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DairyBusiness Update: May 5, 2014


Corn Planting Lags 5-Year Average by 13%
The Agriculture Department’s latest Crop Progress report issued this afternoon shows 29% of the nation’s corn has been planted, up 10% from the previous week, up 18% from this time a year ago, but 13% behind the five-year average. Of the 18 states listed in the report, which comprised 91% of 2013 crop, all have seed in the ground as of the week ending May 4, up from 17 the previous week and listed below:
State                               Week Ending
                May 4, 2013 / April 27, 2014 / May 4, 2014  Five Year Average
Colorado     11%                16%                35%                  30%  
Illinois          6%                  32%                43%                  41%
Indiana        7%                  8%                  20%                  34%
Iowa            7%                  15%                23%                  50%
Kansas       16%                 37%                52%                  46%
Kentucky    31%                 32%                39%                  52%
Michigan     4%                  1%                  3%                    23% 
Minnesota   2%                  4%                  8%                    46%
Missouri      21%                47%                63%                  51%
Nebraska    12%                20%                44%                  45%
N Carolina  87%                60%                 75%                  91%         
N Dakota    1%                   -                       -                       19%
Ohio            6%                  4%                  9%                    32%
Penn.          26%                2%                  8%                    25%
S Dakota     6%                  11%                25%                  23%
Tennessee 55%                 53%                68%                  70%
Texas         70%                 64%                73%                  76%
Wisconsin   3%                  1%                  2%                     23%

   Eight of the 18 states, 12 show corn emerged, or 7%, up 4% from the previous week, up 4% from a year ago, but 6% below the 5-year average and shown below:
   The report shows 5% of the soybean crop was in the ground, as of the week ending May 4, up 2% from the previous week, up 3% from a year ago, but 6% behind the five year average. Seed is in the ground in 16 of the top 18 states that made up 95% of the 2013 soybean acreage, up from 10 last week, up from 8 a year ago, and down from 18 in the five year average.
   There is 16% of the cotton crop planted, up 3% from the week before, down 1% from a year ago, and 9% below the five-year average. Of the 15 states listed, which comprised 98% of the 2013 cotton crop, 14 show cotton planted.

U.S. Cheese Production is Building
   Cheese production is steady to building slowly depending on local milk intakes, according to USDDA’s Dairy Market News (DMN). More plants are working longer hours where milk is available. The increased cheese production is helping to build some inventory. Block and barrel stocks are said to be in a better balance for current demand.   
   Cheese prices are mixed with a weaker undertone developing. Domestic demand is good with some buyers looking to purchase additional inventory on price breaks. Export demand is steady with cheese plants servicing existing orders. Increased cheese production in the European Union is being noted in export circles.

U.S. Butter Inventories Not at Typical Levels
   Butter prices moved higher as sales improved domestically while export orders are active, according to Dairy Market News. The market tone is bullish. Butter production is mostly steady with a few increases as milk supplies are becoming readily available. Competition for spot loads of cream is increasing in the Central and Western regions. Given the current market conditions, many butter manufacturers have not built inventories like they have in previous years. Stocks of butter are light, but buyers are getting the loads they need.

