April 2010 Archived Dairy News

April 30, 2010
April Ag Prices Report

Dairy Market Weekly Recap

April Federal Order Benchmark Milk Price Inches Up 14 Cents

Trade Dispute With China Threatens To Slow Dairy Price Recovery

Kagen Says Trade Deal Could Make or Break U.S. Dairy Industry

Allegheny couple files lawsuit against Pasture Maid Dairy 

Dairy Business Milk Marketing Cooperative Okayed By USDA

Dairy panel meets for first time; farmers want help now

Got Milk? Not if it isn't dairy

MD: Local teen a national finalist in $30,000 dairy competition

Australia: Dairy company shuts plant and expands another
April 29, 2010

Hardesty new USDEC chairman
 
Crackdown on Misuse of Dairy Terms
  FDA Should Stop Imitation
Products

Cal Poly Dairy Supporter Update

Update: Dairy Farmers’ Movement for Change

What's Your Energy Appetite

Letter to the editor: Gretchen Maine

Letter to the editor: Linda Broyan

Letter to the editor: Loren Lopes

Dairy cows get quality care

Got milk? Only if it comes from a cow, group argues

Raw milk may soon be available

Dairy cows tweet via RFID

PA: Dairy Princess candidates wanted

St. Paul junior selected as dairy princess/ambassador

Volcano takes toll on Iceland farmers
April 28, 2010

The Importance of Farmers Telling Their Story

MPCA closer to shutting down Thief River Falls dairy

WI: DNR close to agreement on fee increase for new factory farm
pollution permits

Livestock Lawsuit: Dairy farm gets millions for shocked cows

MI: $4.5 Million Paid to MMPA Members

Idaho Dairy Products Commission seeks nominations

Dairies can expect more cottonseed

IDFA Calls on U.S. Leaders to Intervene in Threatened Shut Out of
Exports to China

Top cheeses wheel through competition

Former dairy princess endorsed by DFL for Governor

New Zealand Dairy upswing already flowing to consumer 

New market study, "Dairy Food in Sweden to 2013"

Canada: Group backs down from quota challenge

Thousands of French Farmers Protest in Paris
April 27, 2010
Letter to the Editor - Dave & Robin Finch

Dairy Checkoff Update - April 2010

We Have A Lot Of Cheese Out There

Excel Dairy hearing set for Tuesday in St. Paul

ND dairy business getting milked dry

Cattle not at fault for greenhouse gases

Fonterra announces increase in milk price
April 26, 2010
Cropp: Dairy Market Behavior Not Easy to Explain

Having cow hard work, but very rewarding

Western United Dairymen weekly update

Milk Producers Council weekly update

This Week in Dairy Profit Weekly

Latest FAO Report Good News For Dairy

Understanding how cattle think can help handlers, veterinarian says

Farmers hopeful, but unhappy over present 

Study shows feed, not cows, major air-pollution source

Ohio: ODA reschedules Open House and Public Meeting on Van
Deurzen Dairy

Lessons in agriculture

Mooving tribute for Beef Week

Changing the rule book on corporate mergers
April 23, 2010

May Federal Order Class I Price Up 58 Cents

Legislative Session Ends: Raw Milk Okayed, Energy/Jobs Act Dies

A Lot of "Hot Air" Related To Dairy Industry's Role in Climate Change

The Federal Milk Marketing Improvement Act of 2009

Study: Cow feed may be causing Valley air problem

2011 International Dairy Show
April 22, 2010

March Cold Storage Report

Foundation For The Future Program
  Related
Dairy Farmers Hope For Mandatory, Instant Pricing System

Canadian milk and milk products interesting facts

N.L. backs dairy for manure digester system
April 21, 2010

Pressure On The Cheese Market May Not Go Away Soon

Dairy Outlook

Dairy Industry Advisory Committee Has First Meeting

House Ag Committee Conducts Dairy Hearing

Dairy supports debated as work starts on farm bill

Legislators, dairy farmers discuss risk management measures in future Farm Bill

Cornell Team Takes Top Prize in Dairy Competition

"Josie" the Cow Helping to Feed the Hungry

UK: Dairy farm plan for 8,100 cows is shelved
April 20, 2010

More Milk Will Be Coming On Line

Penn State April Dairy Outlook

CWT Accepts Bids For 4.5 Million Lbs. of Cheese Exports; Expands Eligible Product List

Voting Now Open: America's Farmer Mom of 2010

Welch unveils legislation to curb volatility in milk prices

Dairy Price Stabilization Act Would Calm Prices

Speaker Lineup For 2010 Outlook Conference
April 19, 2010

March Milk Production Up 0.9 Percent

U.S. Cheese Exports Are Coming Back

Welch unveils growth plan for dairy industry

Alliance of Western Milk Producers update

Milk Producers Council Weekly Update

This Week in Dairy Profit Weekly

Vilsack to Dairy Committee: ‘There Is a Lot at Stake’

Watahala Farms: Last commercial dairy standing in Alleghany County

Cow-Chips-to-Power Company Sues Idaho

Touchet dairy feeds cows only grass

Senate moves raw milk legislation along

Raw milk supporters stand strong amid tough scrutiny of product

With retirement approaching, Cornell Co-op's Lehman looks back

Over $20,000 to be awarded in the 2010 World Forage Analysis Superbowl

Registration Now Open for 2010 International Dairy Show
April 16, 2010

Dairy Market Weekly Recap

Dairy trade is one of the positive aspects of the dairy economy

Chicago Milk Traders Hold Sour Outlook Despite Butter Price Surge

Dairy Industry Advisory Committee - USDA Website

Trade rep may bring dairy into discussion

California dairies find greener grass

ID
: Dairy farmers backed into a corner as costs rise, prices fall
IL: Wal-Mart reduces dairy business with Prairie Farms

MN: Senator Franken Asks For Help For Dairy Farmers

WA: Officials seek cause of Snohomish dairy-manure spill

WI: Kuehn Dairy Farm to host event commemorating the 40th Earth Day

Dairy producers say robotic milkers work for them

Veterinarians make house calls for cow herd checks

Dairy commercial shows Portsmouth High School students 'Got Milk'
April 15, 2010

Mid-Week Milk Production Update

Producers Will Receive About $30 Million in MILC Payments this Year

USDA Schedules First Meeting of Dairy Industry Advisory Committee for April 13-15

CA Dairy Council offers tool to industry

Google Fiber flavor ice cream unveiled

Auction participants believe in dairy’s future 

Kraft Launches New Mac & Cheese Variety With a Bang

Inspector General seeks tighter residue monitoring for cull dairy animals, veal

90,000 guinea heifer breaks sales record
April 14, 2010

Colorado Dairy Producer Endorses Beef Checkoff

WA: Big manure spill at dairy flows into Snohomish River

Weld County mulls lawsuit over vehicle tests

Iowa seizing on golden opportunity

Ganeden Biotech, Guernsey Farms Dairy Introduce New Probiotic Milk Line

Florida Departments of Agriculture and Education Join "Fuel Up to Play 60"

Firefighter killed in silo explosion on NY farm

Aurora Organic Dairy Named Best Fluid Milk Plant

Dairy exec hopes to moooove Larson out

Babcock Institute Helps Build Dairy Industry in Turkmenistan

Wind project generates heat

WY: Officials order raw milk pulled

40% of New Zealand's dairy herds are now in drought declared zones

April 13, 2010

Market Analysis With Dr. Robert Cropp

Idaho dairies struggle to hang on

Bovine Calving Management: Impact Of Dystocia On Dairy Calves & Cows

New dairy regulations subject of NM water commission hearings

WI Students Earn Top Placings at Dairy Challenge Competition

NFL & dairy farmers lead anti-obesity campaign

IDFA Lauds Healthy Milk, Dairy Choices in Schools Act
April 12, 2010

California May Class 1 Prices Announced

Slightly Higher May MILC Payment Rate Projected

States woo Calif. dairymen with less regulation

Hundreds gather in Madison to promote raw milk sales

Sales of raw milk should get trial period

Dairy groups push legislation

DMI Update

Western United Dairymen weekly update

Milk Producers Council weekly update

Dean Foods Antitrust Case Over WI Plants Will Go Forward

Milk temperature becomes an issue

DNA markers offer a new viewpoint for US dairy breeding industry

Canada: For Sale - One Farm

FDA Says Indiana Dairy Misused Antibiotics

Fire at NY dairy farm kills 104 cows
  We Will Rebuild
April 9, 2010

Dairy Market Weekly Recap

ASDE: Milk Production Estimate Raised Again
Several Proposals To Create Supply Management Progam

