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This Week's Other Stories:

EDITORIAL COMMENT: Prospects Bright For Future US Cheese Consumption

LEAD STORY: Per Capita US Cheese Consumption Rose In 2009, Doesn’t Break Record

OTHER NEWS : New Jersey Conducting Dairy Work Sessions To Discuss Dairy Stabilization Options

GUEST COLUMNIST:  
Lessons Learned On The Safety Of Raw Milk Products by Paul Kindstedt

Cost Accounting Is Choking Your Business by Dan Strongin

COMPANY PROFILE:  
Sonoma County’s Valley Ford Cheese Company Earns Followers With Estero Gold

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Updated FAPRI Baseline Has Higher Butter, Lower Cheese Prices Over Next Few Years

Columbia, MO—An updated baseline released last Friday by the Food and Agricultural Policy Research Institute (FAPRI) includes several changes for the United States dairy sector through the year 2015, including higher average butter prices and lower average cheese prices.

The new report updates the full 2010 FAPRI long-term agricultural baseline that was released in March. Drought in Russia, the uneven recovery of the world economy and a number of policy developments have all contributed to changes in the outlook for agricultural markets in recent months, FAPRI explained.

Prices for dairy and meat products have recovered to a level that allows for most livestock and dairy producers to cover production costs, and some sectors are now profitable, the update noted.

In the Food and Agricultural Policy Research Institutes full baseline released in March, 2010 milk production was actually projected to decline from 2009, to 188.8 billion pounds, down 500 million pounds from 2009. FAPRI’s updated baseline has 2010 milk production rising 2.1 billion pounds over 2009, to a record 191.4 billion pounds.

But by 2015, the updated baseline projects that milk production will total 199.2 billion pounds, while the March baseline projected that 2015 milk production would total 200.3 billion pounds. The March baseline had projected milk production increases of over 2.0 billion pounds per year starting in 2011. The updated baseline projects a jump to 194.0 billion pounds of milk next year but then slower growth thereafter.

Dairy product production projections are mixed in the updated baseline.

In March, FAPRI projected that American cheese production would rise from 4.245 billion pounds this year to 4.626 billion pounds in 2015; in the updated baseline, American cheese output is projected to increase from 4.189 billion pounds this year to 4.453 billion pounds in 2015.

Production of other cheese was projected in the March baseline to rise from 5.948 billion pounds in 2010 to 6.413 billion pounds in 2015.

Now it’s projected to increase from 6.133 billion pounds this year to 6.49 billion pounds in 2015.

Butter production was projected in the March baseline to rise from
1.57 billion pounds this year to 1.652 billion pounds by 2015; now it’s projected to essentially remain flat, starting at 1.553 billion pounds this year, rising slightly through 2013 and then dropping to 1.552 bil-
lion pounds by 2015.

The Chicago Mercantile Exchange cash market for 40-pound Cheddar blocks in the updated baseline is projected to average $1.52 per pound this year and then rise slowly to $1.70 by 2015. The March baseline had projected a block price average of $1.68 per pound this year, slowly rising to $1.77 per pound by 2015.

For butter, the updated baseline projects that the CME butter price will average ..more