July 2009 Archived Dairy News

Friday, July 31, 2009
Ag Prices Report: Corn Drops 70 Cents
NMPF Applauds Expansion of Dairy Price Support Program to Help Farmers  
At Gillibrand's Urging This Week, USDA To Increase Dairy Pricing
Obey Welcomes USDA Action To Boost Prices To Dairy Farmers
Federal Order Benchmark Milk Price Remains At $9.97
Dairy Markets Weekly Recap
Feingold Welcomes Relief For Wisconsin Farmers
Dairy Profit Weekly with Dave Natzke
Dairy Market Report for the end of July 2009
Vermont's Sanders Demands Higher Milk Payments
US Senate taking up import loophole to boost milk prices
College Grove dairy farm expands
Thursday, July 30, 2009
Udall Supports NM Dairy Farmers in Meeting with Ag Secretary
Dairy Does D.C.
N.Y. senators seek dairy aid
Everyone in America Profits From Agriculture, Except Farmers
Online Video Feed
Statement of U.S. Sen at or Russ Feingold On Meeting with Agriculture Secretary Vilsack
Schumer eyes milk import limits
Market Advisor: US Cattle Herd Continues To Decline
Dropping Milk Prices Cause Dairy Farms to Struggle
It's clean, it's green, it's cow manure power
County Farm City Day set Aug. 8
Wednesday, July 29, 2009
House Members Reconstitute Congressional Dairy Farmer Caucus...  
Beef Checkoff Benefits Dairy Producers By Defending Veal Industry
New York lawmakers revive dairy caucus
Idaho congressmen to the rescue of dairy industry
House Agriculture Subcommittee on Livestock, Dairy and Poultry Hearing
Dairy Leader Testifies Government Can Help Dairy Exporters Maintain Markets
Sanders spars with Dean Foods CEO over milk prices
Bank Of America Reaches $100M Settlement With Parmalat
Holsteins took center stage at the Lebanon Area Fair
Butter sculptures pay tribute to Ohio's dairy farmers
UK: New dairy unit open day at Harper Adams University College
Wednesday, July 29, 2009
Beef Checkoff Benefits Dairy Producers By Defending Veal Industry
New York lawmakers revive dairy caucus
Idaho congressmen to the rescue of dairy industry
House Agriculture Subcommittee on Livestock, Dairy and Poultry Hearing
Dairy Leader Testifies Government Can Help Dairy Exporters Maintain Markets
Sanders spars with Dean Foods CEO over milk prices
Bank Of America Reaches $100M Settlement With Parmalat
Butter sculptures pay tribute to Ohio's dairy farmers
UK: New dairy unit open day at Harper Adams University College
Tuesday, July 28, 2009
Market Analysis with Robert Cropp
Dairy coops sign marketing agreement
Dean Foods Company Announces Webcast of Second Quarter Earnings ...
Why some dairy farmers aren't waiting Till the cows come home
Robo-dairy
Dairy sees transition over 70 years
Tenn. dairies struggle with falling prices
Lotterman: Low prices mean tough times for dairy farmers
Jonker Promoted to NMPF Vice President of Scientific & Regulatory Affairs  
Monitor Individual Somatic Cell Counts to Improve Herd Health  
Monday, July 27, 2009
Milk Producers Council Weekly Update
Western United Dairymen Update
Market Advisor: What's Up Or Down With Cow Prices?
Milk fees proposed
Got Milk? Restaurants Do
National Ice Cream Month Event a Ringing Success
Research Shows Still Time to Increase Hay Yields
India: Ludhiana cow creates national record in milk production
Cabinet Members Publish Energy Op-Eds in Regional Papers
Economy Hits Local Dairy
Recalling a happier time for Sonoma County's dairymen
Heifer Import Update
Iowa family: Robotic milker lets them leave farm
Tillamook: the town that cheese built
Ag Secretary Names Additional USDA Staff
Livingston Co. brothers raise 2 behemoth bovines
Penn State Ice-Cream Grad Is 'King of Cones' in Ky.
Friday, July 24, 2009
Dairy Markets Week in Review
AFACT Summit: Working Together To Create Solutions
Cropp: Dairy Prices Won't Rise Until Production Falls More
Vermont panel hears from dairy farmers
Lawmakers seek relief for dairy farms
France's Groupe Danone says H1 profit rises 44 percent as dairy ...
Thursday, July 23, 2009
Mid-Week Milk Production Update
What To Do To Relieve Financially Struggling Dairy Producers
NMPF Strategic Planning Task Force Meets...  
Statement of Paul Rozwadowski On Behalf of the National Family Farm Coalition
Vermont presses milk price supports in Washington
Man trampled to death on Glenmore dairy farm
Dairy Judging teams head to state event
Wednesday, July 22, 2009
Checking the Cupboard: June Cold Storage Report
ABC News Video - Dairy Farms Disappear
U.S. cheesemakers take the world stage
Campaign Responds To Beef Safety Issues in the Media
Statement of Paul Rozwadowski on behalf of the National Family Farm Coalition
Report Confirms Feingold, Gillibrand Concerns About Impact of Down Economy....
Legislation includes 'cattle gas tax' exemptions
Dairy Farmers of America pays members $9.5M to counter tough economy
Hearings Continue On Dairy EconomyDairy producer dumps milk to send a message
Missouri dairy farmers ask Congress for help
Georgia Milk Producers Testifies To Congressional Panel
Sanders: Dairy processor profits as farmers suffer
Our view: State dairy farms disappearing  sinking in debt
Dairy Deja vu
Despite obstacles, optimism remains for 'cow power'
Family members create success on Melrose dairy operation
Fort Dodge: Single-Dose, Combination Dairy Cattle Vaccine With ...
Tuesday, July 21, 2009
Market Analysis with Bill Brooks
ID: Dairymen are losing between 100 to 150 dollars per cow per month
Thriving organic farm shuns grain
Ag Funding Bill Addresses Vital Wisconsin Needs, Obey says
Pre-, probiotics combo may reduce food allergy: Danone study
Dairy Industry Milked By Recession, Heat
Dairy Situation & Outlook: Milk Production Drops Below 2008 Levels
New Zealand: Average dairy farm made $58500 cash loss in 2008/09: MAF
Prairie Farms’ school milk bid reflects challenges
Cow project `awesome'
Miss America visits Elkhart County Fair
It's The Pitts: Fair Game
Monday, July 20, 2009
Projected MILC payouts are down with lower feed prices
Weekly Updates MPC  WUD  AWMP 
GIPSA reviewing 'unfair practices'
Getting creamed  Vermont Milk Co. closes
Plunging prices hurt dairy farms  Dairy in Distress
USDA slow to act on milk price crisis
North Coast dairy cows sold to slaughter as milk prices fall
NY dairy is feeling the squeeze
Dairy farmers continue to struggle, ask Congress for help
Pa. senators co-sponsor dairy industry bill   Request Aid For Dairy Farmers
Vilsack meets with farmers in Virginia
McCafe Contains Up To 80 Percent Milk
Pfizer Animal Health Program Continues to Support AABP and FFA 
Hot Weather Affecting Dairy Farmers
Misleading growth hormone label on Ohio dairy products must be changed
Cattle Outlook: Beef Exports Down, Slaughter Decreases
National Guernsey Convention Sale has $59,000 Top Seller
Lomira FFA's Buske claims dairy judging grand championship
A taste of Sassy Cow Creamery
Sen. wants antitrust probe of Dean Foods
New Zealand plans to help develop RP's dairy industry
Friday, July 17, 2009
June Milk Production Down 0.1 percent
Dairy Markets Weekly Recap
August Federal Order Class I Base Price Slips
Feed Prices To Moderate But Not Enough to return Profitability
Exports Lagging, More Time Needed For Global Markets to Recover
Klobuchar: 'Additional help for Minnesota's dairy farmers needed'
Experts: Cutting herd size only road to recovery
Vilsack Goes to Wisconsin
Sen. Feingold on Obama Administration's Rural Tour Through Wisconsin
WisBusiness: USDA's Vilsack hears complaints from small organic...
Vilsack Announces $760 Million in Direct Loans to Farmers and Producers
AL: Grocery prices fall 2 percent
2009 Hawaii State Farm Fair: Naked Cow Dairy
FLDS fiduciary defends cow sale decision
