Georgia hosts 2019 Dairy Challenge – 18th in the Series!

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Source: Renee Smith, Dairy Challenge Publicity

Tifton, GA, March 30, 2019:     Collegiate dairy students – 240 in total – from 29 different states and Canadian provinces traveled to Georgia for the 18th annual Dairy Challenge.® This trip to the Southern Region of the dairy industry was a great chance for students to put to use all they have learned about analyzing dairy farms and learn new things about this unique region for dairy.

Tifton, Georgia, was home base for the 2019 North American Intercollegiate Dairy Challenge® (NAIDC) held March 28th to the 30th, with eight area dairies participating in the educational event. Dairy students from 44 colleges worked to improve their dairy management and communication skills, networked with other students, and explored industry careers.

“Dairy Challenge represents all that is great about the dairy industry, as we see dairy producers, universities and industry professionals all come together to provide these students – the next generation – be prepared to enter the workforce and make great contributions to dairy’s future,” explained Dr. Maurice Eastridge, Professor and Extensions Dairy Specialist at The Ohio State University and NAIDC Board Chairperson.

Dairy Challenge is a unique, real-world experience where dairy students work as a team and apply their college coursework to evaluate and provide solutions for an operating dairy farm. In Tifton, two programs ran concurrently – the 18th annual Dairy Challenge contest and the seventh annual Dairy Challenge Academy. The events were coordinated by the NAIDC Board of Directors and the Southern Regional planning committee.

This year’s contest participants included 36 universities, whose four-person teams competed for awards based on the quality of the teams’ farm analysis and appropriate solutions. Their farm presentations were evaluated by a panel of five judges, including dairy producers, veterinarians, finance specialists and seasoned agribusiness personnel.

The Academy added another 7 schools to the event, providing interactive training for 96 students from four-year universities or two-year dairy programs. Academy participants were divided into smaller groups including students from various schools, and dairy industry volunteers worked as advisors to coach these less-experienced Academy participants as they assessed the dairy and developed recommendations.

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Dairy Challenge Applies Learning to a Real-world Dairy

Over its 18-year history, Dairy Challenge has helped more than 6,900 students prepare for careers in the dairy industry, dairy production and veterinary medicine.

The three-day event began with learning stations at Pecan Grove Dairy and Grassy Flats Dairy, where students learned from industry experts on cow comfort, milking protocols, feed center management and other key areas. Back at the University of Georgia – Tifton Convention Center, students enjoyed pecan pie and peach cobbler, as they poured over the in-depth dairy records for their assigned dairy.

Day two began with the on-farm analysis, with all students having just two hours to visit their assigned dairy and witness the dairy’s operations. After a question & answer session with the farm owners and advisors, the student teams developed specific recommendations on the areas they thought the dairy should focus on to make the greatest impact on improving their business.  These suggestions are accompanied by an economic assessment of their recommendations.

On Day Three, students presented their assessments and conclusions to the judging panel, visited with sponsors at the Career and Innovation Fair, and learned through dairy technology presentations from top Dairy Challenge sponsors. These talks were presented by:

·         Melissa Redd, Regional Lending Manager, AgGeorgia Farm Credit – “More than a Loan, A Relationship”

·         Jorin Ouwinga, Dairy Specialist, Land O’Lakes, Inc. – “Don’t Limit Your Expectations”

·         Josh Hushon, US Dairy Marketing Communications Lead, Cargill – “Farm Decision Making: Unlocking the Power of Data and Analytics”

·         Kristi Fielder, Director of Production, URUS – “Inside the Bull Barn: The Other Side of the A.I. Industry”

·         Jack Hippen, North American and EU Sales Director, ST Genetics – “Preparing for the Real World in Agriculture”

·         Dave Whitlock, Regional Sales Manager Southern Region, Premier Select Sires – “Don’t Strive to Survive Through Change but Rather Thrive with Change.”

 

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Eight College Teams Earn Top Awards

At Saturday evening’s banquet, the following contest teams and students were announced as First Place winners, with each student receiving a $200 scholarship.

·         California Polytechnic State University: Hank DeVries, Alexandra Gambonini, Elisabeth Regusci, Elise Regusci, Coached by David Vagnoni

·         Michigan State University: Monika Dziuba, Lauren Heberling, Ariana Negreiro, Jared Sanderson, Coached by Roger Thompson

·         Texas A&M University: Haley Hill, John Leibham, Marta Pulfer, William Wolf, Coached by Sushil Paudyal

·         Washington State University: Olivia Brockhaus, Colton Bunyard, Morgan Hawley, Taylor Wilson, Coached by John Swain

Teams and students earning Second Place and $100 student scholarships include:

·         University of Wisconsin – Madison:  Rachel Gerbitz, Zachary Lensmire, Riley Miller, Danielle Warmka, Coached by Ted Halbach and Dave Combs

·         University of Guelph: Julie French, Lauren Westerlaken, David Westerveld, Jenna Wight, Coached by Trevor DeVries and Matt Groen

·         Cornell University: Benjamin Dye, Nolan Feldpausch, Simon Johnson, Christopher Sweeney, Coached by Mike Van Amburgh

·         SUNY Morrisville:  Austin Graham, Janet Hanehan, Kayla Heineman, Katherine Schultes, Coached by Steve Mooney

All Dairy Challenge contest participants received a lifetime membership to Dairy Shrine.

Total Industry Effort

Six dairy farms opened their farms for analysis and in exchange received a wealth of ideas from students and judges. Host farms for the 2019 Dairy Challenge were:

·         Leatherbrook Holsteins LLC, Americus, GA

·         Barrington Dairy LLC, Montezuma, GA

·         BrooksCo Dairy LLC, Quitman, GA

·         Schaapman Holsteins, Abbeville, GA

·         Highbrighton Dairy, Montezuma, GA

·         WestBrook Dairy, Dixie, GA

·         Pecan Grove Dairy, Baconton, GA

·         Grassy Flats Dairy LLC, Pavo, GA

“On behalf of all the students and organizers, we sincerely thank the hundreds of individuals and organizations that made this event possible,” said Jillian Bolan, Co-Chair of the event. “We look forward to interacting with these students as they continue onto careers as dairy owners, managers, consultants and the many other support roles that make dairy possible.”

