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www.thelandonline.comMILKER’S — “Where MESSAGE Farm and Family Meet”
THE LAND — JULY 22/JULY 29, 2022
News and information for Minnesota and Northern Iowa dairy producers MIELKE MARKET WEEKLY
Dairy demand down, eyes are on milk outputs
By Lee Mielke This column was written for the marketing week ending July 22. The U.S. milk deficit appears to have ended. Preliminary data indicates June ended seven months of output trailing that of a year ago, coming in at 18.975 billion pounds, up 0.17 percent from June 2021, first gain since last October, and follows a 0.5 percent drop in May. June output in the top 24 states totaled 18.13 billion pounds, up 0.3 percent. Revisions raised the 50-State May estimate by 40 million pounds to 19.755 billion, 0.5 percent below a year ago, instead of the 0.7 percent originally announced. June cow numbers totaled 9.423 million, up 4,000 from May numbers which were revised up 14,000 head, but were 78,000 head below June 2021. There were 56,000 more cows in the June milking string than on January 31. Cow numbers peaked in May a year ago at 9.507 million, 88,000 more than May of this year.
Output per cow averaged 2,014 pounds, up 20 pounds or 1.0 percent from June 2021. Second Quarter output totaled 57.9 billion pounds, down 0.5 percent from a year ago, with cow numbers at 9.42 million, up 32,000 from first quarter, but 87,000 below a year ago. Eyes are watching milk output carefully as dairy demand slows. The July 15 Dairy and Food Market Analyst warned; Break-even milk prices in California are around $23.50 per cwt, which, while down $1.50 from the 2022 high, is above current August Class III milk futures of around $20.30. n Dairy cow culling under federal inspection totaled 233,000 head in June, according to the USDAs latest Livestock Slaughter report, up 7,800 head from May, but 4,500 or 1.9 percent below June 2021. Culling in the six month period totaled 1.52 million head, down 42,500 or 2.7 percent from a year ago. In the week ending July 9, 49,900 dairy cows were sent to slaughter, down 1,900 head from the previ-
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ous week, and 3,800 or 7.1 percent below a year ago. This week’s Livestock, Dairy, and Poultry Outlook mirrored milk price and production projections in the July 12 World Agricultural Supply and Demand Estimates. It also reported that 2023 milk cow numbers are expected to remain steady at 9.4 million. The forecast for milk per cow is 24,290 pounds, 110 pounds lower than last month’s forecast, but 250 pounds higher than the 2022 forecast. The Outlook also stated the farm-to-retail price spread for beef remains higher than its 12-month average prior to the COVID-19 shutdown. Following 2 years of annual inflation of over 9 percent in 2020 and 2021, retail prices for beef and veal are projected to rise another 6 to 7 percent in 2022. n Meanwhile, the dairy market focus will likely shift back to the milk supply, especially in Europe, says StoneX. Recent EU milk production data continues to disappoint, but dairy products in the region seem available. A credible theory is sellers have been conservative in their volumes of forward sales given the up-trend in prices and the weak milk production. Now that prices are coming down, there is a scramble to sell uncommitted product even if production is still weak. Buyers everywhere seem to be playing coy in this environment, says StoneX. StoneX Dairy Group says the GDT 80 percent butterfat butter price equates to $2.4470 per pound U.S., down 5.2 cents, after losing 25 cents in the last event, and compares to CME butter which closed Friday at $2.9075. GDT Cheddar, at $2.1886, was down 3.8 cents, after gaining 1.5 cents last time, and compares to Friday’s CME block Cheddar at $1.91. GDT skim milk powder averaged $1.6824 per pound, down 16 cents. Whole milk powder averaged $1.7043 per pound, down 9.2 cents. CME Grade A nonfat closed Friday at $1.6850 per pound. Cheese imports totaled 21.2 million pounds, down 34.9 percent and the lowest for the month since 2018, according to HighGround Dairy. HighGround’s Lucas Fuess blamed China’s lockdowns and economic concerns as contributing factors for the downturn in the July 25 Dairy Radio Now broadcast. Speaking of trade; the Dairy and Food Market Analyst reports West Coast port congestion has more than doubled since the contract between the International Longshore and Warehouse Union and the Pacific Maritime Association expired on July 1. On the Wednesday before the labor contract expired, the number of backed-up containerships reached the lowest level since December 2020 of 14 container ships. By Friday, that number had risen See MIELKE, pg. 11
