Current Progressive Dairy digital edition

Do you know a deserving student who is passionate about the dairy industry? Dairy Farmers of America (DFA) is now accepting applications for the DFA Scholarship Program.

Eligible applicants must be enrolled in a two- or four-year accredited college, university or trade school and pursuing a career in the dairy industry. High school seniors planning to enroll at an eligible institution may also apply.

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Members of Cooperatives Working Together (CWT), the dairy farmer-funded self-help program, voted Tuesday to focus the seven year-old program exclusively on building export markets after 2010.

At the annual meeting in Nevada of the National Milk Producers Federation (NMPF) – which manages CWT – CWT’s management committee determined that an export-centered program was the most appropriate course to follow in the future.

This means that CWT will no longer fund any herd retirement rounds, through which CWT member farms are paid to reduce their herds. CWT conducted its 10th and final herd retirement this past summer.

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The objectives of federal milk marketing orders (FMMOs) are to assure consumers of an adequate supply of wholesome milk for beverage purposes and to promote greater producer price stability and orderly marketing, says Bob Cropp, professor emeritus and dairy marketing specialist, University of Wisconsin – Madison. To achieve these objectives, FMMOs use classified pricing and pooling.

Initially, FMMOs had two classes, one for beverage milk called Class I and another for all manufacturing use milk, called Class II. Later, a third class was added for milk used to make soft manufactured products. A fourth class, Class III-A was added in 1993 in some orders for milk used to make butter and nonfat dry milk.

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How much is $13,552,485,816,852? Let’s consider one billion first. One billion seconds ago it was 1959. Now multiply one billion by 13,552 and you have our national debt. But don’t stop there – it is constantly growing. A number that is easier to comprehend is $43,371 – each American’s share of the debt. Why don’t you go ahead and tack it on to your balance sheet?

How did we get here?
In all but four of the last 30 years, our U.S. government has spent more money than it has brought in. The most recent federal budget deficit, fiscal year 2009, was $1.4 trillion – the largest in the history of the U.S. In terms of gross domestic product (GDP), the deficit was 10 percent in 2009 – the highest since World War II. Final numbers are not available for 2010, but the Congressional Budget Office (CBO) estimates it will be around $1.3 trillion.

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With the exception of the spot period for nearby Q4 2010, the forward profit margin outlook for dairy producers is unfortunately poor as negative returns are reflected throughout next year. In our last installment of this margin outlook in July, forward profit margins in 2011 were still projected around a breakeven level through the first half of 2011, although this has since changed as forward values of feed costs and milk have diverged over the past few months.

As of mid-October, profit margins for the first half of 2011 were projected at a loss of around $2.00 per hundredweight (cwt), with losses of about $0.80 per cwt projected in Q3 2011, which we have also started tracking since our last update in July.

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