September 2009 Archived Dairy News

Wednesday, September 30, 2009
Ag commissioners propose dairy, pork, poultry plan
Congress fashions $350 million dairy aid package
Republican senator visits region to promote farm bill
World Dairy Expo helps farmers in tough economy
Purdue leading study of cows' gaseous emissions
State finds TRF dairy in violation — again
Ala. dairy farmer promotes industry online
Dairy Crest Cuts Debt, Milk Sales Rise
Tuesday, September 29, 2009
Milk Slowdown Leading to Price Recovery
World Dairy Expo to draw tens of thousands   Cattle check-in   Mood upbeat
From Science, Plenty of Cows but Little Profit 
Glut of milk hurting Michigan dairy farmers  Udderly Discouraging
Rendell Urges Milk Marketing Board to Help Dairy Producers Survive Low Milk Prices
OSHA Cites Hiland Dairy Of Wichita For Alleged Safety Violations
Europe: Dairies play down impact of milk strikes
UK: Dairy Crest Shares Advance as Country Life Sales Grow
Monday, September 28, 2009
USDA Economic Research: August 2009 Cost of Production
16th Annual Dairy 100
Colorado farmers lose cows to boost milk prices
Western United Dairymen update
Alliance of Western Milk Producers update
Milk Producers Council update
MILC projection
This Week in Dairy Profit Weekly
Dannon comments on settlement of Class Action lawsuit
Antitrust Head Says Dairy Industry Needs Reform
EPA's 'cow tax' possibilities killed for at least a year   Related
USDA Economist Addresses Milk Pricing at Dairy Hearing
Dairy Prices May Make ‘Slow, Gradual’ Recovery, Fonterra Says
BVSD contracts for organic milk
Genetics puts daily farmer on world map
Hawaii subsidies cut for livestock feed
Building knowledge on transition cow management
Rid Cows of Cystic Ovaries to Jumpstart Fall Breeding
Understanding traits to shape dairy cows’ future
Alltech Celebrates Final Year to the Alltech FEI World Equestrian Games 2010
Winning dairy cows displayed at fair
Dairy products may promote periodontal health
Jordan Sparks launches milk campaign
What vitamin helps prevent H1N1 flu?
Lyon Family Donates Heifer for National Jersey Queen Scholarship Fundraiser
Old McDonald has a farm
Friday, September 25, 2009
Dairy Cow Slaughter Numbers Up in August
Dairy Market Weekly Recap
Can Dairy Farmers Come Back From Losing Streak
CWT Completes Eighth Herd Retirement Round
Gov Rendell Urges Milk Marketing Board To Help Dairy Producers
Schumer, Gillibrand Urge House-Senate Conference Committee To Keep Provision
Senators challenge processor practices
Senate endorses plan to block 'cow tax'
Cropp: Dairy Prices Finally Starting to Make a Comeback
VRI to buy biofuel engines for Bellair
New USDA website for the 'Know Your Farmer, Know Your Food' initiative
Thursday, September 24, 2009
Most in the dairy industry agree on one thing
Penn State September Dairy Outlook
Dairy Outlook: Milk Prices Finally Increasing
Dairy Crisis Survey
Land O'Lakes, Colleges and Universities: Creating a Better Quality of Life in Africa
AFACT Tells Ag's Story at World Dairy Expo
Dairy cow gives birth while flying to Hawaii
Wednesday, September 23, 2009
Dairy & Beef Producer Shares Masters of Beef Advocacy Program
Manufacturers & Retailers Attempt To Calculate Carbon Footprint
Dairy Letter to Congress
Holsteins top at Show
FFA members were confident about show ring success
PDPW to Hold Dairy Calf & Heifer Tours in October
Farmer hopes his artisan products serve as a model for the dairy industry
U.S. Working Group on the Food Crisis Criticizes Global Harvest Initiative's Failed...
Jersey Breed Continues to Lead Industry for Productive Life
Answer Girl: Queen of Dairy
Tuesday, September 22, 2009
August Cold Storage Report
Market Analysis with Alan Levitt
Over 90 Farm, Consumer And Other Groups Request Zero Funding For Animal ID Program
Task Force Proposals to Make Major Changes in U.S. Milk-Pricing System
Pro Ag Editorial - Arden Tewksberry
Dairy farmers pack anti-trust hearing
Fuse lit for anti-trust probe   
The sour state of milk prices
Latest MILC Projection
Wisconsin governor: China wants dairy help
Carlyle Invests in Chinese Dairy Sector
Brussels: Dairy farmers burn hay, dump milk in price protest
Embryonic Tests Detects Cow Disease
Skagit Co, WA: Farm Power Dairy Digester Renewable Energy Plant to Go Online
Global Dairy Industry to Pledge Emissions Cuts
Sign up Now for Fun-filled Dairy-Focused Youth Lock-in
Addison sophomore takes top dairy honors
Sargento, Packers team for 'Touchdowns for Charity'
USDA, NFL & Dairy Farmers Team Up For Nutrition
Monday, September 21, 2009
Milk Consolidation May Harm Transparency, Varney Says  Statement
‘California conditions’ lead to DFA base increase call
Dairy industry antitrust issues not new
Alliance of Western Milk Producers
Western United Dairymen Update
Dairy News for Co-Ops
Milk Producers Council Weekly Update
Veterinarian of the Year Award
U.S. Dairy Farmers Link with International Farmers to Protest Global Dairy Crisis
Use of Dairy Ingredients a Growing Part of the Dairy Industry
Friday, September 18, 2009
August Milk Production Down 0.2 Percent
Dairy Markets Weekly Review
October Federal Order Class I Base is $12.35
Americans Ate a Little Less Cheese Last year
Aubertine to host talks with farmers on dairy crisis
Editorial: Look beyond patches in dairy crisis solution
Lawmakers question milk cost
WFU Asks Congressional Leaders to Help Solve Dairy Crisis
Dairy dilemmas of today not much different from those of past
Hate Calculus? Try Counting Cow Carbon
MN: Grand Opening of New Sweden Dairy
Dairy Farmers Call For Investigation
Thursday, September 17, 2009
Dairy Outlook Analysis
Congress Conference Committee to Decide How to Best Spend Money
In Belgium, farmers say milk does nobody good
Farmers Want Industry Probe
Our opinion: Got dairy industry stimulus?
Milk Prices Expected to Keep Nudging Higher
NFU Supporting Dairy Industry
Sen. Leahy to hold meeting on dairy in St. Albans
Dairy farmers into ninth month of losing prices
