Solid demand outlook for dairy
Milk production levels and demand are expected to remain robust through the coming year, according to the latest supply and demand forecasts from the USDA’s World Agricultural Outlook Board. Domestic milk production forecasts for 2006 and 2007 are raised from last month. Cow numbers in 2006 were reduced from last month. In 2007, cow numbers are increased slightly from last month’s moderating decline. In addition, milk per cow continues to grow, supporting higher production forecasts in both 2006 and 2007. Demand is expected to remain robust, especially for nonfat dry milk and whey, but larger product supplies may pressure cheese and butter prices. A weaker expected 2006 cheese price results in a lower forecast 2006 Class III price, but a stronger NDM price raises the forecast for Class IV prices.

— From USDA press release

BSE resources available online
Dairy producers play a critical role in preventing BSE spread in our country, primarily by ensuring that high-risk feed components are not used in their rations. The California Dairy Quality Assurance Program (CDQAP) has developed an online resource center for dairy producers – available at www.cdqa.org – with common questions and answers and a video on preventing BSE in the herd.

— From California Dairy Research Foundation

Farm groups fight for milk price hike
Dairylea Cooperative Inc. and Dairy Farmers of America’s (DFA) have partnered with regional cooperatives to seek additional funds for dairy farmers. Joining forces with Dairylea and DFA are five of the largest dairy cooperatives in the Northeast including St. Albans Cooperative, Land O’Lakes, Upstate Farms, Maryland & Virginia Milk Producers Cooperative Association and Agri-Mark.

Farm profitability has taken a major hit, largely due to plummeting milk prices. At the same time, costs for fuel, energy, interest rates and labor have increased at a staggering rate – forcing farm families into financial upheaval.

In New York, the cooperatives have asked legislators for an emergency pricing program that would secure $1.00/hundredweight for farmers on milk produced from April to September 2006. Income from the proposed emergency pricing program would allow producers to stabilize their businesses and recover financially. In addition, Dairylea and DFA are urging their New York members to contact legislators so they hear from farmers directly.

Currently, support initiatives in Vermont, Connecticut and Maine allow states to supplement milk prices in an effort to help farmers and reinforce the dairy industry. New York dairy producers will need similar state support to remain competitive in the Northeast milk market.

Dairylea and DFA have also led the way in the formation of a new milk pricing agency for the region. The newly formed agency will coordinate the efforts of regional cooperatives to secure better milk prices for dairy producers. The development of a Northeast agency comes at a time when New York’s dairy farmers are struggling to stay in business due to an extremely volatile marketplace. Additionally, producers are facing higher production costs from energy, labor, and interest. Immediate areas of concern for the agency are fair rbST-free milk pricing as well as legislative policies impacting the price structure for New York’s dairy farmers.

“Dairylea, DFA and their cooperative partners are working tirelessly to boost producer payments in New York and beyond,” said Greg Wickham, CEO of Dairylea Cooperative. “Our members need help now. We’re not simply interested in their survival but their ability to thrive.”

Cooperatives are also strongly encouraging states with specific milk pricing laws to utilize them to increase farmer premiums. At this time, ongoing discussions are being held in order to investigate all options available to increase premiums.

“Quality of life is at stake for our producers – the collaborative efforts of the region’s largest dairy cooperatives will help regain control over the marketplace as well as encourage legislators to take notice of this issue. New York has been a major player on the agricultural scene and it needs fiscal backing in order to contribute to the state and national economy,” said Leon Graves, Director of Industry Affairs for Dairylea Cooperative Inc.

Dairylea and DFA are in favor of extending the collaborative efforts in the Northeast throughout the East coast. Milk pricing agencies in other areas of the country have achieved improved milk pricing by allowing producers and cooperatives to partner. Working together, dairy cooperatives in the Northeast can secure a better price structure for producers.

“We are encouraged by this newly formed Northeast alliance and believe it’s a positive step towards better pricing for dairy producers,” said Clyde Rutherford, President of Dairylea Cooperative. “The leadership of Dairylea and DFA are committed to the ongoing efforts of the milk pricing agency as well as developing measures at the cooperative level that will benefit our members during this difficult time. In the interim, as the agency gears up, our farmers need financial support from the legislature to help them stay in business.”

