November 2010 Archived Dairy News

November 30, 2010
November Ag Prices Report
Market Talk with Bob Cropp
We should drink more milk and help dairy farmers
Farmers share how they started dairy operations
What Lies Ahead for Ohio Animal Owners?
Multiple Calf Thefts in Stearns County
Governor Elect to address DBA Convention
Plymouth nears deal on upgrade for Co-Op
November 29, 2010
4th-generation dairy farm in county to sell off cattle, equipment
Crop of Small Dairies Hits Market
2011 Judges Lists Now Available from Holstein Association USA
Deadline for Jersey Proposals
U.S. Dairy Exports on Record Pace
Cottonseed Supply Expected to Rebound in 2011
Young farmers take on debt, uncertainty for independence
Lee Mielke is a Grandpa
Developer of dairy power settles for original contract
Program tracks data for farmers
Smallest number of beef cows in the U.S. since 1963
British Panel Says Cloned Meat is Safe to Eat
CA: Youth learn about dairy
Church women boost milk project
November 25, 2010
Quarterly Reports Indicate Farm Income Rising
Let's show gratitude for the ability to give
Foremost Farms USA Offers 2011 Member-Owner Scholarships
November 24, 2010
Reflecting on the Blessings
Milk Producers Council weekly update
2011 still shaping up well for milk prices
Dairy farm upgrade a boon for students
WI: Dairy farms can help state’s economy
Dane County dairy farmers will build county's 2nd manure digester
Rural Vermont holds raw dairy classes
Record keeping can help South Dakota dairies
New facility shows upside for raising dairy beef
Danone Expands U.S. Dairy Footprint
Cash Dairy Markets Weekly Recap
Ethanol Plants Put Strain on Other Users of Corn
Dairy Checkoff Update - November 2010
Beef Checkoff Gets High Marks
November 23, 2010
Volatility is here to stay
Judge: Micro-dairies are the answerHow Are Cows Physically Effected By The Genetically Modified Corn?
Dane County: Announces second “cow-power” project
A Chinese Dairy Farm is World's Largest Methane Farm
November 22, 2010
October Cold Storage Figures Released
CWT Assists with 582,000 Pounds of Export Cheese Sales  
U.S. corn ethanol "was not a good policy"-Gore
DMI Sets the Record Straight
Alliance of Western Milk Producers update
Milk Producers Council weekly update
Western United Dairymen update
Dairy herdsmen short course Nov. 29 in Sulphur Springs
November 19, 2010
Alliance of Western Milk Producers update
Milk Producers Council weekly update
Western United Dairymen update
Dairy herdsmen short course Nov. 29 in Sulphur Springs
Dairy Policy Work Geared Toward the Longer Term
Dairy Outlook
December Federal Order Class I Down 28 Cents
Mortgage Company Takes Control of Mega Dairies
Milk quality important to dairy farmers, consumers
Recipients of the 2011 Jersey Educational Travel Award
Select-Sired Offspring Shine at NAILE
November 18, 2010
October Milk Production up 3.3 Percent
Congress is back in town for a lame duck session
Editorial regarding NY Times article
Cropp says dairy prices should improve
Beef Cattle Number Drop Causing Concern
Mobile dairy classroom provides moving lesson in San Luis Obispo
Deadline For National Jersey Award Nominations is January 15
November 17, 2010
Market Talk with Dave Kurzawksi
State's agricultural exports have grown so far this year
Robotic dairy revolution
100 cows die in Green County barn fire
November 16, 2010
Plenty of Barrel Cheese Looking For a Home
MILC Update
Junior All American Winners Announced by Jersey Association
World Dairy Summit: Visions of Greener Pastures
November 15, 2010
CWT Assists with 1.8 Million Pounds of Cheese Export Sales
DMI and America's Dairy Farmers Set the Record Straight
Brand Name Partnerships Essential in Dairy Promotion
Western United Dairymen update
Milk Producers Council weekly update
Robotic rotary dairy could help farmers work nine to five
Wisconsin 4-H Dairy Judging Team Places Second at NAILE
November 12, 2010
Dairy Markets Week in Review
Recent Weather Helps Crop Harvest
Penn State Dairy Outlook
My Beef Checkoff - Dairy Edition, November 2010
NY Organic Dairy Initiative Completes 5-Year Project, Will Continue
Largest Dairy in SC Moving to Prison
The Death of the American Dairy Farmer - Editorial by Floyd Hall
Mayfield Dairy Hosts Cow Name Contest
November 11, 2010
Recapping Historic Election
Survey says most dairy farms are staying put
IDF and ISO combine to address melamine in milk
Visiting dairy farmers see how it's done in NZ
November 10, 2010
California's December Class 1 Milk Price is $18.28
Quality Assurance Program Important Part of Beef Checkoff
Dean Foods Waiting for a Bounce
Rescue Attempt Turns Fatal at Southern Tier Dairy Farm
Stanley-Boyd takes top dairy judging honors
Michigan State Dairy Club Holds Cheese Sales
Milking machine central to beating mastitis
Illinois Dairy Checkoff Hits $50 Million Mark
November 9, 2010
Latest World Ag Supply and Demand Estimates
The Cash Dairy Market is Jumpy
Producer Standby Statement - The NY Times Article
Plan Control Strategy for Calfhood Pneumonia This Winter
The Cost of Johne’s Disease to Dairy Producers Booklet Now Offered in
Spanish
Pedigree Analysis of 2010 National Holstein Show Winners Now
Available 
November 8, 2010
U.S. Pushes Cheese Sales
Dairy News for Co-Ops
Illinois agency responds to EPA
CWT Assists in 2.4 Million Pounds of Cheese Export Sales
Annual MSU Dairy Club holiday cheese sale
November 5, 2010
Western United Dairymen update
Milk Producers Council weekly update
Dairy Market Weekly Recap
October Federal Order Class III Price Up 68 Cents
Recent Election Results Impacts Ag Committee and Farm Bill
Wisconsin Agriculture Lost Some Clout on Election Night
Dairies brace for higher prices
Dairy Food in the U.S. to 2014
Dairy Family Opens Doors to Non-Farmers
NZ dairy giant Fonterra confirms 2010/11 forecast
Remembering Roger Huntley
Researchers Look at Heat detection Accuracy
Tackling Mastitis is all in the Plan
Groundbreakers for new County Fair dairy barn
November 4, 2010
NMPF Supports Lowering Somatic Cell Count Levels
10.2 million pounds of cheese export sales assisted by CWT
Industry needs to start rallying behind a single proposal
Students Participate in Eighth Annual Northeast Regional Dairy
Challenge
Dairy Cattle Antibiotic Residue Prevention Manual Available Free to
Farmers  
UW-Extension sponsoring dairy trip to Rosendale farm
November 3, 2010
Processors and Producers Work on Foundation For Future
September Dairy Products Report
Focus on sustainability at World Dairy Summit 2010
Pro Ag Editorial - Arden Tewksbury
Teen has a passion for dairy
South Dakota’s dairy industry reflects recent national reports on growth
November 2, 2010
Cotton Incorporated will reward dairy producers for storage savvy
Market Talk with Bill Brooks
Dairy Business Gathering Starts November 30th
Leprino's Cheese Plant & Influx of Cows
DFA Makes Entries to Ethnic Cheese Market
Missouri Dairy Defies Order on Raw Milk Cheese
November 1, 2010
California's October Class 4 Prices Announced
Partnerships Important Part of Checkoff Effort
Washington by the numbers
MN: Area losing hundreds of dairy cows to economy
Farm trash fills dairy cow menus
Dairy triplets defy the odds
Robotic milkers give cows best of both worlds
Western United Dairymen update
Milk Producers Council weekly update