Milk prices still spoiling farmer's profits
Shawano co-op partners with Chinese dairy firm
Organic Dairy Farm Cultivating Next Generation's Farmers
EU Dairy Working Group to Study Possible Milk Futures
Ministry gives checks to fired Pasco dairy workers
Dairy Farms in Deepest Downturn Since Great Depression
Wednesday, September 16, 2009
Podcast: Tom Gallagher, CEO, Dairy Managment Inc
Best Proposal: Uncle Sam Should Buy Cheese and Donate
Senators press for dairy price supports  Related
Senate Judiciary Committee Oversight Hearing in St. Albans Saturday
Senate panel hearing on dairy industry may focus on Dean Foods
Cull-cow prices struggle, but should rebound in 2010
Energy Efficient Dairy Tour
Borden Celebrates Elsie the Cow's 70th Birthday
Tuesday, September 15, 2009
Market Analysis with Bill Brooks
US: NFU Calls On Government To Support Dairy Farmers
Three New England states combine forces to address crisis in dairy industry
Tough times push Addison dairy farm under
Special session on dairy stimulus unlikely
A news farm learning lab could soon be a reality in Marathon County
Students got milk and had a cow over it
Utah and Idaho dairy farmers donate milk to U.S. military in Iraq
2009 AABP Foundation-Pfizer Animal Health Scholarship Recipients Honored
Alltech’s Young Scientist Program Hopes to Attract 50,000
My Time To Smile
Monday, September 14, 2009
Return of export growth linked to return of global economic growth
Weekly Updates: AWMP  WUD  MPC
Latest Editorial from Arden Tewksbury, Manager of Progressive Agriculture Organization
Jeanne Carpenter: Let’s not make our dairy farmers give up
NFU Wants Dairy Lifeline Maintained
Dairy Economy Stays Sour
Missouri dairy farmers seek $16.5M in stimulus money
No longer milking it: Low prices, high supply force farmers out of dairy industry
Cattle Outlook: High Corn Yields Positive For Feeder Cattle Prices
Weld County's dairy industry has been hit hard
Dairy Draws Crowds at NYS Fair
Friday, September 11, 2009
Dairy Markets Weekly Recap
World Ag Supply and Demand Estimates
Monday is a Critical Day for Dairy Producers MILC Payments
Lenders say they'll keep banking on dairy recovery
US dairy subsidies expected to rise further
NMPF Applauds Selection of Senator Lincoln as New Chair of Senate Ag Committee
Dates Set for Northern NY Dairy Institute’s 1st Course in Malone, Watertown, Lowville,
Chazy & Canton
Voice of dairy farming, Howrigan dies at 85
Milking the attention: UK heifer becomes national cover girl
Thursday, September 10, 2009
California's Class 1 Price Announced
NMPF Urges Senate to Spend $350 Million Buying, Donating Cheese  
Animal welfare is a growing concern among consumers
Genus predicts sharp recovery for US dairy mkt
WWU gets $500000 grant to help turn cow manure into fuel for bus
Find your way through the corn mazes at Preston Farms and Fort Hill Farms
State's Dairy Farmers Prove Their Still in Business
Wednesday, September 9, 2009
Beef Board Update
Producers Have Ear Of Congress
Cattle Prices Could Move Higher
Study outcome: Dutch farmers change culling policy last decade
Dairy farmers push EU for more support
Bournville villagers worry as Kraft eyes Dairy Milk buyout
Feed Shrink - The Dairy Managers Nemesis
Teat Time: Cow Milk Drinking Began 7500 years ago
Arm &  Hammer Excellence in Dairy
Tuesday, September 8, 2009
Market Analysis with Mary Ledman
Monday, September 7, 2009
Alliance of Western Milk Producers Update
MILC Update
Dairy News for Co Ops
Western United Dairymen Update
Milk Producers Council Update
Outlook For U.S. Ag Trade
U.S. Senate Hearing in N.Y. Addresses Dairy Pricing
Dairy Farmers Mired in Declining Market
Dairy Farmers Caught Between Historic Prices
Difficult at Best, Perilous at Worst
Cross Country: Rotational grazing offers farmers an opportunity
Cow Manure, Other Homegrown Energy Powering U.S. Farms
The cows come home to improved Moo Booth
Advanced Animal Diagnostics Names Joy Parr Drach as President
Be a farmer for a day at McClelland's Dairy in Petaluma
Kraft's still sweet on Cadbury as takeover rejected
The 36^th Annual North American International Livestock Exposition (NAILE)
Friday, September 4, 2009
CA Vet Voices Idea for Milk Price Turnaround - calls on farmers to write their lawmakers
Family Farmers Plead For No New DOHA Round
Cattle Outlook: Lower Corn Prices Push Fed Weights Up
July Dairy Products Report
Dairy Market Weekly Recap
August Federal Order Class III Benchmark Jumps $1.23
MPC's Wanted and Needed in U.S.
Thursday, September 3, 2009
WSVA Talk Show: Dairy Farmers Hit Hard by Recession - Listen to Parts: 1  2  3  4
Mid Week Milk Production Update
Highlights From Latest Import Watch
Stimulus Aid Urged For Dairy Farmers
House ag chief: ‘We have been divided more than together’
Guest Editorial by Pro Ag
Extension Offers Courses on Dairy
Cow powered: WWU gets $500K for methane project
Wednesday, September 2, 2009
How Important is the Global Dairy Market?
Dairy farmers call for price stability in Vilsack meeting
ID•INFO EXPO 2009: Presentations Available Online
Family dairies becoming artifacts of a bygone era
Deserving Dairy
Lack of Cyclicity Limits Reproductive Success
Helping small businesses attract capital high on Massa's list
Ruch Joins Foremost Farms USA
Report: Global warming to put heat on Midwest
Tuesday, September 1, 2009
CDFA Announces August Class 4 Prices
Market Analysis with Brian Gould
August 2009 Dairy Checkoff Update
Dairy rally draws crowd of more than 150
Ag Secretary Vilsack milked for answers
DEIP Bid For Butter to Africa and Middle East
Dairy Focus: Dare to Compare
Dairy producers: Gov’t aid little help
Recession hitting 4-States dairy farms
Aubertine's Team Wins Milking Contest
Monday, August 31, 2009
August Ag Prices Report Released
Telling Your Story
Are small dairy farms doomed?
Dairy farms hit by 'perfect storm' of lower milk prices, higher ...
Dairy Farmers of America pays members $7.6M to offset tough economy

