Dean Foods Earnings Report Q2 2017 – A Grassroots Perspective: Staying Calm, Placing in Context

Markets have Ups, and Markets have Downs. This challenging Dairy Industry climate led to an expected ‘down’ report for Dean Foods.  Stay Calm.

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On Tuesday, August 8, 2017, Dean Foods hosted their Earnings Call for the 2nd Quarter of their 2017 Fiscal Year.  This Call came in conjunction with the release of their Earnings Report for Q2 2017, and provided additional comments and insight into the numbers provided on the Financial Balance sheets, found in the Earnings Report.

Since then, a number of media reports have followed, some acknowledging that Dean is only one of several dairy focused businesses experiencing tough times in the overall dairy climate from farm to retail, while others are shouting ‘gloom and doom.’  The truth is somewhere in between all of that – each commentator brings their own perspective, and many of the widely available public reports are compiled from a financial sector view looking at numbers only, with few having a working knowledge of the complete dairy industry.  Because they deal with ‘big markets,’ a  lot of fortunes are made or lost on innuendo and incomplete information and rumors – emotions drive those markets up, and they drive those markets down.

Dean Foods Earnings Reports are of extreme importance to dairy farming communities across the United States –  Dean processing plants are the income source for farms in those areas because they buy milk from those farmers, and the plants provide a significant amount of jobs in those local economies.

My perspective is that of one who is involved in agribusiness and farming on this basic grass roots level.  Added to that, on one bleak February several years ago, I (and many other regional farm neighbors) was told my milk company had filed bankruptcy, and there would be no more checks from them.  My colleagues and I live, work and operate farms in the communities who benefit from the success of Dean Foods. We might stress a bit at times like this, but we don’t ‘freak out and panic.”   I know farms of all sizes who sell their milk to Dean Foods plants, I have friends whose jobs are at Dean Foods plants.  We have seen Dean Foods (and some of its predecessors) experience good times and bad, and we know there will be those market ups and downs.

Because of that grass-roots perspective and life experience, I often listen to those Earnings Calls.  Because I listened to the call the other day, as well reviewed the financial reports, and because I keep up with Dean news on a regular basis,  I would say “Stay Calm, let the flurry settle. Look at the entire matter in a complete context.”   Here’s why:

No doubt, the Dean Foods report was disappointing – the net profit dropped 45% from the same quarter as last year, resulting in lowered earnings per share that will be paid to stockholders.  Repeat – dividends will still be paid, there is not a loss, only the amount of dividend paid to shareholders will not be as much.

In today’s downright brutally competitive climate of the dairy industry from farmgate to retail shelf, those results were not entirely unexpected.  Stock prices went down 20% from the $15 level on the day before, and are currently trading in the $11.50 – $12.25 range (August 10).   These prices are nowhere near the 2010 lows, when Dean stock traded as low as $7 as another price war / oversupply situation taking place, albeit for different reasons.

In fact, just a couple of days before the call, and in anticipation of lowered earnings reports, one analyst suggested this was a cycle of “Contrarian Opportunity,” and could indeed be a time to consider buying Dean Stock.  This analyst continues:  “Milk will always be a staple of the U.S. consumer.  The fact that these concerns really only exist  [price wars, market variables] in the short term are reason enough to believe that demand for Dean Foods’ products is sustainable long term.”

Ralph Scozzafava, Dean Foods CEO,  was forthright with his assessment:  “We are not satisfied with our performance, and we are determined to improve our execution,” he said on the call.

Indeed, there is one positive spot already glimmering:  on the call, Chris Bellairs, Chief Financial Officer, revealed that a major private-label contract has been recently signed, but that results from those sales would not show up until a future Earnings Reports, said to be in 2018.  The new contract was not identified by name.

Dairy Reporter offered this balanced evaluation – not sensationalistic, but realistic and factual.

The real truth of the situation is somewhere in between the positives and negatives, and perspective and balance must be kept.  The ultimate focus should be on those who depend most closely on a sound Dean Foods: the farms and dairy farm families who supply Dean with raw milk, and the communities where Dean processing plants and jobs are located.

The extended multiplier effect of financial loss in those communities could be comparable to an area losing a large brick-and-mortar industrial plant, however, because the individuals and farms are so scattered, there is not quite the uproar as when a singular factory closes.  To prevent the potential (note – POTENTIAL) closing of some of those milk plants, it would be helpful if regional retailers decide that community neighbors are as important as ‘cheap’ milk, and make sure private label milks stay in the Dean plants.  Some might, some won’t.

Ultimately, behind every milk carton, there are the faces of farm families, generational farms, and local communities who produce that product.  The way  a consumer spends dollars affects those farms and processing plant jobs – some of them may be your neighbors.

