DairyProfit Update for May 15, 2012
Lower futures prices for feedstuffs could reduce Milk Income Loss Contract (MILC) payments, according to latest estimates from Brian Gould, University of Wisconsin-Madison Department of Agriculture and Applied Economics professor.
USDA has already announced MILC payments ($/cwt.) of 38.9¢ for February and 82.6¢ for March.
Using May 14 settlement futures prices for MILC-related contracts, Gould revised estimates for MILC payments for the remainder of 2012 and early 2013. He currently expects MILC payments to peak this spring and summer, topping $1.00/cwt. in April and July.
By month, estimated MILC payments are: April – $1.18; May – 75¢; June – 91¢; July – 1.03; Aug. – 81¢; Sept. 38¢; and Oct. – 11¢. Estimates are always subject to change.
To see a new summary spreadsheet, go to the UW-Madison “Understanding Dairy Markets” website: http://future.aae.wisc.edu/collection/software/current_MILC_est.xls.
CWT assists with 4.1 million lbs. of cheese, butter and AMF export sales
Cooperatives Working Together (CWT) accepted 28 requests for export assistance from Dairy Farmers of America, Darigold, Foremost Farms, Maryland & Virginia Milk Producers Cooperative and United Dairymen of Arizona to sell 2.617 million lbs. of cheddar and Monterey Jack cheese and 1.461 million lbs. of butter and anhydrous milkfat to customers in Asia, Central America, North Africa and the Middle East. The product will be delivered May through July 2012.
So far in 2012, CWT has assisted member cooperatives in making export sales of 50.3 million lbs. of cheese and 42.8 million lbs. of butter/AMF to 27 countries on four continents. On a butterfat basis, the milk equivalent of these exports is 1.396 billion lbs., or the same as the annual milk production of 66,400 cows.
MARKETS: Butter up a little more; Class III mixed
Today's market closing prices:
Cheddar barrels: unchanged, at $1.45/lb.
Cheddar blocks: unchanged, at $1.50/lb.
Butter: up 1.23¢, to $1.3525/lb.
Extra Grade nonfat dry milk: unchanged, at $1.0825/lb.
Grade A nonfat dry milk: unchanged, at $1.1225/lb.
Class III milk: steady to mixed in a narrow range. Based on current closing prices, the 2012 average is $15.61/cwt.; 2013 average is $15.83/cwt.
Grain futures higher
Corn: +3¢ to +14¢/bushel through December 2013. The 2012 average is $5.45/bu.; 2013 average is $5.32/bu.
Soybeans: +5¢ to +26¢/bushel through November 2013. The 2012 average is $13.63/bu.; 2013 average is $12.59/bu.
Soybean meal: +$2.20 to +$13.70 through December 2013. The 2012 average is $390.22/ton; 2013 average is $336.08/ton.