February 2011 Archived Dairy News

February 28, 2011
February Ag Prices Report Released
If You Don't Tell Your Story, Someone Else Will
UK Farmer Resubmits Super Dairy Plan
Western United Dairymen Update
Milk Producers Council weekly update
February 25, 2011
Latest Slaughter Numbers
Dairy Industry Advisory Committee Asks For USDA Research
MN: Dairy Producers Gather For Lobby Day
Dairy Subsidy, Profits Eyed
Vermont Dairy Farmers Celebrating Rising Milk Prices
Oakhurst Dairy CEO Dies From Cancer
Dairy Cattle Killed in Massive Barn Fire
Canada: Dairy Farmer Challenges Ban on Raw Milk
February 24, 2011
MILC Payments Coming For January and February
Feed Budget Could Get A Break on Cottonseed
USDA’s Johne’s Disease Control Program Summarized in Free Booklet
Kohl Supports Bill to Ease EPA Regulation of Dairy Farms
WI: State Senate Okays Dairy & Livestock Tax Credit Extension 
NY: State to help farmers manage market volatility
FDA to Start Testing for Drug Residues on Dairy Farms
Raw milk debate simmers as states, FDA mull rules
Technology Helps Curb Farm Odors
Position Announcement: Manager Jersey Market Service
It’s Show Time! 26^th Annual New York Farm Show
Holstein Foundation Prepares for Young Dairy Leaders Institute
MSU student wins dairy management contest
Pair of cheese producers in running for big award
WA: Dairy Scholarships Offered in Snohomish County
Ribble Valley farmer drops plans Britain's largest dairy
Dairy farmers to Coles: Why increase milk prices in Western Australia?
February 23, 2011
Farm Practices Image Important
Leaders urge consensus before dairy program is rewritten
S&P revises outlook on Dean Foods to negative
Animal Welfare expert prods dairy producers
New group supports legalized sale of raw milk 
Cheese-makers say the snack can come from your kitchen too
WI: Achen, Middendorf among dairy princess candidates
OR: Milking the local dairy issue
Busselton hosts Australian Dairy Conference
February 22, 2011
January Cold Storage Report
CWT Assists with 1.5 Million Pounds of Cheese Export Sales
Market Talk with Mary Ledman
Midwest Dairy Challenge Held in Menomonie
Dairy Producer Eyes Expansion in China
Lifelong dairyman and CSU leader receives award
February Dairy Checkoff Update
Plans for British Super Diary Shelved by Opponents
Many attend Northern Tier Dairy Day at Towanda High School
February 21, 2011
Crisis Preparation System In Place If Needed
Milk Producers Council weekly update
January Milk Production up 2.7%
March Federal Order Class I Milk Price Up $2.34
Vilsack: Livestock and Dairy Sectors at Risk
Strong demand to stabilize grains market
Planting intentions survey points to 14 percent increase in cotton acreage
Vermont Ag Agency Halts Raw Milk Workshops
Saputo Buys U.S. Big Cheese
China on alert for leather protein in milk supply
Dairy regulations still up in the air
Brian Rexing named top dairy producer for 2011
NY: Four area dairy princesses go for state title Tuesday
February 17, 2011
Proposed Budget Could Be Painful
Dairy Industry Advisory Committee Discusses Draft Recommendations
Dean Foods Posts Loss on Charges, Dairy Woes
ID: Jerome sewer pinned on dairy spill
Canada's Saputo to buy DCI Cheese owner
Delegates attend Family Dairies USA 39^th Annual Member Meeting
IA: Dairy Banquet is March 26th
February 16, 2011
Dean Foods Swings To 4Q Loss On Charges, Dairy Segment Woes
Reminder: WMMB Nominations Deadline is February 26
Dairy Farmers Versus Commodity Traders - Arden Tewksbury 
NY Dairy Blaze Kills 150 Dairy Cows
February 15, 2011
Dairy Outlook Released
Market Talk with Alan Levitt 
February 14, 2011
Dairy Farmers React to Fewer Cows and Smaller Profits
Private-Public Partnership Committed to Child Health
Western United Dairymen update
Milk Producers Council weekly update
IA: Fire Destroys Dairy Operation
VA: Dairy Farmers Diversifying
SD: Local Delegation Told That Opportunities Exist in Dairy Sector
Ferreira elected treasurer of California Milk Board
Cotton Inc. Announces Winner of Cottonseed Video Contest
Addressing consumer trust in the dairy industry at PDPW Conference
Reduce Lameness By Providing More Cow Comfort
Milk shortage caused by FMD affecting local industries
February 11, 2011
Dairy Market Weekly Recap
Contract with Producers Unveiled
February MILC Update
Project Goal? To Clean Dairy Air
Direct Dairy Sales Give Some Farmers and Advantage
Raw Milk Farmer's Contempt Hearing Reset
February 10, 2011
California's March Class 1 Prices up $2.36
Implementation of Dodd-Frank Should Preserve Risk Management
Options 
Mid-Week Milk Production Update
USDA Delays Special Drug Residue Milk Sampling
Farmer in raw milk case answers contempt charges
As farmers retire, ag industry calls on youth
FFA Leaves its mark at World Ag Expo
Exhibitors handle the crowds at World Ag Expo
Jerseys are top breed
Dairy cow lameness focus of March workshops
February 9, 2011
USDA Raises Milk Price and Production Estimates
World Ag Expo in Tulare
Farm Market iD Announces Availability of California Grower Data
World Ag Expo Announces Forage Challenge Winners
WI: Seeds of Prosperity for Family and Farm event in March
NCBA congratulates national Beef Quality Assurance winners
February 8, 2011
Dairy Profit Seminars at World Ag Expo
Cash Cheese Prices Continue to Climb
CWT Assists with 5.1 Million Pounds of Cheese Export Sales
Congressman Filner Joins Dairy Farmers Caucus
Snow Buckles Second Barn at Newberry Dairy
Essex dairy farmer hopes to bounce back from barn collapse
New Category Announced for 28th Annual World Forage Analysis Superbowl
Nominees Sought for Wisconsin Milk Marketing Board
I-29 Dairy Conference to be held at the Ramkota Inn in Sioux Falls
Real California Cheese and Chocolate – The Perfect Love Connection
February 7, 2011
MooVision: Helping Those Who Are Lactose Intolerant
Dairy Market Report for January 2011
Western United Dairymen Update
Milk Producers Council update
National DHIA awards $750 scholarship winners
Farmers watch harsh winter crush their livelihoods
Livestock assistance available for losses due to blizzard
Supporters Petition for Federal Milk Marketing Improvement Act
Farm bureau milks cow for history lesson
9 finish Dairy Cow College
2 cows killed in Colrain barn collapse
February 4, 2011
Dairy Market Weekly Recap
Nation's Benchmark Milk Price Slips Some More
News For Dairy Co-Ops
Impact On Prices of Dairy Cows
EAZI-BREED^™ CIDR^® Approved for Concurrent Use with
LUTALYSE^®
Advisory Committee Schedules Final Meeting Via Conference Call
Dairy Crest Says Profits Meet Forecast, "Cautious Next Year"
Indiana Dairy Likes Updated Dietary Guidelines
February 3, 2011
New Dietary Guidelines Both Positive and Challenging For Dairy
Dairy leads 'surge' in food prices to record high
Cows in danger after roof collapse
Dairy farm owner in critical condition after propane tank explodes
A nearly extinct breed – homesteading cheesers
Dairy Pro Offers Food Safety Strategies
Alfalfa vs Corn Silage
February 2, 2011
Far More Consensus in Dairy Industry Today 
State's dairy story gets Super Bowl bump from ESPN
Salmonella Found Inside Minnesota Dairy
Alpharma Launches New Bovatec^® Delivery System for Pasture Cattle
February 1, 2011
December Dairy Products Report
Market Talk with Brian Gould
USDA abandons milk-pricing deal
Milk prices take big jump
New U.S. Dietary Guidelines Urge Less Salt, More Dairy
New program helps ease transition to organic
Minnesota dairy farmer faces contempt hearing
NY: Power discount program to be phased out

