As printed in our July 2013 issue...
MARKET STABILIZATION WAS STRIPPED out of the dairy portion of the farm bill when the House passed the Goodlatte-Scott Amendment. However, it was a moot point, as Representatives later defeated the entire package by a 195 to 234 count. For editorial commentary, turn to page 458.
THE FUTURE OF A NEW FARM BILL remained uncertain. The House is extremely divided over cuts to nutrition assistance and farm spending. Meanwhile, Senate Majority Leader Harry Reid (D-Nev.) vowed on the Senate Floor that it will not pass a temporary farm bill extension this year.
AN IMMIGRATION REFORM package cleared the Senate in late June. Like the farm bill, it will face a cloudy future in the House as Republican leaders haggle on what to do with the 11 million undocumented workers.
BULLISH CORN ACREAGE ESTIMATES, the highest since 1936, placed downward pressure on futures. However, yield will determine fall prices.
MAY MILK ROSE 0.8 PERCENT nationally. Wisconsin grew 1.2 percent and California fell 0.5 percent. Kansas led all gainers, up 8.1 percent. Idaho was up 0.3 percent; New York, 2.1; Pennsylvania, 2.3.
DAIRY COW CULLING remained 53,000 head above last year's levels through May. However, May's activity dropped 20,000 when compared to this April. Preliminary June cull cow prices averaged $80.10 per cwt.
WORLDWIDE DEMAND FOR DAIRY PRODUCTS should remain strong this year, projected the Food and Agriculture Organization (FAO). Cheese sales could grow by 3 percent; butter, 2.7 percent; skim milk powder, 1.5.
INTERNATIONAL DAIRY PRICES should also stay solid through late 2013. Among the seven major exporters, only Brazil and the U.S. have boosted production slightly. The EU, New Zealand, Australia and Argentina are all off when compared to last year, reported Rabobank.
DESPITE ROBUST PROJECTIONS, U.S. inventories continue to swell. Butter stocks climbed to 323.3 million pounds, the highest in two decades. Cheese inventories also expanded 8 percent compared to last May.
JULY-TO-DECEMBER CLASS III FUTURES fell nearly 30 cents to settle at an $18.20 average during June. Spot cheese blocks traded at $1.64; barrels, $1.61; butter, $1.47-3/4. All were down 6 to 10 cents during the month.
BRIEFLY: Interest rates surged nearly one full point for 30-year mortgages from May to late June. For more, turn to page 460. A six-month, 12.5-cent temporary bump will be added to all California milk checks. Farmers had lobbied for $1.20 per cwt. The beef sector continued to hemorrhage money as producers lost $143 per head over the last two years, reported INTL FCStone's Ben Parks. Meanwhile, the beef herd may be down 31 percent since 1970, but output grew 2 percent due to larger frame size.