AlB-Lancaster Farming, Saturday, July 4, 1998
Bob Cropp
Dairy Marketing and
Policy Specialist
University of Wisconsin
Cooperative Extension
Compared to a year ago. May
milk production for the 20 report
ing states showed the greatest rela
tive increase this year, up 2.1%
compared to an April increase of
1.3%. Estimated accumulated
U.S. milk production January
through May is up 1.1% from the
same period a year ago. May milk
cow numbers were just 0.2% be
low a year ago, the smallest de
crease for more than two years.
Milk per cow was up about nor
mal, 2.3%.
A major change in milk pro
duction from previous months
was a return to increased milk
production in California. After a
decline in milk production com
pared to a year ago of 2.0% in
April, California had a 3.2% in
crease for May. This was not due
to more milk per cow, which was
down 0.5%, but rather more milk
cows, up 3.8%. Milk per cow is
still suffering from wet weather
related problems earlier in the
year
California farmers are also
running short of high quality hay.
The new year hay crop is of low
quality due to wet harvesting con
ditions Some farmers are cutting
back on hay fed per cow and sub
stituting other feeds What impact
this will have on California's
milk production for the immediate
months ahead is uncertain, but
some nutritionist indicate that
even with substitutes for high
quality hay, California will be
able to maintain an increase in
milk production. But it does ap
pear that California's milk produc
tion increases will continue to be
well below last year's.
Both Idaho and Washington
experienced rather poor increases
in May milk production per cow,
up respectively just 0.6% and
0.8% Because Idaho had 8.2%
more milk cows, total milk pro
duction was still up 8.7% while
fewer milk cows netted Washing
ton 1.1% less total milk produc
tion
New Mexico had just 0.6%
more milk per cow but 8.0%
more milk cows which resulted in
8.5% more total milk production.
Texas had 26% more milk per
cow but fewer milk cows that net
ted a 09% decrease in total milk
production Arizona had just 1 3%
more milk per cow but more cows
increased total milk production
2.3%
Hot weather played a toll on
milk production m the south and
southeast Florida had a 7.3% de
crease in milk per cow and a re
duction in total milk production
of 7 3%.
Milk per cow was up only
0 4% for both Kentucky and Mis
souri and total milk production
was down respectively, 5.8% and
5 7% Forecast are for a continua
tion of hot weather in the south
and possible drought conditions
by late summer This could affect
milk production this summer and
fall and the amount of Grade A
milk the southeast will need to
ship m from other states to meet
fluid needs This activity does
strengthen milk prices.
Milk production in the north
east is mixed. New York had no
change from a year ago due to
0.3% less milk per cow offsetting
0.4% more milk cows, while
Pennsylvania had 4.0% more milk
production because of 4.7% more
milk per cow from 0.6% fewer
milk cows. Ohio had 1.0% more
Dairy Situation And Outlook
milk, but Michigan experienced
0.6% less milk.
Wisconsin had 1.8% fewer
milk cows but excellent milk per
cow, up 4.9% resulted in an in
crease in total milk production of
3.0%. Minnesota had good milk
per cow, up 2.8% but 2.6% fewer
milk cows meant only a slight in
crease in milk production.
Despite milk production run
ning higher than a year ago and
commercial disappearance a little
soft (up just 0.4% from January-
March), butter and cheese prices
keep increasing. Cheese prices
took a decline April to early May.
NASS 40 pound cheddar block
prices average about 10 cents less
per pound in May than for April.
This lower average NASS
cheese price, a lower April base
price than what was estimated
($11.82 and not the $12.01 April
BFP), plus a relatively high but
terfat differential adjustment to
3.5% butterfat teat resulted in a
May BFP of $lO.BB, down $1.13
per hundredweight from April. But
both butter and cheese prices have
taken a strong turn upward. From
May 7 to June 4, CME 40 pound
cheddar blocks increased 28.25
cents per pound ($1.21 to
$1.4925). CME cheddar barrels
increased 24.5 cents per pound
($1.20 to $1,445). Both cheddar
blocks and barrels increased an
other 5 cents per pound on June
11
But the BFP is adjusted by
changes m the NASS survey 40
pound cheddar block price and not
the CME price. The NASS survey
price lags behind the CME prices
While the CME block price in
creased 28.25 cents per pound
from May 7 to June 5, the weekly
average NASS block prices in
creased just-11.17 cent per pound
from the week ending May 8
through the week ending June 5
Therefore the expected increase in
the June BFP is less with NASS
prices than what one would an
ticipate from CME prices
These relatively strong cheese
prices exist despite cheese produc
tion above a year ago. April pro
duction compared to a year ago
show production of American
cheese up 3 5%. cheddar produc
tion up 1.8% and total cheese pro
duction up 7.2%.
