Posted: December 31, 2008 at 5:12 pm
By Chuck
Dairy Markets Week in Review
Happy New Year!
All eyes are on cheese prices where blocks plunged to the government support level Wednesday, closing the New Year’s holiday week at $1.1325 per pound, down 13 3/4-cents on the week, $1.02 below that week a year ago, and the lowest block price since March 2006. Barrel closed at $1.13, down 17 3/4-cents on the week and 96 cents below a year ago. Eight cars of block traded hands on the week and two of barrel. The NASS prices were not available at our deadline.
Butter closed at $1.13, down a penny on the week and 8 3/4-cents below a year ago. Five cars were sold on the week. Cash Grade A and Extra Grade nonfat dry milk both closed at 85 cents per pound, down a penny and a half on the week.
Provided courtesy of Dairyline.
Posted: December 31, 2008 at 11:10 am
By News Editor
China’s Dairy Industry Association, a group of 22 milk producers, accused of selling tainted milk that sickened tens of thousands of babies, has agreed to compensate the victims, the state media announced.
The Association said it would provide one-time payments to the families of the children who were sickened or who died after consuming milk tainted with melamine, a chemical compound that is often used in the production of plastics and fertilizers.
“The enterprises offered to shoulder the compensation liability,” the association said, according to Xinhua, China’s official news agency. “By doing so, they hope to earn understanding and forgiveness of the families of the sickened children.”
As part of its promised compensation package, the dairy association said, it would also pay for the long-term health care needs of affected children.
“If the babies suffer from relative aftereffects, all medical fees will be covered by the fund,” the association said, according to Xinhua. Six children died, and nearly 300,000 were sickened. Earlier this month, the government said that more than 800 children remained hospitalized with kidney stones and other ailments.
Until the scandal broke in September, melamine was frequently added to dairy products as a means of increasing the protein content of watered-down milk.
This week the chairwoman of one of China’s biggest dairies, Sanlu Group, will face trial in Shijiazhuang, the capital of Hebei Province, on charges that the company knowingly sold adulterated milk. Last week Sanlu was declared bankrupt. Sanlu, which is partly owned by a New Zealand dairy cooperative, stopped all milk production in September.
Posted: December 31, 2008 at 10:59 am
By News Editor
Fonterra Australia has slashed its milk price to farmers and warned more severe cuts are to come.
Fonterra managing director Bruce Donnison sent letters to 1,500 of its suppliers last week stating the company had withdrawn its November step-up payment of 7c/kg butterfat and 17c/kg protein.
The letter states: “Since writing to you in early November, we have seen a further deterioration in trading conditions”.
“Commodity prices continue to decline and this has been exacerbated in recent weeks by a rapidly deteriorating financial situation around the world; a deterioration which has far exceeded even our most pessimistic expectations,” the letter states.
In the letter Mr Donnison warned: “Our forward expectations for the remainder of the season remain below any previous outlook”.
“Consequently we are in the process of reviewing our pricing levels for the February to June 2009 period.”
The announcement follows dairy giant Murray Goulburn’s pre-Christmas announcement that it would cut prices to its suppliers by an average of 26 per cent from February 1.
The decision sent shock waves through the dairy industry, given it was the first time since the 1980s that any milk processor had cut prices mid-season. Other company’s are soon expected to follow MG’s lead with Warrnambool Cheese & Butter declaring it would make an announcement in January.
Posted: December 31, 2008 at 10:52 am
By News Editor
Carbon-trading, a boon for dairy farmers with environmentally friendly protocols, will get a shot in the arm from the new USDA Office of Ecosystem Services and Markets. According to USDA, agriculture producers provide many ecosystem services which have historically been viewed as free benefits to society — clean water and air, wildlife habitat, carbon storage and scenic landscapes.
Lacking a formal structure to market these services, farmers, ranchers and forest landowners are not generally compensated for providing these critical public benefits. So, the idea is to promote ecosystem markets. Market-based approaches to conservation have proven to be a cost-effective method to achieve environmental goals and sustain working and natural landscapes.
USDA has announced plans to establish a new USDA Office of Ecosystem Services and Markets and to create a federal government-wide Conservation and Land Management Environmental Services Board to assist the secretary of agriculture in the development of new technical guidelines and science-based methods to assess environmental service benefits which will in turn promote markets for ecosystem services including carbon trading to mitigate climate change.
