Archive for Dairy Industry – Page 10

Australia’s Dairy Issues Continue

A recent article in Bloomberg says that Australia’s share of the world export market has gone from 18% in the 1990s to about 6% in 2018. This is because Australian producers have been leaving the business one by one. Australia’s share of the global dairy market is shrinking, says Sarina Sharp, an analyst with the Daily Dairy Report. This is because other major exporters have been making gains, too.

Sharp said that Australia’s milk production has continued to drop, even though milk prices were high and the weather was good at the beginning of the season.

Sharp says that the amount of milk collected in Australia in September dropped 6.25 percent from the same month last year to just over 800 million litres. This is the lowest amount of milk collected in September in decades. The country’s milk production was 6.3% lower in September than it was in the same month last year. This is on top of a 3.4% drop in the 2021-22 season.

“It’s likely that production in October was also lower than it was last year,” Sharp said. “In October, heavy rains caused flooding in eastern Australia, where most of the dairy herd lives. In Victoria, which makes up almost two-thirds of Australia’s milk production, some farmers had to dump milk because they couldn’t get to their farms, but the floodwaters have since started to go down.

Australia, which is the driest continent with people living on it, has been dealing with heatwaves and droughts for decades. Bloomberg says that between 1997 and 2020, the country as a whole and the dairy industry were hurt by drought 27 of those 33 years.

Sharp said that on the bright side, unlike other large milk-producing areas of the world, feed supplies in Australia are plentiful and not too expensive right now. In a recent report from the USDA Global Agricultural Information Network, it was said that milk prices in Australia have reached record highs, hay prices are low, and feed grain prices are likely to go down, which will help dairy margins.

“However, production is in the dumps and is likely to stay there. The lack of workers is so bad that the USDA thinks it will hurt milk production in both 2022 and 2023,” Sharp said.

In fact, there are so few workers in Australia that some dairies have switched to beef cattle operations, which require less work, in part because beef prices are at record highs.

“Because Australia has less milk overall, it is putting more of its output into making cheese this year and less into making butter and powder,” Sharp said. This is likely to cause exports of butter, skim milk powder, and whole milk powder to drop by at least a little next year.

The change in production could also cut into Australia’s share of the world dairy market. This would lessen the effect of weakening global dairy demand this year and give U.S. exporters a chance to pick up a share of the world market in the long run.

Plans are under way to double the amount of dairy products Britain exports.

Producers, processors, and exporters from the UK dairy industry met with the Department for International Trade to talk about how the industry can build on ambitious plans to double the value of British dairy exports over the next ten years.

Last year, dairy exporters sold goods worth £1.4 billion to markets all over the world. Kemi Badenoch, the trade secretary, said that the government was looking to make new trade deals and lower barriers to market access to help increase exports.

Badenoch told the delegates, “The UK is known for its high standards, care for the environment, and high-quality goods, and I am determined to keep us at the top of the world dairy market.” More trade and exports mean more jobs, higher wages, and a stronger economy.

Cheese business

Wyke Cheese, which is based in Somerset and recently announced it had gotten a £30 million loan from UK Export Finance and Barclays to help it keep growing internationally, is one company that gets help from the government. At the moment, the company sends out 6,000 tonnes of cheese.

Richard Clothier, the managing director of Wyke Farms, said that the help would help the company meet its growing export sales despite rising production costs. “By developing these new regions, we can increase sales of our more premium cheeses, which helps improve the milk price paid to South West farmers, which is good for the whole region,” he said.

On tens of thousands of hectares of land in the UK, dairy farmers are signing up in large numbers to commit to regenerative interventions. These interventions improve water, nutrient, and carbon cycling and make less use of outside inputs. Read more…
Tom Bradshaw, the vice president of the NFU, said that the sector was a success story, but that if it wanted to double its exports, the government and industry had to work together to make this happen.
“If the government puts in more money to support ongoing work on market development and to increase the number of agricultural attaches around the world, the industry can use this work to boost our dairy exports and help set a global standard for dairy products that are good for the environment and are sustainable.”

Michael Oakes, the chair of the NFU board, said that the Summit gave exporters, processors, and producers a chance to talk about some of the problems they face and find ways to speed up export growth.

“Over the past few years, we’ve built a great reputation for quality around the world. We already sell dairy products worth nearly £2 billion to more than 135 countries in Europe, North America, and the Middle East.

The Net Zero and Livestock report says that dairy farmers can reduce their carbon footprint and overall emissions by using both nutrition and management-based strategies. Read more…
“If the UK dairy sector wants to be a major player in global trade, find new emerging markets, and add value to the sector, now is the time to boost exports and take advantage of the huge support that great British dairy products already have around the world.”

Katherine Jack, a senior dairy analyst at AHDB, said that producers had mixed luck in the eight months leading up to the end of August. During this time, £1.2 billion was exported.

Jack said that exports of cheese were up 22%, milk and cream were up 9%, and whey products were up 10%. However, exports of yoghurt and buttermilk were down more than 20%, and powders and concentrates were also 14% lower.

Serbia’s dairy exports are a serious concern.

Several business groups have asked the Serbian government to allow dairy exports, which have been banned since early September. They want to do this to keep food prices in Serbia from going up too much.

The secretary of the Livestock Association, Nenad Budimovi, told the local press that these results came from the decision to stop selling dairy products to foreign customers. However, interventions like this can’t last for a long time because they would hurt more than help, especially for companies with big export contracts.

“The ban has been in place for two months, and we have to remember that there are companies with contracts to export to the Cefta region, which includes Montenegro and Bosnia,” Budimovi said. He added that his organisation had asked the government to end the ban and find “a systemic solution” to protect the domestic market.

Raw milk segment

As a result of the export ban, there may be more pressure on raw milk producers to make more milk. In the past few years, Serbia’s milk production has been going down steadily. Farmgate milk prices have gone down because of the new rules.

OVERVIEW OF GLOBAL DAIRY MARKET PRICES

“I’m afraid that extending restrictions won’t be good for raw milk production,” Budimovi said. He explained that some large dairy plants in the country already have trouble getting raw milk because farmers are cutting back on their operations, and that milk production in Serbia isn’t spread out evenly.

Budimovic says that the situation in the central and southern parts of Serbia is very different from Vojvodina, which has a lot of big milk farms and no problems getting raw milk. The other part of the problem is that the livestock industry has been in trouble for a long time, and the export ban has made things worse for farmers who were already in bad financial shape.

Also, read about four global trends that are driving the demand for dairy products

This year, global dairy trends were a big part of the World Dairy Expo. What makes people want dairy? What effect does the way people live have on the dairy market? How does technology affect demand now, and what kinds of technological growth have we seen? These topics were talked about by Megan Sheets, who is the senior director of strategic development and strategic insights at the US Dairy Export Council. Read on…
Irreversible damage

Recently, the lack of milk got the attention of Serbian President Alexander Vucic, who said on TV that Serbia has to import milk from Poland and other European countries to fill the gaps in the market. Vucic said that Serbia needs to accept that the amount of raw milk it makes is going down because “we can’t be successful in everything.”

But some milk farmer groups were worried that the current government policy could hurt the milk farming segment in a way that couldn’t be fixed.

OVERVIEW OF GLOBAL DAIRY MARKET PRICES

“The most important thing to know is that a country cannot have agriculture if it does not raise cattle and make milk. So, if we don’t have cattle and milk production, we won’t be able to talk about agriculture,” said Sanja Bugarski, a representative for Serbia’s association of cattle breeders.

Canada to compensate supply-managed sectors

A government press release says that Agriculture and Agri-Food Minister Marie-Claude Bibeau spoke on a dairy farm in the Eastern Townships to reaffirm the government’s promise to pay supply-managed sectors for the effects of the Canada-United States-Mexico Agreement (CUSMA). Direct payments and investment programmes will give dairy, poultry, and egg producers and processors more than $1.7 billion.

This money from the government will help producers and processors of dairy, poultry, and eggs make important investments and improve their businesses so they can be even more competitive and last longer.

Even though dairy farmers already know how much they will get next year from the fourth compensation payment for the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the government plans to give them up to $1.2 billion more over six years through the Dairy Direct Payment Program to make up for the effects of CUSMA.

From 2024 to 2029, the owner of a farm with 80 milking cows could get about $106,000 in six payments each year, based on a decreasing scale. With these funds, producers will have the freedom to invest according to their own needs.

Starting in 2023, the government plans to put up to $300 million into a new programme to support innovation and investment in large-scale projects that add value to solids-non-fat, a by-product of processing milk. During the development of programme parameters, the government will talk with industry stakeholders a lot.

“The 2,800 chicken farmers in Canada are proud to take care of our land and provide healthy, high-quality food for Canadians. When more money is put into our industry today, it will help farmers improve the long-term efficiency and sustainability of their farms and keep feeding Canadians “Pierre Lampron, who is in charge of Dairy Farmers of Canada, said this.

Under the Poultry and Egg On-Farm Investment Program, the Canadian government plans to give up to an extra $112 million to people who raise poultry and eggs. Producers will get payments based on how many quotas they own, which will help them improve their farm businesses. With this money, the total pay for this sector will reach $803 million.

Lastly, the federal government plans to put up to $105 million into the Supply Management Processing Investment Fund. This money will be used to help dairy, poultry, and egg processing plants invest in new equipment and automation technologies to make them more productive or efficient. This means that processors have now spent a total of $497,5 million.

These programmes will help the supply-managed sectors be more open to new ideas and grow. With this announcement, the Canadian government keeps its promise to fully and fairly compensate producers and processors who have lost market share because of CETA, CPTPP, and CUSMA. Up to $4.8 billion will be paid out in compensation.

Tim Klompmaker, chair of the Chicken Farmers of Canada, said, “Our farmers are proud to offer Canadians high-quality eggs that are made here in Canada. This helps support rural jobs and our economy.” “The measures outlined in today’s announcement give us a way to figure out how CUSMA will affect our industry. They also help all Canadians as egg farmers continue to use green technology, improve their farms, and grow their industry. More than 1,200 egg farmers in Canada are committed to keeping our strong food system going, both now and in the future.”

“Hatching egg producers all over the country have lost money because of recent trade deals,” said Roger Pelissero, chair of the Egg Farmers of Canada. “We are glad to see that the Fall Economic Statement has talked about a continuing commitment to Canadian poultry and egg farmers on programmes to make up for the effects of the CUSMA agreement.” “This money will help our farmers invest again to make our sector stronger and more stable, which is good for all Canadians.”

Despite the difficult year, a survey finds that fewer UK dairy farmers are leaving the industry.

Even though it was a hard year with high input costs, there are slightly less dairy farmers in Great Britain.

A survey by the AHDB shows that even though input costs have gone up, fewer dairy farmers have left the business than in previous years.

Based on the most recent survey of major milk buyers done by the levy organisation, there will be 7,850 dairy producers in Great Britain in October 2022.

This is a drop of 150 producers, or 1.9%, compared to October 2021, but only a drop of 30 producers, or 0.4%, compared to April of this year.

Even though input costs have kept going up over the past year, the AHDB said that higher milk prices had helped to make up for that.

Charlotte Forkes-Rees, an AHDB analyst, said that this could be why fewer farmers have left the business than in past years.

“However, differences in contract prices may have led some producers to switch contracts in the past six months.”

(Graph: AHDB)

The most recent numbers show that the average volume per farm in the UK is 1.57 million litres per day, which is the same as what was seen in October 2021 and April 2022.

Different ways of reporting make it hard to get a clear picture of how many dairy producers there are in the country.

Based on how many farmers have signed up to make milk, the Food Standards Agency (FSA) can keep track of the number of producers in England and Wales.

But farmers don’t have to unregister, so it’s not likely to be at the top of their list of things to do when they leave the business.

The AHDB’s estimate is the number of milk producers who are actively making milk in Britain.

It is based on the number of milk buyers who take part in the Daily Milk Deliveries survey and report on the number of active and temporarily inactive milk producers.

This is about 82% of all GB volumes, so the estimate has been changed to reflect that.

 

Farmers’ class action lawsuit against Fonterra regarding the 2016 milk price “clawback” has been resolved.

