Block and barrel cheese inched three quarters of a cent higher Monday, putting the blocks at $1.3875 per pound and barrel at $1.38 but that’s a far cry from the $1.80 that New Zealand cheese is reportedly selling. Downes-O’Neill dairy economist Bill Brooks says “either we don’t have product that he folks out there want or New Zealand might have everything filled up already at those price levels.”

Milk production is having problems there, he said, and that’s tightening their market and so far the international markets haven’t gravitated to our more than adequately supplied cheese market here.”

You would think that U.S. cheese would be considered a bargain at current prices and brooks admitted that was so, even with transportation costs, but sometimes U.S. cheese may not meet the quality or quantity that the international markets want. He added that a lot of what’s traded on the international market is a white Cheddar while most U.S. Cheddar is yellow so that takes away some of the market potential.

He says the U.S. is exporting a fair amount of cheese, when you look at the overall spectrum of dairy commodities, the U.S. still isn’t geared for that market yet and he’s not sure the U.S. ever will be because we are such a domestic dominated market.

Brooks looks for cheese prices to run “sideways” for a while. Price have traded in the $1.30s to the low $1.50s and are currently in the mid $1.30s and have been since mid April. He doesn’t see that changing until we get through the flush and warmer weather. Mid-summer we may start to see steady gains, he said, but he doesn’t expect the run up to levels seen in 2007 and 2008 for some time.

The crop planting season is off to a record pace, according to Friday’s DairyLine. Dairy Profit Weekly editor, Dave Natzke, has been, pardon the pun, outstanding in the field, and reported that, as of May 3, nearly 70 percent of the nation’s intended corn acreage and 15 percent of the soybean acreage had been planted, which is well ahead of last year’s pace and historical averages for early May.

About 20 percent of the corn plants had emerged, nearly double the 5-year average, he said, and most areas are reporting good soil moisture levels as crops begin to grow. In the Midwest and Northeast, there were even farmers preparing for hay harvest, a job usually associated with Memorial Day.

“All eyes will be on the weather this weekend,” he said. “We reached nearly 80 degrees here in north-central Wisconsin on Tuesday, but frost and up to 2 inches of snow are forecast for Friday evening, which could threaten emerged plants.”

Last week’s monthly USDA Ag Prices report provided a mixed bag for dairy feed prices, according to Natzke. U.S. average corn prices were down slightly in April, but soybean and hay prices were slightly higher than the previous month. Combined with a decline in milk prices, the monthly milk-feed price index was down, continuing a trend of nearly 30 months of unfavorable relationships between milk prices and feed costs, he said.

Several factors will impact feed prices for the remainder of 2010, according to Natzke. First, retail gasoline prices are running more than 80 cents per gallon higher than a year ago, boosting corn demand for ethanol production.

Corn export demand is also increasing, he said, but on the plus side, a strengthening U.S. dollar could slow export demand. “Based on those factors, dairy farmers who buy corn off the futures market can expect wide fluctuations as the growing season progresses,” Natzke warned.

For dairy farmers who include fish oil in their dairy rations, the oil spill in the Gulf of Mexico also spells trouble. Dairy nutritionists have told Natzke that they’re already seeing a jump in fish oil prices.

In response to the threat of increased regulation, National Milk coordinated dairy industry efforts four years ago to work with agricultural researchers to obtain the best possible data quantifying actual on-farm emissions of ammonia, particulates, hydrogen sulfide, and volatile organic compounds.

NMPF’s Chris Galen, reported in Thursday’s broadcast that dairy farms, currently, are subject to regulations from the Clean Air Act and other federal legislation however, a few years ago the EPA was poised to begin regulating farms but didn’t have reliable data, especially regarding dairy farms.

NMPF joined other livestock organizations, using one-time funding from the National Dairy Board, to commission air researchers from land grant universities set up sophisticated monitoring equipment at five dairies across the country to conduct the National Air Emissions Study and quantify emissions.

That data collection is now complete, he reported, and the data will be given to the EPA. The EPA is not expected to determine how the findings should be applied to farms until the end of 2011, according to Galen, but the data will be analyzed and a formula developed so other farms can enter their specific data to calculate what their actual emissions are.

The goal is to prevent “any sort of heavy handed regulations of farms,” Galen said. EPA is ready to regulate farms, he said, but “we want to minimize the invasiveness of anything they do.” Once EPA makes the data available to the public, some environmental groups can be expected to interpret them in ways that make livestock operations look like major polluters, or the recipients of a lenient deal from EPA, Galen warned, but National Milk will mount an aggressive effort to counter any misinformation once the data is available.

The International Dairy Foods Association’s Peggy Armstrong said she felt she was “preaching to the choir” in Wednesday’s DairyLine but reported results of new research about one of the health benefits of drinking milk.

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A study presented the last week of April at the Experimental Biology conference in Anaheim, California showed that cow’s milk and milk products are America’s top source of Vitamin D. 

“They found that milk supplies half of all the Vitamin D in the American diet,” Armstrong said. Using the latest national data on what more than 16,000 Americans over the age of 2 eat, researchers looked at the contribution of each food group to total Vitamin D intake. “No other food item came close to supplying the Vitamin D punch that milk and milk products provide,” she said, “In fact, for kids ages 2-18, milk provided nearly two-thirds of all vitamin D in their diet.” 

