March 2009 Archived Dairy News

Tuesday, March 31, 2009
Dairy Markets Remain Flat
MILC Payment Rates and Projections
U.S. Secretary of Ag missed golden opportunity to help dairy farmers
Livestock Insurance Program Could Aid Struggling Dairy Producers
Dairy Specialist: South Dakota Milk Production Up In 2008
ACI adopts West-end Dairy
Affordably controlling Johne’s disease
Dairy farmer, Sukalsi, maintains busy schedule at home, on the road
USDA: Purchase of nonfat dry milk helps both farmers and low ...
Arkansas finds funding to keep milk prices down
Raw milk debate rekindling in Missouri legislature
Possible tornado causes $3M damage; 3 hurt
Dairy industry crowns local royalty
Monday, March 30, 2009
March Ag Prices Report
Alliance of Western Milk Producers
Dairy farmer: 'I've never seen a worse time'
ME: Priced out of the barn?
Glut in milk supply threatens dairy industry in Maine
Dairymen cut back as dairy prices drop 44 percent
DMI Update
New York cows are happy to be heard
Carroll County Collage: Springtime brings daffodils and dairy cows
Farm column: Milking is not as easy as you might think
Falling milk prices hurt farmers
Dairy farmer optimistic, despite recent barn fire
France-Cattle Herd increases
New Zealand-Cattle trade last week
Saturday, March 28, 2009
Vilsack open to mandatory livestock traceback
Feingold Bill Would Alter Cheese Labeling
Aubertine Applauds Federal Legislation for Dairy Farmers
Fargo Intensifies Flood Preparations
Cross Country: Manure is unavoidable topic for farmers
Western United Dairymen Update
Milk Producers Council Weekly Update
Partnership Donates Nearly $500,000 to Local FFA Chapters  
Dairy Farmers of America swings to profit in 2008
Smaller dairies fight rule change on milk
USDA Announces Milk is on the Way to Help Feed Hungry Americans
CCC Milk To Enter Domestic Feeding Programs
USDA releasing surplus dry milk to aid dairy farms
Cow power coming to former nuclear facility
Indirect Land Use Calculations Critical to Ethanol Industry
Dairy judging workshop at Indianhead Holsteins
Family quits milk delivery
Ill. dairy to offer milk deliveries in Hampton Roads
With milk prices down, for many dairy cattle it's off to the...
Economy puts the squeeze on dairy farms
Dairy Cattle Minerals: Calcium & Phosphorus
Dairy Specialist: South Dakota Milk Production Up In 2008
American Dairy Reports 2007 Financial Results
The Cheese Course: 10 iconic California cheeses
Alice in Dairyland Finalists
Friday, March 27, 2009
Dairy Markets Weekly Recap
Recap of DFA's 11th Annual Meeting   Related
Dairy Farmers Call Vilsack Dairy Measures Inadequate
IDFA Commends USDA on Decision to Donate Dairy Products
Lawmakers ask for delay of new mad cow rule
Dairy profits dry up as milk price plummets
Mondo Dairy Farm chooses to use only local milk
IDFA and NMPF File Joint Petition on Non-Nutritive Sweeteners
Feingold, Kohl Applaud USDA Action To Benefit Dairy Farmers and Nutrition Programs
CU Extends Helping Hand to Farms
Wisconsin Dairy Expert Educates on Distillers Grains in Rations
Agriterrorism takes center stage at Smithfield conference
Southwest Dairy Day scheduled May 8 in Dublin
Dairy farmer, Sukalsi, maintains busy schedule at home, on the road
Half-century of farming leads to award for Sylvan Township man
Crowder Hosts Aggie Day: Record number attend 38th annual event
Thursday, March 26, 2009
NMPF Response to Dairy Announcement
NMPF & IDFA request FDA to update its standards of identity for milk
Study Shows That Controlling Johne's Disease is Cost-Effective
Three area young ladies vying for Allamakee County Dairy Princess...
Local dairy creates new treat
Wednesday, March 25, 2009
Cold Storage data was bearish to the markets
Record Turnout for Sixth Annual Fond du Lac Agriculture Showcase
Jersey Junior Public Presentation Contest Entries Due Friday, June 5  
Are You Listening To Your Cows?
Dairy heifer webinar set
Farmers' incomes dry up as milk prices plunge about 50%
Dairy UK aiming to turn our milk green
Taking steps forward
Tuesday, March 24, 2009
Market Analysis with Bill Brooks
PDPW Annual Business Conference Recap
International Farm Management Congress Comes to Illinois
Broken Trust Shakes Web From Farmer to Cow
Treating cows well makes for happy herd, more milk production
IA: Oelwein woman honored at annual Dairy Banquet
WI: Dunn/St. Croix Spring Dairy Tour April 7
UK: Cluster disinfection saves two Welsh dairy farms
No flatulence tax on UK cows
Monday, March 23, 2009
Latest MILC Projections
Alliance of Western Milk Producer weekly update
Dairy Challenge Draws 124 Students from 31 Universities to Syracuse This Weekend  
Culling milk herds helping keep cash flowing
Dairy farmers brace for recession
Reason for milk price collapse disputed
CT: State's Dairy Problem: Too Many Cows, Farms
Wall Street Journal editorial: everyone hates ethanol
Dairy Worker Skills Training to Focus on Calving Assistance
Joint ABI/ADPI Annual Meeting to be held April 26-28 in Chicago
Kids don’t like the taste of wax with their milk
Nagendra Shah Honored With William C Haines Dairy Science Award By CDRF
TX: Brookshire’s Dairy Plant Named Plant Of The Year
Agriculture briefs
Dairy Cattle: Minerals – Calcium & Phosphorus
NY: O-AT-KA in Batavia meets demand for dairy products
Pa. farmer sees manure as future power source
Udderly cool: Cows visit local California school
OH: Dairymen recall Elsie's days of glory
Friday, March 20, 2009
Latest Cold Storage Data
Dairy Market Weekly Recap
April Federal Order Class I Price Recovers 93 Cents
Dairy Profit Weekly Report with Dave Natzke
NMPF sends letter to President Obama
America 's Pastime Celebrates America 's Dairyland  
Dairy in Crisis - Part 2: Legislators helpless to change milk pricing
Alternatives for dealing with down cycle
Don't cut support, farmers urge Connecticut
Florida farmers hit by falling cost of milk
Retirement Systems Merger Gets Senate OK
For all they're worth
What I didn’t know about cows
Thursday, March 19, 2009
When will the next CWT herd removal take place?
Mid-Week Milk Production Update
USDA's Latest Dairy Outlook Report
Dairy Situation & Outlook: Milk Prices To Strengthen
National Agriculture Week time to honor farmers
Farmers Protest At The Capitol On Agriculture Day
High Dairy Cow Slaughter & Record Dressed Weights Boost Beef...
University gives dairy facility an extreme makeover
Prices paid to Wash beef producers are off 25 percent from 2 years ago
Weak Demand & Low Prices Force Dairy Producers To Lower Production
Legislation to halt ‘cattle tax’ introduced
Walworth County Dairy Farmers Award Scholarship
Wednesday, March 18, 2009
February Milk Production Up Slightly
"Dairy Wellness" is not just a slogan
Dairy farmers rally over pricing concerns
Community marshals support for farmers
Idyllic Calif. town reels after creamery CEO quits
Strategies For Improving Dairy Cattle Reproductive Performance...
Dairy farmers trying to survive milk price plunge
Kenn Mueller returning to his dairy farming roots
Johnson's Dairy owner charged in tax case
AR: Bill to help dairy farmers endorsed by Senate panel
Application Deadline Approaching for Holstein Association USA Awards
Univ. renovates dairy facility
Safeway Announces Finalists in Fourth Annual Lucerne ® The Art of ...
Applications Available for 2009 Badger Dairy Camp
Combat Diabetes with Dairy
Tuesday, March 17, 2009
Cash Prices Continue To Inch Higher
WMMB 2009 Director Elections
National DHIA annual meeting features sustainability, data-driven decisions
Progressive Ag Organization: We have to attack the financial crisis in different ways
Program reaches membership goal
Guest writer says give dairy farm chance
Monday, March 16, 2009
State's ailing dairy industry hopes pizza partnership brings much needed relief
Checkoff Partnership with McDonalds Espresso Drinks
MILC Payment Projections Based on Futures as of 3/13/09 
Avery Offers Hope at Western Dairy Management Conference
Tillamook County Creamery Association Announces its 2008 Broker of the Year  
Milk prices hitting NM dairy farmers hard
IL: Numbers not telling entire story in dairy tiff
MI: State dairy farmers eligible for assistance
