21 minute read
Mielke Market Weekly
SWENSON, from pg. 10
MIELKE MARKET WEEKLY
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By Lee Mielke
See MIELKE, pg. 13
News and information for Minnesota and Northern Iowa dairy producers same spot immediately following a harvest because the plant will not thrive. Becky said their practice is to harvest the bare roots, fertilize with cow manure, and plant a cover crop of mixed annual grasses. Swensons then allow the ground to lie fallow for three years. According to Becky, this provides challenges in managing the land well — yet it also helps with soil health, minimizes erosion and suppresses weeds.
Another challenge they face is proper drainage. Peonies do not like wet roots. “We have to be really careful how we steward those fields. We’ve got some really low spots and peonies don’t like water. They like to stay fairly dry. That is because the root system has two parts to it. Thicker roots, a crown and feeder
This column was written for the marketing week ending April 14.
As reported last week, the U.S. Department of Agriculture raised its milk production estimate for the first time in a while in its latest World Agricultural Supply and Demand Estimates report, citing expected higher dairy cow numbers. Pakistan, and the EU. ports. The USDA says Ukraine’s corn exports will Price forecasts for cheese and butter were raised due to tighter stocks and firm demand. Non-fat dry milk prices were raised fractionally while whey Soybean supply and use changes included increased exports and seed use, and lower ending stocks. Soybean exports were raised 25 million bushels to 2.12 billion. drop to 23 million tons, down 4.5 million from last month’s estimate, while wheat exports were lowered to 19 million tons, down 1 million tons from the previous estimate. prices were lowered. Class milk price projections were also raised. 2022 production and marketings were estimated Soybean ending stocks were projected at 260 million bushels, down 25 million from last month. Soybean oil changes include increased exports and In the week ending April 2, 61,000 dairy cows were sent to slaughter, down 3,200 from the previous week, but 1,000 head or 1.7 percent above a year ago. at 226.3 and 225.3 billion pounds respectively, up lower ending stocks. A lower soybean meal export n 300 million pounds on both. If realized, 2022 production would mirror output in 2021. forecast is offset by slightly higher domestic disappearance. The Good Friday week gave us some startling news from the Bureau of Labor Statistics, which
Cheese is now projected to average $2.15 per The global supply and demand forecasts include reported that inflation hit a 40-year high of 8.5 perpound in 2022, up 12 cents from last month’s esti- lower production, crush, trade, and ending stocks. cent, as fuel and food prices skyrocket. mate, and 47.5 cents above the 2021 average. Butter was projected at $2.64 per pound, up 6.5 cents from a month ago and 90.75 cents above 2021. Global soybean production was reduced 3.1 million tons to 350.7 million on lower crops for Brazil and Paraguay. The U.N. Food and Agriculture Organization’s food price index hit record levels for three months in a row, according to Chicago-based StoneX Dairy
Nonfat dry milk was projected at $1.745 per Estimates for Ukraine’s corn and wheat exports pound, up a half-cent from last month’s estimate were reduced, citing the shutdown of Black Sea and 47.6 cents above the 2021 average. Whey is projected to average 69 cents per pound, Swensons enjoy showing fields to publicdown 2 cents from last month’s estimate but 11.6 cents above the 2021 average. roots. If that crown stays consistently wet in the soil, The 2022 Class III milk price was projected to average $22.75 per hundredweight, up $1.10 from it’ll rot. It’s called crown rot and the plant will die,” she explained. what was expected a month ago, and $5.67 above The only day the Swensons water is the day they the 2021 average of $17.08. plant bare roots. Becky said that by keeping the root The Class IV average was projected at $24.05, up 35 cents from a month ago, and $7.96 above the 2021 average of $16.09. dry, it causes the root system to send out feeder roots very quickly which helps with plant vigor and disease resistance because of the fast growth. The WASDE stated Russia’s recent military action in Ukraine significantly increased the uncertainty of agricultural supply and demand conditions in the region and globally. Swenson Gardens invites the public to come and walk through the peony fields when they are in full bloom during the month of June. “We just love sharing peonies with people! Come and enjoy the peonies!” Becky offered. Field days are free. This month’s corn outlook is for offsetting changes to feed and residual