Washington Dairygrams - February 25, 2011

Washington Dairygrams - February 25, 2011

FUTURES PRICES MOVED much higher with March, April, and May over $18 at press time. March through December Class III futures averaged $17.26.

BLOCK CHEESE PRICE climbed to above $1.80 on steady domestic orders and growing export interest. Cash butter had been at $2.10 for several weeks. International prices strong, with flooding taking a toll on milk in Australia.

DECEMBER CHEESE OUTPUT UP 4.7 percent, topping 900 million pounds for the first time, said Cheese Reporter. For all of 2010, U.S. cheese production was up 3.3 percent from 2009. Butter make in 2010 was down 0.7 percent.

BENCHMARK CLASS III PRICE for January was $13.48, down 35 cents from December and $1.02 below a year ago. Class IV price jumped $1.39 to $16.42.

FEDERAL AG BUDGET concerns build amid talks of freezes or cutbacks. House Republicans tout $3.2 billion (14 percent) ag programs cut to $20.1 billion.

HEIFER INVENTORY on January 1 was 4.56 million head (500 pounds or larger). There were 49.8 heifers per 100 cows, about the same ratio as one year ago.

MILK-FEED PRICE RATIO drops to 1.79 in January giving a income-over-feed cost of $7.12. That was down $1.12 from an IOFC of $8.27 in December. January feed prices used were corn, $5.37; beans, $12.60; and alfalfa, $121.

THREE SERVINGS OF DAIRY still part of Dietary Guidelines for Americans, but low-fat and fat-free products stressed. Sodium limit may affect dairy.

BRIEFLY: MILC payment of 50 to 60 cents per hundredweight possible for February based on futures prices. None after that for foreseeable future. 7.2 percent rise in dairy product prices at Global Dairy Trade auction. South Korea destroyed more than 3 million head of livestock due to foot-and-mouth disease. Dairy cow slaughter in December totaled 265,000 head, most for the month since 1997. Dairy breeding cattle imports from Canada totaled 7,420 during 2010. U.S. All-Milk Price averaged $16.29 during 2010. That was $3.46 per hundredweight above 2009 but $2.04 below 2008. Restaurant association expects 3.6 percent growth during 2011 with positive implications for dairy product consumption. Possible rationing of corn between livestock feeders, ethanol production, and export proposed by Iowa Pork Producers. Corn nonland costs (fertilizer, seed, pesticide, drying, fuel, storage) put at $492 per acre in University of Illinois study.

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