From the Southeast to the Northeast to the West Coast, there are dairy farm communities and local ag economies who are far better served when Dean Foods is financially healthy.    Oh, and there are those stockholders, who do expect a return for their ownership shares – they will have a say as well.

Phil Lempert, also known as ‘The Supermarket Guru,’ penned an article for Forbes entitled “Walmart Moves into the Dairy Business Even as Milk Consumption Drops.”  When you get into the text of the piece, Lempert uses the Dean report to discuss not only the Walmart milk plant currently under construction, but the challenges facing the dairy industry as a whole.  This article has been shared widely on the internet and social media.

However, ‘there’s more to the story’ than the information in Lempert’s article:

Lempert asks the right questions about Walmart – but Dean Foods will be far from the only one affected. I generally like the Guru and his food news, but in my opinion, his observations in this piece are a bit shortsighted, and fail to provide a complete picture or broader perspective on Dean activity in the past several months. To wit:

When the Walmart plans for a plant were announced in 2016, Dean began making adjustments then to allow for that.  It was revealed on the call that when the Walmart plant begins operations, milk currently being processed at Dean-owned plants for Wal-Mart will decrease by 90-95 million pounds of milk over 2018 and 2019.  To make up for that loss,  they have been broadening their product portfolio, acquiring companies who are not as dependent on fluid milk.  As a large corporation, doing BIG business, it takes time to make for those adjustments, which has occurred and is occurring since that announcement.

As noted earlier, there was the announcement that Dean has  just signed that major private label contract (no name provided).  And just because it happens all the time with any milk company, no doubt Dean will be trying to gain business from other milk labels as well.

There is still a $45 million profit for the quarter (the way those numbers are computed by huge corporations, and in keeping with SEC accounting standards).  And while not as much as last year’s comparisons for the same quarter, profits still occurred in the form of  “adjusted diluted earnings per share.”  Additionally, there was still ‘net cash’ and not ‘LOSS of cash.’

Dean stated last winter, in another earnings report situation, when asked directly about how they would deal with a Walmart plant, that they had already withstood the challenge of losing some Walmart business, so they were a bit more prepared to deal with this occurrence, therefore they have been taking the actions mentioned above.

With all that said, these realities remain: Dean Foods is still one of the largest supporters of LOCAL dairy communities because they do generally source from farmers within a 200 mile radius of their plants. Dean Foods sources that milk through both independent producers and co-ops, bringing on this question: WHAT is each and every handler doing to stabilize and protect the financial integrity of the farms it represents?

No doubt, some of those handlers or co-ops may be evaluating and seeking contracts with the Walmart plant, but with Walmart’s known predatory practice of enticing vendors and then squeezing the crap out of them, how will that be good for any producer in the long term?

And on the flip side – how many of us continually shop in a Walmart with big-spending shopping trips, when by doing so, we are feeding that very greedy, corporate pig which has sucked the life out of our small downtowns and communities, and is now headed on a path to do that to family farms? [Keep in mind – those farms are our future food bank or food savings account – what happens to your children in 75 years when they are gone?}

‘Wally World’ is going to take on new meaning, and will exist far beyond the walls of any singular Walmart brick-and-mortar retail box.

What next?  As for me, I’m headed to get some Trumoo Whole Chocolate Milk (NOT at a Walmart), and plan on buying some Dean stock in the next couple of days.

 

Additional information can be found at:

USA Today article: 

“As milk production continues to grow across many areas of the country, we’re seeing surplus volume . . . and aggressive pricing that we believe just isn’t sustainable long term.”  a quote from Ralph Scozzafava, Dean Foods CEO.

“Dean Foods also will focus more on expanding in food categories that deliver higher profit margins than milk, such as ice cream.”

Benzinga article:  (published a week prior to earnings report):

[Dean Food’s Caught in Crossfire of Walmart, Kroger’s ‘Price War’]  Milk is being used as a loss leader in many locations, compounding price wars.

From “Food Dive”: Notes These factors: the use of milk as a loss leader in some retailers, the competition from plant-based beverages, but yet notes that Dean’s volume loss mirrored USDA figures.

Earnings Report and Recording of Call:  For readers who wish to read the earnings report in its entirety, as well as take an hour to listen to a recording of the Earnings call, you can find links at the “Investor Relations” page of the Dean Foods website.

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Governor Haslam and a Jersey Cow

Tennessee Farms Provide Diverse Lessons in Dairy, Row Crops, Poultry

Showmanship skills and a Jersey cow have caused Tennessee’s popular Governor, Bill Haslam, to go a bit viral since Tuesday, August 8, 2017 in the Twitterverse!