(February 28, 2010) The February Milk-Feed Price Ratio is 1.96, unchanged from January, according to USDA’s “Ag Prices” report and compares to 2.36 in February of 2010. 
 
The All Milk Price was estimated at $18.40 per hundredweight, up $1.70 from last month's estimate, and $2.50 above a year ago. 

Corn averaged $5.66 per bushel, up 72 cents from January, and $2.11 above a year ago. The soybean price, at $12.10 per bushel, was up 50 cents from January, and $2.69 above a year ago. Alfalfa baled hay was $127.00 per ton, was up $6.00 from January, and $17.00 above a year ago.

If You Don't Tell Your Story, Someone Else Will
(February 28, 2011) We have said it on DairyLine before and we will say it again, “if you don’t tell your story, someone else will.” California dairy producer Ray Prock said it at the recent World Ag Expo in Tulare, California.  

Prock milks about 450 cows on his dairy near Denair and was born and raised on a dairy which began in the early 70s by his parents. He also serves on the National Dairy Board that oversees the 5-cent dairy checkoff.

He said he became involved in the NDB because he saw the necessity of reaching out to consumers so they know and understand dairy farmers. He said “There’s other people telling our story and if we don’t tell our own story, the story will be told for us and, as we’ve seen, it’s not being told the way it should be.”

He adds that it’s important for farmers to use every chance they can get to build bridges and connect communities, whether it’s at church, school, or even a hobby event that may not have anything to do with agriculture.

“Through those conversations,” Prock reasoned, “We can build relationships, we can gain people’s trust and in the end influence them to understand that farmers know why they do things and we do things the way that they should be done and not the way that some other entity may think.”  

Dairy Profit Weekly’s Dave Natzke reported details in his Friday broadcast, pointing out that we all know milk contains water, butterfat and nonfat solids, made up of protein, lactose and minerals but the percentage content of each of those can vary by the breed of cow, season, diet and region. And, the nutritional content can be enhanced by taking out fat, or adding more nonfat solids. 

Current national standards set the minimum composition of fluid milk at 8.25 percent nonfat solids. In California, however, the standards are higher, from 8.7 percent for whole milk, up to 11 percent for low-fat milk. That means some fluid milk must be fortified with nonfat dry milk to reach the higher solids standards. 

