Mielke Market Weekly

MIELKE, from pg. 20

more than use, corn stocks were lowered 15 million bushels and the season-average corn price was unchanged at $6.70 per bushel.

Soybean production was estimated at 4.28 billion bushels, down 69 million. Harvested area was estimated at 86.3 million acres and yield was estimated at 49.5 bushels per acre, down 0.6 bushels. The soybean export forecast was reduced 55 million bushels to 2 billion, reflecting lower supplies, reduced import demand for China, and a higher export forecast for Brazil. Ending stocks were projected at 210 million bushels, down 10 million from the previous forecast. The season-average soybean price was projected at $14.20 per bushel, up 20 cents. Soybean meal was projected at $425 per short ton, up $15.

Looking backwards, 2022 corn production was estimated at 13.7 billion bushels, down 9 percent from the 2021 estimate, according to the USDA’s Crop Production Summary. The average yield was estimated at 173.3 bushels per acre, 3.4 bushels below the 2021 record high of 176.7 bushels. Area harvested was estimated at 79.2 million acres, down 7 percent from the 2021 estimate.

Soybean production totaled 4.28 billion bushels, down 4 percent from 2021. The average yield per acre was estimated at 49.5 bushels, down 2.2 bushels, and harvested area was up slightly from 2021 to 86.3 million acres.

Dairy cow slaughter in the week ending Dec. 31 totaled 53,475 head, up 2.1 percent above a year ago. Total slaughter for 2022 was up 1.7 percent from 2021.

n

Cash cheese prices shot higher the week of Friday the 13th, then suffered a relapse. The cheddar blocks gained 14.25 cents Jan. 9, hitting $2.1975 per pound, highest since Nov. 22, but cooled to a Jan. 13 finish at $2.00, down 5.5 cents on the week, while 8 cents above a year ago.

The barrels, after diving 13.25 cents the previous week, gained a dime on Jan. 9, hitting $1.825, but closed Jan. 13 at $1.7075. This is 1.75 cents lower on the week, 25.25 cents below a year ago, and 29.25 cents below the blocks. Sales totaled 10 cars of block and 24 of barrel for the week at the Chicago Mercantile Exchange.

HighGround Dairy’s “Monday Morning Huddle” warned that a fire at AMPI’s Portage, Wis. process cheese plant on Jan. 2 “may temporarily make more barrel cheddar available as the coop works to reopen the facility.”

Dairy Market News reported some Midwestern cheesemakers say the bullish market swings are dissimilar to what they are experiencing regarding demand. A majority of them say sales have softened in recent weeks. Not only spot interest, but contractual buyers have reduced some volumes. Milk availability has not changed much over the past three weeks. Spot prices are still being reported as low as $10 under Class. Cheese inventories are expected to grow near term.

See MIELKE, pg. 22

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MIELKE, from pg. 21

Food service and retail cheese demand in the west is steady to lighter but contacts report steady demand from international purchasers but there is concern that lower global prices may contribute to lighter export demand ahead. Barrel inventories are more excessive than blocks, says Dairy Market News, and plenty of milk remains for busy cheese making, although continuing delayed deliveries of supplies and labor shortages is hindering full capacity. n

Butter climbed to $2.43 per pound on Jan. 10, but finished Jan. 13 at $2.425. This is up 4.25 cents on the week but 30 cents below a year ago. Only two cars were sold.

Dairy Market News says cream remains abundant within the Central region and from Western suppliers. Butter producers have active schedules, focusing on spring holiday inventory status. Food service demand has gradually picked up, but retail buyers are reportedly buying on a necessity basis. Market tones remain somewhat firm, despite strong production and an expectation of inventory growth.

Cream remains ample in the West while demand for it is steady to lighter. Butter production continues to be strong as cream remains widely available. Some expect churns being kept busy longer into the year than usual and into the flush. Butter availability is moving closer towards balancing with demand. Butter demand is steady to higher, with some reports of limited spot availability as contracted loads are being booked for first quarter 2023. However, there is some hesitation for booking into the remaining quarters of 2023, says Dairy Market News.

