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DairyBusiness Update: Dec. 24, 2013

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October commercial disappearance may be record
   Commercial disappearance of milk used in all dairy products during October 2013 totaled 18.83 billion lbs., 4.0% more than October 2012, and about 2.49 billion lbs. more than total U.S. producer milk marketings for the month, according to USDA. It's possibly the highest monthly commercial disappearance on record.
   Producer milk marketings for October 2013 totaled 16.34 billion lbs. Adding to available supplies, beginning commercial stocks totaled 14.33 billion lbs., and imports for the month totaled 323 million lbs., for a total of 31.0 billion lbs.
   At the end of October 2013, ending commercial stocks totaled 12.17 billion lbs., down about 2.16 billion lbs. compared to September 2013, but still about 423 million lbs. more than October 2012.

Source: USDA

Declining feed costs push COP to lowest level in 19 months
   On the strength of lower feed costs, the national average cost to produce milk fell for the second consecutive month, declining to its lowest level since April 2012. All cost estimates are based on total farm costs per hundredweight of milk sold.
   USDA’s monthly Milk Cost of Production report showed purchased feed costs ($6.32/cwt. of milk sold) were the primary driver, down $1.49 compared to October 2013 ($7.81), and down $1.83/cwt. from November 2012 ($8.14). 
   November 2013 total feed costs ($12.55/cwt. of milk sold) were down $1.76/cwt. from October 2013 ($14.31), and $2.56 less than November 2012 ($15.10). Total feed represented about 51% of total costs in November 2013, compared to 56% a year ago.
   Other than feed, virtually all operating and allocated overhead costs were virtually unchanged from October 2013 and November 2012.
   The preliminary November 2013 average total cost was $24.50/cwt., down  $1.84 from October 2013 ($26.34) and down $2.41/cwt. from November 2012 (26.91).

Dairy Checkoff teams with chef on lactose intolerance solutions
  
The Dairy Checkoff program announced this week that, as part of a partnership to help educate the public about dairy’s contributions to health and wellness, Washington Post Live has posted a video demonstrating how those with lactose intolerance can still enjoy dairy-rich meals.
   Chef Chris Shepherd, an award-winning executive chef at Underbelly in Houston, created a 12-course gourmet meal featuring dairy for registered dietitians who were attending the Academy of Nutrition and Dietetics Food Nutrition Conference and Expo. A video of the dinner, which shows how dairy-rich recipes offer great-tasting solutions for those with lactose intolerance, can be viewed here.
   “The recipes received excellent reviews from people who understand nutrition the best, the registered dietitians,” said Paul Rovey, Arizona dairy producer and chair of Dairy Management Inc., which manages the national dairy checkoff. “Chef Chris’ menu is a great example of how everyone can enjoy a dairy-full lifestyle.”
   More information on the checkoff’s ongoing outreach and education to consumers about lactose intolerance can be found  here.

Dairy symposium to kick off at Green Bay’s Lambeau Field
   The Wisconsin-based Dairy Business Association (DBA) will hold its annual symposium February 18-19 in Green Bay at Lambeau Field.  Previously called the "Expansion Symposium," the newly themed “Access Symposium” will focus on, what it called “closing the relationship gap between producers and regulators.”  The symposium will include interactive sessions with key state agencies the first day of the event, with the second day focusing on best animal handling practices highlighting "down cow" situations. Complete details are posted at www.widba.com or call 920-213-7588 begin_of_the_skype_highlighting 920-213-7588 FREE  end_of_the_skype_highlighting.
Dairy leaders head to greener pastures?
   A well respected, long-time leader in the dairy industry will likely view the next few days of 2013 with mixed emotion as the name on the door is changed at the National Milk Producers Federation (NMPF). Jerry Kozak, President and CEO of NMPF for the past 15 years, will retire as of December 31. Friend or foe, dairy producer or dairy processor, I think it safe to say that all would agree that Jerry stood for what he believed and put his heart and soul into the industry.
   Also, long time dairy industry leader, Jim Tillison, retires December 31from his post as Chief Operating Officer of NMPF’s CWT program. Kozak will take on the CWT hat while Tillison assists behind the scenes.

Sincere Wishes
   It’s that very special time of the year that you don’t have to be a kid to love. As we approach the end of 2013 and take tomorrow off to celebrate Christmas Day, we at DairyBusiness Update and DairyBusiness Communications would like to wish you a safe and joyous holiday with family and friends. There is a reason for the season and we rejoice in it!
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Mielke’s Market Daily for Tuesday
(A daily wrap-up of dairy markets and the things affecting them, from DairyBusiness Update associate editor Lee Mielke)
   Yesterday’s Cold Storage report fed the “pit bulls” alright but there was a surprise this morning in cash butter trading. FC Stone dairy broker Dave Kurzawski wrote in this morning’s eDairy Insider Opening Bell: "I expect a firm opening off of yesterday's Cold Storage report. While the report was likely neutral for cheese, it still showed a strong seasonal decline in cheese in November."
   Another penny was laid under the Christmas tree this morning on the barrel side as an unfilled bid took the price up to $1.97/lb. The blocks stayed put at $2/lb., with no activity.
   The surprise was a drop today in cash butter on the heels of yesterday’s Cold Storage data which the Daily Dairy Report said showed the highest monthly drawdown in 20 years.
   The Double A price gave back 1.5¢ this morning, following a jump yesterday of 1.75¢ and 2 sessions of gain last week. Four carloads traded hands this morning, with the final sale taking the price to $1.5850/lb. Two bids at $1.58/lb. went unfilled and an offer at $1.5975/lb. was left on the board. But, as market analyst Jerry Dryer has often said, “One day a trend does not make.” We’ll have more of his perspective on things in Friday’s DairyLine broadcast.
   Cash Grade A nonfat dry milk held at $2.11/lb. and Extra Grade remained at $2.09/lb., with no activity in either market.

Today’s market closing prices:
Butter: Down 1.5¢, to $1.5850/lb.
Cheddar blocks: Unchanged, at $2.00/lb.
Cheddar barrels: Up 1¢, to $1.97/lb.
Grade A nonfat dry milk: Unchanged, at $2.11/lb.
Extra Grade nonfat dry milk: Unchanged, at $2.09/lb.
Class III milk: Jan.$19.64, +5¢, Feb.$18.97 -1¢, Mar.$18.78 unchanged. Based on current CME closing prices, the Q4 2013 average is $18.69/cwt.; with an overall 2013 average of $18.00/cwt.; and a 2014 average of $18.12/cwt.
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Looking ahead:
   The Agriculture Department issues its monthly Ag Prices report on Monday, which will include the latest milk feed price ratio. The Chicago Mercantile Exchange has regular trading hours Tuesday but is closed Wednesday for the New Year’s holiday and reopens Thursday and Friday. The December Federal order Class II, III, and IV milk prices are announced by USDA on Thursday, January 2, and the California Department of Food and Agriculture announces its comparable December Class 4a and 4b milk prices. The November Dairy Products report is issued by USDA on Friday, January 3.

Other’s headlines  

China culls two million dairy cows
Woman of the Year: Julene Allen
Newspaper columns earn first place for ag extension agent in contest
Pouring Cheese on Icy Roads in, Where Else, Wisconsin
Land O'Lakes website shares products' origin stories

 

 

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