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Of Cows and Markets

By  E. W. Lang

Cooler, more comfortable weather offered some relief to the nation's dairy herd starting a few days ago, with higher milk production setting in over the last three or so days. During the extreme heat and since, plants were "comfortable" with milk volumes coming in, such that recent spot milk prices have run $1.00 per cwt. over, to $1.00 under Class III.

June milk production was 0.3% under June of last year. This is the second consecutive month that production has been down year-over-year. Bear in mind that increasing year-over-year butterfat tests would indicate that total solids produced for cheese, butter, etc., is a little closer to even, year-over-year, of course.

The USA dairy herd numbered 9.323 million cows in June, down one percent from a year ago. That 9.323 number is a 38 month low.

June milk per cow was up 0.6% - the same as it was in May. The long term trend is +1.1% so farmers are apparently feeding not an extra kernel of corn, nor an extra slice of hay, except maybe to a couple of the show cows, or maybe to a couple cows testing north of 2800 GTPI.

Fluid milk sales have been down - down 0.8% in May and down 4% in the four weeks ending June 16.. The animal abuse video, released in early June, was apparently a contributing factor to that 4% decrease

Dairy farmers are going to get 20 cents - half sooner, half later - as an adjustment for loss of recent international sales. The USDA subsidy will be based on the established DMC milk base, and available to producers milking cows on July 1 of this year. Last year we got 12 cents, so it's more, but not enough more to save a sinking ship, or even a small craft.

Corn, bean, hay and other (including pot, I am guessing) farmers are getting a similar market adjustment, based on a per acre number that's on a county by county basis. I see we're getting $68 per acre and the county next to us is getting $72 per acre. So it's not fair, obviously. See Cardinal and Gold graphic.

Cheese gained one and four cents on barrels and blocks this week. Butter lost almost three cents per lb. Class III prices ended the week about where they began.

Milk feed indices average about $9.60 per cwt. for the rest of this year. Corn and beans lost ground this week, and milk didn't, so that adds up to almost $2 over the $7.73 per cwt., 10 year history for the index. BTW, there's a reason I regularly include these milk-feed figures when they're this high above average... I am aware of few months in my life that the milk-feed index has been over $10 per cwt. It's close to that for the rest of this year.

The S & P 500 and NASDAQ hit new record highs today, each up 20.7% and 25.5% for the year. The Dow Industrials are up 16.6%.for the year.


The author identifies as a farmer near Brooklyn, Iowa