Key Points:

  • Fonterra has said that it will pay $25 million to farmers to end a long-running legal case.
  • Farmers did something after the dairy coop cut milk payments back in 2016.
  • 350 farmers will get money from the court case that started in 2020.

Farmers who were hurt by the so-called “dairy crisis,” in which the company cut its milk payments after the fact, will get $25 million to settle a class action lawsuit.

More than 350 farmers joined the class action, which was brought to the Victorian Supreme Court in 2020 by the law firm Adley Burstyner.

Both sides have told the court that they have reached a deal before the case starts.

Fonterra said in a statement this morning that it had settled without admitting fault because “we think it’s best for farmers, the dairy industry, and our business so we can all move forward.”

The agreement and how the settlement money is split are subject to approval by the court.

Lawyers told the court that it was unlikely that farmers would get their compensation payments “before Christmas.” Instead, it was more likely that they would get them early next year.

Clawback led to the creation of a Code of Conduct

The price cuts by the New Zealand cooperative Fonterra and its rival, the now-defunct Murray Goulburn, caused major changes in the structure of Australia’s dairy industry.

The Australian Competition and Consumer Commission now enforces a code of conduct for the dairy industry (ACCC).

The code says that dairy processors can’t take money back from farmers or lower prices during the season below a minimum published price. It also puts limits on contracts and relationships between farmers and processors.

The New Zealand farmer-owned cooperative said that it had spent a lot of time and effort over the past six years “rethinking its relationship with farmers to build trust and make the industry stronger.”

Fonterra said about what the agreement means for its business, “The settlement sum of AU$25 million, including interest and all costs, has already been accounted for in the prior year’s financial statements and will not have a material effect on Fonterra Cooperative Group Limited’s financial position.”

Fonterra fought hard, says the attorney.

David Burstyner, the lawyer in charge of the class action lawsuit, said it was “a tough court process,” but he thought the settlement would be paid out next year after the court checked the details.

He said, “Fonterra fought hard, and we fought hard for farmers.”

“At one point, a team of about 30 lawyers helped us look at 55,000 documents.”

He said that because of the settlement, the case would not drag on for weeks or even years.

“It gives farmers peace of mind, money, the feeling that their worries have been heard, and an end to a very difficult time for many.”

Energy prices are growing, causing problems for a Baltic dairy.

The head of the Lithuanian dairy union, Pieno centras, Egidijus Simonis, said that in the first half of 2022, Lithuanian dairy plants sent 27.7% less products to non-EU countries than they did in the same time period the year before. He said that Lithuanian dairy plants are some of the most modern in Europe, but that the lack of energy has hurt the country more than other European countries.

“Because our dairy industry has to pay a lot more for energy than those in other countries, it’s hard for them to compete on export markets,” said Simonis.

Lithuanian dairy farms use about 160,000 MWh of electricity each year. They paid €13 million in energy bills last year. This number is expected to be €50 million in 2022.

Lithuania sends its dairy products to Germany, Poland, Latvia, Italy, the Netherlands, and Estonia, all of which are in the EU. Most of these countries use government programmes to help boost dairy production. The Lithuanian Food Industry Association has also asked the government to help businesses with the rising cost of electricity, but no state aid has been given so far.
Latvia dairy

Dairy producers are also counting on state aid in Latvia, which is close by. Janis olks, the head of the Union of Latvian Dairy Workers, said that the financial situation of several large dairy plants in Latvia is now “dire.”

Early in October, the Elpa dairy plant went bankrupt, and the Limbau siers plant said it would have to cut back on its business.

“It’s still too early to say that other companies will follow Elpa and Limbau siers,” Sholks said. “But the fact that some market players are already bankrupt is a bad sign in and of itself.”

People warned that most dairy plants in Latvia are “on the edge of their financial capabilities” right now. No one knows what production Latvian dairy plants will make or how much they will make in the coming months. People say that the price of energy is the main unknown in this equation.

“The demand for all kinds of products is going down, and based on the most recent information, there are a number of products that we no longer make.” People said, “The stores aren’t ready to take them because no one wants them.” The number of customers in the country has gone up a little bit because of the Russian invasion of Ukraine and the influx of refugees, but their average purchasing power is much lower than it was a year ago.

Canada and New Zealand are at odds over dairy trade.

Monday, New Zealand’s trade minister said that Canada had “locked out” his country’s farmers in a dispute over dairy exports that was supposed to be settled by an independent panel.

Damien O’Connor said that Canada is “not living up” to its promises to let dairy products into the country as part of a 2018 trans-Pacific free trade agreement.

“This is hurting New Zealand exporters, who are still locked out of the Canadian market,” O’Connor said in a statement.

Canada, New Zealand, and nine other Asia-Pacific countries signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership in 2018.

New Zealand first said in May that it didn’t like how Canada handled tariff rate quotas, which let dairy products come into the country with lower import taxes.

New Zealand sued Canada over losing access to the dairy market, which cost them about $40 million over two years. O’Connor said this “did not solve the problem.”

“New Zealand has decided to ask for a panel to be set up to hear the dispute and decide on it,” he said.

Monday, Jacinda Ardern, the prime minister of New Zealand, said she had already told Justin Trudeau, the prime minister of Canada, “to his face” that New Zealand would escalate the trade dispute.

“Given how often we talk, I don’t see why I wouldn’t bring it up. Our close relationship with Canada means I can be very honest,” Ardern told reporters in Wellington.

She said she had told Trudeau that “we were at a standstill” and that Ardern didn’t “see any reason” for officials to keep going back and forth, which would only “waste time.”

“If we can talk openly as leaders and know that we won’t be able to solve it by ourselves, it was time to take it to the next level,” Ardern said.

Representatives from Canada have not given an official response. The diplomats in Wellington said that Ottawa would have to respond.

The government in Wellington wants three experts to be on the neutral panel, whose members will be picked by Canada and New Zealand.

In 2021, global dairy exports gave New Zealand’s economy $10.96 billion, or about 23% of all exports.

A2 Milk Company finally cracks the US market.

Since February, when a contamination scare forced Abbott Nutrition’s plant to close, the US government has been dealing with a major crisis.

To help with the shortage, special market access was given to a number of companies, including a smaller competitor named Bubs Australia. However, a2 Milk was not one of them. In August, it got a letter from the US Food and Drug Administration (FDA) saying that the agency would not look into its request to ship tins any further.

A2 Milk said on Thursday that it now expects its gross margins to be lower than average and its distribution costs to be higher. This is because the company may have to pay more for air freight and rework in the near future, and it will also have to spend more on marketing and trade to get into the category.

The FDA said overnight that a2 Milk could import its a2 Platinum 0–6 months and 6–12 months ranges. Danone (Ireland) will also be able to bring in its Aptamil formulas for Stages 1 and 2.

The FDA said on its website that both products will be sold at major stores in the US.

The FDA also said that special access was given after a review of information about “nutritional adequacy and safety,” which included microbial testing, labelling, and more information about production and inspection at the facility.

The good news sent the share price of the Kiwi company soaring on Thursday. In afternoon trade on the ASX, each share went up 29, or 5.5%, to $5.56. Since May, when it fell just below $4 each, it has been making up some ground.

Even though shipments of formula have arrived in the US, stores are still not fully stocked, according to US media. Officials in charge of the response blame hoarding, supply chain bottlenecks, and manufacturers making less variety.

David Bortolussi, the CEO of A2 Milk, said Thursday that the company has permission to bring tins into the US until January 6, 2023.

Along with Stages 1 and 2, the company can also sell Stage 3 toddler products, which do not need enforcement discretion.

Mr. Bortolussi also said that the product that will be sent to the US has the same ingredients as a2 Platinum, but the scoops, instructions for mixing, and labelling requirements are different to meet FDA standards.

He said that this product is not on the market yet and will need to be made as soon as possible.

Long-term, the US is a big chance for the a2 Milk brand to grow in the formula market, but Mr. Bortolussi said that it is still early days.

“In the near future, and before distribution plans are finalised, sales during FY23 are expected to be up to 1 million cans, all of which will be sold in 2H23, assuming enforcement discretion stays in place during the whole time,” he said.

“Finally, actual sales will depend on what customers want, how much they buy, if there aren’t enough supplies, and how the market is doing at the time.”

When it shows its first-half results early next year, A2 Milk will give an update on its growth in the US market and its sales forecast.

Organic dairy farmers in the US are under constant stress due to the historic drought.

The Western Organic Dairy Farming Crisis Coalition was put together by Straus Family Creamery, an organic creamery in California whose goal is to keep family farms going and bring life back to rural communities. Organic dairy farmers and people who work in the agricultural industry who support them are part of a coalition that wants emergency help for organic dairy farmers right away because of the drought. A press release from the coalition says that the drought has led to a huge rise in feed costs (up to 50%), feed shortages, and operating costs related to the drought.

Several organic dairies expect to lose a lot of money this year, with an average loss of $250,000. If the drought and inflation keep going, people will lose money in 2023. This year, some farmers had no choice but to close their businesses. This threatens the future of the organic dairy farming industry, affects the milk and food supply in the area, and hurts the economy in rural areas.

“Farmers have survived droughts before, but the current drought, combined with inflation and other effects, is putting dairy farmers in a tight spot like never before,” said Dayna Ghirardelli, executive director of the Sonoma County Farm Bureau. “In the many years I’ve worked with local dairy families, I’ve seen dairies think about their futures when things were hard, but they kept going because they were hopeful that things would get better. It’s different this time.”

Even though the USDA has been helping dairy farms in financial trouble for a long time, the coalition says that these programmes are not enough to save organic dairy farms in a bad situation. Some farmers are already selling their milking cows and going out of business because of the severe drought, rising feed costs, and lack of feed. Several organic dairy farmers say they may have to close up shop in the next few months.

Farmers in the U.S. make up less than 2% of the country’s work force, and about 85% of the country’s food comes from family farms. California Certifiers of Organic Farmers says that slightly more than 10% of California and just over 1% of the rest of the country are farmed in an organic way (CCOF).

Albert Straus, founder and CEO of Straus Family Creamery, said, “If we have to keep farming in this difficult climate, farmers will have to come up with more new ideas to stay in business.”

Albert Straus said that despite the drought, 2021 was one of the best years for pasture on his organic dairy farm.

Climate-positive farming practises give dairy farmers a more sustainable and profitable way to run their business, but if farmers are just trying to get by, it can be hard for them to put these practises into place. As the drought in the West continues, there isn’t nearly enough hay to feed animals. Some conventional dairy farms are now buying a small amount of organic alfalfa hay, which could leave organic dairy farms without enough food for their animals in the coming months.

“Family farms and ranches in West Marin are very important to the community,” said Stefan Parnay, who is the agricultural commissioner for Marin County. “These farms and ranches feed people in Marin County, the rest of the state, and other parts of the country with fresh, healthy food.”

Straus Family Creamery is working with state and federal politicians and agricultural agencies on behalf of the coalition. The company is driven by its mission. The coalition is holding meetings and sending letters to ask for emergency help to save organic dairy farms.

Runners in the New York City Marathon can count on King Brothers Dairy’s Chocolate Milk as an energy source.

After Sunday’s New York City Marathon, runners will eat and drink more than just Gatorade and gel packs.

Saratoga County farm and bottler King Brothers Dairy is sending 5,000 bottles of chocolate milk to dairy promoters, who will then give them to female runners after the race.

It’s part of a campaign to get people to think of dairy products as healthy drinks that athletes like marathon runners can use to refuel after a hard race.

In particular, King Brothers’ product will be given to “Team Milk” members as part of a campaign to support a group of female racers.

Team members get advice on how to train for the race, as well as gear and donations to Girls on the Run, which encourages girls to run.

The campaign was started to help female athletes before, during, and after the race and to get the word out about how milk can help athletes recover. Studies have shown that the calcium, protein, and other nutrients in milk might help muscles recover after working out.

Sarah Zdobnikow of King Brothers Dairy said of the programme, “We’re really proud to be a part of a campaign that gives women athletes more power.”