—From St. Albans Messenger

New analysis says CWT boosts milk checks by 40 cents
An independent economic analysis of the impact of Cooperatives Working Together has found the historic dairy self-help program has raised farmers’ prices by at least 40 cents per hundredweight since it began operations in 2003.

The analysis was performed by Dr. Scott Brown of the University of Missouri, a nationally-known farm policy expert who is often called on by the U.S. Congress to assess agricultural economic issues. Brown examined the impact of CWT’s three herd retirements, plus its ongoing export assistance program, while also taking into consideration other factors affecting the dairy supply in 2003-2006, such as the relative shortage of Canadian dairy replacements. His analysis showed that CWT alone was responsible for a minimum 40-cent average increase in prices from 2004-2006, apart from the other factors affecting the market.

“At the start of CWT, I was skeptical about the long-term effects CWT would have on dairy farmers’ prices, but the evidence is clear this program has raised the price all farmers have received since it first began removing cows at the end of 2003,” Brown said. “For a very modest investment, CWT has netted farmers a very positive return.”

The cumulative impact of CWT from the start of 2004 through the first half of 2006 is $1.97 billion in additional producer revenue, according to Brown’s evaluation. It showed the milk price impact has grown with each herd retirement program. The normal attrition of cows in a herd was taken into consideration in determining the effect on milk production in the years following a herd removal.

CWT’s export assistance program, meanwhile, has been most active in 2006. So far, it has exported the milk equivalent of approximately 500 million pounds, which Brown’s analysis showed as boosting farm prices by nine cents just through the first half of this year. Exports prior to 2006 were minimal and thus had little impact on prices prior to this year.

The head of the National Milk Producers Federation, which manages CWT, said the independent analysis quantifies what many farmers intuitively understand: trimming cow numbers, coupled with reducing market supplies, provides a tailwind behind farm-level prices.

“We always believed CWT was an economically-sound concept, if it could be properly executed,” said Jerry Kozak, President and CEO of NMPF. “Dr. Brown’s assessment should lay to rest any remaining doubts about whether CWT itself has had a positive rate of return since its inception. Even though we’ve seen both rising and falling prices since 2003, there is no questions that prices overall are better because of CWT.”

Starting with July’s milk production, CWT member cooperatives and individual farmers have begun contributing ten cents per hundredweight, an increase of five cents per hundredweight from the initial level of commitment. The higher assessment will run through 2007, and ensures CWT will be able to fund additional herd retirement efforts, as well as its ongoing export assistance program.

Justice Department obtains dairy processor divestiture in settlement with Dairy Farmers of America
The Department of Justice recently announced a settlement that resolves its antitrust concerns with the Dairy Farmers of America Inc. (DFA) acquisition of Southern Belle Dairy Co. LLC, by requiring DFA to divest its interest in Southern Belle. As a result of the settlement, DFA’s partner, the Allen Family Limited Partnership (AFLP), will also sell its interest in Southern Belle. The Department said the divestitures restore the benefits of competition – lower prices and better quality services – to schoolchildren and their families in Kentucky and Tennessee.

As a result of the settlement filed recently in U.S. District Court in London, Kentucky, both DFA and AFLP will sell their interests in Southern Belle to Prairie Farms Dairy Inc. The Antitrust Division has approved Prairie Farms as the buyer. The Commonwealth of Kentucky joined the Department in its settlement.

“This settlement restores competition for school milk contracts essential to the nutrition programs that serve schoolchildren in 100 school districts in Kentucky and Tennessee,” said Thomas O. Barnett, Assistant Attorney General in charge of the Department’s Antitrust Division. “With the close cooperation of the Commonwealth of Kentucky’s Office of the Attorney General, the United States has secured the relief that we expected to request from the court had we prevailed at trial.”

In April 2003, the Department’s Antitrust Division and the Commonwealth of Kentucky filed a lawsuit in U.S. District Court in London, challenging DFA’s acquisition of its interest in the Southern Belle dairy. The Department’s lawsuit charged that DFA’s acquisition reduced competition because it gave DFA ownership interests in two dairies – the Southern Belle dairy and the nearby Flav-O-Rich dairy in London – that competed against each other for school milk contracts. As a result, the acquisition reduced the number of independent bidders for school milk contracts from two to one for 45 school districts in eastern Kentucky, and from three bidders to two for 55 school districts in eastern Kentucky and Tennessee.

