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| Despite weak milk prices, dairymen cull fewer cows |
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Fueling the concern over rising cow numbers, USDA’s National Ag Statistics Service estimated 223,000 culled dairy cows were slaughtered under federal inspection in February, down about 9,100 head from January 2010, and 20,500 less than February 2009. The January to February cull cow slaughter totaled about 455,000 head, down about 69,600 from the same period a year earlier.
As reported last week, the CWT program has reactivated its export assistance on cheddar cheese. The decision came after CWT’s monthly analysis of the markets, according to CEO Jim Tillison in Thursday’s DairyLine. One of the things the analysis showed, he said, is that the issue is not too much milk but too much cheese inventory overhanging the market, negatively affecting prices.
World cheese prices are above U.S. prices, he admitted, but CWT wanted to provide an incentive to CWT members to “aggressively pursue additional business.” If significant quantities of cheese can be moved overseas, he said, CWT believes domestic cheese prices will climb.
Tillison also admitted the CWT subsidies could impact private sales abroad however the incentive CWT provides is “modest,” he said, is targeted specifically for new business, and CWT doesn’t expect sales to be affected.
When asked if the incentive might be expanded beyond cheese, he said, “At this point we’re looking only at cheese but certainly, because we’ll re-evaluate on a monthly basis, the possibility exists for that decision to be made down the road.”
DFA meeting attendees remember leader
Members of the nation’s largest dairy cooperative, Dairy Farmers of America, held their 12th annual meeting in Kansas City this week. Dairy Profit Weekly Editor Dave Natzke reported Friday that emotions were mixed on a couple of levels. It was the first annual meeting since the death of Colorado dairy farmer and long-time DFA leader Tom Camerlo, so emotions featured the mourning of his passing and the celebration of his life, Natke said.
The other mixed emotion centered on the dairy economy. While dairy farmers suffered through one of the worst years ever in 2009, DFA members heard their co-op’s annual profits rose about 6 percent, to about $65 million.
The co-op marketed nearly 63 billion pounds of milk last year, or about one-third of the nation’s total, but lower milk prices meant the value of sales was down about 31 percent, to about $8 billion. The co-op’s annual average milk price paid to members was $13.05 per cwt. in 2009, down from $18.60 last year.
Attendees heard from speakers on what’s being done to address depressed milk prices, according to Natzke. Dairy Management Incorporated president and CEO Tom Gallagher said the checkoff program was working to address cheese inventories, including helping multiple fast-food and casual dining restaurant chains utilize more American cheese on sandwiches, and increasing use of U.S.-sourced mozzarella in pizza restaurants in the Pacific Rim.
Gallagher also said dairy organizations are pressuring the Obama Administration to purchase more cheese for feeding programs and food banks, offering both the needy and dairy farmers, a “win-win situation.”
He said the American cheese inventory is overhanging U.S. markets, keeping cheese prices low. He also said any bank-forced foreclosures of dairy operations in the coming year were not likely to substantially reduce the nation’s dairy herd, but rather move the cows and production potential to other dairy operations.
National Milk consider new dairy policies
Jerry Kozak, president and CEO of National Milk, outlined major dairy policy considerations underway in Federation committees. They include a margin insurance program with a base plan funded by the government and a supplemental plan allowing producers to buy additional coverage through insurance premium payments.
National Milk is also formulating a growth, or supply management
plan, with some alterations to proposals already offered by Holstein USA and California’s Milk Producers Council, Natzke reported.
The NMPF proposals call for elimination of the current dairy product price support and Milk Income Loss Contract program payments, with money from those programs used to finance margin insurance. Details of both programs will be available in late spring or early summer, he said.
A key season for beef sales is approaching, namely summer grilling and holidays like Cinco de Mayo and Memorial Day. Texas dairy producer and Texas Beef Council member Jerry Spencer stated in Wednesday’s DairyLine that beef checkoff partnerships and promotions at the grocery store help increase beef demand and put money in the pockets of beef and dairy producers.
“The great thing about these programs is that the coupon redemption costs are covered by promotional partners,” Spencer said. “Our checkoff investment as producers goes toward creative development and media costs for advertising these promotions,” and he pointed out that, on average, for every dollar farmers invest, the retail partners put in $5-$10, “a sizeable return on investment.”
He added that “Partnerships through retail help demonstrate how our producer dollar is stretched to maximize our checkoff investment,” adding that, “Our minimal investment is extending the retail program reach to millions of beef customers for the next few months.” The goal, according to Spencer, is that “through these partnerships and relationships, we can continue to grow demand for our great product and thereby create profit opportunities for producers.”
Some of the upcoming partnerships include: Heinz’s Classico and New York Texas Toast Beef Bolognaise Recipe Promotion, Anheuser-Busch’s Bud Family Hispanic Promotion, Snyder’s of Hanover Promotion, and the Sutter Home Build a Better Burger Promotion.
Each of these promotions features a coupon for beef, he said, whether it’s a mail-in rebate or in-store coupon. The goal of reaching more than 20,000 stores with each promotion is to drive beef sales during a key time, the summer months, when consumers love to be outside at the grill. For more information, log on to www.mybeefcheckoff.com and for more information about summer grilling and the “Safe & Savory at 160 program,” visit www.beefitswhatsfordinner.com
California dairy producer and Dairy Management Incorporated Board member Brad Scott was back in Monday’s “DMI Update,” in an interview with DairyLine’s Bill Baker at last month’s World Ag Expo. This week he talked about the dairy checkoff’s relationship with Domino’s Pizza and schools. He discussed the latest joint project with Domino’s which involved putting 40 percent more cheese on their pizzas and he said Domino’s did not lower the cheese percentage on their other pizzas, so it was additional cheese usage.
The dairy checkoff is also involved with schools via the “Fuel Up to Play 60” campaign. He said the program is “educating kids that dairy products are good, healthy products that they need to make sure is in their diet, along with exercise.” |
| 3/31/2010 |
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