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DairyProfit Update for Aug. 31, 2012

July MILC payment: $1.64

With USDA’s Ag Prices report providing “final” feed prices used in the Milk Income Loss Contract program payment formula, the July MILC payment will be $1.6382/cwt.,  up 27¢ from June’s payment.

 

Milk-feed price ratio steady

Higher corn, soybean and alfalfa hay prices offset slightly higher milk prices, leaving the August preliminary milk-feed price ratio virtually unchanged from July. The August 2012 ratio is 1.35, up from a revised estimate of 1.34 in June 2012, but below 1.83 for August 2011. It marks the 17th consecutive month below 2.0. The index is based on the current milk price in relationship to feed prices for a ration of 51% corn, 8% soybeans and 41% alfalfa hay.

 

Milk-feed price ratio

 

Aug.

July *

Aug. 

Product

 2012

 2012

2011

Milk ($/cwt.)

17.80

16.90

22.10

Corn ($/bushel)

7.54

7.14

6.88

Soybeans ($/bushel)

15.90

15.40

13.40

Alfalfa hay ($/ton)

203

198

196

Milk-feed price ratio

1.35

1.34

1.83

* Revised from previous reports

Source: USDA Ag Prices report

 

Cull cow prices

Estimated U.S.  August cull cow prices (beef and dairy combined) averaged $80.00/cwt., down 90¢/cwt. from July 2012, but still $9.20/cwt. more than August 2011 ($70.80/cwt.).

 

Ag weather & drought update (Aug. 31)

Posted by Brad Rippey, USDA Meteorologist, Office of the Chief Economist

Hurricane Isaac grabbed most of the weather headlines in recent days, but drought remains deeply entrenched across nearly two-thirds of the continental United States.  According to the latest U.S. Drought Monitor, dated Aug. 28, drought covered 62.9% of the lower 48 states, down only slightly from a peak of 63.9% on July 24.  However, during the five-week period from July 24 to August 28, the portion of the country in exceptional drought increased from 2.4 to 6.0%.

In fact, hot weather in recent days across the central and northern Great Plains has caused further deterioration in pasture conditions.  According to USDA’s National Agricultural Statistics Service, at least half of the rangeland and pastures were rated in very poor to poor condition on Aug. 26 in every Great Plains state (from Texas to Montana and North Dakota).  Overall, 20 states – from California to Ohio – are reporting at least 50% of their rangeland and pastures in very poor to poor condition.  The list is topped by Missouri (99% very poor to poor), Nebraska (95%), Kansas (92%), and Illinois (90%).

The good news for Missouri and Illinois is that heavy rainfall associated with Isaac’s remnant circulation is spreading across the southern Corn Belt. Additional rainfall could reach 2 to 6 inches or more from the Mid-South into the eastern Corn Belt, where positive impacts of Isaac’s rainfall will include pasture recovery and replenishment of soil moisture in preparation for the soft red winter wheat planting season.

Visit www.usda.gov/drought for the latest information regarding USDA’s Drought Disaster response and assistance.

 

MARKETS: Cheese, Class III futures fall some more

Today's market closing prices:

Butter: unchanged, at $1.84/lb.

Cheddar blocks: down 3.75¢, to $1.82/lb.

Cheddar barrels: down 3.0¢, to¢, to $1.7775/lb.

Grade A nonfat dry milk: unchanged, at $1.70/lb.

Extra Grade nonfat dry milk: unchanged, at $1.6250/lb.

Class III milk: 22¢ to 43¢ lower through December 2012; 1¢ to 13¢ lower, January-November 2013. Based on current CME closing prices, the average for September-December 2012 is $19.61/cwt.; the full year 2012 average is $17.35/cwt.; and the 2013 average is $18.71/cwt.

 

Corn lower; soybeans, meal mixed

Corn: -5¢ to -9¢, December 2012 through July 2013. The September-December 2012 average is $8.02/bu.; 2013 average is $7.42/bu.

Soybeans: -6¢ to -7¢ through January 2013; +3¢ to +10¢, February-December 2013. The September-November 2012 average is $17.60/bu.; 2013 average is $15.54/bu.

Soybean meal: -$1.00 to -$2.20/ton, September 2012 through January 2013; +$2.60 to +$5.10/ton, March through December 2013. The September-December 2012 average is $538.90/ton; 2013 average is $440.41/ton.

 

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