Judge denies Dean Foods' motion to dismiss antitrust case

Cross Country: Chapman Brothers Dairy bucking trend of family farm loss

22 Cows Die in Barn Fire
April 8, 2010

Time For Balance, Not Balancing
  Jerry Kozak, NMPF
Wisconsin farmers struggling for needed loans

Democrats back tax credits for companies, farmers

MN: Budget balancing bill cuts agriculture by $7 million

Dean Foods Antitrust Case Over WI Plants Will Go Forward

USDEC Applauds the Successful Brazil Cotton Dispute Negotiation Outcome
 
Biographies of the candidates from the WMMB 2010 elections

Canada's first eco-dairy set to launch

Remembering James Francis Cavanaugh
April 7, 2010

Be Prepared

Mid Sized Dairies Wins Consumers

Export outlook holds promise for dairy farmers

Idaho regulators approve contract for electric utility

Dairymen talk recovery plans at Ohio conference

April 6, 2010

Market Talk with Alan Levitt

Local milk venture backers confident

Research to Benefit Dairy Industry Worldwide

Milk Moustache Tour Touts Benefits of Family Meals

About 100 cows die in Frederick fire

Key nutrient information helping increase dairy farm efficiency

From Cow to Can: WSU's Homegrown Cheeses

Relation Flooring Systems and Mastitis in Dairy Cows

Fonterra plans new milk plant on NZ South Island
April 5, 2010
CWT Helps Members Export 3.5 Million Pounds of Cheese
 

Idaho Dairy Focus
- April 2010
CO: Dairy loans sold, but future's unsure

Alliance of Western Milk Producers update

Open Meeting with Congressman Costa in California at Maddox Dairy

Western United Dairymen update

Milk Producers Council update

NY Dairy Farmers Voice Milk Pricing Complaints

ME: Reporter gets a handle on quality checks at Oakhurst

Cows die in farm shed fire near Gilman

Farm Technology Days completes grant program

Water rights legal battle is very important for local dairy farmers

National dairy competition coming to Visalia

I Keep My Cows Comfortable

Hunterdon County dairy princess gets in the game
April 2, 2010

March Federal Order Benchmark Milk Price Drops $1.50

Good News For Future Dairy Feed Prices

Editorial: Let's not throw the baby out with the bath water

Oregon's agriculture sales wither

Cross Country: Oshkosh farm show a 'must-see' event for farmers

New Farmstead Dairy Equipment Company Opens in South Royalton, Vermont

Dr. Harold Farrell presented the William C. Haines Dairy Science Award
April 1, 2010

February Dairy Products Report

Milk Feed Price Ratio is 2.26

New Research Challenges Assumptions Regarding Global Warming and Agriculture

Dairy farmers talk of industry on verge of collapse

Vermont dairy summit talks of milk production limits

Animal ID needs to move forward

Wet spring could lead to increase in mastitis

IA: AE Dairy employee dies in accident 

Winchester dairy farm to pop hazardous gas bubbles in manure lagoon

Seventy-six Groups Push USDA to Get Tough on Canadian BSE

April Ag Prices Report
(April 30, 2010) The April Milk-Feed Price Ratio is 2.15, down from March's revised estimate of 2.19, according to USDA’s “Ag Prices” report issued Friday, and compares to 1.59 in April of 2009. 
 
The All Milk Price was estimated at $14.60 per hundredweight, down 20 cents from last month's estimate, but $2.70 above a year ago. 

Corn averaged $3.51 per bushel, down 4 cents from March, and 34 cents below a year ago. The soybean price, at $9.48 per bushel, was up 9 cents from March, but 31 cents below a year ago. Alfalfa baled hay was $113.00 per ton, up $2.00 from March, but $18.00 below a year ago.

Dairy Market Weekly Recap
(April 30, 2010) Cash dairy trading didn’t see a lot of change the last week of April but the block cheese price closed 2 cents higher, at $1.3875 per pound, 23 1/2-cents above that week a year ago. Barrel closed Friday at $1.38, up 3 1/4-cents on the week, and 29 1/4-cents above a year ago. Only two cars of block traded hands on the week and one of barrel. The U.S. average, NASS-surveyed block price gained 4.7 cents, hitting $1.4384. Barrel averaged $1.4209, down 1.2 cents.  

Butter closed Friday at $1.62, up a nickel on the week, and 39 cents above a year ago. Nothing was sold. NASS butter averaged $1.5153, up 2 cents.

 

Grade A and Extra Grade nonfat dry milk closed unchanged on the week at $1.2975 and $1.25 respectively. NASS powder averaged $1.1774, up 3.4 cents, and dry whey averaged 35.23 cents, down 1.2 cents.

 

April Federal Order Benchmark Milk Price Inches Up 14 Cents

(April 30, 2010) The April Federal order benchmark milk price inched 14 cents higher Friday, to $12.92 per hundredweight. That’s $2.14 above April 2009 and pulls the 2010 average up to $13.62, up from $10.33 at this time a year ago, but compares to $17.78 in 2008. Futures price portend more gains to come. The May contract settled Thursday at $13.42, June $13.95, July $14.52, August $15.00, with a peak of $15.10 in September before heading back down seasonally. The April Class IV price is $13.73, up 81 cents from March, and $3.91 above 2009.

 

The NASS-surveyed cheese price averaged $1.3827 per pound, up 2 cents from March. Butter averaged $1.4773, up 3.9 cents. Nonfat dry milk averaged $1.1208, up 7.5 cents, and dry whey averaged 36.43 cents, down 1.2 cents. California’s comparable 4a and 4b price are issued May 3.

CLASS & COMPONENT PRICES:

COMMODITY            

April 2010 March 2010 Feb 2010

Class II Milk Price

$13.78 cwt. $14.46 cwt. $15.65 cwt.

Class II Butterfat Price

$1.5883 lb. $1.5417 lb. $1.4474 lb.

Class III Milk Price

$12.92 cwt. $12.78 cwt. $14.28 cwt.

Class III Skim Price

$7.65 cwt. $7.68 cwt. $9.57 cwt.

Class IV Milk Price

$13.73 cwt. $12.92 cwt. $12.90 cwt.

Class IV Skim Milk Price

$8.49 cwt. $7.82 cwt. $8.14 cwt.

Butterfat Price

$1.5813 lb. $1.5347 lb. $1.4404 lb.

Nonfat Solids Price

$0.9435 lb. $0.8688 lb. $0.9043 lb.

Protein Price

$2.1449 lb. $2.1311 lb. $2.7066 lb.

Other Solids Price

$0.1702 lb. $0.1823 lb. $0.1992 lb.

Somatic Cell Adjustment Rate

$0.00069 per 1,000 cells $0.00068 per 1,000 cells $0.00076 per 1,000 cells
PRODUCT PRICE AVERAGES Jan 2010 March 2010 Feb 2010
Butter $1.4733 lb. $1.4388 lb. $1.3609 lb. 
Nonfat Dry Milk $1.1208 lb.  $1.0454 lb. $1.0812 lb.
Cheese $1.3827 lb $1.3632 lb. $1.5110 lb. 
Dry Whey $0.3643 lb. $0.3761 lb. $0.3925 lb. 

Trade Dispute With China Threatens To Slow Dairy Price Recovery

(April 30, 2010) A dispute with China threatened to slow dairy price recovery, according to Dairy Profit Weekly editor Dave Natzke. Speaking in Friday’s broadcast, Natzke reported that a small but growing market for U.S. dairy exports could be closed as early as May 1, after Chinese officials abruptly said they would no longer accept terms of a 2007 agreement. However, Friday they agreed to give the U.S. 30 days to work with authorities to secure an agreement on a new health certificate for food-grade dairy exports to China.

                    

On April 22, the Chinese government informed U.S. officials it intended to block imports of U.S. dairy products due to alleged deficiencies in “export certification.” In negotiations for the 2007 agreement, China had requested certification statements regarding animal health issues, which the USDA said were unnecessary for dairy products made from pasteurized milk. China eventually signed the English/Chinese USDA Agricultural Marketing Service (AMS) Sanitary Certificate agreement without that language. However, in last week's letter, China apparently retracted that decision.

