March 2010 Archived Dairy News   Latest Dairy News

March 31, 2010
Make Mine with Everything
California March Class 4 Prices Announced
Raw milk bill advances to full Assembly vote
Adjusting cow udder for milking robot not allowed
Calves from decades-old frozen semen born at LSU AgCenter
Ag/Dairy Days fill Pa. farmers with inspiration and ideas for the future
Hillsborough boy and partner win 4-H Club dairy cow clipping contest
March 30, 2010
Cash Cheese Starts The Week With Nice Increase
Dairy Market Report for March - Roger Cryan, NMPF
CWT to Help Export 2.1 Million Pounds of Cheese  
Dairies getting 'squeezed' by processors, retailers
Dairy farmers seek assistance
US investigator hears NY milk price complaints
It takes a lot of work to produce 3 million pounds of feed
Cargill Generates Sustainable Biogas from Cow Pies
A Clash Over Unpasteurized Milk Gets Raw
8,000-cow dairy farm planned for UK
Deitz ‘moo’ved by working on dairy farm
Cheesemaking in Nepal: Dairy farmers at the top of the world
March 29, 2010
Nate Wilson: Washington’s inaction threatens U. S. dairy farmers
Governor Strickland tours area farms
Lindsay dairyman wins stewardship award
Fuel Up to Play 60
West Coast dairy farmers find lower costs, space in Iowa
Milk Producers Council update
Western United Dairymen update
Alliance of Western Milk Producers update
FDA Takes Action Against New York Dairy Farmer
Dairyland diversity: Immigrant work force growing in FdL County
Wyoming County Farmer Cited for High Antibiotic Levels in Cows
Saudis look to purchase Vermont dairy cows
4-H Members Take Part In Dairy Bowl Competition
March 26, 2010
Dairy Market Weekly Recap
Emotions Mixed at DFA Annual Meeting
Arcuri Fights For Upstate New York Dairy Farmers
CME to launch milk powder futures ahead of NZX
Pakistan shows promise for dairy investment
Forgey Named Indiana Dairy Producer of the Year
March 25, 2010
March Penn State Dairy Outlook Available
CWT Reactivates Export Assistance on Cheddar Cheese
Wisconsin Farmers Union Delegates Back Dairy-crisis Solutions
Cal Poly 12th Annual Dairy Ingredients Symposium is a Success 
Students Sickened by Tainted Milk 
There’s a reason most calves are born in the spring
Professional Dairy Managers of Pennsylvania events
Jersey Organizations Allocate $50,250 for Jersey-Specific Research in 2010
North American Intercollegiate Dairy Challenge To Host 120 Students from 30 Universities
World Dairy Expo Announces 2010 Honorees
March 24, 2010
Hearings to Focus on Changes to Water Permit Rules for CAFOs
A Key Season For Beef Sales is Approaching
Dairy Farmers of America reports profit jump on lower costs
Dairy Situation & Outlook
Sioux County dairy agrees to fine for manure discharge
Wet, muddy conditions can lead to lameness in dairy herds
Editorial: Give consumers, farmers choice on raw milk
Dairy Cows watching large LCD TVs
Australia - Co-op simplifies milk payments
March 23, 2010
Market Analysis with Brian Gould
Dairy Operation Fined for Improper Waste Release
Divine Dairy: UVM undergrads have a cow
Power County Sends Animal Ordinance Back To Be Re-Written
NZ: Fonterra "no threat" to American farmers 
LeRoyan is new Genesee Co. Dairy Princess
March 22, 2010
Cheese and Butter Stocks Up Seasonally
Exploring Raw Milk Controversy in Other States
July 1 is Deadline to apply for Jersey Youth Scholarships
June 1 is the deadline for Jersey youth to enter TalkJersey
Western United Dairymen update
Milk Producers Council update
Trying to Make Sense of What's Happening on the CME by John Kaczor
Alliance of Western Milk Producers
Op Ed: U.S. Dairymen - Sold Out
Supporters Push For The Federal Milk Marketing Improvement Act of 2009
This Week in Dairy Profit Weekly
Inflammation and Behavioral Changes in Cattle, by Mark F. Spire 
Despite injunction, raw milk still flowing in B.C.
Dairy Producers Invited to Participate in Social Media Webinar  
Domino's and Schools Part of Dairy Checkoff Relationship
Dairyman employs technology instead of people for daily chores in his barn
Grant will help develop small-farm manure digester
Dream of New Business Inspires Creamery
MO: Camp teachers youth about cows
Robert Townsend Voyles Sr.: 83: Management consultant; dairy farmer
These Cows are All aTwitter!
Dairy Days offered in Otter Tail County
March 19, 2010
Dairy Markets Weekly Recap
April Federal Order Class I Milk Price Moves Lower For Third Straight Month
Dairy Profit Weekly Update with Dave Natzke
Despite a Smaller Dairy Herd in 2010, Milk Production Will Inch Ahead
CWT Reactivates Export Assistance Program for Cheddar Cheese Sales  
Western Regional Dairy Challenge deemed a success
2010 Base Change For National Dairy Genetic Evaluations
Holsteins get ready for statewide show in Abilene
Building enough ventilation for healthy cows
March 18, 2010
February Milk Production Reverses Seven Month Decline
U.S. Dairy Industry Stands To Profit From Cuba
Welch, Goodman among dairy leaders selected for committee by ag secretary
RSPCA concern over 8000-cow dairy herd
Progressive Agriculture Organization Will Sponsor Bus trip to DC
Editorial: Give consumers, farmers the choice on raw milk sale
Country Breakfast on the Farm: A Fascinating Story
White Paper “Food Economics and Consumer Choice”
Milk flows as Trumbull cash crop
Effort Focuses on Cow Care
Dairy farmer Rohr thinks he's found price solution
Allies in Manure Treatment Announce New System 
Mobile Dairy Classroom visits Rock Creek
March 17, 2010
Timely Topic: Fly Control
Ireland: Get cows outside overnight and cut silage from diet
Schumer Addresses Lack of Competition in the New York Dairy Industry
Feds to talk milk prices with NY dairy farmers
Area dairy farms headed to March 29 meeting to protect their livelihood
Vermont dairy farmer talks about immigration probe
US Senate candidate in Ohio wants dairy labels to show country of origin
Dean Foods credit ratings get a boost
Hard times for N.J. dairy farmers
