Market Reports 2

National Dairy FARM Program quantifies

broad use of best practices

Mark Looker steps down as WUD’s communications director

Watch mailbox for groundwater monitoring program nomination forms

3

Hay Report

November workshops help North Coast dairies comply with water quality deadline

State ag board discusses drought, ground-water issues November 4

4

Inside this issue:

USDA extends Dairy Margin Protection Program to Dec. 15

Farmers now have until Dec. 15, 2014, to enroll in the Dairy Margin Protection Program, estab-lished by the 2014 Farm Bill. The program provides financial assistance to participating farm-ers when the margin – the difference between the price of milk and feed costs – falls below the coverage level selected by the farmer.

Producers can use the online resource at www.fsa.usda.gov/mpptool to calculate the best levels of coverage for their dairy operation. The USDA also extended the opportunity for public com-ments on both the Margin Protection Program and the Dairy Product Donation Program until Dec. 15, 2014. Comments can be submitted to USDA via http://go.usa.gov/GJSA.

WUD’s Marsh to participate in Dairy

Commodity Forum Nov. 5 in Fresno

Michael Marsh, CEO of Western United Dairymen, along with Joel Karlin with Western Mill-ing and Scott Brown, University of Missouri, will participate in a special forum highlighting the latest on commodity markets as it relates to the dairy industry at the 33rd Annual Agribusiness Management Conference, Nov. 5 in Fresno.

The three-member panel will examine the 2015 dairy market outlook, with a focus on alfalfa hay prices, the impact of the drought in Western states, the future of the milk pricing system in California. With exports accounting for more of the California dairy market, the panelists will offer an update on the dairy export picture and examine how the evolving Chinese dairy market might impacts California dairy production and pricing trends. Of particular interest will be discussion of the new risk management program unveiled earlier this year by USDA. The Dairy Margin Protection Program provides financial assistance to participating farmers when the margin – the difference between the price of milk and feed costs – falls below the coverage level selected by the farmer.

Immigration, drought, and food safety are among the topics of focus at the event to be held at the Fresno Hotel and Conference Center, hosted by the Center for Agricultural Business (CAB.) The program begins at 8 a.m. with an economic outlook session, followed by immigration reform update. A panel will discuss the California drought including its economic impacts, ground wa-ter assessment and current regulatory obstacles. Industry experts will also review food safety risks and mitigation. Special guest, George Soares, managing partner of Kahn, Soares & Con-way, LLP, will speak during the event lunch.

For registration details and more information call 559-278-4405 or register online at www.csufcab.com.

HSUS creates animal cruelty whistleblower hotline

The Humane Society of the United States (HSUS) has set up a hotline encouraging whistle-blowers to report animal cruelty at farms, livestock auctions and slaughterhouses, the organiza-tion said in a news release. HSUS is offering as much as $5,000 for information that could prompt arrests and convictions of people abusing farm animals.

The organization said it launched the hotline after Idaho became the seventh U.S. state to en-act an “ag-gag”law to criminalize undercover investigations of agricultural facilities.

October 31, 2014

WEEKLY UPDATE

W e e k l y U p d a t e d e l i v e r y o p t i o n s

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Save the Dates!

Western United Dairymen Annual Convention

March 18-20, 2015

Tenaya Lodge in Yosemite For more info, please visit:

www.WUDconvention.com

Tenaya Lodge and Ascent Spa named by USA Today as one of the “World’s Best Wellness Resorts”.

*Actual announced prices are in BOLD, estimates are in Italics

Commod ity M ar kets : CME – Ca l i forn ia P la nts

Est imate d* Producer CW T . Pr ices

PAGE 2

What’s up and what’s not—your weekly market update By Annie AcMoody, MS, Director of Economic Analysis

Well…they did it again! Another year, another

win by the Giants. While that gives fans plenty

to celebrate this week, dairy commodities added

some positive news to the already festive week. First,

butter prices halted their nerve racking descent, and

even managed to muster enough strength to climb back

up a little. The price went as low as $1.77/lb Tuesday (the

lowest since February), but progressively added value to

reach $1.89/lb Friday, up 8 cents from last week. It is too

early to tell where the market will settle, but losing more than a dollar in a few weeks certainly

helped to perk up buyers’ attitude. A total of 20 loads traded hands this week at the CME.

After a week of decline, stability was welcomed in the block cheese arena. A drop of 4 cents oc-

curred Tuesday and it took until Friday to make up the loss, bringing the price back to $2.14/lb.