One of the questions, Natzke said, is “what impact fortifying fluid milk with extra solids throughout the United States would have on consumers?” 

A recent study, commissioned by the California Milk Advisory Board, suggests consumers would prefer fortified milk, and may be willing to pay more for it. The study was conducted among 900 consumers in six U.S. cities, and involved taste tests of whole milk, 2 percent milk, 1 percent milk and nonfat milk. 

According to the report, a small percent of consumers (44 percent compared to 42 percent) preferred the taste of nutritionally fortified milk over milk produced at current federal standards. About 14 percent indicated no preference, he said. 

Ratings for flavor, color, thickness, texture and overall quality were similar, with a slight rating advantage to the milk produced at California standards.  

When nutrition was a factor, about 86 percent said they would select the higher solids milk if offered a choice, and they would be willing to pay an average of $1.74 more per gallon to get it. Next week Dave will look at how mandating higher solids nationally would impact dairy farmers and nonfat dry milk markets. 

Related Link: www.californiadairypressroom.com/node/326

(February 24, 2011) Dairy producers will see Milk Income Loss Contract (MILC) payments for January and February but that’s likely it for the fiscal year which ends in September. National Milk’s Roger Cryan reported in Thursday’s broadcast that the January rate should be about 11 or 12 cents per hundredweight and February’s will be about 20-40 cents, depending on USDA’s corn, soybean, and alfalfa estimates.

He does not project any MILC payments ahead, partly because milk prices overall are projected higher, Cryan said. The average all milk price in 2010 could be the highest ever, he said, possibly even higher than 2007.

 It’s also because the MILC payment is based on the Class I price in Boston which the futures markets say will be high all year.

He reminded us that the Class I price is the “higher of” the Class III cheese milk prices or the Class IV butter-powder milk prices so “when the Class III price is projected to be as much as $3 lower than the Class IV some months, tight margins in some markets won’t necessarily be protected by the MILC program.” Some of the margins could be very tight, he warned, because feed costs could reach the record highs hit in 2008.

Corn futures show corn reaching close to $7 per bushel, according to Cryan, soybean meal has already gone over $3.50 per ton, and hay prices are rising too.

The MILC program is permanent but current formulas are adjusted down at the end of August 2012. The feed cost adjustors are reduced and the calculation for the base rate is reduced. Cryan’s MILC projections are regularly updated and are posted at www.dairyline.com.

(February 24, 2011) The feed budget could get a break on at least one important commodity in the ration, namely cottonseed. Tom Wedegaertner of Cotton Incorporated, said in Thursday's broadcast that cotton prices are “real high,” and that’s encouraged growers to add acres. He anticipates a million and a half to two million more acres “so we’ll see plentiful cottonseed supplies this fall.”

He quickly adds that cottonseed is holding its own compared to high priced corn and soybeans so “it’s still a good buy but I think it’s going to be an even better buy this fall.”

When asked why cotton acreage wasn’t being reduced in favor of corn, Wedegaertner answered, “Surprisingly even though we have $7 corn, cotton is sitting near $2 per pound. It typically sells for 60 cents a pound so cotton lint has quadrupled almost in price and a lot of these growers in the south who have wanted to grow cotton as a rotation crop will grow cotton this year.”

“Corn and soybeans are high,” he said, “But cotton is even higher so there’ll be a lot of cotton acres coming in just  as a normal rotation to clean up the weeds and the bugs and things like that. They (growers) like to rotate cotton and soybeans and peanuts and that sort of thing,” he concluded. For more information, long on to www.wholecottonseed.com.

The Agriculture Department releases its monthly Livestock Slaughter report tomorrow morning. We will post complete details here as soon as possible and, while you’re here, please vote on our web poll if you havent done so already.

One of the recommendations from USDA's Dairy Industry Advisory committee called for research on what impact higher solids  standards in fluid milk would have on consumption. A recent study, commissioned by the California Milk Advisory Board, suggests consumers would prefer fortified milk, and be willing to pay more for it.   

Pennsylvania dairy producer, John Ligo, 2010 Beef Quality Award (BQA) winner which is funded in part by the Beef Checkoff, was back this week to emphasize how important this is to him and all farmers in Wednesday’s DairyLine. 

Consumers need to know and believe in the products that they buy at the grocery store, he said. Animal welfare and food safety is part of that overall package and Ligo said it starts with good record keeping. He reported that his records showed him that the involuntary cull rate on his dairy cows was as high as 40 percent. 

The records helped him determine that mastitis and lameness were two of the biggest issues and thus they were able to take steps to directly reduce the incidences they were seeing and now his cull rate is under 30 percent. 

The cattle injection site is another big issue, according to Ligo, and requires protocol, “so they leave as little damage as possible.” Injections are always given in the neck triangle, he said, to “minimize the damage to the saleable meat and it seems to minimize the trauma to the cow.” 

Protocols mean you have to read the labels, Ligo warned, because different drugs have different withholding periods, depending on the manufacturer, and some drugs have a vastly different meat withhold than a milk withhold. “We have to keep that in mind and there again it goes back to the record keeping,” he said. 

