Archive for the ‘Todays Dairy News’ Category

Dairy Markets Tumble: Cash Cheese Drops Over 21 Cents Thursday

October 23, 2014 — The hourglass is out of sand for the “demand” season, according to dairy analyst Matt Gould. One trade saw cash block cheese plunge 21.25 cents Thursday to $2.1575. The Barrels lost another 8 cents to $1.99 on one lone offer.

Cheese wasn’t the only price to drop. The spot butter market continues to spiral downward, losing 9 cents on Thursday to $1.90. 9 carloads of butter traded hands on one offer. Grade A powder saw a 1.75 cent drop Thursday to $1.2975.

November FO Class I Slips 13 Cents

October 22, 2014 — The Agriculture Department announced the November Federal order Class I base milk price this afternoon at $24.06 per hundredweight (cwt.), down 13 cents from October but $3.86 above November 2013, and equates to about $2.07 per gallon.

That put the 2014 average at $23.35 per cwt., up from $18.70 at this time a year ago, $17.10 in 2012, and $19.19 in 2011.

The two-week, NDPSR-surveyed butter price used to calculate today’s price was $2.8318 per pound, up 6.7 cents from October. Nonfat dry milk averaged $1.5052, up 2.9 cents. Cheese averaged $2.3001, down 0.6 cent, and dry whey averaged 65.90 cents, down 1.6 cents from October.

Producers Should Remain Profitable in 2015 Despite Lower Milk Prices

October 22, 2104 — No real surprise in the 4.1% jump in milk production for September, given where we were at last year regarding milk per cow. That’s according to FC Stone dairy FCstoneeconomist Bill Brooks, who joined us on today’s DairyLine Radio program to discuss.

“I was looking for 3.6% but knew it could be in the range of 4.0 to 4.2%,” he said.

However, he’s still scratching his head from the strong drop off in cow numbers we had from July to August, even though that is somewhat typical for August. The preliminary September figures show a 2,000 head increase.

“Given the profitability…folks are wondering why there aren’t more cows out there on dairy farms,” he said. “It’s probably do to the rise in slaughter numbers last year and less heifer numbers this year.”

Earlier in the year, before things started taking off, people felt comfortable where the margins were going to be at.

“We did see some additional heifers work their way in to feedlots and slaughter plants… and that’s kind of holding us back on our cow numbers,” he said.

The latest milk production report is the strongest gain we have seen this year, putting us 2.5% above last year’s levels through the end of the year, and perhaps closer to that 4 or 5% range.

We did see a rebound last October in milk production. But our five year average gain for September is only 0.9% and Brooks sees a 1.1% gain for the five year average for the remainder of the year.

“We’re doubling up, if not tripling up where our normal percentage gains have been at for the fourth quarter, or at least it looks like we’re setting ourselves up for that,” he said.

Not only our U.S. producers increasing production, but we are seeing more milk throughout the world, particularly in New Zealand, Australia and Europe.

“Everybody’s producing a lot more milk and we’re working our way to the same situation that we have in the grains and oilseeds,” he said. “Something dairy producers are pleased about because of the lower cost feed ingredients, but we’re working our way towards that on the milk side.”

We’ve seen international prices drop off and some commodities domestically drop off, nonfat dry milk being the largest decline up until we saw the butter price crash the last few weeks. At the moment, butter is recording a little bit of a correction and cheese is holding with a fairly decent price, although barrels have been exhibiting a lot of weakness.

“Partly due to the time of year where folks are sourcing their product for the holiday season – a lot of products have been shipped and that’s helping support cheese and butter prices,” he said. “But eventually their going to get caught up in the same kind of market move that we have seen on the nonfat dry milk side.”

Brooks says it won’t be surprising that all of our dairy commodities will be back down below the $2.00 level by the end of the year.

“Dairy producers will be looking at less revenue for their milk but fortunately looking at a lot lower input costs and profitability is expected to be fairly decent into 2015,” he concluded.

Building Leaders for the Future

FuelUp60October 20, 2014 — We’ve reported in the past on the dairy industry’s involvement with the National Football League to get kids on track with eating right and getting exercise, but the Fuel Up to Play 60 program goes beyond that.

That’s according to Arkansas dairy producer and Dairy Management Inc. board member Ryan Anglin, who says DMI just signed another three year contract with the NFL to maintain the dairy presence in schools along with 60 minutes of activity.

