Mielke Market Weekly

This column was written for the mar- set higher corn and soybean prices to keting week ending Dec. 31. nudge the November milk feed ratio

Happy 2022! higher for the third month in a row. The USDA’s latest Ag Prices report has the

We attempted to take a look at what ratio at 1.94, up from 1.87 in October, but lies ahead in the New Year in the Jan. 3 well below last year’s 2.58.“Dairy Radio Now” broadcast with Bill Brooks, dairy economist at Stoneheart Consulting in Deerborn, Mo. The index is based on the current milk price in relationship to feed prices for a ration consisting of 51 percent corn, 8 Brooks predicted, “It should be a better profitability year for dairy farmers,” but MIELKE MARKET WEEKLY percent soybeans and 41 percent alfalfa hay. In other words, one pound of milk warned, “that’s contingent on the weather and how that impacts our main input By Lee Mielke would purchase 1.94 pounds of dairy feed of that blend. prices as far as feed costs.” Feed costs finished 2021 strong, he said, MARKETING n but milk prices finished 2021 fairly The U.S. All Milk Price averaged strong as well. $20.80 per cwt., up $1.10 from October, but was 30

The U.S. Department of Agriculture has made cents below November 2020. changes to the risk management Dairy Margin The national average corn price jumped 25 cents to Coverage program with respect to previous year eli- $5.27 per bushel after dropping 45 cents in October, gible milk marketings as well as the feed price cal- and is $1.48 per bushel above November 2020. culation, which will now be based on 100 percent premium alfalfa hay, instead of the 50/50 hay blend. Soybeans averaged $12.20 per bushel, up 30 cents from October and $1.90 per bushel above November

Many of the changes will be retroactive, according 2020. to Brooks, and result in additional benefits to dairy producers so it behooves them to check with their local Farm Service Agency office for complete details. Alfalfa hay averaged $210 per ton, down $3 from October, but is a hefty $46 per ton above a year ago. Brooks says international dairy prices look strong and that is helping firm U.S. prices — especially on butter, where $3 per pound plus is a global reality and could potentially move our price higher. Looking at the cow side of the ledger, the November cull price for beef and dairy combined averaged $69.20 per cwt. This is down $1.40 from October, $9.90 above November 2020, but is $2.40 below the 2011 base average of $71.60 per cwt. Cheese prices will hopefully remain strong, he said, as economies open more, so “We’re looking at a better price year than what we experienced in 2021 and it should be a better profitability year for us.” Bill Brooks says, “A DMC payment is expected for the 11th time in 2021 and 12th month straight when the FSA announces the November 2021 milk margin above feed costs. The milk margin above

Meanwhile, a higher November All Milk Price off- feed costs is expected to be $9.14 per cwt. for

November — a gain of 60 cents over October’s level and the highest since November 2020 when the margin was $11.64. Dairy producers with coverage at the $9.50 per cwt. level would expect to see a payment on eligible November milk production.” In the week ending Dec. 18, 61,700 dairy cows were sent to slaughter, down 600 from the previous week and 1,500 head or 2.4 percent below a year ago. The StoneX Dairy Group stated in its Dec. 27 “Early Morning Update,” “The second half of 2021 was marked by an increased willingness, or need, for producers to cull animals. That said, the fourweek rolling total of dairy cows slaughtered has been trending down over the last three months. Week-to-week, the majority of slaughter levels have been higher than year-ago levels; but the surplus over last year has been declining. The contraction seems to be slowing down, as higher milk prices encourage farmers to keep animals in the herd.” n Cash dairy prices finished 2021, mostly higher and it was a full week of trading. The 40-pound cheddar blocks closed the last day of the year at $1.98 per pound, up 10.75 cents on the week, highest since Nov. 12, 2020, 12.25 cents above where they were on Dec. 1, and 33 cents above that week a year ago. The 500-pound cheddar barrels finished Dec. 31 at $1.71 per pound, up 6 cents on the week, highest since Nov. 1, 16.75 cents above a year ago, but a still-too-high 27 cents below the blocks. There were seven sales of block on the week at the Chicago Mercantile Exchange and 27 for the month of December, up from just 14 trades in November. Barrel sales totaled 30 for the week and

