Food Business News - September 13, 2011 - (Page 38)

Market Insight Nonfat dry milk as milk output rises Continued from Page 1 milk (used to make cheese), dry whey and cheddar cheese will peak in the current JulySeptember quarter, with class IV milk (used to make butter and dry products), nonfat dry milk, and butter already peaked in the second quarter. In fact, those peak prices would be the highest forecast prices of any other quarter in the three-year period from 2010 through 2012, according to the U.S.D.A. “Milk production will continue to rise both this year and next,” the U.S.D.A. said in its Outlook report. “Higher milk production and slower growth in exports will pressure prices in 2012. Increased milk production is the result of an increased number of dairy cows since milk output per cow is expected to decline due to high feed costs, with the past summer’s hot weather having a short-term negative impact in some regions.” In its latest Milk Production report, the U.S.D.A. showed average milk output per cow declined by 3 lbs (1,796 lbs in July) from July 2010. Although small, it was the first monthly decline from a year ago in possibly seven years (depending on revisions), and compared with July 2010 output that was more than 50 lbs above the July 2009 level. Whether the per cow number stays below a year ago on a monthly basis or whether it was a result of hot July weather remains to be seen. U.S. milk production was projected by the U.S.D.A. at 198.8 billion lbs in 2012, up 1.6% from 2011, at 195.6 billion lbs in 2011, up 1.5% from 2010, and protein concentrate, to the degree substitution is possible. Prices for 34% whey protein concentrate dropped about 7c a lb, or 5%, and buttermilk powder about 20c, or 13%, during the same time as N.D.M. prices fell. In its Outlook, the U.S.D.A. forecast prices for N.D.M. and dry whey will continue to drop for at least the next three quarters. For the year, the department projected the 2012 report. Inventories on July 31 were up about 2% from June but down 2% from a year earlier. Production of N.D.M. in the first seven months of 2011 was about 4% below the same period a year ago. Last week prices for all grades on N.D.M. were 21% above year-ago levels in the Central and East and at least 25% above in the West. In contrast, prices for dry whey last week were 72% above year-ago levels and for lactose were 77% above. Production of both products was above yearago levels for the January-July period, but opposite N.D.M., monthly production has been steadily declining compared with the same month last year. July 31 manufacturers’ stocks of dry whey were 11% below a year ago and of lactose were down 9%. Last week N.D.M. prices ticked upward in some regions for the first time in nearly four months. Some suggested that signaled prices have bottomed since less milk will be available to dryers with the start of the new school year increasing demand for fluid milk, the U.S.D.A. noted in its weekly Nonfat Dry Milk report. At the same time, the U.S.D.A. also noted some manufacturers and resellers were sharply discounting N.D.M. to increase sales and keep inventories from building. If the U.S.D.A.’s 2012 forecast holds true, N.D.M. prices have more downward potential. FBN Per cent change in production from a year ago 17.5% -9.8% 6.2% 22.4% -4.4% 4.9% 9.2% 7.1% -2.5% 14.0% June 11.2% 13.4% -4.4% 2.6% 1.4% -6.5% 5.7% July -7.2% 4.5% Feb. Jan. -9.0% 2.0% March April May Source: U.S. Department of Agriculture Nonfat dry milk Dry whey Lactose RON STERK estimated at 192.8 billion lbs last year, up 1.8% from 2009. Meanwhile, milk product prices have been mixed coming into the fall, although a weaker tone has been evident for many. Prices for high-heat nonfat dry milk (N.D.M.) declined about 15c a lb, or 10%, from midJuly to early September, and for low/medium-heat N.D.M. about 20c, or 13%. Because of the large volume of N.D.M. produced relative to other dry dairy products, price changes tend to influence other products, such as buttermilk powder or whey average N.D.M. price about 7% below the 2011 average, and the dry whey price about 13% below the current year. But values for dry whey and lactose actually increased during the July-September period as N.D.M. prices fell, indicating other factors, such as strong domestic and export demand, than just N.D.M. prices and milk supply, were at play. Manufacturers’ shipments of N.D.M. in July were up about 8% from June and outpaced July 2010 by 19%, according to the latest U.S.D.A. Dairy Products 38 FOODBUSINESS NEWS ® September 13, 2011

Table of Contents for the Digital Edition of Food Business News - September 13, 2011

Food Business News - September 13, 2011
Kraft’s split on schedule
Nonfat dry milk prices drop as milk output rises
Shining a light on sugary drinks
Web Contents
Editorial - Preparing for the rising cost of fresh water
Private label products make gains in salad, sugar categories
Seaboard’s Rod Brenneman to lead Butterball
Limited avocado supply hurts Calavo earnings
PepsiCo outlines path for global snacks growth
F.D.A. initiates projects to trace foodborne illnesses
U.S.D.A. study shows food insecurity down from 2009
McCormick completes acquisition of Kamis
Leadership team set for Sara Lee’s CoffeeCo spin-off
Seneca, Allens terminate merger negotiations
Human milk components the focus of partnership
JBS shifting operations in Brazil
Dannon opens new innovation center
July red meat production down 4% from year ago
Aramark to acquire Filterfresh from G.M.C.R.
Tyson Foods to ramp up prepared foods output
McDonald’s investing $1 billion in Canada
Rowland Coffee integration on track at Smucker
Food trucks transitioning from fad to trend
Kraft’s split on schedule
Restructuring charges weigh on Campbell earnings
Starbucks K-Cup Portion Packs going to grocery stores
Sanderson Farms swings to loss in quarter
Nestle completes production unit for nutrition factory
Restaurant Performance Index falls beneath 100 to 11-month low in July
Washington - Shining a light on sugary drinks
Market Insight - Nonfat dry milk prices drop as milk output rises
Health and Wellness - School lunches get slimmer
Ingredient Innovations - Possible opportunity in immunity
Flavor Trends - Fire and flavor
New Product Trends - Expanding flavors and protein sources in jerky
New Food Products - Dannon introduces Activia Selects yogurt
New Food Products - Balance Bar launches nimble bar for women
New Food Products - Nestle introducing Nescafe LiquiFresh Gourmet Blend
New Food Products - New jerky from Jack Link’s uses Cholula Hot Sauce
New Food Products - Odwalla adds Super Protein Mango smoothie
New Food Products - Frito-Lay introduces Doritos and Cheetos Fiery Fusion
New Food Products - Burger King adds Quaker oatmeal to breakfast menu
New Food Products - Lifestyle Foods launching G2 snack line
INGREDIENT MARKET TRENDS - Winter wheat planting under way except in dry Southwest
Ingredient Markets
Supplier Innovations and News - Soy blend has texture characteristics of meat
Supplier Innovations and News - Sustainable palm oil certifi cation reaches Brazil
Supplier Innovations and News - Grain Processing Corp. promotes scientist
Supplier Innovations and News - Starches offer retort, freeze/thaw benefits
Supplier Innovations and News - Red Arrow launches pot roast fl avor
Supplier Innovations and News - Takasago names v.p. of consumer insight
Supplier Innovations and News - Honey, fig flavors join balsamic vinegar line
Ad Index
Food Business in the News

Food Business News - September 13, 2011