All of these pointers are taught in the BQA program which clearly demonstrated the whys of proper injection sites on cattle, he said, and is why he so highly recommends his fellow dairy producers take the program. For more information, log on to www.mybeefcheckoff.com and click the “Industry Information Page.”

January Cold Storage Report
(February 22, 2011) January butter stocks totaled 118.9 million pounds, up 37.2 million pounds or 46 percent from December but 49.2 million pounds or 29 percent below January 2011, according to preliminary data in the Agriculture Department’s latest Cold Storage report issued this afternoon.   

The January American cheese inventory, at 639 million pounds, was up 8.2 million pounds, or 1 percent from December, and 50.8 million pounds or 9 percent above a year ago. 

Total cheese stocks amounted to over 1.051 billion pounds, and was unchanged  from December, but 70.1 million pounds or 7 percent above a year ago. 

Market Talk with Mary Ledman
(February 22, 2011) Last week it was all but certain that cheese would hit $2 per pound but that didn’t happen and Mary Ledman, Principle of Keough Ledman and Associates, Inc. in Libertyville, Illinois, said in Tuesday’s DairyLine that, if it does, it will get there “kicking and scratching,” and she bases that on Friday’s Milk Production report.  

“Cows, cows, and more cows” is what the report said, Ledman opined, but she said we got a sneak preview in USDA’s latest Cattle report released in late January. It indicated higher cow numbers than previously thought by USDA and “that has definitely come to fruition,” she said.

“We added 16,000 head in December versus November,” Ledman reported. “We added another 16,000 in January and given that we have 85,200 heifers that are more than 500 pounds that are expected to calve this year, I think we’re going to see those cow numbers grow through the first half of the year. This is the highest gain in milk cow numbers in a month since January of 2008,” she warned.

She added that culling has been strong and the mailbox milk price in February was “nothing to write home about” so she believes that dairy producers supplemented their income with strong culling. Over 60,000 head have been culled, according to Ledman. “It’s been pretty consistent since the beginning of the year,” she concluded, “So clearly they’re making room for these heifers to come into the milking herd but much of this culling is also due to profitability and the need for cash flow.”

The markets were closed Monday for the President’s Day holiday and reopen today, what does Ledman expect? “It’s always hard to know,” she said. “The supply demand fundamentals are really suggesting we should slow down at this point. We’re really taking ourselves out of the export market and that’s been so critical for commercial disappearance in 2010.  

(February 21, 2011) Dairy Management Incorporated’s Joe Bavido completed his series in Monday’s “DMI Update,” looking back on the major accomplishments of the dairy checkoff in 2010. He began with the dairy crisis preparation program, one which I personally got to participate in.

Bavido pointed out that the checkoff has an issues management and crisis preparation system in place and include an industry wide network that helps address information in the marketplace and led three regional crisis drills that engaged many sectors of the industry focused on hypothetical situations ranging from animal disease outbreaks to intentional tampering of dairy products.

“These systems are in place,” Bavido said, “And while we hope that we never have to use them, we are confident that if something does come about we can insure that consumers will have the utmost confidence in dairy products.”

Milk quality and safety in 2010 and the nutritional benefits of chocolate milk were other issues that the checkoff addressed, he said. For more information about any producer-funded program, visit www.dairycheckoff.com. 

January cow numbers in the 23 states totaled 8.4 million head, up 14,000 from December, and 82,000 more than a year ago. Output per cow averaged 1,813 pounds, up 29 pounds from a year ago.

California output was up just 0.7 percent. Cow numbers were down 11,000 head but output per cow was up 25 pounds. Wisconsin was up 1.6 percent on a 5,000 cow increase and 20 pound gain per cow. New York was up 4.4 percent, thanks to a 75 pound gain per cow. Cow numbers were unchanged. Idaho was up 5.3 percent, on 23,000 more cows and 20 pound more per cow. Pennsylvania was up 1 percent, on 2,000 more cows and a 10 pounds gain per cow, and Minnesota was down 0.3 percent, due to a drop per cow of 5 pounds. Cow numbers were unchanged.

Florida showed the biggest increase, up 8.8 percent, followed by Colorado, up 8.5 percent, and Kansas, up 7.8 percent. Missouri registered the biggest decline, down 4.8 percent, followed by Virginia, off 1.4 percent, and then Minnesota.  

The Class IV advanced pricing factor remained the “higher of” in driving the Class I value and National Milk’s Roger Cryan told DairyLine that, at first glance, he doesn’t believe there will be a MILC payment to producers. 

The two-week, NASS-surveyed butter price averaged $2.0820 per pound, up 34 cents from February. Nonfat dry milk averaged $1.3467, up 10.4 cents. Cheese averaged $1.6386, up 26.3 cents, and dry whey averaged 41.46 cents, up 2.3 cents.

2-week Product Price Averages:

Republicans stated their views, he said, and now the President has offered his budget and “there’s going to be some significant changes if this gets adopted.” 

The irony here, Galen said, is that we’re in a stop gap funding measure right now in the current fiscal year, because they haven’t finalized the budget even though we’re more than four months into the current fiscal year so now they’re talking about fiscal year 2012 without wrapping up a lot of spending decisions for 2011. 

