National Dairy Crisis Continues—Part 2

National Dairy Crisis—A Way Forward, Part 2

By Laurie Greene, Editor

In our continuing coverage of the national dairy crisis marked by high inventories and below-production costs-prices, industry proponents are considering ‘market responsive’ ways to help with inventories, such as donating to the Feeding America organization or to other food banks. Tom Van Nortwick, owner and publisher of Fresno-based Agribusiness Publications, which has published a dairy magazine for 35 years, has been closely involved with hundreds of dairy producers from 2009 through June 2014 in the organization and establishment of the National Dairy Producers Organization. This nationwide organization focuses on keeping dairies profitable especially when market conditions squash dairy pricing.

Van Nortwick, who believes donating excess milk would be relatively easy and painless for the dairy industry, commented, “We are not going to specially package it; it is going to be what it is and where it is. It is then their responsibility to deal with it after that. The milk has already been processed and stored, and it’s waiting to be sold.”

In picking up all these excess dairy products, food banks such as Feeding America would dramatically reduce inventories. Van Nortwick explained, “We have found in studying these inventory levels, that when inventory gets to a certain level, it starts to impact the value of what someone is willing to pay me—a dairy producer—for the milk that I am pulling out of our cow today. And so we are recommending to our dairy producers that it might take literally 15 cents to impact the price of milk today which is currently $5 under the price of production and $7-$10 away from profitability.”

“The idea,” he continued, “is to have producers put up 15 cents per hundredweight into a savings account, which, when needed, would buy up excess inventory on the finished product side—the milk, cheese, milk powder and butter markets. Producers would then donate the purchased product to churches, food banks and Feeding America.

Tom Van Nortwick further expounded, “What if you invest $1 and get a $10 return? What if you invested 15 cents and got a $10 return? Is that a great plan? That is a great plan. The ‘investment’ is actually buying up [excess] inventory from the inventory [of processors and manufacturers] so it is no longer there. Because all of that is tracked, everybody knows how much there is and where it is. So if you are watching the market, you know if you should be buying more cheese, or making more cheese, or more powder. GM doesn’t make more cars than the dealers can sell; otherwise GM shuts the plant down. Everybody screams and hollers, but guess what? They know if they are going to survive, they have got to back off and not make more cars until the dealers, the selling organizations, pick up the slack.”

Van Nortwick says the dairy industry needs to focus more on the milk after it leaves the farm, “It is vitally important that we in the dairy producers sector start paying attention to what is going on with the milk, and the products being manufactured from milk after it leaves the farm. We are doing a wonderful job in how we produce it, the care and keeping of the animals, the sustainability of the environment, the recycling of the waste material; all of that we do better than anybody else in the world.”

“Do we need to be ever watchful?” he asked. “We have a new program called, ‘Picture Perfect’ in the industry, especially agriculture. All of agriculture needs to be ‘Picture Perfect.’ Do you know why? ‘Because everyone has a camera. Everyone’s got their own video recorder and anything can be seen anytime and filmed anytime. And a picture taken can go viral tomorrow, or tonight—even while we are asleep. So, we have to be picture perfect. We already do that.

He implored, “I want to say to dairy producers across the country, ‘You win. You make the most. You make the best. But that is not what we need right now in order to be sustainable. We need you to pay attention to your milk and what happens with your milk after it leaves the farm.”

______________________________

Links:

National Dairy Producers Organization

Feeding America

California Ag Today2021-05-12T11:17:14-07:00February 25th, 2016|

Dairy Prices Still Low

UC Davis’ Bees Butler on Low Dairy Prices

By Laurie Greene, Editor

As previously reported, the dismal below-production-costs dairy prices in California—the #1 dairy state—as well as in the rest of the nation, emanate from excessive inventory and slumping sales, particularly in the export market.

Leslie (Bees) Butler, a UC Davis Cooperative Extension specialist and lecturer in the Department of Agricultural and Resource Economics, explained why dairy producers don’t cut back on milk production. “It is easier said than done,” he said, “and for many producers, it comes down to an income problem. Most production units are set up on a certain sort of ‘scale,’ if you like. So if I am all set up ready to milk, let’s say, 800 cows, or 1000 cows, and then you come along and tell me, ‘Well, you ought to reduce it a bit.’”