Thursday, July 16, 2009
NMPF Asks USDA To Temporarily Raise Price Support Program Purchase Prices
The July Dairy Outlook from Penn State is at http://dairyoutlook.aers.psu.edu/
Official: USDA response on track
Dairy chief says subsidies hinder industry's growth
Iowa dairy farmers losing ground to low prices, demand
Ohio's top dairy counties look for answers to falling prices
Sanders seeks antitrust investigation of dairy foods company
Dairy farmers' milk profits dry up
Sampling seven milks and one dairy farm
Cows get spa treatment
At the fair: Thomas takes top market steer honors at FFA District Fair
Dairy Crest Q1 as expected, Chairman leaves
Wednesday, July 15, 2009
Reducing Milk Supply Raises Concerns
Guest Editorial by Arden Tewksbury, Manager, Pro Ag  
Family Farmers and Consumer Group Expose House Ag Hearing...
Psychological attachments make hard times even harder for dairy...
Global Recession Impacts Dairy Prices, Farmers
Dairy Specialist: Producers Facing Low Prices Have Options
Young's churning out new cheeses  Related
Welch seeks more subsidies for milk producers
USDA Accepts DEIP Bid for NFDM to Asia and Eurasia
National Dairy Acquires Promised Land Dairy
Ordering From The Menu Of Dairy Breeding Programs
Lewis County Fair's life-size faux cow needs a name
Ken Bailey Joins FCStone As Full Time Broker and Consultant
Oelwein dairy woman takes pride in her work
Tuesday, July 14, 2009
Emergency Meeting Update
NMPF Tells Congressional Panel That Dairy Farmers Are Facing Economic Crisis... 
Market Talk with Al Levitt
Twenty-two farms kick off New York's statewide Dairy Profit Team ...
NFFC Denounces House Ag Committee For Exclusion From Dairy Crisis Hearing
WMMB Board of Directors Elects Leadership  
RABDF Welcomes European Food Safety Authority Report
Fonterra skirts auction critisism, looks to future
Monday, July 13, 2009
California Class 1 Prices Announced
Crisis in the Dairy Industry: Emergency Meeting on July 17 
MILC Payments Projected Through Next June
Alliance of Western Milk Producers
Western United Dairymen Update
Milk Producers Council Weekly Update
Cattle Outlook: Fed Cattle & Beef Demand Down, Cash Fed Cattle...
New Dairy Farm To Debut
Agriculture critical to the economic health of our state
Vilsack Offers a Little Solace to Struggling Dairy Farmers
Promoting Pizza's Place in School Lunch Programs
National DHIA Announces Scholarship Program Information
Local dairy operators in crisis, at crossroad
State dairy farmers need a helping hand
When farmers feel despair
Organic Dairy Farmers Set for Symbolic Dumping of Milk
Dairy Farmers Voice Concerns Over Low Milk Prices
Catering to Cows: Cushy conditions lead to increased production...
Milking skills tested at Rockville Rock-Fest
Forage Superbowl Announces Cash Prize Awards For 2009 Contest
Ohio County Farm Celebrates Centennial
Experienced hands, new talent and princesses compete at Rock-Fest
Friday, July 10, 2009
Dairy Market Weekly Recap
CWT Announces Second Herd Retirement Of 2009  
CWT's Jim Tillison Discusses Today's Herd Removal Announcement
World Ag Supply and Demand Estimates
Consumers are benefiting at the checkout stand
Recession milking area dairy farmers dry
Calling All Milkmen
EFSA Advises On Welfare Of Dairy Cows
Organic vs. natural a source of confusion in food labeling
Organic milk boom slows down
Briefs: Milk mustache tour coming to Sycamore
Tail docking bill clears committee
Federal support sought for ailing SA dairy farmers
Bovine TB cow found in region officially free of the disease
Thursday, July 9, 2009
Serious Concerns Over Climate Change Legislation
News for Dairy Co Ops 
Dairy Organizations Praise Prompt Action By USDA On Dairy Export Incentive Program
Dairy farmers question MILC program
$20.5 million ante for Humboldt Creamery
Farmers reducing greenhouse gases
Start With Essential Nutrients, Energy When Rebuilding Rations
Help on the farm
Dairy management highlighted at Kentuckiana Dairy Exchange
A Dairy Farm Can't Lay Off the Cows
NC legislators compete in milk-chugging contest
Dairy Princess traveling the milky way
Wednesday, July 8, 2009
Beef is the End Product of All Dairy Animals
Holstein Association USA, Inc. Board Meets in Sacramento 
Forage production workshop hosted by NMSU
Herdsman's open (barn) door policy
Dairy Farmers Losing Money
Tuesday, July 7, 2009
California Class 1 Prices Delayed
Market Analysis with Brian Gould
Ranchers, Regulators Weary from Cattle Fever Tick War
Vilsack says help coming for dairy farmers
Dairy Farmers in Dire Straits
Westport dairy farmers hope grant takes business to next level
Video: Tour of Fair Oaks Dairy Farm
Monday, July 6, 2009
USDA Announces Initial 2009-2010 Allocations For Dairy Export Incentive Program
Farmers Must Think Outside The Milk Carton To Survive
Help Offered For NH Dairy Farmers
Vilsack: loan help coming for dairy farmers
Refugee Workers Find Jobs in Oregon Dairy
Consumers Tastes Change 
In Good Times And Bad, Dairy Farmers Must Keep To Their Daily Routine
Enterprise Working To Keep Local Dairy Farms Viable
Minnesota dairy farmers talk about tumbling milk prices
Milk prices concern dairy farmers
Fresno dairy can't escape 'milk pool'
Area dairy farmers feeling spring's rain
Hollis dairy closes after months of downsizing, leaving 32 without ...
Friday, July 3, 2009
2009: A Difficult First Half For Dairy Producers
MILC Payment Rates and Projections
Dairy Markets Weekly Review
Western United Dairymen Weekly Update
Regular, rbST Free and Organic Milk Prices Compared
CWT to blame for lower cull cow prices?
Sen. Dean Florez's tail-docking bill approved
Fresno dairy can't escape 'milk pool'
International Jersey Tour to Visit New England Dairy Herds
Cattle Outlook: USDA Corn Estimate Up $2 Million, Feeder Cattle...
Beef & Cattle Trade Update
Market for organic milk goes sour
Holstein Field Night Draws Big, Hopeful Crowd
A happy cow is a healthy cow
Michael Jackson to be made into butter statue
Local ice cream maker marks 25th year
Australia: Dairy farmers face another price battle
Thursday, July 2, 2009
May Dairy Products Report
June Federal Order Class III Price Up 13 Cents
CWT Finishes Herd Retirement
One More Thing USDA Can Do To Help Cash Strapped Dairy Producers
Dairy farmers find themselves in danger
Dairy-Cow Kill to Double Milk Price After Slump
Rell signs bill protecting dairy farmers
AI24 Heat Detection System Provides Profitable Results
Still Falling Dairy Prices May Pressure NZ Dollar
Third generation dairy farming
Salmonella concerns prompt dairy shakes warning
Recession touches organic dairy farming
Wednesday, July 1, 2009
California Class 4 Prices Released
Farm Milk Prices and Retail Prices Tend to Move Together Over Time  Graph
What's Up (Down) With The Cull Cow Market?
Dairy Checkoff Update - June 2009
International Jersey tour pays visit to Western NY
Dairy Farmers Rally for Prices
Milk is a bargain, and dairy farmers getting squeezed
Milk Prices Could Be On The Rise
Greener Pastures For Dairies
Dairyman finds new business outlet
Pfizer Animal Genetics now running Osteopetrosis test
Third generation dairy farming
Lehman's Holstein cow takes Supreme Champion
Agriculture Secretary Vilsack to Lead Obama Administration's Rural Tour
June Livestock, Dairy, and Poultry Outlook are now available in *.xls format
Australia: 'Cruel' dairy loses milk contract

Ag Prices Report: Corn Drops 70 Cents
(July 31, 2009) The July Milk-Feed Price Ratio is 1.65, up from June's revised estimate of 1.45, according to USDA’s “Ag Prices” report issued this afternoon, and compares to 1.90 in July of 2008. 
 
