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14 CapitalPress.com November 17, 2017 Subscribe to our weekly dairy or livestock email newsletter at CapitalPress.com/newsletters Dairy/Livestock Darigold economist: Canada milk policy spoiling market Northwest cooperative gathering evidence By DON JENKINS Capital Press OLYMPIA — U.S. milk producers will lose an esti- mated $1 billion over the next five years if Canada’s new dairy price system stays in place, a Darigold economist said Tuesday. Ken Bailey, the coopera- tive’s lead economic planner and analyst, told the Washing- ton Senate Agriculture Com- mittee that he’s marshaling evidence to show that U.S. dairy farmers are being shut out of Canada and undercut in other countries. “It’s an urgent, urgent is- sue,” he said after his presen- tation. “Our milk checks are going to go down.” Darigold, headquartered in Seattle and owned by about 500 Northwest farm families, is among the dairy groups hoping to influence North American Free Trade Agree- ment negotiations. Darigold is taking aim at the Class 7 price structure in- troduced in February by Ca- nadian dairy producers and processors. The agreement lowered production costs for skim-milk powder. Bailey said he’s pulled together numbers that show how the Canadian pricing strategy has affected U.S. pro- ducers. He said that Tuesday’s presentation was the first time he’s outlined him findings in public. “We want to get the word out, it’s a big problem,” Bai- ley said. “Our goal for the Don Jenkins/Capital Press Darigold economic planner and analyst Ken Bailey, right, talks with Darigold lobbyist Dan Coyne on Nov. 14 on the Capitol Campus in Olympia. Bailey outlined for lawmakers his study on how Canadian dairy policies are hurting U.S. milk producers. according to the Puget Sound Business Journal. Darigold is a major ex- porter of milk products. The cooperative opposes simply withdrawing from NAFTA. The Dairy Farmers of dairy industry is to affect NAFTA negotiations.” Milk is Washington’s sec- ond most valuable farm com- modity, behind apples. Dari- gold is the state’s third largest privately owned company, Canada wants to continue to exempt its industry from NAFTA, according to com- ments the group submitted to its government in July. The group defended its pricing policy and said managing the supply of milk products is a “breath of fresh air” in an un- steady marketplace. “The Canadian dairy in- dustry has respected and will continue to respect existing international trade agree- ments and their associated regulations,” the group stated. “The same cannot be said for the U.S. dairy industry, which time and again has proven they are not willing to play by the rules of international trade.” Bailey accused Canada of dumping surplus milk prod- ucts into the global market. “The system was designed to undercut world prices,” Schilder newest member of Idaho Dairy Hall of Fame By SEAN ELLIS Capital Press BOISE — The late John Schilder was inducted into the Idaho Dairy Hall of Fame Nov. 9 before hundreds of his peers he so willingly helped during difficult times. Schilder died in Janu- ary 2015 and his wife of 42 years, Aggie, and their four children and families were presented with an award honoring him during the an- nual meeting of Dairy West, formerly known as United Dairymen of Idaho. The Schilder family owns a dairy near Buhl. “Be proud of your profes- sion. Love your animals and your family,” Aggie Schilder said during a brief speech, summarizing the things that were important to her hus- band. She told Capital Press that her husband didn’t serve on a lot of boards but he loved his animals and was dedicated to the dairy industry. “His cows were very im- portant to him,” she said. “He always said, ‘When you take care of your cows, your cows will take care of you.’ He was proud of his herd. He wasn’t a board member of this and Courtesy of Dairy West Aggie Schilder holds a photo of her late husband, Idaho dairyman John Schilder, who was inducted into the Idaho Dairy Hall of Fame Nov. 9 during Dairy West’s annual meeting. a board member of that. He was always on the dairy and physically worked with the employees on the dairy.” Aggie Schilder said her husband didn’t care much for politics. “He wanted to pro- vide product to the consumer and that was his love. That Ag needs Trump, adviser says By DAN WHEAT Capital Press YAKIMA, Wash. — Pres- ident Donald Trump may “of- fend” by what he says and does, but “he isn’t owned by anyone” and “he’s the kind of guy we need,” says a lawyer in- strumental in picking Trump’s advisory Agriculture and Rural Issues team for the 2016 elec- tion campaign. Gary Baise, a principal at OFW Law, Washington, D.C., talked