About Dairy Challenge

NAIDC is an innovative event for students in dairy programs at North American post-secondary institutions. Its mission is to develop tomorrow’s dairy leaders and enhance progress of the dairy industry, by providing education, communication and networking among students, producers, and agribusiness and university personnel. Over its 18-year national history, Dairy Challenge has helped prepare more than 6,900 students for careers as farm owners and managers, consultants, researchers, veterinarians or other dairy professionals. The next national event will be hosted in Green Bay, Wisconsin on March 26-28, 2020.  Four regional events will be held in late fall and winter; details are at www.dairychallenge.org.

 

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H Barlow named Executive Director of Kentucky Dairy Development Council

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Source: News Release from KDDC, written by Eunice Schlappi

 

H H Barlow  III,  a life-long dairy farmer from Barren County, has been selected to lead the Kentucky Dairy Development Council (KDDC) as the new Executive Director as of May 1. He follows Maury Cox, who retired at the end of February after holding the position for the past 10 years.

H and his wife, Kathy own and operate Barlu Dairy in Cave City and are currently milk 120 Jerseys. They have four adult children – Gini Lin, Brad, JP and Josh.  They also have 14 grandchildren.  They are members of the Immanuel Baptist Church in Glasgow.

Mr. Barlow graduated from the University of Kentucky and has worked for 34 years in feeds sales in addition to his dairy farm.  He is a past board member for the KY Agricultural Development Board; he served on the KY Agricultural Council; he was chosen to serve on the U.S. Board for International Food & Agricultural Development; he was the chair of the founding committee for the KDDC and served on the KDDC board six years; he served on the Lone Star Milk Cooperative board of directors for 11 years; and he  served on the ADA of KY/SUDIA board for 11 years.

When asked why he wanted to become the KDDC Executive Director, H stated that he is very passionate about the dairy industry, always has been.   He plans to work with the four KDDC dairy consultants to help improve the profitability and sustainability of Kentucky’s dairy farm families.   He fully understands the challenges that dairy farmers are facing but is very hopeful for future improved conditions within the industry.  He plans to working closely with Kentucky’s dairy farmers, Governor’s Office of Ag Policy, KY Dept of Agriculture and all allied industry relating to dairy.  He feels that teamwork and networking will be a key part of the job as he moves forward in this new position and is looking forward to working with all of Kentucky’s dairy industry.

Congratulations H H Barlow, III!

 

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Maury Cox: Dairy Advocate. Milk Leader. Friend.

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“It’s the people that make the difference, and there’s no better people than dairy farmers and their families.” 
This is how Maury Cox summarizes his perception of the people he’s served – mostly in Kentucky, but extended to the Eastern United States – during his tenure as Executive Director of the Kentucky Dairy Development Council, a position he’s held since May 31, 2009.
Cox was honored by his peers and colleagues for his service to the Dairy during the Awards Banquet of the Kentucky Dairy Partners Annual Meeting in Bowling Green, KY on February 26, 2019.
Cox had announced a retirement date of March 1st, but since the position has not been filled as of press time, he will be available for additional duties until the time a new Executive Director is named.
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Maury Cox was honored at the KY Dairy Partners to recognize his service as Executive Director of the Kentucky Dairy Development Council. He was presented with a signatory crock, and was delighted to receive a new fishing pole, presented by Tom Hastings.  In case you didn’t know, Maury is almost as passionate about fishing as he is dairy cows and dairy people!
His leadership at KDDC culminates a life-long career in the dairy industry.  He began as a dairy farmer, and later worked for Kentucky Artificial Breeders Association / Select Sires.  He was a founding member of KDDC in 2005, and became the Dairy Consultant Director in 2007.
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As Executive Director, Cox worked closely with and relied on the efforts of his current team of Area Dairy Consultants, who serve four regions across the state.  From left to right (above), they are Meredith Scales, Jennifer Hickerson, Maury Cox, Beth Jones Cox, and Dave Roberts.
On any one day, Maury could be speaking to a committee at the KY Legislature in the morning, visiting a farm in in the afternoon with his barn boots on, and ending the day by promoting milk at a ballpark.
Without a doubt, Maury led his state during the most challenging time of all in 2018 as 19 dairy producers lost their milk contracts and markets.  With grace, poise, and an almost 24-hour effort, Maury led the way to 11 producers eventually finding a home for their milk with either Scioto Milk Producers Cooperative of Ohio, and some with DFA.  As an eiplogue, some of those 11 survivors have since gone out of business as well.
Maury has collaborated with many affiliated organizations to advance the dairy industry in Kentucky, in the Southeast, and across the country. For a number of years, he, working with others, such as the Kentucky Department of Agriculture, organized bus tours and educational trips on a regular basis.
Maury has always appreciated the role an ‘outside perspective’ and exposure to new ideas can play in enhancing a dairy farm when new ideas are applied. The Kentucky Department of Agriculture has been one of his most valuable working partners through the years on these outside trips.  Additionally, he is considered a “Senior Statesman” of the southeast dairy industry.
He has made a point to build bridges with other state producer groups, respecting that there are differences from region to region which affect farmers in every area across the country.  When he learned something that made a difference to Kentucky, he tried every way he could to make that a reality in his home state.
A prime example is the implementation of the Market Industry Leader of Kentucky (MILK) program. With KDDC organizing a collaborative effort of co-ops and processors, the effort was designed to make strong improvements in Kentucky milk quality in order to remain competitive in today’s milk marketplace.
Over the years, this program has supported milk quality improvements, putting $8 Million dollars back into the Kentucky farm economy.  A longer term result is that the collective Kentucky dairy industry is generally more sustainable.
Communications of the KDDC also went to the ‘next level’ under Maury’s leadership.  The Kentucky Milk Matters newsletter is read across the southeast, and is considered an accurate source of current information.
As a regional policy leader, Maury played an instrumental role in the Southeast Dairy Coalition, an informal working group of grass-roots dairymen from several states who worked together to navigate the challenges of the 2009-11 Dairy Crisis, as well as influence the 2012 Farm Bill.
Sometimes as a leader, and sometimes in collaboration with others, he has been a part of many meetings concerning milk pricing and Federal Milk Market Order function, and has worked to effect change in that sector as much as possible.  Getting timely information to his producers has always been a priority.
As parting words, Maury offers this perspective on the future:
“As long as supply outpaces demand, over-order premiums in most markets will be non-existent. Premiums are where the profit is.  Until dairy farmers come together and decide they want something different, fewer and fewer will continue in business.”
Maury’s plans includes more time to recreate and travel with his wife, Sue, and their family, to devote more care to his mother, and of course, spending more time at any favorite fishing spot or watching a Kentucky Ballgame (basketball might be his favorite!)  It’s safe to say he’s as passionate about those things as dairy!
Maury is also a man of deep faith, and applies faith and prayer to every situation. He shows Christian grace in his everyday and his professional life, and his approach to some very difficult situations is a testament to faith in action.
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Maury reminisces with some folks he’s worked with through the years: Bob Klingenfus, a former President of KDDC, Warren Beeler, Executive Director of Governor’s Office of Agriculture Policy, KY Dept.of Agriculture, and Eunice Schlappi, Office of Ag Marketing, KY Dept. of Agriculture.
Robert Klingenfus, a former President of KDDC, says:   “The Kentucky Dairy Community has benefited greatly from Maury’s leadership.  His dedication to serve producers was unparalleled, and he has navigated challenging events with a calm, steady hand.  We can never thank him enough for his efforts.”
Bob continues:  “Maury has been a help to countless dairy farmers. On the surface we see Maury helping with Milk quality problems, division of water issues. But what he is really good at is what he calls facilitating.  He is a good listener and when you are done venting,  he will give a few suggestions and  the names of people that can help you with your problem.  He is careful not to tell you what to do, but facilitates  you with the ability to achieve what you are seeking.  Maury has become the go-to man if you need something; he seems to know everyone. If you need a barn, Maury knows who has built one recently, or sell or buy cows same thing, he put people together to solve problems.
“It has been an honor and privilege to serve you. I am a lucky and blessed guy,” were Maury’s closing words on the evening of the KY Dairy Partners banquet.

