Archive for the ‘News and Events’ Category

February Dairy Products report

USDA’s Dairy Products report estimated February 2011 butter production at 150.1 million lbs., down 9.8% from January 2011, but 6.4% more than February 2010.

Total cheese output was estimated at 807.1 million lbs., down 9% from January, but 4.1% more than a year ago.

Total Italian type cheese, at 352.2 million lbs., was down 9.3% from February, but up 6.6% from a year ago. Mozzarella cheese output totaled 274.2 million lbs., down 11% from January, but  5.8% more than a year earlier.

American type cheese production was estimated at 328.8 million lbs., down 8.5% from January, but 2.6% more than a year ago. Cheddar production totaled 242.9 million lbs., down 11.6% from January and 0.6% less than February 2010.

Nonfat dry milk output, at 109.6 million lbs., was down 6.4% from January 2011 and 6.9% less than a year ago.

 

DairyProfit Friday, April 1, 2011

An (almost) daily recap of dairy information: April 1, 2011

March federal, California order prices announced

Federal and California milk marketing order prices for manufacturing classes of milk were announced April 1.

The March 2011 federal order Class III price is $19.40/cwt., up $2.40 from February 2011 and $6.62 more than March 2010. The March 2011 Class IV price is $19.41/cwt., up $1.01 from February 2011 and $6.49 more than a year ago.

The California milk marketing order’s March 4b milk price is $16.76/cwt., down 16¢ from February 2011, but $5.63 more than March 2010. The 4a milk price is $19.06/cwt., up $1.18 from February 2011, and $6.22 more than March 2010.

IDFA advocates funding for LGM-Dairy

Connie Tipton, CEO of the International Dairy Foods Association (IDFA), called on Congress to
maintain funding for a federal risk management insurance program for dairy farmers.

In a letter to U.S. Sen. Debbie Stabenow (D-Mich.), chair of the Senate Committee on Agriculture, and U.S. Sen.  Pat Roberts (R-Kan.), ranking member of the committee, Tipton restated IDFA’s support for the Livestock Gross Margin-Dairy program.  Tipton pointed out the program’s increased relevance, with more than 1400 contracts issued in FY 2011.  Tipton cautioned that USDA has nearly reached its underwriting capacity for the program, and urged the senators to fund the program for the remainder of the year.

MARKETS: Cheese dips below $1.60/lb.

Closing on Friday, April 1:

Cheddar barrels: down 3.25¢, to $1.5725/lb.

Cheddar blocks: down 3.0¢, to $1.5950/lb.

Butter: down 1.0¢, to $1.99/lb.

Extra Grade nonfat dry milk: unchanged, at $1.80/lb.

Grade A nonfat dry milk: unchanged, at $1.70/lb.

Class III milk futures: mostly lower, steady to -16¢/cwt. through March 2012.

Corn futures: +10.0¢ tto +42.6¢/bushel through September 2012.

Soybean futures: -16.6¢ to -4.4¢/bushel through September 2012.

Soybean meal futures: -$9.80 to -5.00/ton through September 2012.

Drug residues … your problem?

The U.S. dairy industry is now under increased surveillance for drug residues in both meat and milk.  The Food & Drug Administration is stepping up its efforts to detect these substances in the food supply and has threatened stronger actions. To help dairy producers, veterinarians and industry professionals, two free webinars are scheduled, April 5 &  6.  These hour-long informational sessions are presented by American Farmers for the Advancement and Conservation of Technology (AFACT), and feature Dr. Mike Lormore, director of U.S. Dairy Veterinary Operations for Pfizer Animal Health. Register by visiting http://www.itisafact.org or e-mailing information@itisafact.org.

DAIRYLINE RADIO

Monday: DMI Update

In Monday’s DairyLine broadcast, Dairy Management Inc.’s Joe Bavido reviews the “Fuel Up to Play 60” program, which is gaining popularity. Launched by the National Dairy Council and the National Football League, with support from USDA, the program is now in about 70,000 schools.  To read the DairyLine broadcast comments, visit www.dairyline.com under “Today’s Dairy News.” Or, listen to the conversation with DairyLine’s Lee Mielke by clicking on “DairyLine Daily Broadcast.”

Check for daily DPW news updates at www.dairybusiness.com.

