Burley Iron Works - Progressive Dairyman

ROLLED CORN OVERVALUED
MARKET WATCH FEED
Patrick French
RP Feed Components
Patrick.French@
feedcomponents.com
of feedstuffs in addition to the one
that this column uses.
Nutrient values are derived
using the composition and weekly
market prices for a basket of 19
feeds available in the region.
Market prices are gathered from
several published and unpublished
sources. Values are determined for
rumen-degradable protein (RDP),
rumen-undegradable protein (RUP),
effective neutral-detergent fiber
(eNDF), non-fiber carbohydrates
(NFC) and fat. For RUP, NFC
and fat, only the fraction that is
digestible in the small intestine
is valued. For brevity, eNDF is
referred to as a nutrient though
it is a ration descriptor. When
Feed expense is the single
largest outlay of cash for a dairy.
The Economic Research Service
estimates that feed makes up 55
percent and 70 percent of operating
and total milk production costs,
respectively. Since feed is a
significant cost contributor, we need
methods to identify feedstuffs that
may meet the nutrient requirement
of the dairy cow more economically
than the feedstuffs currently in the
ration. Several technologies exist
to rate or rank the economic value
nutrient values are combined with
the composition of a feed, we arrive
at a relative economic value of the
ingredient. This gives us a global
perspective of the feed’s value.
However, many times we may need
a specific nutrient, so we have
derived nutrient-specific values for
the categories of carbohydrates,
proteins and fiber carbohydrates.
The figure shows the monthly
nutrient values over the previous
three years. The latter half of 2012
was a record year for feed prices
and nutrient costs. Most nutrient
costs are flat to lower so far in
2013. Overall, nutrient costs are
10 percent higher compared to
one year ago. Most of the increase
Serving the Dairy Industry for over 50 years
• Silage Beds & Trailers
• Manure Beds & Trailers
• 16’ to 40’ Lengths
• Horizontal or Vertical Beaters
B u r l e y I r o n Wo r k s
www.burleyironworks.com
119 West 26th
•
Burley, ID
83318
•
208.678.8278
in year-over-year cost can be
attributed to digestible RUP and
NFC. The market cost for one
pound of dry matter continues to
exceed 15.3¢, which is equivalent to
feed costs of $7.65 per cow per day
or $10.90 per hundredweight (cwt)
of milk.
The table lists several feeds,
their price, and their value
based on whether all nutrients
(comprehensive) or specific sets
of nutrients (carbohydrates,
proteins or diber) were used in
their valuation. Green shading
and intensity of shading indicates
undervalued feeds, and orange
shading indicates overvalued
feeds. Feeds without shading
indicate that the market price and
derived value are similar. Overall,
corn gluten feed and millrun are
undervalued – whereas animal
protein and soyhulls are overvalued.
Undervalued feedstuffs when
observing specific nutrient sets
are alfalfa (carbohydrates) and
straw (fiber). Use of undervalued
feedstuffs may reduce ration cost,
but value is only one of several
factors that should be considered
when evaluating the inclusion of a
new ingredient. PD
COMMODITIES
Corn* (in tons)
Mar. 4
Price
CA
$323
ID
$319
NM
$298
(in bushels)
3-week
change
Price
3-week
change
$8
$9.04
.22¢
$7
$8.93
.19¢
$8
$8.34
.22¢
*Price quotes contributed by Western Milling,
J.D. Heiskell and independent sources.
Soybean meal* ($/ton)
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Ag West Dairy Services & AWS Dredge
Ag West
Dairy Services
“The performance of Ag West Dairy Services and AWS
Dredge in removing sludge from my pond was outstanding.
They were very efficient and well worth the cost.”
– Ernest DeGroot
3-week
change
CA
$493
$13
ID
$486
$9
NM
$479
$19
Cottonseed* ($/ton)
Why we do it better than the other guy:
– Dredging will reach deeper & pump more material –
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[email protected] (435) 563-2522
Price
Mar. 4
Affordable & Effective Pond Cleaning
20 Years Land Application Experience
No Job Too Big or Small
Mar. 4
Price
3-week
change
CA
ID
NM
$391
$369
$345
$4
NC
NC
Supreme hay ($/ton)
Mar. 4
Price
3-week change
Central CA
$280
$25
ID
$230
UT
$185-$200
$30
NC
MT
$200
NC
WY
$253-$266
$3-$16
WA/OR
$250-$260
CO
$250-$275
$10-$20
NC
Source: USDA National Hay, Feed & Seed Summary
8
Progressive Dairyman
Issue 5 • March 21, 2013
GOOD ALFALFA UNDERVALUED
Price per unit of ration component
$21
$18
(dollar per percentage point)
$15 dFat
$12
$9
dRUP
dRUP: $18.55
$6
$3
February prices
dFat: $11.22 RDP: $2.30
dNFC: $2.58
eNDF: $0.19
RDP
dNFC
$0
eNDF
$-3
Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb
2011
2012
2013
A basket of 19 regionally available feeds and their recent prices
Protein
Fiber
Value
Value
Value, $/T As-Fed Value, $/T As-Fed $/T As-Fed $/T As-Fed
Market Price Comprehensive
Carbohydrate
Feed name
$/T As-Fed
Alfalfa, Good
230
273
215
371
300
82
393
262
200
230
355
338
73
404
335
487
329
348
320
240
221
202
1085
312
965
288
330
315
326
343
270
176
493
504
70
732
556
265
79
644
585
296
Alfalfa, Premium
Alfalfa, Supreme
Rolled Barley
Canola Meal
Corn Gluten Feed
Rolled Corn
Corn Silage,
35% DM
Cottonseed
Distillers Dried
Grains (DDG)
Hominy
Molasses
Porcine Blood
Meal
Soybean Hulls
Soybean Meal,
48%
Straw
Tallow
Urea
Wheat Millrun
273
232
253
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1935 Kimberly Rd. Š Twin Falls
© 2012 CNH America LLC. New Holland is a registered trademark of CNH America LLC.
