In the January 25, 2020 issue . . .
CAN THE MUCH-IMPROVED MILK PRICES from the last quarter of 2019 continue into 2020? “The answer depends upon how the level of milk production, milk sales, and dairy exports differ from what happened in 2019,” forecasted the University of Wisconsin’s Bob Cropp.
WHILE CONCERNED about how much cheese prices fell in December, cheese stocks are lower than a year ago and sales are favorable. “If the growth in milk production is no more than 1.5%, cheese sales continue to grow, and exports are higher . . . the price of butter, cheese, and dry whey should all strengthen as we move through the year,” said Cropp.
CLASS III FUTURE CONTRACTS for January to June milk averaged $17.20 in early January trading, up 15 cents from pre-Christmas activity. On the CME, July to December Class III contracts netted $17.60.
PROTEIN OVERTOOK BUTTERFAT in milk checks priced under federal milk marketing order provisions. From 2016 to 2019, butterfat topped its amino-acid counterpart. In December, protein netted $3.6515 per pound, while butterfat was valued at $2.2022. See page 46 for more insight.
COCA-COLA BECAME SOLE OWNER OF FAIRLIFE, having purchased the remaining 57.5% of the company from its joint venture partner Select Milk Producers; a cooperative based in New Mexico.
ITS ULTRA-FILTERED MILK, which debuted in 2014, garnered double-digit sales growth each year since its launch. Just this past year, sales surpassed $500 million, according to Nielsen AMC tracked data.
THE COCA-COLA COMPANY HAS 20 $1 BILLION BRANDS, and fairlife could become the next. That was the projection of Mike Saint John in November 2018. Saint John should know as he was on the team that brought Coca-Cola’s Simply Orange $1 billion brand to the marketplace.
BORDEN’S BANKRUPTCY marks the second time in the past 60 days that a major processor filed for protection to reorganize. Like Dean Foods, Borden was straddled with debt and legacy costs as more than one-fifth of its employees are covered by collective bargaining agreements.
PARALLELS ARE STRIKING: Both companies relied heavily on fluid milk sales, and both entities had very little product innovation in recent years. In 2018, Borden’s sales totaled $1.18 billion, with 3,264 employees, and Dean Foods netted $7.7 billion, with over 15,000 employees.
THERE ARE 262 DAIRY FARMS that directly ship their milk to Borden Dairy, accounting for roughly one-third of the company’s milk. The Dallas-based business secures the remainder of its raw milk from co-ops.
WISCONSIN LOST 10% OF ITS FARMS in the past year due to continued low milk prices and negative margins. The Badger State had 8,110 dairy farms licensed to sell milk in January 2019 and 7,225 in January 2020. Previously, 2001’s 8.3% was the highest percentage of sell-offs.
OF THOSE FARMS SELLING OUT, 167 were Grade B with an attrition rate of 18.9%. There were 651 Grade A herds (9%) that sold out.
In your next issue!
These four farms share how they balance milking cows, processing products, and running a retail store.
The University of Wisconsin-Madison’s “Dairy Brain” project seeks to develop a “Coordinated Innovation Network” to better integrate farm metrics.