(November 30, 2010) The November Milk-Feed Price Ratio is 2.22, down from October's estimate of 2.40, according to USDA’s “Ag Prices” report and compares to 2.26 in November of 2009. 
 
The All Milk Price was estimated at $17.90 per hundredweight, down 60 cents from last month's estimate, and $2.50 above a year ago. 

Corn averaged $4.59 per bushel, up 27 cents from October, and 94 cents above a year ago. The soybean price, at $11.20 per bushel, was up $1.00 from October, and $1.67 above a year ago. Alfalfa baled hay was $117.00 per ton, down $1.00 from October, and $8.00 above a year ago.

Market Talk with Bob Cropp
(November 30, 2010) The cash butter price took a beating Monday, the first day of trading following the Thanksgiving break, plunging 14 cents, to $1.55 per pound. That follows losses totaling 32 the previous two weeks. Cheese continued to move higher. 

University of Wisconsin Emeritus Professor, Dr. Robert Cropp, said in Tuesday’s DairyLine that he was surprised at the large drop in butter, considering Wednesday’s 11-cent drop. Butter stocks are still 43 percent below those a year ago, he said, but there is a little more cream available, butter production is picking up a little, and “we’re done with the holidays.” 

He doesn’t see cheese prices climbing much higher. “That’s a pretty good price,” he said, “And it’s come back quite a bit from the middle of the month when it was down to as low as $1.35 per pound.” He called the strength “encouraging,” especially in light of what’s happening in milk production in the major cheese producing states like California, Idaho, and New York which was up substantially.