The findings are important, Armstrong said, because some estimates suggest that as many a 55 percent of adolescents may be deficient in Vitamin D. This deficiency can put children and adolescents at a higher risk for broken bones now and osteoporosis later, according to Armstrong, but Vitamin D may well play a much bigger role in our health than strong bones. Emerging science suggests that Vitamin D may also help protect against diabetes, hypertension, heart disease and some cancers, and supports a healthy immune system. 

“This study reinforces that it’s important to get the recommended three 8 ounce glasses of milk each day,” Armstrong said, and “provides 75 percent of the dairy value of vitamin D.” Milk also provides eight other essential nutrients including calcium, potassium and Vitamin A, she said. “So, this morning, let’s raise a nice cold glass of milk to continued good health,” Armstrong concluded.This is good news at a time that milk’s nutritional value is still challenged so choir; it’s up to you to sing of milk’s goodness to the world. 

In response to the threat of increased federal regulation, National Milk coordinated dairy industry efforts four years ago to work with agricultural researchers to obtain the best possible data quantifying actual on-farm emissions of ammonia, particulates, hydrogen sulfide, and volatile organic compounds.  

Using one-time funding provided by the National Dairy Board, air researchers set up sophisticated monitoring equipment at five dairies across the country to conduct the national air emissions study.

The first day of trading in May saw cheese hold and butter inch a penny higher. Mary Ledman, Principal of Keough Ledman, Associates Incorporated in Libertyville, Illinois, said in Tuesday’s DairyLine that “Everybody seems to want to be holding butter in anticipation of further price increases in the second half of the year.” She added that butter stocks and production are down from a year ago and global demand is good and “Until the EU (European Union) does anything with its couple hundred thousand metric tons of butter that it has in storage there’s an opportunity for butter prices to continue to rise.”  

Ledman believes the bottom is in on cheese and she expects prices to climb as butter and powder pull Class IV milk prices higher. Class II prices are being pulled higher and even Class I being driven off of butter-powder values, she said, “So cheese will come along for a ride,” but she warns Class III markets may lag $1.00-$1.50 versus the Class IV markets in the near future.  

“I hope summertime grilling helps pull demand higher for cheese,” Ledman said and she said the block-barrel spread could be more positive to barrel. “It’s the flush in the Upper Midwest and I think there’s going to be plenty of milk around and plenty of cheese.”  

Reacting to China’s agreement to give the U.S. 30 days to work with authorities to secure an agreement on a new health certificate for food-grade dairy exports to China; Ledman said the dispute claims that the U.S. does not have a health certificate in place to meet China’s regulations for food grade dairy products.  

Some of the more cynical people believe the amount of time it takes to renegotiate this agreement will reveal whether this is a global monetary policy issue or really a food safety issue, according to Ledman. Some believe this is being dictated by monetary policy rather than food safety, she concluded.

This week’s Success Strategies podcast, John Ellsworth talks about having a timely plan to accomplish your goals.

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The Agriculture Department’s March Dairy Products report puts butter production at 141.1 million pounds, unchanged from February but 6.2 million pounds or 4.3 percent below March 2009.

Mozzarella cheese output totaled 300.4 million pounds, up 41.3 million pounds or 16 percent from February, and 20.4 million or 7.3 percent above a year ago.

Total Italian type cheese, at 380.4 million pounds, was up 50 million pounds or 15.1 percent from February, and 21 million or 5.8 percent above a year ago.

Cheddar production totaled 281.6 million pounds, up 37.2 million pounds or 15.2 percent from February, and up 2.3 million pounds or 0.8 percent from a year ago.

American type cheese amounted to 362.3 million pounds, up 41.9 million pounds or 13.1 percent from February, but down 2.1 million pounds or 0.6 percent from a year ago.

Total cheese output came to 890.1 million pounds, up 114.8 million pounds or 14.8 percent from February, and 19.6 million pounds or 2.3 percent above a year ago.

California’s April 4b cheese milk price was announced this morning by the California Department of Food and Agriculture at $12.30 per hundredweight, up $1.17 from March, $1.89 above April 2009, but 62 cents below the comparable Federal order Class III price. The Golden State’s 4a butter-powder price is $13.49, up 65 cents from March and $3.70 above a year ago.

Dairy Management Incorporated’s Joe Bavido was back in Monday’s “DMI Update” to continue our discussion of the UN’s Food and Agriculture Organization’s new report on “Greenhouse Gas Emissions from the Dairy Sector.” The report was good news for the dairy industry and part of the dairy industry’s effort now is to take this news to consumers.

The process included a comprehensive Life Cycle Assessment (LCA) for fluid milk in conjunction with the Innovation Center for U.S. Dairy and the University of Arkansas, according to Bavido. The LCA has been recognized for its important contribution to greenhouse gas science, he said.

“The U.S. dairy industry is following the International Organization for Standardization standards which are widely supported by environmental scientists, Bavido reported. He said the LCA is important because research shows that consumers want to know that producers of the products they buy care about the environment. He said that, “When consumers believe that dairy is not only nutritious, delicious, and delivered at a good value, it is also environmentally friendly, they tend to purchase more dairy products.” “This,” he concluded, “Is the goal of the check off program, namely to increase sales.”