October milk production drops year-over-year

Lee Mielke

By LEE MIELKE

For the Capital Press

October milk production in the top 23 states totaled 14.3 billion pounds, down 1.1 percent from a year ago, according to USDA's preliminary data. The 50 state total, at 15.4 billion, was also down 1.1 percent. Revisions added 16 million pounds to the preliminary September estimate but output was still below a year ago by a half percent. October is the fourth month in a row below a year ago and had the biggest decline since March 2004, according to the Daily Dairy Report.

October cow numbers totaled 8.32 million head, down 22,000 from September and 196,000 less than a year ago. Output per cow averaged 1,721 pounds, up 21 from a year ago.

California output was down 5.3 percent, due to 78,000 less cows and a 20 pound drop per cow from a year ago. Wisconsin was up 3.5 percent, thanks to a 50 pound gain per cow and 5,000 more cows. New York was down 1.5 percent. Cow numbers were off 11,000 but output per cow was up 5 pounds. Idaho was down 1.4 percent, on a decrease of 8,000 cows. Output per cow was unchanged. Pennsylvania was unchanged, despite a 30 pound gain per cow but cow numbers were off 10,000, and Minnesota was up 2.5 percent on a 30 pound gain per cow and 3,000 more cows.

The biggest increase was in Indiana, up 4.4 percent, thanks to 2,000 more cows and 55 pounds more per cow. Wisconsin was next, followed by Illinois. The biggest decline occurred in Arizona, down 10.6 percent, due to a 20,000 cow decline. Colorado was next, down 8.9 percent on 11,000 fewer cows. Missouri followed, with a 5.4 percent loss.

Meanwhile, the National Agricultural Statistics Service estimated 226,800 culled dairy cows were slaughtered under federal inspection in October, down about 9,700 head from September and 9,400 less than October 2008. January-October slaughter totaled about 2.4 million head, up about 221,000 head from January-October 2008.

Meanwhile, the National Agricultural Statistics Service estimated 226,800 culled dairy cows were slaughtered under federal inspection in October, down about 9,700 head from September and 9,400 less than October 2008. January-October slaughter totaled about 2.4 million head, up about 221,000 head from January-October 2008.

The cash dairy markets showed little reaction to the milk production data which appeared bullish but concern over the October Cold Storage report, which was released Friday afternoon after our deadline, may have kept the markets from moving much, though block cheese gained almost 2 cents Friday morning and the barrels jumped 5 3/4.

Block cheese closed the third Friday of November at $1.60 per pound, up 2 1/2-cents on the week, but still 17 cents below a year ago. Barrel closed at $1.50, up 5 3/4-cents on the week, 24 cents below a year ago, and a dime below the blocks. Seven cars of block traded hands on the week and three of barrel. The NASS-surveyed U.S. average block price hit $1.5044 per pound, up 3 cents. Barrel averaged $1.5113, up 0.8 cent.

Butter closed the week unchanged at $1.5250, but 6 1/2-cents below a year ago. Thirteen cars were sold on the week. NASS butter averaged $1.4004, up 8.6 cents.

Both cash Grade A and Extra Grade nonfat dry milk closed Friday at $1.40 per pound, up 2 cents on the week for the Grade A. NASS powder averaged $1.1115, down 0.7 cent, and dry whey averaged 34.68 cents, up 0.3 cent.

Not unusual

Downes-O'Neill dairy economist Bill Brooks said it's not out of the ordinary to have wide spreads either way in the cheese market, but the spread is more likely due to the time of the year, when there's more focus on block products: shredded cheese and chunk cheese for the holidays. Process cheese, the barrels, has probably taken a back seat right now, he said.

The December Federal order Class I base milk price was announced Friday at $13.99 per hundredweight, up $1.13 from November but $1.44 below December 2008. It is also above the MILC trigger level so there will be no MILC payment to producers. The 2009 Class I average is $11.48, down from $18.00 in 2008.

The NASS-surveyed butter price averaged $1.3532 per pound, up 12.9 cents from November. Nonfat dry milk averaged $1.1147, up 8.5 cents. Cheese averaged $1.5113, up 9.6 cents, and dry whey averaged 34.52 cents, up 2.7 cents from November.

Do you remember that emergency aid lawmakers wanted dairy farmers to have -- to help them through these grueling hard times? The holdup has been USDA's decision on how to distribute the $290 million approved in the fiscal year 2010 ag appropriations bill and signed into law by President Barack Obama in late October.

The program now has a name: the Dairy Economic Loss Assistance Payment program. Other details are still sketchy, according to Dairy Profit Weekly's Dave Natzke.

USDA's Farm Service Agency sent instructions to county and state offices on Nov. 18 in preparation for administration of the program. According to the instructions, the Milk Income Loss Contract program will serve as the basis for determining the amount of payments individual dairy farmers will receive, Natzke said. Provisions pertaining to eligibility, payment formula, payment rate and processing were not announced. USDA said DELAP regulations have not received final clearance and won't become official until they are published in the Federal Register.