439
473
The best scale is your insurance
policy against commodity losses!
278
570
188
132
Extremely undervalued feed
Extremely overvalued feed
Undervalued feed
Overvalued feed
Total Scale Service, Inc.
will be your “insurance agent.”
• We bring our customers the
best quality service and scales
in the industry.
FUTURES
• We represent three of the top
truck scale manufacturers in
the USA.
Corn (dollars per bushel)
$7.50
$7.25
$7.00
$6.75
$6.50
$6.25
$6.00
$5.75
$5.50
$5.25
Mar
2013
High: $7.34
Low: $5.45
On a Shoestring Dairy—Gooding, ID
High
Settle
Low
May
July
Sept
MARCH 8
Soybean meal
Dec
$7.05 -0.18¢
$6.96 -0.28¢
March ’13 contracts
May ’13 contracts
Corn
Avg. 3-week settle
$425.69 -0.53¢
$425.49 +$2.27
March ’13 contracts
May ’13 contracts
Mar
2014
$7.32/$6.90
$7.09/$6.84
High/Low
$437.30/$407.20
$435.90/$406.20
Design Your OWN
Data “Dairy Program”
The customized “Dairy Program” is our
most popular one. You decide what info
to store: Commodity, Vendor, Truck ID #,
etc. Each transaction is stored and can be
easily downloaded to your PC via direct
cable feed or wireless feed.
Weighing Products & Systems
Soybeans (dollars per ton)
$450
$425
High: $445.00
Low: $344.30
$400
$375
$350
High
Settle
$325
Mar
2013
• Scale Service Technicians &
Sales Representatives available
24/7 for your convenience.
May
Low
July
Aug
Sept
Oct
Dec
Jan
2014
Mar
We’ve built our E.
IC
business on SERVon
e
no
,
81
19
ce
Sin
r!
tte
be
it
does
FIND OUT FOR
YOURSELF!
Source: Chicago Mercantile Exchange data
Issue 5 • March 21, 2013
Progressive Dairyman
800-423-4456
www.totalscale.com
Serving Idaho, Washington, Oregon, Utah, Nevada, Montana, & Wyoming
Servin
9
MARKET WATCH Margin
Dairy productivity & margin analysis
(February 2013)
Table 1
West
Northwest
National
64.29
3.84
3.14
61.93
3.84
3.20
61.96
3.80
3.14
31.99
4.76
10.27
3.43
49.00
15.60
1.31
31.31
4.68
10.10
3.37
48.10
15.20
1.29
31.12
4.62
10.07
3.36
48.03
14.81
1.29
15.0
$2.33
$0.35
26.7
$1.85
$0.49
24.1
$2.30
$0.62
$11.96
$7.66
$4.30
$11.73
$7.32
$4.41
$11.65
$7.13
$4.52
$18.61
$11.92
$6.70
$18.93
$11.82
$7.11
$18.81
$11.49
$7.31
Productivity
The Class III price dropped from
$18.14 to $17.25 between January and
February. As I write this column (early
March), the March Class III futures are
trading near $16.79 per hundredweight
(cwt). If these market guesses turn out
to be correct, the March Class III price
would be falling another $0.45 per cwt
from February. For the balance of 2013,
the Class III futures are averaging
$17.81 per cwt, a drop of $0.40 per cwt
from last month. The Class III futures
have not been good predictors of
actual prices in the past, so don’t bank
on receiving these prices. No big deal,
you might think, as these prices are
below the national breakeven. So you
may hope that something will happen
to move them up.
The national Cow-Jones II – an
index tracking dairy margins across
the nation – averaged $7.31 per cwt
in January, a drop of $1 per cwt from
last month (and a drop of $3.88 from
the November peak of $11.19). This
$7.31 per cwt is less than the breakeven
value of $7.50 that marks the threshold
of positive milk margins for the dairy
sector taken as a national aggregate.
The Cow-Jones II tracks down
monthly margins in the dairy industry
across six regions of the U.S. In our
analyses, income is based on the
Milk yield (lbs/cow per day)
Fat (%)
Protein (%)
Normand St-Pierre
Dairy Extension Specialist
Ohio State University
[email protected]
Nutritional statistics
average milk production and milk
composition in a given region for the
month. Milk prices are calculated
from federal orders’ component prices
plus a producer price differential for
Class I (fluid) milk. The analysis is
based on the cash market for feeds.
Feed costs are estimated from the
average cost of supplying the nutrients
required for the production level and
milk composition for each region.
Income over feed costs (IOFC)
are calculated on a per-cow basis.