“Our nation’s farms, ranches and forests provide goods and services that are vital to society — natural assets we call “ecosystem services,” said Agriculture Secretary Ed Schafer. “The Office of Ecosystem Services and Markets will enable America’s agriculture producers to better compete, trade their services around the world, and make significant contributions to help improve the environment.”
Shafer said he will name Sally Collins as the director of the Office of Ecosystem Services and Markets (OESM). Organizationally, OESM will have direct access to the secretary. Collins will assume this position after serving as associate chief of the USDA Forest Service for the past eight years, where she pioneered concepts for ecosystem services and markets as part of that agency’s sustainable land management mission.
OESM will provide administrative and technical assistance to the secretary in developing guidelines and tools needed to create and expand markets for ecosystem services and will support the work of the Conservation and Land Management Environmental Services Board.
As directed by the authorizing legislation, the first ecosystem services to be examined will be carbon sequestration. The Office of Ecosystem Services and Markets and the Conservation and Land Management Environmental Services Board will be established to implement actions authorized by the 2008 farm bill.
Nominations will be sought in the near future for a federally chartered public advisory committee to advise the board. The advisory committee will include farmers, ranchers, and forest landowners, tribal representatives, as well as representatives from state natural resource and environmental agencies, agriculture departments, and conservation and environmental organizations.
Posted: December 26, 2008 at 5:19 pm
By News Editor
Cooperatives Working Together (CWT) announced that it has tentatively accepted 184 bids in its second herd retirement of 2008. Those bids represent 61,078 cows and 1.2 billion pounds of milk. In addition, CWT has accepted bids for 1,548 bred heifers in this herd-retirement program.
Together, CWT’s two herd retirements this year account for 85,663 cows that produced 1.637 billion pounds of milk, along with another 2 billion pounds, milk equivalent, that CWT’s Export Assistance program has removed from the market.
Farmers in 40 states submitted a total of 471 herd-retirement bids in late November to CWT, reflecting “the continuing financial stress that many farmers are facing as milk prices plunge below the cost of production,” said Jerry Kozak, president and CEO of NMPF, which administers CWT. Kozak noted that although the costs of dairy feed and diesel fuel have dropped, milk prices have fallen faster.
CWT field auditors will begin visiting the 184 farms whose bids were accepted, checking their milk production records, inspecting their herds, and tagging each cow for processing. All farmers will be notified no later than Jan. 12, 2009, as to whether their bid was among those accepted in this herd-retirement round, the sixth one that CWT has conducted since 2003.
Once CWT field auditors inspect and accept the herds offered as part of the bidding process, farmers have 15 days in which to send their animals to a processing plant. CWT will again provide each farmer the NMPF animal-handling guidelines for the proper culling and transporting of dairy cattle, Kozak said.
Jim Tillison, chief operating officer of CWT, said that further bid information, including the average price of accepted bids, won’t be released until all the on-farm visits have been completed. The total number of bids initially accepted by this round includes:
Northeast: 63.6 million pounds of milk; 23 farms accepted; 3,117 number of cows
Southeast: 65.2 million pounds of milk; 27 farms accepted; 3,741 number of cows
Midwest: 63.6 million pounds of milk; 47 farms accepted; 3,224 number of cows
Southwest: 295.6 million pounds of milk; 38 farms accepted; 17,106 number of cows
West: 718.3 million pounds of milk; 49 farms accepted; 33,890 number of cows
Totals: 1,206.30 million pounds of milk; 184 farms accepted; 61,078 number of cows
Posted: December 26, 2008 at 5:08 pm
By News Editor
Kraft Foods is making it easier for busy consumers to plan meals, search recipes and even locate the nearest store through a new downloadable application for iPhone and iPod touch users. The application is called iFood Assistant and is available on the Apple App Store for 99 cents. It is billed as the first of its kind for a food or consumer packaged goods company.
“People’s lives are becoming increasingly complex and they’re looking for relevant content and solutions to make their lives easier,” Ed Kaczmarek, director of innovation, new services at Kraft, said in a statement.
More than 7,000 recipes can be found on the app. Once the recipe is chosen, iFoodAssistant creates an itemized shopping list, the ingredients can be viewed by which grocery isle they are located in and can be deleted as they go in the shopping cart. The recipes and shopping lists can be shared with others. Another click locates the most convenient store and promotional offers if available. Video cooking demonstrations can be viewed or shortcuts located like the “Dinner Tonight” and “Recipe of the Day” sections.