NH Dairy Farmers Face Sudden Drop In Milk Prices
Economic conditions have Central Texas dairy farmers reeling
Companies cut synthetic hormone from dairy products
Organic dairy is no-crash cow, for now
New Zealand Fourth-Quarter Manufacturing Sales Fall
NZ: Banks approach overstretched dairy farmers
Friday, March 13, 2009
Dairy Markets Weekly Recap
USDA Updated 2009 Dairy Outlook
Dairy markets are a concern for producers
2,260-cow dairy farm okayed
Rosendale Dairy Gets Green Light From DNR
Bill Proposes Restrictions on Raw Milk Sales
Robert McKown Fund to be Established
New Pond Farm milk cows' new home is in Vermont
Badger Dairy Camp Applications Now Available
Whatcom County Dairy Ambassador candidates announced
Western Dairy Specialties donates milk jugs to YES for birdhouses
EU dairy farmers protest low prices in downturn
UK: Teamwork keeps cow health and fertility up to scratch
UK: Magnesium supplements can prevent staggers
UK: Gold Cup winner praises teamwork
Thursday, March 12, 2009
NMPF Urges Consideration of Mandatory Animal ID in Testimony Before House Ag...
U.S. Family Farmers, Ranchers and Consumers Criticize National Animal ID System CWT Achieves Membership Goal of Two-Thirds of U.S. Milk Supply
NMPF Meets New Ag Secretary
Holstein Meetings to Feature Talks on Genomics, Good Cows
CT: State Lawmakers Trying to Save Dairy Farms
Dairies squeezed like never before
Dairy farms are in the limbo line
Project aims to help small dairy farms turn manure into electricity
Cal Poly dairy cows featured in History Channel series
2009 National Ag Day Essay Contest State Winners
Smith Dairy Celebrates 100 Years in Business
Wednesday, March 11, 2009
California Class 1 Prices Announced
USDA Lowers Milk Production Estimate
PDPW Holds Annual Meeting Next Week
In Congressional Testimony, IDAIRY Urges Action to Implement Mandatory Animal ID
Dairy farmers sue co-op over milk prices
Dairy farmer fears manure on frozen ground proposal
Idyllic town reels after creamery CEO quits
Turnis brothers and their cows enjoy new dairy facility
Tuesday, March 10, 2009
Cash Cheese Prices expected $1.30-$1.40 by Summer
Class of four gets inducted to Maryland Dairy Shrine
Are we inefficient or more conscientious?
AR: McDaniel: Milk fee bill may be unconstitutional
CA: 10 to compete for Dairy Princess title
200 sign petition to halt sale of New Pond Farm dairy cows
ME: State dairy farms seek organic options
Ohio farmers face uphill climb in DC
WI: Mining for ag census nuggets
Alternative Forages For Dry Dairy Cows
Expansion in Ireland
Injured farmer advocates lap belts for tractors
Monday, March 9, 2009
Proposals for Producer-Handler Provision & Exempt Plant Provision has been extended
‘Cow tax’ bill enters Congress
Aubertine wants new labels on 'cheese' that's not cheese
NY: State and local farmers say dairy bill is 10 years too late
Increasing milk product imports hurt U.S. farmers
Mega-Dairy Farm Being Proposed in Taylor County
An idea to help milk prices: Dairy farmers work to change market
Dairy Dynamo Focused on the Future of the Dairy Industry
Dairy farmer to speak at BPW meeting
Agri-Mark announces 2008 profits
Conventional, organic farmers share dairy methods
Dairy Cattle: Nutrition Compliments Good Management Practices
Recommendations for dairy cattle hoof care
AR: Dairymen see hope in legislation
CO: Simple approach spells survival for Longmont Dairy
Xcel to generate electricity from Colorado cow waste
Ohio Dairy Farmers Leaving Industry
Peffer, Strouse Enter Pennsylvania Holstein Hall of Fame
VT: Of Milk and Mexicans
Dairy farmers fight for survival
Demand downturn disturbing to dairymen
World Dairy Leaders Meet in Madrid Next Month 
Russia: Dairy productivity gets boost through technology
Ireland-Improving the cattle herd
When Will 'New Look of School Milk' Enter California Schools 
OK: Kids get milk ’staches to promote dairy
Newark youth get help from Barry Cofield in tackling fitness
Friday, March 6, 2009
MILC Payment Rates and Projections as of 3/6/09
Dairy Markets Weekly Recap
2009 MILC program payments will peak on March milk production
Feingold, Kohl, Gillibrand, Brown Call For Farm Foreclosure Assistance
Aubertine Looking to Make Milk More Attractive
PDPW Conference March 17-18
A Webcast of “Practical Applications of Probiotics in Health and Disease,”
Mary Ellen Sander’s latest Clinical Study “The effects of probiotics on feeding tolerance..."
Dairy cattle slaughter jumps
Mich. dairy wants more cows to pay pollution fines
Cow Tax? Moooove On, says Farm Bureau  Related
'Cow County USA' giving way to sprawl
Barn fire kills more than 20 dairy cows
One man’s quest to purchase illegal milk
NJ to Launch New Statewide Effort to Promote Childhood Obesity...
Melamine-tainted milk products in Indonesia
Thursday, March 5, 2009
A Proposed Feed Ban Will Have Unintended Consequences
MILC Update
Dairy Farmers Refute Milk Price Collapse Caused by Overproduction
The Show-Me Milk Stabilization Act
Dairy Market Report for February 2009
CO: Johnson Dairy sues New Frontier Bank
Alltech's 2009 Animal Health and Nutritional Symposium is scheduled for May 17-20
Land O'Lakes CEO Reports Strong Performance
Land O'Lakes Board Chairman Reflects on 2008 Success, Highlights...
Land O'Lakes Reports 2008 Results
Dairy Specialist: Deal With Lameness & Mastitis To Save Cows
LMIC Trends: Cattle Weights Up
Tips For Saving Electricity In The Dairy
Kraft holds off on new products
WI: 4000-cow dairy concerns farmers union
Wednesday, March 4, 2009
January Dairy Products Report
Recognizing Dairy's Carbon Footprint
MN: Organic dairy farming relies on grazing
NY: Aubertine’s proposed bill concerns dairy industry
NC: Struggling dairy farmers sell cows for slaughter
Principals to get kids help in campaign to save Jersey cow herd
Praising the Holstein Cow
Minerals In Dairy Cattle: What They Are
Tuesday, March 3, 2009
California February Class 4 Prices Announced
Alliance of Western Milk Producers Update
"Frequently asked questions" article on the Growth Management Plan
Cheese Prices Will Be Trading Sideways For Awhile
Farm Bureau has tips for milk price crisis
NMPF: News for Dairy Co-Ops
Doyle: Dairy farmers should see milk payments soon   Related
WI: DNR approves expansion of dairy farm to 4000 head  Related
Organic milk boom in Maine going bust
Dairy cows head for slaughter as milk prices sour
MTSU plan cuts $11M
Schools pick plastic for milk
Energy – the key to reversing plummeting dairy fertility?
Word expected soon on former Delphi plant's future in Coopersville
Dairy powers milk lorries with cow manure
Alice goes to school
Chinese courts begin to accept tainted milk suits
China Passes New Food Safety Law
Another NZ dairy firm in China milk probe
New Zealand: Milk payout set to plunge
Monday, March 2, 2009
U.S. Dairy Exports will be Tempered This Year
Dairy Checkoff Update - February 2009
National DHIA names scholarship winners  
Western United Dairymen Weekly Update
Milk Producer Council Weekly Update
N.Y. Farm Bureau seeks 'crisis relief' as milk prices plummet
Federal dairy subsidies may shrink
Milk marketing council to meet March 5 in Albany
Calving season is here
Popular Milk Procurement Workshop fills quickly; register today!
News Release: LR Gehm LLC has initiated legal action against Cornell University
TX: Dairy’s grand opening draws large crowd
EPA writing new rules for Clean Air Act
Shredding stover can benefit ethanol production
Milk prices take sour turn   Plunging profits
Dairy farmers get squeezed   Milk money vanishes for producers
Year shaping up to be tough on area farmers
Homesteaders’ bring changes to face of US farming
Texas Cattle Trichomoniasis Program adopted
Nate Goldenberg, guest column: Dairies unfairly blamed for bad...
Fear of the unknown driving opposition to mega dairy farm
Milk could help prevent Alzheimer's Disease
Sixth Family Farm Joins CVPS Cow Power(TM)
The raw milk debate rages on
At Las Cruces' Farm & Ranch Heritage Museum, all generations can...
UK: Milk income pressure boosting value of C16 fat inclusions in dairy...
China Adopts Food-Safety Law, Creates Cabinet Body

