Posted: June 13, 2008 at 1:21 pm
By Cindy
Dairy Markets Week in Review
The cash block cheese market continued to weaken the second week of June and closed Friday at $2.04 per pound, down 12 cents on the week, and just 4 cents above a year ago. Barrel closed at $2.15, unchanged on the week, 10 cents above a year ago, and 11 cents above the blocks.
Sixteen cars of block traded hands on the week and none of barrel. The NASS-surveyed U.S. block average hit $2.1630, up 9.1 cents, while barrel averaged $2.2152, up 7.8 cents.
Butter closed at $1.4775, down a quarter-cent, and a quarter-cent below a year ago. Four cars sold. NASS butter averaged $1.4741, down 0.2 cent.
Nonfat dry milk averaged $1.3613, up 2.3 cents. Dry whey averaged 27.61 cents, up a half-cent. There were a couple of sales of nonfat dry milk in the cash market this week but prices were unchanged. Grade A held at $1.4650 and Extra Grade at $1.46.
Provided courtesy of Dairyline.
Posted: June 2, 2008 at 9:51 am
By Laura McNamara
Allegations of dairy price fixing are still, well, milky. It’s been almost two weeks since the Wall Street Journal reported that federal commodity regulators were investigating Dairy Farmers of America for price fixing and manipulation. The farmer-owned dairy cooperative controls about one third of the nation’s milk supply.
Monica Coleman, a spokeswoman for the Dairy Farmers of America, said the Commodity Futures Trading Commission is looking into the group’s trading of cheese futures on the Chicago Mercantile Exchange.
The price of cheese futures can impact milk prices. The Department of Agriculture sets a minimum price of milk that is based in part on a survey of cheese prices that includes futures prices…
The Journal reported that the CFTC is preparing to bring charges against DFA.
“We do not believe we have violated any laws, and we have and will continue to cooperate,” Rick Smith, president and chief executive of the DFA, said in a statement.
The price of milk jumped 13.5 percent in the past year, according to the Bureau of Labor Statistics, but Coleman said the “alleged activity is from 2004 and does not affect milk prices today.”
A spokesman for the CFTC would neither confirm or deny any investigation.
The DFA markets 61.7 billion pounds of milk for more than 19,000 dairy farm members.
Click here to view the entire article on CNNMoney.com.
Posted: May 30, 2008 at 5:20 pm
By News Editor
Dairy farmers in Germany are dumping their milk to boycott the declining price paid to them for their production.
While global food prices have soared, milk prices here have fallen by almost a third this year, the Federation of German Dairy Farmers said, in part because the European Union decided to raise its production quotas. Prices fell even as milk production costs for staples like fuel and feed rose by a quarter. So in a desperate effort to force a price increase, the dairy farmers began a delivery boycott on Tuesday.
The federation estimated that around 10.6 million gallons of milk — up to 60 percent of the country’s production — was dumped, fed to other animals or used for fertilizer on Wednesday alone. The strike had not yet affected grocery store shelves. Milk producers in neighboring countries, including Belgium and Austria, urged dairy farmers to join the strike or at least not to export to Germany.
Posted: March 6, 2008 at 4:06 pm
By News Editor
Here’s your chance to comment on amendments the USDA has made to three Southeastern Federal orders. The changes were made based on testimony and evidence given at a public hearing in Tampa, Fla. in May 2007. All comments are due by April 29.
USDA has amended the three Southeastern Federal orders by raising their Class I prices. The interim decision raises Class I differentials in the Florida, Appalachian, and Southeast markets by between 10¢ in Louisville, Kentucky, and $1.40 in Miami, Florida. Similarly, the transportation credit programs in the Appalachian and Southeast markets have also been expanded. Other provisions in these two markets will reduce the volume of pooled milk that a handler can divert to non-pool plants, but reduce the number of days that a producer’s milk must be delivered to a pool plant, in order to simplify hauling logistics.
This decision is based on testimony and evidence given at a public hearing held at Tampa, Fla., May 21-23, 2007. USDA will conduct referendums to determine if producers approve the amended orders. If approved, USDA will issue an interim order making the amendments effective.
