Stack Up Proﬁ ts with HayPro II - Home - Progressive Dairy

MARKET WATCHMARKET WATCH BLOOD MEAL OVERPRICEDFEED

Normand St-PierreExtension Dairy SpecialistOhio State [email protected]

Feed prices are going up; milk prices are going down. � e only questions remaining are: How bad will it get and for how long? Meanwhile, one can really aff ect the cost of feeding animals by choosing the right feed ingredients to use in dairy rations.

In this column I track down diff erent feed markets using the Sesame software. Results using market prices as of May 14 are summarized in tables specifi c to your region of publication.

� e feed table reports bracket prices for each feed. � e Low and High values delineate the 75 percent confi dence range for a feed. If you can buy a feed at a price less than the Low, then it is a bargain. If the market price exceeds the High, then it is

overpriced. If your price is between the Low and High, then the feed is priced approximately for what it is worth. � e ‘Status’ column provides you with a quick indicator of a feed status: a ★indicates a bargain feed, a ■ denotes an overpriced feed,and a blank entry indicates the feed is priced about right.

Lastly, a few feeds carry a special status symbol: a is shown if either a feed is grossly overpriced (in which case only the High column has a price, and the reported price is the calculated break-even price), or if a

feed is grossly underpriced (in which case only the Low column has a price, and the reported price is the calculated break-even price) or if we are in no position to judge a feed status. � e third option occurs, for example, with the diff erent grades of alfalfa hay. We can calculate what each grade is worth but we do not

have suffi cient market information to identify an accurate market price for each grade with which we can compare to the values calculated by Sesame.

� e correct strategy is to maximize the use of bargain feeds while minimizing the use of overpriced ones, all within the constraint of a balanced ration.

I use as a reference a cow weighing 1,400 lbs, producing 70 lbs per day of milk containing 3.7 percent fat, 3.1 percent true protein and 5.7 percent other solids. Nutrient costs are expressed three diff erent ways in the nutrient table: $ per cow per day, ¢ per pound of dry matter (DM) and $ per hundredweight of milk. Beware that these feed costs do not include the costs of feeding the dry cows and the replacement herd. PD

8 Progressive Dairyman Issue 9 • June 11, 2012

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Table 1Item1 Northeast Southeast MidwestNEL (¢/Mcal) 22.8 11.0 16.5

MP (¢/lb) 19.0 52.6 30.4

e-NDF (¢/lb) -6.0 6.6 -2.2

ne-NDF (¢/lb) -21.6 -1.6 -9.1

Nutrient costs ($/cow per day)2 7.07 6.86 6.41

Nutrient costs (¢/lb of feed DM) 14.4 14.0 13.1

Nutrient cost ($/cwt of milk) 10.09 9.80 9.161 NEL = Net energy for lactation; MP = metabolizable protein; e-NDF = effective neutral detergent fi ber; ne-NDF = non-effective NDF.2 1,400-lb cow producing 70 lbs/day at 3.7% fat, 3.1% protein and 5.7% other solids.

Supreme hay ($/ton)

May 25 Price 3-week change

IA $205-$215 $25 IL $200-$240 NC

KS $240-$250 $30-$65

MO $210-$245 $20-$35

NE $200-$215 $10

PA $260-$415 $60

VA $213 $124

Source: USDA National Hay, Feed & Seed Summary


CA $375 $15

ID $347 $18

IL $282 $8

Soybean meal* ($/ton)


CA $458 $12

ID $455 $17

IL $419 $75

*Price quotes contributed by Western Milling, J.D. Heiskell, independent sources.

Corn* (in tons) (in bushels)


CA $286 $4

ID $283 NC

IL $221 $13

Price 3-week change

$8.00 .12¢ $7.93 NC

$6.18 .38¢

Cottonseed* ($/ton)

COMMODITIES

Mar2013

JulyMaySept DecJuly2012

Low

High

Settle$5.00

$5.25

$5.50

$5.75

$6.00

$6.25

$6.50

Jan2013

May JulyAug Sept Oct Dec MarJuly2012

High

Settle Low

$325

$350

$375

$400

$425

$450

GLUTEN FEED A BARGAIN

FUTURESHigh: $6.44 Low: $5.03

High: $434.60 Low: $332.30

Corn (dollars per bushel)

