Turning Over Some Pieces of the Dairy Puzzle (p. 1):
The past month has allowed editor Pete Hardin to
see more clearly what’s ahead for dairy, including: constricting U.S. milk
supplies, higher grain prices and energy prices, global scarcity and higher
prices for dairy products, and reduced U.S. consumer demand.
USDA Secretary Claims Powers to Suspend Ethanol Mandates
(p. 1):
In seemingly unnoticed comments buried deep in an
article in the Chicago Tribune on April 18, USDA Secretary Ed Schafer claimed
that he has authority to reduce mandates for converting corn to ethanol, if U.S.
corn production is limited.
April 2008 Class III Price $16.76 – April Class IV $14.65
(p. 1):
Federal milk order class prices for cheese and butter-powder
milk drop lower.
Worst Drought of Century Drops NZ Milk output by ?.?% (p.
2):
As the NZ milk production season concludes, debate ensues as
to just how much less milk that island nation really made. Some reports say NZ
is finishing at –6.5%, others say NZ lost only a couple percentage points.
Regardless, NZ’s dairy export near-monopoly, Fonterra, is scrambling to secure
global dairy product inventories. That’s because it’ll be tough for NZ dairy
cows to bounce back from the rigors of this year’s drought.
Global Dairy Trade: Fonterra Milk Powder Auction (p. 2):
Starting later this year, Fonterra (NZ’s dairy export giant)
will conduct a multi-tiered auction for poor nations to buy limited amounts of
available dairy proteins.
Extremely Wet Spring Weather Stalls Upper Midwest
Fieldwork; USDA: May 10 Corn Planting 26 Percentage Points Behind Normal (p. 3):
Spring field work is way behind in the U.S. – particularly in
states like Indiana, Iowa, and Illinois. Corn planting is 26 percentage points
behind the five-year average. The 2008 U.S. corn crop is in trouble already.
USDA Playing Games with ’08 Corn Crop Estimates (p. 3):
USDA recently announced that this year’s corn crop could be off 7%, compared to
last year, due to bad weather at planting time. USDA is trying to buffer the bad
new of coming crop problems and higher food costs: farmers’ planting intentions
for corn were down 8% before they ever hooked up the corn planters. Bad weather
will cause a double-digit decline in U.S. corn output for 2008.
Why Can’t U.S. Dairy Farmers Get World Market Prices? (p.
4):
John Bunting estimates that from July 2007 through March
2008, U.S. dairy farmers whose milk prices are set by the federal milk order
program lost an average of $3.51 per cwt. of milk because our dairy commodity
prices lag far behind global prices for butter, Cheddar cheese and nonfat dry
milk.
Feature Story: DFA Scandal: Hanman Secretly
Paid Ex-Board Chairman $1 Million (p. 5)
Read all about the latest mega-scandal to rock
Dairy Farmers of America here.
Monsanto’s Tentacles Threaten Derry Brownfield’s Radio
Career (p.6):
One of the nation’s leading farm broadcasters and agriculture commentators –
Derry Brownfield – got his you-know-what in the wringer with an April 18
broadcast blasting Monsanto. Next day, the Learfield Network (which Derry
co-founded) announced his broadcasts would be terminated. Read about this
situation and other background on Monsanto’s long-term intimidation of media
critics.
One Cup at a Time: Sugar River Dairy’s Excellent Yogurt (p.
7):
Ron and Chris Paris have been making yogurt in their small
dairy plant in Green County, Wisconsin for six years. The Milkweed profiles
their yogurt production and marketing. Interest in small-scale dairy processing
is growing rapidly.
Bio-Fools Rule: Raising Corn for Ethanol Fuel is a Very
Dumb Idea (p. 8-9):
The headline clearly describes writer Paris Reidhead’s
thoughts on the corn-for-ethanol issue. Paris reaches back into his encyclopedia
of information to explain why, for many reasons, corn ethanol is a lose-lose
deal for society. He also has a well-based question-and-answer section.
USDA to Promote NAIS with Promotion Check-off Funds (p.
10):
Writer Mary Zanoni details how the business plan of USDA’s
Agricultural Marketing Service plans to use agricultural commodity promotion
funds (beef, dairy and pork) to promote the mandatory National Animal
Identification System.
CME Changes Will Reduce Trading Information (p. 10):
In mid-May, the Chicago Mercantile will remove key
information from daily trading activities – including the number of trades!
Another step backwards for transparency in dairy pricing!
Global Pork Industry Collapsing??? (p. 12):
Karen Kinstetter takes a close look at trends in the global
pork industry. High grain prices and a weak U.S. dollar mean that foreign
producers are getting slammed by both high costs and undercutting of their
prices by U.S. product. But U.S. hog producers are going backwards financially,
too.
FMMO Class I Sales Down 2.54 Percent in 2008’s First
Quarter (p. 13):
January-March 2008 saw overall fluid milk sales decline by
2.54% in the federal milk order, when adjusted on a daily-average basis. That
adjustment is needed because February contained an extra day.
Milk Haulers’ Cost Dilemma: Outside Tank-Washing Fees (p.
13):
Instigated by Dean Foods, more and more milk processing
plants are refusing to allow milk haulers to wash and sanitize their tanks at
the plant. Outside costs for washing and sanitizing a milk trailer can run
around $300 – that’s a bit more than $.50 per cwt. in costs.
The Russians ARE Coming (To Buy U.S. Dairy Heifers) (p.
14):
Arrangements have been sealed between the respective nation’s
governments. Russia will now commence serious purchases of U.S. dairy heifers.
Junction of Agriculture & Antitrust: Leahy (p. 15):
Pete Hardin picks on Vermont’s U.S. Senator Patrick Leahy
(whom he likens to a woodchuck) as a critical player in the federal government’s
inability to do ANYTHING constructive for dairy farmers and consumers. Without
adequate antitrust enforcement, agriculture programs mean nothing.
Export Deals & Grain Costs to Tighten U.S. Dairy Scene (p.
16):
Pending export deals for both dairy protein powders and
butter will tighten up U.S. dairy supplies. Meanwhile, high grain costs are
starting to depress U.S. milk production.
Feature Story #1: DFA (Enron of the Dairy
Industry): “10 Years and Crumbling” (p. 1)
This story is one of our articles of the month.
Read all about it here.
March 2008 Class III Price $18.00 – March Class IV $14.17
(p. 1):
Class prices in USDA’s federal milk order program are under
downwards pressure due to plenty of milk in late winter/early spring. Class IV
(butter-powder) is way down.
Skyrocketing Commodities’ Prices Foretell Inflation &
Economic Chaos (p. 2):
Just in the first 10 weeks of 2008, spectacular inflation of
core commodities took place. Corn up 25.5% … hard winter wheat +42.3% … natural
gas +31.6% … and on and on. But Cheddar cheese (in CME trading) was the only
core commodity to register a double-digit decline in this year’s first 10 weeks.
Farm Policy Impasse Persists in D.C. (p. 2):
Looks like Representatives and Senators will fail
to meet their mid-April deadline for passing new federal farm legislation. Don’t
hold your breath on this one!
Butter Fraud Indictments Issued (p. 2):
Two individuals and a warehousing firm have been indicted for
fraud involving illegal repackaging of inedible butter and sale of some of that
"stuff” for human consumption.
Despite Shortages, U.S. Wheat Exports Up 69% for Marketing
Year (p. 3):
Despite the fact that many fear the U.S. could run out of
wheat before our new crop is available in early summer, massive quantities of
wheat are being shipped out of the country. The Bush administration is asleep at
the switch on this one.
New Zealand Dairy Industry Faces Worst Drought in 100 Years
(p. 3):
New Zealand’s dairy marketers had expected a 3% gain in milk
output for that key island nation’s 2007-2008 dairy production year. But severe
drought is causing what looks like a –3% net for the year, which is now
finishing up. Global dairy markets are tight!
March ’08 Milk-Feed Ration Worst in Decades (p. 3):
Fast-increasing grain prices translate into USDA’s
calculation that the relationship of farm milk prices to dairy producers’ costs
for purchased grains is the worst in decades. And grain prices keep rising.
DFA Not Worth a Darn: $500 Million of Worthless Assets (p.
4):
DFA counts a total of $500 million combined
“Goodwill” and “Other Intangible Assets on its balance sheet – as part of the
co-op’s claimed $682 million equities. Further, when one subtracts out as yet
unposted losses and unpaid pension program obligations … DFA’s real net worth
looks very close to zero.
“Worst of the Worst” in DFA’s 2007 Audit (p. 4):
In 2007, DFA’s equities declined by $190 million;
“Goodwill” and intangible assets ballooned to $500 million of “assets;” NDH lost
$63.5 during October-December, after that subsidiary’s losses were posted on
DFA’s books; and pension liabilities (at least one listing) total $57 million.
DFA’s Subsidiaries and “Non-Member Businesses” Drain
Members’ Equity (p. 4):
DFA is structured so that profits from so-called
“non-member businesses” are not shared with DFA’s member-producers. But profits
in 2007 were very negative, resulting in huge losses at DFA’s subsidiaries have
caused write-downs of members’ equities.
Feature Story #2: DFA’s White Elephant—NDH—Lost
$134,200,000 Last Year (p. 5):
The 2007 audit of DFA reveals absolutely HORRID financial
performance for its biggest subsidiary—National Dairy Holdings. Find out just
how bad it was here.
“Old-fashioned Tillage & Seeds Reduce Mycotoxins in Ear
Corn (p. 6):
Writer Paris Reidhead visited the Perry family’s dairy farms
in western New York, where moldboard plowing and use of non-genetically modified
seeds results in virtually zero contamination of their ear corn by mycotoxins.
Valid Reasons for Perry’s Round-Up Ready Seed Worries (p.
6):
Paris Reidhead explores the scientific bases for
concerns about harm to animals and soils from using of “Round-Up ready seeds.
USDA OIG Credits The Milkweed for Revealing Milk
Powder Scandal (p. 7):
In March, USDA’s Office of the Inspector General
unveiled a long-running investigation of nonfat dry milk price reporting. OIG
found that USDA’s National Agricultural Statistics Service had repeatedly failed
to heed warnings about misreporting of weekly milk powder prices. Those prices
are used in USDA’s formulae to calculate monthly producer prices through the
federal milk order program. OIG credited The Milkweed with breaking apart this
scandal.
U.S. NFDM Exports’ Volume Highest When Prices Low (p. 8):
Writer John Bunting explores historic data to show
that U.S. exports of dairy protein powders coincide with periods of low domestic
prices. U.S. dairy farmers are failing to reap returns commensurate with global
dairy protein powder prices.
U.S. Milk Powder Exports: Quality Concerns (p. 9):
John Bunting details long-term problems with
quality that cause U.S. dairy protein powders to be devalued on global markets.
Too many scorched particles and too much moisture content are specific problems.
What ever happened to quality control???
How Much Longer Can DairyAmerica/Fonterra Export Deal Last?
(p. 10):
For the past seven or eight years, New Zealand’s
Fonterra has held exclusive export control over all dairy protein powders
produced by DairyAmerica’s cooperatives. How much longer can this inequitable
relationship last? We explore related issues.
U.S. Butter Exports Face Stiff Tariff Barriers (p. 10):
Other nations’ import tariffs on butter are one
major reason hampering U.S. exports of butter.
CME Keeps Growing: Adds NYMEX (p. 10):
The CME Group keeps growing. Following addition of
the Chicago Board of Trade within the past several months, the CME group has now
added the New York Mercantile Exchange to its holdings.
Dangerous Animal Feed Contaminant: What are Mycotoxins? (p.
11):
Paris Reidhead explains this feed contaminant.
More about Mycotoxins and Related Feed Contaminants (p.
11):
Feed industry professions are very worried about
mycotoxins and related feed contaminates.
AMPI’s Mark Furth to Retire (p. 11):
Long-time manager of Associated Milk Producers,
Inc., Mark Furth, will retire at the end of 2008.
Famine in America? Food Banks Severely Pinched (p. 12):
Writer/farmer Karen Kinstetter details how U.S.
food banks are running out of both food donations and money … just as needs for
food aid are skyrocketing.
