As printed in our January 10, 2017 issue . . .
TWO CO-OPS PLAN TO MERGE and form the nation’s No. 12 dairy cooperative when ranked by member milk. Under terms of the agreement, Prairie Farms of Carlinville, Ill., would merge the assets of Swiss Valley Farms, Davenport, Iowa, into Prairie Farms Dairy Inc. When combined, the co-op would have 1,141 members and 2.9 billion pounds of milk.
IT WOULD BECOME THE NO. 8 dairy processor with 2015 sales of $3.2 billion, according to Dairy Foods’ business research. In all, Prairie Farms has 35 plants in 13 states with $2.8 billion in sales while Swiss Valley has five plants in three states with $373 million in revenue.
ALREADY APPROVED by the board of directors, the merger still requires a member vote. If approved, the deal would close in mid-2017.
FUTURES IMPROVED dramatically over a 50-day trading window as the average January to June Class III contracts moved from $16.05 to $17.20. Contracts ranged from January’s $16.62 to June’s $17.58 per cwt. at the CME in trading that concluded near Christmas.
USDA FORECASTS MIRRORED the uptick in trading activity by raising the 2017 All-Milk price forecast by $1.25 per cwt. in the past two months. Economists pegged a $17.25 average with a range of $16.85 to $17.65.
U.S. DAIRY EXPORTS CLIMBED to the highest level in 16 months in October. Overall export value was $426 million, up 5 percent from depressed levels of a year ago. October exports represented 14 percent of U.S. production while imports fell to 3.4 percent, the lowest since April.
COMPETITIVE HEADWINDS still blow on the export front, based primarily on the strengthening U.S. dollar. Compared to 2014, an overseas customer would have to pay 26 percent more for U.S. dollars for the same amount of cheese when compared to the Euro.
EVEN SO, EXPORTS COULD GROW as USDA projected a 2 percent growth in 2017 cheese exports and 6 percent for nonfat dry milk and skim milk powder. While butter exports could be down, domestic demand grew 4 percent in 2016 and could grow 8 percent this year.
THE MILK SPIGOT CONTINUED TO FLOW as October milk grew 2.4 percent over last year. Among the top dairy states, California grew 0.2 percent; Wisconsin, 2.2; New York, 4.4; Idaho, 3.6; and Texas, 11.4.
CALIFORNIA’S PROPOSAL to join the Federal Milk Marketing Order system should be released by USDA during the first quarter of 2017. Once available, dairy farmers, processors, and other industry specialists will have the opportunity to provide input and suggest changes.
LIKE BUTTER, WHOLE MILK continued its rebound with sales being up 4.6 percent and accounted for one-third of all beverage milk sales.
In your January 25, 2017 issue . . .
ORGANIC DAIRYING IS THEIR SPECIALTY. In our fourth Round Table of the season, dairy farmers from Idaho, New Mexico, New York, and Wisconsin share how organic dairying works for them.
PLAY SHERLOCK HOLMES. When a cow dies, it benefits the rest of the herd to determine the cause of death.
LET’S END THE FEED VERSUS FOOD DEBATE. Cows are incredible recyclers because of a unique digestive tract that allows them to utilize feed humans cannot or will not eat.