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Here’s how it looked in the Twitter video from the TN Department of Agriculture (If you don’t see the video icon, you may need to click on the box to see the complete video clip):

 

The animal handling skills of the governor were part of his visit to the farm of Jason Gillespie and family, whose 100-cow registered Jersey operation is located near Chapel Hill, TN.

The farm visit is one in a series of visits the Governor is paying to all types of farms and agribusinesses in the various geographic regions of Tennessee.  He has been accompanied on these visits by Tennessee’s Commissioner of Agriculture, Jai Templeton, Tennessee Farm Bureau president Jeff Aiken, and personnel from each of those organizations.

Haslam’s administration has been very  ‘agriculture friendly.’  Farmers across the state and in all sectors of agriculture have benefited from the Tennessee Ag Enhancement Program, a cost-share grant program which has catalyzed thousands of infrastructure improvement on differing types of farming operations.

A couple of extended videos detail more about the visits:

a.)  “It’s important that a governor understand more about Tennessee’s most important industry,”  is the reason Governor Haslam gives for his series of farm visits in one video clip, and

b.) Governor Haslam drives a spray rig at the row-crop farm he visits,  a poultry farmer explains after-effects  following TN’s HPAI incident earlier this spring, and the governor aspects learns about the operations of Gilmac Dairy Farm in the second video.

Maybe – just maybe – we can find Governor Haslam in the ring at World Dairy Expo this October, or at least at either the Tennessee Valley Fair, in his hometown of Knoxville, or at a middle TN Fair.

Other photos from the day and other farm visits can be found at the Twitter pages of the TN Department of Agriculture  or the Tennessee Farm Bureau.

But for now, we want to say “THANK YOU, GOVERNOR HASLAM” for visiting first-hand Tennesssee’s farms and agribusinesses!

Mayfield: CEO Quality Award – Dean Food’s Top Honor built on TN-Southeast Farm-to-Table Dairy Heritage, Community Pride

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(Athens, TN) –  Mayfield Dairy in Athens, TN is the recipient of the Dean Foods CEO Quality Award for ice cream for 2016.  This award is the company’s top honor, and Mayfield Dairy Farms was selected over Dean Foods’ nine-other ice cream plants after a rigorous, year-long judging process.

“We are delighted with Mayfield’s excellence in protecting quality from farm to table, and we’re proud to hold them up as an example,” stated Mr. Ralph Scozzafavo, CEO of Dean Foods.  “Dean Foods holds its plants to very high standards, making for particularly stiff competition surrounding this award,” he said.

Mayfield plants in the Southeast have a history of receiving Quality awards.  The Athens plant has previously received Excellence in Quality recognition in 2016, 2015, and 2014.  The Mayfield / Barber’s plant in Birmingham AL received the CEO’s Quality Award two years in a row for 2015 and 2014

If you’ve grown up in the south, especially if you’ve been involved with dairy farming in the Southeast, “Mayfield Dairy” is a name that immediately combines the elements of high quality, in-demand milk and ice cream, and how the demand generated by such a local dairy plant impacts farms and the agriculture economy in an area.  As Mayfield has grown in sales through the decades, so has the southeast dairy farm community achieved continually higher standards of quality in on-farm practices of animal care and welfare, along with sanitation and technology of equipment in milking barns.

 

The CEO Quality Award was presented to Mayfield Dairy management and employees in Athens on April 21, 2017 by Dean Foods CEO Ralph Scozzafava.

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The Dean Foods CEO Quality Award is the culmination of an intensive assessment process. This year, five fluid milk plants and three ice cream plants, including Mayfield Dairy, were selected as Excellence in Quality Award winners based on multiple criteria such as Safe Quality Food (SQF) Program scores, training participation, and consumer complaint improvement.

Next, these eight plants were scrutinized further by Dean Foods’ senior leadership who took into account quality innovations, best practices, and the “quality culture” within the plant.  Mayfield Dairy emerged as the cream of the crop in the ice cream category.

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“I could not be more thankful for the team here in Athens,” said Scott Watson, Plant Manager.  “The products we manufacture reach the tables of families throughout the southeast and our folks do an incredible job of assuring that our ice cream is consistent day in and day out for our customers.  In short, we get to make and distribute ice cream for a living, and it it doesn’t get much more fun than that!”

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How does Mayfield stand in context with other dairy processing plants?

