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www.thelandonline.com — “Where Farm and Family Meet”
THE LAND — APRIL 30/MAY 7, 2021
High feed costs have dairy producers seeing red increases in the SNAP and WIC programs and that could mean a weakening for dairy product demand as we enter the second half, according to Kurzawski. “Just because corn prices are going up, doesn’t necessarily mean that the dairy market is going to deliver you an excellent price,” he concluded. “It will happen at some point; but there’s going to be MIELKE MARKET challenges over the next six to nine WEEKLY months.” By Lee Mielke n Chicago Mercantile Exchange cash dairy prices ended April stronger for the most part. The cheddar blocks We talked about it in the May 3 finished at $1.80 per pound, up three-quarters of a “Dairy Radio Now” broadcast with StoneX dairy cent on the week, 2.5 cents above their April 1 postbroker Dave Kurzawski who said the Class III milk ing, and 59.5 cents above that week a year ago. price was keeping up “so far,” and butter (and nonThe barrels closed April 30 at $1.835, up 3 cents fat dry milk in particular) are helping the Class IV on the week, 32.25 cents above the April 1 perch, market. 64.5 cents above a year ago, and 3.5 cents above the “Milk is liquid corn at some point,” Kurzawski blocks. Sales totaled 24 of block on the week and 87 said, “and it’s going to matter that corn prices, as we for the month, up from 31 in March. Barrels totaled speak, are over $7 on the old crop May contract and 12 for the week, with 85 for the month, up from 28 we haven’t even gotten into the growing season yet. in March. We have weather ahead of us as well as other Cheese market tones are remaining solid, accorddemand issues. Anything can come out of the wooding to Dairy Market News, and Midwestern producwork and change the market tempo and tenor at ers are running active schedules. The spot milk price any given time. It’s going to be a challenging year range ticked higher the previous week and seemed for dairy producers on the feed side, and I think to hold this week; though most contacts suggest that’s going to mean less milk in the second half of there’s enough milk to go around. Demand remains the year.” strong, but buyers are more hesitant regarding how The other unknown is dairy demand; and, while much cheese they take. Customers are buying on a demand looks good as Covid restrictions allow more necessity basis and don’t want to get caught holding restaurants to return to normal, there’s a lot of uncer- extra loads if markets shift — although inventories tainty as to what government purchases will be. are “generally moving out the door.” Kurzawski said, “(that’s) the dark cloud in the Western retail cheese demand held steady this market right now,” with the Food Box program end- week. Food service demand is still shifting higher, ing May 31. Those purchases will end in mid-May, though some contacts report sales are beginning to he said, and will leave a bit of a hole in the market; level off. Asian export demands have shifted higher but he sees continued strong growth in restaurant in recent weeks. Plenty of milk is available in the demand. The Administration, however, is looking at This column was written for the marketing week ending April 30. U.S. dairy farmers are feeling the squeeze. Average feed costs are up more than $5.00 per hundredweight compared to a year earlier, according to the April 23 Dairy and Food Market Analyst. “A lowcost dairy farmer who broke-even at $15.00 per cwt milk in 2020 will now need $20.00 to make money,” the Analyst stated. “That means many milk producers — especially those that are buying spot feed and are receiving a milk price that is close to Class IV — are deep in the red.”
MARKETING
Webinar on heat stress management NEW PRAGUE, Minn. — “Tips to Manage Heat Stress in Calves and Heifers” headlines the next Dairy Calf and Heifer Association webinar which starts at 2 p.m. on May 6. It’s commonplace for dairy producers to implement heat abatement management practices that help minimize the impacts of heat stress on lactating cows. However, hot weather doesn’t just affect lactating and dry cows. Young stock also experience the effects of heat and humidity. “From the dry cow pen to the AI (artificial insemination) pen, heat can negatively impact calves and heifers,” says Trout. This one-hour webinar, led by Jennifer Trout, a Cargill Animal Nutrition calf and
heifer specialist, will discuss ways to keep calves healthy and thriving during the challenging months of summer. To register for the webinar, go to http://bit.ly/ DCHAHEATSTRESS and follow the prompts. As the webinar approaches, you will receive an e-mail with information on how to log in to participate. The webinar is free. For more information, e-mail Sue Schatz at sue@ calfandheifer.org. This article was submitted by the Dairy Calf and Heifer Association. v
region, as producers continue to run full schedules. The StoneX Group wrote in the April 26 “Early Morning Update,” “It was surprising to see the spot strength following the bearish milk production and cold storage reports but looking at how well food service sales performed in March, a solid 10 percent above 2019 levels, it seems as though cheese makers lean on the side of optimism on their cheese sales and are no longer afraid to restrict production.” n Cash butter closed on April 30 at $1.7525, down 1.75 cents on the week, 9.25 cents lower on the month, but 56.5 cents above a year ago. There were 21 CME sales on the week and 108 for the month, up from 73 in March. Food service butter demand has ebbed somewhat from a few weeks ago when upticks due to easing of Covid-19 restrictions were boosting demand. Retail demand is lackluster. Butter inventories are generally balanced. Plant managers report that cream was a little tighter but butter market tones are “uncertain.” Cream abounds in the West, but availability may be tightening slightly as ice cream makers pull increasing large volumes of cream. Butter inventories are fairly stable. Dairy Market News says food service butter orders “remain on an upward trajectory overall as dine-in restrictions have been relaxing. However, some contacts expect bulk butter demand to waver a little as some counties are now heightening public activity restrictions in response to rising Covid cases and hospitalizations. Retail butter demand is termed steady.” Grade A nonfat dry milk climbed to the highest level it has seen since Oct. 17, 2014, up 7.25 cents on the week and 53.25 cents above a year ago. There were 16 sales on the week, 62 for the month, down from 72 in March. CME dry whey, after setting the highest price ever the week before, fell back to 64.5 cents per pound on April 26, then pushed higher. It ended the week and the month at 66 cents per pound, up 4 cents on the week and 26.5 cents above a year ago. There were six sales on the week and 17 on the month, up from 14 in March. n African swine fever in China is still a concern many market participants have and what that will mean for feed demand, according to StoneX, “but the Chinese government continues to not acknowledge it.” Speaking of China, the April 23 Daily Dairy Report delved into its growing dairy demand, pointing out that, with 1.4 billion people, it is the world’s most populous country. But China has been a minimal consumer of dairy products because many Chinese people are lactose intolerant. See MIELKE, pg. 15