Milk margins over feed (MM) are
calculated on a per-hundredweight
basis. The national margins over feeds
is the weighed average across all six
regions and is labeled the Cow-Jones
II index.
Average production is for lactating
and dry cows combined. The national
average of 62 lbs per cow per day
translates to approximately 22,600
lbs per cow per year, or 73.8 lbs per
lactating cow per day. The cost of
feeding the replacement herd is not
factored in any of the calculations.
Don’t wait for another cow to fall!
Dairy Grooving and Texturing – Serving the Western States Since 1990
NEL (Mcals/cow per day)
MP (lbs/cow per day)
eNDF (lbs/cow per day)
neNDF (lbs/cow per day)
Dry matter intake (lbs/cow per day)
Feed dry matter cost (¢/lb)
Gross feed efficiency (lb milk/lb DM)
Milk pricing
Class I utilization (%)
Average Class I differential ($/cwt)
Producer price differential ($/cwt)
Per-cow economics
Gross income from milk ($/cow per day)
Nutrient (feed) costs ($/cow per day)
Income-over-nutrient-costs ($/cow per day)
Per-hundredweight economics
Milk price ($/cwt)
Nutrient (Feed) costs ($/cwt)
Milk Margins over Feeds ($/cwt)
Beware that the regions used in the
analysis are not the same as in the
Federal Order (FO). Also, results for
the West region (mostly California)
are calculated as if it belonged to a
federal marketing order. That is, I use
FO Class III price and FO component
prices to estimate mailbox prices in
California. As California producers are
keenly aware, this is incorrect because
the California Class 4b price has been
significantly below the FO Class III
price since early 2011 – a very sore
subject for California producers. So the
actual MM are less than our calculated
MM for the Western region. PD
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Campbell Dairy Farm
167± Acres & Brick
Home, Dairy and
Farm Equipment.
167-Acre Dairy With Brick Home
390 RIVER ROCK LANE, MIDWAY, TN 37809
17 Miles SW of Greenville, Tennessee
This 167-acre farm sells with a nice 1530 sq. ft. brick home. The house is 3-bedroom, 2-bath,
upstairs, basement (partially finished with bedroom and bath) & carport. The real estate will
be offered in 5 tracts & as a whole. The land is mostly flat, cleared, bottom land bordering the
Nolichucky River.
This facility was built new on 167.61 acres in 2005. It was completed and the milking operation
began in 2006. The dairy barn (130 ft. x 70 ft. steel building) was fully equipped with new
DeLaval equipment including a double-10 contour rapid-exit stainless steel herringbone with
two 3” low-lines, ID system, 200 transponders, 10-HP vacuum pump, AFIFarm software, air
compressor, deck flush, 4000-gallon bulk milk cooler, pre-cooler, pit pump, two offices, vet cattle
check pen, palpation rail, crowd gate, (2) 96' x 98' barns, machine shed & shop, 4 bunker silos
with 2 feed alleys.
The freestall barn (116 ft. x 240 ft. steel building) has 200 freestall loops, rubber mats, water
troughs, fans, heavy-duty fencing and gates.
NOTE: 10%
BUYERS PREMIUM ON
EVERYTHING
SALE SCHEDULE:
• Real Estate
• Dairy Barn & Equipment - each item sells separately
• Freestall Barn & Equipment - each item sells separately
(the above will also be offered as a whole)
• Farm Equipment - 150+ items including 15 JD tractors
REAL ESTATE TERMS: 10% down on sale day. Balance due at the closing within 30 days.
ANNOUNCEMENTS: All announcements on day of sale supersede all previous announcements
printed or verbal. All items sold “As-is, Where-is” with no warranties or guarantees.
EVERYTHING SELLS AND YOU SET THE PRICE!
WALNUT GROVE AUCTION & REALTY
PO Box 226, Roebuck, SC 29376
(864) 576-9244 (TAL 2340)
www.walnutgroveauction.com
[email protected]
AUCTIONZIP ID #33872
10
Progressive Dairyman
GREENE COUNTY LAND & AUCTION
400 N. Irish St., Greenville, TN 37743
(423) 639-5231 (TAL 675)
www.greenecountylandandauction.com
[email protected]
AUCTIONZIP ID#4328
Issue 5 • March 21, 2013
MARKET WATCH MARGIN
$11
$10
$9
$8
$7
$6
$5
$4
$3
$2
Preliminary Feb. 2013: $5.78
High: $10.07
Low: $2.74
Note: The graph does not attempt to predict a potential milk price
increase based on a reduction in milk supply.
Calculations for Dairy Security Act
(National margin)
.55¢ .55¢
$
1.14 $1.14
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
2010
2011
2012
2013
The margin graph above assumes
several factors:
• Prices for corn, soybean meal, alfalfa
and all-milk used to calculate the margin
shall be determined as the monthly
revised commodity prices published by
USDA’s National Agricultural Statistics
Service, not preliminary prices.
[
all-milk price
$19.90 cwt
] – [(
Proposed DSA margin formula (Jan. 2013) = $6.28
price of corn x 1.0728
The margin indicated in the
graph above will be closely watched
by those producers who would
eventually sign up for proposed
government-sponsored margin
protection. Producers who seek
this protection at any level will be
required to participate in the Dairy
Market Stabilization Program, a
temporary supply management
program triggered when milk
margins are less than $6 per
hundredweight for two consecutive
months or less than $4 for one
month.