Registration for 2022-23 SowBridge program is now open

WILLMAR, Minn. — Registration is now open for SowBridge, the distance education series for people involved in managing or caring for sows, and/or their litters, and boars, including operation owners, caretakers, technicians, managers and technical service providers. New this year, the series will be provided online through Zoom, although participants will be able to use a call-in option instead if they prefer. Sarah Schieck Boelke, University of Minnesota Extension swine educator said, “Producers and others in the industry can get the information they need without the hassle of traveling or giving up a whole day to attend a meeting. Participants can take part where it works best for them whether at home, in an office or in the swine unit. And whether or not they can participate in the live session, all sessions are recorded and available to participants after each session for later use.”

The SowBridge program has 12 monthly sessions throughout the year. Sessions are generally scheduled for the first Wednesday of the month from 11:15 a.m. to 12:15 p.m., which includes time for questions. Cost for the series is $200 for the first registration from an entity and $100 for each subsequent registration from the same entity.

Registration information can be found at z.umn. edu/SowBridgeRegistration. Registration is due Jan. 18 to ensure materials are received for the first session.

SowBridge 2022 session dates and topics are as follows:

Feb. 2 — The Impact of Non-edible Trim Loss on Cull Sow Value.

March 2 — Proposition 12 Implications.

April 6 — Estrus Detection and Insemination Strategies for Different Housing Systems.

May 4 — Lactation Feeding Strategies. June 1 — Global African Swine Fever Overview.

July 6 — What Will Happen if ASF Comes to the United States?

Aug. 3 — How Does Mass Depopulation Work?

Sept. 7 — How Does PRRS 1-4-4 Compare to Other Strains?

Oct. 5 — Fan Maintenance and Ventilation Settings.

Nov. 2 — Body Assessment Methods.

Dec. 7 — Preweaning Piglet Survival.

Jan. 4, 2023 — PCAI: An Update on Adoption in the United States.

For more information on the sessions or registration, contact Sarah Schieck Boelke at (320) 235-0726 ext. 2004 or schi0466@umn.edu.

This article was submitted by University of Minnesota Extension. v

88 for the month, down from 98 in November.

Some Midwest cheesemakers were very busy during the holiday, according to Dairy Market News. Spot milk prices were falling at somewhat strong discounts and ranged from $4 to $2 under at mid New Year’s week. Although discounted, Dairy Market News says they were “somewhat pricey” compared to the final week in 2020, when milk prices reached $10 under Class III. Cheese demand maintained strength coming into the holiday season, but questions have arisen as to how cheese stocks will hold up once customers come back to the table in early 2022. Dairy Market News says there are some near term bullish market undertones, according to market traders, despite the large block barrel price gap.

Rising Covid cases and winter school closures are contributing to a decline in food service purchasing; however, international demand remains strong. The ongoing shortage of truck drivers was exacerbated by the holidays and poor weather, increasing delays to deliveries. Export loads of cheese face further delays due to port congestion. Milk is available for cheese production in the region but difficult in areas hit with bad weather. End of year holidays, staffing shortages, and shipping delays are contributing to reduced cheese production throughout the West, according to Dairy Market News. n

Butter had a great week after jumping 15.75 cents the previous week, and soared to a Dec. 31 close at $2.4525 per pound. This is 20.25 cents higher on the week (the highest since Sept. 21, 2017), 47.25 cents above its Dec. 1 perch, and $1.0325 above a year ago when it dropped 10.5 cents to $1.42. The U.S. price is narrowing the gap to global levels. There were 30 trades reported on the week and 149 for the month, up from 62 in November.

Butter producers are running churns as much as possible, says Dairy Market News. Bulk butter is very tight as the final weeks of 2021 brought increasing interest from customers in all varieties of butter from salted 80 percent to unsalted 82 percent butterfat.

