DairyProfit Update for April 19, 2012
Dairy coalition urges Dairy Security Act passage
A coalition of 27 dairy farmer organizations sent a letter to Senate Ag Committee leaders, expressing their support for including the “Dairy Security Act” into the 2012 Farm Bill.
Dairy farmer organizations signing the letter included: Alabama Dairy Producers, Associated Milk Producers Inc. (AMPI), Agri-Mark, Dairy Farmers of America (DFA), Dairy Farmers Working Together, Dairy Producers of New Mexico, Dairy Producers of Utah, Dairylea Cooperative Inc., Ellsworth Cooperative Creamery, Holstein Association USA, Inc., Idaho Dairyman’s Association, Land O’Lakes, Maryland Dairy Industry Association, Michigan Milk Producers, Midwest Dairy Coalition, Milk Producers Council, Missouri Dairy Association, National Council of Farmer Cooperatives, National Farmers Organization, National Milk Producers Federation, Northwest Dairy Association / Darigold, Oregon Dairy Farmers Association, South Carolina Dairy Association, St. Albans Cooperative Creamery, United Dairymen of Arizona, Upstate Niagara Cooperative, Inc. and the Washington State Dairy Federation.
2012 Q1 milk output up 5.2%
U.S. milk production during the first quarter of 2012 totaled 51.0 billion lbs., up 5.2% from the same period last year, according to USDA’s preliminary March milk production report.
(Due to Leap Day, the first quarter of 2012 had one more day than 2011. On a daily basis, 2012 first-quarter milk production was up 4.1% compared to the same period a year earlier.)
The average number of milk cows in the United States during the January-March 2012 quarter was 9.254 million head, 86,000 head more than the same period last year.
March 2012 milk production in the 23 major states totaled 16.45 billion lbs., up 4.3% from March 2011. Milk cow numbers in the 23 major states were estimated at 8.519 million head, 9,000 more than February 2012 and 94,000 more than March 2011. Production per cow averaged 1,931 lbs., 59 lbs. more than March 2011.
Nationally, March 2012 milk production was estimated at 17.70 billion lbs. (+4.2% for the month); milk per cow: 1,910 lbs. (+59 lbs.); cow numbers: 9.266 million, (+12,000 from February 2012 and +86,000 from March 2011).
March cow numbers higher
Compared to a year earlier, March cow numbers posted the largest gains in: California (+25,000); Texas (+13,000); Michigan and New Mexico (+11,000 each); Washington (+9,000); and Colorado and Arizona (+7,000 each). Only Iowa, Minnesota, Missouri, Pennsylvania and Vermont had fewer cows than the year before.
Kansas dairy and cheese plant planned
Kansas Dairy Ingredients announced plans to build a dairy ingredient and cheese plant in Hugoton, Kan. The company will start construction on the facility next month and begin Phase 1 operation in the fourth quarter in 2012.
During Phase 1, the facility will process about 1 million lbs. of milk per day, producing fractionated dairy ingredients. Eventual processing capacity will be up to 2.5 million lbs. of milk per day by the end of 2013. The company also plans to build additional capacity to produce cheese and other dry milk ingredients, investing more than $20 million over the next 18 months.
Court upholds Milk Regulatory Equity Act
The Washington D.C. Circuit Court of Appeals upheld the Milk Regulatory Equity Act, a 2006 law designed to close a loophole allowing regulatory inequities between federal and state milk marketing orders in Arizona, California and Nevada.
Hein Hettinga, a producer-handler in Arizona, filed a lawsuit claiming the bill was unconstitutional because it targeted a single individual.
According to Connie Tipton, International Dairy Foods Association CEO and president, the law made it illegal for plants in southwestern states to sell milk into a state milk marketing area from a federally regulated milk marketing area without complying with either state or federal pricing regulations. Specifically, it ensured that milk processors in Arizona, including producer-handlers that sell more than 3 million lbs. of fluid milk per month, are required to comply with federal regulations. The legislation also clarified that plants in Nevada selling into a federal milk marketing order had to abide by federal pricing regulations.
In addition to IDFA, others supporting the law included the National Milk Producers Federation, the Dairy Institute of California, Western United Dairymen and the Dairy Farmers of America.
MARKETS: Near-term Class III futures rebound a little
Today's market closing prices:
Cheddar barrels: unchanged at $1.46/lb.
Cheddar blocks: up 1¢, to $1.51/lb.
Butter: unchanged, at $1.4125/lb.
Extra Grade nonfat dry milk: down 2¢, to $1.1375/lb.
Grade A nonfat dry milk: unchanged at $1.1775/lb.
Class III milk: +4¢ to +36¢ April through August 2012. Based on current closing prices, the 2012 average is $15.84/cwt.; 2013 average is $15.98/cwt.
Grain futures higher
Corn: +13¢ to +19¢/bushel through December 2012. The 2012 average is $5.83/bu.; 2013 average is $5.54/bu.
Soybeans: +4¢ to +8¢ through November 2012. The 2012 average is $13.93/bu.; 2013 average is $12.99/bu.
Soybean meal: +$0.80 to +$1.70 through December 2012. The 2012 average is $379.85/ton; 2013 average is $339.00/ton.
• Earth Day is on Sunday. What is your farm doing to stay environmentally sustainable?
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