Milk output in Minnesota and Wisconsin wasn’t up much, he said. 

Block is a little tighter than barrels, according to Cropp, and yet the barrels were up in price as well. He doesn’t see prices going much higher and hopes the prices will “hold in there as we move into next year.” 

California is scheduled to issue its November 4a and 4b milk prices on Wednesday, with Federal order prices out Friday morning. Cropp sees the Federal order Class III price falling to around $15.30 or so. The Class IV price will likely slip to the high $14's as we move into January, according to Cropp. Nonfat dry milk has held fairly strong, he said, but the crash in butter will pull the Class IV lower though, with the lag in prices, it won’t be seen right away. 

(November 29, 2010) U.S. dairy exports are on a record pace this year. Margaret Speich of the U.S. Dairy Export Council talked about what this growth means to dairy farmers in Monday’s “DMI Update.” She said the world market has come back strong in 2010, and U.S. suppliers have stepped up to fill a growing share of sales.

In the first three quarters of the year, aggregate U.S. exports of milk powders, whey, lactose, cheese and butterfat were up more than 2.3 million pounds, or 41 percent from last year and up 6 percent from 2008. The dollar value of total U.S. dairy exports is $2.7 billion, an improvement of 69 percent, according to Speich.

“That means U.S. suppliers have exported 12.5 percent of U.S. milk solids production this year, the most ever,” she said, “And it’s a much higher proportion than last year, when we exported about 9 percent of our production.”

Exporters also have done a good job of diversifying their sales among products and markets. By volume, overseas sales of nonfat dry milk and skim milk powder are up 45 percent this year. Exports of whey proteins are up 35 percent, cheese is up 64 percent and butterfat shipments have more than tripled.

Exports are up to practically all destinations. Mexico, Southeast Asia, Canada, China and Japan remain our five largest markets. But we’ve also seen large gains this year in sales to the Middle East, North Africa, Russia and South America.

“All this is good news for U.S. dairy farmers,” she concluded. “The more U.S. milk products we can sell overseas, the less those products hang over the U.S. market.”  

Liana Grace Mielke was born into the Nathan and Vera Mielke family Friday night at 10:40 PM Eastern time. She measured 20 1/2 inches long and weighed 8 pounds, 1 ounce.
 
She is named after Lee and her great grandma Ann.. 
 
Liana is Lee's FIRST grandchild and lives with mommy and daddy in Mechanicsburg, PA.
 
Also interestingly, she was born on November 26, one month later than Lee's birthday, October 26.
 
PRAISE GOD!!!  
email Lee

(November 25, 2010) Quarterly reports from agricultural lenders indicate farm income is rising, land values are higher and there’s more robust demand for farmland but the good economic news is not spilling into dairy regions.

Dairy Profit Weekly editor Dave Natzke reported in Friday’s broadcast that high commodity prices are behind most of the trends as better returns from corn and soybean crops add to income and farmland values.

Each quarter, Federal Reserve Banks in much of America's heartland survey lenders on agricultural credit conditions, according to Natzke, and the third quarter showed sharp improvement.

According to those lenders, economic conditions improved from Texas to the Corn Belt. For example, Iowa farmland values were up 13 percent compared to a year ago, with Indiana and Michigan values up more than 10 percent. Kansas and Nebraska farmland values were up more than 10 percent; and irrigated cropland in the Dallas Federal Reserve bank region was up more than 8 percent.

“While much of the increased value is being driven by farmers seeking more land to grow high-value crops,” Natzke charged, “The lenders said record-low interest rates are helping boost demand, and non-farm investors are also finding farmland a good investment, due to appreciating values.” “Throughout the Heartland, bankers also report improved loan repayment rates, with a decline in loan renewals and extensions.”

But, as we stated at the onset, the rosy economic outlook for corn and soybean-producing areas is improving, dairy is another story, with dairy producers continuing to struggle with higher production costs and narrow income margins.

In Wisconsin, for example, farmland values increased just 3 percent compared to a year ago, with quarterly increases up just 1percent, Natzke said. In the Chicago Federal Reserve District, Wisconsin was also the only state where the trend in forced sales and liquidations did not reverse from a year ago, and one-third of the bankers responding to the survey predicted additional legal resolutions to outstanding farm loans, he concluded.

(November 24, 2010) Thanksgiving Day gives much to reflect on and blessings that dairy farmers can be thankful for. Besides the obvious blessings of family and friends, health, and strength, National Milk’s Chris Galen reflected in Thursday’s discussion regarding milk prices which at least, this year, are up from a year ago.

