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14 CapitalPress.com August 19, 2016 Washington producers see higher fees By JANAE SARGENT Capital Press Small raw goat milk pro- cessor Martha Horel was not prepared to read a letter an- nouncing that her milk-pro- cessing license would be raised $195 when she checked the mail April 6. The Washington State Department of Agriculture announced several food pro- cessing license fees would increase in 2016 to offset de- partment operating costs. The fee increases were a part of a bill passed by the Legislature in 2015. Food and dairy pro- cessors were sent notices in April. For Horel, who milks 20 goats in a small raw-milk op- eration, the increase from $55 to $250 was more than she could afford. “When you’re only mak- ing $8 a gallon and they want $250 a year, it’s impossible USDA projects Russia as top wheat exporter By MATTHEW WEAVER Capital Press The USDA predicts that Russia will become the world’s largest wheat exporter this year, but the impact on U.S. overseas sales will be minimal, a U.S. Wheat Associates ofi- cial says The reasons: Russia and the U.S. produce different types of wheat and target different mar- kets, said Vince Peterson, U.S. Wheat vice president of over- seas operations. The USDA Foreign Agri- cultural Service projects Russia will ship a record 30 million metric tons of wheat for the 2016-2017 year. The European Union and the U.S. will ship about 27 million and 25 million metric tons, re- spectively. Vince Russia main- Peterson ly sells its wheat to the Middle East and North Africa. The U.S. sold wheat there in the 1980s, but today sells only small quan- tities to those regions. U.S. wheat goes to markets that have “more demanding” speciications, Peterson said. U.S. customers include the Asian Paciic region, Latin America and South America. “We’re actually selling our wheat at quite signiicant pre- miums than this Russian-Black Sea wheat going into the less sophisticated (countries) in terms of product need,” Pe- terson said. “Flatbreads in the Middle East and North Africa don’t take anything real sophis- ticated to produce.” Russian wheat is also cheap- er, he said. Last week, Russian wheat sold at roughly $165 per ton, while soft white winter wheat from the Paciic Northwest sold for roughly $205 per ton. Peterson said that equates to a premium of more than a dollar per bushel. Most Russian wheat is equivalent to low-protein hard red winter wheat, Peterson said. “They’re still selling low- er-end bread wheats at low- er-end bread wheat prices,” he said. Peterson doesn’t see much risk that Russian wheat will replace U.S. wheat in the mar- ketplace. Russia has a record crop this year, he said. With the largest land mass of any nation, Rus- sia’s wheat production has been growing since it entered the international market 15 years ago. “(Russia) is a very import- ant component of world trade any more, but the whole pie has gotten so big that it almost washes out any individual country because the total de- mand is so big anymore,” he said. to make a living,” Horel said. “How am I going to pay for that?” Horel put the $250 on a credit card and said she is struggling to pay it off. The deadline to pay the new license fees was July 1. Hector Castro, communi- cations director for the Wash- ington State Department of Agriculture, said the agency has been receiving complaints from processors since the let- ters were sent out. “We are hearing calls from folks who aren’t happy about having to pay a higher fee and we totally get that,” Castro said. “We were directed by the state Legislature and we tried to work with partners to get ideas about appropriate in- creases.” Rep. Zack Hudgins, the Democrat sponsor of the bill that included the raised fees, said the conversation about re-evaluating the fees began during the budget crisis after the 2008 recession. Hudgins said the state made signiicant cuts across the state budget. Castro said the Legislature directed the agency to review fees to ensure they were more closely meeting costs of ser- vices in 2013. To ensure fees were raised fairly, the Washington Depart- ment of Agriculture estab- lished a work group made up of representatives from sev- eral commodity groups and the Washington State Farm Bureau. The group decided to focus on raising fees that were par- tially funded by the Washing- ton State General Fund and partially funded by licensing fees. William J. Gordon, Wash- ington State Dairy Federation director of policy and govern- ment affairs, sat on the work group and said signiicant ef- fort was put in to ensure the fee adjustments relected the expenses to manage the food safety programs. The work group spent more than two years debating how the fees should be adjust- ed. Gordon said the members decided to focus on food pro- cessing and food safety be- cause they were the most ex- pensive programs to maintain. “We have a lot of small- scale food production, which is a good thing and we want to do our best to support those but the cost the department had in maintaining those pro- ductions was way out of line with what the fees were,” Gordon said.” Castro added that the fees that saw increases had not been increased in 10 to 20 years and no longer relected the cost of operating the food safety program. The milk processing li- cense saw the most signif- icant fee increase but food processing annual fees, food storage warehouse fees, dairy technician licenses and sani- tary certiicate fees were also increased. According to the work group report, the increased fees would create approxi- mately $262,500 in revenue each year. The 