use and corn used for ethanol production, with unchanged ending stocks. Feed and residual use was lowered 25 million bushels to You can find out more about Swenson Gardens on their website, www.swensongardens.com, as well as social media platforms like Facebook and Instagram.v 5.625 billion. Corn used to produce ethanol was raised 25 million bushels. Ending stocks were unchanged at 1.44 billion Schauer has added tulips to offerings bushels. The season-average farm price was raised 15 cents to $5.80 per bushel based on observed prices to date. Global coarse grain production was forecast 2.7 million tons higher to 1.5 billion. This month’s foreign coarse grain outlook is for higher production, reduced trade, and larger ending stocks relative to last month. Foreign corn production was forecast higher with increases for Brazil, Indonesia, each year to help boost nutrients and organic matter. Another challenge all specialty cut flower farmers face is making sure there is a market. “(Cut flowers) are a perishable crop. I can only hold them so long and then they need to move.” The future looks bright for Dawn and Milkhouse Flowers. She hopes to add her own hoop house in the future to extend her growing season and she will MILKHOUSE FLOWERS, from pg. 9 continue to add different varieties of flowers. For instance, Dawn said she planted 500 tulip bulbs for the first time last fall which will hopefully allow her to offer flowers earlier in the growing season. For more information on Milkhouse Flowers you can find them online at www.milkhouseflowers.com and Facebook. You can also look for Milkhouse Flowers’ telltale milk bottle logo featuring Dawn’s favorite flower, the zinnia, at your local grocer. v
MIELKE, from pg. 12
Group, up 34 percent from a year ago. The February jump alone was up by 12.6 percent — the largest single month rise ever, says StoneX.
“These are prices as high as seen since the last major food crisis in 2008 and 2011. This is not exactly fresh news; it is an unfolding story. Food price inflation on this scale can lead to famine for lessdeveloped countries, political instability, mass migrations and ultimately commodity market volatility.”
Speaking in the April 18 “Dairy Radio Now” program, broker Dave Kurzawski said food and fuel is the big difference between today and 1981. Core inflation, which is everything but food and fuel, was only up three tenths of one percent, he said, which is the slowest increase since last September.
Kurzawski said overall core inflation, on an annualized basis, is up about 6.5 percent, which is well above the Fed’s desire of 2.5 percent, “So we’re missing the mark. It seems reasonable to see government cut spending, they should have done that a while ago, and it has to raise interest rates and do it with vigor.”
He believes we will see demand issues but offered some hope, stating the crude oil price has pretty much surrendered most, if not all, of its gains since the start of the Russian Ukraine war and there are other markets doing something similar. He admits inflation is not going away overnight, but says “It’s interesting to note that while there was a burst of price increases across many of these markets, courtesy Russia-Ukraine, those markets are starting to calm down on those fears.”
StoneX adds, “Developed nations may not face the brunt of the food insecurity that potentially lay ahead, but higher food prices are on the way. What we don’t know is the myriad of implications this will have on dairy demand. While some products, retail processed cheese, for example, might fare better than others, we believe more and more that the seemingly one-sided supply side story for the past six months will have stiff competition from growing demand side implications going forward.” n
On a brighter note, the April 8 Dairy and Food Market Analyst reports “Foodservice sales are hovering near pre-pandemic levels. The latest data from OpenTable shows seated diners down just 0.8 percent from 2019. This is a significant improvement from the more than 20 percent declines in February. Air travel also remains on an upward trend. The latest data from the Transportation Security Administration shows air travel was down just 9.5 percent from pre-pandemic levels, which was the best performance so far in 2022”
One other bit of good news the Analyst offered concerned ports. The Marine Exchange of Southern California reports there were only 27 container ships waiting to berth in Los Angeles and Long Beach on April 8, which was down sharply from the all-time high of 109 on Jan. 9 and comparable to prior-year levels.
n
Most cash dairy prices strengthened in the Good Friday holiday-shortened week. Block cheddar closed April 14 at $2.3735 per pound, up 5.25 cents on the week and 59.25 cents above a year ago.