Cream is available in the West, though some contacts reported that severe weather and a shortage of

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truck drivers was limiting their ability to deliver loads to production facilities. Cream demand is steady to lower as some Class II producers in the region were running lighter year-end holiday schedules. Steady demand is present for butter in both retail and food service markets. Some purchasers are, reportedly, looking for extra loads of butter to build inventories but spot loads of butter are growing increasingly scarce. Some purchasers report that they are unable to find loads of unsalted butter to meet current demands. Strong demand and limited availability have contributed to the higher prices, says Dairy Market News. Butter makers are, reportedly, running below capacity due to shipping delays and labor shortages in the region.

Grade A nonfat dry milk fell to $1.6475 per pound on Dec. 29, then reversed direction; but closed Dec. 31 at $1.6550, down 1.50 cents on the week, up 10.75 cents on the month, and 51.25 cents above a year ago. There were 12 sales on the week and 60 for the month, down from 67 in November.

Dry whey stayed frozen at its new record high, 75 cents per pound, all week. This is up 7 cents on the month and 28.75 cents above a year ago. There were no sales for the week and four for the month of December, down from eight in November. n

Looking ahead to the first Global Dairy Trade auction of 2022, HighGround Dairy stated in its preGDT analysis, “High feed costs, strong global demand, a lack of production growth and general commodity inflation are the key drivers that will likely keep global dairy product prices elevated into the first half of 2022. While dairy producers in key exporting regions are being given signals to expand (raw milk prices are quickly on the rise in the United States and Europe), the first high feed cost environment since 2013-14 may prevent farmers from aggressive growth plans for the coming months.”

The National Milk Producers Federation’s final Market Report of 2021 stated, “The rapid evaporation of growth in dairy cows, milk and milk solids production dropped all three into negative territory during October. These supply-side effects have dominated the dairy situation recently and will continue to do so well into the coming year. Domestic consumption growth of all milk and dairy products has been somewhat sluggish in recent months, but U.S. dairy exports during the first ten months of 2021 have set a new volume record of 17.6 percent of U.S. milk solids production, well above this measure’s second-highest year, 2020, at 16.3 percent.”

“The drop in production is being felt most in dry skim milk products, and to a lesser extent in butter and dry whey production. Cheese production remains the preferred channel for available milk. Product stocks are being drawn down and prices rising, as production trends change,” the report stated. n

Last of all, as I finish my final column of 2021, I’m not sure that I can remember the last time we had a white Christmas here in Whatcom County, Washington — but we sure did this year.

Unfortunately, it also brought us frigid temperatures which got down to single digits in some cases. Strong gusty winds served to bring those temperatures even lower, considering wind chill factor — all of which brought back many memories of my growing up days in Wisconsin.

I have often reminisced of days it was so cold, I’d stand in front of an open refrigerator just to warm my hands. (This is where you laugh and snicker.)

The frigid cold was no laughing matter for those who had to be out in it — especially dairy farmers, emergency services personnel, line workers, and furnace repair people. Guess it was a fitting end to 2021.

My hope and prayer is that we all have a less dramatic and happier 2022.

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

Outlook: Will the expected rain in South America only provide temporary relief? Or will it pave the way for timely rains to feed the record crop? We can’t outguess the weather, whether it’s in the United States or South America. What you can do is position yourself for the unexpected. If you have unsold bushels, consider a strategy to manage your risk if prices pull back. Know where your risk lies. And don’t forget about new crop planning and selling. Price direction will hinge on every forecast update. The first line of support in the March soybean contract is $13.00 per bushel, then $12.83 per bushel. First resistance is this week’s high at $13.84.5 per bushel, then $14.00 per bushel.

On the continuous soybean chart, nearby soybeans on Dec. 31, 2020, closed at $13.15.25. This year the nearby January contract closed at $13.28.75 per bushel of 13.5 cents higher for the year.

For the week, March soybeans closed 1.5 cents lower at $13.39.25, July gained 3 cents at $13.55, and November was 4.25 cents higher at $12.69.25 per bushel.

Weekly price changes in March wheat: Chicago crumbled 44 cents to $7.70.75, Kansas City plunged 60 cents to $8.01.5, and Minneapolis dove 50.5 cents to $9.82 per bushel. v