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  February 2017 Issue No. 451

Inside this months issue …

Our story of the month:
DFA’s Conspiracey to Control Northeast Producers Dates Back 20 Years 
Click Here.

Cheddar Block/Barrel “Split” is a Real Head Scratcher (p. 1):   
     Recent weeks’ cash Cheddar trading activity has demonstrated tremendous variability in the difference between 40-lb. Cheddar blocks and 500-lb. Cheddar barrels.  On January 27, for example, blocks were 24 cents/lb. higher than blocks.  But by February 9, barrels were 3 cents higher than blocks.  The integrity of CME cash markets is questionable.

Milk Per Cow + Strong Economy = U.S. Dairy Growth (p. 1):
   Writer Jan Shepel interviewed University of Wisconsin-Madison dairy economist Mark Stephenson about his perspective on 2017’s dairy events and prices.

U.S. Milk Powder Prices Slipping – Are Mexicans Shopping Elsewhere? (p. 2):
  Industry sources tell of diminished interests by Mexican buyers in U.S. dairy proteins.  Worries are that the Mexican buyers are put off by statements made about their country by President Trump.  Meanwhile, the EU is sitting on a big pile of Skim Milk Powder.  We should not take our historic dairy trading partners for granted!

Rabobank’s Tom Bailey Predicts 2017’s “All-Milk Price” at $16.80/cwt. (p. 2):
    Rabobank’s top dairy economist wrote a recent article in Hoard’s Dairyman, in which he predicted an “All-Milk” price of $16.80 for 2017.  That’s only a modest improvement over 2016’s milk prices.

Trump Pulls United Stats Out of TPP Pact (p. 2):
   As promised, President Trump pulled the U.S. out of all negotiations involving the Trans-Pacific Partnership.  The TPP is kaput.

Jan. 2017 Class III Price Drops to $16.77, Down $.63/Cwt. (p. 2):
  For January, Class III (cheese) milk prices dropped by $.63/cwt.  But both Class II (cultured products) and Class IV (butter-powder) milk climbed over $1.00/cwt. in USDA’s federal milk order program.

Sonny Perdue’s Daunting Challenges at USDA (p. 3):
USDA Secretary-designate Sonny Perdue was the final Trump Cabinet nominee.  A former Georgia governor and veterinarian, Perdue faces a big task of addressing policies for agriculture and food.  Perhaps the biggest headache will be what to do about anticipated corn surpluses and low prices for a handful of major agricultural sectors.

“Much Improved” Price Picture Predicted for Dairy in 2017 (p. 3):
  Jan Shepel reports addition comments and insights by UW-Madison dairy economist Mark Stephenson.

DAIRY PRIDE” Bill Gathers Steam in U.S. Senate (p. 4):
  A U.S. Senate bill that proposes banning use of the phrase “milk” for plant-baaed beverages is gaining support in the U.S. Senate.

Vilsack Gains Top Post at U.S. Dairy Export Council (p. 4):
    Former USDA Secretary Tom Vilsack has taken the top job at the U.S. Dairy Export Council.  He’ll be well-paid.  But questions arise.  Prohibitions against former high-level federal employees stipulate that Vilsack may have no contact with USDA, nor advise foreign agents, for a long period.  What will he do to earn his salary???

Glanbia & Three Co-ops Announce Cheese Plant Project in Michigan (p. 4):
    Plans for a big new cheese plant in Michigan have been announced.  Ireland’s Glanbia will team up with Dairy Farmers of America, Michigan Mik Producers, and Foremost Farms in this project that is estimated to cost as much as $400-$500 million.

Transparency, Sustainability Key Buzzwords to Dairy & Food Products Marketing (p. 5):
    Jan Shepel reports on a recent speech about future trends in dairy products by Ryan Sirolli, a dairy innovation leader for Cargill.  He discussed a number of trends driving consumer food product innovation.

CDI and DFA Talking … (p. 5):
   But what are they talking about???

Tafels Tie Together Pasture, Cows, and Consumers’ Wishes (p. 6-7): 
     Paris Reidhead visits a young New York State dairy farm family --- Adam, Margaret Tafel and their family.  The Tafels have a 200-cow dairy herd that’s organic, and fed only grass.  They specialize in cow comfort, and sell their milk to Maple Hill Creamery, earning over $40/cwt. with their Winter grass-fe premium.