Cows Are Too Stressed Out to Keep Up With Global Dairy Demand

Scorching temperatures are impeding milk production and withering the crops that cattle eat — dynamics that could contribute to shortages or price increases.

Extreme weather is threatening the global dairy supply as cows yield less milk under scorching temperatures. 

Extreme weather is threatening the global dairy supply as cows yield less milk under scorching temperatures. 

Heat and drought are inflicting perilous strain on dairy cows across the globe, drying up their milk production and threatening the long-term global supply of everything from butter to baby formula.  

Volumes of dairy are forecast to sink by nearly half a million metric tons this year in major exporter Australia as farmers exit the industry after years of pressure from heat waves. In India, small-scale farmers are contemplating investing in cooling equipment they’d have to stretch to afford. And producers in France had to pause making one type of high-quality cheese when parched fields left grass-fed cows with nowhere to graze.

Source: 

Dairy Farmers of America Helping Drive Ag Technology Innovations on Farms

Applications are now being accepted for the 2023 DFA CoLAB Accelerator program, which will begin in April and run through June. The 2023 program will focus on ag-tech and help bring new technologies to the Cooperative’s more than 11,500 family farm-owners.

“We know that new technologies and innovation are helping drive growth and efficiency on today’s farms,” says Matt Musselman, chief operating officer for DFA Farm Services. “Our goal with this program is to help identify and build relationships with those ag-tech companies that can really benefit our farm family-owners in solving problems and improving processes.”

DFA is looking for companies with ag-tech applications or technologies related to any portion of the dairy value chain, including but not limited to animal health, farm data management, herd health and management, supply chain optimization and sustainability. Some areas of particular interest include fintech related to agriculture, new technologies in animal health and innovations to help measure or reduce greenhouse gas emissions from cattle.

Key Features of DFA’s CoLAB Accelerator include:

  • 90-day immersive program, with both in person and virtual elements from April to June 2023
  • Access to top executives at DFA, with each startup having a team of DFA mentors relevant to their business area
  • Educational sessions on a variety of topics important for startup growth, including finance, business development, distribution and supply chain, product development, brand building, sales, marketing and pricing to name a few
  • Additional workshops that focus on areas such as leadership development and team building

The 2023 DFA CoLAB Accelerator program application is available here. The deadline for applications is Jan. 13, 2023. For additional information about DFA’s CoLAB Accelerator program, visit here.

Dairy Farmers Of Canada comments on fall economic statement

Deputy Prime Minister and Minister of Finance, Hon. Chrystia Freeland, delivered the federal government’s 2022 Fall Economic Statement (FES). In it, the government announced a broad financial envelope for compensation for producers in supply-managed sectors for the impacts of the Canada-U.S.-Mexico Agreement (CUSMA). The government also commits to providing additional details in the coming weeks.

Dairy Farmers of Canada’s President, Pierre Lampron, offered the following statement in response:

“We have had good discussions with the government, and through this engagement, we believe they have a good understanding of the impact of CUSMA on our industry. We remain optimistic that when the details of the compensation are announced, they will be full and fair.”

ABOUT DAIRY FARMERS OF CANADA

Dairy Farmers of Canada (DFC) is the national policy, lobbying and promotional organization representing the nearly 10,000 dairy farms from coast to coast. DFC advocates for public policy that supports the long-term viability of the dairy sector. DFC also works to promote nutritious 100% Canadian dairy and build awareness of our farmers’ high standards in areas like milk quality, food safety, animal care and sustainability.

Dairy farmers in Australia are struggling to hire workers.

Verity Ingham, general manager of regional services at Dairy Australia, says that 22% of dairy farmers were unable to fill open jobs within 3 months, and 40% lost at least one worker.
Working in dairy has its perks.

The Australian national organisation for the dairy industry says that the problem is made worse by Covid-19 and the lack of skilled workers across the country in many fields, not just agriculture. Dairy Australia is starting a new national marketing campaign to promote the benefits of working in dairy farming and encourage Australians to look into a job in dairy. This will help to solve the problem.

Jonathan Brown, who is a dairy ambassador, and 7 dairy farmers will be a part of the campaign. It will talk about why working in dairy is important and highlight things that have been shown to make people want to work in dairy.

Dairy Australia says that these factors include working with animals, being outside, moving up in your career, having a variety of tasks, getting training, having a secure job, and helping the community by making healthy food.

The workforce attraction campaign will be shown on TV, YouTube, radio, social media, and in local newspapers in dairying areas. This will encourage people looking for work to look for jobs in the dairy industry in their area. Farmers will be told to take advantage of the fact that more people want to work on dairy farms and get information on how to do this.
Keeping good people in the dairy industry

Ingham says that the goal of the campaign is to bring people into the industry and keep them there. “There is a lot of competition for jobs in rural areas, so it is important for dairy farmers to find good, reliable people.” It’s just as important to keep them.”

She makes it clear that milk farms need workers to keep the milk flowing. “And for the cheese on the tables and the yoghurt in our lunchboxes. We are really looking for people who want job security, like working with animals and taking care of them, want variety, flexibility, or want to move up in their careers.

Some farmers have decided to milk fewer cows because they don’t have enough workers…

“For dairy farmers, there are also resources for finding jobs and information on how to keep good people,” says Ingham. “I think farmers should take advantage of this chance.”

In Australia, many dairy farmers are increasing wages, giving incentives, and giving performance bonuses to keep and find workers. But some farmers can’t find anyone to work on their farms. Some farmers have decided to milk fewer cows because they don’t have enough workers. Others have switched to beef because it takes less work. Australia has also seen a rise in the number of people who use robot dairies.
“A real brake on company newspapers”

Rick Gladigau, the president of Australian Dairy Farmers, recently said that the coronavirus era had been bad for large-scale milking operations because there were not enough people to do the work. “It really puts a stop to corporate dairies. Not just the big companies, but also the ones in the middle. Depending on the number of cows, the farmer’s age, and other factors, there comes a time when you need to hire an extra person or two or three.”

Australia’s treasurer, Jim Chalmers, said earlier that he is in talks with business about a temporary increase in the country’s skilled migration intake. This comes as the business sector pushes for 200,000 visas to be given out to fill jobs.

There are also problems in the dairy business in New Zealand. Farmers in New Zealand had to work more hours, and some tasks, like managing pastures, were not getting done. Part of the sector’s work is done by people from other countries, but it takes a long time to find foreign workers, get them visas, and move them.

Richard McIntyre, a dairy farmer and spokesman for Federated Farmers, said recently that his industry has been short of workers for a year. “The real problem is that if I get someone to work on my farm, I’m really just taking a worker away from someone else, which makes things hard for them. It’s just that there aren’t enough people.”

Canada will boost milk price at the farm gate by 2.2% in 2023

The Canadian Dairy Commission (CDC) did its annual review of farm gate milk prices in October 2022. The CDC plans to make the following change on February 1, 2023, based on the review and discussions with stakeholders.

The price of milk at the farm gate will go up by 2.2%, which is equal to $0.0174 (less than 2 cents per litre). The National Pricing Formula, a way to set prices that was decided by the industry, is to blame for this increase. It looks at both the costs of making milk for dairy farmers and the consumer price index. As was said in June, the 1 September 2022 increase in the price of milk at the farm level was taken out of the result of the pricing formula.

In the past year, the cost of feed, fertiliser, fuel, and interest rates all went up for producers. Input costs are still going up because of problems in supply chains. But some of these increases were cancelled out by investments and productivity gains on the farm.

Milk, which is used to make dairy products like milk, cream, yoghurt, cheese, and butter, will cost an average of 2.2% more in stores and restaurants. The net effect on consumers will also be affected by things like how much it costs to ship, distribute, and package goods at each step of the supply chain. Only a part of the price paid by consumers goes to farmers.

In the past year, the average annual increase in the consumer price index for dairy products was 6.0%, which was about the same as the increase for all food items, which was 6.3%. Over the past five years, the average annual increase in the consumer price index for dairy was 12%. Compared to this, meat has 21%, eggs have 27%, and fish has 15%.

As of the end of 2022, the new farm milk prices will be official once they have been approved by provincial authorities.

‘Tis the Season for Dairy: A Holiday Outlook

‘Tis the season to buy gifts, plan parties and stock up on dairy for holiday treats. Will Thanksgiving and Christmas feel a little less merry this year as inflation looms over the grocery checkout line? On the latest episode of The Dairy Download, we get the holiday outlook from two top dairy leaders.

First up is Chris McCarthy, Vice President of Pricing and Demand Planning at Sargento Foods. From refrigerated snacks to sandwich slices, Sargento’s natural cheese offerings are found at stores across the country. Chris tells us what consumers are buying, and how the company is leaning on promotional activity to encourage sales ahead of the holidays.

Next, we speak with JP Hvizda, Senior Vice President of Retail and Private Brands at Challenge Dairy Products. As is customary, Challenge will do more than a third of its annual butter business during the fourth quarter. How is the company preparing for turkey bastes and cookies for Santa? And what’s behind that viral butter board trend? JP weighs in.

Play Episode

Following In Her Father’s Footsteps

Lakeshore Technical College student Emily Stevens and her dad, Lakeshore graduate John Stevens, take a break on their Indiana farm to play with Blondie, Emily’s pet cow.

Emily Stevens decided to follow in her father’s footsteps by not only pursuing a career in the dairy industry as he did but also at the same college he did – 6 1/2 hours, 400 miles away from her home in Milton, Indiana.

Stevens moved to Cleveland in fall to start in Lakeshore Technical College’s dairy herd management program. The 2022 graduate of Connersville Sr. High School in Indiana grew up on her family’s farm, loving the dairy industry.

“I understand cows more than I do people sometimes,” says Stevens.

“Emily was in the dairy barn since she came home from the hospital,” says her dad, John Stevens, who was not surprised when Emily expressed her interest in pursuing a career in the dairy industry.

According to Emily, she originally thought she wanted to be a veterinarian, though figured she’d get bored. She often found herself bored sitting in her high school classrooms learning, wanting to do something hands-on. One day while talking with her dad about her future, she says he told her about the great education experience he had at Lakeshore Technical College. It was then Emily decided to follow his path.

Born and raised in Indiana, John is a 1984 graduate of Lakeshore’s dairy herd management program. John’s family raised cows and hogs. John says he favored working with the cows so much that his parents encouraged him to go to school for something related to cows. They found an ad for Lakeshore’s dairy programs in a Hoard’s Dairyman farming magazine and made the trip to Cleveland to visit campus.

John was accepted at Lakeshore and got connected with Edward Klessig at Saxon Homestead Farm, near Cleveland, for an internship and housing. After graduating, he moved back to Indiana to work on a farm close to his home. John later bought his own farm where he and his family milked over 100 cows for many years.

After leaving Wisconsin, John kept in touch with the Klessig family. When Emily decided to attend Lakeshore, he called Carl Klessig to share the news that his former intern’s daughter was going to follow in her dad’s footsteps.

Learning Like Dad, Interning Like Dad

In addition to attending the same college her dad did, Emily is also interning at the same farm he did. She works 25-30 hours a week at Saxon Homestead Farm. Like the Klessig family did for John, they also arranged housing for Emily. Emily says she enjoys doing pretty much anything they need her to do, which is mostly milking and scraping. She has also helped with a few calves and treated sick cows.

“The variety that Saxon has and being outdoors is awesome,” says Emily. “Also, the work environment is great, everyone looks out for everyone and works together, because dairy farming isn’t easy but having a good team makes it a lot easier.”

Wisconsin’s Dairy Industry Differs from Indiana’s

According to Emily, the dairy industry in Wisconsin is more modern than what she sees in Indiana and what she had on her home farm. “We didn’t have computerized records and/or any monitoring system, head locks, or a freestall barn.”

John says the industry overall and the education needed are very different from his earlier days. “There’s a lot more technology and dairies are so much bigger than years ago.”

Emily plans on graduating in spring. From there, she wants to work in the dairy industry, possibly find a niche she enjoys, and learn more about it.

“Eventually I want to move and stay in Wisconsin because there’s a lot more and better employment opportunities,” says Emily. Lakeshore’s most recent graduate survey shows 100% of graduates from its dairy herd management program and agribusiness science and technology program were employed within six months of graduating.

