Archive for the ‘Todays Dairy News’ Category

Market Recap – Cheese Rally During Short Week

April 18, 2014 — Last Friday’s small cheese price rally turned into a sustained recovery this week and reversed 3 weeks of declines. The cash blocks tacked on another 5.75¢ this morning on 4 sales, ending the Good Friday holiday-shortened week at $2.28/lb. The 1st 3 sales were at $2.2325/lb., with the 4th sale at $2.28/lb. An unfilled bid again rolled the barrels higher, this time 7¢, following yesterday’s 2¢ rise, and closed today and the week at $2.2575/lb., 2.25¢ below the blocks.

The blocks are up 11¢ on the week, 40¢ above a year ago, but 15.25¢ below their record March 24 peak. The barrels are up 17.75¢ on the week, 48.75¢ above a year ago, but 12¢ shy of their record high.

Four cars of block traded hands this week and none of barrel, the barrel price gains all came on unfilled bids so someone must be breaking out the barbecue grill and needs some cheese. The still climbing NDPSR-surveyed block price hit $2.4149/lb., up 1.6¢, while the barrels averaged $2.3440/lb., down 1.5¢.

FC Stone market analyst Ryan Cox wrote in this morning’s Insider Opening Bell that “International prices have weakened, but demand is decent. Retailers were reluctant to bump up prices.”

Cash butter was unchanged, after 3 days of loss, and closed at $1.89/lb. An offer at $1.90/lb. was again left on the board.   Cash butter resumed its decline this week, after holding all last week at $1.97/lb. It is down 8¢ this week but still 10.25¢ above a year ago. Seven carloads traded hands this week. NDPSR butter averaged $1.9839/lb., up 2.5¢.

Cash nonfat dry milk dropped 2.5¢ this morning on an offer, and closed the day and the week at $1.8650/lb., down4.25¢ on the week. Twelve carloads found new homes this week in the spot market.

Cox says “The nonfat market has been weak and buyers have been stepping aside, expecting prices to weaken further based on international markets.”

Dairy Margins Deteriorating

Dairy margins deteriorated since the end of March due to both weaker milk prices and higher feed costs, according to the latest Margin Watch from Chicago-based Commodity & Ingredient Hedging LLC.

Margins remain strong in nearby Q2 at the 96th percentile of the previous 10 years, while deferred margins are at or near the 90th percentile through the first quarter of 2015. While still very high from a historical perspective, milk prices have started to slip recently following weakness in dairy product values.

Both block and barrel cheese prices have generally been in retreat since late March while cash butter prices on the CME have similarly experienced weakness after flirting with $2.00/lb. recently.

The latest results of the Global Dairy Trade auction reflected the fifth consecutive drop in price, with all products declining except anhydrous milk fat.

Corn prices meanwhile have firmed recently in response to tighter stocks reflected in the April WASDE report along with slow planting progress. USDA reported corn ending stocks down 125 million bushels from March due to a similar increase in the export forecast, with the figure falling on the low end of trade expectations.    USDA also released the first crop progress report of the season, with corn plantings at 3% complete through April 13 vs. 6% on average for this point.

Soybean meal prices are also drawing support from USDA reporting soybean ending stocks down 10 million bushels from March, suggesting a continued tight supply of soybean meal through the remainder of the season.    For more details, log on to www.cihmarginwatch.com

Don’t Let Your Taste Buds Fool You

April 17, 2014 — “It’s not real dairy if it’s made from a bean, a seed, a nut, or a weed,” says DairyUS, the animated Real Seal character, in his latest video.

The video is a reminder to consumers that only real dairy products have the same nutrition they have come to know and love and imitation products don’t necessarily have the same nutritional benefits and shouldn’t be able to call themselves milk, cheese or yogurt.

That’s one of the reasons the National Milk Producers Federation (NMPF) took over the Real Seal program last year, according to Chris Galen. NMPF is using the RealSeal.com website to remind consumers that not all products made from imitation sources have the same nutritional content.
Milk includes vitamins A and D, calcium, potassium and a bevy of other nutrients including protein.

