CWT announces herd buyout

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					       CDI                         Letter             February 2007

                          CWT announces herd buyout
                              On February 6th, Cooperatives Working Together (CWT)             • Producers who submit bids must be members of CWT
                          announced that it is accepting bids for its fourth herd retire-         as of January 1, 2007
                          ment program from now until March 3, 2007. Any producer              • Producers who were selected in a previous CWT herd
                          who wishes to be considered for the buyout must submit a                retirement programs are not eligible.
                          bid based on the amount of milk marketed from January 1,             • Producers who have a financial interest in more than
                          2006 to December 31, 2006. A calculator that can be used to             one dairy must include all cows from all operations in
                          assist in the development of a bid is available at http://www.          their bids.
                , clicking on the “Round 4 Bidding Open” link and            • CWT will not be announcing target numbers for
                          then opening the “Bid calculator” link. An application for the          herd retirements, cow removals or net milk marketing
                          herd retirement program can be accessed by opening the                  removals, unlike the three prior herd retirements.
                          "Bid application" link on the same page. If a producer’s bid is      The three herd retirement programs administered by CWT
                          accepted, the producer receives the specified bid in addition     have accounted for the removal of 147,000 cows and the
                          to the revenue generated by selling the animals for slaughter.    equivalent of 2.8 billion pounds of milk. Please contact your
                              There are some additional considerations for the buyout       CDI field representative for more information on the CWT
                          program.                                                          herd retirement program.

                          Understanding CDI, NMPF and CWT
                             Some uncertainty and confusion has surfaced as a result        discoveries, CDI reviewed its commitment and paid $0.10 per
                          of recent action by the CDI Board of Directors regard-            cwt. for July, August, and September and zero for October,
                          ing the National Milk Producers Federation (NMPF) and             November and December. The Board expressed concern that
                          Cooperatives Working Together (CWT). In short, CDI has            all participants in CWT were not being treated equally.
                          been and continues to be a participant in the CWT program             The Board approved a motion at the December 19, 2006
                          and is currently paying the $0.10 per hundredweight assess-       meeting to reinstate the $0.10 per hundredweight assessment
                          ment. However, participation in CWT does not require mem-         for CWT as of January 1, 2007 as long as 68 percent of the
                          bership in NMPF, and as of January 1, 2007 CDI is no longer       U.S. milk supply was participating in the program.
                          a member of NMPF.                                                     At the same meeting, the Board approved a motion to dis-
                             Last year, CDI had committed to participating in CWT at        continue its membership with NMPF as of January 1, 2007.
                          the $0.10 per hundredweight assessment rate for the period        The principal reason for withdrawing from NMPF is that CDI
                          July 2006 through December 2006 with the stipulation that         has its own lobbyist group, Arent Fox, in Washington, D.C.
                          70 percent of the U.S. milk supply must participate at the same   Because of the diversity in their membership, NMPF would
                          level for that time period. However, CDI later discovered that    be unable to focus exclusively on the issues that CDI consid-
                          the 70 percent threshold had not been achieved and that there     ers essential. This may be particularly important as the 2007
                          were several participants who were continuing to be assessed      Farm Bill is developed over the next several months.
                          less than the $0.10 per hundredweight level. In light of these

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   Page 2 • February 2007                                                                                                        CDI Letter                CDI Lett

                                  Dairy CARES Report                                                                                                         MO
  Management beats monitoring for protecting water quality                                                                                                      Febr
     As we’ve reported for the last several months, CARES coalition        ing those “tentative” rules and issuing a more “final” draft, probably            Class 1
  members remain closely engaged as water quality regulators continue      near the end of March or early April. Following a mandatory period                Class 2
  to develop new rules for Central Valley dairies. The Regional Board      that is reserved for the submission of additional public comments,                Class 3
  has now closed the public comment period for the version of the          the Regional Board plans to adopt the final rules this coming May.                Class 4a*
  rules that were released in November 2006. The next steps are revis-          Working with a team of experts that includes engineers, profes-              Class 4b
                                                                           sional agronomists and former Regional Board staff, CARES coalition

