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Yesterday, we dove into one of the dairy industry’s most controversial topics: raw milk. Today, we’re sticking with dairy industry topics, but moving in a different direction and tackling food prices.

Food prices are often a topic I deal with in my job as media relations manager. I often get calls from reporters asking questions about why food prices have jumped, or if certain issues or occurrences in the agriculture industry will affect food prices in the future.

Many times,  as food prices fluctuate or we prepare for them to fluctuate, there is a reason behind it. However, the interesting thing when it comes to dairy products, specifically milk, is that the price often doesn’t fluctuate in the grocery store.

That doesn’t mean that it doesn’t fluctuate anywhere. Often, the price changes for the dairy farmers producing the milk and the retailers buying it. It just means that consumers don’t often see those changes.

In fact, over the last several months, milk prices have reached a new, all-time high.  Growing up on a dairy farm, I can tell you that many people believe the misconception that as milk prices rise, and producers are paid more per hundredweight, retailers “jack up” milk prices in the store. Then, even as milk prices drop, retailers are slow to drop them.

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However, when you take a look at the chart below, it’s easy to see that isn’t the case. And, I have to say, even though I grew up on a dairy farm, the data was kind of surprising to me, too.

Milk Prices

When you look at this chart, the exact opposite conclusion can be made.  Retailers don’t like to change the price of their milk.  Because milk is a staple and product that consumers buy regularly all year long, they like a nice, steady price all year long. So here’s what happens…

  • In times of high producer milk prices (Illinois mailbox prices adjusted to a per gallon price), which is represented by the green line, retailers take less of a profit (the spread or difference between the mailbox and retail prices), which is represented by the blue line.
  • In times of lower producer milk prices, retailers take more of a profit.
  • The lines nearly exactly mirror each other, which shows a tendency for retailers to attempt to keep a fairly steady price for milk, despite what they pay for it.

It is also interesting to note that milk is the only commodity for which the USDA sets a minimum price.  This price is set my USDA through a survey process to determine the prices wholesalers are paying for dairy products. It is announced around the fifth of every month, and applies to the milk produced in that previous month.

So there you have it. Food prices do fluctuate — as is the case with the price of pork products right now (something we’ll tackle next week), but in the case of staples like milk, retailers try to keep prices as steady as possible. They make a profit, or take a bath, in order to keep the price steady.

 

Today’s post comes from Illinois Farm Bureau Livestock Program Director, Jim Fraley. Jim is discussing one of agriculture’s hot topics today: raw milk. Some consumers back raw milk whole-heartedly, but there are health concerns associated, making it a delicate topic for dairy farmers and the dairy industry.

Jim Fraley, Livestock Program Director, Illinois Farm Bureau

Jim Fraley, Livestock Program Director, Illinois Farm Bureau

It has been said that the first human to drink milk from a cow was also probably the world’s bravest human! One thing is for certain; as soon as we humans domesticated mammals and started to care for them to supplement our nutrition, good things started to happen.  Our bones got stronger, our immune system improved, our bodies and brains became larger, and we didn’t have to be that hunter-gatherer any longer.  In fact, when a country’s economy improves to the point they can start buying more “things,” the first investment people make is in their food.  They improve their diet by eating more meat and milk.  It’s one of nature’s most perfect foods.  Today, there is strong demand for dairy products worldwide.  In fact, U.S. dairy farm families are now exporting about 15.5 percent of our products to other nations.

Back here at home, a growing trend has been brewing.  Families have been seeking out dairy farmers to buy milk directly from the cow.  This is milk that has been drawn from the cow, cooled down, and, well… that’s it.  The back-to-the-farm movement has become more and more popular.  It has been estimated as many as 60 Illinois dairy farms are now selling milk to consumers who are willing to bring their own container to the farm, and dispense it right out of the bulk tank.  It’s good, I must admit.  I’ve shared a glass of raw milk with committed-to-the-cause dairymen, and I have eaten my share of raw milk ice cream over the years.  People who regularly consume unpasteurized milk purport to have a stronger immune system, fewer allergies, and a healthier gut.

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Scientists are quick to point out that we require all milk to be pasteurized at retail sale for a reason.  It makes for a safer product.  Pasteurizing is a process that heats milk to a specific temperature, for a specific time, thereby killing much of the bacteria that are found in raw milk.  Pasteurization was mandated in the early 1900s to stem the tide of brucellosis, E. coli, and tuberculosis infections.  This process was incredibly successful, and resulted in saving the lives of countless people – perhaps in the millions.  Today, with modern microbial testing, incorporating best management practices into our daily milking routines, and the elimination of most of the aforementioned diseases, people are seeking out raw milk in growing numbers.  These folks see it as a first amendment right for them to have the freedom to choose what is put in their bodies.

