Market Reports with Annie 2

Enrollment for 2016 Dairy Mar-gin Protection Program begins this month

WUD says goodbye and good luck to Kathi Thomas

Third annual Strip-Till Dairy

3

Hay Report 4

Final batching deadline next week for funding through USDA-NRCS EQIP

Field Representative Corner— with John Labandeira, Districts 8, 9, 11 & 12

4

Inside this issue:

FDA extends deadline for calorie counts on menus

The Food and Drug Administration (FDA) has delayed by one year the deadline for the nation’s chain

restaurants, pizza parlors and movie theaters to post calorie counts on their menus. Consumer advocates say the

decision is a setback for public health but others contended would simply give companies enough time to comply.

Pressure had been growing to delay the rule, which was proposed in November and would have taken effect at the

end of this year. Food companies — in particular, the pizza industry — had campaigned against it, saying it was

onerous and in many cases served no purpose, as most Americans order pizza over the phone and not in a restau-

rant, where they would see a menu. A measure in the House sought to delay compliance by a year. On Thursday, the

agency announced it would give companies more time to comply.

Menu labeling became law in 2010 as part of the Affordable Care Act, and the FDA issued a proposal for how it

should be carried out the next year. But the final rule was delayed for three years. When the agency finally an-

nounced the rule last year, it was stronger and more sweeping than consumer advocates were expecting, covering

food in vending machines and amusement parks, as well as certain prepared foods in supermarkets. The rule ap-

plied to food establishments with 20 or more outlets, from fast-food chains like KFC and Subway to sit-down restau-

rants like Applebee’s and The Cheesecake Factory.

Supreme Court upholds Arizona’s Congressional Map

The Supreme Court upheld Arizona’s congressional map last week, declaring in a 5-4 ruling the use of an independ-

ent redistricting commission that drew House district lines in the 2012 cycle did not violate the Constitution. If the

court had thrown out the state’s map, it could have sent the 2016 elections into chaos in Arizona and it could have

had implications for California’s map, drawn by a similar independent commission. The decision would have favored

Democrats in California, who hold a near supermajority in the legislature.

The case, Arizona State Legislature v. Arizona Independent Redistricting Commission, centered around a 2000 bal-

lot initiative passed in Arizona that removed the power of redistricting from the state Legislature and placed that

role in the hands of an independent commission.

Sacramento River flow restricted in effort to preserve fish

California regulators have given final approval to a controversial drought plan to restrict the flow of water pouring

out of Lake Shasta this summer in a bid to preserve an endangered fish species. The plan will effectively deprive

downstream farmers of an estimated 200,000 to 250,000 acre-feet of water during the crucial months of the growing

season. Officials began curbing the volume of water coming out of Shasta in late May, and the plan became official

late Tuesday.

Keeping more water in Shasta through September is a key element of a plan aimed at cooling down the Sacramento

River through the spawning season of winter-run Chinook salmon. Regulators want to prevent a recurrence of last

year, when the river got too warm and 95 percent of the juvenile salmon were wiped out. Farmers and elected offi-

cials have pleaded with the water board to allow more water to be released from Shasta, saying the curb on flows

would devastate the agricultural economy.

Paul Martin to be inducted into the

Sonoma County Farm Bureau Hall of Fame

WUD’s very own Paul Martin will be honored next Thursday

for his lifetime of service to the agriculture industry as he’s

inducted in the Sonoma County Farm Bureau Hall of Fame.

Members of Western United Dairymen have been blessed to

call Martin a friend and advocate for dairy producers. He

also graciously took the reins of the organization for the past

six months as interim CEO.

Congratulations Paul on a well-deserved honor!

(Photo courtesy of the Argus Courier)

July 10, 2015

W E E K L Y U P D A T E

W e e k l y U p d a t e d e l i v e r y o p t i o n s

Send change of address or request for Update delivery to Western United Dairymen by phone or fax, or email to info@westernuniteddairymen.com.

C o n t a c t U s @

1315 K Street, Modesto, CA 95354 Telephone: 209.527.6453 Fax: 209.527.0630 www.westernuniteddairymen.com info@westernuniteddairymen.com

M i s s i n g S o m e t h i n g ? S u b s c r i b e

t o W U D H e a d l i n e N e w s

Industry leaders turn to Western United Dairymen’s daily e-newsletter to keep up on the latest developments. California Dairy In-dustry Headline News is a reliable source for the latest news on pric-ing, industry events and meetings, state and federal legislation, and environmental regulations. Want to sign up to receive WUD Headline News? Please email basconsult-ing@outlook.com

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*Actual announced prices are in BOLD, estimates are in Italics

