March 2011 Archived Dairy News

Western United Dairymen Update
Milk Producers Council weekly update
Guest Editorial: Let Us Protect the Food Supply|
The Long and Winding Road - Jerry Kozak, NMPF
Drug Residues...Your Problem? 
Cal Poly Explores Clean Technology at April 14 Forum
Global Cheese Technology Forum
Louisiana's new dairy ad airing throughout state
Milk Fears Shut China's Dairies
BC's Dairy Industry Encourages Radiation Testing
Fuel Up to Play 60 Gaining Popularity
Pfizer Continues to Invest into Veterinary Scholarship Recipients
April 1, 2011
California's March Class 4 Prices Released
Farm Milk Prices Jump Again
Crop Wars May Be Coming To An Acreage Near You
March Dairy Market Report - Roger Cryan, NMPF
Radiation in Milk Far Below Levels of Concern
INTL FCStone Dairy Conference - June 15-16 in Chicago
Annual Farm Show Always Worth Attending
March 31, 2011
Fonterra Accused of Milk Price Games
NY: Jefferson County Dairy Farmer Accused of Harboring Aliens

March 15, 2011
Cheese Prices Plummet 
Guest Editorial by Arden Tewksbury
CWT Assists with 2.9 Million Pounds of Cheese Export Sales
Global Milk & Dairy Products Market Report - 2010 Edition
Parmalat Can Become Top Five Dairy Company With Acquisitions
Fonterra Competitors Seek Inquiry
Oak Farms Recalls Chocolate Milk
March 14, 2011
Dairy Industry Has Powerful Partnerships
MI: Dairy Farm Plan Raises Concerns
Avoiding Drug Residues in Your Dairy Animals… What’s Your Plan?
Firms Honored By Dairy Business Innovation Center
WUD Update
Milk Producers Council update
Alltech to work with dairy industry
March 11, 2011
California Class 1 Prices up $2.42
Fund Established For Victims of PA Dairy Fire
Getting a Better Idea of What Dairy Platform Will Look Like
WDMC Video: Dr. Mike Socha, Zinpro, on fighting pathogens
Governor Corbett Visits Dairy, Talks Business
Judge Declines to Hold Minnesota Raw Dairy Farmer in Contempt
Dairy Management Teams Can Help Profitability
Fonterra still seeking rivals' powder for online auctions
AFACT webinars on FDA and dairy antibiotics
March 10, 2011
USDA Lowers 2011 Milk Production Estimate
Western Dairy Management Conference - Day 1 Video
Improvement Steps For Foundation For The Future Policy Proposal
DIAC provides recommendations for public policy reform
Committee: U.S. Needs Dairy Policy Makeover
Pro Ag Urges Senator Gillibrand to take additional steps 
Parents in Shock After 7 Children Die in Farmhouse Fire
Family and Neighbors Cope  Family Members in Mourning
DPAC unveils ‘Cornerstones for Change’ dairy policy proposals
Dairy Council Focuses on Sustainability
LGM-Dairy gets funding boost
Students Face-Off at Western Dairy Challenge to Prepare for Nationals
Bring Gastropub Fare Home with Real California Dairy
March 9, 2011
Webinar Focuses on Antibiotic Use
Fire at Pennsylvania Dairy Kills 7 Children
Prayers are with PA Dairy Family
CMAB study: Higher fluid milk standards would sell
March 8, 2011
Cheese Traders Took Monday Off
Panel is Split on Dairy Policy
EPA Has Dairy Farmers Crying Over Spilled Milk
NY Ranks 3rd in Dairy Cattle
March 7, 2011
Gillibrand Seeks to Bolster Slumping Dairy Industry
Mad Cow Returns to Alberta  Related
My Dairy Helps Farmers Tell Their Story
Western United Dairymen update
Milk Producers Council weekly update
News For Dairy Co-Ops - NMPF
Miami firm, 2 charged in contaminated cheese case
Dairy Day Delivers Again in Susquehanna County
Madison Township Dairy Farmer Retires After 55 Years
March 4, 2011
Dairy Market Weekly Recap
USDA Dairy Industry Advisory Committee Approves Final Report 
February Federal Order Benchmark Milk Price Jumps $3.52
More Study Needed Regarding Total Solids Standards in Fluid Milk
Dairy Groups Applaud U.S. Action to Resolve NAFTA Trucking Dispute  
NAHMS survey: Stall surfaces, bedding, neck rails, trainers
March 3, 2011
National Milk Defends Foundation For Future Program
Overseas investors urged to invest in dairy farming
Revised plans submitted for Leighton super-dairy
March 2, 2011
January Dairy Products Report
Listen to NMPF Teleconference 
NMPF Analysis Shows IDFA-Funded Informa Study Miscalculated Impact
Economic Impact of Dairy Stabilization Program
Processor's Perspective on Supply Management
Chief Operating Officer to Leave Dean Foods
Dairy Farms Inspection Shakeup
March 1, 2011
California's February 4b Price Up $4.43
All Eyes On Cash Cheese Market
ME: Bennett's Well Positioned to Lead Oakhurst Dairy
MI: Shifting Milk Inspections to Dairy Industry Draws Fire
Ice Cream Maker Changes Name
Dairy Farmers Down Under Fear Carbon Price Impact
NZ: No Fat Returns From Higher Dairy Prices
Aussie Dairy demand strong for medium term, with help from China

