July 24, 2015 Subscribe to our weekly dairy or livestock email newsletter at CapitalPress.com/newsletters vegetables on Stahlbush Island. How do you determine what to produce? CORVALLIS, Ore. — A: We listen to literally Growing up on an Eastern Or- thousands and thousands of egon farm, Karla Chambers, a customers at food shows in an former director on the Federal effort to stay in concert with Reserve Bank of San Francis- consumer trends. co, saw what it was like to work Karla Chambers Q: What are you seeing in hard and have little, in the form terms of consumer trends in of economic gain, to show for I also remember thinking as coming years? a kid that this looked like a lot it. A: The consumer is chang- That experience, coupled of work, but I never remember ing at a remarkable pace of eat- with her university studies in seeing the marketing side. You ing healthier; eating more fruits economics and her experience sell these semi loads of wheat, and vegetables; more beans and as co-owner and vice president but you have no idea where this legumes. Non GMO is very of Stahlbush Island Farms, a pricing came from. I decided I important to the consumer to- successful, vertically integrated wanted to know the business day. Gluten free is something operation, provides her with a side better. we hear a lot of at these food unique perspective on the his- Q: On Stahlbush Island shows. tory and future of agriculture. Farms you and your husband, I would say we are going Chambers shared that per- Bill, obviously have built a to look back at this period of spective in a recent interview. very successful agricultural time and see that the consumer Her answers have been edited business. How did this opera- has driven a remarkable revo- for length. tion evolve? lutionary change to our food Question: How did your A: Bill and I knew very ear- markets. upbringing shape where you ly on that we needed to collapse Twenty years ago, when are today? all the operations — the farm- ZH ZHUH JRLQJ WR WKH ¿UVW RU- Answer: I grew up on a ing, processing and marketing ganic food shows, there were farm that has been in my family ²WREULQJPRUHRIRXUSUR¿WV 3,500 people there. Today there IRU\HDUV)RUWKH¿UVWWKUHH back to the farm and the land. are 70,000 and 80,000 people generations, we were probably We didn’t know how we were there. And it is a $35 billion and FUHDWLQJSUR¿WVWRZKHUH\RXQJ going to do that, but that was a growing industry. That is not people wanted to come back very early goal of the farm. a niche. That is a fundamental to the farm. But I think the last We also felt that we wanted shift in the demand curve for two generations, most young to create a working environ- organic and natural foods. farm kids didn’t want to come ment that would attract talent Keeping up with that shift, back to the farm. And I was one and young people and bring keeping up with that demand, of them. great young minds back into is vital to staying current and Growing up it looked to these farming operations, and economically relevant in an me like we worked remark- it strikes me that the only way industry that is continually ably hard, and that some- you do that is through opportu- evolving. body, somewhere — probably nity. And part of that is bringing somewhere in Chicago — was One of the absolutely cool- talent back into agriculture. setting the price of soft white est things for Bill and me is to We’ve lost two generations of wheat or the price of cattle, have a daughter and son who young people with that farm and we had very little control have chosen to go back into the management experience. We of that. We did all the work, farming operation. QHHG WR ¿QG WKDW WDOHQW WKDW LV but we had little control of the Q: You grow and process a willing to relearn that and help pricing of our products. diversity of organic fruits and rebuild those skills. By MITCH LIES For the Capital Press CDFA raises its cap on whey value than the $4 proposed for a two-year period by producers California Ag Secretary and more than the $1.25 pro- Karen Ross has raised the value posed for a six-month period of whey in the pricing formula by processors. for Class 4b milk headed for It is also higher than the cheese vats from $0.75 per hun- $1.55 cap recommended by the dredweight of milk to $2.005 hearing panel for a one-year per hundredweight. period. The increase will be in place The increase to the cap isn’t for a year, from Aug. 1 through the biggest focal point of the de- July 31, 2016. Had it been in cisions, said Rob Vandenheuvel, place from April 2010 to March manager of the Milk Produc- 2015, it would have resulted in ers Council, which joined with D¿YH\HDUPRQWKO\LQFUHDVHRI California Dairy Campaign and $1.01 to the 4b price and $0.46 Western United Dairymen to to the pool price, according to propose the $4 cap. California Department of Food The decision recognizes a and Agriculture. VLJQL¿FDQW FKDQJH LQ UHDOL]LQJ Producers have been push- the 4b price is not in alignment ing for a substantial change in with Class III, he said. the whey valuation for some A monthly Class 4b price time, saying the 4b price lags $2 to $2.50 below Class III has the price of Class III milk in been commonplace, with the federal milk marketing orders. average from 2010 to June of They