 

The value of 2008 U.S. dairy exports to China totaled about $180 million, or about 5 percent of the record $3.8 billion in dairy products exported that year. According to the U.S. Dairy Export Council, primary products were whey proteins, milk powders and lactose. As of late this week, U.S. officials hoped to avert the trade blockade, or at least request an extension to the May 1 deadline, so negotiations can continue.

 

May could also be a pivotal month for the future of any federal dairy policy reforms, according to Natzke. A team of economists are evaluating the economic impact of policy proposals, including several supply or so-called growth management plans, on dairy farmers.

 

Meanwhile, a spokesman for California U.S. Rep. Jim Costa said the congressman is close to introducing a dairy supply management bill in the House. And, the Dairy Policy Action Coalition said a bill to fund mandatory, daily price reporting of dairy product sales is also advancing. Finally, the National Milk Producers Federation is expected to provide details of its Dairy Producers Income Protection Program in May.

Crackdown on Misuse of Dairy Terms

(April 28, 2010) National Milk is renewing its call on the Food and Drug Administration to crack down on the misuse of dairy terms like milk, cheese, and yogurt by imitation products made from soy, rice, almonds, and hemp.

 

Chris Galen reported Thursday that in 2,000, NMPF sent a petition to the FDA asking them to crack down on processors who used dairy specific terms, primarily milk with “things that don’t got milk.”

 

The Federation predicted that, if the FDA did not do this, there would be a proliferation of those labels and other products and “sure enough 10 years later,” Galen said, “We’re seeing soy cheese, hemp milk, and non dairy ice cream.”

 

He pointed out that there are standards of identity in place and “If you use terms like ice cream, cheese, yogurt, or milk, they must be made from dairy milk, milk from the lactation of an animal. You can’t make dairy products out of hemp or rice or soy.”

 

Galen reported that they received no response in its initial call on the FDA, calling it “very frustrating because we felt that we had a good case and we still feel, 10 years later, that we have a good case here, in fact we have a better case because we’re seeing a bevy of new artificial dairy products reaching store shelves that have imitation products made from hemp, rice, almonds, and other plants, legumes, and vegetables. He added that, in some cases marketers create new words like cheese, spelled with a V instead of an S “in an attempt to skirt the standards of identity.”

 

This isn’t just a labeling issue, according to Galen, because a lot of these products do not have the same nutritional level or value as real dairy products do and consumers of so-called rice or soy milk, think they’re getting the same vitamin and mineral content as real cow’s milk, don’t. 

Related: FDA Should Stop Imitation Products

 

The Importance of Farmers Telling Their Story

(April 28, 2010) Seven Valleys, Pennsylvania dairy producer and Beef Board member Joyce Bupp talked about the importance of farmers “telling their story” in Wednesday’s DairyLine. Bupp is in the process of completing the beef check off’s “Masters of Beef Advocacy” program. She said the program is designed to take information that farmers are very familiar with everyday but don’t give a lot of thought to and put it into a compiled, easy-to-read form that reinforces what farmers do. She said it includes information on modern meat production, animal care, beef safety, nutrition, and “things that consumers, neighbors, and friends are interested in.”

 

She acknowledged that there is an information gap among consumers and said it’s sad because people are interested in what farmers do and are supportive once they know but “there’s such a disconnect of a lot of society today from agriculture that they just don’t understand they’re and really hungering for information.”

 

She agreed to the importance of farmers telling their story before someone else does it for them because “there are a lot of organizations out there with agendas and large advertising dollars.” She admitted that farmers don’t have a lot of dollars but “we do have a lot of care and belief in our industry, a lot of passion for what we do so it really behooves us as producers to be ready to step up to the plate and educate ourselves.”

 

The program “makes us more comfortable with what we’re talking about,” she said. “We know what we do but it just helps us to organize our thoughts and have some facts at hand and be better spokespersons for our industry.”

 

We Have A Lot Of Cheese Out There

(April 27, 2010) Cash dairy trading was pretty quiet in the last Monday of April, with block and barrel cheese inching a quarter cent higher on two unfilled bids of each to $1.37 and $1.35 respectively, and butter holding steady at $1.57 on one bid.

 

Downes-O’Neill dairy economist Bill Brooks said in Tuesday’s DairyLine that we have a lot of cheese out there and last week trading saw the highest volume on blocks in a year but we may be starting to bottom out as buyers feel comfortable about owning product, according to Brooks.

 

Butter wise, Brooks said we saw a pretty good run up, following the heavy demand period of Easter but “we’re not seeing a great deal of production come in even with the wide disparity between Class III and Class IV prices and there’s still a lot of pent up demand for future product. A lot of people want to own butter right now, he said, in anticipation of  tighter supplies or export markets later on but right now it’s in a “pause period while people evaluate whether the price is at the right level or not.”

 

The basic message from last week’s Cold Storage report is that we still have a lot of cheese relative to demand, Brooks said. We’re back over a billion pounds, he said, a level achieved once last year but not since 1984 prior to that. We do consume a lot more than we did in 1984, he admitted, but we still have a healthy supply on hand, 35 days worth, the same as what we had at the end of February.

 

Butter looks more promising, according to Brooks, with levels comparable to a year ago or a 46 day supply but we have price that’s 20-25 cents so it goes back to the anticipation of the market and folks want to own product right now because they believe that there’s going to be more prices increases later on down the road that they can either take advantage of or they don’t want to get hurt by.”  

 

Latest FAO Report Good News For Dairy

(April 26, 2010) Dairy Management Incorporated’s Joe Bavido discussed the U.N.’s Food and Agricultural Organization’s report on Greenhouse Gas Emissions from the Dairy Sector in Monday’s “DMI Update.” He said that the report states that approximately 4.1 percent of total global GHG emissions are related to the global dairy sector. The figure includes emissions associated with milk production, processing and transportation as well as the emissions from meat production from dairy-related culled and fattened animals.

 

“Considering just global milk production, processing and transportation and excluding meat production, the global dairy sector contributes 2.7 percent of GHG emissions, according to the new report, Bavido said.

 

Bavido called the report “good news for dairy because it is significantly less than the 18 percent figure cited for livestock agriculture in the November, 2006 report. The 18 percent number has been inaccurately attributed to dairy GHG emissions, he said, “and dairy has taken some negative press in regard to that.”

 

Bavido also reported that work is underway at the Innovation Center for U.S. Dairy to “build a foundation of credible data to help tell consumers about the longstanding commitment of dairy farmers and the dairy industry to the environment.” The Center works with the University of Arkansas Applied Sustainability Center and other experts to determine GHG emissions for U.S. dairy, he said, beginning with a comprehensive life cycle assessment for fluid milk. Preliminary research attributes an estimated 2 percent of total U.S. GHG emission to U.S. dairy, according to an Innovation Center press release.  

 

Dairy Market Weekly Recap

(April 23, 2010) The block cheese price ended the third week of April at $1.3675 per pound, down 3 cents on the week, but still 18 3/4-cents above a year ago. Barrel closed at $1.3475, down 1 3/4-cents on the week, but 24 cents above a year ago. Fifty nine cars of block traded hands and 23 of barrel. The NASS U.S. average block price jumped 7.5 cents, to $1.3917. Barrel averaged $1.4330, up 7.3 cents.

 

Butter closed the week at $1.57, up a penny, and 34 3/4-cents above a year ago. Nothing was sold all week. NASS butter averaged $1.4958, up 2.1 cents. 

 

Cash Grade A nonfat dry milk closed Friday at $1.2975, up a half-cent on the week. Extra Grade closed at $1.25, up 4 cents. NASS powder averaged $1.1428, up 3.2 cents, and dry whey averaged 36.48 cents, up 0.2 cent.  

May Federal Order Class I Price Up 58 Cents
(April 23, 2010) The May Federal order Class I base milk price was announced this morning by the USDA at $13.80 per hundredweight, up 58 cents from April and $2.83 above May 2009. That brings the year’s average to $14.25, up from $11.44 at this time a year ago, but compares to $18.52 in 2008.  

The NASS-surveyed butter price averaged $1.4861 per pound, up 6.1 cents from April. Nonfat dry milk averaged $1.1250, up 7.9 cents. Cheese averaged $1.39, down 1.5 cents, and dry whey averaged 36.36 cents, down 1.9 cents from April.


Advanced Pricing Factors

May 2010 April 2010 March 2010
Class I Base  $13.80/cwt. $13.22/cwt. $14.34/cwt.

*The Base Skim Milk Class I: 

$8.53/cwt. $8.19/cwt. $9.60/cwt.