CornJuly ’12 contracts $6.12 -$6.30 $6.35/$5.83Sept. ’12 contracts $5.31 -.01¢ $5.48/$5.13

MAY 25 Avg. 3-week settle High/Low

Soybean mealJuly ’12 contracts $418.15 +$6.22 $432.60/$403.50Aug ’12 contracts $406.79 -$7.69 $422.50/$392.60

Source: Chicago Mercantile Exchange data

Soybeans (dollars per ton)

Issue 9 • June 11, 2012 Progressive Dairyman 9

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Northeast Southeast MidwestFeed name Low High Status Low High Status Low High Status

Alfalfa hay, supreme (190 RFV) $278 $349 $261 $344 $248 $318

Alfalfa hay, premium (170 RFV) $249 $320 $240 $323 $222 $292

Alfalfa hay, good (150 RFV) $188 $259 $203 $286 $173 $243

Alfalfa hay, fair (130 RFV) $143 $214 $175 $258 $136 $206

Alfalfa hay, low (110 RFV) $95 $166 $144 $227 $96 $166

Bakery byproduct $351 $385 ★ $240 $302 ■ $281 $340

Beet pulp - - $245 $245 $181 $221 ■

Blood meal - $657 ■ $766 $889 ■ - $672 ■

Canola meal $296 $322 ■ - - $288 $313 ■

Citrus pulp $268 $268 $203 $248 - -

Corn grain, ground $351 $382 ★ $246 $302 $282 $335 ★

Corn silage (32% DM) $69 $94 $78 $105 ★ $67 $91 ★

Cottonseed hulls - - $62 $181 ■ - $25 ■

Cottonseed meal $297 $336 $376 $422 ★ $313 $352

Cottonseed, whole $291 $392 $270 $392 $248 $349

Distillers dried grains $259 $307 ★ $306 $377 ★ $284 $326 ★

Feather meal $537 $608 $599 $678 ★ $518 $591

Fishmeal, Menhaden - $600 ■ - $660 ■ - $577 ■

Gluten feed $241 $276 ★ $252 $296 ★ $239 $270 ★

Gluten meal $525 $599 - - $525 $604 ★

Hominy $286 $316 ★ $228 $279 ■ $249 $291 ★

Linseed meal - - $329 $329 $252 $291 ■

Malt sprouts - - - - $175 $217

Meat meal $507 $551 ■ $454 $512 ■ $445 $497 ■

Molasses $268 $295 $158 $208 $198 $248 ■

Rice bran - - $285 $285 - -

Sorghum grain, rolled - - $239 $286 ■ - -

Soybean hulls $48 $125 ■ $161 $268 $123 $194

Soybean meal, expeller $462 $510 $524 $583 ★ $462 $510 ★

Soybean meal, 44% $400 $429 ■ $374 $418 ■ $366 $401 ■

Soybean meal, 48% $449 $485 $432 $479 $412 $452

Soybeans, roasted $488 $525 ■ - - $434 $485 ■

Sunfl ower meal - - - - $155 $199 ■

Tallow $923 $1,032 ■ - $570 ■ - $747 ■

Wheat bran $134 $191 - - $167 $216 ■

Wheat feed - - $241 $297 ★ $300 $300

Wheat middlings $178 $226 ★ $230 $230 $196 $239 ★

Feb2011

Feb2012

Jun AprAug Oct Dec JunApr Aug Oct DecMay2010

Income Over Feed Cost

Operating IncomeRation Cost

Mailbox milk price

$0

$4

$8

$12

$16

$20

$24

$28

Northwest

Feb2011

JunApr Feb2012

AprAug Oct DecJun Aug Oct DecMay2010

Income Over Feed CostOperating Income

Ration Cost

Mailbox milk price

$0

$4

$8

$12

$16

$20

$24

California

Feb2011

Jun Aug Oct Dec JunApr Feb2012

AprAug Oct DecMay2010


Operating IncomeRation Cost

Income Over Feed CostMailbox milk price

$0

$4

$8

$12

$16

$20

$24

$28

Midwest

Feb2011

Jun Aug Oct Dec JunApr Feb2012

AprAug Oct DecMay2010


Operating Income

Ration Cost

Mailbox milk price

$0

$4

$8

$12

$16

$20

$24

$28

Northeast

Milk price and feed costs drive margins at the farm level. Certainly, sources of revenue other than milk and expenses other than feed impact profi tability, but not of the same magnitude. To gauge the economic health of the dairy industry, we have calculated margin based on mailbox milk price and an estimate of the market cost of a ration. Because feed prices change constantly and no one feed is a good indicator of total feed cost on a dairy, a ration was standardize to 10 percent rumen degradable protein, 6 percent rumen undegradable protein, 32 percent neutral detergent fi ber, 40 percent non-fi ber carbohydrates and 5 percent fat. Nutrient costs are derived using the nutrient composition and monthly average market prices for a basket of feeds available in the region. Income over feed cost is calculated as the mailbox milk price less the feed cost of producing a hundredweight (cwt) of milk assuming a feed effi ciency of 1.45. Operating income is IOFC less non-feed operating costs that are published biannually by the Economic Research Service.

