California dairy farmers will also see a temporary boost in their prices during the first quarter of 2010. After receiving proposals from dairy farmer organizations at a November 9 public hearing, the California Department of Food and Agriculture (CDFA) announced that it will temporarily amend pricing formulas for all classes of milk from January 1-March 31, 2010.

Dave Natzke reported in Friday’s broadcast that the effect of these changes should increase the monthly pool prices paid to farmers for those three months by approximately 15.5 cents per cwt.

In 2009, the prices that dairy farmers receive plummeted, dropping by more than half from 2008 levels, Natzke reported. In addition, dairy feed costs kept milk production costs at levels that greatly exceeded farm milk prices. As a consequence, California dairy farmers lost an estimated $1.4 billion in the first nine months of 2009.

Due to those economic factors, California’s 2009 milk production reversed its 30-year trend, and is running almost 4 percent lower than the total for 2008, according to Natzke. Additionally, a growing number of California dairy farmers exited the industry in the latter part of 2008 and into 2009, he said, and, for the first time in decades, the state’s milk production will be less than the total needs of its processing plants.

CDFA analysis said the adjustments will add about 3 cents per gallon to fluid milk production costs, which will likely be passed on to consumers, but the changes should not impact retail prices of other dairy products.

Low California milk prices, combined with high feed costs, has resulted in the reversal of a 30-year trend of increasing milk production in the nation’s largest dairy state, Natzke said, and, while the temporary price adjustment is not designed to recover the financial losses that California dairy farmers incurred over the past 12 months, it is designed to help dairy farmers sustain their operations as milk prices begin to improve to near profitability, CDFA said.

In other news, Natzke turned our attention to greenhouse gases and, with the backdrop of this week’s controversial global climate change meeting in Denmark, reported that USDA and the Innovation Center for U.S. Dairy has agreed to work jointly in an effort to reduce U.S. dairy industry greenhouse gas emissions by 25 percent over the next decade.

Although specific details are sketchy, a primary effort under a "Memorandum of Understanding” signed by U.S. Agriculture Secretary Tom Vilsack and Dairy Management Inc. CEO Tom Gallagher, will be to accelerate adoption of methane digesters on dairy farms. Additional USDA research support could include a look at how feed mixtures affect methane emissions from cows, Natzke concluded.

USDA Announces New Program To Provide Financial Aid To Dairy Producers

The California Department of Food and Agriculture (CDFA) will temporarily amend Class 1, 2, 3, 4a and 4b pricing formulas for the period Jan. 1-March 31, 2010. The effect of these changes will, on average, increase the monthly pool prices for the three months by approximately 15.5¢/cwt.

Under the temporary amendments, the subject of proposals considered at a Nov. 9, 2009 public hearing, CDFA will:

• increase the Class 1 price approximately 35¢/cwt. by adding 0.35¢/lb. to the milk fat price; 2.98¢/lb. to the milk solids-not-fat price; and 0.09¢/lb. to the milk fluid carrier price.

• increase the Class 2 and 3 prices approximately 25¢/cwt. by adding 2.05¢/lb. to both the milk fat and milk solids-not-fat prices.

• increase the Class 4a and 4b prices approximately 10¢/cwt. by adding 0.82¢/lb. to both the milk fat and milk solids-not-fat prices.

The adjustments will take effect for milk delivered to processing plants on or after Jan. 1, 2010.

CDFA analysis said the adjustment will add about 3¢/gallon on fluid milk products. Adjustments on other dairy product classifications will cost less than 1¢ per container in production costs, and are unlikely to have an effect on consumers at the retail level.

In 2009, the prices that dairy farmers receive plummeted, dropping by more than half from 2008 levels. In addition, dairy feed costs kept milk production costs at levels that greatly exceeded farm milk prices. As a consequence, California dairy farmers lost an estimated $1.4 billion in the first nine months of 2009.

