2018 March Board Book

National Dairy Situation & Outlook USDA Estimates

Federal Order Minimum Class Prices

Hundredweight Prices Class I Phoenix, Arizona

Oct.

Nov.

Dec.

$18.79 $18.76

$19.23 $18.78 $20.13

Milk Production

Portland, Oregon $18.34 $18.31

Boston (Northeast)

$19.69 $19.66 $16.69 $16.88

Monthly: USDA estimates milk production in the 23 major U.S. States increased 1.5% in October 2017, compared to October 2016. USDA reports that California milk production decreased 1.5% compared to October 2016 (with 13,000 less cows and 15 less pounds of milk per cow). Among other western states, compared to October 2016, Arizona was up 6.6%; New Mexico was up 1.2%; andWashington was down 0.5%. Three of the top ten milk producing states reported a production decrease. Overall, the largest percent increase was reported by Arizona at 6.6% growth in milk production (on 9,000 more cows and 35 more pounds of milk per cow). Quarterly: For the third quarter of 2017 compared to the second quarter of 2017, U.S. milk cow numbers increased to 9.402 million head, milk production per cow decreased to 5,690 pounds; the net effect was a decrease in milk production to 53.5 billion pounds. USDA projects that for the fourth quarter of 2017 compared to the third quarter of 2017, milk cow numbers will increase to 9.405 million head, production per cow will decrease to 5,685 pounds; the net effect would hold milk production at 53.5 billion pounds. Milk Prices Comparing the third quarter of 2017 to the second quarter of 2017, the Class III price increased from $15.74/cwt. to $16.13/cwt.; and the Class IV price increased from $14.80/cwt. to $16.36/cwt. USDA projects that for the fourth quarter of 2017 compared to the third quarter of 2017, the U.S. average all-milk price will increase to $17.85-$18.15/cwt. Utility Cow Prices Comparing the third quarter of 2017 to the second quarter of 2017, the average U.S. utility cow price was up $0.13/cwt. to a national average of $69.78/cwt. USDA projects that the utility cow price will average $56-$60/cwt. in the fourth quarter of 2017. Top Ten Milk Production States - October 2017 (Percent Change from Same Month/Previous Year)

Class III

N/A

USDA Dairy Cow Culling Activity

U.S. Dairy Cows

West Region 2 Price Range

Region 9 1 Dairy Cows

Week Ending

Head

Head

$/cwt.

10/20/17

16,300

61,500

$60-$67

10/27/17

14,900

57,000

$64-$64

11/03/17

16,200

58,400

$63-$63

11/10/17

15,500

57,200

$61-$61

1 Region 9 includes AZ, CA, HI and NV 2 West region includes AZ, NV, UT, CA, ID, OR andWA Source: USDA Market News: Report LM_CT168 and SJ_LS714

USDA Commercial Cold Storage Report

Butter American Cheese Nonfat Dry Milk 2016 2017 2016 2017 2016 2017 In Million Pounds

Month

January

192 236 243 296 328 333 319 269 228 161 166 325

222 270 273 292 310 307 280 256 220 314

716 716 726 734 757 770 742 743 736 713 726 758

752 773 802 834 810 832 801 780 739 837

226 227 217 262 232 247 252 267 231 296 257 296 235 313 216 321 224 328 232 281

February

March

April

May

June

July

August

September

October

November December

215 228

Source: USDA, Farm Services Agency, NASS Cold Storage and Dairy Products. (As published in the Dairy Market News)

USDA Milk-Feed Price Ratio

USDA reports that the milk-feed price ratio for October 2017 was 2.45 (unchanged from September 2017). The current ratio of 2.45 means that a dairy producer can buy 2.45 pounds of feed for every pound of milk sold. The prices used to calculate the October 2017 milk-feed price ratio were: corn $3.26/bushel; soybeans $9.18/bushel; alfalfa hay $152/ton; all-milk price $17.90/cwt.

-1.5%

1. California

6. Michigan

+3.3%

2. Wisconsin +2.3%

7. Pennsylvania +0.7% 8. Minnesota +2.9%

3. Idaho

+0.2% -0.1% +5.3%

4. New York

9. New Mexico 10. Washington

+1.2% -0.5%

5. Texas

Prices used to calculate the milk-feed price ratio are based on U.S. prices and don’t necessarily reflect California prices.

Information from the USDA-NASS publication “Milk Production” and the USDA-ERS publication: “Livestock, Dairy, and Poultry Outlook.”

California Dairy Review