Green sections – Times when
the difference between milk price
and feed cost was above $6. Supply
management was not in effect.
Yellow sections – Times when
the difference between milk price
and feed cost was below $6 but when
supply management had not yet been
announced or taken effect.
Red sections – Times when
supply management would have
been in effect for anyone receiving
basic or supplemental margin
protection. Supply management
would begin one month after
reaching the trigger margins
mentioned above. Estimated margin
payments per hundredweight for
basic margin protection (times when
margins are below $4, on 80 percent
of production history) are indicated
above.
Orange sections – Times
when the milk margin would have
triggered supply management but
was suspended based on one of six
scenarios in the program. PD
Issue 5 • March 21, 2013
$6.96 bu
$432.24 ton
x 0.0137 )
$217 ton
]
Green Since 1987
• World prices used to calculate supply
management program overrides would
use “Oceania prices” for cheddar
and skim milk powder as published
by USDA’s bi-weekly prices included
in Dairy Market News – International
Reports.
What the graph means?
) + ( price of soybean meal x 0.00735 ) + ( price of alfalfa
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Progressive Dairyman
11
MARKET WATCH
MARK ET WATCH
CATTLE
Top
Springer
Top
Average
Medium
Holstein
Springer
Shortbreds
Open
Heifers
Light
Open
Heifers
Heavy
Heifer
Calves
Bull
Calves
Breeding
Bulls
Empire Livestock – Burton Market
Vernon, NY (800) 257-1819 (sale 2/25/13)
$1,450
$300
$1,250
$150
$1,200
$50
$1,000
$100
$300
NC
$600
$200
$75
NC
$70
$10
$800
NC
Mammoth Cave Dairy Auction, Inc.
Smiths Grove, KY (800) 563-2131
$1,625
$5
$1,450
$25
$1,300
$25
$1,100
$390
$80
$520
$60
$150
$10
$145
$5
N/T
$1,525
$25
$1,400
NC
$1,225
$75
$1,325
$125
$500
$150
$900
NC
N/T
N/T
N/T
Mid-Georgia Livestock Auction
Jackson, GA (770) 775-7314 (sale 2/26/13)
$1,550
$425
$1,525
$25
$1,025
$75
N/T
$500
$110
$670
$80
$125
$35
$70
$5
N/T
Central Livestock Association
Albany, MN (800) 733-6828 (sale 2/26/13)
$1,450
NC
$1,200
$75
$1,185
$65
$1,175
$75
$60/cwt
$25/cwt
$87/cwt
$1/cwt
N/T
N/T
$1,250
Equity Co-op Livestock
Stratford, WI (715) 687-4101
Rocky Olsen (608) 434-4037 (sale 2/26/13)
$1,675
$200
$1,300
NC
$1,275
$100
$1,100
$225
$575
$25
$850
NC
$160
$15
$165
$10
N/T
Lake Odessa Livestock
Lake Odessa, MI (616) 374-8213
$1,500
$1,200
NC
NC
Norwood Dairy Cattle Auction
Norwood, MO (417) 746-4242 (sale 2/151/13)
$1,450
$75
$1,175
$55
$925
$15
Pipestone Livestock Auction Market
Pipestone, MN (507) 825-3306
$1,575
NC
$1,448
$5
Topeka Livestock Auction
Topeka, IN (206) 593-2522 (sale 2/26/13)
$1,400
$200
Tri-State Livestock
Sioux Center, IA (712) 722-0681
Mike Koedam (712) 470-0198 (sale 21/20/13)
March 4, 2013
(sale 2/26/13)
New Holland Sales Stables
New Holland, PA (717) 354-4341
(sale 2/27/13)
$450
$600
$300
$150
$200
$50
$950
$100
$330
$20
$770
$70
$180
$50
$220
$50
N/T
$1,347
$51
N/T
$109/cwt
$4/cwt
$115/cwt
$23/cwt
$85
$100
N/T
$1,010
$15
N/T
N/T
$850
$150
$1,385
$165
$115
$35
N/T
$1,225
$225
$1,925
$290
$1,509
$36
$1,415
$76
N/T
$85/cwt
$24/cwt
$89/cwt
$5/cwt
N/T
N/T
N/T
Chehalis Livestock Market
Chehalis, WA (360) 748-3191 (sale 2/22/13)
$1,375
$50
$1,175
$200
$1,110
NC
N/T
$69/cwt
$8/cwt
$71/cwt
$7/cwt
N/T
$85
N/T
Producers Livestock
Jerome, ID (208) 324-4345 (sale 2/27/13)
$1,490
$20
$1,440
$80
$1,330
$70
N/T
$95/cwt
$86/cwt
$8/cwt
N/T
N/T
N/T
Sulphur Springs Livestock & Dairy Auction
Sulphur Springs, TX (903) 885-7739
(sale 2/21/13)
$1,325
$25
$1,050
NC
$1,050
NC
N/T
$550
$50
$700
$100
$320
$120
$175
$15
N/T
Escalon Livestock Market, Inc.