Grade A nonfat dry closed Jan. 13 at $1.255 per pound. This is down 4.25 cents on the week, lowest CME price since Aug. 20, 2021, and 56 cents below a year ago. Only five sales were reported on the week.

Dry whey closed at 33.25 cents per pound. This is down 5.75 cents on the week, lowest CME price since Aug. 26, 2020, and 43.75 cents below a year ago. There were 25 sales on the week at the CME, highest since the week of June 8, 2020.

Lucas Fuess, now a senior dairy analyst with Rabo Bank, said in the Jan. 16’s “Dairy Radio Now” broadcast that cheese is the most surprising market

4TH ANNUAL INTERMOUNTAIN ONLINE CLASSIC CAR AUCTION SATURDAY, MARCH 18, 2023

3RD ANNUAL SIOUX FALLS CLASSIC CAR AUCTION SATURDAY, JULY 22, 2023 so far in 2023 in that prices, particularly the blocks, have been maintaining incredible strength after staying above the $2 mark in December. It’s a bit opposite of seasonal norms, he said, when prices characteristically come down in first quarter. He expects some slippage in the block market ahead, but sees barrels remaining fairly neutral around the $1.80 per pound mark.

Butter saw some significant declines toward the end of the year, as demand finished up in the holiday season, Fuess said, and it has been fairly quiet so far in 2023, supported near the $2.40 per pound mark.

Weaker global demand is the story on nonfat dry milk, according to Fuess, and that has driven prices at the CME. He cited the Dairy Products report showing powder output a bit weaker than a year ago; but that export category is down significantly and stocks climbed, indicative of weak demand at the end of the year. He looks for slow but steady price declines to continue in the powder. n

Jan. 10’s Global Dairy Trade Pulse auction was the first one of 2023 and saw 2.2 million pounds of Fonterra whole milk powder sold at $3,170 per metric ton. That’s down $35 from the Dec. 27 Pulse, but unchanged from last week’s GDT auction Contract 2 March price and the first time the Pulse price did not decline since Dec. 6, according to StoneX.

HighGround Dairy points out, “whole milk powder inventories in China are speculated to be replete providing ample supply for domestic demand. With little competitive buying interest from the country there is plenty of room for other regions to procure product at these low prices.”

The Covid virus continues to spread in China, says HighGround Dairy, “amid what critics say is a lack of transparency from Beijing. China officially opened their borders and citizens have started to travel cross-border, to either Hong Kong or Russia, and flights from overseas flights started to trickle in. Authorities say they expect domestic rail and air journeys will double over the same period last year, bringing overall numbers close to those of the 2019 holiday period before the pandemic hit.”

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

Women exploring meat cutting careers

RIDGEWATER, from pg. 15

one, so long as there’s an interest to learn. In the fall class, two students were retired, two were recent high school graduates, and the others were spread out within the middle-aged range.

Students must give three demonstrations throughout the semester showing knowledge of skills and use of industry terminology. Demonstrations are either recorded or Thommes makes site visits if possible.

Whitney Becker, a student from Windom, Minn., stated, “It is a nice combination of hands-on learning with a butcher at a shop and technical information that I can apply at the shop for class.”

Thommes encourages students to work part-time at the facility they are placed at if able, acknowledging that it isn’t always an option for non-traditional students. “If you want to know the industry, spending time and knowing the atmosphere will give you a better idea of what you’re getting into.”

In Thommes’s own experiences in the meat cutting industry and as an instructor, the female to male ratio isn’t exactly balanced, but she does see female representation. This past semester, Thommes instructed one woman out of the ten students, and expects two women next semester. She noted the daily on-the-job requirement to lift 50-75 pounds can be a challenge. “Once you prove yourself — that you can handle a knife, have a good head on your shoulders, you show you’re capable — you’re welcomed with open arms,” she stated.

