AT A $16 AVERAGE, remaining 2016 Class III futures retreated $1.50 per hundredweight from mid-February to final March trading activity. Contracts ranged from $15.05 for April to $16.71 for September.
THE DROP HAS BEEN SO DRAMATIC that Rabobank changed its forecast from “slightly profitable” to “little-to-no profit” for U.S. dairy producers.
THE CHANGED VIEW STEMS from milk flow. “We thought prices would just pull through production growth,” said Rabobank’s Tom Bailey. “Now there will be little-to-no profit for U.S. producers, and that likely will trigger a much needed slowing of milk supply in coming months.”
MILK PRODUCTION SWELLED 2.3 PERCENT in February after adjusting totals for leap year. The Pacific Coast reported less milk with California down 2 percent; Washington, -2.3; and Oregon, -2.4.
A YEAR AFTER SUPERSTORM GOLIATH, Texas milk climbed 16.3 percent, while New Mexico jumped 11.6 percent. Kansas followed suit, up 7.5 percent; Colorado, 7; Michigan, 4.8; and Iowa and South Dakota, 4.6.
THE U.S. ENJOYED MILK PRICES well above those from other leading dairy exporters just one year ago. In March 2016, U.S. prices netted $15.30; the European Union (EU) $14.32; and New Zealand $10.15. DFA CEO Rick Smith reported that March 2017 pay prices put America in third: New Zealand, $16.46; the EU, $16.07; and U.S. $15.26.
THERE WAS PLENTY OF “CHEAP MILK” looking for a home. “Even with spot milk as low as $5 under Class III, cheesemakers are turning away offers as contractual milk supplies are meeting production needs,” wrote USDA economists about the Midwest. The same prevails in the East.
BEEF FUTURES CLIMBED AS SCANDAL rattled Brazil meat markets. China, South Korea, the EU, Egypt, and Chile all took steps to suspend imports from the world’s second-largest beef producer after a police sting determined sanitary officials were bribed for health certificates.
ONE DAY AFTER THAT NEWS BROKE, cattle futures rose to $1.199 per pound at the CME, climbing to the highest level since one year ago. Prices for dairy steers and bull calves continued to lag behind.
USDA BUDGETS COULD BE DOWNSIZED 21 PERCENT if Congress follows the 2018 fiscal plan presented by President Trump. Those cuts would be on top of $100 billion trimmed following the 2014 Farm Bill.
THE ENVIRONMENTAL PROTECTION AGENCY (EPA) could face a 31 percent budget reduction; the State Department, 29 percent; and Labor, 21 percent. Defense could climb 10 percent; Homeland Security, 7 percent; and Veteran Affairs, 6 percent. Congress still needs to act.
In your next issue!
WHAT WILL DAIRY COWS AND FARMS LOOK LIKE IN 50 YEARS?
In the future, cows could produce between 37,000 and 78,000 pounds of milk per year. Most projections indicate an average of 57,500 pounds.
TWO POPULAR MAGAZINE FEATURES —
The Hoard’s Dairyman Cow Judging Contest official placings and scoring key along with the Hoard’s Dairyman Bull List — will both be in the next issue.
KICK-START UDDER DEVELOPMENT IN CALFHOOD.
A higher plane of nutrition impacts the mammary gland in more ways than one.
