Washington Dairygrams - December 2013
As printed in our December 2013 issue...
ECONOMIC INDICATORS ARE POINTING UP for most key dairy measures. December to May Class III milk futures climbed $1.10 from early November trading. Those six contracts averaged $18.18 per cwt.
THE MILK-FEED RATIO CONTINUED TO IMPROVE as November posted a 2.25 benchmark. At $21.30 All-Milk price, the total feed bill was $9.46 per hundredweight for an income over feed cost of $11.84.
NOVEMBER CORN WAS $4.29 PER BUSHEL, down $2.72 per bushel from the same time last year, according to USDA’s Agricultural Prices. Soybean prices also eased by $1.60 to settle at $12.70. Hay prices remained historically high as crop farmers rushed to plant more grain.
LOWER FEED PRICES HAVE TRICKLED DOWN everywhere as grain farmers are holding on to the new crop to minimize taxable income. This situation, and reduced milling activity, hasn’t relieved by-product prices.
OCTOBER CHEESE OUTPUT ROSE 2.1 PERCENT compared to last year; butter was up 1.2 percent. Cheese inventories for the month rose 3 percent. However, butter dropped 25 percent due to strong sales.
MILK PRODUCTION ROSE 1 PERCENT nationally in October compared to a year earlier. Among major states, California, rose 1 percent; Wisconsin, up 0.9; Idaho, down 2.7; New York, up 2.8; and Pennsylvania, up 0.2.
IN JUST 10 MONTHS, DAIRY EXPORTS have already topped last year’s record. At the current pace, U.S. dairy exports will top $6.6 billion, which would be 30 percent higher than the prior year. On a total solids basis, October exports were 16.3 percent of U.S. production; imports 3.4 percent.
PRODUCT PRICES ROSE 3.9 PERCENT in early December trading held at the Global Dairy Trade. The nine-product mix averaged $2.26 per pound.
DAIRY COW CULLING remained ahead of last year’s pace as 2.7 million cows were sent to packing plants through November 16. That was 34,100 head more than last year. Prices averaged $80.50 per cwt.
THERE ARE SIGNS A NEW FARM BILL may still get hammered out. However, with Congress scheduled for recess on December 13, a one-month extension of the previous bill may be required to bridge the gap.
DRUG USE AND TREATMENT were reclarified when the American Association of Bovine Practitioners updated its “Veterinary-Client-Patient Relationship” (VCPR) document. The VCPR is required by FDA.
BRIEFLY: Interest rates were creeping up with 30-year fixed loans at 4.46 percent; 15-year at 3.47. Commercial rates are higher. Dean Foods was on pace to close 10 to 15 percent of its plants in an effort to reduce costs. Through October, heifer exports surpassed last year at 53,600 head.