(March 31, 2009) The dairy markets remain flat and “sort of at a new equilibrium at least for the short term,” according to the University of Wisconsin’s, Dr. Brian Gould, in Tuesday’s DairyLine. He said it’s surprising how the market has responded because, “If you look at the movement in the Class III futures over the last six months of 2009, last week was an up week. For example the July to September ’09 period, the futures gained an average of 88 cents over the week so it’s very surprising.”

He said that interest is mounting in Wisconsin and elsewhere in the U.S. in a new revenue insurance program for dairy producers called “Livestock Gross Margins for Dairy.” He called it a “bundled option, using puts on the Class III and calls on the feed costs to set a floor on net revenue over feed costs.” Information is posted on Gould’s website at www.future.aae.wisc.edu/. Click on the LGM-Dairy icon at the top. The page includes a lot of data and tools, according to Gould.

Like an insurance contract, you purchase a policy and you can cover up to 10 months production and you select how much of your production you want to cover and that includes not only your anticipated milk production but your anticipated feed.  All feed is converted into corn and soybean meal.

Using market level prices at signup there’s a stream of expected gross margins that you’re then insured for, he explained, and, if the actual gross margins are less than the expected gross margins over that time period, you receive an insurance payment.  

MILC Payment Rates and Projections             
        Year    Boston Class I  Payment        
                Actual  Target  Rate           
        FY 2009                                
        October '08     18.78   18.48   0.0000         
        November        20.58   18.10   0.0000         
        December        18.68   17.76   0.0000         
        January '09     18.99   17.98   0.0000         
        February        13.97   17.33   1.5135         
        March   12.68   17.23   2.0487         
        April   13.61   16.94   1.4985         
        May     14.37   16.94   1.1587         
        June    15.20   16.94   0.7829         
        July    16.19   16.94   0.3371         
        August  17.35   17.05   0.0000         
        September       18.44   17.03   0.0000         
        FY 2010                                
        October '09     19.08   17.21   0.0000         
        November        19.38   17.21   0.0000         
        December        19.32   17.21   0.0000         
        January '10     19.28   17.39   0.0000         
        February        19.21   17.39   0.0000         
        March   19.25   17.39   0.0000         
        April   19.09   17.53   0.0000         
        May     19.10   17.53   0.0000         
        June    19.18   17.61   0.0000         
        July    19.15   17.61   0.0000         
        August  19.57   17.56   0.0000         
        September       20.09   17.56   0.0000         
        Projections based on futures as of 3/30/2009        

Roger Cryan

Vice President, Milk Marketing & Economics

March Ag Prices Report
(March 30, 3009) The March  Milk-Feed Price Ratio is 1.51, up from February's revised estimate of 1.50, according to USDA’s “Ag Prices” report issued this afternoon, and compares to 2.07 in March of 2008. 
 
The All Milk Price was estimated at $11.50 per hundredweight, down a dime from last month's estimate, and $6.60 below a year ago. Corn averaged $3.96 per bushel, up 9 cents from February, but 74 cents below a year ago. The soybean price, at $9.13 per bushel, was down 42 cents from February, and $2.27 below a year ago. Alfalfa baled hay was $137.00 per ton, down $6.00 from February, but $7.00 below a year ago.

Today’s sustainability is an “environmentally green” business, according to Maddox, with a low carbon footprint, “but a lot of dairymen do that anyway.”  The problem, he said, is that dairy producers are “not getting their story out there” and their efforts have “not been measured so as to prove it to the consumer who is asking for products produced in an environmentally friendly way.” He adds that “The trucks bringing dairy products to the market may cause more damage to the environment than what we do on our farms.”

Maddox said that the dairy industry needs to do more research and produce actual measurements to prove or verify farmer’s contributions to a safe environment. He said the charges made by the anti animal agriculture people seem not to be questioned but accepted as fact, and it’s natural for people to want products that are good for the environment but whoever gets their story out will likely be believed.

“We just got to get out and tell our story,” Maddox warned. He said that 98 percent of dairy producers are environmentally conscious, it’s the 2 percent that “give us a bad name and that’s what we get painted with, but we need to educate our dairy farmers to make sure there’s no slippage and verify with the public what we’re doing and what we’re doing is right.”  

(March 27, 2009) Members of the nation’s largest dairy cooperative gathered in Kansas City this week for Dairy Farmers of America’s 11th annual meeting. Dairy Profit Weekly editor, Dave Natzke, reported in Friday’s broadcast that, with the sharp decline in 2009 milk prices, it was difficult for delegates and leaders of the co-op to celebrate. However, 2008 was a strong financial year for DFA, which markets milk for more than 10,000 U.S. dairy farms.

DFA reported revenues of $11.7 billion and record-high net income of $61 million in 2008, according to Natzke. DFA marketed about 61 billion lbs. of milk last year, and paid farmers an average $18.60 per hundredweight, down from $19.38 the year before.

Addressing the sharp downturn in 2009 milk prices, DFA board chair Tom Camerlo said the co-op had implemented additional producer services to help farmers stressed by high production costs. In addition, DFA president and CEO Rick Smith said the co-op will issue member patronage checks early this year to help farmers with cash-flow issues.

