Archive for the ‘Todays Dairy News’ Category

Weak World Market: How Concerned Should We Be?

November 3, 2014 — We keep hearing about weak world markets and farmers are getting more nervous about a big drop in exports. We asked Alan Levitt, Vice President of Communications for the U.S. Dairy Export Council what he’s been hearing from USDEC members.

“Farmers are right to be concerned,” Levitt reported on Monday’s DairyLine. “I’ve just come back from the USDEC fall board meeting, where U.S. exporters gather to learn and share, and it was a good meeting.”

He says USDEC members are engaged and understand that conditions are tougher; they understand that it’s more of a buyers’ market and orders are tougher to come by. But they’re not shrinking from it. They’re retrenching.

As far as market conditions, Tim Hunt from Rabobank gave his outlook and he thinks markets will be soft for the next 9-12 months.

“So, we should be prepared for that,” Levitt said.

But the Rabobank report also revealed:  “We shouldn’t confuse a temporary malaise with terminal illness.” Hunt reported the “global window of opportunity for U.S. suppliers is still open,” because over the last year everyone focused so hard on China that they may be missed out on some other markets. Now that prices are more moderate, there are many other windows of opportunity to explore, like Southeast Asia and the Middle East/North Africa region. The world still wants to buy and consume dairy.

And is USDEC doing anything differently to help shore up exports?

“We’re continuing to focus on programs and activities that keep a smooth environment in the medium and long term, as we always do,” Levitt said. “We work to create relationships that lead to sales. And we solve regulatory challenges and provide insights to identify opportunities.”

A lot of what USDEC does is technical assistance. For instance, you may recall back in May, China implemented a new rule requiring all companies exporting to China to be registered on an FDA list. USDEC staff worked with U.S. and Chinese regulators for over two years to ensure a smooth transition on this, and they are continuing to work with them to get companies added who didn’t get on the list in May.

“We also continue to work with our trade negotiators to so we get the best possible outcome in the TPP deal,” Levitt reported. “We’re getting into the home stretch now and this agreement has the potential to give us new more access to Japan and Canada – That would be a big deal.”

These are the sorts of things USDEC continues to do to help enhance the dairy industry’s prospects in the medium and longer term.

USDA Extends MPP Enrollment One Week

October 29, 2014 — The fact that the enrollment deadline for the new Margin Protection Program fell on “Black Friday” may have had something to do with USDA extending it a week, to December 5th. Agriculture Secretary Tom Vilsack broke the news to dairy producers attending e National Milk Producers Federation annual meeting.  The program provides financial assistance to participating farmers when the margin – the difference between the price of milk and feed costs – falls below the coverage level selected by the farmer.

“We want dairy producers to have enough time to make thoughtful and well-studied choices,” said Vilsack. “Markets change and the Margin Protection Program can help protect dairy producers from those changes.”

Vilsack encouraged producers to use the online Web resource at to calculate the best levels of coverage for their dairy operation. “Historical scenarios also can be explored to see how the Margin Protection Program would function should poor market conditions occur again in the future,” said Vilsack. The secure website can be accessed via computer, smartphone or tablet.

The U.S. Department of Agriculture (USDA) also extended the opportunity for public comments on both the Margin Protection Program and the Dairy Product Donation Program until Dec. 15, 2014.

“USDA is committed to creating strong opportunities for the next generation of farmers and ranchers. When dairy producers bring new family members into the business, these changes could affect safety net coverage,” said Vilsack. “If our current rules hinder intergenerational changes or if improvements are needed in these programs, then we want to hear from dairy producers.”

Comments can be submitted to USDA via the website at

Today’s announcement was made possible through the 2014 Farm Bill, which builds on historic economic gains in rural America over the past five years, while achieving meaningful reform and billions of dollars in savings for the taxpayer. Since enactment, USDA has made significant progress to implement each provision of this critical legislation, including providing disaster relief to farmers and ranchers; strengthening risk management tools; expanding access to rural credit; funding critical research; establishing innovative public-private conservation partnerships; developing new markets for rural-made products; and investing in infrastructure, housing and community facilities to help improve quality of life in rural America. For more information, visit

Idaho’s Dairy Does an Economy Good

October 28, 2014 — Newly-released numbers showcase the thriving dairy industry and its economic impact in the state of Idaho and throughout the world. The University of Idaho’s College of Agriculture and Life Sciences (CALS) studied the industry and completed its economic impact study.

The Idaho dairy industry is the 3rd largest dairy-producing state in the country in 2014 thus far, and has large contributions to the employment and economic foundation in Idaho.

