
producers’ financial security can be based upon advanced marketing of
grass-based dairy products.
U.S. Dairy Livestock Price Map (p. 10):
It’s becoming a “buyers market” in most parts of the U.S. for
dairy animals. Prices remain strong in Michigan, which has a good crop situation
and a number of dairy expansions.
“Anti-Market” Forces Exposed (p. 11):
Pete Hardin reviews the serious disconnect between
long-standing dairy industry practices and an honest “market place”. DFA, Dean
Foods, the Chicago Mercantile Exchange, and Monsanto’s “Posilac” (rbGH) all come
in for a serious proctology. Surprisingly: all of these miscreants are now
coming under sharp focus … and maybe will get what they deserve.
Milk Powder Supplies Tight, Cheddar & Butter Prices Up &
Down (p. 12):
Despite supplies of nonfat dry milk and butter, U.S. dairy
commodity prices are not moving up as we believe they should. Milk powder is
impossibly tight. Butter is scarce. Cheese supplies are constricting. Even so:
Cheddar prices and Grade AA butter prices turned down on Friday, September 8 at
the Chicago Mercantile Exchange.
Kraft Foods Reports Bigger 2nd Quarter Profits (p. 2):
Kraft Foods’ profits rose, as the result of cheaper cheese
costs.
Dean Foods Buys ANOTHER Michigan Fluid Processor—Jilbert’s
Dairy (p. 3):
Dean Foods has added to its stockpile of Michigan-based dairy
processors. This time, Dean acquired Jilbert’s Dairy of Marquette, MI. The
Milkweed estimates that Dean Foods has more than 90% market share of all
packaged fluid milk that’s distributed in Michigan.
WTO Negotiations Collapse, U.S. Farm Interests Blamed (p.
3):
In late July, the World Trade Organization talks to try to
achieve a global “Free Trade” deal fell apart. The media blames U.S. farmers.
Nothing else new.
USDA Seeks More Comments on FMMO “Make Allowance” (p. 3):
USDA is reopening the January 2006 national federal milk
order hearing on “make-allowances” for more comments and more data. Comments due
by September 30, 2006.
Butterworks Farm: Organic, On-Farm Processing Pioneers (p.
4):
Writer John Bunting writes about what he learned at
Butterworks Farm in Vermont. The Lazor family milks 40 Jerseys, produces
farm-processed organic yogurt, and achieves income from the milk in the range of
$100/cwt.
EU Court Ruling May Send More New Zealand Butter to U.S.
(p. 5):
The European Union court has ruled that New Zealand’s dairy
export monopoly—Fonterra—has violated the Union’s rules by its tight grip on
butter imports. The result could force more NZ butter into the U.S.
CDFA “Goes All the Whey” for Cheese Plants (p. 5):
California’s Department of Food and Agriculture has revised
the state’s farm milk-pricing system—giving a big banana to cheese plants in the
form of a whey manufacturing allowance. CDFA estimates the net effect will cost
California dairy producers $.419 off Class 4b (cheese) milk, or about $.20/cwt.
off their blend prices.
Milk Duct Tissue Cancers Rose 55.3% in U.S. Following rbGH
Approval (p. 6-7):
Writer Paris Reidhead commits what may be the single
greatest, most controversial article in the history of The Milkweed, when he
details published medical research that links Insulin-like Growth Factor-1
(IGF-1) to increased human cancers. IGF-1 is a secondary hormone found in
increased amounts in milk from milk cows injected with Monsanto’s synthetic
growth hormone—Posilac. Reidhead then explores data from the American Cancer
Society that shows dramatic annual increases in post-menopausal women’s milk
duct tissue (breast) cancers since FDA approved Posilac use by dairy farmers in
early 1994.
Lew Gardner—DFA Big-Wig—Files Bankruptcy (p. 8):
DFA’s top farmer leader in the Northeast, Lew Gardner, filed
bankruptcy in April 27, 2006. Gardner lists $1.9 million in liabilities and $1.2
million in assets. “Poor” Lew stiffed co-op’s he’s affiliated with for $1.5
million—but continues serving as a DFA director, according to a co-op
spokesperson. Funny thing … Lew’s bankruptcy filing shows no projected income
listed as a co-op director. And Lew … how can your cows be worth nearly $2000
apiece when the Posilac-induced herd average is nearly 1000 lbs. below the
statewide DHIA average? How do we know Gardner is/was using Posilac? He lists
Monsanto as a creditor in his bankruptcy papers … to the tune of $4969.
Why we’ll import more, WTO deal or not (p. 9):
Joel McNair explains that despite the demise of WTO trade
talks, trade deals pose many threats to this nation’s food producers.
National Dairy Livestock Price Map (p. 10):
Only in The Milkweed!
U.S. Farm Bill Needs … (p. 11):
Pete Hardin details what he thinks the 2007 farm legislation
should include: 1) a regular mechanism for producers whose commodities are in
federal commodity promotion programs to have regular, binding votes on
continuing these check-offs; 2)A thorough investigation of cash dairy trading at
the Chicago Mercantile Exchange; and 3) A prompt study of U.S. food
transportation and distribution, based on scenarios involving $4/gallon,
$6/gallon, and $8/gallon diesel fuel prices. Hardin contends that this nation’s
food system is not sustainable, in the event of dramatically higher energy costs
… or worse yet … inadequate amounts of diesel fuel.
Milk Powder, Cream Extremely Tight; Cheddar Prices Stay Low
(p. 12):
Weather events have tightened supplies of nonfat dry milk and
cream across the U.S. DairyAmerica—the co-op milk powder consortium—has sold 100
million lbs. of milk powder to New Zealand. Yet there’s been no substantial
upwards movement of cash dairy commodity prices at the Chicago Mercantile
Exchange. Business as usual in our crooked, corrupt industry.
WTO Talks at Impasse (Dangerous for U.S. Dairy Farmers) (p.
1):
Global “Free Trade” talks are in danger of collapse. Danger
is that the Bush administration will dump protections for U.S. farmers to try to
salvage a last minute deal to protect interests of multi-national corporations.
Several DMI “Loans to Grants” Violate USDA’s Conflict of
Interest Rules (p. 1):
We report that several recent projects by Dairy Management,
Inc. (DMI) have violated USDA’s conflict of interest rules. Here’s how: Officers
and directors of the three national dairy promotion groups (DMI, National Dairy
Board, and the United Dairy Industry Assn.) negotiated and voted upon complex
“loans to grants” to subsidiaries of Dairy Farmers of America. Trouble is: many
officers and directors of the national dairy promotion groups are
directors/members of DFA.
Foremost Dumps Haulers, Loses Members in NW Wisconsin (p.
2):
Some milk haulers are taking their routes and leaving
Foremost Farms, following attempts by the co-op to force haulers into one-sided
deals with Northwest Transport (a Land O’Lakes subsidiary).
Premiums for “rbGH-Free” Farm Milk Developing (p. 2):
From coast to coast, developing premiums for “rbGH-Free” milk
are developing as processors will pay premiums for that farm milk.
Huge, Surprise Offer for MD/VA’s Laurel, MD Property (p.
3):
A last-minute, $200 million+ offer for Maryland & Virginia
co-op’s real estate at Laurel, MD has upset the apple cart on what dissident
members fear was an inside deal to sell the property for about $135 million.
Minutes from MD/VA board meetings show that the co-op is under pressure from its
main lender—CoBank—to improve its equity position.
1/3 of U.S. Under Drought (p. 3):
The National Weather Service “Seasonal Drought Outlook”
reports that about one-third of this nation is under drought. Forage supplies
and grain costs are under pressure—predictors of tighter milk supplies.
Cornell Prof has Patented “rbGH” Test for Milk (p. 4):
Writer Paris Reidhead reports how Dr. Ron Gorewit—a professor
of biological and environmental engineering at Cornell University—has
co-patented a test to determine if milk has been produced from cows injected
with “Posilac” (Monsanto’s recombinant growth hormone). Funny thing: many vested
interests, including the Food and Drug Administration, don’t like the fact that
rbGH milk can be differentiated.
Floods Drown Northeast Dairy Farms, Plants (p. 6-7):
John Bunting didn’t have to go further than his front yard to
research this one! Massive rainfall in late June devastated parts of the
Northeast. “Ground Zero” was Delaware County, New York—where flood waters
devastated farms, roads, milk plants and homes.
The Raw Milk Inevitability (p. 8):
Warren Taylor, a 30-year professional in dairy plant
engineering, is evangelizing the nutritional merits of local, raw milk sales.
Taylor reports on recent events in Ohio (where raw milk is a hot legislative
subject), a recent national confab about raw milk in Nebraska, and Taylor’s
suggestion that a U.S. “Raw Milk Ordinance” be developed to establish strict,
laboratory-enforced standards for raw milk sales by farmers to consumers.
Greed Threatens Organic’s Future Price Structure (p. 9):
Joel McNair ruminates about future pressures of price and
integrity upon the organic milk marketing structure. He theorizes that sometime
after 2009, that organic milk prices will decline. Joel projects that dairy
products marketed as “grass-fed” may have longer-term future opportunities than
do “organics”.
National Dairy Livestock Price Map (p. 10):
Sorry, but only subscribers see the full details of this
national dairy animal price map, featuring recent auction prices from about a
dozen and a half markets around the country. In general, price erosion for most
animals is happening.
“Uncle Sam’s” Cavalry Isn’t Coming (p. 11):
Pete Hardin worries that, in the midst of the coming crises
of energy and money, that waiting in line for “Uncle Sam” to help is an exercise
in futility. Instead, dairy farmers must take charge of their own industry,
wrestling the industry from failing co-ops. The first priority to set things
right: get rid of Posilac (rbGH). Get rid of Posilac and dairy farmers would see
their milk prices improve by $2.75 to $4.00/cwt., Hardin projects.
Milk Supplies Tighten, But Low Dairy Commodity Prices
Persist (p. 12):
Despite the fact that weather, forage supplies, and corn
prices are all factors in reducing U.S. milk production in the short-and
medium-term, dairy commodity prices at the Chicago Mercantile Exchange continue
to grovel in the sub-basement. Dairy’s cash market and futures signals are
warped.
More Dairy Processors Want “rbGH-Free” Milk (p. 1):
Responding to consumers’ desires, the number of U.S. dairy
processors labeling their products “rbGH-Free” is growing fast.
DOJ Tells Senator Specter Dairy Antitrust Probe Moving (p.
2):
After a delay of two months, a DOJ underling wrote
Pennsylvania Senator Arlen Specter on June 5, 2006, saying that the dairy
Antitrust investigation is “active and continuing”. Bunk.
