April 6, 2018
CapitalPress.com
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Dairy
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California farmers vote on
new federal marketing order
By CAROL RYAN DUMAS
Capital Press
Thinkstock.com
Milk production is shifting westward, economists at the University of Wisconsin say.
Milk production increases in the West
By CAROL RYAN DUMAS
Capital Press
Despite three years of low
milk prices, total milk pro-
duction in the U.S. continued
upward in February, increas-
ing 1.8 percent year over year
to 17 billion pounds.
But it wasn’t up across the
board. Strong production in
the West made up for deficits
in the Midwest and North-
east, USDA National Agri-
cultural Statistics reported.
Output was up 4.6 percent
in the Southwest, 4.1 percent
in the Northwest and 3.5 per-
cent in California. On the flip
side, it was down 1.3 percent
in the Northeast and 0.2 per-
cent in the Midwest.
The biggest increases in
production were in Colorado,
up 7.7 percent on more cows;
Utah, up 6.9 percent on more
cows and higher per-cow
production; Texas, up 5.5
percent on more cows and
higher per-cow production;
and Idaho and Kansas, which
were each up 4.8 percent on
more cows and higher per-
cow production.
California’s
increased
production was a bit of a
surprise. The state had 1,700
fewer cows than last year,
Bob Cropp, an economist at
the University of Wisconsin,
said in the latest Dairy Situa-
tion and Outlook podcast.
“But production per cow
was very strong, so they had
a 3.5 percent increase,” he
said.
California’s production
per cow was up 80 pounds
from February 2017, com-
pared to an average increase
of 24 pounds nationwide.
Elsewhere,
production
suffered. New York’s milk
output was down 2.3 percent
on 55 fewer pounds per cow,
despite an additional 9,000
cows. Minnesota’s produc-
tion was down 0.5 percent on
fewer cows. Vermont’s pro-
duction was down 1.9 per-
cent on lower milk per cow,
and Florida’s output was
down 2.8 percent on weaker
production per cow.
Wisconsin’s production
was only up 0.1 percent, and
Michigan’s production was
only up 0.9 percent. Both had
a 10-pound per cow increase
but 5,000 fewer cows.
Nationally, “cow numbers
have increased every month
since October, not a lot,
about 15,000 head (total),”
Cropp said.
While total cow numbers
— 45,000 head over a year
earlier — are only up about
a half of a percent, some
states are making significant
increases.
Cow numbers are up
16,000 head in Texas, 12,000
head in Colorado and 9,000
head in both Idaho and Kan-
sas.
“So there’s some building
going on in those states,” he
said.
In addition to the cow re-
ductions in California, Wis-
consin and Minnesota, cow
numbers were flat in South
Dakota, he said.
“I suspect to see what I
hear out there that we’ve got
some exiting going on in the
dairy industry with these low
prices,” he said.
Milk production is slow-
ing in the Midwest and
Northeast, he said.
Some changes in milk
production are attributable to
weather, such as last year’s
harvest of poor-quality forage
in New York and unusually
good weather in California
this year, Mark Stephenson,
director of dairy policy anal-
ysis at the university, said.
“But it (changing produc-
tion) still feels a little stron-
ger in both directions than
just weather or poor feed,”
he said.
“It’s like we have some
big tub here of milk, and it
sloshes from one side and
back to the other,” he said.
California dairy farmers
are nearing the finish line in
a marathon effort to abandon
their state milk marketing or-
der and join the federal milk
marketing order system.
USDA issued its final de-
cision to establish a federal
order for the state and will
conduct a referendum from
April 2 through May 5 to de-
termine producer support.
“It has been a long haul,”
Geoff Vanden Heuvel, board
member and economic con-
sultant for the Milk Produc-
ers Council, said.
Over the last decade, pro-
ducers have been dissatisfied
with how the state system
has operated, he said.
“California
producers
came to believe the state
system created a regulatory
bias against producers,” he
said.
The system worked well
when California operated
in an isolated market, and it
allowed the industry to grow.
But the state is no longer iso-
lated, and California’s indus-
try has become a huge part
of U.S. and world markets,
he said.
“We need to be on a level
playing field with the rest of
the (U.S.) industry,” he said.
Producers will now be
able to decide which system
will best accommodate fu-
ture prosperity, he said.
Now that the final deci-
sion has been issued, “we’re
at a point here where it’s a
yes or a no,” he said.
The Western United
Dairymen organization “is
excited that the process of
improved producer prices is
finally coming to a produc-
tive close,” Annie AcMoody,
WUD director of economic
policy, said.
