DFA to pay $158.6 million in antitrust settlement

January 29th, 2013 Chris Kick

SALEM, Ohio — Although it “makes no admission of wrongdoing,” Dairy Farmers of America (DFA) has agreed to pay $158.6 million to settle a class action lawsuit that alleged raw milk price-fixing in a 14-state region stretching from southern Indiana through the southeastern United States.

This agreement, the third and final settlement in the Southeast Milk Antitrust Litigation, was announced Jan. 22, the day the case had been scheduled to go to trial.

The Cleveland-based law firm BakerHostetler, which represented the plaintiffs (mostly dairy farmers), said the DFA settlement agreement brings the total award to more than $300 million, as well as substantial changes to how business will be conducted in the Southeast dairy industry.

Previous settlements were reached in July 2011 with defendants Dean Foods for $140 million, as well as Southern Marketing Agency and James Baird for $5 million plus changes in milk marketing conduct.

The class-action lawsuit was filed in 2007 after farmers in the region alleged a price-fixing conspiracy between Dairy Farmers of America and its major commercial milk buyers and bottlers, including Dean Foods.

“The Southeast milk market has been reformed to the benefit of dairy farmers,” said Robert G. Abrams of BakerHostetler, lead attorney for the plaintiffs. “The monetary recovery itself is very substantial and the resulting conduct changes will significantly and positively impact competition in the Southeast dairy industry.”

Under the terms of the settlement, filed with the U.S. District Court for the Eastern District of Tennessee, DFA will pay $140 million to the plaintiff class.

An additional, refundable $9.3 million per year for two years will be placed in a fund to incentivize stronger Class I utilization rates in Federal Orders 5 and 7, the Appalachian and Southeast marketing areas headquartered in Louisville, Ky., and Atlanta, respectively.

“Our board and management team have worked diligently to put certain old issues behind us,” said Rick Smith, president and chief executive officer. “This outcome positions DFA to fulfill a commitment to our members to resolve pending litigation, to remove a source of distraction for our leadership and to avoid additional legal fees.”

Changes made

Included in the agreement are remedial elements regarding reporting, accounting and communication of certain business information and functions.
DFA says many of the changes are consistent with new policies and procedures DFA management developed and implemented previously.

DFA says the payment of the settlement “will not affect the cooperative’s day-to-day operations or its ability to market members’ milk or pay them a competitive price for that milk. Member milk checks and the member equity program will not be impacted.”

Included in the agreement are remedial elements regarding reporting, accounting and communication of certain business information and functions.

In 2008, DFA and its former CEO Gary Hanman, and former Chief Financial Officer Gerald Bos were fined $12 million for attempting to manipulate the Chicago Mercantile Exchange Class III milk futures contract.

American Farm Bureau delegates want risk management in farm bill

January 17th, 2013 Other News

NASHVILLE, Tenn. — Voting delegates to the American Farm Bureau Federation’s 94th annual meeting in Nashville earlier this month voiced support for a bipartisan, reform-minded farm bill, crafted around a broad, flexible, crop-insurance-based program, including risk-management protection for peanuts, rice, forage and specialty crops.

“We will push hard, in cooperation with our congressional and administration allies, for a five-year farm bill that provides our farmers certainty and extends much-needed risk management tools across more acres and more crops,” said AFBF President Bob Stallman, a rice and cattle producer from Texas.

Delegates said AFBF would not only support a farm bill with a strong safety net and risk management programs to protect farmers from catastrophes, but they also would work for programs that provide emergency assistance for livestock and tree producers not covered by federal crop insurance programs.

Delegates reaffirmed policy supporting changes to the dairy safety net, consistent with the margin insurance programs included in versions of the farm bill approved by the House and Senate ag committees.

No raw milk support

On another dairy issue, delegates approved a new policy that states only pasteurized milk and milk products should be sold for human consumption.

Other key issues

On national fiscal policy, delegates reaffirmed the importance of a sound budget process with a priority on spending restraints rather than tax increases.

