DairyBusiness

An (almost) daily recap of dairy information:

Dec. 14, 2009

Global warming

Although short on economic detail, USDA, in cooperation with the University Corporation for Atmospheric Research and the U.S. Global Change Research Program, released “The Effects of Climate Change on U.S. Ecosystems” at the climate talks in Copenhagen, Denmark. For livestock producers, livestock mortality will decrease with warmer winters, but this will be more than offset by greater mortality in hotter summers. Hotter temperatures will also result in reduced productivity of livestock and dairy animals, due to changes in consumption and lower pregnancy rates. To find more information , go to www.usda.gov/wps/portal/usdahome.

Corn and soybean prices

With little production-related information to impact markets, corn and soybean prices are expected to remain in a relatively narrow range, influenced by financial and energy markets, according to Darrel Good, agricultural economist at the University of Illinois.  The next USDA update of supply and consumption prospects will be released on Jan. 12, 2010, the same day as final 2009 production estimates, Dec. 1 grain stocks estimates and 2009 winter wheat seeding estimates.

Monday’s CME cash dairy product prices

Cheddar blocks: unchanged, at $1.70/lb.

Cheddar barrels: unchanged, at $1.46/lb.

Butter – unchanged, at $1.45/lb.

Extra Grade nonfat dry milk – unchanged, at $1.40/lb.

Grade A nonfat dry milk – unchanged, at $1.38/lb.

Class III milk futures prices were slightly higher through July 2010, steady to lower thereafter through November 2011.

Corn, soybean and soybean meal futures prices were all higher

For today’s market activities on the Chicago Mercantile Exchange and Chicago Board of Trade, visit http://www.dairybusiness.com/dairybusiness_markets.php.

Tuesday on DairyLine Radio

Cheese traders seem comfortable with prices where they’re at, even with a 24¢ spread between cheddar blocks and barrels. Fourteen carloads traded hands on Monday, just five short of the entire total the previous week, according to Downes-O’Neill dairy economist Bill Brooks.

“We can’t really say there’s a shortage, but it does seem to be a pretty decent imbalance between those who need block cheese and those who have it and, at the moment, those who have it aren’t really letting go of it for anything less than $1.70 or in that ballpark,” Brooks said.

The barrel market seems more than adequately supplied, according to Brooks. “Buyers are getting a pretty good deal and, if sellers do have extra, they don’t want to push it down any more because that just increases the negative spread between what they’re paying for milk and the price they’re receiving for their output.”  For more details, and to listen to the conversation with DairyLine’s Lee Mielke, visit www.dairyline.com.

For a sample copy of Dairy Profit Weekly, or subscription information, visit www.dairyprofit.com or phone: 800-334-1904, ext. 244.

Dave Natzke, Editor