The Milk
Check
TOM JUECHAK
County Agent
The Big Flve-0
This year marks the 50th an-
Iversary of June Dairy Month
inking it the longest, continuing,
lost recognized farm commodity
romotion program we have, with
|ie possible exception of Easter
eggs.
Seriously, it’s unmatched in its
by consumers and the
-media as well as its support by
-producers that has been helped in
recent years by some federal
'legislation. That legislation in
cluded a 15 cent per hundred
weight contribution from each
producer starting in May 1984 and
more recently a grant of $lOO
million to establish a National
Dairy Research Institute for new
product and market development
that has yet to be started.
The producer contributions since
1984 have tripled the amount of
money going into dairy product
promotion and a referendum of
producers has indicated their
approval to continue the 15 cent
contribution into the indefinite
future.
The legislation requiring the 15
cent contribution allowed 10 cents
of that to be diverted to state and
local programs so there’s no doubt
that with all the organizations now
mgaged in dairy promotion,
■TOnsumers are seeing and hearing
CSvl
M month k
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a lot more about dairy products
than ever before. Economic
analyses of the impact of all these
promotion dollars on producer
income are already started but
results are further in the future.
What you will leam from the
analyses is the kind of dairy
product promotion that provides
the best returns.
The one thing you should
celebrate on the 50th anniversary
is the record high increases in
dairy product sales in the last
three years while you were having
record high production. When
nothing seemed to be going right
for producers faced only with a
Dairy Termination Program or
lower prices the outstanding bright
spot for the future is the seven
percent increase in commercial
sales in the last two years.
If that doesn’t sound like much
consider that commercial sales in
1983 were 122 billion pounds of milk
equivalent and in two years they
were up to over 131 billion pounds -
an increase of nine billion.
If you can increase another five
billion pounds this year on the
demand side and take away
another nine billion pounds on the
supply side with the Dairy Ter
mination Program you will cer
tainly increase your milk price
enough to cover your 15 cent
JUNE DAIRY MONTH SPECIAL G]
I *
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contribution. Now that dairy
product consumption is on the
increase, what was criticized
earlier as a “milk tax” is now
considered a contribution to good
marketing by most producers and
by many as money in the bank that
will return good profits in the
future.
So, until we know otherwise,
producers can take credit for the
turn around in commercial sales
that had been slipping through
most of the 50 years we were
celebrating June Dairy Month but
now seem to be making up for lost
time.
However, you’ll have to admit
that helping these increasing sales
was the competitive retail prices
for dairy producers in recent years
making them a real bargain in the
food basket along with increasing
disposable consumer income. The
best hope for increasing dairy
product consumption is their
improving image to the consumer
as healthful products rather than
providing nothing more than fat
and cholesterol.
The changing image is part of
the promotion program, certainly,
but changing dietary trends are
also working in your favor. Just
don’t worry about the seemingly
contradictory tastes with con
sumers going for low-fat milk to
cut calories and the increasing
sales of high quality (and high-fat)
ice cream. Even butter is making a
come back with the help of rising
incomes; the appeal of gourmet
cooking and a $l2 million
promotion effort by national and
local organizations.
So, look at the bright side of the
dairy industry - the improving
image and increasing consumption
of dairy products - on this 50th
anniversary of June Dairy Month
that today, looks healthy enough to
survive another 50 years, at least.
Class I Differentials
The dairy provisions of the Farm
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Lancaster Farming, Saturday, June 21,1986-A3l
Security Act of 1985 weren’t all bad of the problem was the production
as some press and producers of 1,124 million pounds of milk in
would have you believe even the pool which was the highest for
before all the programs that it May in 20 years. That’s an increase
provided get started. There’s a lot of more than 11 percent over last
more to the farm bill than the May. The $11.25 was only six cents
Dairy Termination Program and less than April but 53 cents less
increases in the Class I differential than last May.
in 35 Federal Milk Marketing This year you had assessments
Orders which started with May of 40 cents for the Dairy Ter
milk deliveries to regulated mination Program and 12 cents for
handlers. Increases varied from Gramm-Rudman but you
eight cents in the Upper Midwest also had an increase in the Class I
Order to $1.03 in the Southeastern differential that I explained
Florida Order. earlier. However, that 30 cent
Here in Order 2 you got 30 cents.
That means that the Class I price
for May in Order 2 will be $13.57
instead of the $13.27 you would
have had without the 30 cent in
crease.
Ordinarily, Congress doesn’t get
into changing Federal Orders but
even when they do the changes still
have to be approved in a
referendum of producers. In this
case it was no problem because the
producers were literally voting
themselves an increase in price
but even so not everyone was
happy.
Producers in the Lake States
were mad because they felt they
were cheated and should have had
more. Nothing pleases everyone
and some Federal Order changes
written into the Farm Security Act
such as market service payments
will produce even more heat but
that’s another story.
Order 2 Prices
Uniform price for May milk
deliveries to Order 2 handlers was
$11.25, the lowest since 1979. Part
Natural cheese may be original wrapping. Waxed
stored in the refrigerator paper, transparent wrap,
for several weeks at 35° to aluminum foil and plastic
40°F. Whenever possible, it bags are also good
should be kept in its coverings for cheese.
• Contains no drugs or antibiotics
therefore no slaughter withhold
• Helps get newborn calves started
quicker
• Helps supply critically needed
vitamins & minerals
:temno.
increase in the Class I price shrunk
to 10 cents on the uniform price
because with that high production
your Class I utilization dropped to
34.8 percent.
You also had a 10 cent increase
in your Louisville Plan pay out for
May. Because the Minnesota-
Wisconsin Price Series has
changed only eight cents since
February your Class prices stayed
about the same except for that 30
cent increase in the Class I dif
ferential.
What’s hurting now are those
assessments that are largely to
blame for the 53 cent drop from
last year. For whatever it’s worth,
the M-W won’t go any lower this
year because at $10.98 it’s already
33 cents below the support price.
Seasonal drops in milk production,
even without the sales of fluid milk
to schools this summer, should
keep it from falling further.
Then we wait for the expected 30
cent increase after all those first
period Dairy Termination
Program cows go to market.
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