Local bovine will provide a big benefit overseas
March 16, 2010
Market Analysis with Bill Brooks
Idaho Dairy Exports Are Improving
Texas Dairy Remaining Stable
DOJ/USDA Workshops An Opportunity for Co-ops to Tell Their Story
Arethusa Farm moves dairy operation into historic Bantam firehouse
Here are the Candidates for the Wisconsin Milk Marketing Board
Jersey Association Expands Recording Programs
Pro-Act Biotech and EcoSolutions Join Forces
March 15, 2010
Projected MILC payment for April is up slightly
New Mexico Dairy Producers: New Approach to Federal Milk Pricing
Milk Producers Council Weekly Update
Alliance of Western Milk Producers weekly update
U.S. to Enforce Antitrust in Farming, Holder Says
Labeling, aid won't stem losses
John Kinsman: Taxpayer-subsidized manure digesters stimulate factory farm pollution
Many lawmakers shy away from immigration issue
Farm Bureau's dairy committee chair testifies against raw milk bill
S. Idaho commissioners approve dairy waste change
USDA’s new graze: Organic dairy cows need outdoor time
Telling Our Story
This Week in Dairy Profit Weekly
Marshall County celebrates National Agriculture Week
March 12, 2010
Dairy Market Weekly Recap
Feed Outlook: Lower Corn Prices, But Soybeans May Be Different Story
NMPF Testifies at House Hearing in Favor of More U.S. Dairy Exports to Cuba
Hundreds show up to support raw milk sales
Concern Over Anti-Competitive Practices in New Zealand’s Dairy Industry
FL: Milk prices sour dairy farm
TX: Dairy leaves city for country expansion
Dairies aim to foster humane treatment of cows
Dairy “COW”reers Day: Lots of career options in dairy field
Cow tweet it is: Now the cows are on Twitter
World Dairy Expo’s Board of Directors approved four new members
March 11, 2010
Import Watch
National Dairy FARM Progam
Gillibrand wants COOL on all dairy products sold in nation
Pros & Cons of Raw Milk Bill Voiced During Public Hearing
WI: Dairy herd reproduction update to be held
Dairy farmers study purchase of Mandan cheese plant
March 10, 2010
Dairies launch statewide animal care initiative
California Class I Announced
WASDE: Milk Production Estimate Raised
Dairy Farms Are Important Part of a Local Economy
Guest Editorial by Arden Tewksbury, Pro Ag
What kind of a cow will you be milking in 2015?
Alaska cheese makers seeking lesser regulations
Palin's dairy rescue continues
ID: New Plymouth farmer recognized at Ag Summit
NY: Firefighters still on scene of Dairy Farm fire, 24 hours later
TX: Plano dairy farm seeing increased demand for raw milk
High-priced dairy sale 'boosts case' for Parmalat
March 9, 2010
Forecasts May Have Been Too Optimistic
Dean Foods won’t comment on buyout rumors
AK: New state dairy regulations irk small producers
NC: Agriculture Awareness Week stakes claim on the Brickyard
NY: Dozens of cows killed in Westmoreland barn fire
Female Athletes From Strength to Strength, with Milk – New Studies
Ruprechts honored by dairy group
UK: Cattle ID: Know the rules or face SFP cuts
March 8, 2010
Gillibrand backs law on dairy labeling
NY: Commissioner Asks USDA to Consider Class I Floor for Milk Prices
New York's Dairy Industry in Crisis
Dairy Innovation Center Brings Leaders Together
Western United Dairymen update
Milk Producers Council update
Idaho Dairy Focus - March 2010
This Week in Dairy Profit Weekly
NFFC: Dairy Farm Families Need Help
Tom Krajewski: Require digesters on large dairy farms
Organic dairies facing price cuts
Organic Dairymen Video
Never confuse a bison with a dairy cow
International Dairy Show - Sept. 13-15 in Dallas
Elanco Announces Micotil^® (tilmicosin injection) Offers Important New Label Updates
Arm & Hammer Animal Nutrition Announces Upgrades to AHDairy.com Web Site
Charm Sciences Introduces New Rapid One Step Assay for Streptomycin in Milk
March 5, 2010
Federal Order Class III Milk Price Slips 22 Cents
World Dairy Market Holds Great Potential For U.S. Dairy Producers
February Dairy Market Report
MILC Updated
USDA launches interactive atlas comparing food and health
WI: Keep a careful eye on mega-farms
Rest key to happy cows
March 4, 2010
USDA's Producer Handler Rule Levels the Playing Field
MSU dairy facility garners silver LEED certification
Yogurt plant coming to Statesville
Elanco Announces Micotil^® (tilmicosin injection) Offers Important New Label Updates
China woos Aussie dairy farmers at conference
March 3, 2010
TV Spots Remind Mothers To Serve Milk To Their Children
Jerry Kozak: It's the Margin, Stupid  NMPF News For Co-Ops
CWT Strategic Planning Effort Expanded
A stink in Central California over converting cow manure to electricity
Cull Cow Market
Domino’s Delivers Hopeful Signs For Dairy Producers
March 2, 2010
January Dairy Products Report
Cash Cheese: Too Soon To Tell If We Hit Bottom
California February Class 4 Prices Announced
Can Dairy Prices Be Changed
Brown County dairy settles water pollution suit filed by state
2009 Was Tough Year for State Dairy Producers
Land O'Lakes, Inc. Implements Oracle's JD Edwards EnterpriseOne
WA: Young dairy farmer follows his dream
March 1, 2010
USDA Final Decision on Large Producer Milk Bottlers Levels Playing Field 
Western United Dairymen update
Milk Producers Council update
This Week in Dairy Profit Weekly
Idaho Legislature rejects raw milk rules
TX: Dairy reaps benefits of raw milk movement
MN: Public comment period ends on Excel Dairy permit request
NY: Bion Promotes Cattle/Energy Proposal for Oswego County
Final Trade Numbers Are In
Health Study: Other Conditions May Mimic Lactose Intolerance
Dairy Producers Learn How Sleeping With Their Business Partner Affects Productivity
Scours prevention tips for dairy calves offered
PA: Team of Conrad Weiser students judged best at judging dairy cows
SD: Beef, dairy artificial insemination school
CA: Around Tulare: Dairyman Joey Fernandes named to board of state Dairy Council
WA: Smith Brothers dairy celebrating 90th anniversary in tight industry