Delegates also voted to support streamlining or replacement of the H-2A seasonal and temporary agricultural worker program in addition to allowing experienced, undocumented agricultural workers to adjust to legal status.

Biotechnology

Recognizing the important role played by agricultural biotechnology and rapid developments in the industry, delegates expressed continued support of a private-sector, industry accord to govern how biotech traits are managed when patents expire.

They also reiterated support for the continued implementation of an industry solution that promotes investment and marketability of new technologies.

Delegates voted to support greater flexibility within the National School Lunch and Breakfast Programs. Specifically, they voted to oppose mandatory limits on calories and serving sizes for lean meats, protein-rich foods and dairy products.

The policies approved at the annual meeting will guide the nation’s largest general farm organization in its legislative and regulatory efforts throughout 2013.

Leadership vote

The delegates newly elected three state Farm Bureau presidents to the AFBF board of directors: Richard Bonanno of Massachusetts (Northeast Region), Jimmy Parnell of Alabama (Southern Region) and Don Shawcroft of Colorado (Western Region).

Fourteen other state Farm Bureau presidents were re-elected to represent their regions on the AFBF board of directors: Midwest Region: Craig Hill of Iowa, Kevin Paap of Minnesota, Don Villwock of Indiana and Wayne Wood of Michigan. Southern Region: Ronnie Anderson of Louisiana, Kenneth Dierschke of Texas, Zippy Duvall of Georgia, Mike Spradling of Oklahoma, Lacy Upchurch of Tennessee and Larry Wooten of North Carolina. Northeast Region: Dean Norton of New York and Carl Shaffer of Pennsylvania. Western Region: Perry Livingston of Wyoming and Paul Wenger of California.

Zach Hunnicutt, a crop farmer from Nebraska, was elected the new chairman of the AFBF Young Farmers & Ranchers Committee, which also makes him a member of the AFBF board of directors during his one-year term.

Terry Gilbert of Kentucky was re-elected to serve a two-year term as chair of the AFB Women’s Leadership Committee and on the AFBF board of directors.

Dairylea Cooperative Inc. celebrates 105 years of marketing dairy industry

November 12th, 2012 Other News

 SYRACUSE, N.Y. –  Dairylea Cooperative Inc. hosted its 105th annual meeting in Liverpool, N.Y., Oct. 9.
Northeast dairy industry. Dairylea CEO Greg Wickham described the strong Northeast dairy industry, the yogurt boom and the impact it is having on the area.

 The meeting also featured guests who shared about how the dairy industry is doing in other parts of the country and what organizations are doing to promote dairy.

Every year,  Dairylea Cooperative honors three member farms with the Pride of Dairylea Award. The Pride of Dairylea program was created to recognize member farms that operate with the quality product in mind.
This year, Dairylea honored Damin Farms; Hepler Homestead Farm; and Brabant Farm.

Distinguished member awards

Dairylea honored members of 50 or more years of membership with the Distinguished Member awards. The Taylor Family of Warriors Mark, Pa.; the Burgin Family of Delhi, N.Y.; Chris Didas of Mt. Morris, N.Y.; and Jon White of Geneseo, N.Y., were this year’s recipients.

Nine member farms were also honored for their achievements in milk quality management this year. These awards are given annually to the top herds producing outstanding raw milk. This year’s recipients were the Houde Family Farm, of St. Johnsbury, Vt.; Alleger Family Farm of Cameron, N.Y.; Henderson Farms, of Schaghitcoke, N.Y.; Galens Homestead Acres, of Clifton Springs, N.Y.; Hepler Homestead Farm LLC,  of Pitman, Pa.; Shearing Farms LLC, of Gainesville, N.Y.; Fessenden Dairy LLC,  of King Ferry, N.Y.; Broughton Farm Operation, of Silver Springs, N.Y.; and Sparta Farms LP of Danville, N.Y.

