DairyBusiness

An (almost) daily recap of dairy information:

July 28, 2010

Price reporting bills would add electronic dairy reporting

Bills introduced in both the Senate and House reauthorize daily mandatory livestock price reporting for five years. But probably of even greater interest to dairy producers, the bills instruct the Secretary of Agriculture to establish an electronic price reporting system for dairy products, within one year. Senate Ag Committee chair Blanche Lincoln (D-Ark.) and Ranking Member Saxby Chambliss (R-Ga.) introduced the Senate version; House Ag Committee chair Colin Peterson (D-Minn.) was joined by 19 others in introducing the House version (H. R. 5852). The current law expires Sept. 30, 2010.

Arizona illegal immigrant law blocked

U.S. District Judge Susan Bolton blocked key provisions of an Arizona law targeting illegal immigrants from taking effect on Thursday, citing the likelihood the controversial state law will interfere with the federal government’s authority to set immigration policy. In 36-page ruling issued Wednesday, Bolton granted much of the U.S. Justice Department’s request for a preliminary injunction against the Arizona legislation. Bolton said the most widely publicized provision in the law – a requirement the police determine the immigration status of people they arrest or question – was certain to result in improper, protracted detention of foreigners and U.S. citizens alike.  To read more from Politico.com, click here. To read the federal court decision, click here.

RFA weekly update

The Renewable Fuels Association (RFA) said ethanol production totaled 816,000 barrels per day (b/d), or more than 34.2 million gallons daily, for the week ending July 23, down from 836,000 b/d for the previous week. As a percentage of daily gasoline demand, daily ethanol production represented 8.47%, down from 8.86% the previous week.

On feed and coproducts side, RFA calculates daily ethanol industry demand for corn was 12.373 million bushels.  In addition to fuel ethanol, that corn also produced more than 92,000 metric tons of livestock feed, including more than 81,000 metric tons of distillers grains.

MARKETS:

Barrels slip a quarter-cent

Closing on Wednesday, July 28:

Cheddar barrels – down 0.25¢, to $1.5575/lb.

Cheddar blocks – unchanged, at $1.6025/lb.

Butter – unchanged, at $1.80/lb.

Extra Grade nonfat dry milk – unchanged, at $1.2250/lb.

Grade A nonfat dry milk – unchanged, at $1.21/lb.

Class III milk futures –  monthly Class III contract prices were mostly lower through August 2011.

DAIRYLINE RADIO:

Wednesday: Beef Council

The California Beef Council (CBC) is making social media a new priority, according to Shannon Kelley, PR coordinator. Speaking in Wednesday’s “Beef Board Update,” Kelley said the goal is to “get their story heard,” respond to misinformation, and highlight checkoff-funded tools available to members.

Thursday: NMPF

In April, National Milk Producers Federation (NMPF) wrote the U.S. Food and Drug Administration (FDA), asking it to crack down on what NMPF calls the “misbranding of non-dairy products that use terms like milk, cheese, or yogurt.” This week, NMPF responded to requests by FDA for public input on what types of information should be allowed on the front of packages, including labels and shelf tags when consumers encounter these products in stores.

“We’ve used this as another opportunity to remind (FDA) they really should disallow the use of terms like soy milk, rice yogurt, and so on,” according to NMPF’s Chris Galen said. “Because those are often things that consumers look at first, and the only things they look at when they make a purchasing decision.”

To read their remarks, visit www.dairyline.com under “Today’s Dairy News.” Or, listen to the conversation with DairyLine’s Lee Mielke by clicking on “DairyLine Daily Broadcast.”

Check for daily DPW news updates at www.dairybusiness.com. For a sample copy of Dairy Profit Weekly, or subscription information, visit www.dairyprofit.com or phone: 800-334-1904, ext. 244.

Dave Natzke, Editor

An (almost) daily recap of dairy information:

July 27, 2010

U.S. less attractive foreign dairy export market?

Although the U.S. has long been an attractive market for dairy imports, imports both on a fat and skim milk equivalent basis have been declining in recent years. A new USDA Foreign Ag Service report says it appears the historically attractive price margin created by high U.S. cheese prices (relative to world prices) has diminished, leading foreign exporters to shift their focus to emerging markets. In addition, the U.S. entry into milk protein concentrate production will likely be to the detriment of future imports of MPCs.