� e fi gure shows the mailbox milk price, ration cost, IOFC and operating income for several U.S. regions over the last 28 months. Milk price gradually increased in 2010 and 2011 to a peak of $20 per cwt in Aug. 2011 and has since declined. Feed costs have followed a similar pattern but the magnitude of change has been much less. Income over feed cost and operating income track milk price more closely than feed cost with approximately 70 percent of the change in income due to milk price and 30 percent accounted for by changing feed costs. However, feed costs can’t be ignored because IOFC last fall was nearly equal to that of fall 2010 though milk was several $ per cwt greater. � e diff erence is feed cost, which was up $2.75 per cwt in the West, $2.70 in the Midwest and $2.50 in the Northeast over the same time period.

As we’ve entered the second quarter of 2012, indicators are stabilizing. April data is preliminary, but it appears that operations are at or near breakeven for operating costs in the West, slightly above in the Midwest and returning about $1 per cwt in the Northeast. At or near breakeven is not a desirable fi nancial position, but given the rapid erosion in margin over the last fi ve months an infl ection point on the graph is a welcome sight.

Absolute margin dollars is most important at the end of the day, margin percent has slipped below 33

percent in the Southwest, 42 percent in the Northwest, 45 percent in the Midwest and 50 percent in the Northeast, meaning that less than one-half or more of each milk income dollar is left after feed expense has

been covered. As mentioned above, percentages

and dollars per cwt allow us to compare how the dairy economy is changing over time. But some amount of milk fl ow is necessary to

generate enough dollars to sustain the business. Although counterintuitive, strategies that decrease milk fl ow and therefore feed effi ciency are counterproductive during periods of declining margins. PD


MARKET WATCHMARKET WATCH Margin

Patrick FrenchFrench [email protected]

MARK ETWATCHMay 25, 2012

Top Springer

Top Average

Medium Holstein Springer

ShortbredsOpen

Heifers Light

Open Heifers Heavy

HeiferCalves

BullCalves

Breeding Bulls

Empire Livestock - Burton MarketVernon, NY (800) 257-1819 (sale 5/21/12)

$1,600$100

$1,350 $100

$1,100 NC

$1,050$50

$400 $50

$800 $50

$100$25

$130NC

$800NC

Mammoth Cave Dairy Auction, Inc.Smiths Grove, KY (800) 563-2131(sale 5/22/12)

$1,650 $90

$1,450$10

$1,290 $30

N/T$335$30

$870$200

$160$20

$125$5

N/T

New Holland Sales StablesNew Holland, PA (717) 354-4341(sale 5/23/12)

$1,650$75

$1,450$50

$1,250$200

$1,100$150

$650$100

$875$125

N/T N/T N/T

Mid-Georgia Livestock AuctionJackson, GA (770) 775-7314 (sale 5/29/12)

$1,750$125

$1,500$50

$1,100$25

N/T$500$75

$900$60

$210$160

$155 $10

N/T

Central Livestock AssociationAlbany, MN (800) 733-6828 (sale 5/22/12)

$1,575 $240

$875$140

$1,285$1,210$160

$119/cwt N/T N/T N/T $900

Equity Co-op LivestockStratford, WI (715) 687-4101Rocky Olsen (608) 434-4037 (sale 5/16/12)

$1,800$150

$1,550NC

$1,325$25

$1,100NC

$625$25

$1,000$25

$290$10

$295$75

$1,600$400

Lake Odessa LivestockLake Odessa, MI (616) 374-8213(sale 5/22/12)

