Milk Prices

(click on image to enlarge)

USDA’s Ag Price report came out today. The “all milk” price is listed as $15/cwt – the highest this year.

But, of course, the $15/cwt is an average. The devil is, as usual, in the details (see table, sorted low to high, above). California, the nation’s number one dairy state is on the bottom. However, number two, Wisconsin, which increased production in October, had a considerably higher price than number three New York. NY is practically in the bottom quarter.

Try to find a politician in NY who claims not to care about dairy farmers – all of NY’s elected leaders are in top caring mode. They would like to do something but, their hands are tied. The data pretty much tells the story.

And, by the way, USDA lists parity price for November, 2009 as $41.70/cwt.

Hay Prices Good/Bad News

(click on image to enlarge)

If you buy hay,the trend in hay prices is good news. However, if, as many dairy farmers do, you sell hay, hay prices are just more salt in the wound.

Canada

To date Canada has not had a single bank failure this year. Why? They did not chop away at financial regulation as we have in the U.S.

The dairy farm pricing system, in place for nearly 40 years, has sustained farm families and perhaps more importantly farm communities.

One group in Canada promotes elimination of the Canadian dairy pricing system. Seems this year as with all years Canada is not competitive on the world market. I would think their timing is off a bit this year but, here is a link: http://www.conferenceboard.ca/press/newsrelease
/10-44.aspx

And here is a link on the subject from Dairy Farmers of Canada: http://www.newswire.ca/en/releases/archive/November2009/23/c4095.html

As one Canadian Amish farmer recently said, "The only time dairy is down in Canada is when a cow has milk fever."

Milk Powder Prices

(click on image to enlarge)

Today's USDA "Dairy Product Price" report showed NFDM went up 6.2 cents per pound to $1.17 a pound. Big deal. Both Oceania and EU lists the high side of Skim Milk Powder which is essentially the same as NFDM standardized to 34%, as $ 1.63 a pound.

Thanksgiving

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! Dostoevsky

Times are very hard but,this is the time to think of family, friends and community.

I am very thankful for all those who read and and contribute to this blog.

Revisions

(click on image to enlarge)

http://usda.mannlib.cornell.edu/usda/current/ColdStor/ColdStor-11-20-2009.pdf


The latest "Cold Storage" numbers came out Friday. A note said: "Due to updated facility information, the January 2009 – September 2009 cheese data has been revised.
Please note the revision tables on pages 13 and 14. Updated data for 2008 are not available."

Well, as you can see from the above graph, the revisions are rather large. More importantly, the higher numbers have been used in "Commercial Disappearance" data, skewing that to disappearances are off - way off.

Once again, the erroneous numbers are provided by some of the same people who set farm milk price.

Cheddar Price

Cheddar prices have been rising on the CME but, nothing like world prices, From Dairy Market News:

MD_DA128
DA
MD DA128 Cheddar Cheese - Oceania

MADISON, WI. November 25, 2009 (REPORT 47)

OCEANIA
INFORMATION GATHERED 11/16/2009 - 11/27/2009
U.S. DOLLARS PER METRIC TON, FOB PORT

CHEDDAR CHEESE: Oceania cheese markets are firm with prices higher and, in
instances, sharply higher. Cheese manufacturers are voicing concern with milk
availability during the second half of the current milk production season. In
most areas, milk output is past peak levels which often did not attain projected
or desired levels. Cheese producers are hopeful that milk volumes will be able
to be maintained at high levels for a longer period of time on the downside of
the season to help offset what was not realized during the first half.

39% MAXIMUM MOISTURE: 4,000 - 4,700

A metric ton is 2204.6 lbs so the high side is $2.13 per pound

More From Experts

(click on image to enlarge)

Here is a link for those brutes for punishment:

http://www.extension.agecon.vt.edu/dairyriskmgt.html


Risk management is promoted to get a handle on prices (farm milk) rising or falling. In a real market price moves because of information. How can this be, in a situation where there are so few players.

All of the papers in the above link promote the idea (as if there can be no other thought) of supply/demand. Fine but, where farm milk is priced, on the CME, one day a powerful player behaves as if farm milk prices are too high. Then for reason which are not obvious, the same player behaves as if prices are too low.

That is the cash market and those traders largely determine Class III futures. http://www.cftc.gov/dea/futures/deacmelf.htm So about half of all trades are held by 8 or fewer players.

Some market? This activity is closer to economic activity in the former Soviet Union than to any concept of a real market.