Farm programs would be cut by about $2.5 billion in the President’s budget, Galen said, but that’s over a 10 year period. The main way that would be accomplished, according to Galen, is by capping the amount of farm program payments that people can get, based on their adjusted gross income. That was actually proposed earlier, Galen said, but didn’t go anywhere so. 

“This is just an opening gambit,” Galin concluded. “There’s going to be a real big political battle between the House and the Senate, between the Republicans and the Democrats, between the White House and the Congress and I think this will be one of the biggest battles this year because everyone realizes that government is getting rather large, something should be done about it, but exactly what, that’s what needs to be decided.” 

(February 15, 2011) Cash block cheese jumped 2 cents Monday and is on its way to $2 per pound, according to market analyst Alan Levitt in Tuesday’s DairyLine. “It’s inevitable,” he said. “Those that have cheese seem be hanging on pretty tight and you have to have some kind of equilibrium with Class III prices and Class IV prices to make sure the milk goes where it needs to go.”

You also need some kind of equilibrium with milk prices and corn prices, Levitt reasoned, as corn hit record highs last week “so milk prices have to follow along otherwise, it’s a losing proposition.”

Cash butter lost a penny and a quarter Monday, following a penny drop on Friday and the lags are working through, according to Levitt, following a price that stayed at $2.10 for 24 consecutive sessions. At some point, there has to be some buyer resistance, he explained, though he admitted that many thought the resistance would have come sooner, but perhaps it is here now.

Meanwhile; cheese exports soared in December. Overall export volume was up about 46 percent in December from the prior year, according to Levitt, and for the full year were up close to 40 percent.

Cheese shipments in December were a record high at about 44 million pounds, up 63 percent from the prior year, and almost 5 percent of production which is easily the most ever. It has run about 2 percent the last five years, he said so that a huge shift.

We also had a cheese trade surplus in 2010 for the first time ever. The deficit has run about 212 million pounds for the last five years, Levitt reported, however we had a surplus of 78 million pounds in 2010, equivalent to 139 loads of cheese per week taken off the domestic market versus previous years.

Private-Public Partnership Committed to Child Health
(February 14, 2011) A special phone-in news conference was held Friday February 4 to announce dairy’s participation in a private-public partnership committed to child health and wellness. Participants included Agriculture Secretary Tom Vilsack, Dr. David Satcher, former U.S. Surgeon General, Tom Gallagher, CEO of the National Dairy Council and DMI, Paula Meabon, Pennsylvania dairy producer and DMI board member, and Alexis Glick, CEO of the Gen YOUth Foundation.  

DMI’s David Pelzer reported in Monday’s “DMI Update” that the focus is on the schools and the partnership includes USDA, the National Football League, other governmental departments, and Gen YOUth, a new non-profit organization to fight childhood obesity.

Pelzer said it’s a “multi organizational and powerful partnership with the arms of the federal government to improve nutrition and physical activity in schools and improve children’s health.” He said it encourages kids to consume more nutrient rich foods, including low fat and fat free dairy products, as well as fruits, vegetables, and whole grains. Last but not least, the program encourages 60 minutes of physical activity each day. For more information, log  on to the Gen YOUth website at www.genyouthfoundation.org.

Dairy Market Weekly Recap
(February 12, 2011) Cash cheese prices continue to climb, perhaps in celebration of the victory by the Green Bay Packers in Sunday’s Super Bowl. Downes-O’Neill dairy economist Bill Brooks reminded Tuesday’s DairyLine listeners of an old adage that, “If the Packers make the playoffs, it helps cheese sales,” but “those wearing the green and gold in Wisconsin or anywhere else in the country; they’ll take credit for it and smile all the way to buying their Super Bowl merchandise.”

The 40-pound block price closed February 11 at $1.9150 per pound, up 10 1/2-cents on the week, 41 cents above a year ago, and up 57 1/2 cents since the First. The 500-pound barrels closed at $1.90, up 12 1/2-cents on the week, and 45 1/2-cents above a year ago. Only four cars of block traded hands on the week and one of barrel. The lagging NASS-surveyed U.S. average block price hit $1.5719, up 11.4 cents, while the barrels averaged $1.5796, up 11.3 cents.

The butter market, after holding at $2.10 for 23 consecutive sessions, inched back a penny Friday, closing at $2.09, but 75 cents above a year ago. Nothing was sold on the week. The NASS butter price average hit $2.0785, up 1.1 cent.

The CME’s Daily Dairy Report (DDR) warned this week that when butter prices surpass $2.00 consumers reduce purchases although retail sales remain solid at this time and international interest is increasing as butterfat remains very limited.

Cash Grade A nonfat dry milk closed Friday at $1.7775, up 5 3/4-cents on the week. Extra Grade closed at $1.7650, up 7 1/2-cents. NASS powder averaged $1.3319, up 4.6 cents, and dry whey averaged 40.85 cents, up 0.9 cent.

The founding members of the National Dairy Producers Organization outlined 20 issues they say needs to be resolved during these changing market conditions.

