Thursday June 7 Ag News

World Meat Congress Gives Nebraska Producers Global Perspective on Trade

Trade talk dominated the World Meat Congress as more than 700 attendees from more than 40 different countries met in Dallas, Texas from May 30–June 1 to discuss the obstacles producers are facing.

Ed Lammers, of Hartington, Neb. was one of those attendees. A United Soybean Board member, Nebraska Soybean Board ex-officio and U.S. Meat Export Federation executive committee member, Lammers noted this was the first time the World Meat Congress had been held in the United States in 20 years.

Throughout the course of the congress, Lammers had conversations with an Irish ambassador, a German journalist and a British geneticist about trade concerns and cultural perceptions of producers.

He said his biggest takeaway came from a Mexican trade representative.

“As producers, we need to continue to voice our concerns to the industry, and to do so boldly,” Lammers said. “I thought that carried a lot of weight and opened up a lot of ears.”

Speakers at the congress also covered technology, branding, economics, industry trends and science-based production.

Lammers said there was a focus on producing enough food for the growing global population and urged soybean farmers to support animal agriculture with their product.

“As U.S. producers, it should be our moral prerogative to produce food for the world, while keeping sustainability in mind,” Lammers said.



Wheat Stem Maggot Adults Observed in South Dakota

The adult wheat stem maggots have been observed in winter wheat fields across South Dakota. However, experts from SDSU Extension, North Dakota and Nebraska say chemical management is not recommended.

"Wheat stem maggot feeding, it is still considered a minor injury and chemical management is not recommended," explained Adam Varenhorst, Assistant Professor & SDSU Extension Field Crop Entomologist. "The adults don't cause significant injury, the larvae of the wheat stem maggot cause white or bleached wheat heads later in the season."

Wheat that is damaged by the wheat stem maggot results in a white/dry head and stem to the first node where the flag leaf is attached. Researchers at SDSU Extension are working collaboratively with researchers from North Dakota and Nebraska to determine peak wheat stem maggot adult flights.

Are wheat stem maggots in your fields?
The wheat stem maggot adults are small yellow flies about one-fifth of an inch long with bright green eyes.

Adults have three black stripes present on their thorax, with the middle stripe longer than the other two. Adults also have a segment on their head that extends forward beyond the eyes. Adults of the wheat stem maggot are nectar feeders and lay eggs on the leaves and stems of wheat plants.

"Magnification may be required for identification," Varenhorst said.

When the eggs hatch, the larvae burrow into the stem and begin feeding near the flag leaf. This feeding prevents nutrient flow to the head.

A larger concern is that in 2017, wheat stem maggot feeding caused significant stand loss to corn fields in Nebraska. Researchers are working to determine the factors that contributed these unusual infestations.



Crop Management Clinic Provides Training on Crop and Pest Management

With Iowa’s planting season drastically impacted by cold and wet weather earlier this spring, now more than ever it is important to make sure crops are efficiently managed to ensure the best yields possible.

Many factors, including weather, pests, crop prices, input costs and crop growth and development, can have negative impacts on crops, potentially harming yields during harvest. Adequately prepare for this season by brushing up on crop management skills with Iowa State University Extension and Outreach researchers, management specialists and field agronomists.

Iowa State University’s Field Extension Education Laboratory (FEEL) will host the Summer 2018 Crop Management Clinic, July 12 from 9 a.m. to 4 p.m. The clinic provides interactive workshops and discussions to give patrons the best tools, resources and means-tested strategies to make the best crop management decisions in their corn or soybean fields.

“We have many demonstration plots that are set up to exemplify current research outcomes and mirror different management practices. Seeing some of these issues and management solutions in person is invaluable,” said Warren Pierson, coordinator of the Field Extension Educational Laboratory. “We encourage participants to go into these plots and dig or cut plants up to get a better idea of what is happening. Integrated crop management is important to make crop production and management decisions that are economical, and don’t result in negative consequences on the environment, and the future use of management tools.”

This event is open to anyone who has an interest in crop production and management. ISU Extension and Outreach will have a variety of agronomic professionals teaching the importance of water quality, pest and nutrient management and factors affecting yield that can occur in corn and soybean fields. As an intermediate level course, some of the topics covered will be geared toward crop management for future seasons, such as nematode management, full season weed control, and hybrid and seeding rate decisions. Other topics will benefit the attendees this summer and fall with decisions about fungicide applications, nitrogen management decisions, and soil health and indicators of soil health.

