December 2010 Archived Dairy News

The dairy checkoff website has been updated. Dairy Management Incorporated’s Joe Bavido reported in Monday’s broadcast that www.dairycheckoff.com has enhanced photos and graphics and more user friendly features to help deliver the latest news on how the dairy farmer’s investment is working to grow sales of U.S. dairy products.

The updating came after input from farmers at World Dairy Expo in Madison in October, according to Bavido, and it now contains more easy to follow links to dairy farmer image programs such as “Telling Your Story” that helps them become active industry spokespersons in their community.

Current news is posted about checkoff led initiatives such as “Fuel Up to Play 60,” that aims to help improve health and wellness in students in schools and is a cooperative program with the National Football League and USDA. Other partnerships are also highlighted, such as those with McDonalds and Dominos.

The website includes contact information for local checkoff offices plus a list of industry meetings being held across the country, including those that feature checkoff staff.

The cash butter market ended the year at $1.67, up 1 3/4-cents on the week, and 34 1/4-cents above a year ago. Four cars were sold on the week. The NASS butter price averaged $1.6425, down 0.6 cent. NASS nonfat dry milk averaged $1.1417, down 7 1/2-cents, and dry whey averaged 38.22 cents, up 0.4 cent.

New Year Resolutions on Improving Cow Health and Profitability
(December 31, 2010) Our Friday broadcast is devoted to New Year’s resolutions to improve cow health and profitability. We pointed out that tightened European Union milk quality requirements will necessitate change on U.S. dairy farms if they want to be players in the world market.

Pfizer Animal Health’s Dr. Bradley Mills said “There’s always room for improvement when it comes to milk quality,” and he outlined what he called “small steps to reap large rewards tomorrow through increased production, higher premiums, and reduced labor and treatment costs.”

Improving mastitis management is part of doing what is best for the health of your cattle and your dairy operation, according to Mills, but like any New Year’s resolution, they must become a way of life for everyone on the dairy.

A better approach to treatment involves selecting the correct treatment and the correct treatment protocol, Mills said, and that means “striving for a complete cure.” He called on dairy farmers to work with their veterinarian to “choose the best treatment protocol. “

“Often, when we use extended antibiotic therapy we can achieve a true or bacteriological cure,” Mills said, and by that it means the bacteria are no longer present in the udder. “We must be sure to determine that the treatment protocol is carried out to improve the chance of a complete cure.”

When asked if there was one thing he would advise dairy producers to do in 2011, he replied, “Work more closely with your veterinarian on milk quality.” He said the local vet is “their greatest resource in developing, implementing, and monitoring a mastitis management program,” and can advise them on treatment decisions, parlor routines, milk culture records, and management practices.” For more information, long on to www.milkqualityfocus.com. Read the press release here

Today's DairyLine broadcast includes the final "Nutrition Update" with Dr. Paul Chalnder of Dresden, Tennessee. DairyLine would like to take this opportunity to publically thank Dr. Chandler for his many years of service to DairyLine listeners.

We are also pleased to announce that, starting next week, we welcome Dr. Mike Hutjens, of the University of Illinois, to DairyLine. Our nutrition format will change somewhat as Mike and Lee discuss a business approach to feeding dairy cows on a program we’re calling “Feed Facts.” Read the press release here

Corn averaged $4.94 per bushel, up 39 cents from November, and $1.34 above a year ago. The soybean price, at $11.70 per bushel, was up 60 cents from November, and $1.90 above a year ago. Alfalfa baled hay was $121.00 per ton, up $4.00 from November, and $12.00 above a year ago.

(December 30, 2010) It’s not the best way to end one year and start a new one but farm gate milk prices continue to slide. The Agriculture Department announced the December Federal order Class III benchmark milk price Thursday at $13.83 per hundredweight, down $1.61 from November, and $1.15 below December 2009. That pulled the 2010 average down to $14.41, up from $11.36 in 2009, but compares to $17.44 in 2008.

Looking ahead, the Class III futures were trading late Thursday morning as follows: January $13.28, February $13.84, March $14.15, and April was at $14.57, with the peak at $15.73 in October.

The December Class IV price is $15.03, down $1.65 from November, but 2 cents above December 2009.

The four-week NASS surveyed cheese price averaged $1.4606 per pound, down 15.5 cents from November. Butter averaged $1.6539, down 36.9 cents. Nonfat dry milk averaged $1.1848, down a penny, and dry whey averaged 37.89 cents, up fractionally. California’s December 4a and 4b prices will be announced Monday, January 3.

(December 30, 2010) The waning hours of 2010 brought a look back on the year in Thursday’s DairyLine as National Milk’s Chris Galen reflected that it was a much better year economically for most dairy producers than 2009. Milk prices were better and feed costs had moderated but he quickly added that the cost of feed has reversed that in the last month or two and he sees that as a challenge in 2011.

2010 was a very productive year policy wise, according to Galen, considering the action taken on food safety, nutrition policy, trade, animal care standards, and the environment. There were a number of changes mostly for the better as far as dairy is concerned, he said.

The biggest development from National Milk’s perspective, he said, was the development of its “Foundation for the Future” dairy policy proposal. The Federation is now poised to work with Congress to get its policies implemented, Galen said, and that would be big news next year at this time if we end up with a major revamping of dairy policy.

Another development in 2010 was restructuring the Cooperatives Working Together program. The primary focus the past seven years has been retiring dairy cows and sending them to slaughter. Assuming there is enough farmer participation, the emphasis in 2011will be on its export assistance, he concluded.

And as we await the arrival of 2011, tomorrow's DairyLine broadcast will be devoted to some New Year’s resolutions to improve cow health and profitability from Pfizer Animal Health’s Dr. Bradley Mills, and Dr. Paul Chandler has his final "Nutrition Update" in our second half.

Cotton acreage has declined the past two years because there’s been an over- supply of cotton in the world market, according to Wedegaertner, resulting in declining prices to farmers and a smaller supply of cottonseed to feed dairy cows. Last year there was only about 2 million tons of cottonseed, he said, but this year, with increased acreage and good yields we should see an extra million tons or so to feed to dairy cattle and he expects an extra 2 million acres planted to cotton in 2011 to take advantage of the high prices “so cottonseed will become more and more readily available.”

Wedegaertner acknowledged that dairy farmers are caught in the middle of falling milk prices and rising feed costs. Corn is climbing, as are soybeans, he said, and “the soybean complex controls a lot of the feed market and if it comes down a little then cottonseed will also as they track together.

