DairyBusiness Update: Dec. 30, 2013
October fluid sales down 3.5%
October 2013 packaged fluid milk sales totaled 4.49 billion lbs., down 3.5% from October 2012. October sales of conventional products, at 4.30 billion lbs., were down 3.6%; organic products, at 194 million lbs., were down 0.1% Organic represented about 4.3% of total sales for the month.
January-October 2013 total packaged fluid milk sales, at 42.76 billion lbs., were down 2.4% from the same period a year earlier. Year-to-date sales of conventional products, at 40.89 billion lbs., were down 2.7%; organic products, at 1.87 million lbs., were up 4.7%. Organic represented about 4.4% of total sales.
Source: Dairy Market News
Small increase forecast for 2014 retail dairy product prices
Retail dairy product prices are expected to rise 2.5%-3.5% in 2014, on par with the rise for all foods eaten at home, according to the USDA Economic Research Service Food Price Outlook report.
According to the report, the index measuring retail price movement estimated dairy product prices rose 0.5% in 2013, less than the "all food at home" increase of 0.75%-1.25% for the year. The dairy product price index rose 2.1% in 2012 (2.5% for all foods eaten at home) and 6.8% in 2011 (4.8% for all foods eaten at home). Source: USDA ERS
Cull cow prices end year higher
Estimated U.S. December 2013 cull cow prices (beef and dairy combined) averaged $81.80/cwt., according to the USDA/NASS Ag Prices report. The average is up $1.10/cwt. from November’s revised estimate and $4.50/cwt. more than December 2012. It's the highest monthly average since September. December’s average brings the preliminary 2013 average to $81.24/cwt., compared to $80.95/cwt. for 2012.
December milk-feed price ratio improves
Slightly higher monthly average milk prices combined with lower corn and alfalfa hay prices to push the preliminary December 2013 milk-feed price ratio higher. At 2.30, the index is up from 2.27 in November 2013 and 1.65 in December 2012. It's the third straight month above 2.0, and the highest since October 2010.
With the preliminary December estimate, the 2013 average milk-feed price ratio is 1.74, up from 1.53 a year ago.
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 $21.80/cwt., compared to $21.60/cwt. in November 2013 and $20.80/cwt. in December 2012.
December corn, at $4.31/bushel, was down 4¢ from November and $2.52 less than December 2012. It's the lowest U.S. average corn price since September 2010.
December 2013 soybeans averaged $13.00/bushel, up 30¢ from November, but down $1.30 from December 2012.
Alfalfa hay averaged $187/ton in December, down $1 from November and $30 less than December 2012. It's the lowest U.S. average hay price since June 2011.
More dairy products leaving US
Cooperatives Working Together (CWT) accepted 8 requests for export assistance today from Bongards Creameries, Maryland Virginia Milk Producers Cooperative, and Tillamook County Creamery Association to sell 5.936 million lbs. of butter and 914,919 lbs. of cheddar cheese to customers in Europe, the Middle East and North Africa. The product will be delivered through June 2014.
CWT in 2013 assisted member cooperatives in selling 130.324 million lbs. of cheese, 97.580 million lbs. of butter, 44,092 lbs. of anhydrous milk fat, and 218,258 lbs. of whole milk powder to 40 countries on six continents. These sales are the equivalent of 3.40 billion lbs. of milk on a milkfat basis.
Mielke’s Market Daily for Monday
(A daily wrap-up of dairy markets and the things affecting them, from DairyBusiness Update associate editor Lee Mielke)
That bang you heard this morning was the Grinch taking back some Christmas gifts. Actually, it was the barrel cheese price. The 500lb. Cheddar barrels plunged 6¢ on a single offer, to $1.91/lb., while their 40lb. block cousins remained at $2/lb., with no activity. Needless to say, the 9¢ spread is out of its normal 3-5¢ range again.
Cash butter lost 2.75¢ this morning, following the 3.5¢ loss on Friday and 1.5¢ on Christmas Eve, and is down to $1.5225/lb. Didn’t we see some bullish signals in last Monday’s Cold Storage report? Seven carloads traded hands this morning, the first one at $1.54/lb., and slipped from there, followed by 3 cars at $1.53/lb., but an unfilled bid brought it to the close of $1.5225 /lb. The Double A price has lopped off almost 8¢ since that bullish report came out but the high price is drawing product to the CME, as 14 carloads traded hands last week plus 7 more today.
Grade A nonfat dry milk, on 1 sale, gave up 2¢ this morning, first loss since Nov. 19, and is now trading at $2.09/lb. An offer at $2.11/lb. went uncovered. Extra Grade was unchanged, holding at $2.09/lb., with no activity.
Today’s market closing prices:
Butter: Down 2.75¢, to $1.5225/lb.
Cheddar blocks: Unchanged, at $2.00/lb.
Cheddar barrels: Down 6¢, to $1.91/lb.
Grade A nonfat dry milk: Down 2¢, to $2.09/lb.
Extra Grade nonfat dry milk: Unchanged, at $2.09/lb.
Class III milk: Jan.$19.26, -22¢, Feb.$18.61 -17¢, Mar. $18.43 -19¢, Apr. $18.14 -16¢, May $17.90 -10¢, & Jun. $17.80 -5¢. Based on today’s CME closing prices, the Q4 2013 average is $18.68/cwt.; with an overall 2013 average of $17.99/cwt.; and a 2014 average of $17.97/cwt., -6¢ from Fri.
Regular trading hours are in effect tomorrow at the Chicago Mercantile Exchange but is closed Wednesday, New Year’s Day, and reopens Thursday and Friday. USDA announces December Federal order Class II, III, and IV milk prices on Thursday, January 2, and the California Department of Food and Agriculture announces its December Class 4a and 4b milk prices. The November Dairy Products report is issued by USDA on Friday, January 3.
Tuesday on DairyLine:
Mark Stephenson, Bob Cropp and Phil Ploord discuss their 2014 dairy outlook.
John Maxwell from Cinnamon Ridge Dairy shares his robotic milking experience.