Agri-Mark’s Financial Trends Look HORRID (p. 3):
Analyzing Agri-Mark’s 11/30/05 financial report is a shocker.
As of last November, Agri-Mark’s numbers boil down to, on a per-member basis:
$7,000 in combined operating losses; $10,000 in administrative costs; $7,250 in
interest costs (nearly double the prior year), and $15,862.83 in underfunded
employee pension costs!
Foremost Dumping Haulers into Northwest Transport (p. 3):
Foremost Farms—based in Baraboo, Wisconsin—is systematically
shoving its independent contractor milk haulers into the clutched of LOL’s
Northwest Transport. Haulers are being told to shut up and either lose money or
sell out for cents on the dollar!
California Dairymen Learn the Hard Way (p. 4):
More details about problems with the “Milk Regulatory Equity
Act of 2005” (the federal law that zapped producer-handlers in federal milk
orders). Very recently, unregulated Nevada milk is moving into Arizona!
Fluid Milk Decision (p. 4):
USDA announced a decision in the June 2005 Class 1 national
hearing. MPCs (and other dairy proteins) will be legal in Class 1 (fluid) dairy
beverages.
NYS Bungled Greek Yogurt “Grade A” Rating (p. 5):
Documents obtained from the NYS Department of Agriculture &
Markets detail how state dairy inspectors screwed up on a wagon-load of items in
their March 2005 rating (and subsequent oversight) of the “Grade A” rating given
to the FAGE yogurt plant (and its milk producers and haulers).
CWT Double$ Due$ to Cover Huge Debt$ (p. 6):
National Milk Producers Federation is conducting a full-court
press to pull in more independent dairy farmers to join the “Cooperatives
Working Together” (CWT) program, effective July 1, 2006. CWT’s dues will double
on July 1—to ten cents per cwt. CWT has rang up about $20 million in debts for
the fiscal year that began on July 1, 2005. CWT’s killing cows and subsidizing
U.S. dairy exports is insane—the U.S. has been a milk-deficit nation for the
past 10 years! Imports—oftentimes by dairy co-ops like Dairy Farmers of America
and Land O’Lakes—are killing farmers’ milk prices.
Center for Food Safety Continues to Battle GMO Alfalfa (p.
7):
The lawsuit against USDA’s approval of genetically-modified
alfalfa continues slowly.
Global Yogurt Invasion in 2005 (p. 8):
A total of 15 nations exported yogurt to the U.S. in 2005.
But only two—Spain and Greece—have approval as U.S. “Grade A”. Everything else
was illegal. (And we wouldn’t bet two cents on the Greek “stuff”, either.)
Whose kooky future to believe? (p. 9):
Joel McNair contemplates various analyses of present and
future energy realities. He concludes: “… I have long believed that the future
of agriculture is based on sunlight, rainfall, local/regional markets, small- to
medium-scale systems, and diverse farming practices, rather than the opposite of
all of those as is the trend of our oil-rich modern times.”
Dairy Cattle Replacement Prices Map (p. 10):
Sorry—this most valuable page of the paper is available only
to subscribers who want to follow national dairy livestock price trends. (Hint:
open dairy heifers are a bargain for those with available feed.)
Get Rid of Posilac (p. 11):
Pete Hardin details his 20 years in the fight against
Monsanto/FDA and recombinant bovine growth hormone. The latest news—a medical
journal report linking increased hormone levels in milk from rbGH-injected cows
to big increases in multiple human births—is reason to get rid of rbGH use now.
If FDA won’t act, then dairy processors must demand “rbGH-Free” farm milk and
label it on their consumer packages.
Dairy Commodity Prices All Stink … BUT (p. 12):
We depart from our “same-old, same-old” dairy commodity
analysis to explain why the U.S. is on the verge of huge shortages of farm milk.
Subscribers read it here first!
New U.S. Law Restricting Producer-Handlers Could Devastate
California Fluid Quota Values (p. 1):
The recently passed federal law restricting producer-handlers
contained a provision that disallows federal milk orders from covering fluid
milk plants in Nevada. That “lulu” could devastate California’s milk pricing
system and fluid quota values—since Dean Foods has a big, new fluid plant in New
Mexico all set to more unregulated packaged fluid milk into the “Golden State”.
Antitrust Investigation vs. DFA Back on Track (p.2):
U.S. Department of Justice Antitrust investigators are back
on track with their investigation of Dairy Farmers of America, after a group of
Pennsylvania dairy producers (and John Bunting) met with Pennsylvania U.S.
Senator Arlen Specter in late March and explained how the Antitrust
investigation had been stalled due to politics and money.
DFA Restated ‘04 Audit: More Revenue & Debt (p. 2):
Without explanation, Dairy Farmers of America’s 2005
financial statement revised important figures from its 2004 financial report.
DFA reported $441 more revenue, $190 million more interest bearing debt, among
other data. These revisions cast doubt on the accuracy of claims by DFA’s
leaders that the co-op “reduced” its debts by $149 million in fiscal 2005.
MPC Imports Track Perfectly with U.S. Dairy Demand (p. 3):
Over the past five years, imports of Milk Protein
Concentrates correlate PERFECTLY with U.S. commercial dairy product
disappearance. Few statistics ever yield a perfect correlation.
Tax Settlements Boost Kraft’s First Quarter (p. 3):
Nearly $400 million in various federal/state tax reversals
were plowed into Kraft Foods’ first-quarter revenue—thus making the first
quarter numbers better than operating performance would indicate. Curiously,
Kraft’s first-quarter 2006 tax rate was “negative 9.2%”—a sign of negative
earnings???
LOL’s CPI Cheese Plant (CA) Losing Megabucks (p. 4):
For the first quarter of 2006, Land O’Lakes big CPI cheese
plant in California contributed mightily to the co-op’s $21.5 million loss in
dairy manufacturing. Performance of this plant begs the integrity of LOL’s
management. LOL Seeks 27-cent/lb. Whey Make-Allowance in CA (p. 4): Land O’Lakes
has requested a 27-cent per pound in the whey make-allowance from California’s
state milk regulatory agency. That “make-allowance” equals nearly all the value
gained from whey. LOL is trying to dip further into the public till to subsidize
its cheese plant losses in California.
Super-Nutrition: Grass-Fed Milk & Beef (p. 5):
Scientists are documenting more and more nutrition and health
benefits for persons consuming milk and meat from grass-fed cattle. Writer Paris
Reidhead reports on some of the many attributes of grass-fed livestock and
poultry products.
Background on CME Cash Dairy Trading (p. 6-7):
John Bunting charts the data for cash dairy commodity trading
at the Chicago Mercantile Exchange and concludes that the “market” is not a
supply-demand driven beast.
Quebec Dairy Farmers Protest Parmalat’s MPC Use (P. 8):
On May 2, almost 200 dairy farmers in Quebec Province
demonstrated at two cheese plants owned by Parmalat. Farmers’ ire was sparked by
Parmalat’s use of Milk Protein Concentrates in dairy products. Imports of dairy
ingredients threaten to pull down Canada’s stable dairy marketing/pricing
environment as well as deep-six values of “quota” held by Canadian producers.
Dairy “Efficiency”—What’s Past is Prologue (p. 9):
Joel McNair laments that U.S. agriculture took a wrong turn
in the post-WWII era. The chemicalization of agriculture has led many down a
wrong path of reliance on capital-intense inputs. Joel sees a “resurgence” in
agriculture that utilizes certain of grandfathers’ wisdom and practices.
U.S. Dairy Livestock Price Map (p. 10):
Most (but not all) markets report drops in dairy livestock
prices in the past month. However, calf prices are holding their own, due to
shortages of calves coming from key calf-source states like New York and
Pennsylvania.
N-U-T-R-I-T-I-O-N, not Slogans (p. 11):
Pete Hardin analyzes the positive and negative nutritional
aspects (and processing technologies) for fluid milk. (Hint: Pete isn’t big on
Ultra-High temperature pasteurization, small plastic bottles, or
homogenization.) Grass-fed, no-rbGH, non-homogenized, organic sounds best!
Dairy Commodity Markets Continue in Cellar (p. 12):
What can a person say? Prices for Cheddar, Grade AA butter
and nonfat dry milk continue at very low levels in cash market trading at the
Chicago Mercantile Exchange.
April
2006 Issue No. 321
Feature Story - Drought/Energy
Costs to Cut U.S. Milk Output (p. 1):
As if today’s depressed dairy product prices and shrinking
milk checks weren’t bad enough, a significant drought is taking shape. Extreme
dry conditions over many key parts of the country mean Mother Nature will have
the final say on U.S. milk production. See the “Story of the Month”
here.
Watch CA Milk Output After Mid-2006! (p. 1):
Don’t take California’s current bulge in milk production for
granted. Several factors are at work to pull down the state’s milk volume in
2006’s second half, we believe.
CME Block Cheddar Volume Next to Nothing (p. 2):
What market? Cheddar trading volume is almost nothing at the
Chicago Mercantile Exchange.
March Class III Price: $11.11/Cwt.; More Decline Ahead (p.
2):
The federal milk order Class III (cheese) milk price dropped
$1.09/cwt. for March 2006, down to $11.11. Further declines are anticipated.
10 Co-ops Want “Make-Allowance” Hearing Suspended (p. 3):
On March 31, ten dairy co-ops asked USDA to suspend further
consideration of the “make-allowance” hearing from January 24-28, 2006. Oops …
some of the same dairy co-ops that supported the hearing proposal in January now
realize they’d be cutting prices for ALL milk (including fluid and Class II).
They know not what they do.
Codex Dairy Panel Punts on Processed Cheese Standards (p.
4):
On April 1, at a meeting in New Zealand, the global Codex
dairy panel bent to a U.S. demand and failed to put in tougher definitions for
ingredients in processed dairy products. K-R-A-F-T wins.
National Animal I.D. Igniting Firestorm of Angry Protests
(p. 4):
USDA’s proposal to put radio frequency chips in most animals
is meeting fast-mounting opposition from many sources. Opposition could spark
the next “Whiskey Rebellion”.
Powerful Interests Pushing NZ ‘Free Trade’ Deal (p. 5):
The “U.S.-New Zealand Council” (a group that’s promoting a
“Free-Trade” deal between these two nations) has a lot of powerful friends—U.S.
Congressmen and even Clayton Yeutter—former USDA Secretary and former Special
Trade Rep. A “Free-Trade” deal with New Zealand would be a complete sell-out of
U.S. dairy interests.
Prices/Profits Down “Down Under” (p. 5):
Things are FALLING in New Zealand: farm milk prices, global
dairy commodity prices, farm real estate values, and the New Zealand dollar. NZ
dairy farmers are getting squeezed, also.
