As printed in our August 25, 2013 issue...
GRAIN MARKETS CONTINUE TO SOFTEN as corn was down over 40 percent from last August's record highs; soybeans were down 20 percent. Futures prices for corn ranged from $4.50 to $4.70 per bushel for December-to-May contracts with beans from $11.80 to $12.20.
WHILE PRICES HAVE LOOKED GOOD FOR BUYERS, most positive crop-related news has been accounted for in recent trading activity, stated a number of ag economists. A good fall will be needed to gather the harvest which has benefitted from timely rainfalls and moderate temperatures.
AS FEED PRICES MODERATE, SO DO MILK FUTURES. Since early July trading, September-to-February Class III contracts dropped nearly 85 cents with a September top near $18 and a February low at $16.35.
BACTERIAL CONTAMINATION FUELED a dairy product recall by New Zealand's Fonterra Cooperative in early August. Initially causing global concern, the potential botulism contamination was isolated to three product runs that yielded 42 tons of whey protein concentrate 80 (WPC 80).
CHINA WAS AMONG THE MAJOR WPC 80 IMPORTERS, an ingredient for infant formulas. Fonterra's CEO, Theo Spierings, flew to Beijing to address concerns and shore up support for its $9 billion dairy export market. To date, there have not been any reported illnesses.
CONCERNS QUICKLY SUBSIDED as product prices fell only 2.4 percent at New Zealand's Global Dairy Trade four days after the product recall.
THE U.S. EXPORTED 14.7 PERCENT of its dairy solids in the first half of 2013; that's up 0.8 percent from last year's 13.5 percent. In June, America exported 16.5 percent of its milk solids while it imported just 2.8 percent.
BY SWITCHING INSURANCE COMMITMENT from a one-time decision during the five-year run of the farm bill to an annual choice, there could be serious potential for more government outlays, stated Iowa State economist Bruce Babcock in a review of the Dairy Security Act.
NESTLE USA MOVED PAST DEAN FOODS as the nation's largest processor, reported Dairy Foods. Dean had held the top spot for at least 10 of the last 20 years. Land O'Lakes was the only co-op among the top seven.
IMPORTS OF MILK PROTEIN ISOLATES into Canada have quadrupled since 2008. Now valued at $113 million, its supply management rules have been unable to stop the flow, reported Toronto's The Globe and Mail.
BRIEFLY: Potash prices could soften as a Russian company announced it would break away from a supply control consortium. Fluid milk plant numbers held at 311 nationally for the second straight year. MILC payments will expire at the end of August as its legislative provision sunsets.