Thursday, December 31, 2009

FAS Outlook

USDA's Foreign Agricultural Service (FAS) regularly publishes a trade outlook report. The most recent can be found at the link above.

On page 5:

The fiscal 2010 export forecast for livestock, poultry, and dairy products is up $200 million to $19.9 billion, as strong gains in dairy outweigh moderate declines in poultry exports. The forecast for exports of dairy products is raised by 10 percent with U.S. prices more competitive as global prices have staged a dramatic recovery. Further, the recent decision by the EU to sharply curtail export subsidies has provided a significant boost to global dairy prices. Import demand is expected to expand slightly while competitor supplies—particularly from Oceania—will likely

be constrained by lower-than-expected production.

So now you can see why block cheese has fallen $0.22/lb in the past few days - or maybe not.

Wednesday, December 30, 2009

Fortune Telling from DC

For what its worth:

Slightly Less Milk Production and Firm Global Demand Combine To
Raise 2010’s Milk Price Forecast
Feed costs have fallen substantially in 2009, but are unlikely to fall as much next
year. The benchmark 16-percent protein ration value is projected to average in the
mid-$7.00 per cwt range this year compared with over $9.00 per cwt in 2008. In
2010, the price should continue to fall, but not by nearly as much. Falling soybean
meal prices will constitute a large share of the drop. Corn prices for the 2009/10
crop year are forecast to decline to $3.25 to $3.85 per bushel compared with the
2008/09 crop year average of $4.06 per bushel. Soybean meal prices are forecast to
decline from $331 per ton average in 2009/10 to a forecast $260, with $310 per ton
in 2010/11.
The U.S. dairy herd is forecast to continue to contract in 2010, with most of the
herd reduction coming in early 2010 and attenuating later in the year. The U.S.
dairy herd is expected to average 8.97 million next year and is expected to average
below 9 million cows in each of the four quarters of 2010. The forecast decline in
herd size will represent a 2.5-percent decline year-over-year. This decline follows a
1.3-percent decline in 2009. In contrast, milk production per cow is forecast to rise
to 20,950 pounds, a 1.84-percent year-over-year increase and slightly ahead of the
5-year-trend increase. In light of lower feed prices and improving milk prices, the
short-term response is to produce more milk per cow as rations are improved. This
will occur before producers undertake any herd expansion, which requires
investment in livestock.
Commercial disappearance is forecast to rise by less than half-a-percent next year
on a fat basis and to be virtually unchanged from 2009 on a skims-solids basis.
World markets remain firm, and the export forecast remains unchanged from last
month. Product exports are projected to continue to rise next year, especially for
nonfat dry milk (NDM) and whey products. Exports of NDM will help draw down
stocks next year on a skims-solids basis, but stocks on a fats basis will be drawn
down less. Imports are forecast to decline slightly next year on a fats basis but to
rise slightly on a skims-solids basis.
Product prices across the board will be higher next year. Cheese prices will likely
average $1.290 to $1.300 per pound in 2009 and rise to average $1.615 to $1.695
per pound in 2010. Butter prices are projected to average $1.195 to $1.225 per
pound and average $1.430 to $1.540 per pound next year. After averaging 91.0 to
93.0 cents per pound this year, NDM prices are forecast to climb to average $1.245
to $1.305 per pound in 2010. Whey prices are projected to average 25.5 to 26.5
cents per pound in 2009 and rise to 35.0 to 38.0 cents per pound next year.
The higher price prospects for dairy products both this year and next will boost milk
prices as well. After averaging $11.30 to $11.40 per cwt in 2009, Class III prices
are forecast to rise to average $15.15 to $15.95 per cwt next year. Likewise, Class
IV prices are expected to climb from $10.75 to $10.95 in the current year to average
$14.60 to $15.50 per cwt in 2010. The all milk price is expected to average $12.70
to $12.80 this year and rise to average $16.35 to $17.15 in 2010.