DFA suffered through some legal issues in 2008, having been fined by the Commodity Futures Trading Commission (CFTC) for 2004 cheese and milk futures market manipulation, and the revelation that unauthorized payments had been made to former leaders earlier this decade.

Smith said the co-op has gone through a period of "retrenching", by addressing those issues. He believes all investigations by the Department of Justice, Internal Revenue Service and CFTC have been concluded, and DFA will fight civil lawsuits related to the dairy market manipulation charges, Natzke said, and, by restructuring or dissolving unprofitable joint ventures and writing down debt, Smith said the co-op was well positioned for the years to come.

On a hopeful note, Smith said the US. milk supply/demand  imbalance was coming back into alignment and, as the domestic and world economies improve, better financial days are ahead for DFA’s  producer members.  Related link 

NMPF & IDFA request FDA to update its standards of identity for milk
(March 26, 2009) IDFA and National Milk have filed a citizen's petition with the Food and Drug Administration (FDA) requesting a modification of the standards for milk and other dairy products to allow the use of non-nutritive sweeteners. 

The bottom line, according to National Milk’s Chris Galen in Thursday’s broadcast, is that schools are increasingly trying to use food and beverages that have reduced calorie content due to concern over the obesity rate among kids.

“In order for us to continue providing flavored milk to kids in schools, we have to allow for what are called non nutritive sweeteners,” Galen explained; things that are not sugar or high fructose corn syrup.

They can be used to sweeten flavored milk and still be called milk, he said, but if you use “caloric substitutes” like aspertine or suculose, things that many people use to sweeten coffee or tea, you can’t put them in milk and still call it milk. It doesn’t meet current standards of identity.

NMPF and IDFA is asking the FDA to update its standards of identity for milk to allow these sugar substitutes to be used because many schools have a requirement that what they purchase must fall under the legal definition of milk.

If you’re using these caloric substitutes, you can’t call it milk any more under present guidelines, Galen explained, even though the substitutes are safe and effective in making low calorie milk beverages available to kids in schools.

I asked Galen if we might open the door to something we don’t intend by changing these standards and he answered that “It’s difficult to speculate on what could happen 10 or 20 years down the road but, what we know right now is, that schools are really trying to reduce the caloric intake of the students served by the school lunch program and one of the areas they’re looking at is fluid milk.”

Flavored milk makes up about 70 percent of the milk served in schools, according to Galen, and if it was removed, it would be “a huge blow to that very important market for the dairy industry.”  

(March 25, 2009) Downes-O’Neill dairy broker, Dave Kurzawski, said the Cold Storage data was bearish to the markets in Wednesday’s DairyLine, pointing to the largest increase in stocks of American type cheese in February on record, up 12.5 percent.

He said that indicates that the buying in February was from those finding value in the market but they were putting that cheese into storage not to meet fresh demand. There’s plenty of cheese available, he said, and that’s bearish however “the futures market has not really seen a tremendous decline on that news,” which he said is “somewhat surprising.”

Kurzawski is advising his dairy producers clients to use put options in the second half of the year to provide a floor price under the market, should inflation take hold or demand pick up, it gives them room to the upside although there are some nice prices available in the second half of the year, equating to $1.70 per pound on cheese, as of our recording.

There is the chance that the markets will move up as culling increases and milk production slips but Kurzawski doesn’t see that kind of rally in the next month or two. He said he doesn’t see sustained price strength until cheese eclipses  the $1.40 mark.

“We saw a nice uptick in the price. Now we’re going to take it out for a little while, until we start to see that either demand for cheese goes up or the supply of cheese goes down, or both.

(March 24, 2009) Many believe Friday's Cold Storage numbers were bearish for the dairy markets, although Downes-O’Neill dairy economist Bill Brooks, reminded us in Tuesday’s broadcast that cheese prices fell Friday morning before the Cold Storage data was out. The report doesn’t help any, he admitted, because it showed a “pretty healthy gain” in cheese stocks versus a year ago and the five year average.

Total cheese stocks are 100 million pounds above the five year average, according to Brooks, but “The anticipation was that, with prices getting to the $1.30s, we were reaching that tipping point where folks on the buying side would back away because of the value that was there in the pre teen and $1.20s.”

Demand is strong for American style cheese, Brooks reported, as consumers “trade down in their restaurant choices” and consume more processed cheese, which is where the barrels go to. Demand was less for the other than American style, which saw a jump in stocks, he said, but added that demand for cheese has been slow through much of 2008. January numbers will be out later this week, he said, but those probably aren’t going to look any better either.

Brooks attributed the block barrel price inversion to the demand for processed cheese, “something we’ve seen off and on the past couple of years because we don’t have as much barrel producing capacity as we used to have and then you get the demand for processed cheese.” It’s not surprising to have this inversion, he concluded. “It is starting to narrow itself but it’s not back to a positive ratio as there probably still is a demand imbalance between blocks and barrels.”

The final February feed price numbers will be published and the February MILC rate will be finalized on March 30.  USDA staff in Washington state that the February MILC payments should be made that same week, provided that producers have applied for the program, and supplied FSA with their February production data.

                                               
        MILC Payment Rates and Projections             
        Year    Boston Class I  Payment        
                Actual  Target  Rate           
        FY 2009                                
        October '08     18.78   18.48   0.0000         
        November        20.58   18.10   0.0000         
        December        18.68   17.76   0.0000         
        January '09     18.99   17.98   0.0000         
        February        13.97   17.58   1.6259         
        March   12.68   16.97   1.9304         
        April   13.61   17.09   1.5649         
        May     14.47   16.95   1.1183         
        June    15.11   17.11   0.9010         
        July    15.82   17.11   0.5825         
        August  16.87   17.24   0.1640         
        September       18.03   17.22   0.0000         
        FY 2010                                
        October '09     18.73   17.39   0.0000         
        November        19.24   17.39   0.0000         
        December        19.47   17.40   0.0000         
        January '10     19.46   17.57   0.0000         
        February        19.33   17.58   0.0000         
        March   18.97   17.58   0.0000         
        April   18.92   17.67   0.0000         
        May     18.95   17.67   0.0000         
        June    18.94   17.76   0.0000         
        July    18.94   17.76   0.0000         
        August  19.68   17.71   0.0000         
        September       20.10   17.71   0.0000         
        Projections based on futures as of 3/20/2009           

Roger Cryan

Vice President, Milk Marketing & Economics

National Milk Producers Federation

(March 23, 2009) Kids don’t like the taste of wax with their milk, according to California dairy producer and Dairy Management Incorporated board member, Ron Koetsier. He talked about that at the recent World Ag Expo in Tulare, California and that conversation aired in Monday’s “DMI Update.

He said that was one of the reasons for the popularity of the plastic re-sealable milk containers, a point that was made known to him by another California dairy producer and one that has been confirmed by check off taste tests among kids.

“When you take that wax board carton and put that to your mouth, the wax taste that comes along with the milk changes the flavor,” Koetsier said, and it’s not just the size and shape of the plastic containers.

California is lagging in that respect, according to Koetsier but it’s slowly coming into the state via the “New Look of School Milk” campaign. Processor resistance has slowed the process, he said, has funding has to come from somewhere to make up the difference in the cost of the plastic versus the cardboard cartons.

Thousands of schools across the country now feature them, he said in closing, “It’s a wave that’s coming, California in this case is just a little behind the curve.”

