California Dairies Inc. (CDI), the largest member-owned milk marketing and processing cooperative in the state, is looking for new members and milk.
On March 1, CDI’s board announced it is accepting applications for new facilities. If accepted, new members will be allocated milk production base associated with CDI’s capacity allocation program.
CDI, the second-largest dairy-processing cooperative in the United States, recently increased its milk handling capacity 2.5 million pounds per day, increasing milk supply needs.
As of January, California’s cow numbers were estimated at 1.775 million head, down about 4,000 from a year earlier.
In 2015, the state’s cow numbers averaged 1.778 million, down 2,000 from 2014. Milk per cow averaged 23,002 pounds in 2015, down 784 pounds, resulting in a 3.4 percent decline in California’s overall milk production compared to 2014.
Eighteen states saw total milk production decline in 2015. However, California’s decline of 1.44 billion pounds nearly tripled the 427 million pound decline estimated in the other 17 states.
CDI’s 390 members currently produce about 43 percent of California’s milk, shipping 17 billion pounds of milk annually and manufacturing butter, fluid milk products and milk powders. For additional information, visit www.californiadairies.com.
Lentsch to succeed Kruger at Midwest Dairy Association
Midwest Dairy Association (MDA) named Lucas Lentsch to succeed retiring chief executive officer Mike Kruger, effective July 1.
Lentsch, raised on a family dairy farm, has served as South Dakota’s secretary of the Department of Agriculture since April 2013. He will resign that post in late March to begin the transition to MDA.
Kruger has served Midwest dairy farmers, processors and marketers for more than 35 years. He assumed leadership of an MDA predecessor organization, American Dairy Association of Minnesota, in 1985 after serving as assistant manager for five years. He guided the organization as it evolved to become American Dairy Association/Dairy Council of the Upper Midwest and later Midwest Dairy Association.
MDA administers dairy research, promotion and marketing programs funded through the national dairy checkoff. It represents 8,000 dairy farms across 10 states, from North Dakota and Minnesota in the north to Arkansas and Oklahoma in the south.
New values influence consumer decisions
Taste, price and convenience are no longer the sole deciding factors when people buy food and beverages, according to a new study from Deloitte, the Food Marketing Institute and the Grocery Manufacturers Association. The study, “Capitalizing on the shifting consumer food value equation,” found about half of Americans surveyed also weigh evolving drivers – health and wellness, safety, social impact, experience and transparency – in their purchasing decisions. Preference for these attributes does not differ by generation, income level or region, but are becoming even more fragmented.
The study also showed a shift in the way people think about food safety. Americans no longer define the concept of food safety based on near-term health risks. Consumers now link health, wellness and transparency with their definition of safety, and include factors such as free from harmful ingredients (62 percent), clear and accurate labeling (51 percent) and fewer ingredients, processing, and nothing artificial (42 percent).
Maple Hill Creamery, Stoneyfield reach ‘grass-fed’ milk agreement
New York-based Maple Hill Creamery entered into a supply agreement with Stonyfield to provide milk from certified-organic, grass-fed cows, the company said.
Stonyfield, based in New Hampshire, introduced a fruit-on-the-bottom style yogurt made from 100% certified grass-fed milk, supplied exclusively by Maple Hill Creamery’s family of farms. The Stonyfield launch is exclusive to Whole Foods Markets nationwide for six months.
The Maple Hill Creamery milkshed includes 47 farms, with another 16 expected to transition in 2016.
Prairie Farms ‘Peeps’ milk back for 2016
Prairie Farms PEEPS® Milk is back for the 2016 Easter holiday season, with expanded promotions.
The marshmallow-flavored beverage was launched last year. In addition to Chocolate Marshmallow and Egg Nog, two new flavors are in the lineup for Spring 2016: Strawberry Crème and Orange Crème.
Prairie Farms will host a “reci-PEEP” contest through March 27, inviting consumers to upload recipes and photos featuring at least one Prairie Farms product and their favorite PEEPS® marshmallow. Consumers can also enter daily for a chance to win $250 cash and support the “Our Caps Your Cause” program. The food pantry and animal shelter with the most votes will receive $250 cash.
