Posted: June 27, 2010 at 5:00 pm
By Cindy Zimmerman
Hundreds of dairy farmers attended a workshop Friday in Madison, Wisconsin on competition in the dairy industry held jointly by the U.S. Departments of Agriculture and Justice.
“This is the third session of these joint workshops which, from our perspective, have been and should continue to be a major success and an important example of government collaboration,” said Assistant Attorney General Christine Varney, opening the event with Agriculture Secretary Tom Vilsack. “We know that dairy farmers are concerned about a lack of choices for buyers, about the way that their milk is priced, and about a year of dispiriting returns for their labors. It is my hope that today’s conversations will allow us to bring attention and clarity to these issues, and help us to think hard about the role that the Department of Justice and the Department of Agriculture can play in promoting the health and competitiveness of dairy markets in these economic times.”
Panels at the workshop featured representatives from Congress, the Commodity Futures Trading Commission, dairy producing states, industry organizations and farmers themselves. Both of Wisconsin’s U.S. senators attended the event. Senator Russ Feingold says he worked to ensure there was adequate time allotted for the public to participate and raise their concerns directly with administration officials. “These workshops are incredibly important because these officials are getting out of Washington and hearing directly from the family farmers, cheese makers and others whose lives and livelihoods have been impacted by consolidation within the dairy industry,” Feingold said. “I am particularly pleased the administration followed my suggestion to have two public comment sessions.”
The Chicago Mercantile Exchange and its role in price volatility was the target of several complaints at the hearing. Sen. Herb Kohl emphasized the need to make sure dairy pricing is transparent and expressed concerns about potential market manipulation. “The Commodity Futures Trading Commission has reported that the volume of cheese traded in Chicago generally represented less than 1 percent of all cheese produced in the U.S.,” said Kohl. “This is a situation where the tail, controlled by a few traders in Chicago, can wag the dog of the market for milk across the country. At a time when Americans’ trust in financial markets is low, relying on a market that can be easily manipulated should worry all of us. I call on CFTC and the CME to strongly monitor the spot cheese market. We must have market transparency that ensures a fair price for farmers.”
The purpose of the workshop was to gather testimony from dairy industry representatives, which will be taken back to Washington and discussed by the two departments to determine what, if anything, can be done to address producer concerns.
Posted: April 5, 2010 at 2:54 pm
By News Editor
Take a moment to read the recent CEO comment by National Milk Producers Federation (NMPF) Jerry Kozak. It contains important information about the future of the dairy product price support program (DPPSP). Read the full column here.
In the 12 years I’ve been CEO of NMPF, we have vigorously defended the function and importance of the price support program. It’s been as essential a focus for NMPF as any other single policy item. In the 2008 Farm Bill, we actually worked to make improvements in it, shifting the focus away from supporting a milk price, and toward supporting key commodity prices.
But at the end of the day, this question remains: is the dairy product price support program the best use of federal resources to establish a safety net to help farmers cope with periods of low prices? Is it effective? I believe, the answer today on both counts, is no. Here are the major reasons why:
1. It reduces total demand for U.S. dairy products and dampens our ability to export, while encouraging more foreign imports into the U.S.
2. It acts as a disincentive to product innovation.
3. It supports dairy farmers all around the world and disadvantages U.S. dairy farmers.
4. It isn’t effectively managed to fulfill its objectives.
5. The price levels it seeks to achieve aren’t relevant to farmers in 2010.
For all of these reasons, what NMPF is now focused upon is a transitional process that shifts the resources previously invested in the dairy product price support program, to the income protection program that I have discussed previously.
In summary, discontinuing the DPPSP would eventually result in higher milk prices for U.S. dairy farmers. By focusing on indemnifying against poor margins, rather than on a milk price target that is clearly inadequate, we can create a more relevant safety net that allows for quicker price adjustments, reduced imports and greater exports. As a result of our DPPSP, the U.S. has become the world’s balancing plant. As time marches on, so, too, must our approach to helping farmers.
Source: National Milk Producers Federation
Posted: October 2, 2009 at 8:19 pm
By Cindy Zimmerman
The new fiscal year for the U.S. Department of Agriculture began October 1, but this week a 30-day continuing resolution was passed after an amendment by Senator Bernie Sanders (I-VT) was included to allocate $350 million in emergency dairy assistance under the budget.
The measure adopted by the conference committee specified $290 million for direct payments and $60 million for purchase of cheese. However, California Sen. Barbara Boxer placed a hold on the Fiscal Year 2010 Ag Appropriations bill, expressing concern that the emergency spending might discriminate against dairies in Western states, and requested a meeting with Secretary of Agriculture Tom Vilsack to discuss how the emergency spending will be allocated.