Here’s to you, Maury!  Those sentiments are a thousand times reciprocated!  We know we’ll be seeing you around!

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We have been blessed you chose to serve us.

Dean Foods Earnings Call FY 2018: Background. Context. Future?

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In an entire food sector which is facing challenges at the moment from several different fronts, Dean Foods held their FY 2018 Year-end and 4th Quarter Earnings Call on Wednesday morning, February 27, 2019.  Dean Foods sources milk from independent contract farms and co-op members all across the nation, the Southeast included.
A summary of the context surrounding the event:
  • Most of food sector is off in recent financial reports
  • Sales of Dean Foods dairy products are still good  – Sales of $1.93 Billion for the Quarter actually beat a $1.91 Billion Estimate
  • Future: unknown; don’t give up hope – engage in a productive discussion
  • Initial Stock Prices and reaction after call: Dean Foods stock has traded in the $4 to $4.50 range for a couple of months (early 2019).  It was near $4.50 early Tuesday, Nov. 26 (the day before the earnings call), then dived under $3.90 for a bit of time on Wed. Nov. 27 (day of the call) and closed at $3.92.  On Thursday, Feb. 28, 2019, (day after earnings call), the stock closed at back over $4 at $4.01.   These highs and lows are par for the course after an earnings report.
 
The news from that call, and additional reports, is no real surprise to anyone who has been following Dean Foods for the past couple of years, but it has once again laid out the factors which will continue to affect the farm sector in the near future.  There is not a farm, nor a food company, anywhere, who is not affected by a changing food environment. Many big food companies, KraftHeinz included, are not having good earnings results of late, and there has been a ripple effect on Wall Street though all food business.  More closely related to dairy economics,  ‘‘Natural Cheese” was cited as one of the categories which led to Kraft’s difficult report. 
 
In many ways, we can feel a bit fortunate. Why?  Because Dean Foods is a publicly traded company, it is required by the SEC to issue reports and filings available to the general public and shareholders. Therefore, we do have a bit more knowledge about the true state of affairs.  We know (at least mostly) what we’re dealing with. 
 
Before providing the links to various reports (and not all of them are doom and gloom), I would offer this advice:  just take these reports as just that – reports. Dean Foods and its products still enjoy a lot of sales, a lot of income, and a lot of shelf space – it is the nation’s third largest dairy company.  That is a positive, and let’s be grateful for every hour we have that.
 
Remember the situation that led to this week’s report:
 
Also keep in mind that so much of this began over three years ago when Walmart announced they would be building their own milk plant.  Since then, the entire industry has been questioning how they would reckon with the Walmart monstrosity and their brutal tactics in the distribution and product acquisition sectors.  
Our area (Ky and TN, for the purposes of this post) felt that most intensely last spring when a living hell was catalyzed by the (at that time) expected June 2018 opening of the Walmart plant in Fort Wayne, Indiana, and over 100 farms in 8 states lost their Dean contracts.
Dean was not the only one affected or involved nationwide, but Dean, because they are publicly traded, took the great brunt of the fall and bad publicity. Dean was not the only party involved in farms losing contracts, and it could be even said, they were a victim as well of the Walmart entry into milk processing.
Since the Walmart plant opened in the summer of 2018, it is no secret they have experienced difficulty after difficulty, and still yet do not have all the bugs worked out of operations – neither at the plant, or distribution to stores from that plant.  
 
