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July 2017 Issue No. 456

Inside this months issue …

Our stories of the month:
USDA Bans Brazilian Beef Import Ban, and
Q&A: R-CALF USA's Bill Bullard on USDA's Brazilian Beef Ban Interview

Click Above for Story of the Month.

Dairy Farmers’ Fortunes Improving for Rest of 2017 & Beyond (p. 1):   
    Several factors are coming together that should improve dairy farmers’ milk prices.  Those factors include: Tough dairy crops in the northeastern quadrant of the U.S., strong butter markets, and the recent USDA ban on Braziliana beef imports.

Cheese Plants Squeezed by Butter Prices & Block/Barrel “Split” (p. 1):
   Cheese plants whose milk is priced by the federal milk order system are in a cost/price squeeze.  The squeeze is occurring primarily for two reasons.  First, butter prices have soared, leaving cheese plants facing stagnating or declining cheese prices hard-pressed to recover costs from products sold using the Chicago Mercantile Exchange as a pricing basis.  Second, the “block/barrel split” for Cheddar means barrel Cheddar plants are way behind, income-wise.

USDA Bans Brazilian Beef Imports – High Percent of Rejections (p. 2):
  Finally!  In late June, USDA banned imports of Brazilian beef.  In recent months, about 11% of all Brazilian beef inspected by USDA had failed.  This ban should boost prices paid for slaughter steers and cows, across the nation.      Story of the Month, click at top for complete article.

Elanco Wins Preliminary Injunction vs. Arla (p. 2):
   Elanco prevailed in its request for a preliminary injunction blocking Arla Foods’ $30 million advertising/social media program that negatively depicted dairy products processed from milk from Posilac-treated dairy cows.

June ’17 FMMO Manufacturing Milk Class Prices Jump (p. 2):
   Except for dry whey, all dairy commodities surveyed by USDA saw their prices increase in June, compared to May ’17,  Those increases hiked prices for all manufacturing classes of milk in June.

Posilac Ban Pulling Down WI’s Milk Output (3):
  Continuing a months-long downtrend, Wisconsin milk output in May fell below May 2016 totals.  What’s going on?  Many cheese plants are instituting bans on use of Posilac – Elanco’s bovine growth hormone drug.

Head Scratcher: Where’s All that Northeast Surplus Milk? (p, 3):
  
Writer Nate Wilson explores the latest milk dumpage reports for May 2017 and tries to make sense of some claims about more surplus milk in the Northeast and Mid-East federal milk orders  with government reports showing less milk being dumped.     Despite warnings from DFA economist Elvin Hollon in a May 2017 letter, dumpage in the Northeast significantly declined that month!

Foreign Interests Pursing U.S. Dairy Processing Firms (p. 4):
  Foreign firms have purchased their way into leading positions in the United States dairy processing picture.  We review many of the major players.

Cream “Multiples” Rise Nationally During June & Early July (p. 4):
  The surcharges on spot sales of cream – called “multiples” rose nicely during June, according to USDA’s Dairy Market News.  These increased spot sales charges for cream reflect stronger buyer interest.

Troubling Q1 2017 Retail Dairy Sales: Fluid, Cheese & Yogurt All Down (p. 4):
    Retail data provided by Dairy Management, Inc. shows that sales of fluid milk (-3.3%), cheese (-2.1%), and yogurt (-5.3%) all declined in 2017.  In light of expanding inventories of cheese and nonfat dry milk, that retail performance is troubling.

WI Summit Includes Ideas to Improve the Dairy Industry (p. 5):
    Writer Jan Shepel reports on the June 2017 University of Wisconsin forum that aimed to boost the fortunes of the state’s dairy industry.  On the whole, not a whole lot of genuine, new ideas.

Corn Silage has Two Energy Peaks: At Tasssel and Maturity (p. 6-7):
   Writer Paris Reidhead produces an important story, explaining how energy available from corn plants intended for silage has two peaks.  For dairy farmers facing delayed maturity of corn stands, chopping those stands at tassel stage may be the best strategy for optimizing yields and milk production.

NAFTA Update Hearing Features Beef Interests’ Conflicting Testimony (p. 7):
   Writer Jan Shepel summarizes conflicting testimony from different beef industry representatives during a NAFTA update hearing held by the U.S. Office of the Special Trade Representative.  Many major beef groups oppose restoration of Country of Origin Labeling rules here in the U.S.