"With a loss in the export market, particularly in powder and of course cheese and butter, with butter being way down, we've had to get milk production down," Cropp said on Tuesday's DairyLine.

August milk production was down 0.2 percent. "I expect some of the strength in the market that you're seeing here might be just the fact that milk production is down seasonally and fluid sales are up a little bit."

He adds there's also talk of increasing more dollars in expenditures, like $350 million to buy more cheese in the support program. "Some of the strength in the cheese market might be buying a little ahead...and hopefully that doesn't dampen sales later on," he said.

Cropp remains optimistic that the Federal Order Class III base price will rise to around $14.00 by the end of the year. While the Class III price is expected to be only around $12.00 for September, it is projected to be close to $13.00 for October and next year in the $14.00 range. 

"I think the market is going to be stronger than that. I think the futures are a little pessimistic in the long term." He adds with production coming down and cow numbers declining, there will be some signs of improvement. 

Dairy Cow Slaughter Numbers Up in August
(September 25, 20097) USDA’s latest Livestock Slaughter report shows an estimated 239,000 culled dairy cows were slaughtered under federal inspection in August, up 11,000 from July, and 13,000 more than August 2008. January-August 2009 cull slaughter totaled about 1.912 million head, up about 217,000 from a year ago.  

Dairy Market Weekly Recap
(September 25, 2009) Friday’s reported drop in milk output was a lift to the cash cheese market. The block price jumped 8 1/4-cents, closing the week at $1.4125, but that’s still 52 3/4-cents below that week a year ago. Barrel closed Friday at $1.3775, up 8 3/4-cents on the week, but 57 1/2-cents below a year ago. Six cars of block traded hands on the week and two of barrel. The NASS-surveyed U.S. average block price lost 3.6 cents, averaging $1.3359. Barrel averaged $1.2942, down 4.5 cents.

Cash butter closed at $1.2600, down a penny on the week, and 48 3/4-cents below a year ago. 16 cars were sold. NASS butter averaged $1.1774, up 0.7 cent.

Cash Grade A nonfat dry milk finished the week at $1.0650 per pound, up 2 1/2-cents on the week, and Extra Grade closed at $1.0100 up a penny. NASS powder averaged 98.50 cents, up 1.3 cents, and dry whey averaged 30.17 cents, up 0.6 cent.

Can Dairy Farmers Come Back From Losing Streak
(September 25, 2009) The change of season hasn't ended the summer of discontent for dairy farmers – politically or economically. As the leaves change color, the question is, can dairy farmers come back from a long losing streak?   

Dairy Profit Weekly editor Dave Natzke reported on Friday’s DairyLine that through August 2009, U.S. average milk prices have been running nearly 40% below the same period in 2008, taking a toll on dairy cash flows and cash reserves. The most recent USDA report showed August 2009 U.S. milk production was down slightly from a year ago, as economic factors continue to push cow culling higher.  

