Dairy markets favorable for start of new year

WOOSTER, Ohio — As corn and feed prices drop, dairy and other livestock farmers could be in for a favorable 2014.

Milk production in Ohio has increased nearly 1.3 percent per cow per day, with the same number of cows as 2012 — about 270,000 head.

And, prices for all classes of milk are up, anywhere from 3-16 percent over 2012, according to data shared by OSU Dairy Specialist Cam Thraen, who spoke Dec. 12 during the Ag Outlook and Policy Meeting in Wooster.

As of November, Class I milk in the Mideast Federal Milk Marketing Order, which includes Ohio and Western Pa., sold for $20.55 per counterweight (100 pounds), compared to $19.46 in 2012. The Class III price was up to $17.97, compared to $17.44 in 2012.

On a bigger picture, the total U.S. dairy cow numbers are flat at about 9.2 million head, while production of those same cows continues to expand, topping 200 billion pounds in 2013.

Consumer trends

Consumption of dairy products plays a big part in current pricing, including a strong world market. More than 15 percent of U.S. milk was exported in 2013, the most in recent history. Fluid milk consumption continued to decline, but cheese consumption increased.

From 1975 to 2012, U.S. fluid milk and cream consumption per capita has declined 25 percent, with the average person consuming under 20 pounds per year in 2012. Meanwhile, cheese consumption per capita has increased nearly 135 percent, with the average person eating 34 pounds of cheese in 2012.

Related: Grain outlook shows challenges ahead

Thraen said a big reason for the world demand is what he calls the “westernization” of diets.

“Diets around the world are becoming much more like our diets,” he said, which includes more protein sources, cheeses and high-end foods.

World cultures and societies are changing, he said, and so are the meals. More people are also eating dairy and other U.S. products in casual, every-day places, like coffee shops and chain restaurants.

Production costs

The average U.S. corn, soybean meal and alfalfa-based hay feed costs in 2013 $12.62 per 100 pounds of milk, compared to $13.22 in 2012.

Here is a summary of costs that Thraen predicts will be up, down, or be neutral, based on information from the U.S. National Agricultural Statistics Service.

• Prices that are up: Feed concentrate, machinery, herbicide, fertilizer and insecticide.

• Prices that are down: Milk cow replacements, feed grain, hay and forages, feed supplement, fertilizer, fuel and diesel.

• Prices that are neutral: Machinery prices paid and insecticide.

About the Author

Chris Kick lives in Wooster, Ohio. An American FFA Degree recipient, he holds a bachelor’s in creative writing from Ashland University. He spends his free time on his grandparents’ farms in Wayne and Holmes counties. More Stories by Chris Kick

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