Taking Credit

http://www.cwt.coop/sites/default/files/pdf/ScottBrownCWTNovember2009.pdf

Cooperative Working together (CWT) has a new "study" by Scott Brown of University of Missouri which demonstrates beyond any doubt the CWT program put $1.54/ cwt in dairy farm milk checks.

Dr. Brown avoids mentioning the fact that world dairy prices are up - way up. For instance, Oceania butter is presently at $1.81/lb and that is for 82% butterfat butter.

World dairy prices are higher than U.S. dairy prices - and that with no CWT deduction.

Reason To Do Nothing

There is nothing riskier for a political leader than doing something. Someone is sure to jump all over the politician who actually takes a stand.

Following the expression "Any port in a storm." finds politicians looking for excuses.

The most convenient and time-proven excuse is the fact that farmers won't get together and speak with a single voice.

Imagine no speed limits unless everyone agrees upon what the exact amount should be. There is no way dairy farmers throughout the country will agree on issues.

The very least leaders could do is to initiate a discussion. For instance, what are the implications of the store-brand butter in my town coming from Tulare, California?

One obvious point is there is not enough extra local cream to make butter.

California Money Pit

(Click on image to enlarge)

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

(click on images to enlarge)

"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

(click on Image to enlarge)

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.

September Milk Production

http://usda.mannlib.cornell.edu/usda/current/MilkProd/MilkProd-10-20-2009.pdf

No doubt, Septembers milk production numbers will be revised. However, in the meantime, it would appear states with their own feed supply are doing better.

Cheap Milk

(click to enlarge)

http://en.wikipedia.org/wiki/Critical_thinking

Research shows that most universities are ineffective in fostering critical thinking. For example, in a three year study of 68 public and private colleges in California, though the overwhelming majority (89%) claimed critical thinking to be a primary objective of their instruction, only a small minority (19%) could give a clear explanation of what critical thinking is. Furthermore, though the overwhelming majority (78%) claimed that their students lacked appropriate intellectual standards (to use in assessing their thinking), and 73% considered that students learning to assess their own work was of primary importance, only a very small minority (8%) could enumerate any intellectual criteria or standards they required of students or could give an intelligible explanation of what those criteria and standards were.

I read on a blog, recently, farm milk price rose so high in 2007 - 08 that retail price of cheese rose and all kinds of bad things happened.

Who cares! Where is the logic of producing milk at a loss so consumers will consume more cheese?

The fact is, the spread between farm milk price (times cheese yield) has never ever, ever been higher.

House Leadership

Below is listed the bills in the House of Representatives for the year of the worst dairy crisis ever:

H.R.778 : To authorize the interstate traffic of unpasteurized milk and milk products that are packaged for direct human consumption.
Sponsor: Rep Paul, Ron [TX-14] (introduced 1/28/2009) Cosponsors (None)
Committees: House Energy and Commerce
Latest Major Action: 1/28/2009 Referred to House committee. Status: Referred to the House Committee on Energy and Commerce.

H.R.3166 : To amend the Food, Conservation, and Energy Act of 2008 to index for inflation the payment rate for payments under the Milk Income Loss Contract Program.
Sponsor: Rep Welch, Peter [VT] (introduced 7/9/2009) Cosponsors (12)
Committees: House Agriculture
Latest Major Action: 7/9/2009 Referred to House committee. Status: Referred to the House Committee on Agriculture.

H.R.3322 : To respond to the current over-supply of milk by temporarily increasing the payment rate for payments under the milk income loss contract program and by directing the Secretary of Agriculture to facilitate the efforts of producer associations and other third parties to remove dairy cows from production, and for other purposes.
Sponsor: Rep Murphy, Scott [NY-20] (introduced 7/23/2009) Cosponsors (4)
Committees: House Agriculture
Latest Major Action: 7/23/2009 Referred to House committee. Status: Referred to the House Committee on Agriculture.

H.R.3674 : To impose tariff-rate quotas on certain casein and milk protein concentrates.
Sponsor: Rep Welch, Peter [VT] (introduced 9/29/2009) Cosponsors (18)
Committees: House Ways and Means
Latest Major Action: 9/29/2009 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

H.R.3935 : To establish a temporary minimum price for Class II and Class III milk under Federal milk marketing orders, and for other purposes.
Sponsor: Rep LaTourette, Steven C. [OH-14] (introduced 10/27/2009) Cosponsors (None)
Committees: House Agriculture
Latest Major Action: 10/27/2009 Referred to House committee. Status: Referred to the House Committee on Agriculture.

Three out of the five bills were sent to the House Ag Committee headed by Colin Peterson of Minnesota.