Escalon, CA (209) 838-7011
(sale 2/27/13)
$1,500
NC
$1,100
NC
$1,075
NC
N/T
$90/cwt
NC
$175/cwt
NC
N/T
N/T
$900
$200
(sale 2/26/13)
(sale 2/21/13)
$970
$120
N/T
Contact Judy about being included in Progressive Dairyman’s Market Watch! [email protected] • (208) 324-7513
$1,200
N/T
NC = No change N/T = No test Decrease in price
$100
Increase in price
Log on to www.progressivedairy.com/marketwatch to get auction reports from more locations!
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12
[email protected]
Progressive Dairyman
Sexing Technologies and the Sexing Technologies logo are trademarks
or registered trademarks of Inguran LLC dba Sexing Technologies.
Issue 5 • March 21, 2013
MARKET WATCH
Dairy slaughter - 3 years
85000
75000
65000
55000
CULLING
High: 72,500
Low: 41,100
2012
2011
2013
2011
2012
2010
45000
Feb
Jan
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
35000
Through the first
eight weeks of the
year, slaughter has
outpaced 2012 by
27,300 head
(5.6 percent).
Warren Wagner
Dairy Adviser
Stewart-Peterson Inc.
wwagner@
stewart-peterson.com
Dairy slaughter for the week ending
February 23 was 64,400 head, up 3,300
head from the same week last year.
Through the first eight weeks of the
year, slaughter has outpaced 2012 by
27,300 head (5.6 percent). Last year’s
high slaughter rate seems to be the
new normal as 21 of the past 24 weeks
have seen slaughter of at least 62,500
head, including a record 72,500 head
slaughtered the week of January 12.
In the February 20 Milk Production
report, the USDA pegged the U.S. dairy
herd at 9.225 million head for the month
of January, up 7,000 head from the prior
month. In spite of the high slaughter
seen throughout 2012, the U.S. herd is
now 2,000 head greater than it was in
December 2011. Although still 48,000
head lower than the April 2012 peak of
9.273 million head, the U.S. herd has
now grown for the third straight month.
The U.S. average price for dairy
cows in February was $80.1 per
hundredweight (cwt), up $1.80 per cwt
from the month prior and up for the
third straight month. Cull price was
down $1.10 per cwt from February 2011
and is the first year-over-year decrease
since January 2009. Should prices follow
the pattern seen in recent years, we
should see a peak in April to May.
Live cattle futures rebounded
at the end of January after a postholiday sell-off, only to run into a
strengthening U.S. dollar in February.
The U.S. Dollar Index hit the bottom
of a six-month trading range at 78.9180
on February 1 and rallied from there,
peaking at 82.6040 on March 6. In
doing so, the index broke out of the
top-side of the trading range where
it is currently finding support. Live
cattle futures took another shot on
March 6 in a volatile day believed to be
caused by fund liquidation and fears
of short-term oversupply. Inclement
winter weather has caused production
disruptions, leading some to believe
that more animals are available for
slaughter short-term. On March 6, the
April futures contract bottomed at
$127.3 per cwt, down $10.70 per cwt
from the December 19 high of $138 per
cwt. PD
Issue 5 • March 21, 2013
Progressive Dairyman
13
MARKET WATCH
MILK
205
NC
-1.2%
-1.0%
99.0%
580
1,900
1,102
California
162
NC
-4.2%
-4.3%
95.7%
104.5%
Wisconsin
1,270
1,870
2,375
NC
+4.5%
+4.9%
2,375
Michigan
377
2,025
763
104.6%
763
394
101.2%
Colorado
135
2,030
274
98.8%
274
NC
+3.1%
+4.6%
Indiana
+2
-1.2%
-1.3%
98.7%
320
2,150
688
688
132
1,855
245
245
+1
+3.1%
+10.9%
110.9%
NOTE: The colored bar represents cumulative year-to-date
milk production for 2013. When it does not surpass the
dotted line at the center of the box, it indicates state production
is below the previous year’s total (2012). When it does surpass the
dotted line, it indicates production is above the previous year’s total.
322
103.5%
Missouri
93
1,235
115
115
+1
+2.2%
+2.2%
535
1,690
904
Texas
818
103.1%
904
+1
+1.8%
+0.9%
100.9%
103.5%
NC
-2.8%
-2.5%
271
1,710
463
463
+1
+3.3%
+3.6%
Virginia
104.5%
94
1,600
150
97.5%
+2
-1.1%
-1.1%
98.9%
9,225
1,854
17,100
17,100
-1
+1.6%
-0.7%
150
U.S. Total
435
1,880
818
1,132
NC
+3.1%
+3.1%
Ohio
104.6%
-1
+5.1%
+0.4%
100.4%
175
1,840
322
Kansas
New Mexico
Arizona
190
2,075
394
NC
+1.2%
+1.2%
98.7%
NC
NC
-1.2%
610
1,855
1,132
Pennsylvania
100
1,730
173
NC
-1.0%
-1.3%
New York
NC
+1.8%
+3.1%
102.4%
173
1,102
90
1,805
162
3,462
807
NC
+4.5%
+4.5%
Illinois
Idaho
Utah
1,780
1,945
3,462
NC
+2.1%
+2.4%
391
99.8%
Oregon
123
1,665
205
465
1,735
807
205
1,905
391
NC
-0.5%
-0.2%
524
Minnesota
Iowa
Washington
264
1,985
524
U.S. MILK PER COW UP 0.7 PERCENT
+7
+0.7%
+0.5%
99.3%
Vermont
134
1,650
221
Florida
122
1,730
211
100.5%
211
NC
-2.8%
-2.8%
221
NC
+1.5%
+2.3%
102.3%
97.2%
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Progressive Dairyman
Issue 5 • March 21, 2013
NORTHEAST STATES SHOWING INCREASE IN MILK PRODUCTION
Robert Cropp
The USDA’s
Professor Emeritus
release of January
University of Wisconsin – Madison
milk production
showed milk production continues to run
higher than a year ago, but just 0.5 percent higher. Milk cows
were 17,000 head lower than a year ago, for a 0.2 percent
decline. Milk per cow was 0.7 percent higher. Milk cow
numbers, which were declining May through October, have
increased since then by 8,236 head.