Class III skim:

$7.69/cwt. $8.19/cwt. $9.60/cwt.

Class IV skim:

$8.53/cwt. $7.82/cwt. $8.69/cwt.

**Butterfat

$1.5920/lb. $1.5179/lb. $1.4515/lb.

Class II Skim price:

$9.23/cwt. $8.52/cwt. $9.39/cwt.

Class II NFS price:

$1.0256/lb. $0.9467/lb. $1.0433/lb.

2-week Product Price Averages:

 

May 2010 April 2010 March 2010

Butter

$1.4861/lb. $1.4249/lb. $1.4823/lb.

NFDM

$1.1250/lb. $1.0459/lb. $1.2701/lb.

Cheese

$1.3900/lb. $1.4049/lb. $1.5764/lb.

Dry Whey

$0.3636/lb. $0.3821/lb $0.3629/lb.

A Lot of "Hot Air" Related To Dairy Industry's Role in Climate Change

(April 22, 2010) There's been a lot of “hot air,” If you'll pardon the pun, related to the dairy industry's role in greenhouse gas (GHG) emissions and global climate change but a new United Nations’ Food and Agriculture Organization (FAO) report counters some of that rhetoric, showing dairy contributes far less to greenhouse gas emissions than what is widely cited by anti-livestock groups.

 

Dairy Profit Weekly editor, Dave Natzke, said in Friday’s broadcast that much of the ongoing greenhouse gas and global climate change debate related to the livestock and dairy industries centers around a 2006 United Nation’s report, “Livestock’s Long Shadow – Environmental Issues and Options” which claimed livestock agriculture contributed 18 percent of the world's greenhouse gas emissions, even more than emissions from all transportation.

 

Anti-meat and milk groups have used those estimates to call for "Meatless Mondays," Natzke said, and a reduction in dairy product consumption as a means to “save the planet.”

 

However, one of the authors of that earlier report has admitted statistics were exaggerated, and this week, a new FAO report estimates global milk production, processing and transportation contributes just 2.7 percent of global greenhouse gas emissions. And, if you add emissions related to meat produced from dairy animals, the estimate is just 4 percent.

 

The FAO report, Greenhouse gas emissions from the dairy sector, focuses on the entire dairy food chain, from feed production and on-farm emissions, to emissions associated with milk processing and packaging and transportation of dairy products to retailers. 

 

Dairy industry leaders applauded the new information, saying it gives a more accurate assessment of dairy's greenhouse gas emissions, and helps identify the key areas where dairy research and industry organizations, such as the Innovation Center for U.S. Dairy, can work to drive greenhouse gas emissions even lower. 

 

March Cold Storage Report

(April 22, 2010) March butter stocks totaled 196.6 million pounds, down 6.6 million pounds or 3 percent from February and 15.9 million pounds or 7 percent below March 2009, according to preliminary data in the Agriculture Department’s latest Cold Storage report issued this afternoon. February butter stocks were revised up 5.6 million pounds from the previous month's estimate.

 

The March American cheese inventory, at 600.8 million pounds, was unchanged from February but 52.2 million pounds or 10 percent above a year ago. February revised estimates were raised up nearly 1.1 million pounds.

 

Total cheese stocks amounted to 1 billion pounds, up 15.1 million pounds or 2 percent from February, and 85.6 million or 9 percent above those a year ago. February total cheese stocks were revised up 2.1 million pounds from previous month. 

Foundation For The Future Program
(April 22, 2010) National Milk, represented by Pennsylvania dairy producer Lauren Mosemann, testified Tuesday before a dairy specific 2012 Farm Bill hearing in that state by the House Agriculture Committee. She spoke of National Milk’s new “Foundation for the Future” program, according to Chris Galen in Thursday’s broadcast “Because the Federation is trying to align the thinking of lawmakers behind the rational for coming up with our new approach to setting up a safety net for dairy farmers and helping to manage some of the price volatility that’s out there that has been plaguing the industry for years, especially the last 18 months.”

 

The hearing was mainly to garner input from Pennsylvania dairy farmers about what they would like to see in dairy policy ahead, Galen reported, and that was followed by a hearing Wednesday in Washington where Agriculture Secretary Tom Vilsack spoke about the upcoming Farm Bill.

 

Galen said it’s preparation for getting the Committee to deal with the new Farm Bill and, while it’s a couple years away, “they are trying to be aggressive in the House Ag Committee because they realize that, apart from all the other challenges we have in dairy or in some of the other commodities, one of the biggest challenges is going to be the budget and how you pay for any new programs.” “They want to move aggressively to try to come up with some new ideas because one of the huge issues confronting Congress is going to be the enormous national deficit and what types of government programs we will be able to afford,” he said.

 

The Federation has proposed replacing the dairy price support program with an income insurance program similar to the one Brian Gould talked about Wednesday from the University of Wisconsin. But, Gould questioned the chances of NMPF’s proposal which would require government funding.

 

Galen countered, saying that National Milk proposes that current government funding of the price support program and the MILC program be redirected to a margin insurance program that “has wider applicability and deals with the types of pricing situations that farmers are increasingly going to face in the future.” “We need to transition to a new and different safety net,” Galen concluded.


Pressure On The Cheese Market May Not Go Away Soon

(April 21, 2010) Monday's March Milk Production report is bearish but may not necessarily impact cheese prices, according to Downes-O’Neill dairy broker, Dave Kurzawski. Speaking in Wednesday’s broadcast, Kurzawski said there’s been pressure on the cheese market in the past six or seven trading sessions and while, that pressure “may not go away today,” he believes demand will respond to a price that’s now “south of $1.40.”

 

Pointing to the January and February downward revisions of milk output, Kurzawski said “We’re starting from a little bit lower point of total production than we initially thought but that number is relatively bearish for the market right now.”

 

Weather is also improving and the spring flush is occurring around the country so there’s not much worry of a shortage of milk production right now he acknowledged, but “The caveat here is that Wisconsin, Washington, Michigan, and Idaho (states registering sizable increases) are not the only places that we need to be producing milk. The world needs milk to make their products so while we have a bearish report here I tend to think that the bubbling of demand from butter, nonfat powders, and the dry whey powder markets will ultimately supersede this milk production report.”

 

Oceania is struggling with low milk production, according to Kurzawski. New Zealand is in a two month draught and didn’t have a great flush a few months back and output is 2 1/2-3 percent below that of a year ago. Australia is down 5-6 percent, he said, “So we have to look at the supply of milk from a worldwide standpoint, not just what’s going on here domestically.”

 

Kurzawski suggests producers lock in a floor price, admitting that “today may not be the day to do that but they should be shopping around for the best possible/worst case scenario price.”

 

He remains relatively bullish for milk prices for the next 60-90 days and believes futures prices will “give these guys a good opportunity to lock in that floor price to potentially market milk outright and lock in a profitable level to bring to the dairy.”

 

Looking ahead on our week; the Agriculture Department’s monthly Livestock Dairy and Poultry Outlook is issued this morning. the March Cold Storage report is out tomorrow afternoon, and Friday morning USDA issues its monthly Livestock Slaughter report and the May Federal order Class I base milk price is announced.

 

As always, we will post complete details here as soon as possible and please vote on our new website poll.  


Dairy Outlook

(April 21, 2010) The Nation’s dairy herd continues to contract on a year-over-year basis, according to the Agriculture Department's latest Livestock, Dairy, and Poultry Outlook released this morning. However, milk per cow continues to rise incrementally. The April Milk Production report indicated that milk per cow was 51 pounds (lbs) higher in March compared with a year ago.

 

Moderating feed prices for 2009/10 and the prospect of continued moderate feed prices into the next crop year have provided an incentive to increase output. However, lower milk prices have kept the milk-feed profitability ratio below 2.5. A milk-feed price ratio above 2.5 is considered necessary to begin any expansion.

 

Although the U.S. dairy herd continues to decline, the rate of decline appears to be moderating. The March Livestock Slaughter report showed 223,000 dairy cows slaughtered under Federal inspection in February, the second lowest total since last May.

 

Meanwhile, producers added 3,000 cows in both January and February. For 2010, the U.S. dairy herd is expected to average 9,065,000 cows, a 1.5 percent decline from 2009, but somewhat higher than recent USDA estimates. Output per cow is projected at 20,950 lbs resulting in a forecast 189.9 billion lbs of milk in 2010.

