Weekly Digest: Watch seasonal cull cow price patterns

first_imgWatch fall cull cow pricesAs beef cattle operations wean calves in fall, cow culling picks up. As a result, cull cow prices typically are lowest in the fourth quarter of the calendar year, according to the Livestock Marketing Information Center. Cull cow prices frequently – but not always – rise into the new calendar year.advertisementadvertisementSeveral factors underpin the seasonal pattern in cull cow prices. As mentioned, the supply of cull beef cows is largest in the fall. Fed cattle prices are typically highest in the winter and early spring months, which supports slaughter cow prices. Other factors that can significantly influence cull cow prices are the level of dairy cow slaughter and the amount of beef imported from Australia and New Zealand – beef that competes mostly in the “cow-beef” market and not as much with meats from fed steers and heifers.So far, 2017 dairy cow culling has been running ahead of last year’s pace, and a softening of milk prices could encourage more culling later this year. Combined with the influx of beef cow culls, this fall’s cull cow prices are forecast to decline.Depending on feed costs, it may be time to put some weight on cull cows and sell them in the first few months of 2018. However, push the pencil. Cull prices into early 2018 are forecast to increase, but not reach the levels of early 2017.California stand-alone quota plan sent to ag secretaryThe California Producer Review Board (PRB) took the next formal step to bring the state’s dairy farmers into the federal milk marketing order (FMMO) system, approving a stand-alone quota plan.The plan must now be approved by California ag secretary Karen Ross, and then approved in a dairy producer referendum, according to Geoff Vanden Heuvel, MPC board member and economics consultant, writing in the California Milk Producers Council newsletter. The final version of the recommended plan has been posted on the California Department of Food and Agriculture (CDFA) website.advertisementUnder the state’s milk marketing order, dairy farmers who own quota received additional revenue for their milk through a higher solids-not-fat price. Created in 1969, quota can be purchased, sold or transferred. Under the current state system, CDFA sets aside about $12 million to $13 million on a monthly basis from the pool, distributing the money to about 60 percent of California’s dairy farmers who own quota.The stand-alone quota program would be administered by the CDFA, separate from a federal order. It will only be implemented if California’s dairy producers vote to join the FMMO system. However, the dairy cooperatives petitioning to join the FMMO system have said they will only consider a California federal order if quota value is protected.Ballots are expected to be mailed to California dairy farmers in the next few weeks.Michigan’s dairy farmers to vote to keep checkoff dollars in stateMichigan dairy farmers will vote in a referendum on whether to continue retaining a portion of the dairy checkoff for state promotion and marketing programs. State law requires the vote is held every five years.A yes vote does not raise the mandated dairy checkoff, but rather assures 10 cents of the 15-cent-per-hundredweight checkoff remains in the state to fund the Michigan Dairy Market Program. That program is administered by 13 dairy farmer board members and carried out by the United Dairy Industry of Michigan.Ballots will be mailed by the Michigan Department of Agriculture and Rural Development (MDARD) in late September, and must be postmarked by Oct. 13.advertisementFifty percent of the ballots must be returned with a yes vote, and those ballots must represent more than 50 percent of the volume of milk represented by returned ballots, according to Ken Nobis, St. Johns dairy farmer and Michigan Milk Producers Association president.Milk hauler training academy developedWestern Dairy Transport, LLC (WDT) and Texas A&M University are partnering to enhance milk hauler training with the creation of the Professional Driver Training Academy. A grand opening was held Sept. 15, at Texas A&M’s RELLIS campus, Bryan, Texas.The academy was created to instruct employees in smooth-bore tanker operation to serve Texas’ growing dairy industry. Texas dairy farmers currently produce 100 million gallons of milk monthly. WDT is one of the nation’s largest milk and dairy haulers, serving customers in all 48 states and Mexico.Structural change making EU a beef exporterEuropean Union (EU) cattle inventories are forecast to decline steadily in 2017-18, with much of the downturn attributed to dairy, according to the USDA Foreign Agricultural Service Global Agricultural Information Network (GAIN).Due to restructuring of the dairy sector, farmers are switching from dairy to beef cattle. The Dutch government calculates a cap on phosphate emissions will require a 160,000-head reduction in the dairy herd. Countering some of that decline will be dairy herd growth in Ireland, Italy, Austria, Poland and Hungary as producers take advantage of recovering milk prices.Cattle slaughter is forecast to increase in both 2017 and 2018 due to restructuring of the dairy herd and increasing availability of suckling calves. Most of the additional beef supply is directed to foreign markets, making the EU a net exporter of beef for two successive years – the first time that’s happened since 2002. Digest Highlights: Seasonal beef cow culling impacts prices. California stand-alone quota plan advances. Michigan dairy checkoff vote set. Texas creates milk hauler academy. Dairy changes makie EU a beef exporter. Find a summary of these and other news here. Dave NatzkeEditorProgressive DairymanEmail Dave [email protected]last_img