Tony VanderHulst, President of IDA, stated “we use these economic impact studies to quantify our industries financial contributions to rural communities and the state. The study clearly shows we have a thriving and healthy dairy industry in Idaho. With the current robust dairy economy it can only be anticipated that the economic contributions for 2014 will increase significantly.”

The Idaho dairy industry is comprised of both dairy producers and processors. Findings from the economic study include (all from 2012 data):

• Every job on a dairy operation generates another 2.2 jobs. The Idaho dairy industry generates over 23,000 jobs in Idaho.

• With $2.42 billion in cash receipts from the sale of milk, dairy production is significantly the top source of income generated in Idaho agriculture production sector.

• Idaho dairy contributed more than $2.2 billion to the state’s gross domestic product

• Combining the dairy producer’s sales with the dairy processors sales the Idaho dairy industry is responsible for generating $6.6 billion in sales.

• The Idaho dairy industry contributed $72 million to the state in taxes. According to Dr. Phil Watson, the author of the study, “everyone understood the positive financial influence that the dairy industry had in rural Idaho. What the study clearly shows is that Idaho’s dairy industry is responsible for generating a significant portion of the state’s total jobs, wages, and GDP”.

The Hourglass is Just About Out of Sand

October 24, 2014 — While dairy traders anticipated yesterday afternoon’s Livestock Slaughter report, they had to weigh whether Monday’s bearish September Milk Production report was overshadowed by Wednesday’s somewhat bullish Cold Storage report.

They made their decision loud and clear yesterday morning as one trade plunged the blocks down 21.25¢, to $2.1575/lb. and the barrels were down 8 cents to $1.99, first time below $2 since July 31, but still an abnormal 16.75¢ below the blocks.

Matt Gould, dairy analyst with the Dairy and Food Market Analyst, warned in Friday’s DairyLine that “The hourglass is just about out of sand for the demand season.”    He reported that milk production has picked up in key cheese making regions, up 4.1 percent in September, after increasing 2.6 percent in August, and 4 percent in July. Output was actually up everywhere, according to Gould, who put the data into 60,000 pound tanker loads to give some perspective.

California led the way, he reported, producing 52 additional tanker loads per day in September, up 2.9 percent. Texas was up 9.6 percent and Wisconsin was up 3.2 percent, together increasing output by 50 tanker loads per day. Add those together and Gould said U.S. dairy farmers produced 600 million more pounds of milk in September and processors had to balance another 336 more truckloads per day than last year.    The Cold Storage report showed that September was in the middle of the demand season, according to Gould. Total cheese stocks were drawn down 28 million pounds in September, compared to the five year average drawdown of 17 million pounds. American cheese stocks were down 17 million pounds compared to the five year average of 7 million pounds, so demand was “very strong,” he said.

Butter stocks were more of a wash, according to Gould, in line with the historical five year average, down 19 million pounds. Stocks are still below historical levels, he said, 37 percent below a year ago, and 14 percent below two years ago.   “Looking to the future, with milk production at these levels and the demand season about to pass, we’re (prices are) headed lower,” he concluded.

Dairy Producers Receive High Marks in Latest Animal Care Assessment

October 23, 2014 — Dairy farmers across the U.S. continue to care of their animals under the highest standards possible, according to a report released by the National Milk Producers Federation (NMPF).

“We have a national program in place to demonstrate the commitment that dairy farmers have for their herds,” NMPF’s Chris Galen said on DairyLine. “And, we continue to make improvements in the overall quality of care that farmers give to their cows.”

The summary report, issued annually, quantifies practices by farmers participating in the industry’s responsible care program, known as the National Dairy FARM Program (Farmers Assuring Responsible Management). A copy of the report can be found online.

The report quantifies the results of more than 12,000 dairy farm evaluations conducted during the previous three years. All the data collected by second-party evaluators who visit each of those farms is catalogued, and provides a baseline of the breadth of adoption of the program’s care practices.

For example, the report found nearly 95 percent of farms enrolled in the program train their employees to properly move animals that cannot walk, and more than 98 percent train employees to handle calves with a minimum of stress. Other findings included:

  • 99 percent of farms observe animals daily to identify health issues for early treatment;
  • 93 percent develop protocols with veterinarians for dealing with common diseases, calving and animals with special needs;
  • 92 percent train workers to recognize the need for animals to be euthanized.

“What we are seeing is a high degree of training and compliance that goes on, in terms of farm managers and owners working with their employees, to make certain that cows get their optimal care,” Galen said. At the same time, the report found some areas still need improvement. For example, 84 percent of farms in the program have a valid veterinarian-client relationship, and 84 percent also conduct annual training in animal care for employees. However, both of these areas have shown an increase in industry adoption, up from 80 percent and 83 percent, respectively, since the first annual report two years ago.

