16—Lancaster Farming. Saturda
3
USD A Jul
June Milk Down $ 1.06 From March
Increased supplies of dairy products relative to
demand this spring and summer have lowered dairy
prices at the wholesale and farm level more than
seasonally. Commercial dairy stocks have jumped.
With prices dropping to support purchase levels, CCC
is again buying dairy products under the price
support program. Seasonally rising milk production
and lowerfluid milksaleshavepushedmoremilk into
manufactured dairy products.
Wholesale prices of most dairy products tumbled
sharply in the second quarter. Butter, American
cheese, and nonfat dry milk prices dropped to CCC’s
support purchase prices. Following these wholesale
price drops, farm prices of manufacturing milk
declined substantially from March to June and
minimum Class I prices started falling in June.
Farmers averaged $7.88 per 100 pounds for all milk in
June, down $1.06 from the March high. This
compares with a 30 cent normal seasonal decline
during this period. June prices were about 23 percent
above a year ago. Dairy prices at both the farm and
wholesale level will likely increase seasonally this
fall and winter, although probably not back up to the
levels of early 1974.
Lower wholesale prices for dairy products are now
being reflected to some extent at the retail level.
Consequently, the June retail dairy price index may
be down from May, the first month-to-month drop in
almost 2 years. Retail dairy prices may increase
seasonallylater on this year, but the gains are likely
to be much less than occurred last year.
Milk production stays under a year ago, although
the rate of decline continues to slow. Down 6 percent
last September and 3 percent beginning the year,
output in May was about 2 percent under a year
earlier. Milk output per cow gained some in May, the
first increase of any significance in over a year.
Declines in milk cow numbers have slackened since
the beginning of the year. The number of herd
replacements on hand was large beginning 1974.
Falling prices of slaughter cows have probably
discouraged herd culling on dairy farms.
The drop in milk production will probably narrow
further in coming months. Milk prices will likely be
increasing seasonally this fall and winter. Coupled
with some likely moderation in feed prices, milk-feed
Get Your Off-Season Prices on
Windrowers & Forage Harvesters
MILLER'S REPAIR
1 Mile North of Bird-m-Hand
8 Miles East of Lancaster
RDI, Bird in Hand, Pa Phone 656-7013
Gibbons Road or 656-7926
July 20.
Dairy Situation Report . . .
price relationships could improve later this year,
helping boost milk output per cow. The declines in
milk cow numbers may continue to slow. Late in 1974,
we may see milk production rise above a year earlier.
Nevertheless, total 1974 milk output will likely still be
down to 1 to V/i percent from 1973’s 115.6 billion
pounds.
More milk has pioved into manufacturing uses this
year becauseof lower fluid milk sales. Gains in cheese
production have slowed materially, and by June
butter output had moved above year-earlier levels for
the first time since late 1971. Nonfat dry milk
production has also come back from the lows earlier
in 1974.
Fluid milk sales in January-May dropped 5 percent
from year-earlier levels, with whole milk products
down 9 percent. Gains in lowfat and skim milk sales
slowed appreciably.
Total commercial disappearance of milk in all
dairy products was down about 1 percent in January-
May, and sales may stay below a year ago in coming
months. Lowerretail prices shouldhelpsales,but real
purchasing power continues down, unemployment
may average higher, and inflation persists.
Commercial stocks of dairy products continued to
rise, reaching 7.2 billion pounds milk equivalent on
June 1, up from 4.1 billion pounds a year ago.
Government stocks have been small. Although CCC
is how buying dairy products, they are expected to be
utilized in the school lunch program.
USDA is buying processed American cheese under
the price support program in addition to natural
cheese. This will help remove from the market some of
the barrel cheese currently in excess supply. CCC
bought dairy products equivalent to about 0.5 billion
pounds of milk in May and June, up from 0.4 billion a
year earlier.
U.S. imports of dairy products totaled 1.7 billion
pounds milk equivalent in January-May this year,
more than doublingthevolumeofo.7billion poundsa
year ago. The increases were concentrated in the
early months and imports have since slackened off.
Of the 150 million pounds temporary increase in
nonfat dry milk import quotas authorized through
June 30, about 114 million pounds came in. Secretary
Butz has advised President Nixon that any further
increase in the nonfat dry milk import quota is not
presently needed. All of the temporary increases in
import quotas have now expired.
Drop in Milk Output Slows
The decline in milk output continues to slacken.
May’s milk production was down 2 percent from a
year earlier, compared with the 3 percent drop
entering 1974 and the sharp 6 percent decline last fall.
May production totaled 10.8 billion pounds, down
from 11 billion pounds in May last year. Milk
production is now declining from its seasonal peak
usually reached in the late May to mid-June period.
The March-to-May seasonal increase this year was
somewhat greater than last year’s.
Milk production per cow rose about 0.5 percent from
May 1973. With lower soybean meal prices, dairy
farmers may be using more protein in their dairy
rations than they were a year ago. Milk output per
cow had been down for around a year before pulling
about even earlier this year. The sharpest decline
relative to a year earlier happened last September
when production per cow fell 3 percent.
VITREOUS ENAMEL
STEEL SILOS
SEALED STORAGE
BOTTOM UNLOADING
SALES & SERVICES
Distributed By
STOLTZFUS SILO
EQUIPMENT
RDI, Box 77 Kmzer, Pa 17535
Phone 717-768 3873
There were 11.2 million milk cows on farms in May,
about 2'/2percentbelow a year earlier. Thedeclinehas
slowed somewhat from the 3 percent rate starting
1974. There was a large supply of herd replacements
on hand at the beginning of theyear. With thedecline
in slaughter cow prices, dairy farmers have probably
reduced their herd culling.
Milk production in May was below a year earlier in
all production regions except the Southern Plains
and Pacific Coast States. However, drops have
slowed in most areas since January. Wisconsin’s
production, down 2 percent in May, continued to
narrow from last September’s 8 percent decline. Milk
production was running above a year ago in
California and Pennsylvania, but remained down in
New York and declined in Minnesota for thefirst time
since January this year. Milk production in May warf
(Continued on Page 37)
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