In The Cattle Markets: Dairy Rumors Roil Some Cattle Markets

Over the last two weeks, a rumor has come up in several Western cattle auctions and even in the futures market about an impending dairy cow buyout.  ( Wyatt Bechtel )

I expect enough analysts have discussed USDA’s Cattle Inventory report this week so I’m going to tackle another issue. Over the last two weeks, a rumor has come up in several Western cattle auctions and even in the futures market about an impending dairy cow buyout. This rumor was used as the explanation for lower prices. Most remember (either you were around then, or you have heard the stories from your elders) the government dairy herd buyout in the 1980s to deal with ruinous levels of production, stocks, and prices. That was also a time period where farm programs used a number of tools to limit production (high acreage reduction programs and payment-in-kind). More recent herd retirement programs run by private industry remain embroiled in lawsuits. There is no appetite or serious talk for any herd buyouts, either in the federal government or private industry efforts. 

But, this rumor provides a good chance to examine current events in the dairy market. Large worldwide milk production has led to lower milk prices. Some very interesting trends in milk demand have enabled the industry to use up growing supplies in recent years. Exports have been a growth area. But, growing milk supplies around the world have pressured our export sales. In the U.S., growing butter consumption, the shift to greek and other yogurts, the use of milk in a variety of new drinks, and continued growth in cheese consumption supported expanding milk production. It appears that the market has reached the point where demand growth is not enough to offset supply growth at profitable prices. 

The announced Class III price was $14 per cwt, last month, and Class III futures are mired in the mid-$13s for the next few months. Milk prices have declined enough to finally force a little more cow culling and slowing milk production. Some cow culling has come from farms exiting production. Production growth in some regions of the U.S. has hit the limit of processors to use the milk. The end result has been some producers losing their milk market.

Dairy cow slaughter picked up early in 2018, up year-over-year about 3.6 percent in January. For the year 2017, dairy cow slaughter was up 3.7 percent over 2016.  When combined with increased beef cow culling, cow slaughter was up over 6 percent last year. Cull cow prices in the Southern Plains have started out the year at about $55 per cwt about $5 below the same time a year ago. It’s likely that dairy cow slaughter will pick up some more with lower milk prices. The larger beef cow herd will result in more culling, also. More cow beef will keep cull prices below 2017’s well into 2018.

The Markets

Fed cattle prices finished the week at about $126, down a $1 from the week before. The Choice beef cutout continues to hold about $209 with a spread of about $5 above Select. Calf markets reported generally higher prices than the week before. Drought conditions are persisting in the Plains.

Comments

Restricted HTML

  • Allowed HTML tags: <a href hreflang> <em> <strong> <cite> <blockquote cite> <code> <ul type> <ol start type> <li> <dl> <dt> <dd> <h2 id> <h3 id> <h4 id> <h5 id> <h6 id>
  • Lines and paragraphs break automatically.
  • Web page addresses and email addresses turn into links automatically.
8 + 3 =
Solve this simple math problem and enter the result. E.g. for 1+3, enter 4.
Submitted by plastic surgery on Mon, 02/12/2018 - 00:30

hey what a great information that is. it's a very good block. i am here to tell you about plastic surgery. you can get complete information about plastic surgery just visit here problems with plastic surgery for more info.

Submitted by Men Shoes on Thu, 04/12/2018 - 02:29

As a blogger, I am sure that you would like your blog to make some serious noise online. You want people to talk about it and you want your visitors to recommend it to their friends and family members.https://buymensshoesblog.wordpress.com/

Submitted by ligexona on Sun, 04/15/2018 - 16:35

For Ashford Student Portal Login, any student should have the login credentials i.e. Username and Password. After logging into their account, students can access anything which is needed.

Submitted by garrys mod free on Mon, 04/16/2018 - 03:29

Top publish but i was wondering if you may write a litte greater on this challenge? I’d be very grateful if you can complicated a touch bit in addition. respect it! https://bestgmodgames.weebly.com/