DairyBusiness Update for March 14, 2013
Dairy outlook: More milk, weaker Class III
USDA’s Livestock, Dairy & Poultry Outlook report, released March 14, raised projected 2013 milk production estimates by about 900 million lbs. from a month earlier.
Compared to last month's outlook, forecast cow numbers were raised for the first half of 2013, but lowered for the second half of the year. The U.S. dairy herd is expected to average 9.195 million cows for 2013, a contraction from 2012, but higher than February’s forecast. Output per cow was raised slightly to 21,960 lbs., based on higher milk per cow in the first quarter.
Total 2013 production and marketings were projected at 201.9 billion lbs. and 200.9 billion lbs., respectively. If realized, 2013 production and marketings would be up about 0.8% from 2012.
Projected prices for cheese and whey were lowered, due to expectations of increased production and moderate demand. The forecast butter price was unchanged, although the range tightened. The forecast price of NDM was raised, as stronger export demand is expected.
As the result, the 2013 Class III milk price forecast was reduced from last month, to a range of $17.55-$18.15/cwt. The projected Class IV was increased, in a range of $17.35-$18.05/cwt.. The 2013 projected all-milk price was raised to $19.00-$19.60/cwt.
To see the report, click here
Bill resurrects tax-deferred savings account idea
Growing yogurt industries in New York and Idaho may help take the lid off an idea buried in a 2-year-old report from a special USDA dairy advisory committee – tax-deferred savings accounts for dairy producers.
U.S. Sens. Charles Schumer (D-N.Y.) and Mike Crapo (R-Idaho) introduced the Dairy Augmentation for Increased Retail in Yogurt (DAIRY) Act, designed to help dairy producers establish federal savings accounts to help manage revenue risk and market fluctuations. Idaho and New York are the third- and fourth-largest dairy-producing states, respectively, and expanding Greek yogurt maker Chobani and other companies have contributed to surging interest in yogurt production in both states.
The idea for tax-deferred savings accounts for dairy producers received unanimous support in a March 2011 report) from the Dairy Industry Advisory Committee (DIAC). Seen as one of several tools to assist in the private management of volatility in prices and farm returns, the accounts would be designed to transfer taxable income from highly profitable years to years of low or negative taxable returns.
Under the DIAC recommendation, producers would have had to keep funds in an account for a minimum of six months. There would have been no limits on the amount of money placed in the account, and payment of income taxes on contributions and interest would occur in the tax year in which the funds were withdrawn.
The Schumer/Crapo plan follows recommendations included in the DIAC report. It has been referred to the Senate Committee on Finance.
To see the full DIAC report, including additional information on tax-deferred savings accounts for dairy producers, click here.
For more information on the Dairy Augmentation for Increased Retail in Yogurt (DAIRY) Act, click here.
DCC revamps website
Dairy Council of California (DCC) launched a new website, HealthyEating.org, to increase awareness of the health benefits of milk and milk products and introduce its nutrition education offerings to multiple audiences, including teachers and health professionals.
DCC created the online destination so families can learn to improve eating habits and understand the benefits of consuming milk and milk products; teachers can order nutrition education materials; health professionals can find nutrition information for patients; and members of the dairy industry can access and download helpful tools to use and share with others.
Available resources include consumer-friendly handouts and tip sheets for both students and adults (in English and Spanish) covering anything from basic milk facts to how milk gets from cow to container. All resources can be found in the industry section at HealthyEating.org/Community-Resources. Producers and processors can also direct consumers to the site’s interactive tools, including Healthy Eating My Way that customizes eating plans based on personalized needs.
Wisconsin Gouda wins U.S. Cheese Championship
A national panel of expert judges named a Wisconsin Gouda as the 2013 U.S. Championship Cheese.
Marieke Penterman, of Holland’s Family Cheese, Thorp, Wis., took top honors out of 1,702 entries from 30 states for her Marieke Mature Gouda, aged six to nine months. First runner-up in the contest was Tarentaise, a semi-hard alpine cheese made by Spring Brook Farm/Farms For City Kids Foundation in Reading, Vt. Second runner-up was a Medium Cheddar, made by Team Cracker Barrel Natural Cheese, Agropur Weyauwega for Kraft Foods in Glenview, Ill.
Capturing the most gold medals was Wisconsin, with 47 of the total 81 categories judged. Vermont and New York came in second, with six golds apiece. Oregon had four gold medals, while California, Idaho, Illinois and Ohio all took three. Colorado, Michigan, Minnesota, Missouri, New Mexico and Utah each captured one apiece.
The United States Championship Cheese Contest is the largest technical evaluation of cheese and butter in the country. This year, more than 30,000 pounds of cheese were entered into the contest.
