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January 2015  Issue No. 426

Inside this months issue...

Feature Story #1: Some Regions’ Dairy Marketing Descends into Chaos (p. 1):
    One of our two “Stories of the Month.” Read it here.

Distinct Price/Demand Trends: Organic vs. Conventional (p. 1):
    Look at the trend lines and the early 2015 prices paid. Organic milk sales are climbing significantly, while conventional fluid milk sales sag backwards. Pete Hardin estimates that by February-March 2015, high-end prices for conventional milk will be nearly three times as high as conventional dairy producers’ returns.

December 2014 Class III Price $17.82/cwt.; Class IV at $16.70/cwt. (p. 2):
    Class III (cheese) milk prices in USDA’s federal milk order program tumbled by $4.12/cwt. Given present key commodities’ prices, there is another haircut coming.

DFA Sold Sulfamethazine-Contaminated Milk in August: Huge Recall (p. 3):
    Two contaminated loads of farm milk from Beaver Creek Farm (Coopersville, MI) were marketed by DFA. A recall resulted. Firms’ with products in that recall include: Dannon, Dean Foods, Unilever, and Continental Dairy Facilities.

Northeast Antitrust Claims Filings by Producers Now Delayed Until May31, 2015 (p. 3):
    Forget the Jan. 15, 2015 deadline for dairy producers to file claims in the Northeast Antitrust Settlement vs. DFA. That deadline is now May 31, 2015. The Jan. 15 date was impossible for the regional federal milk order’s personnel to meet requests for producers’ milk output histories.

Nose-Diving Milk Prices Will Reduce Dairy Livestock Values, BUT … (p. 3)
     This article is a discussion of how falling milk prices will impact dairy livestock prices. Good news: the all-time peak cycle for beef should help undergird dairy livestock prices against collapse.

2014 Dairy Culls Lag 300,000 behind 2013’s Total (p. 4):
    Do the math: some 300,000 milk cows are overdue for their passage through the Golden Arches.

Managing Your Dairy Operation in These Trying Times … (p. 4):
    Here are some suggestions for coping with this rapidly arrived low milk price cycle. #1: Don’t panic.

Dairy Protein Powder Complex: Inventories Heavy, Prices & Demand Weak (p. 5):
    Across the entire array, demand for U.S. dairy protein powders is light. And prices still have not apparently hit bottom.

CME Cheddar Prices Stabilize … for Now (p. 5):
    Of late, cash Cheddar prices at the Chicago Mercantile Exchange have stabilized in the mid- to high $1.50s/lb. That’s good. But some in the industry are expecting further erosion, perhaps significant.

CME Butter Prices Fall, But 11/30/14 Inventories Are Light (p. 5):
    Seasonally, USDA’s Cold Storage report shows relatively light butter inventories as of the end of November -- 100.9 lbs. That’s manageable. Domestic butter sales grew nicely during 2014, but exports dropped sharply in last year’s second half.

Co-ops Fighting Each Other: Mid-East Milk Market War Erupts (p. 6-7):
    Amid a precarious supply balancing problem over the Christmas holidays, DFA was kicked out of Dannon’s Minster, Ohio yogurt plant. Michigan Milk Producers Assn. and Foremost Farms replaced DFA. DFA retaliated, involving access to Mid-East order fluid milk plant access. MMPC is hammering members’ milk checks with big holes in monthly PPDs.

Explaining FMMO PPDs & Dumped Milk (p. 7):
    An anonymous industry dairy figure explains two emerging issues: Producer Price Differentials (PPDs) and dumped milk.

Feature # 2: Clear Horizons Manure Digester: Public Funds Wasted on Huge Fiasco (p. 8-9).
    This amazing article of solid research and reporting by Jim Eichstadt is one of our two “Stories of the Month.” Read it here.

Grass-Based Organic Milk … Much More than Just a Niche (p. 9):
    Paris Reidhead visits Paul and Phyllis van Amburgh, who produce organic, 100% grass-fed milk near Sharon Springs, New York. Paul also works in milk procurement for Maple Hill Creamery – a fast-growing small dairy processor in eastern New York. Brief Description of Maple Hill Creamery (p. 9): Paris Reidhead profiles the history of Maple Hill Creamery, which processes and markets 199% grass, organic milk.

All-Grass/Organic: Paul and Phyllis van Amburgh (p. 11):
    The van Amburghs answer questions about their feeding and breeding programs in their all-grass/organic dairy farm.

New Zealand Facing Declining Moisture Situation (p. 12):
    Writer Ken Rabas reviews current articles from “down under” about rapidly developing dry pasture conditions.

Founder Hamdi Ulukaya’s Position at Chobani Uncertain (p. 13):
    Writer Nate Wilson summarizes what’s being reported about efforts to limit founder Hamdi Ulukaya’s responsibilities at Chobani Yogurt. Ulukaya’s style drove the firm nearly to insolvency earlier in 2014, major newspapers are reporting.

DFA Hitting a Lot of Serious Potholes Lately (p. 14):
    If you believe what’s in The Milkweed, DFA has a whole bunch of serious problems; dumped milk, contaminated product recalls, and the money-losing, new milk powder plant at Fallon, Nevada. Word is that DFA CEO/President “Tricky Rick’ Smith is starting to shoot his generals.

Milk marketing chaos reigns (p. 15):
    Pete Hardin discusses recent ugly events and poses some suggestions about wiser dairy marketing in the future. Example: Trash the notion that milk buyers are obligated to take all the milk in the bulk tank and find a home for it.

Dean Foods to Pocket 30-cent/Gallon Class I Price Drop in Midwest (p. 16):
    We reproduce an internal Dean Foods communication detailing how the firm will not reduce milk prices in January 2015 to customers, despite a 30-cent drop per gallon in raw milk costs. Dean Foods failed to respond to questions posed about the authenticity of the memo and whether the practice was corporate-wide.

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