Appalachian Milk Price Up $0.37/cwt Since December
Milk Production: Milk production in the 23 major states during December totaled 17.1 billion pounds, up 0.9% from December 2017. Production per cow for December averaged 1,966 pounds. The number of milk cows was 8.72 million head, down 2,000 head from November 2018. November production was revised down 0.1% from preliminary estimates. For milk production in the top 5 producing states, California was up 1.7% from December a year ago; Wisconsin up 1.4%; Idaho up 4.9%; New York up 2.1%; and Texas up 4.8%. Other states with large production increases were Colorado (6.0%), South Dakota (5.5%), Kansas (5.3%), and Washington (4.8%). The states reporting a large decline in production compared to December 2017 were Virginia (-12.3%), Illinois (-9.7%), Florida (-7.2%), and Pennsylvania (-6.0).Milk Price and Utilization: The Southeast Uniform milk price for January was $18.27, up $0.27 from December and $0.27 higher than January 2018. The Appalachian Uniform milk price was $17.82, up $0.37 from December and $0.29 higher than January 2018. January’s Class III price was $13.96, up $0.18 from December, and $0.04 lower than January a year ago. The Class IV price was up $0.39 from December to $15.48, and $2.35 higher than January 2018. The Class I Mover price for March is $15.98, up $0.68 from February. The milk/feed ratio for January was 2.05, 0.01 higher than December.
Southeast Class I utilization was 75.94%, up 5.92% from December, and 4.40% higher than January a year ago. The Uniform butterfat price was $2.5249, down 0.79 cents from last month and 4.26 cents higher than January 2018. The January Class I price was $18.92. February Class I price is $19.10. Appalachian Class I utilization was 75.83%, up 9.26% from December, and 4.70% higher than January a year ago. The Uniform butterfat price was $2.5240, down 0.71 cents from last month and 4.24 cents higher than January 2019. The January Class I price was $18.52.Cheese Production and Stocks: Total cheese production in December was 1.09 billion pounds, down 1.2% from a year ago while butter production was down 0.1% to 171 million pounds. Nonfat dry milk (NDM) production was down 13.0% compared to a year ago with total production at 143 million pounds while skim milk powder (SMP) production was up 1.8% to 50.8 million pounds compared to a year ago.Springer Prices and Cow Slaughter: At Smiths Grove, Kentucky on February 26, supreme springers and US approved springers were not tested. Dairy cow slaughter in December was 261,200 head, down 6,800 head from November and 13,900 more than December 2017.
Southeast Federal Order Prices
Month
Uniform Price $/cwt.
Class I Price $/cwt.
Class III Price $/cwt.
Class IV Price $/cwt.
Class I
% Utilization
Butterfat Price $/lb.
Aug 18
17.53
17.95
14.95
14.63
75.65
2.5897
Sep 18
17.94
18.65
16.09
14.81
74.76
2.5903
Oct 18
19.39
20.13
15.53
15.01
78.53
2.5658
Nov 18
18.71
19.32
14.44
15.06
78.39
2.5651
Dec 18
18.00
18.85
13.78
15.09
70.02
2.5328
Jan 19
18.27
18.92
13.96
15.48
75.94
2.5249
Appalachian Federal Order Prices
Month
Uniform Price $/cwt.
Class I Price $/cwt.
Class III Price $/cwt.
Class IV Price $/cwt.
Class I
% Utilization
Butterfat Price $/lb.
Aug 18
17.03
17.55
14.95
14.63
72.47
2.5914
Sep 18
17.35
18.25
16.09
14.81
69.42
2.5864
Oct 18
18.76
19.73
15.53
15.01
74.50
2.5654
Nov 18
18.12
18.92
14.44
15.06
74.77
2.5635
Dec 18
17.45
18.45
13.78
15.09
66.57
2.5311
Jan 18
17.82
18.52
13.96
15.48
75.83
2.5240
What is the Market Offering for Milk to be Sold in May?
Ex: It is Feb. 28 and May Class III milk futures are trading at $15.16. Local May basis estimate is +$3.00.
If May futures
=
16.75
15.25
13.75
and actual blend price
=
19.75
18.25
16.75
Sample Strategies
Realized Prices for May Milk
1) Sold Futures
@
15.16
18.16
18.16
18.16
2) Bought Put
14.25
@
0.07
19.68
18.18
17.18
3) Bought Put
14.75
@
0.18
19.57
18.07
17.57
4) Bought Put
15.25
@
0.37
19.38
17.88
17.88
5) Synthetic Put
Sold Futures
@
15.16
Bought Call
16.25
@
0.09
18.57
18.07
18.07
What is the Market Offering for Milk to be Sold in June?
Ex: It is Feb. 28 and Jun. Class III milk futures are trading at $15.48. Local Jun. basis estimate is +$3.00.
If June futures
=
17.00
15.50
14.00
and actual blend price
=
20.00
18.50
17.00
Sample Strategies
Realized Prices for June Milk
1) Sold Futures
@
15.48
18.48
18.48
18.48
2) Bought Put
14.50
@
0.10
19.90
18.40
17.40
3) Bought Put
15.00
@
0.21
19.79
18.28
17.79
4) Bought Put
15.50
@
0.40
19.60
18.10
18.10
5) Synthetic Put
Sold Futures
@
15.48
Bought Call
16.50
@
0.14
18.84
18.34
18.34
Wyatt Bechtel
Tue, 03/05/2019 – 06:04
Category
Dairy (General)
Milk Prices
Southeast (U.S.)
Comments
Milk Prices
Dairy
News Article
Image Caption
Milk tanker.
Image Credit
Rick Mooney
Source: Dairy Herd
