Tuesday, January 19, 2010

Mozzarella Money

(click on image to enlarge)

Dairy farm milk is priced by a handful of traders at the CME. If you are in a federal milk market order, many will counter with some meaningless gobbledegook about NASS.

In any event, the cheese traded on the CME is Cheddar. However, all class III, cheese milk, is priced from the CME regardless of yields and price.

More Mozzarella is made than Cheddar. If you take average farm milk, without any fortification, the yield for Cheddar will be 9.6 pounds per hundredweight. The yield for mozzarella will be 13 pounds per hundredweight.

Cheddar needs some minimum aging. Mozzarella requires no aging.

Anyone might logically think the wholesale price of Cheddar would be higher than the wholesale price of mozzarella. As the above charts indicate, mozzarella is a real moneymaker.

Further, the wholesale price of mozzarella dropped 12%, 2008 versus 2009. Farm milk dropped 35%.


  1. It never ceases to amaze me that these FACTS are out there for everyone to see, but we need a Dairy Advisory Committee to tell us what's wrong with mulk pricing? It would have been a lot easier for farmers to take a 12% slam than 35%.

  2. So, what did the processors do with the extra 23%?

    Why do we, the farmer, (the owners of the co-ops) not have access to a detailed financial report? I am not talking about a generic financial report either.

  3. It just amazes me how we and our representatives allow this to happen...it's just not right!

    Thank you so much for sharing!

  4. DFA requires the farmer to pay @ $10,000.00 in equity for @ every one million pounds of milk shipped. This is money, I assume, they use to operate. In addition to paying this fee, (which by the way, will not be returned to the farmer for 10 years after they retire or quit farming), the farmer also has to foot the bill for hauling, marketing, advertising and promotion, fuel surcharges and CWT investment (which might be going from .10/CWT to .25/CWT).

    These charges are MANDATORY and are taken out of our check before the farmer ever sees a penny. What do the processors need with another 23%....what do they pay for?