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8 CapitalPress.com September 9, 2016 Court OKs class action in employment case Calif. strawberry production sizzles after slow beginning By DAN WHEAT By TIM HEARDEN Capital Press Capital Press SEATTLE — The 9th U.S. Circuit Court of Appeals has upheld a federal judge’s ruling that a lawsuit involving more than 600 alleged job seekers may proceed against a South- ern Washington farm as a class action. Meeting in Seattle, a three- judge panel of the appeals court on Aug. 31 unanimously af- irmed Judge Stanley Bastian’s April 2015 ruling involving Mercer Canyons Inc. The remote family farm, more than 125 years old, is in the Horse Heaven Hills south of Prosser and north of the Columbia River town of Al- derdale. The 12,000-acre farm includes vineyards and produc- es about 365 million pounds of fresh produce annually. In 2014, two farmworkers, Bacilio Ruiz and Jose Amador, with the help of Columbia Le- gal Services, iled a lawsuit al- leging Mercer Canyons failed to inform them, when they worked there or sought work there in 2013, of vineyard jobs available under the H-2A-visa guestworker program paying $12 an hour. The company failed to con- tact former vineyard employees about the higher-paying jobs and turned away hundreds of local farmworkers in violation of state and federal wage laws to hire foreign H-2A workers, the lawsuit contends. Mercer Canyons has denied the allegations and has said it was approved to hire 44 H-2A workers but hired only 19 after hiring 22 local workers for the jobs. All of them were paid the higher wage required by H-2A regulations, Mercer Canyons has said. WATSONVILLE, Calif. — After a slow start, Califor- nia strawberry growers have come within striking distance of last year’s production to- tals. Growers had produced nearly 149.6 million crates for the year as of Aug. 27, compared to 159.1 million at the same point last year and 160.6 million in the irst eight months of 2014, according to the California Strawberry Commission. Since mid-July, howev- er, the picking of strawber- ries has far outpaced the last two summers. For instance, strawberry farms in the Gold- en State turned out nearly 5.7 million lats — well above the 3.96 million and 3.5 mil- lion picked in comparable weeks in 2015 and 2014, re- spectively, the commission reports. The question of wheth- er production will catch up to last year depends on the weather, commission spokes- woman Carolyn O’Donnell said. “It just depends on when it starts raining again,” she said. “If we get early rains, maybe not. But the weather has just been beautiful.” Favorable weather has spurred production at V&M Farms in Watsonville, said Juan Godinez, who was selling strawberries for the operation at a recent farm- ers’ market in Elk Grove, Calif. “It’s been great, just be- cause it’s nice and cool out there,” he said. “That’s the only reason.” Winter rains early in 2016 Capital Press File Global dairy prices rallied in August as buyers responded to a year- over-year decline in production. August rally helps global dairy prices By CAROL RYAN DUMAS Capital Press Tim Hearden/Capital Press Juan Godinez of Watsonville, Calif.-based V&M Farms arranges strawberries for sale at a recent farmers’ market in Elk Grove, Calif. After a slow start this year, California strawberries have outpaced the peak-season production of the past two years. put production well behind the previous two years, when a lack of rainfall led to fast starts. As of April 4, straw- berry ields in California had produced just 26.7 million lats, well below last year’s total to date of nearly 45.4 million. However, industry lead- ers believed even then that all the rain has put ields in position to yield an abundant crop during the peak harvest season, which typically runs from April to mid-summer. O’Donnell said the pro- duction pattern is more con- sistent with the years before the drought, when the indus- try saw almost a decade of record or near-record crops. Overall production in 2015 dropped slightly for the sec- ond straight year. Growers are trying to get by with fewer acres — an es- timated 32,515 acres in 2016. That’s down from the 37,438 estimated acres last year and continuing a trend of annu- al declines from the 40,816 acres planted in 2013. Un- til the drought, growers had kept pace by planting newer varieties that posted better yields. Growers this year have been happy with the quality of berries, which have been virtually lying off supermar- ket shelves, O’Donnell said. “There weren’t piles and piles of them” in supermar- kets, she said. “People were buying them.” Slowing world milk pro- duction brought buyers to the market in August, with most commodity prices jumping 25 to 30 percent in a matter of weeks. Skim milk powder missed the rally cry, however, and prices continue to lag, accord- ing to a new report from the U.S. Dairy Export Council. Things have improved in world markets, but they still have a long way to go to get back to long-term average prices, Alan Levitt, USDEC vice president of communi- cations and market analysis, said. The big fundamental change in markets is that milk production is inally pulling back after a couple of years of strong growth. That got buy- ers’ attention, he said. “Buyers were more ag- gressive. Over the last month, things kind of turned … milk is not as loose as we thought. So much of this is psychol- ogy and perception. Buyers want to get ahead of the next price increase,” he said. So they jump in the mar- ket, and price increases