NMPF: FDA Needs to be Consistent
   The National Milk Producers Federation says it has soured on efforts by the Food and Drug Administration to devote attention to regulating the names of certain types of sugar, while at the same time the agency is ignoring the misuse of dairy-specific names in foods with no milk content.
   In a letter sent today as part of an FDA request for comments, NMPF questioned why the FDA is focused on clarifying the common or usual name for “dried cane syrup” or “evaporated cane juice” – a type of dried sugar used as a food ingredient – even as it allows soy, rice, nut and hemp products to define themselves as milk, in violation of long-standing food standards.
   “Getting a sugar fix is fine and well, as long as the FDA also turns its attention to a problem that has been ignored for more than a decade,” said Beth Briczinski, NMPF Vice President of Dairy Foods & Nutrition. “Unfortunately, the agency’s lack of effort on misbranded and mislabeled imitation dairy products has left a bitter taste in our mouths.”
   In the letter sent Monday to FDA, NMPF wrote that it is not advising FDA “on an appropriate name for what would be obvious to most consumers is a type of sweetener, but rather to question the Agency’s allocation of resources to such an effort. It seems rather disingenuous for the Agency to utilize its often-referenced ‘limited resources’ to issue additional labeling guidance, while simultaneously not enforcing existing regulations pertaining to the identity of foods” including imitation dairy products, NMPF wrote in the letter.  
   “The Agency has blatantly disregarded the names displayed on the labels of imitation dairy products (e.g., “soy milk”, “rice yogurt”, etc.) in the current marketplace. While the FDA has made its position clear through warning letters to several manufacturers, NMPF would argue that these actions have been too infrequent to be effective, essentially creating a labeling landscape free of enforcement.” 
   Today’s letter from NMPF is the latest in a series of correspondence between the dairy organization and the FDA, dating back to 2000, in which NMPF has urged the agency to enforce existing requirements for the labeling of imitation foods specifying that many milk, yogurt, cheese and ice cream substitutes produced from vegetable or plant materials are not nutritionally equivalent to real dairy products. 
   “Manufacturers of these imitation products have misled American consumers for far too long – making a mockery of currently labeling regulations – by usurping the ‘dairy halo’ associated with wholesome and nutritious milk and dairy products,” the letter said.

Is it Real Milk?
   Arden Tewksbury, manager of the Progressive Agriculture Association, poses the question in the Madison County Courier. He writes: Despite false claims being made by the companies that manufacture imitation milk, nearly all American consumers are still using regular cow milk, not the imitation drink that is being labeled as various kinds of milk.
   Actually, in my opinion, this imitation milk should be labeled as a drink, not as milk. According to Webster’s dictionary, milk comes from mammals. I don’t see where Webster claims that milk comes from plants.
   I really don’t see how these imitators get away with calling their drinks milk. Certainly one would agree that in a free economy like we have in the United States, anyone should be able to manufacture any product that is safe and properly labeled. It’s proper time that the organizations that collect a large sum of money from all dairy farmers fight back against these false claims that are airing across the airways concerning regular milk.
   During the mid-60s, some milk bottlers including dairy co-operatives, were making imitation milk; usually identified as “filled milk.” It took a lot of work to combat these imitation people, whoops, I mean, these imitation products; however, I think the advertising campaigns that are being carried on today against real milk could turn out to be more serious than what transpired back then.
   And you know what? The present administration in Washington, D.C., is not helping the cause with the irresponsible guidelines they have established that forces schools across the United States to serve low fat or nonfat milk to our school children. It’s not regular milk that is causing obesity in our students (wherever obesity might exist); it’s the lack of sufficient exercise coupled with poor nutritional consumption.
   Read the complete article at: http://goo.gl/IBhWxL

GMO Labeling gets a Thumbs Down
   A new paper released Monday in Washington, D.C., by the Council for Agricultural Science and Technology reviews the debate surrounding labeling for genetically modified foods (GMOs) in the United States and the potential impact of making it mandatory. The authors conclude that current labeling measures already provide consumers with non-GMO choices and that mandatory labeling would raise food costs.      
   Saying state labeling laws likely will spur litigation, they also conclude that legislators and consumers need independent, objective information to move the GMO conversation from contentious claims to a fact-based dialogue. Ruth Saunders, IDFA vice president of policy and legislative affairs, and Kyle Shreve, IDFA manager of legislative affairs, attended the CAST briefing.
   The paper from CAST, a nonprofit organization dedicated to interpreting and communicating science-based information, describes the scientific, legal and economic aspects of requiring food labeling based on the process of genetic engineering (GE) rather than on some attribute of the food itself. It states, “All domesticated crops and animals have been genetically modified in some way, whether through conventional breeding techniques or biotechnology. Worldwide scientific evidence shows that both types of breeding are equally safe.”
   The complete report is posted on IDFA’s website; www.idfa.org.