Hopefully, as cotton acreage increases, cottonseed will be more competitive and remain an important part of the dairy ration, he concluded. For more information, log on to www.wholecottonneed.com and if you log on to www.wholecottonseed.com/contest, you’ll learn how you can win a pocket video camera simply by voting between the two finalists in Cotton Incorporated’s cottonseed video contest. The voting ends January 31, 2011.

(December 28, 2010) Cash cheese moved a little lower the last Monday of 2010. The blocks slipped a quarter-cent, to $1.32, and the barrels were down a penny, to $1.3450. Market analyst Alan Levitt said in Tuesday’s DairyLine that the pattern for most of 2010 was that, when cheese trading neared $1.40, buyers returned, but when prices got near $1.40 in December, “people had pretty much bought what they needed for the holiday season, weren’t interested in accumulating inventory going into the end of the year, and wanted to see how sales went over the holidays.” He expects buyers to return after the First, but “right now we’re in a little bit of a lull.”

When asked about the lack of reaction in the market to the November Milk Production and Cold Storage report, Levitt pointed out that cheese inventories are still well above historic levels. They dropped some in November, he said, but didn’t drop much in the fall and are still overhanging the market.

Butter stocks are at a historically low level, according to Levitt, probably only at two and a half week’s worth of use and the smallest figure in five years so that will be a factor in 2011. He added that we don’t see the immediate impacts from those reports like we used to but, going into next year, butter is going to be short again.

Weather is another topic of discussion, with rains in California and snowstorms in the Northeast. California has been getting dumped on, he said, and Tulare County received almost four inches of rain this month, more than triple the normal level, and a lot of fields are under water but farmers have got better prepared in recent years in terms of cow comfort and have done whatever they can. A lot of those farms are under cover, he said, and, while we may expect to see some impact on milk production, it probably won’t be as much as we might have seen 10 years ago.

As to the Northeast, it’s too early to tell because we’re over the holiday period and we haven’t received all of the reports yet but certainly it affects people’s ability to get out and buy milk from the stores and it will affect farm pickups.

(December 27, 2010) Lactose intolerance has been a cause for the loss of milk and dairy product consumption and the dairy checkoff has taken steps to deal with it. Dairy Management Incorporated’s Joe Bavido talked about a new website that the dairy check off produced to “connect with lactose intolerant consumers.” The website is www.moovision.com and also has a Facebook page, Twitter account, and YouTube channel.

The goal, according to Bavido, is to change the attitude and purchase behavior of millions of adults who experience real or perceived symptoms of lactose intolerance and thus avoid or restrict dairy consumption.

“Bringing them back to dairy could result in 2.3 billion pounds of new sales annually,” Bavido said, and the goal is to use these social media in a light- hearted and novel way to converse with lactose intolerant consumers with the core objective of “changing their perception of lactose free milk, identify opportunities to increase lactose free milk consumption, and address misconceptions about lactose free milk related to its nutritional value and taste.”

(December 24, 2010) USDA’s Dairy Industry Advisory Committee met last week, voting on more than 20 proposals for potential consideration as national dairy policy. Dairy Profit Weekly editor Dave Natzke reported Friday that most of the proposals garnered majority approval, including calls for stricter milk quality standards; federal milk marketing order reforms; improved dairy farmer risk management tools; and modifications to the Milk Income Loss Contract program.

Two somewhat controversial proposals narrowly passed, according to Natzke, including a “growth management” program to control milk supplies and a call for all states to adopt California’s higher “total solids” standards for fluid milk. The committee will meet again, January 11 and 12 to finalize recommendations for possible inclusion in the 2012 Farm Bill.

And, in a press teleconference this week, members of the National Family Farmers Coalition (NFFC) said those policy recommendations and lame duck Congress did little to address the dire economic conditions facing dairy farmers.

Gary Genske, prominent dairy accountant, said the recommendations fail to address price discovery and import issues, and fall short of helping dairy farmers deal with low income and market volatility.

Wisconsin dairy farmer Paul Rozwadowski said the lame duck Congress left dairy farmers with lumps of coal, especially when it comes to ethanol policy that will drive feed costs higher, at a time milk prices are declining. California dairy farmer Loren Lopes, said the latest measure of California dairy producer financial health is not profitability, but rather "equity burn.”

(December 23, 2010) The January 2011 Federal order Class I base milk price was announced this morning by the Agriculture Department at $15.20 per hundredweight, down $1.76 from December but 17 cents above January 2010. The Class IV advanced pricing factor remained the “higher of” in driving the Class I value.

The NASS-surveyed butter price averaged $1.6328 per pound, down 46.7 cents from December. Nonfat dry milk averaged $1.2148, up 2.5 cents. Cheese averaged $1.4841, down 22.2 cents, and dry whey averaged 37.83 cents, up 0.7 cent.

Lame Duck Session of Congress Has Been Productive
(December 23, 2010) The lame duck session of Congress has been “pretty productive,” according to National Milk’s Chris Galen. He reported Thursday that many are surprised by how much legislation was passed and cited the estate tax specifically which was part of the bigger tax package negotiated between Republicans and President Obama. It prevented the rate from jumping to higher levels that “would have been painful for dairy farmers and others,” Galen said.

The bill exempts $5 million of a person’s estate from tax and anything above that the tax rate is 35 percent. Had this bill not become law, the rate would have reverted to a $1 million exemption and a maximum tax rate of 55 percent.

The Food Safety bill was also passed, twice, due to a procedural issue, and while Galen said that National Milk has concern that “it exempts some farms that could potentially become a food safety threat,” the Federation hopes that “it will make positive developments overall in food safety.”

Congress also passed and the President signed the Child Nutrition Act reauthorization which maintains a prominent role for dairy products in the nation’s school lunch programs. National Milk supported that, Galen concluded.

(December 22, 2010) November butter stocks totaled 70 million pounds, down 38.8 million pounds or 36 percent from October and 72.7 million pounds or 51 percent below November 2009, according to preliminary data in the Agriculture Department’s latest Cold Storage report issued this afternoon.

The November American cheese inventory, at 625.6 million pounds, was down 13.3 million pounds, or 2 percent from October, but 45.5 million pounds or 7 percent above a year ago.

Total cheese stocks amounted to over 1.062 billion pounds, was down 29.4 million pounds or 3 percent from October, but 44.5 million pounds or 5 percent above a year ago.

Seasonal Promotions Part of Beef Checkoff
(December 22, 2010) Advertising and promotional partnerships are an important part of the dairy check off program and have achieved some impressive results. Similar efforts are a part of the beef check off as well, according to Christie Molinaro, director of retail and foodservice for the Northeast Beef Promotion Initiative in Pennsylvania.