“A lot of these imitators are very skimpy on the protein content in particular,” Galen said.

The Real Seal program continues to grow. This year NMPF is setting up a Pinterest page for people to share cooking recipes and health and wellness information.

“That cries out a presence for the dairy’s Real Seal,” Galen reported. “To remind people that when they do go shopping, eat out or share recipes – dairy ingredients should be real ones and display the Real Seal.”

NMPF remains disappointed that the Food & Drug Administration hasn’t done anything to go after imitators who misuse terms like milk, cheese and yogurt.

“That’s why we need to have a proactive campaign, using something like the Real Seal as a designation that reminds people that only products displaying that seal are made from real dairy products,” he concluded.

For more info go to http://www.RealSeal.com

 

 

USDA Helps Expand Export Markets

April 16, 2014 –  Agriculture Secretary Tom Vilsack announced today that the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) awarded funding to more than 60 U.S. agricultural organizations to help expand commercial export markets for American products. The funding was made available through the 2014 Farm Bill. USDA will begin accepting applications for 2015 export development program funding on April 17, 2014.

“Now that Congress has passed the Farm Bill, USDA is moving quickly to implement our trade promotion programs to help open and expand opportunities for farmers, ranchers, and small businesses and build on the past five years of record agricultural exports,” said Vilsack. “These programs are an important investment in rural America. Every dollar we invest in trade promotion provides $35 in economic benefits.”

Through the Market Access Program (MAP), FAS partners with U.S. agricultural trade associations, cooperatives, state regional trade groups and small businesses to share the costs of overseas marketing and promotional activities that help build commercial export markets for U.S. agricultural products and commodities. The program, which focuses on consumer promotion, including brand promotion for small companies and cooperatives, is used extensively by organizations promoting fruits, vegetables, nuts, processed products, and bulk and intermediate commodities. Through MAP, FAS will provide $171.8 million to 62 nonprofit organizations and cooperatives. Participants contribute an average 171-percent match for generic marketing and promotion activities and a dollar-for-dollar match for promotion of branded products by small businesses and cooperatives.

The Foreign Market Development (FMD) Program focuses on trade servicing and trade capacity building by helping to create, expand and maintain long-term export markets for U.S. agricultural products. Under FMD, FAS will allocate $24.6 million to 22 trade organizations that represent U.S. agricultural producers. FAS partners with U.S. agricultural producers and processors, who are represented by non-profit commodity or trade associations called cooperators. The organizations, which on average contribute nearly triple the amount they receive in federal resources, will conduct activities that help maintain or increase the demand for U.S. agricultural commodities overseas.

Applications for 2015 export development program funding will be accepted beginning April 17, 2014. In addition to MAP and FMD programs, eligible organizations can apply for funding through the Technical Assistance for Specialty Crops (TASC) Program, Quality Samples Program (QSP) and Emerging Markets Program (EMP). The TASC program funds projects that address sanitary and phytosanitary barriers that prohibit or threaten the export of U.S. specialty crops. The 2014 Farm Bill amended the program to allow participants to address technical barriers to trade regardless of whether they are related to a sanitary or phytosanitary barrier. QSP helps agricultural trade organizations provide product samples to potential importers. EMP provides funding for technical assistance activities to promote exports to emerging markets. The programs were authorized as part of the 2014 Farm Bill.

Applicants are encouraged to apply via the Unified Export Strategy online application system. Information is available at http://www.fas.usda.gov/unified-export-strategy. Applications can also be emailed to podadmin@fas.usda.gov or hand-delivered to: USDA Foreign Agricultural Service, Office of Trade Programs, 1400 Independence Avenue, SW, Room 6512-S, Washington, D.C. 20250. New applicants are encouraged to email podadmin@fas.usda.gov to request more information. Applicants must have a Dun & Bradstreet (DUNS) number for federal assistance, which can be obtained online at http://fedgov.dnb.com/webform or by phone, (866) 705-5711.