Dairy Research Institute formed

Dairy Management Inc. (DMI) and the Innovation Center for U.S. Dairy announced the formation of the Dairy Research Institute, a 501(c)(3) non-profit organization designed to strengthen the dairy industry’s access to and investment in the technical research needed to drive demand for dairy products and ingredients, globally.

Calving oddity

A cow on a United Kingdom dairy – which uses “concoctions” of bull semen during artificial insemination – has given birth to triplets … from two different breeds. The Holstei-Friesian cow delivered two Belgian Blue crossbreds and one Charolais crossbred.

MARKETS:

Another quiet day

Closing on Tuesday, July 27:

Cheddar barrels – unchanged, at $1.56/lb.

Cheddar blocks – unchanged, at $1.6025/lb.

Butter – unchanged, at $1.80/lb.

Extra Grade nonfat dry milk – unchanged, at $1.2250/lb.

Grade A nonfat dry milk – unchanged, at $1.21/lb.

Class III milk futures –  monthly Class III contract prices were mixed in a narrow range through September 2011.

Check for daily DPW news updates at www.dairybusiness.com. For a sample copy of Dairy Profit Weekly, or subscription information, visit www.dairyprofit.com or phone: 800-334-1904, ext. 244.

Dave Natzke, Editor

Designed to  align resources and boost dairy research, the institute is first of its kind to provide industrywide approach to technical research to meet consumer needs

Rosemont, Ill. — Dairy Management Inc.^™ (DMI) and the Innovation Center for U.S. Dairy announced the formation of the Dairy Research Institute^™, a 501(c)(3) non-profit organization designed to strengthen the dairy industry’s access to and investment in the technical research needed to drive demand for dairy products and ingredients, globally.

The institute brings together leadership from across the dairy industry, scientific community, academics, government and other organizations to plan and fund leading-edge dairy research in three key priority areas: nutrition science, product development and sustainability.

“The Dairy Research Institute fulfills a vital need to align our industry’s research efforts to address consumer needs and increase sales,” said Kevin Ponticelli, chair of the Dairy Research Institute Board of Directors and executive vice president of DMI, which manages the national dairy checkoff program on behalf of the nation’s dairy farmers. “In an increasingly competitive marketplace, it is critical that we work together as an industry to increase and manage the industry’s investment in research.”

The launch of the Dairy Research Institute builds upon the unprecedented efforts of dairy producers, processors and manufacturers to work together pre-competitively through the Innovation Center for U.S. Dairy, formed in 2008. The Dairy Research Institute is affiliated with the Innovation Center, and provides a forum for industry to identify major research needs to support dairy industry innovation, and grow dairy sales.

“The U.S. dairy industry has a long history of using science-based research to provide the knowledge, guidance and tools needed to foster innovation and promote the nutrient-rich value of dairy and the industry’s long-standing commitment to environmental stewardship,” said Greg Miller, executive vice president, research, regulatory and scientific affairs for DMI and president of the Dairy Research Institute.  “Through partnerships and a commitment to sound science, we will support the importance of dairy in the diet and the sustainability of the products and ingredients we produce. The dairy industry needs to remain at the forefront of research to meet the challenges of today and those yet to come.”

The Dairy Research Institute builds on the legacy of nutrition and product research conducted by the National Dairy Council since 1915, and will leverage their expertise, as well as other partners, including five dairy research centers at major universities and government agencies, such as the USDA’s Agricultural Research Services and the Department of Defense’s Natick Soldier Center, and other leading scientific, health and nongovernment organizations. The Dairy Research Institute also will coordinate with the International Dairy Foods Association (IDFA), the National Milk Producers Federation, the Milk Processor Education Program, DMI, U.S. Dairy Export Council, Global Dairy Platform, and other industry and non-industry partners.

“The U.S. dairy industry understands the important role research plays in giving consumers the nutritious dairy products they want — when, where and how they want them,” said Connie Tipton, president and chief executive officer, International Dairy Foods Association. “By working together to prioritize, support and share research with stakeholders, we will be better positioned to meet consumer needs, and protect and promote dairy in the marketplace.”

