DairyBusiness Update for Jan. 31, 2013

Editor’s note: Catching up after a week of travel.

California federal order, processor panel discussions planned at World Ag Expo

California’s three major dairy cooperatives will sponsor a seminar concerning the possibility of California joining the federal milk marketing order system. The seminar will be held in conjunction with World Ag Expo, in Tulare, Calif.

The federal order meeting will take place Wednesday, Feb. 13, 9:30 a.m., in the VIP Tent on Expo Lane (between S and T Streets at the International Agri-Center).

Pete Garbani of Land O’Lakes will moderate the discussion. Panelists will include Tom Wegner, Land O’Lakes; Eric Erba of California Dairies; and Elvin Hollon of Dairy Farmers of America. 

A day later, a panel discussion with milk processors will be held as part of the World Ag Expo Dairy Seminar schedule. The session will be held Thursday, Feb. 14, 11 a.m.-noon, in Building 3. Invited participants include board members and executives from California Dairies Inc. (CDI), Dairy Farmers of America (DFA), Hilmar Cheese and Land O’Lakes. They will discuss current industry topics and issues, including milk procurement, base allocation, milk pricing and more. 


September 2012 MILC payments to begin Feb. 5

USDA’s Farm Service Agency (FSA) issued additional details regarding the Milk Income Loss Contract (MILC) program.

• The “relief period” for dairy producers with annual production above the payment cap of 2.985 million lbs. and wishing to change their “start month” in FY ’13 is Feb. 1-28.

• The enrollment period for new dairy operations started before Feb. 1, 2013 is Feb. 1-28.

• The retroactive payment rate for September 2012 milk marketings is approximately 59¢/cwt. on eligible milk. FSA will begin making payments on Feb. 5.

• The retroactive payment rate for October 2012 milk marketings is approximately 2¢/cwt. on eligible milk. But, before the October MILC payment can be issued, dairy farmers must complete a new form, CCC-933 Average Adjusted Gross Income (AGI) Certification and Consent to Disclosure of Tax Information, available at local USDA Service Centers or online at www.fsa.usda.gov/ccc933.

For more information on MILC, contact a local FSA county office.


Gould updates MILC payment projections

Dr. Brian Gould, University of Wisconsin-Madison dairy economist, updated Milk Income Loss Contract (MILC) program payment projections, based on milk and feed futures prices at the close of trading on Jan. 31.

Estimated payments under the program will be: January – 11.41¢/cwt.; February – 52.63¢/cwt.; March – 73.60¢/cwt.; April – 57.20¢/cwt.; May – 46.29¢/cwt.; June – 36.91¢/cwt.; and July – 26.85¢/cwt.

For more information and regular updates, visit Gould’s “Understanding Dairy Markets” website:  http://future.aae.wisc.edu/collection/software/current_MILC_est.xls.


Dairy cow prices headed in opposite directions

January cull dairy cow prices strengthened, while replacement cow prices fell for a fifth consecutive quarter, according to USDA’s Ag Prices report, released Jan. 31.

Estimated U.S. January 2013 cull cow prices (beef and dairy combined) averaged $79.50/cwt., up $2.20 from December’s revised estimate, and $4.90/cwt. more than January 2012.

Meanwhile, U.S. quarterly replacement dairy cow prices declined slightly in January 2013, averaging $1,370 head, down $20 from October 2012 and $90 less than January 2012. Among major dairy states, the high average price was $1,600/head in Michigan, and topped $1,500 in Arizona, Colorado and Virginia. Lows were $1,200 in California and Missouri.

Since peaking at $1,480/head in July/October 2011, average replacement cow prices have declined five consecutive quarters. January 2013’s average is the lowest quarterly average since January 2011.


USDA adding ‘Greek’ pilot

Following a petition from Sen. Chuck Schumer (D-N.Y.), USDA will begin a pilot program to test the demand and cost-effectiveness of including strained or “Greek” yogurt in school meal programs. USDA Undersecretary for Food, Nutrition and Consumer Services Kevin Concannon said the pilot would categorize Greek yogurt as an additional protein option – allowing it as a meat alternative in school meals.

USDA will first seek information from potential yogurt vendors and producers on their ability to supply yogurt, including types and quantities available, and information on pricing. USDA will gauge interest from New York and other state school boards to use USDA entitlement dollars toward acquiring this product. If there is interest, USDA will solicit for competitive bids. USDA expects to complete this process so that deliveries of yogurt could begin as early as April 2013.


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