Due to those economic factors, California’s 2009 milk production reversed its 30-year trend, and is running almost 4% lower than the total for 2008.  Additionally, a growing number of California dairy farmers exited the industry in the latter part of 2008 and into 2009.  For the first time in decades, the state’s milk production will be less than the total needs of its processing plants.

While the temporary price adjustment is not designed to recover the financial losses that California dairy farmers incurred over the past 12 months, it is designed to help dairy farmers sustain their operations as milk prices begin to improve to near profitability, CDFA said.

A detailed explanation of decision can be obtained on the CDFA’s Dairy Marketing website at www.cdfa.ca.gov/dairy and clicking on Hearing Matrix.

Lower Forecast Milk Production in 2010
(December 17. 2009) Lower forecast milk production in 2010, combined with continued recovery in dairy product exports, is expected to lift milk and dairy product prices in 2010 according to the Agriculture Department’s latest Livestock, Dairy and Poultry Outlook issued this morning. The report points out that feed costs have fallen substantially in 2009, but are unlikely to fall as much next year.  

The benchmark 16-percent protein ration value is projected to average in the mid-$7.00 per cwt range this year compared with over $9.00 per cwt in 2008. In 2010, the price should continue to fall, but not by nearly as much. Falling soybean meal prices will constitute a large share of the drop. Corn prices for the 2009/10 crop year are forecast to decline to $3.25 to $3.85 per bushel compared with the 2008/09 crop year average of $4.06 per bushel. Soybean meal prices are forecast to decline from $331 per ton average in 2009/10 to a forecast $260, with $310 per ton in 2010/11.

The U.S. dairy herd is forecast to continue to contract in 2010, with most of the herd reduction coming in early 2010 and attenuating later in the year. The report also includes a special article addressing the Cooperatives Working Together program.

Farmers Assuring Responsible Management
(December 17, 2009) Dairy producers now have online access to the National Dairy FARM program. FARM stands for “Farmers Assuring Responsible Management.” The program was developed by the National Milk Producers Federation with support from Dairy Management Incorporated.  

NMPF’s Chris Galen said in Thursday’s broadcast that this is a Federation New Year’s resolutions to get farms and marketing systems enrolled in the FARM program, which is a voluntary, nation-wide program that was designed to “bring uniformity to animal care through education, on-farm evaluations, and objective third-party verification.”  

Consumers and processors are paying more attention to where food is coming from and the conditions under which animals are kept and “We need to be proactive and play some offense in talking about the good things that dairy farmers are doing every day on their farms.”

But, to prove that, Galen quickly added, “We need to have a program like the FARM program that demonstrates a commitment from the birth to the death and throughout the life of the dairy cow so that involves everything from animal health to the environment to proper facility use to nutrition, transportation, and handling.

To learn more information, log on to www.nationaldairyfarm.com. Galen said the print materials will be supplemented in 2010 with videos because, “a picture is worth a thousand words,” and “we can describe things but a lot of times, with dairy farm practices, it’s a lot better to illustrate them and thanks to the era of YouTube, we now have the ability to put video clips on the website and we will be doing so next year.”

The Federal Order Class I base price is announced Friday morning. 

The California Class 2 price was announced at $13.02 for the north and $13.26 for the south. The January Class 3 price was announced at $12.97. 

Dairy Price Stabilization Program Proposed
(December 16, 2009) A number of proposals are being discussed around the country and on Capitol Hill to change how milk is priced to farmers in this country. One proposal that is being supported by California’s Milk Producers Council and several other producer groups around the country is called the Dairy Price Stabilization Program (DPSP). We talked about it with California dairy producer, Geoffrey Vanden Heuvel in Wednesday’s DairyLine.  

Vanden Heuvel began by pointing out that growth and demand for dairy products in the U.S. is very stable, averaging about 1-2 percent per year, in accordance with the population growth.

The problem, he said, is that, when milk prices are profitable, dairy farmers want to produce more milk, about 3-4 percent more milk, “that’s the incentive, that’s the result.” That, he said, is not sustainable if demand is only up 1-2 percent and “is why we have crashes and we have gotten into a boom and bust.”