  1. Mayfield / Athens is one of 67 plants in the Dean Foods system, according to a 2015 article in Dairy Foods Magazine.  With revenues of over $8 Billion, Dean Foods collectively is the 2nd largest dairy food processor on the Dairy Foods Top 100 list, published this August by Dairy Foods magazine.  Summarized information about the companies on the Top 100 list, topped by Nestle, with revenues over $12 Billion, describes in more detail each of the top 100 companies.
  2. While Dean Foods has a branding footprint from coast-to-coast with DairyPure and TruMoo in some of their product lines (co-branded with time-honored regional brands), they are one of the largest supporters of LOCAL DAIRY COMMUNITIES, since each plant generally sources milk from dairy farms (many family-sized farm operations) within a close radius.
  3. In 2015, Dairy Foods Magazine published an article which related a broad-ranging description of the Athens plant complex, including some private label products,  its fluid and ice cream operations, and the quality priorities of the entire processing center.
  4. #47-225 and #47-131 – PLANT numbers are the key to knowing if your milk or ice cream brand may be processed and packaged at this award-winning plant in Athens!  To know if the milk or ice-cream you’re consuming is one of the brands or private labels processed at this award winning plant, check the Plant Code (mandated by law/regulation) found on each and every carton of dairy product processed here! The fluid plant number is #47-131, and the ice cream plant number is #47-225. The quality found at Mayfield Athens is the foundation of goodness for them all, and an indication you are supporting LOCAL farms in your area!
  5. Other southeast Dean Foods plants to watch for?   The code #01-0176 signals that an ice-cream product has been made at the Barber’s ice cream plant in Birmingham, AL, a previous winner of the CEO Quality Award.  #01-0104 signals that a fluid milk product is processed at the Dean – Barber’s plant,  also in Birmingham.  #13-230 is the code number meaning dairy products are from the Dean – Mayfield plant at Braselton, GA.   #45-01 is the Dean – Pet plant at Spartanburg, SC.   From Nashville, the Purity Dairies plant, known for award-winning chocolate milk, is #47-118, and the Country Delite plant, which processes a lot of private-label milks for independent grocery chains, carries the code #47-120.
  6. The local newspaper, the Daily-Post Athenian, just about a 1/2 mile away from the Athens plant, published a front-page report with photos of plant key personnel.

 

Mary Williams is the manager of the Mayfield Division of Dean Foods, which include the Mayfield Athens plant, a plant a Braselton, GA, and an ice-cream plant in Birmingham, AL, also known as Barber’s.  She also acknowledged the daily commitment and dedication of the Mayfield employees and associates which led to this quality award.

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The brand MAYFIELD is much more than ‘a carton to pick-up’  to the ‘home folks’ in southeast Tennessee, and a wider southeast radius about 200 miles from the site of the original Athens plant.  MAYFIELD is the key to consumer shelf space at grocery stores, and therefore a LOCAL connector between dairy farm families and marketplace.  Those MAYFIELD cartons mean that area farms are able to pay bills, support their families and local churches, pay property taxes which support local governments, and are a driver for the southeast Ag Economy.

Mayfield employees and area dairy farmers are neighbors, sometimes cousins, sometimes husband and wife, and often go to the same churches.  To say this is a LOCAL DAIRY Community is an understatement; the bonds of history are deep, and wide, and strong.  All take mutual pride in the success of each other in various family, community, and business, and personal achievements.

The Agriculture community adds their “Congratulations” to the many already received by Mayfield.  Farmers also say “THANK YOU” to Dean Foods for supporting our neighborhoods and dairy futures.  Many farm young folks have committed to a future in the dairy industry by investments in milking barns and housing facilities for maximum animal welfare.  The continued support of Dean Foods will bolster those futures as young farmers aspire to help feed the world well into the future.

Here’s to more Mayfield awards in the future!

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Fulfilling a Milk Drive Legacy: Randy Davis Memorial Fund Purchases in June Dairy Month

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The Passion of Randy Davis for promoting the goodness of milk is legendary to those who knew him, or who ever encountered him.

His legacy will continue to touch thousands of families this June Dairy Month 2017 following Randy’s untimely death in November of 2016.   To honor Randy’s life mission, the Randy Davis Memorial Milk Drive Fund was established.  Thanks to the kind generosity of his friends, family, and dairy community, the fund thus far has accumulated approximately $5,000, with contributions still coming in.

Following Randy’s life example, the Memorial Fund was set up to accomplish these goals:

  • To honor Randy’s passion for dairy farming and milk itself
  • To honor Randy’s impact on the Southeast dairy community, and his love for regional farms and dairy farm neighbors
  • To get fresh, nutritious milk into the hands of families who need it the most, with distribution to be accomplished by area Food Banks and charitable organizations
  • To connect area farms with their non-farm neighbors

Thus, the fund monies are designated to purchase brands of milk who source milk from southeast farms, reinforcing that milk is not only a nutritional powerhouse, but is also an economic generator in local economies.   The milk purchased is to be donated primarily to Second Harvest, who will then distribute it to local food banks through their networks. Other charitable organizations may benefit as well.

