Friday, January 8, 2016
Fresno Business Journal
Valley dairies struggle to survive as milk price continues to sour
By George Lurie
An abundance of cheap oil translates into $2-a-gallon gas and lower fuel costs for businesses involved in transportation and manufacturing.
But an oversupply of milk — and the rock-bottom prices dairymen are now getting because of the imbalance — is resulting in tough times at Valley dairies.
With milk futures currently trading south of $15 per hundred weight on the Chicago Mercantile Exchange, it’s been a bleak winter for dairymen, most of whom need a $16-to-$17-per-hundredweight milk price to pay their operating expenses.
“No one is going to make any money at these prices,” said Frank Mendonsa, president of Western United Dairymen and a Tipton-area dairyman. “It’s almost impossible just to break even.”
“Fuel is a relatively small cost for most dairies but the lower prices do help a little,” Mendonsa added. “But feed and labor are the game changers [in terms of operating costs]. Right now a lot of us are just holding on and hoping prices rebound in the second half of 2016.”
Since 2010, more than a third of the Valley’s dairies have been shuttered and with milk prices continuing to fall — and now butter and cheese prices also turning weaker — 2016 is shaping up to be a challenging year for the dairy industry.
“If Russia reopened its markets to imports, that would help,” Mendonsa said. “China is also not importing as much milk as usual.”
In fact, a new report from the U.S. Department of Agriculture forecasts Chinese demand for U.S. milk powder will decline by 35 percent in 2016 because of that country’s currently bulging stockpiles of commodities.
On a recent visit to Fresno, Karen Ross, California’s secretary of Food and Agriculture, called the state’s current milk marketing order system “clearly broken.”
In mid-2015, Ross adjusted higher, for at least one year, the so-called “overbase” price for Class 4b milk, which is dry whey used to make cheese. The Secretary’s directive boosted the 4b milk price by 46 cents. The change became effective on Aug. 1 of last year and runs through July 31 of this year.
Ross’s decision followed a June 2015 milk price hearing in Sacramento where dairy producers, already in the process of petitioning to join a federal milk marketing order, asked the CDFA boss to raise the 4b price so that it would be more in line with dry whey prices paid to dairymen in other parts of the country.
Ross’s move was welcomed by dairymen, who believe they have been getting underpaid for many years relative to dairymen in other states.
But for some, the 4b price hike has been too little too late. Mendonsa said that one of his dairyman friends is closing his Valley operation and moving to Wisconsin, where he plans to open a dairy because of “more favorable operating conditions.”
Mendonsa and many other milk producers have argued for a number of years that California’s current milk marketing order is biased in favor of milk processors who make cheese.
Rob Vandenheuvel, general manager of California’s Milk Producers Council, estimates California’s historically lower 4b prices have cost Golden State dairymen about $1.8 billion since 2010.
In a late-December interview with The Business Journal, Secretary Ross said she had kept closely abreast of the USDA milk hearings held for several months in September and October in Clovis.
Those hearings were convened by the federal agency to gather evidence as to whether the state’s dairies should be included in a federal milk marketing order.
Ross said she has yet to decide whether to extend the 4b price hike into a second year. “In part, it depends on market conditions,” she said, adding that she preferred to remain at arm’s length from the USDA’s milk hearing. But the CDFA secretary did express hope that any possible solution coming out of the USDA hearing “not result in a situation where we have winners and losers.”
Ross was referring to the state’s powerful cheese manufacturing interests, who have expressed concern before and during the hearing that a federal milk marketing order for the Golden State would hurt their industry, especially smaller and mid-sized companies.
Ross said that in 2016, she planned to “reach out” to dairy industry representatives from around the state and listen to their ideas for improving California’s $21 billion-a-year dairy industry.
Meanwhile, U.S. Secretary of Agriculture Tom Vilsack, to whom Ross once served as chief of staff, is not expected to announce his decision regarding a federal marketing order for California until early 2017.
If Vilsack comes up with a plan to include California in a federal order, it will be no easy feat given the state’s unique quota system that adds “book” value to many dairy operations and allows some dairymen to receive a premium as part of their monthly milk check.
