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Higher Weekly Dairy Cow Slaughter

16 April 2012

US - Dairy cow slaughter for the week ending Mar. 31 totaled 63,100 head, up 1,600 head vs. the prior week and 12.5 per cent (+7,000 head) greater than the same period last year (see chart). That is the highest year-over-year percentage gain in weekly dairy cow slaughter for 2012, writes Mary Ledman, Sara Dorland, Sarina Sharp and Karen Endres on April 13 2012.

Dairy cow slaughter is expected to trend higher according to Daily Dairy Report analysts, as mailbox milk prices are forecast to decrease in April and May 2012 vs. the prior month. What is less certain is whether higher slaughter rates will result in a reduction in the U.S. dairy herd, which is currently 87,000 head, or 0.9 per cent more than last year.

Dairy product prices in Europe and Oceania are trending lower according to USDA’s Dairy Market News. European SMP prices range from $2,575/MT to $2,775/MT. That is approximately $1.17/lb. to $1.26/lb. and are similar to US domestic NDM/ SMP prices. Oceania SMP prices are reportedly unsettled with a weak market undertone. Nevertheless, Ocean SMP prices range from $3,000/MT to $3,300/ MT. This indicates that NDM/SMP sourced from the US or Europe is more competitive in the global market than Oceania SMP.

The CME spot Cheddar barrel cheese price rebounded 5.25¢ in an active trading session today. Five loads of barrel cheese exchanged hands while the block market was quiet with no bids, offers or trades. The CME spot butter market settled unchanged at $1.4250/lb. with a single underthe- market bid at $1.4200/lb. left on the board. CME Grade A and Extra Grade NDM prices fell for the second consecutive day closing at $1.1925/lb. and $1.1825/lb., respectively on offers.

Nearby Class III and cheese futures posted strong gains after the spot trading sessions and closed higher while Class IV and NDM futures closed lower.


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