USDA’s international market development programs have had a significant and positive impact on U.S. agricultural exports. An independent study released in 2010 found that trade promotion programs like MAP and FMD provide $35 in economic benefits for every dollar spent by government and industry on market development.

The past five years represent the strongest period for U.S. agricultural exports in the history of the United States. Farm exports in fiscal year 2013 reached a record $140.9 billion and supported 1 million jobs in the United States.

The following chart summarizes this year’s Market Access Program allocations:

Market Access Program – 2014 Allocations
Participant FY 2014 Allocation
American Hardwood Export Council, APA – The Engineered Wood Association, Softwood Export Council, and Southern Forest Products Association $8,996,182
Alaska Seafood Marketing Institute $3,560,749
American Peanut Council $2,235,570
American Pistachio Growers/Cal-Pure Pistachios, Inc. $1,380,409
American Seed Trade Association $229,118
American Sheep Industry Association $421,340
American Soybean Association $4,523,434
American Sweet Potato Marketing Institute $200,000
Blue Diamond Growers/Almond Board of California $4,729,064
Brewers Association, Inc. $600,895
California Agricultural Export Council $1,228,525
California Cherry Marketing and Research Board $519,189
California Cling Peach Growers Advisory Board $444,892
California Grape and Tree Fruit League $428,800
California Pear Advisory Board $442,081
California Prune Board $2,668,406
California Table Grape Commission $3,093,070
California Walnut Commission $3,902,619
Cherry Marketing Institute $204,115
Cotton Council International $15,423,937
Cranberry Marketing Committee $1,561,170
Distilled Spirits Council $401,630
Florida Department of Citrus $3,885,364
Food Export Association of the Midwest USA $9,637,643
Food Export USA Northeast $8,138,985
Ginseng Board of Wisconsin $167,539
Hop Growers of America $310,320
Intertribal Agriculture Council $642,528
Mohair Council of America $45,759
National Association of State Departments of Agriculture $3,533,072
National Confectioners Association $965,826
National Pecan Growers Council $487,035
National Potato Promotion Board $3,647,427
National Renderers Association $871,872
National Sunflower Association $1,119,044
National Watermelon Promotion Board $290,367
New York Wine and Grape Foundation $484,886
Northwest Wine Promotion Coalition $988,092
Organic Trade Association $746,912
Pear Bureau Northwest $2,926,873
Pet Food Institute $1,361,288
Raisin Administrative Committee $827,922
Southern United States Trade Association $5,874,329
Sunkist Growers, Inc. $2,372,577
Synergistic Hawaii Agriculture Council $388,412
The Popcorn Board $369,806
U.S. Apple Export Council $712,727
U.S. Dairy Export Council $4,084,503
U.S. Dry Bean Council $1,147,741
U.S. Grains Council $6,731,882
U.S. Hide, Skin and Leather Association $49,548
U.S. Livestock Genetics Export, Inc. $1,538,250
U.S. Meat Export Federation $14,073,511
U.S. Wheat Associates $5,973,322
USA Dry Pea and Lentil Council $850,359
USA Poultry and Egg Export Council $4,952,183
USA Rice Federation/U.S. Rice Producers Association $2,735,162
Washington Apple Commission $4,930,752
Washington State Fruit Commission $1,561,810
Welch Foods, Inc. $834,411
Western U.S. Agricultural Trade Association $8,097,508
Wine Institute $6,322,046
Total $171,874,788

The following chart summarizes this year’s Foreign Market Development Program allocations:

Foreign Market Development Program – 2014 Allocations
Cooperator FY 2014 Allocation
Almond Board of California $125,045
American Hardwood Export Council, APA – The Engineered Wood Association, Softwood Export Council, and Southern Forest Products Association $2,655,416
American Peanut Council $533,746
American Seed Trade Association $185,722
American Sheep Industry Association $123,798
American Soybean Association $5,198,548
Cotton Council International $3,199,712
Cranberry Marketing Committee $153,754
Leather Industries of America $210,730
National Renderers Association $682,463
National Sunflower Association $212,505
North American Millers Association $54,594
U.S. Dairy Export Council $442,188
U.S. Dry Bean Council $100,313
U.S. Grains Council $2,439,510
U.S. Hide, Skin and Leather Association $91,952
U.S. Livestock Genetics Export, Inc. $535,518
U.S. Meat Export Federation $1,081,750
U.S. Wheat Associates $4,176,733
USA Dry Pea and Lentil Council $157,661
USA Poultry and Egg Export Council $1,014,940
USA Rice Federation $1,267,187
Total $24,643,785

Visit www.fas.usda.gov to learn more about the Market Access Program, the Foreign Market Development Program and other FAS programs.

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USDA is an equal opportunity provider and employer. To file a complaint of discrimination, write to USDA, Assistant Secretary for Civil Rights, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue, S.W., Stop 9410, Washington, DC 20250-9410, or call toll-free at (866) 632-9992 (English) or (800) 877-8339 (TDD) or (866) 377-8642 (English Federal-relay) or (800) 845-6136 (Spanish Federal-relay).

 
 

Cheese Spread Narrows

April 15, 2014 — The spread between the block and barrel cheese price was a concern up until yesterday, when the barrel price shot up 8 ¾-cents to narrow the spread with the

Bill Brooks, FC Stone

Bill Brooks, FC Stone

blocks to under two cents.

“With the amount of price decline that we have seen with both the blocks and barrels the last couple of weeks it’s not surprising for us to get a little bit of a correction,” FC Stone’s Bill Brooks told DairyLine.

Even though prices may be steep for cheese buyers, they may want to get some product locked up bringing cheese prices higher for the time being.

“I don’t know if the higher prices are going to have much life to it,” Brooks said. “It is warming up and cows will be producing more, so normally we would see prices dropping off.”

Still, it’s nice to see a bump in prices after dropping nearly 20 cents in the past week.

It’s a light week for USDA reports this week as we gear up for a busy week next week. USDA will release Milk production, Livestock Slaughter, Cold Storage and Commercial Disappearance reports. We’ll also get our Class I base price for May next week.

Inspiring Tomorrow’s Dairy Leaders Today

April 14, 2014 — There’s an event that brings together the best and the brightest collegiate students who are diligently studying for a career in the dairy industry: The North AmericanNAIDC Intercollegiate Dairy Challenge.

264 dairy science students from 37 universities participated in the unique two-day competition at Ohio State University earlier this month.

“Certainly an array of students that are heavily interested in dairy science, production and dairy processing,” Professor Maurice Eastridge reported.

The competition challenges those institutions to inspire their students with a high quality education – empowering them with the resources for real-world success.

Six different dairy farms were used this year with first place awards presented to Cal Polytechnic State University, Cornell, Penn State, and the University of Guelph.

This challenge incorporates all facets of a working dairy business in a forum that’s interactive, educational and fun. The NAIDC is the competition for tomorrow’s dairy leaders.

“Consistently it has been commented that those who interact with these young people that the industry is in good hands,” Eastridge said. “There sharp individuals, they’re energetic and certainly the dairy industry has a great talent.”

He credited the success of the event came from support by host farmers and agribusiness companies who donated their time and money to make it an inspiring program for future dairy leaders. The North American Intercollegiate Dairy Challenge moves to Syracuse, NY the next two years.

The Sky is NOT Falling

April 11, 2014 — Go away Chicken Little, Jerry Dryer, editor of the Dairy and Food Market Analyst says it’s a “classic cheese market. It overreacts, going in either direction.”    Speaking

Jerry Dryer Dairy Market Analyst

Jerry Dryer
Dairy Market Analyst

in Friday’s DairyLine, Dryer said “It was probably too high, too long and now we’re facing a correction.” He added that a “swift correction like this rather than Chinese water torture, a quarter-cent per day for two months makes for a better market,” and he predicts a cheese market floor above $2 per pound. Ditto on butter and nonfat dry milk, according to Dryer, and he believes there’s still strength in the whey price so “the sky is not falling.”

