November 2017 FIRSTHAND LINE · NAFTA Update – Balancing Needs with Negotiations The North American Free Trade Agreement (NAFTA) involving Canada, Mexico and the United States has

Blue-Collar Cow Sets Record p 2

Farm Bill 2018 p 3

FIRSTHANDMILK INDUSTRY KNOWLEDGE

MILKLINEN E W S L E T T E R

November 2017

Dedicated to serving and representing you, our family farm members, FarmFirst Dairy Cooperative represents farms in Wisconsin, Minnesota, South Dakota, Michigan, Iowa, Illinois and Indiana through policy bargaining, dairy marketing services, laboratory testing opportunities and industry promotion.

HIGHLIGHTS: NAFTA - Balancing Needs p 3

Passage of Assembly Bill 353 p 4

Harsdorf Appointed as Sec Ag p 5

40 Square Coop Solutions p 5

America’s Dairyland

In recent weeks, the head of Wisconsin’s influential business lobby said the state should consider scrapping the slogan, ‘America’s Dairyland’, that has adorned many vehicle license plates since the 1940’s.

It appears to be a spur of the moment suggestion, as Kurt Bauer, the executive director of Wisconsin Manufacturers and Commerce, casually made the notion during a luncheon. However, the idea might be tied to a $10 billion plan by Taiwanese electronics giant Foxconn to build a manufacturing campus near Racine in Southeastern Wisconsin.

The idea definitely made an impression on Wisconsinites.

In addition to social media posts, the evening news included interviews with

people off the street, sharing their take on what they thought of the potential change.

To my satisfaction, several people commented that it should remain ‘America’s Dairyland’ as that is what we are known for, from our great cheeses produced across the state, to the many dairy farmers that built the infrastructure of our economy. Unfortunately, there were a few that voiced opinions on it feeling outdated and not relevant.

An article in Wisconsin’s State Journal shared similar thoughts from Bauer, saying “to me, ‘Forward’ [the state’s motto] connotes resolve, indomitability and progress - not a bad image to project to the rest of the world.”

Clearly, Bauer does not have a clue what goes into dairy farming.

Dairy farmers already epitomize this vision of relentless resolve and fearless dedication. Dairy farmers clearly show indomitability, against some of the worst Mother Nature has to offer, and they show progress by embracing new technology to help improve work efficiency. Dairy farmers also embody intense perseverance, an array of talent and skills, and an undeniable passion for some of the most honorable work.

While this might be a conversation taking place in Wisconsin, all dairy farmers should heed the warning of citizens not quite understanding the real and positive impact that dairy farmers

have had on building the infrastructure of what we have come to appreciate in today’s economy.

The importance of connecting with our neighbors and community members is ever more important, knowing that while they gather a tiny perspective of the full picture of work, skills and dedication it takes to dairy farm, they also have a severe lack of understanding each cow’s impact on the economy.

The importance of decades of leadership in dairy farming and cheesemaking shouldn’t be lost, even if it’s as simple as a license plate slogan. In fact, this conversation might prove to be more important than we all might think, and is clearly an opportunity for those that might not know the value of Wisconsin’s 9,520 dairy farms and its accompanying 1,279,000 dairy cows.

In fact, Bauer might already have some other manufacturers looking to set up shop in Wisconsin if he would just happen to take them on a farm tour, and show them how successful we are as managers of cattle, land and natural resources. He might also appreciate the solid example of hard-working families that adorn the Midwest instead of making ridiculous suggestions as a license plate change away from one of the region’s top industries.

