DairyBusiness Update for 10.10.13Print
IDFA: Government shutdown hampers U.S. trade negotiations
The government shutdown has put a damper on current U.S. trade negotiations in the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP), according to the International Dairy Foods Association. The Office of the U.S. Trade Representative (USTR) was already under budget constraints due to sequestration, and the shutdown further limits its capacity to negotiate and enforce trade deals as three-quarters of the department’s employees have been furloughed.
In addition, President Obama canceled his trip this week to Bali, Indonesia, where he was scheduled to host a meeting of the TPP leaders on the heels of the APEC summit. The agreement is set to conclude at the end of the year, but more work is needed in several key areas, and the shutdown could hinder participation by USTR officials in future negotiating sessions.
Comparable problems are also affecting TTIP. The second round of negotiations between the United States and the European Union scheduled to be held this week in Brussels was also canceled due to the shutdown. A new date has not been scheduled and is unlikely until the shutdown is over.
Grassley: Report shows federal farm payment loopholes
Sen. Chuck Grassley of Iowa released a Government Accountability Office (GAO) report showing additional changes are needed to Farm Bill payment eligibility requirements and limitation provisions for those “actively involved” in farming.
The report reviewed the Farm Service Agency’s compliance reviews of farming operation members’ claimed contributions of active personal management and personal labor. The GAO report also examines the Farm Service Agency’s state offices’ timeliness in completing and reporting compliance reviews and the results.
Grassley cited one case where farm payments go to 11 active managers of one farm who supposedly provide significant management experience, yet perform no labor.
Grassley said that the conferees to the Farm Bill should take notice of the report.
“This is just one more reason that my payment limits provisions included in the Senate and House bills -- placing a hard cap on farm payments and closing loopholes that allow non-farmers to game the system -- should stay untouched,” Grassley said.
The report can be found on Grassley’s website, grassley.senate.gov.
Mielke’s Market Daily
(A daily wrap-up of dairy markets and the things affecting them, from DairyBusiness Update associate editor Lee Mielke)
The October World Agricultural Supply and Demand Estimates report, scheduled for release tomorrow afternoon will not likely happen due to the shutdown. However federal order milk prices will still be announced. The November federal order Class I base will be announced on Tuesday, Oct. 23, with the Class II, III and IV prices on Oct. 30.
The Chicago Mercantile Exchange’s latest communication on their website:
It is currently our understanding that going forward the Upper Midwest Federal Order will continue to release both the weekly and monthly prices as scheduled. Therefore, it is our intention that the final settlement of the CME Milk (Class III & Class IV), Cheese, Butter, Whey and Nonfat Dry Milk futures and options contracts will occur on Wednesday, Oct. 30, 2013, as scheduled.
In order to access the weekly and final settlement data for the October contracts, please see your Federal Milk Order website. If your Federal Marketing Order does not have the information, you can link to the Upper Midwest Order at http://www.fmma30.com
There will be no November California Class I milk price announcement, which would have been announced tomorrow from the California Department of Food and Agriculture. That has nothing to do with the Federal government shutdown but is simply being delayed until October 22 as a result of the recent milk price hearing in Sacramento.
Cash cheese prices were bid higher this morning, according to DairyBusiness Update associate Editor Lee Mielke. The blocks were up 1¢, following yesterday’s 1.25¢ gain, and are now trading at $1.7825/lb. The barrels gained 1.25¢, following yesterday’s 1.75¢ rise, and hit $1.7525/lb. Two unfilled bids of block and one of barrel was the only activity.
Butter stopped two days of decline totaling 8.5¢ and held at $1.53/lb. this morning. There was no activity.
Grade A nonfat dry milk remained at $1.8450/lb., with no activity, but 1 bid of Extra Grade took the price 2¢ higher, to $1.80/lb., the first trading activity since September 20 and the first price change since August 22.
Today’s market closing prices:
Butter: unchanged, at $1.53/lb.
Cheddar blocks: up 1¢, to $1.7825/lb.
Cheddar barrels: up 1.25¢, to $1.7525/lb.
Grade A nonfat dry milk: unchanged, at $1.8450/lb.
Extra Grade nonfat dry milk: up 2¢, to $1.78/lb.
Class III milk: mixed to mostly slightly higher through October 2014. Based on current CME closing prices, the Q4 2013 average is $17.99/cwt.; with an overall 2013 average of $17.81/cwt.; and a 2014 average of $16.87/cwt.
Corn, soybean meal futures lower; soybeans steady to slightly higher
Today’s futures prices at the Chicago Mercantile Exchange:
Corn: -5¢ through December 2014, settling in a range of $4.38-$4.80/bushel.
Soybeans: steady to +4¢ through August 2014. November 2013 through August 2014 contracts settled in a range of $12.39-$12.88/bushel.
Soybean meal: -$0.80 to -$4.50/ton through December 2014. October 2013-September 2014 contracts settled in a range of $372-$424/ton.
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