Because June Dairy Month was a highlight of the year for Randy, it was only natural that this month was a fitting time to accomplish those milk buys, donations, and deliveries.

Those funds are  currently being dispensed through a combination of private milk purchases in bulk quantities, and through milk buys at on-site milk drives taking place at Knoxville-area Ingles stores on June 1st, 2nd, and 3rd.   It is anticipated a final ‘buy’ will take place later in the summer, hopefully by July 1st, with the method yet to be determined.

Purchase Event 1 – Memorial Fund Private Buy with Mayfield Dairy

The first purchase was completed on May 30, 2017 at the Mayfield Distribution Center in Knoxville, TN.    A group of Randy’s family, Second Harvest officials, Mayfield officials, and Memorial Fund Administrators gathered to mark the occasion.

824 gallons! A total of 824 gallons was delivered to Second Harvest – East Tennessee, who will then distribute those gallons to local food banks in their 18-county service area.  572 gallons were purchased with Memorial Funds, and Mayfield generously donated an additional 252 gallons!  We cannot thank Mayfield Dairy enough!

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In the photo from left:  Roy Settle, First Bank & Trust, and Steve Harrison, Memorial Fund Committee members, John Randel, Tyler, and Alli Davis Kamper, Mark Aranda and Aaron Snukals, Second Harvest East TN, Kris Thomas, Mayfield Distribution Center, Lynn Davis, Samantha Davis Craun, Cindy Curtis, Violet and Gene Davis (Randy’s parents).

Purchase Event 2:  Memorial Funds will buy milk at Knoxville Ingles Milk Drives

For the past four years, Randy had been instrumental in facilitating and organizing on-site Milk Drives at area retailers in East Tennessee.  These milk drives, some early ones at Kroger, with the bulk of them occurring at area Ingles groceries, are supported by Tennessee’s Dairy Farm Families via the Tennessee Dairy Promotion Committee.

Country Q 100.3, a Knoxville area radio station, and Ingles groceries have been welcome and excellent partners in these drives.  The total events have been coordinated by Kay Bradley, who personally has purchased lots of milk for the drives.

To further honor Randy, this year’s store milk drives have been designated the “Randy Davis Memorial Milk Drives” by Q 100.  They even have a tab at their home page!

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If a person wishes to contribute but can’t make it to one of the stores, contributions can be made online here!  

This year’s on-site Milk Drives are schedule for June 1-3.  In short, customers who visit stores are encouraged to purchase milk from the store’s dairy case and then bring to a Second Harvest refrigerated truck who collects milk during the event. Last year’s event yielded approximately 4,000 gallons total for Second Harvest.  (Learn More.) 

Monies from the fund will make two purchases, in the amount of $850 each, at the store events on Friday, June 1st, at the Lenoir City Ingles, and on Saturday, June 2nd, at the Farragut Ingles.

Lenoir City is in Loudon County, Tennessee’s #1 County in Milk Production (also Randy’s home county!), so it was a natural to make a purchase there.  The Memorial Fund will make a purchase at approximately 6:30 pm (some will be traveling back from Nashville).

The Farragut Milk Drive on Saturday, June 2nd, will be joined by two UT Football #VFLs (Vols for Life)!  We’re so happy to announce that Jayson Swain, a Vol Network commentator, and Antoine Davis, who administers the Vol For Life Program, will be in attendance to help promote the cause!

We invite any of Randy’s wide circle of friends to join us at either of these events!

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Randy was a man of deep faith, and many have been privileged to hear his testimony.

“Whatever you did for one of the least of these brothers and sisters of mine, you did for me,”  is a life’s instruction found in Matthew 25, verse 40.

As we honor Randy in this first June Dairy Month without his physical presence here on Earth, his faith, illustrated by this verse, will live on through his Memorial Fund purchases and these milk drives.

The Davis Family, the Fund Administrators, and the Dairy Community are grateful to each and everyone who has helped to see that Randy’s legacy continues on.

There will be more in the coming days about the Memorial Fund activities and the Milk Drives, but for now “Thank You.”  We hope to see you at one of the Milk Drive Events!

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Shamrock’s Virginia Expansion increases Milk needed 4x; adds $24 Million to area Ag Economy!

8448_Shamrock_Brown_F$24 Million dollars will be infused into the southeast / mid-Atlantic region’s farm economy, with the most impact on Virginia.

Quadrupling the milk purchased by a processing plant is expected;  MD-VA Producers Co-operative is the supplier, and their producers should benefit.

78 new jobs.

$40 Million invested in new processing facilities, expanding Shamrock’s facility in Augusta County, VA after only 2.5 years of operation.

In a region and an industry sorely needing new milk processing capacity, Shamrock Farms has created a lightning bolt of excitement and optimism in the Shenandoah Valley area of Virginia for farms and economic developers alike.

