Archive for the ‘Todays Dairy News’ Category

Current Cheese Prices May Be “Overcooked”

March 25, 2014 – The current record cheese price levels are probably a little misleading, according to FC Stone’s Bill Brooks. Dairy farmers have never seen prices like this

Bill Brooks, FC Stone

Bill Brooks, FC Stone

before, with CME 40 lb. block cheese trading at $2.4325 and 500 lb. barrels at $2.3775.

“We are in a tight market,” Brooks warned on Tuesday’s DairyLine Radio program.  “We haven’t seen a trade for block cheese since February 20th.”

Prices continue to set records because of the world market, weather, feed prices and featured dairy products in store shelves from the last football season and now March madness. But those are going to go away quickly, according to Brooks.

“That’s going to negatively impact our demand and hopefully not make the down-turn potentially worse than what we might anticipate,” he said. Brooks has that feeling that the markets are a bit “overcooked.”  

Even though inventory levels are below a year ago, we’re only three days below the amount of available supply we have in cold storage inventories. However prices are 60 to 70 cents above a year ago. U.S. prices are also 10-30 cents above international prices.

“We’re going to lose that competitive factor that helped us ship a lot of product offshore,” Brooks said. “But the market is always right; we just have to figure out the timing of when it is going to go in the other direction.”

Some producers have put in some risk management positions, like forward contracting with their milk buyer and some are also locking in feed prices. Both have started to work their way higher.

“We are starting to see dairy producers look at that,” he said. “They are being pretty judicious with those positions because they do see this market is continuing to go up.”

It’s more difficult to hit the exact high of the market when trying to sell milk in futures, options or a forward contract. So producers don’t want to miss it by too much and leave money on the table.

Weather, feed costs and feed quality are reasons to layer in protection on margins, according to Brooks. Producers are also looking at a new risk management tool from the new farm bill, and are learning how to implement margin insurance that will protect them against the massive price fluctuations that we seem to have in agriculture.

Kings Co: A Thorn in the Side of High Speed Rail

March 24, 2014 — Farmers in Kings County, California don’t want to be railroaded when it comes to the planning and building of the first high speed rail system in the nation. Just BulletTrainask Joe Machado, a 3rd generation dairy producer who milks 1,100 Holstein cows on 700 acres near Hanford. He says the California High-Speed Rail Authority plans to put tracks about 100 feet from his facility.

“My above ground water that I get from irrigation will be impacted,” he said. “It’s like cutting one of my legs off and telling me I still have crutches to walk on…that’s their whole attitude toward mitigating impacts.”

Officials say by 2029, the system will run from San Francisco to the Los Angeles basin in under three hours at speeds capable of over 200 miles per hour. The system will eventually extend to Sacramento and San Diego, totaling 800 miles with up to 24 stations.

Machado says because of politics, the project is starting in the Central Valley. He believes the plaintiffs in Kings County are “in the right” because officials are not following the directive of the voters.

“That’s their biggest hurdle right now,” he said. “We have judges that are sympathetic to our cause and Kings County is upset that they haven’t resolved our issues.”

Kings County farmers came together as one and didn’t let the issue die. Machado says they have successfully held the project up, saying that he’s not against high speed rail, but he is against the Authority for not following the guidelines set by voters.

“They thought we didn’t have the political power. We’re not a big city, which they thought was the path of least resistance,” Machado said. “Were they ever wrong, because we have been the thorn in the side of high speed rail, and if wasn’t for Kings County they probably would have a shovel in the ground by now somewhere.”

DFA Annual Meeting Very Upbeat

March 21, 2014 – That was the observation of DairyBusiness Communications, Joel Hastings, who reported highlights of Dairy Farmers of America’s (DFA) annual meeting in DFAKansas City on this morning’s DairyLine. That applied to the current dairy economy, he said, as well as DFA’s activities in 2013.

Hastings was among some 1400 DFA members and guests who heard “solid financial results” regarding the nation’s largest dairy cooperative. Hastings reported that 2013 sales totaled some $12.8 billion, up 6% from 2012, and DFA’s adjusted net income also grew and amounted to $61.3 million.

CEO Rick Smith, in his annual report on the activities of the cooperative he oversees, assured his members that DFA is delighted with the high milk prices they are receiving and “getting a breath of fresh air,” as it were to their balance sheets. He said their processing operations will adjust but they are “all about high milk checks for farmers.”

