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DairyCast 0394 - Year End Economic Review from American Farm Bureau Federation Economist

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mp3DairyCast 0394 Show Notes:
  • Bob Young, Chief Economist for the American Farm Bureau Federation, discusses the impact of recent actions in Washington on the agricultural economy and the future of the industry.

Small Dairies See Business Opportunities


There is optimism in smaller dairy producers that are willing to focus on locavore consumers. Locavores are interested in sustainability and eco-freindly food production. While main stream dairy producers are struggling, smaller dairies are using consumer interest in how milk products are made to sell premium priced products, like heritage cheeses.

Much of it is being devoured by "locavores," people who try to eat locally produced food and are willing to pay up to get it. There's also growing demand for "heritage cheese" produced by breeds of cows, goats and sheep not found in normal dairies.

"In America you have block cheddar and you have black and white cows and that's what the general consumer understands about cheese and dairy," said Ms. Nichols [of Heamour Farm in Madison, N.Y]. "I'm hoping the consumer will start to stop and think about the cultural heritage behind that product they are eating and why that breed of animal is contributing to the flavor of that product."

Dairies Are Not Riding Agricultural Profit Wave


While other agricultural products are doing well for growers, U.S. dairy farmers are not doing as well. Feed prices combined with an over supply of milk products are pushing prices and profits down.

Dairy farmers expanded herds following the 70 percent jump in prices to a record in 2007, just before the U.S. began its longest recession since before World War II and unemployment rose to the highest level in a quarter century. Weaker demand was compounded by this year’s drought, floods or freezing weather from Canada to Kazakhstan that ruined crops and boosted competition for U.S. grain that dairies require.

It is anticipated that there will be some dairy operations that will fail in the coming months. It is also believed that the next year will continue to be rough on dairy producers because of continued market pressures from animal feed corn.

Corn futures have risen 48 percent since the end of June, the biggest gain in the Thomson Reuters/Jefferies CRB Index of 19 raw materials after sugar. The U.S. Department of Agriculture cut its estimate for the crop on Nov. 9 for a third straight month because of flooding in Iowa and Missouri and hot, dry weather from Illinois to Ohio.

#FoodThanks


With the holiday season coming up, please take some time to thank the many farmers, ranchers, chefs, growers, artisans, bakers, friends and family who help bring/make food as part of the social center piece.

Sometimes the simplest expression of gratitude are the most profound. This Thanksgiving season, we encourage you to use social media to show just how thankful you are for the food we enjoy every day. In doing so, we will also be thanking those many people and industries who bring food to our tables.

Ways to share? Facebook, Twitter, and LinkedIn are some starting points.

Issues With Corn As Food Vs Fuel In 2011?


Corn production and demand are coming together to increase corn prices. This is great for corn growers but not great for those that depend on corn for animal feed. Adding ethanol into the mix again put corn in the middle of the food versus fuel debate.

Ethanol is consuming corn at a rate that is only 10 percent less than that of livestock and poultry demand. And more than one bushel of corn out of three produced in the US will be converted to ethanol in the current marketing year. That is going to cause concern about the amount of corn we will produce and whether it will be enough to meet demand with minimal rationing. And that causes concern for the traders.

Dr. Robert Wisner, University Professor Emeritus at Iowa State University, states "Corn supplies will be tight and some rationing of demand likely will be needed in the year ahead." This is not a great situation for those in animal agriculture without hedges and other risk mitigation actions in play.

How Much More DDGs Will China Take?


China's need for feed material is going beyond corn. This year the need for additional feed inputs is moving China to import DDGs (Dried Distillers Grains).

China’s demand for dried distillers’ grains and solubles, a by-product of turning corn into ethanol, may rise to more than 10 million metric tons per year in the future, an executive at Cofco Ltd. said today.

DDGs for 2010 are expected to exceed last year’s record 5.65 million tons.

The U.S. Department of Agriculture expects [corn] consumption to expand by 2.6 percent in China to 160 million tons in the year from Oct. 1.

DairyCast Update for November 18, 2010, #FoodThanks For Thanksgiving

DairyCast is looking for you to help us better connect with your interests. Your thoughts will provide us direction on what information and data you desire to help you become more productive, effective, and profitable. Plus, by completing the survey, you can be entered to win a $100 Target gift card.

How Can Bacteriophages Perform As Antibiotic Alternatives?

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Bacteriophages are being considered as viable alternatives to infectious diseases that are no longer responding to antibiotics. Currently waiting U.S. approval, bacteriophages could be used to treat animals and humans.

Bacteriophages -- so named when they were first discovered because they appear to eat bacteria -- are naturally occurring viruses that can infect and kill bacteria.

Currently there are many bacterial diseases that have become resistant to antibiotics. Stronger antibiotics have been used in treatment but at the risk of continue the evolution of the bacteria to become "super-bugs".

Fast forward to the present, where an increasing number of bacteria strains -- often referred to as "super bugs" -- are becoming resistant to antibiotics typically used against them. The fear of seeing human medical science being hurled back into a pre-antibiotic era is ever present.

In the battle against antibiotic resistance in animal agriculture, researchers from Washington and New York states are hoping to help pave the way for U.S. approval of a promising biological therapy that has the potential to not only treat sick cows, but also save human lives threatened by infectious diseases that no longer respond to antibiotics.

DairyCast 0393 - Impact Of World Economic Issues On U.S. Agriculture

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mp3DairyCast 0393 Show Notes:
  • Jim Kielkopf, economist for AgriBank, discusses how economic uncertainty has impacted producer decisions and what role speculators and hedge fund industry play in agriculture.

Can China Keep Agricultural Speculating In Check?

China

China is looking to put in place controls to keep agricultural speculation from increasing prices and inflation.

The government may also crack down on hoarding, offer food subsidies and hold local mayors responsible for ensuring vegetable supplies and controlling prices, the report said. In May, the government said hoarders will be fined by up to five times the value of the commodities held, the paper said.

Prices on agricultural commodities have been rising and the Chinese Government is acting quickly to stop actions that may cause economic disaster.

The Ministry of Commerce said today it will work with other government agencies to curb inflation. The supply of most goods is sufficient although a few products, including diesel, are in short supply, the ministry said in a statement ahead of a news conference in Beijing. The government is selling pork and sugar from reserves to ensure supply, the ministry said.

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