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Idaho Dairy Focus - September 2013

 

The Idaho Dairymen’s Association (IDA) was established to continue to

develop and sustain an economically viable Idaho Dairy Industry that works

together to achieve success in the domestic and global marketplace in

meeting the needs of the Idaho dairy farm families.

 

September 2013 Dairy focus

Elections are underway for Idaho Dairymen’s Association Board of Directors and Resolutions Committee. Two of the current Board members, Jeannie Wolverton repre-senting the Magic Valley in District II and Dave Rallison representing eastern Idaho in District III, have decided not to seek re-election. We wanted to extend our thanks as staff and from the producer community for their ser-vice to the industry.

Jeannie was appointed by the Board in 2012 to fill a va-cancy in District II. In short order, she demonstrated an ability to grasp the issues that IDA addresses on a daily

basis. She was a great asset to the Board and staff in pro-viding direction on critical issues.

Dave has served the industry on the IDA board for six years. His leadership ability was recognized by his peers who elected him to serve as Vice President of IDA and Chairman of the Independent Dairy Environmental Action League (IDEAL) Board of Managers.

Please join us in thanking both Jeannie and Dave for their willingness to represent the Idaho dairy industry and for doing such a fine job.

 

Page 2 Federal Dairy Issues Update Page 6 Simpson’s Statement on EPA

Page 3 The Importance of Nutrition Work Page 6 Dairy Producers Survey Regarding Genomics

Page 4 Checkoff Helps Idaho Dairy Exports Page 6 Idaho SCC & Production Growth at a Glance

Page 5 Chinese Market Opportunities by FC Stone Page 8 Upcoming Events & Dairy Outlook Breakfast

 

Thank-you to Jeannie Wolverton and Dave Rallison

 

IDA Board of Director and Resolution Committee Elections

 

The election ballots for the Idaho Dairymen’s Association Board of Directors and the Resolution Committee seats have been mailed out. Your ballots need to be post-marked not later October 1, 2013 in order to be valid and counted. Please take a few moments and vote for the individual within your District that you feel will best represents the Idaho dairy industry.

The Nominating Committee from the respective Districts has assembled the following candidates to run for office.

District I

IDA Board

Adrian Kroes - Nampa

(Continued on page 7)

Peter Kasper - Melba

Jared Myers –New Plymouth

Resolutions Committee

Don Heida - Nampa

Peter Doornenbal –Caldwell

Tom Kasper - Melba

District II

IDA Board

Dan Beukers – Buhl

Tony DeWit – Wendell

Don Taber – Shoshone

Page 2

Idaho Dairy Focus - September 2013

Federal Dairy Issues Update

By Charlie Garrrison

The U.S. Congress has returned to Washington, D.C. fol-lowing the August recess. Members of the Senate and House of Representatives have some big issues affecting farmers to deal with this fall, including immigration re-form and the farm bill. Prior to turning their attention to those, however, there are a couple of big ticket items that must be dealt with to keep the federal government run-ning and able to borrow money to pay its bills.

Most immediate is the end of the current fiscal year for the federal government on September 30th. None of the appropriations bills have been completed here less than 10 days prior to the deadline. That requires the Congress to pass what is known as a "continuing resolution," or "CR," to avoid a federal government shutdown that would begin October 1st.

House Republicans have proposed a bill to temporarily fund the government at current levels, but included lan-guage to "defund" the provisions of the Affordable Care Act, (ACA) or "Obamacare," that are set to go into effect on October 1st. Senate Democrats and the White House will not go along with that provision so the Congress is, at this point, at a stalemate.

If the deadlock over funding the federal government isn’t enough to deal with, it is estimated that the U.S. will ex-ceed its congressionally authorized debt ceiling at some point in the second half of October. The battle lines are drawn on that issue as well as House Republicans are de-manding budget cuts at least equivalent to the amount of the increase in the borrowing limit while President Obama has said he will not negotiate on raising the debt ceiling.

Immigration Reform

The broad coalition of interests in this country supporting legislation to reform our broken immigration system re-mains motivated to push the House of Representatives to act. The frustration comes, however, with the need to wait on the Congress to deal with the "must pass" issues of government funding and the debt ceiling increase be-fore it can turn its attention to an issue like immigration reform that may be urgent but will look the same three months from now as it will three weeks from now.

(Continued on page 7)

The Senate has passed a comprehensive immigration re-form bill that includes language supported by most of agriculture including the Idaho Dairymen’s Association. The House Judiciary Committee has begun debating and voting on bills for a piecemeal approach, including the passage of its "AG" bill. The committee is expected to take up more pieces of immigration reform legislation during the month of October.

