Washington Dairygrams - April 25, 2012


As printed in our April 25, 2012 issue...

CORN PLANTING INTENTIONS are the highest since 1937. USDA has projected farmers will plant 95.9 million acres, up 4 percent from last year. Meanwhile, soybeans could be down 1 percent to 73.9 million acres.

DRY WEATHER throughout much of the Corn Belt and strong soybean prices have propped up all grain values. Reduced corn and soybean harvest expectations in Brazil and Argentina also have buoyed prices.

A $17.50 ALL-MILK PRICE is the latest USDA estimate for 2012. The projection is down $1.20 since January due to higher milk flow and weaker dairy product demand forecasts throughout the remainder of the year.

FEBRUARY’S MILC PAYMENT was 39 cents, and it could more than double in March. Future payments could reach $1 for the following six months.

RATION COSTS SENT the March Milk-Feed Ratio down to 1.48 which is the lowest point since June 2009’s 1.47. Income over feed costs now at $5.64.

CONGRESS REMAINS IN SESSION until the November election. However, the deadline to pass a Farm Bill is the August recess, Collin Peterson, (D-Minn.), told those at the Upper Midwest Dairy Policy Conference.

IF A FARM BILL IS PASSED, it will have the Dairy Security Act, predicted Peterson. “We have 90 percent of the dairy industry in favor of this bill, and about 50 percent of the IDFA membership supports it,” said Peterson.

SUPPLY HAS OVERTAKEN DEMAND, said Dalyn Dye, president and CEO of Hoogwegt U.S., at the Dairy Policy Conference. Milk prices are down 20 percent from a year ago. The price downturn doesn’t seem over yet.

DAIRY IMPORTS among major importing countries were up 16 to 16.5 percent from July 2010 to June 2011. Since last June, imports are off 1 percent, Dye told attendees, noting China is now the world’s largest dairy importer.

NEW ZEALAND HAS STEPPED UP exports bolstered by record milk collections that are up 10 percent from last year. Also, its state-of-the-art milk powder drier processed 20,826 metric tons in March, a new milestone.

AT HOME, PRODUCT SALES, measured as commercial disappearance, were up 1.5 percent for 2011 compared to the previous year. Butter rose 10.9 percent; American cheese, 0.6; and other cheese, 4.2. Fluid milk fell 1.8.

UTILITY COW PRICES will remain strong for the foreseeable future. USDA projected values will average above $75 per cwt. in early 2012.

LEAN BEEF VALUES could rise higher following the “pink slime” hype surrounding lean finely textured beef products. Its removal from the marketplace would require an additional 1.5 million head of cattle each year.

BRIEFLY: Three new cheese plants are being built in Wisconsin. There are now 135 plants compared to 120 a decade ago. A lawsuit challenging the ban on interstate raw milk sales was dismissed by a federal district judge. The REAL Seal is now being managed by NMPF.

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