Hoard's Dairyman Dairy News


As printed in our August 10, 2014 issue...

CANADA’S AGROPUR HAS EXPANDED RAPIDLY as it entered into three different business agreements this past July. The largest deal would have Agropur, Canada’s largest dairy co-op, buying Davisco Foods and its three plants in Le Sueur, Minn.; Jerome, Idaho and Lake Norden, S.D.

DAVISCO PROCESSED 3.8 BILLION POUNDS of milk last year, enough to rank it 12th among the nation’s largest dairy co-ops (even though it has been a privately held family business). Davisco’s $1 billion in sales would push Agropur’s total transactions to $5.8 billion annually.

IN TWO OTHER DEALS, Agropur acquired the dairy assets of Northumberland Dairy Cooperative. That Canadian entity had annual sales of $67 million. In another deal, Agropur also purchased Sobeys in July.

LONG-TERM PRICE PROJECTIONS have lacked consensus. A bearish Bloomberg report projected that expanded milk output in New Zealand and Europe could spur a five-year global milk surplus. It also cited a 30 percent drop-off in whole milk powder prices since January at the Global Dairy Trade as a harbinger of downward price trends.

USDA HELD STEADY with its $20.25 All-Milk price estimate for 2015. Meanwhile, Class III futures averaged near $20.40 for the rest of the year.

CORN AND SOYBEAN CROPS have been rated in the best condition in over a decade. As a result, December corn futures hovered near $3.70 per bushel while soybeans and wheat fell to their lowest point since 2010.

FARMLAND APPRECIATED 8.4 PERCENT last year and 4.7 percent annually since 1990, reported the National Council of Real Estate Investment Fiduciaries. When factoring crops and livestock sales, returns totaled 17.4 percent in 2013 and 11.9 percent annually since 1990.

CHINA IS POISED TO PASS CANADA and become the second largest purchaser of exported U.S. dairy products. Through May, the Asian country imported 121 percent more butter, 89 percent more skimmed milk powder, 70 percent more whole milk powder and 67 percent more cheese.

HISPANIC LABORERS HAVE BEEN FINDING more work at home, reported a University of California-Davis study. As a result, U.S. labor costs have risen nearly 20 percent since 2007 to over $11 per hour.

DAIRY FARMERS OF AMERICA agreed to pay $50 million to settle a class action, antitrust lawsuit filed by Northeast dairy farmers. In 2011, Dean Foods settled with a $30 million payout. Neither admitted any wrong.

BRIEFLY: June milk rose 1.9 percent as Ohio was the only top 23 state to reduce milk flow. At a time when butter inventories typically grow, June’s warehouse stocks fell 3 percent compared to May and were off 41 percent from last year. Texas-based Sexing Technologies acquired Taurus Service of Mehoopany, Pa. Total cash sales by dairy farmers rose to $40.3 billion in 2013, up 8.7 percent from 2012’s $37 billion.

In your August 25, 2014 issue...

A HAIRY PROBLEM UNDER FOOT. Digital dermatitis is prevalent on dairy farms, and managing it takes an integrated approach.

SMALL ISLAND, BIG AMBITIONS. Irish eyes are set on making a splash in the world market once European quotas are lifted next year.

OHIO COW SHATTERS PRODUCTION RECORDS. Paris, a 15-year-old Brown Swiss, has set a new record for combined lifetime pounds of protein and fat produced by a cow in the United States.

Click here to see the previous months Washington Dairygrams