Search Site   
News Stories at a Glance
Deere 4440 cab tractor racked up $18,000 at farm retirement auction
Indiana legislature passes bills for ag land purchases, broadband grants
Make spring planting safety plans early to avoid injuries
Michigan soybean grower visits Dubai to showcase U.S. products
Scientists are interested in eclipse effects on crops and livestock
U.S. retail meat demand for pork and beef both decreased in 2023
Iowa one of the few states to see farms increase in 2022 Ag Census
Trade, E15, GREET, tax credits the talk at Commodity Classic
Ohioan travels to Malta as part of US Grains Council trade mission
FFA members learn about Australian culture, agriculture during trip
Timing of Dicamba ruling may cause issues for 2024 planting
   
Archive
Search Archive  
   
USDA cuts National Animal ID to create disease traceability program
USDA last week announced that it was discontinuing its National Animal Identification program to create a new flexible disease traceability program. National Milk’s Chris Galen, reporting from his snowed-in home near Washington D.C., said the program was important, but extremely controversial and the Obama Administration recognized that the process was “politically stuck in the snow.”

The administration will seek a state by state system, according to Galen, however National Milk still favors a mandatory national animal identification program and one that employs radio frequency technology and 48 hour traceability across the food chain.

Galen said it’s unsure how USDA will proceed from here other than they will be working with fifty state governments and “hopefully end up with something that has some national uniformity as opposed to a patchwork quilt.”

Livestock organizations will be part of the process, he said, along with state governments that regulate animals and livestock.
The Federation believes a national ID program is “an important part of a collective insurance policy in the event of an animal disease emergency,” Galen said, “So we think this is a setback, but there’s still widespread recognition within USDA and Congress that something needs to be done.”

It may not be called a national animal ID system, he admitted, but “hopefully they can come up with something new, a better mousetrap, that will enable us to do what we need to do to protect the infrastructure of the livestock industry.”

Reacting to the snow in the D.C. area, Galen said it’s unprecedented, having three huge snowstorms, two in the last five days, and “the city is reeling under the onslaught of 2-3 feet of snow.” “We’re looking forward to spring,” he concluded.


Potential in dairy exports fuel optimism
Another factor that fueled optimism was the export potential, but Levitt pointed out that global markets are weaker as supply pipelines have been refilled, overseas buyers have backed off a bit
International prices have also slipped 10-20 percent in the last two months and “that’s weighing heavily on U.S. prices.” A strengthened U.S. dollar hasn’t helped exports either.

Levitt warned that if global markets don’t come back in 2010, there’s little chance U.S. markets are going to be able to recover to the levels that we thought we would see even just a month ago.
Is there a silver lining in the dark cloud?

Levitt said there are some bullish fundamentals in the market and hope remains that we’ll see a tight supply after the spring flush but that remains to be seen.

December’s total cheese production was down a tenth of a percent, the first downturn in 21 months, he said. Cheddar cheese output was off 8.3 percent from the year before and output was down in all four major producing states, Wisconsin, Idaho, Minnesota, and California. Butter production was down in December, along with nonfat dry milk, so production is pulling back, he concluded. “We seem to be in a lull right now but maybe when we get past the spring flush, things will be a little bit more buoyant.”

Levitt’s comments may be supported by the latest World Agricultural Supply and Demand Estimate (WASDE) report. The milk production estimate for both 2009 and 2010 was raised again, as has been the case the past several issues. Tuesday’s report reflected USDA’s estimates for fourth-quarter 2009 production and the 2010 estimate was raised due to a higher-than-expected Jan. 1 dairy replacement heifer estimate.

“Herds are not expected to decline as rapidly as forecast last month,” the report said, “boosting milk production.” 2009 output is now pegged at 189.3 billion pounds, up 100 million pounds from last month’s estimate. The 2010 estimate, at 188.9 billion pounds, was raised by 500 million pounds.

Dairy exports on a skim-solids basis for 2010 were raised, reflecting higher sales of cheese and nonfat dry milk. Import forecasts were lowered for 2010. Fat and skim-solids ending stocks were estimated higher for 2009 and stocks for 2010 were raised in the face of higher production.

Cheese and butter price forecasts for 2010 changed little from last month. The Class III milk price estimate was raised due to higher forecast whey prices but the Class IV forecast was lowered reflecting weaker nonfat dry milk prices.

Look for a 2010 Class III range of $14.90-$15.60 per cwt., up from the $14.75-$15.55 range USDA predicted a month ago. The 2009 average was $11.36. Look for a Class IV price of $13.95-$14.74, down from the $14.70-$15.60 estimate last month. The 2009 averaged was $10.89.

Dairy Profit Weekly Editor Dave Natzke warned in his Friday report that feed costs may be another cloud on dairy’s horizon. He reported that the WASDE report indicates somewhat lower stocks of corn and soybeans, as more of each crop goes toward energy production.

A record amount of ethanol was produced last November, Natzke said, and November-December corn use for ethanol was up 16 percent from a year earlier. And, the recent EPA announcement of final rules for biodiesel mandates is expected to pull more soybeans into biodiesel production.

On a brighter note, Natzke said, “The good news for dairy farmers is that we haven’t seen a big price impact on those major dairy feedstuffs,” USDA’s latest Ag Prices report indicates that, while hay prices rose slightly in January, corn and soybean prices were down from December. And, while corn futures prices have been trending mostly higher since Feb. 1, 2010, average futures prices are still down about 30 cents per bushel since early December and soybean meal futures are down $25-$40 per ton.

There’s more “silver lining” via a global perspective from Rabobank, one of the world’s largest agricultural lenders, which says the recent downturn in dairy prices is more of a market correction to prices that were rising quickly, rather than the return to a dairy sump.

Milk production in nearly all dairy exporting regions, including the European Union, United States, Argentina, Australia and New Zealand was trending lower in the last quarter, Natzke said, and Rabobank’s monthly Agribusiness Review, says a wildcard to global dairy prices will be China, which discovered additional melamine contamination in its domestic production, and could increase that country’s activity in the import market.
2/17/2010