BUTTERFAT PRICES SOARED IN OCTOBER with the price per pound reaching a new summit of $3.7144, according to Federal Milk Marketing Order data reported by USDA. The October price was up 58.8 cents per pound from September and close to $1 higher than January of 2023.
THE RECENT BUTTERFAT BOOM is linked to historically high prices for butter traded on the CME. Butter hit new heights for seven days in late September and early October before peaking at $3.5025 on October 6. The average price for October was a record $3.3814 per pound.
DAIRY EXPORTS FOR THE FIRST NINE MONTHS of 2023 were 7.5% behind the same period last year. Exports were down for most product categories in September, with cheese being the exception. Still, cheese exports are down 5.6% year-to-date, according to Ever.Ag’s Mike North.
MEXICO HAS BEEN A BRIGHT SPOT for dairy exports. A healthy economy and strong currency relative to the U.S. dollar made Mexico an even better customer for dairy products. Year-to-date, cheese exports to Mexico were 13% higher than in 2022 (see the chart below). Nonfat dry milk powder and skim milk powder rose 31% on a total volume basis.
MEANWHILE, EXPORTS TO CHINA AND SOUTHEAST ASIA have not been as strong, North noted. Read more on page 582.
THE INCOME OVER FEED COST MARGIN for the Dairy Margin Coverage program reached $8.44 per hundredweight (cwt.) for September, the highest margin calculated in 2023. Close to $2 per cwt. higher than the August margin and more than double July’s record low of $3.52, this margin is the result of lower feed prices and an All-Milk price of $21.00.
AS OF THE MAGAZINE’S CLOSING, USDA had yet to announce the enrollment period and sign-up deadline for the 2024 program year.
RECORD CORN PRODUCTION IN THE U.S. could translate to lower corn silage and grain prices for 2024. Despite widespread early season drought, total U.S. corn production reached 15.2 billion bushels, with an estimated average of 174.9 bushels per acre. On the other hand, soybean meal stocks will remain lower, resulting in elevated prices.
THE CATTLEMAN’S BEEF PROMOTION AND RESEARCH BOARD, established under the Beef Promotion and Research Act of 1985, will reduce membership from 101 to 99 representatives. This reflects changes in cattle inventories as well as levels of imported cattle and beef products since the board was last reapportioned in July 2020. Idaho will gain one representative on the board, while Wisconsin, Montana, and Pennsylvania will each lose one seat.