Switching to Wednesday’s World Agricultural Supply and Demand Estimates report, Dryer said the entire report caught his attention because of the significant upward price “They now expect the cheese price to averaged about $2 per pound,” Dryer said, “Twelve cents more than they were forecasting just a month ago.” Their butter forecast was raised by 15 cents, to $1.80 per pound for the year, he said, but they held their nonfat dry milk forecast at $1.85, and bumped up their whey forecast to 63 cents “So that gives us an All Milk price around $23.00 per hundredweight,” he concluded.

Milk Output and Prices Raised

April 10, 2014 — USDA’s latest World Agricultural Supply & Demand Estimates report released Wednesday, raised projected 2014 milk production estimates from a month earlier cow_go2as strong returns are expected to encourage a more rapid expansion in cow numbers and increased milk per cow. Fat-basis exports were raised on higher sales of cheese and butter, but the skim-solids export forecast was lowered on weaker-than-expected nonfat dry milk (NDM) sales. Skim-solid imports were reduced slightly due to lower imports of milk protein concentrate and casein.

• 2014 production and marketings were projected at 206.1 billion lbs. and 205.2 billion lbs., respectively, up about 400 million lbs. and 500 million lbs. respectively from last  month’s projections. If realized, 2014 production and marketings would be up 2.4% from 2013.

Product price forecasts for cheese, butter, and whey were higher, supported by strong demand and price strength to date. However, the NDM price was unchanged at the midpoint as export demand is weaker than expected. Class III and Class IV prices were raised on higher product prices. The all milk price was forecast at $22.55-23.05 per cwt.

Dairy Price Forecasts Estimated Product Forecasts

Product              2012  2013 2014    

Class III ($/cwt) 17.44 17.99 20.40-20.90

Class IV ($/cwt) 16.01 19.05 21.05-21.65

All milk ($/cwt) 18.53  20.01 22.55-23.05

Cheese ($/lb.) 1.7076  1.7683 1.9850-2.0350

Butter ($/lb.) 1.5943    1.5451 1.7600-1.8400

NFDM ($/lb.) 1.3279    1.7066 1.8300-1.8700

Dry whey (¢/lb.) 59.35 0.5902 0.6150-0.6450

 

WASDE Offers Lots to Feed Off Of

U.S. feed grain ending stocks for 2013/14 are projected lower this month, according to today’s World Agricultural Supply and Demand Estimates report, with reductions for corn, barley, and oats. A 125-million-bushel increase in projected corn exports reduces corn ending stocks by the same amount. Continued strong export sales and a rising

weekly shipment pace for U.S. corn during March support the higher expected export level as does an increase in projected global corn demand.

The 2013/14 season-average farm price for corn is raised 10 cents at the midpoint with the projected range also narrowed to $4.40 to $4.80 per bushel, compared with $4.25 to $4.75 per bushel last month.

U.S. soybean supplies for 2013/14 are projected at 3.49 billion bushels, up 30 million

on increased imports. Imports are projected at a record 65 million bushels based on trade reported through February and prospective large shipments from South America during the second half of the marketing year. Soybean exports for 2013/14 are increased 50 million bushels to 1.58 billion reflecting record year-to-date shipments and large outstanding sales.

Despite relatively high prices and record harvests in South America, U.S. exports have remained strong, especially to China, where imports from the United States have already exceeded the previous marketing-year record. The soybean crush is reduced 5 million bushels to 1.685 billion with lower domestic soybean meal consumption more than offsetting a small increase in projected soybean meal exports. Seed use

is raised in line with the record plantings reported in the March 31 Prospective Plantings report, while residual use is reduced based on indications from the March 31 Grain Stocks report. U.S. soybean ending stocks are projected at 135 million bushels, down 10 million from last month.