 

Although stock estimates were slightly higher than forecast last month, ending stocks for 2010 on both a fats and skim-solid basis are still expected be below 2009. Ending stocks on a fats basis are projected to end 2010 at 10.4 billion lbs; stocks on

a skim basis are forecast to end the year at 10.8 billion lbs. Most of the drawdown in stocks is likely to occur in the second half of 2010.

 

Commercial use is projected to reach 188.4 billion lbs in 2010 on a fats basis, up 1.3 percent. Moderating prices for cheese and economic recovery are the basis for stronger domestic commercial use on a fats basis. The higher commercial domestic

use should drawdown currently high cheese stocks over the course of the year and firm cheese prices by year’s end. Commercial use on a skim-solid basis is expected to reach 167.6 billion lbs, up 0.5 percent from last year.

 

Higher exports of powder, especially later in 2010, are expected to draw powder from the domestic market, strengthening prices for nonfat dry milk in the second half of 2010. Commercial milk equivalent exports are forecast at 4.75 billion pounds and 25.4 billion pounds on a fats and skim-solid basis, respectively. Most of the expected increases are based on higher expected exports of butter, milk fat, and nonfat dry milk (NDM).

 

While exports have been modest in the first quarter, movement is likely to improve in later quarters due to economic recovery in importing countries and tighter supplies from potential competitors.

 

Higher forecast milk production and relatively high cheese stocks suggest a scaleback in prices. Cheese prices could strengthen in the second half, if recovery continues and stocks are drawn down. Cheese prices are expected to average $1.490

to $1.540 per lb this year. Butter sales have been at least reasonable, and production

will likely tighten seasonally as cream supplies move to production of ice cream.

 

Butter prices are forecast to rise over the course of the year as demand improves despite second-half increases in milk production. Butter prices are expected to average $1.420 to $1.500 per lb in 2010.

 

NDM prices should climb in the second half of 2010 as exports increase. NDM prices are forecast to average $1.110 to $1.150 a lb in 2010. Whey prices have already rebounded from last year and are expected to remain near present levels for the balance of 2010. Prices will likely average 37.5 to 40.5 cents a lb this year.

 

As milk production increases encounter expected increases in demand, prices are likely to be higher than 2009 but not rise to 2007 or 2008 levels. The Class IV price is forecast at $13.40 to $14.00 per cwt in 2010. The Class III price is expected to

average $14.10 to $14.60 per cwt, and the all milk price is forecast to average $15.45 to $15.95 per cwt.

More Milk Will Be Coming On Line
(April 20, 2010) The continued descent of cheese prices is evidence of a fear that more milk will be coming on line, according to the University of Wisconsin’s Dr. Brian Gould in Tuesday’s DairyLine. Producers are responding to the temporary gains in prices a couple months ago, he said, and are increasing their production and there’s concern that too much milk is entering the pipeline.

 

He mentioned the significant gains and the significant losses in the CME cash cheese market and said volatility is ever present and was a front and center topic at last week’s first meeting of USDA’s Dairy Advisory Policy Committee.

 

He also mentioned the Livestock Gross Margin insurance program, which the University of Wisconsin has been working on for about two years along with National Milk’s proposed Dairy Producer Income Protection program.

 

The two have similarities, he said, but there are significant differences. Gould has put together a power point presentation comparing the two and listeners were invited to send him an e-mail requesting the presentation at bwgould@wisc.edu.  

 

He predicted that there’ll be a lot of discussion about this, concluding that “it’s hard to say whether there’ll be any real change down the road but there are some innovative ideas being tossed about.”   

.

March Milk Production Up 0.9 Percent
(April 19, 2010) March milk production in the top 23 states totaled 15.4 billion pounds, up 0.9 percent from March 2009, according to USDA’s preliminary data in Monday's Milk Production report. February revised production at 13.7 billion pounds, was up 0.3 percent from February 2009. The February revision represented an increase of 17 million pounds or 0.1 percent from last month's preliminary production estimate.

March cow numbers totaled 8.32 million head, up 1,000 from February but 162,000 below a year ago. Output per cow averaged 1,846 pounds, up 51 pounds from a year ago.

California production was down 0.7 percent from a year ago, due to a loss of 63,000 cows. However, output per cow gained 55 pounds. Wisconsin was up 6.3 percent, thanks to4,000 more cows and 100 pounds more per cow. New York was up 0.2 percent, on 13,000 fewer cows but output per cow was up 40 pounds. Idaho was up 3 percent, on 4,000 more cows and a 40 pounds increase per cow. Pennsylvania was up 1.6 percent. Cow numbers were down 10,000 head but output per cow was up 60 pounds. Minnesota was up 3.8 percent, due to 2,000 more cows and a 55 pound gain per cow.

The biggest increase was in Washington State, up 7.9 percent, thanks to 10,000 more cows and a 70 pound gain per cow. Wisconsin was next, followed by Michigan. The biggest decline was in Missouri, down 8.4 percent, due to 7,000 fewer cows and 25 pounds less per cow. Colorado was next, followed by Arizona.

State by State

Milk Cows 
Change from March 2009

Output Per Cow 
Change from
March 2009

Milk Production
Change from
March 2009

Arizona

-19,000

+70 lbs.

-7.0%

California

-63,000

+55 lbs.

-0.7%

Colorado

-12,000

+20 lbs. 

-8.3%

Florida

-4,000

-60 lbs. 

-6.8%

Idaho

+4,000

+40 lbs. 

+3.0%

Illinois

-1,000  

+40 lbs. 

+1.2%

Indiana

+2,000 

+15 lbs.

+2.1

Iowa

-5,000 

+45 lbs. 

+0.3% 

Kansas

-6,000 

Unchanged

-4.9%    

Michigan

+1,000 

+80 lbs.

+4.5%

Minnesota

+2,000

+55 lbs.

+3.8%

Missouri

-7,000

-25  lbs.

-8.4% 

New Mexico

-12,000

-5 lbs.

-3.8% 

New York

-13,000

+40 lbs.

+0.2%

Ohio

-9,000

+70 lbs. 

+0.9%

Oregon

+1,000  

+30 lbs.

+2.6%

Pennsylvania

-10,000 

+60 lbs.

+1.6%  

Texas

-20,000 

+40 lbs.

-2.6%

Utah

-2,000 

+40 lbs. 

Unchanged

Vermont

-1,000

+40 lbs.     

+1.9%

Virginia

-2,000

-40 lbs. 

-4.5% 

Washington

+10,000 

+70 lbs.

+7.9%

Wisconsin

+4,000

+100 lbs.

+6.3%

23 State Total

-162,000

+51 lbs.

+0.9%


U.S. Cheese Exports Are Coming Back

(April 19, 2010) U.S. cheese exports are coming back, thanks in part to exciting new foodservice programs in Japan, according to Margaret Speich of the U.S. Dairy Export Council in Monday’s “DMI Update.” She said that dairy producers should be encouraged to see this improvement in U.S. cheese exports in recent months, reporting that, from October to January, U.S. cheese exports were up 15 percent.

 

The biggest growth area has been Japan, according to Speich, and, in January, U.S. cheese exports to Japan were up 93 percent. “We’re seeing greater use of U.S. cheese in the foodservice sector,” Speich said, “Thanks to USDEC promotional activities with some of the major chains.”

 

For instance, about 18 months ago, USDEC’s Japan office conducted a foodservice cheese seminar that featured recipes for several different cheeseburgers using Monterey Jack from the United States. This event was attended by five menu-management officials from McDonald’s Japan.

 

Following the program, McDonald’s Japan developed two quarter-pound burgers, a New York burger and a California burger, using U.S. Monterey Jack. The company introduced the new burgers in February and March, accompanied by TV commercials featuring the theme, “Big America.” This is the first time McDonald’s Japan has used U.S. cheese, she said, and it expects to use close to 400,000 pounds of U.S. cheese during a six-week promotion.

 

Several other foodservice chains have started using U.S. cheese in the last year as well, including Lotteria, the third largest hamburger chain in Japan, Gusto, the largest family restaurant chain in the country, and Sizzler.

 

“This is good news for U.S. dairy producers,” Speich concluded. “Activities like these help build demand for U.S. dairy products around the globe.”

Dairy Market Weekly Recap

(April 16, 2010) The cheese price roller coaster is back in business as the blocks tumbled 10 cents the second week of April, ending Friday at $1.3975 per pound, still 22 3/4-cents above that week a year ago. The barrels rolled 7 1/2-cents lower, to $1.3650, but that’s 25 1/2-cents above a year ago. Only two cars of block traded hands on the week and 13 of barrel. The lagging NASS-surveyed U.S. average block price hit $1.3166, up 3.1 cents. Barrel averaged $1.3598, up 6 cents.