For a sample copy of Dairy Profit Weekly, or subscription information, visit www.dairyprofit.com or phone: 800-334-1904, ext. 244.

Dave Natzke, Editor

 

 

 

IDFA advocates funding for LGM-Dairy

Tipton asks Congressional ag committee chairs to ensure funding for balance of 2011

Connie Tipton, CEO of the International Dairy Foods Association (IDFA), called on Congress to
maintain funding for a federal risk management insurance program for dairy farmers.

In a letter to U.S. Sen. Debbie Stabenow (D-Mich.), chair of the Senate Committee on Agriculture, and U.S. Sen.  Pat Roberts (R-Kan.), ranking member of the committee, Tipton restated IDFA’s support for the Livestock Gross Margin-Dairy program.  Tipton pointed out the program’s increased relevance, with more than 1400 contracts issued in FY 2011.  Tipton cautioned that USDA has nearly reached its underwriting capacity for the program, and urged the senators to fund the program for the remainder of the year.

“Expanding this program is something that can be done now to help our nation’s dairy farmers,” wrote Tipton.  ”There is strong support among both producers and processors for the LGM-Dairy program.  As it now stands, the program has insured about 2.4% of the U.S/ milk production. Providing additional funding would make it available to more producers who may be just learning about the program for the first time.”

The Livestock Gross Margin insurance policy provides protection against the loss of gross margin (market value of milk minus feed costs) on the milk produced from dairy cows. The LGM for Dairy Cattle insurance policy uses futures prices for corn, soybean meal, and milk to determine the expected gross margin and the actual gross margin.  IDFA has consistently advocated for a safety net for dairy farmers, including
margin insurance like that offered through the LGM-Dairy program.

“While we understand current budget pressures, we urge you to consider funding the LGM-Dairy program for the remainder of this year so that our nation’s dairy farmers can be provided the tools available to others in production agriculture,” Tipton wrote.

Drug residues … your problem?

The U.S. dairy industry is now under increased surveillance for drug residues in both meat and milk.  The Food & Drug Administration is stepping up its efforts to detect these substances in the food supply and has threatened stronger actions, including jail time for violators.  While dairy accounts for only about 8% of all cattle slaughtered in the food chain, it has 90% of the violations for residues.

To help dairy producers, veterinarians and industry professionals, two free webinars are scheduled, April 5 and April 6.  These hour-long informational sessions are presented by American Farmers for the Advancement and Conservation of Technology (AFACT).  Dr. Mike Lormore, noted large-herd consultant and Director of U.S. Dairy Veterinary Operations for Pfizer Animal Health will present important information for dairy operators.  He’ll be joined by AFACT dairy producers in each session

Tuesday, Apr. 5, 1 – 2 p.m. (Eastern Daylight Time), with Ray Prock, of California

Wednesday, Apr. 6, 7 – 8 p.m. (Eastern Daylight Time), with Greg Jans of Minnesota.

Register by clicking the link http://www.itisafact.org or e-mailing information@itisafact.org.  Or call toll free 800.340.0737.  Protect your farm, your livelihood and consumer trust in your industry… plan to attend.

 

March federal, California order prices announced

Federal and California milk marketing order prices for manufacturing classes of milk were announced April 1, noted DairyLine Radio’s Lee Mielke.

March 2011 federal, California order milk prices, compared to February 2011 and March 2010

The March 2011 federal order Class III price is $19.40/cwt., up $2.40 from February 2011 and $6.62 more than March 2010. The March 2011 Class IV price is $19.41/cwt., up $1.01 from February 2011 and $6.49 more than a year ago.

March 2011 federal order Class II, III & IV prices are the highest dating back to 2007-08. Through the first quarter of 2011, averages and changes compared to the same period of 2010 are: Class II – $17.86 /cwt., +$2.75; Class III – $16.63/cwt., +$2.78; & Class IV – $18.08/cwt., +$4.86.

The California milk marketing order’s March 4b milk price is $16.76/cwt., down 16¢ from February 2011, but $5.63 more than March 2010. The 4a milk price is $19.06/cwt., up $1.18 from February 2011, and $6.22 more than March 2010.

Through the first quarter of 2011, averages and changes compared to the same period of 2010 are: Class 4a – $17.81/cwt., +$4.67; Class 4b – $15.39/cwt., +$3.12.