Article by Julie Sweney,FarmFirst Dairy Cooperative

visit us onFarmFirstDairyCooperative.com

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Cooperative Happenings

BOARD OF DIRECTORS

President: John Rettler Neosho, Wis. 920-625-3237

Vice President: Peter Kleiman Wilson, Mich. 906-497-5350

Secretary: Kathy Bauer Faribault, Minn. 507-332-2870

Treasurer: Randy Geiger Reedsville, Wis. 920-772-4184

Kelly King – Edgar, Wis. 715-581-3850

Richard Meyer Unity, Wis. 715-223-2058

Brian Wozniak – Stanley, Wis. 715-703-0361

Ken Wunderlin - Livingston, Wis. 608-943-6496

FIELD STAFF

Amanda Bedtke - Altura, Minn. 507-251-3006

Bob Hodgson- Dyersville, Iowa. 608-642-2859

Dennis Pank - Bloomer, Wis. 608-516-4927

Dan Schaefer - Platteville, Wis. 608-330-1741

Rick Wolfe - Aniwa, Wis. 715-581-4321

Pat Yeagle - Winslow, Ill. 815-291-4581

Dan Zeleske- Fond du Lac, Wis. 920-323-7079

MILK MARKETING FIELD STAFF

Norm Fleischman - Campbellsport, Wis. 920-948-1524

Jeff Bradley- Columbus, Wis. 608-516-3624

Bill Burri- Reedsville, Wis. 920-901-2173

MAILING ADDRESS P.O. Box 14380 Madison, WI 53708-0380

MADISON OFFICE 4001 Nakoosa Trail, Suite 100 Madison, WI 53714 (608) 244-3373

Selz-Pralle Dairy Cow Sets New Single Lactation Milk Production Record

A new record has been set for a single lactation milk production. This leading lady is Selz-Pralle Aftershock 3918 VG-88, owned by the Pralle Family in Humbird, Wis.

3918 is a Holstein cow that began her record-breaking milk record at 5 years and 11 months of age, calving Sept. 26, 2016. She is a daughter of MS Atlees Sht Aftershock-ET and produced 78,170 pounds of milk with 3,094 pounds of fat and 2,393 pounds of protein in 365 days.

Pam Selz-Pralle shared more about this record-breaking cow, and some key characteristics that helped her reach this accomplishment:

“3918 is really the true type cow. She lived every day in a free stall barn with 80-85 other cows in her pen simply doing her job. No special attention. In fact, she doesn’t even like attention! Over the summer as she sustained milking over 200#/day, we realized that she might be doing something special. So, we waited until her last month and decided to take a professional photo. Scott washed and clipped her and then put her in a single pen to stay clean. She wasn’t impressed with us altering her routine and dropped over 20 pounds of milk and never bounced back. Likely, that’s because she was 7 months pregnant but still, she never bounced back. We had to dry her off right after she completed her 365 day lactation milking 200#/day because she was due back in 65 days.

Since 3918 freshened at 1-11, she hasn’t been treated for a single ailment. No mastitis. No ketosis. We only have vaccinations and hoof trimming on her health record. She simply isn’t a problem cow. She breeds back on first or second service. Last lactation, she was recognized by Holstein USA as an Elite performer for her high production. When she freshened, her first official milk test was 175#/day. That was her only test under 200. She consistently tested between 220-230. We also reviewed her rumination activity. She averaged 600 minutes or 10 hours

a day ruminating.

3918 is pretty modern. She averaged a 4.0 fat test and 3.1 protein even with the large milk volume. The last three months of her lactation, she tested 5.0% butterfat. At her highest, she produced 19.6 pounds of combined fat and protein a day. That’s amazing!

We keep getting asked if we think 3918 will repeat her record. We think it’s possible. A cool summer sure helps sustain milk production in our naturally ventilated barn as does a highly digestible ration. One thing for sure, we are going to let her decide! We will keep doing what we do best so she can do what she does best.

We learned our lesson – she likes to be left alone to do her own thing!”

Aftershock 3918 VG-88, the new milk production record setter for a single lactation.

The family at the Selz-Pralle Farm includes (from left to right): Scott Pralle, daughter Jessica Pralle, and Pam Selz-Pralle.

Government & Legislative Update

Farm Bill 2018 - Just Around the Corner

The House of Representatives Agriculture Committee is weighing whether a Farm Bill could take place later this year or the first part of next year. The tax reform package takes priority, but if that doesn’t move, then the Farm Bill may be next in line. Congressional leaders recognize that two programs will be targeted for improvements – Cotton and Dairy, but all programs will be challenged as the President requested a $10 billion dollar cut in agricultural programs. So, all in all, the budget challenge will be looming on the surface.