                          News Briefs                                      members have identified and proposed dozens of technical sugges-
                                                                           tions that allow the Regional Board to continue to meet its goals, but            Quota
                                                                           also should reduce costs for dairy operators. However, these suggest-             Overbas
      ▲        At the World Ag Expo in Tulare, Western DairyBusiness
               magazine honored Outstanding Dairy Producer Doug            ed changes to improve the cost-efficiency of the rules only go so far.
               Maddox of RuAnn Dairy and Maddox Dairy. Doug                     CARES coalition members support good dairy design and best
               has been an ardent supporter of the dairy industry and      management practices to protect water quality. Unfortunately, the                 Quota
               has served in many state and national organizations,        most costly portions of the proposed rules actually do very lit-                  Overbas
               including the Holstein Association USA, the California      tle to improve water quality. That’s because a large portion of                    Comm
               Holstein Association, California DHIA and national          these costs are associated with sampling, analysis and reporting
               DHIA. Congratulations to Doug and the Maddox family         on the quality of groundwater, irrigation water (both from wells                  1/26
               for a well-deserved honor!                                  and tailwater) and lagoon water. While some of these costs are                    2/2
      ▲        On February 1, USDA Secretary Mike Johanns was in                                                                                             2/9
                                                                           necessary for proper nutrient management, many of the pro-
               Modesto to explain USDA’s proposal for the 2007 Farm                                                                                          2/16
               Bill. While it is Congress that writes the farm bill and
                                                                           posed sampling requirements are excessive, costly and misdirected.
                                                                                Monitoring, especially groundwater monitoring, will provide                  2/23
               not USDA, the proposal was consistent with the general
               message and direction laid out by President Bush. The       little useful information in most cases. For the most part it tells
               emphasis in USDA’s proposal for the 2007 Farm Bill          us what we already know – that good nutrient management
               steers away from the traditional commodity crop pro-        is necessary to prevent over-application of nutrients. CARES                      1/26
               grams (such as corn, sorghum, oats, wheat, sugar and        coalition members believe strongly that a dollar spent on bet-                    2/2
               dairy) and places much more emphasis on conservation,                                                                                         2/9
                                                                           ter management does more for water quality than creating a
               renewable energy, research, trade, nutrition, and rural                                                                                       2/16
                                                                           costly monitoring “research project” on every dairy in the valley.                2/23
               development.                                                     CARES coalition members have supported environmental
      ▲        Another BSE-positive animal (this time a mature bull) has
                                                                           monitoring in cases where it is needed, and will produce use-
               been confirmed in Western Canada, bringing the total to
               nine animals since May 2003.                                ful results. However, it is important that the Regional Board pri-                1/26
      ▲        Dry whey prices have skyrocketed since July 2006,           oritize when asking dairy operators to invest in improving opera-                 2/2
               which seems to be explained, in part, by exports of dry     tions. Given the high cost of environmental monitoring, especially                2/9
               whey. In particular, exports of dry whey to Pacific Rim     groundwater monitoring (as much as $30,000 in installation costs                  2/16
               countries have gone off the charts as the economies         and up to $10,000 per year in monitoring and reporting costs),                    2/23
               in those countries continue to boom. These economic         the Board should weigh carefully whether blanket monitoring at                      Nonf
               prosperities have allowed for tremendous expansions in      all dairies is really money well spent. CARES believes that the
               each country’s pork industry, and dry whey has been a                                                                                         1/26
                                                                           dairy operator’s limited resources are best invested where they                   2/2
               favored source of feed because of its high carbohydrate     will produce results. Management, not monitoring, is the best
               content. Also, the generally weak dollar has not hurt                                                                                         2/9
                                                                           way to get water quality “bang” for the dairy operator’s “buck”.                  2/16
               export demand for dry whey and other dairy exports.

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 I Letter          CDI Letter                                                                                                            Page 3 • February 2007

                        MONEY TALK                                                             Quality
                                                                               What the top milk

                                   MILK PRICES
 ty                         February (So. California)
  t, probably
  ory period
                         Class 1
                         Class 2
                         Class 3
                                                        vs. 2006
                                                                               quality farms do
                                                                          Each year, dairy farms from across the country are entered into the National Dairy
oming May.               Class 4a*            12.22*        10.58     Quality Awards program. Several CDI herds have been entered over the years. This
ers, profes-             Class 4b*            13.16*         11.14

