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  Title	Benchmark down 49 cents
  ID	4411834
  External ID	7285944900
  Author	Unknown
  Published Date	Nov. 8, 2024, 8:53 a.m.
  Summary	The October Federal Order Class III milk price headed down. The Agriculture Department announced the benchmark price at $22.85 per hundredweight (cwt.), is down 49 cents from September but $6.01 above
  Tags	None
  URL	https://www.thefencepost.com/news/benchmark-down-49-cents/
  Sentiment	Negative: 0.55587    Neutral: 0.02997    Positive: 0.41417
  Relevance	0.00581

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  Content ID	2629309
  Key	bb17d03e-0d5b-4865-81ad-ae4df880a616
  Content	The October Federal Order Class III milk price headed down. The Agriculture Department announced the benchmark price at $22.85 per hundredweight (cwt.), is down 49 cents from September but $6.01 above Oct. 2023. The 10-month average is $18.82, up from $17.10 a year ago, but compares to $22.20 in 2022. Friday, Nov. 1, Class III futures settlements portended a November Class III of $20.25; December, $19.67; and January 2025 was at $19.59 per cwt. The October Class IV price is $20.90, down $1.39 from September, 59 cents below a year ago, and the lowest Class IV in five months. Its average stands at $20.71, up from $18.93 a year ago, and compares to $24.82 in 2022. U.S. dairy farmers eked out small increases in milk production in August and September, according to USDA’s preliminary data, after seeing output lag year ago levels in 12 of the previous 13 months. September output was reported at 18.2 billion pounds, up 0.1% from Sept. 2023. The 24-State total, at 17.5 billion pounds, was up 0.2%. Component adjusted production was up 1.6%, according to StoneX Dairy Group. August output in the 50 states was revised up 89 million pounds from last month’s report, resulting in production being up 0.4%, instead of the 0.1% decrease originally reported. The 24-state total was raised 85 million pounds, resulting in a 0.5% gain from a year ago, instead of the 0.1% increase reported. September cows totaled 9.328 million head, unchanged from the August count which was revised up 3,000 head, but was 38,000 or 0.4% below Sept. 2023. The 24-State count, at 8.887 million, was also unchanged from August, which was revised up 9,000 head, but was 20,000 or 0.2% below a year ago. Output per cow in the 50 states averaged 1,950 pounds, up 9 pounds or 0.5% from a year ago. The 24-State average, at 1,966 pounds, was up 8 pounds or 0.4% from a year ago. HighGround Dairy points out “The most substantial growth came from Texas and Kansas where cheese capacity is being added, plus Idaho and South Dakota. Idaho’s totals have been up for three consecutive months, recovering from the year on year decreases earlier in 2024 due to avian influenza.” California, where the influenza has spread rapidly, saw milk production still rise 1 million pounds, virtually unchanged from a year ago. Cow numbers were down 4,000 head but output per cow was up 5 pounds. Next month’s report will likely show some revision to this data as well as a marked decrease in October milk output due to the bird flu. Wisconsin milk was down 14 million pounds or 0.5% from a year ago, on 4,000 fewer cows and 5 pounds less per cow. The Daily Dairy Report blamed poor forage quality for the decline. Colorado output was up 1.4%, on a 10 pound gain per cow, while cow numbers were down 2,000 head. Idaho was up 1.8% on 7,000 more cows and a 15 pound gain per cow. Both states had battled the bird flu. Kansas output was up 3.0%, thanks to 6,000 more cows outweighing a 10 pound drop per cow. Michigan was down 0.9% on 3,000 fewer cows and a 5 pound drop. Minnesota was down 2.0% on 9,000 fewer cows. Output per cow was unchanged. New York was up 1.2% on a 25 pound increase per cow. Cow numbers were unchanged. New Mexico again showed the biggest loss, down 9.1%, on a drop of 26,000 cows, although output per cow was up 15 pounds. South Dakota posted the biggest increase, up 7.9%, thanks to 16,000 more cows, though output per cow was down 5 pounds. Oregon was down 1.9% on 2,000 fewer cows. Output per cow was unchanged. Pennsylvania was up 0.1% on a 5 pound gain per cow. Cow numbers were down 1,000 head. Texas was up 4.9%, thanks to 20,000 more cows and a 35 pound gain per cow. Washington State was off 0.2% on a 20 pound loss per cow. Cow numbers were up 2,000 head. Utah has joined the list of states dealing with the bird flu. As to market traders, StoneX said, “The larger sentiment seems concerned about demand as seasonal demand tends to decline heading into year-end.” Cash Cheddar block cheese closed Friday, Nov. 1, at $1.8375 per pound, down 6.25 cents on the week, lowest since May 31, 24.25 cents below where it stood on Oct. 1, but was still 17.25 cents above a year ago. The barrels fell to $1.86 Thursday, Oct. 31, lowest since Oct. 14, but finished Friday, Nov. 1, at $1.8675, down a quarter-cent on the week, down 27.75 cents from Oct. 1, 22.75 cents above a year ago, and 3 cents above the blocks. Sales totaled 12 lots of block on the week and 57 for the month of October, up from 34 in September. Barrels totaled four on the week and 28 for the month, up from 21 in September. Cheesemakers had mixed views on demand last week, according to Dairy Market News. Some cheddar and/or Italian style cheesemakers said customers were adding to orders, in fact a few may be oversold. Others said the bullish push over $2 