For a complete list of topics and instructors, visit the clinic website at www.aep.iastate.edu/feel/management.

FEEL is located at 1928 240th St. near Boone. Plan to arrive at 8:30 a.m. for registration with opening comments beginning at 8:55 a.m.

Advance registration is required to attend this event. Early registration is $125 and must be completed before midnight, June 29. Late registration is $150 until midnight, July 6. Registration includes refreshments, lunch and course materials. Additional information and online registration is available at http://www.aep.iastate.edu/feel/management. For any additional questions please visit the website above and take advantage of this growing season in crop management. This clinic qualifies for six continuing education credits for Iowa Certified Crop Advisers, subject to board approval, in the following categories: 1.0 nutrient management, 2.5 pest management, 1.5 soil and water management, 1.0 crop management.

For assistance with registration, receipts, cancellation or questions on the status of your registration contact ANR Program Services at 515-294-6429 or anr@iastate.edu.

Introductory field diagnostics July 11
A Field Diagnostic Clinic will take place the day prior, July 11, at FEEL. Attendees of this session receive a 50 percent discount on the purchase of “A Farmers Guide to Corn Diseases” discount (a total cost of $15). Visit www.aep.iastate.edu/feel/diagnostic if interested in attending the Field Diagnostic Clinic.



USDA Announces $309 Million Investment in Rural Electric Utilities

Assistant to the Secretary for Rural Development Anne Hazlett today announced that USDA is investing $309 million in 16 projects (PDF, 107 KB) to improve rural electric infrastructure in 12 states.

“Robust, modern infrastructure is a foundation for quality of life and economic opportunity no matter the zip code in which you live,” Hazlett said. “Under Secretary Perdue’s leadership, USDA is committed to being a strong partner in addressing rural infrastructure needs to support a more prosperous future in rural communities.”

Hazlett made the announcement here today during a visit to the Central Iowa Power Cooperative. One of its members, Farmers Electric Cooperative in Greenfield, Iowa, is receiving a $1.4 million USDA loan to invest in smart grid projects. Farmers plans to install more than 5,800 single-phase meters and additional meter reading equipment in its west-central Iowa service area.

Hazlett also announced that Harrison County REC, in Woodbine, Iowa, is receiving a $6 million loan to build 20 miles of electric line, improve 57 miles and make other system improvements. Its loan includes $578,000 for smart grid projects.

The loans announced today are being made through USDA’s Electric Infrastructure Loan and Loan Guarantee program. It helps finance generation, transmission and distribution projects; system improvements; and energy conservation projects in communities with 10,000 or fewer residents.

Farmers Electric Cooperative and Harrison County REC join many other rural electric cooperatives and utilities that partner with USDA to use smart grid for computer applications, two-way communications, geospatial information systems and other tools to increase the reliability and efficiency of electric power systems.

Today’s investments will build or improve 1,660 miles of electric line serving rural homes, farms and businesses. USDA is funding infrastructure improvements for utilities in Alabama, Arizona, California, Colorado, Iowa, Kansas, Missouri, North Carolina, New Mexico, Ohio, South Dakota and Washington.

Funding for these loans was included in the FY 2018 Omnibus spending bill. It allocates significant resources for infrastructure investments, including $6.25 billion to USDA for electric loans. The measure also directs Secretary Perdue to make investments in rural communities with the greatest infrastructure needs.

In addition to funding in the 2018 Omnibus bill, President Trump has proposed a $200 billion infrastructure investment plan that allocates 25 percent ($50 billion) to rural projects.

In April 2017, President Donald J. Trump established the Interagency Task Force on Agriculture and Rural Prosperity to identify legislative, regulatory and policy changes that could promote agriculture and prosperity in rural communities. In January 2018, Secretary Perdue presented the Task Force’s findings to President Trump. These findings included 31 recommendations to align the federal government with state, local and tribal governments to take advantage of opportunities that exist in rural America. Increasing investments in rural infrastructure is a key recommendation of the task force.



Strong April for U.S. Red Meat Exports, Including New Volume Record for Pork

April exports of U.S. pork, beef and lamb were sharply higher than a year ago in both volume and value, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Pork exports set a new volume record, fueled by tremendous demand in Mexico, while beef exports posted the best-ever results for the month of April.

