CA Federal Milk Marketing Orders focus of WUD convention panel

The challenges and opportunities of Federal and California Milk Marketing Orders will be

the topic of a panel discussion set for Thursday, March 6, at Western United Dairymen’s

annual convention in San Luis Obispo. Those in attendance can expect an in-depth discus-

sion as attorneys Chip English, a partner at Davis, Wright, Tremaine LLP and John J. Vla-

hos, Partner, Hanson Bridgett LLP, and WUD’s long-time legal advocate, are joined by

Dana Hamilton Coale, Deputy Administrator, USDA Agricultural Marketing Service (AMS)

Dairy Programs. The panel will be moderated by Michael Marsh, CEO, Western United

Dairymen. Increasing attention is being paid to Federal Milk Marketing Orders as Califor-

nia dairy families face an ongoing economic crisis. The session will wrap up with a question

and answer session allowing for audience participation. The panel begins at 9:30 a.m. on

the second day of the convention Thursday, March 6.

Federal Order informational meetings in Tulare Jan. 16, and Jan

17 in Modesto

Two informational meetings will be held next week to discuss Federal Milk Marketing Or-

ders that might be considered for the State of California following passage of a Farm Bill.

WUD President Tom Barcellos has made arrangements to hold an informational meeting

with Deputy USDA Administrator Dana Coale and her team in Tulare on Thursday, Jan.

16, at 1 pm. Coale and her team will be available to answer questions about Federal Milk

Marketing Orders that might be considered for the State of California following passage of

a Farm Bill. The meeting will be open to the public and held at the Tulare County Ag Com-

missioner’s Auditorium located at 4437 S. Laspina Street in Tulare. The next day Friday,

Jan. 17 a meeting will be held with Dana Coale and her team in Modesto at 3 p.m. at the

Double Tree Hotel in Modesto, 1150 9th Street. The meeting is open to the public.

New California labor laws for 2014

By Anthony P. Raimondo

There are plenty of labor and immigration laws for WUD members to be aware of in 2014.

Here is Part One of a two-part overview of the new laws by attorney Anthony Raimondo.

Minimum Wage

AB 10 raises California’s current minimum wage of $8.00 per hour to $9.00 per hour effec-

tive July 1, 2014, and to $10 per hour effective January 1, 2016.

AB 442 expands the penalty available for citations issued by the Labor Commissioner for

failing to pay minimum wage to include a requirement that the employer pay liquidated

damages to the employee, in addition to existing penalties.

Many dairies are providing housing that they believe counts toward minimum wage. The

value of housing can only count toward minimum wage where there is a written agreement

authorizing the credit. All dairies should ensure that they have a written agreement for

their housing.

(Continued on pg. 3)

January 10, 2014

WEEKLY UPDATE

W e e k l y U p d a t e d e l i v e r y o p t i o n s

Send change of address or request for Update delivery to Western United Dairymen by phone or fax, or email to info@westernuniteddairymen.com.

1315 K Street, Modesto, CA 95354 Telephone: 209.527.6453 Fax: 209.527.0630 www.westernuniteddairymen.com

M i s s i n g S o m e t h i n g ? S u b s c r i b e

t o W U D H e a d l i n e N e w s

Industry leaders turn to Western United Dairymen’s daily e-newsletter to keep up on the latest developments. California Dairy Industry Headline News is a reliable source for the latest news on pric-ing, industry events and meetings, state and federal legislation, and environmental regulations. To sign up email WUD Communications Director Mark Looker at mark-looker@yahoo.com.

L i k e u s o n

F a c e b o o k

Western United Dairymen has a Facebook page. “Like Us” today and join in on the conversation about California dairy families. We can be found at https://www.facebook.com/pages/Western-United-Dairymen/

Market Reports 2

Field Representative Corner 3

Overbase price details

Air Board extends Ag Fleet rule

sign-ups

4

Winter Meeting Dates 4

Inside this issue:

*Actual announced prices are in BOLD, estimates are in Italics

Commodity Markets: CME – Cal i fornia P lants

Est imated* Producer CWT. Prices

PAGE 2

What’s up and what’s not—your weekly market update By Annie AcMoody, MS, Director of Economic Analysis

