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  January 2017 Issue No. 450

Inside this months issue …

Our stories of the month:
U.S. Positioned as Only Global Source for Residual Butter & Cream
and …
Swiss Valley Farms' Horrid Finances Plague Prairie Farms Merger 
Click Here.

U.S. Positioned as Only Global Source for Residual Butter & Cream (p. 1):   
     One of our two “Stories of the Month” for January.  (Click on stories of the month, above.)

DFA/DMS Extending Dirty Tricks in Northeast (p. 1):
   DFA/DMS Extending Dirty Tricks in Northeast (p. 1):  Word from the Northeast is that Dairy Farmers of America and Dairy Marketing Services at at it once again, trying to drain Northeast dairy farmers’ milk checks.  This time, DFA/DMS is offering a bonus to a Dean Foods in New England as part of a scheme to cut Class I handling allowances elsewhere in the Northeast down to zero.  Lose.  Lose.

2017 Kicks Off New Wrinkles for Dairy (p. 2): 
   The New Year brings in some new rules on the farm: no tail-docking, no rbGH/rbST rules from some marketers, restrictions on use of veterinary drugs, and “GMO-free” rules from Dannon.

Surprise!  Butter Boosts December Class III & IV Price (p. 2):
    Higher dairy commodity prices drove up the December 2016 Class III (cheese) and Class IV (butter-powder) prices to $17.40 and $14.97 per cwt., respectively.

Will Wisconsin’s Milk Flow Respond to Plants’ Posilac Ban? (p. 3):
   Starting on January 1, numerous Wisconsin dairy plants laid down the law – no farmer use of Posilac (rbGH/rbST).  Will Wisconsin dairy farmers comply?  What’s driving this dictate?   Export buyers don’t want dairy products processed from milk from herds injected with Posilac.

Wisconsin Gov’t Agencies Roll Out Methane Digesters Master Plan (p. 3):
   Three state agencies in Wisconsin have recently announced a hurry-up plan to subsidize construction of methane digesters for mega-dairies in the state.  To offset adverse publicity about water pollution, Wisconsin’s Republican leaders are betting on digesters.  The way the rules for grant applicants are written, it looks like the table is tilted towards big dairies in polluted Kewaunee County will get most of the marbles in the $20 million pot.

2017 Trends and Predictions for Dairy & Food (p. 4):
Food analyst Ed Zimmerman offers his look ahead at 2017 and the major trends that will play out.  Interesting!

No Plans for DFA’s Ex-Quaker-Muller Plant (Batavia, NY);
No Jobs Created, DFA Faces County Tax Levy at 100% (p. 5):

  Writer Nate Wilson digs deep into the non-events surrounding DFA’s closed yogurt plant at Batavia, NY.  County officials have retracted the tax breaks granted to DFA one year ago, because DFA has made no progress … heck, doesn’t even have a plan … or restoring dairy processing to the former Quaker-Muller yogurt plant.

Veterinary Feed Directive for Livestock & Poultry is Now in Effect (p. 5):
  Jan Shepel explains the purpose and general details of the new rules restricting use of certain drugs for livestock and poultry operations.  All livestock producers must pay attention to this one!

Congressional Letter Asks FDA for Stricter Enforcement of the Term "Milk" (p. 6):
    Jan Shepel reports on a mid-December letter sent to FDA by more than 30 U.S. Senators and Congressional representatives.  That letter seeks an FDA ban on the use of the word “milk” in describing beverages made from plant-based materials.

Vilsack to Head USDEC?  Dairy Can’t Say “Good Riddance” (p. 6):
    Some media are reporting that outgoing USDA Secretary Tom Vilsack will be named President/CEO of he U.S. Dairy Export Council.  The Milkweed raises questions about whether, if Vilsack does gain that post, if he will be violating conflict-of-interest statutes.  Vilsack has had multi-million dollar grants to USDEC every year he’s been atop USDA.

For the Past 30 Years (1995-2015): U.S. Commercial Disappearance Has Topped Farm Milk Output (p. 7):
    An anonymous dairy farmer has researched how for the past twenty years, U.S. commercial demand has been higher than U.S. milk production?  Where’s all the “surplus” been???

Major Structural Changes Directly Ahead for U.S. Dairy Cooperatives (p. 8):
   This controversial analysis will upset a few folks.  Pete Hardin explains how many U.S. dairy cooperatives have churned red ink and burned assets during the past two years of poor operating margins.  Some of the troubled dairy co-ops and their problems are laid out.  Hardin explains what’s called “Dairy’s San Andreas Fault” – the practice among lenders (such the Farm Credit System) to use as loan collateral the receivables for both dairy farms and their cooperatives.  Trouble is: Much of what dairy co-ops call “receivables” are actually the farmers’ yet-unpaid money for milk that’s been taken by the co-op.

Farm Credit System: More Worries than Just Dairy Farmers & Co-ops (p. 8):  
     We visit some of the history behind the late 1980s bail-out of the Farm Credit System of Omaha by the federal government, following the brutal farm depression of the 1980s.  With demised finances for many major agricultural commodities, the Farm Credit overseers have plenty to worry about in terms of assets’ values and payment abilities as we enter 2017.

Swiss Valley Farms’ Horrid Finances Plague Prairie Farms Merger (p. 9):
Shocking.  One of our “Stories of the Month.”  (Click on stories of the month, above.)

Does Increased High Fructose Corn Syrup Consumption Lead to More Diabetes? (pgs. 10-11):
   Writer Paris Reidhead takes a long look at the science and numbers behind High Fructose Corn Syrup consumption and human diabetes. The causal relationship is not absolute, but a thinking person might want to reach for the water bottle instead of a soda.

F.A.R.M. Program Head Outlines Details to Dairy Audience (p. 12):
Jan Shepel covers a speech given a couple months ago by the head of the F.A.R.M. program.  If things are so great, why all the controversy???

Butter Prices Strong; NFDM Pushing Over $1/lb.; Cheddar Varies (p. 13):
    The signs look pretty good for butter, nonfat dry milk and cheese, in Pete Hardin’s monthly dairy commodity trend analysis.

Management Change at Scenic Central Milk Producers (p. 14):
    Terry Hanson is in line to succeed Ron Statz as the manager of Wisconsin-based Scenic Central Milk Producers.

Lots of info in this issue (p. 15):
    Pete Hardin discusses the major stories in this issue

Better to boost beverage milk’s quality, taste & image (Rathern than play “name-games” with plant-based “milks”) (p. 15):
    Dairy leaders are again attacking soy- and almond-milk products, claiming that plant-based beverages should not be called milk.  From Pete Hardin’s perspective, this looks like a symbolic effort and waste of time.  There’s a problem: the same logic that dairy leaders use to claim plant-based beverages shouldn’t be called “milk” is the reverse of the logic they’re using to defend U.S. cheese industry’s use of terms such as “Cheddar,” “Muenster,” and “Parmesan” in name-game battles with Europe’s cheese interests.

Storms Bring Massive Moisture, Easing California’s Drought Worries (p. 16):
    Huge storms coming off the Pacific Ocean have deluged much of California with rain and snow.  The state’s reservoirs are filled well above seasonal norms and the mountain snow packs are far ahead of normal water content.  At press time, more storms are on the way …

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