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July 28, 2017 CapitalPress.com Subscribe to our weekly dairy or livestock email newsletter at CapitalPress.com/newsletters 15 Dairy Quota National Milk welcomes improvements to MPP MPP premiums proposal nears finish line By CAROL RYAN DUMAS Capital Press By CAROL RYAN DUMAS Capital Press California dairy farm- ers are eager to abandon the state’s milk marketing order and join the federal market- ing order system, hoping to increase the price they re- ceive for their milk. They have, however, been adamant that loss of the state’s quota program would be a deal breaker. That program pays quo- ta certificate holders $1.70 per hundredweight above the state blend price for the amount of milk covered by their certificate. Those certif- icates are together worth $1.2 billion, and are an asset that can be transferred or sold. USDA would allow the quota program to continue in the proposed federal order as a stand-alone program run by the California Department of Food and Agriculture. And a producer review board es- tablished by CDFA has been at work figuring out how the program would operate. The main issue was what milk would be assessed and how the assessment would be collected. Under the state order nearly all milk is pooled and CDFA deducts $12 million to $13 million a month from the pool to fund the quota program. Under a federal order, however, only Class I fluid milk is required to be pooled, and milk for other uses can move in and out of the pool. USDA would allow CDFA to assess pooled milk, but producers’ initial con- cern was there wouldn’t be enough milk in the pool to maintain quota value. The review board has rec- ommended all Class A milk produced in the state be as- sessed, with CDFA using a settlement fund and requiring handlers to help manage quo- ta money. Handlers would deduct money from their producers’ milk payment to pay the assessment and make payments to producers hold- ing quota certificates. Handlers would either make a payment to a settle- ment fund or receive a pay- ment from a settlement fund based on the difference be- tween the total money their producers would be assessed and the total money their pro- ducers would receive in quo- ta payment. The proposed stand-alone quota program, separate from federal order pooling, clears the way for producers to be able to make a decision on whether to join the federal order system, said Geoff Van- den Heuvel, a Chino dairy producer and board member of Milk Producers Council. “Producers want the abili- ty to consider a federal order, but they want quota protect- ed,” he said. The proposed program would function and operate efficiently and effectively, he said. Western United Dairymen has always been support- ive of maintaining the quota program, and the producer review board came as close as it could to keeping the program as is, said Annie AcMoody, WUD director of economic analysis. Producers shouldn’t feel any big difference, but one thing that might trigger a re- action is that they will now see a quota assessment as a deduction on their milk check. Currently quota is funded by the pool with the deduction in the background. With the stand-alone pro- gram, it will be assessed di- rectly, she said. That’s the main difference in the proposed program, but WUD will be working to communicate to its members that there’s really no differ- ence in producers’ contribu- tion to the quota program, she said. The Senate Appropria- tions Committee on July 20 approved its fiscal year ag- ricultural appropriations bill containing improvements to the Margin Protection Plan for dairy producers. The plan provides partici- pants coverage when the na- tional margin, the difference between the all-milk price and average feed costs, falls below $4 per hundredweight. The program has lost favor with producers, who say it’s failed to perform despite col- lapsed milk prices and severe losses. Most of the blame is aimed at USDA’s feed costs calculation, which producers say is too low and doesn’t re- flect reality. National Milk Producers Federation, which developed the program in response to catastrophic losses in 2009, is aware of their frustration and is pushing for changes to the program in the next farm bill. Enhancements in the Sen- ate committee’s bill are a ma- jor step in the right direction, said Jim Mulhern, NMPF president and CEO. The bill lowers premiums (Dollars/hundredweight of milk.) Margin coverage Current* Senate † $4.00 0 0 4.50 0.010 0 5.00 0.025 0 5.50 0.040 0.009 6.00 0.055 0.017 6.50 0.090 0.043 7.00 0.217 0.068 7.50 0.300 0.094 8.00 0.475 0.153 Capital Press File The National Milk Producers Federation is pushing Congress for changes in the Margin Protection Plan. for insured margins for the first 5 million pounds of milk a producer insures and raises the threshold for free coverage on that first 5 million pounds from a margin of $4 per hun- dredweight to $5. “By making the dairy safety net program more