Calif. Dairy Organizations Collaborate Regarding Quota Program

Groups Launch Exploratory Effort to Solicit and Analyze Proposals

News Release

Recently, the United Dairy Families of California, California Dairies, Inc., Land O’Lakes, Inc., Dairy Farmers of America, and the STOP QIP organization announced a multi-phase process aimed at soliciting and analyzing industry input on California’s historic quota program.

Included in this process is a series of meetings, starting later this month, open to all dairy producers and interested parties. These meetings are intended to solicit various pathways for the state’s quota program.

1) This multi-phase process includes three key parts: The Think Tank, Producer Feedback, and Analysis.

2) The Think Tank phase is for information-gathering from various segments of the dairy industry. This will include the meetings identified below, where producers will be able to voice their opinion and contribute ideas or concepts.

3) The Producer Feedback phase will allow producers to comment and challenge the ideas developed in the Think Tank phase.

In the Analysis phase, dominant ideas from the Producer Feedback phase will be analyzed for economic impacts, and legal pathways to adoption will be determined.

This process will be implemented with the assistance of dairy industry economist Dr. Marin Bozic and dairy market analyst Matt Gould. Dr. Bozic and Mr. Gould will be conducting an economic analysis of the proposed ideas.

The first series of meetings associated with the Think Tank phase are as follows:

● Tuesday, July 30 – 2 pm to 4 pm – Embassy Suites, Ontario

● Wednesday, July 31 – 9 am to 11 am – Heritage Complex, Tulare

● Wednesday, July 31 – 2 pm to 4 pm – Turlock Ballroom

● Thursday, August 1 – 9 am to 11 am – Washoe House, Petaluma

Meeting space is limited. All participants are strongly encouraged to register at

www.dairyfamilies.org/events

Four Students Selected to Represent Real California Milk in Asia, Mexico

Student Ambassadors Share California Dairy Message with International Audiences 

News Release

The California Milk Advisory Board (CMAB) has selected four students to serve as interns in the second year of the international dairy leadership program. Jessica Brown, Stefani Christieson, KayCee Hartwig-Dittman and Makayla Toste will serve as dairy representatives, working with marketing teams representing CMAB during the summer in Mexico, South Korea and Taiwan.

The interns, selected from students enrolled in agriculture-related programs at colleges and universities throughout the state, were chosen based on academic achievement, connection to the dairy industry, and a willingness to travel abroad and learn more about international dairy sales and marketing as well as a plan to work in the California dairy industry in the future.dairy cattle

Over the six-week period, each intern will spend time with in-country CMAB marketing organizations—Brown in Taiwan, Christieson and Hartwig-Dittman in South Korea and Toste in Mexico—to gain a better understanding of these markets, consumer buying habits, and promotional efforts on behalf of California’s dairy industry.

Brown is currently enrolled at Fresno State, majoring in agriculture business. She was raised on her family’s vineyard in Tracy and has always had a passion for agriculture. Her desire to learn about agriculture outside of the U.S. has provided her with opportunities to study abroad, most recently in Spain. Because of her love of travel and learning about other cultures, Jessica is focusing on international marketing at college, with plans to work in this field of study upon graduation in 2020. Brown is a member of the agriculture marketing team at Fresno State and will be working with Steven Chu and Associates in Taipei, Taiwan.

Christieson is a recent graduate of the UC Davis, where she received her B.S. in Political Science and minors in economics and French. She will be attending graduate school in the fall at Sciences Po in Paris, France, for a year and then will complete the program at Fudan University in Shanghai, China in year two. Christieson plans to complete her master’s degree in international economic policy and pursue a career as agriculture economic policy advisor for an agriculture export market organization to help California farmers continue to expand into emerging and established markets overseas. Christieson will be working with Sohn’s Market Makers, Ltd. in S. Korea.