New Research Challenges Assumptions Regarding Global Warming and Agriculture
(March 31, 2010) New research challenges assumptions regarding animal agriculture and global warming. This is an important topic that could have far reaching ramifications for farmers everywhere and was addressed by National Milk’s Chris Galen in Thursday’s DairyLine. He said it’s an issue that has been used to “beat up” production agriculture, particularly producers of milk, meat, and eggs as being major contributors to green house gas emissions and potentially global warming.  

A report from the United Nations a few years ago claimed that 18 percent of all greenhouse gases around the world were caused by livestock, Galen reported, but “fortunately the pendulum is finally swinging.” He cited a researcher at the University of California at Davis, Dr. Frank Mitloehner, who has data showing that the study others cite as the reason to become vegetarians has miscalculated livestock’s contribution to global green house gas emissions.

UN researchers had calculated everything that goes into livestock production, Galen said, including fertilizer, cropping, and transportation but when they looked at utilities and automobiles, they didn’t look at steel, mining, and oil refining and all the things that contribute to green house gases when you drive a car or use other forms of transportation so “they were really comparing apples to oranges.”

“We in livestock were aware of this,” Galen argued, “But didn’t necessarily have the same bully pulpit but now we have a respected researcher who is basically saying, while the emperor may not have no clothes, his clothes are a lot different than what the United Nations has said.” The other good thing, according to Galen, is that the UN researchers have admitted that their study is flawed.

“This will give us good ammunition to shoot back at some of the critics who cite livestock production as a major source of environmental evil and a major contributor to green house gases,” Galen concluded, “Because now we have a different perspective coming from the main scientific body that was trying to get everyone to go vegetarian in the first place.”

“In our increasingly inter connected world, the price of commodities is dependent upon a wider range of factors than ever before,” Kurzawski explained. The conference therefore will address dairy, feed grains, meats, livestock, soft commodities, interest rates, currencies, precious metals, global weather patterns, as well as upcoming legislation, and regulations that will influence agriculture.

The conference will have a wide reaching range of information, he said, plus some focused presentations on risk management but attendees will include everyone from dairy producers to multinational food corporations, he said, so you can go too in depth with risk management strategies in a conference made up of such a diversity of people but it’s helpful to put these people together and they will come from throughout the country and the world. For more information, log on to www.dairy.nu and click on the Outlook Conference 2010 link.

California March Class 4 Prices Announced
(March 30, 2010) California’s March 4b cheese milk price was announced this afternoon by the California Department of Food and Agriculture at $11.13 per hundredweight, down $1.82 from February, but 68 cents above March 2009. The 4a butter-powder price is $12.84, unchanged from February, but $3.17 above a year ago. 

Alan Levitt, editor of the CME’s Daily Dairy Report, said in Tuesday’s broadcast that, once the prices got down to the mid $1.20s, it “gave buyers the green light to come back off the sidelines.” He suspects they were waiting until they felt the price had bottomed out.

The blocks have gained over 7 cents in the last week, he said, and he finds it “encouraging that the sellers are the ones who have moved off to the sidelines and the prices have increase on unfilled bids.”

“The higher prices aren’t generating any sales,” Levitt reported, “Which means, the next day, buyers are going to come back and maybe bid it up even more,” though he warned that he’s cautious.

Increases in the commodity prices and milk futures are encouraging, he said, but “It’s going to take a sustained rally in the cheese market to keep futures from falling back again. The futures are still priced at a premium compared to where cheese prices are today.”

Buyers recognize that there’s a lot of cheese in storage, running about 10 percent above a year ago and “this is the time of year when you’re continuing to build stocks.” Spring is starting to hit in the upper Midwest, according to Levitt, with milder weather, “so we’re seeing a seasonal increase in milk volume.”

Production is also trending higher in California, Levitt reported, although the volume is still below a year ago because they have a lot fewer cows in the herd. Other parts of the country are also seeing their spring flush so he said it may be a while before we can say that things have fully turned the corner but “it’s certainly encouraging.”

Levitt predicts the March Federal order Class III milk price will be announced Friday at $12.79 per hundredweight. That would be a drop of $1.49 from February but would be $2.35 above March 2009. He looks for a Class IV price of $12.91. That would be a penny increase from February and $3.27 below a year ago.

Fuel Up to Play 60
(March 19, 2010) Washington State dairy producer and DMI Board member Liz Anderson talked about the dairy check off’s “Fuel Up to Play 60” program with Dairy Line’s Bill Baker at the recent World Ag Expo. That conversation aired on Monday’s “DMI Update,” and Anderson pointed out that all 32 NFL teams are partnering with the National Dairy Council in the program.  

“Dairy farmers promote good health, nutrition, and eating right, Anderson said, not only with dairy but also fruits, vegetables, and whole grains to get the kids to eat a good nutritious diet.” The NFL brings excitement and activity to the program, she said, so it “seems like the perfect marriage.”

The program has two parts, fueling and playing. Anderson says you have to fuel your body correctly, likening it to putting gas in the car so it runs and the activity part is kid activated. “They do the things (activities) themselves,” she said, “They come up with the ideas with what they can do to improve the nutrition in the schools by adding a smoothie bar or something or getting a new flavored milk in there, and then they have to come up with some kind of physical activity.”

Assemblies are held at the end of the school year for the winning schools that participated in the program, according to Anderson, and that’s where a lot of the excitement comes in because the schools bring in the NFL players.

Washington State has used Marcus Trufant of the Seattle Seahawks. He is from the Tacoma area, went to Washington State University, and now plays for the Seahawks but he has been wonderful to work with, she said, and appreciates what has been given to him and talks with students and tells them he could not be where he’s at if he didn’t eat correctly and admitted that he drinks a lot of milk and his mom is sitting right there and say yes, he does.”  

(March 26, 2010) Cash dairy prices remain a key focus among farmers, processors, bankers, and related industry suppliers and the news was good this week. The block cheese price gained 5 1/2-cents, closing at $1.3250 per pound, 3 1/2-cents above a year ago. Barrel closed Friday at $1.3125, up 4 3/4-cents on the week, and a penny and a half above a year ago.

Eight cars of block traded hands on the week and 26 of barrel. The lagging NASS-surveyed U.S. average block price fell 5.6 cents, to $1.3344. Barrel averaged $1.3018, down 3.5 cents.

Butter closed Friday at $1.49, up 2 cents on the week, and 30 1/4-cents above a year ago. Only five cars were sold. NASS butter averaged $1.4569, up 2 cents.

Cash Grade A nonfat dry milk gained 3 1/2-cents on the week, hitting $1.15, while Extra Grade held at $1.12. NASS powder averaged $1.0446, up 0.3 cent, and dry whey averaged 37.03 cents, down a penny.

Emotions Mixed at DFA Annual Meeting

(March 26, 2010) Members of the nation's largest dairy cooperative, Dairy Farmers of America, held their 12th annual meeting in Kansas City this week. Dairy Profit Weekly editor Dave Natzke reported Friday that emotions were mixed on a couple of levels. It was the first annual meeting since the death of Colorado dairy farmer and long-time DFA leader Tom Camerlo, so emotions featured the mourning of his passing and the celebration of his life, Natke said.

The other mixed emotion centered on the dairy economy. While dairy farmers suffered through one of the worst years ever in 2009, DFA members heard their co-op’s annual profits rose about 6 percent, to about $65 million.