(March 20, 2009) The Agriculture Department’s latest Cold Storage report issued this afternoon shows February butter stocks totaled 206.1 million pounds, up 17 percent or 29.6 million pounds from January, but down 2 percent or 4.3 million from February 2008. 

The American cheese inventory for February stood at 577.4 million pounds, up 5 percent or 25.8 million pounds from January.  February stocks were up 64.3 million pounds or 13 percent above a year ago. January American cheese stocks were revised up nearly 12.1 million pounds. 

Total cheese stocks amounted to 892.9 million pounds, up 3 percent or 27.6 million pounds from January, and up 91.9 million pounds or 11 percent from a year ago. January stock data was revised up 3 million pounds. 

(March 20, 2009) Cash cheese prices continued to move higher early in the third week of March but ended on a down note. The block price crept up to $1.3050 but closed Friday at $1.2925 per pound, still 4 1/4-cents above the previous week, but 50 3/4-cents below that week a year ago. Barrel hit $1.37 on Thursday but plunged 7 1/4-cents Friday, to close at $1.2975, down two cents on the week, and 47 3/4-cents below a year ago. Twenty two cars of block traded hands on the week and 12 of barrel.  The NASS-surveyed U.S. average block price slipped to $1.2233, down 3 cents. Barrel averaged $1.2308, down 2.7 cents.

Butter closed Friday at $1.1825, down a quarter-cent on the week and 20 1/2-cents below a year ago. Only two cars were sold all week. NASS butter averaged $1.1281 per pound, up 1.2 cents. NASS nonfat dry milk averaged 81.56 cents, up 0.1 cent, and dry whey averaged 16.49 cents, up 0.3 cent.

April Federal Order Class I Price Recovers 93 Cents
(March 20, 2009) The April Federal order Class I milk price saw a 93 cent recovery Friday morning as the Agriculture Department announced the base price at $10.36 per hundredweight, but that's still $8.25 below April 2008. The Class I average so far in 2009 is just $11.56, down from $18.99 at this time a year ago.  

The Class III advanced pricing factor was the higher of in driving the Class I value, and Alan Levitt predicts the MILC producer payment will be around $1.50, not including the feed cost adjustor.

The NASS-surveyed butter price averaged $1.1211 per pound, up 4.8 cents from March. Nonfat dry milk averaged 81.52 cents, virtually unchanged from March. Cheese averaged $1.2545, up 11.3 cents, and dry whey averaged 16.32 cents, up almost a penny.

2-week Product Price Averages:

Dairy Profit Weekly Report with Dave Natzke
(March 20, 2009) U.S. dairy exports have slowed and the fiscal year 2009 dairy trade deficit continues to grow, according to Dairy Profit Weekly editor Dave Natzke, who said it's a story of bad news and good news.  

January U.S. dairy trade turned in its fourth consecutive monthly deficit, with exports valued at $176 million. With the slowdown in the global economy, exports were down percent from December and, through the first four months of fiscal year (FY) 2009 exports were valued at $883 million, down 33 percent from the same period in FY 2008;

So far in fiscal year 2009, imports are valued at $1.129 billion, up 1 percent, resulting in an estimated FY ’09 trade deficit of about $246 million. However, January 2009 dairy product imports were valued at $231 million, down 28 percent from December.

The good news, according to Natzke, is that retail dairy product prices are coming down from their record highs. Consumer Price Index data released by the Bureau of  Labor Statistics, shows February 2009 retail dairy prices were down 2.4 percent compared to January, and 1.7 percent less than February 2008. February 2009 retail fluid milk prices were down 5.7 percent from January; cheese prices were down 1.9 percent, butter was down 6 percent, and ice cream was down about one-half percent.

“Based on the milk price farmers receive, there's still room for retail prices to come down,” Natzke said. Compared to February 2008, fluid milk prices were down 10 percent but cheese, butter and ice cream prices were still higher. 

Dairy product prices have been dropping faster than other foods in the grocery store, he concluded, and “combined with retail promotions, consumers can find some dairy product bargains in locations.”

(March 19, 2009) Weak export demand and lower prices are expected to push milk output lower in 2009, according to the Agriculture Department’s latest Livestock, Dairy & Poultry Outlook issued this morning. However, lower dairy product prices have prompted stronger-than-projected domestic use, and tighter supplies have firmed price forecasts compared with earlier USDA forecasts.

Lower prices will lead to lower milk production in 2009. While output per cow will be fractionally higher this year, the total cow herd is expected to contract. For the year, the cow herd will average nearly 1.3 percent smaller than 2008. The contraction began in January, but the steepest declines are expected in the third and fourth quarters.

The 2008 milk cow herd size was revised upward by NASS resulting in an increase in projected 2009 cow numbers from last month. Output per cow will rise fractionally to 20,500 pounds per cow. Total milk production will be lower in 2009 at 188.5 billion pounds, a decline from 190 billion pounds in 2008.

Moderating feed prices will aid output per cow this year; however, producers will face poor returns throughout the period because of low product prices compared with 2008.

At present, the forecast assumes no additional herd buyouts through CWT (Cooperatives Working Together). The problem remains of weak demand is pressuring prices, even in the face of lower input costs. The expected milk-feed price ratio for 2009 clearly signals contraction. The first half of 2009 will be marked by only small reductions in milk supplies despite weak demand, whereas in the second half of the year supply is expected to tighten more dramatically.  

Lower prices have stimulated additional use, and commercial use is forecast to rise by 1 percent on a fats basis and by better than 2 percent on a skims/solids basis in 2009. Total 2009 milk equivalent exports are forecast at 5.1 million pounds on a fats basis and 19 million pounds on a skims/solids basis, down from 8.8 million pounds and 26.6 million pounds, respectively, in 2008.

Export declines are due to global recession reducing demand and to rising production in Australia and New Zealand bringing additional supply to the world market.

Production of total cheese, butter, and nonfat dry milk (NDM) in January was above that of a year earlier. Only whey production lagged behind year-earlier levels. Demand for cheese and butter has been stronger than earlier forecasts and supports slightly higher prices and lower expected net removals. Net removals are forecast to reach 300 million pounds of milk equivalent on a fats basis and 4.8 billion pounds on a skims/solids basis for the year.

The cheese price is forecast at $1.215 to $1.275 per pound. The price for butter is forecast to average $1.105 to $1.195 per pound. NDM and whey prices are forecast at 80.5 to 85.5 cents per pound and 16.0 to 19.0 cents per pound, respectively. As a result of higher cheese and butter prices than forecast earlier, the prices for Class III and Class IV milk have been raised slightly to $10.05 to $10.65 per pound and $9.50 to $10.20 per pound for 2009. The all milk price is expected to average $11.25 to $11.85 per pound in 2009.

When will the next CWT herd removal take place?
(March 19, 2009) The eyes of the industry are on the dairy markets and on National Milk as to when the next CWT herd removal will take place. Last week we reported that it reached its membership goal of 67 percent of the U.S. milk supply.  

CWT Chief Operating Officer, Jim Tillison, reported in Thursday’s DairyLine that they needed “adequate participation” to secure the financial resources to “carry out significant herd retirements in the coming months.”

The 67 percent figure is a minimum figure, according to Tillison, and membership applications continue to come in from individual producers and several dairy cooperatives are considering participating.

“The more participation we get, the more CWT can do to turn this situation around that dairy farmers across the country are suffering from,” Tillison said. “Milk prices have fallen through no fault of their own,” he said, “But they, like many others, are victims of what’s happened, not only in the U.S. economy but the world economy as well.”