Scholarships

Dairylea Cooperative also awarded students pursuing careers in agriculture-related professions. The Clyde E. Rutherford Scholarship was established in honor of the now retired, longtime chairman, Clyde E. Rutherford. This scholarship was given for the first year ever and recognizes one student who excels academically, is pursuing a career in an agriculture-related profession, who has shown great leadership abilities and embodies the spirit of cooperation.
Lauren Hill of Gilbertsville, N.Y., was this year’s recipient.

Dairylea also awards the Dairylea Leadership Scholarships each year. These students exhibit outstanding leadership abilities and foster the spirit of cooperation. This year’s Leadership Scholarship winners are Tyler Hymers of Delhi, N.Y.; Ben Rogers of Springville, N.Y.; and Isaac Haagen of Howard, Pa.

Creaming the co-op: There appears to be no winners in the milk battle

November 8th, 2012 Alan Guebert

Sometimes it takes a newspaper’s ink-stained thumb to right the scale of justice, and no newspaper has a bigger, inkier thumb than the New York Times.

On Sunday, Oct. 28, the Times published a 2,900-word tribute to the greedy good-old-boyism that seems to have been the only business plan of America’s biggest dairy cooperative, Dairy Farmers of America, upon its creation in 1998.

Court documents

According to Times business writer Andrew Martin, court documents in two antitrust suits by dairy farmers against their own co-op, DFA, and its biggest milk customer, Dean Foods, allege a decade of cronyism and insider dealing that left the bosses in buttermilk and the dairymen-co-op owners in dust.

The DFA-Dean saga began when four regional milk marketing cooperatives merged to form DFA in 1998. Gary Hanman, boss of one of the four, took command. The new co-op claimed to represent nearly 30 percent of all fluid milk in America.

That big bucket caught the attention of Gregg Engles who, as the 1990s were drawing to a close, was building Dean Foods into a dairy powerhouse. Engles had a thirst for milk and Hanman had the milk. Soon they were talking.
 “By normal rhythms of the industry,” writes Martin, the two milk titans “would be financial adversaries… because bottlers try to buy raw milk as cheaply as possible (while) … farmers joined cooperatives (to)… leverage their numbers for higher prices.”

Normal economics?

But the deal Engles and Hanman cut “went against normal economics.” Engles promised Hanman that DFA “would be the exclusive supplier to Deans’ milk plants” and DFA, “in turn, promised a reliable supply of… raw milk, at the lowest prices, plus rebates and credit so Dean could acquire more milk plants, the suit says.”
Why would Hanman commit his farmers’ milk to Engles so cheaply?

According to the Times, a Hanman trademark was to go “against time-honored practices… For instance, instead of squabbling with bottling companies over price, he sought joint ventures with them” because, he once noted, the JVs “gave members ‘greater market security and an opportunity to capture income from the retail market.’”
 Milk business. DFA members, however, weren’t in the milk-retailing business; they were in the milk-making business. Hanman’s job was to build member profit by selling DFA milk to processors; not secure processor equity, as the suits allege, by selling DFA milk cheap.

Court documents in the civil suits (one is referred to as “Southeast,” the other “Northeast”) draw a deeply tangled web of business deals, buyouts and payouts by Dean, DFA and numerous other dairy entities over most of the eastern US. The resulting picture, allege the plaintiff-farmers, is a Dean-DFA deal that milked cooperative members to enrich dairy executives.

Neither suit has gone to trial so that key allegation remains unaddressed. What is more certain, according to the Times, is the amount cash whipped up and pocketed by Dean and DFA allies and pals as the partnership flourished.
Milk plants. “One business partner of Mr. Hanman was paid $100 million by Deans’ predecessor and the DFA for his stake in milk plants, the partner had paid $6.9 million for it two years earlier. A business partner of Mr. Engles was paid more than $80 million for his investment in milk plants; that partner had paid little more than $5 million.
“Mr. Hanman was paid $31.6 million during his seven-year tenure as chief executive… As for Mr. Engles, his compensation over the last decade comes to $156 million…”

Dairy observers, though, reckon one-third of the dairy operations in states covered in the two lawsuits went out of business during the same period.

