Washington Dairygrams - May 10, 2012


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

CHEESE BLOCKS WERE $1.52-1/4, at the close. Class III Futures for May through December averaged $15.62, October was the high, $16.25.

CLASS III FUTURES DROPPED nearly $1.50 in the past 90 days. Last year at this time, May through December contracts were trading at $17.15.

PRICES DECLINED SHARPLY at Global Dairy Trade’s mid-April auction. The trade-weighted index fell 9.9 percent compared to the prior auction, reports The Wall Street Journal. This is the lowest since September 2009.

PROCESSING PLANTS ARE FLUSH with milk as March production grew 4.2 percent nationally. When compared to the same time last year, milk per cow rose 3.2 percent while the national herd is up 94,000 head.

PENNSYLVANIA WAS THE LONE state down (0.6 percent) in March milk among the top 23 dairy states. Utah led the pack, up 7.8 percent; followed by Michigan, 7.3; Colorado, 7.1; Arizona, 6.6; and California, 6.2.

STRONG CALIFORNIA OUTPUT has caused Land O’Lakes to offer 30 days of paid milk production if patrons permanently surrender their base. So far, 17 producers have exited the business, reports the California Farm Bureau. For more on supply constrictions, see our April 25 issue, page 288.

MARCH DAIRY COW SLAUGHTER was steady compared to February, adjusted to a daily basis. Compared to a year ago, culls are up 3.7 percent.

FEBRUARY DAIRY EXPORTS were over $400 million for the twelfth straight month. They were boosted by strong sales of powder and cheese.

THE SENATE AG COMMITTEE released draft text of the Farm Bill on April 20 with the Dairy Security Act serving as the basic dairy foundation. Meanwhile, the House held a dairy hearing on April 26.

NET CROP INSURANCE PAYMENTS exceeded direct payments by $5.5 billion in 2011. This is the first year that insurance payments topped direct payments, reports the University of Illinois at farmdocdaily.illinois.edu/.

THE SHARE OF PREMIUMS paid by farms has declined from 74 percent in the early 1990s to 38 percent for the 2010 and 2011 crop years.

CORN ACRES PLANTED stood at 28 percent on April 22 which is 15 percentage points ahead of the five-year average. Illinois, the second-ranking corn state, is 59 percent complete; fourth-ranked Indiana is 46 percent done.

BRIEFLY: BSE was detected in a California dairy-cow carcass destined for rendering. It was the fourth U.S. case since 2003 and the first since 2006. The announcement sent cattle futures down the limit . . . 3 cents a pound. Pfizer appears ready to spin off its animal health division, reports The Wall Street Journal. Others suggest a sale cannot be ruled out. China is rebuilding its dairy herd by importing 100,000 heifers from Uruguay, Australia, and New Zealand.

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