The U.S. Department of Justice and three states have filed an antitrust lawsuit against Dean Foods, challenging its 2009 acquisition of two milk processing plants in Wisconsin. Dairy Profit Weekly editor Dave Natzke reported in Friday’s DairyLine that the Justice Department has been joined by attorneys general in Wisconsin, Illinois, and Michigan in filing the lawsuit against Deans, the largest fluid milk bottler in the United States.

The suit challenges Dean’s 2009 purchase of two fluid milk plants from Foremost Farms, a Wisconsin-based dairy cooperative.

The complaint, filed in federal court in the Eastern District of Wisconsin, alleges the transaction will lessen competition in the region’s fluid and school milk markets. Court documents say the addition of the two plants has given Deans a 57 percent share of the fluid milk market in the region.

The suit requests Dean’s divest assets and interests it acquired when purchasing plants in Waukesha and DePere, Wisconsin. It also asked that Deans be required to give a 30-day notice when making future acquisitions.

Foremost Farms is not named in the suit, Natzke said, and has declined comment, saying it followed all laws and regulations related to the sale. Foremost with 2,300 dairy farmer members in seven states, continues to provide milk to Dean Foods through a supply contract, according to Natzke.

Deans said it will defend itself vigorously against the complaint, saying the transaction benefited Wisconsin dairy farmers by providing a stable and growing outlet for their milk, and produced cost savings for its milk customers.

The lawsuit is an outgrowth of antitrust policy changes since the Obama Administration took office. The Department of Justice and USDA have scheduled several public “workshops” beginning this spring to explore competition and regulatory issues in the agriculture industry and kick off with a general workshop in Iowa, in March, followed by a dairy industry workshop, set for June, in Wisconsin. The workshops will analyze agricultural markets nationally, and look at the discrepancies between the prices received by farmers and the prices paid by consumers, Natzke concluded

A coalition of 138 agricultural organization, including National Milk, have sent a letter to Senator Lisa Murkowski (R-AK) supporting her introduction of a resolution of disapproval under the Congressional Review Act regarding the decision of the Environmental Protection Agency to move ahead on regulating carbon dioxide and other greenhouse gases under the Clean Air Act.

National Milk’s Chris Galen said in Thursday’s broadcast that this is the next step in a process that began late last year when the EPA concluded that greenhouse gases are a danger to public health and moved forward with a process to regulate gas emissions like carbon dioxide and methane under the Clean Air Act.

The letter supports the prevention of EPA from doing this because these agricultural organizations believe the Clean Air Act is not the appropriate way to establish greenhouse gas policy and could lead to a variety of costly unintended consequences. He added that others, not involved in farming, also share such concern and do not favor creation of a carbon tax or anything similar.

The letter points out that the Clean Air Act was never really intended to deal with global warming or to mitigate greenhouse gases so there is no precedent for this, Galen argued, other than a few years ago the U.S. Supreme Court handed down a ruling stating that the EPA had the power to regular greenhouse gases.

Galen said they are trying to prevent that from happening and are concerned that another approach to this would be a “cap and trade” system but it doesn’t appear that Congress will move aggressively on that in 2010 but the main concern is making certain that the EPA doesn’t unilaterally move down a path of unintended consequences by regulating greenhouse gases using the Clean Air Act.”

The Beef Checkoff got high marks from another member of the dairy industry this week. Richard Silacci, who manages the dairy farm at Cal Poly, spoke in Wednesday’s “Beef Board Update” and discussed the emphasis on quality and how it applies to farmers.

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He said the checkoff provides education to the public regarding dairy cows and how they are managed.

“A lot of the news that consumers are seeing is usually negative and that winds up on television and radio,” Silacci said, “And with the check off dollars we see positive publicity.” Information as to what really goes on, on the farm is made known, he said, “and the good things we do that insure beef quality.”

The check off also educates farmers and that’s what is taught to student s at Cal Poly, according to Silacci. The farm milks about 170 cows of two breeds, Silacci said, and they teach students that, when giving vaccinations or injections, certain sites on the cow are better than others to improve the quality of the beef when the cow goes to the slaughter house and, in turn, is sold to consumers.

Students are also taught the opportune time to cull a cow, he said, so they don’t let a cow get to the point where she is “unhealthy looking and skinny.”

Sixty percent of U.S. schools have enrolled in the “Fuel Up to Play 60” campaign and Pennsylvania dairy producer and vice chair of the National Dairy Board, Paula Meabon talked about it in Monday’s “DMI Update. The campaign got some extra press at a January 15 news conference which announced the partnership of the USDA, National Dairy Council, and the National Football League.

In this week’s Success Strategies podcast, John Ellsworth talks about accomplishing your goals by seeing the outcome first.

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Alan Levitt, editor of the CME’s Daily Dairy Report said in Tuesday’s broadcast that we’re seeing an uneven recovery in the markets. They’re still unsettled, he said, and he expects ups and downs for the next couple months.

He didn’t see a big influence in Monday’s trading from Friday’s Cold Storage report. Cheese and butter stocks are well above a year ago and hang over the market and may the reason the recovery is uneven.

