As printed in our February 25, 2012 issue...

CHEESE OUTPUT ROSE 1.7 PERCENT to 10.61 billion pounds in 2011. That marks 20 straight years that production has set new records.

DECEMBER'S STRONG FINISH at 929.5 million pounds of cheese also set a new monthly high-water mark. It topped May 2011's 915.5.

FOR ONLY THE THIRD TIME, the butter churn netted over 1.8 billion pounds. Last year's butter make represented the highest level since 1941.

BUTTER EXPORTS HAVE SOFTENED, dropping 20 million pounds during the past six months when compared to same period last year.

BLOCK CHEESE PRICE fell to $1.47-1/2, down 52.5 cents since mid-November. Butter traded at $1.44, the lowest point since March 2010.

MILK-FEED PRICE RATIO was 1.77 in January giving an income over feed cost of $8.35. That was down 52 cents from December. January feed prices were corn, $5.90; soybeans, $11.70; and alfalfa, $192.

AN MILC PAYMENT of 5 cents per hundredweight could occur in February. Projected payments may reach 50 to 60 cents April through July.

PRELIMINARY ESTIMATES indicate that 2011 U.S. milk production rose 1.8 percent to 196 billion pounds. A full report will be in the March 10 issue.

HEIFER INVENTORY on January 1 stood at 4.53 million head (500 pounds or larger). There were 49 heifers per 100 cows, down from 2011's 49.9.

LOW-FAT FLAVORED MILK has been eliminated from reimbursable school meals by the government. Fat-free flavored milk is still an option.

USDA WILL BEGIN REVIEWING 10 percent of dairy farm milk records for the European Union's export certification. The process will verify SCCs that must remain below 400,000 and SPCs to stay under 100,000.

U.S. DAIRY EXPORTS TOPPED $4.5 billion last year, the USDA reported in Dairy World Markets and Trade. It resulted in an unprecedented $1.8 billion trade surplus. It projects exports could decline to $4 billion in 2012.

HIGH-FREQUENCY TRADING, also known as rapid trading, will be examined by the Commodity Futures Trading Commission. It accounts for over 60 percent of all futures contract trades at the CME.

TO PROTECT FARMERS, the CME plans to launch an insurance fund by March 1. It would indemnify individual farmer trades up to $25,000, while co-ops could be covered for $100,000 in losses when brokerage firms fail.

BRIEFLY: The January Class III was $17.05, down $1.72 from December. March to December futures averaged $16.50 at the magazine's close. The Conservation Reserve Program will begin a four-week sign-up on March 12. Beef prices could move higher throughout the year despite already record highs, predicted CattleFax's Randy Blanch. The National Restaurant Association expects 3.5 percent growth during 2012 with positive implications for dairy consumption.

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