Mielke Market Weekly

MIELKE MARKET WEEKLY

By Lee Mielke

Demand for some retail and food service cheesemakers has eased somewhat in recent weeks. Contacts were not overly concerned because it gives them time to catch up on back orders. Some opine that cheese market tones are on “shaky ground,” citing the block-barrel price gap being atypically large. See MIELKE, pg. 15

This column was written for the marketing week ending Nov. 24.

I hope you had a blessed Thanksgiving. One of my frequent prayers is “Lord, grace me with an attitude of gratitude.” We all have had our share of trials and challenges the last News and information for Minnesota and Northern Iowa dairy producers two years, but Thanksgiving must remain a part of our psyche. before during the month of October. month in a row. Prior to September, that hadn’t hap-

This year’s feast was an expensive The “other” cheese category slipped to pened since June 2019. one however, as costs were up about 14 584.2 million pounds. This is down 7.7 mil- The Oct. 31 butter inventory fell to 281.5 million percent according to National Farm lion pounds or 1.3 percent from September, pounds, down 42.9 million or 13.2 percent from Bureau. Dairy economist Bill Brooks, but was 19.1 million or 3.4 percent above a September and is 18.2 million or 6.1 percent below with Missouri-based Stoneheart Consulting, blamed year ago. a year ago. The September count was revised down the turkey in the Nov. 29 “Dairy Radio Now” broadcast. Costs were up some 24 percent from a year ago, he said, and pie crust was next — as wheat prices shot higher due to production shortfalls. Dairy product costs were up slightly, Brooks said, The total cheese inventory stood at 1.45 billion pounds, down 6.6 million pounds or 0.5 percent from September, but a whopping 109.9 million or 8.2 percent above October 2020. 5.7 million pounds from last month’s data. U.S. butter production was down 1.7 percent in August and down 4.9 percent in September, as milk was diverted from the churn to the vat. but weren’t leading the charge, and still provided a n lot of value to the food budget. Cash dairy prices at the Chicago Mercantile

Brooks expects food inflation to continue “for a Exchange didn’t see a lot of change in the shortened while,” due to production shortfalls and transporta- Thanksgiving holiday week. There wasn’t a lot for tion issues — which includes energy costs. “We’ve traders to feed on in the three days of trading, other all seen it at the gas pump. Energy costs affect than Monday’s Cold Storage report. everything that we do,” Brooks said. After gaining 27.25 cents in the previous two

Dairy stocks are well supplied; and while butter weeks, the 40-pound cheddar blocks held steady at exports have helped support domestic prices (as $1.8575 per pound. This is unchanged in the three international prices are well above ours), Brooks days of trading and 17.75 cents above a year ago. says the increased cheese output we have seen The 500-pound barrels closed Nov. 24 at $1.525, doesn’t bode well for helping milk prices. That spells up a half-cent on the week, 10.25 cents above a year concern for a cost price squeeze on dairy farmers ago, but 33.25 cents below the blocks. Only one car dealing with slightly higher milk prices vs. rapidly of barrel was sold on the week. increasing input costs going into 2022. Cheese plant managers reported variant milk n availability in their respective areas, according to

The October Milk Production report lit a short- Dairy Market News. Some said they received no dislived fire under cheese prices the Thursday and counted milk offers ahead of the holiday, while othFriday before Thanksgiving; but this week’s October ers saw loads from Class to $2 under early in the Cold Storage report pretty much put the fire out. week. Managers had to process the extra milk, American-type cheese stocks climbed to 845.6 million pounds. This is up 1.5 million pounds or 0.2 working with limited staff through the holiday weekend. percent from September, and a hefty 89.4 million Demand for some retail and food service cheesepounds or 11.8 percent above those a year ago. makers has eased somewhat in recent weeks.

HighGround Dairy says American stocks hit their Contacts were not overly concerned because it gives highest point in 2021, which has never happened Looking back, milk output in August was up just 0.6 percent while cheese output was up 4.4 percent. September milk was unchanged while cheese output was up 3.3 percent. HighGround Dairy concludes, “Until shipping lanes open up for more expanded access to export; and more important, labor challenges improve to allow converting facilities to maximize their output, expect range bound cheese markets through the end of 2021 and potentially spilling over to the first few months of 2022.” The story was a little more encouraging on butter as stocks fell for the fourth consecutive month and remained below those a year ago for the second

IDF launches 15th edition of Animal Health Report

The International Dairy Federation recently released its 15th edition of the Animal Health Report 2021 which is available to download for free on the IDF website.

