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Looking at Milk From a Different Angle

Libby Eiholzer, Bilingual Dairy
Northwest New York Dairy, Livestock & Field Crops

September 15, 2014
Looking at Milk From a Different Angle

Looking at Milk from a Different Angle
As dairy farmers and those who work in the dairy industry, our interest in milk lies mostly in milk production. Hearing about innovations in dairy processing and trends in consumer demand are interesting to us, but aren?t really what we?re all about. A group of young dairy managers from Ontario County had the opportunity to learn about how supermarkets think about dairy products in April when we met at the flagship Wegmans store in Pittsford, NY. We were hosted by Ron Indovina, the Dairy Category Merchant, who is in charge of purchasing dairy case items for all Wegmans stores. We came away intrigued and a little overwhelmed by the wealth of information shared with us. Here?s a bit of the insight we gained from the other side of the dairy case.
1. Upstate Niagara Cooperative, Inc. supplies Wegmans with all the milk needed for Wegmans brand milk in its 84 stores, which are spread throughout MA, MD, NJ, NY, PA, and VA.
2. Wegmans actually loses money on every gallon of conventional Wegmans brand milk that it sells! This milk is what?s known as a ?loss leader? for Wegmans, meaning that they sell it below market cost in order to increase sales elsewhere in the store. As milk is such a popular item, it?s worthwhile for Wegmans to sell it below cost because it encourages people to come to the store. They can then make up for the loss on milk in the sales of other products. (Another example of a loss leader is the super cheap turkeys sold for Thanksgiving; the store loses somewhere in the neighborhood of 8 million dollars every year on this item.) What items help them make up for that loss? Wegmans? profit margin on organic milk is very high, and this item is growing steadily. 
3. Has anyone ever noticed that certain Wegmans brand products are offered only in organic? We asked why. Indovina responded that they would only do that when they can offer the organic product at a price equal to or lower than the conventional product. In one example, Wegmans? supplier for organic carrots had such a small demand that they were very expensive to produce. By giving one supplier all their carrot business, Wegmans made it possible for the grower to supply organic carrots at a lower price. Now Wegmans can sell organic carrots at a price equal or lower to the price for conventional carrots. This discussion brought up an interesting question: would Wegmans ever offer only organic milk? Would that even be possible? Some producers said they?d be happy to make the switch if they were promised to be paid a price that would be profitable for them. But the question of whether or not farms would be able to provide the required amount of pasture land necessary to meet organic standards raised doubts.
Though touring a supermarket was a very different experience from our usual farm tours, the group?s overall impression was positive. One group member commented on how great it was to be able to meet someone who is as passionate about his job as Indovina. Purchasing dairy products isn?t what dairy farmers are all about, but it?s certainly interesting to hear from someone who is all about it.




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calendar of events

Upcoming Events

Dairy Cattle Summer Research Update

July 18, 2019
7:00-9:00pm
Batavia, NY

After the day's work is done, come hear about two new research trials conducted by Julio Giordano's lab:
  • Strategies for improving dairy cattle reproductive performance and economics
  • Using automated sensors for improving dairy cattle health monitoring and management

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Weed Resistance Management Demonstration and Plot Tour

Event Offers DEC Credits

July 23, 2019
1:00 - 3:00 p.m.
Waterloo, NY

Come join us on July 23 in Seneca County at Quinten Good's farm for a demonstration and walking tour of 16 different pre- and post-emergence treatments in soybean and 12 different treatments and combinations in corn.
  • Tall waterhemp and marestail are two weeds that are resistant to glyphosate and ALS herbicide modes of action in the WNY and Finger Lakes regions.
  • Each year the number of acres with resistant weed populations expands.
  • For herbicides to be an effective tool in weed management, we have to know what chemistries & application timings are most effective against these resistant weeds.

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Pasture Walk with the Finger Lakes Graziers

July 29, 2019
12:45 - 4 pm
Waterloo, NY

Join the Finger Lakes Graziers on a pasture walk and learn about soil health. 
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Announcements

USDA Announces New Decision Tool for New Dairy Margin Coverage Program

WASHINGTON, April 30, 2019 ? Agriculture Secretary Sonny Perdue announced today the availability of a new web-based tool - developed in partnership with the University of Wisconsin - to help dairy producers evaluate various scenarios using different coverage levels through the new Dairy Margin Coverage (DMC) program.

The 2018 Farm Bill authorized
DMC, a voluntary risk management program that offers financial protection to dairy producers when the difference between the all milk price and the average feed cost (the margin) falls below a certain dollar amount selected by the producer. It replaces the program previously known as the Margin Protection Program for Dairy. Sign up for this USDA Farm Service Agency (FSA) program opens on June 17.

"With sign-up for the
DMC program just weeks away, we encourage producers to use this new support tool to help make decisions on participation in the program," Secretary Perdue said. "Dairy producers have faced tough challenges over the years, but the DMC program should help producers better weather the ups and downs in the industry."

The University of Wisconsin launched the decision support tool in cooperation with FSA and funded through a cooperative agreement with the USDA Office of the Chief Economist. The tool was designed to help producers determine the level of coverage under a variety of conditions that will provide them with the strongest financial safety net. It allows farmers to simplify their coverage level selection by combining operation data and other key variables to calculate coverage needs based on price projections.

The decision tool assists producers with calculating total premiums costs and administrative fees associated with participation in
DMC. It also forecasts payments that will be made during the coverage year.

"
The new Dairy Margin Coverage program offers very appealing options for all dairy farmers to reduce their net income risk due to volatility in milk or feed prices," said Dr. Mark Stephenson, Director of Dairy Policy Analysis, University of Wisconsin, Madison. "Higher coverage levels, monthly payments, and more flexible production coverage options are especially helpful for the sizable majority of farms who can cover much of their milk production with the new five million pound maximum for Tier 1 premiums. This program deserves the careful consideration of all dairy farmers."

For more information, access the tool at fsa.usda.gov/dmc-tool. For
DMC sign up, eligibility and related program information, visit fsa.usda.gov or contact your local USDA Service Center. To locate your local FSA office, visit farmers.gov/service-locator.


New Guidance for Mortality Disposal Issued

NYS Department of Ag and Markets has posted guidelines on disposal of livestock carcasses, in response to reports that some rendering companies have halted pickups from farms.

https://nwnyteam.cce.cornell.edu/submission.php?id=761&crumb=dairy|1

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