DairyBusiness Update for 10.23.13

November Class I base up

The November federal order Class I base price is $20.20/cwt., up $1.00 from October 2013, but 50¢ less than November 2012. That pulled the 2013 Class I base average to $18.70/cwt., up from $17.10/cwt. at this time a year ago, and compares to $19.19/cwt. in 2011, $15.21/cwt. in 2010, and $11.25/cwt. in 2009.

The AMS-surveyed product prices used to determine the Class I mover showed cheese at $1.7938/lb., up 2¢ from October. Butter averaged $1.5551/cwt., up 16.8¢; nonfat dry milk, at  $1.8358/lb., was up 3.5¢; and dry whey averaged 57.57¢/lb, down fractionally.


First public meeting for 2013 Farm Bill Conference Committee announced 

House and Senate Agriculture Committee leaders announced the first public meeting for the 2013 Farm Bill conference committee will be held next week on Wednesday, Oct. 30 at 1:00 p.m. ET in room 1100 of the Longworth House Office Building (the Ways and Means Committee Room). The agenda for the meeting of conferees will include opening statements and discussion of H.R. 2642, The Federal Agriculture Reform and Risk Management Act of 2013. Read more …

Visit the Committee Business Meeting webpage for additional information as it is made available.


California cheese makers ‘respect’ CDFA milk price decision

The Dairy Institute of California, which represents California cheese makers, says it respects yesterday’s decision by the California Department of Food and Agriculture (CDFA) not to increase the temporary milk price relief already in place for dairy farmers, but simply to extend it through June 2014. 

“After thoroughly reviewing the facts, Agriculture Secretary Karen Ross has correctly concluded that further increases to the temporary price relief already in place for California dairy farmers were not warranted,” said Rachel Kaldor, Executive Director of the Dairy Institute of California. “Secretary Ross was guided by the facts and we respect her decision. 

“The data shows very clearly that economic conditions for dairy farmers have improved substantially since last year,” said Kaldor. “In addition to significantly lower feed costs, dairy farmers are also benefitting substantially from an increased demand for cheese and other products. As a result, they’ve already collected $508 million more from processors during the first nine months of this year compared to the same period last year. Read more …


 CDC: CDFA decision demonstrates inequity of California dairy pricing system 

The hearing decision announced by California Department of Food and Agriculture (CDFA) Secretary Karen Ross demonstrates that the California milk pricing system is not equitable to the state’s dairy producers, according to California Dairy Campaign (CDC) President Joe Augusto. Ross extended the temporary overall price relief of 12.5¢/cwt. through June 30, 2014, but the increase did not approach the amount called for by producer organizations during a Sept. 12 hearing. 

 CDC joined California Dairies Inc., Milk Producers Council and Western United Dairymen in calling for an increase in the 4b price in the amount of 46/cwt. and an increase in the whey factor value from 75¢ to $1.00/cwt. 

“Today’s decision once again makes it clear that the only way to restore equity to milk pricing in California is by joining the federal milk marketing order system,” said Augusto. “On average dairy producer prices in California have been $1.05 lower than prices paid in the federal order causing the average sized dairy in our state to be paid nearly $600,000 less than the same sized dairy in the federal order system since January 2011.” Read more … 


Next LGM-Dairy policy sale is Oct. 25

The next Livestock Gross Margin-Dairy (LGM-Dairy) sales period begins Friday afternoon, Oct. 25, according to Alan Zepp, Risk Management Program coordinator with Pennsylvania’s Center for Dairy Excellence. LGM-Dairy will be offered for sale by crop insurance agents, with producers eligible to purchase margin insurance for a 10-month period (December 2013 to September 2014), or any combination of months during that period.

The December 2013-September 2013 average of expected margins ($0.00 deductible policy) is $13.89/cwt., still more than $1.50/cwt. above the five-year average actual margin of $12.23/cwt.; and just over the three-year average of $13.44/cwt. 

The premium for a $0 deductible policy to insure a $13.89/cwt. margin is estimated at 51¢/cwt. (12¢/cwt. to insure a $12.89/cwt. margin for a $1 deductible policy). Read more …


CDFA Milk Pricing Newsletter available

The October 2013 issue of the Milk Pricing Newsletter has been posted on the Dairy Marketing Branch website at: http://www.cdfa.ca.gov/dairy/uploader/postings/milkpricing/Default.aspx


IDFA: Canada-EU Union trade agreement GI concessions ‘disconcerting’

Source: International Dairy Foods Association

Canada and the European Union announced last week the conclusion of their free trade agreement. The talks, which began in May 2009, will require more technical work before the final text goes through legal review and translation. Ratification by the two sides could take 18 to 24 months.