“It’s taken decades to get us to the current spot we’re in,” Gary Genske, spokesman and Treasurer of the group said. “We have not seen a producer organization that is nationally organized ever in the history of our industry. We constantly see our margins erode, our net worth’s erode and current proposals, in our opinion, do not protect us from erosion of net worth of the dairy farmer.”

The organization holds daily and weekly calls with producers from across the country.

“New Mexico last week we had 63 callers,” Genske said. “All of the other states, we have hit it off extremely well. We have had daily calls where in some cases we have counted thousands on the line at the same time.”

For details on the 20 issues involved with the Contract with Dairy producers, go to www.nationaldairyproducers.org.

California's March Class 1 Prices up $2.36
(February 10, 2011) California’s March Class 1 milk price was announced by the California Department of Food and Agriculture this afternoon at $19.24 per hundredweight for the north and $19.51 for the south. Both are up $2.36 from February and $2.80 above March 2010. The March Federal order Class I base price is announced Friday, February 18.

National Milk has and still has concern about the scope of what the FDA is doing, he said. They will visit nearly a thousand dairy farms that, in the past few years, had culled dairy cows that had positive tissue residue violations, mostly for antibiotics, and a few other pharmaceutical products. 

Galen reported that the Federation told the FDA that, before it does such a broad sampling, it should consider a more limited pilot program to see if the residues they’re looking for are actually showing up in the milk. 

“They have shown up on a few hundred farms,” Galen admitted, “and those farms definitely need to look at the usage protocols of the pharmaceutical products in question to make certain that they’re following the label guidance and using the products correctly but we definitely have concerns, not only about how broad the program is but also some of the potential ramifications economically.” 

The residues are being found in the meat, not necessarily in the milk, but because they found residues in the meat, they now want to check the farm’s bulk tanks to see if residues are there as well. 

Forty percent of the violations are penicillin products, Galen said, and those are already screened for as every tanker load of milk is checked and “the residues are not showing up there so why would they show up on individual farms?” 

The other concern, he said, is that processors are not going to want the milk from any farm that has been sampled by the FDA because of the potential liability. If a farm is screened in this program, they may have to dump 3-5 days worth of milk before the test results come back and hopefully are clean. 

National Milk, a number of state regulatory agencies, and 10 state Ag commissioners in the Northeast have also expressed concern to the FDA about the potential economic ramifications of having to dump a significant amount of milk because of the way they’re approaching this screening program, he said.

Milk production for 2010 was estimated at 192.7 billion pounds, down 100 million pounds from last month’s estimate. The 2011 projection is 196.1 billion pounds, up from last month’s projection of 195.5 billion. The increase was based on higher-than-expected January 1 dairy cow and dairy replacement heifer estimates.

Import and export forecasts were unchanged from last month. Product prices were forecast higher this month. Strong international demand, coupled with improving domestic demand is expected to help support prices. Butter prices are also benefiting from tight beginning stocks.

Class III and Class IV milk price forecasts were raised to reflect higher product prices. Look for a Class III price average of $15.80-$16.50 per cwt. in 2011, according to USDA, up from the $14.35-$15.15 projected a month ago. The 2010 average was $14.41.

The Class IV price is expected to averaged $16.70-$17.50, up from $14.90-$15.80 projected last month. The 2010 average was $15.09. The all milk price is forecast to average $17.70 to $18.40 per cwt. for 2011.  

World Ag Expo in Tulare
(February 9, 2011) World Ag Expo (WAE) takes place this week in Tulare, California. DairyLine’s Bill Baker is there and is the Emcee for the Western DairyBusiness Dairy Profit seminars. WAE manager Jerry Sinift reported in Wednesday’s DairyLine that some major changes have been made to the dairy center building at Expo, including a cement floor and the fabric siding was replaced with metal. 

Wednesday was “FFA Day,” according to Sinift and about 2,000 students from schools in five western states were expected to be there at the show as part of a statewide assembly of the FFA with Michael Peterson the keynote speaker. 

The show is huge and features equipment and services for any crop grown on the face of the earth. Sinift stated that over 300 different commodities are grown just in Tulare County alone so “you’ll see everything out on the show grounds.” 

Also new this year is the beef and livestock pavilion. Surveys indicated that the beef industry is an important part of the lives of many attendees at Expo. Live cattle demonstrations are part of Expo this year, he said, related manufacturers are demonstrating their wares, there’s new developments for pregnancy testing in cattle are featured so this is an exciting thing for the beef industry and he likened Expo to the “Disneyland of agriculture.” 

It is World Ag Expo and some 70 different countries are represented at Expo, either by attendees or exhibitors and he said it was fun watching the translating going on between the different languages being spoken. For more information, log on to www.worldagexpo.com. 

Books agrees with concerns that the market may be overheating but a better explanation of what’s happening, he said, may be that cheese prices are in a catch up mode to the butter and nonfat dry milk complex and may have more to do with the disparity in milk prices between Class III and Class IV, which, at times had been above $4 per hundredweight in favor of the Class IV. 

That’s likely impacting supplies of milk, Brooks explained, as well as the storms which spurred fluid sales and pulled milk that normally would have gone into the cheese vat. That’s keeping a tighter supply in 4-30 day old product that trades at the CME even though we have historically high cheese inventories in commercial stocks. Normally, that would keep a lid on prices, he said, but “it’s not the right age of product to bring to the exchange and put a lid on these cheese prices.” 