Dean settles

Dean Foods remains. In July it bought its way out of the Southeast suit for $140 million. A year earlier it settled the Northeast lawsuit for $30 million.

“In both cases,” writes Martin, “it admitted no wrongdoing.”

Going to trial

DFA, however, is hanging tough against its own members; the Southeast suit goes to trial in January. Its judge has ordered mediation talks but no one on either side predicts a pre-trial deal. If DFA loses at trial, estimated penalties could top $1.2 billion under current antitrust laws.

That tab, too, will fall on DFA’s members who will lose even if they win.
And the milk-marketing minds behind it all?

Hanman retired in 2006 and Engles, the Times reports, will relinquish Dean’s top spot by the end of 2012, one year after “Forbes ranked him among it Worst Bosses for the Buck” in 2011.

A farm legacy of speaking out

August 14th, 2012 Other News

Editor:

Bryan Wolfe was tragically killed in a machinery accident Aug. 7, 2012, on his farm in Rome, Ohio. Bryan one of the last of the small dairy farmers, who knew his cows so well that they weren’t even tagged.

Bryan’s passion for his cows forced him into equally passionate political activism. He believed that producing food was a noble profession, and that small and medium sized family farms were the best way to do it.

The takeover of agriculture by large corporations whose focus is profit and not the production of quality food really made him angry. Consolidation in agriculture, from production to processing, directly threatened the way of life he prized so dearly.

He became involved in Ohio Farmers Union almost 20 years ago so that he could advocate for change. He eventually became president of the Ashtabula, Geauga, Lake counties chapter of OFU, and also the vice president of OFU.

Bryan also kept a close working relationship with a loose network of dairy activists in the eastern United States, always focused on practical ways to get changes in dairy policy. Bryan was a political activist, but not as a dogmatic partisan. He didn’t have much use for most politicians, Democrat or Republican, because he didn’t see that they did enough to save the family farm.

He was amazing in how he kept track of dairy policy and which legislators were doing something about it. Bryan called them on the phone on a regular basis to give them his opinion. He knew what they were doing and they always knew what he thought.

Bryan had an especially close working relationship with our Congressional Representative, Steven LaTourette. Bryan’s most recent project was writing a white paper (June, 2012) on dairy policy for Rep. LaTourette. The paper analyzed the problems in the dairy industry, pointing out that the current dairy pricing system doesn’t meet the criteria of the 1937 Agricultural Marketing Act, which allows dairy farmers to recover their cost of production.

Bryan’s work was not just at the federal policy level. He was so angered by raw milk price manipulation that he joined with other eastern U.S. dairy farmers in a lawsuit against those he held most responsible. The lawsuit by Gerald Carlin, John Rahm, Paul Rozwadowski, and Bryan Wolfe was filed against Dairy America, Inc., and California Dairies, Inc. on March 6, 2009.

The lawsuit alleged that Dairy America, Inc, and California Dairies, Inc, misreported contract pricing data from Jan 1, 2002, through April 30, 2007. The case was dismissed and the farmers appealed.

The day that Bryan was killed there was a phone message from his lawyers saying that the appeals court upheld the farmers’ appeal and that the case would move forward. Bryan never heard the message.

Along with his family, I grieve deeply for Bryan’s loss. And I will miss Bryan’s persistent voice, always pushing so hard for policy changes that would benefit small and medium farmers.

Mardy Townsend

Windsor, Ohio

(The author is also the current president of the Ashtabula, Geauga, Lake Counties Farmers Union.)

Dairy researchers identify bacterial spoilers in milk through new study

July 27th, 2012 Other News

Dairy research

ITHACA, N.Y. — Our days of crying over spoiled milk could be over, thanks to Cornell food scientists.

