More Melamine

http://news.xinhuanet.com/english2010/china/2010-07/13/c_13398205.htm

Here we go again. Yes, we do continue to import caseins from China,
324,076 pounds Jan through May 2010.

New Zealand sees this as an opportunity to export more product to China.

Here is the story:

Official pledges stricter actions against melamine-tainted milk products
English.news.cn 2010-07-13 20:03:15

BEIJING, July 13 (Xinhua) -- Health authorities must step up efforts to trace hidden melamine-tainted milk products that should have been destroyed, in the wake of large batches of contaminated products turning up this month in two provinces, a Health Ministry official said Tuesday.

"From the problematic milk powder found in Qinghai, we can see that we need to do more in this work," Chen Rui, a vice director with the Ministry of Health's food safety department, told a press conference.

Food safety incidents must be thoroughly investigated and the perpetrators must be severely punished, he said.

Melamine added to milk products can make the protein content seem higher. In the melamine scandal of 2008, the industrial chemical caused the deaths of six babies and sickened 300,000 others who had been fed with baby formula made from tainted milk.

China's government has repeatedly ordered all tainted products to be destroyed, but reports of tainted items have continued to emerge.

In the latest discovery, Chinese police authorities found 64 tons of raw materials for making milk powder and 12 tons of processed powder tainted with melamine at a factory in the far-western province of Qinghai.

Some packages of milk formula also tested positive for excessive melamine content in northeast China's Jilin Province. The tainted products were among 900 kg of milk formula that were found to be produced by a plant with suspected falsified production licenses.

Chen said about 25,000 tons of melamine-tainted dairy products had been destroyed since 2008.

He said authorities were still investigating the Qinghai case, and promised to publish progress in the investigation in a timely manner.

Pete

Pete's surgery went well today and he should be home tomorrow afternoon.

Note:

I should have mentioned I was talking about Pete Hardin publisher of The Milkweed.

Supply Management

I can see that there are arguments on either side of supply management. However, what I find very interesting is the big processors and their spokespeople are scared-to-death of the idea.

Obviously, there is an advantage to some to claim there is an over supply of milk. Those in the industry set up an independent, audited, open, transparent supply management, if they don't like the government involvement.

Here is IDFA's position:


http://www.cheesemarketnews.com/guestcolumn/2010/25jun10.html

Guest Columnist
Perspective:
Industry Issues

Opportunity counts

Connie Tipton

Connie Tipton is president and CEO of the International Dairy Foods Association. She contributes this column exclusively for Cheese Market News®.

“In the middle of difficulty lies opportunity.” — Albert Einstein

Obstacles challenge us on our path through life, but opportunity keeps us going. Our freedoms and opportunities in this country are immense and unique. Yet this is so fundamental for most Americans that we forget how important it is.

In the U.S. dairy industry there have been many challenges, but we can see growing opportunities as our economy and economies around the globe rebound. Credible research done by top-notch organizations outside the dairy industry shows the U.S. dairy industry is unique in its ability to capture growing new markets and to be the dairy production platform for people around the world.

Frankly, if you had told me 10 years ago that we would have commercial exports of 10 percent or more of our milk supply without subsidies, I wouldn’t have believed it. But as the world has changed, we have found more and more world market opportunities for U.S. milk. This is indeed an exciting opportunity for U.S. dairy and an opportunity we can’t afford to squander.

This is why I feel so strongly that our policies must be designed to best position us for a future that will unleash this opportunity for the entire U.S. dairy industry, so that we can create jobs and play our part getting our nation out from under our current economic problems.

The health of the U.S. dairy industry depends on the financial viability of our milk producers and processors. A margin insurance program, coupled with new risk management tools to better manage price swings, will go a long way to allow the U.S. dairy industry to remain competitive, both with dairy ingredients in the domestic market and the growing world dairy trade. But if those policies include supply management, we will surely lose the opportunity that is so close at hand.

Supply management is being touted as a way for farmers to control their own destiny, but nothing could be further from the truth. Control is turned over to the bureaucrats in Washington who will decide how much supply is enough and what penalty must be exacted on those who don’t comply with the government decision. Forget freedom to produce and grow as you think is best for your farm. And forget the prosperity that is nearly in the palm of our hands with growing market opportunities.

Bluntly put, I believe supply management will destroy our dairy industry’s opportunity for the future.

I have personally witnessed the move by Canadian dairy manufacturing companies into the U.S. market because we have a growing milk supply and they are stymied on growth in Canada by their decades-old supply management system. If we go the same route as Canada, we will witness not only Canadian companies leaving the United States for a better milk market, but probably some of our own U.S. companies looking elsewhere for their expansion. That’s a recipe that dooms our future as a growing industry.

Supply management will stop U.S. dairy exports at a time when emerging markets are crying out for more dairy products. It will make our dairy industry less competitive and will result in food manufacturers finding ways to reformulate and replace dairy ingredients with lower cost options. Our products and ingredients will be passed by for alternatives where they exist. In some cases we’ll have to rely on more imports and products manufactured elsewhere instead of here in the United States.

Supply management will not impact everyone the same. Many states like Washington, Minnesota and Wisconsin have been growing much faster than average, and they will be forced to slow down. Supply management policies will pit producers against producers and states against states. This is NOT the direction to take.

These will be real consequences of supply management and we must not let this be the future for the U.S. dairy industry.