Butter traders on the other hand appear to have shut off the lights and gone home. The price remains at $2.10, where it’s been since January 7. Downes said “they may be in winter hibernation and the ground hog hasn’t popped his head up to see what’s going on.” 

Brooks knows of no one who is comfortable at $2.10. Manufacturers are concerned about their inventory if the price falls and buyers are concerned that the price might move higher, though prices are at record levels for January, “so it’s a tenuous situation and nobody’s comfortable and they’ll get even less comfortable if the price does start to move against their interests.” 

(February 4, 2011) Cash dairy prices keep rising with the exception of butter. Block cheese, after jumping 21 cents the previous week, closed the first Friday in February at $1.81 per pound, up another 7 1/2-cents on the week, and 31 3/4-cents above a year ago. The barrels closed at $1.7750, up 7 cents on the week, and 30 1/4-cents above a year ago. Only two cars of block traded hands all week and none of barrel. The NASS-surveyed U.S. average block price hit $1.4580, up 6.3 cents. Barrel averaged $1.4662, up 4.7 cents.

Butter held all week at $2.10, where it’s been since January 7, and 77 1/4-cents above a year ago. Five cars did trade hands on the week. NASS butter averaged $2.0674, up 7.2 cents.

Cash Grade A nonfat dry milk closed Friday at $1.72, up 6 1/4-cents on the week. Extra Grade closed at $1.69, up 9 cents. Seven cars of Grade A were sold on the week. NASS powder averaged $1.2842, up 2.4 cents, and dry whey averaged 39.96 cents, up 0.4 cent.

Nation's Benchmark Milk Price Slips Some More
(February 4, 2011) The nation’s benchmark milk price has slipped some more. The Agriculture Department announced the January Federal order Class III price this morning at $13.48 per hundredweight (cwt.), down 35 cents from December, $1.02 below January 2010, and  99 cents above California's comparable 4b cheese milk price. It equates to about $1.16 per gallon. Thursday’s Class III futures portend a February Class III price of $16.63, March $18.37, and April $18.08. 

The Class IV price is $16.42, up $1.39 from December and $2.57 above a year ago.

The four-week, NASS-surveyed cheese price averaged $1.4076 per pound, down 5.3 cents from December. Butter averaged $1.8428, up 18.9 cents. Nonfat dry milk averaged $1.2530, up 6.8 cents, and dry whey averaged 39.35 cents, up 1.5 cents.

Impact On Prices of Dairy Cows
(February 4, 2011) We've been reporting on the impact of milk and feed prices on dairy farm income but Friday’s DairyLine explored the impact on the prices of dairy cows with Dairy Profit Weekly editor Dave Natzke. Natzke reported that USDA estimates that the average price paid for a dairy cow was $1,300 in January, down about $30 per head from October 2010, and $40 less than a year ago. Even more dramatic, he said, is that the average price paid in January 2011 is $600-$700 below peak prices paid in 2007 and 2008.

The decline is due to a couple of factors, according to Natzke. As noted, the high cost of feed relative to milk prices is driving down dairy profitability, and may be limiting demand and the amount of money available to pay for replacement cows. 

Second, USDA estimates there are nearly 50 dairy heifers for every 100 milk cows currently in the U.S. herd, making replacement animals plentiful. USDA estimates more than 3 million of those heifers will start producing milk this year, up 85,000 head from a year ago.  

On the flip side, Natzke said beef prices for culled dairy cows are extremely high, averaging $63 per 100 pounds in January. Multiply that by a 1,400 pound cull dairy cow, and she's worth nearly $900 as beef, or just $400 less than the replacement cow price, probably one of the smallest gaps in quite some time. 

“With high beef prices and high numbers of heifers, we may see more dairy farmers selling older cows for beef, replacing them with heifers,” Natzke said. 

Super Bowl 2011 is Sunday and we'll soon learn whether the “cheese heads” or the “steel heads” will be victorious but irregardless, consumers and dairy farmers will be victorious because Super Bowl is one of the biggest days for cheese consumption in the U.S. 

First, the “3 A-Day of Dairy” message is still important for the average American consumer, according to Jonker, and the Dietary Guidelines recommend average Americans continue to consume three servings of dairy daily, including low fat and nonfat milk, yogurt, and modest amounts of cheese.

In fact, Jonker said the Guidelines point out that that recommendation is currently not being met so, not only is the recommendation still included in the Guidelines, the recommendation is not being met meaning the dairy industry has an opportunity to increase consumption among Americans.

When asked if that principle carries into school feeding programs, Jonker said it certainly does because school lunch programs are based on the Dietary Guidelines, however the challenge here is the Guideline’s focus on what Jonker called the “nutrients to avoid,” things like sodium, solid fat, and added sugars.

“Those are challenges for the dairy industry,” Jonker said, “in such things as cheese on pizzas, flavored milks, and cheese snacks.”

The regular reassessment of the Dietary Guidelines behooves the dairy industry to remain vigilant in this process. Jonker also pointed out that the dairy industry needs to produce the products that Americans wish to consume.