Speaking in Wednesday’s Beef Board Update, Molinaro said they have several seasonal promotions with small independently owned retailers. They start with a New Year’s event which this year is entitled “Lean Beef For A Lean You” and will have a health and fitness focus and features lean beef recipes and the “I Love Beef” nutritional message points.

The summer grilling season is next, according to Molinaro, and is entitled “Stay Home, Grill out.” It plays up grilling beef for summer parties and that’s followed by their fall tailgating promotion which focuses on the value cuts, the flat iron and the ranch steak and the newer chuck roast cuts. A holiday roast promotion winds up the year for the Thanksgiving and Christmas holidays, she said.

When asked if they experience resistance from consumers over perceived health issues and beef, Molinaro said that depends on the consumer but in general most people are totally okay with eating beef. There’s not many health concerns but there is a select percentage of shoppers who are really focused on keeping a low fat diet so they’re glad when they find out that there are 29 cuts of beef that are considered lean, according to the USDA.

(December 21, 2010) We’re into the final two weeks of trading in 2010 and barrel cheese is trading a nickel and a half above the block price as of Monday, December 20 and difficult to explain, according to market analyst Mary Ledman, Principal of Keough Ledman, and Associates in Libertyville, Illinois. Speaking in Tuesday’s DairyLine, Ledman said she’s hearing that plenty of barrel cheese is being offered in the countryside off the market so “it is kind of a head scratcher.”

The good news, she said, is that it will enhance the Class III milk price, but it is a concern. She added that, at this time of year, sales are slow as holiday orders have been placed and “we’re in that lull period before the Super Bowl buying takes place.”

Switching to the butter side of the equation, Ledman believes prices will remain strong, though a downturn may occur in First Quarter 2011, but not necessarily. “Typically you have lower butter prices in the first quarter of the year,” Ledman said,” However the global markets are very strong, both Oceania and European.” Russian butter is running about $4,000 a metric ton, or about $2.00 per pound, so even if you figure 25 cents per pound to ship to Russia or the Middle East, you’re looking at butter close to $1.75, and the U.S. price is a dime below that.

World prices on cheese and butter are well above U.S. levels but Ledman explains that the U.S. doesn’t necessarily make the specific product that trades in the global market. U.S. butter runs 80 percent fat with salt, versus 82 percent fat, without salt, she explained, and the moisture level in U.S. Cheddar cheese runs around 39 percent, while world market levels are closer to 35 percent. “Can we produce for the global market?” she asked. “Absolutely, we can,” she concluded.

(December 20, 2010) An expected rise in domestic use, along with good export prospects and only a moderate rise in milk production are expected to keep milk prices in 2011 very near 2010 levels, according to the Agriculture Department’s Livestock, Dairy and Poultry Outlook issued this morning. However, the report warns that higher feed prices will likely squeeze producer profits in the upcoming year.

Feed prices are expected to be much higher for dairy producers next year. The USDA forecast corn price is expected to be $4.80-$5.60 a bushel for the 2010/11 crop year. Soybean meal prices, while projected to be higher, will not rise as much as corn. They are expected to be $310-$350 per ton in 2010/11, up from a $311 per ton average in 2009/10.

The increase in feed ingredient prices will boost the benchmark 16-percent protein mixed dairy ration price nearly 20 percent above 2010. Higher feed costs are already pressuring producers but will not likely affect cow numbers until the second half of 2011. Cow numbers will continue to increase through the first half of 2011 and are expected to decline slightly in the second half of the year. These changes are expected to leave the herd size next year slightly above the 9,110 thousand head in 2010 at a projected 9,125 thousand head.

Milk per cow is forecast to continue to rise next year, but at less than half the pace forecast for 2010. The current year’s increase in milk per cow was aided by good weather in addition to moderate feed prices. Overall, milk production will be slightly higher next year at 195.5 billion pounds, up 1.4 percent from the 2010 estimated total of 192.8 billion pounds.

Milk equivalent imports on both a fats and skim-solids basis are forecast to be lower in 2010. The fact that international prices are still above U.S. domestic prices for the major dairy products, and that the domestic economic recovery is gradual will limit import totals to 4.1 billion pounds next year, down from 4.3 billion this year on a fats basis and down to 4.9 billion pounds from 5.1 billion this year on a skimsolids basis. Milk equivalent exports rebounded sharply this year from 2009.

However, next year exports on a fats basis are expected to weaken to 6.3 billion pounds from the 8.3 billion pound total expected this year. Uncertainty over the Mexican tariff on U.S. cheese exports is contributing to the decline. On a skim solids basis, exports are forecast to decline slightly to 30 billion pounds from a projected 31.3 billion pound total expected this year.

Oceania milk production is forecast to increase in 2011, raising competition in export markets. Domestic commercial use on a fats basis is expected to rise by nearly 2 percent in 2011; this would be the sharpest year-over-year rise in at least 4 years. Domestic commercial use on a skim-solids basis is forecast to climb by nearly 3 percent in 2011. The rise would follow a better than 2-percent year-over-year decline expected in 2010.

Strong domestic use, a good export outlook, and only a moderate increase in milk production provide the basis for continued strong price performance estimates for dairy products into 2011.

While butter prices have retreated from earlier peaks, the 2010 average price is expected to be $1.685-$1.715 per pound this year. Prices in 2011, while not as high as this year’s, will still be above those of recent years averaging $1.485-$1.595 per pound.

Despite uncertainty in the cheese export market, domestic demand should be sufficient to boost cheese prices next year. Cheese prices in 2010 are expected to average $1.515-$1.525 per pound, rising to $1.535-$1.615 per pound in 2011.

Nonfat dry milk (NDM) prices are also projected higher next year. NDM prices are expected to average $1.160-$1.180 per pound this year and climb to $1.200-$1.260 per pound in 2011.

Whey prices are likely to average 36.5-37.5 cents per pound in 2010 and 36.5-39.5 cents per pound next year.

Results Are Encouraging From Carbon Footprint Study
(December 20, 2010) Results are encouraging from the recent carbon footprint study on dairy, according to California dairy producer Kimberly Clauss, who also serves on the California Sustainability Council.

Speaking in Monday’s “DMI Update,” Clauss said the U.S. dairy industry’s carbon footprint amounts to only 2 percent and “this study shows that dairy is in a much better place than originally thought.”

More and more consumers and retailers take this issue seriously and the dairy industry now has a credible basis to state that it is not adding to global warming. Clauss said consumers and retailers want to know what’s happening on farms and what’s happening in the area around them, where they live.

The dairy checkoff is taking this information to dairy producers and processors right now but in Second Quarter 2011, the peer review will be released on this study and that’s when the information will be taken to the consuming public.

