DairyProfit Update for Nov. 15, 2012
A Nov. 13 deadline for a U.S. Environmental Protection Agency (EPA) decision on a request for a waiver of the Renewable Fuel Standard (RFS) for ethanol has come and gone, with the agency promising a decision will be announced soon.
"EPA is completing its review and analysis of the RFS waiver requests and the agency plans to reach a decision shortly," an agency spokeswoman said.
The RFS ethanol mandate requires 13.2 billion gallons of ethanol to be made from corn this year.
In August, Governors Mike Beebe, Arkansas, and Beverly Perdue, North Carolina, officially petitioned EPA for a RFS waiver for the remainder of 2012 and all of 2013. The International Dairy Foods Association (IDFA) and 26 other food industry trade associations sent a letter to EPA Administrator Lisa Jackson, requesting a waiver. Previously, a coalition of nearly a dozen dairy and livestock organizations made the same request.
In late August, EPA opened a comment period on the petition, starting the clock on the 90-day period in which EPA had to rule on the request. In September, EPA extended the comment period until Oct. 11.
A waiver may be issued if the EPA administrator determines the RFS volume requirement would severely harm the economy or environment of a state, region or the United States, or that there is an inadequate domestic supply. If a waiver is granted, it can last no longer than one year, but may be renewed. Visit www.epa.gov/oms/fuels/renewablefuels/notices.htm.
MARKETS: Cheese crashes again; Class III futures lower
Since peaking at $2.12/lb. for cheddar blocks and $2.08/lb. for barrels, CME cheese prices have tumbled to their lowest level since early August 2012. Since trading on Monday, Nov. 5, barrel prices have fallen 35¢/lb., with block prices down 23¢/lb.
Today's market closing prices:
Butter: down 2.5¢, to $1.8650/lb.
Cheddar blocks: down 9.0¢, to $1.82/lb.
Cheddar barrels: down 11.25¢, to $1.7225/lb.
Grade A nonfat dry milk: unchanged, at $1.5725/lb.
Extra Grade nonfat dry milk: unchanged, at $1.56/lb.
Class III milk: lower through April 2013. Based on current CME closing prices, the average for November-December 2012 is $19.88/cwt.; the full year 2012 average is $17.47/cwt.; and the 2013 average is $18.38/cwt.
Corn, soybeans and meal futures lower
Corn: 2¢ to 5¢/bushel lower through September 2013. The 2013 average is $6.78/bu.
Soybeans: 9¢ to 17¢ lower through September 2013. The 2013 average is $13.43/bu.
Soybean meal: $2.60 to $6.00/ton lower through September 2013. The 2013 average is $390.44/ton.
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