There are no additional sponsors for H.R.3935. H.R.3935 is a very straight forward bill. Sherry Bunting (no kin)writing in the recent "Farmshine" described the bill as a "stop the bleeding bill." "To place some sort of moratorium on the severe losses endured by dairy farmers and provide some breathing room to consider a more permanent solutions. In a sense one could say that such a bill if passed would be like forcing the Secretary of Agriculture to exercise his section 608C18 power under the federal milk market agreement act of 1937, which holds that the secretary has the authority to set the minimum price floor that considers cost of feed fuel and other commodity inputs."

Go Global

My disappointment in the WASDE report was in the fact the prices were so low. Lets say we could be getting global price here in the U.S. which are as follows:

Butter $1.6500
Nonfat Dry Milk $1.5000
Cheese $1.6500
Dry Whey $0.5000

The prices used to set farm milk price for most of the country would be:

Class II Butterfat Price $1.7975
Class III Milk Price $16.36
Class III Skim Milk Price $10.46
Class IV Milk Price $17.72
Class IV Skim Milk Price $11.87
Class III/IV Butterfat Price $1.7905
Nonfat Solids Price $1.3189
Protein Price $2.7859
Other Solids Price $0.3099

That would yield a blend price in the area of $19. World prices have yet to peak.

WASDE

http://www.usda.gov/oce/commodity/wasde/latest.pdf

Well, the latest World Agricultural Supply and Demand Estimate (WASDE) has been out for several days. In case there are some not sufficiently depressed this will make good reading. Be sure to look at the tables covering milk (33 & 34).

The milk production forecasts are raised for 2009 and 2010 as milk per cow is forecast higher and the rate of decline in cow inventories is slowed. Improved milk prices are expected to more than outweigh higher feed costs and slow the pace of liquidation. Improving global demand and concerns about world supplies of dairy products have pushed international dairy prices higher and are expected to result in higher U.S. dairy exports during the remainder of this year and into 2010. Import forecasts are lowered for 2009. Fat-basis ending stocks are forecast higher for 2009, but 2010 stocks are forecast lower on both a fat and skim-solids basis as supplies tighten. Improving domestic and export demand and lower year-to-year milk production is expected to lead to higher prices for U.S. cheese, butter, nonfat dry milk, and whey. Class III and IV price forecasts for 2009 and 2010 are raised from last month. The all milk price is forecast at $12.60 to $12.70 per cwt for 2009 and $16.05 to $16.95 for 2010.

The tables defy comprehension.

Driving to New Mexico

http://host.madison.com/wsj/news/local/crime_and_courts/article_49710052-cf16-11de-a66f-001cc4c002e0.html

The real story is in where the milk was going:

Wisconsin State Journal staff | Posted: Wednesday, November 11, 2009 5:00 pm

The driver of a milk-filled tanker headed from Wisconsin to New Mexico was arrested for drunken driving on the Beltline during rush hour Tuesday afternoon, Madison police said.

Harry C. Mapps, 55, of Dimmitt, Texas, was stopped near Fish Hatchery Road just before 5:15 p.m. after an officer observed him weaving, using "all three lanes," said police spokesman Joel DeSpain.

Mapps had a partially consumed bottle of vodka, a six-pack of beer that was missing four cans and a four-pack of malt liquor in his cab, DeSpain said.

Other rush-hour drivers stayed a distance back from the truck, he said.

Motorists had previously reported a milk truck that was driving erratically between Sun Prairie and Madison, DeSpain said.

Mapps told police he was working for a Missouri company.

ASB Bank Report

Today's ASB Bank (New Zealand) report is interesting:

The big news this week is the increase in Fonterra’s 2010
season forecasted dairy payout to $6.05 per kilogram of milk
solids. This payout is made up by a $5.70 Milk Price and a
$0.35 Value added component. The increase beat ASB
expectations of payout to increase to around the $5.50 mark.
The increase reflects the strong commodity prices that have
been coming through over the past 5 months. Since July, all
Oceania dairy commodities tracked by NZX Agrifax have
increased by at least 48%, with butter up close to 110%.
On the production side, NZX Agrifax reported last month that
NZ production is running slightly above the previous year
(+1%). However, production from other regions of the world is
currently down. Australian production is down circa 1.6% for
the season to date. Meanwhile US (-1%) and EU (-0.4%)
production is also down. The fact that global production is
running below previous levels may provide some indication of
the tightness in commodity markets at present. There is
evidence (backed up by longer dated contracts on gDt) that
dairy buyers are prepared to pay more for product to ensure
supply down the track. This is also compounded at this time
of year when EU and US production is in their seasonal 'lulls'.