DFA’s 2005 Audit: HUGE Financial Problems (p. 6):
The Milkweed has analyzed the 2005 audit just released
by Dairy Farmers of America. Two items jump out: * ZERO mention of just-retired
CEO/President Gary Hanman. * DFA plugged $97 million into its pension mess and
still is about $145 million in the hole, when comparing pension program assets
and projected obligations. DFA reported earnings of only $10 million in 2005.
USDA Wants Comments on Dairy Promotion Program (p. 6):
USDA is taking public comments on the National Dairy
Promotion. Comments are due by May 1, 2006.
U.S. Imports Cause Dairy Farm Price Crisis (p. 7):
Dairy imports, more than rising U.S. farm milk output, are
the source of our low dairy commodity and farm milk prices, in the analysis of
John Bunting.
Cornucopia Institute Creates Organic Dairy Scorecard (p.
7):
An activist group has rated sellers of organic dairy products
as to the integrity of their milk supplies. The “big boys” are not happy.
Lawsuit vs. USDA’s Approval of Roundup-Ready Alfalfa (p.
8):
The Center for Food Safety has filed a lawsuit seeking to
block USDA’s approval of commercial sale of Roundup-Ready Alfalfa by Monsanto.
Danger here is that Roundup-Ready alfalfa is the first, genetically-modified
perennial crop to be released.
Same-Old, Same-Old Won’t Work (p. 9):
Joel McNair takes a look back and a look ahead and concludes
that many elements of our present U.S. dairy industry have little ability to
feed the nation in a future that includes higher energy costs. McNair describes
the success of a husband/wife team of graziers in southern Wisconsin.
Dairy Cattle Replacement Prices at Auction Markets Across
the USA (p. 10):
Dairy livestock prices are generally down across the country,
as the bite of low milk prices starts to get painful. But some animals in some
markets held their prices.
“Fair Share” for all (p. 11):
Pete Hardin lists a wide array of wrongheaded actions (and
inactions) by the federal government that are hammering U.S. dairy producers.
Build Import Barrier to Protect U.S. Livestock/Poultry (p.
11):
Pete Hardin explains why the U.S. needs a ban on all imports
of livestock/poultry, their products and by-products from regions of the world
that harbor Foot and Mouth Disease and Asian Avian Flu.
Wave of Milk Sinks Commodity Prices (p. 12):
Dairy commodity prices are in the pits, period.
March 2006 Issue No. 320
Bottom Falls Out of Dairy Markets (p. 1):
Cheddar cheese prices are at the USDA support price. Unless
dairy commodity prices improve miraculously, producers are looking at farm milk
prices for March-April 2006 that will range nearly $4/cwt. below milk prices for
those months in 2005. Milk production is up. Consumer demand may be off in the
past couple months, as the economy tightens.
USDA MILCX Payments to Suffer Delays (p. 1):
Dairy farmers will probably no see any “safety net” payments until July (at the
earliest) from the revised Milk Income Loss Contract Extension program passed by
Congress earlier this year. USDA must treat the program as a completely new
administrative procedure. And that will cause delays implementing the programs
and payments.
Saputo, Dean Foods Gouging Raw Milk Suppliers’ Margins (p.
2):
Two of the nation’s largest raw milk buyers, Saputo Cheese
and Dean Foods, are nastily chipping away at the margins of their raw milk
providers.
DFA Wants Another Hearing to Decouple Class I/II (p. 2):
Dairy Farmers of America is taking the lead, among a group of
dairy co-ops, requesting that USDA hold yet another emergency milk order hearing
on “make-allowances” for manufacturing plants. This time, the co-ops want to
avoid dropping Class I (fluid) and Class II (cultured products) prices from
declines in Class III (cheese) and Class IV (butter-powder) milk. But Midwest
co-ops oppose such decoupling.
DOJ Sharply Cut Antitrust Investigation Funds in October
(p. 3):
For the new federal fiscal year that began on October 1,
2005, the coast-to-coast, federal/state dairy Antitrust investigation had its
funding pared way back. What happened? Investigators were perhaps getting a
little too close to misdeeds by Dean Foods—good friends of the White House
incumbent.
Agri-Mark’s ’05 Losses: $1.6 Million (p. 4):
Agri-Mark, the predominant dairy co-op in New England market,
reported losses of $1.6 million last year. The co-op is blaming a downturn in
its cheese businesses.
MD/VA Co-op Members: $66,666 question (p. 4):
An appraisal of the Laurel, Maryland property by dissident
co-op members came in $100,000,000 higher than estimates provided by an attorney
for Maryland & Virginia milk co-op. Divided among the 1500 members, that
difference comes to $66,666/member. Dissidents are also concerned about
potential inside deal involving one or more MD/VA board members.
Leprino Foods: No Polydimethylsiloxane in Pizza Cheese (p.
5):
This story is posted on our Web site. Leprino Foods angrily
denies, in a February 17, 2006, letter, that the firm is using
Polydimethylsiloxane in manufacture of its Pizza Cheese. No denial or
acknowledgement of prior use is evident in the letter.
FDA Approved Polydimethylsiloxane in Foods in 1998/Chemical
Forms Formaldehyde (a Carcinogen) Under Heat (p. 5):
In December 1998, the FDA approved use of
Polydimethylsiloxane in human foods. However, FDA required no safety tests in
advance. Further research by The Milkweed shows that
Polydimethylsiloxane, under heat, decomposes into Formaldehyde (a cancer-causing
substance), among other compounds. Worse yet: FDA allows Polydimethylsiloxane
(used in food) to be sprayed with Formaldehyde (up to 1% of weight of
Polydimethylsiloxane) as a preservative. Formaldehyde is regarded as one of the
worst known, cancer-causing substances.
Feature Story #1: USDA 2005 Supply-Demand
Data Suspicious (p. 6)
Our current dairy pricing mess—the collapse of dairy
commodity prices— is not simply a case of old-fashioned “supply/demand” at work.
John Bunting explains how our dairy marketing and pricing systems have failed to
return a “fair share” to dairy producers. Read the complete story
here.
Feature Story #2: USDA “Missed” 2005 MPC &
Casein Imports (p. 7)
Imagine a line of milk tank trucks full of skim milk that
stretches from Los Angeles to Boston, with an “extra” 86 miles left over. That’s
how long a line of milk tank trucks would be, if all the Milk Protein
Concentrates (MPCs) and casein powders imported into the U.S. last year were
listed as skim milk. Read more here.
“Modern” Milk Has Lost Some of its Goodness (p. 8):
Research in England from 2002 shows that milk has lost a
great deal nutrient content, in comparison to a similar study from 1940. This
study raises questions about nutrient content of milk in the U.S.
Prairie Farms Studying Southern Belle (KY) Purchase (p. 8):
Prairie Farms is looking at a possible purchase of Southern
Belle—the fluid milk processor in Somerset, Kentucky. Southern Belle—50% owned
by DFA—is in the gun sights of the U.S. Department of Justice. DOJ will go to
trial to strip away DFA’s ownership of Southern Belle. Looks like it’s easiest
for DFA to sell.
Dealing With Raw Milk (p. 9):
Joel McNair explores opportunities and issues relating to
sale of raw milk to consumers. McNair concludes: “The U.S. dairy needs to
recognize that raw milk is a raw reality, and move accordingly to limit the
dangers while also allowing full development of the opportunities.”
Dairy Cattle Replacement At Auction Markets Across the USA
(p. 10):
Dairy livestock prices across the country are starting to go
backwards—in some areas and some ages of animals—due to farm milk price worries.
Only in The Milkweed.
Organic Meeting Is Energy Heartening (p. 11):
Pete Hardin writes about attending the Upper Midwest Organic
Farming Conference. Organic food producers are optimistic and their market is
growing. What a meeting!
Block and Barrel Cheddar At Support Prices (p. 12):
Dairy commodity prices are at or near rock-bottom. Strangely:
the cash market for Cheddar blocks at the Chicago Mercantile Exchange is, on
average, about twelve cents per pound below the price for New Zealand Cheddar
F.O.B. the port in NZ.
February 2006 Issue No. 319
Feature Story #1 - Bush: 3-Cent Milk Tax,
Zap Dairy Supports & DEIP (p. 1):
President George W. Bush’s recently unveiled federal budget
proposes “bleeding” dairy farmers’ milk checks with an old-fashioned cure: a
newly created “Milk Tax.” Read the entire story
here.
Feature Story #2 - Thieves Target Milk
Checks (p. 11):
As dairy farmers find themselves caught between lower milk
prices and zooming farm production costs in the year ahead, their absolutely
gutless dairy co-ops are pursuing agendas that will only make matters worse for
producers on both fronts. Read all about it in Pete Hardin’s
column this month.
Co-ops Goofed, Want Another “Make-Allowance” Hearing (p.
1):
The recent national federal milk order hearing in late
January turned into a farce. The large dairy co-ops, in their efforts to raise
manufacturing plant “make-allowances,” failed to request decoupling movers for
Class 1 (fluid) and Class II (yogurt, ice cream). Thus, the proposal to boost
manufacturing allowances would lower ALL classes of milk in the FMMO system.
When National Milk Producers’ economist tried to testify about a proposal to
decouple Class I and Class II milk base prices from the requested cuts in Class
III/IV prices, his testimony was disallowed following objections from fluid
processors’ lawyers. Now the dairy co-op lawyers are scrambling to have another
hearing to try to avoid dropping all classes of milk.
Reduced MILC Gets OK (p. 1):
The Milk Income Loss Contract program has been reauthorized.
But the payment level has been reduced from 45% to 34.9% of the difference
between a Class III price of $13.69/cwt. and anything lower.
“Make Allowance” Hearing’s Incompetence Needs “Take 2” (p.
2):
The FMMO hearing that started on January 24 was a complete.
USDA’s economic impact analysis—printed in the January 5, 2006 Federal
Register—dangerously understated the economic impact, in The Milkweed’s
analysis.
DFA Lawyer Warns Jury: Don’t Overpay Dean Mom’s Kids! (p.
2):
In June 2002, a DFA milk truck driver’s inattention killed
three generations of a family (grandmother, mother, and 10-month old infant son)
in Kentucky. In a jury trial to determine damages to the surviving children,
DFA’s lawyer argued that the jury shouldn’t pay the children too much money
because that would rob the children of their ambitions! Consider the source.
Agri-Mark Puts $.30/Cwt. Reblends on Members (p. 3):
Effective January 1, Agri-Mark—the major dairy co-op in New
England—increased its marketing loss deductions to a total of 30 cents per cwt.