Projected prices for soybeans and soybean products are all raised this month. The projected range for the season-average soybean price is raised 5 cents at the midpoint to 12.50 to $13.50 per bushel. Soybean oil prices are projected at 38 to 40 cents per pound, up 1.5 cents at the midpoint. Soybean meal prices are projected at $460 to $490 per short ton, up 5 dollars at the midpoint.

  

WASDE Beef Update/Prices Remain Strong

The 2014 forecast of total red meat and poultry production was lowered from last month in today’s World Agricultural Supply and Demand Estimates report, as higher beef production is more than offset by lower pork, broiler, and turkey production. For beef, production is forecast higher as lower forecast slaughter in the first quarter is more than offset by higher slaughter in the second half. The larger forecast second-half slaughter reflects larger placements of cattle during the first half.

The beef import forecast for 2014 is raised from last month as demand for processing-grade beef remains strong and the export forecast is raised on continued strong sales to Asian markets.

   Cattle prices for 2014 are raised from last month, reflecting continued price strength for fed cattle.                                              Source:?USDA WASDE report, April 9, 2014

 

NMPF Praises GMO Labeling Bill

April 10, 2014 — The National Milk Producers Federation this week applauded introduction of legislation establishing federal standards for the safety and labeling of foods containing genetically modified ingredients (GMOs).

Under the bill, the Safe and Accurate Food Labeling Act, introduced by Rep. Mike Pompeo (R-KS), the Food and Drug Administration will set standards for companies that wish to label their products as containing or not containing GMOs. In addition, FDA is required to conduct a safety review of all new genetically modified traits and could mandate labeling if there is a health, safety or nutrition issue with a particular ingredient.  The legislation is co-sponsored by Reps. G.K. Butterfield (D-N.C.), Marsha Blackburn (R-TN), Jim Matheson (D-UT) and Ed Whitfield (R-KY).

“Rather than create a patchwork of state policies, what this legislation would do is deal with this important issue at the national level,” said Jim Mulhern, President and CEO of NMPF.  “And since there is no reason for Congress and the FDA to require mandatory labels on foods produced through GMOs, we need this approach instead:  clarifying how companies can voluntarily label their products in a way that reduces confusion at the consumer level.”

Mulhern added that “genetically modified ingredients have been used in foods in this country for two decades. They add desirable traits so that crops are more plentiful and require less water and fewer pesticides.  If companies want to highlight their presence, they should be able to do so in a way that enhances trust in the food supply.”

The GMO labeling legislation also addresses another problem by ordering the FDA to define the term “natural” when used on food labels. Right now, there is no uniform definition of natural when applied to foods.

Up to 80 percent of the food available in the United States contains genetically modified ingredients. Agencies including the FDA, the U.S. Agriculture Department, the National Academy of Sciences and the World Health Organization have found no negative health effects from consuming GMOs.

The National Milk Producers Federation, based in Arlington, VA, develops and carries out policies that advance the well-being of dairy producers and the cooperatives they own. The members of NMPF’s cooperatives produce the majority of the U.S. milk supply, making NMPF the voice of more than 32,000 dairy producers on Capitol Hill and with government agencies. Visit www.nmpf.org for more information.

Sign Up Announced For Livestock Disaster Assistance

April 9, 2014 –The U.S. Department of Agriculture (USDA) announced Monday that farmers and ranchers can sign-up for disaster assistance programs, reestablished

Ag Secretary Tom Vilsack

Ag Secretary Tom Vilsack

and strengthened by the 2014 Farm Bill, beginning Tuesday, April 15, 2014. Quick implementation of the programs has been a top priority for USDA.

“These programs will provide long-awaited disaster relief for many livestock producers who have endured significant financial hardship from weather-related disasters while the programs were expired and awaiting Congressional action,” said Agriculture Secretary Tom Vilsack. “President Obama and I prioritized the implementation of these disaster assistance programs now that the Farm Bill has restored and strengthened them.”