NZ Milk Price and Dollar Rising

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10608259

The New Zealand dollar rose after dairy co-operative Fonterra increased its forecast payout to farmers to $6.05 per kilogram of milksolids, from the $5.10 announced in September.

The NZ dollar rose as high as US73.63c, its highest since October 29, on the news and finished its local session at US73.58c from US72.25c at 5pm on Friday.

This may be good news for U.S. dairy farmers because all imports from our largest supplier will more.

More Kraft

http://www.businessweek.com/ap/financialnews/D9BS3Q8O0.htm



Kraft has been attempting to buy Cadury.

“Felicity Loudon, the granddaughter of former Cadbury Brothers managing director Egbert Cadbury, has also been an outspoken critic of any deal, saying she was "particularly saddened by the possibility of one of the last remaining British icons disappearing into an American plastic cheese company."

Kraft

http://phx.corporate-ir.net/phoenix.zhtml?c=129070&p=irol-newsArticle&ID=1350409

Apparently all is well in the processing section of dairy.

Organic net revenues declined 10.3 percent as a 6.8 percentage point gain in volume/mix was more than offset by a 17.1 percentage point reduction from lower price levels. This price decline was in response to significantly lower dairy costs, consistent with the company's adaptive pricing model.

Somehow "adaptive pricing model" does not seem accidental.

Tomorrow

http://www.bls.gov/news.release/empsit.t12.htm

The Bureau of Labor Statistics Table U6 is:

Total unemployed, plus all marginally attached economic reasons, as a percent of the civilian labor force plus all marginally attached workers

While the headlines proclaim unemployment at 10%, the broadest measure shows the unemployment is about 17.5% - the highest since data has been collected.

Few can sell the cows and get a job any time soon. But, tomorrow is another day and the cows will have have to be milked.

Maybe I have missed it, but, there seems to be no broad discussion of thoughts on how farm milk should be priced.

Is milk simply a commodity and can all of America's interest in milk production be reduced to unchecked greed?

Vreba-Hoff

http://www.agd.nl/1088216/Nieuws/Varkenshouderij/Vreba-Hoff-boeren-in-de-knel.htm

In the above link is a story from the Netherlands which claims numerous Dutch immigrants who enticed to come to the U.S. with money in their hands have returned empty handed.

Land O Lakes

http://www.sec.gov/Archives/edgar/data/1032562/000095012309058264/c54500exv99w1.htm

Land O Lakes third quarter SEC filing is at the above link. Essentially, the picture for dairy is:

In Dairy Foods, the company reported third-quarter sales of $776 million and pretax earnings of $8.9 million, versus sales of $985 million and a $25.4 million pretax loss for the third quarter of 2008. Year-to-date sales in Dairy Foods were $2.2 billion, versus $3.1 billion for the first three quarters of 2008. The company reported $9.0 million in pretax earnings in Dairy Foods through September, versus $14.2 million in pretax earnings for the first three quarters of 2008.
Volumes in Dairy Foods were mixed, but generally reflected a consumer shift toward lower-priced private label products. Overall Value Added volume was down 1 percent versus one year ago. Volume in the company’s industry-leading branded butter was down 1 percent, while the company’s private label butter volume was up 1 percent. Retail cheese volume (Deli and Dairy Case) was down 4 percent versus the first three quarters of 2008, while Dairy Solutions (Foodservice and Ingredient Solutions) was up 7 percent. In the Industrial segment, Cheese volumes were up 6 percent over the same period last year, Whey volume was down 1 percent and volume in Butter By-Products was flat.
Company officials, while noting that Dairy Foods’ performance over the first three quarters was negatively affected by commodity market volatility and the impact of higher prices and economic uncertainty on consumer purchasing decisions, indicated expectations for a strong fourth quarter. Fourth-quarter results, they said, should be bolstered by traditional holiday volume increases and the effective hedging of inventory positions earlier in the year, which should generate fourth-quarter gains.

Note, there is nothing in the report to suggest people are consuming less dairy.

Tucked in, is an interesting tidbit, “Unrealized hedging gain” of $39,742,000. Talk about risk management – where is the money going to come from if not dairy farmers?

Corruption Inside the USDA

http://www.lulu.com/product/download/corruption-inside-the-usda/5636387

The above link takes you to a book which can be downloaded. The book is described as:

An insider's report to the American public on : intentional routing of contaminated milk into America's food supply; funding a USDA office via the contaminated milk processor as it supplies infant formula production; associated extraction of dairy farmer money; involved U.S. Department of Agriculture appointees; and evidence held inside the U.S. Department of Justice.

