By LEE MIELKE

For the Capital Press

The Agriculture Department's latest Dairy Products report put July butter production at 111.6 million pounds, down 13.9 million pounds or 11 percent from June and 2.6 million pounds or 2.2 percent below July 2008.

Nonfat dry milk output amounted to 132.2 million pounds, down 11.9 million or 8.3 percent from June, and 2.7 million or 2 percent below a year ago.

Mozzarella cheese output totaled 273.6 million pounds, up 3.8 million pounds or 1.4 percent from June, and 12.1 million or 4.6 percent above a year ago. Total Italian-type cheese, at 347.9 million pounds, was up 3.5 million pounds or 1 percent from June, and 10.6 million or 3.1 percent above a year ago.

Cheddar production totaled 267.1 million pounds, down 5.9 pounds or 2.1 percent from June, but up 1.9 million pounds or 0.7 percent from a year ago.

American-type cheese amounted to 352.2 million pounds, down 1.2 million pounds or 0.3 percent from June, but up 10.3 or 3 percent from a year ago.

Total cheese output came to 839 million pounds, up 4.8 million pounds or 0.6 percent from June, and 16.8 million or 2.0 percent above a year ago.

The report should give the cheese market some comfort on the price side, according to market analyst Mary Ledman, principal of Keough, Ledman and Associates Inc. in Libertyville, Ill.

Ledman said some dairy product categories are growing at a less rapid rate, and other products that had surplus production, such as nonfat dry milk, were down almost 10 percent from a year ago.

She pointed out that California production of nonfat powder was up 2.7 percent, despite their milk production being down 5 percent. California is putting milk into powder instead of cheese, she said. Total cheese output was down 4.5 percent, driven by a 4.4 million pound decline in American cheese alone.

But this was offset by gains in virtually every other state that reports American cheese production numbers, in particular Wisconsin, where output was up 3.4 million pounds and Idaho was up 3.1 million pounds.

Butter production was also down seasonally, 14 percent nationwide, but it was also down versus July 2008 and 2007, Ledman said. She believes that could help boost the butter market from its current low.

Congressional talk about raising price supports again on cheese also came up.

"It's hard to know if it's doing anything because, when it comes to cheese, we really don't sell cheese to the government under the support program," Ledman said.

There are other "rumblings" that may be having an impact, Ledman said. The $350 million that Vermont Sen. Bernie Sanders put into the appropriations bill could possibly be used instead to make dairy product purchases or change MILC -- Milk Income Loss Contract -- payments to producers, she said.

"Nobody really has a good idea what these market-distorting impacts will do but we can be assured they will have unintended consequences," Ledman said.

The National Milk Producers Federation has called for that $350 million to go toward buying and donating cheese to needy Americans. A federation analysis stated that would enhance struggling dairy farmer income by $1.3 billion over several months.

Forecasts

The 2009 and 2010 milk production forecasts in the latest USDA World Agricultural Supply and Demand Estimates report are up due to an increase in forecasted milk per cow.

"Lower feed costs and plentiful supplies of alfalfa hay into 2010 are expected to support increased feeding of higher-quality rations," the report stated.

Imports for 2009 were raised as fat-based product imports have been stronger than expected. The commercial export forecast for 2009 was raised as cheese shipments have been firm. Net removals were adjusted to reflect lower expected sales to the CCC in 2009.

Class III and IV price forecasts were reduced for 2009 due to weaker butter and whey prices. Cheese and nonfat dry milk prices were unchanged. The Class III price forecast for 2009 is now projected at $10.65-$10.85 per hundredweight, down a nickel from last month's estimate, and the 2010 range was unchanged at $13.75-$14.75. The 2008 average was $17.44.

The Class IV price was reduced due to lower butter and nonfat dry milk prices. Look for a 2009 average of $10.10-$10.40, down a nickel from a month ago, and the 2010 average is now projected at $11.95-$13.05, down from the $12.10-$13.20 projected a month ago. The 2008 Class IV average was $14.65.

Milk price

California's October Class I milk price is $13.75 per hundredweight for Northern California and $14.02 for Southern California. Both are up 54 cents from September but $4.48 below October 2008. The Federal Order Class I base price will be announced Sept. 18.

Welfare

Animal welfare is a growing concern among consumers and has prompted the livestock industry to respond. One of those initiatives was the topic of discussion this week at the annual meeting of the Association of Bovine Practitioners.

National Milk's Chris Galen was there and said that veterinarians, especially those who deal with bovines, are much more concerned about animal welfare issues than they were 10 or 20 years ago. While they have a client relationship with producers, they also have a responsibility for the overall welfare of the cows.

Galen outlined the federation's new Farmers Assuring Responsible Management program, which is designed to provide assurances to the dairy marketing chain of the well-being of the animals involved in the dairy industry.

Galen discussed the FARM guidelines, which are still being finalized, and used them to walk through a typical dairy, which was the research farm at the University of Nebraska. This farm has about 150 head, he said, with some in tie stalls, some in free stalls, and they use different management practices so the care guidelines were used to show how various farms might be evaluated.

The issue is being driven by consumer concern over animal welfare and is something that won't go away, Galen warned. He said there are other similar programs being formulated.

"Everything we've heard from the retail chain is that they are aware of consumer concern over where food comes from, who produces it and the conditions under which animals are kept," he said.

Because of ballot initiatives in the Midwest and Proposition 2 in California, Galen said National Milk's program is designed to be proactive to "play some offense and get out in front of these regulatory initiatives."

Beef Board update

Sulphur Springs, Texas, dairy, beef, and hay producer Don Smith talked about how important it is for dairy and beef producers to know and trust that their checkoff investment is being managed wisely, both at the local level and at the national level.

The program originates at the grass-roots level, he said, and producers have input on how the money is spent. Checkoff funding goes to research and promotion to develop new markets. Dairy farmers contribute to the Beef Checkoff whenever they sell a baby calf, a cow or a heifer. About 20 percent of the U.S. beef supply is from dairy animals.

It's important dairy producers know how their money is spent and why it's being spent, according to Smith. A key reason is so consumers know they're buying a safe, nutritious product. Checkoff funded programs also teach farmers to safely give vaccinations and use medications and it all goes to ensure consumer confidence in beef products.

"The higher that confidence, the higher the demand is. And the higher the demand is, the higher the price will get for our calves and our cows," he said.

Dairy checkoff

Dairy Management Inc.'s Stan Erwine looked at the dairy checkoff's "Telling Your Story" program. The specific part of that program this week was titled "Capture the Crowd," whose goal is to equip dairy producers with the skills to present their message.

There are three other parts to "Telling Your Story:"

* "Connect with Your Community," which is public relations training 101.

* "Control the Questions," which is media training.

* "Dairy Social Media," which is about using Facebook, You Tube and blogs to communicate to consumers.

The "Capture the Crowd" program gives training to dairy farmers to talk to community groups at schools or church or even city or county zoning commissions, Erwine said.

Erwine admitted that public speaking is not everyone's forte.

"These basic training schools help prepare and give the basic skills to anyone to tell their story," he said.

"Farmers are the dairy experts," he concluded, "They know the dairy business better than anyone else. We just give them the tools to tell that story, whether it's with a Power Point or in a fashion that is memorable to a group."

Lee Mielke is a syndicated columnist and farm broadcaster based in Lynden, Wash. For more Dairyline go to www.capitalpress.com and click on "Dairy."

 

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