Poultry Producer Scales Back: High Grain Costs (p. 12):
Pilgrim’s Pride, the world’s largest producer of
poultry, is scaling back U.S. production and processing operations, due to high
costs for feeding chickens.
Grain Costs Slaughtering U.S. Pork Producers (p. 12):
The squeeze between low pork prices and high grain
costs is driving many pork producers out of business as fast as they can go.
DFA & DMS Abusing Competing Marketers & Producers in
Northeast (p. 13):
With increased frequency, Dairy Farmers and its subsidiary –
Dairy Marketing Services – are shafting small marketing cooperatives and
producers.
More on Nora, Illinois “Mega-Dairy” Battle (p. 13):
Illinois ag dep’t officials send a long letter in
early April to A. J. Bos, demanding to know many more details about the proposed
“mega-dairy” for Nora, Illinois. Special focus is on the bedrock geology
underling the site of the proposed dairy, which could house as many as 20,000
milk cows and heifers.
Audits Needed: UpState-Niagara, DMS, MD/VA, Agri-Mark & CWT
(p. 13):
The Milkweed is putting out an alert to
subscribers to help us get possession of audits from several dairy cooperatives.
Dairy Cattle Replacement Prices at Auction Markets across
the USA (p. 14):
The glut of milk in California, coupled with high
feed costs, is causing demand for springing heifers and milk cows to back off in
most parts of the country. Meanwhile, prices for breeding age heifers and
younger, open heifers remain steady.
Monsanto Tries to Push NY & VT Ag Chiefs on rbGH Labeling
(p. 14):
Monsanto-friendlies are now leaning on the
agriculture commissioners of New York State and Vermont to clamp down on dairy
products’ “rbGH-Free” labeling claims.
DFA: Worthless Assets, Lying Leaders (p. 15):
Pete Hardin analyzes DFA’s financial and
leadership problems.
Tough Times Ahead for All Sectors of Dairy (p. 15):
Higher costs of all kinds, coupled with declining
ability to pay by consumers, presents the U.S. dairy industry with many
challenges to sustain both volumes and profits.
Disconnect: U.S. Milk Glut/Global Scarcity: Go Figure (p.
16):
There’s a certain irony to watching California
dairies dump milk and their marketers shipping milk/cream long distances out of
state … while New Zealand’s milk production is atrophying under the worst
drought in 100 years. Will U.S. dairy commodity prices ever catch up to world
prices? Stay tuned!
The Big Picture: U.S. Economy Very, Very Precarious (p. 1):
We try to summarize the mega-events that are weighing against
the U.S. economy … from energy costs to home foreclosures. The headline tells it
all.
February 2008 Class III Price $17.03 –February Class IV
$14.67 (p. 1):
Class III (cheese) and Class IV (butter-powder)
are declining – reflecting lower dairy commodity prices.
Dean Foods: Profits Down, Stock Values Nosedives (p. 2):
Fortunes at the nation’s largest fluid milk processor are
down. Profits for 2008 were down. Stock values have plunged into the very low
“$20s.”
Canada’s New Cheese Standards (p. 2):
Canada has new regulations defining cheese
standards, which has U.S. processors howlin’ mad. Why? Canadian standards don’t
allow elevated ratios of “whey proteins to casein” in finished products. That’s
one way to limit how much Milk Protein Concentrate (MPC) can be used in cheese
products.
Jan. Cheddar Price Zaps Mar. FMMO Class I Price $2.98/cwt.
(p. 2):
The price dip for Cheddar prices at CME in mid-
and late-January 2008 set off a big price decline for Class I (fluid) milk The
March 2008 Class I base price in federal milk orders will declines $2.98/cwt.
Ouch.
Fertilizer Costs Keep Climbing Higher & Higher (p. 3):
High grain commodity prices are spurring increased
global production. The weak U.S. dollar and strong demand for grain production
in 2008 are driving up fertilizer costs. U.S. reliance on a large amount of
imported fertilizer makes costs all the more expensive.
Alto Co-op Members Overwhelmingly OK Sale to Saputo (p. 3):
In late February, members of Alto Co-op (Waupun,
WI) voted almost unanimously to accept the purchase offer for their cooperative
from Saputo Cheese of Canada. Members got a $10,000 bonus and full pay-back of
their equities.
Saputo Denies Mob Link Stories (p. 3):
A flurry of recent news stories in Italy and Canada have
discussed alleged ties between Saputo Cheese and organized crime. Saputo
personnel vigorously deny the stories have any basis.
Octogenarian Michigander’s Cow-Colostrum Cancer Cure
Survives Trial (p. 4):
A jury in Marquette, Michigan found a local man
“not guilty” of all but one charge in a federal trial in late February. The man
was treating cancer patients with an unapproved practice: injecting a cancer
patient’s blood into the pregnant cow and then having the patient drink large
volumes of colostrum that contained anti-bodies.
Worst Drought in Century Cuts NZ Milk Flow (p. 4):
The worst drought in 100 years is seriously
constricting New Zealand’s milk flow late in the Kiwis’ milk production season.
Fonterra—New Zealand’s global dairy marketing agent—has oversold and is scouring
the globe to find additional dairy supplies.
Beef Processor’s New Math #3 + #4 + #5 = #1 (p. 4):
In a flash, the Brazilian meat powerhouse JBS SA
acquired two U.S. fluid processors – consolidating the third, fourth, and fifth
biggest beef packing businesses in the U.S. into a single entity, which is now
the largest U.S. beef processor. Will federal Antitrust enforcers take notice?
Don’t bet on it!
Biggest-Ever Beef Recall from Unscrupulous CA Meat Plant
(p. 4):
You’ve seen or heard about the pictures of abuse
of downer cows in the Chino, CA meat packing plant. Ugly.
Global Wheat Shortage Causes Price Spikes: Famine Looms (p.
5):
Writer Karen Kinstetter has meticulously studied
grain markets and details many of the factors driving up wheat prices around the
world. Excellent article.
Bakers Up in Arms over High Grain Prices (p. 5):
U.S. baking interests took their protest to
Washington, D.C. They’re crying the blues, as wheat prices skyrocket.
Feeding Corn-Ethanol Distillers Grains Spikes E. Coli
0157:H7 in Cattle (p. 6):
Writer Paris Reidhead details research showing big
increases in the presence of the powerful, dangerous E. Coli variant – 0157:H7 –
in the intestines of dairy and beef cattle fed distillers grains from processing
corn into ethanol.
Florida “Milk Wars” Subsiding??? (p. 6):
Looks like things have settled down in Florida’s
fluid milk supply war. Too much bleeding of finances occurred when an alternate
raw milk supplier took over supplying most of the milk to Dean Foods’ plants in
Florida from the local co-op.
Feature Story: Charts Detail Who’s Got Milk
Pricing Power (p. 7):
View the March feature story
here.
Clayton Yeutter: Sire & Architect for Decades of Failed
U.S. Farm and Trade Policies – from “Free Trade” to Biotechnology (pages 8-10):
Want to put an ugly face on decades of misbegotten
U.S. farm and trade policies? Then Clayton Yeutter’s your man. This guy has
served in posts such as USDA Secretary, U.S. “Special Trade Ambassador” and even
head of the Republican National Committee. In later years in the private sector,
Yeutter has championed the interests of New Zealand dairy farmers and food
biotechnology.
Nora, IL Update: State Attorney General’s Office Requests
Delay (p. 10):
No final word from northwestern Illinois in the
battle over siting a California investor’s mega-dairy. Illinois’ Attorney
General’s Office has weighed in, directing the state agriculture department to
be very cautious in reviewing the application.
Harkin Supports National Animal Identification System,
Plans Hearings (p. 11):
U.S. Senator Tom Harkin (D-IA), chair of the
Senate Agriculture Committee, has stated he wants to push mandatory livestock
identification. Chair of the House Agriculture Committee – Collin Peterson
(D-MN) – is making similar noises. Article submitted by Mary Zanoni, executive
director of “Farm for Live” – an organization based in Canton, New York that
opposes mandatory registration of livestock/poultry premises and creatures.
Canadian Court Rules Against Raw Milk Exports to U.S. (p.
11):
Finally, the Canadian court has ruled in a case
involving illegal shipments of farm milk from Ontario Province into New York
State. This issue ought to be a complete embarrassment to the New York State
Dep’t of Agriculture & Markets.
Purchased Feed Costs Punishing Organic Milk Producers (p.
12):
Away for the Upper Midwest, costs for purchased
organic dairy feed rations (16% protein) have topped the $600/ton mark. Major
buyers remain relatively insensitive to pleas for price help from organic dairy
farmers. The organic dairy dream is turning into a nightmare for many
family-based producers. Ironically, big “organic” mega-dairies owned by major
processors are both responsible for gobbling up grain supplies and holding down
prices.
Milk Haulers to Review Tank Washing at April 21-22 Meeting
in Arizona (p. 12):
The International Milk Haulers Assn. meets in
Mesa, AZ in late April. The contentious issue of tank washing is on the agenda.
Interested persons may find out more details at the organization’s web site at:
www.milkhauler.org/events.htm
Weekly Data on Cow Imports From Canada (p. 2):
We analyze weekly numbers for dairy cows entering
the U.S. from Canada. Most are going to farms in Michigan, Wisconsin, Ohio and
Indiana.
Still No Answers About Cow/Horse Safety Tests for GM
Alfalfa (p. 13):
Writer Paris Reidhead explores issues relating to
GM alfalfa – including the fact that he still can’t get a return phone call from
the developers of “Roundup Ready Alfalfa” about what, if any, safety tests were
ever conducted on cows and horses.
Dairy Cattle Replacement Prices at Auction Markets Across
the USA (p. 13):
Our monthly review of dairy animal prices shows
stronger prices in some markets. Interest in open heifers is picking up.
Questions for Maryland & Virginia Co-op Members to Ask (p.
13):
The upcoming annual meeting of Maryland & Virginia
Cooperative Milk Producers provides good time for concerned members to ask
questions about their co-ops management and finances.
Tighten Up (p. 11):
Editor Pete Hardin scorns wasteful practices and strategies
in dairy marketing/pricing. Hardin notes that it’s time to get back to basics,
and promote fluid milk for its nutritional value, emphasize in-home use of dairy
products, etc., etc. These times do not allow for such waste as goes on in dairy
promotion, pricing and marketing.
Cheese, Milk Powder & Whey Prices Decline: Butter Gains (p.
16):
Dairy commodity prices are falling, except for
butter. Business as usual in dairy markets. Global dairy prices are being
propelled by serious drought in New Zealand.
Up/Down, Up/Down: CME Cheddar Price Gyrations Mystify
Industry (p. 1):
The up-and-down price cycles of Cheddar prices at the Chicago
Mercantile Exchange cash markets defies a market-based explanation.
January 2008 Class III Price $19.32 – January Class IV
$16.29 (p. 1):
Class prices for the federal milk orders are down from the
previous month—reflecting lower dairy commodity prices surveyed by USDA’s NASS.
Pennsylvania Issues New Milk Labeling Regulations (p. 2):
After much controversy, Pennsylvania has issued “new” milk
labeling laws regarding “absence labeling” (i.e., “no this” or “no that”) for
dairy processors and marketers. The announcement cools down the blaze set when
state agriculture department secretary Dennis Wolff tried to bolster Monsanto’s
sagging fortunes in the “No rbGH/rbST” wars.”
Rumor Mill: Pending DFA “Reblend” in Northeast (p. 2):
Due to operating losses in the region, DFA will institute a
$.20 per cwt. charge against members’ milk checks to make up for losses.
Inefficient.
St. Albans Co-op Sets 20-Cent Reblend (p. 2):
Monkey see, monkey do. St. Albans Co-op—Vermont’s
largest dairy co-op—is instituting a $.20/cwt. charge to make up for losses. The
more St. Albans has “run with the big dogs,” the worse its financial performance
has become.
Alto to Become Alpo? Saputo Offers $160 Million Buyout Deal
(p. 3):
The big news in Wisconsin is the $160 million
buyout offer to Alto Co-op (Waupun, WI). The struggling dairy co-op members will
vote in late February as to whether to accept the deal. Details: Alto members
will get paid $10,000 bonus if the deal is passed, plus get paid off on 100% of
their equity! Alto producers who stay with Saputo can sign up for a two-year,
$.35/cwt. loyal premium. Sounds like a deal too good to be true.