Only six loads traded hands throughout the week. Barrels on the other hand were shooting for the

sky: the gain of 18.75 cents to $2.11/lb brought back the typical spread between blocks and barrels

(3 cents). Good seasonal demand is battling against good domestic product availability and in-

creasing international product competition to keep prices where they’re at. The latest DMN price

survey for Oceania Cheddar pegged the average price at $1.79/lb. Not only are global cheese prod-

ucts making their way across our border, the price difference makes it harder for U.S. exporters to

market cheese overseas. And if that wasn’t enough, the U.S. dollar has been strengthening, mak-

ing our products relatively more expensive. It has particularly gained ground on the euro. While

this may sound negative, one has to keep in mind the reasons behind the strengthening, which

includes a growing confidence in the U.S. economic recovery. This should ultimately be a good

sign for dairy consumption.

Watching the rain fall today was definitely more exciting than Western dry whey price news. The

price remained unchanged for the third consecutive week, leaving the price at 59.75 cents per

pound. This means the dry whey price is now below the highest bracket in the Class 4b dry whey

scale; dry whey will therefore generate 6.25 cents less in the Class 4b formula than last month.

DMN continues to point to a disappointing outlook, with “market participants [reporting] the

market has a weaker undertone developing as U.S. prices, which are higher than world prices,

are limiting export opportunities.” In August, which is the latest data available, 55% of the U.S.

dry whey was exported. This compares to 63% at the same time a year ago.

The California nonfat dry milk price continued its up and down pattern, this week recording a

small change on the downside: the price decreased 0.95 cents, to $1.4939/lb.

(Continued on pg. 3)

Average AA Butter NFDM 40# Blocks Barrels Dry Whey

September $2.9341 $1.4742 $2.3577 $2.3733 $0.6344

October $2.5251 $1.4788 $2.2157 $2.1131 $0.6020

November $1.8400 $1.4939 $2.1260 $2.0345 $0.5975

October 31 $1.8900 $1.4939 $2.1400 $2.1100 $0.5975

Week to date 8 cents 0.95 cents - 18.75 cents -

Month Class 1 4a 4b Overbase Quota

September $25.39 $22.72 $22.39 $22.45 $24.15

October $26.10 $21.05 $20.94 $21.36 $23.06

November $24.34 $18.30 $19.93 $19.85 $21.55

USDA Dairy Market News

Butter 20 sales, 2 bids unfilled, 1 offer uncovered. Butter prices gained 8 cents this week. Butter prices fluctuated throughout the week on an unsettled market. Some buyers are actively placing holi-day print orders, while others are shopping around and are optimis-tic prices could fall further. Export orders remain at light levels. Con-tacts indicate butterfat imports continue to make their way to the U.S. Butter manufacturers are linking production strongly with orders, and disinclined to build stocks.

Cheese 6 sales, 3 bids unfilled, 1 offer uncovered. Block prices did not change this week. Manufacturing cheese and getting it to stores to meet end of year holiday de-mand, is an increasingly active interest of manufacturers and buyers. Cheese manufacturers have adequate milk supplies and production is generally steady. Some plants are operating at capacity. Manufacturers are con-scious of balancing schedules and orders to keep inventory controlled. Some manufacturers expect order interest to increase in early November, when convert-ers typically accelerate preparing bulk cheese for retail sale.

Milk Production Milk production in CALIFORNIA is steady to higher as cooler tem-peratures support cow comfort in the region. However, on the feed side of milk production, availabil-ity of supreme quality dairy cow alfalfa is tight. Recent sales for delivered, in-state or out-of-state dairy cow alfalfa hay ranged from $320 to $350/ton. Dry cow hay prices run from $220 - $235/ton, delivered. Operators report proc-essing plants are operating below peak levels.

Dry Products Prices for Western low/medium heat nonfat dry milk moved lower on the full range and on the bot-tom of the mostly price series. A few manufacturers took opportu-nities to lighten inventories built earlier in the year to steady inter-est. Market participants indicate more transactions are ongoing within the resale community. Discussions for 2015 contracts are ongoing. Buyers voiced con-cerns about potential elimination of some contract bases.

Source: USDA Dairy Market News

October 31, 2014 Weekly Update

PAGE 3 October 31, 2014 Weekly Update

(Continued from pg. 2– Market Update) This price is in the middle of the range we have been experiencing lately; since the first week of September, the price has hovered between $1.42/lb and $1.60/lb. DMN Western states’ price average resumed its descent, losing 2 cents to $1.3750/lb. With all these price changes, the California overbase price outlook for November is now looking quite different. Unfortunately, it means that it is likely to dip under $20/cwt for the first time this year. Still, ten consecutive months at $20.71/cwt or higher was a great run.