af- fordable, this legislation will ensure that more farmers have access to better protection against catastrophic losses, like those we experienced in 2009 an 20012,” Mulhern said. While 5 million pounds represents production from about 225 cows, the lower pre- miums on the first 5 million pounds of production apply to farms of all sizes, said Chris Galen, NMPF senior vice president of communications. “The measure will make in- surance coverage for all dairy farmers more affordable,” he said. The bill would also change USDA’s margin calculation from a two-month average to a monthly calculation. Under the current program, the mar- gin could fall below a pro- *Current; less than 4 million pounds. † Senate appropriations; less than 5 million pounds. Source: National Milk Producers Federation Capital Press graphic ducer’s coverage level in one month but be above it the other month in one of the six pay periods. That could result in a two-month average above his coverage level and not gener- ate a payout. The changes address criti- cal shortcomings in the dairy safety net that would strength- en the program and help pave the way for additional nec- essary improvements in the upcoming farm bill, Mulhern said. Minority committee lead- ers said the updates will im- 2 join Wash. dairy commission Cheese block prices up, barrels down Capital Press By LEE MIELKE For the Capital Press T Courtesy of Dairy Farmers of Washington Lana Smaciarz of Raymond, Wash., has been elected to the Washington Dairy Products Com- mission. ington counties and southern King County. “Jim and Lana have differ- ent backgrounds and unique perspectives, which will help our organization grow even stronger,” Dairy Farmers of Courtesy of Dairy Farmers of Washington Monroe, Wash., dairy farmer Jim Werkhoven has been elected to the Washington Dairy Products Commission. Washington CEO Scott Kin- ney said in a written state- ment. Dairy farmers fund the commission, which is a state agency. The state agriculture director makes appointments, though the industry holds advisory elections. The com- mission supports the industry through advertising, pub- lic-relations work, retail pro- motions, hunger-relief initia- tives and nutrition education, Group forms to defend Yakima dairies By DON JENKINS Online Capital Press The agricultural advocacy group Save Family Farming has launched an affiliate, Yaki- ma Family Farmers, to defend Central Washington dairies dogged by citizen lawsuits and the Environmental Protection Agency. The head of the group, dairyman Bill Dolsen, said Wednesday that his family’s Cow Palace Dairy has gained nothing by not commenting publicly while enduring court setbacks and government de- mands. “None, whatsoever,” he said. “We were told more than once by law firms to basically sit down and shut up when we heard anti-ag statements in the media, and it drove me abso- lutely crazy.” Save Family Farming took shape last year as north Puget Sound dairies came under at- tack from What’s Upstream, a campaign that painted farmers as unregulated polluters of wa- ter. The campaign was orga- nized by the Swinomish Indian tribe, funded by an EPA grant and supported by several envi- ronmental groups. In the Yakima Valley, dair- ies have been bruised by ac- cusations that cow manure is Dairy Markets Lee Mielke Westside farmers fill seats Two Western Washington dairy farmers have been elect- ed to the Washington Dairy Products Commission. Jim Werkhoven of Mon- roe and Lana Smaciarz of Raymond will fill seats on the nine-member panel, also known as the board for the Dairy Farmers of Washington. Werkhoven and his broth- er, Andy, milk 1,300 cows about 30 miles northeast of Seattle, according to the Dairy Farmers of Washington. He has served on boards for Dari- gold, the Innovation Center for U.S. Dairy and the Nation- al Milk Producers Federation. He will fill an at-large po- sition that was held by Cathy Thomasson of Enumclaw, whose term expired. Smaciarz and her husband, Terry, have a fourth-genera- tion farm, Oxbow Dairy, in southwest Washington. She was born and raised on the farm. She is a registered dieti- tian and her daughter, Alicia, was a 2016-17 dairy ambas- sador. She will replace Liz An- derson of Onalaska, whose term expired, and will repre- sent District 2, which is made up of 12 southwest Wash- prove the program’s effec- tiveness and offer greater incentives to farmers to par- ticipate in the insurance pro- gram and select higher, more meaningful levels of protec- tion. Annual premiums for cov- erage of 90 percent of produc- tion at a margin level of $6.50 per hundredweight, for exam- ple, would go from $1,594 to $761 for an average 100- cow dairy; from $21,504 to $17,154 for a 500-cow dairy; and from $56,313 to $51,963 for a 1,000-cow dairy. NMPF is still working on changes to improve the MPP program, such as adjustments to USDA’s national feed cost calculation. But the commit- tee’s provisions are a great start, Galen said. Hopefully, it