Dairy Research Institute^™ is a 501(c)(3) non-profit organization affiliated with the Innovation Center for U.S. Dairy and was created to strengthen the dairy industry’s access to and investment in the technical research required to drive innovation and demand for dairy products and ingredients, globally. The institute will work with and through industry, academic, government and commercial partners to drive pre-competitive research in nutrition, products and sustainability.

Innovation Center for U.S. Dairy provides a forum for the dairy industry to work together pre-competitively to address barriers and opportunities to foster innovation and increase sales. The Innovation Center aligns the collective resources of the industry to offer consumers nutritious dairy products and ingredients, and promote the health of people, communities, the planet and the industry. The Board of Directors for the Innovation Center represents leaders of 31 key U.S. producer organizations, dairy cooperatives, processors, manufacturers and brands. The Innovation Center is supported and staffed by Dairy Management Inc.^™

About Dairy Management Inc. ™ Dairy Management Inc. (DMI) is the nonprofit domestic and international planning and management organization responsible for increasing sales of and demand for U.S.-produced dairy products and ingredients on behalf of America’s dairy producers. DMI manages the American Dairy Association^®, National Dairy Council^® and U.S. Dairy Export Council^®.

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For more information, contact dairyresearchinstitute@usdairy.com.

An (almost) daily recap of dairy information:

July 26, 2010

CWT expands export assistance program product list

Cooperatives Working Together (CWT) added U.S. butter and anhydrous milkfat (AMF) to those dairy products currently eligible for assistance under the CWT Export Assistance program.

In the past month, the butter price at the Chicago Mercantile Exchange (CME) has moved up to more than 13¢/lb. As a result, U.S. prices of butter and AMF have moved above world prices. Providing export assistance on these two products will allow its members to maintain market share in light of the increase in the U.S. prices, CWT said.

Reaction mixed to GIPSA comment period extension

USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA) extended the comment period, until Nov. 22, on proposed changes covering livestock contracts and marketing arrangements. The extension was praised by the  National Cattlemen’s Beef Association; criticized by The National Farmers Union.

By the numbers: Dairy Consumer Price Index

Overall June 2010 retail dairy product prices were +0.1% compared to May 2010 and +1.9% compared to June 2009, increasing slightly more than the index for all food at home, according to Consumer Price Index (CPI) data released by the Bureau of Labor Statistics.

Checking out individual products (June 2010 vs. May 2010 and June  2009, respectively): fluid milk: +1.8%; +6.0% [whole milk: +3.0%; +8.1%; other milk: +0.8%; +4.8%]; cheese: -0.7%; +0.8%; butter: +0.5%; +5.8%; ice cream: -0.2%; +0.2%%; and “other” dairy products: -1.2%; -1.8%.

MARKETS:

Class III futures up

Closing on Monday, July 26:

Cheddar barrels – unchanged, at $1.56/lb.

Cheddar blocks – unchanged, at $1.6025/lb.

Butter – unchanged, at $1.80/lb.

Extra Grade nonfat dry milk – unchanged, at $1.2250/lb.

Grade A nonfat dry milk – unchanged, at $1.21/lb.

Class III milk futures –  monthly Class III contract prices were higher through June 2011.

INDUSTRY NEWS

ABS Global adds staff

DeLaval hosts ‘profound productivity’ tour in Pennsylvania

Vincel named GM for Select Sire Power, Inc.

New Zealand travel scholarships offered to young Jersey breeders

NEW PRODUCTS

New heavy-duty Kuhn power tillers

Dairyland Seed expands hybrid alfalfa line

Check for daily DPW news updates at www.dairybusiness.com. For a sample copy of Dairy Profit Weekly, or subscription information, visit www.dairyprofit.com or phone: 800-334-1904, ext. 244.

Dave Natzke, Editor

ARLINGTON, VA – Following an economic evaluation of the competitiveness of U.S. butter and anhydrous milkfat (AMF) prices, Cooperatives Working Together (CWT) added these two products to those currently eligible for assistance under the CWT Export Assistance program.