Following is a ‘digest’ of various local and national reports and highlights from each as the news broke on March 29 and 30, 2017.

Press release from the VA Governor’s Office: How public development funds played a role:

The Virginia Department of Agriculture and Consumer Services (VDACS) and the Virginia Economic Development Partnership (VEDP) worked with Augusta County to secure the project for Virginia. Governor McAuliffe approved a $400,000 grant from the Governor’s Agriculture and Forestry Industries Development (AFID) Fund, administered by VDACS.  The company will also receive a $400,000 performance-based grant from the Virginia Investment Partnership (VIP) program, an incentive available to existing companies, to assist the County with the project.  Shamrock Farms will also be eligible to receive sales and use tax exemptions on manufacturing equipment. Additional funding and services to support the company’s employee training activities will be provided through the Virginia Jobs Investment Program.

From the Staunton, VA News Leader:

The expansion will more than double its production capacity, rapidly growing the Shamrock Farms brand, a release said. Once completed, Shamrock Farms will employ more than 120 people at that location. The expansion will increase filling capacity and expand product varieties, sizes and formats.

Shamrock Farms, the creator of Rockin’ Refuel and mmmmilk, is a 95-year old dairy company owned by a single family, the McClellands.  The company has Arizona roots, and still operate their own dairy farm. Shamrock has built a nationwide shelf presence with its innovative dairy products, featuring packaging designed for fast-food and convenience stores.  In recent years, they’ve focused on higher protein drinks to meet consumer expectations.

Shamrock’s statement on the expansion acknowledges the ‘milk as a beverage’ concept:

“As a company we’re always looking for ways to grow and innovate,” said Ann Ocaña, Chief Marketing Officer for Shamrock Farms. “The expansion gives us the capacity and the technology to meet growing demand, expand our offerings and propel milk-based beverages into the future.”

A Waynesboro, VA news publication, the News Virginian, issued an article,  with the following:

Augusta County Board of Supervisors Chairman Tracy Pyles said Shamrock “is a cornerstone in Mill Place Commerce Park and a strong asset to the agricultural community of the commonwealth  . . .  “We have a good location and great workers,” he said. “It’s not a surprise they are expanding.”

Dairy Reporter also shared the news to a worldwide readership.

This Shamrock plant is located along the Interstate 81 Corridor, just southwest of Harrisonburg, in Virginia’s Shenandoah Valley.  This area is one of the southeast’s largest dairy communities.

This plant has only been open since October of 2014, with MD-VA Milk Producers Cooperative as its exclusive supplier.  The company has enjoyed rapid growth for its product line and markets on the East Coast.  Nationwide, Shamrock serves more than 50,000 quick service restaurants and 36,000 c-stores and groceries.  The company has also added Cold Brew Coffee and Milk to its offerings.

All of the public and private parties, which include:

  1. the farmers who produce the high quality milk,
  2. Md-Va Milk Cooperative which supplies the plant,
  3. Local and state governments, and
  4. Shamrock itself

deserve an enormous amount of credit for an extraordinary team effort which fostered this expansion!

As exciting as this announcement is, no one knows better than the dairy industry itself that more plants are needed, provided innovative products continue to come to the market place.  The need for processing capacity is one thing, the ability to process or manufacture a milk-based product for which there is enough market demand is the even bigger – but very necessary – challenge to overcome.

As for now, Shamrock has provided a bit of inspiration and excitement.

Congratulations, Team Shamrock in the Southeast!!  Well done!  We look forward to watching your market grow!

HPAI in 1 TN flock/house: Days 1 & 2. Stay Calm. Stay Informed. Watch Your Flock. Does Not Pose Risk to Food Supply.

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[UPDATE – March 6, 2017]    Press Conference by Tennessee Department of Agriculture Officials, now archived and available for viewing on YouTube.

Summary of News Conference:

  1. Thus far, minimal impact.  Biosecurity was excellent at the facility, and only 1 of 8 houses had clinical signs, however, the entire affected flock was depopulated / euthanized per disease control protocol.
  2. An initial round of testing in the surrounding area has proved to be negative, a positive sign, but several additional tests to follow.
  3. Any positive tests in neighboring flocks will reset and start a 2-week time clock again.
  4. A half dozen of the incident management team had experience with the national outbreak in 2015.
  5. Excellent records, and management expertise of farm owner, and a knowledge of what to do in certain situations, enabled this quick response.
  6. Exports will be impacted, not yet known to what degree.
  7. Thus far, for an extremely difficult situation, there has been a ‘best case scenario’ in a quick and effective response.
  8. Farm owner and the company who owns the birds (Tyson) are likely covered by some sort of indemnity program. The knowledge of what signs to look for in identifying the disease, and the skills of both enabled the farm owner to identify situation early and contact officials, critical to minimize the outbreak.
  9. Updates provided as indicated by the situation.

