CapitalPress.com
Benchmark price drops $1.08
By LEE MIELKE
For the Capital Press
T
he USDA announced
the December Fed-
eral order Class III
benchmark milk price at
$19.37 per hundredweight,
down $1.08 from Novem-
ber, $5.59 above Decem-
ber 2018, and the highest
December price since 2007.
That put the 2019 Class
III average at $16.96, up
from $14.61 in 2018 and
$16.17 in 2017.
Monday’s Class III
futures settlements por-
tended a January price of
$16.97; February, $17.01;
and March at $17.24. The
January price was the low
for 2020, with the peak at
$17.60 in September.
The December Class
IV price is $16.70 per cwt.,
up 10 cents from Novem-
ber, $1.61 above a year ago,
and the highest Class IV
price since August. Its 2019
average is $16.30, up from
$14.23 in 2018 and $15.16
in 2017.
Prices mixed
Cash dairy product prices
at the Chicago Mercan-
tile Exchange started 2020
mixed as traders awaited
the November Dairy Prod-
ucts report on Monday and
the first Global Dairy Trade
auction of the New Year on
Tuesday.
The Cheddar blocks
climbed to $1.91 per pound
New Year’s Eve but closed
the first Friday of 2020 at
$1.89, up 6 cents on the hol-
iday shortened week and
47.25 cents above a year ago.
The barrels hit $1.70
New Year’s Eve but finished
Friday at $1.6425, up 4.25
cents on the week, reversing
four weeks of decline, and
34 cents above a year ago.
Six cars of block traded
hands last week at the
CME, 37 in the month of
December, down from 49 in
November. Sixteen cars of
barrel sold on the week and
103 for the month, up from
just 16 in November.
DAIRY
MARKETS
Lee
Mielke
Monday’s block price
lost a penny and it stayed
there Tuesday at $1.88, as
traders absorbed the Dairy
Products report and the
morning’s GDT auction.
The barrels were
unchanged both Monday
and Tuesday, resting tempo-
rarily at $1.6425, an unsus-
tainable 23.75 cents below
the blocks.
Central cheese makers
told Dairy Market News that
orders were slow to return in
the second shortened week
of the holidays. Blocks and
barrels were both readily
available and milk for pro-
cessing is “abundant,” with
spot loads offered at $6 to
$8 under Class III.
Western cheese output
is also active amid ample
amounts of milk and con-
tacts reported discounted
milk was still available in
parts of the region. Cheese
orders slowed during the
Christmas and New Year’s
weeks but retail demand
leading up to the festivities
pulled at cheese stocks.
Cheese makers are hope-
ful that the pro football
playoffs will spur the need
for more cheese for pizza.
Cheese inventories are “in
good balance with customer
needs,” says DMN.
Butter fell below the
$2 per pound price tag
again, closing last week
at $1.95, 8.5 cents lower
on the week and 30 cents
below a year ago. Only 3
cars exchanged hands New
Year’s Week, with 29 in
December, down from 58
in November.
The butter fell 5.5 cents
Monday and lost 1.5 cents
Tuesday, dipping to $1.88,
lowest CME price since
Nov. 3, 2016, as Novem-
ber’s heavier-than-expected
butter production weighed
on the market.
Water
Friday, January 10, 2020
Dairy/Livestock
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Dairy economist looks ahead to trade, demand
By CAROL RYAN DUMAS
Capital Press
Dairy farmers are beginning the New
Year with improved milk prices and
more reason to be optimistic.
But a dairy economist says there are
a few things the industry as a whole
needs to work on to ensure a prosper-
ous future.
The ratification of the U.S-Mex-
ico-Canada Agreement and finaliz-
ing a phase one trade deal with China
will be good news, but more is needed,
Peter Vitaliano, chief economist with
National Milk Producers Federation,
said on Monday in an NMPF podcast.
USMCA will restore access to Mex-
ico and give U.S. dairy a little bit of
access to Canada, he said.
“But I don’t see it moving the vol-
umes of milk that our own farmers are
capable of producing when they switch
from being flat production to up one, up
one-and-a-half percent,” he said.
The same is true for China, which is
probably looking to diverse its supply.
Carol Ryan Dumas/Capital Press
A dairy economist says the U.S. in-
dustry must increase domestic de-
mand, expand international demand
and increase the ability to compete
with the EU and New Zealand.
