Posted: Friday, April 13, 2012 2:06 PM
By LEE MIELKE
For the Capital Press
The U.S. Food and Drug Administration this week issued guidelines designed to limit the use of some antimicrobial medicines in animal agriculture, while increasing veterinarian oversight requirements for their use. DPW editor Dave Natzke talked about the key issues in Friday's DairyLine.
Natzke stated that, in some cases, antimicrobial drugs have been administered or mixed in feeds or water to ward off infections and diseases in meat- and milk-producing animals, protecting the safety of the nation's food supply, while enhancing livestock growth and feed efficiency. But, under this new FDA policy, Natzke said that all antimicrobial medicines approved for use in animal agriculture will be used only for therapeutic purposes, such as disease treatment, control and prevention, and only under the supervision of a licensed veterinarian.
While the policy has been in the works for years, Natzke said it comes on the heels of a March 22 federal court ruling in which a judge ordered FDA to start proceedings to withdraw approval of some antibiotics used in food animal production.
The FDA published three documents in the Federal Register this week. The first provides guidance giving veterinarians more oversight in the therapeutic uses of drugs to treat livestock, while recommending phasing out use of medically important drugs in production agriculture.
The second provides guidelines for drug companies to voluntarily remove production uses of antibiotics from their FDA-approved product labels and changing those labels to emphasize disease prevention, control and treatment uses with increased veterinary oversight. The third document outlines ways that veterinarians can authorize the use of certain animal drugs in feed.
"FDA Commissioner Margaret Hamburg said the new strategy will ensure farmers and veterinarians have access to medicines necessary to care for sick livestock," Natzke said, "while at the same time protecting human health by reducing the chances of antimicrobial resistance development."
The Senate Agriculture Committee may begin work on the new farm bill the week of April 16, and there's a lot at stake for dairy farmers, according to National Milk Producers Federation's Chris Galen in Thursday's DairyLine. He called on dairy farmers to contact their senators to voice support for the Dairy Security Act, championed the last three years by NMPF that would "dramatically revamp dairy policy."
Galen said their proposal would provide a better safety net for farmer's equity but admitted it's going to be an uphill battle to accomplish that in 2012. The process begins in the Senate, he said, and then the House. To facilitate farmer communication with lawmakers, log on to www.nmpf.org, Galen concluded, and click on the icon called "NMPF Dairy Great."
The Agriculture Department raised its 2012 milk production forecast for the third time due to increased cow numbers and gains in milk per cow. Details are in this month's World Agricultural Supply and Demand Estimate report. The skim solids import forecast was also raised, the fat-basis export forecast was reduced on lower butter exports, but skim solids exports were forecast higher on stronger nonfat dry milk sales. Ending stock forecasts were raised on both a fat and skim-solids basis.
Look for U.S. dairy cows to produce 201.1 billion pounds in 2012, according USDA bean counters, up a whopping 1.4 billion pounds from last month's estimate and compares to 196.2 billion in 2011. That follows predicted increases of 700 million pounds in March and 500 million in February and, with the higher forecasts and weaker than expected product demand, price forecasts for cheese, butter, nonfat dry milk, and whey were lowered, resulting in lower Class III and Class IV milk price forecasts.
The Class III is now projected to average $16.10-$16.60 per hundredweight, down from the $16.35-$16.95 projected a month ago, and compares to $18.37 in 2010, $14.41 in 2010, and $11.36 in 2009.
The Class IV is expected to averaged $15.35-$15.95, down from $15.85-$16.55 forecast last month, and compares to $19.04 in 2011, $15.09 in 2010, and $10.89 in 2009.
After factoring in the announced Class III milk prices and futures settlements, the average Class III milk price for the first six months of 2012 stood at $15.65 per cwt. on March 2 and $15.83 on April 6. The last half of 2012 was averaging $16.20 on March 2, $16.52 on April 5, and was trading around $16.32 late morning April 13.
Milk price news
California's May Class I milk price was announced by the California Department of Food and Agriculture at $16.94 per hundredweight for the north and $17.21 for the south. Both are down 27 cents from April and $3.96 below May 2011. The Class I average for 2012 now stands at $18.03 for the north, $1 below a year ago, and compares to $16.17 in 2010. The southern average is $18.30, also down $1 from a year ago, and compares to $16.44 in 2010. USDA announces the May federal order Class I base price on April 18.
Cash dairy prices saw more weakness the second week of April, particularly on powder. The 40-pound block cheese price closed Friday the 13th at $1.4875 per pound, unchanged on the week, but 14 cents below a year ago.
