World Markets?

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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

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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.

Product of Mexico

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The Organization for Co-operation and Development (OECD) measure or surveys a great number of things. One item I recently came upon is a survey of the perception of corruption in the various member countries.

Poland fared the worst, followed by Mexico. Not far behind came the U.S. at sixth.

This raises a question: should the consumers in the United States trust a dairy product made in Mexico? Is the above product made in conformance with the Code of Federal Regulation “Standard of Identity”?

http://edocket.access.gpo.gov/cfr_2006/aprqtr/pdf/21cfr131.120.pdf

Furthermore, what is the trustworthiness of Nestles?

http://en.wikipedia.org/wiki/Nestl%C3%A9#Controversy_and_criticism

PCE Data

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The Bureau of Economic Analysis (BEA), which is part of the U.S. Department of Commerce regularly publishes economic information. One Item published is called Personal Consumption Expenditures (PCE). For dairy BEA tracks two categories, fluid and manufactured dairy products.

In the above PCE graph I have combined the two, which shows total dollars spent on dairy.

The Bureau of Labor Statistics (BLS)publishes Consumer Price Indexes (CPI). The CPI - the costs of each unit - has fallen for dairy in the first nine months of 2009.

Consumers have spent more money total on dairy and the items costs less. Translation - more, not less dairy was sold. Where is the money?

email from Australia

Below is an email from a dairy farmer down under:

A friend sent me the link; said that a dairy farmer friend told her that "listening to all the farmers at the local hearing was like a eulogy".

Did you attend?

http://www.nyssenate57.com/57/news/09-10-19/dairy_farmers_plea_for_support_from_legislative_leaders.aspx



MG just gave us a step up; media is lapping it up making out all our probs are over, saying it equates to 1.5 - 2c per litre! In order to get 2c a litre you would need to be doing a bit better than a 5bf and 4.5 prot.

Sooooo, it brings us up from 19.6cpl to maybe 21cpl. Whoo hoo?

Ave cost of prod. even in our neck of the woods is said to be 30-35cpl.

Many farmers say they are getting out. Many say that the minute prices increase a bit, they will put their farms on the market. Some are concerned this glut will then dump the land prices.