In your September 25, 2018 issue
WITH A $16.40 AVERAGE for the final three months of 2018, Class III milk futures have been trading near contract highs. January to August 2019 averaged near $16.10 per cwt. at the magazine’s close.
FOR THE WORLD’S LEADING DAIRY EXPORTER, price projections were revised upward to $7 per kilogram of milk solids. While exchange rates cause that price to fluctuate, that’s roughly $16.25 to $16.50 per hundredweight projection for 2018 to 2019 milk prices in New Zealand.
EVEN WITH HIGHER FORECASTS, prices at the Global Dairy Trade have been sluggish as the early September trading session was off 0.7 percent for a basket of nine products. That marks three straight months that prices either were unchanged or lower at the global dairy product auction.
A BRIGHTER OUTLOOK ASIDE, the road to financial recovery remains a challenge for farmers. In addition to low milk prices, heifer values remain at bargain levels, robust slaughter volumes have pushed down prices, and herd dispersals continue at a higher-than-normal pace.
MPP-DAIRY ISSUED PAYMENTS for six straight months given July’s $6.72 per cwt. margin above feed costs. Of course, farms would have had to buy up coverage over the $6.50 margin protection level to obtain payments in USDA’s signature dairy price protection program.
JULY DAIRY EXPORTS SLOWED when compared to the impressive volumes earlier in the year. Overall, volume climbed 11 percent compared to the same month last year while value inched up 3 percent.
MEXICAN CHEESE IMPORTS FLOUNDERED after sliding 0.6 percent when compared to last July. Just one month earlier, cheese sales to America’s leading dairy product customer were up 43.2 percent. Some sales were made in advance of announced tariffs by Mexico.
A RENEGOTIATED NAFTA AGREEMENT would again normalize dairy trade between the U.S. and Mexico. The trade partners made a handshake agreement on a new deal after five weeks of negotiations without Canada. The final step would be onboarding that country.
DAIRY CONTINUES TO BE A STICKING POINT in completing a deal between the U.S. and Canada. “Even duty-free entry to 5 percent of the dairy market would result in imports equal to the output of more than 500 Canadian farms,” said Sylvain Charlebois, a professor at Dalhousie University, in comments given during a National Post interview.
DESPITE AGREEMENT THAT CONDITIONS ARE DIRE, broad consensus remained a challenge on potential remedies at an Albany, N.Y., dairy meeting. Of the 300 or so attendees, about 50 percent were supportive of supply controls that mimicked Canada’s supply management system.
In your next issue!
THE FLUID MILK BUSINESS IS FLUID.
Even though fluid milk companies have mirrored consolidation on the farm level, some indications suggest milk sales may be stabilizing due to product innovation.
HOW REAL FARMS ARE RAISING CALVES.
This survey identified calf housing styles and feeding protocols on Wisconsin dairy farms.
BENCHMARKING EXPLAINS HOW SOME TURN A PROFIT.
Feed costs were 49 cents lower per cwt., while labor costs were 51 cents below average among the top 25 percent of dairy farms.