“Like the changing weather, there are some regional differences,” Natzke said. Latest USDA estimates show California and Western cow numbers and milk production are down compared to a year earlier, while cow numbers and milk production are steady or growing in the Midwest and parts of the Northeast.   

According to Bruce Jones, dairy economist at the University of Wisconsin-Madison, the structure of California dairy farms and the need to buy more feed has resulted in far worse negative cash flows – forcing them to use cash reserves – at a faster rate than other regions.   

National and regional dairy leaders continue to discuss policy alternatives and strategies to address the dairy economy. The question, however, is whether dairy farmers can survive much longer. “I've heard from many dairy producers and organizations in the past couple of weeks who say things are on the verge of economic collapse, unless things improve dramatically, and quickly,” Natzke said.  

The new season has brought some hope. Cheese and nonfat dry milk prices, as well as federal and California milk marketing order prices, have begun a slow climb from depressed levels. The outlook for large corn, soybean and hay crops has helped bring feed prices down.

The low milk prices obviously forced the issue, Galen said, to think long term and develop some kind of consensus. The first two legs of the plan are to revamp the current producer safety nets, the MILC program and the price support program. The idea would be to revise them and create a dairy producer income insurance program similar to the crop insurance program that exists for row crop farmers.

A third leg would be to improve the Cooperative Working Together program by getting more participation so it can have more impact, and fourthly, to reform the Federal milk market order program which many see as flawed.

Fleshing out the details as to how to do this is next, according to Galen, and “Whenever you talk about making changes in dairy policy, the devil is in the details.” He said this is exciting because the economic recession and the pain of low milk prices can be a catalyst for making important changes.

There are a number of proposals being floated, including legislation on Capitol Hill, but I asked Galen if the dairy industry can unite around a plan. He said that is the challenge to build consensus but “By doing this through National Milk and going then back out to the countryside and selling people on a package, not one idea or another, but a whole package of changes, we thing that this stands a much better chance because it will be comprehensive.”

(September 23, 2009) Wednesday’s DairyLine listeners heard the testimony of New York dairy and beef producer, Glen Taylor who recently completed the beef check off’s on line “Masters of Beef Advocacy” program. Taylor said the program equipped him to confidently speak with consumers about the beef industry and the things that are important to it.

Being able to present this message is becoming more and more important, according to Taylor, who will be using his skills at an upcoming local consumer food group that has invited him and others to talk about how beef producers operate and look out for consumers in their production efforts.

Two key issues that Taylor sees as important are animal husbandry, which addresses consumer concerns over animal welfare, and environmental stewardship, which addresses care for the land. Without taking that course, Taylor said farmers don’t give them much thought because they are day to day activities that farmers do naturally and almost “take for granted,” but do practice them “as best we can.” It’s important to let consumers know this, he concluded.  

(September 22, 2009) August butter stocks totaled 264 million pounds, unchanged from July but 49.5 million or 23 percent above August 2008, according to preliminary data in the Agriculture Department’s latest Cold Storage report issued Friday afternoon. July butter stocks were revised down 1.2 million pounds.

The American cheese inventory, at 621.5 million pounds, was down 6.9 million or 1 percent from July but 53.8 million pounds or 9 percent above a year ago. July stocks were revised up 2.2 million pounds.

Total cheese stocks amounted to 985.3 million pounds, unchanged from July, but 105 million or 12 percent above those a year ago. July stocks were revised up 5.5 million pounds. 

Market Analysis with Alan Levitt
(September 22, 2009) Alan Levitt, editor of the CME’s Daily Dairy Report, said in Tuesday’s broadcast that the dairy markets have turned stronger the last two weeks and what’s significant is that the price gains were broad based. It’s not just one product, he explained, prices for cheese, butter, milk powder, and whey were up last week and buyers are starting to get a little more aggressive.  

Declining milk production is on their minds, he said, evidenced in Friday’s report, plus revisions to July data turned an increase into a small decline and, while there weren’t big reductions “it’s a start.” 

Cow numbers continue to decline as well, according to Levitt, as has been the case for most of the year. But, he added that milk production has remained pretty strong in the Midwest though output in the west and southwest is weak where a lot of the butter and powder manufacturing is located.

Other encouraging signs, according to Levitt, include the fact that manufacturers have stopped selling product to the government and international prices are up 20-30 percent across the board over the last three months.

“We’re starting to get some positive signs,” he said, but he warned that he didn’t want to get carried away because “We will bump into some price resistance as they climb and we still have a long way to go.”

We don’t know what’s going to happen to support prices or any of the other possible government measures over the next six weeks, he said, but “It’s been the most encouraging week we’ve seen in the dairy market in quite a long time.”

When questioned about demand Levitt said it’s almost like the flip side of supply. “When buyers sense the supply is going to be tighter, they tend to buy more,” he concluded. “Nobody wants to get caught short as we come up to fourth quarter holiday buying. People start ordering a little more and that’s all contributing to it.”

Weaker futures prices put the November rate at a projected 54¢, down about 14¢ from last week’s estimate.  

Futures markets do not project positive MILC payment rates for any months in 2010.  However, the projected prices would not have to fall far to trigger payments through the first quarter or half of the calendar year.   

(September 21, 2009) The use of dairy ingredients is a growing part of the dairy industry and the dairy check off is working to keep it growing. Stan Erwine, DMI’s Vice President of Producer Relations, reminded DairyLine listeners in Monday’s “DMI Update” that over 1 billion pounds of milk are used each year as an ingredient in another food or beverage product.

