WEEKLY UPDATE February 24, 2017

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SAVE THE DATEWUD Convention 2017 March 29, 2017 Modesto, CA

ATTENTION: Hotels are quickly filling, be sure to get your reservations soon!

DEADLINE: Sponsorships due by March 1, 2017

USDA holds informational session in Clovisby Annie AcMoody, Director of Economic Analysis

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USDA officials came to Clovis this week to give a Federal Milk Marketing Order (FMMO) 101 lesson to an eager crowd. The attendees, which included approximately 65 producers, processors, media and attorneys, learned about the ins and outs of FMMOs through an hour-long presentation. In particular, details of the California FMMO proposal were outlined and explained in front of an intrigued audience. For a topic riddled with complicated jargon and technical details, the agency did as well as it could have to sum up the proposal succinctly. Once USDA finished their presentation, time was allowed for questions; to ensure a speedy process, only written questions were considered. Inquiries pertaining to the “why” of the decision were not allowed, so the bulk of the discussion centered on clarifications, technical details and procedural follow-ups. On that front specifically, USDA reiterated that comments on the proposal were due by May 15, 2017. The agency also estimated they would issue a final decision around Fall 2017 (if there are no requests to cancel the proceedings). From there, producers would get to vote on the proposed order. Qualified coops, who are allowed to bloc vote on behalf of their producers, did not officially announce if they will exercise that right or not. A yes vote from two-thirds of the producers voting or two-thirds of the milk volume voting is required for a proposal to be implemented.

Only one non-USDA person was allowed some time at the podium and it was a representative from the California Department of Food and Agriculture (CDFA), who made a brief statement on the quota piece of the proposal. Unfortunately, that statement did not provide additional information. CDFA, just like all of us, only saw USDA’s proposal when it was released and has been looking into it since. The dynamics at play on this topic are rather interesting: while USDA’s proposal allows the quota program to continue and authorizes deductions from pooled producers’ milk checks to fund said program, it passes the baton to CDFA on how to carry the program. CDFA then has to determine how they could carry such program (including non-pooled producers or not) and what procedures would be necessary to implement it. CDFA is considered an interested party and therefore cannot communicate, just like all of us, with USDA on this matter due to ex parte rules prohibiting USDA staff from discussing these issues. The state agency reassured the audience this was a top priority and that details would be published in a CDFA publication as soon as possible.

If a fly on the wall could speak to its impressions of the mood in the room, it would probably state that reactions to the proposal were all over the place. From giddy excitement to boiling irritation, interested parties seem to have a wide range of opinions on what this means for California. Fortunately, the most common stance appears to be one of careful hope and consideration, coupled with a desire for finding out more about the implications. At this time, it’s probably a wise approach. This has been a marathon, and trying to rush to the finish line may not be helpful for the last necessary steps.

If you are interested in viewing the meeting, USDA posted a video here. WUD also provided a brief summary of the key points of the proposal in a previous Friday Update; if you missed it, you can find it here. As this process unfolds, we will continue to analyze potential impacts for California producers and provide comments to USDA to ensure this proposal comes out as beneficial as it can be for our members.

Mark your calendars and book your hotel room for the annual WUD Convention next month. The event will host a full agenda of informative sessions and discussions. At the conclusion, enjoy the Membership and Sponsor Dinner Party on Wednesday, March 29 from 5-10pm at the Dust Bowl Brewery.

EVERYONE MUST RSVP for the Wednesday, March 29th Dust Bowl Dinner Cost is $100 per person for non-members. The following hotels are close by the restaurant:

• Holiday Inn Express & Suites, Turlock Hwy 99 • Fairfield Inn & Suites by Marriott, Turlock • Candlewood Suites, Turlock

The California dairy industry lost one of its top legal minds and advocates last week. John Vlahos, who had been an integral part of the California milk pricing world since 1964 –defending California dairy farmers at the state appellate court level all the way up to the U.S. Supreme Court, has passed away. Mr. Vlahos has recently been a vocal advocate for dairy farmers on the litigation team to include California dairy producers into a Federal Milk Marketing Order. His guiding light and deep background of the California dairy industry will be greatly missed.

