2018 May Board Book

National Dairy Situation & Outlook USDA Estimates

Federal Order Minimum Class Prices

Hundredweight Prices Class I Phoenix, Arizona

Feb.

Mar.

Apr.

$16.60 $15.71

$16.45 $16.00 $17.35

Milk Production

Portland, Oregon $16.15 $15.26

Boston (Northeast)

$17.50 $16.61 $13.40 $14.22

Monthly: USDA estimates milk production in the 23 major U.S. States increased 1.8% in February 2018, compared to February 2017. USDA reports that California milk production increased 3.5% compared to February 2017 (with 17,000 less cows and 80 more pounds of milk per cow). Among other western states, compared to February 2017, Arizona was up 2.4%; New Mexico was up 3.3%; andWashington was up 3.9%. Two of the top ten milk producing states reported a production decrease. Overall, the largest percent increase was reported by Colorado at 7.7% growth in milk production (on 12,000 more cows and the same pounds of milk per cow compared to February 2017). Quarterly: For the fourth quarter of 2017 compared to the third quarter of 2017, U.S. milk cow numbers decreased to 9.398 million head, milk production per cow decreased to 5,649 pounds; the net effect was a decrease in milk production to 53.1 billion pounds. USDA projects that for the first quarter of 2018 compared to the fourth quarter of 2017, milk cow numbers will increase to 9.410 million head, production per cow will increase to 5,780 pounds; the net effect would be an increase in milk production to 54.4 billion pounds. Milk Prices Comparing the fourth quarter of 2017 to the third quarter of 2017, the Class III price increased from $16.13/cwt. to $16.34/cwt.; and the Class IV price decreased from $16.36/cwt. to $14.12/cwt. USDA projects that for the first quarter of 2018 compared to the fourth quarter of 2017, the U.S. average all-milk price will decrease to $15.55-$15.75/cwt. Utility Cow Prices Comparing the fourth quarter of 2017 to the third quarter of 2017, the average U.S. utility cow price was down $11.10/cwt. to a national average of $58.68/cwt. USDA projects that the utility cow price will average $61-$64/cwt. in the first quarter of 2018. Top Ten Milk Production States - February 2018 (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.

02/16/18

17,400

67,100

$65-$65

02/23/18

16,600

63,100

$66-$66

03/02/18

16,900

66,700

$63-$63

03/09/18

16,400

66,000

$66-$70

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 2017 2018 2017 2018 2017 2018 In Million Pounds

Month

January

222 270 273 292 310 307 280 256 218 159 169 314

227 277

722 745 773 805 810 832 801 780 740 733 747 816

742 763

227 307 262 324

February

March

247 267

April

May

281

June

296 296 313 321 300 317 320

July

August

September

October

November December

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 February 2018 was 2.03 (down from 2.19 in January 2018). The current ratio of 2.03 means that a dairy producer can buy 2.03 pounds of feed for every pound of milk sold. The prices used to calculate the February 2018 milk-feed price ratio were: corn $3.38/bushel; soybeans $9.49/bushel; alfalfa hay $155/ton; all-milk price $15.30/cwt.

1. California +3.5% 2. Wisconsin +0.1%

6. Michigan +0.9% 7. Pennsylvania +0.3%

-2.3% +4.8% +5.5%

-0.5% +3.3% +3.9%

3. New York

8. Minnesota 9. New Mexico 10. Washington

4. Idaho 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

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