The 500-pound barrels dropped 5 1/4-cents Thursday but recovered Friday to close at $1.46, also unchanged on the week and 16 1/2-cents below a year ago. Eighteen carloads of barrel traded hands on the week and no block.
The new National Dairy Product Sales Report by the Agricultural Marketing Service surveyed block price averaged $1.5431 per pound, up 0.4 cent, while the barrels averaged $1.5415, down 4.8 cents.
Retail featuring has increased as advertising of cheese in retail stores picked up significantly, according to USDA's Dairy Market News. Process cheese demand is also reported to be better. Cheese factories are seeing increased milk offerings and are running at higher than expected levels. Market participants are generally satisfied with both price and demand, according to USDA.
Cash butter closed Friday at $1.4250, down a half cent on the week and 57 1/2- cents below a year ago. Only three cars were sold this week. The AMS average lost 2 1/2-cents and slipped to $1.4753.
USDA reports that churning schedules across the country are building as cream offerings increase. Increasing cream volumes are being attributed to reduced Class II demand. Class II cream based holiday item production greatly declined Easter week and many Class II operations worked reduced schedules.
Although cream volumes are available, ice cream production is not overly active. Some producers indicate they are generating ice cream and mix at a more active pace than is typical for this time of the year. Much of this earlier production need is attributed to warm temperatures and mild early spring weather across the country, thus good ice cream and soft serve sales.
In most instances, butter churning is surpassing demand, thus clearances to inventory are building. Many butter producers are realigning output from print to bulk. Butter demand slowed as Easter and Passover orders were filled. Retail features are being reported across the country.
FC Stone's April12 eDairy Executive Morning Edition reported that USDA's weekly stocks data shows butter inventories are building and increased 5.7 percent after dropping 11.5 percent the previous week. The build in butter stocks is the first in a month and were 1.9 percent above a year ago. "The fundamentals for butter point lower," warns the eDairy report.
Cash powder took a dip this week, both losing 7 1/2-cents. Grade A slipped to $1.1925 and Extra Grade closed at $1.1825. AMS nonfat dry milk averaged $1.2605, down 1.4 cents, but dry whey averaged 61.33 cents, up 1.9 cents.
Heavy lies the supply
Milk supplies continue to remain heavy across the United States, according to USDA. Earlier than expected large volumes of milk are impacting processing plants in most regions. Florida may be past its peak flush due to warm humid weather moving into the region. Elsewhere, volumes are said to be heavy. Class I demand is spotty as schools finish up spring break schedules. Auxiliary manufacturing plants are handling some excess supplies.
Cream is readily available, especially late in the week as some Class II plants took the Easter weekend off. Cheese plants are operating at heavy schedules, with butter-powder plants handling excess offerings, although at some discounts.
Cooperatives Working Together
Cooperatives Working Together accepted 14 requests for export assistance the week of April 9. A total of 3.741 million pounds of cheddar and Monterey Jack cheese and 4.063 million pounds of butter will go to customers in Asia, the Caribbean, the Middle East and North Africa. The product will be delivered through October and raised CWT's 2012 cheese exports to 41.6 million pounds plus 37.4 million pounds of butter.
Checking the feed front
Dairy Profit Weekly reports that, with the numbers digested from the March 30 2012 Prospective Plantings report, further analysis of potential 2012 crops and prices is under way. USDA's World Ag Supply and Demand Estimates report points to little change in the corn outlook, but reduced anticipated soybean supplies.
For dairy producers buying feed, USDA narrowed the range for the season-average (2011-12) corn price forecast paid to growers, at $6 to $6.40 per bushel, up from $5.18 per bushel in 2010-11 and $3.55 in 2009-10.
The projected 2011-12 U.S. season-average soybean price was raised to $12 to $12.50 per bushel, up 25 cents on the mid-range forecast from last month. That compares to $11.30 per bushel in 2010-11 and $9.59 in 2009-10. Soybean meal prices were forecast at $335-$355 per ton, up $20 on the mid-range. That compares to $345.50 per ton in 2010-11 and $311.25 in 2009-10, according to DPW.
Southeast U.S. dairy farmers have until May 1 to complete claim forms to be eligible to receive portions of the financial settlement agreement with Dean Foods and Southern Marketing Agency in the "Southeast Milk" lawsuit. Claim procedures are posted on a court-approved website, www.southeastdairyclass.com .
The $145 million settlement will be proportionately distributed to farmer plaintiffs, less the attorney fees and legal costs, to eligible producers who produced and sold Grade A milk within the Appalachian and Southeast federal milk marketing orders since Jan. 1, 2001.