Market analyst Alan Levitt told DairyLine the California order uses the Chicago Mercantile Exchange (CME) block cheese price in its milk price calculations, instead of the USDA National Ag Statistics Service (NASS) survey prices used in federal orders.

CME cheddar block prices crashed in mid March, thus the drop in California’s March 4b price. The impact won’t show up in the federal order Class III price until April, due to the lag in the NASS surveys. Also, rising whey prices have no bearing on the California 4b price, but do impact federal order Class III prices. So, that added to the federal order Class III/California 4b disparity in March.

Looking at the past week, cash cheddar blocks closed Friday at $1.5950/lb., down 3.5¢ on the week, but 16.5¢ more than the corresponding week a year ago. Cheddar barrels closed at $1.5725/lb., down 6.75¢ on the week, but 19.75¢ more than a year ago. Thirty-nine carloads of blocks traded hands; three of barrels.

Butter finished the week at $1.99/lb., down 8.5¢ on the week, but still 49.5¢ more than the corresponding week a year ago. Seventeen cars were sold.

Cash Grade A nonfat dry milk closed Friday at $1.70/lb., down a nickel; while Extra Grade held all week at $1.80/lb.

 

This week in DairyProfit Weekly

This week in Dairy Profit Weekly:

1) Crop reports: With many crop marketing analysts portraying the 2011 planting season as “acreage wars,” two of the more highly anticipated USDA reports were released, March 31. Anticipated corn acreage came in higher than many market analysts had predicted, but corn inventories were lower. Soybean acreage and stocks estimates were lower than many forecasts. The impact was felt on the Chicago Mercantile Exchange.

2) Dean and the courts: Attorneys General in Illinois, Michigan and Wisconsin joined the U.S. Department of Justice in filing proposed consent decrees requiring Dean Foods to sell its milk processing plant in Waukesha,Wis. The proposal regards a federal lawsuit challenging Dean’s 2009 acquisition of the fluid milk plant from Foremost Farms USA.

3) DPW Trends: March federal order Class II, III and IV prices are the highest in three years, and probably the highest of 2011. (California order prices were unavailable at DairyProfit Weekly’s press deadline.) The March milk-feed ratio improved a little; cull cow prices remain high.

4) DPW Numbers: January U.S. fluid milk sales were down a little. A new study measures the U.S. beef industry’s social and environmental impact.

5) DPW Washington: Low levels of radiation found in milk in Washington and California; Congress addressing ag credit issues; Senate ag committee to launch 2012 Farm Bill hearings.

Dave Natzke, Editor

For a sample copy of Dairy Profit Weekly, or subscription information, visit www.dairyprofit.com or phone: 800-334-1904, ext. 244.

 

DairyProfit Thursday, March 31, 2011

An (almost) daily recap of dairy information: March 31, 2011

USDA: More corn acreage, less soybeans

With many crop marketing analysts portraying the 2011 planting season as “acreage wars,” two of the more highly anticipated USDA reports were released on Thursday, March 31.
According to the Planting Intentions report, corn is the early leader in the battle for acreage. USDA forecasts growers intend to plant  92.2 million acres of corn in 2011, up 5% from last year and 7% more than 2009. If realized, it would be the second largest area planted to corn since 1944, behind only 2007.
Soybean planted area for 2011 is estimated at 76.6 million acres. While down 1% from last year, it would still be the third largest on record.
Based on the Grain stocks report, corn stored in all positions on March 1 was estimated at 6.52 billion bushels, down 15% from a year ago. Soybeans totaled 1.25 billion bushels, down 2% from March 1, 2010.
Estimated corn acreage came in somewhat higher than many market analysts had predicted, but corn inventories came in slightly lower. Soybean acreage and stocks estimates came in slightly lower than many forecasts.
The Planting Intentions report provided good news for dairy producers who feed cottonseed. All cotton plantings for 2011 are expected to total 12.6 million acres, 15% more than last year and increasing in every cotton-growing state.