Feature Stories of the Month: click
here
to view our two feature stories for February.
Nonfat Dry Milk
Déjà vu:
DairyAmerica to Underperform Again?
AFACT–”Grassroots” Group Bankrolled by Monsanto
Hispanic Dairy Products 101 (p. 5):
Hispanic consumers make up about 15% of the U.S.
population currently—headed for 20% by 2020. The Milkweed profiles the
demographics of Hispanics and their dairy product consumption patterns. Hispanic
foods and cuisine extend far beyond their population numbers.
Lender Liability: Complex, Important Legal Issue for
Agriculture (p. 6):
Attorney Susan LaCava (Madison, Wisconsin) writes
about the complex area of “lender liability” … with a special focus on
questionable farm lending practices. Interesting reading!
Nora, IL (pop. 200): “Ground Zero” for California
Zillionaire’s (?)?,???-Cow Mega-Dairy Plans (pages 7-10):
In this special four-page report, Editor Pete Hardin lays out
the battle at Nora, Illinois, where California dairy figure A. J. Bos is
proposing to drop what he wants to become a pair of mega-dairies totaling more
than 20,000 dairy animals. Neighbors opposing Bos’ plans are fighting back, and
have succeeded in gaining votes against the project from a key committee and,
very recently, the full Jo Daviess County board of supervisors. Final say in
siting of mega-farms in Illinois rests with the state department of agriculture.
Critics see severe “faults” in Bos’ mega-dairy plans, due to karst bedrock
(fractured dolomite limestone). In the grander scheme of things, what’s
happening: A. J. Bos’ move to Illinois represents an early wave of an exodus
from California dairying.
Fly Problems at Aurora Organic Dairy’s Gill, CO Dairy Irk
Neighbors (p. 11):
Aurora Organic Dairy’s farm at Gill, Colorado had
the neighbors hopping up and down made due to fly problems in 2007. Fly control
measures at the organic dairy failed … completely. Neighbors want to close down
the farm.
Aurora Organic Dairy: Vertically-Integrated Scam (p. 11):
Fly control is just one of the many questions
surrounding Aurora Organic Dairy. How can dairies with thousands of dairy
animals get the mandatory, 120-day access fresh pasture???
Aurora Organic Dairy Owner Buys Most Expensive Home in
Boulder, CO (p. 11):
Yuppies and their castles! Owner of Aurora Organic
Dairy—Marc Peperzak—has recently acquired the most expensive residence in
Boulder, Colorado. Peperzak paid about $1150 per square foot for his new condo.
Most of what You Want to Know About Bovine Manure (p. 12):
Paris Reidhead details a most important subject:
bovine manure.
Dairy Animal Prices Poised for More Gains (p. 13):
Lots of questions about what good dairy animals
are worth … and what they’ll be worth in the future. Pete Hardin surveys dairy
animal prices with some key considerations for owners who wish to maximize their
net worth over time.
CWT Announced Program to Kill Bred Dairy Heifers (p. 14):
The ignorance of National Milk Producers is truly
reflected in the most recent announcement from the “Cooperatives Working
Together” program: to subsidize KILLING bred dairy heifers. Pete Hardin scorns
the motives and mentality behind this idea.
Shut Up and Eat Your Wheatie (p. 15):
$15/bushel wheat? Pete Hardin details data on the
shortage of wheat-—both globally and in the U.S. If anything, the U.S.
government is being naïve in its handling of the wheat crisis. Hardin analyzes
how bad weather has badly damaged the winter wheat crop in the southern and
central Plains. The world is scrambling for wheat supplies, with U.S. exports
rising. It’s likely that the U.S. will run out of wheat before the new crop is
in—unprecedented!
CME Cheddar Prices Vary; Butter and Powder Prices Decline
(p. 16):
Our monthly review of U.S. dairy marketing trends
… with big question marks hanging over the irrational ups and downs of cash
Cheddar markets at the Chicago Mercantile Exchange.
Dairy’s “New Era:” Higher Prices, Costs; Greater Risks and
Opportunities (p. 1):
The world of dairy we knew has changed dramatically. Higher
grain and energy costs are causing a recalculation of just about every imagined
“efficiency” in the modern U.S. dairy farm community. Pete Hardin discusses
these topics in a wide-ranging thought-piece on dairy’s new realities.
December 2007 Class III Price $20.60—December Class IV
$19.18 (p. 1):
Take a good look. It’ll be at least a few months before we
see “$20-something” FMMOs class prices for manufactured dairy products.
USDA January 11 Grain Reports Jolt Agriculture (p. 2):
A set of grain reports and projections were issued by USDA on
January 11—and the near-immediate response was to propel most 2008 corn future
above $5 per bushel, while soybeans nearly hit $13 per bushel. Global grain
shortages, and a weak U.S. dollar, are driving grain prices sky-high.
NYS “Canada Milk Imports” File: 300 Pages Missing (p. 2):
NYS Department of Agriculture & Markets officials decided to
withhold more than 300 pages of documents about the Canadian milk import scandal
from an open records request by writer John Bunting. What’s so secret that a
reporter can’t see it??? Does Gov. Eliot Spitzer have another scandal brewing?
We’ll dig further.
Feature Story #1: Wheat Shortages Loom for U.S. and World (p. 2)
Feature Story #2: Russian Buyers Likely in U.S. Dairy Heifer Market by Mid-2008 (p. 3)
Rumor mill: Dean Foods Puts on Lipstick for Pepsi (p. 3):
A number of new executives hired at Dean Foods seem to have a
common tie: backgrounds with PepsiCo. Is the financially-troubled Dean Foods
trying to sell the cow before it dies?
Closer Look at Cheddar Prices & Markets (p. 4):
John Bunting takes a hard look at a lot of data on U.S.
Cheddar production, pricing and market trends. Conclusion: Something’s terribly
wrong with Cheddar pricing—and that impacts virtually all dairy pricing.
U.S. Milk Powder Problems: Exports Down, Production Up (p.
5):
Milk powder prices are falling in the U.S. and western
Europe. Pete Hardin explores the complex relationship between Fonterra (NZ) and
DairyAmerica (the U.S. milk powder pricing cartel). Conclusion: Fonterra has
repeatedly failed to foresee coming waves on behalf of its efforts to sell
DairyAmerica’s milk powder exports.
Milk-Feed Price Ratio: History No Clue to Future (p. 6):
The sudden upsurge of grain costs, and short-term declines in
milk prices, promise to squeeze dairy producers buying grain and hay. Tough
times ahead staying ahead of grain costs. Writer John Bunting projects that,
using March 2008 CBOT grain futures for corn and soybeans (as of January 11,
2008), dairy farmers would need a milk price of $34.55/cwt. to maintain a 3:1
milk price feed ratio.
History of “rbGH-Free” Dairy Product Labeling Battles (p.
7):
Editor Pete Hardin has been beating up Monsanto and Posilac
(rbGH) in print for more than 20 years. Hardin reflects on the long history of
legal battles involving Monsanto’s direct and indirect attempts to deny
concerned consumers’ right to know whether their milk and dairy products come
from cows injected with Monsanto’s controversial biotech hormone.
“Dumb Luck” Drywall Recycling: Many Advantages for Dairy
Farmers (p. 8-11):
Jim Kramer of Brooklyn, Wisconsin has a unique
business—recycling scraps of drywall into a lime-like powder that has many
benefits to agriculture. The gypsum powder chemically reacts with ammonia
produced from livestock wastes to: reduce odors, improve health of baby animals
(like calves and swine), reduce fly populations, and other benefits. AMAZING
STORY!
What’s Driving Budget-Budget Organic Grain Prices (p. 11):
Writer Paris Reidhead has spent a lot of time interviewing
sources in the organic grain trade to find out why prices are so high. Organic
dairy farmers who are buying grain are finding it very difficult to cash-flow
positively.
Analysis: Inside Organic Grain Trends (p. 11):
We welcome Kewaunee, Wisconsin dairy farmer and organic
certifier Karen Kinstetter as a contributor! From her inside perspective, Karen
details the almost impossible shortage of organic feed in the U.S.
U.N. World Food Outlook Troubling (p. 12):
The United Nations’ Food and Agriculture Organization takes a
critical look at global grain supplies. Wheat and corn supplies are very scarce.
Mostly Quiet on rbGH Front (p. 12):
Mercifully, the past month has seen few changes in the status
of Monsanto-inspired efforts to get individual states to block “rbGH-Free”
labeling claims by dairy processors and retailers.
USDA Wants Mandatory Animal ID System for Nearly All Dairy
Farms (p. 13):
We welcome another new contributor—Mary Zanoni of Canton, New
York. Mary heads a group, “Farm for Life,” which opposes federal and state
efforts impose mandatory premises and animal identification systems. Get this:
Mary reports in this issue that at least U.S.-based dairy breed associations and
many DHIA (herd testing) organizations plan to impose mandatory premises ID
registration requirements on their members in 2008!
Beware of Class I Impact When Cutting Whey Values (p. 14):
Pete Hardin warns changing whey formulae in state and federal
milk pricing systems will cut Class I (fluid) milk prices—which is a bad idea.
Dairy Cattle Replacement Prices at Auction Markets Across
the USA (p. 14):
Our latest survey of dairy cattle prices from more than a
dozen markets around the country. Some sales are strong, but buyers are getting
nervous about trends in both milk and purchased feed prices.
“Can’t Do” Acting USDA Chief “Feels Sorry For” Livestock
Producers (p. 15):
Pete Hardin blasts acting USDA Secretary Chuck Conner for
comments that official made on an early Saturday morning farm radio program, in
which Conner said he “felt sorry for” livestock producers (due to the upwards
explosion of grain prices). Hardin notes that Conner has the legal directive to
raise farm milk prices, if milk supplies are threatened by high grain costs paid
by dairy farmers. NEVER has USDA imposed such powers. Section 608c (18) of
USDA’s laws give the Secretary that power. Hardin reprints that law on his page.
CME Cheddar Price Antics Not Rational (p. 16):
The ups and downs of Cheddar prices at the CME are not based
on honest market trends. Here in early 2008, prices for both Cheddar and nonfat
dry milk are declining, as domestic milk volume is up and demand is worrisome,
due to the nation’s economic problems.
Cheese Market Remains Tight, Despite CME Price Ups & Downs
(p. 1):
Block Cheddar prices at the Chicago Mercantile
Exchange remain near all-time peak prices, despite a one-day decline (Nov. 29)
of 19.25 cents/lb. U.S. Cheddar output off significantly since April. Domestic
and export demand strong.
November 2007 Class III Price $19.22 – November Class IV
Price $20.40 (p. 1):
Prices for dairy commodities (except butter) are
driving strong producer prices in USDA’s federal milk order system.
Dean Foods Again Procuring Own Independent Producers (p.
2):
In parts of the Southeast and Northeast, Dean
Foods is back in the country directly procuring milk from independent producers.
What’s up with DFA’s “exclusive” raw milk sales deal to Dean Foods?
Whey Less: CDFA Cuts Producers’ Cheese Milk Price (p. 2):
OUCH! The California Department of Food and
Agriculture has announced a new pricing system that will reduce prices paid
producers for Class 4b (cheese) milk by between $1.50 and $2.00/cwt. Processors
have whined loudly about whey prices being too high.
PA Governor Says “WHOA!” to Milk Labeling Restrictions (p.
3):
Deluged by angry calls, e-mails, letters and faxes
from consumers, Pennsylvania governor Ed Rendell has at least temporarily halted
the state’s agriculture department from implementing a ban on “absence labeling”
of dairy products. Is Pennsylvania “Posilac’s Last Stand?”
Kraft Will market Some “rbGH-Free” Cheese Products (p. 3):
Kraft Foods will start selling 2% natural and
“Singles” made from “rbGH-Free” milk soon. As goes Kraft …
WI Ag Dep’t Sneaking Through Raw Milk Farm-Share Ban? (p.
4):
Opinion diverge, but many fear that Wisconsin’s
agriculture department is using a massive revision of state dairy sanitary codes
to effectively halt raw milk sales in the state.