Tuesday, December 29, 2009


Barry Wilson publishes a very good "Dairy Industry Newsletter" (DIN)from England. Subscription rates in the U.S. are a mere $790/year. An on-line edition is available for $1000/year.

In the December 8, 2009 edition DIN states, "Chinese imports of dairy products from world markets have soared this year."

A table shows October 2009 and November 08 - October 09. Whole milk powder increased 340%in the year and increased 260% in October 2009. Skim milk powder(SMP), which is essentially NFDM standardized to a fixed protein level, increased 18% in October 2009.

Meanwhile, USITC database shows U.S. exports to China of SMP, Jan-October 2009 have fallen 67% when compared to the same period in 2008.

Fonterra is, no doubt, the lead supplier. There is talk of a trade deal with the U.S that would give N.Z. (Fonterra)special trade privileges. Seems like that is already in place.

Monday, December 28, 2009

Down Again

(click on image to enlarge)

Most people I speak with say milk is fairly well balanced. Nevertheless, someone for some reason is driving the price of block Cheddar on the CME down.

If you compare the "Commitment of Traders" report above with the one I posted with data from December 15, 2009, you will notice an increase in shorts. Futures are essentially a bet. Longs are betting prices will increase and shorts are betting they will go down.

There will be no shortage of people with opinions on what is happening but, the opinions which will probably be the most worrisome will be the bankers.

As Mark Twain said, "A banker is a fellow who lends you his umbrella when the sun is shining and wants it back the minute it begins to rain."

Sunday, December 27, 2009


(click on image to enlarge)

The above auction listing will probably become more common. I am reminded of Genesis where Cain responds, "Am I my brother's keeper?"

From the standpoint of decency, does the bank have a responsibility to make certain the cows a adequately fed?

When all is said and done, there are many more to share in the blame for this current nation dairy tradgedy.

Saturday, December 26, 2009

Price Signs Not Evident

(click on image to enlarge)

This week block Cheddar fell considerably, as did futures. The Commodity Futures Trading Commission publishes the "Commitment of Traders" (COT) report.

The most recent COT with data collected last week shows more milk committed to "long" positions.

Still my guess is that someone had futures positions which needed to be rescued.

Friday, December 25, 2009

To Your Health

If someone were born in a manger today,sure enough, the authorities would be notified and the child taken from the parents.

No, the blessed event takes place today in a hospital where the costs approach $13,000 in rural America.

The health care crisis in America today is an insurance industry generated problem. We are the only developed nation in the world where health care is not a right.

One of the biggest steps which could be taken to help family farms is affordable health care. In a decent year, it takes all of the income from quite a few cows to pay for insurance.

While milk is priced below the 1982 - 84 base tracked by the Bureau of Labor Statistics, medical care is nearly 400% more. Doctor's fees are 323% higher. Health professionals donated nearly $100 million in the 2008 election cycle - good investment.

Many think of government health care as socialistic. Well, consider the constitution of Japan, in which General Douglas MacArthur played a heavy hand:

Article 25. All people shall have the right to maintain the minimum standards of wholesome and cultured living. (2) In all spheres of life, the State shall use its endeavors for the promotion and extension of social welfare and security, and of public health.

In 1947 Article 25, and MacArthur's concept of what America stood for were much more closely related. In 1947 American dairy farmer's could pay their bills, including medical bills, and all without off-farm income.

Thursday, December 24, 2009

Christmas Eve 1914

Taking a break from dairy for the moment, in celebration of the season. It is the season, or at least should be, the season of hope.

Here is an inspiration for your consideration:

The Christmas truce is a term used to describe several brief unofficial cessations of hostilities that occurred on Christmas Eve or Christmas Day between German and British or French troops in World War I, particularly that between British and German troops stationed along the Western Front during Christmas 1914 and, to a lesser extent, in 1915. In 1915 there was a similar Christmas truce between German and French troops, and during Easter 1916 a truce also existed on the Eastern Front.

Merry Christmas to everyone.