“Last year was probably the worst in the life times of most dairy farmers in this country,” Galen said,” and he reported that the Farm Bureau’s annual survey of what it costs to make a typical Thanksgiving dinner is up from a year ago.

Galen said that, “In some respects, it’s good news because it means dairy prices for things like cream cheese, butter, and milk are higher and they needed to be because farmers couldn’t survive at the price levels where they were a year ago.”

He warned that the U.S. economy is still fragile and, as consumers struggle, so do farmers. The best news, according to Galen, is that National Milk has used the past year to make progress on necessary reforms in dairy economics and dairy pricing. There’s more work ahead, he said, but as the year winds down, we can be thankful for the momentum for change that’s been building and details are being worked out in National Milk’s “Foundation for the Future” program.

We also called on DairyLine listeners to get involved in the process. Surely there are dairy farmers who have never written their Congressman or Senator and lawmakers need to hear from their constituents because, as Galen pointed out, “Congress will have a whole slew of things to look at next year, especially the budget, and a lot of other issues.” There’ll also be a lot of new members, he concluded, “So in order to get their attention and to make dairy policy changes a front and center issue, we need to make certain that people contact their members of Congress.”

Cash Dairy Markets Weekly Recap
(November 24, 2010) The cash dairy markets continue to send some mixed signals. Cheese prices were rebounding but petered out on Wednesday while butter is plummeting. The cash block cheese price gained a nickel the first two days of the Thanksgiving holiday shortened week but gave back 2 3/4s on Wednesday and closed at $1.4675 per pound, up 2 1/4-cents on the week, but 18 1/4-cents below a year ago. Barrel closed Wednesday at $1.44, up a penny on the week, and 7 cents below a year ago. Three cars of each traded hands on the week. The NASS-surveyed prices were not available before our deadline because of the holiday.  

The cash butter price plunged 11 cents on Wednesday, closing at $1.67, down 22 cents on the week, but still 14 1/2-cents above a year ago. It has lost 51 1/2-cents in four weeks. Only one car was sold on the week.

Ethanol Plants Put Strain on Other Users of Corn
(November 24, 2010) Last year the U.S. produced a record 13.2 billion bushels of corn and this year is on track to be the third highest but livestock producers are facing corn prices that are through the roof. The Milk Producers Council’s Rob Vandenheuvel pointed out in their weekly newsletter that current prices are almost 50 percent higher than six months ago and almost three times than it was five years ago and asks why?  

He points to ethanol production which, even Al Gore admits was not good policy. Speaking in Wednesday’s DairyLine, Vandenheuvel said you need to look how the U.S. uses its corn crop and, right now, about a third of the corn goes to ethanol plants and that has put a great strain on the other users of corn, particularly livestock agriculture.

That competition has driven prices higher, resulting in higher feed prices for farmers and ultimately will mean higher food prices for consumers. Vandenheuvel also points out that converting corn to ethanol has not made the U.S. any less reliant on foreign oil.

He admits he’s not an expert on that but cites others who report that the fuel needed to grow, harvest, and transport the corn to ethanol plants and found that we use just as much fossil fuel harvesting the corn than we would have if we just burned the gas in the first place rather than using ethanol.”

(November 16, 2010) There’s plenty of barrel cheese looking for a home, according to market analyst Mary Ledman, Principal of Keough Ledman and Associates in Libertyville, Illinois. Ledman commented in Tuesday’s DairyLine on Monday’s continued decline in the barrel cheese price which widened the spread between the blocks.

Barrels were selling at a premium to the blocks five days ago, Ledman reported, but are now selling a nickel and a half below. There are rumors of plenty of barrel being offered at a sizable 5-10 cent a pound discount off the market, she said, and they are not coming to the CME but are being offered to brokers on the side so she looks for continued downward pressure on the barrel market in particular.

As to the butter market, Ledman said we have already seen that this market can fluctuate and drop 27 cents in one day, but she predicts “a butter correction” in the next week or two and head down to $1.75-$1.85 per pound and possibly take a break there but by year end she sees butter at $1.65.

Thursday, the Agriculture Department issues its preliminary October milk production estimate and Ledman sees “more of the same;” namely strong gains in milk per cow and possibly a gain of 5,000-10,000 head in cow numbers.

“That’s not a huge increase in cow numbers,” she said, “But milk prices were really strong in October and continued to be strong in November so there is incentive to keep cows in the herd and producing as much milk as possible.”

She warned that the market signals will change at the beginning of the year but, through year end “we’re going to see strong milk per cow and some incremental increase in cow numbers.” She expects Thursday report to show a 3 1/2 plus percent gain in milk production versus the prior year.