Posted: March 4, 2008 at 7:24 pm
By News Editor
Five dairy farmers representing Pennsylvania, New York, Wisconsin, Minnesota and California held a press conference on Monday to help bring awareness to the dropping milk price and the rising cost of inputs.
It comes at a time when the price for class I milk dropped more than $5 since September, along with a $7.20 drop for class IV milk. To compound the situation, dairy farmers in Pennsylvania can expect a 25 to 35 percent increase this spring in the cost it takes to produce milk. In January, area dairy farmers received around $22 per hundredweight for their milk, and Arden Tewksbury of Pennsylvania Progressive Agriculture Organization in Meshoppen said it costs Pennsylvania farmers $27.59 to produce 100 pounds of milk.
In January, Tewksbury predicted milk prices to drop $4 per hundredweight this spring. If that happens, the price farmers would receive for their milk would drop to $18, while the cost to produce it would jump to over $30.
“It may be worse than we predicted,” Tewksbury said. “Dairy farmers are not receiving a realistic price that covers the average cost of producing milk.”
Price-support programs, such as the Milk Income Loss Contract (MILC), are ineffective, according to Wisconsin dairy farmer Joel Greeno.
“If milk prices were to drop to levels that the MILC would kick in, I would be losing $3,375 a month,” he said. “It would be pretty hard to pay the bills on that.”
Minnesota dairy farmer LoriJayne Grahn said the cost of production factor is critical because dairy farmers have no ability to raise their prices. The answer, she said, lies in the cost of production, and the matter almost became a reality last year when U.S. Sens. Robert Casey, D-Scranton, and Arlen Specter, R-Philadelphia, introduced Senate Bill 1722.
Tewksbury said the bill incorporates national cost of production into the pricing formula, eliminates hauling charges for farmers and implements a supply management program that can kick in when milk exports equal imports. The bill has sat in the Senate Committee on Agriculture, Nutrition and Forestry since last June.
“Presently, the value of milk across the country is basically the same, and dairy farmers from every state agree we need a new pricing formula,” Tewksbury said. “We’re hoping we can get bill 1722 moving or something similar to it.”
Casey also attempted to include the cost of production as an amendment to the 2008 Farm Bill but failed to garner support from his fellow senators.
Posted: January 9, 2008 at 5:57 pm
By News Editor
Farm prices have been in the news this week - corn prices could rise to $4.75 per bushel, while the year in reveiw shows that the Class III price for 2007 averaged $18.04 (a record hgh) and the weekly average block cheese price was $1.7586 (another record high).
Corn prices could push into the $4.75-per-bushel range this year, says Chris Hurt, Purdue University agriculture economist. A 6 percent drop in corn acreage is not unlikely, Hurt notes, as a short supply of crops globally (particularly wheat and soybeans) will have some out-bidding corn for acreage. As for ethanol, new plant openings in the first half of 2008 will push production from the current 7.3 billion gallons up to 11.8 billion gallons. The corn necessary to feed that capacity will grow from about 2.5 billion bushels today to 4 billion bushels by July, Hurt notes. That capacity will grow by another 500,000 bushels in the second half of the year.
With the December Class III price now in, the Class III price will average $18.04 for 2007. That is a new record high, topping the previous record of $15.39 set in 2004. The 2007 Class IV price also sets a new record average of $18.36. The previous record holder was $14.85 set in 1998.
Weekly average block and barrel cheese prices at the Chicago Mercantile Exchange also boasted new record annual highs last year. The annual average of all the weekly average block prices in 2007 is $1.7586, up nearly 52 cents from 2006, according to the USDA’s Agricultural Marketing Service. The new annual record high for barrel prices is $1.7404, also up 52 cents from 2006.
Posted: August 31, 2007 at 5:43 pm
By News Editor
A great article that explains how milk prices are effected in easy terms for consumers - and let’s them know that dairy producers aren’t the ones setting the retail price.