CA Using Coliform Test to Kill Raw Milk Sales (p. 4):
Without notice to the raw milk community
(producers and consumers), California’s legislature approved bills that now
mandate coliform tests which will make it impossible to sell raw milk in the
state.
California Water Supplies & Politics Critical for Ag (p.
5):
Water issues are very critical in California, and
other western states. Good question: how long can low-end use of water to grow
alfalfa for dairy cows compete with higher-end industrial and human needs?
Don’t Expect 2007 U.S. Farm Law in 2007 (p. 5):
The headline says it all.
$6.50/Vial: HeiferPlus Dramatically Boosts Heifer Calf
Numbers (p. 6):
Writer Paris Reidhead details how an inexpensive,
new product—HeiferPlus—helps change the normal yields of heifer calves up to
nearly 80%. This product could revolutionize the U.S. dairy industry!
NYS Ag Commissioner Goes Bonkers over Canadian Imports (p.
7):
NYS Agriculture Commissioner Patrick Hooker has
weirded out over the story last month in The Milkweed. Hooker claims to be
fighting against illegal Canadian raw milk imports, when in fact his department
let them in!
NYS Ag Dep’t Broke Own Rules (p. 7):
Last May 23, 2007, the NYS agriculture department
allowed Canadian milk to keep flowing into the U.S., despite a final ruling by
the Canadian Supreme Court that cross-border milk flow was illegal. The Milkweed
explains how at least for one week, NYS’ ag department violated its own rules by
allowing milk imports before state inspectors could complete necessary
inspections.
Bad Idea: U.S./India “Free-Trade” Deal Proposed (p. 8):
At a speech in India, California Congressman David
Dreier stated he’ll introduce a bill calling for “Free-Trade” negotiations
between the U.S. and India to be started. From a livestock disease standpoint,
The Milkweed explains how such an idea would be very bad. India is a hotbed of
“Foot and Mouth Disease” outbreaks. FMD disease may survive several weeks in
processed food products—plenty of time to travel by ship from India to the U.S.
176 In Congress Belong to Caucus on India (p. 8):
A not-so-grand total of 176 members of the U.S.
House of Representatives belong to the “Caucus on India and Indian Americans”—a
likely incubator for a U.S./India “Free-Trade” deal. The Milkweed lists some of
the Congress persons who should know better!
USDA FINALLY Answers Senators’ Letters Re: Milk Powder
Pricing (p. 9):
At long last, USDA has finally replied to two letters,
written months ago, by groups of U.S. Senators demanding answers about nonfat
dry milk powder reporting and pricing problems. No, the letter didn’t really
answer many hard questions.
Monsanto P.R. Firm Hosts “Rural Americans for Hillary”
Event (p. 9):
This past fall, a Monsanto-linked public relations
firm—Troutman Sanders Public Affairs Group—hosted a fund-raiser in Washington,
D.C. for the “grassroots-sounding” political group: “Rural Americans for
Hillary.” It’s the silly season.
U.S. Dairy Livestock Price Report (p. 10):
Prices steady for springers and open heifers in many parts of
the U.S. Watch hay and feed supplies carefully. Hay is tight and limits buyers’
interest in young dairy animals.
What’s Going to Happen with Milk Prices??? (p. 1):
Pete Hardin offers his projections on farm milk prices
through the first half of 2008, along with the factors that will drive them. In
quick summary, he projects 4th quarter 2007 prices will be $1.00-1.50 lower than
2007’s third quarter. For January-March 2008, Hardin estimates farm milk prices
will drop another $1.25-1.75/cwt. below 2007’s fourth quarter. And for 2008’s
second quarter, Hardin bets that milk prices will rise to at least something
close to the 4th quarter of 2007.
Big Algerian Milk Powder Deal Fizzles/U.S. Prices Decline
(p. 1):
Around November 1, it became clear that U.S. nonfat dry milk
would not supply a big (25,000 metric ton) purchase offer from Algeria. Instead,
U.S. powder will comprise only about 10-15% of that deal. Sources say that
Fonterra (the New Zealand group that has exclusive contract to export U.S. milk
powder) misgauged world markets and missed the sale. As a consequence of failure
to seal the Algerian deal, milk powder prices at CME and DairyAmerica’s spot
price immediately dropped.
October 2007 Class III Price $18.70 – October Class IV
$21.31 (p. 1):
USDA’s announced Class III (cheese) and Class IV
(butter-powder) milk prices for October 2007. Class III represents a decline of
$1.37 from the September 2007 price. Class III remains strong for this month.
Some California Milk Buyers to Limit Producers’ Daily
Volumes (p. 2):
California is brimming over with farm milk. Finally, some
buyers are taking steps to limit how much milk producers can expect the
marketers to handle at market prices.
Australian Drought Continues, Oceania Dairy Supplies
Tighten (p. 2):
Milk production in Australia is hammered by prolonged, severe
drought. Meanwhile, New Zealand’s farm milk output is not able to allow
marketers to fulfill contracted sales of manufactured dairy products.
Protein Shortage: Massive Soy Imports Entering the U.S. (p.
2):
Gov’t data bear out this nation’s protein shortage: exports
of soy products for the first eight months of 2007 equal less than one-tenth of
soybean imports entering the U.S. Most soybean imports have come from
Canada—where the currency appreciation (vs. the U.S. dollar) means further
imports from that source will be costly.
Dairy Promotion Questions Unanswered in Farm Bill Fracas
(p. 3):
As the politicians fight over the 2007 farm bill,
questions about dairy promotion programs have become verboten subjects for many
of the big wigs. Despite reauthorization of the National Dairy Board for another
five years, House and Senate ag leaders don’t want to hear questions about
accountability and effectiveness.
The Russians Are Coming … and They Want Heifers (p. 3):
Russia, which is brimming over with surplus funds from energy
sales, wants to modernize and grow its food system—with a big emphasis on dairy.
Russians are looking for up to half a million dairy heifers—they’re buying
heavily in Europe and Canada. Will Russian demand boost prices for U.S. heifers,
either directly … or through cross-border deals with Canadians?
Agriculture to Shift from Arid West; Midwest Farmland
Values to Soar? (p. 4):
Severe drought, which threatens to become prolonged, will
force a dramatic shift of food production from arid western deserts back to the
Upper Midwest—where the moisture usually is available free. Energy and drought
threaten to change the face of American agriculture faster than anyone can
imagine.
Details of Cornell University’s rbGH Test Scarce to Come By
(p. 5):
In the early 1990s, USDA hired Cornell University to develop
a test for rbGH residues in cow’s milk. In 1997, the U.S. Patent Office granted
a patent for the test. But details are hard to track down, as writer Paris
Reidhead determines. Reidhead also reports that a test to determine of milk has
been produced from cows receiving injections of Posilac (Monsanto’s diabolical
cow growth hormone) will be announced in Spring 2008.
Ohio Holds Hurry-Up rbGH-Labeling Meeting (p. 5):
Following Pennsylvania’s lead, the Ohio Department
of Agriculture held a public meeting about issues concerning labeling of
consumer dairy products made from milk from herds that do not inject their cows
with Posilac. It’s doubtful that Ohio will mimic PA’s ban.
“Quickie” NY Inspections Save Canadian
Farms’ U.S. Milk Markets (p. 6):
This shocking expose by John Bunting is our “Story
of the Month.” Read all about it here.
PA Bans “rbGH-Free” Dairy Product Labeling, Effective 1/08
(p. 7):
In late October, under flimsy reasons,
Pennsylvania’s Secretary of Agriculture, Dennis Wolff, banned dairy processors
from labeling their consumer products in any fashion that states the contents
came from dairy herds where the cows have not been injected with Monsanto’s
Posilac. Dairy processor and consumer groups are plotting legal challenges.
Organic Foods are Found to be More Nutritious (p. 8):
A study from England found that organic foods are
far more nutritious than their non-organic counterparts.
Dairy Today/Monsanto Cancel All “Forums” for Nov. 5-9 (p.
8):
Strange. With only a couple days’ notice, Dairy
Today (a dairy farmers’ publication) and Monsanto cancelled about ten meetings
for dairy producers for the week of November 5-9. The meetings were to have been
held in an area stretching from western New York and Pennsylvania to Indiana.
Russian Buyers Reject U.S. Butter Due to Lactic Acid (p.
8):
Several hundred metric tons of U.S. butter in
Russian warehouses are being refused because they were manufactured using lactic
acid (a preservative). It’s been a long time since the Russkies could afford to
turn up their noses as perfectly good food!
Cornucopia to USDA: Make Aurora Pay $.15/cwt. Promotion Fee
(p. 9):
The organic industry’s watchdog—the Cornucopia
Institute—has complained to USDA’s Agricultural Marketing Service that Aurora
Organic Dairy of Platteville, Colorado should be retroactively forced to pay the
$.15/cwt. fee assessed for dairy promotion. In 2005, USDA exempted organic
dairies from paying the promotion assessment. But Aurora’s recent problems with
complying with organic rules raise questions about whether the company could
validly have been exempted from these payments.
Organic Foods Groups and Consumers File Suits Alleging
Aurora Organic Dairy Committed Fraud (p. 9):
Food groups and consumers have filed lawsuits
against Aurora Organic Dairy, alleging that firm fraudulent labeled dairy
products as “Organic” when, in fact, USDA recently determined that more than a
dozen, long-term, “willful” violations of organic rules had been committed by
Aurora.
Dairy Cattle Replacement Prices (p. 10):
Our monthly profile of national dairy livestock prices shows
prices steady. Top end springers are hot. In the Southeast, producers are
selling off young heifers to get money to buy hay for milk cows.
Canadian Border to Open November 19 – Don’t Worry (p. 10):
On November 19, the Canadian border will reopen for transfer
of dairy animals from Canada to the U.S. Some in dairy have posited this event
as the worst thing since Bruce L. Osis, but The Milkweed puts an opposite spin
on this event. For starters, the value of the Canadian dollar will make
importing dairy heifers very expensive.
Milk from rbGH-Injected Cows IS Different (p. 11):
Pete Hardin explains, citing various studies, four
ways in which milk from rbGH-treated cows is different from “normal” cows’ milk.
So much for the “no difference” and “the same” claims by Monsanto and its
allies.
Cheddar Prices Post Gains at CME, But Milk Powder Prices
Decline (p. 12):
Cheddar prices at the Chicago Mercantile Exchange
have risen about 15 cents per pound in the past few weeks—up to the $2 per pound
level. Butter prices are showing some life recently—up to $1.39 per pound range.
And milk powder prices are falling—due to a failure to gain more volume from a
big Algerian sales contract.
Could Senate Meltdown Leave House Plan as Only Farm Bill
Option? (p. 1):
The Senate agriculture committee is paralyzed by staff
in-fighting. Majority leader Harry Reid (D-NV) has warned ag committee chairman
Tom Harkin (D-IA) that unless Harkin gets the job done by the end of October,
Reid will take the horrid House bill to final mark-up. The Milkweed reviews the
key dairy portions of the House ag bill and finds them lacking.
Senate Ag Committee Staff Chaos Imperils Farm Bill Process
(p. 1):
Failure to move ahead on farm bill considerations is placed
squarely on the shoulders of Senate ag committee chief of staff Mark Halverson …
and his political patron, Iowa Senator Tom Harkin. “Total chaos” is how Capitol
Hill insiders describe events within the Senate ag committee.
September 2007 Class III $20.07 – September Class IV $21.61
(p. 1):
Class III and Class IV prices stay above the $20/cwt. mark
for September, although it looks like Class III (cheese) milk prices will fall
below the $20 level in October.
Crops: Plenty of Corn, But Soybeans & Forages Look Very
Tight (p. 2):
A big U.S. corn crop, in tandem with a sharp decline in the
fortunes of the ethanol sector, mean that in corn country, there will perhaps be
more corn by late fall than anyone knows what to do with. USDA estimates a 13.3
billion bushel crop. But soybeans are a completely different story. Soybeans are
estimated at only 2.6 billion bushels—down 19% from 2006’s crop. And The
Milkweed’s analysis on soybeans is that USDA’s October 12 crop estimate was
overtly optimistic on yields. Coupled with tight forage supplies, dairy farmers’
costs of purchased proteins in the upcoming year will be very, very expensive.