“The Smoothie line was an incredible opportunity for them also,” Roecker said, “As well as the Angus Snack Wrap, which uses one slice of cheese instead of just a half slice which is in the Mac Snack Wrap. It means millions of additional milk purchased from dairy farmers, according to Roecker.

A food scientist employed by the check off is also involved in developing new products, he said, but could not discuss what is currently on the drawing board.

McDonalds was one of the first partners, starting with the plastic, single-serve, re-sealable milk containers in Kid’s Meals and that also exceeded expectations, Roecker said, but he also pointed out that the success drew interest from other fast food chains to do the same.

Domino’s also saw what happened, he said, and started partnering with the check off as did Pizza Hut which just introduced the Big Italy Pizza.  

(November 12, 2010) The cash block cheese price fell to the lowest level in four months but regained a penny the second Friday in November, closing at $1.41 per pound, down 7 cents on the week, and 16 1/2-cents below a year ago. It had lost 36 cents in five weeks. Barrel finished at $1.37, down 14 cents on the week, and 7 1/4-cents below a year ago. Twenty nine cars of block traded hands on the week and 26 of barrel. The NASS-surveyed prices were not available before our deadline due to the Veteran’s Day holiday.

Cash butter, after plunging 27 cents the previous Friday and rebounding 12 cents on Monday, closed the week at $1.99, up 11 cents on the week, and 46 1/2- cents above a year ago. Four cars were sold on the week.

Recent Weather Helps Crop Harvest
(November 12, 2010) The U.S. corn and soybean harvest is all but completed and the dairy feed supply and price picture is coming into clearer focus but it’s not looking food for dairy farm feeding costs. Dairy Profit Weekly editor Dave Natzke reported in Friday’s broadcast that October’s weather helped the U.S. crop harvest advance quickly, with nearly all corn and soybeans harvested by the first week of November but, with the early harvest, USDA now estimates corn production at about 12.5 billion bushels, down 1percent from the October estimate and 4 percent less than last year’s record production. U.S. soybean production is forecast at a record-high 3.38 billion bushels, but is also down 1percent from the October forecast.

As a result of the reduced crop estimates compared to a month ago, USDA is now forecasting smaller feed grain supplies for 2010 and 2011, resulting in higher prices for dairy farmers who buy feed, Natzke warned.

On the demand side, USDA expects an increase in corn for ethanol production, resulting in the smallest carryover of corn since 1995-96. Export demand, especially to China, will result in a decline in soybean carryover, as well.

The season-average farm corn price is projected at $4.80-$5.60 per bushel, up 20 cents compared to last month, and well above the previous record of $4.20 per bushel in 2007/08.

The U.S. season-average soybean price paid at the farm is projected at $10.70-$12.20 per bushel, up 70 cents compared to last month, with soybean meal projected at $310-$350 per ton, up $20 per ton.

For producers who price feeds off the Chicago Mercantile Exchange, 2011 corn futures contracts averaged $5.76 per bushel as of the close of trading on November 10. CME soybean futures contracts for November 2010 through August 2011 averaged $13.21 per bushel, while soybean meal futures averaged more than $356 per ton, according to Natzke.

(November 11, 2010) Last week’s historic election was Thursday’s DairyLine topic. National Milk’s Chris Galen said the election means “more change, at least as much as what we had in 2008 when President Obama was elected.”

Republicans will control the House of Representatives, winning at least 60 seats, depending on the outcome of a few more races yet to be decided. The most interesting aspect, according to Galen, is that more than half of the Democrats on the House Agriculture Committee are not returning in 2011, due to retirements or defeats. That means an enormous task in educating a significantly large number of people who will eventually go on the committee, he said. “It means you have to basically start from ground zero in terms of educating them about your issues.”

The purse strings will also going be very tight. Galen said one of the messages from the election is that “government has grown too big for its britches and there needs to be less spending and, whether you’re a member of the Tea Party or not, the message has been sent that both parties have to look at spending.”

“That means farm policy, and particularly the next farm bill, we’re going to face a different budget environment, a much tighter, more scrutinized environment where we’re going to have to fight tooth and nail for every penny that we get.”

“The challenge,” Galen concluded, “Will be to justify everything that we do with respect to dairy policy that has a budget impact and that will be part of the education process that starts in January.” 

Quality Assurance Program Important Part of Beef Checkoff
(November 10, 2010) One of the important parts of the Beef Checkoff is the “Quality Assurance Program,” and I talked about it with Conrad Kvamme at the recent World Dairy Expo. The discussion aired on Wednesday’s DairyLine with Kvamme reminding listeners that dairy producers are also beef producers as 22 percent of U.S. beef comes from dairy animals.

That said, Kvamme underscored the importance that the animal marketed is a quality product and that any treatment with medication adhere to strict regulations so there are no residues in the meat.

