DairyBusiness Update for Jan. 16, 2013


Solutions, dairy unity sought on immigration reform

With dairy policy reform on hold, the National Milk Producers Federation (NMPF) is ramping up attention on an issue affecting the day-to-day operations of many dairies – immigrant labor availability. And, even though the organization has been working on immigration reform with little success for the better part of a decade, current political will might make the timing right.

“There’s continued pressure from the business community – including agriculture – that our current ‘don't ask, don’t tell’ employment system is broken,” said Jerry Kozak, NMPF president and CEO. “All of these things are aligning to create a more favorable political climate. There is light at the end of this tunnel.”

NMPF hosted a conference call, Jan. 16, to discuss recent developments on the issue. Among those is the formation of the Agriculture Workforce Coalition (AWC), an organization seeking to ensure America’s farms, ranches and other agricultural operations have access to a stable and skilled workforce.” NMPF is one of 11 founding members of AWC.

Mike McCloskey, chair of the NMPF’s immigration task force, said solving the issue is critical to the future of the U.S. dairy industry – and to food supply and safety issues impacting consumers. Read more ...


Conditions aligning to improve odds of immigration reform 

Last November’s election results may have created the tipping point in immigration reform, even though there was no change in White House, Senate and House leadership, according to Craig Regelbrugge, co-chair of the Agricultural Coalition for Immigration Reform (ACIR). Regelbrugge provided information on the long-simmering issue during a Farm Credit East 2013 Dairy Outlook webinar, Jan. 16.

Regelbrugge said the situation provides a fresh opening to address immigration reform, offering agriculture the best odds since 2007. However, agriculture will not get its "dream” proposal, due to political partisanship and reality. There will likely need to be a compromise that agriculture, the farm worker advocate community and others can get behind.

Conceptually, a future immigrant worker program for the future would replace the current H-2A program, which many see as too flawed to repair. Preferably, the program application process would be moved out of U.S. Department of Labor (DOL) and into USDA.

A future program would ideally offer two options of importance to agricultural employers. Some employers and workers would prefer contract agreements, where there's a tie between the employer and worker. Others may need a portable visa option, where the worker comes in with an initial job offer, but can then either continue to work with one employer for the life of the visa, or move among employers.

“Dairy’s needs are foremost in our minds,” Regelbruge said. “Our goals would be to have a multi-year visa for dairy employees, which would allow a future worker come in for three years at a time. They might have to leave the country for a brief period of accumulated day every three years, but fundamentally we want an employee for the long-term work that exists in dairy.” Read more ...


AMS to increase voluntary plant inspection user fees

USDA’s Agricultural Marketing Service is proposing to increase the user fees for voluntary federal plant inspections and dairy product grading services, according to the International Dairy Foods Association. The proposal would increase fees by 15% beginning this spring and by another 5%beginning eight months later. 

Based on the projected volumes of dairy products covered by services during this time period, AMS estimates that increasing the fees will result in an overall cost increase of less than $0.0004 per pound of graded product to the industry. The last fee increase for dairy grading services became effective in 2006.

The proposal is scheduled to be published in the Jan. 17 Federal Register. Visit the Federal Register Inspection Desk on or after Jan. 17 to read the notice.  



CIH offers January dairy margin summary

Quarterly dairy margins were mixed over the first two weeks of 2013, weakening in nearby production periods, but strengthening in the second half of 2013, according to Commodity & Ingredient Hedging’s CIH Margin Watch report. Expected margins in the second half of 2013 remain strong by historical standards. 

A recent selloff in milk – compounded by the impact of a bullish USDA report for corn on Jan. 11 – combined to pressure nearby dairy profit margins. The corn stocks figure in particular was quite bullish relative to pre-report trade expectations. USDA pegged Dec 1 stocks at 8.03 billion bushels, 180 million bushels below the average trade guess, and below the range of estimates of between 8.05-8.45 billion. The figure suggests much stronger feed demand during the first quarter of the marketing year, and USDA raised their feed and residual estimate by 300 million bushels. The adjustment more than offset a 200 million bushel cut to exports, as well as a 55 million bushel increase to the production forecast, lowering ending stocks 44 million bushels and tightening the domestic stocks/use ratio to 5.3%.  Meanwhile, the soybean crush was raised due to higher soybean meal demand, with both exports and domestic use increased from December.

USDA also increased both the 2012 and 2013 milk production forecast due to the slower decline in cow numbers and greater output per cow. Butter and cheese prices were lowered for 2013 based upon current price weakness and slower demand. The figures kept pressure on milk futures which have been in retreat since the beginning of the year. 

Visit www.cihmarginwatch.com.


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