Sec. Vilsack says he wants to make sure the assistance is allocated correctly. “You can use the Milk Income Loss Contract (MILC) program, but that doesn’t necessarily benefit all the dairy farmers,” Vilsack said Thursday after a meeting with members of the Congressional Dairy Farmer Caucus. “Dairy farmers in California have probably already reached their limit, so you have to look at creative ways to help them at the same time you are helping the dairy farmers across the country.”
Vilsack advocates a more long term solution to the dairy industry situation. “We have to come up with a process in dairy that shrinks the instability in the pricing. What we have now is a boom and bust cycle, what we really need is more stable pricing.”
Posted: October 1, 2009 at 3:03 pm
By Cindy Zimmerman
World Dairy Expo Photo Album
World Dairy Diary coverage of World Dairy Expo is sponsored by:
This edition of the Milking Parlor podcast focuses on the Dairy Price Stabilization Program proposed by Holstein Association USA as a way to address the current dairy industry economic situation and minimize milk price volatility for the long term.
I spoke with John Meyer, executive secretary and CEO of Holstein Association USA, about the plan during an interview at World Dairy Expo. “One of the beauties of this program is that nothing has to be affected,” Meyer says. “The Dairy Price Stabilization Program does not require the Farm Bill to be opened, nor does it affect any of the current dairy programs. It’s a very simple thing to be implemented and it can be done very quickly.”
Meyer says they are getting good industry support for the plan and hope to get a bill written and considered by Congress, possibly as early as the end of this year.
Listen to this podcast here:
milking-parlor-wdx09.mp3
Subscribe to the Milking Parlor podcast here.
Listen to or download this podcast here:
Podcast: Play in new window
| Download
Posted: September 21, 2009 at 5:16 pm
By News Editor
The National Milk Producers Federation’s (NMPF) Strategic Planning Task Force agreed last Friday to pursue a four-part approach to implementing sweeping changes as to how federal dairy policies protect producers and how farm-level milk prices are established.
Recognizing the need to promote programs that will help reduce price volatility and protect producer income, the Task Force agreed last week at a meeting in Chicago to take action on the further development of a multi-pronged approach that, if fully implemented, would assist in maintaining the on-going viability of the nation’s dairy farms and revise some of the more perplexing and less popular aspects of the national milk pricing system.
The four features of NMPF’s plan include: revamping the safety nets of the Dairy Product Price Support and Milk Income Loss Contract programs; creating a new dairy producer income insurance program; addressing the need to improve participation in the producer self-help program, Cooperatives Working Together (cwt), while allowing it to better address periodic imbalances in the milk supply; and reforming the Federal Milk Marketing Order program.
“These four tracks are the foundation for a new future direction for milk pricing in the U.S.,” said Jerry Kozak, President and CEO of NMPF. “With the concurrence of the Task Force, we will immediately begin hammering out the specific details of each element of this new and comprehensive program. We will move quickly, but responsibly, to fashion a dairy safety net and milk pricing system that work in tandem, leveraging the outcome of one program to the benefit of another, whenever possible. For example, we believe a producer income insurance program can be structured to achieve a measure of production control now advocated by a segment of our industry.”
“We shouldn’t underestimate how big a challenge these changes represent, but we also shouldn’t underestimate the shared desired to dramatically alter the current system. Both the Task Force members and our staff recognize that the status quo is not as attractive as the potential to make far-reaching, positive changes down the road,” Kozak said.
The Strategic Planning Task Force has been meeting to analyze what long-term steps are in the best interests of the U.S. dairy producer sector. As a result of Friday’s meeting, the Task Force instructed NMPF staff to immediately begin fleshing out the operational aspects of the four elements.
In particular, the Task Force is pursuing how an income insurance program would be designed in such a way as to provide a better safety net to protect the net profit margins of farmers, which the current price support program and the MILC don’t always do during times of high production costs. In addition, the Task Force is exploring not only improving price discovery mechanisms and how changing the Federal Milk Marketing Order program would improve the pricing signals sent to farmers, but also the elimination of unpopular aspects of the current system, such as make allowances. Rounding out its assignment from the NMPF Board of Directors, the Task Force is also seeking new ways to address the free-rider issue associated with participation in the CWT program and how the program itself can become even more effective in the future.
As this long-term approach progresses, NMPF continues to focus on short-terms steps to help farmers, including urging the Congress to appropriate $350 million in dairy aid to farmers in the fall. House and Senate appropriators are expected to decide in the coming days on the extent of the aid package, and how it will be used. NMPF has recommended that Congress allocate the money for purchases of cheese products that would then be donated to food banks and similar charitable organizations that serve needy populations.