Milk undergoes heat treatment — pasteurization — to kill off microbes that can cause food spoilage and disease, but certain bacterial strains can survive this heat shock as spores and cause milk to curdle in storage.

Identification

Researchers in the Milk Quality Improvement Program at Cornell’s College of Agriculture and Life Sciences have identified the predominant spore-forming bacteria in milk and their unique enzyme activity, knowledge that can now be used to protect the quality and shelf life of dairy products.

“Control of food spoilage is critical in a world that needs to feed 7 billion people,” said Martin Wiedmann, food science professor and study co-author. “Approximately 25 percent of post-harvest food is spoiled by microbes before it is consumed.”

New study

The study, published in the March issue of Applied Environmental Microbiology by the lab of Wiedmann and Kathryn Boor, the Ronald P. Lynch Dean of the College of Agriculture and Life Sciences, identified the predominant strains of spore-forming bacteria, which can foul milk and other food products.

The culprits, Paenibacillus bacteria, are ubiquitous in nature and cause off-flavors in a variety of foods and curdling in dairy products. As spores, the bacteria can survive in dormant form for years despite the best practices in cleaning, processing and packaging.

Adaptable bacteria

In fact, the bacteria may be uniquely adapted to overcome the twin tactics of dairy protection: pasteurization followed by refrigeration. According to co-author and research support specialist Nicole Martin, the spores are not only resistant to heat, the small jolt of heat during pasteurization may actually stimulate them to germinate.

Some can reproduce in refrigerated dairy products at temperatures that would stymy other types of bacteria.

“We studied 1,288 bacterial isolates in raw milk, pasteurized milk and the dairy farm environment; however, only a handful of strains accounted for 80 percent of the spore-formers present,” said Wiedmann. “They grow well in milk — and possibly other foods — at temperatures as low as 43 F, and we can identify Paenibacillus because of their uniquely high galactosidase enzyme activity at 32 C.”

Food safety

They also investigated how pasteurization affects the presence of such bacteria. Concerns about food safety have prompted many dairy processors to increase pasteurization temperatures above the 161 F degrees minimum set by the government.

Anecdotal reports, however, suggested this practice actually led to more spoilage once the products were refrigerated. Tallying bacterial numbers throughout the refrigerated shelf life of milk pasteurized at two different temperatures — 169 F and 175 F — the Wiedmann-Boor lab found that lowering the temperature significantly reduced bacterial growth during refrigerated storage, especially by 21 days after pasteurization.

Already being applied

The findings are already being applied in the field. The Wiedmann-Boor Lab was enlisted by Upstate Niagara, a cooperative of more than 360 dairy farm families throughout western New York, to further improve the quality of their award-winning milk by assessing milk samples for spore-formers.

Data on samples that contained spore-forming bacteria are now being analyzed using DNA fingerprinting to identify the types of organisms present and where they might have come from.

Used as a model

Martin said she hopes the collaborative project will become a model for how to approach spore-forming bacteria in individual dairy processing plants.

“It’s one of the strengths we have at Cornell — we are able to do advanced research and immediately turn it around to help the industry,” Martin said.

Free public tour series features Ohio’s organic and sustainable farms

May 18th, 2012 Other News

COLUMBUS — The Ohio Ecological Food and Farm Association (OEFFA) has announced its 2012 Ohio Sustainable Farm Tour and Workshop Series, featuring free public tours of sustainable and organic farms.

Consumers interested in local foods, farmers and market gardeners wanting to learn more and network with other farmers, aspiring and beginning farmers, and anyone interested in learning more about the production and marketing techniques of sustainable farmers, are encouraged to attend.

“Farmers are opening their gates this summer to show consumers how sustainably produced food is grown and marketed,” said Michelle Gregg, OEFFA’s Sustainable Agriculture Educator.

Thirteen tours and workshops are being sponsored by OEFFA and will be held between June and September.

