The Milk Producer - January 2010 - (Page 40)

MARKETS Quota cut proposed T he Canadian Milk Supply Management Committee (CMSMC) will consider a recommendation at its next meeting to reduce national market sharing quota (MSQ) by 1.2 per cent from February through July. That would translate into a total quota reduction in provincial quotas of 0.66 per cent for those six months at the P5 level, assuming a stable fluid milk market. The recommendation comes from the CMSMC’s Secretariat as a way to manage excessive butter stocks by reducing production of industrial milk used to make butter and other products such as cheese and ice cream. Butter stocks remained relatively high in December at 17 million kilograms. Normal levels at the end of the fall are 14 million kg. The CMSMC, with representatives from all 10 provinces, is scheduled to meet Jan. 27. Each province is issued a share of national MSQ. All provinces much reach a consensus to implement quota adjustment decisions. Prices barely change The price you get for milk will barely change Feb. 1. The Canadian Dairy Commission (CDC) is leaving its support prices for butter and skim milk powder untouched, and a modest fluid increase will raise the P5 blend price just 11 cents per hectolitre. In its mid-December industrial milk price announcement, the CDC notes lower input costs as a major reason for not adjusting support prices. Provincial marketing authorities use the support prices as the basis for adjusting prices of milk used to make industrial products. “Input prices have decreased slightly from their peak levels in 2008, which now allows dairy producers to cover their cost of production,” says CDC chair Randy Williamson. “As a result, the support prices for butter and skim milk powder have been left unchanged.” In November, the small fluid price increase was announced, based on a common formula adopted by all 10 provinces. It amounted to 0.334 per cent more for Class 1 milk, effective Feb. 1. Stable demand Dairy product demand has remained stable despite the recession, the CDC states. Domestic demand actually 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 76 74 72 70 68 66 P5 $71.70 WMP $74.11 2.4 SNF-BF Ratio 2.35 2.3 2.25 2.2 2.15 2.2393 Blend price in $/hL Nov 2008 Dec 2008 Jan 2009 Feb 2009 Mar 2009 April 2009 May 2009 June 2009 July 2009 Aug 2009 Sept 2009 Oct 2009 P5 blend price WMP blend price Ontario’s SNF-BF ratio 40 | January 2010 | MilkPRODUCER Dec 2008 Jan 2009 Feb 2009 Mar 2009 Apr 2009 May 2009 June 2009 July 2009 Aug 2009 Sep 2009 Oct 2009 Nov 2009 Target SNF-BF ratio

Table of Contents for the Digital Edition of The Milk Producer - January 2010

The Milk Producer - January 2010
Editor's Note
DFO Vice-Chair's Message
Contents
Dairy Update
Farm Finance
Processor Spotlight
DFC Promotion
Victory Over Johne’s
Applied Science
Research
Ruminations
Farm Energy
Markets
New 'N' Noted
Back Forty

The Milk Producer - January 2010