Mielke Market Weekly

This column was written for the marketing week ending April 8.

The U.S. Department of Agriculture raised its estimate for 2022 milk production in April 8’s World Agricultural Supply and Demand Estimates report, citing expected higher dairy cow numbers. Price forecasts for cheese and butter were raised from the previous month on tighter stocks and firm demand. Nonfat dry milk prices were raised fractionMIELKE MARKET WEEKLY By Lee Mielke lion pounds, but was up 11.8 million pounds or 3.9 percent from February 2021, ending four consecutive months that cheddar output was below that of a year ago. down 2.5 percent. Dry whey stocks climbed to 63 million pounds, up 6.4 million or 11.4 percent from January, but were 6.9 million pounds or 9.9 percent below those a year ally while whey prices were lowered, as Butter churns produced 183.6 million ago. U.S. prices are expected to become competitive with international prices. Milk price projections were also raised. 2022 production and marketings were estimated at 226.3 and 225.3 billion pounds respectively, up 300 million pounds on both. If realized, 2022 production would mirror output in 2021. pounds, down 10.4 million pounds or 5.4 percent from January, and 2.7 million or 1.4 percent below a year ago — the eighth consecutive month output was below a year ago. Year-to-date, butter stands at 377.7 million pounds, down 4.6 percent from a year ago. Butter stocks were down 26 percent from February 2021. Nonfat dry milk output totaled 171 million pounds, up 700,000 pounds or 0.4 percent from January, but was down 12.6 million or 6.9 percent from a year ago. Year-to-date, powder was at 341.3 million pounds, down 10.6 percent. Stocks climbed to 288.8 million pounds, up 27.2 million pounds or 10.4 percent from January, but were down 54.9 milMeanwhile, U.S. cheese vats “got milk” in February, despite milk output being down 1 percent from February 2021. The Dairy Products report Yogurt output totaled 373 million pounds, down 2.1 percent from a year ago, with year-to-date output at 745.9 million pounds, down 2.7 percent. lion pounds or 16 percent below those a year ago. Skim milk powder output fell to 29.6 million pounds, down 13.8 million pounds or 31.8 percent shows total cheese production slipped to 1.109 bil- Dry whey production fell to 75 million pounds, from January, but were down 2 million or 6.4 perlion pounds, down 5.3 percent from January, but down 5.4 million pounds or 6.7 percent from cent below a year ago. Year-to-date, skim milk powwas up a bearish 6.3 percent from February 2021. January and 300,000 pounds or 0.4 percent below a Cheese stocks were up 2 percent from a year ago, year ago. Year-to-date is at 155.4 million pounds, See MIELKE, pg. 13 according to the month’s Cold Storage report. Cheese output for the first two months of 2023 totaled 2.3 billion pounds, up a hefty 4.7 percent from the same period a year ago.

Italian cheese totaled 469.9 million pounds, down 6.7 percent from January but 6 percent above a year ago. Year-to-date, Italian stands at 973.5 million pounds, up 5.3 percent from a year ago.

American-type cheese, at 444.4 million pounds, was down 5.8 percent from January but 4.3 percent above a year ago. Year-to-date output, at 916 million pounds, was up 1.7 percent. Mozzarella output totaled 360.8 million pounds, up 4.4 percent from a year ago, with year-to-date at 755.6 million, up 4.9 percent.

Cheddar, the cheese traded at the Chicago Mercantile Exchange, totaled 312.3 million pounds, down 20.2 million pounds or 6.1 percent from January’s output, which was revised down 4.9 milNews and information for Minnesota and Northern Iowa dairy producers planted in the same spot immediately following a harvest because the plant will not thrive. Becky said their practice is to harvest the bare roots, fertilize with cow manure, and plant a cover crop of mixed annual grasses. Swensons then allow the ground to lie fallow for three years. According to Becky, this provides challenges in managing the land well — yet it also helps with soil health, minimizes erosion and suppresses weeds. Another challenge they face is proper drainage. Peonies do not like wet roots. “We have to be really careful how we steward those fields. We’ve got some really low spots and peonies don’t like water. They like to stay fairly dry. That is because the root system has two parts to it. Thicker roots, a crown and feeder