“Quickly, I, the dairyman, have to think of what I can do,” said Butler. “There may be a couple of things I can do. First, I can get rid of some cows, my lowest producing cows. You can do that, but it would be a temporary solution to the problem. The second is don’t add those high-producing heifers back into the herd, but they are the most efficient cows. So as you do add them in, you have to cull more lower-producing cows. Many heifers are much better producers than their mothers, so it just reduces the lifecycle of the poor mom.”

“And of course, cash flow in the dairy business is so important,” emphasized Butler. “You know there is a limit to how much a dairy farmer can reduce his income without impacting too seriously his ability to pay off loans, etc.”

California Ag Today2021-05-12T11:17:14-07:00February 17th, 2016|

National Dairy Crisis—A Way Forward, Part 1

A Way Forward Out of National Dairy Crisis

First in a Series

By Patrick Cavanaugh, Deputy Editor

The national dairy industry is in crisis right now. Milk Prices are at an all-time low due to oversupply and drastically lowered exports. The seesaw scenario has inventories up and prices down below production costs.

Tom Van Nortwick, owner and publisher of Agribusiness Publications based in Fresno, has published a dairy magazine for 35 years. He was closely involved with hundreds of dairy producers from 2009 through June 2014 in the organization and establishment of the National Dairy Producers Organization nationwide. The organization focuses on keeping dairies profitable especially when market conditions force down dairy pricing.

Tom Van Nortwick

Van Nortwick told California Ag Today, “The biggest problem our dairymen are facing today in California and across the country is that the price of milk, as set by the market and by supply and demand, is actually below the cost of production. So they are making a hundredweight of milk; it is on the market for sale; but the price that they are receiving for every hundredweight of milk is actually lower than what it costs them to make it. And that has been going on for most of 2015 and now we are heading into ’16 towards ’17, and there doesn’t seem to be a solution in play from anyone, anywhere.”

“The big question is how can this be sustainable for dairies, which, over the last 10 years, on average, have had milk prices below production costs?” Van Nortwick asked. “We are not sure,” he explained. “In fact, what we have seen is huge attrition in the dairy industry.”

“In September 2011, there were 110,00 dairy producers in America,” said Van Nortwick. “Today, there are 45,000-60,000 milk producers at some level in the country. We have had huge attrition as we have gone through nearly a decade of really high volatility and low prices. For the majority of the time, especially the last 7 years, it has been extremely difficult.”

“We had a wonderful 2014 when supply and demand were more in balance and there were no excesses,” Van Nortwick stated. “Our global milk sales were high, and yet that has now changed, driving the price of milk throughout 2015 to unsustainable [low] levels.”

Van Nortwick observed that survivors in the dairy industry, particularly in California, have been able to diversify into other crops for positive cash flow. “Whether it is nuts or almonds, of course we are going pillar to post with almonds in California anyways,” he remarked. “Someone the other day said, ‘Hey Tom, you might have to get used to the fact that California is more suited to produce these specialty crops than it is to produce feed for cows to turn into milk.’”

Van Nortwick contends there is a way for the dairy industry, not only in California, but nationally, to do something about these low prices. “The proposal we make is all about a way forward. Dairy producers in this country who have been in their barns over many years and have seen these conditions, have asked, ‘What if we did it this way?’”

“So when we formed the National Dairy Producer’s Organization nearly five years ago,” he elaborated, “incorporated in the contract with producers was a long list of recommendations that needed to be implemented. We have not yet been able to implement very many of these and there are good men who are continuing that effort,” he noted.
“But one of the things we wanted to talk about most,” Van Nortwick said, “was the Dairy Pricing Organization originating from Robin Berg, a dairy producer in Wisconsin, that gave specific ideas to what dairy producers could do. We proposed that price volatility could be removed from the marketplace by dairy producers being market-responsive with their milk production on the farm, relative to profitable demand in the marketplace. If you make too much milk, and it cannot be sold, the price for—not just that excess milk—but all milk, goes down.”

Nortwick further explained, “So picture a great big tank that we fill up every day, and everyday it goes down. But if we [over pour and] push milk out of the top of that tank and any of it spills over the side and onto the ground, then every bit of milk in the whole tank becomes less valuable.”