The federal district court initially dismissed the case, granting summary judgment for DFA. The Department successfully appealed the dismissal to the U.S. Court of Appeals for the Sixth Circuit, which reversed the district court and sent the case back for trial.

Before trial began, the Department and DFA reached an agreement that required DFA to divest its interest in the Southern Belle dairy. At the same time, DFA’s joint venture partner, the AFLP, also agreed to sell its interest in the dairy. The Department filed its proposed settlement with the court after approving the sale of DFA and AFLP’s interests in Southern Belle to Prairie Farms.

—From U. S. Justice Department

Mexico opens markets to U.S. dairy heifers
Agriculture Secretary Mike Johanns announced recently that Mexico will resume trade in U.S. dairy heifers under 24 months of age.

“I am pleased with this first step in reestablishing cattle trade with Mexico, but I remain committed to a broader resumption of cattle trade between our countries,” said Johanns. “My goal is to restore the once-vibrant live cattle commerce between the United States and Mexico and to do so in accordance with science-based international guidelines.”

Under the agreement announced recently, U.S. producers will be able to export dairy heifers to Mexico that are under 24 months of age and registered with a purebred dairy breed association or the Dairy Herd Improvement Association, a national dairy producer cooperative. Shipments to Mexico [were scheduled to begin] on October 4. The dairy heifers will be individually identified as they depart the United States. Their identification information will be entered into the Mexican animal identification system for purposes of maintaining these animals under bovine spongiform encephalopathy (BSE) surveillance.

Mexico closed its market to U.S. dairy heifers following the December 2003 find of BSE in Washington state. In March 2004, Mexico opened its market to boneless U.S. beef from animals under 30 months of age, and in February 2006, the country opened its market to U.S. bone-in beef from animals under 30 months of age.

In 2003, the United States exported $6.9 million worth of dairy heifers to Mexico.

—From USDA new release

Minnesota TB investigation discovers sixth infected cattle herd; state’s TB-free status delayed
The Minnesota Board of Animal Health recently announced that a cow from a farm in Roseau County tested positive for bovine tuberculosis (TB). Minnesota has now detected bovine TB in six beef herds in Roseau and Beltrami counties. This sixth infected herd, which underwent an initial round of testing last year, shared fenceline with the first beef herd to test positive.

After the first TB-positive herd was identified in Roseau County last summer, animal health officials initiated a disease investigation to locate exposed animals. Investigation protocol requires potentially exposed herds, including those with fenceline contact, to undergo two TB herd tests one year apart. The newly detected sixth herd tested negative last year, but during a second round of testing in mid-September, a 2-year-old cow was found suspect for bovine TB. Tissue samples were submitted to the National Veterinary Services Laboratory (NVSL) in Ames, IA, where the diagnosis of bovine TB was confirmed.

The United States Department of Agriculture (USDA) is currently working with the herd owner on the details of depopulation and indemnification. State and federal officials have already begun tracking animal movement into and out of the operation to locate any exposed animals. This herd is a small operation and has had minimal animal movement.

As a result of detecting a sixth infected herd, Minnesota will be delayed in regaining TB-free status. Pending completion of a thorough disease investigation, the state can apply for accredited TB-free status two years after the depopulation of the last infected herd.

Minnesota Board of Animal Health Senior Veterinarian Dr. Linda Glaser said the new finding may be explained by the way bovine TB spreads and develops.

“Bovine TB is caused by slow-growing bacteria with a long incubation period. That is why it is so important to test certain high-risk herds twice,” said Glaser. “Due to the nature of the disease and the way in which it spreads by direct animal-to-animal contact, we need to be sure we have found and eliminated all of the disease before we will be able to regain our TB-free status.” State officials worked with USDA to develop and implement the Minnesota bovine TB management plan.

Cattle that moved to and from the TB-infected herds were traced and tested. Herds within ten miles of an infected herd were also tested and the Minnesota Department of Natural Resources (DNR) initiated surveillance of free-ranging white-tailed deer in the affected area. In addition to traces and area testing, the state is also conducting TB testing in a targeted sample of cattle herds statewide. This statewide TB surveillance began prior to the discovery of the sixth infected herd and is expected to take at least a year to complete.

