DairyBusiness Update: March 13, 2014

You Only Want Me for My Cheese
   Domestic cheese demand has started to weaken, according to FC Stone dairy economist Bill Brooks. Writing in this morning’s Insider Opening Bell, Brooks said: "High prices have been negatively impacting demand for the past month but the supply-and-demand balance is still tight enough internationally to keep prices supported."
   U.S. cheese prices are now on par with USDA's Dairy Market News (DMN) prices for Oceania released two weeks ago, Brooks reasons. "World buyers aren't coming to us for price," he says. "It may be that the United States is the only market with available product."
   Interestingly, Brooks also points out that "Europe has supplanted the United States as the softest dairy market. Given Europe's recent milk production levels and struggling economy, there just isn't enough demand to use current production. Elsewhere markets are tight."

Dairy Title: More Questions than Answers
   Dairy producers await answers from the U.S. Department of Agriculture regarding the new Dairy Title in the new Farm Bill. National Milk’s Chris Galen talked about it on today’s DairyLine, after NMPF’s board met with Deputy Ag Secretary Krysta Harden.
   Galen said there are many questions that need answers, such as when does signup actually start, how will new entrants to the dairy industry be treated as well as people who may be selling or leasing out their operations, and how payments for the insurance program will be made, both to the program as premiums, as well as payments back from USDA if we get into low income situations but he admits that even USDA does not have the answers yet and we may not get the answers until the end of summer.
   Galen said NMPF wanted to have some dialogue with USDA on these issues “so whatever decisions they make, they make them in as farmer-friendly a way as possible.”

Going to Kansas City, Kansas City, Here We Come
   The nation’s largest dairy cooperative, Dairy Farmers of America (DFA), will hold its 16th Annual Meeting March 18-19 in Kansas City, Missouri. More than 1,400 members and industry guests are expected to attend under the theme, “Dedicated to Dairy.” A DFA press release says the cooperative will recognize its members and their commitment to their cows, their operations, their communities and their families.  
   Special guests and highlights include the Chairman’s Report by Randy Mooney, Chairman of the Board, and President and Chief Executive Officer, Rick Smith, will give his annual report.
   The U.S. Dairy Export Council’s Tom Suber will discuss “Maintaining the Global Momentum for U.S. Dairy.” Jay Waldvogel, Senior Vice President, Strategy and International Development, will address DFA’s Global Strategy, and Lowell Catlett, Regents Professor and Dean of the College of Agricultural, Consumer and Environmental Sciences, at New Mexico State University, will discuss “Agriculture: What the World Needs Now More Than Ever.”
Dairy Thrives Behind Ivied Walls
   Cornell University’s new creamery in Stocking Hall teaches students more than dairy processing, writes April Miller in the March 13 Dairy Foods Magazine. They learn engineering, environmentalism and food service here, too.
   Bavarian Raspberry Fudge and Triple Play Chocolate are just a few of the ice cream flavors in production at Cornell University’s new state-of-the-art dairy processing plant. And since the facility in Ithaca, N.Y., opened last August, not only are students and guests able to order up a cone at the Dairy Bar scoop shop but also they can watch the ice cream production in process through a two-story glass wall facing the campus’ main street and an indoor observational balcony.
   “We designed the plant very intentionally and it sends a powerful message of transparency. You see that and it links it back to cows as the starting point, realizing where it’s all really coming from,” said Kathryn J. Boor, the Ronald P. Lynch Dean of the College of Agriculture and Life Sciences. “The plant sends a powerful message to the public about the care with which food is handled.”
   The new plant was just one portion of the $106 million renovation project of Stocking Hall. Home to Cornell’s top ranked Food Science programs, renovation of the 1920s hall (its last major renovation was in the 1960s) also included new food microbiology, food engineering and food chemistry laboratories; new classrooms; a conference center; teaching winery; and offices.
   Production processes are run by an automated process control system. The proprietary software “means we can stream our HMI control software into classrooms for real-time, read-only viewing of current data and processes,” said Jason R. Huck, general manager, dairy operations.
   A Cornell grad himself, Huck completed a master’s degree in Food Science/Dairy Microbiology, he has been the GM since 2008. His master’s thesis focused on fluid milk shelf-life extension. Read more at http://eblast.bnpmedia.com/DF/SneakPeek-Blueprint/DF0314IceCream.pdf.

