An Environmental Protection Agency (EPA) report released this week says greenhouse gases are a threat to public welfare. The report primarily deals with emissions from motor vehicles, but agricultural leaders are concerned about it.

The report is the result of a Supreme Court ruling in 2007, which ordered EPA to determine if greenhouse gases posed a public health threat, and whether the science surrounding greenhouse gases was reliable enough to develop regulations.
In essence, the report is a defense document authorizing EPA to regulate greenhouse gases under the Clean Air Act, according to Dairy Profit Weekly Editor Dave Natzke in his Friday DairyLine report.

Natzke went on to say that leaders of several agricultural organizations are concerned it’s the next step leading to regulation of many farming practices under the Clean Air Act.
EPA has said the level of emissions from agriculture mean only the largest livestock operations would be subject to Clean Air Act regulations, but many farmers remain skeptical, according to Natzke.

Part of that concern stems from a 2006 United Nations report, titled “Livestock’s Long Shadow,” which identifies livestock as producing 18 percent of greenhouse gases, even more than transportation. That figure has gained almost “urban legend” status, Natzke reported, and has even prompted public campaigns to restrict livestock-related agriculture and urges consumers to reduce meat and milk consumption as a means to address climate change.
University of California Davis air quality specialist Frank Mitloehner charges those campaigns ignore scientific facts, estimating livestock production accounts for only about 3 percent of all greenhouse gas emissions and warns that restrictions on livestock production could lead to food shortages.

Natzke warned that we’ll probably hear a lot about greenhouse gases in the next week or so, due to the international climate summit being held in Copenhagen, through Dec. 18.

Industry loses leader

Natzke concluded on a sad note, reporting that the dairy industry lost a leader last week with the passing of Colorado Dairy Farmer Tom Camerlo. Camerlo, who had served as chairman of the board for Dairy Farmers of America since 2003, passed away on Dec. 3. He previously served as chairman of the board for NMPF, the U.S. Dairy Export Council, and served on the board of Dairy Management Incorporated.

The internet has become a wonderful way of informing the public of various issues, but it can also be used to disseminate false information and James Hunt, director of communications for the Texas Cattle Feeders, discussed a prime example of that in Wednesday’s DairyLine broadcast.

He discussed a rumor that has been circulating among e-mails for about seven years regarding unsafe beef and McDonald’s. Hunt stated up front that this is not a rumor, but is a “hoax.” He said the e-mail alleges criticism of McDonald’s by the Texas Cattle Feeders Assoc., something that was never done, he said, and “We’re just hopeful that some day it will end.”

“U.S. beef is safe,” Hunt affirmed. “It’s wholesome, it’s nutritious, and there are abundant safeguards in place to make sure that is so.” He said there’s a variety of ways to communicate that to consumers and the beef checkoff is one of them.

Anyone in the business of selling beef has a responsibility to do so, according to Hunt, including dairy and beef farmers.

The beef checkoff provides opportunities for producers to do that, he said, and “get educated on all of the information that supports the fact that U.S. beef and beef sold in the U.S. is wholesome, safe, and nutritious.”

October butter improves
The USDA’s latest Dairy Products report put October butter production at 111.9 million pounds, up 17.3 million pounds or 18.3 percent from September but 18.7 million pounds or 14.3 percent below October 2008.

Nonfat dry milk output amounted to 91.5 million pounds, up 4.9 million or 5.6 percent from September, but 29.6 million or 24.4 percent below a year ago.

Mozzarella cheese output totaled 279.9 million pounds, up 7.6 million pounds or 2.8 percent from September, and 13.8 million or 5.2 percent above a year ago.

Total Italian type cheese, at 360.6 million pounds, was up 10.2 million pounds or 2.9 percent from September, and 12.5 million or 3.6 percent above a year ago.

Cheddar output totaled 261 million pounds, up 5.4 million pounds or 2.2 percent from September, and up 5.6 million pounds or 2.2 percent from a year ago.

American type cheese amounted to 347.2 million pounds, up 8 million pounds or 2.3 percent from September, and up 4 million or 1.2 percent from a year ago.

Total cheese output came to 861.2 million pounds, up 18.2 million pounds or 2.2 percent from September and 11 million pounds or 1.3 percent above a year ago. 

Mary Ledman, principal of Keough Ledman and Associates Incorporated in Libertyville, Ill., pointed out Tuesday that the 1.2 percent increase in American style cheese production from a year ago was the smallest gain in 2009 and the 5.2 percent increase in Mozzarella was the largest gain in 2009. That typically indicates that foodservice sales, particularly pizza, are improving.

The price spread between block and barrel cheese is still being watched closely. Ledman said there appears to be a significant quantity of barrel cheese in end user inventory. Barrel is a very storable product, she said, and end users bought early this year and thus have sufficient inventory to last them through year end.
She believes the spread will remain above the normal 3-cents and the market may sustain as much as a dime spread going into January. She attributes that to strong demand for current block or chunk and shredded cheese and the 2010 export market “looks like it will be there to soak up any extra block we may have.”

Exports promising for butter
The export market also looks promising for butter, but Ledman cautioned that the market is “fickle at this point.” Some people may be taking speculative positions because the international market looks hot at this time, she said, but manufacturers like having a lower butter price in the first quarter when there’s typically more milk available to make butter, and sell it in the second half.
The cash dairy markets saw little change the second week of December, but were well above a year ago due to the crash that week.

Block cheese closed Friday at $1.70 per pound, down 1.75 cents on the week but 18.75 cents above a year ago, when they tumbled almost 28 cents. That began a fall to $1.07 in the second week of 2009.
Barrel closed Friday at $1.46, unchanged on the week, 24 cents below the blocks, and 6.24 below a year ago when the barrels rolled 22.5 cents lower, beginning a slide to $1.07. Nineteen cars of block traded hands this week and two of barrel. The lagging, NASS-surveyed U.S. average block price gained 2.7 cents, hitting $1.5847. Barrel averaged $1.5168, up 2 cents.

Butter lost 2 cents Monday, but gained it back Friday and closed at $1.45, unchanged on the week, but 34 cents above a year ago. Twenty cars were sold this week. NASS butter averaged $1.4982, up 0.8 cent.

Grade A nonfat dry milk closed Friday at $1.38, down 2.75 cents on the week, with two cars sold. Extra Grade held at $1.40. NASS powder averaged $1.2617, up 5.7 cents, and dry whey averaged 36.23 cents, up 0.9 cent.