DairyBusiness Update for Jan. 23, 2013

 

December cow numbers, milk output increase

Cow numbers and milk output per cow grew in December 2012, resulting in the highest monthly percentage year-over-year U.S. milk production increase since May, according to USDA’s monthly Milk Production report, released Jan. 23.

Nationally, December 2012 cow numbers were estimated at 9.213 million head, up 16,000 from November 2012, but 10,000 less than December 2011. December 2012 cow numbers in the 23 major dairy states were estimated at 8.490 million head, up 16,000 from November 2012 and 5,000 more than December 2011. 

Among the 23 major dairy states, eight increased cow numbers in December 2012 compared to a month earlier, led by Arizona (+5,000); and Kansas & Texas (+3,000 each). Only New Mexico (-2,000), California and Wisconsin (-1,000 each) posted declines.

Compared to a year earlier, December 2012 cow numbers declined in only five states, led by New Mexico (-13,000), Arizona (-6,000), and Pennsylvania (-5,000). Largest year-to-year gains were in Kansas (+8,000), Michigan (+7,000), Wisconsin (+5,000) and Colorado (+4,000).

 

Preliminary 2012 milk, cow estimates are in – and up

With the December 2012 preliminary estimates, USDA provided the first glimpse of 2012 totals for cow numbers and milk production. U.S. cow numbers averaged 9.231 million head for the year, up 37,000 head from 2011. Milk output per cow averaged 21,697 lbs., a 352-lb. gain from 2011. 

Cow numbers in the 23 major dairy states averaged 8.499 million head in 2012, 50,000 more than 2011. Output per cow averaged 21,958 lbs. in 2012, 331 lbs. more than 2011.

U.S. milk production reached 200.28 billion lbs. in 2012, up 2.1% from 2011. Major dairy state production was estimated at 186.62 billion lbs., also up 2.1% from the year before. Final 2012 estimates will be included in USDA’s February Milk Production report.

 

Reid reintroduces Senate ‘placeholder’ farm bill

Senate Majority Leader Harry Reid (D-Nev.) reintroduced the five-year farm bill approved by the full Senate last summer, but is no specific timetable on its consideration.

Senate Ag Committee chair Debbie Stabenow (D-Mich.) she is committed to convening a Senate Ag Committee mark-up as soon as possible. The legislation introduced by Reid will be used as a placeholder for whatever language comes out of the Senate Ag Committee during the 113th Congress. 

Reid’s decision to put the farm bill near the top of the list of things to do in 2013 is good news for America’s dairy farmers, according to Jerry Kozak, National Milk Producers Federation (NMPF) president and CEO.

“Reid’s decision recognizes that the dairy policy reforms contained in the bill, along with other provisions in the measure, passed with overwhelming, bipartisan support last summer,” Kozak said. “The bill’s Dairy Security Act will give farmers a better safety net while reducing taxpayer costs at a time when Congress is searching for ways to trim federal spending.

 

NMPF praises successful U.S.-China dairy certificate negotiations

The National Milk Producers Federation (NMPF) praised the successful resolution of negotiations with China on an import dairy certificate, a measure that provides certainty to U.S. dairy exporters in order to enhance U.S.-China dairy trade.

U.S. and China government officials have been negotiating a new certificate for nearly three years, since China revised its requirements under the dairy certificate in the first part of 2010. Despite continued access to the Chinese market, the lack of an agreed-upon certificate impeded greater U.S. dairy exports, due to the uncertainty of whether the issue would ultimately be resolved.

The U.S. will begin issuing the new certificate immediately for product destined for China. Certificates issued by the U.S. prior to Jan. 18, 2013 will be valid through March 20, 2013 but not accepted by China after that date.

U.S. dairy sales to China in 2012 were an estimated $400 million. U.S. dairy exports to China have grown by more than 100% since 2010 and are expected to continue to grow to help meet the increasing demand for dairy products in that country.

Cold storage inventories 

Dec. 31 butter stocks totaled 152.85 million lbs., up 20% from Nov. 30, and 43% more than December 2011, according to USDA’s Cold Storage report, released Jan. 22. Total cheese stocks, at 987.85 million lbs., were up 5% from November 2012, but virtually unchanged from December 2011. American cheese, at 604.88 million lbs., was up 4% from November, but 1% less than a year earlier.

 

MARKETS: A quiet day for products; Class III futures mixed

Today's market closing prices:

Butter: unchanged at $1.5050/lb.

Cheddar blocks: unchanged at $1.66/lb.

Cheddar barrels: unchanged at $1.60/lb.

Grade A nonfat dry milk: unchanged at $1.53/lb.

Extra Grade nonfat dry milk: unchanged at $1.56/lb.

Class III milk: -8¢ to +9¢ through December 2013. Based on current CME closing prices, the 2012 average is $17.44/cwt.; the 2013 average is $18.11/cwt.; and the 2014 average is $16.40/cwt.

 

Corn, soybean & meal futures lower

Corn: -0.6¢ to -7.6¢ per bushel through September 2013. The 2013 average is $6.73/bu.

Soybeans: -8¢ to -15¢ per bushel through November 2013. The 2013 average is $13.88/bu.

Soybean meal: -$2.00 to -$5.10/ton through December 2013. The 2013 average is $391.64/ton.