“All this is a way of saying that farmers are caring for their animals, and we’re not just talking the talk when we make that point, we’re actually walking the walk in terms of providing data to back that up.”

This week at their joint annual meeting in Grapevine, Texas, NMPF board members will vote on whether or not participating companies require that every farm associated with that company has to require those farms to be in the FARM program.

“We are expecting that our board will approve that change,” Galen said. “So, when a cooperative or a proprietary processor say they are a participant in the FARM program…all farms handled by that co-op or processor have to be enrolled.”

Overall, according to the report, participation in the FARM Program increased to more than three-quarters of the nation’s milk supply, up five percentage points from the previous year.

Available to all U.S. dairy farmers in the United States, the FARM program is now in its fifth year. It is a voluntary, national set of guidelines designed to demonstrate farmers’ commitment to outstanding animal care and a quality milk supply. Cooperatives, milk processors, and individual producers use the program to assure consumers that the dairy foods they purchase are produced with integrity.

Participants are given training materials and are evaluated by a veterinarian or another trained professional. Evaluators provide a status report and, if necessary, recommend areas for improvement.

Each year, a nationwide sample of dairy farms in the program is randomly selected for visits from third-party “verifiers” to assure that the observations recorded by veterinarians are valid. A certified auditing company, Validus, conducts the third-party verification process.

The third annual verification of the FARM program reflects adoption of select practices as of December 2013. As of this month, more than 60 cooperatives and milk processors participate in the program, as well as dozens of individual dairy producers.

NMPF also released the new 2015 edition of its safe use manual for antibiotics and other animal drugs. The Milk and Dairy Beef Drug Residue Prevention Manual permits producers to quickly review those antibiotics approved for use with dairy animals. It can also be used to educate farm managers in how to avoid drug residues in milk and meat. The manual, available online, is updated annually.

Dairy Markets Tumble: Cash Cheese Drops Over 21 Cents Thursday

October 23, 2014 — The hourglass is out of sand for the “demand” season, according to dairy analyst Matt Gould. One trade saw cash block cheese plunge 21.25 cents Thursday to $2.1575. The Barrels lost another 8 cents to $1.99 on one lone offer.

Cheese wasn’t the only price to drop. The spot butter market continues to spiral downward, losing 9 cents on Thursday to $1.90. 9 carloads of butter traded hands on one offer. Grade A powder saw a 1.75 cent drop Thursday to $1.2975.

November FO Class I Slips 13 Cents

October 22, 2014 — The Agriculture Department announced the November Federal order Class I base milk price this afternoon at $24.06 per hundredweight (cwt.), down 13 cents from October but $3.86 above November 2013, and equates to about $2.07 per gallon.

That put the 2014 average at $23.35 per cwt., up from $18.70 at this time a year ago, $17.10 in 2012, and $19.19 in 2011.

The two-week, NDPSR-surveyed butter price used to calculate today’s price was $2.8318 per pound, up 6.7 cents from October. Nonfat dry milk averaged $1.5052, up 2.9 cents. Cheese averaged $2.3001, down 0.6 cent, and dry whey averaged 65.90 cents, down 1.6 cents from October.

Producers Should Remain Profitable in 2015 Despite Lower Milk Prices

October 22, 2104 — No real surprise in the 4.1% jump in milk production for September, given where we were at last year regarding milk per cow. That’s according to FC Stone dairy FCstoneeconomist Bill Brooks, who joined us on today’s DairyLine Radio program to discuss.

“I was looking for 3.6% but knew it could be in the range of 4.0 to 4.2%,” he said.

However, he’s still scratching his head from the strong drop off in cow numbers we had from July to August, even though that is somewhat typical for August. The preliminary September figures show a 2,000 head increase.

“Given the profitability…folks are wondering why there aren’t more cows out there on dairy farms,” he said. “It’s probably do to the rise in slaughter numbers last year and less heifer numbers this year.”

Earlier in the year, before things started taking off, people felt comfortable where the margins were going to be at.

“We did see some additional heifers work their way in to feedlots and slaughter plants… and that’s kind of holding us back on our cow numbers,” he said.

The latest milk production report is the strongest gain we have seen this year, putting us 2.5% above last year’s levels through the end of the year, and perhaps closer to that 4 or 5% range.

We did see a rebound last October in milk production. But our five year average gain for September is only 0.9% and Brooks sees a 1.1% gain for the five year average for the remainder of the year.

“We’re doubling up, if not tripling up where our normal percentage gains have been at for the fourth quarter, or at least it looks like we’re setting ourselves up for that,” he said.

