The Milk Producer - August 2009 - (Page 40)

MARKETS Fluid pricing agreement reached ll provinces have reached agreement to implement a national fluid milk pricing formula. Based on the P5 formula implemented in 2007, the agreement will be in place for the next two years. The Western pool adopted the P5 formula last fall, prompting formation of a national committee. It comprised representatives from each province. The formula uses weightings of 30 per cent consumer price index, 40 per cent producer cash costs and 30 per A cent personal disposable income. The agreement calls for four price adjustments: Feb. 1, 2010, Aug. 1, 2010, Feb. 1 2011 and Aug. 1, 2011. For the February adjustment, fluid prices could go up or down depending on the data in the formula weightings. If the formula suggests an increase of two per cent or more for the coming February, an adjustment of half that amount will be implemented Aug. 1. This amount will be taken into account an adjustment is made the following February. In the Western pool, fluid prices were adjusted more often than in the P5, which had adjusted prices on Feb. 1 only. One exception was a special increase in September 2008 in reaction to sharply increased feed, fertilizer and fuel costs. Industrial milk prices also went up after the Canadian Dairy Commission increased support prices for the same reason. The new fluid agreement also calls for announcing intended price adjust- 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 $71.85 WMP $73.62 2.4 SNF-BF Ratio 2.35 2.3 2.25 2.2 2.15 2.314 Blend price in $/hL June 2008 July 2008 Aug 2008 Sept 2008 Oct 2008 Nov 2008 Dec 2008 Jan 2009 Feb 2009 Mar 2009 April 2009 May 2009 P5 blend price WMP blend price Ontario’s SNF-BF ratio 40 | August 2009 | MilkPRODUCER July 2008 Aug 2008 Sept 2008 Oct 2008 Nov 2008 Dec 2008 Jan 2009 Feb 2009 Mar 2009 Apr 2009 May 2009 June 2009 Target SNF-BF ratio

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

The Milk Producer - August 2009
Contents
Editor's Notes
DFO Chair's Message
Dairy Update
Industry Roundup
DFC Promotion
Our Readers Have Spoken
Issues Update
Research
Applied Science
Ruminations
Markets
New 'n' Noted
Back Forty

The Milk Producer - August 2009