Saying that rising costs have made its dairy business unprofitable, Wilcox Family Farms, Roy, Wash., will shutter its main dairy plant this month. The company will instead focus on its parallel business line in egg production.

Wilcox to Close Main Dairy Plant

Saying that rising costs have made its dairy business unprofitable, Wilcox Family Farms, Roy, Wash., will shutter its main dairy plant this month. The company will instead focus on its parallel business line in egg production.

 “This was a very difficult choice because our staff is like family,” said Jim Wilcox, chairman. “Many employees have been with us for two or even three generations. We want to get out of the big company environment and back into real family farming.”

About 130 of the company’s 365 employees will lose their jobs the company says.  Some of the employees will join the egg division. Wilcox is working with neighboring Darigold to see that customers continue to receive milk.

The company will keep open its Eastern Washington dairy facility in Cheney. The company said it would put more focus on natural and organic products from its own farm, including cage free eggs.  

Wilcox is a 99-year-old company that has operated a dairy processing business for more than 30 years.

2007 Exports Surpass All Expectations

A number of factors have come together to help boost U.S. Dairy Exports in the last 18 months, but a new report from the U.S. Dairy Export Council shows that for in 2007 export growth simply clobbered all expectations. 

Coming off $1.9 billion in export sales in 2006, crossing the $2 billion threshold in 2007 seemed like a reasonable goal, USDEC said.  But U.S. dairy suppliers were able to capitalize on unprecedented tight global supply to not only pass $2 billion but also exceed $3 billion in overseas shipments. In 2007, U.S. exports of milk powder, whey, cheese, lactose and other dairy products were valued at $3.06 billion, up a whopping 62% from the prior year, and nearly triple the export value of 2002, according to analysis of trade data conducted by USDEC. With this growth, the U.S. dairy industry posted a trade surplus in 2007. Imports increased 8% to $3.05 billion, $11 million less than exports. That’s a sharp contrast to two years ago, when import values exceeded export values by $1.1 billion, USDEC notes.

In 2007, more than 9.5 % of U.S. milk production (on a total-solids basis) was sold overseas, according to USDEC.

“We witnessed remarkable events in 2007, events that had never taken place before,” explains Tom Suber, USDEC president. “World prices for most commodities doubled in a matter of months. International benchmark prices climbed above U.S. levels for an extended period of time. U.S. exporters sold $189 million worth of product last year to the European Union and Australia, both major dairy competitors.”

A variety of factors came together in late 2006 to set the stage for a dramatic, worldwide structural shortage of dairy products in 2007. On the supply side, devastating weather-related production declines in Australia and Argentina; lack of growth in Europe due to production quotas and ongoing cuts in support prices; export restrictions in India and Argentina; and slow growth in U.S. production in the first half of 2007, left less product available for export.

Meanwhile, the suspension of export subsidies in Europe and the continual weakening of the U.S. dollar helped make U.S. dairy products more competitive on the world market.

And through it all, exceptional demand from developed and developing countries alike left buyers in a sellers’ market most of the year.”

Export gains in 2007 were evident across nearly all product categories. By value, the major U.S. dairy exports were skim milk powder/nonfat dry milk ($865 million), whey proteins ($759 million), cheese ($387 million) and lactose ($304 million). These four categories made up nearly three-quarters of total U.S. exports.

Mexico ($854 million export value in 2007), Southeast Asia ($555 million) and Canada ($412 million) remained the largest destinations for U.S. dairy products.

• U.S. exports of whey proteins in 2007 were a record-high 969 million lbs., up 26 %. 

• Exports of sweet whey to Canada and Mexico jumped 121 % .

• Once again, the bulk of the gains in exports of WPC went to Mexico, by far our largest market with 124 million lbs. (+57 %).

• Exports of fluid milk increased 85%, to 102 million lbs. Shipments to Mexico, which make up nearly two-thirds of exports, rose 91% and exports to Canada increased 82%. 

• U.S. cheese exports hit a record high 219 million lbs. in 2007, up 40% from the prior year, says USDA. Shipments to Mexico and Japan, our two largest markets, increased 38% and 30%, respectively, while exports to the Caribbean and Central America were up 26%. 

• Shipments of butterfat increased almost four-fold, to 90 million lbs. This was the highest figure since 1995, when the majority of U.S. exports were via government programs. Of this total, more than one-third of the shipments went to the European Union, a remarkable volume for a region that imported just 440,000 lbs.

• Exporters shipped 588 million lbs. of SMP/NDM last year, down 9% from 2006. Reduced supply in the first half of the year limited export volumes. By the time U.S. production rebounded at mid-year, importers had shifted into less aggressive positions, opting to hold smaller inventories in the face of dramatically higher prices and waiting for prices to stabilize at lower levels, USDEC explains.