It is most sickening to think that some farms went forever-out-of-business because of fear of that new Walmart plant, which has had issue after issue, is not yet dependable, and  it is not known if it will ever be.
These million and billion dollar bad decisions by a big-box company have forever affected small communities in the east and southeast United States.  The fear and rumors related to Walmart and an assumed expansion after the first plant came on line have also been factors in the current industry state-of-affairs, although those rumors have quietened down as of late. 
 
Additional contributing factors affecting this Dean Foods earnings report: 
Sales of Milk: Generally, fluid sales of real milk (cow’s milk) are down, with the exceptions being whole milk and specialty dairy milks and dairy beverages. Let’s look at that as lessons and opportunities, and not despair, but get to work!   It is time we as farmers quit depending on hired employees as the only people who should ‘sell’ our products – we should also be full time milk salesmen ourselves!
 
Misinformation on the internet and in other places:  Don’t ever deny the impact that misinformation about milk and its health benefits, as well as our farming practices, has had on milk consumption, and milk consumption is the real reason for a dairy farm’s existence.  We, individually as farmer and industry agvocates, have got to step up our game, or the misinformation will win. Even popular sports figures are now being touted as ‘dairy free.’   (check the Dodgers!) 
 
Enormous expenses ran more than estimated related to Dean Foods plant closures – but that is largely past:  Only time will tell if it was a long-term wise move for Dean Foods main executives to decide to close 7 milk plants around the country.  However, in the short term, those costs were reflected in the two most recent quarters of financial reporting, and should be minimized going forward. 
 
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So, now back to the current Dean Foods situation, here are some links to current information, generally believed to be credible, and mostly in chronological order.  If you will pay attention to the events of Feb 27 and the timing, you can see how quickly information (of all kinds) is dispensed, so please keep in mind this is a fast-moving story, similar to that which other companies experience on the day of Earnings Reports. Any news should be considered “current” at that moment it is reported, events can change quickly, and perspectives are those of individual articles:
Mid-February, 2019:  The Milkweed reported about a “Notice of Covenant Waiver”   filed by Dean Foods, which could have had implications if not corrected by March 1st, however, it appears that situation got resolved in recent days, at least for the time being. (anecdotal, still trying to verify). 

Feb. 14, 2019: Dean Foods’ Great Brands Are on Track for a Profitable 2019

  source: by Faloh Investment – touts Dean’s recognizable brands as a positive
Feb. 26, 2019: Dean Foods Explores Strategic Alternatives to Accelerate Business Transformation;  source – Seeking Alpha, notes company is evaluating different strategies which may (but not certain) include sale of certain assets, joint ventures, more;  Stock jumped 10% with this news on the Tuesday evening before the full earnings call on Wednesday morning.  Other similar reports available with google searches, mostly different takes from the original news release.
Feb. 26, 2019: Local report about potential sale from Maria Halkas, Dallas News.com – largely uses information from the company news release above

Feb. 27, 2019 – 6:45 am:  News Release of Fourth Quarter and FY 18 Results

 

Feb. 27, 2019 – 6:57 am:  Dean Foods posts unexpected Q4 loss, suspends guidance(in layman’s terms, guidance is financial projections)
Feb. 27, 2019 – 8:10 am: Official Filing of 8-K with the SEC
This is a document required by law to be filed with the SEC.  There are some actions noted in the first few pages which may be of interest.
Feb. 27 – 9:00 am:  The Earnings Call / Webcast took place,  and a transcript was posted by 2:54 pm.  Listen for yourself to the audio of the call, or read the transcript, which are both available. The audio will take 50 minutes. .
Feb. 27 – 10:29 am: report on Benzinga titled:  Morgan Stanley: Pressures on Dean Foods Could Weigh on Company through 2019:   Report notes that $ales for QY 2019 actually beat the estimates:  Sales of $1.93 Billion beat a $1.91 Billion estimate
Feb. 27 – 12:47 pm: JPMorgan sees Dean Foods Sale as Unlikely    Ken Goldman, a seasoned financial analyst who is a frequent participant on the Dean Foods Earnin gs Calls, doesn’t think a sale is imminent for the reasons summarized at the link.
Feb. 27 – 2:02 pm:  Land-O-Lakes, a member-owned cooperative with a significant market presence in dairy products, animal nutrition, and an agronomy and crop-input division, released its 2018 Financial Statements.  Land-O-Lakes showed increased net sales, yet lowered net earnings, in 2018 when compared to 2017 numbers.  (See the first paragraphs).
  • Relationship between Dean and Land-O-Lakes:  Dean Foods (publicly traded) and Land-O-Lakes (a co-op) are separate companies, and neither owns the other, but there is a business relationship.  Land-O-Lakes sold its Fluid Milk division to Dean Foods in 2000. The Land-O-Lakes brand, presumingly through an ongoing license agreement, appears on milk cartons in the upper midwest.  And with Land-O-Lakes owning Purina and Winfield Crops, Land-O-Lakes still serves farms across the country shipping milk to Dean Foods plants.
Feb. 27 – 3:19 pm:  Slides posted from Dean Foods Earnings call:  These will provide a quick look-summary of the information discussed in the Earnings call, but should be viewed with caution without the context of the call.
Feb. 27th – 4:15 pm:  “Dean Foods: How Bad Is it?” – perspective from Value Analyst – notes company’s debt of $887 Million, compares significant financial numbers in relation to other food companies, more.
Feb. 27th – 6:22 pm:  “Here’s How Dairy Giant Dean Foods Curdled Its Own Milk” :    A writer of a Forbes opinion article believes  that Dean’s current troubles began when Dean Foods sold the Whitewave Division, which included plant-based beverages and Horizon Organics. Consider this a review of past activity, and one writer’s opinion, but it adds to the mix of “how did Dean find itself here?”