For information about Lakeshore Technical College’s agriculture programs, which often draw students from outside Wisconsin, visit gotoltc.edu/programs-and-courses/degree-programs.

A2 Milk sues a competitor in Australia for allegedly breaking its trademark rules.

The company that makes specialty milk said it had filed a claim in the Federal Court in New South Wales against Care IP and Care A2 Australia, which are both part of the Care A2 Plus group.

Raw A1 beta-casein protein-free milk is used as the milk source by a2MC Products. The letters “A2” or “a2” are the most prominent trademarks on a number of dairy products, including infant formula.

In its statement of claim, the company said that Care A2 Plus had been using its trademarks on the packaging and advertising of products sold in Australia since at least October 2020. These products include infant formula, follow-on formula, and toddler formula.

It said that it had asked Care A2 Plus to stop using its trademarks, but that it had either forgotten, failed, or refused to do so, even though their lawyers had tried to work out the problem through letters.

“The a2 Milk Company vigorously protects its intellectual property rights, including trademarks,” it said in a statement. However, since the case was in court, the company declined to be interviewed or make any other comments.

Dairy farmers: Here for the long game

Dairy farmers’ commitment to a better future for New Zealand is being shared in a new DairyNZ campaign, Here for the Long Game.

The multi-media campaign launched nationwide this week highlights dairy farmers’ commitment and their part in New Zealand being the best it can be. It also shares how the sector is addressing challenges ahead.

Here for the Long Game shares the hard work and dedication of our world-leading farmers. As a sector, we want to deliver a sustainable future – meeting the needs of our communities and customers, while maintaining profitable and sustainable businesses,” says Dr Mackle.

Here for the Long Game highlights the dairy sector’s drive to being better – New Zealand dairy farmers lead the world but know there’s a lot of hard work still to be done. The campaign is an initiative of DairyNZ, the industry good organisation representing Kiwi dairy farmers, and includes TV, digital and social media, supported by a microsite at thelonggame.co.nz.

“Dairy plays a critical part in New Zealand’s future prosperity and wellbeing. Being one of the country’s biggest sectors comes with tremendous responsibility – we’re up for the challenge and focused on improving on what we already do best,” says Dr Mackle.

This means being better in business, as sought-after workplaces, and leaders in animal care and environmental management.

For several decades, the sector has made great strides in environmental progress. Dairy farms have the lowest emissions footprint for on-farm milk production, and farmers are further improving water quality and protecting biodiversity on their farms.

This includes 65 percent of dairy farms having a Farm Environment Plan, covering how they’re reducing footprint. By 2025, 100 percent will have an environment plan that outlines actions they are taking to improve water quality, protect biodiversity and reduce emissions.

“Our dairy farmers are putting in the hard yards to improve water quality and have been for more than 20 years. They’ve planted millions of trees and native plants alongside waterways, and that work is ongoing. We know there’s more to do, but the progress to date is something to celebrate.”

The dairy sector, including DairyNZ, is working with farmers on a wide range of on-farm development initiatives, as well as investing in new solutions through R&D. Priorities include new ways to improve water quality, reduce emissions, make dairy farms great places to work and support farmers in running successful businesses.

“To ensure a better tomorrow for our families, community and the environment, we’re getting stuck in and showing we’re here for long game.”

For more info: thelonggame.co.nz

The South East needs more dairy farmers because milk from the Limestone Coast is in high demand.

Key points:

  • A cream cheese factory in Mount Gambier is celebrating its 50th year in business.
  • SA’s dairy leader says the industry needs younger farmers because older ones are leaving.
  • To keep up with demand, milk processors in the South East buy milk from Victoria.

Mondelez, a company that makes cheese all over the world, was celebrating its 50th anniversary at its factory in Suttontown, in South East SA. Premier Peter Malinauskaus and Minister for Primary Industries Clare Scriven went to the factory to mark the occasion.

Mr. Hunt said that even though there were commercial-sized dairy farms in the area, many of the big processors, like Mondelez and UDC in Penola, had to get extra milk from Victoria.

The South East produces the most milk in the state, with a total of 270 million litres per year.
The South East needs more dairy farmers because milk from the Limestone Coast is in high demand. 1
Premier Peter Malinauskas visits the plant where Mondelez makes philly cheese in Mount Gambier.
(Supplied: Mondelez)

Mondelez uses more than half of that supply to make nearly 80 million tubs of cream cheese products every year, and the company said it could use even more.

Adam Borchers, the manager of Mondelez’s Suttontown site, said that the company processed about 150 million litres of milk each year. Most of that milk came from farmers in the South East, but it also got milk from farmers in Victoria near the border.

Mr. Borchers said, “All of our milk comes from within 150 kilometres.”

“Fresh milk is still hard to come by but very important to us, and we’re looking for more sources to keep growing our volumes.

“Having said that, we are very dedicated to buying locally.”
What’s next?

Mr. Hunt said that production had gone down in the last 10 to 15 years, but that things were looking up now because a new generation of farmers was joining the business.

He said, “People are leaving the business because the average age of dairy farmers is getting up there.”

“Good prices for land and good prices for stock (cattle) have also led some farmers to start raising beef or sell everything and leave the business.

“But a lot of young people are also coming back into the industry, which is good.”
The South East needs more dairy farmers because milk from the Limestone Coast is in high demand. 2
John Hunt is a dairy farmer who says that education helps young people get into the business.
(ABC Rural: Jemima Burt)

Mr. Hunt said that the industry needed education and ways to help the next generation of milk producers get into the business.

“The dairy business is a great way to make money,” he said.

“But we need young people to get into the industry through different ways of learning so they can see what it can offer them.”

Extreme heat is making cows sick and putting the world’s dairy supply at risk.

Heat and drought are putting dangerous stress on dairy cows all over the world. This is causing them to stop making milk, which threatens the long-term supply of everything from butter to baby formula.

This year, Australia, a major exporter, is expected to lose nearly 500,000 metric tonnes of dairy as farmers leave the business after years of heat waves making it hard for them to make a living. Small farmers in India are thinking about buying cooling equipment that they would have to save up for. Producers in France had to stop making one type of high-quality cheese because grass-fed cows had nowhere to graze because the fields were too dry.

FRANCE-WEATHER-AGRICULTURE-HEAT

Dairy cows in Saint-Martin-en-Haut, France, during a heat wave in July.

Extreme weather caused by climate change is making some of the world’s biggest milk-producing areas less suitable for these animals: When it’s very hot, cows don’t produce as much milk, and when it’s dry, the grass and other crops they eat dry up, making the problem even worse.

Some scientists think that climate change will cost the dairy industry in the US alone $2.2 billion per year by the end of the century. This is a big hit for an industry that already has trouble making money. One study says that the dairy and meat industries will lose $39.94 billion per year to heat stress by the same date if greenhouse gas emissions stay high.

At the same time, the demand for dairy products is growing because the middle class is growing in many developing countries. However, policies meant to help the environment are discouraging farmers in some areas from increasing their production. This collision could lead to higher prices and shortages of things like cream cheese and yoghurt that are on most grocery lists.
Milk Prices Go Up

Over time, prices for milk and other goods are going up.

FAO of the UN

“Climate change makes your supply more volatile or changeable, which can make it harder to get enough food,” said Mary Ledman, a global dairy strategist at Rabobank.
Cows Under Stress

Extreme heat is making cows uncomfortable and putting the world’s dairy supply at risk.

On Tom Barcellos’s farm, fans and misting machines keep the cattle cool.

Eric Thayer/Bloomberg is the photographer.

Even though dairy farmers spend a lot of money to keep their herds cool, the heat still affects them.

Tom Barcellos has been raising and milking cows on his farm in Tipton, California, for 45 years. His farm has a complicated cooling system. It has fans and machines that mist the air, and it even takes into account the direction of the wind. But he thinks that warm nights can slow down work.

Barcellos, who has 1,800 cows, said, “If you have higher temperatures in the evening and it’s a little more stressful on the cows, you could lose 15% or even 20% in the worst case.”

Extreme heat is making cows uncomfortable and putting the world’s dairy supply at risk.

Tom Barcellos

Eric Thayer/Bloomberg is the photographer.

On the other side of the world, in the western Indian state of Gujarat, Sharad Bhai Harendra Bhai Pandya and his brother have more than 40 cows.

Pandya keeps his cattle in a shed that has a fogger system that pumps water into it and turns it into mist. But even though it’s so hot in the summer, milk production at his farm drops by more than 30%.

If temperatures keep going up, more farmers will likely have to deal with this for longer periods of time. That makes it hard to decide how to invest.

The India Dairy Is in Danger

Ranu Bhai Bharvad’s farm.

Dhiraj Singh/Bloomberg is the photographer.

Ranu Bhai Bharvad is a dairy farmer in India, but he doesn’t even have a place for his 35 animals to stay. His cattle only have a neem tree to protect them from the heat.

“I can’t afford to build a shed for my cows,” said Bharvad, whose farm helps him support a family of 15 people.

India is by far the biggest milk producer in the world. Tens of millions of small farmers with only a few animals each make up the majority of India’s milk production.

Amul Dairy, which buys milk from Bharvad and other farmers like him, is taking steps to protect supply in response to the difficult conditions.

“During the winter, when production is higher, we save extra milk in the form of powder in case we don’t have enough during the summer,” said RS Sodhi, the managing director of the Gujarat Cooperative Milk Marketing Federation Ltd., which owns the Amul brand.
Drought in Australia

The Threat of Tariffs and Dairy Farming in Victoria

In Gippsland, Australia, in the year 2020, milk from Friesian cows goes into a holding vat at a dairy farm.

Carla Gottgens/Bloomberg is the photographer.

Australia, which is the driest inhabited continent on Earth, shows how the dairy industry could fail around the world if climate change gets worse.

The country used to be a big player in the business, but milk production has gone down sharply, and its share of the global dairy trade has dropped from 16% in the 1990s to around 6% in 2018.

Extreme heat waves, like a drought that lasted from 1997 to 2010 and another that will last from 2017 to 2020, caused the downscaling. The most recent one was the worst on record, and it caused prices for water and feed for cattle to go up, which hurt farmers’ bottom lines. Because business was hard, a lot of people left the industry. From 1980 to 2020, the number of dairy farms in Australia dropped by almost 75%.
Fewer Farms

In the last 40 years, there have been a lot less dairy farms in Australia.

Source: Authorities in Australia in charge of milk

Note: The year 2020 is just a guess. Year shows the end date for a time period that began in the year before.

Now, dairy farmers still have to worry about bad weather, but they also have to deal with new problems that are making them want to quit. The US Department of Agriculture says that Australia’s milk production will drop by more than 4% to 8.6 million metric tonnes in 2022.

The USDA says that this is due to dry conditions in key milk-producing areas as well as problems caused by a lack of workers. For example, some farmers have decided to switch to beef cattle production, which requires less work.

NZEALAND-AGRICULTURE-CLIMATE-TAX

In August, a dairy farm near Cambridge, New Zealand, had cows in a paddock.

Government policies could also end up putting a damper on dairy production around the world. By 2025, farmers in neighbouring New Zealand, which exports more milk than any other country, will have to pay a tax on agricultural emissions. Even though dairy farmers have done a lot to reduce their emissions, they still put out a lot of greenhouse gases because they have to produce manure, fertiliser, and feed. Farm groups are worried that the tax could make dairy farmers use their land for other things, like forestry or something else.
French Cheese

Some products are already harder to find because of the problems dairy farmers are having. This year, France is not making Salers, a type of high-quality cheese. It must be made with milk from grass-fed cows, which is hard to do when pastures are being destroyed by a heat wave like this year’s.

FRANCE-WEATHER-AGRICULTURE-HEAT

In July, dairy cows on a farm in Vire-en-Champagne, France, cool off under water atomizers.

Even though not having fancy cheese isn’t a big deal, problems with production could have a bigger effect on the market when temperatures are very high.

