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www.thelandonline.com — “Where Farm and Family Meet”
THE LAND — NOVEMBER 13/NOVEMBER 20, 2020
Forecast calls for healthy cheese prices and production This strength is expected to carry into 2021 supporting a higher 2021 fat basis import forecast. The fat basis export forecast for 2020 was raised on higher expected exports of cheese and butterfat; no change was made to the 2021 fat basis export forecast. The skim-solids basis import forecast for 2020 was reduced on lower imports of lowMIELKE MARKET fat milk powders while the 2021 import WEEKLY forecast was reduced on lower imports of By Lee Mielke a number of dairy products. The 2020 and 2021 skim-solids basis export forecasts were raised on stronger expected sales of skim milk powder. n StoneX Dairy says, “It will be important to watch Looking at the feed side of things, the USDA how any vaccine will be distributed and whether it again cut its estimate on the size of this year’s corn can be distributed fast enough to allow some new and soybean crops. The corn outlook is for lower restrictions to be rolled back. For now, Pfizer is production, reduced feed and residual use, larger expecting to see the bulk of vaccine distribution occur in 2021. Approximately 50 million doses could exports, and smaller ending stocks. Corn production be available by the end of 2020, vaccinating around was forecast at 14.507 billion bushels, down 215 million or 1 percent from last month’s forecast; but 25 million people.” up 7 percent from 2019. Yields are expected to averThe U.S. Department of Agriculture raised its 2020 milk production forecast for the third consecu- age 175.8 bushels per acre, down 2.6 bushels from the previous forecast but 8.3 bushels above a year tive month in the latest World Agricultural Supply ago. Area harvested for grain was forecast at 82.5 and Demand Estimates report —citing stronger million acres, unchanged from the previous forecast, growth in milk per cow and higher expected dairy but up 1 percent from a year ago. cow inventory. The 2021 estimate was raised on Corn exports were raised 325 million bushels to higher forecast prices for cheese and whey. 2.65 billion, which if realized would be record high. 2020 production and marketings were estimated Projected feed and residual use was lowered 75 milat 222.5 and 221.5 billion pounds respectively, up lion bushels based on a smaller crop and higher 200 million pounds on both from their October estiexpected prices. With supply falling and use increasmate. If realized, 2020 production would be up 4.1 ing, corn ending stocks are down 465 million bushbillion pounds or 1.9 percent from 2019. els to 1.7 billion, which would be the lowest since 2021 production and marketings were estimated 2013-14. The corn price was raised 40 cents to $4.00 at 225.9 and 224.9 billion pounds respectively, up per bushel. 400 million pounds on both. If realized, 2021 proSoybean production was forecast at 4.17 billion duction would be up 3.4 billion pounds or 1.5 perbushels, down 98 million or 2 percent from a month cent from 2020. ago, but up 17 percent from last year. Yields are Cheese, nonfat dry milk and whey price forecasts expected to average 50.7 bushels per acre, down 1.2 for 2020 were raised from last month on strength in bushels from the last forecast but 3.3 bushels above demand. The butter price forecast was reduced on 2019. Area harvested was forecast at 82.3 million current and expected continued weakness in prices. acres, unchanged from last month’s forecast but up The 2020 Class III milk price forecast was raised on 10 percent from a year ago. higher prices for cheese and whey. It is now projected Lower yields were reported for Illinois, Iowa, to average $18.55 per cwt., up 55 cents from last Indiana, Ohio and Nebraska. With reduced producmonth’s estimate, and compares to $16.96 in 2019 tion, ending stocks were projected at 190 million and $14.61 in 2018. The 2021 average was projected bushels, down 100 million from last month. If realat $17.25, up 25 cents from last month’s estimate. ized, soybean ending stocks would be at the lowest level in seven years. Soybean and product prices The Class IV forecast was unchanged from last month as the expected higher nonfat dry milk price were all higher. The U.S. season-average soybean offsets the lower butter price. It remained at $13.50, price was forecast at $10.40 per bushel, up 60 cents. The soybean meal price was forecast at $355 per down from $16.30 in 2019 and $14.23 in 2018. The short ton, up $20. 2021 Class IV price average was put at $14.00, down a dime from last month’s projection. Cotton estimates were virtually unchanged. The production forecast is marginally higher, at 17.1 The 2020 fat basis import forecast was raised on million bales, up less than 1 percent from a month recent trade data and higher expected imports of ago but down 14 percent from a year ago. Yields are cheese and butterfat products in fourth quarter. This column was written for the marketing week ending Nov. 13. The big news this week was the media and some politicians pronouncing Joe Biden as the new U.S. president. The Trump Administration filed numerous legal challenges to the vote totals and that may delay the final determination for several weeks. It was 37 days in the Bush-Gore race. Perhaps the bigger news was that Pfizer has a viable Covid vaccine. Preliminary results showed over 90 percent prevention in the thousands of test volunteers.
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expected to average 911 pounds per acre, up 2 pounds from the previous forecast and 88 pounds above the 2019 level. StoneX dairy broker Dave Kurzawski stated in the Nov. 16 “Dairy Radio Now” broadcast that we’re seeing record corn exports but smaller crops. China has been “buying like crazy,” he said, but he fears dairy and livestock producers may be less covered on feed than they should be as prices are poised to rise. Cheese prices are heading down, “probably part of a normal ebb and flow.” However, “we’re not out of this pandemic yet.” He believes government support and retail demand will be there and, if there is a President Biden, there will mostly likely be continued government assistance ahead. The Daily Dairy Report’s Sarina Sharp echoed the export sentiment, writing in the Nov. 6 Milk Producers Council newsletter, that the first week of November was “another strong week of corn and soybean exports. The weak dollar gave commodity markets a boost and made U.S. grains even more attractive to foreign buyers. And South America is in the throes of a dry spell, leading to speculation that the United States will remain the best market for a bit longer.” Meanwhile, the USDA’s latest Crop Progress report shows that the U.S. corn harvest was 91 percent complete as of the week ending Nov. 8. This is up from 62 percent at that time a year ago and 11 percent ahead of the five-year average. Soybeans were 92 percent harvested, up from 82 percent a year ago and 2 percent ahead of the fiveyear average. The cotton harvest was 61 percent completed. n Hemorrhaging continues in the cash cheese market. The cheddar blocks closed Friday the 13th at $1.9175 per pound, down 42.5 cents on the week, adding to the 44 cent drop the previous week, and the lowest since Sept. 2, but were still 27.5 cents above a year ago. The barrels plunged to $1.61 per pound Nov. 13 following significant drops almost daily — including a record single-day loss of 29 cents on Nov. 13. They dropped 70.75 cents on the week to the lowest price since Sept. 15, 58.75 cents below a year ago, and 30.75 cents below the blocks. Fourteen cars of block sold on the week and 32 of barrel. Orders for cheese for the Food Box program are slowing and there’s no word of the program being extended into 2021. StoneX says, “Round 4 food boxes have started to be delivered, 61,964 thus far. Deliveries of Round 3 boxes have slowed, 16 out of 19.1 million have been delivered for Round 3, Sept. 22 to Oct. 31. Questions remain as to whether the target will be reached, but only time will tell.” Midwestern cheese producers reported a notable See MIELKE, pg. 21
