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Wednesday, 09 May 2007 09:39

DFA idles New Mexico cheese plant
Dairy Farmers of America Inc. (DFA) recently announced its Lovington, New Mexico, cheese plant has been idled. The plant has been jointly owned and operated by DFA and the Greater Southwest Agency.

Open since 1995, the Lovington plant produces 65 million pounds of 40-pound block cheddar cheese annually. Going forward, production will be transferred to other DFA plants.

The announcement came after years of repeated efforts to stimulate successful operations, including periodic adjustments to the production schedule and an expansion to help the facility better accommodate increased volume. Despite these efforts, the plant has failed to achieve a financially viable status.

Senate committee approves funding for California farmers impacted by 2006 heat wave
The Fiscal Year 2007 Emergency Supplemental Bill recently approved by the Senate Appropriations Committee includes $4.151 billion in emergency farm relief for farmers across the country, including millions in assistance for California farmers impacted by extreme weather that hit the state in 2006 and 2007.

The bill includes $95 million for California milk production losses due to the 2006 heat wave and $1.498 billion for livestock loss compensation nationwide for disasters in 2005, 2006 or 2007. If signed into law, producers will apply directly to the Farm Service Agency for compensation.

The supplemental bill will now go before the full Senate for consideration. Once the bill passes the Senate, it will go to conference with the House. The House bill includes $1.8 billion for crop loss compensation, $1.48 billion for livestock compensation and $20 million for orchard rehabilitation due to the 2007 freeze. It does not provide funding for milk losses or farm workers.

—From Western United Dairymen

USDA predicts higher producer prices for milk
Experts from the USDA recently reduced milk production forecasts for 2007 as growth in milk per cow continued to lag historical growth. They also forecasted higher producer prices as demand for dairy products remains strong.

Tight international supplies have pushed nonfat dry milk (NDM) and dry whey prices higher as exporters compete with domestic users for relatively tight supplies. With growth in international supplies expected to remain limited through the year, experts predict raised price forecasts for NDM and whey from last month. Class III and Class IV price forecasts are raised to reflect higher product prices. The all-milk price forecast for 2007 is raised to $15.55 to $16.05.

—World Agricultural Supply and Demand Estimates Report, April 10

Corn growers call for extension of MILC
The American Corn Growers Association recently asked Congress to rethink U.S. agriculture policy and change course to secure the livelihoods of farmers, not only in the U.S., but globally as well.

“We need farm policy that provides a price to farm families rather than subsidies, an adequate strategic reserve of storable food and feed commodities and a way to curb overproduction of crops traditionally in surplus so that we can plant new dedicated energy-producing crops to help the nation move toward energy independence,” said Larry Mitchell, chief executive of ACGA, as he testified before members of the subcommittee on General Farm Commodities and Risk Management of the House Committee on Agriculture.

“Most, if not all members of this subcommittee have publicly stated on many occasions that the new farm bill will be drafted by the agriculture committees of the U.S. Congress and not at the World Trade Organization (WTO),” said Mitchell. “We do not challenge you to do so, because we know you will do so. We are here to help you, and once we have done so, then let’s take this plan to the WTO because this plan does exactly what has been advocated by the WTO – it eliminates subsidies, addresses the issue of overproduction and helps establish better prices for farmers around the world.”

Among the association’s recommendations was the admonition to extend the Milk Income Loss Contract (MILC).

Dairy farmer margins to improve with higher milk prices
Some relief for dairy producers from higher feed and energy costs is on the way according to economists with the National Milk Producers Federation (NMPF). The USDA estimates February’s all-milk price at $14.70, up 20¢ from January’s revised figure, and up $1.20 from a year ago. NMPF projects the March all-milk price to rise to $15.80, $3.20 higher than a year ago, and to jump again in April to about $16.50, $4.40 above April 2006. Based on futures prices, the all-milk price is projected to average $16.40 for all of 2007. That’s $3.50 higher than the average all- milk price for 2006, and $2.25 higher than the average all-milk price for the previous four years.

Higher production costs have started to impact milk production, and CWT’s herd retirement and export assistance programs will further reduce increases in domestic supplies in the equivalent of 1.4 billion pounds of milk. That will help provide the price relief dairy farmers need.

In a related development on dairy economics, the USDA released its highly anticipated corn plantings report recently. The agency is forecasting corn plantings in 2007 will total 90.2 million acres, an increase of 15 percent from last year. As a result, corn futures markets were down 20 cents on Friday.

Other numbers worth mentioning: Soybeans acres are expected to dip down to 67.1 million in 2007, down 11 percent; wheat acreage is projected to be up 5 percent; cotton acreage is expected to total 11.9 million, down 21 percent from last year.

—From April 2 NMPF newsletter

CDC urges dairy price investigation
The California Dairy Campaign (CDC) and the National Farmers Union (NFU) are calling for the USDA Inspector General Phyllis K. Fong to conduct an investigation into potential misreporting practices of non-fat dry milk (NFDM). In a letter to Inspector Fong, NFU President Tom Buis said the prices reported by the National Agriculture Statistics Service (NASS) have consistently been below actual prices in the marketplace, resulting in lower prices for dairy producers.

NASS has been reporting NFDM prices below the market price for nearly eight months. Buis said that this is very troubling because USDA uses NASS data to calculate prices for dairy commodities. Farmers, therefore, receive less than the fair market value for their milk. Recently, USDA’s Agriculture Marketing Service revised the NASS weekly NFDM survey prices for the three final weeks of March 2007, a signal the department recognizes a problem exists.