Dairy producers are familiar with the Dairy Quality Assurance program. A similar program exists for beef so dairy and beef producers adhere to the same principals, according to Kvamme, because “public food safety is essential.”

Check off dollars go to that end, he said, and he cited a pilot program in the Upper Midwest that uses posters and brochures and being at farm and trade shows and put on seminars so producers are quality assured. The materials are published in Spanish as well and a manual exists for educators to teach the principles. For more information, log on to www.mybeefcheckoff.com.  

Milk per cow was adjusted slightly higher in early 2011 but higher feed prices and lower forecast milk prices limit the rate of growth in 2011. Exports in 2010 are forecast higher due to strong growth in butter, cheese, and fluid milk/cream. For 2011, continued global economic recovery and a favorable exchange rate should support exports.

Revisions have been made to historical export aggregations, resulting in higher estimated exports. Import forecasts are raised on the strong pace of imports.

Cheese and butter prices for both 2010 and 2011 were forecast lower. The 2010 forecast for nonfat dry milk is unchanged from last month but stronger expected exports support a higher forecast for 2011. The whey price forecast was unchanged.

Both Class III and Class IV milk price forecasts for 2010 were lowered due to the lower cheese and butter price forecasts. The Class III price forecast is lowered for 2011 but the Class IV price forecast is raised as the higher nonfat price more than offsets the lower butter price forecast.

Look for the 2010 Class III price to average $14.35-14.45 per hundredweight, down 30 cents from last month’s projection, but compares to $11.36 in 2009. The 2011 average is now put at $14.40-$15.30, down a dime from last month.

The Class IV average will be $15.05-$15.25 in 2010, down a nickel from last month’s estimate, and compares to $10.89 in 2009. The 2011 average is now put at $14.45-$15.45, up a dime from last month’s projection. The all milk price is forecast to average $16.30-$16.40 for 2010 and $15.95-$16.85 for 2011.

The Cash Dairy Market is Jumpy
(November 9, 2010) The cash dairy markets are “jumpy,” according to Alan Levitt, editor of the CME’s Daily Dairy Report. The cheese market is down nearly 20 cents over the last week and the cash butter market, which crashed Friday, bounced back Monday. 

“Everybody expected cheese and butter to fall at some point, and now seems to be the time,” Levitt said. The milk futures market rallied late last week when buyers came back into the market at just under $1.50. “They took it as a sign that buyers would support the market at that level, but lately buyers are nowhere to be found,” he said.

Blocks are at the lowest level since late June. “I think traders aren’t really sure where the level of support is, so they’re selling off a little bit,” Levitt said.

Levitt said there wasn’t anything specific that cause the cash butter price to drop 27 cents last Friday. “I think the butter price was too high for too long. In fact even with Friday’s crash it was still the highest price ever for that date in the year,” he said.

The break in the butter price may have the buyers’ attention, as the price jumped 12 cents Monday to $2.00. “I could see a similar bounce in the cheese, once buyers are comfortable that the bottom is put in, then I think we could see the bids come back,” he said.

Dairy Market Weekly Recap
(November 5, 2010) The block cheese price closed the first week of November at $1.48 per pound, down 16-cents on the week, and eight cents below a year ago. Barrel closed Friday at $1.51, down 15 1/2-cents on the week, and 1 1/2-cents below a year ago. 20 cars of block traded hands on the week and 25 of barrel. The lagging NASS-surveyed U.S. average block price decreased 1.9 cents, to $1.7505, while the barrels averaged $1.7395, down 2.5 cents on the week.

Cash butter dropped 27 cents on Friday, November 5^th and closed the week at $1.88, down 30 1/2-cents on the week, but still 38 cents above a year ago. Two cars were sold on the week. NASS butter averaged $2.1676, down 0.3 cent. NASS nonfat dry milk averaged $1.1925, up 5.1 cents, and dry whey averaged 37.72 cents, up 0.7 cent.

October Federal Order Class III Price Up 68 Cents
(November 5, 2010) The October Federal order Class III milk price was announced by USDA at $16.94 per hundredweight (cwt.), up 68 cents from September, $4.12 above October 2009, and $1.28 above California’s comparable 4b cheese milk price. The 2010 Class III average now stands at $14.36, up from $10.72 at this time a year ago, but compares to $17.91at this time in 2008. The October Class IV price is $17.15 up 39 cents from September, and $5.29 above a year ago.

Natzke reported that international visitors got a firsthand look at American democracy in action with this week's elections. What they witnessed was profound political change that could impact future U.S. dairy and farm policy. 

