DairyBusiness Update: February 18, 2014

 Global Dairy Trade Auction Price Index Down 1.2%
   Today’s Global Dairy Trade (GDT) auction saw the weighted average for all products slip 1.2% from the February 4 event, led by a 5.4% drop in milk protein concentrate and a 4.5% drop in anhydrous milkfat. Butter was down 3.8%, Cheddar cheese was off 1.7%, Skim milk powder was off 0.1%, and whole milk powder was down 0.3%. The only gain today was in buttermilk powder, up 3.1%..
   The average butter price equated to about $2.0802/lb. U.S., down from $2.1523/lb. in the Feb. 4 event ($2.0294/lb. on 80%, down from $2.0998). The Cheddar average was $2.1977/lb., down from $2.2385/lb.; skim milk powder, $2.1682, up from $2.1527 per pound, and the whole milk powder average was $2.2675/lb., down from $2.2702 in the last event.
   The GDT announced last week that Land O'Lakes is offering two additional SMP specs, Low Heat Upgraded and Medium Heat Upgraded. The addition of upgraded specifications enables GDT bidders with unique testing requirements based on ship-to destinations to import Land O'Lakes product with ease. The product bulletins are available via the Resources page of the GDT website
                                                                                 Source: GDT & INTL FCStone

CWT Accepts 21 Export Assistance Requests
Cooperatives Working Together (CWT) accepted 21 requests for export assistance today from Bongards Creameries, Dairy Farmers of America, Land O’Lakes, Maryland & Virginia Milk Producers Cooperative, Northwest Dairy Association (Darigold) and Tillamook County Creamery Association to sell 4.149 million pounds of Cheddar, Gouda and Monterey Jack cheese, and 848,780 pounds of 82% butter to customers in Asia, Central America, Europe, the Middle East and North Africa.
   The product will be delivered through April and brings CWT’s 2014 cheese export sales to 20.538 million pounds, plus 6.244 million pounds of butter, and 698,865 pounds of whole milk powder to 18 countries on four continents. These sales are the equivalent of 330.3 million pounds of milk on a milkfat basis, according to CWT.

Higher Milk Prices Forecast
The Agriculture Department’s Livestock, Dairy, and Poultry Outlook, issued Friday, showed increased projections for 2014 Class III and Class IV milk prices from last month’s report. The First Quarter Class III price was pegged at $21.30 per hundredweight (cwt.), up from the $19.75 expected a month ago. The Second Quarter Class III is $19.25/cwt., up from $18.20. Friday’s Class III futures portended $19.36. The year’s average, at $18.70, was up 50 cents from last month’s projection, and compares to $17.99/cwt. in 2013 and $17.44 in 2012.
   The First Quarter Class IV milk price was pegged at $22.30/cwt., up from $21.75 a month ago. Second Quarter Class IV is $20.95/cwt., up from 20.80. But, the year’s average, at $20.20/cwt., is down a nickel from last month’s Outlook, and compares to $19.05/cwt. in 2013 and $16.01 in 2012.

Canadian CBC Blasts U.S. Farm Bill
   The recently signed Farm Bill is not very popular to at least one of our neighbors to the north. CBC News’s Neil Macdonald writes: “Among the many myths Americans entertain about themselves is the belief they're self-made; that any success they might enjoy is in spite, rather than with the help, of government. As Ronald Reagan once said, to a great chorus of cheers, "government isn't the solution to our problem, government IS the problem."
   Nowhere is that notion more fiercely beloved than in the vast spaces between this nation's cities; in gun-toting, Republican-voting, tall-standing, rural America. It's a delusion, of course. U.S. farmers are practically wards of the American nanny state.
   But it's a delusion the legislators who represent rural America, both Republican and Democrat, are willing to pay to maintain. Big time, in fact: propping up delusions wins elections. To read the complete column, log on to: http://www.cbc.ca/news/world/new-u-s-farm-bill-coddles-farmers-ignores-canada-s-plea-1.2531254.

