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4 CapitalPress.com December 23, 2016 U.S. dairy outlook a little brighter, analyst says By CAROL RYAN DUMAS Price outlook for U.S. dairy Capital Press Lower global milk pro- duction, fewer available dairy products for export and high demand for butter and cheese in the U.S. and EU are im- proving the outlook for U.S. dairy farmers, according to the latest industry quarterly report from Rabobank. Milk supplies from dairy export regions overseas have fallen 2.6 million tons in the second half of 2016 year over year, and volumes available for export are down 4.5 million tons. Low milk prices around the globe and weather challenges and high feed costs in different regions have reduced milk pro- duction in all the major export- ing countries except the U.S. Item Q2 2016 Q3 ’16 Q4 ’16* Q1 ’17* Q2 ’17* Dollars per pound Nonfat dry milk AA butter Block cheddar Whey powder $0.76 2.08 1.43 0.25 0.85 2.22 1.70 0.29 0.92 1.92 1.70 0.35 Class III milk Class IV milk $13.20 13.18 16.08 14.75 17.06 13.88 1.12 2 1.68 0.35 Q3 ’17* Q4 ’17* 1.04 2.15 1.71 0.37 1.04 2.03 1.71 0.38 16.65 15.85 16.66 15.34 1.11 2.08 1.68 0.35 Dollars per hundredweight Sources: USDA; Rabobank 15.91 15.88 16.09 16.14 *Estimated or forecast Strengthening producer margins in the U.S. has made it the only major export region able to compensate for tight- ening global supplies, with ex- ports up 19 percent in the third quarter of 2016 compared with a year earlier, the analysts re- ported. Capital Press graphic The U.S. market has kind of isolated itself from internation- al prices, insulated by domestic butter and cheese demand, said Tom Bailey, a senior analyst with the bank’s food and agri- business research and advisory team. Dairy farmers are seeing a return to profi ts, but it’s only marginal, he said. “It’s not going to get people overly excited; the market is still fragile,” he said. Product prices in 2017 will be better, and it looks pretty good for U.S. dairy producers, but there will still be a few things to keep an eye on, he said. Clearing EU intervention stocks that are overhanging the market in the face of weak de- mand for milk powder will be a challenge, he said. The EU recently tried to sell some of its nearly 400,000 tons of skim milk powder. It hoped to sell about 20,000 tons and only sold 40 tons, he said. A strengthening U.S. dollar could also be a challenge to U.S. exports. However, the U.S. will be the only export surplus market with a growing milk supply, the analysts said. Signifi cant recovery of global production and volumes available for export will be de- layed until the second half of 2017 when the new Oceania season commences, they said. The U.S. will fi ll some of the gaps left in global cheese and butter shortages. And with fewer U.S. imports, solid do- mestic demand growth and continued draw-down of in- ventory, the U.S. should fi nd itself in a fairly well-balanced domestic market for most of 2017, the analysts reported. World prices for dairy prod- ucts have rocketed upward, driven by butterfat demand. Cheese and butter prices will continue to climb, but more stagnant prices are expected for milk proteins. “The story really is we’ve (passed) the low point in the market for now and we’ll be trying to fi gure out mid-lev- el pricing over the next 12 months,” Bailey said. Washington’s winter outlook turns colder Storms boost S. Idaho snowpack ‘Weak’ La Nina carries punch By JOHN O’CONNELL Capital Press By DON JENKINS Capital Press A new federal forecast says the odds now favor a cold and wet winter throughout Wash- ington, a change from previ- ous outlooks. The National Weather Service’s Climate Prediction Center on Thursday released its U.S. forecast for January, February and March. The center noted that the biggest change from Novem- ber’s outlook was the increased probability of cold weather in Washington. Plus, West- ern Washington, like Eastern Washington, can now expect above-average precipitation. Previously, the center said it was a 50-50 bet which way Washington’s winter would tilt. The center described the swing toward a harder winter as a “modest” change in the odds. “It’s not really a strong fore- cast. It’s just a nudge that way,” Washington State Climatolo- gist Nick Bond said Dec. 16. Still, the revised outlook and Don Jenkins/Capital Press Snow blankets a farm Dec. 15 in southwestern Washington. The state can expect a colder and wetter winter than average, accord- ing to a Climate Prediction Center outlook. early snowfall bodes well for summer irrigation, he said. “I think you have to expect that we’ll have a good snow- pack coming out of this win- ter. I’m ready to be wrong. In this business, you have to be,” Bond said. As of Friday, snowpacks around the state were at least 75 percent of normal, according