The All Milk Price was estimated at $11.30 per hundredweight, unchanged from last month's estimate, but $8.00 below a year ago. Corn averaged $3.33 per bushel, down 70 cents from June, and $1.92 below a year ago. The soybean price, at $10.30 per bushel, was down $1.10 from June, and $3.00 below a year ago. Alfalfa baled hay was $120.00 per ton, down $8.00 from June, and $57.00 below a year ago.

(July 31, 2009) Market reaction to USDA’s increased purchase prices was instant Friday morning with block cheese jumping 6 cents and barrels up 7 cents. The block price closed at $1.2850 per pound, up 8 1/2-cents on the week but 2 1/2-cents below the new temporary support price, and 55 cents below a year ago when the blocks tumbled 23 1/4-cents to $1.8350.

Barrel closed out July at $1.26, up 9 cents on the week, 2 cents below the new support price, and 54 cents below a year ago. Only eight cars of block traded hands on the week and seven of barrel. The lagging NASS-surveyed U.S. average price on block cheese inched up 0.3 cent, to $1.12. Barrel averaged $1.1254, up 1.4 cents.

Cash butter closed out the week and the month at $1.2450, down a penny and a half on the week and 33 cents below a year ago. Forty two cars were sold on the week. The price support on butter was not changed. NASS butter averaged $1.2290, up 4.1 cents.

Cash Grade A nonfat dry milk jumped 2 cents Friday, to 91 cents per pound, and Extra Grade gained 2 1/-cents, closing at 90 cents, on two unfilled bids of each. NASS nonfat dry milk averaged 84.99 cents, up 1.3 cents, and dry whey averaged 29.53 cents, down 0.1 cent.

Uncle Sam’s price support program purchased 868,904 pounds of nonfat dry milk on the week but exported 11.9 million via the Dairy Export Incentive Program.

Federal Order Benchmark Milk Price Remains At $9.97
(July 31, 2009) The nation’s July benchmark milk price was unchanged from June. The Agriculture Department announced the July Class III price at $9.97 per hundredweight but that’s $8.27 below July 2008. Class III futures, as late Friday morning portends a rebound in August to $11.06, then $12.31 in September, $12.78 in October, $13.40 in November, and $13.70 in December. The 2009 average now stands at $10.16, down from $18.25 a year ago and $16.86 in 2007. The July Class IV price is $10.15, down 7 cents from June and $6.45 below a year ago.

(July 31, 2009) U.S. Agriculture Secretary Tom Vilsack met with dairy state lawmakers late this week and is apparently willing to temporarily raise prices the government pays for dairy products under the Price Support program in an effort to support farmer milk prices.

Dairy Profit Weekly editor Dave Natzke reported Friday that details are sketchy but USDA is negotiating a final purchase price increase with the Office of  Management and Budget and hopes to have a decision before an August Congressional recess begins.

In other dairy news, Natzke also reported that a U.S. Court of Appeals ruled against some dairy producers seeking to block higher Class III and Class IV manufacturing or “make” allowances in federal milk pricing formulas.

Make allowances are the amount of money dairy processors can deduct from the milk price they pay to farmers to help cover manufacturing costs. USDA raised make allowances for cheese, butter, whey and nonfat dry milk last fall, but a lawsuit filed on behalf of nine dairy producer groups charged USDA failed to consider 2008 Farm Bill requirements when raising the deductions.

The District of Columbia Appeals Court affirmed a previous court decision, apparently closing the book on a debate that has been going on for more than two years. And, as far as the ruling and the impact on dairy farmers, it probably won’t, Natzke concluded, because USDA implemented the changes last October.

(July 30, 2009) “Congress gets it,” said National Milk’s Chris Galen in his Thursday report. Galen reacted to Wednesday’s Congressional Dairy Caucus press conference were Rep. Tom Perriello (D-VA) made a telling statement; “Everyone in America profits from agriculture, except farmers.” Another representative pointed out that every dairy farmer in America is losing money, not just a few.

Galen said Congress understands there is a crisis on farms and that’s the reason for this “very broad bipartisan group of representatives coming together to look for policy solutions that the House and Senate can engage in to help farmers.”

National Milk was happy to be a part of this, Galen said, and provided input to the caucus members and is recruiting others. There are at least 50 House members on board, according to Galen, from Vermont to California, even members who may not represent rural areas because “They realize a lot of people have a stake in dairy farming, not just farmers but ultimately consumers who want to have affordable and locally-produced foods. They have a stake in dairy policy as well.”

The $64,000 question is what can be done. Lawmakers can weigh in with USDA to boost the price support program levels, which NMPF has called for Galen said, and make full use of the Dairy Export Incentive Program, which NMPF has also asked for, but Galen pointed out that this is not just about pricing.

There are other issues that Congress has control over that affects dairy production, Galen said, such as immigration reform, food safety, the environment, climate change. “Those are all big picture issues that have an impact or will have an impact on farming that need to have members of Congress be aware of, of the stake for dairy farmers.”

Beef Checkoff Benefits Dairy Producers By Defending Veal Industry
(July 29, 2009) The beef check off benefits dairy producers by defending the veal industry, according to Michigan dairy and veal producer Dan Javor. Javor began Wednesday’s “Beef Board Update” by pointing out that the check off does many things so it’s hard to just list a couple but, “For the small investment made, when issues arise, there’s a ready source of people to correct any misinformation that’s put out, whether beef’s nutrition value is questioned or production practices are.”  

The check off also funds research to improve the safety of the beef and veal that consumers purchase, according to Javor, and promotes beef in print and radio advertising to increase beef demand so farmers end up with better prices.

The veal industry has been hit by criticism by animal rightists and those with a vegetarian agenda but the check off works to defend veal despite having a very small budget. Veal issues are monitored and farmers are kept informed, Javor said. The check off also promotes the positive story of the veal quality assurance program and the producer education and certification programs to “defend veal in the minds of consumers as being safe and nutritious and good tasting.”

If there was no check off program, there would be no one to defend the industry, he said, and “all we would hear would be from the activists groups.” “This is dairy producers getting the word out about the safety of veal.”

He adds that, pooling money together gives us the chance to partner with other organizations such as with packers to promote veal in retail stores, which is done primarily in the East Coast where veal is commonly served. The check off also partners with restaurants and individual products like olive oil or wine to “get veal served with them” and “stretch our dollars out.”

Lawmakers have resurrected the Congressional Dairy Caucus initially started in 2006 to address the current dairy crisis. A press conference will be conducted Wednesday morning. National Milk supports the farmer caucus and Chris Galen will report details on tomorrow's DairyLine broadcast and Select Sires has its weekly "Reproductive Moment" in our second half.

Market Analysis with Robert Cropp
(July 28, 2009) The final week of July started as a sleeper in the cash cheese market. Prices held at Friday’s levels and only one carload of barrel was sold. Butter was also unchanged, holding at $1.26, but 11 cars traded hands and three bids went unfilled.  

Dr. Robert Cropp, Emeritus Professor at the University of Wisconsin at Madison, said in Tuesday’s DairyLine that prices are not great but are improved and above support. Cow numbers are going down, he said, and milk production is inching lower so things may be a little tighter but there’s a lot of cheese in storage, according to the last week’s Cold Storage report.

Cheese stocks are up 7 percent from a year ago, he said, and there’s a lot to move yet. Buyers are looking at these prices and may be buying ahead a little, according to Cropp, particularly on butter which can be stored a little longer.

Cream supplies are slipping as more goes into the cone instead of the churn. You need to have butter for fall sales, he said, so some advance purchases are likely being made as “It’s a safe bet that butter will be higher than $1.26 by fall.”

July Federal order milk prices are announced Friday morning by USDA and Cropp looks for a Class III price of $9.95-$9.96 per hundredweight, considering that cheese prices were at or below support. That would be a 1 to 2 cent drop from June but would be $8.29 below a year ago.

