Transcript Dairy Outlook 2014 Dr. Marin Bozic Minnesota Dairy Statistics: 2013 vs.

Dairy Outlook 2014
Dr. Marin Bozic
Minnesota Dairy Statistics: 2013 vs. 2012
2012
2013(p)
Percent
Change
Dairy Cows
465,000
465,000
0.0%
Dairy Farms
4,079
3,808
-6.6%
114
122
7.0%
19,505
19,737
1.2%
Milk Per Cow (per day)
53.3
54.1
1.2%
Total Milk Production
9,071 mil lbs
9,177 mil lbs
1.4%
$19.47
$19.50
0.2%
$1,817,737,000
3.0%
Cows Per Farm
Milk per Cow
Mailbox Price
Gross Dairy Farm
$1,757,140,000
Cash Revenue
In Focus: Minnesota Dairy Herds By Size
FMMO 30 Dairy Statistics: 2013 vs. 2012
2013 YTD
2012
Percent
Change
Class I Price
$20.35
$19.26
5.7%
Class II Price
$19.06
$16.64
14.6%
Class III Price
$17.81
$17.44
2.1%
Class IV Price
$18.66
$16.01
16.6%
Class I
10.6%
12.4%
-1.8%
Class II
2.7%
5.4%
-2.7%
Class III
85.5%
78.6%
6.9%
Class IV
1.1%
3.5%
-2.4%
Class Prices
Utilization
Class I Utilization Across Time and Space
Annual Growth in the U.S.
Milk Per Cow (Lbs)
Annual Growth in the U.S.
Milk Production (Mil LBs)
7,500
5,500
3,500
1,500
-500
-2,500
650
550
450
350
250
150
50
-50
Commercial Disappearance
Q1-Q3
Year-on-Year Growth
(Million Lbs)
Product
(Mil lbs)
Stocks
(Days of Consumption)
2013
Q1-Q3
2013
2001-2013
2013
20012013
Butter
1,356
27
35
31
39
American
Cheese
3,310
87
49
53
51
Other
Cheese
5,147
120
115
21
18
Total
Cheese
8,457
207
164
--
--
NFDM
1,210
-233
49
34
32
Daily U.S. Fluid Milk Sales
(rolling 12-month avg., mil lbs)
Dairy Sales: Fluid Milk
154
152
150
148
146
144
142
140
138
136
Fluid Milk Sales in 2013 projected 1.5 billion lbs (2.8%) lower than in 2012.
In Focus: Greek Yogurt
Product
2013 YTD
(mil lbs)
Volume
Change
(mil lbs)
Total Yogurt
2,394
83.5
Greek
Yogurt
748
247.6
•
•
•
•
Greek yogurt volume up 49.5% vs 2012.
Greek yogurt market share 31%, up from 22.5% last year.
Drinkable Yogurts up 10% over 2012.
The number of new drinkable yogurt product
introductions increased from 31 in 2011 to 115 in 2012.
Source: DMI, Multi-Outlet Retail Milk, Cheese and Yogurt Sales Snapshots, September, 2013
Dairy Exports
• Dairy exports equivalent to 58 days of U.S. milk production.
• Dairy exports keep 1.4 million U.S. cows busy throughout the year.
New Zealand Drought Propelled U.S. Dairy Exports
New Zealand Drought Propelled U.S. Dairy Exports
Source: USDEC Dairy Outlook 2014
New Zealand Production Shocks  U.S. Dairy Exports Risks
Feed Costs On the Decline
$250
$9.00
Alfalfa Hay $/ton
$200
$7.00
$6.00
$150
$5.00
$4.00
$100
$3.00
$2.00
$50
$1.00
$0
$0.00
Alfalfa Hay
Corn
Corn for Grain $/bu
$8.00
20+ Percent Chance Corn Will Fall Below $4.00/bu
Milk Production To Rebound
Milk Production Growth: California and Texas
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
-2.0%
-4.0%
-6.0%
-8.0%
California
Texas
Milk Production To Rebound
Source: USDEC Dairy Outlook 2014
Class III milk price 50-75 cents lower, with a chance of meatballs
Forward Income over Feed Costs Margins Look Excellent
China Imports will either Make or Break the Market in 2014
Source: USDEC Dairy Outlook 2014
Market Still Expected to Be Tight
Source: USDEC Dairy Outlook 2014
What does this all mean for Minnesota?
Year
Mailbox
Milk
Price
2008
18.68
2009
13.03
2010
15.75
2011
19.99
2012
19.35
2013
19.51
My forecast is for 2014 Minnesota
mailbox milk price to be $19.10, with
more downside risk than upside
potential - with 80% confidence I
predict it will be between $17.00 and
$20.00.
U.S. Dairy Policy Outlook
The Critical Two Questions:
For Democrats: Is No Deal better than Raw Deal?
For Republicans: Can they get more after the elections?
Dairy Outlook 2014
Midwest Dairy Expo
St Cloud, MN
December 4, 2013
Dr. Marin Bozic
[email protected]
Department of Applied Economics
University of Minnesota-Twin Cities
317c Ruttan Hall
1994 Buford Avenue
St Paul, MN 55108
Photo Credits:
Title Slide: Orange Patch Dairy, Sleepy Eye, MN
Credits Slide: Zweber Family Farms, Elko, MN