Appalachian Milk Price Falls $1.83/cwt Since July 2017
Milk Production: Milk production in the 23 major states during July totaled 17.3 billion pounds, up 0.4% from July 2017. Production per cow for July averaged 1,980 pounds. The number of milk cows was 8.74 million head, down 8,000 head from June 2018. June production was revised up 0.2% to 17.2 billion pounds. For milk production in the top 5 producing states, California was down 2.5% from July a year ago; Wisconsin up 1.2%; Idaho up 0.8%; New York up 0.6%; and Texas up 7.3%. Other states with large production increases were Colorado (8.9%), Kansas (7.6%), Utah (5.1%), and South Dakota (3.6%). The states reporting a large decline in production compared to July 2017 were Florida (-5.9%) and Virginia (-5.0%).
Milk Price and Utilization: The Southeast Uniform milk price for July was $18.12, no change from June and $1.52 lower than July 2017. The Appalachian Uniform milk price was $17.52, down $0.29 from June and $1.83 lower than July 2017. July’s Class III price was $14.10, down $1.11 from June, and $1.35 lower than July a year ago. The Class IV price was down $0.77 from June to $14.14, and $2.46 lower than July 2017. The Class I Mover price for August is $14.85, up $0.70 from August. The milk/feed ratio for July was 1.91, down 0.07 from June.
Southeast Class I utilization was 73.31%, up 5.48% from June, and 5.80% higher than July a year ago. The Uniform butterfat price was $2.6108, down 4.89 cents from last month and 25.73 cents lower than July 2017. The July Class I price was $19.16. August Class I price is $17.95. Appalachian Class I utilization was 69.06%, up 2.06% from June, and 3.14% higher than July a year ago. The Uniform butterfat price was $2.6030, down 5.77 cents from last month and 27.05 cents lower than July 2017. The July Class I price was $18.76.
Cheese Production and Stocks: Total cheese production in June was 1.06 billion pounds, up 1.8% from a year ago while butter production was up 3.1% to 143 million pounds. Nonfat dry milk (NDM) production was down 9.0% compared to a year ago with total production at 148 million pounds while skim milk powder (SMP) production was up 49.2% to 58.9 million pounds compared to a year ago. Total cheese stocks at the end of July were up 3% from July a year ago and up 2% from the previous month while butter stocks were down 6% from last month and up 3% from a year ago.
Springer Prices and Cow Slaughter: At Smiths Grove, Kentucky on August 28, supreme springers were not tested while US approved springers were $1,175 per head, down $25 from the previous month. Dairy cow slaughter in July was 239,600 head, up 2,100 head from June and 13,800 more than July 2017.
Southeast Federal Order Prices
Month
Uniform Price $/cwt.
Class I Price $/cwt.
Class III Price $/cwt.
Class IV Price $/cwt.
Class I
% Utilization
Butterfat Price $/lb.
Feb 18
16.57
18.05
13.40
12.87
68.06
2.4196
Mar 18
16.30
17.16
14.22
13.04
64.74
2.4081
Apr 18
16.88
17.90
14.47
13.48
65.02
2.4944
May 18
17.46
18.74
15.18
14.57
67.75
2.5813
Jun 18
18.12
19.05
15.21
14.91
67.83
2.6597
Jul 18
18.12
19.16
14.10
14.14
73.31
2.6108
Appalachian Federal Order Prices
Month
Uniform Price $/cwt.
Class I Price $/cwt.
Class III Price $/cwt.
Class IV Price $/cwt.
Class I
% Utilization
Butterfat Price $/lb.
Feb 18
16.31
17.65
13.40
12.87
68.78
2.4179
Mar 18
16.02
16.76
14.22
13.04
66.81
2.4084
Apr 18
16.56
17.50
14.47
13.48
65.80
2.4957
May 18
17.20
17.84
15.18
14.57
67.75
2.5845
Jun 18
17.81
18.65
15.21
14.91
67.00
2.6607
Jul 18
17.52
18.76
14.10
14.14
69.06
2.6030
What is the Market Offering for Milk to be Sold in November?
Ex: It is Aug. 31 and Nov. Class III milk futures are trading at $16.52. Local Nov. basis estimate is +$3.00.
If November futures
=
18.00
16.50
15.00
and actual blend price
=
21.00
19.50
18.00
Sample Strategies
Realized Prices for November Milk
1) Sold Futures
@
16.52
19.52
19.52
19.52
2) Bought Put
15.50
@
0.14
20.86
19.36
18.36
3) Bought Put
16.00
@
0.27
20.73
19.23
18.73
4) Bought Put
16.50
@
0.49
20.51
19.01
19.01
5) Synthetic Put
Sold Futures
@
16.52
Bought Call
17.50
@
0.17
19.85
19.35
19.35
What is the Market Offering for Milk to be Sold in December?
Ex: It is Aug. 31 and Dec. Class III milk futures are trading at $16.31. Local Dec. basis estimate is +$3.00.
If December futures
=
17.75
16.25
14.75
and actual blend price
=
20.75
19.25
17.75
Sample Strategies
Realized Prices for December Milk
1) Sold Futures
@
16.31
19.31
19.31
19.31
2) Bought Put
15.25
@
0.18
20.57
19.07
18.07
3) Bought Put
15.75
@
0.33
20.37
18.92
18.42
4) Bought Put
16.25
@
0.54
20.21
18.71
18.71
5) Synthetic Put
Sold Futures
@
16.31
Bought Call
17.25
@
0.23
19.58
19.08
19.08
Wyatt Bechtel
Thu, 09/06/2018 – 15:11
Category
Dairy (General)
Milk Prices
Southeast (U.S.)
Comments
Milk Prices
Dairy
News Article
Source: Dairy Herd
