DairyBusiness Update for 11.22.13
Farm Bill talks stumbling into another month
Politico and others reported Farm Bill Conference Committee talks stumbled as lawmakers headed home for Thanksgiving. House Ag Committee Chair Frank Lucas (R-Okla.) said it would be “very challenging” to meet the Republican leadership’s schedule of having a final agreement back on the House floor by Dec. 13.
This is not surprising given all the issues on the table, and it by no means indicates that the House and Senate Agriculture Committees will not finalize a Farm Bill some time in the weeks ahead, according to Bob Gray, writing in the Northeast Dairy Farmers Cooperatives’ NDFC Newsletter. Watching the negotiations from a distance is like watching a roller coaster, he said, since one day everyone seems optimistic and the next day frustration sets in as the two sides grapple with the thorny issues that separate them from completing the bill in the near future.
The House is scheduled to return Dec. 2-13. The Senate will return Dec. 9-20. Negotiators plan to talk by phone on Nov. 25, and there is the possibility that the full House-Senate conference may meet Dec. 4.
October dairy stocks down from September, up from 2012
Preliminary data from USDA’s monthly Cold Storage report issued this afternoon shows Oct. 31, 2013 butter stocks stood at 173.8 million lbs., down a whopping 59.2 million lbs. (25%) from September, but 28.7 million lbs. (20%) above October 2012.
American-type cheese, at 629.2 million lbs., was down 31.8 million lbs. (5%) from September, but 18.3 million lbs. (3%) above a year ago. The total cheese inventory was estimated at 1.02 billion lbs., down 46 million lbs. (4%) from September, but 28.6 million lbs. (3%) above a year ago.
Farm Credit East, Maine to merger
Farm Credit East and Farm Credit of Maine announced that the stockholders of both cooperatives have overwhelmingly voted to merge. A letter was mailed to all voting stockholders notifying them of the results of the merger vote.
Final approval needs to be given to the merger by the Farm Credit Administration. If all conditions are met, the newly merged association is expected to begin operation on Jan. 1, 2014 under the legal name of Farm Credit East, ACA.
Farm Credit East will serve agricultural producers, forest product businesses, commercial fishermen and other rural landowners with combined assets of more than $5 billion and a portfolio in excess of 14,000 loans.
Cattle on feed down 6%
Cattle and calves on feed for slaughter market in U.S. feedlots with capacity of 1,000 or more head totaled 10.6 million head on Nov. 1, 6% less than a year earlier. October placements totaled 2.39 million head (2.32 million net), up 10% from a year earlier. October fed cattle marketings totaled 1.86 million, up 1%.
Source: USDA Ag Prices report, Nov. 22
Cheese demand OK; butter demand very good
Sales for cheese manufacturers have been mixed, according to USDA’s Dairy Market News (DMN). Some cheese makers are seeing a lull in demand while others have not been able to keep up with orders due to tight milk supplies or capacity constraints.
Cheese-making facilities report milk components have been better, according to DMN, but inventories are being used meet current orders.
Retail butter demand continues to be very good. Butter producers are busy filling holiday demand for print butter. Cream supplies are tight and some manufacturers are trying to find additional cream for export butter orders. Butter stocks are often tightening at a faster than expected pace, says DMN.
Talk turkey – it’s cheaper this year
The American Farm Bureau Federation’s 28th annual informal price survey of classic items found on the Thanksgiving Day dinner table indicates the average cost of this year’s feast for 10 is $49.04, a 44¢ decrease from last year’s average of $49.48.
“The cost of this year’s meal, at less than $5 per serving, remains an excellent value for consumers,” said AFBF President Bob Stallman, a rice and cattle producer from Texas. The AFBF survey shopping list includes turkey, bread stuffing, sweet potatoes, rolls with butter, peas, cranberries, a relish tray of carrots and celery, pumpkin pie with whipped cream, and beverages of coffee and milk, all in quantities sufficient to serve a family of 10. There is also plenty for leftovers.
The big ticket item, a 16-lb. turkey, came in at $21.76 this year. That was roughly $1.36/lb., a decrease of about 3¢/lb., or a total of 47¢ per whole turkey, compared to 2012. The whole bird was the biggest contributor to the final total, showing the largest price decrease compared to last year.
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 will have the weekend to absorb this afternoon’s October Cold Storage report and yesterday’s Livestock Slaughter report.
The cheddar block cheese price came back to life this morning, not having moved since last Friday, and tacked on 1.5¢ on an unfilled bid, to close at $1.8350/lb. The barrels rolled 0.5¢ lower this morning, following yesterday’s 1.5¢ uptick, and finished the week at $1.7550/lb. One sale at $1.7550/lb. was followed by a second sale at $1.7650/lb., but an uncovered offer brought it back to close lower on the day.
The blocks are up 1.5¢ on the week and 1¢ above a year ago. The barrels are down 0.25¢ on the week, 1¢ above a year ago, but 8¢ below the blocks, a spread that typically runs 3¢-5¢. Only 2 cars of each traded hands this week.
A trade took the butter up 2¢ this morning, following a 1¢ rise yesterday, and hit $1.68/lb. The Double A Chicago price is up 3¢ on the week but 1¢ below a year ago when it plunged 10.5¢. Seven cars found new homes this week
Bidders took the cash powder price up. Grade A nonfat dry milk gained 2¢ on an unfilled bid, hitting $1.9850/lb. Extra Grade was up 1¢ on a bid and closed at $1.9750/lb. You’ll recall, Grade A powder slipped a 1¢ earlier in the week but rallied today and closed 1¢ higher on the week. Three cars of Grade A were sold this week. Extra Grade is up 7.5¢ on the week, all on unfilled bids.
Today’s market closing prices:
Butter: up 2¢, to $1.68/lb.
Cheddar blocks: up 1.5¢, to $1.8350/lb.
Cheddar barrels: down 0.5¢, to $1.7550/lb.
Grade A nonfat dry milk: up 2¢, to $1.9850/lb.
Extra Grade nonfat dry milk: up 1¢, to $1.9750/lb.
Class III milk: -5¢ to +8¢ through December 2014. Based on current CME closing prices, the average for the final quarter of 2013 is $18.36/cwt., with an overall 2013 average of $17.91/cwt.; and the 2014 average is $17.01/cwt.
Next week: The dairy market will have a 3-day week next week, due to the Thanksgiving holiday. The monthly Ag Prices report will be issued Wednesday after trading has finished for the week.
This week in DairyBusiness Update:
TRENDS: Feast on all these trends
PAGE 2: Farm Bill talks stumbling into another month
NUMBERS: Mycotoxins, alfalfa hay exports
INDUSTRY: Promotion: Officers named; ‘fluid’ nominees sought
WASHINGTON: TPP, RFS & FSMA
• Preparing for an on-farm crisis? DMI’s David Pelzer says the dairy checkoff can help.
• Peter Kleiman updates us on the first year of Farm First Dairy Co-op.
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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