The son of Greek immigrants, Dimitrios and Eleni Vlahos, John grew up in Tracy and Oakland. He attended the University of California, graduated Phi Beta Kappa with a degree in economics in 1957, and was the sports editor of The Daily Cal. "Every Cal sports fan knows the meaning of suffering," John would say, and he certainly suffered a lot. From 1948 through 2015, John personally attended all but seven Cal football games; for five decades, he served as the internal press box announcer at Memorial Stadium. In 2007, backed by fundraising from the Class of 1957, he edited and produced a new Cal Songbook. After earning a law degree from Hastings, John clerked for Justice Raymond Sullivan at the California Court of Appeal. In 1962, he was the eighth person hired at the firm that became Hanson Bridgett. In the early years he represented everyone from a bank robber to the maker of "Star Trek"-themed wine bottles. As the firm grew, he became the managing partner and also represented the Golden Gate Bridge District, the League of California Milk Producers, SamTrans, and BART. On multiple occasions John announced his retirement, but it never quite took, and he finished his last major case in 2016. John died in his sleep from lung cancer, at home, with his family around. He is survived by his wife, Martha; his sisters Betty Christian and Marie Petris; his children, Jennifer, James, and Jonathan; and seven grandchildren.

Friends and family are invited to a celebration of John's life, which will take place at 3pm on March 12, 2017 at the Mira Vista Golf & Country Club in El Cerrito.

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Forecasted prices are not a guarantee of future prices and are subject to change as markets fluctuate.

John Vlahos Passes AwayJohn James Vlahos January 4, 1936-February 9, 2017

WUD Membership and Sponsor Dinner Party

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Allied Business Members at a Glance

Federal Milk Marketing Orders (FMMO) are a very timely topic. To keep you informed on what prices are doing in parts of the country under Federal Orders, we will frequently include those class prices in the Friday Update.

Federal Order Class Prices

Price $/cwt Class 1 4a 4b Overbase Quota

December $19.36 $14.79 $16.59 $15.80 $17.50

January $18.91 $15.67 $15.99 $15.65 $17.35

February $18.28 $15.45 $15.81 $15.56 $17.26 Prices in italics are estimates.

Latest Class Prices

Average AA Butter NFDM 40# Blocks Barrels Dry Whey

January $2.2556 $0.9904 $1.6828 $1.5760 $0.4441

February $2.1629 $1.0101 $1.6388 $1.6046 $0.4875

February 24 $2.1300 $1.0099 $1.5750 $1.5175 $0.4950

Week to date 2.75 cents 1.2 cents 0.5 cent 10.25 cents ———

Commodity Markets: CME - California Plants

Estimated* producer CWT prices

Dairy Managment Inc. RCH Group Sunworks Solar Power Multimin USA Kirby Manufacturing ATI Machinery Inc Pacific Gas & Company Damrell, Nelson, Schrimp, Pallios, Pacher & Silva

Month Class I Class II Class III Class IV Dec. all milk price

January $17.45 $16.36 $16.77 $16.19 $18.80

2017 Annual Meeting and Convention Double Tree Hotel

1150 9th Street Modesto, CA 95354

Come One Come All to our Convention Kick off “Night Cap Social”

Tuesday, March 28, 2017 at 7:00pm Double Tree Hotel – Napa Room Bar

Sponsored by: Damrell, Nelson, Schrimp, Pallios, Pacher & Silva

Wednesday, March 29th 2017 2017 Convention Topics:

* POLITICAL STRATEGY ROUNDTABLE; Washington D.C. and Sacramento

* LABOR UPDATES for PRODUCERS; Q&A to Follow

* INSURANCE: Are Your Insurance Costs Stressing You & Your Cows? The new experience mod calculation and ways you can corral costs.

* DAIRY PRICING UPDATE AND DAIRY JEOPARDY; Q&A to Follow

* THE DAIRY INDUSTRY’s ENVIRONMENTAL LOAD JUST GOT HEAVIER; How do we use technology and efficiencies to keep us producing most competitively?

Ladies Day: A “SPA”tacular day at the Erin Milan Salon & Spa has been planned for you. Come and get

massaged, pampered and spoiled until your body, hands and toes are content. (Call the WUD office to schedule your appointment today!)

All Day Virtual Trade Show * Mid-Morning and Mid-Afternoon Social Breaks

“Work Hard, Play Harder: blow off some post-convention steam & join us for an evening of good food & drinks CA dairy-style”

Member & Sponsor Dinner Dust Bowl Brewery

3000 Fulkerth Rd. Turlock, CA Wednesday, March 29, 2017 * 5:00pm – 10:00pm

**EVERYONE MUST RSVP online or call (209) 527-6453** Members Complementary / Non-Members $100 per person

www.westernuniteddairymen.com

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