The EU gained access to Canada’s cheese market with a tariff-rate quota (TRQ) of 17,000 metric tons for high-quality European cheese as well as a quota of 1,700 metric tons for industrial cheese. Canada gained access for beef (50,000 metric ton TRQ), pork (75,000 metric ton TRQ) and canned sweet corn (8,000 metric ton TRQ).

Press reports indicate a compromise in the area of geographical indications (GIs) for cheese products that may exclude future producers from marketing their cheese under generic names such as asiago, feta, fontina, gorgonzola and muenster. Greece’s agriculture minister has claimed this as a victory for feta, in particular.

This may be a favorable outcome for the EU, but not everyone is happy about the deal. Dairy Farmers of Canada have proclaimed their displeasure on their website stating, “Canada would lose its small, artisan and local cheese makers and a world-leading industry with top quality products – within a short time frame.”

The concessions granted to the EU by Canada are disconcerting for IDFA and U.S. cheese exporters. As negotiations continue in the Transatlantic Trade Investment Partnership (T-TIP) between the United States and the EU, protecting common cheese names will be a top priority for IDFA. IDFA will continue to work to ensure U.S. dairy exporters are not locked out of key markets by the EU.


Mielke’s Market Daily

(A daily wrap-up of dairy markets and the things affecting them, from DairyBusiness Update associate editor Lee Mielke)

Cash barrel cheese continued to strengthen this morning, while the blocks held at $1.8575/lb., with no activity. The barrels gained 0.75¢, following yesterday’s 3.25¢ jump, and is now trading at $1.80/lb. Six cars traded hands, with 1 at $1.8175/lb. One offer at $1.82/lb. was left on the board. The spread has narrowed to 5.75¢ below the blocks, compared to a normal 3-4¢.

Butter gained another 0.5¢ on a sale, following a 0.5¢ gain yesterday, hitting $1.4750/lb.  One offer at $1.48/lb. went uncovered.

Powder was unchanged again with Grade A remaining at $1.86/lb. and Extra Grade at $1.82/lb., with no activity.

Today’s market closing prices:

Butter: up 0.5¢, to $1.4750/lb.

Cheddar blocks: unchanged, at $1.8575/lb.

Cheddar barrels: up 0.75¢, to $1.80/lb.

Grade A nonfat dry milk: unchanged, at $1.86/lb.

Extra Grade nonfat dry milk: unchanged, at $1.82/lb.

Class III milk: mostly slightly higher through December 2014. Based on current CME closing prices, the Q4  2013 average is $18.16/cwt.; with an overall 2013 average of $17.87/cwt.; and a 2014 average of $16.91/cwt.


USDA reports rescheduled

The government shutdown resulted in several USDA reports being rescheduled. The Oct. 21 September Milk Production report will be issued on Nov. 1. The Oct. 22 September Cold Storage report will be released Oct. 31, and the Oct. 24 Livestock Slaughter report will be out Oct. 31, along with the monthly Ag Prices report. The next issue of Dairy Market News will be released Friday, Nov. 1.


Corn, soybeans, soybean meal futures higher

Today’s futures prices at the Chicago Mercantile Exchange:

Corn: +4¢ through December 2014, settling in a range of $4.43-$4.85/bushel.

Soybeans: +2¢ to +8¢ through November 2014. November 2013 through August  2014 contracts settled in a range of $12.50-$13.10/bushel.

Soybean meal: +$1.20 to +5.30/ton through December 2014. December 2013-September 2014 contracts settled in a range of $374-$421/ton.


Today on Facebook


• Photo of the Day: Celebrating the end of Fall Harvest on a beautiful Vermont October day. Seen here is Whitney Dunklee of Vern-Mont Farm along with friends Hannah and Scott Perlberg enjoying the view on top of 8,750 tons of corn silage. ~Photo by Kelli Dunklee #HolsteinWorldPOTD

Some website updates to check out tonight!

   Crasdale Farms (www.crasdalefarms.com)

   Barr Valley Holsteins (www.holsteinworld.com/Barrvalley)

   Palmyra Farm (www.palmyrafarm.net)

   Ransom Rail Farm (www.ransomrailfarm.com)

   Ferme Blondin (www.fermeblondin.com)


Today in DairyBusiness Weekly:

(Our digital-only magazine)

Price reports shortchanged producers

Dairymen The Moo-sical

Dairylea, DFA merger proposed

Braedale Goldwyn: Still the talk of the tanbark trail

• Past, present and future of Bonnie Mohr

• Check out our industry briefs, view our product spotlight, see what's happening on social media, listen to our podcasts and more!


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