One of the central ideas in the book relates to the concept of whether or not the high-count milk was Grade A. Actually, it is the farm and not the milk which is or is not Grade A.

Otherwise, the book is an interesting read on gaming the system. There is an unwritten story between the lines about the concentration within the industry and the geographical space which milk must travel, unrefrigerated.

Signs of the times

(click on image to enlarge)

Frustrations are to be seen everywhere. The above photo was sent to me and confirms that one picture is worth a thousand words.

Every picture has a value. After several people sent me an email of my picture of Nestle's Sweetened Condensed Milk which was lifted with just a couple of clicks from this blog, I decided to put my name on all further pictures. I certainly don't mind people sending information or pictures they find on this blog but, there is an investment of time, money and knowledge which goes into the blog and each picture. So, please, if you are going to use something, give credit where credit is due.

Yogurt

(click on image to enlarge)

USDA, today, released their "Dairy Products" report. One item I have been following all year is the production of yogurt. No one ages yogurt. No one makes yogurt without an order. No one would be ordering more yogurt if sales were down.

One can only logically conclude, rumors of the death of dairy sales are, and have been, premature.

California

(click on images to enlarge)

California's Department of Food and agriculture lists: Emergency Hearing – All Classes – November 9, 2009.

Supposedly, the purpose is to raise the price to California dairy farmers. But, wait a minute. CDI, a Capper-Volstead co-op wants more. CDI wants an increase in make allowances.

Can a similar proposal for the federal milk orders be far behind. One can imagine a certain Northeast co-op pleading for a level playing field with California, which can only be realized by increasing the make allowance.

Crops and Weather

http://usda.mannlib.cornell.edu/usda/current/WWNatSumm/WWNatSumm-11-03-2009.pdf

Corn: Acreage at or beyond the mature stage advanced to 94 percent, 4 points behind last year and 5 points behind the 5-year average. The most significant delay was evident in North Dakota where crop maturity was 34 points, or over 1 month behind normal. Producers had harvested 25 percent of the Nation’s crop by week’s end, 28 points behind last year and 46 points, or 1 month, behind the average. Harvest delays of 3 weeks or more were evident in the 6 largest corn-producing States, with progress in Illinois over 5 weeks behind normal. Overall, 67 percent of the corn crop was reported in good to excellent condition, down 2 points from ratings last week but 3 points better than last year. Conditions in unharvested corn fields throughout the Great Plains, Corn Belt, and Great Lakes continued to deteriorate as reports of unfavorably
high moisture levels and mold were reported.

World Markets?

(click on image to enlarge)

Today's CME block Cheddar price is just a hair over $1.50 per pound. For comparison, the Oceania price, as reported by USDA's Dairy Market News last week was an average of $1.66 per pound.

Crops

http://usda.mannlib.cornell.edu/usda/current/CropProg/CropProg-11-02-2009.pdf

What had been predicted as a bumper crop for corn is now looking for life preservers. Today's USDA "Crop Progress" report shows harvest as way behind the average of 2004 - 08.

Only 25% of the corn is harvested in the lead corn states compared with a 71% average. For soy,the report shows 51% harvested versus an average of 87%.

Bankers must be contemplating doubling their medications.

Dean Foods 3rd Qtr

http://www.prnewswire.com/news-releases/dean-foods-company-reports-strong-third-quarter-earnings-68520932.html

Net income for the third quarter totaled $49.7 million, compared with $37.8 million in the prior year's third quarter, an increase of 32%. Solid operating income growth at Fresh Dairy Direct and WhiteWave-Morningstar and lower interest expense offset increases in Corporate and Other expenses to drive 43% growth in adjusted net income for the third quarter to $62.2 million, up from $43.5 million in the third quarter of 2008. Due to lower average debt balances, interest expense in the quarter totaled $59.5 million, compared to $74.7 million in the third quarter of 2008.

Retail

(click on images to enlarge)

USDA publishes retail milk prices for selected cities. While not claiming to be precise, the numbers do give a snapshot of what is happening. Above are the numbers for 2008 and the first ten months of 2009.

Note the retail price for Chicago, IL, right next to lots of milk in Wisconsin, compared to the retail price in Miami, Fl.

The above graph shows data for Boston, Ma converted for ease of comparison to hundredweight. Obviously, the retail price is more than double the farm price.

The so-called invisible hand of the “market” seems to have a stranglehold on the dairy farmer’s neck.