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Farm bill ranks low on Congress’ policy agenda 
Last week’s election leaves the country in much the same position politically. The Daily Dairy Report (DDR) pointed out that “Washington, D.C. has been mired in gridlock, but legislators will have to overcome partisanship to address several urgent issues, including the looming fiscal cliff, expiring tax cuts, the spending sequester and federal debt limits. These agendas will take precedence, delaying negotiation on the farm bill, which officially expired Oct. 1.” 

“The farm bill fits into the larger, ongoing debate about the size and role of government,” wrote the DDR. “Lawmakers are struggling to agree on how much the United States can afford to spend on subsidies and safety nets like food stamps. Congress is also reflecting on whether programs like crop insurance should be administered through federal agencies or private industry.”

The International Dairy Foods Assoc. was quick to point out that the election will affect the House Agriculture Committee and could impact proposed dairy policy reforms. Seven supporters of the Dairy Security Act will not return, yet nearly all who supported the Goodlatte-Scott alternative were re-elected, said Jerry Slominski, IDFA senior vice president of legislative affairs.

Butter closed Friday at $1.89, up 2.5 cents on the week and 15 cents above a year ago. Eleven cars were sold. AMS butter averaged $1.9019, up 0.7 cent.

Churning schedules remain active
Churning schedules across the country remain active and in many instances butter producers are not aggressively seeking additional cream, according to USDA. Some extra cream was looking for a home in the Eastern part of the country the last week of October as Tropical Storm Sandy impacted churns and Class II manufacturing facilities in the storm track. 

Butter stocks and projected fresh production are in fairly good balance for the upcoming holiday period. Shutdowns of varying length at dairy processing facilities along the Eastern seaboard were reported. Some transportation problems were also noted but most handlers indicated farm milk eventually found processing within the region, according to DMN.

Cash Grade A nonfat dry milk inched up a half-cent this week, to $1.5750, on two trades. Extra Grade held at $1.56. AMS powder averaged $1.4916, up 0.6 cent and dry whey averaged 63.89 cents, up 0.9 cent on the week.

USDA reports that farm milk production is moving seasonally higher in the Southeast. Loads imported into Florida dropped from 117 the week of Oct. 22 to 39 the following week, as evidence of the rising milk production. 

Milk production improves in Southwest
Milk production in the Southwest is steady to moving higher, but tempered by dairy rations built to mitigate costs rather than maximize milk production. The Pacific Northwest was experiencing late fall rains and mild temperatures, with little effect on milk output. Central production is mostly unchanged in the northern tier of states, but shifting higher in the southern tier. 

Commercial disappearance of dairy products in the first eight months of 2012 totaled 134.9 billion pounds, according to USDA data, up 2.7 percent from 2011. Butter was up 4.4 percent; American cheese, up 2.2 percent; other cheese, up 2.3 percent; nonfat dry milk up 36 percent; but fluid milk was down 1.8 percent.
Checking things globally, the trade-weighted average for all dairy products and contract periods in this week’s Global Dairy Trade (GDT) gained 1.1 percent compared to Oct. 16 prices, reports FC Stone’s eDairy Insider Closing Bell. 

The average for whole milk powder fell 2.5 percent but average prices for other products rose. Rennet casein gained 9 percent; butter milk powder, 7.3 percent; anhydrous milk fat, 5.3 percent; skim milk powder, 3.9 percent; cheddar cheese, 2.5 percent; lactose, 1 percent, and milk protein concentrate, 0.5 percent. The GDT cheddar cheese average price rose to $1.3776 per pound, regaining part of the 9.9 percent drop in the previous event but well below U.S. CME prices.

Looking “back to the futures;” with the announced Class III plus the remaining two months, the last half 2012 Federal order Class III milk price was averaging  $19.13 on Sept. 21, $19.15 on Sept. 28, $19.27 on Oct. 5, $19.40 on Oct. 12, $19.27 on Oct. 19, $19.31 on Oct. 26, $19.34 on Nov. 2, and was trading around $19.11 late morning Nov. 9.