“So, we have to be market responsive,” he continued, “How much milk can we use at any given time? The big dilemma that has come about today, is that the high global demand we were enjoying in 2011, 2012, 2013, and even as far back as 2010, was double digit growth in every one of those four years. When the producers finally mitigated their excess milk production in 2013, dramatic price increases in 2014 resulted. Milk was at record levels during that nearly twelve month period of time.”

Van Nortwick cautioned, “Unfortunately what was ignored were warnings—ample signs available to us in the first quarter of 2014, even in the fourth quarter of 2013—that should have warned dairy producers, ‘We are losing; demand is falling. Don’t keep increasing the amount of milk you make every month.’”

Van Nortwick clarified this loss in demand was mostly due to global exports. “We have sustained, for the most part, all of our domestic demand,” he stated, “Those numbers have not changed at all.”

“But here is that tank of milk overflowing,” he illuminated, “and because our tank overflowed, the price of all of that domestic milk went down too! So even though we did not lose domestic consumption, we lost price because of excess milk production on the farm. The global market didn’t take it.”

“At the height of that boom, 17.5% of our total production was going global,” said Van Nortwick. “How much did global fall? It plummeted at least 50% when that bubble burst.”

“Since then, about half as much of our milk production in the United States is going global. What were the consequences? We had a 31-35% reduction in milk price nationwide for all milk—not just the excess milk that was going global—but all milk in America,” Van Nortwick noted.

Van Nortwick explained the dairy industry needs a sure approach to manage increased prices at a viable profit level. There must be a dramatic decrease of milk in the tank.

Van Nortwick offered several ways to tackle it, including a buyback program that donates milk products to churches and food banks across America. “Robin Berg, a dairy producer, came forward and said, ‘There are two ways to attack this: We can be market-responsive with milk production on the farm or we can go to the other end after it has been manufactured and sitting in storage, and the inventory is rising to the point where it is beginning to depress the price of milk paid to me (the producer). We could go in with dollars that we have set aside and saved, and we can remove that inventory, to help maintain a viable, profitable price for producers.”

Further describing the scenario, Van Nortwick said, “We have prevented milk from spilling on the floor because dumping is not a solution, it is a lose-lose plan. Get it manufactured and be ready on the other end.”

“Food insecurity is kind of the new insecurity,” he declared. “There are 49 million people in America who are underserved and have food deficiencies in their lives all the time.”

“What are we doing about it?” asked Van Nortwick. Feeding America, food banks and churches across this country have the infrastructure not only to take it in and house it, but also to immediately distribute it. Feeding America, a network of food banks, is leading the fight against hunger in communities nationwide and serves 46.5 million Americans in need.

Van Nortwick went on, “There is a sign on a little church in our neck of the woods, ‘Free Food-Saturday.’ So apparently, they are going to have a free distribution of food. That infrastructure is already in place! Give them the commodities they need to feed the 49 million people. Have it removed [from the market supply]. We will pay for it and donate it to them. They pick it up. They’ll even transport it. They will pay to move the products where they need to be distributed to the people who need the food.”

Feeding America is onboard and wants to do it, according to Van Nortwick. “Our people have met with their people who said they can take all that we can provide.”

Readers can learn more about Dairy Pricing and the goal of becoming more Market Responsive with their milk production on the farm by visiting www.dairypricing.org or www.my-dairyman.com.

California Ag Today2021-05-12T11:17:14-07:00February 1st, 2016|

New Dietary Guidelines for Healthy Eating

HHS and USDA Release New Dietary Guidelines to Encourage Healthy Eating Patterns to Prevent Chronic Diseases

Secretary of Health and Human Services Sylvia M. Burwell and Secretary of Agriculture Tom Vilsack TODAY released updated nutritional guidelines that encourage Americans to adopt a series of science-based recommendations to improve how they eat to reduce obesity and prevent chronic diseases like Type 2 diabetes, hypertension, and heart disease. The 2015-2020 Dietary Guidelines for Americans is the nation’s trusted resource for evidence-based nutrition recommendations and serves to provide the general public, as well as policy makers and health professionals with the information they need to help the public make informed choices about their diets at home, school, work and in their communities.