Idaho Congressman Raul Labrador (R) sits on the Judiciary Committee which has jurisdiction over immigration issues in the House. He has the unique opportunity of being regarded by his House colleagues as one of the experts on immigration law in the Congress. IDA has a history of working with the Congressman dating back several years and is working closely with him now on this, the most critical federal issue for Idaho dairymen. Labrador made news this past June when he very publicly dropped out of the House "Gang of 8" negotiating comprehensive immi-gration reform legislation saying he didn’t believe the group would ever produce a draft bill.

The agriculture worker visa bill passed by the Judiciary Committee has drawn limited support. It includes a "touchback" requirement that is unworkable for year-round operations like dairy farms. It also lacks an "at-will" employment arrangement by requiring a contract for every visa worker. IDA has made its concerns about that bill known to Congressman Labrador and will con-tinue working with him to try to ensure that it is modified so that it meets the needs of dairy producers when it is brought to the floor of the House for a vote.

Farm Bill

The House of Representatives continues to struggle to pass a new five-year farm bill. The current extension of the 2008 farm bill expires on September 30th. The Sen-ate has passed its bill and named the Members who will serve on the conference committee to resolve the differ-ences with the House bill.

The House passed its "farm bill farm bill" in July after the Republican leadership separated out the nutrition assis-tance provisions. A separate bill reforming the Supple-mental Nutrition Assistance Program (SNAP) or "Food Stamps," passed the House on September 19th by a very close vote of 217 – 210. That bill, which proposes to cut $40 billion from SNAP over the next 10 years, passed with only Republican votes.

Idaho Dairy Focus - September 2013

Page 3

Back-to-school season is an important one for Idaho's dairy producers. The weather is turning cooler and our partners in agriculture are in the heart of harvest. It may not be obvious to our dairy farmers, who are busy pro-ducing some of the finest milk in the world, but staff at United Dairymen of Idaho is hard at work on several im-portant initiatives.

Uniquely, Idaho's dairy farm families have chosen to offer free nutrition education curriculum and resources to schools and teachers throughout the state. This benefit is unmatched and has provided real teaching advantages for those using it. Curriculum is available to any classroom-- from preschool to high school-- and we encourage requests be submitted through our website at www.idahodairycouncil.org.

Our staff works regularly with schools, teachers and parents to not only fulfill requests for curriculum, but also to conduct comprehensive nutrition education to enhance our quality materials being used in class-rooms.

Back-to-school season is also an ex-citing time for our Fuel Up To Play 60 program (FUTP60). FUTP60 is a national partnership between the dairy industry and the National Foot-ball League (NFL) to encourage healthy eating and physical activity in schools.

Maddie Stapleton from Nezperce was selected as one of two students from Idaho to serve as a State Ambassador for FUTP60 from a nationwide search that drew more than 1,000 applicants. Maddie has lofty goals for the pro-gram this year at her school.

"I want to thank the Idaho Dairy Council and the FUTP60

Program for the opportunity to attend the 2013 Student Ambassador Summit," said Maddie. "I plan to use the leadership and team building skills that I learned at the summit to work toward the goals that I have set for the 2013-14 school year." Her goals include increasing high school participation in FUTP60 and working with the ath-letic director to sell chocolate milk in concessions during athletic events. "I am hoping this will encourage athletes to refuel with chocolate milk instead of sugary sports drinks."

Fall is also a time to celebrate healthy lifestyles and United Dairymen of Idaho has long been a sponsor of the Women’s Fitness Celebration to further our nutrition education message among women. This year, the Celebration has been rebranded as FitOne and we’re looking forward to participating. We’ll have a number of dairy families volunteering at our event, including on Saturday, September 21st, where we will distribute chocolate milk to the thousands of women, men and children who finish 5k and 8k races.

Finally, we are gearing up for the United Dairymen of Idaho An-nual Meeting, held at the Boise Centre in downtown Boise on November 7th and 8th. If you’ve ever considered attend-ing, but haven’t done so, I encourage you to attend. I’m looking forward to meeting producers from across the state and I’m excited to share my own vision for this or-ganization with the audience.

If you have any questions for our team, please don’t hesi-tate to contact us! We can be reached at 208-327-7050 or info@udidaho.org.

