Benchmark milk prices drop $1.65 from January

$1.60 from December, after losing 90 cents the month before, and is $1.10 below January 2021. e national corn price averaged $6.64 per bushel, up 6 cents from December after jumping 9 cents the month before, and is $1.06 above January 2022.

Soybeans climbed to $14.50 per bushel, up a dime, after jumping 40 cents the previous month, and are $1.60 per bushel above January 2022.

2021. e December output per cow was revised 2 pounds lower.

January output in California totaled 3.5 billion pounds, down 1 million pounds, virtually unchanged from a year ago, with 4,000 fewer cows and a loss of 5 pounds per cow. Wisconsin, at 2.7 billion pounds, was up 44 million or 1.6%, as a milder winter gifted a 40 pound gain per cow, with 3,000 fewer cows milked.

pounds or 0.3% from December, and 4.1 million or 0.3% above a year ago.

Exports likely kept cheese inventories in check. at remains to be seen if that will be the case in 2023. US uid milk sales continue to ounder, down 3.7% in December and down 2.4% for all of 2022.

e February Federal order Class III benchmark milk price was announced by the USDA at $17.78 per hundredweight, down $1.65 from January, $3.13 below February 2022, and the lowest it has been since September 2021.

Friday’s Class III futures settlements had the March price at $17.75; April, $17.53; May, $17.83; and June at $18.33, with a peak of $19.68 in October.

e February Class IV price is $18.86, down $1.15 from January, $5.14 below a year ago, and the lowest Class IV since November 2021.

Dairy farmers know rst-hand that pro tability is taking a dive. One more con rmation of that is in the Agriculture Department’s latest Ag Prices report.

e January milk feed price ratio fell to 1.73, down from 1.84 in December, lowest since August 2022, and compares to 2.16 in January 2022.

e index is based on the current milk price in relationship to feed prices for a ration consisting of 51% corn, 8% soybeans and 41% alfalfa hay.

In other words, one pound of milk would only purchase 1.73 pounds of dairy feed of that blend.

e All Milk Price average fell for the third month in a row, hitting $23.10 per hundredweight, down e Agriculture Department’s preliminary data shows January output at 19.3 billion pounds, up 1.3% from Jan. 2022. e 24-State total, at 18.5 billion pounds, was up 1.5%. e January herd was up 38,000 head from a year ago and the largest since Oct. 2022. e 24-State head count was up 9,000 from December and 51,000 above a year ago, also the largest since Oct. 2022. e USDA’s January Cold Storage report puts Jan.31 butter stocks at 262.7 million pounds, up 46.4 million pounds or 21.4% from December, and 43.3 million pounds or 19.7% more than January 2022. e other cheese category crept up to 598.9 million pounds, up 3.3 million pounds or 0.5% from December, and up 15.0 million or 2.6% above a year ago. e total cheese inventory slipped to 1.441 billion pounds, down 4.1 million ere are some dairy state legislators that are upset over this, according to Meyer, so previous legislation from 2017 that would address this, may be re-introduced, so the ght remains, he said. ey closed the rst Friday of March at $1.95, up 7 cents on the week, but 20 cents below a year ago when they jumped 20.50 cents. e Cheddar barrels gained a nickel Monday, hitting $1.59, then headed lower, falling to $1.53 ursday, lowest since Nov. 24, 2021, but nished Friday at $1.5750, up 3.50 cents on the week, 39.50 cents below a year ago, and 37.50 cents below the blocks.

Alfalfa hay averaged $263.00 per ton, down $6 from December, but is $48 per ton above a year ago.

Looking at the cow side of the ledger; the January cull price for beef and dairy combined averaged $81.70 per cwt., up $4.80 from December, $10.10 above January 2022, and $10.10 above the 2011 base average.

America’s dairy cows put plenty of milk in the tank in January, thanks to milder weather and an increase in numbers.

Revisions lowered the 50-State December total by 30 million pounds to 18.9 billion, up 0.6% from a year ago, instead of the 0.8% increase originally reported.

Cow numbers totaled 9.4 million, up 9,000 head from the December count which was revised 4,000 head lower.

Output per cow averaged 2,052 pounds, up 18 pounds or 0.9% from Jan.

Texas was up 5.2%, thanks to 22,000 more cows and a 35 pound gain per cow. Idaho was up 2.6%, on 12,000 more cows and a 15 pound gain per cow.

Michigan was up 2.1%, thanks to a 40 pound gain per cow and 2,000 more cows.

Minnesota was up 1.1% on a 25 pound gain per cow o setting the loss of 1,000 cows. New Mexico was down 4.1%, with 13,000 fewer cows, though output per cow was up 5 pounds.

New York was up 3.5%, thanks to 10,000 more cows in the string, and a 40 pound gain per cow.

Oregon was down 1.4%, on a loss of 2,000 cows. Output per cow was up 5 pounds. Pennsylvania inched up 0.1% on a 10 pound gain per cow o setting the loss of 2,000 cows. South Dakota scored the biggest gain, up 9.1%, thanks to 17,000 more cows o setting a 15 pound loss per cow.

Washington State was down 1.9% on 7,000 fewer cows however output per cow was up 15 pounds, according to the USDA.

Shelves are fattening up.

Butter stocks had trailed year ago levels for 16 consecutive months until December. January is the second month to reverse that.