California production was up 4.5 percent from a year ago, with 15,000 fewer cows. However, output per cow gained 95 pounds. Wisconsin was up 0.5 percent, thanks to 7,000 more cows. New York was up 4.6 percent, with output per cow up 75 pounds. Idaho was up 7.2 percent, on 24,000 more cows and a 50 pound increase per cow. Pennsylvania was up 3.2 percent. Cow numbers were up 3,000 and output per cow was up 40 pounds. Minnesota was down 1.5 percent, despite 1,000 more cows., however there was a 25 pound loss per cow.

The biggest increase was in Arizona, up 8.7 percent. Oregon was next, up 8.4 percent, and Colorado was third highest in milk production, at 7.4 percent.

The biggest decline was in Missouri, down 8.1 percent, due to 9,000 fewer cows, but output per cow was up 10 pounds from a year ago. Iowa was next, down 3.3 percent with 11,000 fewer cows, but output per cow was up 30 pounds. Minnesota had the third lowest at 1.5 percent.

(December 17, 2010) The cash dairy market was mixed the week of December 13 as it awaited the November Milk Production report Friday afternoon which we will detail next week. Block cheese lost ground, closing Friday at $1.3225 per pound, down 6 3/4-cents on the week, and 38 cents below a year ago. Wednesday saw 45 cars trade hands, the second highest single day total ever, according to Alan Levitt, editor of the CME’s Daily Dairy Report. Levitt says 52 cars were sold on June 4, 2004.

The barrels went the other direction, closing Friday at $1.3650, up 1 3/4-cents on the week, but still 7 1/2-cents below a year ago. Seventy three cars of block traded hands on the week and 10 of barrel. The NASS U.S. average block price fell to $1.4749, down 2.1 cents. The barrels averaged $1.4592, down 0.1 cent.

Butter also moved higher on the week, closing Friday at $1.6525, up 3 1/4-cents from the previous week, and 32 3/4-cents above a year ago when it plunged 121/2 cents, to $1.3250. NASS butter averaged $1.6135, down 7.6 cents.

Cash Grade A nonfat dry milk gained 3 1/2 cents on the week, closing Friday at $1.27, while the Extra Grade held all week at $1.2250. NASS powder averaged $1.2133, up 0.7 cent, and dry whey averaged 37.86 cents, up 0.1 cent.

Dairy Exports the Sunshine in Otherwise Cloudy Day
(December 17, 2010) Dairy exports continue to be the sunshine in what is otherwise a cloudy dairy picture. Dairy Profit Weekly editor Dave Natzke reported the latest trade data as 2010 comes to a close and offered a look ahead to 2011in Friday’s broadcast.

USDA’s latest trade report estimated October exports at $350 million, down 1 percent from September, but 54 percent more than a year ago, Natzke reported. That compares with dairy product imports, estimated at $222 million, which were up 10 percent from September, but just 4 percent more than a year ago.

Through the first 10 months of 2010, dairy exports totaled about $3.1 billion, up 69 percent from the same period in 2009. Meanwhile, imports stand at $2.1 billion, up just 2 percent. The result is a 2010 dairy trade surplus of more than $1 billion, a trade balance claim not many other U.S. industries can make.

The U.S. Dairy Export Council and National Milk add that October exports were equivalent to nearly 15 percent of all milk solids production during the month, the highest monthly level in history. Imports as a percent of milk solids production totaled 3.7 percent in October. Year-to-date, nearly 13 percent of U.S. milk solids production has been exported, according to Natzke.

Looking ahead, USDA’s latest quarterly trade outlook estimates fiscal year 2011 dairy product exports will reach about $3.2 billion, with imports estimated at about $2.5 billion, for another $700 million dairy trade surplus.

It's not only U.S. dairy products that are in demand. Exports of female replacement dairy cattle totaled more than 4,100 in October, the highest monthly total on record. That brought the January-to-October female dairy cattle export total to 29,900, compared to about 16,200 for all of 2009.

(December 16, 2010) As reported last week, CWT has kicked off a membership campaign. Speaking in Thursday’s DairyLine, CEO Jim Tillison, said 2011 looks like it’s going to be another challenging year for dairy producers and “the one tool that’s available right now for them is the CWT program.”

CWT will focus on export assistance in 2011, according to Tillison, who reported that an analysis by Federation dairy economist Dr. Peter Vitaliano indicates that, had the CWT export assistance been used in 2009 it likely would have resulted in a quicker turnaround in milk prices and a faster recovery in producer margins.

Furthermore, an analysis by FAPRI’s Dr. Scott Brown, indicates that for every dollar CWT spent on export assistance since it began in 2003, the return to producers was $15.53.

But, perhaps the most convincing argument is the market. Tillison pointed out that the U.S. dairy market is mature and growing with the U.S. population at about 1 percent per year. Contrast that to the world market which, he said, is growing at eight times that rate.

“The potential for dairy farmers in the united States in the future is not just in the domestic market,” Tillison argued, “But more importantly in the overseas market and to be able to compete in that market, a program like CWT needs to be in place to help people export products.”

The herd retirement aspect of CWT has been suspended and the current funding level by producers does not make such a program feasible, according to Tillison. He added the program taught them that, as the milk price went down, CWT removed cows, the milk price went up, producers added cows, “So instead of taking producers out of business, we want to build the market opportunities for them, using the CWT Export Assistance program.”

Dairy producers can become members by simply logging on to www.cwt.coop or call 888-info-cwt. The program will activate when membership includes 75 percent of the nation’s milk supply, Tillison concluded.

(December 15, 2010) The hemorrhaging continues in the cash cheese market where the blocks dropped to $1.3350 on Tuesday and yet the CME’s Daily Dairy Report says U.S. cheese exports are topping imports this year for the first time in USDA records dating back to 1970.

Downes-O’Neill dairy broker Dave Kurzawski is bullish on cheese and admitted in Wednesday’s broadcast that cheese is under a lot of pressure but the Oceania Cheddar price is at $1.90 and that “gapping hole” plus the weak dollar is attracting U.S. cheese and it may be cheaper to produce some of the cheese that is normally imported here in this country.

The market will work it out in 2011, according to Kurzawski, and ultimately the U.S. price of cheese will be headed back up but the calendar will probably roll into the New Year before that happens.

Reports and concerns over drought in part of New Zealand is also a factor but that’s probably not been priced in yet, according to Kurzawski, and the possible passage of a free agreement with South Korea is another factor.

Kurzawski said the cheese coming to the Exchange in Chicago right now is more inventory management as the end of 2010 approaches. He believes the cheese price is within pennies of the bottom and that buyers will respond at this level.