On the Organic Dairy Front … (p. 2):
We review three key areas of interest to organic dairy
farmers—1) sky-high grain costs, 2) buyers pounding organic milk prices, and 3)
Aurora Organic Dairies’ threats against activist groups that continue to hound
that Colorado mega-dairy over massive violations of the USDA’s organic rules.
CWT – Here They Go Again with Phony Numbers (p. 3):
Writer John Bunting takes apart recent claims by the
“Cooperatives Working Together” program that CWT has added $.75/cwt. to U.S.
producers’ milk prices so far in 2007. The various numbers for dairy exports
claimed by CWT don’t add up—either by CWT’s prior claims or by its academic
hireling Scott Brown. CWT is a cash-flow scam.
More Raw Milk Marketers Going “rbGH-free” (p. 3):
Prairie Farms … the Central Milk Producers Cooperative … some
DFA regions … (and soon) Smith’s Dairy—all are new entrants, or are planning to
join soon, the “rbGH-free” milk bandwagon. Couple other items: Cheese and yogurt
marketers are now under growing “rbGH-free” pressure. And we must wonder, how
much longer can Monsanto profitably keep marketing Posilac?
Dean Foods Drops Earnings Forecasts, Blames High Milk Costs
(p. 4):
Blaming high milk costs as a convenient excuse, Dean Foods
has dramatically scaled back its earnings estimates for the second half of 2007.
The real problem: too much debt. Debt repayment and interest costs dramatically
exceed Dean Foods’ historic (2004-2006) quarterly profits. Wall Street is not
being kind to Dean Foods’ stock value.
Next Dairy Pricing Scandal: Butter (p. 4):
Right now, cash prices for Grade AA butter at the Chicago
Mercantile Exchange are $1.28 per pound. That’s less than half of the price for
Western Europe reported by USDA’s Dairy Market News. As best we can, The
Milkweed is putting together all the pieces in butter, including: U.S. prices
half of global prices, reports that foreign interests own much butter and
anhydrous listed as “inventories” by USDA’s monthly “Cold Storage” data, butter
and anhydrous milkfat exports listed by the CWT scam (that don’t show up on U.S.
gov’t export data), and insiders telling us that foreign interests are waiting
until January 2008 export subsidy declines to move huge quantities out of this
country. Once again, the U.S. dairy farmers see low commodity prices while
global markets are sky-high. This situation is shaping up just like the “milk
powder pricing scandal” of the past year!
Look Out! DFA Launches “Cost-Cutting” Efforts (p. 5):
Dairy Farmers of America is under financial pressure to
dramatically cut costs. Nothing like a big co-op meeting in Kansas City for Rick
(alias, “Tricky Rick”) Smith to tell the co-op’s big-wigs that news. What’s
wrong??? The new era of caution by financial lenders raises some serious
questions about DFA’s assets, debts, and certain red-ink operations. Of course,
the easiest way for DFA to “cut costs” is simply to pay producers less for their
milk.
DFA Lawyers Goof Up Internal Property Transfer in Louisiana
(p. 5):
How many errors can DFA’s in-house counsel David Geisler make
on a seemingly simple, in-house transfer of real estate properties in Washington
Parish, Louisiana? Let’s see: 1) No complete statement of remuneration, 2) No
witnesses names on the title transfer documents, and 3) DFA isn’t even listed as
the owner of some of the property transferred!
Dairy Farmers Should See Red: U.S Commodity
Prices Way Below World Levels (p. 6-7):
This story is our “Story of the
Month.”
U.S. Powers that “Bee” Continue Ignoring EU GM Research (p.
8):
Paris Reidhead revisits the subject of bee “Colony Collapse
Disorder,” reviewing what U.S. scientists believe may be responsible for the
scary disappearance of many bee colonies. But virtually ZERO scientists in the
U.S. are looking at the possibility that bee deaths may be linked to
genetically-modified (GM) crops. In Europe, governments have destroyed tens of
thousands of acres of GM canola, due to research linking bee deaths to GM
pollen. See no evil.
Dairy Cattle Replacement Prices at Auction Markets Across
the USA (p. 10):
Our markets survey finds that prices for Holstein springers
are increasing in some markets, and declining in others. Breeding-age, open
heifer prices remain strong.
No Word from USDA to Senators on Milk Powder Pricing
Scandal (p. 10):
USDA has still given no formal answer to two letters (written
in May and August 2007) by a group of U.S. Senators who asked tough questions
about the milk powder pricing scandal of the past year. A cover-up???
Judge OKs Antitrust Lawsuits to Proceed vs. DFA & Dean
Foods (p. 10):
The private antitrust lawsuit against Dairy Farmers of
America and Dean Foods has progressed to the “discovery” phase. Lawyers for
plaintiffs, who allege that DFA, Dean Foods (and other cooperatives and
individuals), conspired to deny access to fluid milk markets in the Southeast.
This one is a GO!!!
Better Ideas for the 2007 Farm Law (p. 11):
Pete Hardin details some items that ought to be in the 2007
federal Farm Law, to help create a more equitable and modern dairy industry. Not
all of these suggestions will be welcomed by the “big boys.”
U.S. Dairy Commodity Prices All Below World Market Levels
(p. 12):
Pete Hardin discusses a variety of factors in the dairy
market place and projects that, after a downturn in farm milk prices in 2007’s
fourth quarter (compared to quarter three), a combination of tight purchased
protein supplies and (sometime in 2008) demise of Monsanto’s Posilac will create
tighter U.S. milk supplies and even higher prices for U.S. dairy farmers. Beware
when U.S. prices approach global levels!
Feature Story: rbGH & Human Safety Special Section
Complex, Unknown Factors Delay Honest Dairy Forecasts (p.
1):
Intense interest in dairy focuses on questions concerning
“what’s ahead” for U.S. production and prices. The Milkweed takes the position
that there are too many uncertainties right now to make an intellectually honest
call. Shortages of hay and uncertainty about the quality/volume of 2007 crops
(especially soybeans) have us waiting until the grain combines mostly park for
the winter, before we’ll have a good grip on dairy forecasts.
August 2007 Class III Price $19.83 – August Class IV $21.87
(p. 1):
Lower whey prices helped drive down Class III (cheese) milk
prices for August 2007.
FDA: Top Priority for Changing Yogurt Standards (p. 2):
The Food and Drug Administration has listed as a top priority
completing the petition submitted by the National Yogurt Association (NYA) for
changes in standards for dairy products allowed in the manufacture of yogurt.
NYA wants to use any “milk derived ingredients” in the manufacture of yogurt.
Yuk!
New York Times Reports: “World Shortage of Milk” (p. 2):
Must be true, when the daily press reports that global milk
supplies are very, very tight!
Wall Street Analyists Hammer Dean Foods’ Stock Ratings (p.
2):
The tide is going out on Dean Foods’ stock values. Stock
prices are dropping seriously. Wall Street watchers are turning negative in
their ratings for Dean Foods’ future prospects.
Fraud: 99% of CWT’s 2007 Anhydrous Exports Fictitious (p.
3):
A highly-placed source in the CWT program has revealed that
only a tiny fraction of the anhydrous milk fat exports claimed to have been
subsidized by the “Cooperatives Working Together” program in 2007 have actually
occurred.
CWT’s 2006 Anhydrous Exports Not Substantiated (p. 3):
Same story for 2006—exports of anhydrous milk fat claimed by
CWT are far lower than total export data for that category reported by the U.S.
International Trade Commission.
SMI to Retain $.50/cwt. from Milk Checks, Will Restructure
Fluid Plants (p. 4):
Southeast Milk, Inc. (SMI) has announced it will retain
50-cents per hundred from members’ milk checks for July 2007 through June 2008,
in order to bolster the co-op’s financial reserves. SMI—Florida’s major
co-op—has been pounded by loss of in-state outlets for its raw milk by a
competing milk co-op that’s bringing in farm milk from as far away as New
Mexico.
If “Posilac” Goes Adios, 5-6% Decline in U.S. Milk Volume
Projected (p. 4):
The Milkweed details how the disappearance of Monsanto’s synthetic,
milk-stimulating cow hormone (trademarked and sold as “Posilac) would cause a
five to six percent decline in the nation’s milk supply, on a short-term basis.
USDA Slaps Aurora Organic Dairy for Multiple Violations (p.
5):
A settlement between USDA and Aurora Organic Dairy
(Platteville, CO) has resulted in penalties and cutbacks of production,
resulting from more than a dozen documented violations by Aurora of USDA’s
organic rules. But gutlessly, USDA didn’t put Aurora out of business!
USDA Creates GMO Alfalfa Stand Hot-line (p. 5):
In compliance with a judge’s ruling earlier in 2007, USDA has
created a phone “hot-line” and Web site for concerned persons to check on
whether there are stands of Monsanto’s “Roundup Ready” alfalfa planted near
them.
Monsanto’s Latest Dairy Technology: Sexed Semen—Dollars, If
Not Sense (p. 6-7):
To try to reverse shortages of U.S. dairy heifers, USDA
helped develop, and Monsanto is marketing, so-called “sexed semen”—which promise
about 85% heifers. Atop concerns about further narrowing of dairy cattle’s
genetic base, lower rates of conception and higher costs for “sexed semen” don’t
always add up, compared to normal AI.
RFID Chips Caused Malignant Tumors in Lab Rodents (p. 7):
OMIGOSH!!! Tests conducted as far back as ten years ago
showed that laboratory animals implanted with “radio frequency identification” (RFID)
chips caused cancer tumors. Government agencies ignored these warnings, and are
pushing ahead with programs to mandating RFID chips be placed in U.S. food
animals.
U.S. Whey Prices Dropping Significantly Below Global Prices
(p. 8):
Whey prices are sliding in the U.S., down into the “50s”
(cents per pound), even though global whey prices are in the “high 60s). Looks
like certain parties are trying to knock down their cheese milk costs by
attacking the whey complex price structure.
“Grassroots” Dairy Group Promoting BAD Idea: Mandatory “Son
of CWT” (p. 8):
A so-called “grassroots” dairy group based in Vermont—Dairy
Farmers Working Together”—is running around the country babbling about a dairy
policy idea that would create a $.15/cwt. deduction from dairy farmers’ milk
checks to subsidize dairy exports and kill cows—a clone of National Milk’s
(worthless as tits on a boar) “Cooperatives Working Together” program. BAD IDEA.
F&A Dairy of California, Inc. Bounces Checks to Milk
Suppliers (p. 9):
In late August, about half the checks issued to raw milk
suppliers by F&a Dairy of California, Inc. started bouncing. Will producers be
fully repaid? Will F & A be forced into bankruptcy? The plant takes in 40
trailers of milk per day—critical volume in California’s stretched-to-the-seams
milk plant picture.
California Whey Hearing Set for October 10 (p. 9):
On October 10, the California Department of Food and
Agriculture will hold a hearing on a proposal by F&A Dairy of California (see
above) to eliminate the whey price factor from Class 4-b (cheese) milk pricing.
Worry is, that if CDFA gives the cheese plants this request, that the USDA
federal milk order program will follow. Whey pricing IS a problem for cheese
plants.
National Dairy Livestock Price Report (p. 10):
We find overall price stability for dairy livestock around
the country. Some markets up, some markets down. Some holding. Where markets are
stronger, local crops are better.
R-CALF Member Reports “Cattle ID” Woes in Australia (p.
10):
Proponents of mandatory animal ID in the U.S. point to
Australia’s similar program, that’s been in effect for three years. But
“success” is not what a visited from the upstart cattle producers group—R-CALF
USA—reports from a recent visit.
“No Test” Impairs “rbGH-Free” Integrity (p. 11):
Yes, the skunks (Monsanto and friends) are on the run, but
the lack of an actual residue assay test to detect whether milk has been
produced from herds where rbGH is injected into cows looms as a critical
problem. Inability to PROVE that milk is truly “rbGH-Free” could haunt dairy’s
image with concerned consumers.
Cheese Prices Strengthen, Then Fall; NFDM Flat; Butter and
Whey Drop (p. 12):
Our dairy commodity market review finds Cheddar prices at CME
dropping a total of 16 cents per pound in the last two days before we went to
press. CME prices for Cheddar, Grade AA butter and nonfat dry milk are all
significantly below world-market prices.