$1,600$75

$1,300NC

N/T$950

$100 $500

NC$800

NC$350

$100 N/T $1,350

$100

Norwood Dairy Cattle AuctionNorwood, MO (417) 746-4242 (sale 5/10/12)

$1,550$140

$1,500$175

$1,275$125

$1,370$90

$650$150

$945$5

N/T$230$25

N/T

Pipestone Livestock Auction MarketPipestone, MI (507) 825-3306 (sale 5/17/12)

$1,625$25

$1,443$73

$1,399$80

N/T$113/cwt$4/cwt

$91/cwt$7/cwt

N/T N/T$1,110$10

Spring� eld Livestock Marketing Center Springfi eld, MO (417) 869-9500 Doug Thomas (417) 840-9316 (sale 5/22/12)

$1,250$210

$1,100$150

$950$125

$990$200

$340$60

$900 $10

$190$100

$300 $100

N/T

Topeka Livestock AuctionTopeka, IN (206) 593-2522 (sale 5/22/12)

$1,515$60

$900$100

N/T N/T$800

$100 $1,360$65

$240$20

N/T$1,150

NC

Tri-State LivestockSioux Center, IA (712) 722-0681Mike Koedam (712) 470-0198 (sale 5/16/12)

$1,650 $250

$1,475$110

$1,420$82

N/T$152/cwt$16/cwt

$100/cwt$19/cwt

N/T N/T$1,275$75

United Producers, Inc.Marion, MI (517) 294-3484 (sale 5/18/12)

$1,675$225

$1,500 $100

$1,300NC

$1,175$25

$600 $100

$1,050NC

$200NC

N/T $1,000$50

Brush Livestock of ColoradoBrush, CO (970) 842-2801 (sale 5/3/12)

$2,050$100

$1,900$125

$1,675$65

$1,210$35

$390$110

$920$90

N/T N/T N/T

Chehalis Livestock MarketChehalis, WA (360) 748-3191 (sale 5/4/12)

$1,150$150

$1,050$975

$125 N/T

$110/cwt$8/cwt

N/T N/T$85$5

$1,000

Producers LivestockJerome, ID (208) 324-4345 (sale 5/16/12)

$1,500 $30

$1,460$100

$1,300$60

$1,110$488$7

$560$108

N/T N/T N/T

Smith� eld Livestock AuctionSmithfi eld, UT (435) 563-3259 (sale 5/17/12)

$1,370$50

$1,230$45

N/T$1,150

NC$97/cwt

NC$105/cwt

NCN/T N/T N/T

Toppenish Dairy Replacement SalesToppenish, WA (509) 865-2820 (sale 5/7/12)

$1,500$50

$1,300 NC

$1,075$75

$1,200$100

$141/cwt$4/cwt

$95/cwt$20/cwt

N/T N/T N/T

A & M Livestock Auction, Inc.Hanford, CA (559) 582-0358 (sale 5/23/12)

$1,600NC

$1,300$100

$1,100$50

$1,050NC

$150/cwtNC

$100/cwt$10/cwt

$110$10

$150$10

$1,050NC

Sulphur Springs Livestock and Dairy AuctionSulphur Springs, TX (903) 885-7739(sale 5/24/12)

$1,500$100

$1,125$25

$1,125$25

N/T$675$35

$950NC

$275$25

$125 $145

$1,085

Escalon Livestock Market, Inc.Escalon, CA (209) 838-7011(sale 4/25/12)

$1,500 $50

$1,200 $50

$1,150NC

N/T$90/cwt

NC$115/cwt

NCN/T N/T

$900NC

Contact Judy about being included in Progressive Dairyman’s Market Watch! [email protected] • (208) 324-7513 NC = No change N/T = No test Decrease in price Increase in price

Log on to www.progressivedairy.com/marketwatch to get auction reports from more locations!

MARKET WATCHMARKET WATCHMARKET WATCHMARKET WATCHMARKET WATCHMARKET WATCHMARKET WATCHCATTLE

NOTE: The colored bar represents cumulative year-to-date milk production for 2012. When it does not surpass the dotted line at the center of the box, it indicates state production is below the previous year’s total (2011). When it does surpass the dotted line, it indicates production is above the previous year’s total.