On the sales front, DFA reported that it has created a special new Class I product called Cal-Gold brand milk. It is an ultra high temperature pasteurized milk processed in California and shipped to China for distribution through Wal-Mart stores. Consumers responded to the product very well, according to DFA, and the product has great sales potential in the Chinese market.

Dairy Management Incorporated CEO, Tom Gallagher, reported on some of the partnerships they are developing with dairy processors and he presented an optimistic picture for other new Class I products that offer innovative packaging and new flavors.

When asked about any concerns that were expressed, Hastings said it was certainly acknowledged by producers and industry people there that dairy is a cyclical business and “What goes up must come down but there did not seem to be warnings for any immediate drop,” Hastings concluded, “And it was certainly an upbeat meeting.”

 

Farmers Call For Immigration Reform

March 20, 2014 — Farmers and ranchers gathered at the National Press Club in downtown Washington, D.C. Tuesday calling for Congress to act on immigration reform. Congress

Dairy producers Mary Kraft of Colorado and Russell Boening from Texas spoke on a personal level of how important it is to have access to an adequate work force of immigrant laborers.  

“We need to have the farmers in mind when we go up to Capitol Hill and talk about the stakes for agriculture,” National Milk’s Chris Galen reported. “All of agriculture is really dependent on getting this issue fixed.”

The issue of immigration reform is nothing new but it appears to have stalled in the House. Congress is not expected to get a lot done in 2014 before the elections, but farmers say immigration reform should be one issue that needs to be addressed.

“The clock is ticking,” Galen said. “There are only so many days left in the legislative calendar.”

The agriculture industry is working on building alliances with other sectors of the economy. NMPF is part of a partnership for a new American economy, largely focused on hi-tech workers to make sure they get visas to work in the U.S.

“We are trying to partner with those folks to talk about how agriculture needs this so called ‘blue card’ for people who work specifically in agriculture in this country,” Galen concluded.

February Milk Production Up 1.4%

March 20, 2014 – The Agriculture Department’s preliminary data show February milk production in the top 23 producing states at 14.9 billion pounds, up 1.4 percent from February 2013. The 50-state total, at 15.9 billion pounds, was up 1.1 percent.    Revisions added 104 million pounds to the original January 23-state estimate, now reported at 16.2 billion pounds, up 1.3 percent from a year ago.    February cow numbers in the 23 states, at 8.51 million head, were down 1,000 head from January but 13,000 head more than a year ago.

Output per cow in the 23 states averaged 1,753 pounds, up 21 pounds from a year ago.

South Dakota was added to the monthly estimating program and Missouri was removed. The inclusion of South Dakota and exclusion of Missouri accounted for 65 of the 104 million pound revision to the 23-state milk production total for January 2014. The remaining 39 million pounds were a result of the normal revision process.

April FO Class I Milk Price is $23.65


March 20, 2014 — The Agriculture Department announced the April Federal order Class I base milk price today at $23.65 per hundredweight, up a penny from March, $5.99 above April 2013, and again sets a new record high. The price equates to about $2.03 per gallon. The four-month Class I average now stands at $22.70,up from $18.16 at this time a year ago, $16.95 in 2012, and $17.19 in 2011. Lest we forget the horrible year of 2009, the Class I average then stood at $11.56 per cwt.

The two-week NDPSR-surveyed butter average used in calculating the Class I value was $1.8308 per pound, down 1.7 cents from a month ago. Nonfat dry milk averaged $2.1007, up 2.9 cents. Cheese averaged $2.2211, down 10 cents, and dry whey averaged 64.95 cents, up 2.6 cents.

WIC Adding List of Eligible Foods

March 19, 2014 — Participants in the USDA’s Women, Infants and Children’s (WIC) nutrition assistance program will be able to use their benefits to buy from an expanded list of WIChealthy foods.

The WIC program has been around since 1972 as an amendment to the Child Nutrition Act of 1966, sponsored by then Minnesota Senator Hubert Humphrey. It was spurred by reports of low income mothers and babies suffering from malnutrition.

The program continues today by providing nutritious foods to those who need it by issuing vouchers for a special list of eligible foods. The list of eligible foods is now being expanded

“More whole grains and vegetables, healthier dairy reflecting the latest nutrition science, to make sure we are making these important investments families, right from their birth,” said USDA Undersecretary Kevin Concannon.