be- come a self-fulilling proph- ecy, he said. But the rebalancing of world supply and demand appears to be underway, Lev- itt and Marc Beck, USDEC executive vice president of strategy and insights, wrote in their global outlook report. Milk production from the top ive suppliers was down 0.4 percent year over year in the second quarter and their exports were up 2 percent, putting a dent in the surplus. That trend is expected to con- tinue through the second half of the year and into 2017, the analysts said. The main driver in slow- ing milk production is the EU. Milk production growth there was up 6 percent year over year in the first quarter but slowed in April and May. It was down 1.9 percent year over year in June, with sim- ilar losses reported for July. “Coupled with declines in Australia and Argentina and flat output in New Zealand, production from the top five suppliers was down 1.6 per- cent in June,” the analysts stated. The U.S. is the only re- gion still growing milk sup- ply, but a strong domestic market will continue to con- strain product volumes sold overseas, they noted. The analysts expect glob- al milk production to be down for the balance of the year, off about 0.5 percent year over year from the top five suppliers. While the price rally in August was welcome, it needs to be put in perspec- tive, Levitt said. Prices are still near 10-year lows in some cases and still haven’t come back to long-term av- erage prices, Levitt said. “We expect prices to move up a little through the rest of the year, but the up- side is somewhat limited,” he said. Weak oil prices, a strong U.S. dollar, erratic economic growth in emerging markets, lost demand from Russia and Venezuela and large skim milk powder inventories in the EU are some of the head- winds, the analysts reported. In addition, milk pro- cessors and co-ops in New Zealand and Europe are be- ginning to increase payout prices, which could stall the needed supply contrac- tion before it gets too much deeper. And most of the sup- ply-contraction news is now already priced into the mar- ket. “In the supply and de- mand balance sheet, I think the worst is over, but I don’t see a big upside,” Levitt said. Dairy groups criticize Canada’s pricing policy By CAROL RYAN DUMAS Capital Press 37-1/#7 U.S. dairy industry mem- bers are concerned by new Canadian pricing policies on milk used in processing. They say the policies will hurt U.S. dairy exports to its northern neighbor. At issue is a pricing policy that went into effect in Ontar- io last April that establishes a new class of milk and pricing for milk for processing that would undercut dairy imports from the U.S. The same strategy appears to be in play in negotiations between the Dairy Farmers of Canada and the Dairy Proces- sors Association of Canada, which announced a “national agreement that includes the creation of an ingredients strategy” in July. Details of that agreement have not been released. “The goal is to incentivize Canadian processors to use domestic milk or dairy ingre- dients, and it’s speciically focused on U.S. imports go- ing into further processing in Canada,” said Shawna Mor- ris, U.S. Dairy Export Council vice president of trade policy. Canada is trying to use pricing tools to make domes- tic dairy ingredients more at- tractive and cheaper and drive up the cost processors would be forced to pay for U.S. product, she said. Canada’s pricing system consists of convoluted and complex regulatory tools, and its milk-classing structure is intentionally used to block imports, she said. It’s dificult to get details on how Ontario’s program is working and how a nation- al program might work, she said. But U.S. companies al- ready see export losses, and it’s likely a national program would lead to more, she said. Targeted in the Ontario policy are imports of U.S. ul- trailtered milk, which is high- ly concentrated to remove water and high in protein. It’s used primarily in Canada for making cheese, and would be impacted by the national strat- egy, she said. USDEC and the National Milk Producers Federation on Thursday praised Sens. Chuck Schumer, D-N.Y., and Tammy Baldwin, D-Wis., for urging an investigation into the policies. In a letter to Ambassador Michael Froman and USDA Secretary Tom Vilsack, the senators said it is troubling that the pricing programs appear to be designed to dis- place imports of U.S. product. “We are extremely con- cerned that the Class VI pric- ing policy that has recently been in place in Ontario vio- lates Canada’s existing trade commitments to the United States, and reports suggest that this new national strate- gy may follow a similar ap- proach,” the senators stated. The Class VI pricing pro- gram appears to incentivize Canadian processors to shift to using more Canadian dairy inputs, in essence penalizing them for the use of imported dairy inputs, they stated. “Based on the information currently available on this program and the clear public track record that the Class VI pricing program is being implemented speciically to displace imports, we have serious doubts as to how the program would be compliant with Canada’s NAFTA and WTO obligations,” they said. The North American Free Trade Agreement and the World Trade Organization govern trade between the U.S. and Canada. The senators said they are concerned that Canada is moving to target New York and Wisconsin exports of ul- trailtered milk, with compa- nies in those states saying they have already lost considerable export sales as the result of the new policy in Ontario.