Canada announces 8th BSE case
The Canadian Food Inspection Agency (CFIA) has confirmed that nation’s eighth case of bovine spongiform encephalopathy in a beef cow from Alberta Province. The cow was described as “mature” and is believed to be between 8 and 10 years old, making birth either prior to the ruminant-to-ruminant feed ban or shortly after its inception. According to the CFIA, no part of the carcass entered the animal or human feed chains. Officials will now attempt to find the birth farm and herdmates, along with determining the animal’s exact age and how it was infected. Results of the investigation will be released after its completion.

California dairy producers qualify for low-interest emergency loans
The USDA has designated 16 California counties as natural disaster areas as a result of a record-setting heat wave that occurred July 1-31, 2006. The decision makes all qualified farm operators in the designated areas eligible to apply for low-interest emergency loans from the Farm Service Agency (FSA). Farmers in these counties have eight months from the date of the declaration (Sept. 7, 2006) to apply for loans to help cover part of their actual losses. The counties are Butte, Imperial, Merced, Stanislaus, Calaveras, Kern, San Bernardino, Sutter, Fresno, Kings, Solano, Tehama, Glenn, Madera, Sonoma and Tulare. Federal regulations also allow counties neighboring the primary disaster counties to be considered for FSA assistance.

The FSA will consider each loan application on its own merits, taking into account the extent of losses, security available and repayment ability. Interested farmers may contact their local USDA service centers for more information on eligibility requirements and application procedures for all Farm Service Agency programs. Additional information is also available online at http://disaster.fsa.usda.gov

“The California dairy industry suffered tremendous losses in terms of cattle and milk production. This action will help the industry to become whole again,” said Western United Dairymen CEO Michael Marsh.

The California Department of Food and Agriculture preliminary loss report says the eight counties in the San Joaquin Valley lost 20,552 cows and 10,738 calves to the heat in July. In addition, the department estimates lost milk production at $228.6 million this year and $228.1 million in 2007. Production decreases are also impacting other allied industries, such as the dairy hay market. Experts say producers are buying only short-term supplies, driving down hay prices.

—Compiled from multiple news releases and news articles

California dairy industry dips 3 percent in value in 2005, says USDA report
California’s dairy sector, which leads the nation in production, showed a 3 percent decline in value in 2005, dropping to an estimated value of $5.22 billion. The decline was due to lower prices paid to producers for milk, according to cash receipts statistics issued recently by the California field office of the USDA National Agriculture Statistics Service (NASS) and the USDA Economic Research Service.

California’s agricultural sector continued to lead the nation in 2005 with 13.3 percent of the U.S. value, the same percentage of the national total as the previous year. The state’s farm revenues were more than the combined totals of Texas in the second spot and Iowa at number 3. Complete information on farm cash receipts may be obtained at www.ers.usda.gov/Data/FarmIncome/finfidmu.htm.

Dairy methane is a greenhouse gas in historic global warming bill
California will become the first state in the country to require industries to lower greenhouse gas emissions under legislation passed recently by the state’s legislature. The historic agreement, AB 32, identifies dairy methane as a greenhouse gas to be controlled by California’s dairy industry. By 2020, industries would have to lower carbon dioxide and other greenhouse gases by 25 percent. “The devil’s going to be in the details in how it’s implemented,” said Michael Marsh, CEO of Western United Dairymen.

Conference calls this week with Gov. Schwarzenegger’s staff and California Department of Food and Agriculture Secretary AG Kawamura made it clear there are a lot more questions than answers right now, noted Marsh who added, “I’m not sure if anyone really read this bill before they voted on it.”

The bill requires that by 2008 the California Air Resources Board (CARB) is to begin requiring reports of greenhouse gas emissions by the largest polluters.

“How do you determine who the largest greenhouse gas emitters are? How do you come up with that inventory of emissions?” asked Marsh. “Who is going to pay for the scientific research that needs to be done to compile that inventory?”

