DairyBusiness Update for Feb. 13, 2013
U.S. Sens. Chuck Grassley (R-Iowa), Tim Johnson (D-S.D.), Mike Enzi (R-Wyo.) and Sherrod Brown (D-Ohio) introduced legislation placing a hard cap on the farm payments an individual farmer can receive in a year, closing loopholes in the farm payment program.
The Farm Program Integrity Act of 2013 mirrors language that was included in the Senate-passed farm and nutrition bill in 2012. The legislation would establish a per farm cap of $50,000 on all commodity program benefits, except those associated with the marketing loan program (loan deficiency payments and marketing loan gains), which would be capped at $75,000. Thus the combined limit would be $125,000, or, for married couples, $250,000. The $50,000 cap would apply to whatever type of program is developed as part of the new Farm Bill. The bill also closes loopholes that currently allow non-farmers to qualify for federal farm payments.
Beyond the hard caps on farm payments, the bill also includes a provision to begin closing the loopholes that allow people who aren’t involved in farming to collect farm payments. The bill would define clearly the scope of people who are able to qualify as actively engaged by only providing management for the farming operation. The bill will allow one off-farm manager, but only one.
MilkPEP gearing up for National Breakfast Week
The Milk Processor Education Program (MilkPEP), fresh off its first-ever Super Bowl commercial, has set its sights on National Breakfast Week, March 4-8, and will be celebrating in partnership with Kellogg's.
Through March 8, Kellogg's will feature milk and breakfast side-panel messaging on 50 million cereal boxes and distribute approximately 7 million coupon booklets in specially marked packages, offering $2 off the purchase of two boxes of Kellogg’s cereal and two gallons of milk. Additionally, Kellogg will donate breakfast to a child in need with every coupon redemption or Facebook post. In support of Kellogg’s efforts, actor Taye Diggs will help bring awareness to the importance of breakfast with milk and the Share Breakfast efforts.
The Kellogg’s partnership is a natural one for MilkPEP. Together, cereal and milk is a leading source of 10 nutrients important to growing bodies, and it provides all four of the nutrients Americans are missing most – calcium, potassium, vitamin D and fiber.
Visit www.TheBreakfastProject.com during National Breakfast Week for content, tips and news from MilkPEP and Kellogg’s.
Weakness in the second half of 2013 should not diminish the overall outlook and focus of U.S. dairy product exporters, according to leaders of the U.S. Dairy Export Council (USDEC).
The second half of 2012 illustrated a marked difference from the first. U.S. export volumes grew nearly 8% January-June, compared to the same period the previous year, but declined 2% July-December. And aggregate U.S. export volume in the second half was 9% lower than shipments in the first half.
“Our export softness in the second half primarily stems from unfavorable pricing shifts,” said Tom Suber, USDEC president.
In the first half of 2012, near-perfect weather and strong returns for dairy farmers in major export regions triggered record milk production, pushing global prices about 20% lower, on average, than the previous year. When the U.S. drought hit, domestic supply concerns sent U.S. prices, which had been tracking closely with Oceania, sharply higher.
“The underlying fundamentals behind rising global dairy consumption remain, but a cyclical price rise in the United States reined in U.S. supplier growth in the second half,” said Suber. “The fact that U.S. exports did not plummet, as they did following the 2008 financial crisis, supports the contention that U.S. suppliers are maturing in their approach to the export market. The overall U.S. performance reflects a greater industry-wide move towards exports as a strategic growth path.”
For the second straight year, the United States shipped more than 13% of its annual U.S. milk solids overseas – a continued sign that U.S. dairy suppliers are building a more major role in meeting the needs of burgeoning global dairy demand. The strong year continues a long-term trend, said Paul Rovey, a dairy producer from Arizona and chairman of USDEC.
“Since 2003, U.S. milk production has increased 18% and more than half (56%) of the incremental milk volume has been sold overseas,” Rovey said. “USDEC’s long-term engagement in overseas markets has helped make that possible.”
MARKETS: Cheese, butter prices jump; 2013 Class III futures not so much
Today's market closing prices:
Butter: up 3.25¢, to $1.5875/lb.
Cheddar blocks: up 1.5¢, to $1.6750/lb.
Cheddar barrels: up 5.0¢, to $1.63/lb.
Grade A nonfat dry milk: down 0.75¢, to $1.5125/lb.
Extra Grade nonfat dry milk: unchanged at $1.56/lb.
Class III milk: -3¢ to +4¢ through January 2014. Based on current CME closing prices, the 2012 average is $17.44/cwt.; the 2013 average is $18.10/cwt.; and the 2014 average is $16.42/cwt.
Corn and soybean futures mixed in a narrow range; meal futures lower
Corn: -4¢ to +2¢ per bushel through December 2013. The 2013 average is $6.44/bu.
Soybeans: -3¢ to +4¢ per bushel through November 2013. The 2013 average is $13.65/bu.
Soybean meal: -$3.40 to -$1.10/ton through December 2013. The 2013 average is $383.01/ton.
Today in DairyBusiness Weekly:
1) Recharge at PDPW’s 2013 Annual Business Conference
2) Changes coming to animal movement, ID
3) February outlook: Monthly USDA report expects more milk, steady prices in 2013
4) Safeway’s exclusive dairy brand announces finalists in 8th Annual Lucerne The Art of Dairy contest
5) Penn State’s DairyCents featured on Big Ten Network
6) Processor’s perspective: Farm bill extension was right approach
7) Emerald Expo 2013 Dairy Show announced
8) A California dairyman named YDLI Distinguished Alumnus, and results from the Fort Worth Stock Show
9) Win a Kindle Fire in the 2013 Holstein Junior Essay Contest; Indiana gears up for National Holstein Convention
10) See what’s happening on social media, listen to podcasts, and much more!
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