Mild weather across U.S. helping raise milk production
THE LAND, FEBRUARY 17, 2012
MIELKE, from pg. 13B warned that “the traditional spring peak in daily milk production is one to four months early across most of the U.S.” He speculated whether there would be even more to come “as warmer weather and longer days push their way north to the milk-sheds across the upper tier of states” and posed the question: “Will there be enough plant capacity for all of the milk by March, April and May.” Sev-
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■ Meanwhile, Oceania skim milk powder prices have held mostly steady since October. “Traders and handlers indicate that powder stocks are sufficient to fulfill commitments with minimal volumes remaining as uncommitted,” according to the Dairy Market News. Mild winter weather across much of the country is helping to increase milk production and thus more milk is finding its way to cheese vats, according to the DMN. Inventories are building as sales are reported as slow since the start of the new year. In most regions, the winter season has been much less stressful on the herd and increasing milk receipts at processing plants are being reported. Except for Florida, milk volumes coastto-coast are building to the point that milk is not moving from one region to another to supplement shortages. Milk volumes are increasing, but processing capacity is generally sufficient within close proximity of production at this time, according to the USDA. Cream markets are weak and pricing multiples are easing. Cream volumes are heavy and often clearing from one region to another to find processing. Producers of higher-class cream product items are seeing declines in orders after a recent boost from footballrelated interest, thus more cream is available to churns coast to coast. The Oceania milk production season continues to trend lower. New Zealand weather patterns are favorable for production at this time of the annual cycle and handlers continue to project a 3 to 4 percent annual increase over last season, with some handlers adjusting their estimates to a 4 percent-plus increase. Fluctuating weather in Australia is not having an overall negative impact on milk output. Producers and handlers indicate volumes are lower but maintaining levels that are often higher than projected. Producers project a 2- to 3-percent annual increase when the current fiscal year ends in June. ■ Back on the home front, the USDA raised its 2012 milk production forecast in this week’s World Agricultural MN TRUCK & TRACTOR Supply and Demand Estimates Report Mankato, MN • 507-388-4599 after lowering it slightly a month ago. LODERMEIER’S CENTRAL MN EQUIP. Look for output to hit 199 billion Goodhue, MN • 651-923-4441 Lake Henry, MN • 370-243-7411 pounds, up 500 million pounds from last month’s projection. NORTHLAND FARM SYSTEMS SE SKID LOADER Milk cow numbers were raised for Owatonna, MN • 507-451-3131 St. Charles, MN • 507-932-4560 much of the year as the USDA’s Cattle eral people he spoke with are concerned, he reported. Zeroing in on nonfat dry milk, the Chicago Mercantile Exchange’s Daily Dairy Report says U.S. NFDM prices have dropped steadily the last seven months, falling 25 to 30 cents from the July 2011 peak. Buyers are often waiting for prices to stabilize before ordering too far out, according to the DDR, and inventories are building.
Report indicated 1 percent more dairy cows on Jan. 1. However, producers are holding 1 percent fewer heifers for addition to the dairy herd, which is expected to push cow numbers lower later in the year. Milk per cow forecasts were raised as data for the last quarter of 2011 was higher than expected and mild weather in much of the country is supporting increased early year yields. Output for 2011 was put at 196.2 billion, up 200 million pounds from last month’s projection and compares to 2010’s 192.8 billion. With higher forecast 2012 production, cheese and butter prices were lowered. The NDM price was lowered to reflect slightly weaker early year prices. With stronger forecast demand for whey, the whey price forecast was raised. The lower cheese price is expected to more than offset the higher whey price, resulting in a reduced forecast Class III price. Look for the 2012 Class III average to range $16.70 to $17.40 per hundredweight, down from the $17.10 to $17.90 expected a month ago, and compares to $18.37 in 2011 and $14.41 in 2010. Lower butter and NDM prices result in a lower Class IV price, now projected to average $16.25 to $17.05, down from $16.45 to $17.35 expected in the last report, and compares to $19.04 in 2011 and $15.09 in 2010. ■ The WASDE report was the topic of Dairy Profit Weekly editor, Dave Natzke, in his Friday DairyLine update. He reported on the weakening cheese, butter and milk powder prices and the rising futures prices for corn and soybeans. He gave as an example, Feb. 8 annual average 2012 Class III milk futures contracts traded 85 cents/cwt. below the average on Jan. 5, with prices for February through March down nearly $2/cwt. compared to a month ago. He reported that the WASDE indicates the trend could continue and cited the rising milk production data and lowered milk price projections detailed above and warned that, “if lower milk prices aren’t enough incentive for dairy farmers to reduce milk production, higher feed costs might be.” The USDA forecasts the season-average corn price to be 60 cents to $1.40 per bushel higher than the year before, and soybean prices up to $1/bu. higher. Higher beef prices might be an incentive to more culling, Natzke said. LatSee MIELKE, pg. 15B