In the past month, the butter price at the CME has moved up to more than 13¢/lb. As a result, the prices of butter and AMF in the U.S. have moved above the world price for these two commodities. Providing export assistance on these two products will allow CWT members to maintain market share in light of the increase in the U.S. price.

Following the decision, CWT accepted four bids from Dairy Farmers of America and three bids from Land O’Lakes for 1,714 metric tons (3.78 million lbs.) of butter and AMF to Europe, the Caribbean, South America and the Middle East. Delivery will take place from July through November.

CWT also accepted two bids from Dairy Farmers of America for 97 metric tons (213,848 lbs.) of cheddar cheese to Europe and Asia. This product will be delivered from August through November 2010.

Since CWT reactivated the Export Assistance program on March 18, 2010, it has assisted members in making export sales of cheddar, Monterey Jack, and Gouda cheese totaling 17,330 metric tons (38.2 million lbs.) to 23 countries on four continents. The totals have been adjusted due to the cancellation of a bid for 38 metric tons of cheese to Africa.

USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA) extended the comment period, until Nov. 22, on proposed changes covering livestock contracts and marketing arrangements.

Last week, more than  20 lawmakers requested a 120-day extension to the comment period, saying the period ended before USDA and the Department of Justice concluded joint workshops on antitrust and competitive issues in agriculture.

GIPSA published the proposed rule in the Federal Register on June 22, 2010 (75 FR 35338). Comments may be submitted via e-mail to comments.gipsa@usda.gov; hard copy via mail, hand delivery, or courier to Tess Butler, GIPSA, USDA, 1400 Independence Avenue, SW, Room 1643-S, Washington, DC 20250-3604; fax to (202) 690-2173; or via the Federal eRulemaking Portal at http://www.regulations.gov.

The National Cattlemen’s Beef Association (NCBA) praised the extension.

“Members of Congress from both sides of the aisle were very clear about the critical need to extend the comment period to allow stakeholders to thoroughly analyze the potential impacts of the rule,” said vice president of government affairs Colin Woodall. “While it’s unfortunate USDA didn’t extend the comment period for a full 120 days as we requested, we’re pleased that stakeholders will have some additional time to further analyze this complex rule and its potential implications on the beef sector, which is the largest segment of the food and fiber industry.

“On the surface, this rule has the potential to take the beef industry back 30 years by stifling the innovative efforts of U.S. cattle producers to add value and enhance the quality and safety of their products for consumers in the United States and abroad,” Woodall continued.

However, the head of the The National Farmers Union (NFU) expressed disappointment.  NFU President Roger Johnson said the 90-day extension was excessive, adding the proposed rule addresses concerns that have been discussed for many years and were developed at the direction of the 2008 Farm Bill.

“Extension of this comment period gives leverage for packers to offer lower prices to producers as a fear mechanism, which we have seen in the past with rules such as Country of Origin Labeling,” said Johnson.

The 2008 Farm Bill stated the rule was to be fully completed by June 18, 2010, another reason NFU is displeased with further extension of the comment period. A 30-day extension would have allowed for plenty of time and included the allowance for comments at the USDA/Department of Justice workshop on the livestock industry in Fort Collins, Colo., to be held Aug. 27.

“This rule is for the protection of the producers and USDA has allowed for a sufficient amount of time to comment,” said Johnson. “Further extending the deadline is proof that USDA is buckling under the pressure of industry. The focus needs to be on the producers. While USDA is taking a step in the right direction with this rule, the process needs to be expedited instead of slowed down.”

Milk quality export paper trail would go all the way back to individual U.S. farms under EU requirements

By Dave Natzke

The U.S. dairy industry has gained some time to discuss and avert a potential disruption of some dairy product exports.

As Eastern DairyBusiness went to press this month, it was unclear how or when the United States would deal with new European Union (EU) dairy product export certificate requirements. Under those requirements, dairy products entering EU countries must be made from milk with less than 400,000 cells/milliliter (cells/ml), certified at the individual farm level. The EU has accepted dairy products made from commingled tankers or silos with less than 400,000 cells/ml since 1997.

