Milk production increases, but only slightly
Updated: Saturday, March 23, 2013 12:29 PM
By LEE MIELKE
For the Capital Press
U.S. milk production started 2013 above a year ago, but not by much.
USDA issued its preliminary January data this week showing output at 15.9 billion pounds, up just 0.6 percent from January 2012 in the 23 major dairy states and up a half-percent in the 50 states. Many analysts expected a gain of 1.5 to 2 percent.
Revisions subtracted 5 million pounds from the original December count, now put at 15.7 billion, up 1.7 percent from a year ago and put 2012 total output at 200 billion pounds, up 2.1 percent from 2011.
2012 cow numbers totaled 9.23 million, up 0.4 percent from 2011, and output per cow averaged 21,697 pounds, up 361 pounds from 2011. USDA reports that the average annual output per cow has increased 15.7 percent from 2003.
January 2013 cow numbers totaled 8.5 million head in the 23 states, up 6,000 from December but 2,000 less than a year ago. Output per cow averaged 1,871 pounds, up 11 pounds from a year ago.
Checking the top states:
* California output was down 4.3 percent from a year ago on 2,000 fewer cows. Expensive corn is likely being reduced in the ration where output per cow was off 85 pounds.
* Wisconsin was up a whopping 4.9 percent thanks to an 80 pound gain per cow and 5,000 more cows.
* New York was up 3.1 percent on a 55-pound gain per cow.
* Idaho was off 1.3 percent on a 20-pound loss per cow and 1,000 fewer cows.
* Pennsylvania was up 0.9 percent on a 30-pound gain per cow but cow numbers were down 5,000.
* Minnesota was up 4.5 percent on a 75 pound gain per cow.
* Michigan was up 3.1 percent on a 35-pound gain per cow and 5,000 more cows.
* New Mexico inched 0.4 percent higher despite a loss of 15,000 cows. Output per cow was up 105 pounds.
* Texas was down 1.1 percent on a 20-pound loss per cow.
USDA's latest Livestock Slaughter report shows an estimated 296,900 dairy cows were slaughtered under federal inspection in January, up 38,000 from December and 33,100 more than a year ago. It marks the single highest monthly total since 1986, a year highlighted by the whole-herd dairy buyout program.
The cash dairy markets slipped in the President's Day holiday shortened week despite the lower than expected milk production data. Block cheese reversed two weeks of gain and closed Friday at $1.6275 per pound, down 4 3/4-cents on the week but 16 cents above a year ago.
Barrel closed at $1.63, unchanged on the week and 16 cents above a year ago. Demand for barrel appears to be increasing seasonally, as the barbecue grills start to come out again.
Three carloads of block traded hands on the week and none of barrel. The AMS-surveyed U.S. average block price fell to $1.6582, down 2 cents, and the barrels averaged $1.5902, down 1.7 cents.
Some increased milk supplies are available for manufacturing and cheese plants are taking some of that volume, according to USDA's Dairy Market News. Cheese inventories at manufacturers are described as manageable with export sales helping to balance sales. January Cold Storage data was issued after our deadline on Feb. 22.
Cooperatives Working Together accepted 16 requests for export assistance this week to sell 1.631 million pounds of butter and 956,806 pounds of cheese to customers in Asia, the Middle East, and North Africa. The product will be delivered through August and raised CWT's 2013 exports to 22.613 million pounds of cheese, 11.916 million pounds of butter, and 88,185 pounds of whole milk powder to 24 countries.
CWT says the sales are the equivalent of 468.5 million pounds of milk on a milkfat basis, the annual production of 22,300 cows.
Butter off slightly
Cash butter lost a penny and a half, closing Friday at $1.59, 17 1/4-cents above a year ago. Five cars were sold on the week. AMS butter averaged $1.5606, up 4.2 cents. AMS nonfat dry milk averaged $1.5577, down 1 1/2-cents, and dry whey averaged 63.42 cents, down 1.2 cents.
Butter production is strong across all regions, reports DMN. Ample cream is reported in the West and Central regions, with increased cream available in the Northeast following winter storm Nemo. Most manufacturers are building inventory, according to USDA.
Exports of butter and milkfat for January-December 2012 totaled 107.2 million pounds, down 24 percent from 2011. Butter and milkfat exports accounted for 5.8 percent of U.S. butter production for the year. The Foreign Ag Service adds that quota imports of butter for January 2013 totaled just under 1 million pounds, up 47.2 percent from 2012. January imports for 2013 accounted for 5.3 percent of the yearly total quota.
Imports of High-Tier butter (above quota and with a penalty) at 87,640 pounds, was significantly higher than last year's high tier import of 9,932 pounds for January.
