Ag and Feed Alliance Stresses Continuity, Change

2/16/2013 7:00 AM
By Amy Halloran New York Correspondent

ALBANY, N.Y. — The Northeast Ag and Feed Alliance held its ninth annual meeting Feb. 4-5, drawing nearly 200 people to Albany to hear experts discuss issues core to the trade industry organization’s mission and members.

Future Farmers of America provided an opening ceremony, followed by welcomes from outgoing board President Art Whitman and Executive Director Rick Zimmerman.

Referring to the Ram Trucks Super Bowl ad, “So God Made a Farmer,” and another commercial for Lincoln cars, Zimmerman said they reflected continuity, and change, two elements important to the alliance.

“It’s always a challenge to remain relevant,” he said. “Value is in the eye of the beholder, driven by when we were born.”

This necessitates that the organization acknowledge and serve the changing needs of its members, across generations and technology divides, amidst a changing industry, he said.

“The alliance made an effort to build relationships throughout the Northeast, meeting with land grant colleges and universities, legislators and secretaries, commissioners and directors of agriculture in the Northeast,” said Louise Calderwood, director of government relations for the alliance.

Such relationships led to the agriculture department in New Hampshire reaching out to the alliance as key legislation is considered, he said.

Mary Keough Ledman, founder of Keough Ledman Associates, a dairy economic consulting firm, and publisher of the Daily Dairy Report, gave a detailed analysis of dairy prices over the last few years, and made some predictions.

“Dairy farmers around the world are having their profitability pinched,” Ledman said, describing 2012, which had a strong start but experienced a serious price dip with the drought.

She said recovery or expansion is not expected until at least the second half of 2013, or even 2014, depending on weather and markets. “Favorable grain harvests will help milk prices,” she said.

After a thorough overview of world and national markets, broken down by regions in the United States, and lead players around the world, Ledman took questions from the audience. The first regarded the decline in fluid consumption and general shift in milk utilization to nonfluid products. What advice did she have for the dairy industry in the Northeast?

The question opened up a frank assessment of the dairy industry and the problem of fluid milk pricing. The current system, Ledman said, is based on outdated problems.

“We didn’t have transportation or refrigeration then as we do now, and here we are 70 years later, using a system designed for the policy challenges of 1937,” she said. “People come to me and say, I have a new product.’ We discuss the different classes of milk prices and how they are regulated verses other dairy ingredients. Often they decide they can use whole milk powder or nonfat dried milk in the formulation because dry ingredient prices are less complicated and dry products can be stored. That new product might taste a whole lot better with fresh fluid milk.”

Changing the way milk is priced will be key to the industry, Ledman said.

During a break, Whitman spoke about his experience with the alliance, and with its predecessor, the Northeast Grain and Feed Council. He is owner of Whitman’s Feed in North Bennington, Vt., which serves southern Vermont and eastern New York state.

While he couldn’t summarize the changes the industry has experienced, nor predict where change is going to land, he paraphrased a quote from Darwin that occurs to him frequently.

“It’s not the strongest or most intelligent that are going to be around, but those who are willing to change,” said Whitman.

On a personal level, he said his business added a lot of pet supplies to capture the retail sector and supplement its feed operations.

Dennis Gartman, publisher of the Gartman Letter and an MSNBC contributor, delivered a lively talk on global and national economic trends, carrying the audience with his strong story-telling style and equally strong opinions..

“I’m quite bullish about what’s going on in the economy. I’m astonishingly optimistic about what’s happening,” Gartman said. “I think the American consumers and American corporations are as liquid as they’ve been.”

Jeff Simmons, president of Elanco, said, “My challenge to everybody today is will you be more valuable one year from now than you are today? Will your feed mill be more competitive one year from now than today?”

He spoke about the need to double food production, and our country’s role as a leader in food security. Three million people will be moving from subsistence to middle class, and to a diet of meat, milk and eggs, he said.

“There’s never been more opportunity in feed,” Simmons said. “Yes there are challenges and tight margins, but there’s more margin of opportunity in feed to make a difference than ever before.”

That global opportunity can be seized, he said, by taking advantage of innovative products and approaches, working within a predictable regulatory framework, and with tools to monitor and shape consumers.

Breakout sessions followed, including one from Jessica Ziehm, executive director for the New York Animal Agriculture Coalition. Ziehm led a discussion about the importance of keeping the consumer in mind, even for businesses that live in the middle and might not have direct contact with that consumer.

Richard Sellers, vice president for feed regulation and nutrition at the American Feed Industry Association, led another breakout session discussing the Food Quality Protection Act.

“The rules on feed safety are out this month, and we’re in the midst of the 120-day comment period. The FDA is going to hold public meetings,” said Sellers, who is trying to get the message out about those rules.

He referred people to the Safe Feed/Safe Food Certification Program, which has been in existence for nine years and will help people get up to speed for the incoming regulations. For more information on the program, visit http://safefoodsafefeed.org.


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