DairyProfit Update for April 12, 2012
Dairy Security Act campaigns pick up the pace
With the potential for a 2012 Farm Bill proposal inching closer, competing campaigns – opposing and promoting the Dairy Security Act (H.R. 3062) as potential dairy policy in the 2012 Farm Bill – ratcheted up a bit.
Opposed to the bill, the International Dairy Foods Association (IDFA) unveiled analysis by conservative ”think tank” American Enterprise Institute, showing “supply management” initiatives contained in the proposal would be detrimental to U.S. interests. The paper, “Market Structure and Competition in the U.S. Food Industries: Implications for the 2012 Farm Bill,” concludes a dairy supply-management program proposal would increase consumer prices, increase milk production costs and diminish the competitiveness of U.S. dairy products in the world market.
Meanwhile, the National Milk Producers Federation (NMPF), the dairy producer cooperative organization which created the Foundation for the Future program, the basis for the Dairy Security Act, is stepping up a grassroots campaign. NMPF urged dairy producers to contact their lawmakers via the organization’s Dairy G.R.E.A.T. website, asking for support to include the plan in the 2012 Farm Bill. As part of the efforts to garner support for the Dairy Security Act, NMPF has prepared a series of flyers highlighting different aspects of the legislation. They include:
• Flyer 1 - Time to Enact a Dairy Program That Works (PDF) (JPG)
• Flyer 2 - Dairy Farmers Can't Afford Another 2009 (PDF) (JPG)
FDA issues antimicrobial guidance
The U.S. Food and Drug Administration (FDA) will take three steps “to protect public health and promote the judicious use of medically important antibiotics in food-producing animals,” the agency announced April 11.
FDA issued three documents designed to help veterinarians, farmers and animal producers use medically important antibiotics judiciously in food-producing animals by targeting their use to only address diseases and health problems. Under this new voluntary initiative, certain antibiotics would not be used for so-called “production” purposes, such as to enhance growth or improve feed efficiency in an animal. These antibiotics would still be available to prevent, control or treat illnesses in food-producing animals under the supervision of a veterinarian.
May 1 is deadline for Southeast Milk lawsuit settlement claim forms
Southeast U.S. dairy farmers have until May 1 to complete claim forms to be eligible to receive portions of the financial settlement agreement with Dean Foods and Southern Marketing Agency (SMA) in the "Southeast Milk” lawsuit. Claim procedures are posted on a court-approved website, www.southeastdairyclass.com.
The $145 million settlement will be proportionately distributed to farmer plaintiffs, less the attorney fees and legal costs, to eligible producers who produced and sold Grade A milk within federal milk marketing orders #5 (Appalachian) and #7 (Southeast) since Jan. 1, 2001.
Preliminary calculations estimate the “average” individual settlement could be about $13,000, based on 7,000 claimants. That figure could vary widely dependent on two factors: 1) the final number of claimants submitting claims forms by the deadline; and 2) the total number of milk pounds reported.
AFBF surveys retail milk prices
According to the American Farm Bureau Federation’s quarterly Marketbasket Survey, shoppers in 24 states reported paying the following average prices for milk in half-gallon containers in the first quarter of 2012:
• regular milk: $2.46, up 9¢ from the prior quarter, and up 9% compared to the same quarter a year earlier. (The price for one gallon of regular milk was $3.53, down 23¢ from the prior quarter, but up about 2% from the first quarter of 2011.)
• “rbST-free” milk: $3.42, up 8¢ from the previous quarter, and 6% more than the first quarter of 2011. It is about 40% higher than the reported price of a half-gallon of regular milk. The retail markup on “rbST-free” milk = 96¢/half-gallon X 23.25 half-gallons/cwt. = $22.32/cwt.
• organic milk: $4.19, up 28¢ compared to the fourth quarter of 2011, and up 13% compared to the first quarter a year earlier. It is about 70% higher than the reported price of a half-gallon of regular milk.
MARKETS: Barrels, powders plunge
Today's market closing prices:
Cheddar barrels: down 5.25¢, to $1.4075/lb.
Cheddar blocks: unchanged at $1.4875/lb.
Butter: unchanged, at $1.4250/lb.
Extra Grade nonfat dry milk: down 5.0¢, to $1.2075/lb.
Grade A nonfat dry milk: down 5.0¢, to $1.2175/lb.
Class III milk: mixed in a narrow range through May 2013. Based on current closing prices, the 2012 average is $16.00/cwt.; 2013 average is $16.10/cwt.
Grain futures mostly higher
Corn: steady to +2¢/bushel through December 2012. The 2012 average is $5.94/bu.; 2013 average is $5.58/bu.
Soybeans: +14¢ to +20¢ through November 2012. The 2012 average is $14.18/bu.; 2013 average is $13.23/bu.
Soybean meal: +$5.30 to +$7.80 through December 2012. The 2012 average is $382.70/ton; 2013 average is $342.10/ton.