Sam Kass, who directs the White House “Let’s Move” program, says the additions to the food list will help the WIC program do more of what it is already doing.

“WIC is one of the reasons we are seeing such good declines in the numbers around childhood obesity rates,” he said.

Douglas Greenaway of the National WIC Association expects to see the new list sometime this year.

“These critical public health upgrades to the WIC food package, combined with the nutrition, education and breast feeding support that WIC provides insure that every WIC mother has the essential healthy nutrients that she needs for a healthy pregnancy and birth outcome, and every WIC child will grow healthy and ready to learn when they enter school,” Greenaway said.

It’s estimated some 9 million low income women and young children who receive federal food assistance under the governments WIC program will have greater access to those healthy foods, like healthy dairy products.

Poll Identifies Consumer Questions on GMOs

Washington, DC (March 19, 2014) – The results of a new national survey, commissioned by GMO Answers and the Council for Biotechnology Information, identify the leading questions consumers have about genetically modified organisms (GMOs) and how our food is grown. The survey was conducted in order to identify, for the first time, the top 10 questions consumers have about GMOs and to open up the conversation on biotechnology’s role in agriculture. Over the next several weeks, scientists, farmers, doctors and other experts will be answering one of the top 10 questions each week on the GMO Answers website and via Twitter. 

Ipsos, a global market research company, conducted a national, random telephone survey of 1,006 American adults ages 18 and older. Participants were asked: The following are questions some people have asked about GMOs. Which of the following questions around the use of GMOs would you be most interested in having answered? From a list of 23 environmental, business and health-related questions regarding GMOs, respondents identified these questions as the top 10 they want answered:

 

  1. If GMOs cause cancer
  2. If GMOs are causing an increase in allergies
  3. If big companies are forcing farmers to grow GMOs
  4. If GMOs are increasing the price of food
  5. If GMOs are contaminating organic food crops
  6. Why long-term health studies aren’t conducted on GMO plants
  7. If GMOs are causing an increase in the use of pesticides
  8. Why GMO companies seem like they are so against labeling GMO foods
  9. If GMOs are contributing to the death of bees and butterflies
  10. If livestock eat genetically modified grain, will there be GMOs in my meat

 

“A national dialogue is taking place about GMOs and it’s important for us to listen to the questions consumers are asking so we can provide the information to help address their concerns,” said Cathleen Enright, Ph.D., spokesperson for GMO Answers. “We are committed to transparency about how our food is grown, including an open discussion about GMOs. This is why we asked independent, third-party experts to answer these questions publicly. Our goal is to ensure consumers have the information they need to make up their own minds about GMOs.”

 

Since its launch last year, more than 500 questions about GMOs, food and agriculture have been answered by experts on GMO Answers.

 

Dr. Kevin Folta, University of Florida Interim Chairman and Associate Professor Horticultural Sciences Department, answered the first question: If GMOs cause cancer?  “The short answer is no, there is absolutely zero reputable evidence that GMO foods cause cancer. Cancer is a name applied to a spectrum of diseases where cells proliferate abnormally.  There is no way that the subtle and well understood alterations of a plant’s genes can cause cancer. There is nothing about the Bt protein (used in insect resistance, also in organic pest control), the EPSPS enzyme (which confers herbicide resistance, simply by substituting for the native enzyme in the plant) or the process itself, that would induce the genetic changes in human cells that would lead to cancer.  It is just not plausible.

 

Some of the confusion comes from reports where the Bt protein or glyphosate (the herbicide used on some GM crops) is applied to cell lines in a petri dish, and the cells show changes associated with stress and perhaps abnormal proliferation.  However, cells in a dish do not behave like cells in the body. Through years of careful evaluation there is no reliable evidence that GM foods cause the same changes in a living organism.

 

Quite to the contrary, future plants may be engineered to produce nutrients that fight/prevent cancer, or even eliminate compounds that increase cancer risk.  One such product is close to commercialization. Potatoes produce a small amount of acrylamide, a potential carcinogen, when heated to high temperatures.  A potato has been engineered to not produce that compound, leading to safer food.”

 

Among the questions not selected in the top 10, but have been the focus of conversations on GMO Answers include: if the development of GMOs is unnatural; if GMOs are causing gluten intolerance; if GMOs are contributing to obesity; if GMOs are contributing to infertility; if GMO companies are suing farmers; and if GMOS are contributing to the growth of super weeds.

