In your September 10, 2021 issue . . .
“FUTURES MARKETS SEEM TO BE NERVOUS about the long run and our milk checks are living in the present,” wrote Mark Stephenson in Milk Check Outlook on the next page. That’s because most farmers, processors, and forecasters can’t see around the COVID-19 market corner.
AT THE MAGAZINE’S CLOSE, CLASS III contracts for the first six months of the new year traded in an ever-so-tight window from $17.15 to $17.42 to yield a $17.30 average. Class IV had a slightly wider range of $16.56 to $16.98 to yield a $16.80 net for January to June 2022.
AS FOR THE REMAINDER OF THE CURRENT YEAR, Class III contracts ranged from $16.90 to $17.25 for a $17.30 average. Class IV had an equally narrow footprint, from $16.10 to $16.50, for a $16.25 average.
NEGATIVE PRODUCER PRICE DIFFERENTIALS (PPDs) finally began to evaporate as markets returned to more traditional prepandemic pricing patterns. That resulted in positive PPDs in July milk checks from coast-to-coast. The Northeast Order posted the highest PPD at $1.57 per cwt., and the lowest was a positive 25 cents in the Upper Midwest.
DAIRY WILL RECEIVE $350 MILLION via USDA’s Pandemic Market Volatility Assistance Program. The program will reimburse dairy farmers for 80% of the revenue difference per month based on annual production of up to 5 million pounds of milk marketed and on fluid sales from July through December 2020, reported USDA on August 19.
THE FLORIDA, APPALACHIAN, AND SOUTHEAST ORDERS will receive the highest payouts, ranging from a projected $1.12 to $1.42, due to large Class I sales. The remaining eight orders would see 9 to 50 cents per cwt., with the Upper Midwest on the low end.
SNAP RECIPIENTS WILL RECEIVE A 25% BUMP in food assistance support. In all, 42 million Americans receive Supplemental Nutrition Assistance Program (SNAP) benefits, with half of that total being children. The adjustment could yield $2 billion more for dairy. Read more on page 492.
THE CANADIAN HEIFER INVENTORY (1 year and older) was 445,500 in July, up 1% when compared to 2020 and up 1.5% from five years ago.
THERE WERE 4.1 MILLION HEIFERS in the U.S. (over 500 pounds) this July, up 2.5% from last year, but down 2.3% from five years ago.
THE SLIDE IN FLUID MILK SALES RETURNED as Americans grew tired of COVID-19 precautions. Those sales are shown in the graph below.