Kraft designed the application to include partners that provide relevant content or tools. The tools are “all different ways for people to save time or money or both,” said Basil Maglaris, a spokesperson for Kraft Foods. “People are leading more wireless lives so that’s the opportunity for us to provide food ideas, and more interactive experiences.”
Posted: December 26, 2008 at 9:23 am
By Chuck
Dairy Markets Week in Review
Cash cheese prices continued their descent Christmas Week, with block closing the shortened week at $1.27 per pound, down 3 1/4-cents on the week, 76 cents below a year ago, and just 14 cents above the government support price.
Barrel closed Wednesday at $1.3075, down 4 3/4-cents on the week, 67 1/4-cents below a year ago, but 3 3/4-cents above the blocks. Thirteen cars of block traded hands on the week and none of barrel.
Cash butter closed at $1.14, down 3 cents on the week and 11 cents below a year ago. Only one car was traded.
Cash Grade A and Extra Grade nonfat dry milk closed at 86 1/2-cents per pound, down a penny and a half on the week. The NASS-surveyed prices were delayed until December 29.
Provided courtesy of Dairyline.
Posted: December 24, 2008 at 8:24 pm
By Chuck
Posted: December 24, 2008 at 2:06 pm
By News Editor
Merry Christmas everyone!
Have a very joyful and loving holiday with your family and friends.
Cheers!
Posted: December 23, 2008 at 5:16 pm
By News Editor
EU regulators approved the merger of Netherlands-based dairy food product cooperatives Campina and Friesland Foods on condition they sell certain cheese and dairy drink divisions.
The European Commission said the initial merger would have resulted in serious competition concerns in Germany, the Netherlands and Belgium for various dairy products, including yoghurt drinks, cheeses and custards.
To meet EU concerns, the two cooperatives, which are owned by member dairy farmers, said they would sell off several dairy and cheese production plans as well as several brands including Yogho Yogho and Choco Choco brands.
The divested businesses account for around four percent of the new merged company’s total revenue, which is expected to total around euro9.1 billion ($12.5 billion).
The two cooperatives announced their merger in 2007.
Posted: December 23, 2008 at 5:05 pm
By News Editor
Women involved in agriculture are invited to celebrate past, present and future industry leaders during “Women in Agriculture Day,” from 10 a.m. to 2:30 p.m. on Tuesday, Jan. 13, in the VIP Lounge, at the 2009 Pennsylvania Farm Show. For more information, contact Jean Lonie (jlonie@state.pa.us) at the Department of Agriculture at 717-346-0438.
The tentative agenda is as follows:
10 a.m. – Welcome – Russell Redding, Department of Agriculture Executive Deputy Secretary
10:15 a.m. – “Smashing the Glass Slipper”- JD Dunbar, Pennsylvania Rural Leadership Program
10:45 a.m. – Today’s Leaders in Agriculture
Panel Moderator – Cheryl Cook, Department of Agriculture deputy secretary
· Laura Phelps, American Mushroom Institute President
· Angela Callie, USDA Rural Development Team Leader
· Linda Stewart Moist, Pennsylvania Women’s Agricultural Network (WAgN)
· Christy Bartley, Penn State University 4-H Program Leader
Noon – Light refreshments and networking
12:30 p.m. – “Giving Yourself Credit When You’re All Maxed Out” – Caressa Compton, South Mountain Insurance Services
12:45 p.m. – “Profits, Challenges and Risk Management” – Lynda Farrell, Honeysuckle Hill Farms
1 p.m. – Agriculture at the Capitol – Kristin Crawford, Legislative & Executive Director of the Senate Agriculture & Rural Affairs Committee and Kerry Golden, Executive Director of the House of Representatives Agriculture & Rural Affairs Committee
1:30 p.m. – The Next Generation of Ag Leaders
Panel Moderator – Junia Isiminger, PA Dairy Princess & Promotion Services
· Sarah Caldwell – Former PA Dairy Princess
· Kelly Over – Former PA FFA President
· Kristi Rooker – PDA Fair Fund Administrator and former PA Fair Queen
· Raechel Kilgore – AgChoice Farm Credit and former PA Dairy Princess
· Nicole Bucher – PDA Press Office and PA Young Farmers Association
2 p.m. – Final Thoughts and Networking Opportunity
Posted: December 22, 2008 at 7:58 pm
By News Editor
America’s dairy producers, through their investment in the dairy checkoff, are working to help reinvigorate the pizza category and increase sales for pizza products containing more cheese. Dairy Management Inc. (DMI), which manages the national dairy checkoff program, is facilitating an industry task force to develop action plans on how the dairy and pizza industries can reinforce pizza as the favorite choice among American consumers for quality and value.
