This week in dairy and milk markets was rather a snoozer, though margins on Class III milk over corn and soy prices gained about 50 cents this week and are well into the $11 per cwt. range for the rest of this year.  Milk lost a few cents, but corn and soybean meal prices lost a few more.

Class III Milk Futures for March, April, May and June average $23.52 per cwt., a loss of six cents for the week.  Class IV for those months lost 13 cents and averages $24.90.  Block Cheese lost six cents at $2.13 per lb.  Barrels were down two cents at $2.30 and butter gained a penny at $2.72 per lb. 

Top end Holstein cows remain in the $2,000 to $3,300 range and transformation in the dairy industry will deliver more beef calves and fewer dairy calves from dairy cows with each coming month.  As such, this may support high cow prices, even as milk declines in price.

This is based on recent information on semen sales in the United States.  More dairy females are delivering a higher percentage of beef calves over time, at least as sales numbers indicate.  I would guess that frozen semen consumers (farmers) tilt over center on the practice such that purebred Holsteins and Jerseys will be in short supply for two or three years. 

New technology and practices becomes common technology and practice after a few years, and it warps supply.  The opposite happened with sexed semen once it became widely accepted and used, as a couple years ago well bred open heifers were bringing feeder value, plus modest change, and breeders liquidated.

As a side note,  I think that the ProCross breeding scheme offers a way to mitigate this situation for producers.  I suspect that any surplus ProCross females would gain faster and more effeciently than would Holsteins or Jerseys, thus be worth more to implant and finish.  That's just idle speculation, but would warrant consideration by commercial producers needing to manage beef vs. dairy numbers.

Anyway, this ratio of dairy cross beef calf vs. purebred dairy calf situation seems to be a looming commodity bubble.  A commodity bubble burst over tulips 400 years ago, railroads 200 years ago, the dot coms 22 years ago, housing 13 years ago and is visiting university baccalaureates right now.