In case you haven't heard there's a glut of milk. Our dairy farmers are hurting. This is an update on the problem. A previous diary for background is here.
A nationwide dairy federation known as the C. W. T. will be conducting a nationwide buyout of milk cows to bring down the glut of milk by sending 300,000 milk cows to slaughter by August.
That number comes from Rick Record a packer buyer handling the milk cow buyouts for the C.W.T. known as Cooperatives Working Together, a program dairy farmers pay into voluntarily. I spoke with Rick Record today, these buyouts have been conducted before.
This buyout had one new rule that resulted in poor participation. The new rule required that the dairy farmer using this program stay out of production for one year. That rule, said Record, seems to be blamed for poor participation in the program. However, he quickly told me that the rule has now been changed.
The buyout is costing the C.W.T. millions of dollars so far. Record confirmed that 103,000 milk cows to slaughter went into the program as previously reported. In previous buyouts the dairy farmer could turn around and go back into production but the new rule affected participation. The change it seems has come about, Record indicates, due to a number of likely probabilities anticipated to aid a farmer in returning to operations. These would be taxes, crops coming in, government aid and investment returns. These soon appeared to look better than anticipated for some struggling dairy farmers. However, that there is a glut of milk is agreed to by all whom I spoke with.
Do we blame milk protein concentrates?
Stacy Dhohle, dairy woman and spokesperson for Midwest Dairy Association took a few minutes to talk to me this morning. I asked her what we can do to help. She said, "Drink three a day!" What about cheese and yogurt with imported milk protein concentrates (MPCs)?
When I queried her about MPCs which I think has something to do with the glut she could not say how much imported MPCs are in our cheese and other products. She agreed with me that it puts the consumer in a difficult position to help the dairy industry, that is, if we believe MPCs are behind the glut and we wish to boycott products containing imported MPCs.
However, complicating the choice is that some MPCs are domestic.
Idaho Milk Products is a milk processing plant producing MPC 80 using domestic milk. A high level executive of Idaho Milk Products graciously accepted my call. I did not get permission to use his name, our conversation was interrupted. But here’s where it gets complicated. He assured me that the dairy industry problems are low prices [magic numbers?] not the imports of MPCs. The glut however is not affecting production at his plant.
All MPCs at his plant are from domestic milk. The facility is using three million pounds of milk daily from three large dairies.
In a story by the dairy editor for Agri-View, a Wisconsin publication, Ron Johnson writes that Idaho Milk Products is a consolidation of three large dairies and will be taking in the product from those three leaving "4.4 million pounds" from other dairies out there.
Those three according to Johnson are a collective of businesses who own and operate some 20 farms.
"Together, they milk 99,000 cows and raise 83,000 heifers."
Adding the three million pounds with the 4.4 million daily equals 7.4 million pounds of milk daily for that region which doesn't mean anything unless there's a glut.
My understanding of regions and milk production are of an oversimplification of a complicated formula but it’s like this, milk prices are set by region. I'm not even going to attempt to explain the magic numbers. For example, in my state of Oklahoma there are two regions, pricing is different in its two regions, Central Oklahoma and Southeast Oklahoma. According to Dhole Oklahoma is a milk deficit state, meaning Oklahoma does not produce the amount of milk to satisfy demand so it imports milk from outside the state. However, the price that one region’s dairies get for their milk differs from the price the dairies in the other region gets. My question is is the price of the milk from outside the state different from that of the two regions? Does it matter [magic numbers]? I’m waiting for the answer.
Has there been an increase in productive milk cows at auctions? Do we buy a milk cow to help out with the glut?
It may depend on the region. Thus far I haven’t found that to be the case. Milk cows going through sale barns are normally tagged for slaughter for a number of reasons. Jerry Alexander, USDA inspector with a USDA office in Oklahoma City explained to me that Oklahoma does not see many milk cows for a number of reasons. The larger dairies tend to send their milk cows straight to meatpackers.
Tagging requirements to put a milk cow back into production rather than taqging it for the meatpacker at auctions such as the ones he inspects in Oklahoma are burdensome for smaller producers. Milk cows coming to auction are tagged for slaughter to avoid the costs for TB requirements, all required testing. Bringing milk cows in from out-of-state is burdensome as well, sellers must meet requirements for crossing state lines.
