April 01, 2013 | Comments : 1

Commodities have had a rough ride over the past year, as a strong dollar has dulled the potential of many natural resources. However, we have also seen some solid performances out of a few commodities in the time frame as well.

In particular, ETF investors have seen some solid trading in the Teucrium Corn ETF ( CORN ) . This ETF remains the only pure play fund to target corn, and is thus a great proxy for the commodity’s performance.

Thanks to a big drought in 2012 and fears over a global food crunch, CORN was a top performer in the latter half of 2012, adding over 25% in the time frame. While the bulk of the gains came in June and July of the time period, CORN managed to hold firm for the rest of the year and stay at an elevated level.

A drought has been declared over the entire North Island and parts of the west coast of the South Island. An Agri-economist with ANZ, Con Williams, says food inflation has picked up generally in Pacific countries over recent months.

He says food isn’t a lot of Pacific countries’ total imports from New Zealand, but for specific sectors, like dairy products, it could have quite an effect.

Company chairman Zhang Lidian announced in a statement to the Hong Kong stock market that New Zealand's Overseas Investment Office (OIO), which considers all foreign investments valued at more than 100 million NZ dollars (83.96 million U.S. dollars), had granted consent to Yashili's plans to build a milk processing plant.

The company reportedly has plans to investment 230 million NZ dollars in building the plant just south of Auckland.

CORSICA, S.D. — California dairy farmers are listening to calls from South Dakota to grow the industry.

The Corsica Development Corp. recently hosted a few people from California interested in starting dairy operations in the Corsica area. Jamie Rexwinkel, president of the development corporation, said they visited about the process of locating a dairy farm in the area, looked at land, toured the town and its amenities, and looked at water needs.

The operation would house between 500 and 1,000 cows, Rexwinkel said.

“I don’t know if it’s promising,” he said. “Really, nothing’s promising until the shovel is in the ground.”

Gov. Dennis Daugaard and state agriculture officials visited the World Ag Expo in California in February to sell dairy farmers on expanding in South Dakota.

Fonterra's decision last week to lift the payout forecast by 30 cents to $5.80 a kilogram of milksolids will mean an extra $30,000 for a farmer producing 100,000kg of milksolids, plus another $4000 in dividends if they are fully shared up.

However, the best news for cash-strapped farmers was higher advance payments coming sooner. Next month they will receive $4.75/kg milksolids, 50c more than anticipated. The May advance would rise $4.25 to $4.95 and June's $4.40 to $5.15.

But the dairy giant warned that its strong first half earnings could be a one-off for the year, as drought conditions bite deep into milk production and the outlook for second half profit.

Milk Specialties Global, one of the nation’s largest providers of high-quality milk and whey proteins, achieved Milk Protein Concentrate production on February 14, 2013, in their latest expansion, in Visalia, California. 

David Lenzmeier, CEO stated, “Tulare County, California is one of the largest milk producing counties in the US. The ability to produce Milk Protein Concentrates in this county allows us to take full advantage of a fresh, local supply of milk, providing the highest quality Grade A, rBGH-free Milk Protein Concentrates to our customers. We are really excited to be able to meet our customers’ growing needs, and I would like to send my deepest appreciation to our MSG family for all of their hard work in getting our fifth food grade facility up and running.”

The Milk Protein Concentrate market is expanding in the areas of Sports Nutrition, for sustained release and Functional Foods, for protein fortification. Major growth categories include: ready-to-drink nutritional beverages, Greek yogurt, sports nutrition powders, processed cheeses and chocolates and candy.

Suvash Kafley, Director of Research & Development says, “With the growing demand of milk proteins and micellar casein, we have dedicated our Visalia, CA facility to Milk Proteins Concentrate and Isolate production. We will also be making native micellar caseins and low-grit micellar caseins, as well as caseinate replacers for creamer applications. The plant can produce high quality liquid or powder milk protein concentrates and isolates in less than 24 hours, allowing us to provide an estimated 1 million pounds each month, of milk protein concentrates and milk protein isolates to the market place, in order to meet current demand.”