The EU Food and Veterinary Office (FVO) announced the requirements in early April 2010, originally setting an Oct. 1, 2010 deadline. However, both the National Milk Producers Federation (NMPF) and U.S. Dairy Export Council (USDEC) asked the U.S. Food and Drug Administration (FDA) to intervene, saying requiring individual farm certification would create hardships for U.S. dairy farmers and processors. Furthermore, NMPF and USDEC said the 400,000 cells/ml standard raises both scientific and World Trade Organization trade questions.

EU and U.S. food and agriculture officials met in early July, agreeing to extend implementation of the revised SCC certificate program to Dec. 1, 2010. Even that, however, is a “soft” deadline, as the EU and U.S. work out details.

Current U.S. standard: 750,000

The current U.S. legal limit for bulk tank SCC, established under the Pasteurized Milk Ordinance, is 750,000 cells/ml. California’s legal SCC limit is 600,000 cells/ml.

By one measure, most U.S. dairy producers already meet the EU standards. Regional and seasonal variations exist, however. Based on latest Dairy Herd Improvement (DHI) herd records, SCC levels fluctuate by geography – presumably related to regional climate – as well as season and, to a lesser extent, herd size.

Somatic cell scores (SCS) of milk are reported to USDA’s Animal Improvement Programs Laboratory as part of an individual cow’s test-day yield information. The test-day data is reported annually for all herds (including owner-sampler herds) enrolled in DHI SCC testing (97% of all DHI herds in 2009).

The SCS are converted back to a milk SCC for calculating herd and state averages. Nationally, average test-day herd SCC during 2009 was 233,000 cells/ml, down 29,000 cells/ml from 2008. Most states (42) had lower average SCC than reported a year earlier; only six states had higher averages.

According to DHI test-day data:

• Highest average annual SCC levels were in Southeast states, where heat and humidity can combine to pose the biggest milk quality management challenges (see Table 1). Nine of the top 10 states with highest 2009 average test days greater than 400,000 cells/ml were in the Southeast. Three states in the region had annual herd test-day averages of more than 400,000 cells/ml for 2009: Alabama, Arkansas and Louisiana.

Although climatic conditions likely contributed to regional SCC differences, differences between adjacent states were substantial, suggesting herd size and mastitis-control practices, including genetic selection, impacted state differences as well, according to the report’s authors.

• As expected, the seasonal pattern for milk quality is shows the biggest challenges in April-July. The highest quality milk is produced in November and December (Table 2).

• Herds of 100 cows or less tended to have a greater number of test days above 400,000 cells/ml (see Table 2). Herds of <200 cows averaged more than 10% of all test days above 400,000 cells/ml.

• The United States has been making progress on lowering average SCC. Annual SCC for test herds averaged above 300,000 between 1995-2003, but fell to 233,000 in 2009. The decline from 2008-09 was the largest annual year-to-year decrease since the downward trend started in 2001-02 (Table 2).

Debate continues

The SCC discussion has been a national debate for at least two decades. The National Conference on Interstate Milk Shipments has tried – and failed – to lower U.S. SCC limits from the current 750,000 cells/ml on several occasions since the mid 1990s.

The argument often used against the lower limits – and one used by NMPF and USDEC against EU’s new requirements – is that SCC between 400,000-750,000 cells/ml do not pose a human health threat, especially since exported dairy products are from pasteurized milk.

In the letter to FDA commissioner Margaret Ann Hamburg, NMPF and USDEC contend the EU standard of 400,000 cells/ml for individual farms is “inappropriate,” and may be motivated more by trade issues than concerns over product quality or safety. Even within its own member countries, the EU enforces acceptance of milk that is “out of compliance” on an individual basis, and differently for products such as cheese aged more than 60 days, the letter states.

The letter states the U.S. dairy industry will discuss the feasibility of a revised EU certification program for SCC testing with FDA and the other relevant agencies, seeking a plan that is viable and non-burdensome for U.S. dairy producers, cooperatives and processors.

What impact on exports?

While the Southeast faces the largest SCC challenges, that area is not currently a major export supplier. USDA’s latest dairy export data shows just one Southeast state – Tennessee – recorded any dairy exports in 2009, and just two – Tennessee and Kentucky – were sources of dairy exports in the past decade. (USDA said about $548 million in dairy exports were “unallocated” in 2009, without a state designated as a source. USDA bases export share estimates on each state’s dairy product production, instead of using data from export shipping locations.)