He talked specifically about Starbucks, a company that uses over 2 billion pounds of fluid milk in their coffee products. Starbucks came to DMI about two years ago, seeking help with the development of some new menu items, Erwine explained, and one of the ideas that resulted from that was the use of dry whey protein with fiber in a new smoothie called Vivanno. Vivanno consist of fruit, milk, and a powder blend of dairy whey protein, according to Erwine.

Starbucks uses about 3.7 million pounds of whey protein, he said, which requires more than 550 million pounds of milk but “It’s been a successful launch of a healthy new product that adds to Starbuck’s menu.” And, a third flavor was just introduced so Vivanno is available in banana chocolate, orange mango, and now strawberry banana.

It’s important to come up with new and innovative ideas to spur dairy product use Erwine concluded, and it’s really a response to “a dramatically changing consumer who wants new flavors and new products and they want them conveniently.”

Cash butter closed at $1.27, up 9 cents on the week, but 45 1/2-cents below a year ago. Forty one cars were sold. NASS butter averaged $1.1677, up 0.4 cent.

Cash Grade A nonfat dry milk finished the week at $1.04 per pound, up 3 1/2-cents on the week, and Extra Grade closed at $1.00, up 5 cents. NASS powder averaged 97.19 cents, up 3 cents, and dry whey averaged 29.76 cents, up 0.7 cent.

There were no price support purchases on the week, in fact 1.3 million pounds of powder was canceled. Year to date powder purchases stand at 276.2 million. DEIP bid acceptances for the week included 661,300 pounds of anhydrous milkfat to Africa and the Middle East, 1.3 million pounds of butter to Asia and Eurasia, and 659,174 pounds of Cheddar cheese to Africa and the Middle East and Asia and Eurasia.

October Federal Order Class I Base is $12.35
(September 18, 2009) The October Federal order Class I base milk price was announced this morning by the U.S. Department of Agriculture at $12.35 per hundredweight, up $1.42 from September and the highest since January, but is $3.18 below October 2008. The Class III advanced pricing factor was the “higher of” in driving the Class I value and will likely result in an MILC payment of about 60 cents, with no feed cost adjustor, according to market analyst Alan Levitt.  

The NASS-surveyed butter price averaged $1.1658 per pound, down a nickel from September. Nonfat dry milk averaged 95.41 cents, up 8.5 cents. Cheese averaged $1.3802, up 14.9 cents, and dry whey averaged 29.42 cents, up fractionally from September.

2-week Product Price Averages:

Latest estimates from USDA’s Economic Research Service (ERS) indicate 2008 U.S. per capita cheese consumption was 32.5 pounds, down about three-quarters of a pound from 2007’s peak of 33.2 pounds.

While the decline isn't much, it does represent the first year-to-year per capita decline in cheese consumption in more than two decades, according to Natzke.

Per capita consumption of American-type cheeses, such as cheddar and Colby, hit about 13 pounds in 2008. That was actually up from 2007, he said, but it was offset by a decline in the consumption of all other cheeses.

2008 per capita consumption of Italian-type cheese last year was just over 14 pounds, down about a quarter pound from 2007.

In the Italian category, Mozzarella, which is the most-consumed cheese in the U.S., was estimated at 10.7 pounds, down from 2007’s record of 11.1 pounds, but still the second-highest total ever.

“If retail prices are a factor, we should see a rebound in cheese consumption,” Natzke said. Consumer Price Index (CPI) data just released by the Bureau of Labor Statistics, shows August 2009 retail dairy prices were down 0.4 percent compared to July 2009, and down 10.4 percent compared to August 2008. 

Checking individual products; August retail prices for fluid milk were down 0.7 percent from July and nearly 18 percent less than August 2008. Retail cheese prices declined for the 12th straight month, down 0.8 percent from July and down 11 percent from a year ago; and even butter prices, which had been rising throughout summer, were down 0.3 percent from July and down 8.5 percent from August 2008.

The dairy CPI is falling more than other foods, according to Natzke. The index of all foods eaten at home was unchanged from July, and down just 1.6 percent from August 2008.

(September 17, 2009) National Milk’s Chris Galen discussed their proposal for Uncle Sam to purchase cheese to help dairy farmers in his weekly Thursday DairyLine report. At issue is the $350 million that was included as an amendment to an agricultural spending bill offered last month by Senator Bernie Sanders (I-VT).

Senate and House leaders will meet in a Conference Committee to decide how to best spend that money, Galen reported, so National Milk called for the cheese purchases because it believes that to be the most effective way to help dairy farmers as well as needy families suffering from the nationwide recession. The other methods, direct payments or raising support prices, would not be as efficient in the Federation’s opinion, according to Galen.

When asked if the cheese purchases might have a negative impact on the market by impacting consumer sales elsewhere, Galen replied, “We expect that it will have a positive impact on the cheese market because there will be, all of a sudden this new demand for consumer cheese that wouldn’t have been there before.” He said the Federation doesn’t see this competing with any other commercial demand because “these food banks are going to be giving the product away just to certain specific populations of consumers.”

