Washington Dairygrams - March 25, 2011

Washington Dairygrams - March 25, 2011

BENCHMARK CLASS III PRICE SOARED to $17 for February, up $3.52 from January. The February Class IV price is $18.40, up $1.98 from January. April through December Class III futures were $16.82 per hundredweight.

CHEDDAR BLOCKS AT THE CME were trading near $2 per pound at closing which is the highest price since July 2008. Barrels at $1.96; butter, $2.12.

DOMESTIC PRICES of butter, skim milk powder, whole milk powder, and dry whey all equal to or higher than world prices. Cheddar is a few cents below. Prices advanced 5.9 percent during latest Global Dairy Product Trade auction.

DAIRY PRODUCT USE ROSE 2.5 percent during 2010 as measured by commercial disappearance. NFDM was up 14.9 percent; Italian cheese, up 4.1 percent; butter, up 3.9; and American cheese, up 1.7. Fluid milk was down 1.4 percent.

FEBRUARY MILK-FEED RATIO was 1.96 compared to 2.36 a year ago. Values used: $18.40 milk, $5.66 corn, $12.10 beans, and $127 alfalfa. Feed cost was $9.39 ($6.74 a year ago) for $9.01 income over feed cost, about same as 2010.

MORE MILK MEANS MORE PRODUCT. Total cheese production in January was 5 percent over a year ago. Italian cheese was up 5.3 percent, and American was up 4.4. Butter output in January was up 2.7 percent compared to 2010.

U.S. AND MEXICO ON PATH to resolve trade dispute involving trucking. U.S. cracked down on Mexico’s trucks entering U.S., and Mexico tacked tariff on imports. Mexico is the United States’ largest dairy product importer.

FEDERAL ORDER REFORM PROPOSAL passed by National Milk Producers’ directors. Only two classes of milk: fluid (Class I) and manufacturing (Class II, III, and IV); replaces end-product pricing formulas with competitive milk pricing system; maintains higher of pricing and differentials for fluid milk.

USDA PROJECTS we will plant 92 million acres of corn this year and 78 million of soybeans. 2010 acreages were 88.2 million (corn) and 77.4 million (beans).

BRIEFLY: First BSE cow in Canada in over a year. Was 77-month-old dairy cow in Alberta. Dairy cow slaughter in January was 264,000 head, 12 percent more than a year ago. Let ethanol credits expire was the message 90 trade associations sent to Congressional leadership. Other dairy-based groups ask that federal funds not be used on improving infrastructure for handling ethanol. Fonterra investigates opening its online dairy sales to international competition. Attorneys representing Northeast dairy farmers ask court to unseal documents in class action antitrust lawsuit.

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