The co-op marketed nearly 63 billion pounds of milk last year, or about one-third of the nation’s total, but lower milk prices meant the value of sales was down about 31 percent, to about $8 billion. The co-op’s annual average milk price paid to members was $13.05 per hundredweight in 2009, down from $18.60 last year.

Attendees heard from speakers on what's being done to address depressed milk prices, according to Natzke. Dairy Management Incorporated president and CEO Tom Gallagher said the checkoff program was working to address cheese inventories, including helping multiple fast-food and casual dining restaurant chains utilize more American cheese on sandwiches, and increasing use of U.S.-sourced mozzarella in pizza restaurants in the Pacific Rim.

Gallagher also said dairy organizations are pressuring the Obama Administration to purchase more cheese for feeding programs and food banks, offering both the needy and dairy farmers, a “win-win situation.”

He said the American cheese inventory is overhanging U.S. markets, keeping cheese prices low. He also said any bank-forced foreclosures of dairy operations in the coming year were not likely to substantially reduce the nation's dairy herd, but rather move the cows, and production potential, to other dairy operations.

Jerry Kozak, president and CEO of National Milk Producers Federation, outlined major dairy policy considerations currently underway in the Federation’s committees. They include a margin insurance program, with a base plan funded by the government, and a supplemental plan, allowing producers to buy additional coverage through insurance premium payments.

National Milk is also formulating a growth, or supply management plan, with some alterations to proposals already offered by Holstein USA and California's Milk Producers Council, Natzke reported.

The NMPF proposals call for elimination of the current dairy product price support and Milk Income Loss Contract program payments, with money from those programs used to finance the margin insurance. Details of both programs will be available in late spring or early summer, he said.

CWT Reactivates Export Assistance on Cheddar Cheese
(March 25, 2010) As we reported last week, the Cooperatives Working Together program (CWT) has reactivated its export assistance on cheddar cheese. The decision came after CWT’s monthly analysis of dairy markets, according to CWT CEO Jim Tillison in Thursday’s DairyLine. Tillison said that one of the things that the analysis showed is that the issue right now is not too much milk but too much inventory of cheese overhanging the market, negatively affecting prices.  

World cheese prices are above U.S. prices, he admitted, but CWT wanted to provide an incentive to CWT members to “aggressively pursue additional business.” If significant quantities of cheese can be moved overseas, he said, CWT believes domestic cheese prices will climb.

Tillison also admitted the CWT subsidies could impact private sales abroad however the incentive CWT provides is “modest,” he said, is targeted specifically for new business, and CWT doesn’t expect price sales to be affected.

When asked if the incentive might be expanded beyond cheese, he said, “At this point we’re looking only at cheese but certainly, because we re-evaluate on a monthly basis the possibility exists for that decision to be made down the road.”

(March 24, 2010) A key season for beef sales is approaching, namely summer grilling and holidays like Cinco de Mayo and Memorial Day. Texas dairy producer and Texas Beef Council member Jerry Spencer stated in Wednesday’s DairyLine that beef checkoff partnerships and promotions at the grocery store help increase beef demand and put money back in the pockets of beef and dairy producers.

“The great thing about these programs is that all of the coupon redemption costs are covered by promotional partners,” Spencer said. “Our checkoff investment as producers goes toward the creative development and media costs for advertising these promotions,” and he pointed out that, on average, for every dollar farmers invest, the retail partners are put in $5-$10, and “That’s a sizeable return on investment.”

He added that “Partnerships through retail help demonstrate how our producer dollar is stretched to maximize our checkoff investment,” adding that, “Our minimal investment is extending the retail program reach to millions of beef customers for the next few months.” The goal, according to Spencer, is that “through these partnerships and relationships, we can continue to grow demand for our great product and thereby create profit opportunities for producers.”

Some of the upcoming partnerships include: Heinz’s Classico and New York Texas Toast Beef Bolognaise Recipe Promotion, Anheuser-Busch’s Bud Family Hispanic Promotion, Snyder’s of Hanover Promotion, and the Sutter Home Build a Better Burger Promotion.

Each of these promotions features a coupon for beef, he said, whether it’s a mail-in rebate or in-store coupon. The goal of reaching more than 20,000 stores with each promotion is to really drive beef sales during a key time, the summer months, when consumers love to be outside at the grill.

For more information about the checkoff investment, log on to www.mybeefcheckoff.com and for more about summer grilling and the “Safe & Savory at 160 program,” visit the checkoff-funded, www.beefitswhatfordinner.com.

(March 23, 2010) The Monday morning markets were anticipating that afternoon’s February Cold Storage report and were unchanged except for the half-cent rise in butter. The University of Wisconsin’s Dr. Brian Gould said there’s uncertainty in the cheese market regarding inventories which are quite a bit higher than a year ago.

Uncertainty over the export market is another factor, he said, but CWT’s announcement last week that it was reinvigorating its export assistance program for cheddar cheese is a positive sign but typically we don’t export a lot of cheese.

He wasn’t sure that will have as much of a “kick” as their whole herd buyout programs, given the increase in milk production that we saw for February.

Dairy trade has picked up, according to Gould, although it softened in the last quarter of 2009 but we’re a net exporter of dairy products again, except for the first quarter of 2009 and the last quarter of 2008. It’s still soft, he said, and another reason the cheese market and other markets are stable and taking a wait and see approach.

Many viewed last week’s Milk Production report as bearish due to the increase in cow numbers but Gould added that yields are up as well and said he finds it “quite interesting that we’re having increased production at a time when people are having a hard time getting refinancing so, when you couple the international situation with what’s going on domestically in terms of our production, it’s not surprising that we have flat cheese prices.”

Looking ahead, Class III, dry whey, and butter futures portend an increase in cheese prices once we get past the bottom in April, Gould concluded. He sees an increase of a dime or so over the following six months when you look at the implied valuation in those futures prices.
   

(March 22, 2010) February butter stocks totaled 198.1 million pounds, up 29.9 million pounds or 18 percent from January but 6.8 million pounds or 3 percent below February 2009, according to preliminary data in the Agriculture Department’s latest Cold Storage report issued this afternoon. January butter stocks were revised down 1.6 million pounds.

The American cheese inventory, at 597 million pounds, was up 9.3 million pounds or 2 percent from January and 55.3 million pounds or 10 percent above a year ago. January revised estimates were lowered nearly 7.6 million pounds.

Total cheese stocks amounted to 983.6 million pounds, up 10.5 million pounds or 1 percent from January, and 91.1 million or 10 percent above those a year ago. January total cheese stocks were revised down 7.7 million pounds. 