“Pizza sales are important, because they directly affect overall cheese sales,” said Paul Rovey, Arizona dairy producer and chair of DMI. About 25 percent of total cheese is used on pizza, representing more than 25 billion pounds of annual milk production, he added.
Pizza sales have declined in recent years; some restaurant chains that were once pizza-centric are expanding into non-pizza categories. In response, DMI has begun an overall effort to increase pizza sales in both the short and long term, as part of a comprehensive effort to increase cheese sales, as outlined in the dairy checkoff business plan.
“Because pizza sales account for more than $32 billion annually, we know that increasing pizza sales benefits dairy producers and the dairy industry,” said Tom Gallagher, DMI’s chief executive officer.
As part of the short-term strategy, the dairy checkoff is working with Domino’s Pizza® to introduce a line of high-quality specialty pizzas that will use up to 40 percent more cheese.
Through the agreement, DMI – together with several state and regional dairy producer organizations – is investing more than $10 million to support the launch of this line of pizza nationwide. Producer-funded efforts will support Domino’s franchisees in advertising, public relations, local market promotions and communications activities.
Domino’s investment – including menu development, advertising, in-store merchandising and other marketing efforts to support the launch — will total more than four times the investment of dairy producers. The partnership also will work to measure overall increases in pizza and cheese sales in test markets, and how changes in unit pricing at the consumer level affect total sales.
Posted: December 22, 2008 at 7:17 pm
By News Editor
Cooperatives Working Together (CWT) has announced their updated export bids for the past week.
Three of the bids were from Dairy Farmers of America of Kansas City, Mo.: one for the sale of 18 metric tons (39,683 lbs.) of anhydrous milkfat to Panama, and the other for separate sales of whole milk powder to Mexico, in the amounts of 150 metric tons (330,693 lbs.) and 20 metric tons (44,092 lbs.).
Three of the bids were from California Dairies Inc. of Artesia, Calif., for the sales of butter: 12 tons to China (26,455 lbs.), and two separate sales to Japan in the amounts of 10 metric tons (22,046 lbs.) and 9.8 metric tons (21,605 lbs.).
One bid was accepted from Humboldt Creamery of Fortuna, Calif., for the export of 20 metric tons (44,092 lbs.) of whole milk powder to Georgia.
Finally, one bid was accepted from Land O’Lakes of Arden Hills, Minn., for the export of 18 metric tons (39,683 lbs.) of butter to Iran.
With these accepted bids, CWT’s total 2008 export obligations are: butter, 21,913 metric tons (48.3 million lbs.); cheese, 1,501 metric tons (3.3 million lbs.); whole milk powder, 1,238 metric tons (2.7 million lbs.); and anhydrous milkfat, 11,411 metric tons (25.2 million lbs.). The butter
total is adjusted to reflect a recently-cancelled order of 3,471 metric tons.
2008 has been the most successful year in CWT’s five-year history, in assisting members to export over 84 million pounds of cheese, butter, AMF and whole milk powder to 30 countries in every part of the world.
Posted: December 19, 2008 at 6:23 pm
By News Editor
A total of 54 students from 12 southern colleges and universities participated in the third annual Southern Regional Dairy Challenge, November 20 through 22 in Statesville, N.C.
The Challenge is an innovative two-day event designed by professionals from allied industry and university educators to bring classroom training to life in the real world for students preparing for dairy careers.
North Carolina State University hosted the 2008 contest, drawing participants from Alabama A&M University, Berry College, Clemson University, Ferrum College, University of Florida, University of Kentucky, Louisiana State University, Mississippi State University, North Carolina State University, Virginia Tech, West Virginia University, and Western Kentucky University.
Hosts for this year’s Southern Regional Dairy Challenge were Reid Gray, of Grayhouse Farms, Stoney Point, N.C., and Dennis Leamon, owner of Lucky L Jerseys near Statesville.
On the program’s final day, each team presented its evaluation and recommendations to a panel of industry judges. Teams were ranked as platinum, gold or silver, based on how well they worked as a team and how effectively their presentations of strengths and opportunities for the dairy operation matched the judges’ evaluations. When teams were not presenting, they toured the farm they had not evaluated for the competition.
Dairy Challenge teams are named in recognition of sponsoring businesses and organizations.