Posted: September 19, 2009 at 8:06 pm
By Cindy Zimmerman
Even though dairy producers continue to lose money, milk output is only expected to drop about one percent in 2010, according to USDA Outlook Board chairman Gerry Bange who sees higher prices in the future.
“We do look for a price turnaround,” Bange says. “We’re looking at a $15.05 per hundredweight price for 2010, that’s up nearly 24 percent from the price we expect in 2009, which is about $12.15.”
And Bange expects those prices to be reflected across the full range of dairy products. “We’re looking for a stronger cheese price, looking for a stronger butter price, stronger non-fat dry milk pricing, whey pricing – so we’re looking at prices up rather sharply for 2010,” he says.
However, with prices down this year by about 38 percent compared to last year, Bange says they are not expected to fully recover to those levels by next year.
Posted: September 8, 2009 at 7:11 pm
By News Editor
From the USDA’s newly released “Livestock, Dairy & Poultry Outlook,” a report from the Economic Research Service.
Dairy: Continued rises in milk per cow offset reduced herd size, slowing the rate of decline in milk production in 2009. Continued reductions in the national dairy herd will push milk production further below year-earlier levels in 2010. Imports are expected to rise slightly, and exports remain in decline. Growth in domestic commercial use remains slow this year and should continue slow next year. Some strengthening in prices is expected next year as milk production declines.
Milk production during the second quarter of 2009 was up one-tenth of 1 percent from the second quarter of 2008, even though herd size was 53,000 head smaller
than the corresponding quarter last year. June milk production was down two-tenths of 1 percent from a year earlier. While the June reported herd size was
86,000 head less, production per cow was 13 pounds more than the corresponding month last year. USDA forecasts corn and soybean meal prices to be lower this
crop year. The lower feed prices and cheaper alfalfa hay helped support additional feeding and milk production despite the overall contraction signals from the market. Coupled with relatively slow herd contraction, milk production is projected at 188.2 billion pounds for 2009, less than a 1-percent reduction from 2008.
Prospects are for 2009/10 feed prices to decline slightly from 2008/09, helping boost the milk-feed ratio from this year’s lows. The lower expected feed prices
could provide modest relief to producers as milk prices strengthen over the course of the year, but hardly presage a turnaround in overall dairy market prospects for
producers. The lower feed prices and continued herd contraction will likely continue to boost output per cow in 2010. However, next year, the forecast herd
contraction to 8.9 million cows will outweigh the forecast 1.9-percent increase in output per cow and milk production will likely slip to 186.5 billion pounds.
Although exports were up in June, for the rest of the year exports will be reduced in light of higher domestic prices and increased dairy product availability in world
markets, which reduces the competitiveness of U.S. products. Continued accumulation of dry milk powder in the European Union will likely pressure world
prices, further reducing U.S. export prospects. Overall, exports on a fats basis will remain at 3.8 billion pounds, virtually unchanged in 2010 compared with 2009. On a skims/solids basis, 2010 exports will be slightly higher at 21.2 billion pounds compared with 20.0 billion pounds expected for this year. These forecasts remain well below 2008 totals.
The current USDA forecast assumes that Commodity Credit Corporation net removals will become negative in 2010 as product purchased under the higher
support prices moves back into the market. Cheese and nonfat dry milk (NDM) prices should strengthen in 2009, reflecting the increase in support prices for those
products. Economic recovery in 2010 and slightly lower milk production should help boost prices for all products in 2010. The cheese price is projected to average
$1.235 to $1.255 per pound this year and climb to $1.510 – $1.610 in 2010. Butter prices are expected to average $1.180 – $1.220 per pound in 2009 and strengthen to $1.435 – $1.565 in 2010. NDM prices are projected to average 85 to 87 cents per pound and rise to 94.5 cents – $1.015 per pound in 2010. Whey prices are projected at 24 to 26 cents per pound in 2009 and 28 to 31 cents per pound next year.
Milk prices should recover from 2009 lows next year but should remain well below the highs of 2007 and 2008. The Class III price is expected to average $10.70 –
$10.90 per cwt in 2009 and rise to average $13.75 – $14.75 per cwt in 2010.
The Class IV price is projected to average $10.15 – $10.45 per cwt this year and reaches $12.10 – $13.20 per cwt next year. The all milk price average is expected to be $12.10 – $12.30 per cwt and rise to $14.65 – $15.65 per cwt in 2010.
Posted: August 31, 2009 at 6:55 pm
By News Editor
Here’s another story about dairymen and allied industries coming together to discuss the current milk market, and their concerns about it. Farmers in Ohio met to discuss the market effects of imports, marketing organizations and supply and demand, while a panel of experts spanning California to New York presented their plan for a new system of marketing milk.
