It’ll be a long winter for dairy producer margins
By Dave Natzke
Milk market watchers predicted dairy producer economics would be scary in the first half of 2011. The shadow appeared early. Dig in, dairy groundhogs.
December 2010 federal and California order prices for manufacturing classes of milk were all down from November, and January 2011 Class I & 1 prices were also lower than the month before. Declining milk prices, combined with higher feed prices, pushed the December 2010 milk-feed price ratio to its lowest level since August 2009. At 1.97, the preliminary ratio is down from November’s revised estimate of 2.23, and compares to 2.42 in December 2009.
The monthly milk-feed price index, an indicator of milk income relative to feed costs, represents the pounds of 16% mixed dairy feed equal in value to 1 lb. of whole milk. December’s ratio was the 37th straight month below 3.0.
The 2010 average index was 2.26, the highest in three years. However, even though 2010 milk prices will end up 20%-25% higher than 2009, the end-of-year trends will carry into the start of 2011.
With that economic shadow as a backdrop, USDA’s Dairy Industry Advisory Committee (DIAC) was preparing to meet, Jan. 11-12, to finalize dairy policy recommendations to U.S. Ag Secretary Tom Vilsack.
Preliminary recommendations were voted on in December, and the stickiest issues did not draw a consensus. The committee voted on and accepted approximately 20 recommendations for policy changes. According to reports, they narrowly recommended all states be mandated to adopt California’s higher standards for milk solids, and approved a proposal to implement a mandated “growth management” program.
Among other proposals receiving greater approval, DIAC recommended stricter somatic cell count standards; federal order reform, including consideration of the elimination of end-product pricing; improved risk management products; adoption of farm savings accounts, modifications to the Milk Income Loss Contract program; and possible elimination of the Dairy Product Price Support Program.
Final recommendations will be posted at www.fsa.usda.gov/DIAC. Whether these recommendations add sunshine to the dairy plank of a 2012 Farm Bill rests in the political process.
A new year brought staff changes to DairyBusiness Communications.
Cliff Passino, national accounts manager, was named publisher of Western DairyBusiness and Eastern DairyBusiness magazines. In his new role, Passino will manage operations of the two magazines, as well as DairyLine Radio Network and DairyProfit Weekly newsletter, related web sites and electronic products.
He joined the company in 1998, working first at HolsteinWorld, before joining the DairyBusiness magazines’ marketing staff. He previously held marketing and field positions with Holstein Association USA, and worked on a large dairy in New Mexico. He’ll continue to work from a satellite office in Vermont.
Karen Knutsen was named publisher of HolsteinWorld magazine, adding to her current role as editor. She will manage operations of the monthly magazine and extensive Internet operations, which serve nearly 10,000 print subscribers and about 40,000 website visitors each month.
Knutsen joined the HolsteinWorld staff in 2002, becoming editor three years later. Raised on a Maryland Holstein farm, she earned a degree in animal science from the University of Delaware. She previously held a number of communications positions with leading AI firms. She is based in the East Syracuse, N.Y. office.
Finally, Susan Harlow, a member of DairyBusiness Communications staff since 1999, accepted a position as senior writer/editor at Antioch University New England, in New Hampshire, effective in early January 2011. Most recently, Susan served as associate editor for Eastern DairyBusiness and Dairy Profit Weekly.
Harlow departs on a high note. For the sixth time in her career, she recently received a Harold L. “Cap Creal” Journalism Award, presented by the New York State Agricultural Society and Cornell’s Alpha Gamma Rho fraternity. Her winning article, “Green for Green: Funding the Power of Digesters,” was published in the February 2010 issue of Eastern DairyBusiness. The award was created in 1978 to foster more coverage of the positive aspects of agriculture in New York state.
One final addition of note to the DairyBusiness Communications’ family. DairyLine Radio welcomed Dr. Mike Hutjens as a weekly contributor to its radio program. Hutjens is Extension specialist with the Dairy Department of Animal Sciences at the University of Illinois at Urbana-Champaign.
Well-known in the dairy industry, Hutjens has spoken at conferences in 46 states and 18 countries, sharing his knowledge and special TMR of humor. Hutjens’ “Feed Facts” segment will be broadcast every Friday on DairyLine Radio. Broadcast stations and times are available at www.dairyline.com.
• To offer your own opinion or response, e-mail Dave Natzke, national editorial director, DairyBusiness Communications, e-mail: email@example.com.