In your March 10, 2020 issue . . .
THE 2020 OUTLOOK FOR DAIRY is expected to be the best economically since 2014 with the annual milk price average to be slightly above 2019, predicted Bill Brooks, an independent dairy economist.
INCOME OVER FEED COSTS could be $10.44 per hundredweight, which would be 16 cents higher than 2019. Based on CME future contracts for the remainder of the year, that number could be as high as $10.96.
THE CORONAVIRUS COULD SLOW DAIRY DEMAND, predicted Nate Donnay with INTL FCStone. Based on plugging in different consumption declines for China in the first half of 2020, the price impact could be 4% to 9% with a larger up-front reduction early in the year.
NEW ZEALAND’S GLOBAL DAIRY TRADE slid 2.9% during mid-February trading. Some analysts had predicted a steeper price reduction as the world’s largest dairy product importer, China, continues to battle a coronavirus that has limited travel and factory output.
MARCH TO JUNE CLASS III FUTURE CONTRACTS slid 50 cents during February 17 to 21 trading to settle at $16.70. A 20-cent drop occurred for July to December contracts, netting a $17.40 midpoint.
STRONG DOMESTIC CONSUMPTION has hinged on a solid U.S. economy. At 3.6%, January’s unemployment rate continued to trend toward a 50-year low. Also, the share of Americans ages 25 to 54 (in the their prime working years who are employed or seeking jobs) reached pre-Great Recession levels, reported the U.S. Department of Labor.
CHEESE PRODUCTION POSTED A NEW RECORD, reaching 13.1 billion pounds. While the cheese category climbed 0.7% as a whole, Cheddar output fell 2.1% and Mozzarella jumped 3.2% to reach 4.49 billion pounds.
BUTTER KEPT BOOMING with national production reaching a record 1.91 billion pounds in 2019. That total was up 0.8% over the previous year.
PRODUCTION MET CONSUMPTION as American cheese, other cheese, butter, and milk powder all reached record output last year. It was the third straight year that American cheese topped 5 billion pounds; the second year other cheese topped 8 billion pounds. Dry whey and whey protein concentrate sales were off slightly.
MEXICO EASILY HELD the most favored nation status when it came to purchasing U.S. dairy products. In 2019, the country collectively imported $1.53 billion, or 25%, of all U.S. global dairy exports.
NEXT CAME SOUTHEAST ASIA at $930 million (15.4%); Canada, $806 million (13.4%); China, $375 million (6.2%); South America, $368 million (6.1%); South Korea, $335 million (5.5%); and Japan, $283 million (4.7%). While China was off 25%, all other partners expanded purchases.
“WE PLAN TO APPROVE THE NEW NAFTA (USMCA) real soon while respecting our democracy institution,” said Marie-Claude Bibeau, Canada’s agriculture minister, at the 96th USDA Agricultural Outlook Forum.
DAIRY FARMERS OF AMERICA reached an agreement to acquire 44 of Dean’s facilities and its associated direct-store delivery system, along with various liabilities, for $425 million. The deal remains subject to approval from the bankruptcy court and the U.S. Department of Justice.
In your next issue . . .
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