April pork export volume was 230,049 metric tons (mt), up 13 percent from a year ago and topping the previous high set in November 2016. April export value was $584.1 million, also up 13 percent. For January through April, pork export volume was 4 percent ahead of last year’s record pace at 866,346 mt, while value increased 9 percent to $2.29 billion. (For pork muscle cuts, excluding variety meat, April was also a record volume month at 184,487 mt, up 18 percent from a year ago. Muscle cut export value was $480.6 million, up 14 percent.)

Exports accounted for nearly 30 percent of total pork production in April, up from 28.4 percent a year ago, while the percentage of muscle cuts exported also increased significantly (25.8 percent, up from 23.5 percent). Through April, the percentage of total production exported was fairly steady with last year at 27.4 percent, while muscle cuts jumped from 22.8 percent to 23.5 percent.

April pork export value averaged $58.45 per head slaughtered, up 6 percent from a year ago, while the January-April average increased 5 percent to $55.69.

Beef export volume was 111,213 mt in April, up 11 percent year-over-year. Export value was $676.7 million, up 23 percent and the fourth-highest on record. Through the first four months of 2018, exports were up 10 percent in volume to 429,286 mt. Export value was $2.59 billion, 20 percent above last year’s record pace.

Exports accounted for 14.1 percent of total beef production in April, up from 13.6 percent a year ago. For muscle cuts only, the percentage exported was 11.3 percent, up from 10.6 percent. For January through April, exports accounted for 13.4 percent of total production and 10.8 percent for muscle cuts, each up about half a percentage point from last year.

Beef export value averaged $328.46 per head of fed slaughter in April, up 16 percent from a year ago. Through April, per-head export value averaged $318.91, up 17 percent.

Even with growth in red meat production, both pork and beef exports have accounted for a larger share and contributed more dollars per head, indicating strong international demand.

Huge month for pork to Mexico; exports to Korea continued to surge
Mexico was again the pacesetter for pork exports in April, with volume reaching 79,019 mt – up 34 percent from a year ago and the second-largest on record. Export value to Mexico was $134.1 million, up 28 percent. Through the first four months of 2018, exports to Mexico were 7 percent above last year’s record volume pace at 282,675 mt, with value up 6 percent to $505.4 million.

Maintaining this pace will be challenging, however, with Mexico announcing retaliatory tariffs on imports of most U.S. pork products effective June 5. The tariff rate on chilled and frozen pork muscle cuts is 10 percent until July 5, when it is set to increase to 20 percent.

“The outstanding April performance for pork exports to Mexico really underscores the importance of this market to the U.S. industry and how it has been such a reliable trading partner for hams, picnics and other pork cuts,” said USMEF President and CEO Dan Halstrom. “USMEF will continue to emphasize the quality and consistency of U.S. pork to red meat customers in Mexico and make every effort to help U.S. suppliers retain their business. But make no mistake about it, the U.S. industry is going to have to fend off competitors who suddenly have a significant tariff rate advantage and see a clear opening into the Mexican market.”

Pork exports to South Korea continued to build momentum in April, with volume (25,370 mt, up 74 percent) and value ($74.1 million, up 81 percent) increasing significantly from a year ago. Through April, exports to Korea are on a record pace, climbing 44 percent in volume to 94,888 mt, valued at $276.1 million (up 55 percent). Strong growth in consumer demand and duty-free access under the Korea-U.S. Free Trade Agreement (KORUS) have fueled a rapidly expanding presence for U.S. pork in Korea.

While pork exports to the China/Hong Kong region were below year-ago levels in April, shipments remained relatively strong despite the additional 25 percent tariff on U.S. pork that took effect April 2. It is likely, however, that the trade impact will show up more dramatically in May export data and in coming months. The tariff increase essentially tripled China’s standard rate on frozen pork imports, taking it from 12 percent to 37 percent (the increase does not apply to Hong Kong, which still charges zero duty). April exports to China/Hong Kong were 41,567 mt, down 14 percent from a year ago, but slipped only slightly in value to $95.9 million. For January through April, exports to China/Hong Kong were 15 percent below last year’s pace in volume (153,248 mt) but steady in value at $356.6 million.

“It is encouraging to see that pork volumes to China/Hong Kong held up fairly well in April, but the tariff disadvantage is still having a negative impact on the U.S. industry and has pressured prices for key export items,” Halstrom noted. “It’s another situation in which our competitors are capitalizing on the extra cost associated with importing U.S. pork.”

