16 CapitalPress.com
April 7, 2017
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Dairy/Livestock
U.S. dairymen could face trade challenges
By CAROL RYAN DUMAS
Price outlook for U.S. dairy (Dollars per pound)
Capital Press
Item
A sharp fall in global milk
production in the second half
of 2016 allowed U.S. exports
to fill a large supply gap,
increasing U.S. exports 25
percent year over year in the
second half of 2016 despite
a strengthening dollar and
strong domestic demand.
But milk production is
picking up in other export-
ing countries, driven by a
rally in prices due to the
decreasing global export
surplus. That rally has run
its course, but it set in mo-
tion global milk-production
recovery against still weak
demand, according to Rabo-
bank analysts.
Those factors, as well as
several others, could chal-
lenge U.S. exports in the
future, the analysts stated in
their latest dairy quarterly
report.
While most of the world’s
NFDM*
AA butter
Q3 2016 Q4 ’16 Q1 ’17 Q2 ’17 Q3 ’17 Q4 ’17 Q1 ’18
$0.85
0.92
0.97
0.87
0.90
2.22
1.92
2.21
2.14
2.15
1.95
2.05
1.70
1.68
1.59
1.59
1.63
1.63
Whey powder
0.35
0.48
0.46
0.41
0.39
0.41
0.29
Milk prices (Dollars per hundredweight)
Capital Press File
American dairy producers benefited from a global drop in supply last
year, but milk production is picking up now in other exporting countries.
milk supply contracted in
2016, strong exports and
domestic demand, cheap
feed and favorable weather
pushed U.S. milk production
up 1.5 percent. That trend
has continued in 2017, with
February production up 2.3
percent year over year.
But U.S. consumption
growth, which has driven the
market since the second half
of 2014, might be faltering
— with some excess prod-
ucts being pushed into ware-
houses. A drop in the value
of the peso has also reduced
U.S. exports to Mexico, the
top market for U.S. exports.
But there could be even
more trade challenges ahead,
the analysts stated.
Item
Q3 2016 Q4 ’16 Q1 ’17 Q2 ’17 Q3 ’17 Q4 ’17 Q1 ’18
Class III
$16.08
17.06
16.83
16.01
15.66
15.89
16.05
Class IV
14.75
13.88
15.89
13.90
14.57
13.55
14.28
NOTE: Q4 2016 through Q1 2018 prices estimated or forecast. *Non-fat dry milk
Sources: USDA; Rabobank
“The U.S. withdrawal
from (the Trans-Pacific Part-
nership) which was gener-
ally seen as beneficial to the
U.S. dairy sector, and talks of
NAFTA renegotiations have
generated significant unease
in the dairy community,” they
said.
Of the approximately 15
percent of U.S. dairy pro-
duction exported, 55 percent
By GEOFF PARKS
For the Capital Press
Capital Press graphic
goes to partners included in
TPP. In terms of NAFTA, 26
percent of U.S. exports go
to Mexico and 13 percent to
Canada.
Mexico has already
sought to steer imports away
from the U.S., resulting in
a 10 percent increase in EU
dairy exports to Mexico in
the three months up to Janu-
ary, the analysts said.
Washington AG says
What’s Upstream didn’t
need to report lobbying
Farm group mulls
scope of complaint
By DON JENKINS
Capital Press
Geoff Parks/For the Capital Press
Oregon Dairy Princess Ambassador First Alternate Kortni Ragsdale and Oregon Dairy Princess Am-
bassador Kiara Single join in a toast to Oregon Dairy Day at the Capitol with Senate President Peter
Courtney.
visitors and staff, but also a
reminder to legislators to be
aware of the impact of bills
they are considering have on
the lives of dairy producers
and family farms.
“We want to make sure
that our producers can come
in and share information (with
legislators) about their farms
and how various measures
will positively or negatively
impact their businesses,” she
said.
One measure important to
the dairy industry is Senate
Bill 197, “which is about air
quality and only targets the
dairy industry,” Kerr said.
The bill would require mon-
itoring and regulation of the
air quality at dairy opera-
tions.
“It’s still in the Senate En-
ergy Committee right now,”
Dennee said. “Fortunately,
it is not moving out of com-
mittee right now, which is a
very good sign for us because
we feel our industry has
done a great deal to be very
progressive and responsive”
by following voluntary best
practices.
More than 55 pounds of
cheese, 400 servings of milk,
25 servings of yogurt and 40
gallons of ice cream were
served during the event.
Dennee said the event
raises awareness of the dairy
industry and helps the public
learn about the way the 228
dairy farm families in Oregon
manage their 125,000 cows.
Ecology shift clears path for Washington feedlot dust bill
By DON JENKINS
Capital Press
OLYMPIA — The Wash-
ington Department of Ecol-
ogy has shifted from con to
neutral on a bill laying out
how the agency will regulate
dust at feedlots.
Ecology’s relaxed position
improves the outlook for leg-
islation championed by the
Washington Cattle Feeders
Association.