The instructions to FSA officials gave no timetable as to when dairy farmers will be able to receive the funds, according to Natzke, although top USDA officials have said they anticipate the money will be available in mid to late December.

"In the meantime, dairy farmers suffering through one of the worst financial years ever will have to wait a little longer," Natzke said.

Brighter note

Rising world demand for dairy products and lower than expected milk production, both internationally and in the U.S, will lead to tightening stocks and rising milk prices for the remainder of 2009 and into 2010, according to the USDA's latest Livestock, Dairy and Poultry Outlook.

Dairy cow numbers are expected to continue to decline throughout 2010. The U.S. dairy cow herd is expected to average about 2 percent smaller in 2010 than 2009; this contraction comes on the heels of an expected 3 percent herd reduction in 2009 compared with 2008. Year-over-year milk per cow is expected to move toward trend level increases as a result of a gradually improving milk-feed price ratio.

The improving returns outlook show support for rising yields per cow over the course of 2010, raising production per cow to 20,950 next year after increasing to a projected 20,570 in 2009. On balance, however, there will be less milk next year as production is forecast at 187.7 billion pounds, an 0.8 percent slide from the expected 189.1 billion pounds production in 2009. Production in 2009 is forecast to decline from 2008 and will be the first decline since 2001.

Cooperatives Working Together

An independent economic analysis of the Cooperatives Working Together program shows a return on investment of $1.54 per hundredweight so far in 2009 for farmers, according to a CWT press release. National Milk's Chris Galen said, "It's the answer to the bottom-line question of what has CWT done to help dairy farmers in 2009."

Galen reported that, as in the past, Scott Brown, professor of Ag Economics at the University of Missouri and an expert on how various farm programs affect farmers, was commissioned to assess the voluntary program's impact on dairy farmers across the U.S.

The $1.50 does not include the current ongoing CWT herd removal, according to Galen, who also reported that the cumulative impact of CWT's export program and herd retirement has added $2.4 billion to farm level milk receipts this year, a year where dairy income is expected to be down more than $10 billion because of the global recession.

"It would have been far worse," Galen said, "had we not had CWT in place."

CWT's impact is much greater this year, according to Galen, because this has been the most aggressive year of CWT's six-year history. CWT has removed about 200,000 cows in the past 12 months, he said. The important thing to keep in mind, Galen said, is that when Brown does his analysis, he shows a lingering impact going forward.

For more information, log on to www.cwt.coop.

Calf today, cow tomorrow

The calves you're feeding today are the cows you'll be milking tomorrow so it's important to feed them the best, according to Land O'Lakes young animal technical manager Susan Day. AMPLI-Calf milk replacer is now available throughout the United States, though field trials are still underway, she said.

Users have seen better growth in their calves, according to Day, and better health. Land O'Lakes makes no health claims on AMPLI-Calf, she said, but health data from field trials shows calf health to be improved from feeding it.

She reported that Land O'Lakes has seen a lot of interest by registered cattle producers and many show calves are being fed AMPLI-Calf technology. Day is herself a registered dairy producer with her husband and feeds AMPLI-Calf.

She said they have had great success in getting their calves to eat it and "they grow like champs." She admitted that her husband and his father refuse to feed their calves anything else, and "they're not known for jumping on a bandwagon," so "that means more to me than even seeing the technology work itself."

Producers are watching their budgets closely these days but Land O'Lakes is helping in that regard, Day said, by offering producers some cost-saving tips, such as encouraging them to think long term so as not to stunt the growth and the health of their "future herd" by trying to cut corners now in their calf program.

There are other ways to save money, she said, such as switching to a pelleted feed, which tends to be less expensive than a textured feed. Make sure calves get good colstrum is another important tip, according to Day, so calves stay healthier and you're not spending money in treatments.

Feeding milk replacer three times a day can improve feed efficiency and allow you to wean those calves earlier, Day said, and thus save on labor costs.

"There's a lot of things you can do to save money without cutting you calf program," Day said. For more information, Day recommends a visit to the local Land O'Lakes Purina feed dealer, visit www.amplicalf.com or call 800-237-9895.

Dairy checkoff

California dairy producer and National Dairy Board Chairwoman Kimberly Clauss talked about the partnerships between the dairy checkoff and brand name chains, calling it "good news for dairy farmers."

She said she actually sees her checkoff dollars at work whenever she drives into her local McDonald's or orders a Domino's pizza. The latest venture with McDonald's is the McCafe line of beverages, now offered in 14,000 outlets across the U.S., she said, and these beverages use 80 percent more milk.

Another example of checkoff dollars at work is Domino's, where dairy farmers partnered in the new "Legends" line of pizza. These six new pizzas use 40 percent more cheese, she said, but the chec off is also developing a healthier pizza targeted for schools in an effort to make kids lifelong consumers of dairy.

Pizza sales have slipped in recent years, but the checkoff is working to reverse that, according to Clauss, because pizza is so vital to dairy producers. More cheese is consumed on pizza than anywhere else, she said.

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