These tours feature: organic berry production; high tunnels and hoop houses; commercial composting; permaculture; natural goat health; raw milk cheesemaking; specialty grain production; produce auctions; institutional sourcing; Ohio farm history; fiber production; specialty crop production, and farmers using a wide range of direct-to-consumer marketing strategies, including farmers’ markets, restaurants, and Community Supported Agriculture (CSA) programs.

OEFFA’s events:

June 10: Berry trellis systems and high tunnels tour and potluck— Brickel Creek Organic Farm; Jamestown, Ohio; (Greene Co.)

June 24: OEFFA Athens Chapter compost tour — The Compost Exchange; Athens, Ohio; (Athens Co.)

July 20: Garden tour and permaculture lecture with Peter Bane — Shaker Heights, Ohio; (Cuyahoga Co.)

July 21- July 22: Advanced urban permaculture workshop with Peter Bane — Cleveland, Ohio; (Cuyahoga Co.)

July 28: Natural goat health and raw milk cheesemaking tour — Blue Rock Station, Philo, Ohio; (Muskingum Co.)

July 29: Garlic and hoop house season extension tour — Jandy’s Farm, Bellefontaine, Ohio; (Logan Co.)

Aug. 4: Grain Growers Chapter specialty grain workshop and potluck — Gregg Organics, Bellville, Ohio; (Richland Co.)

Sept. 14: Produce auctions and the local food web tour — Owl Creek Produce Auction, Fredericktown, Ohio; (Morrow Co.)

Sept. 14: Institutional sourcing of local food tour — Kenyon College, AVI Foodsystems, Gambier, Ohio; (Knox Co.)

Sept. 16: Sustainable living on an Ohio century farm tour — Carriage House Farm, North Bend, Ohio; (Hamilton Co.)

Sept. 16: 2012 OEFFA Stewardship Award winner tour — Peach Mountain Organics, Spring Valley, Ohio; (Greene Co.)

Sept. 23: Ohio farm history tour and potluck — Stone Garden Farm and Village, Richfield, Ohio; (Summit Co.)

Sept. 27: Alpaca fiber production tour — Alpaca Spring Valley Farm, Minerva, Ohio; (Stark Co.)

In total, the series features 22 farms and food businesses, two university research centers and colleges, and five educational workshops.

For additional information and a complete list of all farm tours, including dates, times, farm descriptions, directions, and maps, go to www.oeffa.us/oeffa/pdfs/farmtour2012.pdf.

Dairy Excel: If accepting risk is your personal preference, why am I paying for it?

November 3rd, 2011 Normand St-Pierre

El Capitan! A 3,000 vertical rock formation located in beautiful Yosemite National Park. Long thought to be impossible to climb, it was first ‘conquered’ in 1958 by a group of three climbers who took 47 days to reach its summit. Many now consider El Capitan as the standard of ‘big wall’ climbing.

Because anything that goes up must eventually come down, it didn’t take long for someone to come up with the brilliant idea not to climb, but to jump from its top… with a parachute. This feat was first accomplished by Michael Pilkey and Brian Schubert in 1966, an event that gave birth to BASE jumping.

What is BASE jumping? BASE jumping, or more appropriately B.A.S.E. jumping is an activity where people jump from fixed objects with a parachute. The letters in BASE stand for: buildings, antennas, spans (bridges), and earth (cliffs).

To say that BASE jumping is dangerous is an understatement. It is estimated that BASE jumping results in one fatality per 60 participants, or one fatality per 2,317 jumps. The word ‘fatality’ here means death!

A brilliant demonstration

Afraid that BASE jumping could quickly get out of control, the National Park Service put in place a permit system for BASE jumping El Capitan. The permitting program was quickly dismantled after only three months because people kept on jumping without a permit. The service has vigorously enforced a ban ever since.

‘Risks over-exaggerated.’

This ban has angered some people who claimed that the risks associated with BASE jumping have been greatly over-exaggerated.

