DairyBusiness Update: June 11, 2014Print
WASDE: Milk Output Estimates Unchanged/Milk Prices Raised
Milk production forecasts for 2014 and 2015 in USDA’s latest World Agricultural Supply and Demand Estimates (WASDE) report, released June 11, were unchanged from last month.
• 2014 production and marketings were projected at 206.1 billion lbs. and 205.1 billion lbs., respectively. Expected marketings was reduced 100 million lbs. from last month. If realized, 2014 production and marketings would be up 2.4% from 2013.
• 2015 production and marketings were projected at 212.1 billion lbs. and 211.1 billion lbs., respectively. If realized, 2015 production and marketings would be up about 2.9% from 2014.
Export forecasts were raised on a fat basis for 2014 and 2015 with higher cheese exports. However, growth in 2014 exports is constrained by weaker butter sales as higher domestic prices have made U.S. butter less competitive on world markets.
Skim-solids exports reflect strength in cheese and nonfat dry milk (NDM) exports. Imports for 2014 and 2015 are raised on higher imports of food ingredients.
Cheese and butter prices for 2014 were forecast higher on strong demand for cheese and tight supplies of butter. The NDM price was lowered, but the whey price forecast was unchanged.
Strength in butter prices is expected to carry into early 2015 resulting in an increase in the 2015 price, but the prices of cheese, NDM, and whey were unchanged from last month.
Class III and Class IV prices for 2014 and 2015 were raised on stronger butterfat values. The all milk price was forecast at $22.90 to $23.30 per cwt for 2014 and $19.75 to $20.75 per cwt for 2015.
Dairy price forecasts
Product 2013 2014 2015
Class III ($/cwt) 17.99 20.80-21.20 16.95-17.95
Class IV ($/cwt) 19.05 21.45-21.95 18.65-19.75
All milk ($/cwt) 20.05 22.90-23.30 19.75-20.75
Cheese ($/lb.) 1.7683 2.015-2.0551.6700-1.7700
Butter ($/lb.) 1.5451 1.870-1.940 1.640-1.770
NFDM ($/lb.) 1.7066 1.820-1.860 1.605-1.675
Dry whey (¢/lb.) 0.5902 0.630-0.650 0.550-0.580
Source: USDA WASDE report, June11, 2014
WASDE: U.S. Crop Condition Best in 4 Years
Projected corn production for 2014/15 was unchanged at a record 13,935 million bushels, according to today’s WASDE. The projected U.S. corn yield remains at 165.3 bushels per acre as a slightly slower-than-normal mid-May planting progress is expected to be offset by very favorable early season crop and weather conditions.
U.S. crop conditions in the most recent Crop Progress report are the best in 4 years for the aggregated 18 reported states and better than any time since 2007 for the Corn Belt.
The projected range for the 2014/15 season-average farm price is unchanged at $3.85 to $4.55 per bushel and below this month’s lower projected 2013/14 range of $4.45 to $4.65 per bushel.
The 2013/14 price range is lowered 10 cents per bushel at the midpoint based on prices reported to date and the recent decline in nearby cash and futures prices.
Global coarse grain supplies for 2014/15 are projected 2.3 million tons higher mostly with larger corn beginning stocks and production. Higher 2013/14 corn production for Brazil and India raise 2014/15 beginning stocks for both countries. Lower 2013/14 corn exports for Argentina also add to 2014/15 beginning stocks. Higher 2013/14 corn imports boost 2014/15 beginning stocks for Colombia, Egypt, and Turkey.
Ukraine and China 2014/15 corn beginning stocks are lowered with higher 2013/14 exports for Ukraine and lower 2013/14 imports for China. Despite an increase in 2013/14 South Africa corn production, 2014/15 beginning stocks decline with higher 2013/14 consumption and exports.
Global corn production for 2014/15 is raised 2.0 million tons with increases for Ukraine, the European Union, and Russia. Ukraine and Russia production are raised 1.0 million tons and 0.5 million tons, respectively, on higher expected yields as the latest trade data for both countries confirm further expansion in the use of imported hybrid seed corn. European Union production is raised 0.6 million tons with increases for Germany and central Europe reflecting improved early season growing conditions in the region. Serbia corn output is reduced slightly with less expected area.
WASDE Oilseed Update
This month’s U.S. soybean supply and use projections for 2014/15 include a small reduction in beginning and ending stocks, according to the WASDE. Lower beginning stocks reflect a higher crush projection for 2013/14. Soybean crush for 2013/14 is raised 5 million bushels to 1,700 million reflecting an increase in projected soybean meal exports. Soybean meal exports are projected at 11.5 million short tons, up 0.4 million from last month reflecting stronger-than-expected shipments this spring. Soybean ending stocks for 2013/14 are projected at 125 million bushels, down 5 million from last month. Ending stocks for 2014/15 are also reduced 5 million bushels to 325 million.
The 2014/15 season-average price for soybeans is projected at $9.75 to $11.75 per bushel, unchanged from last month. Soybean meal and soybean oil prices are projected at $355 to $395 per short ton, and 37 to 41 cents per pound, respectively. Product price projections are also unchanged from last month.