And any plan put forth by Vilsack will still have to be approved by a majority of the state’s 1,400 dairy operators.
“Right now, the market is stagnant,” Mendonsa said. “There seems to be new dairies, especially north of us, that are going out of business every month. It’s a tough situation. And things are probably going to get tougher.”
Judge grants Gerawan Farming access to labor board documents
By Robert Rodriguez
A Sacramento Superior Court judge on Thursday partially granted Gerawan Farming Company’s request for documents related to an unfair labor practice complaint filed against it by the Agricultural Labor Relations Board.
Judge Timothy Frawley’s tentative ruling will likely be opposed in court Friday by the ALRB.
Frawley’s ruling requires the labor board to release documents related to the agency’s request for a temporary restraining order against the company. The state filed an unfair labor practice complaint against Gerawan and went to court to try to force it to rehire an employee it had suspended and later fired for insubordination.
The ALRB said the employee was fired for his support of the United Farm Workers union. Gerawan and the union have been at odds for several years over the representation of its field workers.
Court documents show Gerawan’s attorney wanted the documents supporting the restraining order request because they raised issues about the integrity of the ALRB’s investigation and the potential involvement of the board’s staff in the dispute.
Gerawan had become aware of a whistleblower within the ALRB who alleged that the investigation leading up to the request for a temporary restraining order was marred by “vague and misleading” information. The whistleblower also said that the board’s staff had become involved in the dispute by advising the employee to return to work despite having received a 10-day suspension.
Gerawan filed a public records act request for documents related to the temporary restraining order, but was denied by the ALRB, citing pending litigation and other legal arguments.
In his tentative ruling, the judge said the ALRB failed to meet the burden of showing why the documents were exempt from disclosure.
“Disclosing the documents will not, as the ALRB argues, invade the board’s legal privileges,” Frawley wrote in his decision.
Frawley granted access to the documents and the board’s authorization letter for the court action, but denied access to the documents related to the whistleblower claim.
“Gerawan and the public have a strong interest in the documents because they may shed light on the integrity of the ALRB’s investigation and the credibility of the ALRB’s evidence against Gerawan,” Frawley wrote.
ALRB officials declined to comment, citing pending litigation; Gerawan’s attorney David Schwarz could not be reached Thursday.
UFW attorney Mario Martinez opposed the release of the documents. In a May 12 letter to ALRB Chairman William Gould, Martinez said the union is concerned that the whistleblower’s complaint was “a disguised effort to undermine the integrity of the agency’s investigation into allegations that once again Gerawan – a repeat offender – has violated the Agricultural Labor Relations Act.”
Robert Rodriguez: 559-441-6327, @FresnoBeeBob, email@example.com
California citrus officials concerned about EPA effort to protect bees
By Robert Rodriguez
California citrus industry officials are raising concerns about the U.S. Environmental Protection Agency’s efforts to protect the nation’s bee population.
The EPA this week announced the first of four preliminary risk assessments for insecticides potentially harmful to bees, specifically neonicotinoids. Federal officials are concerned that citrus crops may have residues of pesticides in pollen and nectar above the threshold level.
Citrus industry officials dispute that finding.
“Our industry has a long history of working with the bee industry and participated in developing stringent regulations protective of bees that allow our two non-compatible industries to co-exist,” said Joel Nelsen, president of California Citrus Mutual in Exeter.
Nelsen said pesticides, including those containing neonicotinoids, are important in the fight against the the Asian citrus psyllid, a pest capable of carrying the incurable disease, Huanglongbing.
“We empathize with beekeepers dealing with colony collapse,” Nelsen said. “But, neonicotinoids are a vital tool in the battle to save the citrus industry.”
California Citrus Mutual is a member of the Pollinator Protection Work Group of the Pesticide Program Dialogue Committee, a federal advisory committee that meets with EPA on a regular basis to discuss pesticide issues.
Robert Rodriguez: 559-441-6327, @FresnoBeeBob, firstname.lastname@example.org
Courthouse News Service
Calif. Dinged for Plan to Fight Apple Moth
By Rebekah Kearn
SACRAMENTO, Calif. (CN) – California must prepare a new environmental study to go from trying to eradicate the light brown apple moth to controlling it indefinitely, a state appeals court ruled.
