August average U.S. milk prices up slightly

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USDA’s preliminary estimate of the August 2014 U.S. average all-milk price, at $23.70/cwt., was up 40¢ from July’s revised estimate, and the highest since May.

Year-to-date, the 2014 average all-milk price stands at $24.16/cwt., up $4.67 from the same period in 2013.

Southeast dairy farmers continued to see the highest prices among major dairy states, at $28.50/cwt. in Florida and $27.10/cwt. in Virginia. Fifteen of the 23 major dairy states saw average milk prices at $24.00/cwt. or higher, with six above $25.00/cwt., according to the USDA/NASS Ag Prices report.

Among the largest milk-producing states, California's August all-milk price averaged $22.10/cwt., up 10¢ from July. New York, at $25.30/cwt., and Pennsylvania, at $25.80/cwt., were each up 40¢. Wisconsin, at $24.10/cwt., was up 60¢; and Idaho, at $22.70/cwt., was up 30¢. New Mexico, at $21.40/cwt., was up 30¢.

 

Prices received for all milk, major dairy states and U.S. ($/cwt.)

 

August 2013

July 2014

August 2014*

Arizona

19.50

23.50

23.90

California

18.11

21.70

22.10

Colorado

20.00

23.30

23.80

Florida

23.80

28.20

28.50

Idaho

18.60

22.40

22.70

Illinois

20.20

23.90

24.10

Indiana

20.70

23.50

24.00

Iowa

20.00

23.80

24.40

Kansas

19.40

22.90

23.20

Michigan

20.40

23.70

24.20

Minnesota

19.80

23.80

24.30

New Mexico

18.10

21.10

21.40

New York

20.60

24.90

25.30

Ohio

21.20

23.90

24.40

Oregon

20.80

24.90

25.20

Pennsylvania

21.20

25.40

25.80

South Dakota

20.40

24.20

24.60

Texas

19.60

23.40

23.50

Utah

18.50

22.50

22.90

Vermont

20.90

25.30

25.80

Virginia

23.00

26.60

27.10

Washington

20.10

24.60

24.80

Wisconsin

19.80

23.50

24.10

United States

19.60

23.30

23.70

Source: USDA

 

 

 

* Preliminary

 

 

 

 

Milk prices push August milk-feed price ratio higher

While milk prices improved, major dairy feedstuff costs declined in August, improving dairy producer income margins to their highest level since March.

The preliminary August 2014 milk-feed price ratio was estimated at 2.55, up from July’s revised estimate of 2.36, and well above the 1.68 ratio in August 2013.

The index is based on the current milk price in relationship to feed prices for a ration of 51% corn, 8% soybeans and 41% alfalfa hay.

The August 2014 U.S. average all-milk price was $23.70/cwt., compared to $23.30/cwt. in July 2014 and $19.60/cwt. in August 2013. 

August corn, at $3.70/bushel, was down 35¢ from July and $2.51 less than August 2013.

August 2014 soybeans averaged $12.20/bushel, down 90¢ from July and $1.90 less than August 2013.

Alfalfa hay averaged $209/ton in August, down $7 from July 2014, but still $10 more than August 2013.

 

Milk-feed price ratio*

 

 

 

August 2013

July 2014

August 2014

Milk ($/cwt.)

19.60

23.30

23.70

Corn ($/bu.)

6.21

4.05

3.70

Soybeans ($/bu.)

14.10

13.10

12.20

Alfalfa hay ($/ton)

199

216

209

Milk-feed ratio    

1.68

2.36

2.550

Source: USDA Ag Prices report

 

* The price of commercial prepared dairy feed is

based on current United States prices received for

corn, soybeans, and alfalfa hay. The modeled feed

ration uses 51% corn, 41% alfalfa hay and 8% soybeans

 

July milk COP up slightly

One other monthly USDA report – this one looking back to July – provides another look at the cost side of the dairy equation. The preliminary monthly total average dairy feed costs increased slightly in July, pushing total milk production costs to their highest average since November 2013, according to USDA’s monthly Milk Cost of Production report. However, feed and total production costs remain well below those of a year ago.

USDA cost estimates are based on total farm costs per hundredweight of milk sold.

Total feed costs averaged $13.56/cwt., up 20¢/cwt. from revised June 2014 estimates, but $3.64/cwt. less than July 2013

 July purchased feed costs, at $6.91/cwt., were up 10¢ from June, but $3.46 less than July 2013.

July 2014 homegrown feed cost were also up 10¢/cwt. from June, to $6.48/cwt., but 18¢ less than July 2013.

Feed represented about 54% of total costs in July 2014. Other than feed, there were minimal changes in other operating and allocated overhead costs compared to previous months. Cost centers seeing the largest increases were in labor, opportunity costs on unpaid labor, and capital recovery of machinery and equipment.

Total costs, at $25.21/cwt. in July 2014, were up 46¢ from June, but $3.83/cwt. less than July 2013’s average of $29.04/cwt.

 

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

 

 

Item

January

February

March

April

May

June

July

Feed costs

13.26

13.25

13.04

13.23

13.48

13.35

13.56

Operating costs/1

16.46

16.41

16.14

16.32

16.57

16.51

16.77

Allocated overhead/2

8.43

8.28

8.21

8.15

8.15

8.24

8.44

Total costs

24.89

24.70

24.35

24.47

24.72

24.75

25.21

1/ includes feed; 2/ includes labor

 

 

 

 

 

Source: USDA Economic Research Service

 

 

 

 

 

 

 



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