CME: Dairy Farm Profitability Slips In October
US - Spot markets were quiet on the final day of the month, with no price changes, no trades and virtually no activity, writes Alan Levitt.
1 November 2011
1 minute read
Milk futures were 6-14¢ lower in the NOV11 to OCT12 contracts after posting healthy gains last week. Cheese futures were lower in the 2012 contracts, while whey futures were mixed.
Farm profitability declined for the third straight month in October, as milk prices fell faster than feed costs. The All-Milk price for October is estimated at $19.90, down $1.20 from September.
Meanwhile, the cost of feed to get 100 lbs. of milk was $11.12, down just 35¢ from last month.
Corn decreased 45¢ to $5.92/bushel and soybeans slipped 30¢ to $11.90/bushel. But alfalfa hay was up $7 to $203/ton. That left “Income over feed costs” of $8.78/cwt., 85¢/cwt. below September, according to data from USDA’s “Ag Prices” report released this afternoon (see chart).
Over the last 10 years, IOFC averaged $9.09/cwt. Thursday is the last day to trade OCT futures and options. USDA’s October prices come out Friday morning
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