December 11, 2015
CapitalPress.com
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Dairy/Livestock
USDEC predicts another tough year for dairy
By CAROL RYAN DUMAS
Capital Press
The U.S. Dairy Export
Council predicts global dairy
markets will be difficult for
producers in 2016.
“That pendulum between
supply and demand has way
over shot on the side of sur-
plus. It’s going to swing back
again the other way — the
only question is how long
it’s going to take,” Alan Lev-
itt, USDEC vice president of
communications and market
analysis, said during US-
DEC’s market outlook webi-
nar on Dec. 1.
China’s growing appetite
for dairy had driven a 2 per-
cent per year increase in milk
production from the top five
producing regions — New
Zealand, the U.S., European
Union, Australia and Argenti-
na — since 2010.
But even when that de-
mand bubble burst in mid-
2014, milk production growth
continued — almost oblivious
to the demand drop-off, he
said.
In the 12 months prior to
the sharp decline, China im-
ported 14 million tons of milk
equivalent. Over the next 12
Carol Ryan Dumas/Capital Press
A cow gets up close and personal during a United Dairymen of Idaho tour of the Brubaker Family’s
Knott Run Dairy in Buhl, Idaho. Analysts at the U.S. Dairy Export Council say lower margins in the
second quarter of 2016 should begin needed production contraction to rein in global milk supply.
months, that dropped to 9.5
million tons, down by about
one-third, he said.
Russia’s ban on dairy im-
ports about the same time ex-
acerbated the problem. China
and Russia combined went
from importing at a pace of
18 million tons milk equiva-
lent for the year ending July
2014 to about 10 million tons
today — a staggering decline,
he said.
“You had essentially 8 mil-
lion tons of milk on the world
market looking for a new
home … about 11 percent of
world imports essentially van-
ished,” he said.
To make it more problem-
atic, milk production contin-
ued to grow even as imports
from major suppliers crashed.
In the 12 months ending Oc-
tober 2015, milk production
from the top 5 suppliers was
still up about 3.5 million
tons year over year. During
the same period, imports by
China and Russia were down
more than 6 million tons, he
said.
Even though there’s been
some adjustments in supply
and demand, that’s still an
extra 10 million pounds of
milk, almost 1 million tons a
month, that the market has re-
ally struggled to fully absorb,
he said.
“We don’t really expect
that gap … to narrow much
in 2016. Milk production
growth certainly is starting
to flatten out, but suppliers
are still pushing the quantity
that matches the booming lev-
els of 2014, and that import
demand just isn’t there any-
more,” he said.
Production just isn’t pull-
ing back quickly enough to ac-
count for the drop in demand.
Milk production from the top
5 suppliers is still expected be
up close to 1 percent in the
fourth quarter, about half the
five-year average, but it’s still
more than the market needs,
he said.
Most of the production
gains this year have come
from Europe, which contin-
ues to expand, particularly
Ireland and the Netherlands.
Production in those two coun-
tries was up 10 percent since
April, when quotas came off,
he said.
Production in the rest of
the world has slowed quite a
bit, but Europe’s production is
raging ahead, he said.
Global milk production is
expected slightly lower in the
first half of 2016, particularly
in the second quarter, when
lower margins begin to have
an impact on the farm, he said.
But product inventory is
going to remain a “problem
child” in 2016. There are
heavy inventories in Europe
and the U.S. and also in users’
hands throughout the world,
he said.
While imports in most
places other than China and
Russia did really well in 2015,
it wasn’t enough to fill the
huge hole left by those major
importers, he said.
And much of that stronger
demand was buying forward
to take advantage of favorable
prices, which will diminish
demand in the months ahead,
he said.
Powder, cheese and butter
stocks in the EU are 230,000
tons more than the desired lev-
el, and stocks of those prod-
ucts in the U.S. are 100,000
tons higher that a typical year,
he said.
“All this product from both
Europe and the United States
is going to have to come back
on the market, and that’s just
going to delay the market
recovery even after current
supply and current demand
realign,” he said.
Ranchers back transparency Website seeks to correct chicken
bill for legal fee reimbursement production misconceptions
By TIM HEARDEN
By JOHN O’CONNELL
Capital Press
Capital Press
FORT HALL, Idaho — An
organization formed by Idaho
and Nevada cattle industry
leaders is backing federal leg-
islation to improve transpar-
ency of taxpayer-funded legal
fee reimbursements to plain-
tiffs who successfully sue the
federal government under the
Equal Access to Justice Act.
The ranchers believe the
legislation is needed to shed
light on a continuing trend of
“outrageous” legal fees paid
for environmental litigation,
which they consider inconsis-
tent with the original intent of
the act. The law was created in
1980 to repay legal fees when
court action against the federal
government is “substantially
justified.”
The Equal Access to Justice
Act changes — included in
Section 108 of the Sportsmen’s
Act of 2015 (S. 405) — would
require a report to be made
available online detailing fees,
awards and payments provided
under the act, along with infor-
mation about each case.
The Sportsmen’s Act passed
out of the Senate Committee on
Energy and Natural Resources
on Nov. 19. A standalone Equal
Access transparency bill, HR
3279, also passed the House
of Representatives on Nov. 30
and will be moving on to the
Senate.
A group of cattle associa-
tion leaders, including six past
Idaho and Nevada presidents,
The National Chicken
Council has launched an on-
line campaign to combat what
it calls widespread misconcep-
tions among consumers that
broiler chickens are injected
with hormones and steroids.