We know, however, that milk moves much greater distances than in the past, and may move to other regions under federal order balancing. In addition, the EU requirements cover not just primary products, but also byproducts, such as whey. Several processors have already implemented standards meeting EU requirements.

Measurement differences

We’re all aware the U.S. measures length, weight and area using different units than the EU. Turns out there’s also a difference in how SCC is calculated,  too, noted Jeff Reneau, professor of dairy management at the University of Minnesota.

The EU uses the “geometric mean” a calculation made by taking the cube root of the three monthly SCC. In the U.S., the arithmetic mean calculation is normally used. According to Reneau, the geometric mean  reduces the influence of the occasional high SCC spike, yielding a lower number (Table 3).

Another question, Reneau said, is how monthly SCC will be determined. Fewer bulk tank SCC tests are done (bimonthly) in the EU than in the Upper Midwest, for example, where SCC tests are run on every pickup. Therefore, using the single “official” SCC test or some random selection of a single bulk tank SCC test done during any month would be comparable to what is done in the EU.

FYI

■ Read “Somatic cell counts of milk from Dairy Herd Improvement herds during 2009,” at http://aipl.arsusda.gov/publish/dhi/current/sccrpt.htm.

■ Visit the NMC (National Mastitis Council) website,  www.nmconline.org.

The “cow” economy is making a slow recovery. Using USDA’s monthly milk production and price estimates for the first half of 2010, the “average” gross income from milk sales generated by an “average” cow is up about $283/cow from the same period in 2009 (Table 1).

The “average” U.S. cow produced 10,672 lbs. of milk so far in 2010, up about 297 lbs. from January-June 2009. USDA’s preliminary year-to-date 2010 all-milk price is $15.38/cwt., up $3.48/cwt. from 2009. Thus, the “average” cow generated $1,640 in milk sales so far in 2010, compared to $1,357 for the same period in 2009.

Year-to-date 2010 estimated gross income trails the $1,964 generated in the first half of 2008, and $1,704 during the first half of 2007.

Multiply $283 by 9 million cows, and January-June 2010 gross income is up $2.55 billion over the first half of 2009. However, at $24.3 billion, total U.S. 2009 gross income from milk sales was down more than $10 billion compared to 2008’s $34.8 billion.

There’s a $788 spread between the state with the lowest gross milk income per cow so far in 2010 (Missouri, at $1,178) compared to the highest (Florida, at $1,966).

An (almost) daily recap of dairy information:

July 23, 2010

Mid-year dairy cow and heifer count

As of July 1, 2010, there were 9.10 million cows in U.S. herds, about 19,000 more than Jan. 1, 2010, but 100,000 less than July 1, 2009, according to USDA’s semiannual cattle estimate.

Dairy replacement heifers (weighing more than 500 lbs.) were estimated at 4.05 million on July 1, 2010, down 466,000 head from Jan. 1, 2010, but 100,000 more than July 1, 2009.

Based on these estimates, there were 44.5 replacements (>500 lbs.) for every 100 cows in U.S. herds on July 1, 2010. That compares with 49.7 replacements per 100 cows as of Jan. 1, 2010 and 42.9 replacements per 100 cows on July 1, 2009.

USDA’s mid-year cattle estimate is less extensive than the Jan. 1 report, and does not include individual state information. Historically, as illustrated by Table 1, the mid-year estimate also reports fewer heifers as a percentage of cows than the Jan. 1 estimate.

Dairy proposal economic analysis release to be delayed

Julie Walker, AgriVoice Enterprises, reported  a dairy coalition meeting was held July 20-21, in Chicago, to review economic models of various “dairy stabilization” proposals. The grade: incomplete. The group will schedule another meeting in early September for a final review, and then release results.

By the numbers

The August 2010 federal order Class I base milk price is $15.77/cwt., up 11¢ from June 2010 and $5.73 more than August 2009. USDA’s National Ag Statistics Service estimated 214,200 culled dairy cows were slaughtered under federal inspection in June 2010, up about 5,100 head from May 2010, but 41,800 head less than June 2009.

