2013-14 Dairy Outlook: Indiana Perspectives Nicole Olynk Widmar and Mike Schutz Purdue University.
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2013-14 Dairy Outlook: Indiana Perspectives
Nicole Olynk Widmar and Mike Schutz Purdue University
2013 in Review
Purdue University is an Equal Opportunity/Equal Access institution.
Purdue University is an Equal Opportunity/Equal Access institution.
DAIRY COW INVENTORY
US Total, Monthly Thou Head 9280 9260 9240 9220 Avg.
2007-11 2012 9200 9180 9160 9140 JAN MAR MAY JUL SEP NOV Livestock Marketing Information Center Data Source: USDA-NASS 07/22/13 Last official numbers released by USDA-NASS was for February 2013.
All data points following are LMIC estimates. 2013
Source:http://future.aae.wisc.edu/ Purdue University is an Equal Opportunity/Equal Access institution.
8/14/13
?
Slaughter Dairy Cows Managing US Herd Size?
With tight margins and high cull cow values … what next???
2006 2007 2008 2009 2010 2011 2012 2013 310 290 270 250 230 210 190 170 150 Jan Feb Mar Apr May Jun Livestock Marketing Information Center Data Source: USDA-NASS Jul Aug Sep Oct Nov Dec Purdue University is an Equal Opportunity/Equal Access institution .
08/15/2013
Production per Cow in Indiana
2007 2008 2009 2010 2011 2012 2013 2000 1950 1900 1850 Very high digestibility of drought stressed forages?
Or are cow numbers significantly underestimated?
1800 1750 1700 1650 1600 1550 Jan Feb Mar Apr May Jun Livestock Marketing Information Center Data Source: USDA-NASS Jul Aug Sep Oct Nov Dec Purdue University is an Equal Opportunity/Equal Access institution .
10/16/2012
MILK PRODUCTION
US Total, Monthly Bil Pounds 18.0
17.5
17.0
16.5
16.0
15.5
15.0
14.5
14.0
JAN MAR MAY Livestock Marketing Information Center Data Source: USDA-NASS JUL SEP NOV 07/22/13 Avg.
2007-11 2012 2013
Indiana State Trends
Grade A Herds Grade B Herds
Farms
Cows
Milk Production
Production/cow
June 1997
1875 1104
2979
140K
186M
1380
June 2000
1668 786
2454
148K
198M
1400
June 2006
1392 324
1716
166K
277M
1670
June 2012
1240 163
1403
176K
307M
1745
June 2013
1216 130*
1346
~175K
328M
~1874
Change ‘97 to ‘13
- 35% - 88%
- 55%
+25%
+76%
+36%
*Annual decline in Manufacturing Grade herds driven by state code changes to SCC limit of 750,000 cells/ml (same as Grade A), and requirement of running hot water in milk house.
(Dairy Program, IBOAH & Indiana Ag. Statistics)
MILK PRODUCTION FORECASTS
US Total, Quarterly Bil. Pounds 54 52 50 48 46 44 42 JAN-MAR APR-JUN Livestock Marketing Information Center Data Source: USDA-NASS, Compiled & Analysis by LMIC JUL-SEP OCT-DEC 07/22/13 Avg. 2008 012 2013 2014
Purdue University is an Equal Opportunity/Equal Access institution.
Source:http://future.aae.wisc.edu/ 8/14/13
US RANGE AND PASTURE CONDITION
Percent Poor and Very Poor, Weekly Percent 65 60 55 50 45 40 35 30 25 20 15 May Jul Livestock Marketing Information Center Data Source: USDA-NASS, Compiled & Analysis by LMIC Sep G-NP-30 08/13/13 Avg.
2007-11 2012 2013
Purdue University is an Equal Opportunity/Equal Access institution.
Source:http://future.aae.wisc.edu/
Purdue University is an Equal Opportunity/Equal Access institution.
Source:http://future.aae.wisc.edu/
BUTTER IN COLD STORAGE
End of the Month Mil. Pounds 350 300 250 200 150 100 JAN MAR MAY Livestock Marketing Information Center Data Source: USDA/NASS JUL SEP NOV 07/23/13 Avg.
2007-11 2012 2013
BUTTER PRICES
Grade AA, CME, Monthly $ Per Pound 2.00
1.90
1.80
1.70
1.60
1.50
1.40
1.30
1.20
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Livestock Marketing Information Center Data Source: USDA-AMS, Dairy Market News 08/02/13 Avg.
2007-11 2012 2013
TOTAL CHEESE IN COLD STORAGE
End of the Month Mil. Pounds 1,175 1,125 1,075 1,025 975 925 875 JAN MAR MAY Livestock Marketing Information Center Data Source: USDA/NASS JUL SEP NOV 07/23/13 Avg.