MARKETS: Corn futures ‘limit up’ after USDA report

Closing on Thursday, March 31:
Cheddar barrels: down 1.25¢, to $1.6050/lb.
Cheddar blocks: down 0.75¢, to $1.6250/lb.
Butter: unchanged, at $2.00/lb.
Extra Grade nonfat dry milk: unchanged, at $1.80/lb.
Grade A nonfat dry milk: down 3.5¢, to $1.70/lb.
Class III milk futures: +2¢ to +20¢/cwt. through March 2012.
Corn futures: +30.0¢/bushel through September 2012.
Soybean futures: +29.0¢ to +38.2¢/bushel through September 2012.
Soybean meal futures: +$6.40 to +10.20/ton through September 2012.

AMPI sales growth continues
Sales growth continued in 2010 for Associated Milk Producers Inc. (AMPI), a dairy marketing cooperative owned by 3,000 Midwest dairy producers. More than half of the cooperative’s $1.7 billion in sales came from consumer-packaged dairy products.

DAIRYLINE RADIO

Thursday: National Milk Producers Federation

In Thursday’s DairyLine broadcast, National Milk Producers Federation’s Chris Galen discusses the upcoming National Dairy Producers Conference (formerly known as the National Dairy Leaders Conference), to be held May 15-17, in Omaha, Neb.

Friday: DairyProfit Weekly

In Friday’s DairyLine broadcast, DairyProfit Weekly editor Dave Natzke reviews Thursday’s USDA Grain Stocks and Planting Intention reports. Corn is the early leader in the 20111 “crop wars.”

To read the DairyLine broadcast comments, visit www.dairyline.com under “Today’s Dairy News.” Or, listen to the conversation with DairyLine’s Lee Mielke by clicking on “DairyLine Daily Broadcast.”


EASTERN DAIRYBUSINESS

Beginning a career in dairy is still possible
There’s no doubt that getting started in the dairy business is not always the easiest task, but two individuals shared how it can be done. During the Professional Dairy Producers of Wisconsin annual conference in Madison, Matthew Berge and Mark Mayer explained how they were able to begin their careers using perseverance, hard work and some creative business planning.

Check for daily DPW news updates at www.dairybusiness.com.
For a sample copy of Dairy Profit Weekly, or subscription information, visit www.dairyprofit.com or phone: 800-334-1904, ext. 244.
Dave Natzke, Editor

 

AMPI sales growth continues

Delegates review co-op performance, policies at annual meeting
Sales growth continued in 2010 for Associated Milk Producers Inc. (AMPI), a dairy marketing cooperative owned by 3,000 Midwest dairy producers.

More than half of the cooperative’s $1.7 billion in sales came from consumer-packaged dairy products. AMPI processes milk, manufactures dairy products and packages them for customers at 12 plants throughout the Upper Midwest.

“AMPI product sales have grown for five consecutive years,” AMPI President and CEO Ed Welch told some 400 delegates and guests gathered for the co-op’s annual meeting at the Sheraton Bloomington Hotel, Bloomington, Minn.

Sales of packaged and processed cheese grew 5%, and butter sales were up 7%. Other areas of increased product sales included pudding and cheese sauce, 10%; and ice cream mix, 19%.

In detailing AMPI’s 2010 results, Welch said the industry saw increased global demand for dairy proteins, which led to improved milk prices following the depressed markets of 2009. AMPI sold more than 28 percent of its powdered dairy products internationally.

Despite strong sales and profitable operations, a year-end market drop devalued product inventory and resulted in a $1.5 million loss for the cooperative. AMPI members still shared $12.9 million from the previous year’s earnings and member equity.

Following the performance review, AMPI Chairman of the Board Paul Toft outlined the cooperative’s policy priorities. “We stepped up our policy-making efforts this past year, urging lawmakers to enact legislation that would decrease milk price volatility and increase dairy farmer profitability,” he said.

Additional AMPI 2010 operational highlights:

·       Producing 6 billion pounds of milk, matching quantity with ever-increasing quality.
·       Investing in the cooperative’s manufacturing network, upgrading whey drying, cheese processing and butter packaging equipment.
·       Serving customers like McDonalds, Sysco and ALDI who continue to rely on AMPI to make the product marketed under their label.