While most of the country was

frozen still, the sun seemed to

shine on dairy markets this

week as butter and cheese brightened

the January price outlook. Block cheese

really went out of its way to make the

first full week of 2014 a memorable

one. After gaining 0.75 cents Monday,

an impressive 6 cents was added Tues-

day. “Oohs” and “aahs” were likely ut-

tered Wednesday in barns everywhere

as the price jumped 9 cents. Market participants retired early for the weekend as nothing

happened Thursday and Friday. The net gain for the week, 15.75 cents, brought the price to

$2.20/lb – the highest since June 2008 and 8.5 cents shy of an all time record. While the

“polar vortex” brought some transportation issues to the Midwest and no doubt created tem-

porary market tightness, we are approaching a typically slower demand period after Super-

bowl orders are filled. Still, higher prices in the powder complex are most likely creating com-

petition for cheese milk supplies, which is good for price strength. Globally, cheese demand

seems to be faring well. Notably, USDA data released this week pointed to a new record in

cheese exports for November 2013. It represented a 54% increase from last year. A word of

caution: price strength remains in Oceania, but with the latest Global Dairy Trade (GDT)

auction average at $2.11/lb, U.S. cheese may start to incur price competitiveness issues.

Butter’s value certainly climbed faster than Gov. Christie’s popularity this week as the price

gain totaled an impressive 10.5 cents. The first gain, 5 cents, occurred Monday as four loads

traded hands. No change occurred Tuesday before a load sold Wednesday and an unfilled bid

to buy pushed the price up another 3 cents. Another unfilled bid to buy pushed the price up

2.5 cents Thursday. Nothing happened Friday. The resulting price, $1.6750/lb, is the highest

since November 11, 2013. Even more so than cheese, January butter prices typically experi-

ence seasonal slackness this time of year so this recent jump is certainly welcomed. According

to USDA data, butter trade also fared well in November, with exports up 214% from last

year. Average butter prices climbed 8 cents at the latest GDT, to $1.92/lb.

The California nonfat dry milk price seems to be reaching out for the moon these days, as

another weekly gain of 2.28 cents pushed the price up to $1.9664/lb - the highest since the

week of November 2, 2007. The sales volume, at 7.2 million pounds, was higher than last

week (+2.7 million pounds). Looking at the Western states, DMN reports the spot powder

price for the region continued to climb, as the average gained 2.5 cents since last week to

reach an impressive $2.065/lb.

(Continued on pg. 3)

Average AA Butter NFDM 40# Blocks Barrels Dry Whey

November $1.5845 $1.8681 $1.8513 $1.7910 $0.5666

December $1.6130 $1.9153 $1.9237 $1.8429 $0.5809

January $1.5945 $1.9576 $2.0743 $1.9960 $0.5938

January 10 $1.6750 $1.9664 $2.2000 $1.9500 $0.6038

Week to date 10.50 cents 2.28 cents 15.75 cents .24 cents 1.5 cents

Month Class 1 4a 4b Overbase Quota

November $21.90 $20.63 $17.30 $18.61 $20.31

December $22.84 $21.16 $18.03 $19.26 $20.96

January $22.98 $21.45 $19.55 $20.16 $21.86

USDA Dairy Market News

Butter 7 sales, 8 bids unfilled, 0 offer uncovered. Butter prices gained 10.5 cents this week. Butter prices strengthened as the week progressed. The market tone is steady as bulk butter inventories are tight. Butter production is steady to increasing across the regions with focus on 82% pro-duction for export and rebuilding bulk butter supplies. Butter churn operators continue to churn at increased rates, taking advan-tage of additional cream supplies available. Cheese 0 sale, 4 bids unfilled, 0 offer uncovered. Block prices gained 15.75 cents this week. Cheese production is mixed across the country. Cold weather and winter storms in the Midwest and East caused some interruptions in production over the week. Some manufacturers are running full schedules to fill orders while others are slowing production to clear inventories. Cheddar inter-est remains good with some slower sales for other varieties. Wholesale cheese prices are mixed with a firm undertone . Milk Production Dairy processors in CALIFORNIA report farm milk production and pickup volumes are maintaining a slow upward trend. Fluid demand is steady as most educational institutions have refilled their pipelines for meal programs. Cooperative members indicate feed and operating costs con-tinue to weigh on profitability. In addition, the California Depart-ment of Water Resources issued the first Snow Survey of 2014, showing the statewide snowpack water content at about 20% of normal for this time of year. Dry Products Western nonfat dry milk prices are mostly higher and the market is maintaining a firm tone. Do-mestic interest is also strong, with end users and resellers striving to meet near term needs. Various buyers indicate they have been unable to build inven-tories prior to the end of the year, and F.O.B. spot loads remain tight. Nonfat dry milk production in the West is trending season-ally higher as manufacturing milk volumes increase.

