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The April Federal order benchmark milk price inched 14 cents higher Friday, to $12.92 per hundredweight. That’s $2.14 above April 2009 and pulls the 2010 average up to $13.62, up from $10.33 at this time a year ago, but compares to $17.78 in 2008. Futures price portend more gains to come. The May contract settled Thursday at $13.42, June $13.95, July $14.52, August $15.00, with a peak of $15.10 in September before heading back down seasonally. The April Class IV price is $13.73, up 81 cents from March, and $3.91 above 2009.

The NASS-surveyed cheese price averaged $1.3827 per pound, up 2 cents from March. Butter averaged $1.4773, up 3.9 cents. Nonfat dry milk averaged $1.1208, up 7.5 cents, and dry whey averaged 36.43 cents, down 1.2 cents. California’s comparable 4a and 4b price are issued May 3.

A trade dispute with China is threatening to slow dairy price recovery, according to Dairy Profit Weekly editor Dave Natzke. Speaking in Friday’s broadcast, Natzke reported that a small but growing market for U.S. dairy exports could be closed as early as May 1, after Chinese officials abruptly said they would no longer accept terms of a 2007 agreement.

On April 22, the Chinese government informed U.S. officials it intended to block imports of U.S. dairy products due to alleged deficiencies in “export certification.” In negotiations for the 2007 agreement, China had requested certification statements regarding animal health issues, which the USDA said were unnecessary for dairy products made from pasteurized milk. China eventually signed the English/Chinese USDA Agricultural Marketing Service (AMS) Sanitary Certificate agreement without that language. However, in last week’s letter, China apparently retracted that decision.

The value of 2008 U.S. dairy exports to China totaled about $180 million, or about 5 percent of the record $3.8 billion in dairy products exported that year. According to the U.S. Dairy Export Council, primary products were whey proteins, milk powders and lactose. As of late this week, U.S. officials hoped to avert the trade blockade, or at least request an extension to the May 1 deadline, so negotiations can continue.

May could also be a pivotal month for the future of any federal dairy policy reforms, according to Natzke. A team of economists are evaluating the economic impact of policy proposals, including several supply or so-called growth management plans, on dairy farmers.

Meanwhile, a spokesman for California U.S. Rep. Jim Costa said the congressman is close to introducing a dairy supply management bill in the House. And, the Dairy Policy Action Coalition said a bill to fund mandatory, daily price reporting of dairy product sales is also advancing. Finally, the National Milk Producers Federation is expected to provide details of its Dairy Producers Income Protection Program in May.

National Milk is renewing its call on the Food and Drug Administration to crack down on the misuse of dairy terms like milk, cheese, and yogurt by imitation products made from soy, rice, almonds, and hemp.

Chris Galen reported Thursday that in 2,000, NMPF sent a petition to the FDA asking them to crack down on processors who used dairy specific terms, primarily milk with “things that don’t got milk.”

The Federation predicted that, if the FDA did not do this, there would be a proliferation of those labels and other products and “sure enough 10 years later,” Galen said, “We’re seeing soy cheese, hemp milk, and non dairy ice cream.”

He pointed out that there are standards of identity in place and “If you use terms like ice cream, cheese, yogurt, or milk, they must be made from dairy milk, milk from the lactation of an animal. You can’t make dairy products out of hemp or rice or soy.”

Galen reported that they received no response in its initial call on the FDA, calling it “very frustrating because we felt that we had a good case and we still feel, 10 years later, that we have a good case here, in fact we have a better case because we’re seeing a bevy of new artificial dairy products reaching store shelves that have imitation products made from hemp, rice, almonds, and other plants, legumes, and vegetables. He added that, in some cases marketers create new words like cheese, spelled with a V instead of an S “in an attempt to skirt the standards of identity.”

This isn’t just a labeling issue, according to Galen, because a lot of these products do not have the same nutritional level or value as real dairy products do and consumers of so-called rice or soy milk, think they’re getting the same vitamin and mineral content as real cow’s milk, don’t.

Related: FDA Should Stop Imitation Products

Seven Valleys, Pennsylvania dairy producer and Beef Board member Joyce Bupp talked about the importance of farmers “telling their story” in Wednesday’s DairyLine. Bupp is in the process of completing the beef check off’s “Masters of Beef Advocacy” program. She said the program is designed to take information that farmers are very familiar with everyday but don’t give a lot of thought to and put it into a compiled, easy-to-read form that reinforces what farmers do. She said it includes information on modern meat production, animal care, beef safety, nutrition, and “things that consumers, neighbors, and friends are interested in.”

 

 Cattlemen's Beef Board Update: Play Now | Play in Popup | Download

She acknowledged that there is an information gap among consumers and said it’s sad because people are interested in what farmers do and are supportive once they know but “there’s such a disconnect of a lot of society today from agriculture that they just don’t understand they’re and really hungering for information.”

She agreed to the importance of farmers telling their story before someone else does it for them because “there are a lot of organizations out there with agendas and large advertising dollars.” She admitted that farmers don’t have a lot of dollars but “we do have a lot of care and belief in our industry, a lot of passion for what we do so it really behooves us as producers to be ready to step up to the plate and educate ourselves.”

The program “makes us more comfortable with what we’re talking about,” she said. “We know what we do but it just helps us to organize our thoughts and have some facts at hand and be better spokespersons for our industry.”

This week’s Success Strategies Podcast, John Ellsworth discusses the need to stay optimistic in a challenging industry.

 

 Success Strategies Podcast: Play Now | Play in Popup | Download

Cash dairy trading was pretty quiet in the last Monday of April, with block and barrel cheese inching a quarter cent higher on two unfilled bids of each to $1.37 and $1.35 respectively, and butter holding steady at $1.57 on one bid.