 

University of Wisconsin Emeritus Professor, Dr. Robert Cropp, commenting in Tuesday’s DairyLine, recalled that it was just a few weeks ago the price was at $1.26 or $1.27 and “that seemed way too low,” then it approached $1.50, and “now we’re going back down again.”

 

February cheese stocks were relatively high, he explained, and the other disturbing thing is that USDA revised its 2010 milk production forecast again. It had once predicted a 0.7 percent decrease from 2009 but is now expecting a 0.3 percent increase, plus growing cow numbers is another concern, he said.

 

“The concern is that milk production is not going to decline as we thought,” Cropp said. That, with plentiful stocks and a weaker than expected export market on nonfat dry milk, portends cheaper powder and more milk going to cheese.

 

The market has to strengthen in the second half, he warned, because these cheese prices portend a Class III milk price below $14 and that will continue to stress farmers, with no recovery for lost equity. That could mean second half decreases in the milk supply and a recovery in prices, he said. Cropp looks for cheese to “bounce around $1.40-$1.45 until we move further into summer.

 

Butter remains strong and closed Friday at $1.56 per pound, up 6 cents on the week, and 35 3/4-cents above a year ago. Only four cars were actually sold on the week. NASS butter averaged $1.4749, up 2.3 cents.

 

Cropp said cream supplies are tighter as temperatures rise and more cream goes into ice cream. Butter sales are “half way reasonable,” he said, and earlier, there was some inventory building by buyers who recognize that the cream supply and butter production will get tighter as we move into summer. Butter stocks are also slightly below a year ago, he said.

 

Cash Grade A nonfat dry milk closed Friday at $1.2925, up 2 3/4-cents on the week. Extra Grade closed at $1.21, up 2 cents. NASS powder averaged $1.1111, up 4.5 cents. Dry whey averaged 36.34 cents, up 1.9 cents.

Colorado Dairy Producer Endorses Beef Checkoff

(April 14, 2010) Jim Docheff is a Longmont, Colorado dairy producer who believes in the beef checkoff. He said so in Wednesday’s DairyLine, saying it’s “dollars well spent and something every dairy producer needs to pay into and be happy to do it.”

 

“Ultimately, all these milk cows become beef and enter the food chain,” he reasoned, and while he admits that beef sales on a dairy farm are a small part of its income, in financial times like now, “we looking for every dollar out there and if we can raise the price of those beef cows, $10-$15 a head for that dollar we’re paying, I think that’s a pretty good return for our money.”

 

He pointed out that a lot of culled dairy cattle go to ground beef and he suggests a partnership with the dairy check off to promote cheeseburgers, especially with summer grilling upon us, he believes we could increase beef and cheese sales at the same time. He has suggested this to the Beef Board to not just promote beef, but include dairy and this would be “good for everybody involved.”

 

He admits the calf issue is a tough one. They do have a value, he said, we just need to determine what that value is. It’s a sore subject for dairy farmers, he concluded, “I can’t say that we’ve seen a real bang for our buck on those but we need to get some brains together on that, sit down and see what we can come up with because there has to be something we can do with those dairy calves.”

 

National Milk dairy economist Roger Cryan has raised his May Milk Income Loss Contract Payment (MILC) projection. He will talk about it and look ahead on tomorrow's DairyLine broadcast and Select Sires has its weekly "Reproductive Moment" in our second half.

Market Analysis With Dr. Robert Cropp
(April 13, 2010) The cheese price roller coaster seems to be back in business as the blocks tumbled 2 3/4-cents in the first day of trading of the new week. The barrels rolled 2 cents lower. University of Wisconsin Emeritus Professor, Dr. Robert Cropp, commenting in Tuesday’s DairyLine, recalled that it was just a few weeks ago that price was at $1.26 or $1.27 and “that seemed way too low,” then it approached $1.50, and “now we’re going back down again.” 

February cheese stocks were relatively high, he explained, and the other disturbing thing is USDA revising its 2010 milk production forecasts again. It had once forecast a 0.7 percent decrease from 2009 but it’s now expecting a 0.3 percent increase, and growing cow numbers is another concern, he said. 

“The concern is that milk production is not going to decline as we thought,” Cropp said. That, with the plentiful stocks on hand and a weaker than expected export market on nonfat dry milk, portends cheaper powder and more milk going into cheese. 

The market has to strengthen in the second half, he warned, because, these cheese prices portend a Class III milk price below $14 and that will continue the stress on dairy farmers, with no recovery for lost equity. That could mean second half decreases in the milk supply and a recovery in prices. He looks for cheese to “bounce around $1.40-$1.45 until we move further down into summer. 

Butter remains strong and Cropp says it could move a penny or two higher. Cream supplies are tighter as temperatures rise and more cream goes into ice cream. 

Butter sales are also “half way reasonable,” he said, and earlier, there was some inventory building by buyers who recognize that the cream supply and butter production will get tighter as we move into summer and butter stocks are slightly below a year ago. 

California May Class 1 Prices Announced
(April 12, 2010) California’s May Class 1 milk price was announced today by the California Department of Food and Agriculture at $15.37 per hundredweight for the North and $15.64 for the South. Both are up $1.00 from April. The North price is $2.69 above last year, and the South price is $2.68 higher. 

DMI Update
(April 12, 2010) Dairy Management Incorporated’s senior vice president of industry relations, David Pelzer, explained why dairy farmer check off dollars were used to fund the dairy crisis drill in Seattle March 31 in Monday’s “DMI Update. “  

“We’re all in this together,” Pelzer said, “In making sure that we maintain public confidence in the dairy industry and dairy products, especially in an industry wide crisis where the safety of dairy products would be called into question.”

 

“Dairy farmers rely on the whole dairy market chain to supply products to consumers, Pelzer explained, “And we want to make sure that we get everybody (processors and cooperatives) on board in using unified messaging.”

 

He said it’s important that they’re aware of the various crisis management tools that the dairy checkoff offers and to recognize the importance of crisis preparedness and to communicate with a common voice to the public during a crisis situation.

 

Two of these drills were conducted last year, according to Pelzer, and there’ll be one in Atlanta in July and Dallas in November.

 

A number of companies have gone back and done their own drills internally, Pelzer said, and DMI applauds that and he reported that state and regional organizations also work with companies if they desire council in increasing their crisis preparedness.  


Dairy Market Weekly Recap

(April 9, 2010) The big question after Easter was; will the run up in cheese prices hold? That appeared to be the case the first full week of April as prices advanced for the fourth week in a row but they reversed gears Friday, resisting the climb above $1.50. The blocks closed Friday at $1.4975 per pound, down 1 1/4-cents on the day, up 6 3/4-cents on the week, and 26 1/4-cents above a year ago. Barrel closed at $1.44, down 1 1/2-cents on the day, up 6 1/2-cents on the week, and 27 cents above a year ago. Three cars of block traded hands on the week and nine of barrel. The NASS-surveyed U.S. average block price lost 1 1/2-cents, hitting $1.2866. Barrel averaged $1.3003, up 1.1 cents.

 

Butter closed Friday at $1.50, up a half-cent on the week and 29 1/2-cents above a year ago. Three cars were sold. NASS butter averaged $1.4524, up 0.1 cent.

 

Cash Grade A nonfat dry milk closed the week at $1.2650, up 4 cents, while Extra Grade closed at $1.19, up 2 1/2-cents. NASS powder averaged $1.0657, up 1.4 cents, and dry whey averaged 38.22 cents, up 1.3 cents.

WASDE: Milk Production Estimate Raised Again

(April 9, 2010) The Agriculture Department has raised its 2010 milk production forecast again in this month’s World Agricultural Supply and Demand Estimates report issued this morning, based on a reduced herd reduction from last month. Output is now projected to hit 189.9 billion pounds, up 400 million pounds from last month’s estimate, and compares to 189.3 billion produced in 2009.

 

Dairy exports on a skim-solids basis were lowered due to weaker-than-expected sales early in the year. Both fat and skim-solids basis imports were reduced from last month due to weaker-than-expected imports of cheese, the report stated. Fat and skim stocks were forecast higher for 2010 as cheese stocks have not declined as expected.

