Blimling and Associates Blog

Europeans Sell Off Dairy Stockpiles

Dairy Co-ops Help Farmers to Remain Independent, Efficient

According to the USDA/NASS Cold Storage Report, published at 2:00pm CT today:

April 30 AMERICAN-TYPE CHEESE stocks @ 614.0 million pounds, up 6.3% year-over-year and up 2.0% versus March 2010 (that compares to an average March-to-April increase of 3.6% over the previous five years).

April 30  TOTAL CHEESE stocks @ 1,011.7 million pounds, up 7.7% year-over-year and up 1.7% versus March 2010 (that compares to an average March-to-April increase of 2.7% over the previous five years).

April 30  BUTTER stocks @ 207.6 million pounds, down 13.5% year-over-year and up 6.0% versus March 2010 (that compares to an average March-to-April increase of 18.6% over the previous five years).

For more insight into what this might mean to the marketplace, request a free trial subscription to our Dairy Research Service. 

Block cheddar cheese closed at $1.5000/lb, up $0.0125/lb with 1 trade.

Barrel cheese closed at $1.4775/lb, up $0.0100/lb with 2 trades.

Butter closed at $1.5800/lb, down $0.0025/lb with no trades.

Grade A NDM closed at $1.3000/lb, unchanged with no trades.

Extra Grade NDM closed at $1.2900/lb, down $0.0100/lb with no trades.

Milk Specialties Agrees to Pay OSHA Penalties

Dean Foods Waiting for Direction

Coalition Wants to Make Sure Every Child Gets a Half-Pint of Milk

EU Approves Sale of Intervention Butter, Milk Powder

Dairy Industry Advisory Panel to Meet Again

WI Ag Exports Up 18%

We relish reading the daily economic commentary provided by David Rosenberg of Gluskin Sheff (a Toronto-based money management firm). For several months he has cast a skeptical eye on the prospects for organic, sustained economic recovery. Remember the old Temptations song "My Girl"? It starts of: I've got sunshine on a cloudy day... Rewritten as an ode to Rosenberg, it would begin: He's got clouds for every sunshiny day... But, as depressing as it can be to read, the commentary focuses on real issues. Like this list from yesterday's note:

SCARY MATH

1 in every 10 American homeowners missed a mortgage payment in Q1 (a record)

1 in 6 Americans are either unemployed or underemployed

Over 4 in 10 unemployed Americans have been out of work for at least six months.

1 in 4 Americans with a mortgage have negative equity in their homes.

1 in 10 Americans believe their income will rise in the next six months.

1 in 5 Americans see business conditions improving in the next six months.

1 in 50 Americans plan to buy a home in the next six months.

1 in 8 Americans believe that current government policy is actually helping the economy.

1 in 10 American small businesses have a job opening. 1 in 10 American’s credit card usage is being written off (a record).

There are 5 unemployed workers competing for every job opening (hence downward pressure on wage growth).

Mortgage delinquencies in the U.S. hits a new record high, now over 10%

Outside of these, it’s all good. Lagged impact of gargantuan fiscal stimulus (the longevity of which is now being challenged with Greece the proverbial canary in the coal mine) and inventory-led production gains (the longevity of which is now being challenged by the fact that real final sales since the recession technically ended is running at a pace that is two-thirds weaker than what is “normal” coming out of a “downturn”).

Sell in May and go away started a week early this time around. April 26 was very likely the peak of the bear market rally.

Dairy cow slaughter for the week ending May 8 was 51,904 head, up 2.7% from the same week last year.

This puts slaughter down 3.1% year-over-year, YTD through week 19.

Block cheddar cheese closed at $1.4875/lb, up $0.0125/lb with 7 trades.

Barrel cheese closed at $1.4675/lb, up $0.0275/lb with 1 trade.

Butter closed at $1.5825/lb, unchanged with no trades.

Grade A NDM closed at $1.3000/lb, down $0.0350/lb with 1 trade.

Extra Grade NDM closed at $1.3000/lb, unchanged with no trades.

Wal-Mart reported earnings this week. Quarterly performance was solid -- with better-than-expected top-line and bottom-line numbers. But same-store sales were down 1% ex-gasoline, and company officials continue to point to weakness and additional vulnerability on the consumer front. Consider comments made by CEO Mike Duke (as reported in The Wall Street Journal):

"Our customers, particularly in the US, are still concerned about their personal finances and unemployment, as well has higher fuel prices..."

"More than ever, our customers are living paycheck to paycheck..."

Target is perceived to have a more upscale demographic -- and is believed to have lost customers to Wal-Mart during the downturn. But those customers may be coming back. Mike Duke generically acknowledged the possibility during the Wal-Mart earnings call. Targets first quarter results seemed to affirm the notion. From The Wall Street Journal:

Target Corp. sounded decidedly upbeat about what it called a "stronger-than-expected economic environment" as it reported healthy profit and sales gains in its fiscal first quarter.

The company benefited from customers slowly returning to buying more profitable products, such as apparel and home furnishings.

The results were in sharp contrast to the latest performance at Wal-Mart Stores Inc., which on Tuesday reported its fourth consecutive quarter of lower sales at its U.S. stores, citing customers who are still pressured by gas-price increases and high unemployment.

By contrast, Target's profit rose 29% for the quarter ended May 1 as its sales increased 5.5%. Sales at stores open at least a year, an important measure of a retailer's health, rose 2.8%.

Economy bears are, naturally enough, focusing on WMT's comments; bulls, as might be expected, are touting TGT's showing as representing reality. The stocks are trading within a dollar of each other.

Getting a pulse on consumer sentiment and behavior remains as elusive as it is important...

WI Rep. Danou Calling for Veto Override on Raw Milk

Columbian Milk Producers Protest Free Trade Deal

Fonterra Presses Farmers to Meet Organic Milk Boom

The Complicated Supply Chain of Mozzarella Cheese

Milk Production Sets April Record

Trade Show to Expand During 2010 World Dairy Expo

Dairy Price Stabilization Introduced to Congress   

Block cheddar cheese closed at $1.4750/lb, unchanged with 2 trades.

Barrel cheese closed at $1.4400/lb, up $0.0100/lb with 1 trade.

Butter closed at $1.5825/lb, unchanged with no trades.

Grade A NDM closed at $1.3350/lb, unchanged with no trades.

Extra Grade NDM closed at $1.3000/lb, unchanged with no trades.