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Weekly Digest: California moves one step closer to federal order

Progressive Dairyman Editor Dave Natzke Published on 09 January 2018

Digest Highlights: California producers approve quota plan. NMPF targets "almond milk yogurt" as doubly deceptive. Holstein Association USA had a record year. December margins weaken as milk class prices decline. Find a summary of this and other news here.

California producers approve quota plan; move closer to FMMO

California dairy farmers approved a proposed Quota Implementation Plan (QIP), another hurdle in an effort to bring California into the Federal Milk Marketing Order (FMMO) system.

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Mail voting was held Oct. 6 through Dec. 22. According to Donald Shippelhoute, acting chief of the milk pooling branch of the California Department of Food and Agriculture (CDFA), the vote met all minimum requirements for passage:

• At least 51 percent of the total number of milk producers in the state had to vote. According to CDFA, 703 of 1,059 (66 percent) producers returned valid ballots. Of those, 613 producers (87 percent) voted in favor of the QIP plan.

• Those producers voting must have produced 65 percent of total milk per month (August 2017) in the state. The 703 ballots represented about 2.49 billion pounds of milk. The 613 producers voting for approval represented nearly 91 percent of total milk produced during the month.

Ninety producers (13 percent) voted in opposition to the QIP, representing 233 million pounds of milk (9 percent)

Under the state’s milk marketing order, dairy farmers who own quota received additional revenue for their milk through a higher solids-not-fat price. Created in 1969, quota can be purchased, sold or transferred. Under the current state system, CDFA sets aside about $12 million to $13 million on a monthly basis from the pool, distributing the money to about 60 percent of California’s dairy farmers who own quota.

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The stand-alone QIP would be administered by the CDFA, separate from a federal order. It will only be implemented if California’s dairy producers now vote to create a California FMMO. USDA must publish a final proposed order for a California FMMO for producers to consider.

Dairy Sustainability Award nominations sought

The U.S. Dairy Sustainability Awards program is now taking nominations for 2018. Any dairy farm, business or community effort demonstrating resourceful leadership and employs sustainable practices can be nominated.

Four categories are available for nomination:

• Outstanding Dairy Farm Sustainability

• Outstanding Supply Chain Collaboration

• Outstanding Dairy Processing & Manufacturing Sustainability

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• Outstanding Community Impact

The deadline to nominate a person or group is Feb. 12, 2018. Winners will be announced during a ceremony in Chicago in May. Take a look at past winners and download a nomination form.

NMPF targets ‘almond milk yogurt’ as doubly deceptive

The National Milk Producers Federation (NMPF) urged state and federal regulators to take enforcement action against a plant-based food company whose imitation “yogurt” violates the federal definition for dairy foods and fails to provide the same nutrition as real yogurt.

In letters sent to the U.S. Food and Drug Administration (FDA) and California Department of Food and Agriculture, NMPF called out California-based Kite Hill for illegally labeling its line of products and implying the nut-based foods are suitable substitutes for the real dairy foods it attempts to mimic.

NMPF noted that the Kite Hill product delivers 40 percent more calories and 10 more grams of fat compared to an equivalent serving of vanilla yogurt, while providing one-third less protein and zero calcium.

NMPF’s “Dairy Imitators: Exposed” campaign illustrates the nutritional disparities between imitation foods and real dairy foods.

DFA Cares Foundation donates milk to those in need

Dairy Farmers of America (DFA) donated a truckload of milk – the equivalent of approximately 4,300 gallons – to the Capital Area Food Bank in Washington, D.C.

The milk donation was processed at DFA’s Dairy Maid Dairy plant in Frederick, Maryland. The milk will help feed more than 540,000 adults and children served by the food bank throughout Washington, D.C., Maryland and Virginia.

The donation was made through the DFA Cares Foundation, a nonprofit organization formed in 2005. The foundation provides disaster relief via product and monetary donations, awards scholarships to students pursuing careers in dairy and contributes dairy food and products for those in need.

By the numbers

• California 4a-4b milk prices lower: The December Class 4b milk price was $13.52 per hundredweight (cwt), down $2 from November and $3.07 less than December 2016. It was the lowest 4b price since June 2016. The 2017 Class 4b average was $15.20 per cwt, 93 cents more than 2016. The December 4a milk price was $13.36 per cwt, down 26 cents from November and $1.43 less than a year earlier. It was the lowest 4a price since October 2016. The 2017 4a price averaged $14.95 per cwt, $1.53 more than 2016.

• December Class III-IV prices lower: The December 2017 federal order Class III milk price was $15.44 per cwt, down $1.44 from November and the lowest Class III since April 2017. The 2017 Class III averaged $16.17 per cwt, $1.31 more than the 2016 average. The December 2017 Class IV was $13.51 per cwt, down 48 cents from November and the lowest Class IV price since May 2016. The 2017 Class IV average was $15.16 per cwt, $1.39 more than the 2016 average.

• Holstein Association USA has record year: Holstein Association USA members set an all-time record by officially identifying 742,910 Holsteins in 2017. This is an increase of 8 percent or 52,357 over the previous record set in 2016. Registrations totaled 384,181 head, up 6,876 from 2016. Additionally, there were 358,729 animals identified through the association’s Basic ID program – a stepping stone to full registry status — an increase of 45,481.

• Dallas Fed Reserve district: Drier conditions, lower overall loan demand and a mixed bag on land values characterized the fourth-quarter agricultural bankers survey in the Federal Reserve Bank of Dallas district. The district covers all or portions of Texas, New Mexico and Louisiana. Increased demand for operating loans stood in contrast to lower overall loan demand across the district. Demand for dairy loans were among leading decliners. Requests for loan renewals and extensions increased. Continued tightening of credit standards was noted. Compared to the previous quarter, interest rates for most fixed-rate loans rose slightly, but were steady on variable-rate loans. Interest rates on all loan types are above a year ago.

• Margins end December slightly weaker: Dairy margins started December weaker and continued to drift lower to end the year, according to Commodity & Ingredient Hedging LLC. Margins remain negative through the first half of 2018 and are projected only slightly above breakeven through the second half of the year. The USDA reported November 2017 milk production at 17.3 billion pounds, up 0.4 percent from October on a daily average basis. Growth in the U.S. milking herd has slowed. The USDA’s Foreign Ag Service recently estimated the world’s largest dairy exporting regions will add milk production in 2018, compounding the global glut of dairy products.  end mark

Dave Natzke
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