DairyProfit Update for April 11, 2012
May California Class 1 prices lower
California’s May Class 1 milk prices declined for the fifth consecutive month, to $16.94/cwt. in the North and $17.21/cwt. in the South. Both are down 27¢ from April 2012 and $3.96 from May 2011.
Through the first five months of 2012, the California Class 1 price averaged $18.03/cwt. (North) and $18.30/cwt. (South), both down $1.00 from the same period in 2011.
The May 2012 federal order Class I base price will be announced April 18.
Yoplait and Danone want a lid on Chobani yogurt sales in Canada
Yogurt companies Yoplait and Danone want to put a lid on yogurt sales in Canada by the top U.S. yogurt maker, Chobani.
According to published reports, Chobani received a one-year test market import permit from Canada’s Minister of International Trade and began selling its popular Greek-style yogurt in 65 Canadian stores last November. The permit allowed Chobani to pay a reduced duty of 5% – rather than a standard dairy import permit of 240% – while in builds a new yogurt plant in Ontario.
The competing dairy processors are fighting the import permit, as well as the permit to build a $76 million yogurt plant, charging it does not work within Canada’s highly-regulated dairy supply management program. Under that program, a dairy company must use and process Canadian milk, or sell its products with the 240% import duty.
In addition, the Dairy Farmers of Ontario adopted policy last fall capping the amount of Canadian milk that can be processed into yogurt, meaning if Chobani builds the plant, it might not have access to the Canadian milk supply.
Feds prefer bio-based
The federal government is making preferential purchasing decisions under USDA's BioPreferred program, designed to emphasize use of bio-based products. Latest additions to the 10,000-item list of designated products include such things as air fresheners and deodorizers, asphalt and tar removers, asphalt restorers, electronic component cleaners, floor coverings (non-carpet), inks, packaging and insulating materials, pneumatic equipment lubricants and wood and concrete stains.
Bio-based products are composed wholly or significantly of biological ingredients. A complete list and detailed description of each BioPreferred designated item, and items for future designation, can be found at www.biopreferred.gov.
MARKETS: Class III futures drop
Today's market closing prices:
Cheddar barrels: unchanged at $1.46/lb.
Cheddar blocks: unchanged at $1.4875/lb.
Butter: unchanged, at $1.4250/lb.
Extra Grade nonfat dry milk: unchanged, at $1.2575/lb.
Grade A nonfat dry milk: unchanged, at $1.2675/lb.
Class III milk: -1¢ to -48¢ through May 2013. Based on current closing prices, the 2012 average is $16.02/cwt.; 2013 average is $16.09/cwt.
Corn futures higher; soy lower
Corn: +1¢ to +3¢/bushel through December 2012. The 2012 average is $5.94/bu.; 2013 average is $5.58/bu.
Soybeans: -3¢ to -6¢ through November 2012. The 2012 average is $14.00/bu.; 2013 average is $13.16/bu.
Soybean meal: -$2.60 to -$4.90 through December 2012. The 2012 average is $376.22/ton; 2013 average is $339.25/ton.