Small traders express concern over heavy taxation on dairy industry

ISLAMABAD: The Islamabad Chamber of Small Traders on Sunday expressed serious concern over heavy taxation on local dairy industry and imported milk, which has resulted in hike in the price of packed milk twice in a short span.

It asked the government to review the taxes and take note of the situation as it will hit health of masses, especially babies, half of whom are already underfed.Talking to Tabassum Anwar, Chairperson of IWCCI Standing Committee on Trade and Industry, he said that prices of sugar have also been increased, which is unjustified.

He said the government has imposed 20 percent customs duty and 25 percent regulatory duty on import of milk powder to please the elite class, keeping in view the upcoming elections. Shahid Rasheed Butt said the decision was unacceptable as masses should not pay the cost of ambitions of the political elite.

He said the EU has given trade relaxations to Pakistan while our policymakers have returned the favour by imposing additional taxes on their exports, which may compel them to change their mind and that will further damage dwindling exports.

Additional taxes have also pushed the local dairy sector into a crisis, which has increased the cost of doing business. He noted that the revenue measures will result in around 30 percent fall in the demand of milk hitting masses and the people linked to this business.

Pakistan is the third largest milk producer in the world producing around 55 million tonnes of milk, production is increasing by four percent per year while the demand is increasing 15 percent annually.

Pakistan exports skimmed and fresh milk while it also imports 40,000 tonnes of milk, mainly from India, which is equal to 320,000 tonnes of fresh milk, he informed.The global milk demand is set to increase by 36 percent in nine years, which can be an opportunity for Pakistan.

Resource: https://www.thenews.com.pk/print/139197-Small-traders-express-concern-over-heavy-taxation-on-dairy-industry

European Union dairy intervention boosts unviable

THE EU paying dairy farmers to slow milk production will be good for global markets in the short term, according to Dairy Australia analyst John ­Droppert.

But the downside was that it might keep unviable dairy farmers in business in the ­medium term, Mr Droppert said.

The EU Commission’s €500 million ($A740 million) package to support dairy farmers announced last month ­includes €150 million ($A221 million) to ­encourage milk production cuts across three months. EU nations have swamped the globe with milk, adding to the oversupply that has ­depressed global prices.

Milk production has started to slow, but the most recent UK Agriculture and Horticulture Development Board figures from May showed a lift of 0.8 per cent in milk deliveries across the EU compared with the same month last year.

“Milk production was ­already starting to slow down, handing out money at this point, I think the effect will be fairly limited,” Mr Droppert said.

There’s a feeling in the wind that we are starting to see an improvement, anything to help slow down (production) in the short term will help.

“But handing money to marginal producers to keep them viable into the future may not be such a good thing in the medium term.”

In the past month global prices have shown a small ­improvement, fat products, such as butter, have increased $US150-$US200 ($A195-$260) a tonne, while milk powder has remained stable and skim milk powder lifted up to $US100 a tonne, according to Mr ­Droppert.

Near-term pricing on Global Dairy Trade has improved recently, but Mr Droppert said there had been tightening of the market in later contracts as well.

“It is not so much that they are going up, but a feeling that they are not going down as we head towards the slow and steady recovery,” he said.

Acting Australian Dairy Farmers president David Basham said the EU intervention “might slow down milk production quickly, but it might be keeping people in business in the EU ... longer than they would have”.

Mr Basham welcomed the move to cut supply in a bid to help prices but said the EU’s regular market intervention put uncertainty in the market and prompted speculators to enter into the market.

Resource: http://www.weeklytimesnow.com.au/agribusiness/dairy/european-union-dairy-intervention-boosts-unviable/news-story/1cf57f7083ba62cc1297f0002c1146b5

Meadow Gold recalls dairy products in four states

The Meadow Gold Dairy plant in Boise, ID, is voluntarily recalling Meadow Gold brand Old Style whipping cream and Meadow Gold DairyPure brand whipping cream and half and half because insufficient pasteurization may have failed to kill pathogens in the products.