Source: USDA Dairy Market News

January 10, 2014 Weekly Update

PAGE 3 January 10, 2014 Weekly Update

(Continued from pg. 2—Weekly Market Update)

The government agency describes the market as firm and reports the following positive

news: “manufacturers indicate demand is steady to higher as some international trans-

fer points reopen following the holidays. Domestic interest is also strong, with end us-

ers and resellers striving to meet near term needs.” International prices continue to

show strength as the latest average skim milk powder price at the GDT settled at

$2.13/lb. This is 8 cents lower than the previous auction. With contracts’ averages near-

ing $2.04/lb until next summer, the powder outlook for 2014 remains quite positive.

Dry whey prices picked up some steam this week, as the price increased 1.5 cents, to

60.38 cents per pound. If the monthly average remains above 60 cents per pound, it will

generate 75 cents per hundredweight in the Class 4b formula – the highest level on the

pricing scale. DMN reports “export demand is strong and helping to raise the market.

Whey production is being limited by lower cheese production and competition from con-

centrated whey products.”

Corn futures experienced a small jump in light of USDA’s Crop Production report re-

leased today. The report indeed revised the corn yield estimate to 158.8 bu/acre, down

from the December estimate of 160.4 bu. March corn futures reacted to the news by

jumping 20.75 cents to $4.3275/bu.

Domestic Work Employees (Continued from pg. 1— New CA Labor Laws)

AB 241 enacts the Domestic Worker Bill of Rights, which provides for specific overtime

pay for certain in-home employees; a “domestic work employee who is a personal atten-

dant.” The law establishes very specific definitions and obligations with respect to in

home employees. Those with in-home care providers should be aware of these rules.

One way to protect yourself is to only obtain such employees through a third party

agency that can be responsible for their wages.

Meal and Rest Periods – Expansion to Heat Illness Recovery Periods

SB 435 expands meal and rest break obligations to “recovery” periods taken to prevent

heat illness. Under SB 435, an employer cannot require an employee to work during a

recovery period mandated by state law under Cal/OSHA’s heat illness standard.

An employer that does not provide an employee with a recovery period must pay the

same premium penalty that exists for unprovided meal or rest breaks — one additional

hour of pay for each workday that the meal, rest or recovery period is not provided.

Unfortunately, this may trigger a whole new range of meal and rest break claims in agriculture.

Employers with outdoor places of employment, including dairies, are subject to Cal/OSHA’s heat illness standard, which

allows for cool-down periods in the shade of no less than five minutes at a time on an “as-needed” basis for employees to pro-

tect themselves from overheating. Handbooks should state that employees are entitled to take time to rest in hot condi-

tions.

Protections for Exercising Rights Under Labor Code

AB 263 amends Labor Code Section 98.6, which protects employees who assert their rights under the Labor Code from re-

taliation. AB 263 prohibits retaliation or any other adverse action against employees for exercising their rights under the

Labor Code (current law only explicitly prohibits discharge and discrimination).

AB 263 also expands protected conduct under Labor Code Section 98.6 to specifically include a written or oral complaint by

an employee that he/she is owed unpaid wages.

Critically, AB 263 adds a civil penalty of up to $10,000 per employee per violation.

Labor Commissioner Lien on Property for Employee Complaints

AB 1386 requires that the amount due under a Labor Commissioner order, decision or award that has become final shall

create a lien that the Labor Commissioner may record on the employer’s real property.

(Look for part-two of this story in next week’s Friday Update)

Field Representative

Corner

The January column features news

from Jim Griffin districts 11 & 12. Jim

is available by phone at:

(661) 487-9195

Happy 2014! This year is starting on a positive note, a mild winter, but we desperately need rain.

The District 11 free annual lunch-eon meeting is set for January 14 at noon at the Chalet Basque Restau-rant, and District 12 annual dinner meeting is set for February 4 at the Old Spaghetti Factory in Riverside. Come join us for a great meal and current information.

Santa Ana annual water board re-ports are due on January 15. Con-tact me if you have any questions, don’t forget the GPS coordinates have been added to the report.

