As printed in our January 25, 2015 issue...

HALF OF ALL U.S. DAIRY PRODUCERS SIGNED UP for 2015 coverage in the new Margin Protection Program (MPP-Dairy). Of the 23,000 who enrolled, 12,000 bought up additional coverage. "Enrolling 50 percent of farms in a brand new program is a commendable start, particularly coming off a year of record-high milk prices," said Chris Galen of NMPF.

WHILE FARMS ENROLLED ARE OF INTEREST, the volume of milk covered by MPP-Dairy is important. Those tallies were still forthcoming.

AS GLOBAL DAIRY PRICES SOFTENED, U.S. dairy exports declined. November sales were off 7 percent in volume, 14 percent in dollars compared to October. Overall, November exports represented 14 percent of total U.S. milk production; imports were 3.5 percent.

ASIAN MARKETS WERE HIT THE HARDEST, especially China. Exports to Mexico rose 15 percent, and shipments to South America topped $30 million for the first time in the history of U.S. dairy exports.

U.S. PRODUCTS FACE STIFF TRADE WINDS as the dollar has gained strength. When the greenback strengthens, American products become more expensive to international customers. In early January, the dollar hit an 11-year high against 16 other currencies.

CLASS III FUTURES AVERAGED $15.54 for January to December 2015 contracts with April the low at $14.41 and November the high at $16.36. Spot Cheddar, as well as butter, traded in the mid- to upper-$1.50s.

TWO POSITIVE TRADING SESSIONS were posted by New Zealand's Global Dairy Trade on December 16 and January 6 after nearly 11 consecutive months of market declines. While it doesn't represent a trend yet, it could signify that product prices may be stabilizing.

INCOME OVER FEED COSTS has slipped to December's 2.38 ratio. Feed costs were $8.53 for an income over feed cost at $11.77. Values used: $20.30 milk, $3.77 corn, $10.20 soybeans and $183 alfalfa.

DAIRY FARM EQUITY FINALLY RECOVERED following its disastrous plunge during 2008 and 2009. U.S. dairy farm equity was $96.5 billion in 2013 compared to the prior peak of $93.8 billion in 2007. The average dairy farm equity was $1.95 million in 2013.

BRIEFLY: After ethanol profit margins reached a record $2.04 a gallon in April, returns slipped to 58 cents due to low petroleum prices that dropped 46 percent in 2014. December alone saw a 20 percent drop. In January, 13 new Senators joined 33 others who have served less than one, six-year term in Congress. In the House, half of all lawmakers will have been in office only since the 2008 election. There were 414 fluid milk plants in the U.S. in 2013. That was the most since 1999 when there were 435 locations bottling milk.

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