Hartwig-Dittman is currently enrolled at Fresno State, where she is majoring in dairy science and is employed at the dairy unit on campus. She has a culinary arts degree from Diablo Valley Community College and has experience working in the restaurant industry in California. Her love of travel and food has allowed her to travel outside of the U.S., where she has learned to use dairy products in new and creative ways with hopes to find innovative ways to introduce dairy to consumers around the world. Hartwig-Dittman will also be working with Sohn’s Market Makers, Ltd. in South Korea.

 Toste, a second-generation dairy farmer from Newman, received her B.S. degree in Animal Science with an emphasis in dairy science. During her last year at Fresno State, Toste served as the assistant herdsman for the Fresno State dairy unit, where she was responsible for the day-to-day operations of the dairy and an officer for the Fresno State Dairy Club. After the internship, she plans to work in the California dairy industry in promotion and marketing to help keep the industry viable for the next generation of farmers. Toste will serve as an intern with the team at Imalinx in Cuernavaca, Mexico.

“California accounts for more than 33 percent of all U.S. dairy exports so international trade is essential for our continued growth. Over the last decade, the CMAB has worked closely with partners in Asia and Mexico to develop markets for California dairy products. This program is focused on providing insight into international dairy marketing for future leaders like Jessica, Stefani, KayCee, and Makayla, who will work in the dairy business and one day serve on dairy industry boards and lead industry groups,” said Glenn Millar, Director of International Business Development for the CMAB.

The goal of the CMAB International Internship program is to provide agriculture/dairy college students an opportunity to learn about dairy foods and marketing in the international marketplace. The program looks to develop leaders who will serve on dairy industry boards and work in dairy foods production, processing, or sales/marketing.

Federal Milk Marketing Order in California in Effect Nov. 1

Questions Arise Regarding Milk Quota

Edited by Patrick Cavanaugh

Dairymen and women throughout California are working hard to provide milk and other dairy products for consumers in California and the world. Because the industry has struggled over the past decade with price swings that have often landed dairies in red, many dairies have gone out of business. Still, other operations relocated to others states where regulations are a fraction of what they are in California.

In June 2018, California dairy producers voted to establish a new Federal Milk Marketing Order (FMMO) for the state. The vote was a paramount step in a long process that would culminate with the new order taking effect on November 1. The order will adopt the same dairy product classification and pricing provisions currently used throughout the FMMO system.

California accounts for more than 18 percent of U.S. milk production and is currently regulated by a state milk marketing order administered by the California Department of Agriculture (CDFA). Once this new FMMO takes effect, more than 80 percent of the U.S. milk supply will fall under the FMMO regulatory framework.

Western United Dairymen is a trade association based in Modesto. Annie AcMoody is the Director of Economic Analysis. She explained that there have been questions from the industry regarding the upcoming FMMO.

Among the often asked question revolves around when the state switches to FMMO in November, what will happen to their quota if a dairy ships milk out of state?

Annie AcMoody: When our California state system goes away to make way for the Federal Milk Marketing Order (FMMO) in November, the Quota Implementation Plan (QIP) will be the language in place to ensure the quota system’s smooth transition into the FMMO system.

When we enter that new world, all market milk received from California producers at a California plant will be assessed for quota. By “received”, the language defines “to convey milk physically into a milk plant where it is utilized within the plant, or stored within such milk plant and transferred to another plant for utilization. This means that a milk truck driver cannot drive by a plant, wave hello to an operator, and keep on going out of state and still call this milk received in California. Basically, if your California milk leaves the state, you will not be assessed for quota.

But you also will not be paid for it. But, if your milk is 60% quota and only 40% of your milk goes out of state, you will be assessed on 60% of your milk and get paid quota on that same 60%. If your quota covers 100% of your milk and 40% of your milk goes out of state you will be assessed on 60% of your milk and get paid quota on that same 60%. In this instance, one could wonder if it makes much sense to keep your quota.

While it may not make much economic sense to hold on to quota you are not paid for, some reasons may validate that decision (perhaps it is expected milk will be shipped to a California plant in the near future). If you were to decide to hold on to that quota, it is important to keep in mind that “if quota is not made active by shipments of market milk to a California plant or cooperative association or is not transferred within the 60-day period, such quota shall revert to the Department”.

