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April 6, 2018 CapitalPress.com 9 Dairy Subscribe to our weekly dairy or livestock email newsletter at CapitalPress.com/newsletters California farmers vote on new federal marketing order By CAROL RYAN DUMAS Capital Press Thinkstock.com Milk production is shifting westward, economists at the University of Wisconsin say. Milk production increases in the West By CAROL RYAN DUMAS Capital Press Despite three years of low milk prices, total milk pro- duction in the U.S. continued upward in February, increas- ing 1.8 percent year over year to 17 billion pounds. But it wasn’t up across the board. Strong production in the West made up for deficits in the Midwest and North- east, USDA National Agri- cultural Statistics reported. Output was up 4.6 percent in the Southwest, 4.1 percent in the Northwest and 3.5 per- cent in California. On the flip side, it was down 1.3 percent in the Northeast and 0.2 per- cent in the Midwest. The biggest increases in production were in Colorado, up 7.7 percent on more cows; Utah, up 6.9 percent on more cows and higher per-cow production; Texas, up 5.5 percent on more cows and higher per-cow production; and Idaho and Kansas, which were each up 4.8 percent on more cows and higher per- cow production. California’s increased production was a bit of a surprise. The state had 1,700 fewer cows than last year, Bob Cropp, an economist at the University of Wisconsin, said in the latest Dairy Situa- tion and Outlook podcast. “But production per cow was very strong, so they had a 3.5 percent increase,” he said. California’s production per cow was up 80 pounds from February 2017, com- pared to an average increase of 24 pounds nationwide. Elsewhere, production suffered. New York’s milk output was down 2.3 percent on 55 fewer pounds per cow, despite an additional 9,000 cows. Minnesota’s produc- tion was down 0.5 percent on fewer cows. Vermont’s pro- duction was down 1.9 per- cent on lower milk per cow, and Florida’s output was down 2.8 percent on weaker production per cow. Wisconsin’s production was only up 0.1 percent, and Michigan’s production was only up 0.9 percent. Both had a 10-pound per cow increase but 5,000 fewer cows. Nationally, “cow numbers have increased every month since October, not a lot, about 15,000 head (total),” Cropp said. While total cow numbers — 45,000 head over a year earlier — are only up about a half of a percent, some states are making significant increases. Cow numbers are up 16,000 head in Texas, 12,000 head in Colorado and 9,000 head in both Idaho and Kan- sas. “So there’s some building going on in those states,” he said. In addition to the cow re- ductions in California, Wis- consin and Minnesota, cow numbers were flat in South Dakota, he said. “I suspect to see what I hear out there that we’ve got some exiting going on in the dairy industry with these low prices,” he said. Milk production is slow- ing in the Midwest and Northeast, he said. Some changes in milk production are attributable to weather, such as last year’s harvest of poor-quality forage in New York and unusually good weather in California this year, Mark Stephenson, director of dairy policy anal- ysis at the university, said. “But it (changing produc- tion) still feels a little stron- ger in both directions than just weather or poor feed,” he said. “It’s like we have some big tub here of milk, and it sloshes from one side and back to the other,” he said. California dairy farmers are nearing the finish line in a marathon effort to abandon their state milk marketing or- der and join the federal milk marketing order system. USDA issued its final de- cision to establish a federal order for the state and will conduct a referendum from April 2 through May 5 to de- termine producer support. “It has been a long haul,” Geoff Vanden Heuvel, board member and economic con- sultant for the Milk Produc- ers Council, said. Over the last decade, pro- ducers have been dissatisfied with how the state system has operated, he said. “California producers came to believe the state system created a regulatory bias against producers,” he said. The system worked well when California operated in an isolated market, and it allowed the industry to grow. But the state is no longer iso- lated, and California’s indus- try has become a huge part of U.S. and world markets, he said. “We need to be on a level playing field with the rest of the (U.S.) industry,” he said. Producers will now be able to decide which system will best accommodate fu- ture prosperity, he said. Now that the final deci- sion has been issued, “we’re at a point here where it’s a yes or a no,” he said. The Western United Dairymen organization “is excited that the process of improved producer prices is finally