Digest Highlights: Proposed legislation would refund unused MPP-Dairy premiums. CDFA denies milk price hike hearing. Global dairy product prices get a boost. Find a summary of this and other news here.
Cargill, Cainthus partnering to bring cow facial recognition technology to dairy
Livestock feed and data services company Cargill and Cainthus, a machine vision company, are partnering to bring cow facial recognition technology to managers of dairy herds.
The strategic partnership includes a minority equity investment from Cargill. Terms were not disclosed.
The Cainthus predictive imaging software uses images to identify individual animals based on hide patterns and facial recognition, and tracks key data such as feed and water intake, heat detection and behavior patterns. The software then delivers analytics to assist on-farm production, reproduction and herd health management decisions.
Cargill and Cainthus will focus on dairy installations before expanding to other species. Targeted trials were conducted in the U.S. and Europe, and it is now commercially available there. The technology will also be introduced in China.
A January 2017 article by Progressive Dairyman Editor Walt Cooley (Computer vision technology tested on California dairy) described a commercial test run of the Cainthus system at Maddox Dairy in Riverdale, California.
CDFA denies milk price hike hearing request
Citing the potential for California’s entry into the Federal Milk Marketing Order (FMMO) system, the California Department of Food and Agriculture (CDFA) denied a request for a public hearing to consider increases in minimum milk prices paid to dairy farmers.
The California Dairy Campaign (CDC) and Western United Dairymen (WUD) had petitioned CDFA, seeking the hearing. The Jan. 18 request sought price increases for the 12-month period of April 1, 2018, through March 31, 2019. Specifically, the organizations proposed a 60-cent-per-hundredweight (cwt) increase on Class 1, 2 and 3 milk; a 10-cent-per-cwt increase on Class 4a price; and a 40-cent-per-cwt increase on Class 4b. (Read California dairy groups request emergency hearing for milk price increases.)
Sentiment for and against the hearing was divided along producer and processor lines. About 30 dairy farmers submitted letters or emails in support of the hearing, citing low milk prices for dire financial conditions. About 10 processors urged CDFA to deny the hearing request, citing low manufacturing cost allowances and tight margins. All correspondence can be viewed on the CDFA’s hearing matrix website.
In a letter denying the request, Jeff Cesca, CDFA marketing services director, said the agency was acutely aware of the impact low milk prices had on dairy farm families. However, he said, dairy product manufacturers were under similar financial stress.
Gillibrand proposal refunds unused MPP-Dairy premiums
U.S. Sen. Kirsten Gillibrand (D-New York) announced new legislation, the Dairy Premium Refund Act, calling for unused Margin Protection Program for Dairy (MPP-Dairy) insurance premiums to be refunded to dairy farmers.
“I’ve heard from dairy farmers all over New York that the current dairy insurance program is not working,” Gillibrand said. “Right now, our dairy farmers are in the midst of a serious financial slump through no fault of their own. Milk prices are now much lower than the cost it takes for farmers to produce that milk, and farmers are struggling to pay their workers and their bills. The Dairy Margin Protection Program was supposed to help our dairy farmers in situations like this, but even though farmers have paid millions of dollars into the program, they’ve barely been paid out a dime.”
Under Gillibrand’s legislation, dairy farmers would receive an MPP-Dairy refund on any premium payments not used to play claims during the previous year. Currently, those funds go into the U.S. Department of Treasury. This bill, amending the 2014 Farm Bill, proposes no new spending, would provide payments retroactively since the MPP-Dairy was implemented and would apply to all future program years.
Environmental updates: WOTUS delayed two years; air emission reporting pushed back again
Implementation of two federal environmental regulations affecting dairy farmers have been delayed.
• Scott Pruitt, administrator of the U.S. Environmental Protection Agency (EPA), announced the Waters of the U.S. (WOTUS) rule will be delayed until 2020. During the two-year period, EPA will seek to draft a revised version of the rule, which has been the subject of numerous lawsuits since its inception in 2015.