Receiving first place Platinum awards were:
Team Select Sire Power: Aaron Horst, Virginia Tech; Matt McCombs, West Virginia University; Brittany Mixson, Clemson University; Felicia Taylor, Western Kentucky University; and Allison Vignes, Louisiana State University.
Team American Dairy Science Association: Natalie Davis, Louisiana State University; Samantha Davis, Virginia Tech; Jennifer Devine, Berry College; Jessica Leonard, North Carolina State University, and Andrew Mains, University of Kentucky.
Second place Platinum awards went to:
Team Southern States Cooperative: Abby Burns, North Caronlina State University; Keegan Gay, University of Kentucky; Hayley Hollier, Louisiana State University; Ivy Roberts, Berry College; and Decima Washington, Alabama A&M.
Team Genex: Ryan Haines, Virginia Tech, LaQuanda Hall, Alabama A&M University, Amy Hoback, Ferrum College; and Candace Munz, University of Florida.
Gold award teams were:
Team Dairy Farmers of America: Randi Black, University of Kentucky; Kari Botkin, Ferrum College; Ashley Fairchild, North Carolina State University; and Jessie Nickerson, West Virginia State University.
Team ABS Global: Sara Coleman, Clemson University; Karl Wesley Henry, Jr., Alabama A&M University; Amanda Holaday, Western Kentucky University; Amanda Stowers, Mississippi State University; and Marlene Tremblay, University of Kentucky.
Team New Frontier Bank: Katherine Anderson, Ferrum College; Nancy Chenault, University of Kentucky; Ashley Massagee, University of Florida; Christopher Ragland, Alabama A&M University; and Anthony Roe, Western Kentucky University.
Team Zinpro Performance Minerals: Megan Bullard, Mississippi State University, Stephanie Croyule, University of Florida, Simone Kennedy, Clemson University; Lucas Krueger, Alabama A&M University; and Autumn Spencer, Ferrum College.
Teams receiving Silver awards were:
Team Southeast DHIA, Inc: Morgan Bullard, Mississipi State University; Ashley Dozier, Alabama A&M University; Laura Gaver, Virgina Tech; and Beth Hudson, Western Kentucky University.
Team Merial Ltd.: Ethan Bloomfield, West Virginia University; Mallory Edison, Berry College; Ana Ferrer, Mississippi State University; Brandi Roebuck, Alabama A&M University.
Team Dairy Production Systems: Sarah Baker-Walker, Berry College; Deirdre Bowie, Alabama A&M University; C.J. Middleton, University of Florida; and Brandy Puckett, Ferrum College.
Team Agway Foundation: Kristen Glosson, North Carolina State University; Leslie Johnson, Alabama A&M University; Sarah Pogue, Berry College; and Sarah Thomas, Western Kentucky University.
Posted: December 19, 2008 at 1:53 pm
By Chuck
Dairy Markets Week in Review
The hemorrhaging continues in the cash cheese market where 40-pound block closed Friday at $1.3025 per pound, down 21 cents on the week and 64 3/4-cents below a year ago. The blocks have lost 50 cents in three weeks.
The 500-pound barrels closed at $1.3550, down 16 3/4-cents on the week and 54 1/2-cents below a year ago. Twelve cars of block traded hands on the week and four of barrel. The NASS U.S. average block price gained 2.9 cents, hitting $1.7763. Barrel averaged $1.7768, down 4.7 cents
Butter regained 12 cents in the first three days of trading this week but started to melt Thursday, losing 3 cents and another 3 on Friday, and closed at $1.17, up 6 cents on the week but still 15 1/4 below a year ago. Four cars traded hands on the week. NASS butter averaged $1.2346, down 18.3 cents.
Both cash Grade A and Extra Grade nonfat dry milk dropped 2 1/4-cents this week and closed Friday at 88 cents per pound. NASS powder averaged 83.93 cents, down 1.4 cents. Dry whey averaged 17.02 cents, down 0.3 cent.
Price support purchases this week amounted to 8.2 million pounds of nonfat dry milk, raising the cumulative total to 101.5 million pounds.
Provided courtesy of Dairyline.
Posted: December 17, 2008 at 6:05 pm
By News Editor
The Southwestern Wisconsin Cheese Makers Association (SWCMA) is now accepting applications for its 7th Annual Young Dairy Producer Educational Scholarship.
The scholarship in the amount of $2,000.00 is available to a young dairy producer or student whose Wisconsin-based dairy farm markets milk to any SWCMA member plant. Family members or farm employee family members are also eligible to apply.