The newly released 8th edition of the Dietary Guidelines reflects advancements in scientific understanding about healthy eating choices and health outcomes over a lifetime. This edition recognizes the importance of focusing not on individual nutrients or foods in isolation, but on the variety of what people eat and drink—healthy eating patterns as a whole—to bring about lasting improvements in individual and population health.

“The Dietary Guidelines for Americans is one of many important tools that help to support a healthier next generation of Americans,” said Secretary Vilsack. “The latest edition of the Dietary Guidelines provides individuals with the flexibility to make healthy food choices that are right for them and their families and take advantage of the diversity of products available, thanks to America’s farmers and ranchers.”

The specific recommendations fit into five overarching guidelines in the new edition:

1. Follow a healthy eating pattern across the lifespan. Eating patterns are the combination of foods and drinks that a person eats over time.

2. Focus on variety, nutrient-dense foods, and amount

3. Limit calories from added sugars and saturated fats, and reduce sodium intake

4. Shift to healthier food and beverage choices

5. Support healthy eating patterns for all

Healthy eating patterns include a variety of nutritious foods like vegetables, fruits, grains, low-fat and fat-free dairy, lean meats and other protein foods and oils, while limiting saturated fats, trans fats, added sugars and sodium. A healthy eating pattern is adaptable to a person’s taste preferences, traditions, culture and budget.

Importantly, the guidelines suggest Americans should consume:

1. A variety of vegetables, including dark green, red and orange, legumes (beans and peas), starchy and other vegetables

2. Fruits, especially whole fruits

3. Grains, at least half of which are whole grains

4. Fat-free or low-fat dairy, including milk, yogurt, cheese, and/or fortified soy beverages

5. A variety of protein foods, including seafood, lean meats and poultry, eggs, legumes (beans and peas), soy products, and nuts and seeds

6. Oils, including those from plants: canola, corn, olive, peanut, safflower, soybean, and sunflower. Oils also are naturally present in nuts, seeds, seafood, olives, and avocados.

Further, Americans should be encouraged to consume:

1. Less than 10 percent of calories per day from added sugars. ChooseMyPlate.gov provides more information about added sugars, which are sugars and syrups that are added to foods or beverages when they are processed or prepared. This does not include naturally occurring sugars such as those consumed as part of milk and fruits.

2. Less than 10 percent of calories per day from saturated fats. The Nutrition Facts label can be used to check for saturated fats. Foods that are high in saturated fat include butter, whole milk, meats that are not labeled as lean, and tropical oils such as coconut and palm oil.

3. Less than 2,300 milligrams (mg) per day of sodium for people over the age of 14 years and less for those younger. The Nutrition Facts label is a helpful tool to check for sodium, especially in processed foods like pizza, pasta dishes, sauces, and soups.

Based on a review of current scientific evidence on nutrition, the 2015 edition includes updated guidance on topics such as added sugars, sodium, and cholesterol and new information on caffeine. For example, the 2015-2020 Dietary Guidelines is the first edition to:

1. Recommend a quantitative limit to consume less than 10 percent of calories from added sugars.

2. Reaffirm guidance about the core building blocks of a healthy lifestyle that have remained consistent over the past several editions

3. Suggest there is still work to be done to encourage more Americans to follow the recommendations outlined in the Dietary Guidelines.

The 2015-2020 Dietary Guidelines continues the nation’s dependence on California agriculture, which includes more than 400 commodities. According to the California Department of Food and Agriculture (CDFA) in 2014, the state produced nearly half of US-grown fruits, nuts and vegetables. Across the nation, US consumers regularly purchase several crops produced solely in California.

California’s top-ten valued commodities (USDA/NASS Crop Year Report 2014):

* Milk — $9.4 billion

* Almonds — $5.9 billion

* Grapes — $5.2 billion

* Cattle, Calves — $3.7 billion

* Strawberries — $2.5 billion

* Lettuce — $2 billion

* Walnuts — $1.8 billion

* Tomatoes — $1.6 billion

* Pistachios — $1.6 billion

* Hay — $1.3 billion

The 2015-2020 Dietary Guidelines for Americans is available at dietaryguidelines.gov.USDA has also released updates for consumers on ChooseMyPlate.gov, and new resources will soon be available on Health.gov from HHS that will help health professionals support their clients and patients in making healthy choices.