The vegetarian and anti animal agriculture lobby is also involved in those process as Jonker pointed out there is an undertone of moving toward a vegan diet but the Dietary Guidelines recognize the important nutrients that dairy products contribute to the diet such as calcium, prosperous, protein, vitamins A and D, B-12, riboflavin, and niacin. Milk and dairy products are a complete nutritional package for consumers and I think that’s why the Dietary Guidelines continue to recognize them as being an important part of the American diet.”

(February 2, 2011) The International Dairy Foods Association’s (IDFA) annual Dairy Forum held last week in Miami confirmed that there is far more consensus in the dairy industry than there has been in a long time, according to IDFA’s Jerry Slominski. Speaking in Wednesday’s DairyLine, Slominski said that dairy processors and producers agree that existing dairy policy needs to change and he reported that IDFA CEO, Connie Tipton said the dairy industry is “at a crossroads and IDFA believes that the path forward is with policies that promote growth to the benefit of all of us.”     

A new study from Informa Economics was introduced at the Forum that shows the Dairy Market Stabilization Program, a key proposal of National Milk’s  Foundation for the Future, would have withheld an estimated $626 million from dairy farmers if it had been in place from 2000-2009. The report also highlighted the program’s regional differences, according to Slominski, citing Wisconsin farmers as an example, stating that they would have paid $150 million while California’s dairies would have only paid $28 million.   

“Taking money from dairy farmers during hard times, instead of helping, would be a remarkable turn-around for our nation’s dairy policy,” Slominski said. “In 2009, the worst year on record for dairy farmers, the stabilization plan would have withheld $390 million from producers. That very year Congress appropriated an extra $350 million, mostly in direct payments, to increase producer’s incomes.”  

One of the most convincing arguments at the Forum against growth management, according to Slominski, came from Nestle’s Patricia Stroup, who told attendees that in order for companies like hers to continue their preferred course of sourcing high quality milk from the United States, they need to be assured that that supply will continue to be available and reliable. 

“There are many policy areas where we agree,” Slominski argued, “but the stabilization program, or any other government program to manage growth is the wrong path forward.” “Instead of being secondary, margin insurance, and other proposals where processors and producers agree, should be the essential part of that plan,” he concluded, and “programs to limit milk supply or impose penalties on producers should not be part of what is shaping up and on full display at Dairy Forum to be a very productive discussion about the future of our industry.” 

Mozzarella cheese output totaled 308.8 million pounds, up 9.4 million pounds or 3.2 percent from November, and 20 million or 6.9 percent above a year ago.

Total Italian type cheese, at 390.3 million pounds, was up 9.6 million pounds or 2.5 percent from November, and 20.5 million or 5.5 percent above a year ago.

Cheddar production totaled 280.7 million pounds, up 17.1 million pounds or 6.5 percent from November, and 17.6 million pounds or 6.7 percent above a year ago.

American type cheese amounted to 369.6 million pounds, up 19.6 pounds or 5.6 percent from November, and 17.4 million pounds or 4.9 percent above a year ago.

Total cheese output came to 904.4 million pounds, up 21.4 million pounds or 2.4 percent from November, and 40.5 million pounds or 4.7 percent above a year ago. 

Nonfat dry milk output, at 139.5 million pounds, was up 22.8 million pounds or 19.6 percent from November, and 12.8 million pounds or 10.1 percent above a year ago. 

Market Talk with Brian Gould
(February 1, 2011) Cash dairy prices keep rising with the exception of butter. January 31 trading saw block and barrel cheese up 2 cents a pound each, Grade A powder up a penny, and Extra Grade up a nickel. Why would someone pay $1.6675 per pound for nonfat dry milk from the CME?  

The University of Wisconsin’s Dr. Brian Gould called it a real quandary, given where international prices are at in Tuesday’s DairyLine but speculated that cheese manufacturers may be caught short and want to standardize their milk to improve the protein content because they’re making a lot of cheese or they may be skimming off the butterfat to make butter and sell it and then add the “relatively inexpensive nonfat dry milk” to increase the protein content.

He admitted he wasn’t sure of the reason and said he has not tracked the historical relationship between CME cash nonfat dry milk and the lagging NASS surveyed price. Right now there is a substantial difference. The NASS-surveyed powder price as of Friday was $1.2560 per pound, while Monday’s CME price was $1.65 on the Extra Grade and $1.6675 for the Grade A.

Gould would not speculate how high cheese prices will go but he expressed concern over the stocks on hand which are well above year ago levels. Citing the recent December data, Gould reported that American cheese stocks were up 8 percent from a year ago and total natural stocks were up over 6 percent and they were high to begin with, he said.

If you factor in the increased milk production we’re seeing and the potential for even more milk given last week’s biannual “Cattle” inventory report which showed an abundant supply of replacement heifers waiting in the wings, that strength can’t be maintained, he warned.

When asked what this means for dairy farmer risk management Gould reported that there’s been a lot more activity in the Livestock Gross Margin insurance program. As of December there was about 7 million hundredweight insured, he said, and even more activity because of the recent government subsidies to the program. “People are recognizing that, even with those high grain prices we may want to try and set some floors,” he concluded.