The bill mandates that by 2011, the state will set greenhouse gas emission limits and reduction measures to go into effect in 2012. Failure to comply will lead to penalties.

“Assuming that somehow funding has been found to conduct the scientific research necessary to develop an emissions inventory, how then you do find the funding to conduct scientific research into what the proper mitigation measures should be?” asked Marsh. “Different mitigation measures may be appropriate for different sized dairies or dairies located in different geographic locations. The technology may well exist, but dairy producers want to know: Who is going to pay for all of this?”

The bill provides that CARB can draw up market mechanisms to achieve greenhouse gas emission reductions, including carbon credit trading. It also provides that the governor can halt implementation of regulations for up to one year in the event of “extraordinary circumstances” like a natural disaster or economic crisis.

“We plan to work hard to represent our members’ interests as this ill-thought-out piece of legislation is taken up by state regulatory agencies,” said Marsh.

—From Western United Dairymen

U.S. farm expenditures increased 5 percent last year
U.S. farm production expenditures increased 5 percent in 2005. Citing the Agricultural Resource Management Survey, the National Ag Statistics Service (NASS) says total expenditures for the year were $223 billion compared to $212 billion in 2004. The biggest increase was in fuels, up 26 percent. Taxes were 14 percent higher, and fertilizers increased 12 percent.

Farmers did see a 5 percent decline in feed and “other farm machinery” costs, while expenditures for trucks, autos, tractors and self-propelled farm machinery slipped 2 percent from a year earlier. The average farm in the United States had expenditures in 2005 of $106,499, an increase of $6,001 over 2004. That farm spent $14,034 on farm services, $13,462 on feed, $11,361 on labor, $10,216 on livestock and related expenses and $8,163 on rent.

Fluid milk sales surprisingly strong
Sales of fluid milk products in the first six months of 2006 were surprisingly strong, gaining 1.4 percent when compared to the same period last year, but the increase was not uniform across all types of products.

Sales of whole milk from January to June 2006 were down by 2 percent, and sales of all flavored milks declined by 0.3 percent. All other products experienced increased sales when compared to the same period last year, with reduced-fat milk rising by 3.2 percent, and both lowfat and nonfat milk product sales increasing by 2.7 percent.

The overall gain represents the largest increase in sales for the first six months in any year since the Agricultural Marketing Service (AMS) of the U.S. Department of Agriculture (USDA) began estimating total monthly U.S. fluid milk sales in 2000. Previously, the largest sales increase during the first six months was 0.8 percent in 2000. For three of the past six years, U.S. fluid milk sales were down in the first six months.

Total U.S. fluid milk sales for all of 2005 were lower than they were in 2000 by nearly 800 million pounds (92.8 million gallons), after adjusting for the extra leap day that year. Total U.S. fluid milk sales for 2006 will have to maintain the current momentum, increasing nearly 1.5 percent, to match the total sales figures posted in 2000.

In January, AMS began reporting estimates of total U.S. organic milk sales. During the first six months of 2006, 118 million pounds (about 13.7 million gallons) of organic whole milk was sold, along with 388 million pounds (about 45 million gallons) of fat-reduced organic milk.

Total U.S. fluid milk sales for the first half of the year reached 27.3 billion pounds (3.2 billion gallons), and organic fluid milk sales accounted for 1.85 percent of total sales.

—From IDFA news article

Idaho high court says dairy waste management plans are public records
The Idaho Supreme Court says the manure-spreading plans of feedlots and dairies are public, not private.

In a ruling handed down recently, the split court said the Idaho Department of Agriculture can’t refuse public access to the nutrient management plans simply because it has returned the plans to the dairies and feedlots.

The ruling upheld one made by Fourth District Judge Ronald Wilper last year in a case pitting the Idaho Conservation League against the agriculture department and the Idaho Cattle Association.

Idaho law requires cattle feedlot operators to provide a nutrient management plan to the state. But the agriculture department generally returns the plans to the feedlots after they are approved. The high court says that just because the plans have been returned doesn’t exempt them from public disclosure.

