April 1, 2016
CapitalPress.com
Dairy/Livestock
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$25
U.S. milk prices, long-term projection
(All milk, dollars/hundredweight)
20
$19.90
$23.97
15
10
5
Source: USDA ERS
2014 ’15
’16
Alan Kenaga/Capital Press
’17
’18
Sheep group president worries about new FDA rules
By MATTHEW WEAVER
Capital Press
$16.15
0
11
’19
’20
’21
’22
’23
’24 2025
Leap-year bonanza aside,
U.S. milk production growing
By CAROL RYAN DUMAS
Capital Press
U.S. milk production
gained 739 million pounds
year over year in February
due to an extra day of milk-
ing, bringing the total to 16.9
billion pounds — a whopping
4.6 percent increase over
February 2015, according to
USDA National Agricultural
Statistics Service.
But the year-over-year
gain on a Leap Year-adjusted
basis is only an unsensational
1 percent.
That is the relevant num-
ber. It is below the historical
trend, although it is the larg-
est increase since August, said
Matt Gould of Dairy & Food
Market Analyst.
One day of extra milk is a
lot, but it’s not going to affect
markets; there’ll also be one
more day of demand this year,
he said.
What will affect markets is
booming production in some
regions of the country, he said.
Milk production growth in
the Midwest, Upper Midwest
and the Northeast is right in
line with what processors are
saying — milk supply is soon
going to exceed processing
capacity, he said.
Processors in those regions
have requested a temporary
change in Federal Order rules
to allow co-ops to dump milk
without taking a total loss.
The change will take effect
April 1, he said.
The anticipated surplus is
primarily a result of temper-
ate weather in February and
more production per cow due
to better feed quality in those
regions, he said.
Gould hasn’t heard of any
dumping yet, but it is expect-
ed given processors’ worries
and the spring fl ush, which
typically hits its peak Memo-
rial Day weekend, he said.
Year-over-year growth in
milk production is expected
through the rest of the year
because of higher feed quali-
ty, lower feed prices and eas-
ier-to-beat comparables, he
said.
In addition, dairy farmers
in the Midwest, New York
and Idaho are still in expan-
sion mode, he said.
However, Idaho’s in-
creased milk production in
February, up 2 percent on an
adjusted basis, was a bit of a
surprise, he said. Processors
in the region were reporting
tight supplies and producers
were reporting increased mas-
titis due to a really cold Janu-
ary, he said.
It’s fair to say Chobani
is taking more milk than it
had been, and the company
just announced a signifi cant
expansion to its Twin Falls
plant, he said.
Idaho’s total production
in February, at 1.1 billion
pounds, was up 2 percent on
an adjusted basis with produc-
ers adding 7,000 cows year
over year, NASS reported.
Production increases were
even higher elsewhere, partic-
ularly in the Midwest.
Milk production on an ad-
justed basis was up 7.8 per-
cent in Michigan on 11,000
additional cows, 5.1 percent
in Wisconsin on 5,000 addi-
tional cows, and 4.4 percent
in Indiana on 3,000 additional
cows.
On a daily basis, New York
increased production 4. 6 per-
cent on an additional 4,000
cows, and South Dakota was
up 10.6 percent on an addi-
tional 11,000 cows.
California dairymen whit-
tled down the herd by 5,000
cows year-over-year and at
3.3 billion pounds, decreased
milk production 2.9 percent
on an adjusted basis.
Production in New Mexi-
co and Texas was also down,
suffering from the residual ef-
fects of winter storm Goliath.
New Mexico’s production
was down 6 percent on 12,000
fewer cows, and production in
Texas was down 2 percent on
13,000 fewer cows.
The federal Food and
Drug Administration’s new
rules for antibiotics will leave
sheep producers without a key
drug used to prevent abortions
in their animals, the president
of the Washington State Sheep
Producers says.
Sheep producers typically
feed chloratetracycline to pre-
vent abortions in ewes before
lambing, said Jill Swannack,
president of the sheep produc-
ers organization and a veteri-
narian and rancher in Lamont,
Wash.
Sheep producers now can
go to feed stores to buy the
product and mix it into ra-
tions. But the new rule, effec-
tive Jan. 1, 2017, says users of
antibiotics in livestock feed
or water have to follow label
directions. The drug is labeled
only for cattle use.