Fuel Up to Play 60 Gaining Popularity
(April 4, 2011) The “Fuel Up to Play 60” program is gaining in popularity but Dairy Management Incorporated’s Joe Bavido says he still gets questions from farmers about it. Speaking in Monday’s “DMI Update,” he said it’s an in-school nutrition and physical activity program launched by the National Dairy Council and the National Football League with support from the Agriculture Department.  

The program encourages kids to consume nutrient-rich foods, including dairy products, and engage in physical activity for at least 60 minutes per day, he said, because over a third of American children are either overweight or obese.

The program is driven locally in some 70,000 schools and is designed to engage kids to take action to improve their own health. It can be customized to individual schools, according to Bavido, is grounded in research done on youth, and includes in-school promotional materials and student challenges.

Dairy producers are encouraged to check with their local schools to see if “Fuel Up to Play 60” is part of its curriculum and attend any local event such as the visit of a pro football player. Doing so “goes a long way to help farmers understand,” he concluded.

California's March Class 4 Prices Released
(April 1, 2011) California’s 4b cheese milk price was announced this afternoon by the California Department of Food and Agriculture at $16.76 per hundredweight, down 16 cents from February, $5.63 above a year ago, and $2.64 below the comparable Federal order Class III price. The 4a butter powder price is $19.06, up $1.18 from February, and $6.22 above a year ago.  

Market analyst Alan Levitt tells DairyLine that California uses the CME block cheese price instead of the NASS-surveyed prices. Blocks crashed in mid month, thus the drop in the March 4b price. That won’t show up in the Federal order Class III price until April. Also, rising whey prices have no bearing on the California 4b price so there will be a growing disparity there. Class III gets a nice boost from whey, California’s 4b does not.

(April 1, 2011) The Agriculture Department announced the March Federal order Class III benchmark price this morning at $19.40 per hundredweight (cwt.), up $2.40 from February, $6.62 above March 2010, and equates to about $1.67 per gallon. This is the highest it has been since June 2008 however it appears to be the peak for 2011.

Looking ahead, Class III futures settled Thursday, with the April contract at $16.71, May $16.70, June $16.86, July $17.40, August $17.70 and September at $17.78. The 2011 Class III average now stands at $16.61, up from $13.85 at this time a year ago and $10.18 in 2009.

The March Class IV price is $19.41, up $1.01 from February and $6.49 above a year ago.

The four-week NASS-surveyed cheese price averaged $1.9722 per pound, up 22.7 cents from February. Butter averaged $2.0591, down almost a penny. Nonfat dry milk averaged $1.4945, up 1.2 cents, and dry whey averaged 45.78 cents, up 3.4 cents.

(April 1, 2011) "Crop wars" may be coming to an acreage near you. That's not an April Fool's joke. Many crop marketing analysts are portraying the 2011 planting season as “acreage wars,” with high commodity prices pitting corn, soybeans, wheat and cotton against each other for valuable space.

Two of the more highly anticipated USDA reports were released on Thursday, with the latest Grain Stocks report estimating current grain inventories; and a Planting intentions report providing a glimpse of what farmers intend to plant this spring. Dairy Profit Weekly editor Dave Nazke detailed the reports Friday.

Indications are that corn is the early leader in the battle for acreage, Natzke reported. USDA forecasts growers intend to plant more than 92 million acres of corn in 2011, up 5 percent from last year and 7 percent more than 2009. If realized, it would be the second largest area planted to corn since 1944, behind only 2007’s 93.5 million acres, Natzke said.

