Sunday, May 15, 2011

New Host

I have a new host for the blog. The URL is:

There will be some time before I am familiar with the workings of Wordpress, but, that's life.

I will post something later today.

Pass the word and let me know what you think.

Friday, May 13, 2011


Google blogger was down for some time.

I will be changing host soon.

Wednesday, May 11, 2011

Money Talks

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The stock market fell. Oil fell. Corn, wheat, soybean futures fell. The dollar is up. Is there a pattern?

No surprise that butter futures fell, the limit, a nickel. No surprise that Class III milk futures fell. But, look above at the Commodity Futures Trading Commission (CFTC) "Commitment of Traders" report. Look at how few players participate. Then ask why "non-commercial" players should even be there.

Don't worry though. These are really smart people who know more than the mere mortal.

Tuesday, May 10, 2011

Dean Defies Predictions

Some insiders felt Dean would fall very short on first quarter earning. Instead, they pulled a rabbit out of the hat:

In the first half hour of trading today Dean shares were up over 14%. At the closing bell Dean shares were up 11.48%.

Oddly enough, Dean saw sales volume for fluid drop and the Class I mover rise dramatically when compared with the first quarter of 2010. Greg Engles said on the conference call he expected farm milk price to remain steady for the rest of the year. But, what does he know?

As Yogi Berra once said, "It's tough to make predictions, especially about the future."

Monday, May 9, 2011

Crop Progress

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Today, May 9, 2011 USDA's "Crop Progress" report was released. The full report is at:

The two snips above show planting is progressing. However, the amount emerged is way behind average. The temperature has not been conducive to corn within the corn growing states. Additionally, there are reports of 900,000 acres under water.

Just what this will all mean when the harvest season comes is anyone's guess. A study on various prediction models (not for the corn crop) indicates people are not very good. So, what will come of dairy ration price is yet to be known.

Sunday, May 8, 2011


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Although much of the focus of the news is on the Mississippi flooding there are still vast areas of the country experiencing drought (see above).

An interesting news story focuses on the extreme effects of La NinaL

The winter and early spring have been extreme across the West, with record snowpacks bringing joy to skiers and urban water managers but severe flood risks to northern Utah, Wyoming and Montana.

And despite all the wet weather in the Rockies and Sierra Nevada, parts of eastern Colorado, New Mexico and Arizona are in severe drought and gearing up for what is forecast as a bad fire season. In New Mexico, some 400 fires, driven by relentless winds, have already raced across 315,000 acres.

Credit — or blame — for the extreme weather goes mostly to a strong La Nina, which is associated with cooler than normal water temperatures in the Equatorial Pacific Ocean and an atmospheric flow that's causing drier than normal conditions in the Southwest and wetter than normal in the Northwest..

More at link.

Saturday, May 7, 2011

Tornado Victims

I learned today of one dairy farmer in Alabama who just got his power back on ten days after the tornado.

A couple days ago I received this:


Federation of Southern Cooperatives is taking donations to help the Alabama tornado victims.

Requested Items

* towels
* tooth paste
* canned foods
* can openers
* cooking utensils
* cleaning supplies
* socks
* washing powder
* soap
* underwear
* water
* toiletries
* bathroom tissue
* clothing
* cash donations are accepted (all donations are tax-deductable)
o Make all checks payable to the Federation of Southern Cooperatives

Please send all item donations via UPS to:

Debra Eatman
575 Federation Rd
Gainsville, Ala 35464

Friday, May 6, 2011

Commodities Drop Again

Big money is running, looking for safe places. The U.S. dollar seems to be that place, which results, since commodities are denominated in dollars, in falling oil, corn and other commodities.

Yesterday a new study came out:

The study seems to explain, to some extent, the fall globally, in crop yields. However,we seemed to have missed, so far, negative impacts. The article concludes:

That might be keenly felt if patterns of warming shift. One of the reasons that the climate effects Dr Lobell and his colleagues have dug out of the data are not worse is that, although the planet as a whole has warmed up during the past 30 years, growing seasons in the parts of America which produce 40% of the world’s maize and soyabeans have failed to follow suit. No one is quite sure why this might be and no one knows if it will last. That climate change has not yet done very much harm may be cheering, but the past offers no firm guarantees for the future.

Thursday, May 5, 2011

Commodities fall

Commodities fell today. Oil fell, corn fell. It is too wet to plow and corn futures fell. So much for supply and demand and hooray for the Commodity Futures Modernization Act of 2000 which allow big money to hedge things like corn against speculating on the dollar.

