USDA decision on large producer-handler milk bottlers victory for dairy farmers
In a decision published in the Federal Register, the USDA recommended that the producer-handler definitions in all Federal Milk Marketing Orders be amended so that only farms with bottled milk sales of three million pounds or less per month remain exempt from the pooling and pricing provisions. Producer-handlers with sales more than that will be treated the same as other bottling operations not owned by farmers, and will have to share their Class I proceeds with other farmers in their respective Federal Order Regions.
The recommended decision will be open to public comment for 60 days. Under present rules, a milk bottler of any size can avoid paying into the Federal Order pools in its market if it produces all of its own milk. This regulatory exemption provides a large pricing advantage, and reduces average pay prices for other producers who lose out on shared Class I revenue. In addition to ending the exemption for farm-owned bottlers, the decision would also tighten the requirements in the Arizona and Pacific Northwest Federal Order markets, which previously had limited producer-handlers to three million pounds of sales in each market.
Comments on the decision are due on December 21 and according to the timelines required under the 2008 Farm Bill, a final decision would be due February 22, 2010.
—From NMPF news release
NMPF outlines new approach for dairy industry
At a Senate Agriculture Committee hearing examining possible responses to the current dairy economic situation, Nebraska dairy farmer and NMPF board member Doug Nuttelman told lawmakers that NMPF is working on a series of approaches to help address milk pricing in the longer term. Nuttelman, who also serves as a board member for Dairy Farmers of America (DFA), outlined NMPF’s “Foundation for the Future,” a long-term strategic plan put together by NMPF’s member dairy producer cooperatives. It involves the following elements:
1. New risk management tools, in the form of a dairy producer income protection program, operating similar to a revenue insurance program. The purpose is to help dairy farmers survive financially difficult times by paying them an insurance indemnity (payout) when losses occur in their dairy operations.
2. Revamping the Federal Price Support Program, by reallocating government resources away from existing safety nets and revising them to direct resources more effectively.
3. Federal Milk Marketing Order (FMMO) reform, examining the best way to mend the present system, taking into consideration the various concerns by different regions of the country, as well as the different roles that the cooperatives play in balancing supply and demand in the U.S. Specifically, Nuttelman pointed to the need to rectify the present system’s “make-allowance” provisions.
4. A new beginning for the CWT program, looking at how to build on the proven track record of this dairy producer self-help program.
In particular, CWT needs to involve more of the industry in funding it, and it must consider other means of reducing supply in the future. Nuttelman urged the committee to thoughtfully consider recommendations to reform or reshape dairy policy in the future. He cautioned members of the Agriculture Committee that “it would be far worse than the current crisis if we put policies in place that would hurt our ability to fulfill the opportunities that we may encounter in the domestic market, as well as the international market.”
—From NMPF news release
CWT accepts 154 bids, 26,000 cows in third herd retirement of 2009
Cooperatives Working Together announced that it has tentatively accepted 154 bids in the fourth herd retirement it has conducted in the last 12 months. The 26,412 cows and 517 million pounds of milk accepted in this round, combined with CWT’s three previous herd retirements since December 2008, equal a total reduction of milk production capacity of five billion pounds.
“Coming into 2009, CWT’s economists estimated that we would need to remove between five and six billion pounds of milk, the production of approximately 250,000 cows, through herd retirements,” said Jerry Kozak, president and CEO of the National Milk Producers Federation, which administers CWT. “We are pleased that the participation in this third herd retirement of 2009 has brought us to our goal of aligning supply with demand.”
CWT member farmers in 33 states submitted a total of 168 herd retirement bids during the two-week bidding period, which ended October 15. This is the ninth herd retirement in the past six years of CWT’s existence, and featured a maximum acceptable bid threshold of $5.25 per hundredweight, the same price ceiling as in the retirement conducted in August. In addition to the 26,000 cows, 465 bred heifers were also accepted.
—From CWT news release
Cal Poly holds off on plan to reduce dairy herd
Cal Poly officials have put on hold plans to reduce the school’s dairy herd by 80 percent. Alumni and dairy supporters came forward to help the university find a way to keep the herd economically viable in the face of plummeting milk prices, said David Wehner, dean of agriculture. Several industry professionals sent letters volunteering to help Cal Poly develop a business strategy to keep as many of the school’s 400 dairy animals as possible. The herd consists of 150 milking cows, as well as dry cows and young stock.
Dairy Science Department Head Bruce Golden had proposed reducing the milking herd to 30 animals, enough to supply the needs of the Cal Poly creamery. If reductions to the herd are necessary, Cal Poly officials have promised to restore the herd as soon as market conditions improve.
—From The Tribune News
Senators introduce Dairy COOL Act
U.S. Sen. Al Franken (D-Minnesota), U.S. Sen. Russ Feingold (D-Wisconsin), and U.S. Sen. Sherrod Brown (D-Ohio) introduced the Dairy COOL Act, which would extend mandatory Country of Origin Labeling (COOL) to dairy products. Last year, the U.S. Department of Agriculture’s current COOL law went into effect, requiring Country of Origin labeling of meats, produce, and nuts. The Dairy COOL Act would extend COOL requirements to include dairy products – milk, cheese, yogurt, ice cream and butter.