“This is the first generation that may not outlive their parents,” Anglin reported on DairyLine Radio. “We’ve got to exercise and eat right.”

He says eating a balanced diet isn’t just about consuming dairy products, although the dairy industry is helping with Smart Slice pizza from Dominos, which meets the school guidelines.

“It’s a whole wheat crust, a low-fat cheese and a chicken pepperoni, really good stuff!” he said. “We also have grab and go breakfasts in schools and the participation is great.”

He says if you go from the lunchroom to the classroom, participation increases about 60 percent as kids like to be in a family unit. Anglin visited a school in Joplin, Missouri where the superintendent praised dairy farmers for what they’ve accomplished.

“There are less visits to the school nurse, less tardiness, and less discipline problems,” he said.

Dairy ingredients such as cheese, milk, and yogurt are in every one of those breakfasts and Anglin reports the consumption has increased, with more dairy being sold and it’s good for the community.

“Dairy farmers and all farmers want to do the right thing,” he said. “If we’re helping these kids to be better people, make better grades on their tests, we’ve accomplished two things.”

He says breakfast has changed for kids and they are not eating as much at home anymore. The dairy industry is looking at new opportunities and new designs of products to get dairy back into the diet.

“We go to these schools and see what these kids have done,” he said. “Fuel Up to Play 60 is a kid program. They design the menu they want to eat.”

Granted, they must have at least three adults to be able to do the program properly. But Anglin has observed some incredible actions on the part of the youngsters. Not only have the eating habits changed but so have habits with kids not living an active life.

A school in Arkansas built a walking trail. Then they came up with the idea to invite a business person once a week to walk with them and they would learn about his or her business. So they could talk to the kids while they were both exercising.

“These are things that kids are doing,” he said. “We’re building leaders for the future. They’re phenomenal.”

The key to it all is very basic. Good nutrition. Good exercise.

September Milk Production Up 4.1%

October 20, 2014 — U.S. dairy farmers got the message. The record high milk prices and low feed costs, pardon the pun, signaled them to “milk ‘em for all their worth.” They added cows and got more out of every one.

The Agriculture Department’s preliminary data issued this afternoon in its Milk Production report shows September output in the top 23 producing states at 15.49 billion pounds, up 4.1 percent from August 2013 and was the nineth consecutive month output was above a year ago. The 50-state total, at 16.47 billion pounds, was up 4.0 percent from a year ago.

Revisions reduced the original August 23-state estimate by 3 million pounds, now reported at 16.2 billion pounds, up 2.6 percent from a year ago.

August cow numbers in the 23 states, at 8.59 million head, were up 4,000 head from August and  78,000 more than a year ago. The 50-State count, at 9.27 million head, is up 2,000 from July and 59,000 more than a year ago.

August output per cow in the 23 states averaged 1,804 pounds, up 56 pounds from September 2013, and the highest production per cow for the month of September since the 23 State series began in 2003.

Looking at the July to September period, milk output totaled 51.1 billion pounds, up 3.5 percent from the same period a year ago, and cow numbers, at 9.27 million head, were up 15,000 from the April to June quarter and 44,000 more than a year ago.

Global Dairy Trade Auction up 1.4%

October 16, 2014 — The latest Global Dairy Trade (GDT) auction saw the weighted average for all products inch up 1.4%, after dropping 7.3% in the October 1 event. This is the first uptick since the short-lived gain on June 17. The price index has pretty much seen declines since reaching its high on February 4. The industry will watch to see if the turnaround is sustained in the next session, which is November 4. The uptick was led today by a 7.4% increase in anhydrous milkfat, which was down 5% in the last event. Sweet whey powder was next, up 4.3%, following a 9.3% plunge last time. Butter was up 3.9% following a 6.6% drop last time. Whole milk powder brought up the rear, up 3.1%, after a 10% plunge in the last event.

Product losses were led by a 5.3% decline in rennet casein, which was down 1.4% in the last event. Buttermilk powder was next, down 3.8%, following an 11.3% descent last time. Skim milk powder was down 3.6%, after a 2.7% dip last time, and last but not least, Cheddar cheese was down 1%, after seeing a 1.2% slip last time.