A ‘milkshed’ is part of a ‘foodshed,’ and poultry is a part of that worldwide foodshed. Therefore, this blog is taking a bit of a turn with this post.

I’ve got many colleagues and friends with poultry houses or backyard flocks, so as news broke from the Tennessee Department of Agriculture  of an HPAI (Highly Pathogenic Avian Influenza) H7 confirmation in the  lower middle region of TN  on Sunday, March 5, 2017, the texts, posts, and industry emails began flying, and ag communicators got to work.

The first and most immediate point is that ‘HPAI does not post a risk to the food supply,’ according to TDA, as well as many other poultry organizations and animal health officials charged with protecting human health. This disease came to worldwide public attention in 2015 with major outbreaks in midwest poultry houses, turkeys, broilers, and chickens included.  The Tennessee virus is of a different strain, H7, compared to H5, which was the culprit in the outbreaks two years ago.

As this post is written, there is apparently only 1 flock affected – a ‘breeder flock.’  Such a flock producers fertile eggs, to be hatched for broilers or laying hens. Per the protocol already in place, an immediate quarantine has been placed on 30 houses within a 6.2 mile radius of the affected poultry barn. Hopefully – very hopefully – this means the disease has been discovered early, and impact will be minimal.

It is to the credit of a vigilant and informed barn owner who realized something out of the ordinary was occurring, along with competent professional veterinarians, and an emergency preparedness protocol, that diagnosis was achieved quickly after the first reports to the TDA only two days prior.  This is one example of the diligence, planning, and preparedness that makes the U.S. Food Supply the safest in the world.

Along with the initial news release, which has links to many other pieces of information, the Department expected there would be a press conference on Monday, March 6, 2017.

To answer questions in the first phase of the discovery, the TN Department of Agriculture has posted two YouTube videos, in which Dr. Charles Hatcher, TN State Veterinarian, answers the immediate issues, particularly the fact nothing from this flock – repeat NOTHING – has entered the human food supply. The videos can be viewed at these links:

PART 1 – HAPI interview, March 5, 2017:  with Dr. Charles Hatcher, DVM, TN State Veterinarian

PART 2 – HAPI interview, March 5, 2017 also with Dr. Charles Hatcher, DVM

To get an idea of the scope of the matter on the first day of this incidence, this graphic should suffice.  Hopefully, it won’t need too many updates, and this incidence can be contained quickly.

hpai_monitor_tn_agrivoice_mar5_s

USDA statistics concerning the US Poultry industry tell us that TN is one of the Top 19 states in the nation for number of broilers.

A Voice of Experience:   Lara Durben,  MN Turkey Growers Association, Chicken & Egg Association of MN, Midwest Poultry Federation

Lara Durben, the Director of Communications for three major poultry organizations, the MN Turkey Growers Association, Chicken & Egg Association of Minnesota, and the Midwest Poultry Foundation, was at the forefront of communications when the first outbreaks occurred two years ago.  MN was at the epicenter of the outbreak.

Lara was a lion, working to distribute information to poultry farms themselves, as well as being a factual, informed liasion for news outlets and consumers to get accurate information.  Having seen an industry through the storm, she is a strong voice of experience.

I really appreciated her taking time from a Sunday afternoon to answer my requests for information.  She indicated via messages she had already been contacted by others. She has suggested the following articles/resources; linked to here for your convenience:

The Worry and Work on Avian Influenza

Avian Flu:  What I Want You to Know

Additionally, these were her contributions posted at Agriculture.com:

Avian Influenza:  A Few Questions and Answers

Avian Influenza in MN: What Does this Mean?

From Minnesota Turkey, with links to MN Extension publications:

Avian Influenza  (An overview)

For BACKYARD POULTRY FLOCKS – From Minnesota, a state who has a vast amount of experience  with avian influenza  (a 2 pg. pdf to print)

For PASTURED and ORGANIC FLOCKS  (Also from Minnesota – a 2 pg. pdf to print)

UPDATES (as they become available):  Where to find them:

Tennessee Dept. of Ag:  Alerts

University of TN Extension: New web page, launched on Monday, March 6

USDA APHIS: Biosecurity for Birds

And articles from the popular press and ag industry sources:

From the Guardian: a report sourced from the AP

Via Yahoo: another AP report, news affects stock prices of poultry companies

From Chicken Check-In: Contains info on current outbreak and what  producers do to prevent avian flu.

