2013-14 Dairy Outlook: Indiana Perspectives

2013-14 Dairy Outlook: Indiana Perspectives Nicole Olynk Widmar and Mike Schutz Purdue University

2013 in Review Purdue University is an Equal Opportunity/Equal Access institution. Purdue University is an Equal Opportunity/Equal Access institution.

Livestock Marketing Information Center Data Source: USDA-NASS Last official numbers released by USDA-NASS was for February 2013. All data points following are LMIC estimates.

? Purdue University is an Equal Opportunity/Equal Access institution. 8/14/13 Source:http://future.aae.wisc.edu/

Slaughter Dairy CowsManaging US Herd Size? With tight margins and high cull cow values … what next??? Dairy Cows (1000s.) Purdue University is an Equal Opportunity/Equal Access institution. Livestock Marketing Information Center Data Source: USDA-NASS 08/15/2013

Production per Cow in Indiana Very high digestibility of drought - stressed forages? Or are cow numbers significantly underestimated? Pounds Purdue University is an Equal Opportunity/Equal Access institution. Livestock Marketing Information Center Data Source: USDA-NASS 10/16/2012

Livestock Marketing Information Center Data Source: USDA-NASS

Indiana State Trends June 2000 1668 786 2454 148K 198M 1400 June 2012 1240 163 1403 176K 307M 1745 June 2013 1216 130* 1346 ~175K 328M ~1874 Change ‘97 to ‘13 - 35% - 88% - 55% +25% +76% +36% June 1997 1875 1104 2979 140K 186M 1380 June 2006 1392 324 1716 166K 277M 1670 Grade A Herds Grade B Herds Farms Cows Milk Production Production/cow *Annual decline in Manufacturing Grade herds driven by state code changes to SCC limit of 750,000 cells/ml (same as Grade A), and requirement of running hot water in milk house. (Dairy Program, IBOAH & Indiana Ag. Statistics)

Livestock Marketing Information Center Data Source: USDA-NASS, Compiled & Analysis by LMIC

Purdue University is an Equal Opportunity/Equal Access institution. 8/14/13 Source:http://future.aae.wisc.edu/

Livestock Marketing Information Center Data Source: USDA-NASS, Compiled & Analysis by LMIC

Purdue University is an Equal Opportunity/Equal Access institution. Source:http://future.aae.wisc.edu/

Livestock Marketing Information Center Data Source: USDA/NASS

Livestock Marketing Information Center Data Source: USDA-AMS, Dairy Market News

Livestock Marketing Information Center Data Source: USDA/NASS

June 2013 exports were 2nd highest month ever, totalling $596 million  (2nd to May 2013) totalling $631 million * Fiscal year 2013 up 9% from previous period Purdue University is an Equal Opportunity/Equal Access institution.

Purdue University is an Equal Opportunity/Equal Access institution.

Milk Price Purdue University is an Equal Opportunity/Equal Access institution.

Milk Class Prices (8/15/2015) $ 2006 2010 2007 2008 2009 2011 2012 2014 2013 Purdue University is an Equal Opportunity/Equal Access institution. Livestock Marketing Information Center Data Source: USDA/NASS 8/15/2013

October 2013 Milk – as of 8-8-13 • 25% chance less than $17.30 • 25% changes more than $19.25 Most likely price at maturity: $18.16 Source: Jim Hilker's Market Outlook & Probabilistic Price Forecasts for Grain & Livestock; Michigan State University, https://www.msu.edu/~hilker/ Purdue University is an Equal Opportunity/Equal Access institution.

December 2013 Milk – as of 8-8-13 • 25% chance less than $15.77 • 25% changes more than $18.15 Most likely price at maturity: $16.75 Source: Jim Hilker's Market Outlook & Probabilistic Price Forecasts for Grain & Livestock; Michigan State University, https://www.msu.edu/~hilker/ Purdue University is an Equal Opportunity/Equal Access institution.

February 2014 Milk – as of 8-8-13 • 25% chance less than $15.03 • 25% changes more than $17.61 Most likely price at maturity: $16.05 Source: Jim Hilker's Market Outlook & Probabilistic Price Forecasts for Grain & Livestock; Michigan State University, https://www.msu.edu/~hilker/ Purdue University is an Equal Opportunity/Equal Access institution.

Milk Class Prices (8/15/2015) $ 2006 2010 2007 2008 2009 2011 2012 2014 2013 Purdue University is an Equal Opportunity/Equal Access institution. Livestock Marketing Information Center Data Source: USDA/NASS 8/15/2013

Policy: What the US Dairy Industry fears the Dairy Title of the US Farm Bill will look like coming out of conference:

MILC • Payment thus far: • Jan 11.8 ¢/cwt • Feb 52.5 • March 75.5 • April 69.9 • May 74.2 • June 21.87 • July (projected less than 10 ¢/cwt) – likely last payment of the year Purdue University is an Equal Opportunity/Equal Access institution.

Lower milk prices LOWER feed prices Building stocks – especially butter and cheese 24% increase in butter stocks over a year ago 8% higher total cheese stocks Holiday baking season is upcoming … helping butter and cheese prices Extremely strong export markets Nonfat dry milk powder up 23% in May over a year ago; 7% increase year-to-date Increase in cow numbers in 18 of 23 dairy states (mostly East) *Increase* in production for US and traditional dairy states How much production/cow and how much cow number growth? Milk Price Outlook

Nicole Olynk Widmar nwidmar@purdue.edu Mike Schutz mschutz@purdue.edu Purdue University is an Equal Opportunity/Equal Access institution.

Purdue University is an Equal Opportunity/Equal Access institution. 8/14/13 Source:http://future.aae.wisc.edu/

Fluid milk sales by category Million Lbs. Purdue University is an Equal Opportunity/Equal Access institution. Livestock Marketing Information Center Data Source: USDA/NASS

2013-14 Dairy Outlook: Indiana Perspectives