Washington Dairygrams - October 10, 2012


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

THE LEADERSHIP IN HOUSE OF REPRESENTATIVES did not bring the farm bill up for a vote in September and left for a six-week election recess.

WITH NO ACTION, THE MILC PROGRAM expired at the end of September. The farm bill, along with tax and budget issues, will be among the many items on the legislative plate in the post-election, lame duck session.

CME BLOCK CHEESE HIT $2 PER POUND for the first time in 10 months, while spot butter climbed to $1.93. Class III future prices for November through April averaged $19.81 at the magazine’s close.

AN $18.35 ALL-MILK PRICE was the most recent estimate for 2013. The midpoint is up 60 cents from May projection. For the remainder of 2012, USDA revised its estimate upward by 25 cents from last month’s $17.90.

AUGUST MILK PRODUCTION FELL 0.3 PERCENT compared to the same time last year. It was the first contraction since January 2010. High feed costs and extreme summer heat combined to reduce milk flow per cow.

OUTPUT WAS DOWN IN SIX OF THE TOP 10 STATES. California dropped (-5.8 percent); Washington (-3.3); New Mexico (-2.9); Texas (-1.9); Pennsylvania (-1.7) and Idaho (-0.2). Wisconsin rose 4.9 percent.

COW NUMBERS CONTRACTED for the fourth consecutive month and stood at 9.22 million head in August. The 275,000 culls were the highest since January 2009. Total slaughter is up 6.2 percent over last year.

CANADA’S HEIFER COUNT (1 year plus) was 478,000, up 1 percent from 2011. Was 50.1 per 100 cows, nearly identical to five years earlier. U.S. has 44.6 heifers (500 pounds plus) per 100 cows. Ratio five years ago: 42.6.

NEARLY 40 PERCENT OF THE CORN CROP had been harvested compared to a 13 percent five-year average. Crop conditions are still abysmal with half of the crop rated poor to very poor, the lowest two rankings.

CORN PRICES SKYROCKETED 32 PERCENT in the past three months while soybeans surged 16 percent. Both markets settled somewhat as Brazil and Argentina will begin planting shortly.

KRAFT FOODS WAS REPLACED by UnitedHealth Group as one of the 30 components in the Dow Jones Industrial Average. Kraft plans to spin off its North American grocery business into Mondelez International.

THERE WERE 151 DAIRY CO-OPS at the end of 2010, reported USDA. The number of cooperatives shrunk by a net of 60 during the past decade; 83 either merged or left the business while 23 new ones took root.

BRIEFLY: Global product prices rose over 3 cents to $1.74 per pound at the Global Dairy Trade. American veterinarians have been reluctant to travel to Mexico’s new cattle export inspection station. The area two miles from the Texas border has experienced drug cartel-related violence.

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