This excerpt from the QIP means that if your quota milk is not paid on for over 60 days, you will lose it, so you better sell it. This is likely going to be an issue if you ship to a proprietary plant and all your milk goes out of state. If you ship milk to a cooperative, there is more flexibility because that coop has the ability to combine quotas assigned to it by its members.

So as long as the quota total within the coop is not larger than the total amount of market milk produced and received in California, then there should be no issue for you as a quota holder.

What 
is 
defined 
as 
market 
milk?


Answer:
 Grade A milk.

If your milk is Grade B, you cannot have quota now and will not be able to under the QIP. You will not be assessed for it either. Currently, only around 3% of the milk in California is Grade B. WUD will keep an eye out on this topic to ensure that percentage does not deviate significantly. As a reassurance, this is not something that could grow from 3% to 50% in a month since fluid milk is not allowed to take in Grade B milk and the three largest coops in the state (CDI, DFA and LOL) committed to not taking in any more Grade B milk after the transition to the FMMO.

2017 Tulare County Crop Report Tops $7 Billion

Tulare Crop Report Shows 10 Percent Growth in Single Year

By Patrick Cavanaugh, Editor

Big numbers announced today from Tulare County Ag Commissioner Marilyn Wright on the 2017 crop year.

“Our value is 10.5 percent up from last year, at 7,039,929,000. So, that’s 669 million more than the previous year,” Wright said.

Marilyn Kinoshita, Tulare County Ag Commissioner
Marilyn Wright, Tulare County Ag Commissioner

And, of course, more water in the system probably helped, as it did in Fresno County, which announced $7.028 billion in its 2017 Crop Report, released earlier this month.

The dairy industry, which is prominent in Tulare County, came in number one again, representing 25 percent of the total value.

“Milk prices were stronger in early 2017, but they went down later in the year. And they continue to go down, but still it was a big part of the Tulare County ag receipts in 2017,” Wright said.

Following dairy were grape products—including juice grapes, raisins, and table grapes. Table grapes had a stellar year.

Navel and Valencia oranges were next. Cattle and calves ranked fourth, down from category number three in 2016, because cattle prices were off last year.

Tangerines, also known as mandarins, were number five, followed by almonds, cling peaches, and freestone peaches.

Lemons, were ninth on the crop list.

We only have just over 10,000 acres of lemons in the County, Wright said.

Wright said the value of this year’s crop report, $7.39 billion, is the third highest value Tulare County has ever reported.

Young Dairy Owner Plans to Thrive in Future

Nevin Lemos Prefers Jersey Cows

By Patrick Cavanaugh, Editor

Nevin Lemos could be the youngest person to own a dairy in California. The 21–year-old owns Lemos Jerseys in Stanislaus County.

Lemos is a fourth-generation dairyman east of Modesto in the community of Lockwood. He grew up on his family’s dairy, and now he’s on his own. His family’s dairy is Lockwood III dairy, which is about five miles from his dairy.

“I’m 21 years old, and I decided to start my own. I wanted to expand the business, and get a little bigger so we can all stay in business, be competitive,” Lemos said.

“We have a plan someday to consolidate the two, and this was our way to grow.”

“It’s my baby here, my business, my passion here,” Lemos explained.

He thinks that it’s a good time to get into the dairy business.

“I’ve had some dairyman that I look up to, and they gave me some advice that even though the milk price is down, this is the best time to get started,” he said.

“That’s if you can … weather through some of the bad times because it’s a long-term investment. This is not a business that you get into for a short while, so if you can buy the cattle at a reasonable price and keep that input down, you’re in pretty good shape,” Lemos said.

His operation is 400 Jersey cow dairy with a double six-herringbone parlor.

“You know, my parents have the Holsteins. I’ve grown up around the Holsteins all my life. I showed Holsteins in 4-H growing up and love the Holstein breed but decided to go with the jerseys for a few reasons. One is they’re high in fat and protein components. I ship to Hilmar Cheese, so there’s good incentive there to get a premium off the fat and protein. Also with the reproduction, the Jerseys breed back so well.”

