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As printed in our December 2015 issue...



CLASS III FUTURES FELL BY $1.60 for December to May contracts since June trading. With a $14.90 average for the six-month window, half of the price reduction in the CME contracts took place during the past 30 days.

EVEN WITH THOSE REDUCED PROJECTIONS, U.S. prices remained well above those of the top two dairy exporters - New Zealand and the European Union. As a result, EU cheese imports flowed into America and were up 28 percent through September when compared to last year.

THIS PRICE DISPARITY has caused U.S. dairy product exports to slump. Moving forward, U.S. milk prices will continue to fall toward those of its export competitors unless domestic consumption can soak up extra supply.

THE POSSIBILITY OF SOME RECOVERY in milk prices could happen in the second half of next year, projected Mark Stephenson in Milk Check Outlook on page 759. However, the rebound may not be dramatic as there is more downside risk than upside potential next year.

REDUCED MARGINS, especially on the coasts, continued to dampen milk production. For October, milk flow fell in California (-5.5 percent), New Mexico (-2.9), Pennsylvania (-1.7), Utah (-1.6), Oregon, Vermont and Virginia (all -1.4), Arizona (-1.3), Washington (-0.7) and Kansas (-0.4).

WHILE SOUTH DAKOTA EXPERIENCED the largest percentage change, up 13.3 percent; Wisconsin's 4.5 percent growth meant an additional 105 million pounds of milk. Michigan matched that percentage and shipped 37 million pounds more. Nationally, milk was up 0.1 percent.

REVERSING AN IMMIGRATION TREND dating back to the 1970s, more Mexican immigrants have been leaving the U.S. than coming into the country, reported the Pew Research Center. This situation has taken place due to a reduction in illegal border crossings.

AN ESTIMATED 11.7 MILLION MEXICAN IMMIGRANTS now live in the U.S., reported the study. That was down from a peak of 12.8 million in 2008. Roughly 6.1 million are stateside with legal documentation.

THE CALIFORNIA FEDERAL ORDER HEARING wrapped up on November 18. Testimony took 40 days and included over 100 witnesses, resulting in an official transcript expected to approach 10,000 pages.

MANY STEPS REMAIN. Post-hearing briefs are due late March and reply briefs mid-May. Then, USDA will publish a recommended decision, and interested parties can submit comments on it. After that, USDA will publish its final decision with a producer referendum to follow in 2017.

BRIEFLY: Dairy cow culling rose by 4,790 head or 2 percent in October. In the first 10 months, culls rose 89,000 head. October's Milk-Feed-Price Ratio posted the year's best mark of 2.29 primarily due to low feed prices.

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