0708 PD: Climate change stalls milk flow

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Friday, 25 April 2008 10:57

The California May 2008 average Class 1 price based on production is $18.81.

The average is $1.13 lower than April 2008 but $1.34 higher than May 2007.

Total farm level milk production levels are higher than a year ago, but moderating. Costs of production issues continue to shadow the pricing equations. While farm level milk prices are historically high, production costs have moved higher for feed, fuel, animals, supplies and utilities. Processors are working hard to handle the available milk supplies.Cream markets are steady. Prices are mostly steady with both multiples and butter prices holding.Weather conditions remain quite variable in the Pacific Northwest. A few warm days are followed by much cooler conditions. The result of the variability is that the milk flow is not doing much yet this spring.

Grass growth in some areas has been quite slow while alfalfa growth has looked pretty good. Some milk producers are concerned that the slowly developing spring could delay the first cutting of hay long enough so that stocks of old crop hay remaining could become a real issue. Some coastal pastures are wet enough again that grazing is limited.

Offerings of milk from south of the region are common at some very attractive prices. Some is being accepted, but much of it is being rejected because plants do not have the room or do not want to deal with it.

Heifer prices at the monthly sale in the region were lower. The average was $2075-2100 which is down $175-200 from last month. The quality of the animals was not quite as good and the demand side was also slower. Demand for heifers may be slowing in the West.

Conditions are finally warm and dry enough that some field work has started in Utah and Idaho. Things are getting a little later than a normal spring so that dairy producers are concerned about the amount of feed that they have left. Water conditions look reasonably good and most contacts expect that hay acres might hold about steady. The competition from spring wheat will continue to be a concern until planting is done. Tests are beginning to move a bit lower which is the normal case as spring approaches. Milk receipts have not done much yet since the weather has been unseasonably cold for the region.  PD


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