My organization, the Illinois Farm Bureau (IFB), believes all milk should be pasteurized.  However, we also recognize there is a segment of the population that prefers to drink unpasteurized milk.  We support their right to choose, provided the dairy farmers that are producing this food product are subject to some oversight, and the milk is picked up at the farm in the consumer’s container.  IFB is working as an active member of the Illinois Department of Public Health’s committee that is working to develop practical solutions.  The divide between the two factions is closing up.  I am confident we will come to an agreement soon.  After all, we are some of the bravest humans on the planet!

Each Earth Day, internet memes pop up all over the place proclaiming farmers the original conservationists.

Earth Day

And it’s true. Farmers have been caring for the earth and their land for generations. And they’ll continue to do so for generations to come in order to ensure their families will be able to keep farming and raising animals on the same ground they have used for years.

But, with so much modern technology at their fingertips, what are farmers and ranchers doing today to conserve and preserve the land?

For starters, Illinois farmers sought significant changes to the Illinois Fertilizer Act to establish the Nutrient Research and Education Council (NREC). NREC serves as a sustainable funding mechanism for nutrient research and educational programs. For each ton of bulk fertilizer sold in the state, $.75 cents is used to support projects and programs that address the role of nutrients in enhancing Illinois crop production while minimizing the environmental impact.

Additionally, 20 percent of NREC funds must be dedicated to on-farm research and demonstration projects that address water quality issues. And with annual funding between $2 and $2.5 million, that means plenty of research into keeping water safe and clean. In 2014, 15 projects will be funded, totaling more than $2.55 million.

Illinois farmers also are a part of the Illinois Council on Best Management Practices (CBMP). Their Keep it for the Crop (KIC) program is aimed at reducing nutrient losses, educating suppliers and farmers, and dedicating resources toward research to reduce nutrient losses and enhance nutrient efficiency. Additionally, the program has focused on water quality and nitrate load in eight priority watersheds within the state.

The KIC program works with farmers and fertilizer dealers to establish on-farm nitrogen rate trials in order to provide farmers with a reliable, defensible nitrogen rate for their own, individual fields.

Illinois farmers have helped to lay the groundwork for a new era of research and education. The funding provided by NREC helps make substantial progress in farmers’ efforts to minimize environmental impact, optimize harvest yield and maximize nutrient utilization. What’s more, these efforts aren’t dependent upon state or federal funding, but rather on the support of farmers themselves each time they buy nutrients for their fields.

The bottom line is this: Farmers and their families are drinking the same water you’re drinking. In many cases, they’re on the front lines, living closest to their fields. Clean, safe water is just as important to them as it is to you. Their efforts to keep water safe and conserve land helps farmers retain the ‘original conservationist’ title.

 

 

Today’s post comes from McHenry County Farm Bureau president and farmer Michele Aavang. Michele raises beef cattle on her farm just north of Woodstock, Ill., where cattle graze on pasture land that has been in the family since the 1840s. To find out more about Michele and her family, head to her Facebook page, Willow Lea Stock Farm.

By Michele Aavang, President, McHenry County Farm Bureau

By Michele Aavang, President, McHenry County Farm Bureau

Recently a woman who I like and respect quite a bit posted a rather lengthy Facebook status. Tammy and I met several years ago at the farmers’ market where I’m a vendor and she is a regular customer. She’s a mom of two and is making all of the food choices for her family.

Her post centered around her feelings of being torn between “seemingly opposing sides” of the “local, heirloom, organic, grass-fed, humanely raised, sustainable, non-GMO, antibiotic-free, free-range” farmers and those who farm using conventional methods.

Tammy, you don’t have to choose a side. The recent round of fear-based marketing, most prominently displayed by Chipotle’s new advertising campaign, will have you believe that there is only one correct choice and that it must be the one with the most adjectives attached.

It’s beyond annoying to me when one method of production is misrepresented and put down to make another look good. This tactic is being used not only by major food retailers like the burrito purveyor, but by farmers against one another.

I would suggest that there is room for all types of production methods in today’s agriculture and that they can peacefully coexist. The reality is there are plenty of markets for farmers today.

Consumers have a variety of desires and demands, from budget to niche related. We also can’t overlook the fact that we’re facing a very real global population explosion. It will take all farmers, large and small, organic and conventional, doing what they do best, to feed it.

A farmer makes the decision on what kind of crop to grow and how to grow it based on a multitude of factors, which include location, facilities, resources, market opportunities, availability of labor, personal preference, etc.

Here we have a herd of 60 beef cows. It’s that size because of the amount of land and the quality of land we have available.

Cow 1 Cows Winter Cows

The decision about how to market our beef, which is directly to consumers, was made based on the fact that we’re physically located in a fairly populous and prosperous area between two major population centers, Chicago and Rockford.