The DPSP allocates market share, according to Vanden Heuvel, and if a farmer wants to grow beyond that 1-2 percent, he would pay a modest market access fee. That fee would go into a fund and all of that money would be distributed to the producers who did not increase their milk output above the 1-2 percent.

He called it a “simple dollar in, dollar out agreement amongst us as producers so that all of us don’t try to increase at the same time, which is unsustainable.” He added that the DPSP is unlike the Canadian base quota system which “has a rigid fixed base that has accumulated tremendous a lot of value because it’s transferable. “

Those elements are not part of the DPSP, he said, and “the plan has been designed to not accrue a lot of value in base and would not be a barrier to new entrants.” For more information, log on to www.stabledairies.com.

Cheese Traders Seem Comfortable
(December 15, 2009) Cheese traders seem comfortable with prices where they’re at, even with a 24 cent spread between the blocks and barrel. Block held Monday at $1.70 and barrels at $1.46 but 14 carloads of block traded hands.

Downes-O’Neill dairy economist Bill Brooks pointed out in Tuesday’s DairyLine, that’s five short of the entire previous week’s total. He added that “We can’t really say there’s a shortage but it does seem to be a pretty decent imbalance between those who need block cheese and those who have it and, at the moment, those who have it aren’t really letting go of it for anything less than $1.70 or in that ballpark.”

The barrel market seems more than adequately supplied, according to Brooks, and “buyers are getting a pretty good deal and, if sellers do have extra, they don’t want to push it down any more because that just increases the negative spread between what they’re paying for milk and the price they’re receiving for their output.”

Butter seems comfortable at $1.45, according to Brooks, but he warned of possible pressure ahead as domestic supplies build due to more milk entering the churn from school closings in the next week or so for the Christmas holiday. On the other hand, the international market appears interested in U.S. butter, he said, and “that could keep that pressure at a minimum.”

The Agriculture Department announces the January 2010 Federal order Class I base milk price Friday morning and preliminary November milk production data Friday afternoon. Brooks looks for a Class I price of $15.06 per hundredweight, with no MILC payment to producers. That would be an increase of $1.07 from December but would be 68 cents below January 2009.

H expects November milk production to be below November 2008, perhaps a little more decrease than what we saw in October which was down 1.1 percent.

(December 14, 2009) Dairy Management Incorporated board member and Washington State dairy producer, Liz Anderson, talked on Monday’s “DMI Update about one of the innovative products developed with help by the dairy check off’s partnership with Yoplait Yogurt. The “Smoothie” is a mix found in the freezer department of your local grocery store that you add a cup of milk to with frozen fruit, put in your blender, and enjoy, Anderson said.

The challenge in developing new food or beverage products is to come up with something that grocery chains are going to be willing to give the shelf space to and the dairy check off works with manufacturers to develop and test these kinds of new products, according to Anderson.

The Yoplait Smoothies come in three flavors and will eventually be found in grocery outlets across the country, Anderson said. “The more milk we sell, it helps us (dairy farmers) and helps make life long dairy consumers when we give the kids something they really like that uses a whole glass of milk.”  

(December 11, 2009) The cash dairy markets saw little change the second week of December but were well above a year ago . Block cheese closed Friday at $1.70 per pound, down 1 3/4-cents on the week but 18 3/4-cents above a year ago, when they tumbled almost 28 cents. That began a fall to $1.07 in the second week of 2009.

Barrel closed Friday at $1.46, unchanged on the week, 24 cents below the blocks, and 6 1/4-cents below a year ago when the barrels rolled 22 1/2-cents lower, beginning a slide to $1.07. Nineteen cars of block traded hands this week and two of barrel. The lagging, NASS-surveyed U.S. average block price gained 2.7 cents, hitting $1.5847. Barrel averaged $1.5168, up 2 cents.

Butter lost 2 cents Monday but gained it back Friday and closed at $1.45, unchanged on the week, but 34 cents above a year ago. Twenty cars were sold this week. NASS butter averaged $1.4982, up 0.8 cent.