Wednesday, December 23, 2009

Legal Plunder

(click on images to enlarge)

Today, December 23, 2009, two days before Christmas, block Cheddar falls $0.11 on CME trading. Whatever might be said of the traders, they have no shame.

On the last post, I noted, according to the USDA American cheese in storage was up 11% in November 2009 vs. November 2008. Maybe the numbers are merely coincidental. However, if you remember the numbers for 2008 were just guesses by USDA, so the 11% is meaningless. USDA should continue to make note of this fact through the end of the year.

Slightly more American cheese was made in October 2009 and the storage numbers did not go up October/November – more consumption.

Let me clarify though, American cheese denoted in the USDA data is not, repeat not, “processed” American cheese. USDA categorizes as American-type cheeses Cheddar, Colby, granular or stirred-curd – in other words Cheddar type cheeses.

Next, let me say, there appears, according to two data sources, Bureau of Economic Analysis (BEA) and Bureau of Labor Statistics (BLS), to be more consumption of dairy products. As the graphs above show, consumers spent more, total, on dairy in November 2009 versus November 2008. Additionally, the costs per dairy item, as shown by the Consumer Price Index (CPI), were lower. Meaning consumers bought more dairy products.

Those with the power to determine farm milk price are shameless winners. Economics, as practiced for three or so decades, is what is known as a “zero-sum game. “ Wikipedia states: “In game theory and economic theory, zero-sum describes a situation in which a participant's gain or loss is exactly balanced by the losses or gains of the other participant(s). If the total gains of the participants are added up, and the total losses are subtracted, they will sum to zero.”

Wikipedia goes on to say: “Economic exchanges must benefit both parties enough above the zero-sum such that each party can overcome its transaction costs.”

Therefore we can conclude, we are not really dealing with economics but, legal plunder – theft with official blessings.

Tuesday, December 22, 2009

Numbers numbers everywhere and not a thought to think

Cold Storage data was released by USDA today:

American cheese storage was up 11% from November 2008.

If you go to:

The USDA "Dairy Products" report states only 1.2% more American cheese was made in October.

I really wish someone in a position of authority would think.

Monday, December 21, 2009


In an email today:

The Commodity Credit Corporation (CCC) desires to barter CCC-owned Low Heat, Extra-Grade Nonfat Dry Milk (NDM) in 25-kgs bags for 12/32 oz UHT Fluid Milk 1% and 27/8 oz UHT Fluid Milk 1% to various locations. Enclosed are the solicitation, offer form, anticipated delivery locations and UHD3 Commodity Requirements.

This information is also available on the Commodity Operations Dairy Home page -

Seems that USDA has had trouble getting UHT milk this way:

HDR1010500200001119091600KCCO DAIRY PCA UHD3-119



K.C., MO 64141-6205, TELEPHONE 816-926-2610.

Sunday, December 20, 2009

Milk Production Data

(click on image to enlarge)

I guess I am amazed at the milk production figures for November 2009 released by USDA on Friday. If any one had suggested, a year ago, milk production would remain so high for nearly a year of low prices I could not have believed them.

The batteries have long ago died on my crystal ball, so I am left to guess. My guess is that production will drop with a lag even though farm milk prices are rising.

Farmers are just plain running out of steam. In this season of giving, dairy farmers have more than should be asked of anyone.

The holidays will not be easy for most all American dairy farmers but, please love those near to you.

My friends, pray to God for gladness. Be glad as children, as the birds of heaven. And let not the sin of men confound you in your doings. Fear not that it will wear away your work and hinder its being accomplished. Do not say, "Sin is mighty, wickedness is mighty, evil environment is mighty, and we are lonely and helpless, and evil environment is wearing us away and hindering our good work from being done." Fly from that dejection, children!