FC Stone reports the average GDT butter price equated to about $1.1856/lb. U.S., up from $1.1402/lb. in the October 1 event ($1.1567/lb. on 80% butterfat, up from $1.1124/lb.). Contrast that to CME butter which closed this morning at $2.2650/lb. The GDT Cheddar cheese average was $1.3639/lb. U.S., down from $1.3735/lb. The U.S. block Cheddar CME price closed today at $2.2275/lb. GDT skim milk powder, at $1.1169/lb. U.S., is down from $1.1522/lb., and the whole milk powder average at $1.1354/lb. U.S., is up from $1.1083/lb. in the last event. The CME Grade A nonfat dry milk price closed this morning at $1.38/lb. Source: GDT & INTL FCStone

Benefits of Shortening the Dry Period

October 13, 2104 — Joining us on DairyLine today is Ken Zanzalari, Ph.D., who serves as Animate Product Manager for Prince Agri Products, here to discuss a recent trend on dairy farms to have a shorter, single-group dry cow feeding program instead of the traditional two-group cow program.  Listen here:

Here’s a transcript of today’s radio segment:

DairyLine: Ken, what are the benefits for shortening the dry period?

Ken Zanzalari: Bill, the main benefit is keeping cows in production about two weeks longer. If you look at the economics of today’s milk price, I would say $24 milk, an estimated 60 lbs of milk and the cow ready to be dried off, that’s an extra $216 per lactation. If you look at it for a 20,000 lb herd – that’s about another 5% increase in revenue, so a fairly significant number.

Two other benefits that come to mind would be that managing one group of dry cows is just a simpler program than managing a two group dry cow program. The other important thing is fewer cow moves, so we’re not moving cows from one group to another. We’ve reduced that, which has been shown to reduce the social stress and subsequent loss of dry matter intake in those animals, which is extremely important.

DairyLine: So how do shorter dry periods affect feeding a negative DCAD diet to help reduce the risk of low blood calcium in transition cows?

Ken Zanzalari: Regardless of whether you implement a one or two group dry cow program, the risk and the incident level of clinical and sub-clinical milk fever are the same. It’s been documented through several well- run studies that feeding a negative DCAD diet pre partum as part of a one group dry cow program would be similar to implementing it in a two group dry cow program. So, regardless of a one or two group dry cow program, you feed and manage those cows the same with a negative DCAD program.
So, our recommendation at Prince is full acidification with high dietary calcium.

DairyLine: What can you tell us about adding Prince’s nutritional specialty product, Animate, to close-up diets to help achieve a negative DCAD diet?

Ken Zanzalari: Animate is our patented DCAD technology. Probably the biggest attribute when feeding Animate is its palatability – and Animate does that probably better than any other way of feeding a negative DCAD program. A second attribute is that Animate is a complete anionic mineral, meaning that it delivers the other critical mineral nutrients necessary for properly feeding these cows. So, whether you’re feeding a negative DCAD program in a one or two group dry cow program, the use of Animate in a negative DCAD diet will help deliver significant economic payback to the dairymen.

DairyLine: And finally, how can producers determine if the single dry cow program strategy is right for their operation?

Ken Zanzalari: You know, whether a dairyman implements a one or two group dry cow program, I want to make the point that cows do not need a 60-day dry cow period. I still see a lot of dry cows being dried for 50, 55, and over 60 days. Reducing days dry between 40 and 45 is the starting point. I would just encourage them to have a discussion with their nutritional consultant and veterinarian first. That’s their starting point.  Because during periods of low calving, that may be time to switch from a two group to a one group.

So, implementing this as a program that you will go forward with, day in and day out, may be the optimal decision. But certainly, there are other times because of the production cycle of a farm where implementing the one group dry cow program may be more appropriate. It all starts with a discussion with their farm advisors – the herdsman, the folks working with the cows on the farm and certainly their nutritional and veterinary consultant. 

DairyLine: Thanks, Ken.  That’s Ken Zanzalari, Animate product manager with Prince Agri Products.

WASDE: 2014 & 2015 Milk Output Estimate

October 10, 2014 —  USDA’s World Agricultural Supply and Demand Estimates (WASDE) report, released October 10, reduced the milk production forecast for 2014 from last USDAmonth on slower growth in milk per cow. However, for 2015, the production forecast was raised as growth in output per cow is expected higher with relatively lower-priced feed.

