Digest highlights

Natzke dave
Dave Natzke
Editor / Progressive Dairy

CDI acquiring DairyAmerica

California Dairies Inc. (CDI), the largest dairy farmer-owned cooperative in California, has agreed to acquire DairyAmerica, effective Jan. 1, 2023. Terms of the deal were not disclosed.

DairyAmerica, a global supplier of dairy ingredients and a member of the Global Dairy Trade (GDT) market, is a federated cooperative currently co-owned by CDI, Agri-Mark Inc. and O-AT-KA Milk Products. As part of the acquisition, CDI will purchase the ownership rights currently held by Agri-Mark and O-AT-KA, making DairyAmerica a wholly owned subsidiary of CDI.   

Under the new structure, DairyAmerica will continue to market milk powders produced by Agri-Mark and O-AT-KA. DairyAmerica will remain under the leadership of Patti Smith, chief executive officer, and the DairyAmerica office will remain in Fresno, California.

Co-owned by more than 300 dairy producers who ship nearly 17 billion pounds of milk annually, CDI produces approximately 40% of California’s milk.

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Nominees sought for Fluid Milk Processor Promotion Board

The USDA is seeking nominees to serve on the National Fluid Milk Processor Promotion Board. Six individuals will be appointed to serve three-year terms, from July 1, 2023, through June 30, 2026.

The National Fluid Milk Processor Promotion Board, financed by a mandatory 20-cent per hundredweight assessment on all fluid milk processed and marketed commercially in consumer-type packages in the U.S., is composed of 15 fluid milk processors from 15 geographic regions and five at-large members.

The USDA will accept nominations for board representation in five geographic regions and one at-large position. The geographic regions with vacancies are Region 2 (New Jersey and New York), Region 5 (Florida), Region 11 (Arkansas, Iowa, Kansas, Missouri, Nebraska and Oklahoma), Region 13 (Idaho, Montana, Oregon, Washington and Wyoming) and Region 14 (Northern California).

A copy of the nomination form and a signed background form must be submitted for each nominee by Jan. 6, 2023. For forms and more information, visit the USDA Agricultural Marketing Service (AMS) Fluid Milk Processor Promotion Board webpage. 

Maryland livestock brokers sentenced for exporting dairy cattle with fraudulent health certificates

The U.S. Attorney’s Office for the Middle District of Pennsylvania announced that members of a livestock broker company have been sentenced to prison terms for submitting fraudulent health certificates for exported dairy cattle.

On Nov. 17, Daniel and Benjamin Gutman were each sentenced to 30 months in prison by U.S. District Court Judge Jennifer Wilson. Collectively, they were ordered to pay $1.9 million in fines and forfeiture.

The Gutmans, who pled guilty to charges in November 2021, own and operate a livestock exporting business known as Gutman Brothers Dairy Cattle, with operations in Maryland and Pennsylvania.  

Federal law requires cattle transported in interstate and foreign commerce to be tested for certain diseases prior to shipment, including tuberculosis, brucellosis, leucosis and bovine viral diarrhea. A USDA investigation revealed that the Gutmans, with the assistance of Donald Yorlets, a USDA-accredited veterinarian, submitted non-authentic, bovine blood samples to a USDA-accredited testing laboratory and then issued false and fraudulent health certificates for the untested animals. Yorlets currently awaits sentencing.

The USDA’s endorsement of these health certificates permitted dairy cattle to be shipped in interstate and foreign commerce. The Gutman shipped close to 20,000 head of dairy cattle to buyers in foreign countries.

For example, according to court records, the Gutman Brothers exported approximately 2,900 head of cattle to a buyer in Qatar in April 2018 and were paid over $5.3 million in U.S. currency.

NMPF updates regulatory issues

The National Milk Producers Federation’s (NMPF) latest Regulatory Register outlines emerging and ongoing regulatory issues affecting U.S. dairy farmers and their cooperatives in the areas of nutrition and food safety, sustainability and the environment, and animal health.

