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Dairy Policy Action Coalition backs new margin insurance dairy policy
Legislation recently introduced in the House by Reps. Bob Goodlatte (R-Va.) and David Scott (D-Ga.) got another thumbs ups, this time from dairy producers in Pennsylvania, New York and Ohio, members of the Dairy Policy Action Coalition (DPAC). 

A DPAC press release said the bill would “offer dairy farmers a new milk insurance package almost identical to the Dairy Security Act included in failed farm bill attempts, but without a controversial milk supply management program. Called the Dairy Market Stabilization (DMS) program, the proposal would have tied margin insurance protection, desperately needed by dairy farmers, to government-mandated limits on milk production through new regulations.”

“Dairy farmers are in full support of much needed dairy policy reform in the next farm bill, said George Mueller, a Clifton Springs, N.Y. dairy farmer, “but we do not want to be told how to run our businesses. The Dairy Market Stabilization Program makes supply management mandatory if you want to participate in a margin insurance program. This alternative proposal will allow U.S. dairy farmers access to margin insurance to grow their business in a free market and to be a reliable supplier to the growing global population.”

Three national consumer organizations also expressed opposition to “dairy programs that propose to assist dairy farmers by imposing limits on milk production” in letters to House and Senate Agriculture Committee members. The comments charged that the DMSP is “designed to raise milk prices and would ultimately increase the prices that consumers pay for milk and dairy products.” 

World Dairy Expo 
names new manager
World Dairy Expo has named Scott Bentley as its new general manager effective June 3. Bentley was the global supply manager at ABS Global, DeForest, Wis., and previously held positions as global dairy product manager, district sales manager and in dairy sire acquisition. Prior to that, Bentley was field service manager at the American Jersey Cattle Assoc. This year’s Expo will be held Oct. 1-5 in Madison, Wis.

Farm milk prices 
improve, up 66 cents
Farm milk prices are heading back up. The USDA announced the April Federal order Class III benchmark price at $17.59 per cwt., up 66 cents from March, $1.87 above April 2012, and the highest April Class III price since 2004. It equates to about $1.51 per gallon and lifts the 2013 Class III average to $17.48, up from $16.14 at this time a year ago, $16.69 in 2011, and $13.62 in 2010. 

The May Class III futures contract was trading late Friday morning at $18.72. June was at $18.98; July, $19.19; with a peak in August of $19.27.

The April Class IV price is $18.10, up 35 cents from March and $3.30 above a year ago. Its 2013 average now stands at $17.81,up from $15.66 a year ago, and compares to $18.50 in 2011 and $13.35 in 2010.

The AMS-surveyed cheese price averaged $1.7310 per pound, up 8.4 cents from March. Butter averaged $1.6766, up 6.2 cents. Nonfat dry milk averaged $1.5312, up a penny, and dry whey averaged 57.41 cents, down 3.1cents.

California’s 4b cheese milk price is $16.92, up $1.90 from March, $3.49 above a year ago and 67 cents below the comparable Federal order Class III price but that is the smallest difference between the two since June 2011. The 2013 4b average now stands at $15.80, up from $13.69 a year ago and $15.13 in 2011.

The state’s 4a butter-powder milk price is $18.02, up 15 cents from March and $3.30 above a year ago. Its average now stands at $17.75, up from $15.44 a year ago, and compares to $18.22 in 2011.

Cash cheese prices strengthen, closing up a nickel
Cash cheese in Chicago strengthened despite some softening in the global dairy markets due to an easing of the situation in Oceania. The blocks closed the first Friday in May at $1.91 per pound, up a nickel on the week and 37.5 cents above a year ago. Barrel closed at $1.73, up 4.5 cents on the week, 26 cents above a year ago, but 18 cents below the blocks. FC Stone’s April 30 eDairy Insider Opening Bell reported that a spread of 32 cents occurred in July 2008. 

Seven carloads of block traded hands this week and 26 of barrel. The lagging AMS-surveyed U.S. average block price hit $1.8154, up 5.4 cents. Barrels averaged $1.7764, up 5.5 cents.

Increased milk production in the Midwest continues to translate into increased cheese inventories, according to USDA’s April 26 Dairy Market News (DMN). Cheese production across the rest of the country was also active with manufacturers sending milk to cheese plants in light of good sales. DMN adds that block cheese supplies were not felt to be burdensome, but some heavier supplies of barrels are weighing on the market. The effects of the spring flush appear to have buyers waiting to see where the market settles.
Cash butter closed at $1.65, down 4 cents on the week, but 34 cents above a year ago when butter dropped a nickel, hitting the low point for the year at $1.31. Fourteen cars were sold this week. AMS butter averaged $1.7226, up 2.8 cents.

Cream is readily available in the West, according to DMN, so butter churns continue to operate heavy schedules. Increased demand from ice cream manufacturers for cream is not slowing butter production significantly. Cream supplies in the Northeast are more plentiful because milk production is increasing with the spring flush. Butter production has increased as manufacturers deal with expanding volumes of cream. 

West and Northeast churns are content to build inventories for later in the year, according to DMN. Several Central churns were actively churning to meet export contracts even though domestic interest is slower, but several operators indicate they are unwilling to compete for spot cream at this time. Northeast bulk butter prices continue to be supported by export sales.