DairyProfit Update for Oct. 18, 2012
Additional LGM-Dairy resources
As a follow-up to the article in Sept. 17 DairyProfit Update, dairy producers can also find an LGM-Dairy specific agent on the LGM-Dairy website maintained by Prof. Brian Gould (firstname.lastname@example.org) of the Department of Agricultural Economics at the University of Wisconsin-Madison (http://future.aae.wisc.edu/lgm_dairy.html). The LGM-Dairy Analyzer software system contained within the software section (http://future.aae.wisc.edu/lgm_analyzer/) is being used extensively across the U.S. by insurance providers and dairy farm operators to help plan for the Oct. 26 LGM-Dairy contract offering, and to examine the performance of previously purchased contracts.
Dairy cow slaughter trend continues
U.S. dairy cull cow slaughter continued at a high volume during the first week of October, topping 63,000 head for the fourth consecutive week. Since mid September, weekly slaughter has averaged 63,600 head, with the year-to-date total of cows slaughtered under federal inspection at 2.35 million head, up 133,600 from the same period a year ago.
AFBF survey prices
According to the American Farm Bureau Federation’s quarterly Marketbasket Survey, shoppers in 26 states reported paying the following average prices for milk in half-gallon containers in the third quarter of 2012:
• regular milk: $2.31, up 10¢ from the prior quarter, but down 3% compared to the same quarter a year earlier. (The price for one gallon of regular milk was $3.54, up 18¢ from the prior quarter, but down about 3% from the third quarter of 2011.)
• “rbST-free” milk: $3.35, down 22¢ from the previous quarter, and 1% less than the third quarter of 2011. It is about 45% higher than the reported price of a half-gallon of regular milk. The retail markup on “rbST-free” milk = $1.04/half-gallon X 23.25 half-gallons/cwt. = $24.18/cwt.
• organic milk: $3.81, down 9¢ compared to the second quarter of 2012, and down 3% compared to the third quarter a year earlier. It is about 65% higher than the reported price of a half-gallon of regular milk.
MARKETS: Cheese drops a penny; Class III futures rebound
Today's market closing prices:
Butter: up 0.5¢, to $1.88/lb.
Cheddar blocks: down 1.0¢, to $2.00/lb.
Cheddar barrels: down 1.0¢, to $1.9175/lb.
Grade A nonfat dry milk: unchanged, at $1.56/lb.
Extra Grade nonfat dry milk: down 7.5¢, to $1.56/lb.
Class III milk: 39¢ to 50¢ higher, November 2012 through February 2013. Based on current CME closing prices, the average for October-December 2012 is $20.76/cwt.; the full year 2012 average is $17.59/cwt.; and the 2013 average is $18.82/cwt.
Corn, soybean, meal futures move higher again
Corn: +12¢ to +15¢ through September 2013. The 2013 average is $7.12/bu.
Soybeans: +19¢ to +38¢ through September 2013. The 2013 average is $14.55/bu.
Soybean meal: +$5.00 to +$9.60/ton through September 2013. The 2013 average is $415.65/ton.
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