For January through April, other highlights for U.S. pork include:
-    Exports to leading value market Japan were 1 percent below last year’s pace in volume (132,534 mt) but increased 1 percent in value ($544.8 million). This included a 5 percent decrease in chilled pork volume (68,532 mt), valued at $330 million (down 1 percent).
-    Strong growth in Colombia pushed pork exports to South America up 23 percent from a year ago in volume (39,520 mt) and 24 percent in value ($96.7 million).
-    Led by mainstay markets Honduras and Guatemala and sharply higher shipments to Panama, exports to Central America climbed 23 percent from a year ago in volume (26,459 mt) and 27 percent in value ($63.3 million).
-    Pork exports achieved solid growth in the Philippines and more than doubled from a year ago to Vietnam, as exports to the ASEAN region increased 20 percent in volume (15,435 mt) and 31 percent in value ($43.8 million).

Asian markets and Mexico highlight strong April for beef exports
Japan maintained its position as the leading volume and value market for U.S. beef, with April exports totaling 25,650 mt (up 9 percent from a year ago) valued at $166.6 million (up 16 percent). Through April, exports to Japan were steady with last year’s volume at 98,090 mt while value increased 10 percent to $626.1 million. This included a 4 percent increase in chilled beef to 47,322 mt, valued at $375 million (up 17 percent). Frozen shipments have regained momentum now that the 50 percent safeguard duty rate has expired. But with a 38.5 percent rate in place for both chilled and frozen beef, the U.S. remains at a large disadvantage compared to its top competitor, Australia.

U.S. beef continues to build tremendous momentum in South Korea, where April exports were up 62 percent from a year ago in volume (19,185 mt) and 72 percent in value ($134.8 million). For January through April, exports to Korea climbed 31 percent to 71,094 mt, valued at $501 million (up 45 percent). Chilled exports totaled 15,480 mt (up 29 percent) valued at $148 million (up 40 percent). In contrast to Japan, U.S. beef has a slight tariff advantage versus Australia, as KORUS was implemented earlier than the Korea-Australia Free Trade Agreement.

“The enthusiasm for U.S. beef in these markets may be at the highest level I’ve ever seen,” Halstrom said. “In nearly every segment of the retail and restaurant sectors, U.S. beef is attracting new customers with a wider range of cuts and menu items. It’s an exciting trend that’s not just limited to Japan and Korea, with U.S. beef’s popularity also strengthening in other Asian markets and in the Western Hemisphere.”

For January through April, other highlights for U.S. beef include:
-    In Mexico, exports were 5 percent ahead of last year’s pace in volume (78,435 mt) and 16 percent higher in value ($342.4 million). Demand was especially strong in April, as exports totaled 21,396 mt (up 22 percent and the largest since August), while value increased 33 percent to $92.1 million.
-    Exports to China/Hong Kong increased 23 percent in volume (46,043 mt) and surged 51 percent in value to $352.4 million. China still accounts for a small portion of these exports, as shipments to China were 2,299 mt valued at $21.3 million. China reopened to U.S. beef in June of last year. While U.S. beef is not yet subject to retaliatory duties in China, it remains on the proposed retaliation list with a possible additional tariff of 25 percent.
-    Taiwan continues to display a growing appetite for U.S. beef, especially for chilled cuts. Exports to Taiwan were 30 percent above last year’s pace in volume (17,500 mt) and 42 percent higher in value ($168.7 million). Chilled exports were up 43 percent in volume (7,605 mt) and value ($96 million), as U.S. beef captured 74 percent of Taiwan’s chilled beef market.
-    Steady growth in the Philippines and a tripling of exports to Indonesia pushed exports to the ASEAN region 35 percent above last year’s pace in volume (14,865 mt) and 37 percent higher in value ($82 million).
-    Exports to South America were up 14 percent in volume (8,971 mt) and 28 percent in value ($43.5 million), with the main destinations being Chile, Peru and Colombia. Leading market Chile was up 20 percent in volume (4,137 mt) and 14 percent in value ($22.5 million), though shipments slowed in March and April following a strong start to the year.

Solid April for lamb exports as 2018 rebound continues
April exports of U.S. lamb were well above last year’s low totals in both volume (973 mt, up 97 percent) and value ($1.9 million, up 48 percent). Through the first four months of 2018, exports climbed 39 percent in volume (3,457 mt) and 16 percent in value ($7.3 million). Growth was driven by stronger variety meat demand in Mexico and larger muscle cut shipments to the Bahamas, the Turks and Caicos Islands and Canada. Gabon and Angola also show promise as potential growth destinations for lamb variety meat.



