PDPW’s Dairy Profit Symposium is scheduled for December 9 & 10 at Crowne Plaza Hotel, in Madison, WI.

Executive Director Shelly Mayer talks about it, in this podcast.

Standard Podcast [ 2:33 ] Play Now | Play in Popup | Download

Click here for printable flyer

Register for the Profit Symposium

The symposim features the following experts:

- Dan Basse, President, AgResource

- Dr. Freddie Barnard, Professor and Extension

Economist, Purdue University

- Tim Swenson and Sara Swenson, Lookout Ridge

Consulting Group

- Dr. Michael Boehlje, Distinguished Professor of Ag

Economics, Purdue University

- Dr. Mark Stephenson, Center for Dairy Profitability,

University of Wisconsin, and

- Dr. Kevin Bernhardt, University of Wiscosnin

Extension and Center for Dairy Profitability, Farm and Risk Management

 More information is availalbe at http://www.pdpw.org

The beef checkoff got high marks in Wednesday’s DairyLine broadcast from Vermont dairy producer Jane Clifford. “The beef checkoff is very important to dairy producers,” Clifford said, “Because a portion of our income comes from cull cows so that’s a sale of beef and it’s a significant portion so it’s important that the beef industry is a strong industry.”  

Jane Clifford [ 1:13 ] Play Now | Play in Popup | Download

The Clifford dairy has been in husband Eric’s family for eight generations, she said, and is medium sized, milking about 220 cows three times a day. She said they are very thankful to be dairy producers and take it seriously. That means good care for the animals and of the land because “those are our assets that we are using for a short period of time and then somebody else will use them.”  

She believes that message is being taken to consumers via the beef checkoff and admitted to be frustrated when people suggest that farmers don’t take good care of their animals or land. “Those are our biggest assets,” she concluded, “And if we don’t take good care of them, then we won’t be in business.”

Butter took a 9-cent hit and cheese moved higher in Monday morning trading at the Chicago Mercantile Exchange as the markets awaited Monday afternoon’s release of the October Cold Storage report.  

The University of Wisconsin’s Dr. Brian Gould said in Tuesday’s DairyLine that the volatility we have seen in the past continues and, if you couple what’s happening in the grain markets with what’s happening in the dairy markets, “volatility is here to stay, I think, and from day to day it’s hard to say when things are going up and when things are going down.”  

That said, Gould pointed out that, starting with the December contract, a subsidized revenue insurance program that being made available to U.S. dairy producers referred to as the Livestock Gross Margin program, and significant premium subsidies are available, starting with the December contract. 

The program is getting a lot of interest from producers across the U.S., according to Gould, who believes the subsidizes make it a very reasonable program to look at in protecting revenue and not just protecting milk prices. Gould has complete details at his website at http://future.aae.wisc.edu/lgm_dairy.html or Google it at Understanding Dairy Markets.

October butter stocks totaled 108.2 million pounds, down 21.8 million pounds or 17 percent from September and 82.4 million pounds or 43 percent below October 2009, according to preliminary data in the Agriculture Department’s latest Cold Storage report issued this afternoon.   

The October American cheese inventory, at 638.7 million pounds, was unchanged from September, but 58.9 million pounds or 10 percent above a year ago. September revised estimates were raised nearly 1.2 million pounds.

Total cheese stocks amounted to over 1.037 billion pounds, unchanged from September, but 68 million pounds or 7 percent above a year ago. September revised estimates were lowered nearly 4 million pounds.

Pennsylvania dairy producer and chairperson of the National Dairy Board, Paula Meabon set the record straight in Monday’s “DMI Update.” Meabon responded to some recent inaccurate reporting from the New York Times and various other media regarding the dairy check off. 

She stated that, as a dairy farmer, she wants everyone to know that the dairy check off is first and foremost a program of dairy farmers. It’s for dairy farmers, and is directed by dairy farmers and none of the funding is from USDA or taxpayer dollars, it’s all paid by dairy farmers through their check off program. 

“Dairy farmers promote their own program,” she said. “We pay for our own programs,” and she added that DMI program are directed to the health and wellness of all consumers, children and adults but the mission of the dairy check off is to increase demand for U.S. dairy products on behalf of dairy farmers. 

She reported that fifty percent of the checkoff budget goes toward the advancement of health and wellness, be it the “Fuel Up to Play 60” campaign or the development of low fat, lower sodium cheese, or the reformulation of chocolate milk to fit the government’s dietary guidelines. For more information, log on to www.dairycheckoff.com.