The Dietary Guidelines is required under the 1990 National Nutrition Monitoring and Related Research Act, which states that every 5 years, the U.S. Departments of Health and Human Services (HHS) and of Agriculture (USDA) must jointly publish a report containing nutritional and dietary information and guidelines for the general public. The statute requires that the Dietary Guidelines be based on the preponderance of current scientific and medical knowledge.

California Ag Today2021-05-12T11:17:15-07:00January 7th, 2016|

Thanks to California Ag!

Thanks to California Ag for Thanksgiving!

By Patrick Cavanaugh, Deputy Editor

As Americans enjoy Thanksgiving dinner, let us recognize that farmers, especially California farmers, have made our bounty possible.

California is a big turkey producing state, always ranking in the top six nationally.

In 1948, Sophie Cubbison, who was born in San Carlos, California and who graduated from California Polytechnical University in 1912, invented the Mrs. Cubbinson’s melba toast or cornbread stuffing most of us serve. (She even paid her way through college with the money she earned feeding farmworkers. Source: www.mrscubbisons.com)

What would Thanksgiving be without wonderful California wines and Martinelli’s (another great California company) great sparkling apple and grape beverages to celebrate our good fortune?

And all those amazing side dishes . . . the russet and red potatoes from Kern County; the sweet potatoes from Merced County; the many wonderful squash varieties including zucchini, yellow, acorn squash . . . are all produced by farmers and farmworkers in California.

Green beans, lettuce, tomatoes, olives, cucumbers, radishes, and carrots will grace the tables across America, thanks to California producers in ped and other areas of the state.

Don’t forget garlic, onions and mushrooms are all produced primarily in California!

California farmers produce it all, with the exception of cranberries!

Thanks Wisconsin!

(And New Jersey, Massachusetts, Oregon, Washington, and parts of Canada)

You can thank California egg producers for those tasty hardboiled deviled eggs on Grandma’s favorite serving dish.

Plus raisins, a great addition to dressings and other dishes, thanks to the raisin producers in Fresno, Madera and Merced Counties.

And of course walnuts, almonds and pistachios are big part of our savory stuffing recipes and our snacks.

Apple cider and apple pie? California, among the top five states, produces a wide variety of apples.

Wait! What about pumpkin pie? California farmers.

And the wonderful whipped cream? Thanks to the California dairy industry.

Did you know the turkey pop-up timer was invented in California? Yes, indeed. Back in the 1950s, the California Turkey Producers Advisory Board brainstormed to figure out how to prevent over-cooked turkeys, according to Leo Pearlstein, a Los Angeles pubic relations pro in the food industry, who was among the five original board members. One board member—a California turkey producer, as Pearlstein tells it—looked up at the ceiling, noticed the sprinklers and had a Eureka moment! He suddenly realized the ceiling sprinklers were triggered when heat melted a material inside the gizmo. For a complete explanation, see How Pop-Up Turkey Timers Work at home.howstuffworks.com/pop-up-timer1.htm.

From all of us here at California Ag Today,

Thanks to California Ag for serving us a delectable nutritious Thanksgiving!

California Ag Today2016-05-31T19:27:03-07:00November 24th, 2015|

Vandenheuvel Justifies FMMO in CA

Vandenheuvel Justifies FMMO in California

By Charmayne Hefley, Associate Editor

This Federal Milk Marketing Order (FMMO) hearing in Clovis, now in its seventh week, still has more ground to cover before it wraps up. Rob Vandenheuvel, general manager of the Milk Producers Council (MPC), reflected on the current California Marketing Order, “We’ve been operating under a separate system for many, many years. And while that may have worked for a good chunk of that time, in recent years, we’ve seen that the California system has not kept up with prices paid for milk in other parts of the country. So we’re trying to get on an even playing field.”

Vandenheuvel said resistance to the FMMO has come mainly from those who currently purchase California milk. “They’re not interested in a system that would require them to pay more for their milk,” he said. “They’ve had a pretty good deal in California, so they’re trying to protect it.”

He said some minor resistance comes from non-California dairymen concerned their prices could decrease should California join the FMMO. “There was talk earlier in this hearing that if dairy farmers in California were put on an even playing field and had more money paid for their milk, would they increase production? What impact might that have on the overall market?”