The Milkweed analyzes what’s behind Agri-Mark’s failure to profitably manage
members’ investments in their co-op. (Hint: Too many economists running the
co-op.) White House Hog-Tying DOJ Antitrust Probe (p. 4): In our analysis, the
Antitrust investigation of Dairy Farmers of America (and various partners) by
the U.S. Department of Justice is being blocked by White House political
intervention. After all … DFA and Dean Foods are “friends” of W.
Did Kraft/Philip Morris Scientists Cross-Research
Food/Tobacco Additions (p. 4):
We summarize a January 29, 2006 story in The Chicago
Tribune about how tobacco lawsuit documents show that tobacco scientists for
Philip Morris and food technologists for Kraft Foods shared information about
using brain scan technology to learn about addictive properties of tobacco and
food. Is Philip Morris “spiking” your Cheez Whiz?
Freund Family Farm Adds Value to Manure (p. 6):
In northwestern Connecticut, the Freund family dairy farm is
finding multiple values for manure. They capture the methane from decomposing
manure liquids to heat the farm house and the hot water supply for their dairy
barn. And they’re making “cow pots” for starting seeds out of some of their
manure solids. Inventive!
Monsanto’s ‘Posilac” Problems Not Over (p. 7):
A recent filing by Monsanto with the Securities and Exchange
Commission shows that Monsanto continues having problems producing syringes full
of its synthetic, milk-inducing cow hormone.
Best Dairy Policy that Lobbying Money Can Buy (p. 8):
Writer John Bunting traces the money flow from major dairy
groups (processors and co-ops) to answer the question why our elected officials
ands bureaucrats in Washington, D.C. keep “getting it wrong” in regard to
federal dairy policies. Example: Dean Foods spent $1,275,000 lobbying in
Washington, D.C. in 2004.
When Common sense Came to a Milk Order Hearing (p. 9):
Write Joel McNair pokes fun at the federal milk order hearing
process by writing a fictitious account of an exchange between Wisconsin farmer
Joe Holstein and Agri-Mark economist Bob Wellington. Joel’s fictitious farmer
suggest he wants a “make-allowance” to under gird his dairy farm from losses.
National Dairy Livestock Price Map (p. 10):
Springers in some eastern markets are slipping back $100-150.
But out west, prices for springers are stronger. Livestock marketers agree that
demand for dairy calves is stronger.
Dairy Direly Needs … (p. 11):
Pete Hardin lays out the “basics” of what dairy needs to do
to get a fair price for producers, starting with an honest cash market for
Cheddar.
January 2006
Issue No. 318
Feature Story: See
Pizza Cheese Update
Gerald Bos, DFA’s ‘Rasputin,’ Departs Abruptly (p. 2):
Gerald Bos, who has served as chief financial officer of DFA
(and its predecessor co-op, Mid-America Dairymen) since 1979, had his
“retirement” retroactively announced on January 3. Bos leaves amid a whole bunch
of financial problems and “junk” status for some of the co-op’s notes. The rats
are jumping ship.
WTO Path Unclear with Hong Kong Deal (p. 2):
A last-ditch effort at the recent ministerial conferences at
the World Trade Organization in Hong Kong resulted in agreement to end farm
subsidies by 2013. Hard to get a reading right now on what all this means.
Dean Foods Takes Back Tennessee Producers (p. 3):
Effective January 1, Dean Foods “took back” from Dairy
Marketing Services (a DFA joint venture) all of the independent producers in
Tennessee. We see this move by the nation’s largest fluid milk processor as a
start of much wider procurement of “independents” … three years after Dean Foods
dumped its producer milk supply.
Agri-Mark, Allied Target April 1 Merger (p. 3):
Two Northeast dairy co-ops—Agri-Mark and Allied—are aiming
for merger April 1. Allied doesn’t have a lot of choices.
Richard Burroughs, DVM: On FDA and Posilac (p. 4):
Dr. Richard Burroughs, while at the FDA, publicly criticized
the animal safety testing procedures for dairy cows injected with the then
experimental hormone—rbGH. For the first time since leaving the agency,
Burroughs lays out his concerns to public.
Foggy Details, Big Plans for Richmond, IN Dairy Plant (p.
5):
The taxpayers of Wayne County, Indiana are on the verge of
turning over 26 acres in the industrial park in Richmond, Indiana to a
individual who filed bankruptcy in 1994 with $12,150 in assets and $2,847,445 in
debts. How many shots did this fellow put into a man in front of a St. Paul,
Minnesota police station in 1989?
Fossil Fuel Reliance: “Burning Buried Sunshine” (p. 6):
Writer John Bunting looks around and ahead at our energy
realities. Bunting unearths a study that estimates global fossil fuel
consumption burns up 400 years’ worth of “stored sunshine” ANNUALLY!
Heifer Demand STRONG, Prices Rising for Good Animals (p.
7):
A real scarcity of available dairy heifers exists in the U.S.
Buyers are scrambling all over the country, trying to find good dairy animals.
Buyers are being burned by heifers carrying twins as well as “Free Martins”
(reproductively sterile females). The Milkweed explains how resurgent use of
“Posilac” (Monsanto’s cow growth hormone) has spurred the problem of “Free
Martins.” Suggested: Premiums for “rbGH-Free” heifers.
Wal-Mart Ad ‘Tells It All” (p. 8):
We chuckle over an advertisement in a Texas dairy paper in
which Wal-Mart claim: “Remember Who Brought Low Prices to the Heart of Dairy
Country.” Amen.
MILC Extension Awaits Bush OK (p. 8):
Congress finally reauthorized the Milk Income Loss Contract
program—after the program expired late last September. The MILC program is part
of a comprehensive budget bill awaiting signature at the White House.
The Future Isn’t What They Think (p. 9):
Writer Joel McNair analyzes models for success and the
opposite for future dairy farmers.
National Dairy Livestock Price Map (p. 10):
Only The Milkweed reports a national map showing dairy
livestock prices in nearly a dozen and a half sites.
Energy: Future Dairy Farming Opportunity (p. 11):
Pete Hardin explains how dairy farmers are uniquely poised to
harvest both food and energy in the future—in great part thanks to that unique
food-producing critter—the dairy cow.
DOJ: Take Over DFA (p. 11):
Pete Hardin editorializes that the U.S. Department of Justice
should take over Dairy Farmers of America as a “corrupt organization”—just like
DOJ did to the Teamsters’ Union after old Jimmy Hoffa got kicked out. DFA’s
financial instability is too great a potential danger for the nation’s dairy
industry to endure, if DFA’s creditors seize assets.
USDA/FSA “Bounty System” Paid Employees on Foreclosures (p.
11):
Loan officers of USDA’s Farm Services Agency are paid a
“commission” when they foreclose upon delinquent borrowers. This article quotes
the actual percentages of compensation (based on farm value) paid to FSA loan
officers after a foreclosure. Stalinist.
Cash Cheddar, Butter Prices Decline at CME (p. 12):
Both Cheddar and Grade AA butter have declined in the past
month at the Chicago Mercantile Exchange’s cash markets. USDA’s monthly data for
milk production and dairy products manufactured do not add up. We think there’s
less milk out there than USDA reports for recent months.
December
2005 Issue No. 317
USDA Dairy Commodity Numbers Make No Sense (p. 1):
October 2005 USDA dairy data present the clearest case yet
that the government’s dairy numbers don’t add up. A lot more farm milk
production (+4.1%) doesn’t square with just +0.9% more total cheese production.
We do not see corresponding increases in other commodities. USDA’s Cold Storage
report for 10/31/05 shows continued declines in cheese inventory totals
(compared both to the prior month and same month-year ago).
ERROR ALERT!!! Comments on Ice Cream Standards Need Docket
Number (p. 1):
Last month, we failed to give the Docket Number for persons
commenting to FDA on proposed ice cream regulations.
That NECESSARY Docket Number is #2003-P-0132.
Canadian Study: Processed Cheese Products from UF Milk Have
Less Calcium, Energy (p. 2):
The Consumer Interest Alliance, commissioned by Dairy Farmers
of Canada, has studied nutritional profiles and consumer expectations about
cheese products. Consumers are appalled that cheeses could be made from milk
ingredients, not milk. And scientific studies of calorie content and calcium
levels in Kraft “Singles” show that these products (made from UF) milk are below
legal Canadian standards.
Foremost Cuts Southern Wisconsin Pay Prices (p. 2):
Foremost Farms’ producers in southern Wisconsin noted lower
pay prices for October milk, due to their co-op paying lower “other solids,”
below the federal milk order “Producer Price Differential” and additional
deducts for hauling.
Hilmar to Build Huge West Texas Cheese Plant (p. 3):
The Milkweed analyzes the recent announcement by California’s
Hilmar Cheese that the firm will build a 10-million-lb. per day cheese plant in
Texas’ panhandle, 65 from Amarillo. Many important factors lie behind plans for
this mega-plant, including what’s becoming a “reverse migration” out of
California. Must reading!
DFA: More Transportation Credits for SE Orders (p. 3):
The incompetents at Dairy Farmers of America have requested
that USDA hold an emergency hearing to discuss a proposal for increased hauling
credits to bring in supplemental milk. Trouble is: DFA isn’t keeping its costs
down and isn’t charging enough money for raw milk.
DMS Shafting NY &PA ‘Independent’ Producers (p. 4):
Dairy Marketing Services (a crooked bunch) ripped off dairy
producers in east-central New York by shifting the transaction site of milk from
Boston to Upstate New York. DMS also screwed three of the four Pennsylvania
producers who’d objected in late August about DMS taking over their milk market
from Farmland Dairies. Those three producers received identical, low butterfat
tests with the records hand-written (over-riding computerized testing and
barcode reporting systems). So much for “free speech” if that speech criticizes
DMS or DFA.
IGF-1 Human Health Questions Return (p. 4):
The New York Times recently reported serious questions about
a secondary hormone associated with use of recombinant bovine growth hormone
injected into dairy cows to make them more milk. That secondary hormone—IGF-1—is
associated with several types of human cancers.
Adios, Gary. Take It Personally! (p. 5):
The Milkweed takes final potshots at retiring DFA CEO Gary
Hanman. If you don’t subscribe, you’ll never know why, several years ago, this
publication advised Hanman to seek the help of a professional proctologist!
MD/VA Dissidents Deliver Petitions, Hire Lawyers (p. 5):
Angry members of Maryland and Virginia Milk Producers
Cooperative Assn. (MD/VA) have collected more than 150 members’ signatures on
petitions to call a special meeting of the co-op. They hope to learn more
details about the proposed sale of their co-op’s main asset—a milk powder plant
and 200 acres of adjoining real estate at Laurel, Maryland. Angry members have
hired a high-powered law firm, with implications being that co-op directors face
potential lawsuits if they don’t handle the Laurel sale right.