No illnesses had been reported in connection to the products as of the posting of the recall notice June 1 on the Food and Drug Administration’s website.

“It is possible that pathogens present in raw milk, including Salmonella, Campylobacter, Listeria, and/or E. coli, may have survived and, if ingested, could cause serious or life threatening issues,” the dairy company stated in the recall notice.

“The recall involves approximately 10,000 units of the affected product, which was distributed in four states including Idaho, Oregon, Wyoming and Utah through numerous retail outlets and food service settings. The company is actively notifying customers and is in the process of retrieving the affected product.”

The recalled whipping cream and half and half can be identified by the following label information:

    Meadow Gold DairyPure Half and Half — Quarts with UPC number 4190007913, date of 06-17-16, and plant code of 16-05;
    Meadow Gold “Old Style” Whipping Cream — Pints with UPC number 1570013313, date code of 06-24-16, and a plant code of 16-05;
    Meadow Gold DairyPure Whipping Cream — Half pints with UPC number 1570010018, date code of 06-24-16, and plant code of 16-05;
    Meadow Gold DairyPure Whipping Cream — Quarts with UPC number 1570013210, date of 06-24-16, and plant code of 16-05; and
    Meadow Gold DairyPure Whipping Cream — Gallons with UPC number 1570016615, date of 06-24-16, and plant code 16-05.

Meadow Gold Dairy officials discovered the potential problem during a routine review of production records, according to the recall notice.

“Consumers who have this product should not consume it. They should discard it and may return the product package to the place of purchase for a full refund or exchange,” according to the recall notice. “Consumers with questions can contact the company at 800-587-2259 Monday through Friday from 8 a.m. to 5 p.m. Central time.”

Resource: http://www.foodsafetynews.com/2016/06/meadow-gold-recalls-dairy-products-in-four-states/#.V2kpkzUpfIU

Dairy prices hit 4-month top, despite whole milk powder weakness

Dairy prices rose to their highest level since January at the GlobalDairyTrade auction, but benchmark whole milk powder prices were down, amid ideas that New Zealand dairy production has been much better than previously thought.

Dairy prices, as measured by the GlobalDairyTrade index, rose by 3.4% at the latest bi-monthly auction event.

But the rise disguised diverging fortunes, as whole milk powder prices fell back 1.7%, while prices for skimmed milk powder soared 12.1%.

Premium narrows

The jump in skimmed milk powder marks a change in fortunes for the commodity, which has been falling back against whole milk powder.

At the last the discount of skimmed milk powder to whole milk powder reached $593 a tonne, the highest since October 2013.

After Wednesday's auction, the premium stands at just $338 a tonne.

Supportive summer

The performance for whole milk powder prices was slightly worse than expected, with production from New Zealand, the world's top exporter and the dominant player in whole milk powder markets, proving more resilient than thought.

"New Zealand late‑season production has held up better than expected thanks to good summer pasture availability," said Tobin Gorey, at Commonwealth Bank of Australia.

Dairy Australia said New Zealand's production had fallen less than expected, due to "with timely rainfall and warm temperatures maintaining good pasture cover in many regions".

And for farmers who use feed in addition to pasture" lower demand and a shortage of storage for supplementary feeds such as feed grains, palm kernel and maize silage are contributing to sharp price reductions for these products," the industry body said.

Milk production in New Zealand was down 2.1% year on year between June 2015 and March 2016, Dairy Australia said, with overall production in the year to May 31 2016 down by just 3%.

Earlier in the season there was talk that production might fall by as much as 10%.

Global surplus

Dairy Australia warned that globally, "supply continues to outpace demand," and inventories are building up, particularly in Europe.

"The European Union continues to produce significant growth, while US farmers have seen margins cushioned by cheap feed grain prices."

"These stocks will likely slow any emerging price recovery," the industry body said.

Australian production to fall

Still, Australian production is expected ease due to lower prices paid to farmers.

