Washington Dairygrams - April 10, 2014
As printed in our April 10, 2014 issue...
AN ALL-MILK PRICE WITH A $21.70 midpoint was the latest projection for 2014 by USDA. That value grew by $1.60 since December’s estimate.
A RECORD UNIFORM PRICE OF $24.42 was posted in the Northeast order this February. That was $1.20 higher than the August 2011 best. Component levels were 3.87 percent butterfat and 3.12 true protein.
DESPITE SPOT CHEESE and butter reaching new price highs, market indicators have started to show signs that prices might begin easing. Global Dairy Trade index fell 5.2 percent, the steepest decline since last June.
CHINA HAS BEEN A PRIMARY DRIVER in strong product sales. Rabobank research indicated purchases in January and February were up 60 percent compared to last year. Orders were expected to ease as China’s milk production recovers from disease- and weather-related setbacks.
FAPRI FORECASTED A $19.01 All-Milk price in 2015 followed by the low $18 range. From 2018 to 2023, it pegged a mid-$17.50 figure.
AFTER POSTING A 46 PERCENT DROP in net farm income per cow in 2012, profit per cow rebounded by 26 percent last year for New York dairy farmers, estimated Cornell’s Jason Karszes. Costs rose by 7 percent.
COSTS TO GROW CORN ranged from $4.90 to $5.20 per bushel while soybeans were $12.32 to $12.88, reported University of Illinois economists.
FOR THE UPCOMING GROWING SEASON, prices could average $4.62 for corn and $11.36 for beans. As a result, soybean acreage could be up 6 percent while corn could fall 2.4 percent, suggested Informa Economics.
SOME 800,000 ACRES or 10 percent of California’s farmland could be fallowed due to drought. Additional acreage may only receive 40 percent of its water allotment, reported the California Farm Water Coalition.
MARCH CATTLE INVENTORIES FELL for the 19th consecutive month, reported USDA. However, with strong milk prices, dairy cow culling dropped by 22,000 head when compared to the same time last year.
GROUND PRODUCT ACCOUNTED FOR 62 PERCENT of all beef sales last year. As a result of tight supplies, wholesale beef prices have climbed to new highs of $263.87 per cwt., up 20 percent from last year.
BRIEFLY: February milk rose 1.1 percent nationally. USDA added South Dakota to its estimates for the top 23 dairy states while Missouri was dropped from the mix. LGM-Dairy reduced producer price risk 28 to 39 percent, reported USDA. New LGM-D sign-ups have started, but producers should hold off signing up beyond August 2014 as farms can only participate in LGM-D or Margin Insurance, not both. Rules for USDA’s Margin Insurance should be developed by this September. Iowa farmland values dropped 5.4 percent during the past six months. It was the first drop in five years, reported the Iowa Realtors Land Institute.