Milk Prices
The bears drove the market Wednesday as we saw most commodities move lower.
Global Dairy Trade event 304 concluded on Tuesday with the overall price index down 0.9%.
April milk jumped 39 cents to $23.39 per cwt. May milk finished 43 cents higher to $23.50 per cwt.
Strong global demand for dairy continues to push cheese and butter prices to fresh highs.
Each supply regions faces a basket of production challenges.
Cheddar stole the show, settling nearly 11% higher to an all-time high average price of $2.96 per lb.
Class III milk closed with a strong session as futures months were up 5 to 27 cents.
USDA’s Milk Production report illustrated year-over-year declines in both January milk production and cow numbers. Although South Dakota hummed a different tune, leading year-over-year milk volume growth, up 18.3%.
Iowa State Dairy Association knows its farmers could use some help. Efforts are well underway to push legislation that would create free dollars to help its dairy producers automate various aspects of their 24/7 work.
As one of the only export regions with growing milk output, South American dairy exporters face a time-limited opportunity.
With current milk prices where they are and the optimism prevalent in the market, there have been comparisons made to 2014 when we experienced the highest milk prices on record with the All-milk price averaging $23.98.
July and August 2022 led market strength adding 13 cents/cwt each.
Today’s Global Dairy Trade event 302 concluded with the GDT Price Index 4.2% higher.
While 2022 offers a sigh of relief with higher milk prices, input costs are still considerably higher than the last time producers saw $20 plus prices. Experts emphasize understanding your costs to capitalize on margins.
Producers can expect to see an increase in whole cottonseed supply this year. According to the USDA’s December cotton and wool outlet report, production is estimated at a 25% increase from the 2020 crop year.
With milk, beef, and input prices rising, the decision to cull or not becomes cloudy.
Milk rallied Wednesday despite a lackluster CME spot trade.
Enrollment for the Dairy Margin Coverage and Supplemental Dairy Margin Coverage programs has been extended to March 25, 2022. The enrollment for 2022 DMC is currently at 48% of the 2021 program year enrollment.
Comparisons are being made to 2014, but there are many differences that will impact both milk prices and farm profitability.
Cheese finds a bid and butter continued its slide in a mixed day in the dairy trade.
Labor shortages are all-to-common and dairy farms across the U.S. have been feeling the pinch. Roger Herrera understands all too well the constant labor headache, but he is committed to become the employer of choice.
The USDA’s Ag Prices reported that there will be no Dairy Margin Coverage (DMC) payments for December milk. The Income Over Feed Costs calculated to be $9.53/cwt., $0.03 above the maximum coverage level of $9.50.
New York ranks fourth in the nation for milk production. If the recent state board recommendations are approved by the state labor commissioner, New York will also rank in phasing in a 40-hour overtime threshold.
Opening a milk check that surpasses $20, a price not seen since 2014, gives producers reasons to cheer. However, most producers wonder if this is all too good to be true and how long will the good times roll.
Butter continues to be a big story in dairy right now, with prices hitting their highest since 2015.
The past few months have shown incredible volatility for both cash and futures. Buyers were intent on making sure they had sufficient supply on hand in the event milk supplies and dairy product supplies would tighten.
Can you imagine what the industry will look like in the next 50 years?
Spot butter climbed to $2.9350, the highest price since September 2015 with an impressive volume of 18 trades taking place in the CME Spot Dairy Auction.
James Weber returned home to his family’s vacant farm and began milking 130 Jersey cows in 2014. With a focus on sustainability, the young dairy farmer has been able to thrive in an industry that is anything but easy.
The most profitable parts of the U.S. in 2022 will be the Northwest and Northeast, but smaller farms in those regions won’t participate in this success. Here’s why.