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

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

Purdue University is an Equal Opportunity/Equal Access institution. Production per Cow in Indiana Very high digestibility of drought - stressed forages? Or are cow numbers significantly underestimated? Pounds Total milk produced is known; assuming 175 thousand head for March and April; 176 thousand head (guess) for May and June … still huge increases. Livestock Marketing Information Center Data Source: USDA-NASS Purdue University is an Equal Opportunity/Equal Access institution. 10/16/2012

Livestock Marketing Information Center Data Source: USDA-NASS

Indiana State Trends June 1997 1875 1104 2979 140K 186M 1380 June 2000 1668 786 2454 148K 198M 1400 June 2006 1392 324 1716 166K 277M 1670 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% 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/

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

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

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

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.

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

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

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.

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.

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

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

Milk Price Outlook 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?

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

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

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

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

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

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