Soybean planted area for 2011 is estimated at 76.6 million acres. While down 1 percent from last year, it would still be the third largest on record. 

Looking at grain stocks, corn stored in all positions on March 1 was estimated at 6.5 billion bushels, down 15 percent from a year ago; while soybeans inventories totaled 1.25 billion bushels, down 2 percent.

Estimated corn acreage came in somewhat higher than many market analysts had predicted, but corn inventories came in slightly lower. Soybean acreage and stocks estimates came in slightly lower than many forecasts, so we'll probably see some futures price reaction as the week closes.  

Turning our attention to legal matters, Natzke reported that Dean Foods has agreed to sell a milk processing plant in Waukesha, Wisconsin., to settle a federal antitrust lawsuit filed in the U.S. District Court. Under the settlement, Dean has 90 days to sell the plant, which it purchased from Foremost Farms dairy cooperative in 2009. The lawsuit, filed by the U.S. Department of Justice and Attorneys General in Wisconsin, Illinois and Michigan, alleged Dean’s ownership of the plant presented antitrust concerns.

(March 30, 2011) The March Milk-Feed Price Ratio is 2.18, up from February's 2.02 estimate, according to USDA’s “Ag Prices” report and is unchanged from March of 2010. 
 
The All Milk Price was estimated at $20.40 per hundredweight, up $1.30 from last month's estimate, and $5.60 above a year ago. 

Corn averaged $5.46 per bushel, down 18 cents from February, but $1.91 above a year ago. The soybean price, at $12.10 per bushel, was down 60 cents from February, but $2.71 above a year ago. Alfalfa baled hay at $136.00 per ton, was up $9.00 from February, and $23.00 above a year ago.

The Market Trying to Find a Happy Place
(March 30, 2011) But, then came Tuesday. Cheese price reversed gears from Monday's surprise uptick. Downes-O’Neill dairy broker Dave Kurzawski summed it up in Wednesday’s DairyLine; “We got a lot of volatility here in the marketplace. The market is trying to find a happy place and that happy place is somewhere here between $1.60 and $1.70 at this point in time.” He also warned that more cheese is like to come to the market and that could pull the price below $1.50. 

Kurzawski said there’s fresh product available, based on Monday’s trading, “that buying that pushed us up 7 cents, that buying was I don’t want to miss the boat type buying, that was the psychology behind that.” He pointed to the a quarter-cent higher bid in Friday’s block market and the buyers said “I better get in here before we get back up to $1.90, the fundamentals don’t yet support that,” he said. 

The price got to $1.70 as a line in the sand, according to Kurzawski, and the sellers came back out and do have the product. That could change in 30 or 45 days, he said, “But today and this week they do have cheese available.” 

Switching to the butter side, the price strengthened three consecutive sessions but lost a penny and a half Tuesday on an offer. “The buyers stepped away here quietly Tuesday,” Kurzawski explained. They have been a big part of the reason the price has been above $2 for a few weeks but they will eventually step aside for more than just a day, he warned. They’re not gone yet, he said, but over the next couple weeks, he looks for butter to fall below $2 for a short period. 

The stocks to use ratios on butter, nonfat dry milk, on dry whey are all very tight, he concluded, “We don’t have a lot of wiggle room but right now we have enough to meet the current demand.” 

(March 29, 2011) Cash cheese reversed gears Monday in a surprise 7 1/4-cent turn around on the blocks and a penny and a quarter-cent gain on the barrels. The gain on the blocks came on one unfilled bid and followed Friday’s quarter-cent increase. Butter inched a half-cent higher, to $2.08.

When asked what prompted Monday’s gain, Dr. Robert Cropp, Emeritus professor at the University of Wisconsin at Madison said “that’s a good question,” in Tuesday’s DairyLine. He mentioned last week’s Cold Storage data which showed a slight decline in cheese stocks from January to February which he said is good news but stocks were still 4 percent above a year ago.

Indications are that cheese demand is holding pretty good, according to Cropp, however cheese production is running strong but buyers may be looking down the road. The last Milk Production report showed U.S. milk output was only up 2 percent and February cow numbers did not increase from January.

“It’s questionable whether it’s going to hold with that much of a jump here” (the cheese price increase), Cropp warned. He expects it to slip some as we go into the spring flush and then start to rebound in the summer months and fall.

I asked if the situation in Japan or China might have any bearing and Cropp pointed out that the markets took a little nosedive immediately after the earthquake in Japan and it looks like exports will recover as there is growing concern about milk quality in Japan. Japan is a major cheese buyer, he said.

