Washington Dairygrams - December 2012


As printed in our December 2012 issue...

APPROVAL OF THE FARM BILL before year’s end appears to hinge on its inclusion in a larger overall budget package needed to avert the fiscal cliff.

TO PREPARE FOR THAT POTENTIALITY, the four key leaders of the House and Senate Agriculture committees met in early December to write a compromise bill with a goal of including it in an overall budget package.

DAIRY AND ALL AG PRODUCTS must be included in the Trans-Pacific Partnership trade pact, stated New Zealand’s Prime Minister John Key after the East Asia economic summit also attended by President Obama.

RUSSIA WAS AT THE CENTER of a recently passed House and Senate bill that would establish permanent normal trade relations with one of the world’s largest ag importers. The President plans to sign the measure.

FDA’S ENHANCED ANTIBIOTIC TESTING PROJECT on milk samples is drawing to a close. Sample collection was completed in late November with initial analysis expected to conclude by year’s end.

ONLY 2,591 DAIRY FARMS, or 5 percent of the nation’s 51,000 operations, failed to meet the European Union’s health certificate specs which include maintaining SCCs under 400,000 on a three-month rolling average.

THE REMAINING $9 MILLION of unused funds for USDA’s Livestock Gross Margin Dairy Insurance (LGM-D) will be made available on December 28.

DAIRY PRODUCT PRICES RETREATED since early November as spot cheese blocks dropped 35 cents and spot butter fell 31 cents. Ingredient prices also declined 2 percent at the recent Global Dairy Trade auction.

DECEMBER CLASS III FUTURES were $18.50 at closing. January to September traded between $17.99 and $18.60, down 43 cents in the last 30 days.

FOR THE SECOND STRAIGHT MONTH, U.S. milk production declined. October marked the first time since 2009 that output had fallen for consecutive months. California dropped 3.5 percent, while Wisconsin rose 4.7.

GLOBAL MILK FLOW IS MIXED: the EU was down 1.1 percent in the third quarter, and Argentina was off 2.2 percent. Meanwhile, New Zealand’s new season was off to a robust start, up 8.4 percent, Australia grew 2.1.

AN ADDITIONAL 24,000 COWS were culled in October compared to the same time last year. Overall removals are up 175,000 head this year.

BRIEFLY: Cheese exports have declined every month since reaching record levels in May. The Idaho Dairymen’s Association reversed its stance on federal and state milk marketing orders. It now supports both. Saputo to buy Dean Foods’ Morningstar Division for $1.45 billion. Agropur to invest over $100 million in its Luxemburg, Wis., cheese and whey plant. Coca-Cola and Select Milk Producers Co-op acquire equal stakes in Core Power with plans to compete against PepsiCo’s Muscle Milk.

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