Past U.S. Holstein Association President Doug Maddox said the fallout in dairy prices goes deeper than the current generation. He farms in California, where he operates RuAnn Dairy, one of the world’s largest registered dairy farms.
“This crisis that we’re in right now and how we solve it is as much about who and what controls our future, and our dairy industry, as it is about the prices and the current situation,” Maddox said. “Either the dairy farmers are going to control the industry and manage our supply and set our prices, or the processors and the large companies.”
Maddox said a dairy farmer is typically losing $3-$4 a day per cow, or $100 per cow per month. Farm equity is being turned into bank loans, and farmers are exiting the industry altogether, by choice or by force, and a few have exited by suicide, he said.
The meeting was organized by Ohio Farmers Union and a host of local sponsors in hopes of gathering more producer perspectives and educating farmers and consumers about the dairy industry.
New York dairy farmer John Bunting discussed the impact to the market of dairy processors and marketing cooperatives, as well as imported milk protein concentrate.
The country imported about 16 million pounds of milk protein concentrates in 2008, according to information Bunting compiled from the U.S. International Trade Commission. That’s up from 2007 imports of 14 million pounds, and 2006 imports of about 12 million pounds.
Milk protein concentrate is the industry term used to describe a form of processed, dried milk used in foods such as processed cheese products, macaroni and cheese, protein bars, nutritional drinks, candy bars and cookies.
Bunting is one of a growing number of dairy farmers who say imports are partly to blame for their struggles.
But not everyone agrees.
Maddox said imports are a factor but the industry is ultimately experiencing woes because of an imbalance of supply and demand.
“You can blame all the other things, but it all gets back to supply and demand; it’s economics 101,” Maddox said.
He is an advocate for the Dairy Price Stabilization program, a newly formed effort to stabilize the market through a mandatory, self-funded growth-control program.
(more…)
Posted: August 31, 2009 at 6:49 pm
By News Editor
The current milk price has spurred many dairy farmers into action, getting them more involved in how their milk is marketed. A group of dairymen from western N.Y. and several even from Pennsylvania, met to discuss the Federal Milk Marketing Improvement Act of 2009 last week, at a dairy rally held in N.Y.
A group of more than 150 dairy farmers, their family members, a handful of local officials, farmer union leaders and Congressman Eric Massa, D-29, addressed the audience and talked about the act. The proposed legislation, brought forward by Sen. Arlen Specter, D-Pa, and Sen. Robert Casey Jr., D-Pa., would change the amount farmers are paid for milk to the national average cost of production, eliminate reference to the Chicago Mercantile exchange in determining milk prices paid to dairy farmers and encourage new dairy farmers to produce milk by allowing them to be exempt from inventory management costs in their first year, among other things.
“This will provide a floor under the price of milk that will keep a majority of our dairy farmers in business, give them an opportunity to pay their bills and have an extremely modest level of income,” said Larry Breech, president of the Pennsylvania Farmers Union.
Breech said there is tremendous amount of opposition to the legislation, but it insists that dairy farmers all of the country will begin closing if some governmental action is not taken.
“Dairy co-ops have miserably failed to represent their members and that’s why we are at the pint we are at now,” he said.
“Right now dairy farmers have seen a 47 percent drop in the prices they were getting last year and we have to get them some short-term relief immediately,” said Arden Tewksbury, manager of the Progressive Agriculture Organization.
“There are many farms that are going to be closing soon. People argue the number is as high as 25 or 35 percent,” he said.
Dairy farmers at the rally said they are getting as low as $10 to $12 a hundredweight, an amount they say doesn’t even cover operation costs.
A study by Cornell University estimated that farmers need to be paid at least $17 per hundredweight to cover production expenses.
“Because we have married ourselves to a free trade system that gives everything away and does not protect our consumers the international market collapsed and here we are sitting on huge surpluses,” Massa said. “By the way, you saw the price of milk at the producer drop by 50 percent, but we never saw the price of milk in retail drop that much. Now, somebody is making a hell of a lot of money, and candidly, it is not much different then we saw in the petroleum industry. The price of crude went from, what was it, $140? To $50 a barrel and yet the prices at the pump did not drop that same ratio.”
Posted: August 30, 2009 at 9:40 pm
By Cindy Zimmerman
In the largest dairy producing area of the top dairy state, it was no surprise that dairy was the number one topic addressed during a visit by Agriculture Secretary Tom Vilsack to Modesto, California last week on his Rural Tour.
