E2-Lancaster Farming, Saturday, June 6, 1998
May 20,1998
By Bob Cropp
Dairy Marketing and
Policy Specialist
University of Wisconsin
Cooperative Extension
April milk production for the
20 reporting states was up 1.0%
compared to a year ago, the net re
sult of 0.4% fewer milk cows and
1.5% more milk per cow. Parts of
the southwest and west experi
enced rather poor milk production
per cow due to adverse wet and
warm weather.
California experienced an actual
decline from a year ago in its pro
duction, down .9%. Although
California had 3.7% more milk
cows, milk per cow was down
4.5%. This is the second month
in a row poor milk production per
cow resulted in a reduction in
California's milk production.
Compared to a year ago, Cali
fornia experienced a 8% decline in
its March milk production. Be
cause of California's significance
cheese production, reports of Cali
fornia production problems was
part of the reason for added
strength in the cheese market. On
the CME, 40 pound cheddar
blocks, after tailing from $1.35 a
pound on April 2 to $1 18 per
pound on April 30, a decline of
$ 17 per pound, prices increased
$ 03 per pound on May 4 and an
other $.02 per pound of May 14
where the price was back to $ 1 23
per pound What happens in the
coming weeks in California is
critical to cheese prices and the
BFP price for the immediate
months. Wet weather not only has
caused herd health problems and
less milk per cow for California,
it has reduced the quality the hay
being harvested.
In the southwest, Arizona con
tinues to experience less milk
production than a year ago. April's
production was down 3 2% be
cause 2.3% more milk cows was
more than offset with 5.1% less
milk per cow. Although milk per
cow was up just 1 5% for New
Mexico, 7 0% more milk cows
resulted in 8 6% more milk
Texas hiH a slight increase in
Custom Design Comes To Us Naturally
KIPE STEEL 1-800-432-4797
3791 Church Rd., Chambersburg, PA 17201
FAX: (717) 267-1580
Dealer Inquiries Invited
Dairy Situation And
milk per cow, up 0.7%, but with
3.6% fewer milk cows, milk pro
duction was down 3.0%.
In the northwest, Idaho con
tinues to expand milk production,
up 11.9% from a year ago in
April. Idaho's cow numbers were
7.5% higher, and unlike Califor
nia's decline in milk per cow,
milk per cow was up 3.8%.
Washington, however, had 1.5%
fewer milk cows and wet weather
meant no change in milk per cow.
The southeast continues to
experience less milk production
due mainly to fewer milk cows,
except for Florida, where cow
numbers were unchanged in April
from a year ago, but milk per cow
was down 3.8%. April production
was down 3.8% for Florida, 3.6%
for Missouri, and 4.8% for Ken
tucky. Despite Florida having less
milk than a year ago, its spring
flush still meant that it had much
more milk than it needed for Class
I needs. Florida had been shipping
out of state as much as
100 loads of surplus milk each
week Not until this past week
has these shipments about stopped
as their milk production has
started to fall off seasonally
Milk production in the north
east is a mixed bag. Pennsylvania
continues to do rather well. Its
April production was up 4.8% due
to 05% fewer milk cows, but
5.2% more milk per cow. The
neighboring state of New York,
however, experience a 04% de
cline in milk production because
a decline of 0.7% in milk per cow
more than offset a few more milk
cows, 0.3%
Ohio had 1.3% more milk auc
to excellent milk per cow, up
We’re proud to
recognize the local
dairy farmers as
we celebrate June's
National Dairy
Month. Nourishing
a nation is a big
job, and these
people accept the
challenge each day.
Their efforts allow
us to enjoy the best
in nutrition and
quality at the most
competitve prices
possible, and we're
proud to congratulate
them on a job well done
5.2%. But the decline milk cow
numbers more than offset in
creases in milk per cow in Michi
gan, resulting in 0.7% less milk
production.
Both Minnesota and Wiscon
sin have less milk cows than a
year ago, down respectively, 3.4%
and 1.9%. But favorable weather
has meant excellent milk per cow,
being up 3.0% for Minnesota and
3.8% for Wisconsin. The net re
sult was that Minnesota's April
milk production was down
slightly, 0.5% while it was up
1.8% for Wisconsin.
As already indicated, cheese
prices took a major down turn in
April resulting a $O.BO per hun
dredweight decline in the BFP to
$12.01. The April BFP was still
$0.57 above April a year ago. Ear
lier predictions were that the May
BFP could drop below $ll.OO.
But, with CME cheese prices in
creasing $.05 per pound over the
past two weeks and butter prices
taking big jump on April 25,
Grade AA up $0,145 per pound.
Grade A up $0.1475, and Grade B
up $0.14, along with this April
milk production report, the May
BFP should stay above $ 11.00.
My estimate is $ll.lO per hun
dredweight May BFP, However, it
is the NASS survey 40 pound
cheddar block price and not the
CME price that is used to adjust
the BFP. For the first two weeks
in May, the NASS 40 pound
cheddar cheese price declined
$0,077 per pound. In fact, for 12
consecutive weeks the NASS
price has declined. The NASS
cheddar barrel price declined for 11
consecutive weeks. But with the
strength in the CME, and if these
oPm© BWteafpgitl [Q)^fin?w
Outlook
prices hold for the next two
weeks, NASS prices should also
show some strength over the re
mainder of AMay. Therefore, I
will stick with a May BFP of
$ll.lO. The May BFP a year ago
had fallen to alow of $10.70.
The May BFP should be the
low for the year with increases
starting in June. This increase
really depends upon the weather.
Weather will affect the corn, soy
bean, hay and other feed prices as
well as how well cows milk dur
ing the summer.
With favorable weather, feed
prices will remain below a year
ago and with milk prices still
above year ago levels, the milk
feed price ratio is also improved,
which is conducive to better milk
production. Assuming favorable
weather, the BFP will not peak as
high as a year ago.
In fact, last year the BFP in
creased from June through De-
Pairylea
Cooperative Inc.C l
P.O. Box 4844, Syracuse, N.Y 13221 DAIRYFARMERS of AMERICA, INC.
800-654-8838 100 Manchester Ave.
Westminster, Md. 21157
Telephone 1-800-735-2025
Mount Joy
pji Co-op
Hry -I Route23o
of Mt Joy, PA
JsfUrUi 717 ‘ 653 ‘ 5431
Over 60 years
of service
l/,/ -K FOR
/■^SCT"
fiiS_ .
m HILK
Where's your mustache? “
Land Olakes, Inc.
Maryland & Virginia
Milk Producers Cooperative
Association, Inc.
1985 Isaac Newton Square West
Reston, VA 20190-5094
1-800-552-1976
1 (
cember, peaking at $13.29. This
year the BFP may peak around
$12.70 to $12.80 in October. The
BFP futures are a little higher
than this for now. But there is a
lot of cheese around, and with fa
vorable milk production its is hard
to see a BFP much higher than
$12.80. But, if El Nino produces
hot and dry weather in the com
belt, and California and other
western states also continue expe
rience unfavorable weather, prices
could be higher.
But as for now, predictions are
still for a bumper corn and soy
bean crop, an excellent hay supply
and favorable summer weather for
good milk production per cow.
Thus, a BFP below a year ago for
the last quarter of this year.
Bob Cropp
cropp @aae. wise, edu
University of Wisconsin-
Madison
SBH
8257 Dow Circle
Strongsville, Ohio 44136-9717
1-800-837-6776
1225 Industrial Highway
Southampton, PA 18966
1-800-645-MILK
J}me is