Consumer and dairy managers continue to wonder when and if the price of milk and dairy products will decline, said a University of Illinois Extension dairy specialist.
“In June 2007, a gallon of milk was 43 cents higher in price than in June 2006 and butter was up 18 cents per pound over the same period, according to the USDA,” said Michael Hutjens. “However, prices can vary greatly among regions and within states.”
Several factors will impact consumer prices for milk and dairy products in the future, he added.
“With school starting, milk consumption can increase along with more emphasis on low-fat milk and nutritionally desirable beverages,” he said. “A weak U.S. dollar makes exporting U.S. dairy products cheaper and milk production quotas in Canada and the European Union limit additional production in those areas.
“Finally, Chinese demand for dairy products continues to expand.”
For the dairy farmer, milk prices have increased from $14.50 per 100 pounds in January 2007 to $21.70 in July.
“While the farm-gate milk prices are expected to drop, fall prices may reach $18 per hundredweight — higher than earlier estimates,” he said.
Among the factors impacting milk production this fall are:
Heat stress in the late summer which can reduce milk and crop yields; n The availability of more replacement heifers to begin milking (42.6 heifers per 100 cows in July 2007 compared to 41.5 heifers per 100 cows in July 2006); Replacement heifer prices have increased $200 per head in one month, reaching $1,950 per animal, which can reduce the sale of heifers; A milk-to-feed ratio of 3.19. When the ratio is over 3, it signals dairy managers to increase milk production as feed is relatively less expensive compared to milk prices.
Consumers have been choosing more milk and dairy products. Dairy product consumption in 2006 averaged 606 pounds of milk equivalent, the highest figure since 1987. Cheese led the way with an average of 31.2 pounds per person and fluid milk consumption was up three pounds, reversing a downward historical trend.
The rising milk price has put pressure on other segments of the dairy industry.
“Pizza prices are increasing,” said Hutjens. “Hershey and Dean’s milk report lower profits, and Starbucks has increased their milk/coffee beverage price by nine cents.
“Consumers may be able to look ahead to lower milk prices, but they may see a drop of 50 cents a gallon near the holiday season.”
Posted: August 28, 2007 at 7:56 pm
By News Editor
A group of Vermont dairy farmers has gain momentum for a plan to help stabilize milk prices - two large California cooperatives has expressed interest in backing the plan. The proposal would call for dairy producers to pay 15-cents per hundred weight of milk sold.
A grass-roots group of Vermont dairy farmers has won backing from two California dairy cooperatives for a plan designed to bring stability to see-saw prices paid to the nation’s farmers for their milk.
Margaret Huessy-Laggis of Hardwick, a member of the Vermont-based Dairy Farmers Working Together organization, said representatives for the California-based Milk Producers Council and Western United Dairymen agreed to support the plan during a meeting last week in Chicago of dairy farmers from around the country.
The two California cooperatives represent 1,100 of California’s estimated 1,800 dairy farmers.
“It’s astounding,” Huessy-Laggis said. “We have farmers in Florida, Vermont, Wisconsin and California who all agree on one plan. I don’t think that has ever happened before.”
The plan being pushed by the Vermont group would require all dairy farmers to pay 15 cents for every 100 pounds of milk they produce into a fund that would be used to stabilize the price paid to farmers and help leverage international deals for milk products.
The group has been traveling the country and meeting with farmers to gain support for the plan, hoping the effort will lead to the plan’s inclusion in this year’s congressional rewrite of the Farm Bill. Under the plan, federal subsidies paid to dairy farmers would end.
Geoffrey Vanden Huevel of the Milk Producers Council of Chino, Calif., said Monday in an interview that his group is ready to support the plan if a Cornell University dairy economist’s report on the Vermont plan mirrors what the economist told the farmers meeting in Chicago last week. He said he dropped an alternative plan he was promoting in favor of the Vermont plan because the Vermont plan is more acceptable to the owners of large and small dairy farms. Farmers from 10 states participated in the meeting Thursday in Chicago, in person or by telephone.
