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www.thelandonline.com — “Where Farm and Family Meet”
THE LAND — AUGUST 20/AUGUST 27, 2021
USDA lowers dairy output estimates due to fewer cows This column was written for the marButter, cheese, nonfat dry milk and keting week ending Aug. 13. whey price forecasts for 2021 were lowered on relatively weak demand. Prices The second week of August began with were also reduced for 2022 reflecting cona lot of uncertainty. Soaring temperatinued relatively soft domestic demand tures returned to much of the country, and higher forecast beginning stocks. especially the west, and over 100 wildfires were consuming hundreds of acres The 2021 and 2022 Class III and Class of woodland in several states. IV milk price forecasts were reduced from last month. Look for a 2021 Class The Daily Dairy Report says, “The U.S. MIELKE MARKET III average of $16.55 per hundredweight, Drought Monitor shows 98.5 percent of WEEKLY down 25 cents from last month’s estithe West was experiencing some type of mate, and compares to $18.16 in 2020 By Lee Mielke drought as of Aug. 3, with nearly twoand $16.96 in 2019. The 2022 averthirds of the area qualifying as age is $16.16, down 60 cents from a under extreme or exceptional month ago. drought. Area reservoirs have been drained to historic lows with serious The 2021 Class IV average is now ramifications for the agricultural producers who pegged at $15.15 per cwt., down 25 cents from a depend on this water.” month ago, and compares to $13.49 in 2020 and Increasing reports of Covid and/or the Delta vari- $16.30 in 2019. The 2021 average will be $15.30, down 45 cents from the July estimate. ant cast a shadow on the markets even as the nonexistent southern border is flooded with would-be This month’s 2021-22 U.S. corn outlook is for residents. State and federal authorities are weighlower supplies, reduced feed and residual use, ing a return to masking and mandatory vaccines increased food, seed, and industrial use, lower declared necessary by medical authorities who don’t exports, and smaller ending stocks. Projected beginseem to have many more answers now than they ning stocks are 35 million bushels higher based on a did when the pandemic began. lower use forecast for 2020-21. Reduced exports were partially offset by greater corn for ethanol and n other uses. The U.S. Department of Agriculture lowered its Corn production was forecast at 14.8 billion bushestimate for 2021 milk production in the latest els, down 415 million from the July projection but World Agricultural Supply and Demand Estimates up 4 percent from 2020. report, second month in a row, and lowered its 2022 estimate, citing lower dairy cow numbers. Area harvested was forecast at 84.5 million acres, unchanged from the June forecast, but up 2 percent 2021 production and marketings were estimated at 228.1 and 227.1 billion pounds respectively, down from 2020. Record yields are expected in Illinois, Indiana, and Ohio, while yields in Minnesota and 100 million pounds on both from last month’s estimates. If realized, 2021 production would still be up South Dakota were forecast below a year ago. Total U.S. corn use is down 190 million bushels to 14.7 4.9 billion pounds or 2.2 percent from 2020. billion. Feed and residual use is down 100 million 2022 production and marketings were estimated bushels based on a smaller crop and higher expectat 231.2 and 230.2 billion pounds respectively, down ed prices. StoneX says, “The reduction in demand 400 million pounds on production and down 300 looks to be all that’s keeping us from really lighting million on marketings. If realized, 2022 production a fire to this market.” would be up 3.1 billion pounds or 1.4 percent from U.S. soybean supply and use changes included 2021. higher beginning stocks and lower production,
MARKETING
Soybeans take a jump at week’s end NYSTROM, from pg. 19 petitive September forward with Brazil, and we’ll have to watch how Argentina works through the low water problems. There’s a lot of volatility left in the market, so don’t fall asleep at the wheel. We aren’t out of the woods on solving the tight carryout situation, but if weather cooperates, we may take a step closer. We’ll continue to look for wide daily ranges with November soybeans in a $13-$14 range. November soybeans jumped 28.25 cents higher for the week at $13.65, January soybeans were up 28
cents at $13.69.25, and the November 2022 contract was 1.5 cents lower at $12.56.75 per bushel. Nystrom’s notes: Contract changes for the week as of the close on Aug. 13 (September contracts): Chicago wheat was 43.25 cents higher at $7.62.24, Kansas City surged 36.5 cents higher at $7.42.25, Minneapolis was 28 cents higher at $9.44.25 and the December Minneapolis was up 26.25 cents at $9.29.5 per bushel. All three wheats set new contract highs late in the week as world production declines and demand stays strong. v
crush, and exports. Beginning stocks were raised on lower 2020-21 crush and exports. Soybean production was forecast at 4.34 billion bushels, down 66 million on lower yields, but up 5 percent from 2020. Harvested area was forecast at 86.7 million acres, unchanged from July. The soybean yield forecast of 50 bushels per acre was reduced 0.8 bushels from last month and 0.2 bushels from last year. Soybean supplies were projected at 4.5 billion bushels, down 3 percent from last year. Soybean crush was reduced 20 million bushels on a lower domestic soybean meal disappearance forecast which is reduced in line with the prior year, and lower soybean meal exports. n USDA’s latest Crop Progress report showed 95 percent of U.S. corn was silking, as of the week ending Aug.8. Fifty-six percent was at the dough stage, up from 38 percent the previous week, even with a year ago, and 5 percent ahead of the average. The crop shows 64 percent rated good to excellent, up 2 percent from the previous week, but 7 percent below a year ago. Looking to soybeans, 91 percent were blooming. Seventy-two percent were setting pods, up from 58 percent the previous week, 1 percent below of a year ago, but 4 percent ahead of the five-year average. Sixty percent were rated good to excellent, unchanged from the previous week, but 14 percent below a year ago. Getting back to the heat out west, the Aug. 6 Dairy and Food Market Analyst reported, “California’s water board voted to end water diversions from the Sacramento-San Joaquin Delta watershed. The official shutoff will occur after Aug. 15. After that happens, many farmers will not be able to irrigate.” The Analyst says the water board attempted a similar type of measure in 2015, but was ultimately blocked after a judge found the board failed to provide “some form of public hearing” to challenge its findings. The water board believes this week’s decision is “on very firm legal footing,” according to the Analyst, but “lawsuits and a judge will ultimately decide if that is in fact the case.” The expected lawsuits have the potential to at least temporarily prevent the water shutdown, the Analyst says. “At the moment, there are many crops that are planted and need water to mature, including tomatoes and corn silage. This decision may also end up preventing a final cutting of affected hay.” Bottom line are higher feed costs for dairy farmers, the Analyst warned. In the week ending July 31, 58,500 dairy cows were sent to slaughter, up 900 from the previous week, and 6,500 or 12.5 percent above that week a year ago. StoneX stated in its Aug. 6 “Early Morning Update” See MIELKE, pg. 21