about Trump at the Washington State Dairy Fed- eration’s annual meeting at the Yakima Convention Center, Nov. 7, on the eve of the one- year anniversary of Trump’s election. “He doesn’t know us, but he understands us. He knows something has happened in ru- ral America,” Baise said, noting Republican Trump carried 84.6 percent of the rural vote while Democratic presidential nomi- nee Hillary Clinton carried 73.5 percent of the urban vote. Since Trump’s election the stock market has gained $5 tril- lion mainly because of reduced regulations on business, unem- ployment is the lowest level in 17 years and if tax reform hap- pens the Dow Jones Industrial Average could reach 25,000 to 27,000 and Republicans could win a 60-plus-seat Senate ma- jority, Baise said. He said he’s optimistic tax reform will happen because senators such as John McCain and Jeff Flake who hate Trump will vote for it because they know otherwise “people will have their heads.” “In John McCain you have someone who hates him even more than (New York Sen. Chuck) Schum- Gary Baise er. What you may not know is McCain and Hilary Clinton are very close. They are part of what Mr. Trump calls ‘the swamp,’” he said. “Mr. Trump is something we have never seen. One thing he suffers from is never having had a strong board of directors, but Franklin Roosevelt was probably the only other pres- ident not bought and sold by special interests. “Even though he can’t spell agriculture, he knows working people and what makes them tick. …” Baise also spoke about North Korea. “We have three carrier groups off the coast of North Korea and three Los Angeles class nuclear submarines each with 20 multiple warheads. Kim Jong-un may see his mis- sile blast off but he will never live to see whether it was suc- cessful. The Bushes, Clinton and Obama tried to buy him off. Trump’s the kind of guy we need,” Baise said. On trade, he said Trump simply wants a fair and level playing field. “We ship $1.6 billion in meat to Japan with a 37 per- cent Japanese tariff and we hit the point where the tariff goes to 50 percent. We don’t do that to their cars, TVs and phones,” he said. and having a beautiful herd.” Following John Schil- der’s death, at the age of 64, one of his sons, B.J. Schilder, took over the responsibility of running the family dairy, which has 1,750 milking cows. John Schilder was select- ed for the honor by a com- mittee of other dairymen and members of the industry. “There’s really no great- er award in life than to be honored by your peers,” said Buhl dairyman John Brubak- er, a member of the selection committee who knew Schil- der for more than 20 years. Brubaker said Schilder was not one to seek the pub- lic eye, “But John had a heart of gold and he was the first one on the scene to help a neighbor or someone in the industry in need.” Brubaker said Schilder’s involvement in his commu- nity and willingness to help neighbors or other producers was the reason he was se- lected, more so than for his involvement with various groups or individual profes- sional achievements. “There are a lot of things in life that are more import- ant than production awards and that type of thing,” he said. “It came down to … how John gave back to the community and to the dairy industry as a whole. He’s very deserving of the award. He represents every- thing our industry is look- ing for.” Brubaker, who recounted spending many lunch hours with Schilder cracking jokes “and solving the world’s problems,” said his friend was well liked in his commu- nity and the dairy industry. “I don’t think John had any enemies,” he said. “Ev- erybody loved John.” Speaker: Dairymen need to be able to adapt to rapid changes By SEAN ELLIS Capital Press BOISE — Dairymen and industry leaders need to acquire the skills and knowledge that will enable them to remain relevant in a world that is being rapidly changed by technological innovation. Artificial intelligence, automation, algorithms and large amounts of data are causing changes in the business and consumer world that could threaten to overwhelm producers who aren’t ready for them, key- note speaker Mike Walsh told several hundred Idaho dairymen during the annual Dairy West conference last week. “We have to be ready to re-imagine ... how to oper- ate,” said Walsh, CEO of Tomorrow, an innovation research lab. He said the same thing that has made a dairy busi- ness successful until now “could be exactly what un- dos you in the future if you are not prepared to adapt.” He said a lot of high-pro- file tech money is flowing into food innovation and “the same approaches that have revolutionized tech- nology will change food processing. There is a new era coming. We have to pre- pare for