Huessy-Laggis said her group hopes to pitch its plan to the St. Albans Cooperative Creamery Inc. this week and is seeking support from the Kansas City-based Dairy Farmers of America, the nation’s largest milk cooperative. A group of Vermont farmers also plans to travel to Oregon and Washington next week to talk up its plan with dairy farmers in those two states, she said.
Posted: June 14, 2007 at 6:28 pm
By News Editor
Pennsylvania’s Governor Rendell is pleased with the action of the Pennsylvania Milk Marketing Board to possibly capture over-order premiums for milk sold out-of-state.
Governor Rendell petitioned the board last year to use its authority to capture over-order premiums in other marketing areas, a move that would boost the profitability of Pennsylvania dairy producers.
The board agreed to consider the part of the Governor’s recommendation that would establish over-order premiums on milk produced and processed in Pennsylvania and sold in states with mandated producer premium. This change, if implemented, will make approximately 6.5 percent more Pennsylvania milk eligible for a premium.
Milk produced, processed and sold within the commonwealth receives a premium above the latest federal order milk price. However, if milk is processed or retailed in another marketing area, producers do not receive that money. Only 15-percent of the fluid milk produced in Pennsylvania is eligible for current premiums. By capturing a larger portion that is available in the marketplace, the state’s producers will increase their income.
Posted: May 30, 2007 at 7:19 pm
By News Editor
Wisconsin farmers, and other dairy producers across the country, are optimistic as milk prices rise to levels that haven’t been seen in almost five years. With fuel prices and the demand for corn-based ethanol, producers are hoping the increase in the milk price will help offset the dramatically increased expensses.
“That’s the nature of farming and the commodity markets,” said Mike Wildeck, dairy agent for the University of Wisconsin-Extension Marathon County. “It’s supply and demand, and it’s a perishable product. It’s very cyclical.
“You have times when you can’t make ends meet and you’re cutting corners, and other times you get caught up on bills and maybe replace some machinery.”
The average price for Wisconsin milk in April was $17.20 per hundredweight, according to the U.S. Department of Agriculture’s Wisconsin field office. That’s up $4.70 from a year ago.
Last year, Wisconsin farmers earned an average of $13.30 per hundredweight for their milk, $2.30 less than the 2005 average. Corn prices have been rising as a result of demand for the corn-based fuel ethanol.
“They don’t hit the home run and hit the high price, but they kind of even out the the roller coaster,” Wildeck said. “It’s hard to run a business when it’s feast and famine.”
Posted: May 10, 2007 at 7:34 pm
By News Editor
The National Milk Producers Federation’s Federal Order task force met for the first time this week in Chicago. The goal of the committee is to try to improve the existing Federal Milk Marketing Order system
The fourteen member of the task force discussed what types of changes will most benefit dairy farmers and the cooperatives they own, along with milk processors.
Dave Fuhrman, CEO of Foremost Farms of Baraboo, WI, and task force chairman noted that the task force members did all concur that the industry is better with the Federal Order system than without it, and their efforts would focus on building up the system, not dismantling it. He also said that a self-help effort such as this one, undertaken by NMPF, “is preferable to a government-mandated one,” which is what some in Congress are discussing. “What we do here will have a real-world impact on the dairy sector,” Fuhrman said.
The task force agreed that deadlines need to set for the Federal Order hearing process. All members expressed concern over the length of time it takes from point at which a request for a hearing is filed with USDA, to a final decision being issued. The ongoing hearing examining Class III and IV manufacturing allowances is an apt illustration of how long such hearings can take, task force members agreed.
“The plan is to expand participation in this process to others in the industry, with the goal of being able to move forward with improvements to the Federal Milk Marketing Order system in a year,” said Jerry Kozak, NMPF President and CEO.
Posted: April 25, 2007 at 5:19 pm
By News Editor
This week, Congressman Leonard Boswell, Chairman of the House Agriculture Committee’s Subcommittee on Livestock, Dairy and Poultry, held a hearing to review the Federal Milk Marketing Order rulemaking procedures. The Federal Milk Marketing Orders were established in the 1930’s to make sure that milk, which is a highly perishable product, reached consumers at a fair price and in a time sensitive fashion. Periodically, the Agriculture Committee reviews the order rulemaking procedures to make sure they are keeping up with new product development and dairy production.