MARKETS:

(Fairly) steady as she goes

Closing on Friday, July 23:

Cheddar barrels – unchanged, at $1.56/lb.

Cheddar blocks – unchanged, at $1.6025/lb.

Butter – unchanged, at $1.80/lb.

Extra Grade nonfat dry milk – unchanged, at $1.2250/lb.

Grade A nonfat dry milk – down 0.75¢, to $1.21/lb.

Class III milk futures –  monthly Class III contract prices were slightly higher through June 2011.

The week in review

All eyes waited to see how cash dairy markets would react to the bearish June milk production report, according to DairyLine Radio’s Lee Mielke. The response:

• Cheese prices continued to move higher for a sixth consecutive week. CME cheddar blocks closed Friday at $1.6025/lb., up 2.75¢ on the week and 40.25¢ more than the corresponding week a year ago. CME cheddar barrels closed at $1.56/lb., up 3.5¢ on the week and 39¢ more than a year ago. Six cars of blocks traded hands on the week; eight of barrels.

• Cash butter closed Friday at $1.80/lb., up 2.5¢ on the week and 54¢ more than the corresponding week a year ago. Butter has also increased for six weeks in a row. Only one car was sold all week.

• Cash Grade A nonfat dry milk closed Friday at $1.21/lb., down 0.75¢ on the week; Extra Grade held all week at $1.2250/lb.

DAIRYLINE RADIO:

Monday: DMI Update

America loves cheeseburgers, and dairy farmers have impacted the value chain, according to Jim Montel, executive vice president of strategic initiatives for Dairy Management Inc. He talks about the dairy checkoff’s partnership with McDonalds in Monday’s “DMI Update,” noting the restaurant chain’s introduction of cheesy Angus burgers has spurred competition at Burger King and Wendy’s.

To read Montel’s remarks, visit www.dairyline.com under “Today’s Dairy News.” Or, listen to the conversation with DairyLine’s Lee Mielke by clicking on “DairyLine Daily Broadcast.”

Check for daily DPW news updates at www.dairybusiness.com. For a sample copy of Dairy Profit Weekly, or subscription information, visit www.dairyprofit.com or phone: 800-334-1904, ext. 244.

Dave Natzke, Editor

This week in Dairy Profit Weekly:

1) June milk output: June 2010 milk production in the 23 major dairy states totaled 15.2 billion lbs., up 2.7% from June 2009. Cow numbers in those states were estimated at 8.347 million head, 87,000 head less than June 2009, but 10,000 more than May 2010.

2) Cow earning power up a little: The “cow” economy is making a slow recovery. The “average” gross income from milk sales generated by an “average” cow is up about $283/cow in the first half of 2010 compared to the same period in 2009, but trails 2008 and 2007.

3) DPW Trends: The August 2010 federal order Class I base milk price is $15.77/cwt., up 11¢ from June 2010 and $5.73 more than August 2009. USDA’s National Ag Statistics Service estimated 214,200 culled dairy cows were slaughtered under federal inspection in June 2010, up about 5,100 head from May 2010, but 41,800 head less than June 2009.

4) DPW Industry: A study presented at the School Nutrition Association Annual National Conference reveals eliminating chocolate and other flavored milks from school cafeteria menus resulted in a 35% drop in milk consumption.

5) DPW Washington: The U.S. dairy industry has apparently gained some time to avert a potential disruption of some dairy product exports to the European Union (EU). Dairy products entering EU countries must be made from milk with somatic cell counts less than 400,000 cells/milliliter (cells/ml), a provision in place since 1997. However, the new standards require certification of those SCC levels at the individual farm level.

Later: The National Agricultural Statistics Service’s mid-year Cattle inventory report was released July 23 (after Dairy Profit Weekly’s press deadline). Of special interest, inventories of dairy replacement heifers. Check for daily Dairy Profit Weekly news updates at www.dairybusiness.com.

Dave Natzke, Editor

For a sample copy of Dairy Profit Weekly, or subscription information, visit www.dairyprofit.com or phone: 800-334-1904, ext. 244.