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Mielke Market Weekly
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PERFORMANCE
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NOTES TO THE COOLAIR
NCF FANS
Freudenthal MANUFACTURING
REMODELING, EXPANSION OR REPLACEMENT
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MIELKE MARKET WEEKLY
By Lee Mielke
See MIELKE, pg. 14 HIGH COMFORT MAT
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This column was written for the marketing week ending May 13.
The U.S. Department of Agriculture raised its 2022 milk production estimate for the second month in a row in its World Agricultural Supply and Demand Estimates report — citing News and information for Minnesota and Northern Iowa dairy producers higher milk cow inventories more than offsetting slower growth in milk per be driven by gains in milk per cow, says the per pound. cow. It also gave us our first view of 2023 projections. WASDE, with the milk cow herd expected to average close to 2022 levels. Butter was projected at $2.65 per pound for 2022, up a penny from a month ago, and compares to 2022 production and marketings were Price forecasts for 2022 cheese and butter $1.7325 in 2021. The 2023 average was estimated at estimated at 226.7 and 225.6 billion were raised from the previous month, based $2.35. pounds respectively, up 400 million pounds on production and 300 million on marketings. If realized, output would be up 400 million pounds or 0.2 percent from 2021. on tighter stocks and firm demand. Non-fat dry milk prices were raised fractionally while whey prices were lowered, as U.S. prices are expected to become competitive with international prices. Nonfat dry milk is projected to average $1.715 per pound for 2022 and $1.58 for 2023. Dry whey was projected to average 65.5 cents per pound in 2022 and 52 cents per pound in 2023. 2023 production and marketings were estimated at 229.5 and 228.4 billion pounds respectively. If realized, 2023 production would be up 2.8 billion The 2022 cheese price average was projected at $2.175 per pound, up 2.5 cents from last month’s estimate, and compares to the 2021 average of The 2022 Class III milk price average is projected at $22.75 per hundredweight, unchanged from a pounds or 1.2 percent from 2022. The increase will $1.6755. The 2023 average was estimated at $2.04
MIELKE, from pg. 13
month ago, and compares to $17.08 in 2021, and was estimated to average $20.50 in 2023.
The Class IV is expected to average $23.80 in 2022, down 25 cents from a month ago, and compares to $16.09 in 2021. The 2023 average is at $21.40.
The U.S. corn crop is projected at 14.5 billion bushels, down 4.3 percent from last year. The yield is projected at 177 bushels per acre, four bushels below the weather-adjusted trend presented at USDA’s Agricultural Outlook Forum in February.
Beginning stocks are up relative to a year ago, but total corn supplies are forecast to decline 2.7 percent to 15.9 billion bushels. Total corn use was forecast to fall 2.5 percent on declines in domestic use and exports. Food, seed, and industrial use is virtually unchanged at 6.8 billion bushels. Corn used for ethanol was unchanged relative to a year ago on expectations of flat motor gasoline consumption.
Corn feed and residual use is down 4.9 percent from a year ago, reflecting a smaller crop, higher expected season-average farm prices received by producers, and a decline in grain consuming animals. Corn exports are forecast to decline 4 percent “as lower supplies and robust domestic demand limit prospects,” says the WASDE.
The soybean outlook is for higher supplies, crush, exports, and ending stocks. The soybean crop is projected to hit a record 4.64 billion bushels, up 5 percent from last year’s crop, mainly on higher harvested area. Soybean supplies are projected at 4.89 billion bushels, up 4 percent. Total oilseed production was projected at 136.6 million tons, up 6.1 million from a year ago, mainly on higher soybean production. Domestic soybean meal disappearance is forecast to increase 2 percent with low soybean meal prices relative to corn, according to the WASDE.
Soybean meal exports are forecast at 14.4 million short tons, leaving the U.S share of global trade near the prior five-year average. Soybean exports are forecast at 2.2 billion bushels, up 60 million from the revised 2021-22 projection.
The season-average soybean price is forecast at $14.40 per bushel compared with $13.25 last season. Soybean meal prices are forecast down $20 per short ton, to $400, and soybean oil prices are forecast down 5 cents to average 70 cents per pound, as oilseed and product supplies rebound in foreign markets. n
The USDA’s latest Crop Progress report shows that only 22 percent of the U.S. corn crop was in the ground, as of the week ending May 8, up from 14 percent the previous week, but a widening 42 percent behind a year ago and 28 percent behind the most recent five year average. The report says 5 percent of the corn has emerged, down from 18 percent a year ago, and 10 percent behind the five-year average.
Soybean plantings are only at 12 percent — up from 8 percent the previous week, but 27 percent behind a year ago and 12 percent behind the fiveyear average.
Planting is not the only challenge, according to the Daily Dairy Report. “Purdue University reported that 26 percent of farmers surveyed were having difficulty purchasing fertilizer and 30 percent were having trouble buying herbicides.”
