Digest highlights

Natzke dave
Dave Natzke
Editor / Progressive Dairy

SMI closes RO balancing plant

Southeast Milk Inc. (SMI) has ceased operations at its reverse-osmosis (RO) plant in Baconton, Georgia.

SMI originally built the plant as an ultrafiltration plant to condense milk to cut freight expenses when milk was most abundant in the spring months. During the fall months, the plant would shut down. In recent years, the cooperative converted membranes to RO with hopes of running the plant year-round. But with milk supplies in the area declining, the need for surplus milk outlets has diminished.

“For many years, SMI’s Baconton plant has provided key balancing for milk suppliers in the Southeast,” said Jacob Larson, SMI president. “But shifting market conditions have now made Southeast Milk perpetually deficit of milk, and we no longer need this facility to balance surplus milk.”

SMI is a full-service cooperative, marketing nearly 1.8 billion pounds of milk annually on behalf of its nearly 130 members across six states in the southeastern U.S.

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California overtime pay required

Effective Jan. 1, California’s agricultural employers with 25 or fewer employees are now required to pay overtime for all hours over nine hours in a workday or over 50 hours in a workweek. Ag employers with 26 or more employees must pay overtime after eight hours per day/40 hours per week.

Established under the 2016 “Phase-In Overtime for Agricultural Workers Act,” the overtime payment requirement for 25 or fewer employers is triggered at 8.5 hours per day/45 hours per week on Jan. 1, 2024; and eight hours per day/40 hours per week on Jan. 1, 2025, according to the state Department of Industry Relations.

Lower annual average fuel prices forecast

The U.S. Energy Information Administration updated its short-term energy outlook, forecasting lower prices in 2023 and 2024.

The EIA projects U.S. retail diesel prices to average about $4.20 per gallon in 2023, down 16% from 2022. Longer term, diesel prices are expected to continue to fall, averaging near $3.70 per gallon in 2024.

U.S. retail gasoline prices are projected to average about $3.30 per gallon in 2023, also down 16% from 2022, and $3.10 per gallon in 2024. 

FDA to continue infant formula enforcement discretion

The FDA notified 11 infant formula manufacturers that they will be allowed to continue supplying the U.S. market while working toward meeting all FDA requirements.

The companies, all headquartered outside the U.S., previously received “letters of enforcement discretion” for specific infant formula products and given a December 2022 deadline to pursue FDA compliance. According to the letters, FDA intends to continue exercising enforcement discretion if the companies demonstrate that they are working to meet all U.S. requirements relating to nutrient content, nutrient quantity, nutrient quality control, recordkeeping and reporting.

Edge Dairy Farmer Cooperative unveils policy priorities

The Midwest-based Edge Dairy Farmer Cooperative has released the organization’s 2023 federal policy priorities, identifying climate and environmental regulation, 2023 Farm Bill reform, dairy product labeling, milk pricing reform, expanded trade opportunities and a reliable workforce as the top issues in the next congressional session.

Edge, based in Green Bay, Wisconsin, has member farms in Illinois, Indiana, Iowa, Kansas, Minnesota, Nebraska, Ohio, South Dakota and Wisconsin. Based on member milk volume, it is the third-largest dairy cooperative in the U.S. 

Edge fulfills requirements of Federal Milk Marketing Orders (FMMOs) as a verification cooperative for dairy farmers, while also providing representation on federal policies. It does not buy or process milk. 

Coming up: December FMMO recap

FMMO Class III and IV milk prices declined in December, and the spread between the two class prices narrowed. Leading to the decline in December Class III and IV milk prices, a drop in the value of butterfat again offset a gain in the value of protein.

What impact that has on prices and marketing will be revealed later this week when all FMMO pooling estimates, uniform prices and producer price differentials are scheduled to be released. Check back with Progressive Dairy for an update on Jan. 16.

Other news, briefly

  • U.S. Sen. Debbie Stabenow, (D-Michigan), current chair of the Senate Ag Committee, announced she will not seek reelection in 2024.
  • Stockholders of both Northwest Farm Credit Services and Farm Credit West approved a merger of their associations to form AgWest Farm Credit, effective Jan. 1, 2023. The new association serves more than 22,000 customers throughout seven Western states – Alaska, Arizona, California, Idaho, Oregon, Montana and Washington. Led by Mark Littlefield, past Farm Credit West president, the new association is headquartered in Spokane, Washington, with regional operating centers across the West.