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Dairy markets a little higher for the week
The dairy markets showing a little life at the end of the week. After no movement for three days, cash cheese nudged higher, for the week barrels gained a penny and blocks a quarter-cent. Class III futures for July gained 12 cents on the week, August 44 cents, September increased 44 cents as well, October was 31 cents higher while December gained 49 cents from last Friday.
Commodity Credit Corporation purchased another 5.68 million pounds of nonfat dry milk for the week. This brings the cumulative total since October 1 to 264 million pounds. The National Milk Producers Federation is asking USDA to temporarily increase the government purchase price for cheese and nonfat dry milk powder. Currently, Commodity Credit Corporation serves as a buyer of last resort paying $1.10 per pound for cheese barrels, $1.13 per pound for cheese blocks and 80-cents per pound for nonfat dry milk. National Milk is asking to increase the cheese price by six cents and the powder price by four cents in hopes that will increase the price for milk paid to producers.
Dairy Export Incentive Program awards for the week covered 25.8 million pounds of nonfat dry milk, 3 million pounds of butterfat and 293,000 pounds of cheese. Some disappointment so far in the lack of utilization of the DEIP. Last month USDA announced it was activating the program for the first time in years in an effort to move some product. Cheese Market News says if fully utilized, the program could remove more than 1.5 billion pounds of milk from the U.S. market. Randy Baxter with USDA’s Foreign Ag Service says they have not received as many requests as they had expected at this point however exporters have until 3 p.m. Monday to submit bids. Companies can complete the DEIP application on line, the bid is reviewed overnight and USDA calls the exporter the next morning to let them know if it has been accepted. The current allocation expires on Tuesday; hopes are USDA will announce another allocation on July 1st.
Total number of dairy cows slaughtered in the U.S. in May, 212,000, that is 3,000 less than went to market in April but 17,000 more than in May of last year. Remember, dairy cow culling slowed considerably in May as producers were waiting to see if their bids were going to be accepted by the CWT herd retirement program. Once the results were announced, culling picked up. In fact, in the first week of June, culling was 35% higher than a year earlier. For the first five months of the year, 1,189,000 dairy cows were taken out, 10,000 more than in the first five months of 2008. Of that total, 361,000 came from the upper Midwest while 352,000 came from California, Arizona, Hawaii and Nevada.
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