‘Sandy’s’ milk disruptions seen as ‘manageable’

Major interstates around Philadelphia, including 200 bridges and roads in Pennsylvania, not to mention the hard hit areas of New Jersey and New York, were closed -- especially to truck traffic -- as “Superstorm Sandy” passed over the Northeast. New Jersey, New York City, and coastal Connecticut were particularly hard hit in terms of storm surge, flooding and debris. High winds also contributed to road restrictions for trucks and trailers.

The road and bridge closures, along with plant closings due to power outages, temporarily interrupted the flow of milk and livestock from farms to plants in the metropolitan areas of eastern Pennsylvania, New Jersey, and New York. The turnpike bridge across the Delaware River into New Jersey was deemed especially treacherous Monday night and early Tuesday due to high winds and lighting failures.

By 6:00 a.m. Tuesday morning, most bridges and highways were re-opened to truck and trailer traffic, but some heavily populated areas remained without power on Wednesday.

“From our standpoint on the farm side, we aren’t hearing of any issues in getting the milk picked up. There are some intermittent power outages,” reported Karen Cartier at Dairylea / Dairy Marketing Services
(DMS) based in Syracuse, N.Y. DMS is self-described as a milk-marketing organization that serves Northeast producers and industry by combining milk supplies of independent and cooperative farms.

“On the plant side, we had 200 loads turned back from Sunday to Tuesday with as many as 20 plants shut down,” Cartier added. “Some of those plants lost power and some were near the major metropolitan areas along the eastern seaboard where there were road closures as well.”

Cartier was quick to point out that, “We (DMS) are set up to hande this.That’s what we do. Yes, there were disruptions from this storm, but they have been manageable, not unlike what we see from the plant-side during snow storms. And the disruptions are much less than what we saw with the hurricanes last year.”

Meanwhile, reports from New Jersey indicate some milk that was picked up there, may have sat on trailers as bottling plants in the Garden State were closed. Those plants that were contacted did not return phone inquiries and appeared to be closed yet Tuesday and Wednesday.

Near Media, Pennsylvania, the Wawa plant reopened Tuesday after a 24-hour disruption.

“The storm hindered us a little,” said assistant plant manager Jim Shiflett in a phone interview Wednesday morning. “At this point, we are trying to restock everyone, and especially those stores that lost power during the storm. If the milk reaches a certain temperature, it has to be thrown away, so we need to restock what they’ve lost.”

The Pennsylvania-based Wawa has stores in Pa., N.J., Dela., Md., Va., plus Florida. They have stores on the Jersey and Maryland shores, and some of those stores were still without power Wednesday morning. Shiflett said the plant received milk for processing Monday and operated until 8:00 p.m., when employees were sent home before the weather emergency closures of roads and bridges. “We delayed receiving on Tuesday morning, but we did not turn milk away. We’re taking what milk we can get now. We are trying to work with our supply instead of sending our haulers all over.”

The Pennsylvania Department of Transportation said Monday night that more than 200 bridges and roads were closed because of downed trees, power lines and flooding, most of them in southeastern Pennsylvania. Wind gusts were clocked at around 70 miles per hour, with sustained winds at 40 to 50 mph, according to reports from the office of Pennsylvania Governor Tom Corbett.

Power outages and road closures also curtailed the movement of livestock this week. New Holland Sales Stables canceled its weekly dairy cattle sale Wednesday and postponed the annual “show and sale’ that occurs each year on the last Wednesday of October to be rescheduled for next Wednesday, Nov. 7.

Owner David Kolb reports that some cattle from last Thursday’s slaughter cattle auction are still being held at the yards. Packers were apparently concerned about transporting cattle and operating kill floors Monday, not wanting to be caught fresh meat in the coolers during potential power outages from the anticipated storm.

Even while somewhat manageable plantside disruptions have occurred in the milk and meat industries of the Northeast, the farm-side impacts have been less severe than many were bracing for.

After the ravages of Irene and Lee last year in the rural regions of the Northeast, a smaller-than-anticipated impact from Sandy brought a collective sigh of relief -- even as thoughts and prayers go out to the folks of New York City and coastal New Jersey, as well as the mountains of West Virginia, where Sandy’s impact has devasted homes, businesses, and infrastructure.

October Class III tops $21, stays step-ahe ad of ‘mover’

USDA AMS announced the October Class III price at $21.02/cwt. This is 32 cents higher than the Class I advance base price or ‘mover’ for November announced last week at $20.70 for next month’s Class I sales.

USDA AMS issued its monthly Class and Component price announcement Wednesday, October 30. The October Federal Order Class III price advanced $2.02 over September’s to $21.02. This is just about $3.00/cwt higher than a year ago.

The October Federal Order Class IV price was announced at $18.54, which is $1.13 higher than September’s and just 13 cents/cwt above year ago.

The October Federal Order Class II price was announced at $18.44, which is $1.40/cwt higher than September’s and 97 cents below the Class II price for October a year ago.

Further information from Wednesday’s price announcement was not available at Farmshine’s press time due to technical difficulties at the USDA Agricultural Marketing Service (AMS) website.

Meanwhile, the National Dairy Product Sales Report for the week ending October 27 reported the following
weighted average commodity prices: Butter was $1.8948/lb, which is about three cents/ lb lower than the previous week. Cheddar blocks were $2.0715/lb, close to two pennies lower than the previous week. Cheddar barrels were $2.0274/lb, nearly four cents below the previous week. Nonfat Dry Milk was reported
at $1.4861/lb, up a penny and a half from the previous week and Whey prices averaged just about 63 cents/lb, virtually unchanged from the previous week.

Powder exports out of New Zealand are reportedly up 66% over last year at the start of the Kiwi milk production season. Analysts report this suggests movement of carryover powder stocks to market.

CME market flat

The spot cash market on the Chicago Mercantile Exchange (CME) was mixed at midweek, with butter trading firm to stronger at $1.8975/ lb on October 30. Cheddar blocks held steady at $2.11/lb and barrels weakened down to $2.00/lb.

Grade A Nonfat Dry Milk is still pegged at $1.56/lb where it has been for a couple weeks, this is still about eight cents higher than the National Dairy Product Sales Report price and 20 cents/lb higher than the California price.

In the CME future markets, Class III milk remains above $21 for November contracts and just a tad over $20 for December.

Meanwhile, future contracts for the first 10 months of 2013 averaged at $18.76/ cwt on Wednesday’s close (Oct. 30).

The average closing price for 2013 Class III milk contracts has been moving in a narrow range between $18.65 to $18.85 for weeks.

Milk-feed ratio still poor

October’s milk-feed ratio was calculated by USDA at 1.68, this is up just 0.1 from September’s ratio and still well below the 2.0 mark.

This below-profit calculation was derived from USDA’s preliminary all-milk price for October of $21.10/cwt. This all-milk price is $1.50 higher than September’s all-milk price. However, USDA figured October’s alfalfa hay price at $212/ton, which is $7/ton higher than the previous month. The corn price was also figured six cents higher at $6.95/bu., while soybeans were 10 cents lower at $14.20/bu.

Farm Bill football

National Milk Producers Federation reports they believe they are “first-and-goal” in getting the Dairy Security Act passed in the Farm Bill after the November elections.

Meanwhile, the Goodlatte-Scott amendment is gathering support in the effort to modify the Dairy Security Act in the Farm Bill so that it does not include the onslaught of regulations, penalties and administration fees of the Dairy Market Stabilization portion (supply management). There’s still time to let your members of Congress know where you stand.

 

Editor's note: This "Market Moos" column first appeared in the November 2, 2012 print edition of Farmshine.