are also supporting the this year trailing $1.81 for a to- establishment of a federal or- tal of $1.83 billion, he said. der for California to replace the If the change had been in state order. place in June, it would have in- Ross’ July 17 decision fol- creased the 4b price $0.69 per lows a June 3 hearing on the hundredweight and narrowed matter stemming from her the 4b/Class III gap to $0.48, concern that current conditions he said. might warrant pricing adjust- While the increase is tempo- ments. rary, it will provide much need- The temporary cap is less ed relief for dairy farmers. Capital Press 11 Dairy/Organic Q&A: Outlook for farming is changing By CAROL RYAN DUMAS CapitalPress.com In addition to raising the cap, Ross proportionally in- creased each bracket within the sliding scale for whey val- ue, he said. “Today’s decision recogniz- es the fact we need to be closer in line with federal orders, but it’s only a short-term increase,” said Lynne McBride, executive director of California Dairy Campaign. Producers welcome the in- crease, but it is long overdue and unfortunately comes too late for many dairy farmers, she said. The income that was lost due to the huge discrepancy in prices drove dairy farmers out of business and together with the unprecedented drought is causing some to wonder if they have a future in Califor- nia, she said. Those losses were cumu- lative and the substantial un- derpayment has put dairy pro- ducers in jeopardy, she said. Dairy farmers delivered the message time after time in hearings since 2010 and were never heard. They are encouraged that Ross finally recognizes the huge dispari- ty, she said. 30-1/#5 Retail companies expand dairy antitrust litigation New lawsuit accuses herd retirement program of manipulation By MATEUSZ PERKOWSKI Capital Press Two retail companies are accusing a national dairy orga- nization of manipulating milk prices, opening a new front in litigation over a herd retire- ment program. Piggly Wiggly Midwest, a grocery chain, and Kinney Drugs, a pharmacy chain, have ¿OHG DQ DQWLWUXVW FRPSODLQW against the National Milk Pro- ducers Federation and associ- ated dairy cooperatives. The lawsuit claims that NMPF’s “Cooperatives Work- ing Together” program repeat- edly paid farmers to send their herds to slaughter between 2003 and 2010, thereby reduc- LQJ PLON RXWSXW DQG LQÀDWLQJ prices for dairy products. The plaintiffs characterize the program as an unlawfully anti-competitive “conspira- cy” and have requested class action status that would allow other direct dairy purchasers to join in the lawsuit to seek com- pensation. NMPF has been battling similar allegations for the past four years, but that class action case was brought on behalf of consumers rather than retailers. Chris Galen, senior vice president of communications for NMPF, said the group could not yet comment on the latest complaint. “We just learned of this litigation and we’re still con- sulting with our attorneys,” he said. According to NMPF, the herd retirements were protect- ed by the Capper-Volstead Act, which provides farm cooper- Mateusz Perkowski/Capital Press &RZVIHHGRQKD\LQWKLV&DSLWDO3UHVV¿OHSKRWR/LWLJDWLRQRYHU DKHUGUHWLUHPHQWSURJUDPUHFHQWO\H[SDQGHGZLWKWZRUHWDLOHUV FODLPLQJDQWLWUXVWYLRODWLRQV atives with some exemptions from antitrust liability. Since the original antitrust ODZVXLW ZDV ¿OHG LQ NMPF has continued defend- ing the program despite suf- IHULQJ WZR VLJQL¿FDQW OHJDO setbacks. The organization asked U.S. District Judge Jeffrey White to dismiss the case on the grounds that USDA and not the federal court has juris- diction over the controversy. In 2012, White rejected that argument as well as the claim that plaintiffs were barred IURP ¿OLQJ WKH ODZVXLW E\ WKH statute of limitations. Last year, the judge dealt NMPF another blow by certi- fying the consumer case as a class action — a step that often exposes defendants to greater ¿QDQFLDO ORVVHV DQG WKXV FUH- ates pressure to settle. A jury trial in the consumer case is scheduled for February 2016. It’s likely that NMPF will again ask the judge to throw out the case before it goes to trial, based on the theory the cooperatives are protected by Capper-Volstead, said Peter Carstensen, a law professor specializing in agricultural an- titrust at the University of Wis- consin Law School. If the judge agrees that NMPF is shielded by that law, it would effectively end the case and foreclose the plain- WLIIVIURP¿OLQJDVLPLODUODZ- suit, he said. “You won’t be able to come back and have another crack at it,” Carstensen said. As for the new retailer law- suit, it could be an attempt by other attorneys to join the dis- pute in the hope of eventually winning a share of the fees, he said. The latest complaint could also be strategically aimed at expanding the class of plain- tiffs, Carstensen said. “It’s possible this is a way of add- ing another component to the litigation.” Aside from milk, similar lawsuits have targeted vol- ume-control systems for pota- toes, eggs and mushrooms in recent years, he said. Given the legal uncertain- ty about such programs and their vulnerability to litigation, other farm sectors will likely think twice about trying to lim- it production, Carstensen said. “My advice would be, ‘Don’t do it.’” 30-4/#6