Nate Donnay, director of dairy market insight at StoneX Group Inc., said, “If you look out five to fifteen years, it’s likely that production will reach a peak and then level off in places where there isn’t enough water.” “In the next 15 to 30 years, production could start to go down in those areas.”

All of this could cause prices to go up or even cause some dairy products to run out.

Melvin Medeiros is a farmer in California, which makes more milk than any other state in the US. He says that extreme weather is likely to change how farming works in his state over the next ten years. He thinks that because the government isn’t doing anything, there will be fewer cows and less land that can be used for farming.
Leaders in Dairy

California makes more milk than any other state in the US.

Source: Calculations by the USDA, NASS, and the USDA, Economic Research Service.

“We haven’t done anything about a problem that’s been going on for more than 50 years,” said Medeiros. “Now that we’re in a tight spot, we have no choice but to cut back on production or do something else to fix the problem.”

New Zealand and Australia’s milk production declining

Michael Harvey, a senior analyst at Rabobank, says that there has been a lot of talk about New Zealand’s milk supply as the season’s peak draws near. “There was always a chance of bad weather,” he says. “And some of the risks have already begun to come true.”

Based on milk solids, New Zealand’s milk production for August 2022 was down 4.9%. This means that, so far this season, New Zealand’s milk production is down 4.4% (4.2% if you look at milk solids). Rabobank thinks that milk production will go down for the whole season. “On the other hand, US milk production rose the most in August in 15 months, and the US milk supply is showing some good signs,” says Harvey.

OVERVIEW OF GLOBAL DAIRY MARKET PRICES
Milk supply

Even though Australia’s milk supply was strong going into the 2022-2023 season, it started off on a bad note. Last season, the national milk supply dropped by 4%, and it’s down more than 8% at the start of this season. Rabobank still thinks that milk supply will stabilise as the season goes on because there is plenty of feed, water for irrigation, and good farmgate margins.

The Rabobank analyst says that even though Chinese buyers aren’t around as much as they used to be, they can still be seen on global markets. The August numbers showed that the total volume had dropped for the sixth year in a row. Rabobank has been predicting that imports will be lower in 2022, and this trend is likely to continue into 2023.

“It doesn’t surprise me that China’s imports are going down,” says Harvey. “A strong local supply, a lot of stock on hand, and a drop in consumer demand are all leading to fewer imports. The China dairy market will be watched closely to see where prices are headed in the future.”

Rabobank says that other importers are taking advantage of lower prices and less buying from China. “This has helped keep Oceania’s commodity prices stable in September, after they had moved a lot since March.” In the dairy complex as a whole, spot prices for products from Oceania went up by a small amount. Rabobank does not rule out further price drops and says that local exporters will be happy with the recent price stability.
Prices for dairy

At the Global Dairy Trade auction on October 18, prices went down, which was the same thing that happened at the last event. The average price at the sale every two weeks dropped 4.6%, to US$3,723 per metric tonne (mt). Butter fell another 2.6% at the last auction, making it worth US$4,851 per mt. This is a long way from March, when it was worth US$7,086 per mt, says Nathan Penny, a senior agri economist at Westpac.

OVERVIEW OF GLOBAL DAIRY MARKET PRICES

Whole milk powder, which has the most impact on Fonterra’s farmgate milk price, fell 4.4% to an average of US$3421 per mt. Skim milk powder, Fonterra’s second-biggest reference product, fell 6.9% to an average of US$3,250 per mt.

Penny says that the bad result is because the economy in China, which is Zealand’s main market, is weak. “China is sticking to its Covid Zero policy, which limits people’s freedom of movement and, in turn, slows down the economy. At the last Communist Party Congress, this policy was again reaffirmed. Dairy markets may have been hoping for some relief on this front, but since none has come, they have priced in more price drops for dairy products around the world.

Sieta van Keimpema, who is the head of the European Milk Board (EMB), has said that dairy farmers and their families can’t handle the rising costs in the industry right now. She would like to see farms and food processors get money to help pay for energy costs. Van Keimpema says, “The individual actors in agriculture and along the food production chain depend on energy and production inputs being available at low prices.” “Today, there is a slow domino effect, where each link in the chain brings down the next one.”

North Macedonian dairy farms face bankruptcy as inflation soars.

“There is a shortage of milk. Everything is getting more expensive, which hurts people with low incomes, says Ljupcho Bajdeski, a retired man who shops at Skopje’s largest farmer’s market in North Macedonia.

“If they bought two kilos before, they would only get one now. People are also buying less dairy products because the price of cheese went up by almost 30%,” he says.

The price of a litre of milk has gone up from about 57 denari ($0.92) to about 80 denari, which is hard for many seniors on pensions to pay.

In a country where the average wage is about 514 euros ($512), people will have a hard time buying milk that costs almost 1.50 euros per litre.

Zora Petreska, who has a small stand at the market where she sells dairy products, says things are the worst they have been in the 20 years she has been in business.

“This has never happened before. Very little is being used. I have a hard time getting dairy products. She says, “A lot of producers have quit and shut down their businesses.”

“The situation is pretty bad. The government isn’t doing anything, and we’re having a hard time. I really can’t see how this will end, but the way things are going, it will end at some point.
PRICES RISE, PRODUCTION FALLS

Erdzelija farm in Sveti Nikole, outside the capital city of Skopje, is one of many affected by the current rise in prices around the world. The International Monetary Fund says that Russia’s invasion of Ukraine has made the situation worse.

Just five years ago, the dairy made between 4 and 5 tonnes of milk every day. Now, it only makes 450 to 500 litres.

“Our farm made 900,000 litres of milk in 2017, but we only expect to make 180,000 litres this year,” says Aneta Jordanova, the manager and an agronomist.

She says that because of the drop in sales, the farm had to let go of up to 70% of its staff.

Nikola Petkovski, who owns and runs the farm, says that the lack of trained farmhands is especially bad for smaller farms like Erdzelija that are not modern or cutting-edge. The situation is made worse by the rising prices of fertiliser and fodder, which makes keeping cows harder and more expensive.

Even worse, companies buy 4% fat milk from dairy farms for 0.45 euros per litre, but a litre of pasteurised milk costs about 1.5 euros, which is one of the highest prices in the Balkans. Petkovski says that the low price of milk is putting dairy farmers on the edge of going bankrupt.

“If the milk companies keep giving us such low prices to buy milk while selling the same milk for four times as much, we won’t be able to keep up, and the number of cows will keep going down until the farm has to close.

“This is a problem for all farms in North Macedonia, not just ours,” says Petkovski.

The problem is made worse by problems with the quality of the feed.

Jordanova says that when Erdzelija was at its best, it got about 80% of the food for its cows from its own farms. On the farm, the food was of the highest quality, and each dairy cow could give up to 27 litres of milk a day.

Increases in U.S. dairy exports can be attributed to rising global demand.

The growth of U.S. dairy exports is twice as fast as the growth of what Americans buy.

Megan Sheets, senior director of strategic development and strategic insights for the U.S. Dairy Export Council, said that the amount and value of U.S. dairy exports set a record in 2021. “That was really caused by the return to normalcy after the pandemic, which led to a rise in international demand.”

Even though the export council doesn’t think that dairy exports will grow as much in 2022, they still want to see growth.

During a talk at the World Dairy Expo, Sheets said, “About 18% of U.S. milk production goes overseas, and we expect that to rise to 20% in the coming years.”

About 95% of the people in the world live in places other than the United States.

“This shows how big the opportunity is when you work with people all over the world,” Sheets said.

Sheets said that over the past year, three really strong markets for U.S. dairy products were Southeast Asia, China, and Mexico.

She said, “The main things we sell around the world are skim milk powder, nonfat dry milk, dry whey, and cheese.”

Sheets said that in the past, exports were more based on what could be sold.

“We were sending out more than we needed,” she said.

Now, the dairy council is seeing a change to a market that is based on what people want.

“If we want to grow our dairy exports, we need to know what matters to consumers and customers around the world,” Sheets said.

The Export Council did a study called “Competitive Corporate Assessment” to find out what its competitors were doing.

Sheets said, “One of the most important things I learned from the study is that many of our corporate competitors have adopted the demand-driven approach at every level of their business.” “It drives product innovation and research priorities for the markets they’re investing in.”

Sheets talked about some of the things, like taste and enjoyment, that are driving the demand for dairy products around the world.

She said, “The pandemic has had a long-term effect on so many people around the world. It has changed how we act, how we use information, technology, food, and drink, and it has changed many people’s hopes and views.” “We’ve had about 10 years’ worth of changes in just three years.”

Change is hard and uncomfortable for a lot of people.

Sheets said, “It’s no surprise that people all over the world are turning to taste and enjoyment and finding comfort in food and drink.” “This is a chance for many types of dairy products, but especially cheese.”

The Export Council found out from a global study that taste is the main reason why people buy cheese all over the world. But what tastes good in one market could be very different from what tastes good in another. So, the council worked with people in Saudi Arabia and South Korea to find out what kinds of cheese they like to eat.

Sheets said, “We saw more processed cheese in Saudi Arabia than we expected.” “We found out that they like a balanced flavour with some sweet and sour notes, but they don’t like bitter cheese or cheese that smells or tastes too strong.”

According to the study, people in South Korea like mild cheese, and the milk forward profile stood out.

Sheets said, “Color was important, and white meant that the food was fresh.” “The texture was more important, and they like white cheeses that are soft, creamy, and white.”

Sustainability is the second trend that drives demand.

Sheets said, “The health of the planet is now the most important thing, not the health of the people in 2020.”

She said, “Not only do people care about sustainability, but it’s also a big reason why people in Southeast Asia and Mexico buy things.” “They buy things based on how well they do for the environment.”

Sustainability is something that the Export Council sees as a plus for U.S. dairy exports.

Sheets said, “We have so many forward-looking projects going on in U.S. dairy farms that we know there’s a chance to tell customers all over the world about them.”

Another important trend for the dairy market is the focus on health and nutrition.

Sheets said, “A lot of people are putting their health first and using food as a way to deal with stress and stay healthy over time.”

This is making more people want proteins.

Sheets said, “It’s really interesting that people think protein is good for their health in many ways they associate with nutrition.” “Consumers believe that protein is good for their immune systems, muscles, overall health, and energy levels.”

Yogurt is becoming more popular because people are interested in nutrition and protein.

Sheets said that health is the main reason why people buy yoghurt. “We think there will be a steady demand for yoghurt, and drinkable yoghurts could become more popular as a way to stay healthy on the go.”

Because of the pandemic, people can get dairy more easily and quickly because technology is being used more quickly. One example is the live commerce platform, which is becoming more and more popular in Asia.

Sheets said, “With this platform, you can instantly interact with someone who is doing a live retail broadcast by using your phone to buy food, drinks, or any consumer packaged good.”

The export council’s main goal is to tell people all over the world about how great U.S. dairy is.

Sheets said, “We’re putting out an app called USA Cheeseboard that lets people outside the U.S. learn more about American cheese, recipes, and how to pair it with other foods.” “We’re really happy about what technology has let us do to connect with customers.”

Sheets said that even though U.S. dairy has a lot of good things going for it around the world, it also has to deal with problems like labour, workforce, logistics, and inflation.

“When we face problems, we always have the chance to come up with new ideas and find solutions by thinking differently than we have in the past and by looking to the long term when the short term is hard,” she said.

Visit www.usdec.org or call 703-528-3049 to find out more about the U.S. Dairy Export Council.

Deficiencies in Russia’s milk quality are exposed

The organization’s research, which pointed out these problems, covered 25 provinces, which make up about a third of Russia’s land area. In total, the organisation looked at milk from 50 Russian brands and found that 14% of samples did not meet safety standards and 40% of samples had “various defects.”

There were safety concerns about contamination with E. coli or a higher number of other harmful bacteria. In the group of “various defects,” bad smell or taste was included. Researchers found that this usually means that the raw milk isn’t very good. Some of the products that were tested seemed to be fakes.

On the other hand, the study found no problems with the high amount of antibiotics. This used to happen a lot in the Russian dairy industry because the rules for giving antibiotics in feed were not as strict as they are now.
Old milk equipment

Maria Zhebit, who is in charge of public relations for the Russian union of dairy producers, Soyuzmoloko, told the Russian newspaper Moskovskaya Gazeta that some of the quality problems could be due to the fact that dairy producers in Russian provinces are using old technologies.

