Archive for the ‘Todays Dairy News’ Category

Entry Deadline For Forage Contest Nears

July 30, 2014 — The entry deadlines this year’s World Forage Analysis Superbowl is quickly approaching. The entry deadline for the standard and brown midrib corn silage is DairyBusiness1Thursday, August 14. The deadline for all other forage samples including dairy hay, haylage, bagelage, commercial hay and grass hay is Thursday, September 4. The official entry form and contest rules can be found at foragesuperbowl.org or by calling 920-336-4521. The cost to enter is $25 per sample and includes complete nutritional analysis of forage samples.

Over $22,000 in cash prizes will be awarded during the Mycogen Seeds Forage Superbowl Luncheon on Wednesday, October 1, including $1,500 for each category winner and quality counts award in silage and hay/haylage. Additional cash prizes will be awarded to the Grand Champion Forage, First-Time Entrant winner and second through fourth places in each category.

All winning entries will be on display in the Arena Building at World Dairy Expo. Finalists will be notified in September and invited to attend the Mycogen Seeds Forage Superbowl Awards Luncheon in Madison, Wis.

Cash awards are made possible thanks to generous sponsors, including Platinum Sponsor, Mycogen Seeds. Additional sponsors include Ag-Bag, Agri-King, Barenbrug USA, Blue River Hybrids, CROPLAN by Winield, Kemin, Kuhn North America, National Hay Association, NEXGROW alfalfa and W-L Research.

The World Forage Analysis Superbowl is organized in partnership with Dairyland Laboratories, Inc., DairyBusiness Communications, Hay & Forage Grower, U.S. Dairy Forage Research Center, University of Wisconsin-Madison and World Dairy Expo.

Cattle Numbers Shrink But Heifers Being Retained

July 29, 2014 — The cattle herd is still shrinking but more heifers are being retained. Cattle supplies remain tight, but a possible expansion is on the horizon. That’s the gist of two cattle USDAreports released by USDA Friday.

The number of cattle in calves was 95 million head, the lowest number since the series began back in 1973, according to USDA livestock analyst Shayle Shagam.

It’s not possible to make comparisons to 2013 numbers because of last year’s sequester, there was no July 1 Cattle Inventory report. However, numbers were down about three percent from two years ago.

Heifers being kept for beef-cow replacement are at 4.1 million head for July, down two percent from 2012. The number of heifers being kept for milk cow replacements was 3.9 million head, down about five percent from 2012.

The calf crop was 33.6 million head, which was down about two percent from 2012. It’s also the lowest calf crop since 1948.

Idaho Update

July 28, 2014 — While margins continue to be favorable for dairy producers, many are working on being on a better equity position. That includes dairy producers in Idaho where IdahoCowmargins remain strong compared to where they have been, according to Bob Naerebout, executive director of the Idaho Dairymen’s Assn.

“A lot of dairymen have taken on the position of paying down debt and getting in a better equity position, that’s where they want to be,” he said. “The Idaho dairy industry is like most states, and doing quite well.”

Despite better margins, producers continue to deal with issues both on and off the farm. The Environmental Protection Agency’s (EPA) water proposal has rattled the agriculture industry, and Idaho producers are watching the issue closely.

“The EPA has obviously opened up a hornet’s nest if you’re reading or listening to anything that’s going on with waters of the U.S.,” he said.  The good news is there is a lot of national legislative support for agriculture. He says it’s important for producers and other agriculture industry professionals to be involved in the ongoing comment period.

Earlier this month, several agriculture groups led by the National Milk Producers Federation asked EPA to withdraw its “interpretive rule concerning Clean Water Act permit exemptions for certain farming activities near wetlands. EPA and the Army Corps of Engineers released the rule earlier this year at the same time as their proposal to define “Waters of the U.S.” Comments on the definition can be submitted until Oct. 20, 2014.

Bullish or Bearish?

July 25, 2014 – Bullish or Bearish? That was the question posed that question to HighGround Trading dairy broker Eric Meyer in Friday’s DairyLine, questioning his analysis on lastcow_go2 Friday’s June Milk Production report which he said, fed the bears and not the bulls, but his take on Tuesday’s Cold Storage report gave a slightly different outlook.

