CME: All Milk Price Lowest Since January 201

US - The February 2012 All-Milk Price estimate is $17.90, down $1.10 from January and the lowest level since January 2011, according to USDA’s “Ag Prices” report released this afternoon, writes Alan Levitt, in Wednesday's dairy report.

1 March 2012

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North America

The corn price increased 9¢ to $6.16, soybeans increased 40¢ to $12.30, and alfalfa hay increased $6/ton to $198.00.

Rising feed costs and declining milk prices are expected to result in Milk Income Loss Contract (MILC) payments in 2012. According to Dr. Gould, Professor of Agricultural Economics at the University of Wisconsin-Madison, MILC payments could range from an estimated 44 cents in March to almost $1.00 per cwt in June based upon estimated milk and feed costs.

As most realize, today is Leap Day. The extra day typically adds about 0.3% to production and consumption and leads to qualifying statements, such as “data adjusted for leap day.” Daily Dary Report charts are standardized to 30-day calendar months to avoid this confusion, and year-to-date production will also be adjusted for leap day. CME cash Cheddar block and barrel prices increased 1.5 cents and 2.75 cents and closed at $1.4875/lb. and $1.5000/lb. There were two block trades but barrels were bid higher. The cash butter market closed 0.25 cents higher at $1.3975/lb. after four trades on the last day to trade “old crop” butter. That is butter produced prior to Dec. 1, 2011.