Agriculture News
California’s Federal Order: Here's What it Means for Your Milk Price
Dairy Herd Management | Posted on July 9, 2018Because California produces almost a fifth of the nation’s milk, the impact of the order will cause ripples in the surface of milk prices from Los Angeles to Minneapolis and from Boston to Miami. Whether those ripples grow into waves remains to be seen. California’s new Federal Order will be implemented at the same time world markets continue to churn and trade wars potentially disrupt U.S. exports. For starters, California processors will have to learn how to move milk around the state without the millions of dollars in transportation credits California’s state order provided. The Federal Order provides no such incentives.Two of the major players in the state, Land O’Lakes and Dairy Farmers of America, have very little milk production in the Los Angeles basis where the bulk of California fluid milk is consumed, and they have little or no fluid processing. The trick, Vanden Heuvel says, is to get fluid milk buyers to contribute dollars to aid that movement.“ Longer term, quite a lot of cheese milk will never be pooled,” Vanden Heuvel says. But non-pooling plants will still have to pay competitive prices to attract milk, he says. And therein lies the hope of better prices for farmers.
Lancaster County farmers give state officials ideas to help struggling dairy industry
Lancaster Online | Posted on July 9, 2018Lancaster County residents and farmers have taken state agriculture officials up on their appeal for ideas to address Pennsylvania’s dairy crisis. They offered strong advice and plenty of ideas, such as allowing whole milk back in public schools and eliminating the minimum retail price that milk can be sold for in stores. Multiple commenters expressed strong criticism of Pennsylvania Milk Marketing Board policies and the practices of large dairy cooperatives. Others felt strongly that milk substitutes that are almond- or soy-based should not be allowed — by law — to be billed as milk in any way. But the most oft-cited suggestion among local residents was to allow whole milk in schools again. “We all know part of this problem started when whole milk was removed from school lunches,” Lucy Oberholtzer, a dairy farmer from East Earl, wrote in an e-mail. “What is taking so long for milk to be put back on the menu?” Another strong sticking point with local respondents is Pennsylvania’s law that dictates a minimum retail price. It’s meant to benefit dairy farmers, but some think it has become counterproductive and actually discourages milk consumption.The Milk Marketing Board also sets an over-order premium on milk that assumes Pennsylvania consumers are willing to pay a little more per gallon if they know that they are helping out the Pennsylvania dairy farmer.
Wisconsin dairy farmer says domestic concerns bigger than Canadian trade policy issues
WBAY | Posted on July 9, 2018A Wisconsin dairy farmer says domestic problems may be a bigger threat to his industry than Canadian trade policy. James Juedes, who owns a dairy farm that has been in his family for more than a century, said, “If we would’ve had the foresight to do what Canada did 10-15 years ago, to limit what we had for production, we wouldn’t be in this situation.” Instead of focusing on Canada, Juedes is more worried about the American dairy hurting itself by producing more milk than the U.S. can handle. Meanwhile, President Trump is punishing Canada for tariffs that effectively keep most American milk out of the country. Juedes said, “The trade policy thing is not the cure all for what’s happening here.”
4 charts that show US-Canadian trade is far different from what Trump portrays
Business Insider | Posted on July 9, 2018Steven Rattner shares four charts that show US-Canadian trade is far different from what Trump has portrayed. The US actually has a trade surplus with Canada — and a substantial one with dairy product. We export roughly twice as much in dairy to Canada as we import from them — and our total dairy trade is only a small fraction of overall trade with the country last year. Canada's tariffs are actually the lowest of the major developed countries.
Trump’s Trade War Is Wreaking Havoc on the Dairy Industry, Ironically
Slate | Posted on July 9, 2018Donald Trump talks a lot about America’s dairy industry. Specifically, he likes to go on about how Canada’s tariffs on milk products put our farmers at a disadvantage. This appears to be his main rhetorical justification for starting a small, but diplomatically bruising, trade skirmish with our northern neighbor, which has led to new tariffs on both sides of the border. It’s a little ironic, then, that America’s milk and cheese producers are becoming casualties of Donald Trump’s sundry other trade battles. Mexico and China have decided to target up to $986 million worth of American dairy exports with tariffs as retaliation for the Trump administration’s protectionist moves. Mexico is increasing its duty on cheese, while China is hitting cheese and whey.
