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?