He expects the Class IV price to come in around $10.15, as nonfat dry milk prices had strengthened some but that’s 7 cents below the June price and $6.45 below a year ago.

When asked what he would advise Agriculture Secretary Tom Vilsack to do to turn things around for dairy farmers, Cropp said, we have to get milk production down below year ago levels by 2 or 3 percent from a year ago “But, what the Secretary can do, I’m not sure.”

Short term Cropp suggests the government buy more product through the price support program, buying ahead for school lunch and feeding programs and using the Dairy Export Incentive program helps a little, he concluded, “We have to get production down.”  

(July 27, 2009) Got Milk? Restaurants do, according to Dairy Management Incorporated’s, Stan Erwine, in Monday’s “DMI Update” and the number of fast food outlets that offer the single-serve, plastic milk containers now tops 65,000

Pizza Hut is the latest addition, according to Erwine, and is rolling out Nestle’s Chocolate Milk in its 4,000 outlets nationwide. Add that to the 11,000 schools that offer this improved package and collectively it means kids get the milk they want in the way they want it 1.2 billion times per year and recaptures milk as the beverage of choice for kids which mean incremental sales this year and every year for dairy producers.

Dairy producers have invested some $6 million with foodservice partners on the single-serve container and they have invested over $135 million each to promote and advertise and sustain this kid’s milk franchise. That, he said, has resulted in over 250 million incremental pounds of milk sold annually.

Barrel closed Friday at $1.17, up three cents on the week, but 80 cents below a year ago. Fifteen cars of block traded hands on the week and eight of barrel. The NASS-surveyed U.S. average block price lost 1.3 cents, slipping to $1.1172. Barrel averaged $1.1101, up 0.1 cent.

Butter closed at $1.26, up a penny on the week, but 28 cents below a year ago. Forty three cars were sold on the week. NASS butter averaged $1.1879, up 1.4 cents. NASS nonfat dry milk averaged 83.69 cents, down 0.8 cent, and dry whey averaged 29.41 cents, up 0.2 cent.

Price support purchases for the week totaled 742,958 pounds of nonfat dry milk, putting the cumulative total at 276 million pounds. Dairy Export Incentive Program bid acceptances amounted to 1.6 million pounds of nonfat dry milk to Africa and the Middle East.

AFACT Summit: Working Together To Create Solutions
(July 24, 2009) Dairy Profit Weekly editor, Dave Natzke, reported Friday on this week’s second annual summit of the American Farmers for the Advancement and Conservation of Technology (AFACT) in Minneapolis. AFACT was born two years ago by dairy farmers concerned over the potential loss of rbST as a tool for improved milk production efficiency, Natzke reported, but since then, other related issues have surfaced such as California’s Proposition 2 and similar initiatives in other states that restrict farm animal management practices, as well as a general media and marketing blitz surrounding such things as "green," "sustainable" and "local," that generally portray modern agriculture in a negative light and frequently confuse consumers.  

The theme for this year's Summit was Working Together to Create Solutions, Natzke said, as AFACT seeks to reach beyond dairy into other aspects of agriculture. For example, California egg producer Ryan Armstrong and dairy farmer Ray Prock Jr.  shared their experiences with California’s Proposition 2;  Gary Thome, a Minnesota swine farmer, shared his farm's experience with PETA; and Len Corzine, Illinois crop farmer, discussed restrictions on technologies used in crop production.

Alex Avery, Director of Research and Education at the Hudson Institute, discussed movements that restrict new technologies in food production, and the implications for future global population growth and food needs; and Washington State University scientist Jude Capper shared her research showing that U.S. dairy cow numbers have dropped from 25 million in 1944 to about 9 million today, indicating dairy's "carbon footprint" has declined sharply in the past six decades.

The main action items coming out of the conference, according to Natzke, were that farmers must address the emotion of food-buying purchases by directly reaching out to consumers; that farmers must put a "face" back on their product, reminding consumers where food comes from; and farmers must become more active using social networks, such as Facebook and Twitter, to reach consumers.

What To Do To Relieve Financially Struggling Dairy Producers
(July 23, 2009) Discussions continue on what to do to relieve financially struggling dairy farmers. National Milk met with several dairy groups this week, according to Chris Galen in Thursday’s broadcast. Galen said the immediate focus was to review a supply management plan endorsed by the Holstein Association and California’s Milk Producer’s Council and Dairy Farmers Working Together.  

The discussion centered on how the plan would work, how it would be implemented legislatively, and how it would help reduce volatility and improve milk prices, according to Galen.

National Milk’s Task Force will conduct a more detail examination of the plan, he said, and meet again in August to review it and other ideas to reform the U.S. milk pricing system.

The meet this week also heard from the National Farmers Union, the American Farm Bureau, the National Farmers Organization, and Western United Dairymen.

Information is being gathered, Galen said, to deal with the longer term structural challenges facing dairy farmers.

Friday is the deadline for CWT members to submit bids on the current herd removal program. This is a short term immediate focus, Galen said, and National Milk continues to call on USDA to improve the dairy price support program by raising some of its purchase prices and maximize usage of the Dairy Export Incentive Program. “These things can and should be done immediately, in tandem with our long term efforts,” Galen concluded. “That’s the best one, two punch for dealing with the dairy economic crisis.”

The American cheese inventory, at 623.1 million pounds, was up 13.2 million or 2 percent from May and 41.3 million pounds or 7 percent above a year ago. May American Cheese inventory was revised up 1.6 million pounds. 

Total cheese stocks amounted to 971.4 million pounds, up 13.2 million or 1 percent from May, and 68.9 million or 8 percent above those a year ago. May stocks were revised up 1.2 million pounds. 

Campaign Responds To Beef Safety Issues in the Media
(July 23, 2009) Colorado dairy producer and Beef Board member, Andy Wick, discussed public relations in Wednesday’s DairyLine broadcast. Wick serves on the board’s public relations Committee which, he said, “works behind the scenes doing very important and necessary PR for our industry.”  

One example is the “Safety Reputation Management” team which Wick said, reaches out to consumers about the “Safe and Savory at 160” campaign and responds to beef safety issues in the media.

Another example of PR is in the Nutrition Public Relations area. “They tell our story of beef protein’s benefits,” Wick said. “They have nutrition spokespeople who work with the Nutrient Rich Foods Coalition.”

One more example would be with the Media Relations team which faces challenges with consumer media outlets trying to dispel some of the myths about modern beef production.

Wick;s final example was the “Food Communication” team which re-launched the “Beef, It’s What’s for Dinner” website, THE place for consumers to go for beef and recipe information, according to Wick.

The PR teams also use social media outlets like Twitter and Facebook to reach consumers, Wick said, “The ones buying our product and telling their friends to buy our product.” “Public Relations is a hard program to explain,” Wick concluded, “But beef producers, take my word on it, our check-off investment is helping us to get our message out in places where it needs to be heard, but where WE can’t always be.”

National Milk met yesterday with several other dairy groups to discuss what other action can be taken to reverse the dairy depression farmers are enduring right now. Chris Galen reports details on tomorrow's DairyLine broadcast and Select Sires' Ray Nebel tells us about his trip to Argentina in this week's Reproductive Moment segment. 

Georgia Milk Producers Testifies To Congressional Panel
GMP Testifies To Congressional Panel, Calls For Immediate Changes To Current Milk Price System  

A representative for Georgia Milk Producers testified today at a hearing in the House of Representatives asking for possible solutions to the current economic crisis for dairy.  

Everett Williams, a dairy farmer from Madison, Georgia, and President of Georgia Milk Producers Inc., requested that the House Subcommittee on Livestock and Dairy improve the current dairy price system. Click Here

He credits the time of the year for the gains, even though it hasn’t been overly hot in much of the country. Production is slacking off, he said, producers are sending large numbers of animals to slaughter, and demand is up. Prices haven’t moved as high as Brooks thought they would, but they are starting to climb.

He looks for cheese to hit the $1.40s. That’s better than where it is now, he said, but “It’s not go to make producers jump up and down with joy because profitability levels will still very tight.