We expect that the Agriculture Committee will look to improve the Margin Protection Program (MPP) buy-up coverage so that it is more effective for the 1st tier of production while maintaining free catastrophic coverage. As well, there will be an effort to increase risk management tools for higher production. While FarmFirst knows that the MPP program has many challenges, it would be a positive start to discuss improvement to premium levels, a potential increase in catastrophic and top-end coverage as well as monthly calculations versus the current two-month average when it comes to discussing MPP in the next Farm Bill.

While there is some discussion about a Farm Bill the end of 2017, we anticipate a greater likelihood being the spring of 2018 with the desire to reach

the finish line by September – which hasn’t happened in most Farm Bills.

As the tax reform packages were unveiled in Washington, D.C., agricultural industry groups stood up and took notice. What has been characterized as a lukewarm reception, the details of these reforms will be critical as we look to analyze

the potential effect on farmers’ tax rates.

Whether its maintaining the business-interest deduction, the estate tax or the section 199 deduction for manufacturers, they all have varying levels of impact. For agricultural cooperatives

Tax Reform - Details Will Be Critical

NAFTA Update – Balancing Needs with Negotiations

The North American Free Trade Agreement (NAFTA) involving Canada, Mexico and the United States has completed four rounds of meetings over the past 2 ½ months. Two more meetings are anticipated before the year ends.

There’s several objectives that the U.S. Trade Representatives (USTR) are approaching these meetings with. First, “do no harm” to agriculture which USTR is supporting despite the backlash from trade partners, second, addressing the Class 7 pricing program and market access and third, preservation of export avenues through improved rules on sanitary & phytosanitary issues as well as discussion on geographical indicators (common food names).

The landmine that has been laid which may prove troublesome in the negotiations is a ‘sunset’ provision of NAFTA and many of the dairy-related demands being made. The challenge remains that NAFTA involves many sectors beyond agriculture, so it is critical that we keep USTR focused on not giving up something in agriculture to trade for something else.

With the continued pressure on milk price driven by current inventory stocks and the continued flow of milk volume, trade (exports) which now stands around 14% of the milk supply needs to increase if we are to see any relief over the next year. Making improvements to NAFTA while not diminishing our current opportunities will be key to trading partners on each side of our border.

who typically pass on to their members the Domestic Productions Activities Deduction (DPAD) which was enacted as part of the American Jobs Creation Act of 2004, the impact to farmers would be significant. Throughout our membership area the annual value of this deduction for agricultural production activities is estimated to be: $131 million for Minnesota; $80 million for South Dakota; $67 million for Iowa; $65 million for Wisconsin; $41 million for Illinois; and $40 million for Michigan.

FarmFirst is not supporting this tax reform provision and is informing congressional leaders that the elimination of this DPAD deduction is being put forward to offset some of the costs of lowering corporate tax rates. However, the reduction in corporate tax rates does little to help dairy cooperatives or their members, because profits for the cooperative are passed through directly to the farmer owners.

Industry Happenings

Passage of Assembly Bill 353 a “Win” for Wisconsin Cooperatives

FarmFirst Dairy Cooperative recognizes the bipartisan support of Assembly Bill 353. It will give the cooperative options should cooperative members chose to enact these changes in the future. As a member of Cooperative Network, FarmFirst appreciates the focus and dedication of their work on maintaining the viability and strength of cooperatives across Wisconsin and Minnesota.

Also known as the Cooperative Statute Modernization Bill, this legislation was drafted with the goal of providing the state statute that governs cooperatives, Chapter 185, with its first update in over 30 years.

“By voting in favor of this bill, our legislators have shown that they believe members of cooperatives and their elected boards should be trusted to make the right decisions for the future of their cooperatives,” says John Manske, Cooperative Network’s Senior Government Affairs Director.