The barrels finished at $2.44, 7.25 cents higher, 75 cents above a year ago, and an inverted 6.75 cents above the blocks. There were eight sales of block on the week at the Chicago Mercantile Exchange and 12 of barrel.
“Cheese market tones remain in a bullish stronghold,” says Dairy Market News. Midwest sales remain very strong from a myriad of cheese producers. Over 4,000 cheese industry leaders, suppliers, and marketers gathered this week in Milwaukee, Wis. for the annual Cheese Expo.
Hosted by the Wisconsin Cheese Makers Association and the Center for Dairy Research, attendees learned the latest in technology, new products, whey opportunities, product safety, marketing, and annual awards were presented.
StoneX learnings at the event included, “Transport is still far and away one of the biggest issues the dairy industry faces. Export demand is really good, or at least it could be really good if transport was better. While cheese inventories are impressive, there may not be as much overhang in the fresh market as thought, and there is a widespread belief that impressive inflation is here to stay.”
Dairy Market News reports that difficulties remain
See MIELKE, pg. 15
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Analysis shows higher mycotoxin risk
The results from Alltech’s 2021 U.S. harvest analysis revealed that the mycotoxin risk was notably higher for forage harvested in 2021 compared to the previous year.
As dairy producers are now opening their forage bunks and taking 2021 corn out of their silos, the mycotoxin risk has been found to be amplified in the total mixed rations being tested in the Alltech laboratory. Almost 140 samples have been tested since the beginning of January and the results show 100 percent of samples contain mycotoxins, with an average number of 7.5 mycotoxins per sample.
For dairy producers, type-B trichothecenes such as DON and zearalenone are the mycotoxins which can cause the most issues, as synergistic effects can occur between the type-B trichothecenes and zearalenone, and the presence of multiple mycotoxins can lead to additional challenges.
Long periods of drought during the 2021 growing season were compounded by late-season rains close to harvest, presenting significant challenges to the crop quality. Fusarium mycotoxins dominated as levels of type-B trichothecenes — including DON — doubled compared to the numbers seen in 2020. The humid conditions also favored the development of zearalenone, a toxin which can lead to significant fertility problems in livestock.
For more information about Alltech’s mycotoxin management program, visit knowmycotoxins.com.
This article was submitted by Alltech. v
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By DICK HAGEN
The Land Staff Writer Emeritus WINTHROP, Minn. — When asked about the current mood of farmers this spring vs. their attitudes in spring of 2021, AgQuest’s Vince Stool commented, “I think it’s a different optimism. Today we’re in the midst of better commodity prices which helps mitigate higher input costs. This past season, in this immediate area, we were blessed with very good crops. Current commodity markets support some good bottom lines; however, risks are always involved. Farmers are cautiously optimistic … the basic nature of famers every spring. They understand maintaining a profit is their key to existence.”
Founded in 1992, AgQuest specializes in agriculture financing, crop insurance, property and casualty insurance and leasing. They are headquartered in Morgan, Minn.
I visited with Stool at the March 24 Sibley/Nicollet County Corn and Soybean Growers’ annual banquet at United Famers Coop in Winthrop, Minn. Stool is a money management guy with AgQuest. So from me, this logical question: Do you encourage forward pricing when markets suggest it’s the thing to do?
Stool didn’t hesitate, saying, “I know some lenders don’t want to be involved in the marketing option; but I like to educate. I like to make certain our farm clients understand all their tools available so I’m not afraid to encourage them if I know they are at a certain level of profit margin. I use the analogy that when the plate of cookies comes around, just maybe you should take at least one cookie — because the next time it comes around that plate might be empty. I’m not saying sell everything, but I’m also saying don’t sit on your hands and do nothing. It simply boils down to manage your risks.”