Follow-Up Reports:

Feb. 28th – early morning: Market Watch notes some positives and challenges, yet questions, in addition to JP Morgan, if the company can find a buyer
Feb. 28th – early morning: Food Navigator, particularly, notes the quarterly and yearly losses were not due to a significant loss in sales, but due to enormously increased expenses.
March 1st – late morning:  James Brumley, Feature Writer for InvestorPlace, notes that the ability of food retailers such as Kroger, Walmart, and others to process their own private labels, enhanced by the ability to use milk as a loss-leader, has contributed to Dean Foods current stock price challenges.  His perspective is titled: “Dean Foods Stock has passed its Expiration Date.”
March 4th  – afternoon: from Seeking Alpha: summary of a perspective from Wells Fargo’s John Baumgartner  titled: Well-Fargo dissects M&A potential at Dean Foods. Perspective notes ‘DF sells $550MM+ of excess cream annually.’  (cream = dairy fat, rising in market demand) may be attractive to some potential buyers.  On this afternoon, 4 business days after earnings call, stock closed at $3.56.  On Thursday, Feb. 28 (1 day after call, stock was in the $4.00 range)
March 7th (Thursday):  Stock Price closed at $2.88/share, and came back to $2.91 after hours
March 9th – (morning):  Dean Foods Bonds Drop 2.2% During Trading:  reported by Lisa Matthews of Fairfield Current, a digital newspaper focusing on tech, health, science, and global events:  Article contains information on recent stock trades, and notes that on Friday, March 8th, stock traded down 17 cents / share, with a trade volume 2.5x that on a normal day: (4.34 million shares vs. avg. of 1.876 million shares per day.)  A lot of the trading volume in recent days and months has been due to institutional investors and hedge funds.
March 11th:   Two Stocks to Tuck Away: The Mosaic Company (MOS) and Dean Foods (DF): the lower half of this article notes recent volume trades of note of Dean Foods stock. Article contains lots of financial market lingo.  Article by Andrew Francis of Financial Mercury.
March 11th: Historical Performances Are Key to Consider:: Dean Foods Company (NYSE: DF) – an explanation of financial terms such as EPS, and looks back at some events coming up to the current weeks and days.  From Top Stock News.
March 12th: Analysts Anticipate Dean Foods (DF) Will Post Earnings of 15 cents/share (by Lisa Matthews for Fairfield Current):  Explanations of recent trades, even some purchased by some retirement funds.
March 12th:  Implied Volatility Surging for Dean Foods Stock Options (from Zacks) – an explanation of investors taking positions in anticipation of future stock price moves.
March 14th:  Bernstein drops Dean Foods (from Dairy Reporter) – suggests (suggests!) sale may come by division, but interesting that company itself is downsizing and in the process of restructuring.  Alexia Howard, a Bernstein representative who is a regular on the Dean Foods earnings calls, was noticeably absent from the Feb. 27th, 2019 call.
March 14th: Sentiment Still Supports the Bullish Case: Dean Foods (DF) Company:  Article by Kevin Freeman for the MonReport explains some financial terms and how they work, such as Relative Strength Index (RSI).  In this case, at the time of this post on the morning of Mar. 14th, with an RSI of 22.13, Dean Foods stock is considered to be oversold.
March 29th: Bear of the Day: Dean Foods:  Article by Benjamin Rains for Zack’s.  Notes that Dean, along with DFA and other ‘real dairy’-focused entities, are facing challenges and possible crossroads “due to the rise of alternative ‘milk’ offerings such as oat, nut, and soy, along with other non-dairy options for ice cream and more.”   Perspective goes on to note that that the “global dairy alternatives market is projected to soar  from $11.9 billion in 2017 to $34 Billion in 2024.” 
April 11th: Dean Foods Company (DF)’s Mixed Signals Lead to Crossed Wires: Article by Abby Carey for The Mon Report
April 12th: Dean Foods Attracts Takeover Interest from SaputoGlobe and Mail: reported by Seeking Alpha, with a link to a Globe and Mail story
April 15th: Saputo eyes US Dairy M&A – summary from Seeking Alpha; notes Dean shares were up 5.61% early in the morning on Monday, Apr. 15th after possibilities first announced late on Friday afternoon, April 12th.
April 15th: Saputo interested in Acquiring Dean Foods, report says:  a summary published at Food Dive.  Notes Saputo, a Canadian-owned company, owns 62 plants in 40 countries around the world, and reported an 18.4% increase in revenues at it’s last earnings report.
April 15th: Saputo to be disciplined with M&A:reported at Seeking Alpha.  Quotes Lino Saputo, “The level of discipline will be even more enhanced.” Notes Dean Foods closed up 7.48% (price $2.30/share) for the day.
April 18th: Can it sustain the pressure built by the Analysts: Dean Foods Company (DF) – article by Christopher Black for West News Now.
April 18th: Implied Volatility Surging for Dean Foods (DF) Stock Options – credited to Zack’s Equity Research, published on Zacks.com:  Article explains that “implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or another.”  Notes that a “Jun 21 $3.00 Call had some of the highest implied volatility of all equity options today,” [April 18th].

Where Do We Go from Here?

