DairyProfit Update: Oct. 10, 2011
Oct. 10, 2011
California Class 1
California’s November Class 1 milk prices are $20.26/cwt. for the North and $20.54/cwt. for the South, down $1.24 and $1.23 from October, respectively, but $1.56 more than November 2010.
The North average for 2011 is $20.68/cwt., up from $16.85/cwt. at this time a year ago. The South price average is $20.95/cwt., up from $17.12/cwt. a year ago.
The November federal order Class I base price will be announced Oct. 21.
While USDA’s estimate of the Sept. 1, 2011 inventory of old crop corn is old news, there are ongoing questions surrounding the quarterly stocks estimates, according to Darrel Good and Scott Irwin, ag economists at the University of Illinois.
Corn prices declined after the release of the Sept. 1 stocks estimate, but were already under pressure as a result of concerns about U.S. and world economic conditions and a general decline in commodity prices (excluding livestock). In addition, the corn market has been influenced by reports of better-than-expected yields. It is yet to be determined if “better-than-expected’ translates into “higher-than-forecast.” USDA will release new corn production and consumption forecasts on Oct. 12.
The recent decline in corn prices has resulted in profitable margins for almost all users of corn, suggesting that prices are low enough to encourage an increase in consumption. USDA’s October reports will provide a new benchmark for evaluating consumption. After that, weekly estimates of exports, ethanol production and broiler placements will provide information to gauge the pace of consumption relative to projections and to judge the price level.
USDA is seeing fluid milk processors and other interested parties to nominate candidates for the National Fluid Milk Processor Promotion Board. Nomination deadline is Oct. 31.
Five individuals will be named to succeed members whose terms expire June 30, 2012. Appointed members will serve 3-year terms from July 1, 2012, through June 30, 2015. Additionally, the U.S. ag secretary will appoint one member to fill a vacancy in Region 4, with a term expiring June 30, 2013; and one member to fill a vacancy in Region 8, with a term expiring June 30, 2014.
USDA will accept nominations for board representation in seven geographic regions and two at-large positions. The geographic regions are: Region 3 (Delaware, Maryland, Pennsylvania, Virginia and the District of Columbia); Region 4 (Georgia, North Carolina and South Carolina); Region 6 (Ohio and West Virginia); Region 8 (Illinois and Indiana); Region 9 (Alabama, Kentucky, Louisiana, Mississippi and Tennessee); Region 12 (Arizona, Colorado, New Mexico, Nevada and Utah); and Region 15 (Southern California).
Blank forms are available on the Dairy Promotion and Research Branch’s website at www.ams.usda.gov/Dairy.
MARKETS: Cheddar barrels, Class III lower
Closing on Monday, Oct. 10:
Cheddar barrels: down 5¢, to $1.7350/lb.
Cheddar blocks: unchanged, at $1.7650/lb.
Butter: up 1¢, to $1.78/lb.
Extra Grade nonfat dry milk: unchanged, at $1.58/lb.
Grade A nonfat dry milk: unchanged, at $1.49/lb.
Class III milk: lower through July 2012. The October-December 2011 average is now $17.13/cwt., yielding a 2011 average of $17.99/cwt.; 2012 average is $16.52/cwt.
Corn/soy futures higher
Corn: +4.0¢ to +5.0¢/bushel through September 2012. The December 2011 price is $6.05/bu.; 2012 average is $6.08/bu.
Soybeans: +15.4¢ to +19.2¢/bushel through September 2012. The November 2011 price is $11.77/bu.; 2012 average is $12.00/bu.
Soybean meal: +$3.40 to +$4.60/ton through September 2012. The October-December 2011 average is $306.60/ton; 2012 average is $315.93/ton.
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Dave Natzke, Editor