“I think we have a very
good chance of getting the
bill to the governor’s desk
and having Gov. (Jay) Inslee
sign it,” Cattle Feeders’ exec-
utive director, Jack Field, said
Monday.
Under Senate Bill 5196,
feedlots that use approved
dust-control measures won’t
fall under the state Clean Air
Act unless Ecology shows the
lot’s dust seriously harmed
public health. Most agricul-
tural activities already have
such an exemption.
The bill has passed the
Republican-led Senate. More
significantly, it won unani-
0.89
Block cheddar 1.70
Dairy has its day at Oregon Capitol
SALEM — Dairy Day at
the Oregon Capitol last week
offered generous portions of
dairy products — along with
continued educational and
lobbying efforts on legislative
measures important to the in-
dustry.
Three FFA chapters, mem-
bers of the Oregon Dairy Prin-
cess Ambassador program,
Oregon State University Dairy
Club members and others
pitched in to help distribute
information and treats in the
Capitol Galleria.
But the main purpose of the
event was to give a higher pro-
file to measures currently be-
ing debated in the Legislature
— about 350 of them that are
important to the dairy indus-
try, said Tammy Dennee, leg-
islative director of the Oregon
Dairy Farmers Association.
March 26 through April 1 is
Oregon Ag Week, and this year
is “the 20th anniversary of the
designation of milk as the offi-
cial beverage of Oregon,” said
Tami Kerr, executive director
of the association. A toast to
that milestone was held in the
Galleria to mark the occasion.
The event was created to
be fun and informational for
0.81
“Risk for the U.S. to lose
further share of Mexico and
TPP buyers could potential-
ly cause problems for U.S.
dairy producers, creating
downward pressure on U.S.
product prices,” they stated.
They expect declines in
U.S. dairy commodity prices
to push many producers into
negative margins, resulting in
a slowing of milk production
growth – from 1.6 percent in
2016 to just over 1 percent in
2017.
A large gap in available
labor supply, if suggested
immigration policy changes
are executed by the current
administration, could further
exacerbate challenges on
dairy farms, they said.
A modest expansion in
U.S. milk supply, together
with lower but still relative-
ly strong domestic demand,
should render the U.S. with
little to no incremental ex-
ports through most of 2017,
the analysts concluded.
Matthew Weaver/Capital Press
Cattle at a feedlot near Pasco, Wash. A bill backed by the Wash-
ington Cattle Feeders Association has picked up momentum in the
Legislature after the Department of Ecology dropped its opposition.
mous approval recently in the
Democratic-controlled House
Environment Committee.
The committee’s chair-
man, Rep. Joe Fitzgibbon of
Burien, said he believed the
bill was strong enough to pro-
tect workers, neighbors and
livestock from feedlot dust.
Cattle feeders say the bill
will preserve practices that
Ecology and the industry
agreed to in 1995.
Industry representatives
say the practices have worked
well, but are threatened by a
recent change in Ecology’s
attitude. Lawmakers heard
testimony that the agency had
been reasonable, but was now
unrealistic in entirely elimi-
nating dust from thousands of
animals in dry country.
Under SB 5196, feedlots
would be required to follow
dust-control plans based on
the 1995 practices. Many
feedlots already have such
plans, but some have had
trouble getting theirs ap-
proved. The bill will clarify
the responsibilities of feedlots
and Ecology, Field said.
“We’re not asking for a
free pass,” he said. “You have
to put your (best-management
practices) in place.”
Ecology strongly opposed
the bill at a hearing in Janu-
ary, saying it would hamper
its authority.
The agency dropped its op-
position because the bill was
amended to allow the state to
order more dust-controlling
measures in areas that aren’t
meeting federal air-quality
standards for particulate mat-
ter, an Ecology spokeswoman
said Monday.
Franklin County rancher
Bill Easterday said the bill
won’t change how he manag-
es his operation.
“We have best-manage-
ment practices in place. We’ve
had them for years. There
would just be no difference
in operation of the facility on
a daily basis whatsoever,” he
said.
Ecology and the Cattle
Feeders must agree on up-
dates to dust-control prac-
tices that feedlots are ex-
pected to follow, according
to SB 5196.
The Washington Attorney
General’s Office has affirmed
that What’s Upstream didn’t
need to report its lobbying
campaign to the state, a deci-
sion causing a farm group to
second-guess the scope of its
complaint.
Save Family Farming di-
rector Gerald Baron said Fri-
day that the group’s complaint
to the Public Disclosure Com-
mission may have been too
narrow.
It specifically named Swin-
omish Indian tribe environ-
mental director Larry Wasser-
man, former Environmental
Protection Agency Northwest
Administrator Dennis McLer-
ran and lobbying firm Strate-
gies 360.
Assistant Attorney General
Walter Smith informed Save
Family Farming last week
that Wasserman, McLerran
and Strategies 360 were not
required to register with the
PDC because they did not
personally fund the campaign.
The AG’s finding upheld
a ruling in February by the
PDC.
