Thursday, August 27, 2009

More Confusion

(click to enlarge}

Once again on August 26, 2009, powder, NFDM, from the West has been sold to the CCC for $.92 per pound. This is after selling over a million pounds earlier in the week. Notice the DairyAmerica price for last week shown above.

Now, if this is not enough, here is what Dairy Market News has to say about the Western milk supply:

Madison, WI August 27, 2009
For the week of August 24-28, 2009 (REPORT 34)
CALIFORNIA milk production remains well below year ago levels and is below processor needs. As fluid milk accounts take more milk to fill school needs, the effect is further tightening the milk supplies available to make other products. Milk is being moved around and imported from nearby states to fill needs. ARIZONA milk output is steady to lower when compared to recent weeks. Temperatures are expected to reach 115 degrees this week and any humidity will only worsen conditions for the milking herds, making heat abatement measures mainly futile. Milk is being shipped out to fill needs. With steady to higher bottled milk need, processing plants are being run on reduced schedules. Drying activity has basically ceased. NEW MEXICO milk production is declining. Milk is being shipped to other areas to meet increased fluid milk needs. Processing plants are running on reduced schedules with limited intakes. CREAM supplies are tightening in the region, yet are available. Cream volumes are increasing from bottlers skimming milk, yet declining because of reduced farm level milk supplies. Butter churning is declining in some areas. On Wednesday, August 26, the CME Group butter price closed at $1.1675, down 0.5 cents from a week ago. Cream multiples moved higher, trading in the range of 117-127 FOB and vary depending on class usage and basing points. In the PACIFIC NORTHWEST, temperatures have moderated and cow comfort levels are better. The heat of previous weeks still has some lingering effects on production levels. Combined with seasonal production bottoms, this has many processors looking for additional milk supplies. Supplies of spot milk are very tight with processors adjusting schedules to available supplies. Hay production in the northwest has been good and supplies of fourth crop hay will help to keep producer feed costs in check compared to last year. UTAH AND IDAHO saw some cooler days with some rain over the last week. Milk production levels are below needs for some plants. The tough economics of dairying for the last year have caused producers to alter rations and this has cut production in some instances. Third crop hay and small grain harvest continue and producers are hoping to see feed costs reduced for the coming season to increase profitability. Dairy heifer sales in Utah saw higher prices with prices topping $1400.00 and average prices higher than in recent months.

Since farm milk is priced from the NASS survey of NFDM, it would seem someone is trying to drive down prices.


  1. If the consumer cant find milk to put on their kids cereal maybe beer would be a choice... lets see how that will go over.

  2. "someone"? this all reminds me of what happened in the hog business between 1994 and 2000 (esp 1998) except it wasn't 'co-ops' driving the prices down.

    I don't milk, but northeast Iowa is (was?) home to quite a few cows, and until I started reading this blog (thanks Alan Guebert) I had no idea how ignorant I was of how milk is priced. There's only one reason for it to be so complicated, and that's so no one on the outside can figure out where the money goes.

    Not that I'm saying something you don't know...

    Jim (from IA)