2013-2015 budget funding for the Food Safe- ty Program reported that the state department provided 64 percent of the program funding and agricultural fund fees provided 36 percent of the program funding. Castro said the igure is comparable to neighboring states, except Oregon — which is entirely funded by fees. Gordon said the group ex- pected raw dairies and home- stead cheese makers to have the most dificulty with the increase but that the group did its best to balance the fees with what the agency needed. Value of Idaho ag exports down 19 percent in irst half of 2016 By SEAN ELLIS Capital Press BOISE — Idaho agricul- tural exports set a record for total value in 2014, but they have been on a steady decline since. Through the irst half of 2016, the value of Idaho farm exports totaled $351 million, down 19.5 percent from the $437 million total during the same period of 2015. They were down 39 per- cent compared with the same period in 2014, when Idaho farm exports set a record of $1.02 billion for the year, ac- cording to the Idaho State De- partment of Agriculture. The decrease didn’t sur- prise University of Idaho ag- ricultural economist Garth Taylor, who said Russia’s boycott of some European Union commodities as well as a stronger U.S. dollar are hav- ing a major impact on demand and prices. “The dollar continues to be stronger and the world is awash in commodities,” he said. “EU produce, dairy products and other commod- ities (barred from Russia) are looking for a home in the world market and it’s driving down prices.” A steep decline in the total value of dairy products ex- ported is a major reason Idaho ag export values have plum- meted. A total of $56 million worth of Idaho dairy products were exported from January through June, a 57 percent Sean Ellis/Capital Press A mint ield is harvested near Greenleaf, Idaho, in this June 28 photo. The total value of Idaho farm exports was down 19 percent during the irst half of 2016 compared with the same period in 2015. decline from 2015 and 73 per- cent decrease from 2014. Dairy was the state’s lead- ing farm export when Idaho export values reached record levels for four straight years through 2014 but they only ranked third during the irst half of 2016. Gem State farm exports under the “miscellaneous grain and seed” category to- taled $73 million during the irst six months of 2016, an increase of 10 percent from 2015. The “vegetables” cat- egory was second with $63 million in sales, an 11 percent decline from last year. Doug Robison, Northwest Farm Credit Service’s senior vice president for Western Idaho, told Capital Press in an email that the U.S. dairy industry has been hit by a perfect storm of events since 2014, including “a strength- ening U.S. dollar, the elim- ination of milk production quotas in the European Union, Russian sanctions reducing or eliminating their import of dairy products, slowing growth from China and other emerging markets and contin- ued increases in milk produc- tion in the U.S.” “The strong dollar story continues with other ag com- modities as well and has ad- versely impacted values and export demand for beef, hay and grains from Idaho,” Rob- ison added. He said that based on re- search by the Federal Reserve, “it takes about three years for the impact of a 10 percent in- crease in the value of the dol- lar to work its way through the system in the form of di- minished export values and demand.” The U.S. dollar is up more than 18 percent since January 2014, so “even if the U.S. dollar remains flat, it will take another year or two for the full effect of this dol- lar strength to play out in the form of diminished export values for Idaho products,” Robison said. Dairy its well in sustainable dietary guidelines Perception and fact By CAROL RYAN DUMAS Capital Press SUN VALLEY, Idaho — There isn’t enough research on food sustainability to de- velop dietary guidelines for it, but they are inevitable, and the dairy industry needs to be involved in the discussion, an industry expert says. “It’s probably one of the most important issues facing our industry in the next ive years,” said Greg Miller, chief science oficer for the Nation- al Dairy Council, during the Idaho Milk Processors Asso- ciation’s annual convention last week. “Dr. Dairy” as he’s known in the industry, Miller said three pillars — environmen- tal, economic and social — form the foundation for sustainability goals, and nutri- ent-rich dairy its in the sweet spot of all three objectives. The issue is a hot topic due to a growing world pop- ulation, expected to reach 9.5 billion by 2050. A lot of that growth will be in developing countries, which is where dairy exports it in. Food pro- duction will need to increase 70 percent with shrinking re- sources, he said. Global dairy demand, ex- cluding butter, is expected to reach 2 trillion pounds of milk equivalent, so innova- tion and new technology are Carol Ryan Dumas/Capital Press Gregory Miller, also known as “Dr. Dairy,” talks about the increasing pressure worldwide to establish guidelines for sustainability during the Idaho Milk Processors Association’s annual convention in Sun Valley on Aug. 11. needed, he said. “We need consumers to understand that technology and how it allows us to pro- duce more food and more nu- tritious food,” he said. The dairy industry has seen continuous improve- ments in the eficiency of milk production over the last 70 years. Today’s gallon of milk is produced with 90 per- cent less land and 60 percent less water than in 1944, while producing 75 percent less ma- nure with a 63 percent smaller carbon footprint. Milk per