The Milk Producer - January 2009 - (Page 36)

Jan MarketsEngNEW:New Template 12/23/2008 11:06 AM Page 1 MARKETS Price increase set for Feb. 1 ook for an overall blend price increase Feb. 1 of just under two per cent or $1.43 per hectolitre at average Ontario milk composition. The estimated increase is based on fluid and industrial price adjustments announced in December. The P5 fluid formula indicated a Class 1 price increase of $3.04 per hL or 3.4 per cent, Dairy Farmers of Ontario senior policy adviser Phil Cairns has calculated. This formula comprises weightings of 30 per cent consumer price index, 40 per cent producer cash costs and 30 per cent personal disposable income. The Western pool is also using this formula. British Columbia, Alberta and Saskatchewan adopted it last October. Manitoba is aligning its L prices with the other three provinces in February. The agreement on the P5 fluid formula calls for a review after the Feb. 1 price adjustment. Since producers across Canada have expressed some desire to co-ordinate pricing nationally, a joint committee of the two pools—with representation for all the provinces—has been struck. This committee is looking at ways to harmonize fluid pricing in both pools. The industrial price increase announced by the Canadian Dairy Commission (CDC) amounts to 74 cents per hL, or one per cent, Cairns estimates. That includes two cents per hL the CDC will collect to pay for normal butter stock storage. “Our data show Canadian dairy producers’ revenues are lagging behind the increase we saw in the cost of feed, fuel and fertilizers for most of 2008,” said CDC chair Randy Williamson in announcing the adjustment. The CDC uses a national cost of production study as one factor to determine price adjustments. It also consults with dairy producers, processors, further processors, retailers, restaurateurs and consumers. CDC commissioners then decide on butter and skim milk powder support prices. Provincial milk marketing authorities use those prices to calculate returns to producers in various classes. Future industrial milk pricing remains unclear. The CDC has been P5 and Western Milk Pool blend prices* The graph below shows the 12-month blend price for the P5 provinces and the Western Milk Pool (WMP). *There is a two month lag reporting these figures. Solids non-fat to butterfat (SNF-BF) ratio This graph shows Ontario’s SNF-BF ratio for the last 12 months in relation to Ontario’s target SNF-BF ratio of 2.2840. 2.45 74 72 70 68 66 64 P5 $70.52 WMP $71.43 2.4 SNF-BF Ratio 2.35 2.3 2.25 2.2 2.15 2.2446 Blend price in $/hL Nov 2007 Dec 2007 Jan 2008 Feb 2008 Mar 2008 Apr 2008 May 2008 June 2008 July 2008 Aug 2008 Sept 2008 Oct 2008 P5 blend price WMP blend price Ontario’s SNF-BF ratio 36 | January 2009 | MilkPRODUCER Dec 2007 Jan 2008 Feb 2008 Mar 2008 Apr 2008 May 2008 June 2008 July 2008 Aug 2008 Sept 2008 Oct 2008 Nov 2008 Target SNF-BF ratio

Table of Contents for the Digital Edition of The Milk Producer - January 2009

The Milk Producer - January 2009
Contents
Editor's Notes
DFO Chair's Message
Dairy Update
DFC Promotion
Processor Spotlight
Farm Finance
Take Steps to Reduce Feed Costs
Research
Feed Management
Applied Science
Markets
New'n'Noted
Back Forty

The Milk Producer - January 2009