America’s Dairyland and Trump in the Rearview Mirror as Workers Return to Mexico (pages 8-9): 
      Writer Alexamdra Hall of Wisconsin Public Radio contributed this compelling story about long-term Mexican dairy farm workers conducting a reverse migration – leaving the U.S. to return to Mexico.  Fears of their families being separated are compelling some Mexican workers on U.S. dairy farms to head home on their own.  It is estimated that 60 to 70%  of Hispanic immigrant farm workers are not in this country legally.

Glanbia Wants Guaranteed Margin from Michigan Cheese Plant Project (p. 9):
  
What’s the delay on progress for the massive cheese plant project in Michigan that was announced early this year?  Word is that partner Glanbia wants a guaranteed margin on its cheese production.  Nice if you can get it!

Out of Control: Latest DMI Executives Salary Data! (p. 10):
   IRS Form 990 data for Dairy Management, Inc.’s 2015 executives’ salaries is finally in.  Despite low farm milk prices, DMI executives generally pulled in more moo-la.  These salaries are way out of line with IRS rules for non-profit organization’s salaries.

Out-of-Court Settlement for ABC News/BFK “Pink Slime” Libel Case (p. 11):
  In mid-trial in a Nebraska court, plaintiff BFI and defendant ABC News settled a libel case about “Pink Slime” – i.e., “Lean, Finely-Textured Beef” (LFBT).  Details of the settlement were not made public.

The TRUTH” about LFBT (aka “Pink Slime”) (p. 11):
  Following up on a BFI lawyer’s comment about the “truth” concerning Lean, Finely-Textured Beef, The Milkweed provides factual bases for this questionable material.

Iowa State Study: LFBT (“Pink Slime”) = Low Quality Protein (p. 11):
    This article is a reprint from the June 2012 issue of The Milkweed.  The article details analysis of an Iowa State University study that contrasted the differences between meat quality between beef chuck and Lean, Finely-Textured Beef (LFBT).  Beef chuck has a far higher percent of high-ionic strength proteins, compared to LFTB.  Meanwhile, beef chuck contained 30.78%T insoluable proteins, compared to 77.25% in LFTB.  This study was funded by BFI.  Iowa State’s website no longer posts this study … for good reason!

Q&A: R-CALF USA’s Bill Bullard on USDA’s Brazilian Beef Ban (p. 12):
    The plain-speaking CEO of R-CALF USA tells the inside poop on USDA’s recent ban on Brazilian beef imports.  Important reading!  Story of the Month, click at top for complete article.

Dairy Commodity Scene: Butter Strong, Cheddar & NFDM Weaker (p. 13):
  
Pete Hardin’s analysis of the dairy commodty picture finds that butter demand is pushing up prices.  But Cheddar and nonfat dry milk prices are lower at the Chicago Mercantile Exchange.  Domestic cheese inventories will likely take a jump when the June 30, 2017 data is released by USDA in mid-July, due to heavy cheese production in May.

OFARM Executive’s Perspective on Recent Washington, D.C. Visit (p. 14):
   John Bobbe, director of OFARM (a consortium of organic grain marketers), returned recently from Washington, D.C. where he visited USDA and Congressional offices, being ears on the fraudulent imports of “organic” grain that are busting prices for U.S. producers.  Bobbe lists a long number of “to dos” to restore integrity to grain markets.

Northeast Market Administrator: Improper Class I Underpayments (p. 14):
  In mid-June, the Northeast federal milk market administrator announced that auditors had discovered below-Class charges for milk sales to processors.  Since the market administrator dictates minimum prices only for farm milk sold to Class I (fluid) processors, Class 1 sales are the problem.  One more mess in the undisciplined Northeast.

“Food Safety Charade” – Separate rules for domestic & foreign processors (p. 15):
  Pete Hardin compares the failed USDA inspections of organic grain imports with the pending proposals for importers to be responsible for compliance with imported foods under the Food Safety Modernization Act.  Dangerously, there are two sets of rules – one for U.S.-based manufacturers and suppliers, and the other for imports.  What baloney!

Dairy’s sobering role in the nation’s opioid drug crisis (p. 15):
    It’s little known, but heat-treated milk is a source for the base for manufacture of opioid drugs.  Last year, over 50,000 opioid drug deaths occurred in the United States.  What is dairy’s role in the opioid drug crisis.  Ironically, A2 milk does not contain the Beta-casomorphin 87 (BCM-7) protein that yields the base for opioid drugs from heat-treated milk.

Deep-Pedigreed Ameri-Milk Jeseys Dispersed across the Midwest (p. 16):
    Jan Shepel writes the final chapter for Don Mielke’s long career in dairy farming – dispersal of Mielke’s Ameri-Milk Jersey herd on June 10.


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