Another issue we’re dealing with, he said, is the fact that, even though milk production nationally was down more than a half percent in the second half of 2009, output in Wisconsin and Minnesota was actually up about 4 percent where most of the milk goes to cheese and is skewed toward American type. He warned that “We may not see those cheese stocks go down as quickly as we otherwise might, given where milk production is trending.”

Commenting on the drop in cash powder prices, Levitt said so much of that is based on what’s going on globally and the global markets have softened since December. In the last six weeks, cheese, butter, and powder prices are down 15-20 cents per pound and it seems like, once we got through the holidays buyers got into a pause mode, waiting to see what happens to the spring flush in the U.S. and Europe before buying too far ahead.

Sixty percent of U.S. schools have enrolled in the “Fuel Up to Play 60” campaign and Pennsylvania dairy producer and vice chair of the National Dairy Board, Paula Meabon talked about it in Monday’s “DMI Update.

DMI Update [ 0:01 ] Play Now | Play in Popup | Download

The campaign got some extra press at a January 15 news conference which announced the partnership of the USDA, National Dairy Council, and the National Football League.

The NFL brings “star power” to the program, Meabon said, and all 32 teams are engaged. “USDA’s stamp of approval makes it a great program to help the youth fight against obesity,” Meabon said, “And that’s what this program is all about. It’s for our kids.”

Students can choose from various activities such as a basketball club or a running club, a fitness program for 60 minutes a day. Nutrition guidance is also part of the program, she said, and dairy is a big part of that, along with fruits, vegetables, and whole grains. She called it a “win-win for our children.”

The kickoff of the program was last October, according to Meabon, and 40,000 schools were involved. Today it numbers 58,000 and growing, and she stated that “Schools must sign up themselves so it’s a commitment the schools are taking upon themselves for their youth.”

This week, Dr. Mark Kirkpatrick, dairy specialist with Pfizer Animal Health, discusses treating cows using systematic injection therapy.

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The Agriculture Department announced the February Federal order Class I base milk price this morning at $14.84 per hundredweight, down 19 cents from January but $4.12 above February 2009. The Class IV advanced pricing factor was the “higher of” in driving the Class I value and there will be no MILC payment to producers.

The two-week NASS-surveyed butter price averaged $1.3350 per pound, down 14.7 cents from January. Nonfat dry milk averaged $1.3201, up a nickel. Cheese averaged $1.5578, down 1.9 cents, and dry whey averaged 38.93 cents, up 2.6 cents from January.

The nation’s dairy processors gathered in Phoenix this week for the International Dairy Foods Association’s annual Dairy Forum. Dairy Profit Weekly editor Dave Natzke reported in Friday’s broadcast that, “Thanks to low milk prices that lowered input costs, 2009 was a much better financial year for many of the nearly 900 people representing manufacturing and processing sectors of the dairy industry attending this year’s forum. However, with the dairy price volatility that made dairy farmers winners in 2007 and dairy processors winners in 2009, there was recognition it’s time to “fix” the system.”

In her annual address, IDFA president and CEO Connie Tipton reviewed policies and politics affecting the dairy industry in this new decade. First on her list was government economic and social policies that negatively impact the business climate. Second was regulations and government mandates, especially in the area of food safety and labeling. Third was changes in diet and nutrition guidelines, including policies impacting federal and school feeding programs that could limit dairy.

Fourth was energy and environmental policies that will change dairy processes, marketing and business strategies, fifth, dairy policy “safety nets” and trade policies that limit dairy trade potential, and sixth, changes in consumer trends that will require increased innovation and consumer education.

Tipton warned federal agencies such as FDA, EPA and USDA will play a larger role in the dairy industry, Natzke reported, and regulate everything from greenhouse gas emissions to food safety to dairy ingredient standards.

The recent economic downturn has resulted in changes to consumer eating habits, Tipton noted, with more people eating a greater portion of their meals at home. Consumers are also more frugal, according to Tipton, and want more information on the source and health/wellness aspects of their food.

“Dairy has a good story to tell,” Tipton said, “And should promote itself better, while adjusting to the changing tastes and lifestyles of consumers.”

Dairy farmers, through their Cooperative Working Together (CWT) program will donate $100,000 to the American Red Cross to assist the aid and recovery effort in Haiti. National Milk’s Chris Galen reported in Thursday’s DairyLine that this crisis has little precedent in recent decades. Dairy farmers in the past have given generously to domestic and international relief efforts, Galen said, and, given the devastation in Haiti and no functioning government and very little infrastructure left standing, CWT believes that a cash donation to the Red Cross is the most effective way to help people there.

When asked if consideration was made for CWT to purchase dairy products and ship them to Haiti, Galen said, when one considers the sights on the news, and there being little to no government, food or water, electricity, or functioning port, it would be a challenge to get products down there. CWT is not a logistics organization, he said, so the best way is to make a monetary contribution.

“It will take months and years for Haiti to recover from this,” Galen said, “And at that point we can have a longer term conversation about how best to get dairy products to people there.” He pointed out that Haiti was a recipient of products sold through the CWT “so there is a relationship already between CWT and commercial dairy buyers in Haiti but the focus now in on the short term and we’ll see what happens longer term with respect to commercial export opportunities.”