that.” Courtesy Dairy West Keynote speaker Mike Walsh tells Idaho dairymen during the annual Dairy West conference in Boise Nov. 9 that techno- logical innovation is changing the world and the food industry rapidly and they need to be ready to adapt to these chang- es to remain competitive. Walsh said algorithms will change retail markets and the way producers in- teract with customers and he noted that, “Your chil- dren will be the first gener- ation to be raised in part by artificial intelligence.” “Facial recognition will change the dynamics of society,” he said, and self-driving cars will result in “continuous, high-vol- ume fresh food delivery into homes.” Walsh said technology will start to become more invisible and basically be built into our bodies. He said the entire food chain is about to get dis- rupted by new technology, data and social media and producers have to re-think conventional approaches to food and agriculture. Dairy West CEO Kar- ianne Fallow told Capital Press the world is chang- ing rapidly and Walsh was invited to speak at the con- vention “to give our dairy farmers some exposure to that. I think that helps them understand the world they live in today and the world that faces them for the fu- ture.” If dairy businesses are going to remain competi- tive in the future, they have to be ready and able to adapt, she said. “What I’m hearing from the farmers is that there is a mix of excitement about it and fear,” Fallow said. “I keep reminding them that awareness is the first step. If they’re aware, then they can prepare to do business in this new world.” Those future technologi- cal innovations might seem scary, she said, but they present a lot of opportunity “if you can keep your finger on the pulse and not just re- act to it, but really try to be out ahead of it.” he said. Aided by unfair subsidies, Canadian milk processors are increasing production, Bailey said. Canadian milk, even af- ter traveling long distances, is arriving at the Mexican bor- der cheaper than U.S. prod- ucts, he said. Bailey said Darigold mem- bers invested $97 million to upgrade the cooperative’s processing plant in Sunny- side, Wash., to compete for a share of the world’s market for skim-milk powder. “We’ve done this on our own. You can imagine how frustrated our dairy fam- ily farmers are,” he said. “Canada is making simi- lar investments, with help from the government to en- gineer a price system that undercuts us in the global marketplace. It’s extremely frustrating.” Dairy Markets Lee Mielke Dairy prices continue to undulate By LEE MIELKE For the Capital Press C ME dairy prices are on a roller coaster again. Block cheddar fell to $1.6025 per pound last Wednesday, the lowest price since Sept. 21, 2017, then jumped 11 1/4-cents Thursday, and closed Friday at $1.71, down a half-cent on the week and 17 1/2-cents be- low a year ago. The barrels dipped to $1.70 last Tuesday, then gained a nickel Thursday, and finished Friday at $1.7525, up 3 3/4-cents on the week, a quarter-cent below a year ago, and an inverted 4 1/4-cents above the blocks. The blocks inched up a quarter-cent Monday, only to give it back Tuesday, return- ing to $1.71. The barrels dropped 5 1/4-cents Monday and stayed there Tuesday, at $1.70. Midwestern cheese pro- ducers report that sales are steady to slower as the hol- idays approach, according to Dairy Market News. Dis- counted milk prices were re- ported again, as loads ranged from $1 under to $1 over Class III. Western cheesemakers re- port solid domestic demand and some export interest. With plentiful milk available, a number of processors are running at or near full capac- ity. Stocks are heavier than normal. Cash butter fell to $2.18 per pound Wednesday, the lowest price since May 10, then rallied and closed Friday at $2.2550, up 2 1/4-cents on the week and 24 1/2-cents above a year ago, with 50 cars trading last week. It gave up a half-cent Mon- day, only to gain 3 cents Tues- day and climb up to $2.28. Cream to churns is be- coming more available ahead of the holidays. Bulk butter sales are picking up as prices have steadily declined in recent weeks. Midwest contacts point to declining EU butter pric- es and suggest price trends domestically are mirroring European slides. Western contacts report that butter prices are currently good but still lower compared to last year at this time. Butter production is active as cream is readily accessible. However, to better manage inventories and production, some butter manufacturers are putting off churning until after Christmas and shipping cream to Mexico. Cash Grade A nonfat dry milk closed Friday at 72 1/4-cents per pound, up a quarter-cent on the week but 15 1/2-cents below a year ago.