DairyProfit Update for May 31, 2012
PrintMilk-feed price ratio at two-decade low
Lower average milk prices, combined with higher alfalfa hay prices, more than offset steady soybean prices and slightly lower corn prices, sending the May 2012 milk-feed price ratio to the lowest level dating back two decades.
The May 2012 milk-feed price ratio to 1.38, down from a revised estimated of 1.42 in April 2012 and 1.73 in May 2011. It marks the 14th consecutive month the ratio has been below 2.0. The index is based on the current milk price in relationship to feed prices for a ration of 51% corn, 8% soybeans and 41% alfalfa hay.
At $16.40/cwt., the U.S. average milk price is the lowest since July 2010. Average hay prices rose $8, to $215/ton; soybean prices were steady, at $13.70/bushel; and corn prices dropped 12¢, to $6.34/bushel.
Cull cow prices continue to rise
Estimated monthly cull cow prices (beef and dairy combined) averaged $87.30/cwt., likely the highest on record. The May 2012 average is up $1.80/cwt. from the revised April 2012 estimate ($85.50/cwt.) and $9.10/cwt. more than May 2011 ($78.20/cwt.). The May 2012 average puts the beef value of a 1,200-lb. cull cow at nearly $1,050/head.
USDA forecasts record-high FY ’12 dairy exports
In a month when positive dairy news seemed hard to come by, USDA raised its quarterly forecast for fiscal year 2012 (FY ’12) dairy exports by $300 million. At $4.7 billion, FY ’12 dairy exports would surpass FY 2011’s record high of $4.5 billion.
The FY ’12 U.S. dairy import forecast was reduced slightly. At $2.9 billion, it is down $100 million from February’s forecast, but up about $200 million from the FY ’11 total of $2.7 billion. The forecast for FY 2012 cheese imports was unchanged, at $1.1 billion, which would be up about $39 million from FY 2011.
Total FY ’12 ag exports are forecast at $134.5 billion, up $3.5 billion from the February forecast, but $2.9 billion less than final FY ’11 exports. FY ’12 ag imports are forecast at $107.5 billion, up from $94.5 billion in FY ’11.
To see the quarterly outlook report, visit http://usda01.library.cornell.edu/usda/current/AES/AES-05-31-2012.pdf.
Weekly National Dairy Products Sales report highlights
• Butter prices received for 25-kilogram and 68-lb boxes meeting USDA Grade AA standards averaged $1.35/lb. for the week ending May 26, up 1.0¢ from the previous week.
• Cheddar cheese prices received for 40-lb. blocks averaged $1.52/lb., down 0.6¢; 500-lb. barrels (adjusted to 38% moisture) averaged $1.49/lb., up 0.5¢ from the previous week.
• Prices for dry whey meeting USDA Extra Grade standards averaged 52.4¢/lb., down 1.8¢.
• USDA Extra Grade nonfat dry milk prices averaged $1.13/lb., down 1.3¢.
MARKETS: Cheese moves higher
Today's market closing prices:
Cheddar barrels: up 0.75¢, to $1.5350/lb.
Cheddar blocks: up 2.0¢, to $1.62/lb.
Butter: unchanged, at $1.40/lb.
Extra Grade nonfat dry milk: unchanged, at $1.09/lb.
Grade A nonfat dry milk: up 1.5¢, to $1.1725/lb.
Class III milk: pennies lower, June through September 2012; 3¢ to 23¢ higher, October 2012 through August 2013. Based on current closing prices, the 2012 average is $16.01/cwt.; 2013 average is $15.97/cwt.
Corn mixed, soy futures lower
Corn: -4¢ to +2¢/bushel through July 2013. The 2012 average is $5.34/bu.; 2013 average is $5.36/bu.
Soybeans: -13¢ to -33¢/bushel through September 2013. The 2012 average is $13.07/bu.; 2013 average is $12.31/bu.
Soybean meal: -$8.40 to -$15.40 through September 2013. The 2012 average is $373.96/ton; 2013 average is $335.41/ton.