A quick online job search proves the need within the industry. While processing plants may not require prior training upon hire for an entry level position, Thommes sees the advantage of earning the certificate. Without the certificate, Thommes stated it may be three or four years before an employee learns the skills taught at Ridgewater.

Thommes added the majority of her students have plans other than working in a processing plant. Most want to start their own businesses. Thommes explained many local shop owners are reaching retirement age and are without successors. “The local shops is what’s really hurting. They need the help.” In fact, one of Thommes’s fall semester students has the intent to fill that exact need for a butcher shop. “Spring semester she’ll be starting that mentorship to learn the ropes of that role.”

Ridgewater College has already begun the planning process to assist with this specific need. Courses for advanced meat processing and entrepreneurship are in their developing stages.

Thommes mentioned Ridgewater is beginning to look into the MN Pipeline and possible grant eligibility to assist with students’ tuition costs.

To learn more about the meat cutting course at Ridgewater College, visit https://ridgewater.edu/academics/areas-of-study/agriculture-veterinary-technology/meat-cutting/. You may also contact Thommes directly at sophia.thommes@ridgewater.edu. v

Grain Outlook WASDE report shows sharp drop in harvested acres

The following marketing analysis is for the week ending Jan. 13. CORN — BAM! The U.S. Department of Agriculture certainly surprised traders with its changes on the January World Agriculture Supply and Demand Estimates and Grain Stocks reports!

Corn had traded in consolidating fashion ahead of the reports released on Jan. 12. There was little fresh news to drive the markets, leaving them to rely on the old standards of dry, hot Argentine weather, a lack of PHYLLIS NYSTROM export demand, and outside CHS Hedging inC. macro markets. Mild support St. Paul came from a friendly ethanol report and jumping energy markets.

There was light chatter about how much old crop corn Brazil has left to sell. Anec, Brazil’s ag exporter association, anticipates Brazil’s January corn exports will set a record for the month at 5.02 million metric tons — surpassing the 4.44 mmt exports in 2016. Taiwan bought U.S. corn this week with no offers out of Brazil.

Ukraine corn remains at a discount to U.S. origin. According to Argentina’s ag ministry, Argentine farmers have sold an estimated 76 percent of last year’s corn crop compared to 78 percent sold last year by this date. Board inverses widened throughout the week.

But the overwhelming headline this week was the January WASDE and Dec. 1 Grain Stocks reports. The biggest shock on the balance sheet was the slashing of the total 2022-23 harvested acres by 1.637 million acres to 79.2 million acres! This was the largest November-to-January harvested acreage decrease in history. An increase to 80.763 million acres was expected.

In Kansas alone, harvested acres were cut 710,000 acres with another 480,000 acres cut in Nebraska and 240,000 acres in South Dakota.

Adding to the surprises was an increase in yield of 1 bushel per acre to 173.3 bu./acre when a .2 bu./acre increase was anticipated and thereby lowering the 2022-23 U.S. corn crop by 200 million bushels to

Cash Grain Markets

corn/change* soybeans/change*

Stewartville $6.50 +.26 $14.56 +.29 Edgerton $7.05 +.19 $15.00 +.33 Jackson $6.81 +.19 $14.97 +.38 Hope $6.75 +.15 $14.83 +.43 Cannon Falls $6.51 -.14 $14.57 +.11 Sleepy Eye $6.80 +.15 $15.00 +.43 St. Cloud $6.61 +.15 $14.94 +.37 Madison $6.66 +.08 $15.15 +.06 Redwood Falls $6.85 +.15 $15.05 +.37 Fergus Falls $6.56 +.15 $14.86 +.34 Morris $6.65 +.15 $15.10 +.40 Tracy

$6.85 +.15 $15.12 +.40 Average: $6.72 $14.93 Year Ago Average: $5.85 $13.31

Grain prices are effective cash close on Jan. 17. *Cash grain price change represents a two-week period.

13.73 billion bushels. The average traded guess was 13.933 billion bushels and last month the crop was 13.930 billion bushels. The miss by the trade for production of 203 million bushels was the second-biggest miss on record for this report.