Northeast states are all showing increases in milk
production, mainly due to better milk per cow. January,
compared to a year ago, shows production up 3.1 percent in
New York, 0.9 percent in Pennsylvania, 3.6 percent in Ohio
and 3.1 percent in Michigan. Upper Midwest states also had
increases. Production was up 2.4 percent in Iowa, 4.5 percent
in Minnesota and 4.9 percent in Wisconsin. For Iowa and
Minnesota, all of the increase was due to more milk per cow.
Wisconsin had 5,000 more cows and 80 pounds more milk
per cow. PD
Legend
New York
Number of cows
(in thousands)
610
1,855
1,132
Milk per cow
(month)
(lbs.)
Total milk
production
(month)
(in millions of lbs.)
Annual percent
change
Annual percent
change
FEB ’13
95%
Year-to-date milk
production (total)
(in millions of lbs.)
Monthly change
(in thousands)
NC
+3.1%
+3.1%
1,132
100%
105%
103.1%
Percentage of year-todate production versus
previous year-to-date
U.S. HERD STATS
9,300
Jan. 2013: 9,225
High: 9,273
Milk cows (in thousands)
Low: 9,163
9,275
9,250
2012
9,225
9,200
9,175
2011
9,150
Feb
2012
1,875
1,850
1,825
1,800
1,775
1,750 2011
1,725
1,700
1,675
Feb
2012
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
Jan
2013
Milk per cow (in pounds, 30-day equivalent)
Jan. 2013: 1,794
High: 1,858
Low: 1,706
Jan. daily avg.
milk per cow:
59.8 lbs.
Mar
17,500
17,250
17,000
16,750
16,500
16,250
16,000 2011
15,750
15,500
15,250
Feb
2012
Apr
May
2012
June
July
Aug
Sept
Oct
Nov
Dec
Jan
2013
Milk production (in pounds, 30-day equivalent)
Jan. 2013: 16,548
High: 17,232
Low: 15,687
2012
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
Jan
2013
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Issue 5 • March 21, 2013
Progressive Dairyman
15
MARKET WATCH
DAIRY PRICES
CHEESE AT LOWEST PRICE SINCE JUNE 2012
Katie Krupa
$25
$23
Director of Producer Services
Rice Dairy
[email protected]
Fluid milk prices (in dollars)
Mar. 2013: $17.80
Mar. 2013: $19.60
High: $21.78
High: $23.84
Low: $13.22
Low: $14.64
$21
$19
$17
CA Class
1 price
$15
$13
16
Federal Class I price
Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar
2010
2011
2012
2013
Progressive Dairyman
As we slog through the end
of winter a little weary and ready
for the break of some warm spring
days, the dairy markets also seem
to feel the effects of winter. Since
the beginning of the year, the
markets have experienced some mild
volatility, but ultimately we haven’t
seen the market change direction or
change price too drastically. While
the Class III futures price for March
is currently trading below $17,
the March price has been trading
roughly in the range of $16.90 to
$17.50 for the past five weeks. As it
looks now, the March price will be
the lowest of the first quarter, and if
the market were to settle at the time
of this writing, the average would be
around $17.40.
Looking out to the rest of the
year, the futures prices are trading
higher than the first-quarter
prices, but many are wondering if
those increases will be realized.
The April-to-December Class III
futures average is currently below
$18, but just a couple weeks ago this
average was nearly $18.40, which
has many producers worried that
the slide will continue. While the
declines aren’t the worst we’ve ever
seen, dairy producers are taking
notice because higher feed costs and
limited availability will mean many
producers will be working with tight
margins (if any) until milk prices
increase and/or feed prices decrease
if we have good weather this planting
season.
Many producers are struggling
to make the current prices profitable,
especially producers with higher
feed costs and those out West who
typically receive a lower price for
their milk. There continues to be
a large disparity in profitability
between producers in the West
and Southwest, who are struggling
to break even, and producers
throughout much of the remainder
of the country, who had a decent year
in 2012 and so far a couple decent
(not great) months of 2013.
Total U.S. milk production keeps
moving higher, and although this
January’s gains were modest (up
0.5), the increase comes on top of
the 2012 year-over-year increase of
3.8 percent. That puts the January
2013 production 4.3 percent higher
than 2011. In addition to production,
storage numbers are increasing too.
Butter stocks are up 21 percent, and
total cheese is up 1 percent from last
year. But the interesting thing is that
while the U.S. dairy industry is in a
slump, the international market is
doing very well.
