In politics, National Milk CEO and president Jerry Kozak reported in a Sept. 26 teleconference that additional sponsors in the House are signing on to its Foundation for the Future (FFTF) dairy policy reform proposal. The Dairy Security Act of 2011 (HR 3062) was introduced by Reps. Collin Peterson (D-Minn.) and Mike Simpson (R-Idaho). 

Other sponsors included Democrats Jim Costa (D-Calif.), Joe Courtney (D-Conn.), Rick Larsen (D-Wash.), Kurt Schrader (D-Ore.) and Peter Welch (D-Vt.). Rep. Billy Long (R-Mo.) was the only Republican to join Simpson.

Additional cosponsors are being sought, according to Kozak, who added that the list of co-sponsors represented bipartisan, regionally diverse support for the bill, including representatives from several major dairy states and he urged dairy farmers to contact their elected officials to encourage their support.

Kozak said the Congressional budget Office has scored the legislation and stated the measure would reduce government expenditures by $167 billion over the next five years and $131 billion over 10 years, based on a 60 percent enrollment of U.S. milk in FFTF’s supply management program. The bill has been referred to the House Ag Committee.

Meanwhile, National Milk’s Cooperatives Working Together program (CWT.) accepted 12 requests for export assistance last week from Darigold, Dairy Farmers of America, and United Dairymen of Arizona to sell a total of 6.78 million pounds of Cheddar and Monterey Jack cheese to customers in Asia, North Africa, and the Middle East. The product will be delivered October through March and raised CWT’s 2011 cheese exports to 72.3 million pounds to 20 countries, the equivalent of 723 million pounds of milk.

Speaking of the CWT; Dairy Profit Weekly (DPW) reports that a law firm representing two consumers, a school and an animal advocacy group, filed a lawsuit against several dairy organizations, alleging the dairy groups used the CWT program to “fix” milk prices.

Hagens Berman, on behalf of consumers, including Compassion Over Killing (COK) members, filed a class-action lawsuit that various dairy companies and trade groups, including National Milk, Dairy Farmers of America (DFA), Land O’Lakes, Inc. and Agri-Mark, Inc. formed CWT in order to fix the price of milk in the U.S.

The lawsuit, filed in the U.S. District Court for the Northern District of California on Sept. 26, 2011, alleges that between 2003 and 2010, more than 500,000 cows were slaughtered under CWT’s dairy herd retirement program. 

The complaint alleges the program was a concerted effort to reduce the supply of milk and inflate prices nationally. The increased price allowed CWT members to earn more than $9 billion in additional revenue, according to the complaint.

DPW Editor Dave Natzke reported in Friday’s DairyLine that, if the lawsuit moves forward, the suit seeks establishment of a class representing milk consumers, and seeks financial damages on their behalf for dairy products purchased since 2004.

Jim Tillison, CWT chief operating officer, defended the program, saying it was a self-help initiative to assist family dairy farmers and dairy cooperatives who were losing money producing milk, Natzke reported. Tillison said the program was designed and operated consistent with U.S. anti-trust laws, the lawsuit was without merit, and that National Milk would vigorously defend its actions.

Finally, a salute to World Dairy Expo in Madison, Wis., which I will be attending for the 26th or 27th time, but who is keeping track. It’s a great show, enjoyable and educational. 

Farm gate milk prices are heading down. The U.S. Department of Agriculture announced the September Federal order Class III milk price at $19.07 per cwt., down $2.60 from August, but still $2.81 above September 2010, and equates to about $1.64 per gallon. That pulls the 2011 Class III average to $18.28, up from $14.07 at this time a year ago and $10.49 in 2009. 

Looking ahead, Class III futures settled Thursday as follows: October $17.64, November $16.98, and December at $16.88.

The September Class IV price is $19.53, down 61 cents from August, but $2.77 above a year ago. California’s comparable September 4a and 4b prices are scheduled to be announced Oct. 3.

The four week NASS-surveyed cheese price averaged $1.8592 per pound, down 28.1 cents from August. Butter averaged $1.9886, down 8.1 cents. Nonfat dry milk averaged $1.5439, down 3 cents, and dry whey averaged 59.26 cents, up 2.4 cents.

Cash cheese lost a little more ground the last week in September though some positive movement occurred in the week. The 40-pound Cheddar blocks closed Friday at $1.72 per pound, down three quarter-cents on the week, and 4 cents below that week a year ago. 

The 500-pound barrels closed at $1.64, down 6.75 cents on the week, and 9.5 cents below a year ago. Ten cars of block traded hands on the week in the spot market and 18 of barrel. 

The NASS U.S. average block price fell to $1.8005, down a penny and a half from the previous week, and the barrels averaged $1.7694, down 1.2 cents.

FC Stone Dairy Broker Dave Kurzawski wrote in his September 26 Insider Opening Bell that, “As long as domestic spot cheese prices stay in the $1.70 range with international prices about a dime higher, export demand isn’t likely to change enough to lift domestic prices.”

The CME’s Daily Dairy Report says USDA confirmed the slowdown in cheese usage this summer, reporting that disappearance of American cheese was down 1.9 percent from 2010 in the May-July period and down 9.6 percent in July alone.

The views and opinions expressed in this column are those of the author and not necessarily those of Farm World. Readers with questions or comments for Lee Mielke may write to him in care of this publication.