USDA began hearings this week regarding producer-handlers, farms who bottle their own milk and therefore compete with other bottlers. National Milk’s Chris Galen on Thursday said “The issue is whether the very largest producer handlers should continue to be exempt from a decades-old regulation that has created a loophole, allowing these very large operations to not pay into the Class I pool” and “has to do with how all farmers are paid in Federal milk marketing orders.”The highest value milk is Class I, he explained, and that revenue is shared by bottlers with all dairy farmers in a given region, with the exception that some of these large bottlers, if they’re owned by a dairy producer, do not have to pay into the Class I pool, thus reducing the revenue available to all other farmers.

The proposal to close this loophole was sought by National Milk and the International Dairy Foods Association, according to Galen, but also seeks to maintain and even expand the loophole for smaller producer-handlers who “don’t really have the opportunity to disrupt milk marketing because they’re not of a sufficient size, but we do think that once you reach a certain size threshold and can fly with the big boys, you ought to be regulated in the same way.”

Some frame this effort as large corporations trying to control smaller competitors but Galen argued that a lot of these bottlers have grown so big that they’re bigger than plants that are paying into the pool.

“This is about producer revenue,” Galen said. “All that money that the producer-handlers don’t have to pay into the Class I pool means a lower blend price for all other farmers who don’t happen to be their own bottler.”“It’s about making certain that, when you get to a certain threshold a certain size that you are regulated the same as any other large bottler,” he concluded. “It’s not about regulating farms it’s about regulating the bottling aspects of these very large operations.”

Dr. Ray Nebel, Sr. Reproductive Management Specialist at Select Sires continues his series on sex sorted semen.

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Sustainability keeps coming up in topics of discussion in the dairy industry but the U.S. dairy industry has a long history of environmental stewardship, according to Peggy Armstrong of the International Dairy Foods Association (IDFA).

Speaking in Wednesday’s DairyLine, Armstrong said that “Research confirms that a commitment to sustainability is growing as a factor in consumers’ perception of dairy products and can influence their purchasing decisions. It has become an important issue to each segment of the fluid milk supply chain and the dairy industry as a whole.”

Recognizing the importance of sustainability to dairy, the Worldwide Food Expo 2009, North America’s largest food and beverage technology event, will launch a Sustainability Pavilion at this year’s show, Armstrong reported.

The Pavilion will feature services and products to help dairy food manufacturers and packagers meet the demand for sustainability and will highlight research, trends and best practices as well as feature the latest innovations in sustainable packaging and technology.

In addition to the pavilion, Armstrong said there is an exceptional line-up of sustainability sessions in Expo’s educational program. Sessions include sustainability as part of a business strategy, case studies of successful initiatives and quantifying sustainable measures.

“The guru of green business practices,” Joel Makower, will speak at the first Super Session, according to Armstrong. She reported that Makower is a well-respected voice on business, environment and the bottom-line, and has helped a wide range of companies align environmental goals with business strategy.

Worldwide Food Expo will be held October 28-31 in Chicago and features the newest technologies in equipment, packaging, ingredients and services. Sponsored by the American Meat Institute and IDFA, Worldwide Food Expo includes more than 900 exhibits and 50 targeted conference sessions and attracts approximately 20,000 attendees from 100 countries, bringing together decision-makers at all levels of the food and beverage industry. For more information, visit the show’s website at www.worldwidefood.com.

USDA has begun a public hearing on National Milk’s proposal to end the regulatory loophole enjoyed by a handful of the nation’s largest producer-handlers. The hearing may run for several weeks, depending on the volume of testimony generated by either those supporting or opposed to the petition.

More Dairy News Here

John’s topic this week: Take extra time to plan your future.

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Dr. Alan Britten asks the question, “are you dry treating all four quarters?”

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Cheese prices continued to weaken the first Monday in May, with blocks and barrels both slipping a quarter-cent, to $1.15 and $1.0850 per pound respectively, but Mary Ledman, Principal of Keough, Ledman, and Associates in Libertyville, Illinois, warned in Tuesday’s DairyLine that there’s likely more slippage to come in the blocks due to the 6 1/2-cent price difference.

“End users are looking for a reason to be bullish on this market and it’s very difficult to find one at this time,” Ledman said. Dairy cow culling has slowed tremendously the last four weeks, according to Ledman, since the announcement of the CWT herd removal program and dairy producers likely are “waiting for someone else to go out and not themselves.” She says it will be interesting to see what kind of signup CWT has this time.

The Agriculture Department reports that the spring flush is occurring or close to occurring around the country. Ledman added that, while producers are holding on to cows, per cow output is falling, something we rarely see, but producers are holding to cows to see if their neighbor is going to go out under the CWT and believe that will result in the market strengthening in the second half of the year.

The latest Milk Production report showed output down 0.3 percent but demand is not growing enough for supply and demand to come together and Ledman hastened to add that 0.3 percent is not a big slippage and “We really need to see a 1-2 percent slippage to make up for the loss of exports.”

Dr. Gary Neubauer continues his discussion on extended therapy, focusing on research.

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The topic of Success Strategies’ John Ellsworth podcast this week is staying ahead of the curve.

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Members of the Dairy Calf & Heifer Association (DC HA) discuss their dairy operations at the Dairy Profit Seminars hosted by Western DairyBusiness Communications.

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The Agriculture Department announced the April Federal order Class III milk price this morning at $10.78 per hundredweight (cwt.), up 34 cents from March but a whopping $5.98 below March 2008, and puts the 2009 average at $10.33, down from $14.78 at this time in 2008 and $14.73 in 2007.

Class III futures, as of Thursday’s settlements portend a setback in May to $10.08, rebounding to $10.77 in June, $12.30 in July, $13.22 in August, and a 2009 peak of $14.95 in December, eventually reaching $15.85 in July 2010.

The April Class IV price is $9.82, up 18 cents from March, but $4.74 below a year ago.

The four week NASS-surveyed cheese price averaged $1.2771 per pound, up 1.6 cents from March. Butter averaged $1.1665, up 3.76 cents. Nonfat dry milk averaged 81.95 cents, up fractionally from 81.66 cents, and dry whey averaged 19.49 cents, up 2.87 cents from March.