These milk cows then coming through the sale barns in Oklahoma are typically from Oklahoma dairies and are meant to go straight to meatpackers, not to feedlots. These are usually spent cows as he put it but some may still be productive. In that case the buyer who intends to keep one is required to pay for testing at his or her expense if the consignor has not paid for these requirements. That process is tedious so it’s uncommon. Normally, these cows are tagged for slaughter and go straight to meatpackers.
Only one auction in Oklahoma reported an increase but not in the number of milk cows, in the quality of milk cows coming through the sale barn in the last week. Weston Winter owner of Winter Livestock Auction in Enid, OK said he has seen younger, healthier milk cows coming through his barn in the last week.
"These are not yearlings," he said, "These are young healthy cows. We normally get milk cows which are older and no longer very productive."
Regarding what he knew about an increase in milk cows for slaughter he cited a government report that there is a 6% increase of milk cows going to meatpackers.
Alexander was not familiar with that number but he was very helpful in pointing out that any increase was likely coming from California, New Mexico possibly, and maybe Eastern states dairies. Record agreed with that.
Where are the imported MPCs coming from?
Hard to trace in the food system. Erie Foods International Inc. is an MPC "manufacturer and dairy ingredients custom processing services" corporation, world importer-exporter with four United States representatives listed at their website serving four regions in the United States including Alaska and Hawaii. They produce MPC 70 and MPC 80/85. These ingredients are used to make beverages, dietary products, infant formulas, protein bars, yogurts, recombined cheese, frozen deserts, bakery products. I don’t know what recombined cheese is so we’ll just skip that for this story. Erie Foods Australia exports blends used in infant formulas and coffee-milk blends among other things. There are other corporate locations around the world.
Erie Foods offers custom processing services in Erie and Rochelle, Ill, Casa Grande, AZ, and Beenleigh and Brisbane, Australia plants. I have not seen MPCs listed as an ingredient in any products at my grocery store.
Keeping in mind that the Idaho Milk Products plant takes in three million pounds of milk daily from three local large dairies I thought about where Erie Foods gets their milk for MPCs? Apparantly not from the glut of milk that dairy men and women are experiencing, that’s just my humble opinion.
When I asked Record if there would be a glut if Erie bought domestic milk to manufacture MPCs he laughed. We both agree, you have to wonder. The question remains is it really a rumor that MPCs are affecting domestic dairy production?
Looking at the production side of MPCs from the perspective of using only domestic milk there may be some truth that foreign MPC imports might be affecting our dairy men and women. That and the magic numbers. Idaho Milk Producers formed their corporation fairly recently to accommodate some three large dairy businesses with large herds into production of MPCs using only domestic milk. Corporate exec who shall remain nameless says there is a glut because prices are down. What does he worry about though, the milk from his dairies all go to the production of MPCs.
What did I learn today? That falling prices are the result of magical complicated formulas that have left a glut of milk out there for us to consume. That, and that 300,000 healthy milk cows are going to the meatpackers.
Drink 3-a-day but pass on the yogurt and cheese because we have no idea where that milk came from.
Meanwhile New York State Senator Darrel J. Aubertine (D-48) reminds us that June is dairy month but more importantly that our farmers need
Fair milk price that gives our farmers a return on investment that covers the cost of production.
Because those magic numbers are not working actually.
If you are thinking of acquiring a healthy milk cow or small herd check your state’s auctions by making a few phone calls to see which ones have been running healthy milk cows through their sale barns. Or if you've ever wanted to own part of a cow go for it now. They may not be culls as usual and there is your chance to help the glut and your neighbor dairy farmer. Not to mention an opportunity to save some fine healthy milk cows from the meatpacker. You can possibly sell it or the herd back to the farmer when he or she gets back on his or her feet. You can be satisfied that you did not add to the C.W.T buyouts and you did help with the glut in the dairy industry.
Meanwhile back at the ranch beef cattlegrowers are watching the numbers of milk cows heading to slaughter growing and vowing to drink all the milk their budgets and stomachs can handle.
Not mentioned but worth reading is:
Not milk: The ingredient behind the dairy crisis