The biggest change will be in the House, where Republicans won the majority, and as many as 16 Democrats on the House Ag Committee lost reelection bids. The committee’s ranking minority member, Rep. Frank Lucas, Oklahoma Republican, is in line to take over as chair; followed by Rep. Bob Goodlatte of Virginia, who chaired the House ag committee from 2003-2006.

In the Senate, just a half-dozen ag committee members faced reelection bids. But, even though the Democrats retained the majority, current Senate Ag Committee chair Blanche Lincoln, of Arkansas, lost her reelection bid. It appears Sen. Debbie Stabenow, a Michigan Democrat, will be named chair of the Senate Ag Committee.

The election not only impacts the makeup of congressional ag committees, but could also impact the pace of work on the 2012 Farm Bill. Lucas, the expected House Ag Committee chair, has been quoted as saying he prefers to delay the Farm Bill because the “fiscal mood in Washington will be better in 2012.”  Lucas also opposes "cap and trade" greenhouse gas regulations and believes in limiting powers of the U.S. Environmental Protection Agency.

With all new faces on the House Ag Committee – as well as the change in leadership in the Senate Ag Committee, farm and dairy groups will have their work cut out for them when it comes to educating lawmakers on their issues in preparation for the 2012 Farm Bill.

NMPF Supports Lowering Somatic Cell Count Levels
(November 4, 2010) The National Milk Producers Federation is backing a ratcheting down of somatic cell count (SCC) levels. The resolution was approved at NMPF’s recent annual meeting, according to Jamie Jonker, Vice-President of Scientific and Regulatory Affairs. 

He said there was much spirited discussion on NMPF’s delegate body supporting the three-step reduction to reduce SCC levels. The proposal would be to reduce the current level from 750,000 to 600,000 effective January 1, 2012, then to 500,000 by 2013, and a final reduction to 400,000 by 2014.

“There’s been pressure for reducing somatic cell counts from a variety of areas, certainly what has been happening in the international arena, but I think also domestically,” Jonker said.

NMPF will propose the reduction to the National Conference on Interstate Milk Shipments, which will be debated by industry and state regulatory authorities and the Food and Drug Administration.  If approved by the conference, it will be part of the Pasteurized Milk Ordinance.

If a dairy farm has a SCC level that is higher than the threshold two times out of the last four months, they would receive a warning letter. If the SCC were higher three times out of the previous five months, the farm would become de-listed and would be able to re-enter the Grade A program with a new test under the regulatory threshold.

“That part of the warning letter and de-listing would be the same that is currently done under the Pasteurized Milk Ordinance, the only change we are proposing is reducing the somatic cell count threshold,” Jonker said.

Based upon USDA data, about 15 percent of dairy producers in the U.S. are currently above that 400,000 level. “That’s why the delegate body took the approach of a three-step reduction to get to that 400,000 level by January 1, 2014,” he said. “It allows those producers that need to make management and animal changes over a period of time, to put those changes in place so they could meet the new regulations should it be passed by the conference.

The resolution includes regulatory discretion within the state to temporarily allow for variances in the somatic cell count threshold based upon seasonal dependent increases and natural disasters.

Processors and Producers Work on Foundation For Future
(November 3, 2010) Last week was the annual meeting of the National Milk Producers Federation. Jerry Slominski, Internatial Dairy Foods Association VP of Legislative Affairs, attended and gave us a report on Wednesday's DairyLine. Slominski said he paid particular attention to the discussion around the organization’s "Foundation for the Future." 

"I’m pleased to report that for the first time in a long time, processors and producers are in agreement on much of what is needed to strengthen our industry in the years to come," he said. 

IDFA has long stressed that the real problem is the lack of business tools to manage milk price volatility. All agriculture commodity markets experience price fluctuations, but unlike dairy, farmers in other sectors have the tools to manage these swings.

"The centerpiece of the Foundation for the Future is a program that will help manage that risk," he said. The proposed Dairy Producer Margin Protection Program will provide insurance for a portion of a producer’s margin between feed costs and milk prices. 

"It’s a far better plan than the programs it will replace and a big step in the right direction for the dairy industry," according to Slominski.

Speaking of risk management tools, IDFA complimented Ag Secretary Vilsack for his recent actions to increase participation in the USDA’s Livestock Gross Margin Insurance program. "The program has been underutilized and incentives to increase participation by dairy farmers were long overdue," Slominski said.

IDFA shares NMPF’s goal of simplifying the Federal Milk Marketing Orders. "Although we haven’t reached a consensus on the best way to achieve this goal, we have been working together and we remain hopeful that we can agree on a transition to a simpler, more market-oriented policy," he added.