Feature Story: Sky-High Global Prices = Future U.S. Prices, IF … (p. 1)
U.S. Hay/Forage Supplies Dangerously Tight, Prices Climbing
(p. 2):
In many parts of this country, 2007’s harvests of hay and
forage have been very disappointing. We’re setting up to see availability of
forage as a critical limiting factor for milk production in the coming year.
Has DFA Engaged in “Phantom” Exports of Anhydrous Milkfat?
(p. 3):
For the first five months of 2007, National Milk Producers
Federation’s “Cooperatives Working Together” program claims to have subsidized
exports of 1995 metric tons of “anhydrous milkfat” (99% pure butter oil) through
Dairy Farmers of America. But data from the U.S. International Trade Commission
for January-May 2007 shows exports of that category (under World Trade
Organization classifications) of only 145 metric tons—less than 10% of NMPF’s
alleged exports. A USITC official told The Milkweed that it would be “virtually
impossible” for so great an amount of exports to leave the country without
showing up on his agency’s records. Where’s the moo-la???
July 2007 Sets New Records: Class III – $21.38, Class IV -
$21.64 (p. 3):
The numbers tell it all.
NASS Finally Issues Mandatory Dairy Commodity Auditing
Rules (p. 4):
Only seven years after originally by Congress to do so,
USDA’s National Agricultural Statistics Service has proposed interim rules for
oversight on weekly dairy commodity prices reported to the government.
Details Scarce: NMPF Gets USDA Contract to Promote NAIS (p.
4):
USDA has handed out a contract National Milk Producers
Federation to “facilitate the registration of dairy farm, dairy calf and heifer
grower premises as part of the National Animal Identification System.” It’s all
about money!
Barley: New Look at an Old Grain (p. 5):
Writer Paris Reidhead takes a long look at one of mankind’s
oldest grains—barley—in a new light.
Former Auditor’s Lawsuits Beg Integrity of USDA’s Milk
Order Program (p. 6):
A former auditor for USDA’s Appalachian milk order (Order #5)
has filed suits in federal court, claiming, among other things, that high-level
USDA personnel have both rules of the federal milk order, as well as failed to
enforce Grade A sanitary standards on dairy plants in their federal order. The
lawsuit charges that USDA personnel overlooked maggots (fly larvae) in Grade A
milk processed at the Valley Milk, LLC plant in Strasburg, VA.
Milk Powder Price Scandal: U.S. Senators Demand Answers (p.
7):
On August 1, nine U.S. senators wrote a strong letter to
USDA’s secretary, Mike Johanns, and USDA Inspector General Phyllis Fong. These
senators wanted better answers from USDA about the conclusions regarding the
“milk powder pricing scandal” that USDA investigated earlier this year. The
senators’ letter noted USDA’s failure to even answer an earlier letter, dated
May 9, 2007.
Wall Street Pounds Dean Foods’ Stock Value (p. 7):
Wall Street is taking a dim view of Dean Foods’ stock values,
these days. Company CEO Gregg Engles is crying about a “perfect storm” of events
hurting the company’s profitability. This is the same character who, last
spring, put $39 million of company stock bonuses in his own pockets. That
bonus—paid out at the rate of $15/share—was done on $1.94 billion of borrowed
money!
CDFA Sets August 28 Hearing on Controversial Milk Powder
Pricing (p. 8):
The red-hot issue of how the California Department of Food
and Agriculture sets prices for Class 4a milk (butter-powder) will be aired out
on August 28. California’s dairy producers have lost hundreds of millions of
dollars of needed income so far in 2007, because the data CDFA used to calculate
producers’ prices relied on what appear to have been unduly low milk powder
prices provided by major cooperatives.
Consumer Milk Costs Increases Modest Over Century (p. 9):
Writer John Bunting goes back a century and explores, in
25-year increments, costs of “basics” for consumers, including a gallon of milk,
a gallon of gasoline, a new car, and a house. He also notes average income. Milk
prices have climbed far less than any other items surveyed.
GAO Questions CME Cheese Market at Pittsburgh FMMO Hearing
(p. 9):
An employee of the Government Accountability Office (GAO)
entered his agency’s recent report on dairy commodity pricing at the ongoing
USDA federal milk order hearing in Pittsburgh, PA.
National Dairy Livestock Price Report (p. 10):
Some markets are holding, some markets are falling backwards.
Looks like availability of forage may be tempering buyers’ interest in dairy
livestock. We’re watching this one closely.
Collin Peterson Short-Circuits Dairy “Cost of Production”
Study (p. 10):
Collin Peterson, chairman of the house agriculture committee,
recently mothballed an attempt by several congressional representatives to study
dairy farm “cost of production.” Peterson operates at the behest of the big
cooperatives.
July Meeting May Unveil USDA/FSA Loan Scandals (p. 11):
Pete Hardin explains how a series of meetings in Washington,
D.C. during July 16-17 may start to unravel one of USDA’s biggest
scandals—unfair persecution off farmers who’ve borrowed from USDA’s Farm
Services Agency. Would you believe that FSA loan officers get a commission on
recovered assets from defaulted FSA borrowers???
Roots of Milk Powder Scandal: Lack of Competition (p. 11):
Dairy’s shortcomings all boil down to a lack of competition.
USDA must end its love-fest with dairy co-ops and enforce the laws of the land,
before things will get better for dairy farmers and consumers.
Butter Prices Poised to Rise, Whey Decline Likely (p. 12):
Butter is the next dairy commodity to “take off” price-wise.
Right now, the price of commodity butter in western Europe is roughly $1/lb.
higher than the Grade AA butter price at the Chicago Mercantile Exchange. Whey
prices are weakening.
Drought Covers Most of U.S., Future Food Supplies Uncertain
(p. 1):
Global supplies of wheat and corn were scarce,
heading into the growing-harvest season in the Northern Hemisphere. This was the
year that the world needed cooperation from Mother Nature for a good grain
harvest—to boost reserves. Unduly dry weather encompasses most of the U.S.
(except for parts of Texas, Kansas and Oklahoma). This nation’s food stability
is threatened. We need to wait and watch crop/weather events for the next six to
eight weeks to have a better handle on futures supplies and costs for a wide
variety of food.
Huge Antitrust Lawsuits Filed Against DFA, Dean Foods and
Others (p. 2):
Two class action lawsuits were filed on July 5, 2007,
alleging violations of the Sherman Act. Plaintiffs are groups of present and
former dairy farmers in the Southeast. Defendants are Dairy Farmers of America,
Dean Foods, National Dairy Holdings, two “marketing agencies”—Southern Marketing
Agency and Dairy Marketing Services, as well as a variety of individuals named
directly and cited as co-conspirators. The complaints are available on The
Milkweed’s Web site: www.themilkweed.com.
Click the “Antitrust Lawsuits” bar on the home page.
June 2006 Cheese and Butter-Powder Milk Prices Top $20/cwt.
(p. 2):
June 2007 saw both the Class III (cheese) and Class IV
(butter-powder) prices in the federal milk order system to above $20/cwt.
How Can Dean Foods’ Repay Loans, Interest from Profits? (p.
3):
Paying off all that debt (and interest) is going to challenge
Dean Foods. For the period April 2007 through March 2008, Dean Foods is obliged
to pay down roughly $90 million per month in principal … plus interest. The big,
$4.8 billion chunk of debt that Dean Foods bit off earlier in 2007, that
included $1.94 BILLION in payouts as a $15/share stockholder bonus, will be hard
to pay off from operations.
GAO Study on CME Admits Potential for Price Manipulation
(p. 3):
The General Accountability Office has recently completed a
study on dairy commodity cash trading at the Chicago Mercantile Exchange.
Conclusion: current practices leave the door open for price manipulation.
Imports from China Threaten Health and Lives in the U.S.
(p. 4):
Toothpaste, tires, foods and food ingredients … what can you
say? Many dangerous foods and consumer products are entering the U.S. from
China. John Bunting puts his unique twist on these current events.
What is Protein? (p. 5):
We face a global shortage of human-quality, dietary proteins.
Writer Paris Reidhead goes back to square one and discusses the fundamental
question: “What is Protein?” Paris covers a lot of basic nutrition and details
how the proteins from the dairy cow are wonderfully complete and nutritious.
Feature Story - “Whitewash”: USDA Milk
Powder Price Review (pages 6-8):
The Milkweed performs a proctology on the recent pair of
reports by USDA that reviewed the milk powder pricing scandal. Bottom line—USDA
cannot be trusted to police itself or the dairy cooperative sector.
Read the story.
U.N. OECD Report Projects High Ag Prices for Next Decade
(p. 9):
A United Nations food agency branch has just surveyed global
food economic trends and projects that “high” food commodity prices could last
at least for the next decade.
Dairy Cattle Replacement Prices at Auction Markets Across
the USA (p. 10):
Most prices for healthy animals are up, up and up. Strong
demand for sound dairy animals of all ages is witnessed across the country.
Dairy Producers—Holler Long & Loud About USDA’s Milk Powder
“Whitewash” (p. 11):
Pete Hardin explains how dairy farmers must make loud noise
to their U.S. Senators and Representatives, in order to get a legislative
investigation of the “Milk Powder Price” scandal. Hardin details what was wrong
with the recent USDA “whitewashes” of milk powder pricing errors. USDA cannot be
trusted to investigate itself.
Long-Term Strength, Growth for Dairy Commodity Prices (p.
12):
The U.S. dairy commodity outlook foresees tightening supplies
of fluid milk (especially in the Southeast) and severe scarcity of nonfat dry
milk supplies in the second half of 2007. Get used to scarcity and high prices.
CME Cheddar Prices Soar Close to $2/lb. Mark (p. 1):
CME Cheddar prices have climbed to within spittin’ distance
of the $2.00/lb. price level, at press time. Cheddar is probably overpriced
somewhat now … but prices will probably be higher in the fall.
6/1/07 Commodity Prices Lock $20 Class III/IV Prices (p.
1):
The array of dairy commodity prices—taken after CME trading
on June 1—will yield both $20/cwt. milk for Class III (cheese) and Class IV
(butter-powder) milk in USDA’s pricing formulae for the federal milk orders.
Three European Nations Tearing Up GM Canola Fields (p. 2):
Because of findings by German research scientists linking
honey bee mortality problems to pollen from genetically-modified canola, three
European nations are tearing up “mistakenly” planted stands of GM-canola. Those
nations are England, France, and Sweden.
Florida Milk “War” at Standoff for Now (p. 2):
Florida’s predominant dairy co-op (Southeast Milk, Inc.) lost
the majority of the raw milk volume it was selling to Dean Foods’ fluid plant at
Orlando. SMI has been replaced by the Southern Marketing Agency (a co-op group
spearheaded by Lone Star and Maryland & Virginia). The real challenge will be
for the new suppliers to meet its supply responsibilities, once milk turns tight
in early July.
Scarce Water Supplies to Impact California Farm
Productivity (p. 3):
Virtually any measure of California’s water
inventories—except reservoir capacity—are way below normal. “Whatcha ya gonna do
when the well runs dry?”
May 2007 Class III Price $17.60—May Class IV Price $18.48
(p. 3):
And there’s more, perhaps much more, to come.
Center for Food Safety Follows up on Roundup Ready Alfalfa
Injunction (p. 4):
Restrictive orders have been placed on the marketers of
Roundup Ready (genetically-modified) alfalfa. This crop is one too many in the
food biotech compost pile.
DFA Still Producing & Marketing Imitation Cheese Food
Garbage!!! (p. 5):
We’re rediscovered “Sandwich-Mate ‘Singles’”—an imitation
pasteurized process cheese food marketed by Borden (a wholly-owned subsidiary of
Dairy Farmers of America).
Dean Foods: High Milk & Energy Costs Threaten Profits (p.
5):
Is the nation’s largest fluid milk processor about to hit
tough times??? Dean Foods’ projected milk costs in the “mid-teens” for 2007. The
second half will probably see fluid milk costs around $25/cwt. for Dean Foods.
That’ll raise costs and lower demand. Dean Foods’ recent debt package has the
company due to pay back over $1 BILLION in the next year—that’s about $85
million per month—higher than Dean Foods’ historic profits. The yuppies are
about to learn about the milk business.
