Tuesday, August 21, 2012

Session 3 Synopsis


      Session #3 was the economic session and was held in Modesto, CA, primarily at the Western United Dairymen's office.  We started out the first day meeting with Annie AcMoody, from Western United, where we went over the California pricing system and how pooling and the different classes all contribute to our "mailbox price".  We also heard from Dr. William Schiek, from Dairy Institute of California on what the outlook for both global and local markets are for the coming months.  Following this we went to dinner at Surla's Restaurant where we talked with guest, Ray Souza, about what the milk pooling system did for producers compared to what had been the norm prior to pooling in California.

     The second day we were at the WUD office again.  We had a busy day of speakers but all with great information.  We heard from Mike Francesconi, from CDFA, about the function and duties of the Dairy Marketing Branch within the CDFA.  Following Mike, we heard from Venetta Reed, also from CDFA.  She talked about the Manufacturing Cost Studies which they do, and how they play into the pricing formulas.  Next, Amber Rankin talked to us about the California Hearing process which is how anything is changed regarding pricing and pooling regulations and formulas.  She then gave us a nice overview on the California vs. Federal systems.  We went over pricing and marketing as well as pooling regulations and special circumstances like producer-handlers.  We then had a nice lunch at the WUD office and heard from Mike Francesconi again, about the Cost of Production studies which was very interesting to me as a great set of benchmarks with which to see how our dairy is doing on the cost side of things.  Then after Mike, we heard from John Lee from the CDFA Milk Pooling Branch.  John gave us an overview of what the Milk Pooling Branch does.  Next was John Bressett who talked to us about the Producer Security Assurance Team.  They deal with making sure that we as producers, are not being taken advantage of by processors, trucking costs, etc.  Lastly we heard from Don Shippelhoute who gave a very detailed discussion on milk pooling in California.  We met at the Firkin and Fox pub for dinner and followed up with a Modesto Nuts baseball game.

    The third day of the session was also at the WUD office.  We began the day hearing from Mike Marsh about Western United Dairymen and all that they do for us as producers, along with their involvement in recent and current issues affecting the dairy industry.  Then we met with Eric Erba, from California Dairies.  He went over the challenges beyond the farm such as transporting the milk, balancing supply and demand, and plant capacity and production base.  To end the session, we heard from Tiffany LaMendola, from Blimling and Associates, Inc.  She gave us a very in depth look at hedging and risk management through use of the futures markets on the milk side.

    This third session was overall very informative.  Every speaker gave a great presentation and they were all extremely willing to answer our questions.  I really enjoyed getting into great discussions with all of them and was very engaged with this whole session.  I feel I really gained a lot from learning how milk in California is actually priced, and why it is this way.  The topics relating to the future of the industry were very interesting;  talking about what problems there are and possible solutions to be found to overcome those as an industry.  Each session continues to be very challenging and engaging, I am very much looking forward to the final two!


Session 3

Jarred Mello
Session # 3
​On August 7-9 the Western United Dairy Leaders met in Modesto for our Session # 3. We met in Modesto, CA at the WUD office in down town Modesto. This session was about California milk pricing. Our first presentation was on the milk pricing formula. Annie AcMoody, WUD economist, headed this presentation. It was very informational. Annie painted a good picture of a very complicated California pricing system. I left there with a comfortable idea of how it all works.
​Following that, Dr. William Schiek talked to us about the domestic and global market outlook. Dr. William Schiek is an economist from the Dairy Institute of California. Being the second presentation, it was really interesting. Looking at current and future markets gives a positive outlook for dairy producers.
​That evening we went to dinner at Surlas restaurant with Mike Marsh and Ray Sousa. Dinner was very good. Ray Sousa is a past president and board member of WUD. He gave us a good idea of what it was like being a dairyman before the California pooling and quota system. He is very knowledgeable on both the dairy producer side and the political side of the industry. It seems like we need more people like Ray in California.
​Wednesday morning after breakfast, we met again at the WUD office to meet a few people from CDFA. Candace Gates from the Dairy Marketing Branch talked to us about its role in setting milk prices. Mike Francesconi talked to us about Manufacturing costs and Cost of Production studies. Amber Rankin, an ag economist, talked to us about the California Hearing Process. They Were all very interesting lectures that provided a good insight to their roles in the dairy industry.
​Following our last break of the dairy, a few gentlemen from the California Pooling Branch and Producer Security Trust Fund talked to us about their roles in the industry. John Lee, who is the CDFA Pooling Branch Chief, gave us a short intro on how the branch is set up. Later Don Shippelhoute closed things up with talking about the different pooling operations. This presentation was really interesting because there were so many questions about how the pool worked. Explain the operation of the pool took a colorful drawing on the white board that needed lots of explanation.
​Later that even the Dairy Leaders went to have appetizers at the Firkin & Fox pub with Annie AcMoody. Following that, we went to a Modesto Nuts baseball game. It was very entertaining and a good bonding experience for the group.
​Thursday was only a half day for us. We met at the WUD office again and kicked things off with Mike Marsh informing us about all the things WUD are dealing with in our industry right now.
​After that Dr. Eric Erba, from CDI talked to us about transportation, milk procurement challenges, plant capacity, and production base issues that CDI deals with. This was an interesting presentation but maybe a little long. I say that because we got shorted on time with our last speaker, Tiffany LaMendola.
Tiffany LaMendola, from Blimling and Associates, talked to us about Margin Management. It was really interesting stuff. I just wish we had enough time to talked about it and ask more questions.
Overall Session # 3 was the most interesting so far. Milk pricing is one of the most confusing and hardest things to comprehend in the dairy industry. Leaving session # 3 though, I feel a lot more comfortable and have a better understanding of milk pricing and everything that goes into it.

Wednesday, August 8, 2012

The night life!!

Down town bonding as a crew...

Play Ball!

Tonight CA Dairy Leaders are enjoying a relaxing evening with the Modesto Nuts, after studying Pricing & Pooling all day!