Commod ity M ar kets : CME – Ca l i forn ia P la nts

E s t i m a t e d * P r o d u c e r C W T . P r i c e s

PAGE 2

What’s up and what’s not—your weekly market update

By Annie AcMoody, MS, Director of Economic Analysis

CME prices have been bouncing like tennis balls at Wimbledon

lately. Block cheese’s efforts were blocked during the holiday week

(-2 cents), but advantage moved to its court this week as sellers scored a

price 2.25 cents higher on Tuesday. Another great round Wednesday

added 2 cents before buyers’ big serve Thursday: two unfilled to bids to

buy pushed the price up 3.75 cents. Friday added another 3.5 cents, for

a net gain of 10.5 cents this week. This brought the price to $1.7250/lb –

the highest since June 12. Barrels managed a similarly pleasant perform-

ance, with a gain of 8.75 cents. International prices were on the losing side of the court as Dairy Market News (DMN)

surveyed price average for Oceania Cheddar continued its losing streak, dropping by 7 cents this week to $1.46/lb.

Strong sales to Japan helped stabilize the price somewhat but DMN reports “the decline on the low end of the range

reflected discounts on spot sales as some manufacturers attempted to lower inventory levels prior to the end of their

fiscal year.” Facing lower global prices, it is not too surprising to find U.S. cheese exports remain below last year’s

level. According to trade data, May cheese exports were down 7% from last year. With U.S. cheese production as

strong as it has been and exports struggling, it is quite impressive U.S. cheese stocks have been fairly steady

(American cheese stocks were up 1% year-over-year in May while production was up 2%). Strong domestic demand

has clearly been a major positive factor.

Butter markets seemed to feed off of the anticipation for patriotic festivities last week as the price gained 2.5 cents

during the holiday-shortened week. The fireworks in the market ended promptly this week, with declines of 0.5, 1 and

0.5 cent Monday through Wednesday. Thursday and Friday were quiet, leaving the price at $1.92/lb – down 2 cents

for the week. According to USDA Foreign Agricultural Service (FAS) data, butter exports in May were down 71% from

last year. This represented the lowest volume since August 2009. This also marked the fourth consecutive month

where butter imports were higher than exports. Weak global prices continue to be the major culprit behind trade woes.

Latest surveyed prices for western European butter point to an average of $1.50/lb, down 3 cents from last month.

The California nonfat dry milk price yo-yo motion got stuck at the bottom, losing value for two consecutive weeks. The

net loss of 4.89 cents for the period brought the price to 88.35 cents this week – the lowest since August 2009. This

price range continues to be in line with what is observed globally. The latest Oceania skim milk powder price average

surveyed by DMN was $0.88/lb. Unfortunately, the trend globally isn’t moving in the right direction, with that average

being down 5 cents from the previous survey. The latest GDT price also worsened, with the average skim milk powder

price down 5 cents to $0.85/lb. Light global demand is behind the downward price movement. DMN reports that

“China’s January-May imports of SMP were 31% below year ago levels.” This is in line with expectations mentioned

last year as China’s purchases last year exceeded their needs and it wasn’t expected they would come back strongly

until the second half of 2015. Current financial concerns over China’s market may indicate the awaited demand recov-

ery may be slower than anticipated. To end on a positive note, U.S. powder exports did well in May, unchanged from

last year but at the highest level since June 2014.

The Western dry whey price remained unchanged at 40.5 cents per pound this week. The average price so far in July

is 40.67 cents. At this price level, it generates 50 cents in the Class 4b formula. If the dry whey price average dips

below the 40-cent mark, it will generate 43.75 cents in the Class 4b formula. Although this may change when CDFA

announces a decision regarding the June 3 hearing, if the Secretary decides to implement a change, it will become

effective August 1.

USDA Dairy Market News

Butter

2 sales, 3 bids unfilled, 3 of-fers uncovered, down 2 cents. Butter production is steady to lower this week as cream supplies tighten. Some butter manufacturers are selling additional cream due to higher profits. Print orders are steady to lower in the East and West, but have started to pick up in the Central region. Inventory levels are adequate for most producers. Some are able to add to stocks on hand with current production levels.

Cheese

7 sales, 2 bids unfilled, 0 offer uncovered. Block prices are up 10.50 cents this week. Cheese production across the United States has been ac-tive. Although milk intakes have declined somewhat, many facilities operated throughout the recent holiday weekend in order to stay ahead of the milk supply. Yields are trending lower with the seasonal declines in milk components. Demand has remained relatively steady for most cheese varieties.

