In your January 25 issue . . .
FUTURES CONTINUED TO SOFTEN with January-to-June Class III contracts falling from a $20 average in early December to $18.60 by January 5. The same six-month Class IV bundle slid from $19.95 to $19.30.
WHILE NEW ZEALAND’S GLOBAL DAIRY TRADE (GDT) is a better metric of prices in the Southern Hemisphere, it’s also an indicator for future dairy prices as the island nation is the world’s largest dairy product exporter. To that end, the GDT has been down five of the last seven sessions in bimonthly trading activity dating back to October 4.
COMMODITY MARKETS, ESPECIALLY GRAIN, remain in flux largely due to Russia’s invasion of Ukraine. Soybeans reached record prices in early 2022 and corn pushed to the highest level in a decade. While many commodities could continue to fall due to high interest rates and the potential for a recession, grain could have upward movement if Black Sea shipping ports jam up due to another Russian blockade.
TWO OF THE THREE KEY DRIVERS in the Dairy Margin Coverage (DMC) program mirror Europe’s grain markets. At $510.90 per ton, soybean meal peaked in August and has since fallen to $436.75 per ton in November, based on USDA data. Corn fell from June’s $7.37 to $6.49.
PREMIUM ALFALFA HAY HAS BUDGED SOME but not as much as corn and soybeans. Nationally, alfalfa fetched $343 per ton in August and inched lower to $331 by November. Higher prices prevail in the West.
DAIRY FARMERS HAVE ONE LAST CHANCE to sign up for DMC coverage by the January 31, 2023, deadline. The program considers the milk, premium alfalfa hay, corn, and soybeans prices. To learn more about how 2023 could unfold, read the Editorial Comment on page 52 of this issue.
THE FARM WORKFORCE MODERNIZATION ACT, twice passed by the U.S. House of Representatives, suffered a second death after failing to garner the necessary votes in the U.S. Senate. Had the measure passed Congress, dairy farmers would have been able to employ H-2A workers. At the moment, only seasonal agricultural employers can hire H-2A workers.
THE COLLECTIVE U.S. DAIRY INDUSTRY continues to build relationships around the world; so much so that USDA has predicted that the U.S. will export over 1 billion pounds of cheese in 2023. In 2021, the American dairy industry sold 886,000 pounds of cheese abroad.
NEARLY 60% OF SURVEYED RESTAURANTS plan to expand in 2023. Overall, 92% of restaurants raised menu prices in 2022; 73% plan to do so in 2023. Consumers eat more dairy at restaurants than at home.
FEED COSTS WERE EXPECTED to rise nearly $11.3 billion across the farm economy in 2022 as shown below.