Lemos said he gets a 30% pregnancy rate.

A lot of the dairy cow feed is grown around the dairy operation.

“My landlord farms the 50 acres with the dairy. And I purchase the feed from them,” Lemos said. “Of course, that’s one of the significant inputs into the dairy. Feed is a bit of a high right now with exports. I put all my corn silage in Ag-Bags … to minimize my shrink, and that’s been going pretty well.

Lemos said in June, he can say he’s been going after it and his dairy for one year, and he knows he’s going to keep on going.

“I will most definitely keep going. Just getting started is the most challenging part, especially in a year like this year. I’m breaking even … if not slightly in the black. But I look forward to seeing what it does in years to come,” Lemos said.

Just building the herd and establishing it, Lemos is going to sit on some money for a little while before he starts to see it again.

Still, he said of operating his own dairy at 21 years old, “It’s the dream, my passion, it’s really what I love, and I would not have it any other way.”

Hope Yet For California Dairy Industry

Proposed Federal Marketing Order Would Benefit California Dairy Farmers

By Brian German, Associate Editor

Chandler Goule, senior vice president of programs for the National Farmers Union
Chandler Goule, senior vice president of programs for the National Farmers Union

California gets hit the hardest when milk prices drop and it is the last state to recover from depressed dairy prices. The California dairy industry eagerly awaits a decision from the USDA regarding the move to a Federal Milk Marketing Order (FMMO). Chandler Goule, senior vice president of programs for the National Farmers Union, believes the state will gain from moving to FMMO.

“I think it will definitely be a win for the dairy industry,” said Goule, “and for our dairymen out there.” Goule anticipates increased participation in the margin revenue program that was incorporated into the FMMO.

Should the USDA hand down a positive determination, the move to a federal order would require a 2/3 majority vote from California dairy producers. “With California being so far from the corn and grain belt, even though you all produce a lot of food in California, it’s not necessarily feed additives for livestock,” Goule remarked.

Unfortunately, the FMMO has a much better chance of being voted in during a time when milk prices are low, according to Goule, as high milk prices may lessen voter turnout and sense of urgency.

“I’m definitely not advocating for low milk prices whatsoever,” Goule said. “We want high milk prices out there. The sooner we can get this vote done, the better off California will be, and the better off your milk prices will be. Then we can start working on this as a nation rather than 48 states—and California by itself.”

California Depends on National Dairy Month

National Dairy Month Encourages Americans to Eat More Cheese

By Patrick Cavanaugh, Farm News Director

Across the country, National Dairy Month will be celebrated during the month of June to promote the consumption of dairy products. Though California is the number one dairy state, California dairy farmers have been experiencing a decline in dairy production amidst high labor costs, competition from other states and declining profit.

Founded in 1937 as National Milk Month with the goal of increasing milk consumption to stabilize the dairy surplusthe holiday was renamed National Dairy Month to encompass all dairy products.

Anja Raudabaugh, CEO of Western United Dairymen
Anja Raudabaugh, CEO of Western United Dairymen

Anja Raudabaugh, CEO of Western United Dairymen in Modesto, Calif., is hopeful that celebrating National Milk Month will educate more consumers about the health benefits of diary products, increase dairy consumption opportunities, open more markets and enable the lagging dairy industry in California to better compete with other states.

States such as South Dakota and Wisconsin have ramped up their milk production significantly, which has stressed California producers to even the gap. According to Raudabaugh, the term oversupply doesn’t necessarily apply to the dairy conditions in this state. She remarked, “We’re actually in a 17-month decline at the moment, which is the longest decline [in milk production] we have ever been in.”

The dairy industry has managed to be very competitive with wages, another stressor, but the high labor costs are hurting production companies. “As things get more and more competitive globally,” said Raudaubaugh, “we are going to continue to struggle to figure out how those margins play out.”