Swensons enjoy showing fields to public roots. If that crown stays consistently wet in the soil, it’ll rot. It’s called crown rot and the plant will die,” she explained. The only day the Swensons water is the day they plant bare roots. Becky said that by keeping the root dry, it causes the root system to send out feeder roots very quickly which helps with plant vigor and disease resistance because of the fast growth. Swenson Gardens invites the public to come and walk through the peony fields when they are in full bloom during the month of June. “We just love sharing peonies with people! Come and enjoy the peonies!” Becky offered. Field days are free. You can find out more about Swenson Gardens on their website, www.swensongardens.com, as well as social media platforms like Facebook and Instagram.v

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MILKHOUSE FLOWERS, from pg. 10 continue to add different varieties of flowers. For each year to help boost nutrients and organic matter. Another challenge all specialty cut flower farmers face is making sure there is a market. “(Cut flowers) instance, Dawn said she planted 500 tulip bulbs for the first time last fall which will hopefully allow her to offer flowers earlier in the growing season. are a perishable crop. I can only hold them so long For more information on Milkhouse Flowers you and then they need to move.” can find them online at www.milkhouseflowers.com The future looks bright for Dawn and Milkhouse Flowers. She hopes to add her own hoop house in the future to extend her growing season and she will and Facebook. You can also look for Milkhouse Flowers’ telltale milk bottle logo featuring Dawn’s favorite flower, the zinnia, at your local grocer. v

der was at 73 million pounds, up 8 percent from a year ago.

Chicago-based StoneX Dairy Group stated in its April 4 “Early Morning Update,” “When we peel back the layers it either looks like the USDA has overstated cheese and butter production or understated February milk production.” n

Concern over the falling global milk supply wasn’t enough to pause the slippage in the Global Dairy Trade auction. Event number 305 saw its weighted average fall 1 percent after slipping 0.9 percent on March 15.

Traders brought 47.4 million pounds to market, down from 51.5 million on March 15, and the smallest since May 18, 2021. The average metric ton price fell to $4,981 U.S., down from $5,039 in the last event.

Anhydrous milkfat led the declines, down 2.5 percent, after it inched up 0.4 percent last time. Butter was off 0.6 percent following a 1.8 percent descent. Whole milk powder was down 1.5 percent after dropping 2.1 percent, and lactose rounded out the losses, off 0.6 percent.

Buttermilk powder led the gains, up 6.3 percent, after not trading last time. GDT cheddar was up 2.7 percent after inching 0.3 percent higher, and skim milk powder was up 1 percent after a 1.6 percent rise on March 15.

StoneX Dairy Group says the GDT 80 percent butterfat butter price equates to $3.1258 per pound U.S., down 3 cents, after losing 5.7 cents on March 15, and compares to CME butter which closed April 8 at a bargain $2.7825. GDT Cheddar, at $2.9355, was up 2.7 cents, and compares to April 8’s CME block cheddar, a steal at $2.32. GDT skim milk powder averaged $2.0859 per pound, up from $2.0615. Whole milk powder averaged $2.0558 per pound, down from $2.0849. CME Grade A nonfat dry milk closed April 8 at $1.8225 per pound. n

February U.S. dairy exports looked strong except for the powders. Cheese, exports totaled 72.6 million pounds, up 9.2 percent from February 2021. HighGround Dairy attributes the strength to demand from a variety of countries, led by Mexico, up 5 percent, then South Korea and Japan. Year-todate cheese exports are up 12.4 percent and up 10.8 percent from two years ago, according to HighGround Dairy.

Butter exports hit 11.2 million pounds, up 46.3 percent, and the strongest February shipments since 2014, according to HighGround Dairy. Year-todate, butter exports were up 37.3 percent and up 222.6 percent from two years ago.

Nonfat dry milk-skim milk powder exports, at 139.7 million pounds, were down 11.5 percent. February was the third consecutive month they were below a year ago, “negatively impacted by port congestion and shipping challenges,” says HighGround Dairy, even as U.S.-sourced product remained a value buy versus other global exporters. Year-to-date exports are down 8.8 percent but are still up 21.6 percent from two years ago.

Shipments to Mexico were down slightly, 5 percent, says HighGround Dairy, but Southeast Asian demand was mostly healthy with exports up 8 percent to the Philippines, up 30 percent to Malaysia, and 10 percent to Thailand. China saw a sharp 82 percent increase.