There is one part of the Foundation that will make it harder for processors to manage their risk when building new processing plants. The new government program aims to control milk supply. "While IDFA will support and lend a helping hand to dairy farmers so they can better manage price volatility, this is not the time to discourage investment in the dairy industry," Slominski concluded.

September Dairy Products Report
(November 4, 2010) The Agriculture Department’s September Dairy Products report puts butter production at 110.5 million pounds, up 8.8 million pounds or 8.7 percent from August and 15.8 million pounds or 16.7 percent above September 2009.    

Mozzarella cheese output totaled 290.9 million pounds, down 3.9 million pounds or 1.3 percent from August, but 20.6 million or 7.6 percent above a year ago.

Total Italian type cheese, at 365.3 million pounds, was down 1.4 million pounds or 0.4 percent from August, but 19.2 million or 5.5 percent above a year ago.

Cheddar production totaled 265.5 million pounds, down 10.6 million pounds or 3.8 percent from August, but 0.8 million pounds or 0.3 percent above a year ago.

American type cheese amounted to 354.6 million pounds, up nearly a million pounds or 0.3 percent from August, and 11.7 million pounds or 3.4 percent above a year ago.

Total cheese output came to 878.6 million pounds, up 3.4 million pounds or 0.4 percent from August, and 36.1 million pounds or 4.3 percent above a year ago. 

Nonfat dry milk output, at 139.3 million pounds, was down 25.1 million  pounds or 15.3 percent from August, but 16.8 million pounds or 13.7 percent above a year ago. 

Market Talk with Bill Brooks
(November 2, 2010) The Drop in cash cheese prices this week is a continuation of what started in mid October, according to Downes-O’Neill dairy economist Bill Brooks. 

The slow nature of the declines has limited buyers from stepping into the market and taking large quantities of cheese. Brooks said we are not to the point where the bottom has been established.

“We’re probably getting down closer to that price level that’s going to spur additional demand, but I’m not sure that we’ve reached it yet,” he said.

The October milk-feed price ratio is 2.23, down from September’s revised estimate of 2.38. That could be the start of a downward trend as both milk and feed prices increased in October. 

We may have another month or so of higher milk prices, but after that we’ll start to see a decline based on the futures prices. “The profitability level above the feed costs is going to get squeezed again,” he said.

Brooks said it won’t be as bad as last year, but it’s not going to be a fun time from an economic standpoint for dairy producers, based on where our futures prices are sitting at right now as we go into 2011.

California's October Class 4 Prices Announced
(November 1, 2010) California's October Class 4b price was announced today by the California Department of Food & Agriculture at $15.66 per hundredweight. That's up 18 cents from September, and $2.97 more than October 2009.

California's October 4a price was announced at $16.65 per hundredweight, up just four cents from September, and $5.11 more than October 2009. 

Year to date, the average California Class 4b is $13.26 per hundredweight, up $2.88 from the same period in 2009. The average Class 4a price stands at $14.67 per hundredweight, up $4.54 from the same period a year ago. 

October Federal Order Class II, III and IV milk prices will be announced Friday, November 5th. Alan Levitt, editor of the CME Daily Dairy Report, projects the October Class III price will come in at $16.94, and the Class IV is projected to come in at $17.08.

Partnerships Important Part of Checkoff Effort
(November 1, 2010) Partnerships are an important part of the dairy checkoff’s effort to increase dairy product sales. One of the first of those partnerships was with the fast food giant, McDonalds and they still are a partner, according to Paula Meabon, Pennsylvania dairy producer and chairman of the National Dairy Board.  

We talked about it at the recent World Dairy Expo and that conversation aired on Monday’s “DMI Update. Meabon said McDonalds has been a great partner and DMI is currently working with them regarding their beverages.

“McDonalds wants to be the beverage destination,” Meabon reported, and DMI worked with them on their McCafe line which consists of up to 80 percent milk or about 300 million pounds of dairy farmer milk. Frappes 50 percent milk or 100 million pounds more milk and has been their biggest seller, according to Meabon,

The dairy checkoff actually employs a dairy food scientist to work on projects for and with McDonalds to generate new and creative ideas to sell more milk for dairy farmers. Meabon pointed out that, for every dollar that dairy farmers contribute to a partnership project, the partner adds $6 so “partners are so important.”

McDonalds was the first fast food chain to introduce the round, plastic, re-sealable milk containers in it outlets and that project is still a success, she said. It started with just 15 containers a week per restaurant and that number has increased to 300 and growing and is “very impressive.”

“We know, as dairy farmers, that milk is naturally nutrient and now we’re getting the word out through McDonalds,” Meabon said, and new projects are on the drawing boards. “The industry is ever going,” she concluded, and we can find a lot of new things.”