Global oilseed production for 2014/15 is projected at 516.0 million tons, up 0.8 million from last month. Rapeseed production for the European Union is raised 0.5 million tons to 22.0 million on improved yield prospects, mainly for the United Kingdom, Germany, Poland, and Romania. Other changes include increased soybean production for the European Union and increased cottonseed production for the United States. Cottonseed production is also raised for India for 2013/14.
WASDE “Shepherd” Retires
Dr. Gerald Bange retired as Chairperson for the World Agricultural Outlook Board on May 31, 2014. A USDA employee since 1971, Dr. Bange worked for USDA’s Agricultural Research Service and Foreign Agricultural Service before joining the Board in 1983. Bange was appointed Chairperson in 1994 and supervised the publication of 221 consecutive WASDE reports. Under his leadership, the WASDE report has become the authoritative source in the U.S. and around the world for commodity market outlook and intelligence.
Weather Allows Planting Catch up
Above-average temperatures and below-average precipitation throughout most of the United States in May allowed producers to catch up in planting progress after an April marked by cool and wet field conditions, according to USDA’s monthly Crop Production report issued June 11. Areas of the northern Great Plains, Mississippi Valley, southern Rocky Mountains, and Texas recorded average temperatures between 0 and 2°F below normal. The rest of the Nation recorded above-average temperatures with the Pacific coast and areas of the mid-Atlantic coast recording average temperatures for the month over 2°F below normal. Some areas along the Gulf of Mexico recorded rainfall over 4 inches above normal for the month of May.
As May began, many States in the Corn Belt continued to be hampered by cool, wet soil conditions. By May 4, producers had planted 29 percent of this year’s corn crop, 18 percentage points ahead of last year but 13 percentage points behind the five-year average. Aided by improved weather and field conditions, producers planted 30 percent of the Nation’s corn crop during the week ending May 11, bringing the overall total to 59 percent complete, 33 percentage points ahead of last year and slightly ahead of the five-year average.
As the month proceeded, planting progress was ahead of normal in the southern regions of the Corn Belt but continued to lag well behind the five-year averages in the northern States of Michigan, Minnesota, and Wisconsin. Dry, warm conditions aided in the completion of planting and crop development towards the end of the month. By June 1, ninety-five percent of this year’s corn crop was planted, 5 percentage points ahead of last year and slightly ahead of the five-year average. Nationally, 80 percent of the corn crop had emerged by June 1, nine percentage points ahead of last year but equal to the five-year average. Overall, 76 percent of the corn was reported in good to excellent condition on June 1, compared with 63 percent at the same time last year.
FDA Backs Down on Aged Cheese Rule
Forbes reports that the FDA is backing away (at least temporarily) from a policy statement that declared cheese makers would no longer be able to age their cheese on wooden boards. The statement caused outrage in the artisan cheese community and consumers quickly came to the aid of the industry signing onto a petition and expressing their outrage through social media. The American Cheese Society released a position statement, and it was clear that the industry was prepared to fight back if the FDA did not change its position.
Today, the FDA claimed that it in fact had not issued a new policy, they stated:
“The FDA does not have a new policy banning the use of wooden shelves in cheese-making, nor is there any FSMA requirement in effect that addresses this issue. Moreover, the FDA has not taken any enforcement action based solely on the use of wooden shelves.
In the interest of public health, the FDA’s current regulations state that utensils and other surfaces that contact food must be “adequately cleanable” and properly maintained. Historically, the FDA has expressed concern about whether wood meets this requirement and has noted these concerns in inspectional findings. FDA is always open to evidence that shows that wood can be safely used for specific purposes, such as aging cheese.
The FDA will engage with the artisanal cheese-making community to determine whether certain types of cheeses can safely be made by aging them on wooden shelving.”
Reda of the American Cheese Society’s reaction at: http://forbes.com/sites/gregorymcneal/2014/06/10/fda-backs-down-in-fight-over-aged-cheese/.
Lagging NDPSR Prices: Cheese & Powder Down/Butter & Whey Up
The latest Agricultural Marketing Service’s National Dairy Products Sales Report (NDPSR), released this afternoon, shows the U.S. average block Cheddar cheese price at $2.0233/lb., down 2.8¢ from the week before, while the barrels averaged $2.0207, down 3.6¢. Butter jumped 5.6¢, to $2.1850/lb. Nonfat dry milk averaged $1.8435/lb., down 4.7¢, and dry whey averaged 67.69¢/lb., down 0.3¢. These prices are used in determining Federal order Class milk prices.
California Powder Price Dips 6 Cents
The California Department of Food and Agriculture announced its latest surveyed nonfat dry milk prices yesterday at $1.8454/lb. for the week ending June 6, on sales of 10.16 million lbs. The price was down from $1.9057/lb. the week before, on sales of 8.38 million lbs.