“When you look at California and the competition for land from pistachios and almonds,” Vandenheuvel said, “dairy is not the only agricultural interest here. So competition for land and competition for water are really going to put a lid on future growth—no matter what the dairymen get paid.”

Significant Losses

Vandenheuvel said the state’s current system has caused a significant profit loss for dairymen in California. “Our milk going to cheese plants is the largest class of milk sold in the state, but it’s still 45 percent of the total milk production. So, the state cheese price is less than the Federal price on that 45 percent of milk. The difference is a shortfall of nearly $2 billion since 2010 for the California producer.”

Vandenheuvel said when all dairies in the United States slumped in 2009, those outside of California were better able to recover under the FMMO than those inside under the CSMO. “When you look at the peaks and valleys that the dairy industry has gone through, we’ve had years like 2009, which was the worst ever,” Vandenheuvel said, “and 2012 was probably the second worst ever due to high feed costs. Most of the rest of the country recovered in the months and years following 2009 and then again 2012.

“California is still reeling. If we had sold off assets, we really haven’t recovered to where we were before 2009. So that $2 billion divided by the 2,000 dairymen that existed at that time in California was the difference between catching up and netting a profit. But actually happened, is that the industry has never recovered the losses, even after a few good years,” he noted.

Out-of-State Dairies Object to Federal Order

Vandenheuvel said that many California dairymen are looking to become part of the FMMO to get on a level playing field with the rest of the country’s milk producers. “If you buy into the theory that California dairymen got a fair price for milk will increase milk production and that would have a negative impact on the rest of the country,” Vandenheuvel said. “The best thing to happen to the rest of the country would be for California to go completely broke and shut down our entire dairy industry because they would be better off because we’d have twenty percent less milk in the whole country. That’s why I don’t think that those concerns are really strong. This hearing is more about the sellers of milk getting a fair shake and the buyers of milk not wanting to pay that fair shake.”

Vandenheuvel said that the way the dairy industry works—with milk spoiling each day—the government had to get involved in order to prevent buyers from refusing to buy one dairy’s milk and significantly devaluing the price of milk. “Cows don’t produce Monday through Friday only; there is no on or off spigot,” Vandenheuvel said. “So when you have a product that is being produced and piled up every day and has to be sold every day to a group of buyers who don’t have to buy every day –and they don’t have to buy from you—you’re at a huge disadvantage negotiating a fair price for that product.

“Imagine going to a car dealership where they had to sell a certain amount of cars that day or the vehicles would literally spoil, go bad and be worthless,” he noted. “You would have a great position to buy a car. That’s where we are, and that’s why the government got involved, said milk is important and we know dairymen are at a disadvantage. So we’re going to play referee between the two parties. Our problem in California is that that referee has been much more on the side of the processors keeping a low price in California.”

Two Main Proposals

Vandenheuvel said that two major proposals have been submitted to the USDA—one from the dairy-farmer-owned cooperatives and the other from the manufacturers. He said the USDA would decide upon the final proposal that will be voted on by producers.

“Manufacturers do not vote on Federal orders,” Vandenheuvel said, “It’s a producer vote. So it really comes down to the USDA. We think we’ve put together—as a producer coalition—a very sound, comprehensive approach of going to a FMMO while still respecting some of California’s issues—like our quota program; our transportation program.”

Vandenheuvel explained that it was very difficult to get the USDA to hold a hearing on the Milk Marketing Order. “We had to basically exhaust every alternative option in the state system,” he noted. “We tried a dozen hearings over the last ten years. We’ve tried legislation in California. We’ve tried suing the Secretary of Agriculture in California. We’ve tried protests and rallies on the steps of the capitol in front of CDFA, and at the end of the day last year our milk prices, compared to the rest of the country, had a bigger gap than we’ve seen in the last ten years.”

Vandenheuvel said the CDFA could have easily addressed many of the issues that caused milk producers to fight for a FMMO. Nevertheless, one issue, the CDFA could not have regulated for producers is interstate commerce. “That’s big for a state like California,” Vandenheuvel said. “We’ve got 35-40 million people here who drink milk and we’ve had situations in the past and currently in which milk is moving into California just to take advantage of the fact that California can’t do anything about it. Only a FMMO can regulate interstate commerce because of the way the constitution is drafted.”