“That’s a good question,” Meyer responded. “Milk production was up 1.9 percent in the 50-State total, with cow numbers continuing to grow,” he reasoned, “And that’s longer term a bit of a bearish signal.” He said that “We’ve been waiting for the herd growth to kick in and with the revisions that we’ve seen over the last few months and with that number going up, this is something we’ve been waiting for so more milk is on the horizon once we get past summer.”

“However,” Meyer cautioned, “When you look at this week’s Cold Storage report and you see both cheese and butter inventories still at severely shortage levels, the market here in the very near term needs to realize that, so we’ve seen prices on both cheese and butter move higher, with butter not too far away from its all time record high set in 1998,” ($2.81 per pound).

“Our conclusion here, Meyer warned, “Is that near term, we’re still a bit bullish as those inventories need to get figured out but longer term, when looking at the combination of higher herd growth and production here, cheaper feed costs as well as the international market really starting to tank, in our view and analysis, this does set up for lower prices later this year and into 2015.”      The scenario sounds reminiscent of the dairy industry that, when milk prices go up, so does milk production and when milk prices go down, milk production still goes up. Meyer responded, “That’s true and, with lower feed prices, producers will hang on to those cows for a lot longer than we would anticipate,” but he adds the caveat that “I am not anticipating a doomsday scenario like that of 2008-2009 but we think it’s smart for dairymen to look at that long term picture and get themselves prepared and protected for what could happen down the road.”

GMO’s: Farmers Are the Best Messengers

July 24, 2014 — As more states require labeling of foods made with genetically modified ingredients, Congress is being pressured to pass a law regulating the controversial

Chris Galen, NMPF

Chris Galen, NMPF

technology found in much of the U.S. food supply.

The National Milk Producers Federation (NMPF) continues to track the issue both from a policy and marketing standpoint after legislation was introduced to mandate the labeling of GMO’s, which NMPF opposes.

“We do support a contradictory bill that would establish a voluntary labeling system so that if companies did want to provide absence claims there is a process for doing so,” NMPF’s Chris Galen told DairyLine. “We support that legislation but that also looks like it won’t get through Congress yet.”

The House Agriculture Committee held a hearing to learn why farmers use GMO’s. A Vermont dairy farmer testified prompting NMPF to urge more farmers do the same because of the mounting pressure from the marketplace.

“We’re still seeing a lot of pressure being brought to bear on companies like Starbucks to disavow the use of GMO’s in the production of milk that goes into their coffee,” Galen said. “We’re seeing big dairy companies like Ben & Jerry’s make decisions to source some of their ingredients from GMO free supplies.”

Farmers are the best messengers when they communicate, not just the benefits of using GMO grains and oil seeds, but also explaining the meaning of GMO use to consumers. That’s because a lot of people assume that GMO’s only benefit Monsanto and that anyone who uses GMO’s is a factory farm.

“That’s why we need people like this Vermont farmer who testified in Congress, who is a small producer but still sees some benefits in at least having the choice of using GMO’s,” Galen said. “If we don’t get that message communicated then there is going to be fewer choices for farmers as well as consumers.”

To help farmers, NMPF and Dairy Management Incorporated (DMI) are training farmers this week to enhance their ability on social media and better communicate where food comes from, how it is produced, and who produces it. GMO’s are a front burner issue but there are other issues out there like antibiotics, growth hormones, and the argument between conventional food production and organic.

“We need to make certain we have the right tools in the hands of the right people to help carry those messages,” Galen concluded.

 

Corn Price Premiums Fading

July 16, 2014 — That’s the message from Dr. Darrel Good of the Department of Agricultural and Consumer Economics at the University of Illinois, in his recent FarmDocDaily posting. Corn was the primary focus of the agricultural commodity complex beginning in the 2006-07 marketing year and continuing through the 2012-13 marketing year. Corn prices during that period were supported by a rapidly growing domestic ethanol industry that required   more acres of corn and by relatively poor U.S. corn yields in 2010, 2011, and especially in 2012 that kept corn supplies very tight.