The legislation was designed to provide member cooperatives with the freedom and flexibility to best serve their member-owners by allowing for outside director perspectives on a minority basis, an opportunity to consider patronage-based

voting for the one cooperative holding company in the state and updates on the process for notification of unclaimed capital, among other provisions.

“We are proud of what this legislation means for our members,” Manske says. “The provisions in the bill are optional and it would be up to individual cooperatives if they want to enact these policies. It is reassuring to see cooperatives being provided with the same opportunities for advancement and growth in their respective industries as other business models. This revision allows them to update structure and practice while staying true to the seven cooperative principles.”

Scholarship applications are available

once again for the 2018 FarmFirst Dairy

Cooperative scholarship program. The

application deadline is March 30, 2018. Applicants must

be a son/daughter of a cooperative member and either be

currently attending a post-secondary school or have received

a letter of acceptance to a post-secondary school if currently

a high school senior. Applications will be available at the

upcoming district member meetings, available online at www.

FarmFirstDairyCooperative.com or by calling 608-244-3373.

Use the online application for an easy and quick submission process! Applicants can once again submit their application directly online via our online submission form. Visit www.FarmFirstDairyCooperative.com/scholarships to access the form.

Youth Corner 2018 Scholarship Applications Available

Seeking Applicants for FarmFirst’s 2018 Summer Intern

FarmFirst Dairy Cooperative is seeking interested candidates in serving as the cooperative’s 2018 summer intern. This individual will have the opportunity to gain a wide range of skills working within our milk marketing program, quality testing laboratory, member

service test verification division, and several public relation and administrative duties. Ideal candidates will have a background and interest in dairy, marketing, communications or science.

Interested candidates can visit www.FarmFirstDairyCooperative.com for full details on the 2018 internship program and how to apply. Applications are due January 15, 2018. Any questions can be directed to the office or by emailing [email protected].

Please share this great internship opportunity!

This year’s theme for National Coop Month in October was ‘Co-ops Commit’ focusing on ways that coops keep a pulse on member needs and initiatives. FarmFirst is proud to work with Cooperative Network in helping to better serve farmers across the Midwest.

Senator Sheila Harsdorf Appointed As Agriculture Head MPP Tracker

MonthAll-Milk

PriceMPP

Feed CostMPP

MarginTwo-Month

Average

May 2017 $16.70 $8.0857 $8.6142$8.9709

June 2017 $17.30 $7.9723 $9.3276

July 2017 $17.30 $8.2228 $9.0771$9.6712

Aug 2017 $18.00 $7.7346 $10.2653

Sept 2017 $17.80 $7.8109 $9.9890 N/ANumbers referenced are USDA’s Farm Service Agency national average prices and calculations used to determine indemnity payments under the Margin Protection Program for Dairy.

Member-Owned Health Plan Solutions for Rural Minnesota: 40 Square

40 Square is a health plan cooperative providing Minnesota farm families the control to manage their health care. Founded by Cooperative Network, the Minnesota and Wisconsin state trade association of cooperatives, and United Farmers Cooperative (UFC), an agricultural supply cooperative based in Winthrop, Minnesota, 40 Square has spent more than a decade advocating for rural Minnesotans and is working to bring sustainable health plan options to Minnesota’s farm families and their employees. Open enrollment will take place November 1 – December 15, 2017, with coverage effective January 1, 2018.

40 Square offers a self-funded health plan with six benefit options to choose from. Additional benefits such as dental, vision, and life are also available.

Self-funded health plans assume the financial risk for providing health care benefits. The 40 Square Consortium assumes the financial risk of the health plan being offered. Here’s how it works:

A trust is establishedStop-loss (reinsurance) is purchased to limit the risk and protect the health planA third-party administrator is contracted to provide administrative services

Self-funded plans are governed by the Federal Employee Retirement Income Security Act (ERISA) and are attractive because of the greater level of flexibility that comes with being able to tailor the plans based on the plan participant’s needs. Self-funded health plans allow for a more hands-on approach to the health care dollar. Feedback from health plan participants, along with claims utilization data, provide valuable information to make enhancements to the plans over time, thereby creating plan offerings that best fit the needs of its members. As self-funding matures over time, it allows for greater control and transparency of the health plan.

