January10,2019

WUDWelcomesNewTechnicalServicesRepresentative

DarbyToth!

Western United Dairymen (WUD) welcomed a new mem-

ber to our dairy family this week –Darby Toth. Darby will

be assisting dairy families with technical services related

to grant management and awards, robotics assistance,

WUD opposition research and production practice public

relations, and many other on-farm assistance tools. Her

work with producers will highlight dairy’s methane reduc-

tions, water conservation and improved air quality perfor-

mance for an enhanced partnership with the state. Darby

has extensive dairy farming roots and her industry con-

nections and knowledge are a great addition to the WUD

team.

Darby Toth is a graduate of Cal Poly, San Luis Obispo with a Bachelor of Science degree in Dairy

Science and a minor in Agricultural Communication. She also holds her single-subject agriculture

teaching credential. She previously worked in internship positions focused on milk cooperative

member relations and dairy marketing and was actively involved in the Cal Poly Dairy Science

Program. Darby has family who dairy in Merced, and she will now reside in Hanford. She is pas-

sionate about providing services to California Dairy Families. Darby can be reached at (760) 828-

0035, or darby@westernuniteddairymen.com

FirstBudgetProposalIncludesPositiveThingsforWUDLegislativePriorities By Anja Raudabaugh, CEO

Governor Gavin Newsom released his 2019-20 state budget today – a plan that makes significant investments in education, homelessness, housing and an increase in the state’s rainy day fund. Contained in the budget are meaningful investments for agriculture including several key programs WUD has been advocating for in Sacramento. One of the key objectives is addressing and reducing the risk of wildfires – specifically making key investments in reducing fuel loads and proactive vegetation management programs. Although the Governor’s budget funds the Smart Climate Agriculture specifically for methane reduction for dairy farmers at $25 million that figure represents a significant reduction from previous budget year allocations. WUD will be engaging with the Governor to ensure the administration understands that meaningful support from the state’s Cap & Trade program is needed to ensure our industry can achieve our methane reduc-tion objectives.

Additional budget allocations to key Departments & Agencies are highlighted on page 3.

Notice:WUD’sBoardwillbeMeetinginFresnothisMonth WUD’s Board Meeting will be held January 18th at the Fresno County Farm Bureau office (1274

W. Hedges Ave, Fresno) at 9am. The meeting is open to all members. If you plan on attending,

please RSVP to Norma (209-527-6453 or ncastillo@westernuniteddairymen.com).

Page 2

What’supandwhat’snot—yourweeklymarketupdate By Annie AcMoody, Director of Economic Analysis

It was a week of increases, where crude oil reached the highest price in 5 weeks and the Dow

Jones climbed up the last five consecutive days. Dairy commodities picked up the trend and for a

change, none of the dairy commodities going into FMMO price formulas decreased this week.

Butter was the only one unchanged.

The biggest gain (2.33 cents) came for block cheese, which marked the highest price since Decem-

ber 1. At $1.4212/lb, it can hardly be cause for celebration, but the stop in the recent decline was

very helpful. Especially because block cheese at the CME is still hanging out below $1.40/lb, despite a 2

-cent gain today. CME barrels are faring even worse, settling at $1.2475/lb today. Fortunately, USDA

reported barrel prices have not fallen into the same abyss, remaining above $1.30/lb throughout De-

cember and climbing to $1.3263/lb this week, up 0.35 cent from last week. The average cheddar price

at the latest Global Dairy Trade (GDT) auction is up 9 cents from a month ago, at $1.53/lb.

The nonfat dry milk price jumped up by 1.48 cents this week, to $0.9165/lb. It had been a stretch long-

er than a Wyoming highway since the price reached that level: the last time the price was above $0.91/

lb was July 2017. In Europe the powder price is reported at $0.90/lb like in the US—a dime above a

month ago. In October 2018 (the latest month of data available on CLAL), skim milk powder production

in Europe was down 8% compared to the year before. Germany has the largest share of Europe’s skim

milk powder production (30%). For the January-November 2018 period, its skim milk powder production

was down 1.4% year-over-year. Significant volumes continuing to move outside of European Union in-

tervention stocks are also likely helping the price to slowly inch upwards. New Zealand milk pro-

duction continues to be ahead of year ago levels, but reports of strong exports are preventing

significant increases in stocks. Overall, this is good news for global powder stocks. Based on

USDA’s latest report, U.S. powder stocks were down 20% year-over-year in October.

USDA

butter

prices

reported

in the Na-

tional

Dairy

Product

Sales Re-

port

(NDPSR), the source for FMMO pricing,

hovered a bit below CME prices this week—the opposite of what is happening in the cheese market. Still, the price of $2.2168/lb

this week was identical to last week, which is better than a decline. And as a bonus, sales volume was almost double what it was

last week.

Dry whey prices climbed 1.41 cents this week, to $0.4843/lb. Dairy Market News (DMN) reports some positive news regarding

dry whey in the West: “western sales of dry whey are increasing this week, along with the increase in prices. Chinese purchasers

are still careful when buying U.S. dry whey as they await to see what happens with trade agreements between the two countries.

Contractual volumes of dry whey are moving on planned schedules, but spot trades are facing the hurdle of limited supplies. In-

ventories seem balanced to a little tighter for current demand.”

WUDthanksits

Goldsponsors!

