Milk Market Moos
SHERRY BUNTING
Published in Farmshine (March 28, 2008 Issue)
Dairymen respond to Wal-Mart’s “Great Value”
Wal-Mart announced this week that its Great Value milk brand now sources milk exclusively from cows not treated with rbST. Milk selections at Sam’s Club are also offered from suppliers sourcing milk from non-supplemented cows.
With this announcement came a report on Wal-Mart’s blogging website, where Rand Waddoups, “author for sustainability” writes about several new “sustainability-related” initiatives at Wal-Mart, including this recent change for Great Value milk.
Rand is a senior director at Wal-Mart, and his biography states that he is “looking after the most exciting thing happening in business today, sustainability.” He is part of a small team, which he writes, is dedicated to building sustainability into every part of Wal-Mart’s business strategy via three future goals: 1) to have zero waste, 2) to use 100% renewable energy, and 3) to bring more sustainable products to customers.
On Wednesday, March 19, Rand posted his article “Great news about Wal-Mart milk,” in which he described the switch to exclusive sourcing of milk from cows not treated with rbST. At the end of every report on the sustainability section of Wal-Mart’s blogging website, people can submit comments, and these comments are logged for all to read. That’s what a blog is (short for web log).
Rand’s report about Great Value milk unleashed a landslide of “blogging” responses. As Farmshine was getting ready for press Wednesday night, the total number of comments had reached a whopping 121 (compared to 3, 10, 56, at most, on all other subjects at the blog) over the course of 8 days. Most of the comments were submitted just on Monday and Tuesday of this week. Out of the 121 comments, only 12 thanked Wal-Mart for their decision to change the milk sourcing.
Four comments were actually questions from consumers asking: Will the milk cost more? How will it be enforced? Are rbST and rbGH the same thing? Will there be a sticker on the milk to let us know we are buying non rbST milk?
The remaining 105 comments (including two duplicates) were articulate, thoughtful responses asking Wal-Mart to look at the big picture, learn the facts about the issue, understand the meaning of sustainability from a planet resources point of view, and they repeatedly asked the retail giant to reconsider their Great Value milk sourcing decision.
These comments were mainly from dairy farmers, wives of dairy farmers, and daughters of dairy farmers. About 20% of these dairy-related comments were from veterinarians, nutritionists, dairy consultants, and university dairy and animal science professors, including Dr. Mike Hutjens at the University of Illinois and Dr. John Fetrow, Professor of Dairy Medicine at the University of Minnesota.
Incidentally, there were at least 10 consumer blogs, which were posted after reading the dairymen’s blogs. These consumers started questioning Wal-Mart’s affordable pricing policy. They also questioned the “sustainability” benefits of this decision in terms of efficiency, population growth, and land resources. One consumer voiced environmental concern about this decision, thinking it might contribute to pulling marginal land out of conservation reserve and into production because reduced efficiency in milk production would be occurring at a time when the biofuels craze is also competing for feed grains.
As a writer, what I found so enlightening in reading through the blog, is that hard working dairy farmers took the time to type their thoughts and let their voices be heard. They didn’t worry about being the best writer or how perfect their spelling would be. They simply overcame any trepidation and spoke from the heart.
Some of the comments included scientific facts, figures, and statistics, but for the most part, the responses were simply sincere voices of reason within a complex issue that has taken on a life of its own. From as few as two-lines of comment to long entries of 10-or more paragraphs, each dairyman and industry partner, who commented on the blog, took advantage of a golden opportunity to be heard, to participate in free market democracy.
Congratulations for speaking your mind! Hats off for taking your message to Wal-Mart and consumers. The bottom line here is that dairy farmers spoke up. Consumers need to hear from farmers on these issues of technology. Otherwise, emotion will rule the day on the present issues and those yet to come.
To read the blog and even add to it, visit Wal-Mart’s special blogging website at www.checkoutblog.com. Then click on “sustainability.”
April Class I Recovers Nearly $2
The April Class I milk base price or “mover” will be $18.61 per hundredweight, representing an increase of $1.91 to recover about two-thirds of the March loss, according to the USDA Agricultural Marketing Service (AMS) announcement last Friday, Mar. 21. The April 2008 price is $3.74 higher than the price of $14.87 for April 2007.
The advance, as expected, came on the heels of stronger butter sales and higher cheese prices, which more than made up for declines in the powdered milk sector (both nonfat dry milk and dry whey).
Advanced prices and pricing factors are based on component prices as reported by the National Agricultural Statistics Service (NASS) for only the first two weeks of the previous month (March): Butter $1.2438/lb; Nonfat Dry Milk $1.2537/lb; Cheese $2.0190/lb; and Dry Whey $0.2454/lb.
Market Factors Improve
The above prices used for calculating the April Class I advance price, actually improved a bit more after the two-week cutoff. For example, butter sales continued strong through the holiday last week and cash prices continue to increase, according to USDA AMS Market News.
The NASS Cold Storage Report, issued March 20, showed butter stocks at the end of February were up 8% over last year, after being 26% above year ago at the end of January.
In the cheese sector, prices had declined toward the end of the first two-weeks of the month, which are weeks used in the advanced Class I milk pricing calculation. Cheese prices then rebounded on the cash market at the Chicago Mercantile Exchange through the latter part of March, as export interest continues to factor into the balance of supply and demand. Cheese stocks in cold storage remain 8% below year ago, and reports indicate aging programs are starting to rebuild after being depleted.
In the powder markets during the latter part of March, prices have been firming, up. For example, export demand reportedly continues to help clear the heavy supplies of nonfat dry milk, and dry whey prices are trending a bit higher as supplies become more balanced with current demand.
Fluid production heavy in Southwest
The heavy fluid milk production in the Southwest is increasing due to the good weather conditions. According to USDA AMS Market News, this milk is moving even farther away to find processing capacity.
During February, 9.9 billion pounds of milk were received by the Federal Milk Market Order system, which is 6.3% higher than Feb. 2007, but this leap year had an extra day in the month, which affected the year-over-year comparison.
All market utilization was reported as 37% Class I, 11% Class II, 40% Class III and 12% Class IV. The statistical blend price for February was $18.84 – which was down $1.71 cents from January and $4.14 higher than a year ago.
February’s all-milk price was calculated at $19.30 – $1.20 lower than January and $4.40 higher than Feb. 2007.
The announced U.S. Class I cooperative price for March was reported by USDA AMS at $21.71 compared with $24.63 last month and $18.53 a year ago.
ODA Holds Line on Labeling
The Ohio Department of Agriculture, last week, held the line on the content of the state’s proposed milk labeling law. No changes were made to the original submission of standards, which will now go to the Joint Committee Agency on Rule Review. The Agency will consider the measure this Friday, March 31. The proposed Ohio labeling law is similar to Pennsylvania standards, but goes further in requiring rbST-related claims be followed by a proper disclaimer statement regarding no difference in the milk, and this disclaimer must be of equal size, font, color, and position as the claim.
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