As printed in our January 10, 2016 issue...

BUTTER PRICES HAVE BEEN MELTING despite strong demand. From December 9 to 15, spot butter fell from $2.79 to $2.07 per pound. Even so, those values were well above Germany's $1.40 and New Zealand's $1.30.

IN THE PAST EIGHT MONTHS, $1.60 per hundredweight has been shaved off USDA's All-Milk price prediction for 2016. The current projection forecasts a $16.35 midpoint with a range of $15.95 to $16.75.

WHILE EXPORTS FELL 9 PERCENT on a volume basis through October, total value dropped 27 percent in the first 10 months of the year. Exports accounted for 14.2 percent of production; imports 3.4 percent.

DOMESTICALLY, STRONG U.S. DAIRY PRODUCT SALES continued as the Restaurant Performance Index remained above 100 for the 32nd consecutive month this October. Those higher same-store sales were good news as Americans spend over half of their food dollars away from home.

MILK FLOW GREW 0.6 PERCENT in November. California fell 4.4 percent or 149 million pounds while Wisconsin rose 4.3 percent or 96 million pounds. Kansas, New Mexico, Oregon, Texas, Utah, Virginia and Washington all reduced milk output as well. South Dakota was up 13.1 percent.

IT TOOK 12 COUNTIES in California and other Federal Milk Marketing Orders (FMMO) to produce 25 percent of the nation's milk last May, reported Kansas City FMMO administrators. In all, 58 counties shipped 50 percent of the milk while 186 provided 75 percent of U.S. needs.

MILK OUTPUT CONTINUED TO FALL in New Zealand, the world's largest dairy exporter. Fonterra projected a 6 percent seasonal reduction.

COUNTRY OF ORIGIN LABELING (COOL) WAS REPEALED as part of a comprehensive budget bill. That action could eliminate the potential payout of $1 billion in damages to Canada and Mexico. It also paved the way for continued trade in beef and pork products.

FARMS AND OTHER SMALL BUSINESSES have continued access to Section 179 tax credits. Permanently extended, these entities can deduct up to $500,000 in capital investment, up from the $25,000 limit. Also, there was a five-year extension of the 50 percent bonus depreciation.

A STREAMLINED 100,000-POUND LIMIT for all trucks has been enacted on the interstate highway system. A significant improvement for moving milk across state lines, the highway bill passed by Congress eliminated the previous 80,000-pound limit in 17 states.

SIGHTING SIGNIFICANT PUSHBACK, Senate Majority Leader Mitch McConnell (R-Ky.) said he would resist a vote on the Trans-Pacific Partnership (TPP) until at least the period immediately following this fall's national election. Support for the measure has waned among Republicans.
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