It remains to be seen how much of that
market the U.S. will recover, he said.
He said a prosperous U.S. dairy sec-
tor is one where domestic demand con-
tinues to increase, international demand
continues to expand and the U.S. has the
ability to compete with the EU and New
Zealand — the other big suppliers.
“Exporting is relatively new for
the U.S. industry, so we’re playing
catch-up,” he said.
The U.S. Dairy Export Council is
doing a good job and working hard, as
are some export-focused companies in
the U.S., he said.
“But it has not been sort of a central
issue for us the way it has been for New
Zealand and most recently from the
European Union,” he said.
New Zealand exports more than 90%
of its milk production, he said.
“They’re good at it, and they know
how to do it,” he said.
The EU subsidized exports by pri-
vate companies for years, giving them
a government-financed education pro-
gram in how to export — and they do it
well, he said.
“They have large companies that are
very, very experienced and very well
focused,” he said.
In addition, it’s been about five years
since the EU lifted its quota on milk pro-
duction. That additional production is
going into cheese, a critically important
product for the U.S. to increase exports,
he said.
R-CALF: Beef, cattle importers have undue influence
By CAROL RYAN DUMAS
Capital Press
R-CALF USA, a staunch
supporter of mandatory
country-of-origin labeling
for beef, contends a USDA
proposed rule regarding
reapportionment of Cattle-
men’s Beef Board member-
ship reveals the disparity in
importers’ political control.
The proposal would
increase board membership
— which includes cattle pro-
ducers, dairy farmers and
cattle and beef importers —
from 99 to 101, based on cat-
tle inventories in states and
regions. It does not change
the seven seats held by
importers.
To make its calculations
on control of domestic cat-
tle inventories, USDA counts
imported live cattle and con-
verts imported beef to a live
cattle equivalent.
Those calculations show
importers control about 6.9
million head of the 95 mil-
lion U.S. total.
But on a state-by-state
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basis, they
control more
cattle inven-
tory
than
any state in
the Union
e x c e p t
R-CALF USA Texas, Bill
Bullard,
CEO Bill
R-CALF
Bullard
CEO, told
Capital Press.
That gives importers a
supra-competitive position
in lobbying each state’s con-
gressional members, he said.
Having dominant con-
trol over cattle inventories
in all but one state affords
them extraordinary influence
in both Congress and the
administration, he said.
“If you start with the prem-
ise there’s power in numbers
… this makes sense,” he said.
On a state-by-state basis,
those 6.9 million head carry
a greater weight. Importer
inventories now overpower
every state but Texas, he said.
Idaho, for example, has an
inventory of about 2.5 mil-
lion head. Its producers can
go to their senators saying
they want mandatory COOL
to showcase and distinguish
their product. But importers
can come in and say “yeah
but we have 6.9 million,
you should follow what we
want,” he said.
Importers and meatpack-
ers, who are among those
that control that 6.9 million
head of cattle, are strong
lobbyists with overwhelm-
ing influence in Washington,
D.C. They are there on a day-
to-day basis, he said.
They also represent sig-
nificant control over the beef
board, he said.
“That’s why U.S. cattle
producers can’t use the beef
checkoff to promote their
U.S. beef products,” he said.
National
Cattlemen’s
Beef Association, however,
says Bullard is completely
off the mark.
NCBA’s
view
on
R-CALF’s alleged importer
influence “is just garbage,
period,” Colin Woodall,
CEO of NCBA, said.
“We’re not sure what
point he’s (Bullard) trying to
make on undue influence by
importers,” he said.
They only have 6.9% of
the vote on the Beef Board,
and that’s not going to ram-
rod the show, he said.
“It completely debunks
the garbage he’s saying,” he
said.
And he doesn’t know
where Bullard is getting
undue influence in Congress.
From first-hand experience,
importers are not engaged in
Washington, D.C., he said.
“Bill Bullard is mak-
ing assumption based on he
lives in Montana,” he said.
NCBA is engaged — and
members of Congress are
interested in what their con-
stituents, cattle producers,
have to say, he said.
NCBA supports volun-
tary marketing programs
to effectively differenti-
ate product. But mandatory
COOL was in place in the
U.S. for more than six years,
and an economic analysis
showed there was no value in
it, he said.
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