Grade A nonfat dry milk closed Friday at $1.38, down 2 3/4-cents on the week, with two cars sold. Extra Grade held at $1.40. NASS powder averaged $1.2617, up 5.7 cents, and dry whey averaged 36.23 cents, up 0.9 cent.

Ag Leaders Concerned About EPA Report
(December 11, 2009) An Environmental Protection Agency (EPA) report released this week says greenhouse gases are a threat to public welfare. The report primarily deals with emissions from motor vehicles but agricultural leaders are concerned about it.  

The report is the result of a Supreme Court ruling in 2007, which ordered EPA to determine if greenhouse gases posed a public health threat, and whether the science surrounding greenhouse gases was reliable enough to develop regulations.

In essence, the report is a defense document authorizing EPA to regulate greenhouse gases under the Clean Air Act, according to Dairy Profit Weekly editor Dave Natzke in his Friday DairyLine report.

Natzke went on to say that leaders of several agricultural organizations are concerned it’s the next step leading to regulation of many farming practices under the Clean Air Act.

EPA has said the level of emissions from agriculture mean only the largest livestock operations would be subject to Clean Air Act regulations, but many farmers remain skeptical, according to Natzke.

Part of that concern stems from a 2006 United Nations report, titled “Livestock’s Long Shadow,” which identifies livestock as producing 18 percent of greenhouse gases, even more than transportation. That figure has gained almost "urban legend” status, Natzke reported, and has even prompted public campaigns to restrict livestock-related agriculture and urges consumers to reduce meat and milk consumption as a means to address climate change.

University of California Davis air quality specialist Frank Mitloehner charges those campaigns ignore scientific facts, estimating livestock production accounts for only about 3 percent of all greenhouse gas emissions and warns that restrictions on livestock production could lead to food shortages.

Natzke warned that we'll probably hear a lot about greenhouse gases in the next week or so, due to the international climate summit being held in Copenhagen, through December 18.

Natzke concluded on a sad note, reporting that the dairy industry lost a leader last week with the passing of Colorado dairy farmer Tom Camerlo. Camerlo, who had served as chairman of the board for Dairy Farmers of America since 2003, passed away on December 3. He previously served as chairman of the board for National Milk Producers Federation, the U.S. Dairy Export Council, and served on the board of Dairy Management Incorporated.

December 10, 2009) The Agriculture Department’s latest World Agricultural Supply and Demand Estimates report issued this morning says “dairy cow liquidation has been slower than expected and improving milk prices in 2010 are expected to diminish the rate of decline in cow numbers.”

Dairy exports for 2009 were raised slightly, reflecting third-quarter strength in cheese and nonfat dry milk demand. Import forecasts were lowered for 2009 and fat-basis ending stocks were forecast higher for 2010.

The report adds the caveat that, while milk production is forecast higher than last month, improving demand is expected to support prices for most products. The Department projects 2009 milk production at 189.2 billion pounds, up 100 million pounds from last month’s estimate. 2010 output is expected to fall to 187.9 billion, but that’s 200 million pounds more than was projected a month ago.

Prices for cheese, nonfat dry milk, and whey are forecast higher, but butter prices are forecast slightly lower. The Class III milk price forecast for 2009 was projected to averaged $11.30-$11.40 per hundredweight, up a dime from last month’s estimate, and the 2010 average is now put at $15.15-$15.95, up from the $14.95-$15.85 projected a month ago. The 2008 average was $17.44.

The 2009 Class IV price will average $10.75-$10.95, unchanged from last month’s report, and the 2010 average is now projected at $14.60-$15.50, up from the $14.20-$15.20 average expected last month. The 2008 average was $14.65. The all milk price is forecast at $12.70-$12.80 for 2009 and $16.35-$17.15 for 2010.

Farmers Still Waiting on USDA Payment
(December 10, 2009) Farmers are still waiting on USDA for details on the Dairy Economic Loss Assistance Payment Program (DELAP). California was scheduled to announce its January 2010 Class I prices Thursday but that is being held up pending possible changes resulting from the recent price hearing there.  