Feature Story #1 - Producer Losses Nearly
$1 Billion, Head(s) to Roll at USDA (p. 6)
The USDA milk powder price scandal is growing
bigger. Unofficial sources indicate that the total losses to dairy farmers whose
milk is priced by USDA’s federal milk marketing order (FMMO) program will total
close to one billion dollars. Read all about it
here.
USDA: No Public Details on Milk Powder Pricing Scandal (p.
6):
Officially, USDA officials are saying virtually nothing about
the milk powder pricing scandal—as they assess damages.
Feature Story #2 - Milk Powder Price
Scandal: Show Dairy Farmers the Money (p. 7):
Step #1 in getting to the bottom of the massive milk powder
price scandal is to determine the approximate size of the damages to U.S. dairy
producers’ milk incomes. USDA is at work on that portion of the clean-up. Read
all about it here.
CA Powder Price Trails DairyAmerica “Spot” by $1.00/lb. (p.
7):
With high grain and energy costs, things aren’t going to get
much better financially for California dairy producers until their state
department of agriculture gets modern and includes an honest value for the price
of milk processed into butter-powder. Right now, the milk powder price CDFA uses
for setting producers’ milk prices is almost exactly $1/lb. LOWER than the
DairyAmerica “spot” price for milk powder.
“Peak Oil” Threatens Foundation of U.S. Farm/Food System
(p. 8):
At some point, global oil supplies will peak … as demand
continues climbing. The implications of “Peak Oil” (and beyond) to the U.S. food
system—production, processing, transportation—are staggering.
House Ag Proposal Would Deny State/Local Control of GMOs
(p. 9):
A provision snuck into proposed farm bill language by the
House Subcommittee on Livestock, Dairy and Poultry specifies that no state,
county or municipal governments could regulate agricultural products inspected
and passed by the U.S. Secretary of Agriculture, or specified by the Secretary
to have “non-regulated status.” Worries are that such stealth language will be
used to block local efforts to oversee genetically-modified foods.
House Farm Bill’s Dairy Proposals: Same Old “Stuff” (p.
10):
Rep. Collin Peterson (D-MN) has crafted dairy provisions for
the 2007 farm bill that basically refry the same old “stuff” as future dairy
policy.
Protein Integrity: Little Compromise (p. 11):
Pete Hardin discusses the Chinese-sourced, “phony protein”
found in dog and cat foods … and takes the logic of “cheaper ingredients”
straight to your kitchen table! Big-city newspaper reporters don’t have to
travel to China to find dangerous, illegal sources of protein in the HUMAN diet.
Hardin also wonders if the intense, heat-treatment of long-life beverage milk
renders the proteins in that product less biologically available.
“Too High” Cheese Prices May Stick; Powder Sky-High (p.
12):
In our review of current dairy commodity prices and trends,
Cheddar cheese (around $2/lb/.) looks a bit high. But U.S. milk powder prices
are at world market prices—and keep rising.
Too Dry … Too Wet: Weather Challenges U.S. Agriculture (p.
1)
A lot of U.S. farm country is either too wet or
too dry. Weather challenges to the 2007 grain harvest threaten global food
stability.
Feature Story: “$20-Something/Cwt.” Milk Prices Ahead! (p. 1)
Milk Marketing Armageddon in the Sunshine State? SMI Out as
Dean’s Milk Supplier at Orlando, June 1 (p. 2):
Dean Foods has notified Southeast Milk, Inc. that,
as of June 1, 2007, the Florida-based co-op will not supply raw milk to the
massive Dean Foods plant in Orlando. SMA—a group of Southeast co-ops—proposes to
take over supplying the Orlando plant. SMA will have to bring in milk from as
far away as New Mexico (1500 miles). Dean Foods’ is acting in tandem with Dairy
Farmers of America—like a pair of Mafia thugs.
Foremost Farms Lost $12.5 million in 2006; Indicators (p.
3):
Here are some of the 2006 financial indicators
from Foremost Farms’ belatedly released 2006 audit (compared to 2005 data):
interest costs (+47%), borrowings (+$16.4 million), packaged fluid milk sales
(-11%), plants/equipment 67% depreciated, repeated violations of minimum debt
ratios with lender, IRS auditing 2002-2005 financial reports, etc. Ed Brooks,
Foremost’s board chairman (and an ex-banker) says, “I don’t think that members
have to be seriously worried.”
April 2007 Class III Price $16.09 (p. 3):
Rising cheese, whey and butter prices moved the
Class III price for April 2007--up to $16.09/cwt. in USDA’s milk order system.
Much more price improvement is built into the pricing system, because of rising
dairy commodity prices.
State of Wisconsin Backs Off May 1 Deadline for Dairy Farm
ID (p. 4):
With 500-700 dairy producers having not registered their farm’s under
mandatory Premises ID, Wisconsin’s agriculture department failed to go through
with its threat to disallow sales of milk from those farms on May 1. More than
100 protesters jammed the board room of at the state agriculture building on
April 25, at a hearing on this issue. Dairy farmer Mark Brothen, of Viroqua,
Wisconsin, gave compelling testimony in which he cited the November 8, 2004
Federal Register, which had published rules for the federal National Animal
Identification System (NAIS—which starts with Premises ID). Brothen showed how
federal rules list the program as “voluntary” and those rules supercede any
related state rules.
New Global Realities Propelling Dairy Prices (p. 5):
Many global factors have combined to push up
demand and prices for dairy proteins. Those factors include: global shortages of
dairy proteins, China’s growing demand, a weaker U.S. dollar, global grain
shortages. Meanwhile, U.S. dairy marketers have “missed the boat” in perceiving
that global dairy exports shifted to a “demand economy” in late 2005.
USDA Admits Serious Milk Powder Pricing Scandal! (p. 6-7):
The USDA milk powder pricing scandal—first
detailed by The Milkweed—has blown sky-high. In mid-April, USDA admitted that
erroneous data for nonfat dry milk sales had been reported to the gov’t by “one
plant” (hint: DairyAmerica—the co-op powder cartel). USDA has embarked on a
review of the past year’s weekly milk powder sales/price data reported to it.
Meanwhile, 11 U.S. senators have written USDA Secretary Mike Johanns, demanding
many answers to “what did USDA know and when did they know it”. And both the
National Farmers Union and National Milk Producers Federation have written USDA,
demanding financial compensation for USDA under “Section 32” authority. This
article details the day-by-day key events of the past month.
U.S. Senators Demand Answers from USDA About Milk Powder
Price Scandal (p. 7):
On May 9, eleven U.S. senators sent a letter to
USDA, demanding detailed information about events surrounding misreporting of
milk powder prices during much of the past year. Powerful letter—reprinted in
this issue.
Beware of NMPF in Milk Powder Scandal (p. 7):
NMPF—the dairy co-op lobby—has joined on, asking
USDA for compensation to dairy producers for errors in calculating farm milk
prices by USDA’s milk order program. But at a DFA meeting in California in early
May, word from DFA was that NMPF will seek to “make the crime legal” by
proposing changes in USDA’s weekly commodity price reporting rules to make
long-term export prices legal.
Organic Producers Facing Downwards Pressure from Buyers (p.
8):
Pressures are on organic dairy producers in the
Midwest and Northeast to sign annual contracts for lower milk prices in the year
ahead. More organic milk—primarily from the Southwest and West—is coming on
line, boosting supply. The Milkweed suggests a “base + ‘riser’” formula for
organic producers’ annual contracts.
Cornell Food Scientist Discounts PI Count Test’s Importance
(p. 8):
Dr. Kathryn Boor, food scientist at Cornell
University, has prepared a one-page memorandum that reviews the lack of science
in certain processors’ emphasis about “Preliminary Incubation Counts” being used
to jeopardize dairy farmers’ markets. We reprint Dr. Boor’s memo in full.
New German Research: GM Pollen Compounds Honeybee Trauma
(p. 9):
What’s wrong with our honeybees? Writer Paris
Reidhead details research from Germany that shows how exposure to pollen from
Genetically-Modified (GM) plants harms honeybees. This subject deserves to be
front-page on the New York Times!
FMMO Whey Costs Drain Cheese Plants’ Profits (p. 9):
We explain how rising whey prices are draining more money
from cheese plants. In fact, whey prices are threatening the stability of cheese
plants whose milk is priced by USDA’s federal milk marketing order system.
National Dairy Cattle Replacement Prices (p. 10):
Many markets are showing big gains in dairy
livestock—especially springing heifers. One market averaged $2215 per head for
700-800 springers. Another market showed gains of $400-600 per head in prices
for springers between its early April and early May auctions! Only in The
Milkweed!
DFA Plans to Sell Off or Joint-Venture Cheese Plants (p.
10):
DFA’s closing of its Lovington, New Mexico cheese plant is just the beginning.
The co-op hopes to close, sell or joint-venture all of its cheese plants during
2007. Corona, California looks like a “$100 million bath”.
DO NOT Contract Milk or Gamble in “Future/Options/Puts”:
Upwards Price Potential Too Great to Miss Out On! (p. 10):
The Milkweed strongly advises dairy farmers to avoid any
fixed-price milk deals or “gambling” on milk prices. There is simply too much
upwards potential in the market right now to settle for current prices. In fact,
we offer exact advise on how to respond to milk commodity brokers trying to sell
these items.
Gov’t Owes Compensation for Milk Powder Scandal (p. 11):
USDA is now totaling the damages in an unaudited review of
the past year’s milk powder price reporting to NASS by DairyAmerica. Pete Hardin
argues that USDA owes big-time financial damages to dairy farmers whose milk
prices were understated by erroneous milk powder price reports … that the
government should have known were wrong!
DairyAmerica’s Spot NFDM Prices for 2007 (p. 11):
From January 1 to May 4, 2007, DairyAmerica raised “spot”
prices for nonfat dry milk from $1.20/lb. to $2.25/lb. We detail each price
increase.
Antitrust Lawsuit vs. DFA Soon (p. 11):
As a famous man once said, “Ho! Ho! Ho!”
Dairy Commodities Continue to Shrink (p. 12):
Dairy commodity inventories are shrinking and prices are
rising. We’re looking at scarce dairy commodities for much of 2007 and
beyond—along with very high prices.
Projected 15% Gain in ’07 Corn Acreage Eases Prices, BUT …
(p. 1):
Corn futures at the Chicago Board of Trade have eased off
somewhat, following USDA’s late March announcement that intended corn plantings
will boost acreage 15% this year, compared to 2006. But don’t take this year’s
corn crop for granted until it’s in the bin.
Dean Foods Stock Drops $15/Share after $15/Share Pay-Out
(p. 1):
Following pay-out of the special, $15/share
dividend by Dean Foods, the company’s stock value at the New York Stock Exchange
fell $15/share. Dean Foods borrowed $1.9 Billion to make that pay-out. Damn
greedy yuppies.
Safe/Not Safe? Milk Hormone Rumble Intensifies (p. 2):
Arguing about the “safety” of milk from cows
injected with Monsanto’s synthetic growth hormone gets louder. On one side,
activists have petitioned FDA to immediately suspend approval of sale of
Posilac®. On the other hand, Monsanto and its “allies” have asked both FDA and
the Federal Trade Commission to disallow dairy marketers’ differential of dairy
products, based upon whether they contain milk from Posilac-injected cows.
Round 3: NY Assemblyman Aubertine vs. MPCs (p. 2):
Once again, NYS Assemblyman Darrel Aubertine has introduced
legislation that would curb use of Milk Protein Concentrates, caseins and
caseinates from use in dairy products in New York State. Twice before, Aubertine
has gained unanimous approval for similar bills in the NYS Senate & Assembly.
Once, the Republican governor vetoed it. Second time ‘round, NYS Ag & Markets
has refused to implement the law.
Agri-Mark Claims $2.5 Mil. “Profit” Despite $9.7 Mil. of
Deducts (p. 3):
Agri-Mark, the struggling dairy co-op in New
England, has set some new “low” for co-op accounting—claiming profits in a year
when the co-op drained nearly $10 million from members’ milk checks to cover
operating losses.