The United States exported 32.5 million pounds of dry whey, down 20.1 percent, as shipments to China were down 59 percent. However, demand from Indonesia, Vietnam and Japan helped offset some of the declines. Year-to-date, dry whey exports are down 26.6 percent from a year ago but up 0.8 percent from two years ago.

Fundamental data is a “mixed bag,” according to Matt Gould, analyst and editor of the Dairy and Food Market Analyst newsletter. Speaking in the April 11 “Dairy Radio Now” broadcast, Gould said cheese and butter exports are soaring because “the cheapest products in the world are in the United States” and international customers are calling U.S. suppliers — sometimes for the first time — to secure product.

Milk output in Europe is faltering, Gould said, and supplies have contracted. The invasion of Ukraine has caused disruptions for grains and fertilizers, subduing our biggest competitor in the world, Europe, and preventing them from supplying those international customers; so they’re coming to the United States.

That’s good news for America’s dairy farmers, Gould said. However, powder exports were down in February and we’re seeing surprisingly strong dairy production in the United States. Both are a concern.

We would likely be exporting even more if port congestion wasn’t still an issue. Gould said practically every U.S. exporter has lost sales because of it. However, the shut downs in China are actually helping improve the situation — though it might just be a temporary improvement, he concluded. n

Dairy prices entered second quarter mixed. The cheddar blocks fell to $2.2625 per pound on April 4, but rallied to an April 8 close at $2.32. This is up 2.5 cents on the week and 49 cents above a year ago.

The barrels closed at $2.3675, up 11.5 cents on the week, 67.5 cents above a year ago, and an inverted 4.75 cents above the blocks. There were nine cars of block that traded hands on the week at the CME and 21 of barrel.

This week’s narrative was similar for Midwest cheesemakers from the past two weeks, reports Dairy Market News. Some plants continue to run lighter schedules, adding to maintenance, due primarily to staffing shortages. Others are clearing more of the milk that would normally flow to other plants. Spot milk at midweek was mostly discounted, although some was at Class. Cheese demand remains steady to busy. Cheddar and pizza cheese producers relay that buyers have been more active in recent weeks. Cheese inventories are moving well.

Spot butter closed April 8 at $2.7825 per pound, up 7.25 cents on the week and 90.25 cents above a year ago, with 19 sales reported on the week.

Cream is expected to tighten due to the approaching spring holidays, but butter producers continue

The Land Staff Writer Emeritus

WINTHROP, Minn. — When asked about the current mood of farmers this spring vs. their attitudes in spring of 2021, AgQuest’s Vince Stool commented, “I think it’s a different optimism. Today we’re in the midst of better commodity prices which helps mitigate higher input costs. This past season, in this immediate area, we were blessed with very good crops. Current commodity markets support some good bottom lines; however, risks are always involved. Farmers are cautiously optimistic … the basic nature of famers every spring. They understand maintaining a profit is their key to existence.”

Founded in 1992, AgQuest specializes in agriculture financing, crop insurance, property and casualty insurance and leasing. They are headquartered in Morgan, Minn.

I visited with Stool at the March 24 Sibley/Nicollet County Corn and Soybean Growers’ annual banquet at United Famers Coop in Winthrop, Minn. Stool is a money management guy with AgQuest. So from me, this logical question: Do you encourage forward pricing when markets suggest it’s the thing to do?

Stool didn’t hesitate, saying, “I know some lenders don’t want to be involved in the marketing option; but I like to educate. I like to make certain our farm clients understand all their tools available so I’m not afraid to encourage them if I know they are at a certain level of profit margin. I use the analogy that when the plate of cookies comes around, just maybe you should take at least one cookie — because the next time it comes around that plate might be empty. I’m not saying sell everything, but I’m also saying don’t sit on your hands and do nothing. It simply boils down to manage your risks.”

So is the very competitive nature of farmers generating that ugly word ‘greed’; or is that inevitably the capitalistic nature of American agriculture?

Stool responded, “You hit the nail partially on the head because of our capitalistic society. That’s some of the freedoms this system gives us. I love the freedoms this country has afforded to so many people … so I want to make certain we don’t throw out the baby with the bath water. And I certainly don’t want to squash capitalism if that comes with the cost of us losing our freedoms. But these freedoms come with some responsibilities too. It’s fair to say the vast majority of agriculture is about sustainability — making certain we are doing something about the next generation too. There are some large farms upwards of 15,000 acres. But if that mega farm is supporting five farm families, then everything is okay to me.”