• The U.S. Court of Appeals for the District of Columbia granted the EPA another stay, until May 1, to implement a rule requiring “hazardous substance” air emission reporting by livestock operations. In late January, the EPA had requested a 90-day delay for the rule, which requires farmers to file “continuous release” reports covering ammonia and hydrogen sulfide under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). Reportable quantities for those substances – emitted during decomposition of manure – were set at 100 pounds per day. However, confusion still remains about the proper way to measure emissions and about how exactly reporting will logistically be handled. The latest delay follows a 60-day extension granted in November, which expired Jan. 22. As of now, no reporting is necessary until the stay is lifted. (Read: Livestock producers, EPA gain reprieve on emission reporting.)
FMMO Class III and IV, California 4a, 4b prices start 2018 lower
Minimum prices for milk used in cheese, butter, nonfat dry milk and whey production are starting the year weaker and looking a lot like 2016.
The FMMO January Class III price is $14 cwt, down $1.44 from December 2017 and $2.77 less than January 2017. It’s the lowest since June 2016.
The comparable California January 4b price is $13.37 per cwt, down 15 cents from December, $2.62 less than January 2017 and also the lowest since June 2016.
The January FMMO Class IV price is $13.13 per cwt, down 38 cents from December and $3.06 less than January a year ago. It’s the lowest since May 2016.
California’s comparable January Class 4a price is $12.93 per cwt, down 43 cents from December, $2.74 less than January 2017 and the lowest since June 2016.
Global Dairy Trade index higher again
While U.S. dairy price news has been mostly negative, the latest Global Dairy Trade (GDT) auction provided some good news. The price index for the Feb 6 auction was up 5.9 percent, on top of a 4.9 percent increase on Jan. 16.
Among major products, auction prices were higher for butter [up 7.9 percent, to $5,277 per metric ton (MT)], skim milk powder [up 7.2 percent, to $1,932 per MT] and whole milk powder [up 7.6 percent, to $3,226 per MT]. Cheddar cheese was up 7.2 percent, to $3,739 per metric ton.
The next GDT auction is Feb. 20.
Margins end January weaker
After starting the month mixed, dairy income margins weakened over the last half of January, according to Commodity & Ingredient Hedging LLC. Slightly lower milk prices and higher projected feed costs pushed expected margins below breakeven for the first two quarters of 2018. Based on current futures prices, expected margins are above breakeven for the second half of the year, but remain below average.
One item impacting the outlook was a European Union (EU) move regarding intervention stocks of skim milk powder, expected to put more milk powder on the global market and keep prices depressed. According to Calvin Covington, the EU’s current skim milk powder inventory is about 800 million pounds, equal to one-third of U.S. nonfat dry milk production for an entire year.
H-1B visa application deadline is April 2
Although not extensively used by dairy farmers, the annual five-day “H-1B” visa application period opens April 2, according to Dorsey & Whitney LLP, a law firm specializing in business law.
The H-1B program permits 65,000 visas for foreign workers per year. To apply, an individual must have a U.S. job offer in a professional-level position that requires at least a bachelor’s degree in a relevant field, and the individual must also have such educational credentials. An additional 20,000 visas are set aside for individuals with master’s degrees or higher.
Last year, about 200,000 people applied for the 85,000 H-1B visas. Selection of qualified applicants is conducted through a lottery.
Administered by the U.S. Department of Labor, H-1B application preparation can take four to six weeks. The current Trump administration stance on immigration is expected to add to applicant evidence requirements.
Meanwhile, Congress continues to wrestle with immigration reforms and border security, dealing with everything from funding border walls to addressing Deferred Action for Childhood Arrivals (DACA). H.R. 4760 (the Securing America’s Future Act), introduced by U.S. Rep. Bob Goodlatte (R-Virginia), would create a separate H-2C visas for agricultural businesses requiring year-round workers.
AEM, EDA announce ‘right to repair’ principles
The Association of Equipment Manufacturers (AEM) and the Equipment Dealers Association (EDA) have pledged to provide farmers and others with tractor and combine service and repair information tools.
The information will cover equipment put into service by model year 2021. It is designed to allow farmers to perform basic service, maintenance and repairs, and determine whether complex repairs require the assistance of their dealer.
According to the organizations’ “statement of principles,” the information will include: operator parts and service manuals, product guides, product service demonstrations, training, seminars or clinics, on-board diagnostic access, electronic field diagnostic tools and other service, parts, operation and safety publications.
The campaign is intended to convince lawmakers that “right to repair” legislation, introduced in a handful of states, is unnecessary. Manufacturers of high-tech equipment, including farm machinery, have opposed the state laws, charging the proposals undermine the manufacturers’ investment in software development and jeopardize machinery’s compliance with environmental and safety regulations.
