What’s Old Becomes “News” Again

(March 30, 2012) For those of us involved in the dairy industry for a number of years, we know that what’s old can become “news” again. Dairy Profit Weekly editor Dave Natzke updated DairyLine listeners on a couple of long-standing issues that have resurfaced recently.

“While I was in Kansas City last week for the Dairy Farmers of America annual meeting, Tom Gallagher, head of Dairy Management Inc., the nation’s dairy promotion organization, addressed a worrisome, long-term trend for dairy farmers – that of declining U.S. fluid milk sales.

Gallagher called the trend dismal, noting that fluid milk sales for the previous year were down 3.9%, and that both per capita and fluid milk total volume sales were down. Part of the problem, he said, is that the direct relationship between retail milk prices and consumer sales has been proven over four decades, and that retail fluid milk prices are up 11% compared to a year ago.

Also hampering sales, Gallagher said, is that fluid milk in gallon jugs has been treated as a “commodity” by producers, processors and consumers alike, with little product and marketing innovation. To stop and reverse the trend, Gallagher outlined a number of efforts to increases fluid milk sales.

 

Turning our attention to food labels, the U.S. Trade Representative office is appealing a 2011 World Trade Organization (WTO) ruling over U.S. implementation of a mandatory U.S. country-of-origin labeling (COOL) requirement. The rule, first approved in 2002 and initiated in 2009, required country-of-origin labels on most meats and fresh produce sold in the U.S., and legislative proposals have sought to include dairy products under the rule. However, WTO sided with Mexico and Canada last year, challenging the rule’s validity under global trade agreements. A WTO decision on the appeal is expected to take months.

In the past couple of weeks I’ve talked to a number of farmers in the southern part of the Corn Belt already starting fieldwork for the 2012 growing season. Two big government reports, to be released later (today/Friday), will give us an idea on how the year’s feed prospects and prices are shaping up for dairy farmers. You can find summaries of these reports in this week’s DairyProfit Weekly.”