DairyBusiness Update for March 28, 2013
February MILC: 52.22¢ (we think)
With USDA’s Ag Prices report establishing the feed cost adjuster, the February Milk Income Loss Contract (MILC) program payment will be 52.22¢/cwt. However, there is still confusion over whether sequestration will force USDA to reduce the MILC payment.
Brian Gould, UW-Madison dairy economist, said preliminary March milk and feed price estimates indicate the March MILC payment will be about 76.96¢/cwt.
Gould also updated projected FY ’13 MILC payments based on milk and feed futures prices at the close of trading on March 27. The projected payments (cents/cwt.) are: April – 67.98¢; May – 37.16¢; June – 16.85¢; July-September – 0.00¢. Visit Gould’s “Understanding Dairy Markets” website: http://future.aae.wisc.edu/.
USDA Prospective Plantings: Corn acreage up; soybeans down a little
U.S. corn growers intend to plant 97.3 million acres of corn for all purposes in 2013, up slightly from last year and 6% more than 2011, according to USDA’s Prospective Plantings report, released March 28. If realized, this will represent the highest planted acreage in the United States since 1936, when an estimated 102 million acres were planted.
Soybean planted area for 2013 is estimated at 77.1 million acres, down slightly from last year but the fourth highest on record, if realized. Compared with 2012, planted area is down across the Great Plains with the exception of North Dakota. Nebraska and Minnesota are expecting the largest declines compared with last year, while Illinois and North Dakota are expecting the largest increases.
Hay acreage steady: USDA also estimated the 2013 area to be harvested for all hay, based on producer intentions. Hay will be harvested from about 56.419 million acres, virtually unchanged from 2012 actual harvested acreage, but up about 766,000 acres from 2011.
Cotton acreage sharply lower: For dairy producers feeding cottonseed, cotton appears to one of the crops most affected by higher corn acreage. Planted area for 2013 is expected to total 10.0 million acres, 19% less than last year.
• To see the full Prospective Plantings report, visit http://usda01.library.cornell.edu/usda/current/ProsPlan/ProsPlan-03-28-2013.pdf
USDA releases Grain Stocks report
USDA also released its latest Grain Stocks report on March 28. Corn stocks in all positions on March 1, 2013 totaled 5.40 billion bushels, down 10% from March 1, 2012. Of the total stocks, 2.67 billion bushels are stored on farms, down 16% from a year earlier. Off-farm stocks, at 2.73 billion bushels, were down 4% from a year ago. The December 2012-February 2013 indicated disappearance is 2.63 billion bushels, compared with 3.62 billion bushels during the same period last year.
Soybeans stored in all positions on March 1, 2013 totaled 999 million bushels, down 27% from March 1, 2012. Soybean stocks stored on farms are estimated at 457 million bushels, down 18% from a year ago. Off-farm stocks, at 543 million bushels, were down 34% from last March. Indicated disappearance for the December 2012-February 2013 quarter totaled 967 million bushels, down 3% from the same period a year earlier.
• To see the latest USDA Grain Stocks report, visit http://usda01.library.cornell.edu/usda/current/GraiStoc/GraiStoc-03-28-2013.pdf
Cull cow prices improve
Estimated U.S. March 2013 cull cow prices (beef and dairy combined) averaged $82.90/cwt., up $2.00 from February’s revised estimate, but $1.13/cwt. less than March 2012.
Current trend: Since slipping somewhat during September-November 2012, March marked the fourth consecutive monthly increase in cull cow prices, and the highest monthly average since June 2012.
Source: USDA/NASS Ag Prices report, March 27
MARKETS: Butter lower; Class III futures lower
CME markets are closed Friday, March 29.
Today's market closing prices:
Butter: down 1.0¢, to $1.63/lb.
Cheddar blocks: unchanged, at $1.6925/lb.
Cheddar barrels: unchanged, at $1.5975/lb.
Grade A nonfat dry milk: up 1.0¢, to $1.56/lb.
Extra Grade nonfat dry milk: unchanged at $1.56/lb.
Class III milk: -4¢ to -21¢ through December 2013. Based on current CME closing prices, the 2013 average is $18.34/cwt.; and the 2014 average is $16.71/cwt.
USDA reports send corn, soybean futures sharply lower
Corn: -32¢ to -40¢ per bushel through December 2013. The 2013 average is $6.18/bu.
Soybeans: -27¢ to -49¢ per bushel through December 2013. The 2013 average is $13.34/bu.
Soybean meal: -$9.70 to -$18.50/ton through December 2013. The 2013 average is $374.72/ton.
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