From: “Brothers Karamazov”

Saturday, December 19, 2009


USDA release at:!ut/p/_s.7_0_A/7_0_1OB?contentidonly=true&contentid=2009/12/0613.xml

Memorandum of Understanding Will Promote Innovative Steps to Turn Dairy Waste into Electricity and Reduce Greenhouse Gas Emissions

COPENHAGEN, Denmark, Dec. 15, 2009 - Agriculture Secretary Tom Vilsack today announced an agreement with U.S. dairy producers to accelerate adoption of innovative manure to energy projects on American dairy farms. The agreement represents a dynamic public/private partnership and is another demonstration of the Obama Administration's commitment to curb the emissions of greenhouse gases.

"This historic agreement, the first of its kind, will help us achieve the ambitious goal of drastically reducing greenhouse gas emissions while benefitting dairy farmers," said Vilsack. "Use of manure to electricity technology is a win for everyone because it provides an untapped source of income for famers, provides a source of renewable electricity, reduces our dependence on foreign fossil fuels, and provides a wealth of additional environmental benefits."

With this Memorandum of Understanding, the Innovation Center for U.S. Dairy - part of the Dairy Management Inc. - the USDA and U.S. dairy producers will work together to reach a 25 percent reduction in greenhouse gas emissions by the year 2020. USDA will do so by undertaking research initiatives, allowing implementation flexibility, and enhancing marketing efforts of anaerobic digesters to dairy producers.

Anaerobic digester technology is a proven method of converting waste products, such as manure, into electricity. The technology utilizes generators that are fueled by methane captured from the animal manure. Currently, only about 2 percent of U.S. dairies that are candidates for a profitable digester are utilizing the technology. Dairy operations with anaerobic digesters routinely generate enough electricity to power 200 homes.

Through the agreement, USDA and the Innovation Center for U.S. Dairy will increase the number of anaerobic digesters supported by USDA programs. Beyond promoting the digesters, the agreement will encourage research, and development of new technologies to help dairies reduce greenhouse gas emissions.

Thomas P. Galleagher, CEO of the Innovation Center for U.S. Dairy and Dairy Management Inc., added, "This memorandum came about because of the commitment of U.S. dairy farmers and the dairy industry to a sustainable future that includes both environmental and economic viability," said Gallagher. "Sustainability goes hand in hand with our heritage of taking care of the land and natural resources while producing nutritious products that consumers want."

seems to me quite a stretch from the legal authorization:

"Promotion means actions such as paid advertising, sales promotion, and publicity to advance the image and sales of, and demand for, dairy products generally."

Friday, December 18, 2009

Global Dairy

Three times this week the price of butter fell on the CME. The latest information from dairy market news shows we are now $0.40 below the low Oceania butter price.

MD DA124 Butter - Oceania

MADISON, WI. December 10, 2009 (REPORT 49)

INFORMATION GATHERED 11/30/2009 - 12/11/2009

BUTTER: Oceania butter markets and prices are firm. Butterfat continues to be
in strong demand. Anhydrous milk fat is absorbing a significant portion of
butterfat at this time. At the second global/Dairy Trading event for anhydrous,
the price averaged $4,349 per MT., 8.6% lower than the previous event. This
downward adjustment was not surprising to many traders and handlers as many
thought the average price for the first trading event was too high.

82% BUTTERFAT: 3,800 - 4,500

Note: a metric ton equalls 2204.6 pounds.

New Zealand Cheddar is $2.13 per pound, which raises the question, why is not the world coming to the U.S. for cheese and butter?

The short answer is we make 80% butterfat butter and the world wants 82%. For Cheddar, the answer I have gotten is that the U.S. a lot of crappy Cheddar loaded with MPCs.

So, the irony here is that we get most of the MPCs from Fonterra, which makes money for Fonterra but, also, insures we will not be able to compete with them on the global market.

Thursday, December 17, 2009

Government Subsidies

(click on image to enlarge)

The payments from the $290 million will soon be going out according to Secretary Vilsack.

In Reagan's first inaugural address (1981), he said, "In this present crisis, government is not the solution to our problem; government is the problem."

The above chart clearly demonstrates in constant 2005 dollars, government subsidies to all kinds of farmers really took off with Reagan. At the same time corporate power was handed a carte blanche to serve their own needs.

