U.S. Dairy Outlook BY BLAIR SMITH PSU Dept, of Ag Economics This year promises to have a fairly large surplus of milkfat but the smallest surplus of skim solids since the early seventies. During January-March, Govern ment purchases of butter totaled 195 million pounds, up more than a fourth from last year. Mean while, no nonfat dry milk was bought and cheese removals were almost negligible. Although cheese will be purchased during April-June, 1989 purchases will be very heavily butter. If the Com modity Credit Coiporation (CCC) buys any nonfat dry milk, quanti ties likely will be very small. Growing milk production will provide large supplies of both cream and skim milk. Strong growth in commercial use of cheese will absorb much of the increase in the milk supply. The largest changes from recent years are related to sales of butter and nonfat dry milk. Early 1989 com mercial use of butter fell from 1988’s weak level, even though sales of other cream-based pro ducts had recovered. Weakness in butter sates prevented the increase in commercial use of milkfat from matching the increase in produc tion. Market conditions for nonfat dry milk were dramatically diffe rent. Increased commercial exports and strong domestic use easily absorbed any available sup plies and caused milk to be shifted into butter-nonfat dry milk pro duction. Markets for nonfat dry milk and similar products probab ly will be tight throughout 1989. January-March milk production grew 2 percent from a year earlier, despite sharply higher feed costs. High-quality forage has helped sustain growth in output per cow, even though concentrate feediitg was little changed from a year ear lier. Cow numbers have slipped only slowly, as expansion by some products has, largely offset heavier cow slaughter by others. These patterns may persist during the tUC ITS NOT TOO LATE * <* fee Cool Them Off With An RC Cooling System We Stock RC Stainless Steel Nozzles, Pumps, PVC Pipe And All Components ftt} Mb' Needed For Your Fogging System V We Service And Install Get The Complete System - Feeding, Ventilation, Watering From Us. Your Authorized Master Distributor agrl systems rest of 1989, with annual produc- Dairy Bowl 4-H Winners Named tion rising about 2 percent from 1988’s 145.5 billion pounds. ! Farm milk prices and wholesale ‘ - prices of most dairy products jmbMk > ■ Hf* dropped from the high seasonal remained above the January- K fl March support levels. On April 1, the support purchase price for : nonfat dry milk and cheese were " increase of SO cents per cwt in the support price milk as flush season. Although seasonal increases during the second half of 1989 are not likely to match those |fr r ' of the previous year, 1989 farm Bk< milk prices probably will average B iF/ 10-30 cents higher than 1988’s B%J( x $12.21 per cwt. Kp^ Early 1989 retail dairy prices rose about as much from a year ago as did rthe indices of prices of all food or of all consumer items. Retail dairy prices may ease in coming months, but the 1989 average increase probably will be 3-5 percent. Larger milk production has swollen supplies for manufactur ing in early 1989. Strong nonfat dry milk prices pulled most of the added supply into butter-nonfat dry milk production. The remain der of the extra supplies basically went into cheese varieties other than American in order to meet growing use. During the rest of 1989, nonfat dry milk and cheese probably will compete actively for milk supplies. Commercial use (milk equiva lent. fat basis) was up slighdy in early 1989, mostly becuase of brisk cheese sales. A 2-percent gam m of milk and dairy products is expected for this year, partially in response to continued economic growth. Sales in 1988 reached 137.2 billion pounds, up 1 percent from 1987. On March 1, commercial stocks of dairy products stood at 5.0 bil- PUT YOUR COOLING SYSTEM IN NOW NORTHEAST AGRI SYSTEMS, INC. FLYWAY BUSINESS PARK 139 A West Airport Rd. Lititz, PA 17543 (717) 569-2702 ->udrow (center) of Clover Hill was honored as an Extension Pioneer dur ing statewide 75th anniversary celebration of the Cooperative Extension Service, held May 111 n Greenbelt. This picture depicts Dudrow in a familiar situation-posing with a state champion 4-H dairy cattle Judging team from Frederick County which he coached. He’s shown here with the 1988 state champion senior 4-H team. Team members are (left to right): Stacey Guyton, 17, of Amoldstown; Teresa Summers, 20, of Country Club Heights; Andrea Raber, 18, of Woodsboro, and Jack Kahler, 19, of Johnsvllle. Dudrow also was senior coach and Andrea Raber, a member of Frederick County’s 1989 State champion senior 4-H dairy bowl team. lion pounds, milk equivalent, similar to a year earlier. While stocks of most products were lar ger, commercial inventories of American cheese remained low. CCC held sizable stocks of butter but almost no cheese or nonfat dry milk. Efforts by the European Com munity and the United States to reduce milk surpluses and accu mulated stocks dramatically tight ened international markets for nonfat dry milk and other dairy products. International prices of nonfat dry milk probably will vlffy*' Call Or Send Us A Sketch For Your Quick Estimate! remain strong during 1989 because import demand shows no sign of weakening. The high prices have lowered U.S. imports of products using skim solids and created an export market. Condi- Rooth Receives National Jersey Award REYNOLDSBURG, OH Clifton (Jay) and Laura Booth, have been awarded The American Jersey Cattle Club’s 1989 Young Jersey Dairyman Award. The / I ' / V / i \ STORE HOURS: Mon.-Frl. 7:3<M:30 Sal 1:00-11:30 Lancaster Farming, Saturday, May 27,1989-A37 lions also have tightened substan tially in international butler mark ets. However, butler price pros pects are not as bright as for nonfat dry milk because import demand probably will soften. Booths are among seven winners from across the United States who have excelled in dairy fanning and Jersey cattle breeding. They have been very active in AJCC prog rams and Jersey functions. The winners will be honored at an awards breakfast June 17 at the AJCC-NAJ Annual Meeting in Cedar Rapids, lowa. Jay Booth and his wife Laura own quite a large herd of Jerseys which they register under the pre fix Sweet Grass Jerseys. They have a total of 189 cows and 181 heifers. Cuncntly milking are 173 head with a rolling herd average of 13,738 lbs. milk, 655 lbs. fat and 530 lbs. protein. Jay has been a great supporter of Equity and is a benefactor of Multiple Compo nent Pricing in the Great Basin FMMO. Milk Market (Continued from Page A 36) ali/alion” may provide an oppor tunity to develop foreign markets particularly in the middle and far cast countries. The price for these new markets may be the loss of dairy import quotas but it’s hard to estimate the bottom line effect of such a tradeoff. Perhaps we’ll find a market for our surplus butter. The decision may be made on what is “the greatest good for the greatest number” of fanners but even in that group dairymen are a definite minority. Hopefully your interests will be well represented but you should closely follow the developments of these GATT negotiations because the decisions will have a very long term effect on your business. News
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