So is the very competitive nature of farmers generating that ugly word ‘greed’; or is that inevitably the capitalistic nature of American agriculture?
Stool responded, “You hit the nail partially on the head because of our capitalistic society. That’s some of the freedoms this system gives us. I love the freedoms this country has afforded to so many people … so I want to make certain we don’t throw out the baby with the bath water. And I certainly don’t want to squash capitalism if that comes with the cost of us losing our freedoms. But these freedoms come with some responsibilities too. It’s fair to say the vast majority of agriculture is about sustainability — making certain we are doing something about the next generation too. There are some large farms upwards of 15,000 acres. But if that mega farm is supporting five farm families, then everything is okay to me.”
Stool’s father is an immigrant from Holland. “My parents are both immigrants. My dad came to America in 1953 to evaluate if U.S. agriculture was an opportunity. He didn’t see his homeland providing much future. He was here two years and decided, ‘I think I can make a go of it here in America.’ So he want back home and married his girlfriend and then brought her to America. They started in the Mankato area at Easton (Minn.) Some families in that area sponsored them — including finding a farm residence which led to some crop-share farming. And then in the fall of 1968 they moved to the Winthrop area, bought an operating farm which has now moved into the second generation with my older brother Harry.”
Have you been back to Holland?
“Yes, indeed. One of the gifts from our parents to all of us kids was a gift trip back to Holland. There were 11 of us — eight sisters and three boys. My dad raised crops and had some hogs. When I was real young we had some sheep too. But it was a hog operation then and still is today. I was back there in 1978 when I was 12 years old. Holland is still an independent country; farmers own their property. There is some similarity to Canadian cooperative milking operations; but in general, farmers in Holland today operate in a capitalistic economy.”
So how to you envision the future of American agriculture — especially for the younger ‘wannabe’ guys? “I would say they are prudent,” replied Stool. “Some financial assist from parents or in-laws is certainly helpful. They certainly can access tools to assist them such as various young farmer programs; or beginning farmers programs; even crop insurance packages such as offered through AgQuest here at Winthrop; and there’s a wide plethora of lending agencies out there also. And thankfully, here in America, there are multiple generations to support the next generation coming on.”
“As I look around, I don’t view any successful farmer today who hasn’t made it without some help of some kind. We can be very sensitive to subsidies and government assistance; but when you boil it down it often amounts to personal assistance. Even my dad, who came to America with $250 in his pocket, still needed some help. There’s nary any farmer today who didn’t have some other outside help that assisted in getting started.”
So what guide stones enabled your father to come here and carve out a new career as an American farmer?
Stool paused slightly, then commented, “Dad ultimately let the economics tell him what to do. He also had a deep faith and I’m certain he took his prayers to God; because he once told me, ‘Son, the Lord will open doors and the Lord will close doors.’ And the door was open when he and my mother moved to Winthrop. But there was also a great community in the Easton area which supported my parents when they originally settled in that area … taught them the ropes as to ‘this is how you do this in America.’”
“My mom and dad were driven by a very strong ethical foundation and a strong faith in God. Their premise: just do the right thing, even when it may not be the most popular, good things will come. Plus my dad had a strong work ethic. The times my dad literally broke his back doing the manual labor to make himself successful, provide for his family, and grow food for the other people of this world; that has spilled over to every one of his children today and we too are most grateful.” v
www.TheLandOnline.com Farmers asked to participate in survey
There is much discussion and anecdotes about farmers who no-till and plant cover crops getting into the field faster than neighbors waiting for a compacted area to dry out. In a new research project, University of Minnesota Extension is trying to address that question with field studies exploring how row crop management systems change soil response to rain, and farmer access to fields after rain.
Extension will be monitoring pairs of farms using contrasting management for soil structure and moisture for two growing seasons. The project will also look at how field workability impacts farmers’ quality of life and stress levels.