Back-to-School Season Highlights Importance of Nutrition Work

By: Karianne Fallow, CEO, United Dairymen of Idaho

5 Ways to Build Healthy Habits that Last a Lifetime

Wake up to the benefits of break-fast

Enjoy eating together at family meals

Base your plate on nutrient-rich foods

Move for 60 minutes daily – fun stuff counts

Pour one more (glass of milk) for better bones and blood pressure

Page 4

Idaho Dairy Focus - September 2013

With 50 million babies under three years old and another 15 million births each year, demand for milk formulas is surging in China. China’s value share of the global milk formula segment (including infant, toddler and follow-on formulas) is projected to rise from 34% in 2012 to 44% by 2017—even with its one-child policy—as increasingly prosperous consumers seek out the convenience and bal-anced nutrition that formulas offer their children.

This past August, to seize export opportunities for U.S. dairy ingredients in this high-value growth category, the U.S. Dairy Export Council (USDEC) hosted Chinese infant formula manufacturers on a visit to Idaho to tour a dairy farm, two whey protein plants and two skim milk powder operations. They also met with Karianne Fallow, chief ex-ecutive officer, United Dairymen of Idaho (UDI). The goal: Elevate interest and confidence in the U.S. dairy industry as ideally positioned to supply China’s sharply rising dairy import needs.

This is just one of a number of ongoing demand-building activities conducted on behalf of Idaho farmers and dairy producers across the country through USDEC, supported primarily by the checkoff. UDI provides base funding for some ingredient export marketing activities such as the visit of the Chinese infant formula manufacturers, and USDEC complements with support it receives through the checkoff and USDA for overseas market development. Such close collaboration ensures that farmers’ invest-ments are fully leveraged to, in turn, maximize farmer impact on of increased export and ingredient sales.

With a growing proportion of the U.S. milk supply sold overseas (in fact, nearly one of every seven milk tankers that roll out of producer driveways is turned into a dairy product consumed overseas)—total U.S. exports now re-quire the milk from more than twice as many cows as are in Idaho. Yet, as one of the largest dairy production states in the country with an influx of new cheese plants and plant expansions, Idaho is undeniably critical to U.S. ex-port growth, and USDEC and the checkoff are assisting the state’s industry to position and showcase it as a con-sistent and first-rate supplier across the ingredient and cheese spectrum for best-prospect, high-value growth segments overseas.

In addition to activities such as the visit by Chinese infant formula manufacturers showcasing Idaho milk powder and whey facilities, other recent initiatives have focused on:

Milk Protein Concentrates (MPC): With growth of MPC production in Idaho, particularly driven by Idaho Milk Products new dedicated MPC production facility, USDEC has worked collaboratively to develop this category. Working alongside the checkoff-funded Dairy Research Institute and state dairy research cen-ters, the three organizations have focused on more precisely identifying the nutritional value of MPCs to expand their functionality for higher-value growth markets such as medical nutrition, a segment that represents 30-40 percent of MPC demand, according to a study conducted by USDEC last year. Another related initiative included new nutritional research that improves on traditional methods of measuring protein quality that demonstrated that MPCs provide a 30-percent protein advantage over competing pro-teins, a key selling point in many high-value applica-tions.

Cheese: Last year, USDEC and Glanbia Foods were recognized by the state of Idaho with an "Valued Partner" award for their work with Idaho dairymen and processors to develop markets for U.S. gouda cheese in Mexico. Even though Mexico has long been the largest overseas customer for U.S. cheese, about half the cheese consumed in Mexico is gouda—a vari-ety the United States historically didn’t make. But through a comprehensive strategy—including market research, manufacturing assistance, and buyer matchups—USDEC identified an opportunity and pro-vided assistance to the U.S. dairy industry to produce and export gouda processing cheese to Mexico. U.S. sales of gouda by U.S. processors to Mexico grew from zero in 2008 to 31 million lbs. (over 300 million lbs. of milk) in 2012, representing 21 percent of U.S. cheese sales to the country.

For more information about U.S. dairy exports and US-DEC, check out its website at www.usdec.org.

Checkoff Programs Work to Create Export Outlets for Idaho Milk Production

By the US Dairy Export Council

Page 5

It was once said that when the U.S. economy sneezes, the world catches a cold. Although this statement rings true in regards to the U.S., the same could be said about China especially in regards to commodity demand. China’s appetite for commodities has been ferocious. China is the world’s largest grain and dairy importer as well as the world’s largest market for industrial commodi-ties (iron ore, copper, etc.). We all know that China’s ex-plosive growth and urbanization has been a boon for na-tions that produce and export raw materials. However, recent news regarding China’s economic slowdown has been front and center with the financial world and its analysts scrambling to revise forecasts following recent unfavorable economic news. Most recently Citigroup lowered its GDP growth forecast for China to an increase of just over 7%, a shocking num-ber relatively speaking, from a country that has seen dou-ble digit annual increases over the past decade. Obvi-ously this is nothing to "sneeze at" as one could expect the ripple effect to be felt domestically.

