THE LAND — AUGUST 20/AUGUST 27, 2021
www.thelandonline.com — “Where Farm and Family Meet”
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Covid is once again impacting dairy product demand This column was written for the maroutput per cow was down 15 pounds. keting week ending Aug. 20. Michigan was up 4.3 percent on 17,000 more cows and a 10-pound gain per cow. U.S. milk output was somewhat held in Minnesota was up 4.2 percent on 17,000 check in July by heat, humidity and more cows and five pounds more per cow. drought — especially in the west. The New Mexico was down 2.3 percent on a U.S. Department of Agriculture’s prelimi15-pound loss per cow and 5,000 fewer nary data pegs July output at 19.14 bilcows. lion pounds. This is up 1 percent from June, and just 2 percent above July 2020; New York was up 2.8 percent, thanks to MIELKE MARKET though it is the 14th consecutive month a 45-pound gain per cow and 4,000 more WEEKLY to top year ago output. The 24-state total cows. Oregon was up 0.9 percent on 2,000 hit 18.3 billion pounds, up 2.1 percent. more cows; but output per cow was down By Lee Mielke 10 pounds. Pennsylvania was down Revisions lowered June’s 50-state 1.2 percent on a loss of 7,000 cows estimate by 1 million pounds from and a five-pound drop per cow. last month’s report to 19.95 billion pounds, up 2.9 percent from 2020. South Dakota unmistakably had The report wasn’t expected to excite traders either the biggest gain, up 17 percent, on 21,000 more way. cows and a 25-pound increase per cow. Texas had the next biggest gain, up 7.2 percent, driven by Interestingly, July cow numbers totaled 9.50 million head, down 3,000 from June, the second month 35,000 more cows and a 25-pound gain per cow. in a row they fell from the previous month; but were Vermont was up 1.4 percent on a 55-pound gain 128,000 above a year ago. June cow numbers were per cow; but cow numbers were down 2,000. revised down 5,000 head. Washington State had the biggest decline of the six July output per cow averaged 2,015 pounds, up 14 states showing a loss, down 6.7 percent, as soaring temperatures put stress on cows and farmers alike. pounds or 0.7 percent from 2020. Output per cow was down 85 pounds and cow numCalifornia cows put 0.7 percent less milk in the bers were down 8,000 head. tank in July as hot weather dropped output per cow Dairy cow culling remained strong in July and by 15 pounds. Cow numbers mirrored those a year again topped that of a year ago as margins remain ago. Wisconsin was up 4.6 percent on a 60-pound tight. The latest Livestock Slaughter report shows gain per cow and 21,000 more cows. an estimated 247,900 head were sent to slaughter Idaho was up 0.8 percent on 9,000 more cows; but under federal inspection, up 10,400 from June and
MARKETING
Bad biofuel news sinks soybeans NYSTROM, from pg. 18 year which would limit moisture. Argentina is battling lower river levels which are cutting loading levels by at least 25 percent. The Parana River is at its lowest in 77 years and the Argentine government has a 180-day water emergency in place. Brazil will begin soybean planting in about a month with Argentina following in October. Safras & Mercado estimates Brazil will produce 147.4 mmt of soybeans in 2022 compared to the USDA estimate of 144 mmt. The Rosario Grain Exchange expects Argentina’s 2021-22 soybean acres at 16.4 million hectares to be the lowest since 2006. Their Argentine 2021-22 soybean production is estimated at 49 mmt vs. USDA’s latest 52 mmt projection. Outlook: Soybeans eased higher on continued daily export sales announcements until the big riskoff day late in the week that was sparked by bearish macro action, i.e., weak energies and strong dollar, plus a better outlook for rain. The report of the lower recommendation for biofuel blending was the final touch to a weekly key reversal lower in November soybeans. Crude oil posted its longest losing streak since 2019 with seven consecutive lower closes as of
Aug. 20. November soybeans closed 74.25 cents lower for the week at $12.90.75 per bushel, its first close below $13.00 since late June. The January contract dropped 73.5 cents to $12.95.75 and November 2022 soybeans were down 30.25 cents at $12.26.5 per bushel. How the weather pattern affects the final touches on the soybean crop in the East vs. West yield fight is an unknown as we head into the end of the month. There are many years when we don’t have much confidence in soybean yield estimates until the combine rolls. For the now, a soybean yield of around 50 bu./ acre seems to be the minimum for many traders. Seasonally, November soybeans usually erode vs. the January contract through late September, i.e., more of a carry. We broke technical support this week and we’ll need something bullish for all to recover. Nystrom’s notes: Contract changes for the week as of the close on Aug. 20 (September contracts): Chicago wheat slumped 48 cents to $7.14.25, Kansas City fell 40.25 cents to $7.02, and Minneapolis lost 25.75 cents to $9.18.5 per bushel. v
14,200 or 6.1 percent above July 2020. Culling in the first seven month of 2021 totaled 1.81 million, down 14,900 or 0.8 percent from the same period a year ago. In the week ending Aug. 7, 59,500 dairy cows were sent to slaughter, up 1,000 from the previous week, and 6,600 or 12.5 percent above that week a year ago. n The USDA announced details of the Pandemic Market Volatility Assistance Program to help dairy producers. USDA will provide $350 million in payments to farmers who received a lower value for their products due to market abnormalities caused by the pandemic. The assistance is part of a larger package including improvements to the Dairy Margin Coverage safety net which will update the feed cost formula to better reflect actual costs for high quality alfalfa. The change will be retroactive to January 2020 and is expected to provide additional retroactive payments of about $100 million for 2020 and 2021. PMVA payments will reimburse qualified farmers for 80 percent of the revenue difference per month based on an annual production of up to 5 million pounds of milk marketed and on sales from July through December 2020. The payment rate will vary by region based on the actual losses on pooled milk related to price volatility and be made through independent handlers and cooperatives. Speaking in the Aug. 23 “Dairy Radio Now” program, HighGround Dairy’s Lucas Fuess said while details have not been finalized, the program was clearly designed to focus on smaller dairies. He said he doesn’t see it significantly impacting markets; but will likely boost milk output the rest of 2021 and into 2022. The Biden Administration also announced a reevaluation of the Thrifty Food Plan used to calculate Supplemental Nutrition Assistance Program benefits. The average SNAP benefit, excluding additional funds provided as part of pandemic relief, will increase 25 percent for Fiscal Year 2022 beginning Oct. 1. The Aug. 17 Daily Dairy Report says the increase in benefits could mean an additional $2 billion in dairy products purchased with SNAP funds. The increase provides each of the 42 million recipients an additional $1.19 per day. Dairy producers can surely use the help. Dairy margins were unchanged in the first half of August as increases in both milk prices and feed costs were largely offsetting since the end of July, according to the latest Margin Watch from Chicago-based Commodity and Ingredient Hedging LLC. Strength in cash cheese prices were supportive of Chicago Mercantile Exchange Class III futures which bounced about $1.50 per cwt. from recent lows, the See MIELKE, pg. 20