Owned by about 700 dairy farmers, Prairie Farms Dairy and its subsidiaries manufacturer and market a full line of dairy food products out of 24 plants and 13 joint venture plants throughout the Midwest and Mid-South.
Georgia milk marketing order vote underway
Georgia dairy farmers will determine whether to extend the Georgia Milk Marketing Order for an additional three years. The current order expires June 30, 2016.
Through the national dairy checkoff, U.S. dairy farmers pay 15 cents per hundredweight (cents/cwt.) on all milk marketed to fund research, marketing and promotion programs. Qualified state and regional marketing organizations, including the Georgia Milk Commission, are eligible to retain 10 cents/cwt. of that checkoff.
If the Georgia order is voted down, all 15 cents/cwt. of the checkoff goes to the national program.
Eligible Georgia dairy producers must return ballots to the state Department of Agriculture by March 30. Producers not receiving ballots should call 404-586-1405.
Dairy Margin Watch: February closes weaker
Dairy margins continued to deteriorate over the last two weeks of February, according to the latest CIH Margin Watch report from Commodity & Ingredient Hedging LLC. Renewed pressure on milk prices more than offset weaker feed prices.
Projected dairy margins are negative through the third quarter of 2016, and just barely positive for the fourth quarter of 2016.
Dairy prices continue to be pressured by large product stocks, as well as strong milk production in the European Union.
January 2016 U.S. cheese stocks were up nearly 13% from a year ago, and haven’t been this high since the 1980s. Butter stocks were also up sharply from a year ago.
Led by Ireland and the Netherlands, EU-28 December 2015 milk collections were up about five percent from the same month a year earlier. Total 2015 production, at 334.3 billion pounds, was up 2.2 percent from 2014 and 16.8 percent more than 2013.
Feed costs remain the positive story, with corn and soybean meal futures moving to fresh contract lows. Harvest progress is advancing in Argentina and Brazil, with private forecasters increasing corn and soybean production estimates.
Visit the Margin Manager website.
February FMMO, California prices announced
February 2016 federal milk marketing order (FMMO) Class III and Class IV minimum prices and comparable California order Class 4b/4a prices were announced, March 1-2.
Monthly FMMO prices and changes are:
- Class III: $13.80/cwt., up eight cents from January 2016, but $1.66 less than February 2015.
- Class IV: $13.49/cwt., up 18 cents from January, but 33 cents less than February 2015.
California prices change little
California's February 2016 Class 4a/4b milk prices compared to the previous month and year are:
- Class 4a: $13.28/cwt., up two cents from January 2016, but 18 cents less than February 2015.
- Class 4b: $13.05/cwt., down three cents from January, and 73 cents less than February 2015. It is 75 cents less than the comparable FMMO Class III price.
The February 2016 Class 4b price includes the temporary change to the state’s Class 4b milk pricing formula. The adjustment, affecting the “dry whey” scale, is effective on milk produced through July 31, 2016.
Will 2016 be a repeat of 2009?
While it might not be exactly the same in milk price terms, some of the same issues affecting a dairy producer's cash flow in 2009 will return in 2016, according to the Penn State University Extension.
Pennsylvania’s 2015 average all milk price was $18.48/cwt. Based on the cash flow plan summary compiled by the Extension Dairy Team, the break-even cost of production averaged $19.88/cwt. on 107 farms. Forty-five percent maintained a break-even milk price less than $18.44/cwt.; however 55 percent exceeded $19.59/cwt.
The same issue observed every year is the huge difference in total feed cost per cow per year. In 2015, this difference was $600 per cow per year in feed cost from the lowest to highest break-even cost of production.
The factors that affected a farm’s 2009 break-even cost of production are still exerting their influence in 2016. Forage quality, forage inventory, cropping and feeding management, nutrition and cow comfort affect the milk produced per cow per day.
Problems in one or many of these areas can have a significant effect on the total pounds of milk sold per year. Reproductive management, cull rate or the heifer program can influence the numbers of cows and pounds of milk shipped.
The bottom lines are: 1) know your break-even number, 2) recognize the bottlenecks on the farm, and 3) implement a plan for staying in or getting out of business. PD