MARKET WATCHMARKET WATCHMILK

Texas440 +1

1,915 NC843 +3.3%

3,346 105.5%

Utah91 NC

1,790 +2.9%163 +7.9%

647 109.1%

Vermont133 NC

1,625 +1.9%216 +0.5%

857 100.7%

Virginia96 NC

1,605 +1.3%154 +1.3%

608 102.9%

Washington263 NC

2,015 +1.3%530 +4.1%

2,090 105.7%

Wisconsin1,270 +11,785 +3.2%2,267 +3.5%

9,026 104.5%

Arizona194 NC

2,155 +1.4%418 +5.3%

1,648 107.6%

California1,787 +22,030 +1.7%3,628 +3.1%

14,553 106.5%

Colorado132 NC

2,020 +1.8%267 +6.8%

1,047 108.4%

Florida122 NC

1,760 +1.1%215 +3.9%

870 104.3%

Idaho577 -3

1,920 +2.7%1,108 +2.9%

4,393 104.7%

Illinois100 NC

1,730 +3.0%173 +4.8%

684 105.9%

Indiana176 NC

1,830 +3.1%322 +5.6%

1,256 106.5%

Iowa207 +2

1,855 +4.2%384 +3.2%

1,514 103.3%

Kansas123 NC

1,820 +0.8%224 +1.8%

889 103.6%

Michigan376 +1

2,000 +2.3%752 +6.2%

2,979 106.6%

Minnesota465 NC

1,655 +2.2%770 +1.3%

3,070 102.2%

Missouri94 NC

1,435 +4.0%135 +3.0%

501 103.3%New Mexico

337 +12,130 +0.2%718 +3.6%

2,804 104.5%

U.S. Total9,272 +51,854 +2.2%17,190 +3.2%

68,180 104.7%

New York610 NC

1,835 +3.7%1,119 +3.6%

4,410 103.6%

Ohio271 +1

1,680 +3.7%455 +4.8%

1,784 103.4%

Oregon123 NC

1,730 NC213 +3.4%

832 103.9%

Pennsylvania538 -2

1,690 NC909 -1.0%

3,577 100.5%


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FLORIDA PRODUCTION UP 4.3 PERCENT

Legend

Number of cows(in thousands)

Milk per cow(month)

(lbs.)Total milk

production (month)

(in millions of lbs.)

Year-to-date milkproduction (total)(in millions of lbs.)

Percentage of year-to-date production versus previous year-to-date

Monthly change(in thousands)

Annual percentchange

Annual percentchange

May2011

Jan2012

Feb Mar AprJune July Aug OctSept Nov Dec

20102011

9,1009,1259,1509,1759,2009,2259,2509,2759,300 April 2012: 9,266 High: 9,272 Low: 9,119Milk cows (in thousands)

May2011

MarJan2012

Feb AprJuly Aug OctSept Nov Dec

2010

June

2011

1,6751,7001,7251,7501,7751,8001,8251,8501,875

April 2012: 1,854High: 1,854 Low: 1,687

Milk per cow (in pounds, 30-day equivalent)

May2011

MarJan2012

Feb AprJune July Aug OctSept Nov Dec

2010

2011

15,25015,50015,75016,00016,25016,50016,75017,00017,250

April 2012: 17,190High: 17,190 Low: 15,387

Milk production (in pounds, 30-day equivalent)

U.S. HERD STATS

Apr. daily avg. milk per cow: 61.8 lbs.

Bob CroppProfessor EmeritusUniversity of Wisconsin – Madison

New York610 NC

1,835 +3.7%1,119 +3.6%

4,410 103.6%95% 105%100%

MAY ’12

USDA’s estimate of April milk production for the 23 reporting states was 3.3 percent higher than a year ago and for the U.S. 3.2 percent higher. Milk cows continue to increase with April numbers up 5,000 head from March, placing them 1.0 percent higher than a year ago.