On the demand side, the feed was cut 25 million bushels; food, seed and industry was down 10 million; and exports cut by 150 million bushels to 1.925 billion bushels.

Ending stocks at 1.242 billion bushels was a decline of 15 million bushels from last month and compared to the 1.314 billion bushels estimated. This would be the second-smallest ending stock in nine years. The stocks-to-use ratio was unchanged at 8.9 percent (second-lowest in 10 years) with the average farm price unchanged at $6.70 per bushel. The lower-than-expected ending stocks numbers coincided with the smaller than anticipated Dec. 1 corn stocks at 10.809 billion bushels vs. 11.153 billion bushels estimated. This is the smallest Dec. 1 stocks in nine years.

In the world numbers, ending stocks were 296.42 mmt which was lower than the 297.86 mmt trade estimate and 298.40 mmt last month. Argentina’s crop was cut 3 mmt to 52 mmt and Brazil down 1 mmt to 52 mmt and 125 mmt respectively. Argentina’s exports were down 3 mmt to 41 mmt and Brazil’s were unchanged at 47 mmt. Conab slightly lowered its Brazilian crop production to 125 mmt from 125.8 mmt and 113 mmt last year. The Buenos Aires Grain Exchange kept Argentina’s corn production at 50 mmt while rating the crop at 7 percent good/excellent vs. 13 percent last week. China’s corn imports were steady at 18 mmt and production increased 3.2 mmt to 277.2 mmt.

The BAGE rated the Argentine corn crop at a measly 7 percent rated good/excellent.

Weekly export sales of 10.1 million bushels were the lowest in 13 weeks. Total commitments of 866 million bushels are down 47 percent from last year. Using the updated USDA export projection, year-onyear export sales are predicted to fall 22 percent.

Weekly ethanol production was increased by 99,000 barrels per day to 943,000 bpd. This is still down 6.3 percent from the same week last year and behind the 1.043 million bpd pace needed to reach the USDA outlook. Stocks were down 644,000 barrels at 23.8 million barrels. Ethanol stocks are 3.9 percent higher for the same week last year. Net margins dropped by 7 cents per gallon to 17 cents per gallon.

Gasoline demand was steady at 7.558 million bpd and was 4.4 percent below the same week last year. Over the last four weeks, it is down nearly 5 percent vs. last year.

China extended the anti-dumping and anti-subsidy tariffs on U.S. distillers dried grains for another five years which were set to expire this week. They have been in place since 2016 and make any imports uncompetitive against China’s own DDGs. Outlook: I’m not going to venture how high prices may venture, but I think the reports this week helped put in a floor. March corn closed above its 100day moving average resistance for the first time since Dec. 30. This will become short-term support with the next support near $6.62 per bushel. The December corn contract hasn’t traded to $6.00 per bushel on the board since Jan. 4, so that will be the first obstacle to overcome.

South American growing weather will continue to be in the headlines. How much corn does Brazil have left to market before its next harvest? Don’t get caught looking and hoping. Manage your risk as appropriate for your operation.

For the week, March corn surged 21 cents to close at $6.75, July jumped 15.5 cents to $6.63.75, and December corn climbed 7.5 cents higher to $5.98.5 per bushel. SOYBEANS — March soybeans tested $15.00 per bushel every session leading up to the WASDE report but hadn’t closed above it since Dec. 30. The January reports changed that when March soybeans closed at $15.18.5 per bushel.

The USDA cut the 2022-23 U.S. soybean crop by 70 million bushels to 4.276 billion bushels which was below the lowest forecast. The average trade estimate was 4.362 billion bushels. The yield was lowered 0.7 bu./acre to 49.5 bu./acre and below the lowest guess. Harvested acres were decreased 295,000 acres to 86.3 million acres vs. 86.62 million acres estimated. Planted acres were unchanged at 87.5 million acres. The trade was expecting a crop of which would have been a 16 million bushel increase. The 86 million bushel trade miss was the biggest in history for the January report.

See NYSTROM, pg. 26