Vilsack was joined at the event by California Congressman Dennis Cardoza, Deputy Secretary of Agriculture Kathleen Merrigan and California Secretary of Agriculture, A. G. Kawamura. Together they listened to the concerns of nearly 400 frustrated dairy producers imploring for help to stem the losses that threaten their livelihood.
“I’d like to thank you for all you’ve done so far, but it isn’t enough,” said Linda Lopes, president of the California Dairy Women. “We need the support price to be higher, we need it to be extended longer, and we need it to be floored. Because right now all of us are surviving on our equity and if this price doesn’t come up and stay up for a long time, the next time there won’t be any equity to borrow against and that will be the end of the dairy industry in California.”
Vilsack outlined what USDA has done so far to help producers, including export subsidies, increased federal purchases for nutrition programs and raising the support price for dairy products. The secretary said he wants to do more but he has to wait until Congress is back in session. “The problem is that we are now facing the beginning of a new fiscal year,” Vilsack said. “It’s not a simple thing to do what you have asked me to do. I want to do it, I want to help. We are going to try and work through the process.”
Vilsack also talked about the formation of a 15 member dairy industry advisory committee to help come up with solutions to the industry crisis, “to try to figure out what will be better than what we have today.”
Listen to some of the comments and questions from the California Rural Tour in this Milking Parlor podcast sponsored by Fort Dodge Animal Health: milking-parlor-fdah-2.mp3
Podcast: Play in new window
| Download
Posted: August 27, 2009 at 9:37 am
By Cindy Zimmerman
This edition of the Milking Parlor podcast focuses on what is being done on the national level to address the current dairy industry crisis. From congressional actions to USDA to the dairy industry itself, we hear from Congressman John Boccieri, Sen. Bernie Sanders, Agriculture Secretary Tom Vilsack, University of Wisconsin Ag Economist Dr. Bruce Jones and National Milk Producers Federation president Jerry Kozak.
Thanks to Fort Dodge Animal Health for sponsorship of this regular monthly podcast for dairy industry professionals. We encourage your feedback, comments and questions to provide input for future editions of the program.
Listen to this podcast here:
milking-parlor-fdah-1.mp3
Subscribe to the Milking Parlor podcast here.
Podcast: Play in new window
| Download
Posted: July 27, 2009 at 7:53 pm
By News Editor
Agriculture Secretary Tom Vilsack will appoint an advisory board to recommend how the government can avert further freefalls in the price dairy farmers are paid for milk, his office said.
The advisory board, whose membership has yet to be determined, could take the place of a congressionally mandated commission that was dictated by the 2008 farm bill but has yet to be appointed because of a budget-related disagreement with Congress — although the USDA did not rule out also creating the panel directed by Congress.
A panel could give the government more momentum to make significant changes in the system that sets minimum prices that dairy plants must pay farmers for milk, a long term solution that many people in the dairy industry say is necessary to smooth out the wide price swings that put farmers out of business in some years and hurt milk bottlers, cheese makers and other dairy processors in other years.
Any changes in policy, however, would be a few years away — soon enough, perhaps, for the next low cycle in milk prices but too late to save the hundreds of farmers in New York who experts say could go out of business due to this year’s price crisis.
Mr. Vilsack’s spokesman, Caleb Weaver, said the board would include “a whole cross section of people involved in the dairy industry.”
He couldn’t say when the board will be appointed or when Mr. Vilsack hopes it to finish its work.
From the USDA’s perspective, an advisory board may make more sense than the farm bill’s commission. Mr. Vilsack has freedom to set the advisory board’s composition and priorities, whereas Congress dictated the general makeup of the commission and its scope of work. He can also work around the farm bill’s requirement that a commission be appointed subject to funds being approved by Congress — something that has not happened and may not happen this year, if spending bills now moving through Congress are an indication.
The department has also stepped up government purchases of nonfat dry milk through the price support program, which takes excess dairy products off the market.
An advisory board could look at a wide range of ideas, from increasing government payments to farmers when prices fall, to simplifying the system and reducing the number of federal marketing orders that set prices around the country. Some groups have also called for measures to enhance competition among milk sellers and buyers, reversing a trend that has put most milk in the hands of just a few large companies and dairy cooperatives.
One idea that seemed to gain traction at a House Agriculture subcommittee hearing on Tuesday was reducing the number of marketing orders or possibly doing away with the idea of different prices in different regions by creating one national order.
Posted: July 21, 2009 at 4:42 pm
By News Editor
From the USDA‘s newly released “Livestock, Dairy & Poultry Outlook,” a report from the Economic Research Service.