Named for its color and tendency to feed on apple fruit, leaves and shoots, the light brown apple moth is an invasive species native to Australia that has spread to several other places through the nursery trade including the British Isles, Hawaii, and New Zealand.
Males grow between 6 to 10 millimeters long, while females can reach 7 to 13 millimeters. Females make nests by rolling up a plant’s leaves and can lay anywhere between 3 to 150 eggs at a time.
The larvae primarily feed on the leaves, damaging the surface layers and affecting the plant’s growth patterns. Larvae also tunnel into developing fruits and can render a crop commercially unviable.
After its presence was confirmed in California in 2007, the state Department of Food and Agriculture and the U.S. Department of Agriculture instituted quarantines in 13 counties but were unable to curb the moth’s spread.
Declaring the light brown apple moth a threat to the state’s agriculture industry and the nation’s food supply, the state department circulated a draft environmental impact report for a program to eradicate it.
Among other things, the report identified several chemical and nonchemical tools to achieve eradication including releasing sterile moths into the environment, interfering with the moths’ mating pheromones, introducing stingless wasps to prey on moth eggs, and treating plants with approved insecticides. It also mentioned a “control” strategy, but did not further evaluate it since eradication was still considered feasible at the time.
A few weeks after the final report was published, the USDA issued a statement saying that eradication was no longer considered feasible and that a strategy of control and suppression was recommended.
Though the draft environmental report insisted that eradication is “fundamentally different” from control, the state department’s secretary approved a seven-year control program when certifying the report for the seven-year eradication program.
Citing the possibility of a 20 percent crop yield loss without a containment program, the department rejected a no-program alternative and concluded that, with proper mitigation measures – such as restriction of pesticides during spawning seasons – the program would have no significant unavoidable environmental impacts and declined to do further environmental review.
Several environmental groups challenged that conclusion in separate suits that were consolidated on appeal. They claimed the department’s 11th-hour change to a control program violated the California Environmental Quality Act by rendering the environmental report for the eradication program deficient, because it lacked an accurate project description, did not discuss a range of alternatives, and relied on a seven-year review period though the control program will last indefinitely.
The trial court denied both groups’ petitions for writ of administrative mandamus, a decision reversed Monday by the Third Appellate District.
The three-judge panel found that the environmental impact report was deficient before the department’s last-minute changes because it did not analyze pest control as a reasonable alternative to eradication. Nor did it discuss cumulative impacts of maintaining the control program longer than seven years, according to the ruling.
Refusing to evaluate the merits of a control program because it would not achieve the goal of eradication confuses the CEQA definition of project objectives and purposes, the panel found.
Since the true objective of the program was to protect California’s native plants and crops from the light brown apple moth, defining the program’s objective as eradication of the moth was “an improper ‘artificially narrow’ definition,” the panel found.
This is made more evident given that the revised program listed its objectives as protecting the state’s food supply and natural resources from the light brown apple moth rather than “controlling” the moth, according to the ruling.
Control should have been studied as an alternative to eradication because the department knew eradication could become untenable at any time, the court ruled.
“It is possible a control program may not be a viable alternative on the ground its unending nature would be more harmful to the environment than an eradication program. On the other hand, it could be that an eradication program would require more intensive application of tools than a control program, leveling out the environmental impacts. We do not know, because the California Department of Food and Agriculture skirted the issue,” Judge Harry E. Hull Jr. wrote for the panel.
“Had the department evaluated a ‘control’ program as an alternative to an ‘eradication’ program, the department may have rejected a control program on the ground the unending nature of it would be more harmful to the environment. At least that is the inference to be drawn from the environmental impact report’s drumbeat distinguishing the two. But that just goes to show the prejudice of the department’s last-minute shift from eradication to an unstudied control program.”
The judges rejected the department’s argument that approving a project with a narrower scope than the initial description is not improper, noting that there is no way to tell whether control will be narrower or broader than eradication because control was not studied as an alternative.
In fact, evidence in record seems to indicate that control will be more harmful than eradication because it could go on “forever,” Hull wrote.