per pound created hesitation, despite prices settling back since then. Barrel contacts say loads are moving briskly. Cheese inventories are balanced to tight. Milk availability mid-week was slightly tighter than previous weeks, with spot prices ranging 50 cents to $1.50 over Class III. Western cheesemakers have a healthy demand for milk however, milk is tighter in the southwest as production is trending down. Domestic cheese demand is generally steady for most varieties, with Swiss demand stronger than a year ago. International demand is steady to stronger, with bookings for first quarter 2025 taking place, according to DMN. Butter saw some ups and downs on the week but closed Friday, Nov. 1, at $2.67 per pound, 2.50 cents lower, 8 cents lower on the month, and 43.75 cents below a year ago. There were nine sales on the week and a whopping 318 for the month, up from 102 in September. Butter makers say demand is on par with recent weeks. Prices in the $2.60 to $2.70 range has given incentive to re-enter the market, DMN said, though food service demand has been sluggish, particularly in the national chain sector. Butter production is busy, despite some plant downtime. Cream availability is wide open and offers are abundant. The bulls point to the potential of a strong seasonal retail push, while the bears suggest “The seasonally atypical amounts of cream availability and food service sluggishness will keep downward pressure on near- and mid-term pricing.” Butter production is generally strong in the West. Cream is widely available, with some being bought and delivered to more eastern regions. Planned downtime is approaching for some and contributing to busy production. Butter demand from domestic and international buyers is steady, DMN said. The powder closed Friday at $1.3775 per pound, up a quarter-cent on the week, up 2 cents lower from its Oct. 1 perch, and 19.25 cents above a year ago. There were 34 sales on the week and 120 for the month, up from 118 in September. Dry whey was unchanged all week, holding at 60.50 cents per pound, a quarter-cent higher than its Oct. 1 print, and 21.75 cents above a year ago. There were four sales on the week at the CME and 46 for the month, up from 38 in September. A higher All Milk Price and lower soybean prices nudged the September milk feed price ratio higher, advancing for the seventh time in the past eight months. The USDA’s latest Ag Prices report shows the September ratio at 3.00, up from 2.79 in August, and compares to 1.88 in Sept. 2023. The index is based on the current milk price in relationship to feed prices for a ration consisting of 51% corn, 8% soybeans and 41% alfalfa hay. One pound of milk would purchase 3 pounds of dairy feed of that blend. The All Milk Price averaged $25.50 per cwt., with a 4.15% butterfat test, up $1.90 from August, which had a 4.09 test, and was $4.60 above Sept. 2023, which had a 4.08% test. It is at the highest level since October 2022. California’s average, at $23.80 per cwt., was up $1.10 from September and $3.10 above a year ago. Wisconsin’s, at $25.50, was up $2.50 from August and $5.40 above a year ago. The national corn price averaged $3.98 per bushel, up 14 cents from August but $1.23 below a year ago. This is the first time since May that feed costs were up. Soybeans averaged $10.20 per bushel, down a dime from August and $3 per bushel below a year ago. Alfalfa hay averaged $172 per ton, down $3 from August and $53 per ton below a year ago. Looking at the cow side of the ledger; the September average cull price for beef and dairy combined was at $136 per cwt., down $6 from August, but $22 above September 2023, and $64.40 above the 2011 base average. Milk production margins moved to the highest level since September 2014 at $16.99 per cwt. and were $1.85 per cwt. above August, according to dairy economist Bill Brooks, of Stoneheart Consulting in Dearborn, Mo. “Income over feed costs in September were just short of the record high set in September 2014 at $17.03,” he said, “and above the $8 per cwt. level needed for steady to higher milk production for the 11th month in a row. Input prices were mostly lower in September with all three remaining in the top 11 for September all-time. Feed costs were the ninth highest ever for the month of September and increased 5 cents per hundredweight from August.” “Dairy producer profitability for 2023 in the form of milk income over feed costs, was $8 per cwt.,” Brooks said. “Profitability was $3.91 below 2022 and $1.72 lower than the 2018-22 average. In 2023, the decrease in milk income over feed costs was a result of the milk price decreasing more than feed prices. Income over feed was around the level needed to maintain or grow milk production.” “Milk income over feed costs for 2024, (using Oct. 31 CME settling futures prices for Class III milk, corn, and soybeans plus the Stoneheart forecast for alfalfa hay) are expected to be $13.53 per cwt., a loss of 41 cents per cwt. versus last month’s estimate. Income over feed in 2024 would be above the level needed to maintain or grow milk output and up $5.53 from 2023’s level,” Brooks said. Milk income over feed costs for 2025 are expected to be $14.41 per cwt., a gain of 88 cents per cwt. versus 2024, Brooks concluded. Income over feed would be above the level needed to maintain or grow milk production, and up 14 cents cwt. from last month’s estimate. More Like This, Tap A Topic
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