Oceania dairy prices continue to
move higher according to the USDA’s
Issue 5 • March 21, 2013
BUTTER PRICE REMAINS STEADY
$19
by Royer Enterprises
Class III (in dollars)
$23
$21
Bunker Shavers
« Front-end
loader model
Feb. 2013: $17.25
High: $21.67
Low: $15.23
Futures
2013
2014
$6,000
$17
$15
Skidsteer «
model
$13
$3,800
2015
Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb
2011
2012
2013
Butter (weekly average in dollars)
$2.50
$2.25
$2.00
Mar. 2, 2013: $1.56
High: $2.16
Feed High-Quality Silage from your bunker with our machines
Low: $1.31
2011
$1.75
«
2012
$1.50
Telehandler
$4,800
$1.25
3/2/13
2/2/13
1/5/13
12/1/12
11/3/12
10/6/12
9/1/12
8/4/12
7/7/12
6/2/12
5/5/12
4/7/12
3/10/12
After bottoming out at $1.45 earlier in year, the
butter price moved up to $1.605 in the middle
of February. Although the price has backed
down from the $1.60s and moved into the high
$1.50s, the butter price seems comfortable at
these higher levels.
(574) 361-3343
$1.58
$1.56
$1.54
3/5/13
3/4/13
3/1/13
2/28/13
2/27/13
2/26/13
2/25/13
2/22/13
2/21/13
2/20/13
2/19/13
2/18/13
2/14/13
2/13/13
Cheese (weekly average in dollars)
Mar. 2, 2013: $1.60
High: $2.15
Low: $1.47
$2.05
2011
$1.85
$1.65
2012
3/2/13
2/2/13
1/5/13
12/1/12
11/3/12
10/6/12
9/1/12
8/4/12
7/7/12
6/2/12
5/5/12
4/7/12
3/10/12
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$1.65
$1.60
$1.55
$1.50
3/5/13
3/4/13
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2/27/13
2/26/13
2/25/13
2/22/13
2/21/13
2/20/13
2/19/13
2/18/13
2/14/13
2/13/13
2/12/13
The spot cheese price experienced a little
bounce in mid-February as the Block-Barrel
average moved up to nearly $1.66, but
unfortunately the price increase was shortlived. By the end of February, the average
spot cheese price was down to roughly $1.55,
which is the lowest price since June 2012.
www.bunkershavers.com
$1.60
2/12/13
$2.25
See them in action at
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Non-fat dry milk
$1.8
$1.7
$1.6 2011
Feb. 2013: $1.63
High: $1.75
Low: $1.21
$1.5
2012
$1.4
$1.3
$1.2
Mar
2012
Apr
May
June
July
Aug
Dairy Market News, and Western
European prices are still high,
although they have moved slightly
lower in recent weeks.
The Oceania cheddar cheese
price is $1.8375, Oceania butter is
$1.66 per lb and the European price
is $1.94. In addition to cheese and
butter, powder prices continue to
trade at strong prices compared to
domestic prices.
So although the U.S. seems to be
in a little slump, and the upcoming
spring flush may only add to the
Issue 5 • March 21, 2013
Sept
Oct
Nov
Dec
Jan
2013
Feb
sluggish market, the international
market seems to be a beacon of
hope. The general thought is that
prices will continue to chug along
for the next couple months, but as
we get to the early summer months,
the bounce we are seeing in the
international market will hit the
U.S. and prices will rise. Obviously,
all this remains to be seen, but a
strong world economy and good
international markets has always
been favorable to the domestic dairy
industry. PD
Progressive Dairyman
17
export
The following update is provided by the U.S. Dairy Export Council (USDEC), a non-profit, independent membership organization that represents the global trade interests of
U.S. dairy producers, proprietary processors and cooperatives, ingredient suppliers and export traders. Its mission is to enhance U.S. global competitiveness and assist the
U.S. industry to increase its global dairy ingredient sales and exports of U.S. dairy products. USDEC programs and activities are supported by the dairy checkoff program,
with additional funding from the U.S. Department of Agriculture, Foreign Agricultural Service and from membership dues.For more information, go to www.usdec.org.
WATCH
Markets firming in early 2013
Global dairy markets firmed
steadily in the first two months of
the year, driven by drought in New
Zealand that led to a sharp end to
the production season. Farmers have
dropped back to once-a-day milking
or drying cows off completely. Milk
production in New Zealand, which was
tracking 7 percent above prior-year
levels in June to December, is expected
to run about 7 percent lower in January
to May.
Other countries are struggling to
pick up the slack:
•
Australian farmers are dealing with
low margins, plus weather that’s too
hot and dry in some places and too
wet in others. Aussie output was down
more than 5 percent in January and
forecast to be flat in the 2012-2013
season.
•
Argentina has become less of a factor
on the world market. Milk production
was down 8 percent in the fourth
quarter and exports were off 20 percent.
• EU milk production was down 1.6
2012-13 World dairy prices ($/lb.)
export volumes out of New Zealand.
Kiwi exports were up 23 percent in the
second half of 2012, gaining share of
world trade. As a result, U.S. and EU
markets saw inventories build due to
slower sales from overseas, even with
shrinking milk production.
Buyers are mostly covered into
the second quarter, though there’s a
growing concern that supplies will
be constrained in the months ahead.