—From Minnesota Board of Animal Health

EPA takes important step in controlling air pollution from animal feeding operations
EPA has just gotten approval to take the next important step to gather air emissions data from agricultural animal feeding operations (AFOs) and to ensure compliance with environmental laws. This step consists of certain AFOs voluntarily taking part in a nationwide monitoring study to evaluate their air emissions.

“The AFOs’ agreements bring us closer to ensuring clean air compliance across our nation,” said Granta Y Nakayama, EPA’s assistant administrator for the Office of Enforcement and Compliance Assurance. “This innovative approach will provide the best available science to guide EPA’s decision making in a way that is good for the environment, good for agriculture and good for the American people.”

EPA began to realize in the late 1990s that it didn’t have sufficient air emissions data to determine potential regulatory requirements for AFOs under the Clean Air Act (CAA), so to resolve the situation it began discussions with AFO owners in 2001. These discussions led to a Jan. 31, 2005 EPA Federal Register notice offering individual AFOs an opportunity to voluntarily sign – by August 12, 2005 – a consent agreement committing them to conduct a nationwide study to monitor and get a better handle on the nature of their air emissions. This consent agreement also resolves certain air violations under the Clean Air Act, as well as the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) – also known as Superfund – and the Emergency Planning and Community Right-to-Know Act (EPCRA).

EPA’s Environmental Appeals Board (EAB) just approved the two final voluntary agreements, making a total of 2,568, representing 1,856 swine, 468 dairy, 204 egg-laying, and 40 broiler chicken (meat-bird) operations. These 2,568 agreements represent 6,267 farms (an AFO can include more than one farm). Now the industry-led monitoring survey can proceed; it is expected to begin this winter.

Within 18 months following the monitoring study’s conclusion, EPA will evaluate all data and publish emission-estimating methods for AFOs. These methods will allow AFOs to estimate their emissions and comply with applicable federal regulatory requirements as appropriate. This approach will achieve compliance with environmental laws much faster than any other enforcement mechanism.

As an incentive for AFOs to participate, EPA agreed not to bring certain enforcement actions against participating AFOs during the course of the monitoring survey; however, all participants must pay a penalty based on the number of animals maintained at the operation and must assure compliance with the CAA, CERCLA, and EPCRA once EPA publishes the emissions methodology.

The EAB is an impartial, independent body that acts as the final decision maker on administrative appeals under all major environmental statutes EPA administers.

More information on the AFO Air Compliance Agreement: www.epa.gov/compliance/resources/agreements/caa/cafo-agr-0604.html

—From the EPA, Air Compliance website

Farmers have antidotes to oil dependency
Developing ways to use crops and manure to displace petroleum-based fuels is the goal of Agricultural Research Service (ARS) scientists in the Renewable Energy and Manure Management Research Unit in Bushland, Texas. In addition to studies there, the search for alternative fuels extends across the country, including places like the ARS North Central Soil Conservation Laboratory in Morris, Minnesota.Nolan Clark, research leader at the Bushland unit, and colleagues plan to test various biodiesel fuels. Their idea is that locally available materials, such as palm oil in Hawaii, are most economical to use. Inspired by Clark’s presentation on biodiesel, one Arctic village uses fish oil biodiesel to fuel generators that provide the town’s electricity.

The Texas scientists are also working with the Texas Agricultural Experiment Station in Amarillo on burning a manure-coal mix to heat buildings and to provide heat needed to produce ethanol. This is one of many possible alternative fuels being considered to cut costs in manufacturing ethanol.

They’re also researching potential uses for the manure-coal ash left after burning, such as for fertilizer or horticultural bedding material.

Abdullah Jaradat, research leader at the Morris lab, and colleagues are cooperating with the University of Minnesota at Morris to test the gasification of cornstalks, wood and other materials to heat and cool university buildings. They are analyzing the ash to see whether it is safe to use as fertilizer.

Gasification is a burning technique that turns cornstalks and other materials and their smoke into a gas that can be used for cooking or heating. The gas can also be converted into electricity and could even fuel vehicles in an extended petroleum shortage.

The Minnesota scientists are also researching whether hydrogen or a Cuphea-based biofuel might fuel the university’s back-up generators. Cuphea is a genus of herbaceous annual plants that grow throughout the Western Hemisphere. Cuphea plants yield a unique seed oil that potentially could be used as biofuel without the chemical modification required of soybean oil. This also has potential for use as an industrial lubricant, displacing imported oil.  PD

—From ARS news service