Feed prices remain low but December corn futures continued to move up this week, gaining 23 cents from last week to settle at $3.76/bu today. The latest Crop Progress data points to 46% of the nation’s corn has been harvested. This compares to 65% for the five-year average at this time of year. The price was certainly not pushed up by candy corn demand (because really, who likes that stuff anyway?), but likely fueled somewhat by the delayed crop. Domestic corn demand remains strong, especially on the cattle feed-ing side.

National Dairy FARM Program quantifies broad use of best practices

Dairy farmers nationwide continue to demonstrate widespread adoption of industry standards that assure high-quality care for their animals, according to a report released by the National Milk Producers Federation (NMPF). Overall, according to the report, participation in the FARM Program increased to more than three-quarters of the nation’s milk supply, up five percentage points from the previous year. The summary report, issued annually, quantifies practices by farmers participating in the industry’s respon-sible care program, known as the National Dairy FARM Program (Farmers Assuring Responsible Management). The report found nearly 95% of farms enrolled in the program train their employees to properly move animals that cannot walk, and more than 98% train employees to handle calves with a minimum of stress. Other findings included:

99% of farms observe animals daily to identify health issues for early treatment;

93% develop protocols with veterinarians for dealing with common diseases, calving and animals with special needs;

92% train workers to recognize the need for animals to be euthanized.

At the same time, the report found some areas still need improvement. For example, 84% of farms in the program have a valid vet-erinarian-client relationship, and 84% also conduct annual training in animal care for employees.

However, both of these areas have shown an increase in industry adoption, up from 80% and 83%, respectively, since the first an-nual report two years ago.

Mark Looker steps down as WUD’s communications director

Long-time communications consultant Mark Looker is leaving WUD to pursue an expanded communications consulting role with the Almond Board of California.

Looker commented, “My consulting work with the Almond Board of California has grown tremendously over the past several months as the drought has increased media attention on the almond industry. In short, there are not enough hours in a day for me to provide my communication services to both WUD and the Almond Board and I had to make the tough decision to focus solely on my almond contract. I will continue to live in Modesto and, of course, be active in ag communication efforts in the San Joaquin Val-ley – just with more of a focus on trees than cows!”

Looker began providing communication consulting services to WUD in 1999. He noted, “I’ve written approximately 7,800 stories over those 15 years for the Weekly Update, not to mention various press releases and newsletters, and now, of course, Facebook posts and Tweets! So I have made my fair share of mistakes but hopefully always acted quickly to correct them.”

He thanked the WUD staff and directors for their support over the years. “Western United Dairymen is highly respected throughout the country as the go-to source for accurate, trusted information,” he said. “It’s been my privilege to be part of this highly respected organization. California dairy families are well served by this dedicated team of hard working individuals. I will miss them.”

Looker’s role will transition to Beth Sequeira who will begin providing communications services for Western United Dairymen effec-tive Nov. 1. Beth can be reached at basconsulting@outlook.com or by phone at 559-852-3990.

Watch mailbox for groundwater monitoring program nomination forms

The Central Valley Dairy Representative Monitoring Program (CVDRMP) is seeking nominations for candidates for election to the CVDRMP Board of Directors. All CVDRMP members in good standing will soon receive a nomination form and instructions by U.S. mail; nomination materials were mailed to CVDRMP members on Friday, Oct. 24.

A total of six seats are open for election or re-election, one for each of the five CVDRMP Districts and one at-large seat.

A CVDRMP member may nominate himself/herself or any other CVDRMP member as a candidate within any given district. All nominations must be received at the CVDRMP office no later than Nov. 21, 2014. Following the close of nominations, the election for CVDRMP Board members will be held by mail-in ballot in December 2014.

CVDRMP is a not-for-profit association of dairy owners and operators, organized for the sole purpose of conducting a cost-effective groundwater monitoring program on behalf of its members. CVDRMP is governed by 12 elected directors serving two-year staggered terms, with half the seats up for election or re-election each year.

Directors elected this year will serve from January 2015 through January 2017.

More information about CVDRMP as well as a downloadable nomination form is available at www.DairyCares.com/CVDRMP.

PAGE 4

November workshops help North Coast dairies comply with water quality deadline

CDQAP will host free educational workshops to further assist dairy producers in complying with North Coast Regional Water Qual-

ity Control Board (RB-1) water quality rules. Dairy farms within the RB-1 region currently operate under one of three water quality

permits, which were adopted in January 2012. ALL dairy producers -- regardless of which RB-1 permit they are covered by -- are

encouraged to attend these classes. The free one-stop-shopping producer-friendly workshops will largely focus on the completion and

submission of the second Annual Report, due on November 30, 2014.