“The margin is going to continue to shrink, especially as wages get more and more competitive,” Raudaubaugh observed. “Being a worker on a dairy farm is certainly very wage-competitive throughout the agricultural industry. We cannot keep workers at anything less than about $16 or $15 an hour as it is, so it’s a good time to be a worker in the dairy industry. It’s a good craft and skill to have if you become a milker.”Real California Cheese Logo

Given Western United Dairymen’s mission to promote and administer programs and policies aimed at maintaining the longevity of the dairy industry on the West Coast, and as the milk industry struggles and continues to face tough times, Raudabaugh has a solution: “Eat more cheese.”

Enter: National Cheese Day every June 4! According to the California Milk Advisory Board website and California Department of Food and Agriculture (CDFA) 2014 data, California is the #2 cheese producing state—right behind Wisconsin—and the #1 producer of Monterey Jack cheese. An amazing 43% of California’s cow’s milk is used to make California cheese, which is produced by more than 50 California cheesemakers.

Even beyond cheese, Raudabaugh said, “There is a tremendous amount of diversity in the way people have exposure to dairy products they don’t even know about. There are yogurts and sour creams, ice creams, and whey products.”  She believes market sectors should understand more about the dairy products consumers are exposed to every day to increase not only more milk consumption, but higher-value dairy as well.

“The diversification of the product line is really what has kept us in business,” reflects Raudabaugh, “It’s what keeps us looking to the horizon and looking to the future optimistically, even in the face of some pretty bad milk prices right now.”

Remember California dairy producers, particularly, this monthNational Dairy Month, and try a new dairy product. And discover a new cheese tomorrow, June 4, National Cheese Day!

Ag Alert update: Milk-pricing bill withdrawn

Source: Ag Alert

California Department of Food and Agriculture Secretary Karen Ross announced Wednesday that milk-pricing legislation will not be pursued during this legislative session.

In a statement, she acknowledged that timing on Assembly Bill 2730 “was not ideal,” but that she was “compelled to see if we could get something done this year.”

“Since the August 13th Task Force meeting, a tremendous amount of progress has been made, but not enough,” she said.

Ross did not say whether the department will pursue reform legislation again next year or discuss the future role of the Dairy Task Force.

Watch for further coverage in the Sept. 3 issue of Ag Alert. 

March 31st deadline for enrollment in Nutrients-on-Demand (NOD) management program

Nutrients-on-Demand (NOD) is an educational program developed by Western United Dairymen, California Dairy Quality Assurance Program (CDQAP) and Sustainable Conservation.

NOD aims to help dairy producers improve the accuracy of applying liquid manure to fields to increase the efficiency of nutrients while maintaining yields.

The program provides easy-to-use diagnostic tools that help you track your nutrient application rates based on crop demand and identify manure infrastructure needs and funding opportunities.

NOD consists of three meetings that provide training on field nutrient balance. The program will work with you to develop a plan for a trial field, review your results in the diagnostic tool and identify areas for improvement.

NOD runs from March 2014 through November 2014. The program requires the dairy producer and/or irrigator to attend meetings.

Benefits of NOD include improved nutrient application amounts and timing, covered cost of lagoon samples for 2014, covered cost of time spent with your own consultant, provision of 24-hour lagoon sample results, and identification of programs that may assist with infrastructure improvements.

The application deadline is March 31st, 2014. Please contact John Cardoza, Project Manager at (209) 576-7731.

California Milk Production in 2013

Sources: CDFA Dairy Marketing and Milk Pooling Branches

In 2013, 33 California counties recorded milk production, indicating that a total of 41.2 billion pounds were produced.

IMG_2709

This statistic represents a 1.3 percent decrease in overall milk production compared to that of 2012.

The top 10 milk producing counties were responsible for 94.9 percent of total California milk production; among the top three counties were Tulare, Merced and Stanislaus counties.

They alone were responsible for 52.9 percent of all the milk produced in California.

Fresno County showed the largest increase in milk production with a 2.02 percent increase, whereas, Southern California counties San Bernardino and Riverside showed the largest decrease.

Compared to 2012, milk production in San Bernardino went down 21.36 percent and decreased by 9.28 percent in Riverside, respectively.