Saputo Making Suspicious Moves (p. 5):
Saputo Cheese—the Canadian firm that produces Italian-style
cheeses, is seeing compromised operations. Saputo’s Hancock, Maryland plant is
suffering repeated mechanical breakdowns—curtailing cheese output. In the
Midwest, Saputo is begging for extra milk—right after it cut prices to raw milk
sellers. Huge quantities of “starter” continue to come in the U.S. from Canada
(Saputo).
Feature Story #1 - Pizza Huts Don’t “Got Mozzarella” Atop Pizzas (p. 6):
Feature Story #2 -Take Pizza Hut to the Woodshed (p. 11):
Following up on
Paris Reidhead’s must-read feature story above, Pete Hardin explains how Pizza Hut’s mislabeling of
non-standardized product as “Mozzarella” on its menus presents a good
opportunity for real friends of the dairy industry to get active and humble this
corporate giant. Get active! Read more on how you can make a difference
here.
FDA Catering to the Big Boys with UF Proposal
(p. 7):
FDA is catering to special interests in its proposal to
approve Ultra-Filtered (UF) milk for use in manufacture of standardized cheeses.
Japanese to Allow Imports of U.S. Beef (p. 8):
Japan will soon be allowing U.S. beef to enter that country.
Trouble is: three-quarters of Japanese consumers surveyed state they don’t want
to eat U.S. beef.
Rick Smith Named DFA CEO/President (p. 8):
Rick Smith will have all the top responsibilities at DFA.
Effective January 1, Smith will be CEO, president, and chief operating officer.
Chickens Coming Home to Roost (p. 9):
Columnist Joel McNair comments on several matters: global oil
reserves may be much less than originally imagined; prices paid to Organic dairy
producers in the Northeast could approach $27/cwt.; and how the big boys are
trying to control organic markets.
Commodity Prices Remain Frustratingly Low (p. 12):
Despite lower numbers for cheese and butter production and
inventories, commodity prices at the Chicago Mercantile Exchange remain very,
very low.
November
2005 Issue No. 316
Feature Story #1 - Help Stop
FDA’s Plan to Put ‘Mystery Milk’ in Ice Cream (p. 1):
The federal Food and Drug Administration (FDA) is soliciting
comments from consumers until December 27, 2005, on proposed changes in U.S. ice
cream standards. Read Pete Hardin’s story
revealing how the International Ice Cream Assn. (IICA, the trade lobby) wants to
dramatically change standards for dairy ingredients that would “dumb down” the
quality and safety of ice cream.
DOJ Beats DFA on Southern Belle Appeal (p. 1):
On October 24, the federal Appeals Court in Cincinnati ruled
that a summer 2004 decision by a federal judge in Kentucky was wrong. The
Appeals Court agreed with the U.S. Department of Justice’s claim that DFA’s
half-ownership in the only two competing fluid milk processors in southern
Kentucky is a potential Antitrust violation. The issue will now go to trial.
Dean Foods Preparing to Sell Some Dairy Plants (p. 2):
We analyze reports that Dean Foods is preparing to sell off
fluid milk plants along the East Coast, from Atlanta to New Jersey.
DFA’s Partners Netted $91.7 Million!!! (p. 2):
Two DFA “partners” in fluid milk processing businesses—Robert
Allen and Allen Meyer—collectively netted $91.7 million selling to DFA interests
in firms they jointly held with DFA. One deal each netted this pair $91.7
million—that total is more money than DFA ever claimed to have made in any
fiscal year.
FDA Proposes UF Milk for Standardized Cheeses (p. 3):
FDA has recently proposed allowing Ultra-Filtered (UF) milk
to be used to manufacture standardized cheeses (like Cheddar). Writer John
Bunting analyzes many errors in FDA’s recommendations, which were published in
the Federal Register. Example: a 24-year-old article about nutritional quality
of cheeses made from UF milk reported all samples but one had deteriorated
severely at 32 weeks.
Maryland/Virginia Co-op Members to Battle Bylaw Changes (p.
4):
Before Christmas, the leaders of Maryland & Virginia Milk
Producers Co-op want to sell that co-op’s biggest asset—a milk powder plant and
adjoining 200 acres of real estate in the Washington, D.C. suburb of Laurel,
Maryland. Estimated value: between $50 and $100 million. But the co-ops board is
proposing bylaw changes that would shift power to determine how to allocate the
net proceeds from that sale. The board wants to grab that power from the
members, through bylaw changes.
DMI Funding Mucho MPC Research (p. 5):
Why are dairy farmers’ promotion dollars funding research
involving milk protein concentrates?
Andy Rooney Blasted Chemical-Laden ‘Half and Half’ (p. 5):
CBS television’s 60 Minutes commentator Andy Rooney got angry
and blasted all the chemicals and fillers in “Half and Half.” Rooney concluded:
“My suggestion, if they want to sell more milk, is that they go back to selling
what comes out of a cow.” AMEN!
Holiday Milk Dumping Likely in Northeast (p. 5):
Many dairy plants have closed in the Northeast in the past 18
months. At the end of December, when fluid milk plants take in minimal amounts
of milk, it’s predictable that the remaining cheese and nonfat dry milk plants
will not be able to handle all the milk in the region. Trucking, diesel fuel,
and out-of-region plant space will all be major headaches for those trying to
find a home for holiday milk.
Southwest Cheese Opening Will Rock Industry (p. 6):
In early 2006, the nation’s biggest American cheese plant
will hit full operating capacity in Clovis, New Mexico. Writer John Bunting
explores many aspects of this newly opened cheese plant and some of its impacts
on our cheese industry.
Rumor: Dean Foods to Solicit Direct Milk Supply (p. 7):
Dean Foods is preparing to “go back to the country” for its
own farm milk supply in early 2006. Three years ago, Dean Foods “dumped” its
dairy farmers into a disadvantageous market with Dairy Marketing Services (DMS—a
DFA clone). Many reasons—from DFA’s financial problems to intense Antitrust
scrutiny—mean it’s wise that Dean Foods regain its own supply of milk.
Wisconsin Bumbles into Livestock Premises ID (p. 8):
“America’s Dairyland” is the first state in the nation to
enact mandatory registration of premises housing livestock and poultry. This
mandate is an experimental program to give health authorities a registry of
sites where various types of creatures are located, in the event of an epidemic
(like Asian Avian flu). Trouble is: the politicians and their cronies are really
screwing up this program. The Wisconsin Livestock Identification Consortium,
which operates on millions of dollars of government grants, recently claimed
that persons who didn’t register face penalties from $200 to $5000! Meanwhile,
the state's Amish farming community's leaders warn that this program is the
first step down the path towards the feared "Mark of the Beast" warned about in
the Book of Revelations!
Foremost Farms Offers $2.20/cwt. Premiums (+Cheap Hauling)
to Big Wisconsin Dairies (p. 8):
Desperate for milk to fill its big, recently-remodeled cheese
plant in Richland Center, Wisconsin, Foremost Farms is offering premiums of
$2.20/cwt. to mega-dairies in Wisconsin … plus cheap hauling ($.15-.20/cwt.).
That kind of money won’t come out of the price for cheese.
The Real Reasons Why Autumn Prices Fall (p. 9):
Writer Joel McNair analyzes why for five of the past seven
fall seasons, commodity Cheddar prices have collapsed at the Chicago Mercantile
Exchange. What’s up? The “big boys” are milking dairy’s pricing system by using
imports to seasonally break prices.
Feature Story #2 - NOT In OUR
Ice Cream! (p. 11):
Read Pete Hardin’s Straight Talk editorial
urging you to study and register your opposition to FDA regarding
proposed changes that would legalize the use of imported “mystery milk” in
federal ice cream standards. Also see Feature Story #1 above.
Ugly: Cheddar and Butter Prices Erode at CME (p. 12):
CME cash prices for Cheddar and Grade AA butter have eroded
even further. What’s to blame? Pete Hardin points the finger at imports of dairy
ingredients and high-protein “cheese starter.”
PLUS … ADDITIONAL STORIES IN OUR NOVEMBER ISSUE’S SPECIAL SECTION!
GM Alfalfa Approved … Without Animal Feeding Tests (p. A):
Writer Paris Reidhead details how USDA has approved
Monsanto’s genetically-modified alfalfa. But no feeding tests have been
conducted on cattle or horses. BEWARE!
Feature Story #3 - What Soybean Processors
Don’t Tell Us (pages B and C):
Ninety-five percent of all soybeans processed into meal and
oil in the U.S. are treated with massive quantities of Hexane—a volatile organic
compound that is both a neurotoxin and a carcinogen. Writer Paris Reidhead
explores how soybeans are processed, details about Hexane, and why the soybean
processors don’t want to talk about using this dangerous chemical to manufacture
products consumed by humans and animals used for human food production. Read the
complete story here.
Dairy on Collision Course With Deficits, Free Trade (p. C):
Dairy farmers should beware of “Free Trade” concessions that
may be offered as the Bush administration leading up to the “Hong Kong”
ministerial meeting of the World Trade Organization talks in December. ”Free
Trade” is falling apart, and that makes this desperate White House all the more
dangerous to succeed, by burning dairy farmers’ interests at the altar of “Free
Trade.” Deficits also drive government’s will to reduce farm programs.
Setting the Record Straight on Butterfat (p. D):
Long-time New York State farm broadcaster (and true friend of
farmers) Ed Slusarczyk explains the upside of butterfat and the downsides of
vegetable-based fats in the human diet. Ed really speaks up for dairy products
in the diet!
October
2005 Issue No. 315
CME Cheddar Prices Drop, Energy Costs Soar (p. 1):
Dairy farmers are looking at least a couple tight months, as
Cheddar prices have dropped at the Chicago Mercantile Exchange at the same time
that energy prices are soaring.
Feature Story #1 - Agri-Mark: Make Producers Pay Rising Plant Costs (p.
1):
Making Farmers Pay Off-Farm Coasts: Systemic Failure (p.
2):
Milk hauling and dairy plant operating costs are
skyrocketing, due to higher energy costs. Trouble is: in dairy’s usual way,
marketers are looking to dump off-farm energy costs on the farmer. Failure to
pass higher costs up the marketing chain, instead of back down to the farmer, is
begging for trouble.
MILC Program Expires (p. 2):
On September 30, USDA’s “safety net” for dairy farmer
income—the Milk Income Loss Compensation program—died. Doubtful that it can be
revived, given Washington’s financial mess.
Plant Closings Leave Balancing Headaches in Northeast (p.
3):
Ouch. During the past year-plus, a series of dairy plant
closings in the Northeast has dramatically diminished daily manufacturing plant
and milk silo capacity. The Milkweed estimates that five to six million
lbs. of daily processing capacity and eight to ten million lbs. of storage
(silo) capacity have been lost—putting raw milk marketers in a big bind on
weekends, holidays and spring flush.