To demonstrate the safety of BASE jumping, Jan Davis proceeded to make a media advertised, yet illegal, BASE jump from El Capitan on Oct. 23, 1999. His parachute didn’t quite open up in time, and television cameras were there to capture his final BASE jump.

Milk regulations

So where am I going with this column? What does BASE jumping have to do with milk?

Well, the story of Jan Davis doesn’t end up with his last BASE jump. A brilliant attorney filed a lawsuit for his estate, claiming that the National Park Service was negligent for not stopping Davis when it knew of the dangers involved.

I don’t know the outcome of the lawsuit in question, but I know darn well that some of yours and my tax dollars were used to defend the National Park Service.

Personally, I firmly believe in personal freedom and I couldn’t care less if all the Mr. Davises of the world were to jump from wherever they please. The problem, however, is that you and I are asked to pay for the damages whenever they occur. And this is exactly the case for milk pasteurization.

Lethal milk

Milk is a marvelous food. One problem is that milk is also a good food for pathogens. Over centuries, diseases associated with the consumption of raw milk resulted in the death of many human beings.

The discovery by Mr. Pasteur that a certain amount of heat destroys most pathogens in milk led to the universal adoption of pasteurization in developed countries. Most everyone were happy that public health and safety had been so enhanced.

Of course, pasteurization also destroys some good microorganisms. Some people believe that non-pasteurized milk is healthier than pasteurized milk. As with BASE jumping, I myself wouldn’t care that some people willingly decided to consume raw milk if their choice wouldn’t affect others, myself included. But it does, both financially and from a public safety standpoint.

A number of infectious microbes can be found in raw milk: Brucella, Campylobacter jejuni, E. coli, Lysteria monocytogenes, Mycobacterium tuberculosis, Salmonella, Staph. aureus, and Yersinia enterocolitica just to name a few. They can all make you really sick; some can kill you.

I just dislike the idea of picking up the health tab of the people who decided to BASE jump using raw milk.

I find it utterly ironic that many dairymen are now investing some serious dollars in on-farm equipment to pasteurize the milk fed to their calves while other people are spending even more money in trying to avoid the pasteurization of the milk they consume. Unpasteurized milk is safe — so they claim. Maybe more so than BASE jumping.

Just ask Brian Schubert, the first man to BASE jump El Capitan in 1966. Well, maybe not, as Mr. Schubert died while BASE jumping from the New River Gorge Bridge in West Virginia on Oct. 21, 2006. A late opening parachute… Another lawsuit…

Personal preference and perfectly safe!

Weather, Wall Street affecting agricultural commodity prices

October 25th, 2011 Other News

UNIVERSITY PARK, Pa. — Recent weeks have been bad for agricultural commodity producers, with falling prices impacting Pennsylvania’s farmers. An economist in Penn State’s College of Agricultural Sciences said there are reasons why prices for corn, milk, soybeans, beef, pork and wheat have fallen sharply.

Reality

James Dunn, professor of agricultural economics, noted that what appears to be plunging prices are actually a price correction, after a year of climbing prices due to global demand and an extremely tough summer of floods and droughts nationwide.

“For the last several weeks, prices for basic commodities have been going down sharply,” Dunn said. “Some went down a few weeks ago, others went down recently, but all basic agricultural commodities that are of interest in Pennsylvania have dropped in the last two months — pretty substantially in most cases.

“Some by 20 percent, others by just 10 percent, but all are down considerably. Corn and soybeans have bounced back somewhat this week but still are well below their levels in early September.”

Dairy farmers are especially hard-hit, because the price they’re getting for raw milk has dropped drastically while the price of feed grain has not gone down as much, according to Dunn.

Weather woes

The disparity is compounded by excessive spring rain, summer drought and flooding in the Northeast and record drought in the Southwest. The harsh weather wiped out much of the feed corn and forage crops intended to feed dairy herds.

“It’s been a bad year for on-farm feed production, so a lot of farmers will be going out to buy stuff they thought they already had produced,” he said. “So, they spent money to plant crops they didn’t get, and now they have to spend more money to replace them.”

