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Due to sequestration, USDA is eliminating various reports, including the monthly milk production reports. National Milk Producers Federation President and CEO Jerry Kozak said this is an extremely important tool and its elimination will have a negative impact on the entire dairy industry. While other statistical reports will end, Kozak said, "dairy is the only major commodity that will be substantially affected."

FAPRI:dairy industry will benefit from big corn crop
Assuming normal weather, the University of Missouri Food and Agricultural Policy Research Institute is forecasting a record-large corn crop in 2013. University of Missouri economist Scott Brown said that may provide some relief to animal agriculture. "For livestock and dairy producers, a good crop in the bin is going to be critical for a good outlook in 2013; if we get average crops, feed costs are going to be much more palatable for livestock and dairy producers." FAPRI was established in 1984 to provide baseline projections for U.S. agriculture.

USDA forecasts increase in milk production
In the latest USDA Supply/Demand Report, the Agriculture Department increased its forecast for 2013 milk production from February. A slower pace for herd reduction and higher per-cow milk production in the first quarter are responsible for the bump. The Class III price forecast was reduced from a month earlier, ranging from $17.55 to $18.15 per hundredweight. A month earlier, the Class III milk price was projected to range from $17.70 to $18.40 on an annualized basis. The prices for cheese were lowered and the forecasted price for butter was left unchanged. The projected price for nonfat dry milk was raised, due to stronger export demand.

Positive export news
The economic situation facing competitors in the global dairy export market may benefit the U.S. dairy industry. U.S. Dairy Export Council spokesman Alan Levitt says the United States is in a very good position. "Because of the drought in New Zealand , their production is really pulling back significantly and Australia is in, somewhat, the same boat," said Levitt. "Argentina's production has been down; Europe is down because of low margins." While margins are tight, Levitt says the U.S. dairy industry is one of the only countries increasing milk production and has an opportunity to increase market share in the year ahead.

Peterson, Boehner discuss Farm Bill options
According to House Agriculture Committee Ranking Member Collin Peterson, House Speaker John Boehner does not want another farm bill extension in 2013. After a recent conversation between Peterson and Boehner, the Minnesota congressman was optimistic something would happen this year. To move the process forward, Peterson urged Boehner to work with Senate Majority Leader Harry Reid to find consensus on agriculture spending cuts. "Whatever the number is, if its $30 billion, $35 billion, $25 billion, we can do it, but give us a number that's agreed to so we don't get caught up in this war between the two chambers." Dairy policy reform was a hurdle late in 2012, but Peterson remains committed to dairy policy reform. Without reform, "I don't think there will be a bill." The House Agriculture Committee is expected to mark up the farm bill in late spring or early summer.

Alfalfa group lobbies for a better safety net
During its recent legislative fly-in, the National Alfalfa and Forage Alliance emphasized the need for an adequate safety net for its growers. Alfalfa is not considered a Title 1 crop and is not eligible for the risk management programs being considered in Congress. NAFA said that has the potential of encouraging producers to shift away from non-program crops, like alfalfa. In the current budget environment, research dollars are also in jeopardy. NAFA said the dollars available for alfalfa research are already insufficient, especially when compared to corn, soybeans and wheat.

House budget proposes bigger cut for ag spending
The new budget proposal from House Budget Committee Chair Paul Ryan takes a bigger cut from agriculture spending than proposed by the House and Senate Agriculture Committees. In light of a strong farm economy, the Wisconsin congressman and former vice presidential candidate says farm programs should be reexamined. In his words, "taxpayers should not finance payments for a business sector that is more than capable of thriving on its own." Ryan does not propose specific cuts, but asks the House Agriculture Committee to come up with reforms to save $31 billion over the next decade. Last year, the House farm bill would have saved $26 billion over ten years. In addition to the $31 billion cut from commodity programs, the Ryan budget takes an additional $18 billion from conservation spending.

Budget proposal is detrimental to agriculture, said NFU Leader
The budget proposal from House Budget Committee Chair Paul Ryan is very similar to his budget plan last year. National Farmers Union vice president of government relations Chandler Goule said this proposal is very detrimental to agriculture. "One of the main reasons we had trouble getting the farm bill to the House floor was because the Ryan budget set such unrealistic parameters around numbers that needed to be met, not only through farm program cuts, but the deep cuts into the nutrition programs. They did the same thing again this year," Goule said. "The ranking member already put out a statement that they did this last year and they are setting us up for another farm bill extension, which will be very detrimental to the agriculture community that has to go through another year of uncertainty."

House bill would impact use of antibiotics
New York Representative Louise Slaughter has introduced legislation to regulate what she calls the overuse of antibiotics on the farm. Slaughter claims action is needed to prevent the acceleration of antibiotic resistance in humans. This is the fourth time Slaughter has introduced a bill of this type since 2007.

Merrigan leaves USDA
Deputy Agriculture Secretary Kathleen Merrigan is leaving USDA. Merrigan is best known for her advocacy for the National Organic Program and the development of USDA's 'Know Your Farmer, Know Your Food' initiative. Merrigan has not announced her future plans.

DFA to close Missouri plant
Dairy Farmers of America plans to close its Monett, Mo. processing plant. This facility produces cheese curd and liquid whey. A milk deficit in the region is blamed for the financial decision.

Trivia challenge
Gina McCarthy is President Obama's choice as the new administrator for the Environmental Protection Agency. McCarthy has served as an assistant administrator at EPA. That answers our last trivia question. For this edition, we know Wisconsin Congressman Paul Ryan chairs the House Budget Committee, but who chairs the Senate Budget Committee? We'll have the answer in the next edition of Dairy Star.

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