Dairy cow culling has slowed in the United States, with high milk prices providing the incentive. In the week ending April 30, 51,600 dairy cows were sent to slaughter, down 4,800 head from the previous week, and 4,100 or 7.4 percent below a year ago. n
Chicago Mercantile Exchange block cheddar sunk to $2.2625 per pound on May 10 (the lowest since March 31), but rallied and closed on Friday the 13th at $2.3075. This is down 4.25 cents on the week, the third week of decline, but 58.25 cents above a year ago.
The barrels rolled to $2.34 per pound on May 10 but finished at $2.395/ This is up 1.5 cents on the week, 66.5 cents above a year ago, and 8.75 cents above the blocks. Sales numbered 14 blocks and only two barrels on the week at the CME.
Spot milk trading was busier at Midwest cheese plants this week, according to Dairy Market News. Class I intakes have slowed as schools begin to curb orders, and seasonal milking patterns are putting more milk into the market. The previous week’s market was particularly busy, and although this week was slower, at midweek, discounts and overages remained in the same ballpark as a week ago. Milk availability growth is timely, as cheese demand, particularly in the upper Midwest, remains somewhat strong. In some cases, loads made available by one customer’s cancellation or slowdown moved to another customer. StoneX informs us that component production has been on the rise thanks to the cool weather lending itself to cattle comfort.
Western contacts report that cheese export demand remains strong. Retail sales reportedly slid lower, but the decrease was countered by an increase in food service demand. Inventories of blocks are becoming more available, as port congestion is causing some exporters to sell loads intended for export. Barrel inventories tightened this week. Milk is available, as cheese producers are running busy schedules in the region but labor shortages and delayed deliveries of production supplies continue to cause some plants to run below capacity.
Cash butter dropped to $2.61 per pound on May 10, then reversed direction and headed to a May 13 finish at $2.705. This is up 6.5 cents on the week and 83 cents above a year ago. There were 18 carloads that found new homes on the week.
Food service butter demand remains steady while
See MIELKE, pg. 15
Use care with spring alfalfa termination
FOLEY, Minn. — So far, winter injury issues are not a concern for alfalfa stands throughout the region which had plenty of snowfall through the winter months. For the most part, temperatures have remained mild enough to prevent ice sheeting. The larger concerns will be for stands which are starting to age and thin out due to other issues.
For those stands which are less than adequate (less than 40 stems per square foot), what are the alternative options, or should the stand be terminated? With alternative management, consider the cost and benefits of trying to maintain the stand vs. termination. For those stands where alternatives will not be cost effective to maintain, termination will be the next step.
Spring termination does have its benefits as there is some potential for a late May harvest prior to termination. Alfalfa can provide soil cover to help prevent erosion.
Termination of alfalfa using herbicides is typically done using 2-4-D, dicamba and glyphosate. Check the label of the alfalfa variety for glyphosate resistant traits. If you planted glyphosate-resistant alfalfa, glyphosate application will not help with termination. Also, make sure to follow the herbicide label’s plant back restrictions on whatever crop you are planting following termination.
One other benefit is the potential nitrogen that comes from a terminated stand of alfalfa. The amount of nitrogen present can be up to 200 pounds stored in the plant and may be enough to supply corn planted in the first year following termination with its nitrogen requirements. The disadvantage of this route is the decomposition of alfalfa. The release of nitrogen may not be fast enough to supply the entire needs of the corn crop grown in the first year following termination. Scout fields looking for nitrogen deficiencies in the corn and supply extra nitrogen where needed.
Since corn is typically grown following alfalfa stand termination, be aware that delayed planting may be an issue. Planting dates of corn usually happens prior to alfalfa reaching 4 inches tall which is around the height that herbicides are applied. Plant back restrictions need to be followed in this situation and may require a couple of weeks before corn can be planted.
Alfalfa also uses water at a higher level than other crops. Other options such as planting drought-tolerant corn hybrids should be considered in fields with limited in-season moisture.
This article was submitted by Nathan Drewitz, University of Minnesota Extension. v
MIELKE, from pg. 14
retail orders are in a seasonally quieter phase, says Dairy Market News. Plant managers continue to say they are using this time to churn in preparation for fall demand. Cream is less available, regionally. Some plants were looking west for similarly priced loads when compared to previous weeks, but local handlers are slowing offers, as busier churning and ice cream production has begun to thin the pool.
Market tones are uncertain, says Dairy Market News, as global butterfat values have begun to shift lower after a sustained bullish run starting since the summer of 2021.
Western contacts report that cream markets are steady. Cream inventories are available, though ice cream makers are buying cream in anticipation of warmer weather. Contacts report they are running busy schedules, trying to build inventory, but labor shortages and delayed deliveries of production supplies also continues to prevent running at capacity. Retail demand is declining due to the higher prices, while food service demand is steady, according to Dairy Market News.
Grade A nonfat dry milk fell to $1.7225 on May 11 but closed two days later at $1.73, down a penny on the week and 43 cents above a year ago, on six sales.
Dry whey closed May 13 at 53.25 cents per pound. This is down 5.25 cents on the week and 10.75 cents below a year ago, on nine sales reported on the week at the CME.
n
Domestic consumption of cheese and dairy exports in March remained strong, according to StoneX May 6 “Early Morning Update.” Domestic disappearance on cheese in March was 5 percent above year ago and year-to-date was up 4.8 percent.