Baron said his group
named Wasserman because
he was the lead organizer and
identified McLerran as the
EPA official ultimately re-
sponsible for letting the cam-
paign proceed.
“In retrospect that may
have been an error,” Baron
said. The group is considering
whether to submit a broader
complaint to the PDC, he said.
The EPA declined to com-
ment. Efforts to reach Wasser-
man were unsuccessful. The
EPA and tribe had both argued
the PDC had no jurisdiction
over them.
EPA money awarded to
the Northwest Indian Fisher-
ies Commission and passed
through to the tribe support-
ed What’s Upstream between
2011 and 2016. The campaign
involved several environmen-
tal groups and had a $655,000
budget, according to EPA re-
cords.
The tribe and environmen-
tal groups used the money
File Photo
An assistant state attorney gen-
eral has decided that What’s
Upstream, the group that paid
for billboards and a website
that attacked Washington state
farmers, didn’t violate state
lobbying laws.
to make public appeals for
stricter limits on farming near
water. They said they hoped
to influence the votes of leg-
islators, according to EPA
records. The tribe hired Se-
attle-based Strategies 360 to
develop the lobbying strategy.
State law requires groups
that seek to rally grass-roots
support for legislation to re-
port their sources of mon-
ey and their spending to the
PDC.
The PDC ruled the law
didn’t apply to What’s Up-
stream because the campaign
didn’t refer to a specific bill
before the Legislature. The
PDC sent its decision to the
attorney general for review.
In his letter to Save Fami-
ly Farming, Smith, the assis-
tant attorney general, did not
cite the lack of a specific bill
as grounds for rejecting Save
Family Farming’s complaint.
Smith stated that McLer-
ran did not personally approve
funding to the fisheries com-
mission or tell the tribe how
to spend the money, while
Wasserman spent tribal funds
under the tribe’s direction.
Strategies 360 also did not
fund the campaign and act-
ed under a contract with the
tribe, according to Smith.
The EPA’s inspector gener-
al has yet to release an audit
into how the fisheries com-
mission and tribe handled
EPA funds. The inspector
general opened the audit near-
ly a year ago at the request of
federal lawmakers.
Some lawmakers de-
nounced What’s Upstream as
a malicious attack on farmers.
EPA initially said it couldn’t
control the content of the cam-
paign, but quickly reversed its
stance under congressional
fire and cut off funding.
Cheese prices make strong showing; spot milk prices reported at $1 to $4 under class
By LEE MIELKE
For the Capital Press
M
arch cheese prices
went out like a lion,
with a big move to the
upside, despite a fair amount of
product finding its way to Chica-
go but driven in part by demand
for fresh cheese and anticipated
increasing exports.
The cheddar blocks marched
to $1.52 per pound the last Fri-
day of the month, 8 cents high-
er on the week, 5 cents above
a year ago, and 3 cents above
Dairy
Markets
Lee Mielke
where it was March 1.
The barrels finished at
$1.47, up 8 cents on the week,
1 1/2-cents above a year ago,
and a half-cent above its March
1 price. Nineteen cars of block
traded hands on the week and 38
of barrel.
The blocks gained a penny
Monday but gave it back Tues-
day as traders likely didn’t like
what they saw in the GDT. The
barrels were up 2 1/2-cents
Monday but gave back
1 1/2-cents Tuesday, slipping to
$1.48.
Milk continues to be avail-
able to Midwest and Western
cheesemakers, according to
Dairy Market News. Reports
from some in the Midwest
point to an inability to take on
any extra milk. Spot milk prices
have been reported at $1 to $4
under class.
Spot butter saw a Friday
finish at $2.1075 per pound,
up a penny on the week,
14 3/4-cents above a year ago,
but down 12 1/2-cents from its
March 1 perch.
Monday saw the butter
tick up 2 cents then tack on
2 1/4-cents Tuesday, hitting
$2.15.
Butter output is active in
the Central region, according
to DMN. Cream is still avail-
able to butter producers. Some
report they are in the peak of
spring holiday demand while
others still expect stronger de-
mand to come.
Western butter makers also
have plenty of cream and are
actively churning it.
Cash Grade A nonfat dry
milk closed Friday at 80 cents
per pound, down 2 cents on the
week but 8 1/2-cents above a
year ago.
The powder was unchanged
Monday and Tuesday.
GDT higher
Tuesday’s Global Dairy
Trade auction’s weighted aver-
age inched up 1.6 percent, fol-
lowing the 1.7 percent gain on
March 21, after plunging 6.3
percent March 7 and 3.2 percent
on Feb. 21. It also surpassed the
U.S. $20 billion milestone in cu-
mulative value of products sold.
Buttermilk powder led the
declines, down 12.2 percent.
Cheddar cheese fell 4.4 per-
cent, after a 1 percent slip last
time, and butter was down 1.6
percent, following a 4.9 percent
increase. Skim milk powder
was down 0.8 percent, after
leading the losses last time
with a 10.1 percent plunge.