China continues to buy heavily, with
2012 imports up 20 percent and January
purchases up 54 percent.
•
Meanwhile, U.S. production is
actually exceeding expectations, with
output up 1.1 percent in November to
January. But that growth rate is still
below the long-term trend.
For most of the northern
hemisphere winter, lagging global milk
production was overshadowed by record
NDM/SMP exports
0.72¢
Source: Global Trade Information Services, USDA.
$1.85
0.67¢
$1.70
0.62¢
$1.55
0.57¢
$1.40
0.52¢
$1.25
(Million Metric Tons)
160000
(Whey)
WORLD MARKETS
(Cheddar, Butter, SMP, WMP)
$2.00
percent in the fourth quarter. Weather
has been relatively mild this winter and
output is rising seasonally, but milk
collections are still below a year ago.
130000
100000
70000
40000
0.47¢
$1.10
Q1
Butter
SMP
WMP
Q3
Q4
Q1
2011
WK 1 5 9 13 17 21 25 29 33 37 41 45 49 WK 1 5 9 13 17 21 25 29 33 37 41 45 49
Cheddar
Q2
EU
US
NZ
Whey
Source: USDA’s Dairy Market News. Cheddar, butter, SMP and WMP are Oceania; whey is Europe.
Fritsch Forage Facer
23%
Q2
Q3
Q4
2012
In the fourth quarter, New Zealand exports of NDM/SMP
jumped 23 percent (vs. prior year) while U.S. shipments
fell 10 percent and EU volumes dropped 41 percent.
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Progressive Dairyman
Issue 5 • March 21, 2013
U.S. dairy exports up 3 percent in 2012
U.S. exporters shipped a recordhigh 1.62 million tons of dry ingredients
(milk powder, whey, lactose), cheese
and butterfat in 2012, up 3 percent from
the prior year, according to USDA-FAS
trade data. The value of all U.S. dairy
exports was $5.21 billion, up 8 percent.
On a total-solids basis, exports were
equivalent to 13.2 percent of U.S. milk
production, up slightly from an average
of 13.0 percent in 2010 and 2011. Over
the last decade, U.S. export volumes
have increased 12 percent per year.
U.S. exporters posted record
volumes of nonfat dry milk/skim milk
powder (NDM/SMP), cheese and whey
protein concentrate (WPC) sales in
U.S. Dairy Exports, January-December (metric tons)
2012. Cheese shipments were 260,033
tons, up 16 percent from 2011. NDM/
SMP exports were 444,727 tons, up
2 percent. And WPC exports were
233,362 tons, up 27 percent.
However, U.S. shipments slowed
after mid-year. Overall volume and
value were 9 to 10 percent lower in
the second half of the year than the
first. Exports of nonfat dry milk/
skim milk powder (NDM/SMP) and
cheese were both 16 percent lower in
July to December than in January to
June. Volume declines coincided with
U.S. commodity prices moving above
Oceania prices last summer when
drought fears moved U.S. prices up.
U.S. and China resolve certificate issue
2012
% change
2012 % of U.S.
production
NDM/SMP
435,081
444,727
+2.2
45%
Whey proteins
450,477
468,144
+3.9
68%
Lactose
311,685
307,000
-1.5
66%
Cheese
224,467
260,033
+15.8
5.3%
Butterfat
62,684
46,019
-26.6
5.5%
Fluid milk (in thousand liters)
76,113
54,798
-28.0
NA
Food preps (blends)
71,930
75,662
+5.2
NA
TOTAL VALUE ($ million)
4,821.6
5,207.5
+8.0
NA
U.S. dairy export value was up 8 percent in 2012.
Source: USDA’s Foreign Agricultural Service; U.S. Dairy Export Council
U.S. dairy trade as a percent of milk produced
(total solids basis)
16
In December, Chinese and U.S. regulators approved a dairy certificate
ensuring that the flow of U.S. dairy goods into the largest dairy importer in
the world continues unabated. The issue dates back to early 2010, when China
revised its dairy certificate as part of sweeping efforts to upgrade domestic
food safety. USDEC staff worked closely with Chinese officials and a U.S.
interagency regulatory team to keep the market open in the interim and to
complete the negotiations.
“U.S. dairy exports to China topped $415 million in 2012,” says Tom
Suber, president of the U.S. Dairy Export Council (USDEC). “With the
certificate question settled, we expect U.S. dairy export value to China could
more than double by 2017.” USDEC, primarily funded by the dairy checkoff,
leads overseas marketing development on behalf of the U.S. dairy industry.
Although there never was a market closure, the unresolved certificate
issue and threat of closure loomed over U.S.-China dairy trade. USDEC
estimates the uncertainty of the certificate situation depressed U.S. dairy
ingredient sales by 5 to 10 percent and cheese sales by as much as 50 percent.
Issue 5 • March 21, 2013
2011
Source: National Milk Producers Federation/U.S. Dairy Export Council.
Exports
Imports
13
9
6
2
J
M
S
2007
J
M
S
J
2008
M
S
2009
J
M
S
2010
J
M
S
2011
J
M
S
2012
1.22 million 13.2%
Exports were equivalent to the milk
volume from about 1.22 million cows.
In 2012, U.S. dairy exports were
equivalent to 13.2 percent of
U.S. milk production.
Progressive Dairyman19