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www.thelandonline.com — “Where Farm and Family Meet”
THE LAND — MAY 28/JUNE 4, 2021
SE Asia overtakes Mexico as second-largest U.S. dairy market This column was written for the marmonth. USDEC says, “The region ranked keting week ending May 28. Number 2 for sales, buying $1.26 billion in U.S. dairy products and ingredients, a The ‘fridge is far from empty, but the 36 percent increase over the previous U.S. Department of Agriculture’s latest year, despite the challenges presented by Cold Storage report shows inventories a global pandemic.” are not getting out of hand, at least on cheese. USDEC also opened its Center for Dairy Excellence in Singapore, stating American-type stocks fell to 830.8 mil“The investment signals a long-term comlion pounds, down 3.6 million pounds or MIELKE MARKET mitment to a region that encompasses 0.4 percent from March (which was WEEKLY Indonesia, Malaysia, the Philippines, revised up 2.6 million pounds) and they Singapore, Thailand and Vietnam, plus By Lee Mielke were 3.5 million pounds or 0.4 percent Brunei Darussalam, Burma, below those a year ago. Cambodia and Laos.” The combined The “other” cheese category saw population of those countries is more stocks dip to 601.2 million pounds, than 670 million, more than double down 10.7 million pounds or 1.7 percent from March the U.S. population. and 17.5 million or 2.8 percent below a year ago. n The total cheese inventory stood at 1.45 billion Checking prices at home, the Cold Storage data pounds on April 30, down 15.9 million pounds or 1.1 put the brakes on cheese prices falling, for a day at percent from March and 25.5 million pounds or 1.7 least. After plunging 15.5 cents the previous week, percent below a year ago, ending five consecutive the cheddar blocks closed the last Friday of May at months that total cheese stocks grew. $1.53 per pound. This is down 4 cents on the week, The decline in cheese is a rare occurrence during 27 cents below where it was on May 3, and 70 cents the spring flush. It is the first April decline since below a year ago when they pole-vaulted 29.25 1993, according to HighGround Dairy’s Lucas Fuess cents to $2.23 per pound. in the May 31 “Dairy Radio Now” broadcast. Fuess The barrels entered the Memorial Day weekend at said the expanded cheese production capacity which came online in recent months leads us to believe production was strong. However, this report would indicate, “demand is almost off the charts” and driven by retail and foodservice channels as the econoTHIESSE, from pg. 12 my quickly reopened.
MARKETING
$1.57 per pound, down 3.75 cents on the week, down 24.25 cents on the month, 45.25 cents below a year ago when they jumped 13.25 cents, but at an inverted 4 cents above the blocks. There were 36 cars of block traded on the week, 123 for the month, up from 85 in April. Barrel sales totaled 33 for the week, 110 for the month, up from 81 in April. Some Midwestern cheese producers told Dairy Market News they were planning on running through Saturday and continuing on the Monday holiday. Others were down for updates and maintenance. Spot milk loads were being reported more regularly and cheesemakers were finding heavily discounted loads. Cheese demand remains mixed. Some retail cheddar producers say buyer interest is and has been quite busy while other varietal cheesemakers were less busy. Barrel prices topping the blocks is viewed with a skeptical eye, says Dairy Market News. Cheese demand in the west has slowed in both retail and food service. Cheese production has remained strong, causing supplies to outpace demand. The weaker Chicago Mercantile Exchange prices have some believing that is favorable for See MIELKE, pg. 17
Give better incentives for CRP participation
CRP program, unless there are some added financial incentives. Butter stocks climbed to 385.3 million pounds, up a Pothole” region can now enroll in the Soil Health Increasing CRP annual rental rates back to comand Income Protection Program (SHIPP), which is a hefty 27.9 million pounds or 7.8 percent above the pilot program being offered under the CRP program. parable farm land rental rates in a given area is March inventory, which was revised up 2.8 million likely to face kickback by some members of pounds. They were 12.7 million pounds or 3.4 percent The SHIPP program is a short-term CRP option to above April 2020, making April the 22nd consecutive plant cover vegetation on less productive agricultur- Congress and by farm organizations. The reduction al lands, while improving soil health and enhancing factors in the maximum CRP rental rates which month butter stocks topped those of a year ago. were put in place in the last Farm Bill were due to carbon sequestration. The SHIPP program takes Fuess says the butter data was “pretty normal,” CRP competing with farmers who were trying to farm land out of crop production, while still allowbut the heavy inventory will weigh on prices. rent farm land for crop production — especially ing livestock producers to utilize the land for haying HighGround Dairy warns that butter stocks will younger beginning farm operators. This CRP rental and grazing. States eligible for the SHIPP program only climb further in second quarter before reaching rate reduction had bipartisan support in Congress include Minnesota, Iowa, Montana, North and the yearly peak. South Dakota. The current SHIPP enrollment peri- during the development of the 2018 Farm Bill. Keep in mind a year ago, Covid lockdowns had Hopefully, USDA and Congress kind find a workod continues through July 16. restaurants closing their doors, thus butter stocks able solution to the CRP rental rate situation, as grew quickly. It will be interesting to see what April Summary the CRP program does seem to be a sensible The CRP program has a long and successful histobutter output looked like in the next Dairy Products ry of preventing soil erosion, improving water quali- approach toward further enhancement of carbon report issued June 4. sequestration efforts in many areas of the United ty, enhancing wildlife habitat, and aiding in carbon States. The StoneX Dairy Group, however, says that over- sequestration. While it may seem quite logical to all, they are still bullish on butter and expect stocks utilize expansion of the CRP program to reach furFor more information on the current CRP enrollto fall below year ago levels by August, as competiment, expiring CRP acres, rental rates, etc., contact ther goals related to carbon sequestration, there tive U.S. butter prices increase exports. the local USDA Farm Service Agency office or refer could be some obstacles in accomplishing those to the USDA CRP web site at http://www.fsa.usda. goals. Commodity prices for corn and soybeans are n gov/crp their highest levels in eight or nine years. Farm Speaking of exports, the U.S. Dairy Export Council profit levels have improved considerably in the past Kent Thiesse is a government farm programs anareports that Southeast Asia surpassed Mexico to couple of years, which is also resulting in higher lyst and a vice president at MinnStar Bank in Lake become the U.S. number-one dairy export market for land rental rates in many areas. This may make it Crystal, Minn. He may be reached at (507) 726-2137 volume in 2020, absorbing the equivalent of more difficult to convince farmers and landowners to take or kent.thiesse@minnstarbank.com. v than one day of total U.S. milk production per farm land out of production in order to enroll in the