AEM, headquartered in Milwaukee, Wisconsin, and EDA, St. Louis, Missouri, jointly launched a website with additional information.
MMPA members take home National Dairy Quality Awards
Michigan Milk Producers Association (MMPA) members took home more than one third (17 of 46) of the National Milk Quality Awards presented during the National Mastitis Council annual meeting, held Jan. 30-Feb. 2 in Tucson, Arizona.
Award applications were evaluated for measures of quality, systems of monitoring udder health, milking routine, protocols for detection and treatment of clinical and subclinical cases of mastitis, and strategies for overall herd health and welfare.
MMPA is a member-owned and controlled milk-marketing cooperative serving approximately 1,700 dairy farmers in Michigan, Indiana, Wisconsin and Ohio. It offers a portfolio of services to help members produce high-quality milk and paid $17.7 million to members in quality premiums in 2017.
Pennsylvania creating ‘ice cream trails’
Pennsylvania’s Center for Dairy Excellence (CDE) is seeking dairy farms with a retail sales operation that includes ice cream to be featured as part of a series of “ice cream trails” in the state.
CDE, along with PA Preferred, the Pennsylvania Tourism Office and visitPA.com, are working to create the Pennsylvania-Preferred Ice Cream Trails to increase awareness and generate business for farms with onsite creameries.
Each trail will feature an incentive-based passport program linking six to eight creameries in a geographic region. Creamery customers would be encouraged to travel the trail and collect stamps on their passports and in turn, increase business across the entire ice cream trail.
Each farm-based creamery selected for the program would receive a resources kit, including passports, stamps and signage. Those interested in the program should contact Myrannda Kleckner, CDE communications and marketing manager, by email or phone (717) 346-0849.
Arla growing its global dairy investment
The anti-dairy’s communication machine generating almost daily press releases and blog posts reporting the demise of dairy consumption isn’t paying attention.
On Jan. 31, Denmark-based Arla Foods announced it would invest $655.9 million ($ U.S.) around the world in 2018 to help meet the global demand for dairy products. That comes on top of an investment of about $335 million last year.
Cooperatively owned by more than 11,000 dairy farmers in Europe, Arla, which operates businesses in 120 countries and is the fifth largest dairy company in the world (based on milk intake), will split the total investment evenly between inside and outside of Europe. Arla cited investments in milk powder and ultrapasteurized (UHT) milk, targeting growing markets in the Middle East, North Africa, China, Southeast Asia and sub-Saharan Africa.
Among U.S. holdings, Arla owns a specialty cheese plant in Hollandtown, Wisconsin. It is the largest producer of havarti cheese in the U.S.
USDA launches MARS market data platform
The USDA’s Agricultural Marketing Service (AMS) launched a new electronic data platform to deliver market price information. The web-based platform, Market Analysis and Reporting Services (MARS), is designed to improve the transparency, speed and accuracy of agricultural commodity market news.
It includes a searchable database with the ability to create custom reports, data sets and data visualizations. Businesses may also utilize the built-in application program interface (API) to use the data to create new uses for the data as customer needs evolve. All AMS market news will be moved to the new system by March 2019.
Funding sought for Idaho dairy research center
The University of Idaho is targeting late June to secure funding for a new dairy research facility.
Officials say the proposed Center for Agriculture, Food and the Environment (CAFÉ) would be the largest research dairy in the U.S. It would include a 2,000-cow dairy and 1,000 acres of cropland. The facility is planned for Idaho’s Magic Valley, although a location has not yet been chosen. It would also include a food-processing pilot plant on the College of Southern Idaho campus.
In addition to dairy production, research will address environmental issues, nutrient management, economic development and sustainability. In addition to research, the facility will have a strong education and outreach component.
The state Legislature has appropriated $10 million for the project, and the university is hoping for another $5 million in state funding. The university is selling some of its assets to supply another $15 million. The remaining $15 million needs to come from the dairy industry and other outside sources. 
PHOTO: Cargill and Cainthus are partnering to bring cow facial recognition technology to managers of dairy herds. The predictive imaging software uses images to identify individual animals based on hide patterns and facial recognition, and tracks key data such as feed and water intake, heat detection and behavior patterns. Courtesy photo.
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