The Milk Producer - June 2010 - (Page 44)

MARKETS Butter stock proposal ahead nother proposal to deal with high butter stock levels will be on the table when provincial representatives gather for the Canadian Milk Supply Management Committee (CMSMC) meeting in July. The CMSMC’s secretariat, a technical advisory committee, has been developing the new proposal. It was mandated to recommend changes to the triggering formula that determines provincial market sharing quota (MSQ) levels. The changes would let the formula determine industrial milk production requirements to bring butter stocks in line with target levels. This will likely be an automatic adjustment mechanism, says Phil A Cairns, a member of the secretariat and Dairy Farmers of Ontario senior policy adviser. It would reduce provincial MSQ shares when domestic butter stocks reach a certain level. The most recent available figures indicated stocks were 3,000 to 4,000 tonnes above target levels in midApril, Cairns notes. No earlier agreement At the April CMSMC meeting, provincial representatives did not agree on a previous proposal for adjusting MSQ levels based on butter stocks. There was also no consensus on a secretariat recommendation to freeze current provincial MSQ shares until December 2010. The CMSMC did agree at its January meeting to freeze MSQ at the December 2009 level for a period of six months beginning February 2010 to help bring stocks down to a more manageable level as they mounted last winter. From February to July, MSQ can only change if the Canadian requirements calculation translates into a decrease. Provincial quotas could be adjusted if there is a decrease in Canadian requirements or a change in fluid milk demand. Innovation program grows Canadian processors continue to take advantage of the Domestic Dairy Product Innovation Program (DDPIP), 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 78 76 74 72 70 68 P5 $72.20 WMP $74.59 2.4 SNF-BF Ratio 2.35 2.3 2.25 2.2 2.15 2.3013 Blend price in $/hL April 2009 May 2009 June 2009 July 2009 Aug 2009 Sept 2009 Oct 2009 Nov 2009 Dec 2009 Jan 2010 Feb 2010 Mar 2010 P5 blend price WMP blend price Ontario’s SNF-BF ratio 44 | June 2010 | MilkPRODUCER May 2009 June 2009 July 2009 Aug 2009 Sep 2009 Oct 2009 Nov 2009 Dec 2009 Jan 2010 Feb 2010 Mar 2010 Apr 2010 Target SNF-BF ratio

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

The Milk Producer - June 2010
Contents
Editor's Notes
DFO_Vice-Chair's Message
Dairy Update
DFC Policy
Industry RoundUp
DFC Promotion
Research
Applied Science
Ruminations
Markets
New'N'Noted
Back Forty

The Milk Producer - June 2010