Dairyline: Beef council reaches out to public

Lee Mielke

By LEE MIELKE

For the Capital Press

The California Beef Council has made social media a new priority, according to Shannon Kelley, the group's public relations coordinator. Kelley said that many groups and organizations, including the industry's adversaries, are using social media to get their information to consumers as well as to producers. The CBC thought it was time to join that conversation.

The goal is to "get their story heard," she said. They also respond to misinformation and highlight checkoff-funded tools available to members. She added that the priority started with consumers, but they soon learned that the majority of the Beef Checkoff's Facebook fans were beef producers, so now the Beef Board can reach and educate both consumers and producers.

The latest addition was a producer profile video that features a San Francisco Bay area ranch family. It highlights their environmental efforts and has been an effective tool in reaching consumers as well as beef producers.

The video is also presented at producer meetings, Kelley said, and producers have volunteered to shoot their own videos to tell their story to consumers. The website was revamped and the CBC joined Facebook, Twitter and YouTube. A ranch family has started blogging for the CBC.

"Again this is supposed to be more consumer outreach and it has been," Kelley said. "But this has kind of excited producers to get involved and kind of ignited a little flame." Some are Facebooking beef information, she said, and she suspects that some have even joined Twitter.

Prices

Farm milk prices keep inching higher. The Agriculture Department announced the July Federal order Class III price at $13.74 per hundredweight, up 12 cents from June and $3.77 above July 2009. That pulls the 2010 average to $13.60, up from $10.16 a year ago, and compares to $18.25 in 2008. The Class IV price is $15.75, up 30 cents from June and $5.60 above a year ago.

Looking ahead, Class III futures were trading late Friday morning as follows August $14.93, September $15.42, October $15.05, November $14.82, and December $14.72.

The NASS-surveyed cheese price averaged $1.4567 per pound, up a penny from June. Butter averaged $1.7375, up 14.3 cents. Nonfat dry milk averaged $1.2277, down 3.5 cents, and dry whey averaged 36.41cents, down a half cent.

Cash dairy product prices remain strong, however cheese may be showing a little weakness. The blocks closed the last week of July at $1.6025 per pound, unchanged following six weeks of gain, but 31 3/4-cents above a year ago. Barrel closed at $1.5575, down a quarter-cent on the week, but 29 3/4-cents above a year ago. Six cars of block traded hands on the week and eight of barrel. The lagging NASS-surveyed U.S. average block price gained 6.3 cents, hitting $1.4999. Barrel averaged $1.5110, up 3.4 cents.

Butter gained a penny and a half, closing Friday at $1.8150, up 57 cents from a year ago. Nine cars were sold. NASS butter averaged $1.7713, up 2.8 cents. NASS powder averaged $1.1865, down 4.7 cents, and dry whey averaged 36.21 cents, up 0.1 cent.

Gould news

The University of Wisconsin's Dr. Brian Gould, said it's "quite significant that butter has gained over 15 percent since June 1. There hasn't been a down day at the CME spot price; it's been going up continuously."

He adds that the high butter price has broader implications with respect to the federal pricing system. For example, last Friday the advanced Class I was released and the Class IV was the mover, at $15.77, compared to the advanced Class III of $13.66.

That's more than a $2 difference between the Class IV and Class III, he said, and it has been that way for six of the last eight months.

"It's truly a change in the market conditions due to purely what's going on in the butter side," he said.

He said that it could stay that way for a while with the heat and humidity affecting a large portion of the U.S. "The components are going down a little bit and being allocated to butter because it's so valuable."

The high butter price may bode well for cheese, according to Gould. "Again, the price of cheese may go up a little bit because fewer components are going into the cheese vat."

Gould has a model on his "Understanding Dairy Markets" website -- http://future.aae.wisc.edu -- where current futures market data and a state-specific statistical analysis look at the relationship between the announced Class III and the futures Class III and the mailbox price.

Using last week's end of week Class III futures prices, over the July to December period the U.S. average federal order mailbox is projected to be about $15.76. Wisconsin is $15.93 and California, not surprisingly, at $14.32. "And these are substantially higher than obviously what happened at this time last year," he said.

What's in a name?