• 2014 production and marketings were projected at 206.1 billion lbs. and 205.1 billion lbs., respectively. Both are down 200 million lbs. from last month’s projections. If realized, 2014 production and marketings would be up 2.4% from 2013.

• 2015 production and marketings were projected at 212.8 billion lbs. and 211.8 billion lbs., respectively, both are up 300 million lbs. from a month ago. If realized, 2015 production and marketings would be up about 3.25% from 2014.     Export forecasts for 2014 were lowered as U.S. dairy prices WASDE-534-5 are less competitive, but import forecasts were raised as relatively high U.S. prices encourage larger imports. The trade forecasts for 2015 were unchanged.

Butter, cheese, and whey prices for 2014 are raised from last month as domestic demand continues to support prices. Prices of these products are unchanged for 2015. However, the nonfat dry milk (NDM) price forecasts for both 2014 and 2015 are reduced as U.S. prices are expected to decline to increase the competitiveness of NDM exports.    The Class III price for 2014 is raised on stronger cheese and whey prices, but is unchanged for 2015. The Class IV price is raised for 2014 as higher butter prices more than offset the decline in NDM prices, but for 2015, the lower forecast NDM price results in a lower Class IV price. The all milk price is raised to $24.10 to $24.20 per cwt for 2014, and is lowered for 2015 to $18.95 to $19.85 per cwt.

Quick Glance Dairy price forecasts 

Estimated Forecast

Product 2013 2014 2015    

Class III ($/cwt) 17.99 22.40-22.50 17.25-18.15

Class IV ($/cwt) 19.05 22.40-22.60 17.45-18.45

All milk ($/cwt) 20.05 24.10-24.20 18.95-19.85

Cheese ($/lb.) 1.7683 2.1600-2.1700 1.6950-1.7850

Butter ($/lb.) 1.5451 2.2200-2.2500 1.6800-1.8000

NFDM ($/lb.) 1.7066 1.7600-1.7800 1.4500-1.5200

Dry whey (¢/lb.) 0.5902 0.6500-0.6600 0.5600-0.5900

California November Class 1 Plunges $1.76

October 10, 2014 — The California Department of Food and Agriculture announced the state’s November Class 1 milk prices this morning at $24.33 per hundredweight for the north CDFAand $24.60 for the south. Both are down $1.75 from last month’s record high but are $2.59 above November 2013.

The 10-month average now stands at $24.86 for the north, up from $20.16 at this time a year ago and $18.69 in 2012. The southern average now stands at $25.13, up from $20.43 a year ago and $18.96 in 2012. The November Federal order Class I base price will be announced by USDA on October 22.

Russian Ban Impacting Dairy Trade

October 10, 2014 — Cash dairy markets appeared to be stabilized Thursday and “we’ll see that for a few days at a time,” says Matt Gould, of the Dairy and Food Market Analyst. Speaking in Friday’s DairyLine, Gould reported that “Inventories ran real low so people are more comfortable at these price levels. The pipeline is filling and once that gets filled we’re going to move lower still, but it will take time.”

Dairy product prices have plunged from their newly established record high levels a couple weeks ago and, when asked if those high prices hurt commercial disappearance, Gould answered, “Yes, they did, and we’re seeing it in the data.”

He explained that, like Jerry Dryer, he prefers to analyze the data over a three month span rather than a single month like USDA does.

He reported that American cheese disappearance, in the three months ending August 31, was down 1.2 percent, noting that this is the first trip below year earlier levels in over 12 months. Contrast that to the three months ending in July, where American cheese disappearance was up 3.9 percent, he said.

Other cheese was up 2.7 percent at the end of August, following a 4.2 percent increase in the previous three months. Total cheese disappearance was up 1.7 percent at the end of August after being up 3 percent or more all year long.

Cheese exports in the three months ending in August were up a respectable 11 percent from a year ago, Gould said, but “That pales in comparison to earlier levels which were up 18 percent in July and over 30 percent January through June.”    Gould pointed to the Russian import ban announced in early August for the downfall in dairy exports.

Butter commercial disappearance was down 6.1 percent in the three months ending in August, he said, after being down just a half-percent in July, and up 14.8 percent in June.  Butter exports were down a whopping 60 percent at the end of August, he said.

Nonfat dry milk, skim milk powder disappearance was off 2.2 percent after having been up 7 percent in the three months ending in July. Powder exports were down 10 percent from a year ago, according to Gould.

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