Domino's and Schools Part of Dairy Checkoff Relationship
(March 22, 2010) California dairy producer and Dairy Management Incorporated Board member Brad Scott was back in Monday’s “DMI Update,” in an interview with DairyLine’s Bill Baker at last month’s World Ag Expo. This week he talked about the dairy check off’s relationship with Domino’s Pizza and schools.  

He discussed the latest joint project with Domino’s which involved putting 40 percent more cheese on their pizzas. Scott said they did not lower the cheese percentage on their other pizzas, so it was additional cheese usage, which is great for dairy farmers who want and need more market share.  

The dairy check off is also involved with schools at a time when kids are being attracted to soft drink and energy drinks and Scott said this is another great opportunity that DMI has had to work on and mentioned the “Fuel Up to Play 60” campaign. He said “It’s educating kids that dairy products are good, healthy products that they need to make sure is in their diet, along with exercise.”  

Butter closed at $1.47, up 1 1/2-cents on the week, and 28 3/4-cents above a year ago. Six cars were sold. NASS butter averaged $1.4367, up 2.8 cents.  

Cash Grade A nonfat dry milk closed the week at $1.1150, up a half-cent. Extra Grade held all week at $1.12. NASS powder averaged $1.0490, down 0.6 cent, and dry whey averaged 38.02 cents, down 0.4 cent.

April Federal Order Class I Milk Price Moves Lower For Third Straight Month
(March 19, 2010) The April Federal order Class I milk price will move lower for the third consecutive month. The Agriculture Department announced the base price at $13.22 per hundredweight Friday, down $1.12 from March, but still $2.86 above April 2009. It has averaged $14.36 in the first four months of 2010, up from $11.56 in the same period a year ago, and compares to $18.99 in 2008.  

The Class I base is below the Congressionally-mandated trigger so an MILC payment of at least 21 cents is likely and may be higher, according to National Milk’s Roger Cryan, since April feed costs are now projected to be near the trigger for the feed cost adjustor.   

The MILC rate for May is projected at 17 cents, according to Cryan, and June at 6 1/2-cents. Projected Class I prices are just below projected MILC targets for many of the next 14 months, so that a further weakening of the market below current expectations easily could trigger additional MILC payments, Cryan said.  

The two-week, NASS-surveyed butter price averaged $1.4249 per pound, up 5.5 cents from March. Nonfat dry milk averaged $1.0459, down 9.7 cents. Cheese averaged $1.4049, down 11.3 cents, and dry whey averaged 38.21 cents, down 1.1 cent.

2-week Product Price Averages:

He began by reporting that the Midwest had experienced some unseasonably warm weather this week and that dairy farmers, like everyone else, are ready for spring. But, despite the brighter outlook, the weight of last year's dairy economy still weighs heavily on dairy farmers.   

First, USDA Economic Research Service data shows that the farmer share of retail dairy prices fell in 2009, to a record low. The government index uses 1982-84 as the baseline, according to Natzke, and then compares farm and retail prices changes to those estimates.  

The index of farmer milk prices was just 104 in 2009, up less than four points from the 1982-84 base line, but down down from 145 or 28 percent from 2008 and a record-high 153, or minus 32 percent, from 2007.  

Meanwhile, the farm-to-retail price spread, the difference between the retail price and the price farmers received, was a record high 283 in 2009, up from 270, or up 5 percent, from the year before, and 233, or plus 21 percent, from 2007.  

Comparing retail to farm prices, dairy farmers received 25.3 percent of the retail value in 2009, down from 33.2 percent in 2008 and 37.7 percent in 2007.  

The other set of troubling numbers are Natzke’s annual calculations of gross income from milk sales. Using U.S. monthly milk production and milk price estimates, the average U.S. cow generated about $2,636 in 2009, down nearly $1,100 from 2008, when gross income per cow averaged $3,730. Even though milk production (20,395 pounds.) was up about 181 pounds per cow in 2009, the preliminary average milk price ($12.81 per cwt.) for the year was down $5.48 per cwt. from the 2008 average of $18.29 per cwt.  

“When you total it all up, U.S. dairy farmers saw a $10 billion decline ($1,094 X 9.2 million cows) in 2009 gross income compared to 2008. Early estimates indicate government payments will make up about one-tenth of that loss” he concluded.  

February cow numbers totaled 8.3 million head, up 3,000 from January but 168,000 below a year ago. Output per cow averaged 1,640 pounds, up 35 from a year ago.

California production was down 1.6 percent from a year ago, due to a loss of 65,000 cows. Output per cow gained 35 pounds however. Wisconsin was up 5.7 percent, thanks to 5,000 more cows and 80 pounds more per cow. New York was off 0.7 percent, on 13,000 fewer cows but output per cow was up 20 pounds. Idaho was up 3.7 percent, on 3,000 more cows and a 50 pounds increase per cow. Pennsylvania was up 0.1 percent. Cow numbers were down 10,000 head but output per cow was up 30 pounds. Minnesota was up 1.4 percent, due to 2,000 more cows and a 15 pound gain per cow.

The biggest increase was in Washington State, up 6.9 percent, thanks to 6,000 more cows and a 75 pound gain per cow. Wisconsin was next, followed by Idaho. The biggest decline was in Missouri, down 9.8 percent, due to 6,000 fewer cows and 50 pounds less per cow. Colorado was next, followed by Arizona and Kansas.

Currently, the U.S. market share of dairy exports to Cuba is only about 6 percent, according to Galen, which is ironic considering how close it is, compared to some of the other countries that export to Cuba. Credit restrictions also make it very hard to do business there, he said.  

Because Cuba is only about 100 miles off the Florida keys, it represents an opportunity for the U.S. to grow its export volume. The loss of dairy exports on the world market last year was a big factor in last year’s financial disaster for dairy farmers, he said.  

2008 dairy sales to Cuba amounted to about $13 million, Galen reported, and the U.S. Trade Commission says that, if sales to that country were made easier, we could increase U.S. sales by a three to five fold volume. That would mean an increase in the U.S. share from 6 percent to about 20-40 percent.  

Does that mean dairy farmers will get some cigars in return? “Trade is a two way street,” answered Galen. “Cuba doesn’t have a whole lot of money,” he said, “But there are many other countries that do business there.”  

The U.S. has a geographic advantage , he said, but “the tortured history of the past 50 years has kept the U.S. from taking full advantage of the opportunities but we think it’s now time, after 50 years, to ease some of the restrictions that would make the U.S. a more competitive player in the Cuban dairy market.”  

Timely Topic: Fly Control
(March 17, 2010) Fly control was our timely topic in Wednesday’s DairyLine. Katie Carriker, west coast regional sales manager for Texas-based Central Life Sciences, said now is the time to take steps to minimize fly populations on the dairy. ClariFly is a feed through larvicide put into ration supplements, usually minerals, and fed daily. It’s excreted into the manure, the flies lay their eggs there, but the eggs don’t hatch.  