� e USDA has now revised upward their milk production for 2012 and don’t expect cow numbers to decline until 2013. Dairy provisions in the 2012 Farm Bill approved by the U.S. Senate Agricultural Committee and now being discussed in the House perhaps are a contributing factor to the continued strong growth in milk production. One of the provisions is margin protection (returns over feed cost) where dairy producers could decide to participate and get a $4-per-hundredweight margin protection at no cost on 80 percent of their highest annual milk production for any of the past three years preceding implementation of the program. PD

USDA DOES NOT EXPECT COW NUMBERS TO DECLINE UNTIL 2013

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Feb Mar Apr May July AugJune Sept Oct Dec Jan2012

Nov Feb Mar Apr May JuneAug Sept Oct Nov DecJuly2009

Feb Mar Apr May June July Aug Sept Oct Nov DecJan2010

Jan2011

CA Class 1price

Federal Class I price$9

$11$13$15$17$19$21$23$25

MARKET WATCHMARKET WATCH NO MAJOR PRICING CHANGES PREDICTEDDAIRY PRICES

Katie KrupaDirector of Producer ServicesRice [email protected]

June 2012: $15.24 High: $21.78 Low: $10.04June 2012: $17.08 High: $23.84 Low: $11.98

Fluid milk prices (in dollars)

Recently, the tone in the market has shifted from bearish and extremely nervous to comfortable and even a touch bullish. In early May, Class III futures were forecasting a brutal couple months for dairymen with May trading below $15, June trading below $14 and July trading just above $14. Low milk prices coupled with higher feed prices were predicting a milk-feed margin that was comparable to 2009 levels. But after trading at those low levels for several days, the market started to turn and nearly every day it moved another notch higher. By May 23, the May price is comfortable over $15 and, more notably, the June price is trading back up to $15.50 and July has again reached $16. � e back half of the year has also found some strength in recent weeks. Trading around $15.10 earlier in May, the six-month average has increased nearly $1 in just over two weeks.

Overall, it seems that the market has found a bottom and is now going to test some higher prices. Although there is still a more-than-adequate supply of milk, it appears that the worst of the spring fl ush is behind us and hopes are for a slowing milk supply as we enter the summer months. Quotas and premium deductions imposed by cooperatives and processors across the country will hopefully result in a slowed growth of milk production. � e demand side continues to hold its ground with both the domestic and international demand staying relatively strong. � is continued demand is what has supported the Class III milk price in recent months and kept us from repeating a scenario similar to 2009 – low demand and more-than-adequate supplies.

While it seems that the worst is behind us, we have experienced a great amount of volatility in recent weeks, especially in the Class III futures, and I would not be surprised if that volatility continues. Although it seems we are making a steady climb out of the hole, the ground is not completely steady and a seemingly minor bump may push us back a bit. While the volatility may continue, it appears that the market has tested the lows and, unless there is a major shakeup in the system, we should primarily see prices trade higher than what we saw earlier in May.

For dairymen across the country, current Class III futures prices for the upcoming months are sustainable for some, but not for others. For the most part, producers out West are still dollars below break-even, while those in the middle and eastern parts of the country can make these prices

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Feb Mar Apr May June July Aug Sept Oct Nov DecMay2010

Feb Mar AprJune July Aug Sept Oct Nov Dec

Futures2012

Jan2011

Jan2012

2013

$11

$13

$15

$17

$19

$21

$23

BUTTER PRICE WORKING BACK up TO $1.40Class III (in dollars)

10/1/11

11/5/11

12/3/11

7/2/11

8/6/11

9/3/11

1/7/12

3/3/12

4/7/12

5/5/12

5/19/12

2/4/12

5/28/116/4/11

20102011

$1.25

$1.50

$1.75

$2.00

$2.25

$2.50May 19, 2012: $1.35 High: $2.23 Low: $1.31Butter (weekly average in dollars)

5/18/12

5/21/12

5/23/12

5/4/12

5/7/12

5/8/12

5/9/12

5/10/12

5/11/12

5/14/12

5/15/12

5/16/12

5/17/12

5/22/12

5/3/12

$1.29$1.30$1.31$1.32$1.33$1.34$1.35$1.36$1.37$1.38$1.39

After bottoming at $1.30 in early May, which is the lowest trading price in over two years, the spot butter price has inched its way back to $1.39. Although there are ample inventories of butter, the butter price found some strength and is working its way back to $1.40.

