DHM Numbers: September Class I base slightly lower

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September FMMO Class I base price down slightly

The September 2014 federal order milk marketing order Class I base milk price is $23.63/cwt., down 24¢ from August 2014, but still $4.47 more than September 2013.

Through the first nine months of 2014, the Class I base average is $23.18/cwt., up $4.71 from the $18.48/cwt. average for January-September 2013.

 

Weekly National Dairy Product Sales report

Week ending Aug. 20, 2014

 

 

 

 

Change from

 

Ave. price

previous week

 

($/lb.)

(¢/lb.)

Butter

2.41

-5.3

Cheddar blocks

2.04

2.4

Cheddar barrels

2.12

7.3

Dry whey

0.688

-0.9

NFDM

1.81

2.0

Source: USDA Ag Marketing Service

 

 

Weekly average California NFDM prices

Week ending

Avg. price ($/ lb.)

7-day sales (lb.)

Aug. 15

1.7551

14,436,743

Aug. 8

1.7786

9,678,144

Aug. 1

1.8438

11,247,293

July 25

1.7887

13,973,399

July 18

1.8109

11,116,613

Source: CDFA

 

 

 

Weekly ethanol production, corn use

Ethanol production data for the week ending Aug. 15:

Ethanol production: 39.4 million gallons/day. The four-week average for ethanol production calculates to an annualized rate of 14.3 billion gallons.

Corn used: 14.2 million bushels/day

DIstillers grains production: 92,596 metric tons/day

Source: Renewable Fuels Association

 

Rice Dairy: Dairy report highlights

Highlights from July’s USDA Milk Production report, from Jerry Dryer, Chief Market Analyst with Rice Dairy, LLC:

It looks as though the long-awaited milk production response to higher prices arrived in July; output was up 3.9% compared to July 2013. The last time we saw numbers like this, milk production was up 4.2% during 1Q 2012. A repeat performance is probably emerging.

The growth in cow numbers slowed, but production per cow accelerated. Cow numbers only increased by 5,000 head during July, after increasing, on average, 15,000 head each month in 2Q of 2014. The July increase has cow numbers up 37,000 (0.4%) year-over-year, and up 50,000 cows vs. two years ago.

Production per cow jumped 3.5% (more than two lbs. per day) compared to a year earlier. Ideal weather, lower feed prices and improving ration quality all contributed to the gain.

The handwriting on the wall is darn bearish, but the markets didn’t budge during July while all of this was happening. More milk and downward pressure on prices is here, but inventories need rebuilding, and holiday appetites need satisfying.

 

HighGround: The wall of milk has arrived

Highlights from July’s USDA Milk Production report, from Eric Meyer, president of HighGround Dairy Division:

Extremely high milk prices during 2014 and declining feed costs are generating income-over-feed margins not seen by the U.S. dairy farmers since 2007. But during the first half of this year, milk production growth has been muted, as it has taken time for the nation’s dairymen to recover from a challenging past five years, and “getting whole” took higher precedent over producing more milk.  Until now!

In HighGround’s view, year-over-year U.S. milk production growth in July came in very bearish versus expectations. USDA’s data clearly shows that strong margins have (and will continue to) build up the U.S. milking herd, and has also led to high quality feeding practices.

Year-over-year production growth was the strongest since March 2012 (27 months), and it’s the most milk cows in the U.S. herd since April 2012 (26 months).

We were blown away by the milk-per-cow  (MPC) percentage increases across the country. Of the top 10 producing states, Michigan led the way with 5.5% MPC growth, but Wisconsin and New York showed very positive momentum as well (+3.6% and +4.0%, respectively). Most surprising in this report was drought-ridden California posting a 4.5% increase in MPC from last July.

HighGround anticipates the nation’s dairy farmers will continue to grow the dairy herd through at least the remainder of 2014, if not deep into next year, and well-above average production growth will likely be the norm over the next six to nine months. The “wall” of milk that has been expected for a while has finally arrived.

However, no one should expect U.S. milk prices to plummet immediately. There is still strong demand in this country for cheese and butter, and this will likely keep prices at elevated levels for the next 2-3 months.



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