In your January 10 issue . . .
CLASS III FUTURES PRICES SOFTENED in December trading as January-to-June 2023 contracts slid from a $20 average to $19.10 per hundredweight (cwt.) in a trading closing prior to Christmas. July-to-November 2023 contracts netted a $20.15 average on the CME.
CLASS IV HELD STEADY near a $19.95 average for the first six months of the year during the same time span. The butter and powder futures contracts moved higher to a $20.60 net for the final five months of 2023.
AT A $22.70 ALL-MILK PRICE, USDA economists held rather firm on their projections for the new year. A $19.80 Class III price and $20.10 Class IV were the foundation for their forecast in the latest edition of the World Agricultural and Supply Demands Estimates.
MARKETS HAVE BEEN SOMEWHAT UNSETTLED at New Zealand’s Global Dairy Trade as the six-product bundle of dairy products were down 3.8% in late December. Overall, the GDT has been down four of the last six sessions in bimonthly activity dating back to October 4.
AFTER SIX STRAIGHT MONTHS OF DECLINE, U.S. milk production posted the fifth straight month of positive traction by growing 1.3%. The Midwest, paced by Iowa, Michigan, Minnesota, South Dakota, and Wisconsin, led new milk growth. California was down 0.5%.
ON THE COMMODITY FRONT, SOYBEANS moved lower as timely rains fell on South America’s bean crop. Also, concerns about a potential recession weighed on markets during recent trading activity.
DAIRY FARMERS HAVE UNTIL JANUARY 31 to sign up for the Dairy Margin Coverage (DMC) program. USDA extended the sign-up deadline.
INFLATION. INTEREST RATES. RECESSION. Those are among the elements that business and government leaders are trying to balance to keep the economy moving forward. In November, the CPI, which helps measure inflation, rose by the smallest number since December 2021.
EVEN THOUGH INFLATION EASED for a one-month window, the U.S. economy will close the year with the highest inflation levels in four decades as the 12-month inflation figure stood at 7.1%.
TO COMBAT INFLATION, THE FEDERAL RESERVE raised interest rates for the seventh straight time this year. The federal funds rate ranged from 4.25% to 4.5% — the highest levels in 15 years. The aforementioned rate hikes also were the steepest moves since the early 1980s.
DESPITE RELATIVELY HIGH RETAIL PRICES, dairy product sales continued to show growth both at home and abroad. Domestically, American cheese sales grew 4% and Italian and other style cheeses grew 1%.
U.S. DAIRY EXPORTS CONTINUED AT A BRISK PACE. On a milk solids basis, dairy product exports to international customers rose 9% in October and were up 4% through the first 10 months of the year.
ON A VALUE BASIS, EXPORTS CLIMBED A WHOPPING 24% to reach $819 million in sales in October. During the first 10 months of the year, total dairy product sales reached $8.08 billion, and that total is already a new annual record for the collective U.S. dairy industry.
DAIRY POSTED A NEW SAFETY RECORD. Only 424 milk samples, from a total of nearly 3.9 million, tested positive for animal drug residue. That ratio of negative samples set a new industry record at 99.998%. In rare cases where a load tests positive for antibiotics, the entire load is rejected for human consumption and does not enter the food chain.
AT LEAST LOCK IN FERTILIZER SUPPLIES for the new year. “What I’m hearing from some suppliers on the ground is even if you’re not going to lock in a price, they’re looking for you to lock in tonnage,” said Cornell’s Joe Lawrence, noting that firm orders may become a must-do.