Mielke Market Weekly

This column was written for the market- session of gain. ing week ending March 4. Traders brought 55.6 million pounds of

Volatility was the word of the day, the product to the market, down from 61.1 week, and the hour, as the war between million on Feb. 15 (the lowest since Sept. Russia and Ukraine rages on — raising 21, 2021), but the average metric ton havoc in every market, not to speak of the price climbed to a record high $5,065 devastation on innocent human life. U.S., the highest since Feb. 14, 2014.

StoneX Dairy Group broker Dave GDT cheddar led the way, up 10.9 perKurzawski said in the March 7 “Dairy MIELKE MARKET cent, following a 3.5 percent rise on Feb. Radio Now” broadcast that markets are WEEKLY 15. Butter followed, up 5.9 percent, after currently focusing on the worst-case scenarios and hopefully, calmer heads By Lee Mielke rising 5.1 percent last time. Buttermilk powder was up 5.8 percent and whole MARKETING milk powder was up 5.7 percent after advancing 4.2 percent in the last event. Skim milk powder was up 4.7 percent following a 6 percent jump. Anhydrous milkfat was up 2.1 percent following a 1.2 percent rise, and lactose was up 0.9 percent. will prevail. The U.S. Department of Agriculture announced the February Federal order Class III benchmark milk price at $20.91 per hundredweight. This is up 53 cents from January, $5.16 above February 2021, and the highest Class III price since November 2020. StoneX Dairy Group says the GDT 80 percent butClass III futures as of late morning March 4 had the March contract at $22.38; April, $23.43; May, $23.48; with the peak in June at $23.61 before heading down. terfat butter price equates to $3.1359 per pound U.S., up 17.7 cents, after jumping 14.5 cents on Feb. 15, and compares to Chicago Mercantile Exchange butter which closed March 4 at a real steal of $2.6850. GDT cheddar, at $2.9002, was up 23.3

The Class IV price is a record $24.00 per cwt., up cents after gaining 8.9 cents on Feb. 15, and com91 cents from January, $10.25 above a year ago, and pares to March 4’s CME block cheddar at $2.15. topped the previous record of $23.89 in Aug. 2014. GDT skim milk powder averaged $2.0328 per

“The wheat markets are on fire,” says StoneX and pound, up from $1.9482. Whole milk powder averimpacting other commodities. Milk prices are also aged $2.1578 per pound, up from $2.0424. CME climbing — but they need to, says Kurzawski, in Grade A nonfat dry milk closed March 4 at $1.8725 order for producers to pay the higher feed and fertil- per pound. izer costs ahead. $20 dollar milk would normally portend a response of more milk, he said, “But that’s n not the case right now; and if corn goes to $8 or $9, The Daily Dairy Report’s Sarina Sharp wrote in $22 milk is not going to be enough.” the Feb. 25 Milk Producers Council newsletter, Markets are on edge worldwide and that was evidenced in the March 1 weighted average at the Global Dairy Trade auction. Prices were up 5.1 percent — the biggest boost since the 15 percent pole vault on March 2, 2021, and the fifth consecutive “Global milk output is shrinking and deficits getting bigger. In December, milk production among the world’s five largest dairy exporters fell 1.3 percent below December 2020. That’s the steepest decline in five years — dating back to 2016 when European governments paid dairy producers to pare back pro-

duction. The deficit likely got even bigger in January. Australia and Europe have yet to report January output, but losses accelerated elsewhere.” Meanwhile, the National Milk Producers Federation and the U.S. Dairy Export Council rejected a proposal this week by Global Affairs Canada that “outlines Canadian ‘changes’ to their current scheme for allocating U.S.-Mexico-Canada Agreement dairy tariff-rate-quotas.” Michael Dykes, D.V.M., president and CEO of the International Dairy Foods Association, agrees and called the plan “a nonstarter.” You’ll recall the U.S. Trade Representative announced last month it had won USMCA’s firstever dispute settlement panel by prevailing in its case against Canada regarding how Canada’s USMCA dairy TRQ allocation process violated the agreement. Ambassador Tai noted, “This historic win will help eliminate unjustified trade restrictions on American dairy products and will ensure that the U.S. dairy industry and its workers get the full benefit of the USMCA to market and sell U.S. products to Canadian consumers.” NMPF says this a “test-case for whether or not the USMCA dispute settlement process can provide effective enforcement and deliver genuine compliance with the agreement.” n CME block cheddar closed the first Friday of March at $2.15 per pound, up 20.5 cents on the week (the highest since Nov. 11, 2020) and 41.75 cents above a year ago. The barrels closed at $1.97, which is 7 cents higher and also the highest since Nov. 11, 2020. The barrel price is 46.25 cents above a year ago, and 18 cents below the blocks. The CME saw 10 cars of block trade hands on the week, 16 in the month of February, down from 18 in