When asked when the next herd removal will take place, Tillison said, “Now that we’ve achieved the minimum participation, we’re moving forward with finalizing arrangements for the line of credit that we’re seeking and are taking a hard look at what needs to be done to get something going as quickly as possible.”

He added that, “If we can get a significant herd retirement underway, relatively soon, we can shorten the time period that dairy farmers are suffering,” and, when you’re losing $3-$4 per hundredweight and you’re talking about six months worth of milk production, that’s a significant impact for producers so we’re moving forward as fast as we can and we’ll be making an announcement in the relative near future.”

February Milk Production Up Slightly
(March 18, 2009) Milk production in the 23 major States during February totaled 13.7 billion pounds, down 2.5 percent from February 2008, but actually up 1.2 percent when adjusted for leap day. January revised production at 14.9 billion pounds, was up 1.1 percent from January 2008. The January revision represented an increase of 52 million pounds or 0.4 percent from last month's preliminary production estimate. 

Production per cow in the 23 major States averaged 1,608 pounds for February, 48 pounds below February 2008. The number of milk cows on farms in the 23 major States was 8.49 million head, 31,000 head more than February 2008, but 16,000 head less than January 2009. 

Special Note: NASS added Utah to the monthly estimating program and removed Kentucky beginning with this report. Historic estimates have been created for Utah for 2008 and January 2009 for comparison purposes. The inclusion of Utah and exclusion of Kentucky accounted for 43 of the 52 million pound revision to the 23-State milk production total for January 2009. The remaining 9 million pounds was a result of the normal revision process.

(March 18, 2009) “Dairy Wellness” is not just a slogan. It’s a way of doing business, according to Jim Brewer of Pfizer Animal Health. Brewer talked about the concept in Wednesday’s broadcast, stating that it has three tenants; the health of the cow, which is the first thing on one’s mind when you think of Pfizer.

The second tenant is the profitability of the dairy operation itself. The idea is to be more efficient, according to Brewer, finding the most efficient means to produce the product and look to find how to make a bigger difference for tomorrow as economics change.

The third tenant is the appropriate use of Pfizer’s products, with the consumer in mind.  The goal is to build the ultimate dairy products that are going to be healthy and quality products for consumers so we need to be future looking as well.

The areas that Pfizer works the most in, he said, is assisting dairy producers and their local veterinarians in the areas of reproduction and reproductive efficiency to milk quality, from prevention to appropriate treatments in getting cows back into productivity again. They also focus on fresh cow disorders and making sure that cow is freshened appropriately and gets back to peak milk as rapidly as possible.

Dairy producers can obtain more information about the “Dairy Wellness” program by contacting their local Pfizer representative or log on to www.dairywellnessplan.com.

The barrel price is leading the way, he said, and has gained more than 14 cents since the end of February, and is at the highest price since before Christmas, but blocks are moving up more slowly.

He reminded us that a month ago the cheese price made a run above $1.30 but orders slowed and buyers moved off to the sidelines and prices fell so he warned that before we get too excited about this rally we have to see demand sustained beyond the $1.30 mark. Buying has to continue at the level, he said.

The market is anticipating Wednesday’s February milk production data. Levitt predicts we’ll see a continued slowdown in production but still expects output will be up about 0.6 percent in the 50 states, adjusting for Leap Day. It’s very slow growth, he said, but he still sees output remaining a bit above a year ago.

The April Federal order Class I base milk price is announced Friday morning by USDA. Levitt predicts it will jump to$10.45 per hundredweight. That would be a gain of $1.02 from March but would be $8.16 below a year ago. He expects the Class III advanced pricing factor to be the “higher of” and looks for an MILC payment of $1.46 per hundredweight, not counting the feed cost adjustor.

California dairy producer and Dairy Management Incorporated board member, Ron Koetsier, was back on Monday’s “DMI Update” in another interview recorded at the recent World Ag Expo in Tulare, California. He talked about a new partnership with McDonalds in the roll out of their new Espresso coffee drinks.

He reported that McDonalds will spend about $100,000 per restaurant on 14,000 of them installing the new equipment. There are some 60,000 McDonalds in the U.S., according to Koetsier, where these milk-based beverages could be made available and use about 100 million pounds of product to meet the demand so the potential is great for McDonalds and for the dairy industry.

Advertising and promotion has begun and the check off was involved in helping research and developing the flavors, Koetsier concluded, and “McDonalds is just going to fly with it.”  

MILC Payment Rates and Projections             
        Year    Boston Class I  Payment        
                Actual  Target  Rate           
        FY 2009                                
        October '08     18.78   18.48   0.0000         
        November        20.58   18.10   0.0000         
        December        18.68   17.76   0.0000         
        January '09     18.99   17.98   0.0000         
        February        13.97   17.58   1.6259         
        March   12.68   16.97   1.9304         
        April   13.39   16.94   1.5975         
        May     13.98   16.94   1.3318         
        June    14.26   16.94   1.2043         
        July    14.95   16.94   0.8936         
        August  16.05   17.04   0.4454         
        September       17.09   17.02   0.0000         
        FY 2010                                
        October '09     17.71   17.19   0.0000         
        November        18.09   17.19   0.0000         
        December        18.31   17.20   0.0000         
        January '10     18.40   17.37   0.0000         
        February        18.45   17.37   0.0000         
        March   18.46   17.37   0.0000         
        April   18.43   17.47   0.0000         
        May     18.46   17.47   0.0000         
        June    18.47   17.57   0.0000         
        July    18.51   17.57   0.0000         
        August  19.68   17.50   0.0000         
        September       20.10   17.50   0.0000         
        Projections based on futures as of 3/13/2009        

The February payment rate is preliminary, and could go up or down, depending upon feed costs.

The March payment rate is a minimum, and could go up only, depending upon feed costs.

Roger Cryan

Butter closed the week at $1.1850, up 1 3/4-cents, but 16 3/4-cents below a year ago. Thirteen cars were sold. NASS butter averaged $1.1161, up 2.2 cents. NASS nonfat dry milk averaged 81.49 cents, down 0.4 cent, and dry whey averaged 16.19 cents, up a half-cent. Price support purchases for the week included 5.2 million pounds of nonfat dry milk and no butter.

USDA Updated 2009 Dairy Outlook

Dairy Profit Weekly editor, Dave Natzke, reported in Friday's broadcast that USDA updated its 2009 dairy outlook this week, forecasting slightly improved conditions for the nations dairy farmers. The report lowers 2009 U.S. milk production estimates, primarily due to less milk production per cow as farmers struggle to reduce feed costs, Natzke said.

USDA also expects more farmers to liquidate herds, and this weeks announcement that the Cooperatives Working Together program secured funding commitments on two-thirds of the nations milk production means the prospects for another herd retirement program appear more likely. 

With lower production, USDA raised its 2009 price forecast to a range of $11.25-$11.85 per hundredweight, which would be down nearly 40 percent from 2008.

Four dairy farmers have filed a class action lawsuit against the nations largest marketer of milk powder products, alleging false reporting of nonfat dry milk (NFDM) prices to USDA resulted in depressed milk prices to farmers. The suit, which was filed in California Eastern District Court, names DairyAmerica and California Dairies Incorporated, as defendants, according to Natzke.

USDA uses weekly wholesale price reports for cheese, butter, nonfat dry milk and dry whey in calculating minimum milk prices dairy farmers receive through the federal milk marketing order system. USDA calculated nonfat dry milk reporting errors in 2006-2007 cost U.S. dairy farmers about $50 million, he said.