That, literally, is a Billion $$$ question, with the implications that our farms, processing jobs, related agribusiness, and extended rural communities are all at stake.
We in the Southeast, as well as other regions of the country, have seen many other episodes of dilemmas that occurred when decisions that affected our communities were made far, far away in corporate boardrooms by people that didn’t know ‘us.’
We are grateful we still enjoy cordial community relationships with our processing plants, and the folks who are employed there. Those folks have a great deal to lose as well as our farming communities – there are jobs which could be affected, and a resulting effect on the municipal economies in those regions.
At this point, I have no answers, but only questions to provoke thought:
  • How can we help the Dean Foods situation and the Dean Foods brand in our own communities?
  • What, generally, do you see as an answer to Dean Foods future?
  • If a sale occurs, do you have any idea who are the buyers you would be OK with, and buyers you would definitely not want to control our futures?
  • What are you yourself willing to do to promote the sale of milk (and specific milk brands which we can trace to our farms) to keep sales alive, and perhaps even recapture from plant-based beverages?  (Note: I am not suggesting criticizing checkoff efforts with this question.)
  • What are you willing to do yourself –  or invest in time wise or monetarily wise – to protect your future?
The truth is, there are many answers to the question about Dean Foods future, and it will take several efforts to chart a course for a brighter future.
One thing is for sure – we can’t take anything for granted!  We ourselves – as individuals and as farms – are going to have to become more active in convincing consumers that real milk is a great product! 
There will be more to come as this story evolves and as we pursue our farming futures.
(Note: some updates have been added after initial posting on March 1, 2019)

A UT National Championship – Born of Corn, with TN Ag!

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A #FlashbackFriday – 20 year Anniversary post looking back at UT’s National Championship Win in the Fiesta Bowl on Jan. 4, 1999!  Ag was involved! 

[[ Note – this was originally published on 9 January 1999, in a column I contributed to the Kingsport Times-News. ]]

“Corn may not grow at all on Rocky Top, but it had a huge impact on the harvest of college football’s national championship bu a Big Orange combine!

Yup, in more ways than one, summer’s slim stalks with big ears mean that we vapid Volunteer fans can at last sigh with satisfaction that a crystal football will now adorn the University of Tennessee’s trophy case! Whoever would have thought that something as humble as a kernel-filled, cylindrical-shaped object born of the soil would give birth to the reality that Tennessee footballs now reigns as pigskin royalty?

This championship born of corn actually took root last January when those corn-fed Nebraska ‘Huskers shucked our fair Vols of all hope of a ’97 championship in the Jan. 1998 Orange Bowl, whenNebraska won 42-17.  Fulmer and staff, although disappointed, made the best of the situation and learned what proper nutrition and conditioning contributed to crossing the Championship line, and they worked harder.

And, as Tee Martin and Peerless Price and Al Wilson entered spring practice with a newfound determination, so farmers entered their fields to plant seeds of corn destined to help pay for a BCS National Championship game.

It took 160,000 acres of prime cropland to grow the specialized white corn which ended up as the primary sponsor of the ‘Tostitos’ Fiesta Bowl!

Since Frito-Lay needs over 300 million pounds of corn to fill America’s demand for Tostitos, these corn fields need to be as proficient at kicking out kernels as Jeff Hall is at kicking points between the uprights!  All told, Frito-Lay utilizes over 1 billion pounds of shelled corn each year to fill all of its corn snack sales!

Tostitos became the Fiesta Bowl sponsor in 1996, and thus began a corn farmer’s contribution to Phillip Fulmer’s tortilla shower on Monday evening!  [Jan. 4, 1998].

Although the corny side of Fiesta activities was courtesy of Illinois farmers, local agriculturists have played a major role in this year’s championship season as well.

Seeing the need for a stable, reliable supply of farm inputs, a team of Tennessee farm leaders had the foresight to form an organized system of stores over 50 years ago.  Now known as Tennessee Farmers Co-op, this agribusiness shifted its marketing scheme a couple of years ago, just as the Tennessee secondary adjusted to contain FSU’s Warrick, their lightning quick receiver.

Since Tennessee’s farming community now includes a large amount of part-time farmers and rural homeowners, the Co-op system saw the need for reaching a broad-based audience with ever-changing product lines.  And what better way to reach millions than through the Vol Network?!?!

Yes, for the past several years, your farm neighbors have helped bring you the familiar resonations of “It’s Football Time in Tennessee!”  Through TFC’s sponsorship of our beloved John Ward and Bill Anderson, football fanatics everywhere have benefitted from the dollars of farmers which brought every moment of the championship march to the radios of all true UT supporters!

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The Tennessee Beef Industry Council, a non-profit organization which educates the public about beef’s benefits in a healthy diet, is responsible for the “Beef, It’s What You Want!” commercials on the Vol Network.  These advertisements are funded through beef check-off funds, collected every time a farmer sells cattle in the state of Tennessee.

[[[ Note: In 2017, The Tennessee Beef Industry Council celebrated its 30th Anniversary as a Vol Network Sponsor, and they celebrate Beef Day every season  at Neyland stadium ]]]

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And who’s to say how beef’s protein contributed to the muscle power of linemen as they protected Tee Martin and sacked opposing quarterbacks?  Would there have been a National Championship without steaks and burgers?

As a farmer’s daughter, I first became a UT fan while riding with my dad in a combine.  John Ward and Bill Anderson kept me posted on the exploits of Dewey Warren and Curt Watson.

As a student at the University of Tennessee, I sat for many long hours in the stadium with John Majors at the helm.  I swung in the Upper Deck to the stadium-wide strains of “Hey Jude” as the Orange finally defeated the “the Bear.”  [Alabama Coach Bear Bryant]

John and Bill have been my connection to Neyland in the past few years as cows had to be milked at gametime, or harvest and crops or cattle had to be tended.

UT Football is almost as much as part of my heritage as agriculture, and my memories of each overlap and become intermingled until the turf of the stadium ripples back into the pasture grasses from which it evolved.

And on a cold January night when ice had to be broken on ponds so cattle could drink, the UT Volunteers were destined to bread through the ice and drink of the joys of a National Championship!

Farming was there – and farming will be there until the next time we hear again “It’s Football Time in Tennessee!”

