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April 2015  Issue No. 429

Inside this months issue...

Dairy Industry Weighing Impact of Many Unknowns (p. 1):
    The range of factors impacting futures dairy production and marketing trends right now is mind-numbing: from California’s Drought to Western Europe’s dairy farmers coming off milk quotas.

CA’s H20: SOL (p. 1):
    California’s water situation has dramatically deteriorated during the past month. About two-thirds of the Sierra Madre mountain snowpack disappeared from early March to early April – much of that moisture evaporated rather than melted.

Hard to Gauge What’s Ahead with Dairy Commodities (p. 1):
    The U.S. dairy commodity picture is unsettled right now. Cheddar and Grade AA butter prices have been relatively stable. Nonfat dry milk prices continue relatively weak. Watch California!

B-I-G Deal! Heinz & Kraft Foods = Kraft Heinz Company (p. 2):
    H. J. Heinz and Kraft announced acquisition of Kraft Foods by the condiment manufacturer. The moo-la behind this deal: Brazil’s 3G Capital and investor Warren Buffett’s Berkshire Hathaway. Deal is contingent upon Kraft stockholders, who’ll get a big bonus out of the deal. The bigger picture? Desire of big global money to dive into U.S. food industries, before possible advent of major new “Free Trade” deals.

March 2015 Class III Price is $15.56/cwt.; Class IV is $13.80 (p. 2):
    USDA’s Class prices for manufacturing milk basically flattened, after several months of declines.

New York State Milk Marketing Situation Faces Brutal Spring Flush (p. 3):
    A lot of sick chickens are coming home to roost in New York State this spring. For the last year, the major marketer has been dumping milk. Heading into the spring flush, the state is awash in milk. Some handlers are terminating dairy farmers marketing arrangements. New York’s vaunted yogurt industry is producing less volume than anticipated. What a mess!

Kraft Suppliers: Beware of Dirty Cash Flow Games from New Owners (p. 3):
    If financial practices at Anheuser-Busch are any clue, suppliers to Kraft Foods have reason to worry once the Kraft Heinz deal is completed. Brazil’s 3G Capital is behind the Kraft-Heinz marriage. 3G Capital took over Anheuser-Busch in 2008 and has put suppliers on a 120-day payments basis. Don’t worry: 3G Capital requires incoming financial obligations to be settled on a 30-day basis!

Judge Dismisses Proposed Settlement in Northeast Antitrust Case vs. DFA/DMS (p. 4):
    On March 31, Judge Christina Reiss of the Federal District Court for the District of Vermont dismissed the proposed settlement in the Northeast dairy antitrust litigation. Reiss ruling stated that the Proposed Settlement was not in the best interests of the classes.

Animal Rights & Wrongs: PETA, HSUS, Mercy for Animals & FARM (p. 5):
    The animal welfare agenda is front-burner for dairy. Animal rights groups are pushing more practices for dairy farmers to follow, and big dairy processors/marketers are caught in the middle. Meanwhile, National Milk Producers Federation is pushing hard for its FARM program – detailing animal treatment protocols backed up by inspections. But the animal rights’ agenda and NMPF’s demands are all the same: approaching suppliers with demands for on-farm practices.

Lowball “All-Milk Price” Undercuts Dairy Margin Protection Program (p. 6):
    Read our “Story of the Month” here.

Canadian Milk Quota System to the in the Cross-hairs of World Trade Negotiations (p. 7):
    Writer Nate Wilson details how Canada’s dairy farm milk quota and milk-pricing system are perhaps on life-supports. Canadian dairy producers have increased milk production only one percent in the past four or so decades, while the nation’s population has nearly doubled. MPC imports used in cheese and yogurt manufacture are killing demand for domestic farm milk.

Handlers Dump About 10 Large Dairies in NY (p. 7):
    Private handlers have terminated about ten large dairy farms in New York State – a sign of that area’s disrupted milk marketing situation.

Kraft Foods’ Demised Retail Fortunes Track Back to Processed Cheese Swill (p. 8-9):
    Pete Hardin offers a perspective on where Kraft Foods went wrong during the past 25+ years since Philip Morris Companies acquired the nation’s largest cheese marketer. From price manipulation at the old National Cheese Exchange to “dumbing down” processed cheese products with cheap dairy ingredients and fillers ... Kraft made all the wrong moves. Read what a former top-level Kraft cheese executive said!!!

Food Biotech Follies ... (p. 10):
    Paris Reidhead details a recent fiasco for a Monsanto-inspired, pro-food biotech executive on a French television interview. The Monsanto guy first offered to drink Roundup (Monsanto’s herbicide), and then refused, telling the interviewer, “What do you think I am, an idiot?”

New York Times Writer: Why are We Guinea Pigs? (p. 10):
    Paris Reidhead summarizes the recent column by Mark Bittman that appeared in the NYT. Following announcement that the World Health Organization’s cancer-research branch had declared glyphosate a likely carcinogen, Bittman asked why humans are subjected as guinea pigs for the array of chemicals and pesticides in our food and environment?

Milk Market Order Systems: Plain People on the Interstate of Commerce (p. 11):
    Robert Wills, owner of Cedar Grove Cheese (Plain, Wisconsin), details his concern about the performance of federal milk marketing orders.

FMMO Reform: Fluid Milk Processors’ Perspective (p. 11):
    Warren Taylor, co-president of Snowville Creamery (Pomeroy, Ohio) details the problems facing small-sized fluid processors due to inequities of the federal milk order pricing system.

OSHA Violations Cited as Clear Horizons Defies Dane County’s Default Notice (p. 12):
    Contributor Jim Eichstadt reveals the latest events in the exploding, polluting dairy manure digester in northern Dane County, Wisconsin. County officials have issued a default of contract notice to the digester’s operator, Clear Horizons Dane LLC. But that firm’s lawyer basically denies any violations or problems in a recent letter to the County.

Chobani Yogurt Custody Hinges on Euphrates Cheese Ownership (p. 14):
    Former spouses are at it again, battling in court in Manhattan over control of Chobani Yogurt. Recently, a hearing was held to determine ownership of Euphrates Cheese – a small feta cheese plant in eastern New York. The ex-wife of Chobani’s owner claims that he diverted money from Euphrates Cheese to start Chobani Yogurt.

The “Hardin Plan” ... Suggested FMMO Reforms (p. 15):
    Pete Hardin let’s fly with his proposals for federal milk order reform, including: one class for farm milk, farm-point pricing, zero Class I shipping requirements and zero Class I pooling provisions, zero transportation credits, a “seasonal incentive program” with real teeth, only two federal orders – delineated by the Continental Divide, regular audit by USDA of the protein/fat content of fluid milk packages at retail, plus continued federal audits and rules for components and quality testing. Think about it.

U.S. Drought Beyond CA (p. 16):
    The latest drought monitor map the federal government shows serious drought extending across major portions of the western two-thirds of the U.S. Serious stuff.

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