2018 March Board Book

National Dairy Situation & Outlook USDA Estimates

Federal Order Minimum Class Prices

Hundredweight Prices Class I Phoenix, Arizona

Dec.

Jan.

Feb.

$19.23 $17.79

$16.60 $16.15 $17.50

Milk Production

Portland, Oregon $18.78 $17.34

Boston (Northeast)

$20.13 $18.69 $15.44 $14.00

Monthly: USDA estimates milk production in the 23 major U.S. States increased 1.2% in December 2017, compared to December 2016. USDA reports that California milk production decreased 0.3% compared to December 2016 (with 14,000 less cows and 10 more pounds of milk per cow). Among other western states, compared to December 2016, Arizona was up 1.5%; New Mexico was up 3.1%; andWashington was down 1.1%. Four of the top ten milk producing states reported a production decrease. Overall, the largest percent increase was reported by Colorado at 9.2% growth in milk production (on 11,000 more cows and 45 more pounds of milk per cow). Quarterly: For the fourth quarter of 2017 compared to the third quarter of 2017, U.S. milk cow numbers decreased to 9.400 million head, milk production per cow decreased to 5,655 pounds; the net effect was a decrease in milk production to 53.2 billion pounds. USDA projects that for the first quarter of 2018 compared to the fourth quarter of 2017, milk cow numbers will increase to 9.410 million head, production per cow will increase to 5,770 pounds; the net effect would be an increase in milk production to 54.3 billion pounds. Milk Prices Comparing the fourth quarter of 2017 to the third quarter of 2017, the Class III price increased from $16.13/cwt. to $16.34/cwt.; and the Class IV price decreased from $16.36/cwt. to $14.12/cwt. USDA projects that for the fourth quarter of 2017 compared to the third quarter of 2017, the U.S. average all-milk price will increase to $17.75-$17.85/cwt. Utility Cow Prices Comparing the fourth quarter of 2017 to the third quarter of 2017, the average U.S. utility cow price was down $11.10/cwt. to a national average of $58.68/cwt. USDA projects that the utility cow price will average $60-$64/cwt. in the first quarter of 2018.

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.

12/22/17

16,100

61,400

$60-$60

12/29/17

13,500

44,600

-

01/05/18

15,300

53,700

$60-$60

01/12/18

18,600

65,700

-

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 2016 2017 2016 2017 2016 2017 In Million Pounds

Month

January

192 236 243 296 328 333 319 269 228 161 166 325

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

716 716 726 734 757 770 742 743 736 713 726 758

752 773 802 834 810 832 801 780 740 733 747 837

226 227 217 262 232 247 252 267 231 296 257 296 235 313 216 321 224 300 215 317 226 330 232 281

February

March

April

May

June

July

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

Top Ten Milk Production States - December 2017 (Percent Change from Same Month/Previous Year)

USDA reports that the milk-feed price ratio for December 2017 was 2.38 (down from 2.54 in November 2017). The current ratio of 2.38 means that a dairy producer can buy 2.38 pounds of feed for every pound of milk sold. The prices used to calculate the December 2017 milk-feed price ratio were: corn $3.23/bushel; soybeans $9.30/bushel; alfalfa hay $148/ton; all-milk price $17.20/cwt.

-0.3%

1. California

6. Michigan

+2.5%

2. Wisconsin +1.0%

7. Pennsylvania +0.5% 8. Minnesota +1.1%

-2.2% -0.2% +8.1%

3. New York

4. Idaho 5. Texas

9. New Mexico 10. Washington

+3.1% -1.1%

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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