(December 14, 2010) Cash block cheese took a 3-cent hit in the first day of trading this week, falling to $1.36 per pound, while the barrels inched up a quarter-cent. Market analyst Alan Levitt reported in Tuesday’s DairyLine that cheese prices are at the lowest level since mid June, holiday pipelines appear close to being filled, First Quarter 2011 milk futures are hitting new lows, cheese production is still heavy, and inventories continue to weigh on the market

It’s sounding dire, he admits, but there is reason to be encouraged. Prices of the other commodities seem to be well supported, according to Levitt, and the world market remains firm as international prices are mostly steady with the exception of a small softening on butterfat.

Oceania milk production is past its peak, Levitt reported, and weather issues are keeping milk output from reaching the levels hoped for so buyers are a little nervous about getting what they need in 2011so they’re buying a little more aggressively and that’s showing up in other commodities.

Butterfat remains tight globally and the spot butter market keeps getting bid higher as it moved up a penny on Monday, to $1.63, and cash Grade A nonfat dry milk jumped 3 1/2-cents, to $1.27, on two sales.

The global powder market seems pretty firm, Levitt concluded, both nonfat dry milk and whey seem to be well supported, supplies are not excessive even though powder production is increasing seasonally, “there’s just this sort of sense that the bottom is at hand or close and that, in 2011, things may be a bit tighter.”

December 13, 2010) U.S. victories at the World Cheese Awards are transforming the way the world views the U.S. dairy industry. Amy Foor, of the U.S. Dairy Export Council, talked about this year’s exciting results in Monday’s “DMI Update.”

“Once again, U.S. manufacturers made a splash at the World Cheese Awards,” Foor said. Judging took place in Birmingham, England and 29 U.S. cheese artisans came home with 79 medals, including two in the new “Super Gold Medal” category and 12 other Golds, Foor reported.

The annual judging is among the largest of its kind, attracting top cheese judges and authorities from around the world. A total of 2,629 cheeses competed this year, coming from more than 29 countries.

American participation and impact has grown steadily in the last 10 years, Foor said, and there were more U.S. cheeses entered this year than ever before. Contest organizers said that U.S. entires in this global competition has “completely transformed the way people view the U.S. cheese industry.”

“Every time we have this kind of success in international competitions it helps to dispel the myth that the United States only produces cheese designed for cheeseburgers and pizza,” Foor said. “The credibility that is being earned as American specialty cheese makers continue to grow and develop our cheese craft has a halo effect on all U.S. dairy products wherever they are sold overseas.”

This year the contest added a new “Super Gold” medal, awarded to just 47 cheeses. The U.S. won two of those. Winners were Spring Brook Farm Tarentaise from Spring Brook Farm in Vermont, and Bella Vita, from Firefly Farms in Maryland. Spring Brook Tarentaise won the annual U.S. Dairy Export Council award as the top U.S. Cow’s Milk Cheese," Foor concluded.

(December 10, 2010) California’s January 2011 Class 1 milk price was announced this morning by the California Department of Food and Agriculture at $16.45 per hundredweight for the north and $16.72 for the south. Both are down $1.83 from December and are $1.77 below January 2010. The Federal order Class I base price will be announced by the USDA on Thursday, December 23.

(December 10, 2010) Cash cheese prices have dropped at the Chicago Mercantile Exchange and the spread has return to normal after surpassing a dime. The blocks closed Friday at $1.39 per pound, down 11 3/4-cents on the week, and 31 cents below a year ago. The barrels fell to $1.3475, down 11 1/4-cents on the week, and 11 1/4-cents below a year ago. Thirteen cars of block traded hands on the week and 20 of barrel. The lagging NASS-surveyed U.S. average block price fell to $1.4538, down 1.9 cents on the week and the barrels averaged $1.4580, up 0.3 cent.

Butter seemed content with the previous week’s small recovery and held all week at $1.61 until Friday when it inched up a penny to $1.62, 17 cents above a year ago. One car traded hands. NASS butter averaged $1.6899, down 17.6 cents.

Cash Grade A nonfat dry milk also inched a penny higher on the week, hitting $1.2350, while Extra Grade remained at $1.2250.NASS nonfat dry milk averaged $1.2065, up 0.4 cent, and dry whey averaged 37.67 cents, down slightly.

World Ag Supply and Demand Estimates Released
(December 10, 2010) Forecast milk production was little changed from last month in the Agriculture Department’s latest World Agricultural Supply and Demand Estimates report issued this morning. The 2010 estimate remained at 192.8 billion pounds and compares to 189.3 billion in 2009 and 190 billion in 2008. The 2011 estimate was put at 195.5 billion, down 100 million pounds from last month’s estimate.

Fat-basis imports for 2010 were lowered primarily due to lower imports of cheese but skim-solids imports were unchanged due to higher imports of expected imports of other products.

Fat basis exports for 2010 were raised as sales of cheese and fluid milk and cream are strong and skim-solids exports are boosted by strong sales of cheese and nonfat dry milk (NDM). Exports for 2011 are forecast higher due to expected growth in butter and nonfat dry milk sales. Ending stocks for 2010 are raised to reflect higher-than expected stocks of cheese.

For 2010, cheese and whey prices were unchanged from last month. NDM prices are forecast higher but the butter price forecast was reduced reflecting recent sharp declines in butter prices. With no change in either the cheese or whey price, the Class III price forecast is unchanged. The predicted 2010 average remained at $14.35-$14.45 per hundredweight and compares to $11.36 in 2009 and $17.44 in 2008. The 2011 average was projected at $14.45-$15.25.

However, the Class IV price forecast was reduced, due to a lower butter price forecast which more than offsets a higher expected NDM price. For 2011, the range of the cheese price forecast narrowed but whey was forecast higher. The butter price was reduced as current price weakness spills into early 2011. NDM prices are forecast higher.

Look for the 2010 Class IV price to average $15.00-$15.20, down a nickel from last month’s estimate, and compares to $10.89 in 2009 and $14.65 in 2008. The 2011 average is projected at $14.50-$15.40.The all milk price was forecast to average $16.25-$16.35 for 2010 and $15.90-$16.70 for 2011.

Nothing Like Deadlines To Get Congress Moving
(December 10, 2010) Dairy Profit Weekly editor Dave Natzke reported on Congressional action affecting dairy farmers and said “There's nothing like deadlines to get Congress moving, and that seems to be the case this December.”

One contentious issue, with a December 31st deadline, includes current tax credits and import tariffs for corn-based ethanol. First implemented to help finance a domestic renewable fuels industry and reduce reliance on foreign oil, the program pays the ethanol industry to blend the bio-fuel with gasoline, Natzke explained.

