DairyBusiness Update for Feb. 21, 2013
January 2013 dairy cull cow slaughter highest monthly total since 1986
USDA estimated 296,900 culled dairy cows were slaughtered under federal inspection in January 2013, up 33,100 from January 2012 and 38,000 more than December 2012. It marks the single highest monthly total since 1986, a year highlighted by the whole-herd dairy buyout program (for those of you old enough to remember it).
January 2013 slaughter took 81,700 cows out of USDA’s Zone 9 (Arizona, California and Hawaii), about 27.5% of the total slaughtered during the month. And, since Hawaii has only about 2,000 cows, it's safe to assume a vast majority of those cow slaughtered were from Arizona and California.
The U.S. Food & Drug Administration’s (FDA) annual analysis of animal drug residue tests of milk found dairy consumers are safer than ever. Of the nearly 3.8 million milk samples tested for animal drug residues last year, only 828 tested positive for drug residues. And, especially important to dairy consumers, FDA found no positive animal drug residue tests in pasteurized dairy products headed for sale.
Milk samples are tested at various steps in the dairy supply chain, including 1) raw milk at the farm; 2) bulk milk pickup tankers carrying raw milk from dairy farms; 3) pasteurized fluid milk and milk products in package form or bulk; and 4) other random tests throughout the supply chain. Only 0.017% (17 thousandths of 1%) of all truckloads of raw milk tested positive for medicinal animal drug residues in fiscal year 2012, according to FDA's National Milk Drug Residue Database (NMDRD) results. The figure dropped from 0.021% last year.
To see the full NMDRD report, visit www.kandc-sbcc.com/nmdrd/
This NMDRD annual report is separate from an Animal Drug Residue Assignment that the Food and Drug Administration and the Center for Veterinary Medicine launched in January 2012. The purpose of that study is to determine if farms with previous animal drug residue violations found in dairy cattle at slaughter may be a result of farm management practices that could also lead to drug residues in milk. The results from the FDA/CVM study are anticipated to be released as early as next month.
Federal order March Class I base price lower
The federal order March Class I base milk price is $17.80/cwt., down 41¢ from February, but $1.50 more than March 2012. It’s the lowest monthly Class I base price since September 2011. Through the first quarter of 2013, the Class I base average stands at $18.33/cwt., up 95¢ from the same period in 2012.
USDA FY ’13 dairy export outlook steady
USDA issued its latest quarterly “Outlook for U.S. Agricultural Trade” report on Feb. 21. It kept fiscal year (FY) 2013 dairy export projections unchanged from last November’s forecast, at $5 billion, but reduced expected imports by $100 million, to $3.1 billion. Cheese import projections were unchanged at $1.1 billion, up about $40 million from FY ’12.
If realized, FY ’13 dairy product imports would be about $87 million more than FY ’12. The forecast for dairy imports was lowered due to reduced butter and cheese prices, as domestic demand is anticipated to be weaker
Overall, FY ’13 agricultural exports are forecast at $142 billion, down $3 billion from the forecast, but up more than $6 billion from FY’12. U.S. ag imports are projected at $112 billion, down $2.5 billion from the November forecast, but up $9 billion from FY ’12.
MARKETS: Blocks, butter down, but Class III futures slightly higher
Today's market closing prices:
Butter: down 0.5¢, to $1.60/lb.
Cheddar blocks: down 1.0¢, to $1.6350/lb.
Cheddar barrels: unchanged at $1.63/lb.
Grade A nonfat dry milk: unchanged at $1.5050/lb.
Extra Grade nonfat dry milk: unchanged at $1.56/lb.
Class III milk: +1¢ to +18¢ through December 2013. Based on current CME closing prices, the 2012 average is $17.44/cwt.; the 2013 average is $17.97/cwt.; and the 2014 average is $16.42/cwt.
Corn lower; soybean and meal futures mixed
Corn: -7¢ to -11¢ per bushel through December 2013. The 2013 average is $6.35/bu.
Soybeans: -10¢ to +5¢ per bushel through December 2013. The 2013 average is $14.06/bu.
Soybean meal: -$2.30 to +$3.70/ton through December 2013. The 2013 average is $400.59/ton.
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