Dairy Profit Wednesday
An (almost) daily recap of dairy information:
Dec. 23, 2009
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Western DairyBusiness and Eastern DairyBusiness editors will explore topics related to manure management in a dairy producer survey. Dairy producers completing surveys by Dec. 30 will be entered into a drawing for a $100 VISA gift card. To complete the 10-question survey, please visit:
Summing up 2009
USDA’s final Agricultural Income and Finance Outlook report of the year indicates all three measures of U.S. farm income are projected to decline in 2009 – net farm income is projected to decline by 34.5%; net cash income by 28.4%; and net value added by 20%. The largest declines in farm-business income are forecast for livestock farms, particularly dairy.
Dairy receipts are expected to decline by almost one-third – from $34.8 billion in 2008 to $23.9 billion in 2009 – as milk prices received by dairy farmers are expected to decline by almost $6/cwt. The all-milk price is expected to drop to nearly $12.40/cwt., compared to the 2008 annual average of $18.29/cwt. Dairy expenses, which have risen sharply in the last several years, are forecast to fall by more than 6%, on average, in 2009. The reduction in expenses, however, is not enough to maintain incomes, with average net cash income forecast to fall by 82% in 2009. Offsetting a small portion of those declines is an expected $900 million in Milk Income Loss Contract payments. Download the full report, Agricultural Income and Finance Outlook, Dec. 2009.
Wednesday’s CME cash dairy product prices:
CME cheddar blocks crashed on Dec. 23, dropping 11¢/lb.
Cheddar blocks: down 11¢, to $1.59/lb.
Cheddar barrels: up 1¢, to $1.44/lb.
Butter – unchanged, at $1.3275/lb.
Extra Grade nonfat dry milk – unchanged, at $1.40/lb.
Grade A nonfat dry milk – unchanged, at $1.37/lb.
Class III milk futures prices were lower through December 2010.
Corn, soybean and soybean meal futures 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.
CME trading closes at 12:15 p.m. (central) on Thursday, Dec. 24 and remains closed on Friday, Dec. 25.
CME trading closes at 3:15 p.m. (central) on Thursday, Dec. 31 and remains closed on Friday, Jan. 1.
Thusday on DairyLine Radio
The National Milk Producers Federation (NMPF) and U.S. Dairy Export Council have called on U.S. Trade Representative Ron Kirk to exclude dairy from any trade agreement between the United States and New Zealand under an Asia-Pacific trade agreement. NMPF’s Chris Galen said the Obama Administration appears to be moving ahead with a Trans-Pacific agreement with Australia, Chile, Singapore, Peru, Brunei, Vietnam and New Zealand. The U.S. already has agreements with all of them except New Zealand, Vietnam and Brunei. Galen said the concern is New Zealand and “its unique dairy industry structure.” New Zealand is the world’s largest dairy exporter, and “benefits tremendously from what is essentially a dairy monopoly where one company (Fonterra) controls more than 90% of the country’s milk production.” For more details, and to listen to the conversation with DairyLine’s Lee Mielke, visit www.dairyline.com.
Tomorrow
USDA releases its monthly dairy cull cow slaughter estimate on Thursday, Dec. 24. Visit www.dairybusiness.com for Dairy Profit Weekly updates.
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