World Dairy Expo “Cream” Rises to the Top
   World Dairy Expo (WDE) along with the dairy industry will honor four exemplary dairy leaders this fall at the annual Dinner with the Stars Recognition Banquet held in conjunction with the global event in Madison, Wis. “Nominated by their industry peers, these leaders were selected for their outstanding contributions to the industry”, shared Scott Bentley, WDE General Manager.
   The 2014 World Dairy Expo Recognition Award honorees are: Dairy Woman of the Year – Pam Bolin, Beaver Creek Farm, Clarksville, Iowa; Dairyman of the Year – James S. Huffard III, Huffard Dairy Farms; Duchess Dairy, Crockett, Va.; Industry Person of the Year – Dr. Curtis P. Van Tassell, USDA, Agricultural Research Service, Bovine Functional Genomics Laboratory, Beltsville, Md.; and International Person of the Year – Lowell D. Lindsay, Retired, Semex Alliance, Guelph, Ontario, Canada.
   More than 70,000 dairy producers and industry experts from 92 countries attended last year’s Expo. The world-class event includes 2,500 head of North American dairy cattle competing on the famed “colored shavings,” more than 850 exhibiting companies participating in the trade show, Expo Seminars, Virtual Farm Tours and youth competitions. The 2014 theme is “Designer Dairy” and will be held September 30 through October 4 in Madison. Visit worlddairyexpo.com or follow on Facebook.

Mielke Market Daily
(A daily wrap-up of dairy markets and the things affecting them, from DairyBusiness Update associate editor Lee Mielke)
   The second run up in CME cash cheese prices hit a bump in the road today. While 2 unfilled bids took the blocks up another 2.5¢, to $2.35/lb., the Cheddar barrels rolled down 1¢, to $2.2750/lb. on an uncovered offer. The spread, normally 3-5¢, is now at 7.5¢. The blocks have seen 7 successive sessions of gain, they have not lost ground since Feb. 11, and are 1¢ away from their all time high.
   Butter was unchanged for the 3rd consecutive session, holding at $1.8850/lb. Two offers at $1.90/lb. brought no response.
   FC Stone’s Bill Brooks says “The next couple of weeks are typically a high demand period for butter. Given the current price level for butter, retailers wont' be overly aggressive in securing product or featuring butter for the holiday. I don't think we'll see much Easter demand period."
   Cash Grade A powder was unchanged for the 5th session in a row today, remaining at $2.04/lb. An offer at $2.05/lb. was left on the board.
Today’s Market Closing Prices:
Butter: Unchanged, at $1.8850/lb.
Cheddar blocks: Up 2.5¢, to $2.35/lb.
Cheddar barrels: Down 1¢, to $2.2750/lb.
Grade A nonfat dry milk: Unchanged, at $2.04/lb.
Class III milk: Mar. $23.17, +26¢; Apr. $21.81, +35¢; May $20.19, +16¢; & Jun. $19.93,
+13¢. Based on today’s CME settlements, the Second Quarter 2014 average now stands at $20.64, +21¢ from Wednesday. The 2nd half average is now at $$19.19, +5¢ from Wednesday.
Looking ahead:
   The Agriculture Department will issue its monthly Livestock, Dairy, and Poultry Outlook tomorrow afternoon. Next week, the biweekly Global Dairy Trade Auction happens Tuesday, the preliminary February Milk Production report is issued by USDA Wednesday afternoon, along with the April Federal order Class I base milk price. The Livestock Slaughter report is out on Thursday and the preliminary February Cold Storage report is out Friday afternoon, March 21.
Friday on DairyLine:
   Fluid Milk Sales Soaring, Up 10%. Wouldn’t the dairy industry like to see that headline? We’ll talk to a Washington State dairy farmer who is experiencing that.
   Dr. Mike Hutjens has his weekly “Feed Facts” in our second half


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