(September 16, 2009) National Milk’s call on lawmakers and USDA to purchase cheese to donate to food banks and other charities to help financially struggling dairy farmers drew praise from Downe’s O’Neill dairy broker, Dave Kurzawski in Wednesday’s DairyLine. Kurzawski said it’s “the best proposal” of the three options being considered right now.

One option is a direct payment to dairy producers, another is to increase the purchase price of cheese again, and the third is to purchase commercial grade cheese. Kurzawski said purchasing commercial grade cheese is the best way to help dairy farmers, in his mind. Increasing the support price on cheese doesn’t help farmers because it doesn’t specify that it be commercial grade.

“The government still wants to be buy government-grade cheese,” Kurzawski charged, “And by and large producers of cheese in this country don’t want to convert to that specification that the government request,” so no cheese is sold and the support program is ineffective.

Kurzawski doesn’t believe direct payments is the best way to help dairy farmers either but “There is legitimate thought behind moving cheese to the government in this fashion” (buying and then donating it).

Others in the dairy industry are calling for a supply management program of some kind, as has been done many times in the past, and when asked if the time for supply management had come, Kurzawski said, “I don’t believe so.”

He pointed out that, “If you could get everyone in the country to agree on something, you might have a case,” but he believes the industry is still far away from that even in this time of depressed dairy prices.

“I don’t think you’ll get the east and the west together on a supply management program,” Kurzawski said. “Certain producers like it and there are certain producers that don’t and so long as that’s the case, it’s going to flounder.”

As to current risk management strategy for dairy producers; Kurzawski said 2010 milk prices are averaging close to $15 per hundredweight. He admits they don’t have many producers aggressively selling milk right now but expects that within the next 30 to 90 days, producers will have an ability to lock in a profit margin. He suggests producers work with their banker, broker, or consultant to create a plan for profitability for 2010. For more details, call Dave at 1-800-231-3089.  

Senate Judiciary Committee Oversight Hearing in St. Albans Saturday

(September 15, 2009) The barrel cheese price started the third week of August on a positive note, jumping 2 1/2 cents Monday, to $1.2750, a half-cent above the steady block price. Butter was up a penny and a quarter, to $1.1925.

Downes-O’Neill dairy economist, Bill Brooks, said in Tuesday’s DairyLine that it looks like things have bottomed out in the butter after holding so long at $1.17 and “That’s pretty good value, sitting here in mid September and folks start looking toward the upcoming holiday season.” He adds that butter stocks are still high but current supplies probably aren’t that great because of the shifting of milk and milk being seasonally close to the low point in output.

There’s perhaps some similar thinking in the barrel cheese as most do not anticipate any more decline in the price. Demand for American type cheese has been good, he said, especially in the process category as consumers choose the fast food chains instead of the sit down style restaurants that typically use more of the block style cheese in the shredded form.

The market is anticipating Friday afternoon’s announcement of preliminary August milk production. Brooks warned that output may be above that of August 2008 because of the mild weather this year. “In a year that needed good strong hot weather to knock production lower, we haven’t had that this year,” he said. Milk per cow might be more than enough to offset the decline in cow numbers, according to Brooks, and that’s what we have seen the last few months.

Look for Friday morning’s announcement of the October Federal order Class I base milk price to come in at $12.27 per hundredweight, according to Brooks. That would be a $1.34 increase from September and the highest since January, but would be $3.26 below October 2008 and not a level producers want to see.

The return of export growth is linked to the return of global economic growth, she said, but that return is uneven right now. Earlier this month analysts said the global economy is coming out of its slump slowly but faster than originally projected.

USDEC, programs have been refocused on protecting market share in core markets, according to Speich, “So we’re staying plugged into these markets because we believe that global demand will strengthen in the coming months.” She said “We’re seeing signs of a comeback. Over the last three months our export prices were up about 9-25 percent, depending on the product, as buyers start to re-enter the international marketplace.”  

(September 11, 2009) The markets had the Labor Day weekend and holiday to digest the Dairy Products report however the block cheese price closed the holiday shortened week at $1.27 per pound, unchanged on the week, but 63 1/4-cents below a year ago when they jumped almost 12 cents and appeared to be headed toward topping $2.00 again. They stopped short at $1.9550 the week of September 15.

Barrel closed Friday at $1.25, up a quarter-cent on the week, but 63 1/4-cents below a year ago. Eighteen cars of block traded hands on the week and nine of barrel. The NASS-surveyed U.S. average block price gained 4 cents, hitting $1.3730. Barrel averaged $1.3798, up 2.2 cents.

Cash butter, after holding at $1.17 for nine consecutive sessions, closed Labor Day week at $1.18, up a penny on the week, but 48 cents below a year ago. Only five cars were sold on the week. NASS butter averaged $1.1633, down 0.3 cent. NASS nonfat dry milk averaged 94.57 cents, up 1.7 cents, and dry whey averaged 29.06 cents, down 0.1 cents on the week.

There were no price support purchases that week and Dairy Export Incentive Program bid acceptances included 12 bids from four different exporters on 4.6 million pounds of butter. A bid on 220,460 pounds of Cheddar cheese was also accepted. There were no bids on powder.

World Ag Supply and Demand Estimates

(September 11, 2009) The government’s new fiscal year begins October 1 and September 14 is a critical date for dairy farmers enrolled in the Milk Income Loss Contract (MILC) payment program, according to Dairy Profit Weekly editor Dave Natzke.

