“Secret” Canadian Class 7 Milk Price Formula Revealed!!!

1 Secret Canadian Class 7 Milk Price Formula Revealed!!! byPete Hardin tery to outsiders ever since. At least now, global The Canadian Class 7 milk Price also uses the dairy protein powder marketers can know what Price lowest global Price quote for butterfat. However, at The Canadian dairy industry is utilizing its new basis their Canadian competitors are using to dra- this time, global butterfat supply/demand is tight and Class 7 Price as a double-whammy rendering matically undercut global prices. prices are high. So the Canadians are less inclined to as uneconomical use of Ultra-Filtered sell cut-rate butterfat on the global market.

2 In fact, The Class 7 Price Formula 's predominant fea- milk, plus undercutting global dairy exports Canada is a major outlet for cream and butter. ture incorporates a classic, dairy bottom-feeder . Documents made available to The Milkweed include strategy: Pick the low end of the lowest available specific details of those pricing strategies by Cana- March 2017 lowball sales Price list global Price quote for Skim Milk Powder (SMP). da's dairy industry through the secretive Class 7 Another document a Price list of Special prices and then subtract a hefty manufactur- Price . Milk Class Prices offered for the period of March 1. ing allowance to guarantee processors' profits.

3 Secretive? Of course, information on the through March 31, 2017 was also made available The Class 7 Formula sorts out the lowest of monthly Class 7 Price calculation is known to to The Milkweed. three SMP quotes using USDA's Dairy Market provincial Canadian dairy officials the folks who That sales sheet issued by the Canadian Dairy News' every other week International Dairy Mar- set prices for milk paid to Canadian dairy farmers. Commission lists Prices for Class 7 Products . kets reports as data sources. Dairy Market News is The Class 7 Formula was once very briefly posted on that work out to $ ($Can). Using an esti- internationally recognized for its excellence in dairy a website by Canadian dairy authorities, but was mated.

4 73:1 exchange rate for the Canadian and reporting and analysis. So why should the Canadi- erased within a few hours and has remained a mys- currencies, that Price works out to an equivalent of ans reference anything but the best??? $ ($US). That abysmal Price is far below #"+!! ' . % % * %! # & + & any global prices offered by major international &&'# . ' %. #. $ '%. dairy commodity sellers, such as the European ('&'%'$#' Canada's ,+*)(' (')&%$ Union, New Zealand and the United States. " CBA@?>=<;:?9< ! 876653 876810. /.;.-,;+/.)9(>> < Class 7 80817'1 &8%%76% Class 7 Formula uses lowest global SMP Price C$#("<;.-,;+/.)9(>> < 8011711 &8337&!))

5 The hyperactive dairy rumor mill has been A<?> ?;.-,;+/.)9(>> <. Formula &15%7!1 &'6%7!1 reporting, for the past several weeks, that Canadian - ( < 9;.-,;,# A<;+/.)9(>> < 8011711 &8337&! sourced Skim Milk Powder (SMP) products have ,# A<;+ ) =;( ;.-, # ! " &7!'66 &7560% been undercutting global prices by about $200/met- + ) =;( ; ( # &7!0!& &750%% ric ton in Mexico and Southeast Asia. Dairy indus- ,#(A< (#;-?#= >;+ ) =;( ;.( ' " " 1706%0 1706%0 try sources also say that Canadian SMP is being "" #"+!! ' & # & ' ( ' ( offered to buyers at prices ranging from $.66/lb. /.; ;+/.)9(>> < 6&857%& 6&05736 to $.70/lb. SMP is the basic global standard for dairy C$#("<; ;+/.))))))))

6 9(>> < 6111711 6&!37&! protein powders. SMP is reduced-protein cousin . A<?> ?; ;+/.)9(>> < &0%!711 6&'67%! of nonfat dry milk. SMP's protein content is 34% . ( < 9; ;,# A<;+/.)9(>> < &0%!711 6&'67%! a standard set by CODEX. ,# A<;+ ) =;; ! " 6705&6 '7&!&& Bottom-line: Canada's March 2017 Price sheet + ) =;( ; ( '781!! '7656% breaks down to a lower-cost Price advantage of :< <>$< ; #( ;. ;+ ) =;.( & " 87&868 87'6'! $ ($US) per pound on sales to Southeast Asia, " "" :< <>$< ;9(; <;=<> <#?9< ; #( ; ;+ ) = . ' 870!'! &7188' compared to products. #"+!! ' & # ' ( ' dairy sources report that Canadian SMP. delivered to Mexico is priced at levels that would 87; ?)))))