“When we traveled to Washington, D.C., last month, we raised the issue about NFDM prices directly with lawmakers,” explained CDC President Joe Augusto. “We alerted them to the significant difference between the U.S. and world price and questioned the accuracy of the NFDM prices reported by USDA,” added Augusto.

“Since our trip to D.C., the USDA has adjusted NFDM prices to reflect a more accurate price, but we believe it is imperative that a thorough investigation is conducted immediately to determine how these reporting mistakes occurred and how the system can be improved in the future,” stated California Farmers Union (CFU) President Joaquin Contente.

“I urge your office to immediately investigate potential misreporting and review milk pricing programs to ensure all dairy prices are accurately and fairly reported,” Buis said in the letter. “Since this misreporting began, dairy farmers have lost hundreds of millions of dollars,” Buis said. “America’s dairy producers should not be held economically liable for the department’s improper administration of its programs.”

National Farmers Union is urging USDA to take action and immediately review price reporting procedures and milk pricing programs and, if dairy prices have been understated, work to ensure dairy farmers are compensated for lost revenue.

Federal agencies advised of misleading milk labels and advertising
More than 500 interested parties joined Monsanto recently in sending letters to the U.S. Food and Drug Administration and Federal Trade Commission requesting companies stop using deceptive milk labels and ads.

The letters outline how certain milk labels and promotions that differentiate milk based on farmer use of bovine somatotropin (bST) are misleading to consumers and do not meet the standards set by laws and regulations for either the Federal Trade Commission or the Food and Drug Administration.

“The people who signed these letters are dairy producers, industry professionals and consumers from across the country who have expressed concerns about specific labels they find to be false or misleading,” said Kevin Holloway, president of Monsanto Dairy Business. “In many cases, they came to Monsanto to find out what could be done about milk marketing tactics that disparage milk and deny farmers a choice in using approved technologies. We believe FDA and FTC are the correct agencies to address the matter with the companies who employ misleading labels or promotions.”

The letter to the FDA highlights deceptive milk labels and calls for clear guidance and enforcement by FDA to address labeling that disparages milk from cows supplemented with Posilac.

The letter to the FTC outlines deceptive advertising and milk promotions that mislead consumers and requests FTC begin an investigation into the challenged practices. Specific examples of misleading labels and ads are cited and attached to the letters. Letters and attachments are available at www.monsanto.com/posilac/letters.

Monsanto submitted the first set of signed letters on behalf of all who signed them in February and continues to compile additional letters as dairy producers and others sign them.

“This is of great concern to dairy producers” said Dennis Areias, a Los Banos, California, dairy producer who signed the letters. “Deceptive labels suggest to consumers that there is something wrong with the milk they have been drinking for the past 13 years. Even though the companies that print these labels know this is not true, they choose to mislead consumers in an effort to charge more money for the same milk.”

Cattle movement from Mexican province suspended
Due to noncompliance of cattle movements in the state of Coahuila, Mexico, and a failure in reaching a resolution to the deficiencies, APHIS will suspend all imports of cattle from the state of Coahuila.

Importation of cattle originating from this state will be suspended effective April 17, 2007. This suspension of cattle imports will remain in effect until APHIS has determined the state is in compliance with tuberculosis program guidelines. All cattle presented at U.S. ports of entry originating from Coahuila must be refused entry beginning April 17, 2007.

Midwest Dairy Consortium formed
A multi-state, multi-disciplinary research and education program for the Midwest dairy industry has been launched by 10 Midwestern land-grant universities, headquartered in the University of Illinois Department of Animal Sciences.

The new program – the Midwest Dairy Consortium (MDC) – is supported by colleges of agriculture at the University of Illinois, Iowa State University, Michigan State University, the University of Minnesota, the University of Nebraska, North Dakota State University, the Ohio State University, Purdue University, South Dakota State University and the University of Wisconsin.

“The mission of the MDC is to maximize use of scarce financial resources and create new support mechanisms to enhance student education and training, promote research directly relevant to the Midwest dairy industry and deliver information to end-users more effectively,” said James Drackley, a University of Illinois professor of animal sciences and the MDC’s director.

Drackley said that by fostering exchanges among the partners, it is hoped that MDC will create new mechanisms to support graduate student training and experiential learning opportunities for dairy students.

“We also hope to establish funding mechanisms for new education and research programs with greater relevance and accountability to the dairy industry,” he said. “The overriding goal is to contribute to the improved economic viability of the Midwest dairy industry and the rural Midwest.”

MDC members will share graduate courses, graduate fellowships and undergraduate internship programs to provide farm experience for students without that dairy experience, he explained.

“With continued contraction of state-supported dairy science activities, many universities are no longer able to provide comprehensive programs in education, research and extension,” Drackley noted. “The dairy industry and its support industries have consolidated tremendously in the last decade. Similarly, the ‘information industry’ associated with universities and agribusiness will need to discover how to consolidate many of its activities to remain competitive and effective.

“We are convinced that formation of the MDC is a strong step in that direction.”

For dairy support industries, dairy organizations, and producers, the MDC, in Drackley’s view, provides a chance to take a proactive role in ensuring a supply of future employees and a vigorous Midwest dairy industry.

“By sharing the role of supporting programs of general importance to the industry, concerns about competitive advantage are minimized and the dairy industry as a whole will benefit,” he said. “In turn, that is good for dairy producers, industry, and universities alike.”

UC-Davis to evaluate manure technologies
The U.S. Environmental Protection Agency has awarded the University of California-Davis nearly $15,000 to review technology for managing and treating dairy manure in the San Joaquin Valley. The grant will fund a comprehensive review and a Web-based clearinghouse of technologies designed to curb environmental impacts on soil, water and air that are caused by cow manure generated at dairies. PD

—Western United Dairyman

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