—From Sen. Franken press release
Milk price boost aims to save farmers
While the Pennsylvania Milk Marketing Board is hoping it will boost the troubled dairy industry by charging consumers 4 cents more per gallon of milk during the final two months of the year, a local farmer is doubtful it will make much of a difference. The increase, the board says, equates to 50 cents more paid to farmers per hundredweight (11.6 gallons) of Class I, or fluid milk, beginning November 1. This is a 23 percent increase, from $2.15 to $2.65. But according to Leroy Troester Jr., of Mifflinburg, Pennsylvania, the likelihood, once the numbers break down, will be about 5 or 10 cents more – not 50.
“At the most it’s going to do is 30 cents,” he said. “That’s highly doubtful we’ll get that much. It’s all going to get lost in the system.”
—From The Daily Item
Aubertine bill would cut farm fees
New York State Sen. Darrel J. Aubertine has introduced a bill that would eliminate stop fees, hauling fees and fuel surcharges for dairy farmers and define ownership of milk as beginning once it has been taken from the farm. The legislation, bill number S.6158A, would require processing plants to pay for milk transportation costs rather than passing those costs to the farmers. Farmers would be able to keep $1 to $2 extra per hundredweight in their milk checks. Processors have charged an estimated average of $1.55 per hundredweight for October, and, with milk prices around $11 per hundredweight, these stop and haul fees can amount to a 13 to 17 percent charge.
“We work for dairy farmers, and anything that would result in improved net incomes on the farm is something that we support,” said Karen Cartier, director of communications for Dairylea Cooperative Inc. However, “when making significant changes to something like this that has been in place for a very long time, there is the potential for unintended consequences.”
Some dairy farmers are concerned that one unintended consequence would be processors finding a way to shift their higher transportation costs caused by the legislation back to them. If processors do not raise prices for the consumer, said Charles L. Eastman, partner in Eastman Farms LLC, Ellisburg, then dairy farmers might still have to pick up some of the transportation costs – even if not through explicit fees.
Neighboring states have passed or are considering similar legislation. However, they are reluctant to enact policies that could impair local dairy farmers’ ability to market their products out of state. Aubertine’s bill and pending legislation in New Hampshire makes implementation of hauling fee bans contingent on similar legislation being passed in New York, Vermont and New Hampshire.
—From Watertown Daily Times
Voters approve Issue 2
On November 3, Ohioans showed their overwhelming support for local farmers and food safety by voting in support of Issue 2. The proposed Livestock Care Standards Board passed with more than 63 percent of the vote thanks to an inspiring grassroots effort by farmers and ranchers, agriculture organizations, veterinarians, and consumers to protect Ohio’s agriculture industry.
While this may be a win for agriculture, the battle is far from over. The Humane Society of the United States (HSUS) has already committed to bringing an initiative against modern farming practices to Ohio in 2010. By opposing a multi-disciplined board setting animal care standards and threatening their own ballot initiative to circumvent the board in the future, it’s apparent that animal rights groups such as HSUS are more interested in the elimination of animal agriculture than improving animal care.
—From Animal Agriculture Alliance news release
Farmers donate over 100,000 pounds of dairy and pork products
Minnesota Farmers Helping Families, a coalition of state agriculture commodity groups, announced a donation of more than $115,000 in pork and dairy products to Hunger Solutions Minnesota, a comprehensive hunger relief organization. At a news conference hosted by Governor Tim Pawlenty at the state capitol, representatives from the Minnesota Soybean Research & Promotion Council, Minnesota Pork Board and Minnesota Milk Producers Association announced the donation of approximately 85,000 pounds of pork and more than 36,000 pounds of cheese. “We would also like to thank Land O’Lakes, Inc. for their additional support in delivering the cheese at cost,” said Pat Lunemann of the Minnesota Milk Producers Association and a dairy producer from Clarissa, Minnesota.
—From Minnesota Milk Minute
Idaho’s dairy industry impacts communities
During the past decade, southern Idaho’s Hispanic population grew nearly 90 percent, parallel to the growth of the state’s dairy industry, which is concentrated in three south- central counties: Gooding, Jerome and Twin Falls. The new residents helped Jerome and Gooding Counties buck the national trend of outmigration and population loss experienced by three-quarters of farming-dependent counties across the U.S. since 2000.
—From University of Idaho news release
European farmers receive aid
Facing France’s worst agriculture crisis in 30 years, President Nicolas Sarkozy pledged to provide $1.5 billion in bank loans for cash-strapped farmers and promised to push the EU to offer more aid. Sarkozy says the “unprecedented” aid package was in response to an equally unprecedented crisis in French farming, which has seen prices for production shrink 20 percent over the last year as demand decreased amid the global credit crunch. This comes just one week after European Parliament lawmakers gave fast-track approval to a $450 million aid fund meant to help struggling dairy farmers cope with the recent collapse of milk prices. PD
—From AP newswire