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Weekly Digest: California quota program sunset proposal forwarded to CDFA

Progressive Dairy Editor Dave Natzke Published on 12 February 2020

Digest Highlights

California quota program sunset proposal forwarded to CDFA

A plan designed to reform and ultimately end California’s “quota” program by 2025 has been forwarded to the California Department of Food and Agriculture (CDFA). The proposal, submitted by the United Dairy Families of California, calls for a producer referendum on the plan to end the program.

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The recommendation follows months of study and meetings surrounding ways to resolve how state milk quota payments are funded and distributed, led by dairy economists Marin Bozic and Matt Gould. The final recommendation was presented to dairy producers and others during World Ag Expo, Feb. 11, in Tulare, California.

Under the proposal, California’s Quota Implementation Plan (QIP), also called the Quota Administration Plan or QAP, sunsets on March 1, 2025. In the meantime, a Regional Quota Adjuster (RQA) will be modified to result in an equalized quota differential of $1.43 per hundredweight (cwt). The plan will give existing quota holders a cumulative payment of $300 per pound of solids quota, distributed over the five-year period.

In a letter to CDFA Secretary Karen Ross, regional representatives of the United Dairy Families of California noted uncertainty surrounding the program has reduced the value of quota certificates, from $483 per pound of solids-not-fat in October 2018 to $230 per pound in January 2020, a drop of 52% in 15 months.

Last December, the Stop QIP organization filed a lawsuit seeking to invalidate the QIP and initiated a petition drive calling for suspension of a section of the California Food and Agriculture Code (Chapter 3.5), which would effectively terminate the QIP.

A series of regional meetings (Feb. 18-26) has been scheduled for further discussion on the proposal. Dates and locations are available on the United Dairy Families of California website.

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Bills give FDA access to CAFOs for microbial sampling

Identical proposals introduced in the House and Senate would allow the FDA to conduct microbial sampling on USDA-regulated concentrated animal feeding operations (CAFOs) as part of a foodborne illness outbreak investigation. Titled the Expanded Food Safety Investigation Act of 2019 (H.R.5415 in the House and S.2958 in the Senate), the proposals allow FDA investigators to sample water, soil and environmental conditions to determine the outbreak’s root cause or address other public health needs.

House sponsors include U.S. Reps. Rosa DeLauro (D-Connecticut), Jackie Speier (D-California) and Mark Pocan (D-Wisconsin). Senate sponsors include Sens. Kirsten E. Gillibrand (D-New York) and Richard Blumenthal (D-Connecticut).

Under provisions of each bill, a CAFO that receives an FDA request must provide reasonable access for microbial sampling of plants, animals, water and the environment. Data collected during an investigation could be shared with the USDA and relevant state and federal public health agencies to coordinate work in detecting, investigating or preventing foodborne illness.

133 milk donation partnerships approved

The USDA has approved 133 dairy organization-nonprofit organization partnerships designed to distribute milk to low-income individuals under the first round of Milk Donation Reimbursement Program. Approved partnerships can now submit claims for reimbursement of eligible expenses related to fluid milk product donations.

Established under the 2018 Farm Bill, the Milk Donation Reimbursement Program became effective in September 2019. Under the program, eligible dairy organizations partner with nonprofit organizations to distribute food to low-income individuals. Those partnerships may apply for and receive limited reimbursements to cover expenses related to eligible fluid milk product donations.

Congress authorized $9 million for the program in fiscal year 2019 and $5 million per fiscal year thereafter. The USDA will continue accepting applications for the Milk Donation Reimbursement Program for fiscal years 2019 and 2020 through May 1 and Oct. 30, 2020, respectively.

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For details about program eligibility and the application process, click here.

USDA buys dairy products

The USDA’s Agricultural Marketing Service (AMS) awarded multiple bids for the delivery of dairy products for distribution through domestic feeding programs. All deliveries were scheduled between April 1-June 30, 2020. Bid awards included:

  • 831,600 pounds of process cheese from Bongards’ Creameries, Norwood, Minnesota. Delivered prices ranged from $2.325-$2.425 per pound.

  • 66,960 pounds of salted butter from Challenge Dairy Products, Dublin, California. Delivered prices ranged from $2.356-$2.414 per pound.

  • 37,440 pounds of sliced cheddar cheese from Masters Gallery Foods, Plymouth, Wisconsin. The delivered price was $2.69 per pound.

  • 113,400 pounds of mozzarella string cheese from Upstate Niagara Co-op, Buffalo, New York. Delivered prices ranged from $2.38-$2.52 per pound.

  • 1.74 million pounds of cheddar cheese and 2.25 million pounds of shredded cheddar cheese from Dairy Farmers of America, Great Lakes Cheese, Masters Gallery Foods and Schreiber Foods. Purchases prices for packages of cheddar cheese ranged from $2.29-$2.49 per pound; shredded cheese prices ranged from $2.26-$2.55 per pound.

  • 144,144 pounds of yogurt From Chobani, Norwich, New York. Delivered prices ranges from $1.20-$1.25 per pound.