Saputo Closing Whitehall, PA, Plant (p. 3):
Saputo Cheese will close its Whitehall, PA Italian cheese
plant at the end of October, removing a million lbs. a day of critical
manufacturing capacity.
Antitrust Investigation Studying DFA/National Dairy
Holdings (p. 4):
The current round of interviews by Antitrust investigators
focuses on the relationship between DFA and National Dairy Holdings (DFA’s fluid
processing subsidiary).
Goat/Sheep Min in Ice Cream: FDA Wants Public Comments (p.
4):
In September, the federal Food and Drug Administration
published a proposed rule in the Federal Register, which calls for dramatically
changing standards for ice cream ingredients. “Other species” milk—such as from
goats, sheep, water buffalo, etc.—would be allowed into your ice cream if these
rules become law. YUK!
CNN’s Dobbs Calls DFA ‘Milk Monopoly’ (p. 5):
In late August, CNN’s news anchor Lou Dobbs covered DFA’s
monopolistic behaviors, focusing on a group of Pennsylvania dairy farmers whose
milk market was taken away by DFA’s subsidiary, Dairy Marketing Services.
More Media Stories Smack DFA Soundly (p. 5):
It’s been a tough past couple weeks for DFA with the press.
The Northern Colorado Business Review and the Knoxville (TN) News Sentinel
carried in-depth stories detailing DFA’s control of producer milk markets in
their areas.
Feature Story #2 - Lie & Deny: NMPF’s ‘MPCs
in Fluid Milk’ Role (p. 6):
The organization claiming to be the “voice
of America’s dairy farmers” wants to include Milk Protein
Concentrate (MPC) in Class I (fluid) milk through USDA’s federal milk order
pricing program! Read more about how National
Milk Producers Federation (NMPF) and its member co-ops propose to “garbage”
fluid milk products by including MPCs in beverage milk.
More Than Meets the Eye with Fluid Demand Decline (p. 7):
Writer John Bunting analyzes annual fluid milk purchases on
an income basis and concludes that declining financial status in the lower
income groups has caused a big decline in their fluid milk purchases.
CROPP’s Processing, Marketing Costs Through the Roof (p.
7):
John Bunting analyzes the internal data on fluid milk costs
for CROPP—the organic co-op that operates under the “Organic Valley” label. Hard
to see how CROPP can profitably compete against the “biggies” (Dean Foods, H. P.
Hood) when some of its costs are astronomical, compared to industry figures.
UW Professor Blows Smoke on Milk Protein Concentrates (p.
8):
Mark Johnson, senior scientist at the Wisconsin Center for
Dairy Research, claimed on the national “Dairyline” radio program that cheese
made using Milk Protein Concentrate has no defects of quality or flavor! What a
stretch!
NZ Facing Weather, Pay Price Problems (p. 8):
Dry weather in New Zealand at the beginning of that dairy
island nation’s pasture season raises questions about export volumes of
manufactured dairy products available in 2006.
Way Too Energy Intensive (p. 9):
Joel McNair takes a hard look at the energy-intensive nature
of the U.S. dairy industry and concludes that those who fail to adjust are in
for shocks.
“Ingredientized’ Nightmare (p. 11):
Pete Hardin gives both barrels to the organizations and
individuals who want to “dumb down” our dairy products by substituting
ingredients (often imported) for good, old U.S. of A. milk. Fluid milk, cheese,
ice cream—all of these dairy commodities are under attack from the “ingredients”
lobby.
Cheddar Prices Drop Sharply; Butter Also Down (p. 12):
Cheddar prices at the Chicago Mercantile Exchange have
dropped seriously in the past month—down into the very low “$1.40s”. But data
shows American cheese inventories declining, butter inventories relatively low,
and milk powder tight. Since April 2005, imports of cheese and butter have
declined significantly.
September
2005 Issue No. 314
Katrina Raises Great Questions, Challenges (p. 1):
The impact of Hurricane Katrina upon U.S. energy
sources/distribution, as well as the storm’s impact upon grain producers, are
discussed. The nation is in for several long months.
Agri-Mark Wants to Lower Federal Order Class III Prices (p.
2):
Agri-Mark, the major dairy co-op in New England, wants to
lower prices paid by cheese plants for Class III milk in the federal milk
orders. Agri-Mark is boo-hooing about an alleged $.52/cwt. difference in 2004
between California cheese milk prices and FMMO prices. That’s an irrelevant
statistic, for many reasons. Why do the co-ops repeatedly take money out of
farmers’ milk checks to cover their marketing problems?
Fluid Milk Sales Nose-Dived in 2004: (p. 2):
Last year, fluid milk sales tumbled more than one billion
lbs. That’s a decline of about 2%, on a per capita basis. Fluid milk marketing
and promotion efforts stink.
Dean Foods Takes ‘Independent’ Producers in Tennessee (p.
3):
Starting on September 1, Dean Foods began accepting milk from
about two dozen “independent” producers for the company’s Barber Dairy plant in
Alabama.
SMA Can’t Resolve Operating Problems (p. 3):
The Southern Marketing Agency has failed to substantially
revise its fluid super pool program for the Southeast and Appalachian federal
milk orders. Big losses will continue. Stability of SMA is in danger. Losses
have totaled more than $1.00/cwt. for each of the past couple fall seasons.
Real Problem is Imports, Not U.S. Milk Production Increases
(p. 3):
John Bunting shows how the problem for stagnant cheese prices
is a dramatic increase in dairy imports, not U.S. milk production, during 2005.
CNN’s Lou Dobbs Blasts DFA (p. 3):
Kapow! See our Web site for the transcript of Lou Dobbs’
blast at Dairy Farmers of America, the “Milk Monopoly.”
Did DMS’ Failure to Provide Audits to Farmland Producers
Violate NY Law (p. 4):
Citing NYS Ag & Markets law, The Milkweed reveals how this
summer’s takeover of Farmland Dairies “independent” producers by Dairy Marketing
Services violated the law in New York State that requires co-ops provide their
most recent financial audit before entering into a milk marketing agreement with
producers.
Feature Story #1: Raw Milk, Cow–Share Dairy
Nets $500 Per Cow Per Month (p. 5)
Read Pete Hardin’s report here
about the dairy near Medicine Lake, Washington that posts net profits (excluding
labor) of $500 per month … per cow!
Katrina Disrupts Gulf Coast Energy Infrastructure (p. 6):
John Bunting analyzes the percent of U.S. energy
infrastructure (petroleum, natural gas, import capacity) located in the Gulf
Coast region. Over half of all U.S. oil imports enter through Gulf of Mexico
ports.
Katrina’s Aftermath Will Change Dairy (p. 7):
The run-up in energy costs is a major factor driving up costs
at every level in the U.S. dairy industry. From energy costs and availability,
to anticipated higher interest rates, Katrina’s impact will be massive.
Louisiana Dairyman Explains Katrina’s Havoc (p. 7):
Jerome Walker of Franklinton, Louisiana discusses his
experiences with Katrina and all the headaches of milking his cows for more than
a week without electric service. He kept things going … mostly … using his old
IH-986 tractor to power a generator.
DFA/NMPF Want MPCs in Fluid Milk (p. 8):
At a federal milk order hearing in Pittsburgh, PA in late
June 2005, National Milk Producers Federation and Dairy Farmers of America
testified in favor of allowing MPCs to be used in Class 1 (fluid) milk products
and valuing those proteins at the Class 1 price. MPCs in fluid milk? GAG!
Katrina Shows We’re All Frogs in the Frying Pan (p. 9):
Joel McNair explains how we’d better get used to higher
energy costs and scarcity, in business and daily life.
National Dairy Livestock Price Map (p. 10):
Demand and prices remain strong for all ages of female dairy
animals.
Feature Story #2: Kick Co-ops That Support
MPCs in Fluid Milk (p. 11)
In this month’s “Straight Talk” column, Pete Hardin
states, “Bad enough that “they” have screwed up the flavor and quality of cheese
with foreign MPCs! Now look what “they” (NMPF and DFA) want to do to our fluid
milk!” Read the full story here.
Dairy Heading into Uncertain Supply-Demand Times (p. 12):
Both the milk supply and consumer demand are hard to project,
in light of bad weather and tough economic times ahead. Pete Hardin explores the
dairy commodity scene. Hint: Watch out for butter prices in the next couple
months!
August 2005 Issue No. 313
Tight Milk, Commodity Situation Directly Ahead (p. 1):
Hot, dry weather is taking its toll across the board in
agriculture. Milk production this summer is down in many parts of the country.
The U.S. grain crop is in trouble. Dairy is on the verge of a run-up in
commodity and farm milk prices, The Milkweed projects.
Hanman Gives Up Some DFA Duties (p. 1):
DFA’s corporate executive committee is taking away
responsibilities from long-term Great Leader Gary Hanman. At a heated meeting in
mid-July, that committee named Rick Smith the newly-minted “President and Chief
Operating Officer,” effective August 1.
Feature Story: DFA Bosses at Fancy Maine ‘Lobsterfest’
(p. 2):
DFA’s senior executives and corporate directors recently enjoyed a
posh “retreat” on the Maine coast in late July that lasted almost a week … right
after DFA members in Louisiana and Tennessee received settlement checks for June
2005 milk deliveries that showed payments of $1.61 and $1.30 per cwt.,
respectively, below the prevailing federal milk order statistical uniform
prices. Read editor/publisher Pete Hardin’s story of the month here.
Big Reblend for DFA Members in Southeast (p. 2):
For June 2005, DFA members in Louisiana paid “reblends” of
$1.61/cwt. under the blend price (not including any hauling). In Tennessee, the
DFA June reblend was $1.30/cwt.
Continuing, Huge Losses Destabilize SMA (p. 3):
The Southern Marketing Agency (SMA—the Southeast “not-so
super pool”) during August is studying “efficiencies” to try to tighten
operations and stop the Maryland/Virginia co-op’s threat to quit. It’s very
likely that SMA could collapse in late summer or early fall—causing a mad
scramble for supplementary milk to supply the Southeast.
Appeals Court Allows Canadian Slaughter Cattle (p. 3):
The Ninth Circuit Court of Appeals overturned a temporary
restraining order by a federal judge in Montana, making legal import of live
Canadian cattle for slaughter. Strangely, the appeals panel ruled that Judge
Richard Cebull was not adequately deferential to USDA.
Despite Higher Prices, Farmers Getting Price Shaft (p. 4):
Despite the ups and downs in Class I (fluid) milk prices
during the past 18 months, dairy farmers see retail price gains charged
consumers increasing faster than farm milk receipts.