“Not all small businesses in a certain area have the chance to update their equipment and buy the latest technology. She said, “Many factories in the regions of Russia are still working at the same levels they were at 30–40 years ago. “Such [less advanced] technology doesn’t always make it possible to make products that meet high standards, but as we can see, almost every company tries hard to follow safety rules.
Import disruptions

Also, the Russian dairy industry has trouble getting some imported ingredients, but it’s hard to say how much this affects the quality of dairy products sold in stores.

“There are a lot of starter cultures on the market right now. The biggest companies have built up stocks of imported ingredients, and imports keep coming onto the market. Russia makes its own kefir starter cultures, but most of its other starter cultures come from other countries. “We also depend on imports when it comes to packaging,” said Zhebit.

Moskovskaya Gazeta found out that some Russian dairy producers still get parts and raw materials from Europe even though they don’t have to. A source who didn’t want to be named in the Russian dairy industry said that when sanctions were put in place at the beginning of 2022, the cost of shipping from the European Union doubled the price of everything that was brought in.

But the logistics problems have been fixed, and the prices are now 15-20% higher than they were at the beginning of the year.

Why is the price of milk going up? Floods, pandemics, wars, and market forces are all to blame.

At the end of 2021, the cost of a litre of home-brand milk in an Australian supermarket was about $1.30. It’s now about $1.60.

What will it cost at the end of 2022? That depends on the continued effect of flooding on prime dairy-production regions in New South Wales, Victoria and Tasmania, as well as on global economic conditions.

The Australian Bureau of Agricultural and Resource Economics and Science has projected a 28% increase in the farm-gate milk price in 2022-23 – to 72.5 cents per litre, a record high. With less milk being produced, it could be even more.


Australia’s dairy regions

ABARES, CC BY-NC-ND

It’s a case of higher demand and lower supply. Production has been declining since 2014. In the first half of 2022, ABARES says milk production was about 7% lower than the same period in 2021:

This was driven by extreme weather events: a drier than average start of the year in southern Victoria and northwest Tasmania, flooding in regions of Queensland and northern New South Wales. Also, with export prices for Australian dairy products increasing substantially at the start of 2022, less milk was available to the domestic market.

Obviously, things aren’t all rosy. Some dairy farmers face the devastation of natural disasters. All face the same post-COVID challenges as other primary producers. Russia’s war on Ukraine has help drive up costs of inputs, from fertilisers to feed. Labour is hard to find.

But for all that, the record high farm-gate price is good news for an industry where the number of farmers has declined by a quarter in the past decade (from about 7,500 in 2011 to about 5,700 now).

Deregulation stirs the pot

Until 2000, farm-gate milk prices were regulated. State and territory governments set minimum farm-gate prices that maintained farmer income.

This was abandoned in July 2000. With deregulation, farmers, processors and supermarkets were set free to negotiate prices.

In economic theory, free trade works fine when you have a large number of buyers and sellers, all with the same amount of information about what is happening in the market.

But in the milk industry, thousands of producers sell to a handful of milk processors, who then sell to even fewer retailers. The major supermarkets control almost 60% of total milk sales.

This is not always such a problem. It is not often you hear fresh producers screaming at supermarkets, in what is a very similar arrangement. But with the dairy industry, as noted in a 2021 report from the Department of Agriculture, Waters and the Environment, there is a “perceived market failure”.

Why? It has to do with how supermarkets have used their power.

Waging the milk price war

To give time for the market to find an equilibrium, the Howard government introduced a “Dairy Adjustment Levy” of 11 cents per litre to support farmers through deregulation. This levy remained in place until 2008, when it was abolished by the Rudd government.

Then, in 2011, the “milk war” broke out. Coles had the idea of luring shoppers from Woolworths by selling milk at $1 a litre. Woolworths responded. Aldi joined the move. And the war kept prices artificially low for almost a decade.

Supermarkets put the squeeze on processors, who had little option but to accept what was offered for crucial supermarket contracts. Processors then put the squeeze on farmers.



Many decided the effort was not worth it, and quit farming. Milk production peaked in 2014 then declined.

Supermarkets finally abandoned $1/litre milk in 2019, under considerable public and political pressure to acknowledge that, after eight years with no increase, some rebalancing was needed.

During this time, overseas demand for dairy products has also been increasing, especially in Asia. Now about 32% of Australian dairy production is exported – not as fresh milk, but as cheese, butter and other dairy products. (It takes about 10 litres of milk to make 1 kilogram of cheese, and 20 litres to make 1kg of butter.)

On top of that, lately US and European dairy farmers have had a hard time with drought, increasing international prices. The United Nations’ Food and Agriculture Organization’s Dairy Price Index increased by more than 17% from 2020 to 2021, and is expected to rise another 15% by the end of this year.


Australian milk production and farm-gate price

ABARES; Dairy Australia

The projected 28% rise in farm-gate milk prices in 2022-23 will bring the value of the Australian dairy production to a record $6.2 billion.

Which is good news for the long term sustainability of dairy farming in Australia. You might not appreciate it, but to keep dairy farmers in business, a fair price must be payed for your fresh milk.

Source: theconversation.com

U.S. Dairy Producers Post Increased Milk Production for the Third Consecutive Month

Despite challenging weather and margin complications, each of the major dairy states saw volumes rise. Production growth was driven by both stronger yields and a modestly larger herd.

 

SeptemberMilkProduction_cowsmo22

U.S. dairy producers forged ahead in September, posting increases in milk production for the third consecutive month. Totaling 18.282 billion pounds, production was 1.5% greater than in the same month last year. This represents moderately slower growth than the 1.7% reported in August as USDA revised their data up for that month. Despite challenging weather and margin complications, each of the major dairy states saw volumes rise. California, Wisconsin, and Idaho saw output increase by 0.5%, 0.9%, and

2.4%, respectively. Texas, now clearly the country’s fourth largest dairy state, saw volumes soar by 8.5%. Production in the Lone Star state was just 34 million pounds shy of Idaho’s production during the month.

Production growth was driven by both stronger yields and a modestly larger herd. Yields rose to 1,943 pounds per cow during the month, up 1.4% versus last year’s value. Meanwhile, at 9.411 million head, the national herd was 6,000 cows larger than last September. However, USDA made important revisions to their herd number

estimates in recent months. While previous numbers illustrated a herd that was growing through the summer, updated data now shows that the herd peaked in May at 9.419 million head, and has been gradually declining ever since.

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U.S. producers are likely to face headwinds in the coming months, decreasing the likelihood that production will grow in a material way. Margins are coming under increased pressure as milk prices retreat from their highs while operating costs remain elevated relative to historical standards. This situation is not unique to the United States. Similar circumstances are affecting producers in other global supply regions where weather challenges and regulatory shifts are further restricting production. Looking forward, it seems difficult to believe that global milk production could grow in a significant way, which is likely to keep dairy commodity prices above historical averages over the near term.

At the Global Dairy Trade (GDT) auction held earlier this week, the GDT index fell once again by 4.6%, the second consecutive decline. Lower prices were seen across every product though milk powders fared the worse. Skim milk powder and whole milk powder prices fell by 6.9% and 4.4%, respectively, relative to the prior event. Prices are now well off their highs achieved in March and April of this year, though they remain elevated relative to historical values.

As autumn advances, cooler temperatures have ushered in stronger milk volumes and higher component levels in most parts of the country. Market participants indicate that demand has been solid from both bottlers and manufacturers and spot loads are moving around the country to fulfill their best use. Cream availability has increased, and multiples have fallen, even as demand from both Class II users and butter churns has remained strong.

Even with active churning activity and increased cream availability, spot butter prices remained elevated at the CME this week. On the heels of a small dip on Monday, a 3.25¢ gain on Tuesday pushed the butter market up to $3.20/lb. where it remained for the balance of the week. Activity was quiet, however, as no loads traded hands over the five trading days. Strong demand from the retail sector has played a key role in keeping the market supported and some participants speculate that prices will begin to retreat once retail buyers have filled their holiday orders.

On the other side of the Class IV complex, nonfat dry milk (NDM) markets continue to sink. The spot market lost ground in everyday of trading this week, ending Friday’s session at $1.42/lb. down 7¢ compared to last week’s close. Demand is lethargic, especially from international clients. Mexican buyers continue to perch on the sidelines waiting for prices to fall further before resuming their purchasing. Some are optimistic that we are nearing price levels that will be sufficient to reignite demand from south of the border.

Cheddar markets were volatile this week, with most of the activity taking place in the barrel trade. CME Cheddar barrels moved up during the first half of the week, stretching the inverted block-barrel spread as wide as 16¢ on Wednesday. Then, the tides turned and a 6¢ and 5.5¢ loss on Thursday and Friday pulled the barrel price back down to $2.09/lb., down 3.5¢ compared to last week. The block markets were more reserved with only a three-quarter cent gain on Thursday. Blocks wrapped up Friday’s session at $2.0575/lb. reducing the inverted block barrel spread to 3¢.

Cheesemakers have been active but the relationship between supply and demand has been sufficient to keep tension in the markets, especially for barrels. Foodservice and export demand has generally remained steady however retail demand has begun to weaken. Dairy Market News reports that some retail consumers are, “buying smaller cheese packages or switching to private label brands.”

Whey markets only observed modest fluctuations during the week. Robust cheese production has kept a steady whey stream available for driers. Meanwhile demand has been understated. At the CME, the dry whey market dipped slightly on Tuesday and Wednesday before posting a half penny gain on Thursday. Ultimately the market finished the week at 44¢ per pound, a quarter cent decrease compared to last week.

While daily values ebbed and flowed, grain markets moved mostly sideways this week. Corn futures settled on Friday within a few cents per bushel of Monday’s settlements. Meanwhile, soybean futures saw some modest increases with nearby contracts adding about a dime per bushel over the week. With corn contracts above $6.80/bu. and soybean above $14/bu. in the first half of next year, it appears that stubbornly high feed prices will continue to be a thorn in dairy producers’ sides in the coming months.

Source: Jacoby Dairy Product Merchants

In September 2022, Wisconsin’s milk production reached 2.62 billion pounds.

According to the most recent report from the USDA, National Agricultural Statistics Service – Milk Production, Wisconsin produced 2.62 billion pounds of milk in September 2022. This was 1% more than in September 2021. At 1.27 million heads, the average number of milk cows in September was 1,000 less than in August and 7,000 less than in September 2021. The average amount of milk each cow gave each month was 2,060 pounds, which is 30 pounds more than in September.

Milk 
Source: United States Department of Agriculture

In September, the major 24 States made a total of 17.5 billion pounds of milk, which is up 1.6% from September 2021. At 18.2 billion pounds, the revised production for August was up 1.8% from the same month in 2021. From last month’s preliminary estimate of production, the August change was an increase of 13 million pounds, or 0.1%.

The average amount of milk each cow gave birth to in September was 1,961 pounds. This is 26 pounds more than September 2021.

In the 24 largest states, there were 8.93 million milk cows on farms, which was 19,000 more than in September 2021 but 2,000 less than in August 2022. During the July–September quarter in the United States, 56.5 billion pounds of milk were made, which is 1.2 percent more than the same quarter last year. During the quarter, the average number of milk cows in the U.S. was 9.41 million, which was the same as the April–June quarter but 29,000 less than the same time last year.
Milk
Source: Department of Agriculture of the United States

Mexico’s milk production and imports will increase in 2023.

A recent USDA GAIN report shows that core and food inflation in Mexico is high, but the foreign service officer at this post thinks that both dairy production and imports will rise in 2023.

Milk and cheese production in Mexico is expected to go up in 2023 because more money will be put into dairy farms in key producing areas.

Post predicts that cheese and butter imports will go up in 2023 because urban consumers and hotels, restaurants, and other institutions will buy more of them.

Mexico can’t make more milk powder because there isn’t enough infrastructure to dry out liquid milk. Imports of dry whole milk powder and skim milk powder, especially from the United States, are still strong and are expected to grow in 2023.

