DairyProfit Update: Oct. 11, 2011
Oct. 11, 2011
Casey introduces Federal Milk Marketing Act of 2011
U.S. Sen. Robert P. Casey Jr. (D-Pa.) introduced the Federal Milk Marketing Improvement Act of 2011 (S-1640).
The bill reduces the number of milk classes under the federal milk marketing order system from the current four, to two, and includes a supply management component. It incorporates a national average cost of production – calculated by the USDA Economic Research Service and including operating, allocated and overhead costs of production, plus an opportunity cost for unpaid labor – in the minimum price for Class II milk (all milk used for manufactured dairy products). The cost of production will be determined by a survey of producers and associations of dairy producers in federal and state milk marketing orders, as well as those in unregulated areas.
USDA will then announce a minimum Class II milk price, no later than Nov. 1, for the following calendar year. Minimum price adjustments will be made on April 1, July 1 and October 1 of each year. The Class 2 price, plus regional differentials, will determine the Class I price.
To see the text of the bill, visit http://thomas.loc.gov/cgi-bin/query/z?c112:S.1640:
LGM-Dairy enrollment is Oct. 28, but funding limited
The next enrollment date for the Livestock Gross Margin-Dairy Program is Friday, Oct. 28. Livestock Gross Margin-Dairy (LGM-Dairy), is a federally reinsured dairy insurance program supported through the USDA Risk Management Agency (RMA).
Don’t expect availability for long. With the start of the new fiscal year, the program received $7 million in funding, down from $16 million a year ago. A useful tool was developed by Brian Gould, dairy economist at the University of Wisconsin: LGM-Dairy Analyzer: http://future.aae.wisc.edu/lgm_analyzer/
Land O'Lakes issued a statement commending U.S. Sen. Richard Lugar (R-Ind.) for including provisions of Foundation for the Future in a farm bill proposal recently introduced with U.S. Rep. Marlin Stutzman (R-Ind.).
Lugar, a former chair of the Senate Ag Committee, and Stutzman jointly introduced a bill they call the Rural Economic Farm and Ranch Sustainability and Hunger Act (REFRESH). For the dairy title of the Farm Bill, the REFRESH legislation includes the key elements of the Dairy Security Act (DSA) of 2011, which previously was introduced in the House as HR 3062 by Reps. Collin Peterson (D-Minn.) and Mike Simpson (R-Idaho). The DSA is modeled after dairy reforms first proposed by the National Milk Producers Federation (NMPF).
MARKETS: Cheese crumbles, Class III higher
Closing on Tuesday, Oct. 11:
Cheddar barrels: down 1.5¢, to $1.72/lb.
Cheddar blocks: down 6.5¢, to $1.70/lb.
Butter: up 2¢, to $1.80/lb.
Extra Grade nonfat dry milk: unchanged, at $1.58/lb.
Grade A nonfat dry milk: unchanged, at $1.49/lb.
Class III milk: +2¢ to +21¢, December 2011 through December 2012. The October-December 2011 average is now $17.14/cwt., yielding a 2011 average of $17.99/cwt.; 2012 average is $16.61/cwt.
Corn/soy futures jump
Corn: +32.0¢ to +40.0¢/bushel through September 2012. The December 2011 price is $6.45/bu.; 2012 average is $6.44/bu.
Soybeans: +49.4¢ to +58.0¢/bushel through September 2012. The November 2011 price is $12.35/bu.; 2012 average is $12.53/bu.
Soybean meal: +$10.20 to +$12.20/ton through September 2012. The October-December 2011 average is $318.75/ton; 2012 average is $326.86/ton.
For a sample copy of DairyProfit Weekly, or subscription information, visit www.dairyprofit.com or phone: 800-334-1904, ext. 244.
Dave Natzke, Editor