Report of the NAJ General Manager

Guiding the Ship in Unchartered Waters

Excerpts from the report of Erick Metzger, General Manager National All-Jersey Inc. (NAJ) at the 62 nd Annual Meeting of the organization on June 26, 2020, conducted virtually in Columbus, Ohio.

Though we gather for our annual meeting this year under very different circumstances, our efforts to fulfill the mission of National All-Jersey Inc. remains the same. NAJ continues to work to help Jersey breeders discover and capitalize on Jersey advantages, and, in recent months, to navigate the uncertain economic culture that has resulted from the COVID-19 pandemic.

A2 Beta Casein Research Results

Results for the A2 beta casein research f u n d e d by N A J a n d the A2 Milk Company and conducted by Dr. Dennis S a v a i a n o a t P u r d u e U n ive r s i t y were released in May. T h e Metzger clinical trial h a d t w o primary goals: determine if A2 milk provides a benefit to consumers who are lactose intolerant, and, if so, does the milk need to be fully A2 or is there a lesser threshold that would deliver the same benefits? Four treatments were used: commercial milk (25% A2), Jersey milk (75% A2), A2 milk (100% A2) and commercial lactose-free milk (control). Participants were then monitored for breath hydrogen levels (objective test) and selfreported physical symptoms (subjective test).

In the measured test, Jersey milk and A2 milk resulted in significantly less hydrogen production than commercial milk. In the subjective test, participants reported the fewest symptoms with A2 milk. Total symptoms for Jersey milk and commercial milk were similar.

The results are not easily explained as one would expect production of hydrogen to closely align with symptoms. A larger sample size may have produced results in closer alignment. Fortunately, research on A2 milk is ongoing with larger trials, so we can expect to increase our scientific knowledge significantly in the next year or two. For complete results, read the June 2020 issue of the NAJ Equity Newsletter online at https://www.usjersey.com/Portals/0/ NAJ/2_Docs/Equity-Newsletter.pdf. Or watch a video on the AJCA YouTube channel at https://www.youtube.com/watch?v=_ GSdDxTVPz8&feature=youtu.be.

Dairy Markets

What has happened in dairy markets in the wake of the pandemic is unprecedented to say the least. In early March with the onset of stay-at-home orders and travel restrictions, there was a slight uptick of retail sales in grocery stores and a slight decrease in restaurant sales. Two weeks later, grocery stores were running out of product with a 77% spike in sales and restaurant sales were down 66% compared to last year. Grocery sales settled to about 20% higher than last year. Restaurant sales recovered slightly but continued to run more than 40% lower.

This wreaks havoc on infrastructure because manufacturers cannot pivot on a dime, moving product from food service to retail. There were a lot of dairy processors who were no longer taking in milk because they had more product than they needed and no buyers.

Prices on the Chicago Mercantile Exchange (CME) took a hit in late March and then plummeted in April, with block and barrel cheese trading for barely $1 a pound and butter at $1.15. And then, just as suddenly and unexpectedly, prices rebounded. The first week of May, all commodities saw a slight uptick to the $1.20 price range. Then they really took off, increasing about 20 cents a pound each week. By early June, block cheese was $2.50 a pound, butter was near $2.30 and barrel cheese was $1.75. Within a six-week period, block cheese moved from $1 a pound to a record $2.50 and was trading at $2.80 in late June.

What caused this? In a nutshell, supply decreased, and demand increased in significant ways. When prices fell to $1 a pound, many cooperatives established producer base excess plans tied to historical production. Anything under base was purchased at regular prices. Production above base was severely penalized, in some cases as much as $10-15 per hundredweight.

This strong incentive to cut production worked. While March production was 2.8% above last year and April was 1.4% ahead,

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