Opponents, including dairy farmers, however, charge the subsidies are a drain on taxpayers, and say the use of corn for fuel, by some estimates up to one-third of the U.S. corn crop, also raises food and feed costs.

A quick sidelight, the Renewable Fuels Association reports that the U.S. ethanol industry produces about 36 million gallons of ethanol per day and uses about 13 million bushels of corn. The process yields about 90,000 metric tons of distillers grains, which can be used for livestock feed.

Earlier this month, a compromise bill was introduced, extending the ethanol tax credit, but cutting it by about 25 percent, to 36 cents per gallon, and extending the import tariff at its current rate of 54 cents per gallon. As of this week, it appears the ethanol debate may be rolled into the larger tax proposal being debated in Congress, according to Natzke.
See related: Dairy Farmers Urging Congress to Stop Subsidizing the Burning of Our Food

In the area of trade, Natzke reported that it appears ratification of a free trade agreement with South Korea will have to wait until early 2011. Trade negotiations, which were hung up over cars and beef, were resolved last week, he said, and agricultural groups, including dairy, have urged quick congressional approval. According to National Milk, that agreement could increase U.S. dairy exports by about $380 million annually.

Also related to trade, the International Dairy Foods Association reported that a dairy promotion checkoff paid by U.S. dairy farmers since the early 1980s, may finally be applied to dairy imports. Congress authorized the assessment in 2002, but program changes to make it compliant with world trade obligations were not approved until the 2008 Farm Bill. Natzke reported that the IDFA opposes the import checkoff, which would fund dairy promotion and research in the U.S., while dairy producer groups approve it.

(Dedcember 9, 2010) The lame duck session of Congress has been busy. The House passed the Child Nutrition Act last week, the Senate passed the Food Safety Bill, and agreement was reached this week regarding the Bush tax cuts.

National Milk’s Chris Galen reported in Thursday’s DairyLine that the Food Safety Bill was quite controversial because it exempts a lot of smaller food producers from its regulation, something National Milk is concerned about, but it also contains user fees which are in essence taxes, and that presents a Constitutional snafu that may prevent it from becoming law because taxing authority is only given to the House.

National Milk praised the passage of the Child Nutrition Act, Galen said, because it still mandates that milk and dairy products have a prominent role in school feeding programs.

The final issue is the tax question, specifically estate taxes, which we talked about last week. President Obama and Congressional Republicans reached a compromise. You’ll recall that last week that we pointed out that, if Congress failed to act before December 31, the estate tax comes back with a vengeance, having only a $1 million exemption and a maximum tax rate of 55 percent.

Under the deal announced Monday, the estate tax exemption would go to $5 million and the maximum tax rate would only be 35 percent, something National Milk supports, according to Galen, however Congressional Democrats are not happy with the compromise so we’ll have to see what finally gets negotiated before Congress recesses for the Christmas and New Year holidays.

The target date for ending the session was December 17, according to Galen’s ear to the rail, however the controversial issues being dealt with may mean the session drags out until just before Christmas, he said.

(December 8, 2010) Sometimes farmers are a little skeptical of check off programs, especially in tight financial times but most realize the importance of advertising and promoting their products just as the McDonalds and the Wal-Mart’s of the world do.

Such was the case in Idaho where the state’s dairy producers voted to increase their beef checkoff assessment to $1.50 per head. Idaho beef Council executive director Traci O’Donnell reported in Wednesday’s DairyLine that part of the extra 50 cents stays in Idaho and the rest goes to the national organization for national and international marketing programs. She added that about 70 cents of the $1.50 stays in Idaho and the rest goes outside the state to “drive beef consumption outside our state and outside our borders.”

When asked about the major accomplishments of the beef check off, O’Donnell said the increased assessment enabled them to dive deeper into some of their key market areas to build consumer awareness and consumption of beef.

It enabled cooperation with partners and a pilot test with 28 retailers across Idaho was done last Christmas. Pop up timers, those commonly placed in turkeys, were inserted in prime rib roasts, she said, and the check off provided training in the stores as well as merchandizing materials in store meat cases to bring that to consumer’s attention and tackle poultry sales at Christmas. She said the test was very successful and retailers reported sales increases of 20 to 60 percent. This year the promotion will be expanded to 60 stores across the state.

The increased funding aided their consumer outreach program, according to O’Donnell, and in 2009 they partnered with the World Triathlon Corporation to be the official protein of the Boise Iron man Triathlon.

(December 7, 2010) The barrel cheese price rolled downhill another 5 3/4-cents, to $1.4025 per pound, in Monday’s trading at the Chicago Mercantile Exchange on one uncovered offer but the blocks held at $1.5075, with no activity. That left a 10 1/2-cent spread.

Chalk it up to “normal seasonal movements,” according to Downes-O’Neill dairy economist Bill Brooks in Tuesday analysis. He reminded us that last year at this time there was a 24 cent spread, with blocks at $1.70 and barrels at $1.46, but the block price was well above the current level.

Demand for barrel cheese which mainly goes into processed product is down, Brook’s said “As we approach the end of the year and the holiday season when there’s stronger demand for block cheese for the chunks of cheese, shreds, and things like that we’d be using a little bit more of whenever we’re watching football games and attending holiday parties.”

Switching to butter; prices fell low enough to spur some additional demand, according to Brooks, and “We see some featuring going into the end of the year that we might not typically see and maybe make up for what we didn’t see at Thanksgiving but, like cheese, the price got down to the level that buyers felt that there was value and a good time to step in and buy and own.”

He said we could see additional gains in butter but cautioned that we are entering the time when inventories start to build and that will limit price gains.

When asked about world market conditions, Brooks pointing out that the world market is driving conditions domestically a little bit on butter and to a smaller degree on cheese because U.S. prices are below world levels. He believes interest is growing in sourcing U.S. product but that always takes a bit of time to develop but that might lend some support as we get into the New Year and gain a little more on prices than what we might have if we just relied on the domestic market.

(December 6, 2010) Colorado dairy producer Lester Hardesty is chairman of the U.S. Dairy Export Council (USDEC) and talked with me about his new role at World Dairy Expo. That conversation aired on Monday’s “DMI Update,” and he stressed that USDEC is a farmer funded, membership organization that works with the entire dairy industry to get more U.S. dairy to consumers around the world.

He said USDEC works to develop markets and defend them by working with exporters and companies to fill the needs of their customers and plays a key role in assisting them.

U.S. dairy farmers have learned the value of the export market to their bottom line. Hardesty acknowledged that the U.S. domestic market is stable, with 300 million people in the U.S., but pointed out that 6.6 billion people live around the world so 95 percent of potential dairy customers live outside the U.S.