It’s generally been accept-
ed that ranchers or veterinar-
ians could use the drugs for
medically necessary cases
beyond their labeled use in
sheep, swine and other minor
species not listed on the label,
Swannack said.
The new rule is called the
Veterinary Feed Directive. It
requires ranchers to establish
a relationship with a veteri-
narian to get a prescription
for the antibiotics. The new
guidelines also require a vet-
erinarian to engage with the
farmer to have “suffi cient
knowledge” of an animal
through examinations or vis-
its to the facility where it is
managed to make judgments
about the animal’s health.
The FDA says the changes
are necessary to make sure the
drugs “are used judiciously
and only when appropriate for
specifi c animal health purpos-
es.” The concern is that over-
use of the drugs could result
in disease-causing bacteria
becoming resistant to them,
according to the agency.
“It’s basically been unof-
fi cial at the FDA that they’re
not going to pursue these
things, they understood they
were happening and they
were going to turn a blind
eye,” Swannack said.
Now the FDA will enforce
the rule, banning the addition-
al uses beyond those allowed
on the label.
After the change, there
won’t be labeled products for
sheep at the dosage necessary
to control abortions, Swan-
nack said.
“The only thing you can do
is get the whole fl ock in and
Matthew Weaver/Capital Press
Lamont, Wash., veterinarian and Washington State Sheep Producers president Jill Swannack holds a
new lamb on March 2.
give injections every several
days, and that’s not practical
for large producers,” she said.
“It’s not practical animal wel-
fare-wise, to bring these preg-
nant sheep in every couple
days and give injections.”
The change will also af-
fect the swine industry for
small producers and 4-H and
FFA hogs. Products exist for
them, Swannack said, but the
FDA requires a valid veteri-
narian-client-producer rela-
tionship to obtain a prescrip-
tion. The new requirements
will also be cost-prohibitive,
Swannack said.
ROP-11-4-4/#13
Dairy prices mixed as more
milk goes to cheese vats
By LEE MIELKE
Cash CME dairy prices
weakened in the Good Friday
holiday-shortened week.
The 40-pound Cheddar
blocks closed Thursday at
$1.49 per pound, unchanged
on the week but 5 cents below
a year ago. The 500-pound
Cheddar barrels ended three
weeks of gains, fi nishing at
$1.45, down 5 cents on the
week and 9 1/2-cents below a
year ago. Only six cars of bar-
rel were traded last week.
The blocks lost a penny both
Monday and Tuesday, slipping
to $1.47 per pound. The bar-
rels were down three-quarters
Monday but were unchanged
Tuesday, holding at $1.4425.
With schools closed for
the Easter-Passover holiday,
more milk was fl owing into
the cheese vat, plus spring
fl ush is increasing the amount
of milk coming to the plants,
and slowed dairy exports are
all putting pressure on prices.
Cheese sales slow
Dairy Market News reports
that many plants are operat-
ing full schedules to handle
milk intakes. “Some reports of
cheese sales slowing are heard,
both due to buyers having full-
er storage facilities, and due to
buyers opportunely watching
price movements which they
can comfortably do, being well
stocked already. The market
undertone remains resigned
to heavy milk and full inven-
Dairy
Markets
Lee Mielke
tories.”
Western
manufacturers
continue to report good retail
demand for natural cheese but
supplies are outpacing demand
for process cheese and cheese
entering manufacturing lines,
according to DMN. “Many
contacts perceive cheese in-
ventories are already long and
growing. Cheese production
is very active. Some addition-
al milk is being diverted into
cheese vats as area educational
institutions go on spring break
though milk supplies are cur-
rently in fairly good balance.
But, as the region more fully
enters into spring fl ush, some
contacts are concerned that
growing milk intakes could
further translate into heavy
cheese inventories.”
Cash butter ended Easter
week at $1.9225 per pound,
down 2 3/4-cents but still 17
cents above a year ago. Six-
teen carloads traded hands at
the Exchange. The USDA-sur-
veyed butter price average
slipped to $1.9940, fi rst time
it’s been below $2 per pound
since August 2015.
The spot butter was un-
changed Monday, with a bid
at Thursday’s price going
unfi lled, but then jumped 2
3/4-cents Tuesday, as fi ve cars
traded hands, and clawed its
way back to $1.95 per pound.
14-2/#7
For the Capital Press