The state found more success on its treatment of the no-program alternative and analysis of several proposed methods to kill the moth, as the panel found the groups could not show reversible error or support contentions of flawed analysis with adequate evidence.
However, the panel declined to “foreclose the possibility that updated evidence may alter the analysis in the event the department proceeds with further environmental review in order to continue its control program,” Hull wrote.
The court declined to address the environmental groups’ contentions that the environmental report did not adequately analyze the cumulative impacts of control versus eradication, because the finding of reversible error in the report’s failure to analyze control as an alternative necessitates the creation of a new cumulative impacts discussion in light of the control program’s longer duration.
The panel remanded the cases back to the superior court to grant the groups’ writ petitions.
Presiding Judge Vance Raye and Judge Cole Blease concurred.
Stephan Volker of Oakland, Erin Tobin with EarthJustice and Kathleen Goodhart with Cooley LLP’s San Francisco office represented the North Coast Rivers Alliance and its co-plaintiffs.
California Attorney General Kamala Harris represented the state.
Counsel for the parties did not immediately return emailed comment requests.
New York Times
Campbell Labels Will Disclose G.M.O. Ingredients
By Stephanie Stromjan
Breaking from its industry rivals, Campbell Soup will become the first major food company to begin disclosing the presence of genetically engineered ingredients like corn, soy and sugar beets in its products.
The company, the maker of brands like Pepperidge Farm, Prego, Plum Organics and V8 in addition to its namesake soups, is taking the unusual step — and possibly risking sales by alienating consumers averse to genetically modified organisms — as big food corporations face increasing pressure to be more open about their use of such ingredients.
Food companies have begun printing labels to comply with a new labeling law in Vermont, which has become a battleground over labeling that other states have been watching closely. Beginning in July, Vermont will require disclosure of genetically engineered ingredients, a measure opposed by most major food companies, which are seeking to supersede any state’s legislation with a voluntary federal solution.
Campbell is also breaking with its peers by calling for federal action to make mandatory a uniform labeling system of foods that contain such ingredients, commonly known as G. M.O. labeling, said Denise Morrison, chief executive of Campbell.
“We’re optimistic that a federal solution can be reached in a reasonable amount of time, but if that’s not the case, we’re preparing to label all our products across the portfolio,” Ms. Morrison said in an interview.
She said about three-quarters of the company’s products contained ingredients derived from corn, canola, soybeans or sugar beets, the four largest genetically engineered crops. The change in labeling is expected to take 12 to 18 months.
The first example provided by the company, for a SpaghettiO’s label prepared for Vermont, is sparsely worded and does not specify which individual ingredients are genetically altered. It simply states at the bottom of the label: “Partially produced with genetic engineering. For more information about G.M.O. ingredients, visit WhatsinMyFood.com.”
Other companies have reformulated a handful of products to replace such ingredients. General Mills now produces non-G.M.O. Cheerios, and others have put labels on some products verifying that they contain no genetically engineered components, like Tropicana juices.
But none have gone as far as Campbell, whose move is reminiscent of that by Whole Foods Markets, which almost three years ago created an uproar when it announced that, as of 2018, it would require all products sold in its stores to have labels disclosing the presence of ingredients from genetically altered crops.
More mainstream grocers like Kroger and Safeway have moved to highlight their selection of organic products, which by law cannot contain any genetically modified ingredients, and have quietly urged big food manufacturers not to oppose demands for G.M.O. labeling.
The number of products verified by the Non-GMO Project, a nonprofit group that certifies foods that are free of ingredients from genetically engineered sources, is now in the tens of thousands.
But many companies have long argued that a patchwork of state laws with different requirements for G.M.O. labeling will be cumbersome and expensive, and the quirks in the Vermont law are making their case.
Ms. Morrison noted, for example, that in Vermont, the cans of SpaghettiOs will have to be wrapped in one label stating that the product contains ingredients from genetically engineered sources because they fall under the jurisdiction of the Food and Drug Administration. But Campbell does not have to disclose that SpaghettiOs with Meatballs contains such ingredients because that product is governed by the Department of Agriculture — and the Vermont law applies only to products overseen by the F.D.A.
