DairyBusiness Update for Jan. 24, 2013
USDA’s Farm Service Agency (FSA) released additional information regarding the Milk Income Loss Contract (MILC), promising a “start month” relief period for dairy farmers producing more milk than the MILC payment cap of 2.985 million lbs. per year. The length of the relief period will be announced later, according to a notice sent to state and county FSA offices on Jan. 24.
Many of the details in the notice were already anticipated. Under the American Taxpayer Relief Act of 2012, signed into law by President Obama on Jan. 2, virtually all dates regarding MILC payment calculations, price triggers and adjusters and payment caps were changed from “2012” to ”2013”
As a result of legislative changes, retroactive MILC payments were triggered for September and October 2012. The September 2012 payment is 59.44¢/cwt. The October MILC payment is 2.37¢/cwt.
However, with the low October 2012 payment – the first month of fiscal 2013 – of just over 2¢/cwt., most larger producers would not have chosen to keep October as their “start month,” especially with MILC payments forecast to be higher in 2013. Because producers were not able to make timely “start month” selections for fiscal year 2013, FSA will authorize a “relief period” (to be announced), allowing MILC participants to select any “start month” month in fiscal year 2013.
DairyBusiness will post latest MILC payment projections as they become available. Contact your local USDA/Farm Service Agency office for further information.
2012 dairy cull cow slaughter highest in 26 years
USDA estimated 258,800 culled dairy cows were slaughtered under federal inspection in December 2012, down 10,000 from November 2012 and 3,100 less than December 2011. Total dairy cow slaughter in 2012 was estimated at 3.101 million head, up 187,500 from 2011.
The 2012 total is the highest in 26 years. USDA began differentiating dairy cow slaughter from total cow slaughter in 1986. Since 1986, dairy cow slaughter has topped 3 million only twice: in 1986, at 3.595 million (a year influenced by the federal whole herd buy-out program) and 1996, at 3.037 million.
MARKETS: Cheese, Class III futures weaken further
Today's market closing prices:
Butter: unchanged at $1.5050/lb.
Cheddar blocks: down 1.5¢, to $1.6450/lb.
Cheddar barrels: down 2.75¢, to $1.5725/lb.
Grade A nonfat dry milk: unchanged at $1.53/lb.
Extra Grade nonfat dry milk: unchanged at $1.56/lb.
Class III milk: -3¢ to -14¢, February 2013 through January 2014. Based on current CME closing prices, the 2012 average is $17.44/cwt.; the 2013 average is $18.04/cwt.; and the 2014 average is $16.40/cwt.
Corn, soybean & meal futures mixed
Corn: -5¢ to +3¢ per bushel through December 2013. The 2013 average is $6.71/bu.
Soybeans: -3¢ to +1¢ per bushel through November 2013. The 2013 average is $13.87/bu.
Soybean meal: -$1.80 to +$1.20/ton through December 2013. The 2013 average is $391.11/ton.
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