But strong committed sales
when cheese prices dropped in
April and May has meant avail
able "fresh" cheese supplies are
tight Wholesale buyers are not
available to purchase additional
cheese and arc bidding cheese
prices higher
Butter prices increased 20
cents per pound since the end
May Both Grades AA and A on
the CME are at $ 1.90 per pound.
Cream supplies are tight as ice
cream manufacturers compete with
butter makers April butter pro
duction was down 12 5% from a
year ago. Butter stocks arc about
68 million pounds But as recent
as 1992 when the CCC was pur
chasing lots of surplus hutter
stocks stood at 781 million
pounds Buttei supplies and
prices should stay strong until at
least late fall.
What does this all mean as far
as the BFP? At these cheese and
butter prices the June BFP will
increase from May more than
$2.50 surpassing $13.00 per hun
dredweight to perhaps $13.25 to
$13.40 per hunderweight. The
BFP futures are trading near these
levels. This compares to a June
BFP of just $10.74 a year ago. As
we look down the road further
strengthening of the BFP appears
likely. The BFP could peak in
September near $14.00 per hun- also concern that the relatively
dredweight before starting to de- high butter and cheese prices will
c jj ne dampen demand.
At these levels of milk prices But if crop conditions are not
and forecasts for lelatively cheap as favorable and milk per cow is
corn and soybeans, and excellent adversely affected by hot weather,
quality hay at lower prices, except prices will still decline seasonally
for the west and northwest, milk late fall, but at a slower rate and
production'this fall could be fairly not as far. Because of this price
strong. If so, cheese and butter uncertainty, dairy producers may
prices could fall sharply. There is want to consider protecting milk
High School Students Compete
YORK (York Co.) Twenty
five teams with more than 165 stu
dents from 12 schools participated
in the 13th annual York County
Envirothon at the York Chapter of
the Isaak Walton League, outside
Dallas town.
This environmental learning
competition is organized by the
York County Conservation Dis
trict and tests teams of six students
in five areas: soils, forestry, aqua
tics, wildlife and a current event
topic: freshwater watersheds. All
students receive a snack, lunch,
ribbons, certificates and seedlings.
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717-397-4187
VA-North Carolina
Select Sires Inc.
Learn To Breed
Your Own Cows
f A Select Sire AX School has been
scheduled at
New Holland Sales Stables
( A Three Day School )
\Classes 9;00 a.m. to 4:00 p.m .J
Qead\ine, July 25th
Non-Refundable $25 Deposit
Registration Fee Requested
Contact:
Clair High
717-442-0950
Winners receive trophies and rib
bons.
Participating high schools in
clude: Dallastown, Red Lion,
Northeastern, Dover, Kennard-
Dale, Spring Grove, Central York,
Susquehannock, Hanover. Red
Land, Northern and Eastern.
Many businesses and organiza
tions gave their time or money to
make the event possible.
The top five winners were: Ist
Place team Dallastown “Hell
benders” scoring 448 pts.; 2nd
Place team Red Lion “Dirt War
dens” scoring 439.5 pts.; 3rd Place
prices via of dairy futures and op
tions. The BFP futures prices are
trading at relatively attractive lev
els.
Regardless, milk prices for
1998 will average above those of
1997.
Robert Cropp
cropp@aae.wisc.edu
University of Wisconsin-
Envirothon
In
team Northern “I” sconng 397
pts.; 4th Place team Red Lion
“RoadkiU” scoring 397 pts.; and
slh Place team Northeastern “I”
scoring 376 pts.
Category winners were aqua
tics: Red Lion “Dirt Wardens”
scoring 90 pts.; current events:
Dallas town “Hellbenders” scoring
96 pts.; forestry: Dallastown
“Hellbenders” scoring 85 pts.;
soils; Red Lion “Dirt Wardens”
scoring 92.5 pts.; and wildlife:
Red Lion “Dirt Wardens” scoring
94 pts.
Madison