Acceptable educational programs include, but are not limited to, the UW-Madison Farm and Industry Short Course, the Wisconsin Technical College System Farm Business and Production Management Course, the Lakeshore Technical College Farm Business and Production Management Courses, and any dairy-related studies at state universities. The scholarship winner must be enrolled during the entire academic year for which the scholarship is awarded.
The scholarship will be awarded based on academic achievement, an interest in milk production as a career, and demonstrated leadership, initiative and integrity. Candidates are expected to complete an application form, submit a transcript of all high school courses, and write a short statement describing their career aspirations, dairy-related activities and work experience.
Announcement of the winner will be made by April 30, 2009.
Posted: December 17, 2008 at 5:55 pm
By News Editor
Cooperatives Working Together(CWT) has received commitments from its members that they will continue to fund the program in 2009, CWT officials said today.
“Now more than ever, CWT is the only answer to the question of what can farmers do to positively impact their milk price,” said Jerry Kozak, President and CEO of NMPF, which manages CWT. “Both world and U.S. dairy markets are sagging and things look tough for 2009. Our members recognize that this program is the best way to help balance supply and demand and positively impact producers’ bottom line.”
CWT is currently in the process of removing 184 herds, with 61,000 cows that produced 1.2 billion pounds of milk, through its second herd retirement of 2008. CWT’s first herd retirement of the year removed 25,000 cows that produced 430 million pounds of milk. In addition, its export assistance program has helped members sell overseas the equivalent of more than two billion pounds of milk in 2008.
“With the continued investment individual producers and cooperatives are making, CWT will have the financial resources to remove more cows, and export more products, that will help battle the decline in dairy prices in 2009,” Kozak said.
An independent economic analysis of CWT, conducted this fall by Dr. Scott Brown of the University of Missouri’s College of Agriculture, demonstrated that farmers’ return of investment in CWT has been 76 cents per hundredweight. Moreover, Brown’s analysis showed that the return farmers enjoy grows as the program develops over time.
Posted: December 16, 2008 at 10:07 pm
By News Editor
President-elect Barack Obama is expected to announce former Iowa Gov. Tom Vilsack as his pick for Secretary of Agriculture on Wednesday.
Sources spilled the beans to the Associated Press today. Vilsack, who was an early presidential contender (dropped out before the primaries) has little experience in agriculture other than being the governor of a farm-rich state. But, politically, he’s apparently a good fit for the administration. (From the Des Moines Register: “As the former governor, Vilsack already has several important qualifications: He’s run a large organization; he’s got strong political instincts, and he’s from one of nation’s largest farming states.”)
Posted: December 16, 2008 at 8:45 pm
By News Editor
A Land O’ Lakes dairy processing plant in Tulare, Calif. reported a three-alarm fire today.
According to the Tulare Fire Department, the fire started in a building dedicated to maintenance, welding, cold storage and storage of cardboard boxes. The fire took about 1 1/2 to 2 hours to bring under control, Battalion Chief Willard Epps said. No injuries have been reported.
Officials believe the fire spread through the venting system. The sprinkler system went off but was not effective because the fire was above the sprinklers, Epps said.
Posted: December 16, 2008 at 8:38 pm
By News Editor
The Board of Directors and management of Dairy Farmers of America, Inc. (DFA) announced today that DFA has reached a settlement with the Commodity Futures Trading Commission (CFTC). The settlement ends the CFTC’s investigation into DFA’s trading activities on the Chicago Mercantile Exchange (CME) in 2004.
Without admitting or denying the CFTC’s findings in the administrative order, DFA and two of its former officers agreed to pay a negotiated aggregate civil monetary penalty of $12 million. The Cooperative also agreed to not engage in speculative trading in milk futures contracts for two years and to retain a monitor to review its trading activities on the CME during that period.
DFA President and CEO Rick Smith said that agreeing to the settlement was in the best interests of the Cooperative and its members. The long-pending probe was expensive and diverted time and resources from DFA’s main mission – serving its members.
“Settling this matter will allow us to focus wholly on serving our members and moving the Cooperative forward,” said Smith, who took the helm of the Cooperative in 2006, years after the trading activity in question.
“The transactions addressed by the settlement took place over a one-month period more than four years ago,” said Smith. “We have fully cooperated with the CFTC’s investigation and wanted to put this matter behind us.”
Prior to reaching the settlement agreement, DFA management voluntarily developed and implemented new policies and procedures designed to ensure that all trading complies with both the spirit and the letter of the law.
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