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150000

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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

10

00

lbs

U.S. Powder Stocks

2015 2016

2017 2018

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Reminder:SignUpforWUD’sTextAlert Please sign your dairy up to receive urgent text alerts from WUD. We will notify your area of critical issues like flooding, animal activists, meetings, etc. If you would like to sign up, send a text message to (209)541-6773 with your name and dairy address so we know each district alert to include you in. If at any time you would like to opt out, just text NO to the same number.

SecretaryPerdueStatementonExtensionofMarketFacilitationProgramDeadline

(Washington,D.C.,January8,2019) – U.S. Secretary of Agriculture Sonny Perdue today extended the deadline for agricultural

producers to apply for payments under the Market Facilitation Program as provided by the trade mitigation program adminis-

tered by the U.S. Department of Agriculture (USDA). The original deadline had been January 15, 2019, but farmers have been

unable to apply for the program since the lapse in federal funding caused the closure of USDA Farm Service Agency (FSA) offic-

es at the end of business on December 28, 2018.

Secretary Perdue issued the following statement: “President Trump instructed me, as Secretary of Agriculture, to craft a pro-

gram that would protect farmers from unjustified retaliatory tariffs from foreign nations. As part of that package, the Market

Facilitation Program has been making payments directly to farmers who have suffered trade damage. Using existing funds, we

were able to keep FSA offices open as long as possible, but unfortunately had to close them when funding ran out. We will

therefore extend the application deadline for a period of time equal to the number of business days FSA offices were closed,

once the government shutdown ends. Farmers who have already applied for the program and certified their 2018 production

have continued to receive payments. Meanwhile, I continue to urge members of Congress to redouble their efforts to pass an

appropriations bill that President Trump will sign and end the lapse in funding so that we may again provide full services to our

farmers and ranchers.”

Continued from page 1...FirstBudgetProposalIncludesPositiveThingsforWUDLegislativePriorities Additional budget allocations to key Departments & Agencies are highlighted here:

CDFA:

Expansion in funding for the Healthy Soils Program to $18 million

$25 million for dairy digester and alternative manure management projects

Construction of a new animal health diagnostic lab in Turlock focusing on poultry, but not exclusive to poultry

Increased staffing at the mountain border stations

Direction to wind down the milk marketing program, maintain a pooling only program and phase out 34 positions

CALEPA:

SB 901 allocation of $200 million for forest health, fuel reduction and prescribed fire

Of that money, $165 million for landscape level work through grants

10 new dedicated CALFIRE crews to conduct prescribed burns and mechanical thinning

Safe and Affordable Drinking Water Fund

$168 million from Prop 68 for capital needs

$10 million general fund for emergency water supplies

$10 million general fund for technical assistance

Establish SADW fund, allocation of funds to SWRCB and CDFA to create the account

Utilize the SADW fund to provide O&M

Resources:

$415 million for Cal Fire in Resources Budget

Fire prevention - $213 million

Enhancing aviation resources - $128 million & 7 new C-130s

$109.4 million to convert Huey helicopters to Blackhawks

$64.4 million expanded fire firefighter surge capacity, 13 new engines and crews, convert 5 California Conservation Corp crews to full time firefighting crews

$9.7 million for remote sensing, satellite imagery, analysis, etc.

What’sUpandWhat’sNot—YourWeeklyMarketUpdate

Page !2

Average ($/lb) AA Butter NFDM 40# Blocks Barrels Dry Whey

December $2.2425 $0.9020 $1.3742 $1.3742 $0.4685

January $2.2168 $0.9165 $1.4212 $1.3263 $0.4843

January9 $2.2168 $0.9165 $1.4212 $1.3263 $0.4843

Fromlastweek - +1.48 cents +2.33 cents +0.35 cent +1.41 cents

Latest commodity prices

Latest class prices—Order 51

Price ($/cwt) Class I LA Class II Class III Class IV PPD Statistical Uniform Price

October $20.37 $15.54 $15.53 $15.01

November $17.62 $15.63 $14.44 $15.06 $1.00 $14.94(Tulare)-$15.44(LA)*

December $17.15 $15.67 $13.78 $15.09

This forecast is for informational purposes only and

should not be used as a price guarantee. It is subject

to change as market conditions change.

Under the California system, this chart included

actual, estimated and forecasted overbase prices.

Since overbase prices are no longer relevant un-

der the FMMO, this chart will focus on the Califor-

nia all-milk price forecast. Since we have historical

data on the all-milk price and will continue to get

such data, it seems an appropriate measure to

show price trends in the state as we move

through the transition.

Dairy-RP Due to a lapse in federal funding the RMA website is not being updated. Dairy-RP operates under the RMA.

CA quota prices

Price ($/cwt) # of buyers # of sellers # sales Low end Average High end Quota SNF transferred

November 5 7 5 $425 $456 $490 12,245.74

December 5 5 4 $400 $442 $500 3,130.36

January 5 6 5 $300 $323 $358 7,269.50

While this table may look the same as last month, the data source is differ-ent. FMMO class price formulas use data from the National Dairy Product Survey Report and this is what this table will include in the future. An-nounced cheese prices are an aver-age of blocks and barrels, therefore those two will be the same once USDA announces monthly prices.

CDFA will no longer mail out quota sales price information each month. We will include it on this page to allow our interested members to keep track.

*Does not include the quota deduction. After deduction the range is: $14.56-$15.06

$15.97 $16.46

$15.20 $14.83 $15.02 $15.39

September October November December Jan-19 Feb

California All Milk Prices (Actual and Forecast)

Forecast(based on futures prices

as of 1.10.19)

Actual

Estimated