See MIELKE, pg. 15

Survey seeks to boost markets for smaller farms

ST. PAUL — If you’re a farmer who sells your food directly to consumers, grocery stores, restaurants, distributors, and others, a Statewide Cooperative Partnership for Local and Regional Markets led by the Minnesota Department of Agriculture and University of Minnesota wants to hear from you this spring.

A recently released survey asks small, mid-sized and emerging farmers to share their experiences operating farms and selling in direct-to-consumer and direct-to-institution markets such as farmers’ markets, U-Pick, CSAs, and schools.

Once collected, data will be analyzed collaboratively by the Partnership’s more than 40 member organizations. Results will help identify market trends and opportunities, support the development of programs and services such as the MDA’s Minnesota Grown program, and strengthen recommendations to the Minnesota Legislature to support historically underrepresented and under-supported farmers, Agriculture Commissioner Thom Petersen said.

“We want to build on the partnerships we have with local and regional markets to help farmers, retailers, public institutions, and consumers in Minnesota,” he said. “This is a real growth opportunity for our ag economy in the coming years, and we need to understand how we can support it.”

According to the 2017 Census of Agriculture, Minnesota has about 3,500 farms that sell directly to consumers, while more than 630 sell directly to retail outlets such as grocery stores, restaurants, schools, and other institutions. These sales generate an estimated $184 million in economic activity each year.

The survey, available now for Minnesota farmers and ranchers involved in direct sales, is designed to report on the nuances of smaller producers and their primary markets that are not captured by the ag census. The Partnership survey takes less than 30 minutes and respondents will be compensated for their time.

To take the survey, go to https://z.umn.edu/statewide-producer-survey

More information is available at https://umn.qualtrics.com/jfe/form/SV_2gXiNaErrvIEwE6

This article was submitted by the Minnesota Department of Agriculture. v

MIELKE, from pg. 14

January. Barrels sales totaled 21 for the week, 39 for all of February, up from 23 in January.

Midwest cheesemakers report demand ranged from steady to very busy as March got underway. Dairy Market News says limited staffing is a recurring problem in meeting customer needs but things are improving. Milk prices remain around Class III to slightly lower. More contacts are saying milk yields are not as ample as they had previously expected in the late winter weeks, which brought milder weather.

Cheese sellers in the west report that retail sales are steady and food service continues to improve as Covid restrictions loosen. Cheese made in the United States continues at a discount to other countries, prompting increased interest from international markets. A shortage of truck drivers and port congestion are still causing delays. Loads of milk and production supplies also continue to face delays due to the ongoing lack of truck drivers and plants continue to report that, combined with labor shortages, they are not able to run at capacity.

Butter hit $2.70 per pound on March 3 but backtracked to a March 4 finish at $2.685. This is up 9.75 cents on the week and 99.5 cents above a year ago, with 27 sales on the week, 69 for the month of February, down from 111 in January.

Dairy Market News says central butter production is busy as cream multiples hold in the low 1.20s. There are setbacks due to employment shortness but plants are churning as close to capacity as possible. A number of contacts see a potential shortness of butter moving into late summer and fall. Butter market tones are mixed near term, but longer term expectations generally fall under the bullish category. “Some regional butter makers are keeping an eye on the Ukrainian situation,” said Dairy Market News, “particularly as to what global milkfat suppliers plan to ship — or not ship — into Russian ports.”

Cream is available in the west, though inventories are tightening and cream demand is steady. Covid restrictions continue to loosen in the West and restauranteurs are increasing butter purchases while retail is mixed. Butter inventories are tight in the region, though some say availability is increasing. Butter producers are running busy schedules but below capacity due to continued labor shortages and delayed deliveries of supplies.

Grade A nonfat dry milk closed March 4 at $1.8725 per pound, up 1.25 cents on the week and 69.5 cents above a year ago. CME sales totaled 14 for the week, 80 for February, up from 60 in January.