7 > ;( ; ?>? ?; (>9@ ;? <#?=<;#?9< require low 70s ( , cents/lb.) to match those @99" )) 7 ?> ( A?>? ?7A?)#?9< )<BA@?>=<) ? <BA@?>=< #?9< (( $") offers. Mercifully, Canada is not a major dairy pro- &7; ..; << ;/.;"# A<; (#; (> ?9; # ;- ; ? <#?=<;( ; ( 9;#<A<>9;'; << ; tein powder exporter. Volumes of Canadian SMP are @99" )) $9$#<7??<7 A7< $) ?9?) << ? $< ) ?#<?)83&% 9? "# A< ; believed to be relatively limited, compared to hold- 67;/. ; >9<#>?9 (>? ; ? # ;,#( $A9;,# A< ;.-,; ? <#?=<;( ; ( 9;#<A<>9;'; << ; ings of major global players such as the European @99" )) $9$#<7??<7 A7< $) ?9?) << ? $< ) ?#<?)8%1% 9? "# A< Union and New Zealand.

8 '7;/. ; >9<#>?9 (>? ; ? # ;,#( $A9;,# A< ; ; ? <#?=<;( ; ( 9;#<A<>9;'; << ; Ironically, information available to The Milk- @99" )) $9$#<7??<7 A7< $) ?9?) << ? $< ) ?#<?)8%1! 9? "# A< weed reveals that Canadian SMP is priced cheaper in !7;/. ; ? # ;-?# <9; << ;/.;"# A<; (#; # ; @( <;- ; ? <#?=<;( ; ( 9;#<A<>9;'; << ; Southeast Asia than to Mexico. That's because of a @99" )) $9$#<7??<7 A7< $) ?9?) << ? $< ) ?#<?)6%1' 9? "# A< quirk in international shipping rates. The large num- 37; ? < ;(>;?;& ;.-,; ( 9$#<;A(>9<>9; ber of ocean-going freighters leaving Pacific ports %7; ? < ;(>;?;"#(A< (#; ?#= >;;( ;170808;+) =;( ;.-,;?> ;;?)))

9 $ >=;?;& ; ( 9$#<; from the United States and Canada empty means A(>9<>9. ;9@<;#< $ 9 >=;A(>9<>9; ;1706%0; =;. ) =;( ;9(9? ; ( ; >;.-,; back-haul rates are exceptionally cheap. 57; ? < ;(>;?;6 ; -,; ( 9$#<;A(>9<>9; Historically, Canada's dairy industry has man- 07; ? < ;(>;?;%8 ;. ;A(>9<>9; >; -,;?> ;6 ; ( 9$#<. ;9@<;#< $ 9 >=;A(>9<>9; ;. This material aged its overall milk supply through a system of farm 17%6&1; =;. ) =;( ;9(9? ;; ( ; >; -, reformatted milk quotas. Canada has historically plotted to pro- 817; ? < ;(>;?; ;A(>9<>9; >; -,;?> ;6 ; ( 9$#<. ;9@<;#< $ 9 >=;A(>9<>9; ; from original duce close to its national needs for butterfat, and thus 17 =;( ; ;"<#; =;( ;9(9?)))))))))))))))))))))

10 ; ( ; >; -, document to run long on nonfat milk solids. Canada has protect source. evolved as a significant destination for exports 887; $ <# ;?#<;#($> < ;9(;9@<;'9@; <A ? ;" ?A<;. of cream and butter, according to press reports. Ultimately, the Canadian documents reflect hypocrisy. Through the Class 7 pricing system, Canada is simply undercutting prices to export buy- ers on dairy proteins. And that's basically what March 2017 Canada has sought to block low-cost, duced, dairy proteins crossing the border to our Canadian Dairy neighbor to the north. Processor Currently, numerous dairy interests are demanding an investigation of Canada's Class 7.)))