A hearing is scheduled to consider California’s temporary Class 4b milk price whey factor, which expires this summer. Northeast dairy cooperative Agri-Mark will invest nearly $30 million to expand a New York cheese manufacturing facility. This and other U.S. dairy industry news can be found here.

Natzke dave
Editor / Progressive Dairy

This week’s report includes the following topics:

CDFA schedules Class 4b whey factor hearing

Agri-Mark to expand New York cheese plant

Michigan Milk returns $1.6 million in cash patronage refunds


Land O’Lakes Inc. reports record earnings

AMPI annual meeting is March 21-22

CDFA schedules Class 4b whey factor hearing

California’s Class 4b minimum milk pricing formula “dry whey scale” is back for discussion. The California Department of Food & Agriculture (CDFA) scheduled a public hearing for April 11, in the CDFA Auditorium, Sacramento, Calif.

Under California’s state milk marketing order, Class 4b milk is the same as Class III milk under Federal Milk Marketing Orders (FMMO), utilized primarily in the manufacturing of cheese and whey products.

While the use is similar, pricing formulas under the state and federal orders aren’t, resulting in lower Class 4b milk prices paid to California producers than the comparable Class III milk prices paid in federal orders. It has been a divisive issue between the state’s producers and processors for years, and has even prompted an effort to create a California order within the FMMO system.

Last July, CDFA Secretary Karen Ross ordered a temporary adjustment to the dry whey scale, a modification designed to bring the Class 4b/Class III milk price in closer relationship. Ross ordered the adjustment on all milk marketed between Aug. 1, 2015 and July 31, 2016.

However, with slumping dairy prices, including dry whey, producers saw little actual impact on their prices.

With the adjustment set to expire on July 31, CDFA is accepting alternative proposals until March 28. The hearing notice, information about submitting comments, and alternative proposals can be found at CDFA’s Dairy Matrix.

Agri-Mark to expand New York cheese plant

Northeast dairy cooperative Agri-Mark Inc. will invest nearly $30 million to expand its cheese manufacturing facility in Chateaugay, N.Y.

The project includes restoration, modernization and expansion of Agri-Mark’s current 110,641 square-foot manufacturing facility. Engineering and permit application processes are underway, with a completion date anticipated in 2019. Emphasis is on modernization and efficiency, with only a slight increase in milk processing capacity, according to Doug DiMento, director of corporate communications.

New York’s economic development agency, Empire State Development will provide up to $6 million for the project, including $4 million in Economic Transformation Program funds.

Agri-Mark purchased the Chateaugay cheese manufacturing facility in 2003 after its former owner closed the plant. Since then, Agri-Mark has invested millions of dollars to expand production of its McCadam and Cabot cheese brands.

The co-op markets farm milk produced by 1,100 dairy farms in six states.

Read more about the Agri-Mark here.

Michigan Milk returns $1.6 million in cash patronage refunds

Michigan Milk Producers Association (MMPA) recently paid $1.6 million in cash patronage refunds to its dairy farmer members. This cash allocation represents 25 percent of the $6 million net earnings generated by the cooperative in fiscal year 2015.

Member cash payments in the last 10 months have now totaled more $5.2 million. MMPA members previously received $3.6 million in April 2015 through retirement of the cooperative’s 2006 equities.

Cash patronage funds and equity allocations are based on the amount of milk each individual member farm marketed, and on the supplies purchased through the cooperative.

MMPA is a dairy cooperative serving approximately 2,000 dairy farmers in Michigan, Indiana, Ohio and Wisconsin. Its 100th annual meeting is March 24.

Land O’Lakes Inc. reports record earnings

Farmer-owned cooperative Land O’Lakes Inc. reported record net earnings for 2015, but the dairy side of the business was a little more challenging.

Land O’Lakes announced net earnings of $308 million for 2015, up from $266 million in 2014.

The Dairy Foods division reported 2015 net sales of $4 billion in 2015, down from 2014. Pretax earnings for Dairy Foods totaled $83.1 million in 2015, up from $39.7 million in 2014.

Dairy Foods earnings reflect a one-time gain on the sale of Land O’Lakes’ 35 percent interest in Advanced Food Products LLC.

The business saw growth in butter, branded cheese, foodservice and refrigerated desserts, and successfully managed the downside in milk powder and overall commodity markets, according to Chris Policinski, president and CEO.

AMPI annual meeting is March 21-22

Growing Midwest milk production and rising foodservice sector sales are among the performance highlights to be shared at the annual meeting of Associated Milk Producers Inc. (AMPI). The two-day annual delegate meeting is March 21-22, in Bloomington, Minn.

The opening-day program will feature Vita Plus dairy development manager Gary Sipiorski, providing analysis of dairy margins. Entrepreneur and inventor of the Lay’s Oven Baked Potato Crisps, Jeff Stamp will then deliver a motivational message about farm lessons that aren’t taught at a university.

The annual member business meeting convenes March 22, featuring board chairman Steve Schlangen, a dairy farmer from Albany, Minn. AMPI co-presidents and CEOs Donn DeVelder and Sheryl Meshke will discuss the cooperative’s strategic plan. AMPI Young Cooperators will also meet.

Headquartered in New Ulm, Minn., AMPI is owned by 2,200 dairy farm families in Wisconsin, Minnesota, Iowa, Nebraska, South Dakota and North Dakota. Members annually market about 5.9 billion pounds of milk, resulting in $1.7 billion in sales.

The co-op owns 10 Midwest-based manufacturing plants.

Learn more by AMPI here. PD

Dave Natzke