Capital press., April 08, 2016, Page 11, Image 11

April 8, 2016
CapitalPress.com
Dairy/Livestock
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CDFA to reconsider whey value in milk pricing
By CAROL RYAN DUMAS
Capital Press
Dairymen are hoping the
whey value in California’s
price formula for milk to make
cheese increases to be more
in line with its value in Class
III pricing formulas in federal
milk marketing orders.
After years of petitioning
the California Department of
Food and Agriculture to make
the state’s pricing more equi-
table with cheese milk pricing
around the country, the agency
closed the gap somewhat last
year with a temporary increase
in the whey value.
With that temporary mea-
sure due to expire on July 31,
CDFA Secretary Kathryn Ross
has called an industry meeting
for April 11 to consider an ex-
tension and consider alterna-
tive proposals.
With the majority of the
state’s milk used for cheese
manufacturing, it’s important
for Class 4b pricing to more
closely track federal orders,
said Lynne McBride, exec-
utive director of California
Dairy Campaign.
While dairymen appreciate
Ross increasing the whey val-
ue last year, it had little effect
due to a depressed whey mar-
ket, and it didn’t help stem the
tide of dairymen exiting the
business or declines in milk
production, she said.
But it’s important to contin-
ue working to close the whey
value gap to capture that value
when the market recovers, she
said.
“Dairymen continue to go
out of business. They don’t see
a lot of promise here in Cali-
fornia given the low milk pric-
es seen the past year,” she said.
11
Gebbers family copes with
two years of wildfire losses
By DAN WHEAT
Capital Press
Capital Press file
Cows feed in the sunshine at this dairy. The California Department
of Food and Agriculture has set a meeting for April 11 on milk
pricing.
Cost of production is more
than $19 per hundredweight
of milk and the overbase
milk price is about $13. Pric-
es reached record highs in
2014, but they didn’t last long
enough to make up for the
losses dairymen had continued
to see since 2008-2009, she
said.
According to CDFA, 32
dairies went out of business in
2015.
“That’s a strong indication
the industry is still under great
distress,” she said.
Since the bust in 2008, 414
dairies have left the business.
Much of that can be tied to
the state undervaluing whey
in 4b pricing, she said. The
monthly gap between Class
III prices and 4b prices (which
began widening significantly
in 2010) was as much as $3.25
per hundredweight, although
it’s about $0.75 now, she said.
Ross temporarily increased
the cap on the whey value
from $0.75 to $2.005 per hun-
dredweight last August, higher
than the $1.25 cap proposed by
processors but only about half
of dairymen’s proposal of $4.
The Dairy Campaign, Milk
Producers Council and West-
ern United Dairymen have
again proposed a $4 cap in the
whey scale, calling for a per-
manent change.
Dairy
co-ops
Land
O’Lakes, Dairy Farmers of
America and California Dair-
ies Inc. are backing that pro-
posal, McBride said.
“In our view, the only long-
term way to fix the problem,
when we routinely have some
of the lowest mailbox prices in
the country, is joining the fed-
eral order system,” she said.
That is in the works but un-
til then, it’s critical that every
step be taken to close the pric-
ing gap, she said.
The Dairy Institute of Cal-
ifornia, representing proces-
sors, has proposed a cap of
$1.50 and basing the value on
whey protein concentrate — as
opposed to dry whey, which is
currently used in CDFA and
federal order formulas. It also
requested that the temporary
change not exceed a term of
six months.
BREWSTER, Wash. —
The head of one of the largest
cattle operations in Okanogan
County credits government
programs for helping it sur-
vive the devastating wildfires
of the past two summers.
The Gebbers family owns
a cattle company, a land and
timber company, one of the
state’s largest tree fruit or-
chard and packing operations
and a golf resort.
Family financial losses
from the 2014 Carlton Com-
plex fire ranged from $15.4
million to $17.8 million, Cass
Gebbers, president and CEO
of Gebbers Farms and vice
president of Gamble Land &
Timber, told Capital Press last
July. A lot of that was the loss
of about 30 million board feet
of timber and a reduction in
value of the family’s timber
land.
They also lost 326 mother
cows, calves, yearlings and
bulls in the fire with 25 to
50 percent of that $700,000
to $800,000 loss covered by
USDA Farm Service Agency
indemnification. They sold
1,000 head of cattle to bring
their herd down to a more
manageable 3,500 to 3,800
head because of the loss of
grazing land.
