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IDFA happy with the passage of milk regulatory equity act
By Lee Mielke

Last week’s passage of the “Milk Regulatory Equity Act” was “a historic collaboration between dairy producer and dairy processor groups,” according to the International Dairy Foods Assoc.’s Chip Kunde.

Speaking in the IDFA’s “Processor’s Perspective,” Kunde said the legislation addresses market disruptions caused by unregulated milk. He said the industry has come together before to pass other bills, most recently the Child Nutrition Reauthorization Act in 2003, but “We have not experienced this type of partnership on Federal Order issues.”

The first unifying component, according to Kunde, was recognition by all parties that a problem existed that could not be solved by one group alone. Addressing the problems of unregulated milk required parties from many states and many sectors to come together, and “was a necessary first step.”

Second, there was recognition that everyone was going to have to compromise to move forward on a solution, something Kunde said required much thought, deliberation and negotiation.

Thirdly, Kunde said “We didn’t quit. There were many moments when our chances for success looked bleak however we pressed forward recognizing that we were not going to get another chance to do this again.”

The end result, according to Kunde was a “better understanding and appreciation of our different perspectives and recognition that we are all committed to a fair playing field.”

As the 2007 Farm Bill approaches, Kunde said “This effort marks a beginning where we can come together to tackle some of the tough issues facing dairy producers and processors today.” He warned “there are more tough challenges ahead, like finding ways to better manage price volatility and deal with the unintended consequences of two, competing dairy subsidy programs, the MILC program and the price support program.”

“We have another chance to put this coalition to work, solving some of the tough issues in the next Farm Bill,” he concluded. “I, for one, look forward to working with this group again to find creative solutions that benefit the entire industry and I want to let producers across the country know that our door is open and we are ready to work together to make the next farm bill one where everybody wins.”

A new congressional Dairy Farmer Caucus was announced this week to help focus legislators’ attention on major policy issues affecting producers, according to National Milk. Chris Galen reported in his Thursday DairyLine program that the caucus is made up of members of the House and Senate and both parties and will “address and build national consensus where possible.”

The caucus is cochaired by Senator Arlen Specter (R-PA) and Dianne Feinstein (D-CA), Representatives Devin Nunes (R-CA), Collin Peterson (D-MN), Rick Larson (D-WA), and Randy Kuhl (R-NY).

Galen said the lawmakers represent a good cross section of the U.S. and a large dairy presence in their districts. He said he hopes other lawmakers will join the caucus which provides a formal way for National Milk and its members to communicate with elected officials.

The planting season is well underway in the warmer climates, and the USDA issued its first estimate of how U.S. crop acreage will shake out in 2006. Dairy Profit Weekly editor, Dave Natzke, reported that high fuel and fertilizer costs are causing farmers to switch some of their corn acreage to less input-intensive soybeans.

USDA’s “Prospective Plantings” report says that growers intend to plant about 78 million acres of corn in 2006, down about 5 percent from 2005. If that estimate holds true, Natzke said this will be the lowest corn acreage since 2001.

In contrast, U.S. producers intend to plant nearly 77 million acres of soybeans in 2006, he said, up 7 percent from last year and the largest planted area on record. Growers in 20 of the 31 soybean-producing states intend to increase acreage.

USDA also said the nation’s growers expect to harvest about the same number of hay acres in 2006 as last year. Texas producers said drought has substantially lowered hay harvest expectations there, Natzke concluded.

USDA’s latest Dairy Products report shows February butter production totaled 134 million pounds, down 13.3 million pounds or 9 percent from January, but 20.5 million or 18.1 percent above a year ago. Nonfat dry milk output totaled 117.1 million pounds, up 9.8 million or 9.2 percent from January, and 22.8 million pounds or 24.1 percent above 2005.

American-type cheese totaled 302.8 million pounds, down 21.7 million pounds or 6.7 percent from January, but 9.7 million or 3.3 percent above a year ago. Cheddar production hit a record 8.8 million pounds per day, according to the CME’s Daily Dairy Report, up 4 percent from a year ago. Total cheese output, at 718.6 million pounds, was down 53.7 million pounds or 7 percent from January, but 11.2 million or 1.6 percent above a year ago.

Cheddar production in Wisconsin was down 2.8 percent from a year ago and down 6.4 percent in California. Idaho output was up 10.5 percent. California butter production was up 32.2 percent from a year ago, while Wisconsin butter manufacturing was up 16.8 percent, according to the USDA.

Cash dairy product prices showed strength early in the first week of April but it must have been an “April Fools” because prices fell back. Block cheese climbed to $1.2050 but closed Friday at $1.16 per pound, down three quarters on the week, and 42 cents below a year ago. Barrel closed Friday at $1.1275, also down three quarters on the week, and 39.25 cents below a year ago. Five cars of block traded hands on the week and four of barrel. The NASS U.S. average block price hit $1.1655, up 1.2 cents. Barrel averaged $1.1363, up 0.4 cent.

Butter closed the week at $1.1575, down a quarter cent on the week, and 40.25 cents below a year ago. Seven cars were sold on the week. The NASS butter price averaged $1.1437, down 0.9 cent. NASS nonfat dry milk averaged 84.18 cents per pound, down 1.8 cents, and dry whey averaged 31.76 cents, down 1.2 cents.

This farm news was published in the April 12, 2006 issue of Farm World.