2018 September Board Book

National Dairy Situation & Outlook USDA Estimates

Federal Order Minimum Class Prices

Hundredweight Prices Class I Phoenix, Arizona

Jun.

Jul.

Aug.

$17.60 $17.71

$16.50 $16.05 $17.40

Milk Production

Portland, Oregon $17.15 $17.26

Boston (Northeast)

$18.50 $18.61 $15.21 $14.10

Monthly: USDA estimates milk production in the 23 major U.S. States increased 1.3% in June 2018, compared to June 2017. USDA reports that California milk production increased 0.5% compared to June 2017 (with 14,000 less cows and 25 more pounds of milk per cow). Among other western states, compared to June 2017, Arizona was up 0.9%; New Mexico was up 1.4%; andWashington was up 2.2%. Two of the top ten milk producing states reported a production decrease. Overall, the largest percent increase was reported by Colorado at 10.7% growth in milk production (on 17,000 more cows and same pounds of milk per cow, compared to June 2017). Quarterly: For the second quarter of 2018 compared to the first quarter of 2018, U.S. milk cow numbers decreased to 9.405 million head, milk production per cow increased to 5,930 pounds; the net effect was an increase in milk production to 55.8 billion pounds. USDA projects that for the third quarter of 2018 compared to the second quarter of 2018, milk cow numbers will decrease to 9.400 million head, production per cow will decrease to 5,735 pounds; the net effect would be a decrease in milk production to 53.9 billion pounds. Milk Prices Comparing the second quarter of 2018 to the first quarter of 2018, the Class III price increased from $13.87/cwt. to $14.95/cwt.; the Class IV price increased from $13.01/cwt. to $14.32/cwt.; and USDA projects that for the second quarter of 2018 compared to the first quarter of 2018, the U.S. average all-milk price will increase from $15.67/cwt. to $16.20-16.30/cwt. Utility Cow Prices Comparing the second quarter of 2018 to the first quarter of 2018, the average U.S. utility cow price was down $0.28/cwt. to a national average of $61.32/cwt. USDA projects that the utility cow price will average $58-$62/cwt. in the third quarter of 2018. Top Ten Milk Production States - June 2018 (Percent Change from Same Month/Previous Year)

Class III

N/A

USDA Dairy Cow Culling Activity

U.S. Dairy Cows

West Region 2 Price Range

Region 9 1 Dairy Cows

Week Ending

Head

Head

$/cwt.

06/22/18

12,500

53,200

$64-$64

06/29/18

13,000

57,700

$66-$66

07/06/18

12,300

47,100

-

07/13/18

14,200

58,100

-

1 Region 9 includes AZ, CA, HI and NV 2 West region includes AZ, NV, UT, CA, ID, OR andWA Source: USDA Market News: Report LM_CT168 and SJ_LS714

USDA Commercial Cold Storage Report

Butter American Cheese Nonfat Dry Milk 2017 2018 2017 2018 2017 2018 In Million Pounds

Month

January

222 270 273 292 310 307 280 256 218 159 169 314

227 266 274 307

722 745 773 805 810 832 801 780 740 733 747 816

742 763 767 780

227 307 263 298 246 298 267 273

February

March

April

May

338

805

280 271

June

336

803

298 302

July

296 313 321 317 317 320

August

September

October

November December

Source: USDA, Farm Services Agency, NASS Cold Storage and Dairy Products. (As published in the Dairy Market News)

USDA Milk-Feed Price Ratio

USDA reports that the milk-feed price ratio for June 2018 was 1.98 (up from 1.90 in May 2018). The current ratio of 1.98 means that a dairy producer can buy 1.98 pounds of feed for every pound of milk sold. The prices used to calculate the June 2018 milk-feed price ratio were: corn $3.58/bushel; soybeans $9.55/bushel; alfalfa hay $181/ton; all-milk price $16.30/cwt.

1. California +0.5% 2. Wisconsin +1.2% 3. New York +1.4%

6. Michigan +1.3% 7. Pennsylvania -0.2%

-0.6% +1.4% +2.2%

8. Minnesota 9. New Mexico 10. Washington

4. Idaho

+1.0%

5. Texas +6.6%

Prices used to calculate the milk-feed price ratio are based on U.S. prices and don’t necessarily reflect California prices.

Information from the USDA-NASS publication “Milk Production” and the USDA-ERS publication: “Livestock, Dairy, and Poultry Outlook.”

California Dairy Review

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