DairyProfit Update for June 12, 2012Print
USDA’s World Ag Supply & Demand Estimates (WASDE) report, released June 12, raised 2012 U.S. milk production and marketing estimates again, but 2013 production and marketing forecasts were unchanged. As a result, USDA lowered the forecasts for 2012 milk prices, with a slight improvement forecast for 2013.
Forecast 2012 milk production was raised, primarily reflecting a slower decline in cow numbers. At 202.2 billion lbs., the estimate is up 300 million lbs. from last month’s estimate and, if realized, would be up 3.1% from 2011. Total 2013 milk production is estimated at 202.6 billion lbs., which would be up just 0.2% from 2012.
The Class III price forecast is lowered from last month, as a weaker whey price more than offsets the slightly higher forecast cheese price. The Class IV price is lowered on the weaker NDM price.
The 2012 all milk price is forecast at $16.85-$17.25/cwt., down 5¢-15¢ from last month's estimate; the 2013 all milk price outlook remains unchanged, at $17.25-$18.25/cwt.
U.S. feed grain production, use and supplies were largely unchanged in the WASDE report. Corn used for ethanol was production was raised 50 million bushels, but that's offset by a 50-million-bushel decline in expected exports. Projected corn ending stocks for 2011/12 are unchanged, as is the 2011/12 season average farm price of $5.95-$6.25/bushel. The 2012/13 price outlook is also unchanged, at $4.20-$5.00/bushel.
This month’s U.S. soybean supply and use projections for 2012/13 include lower beginning and ending stocks and reduced use, but export projections were raised. After averaging $12.30/bushel in 2011/12, soybean prices are projected in a wide range for 2012/13, at $12.00-$14.00/bushel. Soybean meal prices averaged $360/ton in 2011/12, and are projected at $335-$365/ton in 2012/13.
The beef price outlook was unchanged, and remains high. Potentially impacting cull cow prices, the WASDE 2012 cattle (steer) price estimate is $123-$128/cwt., $10-$14/cwt. higher than the 2011 average of $115/cwt. Highest prices of the year are forecast for the final quarter of 2012.
And USDA put the beef (steer) 2013 price estimate at $124-$135/cwt., also unchanged from last month.
U.S. Agriculture Secretary Tom Vilsack appointed 12 dairy members to the National Dairy Promotion and Research Board. All appointees’ terms will begin immediately, with terms ending Oct. 31, 2014.
Newly appointed members are: Kima Simonson, Washington (Region 1); Lynda Foster, Kansas (Region 4); John Howerton, Arkansas (Region 4); Amber Horn-Leiterman, Wisconsin (Region 6); Larry Shover, Iowa (Region 7); Julie Veldhuis Lund, Idaho (Region 8); Urban Mescher, Ohio (Region 9); Celeste Deaderick Blackburn, Tennessee (Region 10); and Harold Howrigan, Jr., Vermont (Region 12).
Reappointed to serve second terms were: Ronald Shelton, Colorado (Region 3); Kenton Holle, North Dakota (Region 5); and Sharon Laubscher, Wisconsin (Region 6).
MARKETS: Cheese, butter prices jump; Class III follows
Today's market closing prices:
Cheddar barrels: up 4.25¢, to $1.5650/lb.
Cheddar blocks: up 3.5¢, to $1.65/lb.
Butter: up 1.25¢, to $1.4325/lb.
Extra Grade nonfat dry milk: unchanged, at $1.12/lb.
Grade A nonfat dry milk: up 0.5¢, to $1.2150/lb.
Class III milk: +13¢ to +39¢ through March 2013. Based on current closing prices, the 2012 average is $16.41/cwt.; 2013 average is $16.17/cwt.
Corn lower, soybeans meal futures higher
Corn: -8¢ to -11¢/bushel through September 2013. The 2012 average is $5.44/bu.; 2013 average is $5.39/bu.
Soybeans: +2¢ to +10¢/bushel through September 2013. The 2012 average is $13.84/bu.; 2013 average is $12.77/bu.
Soybean meal: +$0.60 to +$5.00 through September 2013. The 2012 average is $4009.42/ton; 2013 average is $355.43/ton.