DOJ Comment Deadline

If you go to:

and then click on comments, you will see we only have until December 31, 2009 to submit written comments.

More comments = good.

Wednesday, December 16, 2009

FAO Outlook

Dairy products prices rebound sharply

The FAO Dairy Price index of international dairy product prices has been rising rapidly in recent months, and in November reached 209, an increase of 82 percent from its low of 114 in February 2009. The Index rose by a full 32 percent in November alone, sparking speculation about a repeat of the large price spike that took markets by surprise three years earlier. All dairy products are showing signs of strong recovery to levels not seen since August 2008. The largest increase has been displayed by butter, the price of which has doubled since February to USD 3 688/tonne. However, prices for both skim milk and whole milk powder have also increased by over 90 percent to USD 3 375 and USD 3 525/tonne respectively. The causes of this rapid price rise are not fully clear at the writing of this Outlook, particularly in view of the large public stocks for both butter and skim milk powder available in the European Union. However, stock retention combined with reduced milk output in the European Union and the United States, and lower growth than expected in Oceania's milk output may be contributing factors to tight export supplies. The economic recovery underway in large Asian countries and in certain oil exporting countries may also be an important factor in renewed import demand. The sustainability of the rise in prices is uncertain, though contingent on the responses of the European Union and other exporting countries which hold dairy product stocks.

Tuesday, December 15, 2009

Need Floor Price

Tougher banking regulations enacted in response to last year's financial crisis are hitting farmers and ranchers as they apply for operating loans, forcing many to put up more cash right away and give better proof they can pay the loan back.

HR 3935 Floor Price
On October 27, 2009 Congressman Steve LaTourette (R-Oh.)introduced H.R. 3935 which would establish a temporary, one year, minimum floor price under Class II & III milk.
The bill has no cosponsors and was sent to the graveyard of all most all dairy bills, the House Agriculture Committee, headed by Collin Peterson. Peterson has long been a friend of the big dairy players and this is not a bill big dairy wants.

However, the present dairy crisis is essentially a credit crisis. Dairy farmers are now facing massive credit shortfalls and are desperately in need of loans. On the other hand, even if farm milk price rises, banks will be reluctant to loan to dairy farms until they see evidence of price stability. This bill would build banker’s confidence.

The rationale for the price levels is based upon the average production costs for milk in the 23 lead dairy states and the historic relationship between Class II and III. Class I would automatically be affected. Class IV, which is the main class involved in world trade, would not.

Congressman LaTourette is not well known in the DC dairy circle, however, he has been a part of the financial committee and knows the financial and credit issues facing dairy farmers. He is to be commended for the effort.

Monday, December 14, 2009

Gaming the System

(click on image to enlarge)

If you go to:

you will find the link for the above image.

Notice the Class III utilization for November in FMMO 126. Within FMMO 126 are two of the largest cheese plants in the country - Southwest Cheese and Dalhart Hilmar. Together, the plants have a capacity of nearly 8 million pounds of milk a day - that's right a day. How can the 23 million pounds for class III be explained?

Then notice the class I % - over 72%. In November of 2006 the amount was 37%. There is more milk produced in FMMO 126 with no appreciable gain in population when compared with 2006.

With a big class I utilization you would think there would be a good mailbox price. Not so. New Mexico producers , for September 2009, received $2.51 under blend price.

FMMO 126 is just one of the more outstanding examples. Probably in most orders, most of the time, there are some shenanigans going on.

Sunday, December 13, 2009

Free Market

(click on images to enlarge)

Despite endless talk about supply and demand, Washington, DC turned over 100% of milk pricing power to the buyers of milk with the elimination of parity in the early 80s.

Whether prices go up or down, since that time, some number is dredged up to justify the change.

As both the table and chart above demonstrate, the common belief is not received wisdom, it is a work of fiction.

Accuracy in reported numbers is desirable, but, the real problem lies with the gang at the CME and USDA's willing to give credence by way of the NASS survey and the dairy farm milk pricing formulas.