The residential water samples for the Lahontan RB6 region have been sampled and test results are back. The reports are due January 15.

Don’t forget your reservations for the WUD Convention in San Luis Obispo March 5-7.

Jim Griffin

Districts 11 and 12

PAGE 4

What does overbase price really mean?

The overbase price in the California system is a distribution of remaining pool revenues after payments are made for allow-

ances and quota. However, something that might not be so obvious to producers is that everyone’s overbase price is likely

to be different. How can that be?

Overbase price for an individual producer is based upon the components found in that producer’s milk. The price published

by CDFA as the monthly overbase price is based upon a standardized milk possessing 3.5% butterfat and 8.7% solids-not-

fat. However, since all milk is not at this standardized level, overbase prices vary from producer to producer.

Let’s see what this means using some of the data for November from CDFA.

So as an example, this means that for November milk, a Holstein producer receiving $19.25 per cwt for his milk averaging

3.62% butterfat and 8.82% solids-not-fat received an overbase payment out of the pool of $18.98 and $0.27 bonus from the

creamery on a cwt basis. Likewise, a Jersey herd shipper receiving $21.75 per cwt for his November milk averaging 4.73%

butterfat and 9.3% solids-not-fat received an overbase payment out of the pool of $21.52 and a $0.23 bonus from the cream-

ery.

While it may seem that the producer who received $21.75/cwt must have received a generous premium, his creamery’s sup-

plemental contribution was in fact $0.04/cwt lower than the producer who received $19.25/cwt. When comparing with fel-

low neighbors the value of their milk check, one has to keep in mind a large portion of the difference can simply come from

differences in milk components.

Air Board extends sign-ups for the ag fleet rule to Jan. 31

The California Air Resources Board has extended sign-ups for the Truck and Bus Rule to January 31. "AG" fleets must still

meet the previous eligibility criteria for annual mileage and must have been owned by January 1, 2009. One important

change affecting agriculture is that the threshold for "low use" trucks is being changed from 1,000 to 5,000 miles per

year. Trucks that meet the "low use" designation are not required to retrofit under the rule. However, they must still re-

port their annual mileage. Those who already have the exemption have until January 31, 2014 to report their 2013 mile-

age.

The regulatory changes that are anticipated won't go to the ARB until April so you should report now through January 31,

2014. Some flexibility programs will be retroactive. For example, the Agricultural vehicle extension will be retroactive to

2011. You will need to report any newly added vehicle odometer readings for January 1, 2011-2014. Paper forms have been

updated to report retro-actively but you will need to report previous years’ odometer readings via email if using the elec-

tronic system.

To access the updated Reporting System visit http://www.arb.ca.gov/msprog/onrdiesel/reportinginfo.htm. For more information, visit the Truck Stop at http://www.arb.ca.gov/msprog/truckstop/truckstop.htm, call 866-6DIESEL or email 8666Diesel@arb.ca.gov.

Butterfat % SNF % Overbase

CDFA standardized 3.5 8.7 $18.61

Jersey herd 4.73 9.3 $21.52

Holstein herd 3.62 8.82 $18.98

January 10, 2014 Weekly Update

Winter Meeting Dates

Date District Social Dinner Locations 1/13/14 - Monday 9 6:30pm 7:00pm Hanford-Old Thyme Company 2459 N. 10th Ave, Hanford

1/14/14- Tuesday 11 N/A 12-Noon Bakersfield -Chalet Basque 200 Oak St, Bakersfield

1/14/14 -Tuesday 8 6:30pm 7:00pm Tulare-Heritage Complex 4500 South Laspina St, Tulare

1/27/14 - Monday 3 6:30pm 7:00pm Petaluma- Hermann Sons Hall 860 Western Ave., Petaluma

1/28/14 - Tuesday 10 6:30pm 7:00pm Ferndale-The VI 400 Ocean Ave, Ferndale

1/29/14 - Wednesday 1 6:30pm 7:00pm Orland-Rolling Hills Casino 2655 Everette Freeman Way, Corning

2/4/14 - Tuesday 12 6:30pm 7:00pm Ontario-Old Spaghetti Factory 3191 Mission Inn Ave, Riverside

2/10/14 - Monday 7 6:30pm 7:00pm Fresno-Fresno Farm Bureau 1274 W. Hedges, Fresno