China has also been active in the international dairy market, he said, but their interest is more on powdered milk and dry whey than on cheese.

Cropp predicts the March Federal order Class III milk price will be announced Friday by USDA at $19.40 per hundredweight. That would be an increase of $2.40 from February and $6.62 above March 2010. He looks for a Class IV price of $19.65, up $1.25 from February and $6.73 above a year ago.

(March 25, 2011) Members of the nation's largest dairy cooperative, Dairy Farmers of America, met in Kansas City this week for the organization's 13th annual meeting. Dairy Profit Weekly editor Dave Natzke was there and reported Friday that “Recovery mixed with uncertainty might be the best way to describe the general mood, as dairy producers look at improved milk prices, but also much higher input costs.”

Addressing about 1,300 DFA members and guests, co-op president and CEO Rick Smith called the past three years a time of unprecedented change and volatility throughout the world, a trend that will continue, he warned, affecting commodity and food prices, as well as input costs for dairy farmers.

DFA is forecasting a 2011 average milk price of about $19 per hundredweight, up almost $3 from 2010, and $6 more than 2009. Despite those improved milk prices, however, Smith said rising costs for feed, fuel, environmental compliance and other operational costs are squeezing dairy producer margins.

Additionally, Smith said farmers face pressures on the income side, as rising dairy product prices negatively impact customers and dairy product demand.

Looking at the co-op’s financial report, DFA reported net sales of $9.8 billion in 2010, up from about $8.1 billion from 2009. Net income, at $43.7 million in 2010, was down $21.8 million from the year before. DFA marketed about 63 billion pounds of milk in 2010, or about 30 percent of the nation’s total.

With the changing global dairy market, Smith said DFA was retooling and investing in processing plants to increase the co-op's export sales, which represent about 10 percent of the co-op's annual business.

Briefly addressing DFA's legal battles, Smith said the co-op hoped to make progress in resolving those lawsuits in 2011, according to Natzke.

On the policy front, DFA members have thrown their support behind National Milk’s Federation’s Foundation for the Future federal policy proposal, according to Randy Mooney, DFA chair. He said recent volatility has created more losers than winners, and the industry could no longer operate under outdated policies.

(March 24, 2011) Importers of dairy products will start paying the promotion checkoff assessment. The Agriculture Department has finalized its long awaited regulations. National Milk lobbied for its inclusion in the 2002 Farm Bill but it was blocked due to objections that the domestic checkoff was not applied to farmers in all 50 states.

The Federation worked with Congress to correct that in the 2008 bill however regulations were slow in coming until last week. National Milk’s Chris Galen reported in Thursday’s broadcast that “It’s been a 10 year process and we’re finally at the end of the road.”

The first phase is implementation of the 15-cent per hundredweight assessment April 1 on producers in Alaska, Hawaii, and Puerto Rico. Importers will begin paying in August, according to Galen, and include milk protein concentrate, casein, and cheese but will only pay 7 1/2 cents.

“This is really an issue of justice,” Galen charged. “For too long, imported dairy products and those who bring them into this country have enjoyed a growing market.” He pointed to cheese as an example, stating that, in the roughly 30 years since the domestic checkoff program began, cheese consumption has more than doubled, “so importers and imported cheeses in particular, have benefited from that but all that expansion has come on the backs of U.S. farmers, not their counterparts in other countries, so finally we’re going to be able to do something about it.”

Critics charge that imports will now be able to use the “real Seal” on their products and foreign dairy products will have to be included in promotional efforts. Galen admitted that foreign dairy products must be treated the same as U.S. products but argued, “The amount of money that we’re talking about is hardly like we’re going to be overwhelmed by a bunch of foreign interests dominating how the National Dairy Board is run.”

He also cited other commodities like beef, pork, and cotton that have assessed imports and have not found that doing so was detrimental to their promotions.  

“This is still going to be a program that focuses on dairy products overall and you also have to look at what’s happening with the dairy checkoff here in this country,” he argued. “It’s really not about advertising  anything anymore it’s about building strategic alliances and relationships with processors and marketers so it’s high time that those who benefited from all those activities, help pay the tab.”

(March 23, 2011) U.S. dairy producers now have a new approved protocol for the synchronization of estrus in lactating dairy cows and we talked about it in Wednesday’s “New Product Watch.” The Food and Drug Administration has granted approval exclusively for the concurrent use of Pfizer’s Lutalyse sterile solution and Eazi-Breed CIDR cattle inserts in dairy and beef breeding programs.