As we work our way toward the end of the year things are looking better, according to Brooks, based on last week’s ending futures markets, with grains and oilseeds down a little bit and milk prices on the CME futures up a little bit. “We’re working our way back to profitability but we still have a few months to go.”

Brooks expects Wednesday’s June Cold Storage report to show seasonal increases in supplies and ending stocks, likely stronger on cheese than butter, but “We’re still going to have plenty of supply to meet market demands.”

Projected MILC Payments

McCafe Contains Up To 80 Percent Milk

(July 20, 2009) There’s nothing to equal that “starter fluid of the morning,” coffee, and the dairy check off has aggressively worked itself into the cup, literally. We learned an example of that in Monday’s “DMI Update,” where Stan Erwine outlined the most recent check off partnership with McDonalds.

“McCafe” is a line of specialty coffees that was launched last year, Erwine reported, and this year will be available in all 14,000 McDonald’s franchises. The important fact for dairy producers, according to Erwine, is that those drinks contain up to 80 percent milk.

The check off has entered a new agreement with McDonalds, Erwine said, and has invested $5 million in the project while McDonalds has budgeted $1.5 billion for baristas, the machines that make those coffee drinks, and training their employees. Another $100 million will go to advertising and promotion.

Erwine estimates that about 320 million pounds of milk were used in these specialty coffees this past year and he expects that to continue to grow as the roll out grows and down the road, a new agreement extends items at McDonalds to include a third of a pound angus cheeseburger which combines beef and dairy. This is already available in many markets, he concluded, and McDonald’s menus over time will be expanded even more with additional “dairy friendly” items.

Production per cow in the 23 major States averaged 1,746 pounds for June, 10 pounds above June 2008. The number of milk cows on farms in the 23 major States was 8.44 million head, 56,000 head less than June 2008, and 29,000 head less than May 2009. 

Milk production in the U.S. during the April - June quarter totaled 48.8 billion pounds, up 0.1 percent from the April - June quarter last year. The average number of milk cows in the U.S. during the quarter was 9.26 million head, 53,000 head less than the same period last year.

August Federal Order Class I Base Price Slips

(July 17, 2009) The August Federal order Class I base milk price gave back all of last month’s gain and then some and slipped to $10.04 per hundredweight, down 22 cents from July, and $8.43 below August 2008, according to the Agriculture Department's price announcement this morning.

The 2009 Class I average now stands at $10.95, down from $18.75 at this time a year ago, and compares to $14.88 in 2007. The Class IV advanced pricing factor remained the “higher of” in driving the Class I value.

The NASS-surveyed butter price averaged $1.1747 per pound, down 4.4 cents from July. Nonfat dry milk averaged 84.16 cents, down fractionally, cheese averaged $1.1339, down 1.2 cents, and dry whey averaged 28.73 cents, up 2.2 cents.

Look for an August MILC payment of about $1.64 per hundredweight, plus a feed cost adjustor of about 15 cents, according to market analyst Alan Levitt.

2-week Product Price Averages:

Feed Prices To Moderate But Not Enough to return Profitability
(July 17, 2009) The USDA’s latest Livestock Dairy and Poultry Outlook issued this morning says feed prices are expected to moderate slightly both this year and next. But milk supplies still lead demand, and exports are expected to be well behind the last two years consequently, prices will remain weak this year. A modest improvement in prices is expected in 2010 as the dairy herd decline helps to move supplies into line with demand.

Corn is forecast to average $3.95 - $4.15 per bushel in the 2008/09 crop year and $3.35 -$4.15 for the next crop year. Soybean meal prices will average slightly below the previous year in 2008/09 and are forecast lower in 2009/10.

Feed prices, however, will remain above the 5-year average for both corn and soybeans. Forage prices will likely follow grain prices moderating into 2010.

While welcome, lower feed prices alone will not restore producer profitability. Recession-reduced demand weakness will keep dairy product prices below year-earlier levels for the balance of 2009.

The result is continued pressure to remove cows from production. The Cooperatives Working Together (CWT) program is expected to remove about 101,000 cows from the herd by the end of July.1

The U.S dairy herd is expected to contract 1.5 percent in 2009 from 2008 and another 2.6 percent contraction is expected in 2010. Yet some of the decline in cow numbers is offset by continued gains in milk per cow. In 2009, milk per cow per day increased 1 percent and is forecast to climb nearly 2 percent in 2010.

Milk production this year is projected at 187.6 billion pounds, unchanged from last month’s forecast and next year’s production is forecast at 186.4 billion pounds. This leisurely decline is encountering a recession-weakened domestic market.

Exports both this year and next, with the exception of whey, are likely to be well below the totals for the last two years, and are forecast at 3.8 billion pounds of milk equivalent, fat basis, in 2009 and 3.9 billion pounds in 2010. Whey exports, mostly to Mexico and China, have made the skims/solids exports numbers appear stronger. Those exports are forecast to total 19.9 billion pounds this year and 23.1 billion pounds next year.  

Exports Lagging, More Time Needed For Global Markets to Recover

(July 17, 2009) Dairy Profit Weekly editor, Dave Natzke, reported the latest monthly U.S. dairy trade data in Friday’s broadcast and said that it reflects what others have been reporting on DairyLine. Exports are lagging and it will take more time for global markets to recover.

The values of U.S. dairy exports and imports were both up slightly in May, according to Natzke, but the U.S. still turned in a small monthly dairy trade deficit. May 2009 exports were valued at $182 million, up 4 percent from April, but less than half the May 2008 total of $380 million. 

May imports were valued at $190 million, up 14 percent from April, but down about 23 percent from May a year ago.

The first eight months of fiscal year (FY) 2009 saw exports valued at about $1.6 billion, down 43 percent from the same period in FY 2008; imports were valued at about $2 billion, down 7 percent from a year earlier. The trade deficit for FY ’09 is estimated at $408 million, Natzke reported.

May 2009 cheese imports were valued at $78 million, up 22 percent from May 2009. FY ’09 year-to-date cheese imports stand at $708 million, down 11 percent from the same period a year ago.  

The U.S. Dairy Export Council concludes that a slow recovery in the global economy could keep a lid on U.S. dairy export demand into 2010. And, with milk and dairy product production increasing not only in the U.S. but also worldwide, the growing inventory of dairy products will keep a lid on global dairy prices.

USDA also issued its "Top 10" list of leading dairy exporting states last year. Wisconsin and California again top the list, accounting for about 44 percent of the U.S. total. Rounding out the top 10 were New York, Idaho, Minnesota, New Mexico, Pennsylvania, South Dakota, Ohio and Iowa, Natzke reported.

“I appreciate the Secretaries’ visit to Wisconsin and their effort to engage with rural Americans to better understand their everyday challenges.  The economic downturn has weighed heavily on all rural Americans, particularly dairy farmers, who face low milk prices, high production costs and even the threat of foreclosure.  When it comes to understanding these challenges, there is no substitute for actually visiting rural communities and the men and women who call them home.  I hope Secretary Vilsack and Secretary LaHood listen closely to the people of Wisconsin and use their words and experiences to help shape our government’s effort to improve the lives of rural Americans.”  

In a letter today, Feingold joined with Senator Kohl and other senators in asking Secretary Vilsack to take emergency actions to provide a meaningful floor for milk prices and address the growing crisis facing Wisconsin dairy farmers.  The letter is available here.   

NMPF Asks USDA To Temporarily Raise Price Support Program Purchase Prices
(July 16, 2009) The National Milk Producers Federation again asked that USDA temporarily raise Price Support program purchase prices on cheese and nonfat dry milk in an effort to yield higher milk prices to dairy farmers. NMPF called on Agriculture Secretary Tom Vilsack two weeks ago to do this, Galen said, by raising the cheese price by about 6 cents per pound and powder by 4 cents. This would provide short term relief, he said, and NMPF has called for maximum use of the DEIP program.  

The dairy industry itself is taking steps, Galen said, pointing to the CWT’s herd retirement programs and NMPF’s Strategic Planning Task Force will meet later this month to consider long term ideas to impact producer profitability.