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Another Ag / John Ward / Vol Network tie – not a part of the original column:  Dairy Farms in Tennessee were an early sponsor of the Vol Network, through an in-state dairy checkoff program.  John Ward was in his early days as a broadcaster, and was helping to figure out a way to help introduce Coach Doug Dickey in his first season as head coach.  Ward sold ads to the Tennessee “Milk People,”  A slogan “For the Lip that Lasts, Drink Milk!”   In Mr. Ward’s Tribute in June of 2018,  Coach Dickey spoke fondly about this relationship during the Celebration of Life.  A video of Dickey’s tribute is here.

And John Ward even did some ads for Milk himself.

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PS – Where has this column been hiding for 20 years?  Kind of ‘old-school filing’  (yet very effective!) with file pocket folders and Rubbermaid tubs!

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Here’s to hoping we’ll hear those Magic Words again in the near future!  Since Coach Jeremy Pruitt has said his favorite food is ‘corn’bread, maybe that’s an omen?!?!

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To Be “Milk” or Not to Be? That is the Question!

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UPDATE: Comment Period Extended Until October 11!

August 27th is Deadline for Comments to FDA on Milk Standards of Identity

Background Information for the purpose of preparing public comments to the FDA concerning Standards of Identity for Milk

 

On March 29, 2018, FDA introduced the  “FDA Nutrition Innovation Strategy,” a comprehensive effort to review labeling of foods and an impact on human health, particularly in relation to preventable and chronic diseases.

“An almond doesn’t lactate, I will confess.”  And with those words, FDA Commissioner Scott Gottlieb, in a July 17 report by Politico,  amped up the debate about the relabeling of plant beverages which label themselves as ‘milk,’ which many believe are misleading and deceptive.

Although firm enforcement of FDA standards of identity should have been implemented several decades ago when “Plant Beverages” or “Nut Milks” first began to creep onto ‘dairy’ shelves, they were not.  No one knows the reasons why, but here we are, now with a debate and labeling examination which will cost taxpayers – and companies – millions of dollars.  Here’s some background:

A History:

First, it’s helpful to actually read and know about the standards as they exist:

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Standards of Identity for ‘Real Milk” were established in 1938 in the Federal, Food, Drug, and Cosmetic Act.

Part of the controversy results from the “real” vs. “processed” (aka ‘fake/faux ) nutritional properties of real milk.  The Wisconsin Agriculturist, in a July 23rd, 2018 article written by Fran O’Leary,  describes it this way:

Real milk provides eight times more naturally occurring protein in every glass, is wholesome and simple, and is a minimally processed beverage. Real milk also has no added sugar. The sugar in real milk is lactose, which is a naturally occurring sugar. Many types of nondairy milk, such as almond milk, contain sugar. Tell that to your friends and family members who believe otherwise.”

The Wisconsin Agriculturist concludes that article by quoting an emphatic statement from the American Dairy Coalition, which reminds real dairy advocates:

“It is crucial the dairy industry speaks up on the issue,” the American Dairy Coalition said in a statement. “We can no longer stand by” and allow plant-based beverages to be labeled as milk.

On July 26, 2018, the FDA released an official statement concerning its reasoning and approach to re-working milk / dairy labeling standards.

This statement occurred in conjunction with a July 26, 2018 Public Meeting to Discuss FDA’s Nutrition Innovation Strategy.   Several industry stakeholders went on the record with comments at that meeting, and those comments can be accessed via links here. 

Public comments on the FDA Nutrition Innovation Strategy will be taken until August 27, 2018.  (Update / 3rd week of August:  comments now taken until Oct. 11.)  Comments can be posted at this docket folder. (Electronic – OR – written/mail delivery submission is acceptable!).   It is particularly important for dairy FARMERS – those whose livelihood depends most directly on the sales of milk from their farms – to comment either individually, and via any producer organizations of which they are members!!

A Kathleen Doheny Article from WebMd:
“[Gottleib] . . . said the agency has ”probably not” been enforcing the standard of identity — and as a result, this nonenforcement has become the standard.”
– Agency will be ‘modernizing’ the standards of identity
– Comments expected be taken for a year
– Intentions to enforce standard of identity

The article also notes that plant / nut beverage sales increased 61% from 2012-2017, while Real Milk sales decreased 15%.

This proliferation of plant-based beverages has led to sales of those products which are expected to reach over $16 Billion (in US Dollars, but referring to the total world market value)  by the end of 2018.  That competition is in two forms: 1) dollars which have been removed from dairy communities & economies across the United States, and 2) Hundreds of Millions of gallons of real milk from real cows which no longer has a home, and has led to a long cycle of depressed prices which is steadily killing rural economies.

Much of that market displacement – and resultant stress on rural economies –  is believed to be because plant “milk” is a term which cannibalizes and preys on the goodness of natural milk, and the proven knowledge milk is natural protein source, readily absorbed by the human body.  

Spirited Plant-Based Advocacy Organizations and Individuals will challenge Real Dairy / Real Cow-Goat-Sheep-Mammal Advocates:

It should go without saying, but never doubt that those organizations and businesses who continue to build their financial empires while opposing the enforcement of standards of identity of “Real Milk”  will be relentless and tireless in their fight to bend the narrative in their favor.

A collaborative editorial in a Boulder, Colorado, web-based publication, advocates for the blurred lines and gray areas which are the basis for the advocacy of truth-in-labeling for those who believe traditional standards of identity exist for a reason.  Their citations to many will be questionable, and in some cases, outdated in their accuracy, particularly in the Greenhouse Gas Emission discussion.   At least one commenter suggests alternative beverages be called ‘milk substitutes.’

The Good Food Institute, whose website has the tagline “Creating a healthy, humane, and sustainable food supply,’ has already submitted this letter on July 23rd, before the July 26th hearing.

Food Navigator, in an article written by Elaine Watson, relays views of a firm which recently raised $24 Million to commercialize ‘animal-free proteins.”  According to the article, the company ‘takes food grade yeast, and adds DNA sequences . . . which instruct the yeast to produce the proteins found in milk.”