Weather conditions for milk production in California have been near ideal for a number of weeks. Numerous reports show output pulling ahead of year ago numbers for the first time in many months. Milk output in Arizona is steady. Milk production in the Pacific Northwest remains on a mostly steady keel and following expected amounts with no handling problems reported. Utah and Idaho temperatures moderated and there was a small increase in production as cows responded to more favorable weather.
Cows like weather
Weather throughout the Central region has been conducive to cow comfort this winter. Drought conditions are easing somewhat due to snowfall and rain received in late January-early February. Some plant operators indicate their intake volumes started a slow decline during that time. Other processors note their intakes continue growing on a weekly basis.
Milk haulers are reporting more milk per load is arriving at processing plants than in January. Manufacturing milk supplies marginally increased in the Mid -Atlantic as milk was diverted from New England and the Northeast, according to DMN.
Cream supplies remain heavy in the East, due to volumes from Class I plants and yogurt manufacturers. A major winter storm in the Northeast resulted in trucks being unable to make it to farms, which caused some milk to be dumped.
New Zealand milk output continues to drop, according to DMN, and is beginning to move below a year ago. Expectations are that this will continue for the remainder of the season. Australian output is also trending lower with the latest stats for December down 1.3 percent versus a year earlier.
Base price $17.80
USDA announced the March federal order Class I base milk price at $17.80 per hundredweight, down 41 cents from February but $1.50 above March 2012, and equates to about $1.53 per gallon. That put the 2013 Class I average at $18.33, up from $17.38 at this time a year ago and compares to $16.44 in 2011.
The March Class IV advanced pricing factor became the "higher of" in driving the Class I value. The University of Wisconsin's Brian Gould projects a March MILC payment of 38.41 cents per cwt., as of Feb. 22. Gould's 2013 projections are as follows: January, 11.41 cents; February, 32.41 cents; March, 38.41 cents; April, 36.16 cents; May, 19.12 cents; June, 17.88 cents; and July, 2.36 cents.
The AMS-surveyed butter price averaged $1.5393 per pound, up 1.1 cents from February. Nonfat dry milk averaged $1.5644, up fractionally. Cheese averaged $1.6480, down 10.6 cents, and dry whey averaged 63.99 cents, down 1.4 cents.
Looking "back to the futures," first half 2013 Class III contracts portended a $17.98 average on Jan. 18, $17.60 on Jan. 25, $17.69 on Feb. 1, $17.82 on Feb. 8, $17.61 on Feb. 15, and was trading around $17.55 late morning Feb. 22, including the announced January Class III price.
DairyBusiness Update reminds dairy farmers to establish their 2013 MILC program payment "start month" and warned that the "relief period" for producers with annual production above the payment cap of 2.985 million pounds and wish to change their "start month" is Feb. 28.
Jersey records set
The American Jersey Cattle Association announced that all-time records for production were established in 2012. The official Jersey lactation average increased to 18,995 pounds of milk, 903 pounds of fat and 691 pounds of protein. On a Cheddar cheese equivalent basis, average yield was 2,345 pounds. All break the previous records set in 2011. A total of 100,211 lactations were processed by the association in 2012, an increase of 10 percent from 2011.
The Food and Drug Administration released its annual National Milk Drug Residue Database results for fiscal year 2012, and consumers can be assured the dairy products they buy are safe, according to DairyBusiness Updates' Dave Natzke.
Every year, FDA analyzes results of animal drug residue tests in milk at several steps within the supply chain, Natzke reported, starting at the farm, and including samples from trucks delivering milk to processing plants, and in pasteurized, finished dairy products.
Of the nearly 3.8 million milk samples tested for animal drug residues last year, only 828, or fewer than 20 thousandths of 1 percent, tested positive for drug residues anywhere in the supply chain, he said. Probably especially important to dairy consumers, FDA found no animal drug residues in pasteurized dairy products.
"These results provide assurances dairy farmers and veterinarians are using animal medicines properly and following label directions, and that testing procedures are catching any drug residues before they reach the consumer," Natzke said.
Activists get CAFO information
Meanwhile, the National Cattlemen's Beef Association was notified by the U.S. Environmental Protection Agency that information regarding concentrated animal feeding operations has been released to some animal activist organizations under a Freedom of Information Act request.
Natzke said the information covers CAFOs in more than 30 states and, according to the association, includes such things as addresses and geographic coordinates and telephone numbers.
In January 2012, EPA proposed the Clean Water Act Section 308 CAFO reporting rule to collect this information and make it publicly available. Livestock producers, along with the Department of Homeland Security, expressed concerns that this information could subject livestock producers to animal activist attacks and even put the nation's food supply at risk to terrorist attacks. Now, it looks like some of that information may be available, Natzke concluded.