American cheese stocks fell to 818.8 million pounds, down 6.5 million pounds or 0.8% from December, and 18.8 million or 2.2% below a year ago.

Some of the blame is put on plant-based beverages, and the dairy industry has been calling on the Food and Drug Administration to stop such products from using dairy terms like milk but identity politics are alive and well in the dairy industry, and the FDA’s recent draft guidance does not stop such usage.

HighGround Dairy President Eric Meyer, speaking in the Mar. 6 Dairy Radio Now broadcast, said the dairy industry seems to have lost the term milk and probably should have done more earlier to head that o .

He said the FDA directive is a double-edged sword, that forces plantbased manufacturers to publish data on nutrition, concluding it is confusing for consumers that nutrition di ers under the term milk and ere’s no explanation about use of the term.

But the government seems to have allowed for this use of the term milk and that’s almost not up for debate anymore and needs to go through the Congressional process to try and get that back.

Meyer does not believe the dairy industry should give up on trying to turn around uid milk sales and says certain innovations have returned value back to the farmer. It may not be a volume play, he concluded.

But more of a margin play for the consumer of uid milk versus the others. I’ll drink to that.

Cash dairy prices saw little reaction to the January Cold Storage data, though the Cheddar blocks jumped 3 cents the following Monday, hitting $1.91 per pound.

You wouldn’t know it by the weather, but spring is right around the corner, and with it the tradition of breathing fresh air into our living spaces. Here are some suggestions for how to take advantage of your cleaning ambitions while keeping Mother Nature in mind.

• There are plenty of recipes for cleaning solutions available; a simple example would be one part white vinegar, one part water, and a sprinkle of essential oils for a fresh scent.

• Microfiber cloths are perfect for dusting and can be used for years instead of single-use products.

•Take stock of your pantry. Expired foods can be composted (with containers recycled) and shelf-stable canned/dry goods that you won’t be eating in the near future can be donated to a food bank.

Midwest cheese processors tell Dairy Market News demand is steady to strong. Cheddar and Italian cheesemakers say demand is being met and production is busy with ample milk.

Customer needs are being met and any buildups of cheese are usually alleviated within two weeks of production.

Spot milk is widely available at similar prices to previous weeks.

Market tones are more neutral than bullish or bearish, says DMN, due to the large block-barrel price gap.

Looking west, domestic cheese demand is steady from retail and food service purchasers however some pizza producers report lightened demand and below forecast sales.

Export demand is mixed. Asian demand is strong according to some. Cheese output remains strong to steady with plentiful to ample milk available, according to DMN.

Cash butter gained 2 cents Monday but su ered a 7 cent relapse Wednesday and headed lower from there to a Friday nish at $2.3450 per pound, down 8.50 cents on the week, lowest in ve weeks, and 34 cents below a year ago.

Butter plants report that demand tones have yet to shift in either direction, but continue to edge on the slower side, says DMN. Buyers are approaching with caution as market prices have slipped. Butter availability has grown in the early months of 2023 and bulk butter interests have slowed.

Cream is widely available, and some Midwestern producers are full.

Contacts expect a seasonal demand push in the upcoming weeks however, as the spring holidays approach.

Cream is plentiful in the West and demand for it remains steady to light. Churns are running steady to strong, working through cream volumes.

Retail demand is light. Some stakeholders report heavy inventories due to below forecasted retail sales.

Export demand has less- ened, according to DMN. Grade A nonfat dry milk was not helped by Tuesday’s Pulse and closed Friday at $1.1775 per pound, down 3.75 cents on the week, lowest CME price since Mar. 29, 2021, and 69.50 cents below a year ago. Cash dry whey closed the week at 44.50 cents per pound, down 2 cents on the week and 31.25 cents below a year ago.

Lastly, a brief review on milk pricing.

In most of the USA, milk prices are determined using complex formulas by the U.S. Agriculture Department but the system has evolved over the years from a simple volume/butterfat basis to the current multiple component pricing, which takes into consideration volume, butterfat, protein, and various other components of the milk, as well as where the milk is to be used.

Presently, there are four Classes of milk; Class I is uid in the bottle or jug and yields the highest rate of return to the farmer. Class II is milk used in ice cream, yogurt, and cream cheese. Class III is milk that goes to cheese and dry whey, and Class IV is milk used in butter, nonfat, and whole milk powder.

It takes 9.6 pounds of milk to produce 1 pound of cheese, so every penny movement in the cheese price is equivalent to about 10 cents on the Class III milk price. Dry whey is a bi-product from making cheese. One hundred pounds of milk will yield about 10 pounds of cheese and about six pounds of dry whey.

A 1 cent movement in the dry whey price equals about 5.9 cents on the Class III milk price. e Class IV milk price is driven by powder and butter. One hundred pounds of milk yields about 8.6 pounds of nonfat dry milk and 4.2 pounds of butter.

A penny movement on the nonfat dry milk price will mean about 8.6 cents on the Class IV milk price and a penny movement on butter results in a 4.2 cent impact on the Class IV price. Farmers receive a uniform or blend price, which is determined by their region of the country, based upon how much of that farmer’s milk went into the four di erent classes in his milk market order.

-- Lee Mielke of Lynden is editor of the Mielke Market Weekly.