New leadership

Steve Schlangen, a dairy farmer from Albany, Minn., will lead AMPI. He was elected chairman by the board of directors immediately following the close of the dairy marketing cooperative’s annual meeting. Schlangen owns and operates a 65-cow dairy farm and has served on the AMPI Board of Directors since 2001 and has been an elected official for 20 years. Schlangen succeeds Paul Toft, who retired after serving as AMPI chairman for the past decade. Toft farms near Rice Lake, Wis.

The AMPI Board of Directors also elected the following members to serve as officers of the board: Doug Temme, Wayne, Neb., vice president; Phil Johnson, Holmen, Wis., secretary; and Brad Nevin, Rice Lake, Wis., treasurer. In addition to the officers, other executive committee members include: Bruce Brockshus, Ocheyedan, Iowa; John Grafenberg, West Union, Iowa; Bruce Maas, Walnut Grove, Minn.; Harvey Phelps, Cornell, Wis.; and Dave VanderKooi, Worthington, Minn.

Joining the AMPI Board of Directors in 2011 are Mark Kaeding, Augusta, Wis.; James Koser, Almena, Wis.; and Dave Sullivan, Oelwein, Iowa.

About AMPI: Associated Milk Producers Inc. (AMPI) is a dairy marketing cooperative with 3,000 member farms, 6 billion lbs. of milk and $1.7 billion in annual sales. Members operate dairy farms located throughout the Midwest states of Wisconsin, Minnesota, Iowa, Nebraska, South Dakota and North Dakota. They own 12 manufacturing plants and market a full line of consumer-packaged dairy products, including the Cass-Clay® brand. For more information about AMPI, visit the cooperative’s website at www.ampi.com.

 

USDA reports: Some surprises

Issued by Darrel Good
Department of Agricultural and Consumer Economics
University of Illinois

The much anticipated USDA Prospective Plantings and Grain Stocks reports were released this morning and contained a few important surprises. For a review of the USDA methodology for the Prospective Plantings report, see our recent Marketing and Outlook Brief.

For the crops included in the report of planting intentions, total planted acreage is expected to increase by 8.276 million acres from that of 2010. That increase is in line with expectations. Harvested acreage of hay is expected to decline by 889,000 acres. Compared to last year, producers intend to plant more corn, sorghum, spring wheat other than durum, canola, and cotton. Winter wheat seedings were 3.9 million larger than acreage seeded for harvest in 2010. Fewer acres are planned for oats, rice, soybeans, sunflowers, durum wheat, and dry edible beans.

Planting intentions for corn were reported at 92.178 million acres, 3.986 million more than planted last year. Intentions are within the range of expectations. The largest increases are expected in Iowa, North Dakota, Nebraska, Kansas, Ohio, Illinois, and Minnesota. Fewer acres are expected in South Dakota and Texas. The implication of the planted acreage estimate for the size of the 2011 crop hinges on yield expectations. In general, the market may still have too high of an expectation for the trend yield in 2011 and therefore too high of an expectation about actual yield. For a discussion of yield implications for production and price, see our recent Marketing and Outlook Brief.

Planting intentions for soybeans were reported at 76.609 million, 795,000 fewer than planted in 2010. Intentions are within the range of expectations. The largest declines are expected in Iowa, Kansas, Ohio, and Mississippi. More acres are planned in Missouri, Tennessee, and North and South Dakota.

The surprises in today’s report were in the estimates of March 1 stocks. At 6.523 billion bushels, March 1 inventories of corn were 1.171 billion bushels smaller than last year’s stocks and 167 million less than the average trade guess. In the last few days there was a lot of chatter about the corn market not having the “feel” of tight stocks and some had expected the March 1 stocks estimate to be much larger than the average guess. The stocks estimate implies a very high rate of feed and residual use of corn in the second quarter, and now, the first half of the year. Just when it looked like the rationing job had been completed, this report suggests that corn is still being used too rapidly. The weaker old crop prices going into the report may now have to be reversed.

March 1 stocks of soybeans were reported at 1.249 billion bushels, 21 million bushels smaller than stocks of a year ago. The average trade guess was for stocks to be about 30 million larger than stocks of a year ago. The stocks estimate implies a large residual use of soybeans in the second quarter and first half of the year. Like the corn stocks estimate, the estimate of soybean stocks implies that more rationing of the 2010 crop is required.

With such tight inventories of corn and soybeans, the size of the 2011 crops takes on even more importance.

