by Andrew P. Griffith, Livestock Marketing Specialist
October 31, 2024
Milk Production
Milk production in the 24 major states during September totaled 17.5 billion pounds, up 0.2 percent from September 2023. Production per cow for September averaged 1,966 pounds. The number of milk cows was 8.89 million head, unchanged from August 2024. August production was revised up 0.5% from preliminary estimates. For milk production in the top 5 producing states, California increased 0.1% from September a year ago; Wisconsin down 0.5%; Texas up 4.9%; Idaho up 1.8%; and New York up 1.2%. Other states with large production increases were South Dakota (7.9%) and Kansas (3.0%). States with large production decreases were New Mexico (-9.1%) Virginia (-5.3%).
Milk Price and Utilization
The Southeast Uniform milk price for September was $25.01, up $0.44 from August and $2.64 higher than September 2023. The Appalachian Uniform milk price was $24.48 up $0.50 from August and $2.80 higher than September 2023. September’s Class III price was $23.34, up $2.68 from August, and $4.95 higher than September a year ago. The Class IV price was up $0.71 at $22.29, and $3.20 higher than September 2023. The Class I Mover price for October is $23.17, up $1.57 from September. The milk/feed ratio for September was 3.00, up 0.21 from August.
Southeast Class I utilization was 79.22%, down 0.02% from August and 1.28% higher than September a year ago. The Uniform butterfat price was $3.6019, up 0.92 cents from last month and 50.86 cents higher than September 2023. The September Class I price was $25.40. October Class I price is $26.97. Appalachian Class I utilization was 71.39%, down 1.60% from August, and 0.81% higher than September a year ago. The Uniform butterfat price was $3.6044, up 1.33 cents from last month and 50.72 cents higher than September 2023. The September Class I price was $25.00.
Cheese Production and Stocks
Total cheese production in August was 1.20 billion pounds, up 1.7% from a year ago while butter production was up 14.5% to 159 million pounds. Nonfat dry milk (NDM) production was up 2.2% compared to a year ago with total production at 115 million pounds while skim milk powder (SMP) production was down 29.4% to 50.3 million pounds compared to a year ago. Total cheese stocks at the end of September were down 7% from September a year ago and down 1% from the previous month while butter stocks were down 7% from last month and up 14% from a year ago.
Cow Slaughter
Dairy cow slaughter in September was 210,400 head, down 20,300 head from August and 30,100 less than September 2023.
Southeast Federal Order Prices
| Month | Uniform Price $/cwt. | Class I Price $/cwt. | Class III Price $/cwt. | Class IV Price $/cwt. | Class I % Utilization | Butterfat Price $/lb. |
|---|---|---|---|---|---|---|
| Apr 24 | 22.27 | 22.98 | 15.50 | 20.11 | 70.88 | 3.3066 |
| May 24 | 22.08 | 22.26 | 18.55 | 20.50 | 70.94 | 3.4061 |
| Jun 24 | 23.23 | 23.88 | 19.87 | 21.08 | 60.11 | 3.5233 |
| Jul 24 | 24.25 | 24.91 | 19.79 | 21.31 | 74.93 | 3.5700 |
| Aug 24 | 24.57 | 25.12 | 20.66 | 21.58 | 79.24 | 3.5927 |
| Sep 24 | 25.01 | 25.40 | 23.34 | 22.29 | 79.22 | 3.6019 |
Appalachian Federal Order Prices
| Month | Uniform Price $/cwt. | Class I Price $/cwt. | Class III Price $/cwt. | Class IV Price $/cwt. | Class I % Utilization | Butterfat Price $/lb. |
|---|---|---|---|---|---|---|
| Apr 24 | 21.80 | 22.58 | 15.50 | 20.11 | 69.26 | 3.3082 |
| May 24 | 21.77 | 21.86 | 18.55 | 20.50 | 70.54 | 3.4093 |
| Jun 24 | 22.84 | 23.48 | 19.87 | 21.08 | 63.13 | 3.5232 |
| Jul 24 | 23.72 | 24.51 | 19.79 | 21.31 | 70.28 | 3.5706 |
| Aug 24 | 23.98 | 24.72 | 20.66 | 21.58 | 72.99 | 3.5911 |
| Seo 24 | 24.48 | 25.00 | 23.34 | 22.29 | 71.39 | 3.6044 |
What is the Market Offering for Milk to be Sold in January?
Ex: It is Oct 31 and Jan. Class III milk futures are trading at $19.65. Local Jan. basis estimate is +$3.00.
| If January futures | = | 21.25 | 19.75 | 18.25 | |||
| and actual blend price | = | 24.25 | 22.75 | 21.25 | |||
| Sample Strategies | Realized Prices for January Milk | ||||||
| 1) Sold Futures | @ | 19.65 | 22.65 | 22.65 | 22.65 | ||
| 2) Bought Put | 18.75 | @ | 0.42 | 23.83 | 22.33 | 21.33 | |
| 3) Bought Put | 19.25 | @ | 0.63 | 23.62 | 22.12 | 21.62 | |
| 4) Bought Put | 19.75 | @ | 0.87 | 23.38 | 21.88 | 21.88 | |
| 5) Synthetic Put | |||||||
| Sold Futures | @ | 19.65 | |||||
| Bought Call | 20.75 | @ | 0.36 | 22.79 | 22.29 | 22.29 | |