The yearly edition is dedicated to animal health and welfare and illustrates the importance of adequate animal care of dairy animals for sustainable production. The 15th edition will dive into key topics such as the power of the welfare language, cooling dairy cattle and providing appropriate shelter, indicators for mastitis and udder health, biosecurity and milk quality.

This edition of the Animal Health Report is also a reminder that dairy production looks very different across our global member countries, and just like the challenge of feeding our growing world population, there is no one size fits all dairy production system. The report will pinpoint countries from various continents like Nigeria, New Zealand, Chile, Israel, as well as across the EU, and what we can learn from their solutions to track mastitis and milk quality, biosecurity, disease detection and antimicrobial use and resistance. There is also a special chapter on antimicrobial use in animals by the OIE and another one of the SDGs and animal welfare.

The report is now available to download from the IDF website: https://fil-idf.org/publications/.

This article was submitted by the International Dairy Federation. v

MIELKE, from pg. 14

them time to catch up on back orders. Some opine that cheese market tones are on “shaky ground,” citing the block-barrel price gap being atypically large. They also contend that producers are inclined to offer loads at lower prices due to the increasing costs of transport.

Demand for cheese at retail and food service remains strong in the West. Cheese prices are favorable to international purchasers who continue to look to the United States to meet current market demand. The ongoing truck driver shortage in the region was causing delays, while export loads were facing further delays due to on-going port congestion.

Strong international demand and tight spot availability for blocks have reportedly worked to push block prices higher. Contrary to what the Cold Storage report showed nationally, Western cheese stocks are tight as purchasers continue to gobble up loads to meet increased holiday demand. Cheese producers were utilizing available milk supplies to run busy schedules, though some were running below capacity due to short staffing.

Thankfully, ocean freight rates are declining, according to the Nov. 19 Dairy and Food Market Analyst, and at the lowest level since August due to slowing export volumes out of China. n

Spot butter backed down from its $2 per pound plus level in the shortened week, closing Nov. 24 at $1.99. This is down 5.75 cents on the short week, but 63 cents above a year ago. There were three sales reported for the week.

Butter plant managers were securing cream at holiday level prices early in the week as questions arose as to whether cream would be available. Contacts said some plants would be near capacity heading into the weekend so churns may be busier than expected into the following week. Demand tones are “steadily hearty” says Dairy Market News, and contacts expect that to remain into mid-December, if not further.

Cream availability was mixed in the West, though contacts said enough is available to meet current needs. Demand for cream is strong throughout the region, though some loads were reportedly facing delays due to the continuing shortage of truck drivers. Retail butter demand is trending upwards as consumers prepare for the holidays. Food service demand is steady and contacts report strong purchasing for export. Spot butter availability is tight. Delayed deliveries of production supplies and labor shortages are causing some butter makers to run below capacity, according to Dairy Market News.

Grade A nonfat dry milk closed Nov. 24 at $1.5625 per pound. This is up three-quarter cents on the week and 46.75 cents above a year ago, with seven sales reported.

Weaker powder output from all three key global exporting regions coupled with persistent demand from many parts of the world is what is supporting

See MIELKE, pg. 16

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MIELKE, from pg. 15

prices, according to HighGround Dairy’s analysis.

CME dry whey held at 70 cents per pound for five consecutive sessions, 27 cents above Thanksgiving week a year ago, with only one sale reported on the week.

n

In trade news, China’s October import volumes were mixed and mostly below a year ago, according to HighGround Dairy, although China forward purchased its needs earlier.

Whole milk powder imports totaled 71.9 million pounds, down 10.4 percent from a year ago, though year-to-date imports are up 38.9 percent. HighGround Dairy attributes the smaller purchase to less availability from New Zealand.

Skim milk powder totaled 72 million pounds, up 28.4 percent from a year ago, with year-to-date up 33.7 percent. HighGround Dairy says the largest increase was from Sweden, followed by France and the United States.

Whey product imports amounted to 110.1 million pounds, down 9.7 percent from 2020, but year-todate imports are up 25.1 percent.

HighGround Dairy says the data is measured against a strong prior year with volumes still well above the prior five-year average for this time of year. The United States held the strongest market share at 47 percent.