Australian farmers in the southern, export-focused regions saw cuts to farmgate milk prices in April and May of this year.

"Although it remains too early to quantify the impact of the recent milk price cuts, it is clear that farmer confidence will be significantly impacted," Dairy Australia said.

But this fall in confidence could result in lower output in 2016-17, which would be supportive for the global milk market.

"As always, regional variation is expected, but a national volume total below that of 2015-16 is considered highly likely," Dairy Australia said.
Resource:  http://www.agrimoney.com/news/dairy-prices-hit-4-month-top-despite-whole-milk-powder-weakness--9607.html

Aging processing plants have exceeded capacity, forcing producers to dump skim milk daily

Already forced for months to dump skim milk because there isn’t enough processing capacity in Ontario, a bad situation could get worse if action isn’t taken to modernize aging plants, Ontario’s dairy farmers are warning.

In testimony before the Senate’s Committee on Agriculture and Forestry, Peter Gould, CEO of Dairy Farmers of Ontario said there could be a devastating impact on rural Ontario and rural Canada in the absence of a well-thought-out strategy.

“The status quo is not an option. Doing nothing is not an option,” Gould said. “It’s not a pretty picture.”

Processing plants that turned skim milk into powder hit their capacity 12 months ago in Ontario, Quebec and the Maritimes. The industry has been disposing of skim milk almost every day since, he said.

Tens of millions of kilograms of skim milk have been used for animal feed, the lowest-priced market. Some skim milk has been dumped into lagoons or manure pits.

Canada has a dozen processing plants that make skim milk powder in a system that uses dryers. Out of the 12, 10 of the dryers are more than 40 years old, Gould said.

“For all practical purposes, they have outlived their useful life. In fact, any one of those dryers can fail at any time.”

Building new plants to replace the dryers will cost in the hundreds of millions of dollars and would take about three years, he estimated.

Dairy farming is the largest agricultural sector in Ontario with most of the province’s 3,800 dairy farms located in Southwestern Ontario.

The president of the Dairy Processors Association of Canada Jacques Lefebvre agreed with Gould’s bleak evaluation of the situation.

“The way it has been presented is pretty accurate,” Lefebvre said Tuesday.

The limited skim milk processing capacity also constrains Canada’s ability to produce enough butter to meet growing market demand, Gould testified.

Business is being turned away and it is questionable if the industry will ever be able to recapture the lost opportunities, he said.

Lefebvre said the positive part of the challenge facing the dairy sector is that there now is unprecedented co-operation between processors and producers to modernize the system in Canada.

The Dairy Farmers of Ontario moved in April to create a new class of milk with prices designed to encourage processors to invest in new facilities.

“The challenge has been in Canada is we have not created a marketplace that is conducive to domestic processors investing in these modern plants because we price that use of skim at such a high level,” said Graham Lloyd, general counsel, for Dairy Farmers of Ontario.

The new class of milk has created a competitive marketplace, Lloyd said.
Resource: http://www.lfpress.com/2016/06/01/aging-processing-plants-have-exceeded-capacity-forcing-producers-to-dump-skim-milk-daily

Falling cattle numbers attributed to dairy price slump

The number of dairy cattle in New Zealand has fallen for the first time in about a decade, according to the 2015 Agricultural Production Survey.

Statistics New Zealand says the number of dairy cattle fell to 6.5 million in 2015, which was the first decline after nine years of consecutive increases.

Sheep numbers have continued to decline and there is now just over six sheep for every New Zealander, down from 13 sheep per person 20 years ago.
The survey is based on responses from farmers and foresters for the 12 months ended June last year, and it shows the number of dairy cattle has fallen as dairy farmers have slaughtered cows because of the slump in dairy prices.

The national dairy herd hit a record high of 6.7 million in 2014.

The biggest fall in animal numbers is in the Waikato dairy heartland where there were 153,000 fewer dairy cattle than in 2014, while Taranaki dairy cattle numbers were down by 8 percent and in Canterbury it was 6 percent lower.

