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On Cows and Markets

By E. W. Lang

Total usage of milkfat increased by 2.2% year-over-year in the first half of this year, this reported by USDA. Estimates of nonfat milk solids usage was up 0.4% while butter use was up 1.2% and total cheese usage increased 1.8%.

Year to date fluid milk sales, however, moved in the opposite direction, with total sales decreasing 4.1% from last year. Whole milk sales were steady, but skim milk sales were down 12%.

Plant based milk product sales are increasing, but a about half the rate of last year's sales growth.

Speaking of plant based "milk," farmer-owned dairy cooperative, Dairy Farmers of America, has launched a crossbred of cows' milk plus oat and almond drink. This may increase total cow-milk sales, or it may at least slow the decline of cow-milk sales. It may also make the job of DFA field staff rather unpleasant when visiting producer farms. DFA directors will likely be getting some less than cordial letters and email correspondence, as well.

Block Cheddar reached a 33 month high this week at $1.89 per lb. Barrels are at $1.76 per lb. Butter ended the week up two-and-a-half cents at $2.34. Despite an increase of one and four cents on cheese, Class III milk future prices lost two to 15 cents in 15 of the next 16 trading months. They now range from $16.50 to $17.85 per cwt. Class IV milk futures average $17.30 from now through December, 2020.

US almond price is at a current level of $2.44 per lb., down from $2.53 one year ago. For reference, December, 2014 almonds were $4 per lb., and December, 2008 almonds were $1.45. December oats ended the week at $2.74 per bu. in Chicago, down from the nearby contract high of almost $3.00 in July.

Milk-Feed Indices remain at a historically high $10 plus change for the near term. This $10 level was topped for the first time in five years after corn price tanked on Monday and Tuesday, following the August USDA crop report.

Conventional wisdom is that the USDA report is fake news, where the acres were figured using common core math standards, and yields were estimated in Base 7. Many feel corn and beans will go way back up, once the Pro-Farmer Crop Tour info starts to come in. Corn price recovered some today and eroded the Milk-Feed Index by a few cents.


The author identifies as a farmer near Brooklyn, Iowa