Dairy Outlook 2013 Marin Bozic Midwest Dairy Expo St Cloud, MN November 27, 2012

Dairy Food Marketing Economics Funded by dairy check-off Located at the University of Minnesota, but covering 10-state area Research: Risk Management Price Analysis Consumer Insights Dairy Technology Assessment

MMPA – supporting policy & education work

All-milk price:

Milk Production: 2012 vs Source: Daily Dairy Report

Year-to-Year Changes in U.S. Milk Production

Year-to-Year Changes in Milk Per Cow

Weather Outlook (Feb-Mar-Apr 2013) Source:

Weather Outlook May-Jun-Jul 2013

Difference in U.S. vs. International Cheese Prices

Corn: Small stocks = explosive price dynamics

Is Inflation a Problem?

Growth vs. Deleveraging

The Kiwi Cycle (Change in Per Cow Milk Yield)

Source:

Income over Feed Costs Margin:

Home-feed profile: Insuring 8-10 th month

Policy outlook for )ObamaCare 2)2012/3 Farm Bill -MILC, DPPSP gone -Margin insurance, market stabilization likely 3) Immigration reform

The Bottom Line 1)High feed costs will keep milk production in check. Exports may falter, providing additional domestic supply. 2)Some chance drought may stay with us. 3)High volatility is the new normal, for several years at least. 4)Big policy changes coming up.

Chuck Norris doesn’t need to forecast… he knows prices! Ignorance abhors uncertainty. Beware of overconfident brokers, forecasters or policy insiders!

Dairy Outlook 2013 presented at the Midwest Dairy Expo 2012 Dr. Marin Bozic Department of Applied Economics University of Minnesota-Twin Cities 317c Ruttan Hall 1994 Buford Avenue St Paul, MN You may download this presentation at