Saturday, December 12, 2009

Trade Talks

Trade talks - that is tells a story.

Trade data reveals what appears to be a dirty secret. While there is all kinds of talk about reduced imports, the reduction per unit is not that great, especially when compared with U.S. dairy farm milk price.

The Harmonized Tariff Schedule (HTS) which defines all imports has several gradations. The most precise definition is ten digits HTS 04, the two digit number for dairy can be searched at the U.S. International Trade Commission database for several aspects. One interesting aspect identifies how much each unit costs.
Although there is talk about world dairy price collapse, the HTS 04 imports only dropped 8.80%, year-to-date through October 2009 compared with YTD 2008.

To put that in perspective, the “All Milk” price at U.S. dairy farms dropped 35%.

In essence, this is about imbalance of power.

Friday, December 11, 2009


USDA publishes the "World Agricultural Supply and Demand Estimates" (WASDE) regularly. The one released yesterday, December 10, 2009 states for dairy:

The milk production forecasts are raised for 2009 and 2010. Dairy cow liquidation has been slower than expected, and improving milk prices in 2010 are expected to diminish the rate of decline in cow numbers. Dairy exports for 2009 are raised slightly, reflecting third-quarter strength in cheese and nonfat dry milk demand. Import forecasts are lowered for 2009. Fatbasis ending stocks are forecast higher for 2010. Although milk production is forecast higher than last month, improving demand is expected to support prices for most products. Prices for cheese, nonfat dry milk, and whey are forecast higher, but butter prices are forecast slightly lower. The Class III price forecast for 2009 is raised from last month and both Class III and Class IV prices are forecast higher for 2010. The all milk price is forecast at $12.70 to $12.80 per cwt for 2009 and $16.35 to $17.15 for 2010.

A year ago WASDE said:

The 2008 all milk price forecast is unchanged this month, averaging $18.30 to $18.40 per cwt, but the 2009 forecast is lowered to $14.95 to $15.75 per cwt.

Thursday, December 10, 2009

Trade Data

(click on image to enlarge)

Trade data was released today and for the most part there is little to get excited about. The U.S. actually exported 19% more NFDM/SMP than in October 2008. October exports were the highest of the year for all dairy products.

USITC reports a year-to-date positive trade balance in dairy of $234 million (this does not include casein). Although 2008 was much higher, most years there in not a positive trade balance.

All kinds of butter (HTS 0405) imports were slightly higher this October. The table above shows the joys of globalism, in the butter category for 2009.

Wednesday, December 9, 2009

Credit Connections

This may not seem to relate directly to dairy but, if you watch the segment, what Whitney is saying is that everything is connected.

Despite being able to borrow at near-zero percent interest, banks are not taking that money and putting it back into the marketplace. The Federal Reserve said Monday that consumer lending dropped 1.7 percent on an annualized basis in October, the ninth straight monthly decline.

Certainly, most dairy farmers are not getting loans and there is talk of increased foreclosures next month.

Banks are unlikely to handout loans until they are confident prices will stabilize soon and for the long term. Essentially, the dairy farm credit problem will remain with the present pricing system in place. There are too many who have a privileged place on the status quo gravy train to allow change without effort.

Tuesday, December 8, 2009

Follow Milk Money

(click on image to enlarge)

The Bureau of Labor Statistics (BLS) compiles many data bases. The Consumer Price Index (CPI) is fairly well known. The BLS also compiles Producer Price Indexes (PPI) which cover wholesale prices.

Essentially, these indexes measure change from a base point, in this case 1982-84 = 100. In that base period all items equaled 100 or, if you like 100%.

October is the latest month available. The dairy farm PPI for manufactured milk in October 2009 is 106.7. For processors, the PPI for cheese in October 2009 is 148.1. And for retail, the CPI is 200.63.

Above is a graph showing the change, beginning in January 2008, between farm and processor. As can be readily seen, the spread has increased dramatically.
This is probably no secret to most processors or to those in government who choose to look at the current dairy situation. Of course, many in government correctly can claim ignorance.