The Livestock Indemnity Program (LIP) and the Livestock Forage Disaster Program (LFP) will provide payments to eligible producers for livestock deaths and grazing losses that have occurred since the expiration of the livestock disaster assistance programs in 2011, and including calendar years 2012, 2013, and 2014.

Enrollment also begins on April 15 for producers with losses covered by the Emergency Assistance for Livestock, Honeybees, and Farm-Raised Fish Program (ELAP) and the Tree Assistance Program (TAP).

  • LIP provides compensation to eligible livestock producers that have suffered livestock death losses in excess of normal mortality due to adverse weather. Eligible livestock includes beef cattle, dairy cattle, bison, poultry, sheep, swine, horses, and other livestock as determined by the Secretary.
  • LFP provides compensation to eligible livestock producers that have suffered grazing losses due to drought or fire on publicly managed land. An eligible livestock producer must own, cash lease, or be a contract grower of eligible livestock during the 60 calendar days before the beginning date of the qualifying drought or fire in a county that is rated by the U.S. Drought Monitor as D2, D3, or D4.
  • ELAP provides emergency assistance to eligible producers of livestock, honeybees and farm-raised fish that have losses due to disease, adverse weather, or other conditions, such as blizzards and wildfires, as determined by the Secretary of Agriculture.
  • TAP provides financial assistance to qualifying orchardists and nursery tree growers to replant or rehabilitate eligible trees, bushes and vines damaged by natural disasters.

USDA Farm Service Agency (FSA) employees have worked exceptionally hard over the past two months to ensure eligible farmers and ranchers would be able to enroll to receive disaster relief on April 15.

To expedite applications, all producers who experienced losses are encouraged to collect records documenting these losses in preparation for the enrollment in these disaster assistance programs. Information on the types of records necessary can be provided by local FSA county offices. Producers also are encouraged to contact their county office ahead of time to schedule an appointment.

For more information, producers may review the 2014 Farm Bill Fact Sheet, ELAP and TAP fact sheets online, or visit any local FSA office or USDA Service Center.

 

Softening World Market is Cause for Concern

April 8, 02014 — February was another good month for U.S. dairy exports but a softening world market is cause for concern, according to Alan Levitt with U.S. Dairy Export Council

Alan Levitt, USDEC

Alan Levitt, USDEC

(USDEC).

On a daily-average basis, U.S. export volumes in February were the highest in six months. By volume, U.S. exports were up 19% from last year and by value, exports were up 37%.

“We saw very good sales of cheese, whey proteins and butterfat,” he said

Mexico remains our largest customer, but like last year, our fastest-growing markets are Southeast Asia, China and the Middle East/North Africa region.

“However, the one number that makes me nervous is the slowdown in milk powder shipments in the last few months,” Levitt said.

From April-October last year, The U.S. moved more than 51,000 tons of NDM/SMP per month. But in the last four months, just 41,000 tons per month were shipped.

“With less powder going overseas, inventories are building,” he said .

In just three months, December, January and February – U.S. NDM stocks increased 59%.

The recent drops in the Global Dairy Trade auction reflect the changing sentiment in the world market, according to Levitt.

“It appears we plateaued a couple months ago and now we’re moving in a new direction,” Levitt reported. “World milk supplies have come on like gangbusters over the last 8-9 months, and after buying up everything in sight since last fall, China seems to be satisfied for the time being.”

In the last six weeks the overall on GDT price index has dropped 18%. It’s the lowest it’s been in more than 13 months. And even though the results of the auction just reflect product traded on the auction, Levitt said it’s a precursor to lower prices in the U.S. market in the months ahead.

“We’ve already seen all the U.S. powder price series start to slide in the last few weeks. But the SMP auction price is now well-below any of the U.S. price series, so our prices are going to continue to adjust downward,” he concluded.

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