U.S. dairy exports grow for 5th consecutive month

In August, U.S. dairy exports were driven by the continued demand for cheese, butter, whey, and lactose around the world.

With U.S. milk production on the rise again in August, it was clear that international customers want more U.S. dairy products, even though there are many worries about the economy as a whole.

In August, the amount of milk solids equivalent (MSE) that the U.S. exported went up by 6% (+12,291 MT MSE). With more cheese and butter going overseas and prices going up, the value went up even more, jumping 23%, or $158.7 million. Year-to-date (YTD), U.S. dairy exports have done better than expected and are on track to set new volume and value records again in 2022, with exports up 3% and 26%, respectively.

Except for non-fat dry milk/skim milk powder (NFDM/SMP), exports of U.S. dairy products were strong in all other complexes. Even though prices have gone up, butterfat exports have gone up by 71% (3,295 MT). Cheese exports stayed strong, increasing by 6% (2,130 MT), with Mexico, South Korea, and Saudi Arabia showing the most growth. And exports of sweet whey and lactose to China, which went up by 3,700 MT and 4,183 MT, respectively, really helped to boost the total amount of U.S. exports.

On the other hand, NFDM/SMP exports are still limited by low production (-8% YTD), and U.S. shipments fell 17% in August (-13,298 MT). Positively, exports to Mexico stayed about the same, dropping by only 1% (454 MT), and the rest of Latin America bought a lot more U.S. NFDM/SMP, going against the general trend (+50%, +3,070 MT). The main reason for the overall drop was a huge drop in Southeast Asia (-40%, or -11,768 MT). With U.S. milk production on the rise again, there should be more milk available, which should boost U.S. exports to Asia in Q4 and through 2023.

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Chart1.svg (2)

For detailed data and charts, check out USDEC’s Data Hub

 

Now, let’s talk about the two main things we learned:

Key to success in 2022: Latin America

If USDEC’s recent mission of farmers to Chile is any indication of the U.S. dairy industry’s long-term commitment to Latin America, then the impressive growth in exports to the region in 2022 shows that the industry’s commitment is paying off.

The first thing that comes to mind when you think of the US’s largest market by value is Mexico. Even though prices went up a lot for consumers in 2022, our neighbour to the south had a strong market. Overall, U.S. dairy exports to the country are up 3% (+8,802 MT MSE) so far this year, and August data showed that steady growth continued (+3%, +1,439 MT MSE). In 2022, U.S. cheese exports to Mexico have grown by more than 13,000 MT, or 19%, more than exports to any other market. This is a big deal.

Chart2 (2)-Oct-05-2022-07-14-12-07-PM

But Mexico is not the only country in Latin America where demand is going up. Year-to-date, U.S. dairy exports to Central America and the Caribbean have grown by more than 25%, or 15,892 MT MSE, and exports to South America have grown by 10%, or 7,556 MT MSE. Cheese exports to Central America and the Caribbean have been especially notable, with Panama (+3,645 MT) and the Dominican Republic (+1,910 MT) leading the way.

Still, cheese is not the only reason why Latin America is growing. In fact, NFDM/SMP exports to Central America and the Caribbean are up by more than a third (+34%, +7,671 MT), which is a rare bright spot for NFDM/SMP exports. South America is also a good market for whey, even though it has been a small market in the past. Shipments of dry whey to South America rose 152% in August (+655 MT) and 58% so far this year (+2,593 MT).

There are still many questions about how long this growth will last, given how uncertain the global and Latin American economies are, but it is clear that U.S. dairy’s investment in the region is paying off.

Recovery in the whey complex was led by dry whey.

August was a good month for most whey products. Specifically, the amount of dry whey shipped reached a 17-month high of 22,634 MT, which was a 30% increase from the same time last year. This was the third straight month of year-on-year growth after a rough start to 2022.

Exports of dry whey dropped by almost 20% in the first five months of the year compared to the same time last year. But according to the most recent data, shipments have gone up 16% in the last three months. And if the trade trends of August continue for the rest of the year, U.S. exports of dry whey will rise overall in 2022, despite a slow start.

China’s market was mostly to blame for the sharp drop and now the rise. For the first time in 13 months, dry whey shipments to China were higher than they were a year ago (+52%). This happened in August. Shipments totaled 10,797 MT, which was the same as August 2020 (11,305 MT) and more than any other month since May 2021.

Positively, the growth in whey in August wasn’t just in dry whey. At 20,096 MT (+7%, +1,335 MT), shipments of whey permeate under the “modified whey, not elsewhere specified” code were the fourth highest on record. Only the three months before were higher. Shipments of whey protein concentrate with the HS code 0404.10 were also impressive, up 35% year-over-year (+4,048 MT). Exports to China and South America went up by 79% (+3,752 MT) and 1,414% (+1,121 MT), respectively.

Overall, whey exports, especially to China for sweet whey and permeate, are getting better because pork prices keep going up. Even though pork prices are still not as high as they were during the height of African Swine Fever, they are likely high enough to encourage investment and more use of whey as a feed ingredient. In the end, U.S. whey exports to China should stay the same as long as pork prices in China stay the same.

 

Chart3 (2)-Oct-05-2022-07-15-24-30-PM

Source: US Dairy Exporter Blog

Forecasts for Fonterra’s milk production have been lowered.

Fonterra Co-operative Group Limited has changed its prediction for how much milk it will get from New Zealand in 2022/23 to 1,480 million kilogrammes of milk solids (kgMS). This is less than the 1,495 million kgMS it had predicted before.

Fonterra’s forecast for 2022/23 milk sales was last changed in early September. Miles Hurrell, the CEO of Fonterra, says that this was because the season got off to a slow start in some parts of New Zealand because of the weather.

“The changeable weather that caused a slow start on the farm has continued, which has led to lower collections in September and early October. This has caused us to change our collections forecast again,” Hurrell said.

“Because of this, we have changed our prediction for 2022/23 to be 1.0% lower, at 1,480 million kgMS.”

U.S. Milk Production is Climbing

After months of not knowing what would happen with U.S. milk production, the numbers show that the trend is now clearly toward growth. The preliminary numbers from the USDA’s August report on milk production showed that milk production was more than 1.5 percent higher than a year ago. The previous preliminary July number was changed from being the same as a year ago to being half a percent higher. The trend toward a return to growth in milk production was also clear in the numbers for many states. Less clear is what rising production growth means for milk prices. Under the Dairy Margin Coverage programme, margins have returned to levels that trigger payments for farmers who signed up for maximum coverage. However, strong domestic consumer demand and market signals suggest that price declines will be limited.

Even though there are more supplies, U.S. dairy export demand is still a little lower than it was in late spring, but it is still near record levels. Over the past few months, wholesale prices for cheese, nonfat dry milk, and dry whey have been going down at different rates, which has caused milk prices to go down as well. However, most of these prices seem to have found a floor and are even slowly going back up. This month, the USDA raised its predictions for the next two years about how much milk will cost. The price of butter is still going up. Retail price inflation for dairy products this year is having an effect on domestic consumption, but that effect seems to be small because dairy demand isn’t very flexible. In some cases, any drop in domestic demand has been partially offset by strong export sales.

See the full report here! 

Attendees at the World Food Prize hear from U.S. dairy industry leaders on the importance of sustainability and global food security.

In a panel discussion at the World Food Prize, a nutritionist, an innovative dairy farmer, and a leader in food security around the world talked about how animal agriculture and dairy can help solve climate change and world hunger. The panel also talked about how the United States will host the biggest dairy conference in the world, the 2023 International Dairy Federation World Dairy Summit, in Chicago.

Katie Brown, EdD, RDN, Senior Vice President for Scientific and Nutrition Affairs at National Dairy Council, Suzanne Vold, a dairy farmer near Glenwood, MN, and Jay Waldvogel, Senior Vice President of Strategy and International Development at Dairy Farmers of America and a board member of Global Dairy Platform, will be on the panel.

Brown said, “To meet the big challenge of feeding a growing world population with limited natural resources, dairy is answering the call to provide sustainable, efficient, high-quality food that people all over the world can get.” “The foods we choose every day make up dietary patterns that can improve health and wellness and lower the risk of chronic diseases at all stages of life. The world will need dairy foods now and in the future to deal with the problems caused by malnutrition, just as U.S. dairy will be important to make sure the world is fed in a sustainable way.

Vold said, “In a fragile world, dairy farms are strengthened by their focus on generations and family ties. This is a truth that dairy farmers all over the United States follow as they lead the world in innovation.” “In other words, we take care of our cows and protect our resources so that our farms can thrive for future generations and help feed a world that is growing.”

“The global dairy industry is a community of more than a billion people,” Waldvogel said. “There are more than 130 million farmers around the world, and 600 million people live and work on those farms. Those farms create 125 million jobs, and those jobs support hundreds of millions of other family members.” “Our role in food security is clear from the size of the job alone. But even more than that, if you look at how dairy works locally in terms of nutrition, shorter supply chains, and the fact that many of them are run by women, you can see that it’s a mix of the sheer size and scale of dairy and its role in food security, as well as the fact that dairy is very close to the people who need it.

The panellists also talked about next year’s IDF World Dairy Summit, which will be held at McCormick Place in Chicago from October 16-19, 2023. The award gives the dairy industry a chance to show off its innovations in areas like sustainability, nutrition and health, standards, safety, and quality. This helps the industry reach its goal of feeding the world with safe, healthy, and sustainable food.

The IDF World Dairy Summit is an important place for dairy leaders, experts, farmers, processors, traders, and journalists from all over the world to talk about how to move the global dairy industry forward in a positive and sustainable way. This year’s meeting is the first one to be held in the United States since 1993. The theme is “BE Dairy: Boundless Potential, Endless Possibilities.” U.S. dairy is making programmes that will feature global and industry leaders, experts, scientists, technical specialists, farmers, and more to look at the most important opportunities in the global dairy sector today and in the future.

Milk consumption is at a level not seen since the 1950s.

This year, the U.S. According to a U.S. Department of Agriculture report on how much dairy each person eats, the dairy industry has finally moved on from the 1960s. In terms of popularity among Americans, dairy has gone back to where it was in 1959.

The U.S. Department of Agriculture (USDA) released its annual report on per-person dairy consumption in the U.S. on September 30. The report showed that the demand for dairy products in the U.S. went from 655 pounds per person in 2020 to 667 pounds per person last year.

That makes dairy more popular than it was in 1960, when it was 659 pounds, and close to what it was in 1959, when it was 672 pounds.

In other words, Elvis was in the Army the last time Americans wanted as much dairy as they do now. And remember that in 1959, there were only a little more than half as many people living in the United States as there are now. And exports, which now make up almost 20% of domestic production, were almost nonexistent back then.

The slow decline of fluid milk has kept going, according to data from the USDA. But the number of people who eat American-style cheese reached a new high last year.

But even though the types of dairy products people eat change over time, the overall trend is clear and impressive. The gain in 2021 is the seventh in the last eight years.

Even though non-dairy products are becoming more and more of a threat, and consumers are becoming more and more picky, and even though things like diet fads and pandemics can cause problems, consumers continue to find dairy more and more useful, important, and preferred. That shows how hard dairy farmers and the industry as a whole work.

Ireland’s dairy farmers have had a fantastic year, with average income jumping by 30 percent.

This year has been amazing for Irish dairy farmers, whose summer milk price went from being the ninth best in the EU to being the third best.

Teagasc says in its annual report on the Situation and Outlook for Irish Agriculture that this will bring the average income of a dairy farm to more than €130,000.

Comparing milk prices in July 2021 and July 2022, the EU Commission’s Milk Market Observatory found that milk prices at the farm gate rose by 55% every year in Ireland. Only Lithuania, Latvia, the Netherlands, and Belgium saw bigger increases: 76%, 63%, 60%, and 58%, respectively.

On the other hand, prices went up much less in some major dairy countries. For example, in the year leading up to July, prices went up only 18% in France, 30% in Italy, and 32% in Austria. The average increase in milk prices for farmers in the EU was 42%.