 

Product price forecasts were generally lowered from last month as milk production was forecast higher and demand is weaker than expected. The cheese price was reduced as stocks remain high, according to the report, but the butter price forecast was unchanged “as stronger prices in the first half of the year may largely be offset by lower second-half prices as butter production increases.” The nonfat dry milk price was forecast lower as export demand lags and the whey price was lowered slightly.

 

The 2010 Class III milk price forecast was lowered due to lower cheese and whey prices and is expected to average $14.10-$14.60 per hundredweight, down from the $14.20-$14.80 projected a month ago. The 2009 average was $11.36.

 

The Class IV price was also lowered to $13.40-$14.00, down from the $13.65-$14.35 range expected last month. The Class IV averaged $10.89 in 2009. The all milk price for 2010 is forecast at $15.45-$15.95.

 

Several Proposals To Create Supply  Management Progam

(April 9, 2010) After peaking in January, a three-month decline in milk prices has increased efforts to create a nationwide milk supply management program. Dairy Profit Weekly editor Dave Natzke reported Friday that low milk prices continue to stress dairy farmers nationwide, resulting in several proposals to create a supply management program.

 

Meetings in Vermont and California in the past week each attracted about 200 farmers, industry and political leaders to discuss efforts to control milk supply and stabilize milk prices, Natzke reported. The California meeting featured Democratic Congressman Jim Costa (D-Fresno), who is drafting a bill to establish a mandatory supply management program.


Under a preliminary draft of Costa's bill, a producer board and the U.S. secretary of agriculture would establish allowable quarterly milk production levels for each dairy, as well as a market access fee, based on historical production levels, a milk-feed price index, and other milk marketing factors. Dairy farmers who surpass their assigned milk production level would have to pay the market access fee on that excess milk, with the money shared with all producers who stay within their assigned production levels for the quarter.

 

The nation’s largest dairy cooperative, Dairy Farmers of America, and the Midwest's largest dairy co-op, Associated Milk Producers Inc., have embraced some form of supply management, according to Natzke, but not any specific proposals. One of the largest dairy co-ops in the Northeast, Agri-Mark, has drafted a proposal of its own, called "marginal milk pricing,” he said, and several other plans have been developed. A University of Cornell study comparing various proposals is expected at the end of May.


Support of a mandatory supply management plan is not universal, Natzke warned. Opposition is strongest in the Upper Midwest, he said, which is seeing a dairy resurgence and a recent meeting of farmers in Idaho’s Magic Valley found nearly two-thirds opposed a government-mandated supply managed program.

Time For Balance, Not Balancing
(April 8, 2010) As dairy farmers continue to struggle financially, National Milk CEO Jerry Kozak posed a question on the Federation’s website regarding a “sacred cow” in the dairy industry, if you’ll pardon the pun, namely the dairy price support program. Entitled “Time for Balance, Not Balancing,” NMPF’s Chris Galen said in Thursday’s DairyLine that a variety of U.S. dairy policy is going to be reassessed in the next year or so.

 

He said that many believe the program should be eliminated and the resources that the government has devoted to it should be shifted to a new income protection program that would provide a better safety net for dairy farmers.

 

“The price support program has worked well historically,” Galen admitted, “But, I think in the past decade; it has become clear that it’s time for a new approach.” He explained that the program is not being administered effectively and companies often chose not to sell product to the government, particularly cheese, and the product that does get sold to USDA is nonfat dry milk.

 

 “Milk that U.S. farmers produce,” Galen argued, “Rather than being sold commercially either domestically or internationally, gets sold to government warehouses where ultimately it does get returned to the market in one way, shape, or form.” National Milk doesn’t think that’s the best way to handle the occasional surplus, he said.

 

The price support program also acts as a disincentive to product innovation, Galen charged. “We have processing plants that are designed to produce nonfat dry milk simply to be sold, at least sometimes, to the government rather than that milk be processed into things that the market actually wants,” he said, “So that’s not the most effective way to conduct business.”

 

The program also supports dairy farmers around the world, not just U.S. farmers, according to Galen, “because other countries, particularly farmers in Australia and New Zealand, benefit from the price protections of our price support program.” Kozak’s editorial is posted on our website at www.dairyline.com under the dairy news link for April 8.


Be Prepared

(April 7, 2010) IDFA’s Peggy Armstrong, said in Wednesday’s DairyLine that the dairy crisis drill last Wednesday brought about 90 people to Seattle, and called it a “terrific day and a great learning experience.” She added that a lot of strong relationships were built there which is key to working effectively in a crisis.

 

She said the drill was important because the industry needs to effectively respond in any food safety crisis and to have a plan in place so all the players across the industry understand the importance of a plan. Many organizations already have plans in place, she said, so those people who attended the drill were able to practice their skills.

 

“The more you plan and think through what is unthinkable, the better prepared you are,” Armstrong said.  Research shows that the organization that plans for crisis, recovers two to three times faster than one that doesn’t so our goal is to really be ready for anything.

 

She admitted that the drill forced people to work with people they never met before. That doesn’t happen in the real world but questions and changes come to you very very quickly during a real crisis so we want to make sure people understand that and are prepared.

 

Two words remain in my thinking process from my short stint in the Boy Scouts as a kid; “Be Prepared,” a bit of wisdom that has served me well over the years. I thought of that and was reminded of the old fashioned “fire drills” we used to have in grade school as I participated in a “dairy crisis drill” in Seattle the last day of March, hosted by Dairy Management Incorporated and the International Dairy Foods Association. I literally saw farmer and processor check off dollars at work!

 

There were about 90 participants from several states, made up of dairy processors, state and regional check off staff, state Ag department people, a Food and Drug Administration official, and three real live FBI agents, one of which even handed me a Haggen daz bar, another topic for another day.

 

Attendees were divided into small groups and assigned to fictitious dairy companies where various titles, job descriptions, and roles were given. I was an “imbedded reporter.”

 

So far so good until a news bulletin reports a large outbreak of Staphylococcus Enterotoxin B (or SEB if you’re a TV or radio announcer). Board members are summoned together to discuss the news accounts that soon start pointing to dairy as a possible suspect until the “you-know-what really hits the fan.” Those familiar with the story of Job know that bad news often comes in waves and such was the case in our “drill,” or should I say “grilling.”

 

Just as the board members are trying to decide how their company will respond to calls from consumers and the media regarding their company brand and any implication it may have in the ongoing crisis which is escalating. board member blackberries and e-mails are coming fast and furious and the public wants to know if it’s safe to eat your dairy products. There’s no passing the buck in a crisis when you’re up to your, you-know-what in alligators.

 

Several of these “officials” had to face me and media colleague Kate Sander of Cheese Market News in mock news conferences where Kate and I role played as aggressive reporters trying to get the story for our readers and listeners.

 

I refrain from further details so as not to give too much away for upcoming future drills like this around the country but I’m confident the drill drove home the point that, while this was a fake exercise, it was a realistic one and one that could one day, God forbid, really happen. What would your dairy cooperative do in such a case? Does it have a plan in place, ready to go?

 

These CEOs and board members will be the ones to defend your cooperative and its dairy farmer members in such a situation and I couldn’t help but think that I’d sure want a competent, qualified, trained person to answer the press’ tough questions, instead of the janitor or a milk truck driver.

 

The training was tough, intensive, and probably cost a few bucks to put on. But, in the spirit of “Boy Scout preparedness,” is vital in the world we live in today. Thankfully, the dairy industry has been pro active for some time in this area and has a Dairy Communication Management Team in place made up of Dairy Management Incorporated, the International Dairy Foods Association, U.S. Dairy Export Council, National Milk, and MILKPEP so the industry can, as was pointed out; speak with one voice, respond only when dairy is called into question, and follow the government’s lead in such events.

 

The Tylenol Company laid the right response ground work in the nightmare it went through years ago, a nightmare that the CEO and board members of Toyota have surely learned of late. Airlines have done these drills for years. Is your cooperative prepared?

 

Market Talk with Alan Levitt
(April 6, 2010) The big question post Easter is will the run up in cheese prices hold. Dairy producers saw a big cut last week in their farm gate Class III milk price. Alan Levitt, editor of the CME’s Daily Dairy Report, pointed out in Tuesday’s DairyLine that the Class III will be at the lowest level since September so profitability will be down in March and at the lowest since last fall, but the loss maybe offset some by lower feed prices. He said there were actually three positives last week.  

First, a bearish USDA plantings report sent corn prices down as May corn futures dropped to the lowest level since last September, Levitt reported.

