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Milk-per-cow rates not climbing, a sign of feed/forage issues

 
By LEE MIELKE
Mielke Market Weekly
 
U.S. milk production continues above year-ago levels, though not by much. You’d have to go back to March 2013 to find a decline. The USDA reported October 2015 output in the top 23 states at 16.0 billion pounds, up just 0.1 percent from October 2014. Revisions added 12 million pounds to the preliminary September total, now put at 15.6 billion, up 0.5 percent. The October 50-state output totaled 17.1 billion pounds, up 0.1 percent.
October cow numbers in the 23 states totaled 8.63 million head, down 1,000 from September but 38,000 head above a year ago. Output per cow averaged 1,857 pounds, down 7 pounds from a year ago.
California continues to struggle, down 5.5 percent from a year ago, because of a 105-pound drop per cow and 2,000 fewer cows. Not so in Wisconsin, where output was up 4.5 percent, thanks to 70 pounds more per cow and 8,000 more cows.
Idaho was up 1.2 percent on 7,000 more cows. Michigan was up 4.5 percent, thanks to 13,000 more cows and 25 pound more per cow. Minnesota was up 1.8 percent on a 30-pound gain per cow. New Mexico was down 2.9 percent, thanks to a 60-pound loss per cow. New York was up 2.4 percent, thanks to a 30-pound gain per cow and 5,000 more cows in the milking string. Pennsylvania saw a 1.7 percent drop, because of a 30-pound loss per cow, and Texas inched 0.7 percent lower despite a 20-pound gain per cow, but cow numbers were down 8,000 head. Washington State was also down 0.7 percent on a 15-pound per cow decline.
FC Stone’s Kyle Schrad says the report fell in line with expectations and sees it as “a neutral report.” He continued, “But a more meaningful observation might be that such a report may quell the rather negative sentiment around recent cheese and class III prices. The lack of growth in the milk-per-cow rates is a continued sign of feed/forage issues producers are facing in various regions. These issues are longer-lasting and are impactful when you consider that milk-per-cow figures typically increase this time of the year.
“With cow numbers expected to remain relatively stable overall in the near term, any escalation of the issues hindering milk-per-cow production rates should further exacerbate the spreading of year-over-year production declines in the West and East. And while the Midwest has more than carried its own weight, offsetting much of the declines seen out West over the past few months, we are nearing the point where the white wall of milk being produced in America’s heartland won’t be enough to offset the shortcomings of some of the other major production sheds.” 
HighGround Dairy’s Eric Meyer wrote: “Constrained by very strong milk production last October (up 3.7 percent vs. Oct ’13), the herd and milk-per-cow declines this past month are cause for a bit of concern, particularly the acceleration of Western state production decreases. Therefore, HighGround is calling October’s Milk Production report bullish versus expectations.” 
Dairy cow culling was up again in October, according to USDA’s latest Livestock Slaughter report. An estimated 256,500 dairy cows were slaughtered under Federal inspection in the month, up 4,700 from September and 4,700 more than September 2014. Culling in the first 10 months of 2015 totaled 2.43 million head, up 88,100 head or about 3.8 percent from the same period a year ago.
Legal threat to dairy farms
Falling fluid sales are the least of dairy farmer woes. Besides falling milk prices, the courts are being readied again. You’ll recall that, earlier this year, a Federal judge in Washington State handed down a ruling that will have ramifications for agriculture across the country that involved several Yakima Valley dairy operations that were sued under the Resource Conservation and Recovery Act. 
The judge ruled that any applied manure not taken up by plants would be considered “illegal dumping” and included theoretic leakage of lagoons. Those dairies settled out of court, but this issue is far from over.
I talked about it in Friday’s DairyLine with Gerald Baron of Bellingham, Wash., who is a consultant and executive director of Whatcom Family Farmers, a group formed in Whatcom County, located 100 miles north of Seattle and one of the country’s top 20 milk producing counties.
Baron reported that the same attorneys who pressed the case in Eastern Washington have turned their attention to Whatcom County and plan legal filings against dairy operations there.
The attorneys “have an agenda that is very much against dairy farming,” Baron charged, and he quoted from a transcript from the lead attorney who warned, “We are going to put the facts before this court that is going to change the way that business is done in this country because this industry is killing this country in many different ways. It’s affecting public health. I don’t want to overstate that it’s killing, but it’s affecting public health and sometimes does cause spontaneous abortions in pregnant women and in their own cattle if those nitrates are ingested, and it causes a significant impact to the environment.”
Baron said anyone who is in farming knows that there’s an impact on the environment, but “in Whatcom County, in particular, farmers have done an outstanding job following the 1998 Dairy Nutrient Management Act, with careful stewardship of the environment and protecting water and it’s really upsetting to see this kind of attack on dairy.”
Baron says the group wants farmers and the agriculture industry to watch what is happening in Whatcom County and to “help combat this very serious threat.” He said that all local farmers are involved in this effort – dairy, berry and potato farmers – to “help protect farming and to help preserve a future for farming.” For more details, log on to www.whatcomfamilyfarmers.org
GDT auction 
Global dairy prices saw little hope for recovery in the short hour and a half Nov. 17 Global Dairy Trade (GDT) auction where the weighted average for all products offered dropped 7.9 percent, following a 7.4 percent decline Nov. 3 and a 3.1 percent slide on Oct. 20.
Only butter moved to the upside, up 5.6 percent, after dropping 5.6 percent two weeks earlier. The losses were led by whole milk powder, down 11 percent, following an 8 percent loss in the last event. Skim milk powder followed, down 8.1 percent, after losing 8 percent last time as well. Anhydrous milkfat was down 5.9 percent, after losing 5.7 percent last time, and Cheddar cheese followed close behind, down 5 percent, following a 4.6 percent loss Nov. 3. 
FC Stone reports the average GDT butter price equated to about $1.2288 per pound U.S., up from $1.1677 in the Nov. 3 event. Contrast that to CME butter, buoyed by the GDT and strong domestic demand, at $2.8850 per pound, as of Friday, Nov. 20. GDT Cheddar cheese equated to about $1.3038 per pound U.S., down from $1.3548 last time, and that compares to Friday’s CME block Cheddar at $1.57. GDT skim milk powder, at 83.97 cents per pound U.S., is down from 91.53 cents per pound last time, and the whole milk powder average, at 97.41 per pound U.S., is down from $1.1128 in the last event. That was the first time it has been below $1 per pound since the Sept. 1, 2015, event. The CME Grade A nonfat dry milk price closed Friday, Nov. 20, at 73.5 cents per pound.

11/25/2015