Gov. Scott Walker has appointed Republican state Senator Sheila Harsdorf as secretary of the Wisconsin Department of Agriculture, Trade and Consumer Protection.

The appointment announced in early November makes Harsdorf the first woman to lead the agency. She will replace Ben Brancel, who retired in August.

Harsdorf, of River Falls, has resigned from her northwestern Wisconsin state Senate and began her new role on Monday, November 13.

The 61-year-old Harsdorf served in the Assembly from 1989 to 1999 and has been in the Senate since 2001. She is a member of the budget-writing Joint Finance Committee. Walker said Harsdorf’s experience both as a lawmaker and dairy farmer makes her an “excellent fit” for the DATCP job.

“I am honored to serve as DATCP secretary and I thank Gov. Walker for entrusting me to lead,” she said. “I’m excited to work with and support our farmers, businesses and consumers to promote a fair marketplace and economic growth in Wisconsin’s vibrant agriculture industry.”

FarmFirst applauds the appointment of Harsdorf to Secretary of Agriculture. “Her experience and understanding of agriculture throughout Wisconsin will truly make her an ideal leader, especially when supporting the sustainability and growth of Wisconsin agriculture. We look forward to working with her.”

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Becoming a member of 40 Square:

According to the law, to become a member, they must be an employer (a farmer) who:

Actively works in production agriculture in Minnesota

Files either Form 1065 or Schedule F with your income tax return “or” provide direct services to production agriculture in Minnesota (farm corporations)

Purchase Voting Stock in an amount of $100.00

Purchase Common Stock of $1,000 over the first year

Three-consecutive year commitment

Has a minimum of one “Common Law” employee

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SEPTEMBER 2017UPPER MIDWEST CENTRAL MIDEAST

Order Name and Number Order 30 Order 32 Order 33Producer Milk (lbs.) 3,189,717,084 1,419,024,645 1,616,425,025Producer Price Differential @ base zone $ 0.18 $ 0.36 $ 0.64Statistical Uniform Price/cwt @ 3.5% BF* $ 16.54 $ 16.72 $ 17.00Class I Price/cwt $ 18.51 $ 18.71 $ 18.71Class II Price/cwt $ 16.80 $ 16.80 $ 16.80Class III Price/cwt $ 16.36 $ 16.36 $ 16.36Class IV Price/cwt $ 15.86 $ 15.86 $ 15.86Component Prices & Test Avg. % avesButterfat/lb. $ 2.8559 3.80% 3.80% 3.75%Protein/lb. $ 1.6988 3.10% 3.16% 3.08%Other Solids/lb. $ 0.22410 5.79% 5.74% 5.77%SCC Adjust Rate/1000 $ 0.00083Producer Milk Classified %Class I 8.40% 28.79% 33.20%Class II 2.00% 8.94% 17.30%

Class III 85.80% 49.50% 33.60%

Class IV 3.80% 12.77% 15.90%100.00% 100.00% 100.00%

PRESORTED STDUS POSTAGE

PAIDMADISON, WIPERMIT NO. 1

We would like to welcome these individuals and farms that have joined FarmFirst Dairy Cooperative recently.

We look forward to your participation and involvement in the programs and services of your cooperative where we put members first.

Welcome New Members

Happy Thanksgiving!

Scott Cernek

Robert, Linda & Amanda Hahn

Marvin & Kimberly Smith

Adam Smith

David Hable

Jeff, Laurie, Tyler & Ted Oberfoell

Richard Peterson

Ray Dittbrender

Wilson Brubaker

Mike & Melissa Wojcik

Ryan Schaufenbuel

Nominations now open for FarmFirst Leadership Roles!Visit www.FarmFirstDairyCooperative.com to learn more and to nominate future

leaders of these positions!

Save the Date! 2nd Annual Young Cooperator Conference

February 9 - 10, 2018Best Western Premier Convention Center, Oshkosh, Wis.

More information in the December MilkLine issue. Sign up to receive news and updates about YC events!