Unfinished Price Hearing Will Reconvene in April

A week of testimony about Federal Milk Marketing Orders barely scratched the surface of 20 proposals to change the Federal Order Class III and IV milk price formulas. Six proposals were formally presented last week, and three were withdrawn by their proponents before the hearing adjourned on March 2. The rest, and additional testimony on all, will be heard at a continuation of the hearing tentatively scheduled for the week of April 9 in Indianapolis.

The proposals offered last week included proposals to:
- update make allowances with California plant cost data for 2005
- have USDA survey plant costs and annually update make allowances
- lower the Class III milk price to account for the lower value of whey butter
- drop the 3¢ that is added to the barrel price in the Class III formula.

NMPF presented its proposal for an energy cost index adjustor in the make allowance. This would allow make allowances to rise and fall in tandem with energy prices. If make allowances are updated at this hearing, they will be based on costs in 2005, when natural gas prices were at a peak. An energy cost adjustor will allow milk prices to come back up as processors' energy prices come back down.

For more detail on the proposals, see the USDA Dairy Programs website. If you have questions, call Roger Cryan at NMPF.

Cass-Clay and AMPI Announce Merger

The boards of directors of two of NMPF's members have approved an intent to merge. The dairy farmer-owners of North Dakota-based Cass-Clay Creamery, Inc. and Minnesota-based Associated Milk Producers Inc. (AMPI) will form one cooperative.

"This merger is an exciting development for the farmer-owners, employees and customers of Cass-Clay," says Keith Pagel, Cass-Clay president and general manager. "It will position us for long-term success in the dairy industry through gained efficiencies and the ability to offer a complementary line of dairy products to the marketplace."

To finalize the merger, the members of Cass-Clay must approve the transfer of assets to AMPI. That approval is expected in March, with the merger completed April 1. Cass-Clay will operate as a division of AMPI.

Coalition Pushes Wider Renewable Fuels Use

A coalition of farm groups (including NMPF), hunters, environmentalists and some business interests favoring expanded use of renewable fuels is lobbying for $65 billion of new federal incentives to achieve their goal over the next five years.

The group is called the 25X'25 Renewable Energy Alliance, since its target is to produce 25% of the nation's energy from farm, ranch and forest products by 2025.

It aims to get many of its proposals into this year's farm bill, expanding previous policies used to promote politically popular ethanol. The spectrum of constituencies represented in this 400-member group includes NMPF, the American Farm Bureau Federation, General Motors Corp., the National Wildlife Federation and other divers groups.

The new 25X'25 strategy shifts away from previous congressional efforts to mandate more use of corn-based ethanol, but would maintain fixed subsidy levels for ethanol made from corn stalks and other farm wastes, a business that isn't yet commercially feasible.

The new plan calls for an $18.6 billion expansion of farm-conservation programs over the next five years, to help reduce the environmental impact of raising more energy-related crops.

NMPF Reminds USDA to Use Dairy Export Incentive Program

Last week, NMPF sent a letter to the USDA regarding the usage of the DEIP program.

NMPF once again explained that DEIP is an integral component in the existing U.S. dairy support system and serves as an essential leg of support to the U.S. dairy industry by countering the continuous export subsidies from Europe.

The letter expressed NMPF's frustration with DEIP not being used properly, especially over the last two years. This, despite a meeting in March 2006 between NMPF and USDA staff at which NMPF attempted to make clear the global market conditions that warranted USDA giving careful consideration to its use.

NMPF reiterated findings by the Office of Management and Budget (OMB) that using DEIP is better than purchasing surplus products. NMPF also pointed out to USDA staff that a side benefit of using DEIP is how it is a cost effective way to help bolster U.S. milk prices. USDA would have helped the U.S. dairy industry to export additional quantities of cheese in order to counter European subsidies and/or help us with market development, as USDA has done for many years in Mexico.

To read the full letter visit the NMPF website.

Dean Foods Won't Use Cloned Cows' Milk

The nation's largest fluid milk processor, Dean Foods Co., said recently it won't purchase milk from cloned animals.

"Based on the desire of our customers and consumers, Dean Foods will not accept milk from cows that have been cloned," according to a Dean statement that was first made public on a food-oriented blog and was later confirmed by the Dallas-based dairy processor.

"If the FDA does approve the sale of milk from cloned cows," the statement said, "we will work with our dairy farmers to implement protocols to ensure that the milk they supply to Dean Foods does not come from cloned cows."

The U.S. Food and Drug Administration is currently accepting comments on its draft risk assessment, released late last year, which found that the meat and milk from cloned cattle and their offspring "are as safe to eat as food from conventionally bred animals."

FDA officials have said they are not inclined to require mandatory labeling of foods derived from cloned animals. Legislation has been introduced in the House and the Senate to require such labels.

National Dairy Leaders Conference Deadlines Approaching

Make plans to attend the National Dairy Leaders Conference held April 15 - 17, 2007. The meeting will take place at the Skamania Lodge in Stevenson, WA, located about 45 minutes East of Portland, OR. The hotel cut off date is March 13 so make your reservations today. The program is filled with farm tours, industry panels, speakers and the opportunity to talk with other dairy industry leaders from around the country.

Topics that will be discussed at the conference range from Farm Policy, Nutrition, Exports, Animal ID, Organic marketing, renewable energy and cloning. There will also be two farm tours, one to Tillamook OR and one to Sunnyside WA. Reservations can be made online at www.dairyevents.com or call NMPF to get a hard copy of the meeting program.

Please contact Louise Kamali with any questions. We look forward to seeing you in Washington.

Associate Member Focus: Nelson-Jameson, Inc.

Nelson-Jameson, Inc., a supplier of products used by food, dairy and beverage processing facilities, was founded in 1947 and is headquartered in Marshfield, WI. Nelson-Jameson represents over 750 vendors and sources over 20,000 products in hundreds of classifications providing their customers the convenience of one stop shopping.

Nelson-Jameson's member representative is Jerry Lippert, President. He can be reached at 715-387-1151. For additional information, please visit their website.