—From an Associated Press news article

International dairy prices expected to remain the same
Although good global economic growth is expected to help maintain international demand for butter and nonfat dry milk powders in 2006, competition from other trading partners may remain limited by tight supplies. Milk production in Australia is forecast to decrease slightly during its 2006 marketing year, while New Zealand production likely will increase by about 4 percent. Milk production in the EU, constrained by quotas, is expected to grow less than 1 percent. As global demand for dairy products continues to remain firm, international prices in 2006 are expected to stay at or near last year’s levels.

U.S. prices are expected to remain fairly competitive, and exports are expected to remain strong. Increased world supply of nonfat dry milk powders is likely to result in reduced global export demand, lower export levels of U.S. products and some weakening of prices.

—From a USDA news release

Analyst at eDairy Outlook Conference predicts $20 milk
While dairy markets have turned bullish of late, no one is predicting a return to record high milk prices anytime soon. That is, no one except for Peter Ullrich, president and CEO of Ullrich Analytics, Plymouth, Wisconsin. Ullrich was one of several speakers at eDairy Inc.’s third annual Outlook Conference, Navigating the Global Marketplace, held Aug. 28 and 29 in Chicago. Ullrich is also predicting $5 per bushel corn, lower interest rates and a return to record-high butter prices.

A technical analyst, Ullrich says, “I don’t study the fundamentals of a commodity or financial market as much as I study the behavior of those who already have researched this information and are trading it in the market. My computer system measures the human rhythms of these traders over the past, and then projects mathematically how these rhythms are likely to extend forward into the future.” And the future looks bullish for cheese and butter.

Ullrich told those attending eDairy’s conference that his charts show the Class III milk contract will soon retest its prior all-time high of $20.60 made in May 2004.

“Using technical jargon, the contract now is in ‘long-term wave-5 up,’ which projects to at least $20.60 or higher,” Ullrich notes. “Wave-5 up usually means higher highs. My charts show that this new high should be made sometime near January 2008, but wave-5 up is a very strong indicator, so we could see the Class III contract hit $20.60 even sooner.”

If Ullrich is right, dairy producers, processors and end users would be wise to watch the Class III market closely because actual milk prices do not always reach the same levels that futures prices do, says Bill Brooks, eDairy Inc. economist. As an economist, Brooks focuses heavily on fundamental indicators. “The next 18 to 24 months is a long time horizon,” Brooks says. “Anything could happen.” However, the risk of trading futures and options can be substantial. Each investor must consider whether commodities trading is a suitable investment. Past performance is also not indicative of future results.

Ullrich Analytics earlier predicted the Federal Reserve Board would stop its interest raising campaign in June. “We called the long-term top,” says Ullrich. “Now the rate has dropped to 4.732 percent and our charts point to a new downtrend in rates lasting until about September 2009, with many zigs and zags on the way down, of course.”

New guide highlights incentives for agriculture water quality trading
By selling the amounts of nutrients or sediment reduced by conservation practices, agricultural producers are finding opportunities to get paid for stewardship activities through water quality trading.  A new manual, Getting Paid for Stewardship: An Agricultural Community Water Quality Trading Guide, helps interested partners get started.

The guide has information for producers who want to develop a trading program in their watershed, provides a basic understanding of trading and includes persons to contact for more information. Copies of the document can be found on the web at www.epa.gov/OWOW/watershed/trading.htm

Monsanto supports dairy producers’ freedom to choose
Monsanto Dairy Business President Kevin Holloway recently announced that his company believes dairy farmers who are asked by milk buyers to supply milk from cows not supplemented with BST should be compensated. Holloway said using rBST amounts to a choice dairy farmers should be allowed to keep.

“Despite the fact there is no difference between this specialty milk and conventional milk, this is a milk buyer preference. In a fair market, we believe that dairy producers who are asked by a buyer to give up a valuable technology should be compensated,’ Holloway said.

