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The Wingham Advance-Times, 1984-03-21, Page 38The . Farm Edition, Week of March 21, 1984 - 7 World dairyprkes to remain at.a low level for thefuture Dave Hope Dairy and Poultry Analyst Market Analysis Branch Canadian milk production in the first three months of the dairy year (August -October) ran well below year ago levels. Producers made major production cut backs in the May -July period to4 avert a serious over supply situation. In the August -September period, Canadian market share quota (MSQ) production totalled 28.5 mil. kg. butterfat, 11.1 per cent below year ago levels. This production was 8.6 per cent below the normal seasonally adjusted production nec- essary to fill the annual quota. On a national basis, production continued to trend lower through September as did that of the largest producer, Quebec. In Ontario, however, seasonally adjusted MSQ produc- tion began to increase in August. Commercial sales of fluid milk in the August-Oetober period were greater than those of one year ago. Sales of 2 per cent partially skimmed and skim milk continue to increase at- the expense of standard milk. In the August -October period sales of standard milk declined 3.3 percent while those of 2 persent milk increase 4.7 per cent and skim milk 11.6 per cent. Canadian Dairy Product Situation The high level of butter stocks continue to be a major concern of the industry. In the August -October period 25. 1 mil. kg. of butter was produced, 18.8 per cent below a year ago levels. Last year at this time butter stocks were increasing. Skim milk powder production was down 27.2 per cent. The apparent consumption of butter in the August -October period totalled 27.0 mil. kg. Although this is down, 1.7 per cent°from one year ago, this level of disappearance is encouraging. Many retailers advanced pur- chasei from August to July in anticipation of an increase in the support level for butter. The August level was therefore low. Dis ap- pearance in September and October exceed- ed a year ago levels, Butter stocks were drawn down sli_htly by this level of consumption. In contrast to butter, cheese production was up in the August -October period. Cheese production patterns tend to reflect the rate of disappearance with butter receiving the residual butterfat. The Canad- ian Dairy Commission will purchase butter that is in excess of market needs. Stocks of cheddar, processed and specialty cheese remain fairly stable as processors must hold - them. The apparent consumption of cheese was running near year ago levels. The disappear- ance of specialty cheeses and cheddar (as such) was up, while processed cheese disapperance was below year ago levels. World Dairy Situation Excess production and huge stocks of dairy products continue to dominate the world dairy market. The result is depressed prices. Both the U.S. and the E.E.C. have greatly increased their stock levels in the past year. In the United States a new dairy bill was recently signed by the U.S. president and is now law. This bill reduces the support price for milk from $13.10 to $12.60 per cwt. an dpays a $10.00 per cwt. diversion fee toy producers that reduce production below a certain level. In Europe, the economic community is still searching for a plan, acceptable to all members, to reduce production. Proposals based on a quota system are being suggested but some countries are still refusing to accept this principle. Quick action is unlikley at this stage. Outlook This year's level of milk production is a concern to some. Fluid usage is up in most provinces. MSQ production is running well below year ago levels. This does not necessarily mean that total national produc- tion in the 1983/84 dairy year will be well below quota levels. Last year, dairy farmers produced greater than normal seasonal levels in the early part of the dairy year, this year production is below normal levels. We expect that national production will continue below normal `seasonal levels into 1984. By the third quarter (February -April) w expect that production will increase to or =,;,,Chu s MAROUE PI PINE RIVER CHEESE & BUTT Convenience Stor e REVUE RE IN.51O SpEC1Atst •Pine River Cheese *Ice Cream • Greaves Jams • Maple Syrup Products • Honey *Pop, Chips, etc. •Weston's Bread Products R.R. NO. 4 RIPLEY PINE RIVER CHEESE PRODUCTS •Cheddar Cheese •Colby Cheese •Brick Cheese •Farmers Cheese *Mozzarella Cheese *Flavoured Brick Cheese 395-2638 slightly above normal seasonal levels. This would leave a lot of quota to be filled in the final three months of the dairy year. Normally we would expect about 32 per cent of the total MSQ milk to be produced in these months. This year 35 per cent might have to be produced from May -July. We feel this is possible. Last year producers decreased production in this time period to a greater extent than most people felt possible. May to July is the time of the year when production can be increased most easily and fortheast cost. Butter stocks continue to hang over the market. These stocks can be expected to decrease this winter as less milk is directed to butter manufacturers and as the Canadian Dairy Commission is able to move some butterfat into world markets. We feel that these stocks will build back up in the latter part of the dairy year as producers increase production to meet their quota. This would leave excess stocks haning over the market entering the 1984/85 dairy year. World dairy prices will continue at a low level for the foreseeable ' future. This will mean that a massive export program will be too costly to implement. Producers will still be forced'to meet the costs of holding stocks of butter in storage until they can be absorbed by - the domestic market. We believe that demand has not increased enough to absorb excess stocks this year. Feed costs will continue to concern producers in early 1984. If normal weather conditions exist, total production of feed grains and oilseeds will be very high in 1984. We expect that this will cause food costs to begin to fall by late spring or early summer. Grants to improve creamery industry Nineteen Ontario cream -producers and one creamery have received grants from the Board of Industrial Leadership and Devel- opment (BILD). Agriculture and Food Minister Dennis Timbrell said the 59,348 in grants made under the Ontario Cream Assistance Pro- gram, are incentives to help Ontario farmers improve the quality of the cream marketed to Ontario creameries and to help modernize the creamery industry. Hagersville Creamery of Hagersville received a 51,056 grant for new butter wrapping equipment. The company invested another 52,561 in the project. The grants cover one third of the cost of upgrading butter wrapping equipment, installation of mechanical refrigeration on trucks, upgrading inplant can washing equipment, on farm coolers, and the purchase of containers for shipping bulk cream to farm separated cream plants. The ministry replaced all obsolete and defective cream containers in July 1982 by purchasing and distributing 27000 new plastic cream pails to • all creameries in Ontario. The total cost of $87,800" was absorved by this. BILD is a Cabinet committee which co-ordinates Ontario's five year $1.5 billion e Gnomic development plan. It has set aside $1.5 million for this initiative and has awarded 5232,054 to date. Equipment sales increase at show.. from page 3 An added feature at this year's show was the special agri-cornputer section supple- mented by a series of free computer seminars throughout the day. The seminars were designed to help farmers understand computers and to learn what a useful tool they are for the farm. Ab Moore, speaker from the University of Guelph, indicated that both the seminar and agri-computer section were well received by the farmer. "The farmers is anxious to explore any useful tools, avai1abY o�tim or assisting frn prnduttiviity gains," he said. yrs plail$01 TIME.. Fertilize now for a bumper crop of profits 1111 nil n• BULK BIEMD FERTILIZER B (Bagged) AT COMPETITIVE SPETITIVE P Bulk DeliveryCustom Spreading i Spreader Available �R �iCEND�OUR FERTILIZER Lets you meet your special requirements Large .Chemical Supply •W have a full line of small forage seed, Hyland mixed grain, barley, oats, wheal, soybean and white beans. •We also, have a supply of Funks seed corn. Phone 523-4241 or come in and see us for YOUR COMPLETE LINE OF SPRING PLANTING SUPPLIES Hotson & H�wson Limited Flour & Feed Millers, Complete Farin Supplies Grain Elevators WINGHAM, BLYTH, CARGILL