Issue 5 2013 - Progressive Dairyman Magazine

MARKET WATCH CHEESE AT LOWEST PRICE SINCE JUNE 2012DAIRY PRICES$25$23$21$19$17$15$13Apr2010Fluid milk prices (in dollars)Mar. 2013: $17.80 High: $21.78 Low: $13.22Mar. 2013: $19.60 High: $23.84 Low: $14.64CA Class1 priceMay June July Aug Sept Oct Nov Dec Jan2011Federal Class I priceFeb Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar20122013Katie KrupaDirector of Producer ServicesRice Dairyklk@ricedairy.comAs we slog through the endof winter a little weary and readyfor the break of some warm springdays, the dairy markets also seemto feel the effects of winter. Sincethe beginning of the year, themarkets have experienced some mildvolatility, but ultimately we haven’tseen the market change direction orchange price too drastically. Whilethe Class III futures price for Marchis currently trading below $17,the March price has been tradingroughly in the range of $16.90 to$17.50 for the past five weeks. As itlooks now, the March price will bethe lowest of the first quarter, and ifthe market were to settle at the timeof this writing, the average would bearound $17.40.Looking out to the rest of theyear, the futures prices are tradinghigher than the first-quarterprices, but many are wondering ifthose increases will be realized.The April-to-December Class IIIfutures average is currently below$18, but just a couple weeks ago thisaverage was nearly $18.40, whichhas many producers worried thatthe slide will continue. While thedeclines aren’t the worst we’ve everseen, dairy producers are takingnotice because higher feed costs andlimited availability will mean manyproducers will be working with tightmargins (if any) until milk pricesincrease and/or feed prices decreaseif we have good weather this plantingseason.Many producers are strugglingto make the current prices profitable,especially producers with higherfeed costs and those out West whotypically receive a lower price fortheir milk. There continues to bea large disparity in profitabilitybetween producers in the Westand Southwest, who are strugglingto break even, and producersthroughout much of the remainderof the country, who had a decent yearin 2012 and so far a couple decent(not great) months of 2013.Total U.S. milk production keepsmoving higher, and although thisJanuary’s gains were modest (up0.5), the increase comes on top ofthe 2012 year-over-year increase of3.8 percent. That puts the January2013 production 4.3 percent higherthan 2011. In addition to production,storage numbers are increasing too.Butter stocks are up 21 percent, andtotal cheese is up 1 percent from lastyear. But the interesting thing is thatwhile the U.S. dairy industry is in aslump, the international market isdoing very well.Oceania dairy prices continue tomove higher according to the USDA’s16 Progressive Dairyman Issue 5 • March 21, 2013

«BUTTER PRICE REMAINS STEADY$23Class III (in dollars)$21 Futures2013$19$17$15$13Mar20112014Feb. 2013: $17.25High: $21.67 Low: $15.23Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb201220132015Bunker Shaversby Royer Enterprises« Front-endloader model$6,000Skidsteermodel$3,800Feed High-Quality Silage from your bunker with our machines«$2.50$2.25$2.00$1.75$1.50$1.25$2.25$2.05$1.85$1.65$1.453/10/123/10/12Butter (weekly average in dollars)201120114/7/124/7/125/5/12After bottoming out at $1.45 earlier in year, thebutter price moved up to $1.605 in the middleof February. Although the price has backeddown from the $1.60s and moved into the high$1.50s, the butter price seems comfortable atthese higher levels.5/5/12The spot cheese price experienced a littlebounce in mid-February as the Block-Barrelaverage moved up to nearly $1.66, butunfortunately the price increase was shortlived.By the end of February, the averagespot cheese price was down to roughly $1.55,which is the lowest price since June 2012.6/2/12Mar. 2, 2013: $1.60High: $2.15Low: $1.476/2/127/7/127/7/128/4/128/4/129/1/129/1/12Mar. 2, 2013: $1.56 High: $2.16 Low: $1.31$1.62$1.60$1.58$1.56$1.54$1.52Cheese (weekly average in dollars)$1.65$1.60$1.55$1.5010/6/1210/6/122/12/132/12/132/13/132/13/132/14/1311/3/122/14/1311/3/122/18/132/18/132/19/132/19/132/20/1312/1/122/20/1312/1/122/21/132/21/132/22/132/22/132/25/132/25/1320121/5/132/26/1320121/5/132/26/132/27/132/27/132/28/132/2/132/28/132/2/133/1/133/1/133/4/133/4/133/2/133/5/133/2/133/5/13Telehandler$4,800(574) 361-3343Promote feed quality and preventdry matter loss on your bunkersilo, silage pit or drive-over pile!Can be made to fit telehandlers,front-end loaders and skidloaders.See them in action atwww.bunkershavers.comGood animal health starts with the optimalfunctioning of the gastro-intestinal tract,the immune system and a well-balancedgut flora. Nutriad has developed a rangeof extensively researched ruminantproducts that strengthen your cows fromthe inside out. Our four product programs- Performance Enhancement, Health &Well-being, Feed & Food Safety andPalatability - contain options that allowour ruminant experts to provide anintegrated solution for every stage ofyour animal’s lifecycle.Rise and shine with Nutriad!800.841.3320 www.nutriad.com$1.8$1.7$1.6$1.5$1.4$1.32011$1.2Mar2012Feb. 2013: $1.63High: $1.75 Low: $1.21Non-fat dry milkApr May June July Aug Sept Oct Nov Dec Jan Feb20132012Dairy Market News, and WesternEuropean prices are still high,although they have moved slightlylower in recent weeks.The Oceania cheddar cheeseprice is $1.8375, Oceania butter is$1.66 per lb and the European priceis $1.94. In addition to cheese andbutter, powder prices continue totrade at strong prices compared todomestic prices.So although the U.S. seems to bein a little slump, and the upcomingspring flush may only add to thesluggish market, the internationalmarket seems to be a beacon ofhope. The general thought is thatprices will continue to chug alongfor the next couple months, but aswe get to the early summer months,the bounce we are seeing in theinternational market will hit theU.S. and prices will rise. Obviously,all this remains to be seen, but astrong world economy and goodinternational markets has alwaysbeen favorable to the domestic dairyindustry. PDIssue 5 • March 21, 2013 Progressive Dairyman 17