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.