World Ag Expo Successfully Ends its 47th Show
   World Ag Expo closed its 47th annual show Thursday after three days of what it called “big crowds, warm weather and new innovations.” More than 50 countries were represented which covered 2.6 million square feet of exhibit space on 260 acres of show grounds. With 1,500 exhibitors and 100,000 attendees, World Ag Expo is the world's largest annual agricultural exposition.   
    "This has been another great show for us," said Jerry Sinift, World Ag Expo CEO.  "This is the place where serious buyers and sellers come to do business, and we've heard lots of success stories again this year."
   Two governors attended the show. California Governor Jerry Brown made a brief visit Wednesday morning after commenting on the drought at a breakfast hosted by the Agricultural Council of California and South Dakota Governor, Dennis Daugaard, spent Thursday visiting with attendees at the South Dakota Department of Agriculture's exhibit space after touring the showgrounds and visiting with media and volunteers.
   World Ag Expo 2015 is scheduled for February 10-12 at the International Agri-Center in Tulare, California.

WAE Reflections
   DairyBusiness West Associate Editor, Cecilia Parsons, attended World Ag Expo and wrote, “Dairy is back in the driver’s seat.” She reports that advances  in dairy technology were evident throughout WAE’s Dairy Center and there were plenty of willing buyers attending the three day event. From a simple automated feed push system to an amphibious pump for agitating lagoons, products and services for dairy producers were abundant, according to Parsons.
    DeLaval’s feed pusher was named one of the expo’s top ten new products and was getting a lot of attention. “It is a simple solution to keeping consistent feed in front of cows, reducing weighbacks and sorting,” said marketing manager Mark Futcher. Not yet on the market, the pusher was demonstrated for the first time at Expo.
    Nuhn of Canada brought their $150,000 amphibious pump to Expo for the first time. The pump can drive itself into the lagoon, mix the lagoon as a boat, and then drive itself out when the pit is empty.
    And there were products that fit in a tool box, Parsons said. Merck Animal Health introduced the first intranasal vaccine to control bacterial pneumonia in dairy calves. The new vaccine can be added to calf disease prevention protocol especially in highly susceptible animals, she said.

National Mastitis Council Annual Meeting A Success
   More than 420 milk quality, mastitis and udder health researchers, dairy producers and dairy industry partners attended the National Mastitis Council (NMC) 53rd Annual Meeting held Jan. 26-28, in Fort Worth, Texas. An NMC press release stated that the event “upheld its tradition of offering a platform for international discussion and sharing research on milk quality innovation and expertise.”
   As in the past, the 2014 event continued to hold global appeal. In addition to a large contingency of U.S. representation, approximately 28 percent of the 2014 attendees represented 23 different countries other than the United States.
   “NMC is committed to growing and continuing engagement on a global level,” says Dr. John Middleton, NMC president. “Our annual meeting is a testament to our international commitment to mastitis control and quality milk production.”
   Discussions at this year’s meeting included analytical approaches to managing mastitis, treatment and non-treatment approaches to control mastitis, and global milk quality updates. The featured symposium focused on technologies for mastitis detection and management with topics on molecular diagnostics, PCR-based tests and automated milk differential cell count. In addition to these sessions, attendees had the opportunity to take 11 different short courses. More than 60 percent of the meeting attendees enrolled in these additional learning opportunities.
   The 54th NMC Annual Meeting is Feb. 1-3, 2015 in Memphis, Tenn. For additional information, go to: www.nmconline.org.