2007-11 2012 2013
CHEDDAR CHEESE PRICES
40 Pound Block, CME, Monthly $ Per Pound 2.20
2.10
2.00
1.90
1.80
1.70
1.60
1.50
1.40
1.30
1.20
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Livestock Marketing Information Center Data Source: USDA-AMS, Dairy Market News 08/02/13 Avg.
2007-11 2012 2013
June 2013 exports were 2 nd highest month ever, totalling $596 million
(2 nd to May 2013) totalling $631 million * Fiscal year 2013 up 9% from previous period
Purdue University is an Equal Opportunity/Equal Access institution.
Purdue University is an Equal Opportunity/Equal Access institution.
Purdue University is an Equal Opportunity/Equal Access institution.
Milk Price
Purdue University is an Equal Opportunity/Equal Access institution .
25 23 21
$
19 17 15 13 11 9
2006
Milk Class Prices (8/15/2015)
Class I Class IV CME Futures Class II USDA High Class III USDA Low
2007 2008 2009 2010 2011 2012 2013 2014
Livestock Marketing Information Center Data Source: USDA/NASS Purdue University is an Equal Opportunity/Equal Access institution .
8/15/2013
October 2013 Milk – as of 8-8-13
• 25% chance less than $17.30
• 25% changes more than $19.25
Most likely price at maturity: $18.16
Source: Jim Hilker's Market Outlook & Probabilistic Price Forecasts for Grain & Livestock; Michigan State University, https://www.msu.edu/~hilker/ Purdue University is an Equal Opportunity/Equal Access institution.
December 2013 Milk – as of 8-8-13
• 25% chance less than $15.77
• 25% changes more than $18.15
Most likely price at maturity: $16.75
Source: Jim Hilker's Market Outlook & Probabilistic Price Forecasts for Grain & Livestock; Michigan State University, https://www.msu.edu/~hilker/ Purdue University is an Equal Opportunity/Equal Access institution.
February 2014 Milk – as of 8-8-13
• 25% chance less than $15.03
• 25% changes more than $17.61
Most likely price at maturity: $16.05
Source: Jim Hilker's Market Outlook & Probabilistic Price Forecasts for Grain & Livestock; Michigan State University, https://www.msu.edu/~hilker/ Purdue University is an Equal Opportunity/Equal Access institution.
25 23 21
$
19 17 15 13 11 9
2006
Milk Class Prices (8/15/2015)
Class I Class IV CME Futures Class II USDA High Class III USDA Low
2007 2008 2009 2010 2011 2012 2013 2014
Livestock Marketing Information Center Data Source: USDA/NASS Purdue University is an Equal Opportunity/Equal Access institution .
8/15/2013
Policy: What the US Dairy Industry fears the Dairy Title of the US Farm Bill will look like coming out of conference:
MILC
• Payment thus far:
– Jan 11.8 ¢/cwt – Feb 52.5 – March 75.5
– April 69.9
– May 74.2
– June 21.87
– July (projected less than 10 ¢/cwt) – likely last payment of the year Purdue University is an Equal Opportunity/Equal Access institution.
Milk Price Outlook
• Lower milk prices • LOWER feed prices • Building stocks – especially butter and cheese – 24% increase in butter stocks over a year ago – 8% higher total cheese stocks – Holiday baking season is upcoming … helping butter and cheese prices • Extremely strong export markets – Nonfat dry milk powder up 23% in May over a year ago; 7% increase year-to-date • Increase in cow numbers in 18 of 23 dairy states (mostly East) • *Increase* in production for US and traditional dairy states – How much production/cow and how much cow number growth?
Mike Schutz [email protected] Nicole Olynk Widmar [email protected]
Purdue University is an Equal Opportunity/Equal Access institution .
30
NONFAT DRY MILK PRICES
Central and East, Monthly $ Per Pound 1.80
1.70
1.60
1.50
1.40
1.30
1.20
1.10
1.00
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Livestock Marketing Information Center Data Source: USDA-AMS, Dairy Market News 08/02/13 Avg.
2007-11 2012 2013
Purdue University is an Equal Opportunity/Equal Access institution.
Source:http://future.aae.wisc.edu/ 8/14/13
Fluid milk sales by category 1800 1600 1400 1200 1000 800 600 400 200 0 Livestock Marketing Information Center Data Source: USDA/NASS Purdue University is an Equal Opportunity/Equal Access institution.
Whole Organic Reduced Low Skim Flavored Fat Reduced
CLASS III MILK PRICES
FMMO, Monthly $ Per Pound 22.00
21.00
20.00
19.00
18.00
17.00
16.00
15.00
14.00
13.00
12.00
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Livestock Marketing Information Center Data Source: USDA-AMS, Dairy Market News 08/02/13 Avg.
2007-11 2012 2013
CLASS IV MILK PRICES
FMMO, Monthly $ Per Pound 19.50
18.50
17.50
16.50
15.50
14.50
13.50
12.50
11.50
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Livestock Marketing Information Center Data Source: USDA-AMS, Dairy Market News 08/02/13 Avg.
2007-11 2012 2013