While gathering field data from cooperator farms and the Southern Research and Outreach Center, Extension is also looking to gather information from Minnesota farmers. Any crop farmer in Minnesota is invited to participate in the farmer survey. This survey will collect information including farm characteristics, how farming practices impact workable field days, and the impact this has on farmer stress and overall quality of life.
The survey should take no longer than 10 minutes to complete and can be completed online at https://z. umn.edu/FieldworkSurvey. Prior to beginning the survey, all respondents will be asked to sign a document, consenting to participation in the research study.
Participation in the survey is completely voluntary and individual data gathered will be kept private. In any sort of report we might publish, we will not include any information that will make it possible to identify an individual subject. Research records will be stored securely and only researchers will have access to the records.
Questions about the survey can be directed to Anna Cates at catesa@umn.edu or (612) 625-3135.
This article was submitted by University of Minnesota Extension. v
MIELKE, from pg. 13
among staffing and, more particularly, hauling sectors. Stunted production rates at some plants has made milk accessible, but “It’s a mixed bag according to cheese plant managers. Milk is more balanced, and some handlers are asking them to release contracted milk loads in order to fulfill other cheese and bottling plants’ needs. Still, more discounts are being reported than Class prices.”
Demand for cheese is steady in the West across retail and food service markets and international demand remains strong. CME prices have strengthened however cheese is still competitive to international prices. Same old story on port congestion and the shortage of truck drivers causing delays to both export and domestic loads. Milk production is steady to higher throughout the region, leaving supplies available for cheesemakers to run busy schedules and they are, with the exception of those still dealing with labor shortages, according to Dairy Market News. n
Cash butter dropped to $2.775 per pound on April 12, and back-tracked to an April 14 close at $2.755. This is down 2.75 cents on the week and 90.5 cents above a year ago, with five sales posted for the week.
Central butter producers report sales were boosted the previous week and into the weekend for last-minute orders ahead of the spring holidays. The emphasis now is on fall demand and export interests. As cream remains available, churning remains active despite continued staffing shortages. Bulk butter is tight, says Dairy Market News, and remains at a premium. Butter market tones are firm, with CME prices in a newfound range in the mid to high $2.70s.
Cream demand is strengthening in the West as cream cheese and ice cream producers increase production in preparation for warmer weather. Cream is available. Demand for butter is steady in food service markets, while retail demand has declined. Strong export demand is present, as U.S.-produced butter is being sold at a discount compared to international product. International demand is strong but port congestion is preventing greater volume. Bulk butter inventories are available, though unsalted inventories remain tighter than salted. Contacts report that some purchasers in other regions are purchasing butter from the West to meet current demand. Butter output is steady to higher as butter makers are running busy schedules to work through available supplies of cream.
Grade A nonfat dry milk closed April 14 at $1.8225 per pound, unchanged on the week, but 60.75 cents above a year ago. Five sales were reported on the week.
Dry whey held all week at 63.5 cents per pound. This is 13 cents below a year ago, with two sales reported on the week at the CME. n
Fluid milk sales continue to take a beating. USDA’s latest data shows February sales of packaged fluid products at 3.5 billion pounds, down 3 percent from February 2021.
Conventional product sales totaled 3.3 billion pounds, down 3 percent from a year ago. Organic products, at 225 million pounds, were down 3.9 percent, and represented 6.5 percent of total sales for the month.
Whole milk sales totaled 1.2 billion pounds, off 0.9 percent from a year ago, down 0.7 percent year-to-date, and represented 33.4 percent of total milk sales in the two months.
Skim milk sales, at 188 million pounds, were down 6.9 percent from a year ago and down 7.7 percent year-todate.
Total packaged fluid sales for the first two months of 2022 amounted to 7.3 billion pounds, down 2.3 percent from 2021. Conventional product sales totaled 6.8 billion pounds, down 2.1 percent. Organic products, at 471 million, were down 4.7 percent and represented 6.5 percent of total milk sales for the period.
The figures represent consumption in Federal milk marketing order areas, which account for approximately 92 percent of total fluid milk sales in the United States.
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
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