A recent survey conducted
by the council found that 77
percent of Americans believe
chickens raised and sold in the
U.S. contain those additives,
when in fact none do, the group
contends.
In response, the council is
stepping up its dialogue with
consumers on social media and
has launched Chicken Check
In, a website that answers ques-
tions about chicken production
in the United States.
The group is also encour-
aging producers to engage in
more discussions with consum-
ers about where their chicken
comes from.
“Folks in general have a lot
of misperceptions about mod-
ern agriculture and animal ag-
riculture,” council spokesman
Tom Super said. “There’s so
much conflicting information
out there on the Internet and so-
cial media, and too many times
people are taking what they
read on the Internet and think-
ing it’s true.
“We’ve been trying to
move the industry toward
being transparent,” he said,
adding that the group has fa-
cilitated tours of facilities for
John O’Connell/Capital Press
Idaho rancher Jennifer Ellis speaks about the Equal Access to
Justice law Dec. 1 during Idaho Farm Bureau Federation’s annual
meeting in Fort Hall.
formed Western Legacy, largely
to research and reform the act.
Jennifer Ellis, an Eastern
Idaho rancher who was among
the founding members, said
there was no single source of
information about the cost of
the act to taxpayers. But through
exhaustive research, the organi-
zation eventually tabulated the
federal government had spent
more than $4.7 billion from its
Judgment Fund to repay legal
fees for successful suits against
the government between 2003
and July 2007.
“Since 1985, environmental
litigation has really ramped up,
and we’re on the receiving end
of it,” Ellis said.
Since 2010, Ellis said, West-
ern Legacy has made five at-
tempts to get its transparency
language approved. She believes
this time will be successful.
“The government is going
to have to do the research into
these expenditures to see if
they’re OK with it, and I don’t
think they will be,” Ellis said.
Sen. Jim Risch, R-Idaho, is
a co-sponsor of the Sportsmen’s
Act, and his press secretary said
he supported the Equal Access
language in the current bill, as
well as past reform efforts to
“ensure the original intent of this
act is not being exploited.”
Ethan Lane, executive direc-
tor of the Public Lands Council,
believes the transparency lan-
guage is just the first step toward
providing relief for federal agen-
cies that are “not functioning
properly because they’re spend-
ing all of their time and resourc-
es on frivolous litigation.”
Courtesy of Agricultural Research Service
Broiler chickens mill around in
a barn. The National Chicken
Council has started a campaign
to combat what it says are mis-
conceptions among consumers
that broiler chickens are injected
with hormones and steroids.
reporters and food bloggers.
Among the survey’s find-
ings, 78 percent of respondents
said they believed chickens are
genetically modified, 73 percent
believe antibiotics are present in
most chicken meat and 68 per-
cent think most chickens raised
for meat are kept in cages, ac-
cording to the council.
In reality, the majority of
broiler chickens live in large,
open structures and there are no
genetically modified chickens,
although chickens with the best
growth and size have been se-
lected for breeding, the council
asserts.
The industry has been
phasing out all but the most
critical uses of antibiotics in
its flocks as McDonald’s and
other food-service companies
as well as school districts have
begun to set policies against
their use.
New Food and Drug Ad-
ministration guidelines issued
in December 2013 have ef-
fectively eliminated use of the
drugs for growth promotion or
feed efficiency in all livestock.
Ionophores, a class of antibiot-
ics not used by humans, could
still be fed to birds to keep them
healthy.
The NCC’s Chicken Check
In website — www.chicken-
check.in — includes videos and
a “frequently asked questions”
section to give consumers a
closer look at how chickens are
raised, from the farm to grocery
store shelves.
“We wanted to have some-
thing ... digitally that folks could
go to to put themselves behind
the barn door and see for them-
selves,” Super said. “We wanted
it to be factual and unemotional,
to let people read for themselves
and make up their own minds.”
Dairy market prices mixed
By LEE MIELKE
For the Capital Press
T
he cash dairy markets
started December mixed
— or perhaps “mixed
up.”
The
Cheddar
blocks
fell to $1.5250 per pound
last Wednesday, regained 2
3/4s-cents Thursday, and then
dropped 3 1/2 Friday, to close
at $1.5175, the lowest price
since Jan. 29, down 6 1/4-cents
on the week and 6 1/4-cents
below a year ago. They were
down 2 1/4-cents Monday but
inched up a half-cent Tuesday,
closing the day at $1.50.
The barrels fell to $1.4950
last Wednesday, gained back
1 3/4-cents Thursday, but lost
2 3/4-cents Friday, closing at
$1.4850, down 6 1/2-cents on
the week and 6 1/2-cents be-
low a year ago. They rolled a
penny and a half lower Mon-
day but jumped 3 cents Tues-
day to hit $1.50.
Sixteen cars of block were
traded last week at the CME
and 13 of barrel.
Dairy Market News says,
“While cheese inventories
are generally comfortable,
the longstanding experience
Dairy
Markets
Lee Mielke
of strong seasonal sales into
January still resonates with
manufacturers and factors into
current production. It will be-
come more clear in the coming
weeks whether that is true this
year, or whether late year de-
mand was pulled earlier in the
year leaving retail and food
service therefore less in need
of cheese in December and
January.”
Export demand is light,
DMN says, except to Mexico,
which has remained active.
Western cheese makers con-
tinue to see good domestic re-
tail and food service demand.
Cheddar production is report-
ed by some to be overwhelm-
ing demand.
Manufacturers are con-
cerned that weak international
sales, generally lighter demand
for process cheese and increas-
es in imported milk solids used
in process cheese production
may push cheese prices down-
ward.
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