New research challenges assumptions regarding animal agriculture and global warming. This is an important topic that could have far reaching ramifications for farmers everywhere and was addressed by National Milk’s Chris Galen in Thursday’s DairyLine. He said it’s an issue that has been used to “beat up” production agriculture, particularly producers of milk, meat, and eggs as being major contributors to greenhouse gas emissions and potentially global warming.

A report from the United Nations a few years ago claimed that 18 percent of all greenhouse gases around the world were caused by livestock, Galen reported, but “fortunately the pendulum is finally swinging.”

He cited a researcher at the University of California at Davis, Dr. Frank Mitloehner, who has data showing that the study others cite as the reason to become vegetarians has miscalculated livestock’s contribution to global greenhouse gas emissions.

UN researchers had calculated everything that goes into livestock production, Galen said, including fertilizer, cropping, and transportation, but when they looked at utilities and automobiles, they didn’t look at steel, mining, and oil refining and all the things that contribute to greenhouse gases when you drive a car or use other forms of transportation so “they were really comparing apples to oranges.”

“We in livestock were aware of this,” Galen argued. “But didn’t necessarily have the same bully pulpit but now we have a respected researcher who is basically saying, while the emperor may not have no clothes, his clothes are a lot different than what the United Nations has said.” The other good thing, according to Galen, is that the UN researchers have admitted that their study is flawed.
“This will give us good ammunition to shoot back at some of the critics who cite livestock production as a major source of environmental evil and a major contributor to greenhouse gases,” Galen concluded. “Now we have a different perspective coming from the main scientific body that was trying to get everyone to go vegetarian in the first place.”

March benchmark price declines
The March Federal order benchmark milk price dropped $1.50 Friday as the Agriculture Department announced the Class III manufacturing grade milk price at $12.78 per cwt. That’s still $2.34 above the level it was a year ago but $5.22 below March 2008 and pulls the 2010 average down to $13.85. That compares to $10.18 at this time a year ago and $18.12 in 2008. The Class IV price is $12.92, up 2 cents from February, and $3.28 above a year ago.
Class III futures portend another small drop in April, which settled Thursday at $12.72. May rebounds to $13.28, June $14, and July at $14.49, with a peak of $15.08 in September before beginning the traditional seasonal decline.

The NASS cheese price averaged $1.3632 per pound, down 14.8 cents from February. Butter averaged $1.4388, up 7.8 cents. Nonfat dry milk averaged $1.0454, down 3.6 cents, and dry whey averaged 37.61 cents, down 1.6 cents. California’s 4b cheese milk price is $11.13 per cwt., down $1.82 from February but 68 cents above a year ago and $1.65 below the comparable Federal order Class III price. The 4a butter-powder price is $12.84, unchanged from February, but $3.17 above a year ago.

Cheese prices ended March and started April on an upswing. The blocks closed Thursday, April 1, at $1.43 per pound, up 10.5 cents on the Good Friday holiday shortened week, and 15 cents above a year ago and that’s no “April fools.” The barrels closed at $1.3750, up 6.25 cents on the week, and 11.5 cents above a year ago. Only two cars of each traded hands. The NASS-surveyed U.S. average block price lost 3.3 cents, slipping to $1.3019. Barrel averaged $1.2895, down 1.2 cents.

Butter closed at $1.4950, up a half-cent on the week and 31.5-cents above a year ago. Seven cars were sold. NASS butter averaged $1.4511, down 0.6 cent.

Cash Grade A nonfat dry milk closed the week at $1.2250, up 7.5 cents on the week. Extra Grade closed at $1.1650, up 4.5 cents.
NASS powder averaged $1.0534, up 0.9 cent. Dry whey averaged 36.89 cents, down 0.1 cent.

Cheese buyers get back in game
Alan Levitt, editor of the CME’s Daily Dairy Report, said in Tuesday’s broadcast that once cheese prices got down to the mid-$1.20s, it “gave buyers the green light to come back off the sidelines.” He suspects they were waiting until they felt the price had bottomed out. He finds it “encouraging that the sellers are the ones who have moved off to the sidelines and the prices increased on unfilled bids.”

Still, Levitt is cautious. Increases in the commodity prices and milk futures are encouraging, he said, but “It’s going to take a sustained rally in the cheese market to keep futures from falling back again. The futures are priced at a premium compared to where cheese prices are.”

Buyers recognize that there’s a lot of cheese in storage, running about 10 percent above a year ago and “this is the time of year when you’re continuing to build stocks,” he added.
Spring is starting to hit in the upper Midwest, according to Levitt, with milder weather, “so we’re seeing a seasonal increase in milk volume.”

Production is also trending higher in California, but Levitt says the volume is still below a year ago because they have a lot fewer cows in the herd. Other parts of the country are also seeing their spring flush so “it may be a while before we can say that things have fully turned the corner but it’s certainly encouraging.”

Meanwhile, the Agriculture Department’s latest Dairy Products report shows February butter production at 141.1 million pounds, down 21 million pounds or 12.9 percent from January and 4.6 million or 3.1 percent below February 2009.  

Mozzarella cheese output totaled 260.7 million pounds, down 24.3 million pounds or 8.5 percent from January, but 13.3 million or 5.4 percent above a year ago.

Total Italian type cheese, at 332.8 million pounds, was down 29.9 million pounds or 8.3 percent from January, but 12.9 million or 4 percent above a year ago.

Cheddar production totaled 242.8 million pounds, down 23.8 million pounds or 8.9 percent from January, but up 1.3 million or 0.6 percent from a year ago.

American type cheese amounted to 318.9 million pounds, down 28.7 million pounds or 8.2 percent from January, and down 1.9 million pounds or 0.6 percent from a year ago.

Total cheese output came to 777.2 million pounds, down 64.4 million pounds or 7.7 percent from January, but 7.4 million pounds or 1 percent above a year ago. 

CWT announced its first acceptance of bids under its re-activated export assistance program. 2.1 million pounds of cheddar cheese will be exported to the Middle East in April and May. Four of the bids came from Seattle-based Darigold and two were from Foremost Farms.

Readers with questions or comments for Lee Mielke may write to them in care of this publication.