The Northeast Dairy Leadership Team met in Binghamton, NY on June 2-3.
One of the presentations was by Dr. Scott Brown of the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri. Dr. Brown presented an analysis of the effect of the CWT program. He estimated that, not counting the CWT herd retirement currently in process, CWT increased the price paid to dairy farmers by an average of approximately $0.66/cwt each year for the period 2004-2008, and he estimated the effect for 2009 to be $0.71/cwt. Some in the audience questioned CWT's continuing effectiveness because markets seem to have adjusted. In other words, the program seems to have a greater effect when it is a surprise. Are farmers stocking up on heifers because they now expect CWT? Click here for Dr. Brown's full presentation.
Another presentation was by Andrei Mikhalevsky of Fonterra, the New Zealand dairy cooperative. Fonterra does business in 140 countries, and so has a good view of world dairy markets. About a year ago, Fonterra launched globalDairyTrade, an Internet-based electronic trading system for commodity dairy products. Currently whole milk powder (WMP) is traded. The Latest Results page shows the results of the latest auction, as well as graphs of WMP prices for the past few years. The surge in world prices in 2007 into early 2008 is obvious. Mr. Mikhalevsky said that Fonterra does not expect world dairy prices to recover before next spring. He also noted that the U.S. and New Zealand would make good partners in the world dairy markets, because their flush seasons come at different times of the year (since one is in the Northern Hemisphere and one is in the Southern Hemisphere). Fonterra sells more than just commodity dairy products; one item that surprised some members of the audience was that Fonterra has developed premium markets in Asia for colostrum. Click here for Mr. Mikhalevsky's full presentation.
Rob Vandenheuvel, General Manager of the Milk Producers Council in Chino, California, spoke to the group about the Growth Management Plan. (Mr. Vandenheuvel was also a presenter at the Northeast Dairy Summit in March.) The GMP deserves a post of its own.
Click here for all of the presentations at the June NEDLT meeting.
