Homegrown feeds push milk COP higher

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CWT assists with cheese, butter export sales

Cooperatives Working Together (CWT) accepted four requests for export assistance to sell 328,489 lbs. of cheddar cheese and 330,693 lbs. of 82% butter. The bids were accepted from CWT-member co-ops Dairy Farmers of America, Maryland & Virginia Milk Producers Association and Tillamook County Creamery Association.

The dairy products will be delivered to customers in Asia, the Middle East, North Africa and the South Pacific, May through July 2014.

Year-to-date, CWT has assisted member cooperatives in selling 53.414 million lbs. of cheese, 46.284 million lbs. of butter and 10.337 million lbs. of whole milk powder to 39 countries on six continents. These sales are the equivalent of 1.610 billion lbs. of milk on a milkfat basis.

 

Butter jumps to $2.25/lb.

Daily CME Cash Trading on Tuesday, May 27, 2014

 

 

 

Daily

 

Close

Change

 

($/lb.)

(¢/lb.)

Cheddar barrels

2.0325

+1.25

Cheddar blocks

2.0200

n.c.

NFDM Grade A

1.7975

+0.50

Butter Grade AA

2.2500

+7.00

 

April COP up slightly

Preliminary monthly total average feed costs rose, reaching the highest total since November 2013 and raising the national average cost to produce milk in April 2014, according to USDA’s monthly Milk Cost of Production report. USDA cost estimates are based on total farm costs per hundredweight of milk sold.

Total feed costs averaged $13.51/cwt., up 47¢/cwt. from revised March 2014 estimates. April 2013 estimates were not available due to budget sequestration. Purchased feed costs, at $7.13/cwt., were unchanged from March, but homegrown feed cost were up 47¢/cwt., to $6.22/cwt., the highest since October 2013.

Feed represented about 55% of total costs in April 2014.

Total costs, at $24.78/cwt. in April 2014, were up 43¢ from March. Other than feed, there were minimal changes in other operating and allocated overhead costs compared to previous months.

 

U.S. monthly dairy costs of production, $ per cwt. of milk sold, 2014

Item

January

February

March

April

Feed costs

13.26

13.25

13.04

13.51

Operating costs/1

16.46

16.41

16.14

16.62

Allocated overhead/2

8.43

8.28

8.21

8.16

Total costs

24.89

24.70

24.35

24.78

1/ includes feed; 2/ includes labor

 

 

 

Source: USDA Economic Research Service

 

 

 

Planted acres: Did the market get it right?

Crop markets have two primary functions, notes Darrel Good, University of Illinois ag economist. One is to allocate available supplies so that stocks are neither depleted nor in surplus by the end of the marketing year. The second is to direct planted acreage so that supplies result in "reasonable" prices for producers and users of the crop in the upcoming marketing year. Continue reading

 

Monthly DMI/NMPF Dairy Market Report

Many key milk and dairy product prices continued to set records in April. And while the dairy futures markets indicate that prices will soon ease back from these levels, the futures have been moderating their assessment of how far prices will adjust downward.

Futures markets currently indicate that milk prices will plateau for much of the second half of 2014 at about the highest level they had ever reached prior to this year. This extraordinary price performance is the result of markets continuing to show increased dairy product sales in the domestic market, strong export shipments, moderate to little increased milk and dairy product production and significant drawdown of domestic dairy product inventories.

Markets had previously anticipated swifter and sharper reactions, on both the demand and supply sides. This has not occurred as expected, giving longer legs to the current dairy price situation and outlook.

A concurrent general decline in the cost of dairy feed is resulting in very favorable milk price margins over feed costs. Current milk price-feed cost margins, as measured by the 2014 farm bill margin formula, will not reach record levels this year, but they will generally rival the only other extended episode of extraordinarily high margins, when this indicator established its current record, in the second half of 2007. Read more



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