National Milk has called on Agriculture Secretary Vilsack to implement mandatory inventory reporting out of concern that recent revisions in cheese stock data may have artificially depressed the market. NMPF’s Chris Galen said in his Thursday DairyLine report that “we’ve seen this movie before where we’ve asked the U.S. Department of Agriculture to do a better job of keeping track of dairy data, whether its price reporting or in this case inventory reporting.”

Two weeks ago the National Agricultural Statistics Service revised its cheese inventory estimate and, while NMPF doesn’t believe the error had a major impact on farm milk prices, Galen said the errors could do so in the future if we don’t get better inventory reporting data.

Galen said they have worked on this issue since 2000 and got Congress to pass a bill empowering USDA to do a better job in inventory and price reporting but that still hasn’t happened, so the Federation wrote to Vilsack asking that he make sure that the Agricultural Marketing Service (AMS), not the NASS, perform the data collection to “bolster our ability to keep track of inventories.”

Dairy processors are on the same page, according to Galen, and in 2007, NMPF and IDFA wrote the Agriculture Secretary urging the use of mandatory electronic dairy price reporting and to make sure the AMS take care of it.

Calf Starter Technology Available From Land O' Lakes

(December 9, 2009) The internet has become a wonderful way of informing the public of various issues but it can also be used to disseminate false information and James Hunt, director of communications for the Texas Cattle Feeders, discussed a prime example of that in Wednesday’s DairyLine broadcast.

He discussed a rumor that has been circulating among e-mails for about seven years regarding unsafe beef and McDonalds. Hunt stated up front that this is not a rumor but is a “hoax.” He said the e-mail alleges criticism of McDonalds by the Texas Cattle Feeders Association, something that was never done, he said, and “We’re just hopeful that some day it will end.”

“U.S. beef is safe,” Hunt affirmed, “It’s wholesome, it’s nutritious, and there are abundant safeguards in place to make sure that is so.” He said there’s a variety of ways to communicate that to consumers and the Beef Checkoff is one of them.

Anyone in the business of selling beef has a responsibility to do so, according to Hunt, including dairy and beef farmers. The beef check off provides opportunities for producers to do that, he said, and “get educated on all of the information that supports the fact that U.S. beef and beef sold in the U.S. is wholesome, safe, and nutritious.”  

(December 8, 2009) Mary Ledman, Principal of Keough Ledman and Associates Incorporated in Libertyville, Illinois, said in Tuesday’s DairyLine that one of the interesting items in the report was the 1.2 percent increase in American style cheese production. That was the smallest gain that we saw in 2009 from 2008, she said, and the 5.2 percent increase in Mozzarella was the largest gain in 2009 over 2008 and typically indicates that foodservice sales, particularly pizza sales, are improving.

The price spread between block and barrel cheese narrowed a little in Monday’s trading with the blocks falling a penny and three quarters, to $1.70, while the barrels remained at $1.46. Ledman said there appears to be a significant quantity of barrel cheese in end user inventory. Barrels are a very storable product, she said, and end users bought in early this year and thus have sufficient inventory to last them through year end.

She believes the price spread will remain above the “normal” 3-cent spread, in fact the market may sustain even as much as a dime spread going into January. She attributes that to strong demand for current block or chunk and shredded cheese at this time and the 2010 export market “looks like it will be there to soak up any extra blocks we may have.”

The export market is looking promising for butter as well, though Ledman cautioned that the butter market is “fickle at this point.” Some people may be taking speculative positions because the international market is looking hot at this time, she said, but manufacturers historically like having a lower butter price in the first quarter of the year, when there’s typically more milk available to make butter, in order to sell it in the second half of the year.

October Dairy Products
(December 4, 2009) The Agriculture Department’s October Dairy Products report puts butter production at 111.9 million pounds, up 17.3 million pounds or 18.3 percent from September but 18.7 million pounds or 14.3 percent below October 2008.  

