DairyBusiness

An (almost) daily recap of dairy information:

Nov. 19, 2009

Cropp outlook

With the October milk production report released, UW-Madison professor emeritus Robert Cropp provided his monthly dairy outlook. He forecasts a November federal order Class III price of about $14.05/cwt., with a U.S. all milk price of about $15.10/cwt. If improved domestic sales and dairy exports continue – and there’s a further reduction in milk production – second-quarter 2010 Class III prices could be above $15.00/cwt., and the U.S. all milk price could approach approach $16.25/cwt. By the fourth quarter of 2010, the Class III price could be near $16.00/cwt., and the all milk price could close in on $17.25/cwt. To read Cropp’s full report, visit http://dairywebmall.com/dbcpress/?p=4887.

A tough quarter

Bankers in Minneapolis, Chicago and Kansas City Federal Reserve districts cited weakening agricultural income and ag credit conditions in the third quarter of 2009. Loan demand and repayment rates were generally lower, with a rise in loan renewals and extensions. More bankers tightened loan conditions, increasing collateral requirements. Interest rates on variable rate operating loans were steady to slightly higher in most areas. Although they steadied somewhat from the second quarter of 2009, farmland values in all three regions are below year-ago levels. Check www.dairybusiness.com later this week for more details.

Thursday’s CME cash dairy product prices:

Cheddar blocks: unchanged, at $1.5825/lb.

Cheddar barrels: unchanged, at $1.4425/lb.

Butter – unchanged, at $1.5250/lb.

Extra Grade nonfat dry milk – unchanged, at $1.40/lb.

Grade A nonfat dry milk – unchanged, at $1.40/lb.

Class III milk futures were mixed in a narrow range through September 2010; unchanged thereafter.

Corn futures prices were lower; soybean and soybean meal futures prices were higher.

For today’s market activities on the Chicago Mercantile Exchange and Chicago Board of Trade, visit http://www.dairybusiness.com/dairybusiness_markets.php.

Friday on DairyLine Radio

Dairy Profit Weekly’s Dave Natzke reports that dairy farmers may be getting closer to seeing checks from the $290 million in emergency funds approved in the fiscal year 2010 ag appropriations bill and signed into law by President Obama in late October.  The program now has a name – the Dairy Economic Loss Assistance Payment (DELAP) Program – but other details are still sketchy. USDA’s Farm Service Agency sent instructions to county and state FSA offices on Wednesday, Nov. 18, in preparation for administration of the program. The Milk Income Loss Contract (MILC) program will serve as the basis for determining payments, although provisions pertaining to eligibility, payment formula, payment rate and processing were not announced. Those details will be announced when USDA gets regulatory clearance and publishes details in the Federal Register. For more details, and to listen to the conversation with DairyLine’s Lee Mielke, visit www.dairyline.com.

For a sample copy of Dairy Profit Weekly, or subscription information, visit www.dairyprofit.com or phone: 800-334-1904, ext. 244.

Dave Natzke, Editor