No Milk Sales After May 1 by WI Farms Without Premises ID
(p. 4):
After a long time, the issue of mandatory farm
premises registration in Wisconsin is finally heating up. Critics pounded the
Wisconsin ag dep’t for its policy of disallowing any sales of milk by dairy
producers who haven’t registered their farm premises after May 1. Despite this
pounding, looks like the state ag bureaucrats are intent to push ahead with the
plan.
DOJ Antitrust Official Weasels Dairy Antitrust Answer in
Hearing (p. 4):
On March 7, Thomas Barnett, Assistant Attorney
General for the Antitrust Division at DOJ, answered a question from Wisconsin
Senator Herbert Kohl about the dairy antitrust investigation by DOJ. Barnett
stated that investigation continued. The Milkweed contends that Mr. Barnett
totally misrepresented the truth.
Federal Judge: USDA Ignored Environmental Oversight for GM
Alfalfa (p. 5):
A federal judge in San Francisco, California ruled
on Feb. 12, 2007 that USDA had failed to conduct proper environmental oversight
in its approval of Monsanto’s genetically-modified alfalfa. Writer Paris
Reidhead takes a long look at the surrounding issues.
Feature Story: California Producers Scared:
Milk Prices Lag Behind Soaring Costs (p. 6)
California dairy producers, who generally swaggered through
dairy price downturns over the past two decades, are quickly changing their
attitudes after feed costs, milk prices and weather all started going in the
wrong direction last year. Major screw-ups by the state milk pricing bureaucracy
have only made these problems worse in recent months. Read this month’s feature
story on how the California dairy paradigm has
changed.
Demand USDA Investigate DairyAmerica for Undue Price
Enhancement (p. 7):
This article details the enforcement powers held
by the USDA Secretary to bring actions against cooperatives that unduly enhance
the price of an agricultural commodity. We contend that DairyAmerica, the milk
powder “cartel”, has unduly raised nonfat dry milk prices to domestic
processors, and should be called on the carpet. IMPORTANT!
Federal Judge Halts Sale, Planting of GM “Roundup Ready”
Alfalfa (p. 8):
In mid-March, the federal judge in San Francisco
issued a ruling, blocking sale and planting of “Roundup Ready” alfalfa, a
genetically-modified variety. This ruling follows a February 2007 decision that
USDA had not conducted appropriate environmental or economic analyses on
Monsanto’s GM alfalfa.
Milk Powder Update (p. 8):
Tidbits from the milk powder trade.
Dairy Cattle Replacement Prices at Auction Markets Across
the USA (p. 10):
Some of the poop is still steaming in the ring from these
up-to-date sales reports of dairy livestock prices from across the U.S. HOT
MARKET: Brush, Colorado, where the top 288 springing Holstein heifers averaged
$2005 on March 5! 800 springers were sold that day.
Jan-Feb. 2007 Northeast Milk Output Down Nearly 8% (p. 10):
Bad crops and bad milk prices are combining to
dramatically constrict milk flow in the Northeast.
What’s Right for the ’07 Farm Bill? (p. 11):
Pete Hardin explains what he thinks ought to be in the
federal government’s new farm laws. Hardin reproduces the National Farmers
Union’s recommended dairy plank as an excellent basis for dairy policy.
Entire Dairy/Ag Commodity Picture Tightening (p. 12):
Production and inventories of virtually all dairy
commodities is tightening. Except for whey, all prices are strengthening. Milk
and dairy commodities will be impossibly tight in the second half of 2007, in
our analysis.
Feature story: USDA’s
Milk-Pricing Fails: Producers Lose Half a Billion Dollars (p. 1)
Our March feature story on
the “Missing Milk Powder Millions” scandal is a MUST READ about the systemic
USDA bureaucratic failures and big co-op bungling that has cost U.S. milk
producers about half a BILLION dollars of legitimate, direly-needed income on
milk marketing under federal milk marketing orders in recent months.
Dean Foods to Pay $15/share Bonus (Using Borrowed Funds)
(p. 2):
Dean Foods has announced it will pay shareholders a one-time,
$15/share dividend this spring. The firm will borrow $1.93 BILLION to pay out
the $15/share bonus. President/CEO Gregg Engles pocketed $39 million in this
swift move.
Illegal Yogurt Imports from 13 Nations Entered U.S. in 2006
(p. 2):
Data from the Department of Commerce shows that 15 nations
exported yogurt to the U.S. last year. But only two nations’ have facilities
that have been inspected under U.S. Grade A milk sanitary codes. The rest of
those imports were all illegal.
Feb. 2007 Class III: $14.18 (p. 2):
USDA’s price for cheese milk priced through the federal milk
order program rose $.62/cwt. last month, to $14.18/cwt.
Federal Judge in Ohio OKs Make-Allowance Increase (p. 3):
Legal efforts to block imposition of higher “make-allowances”
for farm milk processed into Class III (cheese) and Class IV (butter-powder) in
the federal milk order system were defeated.
Farm Milk Price Surge Starting (p. 3):
At long last, signs are pointing towards a significant
upwards movement in farm milk prices, in our analysis.
UCONN: Retailers Profit More (per Gallon) than Dairy
Farmers Paid (p. 4):
An analysis of farm-to-consumer price margins for November
2006 by the insightful folks at the University of Connecticut’s Food Marketing
Policy Center determined that net profits for supermarkets’ sale of a gallon of
milk averaged higher than what dairy farmers were paid for that same gallon of
milk.
rbGH (Posilac) Battle Intensified; Monsanto Scared (p. 4):
As more and more U.S. dairy processors are demanding
“rbGH-Free” raw milk supplies, this ugly controversy is headed towards end-game.
Monsanto employees are worried that at some point in the future, the company may
not be able to efficiently manufacture and distribute rbGH.
NDB Chairman Les Hardesty Erroneously Boasts Exports’ Price
Impact (p. 7):
Chairman of the National Dairy Board (and DFA director) Les
Hardesty recently proclaimed that big milk powder exports are boosting dairy
farmers’ milk checks. That’s a lie.
NFFC Files Milk Powder Pricing Complaint with USDA/OIG (p.
8)
In late February, the National Family Farm Coalition handed a
formal complaint, alleging improper reporting of milk powder sale data, to
USDA’s National Agricultural Statistics Service (NASS) to USDA’s Office of the
Inspector General.
Testimony of Bryan Wolfe on Feb. 28, 2007 (p. 9):
We reprint the powerful testimony of Bryan Wolfe (an Ohio
dairy farmer) at the recent USDA national milk order hearing in Strongsville,
OH. Way to go, Bryan!
Beef Import Letter Triggers R-CALF Shakeup (p. 9):
The Ranchers -Cattlemen’s Legal Action Fund United
Stockgrowers Association purged its national president—a good sign. Casualties
include Texas cattleman Chuck Kiker, who had strayed from the organization’s
historic opposition to imports of beef from Canada. Joining Kiker in a hasty
exit was Bill Hawkes, a long-term Bush administration high-level USDA official
and R-CALF advisor.
Dean Foods to Buy Friendship Dairies (NY) (p. 9):
Pending final approval of government agencies, Dean Foods
will pay about $130 million to acquire Friendship Dairies of Jericho, NY.
Dairy Cattle Replacement Prices at Auction Markets Across
the USDA (p. 10):
Holy mackeral! On March 1, the top 113 Holstein springers at
the Brush, Colorado auction averaged $2115!
WI Organics “Hangs On” (p. 10):
The Wisconsin agriculture department has disallowed Wisconsin
Organics from buying any producer milk directly, as the company tries to work
off back-due milk obligations. Wisconsin Organics is buying some milk from
outside providers.
The Milk Powder Mess: Aftermath (p. 11):
Pete Hardin tries to make sense of the “Missing Milk Powder
Millions” foolishness. First of all, he editorializes, USDA should indemnify
producers from lost milk income. He also suggests investigation DairyAmerica
under Section II of the Capper-Volstead Act. If wrongdoing has occurred, Hardin
believes that DairyAmerica should be put out of business, permanently.
From Corn & Hay to Milk Powder: Tight (p. 12):
Reporter John Bunting reviews a wide range of commodities
integral to milk production and pricing. Most of the basics are tight in supply.
Feature Story: By Dec. 31, 2007, Global
Corn Reserves Could be Only 2.5 Days’ Use (p. 1):
Starkly stated, if projections from USDA’s Foreign
Agriculture Service on global corn production and demand for 2007 prove
accurate, the world faces close to the lowest carry-over of corn supplies in
modern history. Read John Bunting’s story about this emerging concern
here.
January 2007 Class III $13.56 (p. 1):
The federal milk order Class III (cheese) milk price for
January was $13.56. Sky-high whey prices are driving up the cheese milk price.
Ben Yale Sues to Block New FMMO “Make-Allowances” (p. 2):
Ohio attorney Ben Yale has filed actions against USDA’s
attempts to implement the new “make-allowances” in the federal milk order
program. Yale’s challenges focuses, in part, on the government’s failure to
include consideration of section 608 (c) 18—price relief for dairy farmers due
to high grain prices.
Altria Group to Spin-Off Kraft Foods (p. 2):
Kraft’s corporate parent will send the large, but
poorly-performing stepchild out into the cold world, in March.
Huge Die-Offs of Honey Bees Reported (p. 2):
No reason known. Massive kills of honey bee colonies have
occurred in fall 2006. If this trend continues, major implications for human and
livestock food crops could be felt.
California Dairies, Inc. Bans rbGH, Effective August 1,
2007 (p. 3):
The nation’s second-largest dairy co-op—California
Dairies, Inc.—announced it would not accept milk from herds whose cows are
injected with “Posilac”—Monsanto’s milk-stimulating, synthetic hormone. CDI
members produce eight percent of the nation’s milk and 45% of California’s milk.
Organic Milk Demand Softens in
Midwest, West (p. 4):
Worries about large volumes of organic milk coming on
line later in 2007 are causing Midwest organic milk marketers to be skeptical
about taking on extra supplies right now. The big volume of anticipated
conversions is primarily from western and southwestern states.
Monsanto Data Shows Posilac-Injected Cows Need More Energy
Per Unit of Milk (p. 4):
Dairy cow ration data from Monsanto details how
Posilac-injected cows need more units of energy in their daily diet for all milk
produced. High corn prices mean that higher-producing, Posilac-injected cows’
net profitability is significantly reduced.
Lawyer Tells Midwest Co-ops: How to NOT Pay Back Farmers
Equities! (p. 5):
Joel Dahlgren, a Minneapolis lawyer with many major clients
in the farm cooperative field, sent out a letter in September 2005, seeking
money from farm co-ops to challenge IRS rules penalizing write-downs of members’
equities and retained earnings. Not so behind the scenes, ag co-op leaders are
trying to figure out how not to pay back farmers’ equities.
Global Dairy Price Confusion: U.S. Commodity Prices
Sometimes Lower (p. 6-7):
John Bunting details global dairy price data, showing how for
key items like nonfat dry milk and Cheddar cheese, global market prices are
higher than U.S. cash dairy markets. Why?
USDA Won’t Release Order 30 FMMO Vote on “Make-Allowances”
(p. 8):
Details of the referendum among co-ops taken late last year
to reauthorize the Upper Midwest milk order cannot be made public. USDA refuses.
But the Secretary of Agriculture does have the power to release the numbers.
Déjà vu … Seems like 1972-74 All Over Again (p. 8):
Economic and political events in recent months look eerily
parallel to the “bad old days” of 1972-74, which inflation hit the price of
everything. Watch food prices spiral upwards!
Ed Slusarczyk: 84 Years Young (p. 9):
Noted farm broadcaster Ed Slusarczyk of Remsen, New York
passed away in late December, leaving a rich legacy.
USDA Calls New “Make-Allowance” Hearing (p. 9):
On February 26, 2007, in Strongsville, OH, USDA will revive
the long-running, absurd “make-allowance” hearing. Some dozen and a half
proposals are being aired out. Lawyers win!
Dairy Cattle Replacement Prices (p. 10):
Prices for milk cows, bred heifers, and calves are down in
many parts of the country. Prices for open heifers are holding in several
markets.
Straight Talk (p. 11):
Pete Hardin takes several pokes, including: Corn-based
ethanol is dumb; dairy has a devastating price emergency; and he proposes a
$5.00/cwt. emergency Class 1 surcharge to cover farmers’ higher grain costs.