Link: NMPF Tells Congressional Panel That Dairy Farmers Are Facing Economic Crisis, Urges Improvement in USDA Safety Net Program

Reducing Milk Supply Raises Concerns
(July 15, 2009) Too much emphasis may be focused on reducing the milk supply and that may lead to milk shortages ahead, according to Jerry Dryer, editor of the Dairy and Food Market Analyst and chief market analyst for Rice Dairy in Chicago.  

Speaking in Wednesday’s DairyLine broadcast, Dryer said a drop in demand is “what got us into this pickle, in terms of the economic crisis that consumed markets around the world and put a dinger in demand.”

But, domestic demand is very good, according to Dryer, based on the latest retail sales data covering March, April, and May. 

Natural cheese sales were up 7-8 percent from a year ago, he said, there’s been a lot of promotion at retail, and people are eating at home more so that’s helped retail cheese sales. And, sales over the past year were up 3 percent, according

to Dryer, “so sales have been strengthening the last few months.”

Food service cheese sales are also good, according to Dryer, as “the value menu is still important and it’s very cheese friendly at the McDonalds and Burger Kings of the world,” although high end restaurant sales may not be as good.

Dryer also says the dairy export side of the business is stronger than many expected, though it’s running about two thirds below a year ago but it didn’t absolutely fall apart and he’s optimistic that exports will improve as we progress through the year.

“Then why are dairy prices so low?” I asked. “Because we’re making more than the markets will absorb right now,” answered Dryer. Inventories were built late last year and were added to early this year, he said, “when demand wasn’t as robust as the numbers I’m showing you right now and it’s going to take us a while to chew through those inventories and it’s going to take a while to get demand back internationally at the level it was a year and even two years ago.”

So, yes it does come back to supply and Dryer said some production capacity needs to be “wrung out” but he’s concerned that too much will be lost because “We’ve been in this situation for so long that we may lose a big chunk of productive capacity and that would be tragic because, just about the time we lose a large chunk of it, we’re going to need it because demand will have recovered.”  

Market Talk with Al Levitt
(July 14, 2009) There’s still no spark in the cash dairy markets from Friday’s announcement of another CWT herd removal, though cheese prices were unchanged in Monday’s trading and butter inched a quarter-cent higher.  

“People just need to see the milk supply contract,” said Alan Levitt, editor of the CME’s Daily Dairy Report in Tuesday’s DairyLine broadcast. “We’re not there yet,” he said, “We’re a few months away.” The last CWT removal took out a little over 100,000 cows or about 1.1 percent of the milk supply but we still need to take out more, according to Levitt.

Considering the below support cheese prices, whey has become an increasingly important factor in the Class III milk price and Levitt pointed out that whey always has been an important factor.

He reflected on the big run up a couple years ago when whey doubled and tripled in price and tacked a few dollars onto the Class III price but he warned that we won’t be doing that this time.

Whey has gained about 13 cents since early February, according to Levitt, and every penny on whey equates to about 6 cents on the Federal order Class III price. That’s not the case in California any more but whey has added close to 80 cents to the Class III price, he said, and “hopefully it will hold up here,” but he cautioned that whey has leveled off as it approaches 30 cents per pound.

Levitt predicts the Federal order Class I base milk price, which is announced Friday morning by USDA, will drop to $10.03 per hundredweight. That would be a loss of 23 cents from July and would be $8.44 below August 2008. It would also generate an MILC payment to producers of $1.65 plus a feed adjustor of about  10-15 cents, though feed prices have come down. 

Promoting Pizza's Place in School Lunch Programs
(July 13, 2009) Dairy Management Incorporated’s Stan Erwine discussed the pizza cheese in schools campaign in Monday’s “DMI Update,” and stated that DMI’s strategy is to protect and promote pizza’s place in school lunch programs as a “healthy satisfying item.”  

He pointed out that pizza is the number one entrée in schools and 25 percent of all school meals include pizza so DMI and state and regional check off organizations are working on a “comprehensive program to build the perfect pizza cheese” and are working with the same sense of urgency as they did with the school milk program.

“Kids represent a significant share of current dairy consumption,” Erwine said, “And they’re 100 percent of our future customers so keeping pizza in schools and keeping kids interested in real cheese are paramount to sustaining long term sales.”

When asked if that meant low-fat cheese, Erwine replied, “Yes, a lower-fat perfect ingredient cheese that will again satisfy those changing nutritional requirements.” And, when asked if we have developed a good-tasting, low-fat cheese, Erwine answered, “We’re working on that and yes would be the answer to that but that’s in the process.”  

MILC Payments Projected Through Next June
Continued low milk prices and high feed prices project MILC payments through next June:
 

Dairy Market Weekly Recap
(July 10, 2009) Cheese prices remain below the government support level. The block price dropped 2 cents Friday despite the CWT announcement of a second herd removal, and closed at $1.09 per pound, down 2 1/2-cents on the week, 84 1/4-cents below a year ago, and 4 cents below support. Barrel also closed at $1.09, down a penny on the week, 83 cents below a year ago, and a penny below support. Thirty four cars of block traded hands on the week and 14 of barrel. The NASS-surveyed U.S. average block price slipped to $1.1373, down 1.2 cents. Barrel averaged $1.0986, down 1.4 cents.  

Cash butter closed Friday at $1.2225, up 3 cents on the week, but 32 3/4-cents below a year ago. Eighteen cars were sold. NASS butter averaged $1.1770, up 0.2 cent. NASS nonfat dry milk averaged 83.91 cents, down a penny, and dry whey averaged 28.11 cents, up 0.9 cent.

World Ag Supply and Demand Estimates
(July 10, 2009) The Agriculture Department has raised its 2009 milk production forecast, to 187.6 billion pounds in this month’s World Agricultural Supply & Demand Estimates report issued this morning, up 100 million pounds from last month’s estimate. The report states that the reduction in cow numbers is slightly slower than expected. Milk production for 2010, at 186.4 billion pounds, was unchanged.  

Imports for 2009 on a skim-solids basis are forecast lower; the commercial export forecast is unchanged from last month. Net removals are adjusted for both higher nonfat dry milk (NDM) sales to the CCC and product exports under the Dairy Export Incentive Program (DEIP). Cheese, butter, and NDM price forecasts are lowered as supplies are large but whey prices are forecast higher.

For 2009 and 2010, Class III milk prices were reduced as lower cheese price forecasts more than offset higher whey prices. The 2009 average is now expected to range $10.45-$10.75 per hundredweight, down from the $10.60-$11.00 predicted a month ago. Look for the 2010 average to range $13.90-$14.90, down from $14.30-$15.30 predicted last month.

The Class IV price forecast is reduced in line with lower butter and NDM prices in both 2009 and 2010. The 2009 average is now projected at $9.95-$10.35, down from the $10.10-10.60 predicted last month. The 2010 average is now projected at $12.45-$13.55, down from 12.55-$13.65 a month ago. The all milk price is forecast at $11.85 to $12.15 for 2009 and $14.85 to $15.85 for 2010.

Consumers are benefiting at the checkout stand
(July 10, 2009) Dairy farmers are suffering from low milk prices and are losing their farms and livelihoods. A vivid example is wholesale cheese prices which have been hovering at $1.10 to $1.15 per pound. Compare that to retail prices which range anywhere from $2.75 to $5.00 per pound. Someone is making money.  

Consumers are benefiting at the checkout stand, admits Dairy Profit Weekly editor, Dave Natzke, but he looked specifically at milk prices in his Friday broadcast and reported that not all retail prices are coming down equally.

Farm milk prices are at a six-year low, Natzke reported, and the Bureau of Labor Statistics’ monthly Consumer Price Index says consumers are seeing some of the price decline at the grocery store.

May 2009 retail dairy prices were down one-half of one percent compared to April 2009, and down 5.6 percent compared to a year earlier. Dairy prices have fallen more than the overall bill for food eaten at home, which was down three-tenths of one percent in May, but up 1.5 percent compared to May 2008. May prices for milk and cheese were lower than the previous month and year, with butter and ice cream up slightly, according to Natzke.

