DHM Markets/Marketers: CWT, COP, DFA & Sustainability

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April 29: Blocks lower

Daily Cash Trading on Tuesday, April 29, 2014

 

 

CLOSE

CHANGE

 

($/lb.)

(¢/lb.)

CHEESE  BARRELS

2.1700

n.c.

CHEESE  40# BLOCKS

2.1700

-3.00

NFDM  GRADE A

1.8000

-0.50

BUTTER  GRADE AA

1.9100

n.c.

 

CWT assists with 7.3 million lbs. of cheese, butter and WMP export sales

Cooperatives Working Together (CWT) accepted 26 requests for export assistance to to sell 873,031 lbs. of cheddar, Gouda and Monterey Jack cheese, 3.748 million lbs. of 82% butter and 2.668 million lbs. of whole milk powder (WMP) to customers in Asia, Africa, Central and South American, Europe, the Middle East, and North Africa.

Bids were accepted from Bongards Creameries, Dairy Farmers of America, Foremost Farms, Michigan Milk Producers Association and United Dairymen of Arizona  The product will be delivered April through October 2014.

Year-to-date, CWT has assisted member cooperatives in selling 47.203 million lbs. of cheese, 42.085 million lbs. of butter and 7.809 million lbs. of whole milk powder to 33 countries on six continents. These sales are the equivalent of 1.420 billion lbs. of milk on a milkfat basis.

 

U.S., monthly dairy costs of production per cwt of milk sold, 2014

Item

January

February

March

Feed costs

13.26

13.25

13.54

Operating costs/1

16.46

16.41

16.64

Allocated overhead/2

8.43

8.28

8.19

Total costs

24.89

24.70

24.83

1/ includes feed; 2/ includes labor

 

 

Source: USDA Economic Research Service

 

 

March COP up slightly

Preliminary total average feed costs rose slightly, reaching the highest total since October 2013 and raising the national average cost to produce milk in March 2014, according to USDA’s monthly Milk Cost of Production report. USDA cost estimates are based on total farm costs per hundredweight of milk sold.

Total feed costs averaged $13.54/cwt., up 29¢/cwt. from revised February 2014 estimates. (March 2013 estimates were not available due to budget sequestration.) Purchased feed costs, at $7.64/cwt., were up 14¢ from February. It marked the highest purchased feed costs since October 2013. Homegrown feed cost were up 15¢/cwt., to $5.76/cwt., the highest since December 2013.

Feed represented about 55% of total costs in March 2014.

Total costs, at $24.83/cwt. in March 2014, were up 138¢ from February.

Other than feed, there were minimal changes in other operating and allocated overhead costs compared to previous months, and almost all were slightly lower. Leading decliners were fuel/electricity, labor and capital recovery costs on machinery and equipment.

 

DFA cited for ‘sustainability’ efforts

Dairy Farmers of America (DFA) was recognized as a leader in sustainability efforts at Walmart’s first Sustainability Product Expo, Apr. 29, in Rogers, Ark. During the event, Rick Smith, DFA’s president and chief executive officer, participated in a panel discussing sustainable agriculture and building more efficient supply chains. Executives from Cargill and Monsanto joined Smith on the panel.

The expo brought together representatives from organizations that are recognized as leading the way in sustainability efforts. Additional panels included executives from well-known brands such as Pepsi, General Mills, Campbell Soup Company and Kellogg’s. The sessions were moderated by Doug McMillon, Walmart’s president and chief executive officer.

As a panelist, Smith described how DFA is committed to sustainability, from its nearly 15,000 farmer-owners across the country to the cooperative’s 33 manufacturing facilities that produce dairy ingredients and branded retail products.

Smith stated that it is part of DFA’s core strategy to make it easier and more profitable for members to farm, and that the cooperative supports those efforts by providing farm services and evaluations of on-farm practices with the Gold Standard Dairy Program.

“Our program allows us to align with industry efforts such as National Milk Producers Federation’s Farmers Assuring Responsible Management (FARM) program and the stewardship measurement efforts undertaken by the Innovation Center for U.S. Dairy,” said Smith. “In addition, we have an internal program that allows us to work closely with customers on efforts aligned to their needs.”

The panelists joined Walmart in a pledge to work together to build a more sustainable supply chain. This was supported by each business’s own pledge, including DFA’s, which stated: From farm to table, Dairy Farmers of America’s farmer-owners and employees are committed to producing safe, quality and wholesome dairy products through integrity-based, sustainable practices. We have a moral obligation to feed the world, and we are dedicated to ensuring our members are able to fulfill that obligation for generations to come.

Toward that obligation, we will have more than 90% of our nearly 9,000 member farms participating in our Gold Standard Dairy program, or similar efforts toward optimization, by 2020, Smith noted.



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