coming to a produc- tive close,” Annie AcMoody, WUD director of economic policy, said. Dairymen pursued join- ing the federal system to bring their milk prices in line with the rest of the country after little to no success at in- creasing prices through their state order. Capital Press File Cows lounge at Vander- Woude Dairy near Merced, Calif. The state’s dairy farmers are voting on a new federal milk marketing order in a referendum that lasts until May 5. “We are relieved to be ar- riving at this point in the fed- eral order process and look forward to engaging produc- ers in their education of this potential new pricing struc- ture,” Lucas Deniz, WUD president and a Petaluma dairy producer, said. The California Dairy Campaign has long called for the state’s producers to join the federal order system to bring prices and the process for determining prices in line with other regions, Lynne McBride, CDC executive di- rector said. “We think this change is long overdue given Califor- nia dairy producers’ prices are routinely the lowest or near the lowest of any of the major dairy-producing re- gions,” she said. The latest analysis by the California Department of Food and Agriculture puts cost of production at more than $18 per hundredweight of milk, and producers are receiving about $14 for their milk. The state lost 61 dairy operations last year, and that trend is continuing, she said. The journey to a federal order formally began in Feb- ruary 2015, when California Dairies Inc., Dairy Farm- ers of America and Land O’Lakes petitioned USDA to consider a proposal they developed. Dairy prices little changed By LEE MIELKE For the Capital Press C ash dairy prices were mostly lower in the Good Friday holi- day-shortened week, with only butter advancing. The markets had little to chew on in the way of USDA reports. The Cheddar blocks closed Thursday at $1.53 per pound, down 1 1/2-cents on the week, unchanged on the month, but a penny above a year ago. The barrels came under pressure as product found its way to Chi- cago, and dropped to $1.44, down 7 cents on the week and the lowest since Feb. 15, 2018, down 3 1/4-cents on the month, and 3 cents below a year ago. The blocks were un- changed Monday but gained 2 cents Tuesday, hitting $1.55, as traders absorbed the morn- ing’s GDT auction and awaited Wednesday’s February’s Dairy Products report. The barrels inched up a half-cent Monday and stayed there Tuesday, at $1.4450, increasing the spread to 10 1/2-cents. Midwestern cheesemakers tell Dairy Market News that demand is moving at steady to increasing levels. Milk intakes continue to be heavily dis- counted: $2 to $5 under class. Western cheesemakers re- port that demand has been solid, but the relatively strong orders and ample milk supplies have pressed manufacturers to keep up. Somebody wanted to buy butter last Wednesday and got it, as 40 loads exchanged hands, with 20 on Thursday. The price closed at $2.2150, up 2 1/2-cents on the week, up 3 1/2-cents on the month, and 10 3/4-cents above a year ago. A total of 62 cars found new homes last week. Monday’s butter was up a half-cent and ticked up 2 more cents Tuesday, to $2.24. FC Stone pointed out in its March 27 Early Morning Up- date that “historically we’ve Dairy Markets Lee Mielke seen downside following the big demand of Easter, but we’ll have to see how pipelines get refilled to make that call this year. In addition, European but- ter continues to find remarkable support at prices trading north of $2.80 per pound.” “Central region butter mak- ers report that spot cream is widely available but is uncer- tain moving ahead, as ice cream makers begin to compete more heavily. The Cold Storage re- port’s monthly and annual stor- age upticks have some in the industry “concerned.” Churning is ongoing in the West given that more milk loads are available. Export sales were unchanged from the previous week, and market players do not expect any big change in the near future. Cash Grade A nonfat dry milk saw a Thursday close at 69 cents per pound, down a quarter-cent and 11 cents below a year ago. The powder was unchanged Monday and Tuesday. CME dry whey closed Thursday at 28 1/2-cents per pound, down a quarter-cent on the week, with two sales re- ported. The lagging USDA sur- veyed whey price was up 2.2 cents, to 26.14 cents per pound. The whey lost a half-cent Monday and held there Tues- day at 28 cents per pound. GDT slips Anhydrous milkfat led the declines while butter jumped in Tuesday’s Global Dairy Trade auction. The weighted average of products offered inched 0.6 percent lower, following a 1.2 percent drop March 20 and a 0.6 percent slide on March 6. The quantity sold slipped to just under 38 million pounds, down from 41.1 million in the last event. 14-1/102