A second dairy aisle survey, however, shows that while retail milk prices have been coming down, there's a big disparity between prices for regular, "rbST-free" and organic milk, Natzke said.

The American Farm Bureau Federation, which conducts quarterly surveys of retail food prices in 33 states, noted the average price for a half-gallon of regular whole milk was $1.92 in the second quarter of 2009, down 24cents from the first quarter, and down about 20 percent from a year earlier.

The average price for one gallon of regular whole milk was $3.01, down 14 cents from the previous quarter and 22 percent less than the previous year.

Meanwhile, the average price for a half-gallon of “rBST-free” milk was $3.18, down a penny from the last quarter and about 5 percent less than a year earlier. A price of a half-gallon of "rbST-free" milk is about 65 percent higher than the half-gallon of regular milk, Natzke reported.

And, the average price for a half-gallon of organic milk was $3.63, down 8 cents compared to the first quarter, but up 1 percent from a year earlier. The retail price of a half-gallon of organic milk is approximately 90 percent higher than the regular milk.

Serious Concerns Over Climate Change Legislation
(July 9, 2009) National Milk has “serious concerns” over the potential impact on dairy farmers of the proposed climate change legislation to reduce greenhouse gas emissions. Speaking in his weekly Thursday report, National Milk’s Chris Galen called it “the most sweeping environmental law that’s ever passed the House of Representatives.”  

He admitted that it’s “very early in the ballgame,” and that it’s not known what will happen to “the cap and trade approach to regulating greenhouse gases” but “We do know that Congress and the Obama administration are very interested in limiting greenhouse gases coming from the U.S and they have developed this cap and trade system to do so.”

The bill barely passed the House, Galen reported, and now the focus shifts to the Senate where its prospects are “very uncertain.” National Milk has not taken a position yet in favor of or in opposition to it, according to Galen, though it has concerns.

“The good news,” Galen said, “Is that agriculture is very well positioned in this whole debate, at least it was as the House was considering this.” National Milk worked very closely with the Chairmen of the House Agriculture Committee, Rep. Collin Peterson (D-MN), to make certain that dairies and other sectors of livestock in agriculture are well positioned so that they can take advantage of opportunities under a cap and trade system and hopefully see minimized costs that may be the result of it (the legislation).

One of the positive elements involves manure digesters, not just for new installations, according to Galen, but allowing existing digesters to qualify for the offset market. There are other practices that farmers can also engage in, he said, including low or no till planting, as well as things to reduce enteric fermentation or “reducing methane from ruminate digestive systems on the front end of the cow and not just the back end.”

He anticipates that the Senate will take a slower approach to this legislation but the important thing right now, according to Galen, is that dairy and agriculture in general are “very well positioned, based on where we are and where we think we need to go and we’re going to try to maximize the opportunities for dairy farmers at this moves forward.”

Beef is the end product of all dairy animals, Flora said, and dairy producers need to understand how their check off helps drive consumer demand. The beef check off’s message addresses the power of protein and its great taste, she said, but she admits that most producers will not likely even see the advertising that their check off dollars are paying for.

The ads appear in publications such as Men’s Health, Fitness, Better Homes and Garden, and People magazine for example, and “Most of us have ag trade magazines on our coffee tables,” Flora said, “But by tapping in to that passion for beef, the message about beef’s protein value and how that equates to strong bodies, we’re helping drive demand for our product on the shelves of grocery stores and in restaurants.”

Dairy producers play an important role in the beef check off, she said, with more than 20 percent of the entire beef supply coming from dairy breed animals. Flora said she’s happy to know that her beef check off can “reach moms, teens, and all other ages through programs like consumer advertising.” “If we can keep beef, center of the plate, it only means more green back in our pocket.”

California Class 1 Prices Delayed
(July 7, 2009) The California Department of Food and Agriculture was scheduled to announce the state’s August Class 1 milk prices Friday but the governor has announced that all state offices will be closed Friday so those prices will not be announced until Monday. We will post complete details here on Monday as soon as possible.

(July 7, 2009) Cheese prices remain at or below support and the University of Wisconsin’s, Dr. Brian Gould, said in Tuesday’s DairyLine that it’s a continuation of a trend and he said the market had already taken into account the final numbers of the latest CWT herd removal.

Gould reported that 101,000 cows representing almost 2 billion pounds of milk were removed. About 40 percent of that milk is from the West and about 7 1/2 percent from the Midwest, though 34 percent of the farms are from the Midwest.

Looking at the size distribution, Gould said the average farm size whose bid was accepted this time was 65 cows in the Midwest, compared to the Southwest average of 684 cows. That, he said, may reflect some of the objectives of the CWT program to assist those who want to get out of the dairy business.

Reacting to National Milk saying that additional removals will be conducted, Gould said the thinking is that another 100,000 cows needs to be culled in order to make any dent in milk output but the 200,000 cow estimates were made months ago and things have since worsened.

The futures markets for the rest of 2009 and 2010 have lost more ground, according to Gould, and he’s not sure that even 200,000 less cows will be enough turn things around.

(July 6, 2009) Dairy Management Incorporated’s, Stan Erwine, discussed dairy ingredient marketing in Monday’s “DMI Update.” He pointed out that, as consumers change so do their tastes and desire for nutrition and dairy products. As a result food and beverage manufacturers are looking for new and innovative ways to deliver improved nutrition in products that respond to healthier lifestyles and increased convenience. 

Over 1 billion pounds of milk is being used as ingredients, according to Erwine, and the check off is working with food and beverage manufacturers like Starbucks Coffee to introduce new products like Vivanno Smoothies which contain whey protein, fiber, and at least one serving of fruit. Starbucks came to the check off for its assistance in expanding their menu offerings, he said.

Another example is new Yoplait Smoothies which use frozen yogurt chip technology which goes into a package and is then combined with eight ounces of fluid milk to create “a great tasting smoothie.”

Erwine said DMI’s role in these efforts is focused on product development and research, concept and positioning, and sampling assistance. He said that producer funded research helped develop these new products and uses of ingredients.

(July 3, 2009) The first half of 2009 is behind us and it's been a difficult six months for farmers. Dairy Profit Weekly editor, Dave Natzke, said in Friday’s DairyLine that things have to get better in the second half, and one area could be dairy feed prices.

USDA’s latest “Crop Acreage and Grain Stocks” reports released early this week, indicate there’s more corn acreage for this year’s crop and more corn in storage from last year’s crop than previously anticipated and Natzke reported that corn futures prices declined sharply a day after the reports, an indication dairy feed prices could also come down.

USDA also estimated acreage for dry alfalfa hay is virtually unchanged from a year ago. U.S. average alfalfa hay prices have been running about $45 per ton less than last year, and in California, June 2009 alfalfa prices were about $100 per ton less than a year earlier.

The other factors affecting milk prices are that production is starting to flatten out and cow numbers are shrinking. Cooperatives Working Together announced the final tally for the recent herd retirement program, completed at the end of June.

CWT reported a total of 101,000 cows producing an estimated 1.96 billion pounds of milk, were removed. CWT’s Jim Tillison said additional herd reduction activities are likely in 2009, given the depressed state of milk prices.

A national dairy conference call was conducted Tuesday by the advocacy group, Dairy Farmers Working Together (DFWT). DFWT’s Amanda St Pierre told DairyLine that the call went very well and such calls would play a role in communicating with dairy farmers in the future.

She said the number of participants was uncertain but was in the hundreds although she admitted there were a few challenges that need to be worked out before any future calls and more publicity would be needed to attract more participation. When asked when another such program would be conducted, St Pierre said it depended on the finances of the organization. For more information, log on to www.dfwt.org.

(July 3, 2009) Cash cheese prices were mixed in the shortened 4^th of July week. The blocks closed Thursday at $1.1150 per pound, down a half-cent on the week, 80 3/4-cents below a year ago, and 1 1/2-cents below support. Barrel closed at $1.10, up a penny on the week, 77 1/2-cents below a year ago, and right at support. Twenty nine cars of block traded hands on the week and 11 of barrel. The NASS-surveyed U.S. average block price hit $1.1490, down slightly. Barrel averaged $1.1123, down a half-cent.