Dry whey fell to a March 4 close at 75.75 cents per pound, down 2.25 cents, the lowest since Jan. 6, but still 17.75 cents above a year ago. There were six sales on the week at the CME, 30 in the month of February, up from10 in January. n

The January Dairy Products report is issued Friday afternoon. While U.S. milk output was down 1.6 percent from last year in January, the amount of fat and protein in the milk was very strong, accord-

Cash Grain Markets

corn/change* soybeans/change*

St. Cloud $6.93 +.38 $16.10 +.25 Madison $6.84 +.31 $15.86 -.04 Redwood Falls $6.89 +.34 $15.91 +.11 Fergus Falls $7.06 +.51 $16.11 +.31 Morris $7.01 +.49 $16.11 +.26 Tracy

$7.01 +.47 $15.91 +.16 Average: $6.96 $16.00 Year Ago Average: $5.16 $13.47

Grain prices are effective cash close on March 8. *Cash grain price change represents a two-week period.

Rainfall monitor network seeks volunteers

The State Climatology Office is looking for volunteer rainfall monitors for the Community Collaborative Rain, Hail and Snow Network (CoCoRaHS). The network includes more than 20,000 volunteers nationwide who measure precipitation in their backyards using a standard 4-inch diameter rain gauge and submit reports online. “These volunteers help to verify high rain totals after big events, monitor drought and flooding, make our precipitation maps more accurate and provide needed guidance on Minnesota’s changing climate,” Climatologist Pete Boulay said. “This is also a great educational activity for families with kids and a rewarding hobby for anyone interested in weather or climate.”

Volunteers are particularly needed outside the immediate Twin Cities metro area. Volunteers receive training on how to observe weather trends and submit their precipitation and weather event reports. All training material is available online. They must purchase or provide a standard 4-inch diameter rain gauge (available at discount through CoCoRaHS) and have internet access to submit reports.

To sign up or for more information, visit CoCoRaHS. org or contact Pete Boulay at peter.boulay@state. mn.us. The website includes lesson plans for STEM students and instructional videos for all participants.

This article was submitted by the Minnesota Department of Natural Resources. v ing to StoneX, “putting component adjusted production up 0.6 percent. That means production of dairy products might be a little better than some people expect.”

A higher January All Milk Price offset higher corn and soybean prices to push the January milk feed ratio higher for the fifth month in a row and top the year before for the first time since October 2020. The USDA’s latest Ag Prices report shows the ratio at 2.18, up from 1.98 in December, and compares to 2.00 in Jan. 2021.

The U.S. All Milk Price averaged $24.20 per cwt., up $2.40 from December, and $6.70 above Jan. 2021.

Looking at the cow side of the ledger, the January cull price for beef and dairy combined averaged $71.60 per cwt., up $12.50 from December, $11.90 above Jan. 2021, and dead even with the 2011 base average.

Bill Brooks, dairy economist with Stoneheart Consulting in Dearborn, Mo., says using March 3 settling futures for milk, corn, and soybean meal plus an internal forecast for premium alfalfa hay, the milk margin over dairy feed costs are expected to be $11.67 per cwt. He adds the margin over dairy feed cost will be above the maximum coverage of $9.50 per cwt. every month in 2022, with a range of $10.59 to $12.47 and an average of $11.67.

In the week ending Feb. 19, 67,200 dairy cows were sent to slaughter. Tlhis is down 2,800 from the previous week, but 7,600 head or 12.8 percent above a year ago.

Based on grain futures, the Dairy and Food Market Analyst’s updated calculation of the U.S. average breakeven milk price was increased to just under $21.00 per hundredweight, adding, “In California, where hay is $350 plus per ton, the average breakeven price is more than $22.00. That’s $5.00 to $6.00 higher than two years ago when breakeven prices in the USA were sub-$16.00.”

Dairy producers are now receiving pandemic payments related to Class I milk prices as part of the Pandemic Market Volatility program and the Analyst says, “The payments, which totaled $360 million, were originally scheduled for release in Oct. 2021, but ran into administrative hurdles. Payments were capped to 50,000 hundredweights with the largest checks that we heard about from producers in high Class I utilization areas approaching $100,000.”

The Analyst also reported USDA’s latest data on farm numbers, stating the trend continues to be fewer and larger dairies. “The industry lost 1,794 dairy farms in 2021, a decrease of 5.7 percent from 2020; but the rate of consolidation was slower than in each of the previous three years, which decreased 7.3 percent on average. The average size of an American dairy farm increased to 314 milking cows in 2021, up 15 head from 2020 and up 40 percent (up 90 cows) from five years ago.”

See MIELKE, pg. 16