“After hearing much of the testimony, there is consensus throughout the dairy industry that the rulemaking procedures take too long. We must ensure that the process is quick and efficient, and represents what the dairy market in 2007 looks like. As we approach the 2007 Farm Bill, we will be looking at different proposals to change the Federal Milk Marketing Order system, perhaps creating a commission to look at ways to streamline the system,” Subcommittee Chairman Boswell said.
“The industry faces some fairly cumbersome hurdles, both administrative and legislative, that only serve to hamper efforts to improve the orders for all participants. It is clear that the government needs to be a facilitator, and not an impediment, to ournation’s dairy farmers and today’s hearing reemphasized that there is a consensus among the industry that more needs to be done. Since dairy is the only Farm Bill program that this subcommittee has jurisdiction over, I look forward to working with them as we move forward in this process,” said Subcommittee Ranking Member Robin Hayes.
Posted: April 24, 2007 at 7:39 pm
By News Editor
National Milk Producers Federation is calling for the USDA to a change the reviewing protocols of product pricing and inventory data it collects. Recently, it was discovered that nonfat dry milk prices have not been reported accurately in monthly government surveys.
The USDA last week said that the National Agricultural Statistics Service (NASS) had been collecting price data on nonfat dry milk sales that did not accurately reflect current market prices for the product. NASS officials will now go back 52 weeks to review pricing data for other nonfat dry milk sales in an attempt to clarify the veracity of its historic pricing data. Those reported prices are part of the information used to calculate the price that farmers receive each month in their milk checks.
Back in October 2000, Congress passed legislation requiring the reporting of dairy product inventories and prices. The law gave the USDA the authority to require dairy manufacturing plants to report any data having an impact on product prices, including both sales and products stored in inventory. That data was to be subject to mandatory reporting and auditing. NMPF was the lead organization pushing Congress to pass a law giving the government additional product data collection capabilities.
But because of confusion and delays over the intent of the legislation, the NASS still does not have the full ability to audit such data, meaning the accuracy of its current reports may be suspect. Such was the case in 2000, when a warehouse reporting error resulted in a 32% miscalculation in domestic butter stocks. A similar situation occurred in 1999, when millions of pounds of cheese suddenly appeared in the NASS cold storage report. Both errors resulted in a sharp drop in farm-level milk prices.
Posted: April 23, 2007 at 5:06 pm
By News Editor
The latest milk price predictions from Bob Cropp, University of Wisconsin-Madison. Prices will continue to be strong in 2007.
Milk production growth continues to slow from the 2% even 5% monthly increases from the previous year during 2006. This has been a major factor in strengthening milk prices this year. Compared to year earlier, March milk production for the 23 reporting states was up 1.1 percent. Milk cows were 0.7% more than a year ago, but a continued low increase in milk per cow of just 0.4% held down the increase in total milk production.
Two major factors will hold down milk production in the months ahead. One is cow slaughter which is running well above a year ago. Strong milk prices will require a continued decline in milk cow numbers as the year progresses. Such a decline is still forecasted with the average number of cows for the year down about 0.3% compared to 2006. The second that will slow milk production is high feed prices and reduce use of BST will continue to slow increases in milk per cow. Despite March milk prices almost $4.00 higher than a year ago much higher feed prices resulted in a milk-feed-price ratio just 2.41, down from 2.70 March a year ago. Not only has corn and soybean prices been much higher than a year ago, the price of alfalfa hay was also 20 percent higher. The new hay crop and green chop is just beginning in California which may ease hay prices some in that state.
The March Class III price was $15.09, $3.98 higher than a year ago. Cheese, dry whey and butter prices have all strengthened since then. The April Class III price will be around $16.00. A major factor in higher milk prices has been high dry whey prices. Central dry whey prices are running $0.76 to $0.825 pound compared to just $0.30 to $0.3375 a year ago. Dry whey prices are part of the Class III formula price and for every one cent increase in dry whey prices the Class III price increases about $0.06.
