Farm Programs

MIELKE MARKET WEEKLY

By Lee Mielke

Answers located in Classified Section

This column was written for the marketing week ending Dec. 16.

The U.S. Department of Agriculture left its 2022 milk production forecast unchanged in its World Agricultural Supply and Demand Estimates report, but raised the 2023 estimate slightly, News and information for Minnesota and Northern Iowa dairy producers citing higher expected cow numbers and slightly more rapid growth in output per cow.

Cheese was projected to average $2.11 per pound in 2022, up a penny from last month’s WASDE, and compares to $1.6755 in 2021 and $1.9236 in 2020. The 2023 cheese average was projected at $1.9950, up 2.5 cents from a month ago, but that would be 11.5 cents below the projected 2022 average.

The 2022 butter price average was estimated at $2.875 per pound, up 3 cents from a month ago, and compares to $1.7325 in 2021 and $1.5808 in 2020. The 2023 average was projected at $2.465, up a penny from a month ago, but 41 cents below the expected 2022 average.

Nonfat dry milk will average $1.68 in 2022, unchanged from last month’s estimate, and compares to $1.2693 in 2021 and $1.0417 in 2020. The 2023 average was estimated at $1.3750, down 3 cents from a month ago, and would be 30.5 cents

below the anticipated 2022 average. The dry whey average for 2022 was unchanged at 60.5 cents per pound and the 2023 average was lowered 2 cents to 46.5 cents per pound, 14 cents below the expected 2022 average.

The 2023 Class III milk price was projected to average $19.80 per hundredweight, up 15 cents from last month’s WASDE, but would be $2.15 below what the 2022 average is expected to be.

The 2023 Class IV price was estimated to average $20.10, down 25 cents from last month’s estimate, and would be $4.40 below the anticipated 2022 average.

This month’s corn outlook is for lower exports and greater ending stocks. Exports were lowered 75 million bushels as competition from other exporters and relatively high U.S. prices have resulted in slow sales through early December. Corn ending stocks were raised 75 million bushels. The season-average corn price was lowered a dime to $6.70 per bushel. Corn exports were raised for Ukraine but lowered for the United States, Russia, and the EU, according to the WASDE.

Soybean projections were unchanged from last month. Based on a review of the Environmental Protection Agency’s recent proposed rule for renewable fuel obligation targets, soybean oil used for biofuel was reduced 200 million pounds to 11.6 billion. Soybean oil exports were also reduced. With those reductions, food use and ending stocks were raised. The season-average soybean price forecast was unchanged at $14.00 per bushel. Soybean oil was reduced a penny per pound to 68 cents, and the soybean meal price forecast was increased $10.00 to $410 per short ton. n

Speaking of feedstuffs, StoneX Dec. 12 U.S. Dairy Outlook points out that alfalfa in the West is priced at record highs. California was seeing average hay at $370 per ton and Arizona at $340, with high quality prices much higher.

Alfalfa in Wisconsin, on the other hand, is around $169, which is close to the five-year average, says StoneX. “Western prices could decline from their record highs moving forward, but the water situation in parts of the West remains tenuous, which could keep input costs in the region expensive relative to other regions.”

This week’s Livestock, Dairy, and Poultry Outlook reported that October alfalfa hay averaged $281 per short ton, $4 higher than September and $62 above October 2021. The five-state weighted-average price for premium alfalfa hay was $348 per short ton, $6 higher than September and $94 higher than October 2021.

The Outlook reflected milk price and production projections in the Dec. 9 WASDE and reported, “Dairy cow slaughter has been active and has been in line with 2021 for the past couple of weeks.”

The Outlook stated the National Restaurant Association reported restaurant activity from January to October was below 2021 levels. “Nevertheless, the restaurant performance index has been above 100 points, showing an expansion that may boost domestic use for dairy products for the rest of 2022 and 2023.”

Things are looking a little better for consumers. The Consumer Price Index fell for a second month,