Nonfat dry milk output amounted to 91.5 million pounds, up 4.9 million or 5.6 percent from September, but 29.6 million or 24.4 percent below a year ago.

Mozzarella cheese output totaled 279.9 million pounds, up 7.6 million pounds or 2.8 percent from September, and 13.8 million or 5.2 percent above a year ago.

Total Italian type cheese, at 360.6 million pounds, was up 10.2 million pounds or 2.9 percent from September, and 12.5 million or 3.6 percent above a year ago.

Cheddar production totaled 261 million pounds, up 5.4 million pounds or 2.2 percent from September, and up 5.6 million pounds or 2.2 percent from a year ago.

American type cheese amounted to 347.2 million pounds, up 8 million pounds or 2.3 percent from September, and up 4 million pounds or 1.2 percent from a year ago.

Total cheese output came to 861.2 million pounds, up 18.2 million pounds or 2.2 percent from September, and 11 million pounds or 1.3 percent above a year ago. 

Dairy Markets Weekly Review
(December 4, 2009) Traders in the cash cheese market are leery of the wide price spread between blocks and barrels. The block price actually inched back a quarter-cent the first Friday of December, following a run of gains, and closed at $1.7175 per pound, up 6 3/4-cents on the week and the highest it’s been since December 2008, but still 7 1/4-cents below a year ago. 

Barrel closed at $1.46, down a nickel on the week, 28 3/4-cents below a year ago, and 25 3/4- cents below the blocks. Fifteen cars of block traded hands on the week and seven of barrel. The NASS U.S. average block price hit $1.5577, up 1.7 cents. Barrel averaged $1.4985, down 0.3 cent.

Butter closed Friday at $1.45, down 7 1/2-cents on the week but 19 1/4-cents above a year ago when butter melted down 24 1/4-cents, on its way to $1.11 the following week. Forty cars were sold in the first week of December. NASS butter averaged $1.4906, up 1.3 cents.

Cash Grade A nonfat dry milk closed at $1.4075, up three quarters on the week, while Extra Grade held all week at $1.40. NASS powder averaged $1.2048, up 3.1 cents, and dry whey averaged 35.35 cents, up 0.2 cent. Some question the discrepancy between the CME powder prices and the NASS surveyed prices.

November Federal Order Class III Price is $14.08

(December 4, 2009) Milk prices continue to recover and December levels will likely be the highest in a year, but there is concern for the other factor in the dairy profitability equation, according to Dairy Profit Weekly editor, Dave Natzke.

Speaking in Friday’s broadcast; Natzke said one such concern is production costs, of which feed plays the biggest expense. Based on USDA’s latest milk-feed price ratio, Natzke reported that improved milk prices are being offset somewhat by slightly higher feed prices. 

October’s milk-feed price index, which is an indicator of milk income over feed costs, was 2.19, up from September and the highest since February 2008. That came despite slightly higher corn, soybean and dry hay costs, which offset some of the gains of higher milk prices.

“The good news on the feed side is that a warmer and drier-than-normal November helped extend the harvest season, Natzke said, “Which has been running well behind average.”

As of November 29, about 79 percent of the U.S. corn crop and 96 percent of the soybean crop had been harvested; normally the harvest is all but finished at this time of the year, he said.

Even with the delays, farmers Natzke has talked to say yields are surprisingly strong, indicating large soybean and corn crops will help buffer feed prices somewhat.

Another big expense is labor and Natzke reported that speakers at the Dairy Business Association annual meeting in Wisconsin this week held out little hope of comprehensive immigration policy reform in 2010.

Angelo Amador, with the U.S. Chamber of Commerce, and Tamar Jacoby, with ImmigrationWorks USA, said comprehensive immigration reform lost its leading advocate with the death of Sen. Ted Kennedy, and that many in the Senate want to start from a blank slate.

“Health care, climate change and new jobs creation legislation will likely occupy Congress for some time,” Natzke concluded, “And immigration reform might be too hot to handle prior to next fall's mid-term elections.”

