CME: Farm Profitability Eroding This Autumn
US - Barrels sold off aggressively (-9.5¢), sending nearby milk futures into a tailspin. DEC and JAN were each down more than 50¢ this morning but came back to close at -37¢ and -33¢, respectively, writes Alan Levitt. Cheese futures settled lower as well. Blocks fell “only” 4.25¢, which
puts blocks back above barrels for the first time since 31 October.
Spot butter was offered a
penny lower, leading to declines in butter futures. A total of 32 loads of butter have
traded in the first three days of the week, making it already the most active week in more
than a year-and-a-half. Whey futures continued to press higher.
Farm profitability shrunk for the fourth straight month in November. The All-Milk price
was estimated at $19.90, unchanged from October, while feed costs increased about one per cent,
according to USDA’s “Ag Prices” report released this afternoon.
The corn price increased
29¢/bushel to $6.00, but soybeans dropped 20¢/bushel to $11.50 and alfalfa hay declined
$5/ton to $198.00.
Feed costs compute out to $11.06 per hundred pounds of milk,
leaving “Income over feed costs” of $8.84/cwt., down from $8.97/cwt. in October. This is slightly below the 10-year average IOFC of $9.09/cwt.
(see chart).
The California Weighted Average Price for NDM dropped 7.7¢ last week to $1.3894, the lowest price since late February.
Further Reading
![]() | - | You can view the full report by clicking here. |
TheMeatSite News Desk