Washington Dairygrams - April 10, 2012


As printed in our April 10, 2012 issue...

FEBRUARY MILK FLOW UP 4.3 percent nationwide when adjusted for leap year. Cow numbers rose 9,000 head from January; 87,000 head from the same time last year. The U.S. dairy herd is the largest since May 2009.

ALL BUT TWO of the top 23 states had greater milk output. When adjusted on a daily basis, Utah led gainers, up 8.5 percent; Colorado, 8.3; Arizona, 8.0; and California, 7.1. Only Vermont and Pennsylvania reduced milk flow.

CALIFORNIA’S HEAVY OUTPUT is causing processors to constrict the milk spigot because there isn’t enough plant capacity. DFA, California Dairies, and Hilmar all remind producers that base plans remain active.

LAND O’LAKES TAKES CONSTRAINTS one step further in its western division and called for at least a 6 percent reduction in production by April 1 or face a minimum charge of $10 per cwt. on excess milk.

THE TEMPORARY PLAN is scheduled to sunset on June 30. At that time, LOL will revert to the normal base plan. In the meantime, a 30-cent-per-cwt. bonus will be awarded to producers who comply with the new plan.

MEANWHILE, WISCONSIN announced an initiative to boost its production from 26 to 30 billion pounds by 2020. Tax credits and incentives planned.

CME BLOCK CHEESE traded at $1.49-1/4 on March 12 and climbed 14-1/4 cents before retreating back to its midmonth starting point two weeks later.

SOFTER MARKETS ARE PREVAILING at the Global Dairy Auction. Late March bids were at a 19-month low. On average, the prices for the three major products are down 35 percent compared to the same time last year.

SOYBEAN PRICES have picked up steam and are now trading at the highest point in six months. A severe Brazilian drought is hampering production, and revised estimates suggest the global harvest could be down 7 percent.

PARMESAN, PROVOLONE, AND GOUDA are among the names the newly formed Consortium for Common Food Names seeks to protect from the European Commission’s trademark effort using geographical indications.

FEDERAL FARM PAYMENTS would be capped at $250,000 per married couple in a bipartisan bill supported by seven farm-state senators. It also would close loopholes that allow nonfarmers to qualify for payments.

RULES TO IMPROVE DAIRY MARKETS were introduced by the European Union as it prepares for a life without quotas in 2015. The action improves producer collective bargaining and contracting options.

BRIEFLY: Tetra Pak announced plans to introduce smart milk cartons that change color when left unrefrigerated for too long. Japan is projected to import 22,000 metric tons or 10 percent more American cheese this year. Over 150 ag groups urge Congress to establish permanent normal trade relations with Russia. The action would grow exports.

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