cameron s. thraen osue dairy economist
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Cameron S. Thraen OSUE Dairy Economist. Dairy Market Outlook. Prepared for the 2003 Midwest, Great Plains, and Western Outlook Conference August 14,15 Indianapolis, IN. Charles Dickens on the U.S. Dairy Economy…. “It was the best of times, it was the worst of times, - PowerPoint PPT PresentationTRANSCRIPT
Cameron S. ThraenOSUE Dairy Economist
DairyDairyMarketMarketOutlookOutlook
Prepared for the 2003 Midwest, Great Plains, and Western Outlook Conference
August 14,15 Indianapolis, IN
2003 - 2004 Policy & Outlook Program2
Charles Dickens on the U.S. Dairy Economy…
“It was the best of times, it was the worst of times,
It was the spring of hope, it was the winter of despair”.
Tale of Two Cities, Charles Dickens
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A Dickens Economy…U.S. All Milk Price $/cwt
Cash Income from sale of milk
Percent Change
1999 $14.35 $23.3 b AMP / C$
2000 $12.44 $20.7 b -13.6% / -11%
2001* $15.05 $24.9 b +21.4% / +19.9%
2002* $12.11 $20.5 b -19.5% / -17.46%
2003* $11.85 $20.1 b -2.1% /
-1.9%
*Does not include MILC payments
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20 State Cows and Yields Turn Down… finally
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Total U.S. milk productionslows its growth rate…
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Margins drive expansion…
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Regional Milk Production Trends…
West (CA, ID, NM, WA, TX) Upper Midwest (WI, MN) North East (NY, VT) North Central (OH, MI, PA) Midcentral (IA, IL, IN)
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Cows in the West…
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Yields in the West…
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Cows in the UMW…
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Yields in the UMW…
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Cows in the NE…
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Yields in the NE…
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Cows in the NC…
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Yields in the NC…
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Cows in the MC…
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Yields in the MC…
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Big West vs. Big East…
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Use, Inventories and all that jazz…• Commercial Disappearance (MF)
• Stocks to Production Ratios– Butter and Cheese
• U.S. All Milk Price
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Commercial Disappearance in all products (milkfat basis)…
Source: USDA/ERS/AMS
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Butter Stocks to Production Ratio
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Keeps Lid on NASS Butter Prices…
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Cheese Stocks to Production Ratio
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Not a limit to NASS Cheese Prices…
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Milk Supply & Demand Summary (mf basis)1998 1999 2000 2001
Milk Cows – U.S.1,000’s 9,154 9,156 9,206 9,115
Milk / cow 17,189 17,771 18,202 18,139Total Milk-B Lbs. 157.3 162.7 167.5 165.3
Marketings- B Lbs. 156.0 161.3 166.2 164.0
Beg. Stocks- B Lbs. 4.9 5.3 6.1 6.8
Imports- B Lbs. 4.5 4.8 4.4 5.7
Total Supply- B Lbs. 165.4 171.4 176.7 176.6
End Stocks- B Lbs. 5.3 6.1 6.8 7.0
Net removals- B Lbs.Net removals- B Lbs.
0.4(3.9
skim)
0.3(6.4
skim)
0.8(8.6
skim)
0.2(5.8
skim)CommercialDisappearance 159.7 165.0 169.1 169.4
Source: USDA/ERS LDPSource: USDA/ERS/AMS
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Milk Supply & Demand Summary (mf basis)
2002 2003:Q1 2003:Q2 2003Milk Cows – U.S.1,000’s 9,141 9,135 9,126 9,120
Milk / cow 18,573 4,525 4,720 18,760Total Milk-B Lbs. 169.8 41,335 43,000 171.1
Marketings- B Lbs. 168.5 41,000 42,700 169.8
Beg. Stocks- B Lbs. 7.0 8.9 9.2 8.9
Imports- B Lbs. 4.8 1.2 1.2 4.8
Total Supply- B Lbs. 180.3 51.1 53.1 183.5
End Stocks- B Lbs. 8.9 9.2 9.6 7.0
Net removals- B Lbs.Net removals- B Lbs.
0.2(5.8
skim)
0.1(2.5
skim)
0.1(2.5
skim)
0.2(6.0
skim)CommercialDisappearance 171.2 41.0 42.5 173.8
Source: USDA/ERS LDPSource: CsT / OSUE
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2003 – 2004 Price Forecast
• Review Handouts on Milk Price Update• Will the current price rally in the CME cash cheese
be sustained?• Butter inventories do not forecast a similar rise in
cash butter prices.
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Forecasts? Sure I got that…
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Dairy Commodity Prices ‘03
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2003 Milk Component Prices
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Dairy Commodity Prices ‘04
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2004 Milk Component Prices
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Class III CME Settle Prices
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Dairy Market & Policy Challenges Ahead…
MILC… who’s got the MILC $$’s Higher milk prices a welcome relief !! $1.670 billion through August 7, 2003 Higher market prices may take the heat
off…?
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MILC Numbers Selected States
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Dairy Market & Policy Challenges Ahead…
Import of Milk Proteins (HR1160 / S560)
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Cam ThraenCam Thraen(614) 292-2702(614) 292-2702
[email protected]/programs/ohiodairy/Aede.osu.edu/programs/ohiodairy/
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Casein & Caseinates…