Milk Production

California milk output contin-ues its downward trend. Some dairy farmers report a decline in the solid compo-nents of the milk. This situa-tion is negatively influencing its operational returns. In addition, they are purchasing expensive water. Some dair-ies continue importing fair/good alfalfa hay from Nevada, Utah, and Oregon. Class 1 demand is higher and steady for Class 2.

Dry Products

Prices on the Western range for low/medium nonfat dry milk are lower this week. The market tone is unbalanced and weak. The sale activity is trending steady to lower. Pro-duction for low/medium NDM is flat. Some sellers are trying to clear up inventories with reductions in prices. Invento-ries are steady for this week.

Source: USDA Dairy Market News

July 10, 2015 Weekly Update

Average AA Butter NFDM 40# Blocks Barrels Dry Whey

May $1.9190 $0.9510 $1.6185 $1.6219 $0.4325

June $1.9058 $0.9276 $1.7092 $1.6711 $0.4213

July $1.9248 $0.8958 $1.6470 $1.6060 $0.4067

July 10 $1.9200 $0.8835 $1.7250 $1.6600 $0.4050

Week to date 2 cents 2.16 cents 10.5 cents 7.75 cents -

Month Class 1 4a 4b Overbase Quota

May $17.21 $13.91 $14.63 $14.24 $15.94

June $17.62 $13.65 $15.55 $14.64 $16.34

July $18.57 $13.77 $14.92 $14.51 $16.21

PAGE 3 July 10, 2015 Weekly Update

Enrollment for 2016 Dairy Margin Protection Program begins this month

As of July 1, dairy farmers can now enroll in the USDA Margin Protection Program (MPP) for coverage in 2016. The voluntary program,

established by the 2014 Farm Bill, provides financial assistance to participating dairy operations when the margin – the difference be-

tween the price of milk and feed costs – falls below the coverage level selected by the farmer.

The MPP gives participating dairy producers the flexibility to select coverage levels best suited for their operation. Enrollment began

July 1 and ends on Sept. 30, 2015, for coverage in 2016. Participating farmers will remain in the program through 2018 and pay a $100

administrative fee each year. Producers also have the option of selecting a different coverage level during open enrollment each year.

Margin Protection Program payments are based on an operation’s historical production. An operation’s historical production will in-

crease by 2.61 percent in 2016 if the operation participated in 2015, providing a stronger safety net.

USDA also has an online resource available to help dairy producers decide which level of coverage will provide them with the strongest

safety net under a variety of conditions. The enhanced Web tool, available at www.fsa.usda.gov/mpptool, allows dairy farmers to quickly

and easily combine their unique operation data and other key variables to calculate their coverage needs based on price projections. Pro-

ducers can also review historical data or estimate future coverage based on data projections.

Dairy operations enrolling in the program must meet conservation compliance provisions. Producers participating in the Livestock Gross

Margin insurance program may register for the Margin Protection Program, but this new margin program will only begin once their

Livestock dairy insurance coverage has ended. Producers must also submit form CCC-782 for 2016, confirming their Margin Protection

Program coverage level selection, to the local Farm Service Agency (FSA) office. If electing higher coverage for 2016, dairy producers can

either pay the premium in full at the time of enrollment or pay a minimum of 25 percent of the premium by Feb. 1, 2016.

For more information, visit FSA online at www.fsa.usda.gov/dairy or stop by a local FSA office.

WUD says goodbye and good luck to Kathi Thomas

Longtime employee, Kathi Thomas, is saying goodbye to the WUD family later this month as she

and her husband are relocating to Jacksonville, FL.

Thomas joined WUD in June of 2000 and currently serves the organization as a field representa-

tive for Districts 6 and 7 which covers Merced, Madera and Fresno counties. Prior to her time in

the field, she was located in the Modesto office working as grant administrator. Her efforts brought

in more than $20 million in state and federal grants for California dairy conservation and environ-

mental protection projects. She also managed several grants and partnerships related to renew-

able energy production and conservation and environmental protection efforts for agricultural

lands, including: the Dairy Power Production Program, a $9.6 million California Energy Commis-

sion grant program for installation of biogas-to-electricity systems on California dairies; a

$600,000 USDA grant project to develop a feasibility plan for conversion of dairy biogas to bio-

methane for use as a transportation fuel; a $540,000 EPA grant project for converting dairy biogas

into biomethane for use as a transportation fuel to displace diesel; and a $1 million Conservation

Innovation Grant from NRCS for the Central Valley Dairy Representative Monitoring Program.

In addition to her extensive grant work, Thomas was a valuable team member who provided assis-

tance at a variety of WUD events and industry outreach. She also served as administrative liaison

for Western States Dairy Producers Trade Association, an affiliation of dairy producer groups co-

founded by Western United Dairymen.