Dairy: Feed prices are expected to moderate slightly both this year and next. But milk supplies still lead demand, and exports are expected to be well behind the last two years. Consequently, prices will remain weak this year. A modest improvement in prices is
expected in 2010 as the dairy herd decline helps to move supplies into line with demand.
Feed prices appear to be moderating slightly from last year’s highs. Corn is forecast to average $3.95 – $4.15 per bushel in the 2008/09 crop year and $3.35 – $4.15 for the next crop year. Soybean meal prices will average slightly below the previous year in 2008/09 and are forecast lower in 2009/10. Feed prices, however, will remain above the 5-year average for both corn and soybeans. Forage prices will likely follow grain prices moderating into 2010. While welcome, lower feed prices alone will not restore producer profitability. Recession-reduced demand weakness will keep dairy product prices below year-earlier levels for the balance of 2009.
The result is continued pressure to remove cows from production. The Cooperatives Working Together (CWT) program is expected to remove about 101,000 cows from the herd by the end of July.1 The U.S dairy herd is expected to contract 1.5 percent in 2009 from 2008 and another 2.6 percent contraction is expected in 2010. Yet some of the decline in cow numbers is offset by continued gains in milk per cow. In 2009, milk per cow per day increased 1 percent and is forecast to climb nearly 2 percent in 2010. Milk production this year is projected at 187.6 billion pounds, unchanged from last month’s forecast and next year’s production is forecast at 186.4 billion pounds. This leisurely decline is encountering a recession-weakened domestic market.
Exports both this year and next, with the exception of whey, are likely to be well below the totals for the last two years, and are forecast at 3.8 billion pounds of milk equivalent, fat basis, in 2009 and 3.9 billion pounds in 2010. Whey exports, mostly to Mexico and China, have made the skims/solids exports numbers appear stronger. Those exports are forecast to total 19.9 billion pounds this year and 23.1 billion pounds next year.
Product prices will likely remain low in 2009. Cheese prices are projected to average $1.210 – $1.2402 per pound; butter prices are expected to average $1.175 – $1.235 per pound. The outlook for dry products is also for low prices for the year with nonfat dry milk (NDM) averaging 82.5 – 85.5 cents per pound and whey averaging 24 – 26 cents per pound. Prices are expected to recover in 2010 but not to their previous levels. Cheese prices are forecast to average $1.530 – $1.630 per pound in 2010. Butter prices are forecast to stage the strongest recovery and average $1.435 – $1.565 per pound for the year. NDM prices are expected to average $0.990 – $1.060 per pound for the year and whey 28 to 31 cents per pound next year.
The product price forecast presages weak milk prices this year and only modest improvements next year. Class III prices are forecast to average $10.45 – $10.75 per cwt in 2009 and $13.90 – $14.90 per cwt next year. The Class IV price is projected to average $9.95 – $10.35 per cwt in 2009 and $12.45 – $13.55 per cwt in 2010. The all milk price will likely average $11.85 – $12.15 this year, improving to $14.85 – $15.85 per cwt in 2010.
Posted: June 9, 2009 at 1:23 pm
By Amanda Nolz
The United Business Media PR Newswire posted some positive media coverage for June Dairy Month, boasting the nutritional benefits of milk, cheese and yogurt. PR Newswire is the global leader in innovative communications and marketing services, enabling organizations to connect and engage with their target audiences worldwide. This media outlet provided an in-depth, insightful look at the wonderful world of dairy including: health benefits for life, dedication to children’s health and commitment to a healthy environment.
June is National Dairy Month, a great opportunity for Americans to recognize that low-fat and fat-free dairy foods present a unique combination of both nutritional and economic value. Now is the time to remember the recommendation to get three servings of dairy daily – not only milk, but also cheese and yogurt, since these foods also are valuable and tasty sources of essential nutrients.
Families these days are looking to get the most nutrition they can with their food budget. Dairy is a naturally nutrient-rich food group that, for the most part, comes at a low cost — often just pennies per serving. One eight-ounce glass of milk for example provides nine essential nutrients: calcium, potassium, phosphorus, protein, vitamins A, D and B12, riboflavin and niacin (niacin equivalents).
To read the entire article, link to the PR Newswire. For additional information, link to the National Dairy Council.
Posted: April 6, 2009 at 7:07 pm
By News Editor
A small ray of sunshine for our country’s dairy farmers – the USDA’s Economic Research Service (ERS) has raised its predictions for milk prices.
In its March “Livestock, Dairy and Poultry Outlook” report, ERS economists write, “As a result of higher cheese and butter prices than forecast earlier, the prices for Class III and Class IV milk have been raised slightly, to $10.05 to $10.65 per pound and $9.50 to $10.20 per pound for 2009.”
