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Weekly Digest: Wisconsin herd numbers continue to drop

Progressive Dairyman Editor Dave Natzke Published on 10 April 2018

Digest Highlights: Wisconsin dairy herds continue to drop. March California, FMMO milk prices improve a little. NMPF targets maker of pea ‘milk.’ Find a summary of this and other news here.

Wisconsin dairy herds decline

Statistically, winter is tough on Wisconsin dairy farms. With dairy economic conditions heading south in 2018, that was especially true this year.

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As of April 1, 2018, there were 8,649 Grade A and Grade B dairies licensed in Wisconsin, 70 less than a month earlier, and down 587 (5.7 percent) from April 1, 2017. The number of licensed dairies is now down 952 (about 10 percent) in two years.

Wisconsin dairy herds declined by 152 between January-April 2018, equaling the attrition rate for the same period in 2015. Dairy herd dispersals can’t all be attributed to milk prices, however. About 205 herds ceased production between January-April 2014, a year of high milk prices.

The Wisconsin ag department’s division of food safety provides monthly data on dairies licensed to sell milk commercially in the state. The data does not differentiate whether a dairy left the business or combined with another dairy to form a larger one.

California 4a, 4b prices improve a little

California’s March 2018 Class 4a (butter) and 4b (cheese) milk prices improved somewhat, but first-quarter 2018 averages were well below levels a year earlier.

The March Class 4a price is $13.01 per hundredweight (cwt), up 29 cents from February but 95 cents less than March 2017. The first-quarter 2018 average stands at $12.89 per cwt compared to $15.01 per cwt a year ago.

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The March 4b price is $13.96 per cwt, up 59 cents from February and 20 cents higher than March 2017. The first-quarter 2018 average stands at $13.57 per cwt compared to $15.19 per cwt a year ago.

March Class III, IV prices show improvement

2018 federal order Class III and Class IV milk prices rose, but that’s not saying much.

The March Class III price is $14.22 per cwt, up 82 cents from February but $1.59 less than March 2017. Through the first quarter of 2018, the Class III price average stands at $13.87 per cwt, down $2.61 from the same period a year earlier.

The March Class IV price is $13.04 per cwt, up 17 cents from February but $1.28 less than March a year ago. Through the first quarter of 2018, the Class IV price average is $13.01 per cwt, down $2.35 from the same period a year earlier.

Margins ended March weaker

Dairy margins deteriorated over the second half of March as a result of higher projected feed costs, according to Commodity & Ingredient Hedging LLC. Milk values were mostly steady.

Nearby margins remain negative and well below average, moving near breakeven beyond that through early 2019.

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The monthly Cold Storage report was deemed a bit bearish, with builds for cheese and butter stocks exceeding long-term trend averages for this time of year.

Both corn and soybean meal spiked sharply in response to the Prospective Plantings report, with acreage estimated well below trade expectations.

Global Dairy Trade index slips

Global Dairy Trade (GDT) dairy product prices were mixed in the auction held April 3, with the overall index down 0.6 percent. Among major products, prices were higher for cheddar cheese [up 2.2 percent, to $3,679 per metric ton (MT)], butter [up 4.1 percent, to $5,494 per MT] and whole milk powder [up 1.6 percent, to $3,278 per MT].

The price for skim milk powder was down 1.8 percent, to $1,849 per MT.

The next GDT auction is April 17.

NMPF urges FDA enforcement action against pea powder-based beverage

The National Milk Producers Federation (NMPF) has urged U.S. Food and Drug Administration (FDA) action against Bolthouse Farms’ pea powder-based beverage.

In a letter to the FDA, NMPF criticized both Campbell Foods and its California-based Bolthouse brand for the prominent use of the word “MILK” on the center of its package. According to NMPF, Bolthouse violates federal regulations by inaccurately labeling its product as milk and ignoring FDA standards of identity that make clear milk and other dairy products must be sourced from animals, not plants.

In the fall of 2016, NMPF and the International Dairy Foods Association (IDFA) contacted Campbell Foods before the launch of the beverage, telling the company’s general counsel that the product did not adhere to federal standards of identity for dairy foods and therefore should not be labeled as milk.  end mark

Dave Natzke
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