Butter Price Rides Rollercoaster
Published: Friday, July 23, 2021
The following is from Lee Mielke, author of a dairy market column known as "Mielke Market Weekly."
CME butter jumped the first two days of the week and hit $1.71 per pound but then reversed gears. It closed last Friday at $1.6775, up .25 cents on the week and 1.25 cents below a year ago, with 15 sales reported on the week.
Midwest butter plant managers continue to say cream is available, but offers are not as hearty as they were before and during the July 4 weekend. Bulk butter offers are slowing, too, but demand is not viewed as robust. Retail demand remains seasonally quiet, but food service continues to keep plants busy.
Cream availability in the West is constricting to varying degrees. Northwestern contacts say cream is tight after weeks of hotter than usual weather. Fluid haulers are in short supply. Tanker and driver shortages can make for unpredictable delivery timelines. Some butter plants are running reduced schedules due to lighter cream supplies. Further south, cream is in better balance. Yields are decreasing seasonally, but some handlers report California cream is outpacing local needs. Butter inventories are stable to heavier, though much is under contract. Retail sales are seasonally softer while food service demand is stable, according to DMN.
Grade A nonfat dry milk saw some ups and downs but ended last Friday at $1.2525, .25 cents higher on the week and 25.25 cents above a year ago, with 13 trades.
Exports are still helping to keep this market above $1.20, says StoneX, with Mexico holding a large role in keeping demand strong.
Dry whey closed at 53.75 cents per pound, up 3 cents on the week and 20.25 cents above a year ago, on five sales.
In politics, the Food and Drug Administration announced a final rule on the standards of identity for yogurt. The National Milk Producers Federation says the new rule defines what is and isn't yogurt and "has much broader, and potentially very positive, implications in one of the most contested consumer issues of the day, the proper labeling of milk and dairy products."
The new rule is modernized to fit changes in yogurt-making technology, according to NMPF, and revokes the previous individual standards of identity for low-fat and nonfat yogurt. Compliance is expected by Jan. 1, 2024.
"The new rule is rooted in a response to a citizen's petition from the National Yogurt Assn. filed in February 2000," NMPF stated. "The slow pace isn't unusual, unfortunately, and undoubtedly there will be quibbles with some details of the 22-page document." NMPF says "FDA's decision is important: It defends principles that support transparent food labeling and protects consumers. And those principles matter well beyond yogurt, with the FDA promising a review of a much larger issue, the labeling of plant-based milk alternatives by next June."
Dairy processors don't agree, however, and have filed a formal objection to the rule. Joseph Scimeca, senior vice president of regulatory and scientific affairs for the International Dairy Foods Assn., stated, "After 40 years of waiting since FDA first issued standards for yogurt, the FDA dropped a new final rule on the standard of identity for yogurt in late June, underscoring a lack of transparency in the FDA rulemaking process. Because the rulemaking process has been so severely delayed and because the agency has consulted very little with yogurt makers, the final rule is already out of date before it takes effect. For the most part, FDA relied on comments submitted 12 or more years ago to formulate its final rule, as if technology has not progressed or as if the yogurt making process itself has been trapped in amber like a prehistoric fossil."
"Although the IDFA, which represents the nation's yogurt makers, has been offering feedback or assistance to the FDA since it released its initial proposed rule in 2009, the agency has largely ignored our comments and suggested revisions to ensure a modernized standard. The result is a yogurt standard that is woefully behind the times and doesn't match the reality of today's food processing environment or the expectations of consumers. Unfortunately, IDFA has been left with no reasonable options except filing a formal objection to this final rule and imploring the agency to revisit the final rule to amend and truly modernize the standard of identity for yogurt."
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