Washington Dairygrams - October 25, 2011


As printed in our October 25, 2011 issue...

CONGRESS PASSES TRADE PACTS with South Korea, Panama, and Columbia. They represent the most sweeping free trade agreements since 1994’s NAFTA. South Korea is our sixth largest dairy export market.

WORLD’S LARGEST FARM SUBSIDY PROGRAM being hotly debated within European Union. Current $75-billion-a-year plan makes up 40 percent of the EU’s budget. A revised program must be in place by 2013.

USDA DROPS CORN OUTPUT projections to 12.4 billion bushels, down 1 percent from previous month. It still would be the fourth largest U.S. corn crop. Russia plans to limit corn exports, causing price fluctuation.

A FARM BILL PROPOSAL was introduced by Ag Committee member, Dick Lugar (R-Ind.). Called REFRESH, Senate Bill 1658 uses key elements of Representative Collin Peterson’s (D-Minn.) Dairy Security Act.

CHEESE OUTPUT FALLS for second straight month when compared to previous year. August production of 868 million pounds was down 0.3 percent, while revised July cheese output showed a 2.5 percent decline.

BUTTER CHURN CLIMBS by 31 percent in August to 133 million pounds. This butter output represents the highest August levels since 1945.

SEPTEMBER CLASS III PRICE was down $2.60 per hundredweight to $19.07, $2.80 above a year ago. Class IV price was $19.53, down 61 cents.

CLASS III FUTURES for November and December average $17.47. January through May contracts trading between $16.18 and $16.40 at closing, dropping about 70 cents since late-September trading.

MINNESOTA DECLARED TUBERCULOSIS-FREE by the USDA. It comes six years after an infected beef herd was discovered in the state.

NEW ZEALAND MILK FLOW UP 13 percent compared to last year. Government temporarily raises tanker operating weight limits by one ton.

SENATOR BOB CASEY (D-Pa.) introduces Dairy Advancement Act. It calls for producer choice between MILC or Livestock Gross Margin-Dairy programs. The bill has not been scored by Congressional Budget Office.

AMERICAN FARM BUREAU recommends a multi-legged stool for upcoming Farm Bill. It asks for combination of direct payments, counter cyclical payments, a commodity loan program, and crop insurance.

BRIEFLY: Alfalfa prices remain extremely high with quotes of $350 or more per ton for hay shipped into Texas, New Mexico, and California. IDFA launches advertising campaign against federal milk marketing orders and portions of the Dairy Security Act. It can be found at www.outofmymilk.com. Deadline extended for comments on USDA’s animal identification plan. See the September 10 issue, page 566 for more details. Alpina Foods breaks ground on Batavia, N.Y., yogurt plant.

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