Last month, the ERS figured the Class III price would average between $9.70 and $10.40, so the new estimate is 25 to 35 cents higher. Also last month, the ERS said the Class IV price would average between $9.35 and $10.15. That means the new forecast is up by 5 to 15 cents.
Ditto for the U.S. “all-milk” price. In its March statement the ERS looks for that price to average $11.25 to $11.85. That’s an increase of 20 to 30 cents from the February estimate of $10.95 to $11.65.
This latest report is the first in months to state that higher milk prices instead of lower ones n are expected. Make no mistake: Those higher predicted prices are still well below the averages of last year.
Turning to dairy product prices, the ERS says commodity cheese prices should average $1.215 to $1.275 per pound this year. It expects butter prices to average $1.105 to $1.195 per pound.
Nonfat dry milk prices should average 80.5 to 85.5 cents a pound. And, the ERS looks for whey to average 16 to 19 cents per pound. There’s also good news on the demand side. The outlook report says demand for butter and cheese has been “stronger” than expected.
“Lower prices have stimulated additional use. Commercial use is forecast to rise by one percent on a fats basis, and by better than two percent on a skims/solids basis in 2009,” says the report.
On the other hand, exports of milk equivalents are expected to fall to 5.1 million pounds, from 8.8 million pounds last year. The ERS explains that the declines in exports are due to “global recession reducing demand, and to rising production in Australia and New Zealand…”
Looking at production, the report says per-cow output will be up slightly this year. But a contraction in the nation’s “herd” is expected, too. The forecast is for 1.3 percent fewer cows than in 2008. Cow numbers began to fall in January. The economists say the steepest declines will likely come in July and later.
“Output per cow will rise fractionally, to 20,500 pounds…Total milk production will be lower in 2009, at 188.5 billion pounds, a decline from 190 billion pounds in 2008,” says the report.
Feed prices are “moderating,” says the ERS. Still, comparatively weak demand is holding milk prices down.
Posted: April 2, 2009 at 8:26 pm
By News Editor
Retail milk prices have dropped, according to the latest American Farm Bureau Federation Marketbasket Survey.
Shredded cheddar cheese, milk and vegetable oil showed the largest retail price declines and together account for most of the decrease in average price of the overall marketbasket. Shredded cheese dropped 70 cents to $4.24 per pound; milk dropped 67 cents to $3.15 per gallon; and vegetable oil dropped 38 cents to $2.79 for a 32-oz. bottle.
For the first quarter of 2009, shoppers reported the average price for a half-gallon of regular whole milk was $2.16, down 22 cents from the prior quarter. The average price for one gallon of regular whole milk was $3.15, down 67 cents. Comparing per-quart prices, the retail price for whole milk sold in gallon containers was about 25 percent lower compared to half-gallon containers, a typical volume discount long employed by retailers.
The average price for a half-gallon of rBST-free milk was $3.19, down 26 cents from the last quarter and nearly 50 percent higher than the reported retail price for a half-gallon of regular milk ($2.16).
The average price for a half-gallon of organic milk was $3.71, up 1 cent compared to the third quarter and approximately 70 percent higher than the reported retail price for a half-gallon of regular milk ($2.16).
Compared to a year ago (first quarter of 2008), the retail price for regular milk in gallon containers decreased by 17 percent while regular milk in half-gallon containers decreased 10 percent. The average retail price for rBST-free milk dropped about 3 percent in a year’s time. The average retail price for organic milk in half-gallon containers went up and down slightly throughout the year, rising about 2 percent in the first quarter of 2009 compared to a year ago.
“Continued weak demand overseas for U.S. dairy products combined with increased on-farm production are behind the softening retail prices for shredded cheese and whole milk,” said Jim Sartwelle, an AFBF economist.
As retail grocery prices have increased gradually over time, the share of the average food dollar that America’s farm and ranch families receive has dropped.
“Starting in the mid-1970s, farmers received about one-third of consumer retail food expenditures for food eaten at home and away from home, on average. That figure has decreased steadily over time and is now just 19 percent, according to Agriculture Department statistics,” Sartwelle said.
Using the “food at home and away from home” percentage across-the-board, the farmer’s share of this quarter’s $47.41 market basket would be $9.00.
Posted: March 5, 2009 at 5:24 pm
By News Editor
The U.S. Department of Agriculture is already moving forward to examine a petition submitted last month by National Milk Producers Federation (NMPF) to eliminate the producer-handler exemption in all Federal Milk Marketing Orders.