Organic Milk Supplies Burdensome – Prices Tumbling (p. 7):
The story is the same in the Northeast, Midwest and California – organic farm milk supplies are a burden on marketers and prices are dropping.  Numerous dairies are transitioning to organic status, but marketers already have more milk than they know what to do with, heading into the spring flush.
DFA’s Conspiracy to Control Northeast Producers Dats Back 20 Years (p. 8-9): Pete Hardin digs deep into the history of DFA’s take-over of Northeast dairy farmers – going back 20 years and naming names.  At present, DFA is threatening to cut as many as 900 independent Northeast dairy producers out of their markets by April 1, 2017 … if the Northeast federal milk market administrator doesn’t relax pooling rules.

DFA & DMS Threaten to Terminate Northeast Independent Producers (p. 8):
   This article summarizes recent months’ dirty tricks by DFA and DMS that are hog-tying the Northeast dairy industry.

Key Language in the January 19, 2017 DMS Letter to Independent producers (p. 9):
We analyze language of the January 19, 2017 letter sent to DMS’ independent Northeast milk producers.  Ugly.

Depooling Bad or Good?  DFA Economist Hollon Double-Speaks (p. 10):
    The Milkweed catches Elvon Hollon, DFA economist, in self-contradictory statements.  In California in 2015, Hollon claimed that strict pooling regulations were necessary for the integrity of a federal milk order.  But in a January 12, 2017 letter to the Northeast milk market administrator, Hollon asks for completely unrestricted milk pooling rules.

USDA Taking Public Comments on Possible Organic Check-off (p. 10):
    Will Fantle of The Cornucopia Institute writes skeptically about the proposal for an organic commodity check-off that’s now subject to comments by USDA.

McDonald’s Phony “Mozzarella Sticks” Lawsuit Settled Out-of-Court (p. 11):
    Pete Hardin summarizes the now settled lawsuit and related events involving McDonald’s sale of adulterated “Mozzarella Sticks.”  Hardin writes about details that had to be previously kept under wraps.

Judge in California Approves Cancer Warning Label for Monsanto’s Roundup Herbicide (p. 11):
    The headline says it all.  Monsanto’s angry lawyers will appeal, claiming a cancer warning label on Roundup herbicide will hurt sales.

Group Pushes for Return of COOL in Trump’s First 100 Days (p. 12):
    The activist cattlemen's group – R-CALF USA -- is pushing the Trump administration to revive the “Country-of-Origin-Labeling” precepts for labeling meat products.  “Free-trade” politics helped kill earlier attempts to institute COOL, so that U.S. consumers could know that their meat comes from U.S. raised and processed livestock.

Foot-and-Mouth Disease Outbreak Hits South Korea (p. 12):
   Nate Wilson reports on a serious outbreak of FMD in South Korea.  That nation is already suffering a serious outbreak of avian flu.

CME Cheddar Prices Gyrate, Butter & NFDM Down Slightly (p. 13):
Our dairy commodity review for the past month finds curious gyrations in the Cheddar cash markets.  Butter is seasonally strong.  Nonfat dry milk prices at CME are reversing some of the progress made during recent months.

Meat Giant JBS in Brazilian Financial Scandal Investigation (p. 14):
    Brazil meat giant JBS, SA is caught up in a big scandal over financing for its purchases of meat packing businesses in the U.S. and Great Britain.  Nice guys, eh??

NY Farmers Solar Panel Fiasco: Boodoggle Update (p. 14):
    Paris Reidhead revisits the Sitts family of Franklin, New York.  Last summer, Paris wrote about their troubled solar panel system for heating water in their milk house.  The firm that installed the system seemed happy to take nearly $30,000 instate subsidies, but has not repaired or replaced the failed system in many months.

NYS Sinking $2.5 Million into DFA Dairy Project (p. 14):
    A DFA investment with several large, western New York dairy farms recently gained a $2.5 million grant from New York State.  That grant will average about $83,000 per employee.

CME price gyrations … what to believe??? (p. 15):
    Pete Hardin dissects the present and historic antics of Cheddar pricing at the Chicago Mercantile Exchange and concludes that something other than honest market opinions reign there from time to time.

Where Does the Imported Grain Audit Trail Track Back To? (p. 16):
    John Bobbe of OFARM – an organic agriculture activist – visits the murky world of imported organic grains and blisters USDA for its failure to inspect the organic integrity of these imports – many of which come from Turkey and Eastern Europe.

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