Hoard's Dairyman Dairy News



U.S. Capitol

As printed in our May 25, 2016 issue...

MILK PRICE RECOVERY could take longer than originally projected by some analysts. Prospects have dimmed due to growing product inventories and continued low oil prices. It could take $65 per barrel crude to fully bring back oil-exporting countries that have been dairy importers.

U.S. CHEESE INVENTORIES CLIMBED to the highest levels since June 1984. Of the 1.2 million pounds of cheese in storage, 61 percent was American varieties, according to USDA’s March Cold Storage report.

CLASS III FUTURES HAVE DROPPED $2 PER CWT. for June through November contracts since early January. They’re now trading around $14.

BUTTER CONTINUED TO BUOY MILK CHECKS as spot butter traded within one penny of the January 4, 2016, open of $2.04 per pound. Internationally, butter traded well below that mark as New Zealand butter sold for $1.18 per pound on the Global Dairy Trade.

AT $10.41 PER CWT., or $3.90 per kilogram of milk solids (kgMS), New Zealand dairy farmers have been losing 50 cents to $1 per kgMS this season, stated farm specialist Brent Goldsack with PwC. Just last year, payouts for the world’s leading dairy exporter were $8.40 per kgMS.

TO MAKE ENDS MEET, KIWI FARMERS HAVE CUT COSTS. North Island farmers have reduced expenses by 21 percent over the past two seasons and now range from $11.58 to $12.91 per cwt. South Island trimmed 16 percent off the expense ledger with costs at $13.40 to $14.75.

YOGURT MANUFACTURER DANNON has pledged to no longer accept milk from cows fed grains from genetically modified organisms (GMO). The plan would be fully implemented by 2018, reported Dannon. To source that milk, it would require 50,000 cows to consume non-GMO feed.

SOURCING GMO-FREE GRAIN may not be that easy. Estimates peg that 92 percent of corn and 94 percent of soybeans in the U.S. came from GMO-based germplasm in 2014 alone, with the trend moving upward.

ONLY ONE FARM HAD ITS CO-OP MEMBERSHIP discontinued, according to Land O’Lakes officials in response to an earlier report in the April 25, 2016, Washington Dairygrams. The co-op didn’t make the decision to discontinue the membership of this northeast Wisconsin farm lightly.

MEMBERSHIP CAN BE DISCONTINUED for a number of reasons, including quality issues, regulatory compliance, or a violation of the membership agreement. In this specific case, no disclosure was made.

BRIEFLY: USDA projected an additional 889 million pounds of beef on the market, reversing a five-year declining trend in beef production. U.S. dairy farmers had total cash receipts of $35.9 billion in 2015. That was $13.7 billion less than 2015’s record value in milk sales.

In your June 2016 issue...

DAIRY PRODUCT SALES SHOW VIBRANT PROMISE. Exports, ingredients, and operational excellence are opportunities for the U.S. dairy sector. Achieving these mileposts will come with challenges.

DIVERT ENERGY FROM METHANE TO MILK. Reducing methane emissions is an economic and environmental “win.”

DEEP-BEDDED STALLS FOR THE WIN. In most situations, loose bedding material does the best job at keeping cows comfortable and clean.

Click here to see the previous months Washington Dairygrams