Senate Agriculture Committee Leaders Announce Farm Bill Consideration

U.S. Senate Committee on Agriculture, Nutrition, and Forestry Chairman Pat Roberts, R-Kan., and Ranking Member Debbie Stabenow, D-Mich., today announced the Committee will hold a business meeting to consider the 2018 Senate Farm Bill. Legislative text and summaries will be available at ag.senate.gov prior to the meeting.

“We are pleased to announce the Senate Agriculture Committee’s timely consideration of the 2018 Farm Bill,” the Senators said. “It has been more than a year of travelling across the country listening to farmers, ranchers, rural communities, and those in need. Now the time has come to put what we’ve learned into a bipartisan bill that will provide much-needed certainty for agriculture, families, and rural America.”

Date:   Wednesday, June 13, 2018
Time:   9:30 a.m.
Place:  328A Russell Senate Office Building



GIAF Exports To FTA Partners Stay Strong In 2017/2018

After a record-breaking year, exports to the 20 countries with which the United States has free trade agreements (FTAs) have remained steady at 39 million metric tons thus far in 2017/2018 (September 2017-April 2018), according to data from the U.S. Department of Agriculture (USDA) and analysis by the U.S. Grains Council (USGC). These trading partners continue to represent some of the largest and most loyal customers for exports of U.S. corn, barley, sorghum, ethanol, distiller’s dried grains with solubles (DDGS) and other coarse grain products.

The North American Free Trade Agreement (NAFTA) once again ranks as the top FTA for grain-related trade. U.S. exports to Mexico and Canada benefit from geographic proximity and the duty-free access provided by NAFTA. Since its inception in 1994, U.S. agricultural exports to Canada and Mexico tripled and quintupled, respectively.

This growth continues as the Council works to find new areas of demand for U.S. coarse grains and co-products, like ethanol and DDGS, in NAFTA markets. Overall grain in all forms (GIAF) exports to the two countries are up nearly 5 percent year-over-year to 20.3 million tons. Mexico, Canada or both countries currently represent either the first or second largest markets for corn, ethanol, DDGS, barley, beef, pork, poultry and coarse grain products.

Mexico is the largest market for U.S. corn, so far increasing purchases by 8 percent from last year despite ongoing NAFTA talks. Mexico set a new record for U.S. corn purchases in 2016/2017, making Mexico’s increases this year even more notable.

Canada continues to import U.S. ethanol to cover domestic demand, representing the top market among U.S. FTA partners and second largest market for U.S. ethanol overall. Those gallons contribute to U.S. ethanol’s record-setting export streak, increasing 27 percent year-over-year to FTA partners to 381 million gallons. FTA partners South Korea and Colombia also are purchasing substantially more ethanol this marketing year, with increases of 71 percent to 44.9 million gallons and 239 percent to nearly 24.4 million gallons, respectively.

Mexico is responsible for the lion’s share of barley exports to FTA partners, increasing 15 percent to 267,000 tons (12.3 million bushels), thanks to growing demand from Mexico’s large industrial and small craft brewers. Overall, barley exports to FTA partners are up 3 percent year-over-year to 339,000 tons (nearly 15.6 million bushels).

Both Mexico and Canada are using more U.S. DDGS to meet growing demand for feed. Israel and Morocco, also both FTA partners, have realized double-digit growth in exports of DDGS, at 10 and 11 percent respectively. DDGS exports to FTA partners in total are up 5 percent from last year at this time to 3.23 million tons.

Trade disruptions with China continue to rattle the sorghum market, even as the Council and its sorghum partners work to educate world buyers about purchasing opportunities. Overall, sorghum exports to FTA partners are down significantly year-to-date. However, South Korea’s increased purchasing - from 637 tons (25,000 bushels) last year at this time to 58,300 tons (2.29 million bushels) demonstrates the power of staying well-connected and communicative with loyal buyers. The increase in tonnage was a direct result of the Council’s efforts to assist buyers and sellers in rerouting sorghum exports bound for China.

The enduring strength of demand from FTA partners once again emphasizes the importance of the market access provided by these agreements. Working to defend and expand markets allows the Council to do what it does best - capture short-term opportunities and build long-term demand for U.S. coarse grains and co-products.