 

“We recognize that consumers have questions about our products, and we need to do a better job explaining our technology, role in agriculture and the safety of our crops. In the coming weeks, we invite consumers to come back and follow the answers to the top 10 questions offered by experts at GMO Answers and become a part of this important conversation,” Enright concluded.

 

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About GMO Answers

GMO Answers is committed to responding to your questions about how our food is grown. Our goal is to make information about agricultural biotechnology easier to access and evaluate. The members of GMO Answers commit to five core principles —welcoming and answering questions on all GMO topics; making GMO information, research and data easy to access and evaluate, and supporting independent safety testing of GM products  using validated science-based methods; supporting farmers as they work to grow crops using precious resources more efficiently,  with less impact on the environment and producing safe, nutritious food and feed products; respecting farmers’ rights to choose the seeds that are best for their farms, businesses and communities and providing seed choices that include including making non-GM seeds based on market demands; and respecting people around the world and their right to choose healthy food products that are best for themselves and their families. GMO Answers is produced by the members of The Council for Biotechnology Information, which includes BASF, Bayer CropScience, Dow AgroSciences LLC, DuPont, Monsanto Company and Syngenta. Our members are dedicated to the responsible development and application of plant biotechnology. Visit www.GMOAnswers.com.

European Food Name Threat Looms

March 18, 2014 — U.S. lawmakers are calling it absurd that the European Union is attempting to block U.S. food producers from using common food names like Havarti and

USDEC's Tom Suber

USDEC’s Tom Suber

Parmesan.

“This creates disbelief in most people you talk to in the industry,” USDEC’s Tom Suber said. “The Europeans are not only trying but having some success in protecting what are commonly considered generic names.”

The Europeans want cheese names like Asiago, Provolone, Feta, and Harvarti only to belong to the original producers in certain defined regions in Europe.

“That’s a ridiculous proposition to us,” Suber said.

The Europeans have been able to get countries like Costa Rica and Korea to be able to adhere to the defined regions denying the U.S. of some higher value table cheeses that we might otherwise have.

The next step is to include this in the European Union Trade Treaty that is being negotiated now.

“National Milk and the U.S. Dairy Export Council are working very hard to make sure that doesn’t happen, but the threat is real, as incredible as it may seem,” Suber concluded.

Cash Cheese Hits Record High $2.40

March 18, 2014 — Call it the “Luck of the Irish” or just plain old fashion supply and demand at work, but CME cash block cheese again set a record high this morning on 1 unfilled cmebid, which priced the 40lb. Cheddar at an unbelievable $2.40/lb., up 3.75¢ on the day, with no seller in sight. The barrels, after two sessions of decline last week, jumped 4.25¢ this morning on 5 trades. The 1st carload sold at $2.26/lb. and 2 cars later the price had slipped to $2.2450/lb., but the 4th sale brought it back up to $2.2950/lb., and the last sale was at $2.3050/lb. That put the spread at 9.5¢, well above the normal 3-5¢ so either the barrels will climb some more or the blocks will fall. Place your bets!    FC Stone’s Chris Hildebrand wrote in this morning’s Insider Opening Bell that cheese may continue to rise but he also posed the question; “Who will pay that kind of price for cheese? It could be a worry.”

Class III futures responded with double-digit gains through Jan. 2015. The April, May, & June contracts were up 75¢.

Butter was up 2¢ this morning on a trade, and hit $1.90/lb., after slipping 0.5¢ Friday.    As the DMN story above says, butter supplies are available and inventories are not building. Hildebrand agrees and says “The market has been stable coming into Easter demand.”

Cash Grade A powder was unchanged for the 7th consecutive session today, holding at $2.04/lb., with no activity.

Today’s Market Closing Prices: Butter: Up 2¢, to $1.90/lb. Cheddar blocks: Up 3.75¢, to $2.40/lb. Cheddar barrels: Up 4.25¢, to $2.3050/lb. Grade A nonfat dry milk: Unchanged, at $2.04/lb. Class III milk: Mar. $23.49, +20¢; Apr. $23.12, +75¢; May $21.51, +75¢; & Jun. $21.01,+75¢. Based on today’s CME settlements, the Second Quarter 2014 average now stands at $21.88, +75¢ from Friday. The 2nd half average is now at $19.68, +35¢ from Friday.

Lee Mielke, DairyBusiness Update Associate Editor

 

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