International Dairy Industry Invited to Experience Designer Dairy
Producers and industry partners from across the globe are encouraged to make plans now to attend World Dairy Expo – “Designer Dairy” – September 30 through October 4 at the Alliant Energy Center in Madison, Wis., USA. Focused on the newest research, products and services that are relevant to today’s dairy operations, Expo has become the industry’s “must attend” event. Thousands of visitors from countries around the world are expected to gather at Expo to discover the latest innovations.
Visitors can choose from a variety of events during World Dairy Expo. Many will want to attend the world-class cattle competition which culminates with the naming of the Supreme Champion. Producers will want to participate in the Expo Seminars, Virtual Farm Tours and Dairy Forage Seminars, where they can interact with industry experts and top producers to exchange management ideas. International attendees are encouraged to consider participating in the annual International Dairy Short Course. This three-day dairy management course presents the latest research and technology in dairy genetics, nutrition, cow comfort and milk quality.
All should reserve time to experience the world-renown trade show, featuring more than 850 exhibiting companies from across the globe. Companies will be unveiling the latest technologies, products and services. Check out the Innovations Unveiled page on the Expo website for new products that will be featured at the 2014 event. People can plan their trade show visit by utilizing the online participating company list and interactive trade show maps.
International attendees are invited to visit the Expo website for details posted in multiple languages to access general information, daily schedule and online registration. Admission for Expo is $10 USD per day; and $30 USD for a five-day Season Pass. Be sure to register as an international attendee in the East Lobby of the Coliseum and you will receive a free pin, ribbon, souvenir tote and access to the International Lounge and International Reception.
World Dairy Expo is recognized as the meeting place for the global dairy industry. More than 70,000 dairy producers and industry experts from 90 countries travel to Madison, Wis. annually. The world-class event includes 2,500 head of North American dairy cattle competing on the famed colored shavings, more than 850 exhibiting companies in the renowned trade show, Expo Seminars, Virtual Farm Tours and exciting youth competitions. World Dairy Expo’s theme is “Designer Dairy” and will be held September 30 through October 4, 2014. Visit worlddairyexpo.com; follow us on Facebook or Twitter @WDExpo or #WDE14 for more information.
Mielke Market Daily
(A daily wrap-up of dairy markets and the things affecting them, from DairyBusiness Update associate editor Lee Mielke)
Cash 40lb. block Cheddar reversed gears this morning, following a 1¢ rise Monday and holding steady yesterday. Three sales occurred this morning, the first at $2.03/lb., the second at $2.0275/lb., and the third at $2.03/lb., down 3¢ on the day. Two bids at that price went unfilled. The 500lb. Cheddar barrels lost 1.25¢, on 3 trades, after losing 0.25¢ yesterday. The first sale today was at $1.97/lb., the second at $1.96/lb., and the final sale was at $1.9575/lb.
In heavy trading, cash butter resumed its meltdown today, after pausing yesterday, losing 2.5¢ this morning and dipping to $2.1850/lb. Twenty five carloads found new homes, the most since Sept. 20, 2013. Sixteen cars were at $2.18/lb. and the price inched back and forth from there, with the final sale at $2.1850/lb. Five bids at $2.18/lb. were not filled.
Cash powder was unchanged for the 3rd session in a row, holding at $1.8575/lb., with an offer at that price going uncovered.
Today’s Market Closing Prices
Butter: Down 2.5¢, to $2.1850/lb.
Cheddar blocks: Down 3¢, to $2.03/lb.
Cheddar barrels: Down 1.25¢, to $1.9575/lb.
Grade A nonfat dry milk: Unchanged, at $1.8575/lb.
Class III milk: June $21.31, +3¢; July $21.08, +37¢; Aug. $20.79, +30¢; & Sept. $20.63, +18¢. Based on today’s CME settlements, the Third Quarter 2014 average now stands at $20.83, +28¢ from Tuesday. The Fourth Quarter average is now at $19.65, +12¢ from Tuesday. The First Quarter 2015 average is now at $18.35, -2¢ from Tuesday.
There are no additional USDA reports which we regularly monitor the rest of the week. Looking to next week, there is plenty for the market to feed from. The Agriculture Department issues its weekly Crop Progress report Monday afternoon. The next Global Dairy Trade (GDT) event is Tuesday, and Wednesday has three offerings. The monthly Livestock, Dairy, and Poultry Outlook is issued, the preliminary May Milk Production report, and the July Federal order Class I base milk price is announced. Rounding out the week is the monthly Livestock Slaughter report Thursday afternoon.
Thursday on DairyLine:
NMPF’s Chris Galen tells us why food companies should market food with integrity.
Greg Larson, from GEA Farm Technologies, checks in with a Robotic Milking Minute.
This Week in DairyBusiness Weekly:
- DFA opens nation’s most modern milk powder processing plant
- Farmland documentary helps bridge the gap
- Update on the milk markets
- June Dairy Month kick-off event
- Dairy Profit seminars set for 2014 Empire Farm Days
- National Convention farm tours
- DairyBusiness & HolsteinWorld seek school-year interns
- Dairy producers of New Mexico meeting in Ruidoso
- Le Grande Finale at Gloryland
- HolsteinWorld looks back
- Plus check out our calendar, industry briefs and more!
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