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April 2014 Archive for Dairy Talk

RSS By: Jim Dickrell, Dairy Today

Jim Dickrell is the editor of Dairy Today and is based in Monticello, Minn.

Raw Milk Doubles Dairy Illness Outbreaks from Campylobacter

Apr 21, 2014

Raw milk falls into the late Sen. Daniel Patrick Moynihan quote category: "Everyone is entitled to his own opinion, but not to his own facts."

At the Upper Midwest Dairy Industry Association meeting earlier this month here in Minnesota, it was reported that Campylobacter jejuni outbreaks have doubled over the last three or four years compared to outbreaks the decade previous to that. The reason: The increased consumption of raw milk, says Francisco Diez-Gonzalez, a professor of food science at the University of Minnesota. The national Centers for Disease Control have the data to back that up, he says.

Along with Campylobacter, raw milk is also among the main sources of contamination by Salmonella, Listeria monocytogenes and even E. coli 0157:H7, says Diez.

Prior to pasteurization, outbreaks of food-borne illness were caused by dairy products nearly a fourth of the time, says the Mayo Clinic (also based here in Minnesota). Since pasteurization has been required, dairy products account for just 1% of food borne illness. But here’s the kicker: Of the recent dairy outbreaks, raw milk accounts for 70% of the illness.

Despite this indisputable evidence that raw milk increases health risks, proponents of raw milk continue to push for more liberalized sales. Food Safety News reports that 40 separate bills were introduced in 23 states during the current legislative sessions to change raw milk rules. Thankfully, few, if any, actually passed.

The debate is even playing out at dairy co-op annual meetings. At the Associated Milk Producer, Inc. annual meeting last month, AMPI’s resolutions committee tried to delete a raw milk resolution. The resolution is stoutly opposed to raw milk sales, but it includes a line that implies current laws should only be changed "when appropriate."

One delegate stood up and passionately argued to keep the resolution on the books. Current Minnesota law allows farmers to sell raw milk directly to consumers for their own use. Doing away with the law, argued the delegate, would interfere with his "freedom to operate." No one challenged this dubious logic, and the motion to delete failed on both voice and ballot votes.

There’s a tremendous economic incentive to sell raw milk directly to consumers, who are willing to pay $5 or more per gallon. That can easily translate to $50/cwt. But "freedom to operate," under any rational definition of the phrase, does not allow farmers to sell products that can sicken and even kill their customers or tarnish the hard-won reputation of dairy products as safe, wholesome, nutritious food.

When it comes to our babies, our kids and our elderly, "buyer beware" is not a label we should be attaching to any food, let alone any dairy product. Remember, 70% of recent dairy illness outbreaks come from raw milk, though they account for only a tiny fraction of total dairy sales.

Dairy products are already under siege from vegans and anti-animal activists. Dairy farmers shouldn’t help them by advocating—and selling—raw milk.

A Federal Order in California Raises Tons of Questions

Apr 07, 2014

A new analysis by a dairy economist with the University of Illinois tells a tale of caution.

A new Federal Milk Marketing Order for California has been held out as the salvation for producers there, beleaguered by less-than-competitive pay price minimums established by their state order. But a new analysis by John Newton, a dairy economist with the University of Illinois, tells a tale of caution.  

California producers need to go into such a change with their eyes wide open. The cure might not be any better than the disease, and if the new order is designed badly, could be worse. At the very least, it could create unintended consequences that could reverberate within the state with the force on a mild earthquake.  And dairy farms across the country could be jolted by its aftershocks years afterwards.

Currently, the disparity in California and Federal Order pricing mechanisms means California producers often receive a lot less than farmers who market milk under Federal Orders. Much of that comes from the disparity between California 4b cheese prices and Federal Order Class III prices, which can differ by as much as $3.63/cwt. The average difference has been $1.43 from 2010 to 2013, says Newton.

And much of that comes from whey prices. California’s system caps the whey contribution to 75¢/cwt. The Federal Orders have no caps. During 2013, whey values contributed $2.30/cwt to the Class III price.

If the Federal Order system of price formulas is adopted, California farm prices would likely rise. "Thus, if higher prices paid by California cheese processors manifest along the supply chain, cheese makers could become less competitive in milk procurement and product sales," says Newton. That, in turn, could cause a change in milk processing away from cheese into other products.

Already, with either brilliant foresight or a simple reaction to world markets, Hilmar Cheese is breaking ground on a new whole milk powder plant. Dairy Farmers of America is already producing whole milk powder in its Fallon, Nev., plant, which is just a hop, skip and jump over the Sierra Nevada Mountains from California.

Perhaps the bigger problem is California’s quota, reportedly worth more than $1 billion. It currently contributes as much as $1.70/cwt. to quota owners. It’s not at all clear how quota would be handled under a new Federal Order in California, since no other state has had the same type of system. Like all things involved with Federal Orders, it gets quite complicated quite quickly. But the bottom line is this: Quotas could mean fewer dollars available for non-quota milk being shipped to pooling plants.

And then there’s the issue of pooling, i.e. when plants participate in the program and when they are allowed to "depool."California’s state program has stricter pooling rules than Federal Orders. If less stringent rules are written into the California’s Federal Order, they could allow plants to jump out of the pool more easily when prices are favorable for such a move. That, in turn, would mean less dollars available, which mean farmers still shipping into the pool would receive less.

The bottom line in all of this is California dairy farmers and their co-ops will have to carefully study these new rules before voting in a Federal Order. Even then, predicting outcomes in the complexity of national and global milk markets offers no certainty.

Yes, Federal Orders can be amended if things aren’t done correctly. But that process is arduous—even more arduous than the California’s state order amendment process. And the outcome can be just as uncertain.

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