U.S. Dairy Industry Reacts to Idea of California Federal Order
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Volume 35 February 13, 2015 Number 4 Scan this code for breaking U.S. dairy industry reacts to news and the latest markets! idea of California federal order A WASHINGTON — U.S. dairy ate under a FMMO, which pro- hearing, CDI, DFA and Land manufacturing milk values industry stakeholders were vides uniform dairy prices for O’Lakes note that if Califor- and broad regional market- INSIDE abuzz this week over the milk based on market prices. nia’s milk producers adopt a ing order marketwide pools idea of California joining the • The proposal federal order, the California have been established, the ✦ DFA to build new federal milk marketing order Under proposed federal order would be the largest proposal notes. headquarters in Kansas. (FMMO) after the state’s order language submitted by federal order pool with a Meanwhile, “the Cali- For details, see page 3. three largest cooperatives the cooperatives: monthly average volume of fornia state system has not late last week submitted a • California would have well over 3.4 billion pounds, adapted, leading to market ✦ Guest columnist: ‘A joint proposal to begin operat- the same pricing formulas/ eclipsing Federal Order 30’s conditions that have become supply chain is only as ing under a FMMO. system as all other federal (Upper Midwest Order) aver- increasingly diffi cult for Cali- strong as its weakest link.’ California Dairies Inc. orders for all classes of milk. age 2014 monthly pool volume fornia dairy farmers and the For details, see page 4. (CDI), Dairy Farmers of • The California quota of 2.7 billion pounds. operation of the cooperatives America Inc. (DFA) and program would continue as it In terms of Class I volume, they have built,” the proposal ✦ Retail WATCH Exclusive: Land O’Lakes Inc. on Feb. is today, providing a monthly it would be the third-largest says. Great Lakes Cheese 5 petitioned USDA to hold a payment above the blend of the order behind Federal The failure of California launches organic cheese hearing to consider establish- price to the owners of the Order 1 (Northeast Marketing regulations to establish mini- for store brand customers. ing a FMMO for California. quota. Order), approximately 755 mum prices for California pro- For details, see page 7. Under existing regula- • The transportation and million pounds, and Federal ducers which refl ect national tions, California dairy farmers fortifi cation subsidy programs Order 33 (Mideast Market- values for classified milk ✦ IDFA calls for safety operate under statewide milk — both currently part of the ing Order), approximately uses has cost California dairy award nominations. pricing plans. The majority of California system — would 517 million pounds, with an farmers more than $1.5 bil- For details, see page 16. farmers in other states oper- continue under the proposed estimated monthly volume lion since 2010, according to California federal order. averaging 452 million pounds, published industry estimates, • All California plants the proposal says. the proposal continues. purchasing milk from Califor- “In spite of its signifi cance “Therefore, the coopera- Organic industry prepares for nia Grade A dairy producers nationally, California has tives and their members, rep- would be pool plants. Volun- been the most important re- resenting the overwhelming organic check-off proposal tary depooling of any class of gion in the country which has majority of dairy farmers in milk would not be permitted. not been part of the FMMO California, are bringing this By Rena Archwamety • All dairy producers system,” the proposal says. petition for a FMMO in Cali- throughout California would For many decade the fornia,” the co-ops say. WASHINGTON — The U.S. organic industry is considering a fi rst-of- receive the same blend price California Department of The proposal notes that the its-kind organic check-off program, the Organic Research and Promo- (notwithstanding the quota Food and Agriculture (CDFA) U.S. Congress in 2014 provided tion Program (ORPP), that would help fund consumer education and payments received by quota- has administered a state a necessary prerequisite for marketing for organic products, as well as help fund research and draw holders), just as all California milk marketing order that this request when it reautho- new farmers into organic production. producers currently receive reasonably balanced indus- rized the language in the 1996 While there currently are 22 national check-off programs, all are the