The workshops are offered on a first-come, first-served basis. Advance reservations are not required. Ferndale location: 9:30 a.m. -

12:30, Tuesday, November 6 (note the change from Nov. 4 to Nov. 6, and only one class), at Ferndale City Hall 834 Main Street,

Ferndale.

Rohnert Park location: 9 a.m. - 12 noon Wednesday, November 5, 4-H Center, 6445 Commerce Boulevard, Rohnert Park. For more

information on the workshops call (209) 525-687.

November meetings set on CDFA’s Dairy Digester Program

CDFA is developing a new program, the Dairy Digester Research and Development Program, authorized by the Budget Act of 2014.

CDFA was appropriated $12 million dollars from the Greenhouse Gas Reduction Fund to provide financial assistance for the instal-

lation of dairy digesters in California which will result in reduced greenhouse gas emissions. The program will be administered in

two phases. An estimated $11 million in competitive grant funding will be awarded to provide financial assistance for the implemen-

tation of dairy digesters that result in reduced greenhouse gas emissions and provide other environmental benefits (Phase I). An-

other estimated $500,000 will be made available for research and demonstration projects that improve the economic performance of

dairy digesters (Phase II). Three public stakeholder meetings have been scheduled in November 2014 to explain the new program

and to receive comments and suggestions. The schedule is as follows:

Thursday, Nov. 6, 2014, 2:30 p.m.-5:30 p.m., University of California Cooperative Extension Stanislaus County, Room: HI, 3800 Cornucopia

Way, Modesto.

Monday, Nov. 10, 2014, 1 p.m.-4 p.m., University of California Cooperative Extension Tulare County, 4437 S. Laspina Street (across from

World Ag Expo), Tulare

Thursday, Nov. 13, 2014, 1 p.m. – 4 p.m., CDFA Auditorium, 1220 N Street, Sacramento. The meeting on Nov. 13 will include a webinar to

allow remote attendance.

State ag board discusses drought, groundwater issues Nov. 4

The California State Board of Food and Agriculture is bringing together state and federal offi-

cials to discuss drought planning and implementation of the California Water Action Plan. The

meeting will be held on Tuesday, Nov. 4, from 10 a.m. to 3 p.m. at the California Department of

Food and Agriculture, 1220 ‘N’ Street – Main Auditorium, Sacramento. As a result of the ongo-

ing drought, California has lost more than 17,100 seasonal and part-time jobs in the agricul-

tural sector, 428,000 acres (or 5 percent) of irrigated cropland has been fallowed and the state-

wide economic loss is estimated at $2.2 billion. Out of California’s 12 major reservoirs, eight

are at or below 30 percent capacity and all are below historic averages, including the state’s

largest reservoirs Shasta Reservoir (24 percent) and Lake Oroville (28 percent). San Luis Res-

ervoir, a critical resource for the Central Valley and Southern California is currently at 20 per-

cent capacity.

The meeting will be streamed online at: http://www.cdfa.ca.gov/LiveMediaStream.html

Join us at Tenaya Lodge in Yosemite - WUD Annual

Convention - March 18-20, 2015

Enjoy the spectacular views and picturesque sur-

roundings of Tenaya Lodge in Yosemite for the largest

dairy-focused trade show and convention in Califor-

nia. While taking part in WUD’s Annual Convention,

you’ll have the unique opportunity to visit the spec-

tacular alpine grandeur at Yosemite National Park.

Don’t miss out on this unforgettable convention loca-

tion!

For more information, visit: www.WUDconvention.com.

Tenaya Lodge and Ascent Spa was named by USA Today as one of the "World’s Best Wellness

October 31, 2014 Weekly Update

Hay & Grain Report

All prices FOB Unless noted as (DEL)

USDA Market News 10/31/2014

Region 1: North Inter-Mountains

Tons Wtg.

Supreme 50 280.00

Fair 500 225.00

Region 2: Sacramento Valley

Supreme 75 290.00

Premium/Supreme 125 250.00

Premium 226 220.00

Good 105 192.00

Region 3: N. San Joaquin Valley

Supreme (DEL) 500 350.00

Premium/Supreme (DEL) 1000 320.00

Fair 1000 190.00

Region 4: Central San Joaquin Valley

Premium (DEL) 400 325.00

Region 5: S. California

Nothing to Report

Region 6: S.E. California

Good 200 180.00