I have friends who raise cattle in North Dakota in a remote rural area literally 100 miles from the nearest Starbucks and 80 miles from a McDonald’s. Marketing direct to consumers is not an option for them.

They also have about 10 times the number of cows I have because they have more land and more labor available. It’s not better or worse than what we’re doing here.

I choose not to use growth promotants in my beef because my customers tell me they want it that way. My cattle grow a little slower and require more feed. The cost of that feed is passed along to the consumer.

Bull Calves Cow and calf 2

I’m very aware there are people who can’t afford my beef. That’s OK and I’m happy there is more affordable beef in large retail stores available to them. I would never suggest that there’s anything wrong with the less expensive beef raised in a different manner.

The bottom line is that I have found a market for my beef, while other farmers have a market for less expensive, efficiently-raised beef. Yet another group finds buyers who are willing to pay extra for the organic label. We find what works best for our own farms.

Bull 2

I also market my beef as “natural.” I’m able to fit my production methods to the demands of my clientele. They tell me that “local” and “natural” are important to them; they don’t have strong feelings about “organic.”

They do like to know the money they’re spending is staying in the county. They want to have a relationship with their farmer and to know how and where their food is raised. I’m happy to comply.

If things change and price or something else should become the priority, I will have to adapt my production methods accordingly.

To consumers who are struggling with food choices, I say pick whatever works best for YOU. Buy what you want given your own budget and preferences.

I start my day the same way farmers and ranchers all across the country do. Getting up and checking our animals, making sure they’re comfortable and secure with plenty of feed, water and a dry place to rest.

Our livestock comes first no matter the adjectives attached to the label. No choice there.

Michele’s article was originally printed in the March 24 edition of FarmWeek.

Our thoughts and prayers are with the marshmallow farmers of North Carolina.

 

Happy April Fools Day!

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Almost two months later and we’re still talking about it. It took more than two years to get the darn thing passed, and even after it passes, we’re still talking about how good or bad it is.

That’s right, I’m talking about the farm bill.

Even after it finally cleared the House and Senate, open season on the 2014 farm bill continued, with letters to the editor, horribly lopsided political cartoons and talking heads bashing the bill on every channel.

Mostly, they’re complaining that the bill still isn’t good enough and will cost more than originally projected.

According to the University of Missouri’s Food and Agricultural Policy Research Institute (FAPRI), the farm bill’s Price Loss Coverage (PLC) program and Agriculture Risk Coverage (ARC) program will cost more than the Congressional Budget Office (CBO) predicted before the farm bill became law. And that report has everyone talking.

FAPRI’s figures are based on their predicted drop in commodity prices over the next ten years. FAPRI predicts PLC payments will increase in the coming years while ARC payments will start larger, but drop significantly after the first few years, leading to an $11 billion gap in the CBO’s projected cost and FAPRI’s.

Still, if the 2008 farm bill had been continued rather than a new farm bill being implemented, costs could be even higher due to payments based on old farm programs with the same falling commodity prices and an overall drop in net farm income.

In fact, the 2014 farm bill contains many reforms including the elimination of direct payments to farmers, which will save taxpayers $24 billion over the next ten years. The bill does not change program eligibility for nutrition assistance. Nor does the bill cut the current level of nutrition benefits for the approximately two million men, women and children in Illinois who need such assistance.

And it’s important to consider one more important factor: we can guess all we want, but no one knows for sure what commodity prices will be this year, let alone in ten years.

Bottom line, the farm bill helps farmers plan for the future and provides consumers with stable food prices. That’s something we should all be able to get behind.

 

Well, it’s that time of year, again — it’s time to celebrate National FFA Week!

I’ve talked a lot about FFA here on our blog. I’ve talked about my experiences in the organization and how it benefited me. But I’m a farm kid — FFA was made for me, right?

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Well, yes…kind of. I was the target audience, especially when the organization was founded back in 1928. But over the years, things have definitely changed. Fewer and fewer kids made plans to go back to the farm itself, but wanted to stay active in agriculture. Which is why, in 1988, the organization changed its name from Future Farmers of America to simply the National FFA Organization.

FFA Week

What does that means for kids today? You don’t have to be going back to the farm to join FFA. You don’t even have to be from a farm to join FFA. Heck, you might not even have plans (yet) to be in some agriculture-related profession after school.

What am I getting at here? The FFA isn’t just for farm kids like me — it’s for everyone and benefits everyone.

From leadership and public speaking skills to responsibility and ambition, FFA members gain more than their fair share of life lessons and accomplishments. No matter their background, or where they’re going, FFA can offer the world to students.

It offered the world to me.

FFA Week 3

 

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