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home : columnists : don wick August 23, 2017

7/10/2017 12:26:00 PM
Spread between block, barrel cheese widens

Don Wick

Traditionally, there was a three or four cent normal spread between block and barrel cheese. That's not the case today with a large disparity between the value of blocks and barrels. Robin Schmahl, commodity broker and owner of AgDairy, LLC, said those two cheese categories are trading their own fundamentals. "Sometimes we've seen barrels above blocks for periods of time and now we're seeing a wide spread between blocks and barrels. I don't think the three-to-four cent rule, if you want to call it that, is an issue anymore. Barrels are in a long position. There is plenty available and sellers want to keep moving it out. We've seen a phenomenal amount of trades being done this year in the barrel market." Corn and soybean prices have moved higher in a volatile weather market, but Schmahl doesn't believe feed costs will be a significant issue in the short-term. "I don't think the milk-to-feed ratio or the income-over-feed costs will turn south fairly quickly."

Canadian trade policies challenged
An international coalition of dairy industry groups from the United States, New Zealand, Australia, Argentina and the European Union is focused on Canada and its trade practices. In a joint letter, these groups are asking their respective governments to challenge the recently implemented dairy pricing rules in Canada. In February, Canada launched a pricing policy that lowers the ingredient prices for Canadian dairy processors and selling Canadian dairy proteins in world markets at below-market prices. These groups, which include the National Milk Producers Federation, U.S. Dairy Export Council and International Dairy Foods Association, indicate the World Trade Organization may need to resolve this dispute.

WOTUS rule withdrawn
The Environmental Protection Agency's controversial Waters of the United States rule is being withdrawn. "Once the WOTUS rule is withdrawn, EPA will revert back to 2008. The standard that was adopted in 2008." EPA Administrator Scott Pruitt said this action will return power back to the states and provide regulatory certainty to farmers and landowners. Pruitt said WOTUS was confusing and needed to be changed. "What's important is the lack of clarity the 2015 rule created. It created a situation where landowners and farmers/ranchers didn't know what was subject to EPA jurisdiction. It was something that created uncertainty and confusion."

Lawmakers praise EPA decision
It is no surprise, the EPA decision to withdraw the Waters of the U.S. rule is being praised by lawmakers. House Agriculture Committee Chair Michael Conaway said this move restores certainty and integrity to the regulatory process. In the rewrite of the WOTUS rule, Senate Agriculture Committee Chair Pat Roberts said he wants language that respects the environmental strides taken by the American farmer and rancher.

EU court rules against soy 'milk' terminology
The European Court of Justice has ruled food companies that produce plant-based products cannot use terms like milk, cheese or yogurt. The National Milk Producers Federation, which is fighting a similar challenge with products like soymilk or almond milk, praised the court decision on European food labels.

'Pink slime' lawsuit settled
ABC News has settled its defamation lawsuit with Beef Products Inc. Terms of the settlement are confidential, but BPI's attorney said the company is extraordinarily pleased with the dollar amount. The meatpacker sued ABC News and correspondent Jim Avila over a series of stories that described lean, finely-textured beef as 'pink slime.' After the stories aired in 2012, sales crashed and BPI closed three of its four beef processing plants. This trial lasted 18 days before the surprise settlement announcement.

Valley Queen expansion project announced
The dairy processing company Valley Queen has announced a $50 million expansion project. This plant update will take place at the Valley Queen facilities in Milbank, S.D. Processing capacity will increase by 25 percent. The expansion is designed to handle the increased demand for its products and the growing milk supply within the I-29 corridor.

MN trade delegation visits Cuba
Minnesota Lt. Governor Tina Smith and Agriculture Commissioner Dave Frederickson led the delegation that traveled to Cuba this past week. The Minnesota visit to Havana came right after President Donald Trump tightened trade and travel rules with Cuba. Minnesota Farm Bureau President Kevin Paap was on the trip and said everyone they met in Cuba seemed to talk about the Trump decision. Despite that hurdle, Paap said, "Minnesota sent the message we want to work together and talk to anyone who is interested in our product." Relationships were developed during the trade mission. "Maybe Cuba is a small market, but it's an important market. We need to continue to move forward."

Filling in for baby boomers
In Minnesota's current agriculture economy, AgCentric Program Manager Judy Barka said the agribusiness sector still needs employees. "When you look at the age of the people who are employed by the agriculture industry today, many of them are in later baby boomer stage. We see massive retirements ahead in the next five years. We also recognize the knowledge base that will go with it. We're trying to increase students in the pipeline to replace those retiring."

NCTC adds new ag programs for fall '17
Northland Community and Technical College is adding four new agriculture programs to its curriculum at Thief River Falls and East Grand Forks. Those programs include general agriculture certificates and associate degrees in animal science and agricultural education. These programs will also allow students to transfer to the University of Minnesota-Crookston to finish out a four-year degree. NCTC Program Manager ADawn Nelson said there is demand for young people to fill jobs within agriculture. "Across the board, in all aspects of agriculture, they need employees. Especially employees that have a general knowledge in agriculture, there's a need for the industry to have students engaged in agriculture, different aspects." These new ag programs will begin during the fall term.

Appointments made to Center for Rural Policy and Development
Minnesota Governor Mark Dayton has announced three appointments to the Center for Rural Policy and Development. Those appointments include Minnesota Farm Bureau President Kevin Paap, Morrison County Administrator Timothy Houle and David Ladd of RDL & Associates.

Trivia challenge
Finland leads the world in per-capita milk consumption. The top-five countries are Sweden, the Netherlands, Switzerland and Greece. The United States is ranked 16th. That answers our last trivia question. For this week's trivia, what country leads the world in milk production? We'll have the answer in the next edition of Dairy Star.

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