For more information, visit http://www.uschampioncheese.org.
College kids who don’t drink milk could face serious consequences
College-age kids who don’t consume at least three servings of dairy daily are three times more likely to develop metabolic syndrome than those who do, said a new University of Illinois study.
And, with only one in four young persons in the study was getting the recommended amount of dairy, three-fourths of the 18- to 25-year-old college applicants surveyed are at risk for metabolic syndrome, according to Margarita Teran-Garcia, a U of I professor of food science and human nutrition.
Metabolic syndrome occurs when a person has three of the following risk factors: abdominal obesity, high blood pressure, high blood sugar, and unhealthy cholesterol and lipid levels. Having this disorder greatly increases a person’s chances of developing heart disease and type 2 diabetes, she said.
In the study, 339 Mexican college applicants filled out a food frequency questionnaire and were then evaluated for metabolic syndrome risk factors. The analysis controlled for sex, age, family history of cardiovascular disease and type 2 diabetes, and physical activity.
The study is part of the Up Amigos project, a collaboration between scientists at the U of I and the Universidad Autónoma de San Luis Potosί in Mexico. The researchers are following university applicants to learn how changes in their BMI, weight, and eating and exercise habits affect the students’ health over time.
Food, ag groups call for comprehensive U.S.-EU trade pact
The International Dairy Foods Association (IDFA) joined more than 60 other U.S. food and agriculture organizations in expressing support for a comprehensive free trade agreement with the European Union. In a letter to U.S. Trade Representative Ron Kirk, the organizations stressed the importance of basing regulatory negotiations on science and international standards and avoiding the inclusion of new barriers, such as geographical indications for names that are commonly used for many products.
The organizations expressed concern that recent statements by EU officials raised doubts about whether the EU has genuine interest in dealing with sanitary and phytosanitary (SPS) issues as part of the negotiations. SPS regulations must be addressed, and the provisions must be enforceable, the letter said.
Another area of concern is geographical indications. Noting "it's no secret" that the EU will seek restrictions on the use of names that are commonly use for many products, the organizations said the EU should not be allowed to use the free trade pact as a platform to promote GIs and other protectionist measures.
Read "Final Report of the U.S.-EU High Level Working Group on Jobs and Growth."
Bill addresses shortfall of veterinarians in rural areas
U.S. Sens. Tim Johnson (D-S.D.) and Mike Crapo (R-Idaho) reintroduced theVeterinary Medicine Loan Repayment Program Enhancement Act, designed to end the shortfall of veterinarians in rural areas. The legislation would provide a federal income tax exemption for payments received under the Veterinary Medicine Loan Repayment Program (VMLRP) and similar state programs that encourage veterinarians to practice in smaller and rural communities.
The VMLRP law makes the federal government responsible for paying taxes on the income to the veterinarian. Rather than awarding full funding for this program each year, the VMLRP must immediately give back 39% of the money it receives to the U.S. Treasury as a federal tax. The Johnson-Crapo bill removes this tax burden so that more veterinarians can be selected and help rural America. This bill would make VMLRP money tax exempt and allow the program to increase the number of veterinarians selected by one-third.
Support for the Johnson-Crapo bill includes the following bi-partisan group: Sens. Bennet (D-Colo.), Cochran (R-Miss.), Collins (R-Maine), Gillibrand (D-N.Y.), Hirono (D-Hawaii), Isakson (R-Ga.), Klobuchar (D-Minn.), Landrieu (D-La.), Merkley (D-Ore.), Moran (R-Kan.), Risch (R-Idaho), Roberts (R-Kan.), Stabenow (D-Mich.), and Tester (D-Mont). The bill also has the support of more than 140 animal, agricultural and veterinary medicine organizations nationwide.
MARKETS: Barrels close gap; Class III futures average $18/cwt.
Today's market closing prices:
Butter: up 1.0¢, to $1.64/lb.
Cheddar blocks: unchanged, at $1.60/lb.
Cheddar barrels: up 0.25¢, to $1.59/lb.
Grade A nonfat dry milk: unchanged at $1.4975/lb.
Extra Grade nonfat dry milk: unchanged at $1.56/lb.
Class III milk: +2¢ to +23¢ April 2013 through January 2014. Based on current CME closing prices, the 2013 average is $18.00/cwt.; and the 2014 average is $16.67/cwt.
Corn higher; soybean and meal futures lower
Corn: +4¢ to +6¢ per bushel, May 2013 through May 2014. The 2013 average is $6.58/bu.
Soybeans: -3¢ to -18¢ per bushel through September 2014. The 2013 average is $13.74/bu.
Soybean meal: -$0.40 to -$4.20/ton through December 2013. The 2013 average is $393.41/ton.
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