“A state-by-state patchwork of laws could be incredibly costly not only for our company but for the entire industry,” Ms. Morrison said. “That’s why we want the federal government to come up with a national standard that is mandatory.”
Campbell will seek advice from the Department of Agriculture and the F.D.A. about what language it might use on its packaging. In an interview with The Des Moines Register in December, Tom Vilsack, the agriculture secretary, said he planned to hold a meeting with food companies and others in the hope of reaching a compromise before the Vermont law goes into effect.
“I’m going to challenge them to get this thing fixed,” Mr. Vilsack told The Register, adding that he was worried about “chaos in the market” if other states follow suit. “That will cost the industry a substantial amount of money, hundreds of millions of dollars, if not more, and it will ultimately end up costing the consumer,” he said.
A spokeswoman for the Agriculture Department said no date had been set for the meeting, nor had any decisions been made about who would attend.
Ms. Morrison said that complying with Vermont’s law was expensive but that establishment of a national mandatory labeling standard to take effect over a period of time would allow companies to work the changes into their business operations with little cost. She noted that adoption of the 1990 Nutrition Labeling and Education Act, which required companies to add nutritional information to their labels, did not significantly raise costs.
Ms. Morrison said she could not speculate on how the move to label all of Campbell’s products might affect the company’s sales. In 2011, food manufacturers themselves introduced a program called Facts Up Front to make information about the amount of sugar, salt, fat and calories in their products even more obvious by putting it out front in an easy-to-read format, which had no notable impact on sales.
Last year, Campbell created the website that offers information about the ingredients in its products and how they are used, including those items that come from genetically engineered crops.
It discloses, for instance, that among the ingredients in Campbell’s Cream of Mushroom soup, the vegetable oil, monosodium glutamate and modified food starch may come from genetically engineered sources. The website has had no apparent impact on sales, according to a company spokeswoman.
“We’ve always believed consumers have a right to know what’s in their food,” Ms. Morrison said. “We know that 92 percent of Americans support G.M.O. labeling, and transparency is a critical part of our purpose.”
Phil Lempert, a food industry expert and founder of Supermarketguru.com, said it could be risky for a company to disclose genetically altered ingredients. “I think it would get a lot of credit for transparency and that its stock would get a pop, if it were publicly traded,” Mr. Lempert said. “But I think a consumer could be confused by it and put the product back on the shelf and grab something else.”
Mr. Lempert and other marketing experts recommended that the company use clear language to inform its consumers.
“We’re in uncharted territory here,” said Carl Jorgensen, director of global consumer strategy and wellness at Daymon Worldwide, a consulting firm. While studies have shown that consumers favor such labeling, he said he did not know of data collected on the impact of labels on sales.
Campbell joined other major food companies in fighting efforts to impose mandatory labeling in California and Washington State, spending more than $1 million, according to the Environmental Working Group. It is also a member of the Grocery Manufacturers Association, a trade group that has spent millions trying to get a bill passed in Congress that would make labeling voluntary and pre-empt state labeling efforts.
“We will withdraw from any coalition that doesn’t support mandatory labeling,” Ms. Morrison said. “We were involved in fighting the state ballots in California and Washington out of concern over a state-by-state patchwork, yet we didn’t participate in the fights in any other state beyond those. Any money we did spend after that was in support of seeking a federal solution.”
A version of this article appears in print on January 8, 2016, on page B1 of the New York edition with the headline: A New Fact on the Food Label.
Ranchers cited by armed group have reputation for kindness
BY Gosia Wozniacka
PORTLAND, Ore. (AP) – A prominent ranching family whose legal case sparked an armed occupation of a wildlife preserve has lived for three generations in Oregon’s high desert, building a large cattle operation and stellar reputations for kindness and generosity.
The Hammonds are known for supporting charitable and civic causes in a remote region where residents rely on each other for survival and fellowship. They’ve also clashed repeatedly with the federal government over land management, water rights and other issues.
Dwight Hammond, 73, and his son Steven Hammond, 46, have been embroiled for more than five years in a legal dispute over several fires they lit that damaged federal property. The two men were convicted of arson and this week returned to prison to serve out longer sentences, which stoked long-simmering hostility between ranchers and government officials over management of federal land for cattle grazing.