Farmer Co-ops Applaud Introduction of the Accurate Labels Act

The National Council of Farmer Cooperatives (NCFC) today praised introduction of legislation that will help ensure that consumer product labels are based on science and common sense. The Accurate Labels Act (ALA), introduced in the Senate by Jerry Moran (R-Kan.) and in the House by Adam Kinzinger (R-Ill.) and Kurt Schrader (D-Ore.), would ensure that state and local labeling laws follow those two basic criteria.

“Consumers deserve clear, accurate and meaningful labels on the food and other products they buy. In too many cases today, state laws like California’s Proposition 65 make this impossible; under that law, a profusion of labels based on dubious science means that consumers are confused and likely to treat the labels as visual white noise,” said Chuck Conner, president and CEO of NCFC. “The ALA will reestablish some common sense by making states and localities ‘show their work’ when setting out requirements for mandatory warning labels.”

The ALA has three main objectives:
-    Establish science-based criteria for all new state and local labeling requirements by making states and localities document the science behind their proposed labeling mandates;
-    Allow state-mandated product information to be provided through SmartLabelTM and on web sites;
-    Ensure that covered product is risk-based.

“I would like to applaud the leadership of Senator Moran and Representatives Kinzinger and Schrader in introducing this legislation. They recognize that a growing number of proposals for state and local warning labels threaten to make a tangled patchwork of requirements that will confuse consumers and add new burdens on co-ops and their farmer-owners,” Conner continued. “NCFC urges the Senate Commerce Committee and the House Energy & Commerce Committee to schedule hearings as soon as possible to hear more about this problem and the need for the ALA.”



Bayer Closes Monsanto Acquisition

Bayer successfully completed the acquisition of Monsanto on Thursday. Shares in the U.S. company will no longer be traded on the New York Stock Exchange, with Bayer now the sole owner of Monsanto Company. Monsanto shareholders are being paid 128 U.S. dollars per share. J.P. Morgan assisted Bayer with processing the purchase price payment for the largest acquisition in the company’s history. According to the conditional approval from the United States Department of Justice, the integration of Monsanto into Bayer can take place as soon as the divestments to BASF have been completed. This integration process is expected to commence in approximately two months.

“Today is a great day: for our customers – farmers around the world whom we will be able to help secure and improve their harvests even better; for our shareholders, because this transaction has the potential to create significant value; and for consumers and broader society, because we will be even better placed to help the world’s farmers grow more healthy and affordable food in a sustainable manner. As a leading innovation engine in agriculture, we offer employees around the world attractive jobs and development opportunities,” said Werner Baumann, Chairman of the Bayer Board of Management. “Our sustainability targets are as important to us as our financial targets. We aim to live up to the heightened responsibility that a leadership position in agriculture entails and to deepen our dialogue with society.”

“Today’s closing represents an important milestone toward the vision of creating a leading agricultural company, supporting growers in their efforts to be more productive and sustainable for the benefit of our planet and consumers,” said Hugh Grant, outgoing Chairman and CEO of Monsanto. “I am proud of the path we have paved as Monsanto and look forward to the combined company helping move modern agriculture forward.”

Liam Condon, member of the Bayer Board of Management, will lead the combined Crop Science Division when the integration commences. Until that time, Monsanto will operate independently from Bayer.



USDA Announces Producer Approval of California Federal Milk Marketing Order

The U.S. Department of Agriculture (USDA) announced today that California dairy producers have voted to approve a Federal Milk Marketing Order (FMMO) for the entire State of California. As a result of this favorable vote, USDA today published a final rule in the Federal Register indicating that approval. The new California FMMO will be implemented October 17, 2018, with publication of the Announcement of Advanced Prices and Pricing Factors, and affected parties must comply with all provisions beginning November 1, 2018. USDA will work over the next few months to educate handlers who will become regulated by the new FMMO.

California represents over 18 percent of all U.S. milk production and is currently regulated by a state milk marketing order administered by California Department of Agriculture (CDFA). Once this new FMMO is established, over 80 percent of the U.S. milk supply would fall under the FMMO regulatory framework.

FMMOs are legal instruments that regulate the sale of milk between dairy farmers and the first buyer. Where appropriate, the California FMMO adopts the uniform order provisions contained in the 10 current FMMOs in the national system. These uniform provisions include, but are not limited to, dairy product classification, end-product price formulas, and the producer-handler definition. The new FMMO recognizes the unique market structure of the California dairy industry through tailored, performance-based standards to determine eligibility for pool participation. The order also provides for the recognition of producer quota as administered by the CDFA.

The entire record of the rulemaking is available at www.ams.usda.gov/caorder.