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Farm milk prices reflect plunge in dairy product prices
By Lee Mielke

The USDA announced the February Class III milk price Friday at $12.20 per hundredweight (cwt.), down $1.19 from January, but still $2.40 above support. The Class IV price was $11.10, down $1.10 from January, and $1.64 below a year ago.

Class III futures were trading late Friday morning as follows: March $11.15, April $11.05, May $11.07, June $11.05, July $11.40, August $11.76, September $11.93, October $11.87, November $11.90, and December was at $11.87, portending a 2006 average of $11.72, down from $14.05 in 2005.

California’s February 4b cheese milk price is $11.14, down $1.42 from January, and $1.06 below the comparable Federal order Class III price. The 4a butter-powder price is $10.58, down $1.16 from January, and $1.88 below a year ago.

February’s Milk-Feed Price Ratio dropped 19 points, to 2.99, according to USDA’s latest Ag Prices report, and compares to 3.50 in February 2005. The All Milk Price was estimated at $13.80 per hundredweight, down 70 cents from last month’s estimate, and compares to $15.50 a year ago.

Cash block cheese closed March 3 at $1.1225 per pound, down a half cent on the week, 32.75 cents below a year ago when it plunged 13 cents and the lowest block price since April 2003. Barrel closed Friday at $1.1050, unchanged on the week, and 31.5 cents below a year ago. Six cars of block traded hands on the week and none of barrel. The NASS-surveyed U.S. average block price dipped to $1.2166, down 3.4 cents. Barrel averaged $1.1967, down 2.5 cents.

Butter finished the week at $1.2175, up 6 cents on the week, the first positive movement since mid-February, but still 33.5 cents below a year ago. Eight cars were sold on the week. NASS butter averaged $1.2040, down 2 cents.

Immigration reform is getting attention on Capitol Hill. The House passed a bill in December that would be “disastrous” to the food industry and the dairy industry, according to National Milk’s Chris Galen Thursday. The bill would make those who employ undocumented immigrant labor felons along with the immigrants themselves and would immediately send all illegals back where they came from. The Senate Judiciary Committee will mark up a bill this spring, Galen said, and NMPF hopes it will “take a more reasoned approach.”

National Milk has developed three criteria for immigration reform. The first is to have an affordable and efficient guest-worker program that ensures the continued availability of immigrant labor for all of agriculture, including dairy.

Second, a provision is needed that would allow those currently employed or with recent employment history in the U.S. to earn the right to work here legally, regardless of their legal status, and third, the responsibility for verification of the legal status of a worker needs to lie with the government, not employers.

Meanwhile, National Milk’s CWT committee announced a bid acceptance this week from Dairy Farmers of America on 440,000 pounds of cheddar cheese to Tunisia and from Land O’ Lakes on 55,000 pounds of butter to Indonesia.

The CWT committee meets next week to decide its next course of action in lieu of the current downturn in dairy prices. The budget does not contain sufficient funds for another herd retirement round this year.

This farm news was published in the March 8, 2006 issue of Farm World.