The “Down Under” is Looking Up at U.S.
   Radio New Zealand News reports that New Zealand dairy farmers are being urged not to ignore the growing United States dairy industry as it starts to muscle in on this country's traditional export markets. The United States is now New Zealand's second biggest dairy competitor.
   David McCall from DairyNZ said large-scale farms with feedlots of up to 30,000 cows makes for a much cheaper operation. He said that, until recently, most American dairy products were consumed domestically, but that's now changing.
   "They've made some changes to set up their dairies and some of their processing factories directly to produce export product, is one thing that they're doing. And they're producing the sort of products now that Chinese and other markets are demanding.
   "And secondly, there's emergence of, the mega dairies - which are taking over the desert areas of the United States.
''They've got the scale that allows them to use quite advanced technologies, particularly information technologies; they're very information rich farms and they are leveraging some very good managers and managing those operations with up to 200 staff."
   Mr McCall said the key conclusion he came away with from his American trip with was that the New Zealand dairy industry needn't follow the United States' way of doing things. "We have to focus uniquely on our unique competitive advantages and ensure that we keep working away at those to make ourselves more efficient, drive out waste, increase our precision and compete on our terms," he said.
   The article is posted at http://goo.gl/WLcxZA

Mielke Market Daily 
(A daily wrap-up of dairy markets and the things affecting them, from DairyBusiness Update associate editor Lee Mielke)
   The cash cheese price decline stopped, at least for this morning. The blocks held at $2.07/lb., after plunging 14¢ last week. The barrels remained at $2.0550/lb., after dropping 12.5¢ last week. There was no activity in either market today.
   FC Stone dairy broker Dave Kurzawski wrote in this morning’s Insider Opening Bell that "There seems to be milk freeing up out West. Production has been picking up in several states following California's previous gains. There seems to be more milk and cheese moving around, so prices are coming down a little." He reports that “talk in the industry that spot prices within a nickel of $2/lb. could bring in new buying.”    
   Butter keeps getting bid higher, up 2.5¢ this morning on an unfilled bid, following Friday’s 7.25¢ jump, 5.25¢ Thursday, and 4¢ on Wednesday. The Grade A price is now trading at $2.10/lb., the highest it has been since June 2011.
   Kurzawski says butter “Probably has some more upside in the very short term, but could trade around $2.05 to $2.10 for a while before making a run at $2.25 if we don't see a big chunk of milk come in May from the Midwest." He adds that ice cream sales are strong and cream is generally tight.
   Cash Grade A nonfat dry milk was unchanged, holding at $1.7775/lb. A bid at $1.75/lb. was left on the board.
   "Nonfat seems to be the soft market of the dairy complex still," says Kurzawski. "I don't see an impetus to drive prices up on nonfat now, but there is decent buying interest in the mid- to low $1.70s."

Today’s Market Closing Prices
Butter: Up 2.5¢, to $2.10/lb.
Cheddar blocks: Unchanged, at $2.07/lb.
Cheddar barrels: Unchanged, at $2.0550/lb.
Grade A nonfat dry milk: Unchanged, at $1.7775/lb.
Class III milk: May $22.81, +6¢; Jun. $21.43, -12¢; Jly $20.40, -15¢; Aug. $19.81, -13¢; & Sept. $19.85, -2¢. Based on today’s CME settlements, the Third Quarter 2014 average now stands at $20.02, -10¢ from Friday. The 2nd half average is now at $19.55, -4¢ from Friday.
Looking ahead:
   The Global Dairy Trade auction (GDT) is tomorrow morning. International prices on the GDT have fallen about 20% since early February, according to Kurzawski. Dairy eyes will be watching if that fall continues. The California Department of Food and Agriculture announces its June Class I milk prices on Friday. USDA issues its monthly World Agricultural Supply & Demand Estimates report, which will include the latest estimates on milk production and milk prices, and the monthly Crop Production report is issued.

Tuesday on DairyLine:
   A recap of the latest Ag Census data 
   Organizers are gearing up for "Strolling of the Heifers" in Vermont.