2013 cheese production up 2.3%; butter up just 0.4%
USDA released its monthly Dairy Products report on Feb. 4, summarizing December 2013 and providing a first glimpse at total year 2013 production estimates:
• Total cheese output (excluding cottage cheese) was 973 million lbs. in December 2013, 2.3% above December 2012 and 4.9% above November 2013. Total 2013 cheese production was estimated at 11.14 billion lbs., up 2.3% from 2012.
• Italian type cheese production totaled 433 million lbs. in December 2013, 5.6% above December 2012 and 8.1% above November 2013. Total Italian type cheese production was estimated at 4.79 billion lbs. in 2013, up 3.5% from 2012.
• Mozzarella cheese production totaled 433.3 million lbs. in December 2013, up 9.0% from November, and up 3.3% from December 2012. Mozzarella production was estimated at 3.72 billion lbs. in 2013, up 3.0% from 2012.
• American type cheese production totaled 376 million lbs. in December 2013, 2.2% below December 2012 but 6.6% above November 2013. Total American type cheese production was estimated at 4.42 billion lbs., up 1.4% from 2012.
• Cheddar cheese production totaled 270.9 million lbs. in December 2013, up 7.9% from November, but down 2.8% from December 2012. Cheddar production was estimated at 3.20 billion lbs. in 2013, up 1.6% from 2012.
• Butter production was 161 million lbs., 6.9% below December 2012, but 12.9% above November 2013. Butter production was estimated at 1.87 billion lbs. in 2013, up 0.4% from 2012.
To find the full report, click here.
CWT assists with 4.6 million lbs. of cheese, butter, WMP export sales
Cooperatives Working Together (CWT) accepted 25 requests for export assistance from Bongards Creameries, Dairy Farmers of America, Foremost Farms USA, Michigan Milk Producers Association, Tillamook County Creamery Association and United Dairymen of Arizona to sell 3.889 million lbs. of cheddar, Gouda and Monterey Jack cheese, 209,439 lbs. of butter and 518,086 pounds lbs.) of whole milk powder to customers in Africa, Asia, Central America and the Middle East. The product will be delivered in January through June 2014.
Year-to-date, CWT has assisted member cooperatives in selling 12.383 million lbs. of cheese, 3.751 million lbs. of butter and 518,086 lbs. of whole milk powder to 17 countries on four continents. These sales are the equivalent of 198.8 million lbs. of milk on a milkfat basis.
NZX granted registration as Foreign Board of Trade by CFTC
The U.S. regulatory Commodity Futures Trading Commission (CFTC) has registered NZX as a Foreign Board of Trade under the U.S. Commodity Exchange Act. The registration will allow NZX to permit direct access to U.S. participants to trade NZX Dairy Derivatives on NZX’s trading platform. Whole milk powder, skim milk powder and anhydrous milk fat futures, and whole milk powder options can be traded on NZX.
Following demand from U.S. and European customers, in August 2013, NZX extended Dairy Derivatives trading opening hours to overlap into their trading day.
Volume executed in NZX Dairy Derivatives grew by 52% in 2013, with significant growth in the skim milk powder contract, and open interest across all three futures up by more than 300%.
Beef cattle industry beginning transition to expansion
Recent record high cattle prices and much lower feed prices have just begun to provide the profit incentives that will be necessary to move the beef cattle industry toward expansion after a continual decline in numbers since 2007, according to Chris Hurt, Extension economist at Purdue University. However, while those incentives have turned positive, the rebuilding of the beef herd is expected to take multiple years.
The cattle herd in the U.S. has been in a long-term decline, reaching the lowest level since 1951. Beef cow numbers fell by 253,000, or 1%, in 2013, meaning the 2014 calf crop will be very small, about 33.7 million head, a 10% reduction since 2007.
The recent USDA Cattle inventory update suggests the industry has barely begun the expansion process, if at all. Beef heifers being retained for beef cow replacements were up nearly 2%, too small to increase beef cow numbers during 2014.
The question of whether the beef cow herd will grow or continue to decline in 2014 will also depend heavily on the rate of cow slaughter. Some cow/calf operations will see 2014 as the golden opportunity to get out with record high cow prices.
The price outlook is extremely favorable for 2014 to 2016 for the beef industry. Beef supplies this year are expected to be down 5%.
Finished cattle prices are expected to average about $133 per live hundredweight in 2014, exceeding the previous record high near $126 in 2013. The extremely high prices in January 2014, around $143, are expected to moderate to an average of about $140 in February and March. Then prices may move down seasonally to a second quarter average in the mid-$130's before reaching the lows of the year in the third quarter close to an average in the very-high $120's. The final quarter of 2014 is expected to have prices in the low-$130's. Strong prices are expected to continue into 2015.
The California drought has caught much attention. The state's beef cow inventory is only two percent of the nation's beef cows and four percent of the cattle on-feed. However, California is the largest dairy state with 19 percent of the nation's milk cow inventory. Continued drought in California and surrounding states could become an important story to the cattle and beef industry in 2014.