“To me as a farmer it’s an opportunity to help feed the world,” Hardesty said. “It’s an opportunity for me to stabilize or enhance the prices that I receive at my farm gate, and an opportunity to grow either internally through management practices as our production increases yearly and or should I as a farmer choose or decide to milk a few more cows, it’s an opportunity for me to do that.”

(December 3, 2010) The cash butter price took a beating the first day of trading following the Thanksgiving break, plunging 14 cents, and followed losses totaling 32 cents the previous two weeks, but it inched up a quarter-cent on Wednesday, the first positive movement since late September, added a nickel and a quarter the next day, and closed Friday at $1.61 per pound, down 6 cents on the week, and 16 cents above a year ago. Nine cars traded hands on the week. The NASS-surveyed butter price fell 11.9 cents, to $1.8663. Nonfat dry milk averaged $1.2023, up 0.3 cent, and dry whey averaged 37.69 cents, up 0.2 cent.

Cheese marched higher for the third consecutive week, with the 40-pound blocks closing Friday at $1.5075, up 4 cents on the week, but still 21 cents below a year ago. The 500-pound barrels closed at $1.46, up 2 cents on the week, and unchanged from a year ago. Only two cars of block traded hands on the week and 12 of barrel. The U.S. NASS block price averaged $1.4726, down 9 1/2-cents on the week. Barrel averaged $1.4550, down 9.2 cents.

Farm Gate Milk Prices Are Heading Down
(December 3, 2010) Farm gate milk prices are heading down. The Agriculture Department announced the November Federal order Class III benchmark milk price this morning at $15.44 per hundredweight (cwt.), down $1.50 from October, but still $1.36 above November 2009 and a whopping $2.30 above California's comparable 4b cheese milk price..

That put the 2010 average at $14.46, up from $11.03 at this time a year ago, but compares to $17.63 in 2008. Thursday’s Class III futures had the December contract at $13.77, with January at $13.66, February at $13.65, March at $13.88, and April at $14.08.

The November Class IV price was $16.68, down 47 cents from October, but $3.43 above a year ago.

The NASS-surveyed cheese price averaged $1.6152 per pound, down 15 cents from October. Butter averaged $2.0230, down 16.6 cents. Nonfat dry milk averaged $1.1953, up 2.8 cents, and dry whey averaged 37.36 cents, down fractionally.

COMMODITY	Nov 2010	Oct 2010	Sept 2010
Class II Milk Price	$15.44 cwt.	$17.57 cwt.	$17.60 cwt.
Class II Butterfat Price	$2.2492 lb.	$2.4506 lb.	$2.4114 lb.
Class III Milk Price	$15.44 cwt.	$16.94 cwt.	$16.26 cwt.
Class III Skim Price	$7.87 cwt.	$8.69 cwt.	$8.13 cwt.
Class IV Milk Price	$16.68 cwt.	$17.15 cwt.	$16.76 cwt.
Class IV Skim Milk Price	$9.15 cwt.	$8.91 cwt.	$8.65 cwt.
Butterfat Price	$2.2422 lb.	$2.4436 lb.	$2.4044 lb.
Nonfat Solids Price	$1.0172 lb.	$0.9896 lb.	$0.9608 lb.
Protein Price	$2.1981 lb.	$2.4739 lb.	$2.3057 lb.
Other Solids Price	$0.1797 lb.	$0.1736 lb.	$0.1647 lb.
Somatic Cell Adjustment Rate	$0.00081 per 1,000 cells	$0.00088 per 1,000 cells	$0.00085 per 1,000 cells

PRODUCT PRICE AVERAGES	Nov 2010	Oct 2010	Sep 2010
Butter	$2.0230 lb.	$2.1893 lb.	$2.1570 lb.
Nonfat Dry Milk	$1.1953 lb.	$1.1674 lb.	$1.1383 lb.
Cheese	$1.6152 lb.	$1.7666 lb	$1.7016 lb.
Dry Whey	$0.3736 lb.	$0.3676 lb.	$0.3615 lb.

Dairy Profit Weekly editor Dave Natzke reported Friday that the legislation passed 73 to 25 and is entitled the Food Safety Modernization Act, giving the Food and Drug Administration new authority to oversee the U.S. food supply, including the power to issue mandatory food recalls.

The bill requires more frequent inspections of food facilities, gives FDA greater access to food company records, and increases oversight on imported foods.

Most dairy and agricultural organizations support the Senate version of the bill over the House version, which was passed more than year-and-a-half ago, Natzke reported, and the Senate bill does little to change FDA’s jurisdiction over most farms, which are still regulated by USDA.

Among dairy interests, the IDFA and National Milk worked to require FDA to coordinate with state inspection programs, such as inspections under the Pasteurized Milk Ordinance.

An IDFA/National Milk call for including raw milk distributors to be under new FDA regulations was not included in the Senate bill, according to Natzke, and small farms and businesses were granted exemptions, an amendment which split the agricultural community somewhat along "size" lines.

“The bill still faces some hurdles,” Natzke concluded. “The biggest of which may be whether the Senate violated a constitutional provision by requiring fees, technically considered taxes. Constitutional law gives power to create taxes only to the House.” “If that can be worked out, proponents hope the bill gets to President Obama's desk by the end of the congressional lame-duck session and, in any event, the final law will likely take years to implement.”

Mozzarella cheese output totaled 291.8 million pounds, up 746,000 pounds or 0.3 percent from September, and 13.7 million or 4.9 percent above a year ago.

Total Italian type cheese, at 369 million pounds, was up 3.1 million pounds or 0.9 percent from September, and 11.1 million or 3.1 percent above a year ago.

Cheddar production totaled 274.1 million pounds, up 15.5 million pounds or 6 percent from September, and 10.7 million pounds or 4.1 percent above a year ago.

American type cheese amounted to 363.7 million pounds, up 9.9 pounds or 2.8 percent from September, and 14.3 million pounds or 4.1 percent above a year ago.

Total cheese output came to 892.6 million pounds, up 14 million pounds or 1.6 percent from September, and 29.8 million pounds or 3.5 percent above a year ago.

Nonfat dry milk output, at 123.9 million pounds, was down 15.4 million pounds or 11.1 percent from September, but 33 million pounds or 36 percent above a year ago.

Estate Taxes A Concern That All Farmers Share
(December 2, 2010) One more issue of concern that all farmers share is our government, specifically estate taxes. A press conference was held Tuesday by 10 farm and agriculture organizations to call on Congress to act on estate tax reform during the lame-duck session which resumed on Tuesday.

