DairyBusiness Update for 10.31.13
Slightly higher monthly average milk prices combined with lower feed prices to push the preliminary October 2013 milk-feed price ratio above 2.0 for the first time in 31 months. At 2.09, the index is up from 1.88 in September 2013 and 1.74 in October 2012, and is the highest since March 2011.
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.
The U.S. average all-milk price was $20.30/cwt., compared to $20.10/cwt. in September 2013 and $21.60/cwt. in October 2012.
October corn, at $4.49/bushel, was down 91¢ from September and $2.29 less than October 2012. It's the lowest U.S. average corn price since October 2010.
October 2013 soybeans averaged $12.60/bushel, down 70¢ from September and down $1.60 from October 2012. It's the lowest U.S. average soybean price since February 2012.
Alfalfa hay averaged $193/ton in October, down $1 from September and $19 less than October 2012. It's the lowest U.S. average hay price since January 2012.
To see the full USDA Ag Prices report, click here.
Replacement cow prices reported
U.S. issued quarterly replacement dairy cow price estimates for the first time since sequestration. October 2013 U.S. prices average $1,400/head, up $30 from January 2013, and up $10 from October 2012.
Among major dairy states, the average price ranged from a high of $1,600/head in Michigan, and hit or surpassed $1,500 in Arizona, Colorado, Florida and Vermont.
Lows of $1,300/head or less were recorded in California, Idaho, Missouri and Utah.
Cull cow prices lower
Estimated U.S. October 2013 cull cow prices (beef and dairy combined) averaged $79.70/cwt., according to the USDA/NASS Ag Prices report. The average is down $2.80/cwt. from September’s revised estimate, but still $2.40/cwt. more than October 2012.
Current trend: October’s average is the lowest since January. The year-to-date average is $81.09/cwt., compared to $81.73/cwt. for the same period a year ago.
September cow slaughter
USDA estimated 258,600 culled dairy cows were slaughtered under federal inspection in September 2013, down 7,400 from August 2013, but 7,800 more than September 2012. The January-September 2013 total was estimated at 2.342 million head, 53,900 more than the same period in 2012. 0Through the third week in October, weekly cow slaughter has averaged about 60,600 head for the month.
Cold storage inventories down from August
There’s plenty of product in storage, according to USDA’s latest Cold Storage report issued this afternoon. Sept. 30 butter stocks totaled 233.25 million lbs., down a nice 30.7 million lbs., or 12% from August 2013, but 37.4 million lbs. or 19% above September 2012.
American cheese stocks, at 661.27 million lbs., are down 7.1 million lbs., or 1% from August, but 19.6 million lbs. or 3% above a year ago. The total cheese inventory hit 1.071 billion lbs., down 2.9 million lbs. or 3% from August, but 31.7 million lbs., or 3% above a year ago.
Cattle on feed down 8%
Cattle and calves on feed for slaughter market in U.S. feedlots with capacity of 1,000 or more head totaled 10.1 million head on Oct. 1, 8% less than a year earlier. September placements totaled 2.03 million head (1.96 million net), up 1% from a year earlier. September fed cattle marketings totaled 1.70 million, down 6%.
Source: USDA Cattle on Feed report, Oct. 31
Mielke’s Market Daily
(A daily wrap-up of dairy markets and the things affecting them, from DairyBusiness Update associate editor Lee Mielke)
The cash dairy markets were anticipatory of three major dairy reports that were released this afternoon from USDA. The September Cold Storage and Livestock Slaughter reports were delayed a week due to the government shutdown. The third report was the Agricultural Prices, which was released on schedule, but all three came after this morning’s cash trading, so reaction will not be seen until tomorrow.
California’s October milk prices are announced tomorrow, and the September Milk Production report is issued tomorrow afternoon, containing long-awaited dairy cow numbers and output per cow data, suspended due to sequestration.
Meanwhile, the cash block cheese price jumped 1.5¢ this morning, the first increase since Friday, and is now trading at $1.89/lb. But, the 2 bids that took the price higher didn’t jar any product loose. The barrels were up 3¢ on a trade, and hit $1.85/lb.
Butter was steady this morning, following yesterday’s 2.5¢ advance to $1.50/lb. Three bids at that price went unfilled today.
Grade A nonfat dry milk moved 1¢ higher this morning on a trade, to $1.91/lb. One bid at $1.90/lb. went unfilled and an offer at $1.92/lb. went uncovered. Extra Grade remained at $1.85/lb., with no activity.
Today’s market closing prices:
Butter: unchanged, at $1.50/lb.
Cheddar blocks: up 1.5¢, to $1.89/lb.
Cheddar barrels: up 3¢, to $1.85/lb.
Grade A nonfat dry milk: up 1¢, to $1.91/lb.
Extra Grade nonfat dry milk: unchanged, at $1.85/lb.
Class III milk: +1¢ to +19¢ through December 2014. Based on current CME closing prices, the Q4 2013 average is $18.37/cwt.; with an overall 2013 average of $17.94/cwt.; and a 2014 average of $17.01/cwt.
Corn, soybeans, soybean meal futures trading
Today’s futures prices at the Chicago Mercantile Exchange:
Corn: -2¢ to -3¢ through December 2014, settling in a range of $4.28-$4.69/bushel.
Soybeans: -7¢ to -11¢ through November 2014. November 2013 through August 2014 contracts settled in a range of $12.23-$12.80/bushel.
Soybean meal: -$2.80 to -$8.20/ton through December 2014. December 2013-September 2014 contracts settled in a range of $365-$404/ton.
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