will make coverage better and cheaper, and the additional revenue being added for the lower pre- miums will increase the fed- eral baseline for spending on the farm bill dairy title. That would make requests for addi- tional changes less costly. While the committee’s provisions don’t resolve all the problems with MPP, en- acting the changes will be a major help, Mulhern said. www.yakimafamilyfarmers.org Courtesy of Yakima Family Farmers A screen shot of the Yakima Family Farmers website. The group has formed to tell agriculture’s side of the story in Washington state’s Yakima Valley. the principal cause of elevated levels of nitrates in drinking water. Dolsen said he appre- ciated Save Family Farming’s staunch response to accusations by What’s Upstream. “I contacted them and con- gratulated them for having the guts to stand up for our indus- try and families,” he said. “I’ve seen firsthand what’s happened to my family and a couple of other families and our industry by remaining silent.” Dolsen said he doesn’t ex- pect the public-relations push to help dairies battling lawsuits now. “I don’t think it’s going to help them a bit, but it may help some others in the fu- ture,” he said. “We won’t have an industry if we don’t stand up for ourselves.” On its website, Yakima Fam- ily Farmers argues that dairies have been unfairly singled out for groundwater pollution and are the victims of faulty science and public misconceptions. Save Family Farming di- rector Gerald Baron, who also directs the Yakima affiliate, said the message is aimed at an audi- ence beyond regulators, judges and the Yakima Valley. “We believe the future of family farming in Washington state resides in the opinions of young, urban voters — non- farmers,” Baron said. “These are the people anti-farming activists also are targeting.” Yakima Family Farmers re- news criticism of an EPA study the led the Cow Palace and three other dairies to agree in 2013 to line manure lagoons with syn- thetic material and make other operational changes. A Natural Resources Conservation Service review of the study stated that the EPA’s conclusions could not be “scientifically defended.” Baron said the group will ask the next Northwest EPA ad- ministrator to take another look at the source of nitrates in the Yakima Valley. The Trump ad- ministration has yet to name a successor to Obama appointee Dennis McLerran. An EPA spokesman said the agency stands behind its sci- ence, but the agency otherwise declined to comment for this story. Jean Mendoza, executive director of Friends of Toppen- ish Creek, a plaintiff in lawsuits against the dairies, said pin- pointing groundwater pollution has been difficult, but dairies are a contributor. “From my position, we know for sure the dairies in the Yakima Valley are polluting the aquifer, so we’ll continue to fight that,” she said. “We can argue about the details all we want, but it’s an established fact.” he CME cheese price gap shot higher last week. The blocks closed Friday at $1.7075 per pound, up 3 1/4-cents on the week, following a 12 1/4-cent jump the previous week, and were dead even with a year ago. They were unchanged Monday, as traders anticipat- ed the afternoon’s June Cold Storage report, which added a tinge of bullishness to the mar- ket Tuesday, but they remained unchanged. The barrels closed Friday at $1.41, down 6 1/2-cents on the week, 36 1/2-cents below a year ago and gapping 29 3/4-cents below the blocks, the largest spread since Oct. 22, 2014, when it hit 30 cents. The record spread since dai- ly trading began on Sept. 1, 1998 was 32 cents on July 30, 2008, according to FC Stone. Eight cars of block were sold last week at the CME and 40 of barrel. The barrels were also un- changed Monday but jumped 4 3/4-cents Tuesday, to $1.4575, reducing the spread to 25 cents. Central cheese contacts suggest milk production is easing a bit, but there is still plenty of it, according to Dairy Market News. Plants are run- ning at or near full capacity and demand is generally fol- lowing seasonal patterns. Sales into food service are steady to lower, ahead of the seasonal gear-up of school and college cafeterias and the advance of the fall pizza season. Some manufacturers’ cheese stocks are building so they have been actively offer- ing barrels on the CME. De- mand for fresh barrel has been able to provide some support to prices, but “the disparity in price, and the length to which it has lasted, is unsettling to some barrel cheese producers in that it makes procurement and cost management more challenging.” Cheese is also being pro- duced at full capacity in most Western plants as milk is read- ily available despite higher daytime temperatures. De- mand is steady and “with cur- rent higher cheese prices in the EU, the international market is showing more interest for U.S. cheese.” Spot butter finished Friday at $2.5850 per pound, down 1 1/2-cents on the week but still 29 1/4-cents above a year ago, with 26 cars selling last week.