[Note: Admittedly, this technology is morbidly fascinating, but also gives real meaning to the terms “Sci-Fi Food” and “Frankenfood.”  We really, really need to ask ourselves:  just because we can – should we?”] 

 

Dairy Farming: continued decline, will it stabilize, or more consolidation?

It is no secret that the dairy farming industry is in a sea change of transition from smaller (400-head or smaller) herds to large herds of 1000 cows or more. And with that change, rural ag economies, the agribusinesses and services which serve those dairy farms are at risk themselves.

From New York, to Virginia, to Georgia, to Wisconsin, and to other regions, reports of dairy farms exiting from the industry are almost of epidemic proportions.  If these were job losses from a ‘factory in a big building’ closing, the public outcry would be deafening. However, because dairy is so scattered across the landscape and not contained in a single building like an industrial building, the loss of these economies is often a silent erosion that gets little public notice.

One example of some of the abuse that has occurred:

From The Cheese Reporter: Sunflower Butter!  A bid request from the USDA itself

But let’s give credit to #TraderJoes, who actually has an acceptable label on their plant beverages!  Kudos to them, and I’ll be back in their stores because they get it right! This is an example to others that it can be done!

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Additional Links to Consider (and look for others to be added before Aug. 27th!):

From Feedstuffs:  Gottleib:  “FDA . . . is invariably likely to get sued”

For now, please begin to do your homework, and draft your comments.   It could be as simple as “Real Milk comes from Cows, Goats, Sheep and other mammals.  Make this simple, and have “MILK” be labeled that way!”

From the American Dairy Coalition – Background & bullet points:

You can save time, and comment via electronic means directly to FDA via the portal.  As you do this, please remember your comments may be able to be viewed by the public.

And here’s a link to the portal to comment by October 11 deadline – Comment here.

  • As of 5:00 pm on Monday, August 20, 496 comments were received.
  • As of 11:59 pm on Sunday, August 26, 2,303 comments had been posted.

Please make sure that by late evening, on Monday, August 27, and now on October 11, your voice will be among them too.

#MilkTruthMatters  #IdentityMatters  #RulesMatter

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Michigan Spartan LLC: Major ‘Processing Campus’ to be built in Michigan

A News Digest about Michigan’s $510 Million Processing Complex: DFA, Glanbia, Select Milk, and Proliant are Partners

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On Thursday, August 9, 2018, Michigan announced a monumental project which will fill part of the void in worldwide dairy processing capacity.
Michigan Spartan LLC is the business entity developing a ‘world class dairy processing facility’  expected to process over 8 million pounds of milk a day when fully operating, said to be by September of 2020.  American Cheese is projected to be a primary product, with whey permeates, a by-product of cheese production used for food and feed applications, also a product offering.
The new facility is a partnership between Dairy Farmers of America (DFA),  Glanbia, Select Milk Producers, and Proliant Dairy Ingredients.  The venture is said to be similar to Southwest Cheese, a previously existing partnership of DFA, Glanbia, and Select Milk.
Michigan Milk Producers will also be a milk source for the facility.
The evolution of the project included a number of local and regional economic development and government agencies, with the Michigan Economic Development Corporation’s Michigan Strategic Fund board an integral player.  The Michigan Department of Agriculture was also involved.
The sheer magnitude of all the agencies and efforts involved in this monumental project offers many lessons to others considering dairy development efforts in any location.
The project is multi-national in scope, and involves worldwide dairy industry heavyweights.   Dairy Farmers of America is North America’s 2nd largest cooperative and 8th largest dairy company.  Select Milk Producers is North America’s 8th largest dairy cooperative according to Progressive Dairy, (6th largest on USDA’s Top 100 Ag Co-ops – last available, 2016 numbers) and 14th largest co-op on that composite  ranking.  Glanbia Nutritionals is North America’s 22nd largest dairy company, and a subsidiary of Glanbia PLC, based in Kilkenny Ireland. Proliant is based in Ankeny, Iowa.

Following is a digest compiled from media reports of today’s (August 9, 2018) from Michigan and other areas:

From the Detroit News:  “We really try to grow the value of the agriculture industry so that most of the commodities stay here in the state, have them processed here, keep the farmers here,” is a statement from  MEDC CEO Jeff Mason. The project is slated to receive $26.5 Million in Tax Abatements over 15 years. 

From the Lansing State Journal (makes one marvel at the effort put into project):  the project involved a number of state and local government agencies, included tax concessions on several levels, with these project parameters:
  • 146 acres in the site
  • Will process about 8 Million pounds of milk a day (mostly American style)
  • Will produce about 300 million pounds of cheese per year
  • Will operate  24/7, 365 days per year
  • Notes similarities to Southwest Cheese in New Mexico [another Glanbia / DFA / Select Milk joint venture]
  • Will use by-products from each layer of processing (whey from cheesemaking, then permeate from whey concentrated for dairy solids)
  • 259 jobs at the cheese plant
  • 38 jobs at the adjacent whey permeate plant

From Crain’s Detroit Business;  a business publication in the area:

  • Another $40 Million in Tax Incentives likely to come in the future may drive total investment from $510 to $550 Million
  • The project is part of Michigan’s Agriculture Processing Renaissance Zone initative, a program which assisted with another $58 million dairy processing facility (Foremost Cooperative) and a soybean processing facility earlier this year
  • “Adding this capacity to our ecosystem . . . is really going to bring stability to the market” – Peter Anastor, Division Director, Michigan Department of Agriculture

From The Charlotte Observer (an AP story)

  • Glanbia will oversee commercial, tecnical, and business operations
  • The project considered other sites in other locations

 

A worldwide milkshed suffering from a lack of modernized processing capacity should benefit from this project.

Note: Additional links and updates may be added in the future to this blog post.

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