Butter imports totaled 11.7 million pounds, up 18.7 percent from a year ago, with year-to-date up 21.7 percent. Cheese imports, at 17.5 million pounds, were down 5.3 percent, but year-to-date is up 38.3 percent.

n

Dairy cow culling fell from the previous month and was below a year ago in October, according to the U.S. Department of Agriculture’s latest Livestock Slaughter report. The data shows an estimated 256,200 head were sent to slaughter under federal inspection in October, down 8,400 from September and 2,800 or 1.1 percent below October 2020. Culling in the 10-month period totaled 2.59 million head, up 32,600 or 1.3 percent from a year ago.

The Washington State Dairy Federation reports 1,200 homes were damaged in border town Sumas and 75 percent of businesses and homes were damaged in Everson. Dairies were completely flooded, livestock was lost, cattle stranded, and workers were unable to reach farms. A local feed plant was left inoperable.

The USDA’s latest Crop Progress report shows 95 percent of U.S. corn is harvested as of the week ending Nov. 21. This is down from 97 percent a year ago, but 3 percent ahead of the five-year average. Soybeans were at 95 percent harvested, down 3 percent from a year ago, and 1 percent behind the fiveyear average.

n

Recovery continues in the Pacific Northwest and lower mainland of British Columbia, Canada where historic flooding took a huge toll on people and animals. The Nov. 19 Dairy and Food Market Analyst reported 75 percent of British Columbia’s milk production was stranded for several days because of the floods, according to the British Columbia Dairy Association.

“The provincial marketing board has been working to return to normal operations, but the flood destroyed infrastructure, including road access between farms and plants,” the Analyst stated. “British Columbian dairy farmers produce about 5.0 million pounds of milk per day. Local officials estimated the dairy cow death toll totaled 2,000 head.”

The Washington State Dairy Federation reports 1,200 homes were damaged in border town Sumas and 75 percent of businesses and homes were damaged in Everson. Dairies were completely flooded, livestock was lost, cattle stranded, and workers were unable to reach farms. A local feed plant was left inoperable.

“Supply chains were further troubled by 15 breaks in the BNSF rail line and conditions are worse in Canada,” says the Federation. “More than 100,000 milking cows, additional dry cows, and young stock were at risk of running short of feed.”

Contributions can sent to the Washington State Dairy Federation, with checks marked “emergency fund.” Mail to P.O. Box 1768, Elma, WA 98541.

Lee Mielke is a syndicated columnist who resides in Everson, Wash. His weekly column is featured in newspapers across the country and he may be reached at lkmielke@juno.com. v

Strong yields keep Link’s customers coming back

COMBINE CLEANING, from pg. 11

our farm shop. And in two weeks we’ll be having a big pancake breakfast feed out here too. Obviously customers are the bread and butter of my dealership. So this is our thank you to them. Wives are welcome too and that’s why ‘seed talk’ is minimized. But I’m also aware some farm wives are tuning in to this genetic and biodiversity chatter too. Perhaps they too want to better understand the turmoil of this exciting profession called farming. And we are grateful indeed,” sums up Brad.

And despite the drought-related stress conditions of this 2021 growing season, is Brad satisfied — yes even surprised with his yields? “Tremendously pleased how the Lord has favored us again this year. We had some timely rains and lots of growing degree days this season. I feel confident this was my best year ever with soybeans … and maybe so with our corn yields too. I am humbled … and blessed indeed.”

For Brad Link, that means lots of 70-plus bushel soybeans and even 250-plus yields on some corn. “We just yesterday hauled 10,000 bushels of seed beans to Finish Line Seeds (formerly Ziller Seeds) in Bird Island. Weights on corn have been amazing … lots of 60-plus pound corn. Sometimes when you market a bin, low test weight knocks you with fewer bushels than expected. Not so this year.”

So does Brad now get 100 percent of his customer’s total seed needs? One would think so in view of his tremendous services. But he’s also a realist. ”It’s only human nature to try a few bushels of Brand X. Well okay then, 90 percent with us and 10 percent something else. We keep growing and that tells me field performance is still the determiner.”

Brad starts seed deliveries in March — either bagged or boxed (50 units per box). He and his wife Julie start seed treatments also in March. And bulk deliveries are definitely the trend with soybeans.

Brad turned 50 a few years back. “I don’t even want to slow down,” he claimed. “We’re having a good time. Despite the many political shenanigans in America these days, I’m a firm believer in the future of the U.S.A. And though not a doctor, a few words with God each day is always good medicine too!” v