Regardless, demand does not seem to be waning espe-cially in regards to agricultural commodities, dairy specifi-cally. Food security has become a top priority for the Chi-nese government as China’s population sees further ur-banization and wealth accumulation. In fact, China is halfway through its 12th Five-Year Plan set into motion in 2011. The plan sets economic targets, allows for expenditure in research / development in conjunction with setting agri-cultural goals as it relates to food security. In short, agri-cultural modernization and domestic production capacity are at the forefront of China’s plan. China’s goal from an agricultural perspective is to improve yields and quality resulting in less dependence on imports. Although this plan is set to run through 2015 preparation has already begun on the 13th Five-Year Plan. As one could imagine food security will once again be a top priority in China’s end goal of establishing a harmonious and moderately well off society.

(Continued on page 7)

In terms of dairy, Chinese consumer spending has in-creased in double digit numbers with U.S dairy exports exceeding 440 million dollars in the last year. Although impressive, the dairy market in China is still in its infancy. As demand contracts in the developed world, the emerg-ing markets will offer opportunity for U.S. dairy exports.

Dairy consumption is expected to grow by nearly 120% by 2020 and China has neither the tools nor resources to sup-port this explosion in demand domestically.

Milk consumption alone has tripled in the last decade and it is estimated that urban dwellers consume nearly 5x more dairy than their rural counterparts. Since China does have domestic production limitations due to ab-sence of agricultural land and water resources, import dependence has roughly doubled. From 2001-2012 im-port dependence increased from 6 % to roughly 13% for all agricultural trade resulting in a trade deficit of 31 bil-lion dollars in 2012 according to the United Nations FAO. China, a country unaccustomed to deficits, seems to be deficit in both the know-how and natural resources nec-essary to ensure food security and although food security is a top priority the Chinese are still perfecting efficiency and productivity in the agriculture arena.

Looking Outside Idaho’s Borders: Chinese Dairy Markets Growing as

Economy Contracts

By Ryan Cox

Idaho Dairy Focus - September 2013

Page 6

Idaho Dairy Focus - September 2013

Washington, D.C. - Idaho Congressman Mike Simpson, Chairman of the Appropriations Subcommittee on Inte-rior and Environment, issued the following statement on the Environmental Protection Agency’s (EPA) proposed rule yesterday which would establish federal regulatory jurisdiction over non-navigable streams, wetlands and other water resources. Currently, non-navigable waters are regulated by the states.

"Like many people who have watched this issue carefully, I’m very concerned about this proposed rule. Most farm-ers and ranchers I talk to are scared to death about the possibility that the Environmental Protection Agency would be able to regulate their irrigation ditches, drain-

age ponds, and even groundwater, and I understand why," said Simpson. "In the West, water is critical to our way of life. Allowing the federal government to claim jurisdiction over state waters would have a devastating impact on rural communities throughout our state and the food supply throughout our nation. For that reason and others, I have included language in the FY14 House Interior Appropriations bill that will prevent any attempt by the EPA to claim additional jurisdiction over state wa-ters and increase its already excessive authority over Western farmers, families, and businesses."

###

Genomic testing of dairy cattle is a new technology that may be used for herd improvement. Our multi-state dairy research and extension group (Washington State University, University of Idaho, and University of Florida) is investigating new fertility traits for which genomic tech-nology might be used. We are interested in what dairy producers have heard or thought about genomic testing. We invite you to share your thoughts by completing a short survey at: https://www.surveymonkey.com/s/6G8L8WS

The survey will take approximately 5 minutes to com-plete. All responses will be anonymous. Thanks for help-ing us understand dairy producer opinions and educa-tional needs related to genomics.

Simpson’s Statement on EPA’s New Rule on Non-Navigable Waters

Survey of dairy producers regarding

genomics

Joe Dalton, University of Idaho

Dale Moore, Washington State University

Idaho Somatic Cell Counts and Production Growth at a Glance

According to DHIA herd Somatic Cell Count (SCC) aver-ages Idaho has the lowest SCC in the nation coming in at 159,000. The next closes was Michigan, New Mexico, Ore-gon, Vermont and Wyoming at 161,000. The national av-erage stood at 200,000. Sixteen states were below 200,000 and five states were above 300,000.

From 2002 – 2012 Idaho was the fastest growing state in number of dairy cows with an increase of 192,000 head, a jump of 49.48%. The top three dairy states led the nation in overall production increases. Idaho was second only to California in total milk production increase; Idaho in-creased production by 5.4 billion pounds an increase of 66.25%. California increased by 6.7 billion which is an overall increase of 19.21%. Wisconsin came in third with a 5.2billion pound increase which translates into overall increase of 23.3%.

