DairyBusiness Update: May 12, 2014Print
Corn Planting Well Above Yr. Ago and 1% Ahead of Five-Year Average
The Agriculture Department’s latest Crop Progress report issued this afternoon shows 59% of the nation’s corn has been planted, up from 29% the previous week, up from26% on this week a year ago, and 1% ahead of the five-year average. The 18 states which comprised 91% of 2013 crop are listed below with their respective progress:
State Week Ending
May 11, 2013 / May 4, 2014 / May 11, 2014 Five Year Average
Colorado 29% 35% 64% 56%
Illinois 16% 43% 78% 53%
Indiana 27% 20% 61% 45%
Iowa 14% 23% 70% 70%
Kansas 29% 52% 72% 63%
Kentucky 38% 39% 64% 59%
Michigan 28% 3% 20% 41%
Minnesota 16% 8% 31% 62%
Missouri 27% 63% 86% 62%
Nebraska 39% 44% 77% 71%
N Carolina 92% 75% 90% 96%
N Dakota 16% - 3% 33%
Ohio 40 9% 40% 46%
Penn. 45% 8% 27% 41%
S Dakota 33 25% 52% 43%
Tennessee 62% 68% 87% 76%
Texas 77% 73% 80% 85%
Wisconsin 13% 2% 20% 41%
Fifteen of the 18 states, show corn emerged, or 18%, up 11% from the previous week, up 13% from a year ago, but 7% below the 5-year average.
The report shows 20% of the soybean crop was in the ground, as of the week ending May 11, up from 5% the previous week, up from 5% a year ago, and just 1% behind the five year average. Seed is in the ground in 17 of the top 18 states that made up 95% of the 2013 soybean acreage.
There is 30% of the cotton crop planted, up from 16% the week before, up from 22% a year ago, and just 4% below the five-year average. Of the 15 states listed, which comprised 98% of the 2013 cotton crop, all show cotton planted.
FC Stone market analyst, Kyle Schrad, reported in this morning’s Insider Opening Bell that a sharp decline in world wheat prices is pressuring U.S. wheat prices lower, and wheat is dragging corn and soybean prices lower as well. Traders will be watching today's Crop Progress report to see how much planting headway corn and soybean producers made last week.
A Look Behind the $2.40/lb. Cheese Price Curtain
Those in the US dairy industry scratching their heads back in March with record-breaking +$2.40/lb. CME block cheddar cheese prices and a sustained +$2.00/lb. NDM price throughout the month need to look no further for an explanation, according to Highground Dairy’s Eric Meyer.
US export volumes ended the quarter at breakneck pace across the entire complex and we speculate that price was no concern as many of these deals were booked months ago as buyers took advantage of a steep CME futures discount. Domestic cheese users that had been carrying little to no inventory waiting for the market to correct (CME spot cheese has NOT settled below $2.00/lb. since 19 Dec 2013) stepped back in to refill the pipeline to find almost nothing available. And a few international tenders in March drew NDM supplies out of the system in the short-term.
While we anticipate export volumes to remain strong for most of 2014, we likely will NOT see quarterly growth as seen during this past Jan-Mar for the foreseeable future. That said, we believe volumes like these ARE sustainable as the US solidifies its footing as a trusted and reliable player in the global dairy market.
Read more by e-mailing Eric at email@example.com
Ice Cream Shortage this Summer?
Butter prices increased on a firm market last week with solid print demand and ongoing exports orders keeping stocks tight, reports Dairy Market News. Butter churns are operating at mixed levels. Increased milk supplies have improved production for some manufacturers, while others reduced churn rates because Class II buyers purchased additional cream supplies at higher prices. Inventories are being monitored closely to meet current and long-term needs. Spot load availability of bulk butter is light.
The Foreign Agricultural Service reports exports of butter and milkfat during March totaled 27.4 million pounds, an increase of 100 percent from March 2013. U.S. quota imports of butter during March totaled 1.6 million pounds, down 64 percent from last March.
Condensed skim and cream demand from ice cream and frozen dairy dessert manufacturers is increasing. Cream demand from Western butter makers has increased as they fill 80% and 82% orders. Concerns are building among balancing plant operators regarding if there will be adequate supplies of butterfat during the summer months.
California Cheese Producers Still Getting a Deal
The Milk Producers Council’s Rob Vandenheuvel writes in his Friday newsletter that, while overall milk prices may be historically high, cheese manufacturers are “still getting a great deal.” Calculating “the latest State-Sponsored Discount lavished upon California’s cheese manufacturers,” Vandenheuvel reports that, “Since 2010, more than $1.28 Billion has stayed in manufacturer’s pockets rather than being paid into the California pool. What does that mean for the average California dairy?