“American cheese exports have been a driving force in the first quarter and up 44 percent year-to-date,” says StoneX, “while Australia’s exports for March were reported to be up 15.5 percent from last year.”
Speaking in the May 16 “Dairy Radio Now” broadcast, broker Dave Kurzawski said overall U.S. commercial disappearance, on a milk equivalent basis, was down about 0.7 percent in March, led in large part by butter and high value protein powder.
Butter was down 10.7 percent, he said, but with the high prices that butter and cheese are at, “It almost doesn’t matter what the disappearance numbers say, as these are bullish markets — though they do feel like they’re coming off a bit.”
“Many underestimated the ability of the market to go up,” Kurzawski added, “and maybe underestimated inflation, the story that got start in 2021 but probably had too little coverage.” Nerves were triggered as the market started to go higher, he said, “then got really nervous when Putin went into Ukraine and that sent a surge for all commodity prices — including dairy. Our nerves are dulled now. Buyers have calmed down, and may step back a bit from aggressive buying.”
Kurzawski predicted the May 17 Global Dairy Trade auction would be down again, following the 8.5 percent plunge on May 3, and said it’s reminiscent of the large drops in 2015. He warned the GDT may be down another 8-10 percent and while some think the bottom is in, “history will prove otherwise,” he concluded.
Meanwhile, fluid milk sales took another hit. The latest USDA data shows sales of packaged fluid products in March at 3.8 billion pounds, down 3.4 percent from March 2021. Conventional product sales totaled 3.5 billion, down 3.3 percent from a
IDF bulletin on heat treatment of milk
The International Dairy Federation has released a bulletin on heat treatments of milk, which looks at the processing of milk, which is the oldest processing technology in the dairy sector. The publication provides an overview of the different heat treatments applied to milk for direct consumption or before further processing and their verification procedures.
The 33-page publication can also be described as a very accurate global guidance, as it contains information on these treatments — not only in one country but worldwide — as most countries provide legal requirements for heat treatments of products.
Heat treatment is the most widely used processing technology in the dairy sector, which guarantees product safety and longer shelf life, without affecting its nutritional value, quality, and taste. It also serves as a technique to destroy pathogenic bacteria, stressing the importance of food safety. The bulletin also investigates the appropriate types of heat treatment for a specific food.
Furthermore, the shelf life of each product can differ depending on the time and temperature of the heat treatment. Walter Bisig, author of the publication states: “ESL (extended shelf-life) milk is the type of milk most recently introduced to the market. It has a refrigerated shelf-life of 15 to 60 days, depending on raw milk quality, applied ESL technology, type of packaging and packaging system, the extent of post-processing contamination, and the temperature during post-processing, storage, and distribution” The bulletin is available to download at www.idf.org.
Interested parties are invited to take part in a webinar dedicated to the publication, which will be held on June 28. Register for the webinar at https:// us02web.zoom.us/meeting/register/tZElfuGsqzIpEtD96767dcd2YoYfXc5dgmOO.
This article was submitted by the International Dairy Federation. v year ago.
Organic products, at 253 million pounds, were down 4.3 percent and represented 6.7 percent of total sales for the month.
Whole milk sales totaled 1.3 billion pounds, up 1.6 percent from a year ago, up 0.1 percent year-todate, and represented 33.4 percent of total milk sales in the three months.
Skim milk sales, at 205 million pounds, were down 8.5 percent from a year ago and down 8 percent year-to-date.
Total packaged fluid sales for the first three months of 2022 amounted to 11.1 billion pounds, down 2.7 percent from 2021. Conventional product sales totaled 10.4 billion pounds, down 2.5 percent. Organic products, at 724 million, were down 4.6 percent and represented 6.5% 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.
n
In global dairy news, New Zealand-based Fonterra Co-operative revised its 2021-22 forecast Farmgate Milk Price range, from $9.30-$9.90 per kilogram of milk solids, to $9.10-$9.50.
Fonterra CEO Miles Hurrell said the revision was necessary “due to a number of recent events which have resulted in short-term impacts on global demand for dairy products — in particular, the lockdowns in China due to Covid-19, the economic crisis in Sri Lanka, and the Russia-Ukraine conflict.”
“The Russian invasion has upended global food supply chains, raised prices for inputs, energy, and finished food products, and exacerbated nutrition insecurity in countries around the world,” says a joint press release this week following a meeting in the Washington, D.C. offices of the International Dairy Foods Association and leaders of the European Dairy Association.
Lastly, the United States is not the only country calling on Canada to live up to its trade obligations in trade agreements they have signed. You’ll recall the United States has complained about Canada’s application of its dairy tariff rate quotas under the USMCA agreement.
Now New Zealand has initiated dispute proceedings regarding Canada’s tariff rate quotas under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. The Canadian supply management program has come under increasing pressure as the country seeks to be a player in the global dairy marketplace.
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