The dominant role of corn prices in the crop sector during that seven year period is revealed by the ratio of marketing year average prices. The ratio of the average farm price received for soybeans and corn was 2.83 for the 2005-06 marketing year and averaged only 2.28 for the period from 2006-07 through 2012-13. Similarly, the ratio of the average farm price received for wheat and corn was 1.71 for the 2005-06 marketing year and averaged only 1.34 for the period from 2006-07 through 2012-13. The ratio of the price of soybean meal in central Illinois and the average farm price of corn (on a per pound basis ) was 2.44 for the 2005-06 marketing year and averaged only 2.06 for the period from 2006-07 through 2012-13. Corn, wheat, soybean, and soybean meal prices during the seven year period were all high relative to livestock and livestock product prices as evidenced by declining livestock/feed price ratios. The ratio of specific livestock or livestock product prices to feed prices reached the lowest levels at different times that ranged from July 2012 through August 2013.

The premium of corn prices relative to other crop prices began to fade during the 2013-14 marketing year. Current estimates or forecasts for the 2013-14 marketing year reflect a soybean/corn price ratio of 2.92, a wheat/corn price ratio of 1.54, and a soybean meal/corn price ratio of 3.02. The soybean/corn price ratio will be higher than in the 2005-06 marketing year. Increasing livestock prices and declining feed prices have restored livestock/feed price ratios to the highest levels in at least four years.

The price of corn for the 2014-15 marketing year has declined by about $1.25 since early May and the price of corn relative to most other agricultural commodity prices has declined sharply. Based on the closing prices for December 2014 futures (November 2014 futures for soybeans) on May 9, 2014 and July 18, 2014 the soybean/corn price ratio increased from 2.46 to 2.87 and the soybean meal/corn price ratio increased from 2.18 to 2.60. The wheat/corn price ratio is about unchanged at 1.5.

The most dramatic changes have been in the livestock/corn price ratios. The lean hog/corn price ratio increased from 18.86 to 27.37, the live cattle/corn price ratio increased from 29.03 to 40.83, and the milk/corn price ratio increased from 3.73 to 5.02.

The soybean/corn price ratio is of particular interest. In the July WASDE report, the USDA forecast 2014-15 marketing year ending stocks of corn at 1.801 billion bushels, which represents a marketing year ending stocks-to use ratio of 13.5 percent. Similarly, marketing year ending stocks of soybeans were forecast at 415 million bushels, which represents a marketing year ending stocks-to-use ratio of 11.7 percent.

On the surface, similar stock levels for corn and soybeans would suggest that the soybean/corn price ratio would be near a more normal level of about 2.4. As indicated, the current new crop futures price ratio is near 2.9. Based on harvest delivery cash bids in central Illinois, the current soybean/corn price ratio is 3.05. Prices are still adjusting to supply and consumption prospects for the upcoming marketing year so that price ratios may continue to change. However, the declining and increasingly low price of corn relative to soybeans suggests that the market currently expects the marketing year-ending stocks-to-use ratio for corn to be much larger than projected by the USDA.

Such expectations are based on expectations of a much higher corn yield and a much larger corn crop than forecast in the July WASDE report. As suggested in last week’s newsletter, even a yield about five bushels higher than forecast by the USDA would not point to average prices as low as currently reflected in the market. Yield expectations are obviously increasing as the growing season progresses and widespread and persistent stressful weather is avoided.

If the 2014 corn crop reaches the lofty levels currently expected, the key to prices after harvest will be the response by users of corn. The low price of corn relative to livestock prices, relative to other feed ingredients, and relative to ethanol prices points to the potential for a surprisingly large consumption response. In that case, the seasonal pattern of corn prices during the 2014-15 marketing year would be expected to follow a more typical large crop pattern–lowest near harvest and then increasing as the  marketing year progresses.

The USDA’s first survey-based forecast of the size of the U.S. corn crop to be released in three weeks will go a long way in determining the likely level and pattern of corn prices during the year ahead.