 

Secondly, international markets are starting to improve. Overseas buyers are getting nervous about supply and availability for the second half of the year. They saw an unusually cold winter in Europe, Levitt said, which put a dent in their spring flush, and a draught in Oceania has left their production flat for the current season, he said, which is winding down. Oceania suppliers say they’re mostly sold out for the rest of the marketing year, Levitt reported, and that strengthened the U.S. nonfat dry milk market and added bullishness to the outlook.

 

Thirdly, the cash cheese market shot up sharply last week. Sellers have had almost nothing to offer, Levitt said, and the price has strengthened mostly on unfilled bids so “Hopefully, it’s sustainable though not that much has changed fundamentally.” We still have pretty strong cheese production and pretty heavy inventories, he said, “So we don’t know if the strength was just pipeline filling.”

 

He doesn’t see cheese taking off like it did a couple years ago. Consumers are still in a value mindset, according to Levitt. He reported that Wal-Mart, this month, announced that it was reducing prices on 10,000 items so he doesn’t think people are willing to pay what took place a couple years ago. He looks for stronger prices but not the kind of run ups we have seen in the past.  

 

I Keep My Cows Comfortable

(April 5, 2010) Pennsylvania dairy producer Paula Meabon talked with DairyLine’s Bill Baker about the reasons she is involved with the National Dairy Board at this year’s World Ag Expo in Tulare. California. That interview aired on Monday’s “DMI Update” and Meabon pointed out that she was asked to serve about six years ago and she readily agreed.

 

She said she loves dairy farm living and knows that promotion is an important part of that life and urges farmers to “tell their story” instead of letting the neighbors do it.

 

“I keep my cows comfortable,” Meabon said, “With fresh feed, fresh water and I want consumers to know that; why would I treat my cows badly. They’re my bread and butter.” She said it’s why farmers need to tell their story and treat their animals like they should be treated.

 

A lot of assumptions are made and bad press can put dairy farming in a bad light and sometimes you have seven seconds to defend yourself. Meabon stresses that “We treat our cows like they should be treated. They’re our family. My calves are my babies and, if I treat them kindly, they know who I am when they grow up and, if they get loose, all I have to do is call them and they come. Sometimes you can’t even call your children to come.”

 

“As a dairy farmer, we have to keep our cows healthy so that they can produce nature’s most perfect food and that’s what we do on our farm,” she concluded.

 

March Federal Order Benchmark Milk Price Drops $1.50
(April 2, 2010) The March Federal order benchmark milk price dropped $1.50 Friday as the Agriculture Department announced the Class III manufacturing grade milk price at $12.78 per hundredweight (cwt.). That’s still $2.34 above the level it was a year ago but $5.22 below March 2008 and pulls the 2010 average down to $13.85. That compares to $10.18 at this time a year ago and $18.12 in 2008. The Class IV price is $12.92, up 2 cents from February, and $3.28 above a year ago.

 

Class III futures portend another small drop in April, which settled Thursday at $12.72. May rebounds to $13.28, June $14.00, and July at $14.49, with a peak of $15.08 in September before beginning the traditional seasonal decline.

 

The NASS cheese price averaged $1.3632 per pound, down 14.8 cents from February. Butter averaged $1.4388, up 7.8 cents. Nonfat dry milk averaged $1.0454, down 3.6 cents, and dry whey averaged 37.61 cents, down 1.6 cents.


CLASS & COMPONENT PRICES:

COMMODITY            

March 2010 Feb 2010 Jan 2010

Class II Milk Price

$14.46 cwt. $15.65 cwt. $15.22 cwt.

Class II Butterfat Price

$1.5417 lb. $1.4474 lb. $1.4475 lb.

Class III Milk Price

$12.78 cwt. $14.28 cwt. $14.50 cwt.

Class III Skim Price

$7.68 cwt. $9.57 cwt. $9.80 cwt.

Class IV Milk Price

$12.92 cwt. $12.90 cwt. $13.85 cwt.

Class IV Skim Milk Price

$7.82 cwt. $8.14 cwt. $9.13 cwt.

Butterfat Price

$1.5347 lb. $1.4404 lb. $1.4405 lb.

Nonfat Solids Price

$0.8688 lb. $0.9043 lb. $1.0148 lb.

Protein Price

$2.1311 lb. $2.7066 lb. $2.7916 lb.

Other Solids Price

$0.1823 lb. $0.1992 lb. $0.1946 lb.

Somatic Cell Adjustment Rate

$0.00068 per 1,000 cells $0.00076 per 1,000 cells $0.00077 per 1,000 cells
PRODUCT PRICE AVERAGES March 2010 Feb 2010 Jan 2010
Butter $1.4388 lb. $1.3609 lb.  $1.3610 lb.
Nonfat Dry Milk $1.0454 lb. $1.0812 lb. $1.1929 lb. 
Cheese $1.3632 lb. $1.5110 lb.  $1.5374 lb
Dry Whey $0.3761 lb. $0.3925 lb.  $0.3880 lb.
 

Good News For Future Dairy Feed Prices
(April 2, 2010) Several USDA reports were released this week and provided some good news for future dairy feed prices, according to Dairy Profit Weekly editor Dave Natzke. He reported in Friday’s DairyLine that “While March closed with lower milk prices, dairy farmers may find some solace in the fact feed prices may also be lower.”
 

USDA’s monthly Ag Prices report issued March 30, estimated that March all milk prices averaged $15.10 per hundredweight, down 80 cents from February. That decline offset decreases in corn and soybean prices, according to Natzke, meaning the income margin over feed costs was lower.

 

Dairy farmers received better news the next day regarding feed prices from USDA’s 2010 Planting Intentions report and updated monthly Grain Stocks estimates.

 

The Planting Intentions report shows U.S. growers will plant nearly 89 million acres of corn this spring, up about 3 percent from both 2008 and 2009. In addition, this year's soybean acreage is estimated at about 78 million acres, up less than 1 percent from last year, but still the highest total on record.

 

Looking at grain remaining in storage from 2009, USDA estimated there were about 7.7 billion bushels of corn and 1.3 billion bushels of soybeans stored in all locations as of March 1. Those estimates put the corn inventory up 11 percent from a year ago, but the soybean inventory down about 2 percent.

 

Reaction to all this information on the Chicago Mercantile Exchange pushed both corn and soybean futures prices lower through the end of 2012, Natzke reported, “providing good news for dairy farmers who must buy feed.”

 

The Planting Intentions report indicated 2010 U.S. hay acreage will be up about 1 percent from last year. And, for dairy farmers looking to feed cottonseed, cotton acreage is expected to be up 15 percent from a year ago, he said, concluding with the caveat, “Of course, Mother Nature still has lots to say regarding the 2010 crop harvest, but for now, the news appears better for dairy farmers.”

February Dairy Products Report
(April 1, 2010) The Agriculture Department’s February Dairy Products report puts butter production at 141.1 million pounds, down 21 million pounds or 12.9 percent from January and 4.6 million pounds or 3.1 percent below February 2009.  

Mozzarella cheese output totaled 260.7 million pounds, down 24.3 million pounds or 8.5 percent from January, but 13.3 million or 5.4 percent above a year ago.

 

Total Italian type cheese, at 332.8 million pounds, was down 29.9 million pounds or 8.3 percent from January, but 12.9 million or 4 percent above a year ago.

Cheddar production totaled 242.8 million pounds, down 23.8 million pounds or 8.9 percent from January, but up 1.3 million pounds or 0.6 percent from a year ago.

American type cheese amounted to 318.9 million pounds, down 28.7 million pounds or 8.2 percent from January, and down 1.9 million pounds or 0.6 percent from a year ago.

Total cheese output came to 777.2 million pounds, down 64.4 million pounds or 7.7 percent from January, but 7.4 million pounds or 1 percent above a year ago. 

Milk Feed Price Ratio is 2.26
(April 1, 2010) The March Milk-Feed Price Ratio is 2.26, down from February's revised estimate of 2.35, according to USDA’s “Ag Prices” report issued this week, and compares to 1.56 in March of 2009. 
 
The All Milk Price was estimated at $15.10 per hundredweight, down 80 cents from last month's estimate, but $3.30 above a year ago. 

Corn averaged $3.49 per bushel, down 6 cents from February, and 36 cents below a year ago. The soybean price, at $9.16 per bushel, was down 25 cents from February, but 4 cents above a year ago. Alfalfa baled hay was $111.00 per ton, unchanged from February, but $27.00 below a year ago.