Stool’s father is an immigrant from Holland. “My parents are both immigrants. My dad came to America in 1953 to evaluate if U.S. agriculture was an opportunity. He didn’t see his homeland providing much future. He was here two years and decided, ‘I think I can make a go of it here in America.’ So he want back home and married his girlfriend and then brought her to America. They started in the Mankato area at Easton (Minn.) Some families in that area sponsored them — including finding a farm residence which led to some crop-share farming. And then in the fall of 1968 they moved to the Winthrop area, bought an operating farm which has now moved into the second generation with my older brother Harry.”

Have you been back to Holland?

“Yes, indeed. One of the gifts from our parents to all of us kids was a gift trip back to Holland. There were 11 of us — eight sisters and three boys. My dad raised crops and had some hogs. When I was real young we had some sheep too. But it was a hog operation then and still is today. I was back there in 1978 when I was 12 years old. Holland is still an independent country; farmers own their property. There is some similarity to Canadian cooperative milking operations; but in general, farmers in Holland today operate in a capitalistic economy.”

So how to you envision the future of American agriculture — especially for the younger ‘wannabe’ guys? “I would say they are prudent,” replied Stool. “Some financial assist from parents or in-laws is certainly helpful. They certainly can access tools to assist them such as various young farmer programs; or beginning farmers programs; even crop insurance packages such as offered through AgQuest here at Winthrop; and there’s a wide plethora of lending agencies out there also. And thankfully, here in America, there are multiple generations to support the next generation coming on.”

“As I look around, I don’t view any successful farmer today who hasn’t made it without some help of some kind. We can be very sensitive to subsidies and government assistance; but when you boil it down it often amounts to personal assistance. Even my dad, who came to America with $250 in his pocket, still needed some help. There’s nary any farmer today who didn’t have some other outside help that assisted in getting started.”

So what guide stones enabled your father to come here and carve out a new career as an American farmer?

Stool paused slightly, then commented, “Dad ultimately let the economics tell him what to do. He also had a deep faith and I’m certain he took his prayers to God; because he once told me, ‘Son, the Lord will open doors and the Lord will close doors.’ And the door was open when he and my mother moved to Winthrop. But there was also a great community in the Easton area which supported my parents when they originally settled in that area … taught them the ropes as to ‘this is how you do this in America.’”

“My mom and dad were driven by a very strong ethical foundation and a strong faith in God. Their premise: just do the right thing, even when it may not be the most popular, good things will come. Plus my dad had a strong work ethic. The times my dad literally broke his back doing the manual labor to make himself successful, provide for his family, and grow food for the other people of this world; that has spilled over to every one of his children today and we too are most grateful.” v

to churn what cream they get. Regional butter makers continue to find locally sourced cream and some from the West. Butter demand remains hearty but spring demand was slower to pick up, according to some. Food service has been particularly busy in recent weeks. Bulk butter remains tight and at premiums. Export demand has notably picked up, according to Dairy Market News.

Cream has tightened in recent weeks, but remains available. Butter demand is steady at food service and trending higher at retail. Export demand is steady but port congestion prevents selling greater volumes.

Grade A nonfat dry milk saw an April 8 finish at $1.8225 per pound, losing 2.75 cents on the week, but still 61.75 cents above a year ago, with 16 cars sold.

Dry whey fell to 59 cents per pound on April 4 (the lowest CME price since Oct. 4) but closed April 8 at 63.5 cents per pound. This is up 2.5 cents on the week, 23.25 cents below its record peak on Feb. 8 of 86.75 cents, and is a half-cent above a year ago. There were eight sales reported on the week at the CME.

The Margin Watch detailed February milk output and cautioned, “While the pace of the decline in milk production slowed in February, high feed costs and increased operating expenses will likely temper potential expansion. New Zealand milk production also continues to decline due to similar pressures as February milk collections plunged 8.2 percent from last year or 159,000 metric tons to 1.773 million metric tons. The drop represented the steepest yearover-year decline in percentage terms since March 2019 and was the seventh straight season-over-season monthly drop.”

In the week ending March 26, 64,200 dairy cows were sent to slaughter, up 100 from the previous week, but 1,800 head or 2.7 percent below a year ago.

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