DairyBusiness Update for 10.30.13
Farm Bill conferees provide statements; House adjourns until mid-November
Source: International Dairy Foods Association
The Farm Bill conference committee kicked off today with a general meeting to accommodate opening statements. The four principal conferees – Senate Ag Chairwoman Debbie Stabenow (D-MI), Ranking Member Thad Cochran (R-MS), House Committee on Ag Chairman Frank Lucas (R-OK) and Ranking Member Collin Peterson (D-MN) – are expected to meet in the coming weeks to determine if a general agreement can be reached on the major differences between the House and Senate bills.
No further meetings of the committee have been announced at this time, and the House of Representatives will not be in session again until Nov. 12.
The dairy provisions of the Farm Bill are being discussed today as the conference committee meets for the first time to iron out the differences between the House and Senate versions of the bill. Marin Bozic joins Mark Stephenson for a Skype video to discuss some of the implications of the insurance and stabilization provisions. You can stream the 15-minute video here and you can download a copy of an Issue Brief and Press Release from Minnesota's Food Policy Research Center.
NMPF urges Farm Bill conferees to include Senate’s Dairy Security Act in final measure
Statement by Jim Mulhern, Chief Operating Officer, National Milk Producers Federation
“At long last, the House and Senate are poised to finish their work on a final farm bill package. For America’s dairy farmers, this is no time for a game of congressional trick or treat. The final product must provide farmers real stability, and not be a costumed disguise that masks the serious problems that will result if the House dairy program were enacted.
“The Senate’s bipartisan Dairy Security Act is the only option that will provide help to farmers when they need it most, while also limiting taxpayers’ exposure through its market stabilization mechanism. It’s an important safety net to farmers when they need it, and not an underfunded liability to the government when the program is in operation.
“In contrast, the proposal that finally emerged from the House is a bad trick: it would be fiscally irresponsible and ineffective. Lacking the Senate’s market stabilization program, the House approach would cause farmers to suffer prolonged periods of poor margins, while taxpayers subsidize dairy processors through artificially-low milk prices.
“We strongly encourage the farm bill conferees to support the dairy title language in the Senate bill, and to include its provisions in the final package.”
October Class III, IV prices higher
The October federal order Class III benchmark milk price was announced this afternoon by USDA at $18.22/cwt., up 8¢ from September, but $2.80 less than October 2012, and equates to about $1.57/gallon. That brought the 2013 Class III average to $17.82/cwt., up from $16.98/cwt. in 2012, and compares to $18.25/cwt. in 2011 and $14.36/cwt. in 2010.
Class III futures settled this afternoon at $18.62/cwt. for November and $18.14/cwt. for December. That would result in a 2013 average of $17.91/cwt., up from $17.44/cwt. a year ago, and compares to $18.37/cwt. in 2011.
The October Class IV price is $20.17/cwt., up 74¢ from September and $1.63 above a year ago. The 2013 average now stands at $18.66/cwt., up from $15.56/cwt. in 2012 and $19.38/cwt. in 2011.
The product averages used in calculating the Class III & IV milk prices were announced by the Upper Midwest Milk Market Order. The cheese price average used was $1.8025/lb., up 0.6¢ from September. Butter averaged $1.5454/lb., up 11.9¢. Nonfat dry milk averaged $1.8366/lb., up 2.8¢; and dry whey averaged 57.31¢/lb., down fractionally from September.
California’s comparable 4a and 4b milk prices will be announced by the California Department of Food and Agriculture (CDFA) on Friday.
Mielke’s Market Daily
(A daily wrap-up of dairy markets and the things affecting them, from DairyBusiness Update associate editor Lee Mielke)
USDA issues its monthly Cold Storage report for September tomorrow, along with the Livestock Slaughter and Ag Prices reports. The September Milk Production report, issued Friday afternoon, will again include dairy cow numbers and output per cow data, suspended due to the sequester.
In the markets, cash cheese remained unchanged for the third day in a row today, but butter jumped. The 40-lb. cheddar blocks remained at $1.8750/lb. on 2 trades at that price. The 500-lb. barrels held at $1.82/lb., also with 2 cars trading hands at the existing price. One bid at $1.82 went unfilled, while an offer at $1.84 was also left on the board.
Butter jumped 2.5¢ this morning, hitting $1.50/lb., after holding for 4 consecutive sessions. Six cars found new homes, with prices ranging from $1.48/lb. to $1.50/lb. One bid at $1.50/lb. and 1 offer at $1.51/lb. were left on the board.
Powder was quiet again today, with Grade A holding at $1.90/lb., and Extra Grade at $1.85/lb. There was no activity.
Today’s market closing prices:
Butter: up 2.5¢, to $1.50/lb.
Cheddar blocks: unchanged, at $1.8750/lb.
Cheddar barrels: unchanged, at $1.82/lb.
Grade A nonfat dry milk: unchanged, at $1.90/lb.
Extra Grade nonfat dry milk: unchanged, at $1.85/lb.
Class III milk: -4¢ to +13¢ through December 2014. Based on current CME closing prices, the Q4 2013 average is $18.28/cwt.; with an overall 2013 average of $17.91/cwt.; and a 2014 average of $16.97/cwt.
Corn, soybeans, soybean meal futures trading
Today’s futures prices at the Chicago Mercantile Exchange:
Corn: -2¢ to -3¢ through December 2014, settling in a range of $4.30-$4.72/bushel.
Soybeans: +5¢ to +8¢ through November 2014. November 2013 through August 2014 contracts settled in a range of $12.31-$12.87/bushel.
Soybean meal: -$0.90 to +$1.00/ton through December 2014. December 2013-September 2014 contracts settled in a range of $368-$412/ton.
• The House and Senate finally meet to hammer out a new Farm Bill, with NMPF’s Chris Galen.
• USDA chief economist Joe Glauber discusses the impact of ramping up government reports.
Today in DairyBusiness Weekly:
(Our digital-only magazine)
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• Extension (but not accord)
• NMPF, livestock groups share story
• Mississippi State University Dairy Science Club: Trained and fit to be winners
• Movember becomes Moo-vember, too
• Something more to the story: Beyond the headlines of the show
• Shocking the world at Maple Dell Farm
• 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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