September 2017 Issue No. 458
Inside this month’s issue …
Our stories of the month:
Butter: Demand Strong, But CME Prices Tumble Sharply and
CME vs. AMS: Contrasting Weekly Cheddar & Butter Averages
Click Above for Stories of the Month.
Strong, But CME Prices Tumble Sharply (p. 1):
We discuss contra-seasonal, recent butter pricing events at the Chicago Mercantile Exchange. Story of the month, click above.
Early 2018: Likely Start for
Walmart Fluid Plant in Fort Wayne (p. 1):
When Walmart starts processing fluid milk at its brand new facility early next year, dairy will never be the same. Fluid processors (primarily Dean Foods) will start chasing after other processors’ retail accounts. Dairy Farmers of America is offering cheap Class III milk to Wisconsin plants from the Mid-East order. Federal milk orders???
August 2017 Class III Price is $16.57 (+$1.12)
The cheese milk price for USDA’s federal milk order program rose $1.12/cwt. in August.
“Something Big” Brewing in the Northeast …
Merger? Marketing Agency? (p. 3):
The seriously troubled Northeast looks like its getting ready for some sort of consolidation of dairy co-ops. Merger? Marketing agency in common? Agri-Mark and the St. Albans Co-op seem to be involved. And of course, nothing “Big” happens in the Northeast without Dairy Farmers of America. We’ll see …
2017 Forage/Corn Crops Are Problematic in NY,
New England (p. 3):
A cold, wet spring followed by a cool, wet summer has meant big setbacks for crops in New York State and New England. In the coming months, dairy marketers in that area may honestly project a big drop in milk production, due to poor crops and limited financial resources on dairy farms.
DFA Knocking Off Small
Co-ops in Northeast (p. 4):
Like ten pins, DFA is wiping out smaller milk marketing groups in the Northeast. Threats of no milk markets if groups and individuals don’t join DFA are common.
July Milk Dumpage in FMMOs 1 &33 Down
Dramatically (p. 4):
What surplus? Milk dumpage for both the Mid-East and Northeast federal milk orders was way down for July 2017.
DFA’s Garden City, Kansas Milk Powder Plant to
Open (p. 4):
The nation’s newest dairy processing plant – DFA’s milk powder plant in Garden City, Kansas, will open this fall. Just what the nation needs … a milk powder plant smack dab on top of the fast-declining Ogallala aquifer.
FDA: “Enforcement Discretion’ for U-F Milk in
Cheese Vats (p. 4):
FDA will look the other way on use of ultra-filtered milk in the production of cheeses of a standard identity.
CME vs. AMS: Contrasting Weekly Cheddar &
Butter Averages (p. 5):
In late August and early September, cash butter and cheese prices at the Chicago Mercantile Exchange headed south. But the weekly dairy commodity price survey of manufacturers by USDA’s Agricultural Marketing Service didn’t go down. Is this a short-term curio, or a sign of things to come??? Story of the month. Click on story at top of the Web page.
Big Decisions in
Long-Running Milk Powder Price Mis-Reporting Case (p. 5):
In late August, the Courts came down hard on Defendants in dairy’s long-running milk powder mis-reporting case. The court let stand some aspects of RICO (anti-mafia) claims against Defendants DairyAmerica and California Dairies, Inc. Defendants and their lawyers were sanctioned for misconduct. The court did not grant requests to add California dairy producers to the Class.
Organic Producers Taking a Whipping on Price,
Markets (p. 7):
We cite numerous instances of organic dairy producers seeing their milk price drop, or else conventional producers in transition to organic having those transitions cancelled in mid-stream.
Clover Sonoma: San Francisco Bay Area Processor
Changing with the Times (p. 8-9):
We profile Clover Sonoma, a major dairy processor in the SF Bay Area. Clover Sonoma has recently undergone a name change, to identify better with the North Bay ambiance. And Clover Sonoma has rolled out a line of “Non-GMO” half-gallons.
New York Organic Grain
Dealer Uses QuickScan® to Insure Organic Grin Integrity
Paris Reidhead reports on his discussions with NY organic grain farmer/dealer Sumner Watson on the importance of testing imported grain to assure quality.
Dairy Farmers Can Now Opt Out of MPP (p. 11):
Recent moves by Congess and enacted by USDA will allow dairy farmers who entered five-year contracts for the Dairy Margin Protection Program to notify USDA they want out without penalty. Savings: $100/yr. for not having to continue in a worthless gov’t program.
Farmer Optimism Continues to Fade in Latest Ag
Confidence Survey (p. 12):
Writer/dairy farmer Jan Shepel details a recently released Ag Confidence Survey that shows America’s farmers are losing confidence in prices in their various sectors.
Dairy Commodity Price Gyrations Cause Confusion
Up and down price movements of dairy commodities in cash market trading at the Chicago Mercantile Exchange are starting to defy logic. Some point to market disruptions caused by adverse weather. But others suspect that CME’s shift to electronic trading n late June 2017 may be the culprit.
Barron’s Columnist Doesn’t
Get Dairy (p. 14):
We all make mistakes, but … In late July, Barron’s columnist Chelsea Dulaney really goofed. In writing about a pending surge in commodity Cheddar prices, she recommended that investors could hope on that uptick by buying stock in Dean Foods. Trouble is, Dean Foods doesn’t make or sell cheese. And when disappointing second quarter earnings came out in August, Dean Foods’ stock continued its nose-dive … having lost half its value from early January 2017 through late summer.
Dairy exporters must cope with Trump’s bluster
against buyers (p. 15):
Just this year, Donald Trump has blustered against just about every major buyer of U.S. dairy commodities – China, Mexico, Canada and South Korea. At what point do export buyers start to view the U.S. as an unstable supplier … or do they ignore the blather coming from the White House?
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