Speaking in his Friday DairyLine report, Natzke reminded listeners that MILC payments are not based on the calendar year, but rather the government’s fiscal year, which  runs from October 1-September 30.

September 14 is especially critical for dairy farmers producing near the annual milk production cap of about 3 million pounds annually, Natzke said, because that's the last day to change the start date for fiscal year 2010 MILC payments. 

If changes aren’t made, the start date defaults to Fiscal Year 2009 dates, which were likely last February, March or April.

Based on current milk price projections, the highest Fiscal Year 2010 MILC payments will be made in October and November 2009, with only small payments made in December through next February.

If a producer elects to receive payments in February through April of 2009 and doesn't make changes for 2010, there's a good chance they'll receive no MILC payment in the coming fiscal year. So, affected dairy farmers need to contact their USDA Farm Service Agency immediately to make necessary MILC changes, according to Natzke.

Speaking of changes, Natzke also reported that the death of Sen. Ted Kennedy has created a domino effect that has led to a change in leadership of the Senate Agriculture Committee. Committee chairmanships are made based on seniority and Senator Tom Harkin, an Iowa Democrat who has been chairing the Agriculture Committee, elected to take over the Senate Health, Education, Labor and Pensions Committee, formerly chaired by Kennedy.

Several other senior Democrat ag committee members, including Pat Leahy of Vermont, Kent Conrad of North Dakota, and Max Baucus of Montana, declined the chairmanship post, because they are already leading other committees. That meant the leadership role fell to Arkansas Democrat Blanche Lincoln, who has served on the Ag Committee since 1999.

U.S. dairy farmers learned the importance of the world dairy market this year, according to the U.S. Dairy Export Council's Margaret Speich. Speich talks about it in Monday's "DMI Update" and we have our weekly Pfizer "Vet Visit" in our second half.

California's Class 1 Price Announced
(September 10, 2009) California’s October Class 1 milk price was announced Thursday morning at $13.75 per hundredweight for the North and $14.02 for the South. Both are up 54 cents from September but are $4.48 below October 2008. The Federal order Class I base price is announced September 18.  

Animal welfare is a growing concern among consumers
(September 10, 2009) Animal welfare is a growing concern among consumers and has prompted the livestock industry to respond. One of those initiatives was the topic of discussion this week at the annual meeting of the Association of Bovine Practitioners.  

National Milk’s Chris Galen was there and reported in his weekly Thursday DairyLine program that veterinarians, especially those who deal with bovine livestock, are much more concerned about animal welfare issues than they were 10 or 20 years ago because, while they have a client relationship with producers, they also have a responsibility for the overall welfare of the cows or animals.

Galen outlined the Federation’s new FARM program (Farmers Assuring Responsible Management), which is designed to provide assurances to the dairy marketing chain of the wellbeing of the animals involved in the dairy industry.

Galen discussed the FARM guidelines, which are still being finalized, and use them to walk through a typical dairy, which was the research farm at the University of Nebraska. This farm has about 150 head, he said, with some in tie stalls, some in free stalls, and they use different management practices so the care guidelines were used to show how various farms might be evaluated.

The issue is being driven by consumer concern over animal welfare and is something that won’t go away, Galen warned and he admitted that there are other similar programs being formulated but, “Everything we’ve heard from the retail chain is that they are aware of consumer concern over where food comes from, who produces it, and the conditions under which animals are kept.”

There are and have been ballot initiatives in the Midwest, according to Galen, and Proposition II in California, so National Milk’s program is designed to be proactive, he concluded, to “play some offense and get out in front of these regulatory initiatives.”

(September 9, 2009) DairyLine’s “Beef Board Update” on Wednesday featured Sulphur Springs, Texas dairy, beef, and hay producer, Don Smith. Smith talked about how important it is for dairy and beef producers to know and trust that their check off investment is being managed wisely, both at the local level and at the national level.

The program originates at the grass roots level, he said, and producers have input on how the money is spent. Check off funding goes to research as well as promotion, he said, to develop new markets and dairy farmers contribute to the beef check off whenever they sell a baby calf, a cow or a heifer, and about 20 percent of the U.S. beef supply is from dairy animals.

Its important dairy producers know how their money is spent and why it’s being spent, according to Smith, and a key reason is so consumers know they’re buying a safe, nutritious product. Check off funded programs also teach farmers how to safely give vaccinations and use medications and it all goes to insure consumer confidence in beef products and “the higher that confidence, the higher the demand is and the higher the demand is, the higher the price will get for our calves and our cows.”

She pointed out that California production of nonfat powder was up 2.7 percent, despite their milk production being down 5 percent. California is putting milk into powder instead of cheese, she said, in fact, total cheese output was down 4.5 percent, driven by a 4.4 million pound decline in American cheese alone.

But, this was offset by gains in virtually every other state that reports American cheese production numbers, in particular Wisconsin where output was up 3.4 million pounds and Idaho was up 3.1 million pounds.

Butter production was also down seasonally, 14 percent nationwide, but it was also down versus July 2008 and 2007, according to Ledman, and she believes that could help boost the butter market from its current low.

When asked how much impact the talk of Congress raising price supports again on cheese, Ledman said “It’s hard to know if it’s doing anything because, when it comes to cheese, we really don’t sell cheese to the government under the support program.”

