California Money Pit

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Dairy operations in California have lost nearly $4/cwt over feed cost since January 2009. Given, that California now produces 22% of the nations milk, one might think that on the other side of the continent there would be some expressions of concerns - hardly a peep.

Obviously, it will take 10 months of $4/cwt over feed cost for California to climb out of the pit.

Somewhat Different Story

http://www.fao.org/docrep/011/ai482e/ai482e09.htm

Skim milk powder exports are now expected to fall marginally to 1 186 thousand tonnes in 2009, down 2 percent from the previous year, largely due to a significant decline in exports from the United States to around the 350 thousand tonne level , as its excess supplies of milk have dropped. This will be the first fall in United States skim milk powder exports in six years. This decline should be almost offset by increased exports from Australia and New Zealand. Exports from the European Union are anticipated to hold steady around 180 thousand tonnes. Imports to Asian countries are expected to increase, stimulated by much lower prices. Imports by Mexico, supplied largely by the United States, are expected to continue at a recent historically high, given the importance of and support for its social feeding programmes. Imports of skim milk powder into Africa are expected to decrease again in 2009.

Of course, exports from NZ of milk powder is up but, the story being spread in the U.S. is fall in global demand.

Update on Payments

http://www.fsa.usda.gov/Internet/FSA_Notice/ld_617.pdf

From all appearances, payments are scheduled for mid-December.

Food Insecurity

http://www.ers.usda.gov/Publications/ERR83/ERR83.pdf

There is something very ironic here. The purchasing power of food, at the farm level, amounts to little. By comparison, in 1939 8 hundredweight of milk would buy an acre of farmland in my county.

In 2008, 85.4 percent of U.S. households were food secure throughout the
year. Food-secure households had consistent access to enough food for active
healthy lives for all household members at all times during the year. The
remaining 14.6 percent (17 million households) were food insecure. These
households, at some time during the year, had difficulty providing enough
food for all their members due to a lack of resources. The prevalence of food
insecurity was up from 11.1 percent (13 million households) in 2007 and was
the highest observed since nationally representative food security surveys
were initiated in 1995.

MPC NFDM Testimony

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"Our testimony stated that, “the vast majority (in excess of 95%) of the powder that makes up the CWAP comes from two cooperatives that jointly market their powder through a single marketing agency in common.” Those two cooperatives are California Dairies, Inc. and Land O’Lakes, both of whom had representatives testifying at the November 9th hearing."

"As MPC explained at length in our testimony, our state’s powder makers are insulated from price risk in the CWAP,"

NFDM Again

Here is the OIG on NFDM from last year report:

http://www.usda.gov/oig/webdocs/26901-01-IR.pdf


From the November 2009 Milkweed

Few of dairy’s greatest cynics would think that “improper reporting” of weekly dairy commodity prices to NASS would pop up again … so soon … when the dust (lawsuits) has yet to settle from the previous milk pricing fiasco has yet to settle. In 2006-2007, dairy farmers whose milk was priced by the federal milk order lost untold hundreds of millions of dollars in legitimate milk revenue, because of improperly reported milk powder prices by DairyAmerica – the co-op milk powder cartel.

The NASS milk powder report of October 17, 2009 reported $1.046 per pound for NFDM, on October 24, 2009 NASS reported NFDM price as $1.0345 per pound and on November 6, 2009 the NASS price was $1.0190 per pound.

Dairy Market News (DMN) in the in the November 5, 2009 report said, “Western low/medium heat prices continue to move higher and the market tone is firm.” Additionally, DMN reported NFDM price for the West as MOSTLY: $1.1000 - 1.4000.

DMN’s report on Western prices stated, “U.S. manufacturers' stocks of NDM at the end of September were reported at 121.7 million pounds, 24.6% lower than a year earlier and 14.3% less than August.” How then, can the NASS NDFM price fall unless we are back to the same old shenanigans?

Bingo! DMN reported (report 44) California NFDM price on October 23, 2009 as $.9928 per pound and for the survey of October 30, 2009, the price fell to $.9639 per pound. Additionally DMN states, quite clearly, “Prices for both periods were influenced by
effects of long-term contract sales.” Prices for NFDM reported by California Department of Food and Agriculture are the only NFDM prices which are falling.

DairyAmerica, the “marketing agency in common” for most of the cooperatives producing NFDM list their price on November 6, 2009 as $1.3825per pound.

So, here is a number: 202 456-1111

This is the White House comment line. A real person will answer. "Time to clean up USDA."

No one was compensated last time.

October's Milk Production

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Ten green bottles sitting on the wall,
Ten green bottles sitting on the wall,
And if one green bottle should accidentally fall,
There'll be nine green bottles sitting on the wall.