same overbase price. try interests, but in recent Farm Bill which allows USDA commodity-specifi c and benefi t conventional farmers and processors In their request for a years, national uniformity of Turn to FMMO, page 14 D more than those in organic, according to some industry members. “While the conventional check-off promotes and researches milk, it does not research organic milk and does not promote organic milk,” says Perry Clutts, organic dairy farmer and owner of Pleasantview Farm, Circleville, Ohio. “Organic milk is different from regular milk U.S. West Coast ports USDA lowers 2015 — there is a law that tells us there is a difference. It’s governed by milk production the National Organic Program. There are clear rules that state the undergo partial shutdown forecast in report difference in what it takes to be organic, so the main thing that the SAN FRANCISCO — Several West Coast ports were effectively conventional check-off does not do for organic is to establish that closed to cargo freighters on Thursday for the second time in less WASHINGTON — The U.S. difference.” than a week under a partial shutdown imposed by shipping lines dairy herd may be growing In December, USDA announced a proposal to exempt more organic and terminal operators, says the International Longshore and Ware- — USDA’s “Cattle’ report farmers and handlers from paying into conventional commodity check- house Union (ILWU). The shutdowns are part of an escalating labor estimates dairy replacement off programs, as directed by the 2014 Farm Bill. Currently, the exemption dispute between the Pacifi c Maritime Association (PMA) and ILWU. heifers expected to calve dur- only applies to entities that solely produce, handle, market or import “Today, the Pacifi c Maritime Association, a consortium of in- ing 2015 are up about 1 per- products that are certifi ed 100 percent organic. (See “USDA proposes ternational corporations, informed the International Longshore cent from a year ago, while extension of organic assessment exemptions administered by AMS” and Warehouse Union that ships will not be worked at West Coast the number of milk cows on in the Dec. 19, 2014, issue of Cheese Market News.) This could free ports four of the next fi ve days,” said a statement issued by ILWU Jan. 1, 2015, was 1 percent up an extra $13.6 million for organic stakeholders to invest back into on Wednesday. “This action marks the second time in less than a above 2014 and the highest the organic industry. The comment deadline on this proposal has been week that employers have idled vessels.” since 2009 — but slower extended to Feb. 17. ILWU says the same group of companies also canceled a nego- growth in output per cow is The 2014 Farm Bill also authorizes USDA to consider and hold a vote tiating session scheduled for Wednesday with ILWU’s Negotiating more than offsetting faster D Turn to ORGANIC, page 12 Turn to PORTS, page 15 D Turn to WASDE, page 15 D © 2015 CHEESE MARKET NEWS® — This is Cheese Market News’ E-subscription and may not be forwarded to anyone other than the intended paid subscriber without the express permission of Cheese Market News (For more information, contact [email protected]) 2 CHEESE MARKET NEWS® — February 13, 2015 MARKET INDICATORS Chicago Mercantile Exchange Cash prices for the week ended February 13, 2015 CHEESE FUTURES for the week ending February 12, 2015 (Listings for each day by month, settling price and open interest) Monday Tuesday Wednesday Thursday Friday Feb. 9 Feb. 10 Feb. 11 Feb. 12 Feb. 13 Fri., Feb. 6 Mon., Feb. 9 Tues., Feb. 10 Wed., Feb. 11 Thurs., Feb. 12 FEB15 1.563 4,276 1.553 4,296 1.551 4,293 1.550 4,299 1.556 4,361 Cheese Barrels MAR15 1.612 4,610 1.578 4,661 1.520 4,679 1.527 4,686 1.574 4,727 Price $1.4825 $1.4800 $1.4800 $1.4800 $1.4850 APR15 1.619 4,137 1.587 4,155 1.530 4,161 1.535 4,177 1.570 4,169 Change NC -1/4 NC NC +1/2 MAY15 1.633 3,864 1.608 3,873 1.583 3,923 1.583 3,947 1.620 3,949 JUN15 1.677 3,784 1.655 3,801 1.640 3,802 1.646 3,807 1.669 3,807 Cheese 40-lb. block JUL15 1.725 2,869 1.720 2,882 1.713 2,916 1.715 2,916 1.725 2,919 Price $1.5350 $1.5350 $1.5300 $1.5300 $1.5300 AUG15 1.760 2,548 1.760 2,554 1.760 2,570 1.764 2,572 1.775 2,572 SEP15 1.780 2,573 1.770 2,586 1.770 2,549 1.770 2,553 1.775 2,553 Change NC NC -1/2 NC NC OCT15 1.793 2,276 1.795 2,282 1.788 2,260 1.788 2,253 1.800 2,250 NOV15 1.756 2,244 1.760 2,254 1.761 2,254 1.770 2,260 1.775 2,270 Weekly average (Feb. 9-13): Barrels: $1.4815(-.0060); 40-lb. Blocks: $1.5320(-.0030). DEC15 1.730 2152 1.740 2,162 1.740 2,169 1.740 2,169 1.750 2,184 Weekly ave.