Quarterly Dairy and Hay Market Snapshots

With third quarter’s Market Snapshots for dairy here is Northwest Farm Credit Services Michael Stolp.
Stolp: “After increasing more than $2 per hundredweight between May and August, December class III milk futures slipped, weighed down by butter and cheese inventories. However, lower feed prices are softening falling milk prices’ impact on dairy producers’ profit margins. Cost of production is down by as much as $1.50 per cwt on dairies where new-crop inventories enter feed rations. Globally, milk production is slowing, especially in the European Union and Australia.”
The Snapshot also states as dairy product prices soften, exports of milk fat products are expected to increase 14.3 percent in the fourth quarter of 2016, and exports of powder products are expected to increase by 10.3 percent. Draws by exports and domestic use are projected to reduce ending commercial stocks of powder products by 0.7 percent.
Stolp continues with the hay market snapshot
Stolp: “Ample and low-priced feed supplies are swamping hay markets. Favorable growing conditions increased hay, grass, alfalfa and corn silage yields throughout the Northwest. Strong production and old-crop inventory carryover continue to challenge hay prices, with many growers accepting offers between $55 and $100 per ton for fair-quality hay. Demand from U.S. dairies is lackluster, but export demand is up nearly 11 percent year to date.”