From Watt AgNet: Timing of response from recognition of signs to diagnosis

From Tyson Foods: Owner of the birds, their ‘heightened security’ protocol and expectations

From the TN Poultry Association:  Organization and Industry was already on high alert, due to season and timing of migratory flyways

For now, those with backyard and commercial flocks should not panic, yet review information related to the physiology of avian influenza. (see above).

Here is a list of resources that will be updated as needed:

hpai_tips_resources_f

Happy New Year – Southeast #Local!

Oh, my, we southerners are a bit intense about our New Year’s Day traditional meal! And since I’m getting more and more driven to identify and support ‘local’ growers, or at least farmers I know, I wanted my New Year’s tradition to include as much ‘local’ as possible.

From Southern Living to Garden and Gun to newspaper columnists to bloggers, paper pages and digital pages are filled with recipes for traditional New Year dishes like Hoppin’ John with rice, cornbread, black-eyed peas straight-up and black-eyed peas in salads and dips, and greens – always the greens (with vinegar, please!)

Are other parts of the country as crazy about a New Year’s Day tradition such as this?  (Tell me, please! What New Year traditions do you have?)

Anyhow, while I eat most foods produced in the US knowing we have the safest food supply in the world, of late I am getting more and more curious about where the farms are from which that food comes.  I often ask myself “Am I supporting a neighbor?” when I make a purchase.

I guess you could call me a proud, ‘consciously local’ consumer!

Most farmers in agriculture sell products on the ‘commodity’ market, and by so doing, it is very easy for the farmers’ faces to get lost, and a consumer has no idea which farms in which areas of the country they are supporting.

Because my family has farmed for at least three generations, and because I work on a daily basis with farmers who produce all sorts of products (milk, crops, beef, pork, chicken, lamb, farmers market produce & flowers, etc.), I am increasingly drawn to the question “How are we all going to be able to continue farming for another generation?”  “Can we financially be able to do that?”

While there are many factors that play into answering those questions, one of the main factors that enable a farm to stay in business is that sales of the products they are able to grow must have a viable market.  That ‘market’ must be of a volume large enough to sell a significant quantity of product to justify the expense of growing a crop.

I also am a great believer in viable farm neighborhoods local to me, or in some cases, which support a group of like-minded farmers I know. Those farms are sometimes 50 miles, most often 250-300 miles, and sometimes 500 miles or more from my East Tennessee stomping grounds.

So, I decided to play a ‘local’ game with my New Year’s Day meal – or as much as I could on a less-than-24 hour thought.   I shopped at 5 different food retailers in my small East Tennessee town, which included 2 mid-size grocery chains, 2 small grocery chains, and 1 dollar store. With a few more days thought (and more cooking time), I probably could have added a few more products, but time just ran out.

Here’s what I came up with (a combination of cooked from scratch and mixes of things out of a very convenient can), plus using milk and cornmeal that were already on hand :

3441_a_local_new_years_supper_f Breaking it down:

From Tennessee:  Buttermilk from Mayfield Dairy Farm, which buys milk from most East Tennessee dairy farms (likely 75% or more of the milk produced in East TN).  Since our farm grows corn which goes to a feed mill which in turn sells feed to those herds, this brand (and private labels which come from plants 47-131 and 13-230, as well as Weigel’s) is often in my fridge.  The cornmeal mix for the cornbread had a White Lily brand, but no East Tn wheat or corn would have been in that bag. [It would have approximately 20 years ago, before they closed their Knoxville mill.]

My pork (a smoked shoulder butt) was smoked by some ‘local’ friends who live in the same town I do, and purchased from a local food ‘bulk-sales’ retailer, but I have no idea where the hog houses are in which that pork (delicious) was finished!

From Louisiana: I tried a Brown Long Grain rice from Louisiana (approximately 700 miles or an 11 hour drive away).  Rice is not grown in Tennessee, and likely can’t very easily, so this was as close as I could get.  It was also my first time -ever – cooking rice the old-fashioned, long-time way on top of a stove!  (That also fit a  2017 resolution – new dishes, and new methods to cook.).  I was really pleased when I went to the Supreme Rice website to meet the growers – I feel like we could have the same language about John Deeres and such!  But that LA accent? Well, that would take an in person visit to see if we could understand the spoken word!

From South Carolina: My Black-eyed Peas and Greens (Margaret Holmes brand) were of the conveniently canned variety.  Following a label reference to McCall Farms, I also met the southeast farmers who likely grew these New Year’s staples.  These growers live about 350 miles and 5 and half hours from my table, so I could drop by on my next trip to the SC coast!  (‘On the way” is another form of local, isn’t it?!?)

I may not wait for a holiday or special occasion to play my next ‘how local can I make it?” game.  Would you consider joining me, and making a game of it?

Happy “Local Eating” New Year!