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Dairy groups praise approval of U.S.-Russian trade legislation
National Milk (NMPF) and the U.S. Dairy Export Council (USDEC) praised the House of Representatives’ approval of H.R. 6156, which would establish permanent normal trade relations (PNTR) with Russia. A joint NMPF and USDEC press release reported that both have actively supported approval of PNTR with Russia as part of work necessary to reopen that market to U.S. exporters. The release said the Russia dairy market has been closed to U.S. dairy products for more than two years due to Russian insistence on certain dairy certificate statements and accompanying facility inspection requirements that were not acceptable to the U.S. 

“This is a significant step forward on the path to reopening one of the world’s largest dairy importing markets,” said Tom Suber, president of USDEC. “USDEC has been working extensively to help provide a firm basis for restoring access for U.S. dairy exporters to Russia. More is needed beyond PNTR to achieve that goal but approval of PNTR is a vital piece of puzzle.”  

“NMPF hopes that House action will help to spur swift action by the Senate to also approve PNTR with Russia so that we can move closer to re-establishing exports of U.S. cheese, butter and other products to the benefit of America’s dairy producers,” said Jerry Kozak, president and CEO of NMPF. “This is a major market with solid opportunities for our industry and it is critical to ensure we have the same access to it that our competitors around the world enjoy.” 

Both organizations also stressed the importance of a strong focus by the Administration on resolving the ongoing dairy certificate and related technical requirements that currently block U.S. dairy shipments. NMPF and USDEC believe it is critical to continue to move forward with active and aggressive efforts to resolve these issues as Congress works to pass PNTR legislation.

CDFA release product costs
Dairy Profit Weekly reports that the California Department of Food and Agriculture (CDFA) released its annual list of dairy product manufacturing costs, noting 2011 weighted average costs to produce butter and nonfat dry milk were down from a year earlier, but the cost to produce cheese was up.

The 2011 average cost to produce cheddar cheese was 20.29 cents per pound, up 5.62 percent from 19.21 cents in 2010 and the highest cost per pound since 2008. It compared to 19.66 cents in 2009; 20.99 cents in 2008; 20.03 cents in 2007; 19.88 cents in 2006; and 19.14 cents per pound in 2005.

The average all cheese yield decreased to 12.21 pounds per cwt. of milk in 2011, compared to 13.70 pounds in 2010; 13.28 pounds in 2009; 13.58 pounds in 2008; 13.71 pounds in 2007; and 12.24 pounds in 2006.

The 2011 average cost of manufacturing butter was 17.75 cents per pound, down 0.34 percent from 17.81cents in 2010 and the lowest since 2008. Among eight plants, 2011 costs ranged from 17.28 cents per pound for the low-cost group to 18.62cents for the high-cost group (four plants each).

The cost to produce nonfat dry milk was 19.42 cents per pound, down 6.18 percent from 20.20 cents in 2010 and the lowest since 2008. Among nine plants, the 2011 range was 17.46 cents for the low-cost group; 20.41cents for the medium-cost group; and 24.56 cents for the high-cost group (three plants in each group).

Production down from October
October milk production totaled 15.2 billion pounds in the top 23 states, down slightly from October 2011. The 50-state total amounted to 16.255 billion pounds, down 0.1 percent. Revisions lowered the original September estimate by 19 million pounds, to 14.7 billion, down 0.6 percent from a year ago.

Cow numbers in the 23 states, at 8.47 million head, were down 8,000 head from September and 10,000 less than a year ago. Output per cow averaged 1,791 pounds, up one pound from a year ago.

California was down 4.5 percent from a year ago on 12,000 fewer cows although output per cow was up 35 pounds. Wisconsin was up 4.7 percent on 7,000 more cows and 70 pounds more per cow. Idaho inched up 0.9 percent on a 30 pound gain per cow, but cow numbers were down 4,000. New York was up 2.7 percent on a 45 pound per cow increase. Cow numbers were unchanged. Pennsylvania was down 0.3 percent on 5,000 fewer cows. Output per cow was up 10 pounds. Minnesota was up 2.9 percent on a 50 pound gain per cow and 1,000 more cows
New Mexico saw the sharpest decline, down 5.9 percent on a 75 pound per cow loss and 8,000 fewer cows. FC Stone’s Nov. 20 eDairy Insider Opening Bell pointed out that about 40 dairies have already closed in New Mexico this year and that state has one of the largest cheese plants in the world. Texas was next, down 5 percent, also on a 75 pound per cow drop and 5,000 fewer cows. 

Other states of interest; Arizona was down 4.5 percent on 12,000 fewer cows, but output per cow was up 35 pounds. Michigan was up 2.7 percent on a 25 pound gain per cow and 5,000 more cows. Vermont was up 1.4 percent, thanks to a 35 pound gain per cow, but the herd had 1,000 fewer cows in it. Washington State saw a 2.1 percent decline on 5,000 fewer cows and 5 pound less per cow.