D
A I R Y
L I N E
Issued April 16, 2004
By Lee Mielke
Wholesale dairy product prices continue to climb and set new records. The cash
block cheese market finally had a sale the week of April 12, the first one since
March 9th. The price had been moving higher on bids in hopes of
bringing sellers to the market. Block closed Friday at a record $2.20 per pound,
up 7 1/4-cents on the week, and $1.08 above a year ago. Barrel closed at a
record $2.1550, up 5 1/2-cents on the week, and $1.0650 above a year ago. But,
only one car of block was sold and two of barrel. The NASS-surveyed
Cash butter hit $2.3450 per pound, up 11 1/4 on the week, and $1.2475 above a year ago. 75 cars were sold but the price is still a ways from the record $2.81 per pound reached in late September 1998. NASS butter averaged $2.1134, up 7.9 cents. NASS dry whey added another 1.6 cents, hitting 25.49 cents per pound.
Cash-traded Grade “A” and “Extra Grade” nonfat dry milk advanced another penny and a half and closed Friday at 92 cents per pound. Uncle Sam halted the sell-back of powder to the industry. 75.7 million pounds had been sold the last five weeks. Market analyst Jerry Dryer told DairyLine that stocks of powder less than a year old are depleted, due to government give-aways to cattlemen under draught assistance and various school lunch and feeding program exchanges.
Dryer reported Tuesday that some manufacturers are concerned there’ll be shortages later this summer. As to the gains in the NASS dry whey price, Dryer said it had been strengthening in some of the other markets but the gains hadn’t been reflected in the NASS survey where it impacts the milk price. The general rule, he said, is that every penny in the NASS dry whey price means about six cents on the Class III milk price, so there’s about 21 cents. Best of all, Dryer looks for these gains to remain for several weeks “at the very least.”
But, his April 8th Dairy & Food Market Analyst warned that cheeseburgers are in trouble because fast food chains are reducing cheese usage to meet consumer demand for less fat. Call 1-800-243-7037 and ask him to e-mail or fax you a copy
USDA’s latest Livestock Dairy & Poultry Outlook pegs 2004 milk production at 170.1 billion pounds, down slightly from last month’s estimate, and compares to 170.3 billion in 2003, and 170.1 billion in 2002. The commercial use estimate, on a skim solids basis, was raised to 170.3 billion, up from last month’s 168.8 billion.
The Class III milk price average is expected to range $14.95-$15.45 per hundredweight, up from last month’s projection of $12.75-$13.35. The 2003 average was $11.42 and it hit $10.42 in 2002. The 2004 Class IV was projected at $12.40-$13.00, up from $12.05-$12.75 projected a month ago. It averaged $10.00 in 2003 and $10.81 in 2002.
The report also said that “Higher milk prices and tight dairy heifer supplies are resulting in much lower dairy cow slaughter than was expected earlier. First quarter dairy cow slaughter was down nearly 14 percent from a year ago.”
The higher milk prices, which media reports say will mean retail increases of 50 cents a gallon or more, aren’t going to help fluid milk sales. Competitiveness with other beverages is already an issue. USDA reports that fluid sales in February were already down 1.7 percent from a year ago, when adjusted for what the Agriculture Department describes as “calendar composition.”
And, while you can’t look at one month’s figures and come to any accurate assessment, and one can argue that the drop could have been far greater if it weren’t for the positive steps the industry has taken to spur sales, it’s still troubling. Flavored, fat-reduced milk sales jumped 7.9 percent, but whole milk, flavored whole milk, reduced fat, low fat, and fat-free sales all declined.
In politics, several dairy issues await Congress return after their Easter recess. National Milk’s Chris Galen said it’s “crunch time” for those issues because, with six months left before the November elections, “If things don’t happen in the spring session, then it’s going to be very difficult to get things done.”
NMPF’s number one legislative goal remains the passage of legislation imposing tariffs on imports of milk protein concentrate and casein. Galen said they have picked up more sponsors. About 40 percent of House members have signed on and a third of the Senate. Galen asked listeners to contact their elected officials and encourage their support of HB 1160 in the House and S560 in the Senate. He adds that the bills are opposed by dairy processors and food manufacturers.
Another important effort is to get the Senate to adopt the House version of the Child Nutrition Act. The House bill is very favorable to dairy, he said, but the Senate needs to pass similar legislation so producers need to communicate that.
NMPF has also written the USDA objecting to agency plans to open
The larger issue, he said, is that, until we have a national animal
identification program, and until we have harmonized feeding standards with
Canada and Mexico, National Milk believes it’s premature to open the borders
to any live animals, even those just going to meat packing plants. He recalled
how hard it was to trace those cows that came into the
Speaking of Mad Cow Disease, it’s been four months since its discovery in
In his weekly Friday DairyLine program, Dairy Profit Weekly Editor, Dave Natzke, reported that Japan is one of about 60 countries that have some form of ban on U.S. beef, and the Japanese government has demanded that the U.S. test all slaughter cattle for BSE before its border will be opened.
Vice-President Dick Cheney, on an eight-day tour of
Meanwhile, USDA just wrapped up a public comment period to gather input on
whether the
He reported on National Milk’s call for a national livestock identification
and tracking system and a stipulation that all female animals under 30 months of
age, including dairy heifers, be spayed before entering the
The Ranchers-Cattlemen Action Legal Fund, has threatened to sue the USDA if the borders are reopened, according to Natzke, and the National Farmers Union has stated that the American border should remain closed until mandatory country-of-origin food labeling is fully implemented.
USDA has also been taking comments on a federal ban on so-called "downer" cattle from the human food chain. A bill introduced in Congress would exclude any animals that suffer broken legs or other injuries not related to disease from the ban. Injured animals would be tested and their carcasses held out of the food system until test results showed the animals were BSE negative, he said.
Dairy Management Incorporated’s Amy Skovsende was back this week to discuss product innovation work. You’ll recall the checkoff sponsored an innovation forum in February for food and beverage manufacturers. This week she discussed how dairy proteins play a role in low carb, high protein foods.
Thanks to the late Dr. Robert Atkins, the low carb diet is very popular today and Skovsende said dairy proteins, like whey protein ingredients can help food manufacturers develop foods and beverages with fewer carbohydrates to meet the demands of consumers following a low carb lifestyle.
New additions to the freezer aisle at your local supermarket include low-carb ice creams and yogurt products, according to Skovsende. Dannin and Yoplait are just a couple names that are developing such products.
Another potential low carb area for growth for whey and dairy proteins, she said, is the bakery category for use in breads, cookies, cakes, brownies, and donuts. Pasta and cereal are also ideal for dairy protein ingredients, she said. Dairy, as foods and ingredients, play a major part in this growing trend and lifestyle and DMI, through the dairy checkoff program, can help food and dairy processors develop these products for this consumer lifestyle.