Vandenheuvel said he hopes to see a recommended decision on the order by the middle of next year.

Patrick Cavanaugh2016-05-31T19:27:04-07:00November 9th, 2015|

Dairyman Cuts Diesel Emissions 92%

Kings County Dairyman Cuts Diesel Emissions 92% With Electric Mixer

By Laurie Greene, Editor

On his dairy in the Kings County town of Hanford, Philip Verway reduced his diesel consumption a remarkable 92% from 7,000 to 500 gallons in a given three-week period. His innovative secret to cutting diesel emissions is converting a diesel-powered commodity mixing machine to an electric mixer.

Kevin Abernathy, director of environmental services for the Milk Producers Council, said, “Rob Vandenheuvel, General Manager for Milk Producers Council, Philip and I helped him get a grant from the San Joaquin Valley Air Pollution Control District, a state-appointed board which aims to minimize diesel exhaust output. We put together a proposal, submitted it, and their governing board actually approved the grant. What began as a concept on paper led to the reality of the processes being implemented on-farm. We had it up and running in about three months. Most importantly, the end results are not only meeting, but exceeding our expectations,” said Abernathy.

The entire operation dramatically reduces total nitrogen oxides (NOX gases), pollutants in the San Joaquin Valley, “Our initial expectation based on the modeling was 22 tons of NOX emissions.” The post-project NOX rates were about two tons—a major reduction.

Abernathy said Verway worked with contractors Duport and Supreme to engineer the electrification of the vertical mixers and built some fail-safe components into the system. Impressed, Abernathy said, “Based on what I have seen, they have done a remarkable job, particularly on the multiple fail-safes. Hats off to Duport and Supreme for coming up with technology that works day-in and day-out, 365 days of the year.”

Abernathy also admired the ingenuity in the California dairy industry, “They continue to come up with some of the most extraordinary ideas. It is an absolute blessing to work with them, and they make my job so much fun with projects like this!”

California Ag Today2016-05-31T19:27:05-07:00November 2nd, 2015|

Milk Marketing Order in CA Worries Other Dairy States

By Kyle Buchoff, Assistant Editor

Tom Van Nortwick, owner and publisher of Agribusiness Publications in Fresno for the last 35 years, has been attending the USDA dairy hearing in Clovis to adopt a Federal Milk Marketing Order in California. Van Nortwick warned that should California go with the Federal Milk Marketing Order, the move could hurt prices for all milk producers across the nation.

“Dairymen in other parts of the country have expressed concern that if California dairymen were paid more for their milk, they may go ahead and produce more milk,” Van Nortwick said. “California is a milk-making machine with comparatively fewer dairies. More milk on the market has been proven to create volatility and huge price fluctuations up or down, depending on demand. So California producers’ getting paid more and producing more milk would reduce the price of all milk throughout the country.”

“We found that 2-3% too much milk in the market at any one time can create up to a 40% reduction in price paid to producers,” Van Nortwick explained. “And of course, California is not the only overproducing state; Wisconsin, Minnesota and other midwestern states are also overproducing at this time.”

Van Nortwick also pointed out, “Domestic demand is strong, but exports have shrunk by about 50%, which is about 8% of last year’s market. So when you add an 8% oversupply of milk volume to the market as we broach the time for holiday season orders, and there are strong indications that inventories of milk, butter, powder, and cheese are rising across the country, prices paid to producers will fall.

“Nobody needs prices to go any lower,” stated Van Nortwick. “Our counterparts in New Zealand, Australia, and the European Union are suffering mightily, even more than we are, with record-setting low prices because they think they can just produce more than they can sell. If you produce more than you can sell, you are going to take a hit, and unfortunately it is the producers who end up taking that hit.”

California Ag Today2016-05-31T19:27:06-07:00October 19th, 2015|

More on Federal Milk Marketing Order

Continued Coverage on Federal Milk Hearing in Clovis

More on Federal Milk Marketing Order: Let the Market Sort it Out

By Patrick Cavanaugh, Deputy Editor

Bill Verboort is the General Manager for AgriTech Analytics (ATA), a national company based in Visalia Calif. Owned by the Holstein Association USA, AgriTech is part of the U.S. Dairy Herd Improvement Association System, and provides data to dairy producers for management, genetic improvement and pedigree purposes. Verboort has been attending the USDA Federal Milk Marketing Order (FMMO) hearing in Clovis, Calif., which is gathering testimony from milk industry people who want, or do not want to abandon the California Milk Marketing Order and adopt the FMMO.