Needless to say the dollar took off in an upward flight.

What all this will mean to dairy farmers is too soon to tell. But,all bets are off.

Dean Settlement Approved|newswell|text|FRONTPAGE|s

U.S. District Court Judge Christina Reiss granted preliminary approval Wednesday to a revised Dean Foods settlement in the class action lawsuit being brought on behalf of Northeast dairy farmers, clearing the way for the plaintiffs to begin notifying farmers of the $30 million payment Dean has agreed to make to settle the case.

Attorneys for the plaintiffs, which include two Vermont dairy farmers, have estimated that about 8,000 farmers will be entitled to a share of the settlement. They have characterized the case as the first step in breaking Dean’s grip on the milk market, restoring competitoin to the marketplace. Dean is the largest milk processor in the country.

The two other defendants in the lawsuit, Dairy Farmers of America, and its marketing arm, Dairy Marketing Services, have refused to settle, and have said the lawsuit is pitting dairy farmer against dairy farmer. Dairy Farmers of America is the largest dairy farmer cooperative in the nation and includes hundreds of Vermont dairy farmers.

About two dozen farmers belonging to the Dairy Farmers of America coop attended an April 15 hearing on the case in Reiss’s court to show their opposition to the lawsuit. The farmers have said a provision of the lawsuit that would require Dean to buy at least 10 percent of its milk from a source other than Dairy Farmers of America would ultimately lead to lower milk prices and could put some of them out of business.

But as Judge Reiss noted in her decision Wednesday, that provision of the lawsuit was dropped in its revised version, clearing the way, in her opinion, for the $30 million settlement to go forward. Reiss noted in her opinion that the requirement to buy milk from sources other than Dairy Farmers of America "has been the sole source of objections to the Dean Settlement."

"We’re pleased with the Court’s decision and believe this is a very good outcome for the farmers represented in this case," said Benjamin Brown of Cohen Milstein Sellers Toll, PLLC, the Washington D.C. law firm bringing the lawsuit. "We are continuing to move the case forward against the remaining defendats, DFA and DMS, and expect to complete factual discovery in the case in the next month."

Attorneys for Dairy Farmers of America were still reviewing Reiss’s decision Thursday morning.

Essentially, Dean settled for what might have been its costs to defend itself in the case. Not bad. And, as things stand, we have learned nothing and nothing has changed.

Most everyone had hoped for more - much more.

Wednesday, May 4, 2011

Decling World Yields

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Declining crop yields

There are many reasons for high commodity prices. But recent data from FAO shows a pretty rapid slowdown in productivity growth. The price spike in 2008 occurred in a particularly bad year in which yields declined on a worldwide basis for three of the four largest food commodities. In 2009 all four of the majors saw yield declines, something that hasn't happened since 1974. 2010 couldn't have been much better and was probably worse, given how bad things were in the U.S, the world's largest producer and exporter (worldwide data for 2010 isn't available yet).

More at link.

Probably, there are several reasons but, obviously, Monsanto is not going to feed the world.

Tuesday, May 3, 2011

Corn & Money

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Yesterday USDA's "Crop Progress" report was released:

Above shows the how little corn has been planted. Yesterday, the decision was made to flood thousands of acres of cropland. One might think corn prices might have skyrocketed today - not so.

Weather may be important. Supply and demand may be important. But, the almighty (or not so almighty) dollar seems to reign.

Dairy farmers will certainly face a stiffer grain bill.

Monday, May 2, 2011


Today, USDA released its "Dairy Products" report which covers March 2011. American type cheese production was up 0.3 % when compared with March 2010. USDA's "Commercial Disappearance" data came out recently which showed a 12% increase in sales of American type cheese. That is a huge change. Most of the increase came from exports.

Speaking with a cheese broker today, I learned there are hamburger price "war" currently. he felt that should bump up cheese consumption.

Altogether, the situation should provide a healthy price at the CME. But, do the traders really know what is happening in the real world?

Sunday, May 1, 2011

New Checkoff Needed?

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While dairy farmers pay into the dairy checkoff, dairy farmers seem to be using less milk on the farm. The USDA data only goes to 2004. Lately according to sources, dairy farmers are cutting milk replacer to save money.

The data shows, however, dairy farmers have been cutting farm milk use at a faster pace than the consumer.