Dairymen pursued join-
ing the federal system to
bring their milk prices in line
with the rest of the country
after little to no success at in-
creasing prices through their
state order.
Capital Press File
Cows lounge at Vander-
Woude Dairy near Merced,
Calif. The state’s dairy
farmers are voting on a new
federal milk marketing order
in a referendum that lasts
until May 5.
“We are relieved to be ar-
riving at this point in the fed-
eral order process and look
forward to engaging produc-
ers in their education of this
potential new pricing struc-
ture,” Lucas Deniz, WUD
president and a Petaluma
dairy producer, said.
The California Dairy
Campaign has long called for
the state’s producers to join
the federal order system to
bring prices and the process
for determining prices in line
with other regions, Lynne
McBride, CDC executive di-
rector said.
“We think this change is
long overdue given Califor-
nia dairy producers’ prices
are routinely the lowest or
near the lowest of any of the
major dairy-producing re-
gions,” she said.
The latest analysis by the
California Department of
Food and Agriculture puts
cost of production at more
than $18 per hundredweight
of milk, and producers are
receiving about $14 for their
milk. The state lost 61 dairy
operations last year, and that
trend is continuing, she said.
The journey to a federal
order formally began in Feb-
ruary 2015, when California
Dairies Inc., Dairy Farm-
ers of America and Land
O’Lakes petitioned USDA
to consider a proposal they
developed.
Dairy prices little changed
By LEE MIELKE
For the Capital Press
C
ash dairy prices were
mostly lower in the
Good Friday holi-
day-shortened week, with only
butter advancing. The markets
had little to chew on in the way
of USDA reports.
The Cheddar blocks closed
Thursday at $1.53 per pound,
down 1 1/2-cents on the week,
unchanged on the month, but a
penny above a year ago. The
barrels came under pressure as
product found its way to Chi-
cago, and dropped to $1.44,
down 7 cents on the week
and the lowest since Feb. 15,
2018, down 3 1/4-cents on the
month, and 3 cents below a
year ago.
The blocks were un-
changed Monday but gained
2 cents Tuesday, hitting $1.55,
as traders absorbed the morn-
ing’s GDT auction and awaited
Wednesday’s February’s Dairy
Products report. The barrels
inched up a half-cent Monday
and stayed there Tuesday, at
$1.4450, increasing the spread
to 10 1/2-cents.
Midwestern cheesemakers
tell Dairy Market News that
demand is moving at steady to
increasing levels. Milk intakes
continue to be heavily dis-
counted: $2 to $5 under class.
Western cheesemakers re-
port that demand has been
solid, but the relatively strong
orders and ample milk supplies
have pressed manufacturers to
keep up.
Somebody wanted to buy
butter last Wednesday and
got it, as 40 loads exchanged
hands, with 20 on Thursday.
The price closed at $2.2150,
up 2 1/2-cents on the week, up
3 1/2-cents on the month, and
10 3/4-cents above a year ago.
A total of 62 cars found new
homes last week.
Monday’s butter was up a
half-cent and ticked up 2 more
cents Tuesday, to $2.24.
FC Stone pointed out in its
March 27 Early Morning Up-
date that “historically we’ve
Dairy
Markets
Lee Mielke
seen downside following the
big demand of Easter, but we’ll
have to see how pipelines get
refilled to make that call this
year. In addition, European but-
ter continues to find remarkable
support at prices trading north
of $2.80 per pound.”
“Central region butter mak-
ers report that spot cream is
widely available but is uncer-
tain moving ahead, as ice cream
makers begin to compete more
heavily. The Cold Storage re-
port’s monthly and annual stor-
age upticks have some in the
industry “concerned.”
Churning is ongoing in the
West given that more milk
loads are available. Export
sales were unchanged from
the previous week, and market
players do not expect any big
change in the near future.
Cash Grade A nonfat dry
milk saw a Thursday close at
69 cents per pound, down a
quarter-cent and 11 cents below
a year ago.
The powder was unchanged
Monday and Tuesday.
CME dry whey closed
Thursday at 28 1/2-cents per
pound, down a quarter-cent on
the week, with two sales re-
ported. The lagging USDA sur-
veyed whey price was up 2.2
cents, to 26.14 cents per pound.
The whey lost a half-cent
Monday and held there Tues-
day at 28 cents per pound.
GDT slips
Anhydrous milkfat led the
declines while butter jumped in
Tuesday’s Global Dairy Trade
auction. The weighted average
of products offered inched 0.6
percent lower, following a 1.2
percent drop March 20 and a
0.6 percent slide on March 6.
The quantity sold slipped to
just under 38 million pounds,
down from 41.1 million in the
last event.
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