Holloway said his company is concerned about dairy producers who may not have a choice whether to use the product because their milk buyer dictates what type of milk will be accepted.

He said, “The fundamental issue is about producer choice to use all safe and valuable technologies.”

—From transcript of a Monsanto Dairy Business press conference

New campaign targets teens and soda consumption
The milk industry launched a new campaign recently that is taking a different approach to appeal to teenagers. With messages supported by the American Dietetic Association and the School Nutrition Association, Body By Milk is encouraging teens to grab lowfat milk instead of sugary sodas because – along with staying active and eating right – it may help them achieve a healthy weight.

The new campaign will educate teens about the impact of what they drink by reaching them in multiple ways – online, in school and in the magazines they read.

International soccer star David Beckham, American Idol Carrie Underwood, champion figure skater Sasha Cohen and New York Yankee Alex Rodriguez are lending their faces – and white upper lips – to the cause.

They’re the first milk mustache celebrities to appear in the new Body By Milk ads, which will be featured in a range of teen-targeted publications from Seventeen and Cosmo Girl to Marvel Comics and Sports Illustrated for Kids.

Teenagers are drinking twice as many sodas as milk, which has steadily declined during the last 30 years. During this time, soda consumption among teens has risen by 300 percent. Experts cite this troubling trend as a possible contributing factor for today’s current epidemic of childhood obesity. In fact, Harvard researchers recently published an extensive review of the scientific evidence and found a strong association between increased sugar-sweetened beverage intake and greater bodyweight among children and adolescents.

Soft drinks and other sweetened beverages are now the leading source of calories in a teen’s diet. For more information, go to www.bodybymilk.com.

Final farm bill analysis paper released
U.S. Agriculture Secretary Mike Johanns recently released a comprehensive analysis of key factors that will affect future growth in U.S. agriculture: international trade, research and development, protection of agriculture from pests and diseases and challenges in preparing the next generation of farmers.

“This paper looks at the evolution of the agricultural marketplace and the strategies farmers have used to meet emerging challenges,” Johanns said. “As we discuss a new farm bill, we must consider how best to support future growth in agriculture. This analysis highlights opportunities to do so by improving our global competitiveness, making research and agriculture protection programs more effective and facilitating the transition of farms to the farmers of tomorrow.”

The analysis paper recently released, as well as previously released papers, are available at www.usda.gov/farmbill.

Researchers to study cattle genomics
Researchers will soon participate in a genomics study that will help scientists more quickly analyze genetic differences – many of which influence the quality of consumer products – in cattle populations. Using new technology that will be less expensive and less time-consuming, Jerry Taylor, a faculty member at the University of Missouri – Columbia, and other researchers will collaborate to develop a test that will help identify gene sequences responsible for differences in milk production, feed efficiency, marbling, fat production and other meat characteristics.

The researchers will use high-resolution gene mapping equipment to analyze the genetic structure of more than 10,000 cattle, representing at least 10 different breeds. Of that total, 7,000 DNA samples will be analyzed at the university.

Using a single test tube, researchers will review as many as 48,000 genetic markers. The project is scheduled to begin in December and is due for completion by January or February.

“We can now test large numbers of genes all in one test tube. This is new technology and will produce a dramatically large amount of information,” Taylor said. “Some cattle produce more or less milk, others produce more or less meat,” Taylor said. “Genes cause these cattle to be different.”

National Animal Health Monitoring System (NAHMS) to study dairy industry in 2007
The USDA National Animal Health Monitoring System (NAHMS) conducts national studies on the health and management of America’s livestock, poultry and aquaculture populations. These studies are designed to meet the information needs of the industries and other stakeholders – as identified by people working with these industries.

The 2007 study will continue to address the priority issues of the U.S. dairy industry and other stakeholders. Seventeen states will participate in the study. These states represent 79.3 percent of U.S. dairy herds and 82.0 percent of U.S. dairy cows.

For more information about the study and its objectives, visit http://nahms.aphis.usda.gov/dairy/dairy07/dairy07_objectives.pdf  PD