DairyBusiness Update for 9.19.13
August milk production in the 23 major dairy states totaled 15.73 billion lbs., up 2.7% from August 2012. It’s the fifth month in a row monthly output exceeded the same month a year earlier.
Nationally, August production was estimated at 16.84 billion lbs., up 2.6% from a year ago. July’s preliminary estimate was revised upward slightly, to 16.08 billion lbs., up 1.3% from July 2012.
Checking the top producers, August 2013 production was up 2.7% in California, the first time since June 2012 that production exceeded the same month a year earlier. Wisconsin was up 1.7%; Idaho was down 0.7%; New York was up 4.2%; Pennsylvania up 3.5%; and Minnesota was up 1.9%.
Among the 23 major dairy states, only two states showed production declines compared to a year earlier: New Mexico (-1.2%) and Idaho (-0.7%). Largest percentage increases were in Kansas (+8.8%), Iowa (+8.0%), Florida (+6.9%), Arizona (+5.5%), Michigan (+3.9%) and Texas (+3.3%).
The next Milk Production report will again include milk cow numbers and output per cow, data that was suspended due to sequestration.
California 2013 second quarter (Q2) statewide weighted average total milk production costs were up 15¢/cwt. (+0.8%) compared to the same quarter in 2012, according to the Dairy Marketing Branch of the California Department of Food & Agriculture. Including an allowance for return on management and investment, total costs were up 20¢/cwt. (+1.1%).
Compared to the previous quarter (Q1 2013), all costs categories were down in Q2 2013.
Total feed costs averaged $11.35/cwt. in Q2 2013, up 4% from a year earlier, but down from the previous quarter. Feed costs represented 66.8% of total costs. Average hired labor, replacement and operating costs were all lower than the year before.
Looking at regional differences, the North Coast remains the most expensive region to produce milk, with total costs and allowances averaging $24.19/cwt. during the second quarter of 2013. Southern California average costs for the quarter were the lowest, at $17.88/cwt.
To see the full report, visit www.cdfa.ca.gov/dairy/uploader/postings/copcostcomp/Default.aspx
USDA estimated 266,000 culled dairy cows were slaughtered under federal inspection in August 2013, up 15,300 from July 2013, but 9,300 less than August 2012. The January-August 2013 total was estimated at 2.084 million head, 46,100 more than the same period in 2012.
In USDA’s weekly cow slaughter report, the Labor Day-shortened work week ending Sept. 7 saw 56,500 dairy cows slaughtered under federal inspection, the lowest total in seven weeks.
International Dairy Foods Association (IDFA) senior vice president Jerry Slominski said USDA should not move quickly to enforce the 1949 law that will come into effect Jan. 1, 2014 if the Farm Bill is not extended or updated before the end of the year. His comments came in response to U.S. Rep. Collin Peterson (D-Minn.), ranking member of the House Ag Committee, who recently called on USDA to pressure Congress to pass a new Farm Bill.
Slominski said early implementation of the “outdated law” would “dramatically and artificially” raise consumer prices of dairy products and harm the dairy industry. Read more …
Scare tactics being used again on consumers regarding milk prices
One more time, some members of Congress are using scare tactics on consumers in an attempt to obtain a new Farm Bill, according to Arden Tewksbury, manager, Pro-Ag. In addition, dairy farmers are being used as pawns by the same Congressmen as an example to what the consequences could be to consumers if a new Farm Bill is not passed.
These same Congressmen are saying that prices to consumers could double in price if a new Farm Bill is not passed by Oct. 1. The assertion is that if a new Farm Bill is not passed, then the 1949 Ag Act would be implemented. Read more …
MARKETS: Blocks slip a little; Class III futures mostly slightly higher
Cash cheese didn’t do much this morning, anticipating this afternoon’s August Milk Production report, according to DairyBusiness Update associate Editor Lee Mielke. The 40-lb. blocks slipped 0.25¢, to $1.7950/lb., on an uncovered offer. The 500-lb. barrels remained at $1.7675/lb., with a bid at $1.7575/lb. going unfilled.
Butter had 7 trades, with 2 cars going for $1.5350/lb., but the final sale returned the price to $1.53/lb. after gaining 1¢ yesterday. Three offers at $1.54/lb. kept the buyers sitting on their hands.
Powder was steady, with Grade A holding at $1.83/lb.; 1 bid at $1.82/lb. went unfilled. Extra Grade remained at $1.78/lb., with no activity.
Today’s market closing prices:
Butter: unchanged, at $1.53/lb.
Cheddar blocks: down 0.25¢, to $1.7950/lb.
Cheddar barrels: unchanged, at $1.7675/lb.
Grade A nonfat dry milk: unchanged, at $1.83/lb.
Extra Grade nonfat dry milk: unchanged, at $1.78/lb.
Class III milk: -1¢ to +12¢ through November 2014. Based on current CME closing prices, the September-December 2013 average is $17.73/cwt.; with an overall 2013 average of $17.72/cwt.; and a 2014 average of $16.82/cwt.
Corn futures up; soybeans, meal futures lower
Today’s futures prices at the Chicago Mercantile Exchange:
Corn: +2¢ to +3¢ through December 2014, settling in a range of $4.59-$4.97/bushel.
Soybeans: -5¢ to -9¢ through July 2014. November 2013 through September 2014 contracts settled in a range of $12.27-$13.39/bushel.
Soybean meal: -$5.40 to -$2.40/ton through December 2014. October 2013-September 2014 contracts settled in a range of $375-$422/ton.
• Market analyst Jerry Dryer, editor of the Dairy and Food Market Analyst, says he’s not as bullish as USDA’s milk price projections were in the USDA September dairy outlook.
• Mike Hutjens provides his weekly “Feed Facts” segment.
USDA issues its August Cold Storage report Monday afternoon, Sept. 23, and the monthly Ag Prices report – including the latest milk-feed price ratio – is out Friday, Sept. 27.
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