Downes-O’Neill dairy economist Bill Brooks said in Tuesday’s DairyLine that we have a lot of cheese out there and last week trading saw the highest volume on blocks in a year but we may be starting to bottom out as buyers feel comfortable about owning product, according to Brooks.

Butter wise, Brooks said we saw a pretty good run up, following the heavy demand period of Easter but “we’re not seeing a great deal of production come in even with the wide disparity between Class III and Class IV prices and there’s still a lot of pent up demand for future product. A lot of people want to own butter right now, he said, in anticipation of  tighter supplies or export markets later on but right now it’s in a “pause period while people evaluate whether the price is at the right level or not.”

The basic message from last week’s Cold Storage report is that we still have a lot of cheese relative to demand, Brooks said. We’re back over a billion pounds, he said, a level achieved once last year but not since 1984 prior to that. We do consume a lot more than we did in 1984, he admitted, but we still have a healthy supply on hand, 35 days worth, the same as what we had at the end of February.

Butter looks more promising, according to Brooks, with levels comparable to a year ago or a 46 day supply but we have price that’s 20-25 cents so it goes back to the anticipation of the market and folks want to own product right now because they believe that there’s going to be more prices increases later on down the road that they can either take advantage of or they don’t want to get hurt by.”

Dairy Management Incorporated’s Joe Bavido discussed the U.N.’s Food and Agricultural Organization’s report on Greenhouse Gas Emissions from the Dairy Sector in Monday’s “DMI Update.” He said that the report states that approximately 4.1 percent of total global GHG emissions are related to the global dairy sector. The figure includes emissions associated with milk production, processing and transportation as well as the emissions from meat production from dairy-related culled and fattened animals.

“Considering just global milk production, processing and transportation and excluding meat production, the global dairy sector contributes 2.7 percent of GHG emissions, according to the new report, Bavido said.

Bavido called the report “good news for dairy because it is significantly less than the 18 percent figure cited for livestock agriculture in the November, 2006 report. The 18 percent number has been inaccurately attributed to dairy GHG emissions, he said, “and dairy has taken some negative press in regard to that.”

Bavido also reported that work is underway at the Innovation Center for U.S. Dairy to “build a foundation of credible data to help tell consumers about the longstanding commitment of dairy farmers and the dairy industry to the environment.” The Center works with the University of Arkansas Applied Sustainability Center and other experts to determine GHG emissions for U.S. dairy, he said, beginning with a comprehensive life cycle assessment for fluid milk. Preliminary research attributes an estimated 2 percent of total U.S. GHG emission to U.S. dairy, according to an Innovation Center press release.

The May Federal order Class I base milk price was announced this morning by the USDA at $13.80 per hundredweight, up 58 cents from April and $2.83 above May 2009. That brings the year’s average to $14.25, up from $11.44 at this time a year ago, but compares to $18.52 in 2008.

The NASS-surveyed butter price averaged $1.4861 per pound, up 6.1 cents from April. Nonfat dry milk averaged $1.1250, up 7.9 cents. Cheese averaged $1.39, down 1.5 cents, and dry whey averaged 36.36 cents, down 1.9 cents from April.

There’s been a lot of “hot air,” If you’ll pardon the pun, related to the dairy industry’s role in greenhouse gas (GHG) emissions and global climate change but a new United Nations’ Food and Agriculture Organization (FAO) report counters some of that rhetoric, showing dairy contributes far less to greenhouse gas emissions than what is widely cited by anti-livestock groups.  

Dairy Profit Weekly editor, Dave Natzke, said in Friday’s broadcast that much of the ongoing greenhouse gas and global climate change debate related to the livestock and dairy industries centers around a 2006 United Nation’s report, “Livestock’s Long Shadow – Environmental Issues and Options” which claimed livestock agriculture contributed 18 percent of the world’s greenhouse gas emissions, even more than emissions from all transportation.  

Anti-meat and milk groups have used those estimates to call for “Meatless Mondays,” Natzke said, and a reduction in dairy product consumption as a means to “save the planet.” 

However, one of the authors of that earlier report has admitted statistics were exaggerated, and this week, a new FAO report estimates global milk production, processing and transportation contributes just 2.7 percent of global greenhouse gas emissions. And, if you add emissions related to meat produced from dairy animals, the estimate is just 4 percent. 

The FAO report, Greenhouse gas emissions from the dairy sector, focuses on the entire dairy food chain, from feed production and on-farm emissions, to emissions associated with milk processing and packaging and transportation of dairy products to retailers.  

Dairy industry leaders applauded the new information, saying it gives a more accurate assessment of dairy’s greenhouse gas emissions, and helps identify the key areas where dairy research and industry organizations, such as the Innovation Center for U.S. Dairy, can work to drive greenhouse gas emissions even lower.

March butter stocks totaled 196.6 million pounds, down 6.6 million pounds or 3 percent from February and 15.9 million pounds or 7 percent below March 2009, according to preliminary data in the Agriculture Department’s latest Cold Storage report issued this afternoon. February butter stocks were revised up 5.6 million pounds from the previous month’s estimate.  

The March American cheese inventory, at 600.8 million pounds, was unchanged from February but 52.2 million pounds or 10 percent above a year ago. February revised estimates were raised up nearly 1.1 million pounds.

Total cheese stocks amounted to 1.8 billion pounds, up 15.1 million pounds or 2 percent from February, and 85.6 million or 9 percent above those a year ago. February total cheese stocks were revised up 2.1 million pounds from previous month.