(December 3, 2009) Imports that are monitored remain below year ago levels, according to National Milk's Jim Tillison, with milk protein imports down significantly. Casein imports are down about 42 percent, he said, and milk protein concentrate imports are down 21 percent.

They are also down for the year, down 39 percent for casein and casinates and 14 percent for milk protein concentrates. Most product imports are down from the previous four year average as well, Tillison reported.

Butter and butter substitute imports are actually up from a year ago, according to Tillison, up 269 percent 428 percent respectively, but that’s a bit misleading because imports in 2008 were down a large amount, due to the drought in Oceania and the strong demand for butterfat in Asia in the Middle East.

Cheese imports are also monitored, Tillison said, and all of those were down in 2009, compared to 2008 on a year to date basis, except for Cheddar which was up slightly in the third quarter and for the nine months of 2009. For more information, log on to www.nmpf.org.

(December 2, 2009) The 25^th annual Dairy Forum will be held January 17-20 in Phoenix and DairyLine listeners got a preview in Wednesday’s broadcast from the International Dairy Foods Association’s Peggy Armstrong. She reported that this event is held every January and brings together leaders and innovators from across the dairy industry to learn from each other, discuss policies and politics, and chart a course for the year ahead.

The three days will focus on the key issues for producers and processors, according to Armstrong, milk pricing, the economy, food safety, nutrition, sustainability, and consumer demands.   

Groundbreaking research recently conducted by Bain & Company on global demand for dairy products will be reviewed, she said. A panel of dairy leaders will address what it means for dairy farmers and dairy food companies as to what role the U.S. dairy industry will play as demand for dairy products grows in places India and China over the next 10 years. Dairy CEOs from places like Russia and China will give a better understanding global market opportunities, she said.

“Dairy Forum is the place to take on the tough issues, Armstrong said. “We’ll take a good look at the recent low milk pricing and talk with farmers and economists about dealing with dairy price volatility,” and some of the industry’s leading dairy producers will share their point of view on the future of dairy farming and the Forum will recognize the Innovative Farmer of the Year at the annual awards luncheon.   

Dr. Stephen Sundlof, director of the FDA center for Food Safety and Applied Nutrition, will address what impact proposed food safety legislation will have on producers and processors, according to Armstrong, Ron Brownstein, of Atlantic magazine, will have an update on where things stand in Washington, DC, and Martin Regalia, of the US Chamber of Commerce, will discuss what the current economic indicators mean for dairy.

Dairy farmers are welcome to attend, Armstrong concluded. For more information and to register, log on to www.idfa.org. 

Market Analysis with Bob Cropp

(December 1, 2009) The cash dairy market at the Chicago Mercantile Exchange appeared to still be a little sleepy from last week’s turkey. The block cheese price inched up a penny, to $1.66 per pound, while the barrels lost 2 cents and slipped to $1.49, a 17 cent spread. Dr. Robert Cropp, Emeritus Professor at the University of Wisconsin at Madison, said the spread is pretty wide and won’t last long.

He questions whether the blocks will hold at this high level and expects them to slip some in the next few weeks. The cheese supply is fairly tight, he said, and sales are good at retail and for the Christmas holiday cutting and wrapping.

October American type cheese stocks are pretty high, according to Cropp, and we’ll see November data on December 22 and, while cheese sales are good, that price spread cannot hold, he warned.

The butter market remains at $1.5250, where it has been since November 9, but butter production is way down from a year ago, Cropp explained. The cream supply is tight, he said, and butter stocks are pretty good but current needs are strong and older stocks have been accessed. Reports are that restaurant sales are up some, he said, and retails sales are good, thanks to store specials.

Look for a November Federal order Class III price of around $14.05-$14.08 per hundredweight, according to Cropp’s prediction. That would be an increase of $1.23 from October but would be $1.46 below November 2008.

The powder market is also strong, Cropp said, so he looks for a Class IV price of around $13.50. That would be an increase of $1.64 from October and $1.25 above a year ago.

California's 4a and 4b prices are announced today. We will post complete details here as soon as possible.