There's been a lot of speculation on the U.S. Environmental Protection Agency's regulation of greenhouse gas emissions by livestock operations, including dairy farms. This week, EPA proposed a rule that would require farms that produce 25,000 metric tons of greenhouse gas per year to report emission estimates, beginning in 2011. EPA currently estimates only about 50 of the nations largest livestock operations would be affected, Natzke concluded.

(March 12, 2009) National Milk's board met with the new Agriculture Secretary, Tom Vilsack, this week. NMPF's, Chris Galen, reported in Thursdays DairyLine that Vilsack told board members that he's well aware of the dire situation facing dairy farmers and pledged to use the available resources of USDA to try and improve things. Galen said they were heartened to hear that, considering he's only been in office for about a month and recognizes how urgent the situation is in dairy and is going to be willing to work with National Milk and other farm leaders to do things about it.

The house Agriculture Committee held a hearing Wednesday on animal identification. Galen said its one of the more controversial issues the committee has had to deal with. He said that National Milk remains four-square behind a mandatory national animal identification system.

North Carolina dairy producer and veterinarian, Karen Jordon, testified on behalf of NMPF. Jordon, who also chairs the Federations Animal Health & Welfare Committee, told lawmakers that, in order to make certain that we have the safest food supply possible, we need to have a way to trace animals back to the farm.

The name of the Obama Budget is a new era of responsibility, Galen said. If we really want to be mindful of a new era of responsibility, we need to have a quick and effective response to emergencies that could affect the animal health business. He reported that about 75 percent of U.S. dairy farms are registered with the appropriate state agencies but Galen predicted it will be hard to get that last 25 percent unless there is a mandatory system in place.

(March 11, 2009) The Professional Dairy Producers of Wisconsin (PDPW) holds its annual business conference next week in Madison and Executive Director, Shelly Mayer, said in Wednesdays DairyLine that the conference, as in the past, is a time for dairy producers and industry leaders to come together to re-tool, focus on their business, grow their business skills, network, and find solutions, especially at a time like this when its so important that they do so and continue to focus on what they can do to control their destiny in the dairy business.

This years theme is Adding Passion, Multiplying Profits. She said Its probably the best theme we could have had because, during these tough times, its certainly our passion for the dairy business that carries us through.

Mayer said producers are searching for ways to increase profit margins by focusing on the business side and that's what a lot of the sessions will do. Where can we carve out some dollars, she said, What can we be doing to cut some of our costs, and how can we manage things tighter.

While this is the PDPW business conference, Mayer pointed out that the annual event draws farmers from throughout the country. General sessions and breakout sessions are part of the conference and cover everything from calf necropsy, figuring costs and finding ways to formulate rations to save money, managing employees, to taking better care of your family through better communication. There's something for everybody regardless of their size and style of dairy operation. For more information and/or to register, log on to www.pdpw.org, or call 1-800-947-7379.

(March 10, 2009) Cash cheese prices took a nice three-cent jump Monday, with barrel trading at $1.25 per pound, two cents above the blocks. The University of Wisconsin’s Dr. Robert Cropp called it a “reasonable price, moving into the spring,” in Tuesday’s broadcast, especially in barrel due to increased barbecuing at home. He still thinks cheese will be priced around $1.30-$1.40 by summer.

Retail featuring for the Easter/Passover holiday is spurring butter demand, according to Cropp. Store sales have been running soft, he said, but buyers view these prices as an incentive to buy.

When asked about last week’s Dairy Products report, Cropp pointed out that cheese prices are strengthening at a time where production is “relatively high.” Cheddar output was up 4 1/2 percent from a year ago in January, he said, and butter was running 3 1/2 percent higher.

“There’s plenty of product around,” Cropp said, “Buyers believe milk production is going to slow so prices could be higher down the road so they’re buying ahead a little bit, causing prices to strengthen.”

Cropp predicted that the low milk prices and high feed costs portend increased culling of cows. Slaughter is running about 25 percent above a year ago, he said, so cow numbers will drop and milk production continues to slow. We’ll know more from the February milk production report, he concluded, he sees things strengthening in the second half of the year.  

MILC Payment Rates and Projections             
        Year    Boston Class I  Payment        
                Actual  Target  Rate           
        FY 2009                                
        October '08     18.78   18.48   0.0000         
        November        20.58   18.10   0.0000         
        December        18.68   17.76   0.0000         
        January '09     18.99   17.98   0.0000         
        February        13.97   17.58   1.6259         
        March   12.68   16.94   1.9170         
        April   13.45   16.94   1.5705         
        May     13.85   16.94   1.3921         
        June    14.24   16.94   1.2140         
        July    14.84   16.94   0.9443         
        August  15.86   16.94   0.4880         
        September       16.80   16.94   0.0643         
        FY 2010                                
        October '09     17.38   16.94   0.0000         
        November        17.71   16.94   0.0000         
        December        18.01   16.94   0.0000         
        January '10     18.09   16.95   0.0000         
        February        18.18   16.95   0.0000         
        March   18.15   16.95   0.0000         
        April   18.21   17.08   0.0000         
        May     18.30   17.08   0.0000         
        June    18.32   17.17   0.0000         
        July    18.27   17.17   0.0000         
        August  19.68   17.12   0.0000         
        September       20.10   17.12   0.0000         
        Projections based on futures as of 3/6/2009    

Dairy Management Incorporated was at the recent World Ag Expo in Tulare, California and California dairy producer and DMI board member, Ron Koetsier, reported in Monday’s “DMI Update,” that he was being asked when California schools would get the “New Look of School Milk” program.

Koetsier reported that they just signed a contract with the National Football League, which includes the Raiders, the 49ers, and the Chargers to partner with the “New Look” program to get kids to be active in physical exercise and sporting activities and puts the popular round, re-sealable containers in schools.

He said his son even testifies to the need of those milk containers because he helps kids at lunchtime to open milk cartons because they can’t do it themselves. He pointed out that, if they can’t open it, they can’t drink it and, even if they get it open, they may spill it in the process and make a mess. The re-sealables solves that problem, he said, and, if they don’t want to drink it all at once, they can put the top back on and finish it later.

Chocolate milk has actually been banned from some schools, according to Koetsier, because custodial staff charge that it makes such a mess if it’s spilled.

(March 6, 2009) Cheese prices recouped some of the previous week’s losses the first week of March. Block closed Friday at $1.20 per pound, up 2 1/2-cents on the week, but 66 1/2-cents below that week a year ago when the blocks tumbled 20 1/2 cents. Barrel closed at $1.22, up 4 cents on the week, but 64 3/4-cents below a year ago. Forty three cars of block traded hands and 12 of barrel. The NASS U.S. average block price hit $1.2301, up 6 cents. Barrel averaged $1.2403, up 4.4 cents.

Butter inched a little higher, closing Friday at $1.1675, up 1 3/4-cents on the week, but still 15 1/2-cents below a year ago. Eighteen cars were sold on the week. NASS butter averaged $1.0931, up a penny. Nonfat dry milk averaged 81.92 cents, up a half cent, and dry whey averaged 15.68 cents, down 0.2 cent.

Price support purchases this week included 84,657 pounds of butter and 4.5 million pounds of nonfat dry milk.

2009 MILC program payments will peak on March milk production
(March 6, 2009) Dairy farmers’ current economic picture is bleak and it’ll be a month before they start to see financial help in the form of Milk Income Loss Contract (MILC) program payments, according to Dairy Profit Weekly’s Dave Natzke on Friday. 