R-CALF USA Challenges Beef Establishment (p. 5):
A trouble-making group of livestock producers is creating
turmoil in the beef industry by challenging the government and major livestock
organizations. R-CALF USA is quickly gaining membership as it targets “Free
Trade” and failure by groups to support and enact the mandatory “Country of
Origin Labeling” law. Guest contributor Jim Eichstadt does a good job portraying
R-CALF USA, its purposes and its leaders.
Farmland Dairies Producers Forced into DMS (p. 6):
In mid-July, the 400+ Northeast dairy farmers shipping to
Farmland Dairies were informed their milk marketing had been turned over to
Dairy Marketing Services, effective July 1. (DMS is a DFA joint venture.) At a
producer meeting in Unionville, New York on August 1, DMS personnel refused to
provide any financial information about DMS—not even a financial audit. The
impacted producers are steaming mad.
Agri-Mark Installs (Questionable) $.15/cwt. Deduct (p. 7):
On July 15, members of Agri-Mark (the big dairy co-op in New
England) received a letter informing them of a 15-cent deduct against their milk
income. Agri-Mark blamed a variety of factors, but primarily the $.52/cwt.
difference between California’s cheese milk price and the federal order Class
III (cheese) milk price in 2004. That’s bunk. Costs of transporting cheese from
coast to coast eat up all of that difference. Agri-Mark members deserve better.
$27 Base Prices ands Other Oddities from the Organic World
(p. 9):
Joel McNair explains how rising grain organic prices create a
need for something like a $27/cwt. base price for organic milk. If producers
don’t get that money, they’re not going to make organic product. Meanwhile, Joel
also wonders how long CROPP (the farmer-owned co-op) can battle in the fluid
milk ring against industry biggies Dean Foods and Hood.
Dairy Cattle Price Map (p. 10):
Dairy livestock trends are flat or somewhat weaker during the
past month. Factors pulling down prices somewhat include concerns about lower
than anticipated farm milk prices, as well as higher costs for purchased hay and
grain this winter.
Will Antitrust EVER Act? (p.11):
On his opinion page, editor/publisher Pete Hardin gives both
barrels to the Antitrust Division of the U.S. Department of Justice. Hardin’s
angry because 400+ producers got sucked involuntarily into Dairy Marketing
Services’ control in July. DOJ has been investigating DFA/DMS for a year, but
these dirty tricks continue. Hardin lists several actions DOJ can take now to
restore fair competition to the U.S. dairy industry.
Cheddar Prices Plunge, Butter Holds, NFDM Stronger (p. 12):
In the dairy commodity review, we note plunging Cheddar cash
prices at the Chicago Mercantile Exchange. However, heat/humidity … and low
inventories of butter and nonfat dry milk .. should pull up CME Cheddar prices
soon.
July 2005 Issue No. 312
USDA Botched, Covered Up Positive ‘Mad Cow’ Test (p. 1):
USDA covered up a positive test for BSE (“Mad Cow Disease”)
last November. A review of the department’s handling of the BSE issue found the
testing discrepancy. More and more, the federal government’s efforts to assure
the safety of the U.S. beef supply look like an “eyes wide shut” cover-up.
Shocking details are reported.
‘Hurricane Dean’ Avoid Hitting Florida (p. 1):
Last month, we reported on how Dean Foods was refusing to
renew the milk supply agreement for its Florida plants with Southeast Milk
Inc.—the local co-op. In late June, these parties finally met and Dean Foods
(embarrassed by the publicity) quickly renegotiated a deal for another year.
DFA’$ Partner$ Big-Buck$ Deal$ Exposed (p. 2):
Mega-MOO-LA! According to an investigative article in the
Chicago Tribune on June 20, Dairy Farmers of America paid spectacular
co-investors in fluid milk businesses. Bob Allen and Allen Meyer netted tens of
millions of dollars selling their shares of businesses back to DFA.
Dean Foods Wants to Regain Farm Milk Supply (p. 3):
Dean Foods is heading back to the country to recover its own
farm milk supply—only two and a half years after “dumping” its 2500 independent
producers into the klepto-clutches of DFA/DMS. Why?
Wholesale/Retail Price Spread Grows (p. 3):
Just during the first four months of 2005, supermarkets made
a killing on cheese, raising the “spread” between CME commodity prices for
cheese and butter by $.44/lb. and $.60/lb., respectively.
DFA-Owned Processors Bully Kentucky Co-op (p. 4):
A local co-op in southern Kentucky signed an annual milk
supply agreement with the Flav-O-Rich (owned by DFA) plant in London, Kentucky
on June 9. Five days later, Flav-O-Rich announced it would not honor that
contract. The co-op was forced to sign a deal with Southern Belle (also owned by
DFA). Federal Antitrust officials did not intervene.
Dairy Starting to Prepare for DFA Financial Collapse (4):
Some big parties in the U.S. dairy industry are starting to
make contingencies for THE BIG ONE. The Milkweed estimates that 40% or more of
all U.S. farm milk revenue courses through DFA’s financial web.
Big Bucks Paid for Heifers at Brush, Colorado (p. 5):
Top end prices for springing heifers and short-bred heifers
(east of the Rockies) have consistently been seen at the Brush Livestock Auction
in 2005. The Milkweed profiles this auction and its operators.
Feature Story: Industry Big Boys Want MPC
in Fluid Milk (p. 6)
USDA convened a public hearing June 20 in Pittsburgh on
proposed federal milk marketing order amendments that would include Milk Protein
Concentrate in the definition of Class I (fluid) milk. Read John Bunting’s
report on how this proposal supported by DFA
and other dairy industry big boys would be bad news for farmers and consumers
concerned about MPC. Also read Bunting’s testimony
presented at the hearing on behalf of the National Family Farm Coalition.
PCRM Lawsuit Targets Dairy’s Weight-Loss Ads (p. 7):
On behalf of a Virginia woman who gained a whopping TWO
POUNDS on a dairy-heavy diet advertised for weight loss, the Physicians
Committee for Responsible Medicine (a wacko animal rights group) has sued
various dairy promotion groups and private companies. TWO POUNDS! The Milkweed
explores the cozy relationships between PCRM and People for the Ethical
Treatment of Animals (PETA).
DFA Wants Big Confinement Organic Dairies (p. 7):
Dairy Farmers of America submitted comments to the National
Organic Standards Board this spring in favor of allowing big organic dairies to
be confinement operations, instead of requiring that cows have daily access to
pasture.
Stanford Prof Warns of Terrorists & ‘Toxic Milk’ (p. 8):
Egad, as professor from Stanford University is trying to
scare everybody, claiming terrorists will dump botulism bugs in milk tankers
while the driver is having breakfast. What crap! The federal government tried to
suppress this ridiculous report, which, when finally unveiled, was the lead
story in late June on ABC-TV’s evening news.
Beckendorf to Sell Farm/Cows? (p. 8):
Round Tom Ball, Texas, DFA corporate big-wig (and National
Milk Producers Federation board chairman) Charles Beckendorf wants his family to
sign over title to the family dairy estate so he can sell it privately. Is this
big-wig getting nervous feet about director liability?
USDA’s BSE Boondoggle. Slapstick … or Sinister? (p. 9):
Joel McNair gives USDA both barrels of his .10-gauge shotgun
on the mishandling of the ‘Mad Cow’ testing. He questions what the federal
government’s real motives are in its failed BSE safety oversight, what with all
the former beef industry executives atop USDA.
Grasping for Fundamentals (p. 11):
MPC in Class 1 milk? Pete Hardin explores some critical
questions in dairy pricing and product standards: What is milk? What is cheese?
How to properly price cheese? How to properly price farm milk? Dairy needs to
honestly address these issues, before farmers (and consumers) have a fair shake.
Butter Inventories Shrink, Prices Rise (p. 12):
Don’t be fooled by short-term aberrations in monthly milk
supply data. Butter and nonfat dry milk supplies are tight, as we head into the
second half of 2005.
June 2005 Issue No. 311
Feature Story:
Dean Foods Isn’t Renewing Florida
Supply Contract (p. 1):
Tensions between milk suppliers and processors in Florida and the
Southeast are in danger of blowing wide apart. In late May, Dean Foods, the
nation’s largest fluid milk processor, notified Southeast Milk, Inc. (SMI) that
Dean is not renewing their annual raw milk supply agreement starting July 1.
Read all about it here in Pete Hardin’s story
of the month.
Forage Woes Across Much of U.S. (p. 1):
Many major dairy regions of the country are experiencing
problems with the 2005 forage crop. Too wet. Too dry. Too cold. Name it.
Forage quality and quantity are key to the coming year’s milk production.
Stonyfield Yogurt
Wants NZ Organic Ingredients (p. 3):
New Hampshire’s
Dep’t of Agriculture has been requested to send an inspector to approve New
Zealand dairy farms and plants to meet U.S. organic standards. Stonyfield Farm
Yogurt—owned by the giant French firm Danone (Dannon to us hicks)—can’t get
enough U.S. organic milk so wants to import organic ingredients from 12,000
miles away.
DFA Issues Contradicting Claims about
Financial Performance (p. 3):
Stung by a weekly “Farm & Food File” column by Alan Guebert,
DFA’s board chairman Tom Camerlo issued letters to the editor, claiming DFA’s
finances are “healthy.” Funny thing, in mid-May, DFA’s Mountain region sent out
a letter to members, explaining the 53-cent/cwt. difference between the April
2005 Central States milk order PPD of 53 cents at Denver and the DFA PPD of ZERO
for that month.
Imports Still Pounding Dairy (p. 4):
John Bunting analyzes how 2005 dairy import trends are
holding down U.S. dairy commodity (and farm milk) prices. Unbelievably … New
Zealand is importing milk powder into the U.S. at prices nearly a dime per pound
higher than what the nation’s illustrious dairy co-ops are export it for
(through New Zealand)!
Proposed Pooling Change Would Hurt
Producers in Orders #5 & #& (p. 4):
DFA and its related shyster co-ops have asked USDA to
eliminate the “first day” pooling rules for farm milk in Order #5 (Appalachian)
and Order #7 (Southeast). Removing that requirement would allow co-ops to dump
massive quantities of outside milk on those orders—further lowering blend
prices.
Draconian Measures Proposed for Dairy
‘Food Security” (p. 5):
Egad. Consultants hired by the Defense Department want to
use drone airplanes over dairy farms and mandate high security fences around
areas where dairy cows are located. D-U-M-B.
NZ “Powdergate’ Still Simmering (p 5):
It’s a scandal
“down under” … dairy-based materials listed as animal feed were exported to the
U.S. (and other nations) and used for human food consumption.