Not only our U.S. producers increasing production, but we are seeing more milk throughout the world, particularly in New Zealand, Australia and Europe.

“Everybody’s producing a lot more milk and we’re working our way to the same situation that we have in the grains and oilseeds,” he said. “Something dairy producers are pleased about because of the lower cost feed ingredients, but we’re working our way towards that on the milk side.”

We’ve seen international prices drop off and some commodities domestically drop off, nonfat dry milk being the largest decline up until we saw the butter price crash the last few weeks. At the moment, butter is recording a little bit of a correction and cheese is holding with a fairly decent price, although barrels have been exhibiting a lot of weakness.

“Partly due to the time of year where folks are sourcing their product for the holiday season – a lot of products have been shipped and that’s helping support cheese and butter prices,” he said. “But eventually their going to get caught up in the same kind of market move that we have seen on the nonfat dry milk side.”

Brooks says it won’t be surprising that all of our dairy commodities will be back down below the $2.00 level by the end of the year.

“Dairy producers will be looking at less revenue for their milk but fortunately looking at a lot lower input costs and profitability is expected to be fairly decent into 2015,” he concluded.

Building Leaders for the Future

FuelUp60October 20, 2014 — We’ve reported in the past on the dairy industry’s involvement with the National Football League to get kids on track with eating right and getting exercise, but the Fuel Up to Play 60 program goes beyond that.

That’s according to Arkansas dairy producer and Dairy Management Inc. board member Ryan Anglin, who says DMI just signed another three year contract with the NFL to maintain the dairy presence in schools along with 60 minutes of activity.

“This is the first generation that may not outlive their parents,” Anglin reported on DairyLine Radio. “We’ve got to exercise and eat right.”

He says eating a balanced diet isn’t just about consuming dairy products, although the dairy industry is helping with Smart Slice pizza from Dominos, which meets the school guidelines.

“It’s a whole wheat crust, a low-fat cheese and a chicken pepperoni, really good stuff!” he said. “We also have grab and go breakfasts in schools and the participation is great.”

He says if you go from the lunchroom to the classroom, participation increases about 60 percent as kids like to be in a family unit. Anglin visited a school in Joplin, Missouri where the superintendent praised dairy farmers for what they’ve accomplished.

“There are less visits to the school nurse, less tardiness, and less discipline problems,” he said.

Dairy ingredients such as cheese, milk, and yogurt are in every one of those breakfasts and Anglin reports the consumption has increased, with more dairy being sold and it’s good for the community.

“Dairy farmers and all farmers want to do the right thing,” he said. “If we’re helping these kids to be better people, make better grades on their tests, we’ve accomplished two things.”

He says breakfast has changed for kids and they are not eating as much at home anymore. The dairy industry is looking at new opportunities and new designs of products to get dairy back into the diet.

“We go to these schools and see what these kids have done,” he said. “Fuel Up to Play 60 is a kid program. They design the menu they want to eat.”

Granted, they must have at least three adults to be able to do the program properly. But Anglin has observed some incredible actions on the part of the youngsters. Not only have the eating habits changed but so have habits with kids not living an active life.

A school in Arkansas built a walking trail. Then they came up with the idea to invite a business person once a week to walk with them and they would learn about his or her business. So they could talk to the kids while they were both exercising.

“These are things that kids are doing,” he said. “We’re building leaders for the future. They’re phenomenal.”

The key to it all is very basic. Good nutrition. Good exercise.

September Milk Production Up 4.1%

October 20, 2014 — U.S. dairy farmers got the message. The record high milk prices and low feed costs, pardon the pun, signaled them to “milk ‘em for all their worth.” They added cows and got more out of every one.

The Agriculture Department’s preliminary data issued this afternoon in its Milk Production report shows September output in the top 23 producing states at 15.49 billion pounds, up 4.1 percent from August 2013 and was the nineth consecutive month output was above a year ago. The 50-state total, at 16.47 billion pounds, was up 4.0 percent from a year ago.

Revisions reduced the original August 23-state estimate by 3 million pounds, now reported at 16.2 billion pounds, up 2.6 percent from a year ago.

August cow numbers in the 23 states, at 8.59 million head, were up 4,000 head from August and  78,000 more than a year ago. The 50-State count, at 9.27 million head, is up 2,000 from July and 59,000 more than a year ago.

August output per cow in the 23 states averaged 1,804 pounds, up 56 pounds from September 2013, and the highest production per cow for the month of September since the 23 State series began in 2003.

Looking at the July to September period, milk output totaled 51.1 billion pounds, up 3.5 percent from the same period a year ago, and cow numbers, at 9.27 million head, were up 15,000 from the April to June quarter and 44,000 more than a year ago.