Even with that, the family
trucked about 1,300 mother
cows and yearlings, plus calves
to various grazing grounds
throughout Central Washing-
ton as far away as Oroville,
Curlew and Benton City.
Dan Wheat/Capital Press
Cass Gebbers, president and CEO of Gebbers Farms, shows hog
fuel, one of many products made from timber salvaged from the
Carlton fire in his log sorting yard northwest of Brewster, Wash., on
July 9, 2015.
Emergency use of USDA
Conservation Reserve Pro-
gram land for grazing “has
been a life saver. Without it,
we probably would have sold
most of our cattle and laid off
people,” Gebbers said.
The family lost 135 miles
of cattle fencing estimated
at $2.7 million to replace at
$20,000 per mile. Govern-
ment programs will help with
that.
In August, the second sum-
mer of fires extended the toll.
“We, our employees and
our family members, lost al-
most all of our remaining
DNR (state Department of
Natural Resources) grazing
permit ranges and another
chunk of private pasture and
timber that didn’t burn in the
2014 Carlton fire,” Gebbers
said recently.
More fencing, watering
structures and 108 cattle were
lost in the 2015 Okanogan
fire, he said. As a result, 400
bred cows had to be sold for
lack of pasture.
“These cows came right
from the heart of our herd so
it’s that much more difficult
to see them go when we have
spent many years developing
(through genetics) the kind of
cattle that fit our dry, rugged
environment,” Gebbers said.
Yet it was the right thing
to allow burned rangeland to
recover, he said.
“We really had to make
tough decisions about buying
additional, high-priced feed
versus selling down the herd
in order to keep going for-
ward. Without the assistance
of FSA and NRCS (Natu-
ral Resources Conservation
Service) regarding the CRP
grazing program and fence re-
building program along with a
partial offset for the burned up
cattle, there would have been
no way to forge ahead with
these kind of losses,” Gebbers
said.
Dairy prices still mixed
By LEE MIELKE
C
ME cash dairy product
prices saw little change
the last week of March
as traders anticipated the April
5 Global Dairy Trade auction.
Cheddar block cheese
closed Friday, April Fool’s
Day, at $1.47 per pound,
down 2 cents on the week and
11 cents below a year ago.
The Cheddar barrels fin-
ished at $1.4550, up a half-
cent on the week but 14 cents
below a year ago. Seven cars
of block were traded on the
week at the CME and 11 of
barrel.
The blocks gave up 2 cents
Monday but were unchanged
Tuesday, holding at $1.45 per
pound. The barrels slipped
three-quarters cent Monday
and lost a half-cent Tuesday,
slipping to $1.4425.
Midwest cheese-makers
say production is at or near full
capacity, reports Dairy Market
News. Some processors are
trying to sell excess loads of
milk to ease the pressure, with
a few manufacturers willing to
take it at $2 to $3 under class.
Spot butter shot up early
last week, jumping 2 3/4-cents
Tuesday, and closed Friday
at $1.96, 3 3/4-cents higher
on the week, reversing three
weeks of decline, and 22 cents
above a year ago. Fifteen cars
were sold last week.
The Monday butter was un-
changed but Tuesday’s trading
pushed it 4 1/4-cents higher, to
$2.0025 per pound.
DMN says, “Cream avail-
Dairy
Markets
Lee Mielke
ability in the Central region is
steady to higher as increasing
milk volumes clear to bottling
to meet orders from education-
al institutions reconvening af-
ter the mid-semester break.
Cash Grade A nonfat dry
milk finished three-quarter
cents lower Friday, closing at
71 3/4-cents per pound, 25
3/4-cents below a year ago,
with eight carloads trading
hands on the week. The pow-
der was steady Monday and
Tuesday.
GDT up 1.2 percent
The April 5 Global Dairy
Trade auction crept higher,
reversing the previous event’s
fall. The weighted average for
all products offered inched up
1.2 percent, following a 2.9
percent drop on March 15.
Only two products offered
this week showed declines.
Buttermilk powder was down
8.2 percent, after leading the
gains last time at 6.4 percent.
Butter was down 2.0 percent,
after dropping 2.8 percent last
time.
Rennet casein led Tues-
day’s gains, up 11.8 percent,
after leading the losses last
time by 7.0 percent. GDT
Cheddar was next, up 10.5
percent, after dropping 5.6
percent last time. Anhydrous
milkfat followed, up 6.7 per-
cent, after dropping 6.5 per-
cent last time.
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