It's been said that "a rose by any other name is still a rose," but that doesn't apply to dairy products, according to the National Milk Producers Federation's Chris Galen.

In April, NMPF wrote the Food and Drug Administration asking it to crack down on what NMPF calls the "misbranding of nondairy products that use terms like milk, cheese, or yogurt."

This week, NMPF responded to requests by the 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 the Food and Drug Administration that they really should disallow the use of terms like soy milk, rice yogurt, and so on," Galen said. "Because those are often times things that consumers look at first and the only things they look at when they make a purchasing decision."

He adds that when consumers see plant-based products with milk or yogurt in their name, they assume those products contain similar levels of protein, vitamins and minerals that dairy products do.

"Research shows that imitation products made from plants, vegetables, weeds and seeds don't have the same level of nutrition," Galen said.

Galen said the FDA comment period will take a while to work through, but the federation did receive a letter from the FDA in response to the April petition. It thanked NMPF for their response and said their input would be taken under advisement.

Galen said the FDA didn't quite brush off NMPF but was noncommittal in terms of what it will do.

"We're just going to keep up the drumbeat on this and keep pressure on the federal government, particularly the FDA, because they seem very concerned about how foods are presented, marketed and packaged," Galen said. "The whole issue of whether or not foods have the right names to begin with should be a front and center issue for them."

Cooperatives Working Together

The Cooperatives Working Together program has added butter and anhydrous milkfat to its list of products eligible for export assistance following an evaluation of the competitiveness of these products. A press release cited recent increases in butter at the Chicago Mercantile Exchange.

Four bids were accepted from Dairy Farmers of America and three from Land O'Lakes to export 3.8 million pounds of butter and AMF to Europe, the Caribbean, South America and the Middle East, with delivery from July to November.

CWT also accepted two bids from DFA on 213,848 pounds of cheddar cheese to Europe and Asia, with delivery from August to November. CWT cheese exports total 38.2 million pounds to 23 countries.

Congress

Bills introduced in both the Senate and House this week 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, HR5852. The current law expires Sept. 30.

Foreigners

Believe it or not, the United States may be becoming less attractive as a foreign dairy export market. Dairy Profit Weekly editor Dave Natzke said a USDA Foreign Agricultural Service report, Dairy: World Markets and Trade, says dairy imports both on a fat and skim milk equivalent basis have been declining in recent years.

For example, according to USDA analysts, cheese imports have declined annually since 2003, and, at an estimated 245 million tons in 2010, are about half the 476 million pounds imported seven years ago.

Some of the downturn must be attributed to the economy, but the report indicates the cheese market is becoming increasingly global, and the margin between U.S. and world cheese prices is declining, leading foreign exporters to shift their focus to other markets.

On a skim solids basis, imports are largely accounted for by casein, milk protein concentrates and whey products, according to Natzke. The report notes U.S. production of milk protein concentrates has just started to pick up the pace, and could likely lead to a reduction of imports of those products in the future.

Butter and margarine

Natzke said the ongoing competition between butter and margarine has "another bit of good news for dairy producers."

The Central Milk Marketing Order administrator's office reports U.S. 2009 per capita butter consumption in food products was 5 pounds, unchanged from the year before. Meanwhile, per capita margarine consumption was 3.7 pounds, a decline of about six-tenths of a pound. The butter-to-margarine ratio, at 1.35 pounds of butter for each 1 pound of margarine consumed, is the highest ratio in favor of butter since 1980, Natzke said. It represents a remarkable turnaround since 1990, when butter consumption was less than four-tenths of a pound for each pound of margarine.

Love of cheeseburgers

America loves cheeseburgers, and dairy farmers have impacted that value chain, according to Jim Montel, executive vice president of strategic initiatives for Dairy Management Inc. Talking about the dairy checkoff partnership with McDonald's, he pointed out that cheeseburgers use a large quantity of cheese and reported on McDonald's introduction last year of the Angus burger, which became very popular. Burger King and Wendy's introduced their own comparable sandwiches.

Cheeseburger servings in the last 12 months jumped 9 percent and 2 percent in the total category, Montel said. That translates into about 122 million more pounds of milk in cheese being consumed, he said, and "a great return on investment for our dairy farmers."

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