The survey also shows that sheep numbers fell by 2 percent to just over 29 million sheep.

The number of beef cattle was marginally lower at 3.5 million and deer numbers dropped 6 percent to 900,000.
Resource:http://www.radionz.co.nz/news/rural/303637/falling-cattle-numbers-attributed-to-dairy-price-slump

New Coles milk brand sparks derision from dairy farmers

Farmers have met a decision by Coles to create a milk brand that will deliver funding for the struggling industry with cynical laughter.

Coles will launch a new milk brand and divert 20¢ a litre from sales to an independent diary industry fund, which the retailer said would "provide direct support to farmers and invest in innovation to ensure the long-term future of the dairy sector".

It would also contribute $1 million to the fund.

The decision comes amid warnings dairy farmers will go out of business in the face of low global milk prices.

"It's important that we have a vibrant dairy farming sector, and we can only have that if we work together to ensure the long-term health of the industry," Coles managing director John Durkan said in a statement.

Farmers argue they have little respite from challenging global conditions in their home markets after Coles slashed the price of private-label milk to $1 a litre five years ago. Woolworths followed suit.

"It's incredibly ironic [the fund]," said Victorian dairy farmer Marian Macdonald.

"Now that Coles are killing the goose that laid the golden egg they're saying we'd better get some grain under their nose to keep the head up."
Coles milk profit rising

Coles is making more money from its private-label milk than when it struck a deal with the nation's biggest milk processor, Murray Goulburn, in 2013 because the prices it pays are pegged to the international price, which has dropped.

When global prices rise, Coles pays Murray Goulburn more for its milk. When it falls, it pays less. Coles pays a processing fee, regardless of the price for milk. The retail price has remained the same at $1 a litre.

Ms Macdonald said she didn't want to look a gift horse in the mouth and welcomed the prospect of funding for dairy farmers.

"We love that [Coles managing director] John Durkan has had an exorcism," Ms Macdonald said.

"Tell him we will forgive him for his past sins. We will even shout him a glass of milk, fresh from the cow."

When Murray Goulburn secured the Coles private-label contract, former managing director Gary Helou argued it could turn a profit from $1-a-litre milk, when other processors said they couldn't, because he would invest in new manufacturing plants that would lower production costs.
Shareholder backlash

Murray Goulburn is facing a shareholder class action and a probe by the Australian Competition and Consumer Commission after it shocked farmers and investors by slashing the price it would pay its farmers for milk.

It will struggle to meet half its net profit forecast outlined in the prospectus for its partial float on the Australian Securities Exchange less than a year ago, after management's expectations for Chinese demand for its milk powders failed to materialise. 

Coles says its private-label milk accounts for only 6 per cent of Murray Goulburn's production. The retailer, which has yet to set a price for the new brand, also says it will not make any profit from sales of the new label.

Its decision comes amid growing angst in the sector, with some farmers calling on Deputy Prime Minister Barnaby Joyce to intervene and establish an independent review of the industry.

Industry group Australian Dairy Farmers has argued a $1-a-litre milk price is unsustainable.

ADF president Simone Jollife and chief executive Ben Stapley have meeting with Coles and Woolworths executives this week.

Ms Jolliffe, a NSW dairy farmer, said many farmers were hurt because Murray Goulburn's decision to cut prices came so late in the season, well after budgets were set in place and costs incurred.

She said she wanted to understand the detail of Coles' new milk brand and how the fund would support farmers.

"We would welcome an opportunity to add value," Ms Jolliffe said.

Victorian dairy farmer Andrew Leahy said the world market was holding farmers to ransom and was thankful Coles was at least "trying to do something".

But he said it was still up to the consumer to choose what will probably be milk priced at a premium to Coles' private label.


Resource  :http://www.afr.com/business/retail/new-coles-milk-brand-sparks-derision-from-dairy-farmers-20160517-gox1sc