Help For Rural Californians Suffering From Drought

by Tom Vilsack, Ag Secretary
July 19, 2014 — This week, I visited the small town of Cameron Creek Colony in Tulare County, California and saw firsthand the challenges drought poses, particularly for those living in rural communities.

About 10 percent of Cameron Creek Colony residents have no access to water because their wells have run dry. Still others have only intermittent access to water. Many are in danger

Ag Secretary Tom Vilsack

Ag Secretary Tom Vilsack

of losing access to water permanently in the near future. One long-time resident told me that until this drought, she’d never worried about water. Now, worrying about having enough water is constantly on her mind.

Fortunately, USDA is able to help this community, and 73,000 residents living in other communities across California, through $9.7 million in grants to help other rural California communities that have experienced a significant decline in the quantity or quality of drinking water due to an emergency. The nearby city of Farmersville, California is receiving a $500,000 USDA grant to construct pipelines connecting Cameron Creek Colony to the Farmersville water main and linking residents to the city water system. This will provide much-needed relief and the surety of a stable water supply for those living in Cameron Creek Colony.

These grants are triple the amount we committed to when President Obama and I visited California in February. I am proud of the work USDA Rural Development staff in California have done to get this funding to those in need and the work they have done with municipal leaders in these rural communities to help residents, businesses and agricultural producers.

This drought is devastating for those who live, work and raise their families in much of rural California and the western United States. It is threatening the survival of whole communities and livelihoods of folks throughout the state. A UC Davis study released earlier this week reported that the drought will cause losses of $880 million in crop revenue, $203 million in dairy and other livestock value and additional groundwater pumping costs of $454 million. The total statewide economic cost of the 2014 drought is estimated to be a staggering $2.2 billion, with a loss of more than 17,000 seasonal and part time jobs.

As the drought continues, let me assure you that the Obama Administration and USDA are committed to increasing investments in the nation’s water infrastructure to mitigate the impact of climate change and to ensure that all Americans have adequate, safe and reliable water supplies. For more information, visit www.usda.gov/drought.

June Milk Production Up 2%

July 18, 2014 — The Agriculture Department’s preliminary data issued this afternoon in its latest Milk Production report, shows June milk output in the top 23 producing states at 16.177 billion pounds, up 2 percent from cow_go2June 2013. The 50-state total, at 17.265 billion pounds, was up 1.9 percent from a year ago.

Revisions added 25 million pounds to the original May 23-state estimate, now reported at 16.9 billion pounds, up 1.6 percent from a year ago.    June cow numbers in the 23 states, at 8.57 million head, were up 11,000 from May. Year ago data was not available due to the Sequester.

June output per cow in the 23 states averaged 1,888 pounds, down from 1,976 pounds in May, but is the highest production per cow for the month of June since the 23 State series began in 2003. Again, year ago data was not available due to the Sequester.    The Second Quarter, April to June period, saw U.S. milk output hit 52.8 billion pounds, up 1.6 percent from the same period in 2013. The average number of milk cows during the quarter totaled 9.25 million head, up 39,000 from First Quarter, January to March, 2014.

Selected state data is posted below:

State          Cow #s             Milk lbs./Cow        State Change vs.’13

Arizona       193,000                       2,000                      +2.1%

California    1.779 mil                      1,995                     +1.7%

Colorado    145,000                        2,110                     +9.7%

Florida        123,000                        1,685                     +2.5%

Idaho          577,000                        2,045                     +2.1%

Illinois           95,000                        1,650                     +2.6%

Indiana       177,000                        1,830                     +1.6%

Iowa           207,000                        1,870                     +1.0%

Kansas       142,000                        1,845                     +7.4%

Mich.          386,000                        2,060                      +3.2%

Minn.          460,000                        1,655                      +0.1%

N Mex.        323,000                       2,130                      +1.3%

New York    615,000                       1,870                      +0.3%

Ohio            266,000                       1,695                      -1.5%

Oregon       125,000                        1,745                     +1.4%

Penn.          530,000                       1,665                      +0.2%

S Dakota       97,000                       1,825                     +5.4%

Texas          468,000                       1,850                     +8.3%

Utah              95,000                       1,890                     +4.0%

Vermont      131,000                       1,710                     +1.4%

Virginia          93,000                       1,600                    +4.2%

Wash.          274,000                       2,050                     +3.9%

Wisconsin    1.269 mil                     1,825                     +0.6%

We’re “Kinda Divorced” From World Market

July 18, 2014 — U.S. dairy product prices appear to amaze traders but clouds are appearing on the “price horizon.” Jerry Dryer’s recent Dairy and Food Market Analyst warned
that global milk production will overwhelm demand for the next five years, according to a recent analysis by Goldman Sachs.