In the proposal, submitted by NMPF and International Dairy Foods Association, large producer-handlers bottling more than 450,000 pounds of milk per month would no longer be able to circumvent minimum pricing and region-wide pooling provisions. The USDA said on Feb. 6 that it is considering initiation of a formal rulemaking proceeding that could include a public hearing to collect evidence regarding the proposed changes.
In its petition to USDA on Jan. 30, NMPF expressed its belief that all milk bottlers across the country should be regulated under the same rules, based on their impact on the market, and the rules need to be adjusted in light of the growing number of huge mega-farms that can exploit a loophole in milk pricing regulations.
Posted: March 3, 2009 at 8:07 pm
By News Editor
Dairy producers and managers faced with depressed milk prices can share ideas and find solutions for managing through the current environment at dairy roundtable meetings hosted by the Center for Dairy Excellence with Penn State Cooperative Extension and the Penn State Dairy Alliance. Although participation is free, reservations are required. Any dairy producer interested in attending should contact the Center for Dairy Excellence at 717-346-0849.
Three meetings are slated this month in Blair, Centre and Lancaster counties, featuring business experts from Farm Credit. The meetings are free of charge and lunch is provided.
“The current economic situation in the dairy industry has put many of Pennsylvania’s dairy farms in jeopardy,” said John Frey, executive director of the Center for Dairy Excellence. “The meetings will bring producers together to share ideas on managing their dairies through this downturn and how to improve short-term and long-term cash flow.”
The meetings dates and locations are:
* Tuesday, March 17, from 10:00 a.m. – 1 p.m. at Celebration Hall, 2280 Commercial Boulevard, State College, Pa.
* Thursday, March 26, from 11:30 a.m. – 2:30 p.m. at the Martinsburg Airport, 2 Airport Drive, Martinsburg, Pa.
* Monday, March 30, from 11:30 a.m. – 2:30 p.m. at the Lancaster Farm and Home Center, 1383 Arcadia Road, Lancaster, Pa.
Posted: January 26, 2009 at 7:34 pm
By News Editor
With a new leadership team arriving this past week in the White House, and the U.S. Department of Agriculture, the National Milk Producers Federation (NMPF) today urged that they turn immediate attention to helping dairy farmers weather the crushing collapse in dairy prices.
“The plight of dairy farmers is just part of the overall ongoing story of the global recession, but it also needs to be the focus of the new Congress and the new Obama Administration,” said Jerry Kozak, President and CEO of NMPF. “Given the suddenness and severity of the plunge in farm-level milk prices, a significant number of farmers won’t survive the winter with the prices they’re receiving.” Kozak noted that farm-level milk prices in February will be nearly 50% less than at the beginning of 2008, even though farmers’ input costs, including feed and fuel, are still above historic averages.
Contrary to rumors that NMPF has been seeking some sort of government dairy cow buyout in the pending stimulus package, Kozak said that NMPF remains focused on utilizing its six year-old Cooperatives Working Together program as the primary means to manage the dairy supply. CWT is a farmer-funded, self-help program that helps balance supply with demand. Kozak said that CWT is in the process of obtaining a line of credit with a major agricultural lender to help it augment its efforts in 2009, making a government loan guarantee unnecessary.
Kozak said that NMPF had already taken a series of steps to focus the attention of policymakers on the dairy crisis. These include:
Offering the USDA a list of actions it can take immediately to help producer prices, such as making it easier for cheese makers to sell products to the USDA under the dairy product price support program, using more dairy foods in government feeding programs, and resurrecting the dormant Dairy Export Incentive Program to boost overseas sales of U.S. products. That letter was sent Jan. 8th to outgoing Agriculture Secretary Ed Schafer. Kozak said newly-approved Agriculture Secretary Tom Vilsack should consider the letter’s recommendations, especially since the proposals are ones that USDA should be able to implement quickly.
Urging the USDA to ensure the maximum flexibility for dairy producers to choose the months they wish to receive their Milk Income Loss Contract payments. NMPF believed the USDA was sending confusing, arbitrary and overly-restrictive information to farmers about the parameters of choosing direct payments, and in a letter earlier this month, urged the department to reconsider its approach. USDA has subsequently sent clarifying instructions to its state and country offices to ensure that farmers are afforded more flexibility in signing up for the MILC program. Kozak said that the MILC program will begin issuing payments to producers on their February milk production, and thus getting the program operating correctly is of critical importance;
Preventing the agency from selling nonfat dry milk powder at prices lower than specified in the dairy product price support program. NMPF initiated legal action last month to stop the USDA from using a third-party auction service to sell the powder. The USDA subsequently dropped those plans, ending the need for further litigation by NMPF.
Posted: June 13, 2008 at 1:21 pm
By Cindy Zimmerman
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.
«Past Entries
