Washington Dairygrams - January 25, 2014
As printed in our January 25, 2014 issue...
U.S. DAIRY EXPORTS SET A NEW RECORD with one month yet to be tallied in 2013. The 11-month total of $6.1 billion and 15.6 percent of total milk solids passed last year’s $5.1 billion, 13.4 percent watermark.
CLASS III FUTURES CLIMBED $2 per cwt. since early November for February through July contracts. Strong global demand underpins prices.
TOTAL MILK OUTPUT COULD GROW 2.1 percent in 2014 to reach 205.6 billion pounds, projected USDA economists. Those potential gains would beat the 0.6 percent growth (201.3 billion pounds) pegged for 2013.
FEED COSTS WERE THE CULPRIT among Western herds not showing a profit through June, revealed accounting firm Frazer LLP. Feed costs ran as much as 75 cents per cwt. higher in Ariz., N.M., and Texas; that led to negative returns compared to Calif., Idaho, Ore., and Wash. counterparts.
EVEN THOUGH USDA LOWERED THE CORN HARVEST by 0.5 percent in December, the 13.9 billion bushels led to the largest stocks in four years.
CORN GROWERS COULD STRUGGLE to break even as Illinois economists project the state’s farmers would need $4.31 per bushel to cover costs in 2014. However, growers have banked a number of record profits.
GRAIN WAS AMONG THE WORST PERFORMERS in the S&P index of 24 commodities. Corn led the pack, down 40 percent in 2013; wheat prices, off 22 percent; soybeans, down 7.5 percent. Meanwhile, many by-product feeds haven’t followed suit; learn more in the Feeding Column on page 49.
EXPORTS OF BRED DAIRY HEIFERS climbed over 61,000 through November. Russia purchased 23,400; Mexico, 20,600; and Turkey, 11,800. Only 2011’s 73,600 head stands as a higher number since 2000.
A PROPOSAL TO CREATE A FEDERAL MILK ORDER in California has gained traction in the state. Three co-ops that handle 80 percent of the state’s milk are working together on the project. Entire process would take two years to complete under the best-case scenario.
CLASS IV PRICE SET A RECORD in 2013 at $19.05 per cwt.; that was up one penny from 2011 average for dry milk and butter products. Class III prices for cheese averaged $17.99; off 36 cents from 2011’s top finish.
BRIEFLY: Pressure to complete the farm bill has been mounting on grain state legislators now that commodity prices have softened. This fall’s midterm elections are also having an impact. Cattle futures were on pace for the fifth straight annual gain as U.S. beef output could be off 5.7 percent this year. Dairy product prices were off 0.8 percent in early January trading for the 9-product mix at Global Dairy Trade. Dean Foods continues to shutter plants after it lost its Walmart contract last year.