There are other “rumblings” that may be having an impact, according to Ledman. The $350 million that Vermont Senator Bernie Sanders has put into the Appropriations Bill could possibly be used instead to make dairy product purchases or change the MILC payments to producers, she concluded. “Nobody really has a good idea what these market distorting impacts will do but we can be assured they will have unintended consequences.”

The feed cost adjustor does not affect July’s target, and with falling feed costs, including plunging soybean prices, the adjustor is not projected to be a factor for some time.

REMINDER: The 2009 Fiscal Year ends September 30.  This means that capped producers can start receiving payments again for October milk.  Farmers who have picked a start date for previous years and want to change it have until September 14^th to change it either to October or from October for FY2010.  At the moment, October appears to be the best start date for all producers.  

The Farm Service Agency’s MILC website can be found here:

July Dairy Products Report
(September 4, 2009) The Agriculture Department’s July Dairy Products report puts butter production at 111.6 million pounds, down 13.9 million pounds or 11 percent from June and 2.6 million pounds or 2.2 percent below July 2008.  

Nonfat dry milk output amounted to 132.2 million pounds, down 11.9 million or 8.3 percent from June, and 2.7 million or 2 percent below a year ago.

Mozzarella cheese output totaled 273.6 million pounds, up 3.8 million pounds or 1.4 percent from June, and 12.1 million or 4.6 percent above a year ago.

Total Italian type cheese, at 347.9 million pounds, was up 3.5 million pounds or 1 percent from June, and 10.6 million or 3.1 percent above a year ago.

Cheddar production totaled 267.1 million pounds, down 5.9 pounds or 2.1 percent from June, but up 1.9 million pounds or 0.7 percent from a year ago.

American type cheese amounted to 352.2 million pounds, down 1.2 million pounds or 0.3 percent from June, but up 10.3 or 3 percent from a year ago.

Total cheese output came to 839 million pounds, up 4.8 million pounds or 0.6 percent from June, and 16.8 million or 2.0 percent above a year ago. 

Dairy Market Weekly Recap
(September 4, 2009) The bleeding continued in the cash cheese market this week. The blocks closed Friday at $1.27 per pound, down 9 3/4-cents on the week, 51 1/2-cents below a year ago, and 4 cents below the temporary support price.
 
Barrels closed at $1.2475, down 9 1/4-cents on the week, 52 3/4-cents below a year ago, and 3 1/4-cents below support. Thirty cars of block traded hands on the week and 11 of barrel. The NASS U.S. average block price climbed to $1.3326, up 4 cents. Barrels averaged $1.3583, up 4.2 cents.
 
Butter held all week at $1.17, but that's 49 cents below a year ago. Eleven cars were sold on the week. NASS butter averaged $1.1659, down 2.7 cents. NASS nonfat dry milk averaged 92.87 cents, up 4.9 cents, and dry whey averaged 29.14 cents, up 0.3 cent.
 
There were no price support purchases for the week, in fact 500,000 pounds of nonfat dry milk was canceled, reducing the year's cumulative total to 278.7 million pounds. DEIP bid acceptances included 3.9 million pounds of butter, 2.2 million pounds of anhydrous milk fat, 44,000 pounds of Cheddar cheese, and 5 million pounds of nonfat dry milk.

Class III futures prices, settled Thursday as follows: September $12.19, October $12.40, November $13.16, and December at $13.32.

The August Class IV is $10.38, up 23 cents from July but $6.26 below a year ago. The 2009 average now stands at $9.92, down from $15.51 a year ago.

The four-week NASS-surveyed cheese price averaged $1.2605 per pound, up 12.7 cents from July. Butter averaged $1.2030, up fractionally. Nonfat dry milk averaged 86.88 cents, up 2.4 cents, and dry whey averaged 29.25 cents, also up fractionally from July.

(September 4, 2009) Jerry Dryer, editor of the Dairy & Food Market Analyst and chief market analyst for Rice Dairy in Chicago, admitted in Friday’s DairyLine that MPC imports are “occasionally displacing domestically produced product in the U.S.” but “occasionally we need them. There’s a deficit on some of these products.”

MPC is a product the U.S. didn’t even manufacture until the late 1990s because of the dairy price support program which provided manufacturers the option to make nonfat dry milk and sell it to the government as a market of last resort.

A fair amount of MPC is used by food companies for various applications, according to Dryer, because it has a lot of the lactose removed from it, whereas nonfat dry milk does not, “so MPC has a specific application and specific uses so it is sought after by some food manufacturers.”

U.S. MPC output last year amounted to about 88 million pounds, according to Dryer, who also reported that MPC imports in 2008 amounted to about 109 million pounds and the U.S. actually exported about 62 million pounds “so it’s one of those give and take products.”

Dryer said there is talk in the industry that MPC is being used in cheese manufacturing and displacing milk and while some of that may be true, he said, much of the ultra filtered milk that is used in cheese making is produced right in the plant, that is some of the water and lactose is removed before the milk goes into the vat so it does some replacing, he admitted, but “it’s a product that we need and just isn’t manufactured in an adequate supply in this country right now.”

When asked about the legality of using this as a food ingredient in the eyes of the Food and Drug Administration, Dryer was unsure but said it should be legal. “Its milk with a little water and lactose removed,” he concluded. “It’s certainly a pure and wholesome product. There should not be any health issue related to it.”