If you’re a 1,000-cow dairy producing 65 lbs of milk/cow/day, this $1.28 billion represents more than $750,000 since 2010 to your dairy alone!”
“Some may wonder why MPC continues to publish this reminder on a monthly basis. Or why we continue to apply pressure for change when prices are at historically high levels. Our response is simple – if you’re asking the question, you must not be a California producer who’s on the losing end of the $1.28 billion discount. Producers must continue to pressure their leaders for change; the status quo is unacceptable.”
Take a Trip On Cheese
The Cheese Importers Association of America announced details about their exclusive and exciting travel package to the 2014 SIAL Exhibition in Paris. SIAL, The Global Food Marketplace will be held October 18-23, 2014 at Paris Nord-Villepinte Convention and Exhibition Center. The CIAA offers the chance to join an exclusive and exciting trip beginning on Saturday, October 18th and ending on Thursday October 23rd.
Traveling to the SIAL trade show with the CIAA offers a unique opportunity for individuals to attend the show with other key leaders in the cheese industry, while enhancing networking opportunities through our exclusive CIAA nightly events. Our package deal makes it all seamless as we handle your hotel and your daily transportation to and from the show.
Included are daily buffet breakfasts, several sensational dinners sponsored by the "crème de la crème" of the cheese industry, daily private bus transportation to and from the SIAL, transfer to and from airport and hotel in Paris and baggage handling at the hotel.
For more information or to register for the trip, visit the CIAA website at www.theciaa.org or call our Headquarters at (202) 547-0899.
DairyBusiness & HolsteinWorld Seek School-year Interns
DairyBusiness Communications is now accepting applications for three school-year internships beginning September 1. Students interested in applying should have a strong interest in ag communications as each internship will focus around one of DairyBusiness’ three main publications – DairyBusiness East/West, DairyBusiness Weekly and HolsteinWorld.
Selected applicants will help create content for print and online. They may also be asked to attend and cover industry events in their region and will assist in taking photos, writing captions, stories, blogs, and providing social media coverage of those events.
Interested applicants should have a passion for writing and working with producers and industry professionals to generate content. Students are required to have some foundation knowledge of a camera, video camera, audio recorder, and need to be willing to learn basic photo, blog and website software. Social media experience is preferred. Some training will be provided, but most intern experience will be gained on the job. The ideal candidate will excel in working independently and have great communication skills.
Those interested should supply a cover letter and resume by June 15th. Materials can be sent to Elley Castle at firstname.lastname@example.org. Please indicate in your cover letter which internship you are most interested in. We will do our best to accommodate publication requests, but it should be noted that selected interns will have the opportunity to work on any and all publications of interest.
Mielke Market Daily
(A daily wrap-up of dairy markets and the things affecting them, from DairyBusiness Update associate editor Lee Mielke)
“Unchanged” describes the day today at the CME. The 40lb. block Cheddar cheese held at Friday’s close of $2.0450/lb., with no activity. Ditto on the 500lb. barrels which held at $2.02/lb., with no activity.
Market analyst, Kyle Schrad, warned in this morning’s Insider Opening Bell: "There is a big discrepancy between the spot cheese market charts and the Class III futures charts. Futures charts are very bullish and the spot market charts are very bearish." "Buy-side interest will likely continue in spot cheese," says Schrad. "The spot market has pulled back significantly, but the direction is still to the downside."
Class III milk futures were mostly higher.
Cash butter was also unchanged this morning, following unseasonal gains the past two weeks, and remains at $2.1675/lb. One offer at $2.20/lb. went nowhere.
Cash powder was also unchanged, holding at $1.78/lb. Two trades at that price occurred and 3 offers at that price were left on the board.
Today’s Market Closing Prices
Butter: Unchanged, at $2.1675/lb.
Cheddar blocks: Unchanged, at $2.0450/lb.
Cheddar barrels: Unchanged, at $2.02/lb.
Grade A nonfat dry milk: Unchanged, at to $1.78/lb.
Class III milk: May $22.74, +3¢; Jun. $21.11, -12¢; Jly $20.34, +7¢; Aug. $20.02, +8¢; & Sept. $20.00, +10¢. Based on today’s CME settlements, the Third Quarter 2014 average now stands at $20.12, +8¢ from Friday. The 2nd half average is now at $19.64, +8¢ from Friday.
The Agriculture Department issues the weekly National Dairy Products Sales Report (NDPSR) on Wednesday, the prices USDA uses to calculate Federal order milk prices, and the monthly Livestock, Dairy, and Poultry Outlook is out Thursday. That’s it for the week. Slim pickens’ for the market to feed from this week.
Tuesday on DairyLine:
James Dunn provides his latest dairy outlook
EPA administrator Gina McCarthy meets with farm broadcasters to discuss the latest