DairyProfit Update for Nov. 21, 2012
WUD releases ‘order’ report
Western United Dairymen (WUD) director of economic analysis Annie AcMoody has prepared a report comparing federal and California milk marketing orders. The analysis can be downloaded by clicking here.
Due largely to an outgrowth of criticism regarding the California Department of Food and Agriculture’s handling of the state’s Class 4b minimum milk pricing formula, WUD hosted a federal order informational meeting on Sept. 20. The meeting featured Bill Wise, marketing administrator of the Arizona and Pacific Northwest orders.
AcMoody’s report lists “facts” and “concerns” on a variety of issues surrounding differences between federal and California orders, including: depooling, quota, order hearing processes, order structure and geographic boundaries, milk pricing formulas and structure, producer distributors, milk diversions, fluid standards and more.
Other informational resources are also available from the WUD website (www.westernuniteddairymen.com/), including three videos of the Sept. 20 informational meeting.
WSDF seeks EPA report review, comment period extension
The Washington State Dairy Federation (WSDF) is urging the state's dairy producers to take action before a U.S. Environmental Protection Agency (EPA) environmental report comment period ends on Nov. 30.
On Sept. 20, EPA released a report, "Relation Between Nitrate in Water Wells and Potential Sources in the Lower Yakima Valley, Washington" (available at: http://yosemite.epa.gov/r10/water.nsf/gwpu/lyakimagw). After EPA issued the report, two environmental groups served several Yakima Valley, Wash. dairy farms with 90-day “Notice of Intent to Sue” letters, alleging the farms committed repeated violations of federal environmental laws.
WSDF contends the report, which states that dairy farms are the primary source of groundwater contamination in the region, “was developed using extremely poor scientific standards, leading to equally flawed conclusions.” WSDF has assembled scientists and technical experts to develop detailed review(s) of the EPA report. WSDF has also requested that EPA extend the current public comment period deadline of Nov. 30 until all primary data used to create the EPA report is made available.
In a Nov. 20 letter to Washington producers, WSDF executive director Jay Gordon urged Washington producers to submit personal comments regarding their environmental stewardship to EPA by the Nov. 30 deadline. The report and comment submission page can be found by entering "EPA Yakima groundwater" into your browser or by going to: http://yosemite.epa.gov/r10/water.nsf/gwpu/lyakimagw
Tradition to abandon dairy construction in northwestern Illinois
Illinois Attorney General Lisa Madigan announced that California dairy producer A.J. Bos will abandon plans to construct a large dairy in Jo Daviess County, Ill., and will sell the land.
According to Madigan, the settlement proposes to resolve a water pollution complaint filed last year with the Illinois Pollution Control Board (IPCB) against Tradition Investment, LLC, for allowing the discharge of leachate from silage stored at the site into the South Fork of the Apple River. The complaint also alleged a violation of permit requirements because Tradition failed to have the requisite National Pollutant Discharge Elimination System (NPDES) permit at the time the discharge occurred.
Tradition informed the Illinois Attorney General’s Office and the Illinois Environmental Protection Agency that it is in the process of selling the site. The company is also removing all remaining liquid in the site’s concrete basin and adjoining earthen basin and applying it to agricultural land in accordance with applicable environmental regulations.
The settlement – which must be approved by the IPCB, will end a four-year legal battle between Bos and an environmental advocacy organization, Helping Others Maintain Environmental Standards (HOMES).
Documents related to the case can be found on the IPCB website: www.ipcb.state.il.us/COOL/external/CaseView.aspx?case=14108.
Iowa/Nebraska dairy budgets improved in October
The financial scenario for Iowa and Nebraska dairy farmers improved in October, according to Extension educator Robert Tigner.
October’s milk income grew due to higher values for protein, butterfat and other solids, offset slightly by a larger negative producer price differential deduction. The October milk price averaged $21.12/cwt., up from $19.28/cwt. in September.
October corn, corn silage and protein prices were virtually unchanged from September, but hay prices rose. Cottonseed prices were lower.
To cover total costs, Tigner calculated the breakeven price at a 20,000-lb. RHA was $25.75/cwt.; the breakeven price at a 24,000-lb. RHA was $22.98.
Overall, the October budget showed improved cash flow for dairy producers, enough so that nearly all costs were covered except unpaid labor and management.
Next month’s budget should show declines in feed costs, Tigner said.
MARKETS: Barrels up; Class III futures mostly lower
Today's market closing prices:
Butter: down 1.0¢, to $1.69/lb.
Cheddar blocks: unchanged, at $1.8250/lb.
Cheddar barrels: up 2.0¢, to $1.7450/lb.
Grade A nonfat dry milk: down 0.5¢, to $1.5575/lb.
Extra Grade nonfat dry milk: unchanged, at $1.56/lb.
Class III milk: -19¢ to +3¢ through December 2013. Based on current CME closing prices, the average for November-December 2012 is $19.96/cwt.; the full year 2012 average is $17.48/cwt.; and the 2013 average is $18.43/cwt.
Corn, soybeans and meal futures mostly lower
Corn: -2¢ to +1¢/bushel through September 2013. The 2013 average is $6.97/bu.
Soybeans: -2¢ to -7¢ through September 2013. The 2013 average is $13.55/bu.
Soybean meal: -$1.70 to -$3.20/ton through September 2013. The 2013 average is $391.96/ton.