Cash butter slipped this week, closing at $1.1925, down 1 1/4-cents on the week, and 36 cents below a year ago. Ten cars were sold on the week. NASS butter averaged $1.1703, down 3.9 cents. NASS nonfat dry milk averaged 84.93 cents, up 0.3 cent, and dry whey averaged 27.2 cents, down 0.3 cent on the week.

Regular, rbST Free and Organic Milk Prices Compared
(July 3, 2009) The American Farm Bureau Federation’s Marketbasket Survey took a quarterly look at retail prices for regular, “rbST-free” and organic milk. The survey involves consumers in 33 states. 

For the second quarter of 2009, U.S. shoppers reported the average price for a half-gallon of regular whole milk was $1.92, down 24¢ from the prior quarter. The average price for one gallon of regular whole milk was $3.01, down 14¢. Comparing per-quart prices, the retail price for whole milk sold in gallon containers was about 25% lower compared to half-gallon containers, a typical volume discount long employed by retailers.

The average price for a half-gallon of rBST-free milk was $3.18, down 1¢ from the last quarter and about 65% higher than the reported retail price for a half-gallon of regular milk ($1.92).

The average price for a half-gallon of organic milk was $3.63, down 8¢ compared to the first quarter andapproximately 90% higher than the reported retail price for a half-gallon of regular milk ($1.92).

Compared to a year ago (second quarter of 2008), the retail price for regular milk in gallon containers decreased by 22%, while regular milk in half-gallon containers decreased 20%. The average retail price forrBST-free milk dropped about 5% in a year’s time. The average retail price for organic milk in half-gallon containers went up and down slightly throughout the year, rising 1% in the second quarter of 2009 compared to a year ago.

—

• one half-gallon of milk = approximately 4.3 lbs. = 23.25 half-gallons per hundredweight (cwt.) of milk.

• “rbst-free” premium markup: $1.26/half-gallon X 23.25 = $29.30/cwt.

• $3.18/half-gallon (price per half-gallon “rbST-free” milk = $73.94/cwt. gross income from sale of “rbST-free” milk

• May U.S. average fluid milk price paid to farmers: $11.60/cwt.* (Source: USDA)

* Some dairy farmers received a small premium for producing “rbST-free” milk.

CWT to blame for lower cull cow prices?
(July 3, 2009) Are all those Cooperatives Working Together (CWT) cows headed to slaughter to blame for a decline in the cull cow price in June?

To see the latest analysis and comment from Feuz, visit http://cattlemarketanalysis.org.

May Dairy Products Report
(July 2, 2009) The Agriculture Department’s May Dairy Products report puts butter production at 139.4 million pounds, down 3.1 million pounds or 2.2 percent from April and 0.4 million pounds or 0.3 percent below May 2008.

Nonfat dry milk output amounted to 149.1 million pounds, up 10.6 million or 7.7 percent from April, and 17.6 million or 13.3 percent above a year ago.

Mozzarella cheese output totaled 273.5 million pounds, up 1.1 million pounds or 0.4 percent from April, and 0.4 million or 0.1 percent above a year ago.

Total Italian type cheese, at 350 million pounds, was down 0.1 million pounds or 0.1 percent from April, but up 1 million or 0.3 percent above a year ago.

Cheddar production totaled 284.9 million pounds, up 16 million pounds or 6 percent from April, and 10.1 million pounds or 3.7 percent above a year ago.

American type cheese amounted to 366.3 million pounds, up 15.1 million pounds or 4.3 percent from April, and up 13.7 or 3.9 percent from a year ago.

Total cheese output came to 860.7 million pounds, up 15.4 million pounds or 1.8 percent from April, and up 22.1 million or 2.6 percent from a year ago. 

June Federal Order Class III Price Up 13 Cents
(July 2, 2009) Dairy farm profitability remains elusive. The Agriculture Department announced the June Federal order Class III milk price today at $9.97 per hundredweight (cwt.), up 13 cents from May but a whopping $10.28 below June 2008. That puts the 2009 average at $10.19, down from $18.26 a year ago, and compares to $16.11 in 2007.  

Class III futures point to further increases ahead but still well below year ago levels and below the cost of production for most farms. The July contract was trading late morning Thursday at $10.06, August at $10.55, September at $11.25, October at $12.17, November at $13.15, and December at $13.57.

The June Class IV price is $10.22, up 8 cents from May, but $5.70 below a year ago.

The four week NASS-surveyed cheese price average was $1.1466 per pound, down almost a penny from May. Butter averaged $1.2073, also down almost a penny. Dry whey averaged 26.93 cents, up 3.76 cents, and nonfat dry milk averaged 84.61 cents, up 1.43 cents from May.

One More Thing USDA Can Do To Help Cash Strapped Dairy Producers
(July 2, 2009) National Milk Producers Federation has called on the USDA to raise the purchase prices for cheese and nonfat dry milk under the Dairy Price Support program for about 90 days. Chris Galen said in Thursday’s broadcast that doing so would enhance the safety net program in last year’s farm bill by boosting the purchase price of cheese by 6 cents and nonfat dry milk by 4 cents per pound and would allow more product to clear to the government, thereby boosting producer milk prices by about $235 million, according to Federation calculations.  

USDA has not yet responded, Galen reported, but there are a lot of ideas being considered to help dairy farmers and some have already been taken, including the use of the Dairy Export Incentive program (DEIP) and efforts to clear the 200 million pounds of powder USDA currently has in storage.

The good thing about National Milk’s proposal, he said, is that it does not involve passing legislation through Congress but simply relies on a USDA decision, a decision that NMPF believes USDA has the authority to make.

The Farm Bill specifies minimum support prices, according to Galen, but there’s nothing in the bill that prohibits USDA from temporarily raising those prices and “that would provide a short term boost for farm level milk prices, which is what’s desperately needed right now.”

The Federation has no cost estimate to the government of doing this. Galen admitted there would be some extra cost but, “We don’t think this would result in any huge flood of cheese going to the government.” Nonfat dry milk already is moving weekly to government storage but it would be paying 84 cents per pound, instead of the current 80 cents, he said.

National Milk also called on USDA to reauthorize the DEIP. The DEIP fiscal year ended June 30 and a renewal would allow an additional 1.7 billion pounds (milk equivalent) of product to be exported.  

(July 1, 2009) During periods of low farm milk prices, we often hear complaints that retail milk prices have not fallen at the same rate. The International Dairy Foods Association’s chief economist, Bob Yonkers, said in Wednesday’s broadcast that “There are a number of reasons why retail milk prices may not change in lock step with changes in farm milk prices however available data show that retail milk price changes do follow farm milk price changes over time.”

One reason for confusion about this price relationship, according to Yonkers, is that dairy producers receive a blend price that reflects the value of farm milk sold for all uses. However, the cost of farm milk to processors of fluid milk products regulated by Federal Orders is the Class I minimum price. For any given month, the farm blend price and the Class I price do not change by the same amount, he explained, and in some months actually move in opposite directions.

Another reason for the confusion is that retail prices are in dollars per gallon, while farm milk prices are reported in dollars per hundredweight. Yonkers gave an example that, between May 2008 and 2009 the average Class I price declined from $19.50 to $13.85 per hundredweight, a drop of 29 percent. According to the Bureau of Labor Statistics, the U.S average retail price for a gallon of whole milk fell from $3.760 to $3.068 per gallon for that same period, a drop of only 18 percent.

However, when you convert the farm milk price per hundredweight to a price per gallon, the Class I price per gallon fell between May 2008 and 2009 from $1.677 to $1.191, a decline of 48.6 cents. Compare this to the decline in the retail price per gallon of 69.2 cents during that same period, he said. “The reality is that the retail price of milk fell by over 20 cents per gallon more than the price dairy producers received for the farm milk used to process fluid milk products at the Federal order regulated minimum price.”

“While the relationship between the two prices is not exact,” Yonkers concluded, “They do tend to move together over time despite the many other factors that influence the difference between them.”  View Graph Here