Due to the lack of growth in global milk supplies, economists at Teagasc said that milk prices have gone up a lot, which has helped Irish dairy farmers.

The average price of milk in Ireland in 2022 is likely to be 40% higher than in 2021. But the cost of making milk is likely to go up by about 10 cents per litre by 2022.

Teagasc says that the result will be that dairy farms will make at least 30% more money in 2022 than they did in 2021.

But fixed milk price contracts that pay much less than the spot milk price will hurt some farms’ incomes, especially if a lot of the milk they make has already been sold at the fixed price.

This year, Irish milk production isn’t expected to grow for the first time since milk quotas were taken away in 2015. (unless there is a late season supply surge). Teagasc says that dairy farmers are being careful about further growth because input costs have gone up so much. For example, the cost of feed is about 25% more than it was in 2021.

Irish milk production was also affected by a summer and fall that were very dry. It could hurt dairy farmers’ incomes, especially in the South and East. which had the least rain in the summer, making grass less available.

The gross profit margin on dairy farms in the EU is thought to have gone up 42% in the first three months and 57% in the second quarter compared to the same time last year. Teagasc says that the average Irish dairy farm should have a net margin per hectare of more than 22 cents per litre this year. This is a 60% increase from 2021.

The European Commission thinks that milk prices will stay high over the next few months, even though prices are very high.

But the EU dairy industry is very worried about the lack of gas and the high cost of energy, especially when it comes to drying and processing milk. Some member states are also having trouble because of environmental issues, animal welfare standards, and a lack of workers.

The European Dairy Association, which represents milk processors, also warns of uncertainty about the availability of natural gas for milk processing, energy prices, sharply rising input costs, and how consumers will react to high inflation.

It says that EU exports are likely to go down overall, especially for skim and whole milk powders, but that the use of all dairy products in the EU may stay the same.

The European Association of Dairy Trade (Eucolait) said that inflationary pressures haven’t shown their full effects yet, but that dairy prices aren’t likely to change much in the near future unless there is a strong recovery of supply.

The European Commission said that the average farm gate prices for milk in the EU have been going up for the last 19 months and were 47% higher in July than the average for the last five years.

Compared to 2020, the cost of feeding dairy cows in the EU with a mix of cereals, rapeseed meal, and soy meal has gone up by about 80%.

In the first seven months of 2022, the amount of milk collected in the world’s main exporting regions fell by 0.9%. But the amount of milk made around the world may start to grow again before the end of the year.

The world’s demand for dairy has stayed pretty steady, but overall trade flows are lower than last year because China’s demand has dropped. China bought more from other major importers like Mexico, Southeast Asia, and Algeria to make up for the fact that it imported less.

So far in 2022, the EU and New Zealand have lost some of their export shares. However, together with the USA, they still make up 55% of the world’s export volumes. The United States’ share of exports went up from 21% to 23%.

So far in 2022, the top five places where EU exports went were the UK, China, Indonesia, the USA, and Japan. Together, they made up 40% of all EU exports.

Teenagers are dumping milk on store floors to protest the “destructive” dairy industry.


The latest move by people who care about the environment is for grocery stores to pour out milk.

Teenagers who care about the environment do “milk pours” all over the United Kingdom. Animal Rebellion, an animal rights group, says that the new thing to do is to go to the grocery store, pick up cartons of milk made from cows, and pour out the milk.

Teens are seen in videos that have been shared on social media pouring milk all over the store, including on the floor, over the sales counters, and in other places.

“The dairy industry does a lot of damage to the environment. The organisation said in a tweet on Saturday that the top 5 meat and dairy companies now produce more greenhouse gas emissions than Exxon, Shell, or BP.

It also said, “We NEED a plant-based future now.”

The account also shared a report from Grain, an international non-profit organisation, and the Institute for Agriculture and Trade Policy (IATP). The report says that the world should stop eating meat and dairy to “dramatically reduce its greenhouse gas emissions.”

Animal Rebellion says that the “milk pours” happened on Saturday in eight different places, including London, Manchester, Norwich, and Edinburgh.
The angry teens want a future where people eat more plants.

In another tweet, the group said, “Animal farming is THE leading cause of the loss of our wildlife and natural ecosystems.” It also asked the government to “support farmers in an urgent transition to a plant-based food system and let the freed-up land be rewilded to restore wildlife populations.”
Dairy milk is being poured out in grocery stores all over the UK.
Dairy milk is being poured out in grocery stores all over the UK.
RebelsAnimal/Twitter

Several countries around the world have put rules on the agriculture industry, like limiting the amount of nitrogen that can be released when milk is made. Environmentalists have pushed for people to use alternatives to dairy milk, like almond, soy, coconut, and oat milk. However, these milks have also been criticised.

In order to stop climate change, the Biden administration has said that it plans to force changes on the US farming industry.

In 2020, the EPA thought that 11% of the U.S.’s total greenhouse gas emissions came from agriculture, compared to 27% from transportation, 25% from energy, and 24% from industry.

Lactalis will keep its business in Russia

The largest dairy company in the world, Lactalis, said on Friday that it will keep doing business in Russia to serve the local food market. This came after Reuters reported that Danone, a French dairy company, would give up control of its business in Russia.

“At this point, we’ve decided to stay in Russia,” a spokesman told Reuters. “We think we’re doing our job by feeding the civilians,” they said.

Because Moscow’s invasion of Ukraine has caused a political standoff, many multinational companies have sold their Russian assets. The news was similar to what Nissan said earlier this week, when it said it would sell some of its assets to the Russian government.

But some Western food companies, like Lactalis, have chosen to stay there because they provide staples.

Lactalis is a private company with four factories in Russia that process local milk. About 1,900 people work for Lactalis. Last year, the country made up about 1% of its 22 billion euros ($21.39 billion) in sales around the world.

The group has stopped making industrial investments and advertising in Russia and has separated its local business from the rest of its operations, a spokesperson said. The spokesperson also said that the group did not have any contracts with the Russian government.

Lactalis has also stayed in Ukraine, where it has three production sites and employs about 850 people.

The factories are on land that is controlled by the Ukrainians. They are close to the front lines in the east and south of the country.

Before the war, Lactalis’ business in Ukraine brought in about as much money as its business in Russia, the group said.

Safeguarding the wellbeing of animals in the dairy industry, both big and small

People often say that the structural change toward larger dairy farms is bad for animal welfare. So, researchers looked at information from 3,085 German dairy farms with a total of 376,415 cows.

The German Federal Ministry of Food and Agriculture and the Thunen Institute of Farm Economics in Braunschweig helped pay for the 3-year project.
The number of dairy cows on each farm is going up.

In Germany, the average number of dairy cows on a farm went from 31 in 1999 to 70 in 2021, which is a rise of more than 100% in 20 years. One out of every five farms had more than 100 dairy cows last year.

The research sample was like the different kinds of dairy farms in Germany, which is the fourth-largest milk producer in the world. It ranged from 7 cows to 2,900 cows, with 122 being the average.

Most of the farms in the sample were conventional (98% vs. 2% organic), 97% were full-time farms, and 93% focused on making milk. The farm was 141 ha on average, and 73% of that was grassland. The average milk production per dairy cow per year was 8,810 kg, and 55% of the farms in the sample let cows graze.
Animal welfare index

Working with scientists who study farm animal welfare, farmers, and dairy representatives, the researchers made an animal welfare index that looked at housing, feeding, health, behaviour, hunger and thirst, pain and discomfort, injury, or illness. The animal welfare index also looked at how free the animals were to move around, how much access they had to outside weather stimuli, the type of cage and floor, resting areas, and drinking troughs. The animal welfare index was made as part of a bigger project about how to make dairy farming more sustainable.

The report talked about the difference between loose housing and tie stalls. On average, farms without stalls did a better job of taking care of their animals than farms with stalls. But the fact that animal welfare index values were all over the place showed that high and low animal welfare index values can be reached no matter what system is used to care for the animals. This is because some indicators, like the number of places each cow can rest, don’t depend on the dairy barn system and can stand in for other things.

Differences in the animal welfare index were found to be bigger within regions than between regions. There were also differences between herds of the same size, even though they were in the same region.
Results

The results showed that larger farms tended to have a higher animal welfare index than smaller farms, but the difference was very small. But, contrary to what most people think, larger dairy herds were not always linked to less care for the animals.

The study found that the animal welfare index varied a lot between herds of all sizes. This means that small, medium-sized, and large dairy farms all have room to improve animal welfare.

“Our results add to the evidence that the size of the herd has little or no effect on the level of animal welfare on a farm. So, when animal welfare is talked about in public and in politics, the focus should be on putting animal welfare measures in place on farms and less on herd size or restrictions on herd size that are forced by the government.

A class action lawsuit involving 300 New Zealand farmers has been filed at the Supreme Court.

This week, that mediation is set for Thursday. If that doesn’t work, a one-month trial is set to start on November 15.

David Burstyner, a lawyer for the farmers, was asked for his opinion.

What’s most important to you? Before the state election, have your say.

His firm, Adley Burstyner, said on its website that the action was meant to get money for dairy farmers who supplied Fonterra in May and June 2016.

The class action is trying to get a judge to say that Fonterra’s step-down was illegal, including that it was misleading, deceptive, and unfair.

On June 17, 2020, the case was brought to the Supreme Court of Victoria.

The company said that court hearings have happened in 2020, as well as last year and this year.

“Orders were made for Fonterra to find documents on April 21, 2021. The date for mediation with Fonterra is October 13, and the trial is set to start on November 15,” the website said.

Fonterra has filed detailed witness statements from Matthew Watt, Judith Swales, Michael Cronin, and Mark Conway. The court ordered Fonterra to turn over 55,000 documents, such as New Zealand board minutes and internal communications about prices.

“The plaintiffs have turned in their witness statements and five expert reports from a world-class milk price expert, a forensic accountant, an expert industry consultant, an industry expert and leader, and a psychologist.”

Late in June of this year, The Standard said that farmers were worried that Fonterra was coming up with a new defence to weaken compensation claims from Australian suppliers who lost money because of the milk processor’s 2016 price clawback.

At a hearing on June 15, Fonterra asked for permission to change its defence to include a 40-cent payment made to farmers in 2017-18. It said that the payment should be counted as part of the controversial 2016 farmgate price clawback.

The class action claims that Fonterra broke its contract with a retroactive step down in May 2016 when it cut the expected milk payments.

Farmers had to pay back a big chunk of their income. In the same year, the NZ giant made $834 million in profit.

The clawback caused a serious cash flow problem and led to a class action lawsuit, which is backed by 300 farmers who say Fonterra misled and tricked them, acted unfairly, and broke contracts with dairy farmers.

Former suppliers said that the defence was “absolute rubbish” and that it was an attempt to lower the financial compensation claim for lost income in the past, which Mr. Burstyner said was expected to be “hundreds of millions of dollars.”

He said that the 40c payment wasn’t given to all farmers who lost money because of the step down because Fonterra wouldn’t give it to farmers who switched to other processors.

Mr. Burstyner said, “It seemed like a very spiteful thing to do.”

At the time, Matthew Watt, who was in charge of Fonterra Australia’s farm source, said, “This payment is for the 17-18 season, not the 15-16 season.”

Mr. Watt wrote on the dairy insider blog, “Even though the law doesn’t require it, we’re giving our suppliers an extra 40 cents because it’s the right thing to do.”

All Fonterra farmers who lost money because of the price drop in 2015–16 will be able to get this extra payment, whether they are still farming or are retired or coming back,” he wrote.

“We’re trying to get in touch with all the farmers who left us.”

The payment came at the same time as Murray Goulburn’s decision to forgive almost $150 million in debts owed by farmers. This was done after the Australian Competition and Consumer Commission sued the cooperative over the milk price mess in 2015-16.

A year ago, the managing director of Fonterra, René Dedoncker, said that the future of dairy in the south-west was safe and that the Cobden factory would be there “for the long run.”

About three years ago, Fonterra closed its plant in Dennington, which put 100 people out of work.

Fonterra said last month that it would no longer sell its Australian operations.

Fonterra was contacted for comment.

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