“I think it is a very historic day, because I think California is one of the only major markets outside the FMMO,” said Verboort. “When the Federal system came in the 1930s, there were good reasons for us to be on a state order due to geographic isolation, etc. Today, I don’t see us as geographically isolated as we once were. So why not be part of the FMMO?”

Verboort noted that the FMMO should put California producers on par with the rest of the country when it comes to milk and cheese prices. “That is the intended and anticipated effect,” he said.

Of course there are many against adopting the FMMO. “Some are saying if the California producer is going to get more money for his milk, he is going to produce more,” said Verboort. “If you look at the industry over decades, when the price of milk has gone up, producers have produced more. You’ve got to make hay when the sun shines, so to speak. And when prices are down, the cash flows are down, so a producer needs to get more cash. What is the solution to that? Produce more milk!”

“So the California producers are going to produce more milk whether the FMMO system is in place or not; at least that’s the way I see it,” Verboort explained. “But if our producers in California are at a disadvantage to producers in other parts of the country, we need to make an equitable situation here.”

“And the market will shake it out. It is as simple as that,” he said. “We can produce milk products more efficiently in California and I think that is good for the U.S. and for the consumer. If the producer can produce it here more efficiently by getting on the right strategy with the FMMO rather than the California milk order, then we are on the right track.”

“California producers have been on the short end of the stick for a long time,” Verboort said. “Even though last year was a very good year for most producers throughout the country, and for California producers as well, they still sold their milk for several dollars per hundred weight less than the rest of the country,” Verboort said.

As for the hearing taking place in Clovis, Verboort said it seems that the momentum is going in a good direction. “But we will find out; that is what these hearings are about,” he added.

AgriTech Analytics (ATA) is a certified Dairy Records Processing Center.

Part of the U.S. DHIA System, AgriTech Analytics provides data to dairy producers for management, genetic improvement and pedigree purposes.

By utilizing the reports and herd analysis made available by AgriTech Analytics, Herd owners are able to maximize profitability and better position themselves in today’s competitive dairy industry.

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Links:

AgriTech Analytics

U.S. Dairy Herd Improvement Association System

California Ag Today2016-05-31T19:27:07-07:00October 14th, 2015|

Cornell Kasbergen On Federal Milk Marketing Order

Continued Coverage of Milk Hearing

Dairyman Cornell Kasbergen: We Need Federal Milk Marketing Order

By Patrick Cavanaugh, Deputy Editor

Cornell Kasbergen, a dairyman in Tulare County, is fed up with the flawed California State Milk Marketing Order. So much so, that he and other dairymen and women have a great desire to switch to the Federal Marketing Order.

This idea is presently front-and-center in Clovis, CA as USDA officials are holding an historic hearing that may extend into early November.

“It started three to four years ago when our milk prices were dramatically less than those in the rest of the country, and we wanted to get our industry on a level playing field. It has been a lot of work getting the co-ops together, but we are just at the beginning of this whole process.”

Having the USDA here is, in itself, a big beginning,

Kasbergen has worked hard to drum up interest in the idea. “When I was a co-op board member at Land O’Lakes, Inc. [a national, farmer-owned food and agricultural cooperative milk cooperative], we worked with other dairy co-ops and their members to get educated. We discovered, for the last three to four years, California’s whey value in its milk pricing formula deviated from national prices, and California producers were losing money. Once we realized we were leaving a lot of money on the table—over a million dollars a day—it opened people’s eyes. That’s why we are having this hearing.”

“The California Department of Food and Agriculture intentionally left the state’s whey prices lower than the rest of the nation, and though we’ve been petitioning them over and over again to rectify the issue, they have failed,” said Kasbergen. “That’s why we have gone this route in getting our milk prices formulated by the federal government rather than by the state. Our state has really let us down.”

“The CDFA has taken hundreds of millions of dollars out of the dairy farmers’ pockets, the loss is killing the dairy industry in California,” said Kasbergen.

California Ag Today2016-05-31T19:27:07-07:00October 9th, 2015|