DairyProfit Update for Oct. 25, 2012

California Dairy Task Force meets

California’s newly formed Dairy Future Task Force held its first meeting, Oct. 23-24, to address immediate and long-term challenges facing the state's dairy industry. California Department of Food & Agriculture (CDFA) Karen Ross announced creation of the panel earlier this summer, after a panel denied a petition by producer groups to adjust the state's whey factor in Class 4b minimum milk pricing formula. The action came in the face of skyrocketing drought-related feed costs, forcing many producers into bankruptcy. 

The 28-member Dairy Future Task Force is made up of dairy producers, processors and cooperatives Click here for a list of task force members.

Background information provided by CDFA said the California Milk Advisory Board (CMAB) will have administrative oversight of the task force. Meetings will not be open to the public to “eliminate public posturing, hyperbole, and positioning for political gain.”

LGM-Dairy margins above historical averages

The first sales of fiscal year (FY) 2013 Livestock Gross Margin-Dairy (LGM-Dairy) margin insurance policies begin Oct. 26, and participation is expected to be brisk. USDA’s Risk Management Agency (RMA) allocated $14.9 million in underwriting capacity for the LGM-Dairy sale.

While sale conditions of the sale will be the same as those offered last fall, federal dairy policies designed to help mitigate dairy producer risk are not, noted Alan Zepp, Risk Management Program coordinator with Pennsylvania’s Center for Dairy Excellence.

“The conditions that have changed are the expiration of the Milk Income Loss Contract (MILC) program, no certainty regarding a 2012 Farm Bill, nor certainty of the dairy title of that Farm Bill,” Zepp explained during his monthly conference call. “While the Dairy Security Act will likely be enacted, there’s no assurance of its final form.”

Zepp said current expected margins available under LGM-Dairy are at historic highs, above $15/cwt. for December and January 2013, and between $14-$15/cwt. from February-October 2013. The expected margin for the entire December 2012-September 2013 period, at $14.52/cwt., averages $2.20/cwt. more than the 5-year average margin ($12.32/cwt.) for the same entire period. The 10-year average margin for the period is $12.11/cwt.

Oct. 26 sales will not begin prior to 4:30 p.m. (CST).  Sales will begin on the half hour after the information to determine the expected gross margins becomes available.  For example, if the expected gross margins have not been released by 4:30 p.m. (CST), sales will begin at 5 p.m. (CST), and so on.

USDA seeks fluid promotion board nominees

USDA is seeking candidates for the National Fluid Milk Processor Promotion Board. Nomination deadline is Nov. 23. Seven individuals will be selected to succeed members whose terms expire June 30, 2013. Appointed members will serve three-year terms from July 1, 2013, through June 30, 2016.

USDA will accept nominations for board representation in five geographic regions and two at-large positions. Nominees for the five regional positions must be active owners or employees of a fluid milk processor. At least one at-large position must be a fluid milk processor. The other at-large position may be either a fluid milk processor or a member from the general public. The geographic regions are: Region 1 (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont); Region 4 (Georgia, North Carolina, and South Carolina); Region 7 (Michigan, Minnesota, North Dakota, South Dakota, and Wisconsin); Region 10 (Texas); and Region 13 (Idaho, Montana, Oregon, Washington, and Wyoming).

To obtain forms or additional information, call 202-720-6909 or e-mail whitney.rick@ams.usda.gov. Blank forms are available on the Dairy Promotion and Research Branch’s website at www.ams.usda.gov/Dairy.

Hettingas appeal to U.S. Supreme Court

Hein and Ellen Hettinga, central figures in a battle over a law regulating large milk producer-handlers, has asked the U.S. Supreme Court to hear their case. In a petition filed Oct. 19, the Arizona dairy owners asked the Supreme Court to hear key issues in their continuing constitutional fight against the Milk Regulatory Equity Act, contending it targeted them specifically. 

The Milk Regulatory Equity Act, signed into law in April 2006, amended the Agricultural Marketing Agreement Act of 1937 to ensure regulatory equity between and among dairy farmers and handlers for sales of packaged fluid milk in federal milk marketing order areas, and into certain non-federally regulated milk marketing areas from federal milk marketing areas. In June 2006, USDA issued rules eliminating the producer-handler exemption for firms that operate in the Arizona and Pacific Northwest Marketing Areas and sell more than 3 million lbs. of their own milk per month. In June 2010, USDA issued a final rule amending the producer-handler definition in all federal milk marketing orders.

The Hettingas are represented by attorneys with donor-supported Pacific Legal Foundation, a nonprofit watchdog organization that litigates for limited government and free enterprise in courts nationwide. 

National Dairy FARM: Producers following animal care guidelines

A report issued about the National Dairy FARM Animal Care Program found that overall, its subscribers are doing a thorough job of adhering to its multi-faceted approach to comprehensive dairy animal well-being.

The Farmers Assuring Responsible Management (FARM) is a national set of guidelines designed to demonstrate dairy farmers’ commitment to outstanding animal care and a quality milk supply. Cooperatives, proprietary milk processors and individual dairy producers are using the program to assure consumers that the food they purchase is produced with integrity.

Since enrollment began in September 2010, the FARM Animal Care Program has been implemented on dairy farms accounting for 41% of the nation’s milk supply. With continued expansion of enrollment, participation in the FARM program is anticipated to exceed 70% of the nation’s milk supply in 2013, the National Milk Producers Federation (NMPF) said. (See summary of those results.)