Supreme Court Upholds Beef Checkoff (p.
6):
On May 23, the
U.S. Supreme Court determined that USDA’s beef promotion checkoff was
“government speech” and thus did not violate the First Amendment rights of
livestock farmers who pay for this program.
DFA’s Corporate Jet Contrail: Follow the
Money (p. 7):
DFA has a “dummy” corporation that owns a corporate jet worth
about $10 million. Flight plans filed with the federal government show a lot of
fancy politicians have been airlifted around the country.
Hearing Proposals: Put MPC in Class I (p.
7):
A national milk order program
will start in Pittsburgh on June 20, seeking to redefine fluid milk. Various
proposals call for including all dairy ingredients (including imported caseins
and Milk Protein Concentrate) in Class I (fluid) beverages that compete with
milk. Dangerous precedents at hand. More next month!
Kraft Gains Patent for Process Cheese
with Soy (p. 7):
Barf. On May 17, Kraft Foods received U.S. patent number
6,893,674 for “Processed cheese made with soy.”
Where’s FDA’s ‘Science’ for Raw Milk? (p.
8):
Raw milk—increasingly popular as a consumer product (and
highly profitable to dairy farmers who sell it)—is under intense scrutiny from
federal and state officials. But writer John Bunting discusses the lack of
scientific evidence against raw milk consumption.
FDA/USDA: Dump Food Standards Rules (p.
8):
USDA and the federal Food and
Drug Administration are proposing to dramatically change the way U.S. food
standards are set and changed. The government agencies want to be able to make
changes strictly based on government regulators’ fiat.
Government Speech and Checkoff Speech:
Both Hot Air (p. 9):
Columnist Joel McNair gives
both barrels (.10-gauge, double 0 buckshot) to the ridiculous Supreme Court
Decision that recently ruled the beef checkoff program was “government speech.”
They’re both full of hot air.
Dairy Cattle Replacement Price Map (p.
10):
Dairy livestock
prices remain strong. Prices for top-end baby calves are heading into the
$700-800/head range in several states around the country.
Where is Dairy Headed (p. 11):
Pete Hardin lists
a wide range of government actions (and inactions) that are harming U.S. dairy
farmers, consumers, product quality and consumers’ interests.
Dairy Commodity
Picture Not Very Clear (p. 12):
Signals from dairy
cash markets at the Chicago Mercantile Exchange are not pretty right now. The
dairy commodity scene is hot clear right now, but The Milkweed projects
very tight U.S. milk supplies in the second half of 2005.
May 2005 Issue No. 310
Feature Story:
Moody’s Says DFA ‘Weak,” Lowers Credit
Ratings (p. 1):
On May 9, 2005, Moody’s Investors Service issued revised,
downgraded ratings for various types of borrowings by Dairy Farmers of America.
Four separate times in the text of Moody’s announcement, the financial ratings
firm referred to various aspects of DFA’s finances and management as “weak.”
Read all about it here in our “article of the
month.”
U.S. Justice Department Looking at CME Trading (p. 1):
The New Case Division of the United States Department of
Justice has started looking at complaints of manipulation of cash Cheddar prices
at the Chicago Mercantile Exchange.
CFTC Looking into CME Cheese Shenanigans (p. 2):
The federal government’s Commodities Futures Trading
Commission has launched an investigation into alleged irregularities in dairy
cash markets at the Chicago Mercantile Exchange.
March MPC Imports Biggest Ever (p. 2):
Despite tight global dairy protein supplies, March 2005 was
the biggest-ever month for Milk Protein Concentrate imports entering the U.S.
According to the U.S. International Trade Commission, 17.7 million lbs. of MPCs
entered the U.S. in March. That’s 50% MORE than the previous biggest MPC import
month (November 1999).
Standard & Poor’s: ‘DFA Taking More Each Month from the
Farmer’s Milk Check” (p. 3):
On April 25, Standard and Poor’s announced it was maintaining
its credit rating for Dairy Farmers of America in a blithe, one-paragraph
statement. On what does Standard & Poor’s base its analysis of DFA’s financial
strength? On the fact that DFA is taking more money each month from members’
milk checks! Whoop-dee-doo!
Angry Members Disrupt DFA Meeting in VA (p. 3):
On April 25, angry DFA members in Harrisonburg, VA caused a
co-op meeting to be terminated early, because they asked so many tough questions
that management could not satisfactorily answer. DFA members in the South are
angry about years of repeated deducts from their milk checks due to unexplained
co-op marketing losses.
Senate Bill Aims to Stop Change in Milk’s Definition (p.
3):
Senators Feingold, Schumer and Clinton have introduced the
“Quality Cheese Act of 2005”—a bill designed to halt FDA’s proposed changes in
definitions of “milk” for manufacture of standardized cheeses. FDA wants to
allow imported dairy proteins like MPC, casein and caseinates to substitute for
milk in making cheeses. At present, such imported ingredients require labeling
of final product as “imitation cheese.”
Despite High Prices, Dairy Imports Still Pouring In (p. 4):
Data for the first quarter of 2005 shows massive imports of
dairy commodities and ingredients into the U.S.
GM Alfalfa: Many Questions; No Cattle or Horse Safety Tests
(p. 5):
Monsanto is seeking final government approval to release
genetically-modified alfalfa for commercial sale later in 2005. ZERO safety
tests for feeding GM alfalfa to cattle and horses have been conducted! Alfalfa
exporters in the Pacific Northwest do not want the product, which could
jeopardize their export sales to Japan.
Tillamook CEO Explains rBGH Decision (p. 6):
At the recent meeting of the U.S. Cheese Makers Assn., CEO of
the Tillamook Co. Creamery Assn. explained his co-op’s decision to disallow use
of rBGH/rBST (Monsanto’s genetically-engineered hormone that boosts cows’ milk
production when injected). Massive support from consumers backed up Tillamook’s
decision. Tillamook is the second-largest marketer of branded Cheddar in the
U.S.
Farmers Tell CME Officials to Start Coming Clean (p. 7):
John Bunting writes about a group of dairy activists’ April
18 visit to the Chicago Mercantile Exchange. After protesting, they met with
top-level CME officials, demanding fairer cash market trading activities. Out of
this meeting, CME acknowledged that the CFTC was investigation Cheddar pricing.
Milk Haulers Air Complaints About Kraft, Dean Edicts (p.
8):
At the recent International Milk Haulers Assn. meeting in
Nashville, TN, milk haulers let fly with a long list of complaints to
representatives of Dairy.com about payments for hauling services and demands
that all hauling from Dairy.com customers be run through that firm. The assn. is
also working on a cost-analysis project to help members stay current.
Dairy Promotion Lawyer Goes Bonkers over DMI ‘Leaks’ (p.
8):
Paranoia strikes deep in the Heartland! At the Dairy
Management, Inc. meeting in Chicago on April 19, attorney Wayne Watkinson went
ballistic over directors’ materials “leaked” to The Milkweed. Watkinson forced
directors to sign confidentiality statements, without which they could not get
any directors’ information packets.
More rBGH Manure … After All These Years (p. 9):
Writer Joel McNair lets fly with a Slurrystore full of
you-know-what about John Umhoefer’s recent column in weekly cheese newspapers
criticizing Tillamook’s decision to remove rbGH cows’ milk from its cheese
manufacture. Umhoefer’s “stuff” is more of the same-old, same-old backing of
Monsanto that has caused so many problems for dairy, McNair asserts.
Forage Problems, Especially in the Upper Midwest (p. 9):
Wisconsin lost 25% of its alfalfa crop to “winterkill.” More
losses occurred in early May, due to sub-freezing temperatures killing “crowns”
of the growing plants. Nationwide, supplies of dairy-quality forage are going to
be tight and expensive this year.
Dairy Cattle Replacement Prices Map (p. 10):
The Milkweed’s map of U.S. dairy livestock prices shows
continued strength, but relatively flat price for calves, heifers, and cows,
during the past month. The biggest gains came in short-bred heifers, which rose
roughly $300-$400 in some markets in the past month.
Straight Talk (p. 11):
Pete Hardin praises the “troublemakers” who’ve worked to
bring to the attention of federal and state regulators the inequities of Cheddar
pricing at the Chicago Mercantile Exchange. Hardin urges strong support for S.B.
827—the “Quality Cheese Act of 2005.” Hardin also discusses DFA’s financial
condition, concluding: “I smell a train wreck coming.”
Several Factors Behind Weak Commodity Prices (p. 12):
Cheddar and Grade AA butter prices are down at the CME.
Imports are hurting butter. Hardin projects that Cheddar is under priced and the
second half of 2005 will see tight milk supplies in the U.S.
April 2005 Issue No. 309
Feature Story:
DFA 2004 Audit Lacquered & Perfumed, But
... (p. 1):
The management of Dairy Farmers of America (DFA) slapped a
lot of polyurethane and perfume on the co-op’s 2004 financial audit. But beyond
the chirping about how DFA “achieved record revenues” and “payments to members
reached a record $5.8 billion for their milk,” DFA’s 2004 audit stinks. Read
Pete Hardin’s April feature story here.
Antitrust Subpoenas Many DFA Directors (p. 1):
Just before the annual meeting of Dairy Farmers of America in
late March, about two dozen DFA corporate directors received subpoenas from the
U.S. Department of Justice. The subpoenas were issued as part of the very
serious Antitrust investigation focusing on DFA
If Checkoff Dies, CWT May Start Assessing Producers for
Promotion (p. 2):
Behind the scenes, National Milk Producers Federation (which
operates the CWT program) is plotting to use CWT to step in and collect revenues
to continue dairy promotion activities in the event federal courts declare
USDA’s producer promotion check-off illegal. Unknown to many, CWT’s by-laws
permit its board to set the assessment at any level deemed necessary.
Who Really Benefits from CWT? (p. 2):
Despite great hoopla about “success,” massive dairy imports
entering the U.S. show how absurd it is for the nation’s dairy cooperatives to
be killing dairy cows to get rid of a non-existing U.S. milk surplus.
DMS Duns Northeast Processors for Long-Ago Back Billing
Mistakes (p. 3):
Dairy Marketing Services has been sending some fluid milk
processors in the Northeast invoices for milk purchases from several years ago,
to make up for prior DMS billing mistakes. Are these bozos hard up for money,
incompetent, or what?
Energy Cost Pass-Throughs: Dairy’s Headache (p. 4):
From farm to supermarket dairy case, dairy is
energy-intensive. Stories indicate that milk marketers, milk haulers, and
processors are finding it hard to pass-through sudden increased energy costs.
Contact Congressional ‘Friends of New Zealand’ (p. 4):
Members of Congress who belong a group called “Friends of New
Zealand” are pu