Pfizer veterinarian Dr. Gary Neubauer pointed out that, with the increased awareness of milk quality, wholesomeness, and safety we’re seeing, extra label drug use is “coming under a much bigger scope.” Current regulations on synchronization programs didn’t allow for concurrent usages of GnRH products, prostaglandin products like Lutalyse and the Eazi-Breed CIDR, Neubauer said, so Pfizer invested its time and resources to make these tools available to producers that are “on label and therefore conform to regulations that are becoming more and more strict.”

He also pointed to consumer perceptions and emphasized the importance of “staying on label because that has the rigor of the FDA approval process.” FDA has “looked at all these issues with concurrent use of these various products for synchronization programs,” he said, and “it allows us to confidently use some of these products on an on label usage and we never had that opportunity before.”

What does this mean for the dairy’s bottom line? Neubauer answered, listing the improvement of the efficiency of heat detection, more timely first service abilities, and a reduction in the variation of calving intervals. “All of these will help the bottom line for our dairy producers and their reproductive programs,” he said.

He also stated that Pfizer has been a world leader in dairy reproductive and research support and “continues to develop new ways for producers and veterinarians to get even better results from our line of reproductive solutions and is why it continues to invest and support various university reproductive trials.”

(March 22, 2011) February butter stocks totaled 138.7 million pounds, up 19.9 million pounds or 17 percent from January but 64.2 million pounds or 32 percent below February 2010, according to preliminary data in the Agriculture Department’s latest Cold Storage report issued Tuesday afternoon. 

The January American cheese inventory, at 622.2 million pounds, was down 15.7 million pounds, or 2 percent from January, but 23 million pounds or 4 percent above a year ago. 

Total cheese stocks amounted to over 1.036 billion pounds, and was down 16.4 million pounds or 2 percent from January, but 40 million pounds or 4 percent above a year ago.

Market Talk with Mary Ledman
(March 22, 2011) Perhaps the most interesting part of Friday's Milk Production report is the cow number data, according to Mary Ledman, Principle of Keough Ledman, and Associates, Inc. in Libertyville, Illinois. Speaking in Tuesday’s DairyLine broadcast, Ledman said the report didn’t affect Monday’s market because it was “more of the same” but cow numbers data may be revised upward because, to be unchanged following a 16,000 head increase in December and January is hard to believe.  

“Clearly dairy farmers have seen the signals in their milk checks to produce more milk,” Ledman said. “They’re going to get a big signal in April to produce more milk even though the cheese market has turned, farmers will still have that market signal to produce more milk in April and May.”

The cash block cheese market, in heavy trading, dropped another 3 1/2 cents Monday, slipping to $1.65 per pound, while the barrels held at $1.70 with no activity. Twenty five carloads of block changed hands, but Ledman called it “the silver lining,” because several buyers purchased the cheese, not just one or two.

The $1.65 per pound may not be a “strong line in the sand,” she said, but “it’s clearly a level of support with so many buys coming in at this level.” She doesn’t anticipate much more of a decline and, over the course of the new few weeks, the 5-cent block-barrel spread will return to more normal levels.

The cash butter price lost another penny Monday, slipping to $2.06, but that’s still a strong butter price and the highest ever for this time of the year, according to Ledman, and “is consistent with where the world markets are and if there’s one thing that we’re learned this past year is that it’s not just the nonfat dry milk market that’s tied to the global market, it’s really the butterfat market as well.”

She believes it will trade above $2 until the Easter/Passover buy is in but, by mid April, she anticipates a downturn because of “the significant quantity of milk in the flush period that will probably push the butter market below $2 a pound,” but she doesn’t expect a major correction like what we saw in the cheese market.  

(March 21, 2011) California dairy producer and Dairy Management Incorporated board member Brad Scott talked about dairy checkoff partnerships with DairyLine’s Bill Baker at the recent World Ag Expo. That conversation aired on Monday’s “DMI Update.”

He said that Expo provided a great opportunity to talk with fellow dairy producers about the checkoff and he gave high praise for the partnerships formed with McDonalds and Domino’s to name a few.

“When you can partner with these kinds of entities and they’re out there helping you promote and sell your product, they bring a lot of name recognition, they bring money as far as support and as we keep going in the future it’s not just us promoting the product,” Scott said. “It’s these partners that are so important that they are working with us and with our efforts and their efforts matching we are really accomplishing a lot of ground.”

