DairyProfit Update for Dec. 4, 2012
Dairy product consumption has changed substantially over the past several decades, and while a lot of attention focuses on the ongoing trend downward in per capita fluid milk consumption, cheese and – more recently yogurt – have helped lead to an increase in overall dairy consumption, according to the Central federal marketing order administrator’s November 2012 Marketing Service Bulletin (www.fmmacentral.com).
Based on preliminary 2011 USDA Economic Research Service data, per capita consumption of fluid milk and cream was 201 lbs., 2.4% lower than 2010 and the lowest annual amount recorded between 1975 and 2011. Comparing 2011 with 1975, fluid milk and cream consumption decreased by 23.0%.
That’s in sharp contrast to the dramatic upward trend in per capita cheese consumption, which passed fluid products on a milk-equivalent basis in the late 1980s and increased in 21 of the past 23 years. 2011 per capita cheese consumption increased 1.1% from 2010, and is 134.8% greater than 1975. Mozzarella posted the largest gains among hard cheeses, rising from just 2.1 lbs. per person in 1975 to 11.4 lbs. in 2011.
Yogurt consumption increased from 2.0 lbs. per person in 1975 to 13.7 lbs. in 2011 (+585.0%).
Consumption of all dairy products on a milk equivalent basis grew by 65 lbs. per person (+12.1%), increasing from 539 lbs. in 1975 to 604 lbs. in 2011.
Yesterday’s DairyProfit Update miscalculated the Class 4b year-to-date change from 2011 compared to 2012. We regret the error.
The November 2012 California Class 4a milk prices is $18.27/cwt., up 31¢ from October and 57¢ more than November 2011. It's the highest 4a price since October 2011. The average 2012 year-to-date (Y-T-D) 4a price is $15.46/cwt., down $3.55 from the same period in 2011.
The November 2012 California Class 4b price is $18.48/cwt., down 95¢ from October, but $1.29 more than November 2011. The average 2012 Y-T-D 4b price is $15.47/cwt., down $1.01 from January-November 2011.
Federal order November Class II, III & IV prices are announced Dec. 5.
The 2012-2013 term of the U.S. Supreme Court will include a hearing on Bowman v. Monsanto Co., regarding the scope of patent rights for agricultural biotechnology, according to A. Bryan Endres, with the University of Illinois Department of Agricultural & Consumer Economics.
While a farmer cannot save seed from a harvested biotech crop for planting the following year, this case will decide whether a biotech crop sold as a commodity to a grain elevator, for example, could be purchased by a farmer and subsequently used for seed.
Under current law, one does not "buy" the patented seeds, but rather purchases a license from the patent holder to use the patented technology embedded in the seed itself. This is a limited-use license that places restrictions on the license holder's use of the seed, e.g., no saving seed for replanting the next growing season.
A federal trial court in Indiana, as well as the Court of Appeals for the Federal Circuit in Washington, D.C, ruled in favor of the patent holder, Monsanto. The Supreme Court has not yet set a date for oral argument and briefs.
MARKETS: Butter down 1¢; Class III futures continue lower
Today's market closing prices:
Butter: down 1.0¢, to $1.58/lb.
Cheddar blocks: unchanged at $1.76/lb.
Cheddar barrels: unchanged at $1.7025/lb.
Grade A nonfat dry milk: unchanged, at $1.5575/lb.
Extra Grade nonfat dry milk: unchanged, at $1.56/lb.
Class III milk: -1¢ to -18¢ through June 2013. Based on current CME closing prices, the average for November-December 2012 is $19.64/cwt.; the full year 2012 average is $17.43/cwt.; and the 2013 average is $18.41/cwt.; the 2014 average is $16.15/cwt.
Corn soybeans and meal mixed in very narrow range
Corn: -1¢ to +2¢ through September 2013. The 2013 average is $7.12/bu.
Soybeans: -2¢ to +2¢ through September 2013. The 2013 average is $14.01/bu.
Soybean meal: -$0.70 to +$2.60/ton through September 2013. The 2013 average is $406.05/ton.