Published on Tue, 01/20/2009 - 9:32am
(January 20, 2009) Market analyst Mary Ledman, Principal of Keough Ledman and Associates in Libertyville, Illinois, said in Tuesday’s DairyLine that she was surprised that Friday's Milk Production report showed more cows were added in December but explained that the all-milk price in November was strong so that carried into December, but she pointed out that 20,000 cows have been added to the nation’s dairy herd since October and “That doesn’t give those in the corporate buying seat any worry that we’re going to run out of milk any time soon.”
She added that “The signal is out there to producers who are watching the market place,” but based on conversations she has had with producers, culling is now being stepped up and that should be reflected in the January and February Milk Production reports but even more so in April and May, “Because those producers who are not watching the markets are probably going to be stunned in March with all milk prices less than $12.00 per hundredweight.”
Ledman admitted that cheese prices ended last week on an up note, but then the Milk Production report was issued that afternoon and “those increases might be difficult to maintain.” She said she’d like to see prices move above support but “that’s going to be a struggle as long as we keep adding cows.”
When asked if she thought cheese would start moving to the government, she said the economic signals are present to do that because, “If you take a CME price of $1.10 per pound and subtract 5 1/2-cents from that, you have the West Coast price for cheese.”
"When you start looking at those types of differences, you would think there would be some cheese moving to the government,” Ledman said. “It’s always been a struggle to get cheese to the government but the longer that we stay here at this price level, it’s going to cause cheese to move to the government.”
The butter situation is much the same, according to Ledman. With a CME price of $1.1050, you have a West Coast price of $1.05, “So whenever the market is less than $1.1050, you can see why West Coast butter will move to the government.” She adds that “We haven’t had the same rejection level of moving butter to the government as what we have with cheese in the past.”
DairyLine listeners will get a broader look at the U.S. economy in tomorrow's DairyLine broadcast from Bruce Scherr, Chairman of the Board and Chief Executive Officer of Memphis-based Informa Economics, Incorporated. Scherr was the key note speaker at last week’s Dairy Forum in Orlando. And, John Ellsworth has his weekly "Success Strategies" program in our second half.
(January 19, 2009) Dairy Management Incorporated’s, Joe Bavido, continued his series on the major accomplishments of the dairy check off program in 2008 in Monday’s “DMI Update.” He reported that dairy sales in food service saw good sales growth in 2008 and said that the check off has been successful in actually changing the face of foodservice related to dairy.
Case in point is the more than 60,000 restaurants across the country, including Burger King, McDonalds, Sonic, Subway, and Wendy’s that feature milk in single-serve, re-sealable plastic containers. In addition to that, Sonic added string cheese as an option to its kid’s meals and Burger King tested a new macaroni and cheese side item in its kid’s meals.
Dairy producers are also working to sell more cheese in the pizza category, according to Bavido, through a project with Domino’s and others, a project we recently spotlighted here.
“Food service partners have invested more than $100 million in advertising,” Bavido said, “That prominently feature dairy and, over the past five years, DMI food service partnerships have increased sales of milk, cheese. And yogurt by more than a million pounds.” Ingredient marketing also saw impressive growth in 2008, Bavido concluded.
Analyst, Mary Ledman, Principal of Keough Ledman and Associates in Libertyville, Illinois, has our weekly dairy market analysis on tomorrow's DairyLine broadcast and Dr. Alan Britten has his weekly "Udder Health Update" in our second half.
December Milk Production up 1.5 Percent
(January 16, 2009) Milk production in the 23 major States during December totaled 14.6 billion pounds, up 1.5 percent from December 2007. November revised production at
14.0 billion pounds, was up 1.3 percent November 2007. The November revision
represented a decrease of 11 million pounds or 0.1 percent from last month's
preliminary production estimate. Production per cow in the 23 major States averaged 1,726 pounds for December, 8 pounds above December 2007. The number of milk cows on farms in the 23 major States was 8.48 million head, 90,000 head more than December 2007, and 7,000 head more than November 2008.
The 50 state output, at 15.85 billion pounds, was up 1.4 percent. The preliminary data would put 2008 milk production at 189.7 billion pounds, up from 185.6 billion in 2007 or a 2.2 percent increase.
California output in December was down 0.8 percent from a year ago on a 25 pound per cow decline. Cow numbers were up 9,000 head. Wisconsin was up 2.3 percent, thanks to 5,000 more cows and 30 pounds more per cow. New York was off 0.1 percent on a drop of 1,000 cows. Output per cow was unchanged.
Idaho was up 1.7 percent, despite a drop of 50 pounds per cow. Cow numbers were up 24,000 head. Pennsylvania saw a 2.8 percent decline in production due to a 40 pound drop per cow and 2,000 fewer cows. Minnesota was up 2.3 percent on a 30-pound gain per cow and 2,000 more cows.
The biggest increase occurred in Kansas, up 20 percent on 12,000 additional cows and a 135 pound per cow increase. Texas was next, up 13.7 percent, thanks to 38,000 more cows and a 50 pound gain per cow. Colorado followed with a 6.8 percent gain, New Mexico up 6.1 percent, and Arizona, up 5.6 percent.
The biggest decline was in Pennsylvania, followed by Indiana, down 2.5 percent due to a drop in output per cow of 55 pounds, and Virginia, down 2 percent.
Milk production in the U.S. during the October - December quarter totaled 46.6 billion pounds, up 1.4 percent from the October - December quarter last year. The average number of milk cows in the U.S. during the quarter was 9.28 million head, 85,000 head more than the same period last year.
State by State
Change from Dec 2007
Output Per Cow
23 State Total