DairyBusiness Update for 11.26.13
A recent analysis by the Congressional Research Service (CRS) of the competing House and Senate farm bills shows that the Senate’s dairy program costs less than the House version, according to the National Milk Producers Federation (NMPF). The House farm bill’s dairy title is projected to cost $418 million above the baseline, according to the CRS report released in October, while the Senate dairy program costs $302 million more over the next 10 years.
Incoming NMPF President and CEO Jim Mulhern said the CRS report – the first to compare the two competing farm bill versions that conferees are attempting to reconcile – buttresses the point that NMPF has been making about the need to couple margin insurance with a market stabilization program, as the Senate bill does, to achieve cost controls.
“While even this analysis seriously underestimates what we and other independent analysts believe would be the real cost of the badly-flawed House approach, the CRS report demonstrates that the Senate plan is the most fiscally responsible program,” Mulhern said. “Without the market stabilization program to both reduce the duration of low margin conditions, and reduce government outlays for insurance payments, the House plan would be a budget-buster – and one that we urge the conferees to reject, in favor of the Senate’s more prudent approach.” Read more …
Final stages of legal action in the “Southeast Milk” lawsuit may mean eligible producers could receive settlement checks by the end of the year, according to Julia Walker, AgriVoice Enterprises, who has been following the lawsuit since July 2007.
Plaintiff attorneys Baker-Hostetler and Brewer & Terry filed a long-anticipated document, Nov. 26, in the Greeneville Division, Eastern District of Tennessee, in the Sixth United States District Court. The document carries a long title: "Dairy Farmer Plaintiffs' Motion for an Order Approving and Authorizing the Distribution of Funds fro the Settlement with Dairy Farmers of America, Inc., Dairy Marketing Services, LLC, Mid-Am Capital, LLC, National Dairy Holdings, LP, and Gary Hanman, and Application for Additional Payment for Claims Administrator Services and Expenses."
The 403-page document notes a net settlement fund (after court-approved, standard expenses) of about $85.64 million, which will be distributed on a “pro rata” basis to 6,086 eligible claimants. There were 7,764 claim forms submitted. Of those, 1,678 claims were denied, determined to ineligible for a number of reasons.
Before the checks can be cut and mailed, Judge Ronnie Greer must review and officially approve the motion. It is unknown how long this action will take to complete. However, given the timing of previous settlement payments, there is a good possibility – but no guarantee – that these monies will be received by eligible dairy producers before the end of this year, Walker said. Read more …
CWT exports more U.S. dairy products
Cooperatives Working Together (CWT) accepted 36 requests for export assistance from Bongards Creameries, Dairy Farmers of America, Foremost Farms USA, Maryland Virginia Milk Producers Cooperative Association, Northwest Dairy Association (Darigold), Tillamook County Creamery Association and Upstate Niagara Cooperative (O-AT-KA) to sell 9.76 million lbs. of cheddar, Gouda and Monterey Jack cheese and 3.0 million lbs. of butter to customers in Asia, Central America, Europe, the Middle East and North Africa. The product will be delivered through May 2014.
So far in 2013, CWT has assisted member cooperatives in selling 121.78 million lbs. of cheese, 87.92 million lbs. of butter, 44,092 lbs. of anhydrous milk fat and 218,258 lbs. of whole milk powder to 38 countries on six continents. These sales are the equivalent of 3.1billion lbs. of milk on a milkfat basis.
‘Mark & Bob’ talk dairy (not turkey)
Mark Stephenson, Director of Dairy Policy Analysis at the University of Wisconsin-Madison, and Bob Cropp, dairy economics professor emeritus, wish you a happy Thanksgiving, carving up dairy reports as they share a few thoughts about dairy markets and milk prices. You can stream the 9-1/2 minute video here.
Mielke’s Market Daily
(A daily wrap-up of dairy markets and the things affecting them, from DairyBusiness Update associate editor Lee Mielke)
Cash trading has 1 more day left this week, due to the Thanksgiving holiday. The 40-lb. cheddar blocks tacked on another 1.5¢ this morning, following yesterday’s 1.5¢ gain and Friday’s 1.5¢ gain, and are now trading at $1.8650/lb. Two cars were sold at that price and a bid at $1.8650/lb. went unfilled. Somebody needed some 500-lb. barrel this morning and put in a bid 2.25¢ above yesterday’s closing price, but that didn’t knock any loose. The unfilled bid reversed yesterday’s 0.75¢ loss and 0.5¢ on Friday, and put the barrels at $1.77/lb. The spread shrunk a little from 10.25¢ yesterday to 9.5¢ today.
Brian W. Gould, Professor Department of Agricultural and Applied Economics at the University of Wisconsin-Madison, points out that the average spread in 2013 was 4.5¢ with a range from -5.75¢ to 23¢. He also reminds us that barrel cheddar is used in further manufacturing such as in processed cheese and cheese spreads.
Cash butter was unchanged this morning, following yesterday’s 1.5¢ slip, and remains at $1.6650/lb. Three cars traded hands at that price and an offer at $1.67/lb. went nowhere.
The $2 bell was ringing this morning on cash Grade A nonfat dry milk, up 1.5¢, to $2.00/lb. Powder hasn’t been at this altitude since November 2007. Two cars were sold at that price, with a $2 bid going unfilled. Extra Grade remained at $1.9750/lb., with a bid at that price also going unfilled today.
Today’s market closing prices:
Butter: unchanged, at $1.6650/lb.
Cheddar blocks: up 1.5¢, to $1.8650/lb.
Cheddar barrels: up 2.25¢, to $1.77/lb.
Grade A nonfat dry milk: up 1.5¢, to $2.00/lb.
Extra Grade nonfat dry milk: unchanged, at $1.9750/lb.
Class III milk: -3¢ to +17¢ through December 2015. Based on current CME closing prices, the Q4 2013 average is $18.48/cwt.; with an overall 2013 average of $17.94/cwt.; and a 2014 average of $17.11/cwt.
Corn, soybeans, soybean meal futures trading
Today’s futures prices at the Chicago Mercantile Exchange:
Corn: -5¢ to -6¢ through December 2015, settling in a range of $4.18-$4.54/bushel.
Soybeans: steady to -5¢ through November 2015. January through August 2014 contracts settled in a range of $13.29-$12.58/bushel.
Soybean meal: -$1.50 to +$13.00/ton through December 2015. December 2013-July 2014 contracts settled in a range of $450-$401/ton.
Coming up: The Ag Prices report is issued tomorrow afternoon, including USDA’s latest milk feed price ratio. There are no reports the rest of the week due to the Thanksgiving holiday. The California Department of Food and Agriculture is scheduled to announce its November Class 4a and 4b milk prices on Monday; USDA issues its October Dairy Products report on Tuesday; and November federal order Class II, III, and IV milk prices are announced on Wednesday.
Tomorrow in DairyBusiness Weekly:
(Our digital-only magazine)
• Undercover Boss brings a positive twist to dairy
• October U.S. milk output up 1%
• Idaho honors its dairy best
• Moon Cheese lands on Earth
• Innovating for maximum performance
• Holstein USA: New hire, promotions
• Are you missing opportunities with your embryo transfer recipients?
• A prefix that says it all
• Include your veterinarian to your health management team
• Check out our industry briefs and show and sale calendar, view our product spotlight, listen to our podcasts and more!
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 firstname.lastname@example.org 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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