“The estate tax comes back with a vengeance,” warned National Milk’s Chris Galen in Thursday’s DairyLine, “And is why we joined the nine other groups.” If Congress does not act before December 31, the current estate tax law (also known as the death tax) will revert to the 2001 rate with an exemption level of $1 million and a 55 percent tax rate. That rate would negatively affect the ability to pass farms, ranches, and small businesses from one generation to another, according to a NMPF press release.

National Milk was represented at the press conference by Billy French, a Maurertown, Virginia dairy producer whose farm has been in his family since 1872. French testified that estate planning was essential in keeping the farm in his family and expressed concern over the uncertainties regarding estate taxes.

Estate tax is one of two major tax issues that Congress needs to deal with in December, Galen reported. The other one is individual income tax rates, which was discussed Tuesday at the White House with Congressional leaders.

Republicans appear to have more support for easing the estate tax burden on farmers, according to Galen, “But, because we now have a divided government, with Republicans in the House and the Democrats keeping the Senate and the White House, you need to come up with bipartisan solutions.”

Republicans won’t take control of the House until January, he concluded, so “there’s a lot of jockeying to get ready for other big battles, including deficit reduction in2011, a topic we’ll be talking more about in the coming year.”

(December 1, 2010) The California Department of Food and Agriculture announced its November 4b cheese milk price this morning at $13.14 per hundredweight, down $2.52 from October, and 62 cents below November 2009. The 4a butter power milk price is $16.34, down 31 cents from October but $3.18 above a year ago. Comparable Federal order prices are announced by USDA Friday morning.

(December 1, 2010) Dairy processors agree these are troubled times for dairy farmers. Connie Tipton, CEO and President of the International Dairy Foods Association (IDFA) admitted in Wednesday’s DairyLine that the dairy industry is “pretty fragile right now.”

“Dairy farmers have been through months of economic stress,” Tipton said, and while milk prices have rebounded in 2010, margins are still tight and “The bottom line is that producers have had a rough time lately. We understand that.”

She said it’s a “fair question” to ask as to what IDFA believes is the solution and said it’s “an easy one to answer.” “We’re for programs that will help our industry grow, by increasing dairy consumption and by expanding exports,” Tipton said.

“We’re for policies that make the pie larger and benefit not only IDFA’s members but the thousands of dairy farmers who supply their milk.” She stressed the importance of “putting the right policies and tools in place” to “help our producers make it through the hard times.”

She pointed out that all agricultural commodity markets have price fluctuations but that farmers in other sectors have the tools to manage the swings. “Without the tools, it’s kind of like sending a football team on to the field with no helmets or pads,” Tipton said, “Not a good idea.”

IDFA strongly supports the creation of a new government-subsidized margin insurance program, according to Tipton “That will buffer dairy farm income when the margins between feed costs and milk prices are squeezed,” she said, “And will help prevent equity erosion.” She added that, “If this sounds a lot like the Dairy Producer Margin Protection Plan proposed by the National Milk Producers Federation, it’s because it is.”

Tipton said margin protection “needs to be passed as quickly as possible before the market puts the squeeze on farmers again, before 2011, 2012 or whenever the next farm bill is passed by Congress,” but she stopped short in endorsing any supply management provision, which is also a part of National Milk’s proposal.

“Let’s spend our energy on getting something done, rather than quibbling about details that have not yet been worked out or may not have the same kind of broad support,” Tipton concluded. “We are ready to join ranks immediately to get Congressional action on a dairy margin insurance program. We need something in place to protect dairy farms within months, not years. Let’s not let perfect be the enemy of the good.”

State by State	Milk Cows Change from Nov. 2009	Output Per Cow Change from Nov. 2009	Milk Production Change from Nov. 2009
Arizona	+14,000	+5 lbs.	+8.7%
California	-15,000	+95 lbs.	+4.5%
Colorado	+6,000	+45 lbs.	+7.4%
Florida	Unchanged	+10 lbs	+0.6%
Idaho	+24,000	+50 lbs.	+7.2%
Illinois	-3,000	+40 lbs.	-0.7%
Indiana	Unchanged	+30 lbs.	+1.8%
Iowa	-11,000	+30 lbs.	-3.3%
Kansas	+8,000	+5 lbs.	+7.2%
Michigan	+6,000	+25 lbs.	+3.1%
Minnesota	+1,000	-25 lbs.	-1.5%
Missouri	-9,000	+10 lbs.	-8.1%
New Mexico	+2,000	+25 lbs.	+1.9%
New York	Unchanged	+75 lbs.	+4.6%
Ohio	-4,000	+50 lbs.	+1.7%
Oregon	+7,000	+35 lbs.	+8.4%
Pennsylvania	+3,000	+40 lbs.	+3.2%
Texas	+2,000	+40 lbs.	+2.8%
Utah	+2,000	-20 lbs.	+1.4%
Vermont	+4,000	+10 lbs.	+3.6%
Virginia	Unchanged	-15 lbs.	-0.7%
Washington	+13,000	+10 lbs.	+6.0%
Wisconsin	+7,000	Unchanged	+0.5%
23 State Total	+57,000	+41 lbs.	+3.1%

COMMODITY	Dec 2010	Nov 2010	Oct 2010
Class II Milk Price	$15.77 cwt.	$15.44 cwt.	$17.57 cwt.
Class II Butterfat Price	$1.8022 lb.	$2.2492 lb.	$2.4506 lb.
Class III Milk Price	$13.83 cwt.	$15.44 cwt.	$16.94 cwt.
Class III Skim Price	$7.82 cwt.	$7.87 cwt.	$8.69 cwt.
Class IV Milk Price	$15.03 cwt.	$16.68 cwt.	$17.15 cwt.
Class IV Skim Milk Price	$9.06 cwt.	$9.15 cwt.	$8.91 cwt.
Butterfat Price	$1.7952 lb.	$2.2422 lb.	$2.4436 lb.
Nonfat Solids Price	$1.0068 lb.	$1.0172 lb.	$0.9896 lb.
Protein Price	$2.1706 lb.	$2.1981 lb.	$2.4739 lb.
Other Solids Price	$0.1852 lb.	$0.1797 lb.	$0.1736 lb.
Somatic Cell Adjustment Rate	$0.00073 per 1,000 cells	$0.00081 per 1,000 cells	$0.00088 per 1,000 cells

PRODUCT PRICE AVERAGES	Dec 2010	Nov 2010	Oct 2010
Butter	$1.6539 lb.	$2.0230 lb.	$2.1893 lb.
Nonfat Dry Milk	$1.1848 lb.	$1.1953 lb.	$1.1674 lb.
Cheese	$1.4606 lb.	$1.6152 lb.	$1.7666 lb
Dry Whey	$0.3789 lb.	$0.3736 lb.	$0.3676 lb.