In ordinary times, the money would be seen as in the market. However, there is still a massive financial crisis and the government has allowed the powerful to take their perceived needs from virtually unrepresented dairy farmers.

Monday, December 7, 2009

Old Story Update

I know I posted this link before, but, today I wanted to compare the present milk price crisis with the 1930s.

Drawn up by LaGuardia, the pact called for the dealers to pay $2.15 for all milk purchased between August 25 and October 31, 1939; this forty-five percent price increase became official the next day when it was ratified at a jubilant DFU convention at union headquarters in Utica, New York.

When these good people went on strike, their farm milk price was over $21/cwt in today's dollars. The settlement amounted to $33.44/cwt, in 2009 dollars.

Little by little.

Sunday, December 6, 2009

Replacement Prices

Hundreds of dairy heifers are being imported from Europe by milk producers hunting for affordable replacements. But the flood of cattle shows no sign of undermining consistently strong cattle values, say traders.

The combination of expanding herds seeking extra cows, the constant stream of animals needed to replace TB losses, and the legacy of beef bulls in dairy herds mean farmers are seeking European dairy heifers, often significantly cheaper than at UK sales.

In some cases, heifers shipped from France, Germany and Holland might cost producers €1300 a head, compared with £1500-£1800 needed to secure a first rate, commercial freshly calved heifer at the ringside.

A pound Sterling is worth $1.65. Those are pretty pricey dairy animals.

While there is talk of the dairy demand falling globally, the U.S. is much worse off than the rest of the world.

Saturday, December 5, 2009

Efficient Market Theory

In economics there is what is known as the "efficient market theory" which results in markets excelling in efficient allocation of resources. The efficient allocation of resources is what sets a a true "market economy" above a planned economy, the most famous of which was the former Soviet Union.

Friday I went to the nearest city, Oneonta, NY (pop 13,292). There are four "supermarkets." I bought the store brand butter at each location.

If you go to: you can find the plant where the butter is made. The plant number is located on the stick. The first two numbers are the state. If you scroll to the bottom you can find the state and then go to the state to fine the plant.

The results:

Aldi - Wisconsin
Hannaford - Minnesota
Price Chopper - California
Wal*Mart - Massachusetts

New York is the third largest dairy state and not one of the store brand butters was from NY. Price Chopper's headquarters are in upstate NY. Some efficient allocation of resources!

There are very few makers of butter left. Why anyone would buy a branded butter is beyond me. Store brand has a faster turnover and therefore is of better quality.

I just can't bring myself to buy butter, or much of anything else, in Wal*Mart.

Friday, December 4, 2009

One Million Dollars

Seems to me that Hanman was going to pay this back? Good article.

DFA reveals how $1M found way to ex-chairman


Messenger Staff Writer

ST. ALBANS — Additional details have become available regarding a secretive transfer of a million dollars from National Dairy Holdings to a former Dairy Farmers of America chairman.

The transfer has been an issue in two anti-trust suits filed against DFA.

The Messenger has learned that the wife of former National Dairy Holdings (NDH) chairman Alan Meyer signed a $1 million check given to former DFA board chairman Herman Brubaker.

The transfer of funds, minus information about how it was accomplished, was revealed on May 8, 2008, when DFA CEO Rick Smith sent a letter to DFA members informing them of the transfer. In the letter, Smith said the funds had been returned with interest.

The $1 million transfer to Brubaker has been cited in the anti-trust lawsuits as an example of how insiders within DFA and its associated companies have enriched themselves at the expense of farmers.

Condemning the transfer, Brad Keating, DFA’s chief operations officer for the Northeast, said, “It’s farmer literally taking from farmer.”

In interviews with the press conducted at the time, Smith said the transaction was discovered when DFA began to consolidate NDH’s books with its own.

“It was done off of DFA’s books which is how it went undiscovered,” Monica Massey, vice president of corporate communications for DFA, said in response to a Messenger inquiry.