(Elections - Continued from page 1)

Resolutions Committee

Arie VanStraalen – Jerome

Don Gaalswyk - Castleford

John Hansen – Rupert

Matt Nelsen - Jerome

District III

IDA Board

Calvin Lloyd – Bancroft

Dale Mortimer – Rigby

Allan Swainston - Preston

Resolutions Committee

Alan Reed – Idaho Falls

Kent Aston – Weston

(Federal Dairy Issues - Continued from page 2)

The next step on the farm bill is for House and Senate conference committee members to begin to work out the differences in what the two bodies have passed. With wide differences in approaches to the farm safety net reforms, including dairy, and the gap in funding levels for SNAP, the conference committee has its work cut out for it.

Ethanol Policy

There is clearly more and more interest in the Congress for making adjustments to the Renewable Fuel Standard (RFS) that calls for an ever increasing amount of ethanol to be blended into gasoline in this country. IDA sup-ported a call for the EPA Administrator to use existing authority to roll back the requirement for blending corn ethanol into gasoline last year – a call that came following the most devastating drought the country had seen in six decades. That request was ultimately denied.

What is different now is the fact that overall gasoline utilization in this country is down due to more and more fuel efficient vehicles and as Americans drive less as a result of the sluggish economy. The ethanol requirement is a hard number of gallons that must be blended each year – a number that doesn’t change even if less gasoline is being used. Gasoline refiners have begun to make the Congress aware of what they call the "blend wall." That is the point at which there are not enough gallons of gaso-line being used to blend with the increasing amount of ethanol required.

There are also several bills that have been introduced in the Congress this year to roll back requirements to blend ethanol into gasoline. Some would prohibit the EPA from moving from E10 to E15. There are also bills to eliminate the RFS entirely and another that would reduce the num-ber of gallons required to be blended into gasoline.

IDA is part of a broad-based coalition working in Washing-ton, D.C. for either a regulatory or legislative fix to the feed cost pressures dairy producers face caused by fed-eral ethanol policy. There will be a number of "bites at the apple" on this one over the next six months including regulatory action by the EPA administrator to roll E15 back to E10 or to temporarily reduce the blending re-quirement. If it falls to Congress to act, this looks to be an issue for early in 2014.

(FC Stone - Continued from page 5)

(Source: OECD)

The expansion in demand reflects a growing middle-class, expanding populations and further westernization of di-ets. With New Zealand dairy companies already investing heavily in China, we expect that U.S. dairy farmers in gen-eral – and in Idaho in particular - will find opportunity in fulfilling needs where New Zealand cannot. Add to this, product needs in other emerging markets throughout Asia (ex. Indonesia), and one will conclude that the cur-rent course is set - demand for US product will continue to play a widening role in serving the needs of the global community.

Idaho Dairy Focus - September 2013

Page 7

195 River Vista Place

Suite 308

Twin Falls, Idaho 83301

Board of Directors - United Dairymen of Idaho

Tony VanderHulst—President, IDA; Co-Chair, UDI Dave Rallison—Vice President, IDA Adrian Kroes—Treasurer, IDA

Tom Dorsey—Chairman, IDPC; Co-Chair, UDI Bob Naerebout—Executive Director, IDA Karianne Fallow—CEO, IDPC

John Brubaker Mike Siegersma Brian Esplin Bernie Teunissen Pete Wiersma

Arie Roeloffs Dave Veenhouwer Steve Ballard Dan Gilbert Willie Bokma

Jeannie Wolverton Kim Korn Lou Murgoitio Greg Andersen

September 23rd Resolutions Committee, Industry Relations Committee &

IDEAL Board of Managers Meeting - IDA Offices, Twin Falls

October 14th Daily Dairy Report Breakfast - Elevation 486, Twin Falls

(see more information below)

November 5th UDI Board Meeting - Boise Centre, Boise

November 6-8th UDI Annual Meeting - Boise Centre, Boise

Upcoming Events

Daily Dairy Report Outlook Breakfast Invitation

Daily Dairy Report analysts are having an Outlook breakfast on Monday, Oct. 14 from 7:30 am to 9:30 am at Eleva-tions 486 in Twin Falls, Idaho. The buffet breakfast begins at 7:30am with the program featuring dairy economist Mary Ledman, grain and livestock analyst Sarina Sharp, and risk management advisor Sara Dorland. Idaho Dairy-men’s Association is one of the sponsors of this event. Space is limited so reserve your spot by Oct. 7 by emailing mary@dailydairyreport.com.

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