‘Sustainability’ seen as market competitiveness requirement

A survey of global “sustainability” experts indicates companies must make significant progress on reducing greenhouse gas emissions over the next decade to remain competitive in their respective markets. Two-thirds of those responding said companies must become carbon neutral by 2030 or risk harm to their market reputations.

GlobeScan and SustainAbility surveyed more than 550 representatives from business, government, nonprofit organizations and academia in about 70 countries. Findings of the survey, conducted in the fourth quarter of 2019, were released in a report “The Climate Decade: Ten Years to Deliver the Paris Agreement,” during a GLOBE conference, Feb. 11, in Vancouver, Canada.

When asked to identify leaders of sustainability efforts, survey respondents listed Unilever, parent company for ice cream makers Breyers, Ben & Jerry’s, Magnum and Klondike. Others included Patagonia, Tesla, IKEA and Alphabet/Google.

Among the list of consequences facing companies failing to address “climate change” are lack of access to capital, reduced access to markets, difficulty in attracting and retaining talented workers, decreased efficiency and higher operational costs.

January Class III price weakens

The January 2020 Federal Milk Marketing Order (FMMO) Class III milk price continued to descend from the 60-month high set last November. At $17.05 per cwt, January’s Class III milk price was down $2.32 from December and $3.40 less than November but was still $3.09 more than January 2019.

The January 2020 Class IV milk price dipped a nickel from December to $16.65 per cwt but was $1.17 more than January 2019.

January 2020 Class III and Class IV prices were the highest for any January dating back to 2014.

The 2019 Class III averaged $16.96 per cwt; the 2019 Class IV milk price averaged $16.30 per cwt.

HP Hood, Upstate Niagara purchase land for expansions

Two dairy companies have purchased land and will expand in western New York. On Feb. 6, the Genesee Gateway Local Development Corporation (GGLDC) board approved the sale of land in the Genesee Valley Agri-Business Park, Batavia, New York.

HP Hood is purchasing 22 acres and Upstate Niagara Cooperative is purchasing 6 acres. Both companies have plans to grow and expand their businesses over the next several years.

According to a GGLDC press release, the Genesee Valley Agri-Business Park has more than 1 million square feet of facilities and more than 700 workers. With the latest sale, there are approximately 80 acres remaining.

California offers methane reduction program grants

The CDFA is accepting grant applications for dairy methane reduction programs administered by its Office of Environmental Farming and Innovation (OEFI) and funded by California Climate Investments (CCI). Deadline for applications is March 27.

CDFA’s dairy methane reduction programs provide financial assistance for the installation of dairy digesters and implementation of non-digester-based manure management practices. Funds available for 2020 are estimated at $34 million. Program descriptions and requirements are available here:

CDFA will conduct three workshops to assist producers with the application process. Workshop dates are: Feb. 18, Modesto; Feb. 19, Petaluma; and Feb. 20, Fresno. Click here for specific times, locations and registration information.

Additional informational support is available through Climate Smart Agriculture Community Education specialists. See Funding Opportunities for Alternative Manure Management Projects in the November 2019 California Dairy Newsletter.

South Dakota dairies partner on digester project

Brightmark Energy has signed manure supply agreements with two South Dakota dairy farms – Boadwine Farms Inc. and Moody County Dairy Limited Partnership, both near Sioux Falls – as part of its Anthena renewable natural gas (RNG) project.

The project will include construction of new anaerobic digesters on three Minnehaha County farms: Boadwine Farms, Moody Dairy and Pioneer Dairy. Once operational, the digesters will process manure from about 11,710 cows and heifers, and is anticipated to generate about 217,000 million British thermal units (Btu) of renewable natural gas annually.

Brightmark will develop, own and operate the project. The methane generated by the manure will be captured, cleaned, converted into RNG and delivered into the interstate gas pipeline system.

Brightmark Energy, a San Francisco-based waste and energy development company, also has active biogas projects in Washington, Wisconsin and New York, and is developing similar biogas projects nationwide.

FarmFirst Dairy annual meeting features workshop series

FarmFirst Dairy Cooperative welcomes dairy farmers to attend the cooperative’s Producer Discovery Workshop series as part of its 2020 annual meeting.

The workshops will be held Feb. 14 at the Premier Best Western Hotel & Convention Center in Oshkosh, Wisconsin.

“The Impact of Dairy Policy in 2020,” featuring Dr. Mark Stephenson from University of Wisconsin – Madison’s Center for Dairy Profitability, will kick off the workshops at 1:15 p.m. He’ll discuss the Dairy Margin Coverage program and current legislative, regulatory and trade issues, and their potential impact on milk prices into 2020 and beyond.

“Dairy Evolutions & Revolutions,” featuring Katie Burgess, a commodity risk analyst from Blimling & Associates, begins at 2:45 p.m. She’ll discuss how advances in technology and evolving consumer preferences have created a new upheaval – with online groceries, dynamic discounters and tricked-out convenience stores.

There is no cost to attend the workshops, but advance reservations are requested. Call Julie at (608) 286-1909.

For more information about FarmFirst Dairy Cooperative’s eighth annual meeting and to learn more about guest speakers, click here.  end mark

Dave Natzke
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