MarFebOct NovMay2011

Jan2012

AprJune Aug SeptJuly Dec

20102011

$1.10$1.20$1.30$1.40$1.50$1.60$1.70$1.80$1.90

Apr. 2012: $1.33 High: $1.74 Low: $1.26Non-fat dry milk

2010

2011

10/1/11

11/5/11

12/3/11

7/2/11

8/6/11

9/3/11

3/3/12

5/5/12

5/19/12

4/7/12

1/7/12

2/4/12

5/28/116/4/11

$1.25

$1.50

$1.75

$2.00

$2.25

5/18/12

5/21/12

5/3/12

5/4/12

5/7/12

5/8/12

5/9/12

5/10/12

5/11/12

5/14/12

5/15/12

5/16/12

5/17/12

5/22/12

5/23/12

$1.48

$1.49

$1.50

$1.51

$1.52

$1.53

$1.54

May 19, 2012: $1.50High: $2.15 Low: $1.32Cheese

(weekly average in dollars)

There continues to be no major changes in the spot cheese market. Both blocks and barrels traded within a four-cent range recently, with blocks reaching $1.50 and barrels $1.47. The Class III futures are predicting that cheese will continue to climb, but the market is currently making these moves very slowly.

Apr. 2012: $15.72 High: $21.67 Low: $13.38

cash fl ow with little pain. With no major pricing changes projected in the upcoming months, it will be interesting to see if this pricing dynamic will result in any major changes to production growth or pricing systems in the western part of the country. PD

Katie Krupa is the director of producer

services with Chicago-based Rice Dairy, a boutique brokerage fi rm off ering guidance, analysis, and execution services on futures, options, spot and forward markets. You can reach Katie at [email protected]. Visit www.ricedairy.com. � ere is risk of loss trading commodity futures and options. Past results are not indicative of future results.

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400

500

600

700

800581 630 595 NA 593 596 603 506 563 585 577 497 554 609 605 524 585 627 589 505 NA 606 590 489 580

Number of workers employed in ag labor (in thousands)

MARKET WATCHMARKET WATCH U.S. LIVESTOCK WAGE RATE UP 28 CENTSLABOR

Livestock wages and number of employees employed in ag laborSource: NASS, Agricultural Statistics Board, May 2012

Pacifi c

$12.62 $11.78 +.84¢48 49 -2.0%

April ’12 October ’11 Change

Mountain I

$10.60 $10.08 +.52¢24 21 +14.3%

April ’12 October ’11 ChangeNorthern Plains

$11.18 $10.61 +.57¢26 30 -13.3%


Southern Plains

$10.00 $11.03 +$1.0340 37 +8.1%


Mountain II

$10.07 $10.22 -.15¢13 14 -7.1%


California

$11.85 $11.20 +.65¢137 150 -8.7%


Mountain III

$10.07 $10.55 -.48¢18 16 +12.5%

April ’12 October ’11 Change Delta

$10.38 $9.68 +.70¢18 22 -18.2%


Corn Belt II

$11.60 $10.60 +$1.0019 20 -5.0%


Corn Belt I

$12.59 $11.01 +$1.5835 31 +12.9%


Lake States

$11.59 $10.71 +.88¢42 46 -8.7%

April ’12 October ’11 ChangeNortheast I

$10.30 $11.18 -.88¢23 30 -23.3%


Appalachian I

$9.80 $10.50 -.70¢22 28 -21.4%


Northeast II

$9.84 $10.43 -.59¢26 26 NC


Appalachian II

$8.76 $9.58 -.82¢17 11 +54.5%


Southeast

$9.91 $9.09 +.82¢26 19 +36.8%


Florida

$10.35 $10.20 +.15¢41 34 +20.6%


Northwest

$11.10 $10.69 +.41¢85 84 +1.2%


East Coast

$9.91 $10.09 -.19¢173 170 +1.8%


Midwest

$11.74 $10.73 +$1.01122 127 -3.9%


Southwest

$10.64 $10.93 -.29¢195 203 -3.9%


United States

$10.95 $10.67 +.28¢580 590 -1.7%


400

500

600

700

800

October 2009October 2009October 2009October 2009

January 2010January 2010January 2010January 2010January 2010

January 2011January 2011January 2011January 2011

April 2011

July 2011July 2011July 2011July 2011

October 2011October 2011October 2011October 2011October 2011

April 2012April 2012April 2012April 2012



July 2006July 2006July 2006July 2006July 2006

October 2006October 2006October 2006





January 2007

April 2008April 2008April 2008April 2008April 2008







October 2010October 2010October 2010October 2010


581 630 595 NA 593 596 603 506 563 585 577 497 554 609 605 524 585 627 589 505 NA 606 590 489 580

Number of workers employed in ag labor (in thousands)

Livestock wage rate

Employees in ag labor (in thousands)


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