USDA’s February milk-feed price ratio, which measures the relationship between milk prices and feed costs, was announced at an all-time low of 1.44, less than half the level generally considered positive for milk production. Feed prices actually declined in February, he reported, but the U.S. average milk price plunged to $11.50 per hundredweight, a five-year low.

Based on preliminary milk and feed prices, the MILC program will kick in, with an estimated payment of about $1.63 per hundredweight on February milk production for most U.S. dairy farmers. However, dairy farmers won't see those payments for another month, since the 2008 Farm Bill instructed USDA to calculate MILC payments based on monthly revised feed prices, which in this case will be announced March 30.

Latest projections from National milk’s, Roger Cryan, indicate fiscal year 2009 MILC program payments will peak on March milk production, at about $1.92 per hundredweight. Cryan projects an average MILC payment of $1.25 over the last eight months of the fiscal year. His projections do not include feed cost adjusters.

(March 5, 2009) National Milk and 11 other agricultural organizations have called on the Obama Administration to postpone the April implementation of FDA's BSE Ruminant Feed Ban, which was finalized last year. Chris Galen said in Thursday’s broadcast that it falls in the category of “unintended consequences,” as the FDA is trying to “completely eliminate the very theoretical risk of spreading Mad Cow Disease, or BSE, in the U.S.” He reported that this rule would mandate removal of brain and spinal cord tissues from cattle 30 months of age or older, prior to rendering.

This has been a requirement for all beef products going into the human food supply and now they want to remove these neurological risk materials from products that could be fed to pets but possibly find its way back into the human food chain.

The complication here, Galen said, is that renderers are already considering no longer picking up any dead cattle, particularly cattle where the age can’t be verified and this is a cost to dairy farmers, both in the value of the animals and the cost of disposing of the carcass. In many areas of the country there aren’t good regulations for how to dispose of a 1300 pound cow. You can’t bury or burn it, composting presents its own environmental challenges.

Unless cattle owners can provide this age verification that the animals are not more than 30 months of age, renderers may choose not to collect them and the estimated cost to dairy farmers is anywhere from $30-40 million per year because of lower cattle prices and the loss for cattle no longer being rendered.

This is the worst year to be talking about implementing anything that’s going to lower dairy farmer income.

The Federation has asked the FDA to give more time to present data as to the real cost of this issue, not just dairy cattle but beef and even other livestock.

That would allow the organizations to provide the most current data and evidence of the Ruminant Feed Ban's impact on producer operations. The letter also asked that the comment period on the Ruminant Feed Ban be reopened.

January Dairy Products Report

(March 4, 2009) The Agriculture Department’s January Dairy Products report issued today puts butter production at 174.7 million pounds, up 18.4 million pounds or 11.8 percent from December and 5.9 million pounds or 3.5 percent above January 2008.. 

Mozzarella cheese output totaled 265.6 million pounds, down 12.4 million pounds or 4.5 percent from December, and 15.6 million pounds or 5.6 percent below a year ago. Total Italian type cheese, at 344.9 million pounds, was down 14.2 million pounds or 4 percent from December, and 6.9 million pounds or 2.0 percent below a year ago.

Cheddar production totaled 274.2 million pounds, down 9.7 million pounds or 3.4 percent from December, but 11.8 million pounds or 4.5 percent above a year ago. American type cheese amounted to 353.4 million pounds, down 6.1 million pounds or 1.7 percent from December, but 19.4 million pounds or 5.8 percent above a year ago.

Total cheese output came to 821 million pounds, down 38 million pounds or 4.4 percent from December, but 8.3 million pounds or 1.0 percent above a year ago. 

January nonfat dry milk output amounted to 156.2 million pounds, up 1 million pounds or 0.6 percent from December, and 37.1 million pounds or 31.1 percent above a year ago.
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(March 4, 2009) Last week the dairy industry made an impressive commitment to reduce greenhouse gas emissions at least 25 percent by the year 2020. The International Dairy Foods Association’s, Peggy Armstrong, said in Wednesday’s DairyLine that “Recognizing the growing focus on dairy's carbon footprint, the Center brought together leaders from across the dairy value chain to identify ways to reduce energy use, increase efficiency and help the industry tap into new sources of income.” 

She reported that 12 projects were announced that alone have the potential to create at least $238 million in business value and reduce greenhouse gas emissions by 3.2 million metric tons, a reduction equal to approximately 4.5 billion kilowatts of electricity. 

Extensive research done through the Innovation Center clearly shows that energy and resource efficiency improvements can help producers and processors improve profitability.  It also shows that greenhouse gas reduction can accelerate technology innovations that increase dairy productivity. 

Several of the projects are aimed specifically at dairy processing. One will increase the adoption of energy-efficiency best practices in milk processing plants.  Another will demonstrate the commercial viability of non-thermal ultra-violet processing technology as an alternative method for producing high-quality, safe milk products with significantly less energy.  And a third will review clean-in-place processes, an energy-intensive aspect of milk processing, and determine solutions for reducing both costs and greenhouse gas emissions.

Why take on this commitment now?  Because consumer's concerns about green house gas emissions are threaten dairy consumption.  A growing number of consumers are factoring in "carbon footprint" along with cost, quality and health benefits in the products they buy. Some advocates are touting “low-carbon” diets and steering customers away from meat and dairy choices, while a number of retailers are considering ways to evaluate suppliers on their greenhouse reduction efforts.   And we cannot allow our competitors in the beverage market are positioning themselves as better environmental alternatives to milk.

Cheese Prices Will Be Trading Sideways For Awhile

(March 3, 2009) Monday’s cash cheese trading didn’t produce many headlines although the barrel price inched a penny higher and continued Friday’s move above the blocks. Mary Ledman, Principal of Keough, Ledman, and Associates in Libertyville, Illinois, predicted in Tuesday’s DairyLine broadcast that cheese prices will be trading “sideways” for awhile but she believes the block price would climb to meet the barrel price by mid month, rather than the barrel market slip back down.

She hopes cheese prices don’t keep moving up and down like they have been as opposed to incremental increases. She believes dairy producers will be curbing milk production by slaughtering more cows in March and April and “that should tighten the milk supply,” and she said that end users, looking at their inventories, may be looking to add to those stocks before prices climb.

She also looks for seasonal strength in the butter market. As of March 1, only butter produced after December 1, 2008 can be traded on the Chicago Mercantile Exchange so it’s typical to see a bump in prices with new crop butter.

Commenting on the latest milk feed ratio; Ledman said it indicates how tough things are on the farm but, if there’s a silver lining, she expects this to be the lowest milk feed ratio of the year.

(March 2, 2009) U.S. dairy exports reached record levels in 2008 but will be tempered in 2009, warned Margaret Speich of the U.S. Dairy Export Council in Monday’s “DMI Update.” She reported that 2008 exports totaled $3.82 billion, up 25 percent from 2007 and a new record. The exports were primarily driven by milk powder, cheese and butter and accounted for 10.8 percent of U.S. milk solid basis production in 2008.

“It shows how really important exports are to the health and growth of the U.S. dairy industry,” Speich said, however USDEC projects 2009 exports to decline 27-40 percent due to the global economic recession.

She said the recession has affected demand for dairy as well as other commodities but USDEC is helping our exporters respond to those market conditions and have revised its business plan and marketing activities to provide the assistance that our exporters will need this year to respond to these economic conditions.

USDEC resources will be shifted, according to Speich, to “defend our most important markets like Mexico and Asia, emphasizing activities to maintain market shares there and provide an immediate impact on U.S. export volumes.”