In summary, all factors point to much higher milk prices for all of 2007 offsetting some of the higher feed prices. But, it is still uncertain whether cheese and dry whey prices will hold at levels that will allow current Class III futures prices to materialize. But, also if summer weather is unfavorable to milk production, prices this summer and early fall could be even high. Higher prices may result in some demand resistance similar to what occurred with record high prices in 2004.
Posted: March 29, 2007 at 4:57 pm
By News Editor
Dr. Ken Bailey from Penn State is predicting milk prices to rise from January’s $14.50 to a peak of $16.62 in August. But, along with that, Bailey is also predicting higher retail prices for consumers.
Ken Bailey, a milk-marketing expert in Penn State’s College of Agricultural Sciences, projects the average retail price of whole milk to rise to about $3.35 by October, up from $3.07 in January. Butter, yogurt, ice cream and cheese prices also will rise, and it’s not known when prices will subside.
But that doesn’t mean a windfall for dairy farmers, still squeezed from last year’s low milk prices. Dairy farmers are paying more for cow feed, since corn and soybean prices have risen rapidly.
Bailey blames that rise on increasing demand for these feedstocks for ethanol production. The associate professor of agricultural economics said international demand for milk protein is very high, and global supplies are limited. Also, a strong export demand for dry proteins — skim milk powder, dry whey and whey protein concentrates — is leaving very low inventories for nonfat dry milk and dry whey.
The result is that domestic supplies of these milk protein products are limited and global market prices are rising. Consumers may also have to pay more for food items that depend on dairy products such as candy bars, bakery goods, and sports and nutrition bars.
Posted: February 26, 2007 at 6:54 pm
By News Editor
Dairy farmers in Vermont earned a small victory on Friday, the state’s governor, James Douglas, signed a law that will distribute $3 million dollars in assistance to them.
The checks will be mailed to as many as 1,100 farmers by the end of March. The amount they get will be based on how much milk they produced in January and February. The goal is to give farmers — who have been strapped by weather disasters, high fuel and feed costs and low milk prices — some cash assistance in coming weeks as they make decisions whether to plant their crops this spring or go out of business.
Douglas initially opposed assistance and the objected because the House was looking at raising a property sales tax to pay for it. Ultimately, the administration and Legislature found money elsewhere in state government to be spent on farmers.
Posted: February 6, 2007 at 7:15 pm
By News Editor
This is good news, for now. What do you think of the President’s plan?
Dairy farmers faced with falling milk prices would continue to get federal aid as part of a 2008 budget proposal announced Monday by President Bush. However, the president’s longer-term plan calls for reductions in the federal subsidy, which kicks in when milk prices fall below $16.94 per hundredweight for fluid milk.
The White House is asking Congress to continue the Milk Income Loss Contract subsides, called MILC, for fiscal year 2008 at the current rate. When milk prices drop, farmers are paid 34 percent of the difference between the base price of $16.94 per hundredweight and the market price in Boston.
However, the administration announced last week that its plan for a massive new five-year farm bill would begin to reduce the dairy subsidy beginning in fiscal year 2009. Instead of receiving 34 percent of the difference between the base price and the market price, farmers would get 31 percent in 2009, 28 percent in 2010, 25 percent in 2011 and 22 percent in 2012. The president’s plan also would reduce the amount of milk production eligible for the subsidy.
The program’s cost to taxpayers varies from year to year depending on fluctuations in milk prices. However, the overall cost of the subsidy from its beginning in 2002 through the end of this year is estimated at about $3 billion.
Posted: January 31, 2007 at 7:10 pm
By News Editor
Wisconsin dairy producers have their state’s congressional delegation reaching out to the USDA on their behalf.
Three members of Wisconsin’s Congressional delegation are calling on U.S. Agriculture Secretary Mike Johanns to reject changes to the federal milk marketing orders being considered by the USDA that could hurt the prices that Wisconsin dairy farmers receive.
