Georgia Milk Producers Weekly Enews
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Good Day! As we knew, information would be coming fast and furious following winter conferences, releases of studies, along with the daily activities each of us must do in our role in the dairy industry or agriculture. In this week's E-News, please scroll to the following contents:
- Class I Mover Formula Cuts Into March Price
- Cost of Processing Study - Mark Stephenson
- GA: Dairy Conference report: Covington and his 2022 Forecast
- GA: House Ag Committee Hears Raw Milk Bill (from GA Farm Bureau Legislative Report)
- FMMO Process: Review and Background - Make Allowances, How Milk is Priced
- FMMO Process: Marin Bozic Presentations at IDFA & PA Dairy Summit
- Youth: Dairy Events / GA National Junior Livestock Show at Perry - next week
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Current Price Assessment; Cost of Processing Study
Key statements from the article:
"Based on Progressive Dairy calculations, the Class I mover calculated under the higher-of formula would have resulted in a Class I base price of $23.67 per cwt, 79 cents more than the price determined using the average-of plus 74 cents formula. That difference is up from 51 cents per cwt in February.
The difference in the higher-of and average-of calculations will have the biggest impact in high-utilization Florida, Southeast and Appalachian FMMOs. The change has become a hot-button topic in calls for FMMO reform."
Feb. 14, 2022: Cost of Processing Study - A long-awaited study by Dr. Mark Stephenson of University of Wisconsin, posted at Dairy Markets and Policy (DMAP), which evaluated Cost of Processing for Cheese, Butter, Whey, and NFDM.
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Find links to the newest 2021 study (31 pgs) and companion pieces of previous studies for comparison.
- There is a FAQ section which details segments of the study
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Scroll down this email to the 'Review-Background' section to find more about 'make allowances'
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In a Feb 14 tweet, Marin Bozic observed this about the study: "If make allowances were changed to 'all plants' averages in this study, Jan. 22 Class III price would be lower by 83 cents, Class IV for 95 cents.
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News from Georgia:
From the article: "Covington went through the numbers for 2021, noting reduced milk production, reduced product inventories, reduced Class I sales, a narrowing of the Southeast milk deficit, expanded exports, and expanded domestic demand as trends that are expected to persist into 2022 – especially on the milk production side as supply programs, production cost increases and limits on available labor keep a lid on milk growth nationwide, even worldwide."
More details about direct impacts on the southeast are found in the article.
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Feb. 11: From the GA Farm Bureau Legislative
Report #5 - GA HB 1175; the Georgia Raw Dairy Act
"The House Agriculture and Consumer Affairs committee held a hearing on Thursday [Feb 10] for HB 1175, the Georgia Raw Dairy Act. This bill, sponsored by Rep. Clay Pirkle (R-Ashburn), seeks to allow for the legal sale of raw milk for human consumption in the state of Georgia. The committee heard testimony from many different groups including Georgia Farm Bureau, other agricultural groups, the Department of Public Health, the Department of Agriculture, Dean Nick Place of UGA’s College of Agricultural and Environmental Sciences, and more. GFB staff spoke in support of the bill, outlining the need for our smaller dairy producers to have the option to safely produce and sell a product that is in high demand and brings a premium price. It has the potential to be a lifeline for smaller dairies that cannot survive on the small profit margins that currently exist in the dairy market.
Furthermore, the current pet milk label that allows for the sale of raw milk intended for consumption by animals, is an unregulated and untested product. We know that this pet milk is being widely consumed by humans, posing a great risk to those who drink it and the dairy industry. To protect consumers and ensure the dairy industry maintains its reputation of providing a safe and healthy product, we believe that legalization and regulation of raw milk for human consumption is necessary. This bill would provide safety measures and testing requirements to ensure the raw milk on the market is as safe as possible. We will continue working with members of the committee and Rep. Pirkle to move this proposal forward. GFB encourages all of our members to reach out to their legislators and express the need for this bill."
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FMMO Process: A Review; Evolving Discussions
REVIEW: BACKGROUND - Make Allowances Defined; How Milk is Priced
It is always helpful to review terms, processes, and the 'working language' that will be involved as we move forward with FMMO discussions - here's a starter.
May 2019: Milk Pricing Provisions - (How Milk is Priced): a companion paper which preceded the Make Allowance Paper (see above), produced for the AFBF Federal Milk Marketing Order Working Group in 2019; 7 pg. pdf for printing. This paper contains charts which show by example make allowances for different milk products.
PRESENTATIONS: Marin Bozic shares info at Winter Conferences
January 25, 2022: Modernizing Modern Milk Pricing: An Exploration, a working paper (130-pg. pdf) by Marin Bozic, in conjunction with Blimling; introduced at IDFA's Dairy Forum. There is a tremendous amount of information and perspective in the presentation, so it may take a bit to read through and absorb, but please make time to do it as market changes are anticipated in the coming months and years. A background can be found at this link.
From the article: "He laid out three “pillars” of milk pricing reform: milk check transparency, fairness in contracting, and Federal Milk Marketing Order modifications.
The first is something he has already begun bringing to fruition. Receiving milk checks from producers in some parts of the country, so far, his goal is to start publishing a Milk Check Transparency Report that would allow producers in a region, or nationally, to see how they are paid — to make milk checks more comparable, and work toward a way for producers to plug in their volume and components and be able to see how decisions affect their price."
From the article: “The Federal Milk Marketing Order (FMMO) system is built around Class I fluid milk… if no changes are made, they can just collapse, west of the Mississippi,” said Dr. Marin Bozic, a University of Minnesota associate professor of applied economics speaking to over 300 farm and industry attendees of the Pennsylvania Dairy Summit in Lancaster on Feb. 2.
Fluid milk sales are declining and being overtaken by the increasing export category — leading processors to lose interest in FMMO participation, he said.
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YOUTH DEVELOPMENT:
Georgia National Junior Livestock Show
- DAIRY EVENTS / Commercial Heifer Show take place from Wed., Feb. 23rd - Fri., Feb. 25th
- Dress-A-Cow sponsored by GDYF, 4-6 pm Foster Rhodes Arena
- Look for GDYF Junior Board to buy cold fresh milk!!
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Link to Complete Event Schedule with specific event times
- These events often involve youth who are not from farms. It is a great opportunity for dairy farmers to visit, encourage those kids, and build bridges to invite them to be dairy advocates for the future. It would be awesome if any of you could make time to visit, and maybe take a participant on to mentor!
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A reminder: in this interim period, please feel free to reach out to Julie at agrivoice@yahoo.com, or text or call at 423-797-1853. We are still in the process of getting everything set up, so for the time being, breaking and current news will be published on Facebook at Southeast Dairy Forum, or on Twitter @foodsheds. Thanks to everyone for the kind words following last week's E-News!
Cordially,
Julie, for Georgia Milk Producers
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