                                                                                                                                                                   By Larry Collar
                                                                      program has successfully identified and publicized those farms with a record of con-
ES coalition                               January                    sistently excellent milk quality.
 cal sugges-                                 2007*      vs. 2006          Annually, the winners are interviewed and their responses are printed in the
 s goals, but            Quota                13.71          13.91    Hoard’s Dairyman magazine. If you would like to know what the top 33 farms in
  se suggest-            Overbase             12.01          12.21    this year’s contest do to achieve consistently high quality milk, a summary of their
 y go so far.                              February                   programs is listed below.
 n and best                                  2007*      vs. 2006
unately, the             Quota                14.40         12.75             Practices                       Number of Herds out of 33
 o very lit-             Overbase             12.70         11.05             Have freestalls                                        23
  portion of              Commodity Prices • Butter                                   Use sand bedding in freestalls                  14
d reporting                                   2007      vs. 2006              Have drylot corrals                                      1
 from wells              1/26                 1.2475         1.3115           Have written milking procedures for workers             12
e costs are              2/2                  1.2380        1.2510            Milkers wear plastic gloves                            26
 f the pro-              2/9                  1.2265        1.2145            Routinely forestrip/prime before attaching machine     30
misdirected.             2/16                  1.2135       1.1770
                                                                              Use paper towels                                        17
 ill provide             2/23                1.2100*        1.1575
                                                                              Use cloth towels                                        16
part it tells                        Cheese (Block)                           Predip                                                 30
 anagement                                   2007       vs. 2006              Postdip                                                 33
  s. CARES               1/26                1.3040         1.2865
                                                                              Dry cows
nt on bet-               2/2                  1.3330        1.2395
                                                                                      Dry treat                                       33
                         2/9                  1.3495        1.2385
  creating a                                                                          Vaccinate                                      10
                         2/16                 1.3285        1.2025
   the valley.           2/23                1.3175*        1.1506                    Use barrier dip                                  9
 ironmental                          Cheese (Barrel)                                  Use internal teat sealant                       15
oduce use-                                   2007       vs. 2006              Use herd mastitis vaccination                           14
  Board pri-             1/26                 1.3245         1.2515           Culture milk samples                                   22
  ing opera-             2/2                 1.3520         1.2100            Troublesome mastitis pathogens are
    especially           2/9                  1.3730        1.2100            Environmentals                                          12
  ation costs            2/16                 1.2965        1.1800            Strep species                                            7
 ting costs),            2/23                1.2875*        1.1300
                                                                              E coli                                                   7
  nitoring at               Nonfat Dry Milk • CWAP                            Staph aureus                                             2
es that the                                    2007     vs. 2006
                         1/26                  1.0525       0.8883
where they               2/2                   1.0433       0.9123       Milkers wearing plastic gloves, routinely priming before attaching milk machines,
 s the best              2/9                   1.0581       0.8339    predipping, postdipping and dry treating all cows at dry-off are all good management
  r’s “buck”.            2/16                1.0600*        0.8673    practices that every dairy should adopt.
                         2/23                 1.0625*       0.8363

                 Singles Feb 2007.indd 3                                                                                                                       2/16/07 4:40:36 PM
   Page 4 • February 2007                                                                                                    CDI Letter

         Congratulations!                           CDI Board approves policies
           CDI TOP QUALITY
                           JOHN BOS                  on rBST and cloned cows
             SPC-813; LPC-8; COLI-8;                   After considerable discussion and      treated with rBST. The handling charge
          SOMATIC CELL COUNT - 50,000               debate, the Board of Directors passed     will depend on several factors, includ-
                                                    motions on rBST and milk from cloned      ing the location of dairies, the location
            TOP FIVE PRODUCERS                      cows at the Board meeting held on         of processing plants and volume of
                BY DISTRICT                         January 23, 2007. These actions will      milk to be transported. At this time, an
                                                    allow the cooperative to continue to      estimate for the handling charge has
                           District 1
                                                    service the marketplace efficiently and   not been developed.
    Koot Dairy #2, Frank Konyn Dairy,               profitably.
   Raymond Bachoc Dairy #3, JDS Dairy,                                                           The Board also approved a motion
       George Borba & Son Dairy                        As of August 1, 2007 CDI will not to not accept milk from cloned cows.
                           District 2               accept milk from cows treated with This action is effective immediately.
    Lou-Mar Dairy, Twin River Ranch,                rBST. Furthermore, all cooperative Again, this board action took into
 Louie de Groot Dairy, Jake Koetsier Dairy,         members will be asked to sign docu- account the many requests from CDI’s
             Van Ryn Dairy                          ments indicating that they are not using customers who are trying to provide
                           District 3               rBST on their cows. Those members milk and dairy products consistent with
A.P. Mattos & Sons, Inc., Richard Simas Jr., A.P.   who do not wish to sign the agree- the prevailing consumer opinion.
Mattos & Sons, Inc. #2, Shein Ranch, De Groot       ment may continue to use rBST under         If you have any questions about
                     Dairy                          the condition that they will pay CDI the two actions taken by the Board,
                           District 4               a handling charge to move milk into please contact Richard Cotta at (209)
 Ed & Lorie Machado #2, 6 D/Dores Dairy,            a market that accepts milk from cows 826-4901.
  Nelson Dairy, Antone L. Gomes & Sons,
           Joe & Renee Barroso

                                                                                                                 Visalia, CA 93291
                                                                                                               2000 N. Plaza Drive

              PERMIT NO. 33
              U.S. POSTAGE
            FIRST-CLASS MAIL

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