Milk Producer - May 2009 - (Page 44)

MARKETS Quota cut offset by promotion? T he positive influence on markets of the new Dairy Farmers of Canada (DFC) campaign promoting 100 per cent Canadian milk could partially offset a recent small decline in industrial milk requirements, says Phil Cairns, Dairy Farmers of Ontario (DFO) senior policy adviser. Ontario ice cream manufacturers have been among the processors enthusiastically embracing the program, with 14 having signed on to the program by late April. They are using the newly designed “little blue cow” logo on their packaging to inform consumers their products are made with 100 per cent Canadian dairy ingredients. DFC has backed the labelling with a national marketing and communication campaign to raise consumer awareness of the logo’s meaning. It includes television and radio commercials, billboards and print advertising. Calculations of industrial milk market requirements showed a one per cent decline for the 12 months ending Feb. 1, Cairns notes. The fluid market was also down by 0.42 per cent. This translates into a 0.7 per cent quota decrease for total quota in the P5 pool—Nova Scotia, P.E.I., New Brunswick, Quebec and Ontario— effective April 1. About 40 per cent of the April quota decrease is attributed to 2008 being a leap year. There was one less day in the rolling 12-month measurement of market requirements for both fluid and industrial milk. “The industrial milk reduction is largely attributed to the sudden and substantial build-up in industry butter stocks that occurred in January,” he says. “Short of a substantial falling off in demand—not currently evident at the retail level—I am expecting this reduction to be offset by growth in butterfat utilization as a result of the promotion initiative in the coming months.” The market appears to be relatively strong at the retail level, Cairns says. For the 12 weeks ending Feb. 15, sales were up 3.2 per cent for butter and 3.4 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 $71.24 WMP $72.66 2.4 SNF-BF Ratio 2.35 2.3 2.25 2.2 2.15 2.2619 Blend price in $/hL Mar 2008 Apr 2008 May 2008 June 2008 July 2008 Aug 2008 Sept 2008 Oct 2008 Nov 2008 Dec 2008 Jan 2009 Feb 2009 P5 blend price WMP blend price Ontario’s SNF-BF ratio 44 | May 2009 | MilkPRODUCER Apr 2008 May 2008 June 2008 July 2008 Aug 2008 Sept 2008 Oct 2008 Nov 2008 Dec 2008 Jan 2009 Feb 2009 Mar 2009 Target SNF-BF ratio

Table of Contents for the Digital Edition of Milk Producer - May 2009

Milk Producer - May 2009
Contents
Editor's Notes
DFO Chair's Message
Dairy Update
DFC Promotion
Farm Finance
Environmental Issues
Canadian Cow Scooped Up By Processors
Research
Applied Science
Ruminations
Markets
New 'N' Noted
Back Forty

Milk Producer - May 2009