Congressman Dave Obey, along with Senators Herb Kohl and Russ Feingold say the changes proposed by the National Milk Producers’ Federation (NMPF) would significantly alter classified pricing formulas by increasing prices paid to dairy farmers who produce milk for the fluid milk market, while undercutting those who’s milk goes to make cheese.
As part of the NMPF’s plan, the USDA would move the make allowance for cheddar cheese to 16.82 cents per pound of cheese, up from the current value of 16.5 cents. They would also raise the make allowance to produced dry whey to 19.56 cents per pound, up from 15.9 cents. The make allowance to produce butter would rise about one-half cent to 12.02 cents per pound and the cost of making nonfat dry milk rose from 14 cents to 15.7 cents per pound.
“For years, farmers in Wisconsin and Minnesota have suffered under outdated federal milk marketing orders that keep prices for milk that goes into fluid use high while paying farmers outside the Upper Midwest more for their milk through Class I dairy differentials,” Obey said. “Instead of considering proposals to bring regulation of dairy markets into the 21st century, USDA is considering a plan that would exacerbate the inequities and increase the market distortions caused by the archaic federal orders.”
Posted: January 23, 2007 at 6:28 pm
By News Editor
It’s always heartening to hear about stronger milk prices for our producers. Click here to read the entire story.
Higher feed prices will be partially offset by higher milk prices. The U.S. dairy herd is expected to decline modestly from 9,115 million in 2006 to 9,040 million in 2007. Recent dairy cow slaughter has been above a year earlier. Some of this slaughter likely is herd liquidation, but most of it may be replacement as cow numbers continued to rise in November and December. Production per cow will continue its incremental upward trend, topping 20 thousand pounds per cow in 2007. According to the December Dairy Products report, November production of cheese, butter, and nonfat dry milk are ahead of year-earlier levels. Low unemployment and robust job creation during the fourth quarter of 2006, combined with rising wages and smaller increases in milk production, should provide a foundation for higher dairy product prices in 2007. Cheese prices finished 2006 at $1.247 per pound, 24 cents lower than 2005. The outlook is for the cheese price to strengthen in 2007 and the season-average price is forecast at $1.310 to $1.390 per pound.
Butter supplies will be ample in light of strong dry product demand. Butter price should stage a recovery in 2007. The butter price averaged $1.219 per pound in 2006, 32 cents lower than 2005. The 2007 price is forecast to climb to $1.235 to $1.345 per pound.
The 2006 Class IV price averaged $11.06 per cwt. In 2007, the price is forecast to rise to $11.35 to $12.25 per cwt. Class III price averaged $11.89 per cwt in 2006 and is expected to climb to $12.50 to $13.30 per cwt in 2007. The resulting reported allmilk price is expected to be $13.60 to $14.40 per cwt. for 2007, after averaging $12.91 per cwt. in 2006.
Posted: January 17, 2007 at 6:22 pm
By News Editor
Seems that the milk price is a universal discussion among dairy producers. French dairymen are feeling the sting of a low price too.
Milk producers in France have used an industry meeting to call for higher farmgate prices and again condemn cuts over the last five years, revealing ongoing tension between farmers and dairy firms in the EU.
Representatives from France’s farming union, Confederation Paysanne, told members of the national dairy industry body that milk price cuts had chopped 30,000 producers out of the industry in the last five years. The move reveals ongoing tension in France’s dairy industry, similar to that seen in the UK and other states over the amount of money passed down the supply chain.
Average milk prices paid to French producers have fallen €0.5 over the last five years, the biggest drop across the 15 pre-accession European Union nations. The shock has hit French milk producers hard because they were Europe’s highest paid.
It has prompted fighting talk from some. “If the government wants to declare war on farmers, we will rise to the challenge and we will continue to victory,” said Jean-Emile Sanchez in Montpellier, one of those convicted in the Lactalis break-in.
Milk prices are expected to rise slightly over the next couple of months thanks to more favourable market conditions, namely higher demand.
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