cow has increased from about 5,000 pounds a year to 20,000 pounds, he said. Dairy farmers are already doing a good job trying to keep the environmental foot- print as small as possible, he said. But that doesn’t stop the detractors — who claim dairy production is ineficient due to the amount of feed needed and that people can get the same nutrients from plants, he said. “The reality is most of the cow feed is roughage that people can’t eat,” he said. And cows are great recy- clers, converting byproducts of human food — such as al- mond shells and orange peels, which would end up in land- ills — into milk, he said. On the nutrient front, rec- ommended dairy substitutes aren’t practical and aren’t widely consumed. Someone would have to eat 36 1/2 cups of kale to get the same amount of calcium found in the rec- ommended three servings of dairy daily, he said. Replacing the nutrients in dairy would demand too many calories or be too large an amount to consume, and it would cost more money, he said. Affordability is another factor in the sustainability goals, and dairy costs less per serving than meat, poultry, ish, fruit and vegetables, he said. Health and healthcare costs are also factors, and dairy consumption has a positive effect on both. Non-commu- nicable, preventable diseases are responsible for three out of five deaths worldwide. Scientific evidence shows consuming dairy improves bone health and reduces the risk of cardiovascular dis- ease, type 2 diabetes and high blood pressure, he said. A 2004 study by the Na- tional Dairy Council found that if Americans consumed three to four servings of dairy a day, it would reduce healthcare costs by $214 bil- lion over five years. Another study by Dairy Australian estimated the cost of direct healthcare at- tributable to low dairy con- sumption in 2010-2011 in that nation was $2.1 billion, he said. Most research on agricul- tural sustainability has been aimed at the carbon foot- print, and a lot more needs to be done on the other aspects of sustainability to have sci- ence-based dietary guide- lines. But such guidelines are coming, and the dairy in- dustry needs to be telling its story of sustainability and educating consumers on the economic and social benefits of nutrient-rich dairy prod- ucts, he said. Calif. wine industry’s economic impact growing By TIM HEARDEN Capital Press SACRAMENTO — The California wine industry’s contributions to the state and national economies have grown signiicantly over the last few years, a study by a pair of industry groups has found. The wine and winegrape sector and related businesses contribute $57.6 billion annual- ly to the state’s economy, up 17 percent from seven years ago, and $114.1 billion annually to the U.S. economy, a rise of 19 percent over the same period. These were the key indings of a report commissioned by the Sacramento-based Califor- nia Association of Winegrape Growers and the San Francis- co-based Wine Institute, which credits wineries and vineyards in the Golden State with cre- ating 325,000 jobs within the state and 786,000 jobs across the nation. The report, “The Economic Impact of California Wine and Grapes 2015,” was prepared by John Dunham and Associates of New York and presented recently to state legislators at an informational hearing at the University of California-Davis. The study continues a trend in which wine has grown in sales and popularity despite the recession and slow economic recovery, proving the com- modity is “an economic engine for our nation,” asserted Bob- by Koch, the Wine Institute’s president and chief executive oficer. The industry has also weath- ered California’s ive-year drought, although wine grapes are more drought-tolerant than many other crops. The industry’s growth in value relects a continuing movement by consumers to- ward more premium wines, said Gladys Horiuchi, the Wine Institute’s spokeswom- an. “People are drinking more higher-value wines,” Horiuchi said. Moreover, “I think wine has gained a lot of traction as far as being more of a main- stream beverage at meals,” she said. California Association of Winegrape Growers president John Aguirre said in a state- ment that tasting rooms in the wine country attracted nearly 24 million tourist visits last year, and “the commitment of California growers and vint- ners to sustainable practices” supports 325,000 jobs while also providing “important so- cial and environmental bene- its.” The report measures eco- nomic impact in terms of em- ployment, wages, taxes, tour- ism spending and visits, and charitable giving, according to a news release. It includes businesses that beneit directly and indirectly from wine pro- duction and sales. In addition to sales and jobs, the study found the state’s wine industry paid $15.2 bil- lion in state and federal taxes in 2015 and averages $249 million annually in charitable contributions. The increases came despite a 10 percent drop in the average price of all grape varieties in California in 2015, to $671.31 per ton, according to the Na- tional Agricultural Statistics Service. However, grapes from the state’s most famous regions went up in price, by 6 percent in Napa County to $4,336 per ton and by 5 percent in Sonoma and Marin counties to $2,443, the agency report- ed. Koch noted in a statement that California’s wine indus- try is gaining ground even as the strong dollar and pressure from imports make the U.S. the most competitive wine market in the world, and the industry continues to face the threat of increased taxes and regulation. The CAWG and Wine In- stitute are both public policy advocates for the wine indus- try.