 

 

USDA: More corn acreage, less soybeans

With many crop marketing analysts portraying the 2011 planting season as “acreage wars,” two of the more highly anticipated USDA reports were released on Thursday, March 31: The Grain Stocks report estimated current grain inventories; and a Planting intentions report providing a glimpse of what farmers intend to plant this spring.

Indications are that corn is the early leader in the battle for acreage. USDA forecasts growers intend to plant  92.2 million acres of corn in 2011, up 5% from last year and 7% more than 2009. If realized, it would be the second largest area planted to corn since 1944, behind only 2007’s 93.5 million acres.

Acreage increases of 250,000 or more are expected in Iowa, Kansas, Nebraska, North Dakota, Ohio, and South Dakota. The largest decrease is expected in Texas, down 150,000 acres.

Soybean planted area for 2011 is estimated at 76.6 million acres. While down 1% from last year, it would still be the third largest on record. Compared with last year, planted acreage declines of 100,000 acres or more are expected in Iowa, Kansas, Mississippi, Nebraska, and Ohio. If realized, the planted area in New York and North Dakota will be the largest on record.

Looking at the Grain Stocks report, corn stored in all positions on March 1 was estimated at 6.52 billion bushels, down 15% from a year ago. Of the total stocks, 3.38 billion bushels are stored on farms, down 26% from a year earlier. Off-farm stocks, at 3.14 billion bushels, are down slightly from a year ago. The December 2010-February 2011 indicated disappearance is 3.53 billion bushels, compared with 3.21 billion bushels during the same period last year.

Soybeans stored in all positions on March 1 totaled 1.25 billion bushels, down 2% from March 1, 2010. Soybean stocks stored on farms are estimated at 505 million bushels, down 17% from a year ago. Off-farm stocks, at 744 million bushels, are up 13% from last March. Indicated disappearance for the December 2010-February 2011 quarter totaled 1.03 billion bushels, down 4% from the same period a year earlier.

Estimated corn acreage came in somewhat higher than many market analysts had predicted, but corn inventories came in slightly lower. Soybean acreage and stocks estimates came in slightly lower than many forecasts, so we’ll probably see some futures price reaction as the week closes.

The Planting Intentions report provided good news for dairy producers who feed cottonseed. All cotton plantings for 2011 are expected to total 12.6 million acres, 15% more than last year and increasing in every cotton-growing state. The largest increase, at 548,000 acres, is expected in Texas. Acreage increases of more than 100,000 acres are expected in North Carolina, Georgia and Mississippi.

 

Responses, reactions

The Renewable Fuels Association (RFA) provided early reaction to the Planting Intentions report, noting corn and wheat numbers are higher than the trade expected, while the soybean number is slightly below the average trade estimate.

Based on this acreage estimate, RFA said corn yields would need to average 159.7 bushels per acre to maintain current carry-out levels. To increase carry-out stocks to near 1 billion bushels, an average yield of 163.5 bushels per acre would be needed.

“Such a yield is entirely possible and in line with trend yield growth from the last 15 years,” according to an RFA release. “In 2009, American farmers set the all-time yield record at 164.7 bushels per acre. (USDA’s) acreage estimate clearly shows that American farmers  respond to signals from the marketplace.  There is every expectation that farmers will once again produce the corn that is needed to meet all demands.”

Expanding Corn  Belt

“We’re seeing a greater increase in the western part of the Corn Belt,” noted odd Davis, crops economist with the American Farm Bureau Federation. “Iowa is projected to increased planted acreage by 500,000 acres, while Nebraska is expected to increase planted acres by 350,000 acres. The Corn Belt is expanding to non-traditional regions. Acreage is projected to expand by 450,000 in North Dakota, and by 850,000 in South Dakota with an increase of 310,000 acres in the southern Unites States as well.”

While USDA is projecting a 4-million acre increase for corn over last year, Davis notes that at current trend yields, corn stocks are not expected to build tremendously. Stocks are expected to increase by just 200 million bushels, if the weather cooperates.

“The story is we are expected to keep stocks relatively tight, under 10 percent, and that’s going to keep the market concerned,” Davis said. “The market is going to be watching closely the planting progress and weather throughout the growing season.”

 

(Check back for additional reaction later.)

 

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