Trade Deficits Are Not All Bad
DTN | Posted on July 9, 2018This seems like a good time to talk about trade deficits. The notion that U.S. trade deficits are inherently bad is simply not true. Opposing trade deficits on the campaign trail makes for good politics, but that just shows how little most of us know about the topic. First of all, a trade deficit is not a deficit in the way most people think. A budget deficit is a real deficit, and we all understand the obligation of a government needing to pay back borrowed money. A trade deficit, however, has nothing to do with borrowing money or incurring an obligation. If we buy medical equipment from China and pay them $1 million U.S. dollars, we just increased the trade deficit. We don't owe the Chinese company more money -- the bill has been paid and there is no further obligation. Wait you may say, when the Chinese company is now holding that $1 million U.S. dollars, don't they have a claim on U.S. goods and services? The answer is no. Those dollars are assets, which fluctuate in value like any other asset. There is no obligation involved.Now, if China takes those U.S. dollar assets and buys U.S. Treasury securities, then we can say they have a claim on our government to be repaid the money lent with interest. However, that is part of the U.S. budget deficit, not the trade deficit. The amount of money the U.S. government wants to borrow is a U.S. political decision. It's not China's fault our U.S. budget deficit is so big, and it has nothing to do with U.S. customers paying a Chinese company for medical equipment.The next point about the trade deficit is that most people see it as a two-variable equation. Imports minus exports is how we compute the trade balance, and when U.S. imports exceed U.S. exports we have a trade deficit.What doesn't get mentioned, however, is that the reputation of the currency of exchange is also part of the equation. The number one reason we have to go back to the recession of 1981-82 to find a U.S. trade surplus is because the U.S. economy has largely been a safe haven for investors' funds. When foreigners trade with the U.S. and hold on to some of the U.S. dollars they received, they do so because they have confidence in the value of the U.S. dollar and the economy behind it. That is not a bad thing.
NPPC: Tariffs could put U.S. pork producers out of business
Meatingplace (free registration required) | Posted on July 9, 2018Retaliatory trade tariffs by China and Mexico now apply to 40 percent of total American pork exports, threatening the livelihoods of thousands of U.S. pig farmers, the National Pork Producers Council said Friday in response to the escalating trade war between the United States and China. The Trump administration’s 25 percent tariff on $34 billion worth of Chinese products officially went into effect overnight, prompting China to quickly retaliate with previously threatened penalties on an equal amount of U.S. exports, including pork, beef, soybeans and automobiles.
Costco poultry plant changing Nebraska industry landscape
Meatingplace (free registration required) | Posted on July 9, 2018In Fremont, Neb., the sky-high feed mill looming over the open fields signals a shift in a state where beef dominates. It will support a $400 million chicken complex that Costco Wholesale Corp. is building to control the quality of birds it sells in its depots nationwide. To supply the giant facility, grain farmers are converting to poultry growers, building on their plots at least four chicken houses each, with some as many as 16. Each of the 432 barns houses 42,000 birds, making for a one-time capacity of more than 18 million of them.
Best advice to U.S. dairy farmers? 'Sell out as fast as you can'
NBC | Posted on July 9, 2018“It’s just hard to believe it’s over,” Coombs said later, choking up. “As long as you was milking cows, you always thought there was a hope you'd get back to it. At this point, even if there's a Hail Mary pass, we're done.” Coombs is one of more than 100 dairy farmers across seven states who learned in March that they would lose their contract with Dean Foods, which runs a milk processing plant in Louisville that mainly served Walmart. Dean Foods is shutting the plant at the end of the summer because Walmart is building its own processing facility in Fort Wayne, Indiana, and will work directly with dairy farms there instead. Many of the Kentucky dairy farmers who sold their milk to Dean Foods have not yet found anyone else to buy it instead — and like Coombs, they could soon have to sell their cows. They are just the latest of more than 42,000 dairy farmers who have gone out of business since 2000, casualties of an outdated business model, pricey farm loans and pressures from corporate agriculture.
Dubai is getting the world's largest vertical farm — and it will grow produce for the world's largest international airport
Business Insider | Posted on July 9, 2018Crop One Holdings, a Silicon Valley food startup, and Emirates Flight Catering (EKFC), one of the world's largest airline catering operators, plan build a 130,000-square-foot vertical farm in Dubai. Vertical farms grow crops indoors and year-round without natural sunlight or soil.The facility will be the largest of its kind, and will produce 6,000 pounds of crops daily. The greens and herbs will be used for in-flight meals at Dubai International Airport, the world's largest by international passenger traffic.