Highlights include: 

  • NMPF’s joint work with the International Dairy Foods Association (IDFA) on complexities surrounding sodium reduction in cheese
  • Why a potential EPA Superfund designation for per- and polyfluoroalkyl substances (PFAS) is problematic for farmers
  • An update on NMPF’s work with the FDA to speed up approval of climate-friendly feed additives

The report also highlights the FARM Program’s work to protect herd and employee health through the release of its “Everyday Biosecurity Manual.”

U.S. dairy export outlook updated

The value of U.S. dairy exports set a new record high in fiscal year (FY) 2022, and FY 2023 export values are forecast to remain nearly as strong.

The latest USDA quarterly Outlook for U.S. Agricultural Trade report, released Nov. 29, estimated the value of U.S. dairy exports in FY 2022 (Oct. 1, 2021-Sept. 30, 2022) at just under $9.1 billion. That’s up from $7.28 billion in total dairy exports in FY 2021. 

In its forecast for FY 2023, the USDA estimated total dairy product exports at $8.9 billion, down about $100 million from August’s forecast, with declining volumes of skim milk powder, cheese and several other products.

FY 2022 dairy imports totaled $4.6 billion, up from $3.7 billion in FY 2021. Cheese exports were estimated at $1.5 billion. Looking ahead to FY 2023, total dairy imports were projected at $4.3 billion, with cheese exports forecast at $1.6 billion, both unchanged from the August forecast.

U.S. ag export deficit to grow

While dairy maintains a positive trade balance, the same can’t be said for all of agriculture. The latest USDA quarterly Outlook for U.S. Agricultural Trade report estimated FY 2023 exports at $190 billion and imports at $199 billion, a deficit of $9 billion. The U.S. last had a negative agricultural trade balance in 2019 (-$1.3 billion) and 2020 (-$3.7 billion).

Other than the livestock, dairy and poultry product group, the import forecast for all other major product groups was increased from the previous forecast. 

Impacting agricultural trade, the global economic outlook remains uncertain due to inflation, changing monetary policy conditions and trade disruptions caused by the Russian invasion of Ukraine. Previous growth projections are moderated due to tempered economic growth in Europe and North America.

Supply chain pressures have largely abated, and spot shipping rates have declined substantially from their highs in September 2021. Inflation continues to be a global concern, and central banks around the world are continuing their monetary tightening cycles to combat rising inflation rates, with the notable exception of China which has maintained a loose monetary policy.

The strong U.S. dollar makes foreign agricultural goods comparatively affordable for the U.S. domestic market and partially accounts for moderate upward pressure on import volumes. However, the upward pressures on U.S. imports are expected to be tempered by a slowing economy coupled with continuing inflation, which would slow domestic demand for consumer goods as well as agricultural products. Though agricultural products would be less impacted by these ebbing factors as consumers prioritize consumption of food and other necessities over more nonessential goods, some impact on agricultural import demand is still likely.

Ag census distribution underway

The USDA has mailed survey codes to all known U.S. agriculture producers with an invitation to respond online to the 2022 Census of Agriculture. Paper questionnaires will be mailed in December. Producers need only respond once, whether securely online or by mail, by Feb. 6, 2023.

Responding to the Census of Agriculture is required by law. The same law requires the USDA’s National Ag Statistics Service (NASS) to keep all information confidential, use the data only for statistical purposes and only publish in aggregate form to prevent disclosing the identity of any individual producer or farm operation. NASS will release the results of the ag census in early 2024.

Farm operations of all sizes, urban and rural, which produced and sold, or normally would have sold, $1,000 or more of agricultural products in 2022, are included in the ag census.

The ag census collects comprehensive and impartial agriculture data for every state, county and territory. It highlights land use and ownership, producer characteristics, production practices, income and expenditures, among other topics. Collected every five years, the gathered information influences government policy decisions.

Changes to the 2022 questionnaire include new questions about the use of precision agriculture, hemp production, hair sheep and updates to internet access questions.

To learn more, click here. To complete the questionnaire online, click here.