The armed anti-government group that has occupied a building at a national wildlife refuge near the Hammond ranch cited the Hammonds’ experience as one of several cases of government overreach. The men’s re-imprisonment also drew anger from other ranchers who admire the Hammonds and believe the sentences are too harsh.
The Hammonds “are the nicest people that ever walked the foot of this earth,” said Merlin Rupp, 80, a longtime local resident. “They’d do anything for me at the drop of a hat, and they got a raw deal.”
Rupp was among those who spoke out Wednesday in support of the family at an emotional community meeting called to discuss the occupation of the nature preserve. The Hammonds have not sought publicity and have distanced themselves from the armed protest.
Letters written in 2012 to the judge presiding over the case show that the Hammonds have served on school and farm-related boards and donated money, cattle and labor to countless fundraisers and events. They also supported local businesses and helped the local 4-H club.
Father and son have also helped others in crisis. When a neighbor’s daughter was injured in a car wreck, the Hammonds hayed their fields. When a fire burned a nearby homestead, the Hammonds let the rancher’s cattle graze on their feed. And when another neighbor’s bulls were trapped on a rim by heavy snow, Dwight Hammond flew his airplane to drop bales of hay for them, according to the letters.
In Harney County, home to about 7,700 people and more than 104,000 cows, ranching has long been a way of life. But in recent decades, concerns over the environmental brought changes in range-management rules, leading to conflicts.
Dwight Hammond and his own father bought the ranch at the foot of Steens Mountain just south of the town of Burns in 1964. The family owns nearly 13,000 acres of fields full of scrubby bushes, grasses and sagebrush. The purchase price included several federal grazing allotments – the rights to lease public land for grazing – common in the West, where the federal government owns nearly half the land.
As the Malheur National Wildlife Refuge grew to surround the Hammond ranch, the family had to stave off pressure from the federal government to sell the ranch, Dwight Hammond told The Associated Press last week. The rancher said officials mismanaged the rangeland, including failing to do controlled burns for invasive plants that snuff out grass growth.
Federal officials repeatedly accused the ranchers of breaking environmental laws and declining to follow rules. Over the years, officials refused to renew some of the family’s grazing allotments and increased fees on others. They also restricted access to water sources used by the Hammonds.
In 1994, after officials sought to fence off a water source on the refuge to keep out the Hammond cows, the ranchers destroyed the fence and obstructed federal workers from continuing construction, The Oregonian newspaper reported.
Father and son were arrested on felony charges of interfering with federal employees, court records show. But after area ranchers protested, their charges were reduced to misdemeanors and later dropped.
Earl Kisler, the special agent who arrested the two in 1994, told the newspaper the Hammonds and other ranchers made repeated threats – including death threats – against refuge managers.
In the arson case filed against the Hammonds in 2010, prosecutors said the ranchers stepped out of line on land that didn’t belong to them because they believed the government was too slow in controlling invasive species. Father and son were charged with starting at least eight fires during a period of more than 20 years, though a jury three years ago found them guilty of setting only two.
The Hammonds acknowledged lighting fires on their own property in 2001 to reduce the growth of invasive junipers and again in 2006 to protect their winter feed and property from wildfires. The fires spread onto federal land leased by the family and charred just under 140 acres.
Prosecutors said grazing leases did not give the Hammonds exclusive use of the land or permission to burn public property. They said the 2001 fire was used to cover up poaching of deer.
In 2012, a judge sided with the Hammonds. Though the arson convictions require a five-year minimum sentence, he said those sentences did not fit the crime. As a result, the elder Hammond spent three months in prison, the son a little over a year.
But the government appealed and the 9th U.S. Circuit Court of Appeals later ordered the Hammonds to be resentenced. The court ruled that the judge did not have the authority to be lenient. Earlier this year, another judge ordered father and son back to prison for five years each, minus the time already served.
To the Hammonds and their supporters, the case appeared to be a vendetta. The Oregon Farm Bureau has called the Hammonds’ plight “a gross injustice” that “has severely damaged the long-term trust and cooperation that ranchers, foresters, and recreationists have had” with the government.