Dunn said because the weather in the Midwest has improved in recent weeks, the corn crop should be better than projected earlier in the summer — a much-needed break, since Eastern farmers probably will have to buy supplemental feed and forage at premium prices.

Speculators

Another culprit is Wall Street, Dunn explained, as speculators jumped in to take advantage of a well-known economic indicator, driving prices higher than the norm.

“A lot of times, if you have a national economic recovery coming, the basic commodities lead the recovery,” he said. “So, people with no interest in or understanding of agriculture invested in commodities because they were looking to make money.

“But once it became clear that the U.S. economy was not recovering, and that we actually may be at risk for a double-dip recession, these people fled from the basic commodities because they were afraid prices would go back down.

“And of course, their departure back into cash and out of agriculture meant that the commodities lost value because there weren’t buyers willing to step in at those high prices. To some extent, they created an investment ‘bubble’ of higher-than-reasonable commodity prices.”

Even though prices are falling, Dunn said any Pennsylvania farmers with crops to sell will get good prices for them because the prices are still high, just not as high as they were.

Livestock

He said the state’s animal producers are most threatened, because the unusual weather of this summer, coupled with flood damage, will force them to import some very high-priced feed grain, leading to higher poultry, beef and pork prices for consumers.

“Our corn crop in Pennsylvania is small, and much of what would be going for grain instead will be chopped into silage, and so we’re going to be importing a lot more corn from the Midwest than we ordinarily do,” he said.

“And the price differential [between in-state and imported corn], which is normally about 30 cents at this time of year, is now about $1.30. So the price of feed for Pennsylvania will be very expensive, even with the overall drop in prices.”

Consumer prices will be affected less than the basic commodities because there’s a lot of value added to the raw materials, Dunn said.

Poultry

“But consumer food prices are increasing and in some cases will go up further. I wouldn’t be surprised if poultry prices rise, for instance. They’ve been down — the poultry industry has been hit very hard by high corn prices — but ultimately they’ll cut their flock sizes in response to that, and poultry prices will go up.”

Dunn pointed out that consumer price increases affect the poor more because they spend a greater percentage of their money on food.

“We haven’t had very much food-price inflation for quite a while, but it looks like we’re going into a period of 4 to 5 percent food-price inflation, perhaps even more,” he said.

“Interest rates are essentially zero, and incomes are not growing, so it’s going to be more noticeable than it would be if you were earning good money on your savings and were getting regular raises.”

Sometimes price jumps are absorbed by food processors and supermarkets instead of being passed on to consumers. But, Dunn said, don’t count on that too much this time.

“For one thing, margins in most of these industries are not very good right now,” he said. “A couple of supermarkets have done 90-day price freezes for some of these commodities, but in general, price increases will be passed along.”

Cutting back

Consumers essentially will have to do what farmers do: deal with it.

“Price instability is a fact of life in farming,” he said. “They’ll have to hold off on purchases, make old equipment last a little longer, cut back on personal consumption. In some cases, farmers will change what they produce.”

Public invited to OEFFA farm tour of farm cheesehouse

August 17th, 2011 Other News

DEFIANCE, Ohio — The next stop on the Ohio Ecological Food and Farming Association’s 2011 farm tour series will be at Canal Junction Farmstead Cheese in Defiance, Ohio (Paulding Co.) from 11 a.m. to 1 p.m. Aug. 20.

Family-owned and operated, Canal Junction Farmstead Cheese produces and direct markets grass-fed beef, pork, chicken, lamb, turkey, brown eggs, and raw milk cheeses.

Participants will learn how milk is turned into handmade, artisan, raw milk cheeses. This tour is free and open to the public. No registration is necessary.

For a complete description of the farm tour, including directions and a map, go to www.oeffa.org/farmtour/.

For more information about Canal Junction Farmstead Cheese, visit www.canaljunctioncheese.com, call 419-399-2350, or email cjcheese07@yahoo.com.