As Harry Truman reminded us, progress occurs when courageous, skillful leaders seize the opportunity to change things for the better. We are forming a coalition to fight for freedom of choice for dairy farmers and for opportunity and growth for the U.S. dairy industry. I invite you to join us.

CMN

The views expressed by CMN’s guest columnists are their own opinions and do not necessarily reflect those of Cheese Market News®.

World Dairy Farm Milk Prices

According to an organization in the Netherlands, the original EU countries rolling average for the last 12 months 27.65 Euro/100Kg., Fonterra average payout 24.18 Euro/100Kg and, are you ready, the USA averaged 22.61 Euro/100Kg.

A kilogram is equal to 2.2046 pounds.

Now we are always hearing about trade barriers but, what about payment barriers? An argument can be made that costs of production are higher in Europe, and there is no real indication that European farmers are getting rich but, our price compared with New Zealand?

History Part II

I can hire one half of the working class to kill the other half.
Jay Gould
US financier & railroad businessman (1836 - 1892)

Jay Gould could have been talking about dairy farmers but, it isn't the farmers that are the problem. The problem is the leadership, which includes land-grant experts.

A paper on the 196 Farm Bill written by Ed Jesse is available at: http://future.aae.wisc.edu/publications/mpb55.pdf

Jesse says in the paper:

"Upper Midwest objections to the Compact are grounded in its effect on the supply of milk for manufacturing purposes and the resulting effect on prices for manufactured dairy products."

"The Compact sets fluid milk prices higher than federal order minimums. This decreases fluid milk consumption and, through an increase in the blend price to producers, increases milk production. Larger production and reduced fluid consumption add to the supply of manufacturing milk, lowering manufacturing milk prices both inside and outside the Compact area."

As can be seen in the graph in the previous post, Jesse's argument is pure fiction.

Now, move ahead to the present.

See: http://www.agriview.com/articles/2010/07/08/dairy_news/dairy03.txt


The article is about supply management, which IDFA opposes as they did the Compact.

Here is Jesse:

Jesse said there are differences of opinion based largely on which region of the U.S. a producer lives and farms in. For example, Jesse said California is pushing supply control “hard” because “they’ve lost their competitiveness because of higher feed prices. They want to ensure that they can keep their market share by forcing others to cut back...”

Evidence of that “hard” push for mandatory supply controls is seen in the names of the authors and co-authors of the two versions of the Dairy Price Stabilization Act of 2010. Representative Jim Costa, a Democrat from California, has signed on.

The bills also have backing from senators and representatives from Northeast states, which, Jesse said, are also at a competitive disadvantage to Wisconsin and other Upper Midwest states when it comes to producing milk somewhat inexpensively. Senator Bernie Sanders, an Independent from Vermont, is the lead author of the Senate bill, while Senator Patrick Leahy, a Vermont Democrat, has also added his name to the legislation. Meanwhile, the House bill bears the names of Peter Welch, a Democrat from Vermont, along with the names of John Larson and Joe Courtney, a pair of Democrats, both from Connecticut.

“They’re fairly strongly in favor of this,” said Jesse, of the Northeast. “I think they see it as a way of n just like California n ensuring that they can continue to produce milk and support local communities. That’s not a bad objective, but at the same time, I think you have to consider where milk can be produced the most efficiently, and consider the movement of milk as opposed to the local supply...”

Jessie worries that a supply control program might hurt the growth in dairying that Wisconsin has enjoyed the last few years. And he said that Canada’s example shows that there is “no clear evidence” that a milk quota system helps retain dairy farm numbers.

"It's déjà vu all over again" as Yogi Berra used to say.

Basically, any plan which stand a real chance of putting more money in the farmer's pocket will be opposed by land-grant experts - who are on the public dole.

History

(click on image to enlarge)

There's an old expression about "diggin up bones." But, there is also the long understood truth about those who will not learn from history. So, let's look back at the very heated debate about the Northeast Dairy Compact. The Compact ran from 1998 to September of 2001.

The Compact's basic idea was to take some power from the big guys and put more money in the pockets of Northeast dairy farmers.

There are so many bills and issues in Washington, DC that no politician can grasp the details of every issue. Rather than wasting time trying to figure everything out, politicians will look to politicians who have a leadership position on certain issues. Most politicians assume the politicians in the upper Midwest will look out for dairy and understand the issues.

If you are a lobbyist, you can use this simple fact to your advantage.

IDFA hired M&R Strategic Services to defeat the Northeast Dairy Compact. M&R utilized focus groups to find "push button" issues. The two they came up with was "milk tax on the poor" and "unfair to upper Midwest dairy farmers."

Then IDFA paid for a bogus "study" by Ken Bailey which could "prove" the Compact would harm the upper Midwest. NE dairy farmers were going to overproduce and drive milk prices down for the upper Midwest. The upper Midwest fell for it.

Now, lets look back. Was there any basis for the claim the upper Midwest would suffer? As can be seen in the above graph, the "model" used to defeat the Compact was a lie.

There is a very important lesson to be learned about how DC works on dairy issues from the Compact.

Letter to National Milk

(click on images to enlarge)

There is a genuine need for an organization which represents the interest of dairy farmers. That organization in not NMPF.

Here is a link to NMPF "associate members": http://www.nmpf.org/about-nmpf/associate-members

Gary Genske raises some important points.