By E. W. Lang

More news was bad news on the Pro-Farmer Crop Tour this past week. Bad news in that corn and soybean yield estimates by the crop scouts appear to be lower than last year. Bad news in that the markets didn't care, and continued to lose ground.

"Pro Farmer estimates the 2019 U.S. corn crop at 13.358 billion bushels, based on an average yield of 163.3 bu. per acre. That compares to USDA’s Aug. 1 estimate of 169.5 bu. per acre. For soybeans, the Pro Farmer production estimate is 3.497 billion bushels, with a national average yield of 46.1 bu. per acre, down from the 48.5 bu. per acre USDA estimated in August.

“Ear counts were lower than last year in all of the Crop Tour states as a result of the rough spring conditions,” said Brian Grete, Pro Farmer editor. “We also found a corn crop that was, in many cases, multiple weeks behind in maturity due to the record-slow planting.”

https://www.agweb.com/…/pro-farmer-national-corn-soybean-yi…

September corn ended the week on the CME at $3.60 per bu., a loss of 23 cents in the last couple weeks, soybeans and soybean meal suffered similar losses. This is all pretty bad news for crop farmers, and good news for dairy farmers, EXCEPT that September Class III Milk lost 60 cents this past week.

Oops.

September's Milk-Feed Index went under $10 per cwt., a loss of, heck, 40 cents in five trading days. The Index is still historically high, but off four percent from a week ago when it was $10.32 per cwt. It was $9.90 when markets closed today. Those of us holding out for margins 'more like $11 should remember that when pigs become hogs they get slaughtered.

Sept. Class III milk ended the week at $17.22 per cwt., down from a contract high of $18.09 in June. (See disturbing chart) The contract low was $16.01 in January, 2019. Class IV ended the week at $16.53 per cwt., was $17.66 in June for a high and $16.01 for a contract low early this year. If memory serves, thr nearby Class III started September of last year at $17 plus small change, only a little lower than it is right now. That $17 milk in early fall was followed by a winter of discontent.

Speaking of discontent, the USDA Cold Storage Report came out today and whacked barrel cheese and butter but good. I'll spare you the recitation. USDA also reported that the national milk-cow herd is now at a three-and-a-half-year low. So, that-was-good-to-hear.

Milk supplies have been little tight in Florida and Arizona, owing to hot weather, and schools opening and needing delicious milk for luncheon. As such, spot milk price has been running at Class III to a dollar fifty over. That's fully fifty cents higher than a couple weeks ago. To me, this seems like a bright spot in milk production. And at this moment in history, it's one of the few bright spots in agriculture. Let's hope some shortages persist for a few more weeks and orphan loads increase in value.

Dairy cows at slaughter were $64 to $69 for medium yield Holsteins at Turlock, California, this week Most were $47 to $57 at Premiere in Withee, Wisconsin, where top quality milk cows sold for $1275 to $2000 on five herd dispersals. Springers ran from $950 to $1550. Holstein bull calves sold from $40 to $115 per head, single birth Holstein females fetched $20 to $70. Beef calves sold for $150 to $290 on the top end. Good fresh and close Holstein and Jersey prices are moving in concert with milk margins plus beef value.

There was some blood letting on Wall St. today. The major indices lost well over two- and up to three-percent of their value. The VXF, which is a fund that owns a little bit of almost every publicly traded company in the USA, lost 2.61% today, and closed at $113 per share. For reference, the VXF was at an all time high of $125 one year ago, and at a recent low of $93 on Christmas eve, four months later.

____________________________________

The author identifies as a farmer near Brooklyn, Iowa