House face, stable, and horn flies are prime targets of ClariFly, according to Carriker, and sanitation is key. “You can never eradicate all of the flies,” she admits, “But you can control them,” and she pointed out that ClariFly is fairly new so there’s no built up resistance in flies.

ClariFly is just beginning to be made available in the West but has been and is being successfully used in the East and Midwest for confined dairy cattle but other options are available for cattle that are not confined, according to Carriker. Central Life Sciences has products for pasture type operations for either beef or dairy and complete information is available at www.centralflycontrol.com.

Projections are showing a slightly higher Class IV versus Class III price, according to Brooks, so more milk may be go into butter-powder, resulting in a little more supply than is going to cheese, he said, considering the drop in cheese prices, which Brooks believes is close to the bottom. He doesn’t see cheese rebounding real quick but he doesn’t see large declines and perhaps some sideways movement as we work into the spring flush.

He expects February milk production to be similar to the January numbers, down less than 1 percent, maybe a half-percent. Cow numbers are what people will be looking at, he said to see if the milking herd is increasing like in January or was that was a one-month blip.

“Slaughter rates are not real heavy right now,” Brooks said, “And we have a lot of animals that can come into the herd so it wouldn’t be a big surprise if we see the herd continuing to increase a bit.”

He projects the Class I base milk price to come in at around $13.16 per hundredweight. That would be a drop of $1.18 from March but would be $2.80 above April 2009. That will be low enough to trigger an MILC payment of about 23-24 cents, according to Brooks. MILC payments weren’t even expected until recently, he said, but with the drop off in cheese and nonfat dry milk, the base will fall below the $13.69 Congressionally-mandated trigger.

There’s also an outside chance of a feed cost adjustor, he said, based on futures markets but things might change by then, he concluded.  

(March 15, 2010) California dairy producer and Dairy Management Incorporated Board member Brad Scott “told his story” to DairyLine’s Bill Baker at last month’s World Ag Expo and DairyLine listeners got to hear it in Monday’s “DMI Update.” There’s been enough negative press about dairy farms in the past but the Dairy Check off’s “Telling Your Story” program helps farmers defend themselves and their industry.

Scott said he takes every opportunity he can and recommends his fellow producers to do so as well, be a neighbor who stops by, someone at school or church, or someone you see at the super market, or the media itself.

Tell them what you do on your dairy, Scott said, what you do for the environment, how your farming practices are sustainable, how you care for the land and your animals, and how dairy farmers provide good, healthy products for the public.

You don’t have to be invited to a forum, according to Scott, you can do this with anyone you come in contact with. He admits that many people have preconceptions about dairy farming and farmers need to take the opportunity to present the truth about the industry.

Twenty five cars of block traded hands on the week and 35 of barrel. The latest NASS-surveyed block price averaged $1.4378 across the U.S., down 5.4 cents, while barrel averaged $1.3976, down 6.9 cents.

The CME’s Daily Dairy Report points out that USDA data shows fourth quarter 2009 commercial American cheese use was down 2.5 percent from a year ago, thus ending five straight quarters of growth. However American declines were partially offset by stronger use of other-than-American cheese, meaning total cheese use in that quarter was up 1.5 percent.

Butter is, or was, the bright spot. After eight consecutive sessions of gain the butter price gave up 3 cents this week and closed Friday at $1.4550, up a half cent from the previous week and 27 cents above a year ago. Thirty six cars were sold on the week. NASS butter averaged $1.4076, up 5.2 cents. 

Feed Outlook: Lower Corn Prices, But Soybeans May Be Different Story
(March 12, 2010) The 2010 planting season is getting near, but we haven't closed the books on the 2009 harvest season quite yet. Dairy Profit Weekly editor Dave Natzke reported Friday that last fall's weather-delayed harvest forced USDA to re-survey some Great Lakes and Southeast U.S. crop growers in February, and this week’s crop production report lowered 2009 estimates for both corn and soybeans, although just slightly.  

Corn production was lowered 20 million bushels, Natzke reported, but the revised estimate of 13.1 billion bushels is still a record high. Combined with lower expected exports due to large foreign supplies, dairy producers buying feed should see slightly lower corn prices, he said, with the middle of the projected range at about $3.60 per bushel.

The news is somewhat different for soybeans however, with 2009’s production revised at 3.36 billion bushels, down about 2 million bushels from the January estimate. Ending stocks were reduced thanks to increased activity in the export market, and this week’s Senate passage of a biodiesel tax credit could mean more soybeans will be used for fuel production, Natzke warned. USDA put the mid-range season-average soybean price at the farm level at $9.45 per bushel, and a soybean meal price at $295 per ton.

Natzke went on to report that the first of five joint Department of Justice/USDA’s workshops on competition and regulatory issues in agriculture began March12, in Ankeny, Iowa.  DOJ's Antitrust Division chief Christine Varney and U.S. Agriculture Secretary Tom Vilsack were expected to participate.  A session dedicated to concentration and vertical integration in the dairy industry will be held June 7 in Madison, Wis. 

Natzke ended his report with a plug for one of the top dairy producer meetings of the year, the Professional Dairy Producers of Wisconsin annual business conference, March 16-17, in Madison, Wisconsin.

(March 11, 2010) National Milk’s final Import Watch for 2009 reflects the economic situation of the U.S. and the world, according to Jim Tillison in Thursday’s broadcast. Imports of all dairy products except butter and Cheddar cheese were down from a year ago. Butter imports were up slightly from 2008 and 2007, he said, but comparable to 2005 and 2006.

The Import Watch monitors four types of cheese, according to Tillison, and Cheddar showed the only increase from 2008 but was comparable to imports in 2005-2007. Imports of American, Italian, and Goya cheeses were all down.

Perhaps the most significant figure regards milk protein concentrate (MPC) and similar products, Tillison said, and he reported that imports of MPC, casein, and casinates were down significantly in 2009 from 2008 and were at their lowest levels in the last five years.

U.S. manufacturers are also producing more of the products we import. For the first time, USDA’s January report included U.S. production of MPC. Tillison said “That’s significant because it means domestic MPC production is becoming a factor and is hopefully displacing MPC imports with U.S. produced milk.”

Milk Production Estimate Raised

(March 10, 2010) Dairy farms are an important part of a local economy, according to Pennsylvania dairy producer and Beef Council Board member, John Ligo. Ligo pointed out in Wednesday’s “Beef Board Update” that he operates a mid size operation with about 200 cows and grows most of his crops. He pays wages for about 6-8 employees per year, totaling about $150,000 per year, plus taxes etc., so every seven years he pays out about $1 million in wages, he said.