We talked about those clouds in Friday’s DairyLine with FC Stone dairy broker, Dave Kurzawski. Kurzawski explained the jump in butter to a “tight market” and said cheese was

Dave Kurzawski, FC Stone

Dave Kurzawski, FC Stone

“acquiescing to that.” He explained that cream is very tight in the country as ice cream sales are good.

“We’re pretty much divorced from the world market,” Kurzawski stated, “But we are still alive and well on the butter market and probably aiming at that $2.50 (per pound) mark.”    Regarding the prediction on milk production, Kurzawski argued that it’s hard enough to look three or four months ahead as to what will happen to milk supply and demand but “They’re (Goldman Sachs) probably not too far off in the fact that we should expect more milk production in 2015 and probably more still in 2016. Without question, that’s the trend that we’re going to be on,” he said, “But right now I still think we’re going to be hovering around 1 1/2 percent for the balance of the year.”

Kurzawski doesn’t see any big moves in the U.S. milk supply but globally, New Zealand coming back strong and will come back strong in the new season “so we have to expect that but more than that is the demand out of China.”

Kurzawski said “It’s hard to believe when you see butter over $2.40 per pound and cheese over $2, at sustaining levels, so it’s easy to become complacent but reality is that China is currently overstocked on powder and anhydrous milkfat and that will eventually make its way through the global market chain and it’s going to come back to roost here in the U.S. with probably lower prices some time by the Fourth Quarter.”

NMPF Endorses Animal Outbreak Plan

July 17, 2014 – The National Milk Producers Federation earlier this week endorsed a draft plan for allowing the U.S. and Canada to cope with an outbreak of a serious foreign nmpflogoanimal contagion, such as foot-and-mouth disease, suggesting the plan is a template for similar plans involving other important dairy export markets. The plan, drafted by the Agriculture Department’s Animal and Plant Health Inspection Service, calls for the United States and Canada to recognize each other’s efforts to control an outbreak, while regionalizing how the outbreak is handled, so as to allow continued trade with disease-free areas of the country.

In comments filed with APHIS Monday, NMPF, the voice of 32,000 dairy farmers in Washington, noted that Canada is the second-largest export market for U.S. dairy products, and that an outbreak of a highly contagious animal disease such as FMD in either country could be catastrophic for the U.S. dairy industry.

“We applaud the Agriculture Department for working with its Canadian counterparts to prepare for a foreign animal disease outbreak,” said Jamie Jonker, NMPF’s vice president for sustainability & scientific affairs. “We fully support the draft plan and see it as an effective tool for dealing with an outbreak.”

The plan, officially termed a framework, calls for the two countries to cooperate in establishing quarantine areas that would be the focus of disease eradication efforts in an outbreak. Trade could then resume or continue in areas considered free of disease.

“The framework will facilitate continued trade between disease-free areas, while safeguarding animal health in both countries,” said Jonker. “NMPF encourages USDA to use this approach as a template for other countries that are important U.S. dairy export markets.” These countries include Mexico, China, Philippines, Indonesia, South Korea and Japan.

This is in contrast to another USDA proposal earlier this year, which NMPF determined had significant flaws, because it will allow imports of fresh beef from certain parts of Brazil which have a history of foot and mouth disease.

“We are happy to have Brazil export its enthusiasm for soccer,” said Jonker, “but the last thing we need is for that country to send us its FMD problems.”

Over the last decade, U.S. dairy exports have increased more than 20 percent annually and the United States is now a global leader in exports for products including cheese, skim milk powder, whey products and lactose.

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