DairyProfit Update for Dec. 11, 2012
USDA’s World Ag Supply & Demand Estimates (WASDE) report, released Dec. 11, left 2012 and 2013 milk production estimates unchanged from a month earlier.
• 2012 production and marketings were projected at 199.7 billion lbs. and 198.7 billion lbs., respectively. If realized, 2012 production and marketings would be up about 1.8% and 1.7%, respectively, from 2011.
• 2013 milk production and marketings were also unchanged at 199.7 billion lbs. and 198.7 billion lbs., respectively.
Compared to a month ago, 2012 and 2013 milk and product prices were mixed, with projected 2012 cheese and butter prices reduced, but nonfat dry milk and dry whey prices raised. In 2013, butter price projections were reduced, with cheese, nonfat dry milk and dry whey all forecast higher.
Projected producer Class III and Class IV milk prices were just as mixed, with only minor changes forecast. As a result, the 2012 all-milk price was unchanged at $18.50-$18.60/cwt., while the 2013 all-milk price was narrowed to $19.15-$19.95/cwt.
On the cost side of the dairy equation, the 2012/13 estimated season-average corn price range was lowered 15¢-25¢/bushel, in a range of $6.80-$8.00/bushel. The U.S. season-average soybean price was projected 45¢/bushel lower on both ends of the range, at $13.55-$15.55/bushel; and soybean meal prices were projected down $15/ton compared to last month’s forecast, at $440-$470/ton.
Beef price outlook stays strong
Even though USDA raised 2013 beef production estimates, USDA’s World Ag Supply & Demand Estimates report also raised the beef price forecast slightly, which could strengthen cull cow prices. Projected beef production was raised, due to higher fed and non-fed cattle slaughter and heavier carcass weights. Steer prices were raised to nearly $123/cwt. for 2012, and in a range of $124-$134/cwt. in 2013 (up $1 on each end of the range), reflecting strong demand for cattle through the end of this year and into 2013.
Crop Report: Cottonseed
While USDA’s Crop Production report, also released Dec. 11, primarily covered fruits and nuts, it did update cottonseed estimates. The 2012 harvest is estimated at 5.842 million tons, down about 26,000 tons from the October estimate, but 472,000 tons more than 2011.
MARKETS: Cheese holds; Class III futures up
Today's market closing prices:
Butter: up 0.5¢, to $1.5950/lb.
Cheddar blocks: unchanged at $1.76/lb.
Cheddar barrels: unchanged at $1.66/lb.
Grade A nonfat dry milk: unchanged, at $1.5575/lb.
Extra Grade nonfat dry milk: unchanged, at $1.56/lb.
Class III milk: +4¢ to +24¢, January through December 2013. Based on current CME closing prices, the 2012 average is $17.43/cwt.; the 2013 average is $18.46/cwt.; and the 2014 average is $16.18/cwt.
Corn and soybean futures lower; meal mixed
Corn: -2¢ to -9¢ through December 2013. The 2013 average is $6.92/bu.
Soybeans: -3¢ to -13¢ through November 2013. The 2013 average is $14.21/bu.
Soybean meal: -$2.80 to +$3.30/ton through December 2013. The 2013 average is $413.46/ton.
New: DairyBusiness Weekly
DairyBusiness Weekly, our first digital-only publication, launched last November. Produced 48 times per year, it’s delivered free every Wednesday to readers’ inboxes. It combines the resources of the entire DairyBusiness content team in a short and easy-to-read digital format, complete with videos, audio, direct links, social media and more. To subscribe, visit www.dairybusiness.com.