Zach Myers, the risk education manager for Pennsylvania’s Center for Dairy Excellence, said that as of October 2022, U.S. dairy exports have gone up for seven months in a row. He said this in a presentation about profitability in December.
Also, for the first time, nonfat dry milk/skim milk powder had a year-over-year increase. This is the most-exported type of dairy. Myers said that exports “continue to be on track to set new records for both volume and value.”
In fact, the USDA’s “Dairy: World Markets and Trade” report from December 2022 said that in 2022, the value of all dairy exports broke records. Strong prices for dairy products around the world are what’s driving these exports.
The report goes on to say, “Through October, the value of dairy exports is up 25%, with strong growth across the major product groups, such as skim milk powder (NDM/SMP), whey, lactose, cheese, and butter. However, the average growth in export volume is only 5%.”
Myers also said that the U.S. made 18.25 billion pounds of milk in November, which was 1.3 percent more than in November 2021. In that year, the number of cows went up by 0.4%, to 9.42 million. Each cow that was lactating made 74.3 pounds of milk per day.
In terms of prices, the CME price for butter in November was $2.93, up from $1.99 the year before. The price for block cheese was $2.18, up from $1.86. The price of nonfat dry milk around the world is $1.41, but it will be $1.56 in 2021.
Myers said that the latest predictions for Class III and Class IV futures milk prices show that Class III has started to go down again after stabilising in the first part of November. As of December 15, the 12-month average for Class III was $19.80 per cwt, which was 79 cents less than it was in mid-November. Class IV, on the other hand, has been going down for months, with a 12-month average price of $20.39.
But Myers said that even though those average milk prices went down, the prices now are still much higher than the average prices for the past five years, which were $17.66 for Class III and $16.78 for Class IV.
In October, the dairy margin coverage of $19.71 per cwt did not cause an indemnity to be paid out. The cost of feed went down by 59 cents to $15.19 per cwt, while the price of all milk went up by $1.50 to $25.90 per cwt.
Myers made a point of saying that the USDA has made the sign-up period for 2023 last until January 31, 2023. He looked at the value of dairy margin coverage as a risk management tool every year since it started in 2019 by giving enrolled dairy farms a net benefit.
Since margins are expected to be much lower in 2023 and indemnities are expected from January to August, dairy managers who have not yet joined the programme may want to do so. Signing up must be done at a Farm Service Agency office near you.
The USDA report on trade summed up the conditions for milk production and several other products so that exports from major countries could be predicted for 2023.
In Argentina, milk production is expected to go back up in 2023 because the weather will be back to normal after a dry summer and cold fall hurt yields in 2022. Also, better access to concentrates, fertilisers, and fuels, as well as investments in technologies that make animals more comfortable and better ways to care for them, should help increase milk production.
Even though record milk, low hay and grain prices, and above-average rainfall are all good signs that could lead to more dairy cows and more milk production, Australia’s milk production is expected to go down.
Due to a lack of workers and rising energy and fertiliser costs, dairy farmers are reducing the number of cows they have and switching to beef cattle production.
In 2022, there was a drought across the European Union. This made it harder to make feed for animals and less milk. Also, higher costs for energy, fertiliser, and feed to make milk cancelled out higher prices at the farm gate. Consumer demand for dairy products like goat cheeses and buffalo mozzarella, as well as local milk production for products with a protected geographical indication, helped the Mediterranean member states do better.
But French and Italian farmers couldn’t meet GI feeding standards because they didn’t have enough feed.
Even though milk production has stayed the same, the number of dairy cows in the EU has gone down, which has hurt EU production. Also, the new Common Agricultural Policy and the Farm to Fork Strategy, which will go along with it, are likely to add more uncertainty to their dairy sector. In 2023, milk production in the EU is expected to go down.
Due to a smaller dairy herd and slightly less milk per cow, New Zealand’s milk production is expected to go down a little bit in 2023. Cow yields are likely to be affected by a third consecutive La Nia weather pattern, a smaller feed base because of a cold and wet winter that slowed spring pasture growth, and a smaller winter forage crop because of long periods of dry weather in the first half of 2022.
The number of cows is also expected to go down, which will continue the trend of their herds getting smaller. Rising costs of inputs and problems in the global supply chain also hurt producers.
In October, the value of U.S. dairy exports rose to $818.7 million. This was due to more shipments of high-value cheese and butter. At the end of the first 10 months of 2022, the value of U.S. dairy exports was a record $8.08 billion, beating the previous record of $7.7 billion set in 2021.
In Myers’s report, he said that U.S. exports from that time until 2022 were still on track to break records for both volume and value.
U.S. dairy exports have been going up for seven months.
Send this to a friend