DairyBusiness Update for 11.21.13
October cow slaughter
USDA estimated 276,800 culled dairy cows were slaughtered under federal inspection in October 2013, up 18,200 from September 2013, but 8,600 less than October 2012.
The gap between 2012-2013 year-to-date cull dairy cow slaughter continues to close. The January-October 2013 total was estimated at 2.619 million head, 45,200 more than the same period in 2012. Through the second week in November, year-to-date cow slaughter was just 35,800 more than the same period a year ago, the smallest gap since April 6. Source: USDA October Livestock Slaughter Report
Federal Reserve Banks provided land value and credit condition summaries from third-quarter ag lender surveys. The reports were marked by a slowdown and even reversal of escalating land values in some districts during the past quarter. Also, variable loan interest rates inched upward in some districts.
• Q3 2013 average farmland values in the Federal Reserve Bank of Chicago were up 14% from a year ago. However, the district’s ag land values saw a gain of just 1% compared to Q2 2013, following no increase in the Q1 2013.
• Falling crop prices dragged Q3 2013 farm income lower in the Federal Reserve Bank of Kansas City, but that didn't have a big impact on district farmland values. Growth in cropland values was only slightly slower than the previous two years.
• Q3 2013 farmland values increased slightly and were above year-ago levels in the Federal Reserve Bank of Dallas. Ranchland and irrigated cropland values increased almost 2% over last quarter, but dryland values were up only about 1%. The great majority of respondents continued to anticipate farmland values will remain unchanged over the next three months.
• Farmland values and cash rents were down in Q3 2013 relative to the previous quarter in the Federal Reserve Bank of St. Louis. Read more ...
Pennsylvania ag officials oppose DMSP
Source: International Dairy Foods Association
Pennsylvania's current and former ag secretaries added their voices in opposition to inclusion of the Dairy Market Stabilization Program (DMSP) in the Farm Bill.
George Greig, secretary, and Dennis Wolff, former secretary, sent a letter to Representative Glenn Thompson (R-PA), a Farm Bill conference committee member, urging him to oppose DMSP included in the Senate version of the bill. They asked Thompson to support the House-passed version, which establishes a safety net for dairy farmers without the supply management provision.
“Programs that would periodically limit milk supplies would have disastrous effects on the U.S. dairy industry,” said Wolff, a dairy farmer, and Grieg, a former dairy farmer. “It is unfair and unprecedented to force any farmer, regardless of the commodity involved, to participate in supply management as a condition of enrolling in a government sponsored risk management program.”
The letter cited negative effects on U.S. dairy exports, saying “The DMSP would be detrimental to our reputation as a dependable supplier to the global markets and force dairy farmers to cut back on production when growth is needed.”Read the full letter here.
The House is scheduled to return Dec. 2-13. The Senate will return after the Thanksgiving recess on Dec. 9 and work through Dec. 20.
Mielke’s Market Daily
(A daily wrap-up of dairy markets and the things affecting them, from DairyBusiness Update associate editor Lee Mielke)
Cash dairy traders, still digesting Tuesday’s October Milk Production report and Global Dairy Trade auction, were anticipating this afternoon’s Livestock Slaughter report and tomorrow’s October Cold Storage data.
The 40-lb. block cheddar cheese price was unchanged for the fourth session in a row this morning, holding at $1.82/lb., with no activity. And, after slipping 1.25¢ the past 2 sessions, an unfilled bid took the 500-lb. barrels up 1.5¢ this morning, to $1.76/lb., the first upward move in 13 sessions. The spread now stands at 6¢.
Butter, after holding for 4 consecutive sessions, gained 1¢ on an unfilled bid this morning, hitting $1.66/lb. An offer at $1.67/lb. went uncovered.
Cash powder was quiet. Grade A held at $1.9650/lb., with 3 bids at that price going unfilled. Extra Grade remained at $1.9650/lb. as well, with no activity.
Today’s market closing prices:
Butter: up 1¢, to $1.66/lb.
Cheddar blocks: unchanged, at $1.82/lb.
Cheddar barrels: up 1.5¢, to $1.76/lb.
Grade A nonfat dry milk: unchanged, at $1.9650/lb.
Extra Grade nonfat dry milk: unchanged, at $1.9650/lb.
Class III milk: -10¢ to +32¢ through December 2014. Based on current CME closing prices, the average for the final quarter of 2013 is $18.37/cwt., with an overall 2013 average of $17.92/cwt.; and the 2014 average is $16.99/cwt.
Next week will be a short one, with the markets being closed Thursday and Friday for the Thanksgiving holiday. Traders won’t have much to feed on either. USDA issues its monthly Ag Prices report on Wednesday, the only USDA report that we regularly monitor that is issued next week.
Oceania cheddar prices steady to lower despite lower output
Oceania cheddar cheese prices are steady to lower, according to USDA’s Dairy Market News (DMN). Production trends are often lower as returns favor making whole milk powder. Cheese holdings are light to moderate for servicing export accounts. Dairy Australia reports cheddar production from July-September was down 12.9% from a year earlier.
• Moon Cheese has landed in the Pacific Northwest
• Mike Hutjens warns calf owners of the cold temperatures coming.
Enter the holiday dairy photo contest
We want to see your best farm-related holiday photos. Maybe your Holstein is acting as Rudolph, or perhaps you’re dressed like elves by the farm sign. Either way, we hope you’ll share! A grand prize winner will be selected and will receive a new digital camera in addition to a possible future cover on DairyBusiness Weekly. To enter, send your best photo with caption to email@example.com by Friday, Dec. 20.
Rules: One entry per contestant. Photos entered in previous contests are not eligible. High resolution photos are preferred.
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