Ligo reported that he pays taxes on a “fair amount of property” of about $20,000 per year or about $100,000 over a five year period. He also points out that his operation is not a great user of municipal services in that they do not require much in the way of police or fire protection and there’s no water or sewer services or other things that residential housing requires.

Revenue per cow on a dairy farm runs about $3,000-5,000, according to Ligo, and compares to about $300-500 per cow on a beef operation. Revenue per acre runs about $1500.00, compared to $350-$450.00 on a grain farm, he said, “So the amount of economic activity is very intense.”

The Pennsylvania Center for Dairy Excellence believes that about $13,000 per cow is returned in local economic activity so a dairy like Ligo’s would account for about $3.25 million worth per year, according to Ligo.

Another benefit of Ligo’s dairy is roadside pickup of litter on four miles of frontage, 1,000 acres of recreation, be it for nature observers, hunters, or fishermen, sweet corn sales, and even a little snow plowing. “We’re proud of what we can do for the local area,” he concluded.

(March 9, 2010) Cheese prices continued to bleed the second Monday of March and Dairy Profit Weekly’s headline that forecasts may have been too optimistic may be hauntingly true. The University of Wisconsin’s Dr. Robert Cropp said in Tuesday’s DairyLine that a seasonal downturn after the first of the year was anticipated but “I don’t think anybody anticipated it to be this low.” He doesn’t think it can go much lower but the government support price is $1.13 on block and $1.10 on barrel.

Cropp said the January Milk Production report did not show a large enough decrease in milk production or in cow numbers, cheese stocks are relatively high, and cheese production is high, but he warned that “This market has to start strengthening some as we move into next month.”

Cash butter on the other hand continues to climb, gaining 2 cents Monday and hit $1.47, driven for the most part by the Easter-Passover holiday demand. Some people are building stocks for the summer, Cropp reported, thinking that supply will be tighter in the summer, there’s been some interest on the export market, and butter stocks are down a little from a year ago.

World nonfat dry milk prices are substantially above U.S. prices, although they have softened from a month or so ago according to Cropp, but likely got a little too high and demand resistance formed.

The main powder exporters, New Zealand and Australia, have not seen the increase in milk production they had expected and world demand has picked up, Cropp concluded, but many in the U.S. expect U.S. powder exports to climb. Exports did improve in October, November, and December from earlier in 2009.

(March 8, 2010) Dairy Management Incorporated’s Joe Bavido completed his series in Monday’s “DMI Update,” outlining the accomplishments of dairy check off partnerships in 2009 in driving dairy sales. He emphasized how important collaboration is and how the Innovation Center for U.S. Dairy brought industry leaders together to “develop action plans which are in line with dairy producer priorities.”

The Innovation Center focuses on health and wellness, he said, product development and information, sustainability, consumer confidence, and globalization. More than 180 companies and 400 individuals were united in this effort, he said, to “protect and grow sales.”

Producers, through the U.S. Dairy Export Council, continued to help protect global markets for U.S. dairy exports, Bavido reported, and more than 9 percent of U.S. milk in 2009 was exported, despite the global economic downturn.

National and local dairy checkoff organizations also helped recruit thousands of dairy producers to tell their story to consumers, Bavido said. Check off staff developed enhanced training workshops that helped dairy producers and allied industries communicate on farm issues, including animal care and environmental stewardship, through community relations, presentations to local organizations, one-on-one conversations, and the newest venue, social media.

“This is just some of the many ways that the dairy check off program has been helping to use partnerships and innovation to drive sales in 2009,” he concluded.  

Thankfully, the butter market remains strong, closing Friday at $1.45, up 4 1/2-cents on the week and 28 1/4-cents above a year ago. Only one car was sold all week. NASS butter averaged $1.3592, up 1.9 cents.

Cash Grade A nonfat dry milk lost a penny on the week, closing Friday at $1.11. Extra Grade plunged 12 cents, dipping to $1.12. NASS powder averaged $1.0448, down 2.5 cents, and dry whey averaged 38.94 cents, down 0.5 cent.

Federal Order Class III Milk Price Slips 22 Cents
(March 5, 2010) The February Federal order Class III milk price was announced by the Agriculture Department this morning at $14.28 per hundredweight (cwt.), down 22 cents from January, but $4.97 above February 2009, and $1.33 above the comparable California 4b price. Class III futures portend a couple more months of loss. The March contract settled Thursday at $12.88, April $12.87, May $13.09, June $13.88, and July at $14.52, with a peak of $15.19 in September October. The February Class IV price is $12.90, down 95 cents from January but $3.45 above a year ago.

The four-week NASS-surveyed cheese price averaged $1.5110 per pound, down 2.6 cents from January. Butter averaged $1.3609, virtually unchanged. Nonfat dry milk averaged $1.0812, down 11.2 cents, and dry whey averaged 39.25 cents, up fractionally.

A centerpiece of the trip was to attend Gulfood, the largest Middle East food trade show which brought food suppliers and buyers from all over the world. They also spent five days meeting with dairy product and ingredient buyers from throughout the Mideast.

“What I found” Natzke said, “Was a region hungry for a consistent supply of U.S. dairy products and ingredients.” The United States lags well behind the European Union, New Zealand and Australia as a supplier of dairy to this emerging market, according to Natzke, and while logistics and prices put many U.S. companies at an economic disadvantage, members of the mission were told that population growth and cultural changes in the Mideast “make the market potential too great to overlook.”

Meeting that market demand will likely mean changes in how U.S. companies address competitive issues, Natzke said, as to what products we produce, and how we conduct business. For example, many U.S. cooperatives produce a lot of nonfat dry milk powder and salted butter, because if there's a surplus, they have a guaranteed buyer in the U.S. government. In contrast, Middle East buyers prefer whole milk powder, he said, unsalted butter, and anhydrous milk fat as ingredients for other foods.

The region is a large buyer of whey protein concentrates to use as in ingredient in other foods, according to Natzke. However, because the U.S. produces a lot of yellow Cheddar cheese, the whey concentrates discolor foods manufactured in the Middle East compared to the whey concentrates derived from the white Cheddar in other parts of the world.

In addition, because the export market is largely seen as a market of last resort for U.S. surplus, U.S. companies often overlook the customer service and personal business relationships necessary to serve this market, he concluded.

The Agriculture Department issued its final decision as to what constitutes a “producer-handler.” National Milk’s Chris Galen reported in Thursday’s broadcast that “It’s the end of a long sought effort to put a lid on the exemption that the largest producer-handlers have enjoyed.”

