September 2017 Board Book

National Dairy Situation & Outlook USDA Estimates

Federal Order Minimum Class Prices

Hundredweight Prices Class I Phoenix, Arizona Portland, Oregon Boston (Northeast)

Jun.

Jul.

Aug.

$17.66 $17.21 $18.56 $16.44

$18.94 $18.49 $19.84 $15.45

$19.07 $18.62 $19.97

Milk Production

Monthly: USDA estimates overall milk production across the U.S. increased 1.7% in June 2017, compared to June 2016. USDA reports that California milk production decreased 2.1% compared to June 2016 (with 13,000 less cows and 25 less pounds of milk per cow). Among other western states, compared to June 2016, Arizona was up 3.8%; New Mexico was up 9.8%; andWashington was down 1.3%. Only two of the top ten milk producing states reported a production decrease. The largest percent increase was reported by Texas at 15.0% growth in milk production (on 40,000 more cows and 115 more pounds of milk per cow). Quarterly: For the second quarter of 2017 compared to the first quarter of 2017, U.S. milk cow numbers increased to 9.395 million head, milk production per cow increased to 5,895 pounds; the net effect was an increase in milk production to 55.4 billion pounds. USDA projects that for the third quarter of 2017 compared to the second quarter of 2017, milk cow numbers will increase to 9.405 million head, production per cow will decrease to 5,710 pounds; the net effect would be a decrease in milk production to 53.7 billion pounds. Milk Prices USDA projects that for the second quarter of 2017 compared to the first quarter of 2017, the U.S. average all-milk price will decrease from $18.23/cwt. to $16.85-$16.95/cwt. USDA projects that for the third quarter of 2017, the U.S. average all-milk price will be $17.35-$17.75/cwt.; the Class III price will be $15.50- $15.90/cwt.; and the Class IV price will be $16.35- $16.85/cwt. Utility Cow Prices Comparing the second quarter of 2017 to the first quarter of 2017, the average U.S. utility cow price was up $7.07/cwt. to a national average of $69.70/cwt. USDA projects that the utility cow price will average $67-$71/cwt. in the third quarter of 2017. Top Ten Milk Production States - June 2017 (Percent Change from Same Month/Previous Year)

Class III

N/A

USDA Dairy Cow Culling Activity

Region 9 1 Dairy Cows

U.S. Dairy Cows

West Region 2 Price Range

Week Ending

Head

Head

$/cwt.

06/23/17

13,200

53,200

$74-$79

06/30/17

14,000

54,800

$73-$75

07/07/17

12,300

44,100

-

07/14/17

14,400

57,400

$71-$85

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

222

716

752

226

227

February

236

270

716

773

217

262

March

243

273

726

802

232

247

April

296

292

734

834

252

267

May

325

314

758

837

232

281

June

328

310

757

810

231

298

July

333

770

257

August

319

742

235

September

269

743

216

October

228

736

225

November

161

713

215

December

166

726

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 June 2017 was 2.32 (up from 2.21 in May 2017). The current ratio of 2.32 means that a dairy producer can buy 2.32 pounds of feed for every pound of milk sold. The prices used to calculate the June 2017 milk-feed price ratio were: corn $3.43/bushel; soybeans $9.10/bushel; alfalfa hay $152/ton; all-milk price $17.30/cwt. (increased from $16.70/cwt. in May 2017). Prices used to calculate the milk-feed price ratio are based on U.S. prices and don’t necessarily reflect California prices.

-2.1% +0.2% +1.9% +0.4% +15.0%

1. California 2. Wisconsin

6. Michigan

+2.8%

7. Pennsylvania +0.0%

3. Idaho

8. Minnesota 9. New Mexico 10. Washington

+1.4% +9.8% -1.3%

4. New York

5. Texas

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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