Western Regional Dairy Challenge
The Western Regional Dairy Challenge kicks off next Thursday in Tulare, California and attending students will participate in competition to analyze a situation, strategize the fix, and convince the powers that be. The organizing committee has registered 67 dairy students from nine universities representing five states and one Canadian province at the February 27-March 1, 2014 event in Tulare, California. The College of the Sequoias, Tulare, will be contest headquarters. The regional event leads to the national contest of the same format, held April 3- 5 2014, in Ft. Wayne, IN.
   Registered students and coaches hail from Washington State University, California Polytechnic State University- San Luis Obispo, California State University-Fresno, Texas A & M University, University of Alberta, University of California-Davis, University of Idaho and Utah State University. For the first time, Oregon State University joins the competition. Details are posted at www.dairychallenge.org/calendar_news.php.

In Case You Hadn’t Heard
   The New York Times reported last week that “In the cold war over yogurt, America blinked.” Yogurt maker Chobani conceded defeat on Thursday in its standoff with the Russian government, which refused to allow a shipment of the Greek yogurt intended for the United States Olympic team at the Winter Games in Sochi to enter the country.
   No amount of dairy diplomacy could break the impasse. Chobani said it would donate the yogurt, which had been held in refrigerated storage near Newark Liberty International Airport, to New York and New Jersey food banks.
   “We tried our best,” said Hamdi Ulukaya, the founder and chief executive of Chobani, who said he was disappointed that the Russian government had not been more accommodating. “Nobody should fight over a beautiful cup of yogurt,” Mr. Ulukaya said. “If anything, it brings culture to everybody.”

Mielke Market Daily
(A daily wrap-up of dairy markets and the things affecting them, from DairyBusiness Update associate editor Lee Mielke)
   Cash traders, returning from the weekend and President’s Day holiday yesterday and perhaps having an eye on this morning’s Global Dairy Trade, took the cash cheese price up for the first time in 7 sessions on the blocks and 4 sessions on the barrels. Class III futures saw double-digit gains, March-July.
   One unfilled bid inched the blocks to $2.1075/lb., up 0.25¢ on the day. The barrels were up 0.5¢, on 3 sales, all at $2.0675/lb.
   Cash butter was unchanged this morning, holding at $1.77/lb., with 3 bids at that price going unfilled.
   Sales took Grade A nonfat dry milk up 1¢, to $2.03/lb. The first sale was at Friday’s close of $2.02/lb. and the price climbed to $2.0350/lb. before slipping back to the final 2 sales at $2.03/lb. A bid at $2.0250/lb. was left on the board.
   FC Stone risk management consultant, Joe Kobel, wrote in this morning’s Insider Opening Bell: "Demand is staying strong for nonfat at the $2 mark even though domestic demand for powder is somewhat sluggish.”

Today’s Market Closing Prices:
Butter: Unchanged, at $1.77/lb.
Cheddar blocks: Up 0.25¢, to $2.1075/lb.
Cheddar barrels: Up 0.5¢, to $2.0675/lb.
Grade A nonfat dry milk: Up 1¢, to $2.03/lb.
Class III milk: Feb. $23.14, unchanged; Mar. $21.26, +22¢; Apr. $20.33, +46¢; May $19.49, +26¢, & Jun. $19.15, +17¢. Based on today’s CME settlements, the Second Quarter 2014 average now stands at $19.66, +30¢ from Friday. The 2nd half average is $18.41, +5¢ from Friday.
Looking ahead:
    The Agriculture Department will issue its January Milk Production report Thursday afternoon as well as preliminary data from the 2012 Agricultural Census, and the latest Livestock Slaughter report. The March Federal order Class I base milk price is also announced Thursday. The January Cold Storage report is out Friday afternoon after the markets have closed for the week. USDA’s annual Agricultural Outlook Forum is also happening Thursday and Friday in Arlington, Virginia. Agriculture Secretary Tom Vilsack will moderate two plenary panels exploring the future of agriculture. For complete details, log on to www.usda.gov/oce/forum.
Wednesday on DairyLine:
   Stewart-Peterson’s Patrick Patton discusses risk management as it relates to the farm
   PDPW’s Kathy Muth previews the 2014 Business Conference.