(March 4, 2010) The Agriculture Department issued its final decision as to what constitutes a “producer-handler.” National Milk’s Chris Galen reported in Thursday’s broadcast that “It’s the end of a long sought effort to put a lid on the exemption that the largest producer-handlers have enjoyed.”

“As farms become fewer but larger,” Galen argued, “If more and more of these self-contained bottling operations owned by farmers would have proliferated, it would have actually lowered prices for the other farms in a given marketing order because these producer-handlers have enjoyed an exemption from the Class I pooling requirements that other commercial bottlers have had applied to them.”

USDA’s rule, which will take effect this spring after being ratified by farmers in the 10 marketing orders, limits the producer-handler designation to farms that bottle 3 million pound of milk or less per month. Any operation producing above that will be subject to the same Class I requirements as any other commercial bottler, he said, “So this creates a level playing field.”

It remains to be seen if any of the affected operations will reduce their size to maintain the producer-handler status but NMPF estimates that there are only about five or six in the U.S. that will be affected and another 35 will remain producer-handlers and thus be exempt, “So it really only affects the very largest of the large producer-handler operations,” he concluded.

(March 3, 2010) Vivian Godfrey marked her one year anniversary as CEO of MilkPEP and talked about it on Wednesday’s “Processor’s Perspective.” She said that one of her most important accomplishments has been making sure that MilkPEP works closely with producer groups such as Dairy Management Incorporated, National Dairy Council, and National Milk to “align our activities and messages.”

She spoke to DMI’s Board the last week of February and members of the National Dairy Council’s state and regional representatives and started by reminding attendees that the single objective of MilkPEP is to encourage American consumers to drink more milk.

She said that they target two main groups where they believe they will have the biggest impact. The first group is mothers with children at home and the second group is teenagers.

“In 2010 we are using the message of Building Strong Families to talk to mothers,” Godfrey said. Two thirty second TV commercials will air for much of the year, plus a single version in Spanish.

“The goal is to remind mothers of the many different ways that they can serve milk to their children and to their whole family,” Godfrey reported, “And why, with its incredible nutrient richness it’s a very healthy choice.”

The second target group is teenagers. Many teens drink lots of milk, she said, but “We see them turning to other choices like sodas and energy drinks so our goal is to remind them about how delicious milk is and how it helps them grow tall and have great skin, teeth and hair.”

There won’t be any TV commercials targeted to teens, she said, but instead will use the Milk Mustache celebrities on posters in schools, magazines, and on the internet.

“Teens especially love our Milk Mustache advertisements featuring sports celebrities,” Godfrey said, “So we were very excited this year for the first time to team up with DMI and the NFL’s Fuel Up To Play 60 initiative for the two Super bowl ads that aired, featuring players from the Saints and the Colts.

“We look forward to continuing to work closely with the Dairy Farmer organizations during 2010,” Godfrey concluded.

Mozzarella cheese output totaled 285.3 million pounds, down 4.6 million pounds or 1.6 percent from December, but 17.2 million or 6.4 percent above a year ago.

Total Italian type cheese, at 363 million pounds, was down 10.1 million pounds or 2.7 percent from December, but 15.1 million or 4.4 percent above a year ago.

Cheddar production totaled 266.6 million pounds, up 6.6 million pounds or 2.5 percent from December, but down 7.5 million pounds or 2.7 percent from a year ago.

American type cheese amounted to 347.7 million pounds, down 1.6 million pounds or 0.5 percent from December, and down 5.5 million pounds or 1.6 percent from a year ago.

Total cheese output came to 842.3 million pounds, down 19.6 million pounds or 2.3 percent from December, but 18.3 million pounds or 2.2 percent above a year ago. 

Cash Cheese: Too Soon To Tell If We Hit Bottom
(March 2, 2010) The first day of trading in March saw cash block cheese hold at $1.34 per pound and barrel at $1.29 but it’s too soon to tell if this is the bottom of the slide that began in early February, according to analyst Mary Ledman, Principal of Keough Ledman and Associates in Libertyville, Illinois.  

Speaking in Tuesday’s DairyLine, Ledman said additional capacity is coming on line from Southwest Cheese in March and could put continued downward pressure on prices but she pointed out that, last week 31 loads of block and 15 of barrel was traded, indicating that people are finding value in this market.

Monday’s trading may have taken a breather, she said, but she anticipates more activity to come but, if we’re not at the bottom, she believes we’re close to it.

In contrast, butter is climbing, jumping a penny and three quarters Monday, to $1.4225. Ledman said Friday was the last trading day for old crop butter and, as of Monday, only butter that had been produced after December 1, 2009 can be traded on the CME.

It’s not unusual for a bump up on March 1, she said, as there’s only a few months of production eligible to be traded and most people are cautious about trading butter early in March because they want to maintain inventories through the Easter/Passover holidays and then build inventory for the second half of the year.

Ledman also pointed to the bearish news in last week’s January Cold Storage report. She was referring specifically to the January 31 American cheese inventory which was up 62 million pounds from a year ago. She called it “burdensome on the market” but added the caveat that that data is product that is expected to be held in inventory for more than 30 days and, given the low cheese price for most of 2009, it was a good time to build inventory for aging programs.

Butter stocks, on the other hand, were down 4 percent or 7 million pounds from a year ago, she said, “So butter is being buoyed by the low stocks.”

Final Trade Numbers Are In

(March 1, 2010) The final trade numbers are in, and as expected, U.S. dairy exports declined in 2009, ending a streak of six straight years of expansion. The U.S. Dairy Export Council’s Margaret Speich, reported in Monday’s “DMI Update” that, from 2002 to 2008, the value of U.S. dairy exports had increased almost four-fold, and overall volume had more than doubled.

But in 2009, dairy exports sales dropped 39 percent, to $2.32 billion. Most of the downturn reflected lower world prices, according to Speich. Commodity prices were 30-40 percent lower in 2009 than 2008. Overall export volume was off just 16 percent, at 2.18 billion lbs. of milk solids. In fact, U.S. exports held up better than we had forecast in January.

“One way of looking at these results is that resilience of our export performance indicates a further maturation of the U.S. industry,” Speich said. “U.S. dairy export volume, overall and in all individual product categories, is significant and high in historic context. In fact, volumes are at levels where exporting is a prerequisite to maintaining a healthy and growing industry.” Export volume represented 9.3 percent of U.S. milk production in 2009, according to the data, down from 11.0 percent in 2008 and 9.8 percent in 2007.

“The biggest concern going forward is that the United States could continue to struggle to become a consistent exporter because we’re still generally guided by a production-oriented mindset, rather than a global-customer-centric one,” Speich concluded. “Unless the United States deals with the fundamental problems that make it the residual supplier to the world, we will remain the last-in/first-out player in base commodities, which accelerates volatility.”