The transfer took place in late December 2001, according to DFA.

When asked, Massey said the transfer had been initiated by Meyer and was made with NDH funds, not Meyer’s personal funds. The million dollars went from NDH to Meyer to Brubaker.

Smith acknowledged in 2008 that former DFA CEO Gary Hanman knew about the transfer.

Asked why Meyer provided Brubaker with a million dollars, both Massey and Keating declined to answer. “It would be speculation even to try to figure out why,” Keating said.

However, they denied the transfer was connected to the founding of National Dairy Holdings.

NDH was created in 2001 when Suiza, the largest milk bottler in the U.S., merged with Dean Foods, the second largest. Before approving the purchase, the Department of Justice (DOJ) required the new company to divest itself of 11 bottling plants.

DFA together with two former executives from Suiza, and Alan Meyer created National Dairy Holdings (NDH) and purchased the 11 plants. Mid Am Capital, LLC., a subsidiary of DFA, supplied NDH with $400 million in start-up capital.

According to documents filed in anti-trust against DFA in both the Southeast and the Northeast, Meyer contributed $5 million to the formation of NDH. He then became its CEO.

Meyer has been a key figure in the anti-trust allegations. According to the initial complaint filed in the Northeast case, the “DOJ has accused Meyer of operating as a functionary of DFA who colludes with DFA to eliminate competition while claiming to operate NDH as an independent competitor. The DOJ has specifically alleged that DFA and Meyer have ‘a long history of friendly and mutually profitable financial dealings.’”

Prior to taking the helm at NDH, Meyer had founded Southern Foods Group, LP, along with DFA. That company was folded into Suiza Dairy Group, a joint Suiza/DFA company in 2000. It was Suiza Dairy Group that purchased the Stop and Shop plant that was once the St. Albans Cooperative Creamery’s prime market for fluid milk.

Massey said Meyer was no longer associated with DFA as of January 2008.

Thursday, December 3, 2009


From Dairy market News:

MD DA751 Casein - National

MADISON, WI. December 3, 2009 (REPORT 48)


The casein market remains firm. Future casein supply remains a concern for
buyers. European sourced product is being shipped from inventory. The concern
with European product is not so much on contracted sales but that spot
availability is limited. In Oceania, milk and casein production have been lower
than expected and this could affect supplies produced and available for export.
Casein production is still underway in Oceania despite being past the annual
peak in milk receipts.


RENNET: 2.9000 - 3.6500
ACID: 2.9000 - 3.6000

From FSA:





BOX 419205, K.C., MO 64141-6205, TELEPHONE 816-926-3816.



NONFAT DRY MILK/25 KG BAG 1,000,086 $0.7100

***************************** SUMMARY *************************************

25 KG BAG 1,000,086 $0.7100 $710,061.06

TOTALS 1,000,086 $710,061.06

Wednesday, December 2, 2009

Organic From China

Here's a twist.


WASHINGTON, DC: In an investigation and legal case that dragged on for almost four years, one of the largest organic cattle producers in the United States, Promiseland Livestock, LLC, was suspended from organic commerce, along with its owner and key employees, for four years. The penalty was part of an order issued by administrative law judge Peter Davenport in Washington, DC on November 25.

Tuesday, December 1, 2009

Fonterra Auction

Fonterra held another internet auction for two dairy products. Whole milk powder (WMP) gained an average of 3.6% and sold for an average of $1.62 per pound. However, the largest percentage gain for WMP came in the closest month delivery, February 2010, which rose 5.1%.

Anhydrous Milkfat (AMF) fell 8.6% - any guess on that is as good as the next.

Milk production in Oceania is not spectacular.

Not Food
SCIENTISTS have grown meat in the laboratory for the first time. Experts in Holland used cells from a live pig to replicate growth in a petri dish.

The advent of so-called “in-vitro” or cultured meat could reduce the billions of tons of greenhouse gases emitted each year by farm animals — if people are willing to eat it.