The December Federal order Class I base milk price was announced this morning by USDA at $16.96 per hundredweight, down 28 cents from November, but still $2.97 above December 2009. The 2010 average was $15.35, up from $11.48 in 2009. The Class IV advanced pricing factor remained “the higher of” in driving the Class I value and there will be no MILC payment to producers.

The two-week NASS-surveyed butter price averaged $2.0995, down 9.5 cents from November. Nonfat dry milk averaged $1.1903, up 1.5 cents. Cheese averaged $1.7063, down 6.3 cents, and dry whey averaged 37.16 cents, up a penny.

Milk production in the 23 major States during October totaled 14.8 billion pounds, up 3.3 percent from October 2009. September revised production at 14.5 billion pounds, was up 3.7 percent from September 2009. The September revision represented an increase of 6 million pounds or less than 0.1 percent from last month’s preliminary production estimate.

Production per cow in the 23 major States averaged 1,767 pounds for October, 47 pounds above October 2009.

The number of milk cows on farms in the 23 major States was 8.37 million head, 52,000 head more than October 2009, but unchanged from September 2010.

California production was up 4.3 percent from a year ago, with 20,000 fewer cows. However, output per cow gained 100 pounds. Wisconsin was up 0.8 percent, thanks to 6,000 more cows, and a five pound gain per cow. New York was up 4.7 percent, despite 3,000 fewer cows but output per cow was up 85 pounds. Idaho was up 6.9 percent, on 25,000 more cows and a 40 pound increase per cow. Pennsylvania was up 2.9 percent. Cow numbers were up 2,000 and output per cow was up 40 pounds. Minnesota was down 0.1 percent, despite 1,000 more cows., however there was a 5 pound loss per cow.

The biggest increase was in Oregon , up 11.4 percent. Arizona was next, up 9.5 percent, and Kansas was third highest in milk production, at 8.2 percent.

The biggest decline was in Missouri, down 7.3 percent, due to 8,000 fewer cows, but output per cow was up 10 pounds from a year ago. Iowa was next, down 3 percent with 11,000 fewer cows, but output per cow was up 35 pounds. Illinois had the third lowest at 2.5 percent.

Congress is back in town for a lame duck session. National Milk’s Chris Galen said in Thursday’s DairyLine that “The duck may be able to fly in a couple areas.” Taxes are the big issue right now, he said, in particular the possible extension of the Bush tax cuts.

An agreement appears to be in the works, according to Galen, but NMPF is particularly concerned about estate taxes because, currently there isn’t any, but they will come back to life with a pretty high assessment rate in about six weeks.

One other area that National Milk is monitoring is the Senate approved Child Nutrition Act, which still awaits action by the House. Another piece of legislation is the Food Safety bill. The House has passed its version but the Senate still has to take it up. There will not be any action on dairy policy per se, Galen said. That will likely wait until next year, he concluded.

Downes-O’Neill dairy broker Dave Kurzawski echoed some of Mary Ledman’s remarks regarding barrel cheese in Wednesday’s broadcast. Kurzawski viewed the actual trading Tuesday at the Chicago Mercantile Exchange where the blocks inched a half-cent higher, to $1.4175 per pound, while the barrels rolled down hill another three quarters, to $1.35.

The wide spread is not the biggest we’ve ever seen, he said, but “a little unusual” and a “Tale of Two Cities.” There seems to be good demand on the block side of things, he said, but the barrels seem to be languishing as there seems to be plenty of barrel product available in the country right now.”

Holiday buying is a part of what’s going on, according to Kurzawski, but the interesting part is that “Buyers, by and large, have taken a step back from the market the past month, which historically is a very good demand time of year.” The prices have come down substantially, he said, so “We’re starting to see some stability in the marketplace. I suspect you’ll see those buyers step back in.”

As to risk management strategy for dairy producers; Kurzawski recommends a “wait and see attitude” and consider buying put options. “The margins really, truly are not very good,” he admitted, “Even with the weakness that we have seen recently in corn. The best bet here is to look at being a put option buyer going forward.”

The Agriculture Department releases its preliminary October milk production estimate Thursday afternoon. We will post complete details here as soon as possible.

Friday morning, USDA announces the December Federal order Class I base milk price. Market analyst, Alan Levitt, predicts it will come in around $16.98 per hundredweight.That would be a 26-cent drop from November but would be $2.99 above December 2009.

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.