“Over the past 15 years, Kathi’s enthusiastic spirit and unwavering dedication to help our dairy producers has been impressive and well

respected,” said Frank Mendonsa, WUD president. “I know she’ll hit her new trail with the same fierce passion she’s contributed to our

membership for so many years.”

The entire team and leadership at WUD would like to wish Kathi the best of luck in her new adventure! Your world famous chocolate

chip cookies and bright smile will be missed, but we wish you all the best.

Members in District 6 and 7 are encouraged to contact Jake Oosterman at (209) 535-1929 or John Labandeira at (559) 285-9126 for any

assistance until a field rep is assigned to this region.

Third annual Strip-Till Dairy Coach Tour kicks off in Hilmar on Wednesday

The third annual strip-till dairy coach tour hosted by Sustainable Conservation and California Ag Solutions will be held Wednesday,

July 15 from 7:30 a.m. – 2:00 p.m. The half-day tour, which begins at the Hilmar Cheese Visitor Center, will include stops at multiple

Merced County dairy farms that have adopted conservation and water efficiency practices.

RSVP to Ladi Asgill, Sustainable Conservation, (209) 604-6554, lasgill@suscon.org or Denise Romero, California Ag. Solutions, (559) 674-

3276, denise@calagsolutions.com.

PAGE 4

Final batching deadline next week for funding through USDA -NRCS EQIP

Western United Dairymen partnered with the Natural Resources Conservation Service (NRCS) and Sustainable Conservation to secure

an additional $3.5 million for Merced and Stanislaus County dairy producers for water quality/conservation projects. The process to apply

for the available funding is the same as the Environmental Quality Incentives Program (EQIP) and will be submitted with NRCS. EQIP

has changed from one deadline and funding cycle per year to five. Applications are batched and ranked on specific dates, providing a more

timely funding response. The remaining FY15 batching deadline is Friday, July 17. If you have questions, please contact your local

NRCS office.

A Comprehensive Nutrient Management Plan (CNMP) needs to be completed as part of the application process, making it important to

plan ahead. A Technical Service Provider (TSP) is necessary to complete the CNMP process and NRCS reimburses producers for the cost

of the CNMP. The type of projects that will be funded through this program are: irrigation pipelines; pumps; structures for water control;

waste storage facility (concrete pads); solid liquid separators; irrigation land leveling; and Comprehensive Nutrient Management Plans

(CNMP).

Hay Prices: USDA Market News July 10, 2015

All prices FOB unless noted as (DEL)

July 10, 2015 Weekly Update

Field Representative Corner

John Labandeira

Districts 8,9,11 & 12

Hello from Central California! It’s been a hot summer! A few days of cooler weather, but for the most part HOT! The heat is normal for our summers, but it has intensified the drought.

The past few months have been busy with sick leave workshops, air district inspections and labor hearings. If you were unable to at-tend the workshops that covered the new sick leave policy, and you have questions, please contact your field rep and get some help. We also have posters that are required to be dis-played along with your Wage Order 14 post-ers.

Another round of air district inspections have taken place in my region. I received quite a few calls for assistance with the silage face calculations and to review the checklists. As a reminder, we the staff are always willing to help you when needed. We can help you with the data to prepare for the inspections and if necessary we can be present for the inspec-tion if you wish.

The Ag Labor Relations Board has visited some of our dairies and requested time card and payroll records. Sometimes they speak to the employees inquiring about their meal rest periods. Always ask for identification before releasing any records to anyone. Call your field rep if you have any questions.

I have assisted three of our members with labor hearings this past couple of months. All the hearings were based on overtime and meal and rest breaks. Two of the hearings went well as the dairymen had good docu-mentation. The third did cost the dairymen several thousand dollars. Please remember …… documentation is a must should you have to go to a hearing.

When you have questions, please contact your field representative.

Region 1: North Inter-Mountain:

Tons Wtd Avg

Premium 1070 175.79

Region 2: Sacramento Valley:

Tons Wtd Avg

Supreme 100 250.00

Premium 390 230.00

Good/Premium 884 213.39

Good 452 200.00

Fair/Good 938 163.37

Fair (ORG) 250 240.00

Region 3: Northern San Joaquin Valley:

Tons Wtd Avg

Premium 230 248.26

Good/Premium 1000 218.00

Good (DEL) 600 205.00

Region 4: Central San Joaquin Valley:

Tons Wtd Avg

Premium (DEL) 500 295.00

Region 5: Southern California:

Tons Wtd Avg

Premium 500 200.00

Good 450 160.00

Region 6: Southeast California:

Tons Wtd Avg

Premium 150 190.00

Good/Premium 446 155.00

Good 1020 126.08