He pointed to the menus at McDonalds and the many things they have on there their desert lines, cheeseburgers with extra cheese, “they are just a real dairy destination,” Scott said, “Which we’re really glad to see and the fact that we’re working with them as a partner, we got a lot more bang for our checkoff money.”

He also discussed Domino’s “Smart Slice” pizza which was developed with assistance from the dairy checkoff that is now available in schools to help meet government dietary guidelines. “We know it’s a challenge to maintain our presence there (in schools),” he concluded, “But at the same time we have a great partner like Domino’s who’s willing to work on these issues and it shows that cheese on pizza, being on the school lunch program, has a lot of nutritional benefit in a healthy diet.”  

The Class III advanced pricing factor became the “higher of” in driving the Class I value for the first time since March 2010 and National Milk’s Roger Cryan does not expect an MILC payment for producers.

The two-week, NASS-surveyed butter price averaged $2.0363 per pound, down 4.6 cents from a month ago. Nonfat dry milk averaged $1.4733, up 12.7 cents. Dry whey averaged 46.18 cents, up 4.7 cents, and cheese averaged $1.9735, up 33 1/2-cents from a month ago.  

February Milk Production Up 2.4%
(March 18, 2011) February milk production in the top 23 states totaled 14 billion pounds, up 2.4 percent from February 2010, according to preliminary data in the USDA’s latest Milk Production report issued this afternoon. Output in the 50 states amounted to 15 billion pounds, up 2 percent. Revisions reduced the preliminary January total by 21 million pounds, to 15.2 billion, still 2.5 percent more than January 2010.

February cow numbers totaled 8.4 million head, unchanged from January, but 81,000 more than a year ago. Output per cow averaged 1,666 pounds, up 24 pounds from a year ago.

California milk output was up 2.4 percent from a year ago, thanks to a 50 pound gain per cow. Cow numbers were down 8,000 head. Wisconsin was up a half percent on 6,000 more cows. Output per cow was unchanged. New York was up 3.8 percent on a 60-pound gain per cow. Cow numbers were unchanged. Idaho was up 3.4 percent, thanks to 19,000 more cows. Output per cow was unchanged. Pennsylvania was down 0.2 percent due to a loss of 10 pounds per cow. Cow numbers were up 2,000 head however, and Minnesota was down 0.8 percent on a 15 pound per cow loss. Cow numbers were up a thousand head.

The biggest gain was in Florida, up a whopping 12.2 percent, followed by Texas, up 8.8 percent, and Arizona, up 7.3 percent. Illinois recorded the biggest loss, down 3.2 percent, followed by Missouri, down 2.7 percent, and Minnesota.

Events in Japan Part of PDPW Discussion
(March 18, 2011) The events in Japan were part of the discussion this week in Madison at the annual business conference of the Professional Dairy Producers of Wisconsin (PDPW). Dairy Profit Weekly editor Dave Natzke was there and reported in his Friday DairyLine program that Virginia Tech emeritus agricultural economist David Kohl warned PDPW members the ongoing crisis in Japan could impact U.S. dairy producers on multiple fronts. 

“With commodity markets being driven both by supply-demand issues and confidence in financial markets, and due to the size and global influence of the Japanese economy,” Natzke warned, “Corn and soybean futures prices are moving up and down based on how effective the markets feel Japan is at containing fallout from failing nuclear reactors,” according to Kohl. 

“And, as we saw earlier this week in Fonterra’s Global Dairy Trade auction,  the uncertainty in financial markets has already driven down milk powder prices, with prices down 1013 percent from two weeks ago,” Natzke said. 

Kohl predicted that, while the price decline in feed commodities is welcomed by farmers buying feed, both grain and dairy markets will likely become even more volatile, making the timing of purchasing and selling decisions critical.  

The impact could reach beyond commodity prices to credit availability and interest rates, according to Kohl, because, while most news reports cite China’s control of large shares of U.S. debt, Japan is actually the biggest lender to the U.S. As Japan struggles to recover to rebuild its infrastructure, less money will be available on the world credit market, causing interest rates to rise, Kohl said. 

Closer to home, Kohl warned the U.S. economy is not “out of the woods,” noting housing, unemployment and government debt are “headwinds.” He warned that $4 per gallon gasoline prices have both a financial and psychological impact on consumers, causing them to pull back on purchasing plans. 

Using a football analogy, Kohl urged dairy producers to “play offense by managing their revenues; defense, by managing their input costs; and special teams, by managing credit and interest rates.”