DairyProfit Update for Dec. 13, 2012

Senators push to keep ‘federal order’ amendment in final Farm Bill

If and when Senate and House leaders negotiate the final terms of a 2012 Farm Bill, U.S. Sens. Kirsten Gillibrand (D-N.Y.) Olympia Snowe (R-Maine) want to make sure their amendment addressing federal order reforms remains intact. In a letter to Senate Ag Committee chair Sen. Debbie Stabenow (D-Mich.) and ranking member Sen. Pat Roberts (R-Kan.), they and seven other senators joined in requesting amendment S.1481 be in the final bill.

Ultimately, the goal of the legislation is the elimination of end-product pricing formulas. The amendment requires USDA to collect information on various pricing systems, and to assess the impact of a change to end product pricing on price volatility, producer payments and overall fairness and efficiency in pricing. USDA is also required to report analysis to the Agriculture Committee. At present, this language is only included in the Senate Farm Bill proposal, and not in the House Ag Committee proposal. 

The Snowe-Gillibrand amendment would allow dairy industry groups to present milk pricing reforms to USDA for consideration in a public hearing setting, and order the Secretary of Agriculture to release the USDA’s final proposal to Congress. 

Dairy cattle exports rebound 

October U.S. female dairy cattle exports rebounded after a dismal September, but still recorded the second-lowest monthly total since April. October 2012 exports totaled 2,504 head, up from just 955 head in September. It marked the lowest two-month total since mid-2009.

October exports brought the year-to-date (Y-T-D) total to 37,440 head, well behind the 60,554 during the same period in record-setting 2011.

Russia, Canada and Kazakhstan were the leading destinations in October.

Source: USDA Foreign Ag Service

MARKETS: Cheese down; Q1 Class III futures fall

Today's market closing prices:

Butter: unchanged at $1.5950/lb.

Cheddar blocks: down 3.5¢, to $1.7250/lb.

Cheddar barrels: down 2.5¢, to $1.6250/lb.

Grade A nonfat dry milk: unchanged, at $1.5575/lb.

Extra Grade nonfat dry milk: unchanged, at $1.56/lb.

Class III milk: -60¢ to -20¢, January-March 2013 through December 2013; otherwise mixed in a narrow range. Based on current CME closing prices, the 2012 average is $17.44/cwt.; the 2013 average is $18.32/cwt.; and the 2014 average is $16.20/cwt.

Corn, soybean, meal futures mixed

Corn: -9¢ to steady through December 2013. The 2013 average is $6.88/bu.

Soybeans: -9¢ to +3¢ through November 2013. The 2013 average is $14.16/bu.

Soybean meal: -$3.40 to +$3.50/ton through December 2013. The 2013 average is $416.33/ton.