to the Natural Resources Conser- vation Service. The snowpack in the Olym- pic Mountains was 170 percent of normal. Olympic Peninsula farmers depend on snow melt- ing into the Dungeness River for irrigation. The snowpack Happy New Year! Happy New Year! • News Display and Legal Ads: (Friday, December 30th at Noon) CLASSIFIED DEADLINES REMAIN THE SAME • Classified Display Ads: Wednesday, January 4 th at 10:00AM • Classified Line Ads: Wednesday, January 4 th at Noon 1-800-882-6789 L A 4 Henry’s Fork and across Southern Idaho have al- ready received their full De- cember precipitation for the fi rst 19 days of the month,” Abramovich said. “Anything else is going to keep adding to the snowpack, which is good news.” Abramovich expects the cold and wet weather pattern to persist and noted storms in the forecast are predicted to blanket Central Idaho with 20 inches of snow. He said the wet pattern has mostly missed Idaho’s North- ern Panhandle, which had re- ceived just a third of its usual monthly snow total through Dec. 19. 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Happy New Year! was less than 10 percent of nor- mal during the 2015 drought. Bond said that a “weak” La Nina — a cooling of the Pacifi c Ocean — is having a stronger than expected infl uence on the weather. La Nina years typi- cally, but not always, produce cooler and wetter Northwest winters. Climatologists predict that La Nina will yield to neu- tral conditions over the next three months. “It’s possible we’ll end up having a remarkably cold win- ter. It’s not out of the realm of possibility,” Bond said. Below-average tempera- tures would be a big change from November. Based on records dating back to 1885, Washington had its warmest November ever, according to the federal National Centers for Environmental Education. The Climate Prediction Center’s new three-month outlook also predicts be- low-average temperatures in the Idaho panhandle. The odds are equal for above- or below-normal temperatures in the rest of Idaho, Oregon and Northern California. IDAHO FALLS, Idaho — December snowstorms have padded a below-average snowpack throughout South- ern Idaho, bringing accumu- lation to above-normal levels in many areas, and well above normal in the Eastern Snake Plain. “Ten days ago, we were below average on a lot of snow (survey) sites in the Up- per Snake. Now we’re above average in the majority of them,” Lyle Swank, water- master for the Upper Snake region, said on Dec. 19. Swank said the Lewis Lake Divide snow survey site in the Upper Snake headwaters in Wyoming increased its snow- pack from having the equiva- lent of 6.7 inches of water on Dec. 14 to 10.3 inches on Dec. 19. “That’s a pretty good storm for this time of year,” Swank said. Snake Plain snow survey sites above Palisades Res- ervoir increased from 75 to 80 percent of normal to 128 percent of normal during the same time frame, Swank said. “It’s a much brighter out- look than we’ve had in some other recent years,” Swank said, adding the water outlook can change rapidly this early in the winter. Ron Abramovich, Idaho water supply specialist with USDA’s Natural Resources Conservation Service, said snowpacks are average or above throughout Southern Idaho. “Most of the basins from 52-7/#8 legal-52-2-1/#4 strong El Nino pattern, which results in above-normal streamfl ow in Southern Idaho two-thirds of the time during the following year. “It ends up being a very active weather pattern, which is what we’re seeing right now,” Abramovich said. “It’s all good news, and we’ve got more storms coming, so it will be a great Christmas present.” Wes Hipke, managed aqui- fer recharge coordinator with the Idaho Department of Wa- ter Resources, said the state needs a wet winter, with the Upper Snake Reservoir sys- tem now at just 45 percent of capacity. “There’s still a lot of reser- voir to fi ll up, but it’s looking awesome,” Hipke said. Hipke said continued wet weather could open the pos- sibility of reservoir fl ood-con- trol releases in the spring, enabling the state to put new Upper Snake aquifer recharge infrastructure to use. Man- aged recharge involves in- jecting surface water into the aquifer through unlined ca- nals and spill basins to build groundwater levels. Unfortunately, Hipke said, a recent cold spell has frozen canal headgates, reducing winter recharge in the Lower Snake River. “We’re not ramping up as quickly as I’d hoped,” Hipke said. JANUARY 24 · 25 · 26 • PORTLAND, OR The Northwest’s Largest Ag Show! OVER 200 EXHIBITORS FROM THE NORTHWEST, ACROSS THE COUNTRY, AND AROUND THE WORLD! EVERYTHING FOR EVERY FARMER! Twelve and Under Free! Single Day -$17 Adult/$8 Senior Multi-Day - $18 Adult/$14 Senior FREE PARKING ALL THREE DAYS! Free Parking Courtesy of Kubota Tractor Corp. 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