Outlook for the U.S. Dairy Sector in 2012
-
Upload
mufutau-bell -
Category
Documents
-
view
34 -
download
0
description
Transcript of Outlook for the U.S. Dairy Sector in 2012
![Page 1: Outlook for the U.S. Dairy Sector in 2012](https://reader035.fdocuments.net/reader035/viewer/2022062408/568134a0550346895d9b9a7b/html5/thumbnails/1.jpg)
Outlook for the U.S. Dairy Sector in 2012
Milton MadisonFarm Service Agency
U.S. Department of Agriculture
Presented at the 2012 USDA Outlook ForumWashington, D.C.February 24, 2012
![Page 2: Outlook for the U.S. Dairy Sector in 2012](https://reader035.fdocuments.net/reader035/viewer/2022062408/568134a0550346895d9b9a7b/html5/thumbnails/2.jpg)
Milk Production Increase Will Slow
• Returns increased in 2011, leading to:– More cows starting off in 2012– Higher productivity continues
• 2011 Production: 196.2 billion pounds, up 1.8%• 2012 Production: 199.0 billion pounds, up 1.4%
![Page 3: Outlook for the U.S. Dairy Sector in 2012](https://reader035.fdocuments.net/reader035/viewer/2022062408/568134a0550346895d9b9a7b/html5/thumbnails/3.jpg)
Replacement Cow Prices Staying Low With Ample Heifer Supplies
0
500
1,000
1,500
2,000
2,500
2005
2006
2007
2008
2009
2010
2011
2012
$ p
er
he
ad
45
46
47
48
49
50
51
52
he
ife
rs p
er
10
0 c
ow
s
Replacement Heifers per 100 Cows Replacement Cow Price
![Page 4: Outlook for the U.S. Dairy Sector in 2012](https://reader035.fdocuments.net/reader035/viewer/2022062408/568134a0550346895d9b9a7b/html5/thumbnails/4.jpg)
Quarterly Average U.S. Cow Herd
9.00
9.05
9.10
9.15
9.20
9.25
Jan-March Apr-June July-Sept Oct-Dec
Mill
ion
he
ad
2010 2011 2012*
*Forecast
![Page 5: Outlook for the U.S. Dairy Sector in 2012](https://reader035.fdocuments.net/reader035/viewer/2022062408/568134a0550346895d9b9a7b/html5/thumbnails/5.jpg)
Milk per Cow GrowthAdjusted for Leap Year
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Jan-March Apr-June July-Sept Oct-Dec
Per
cen
t
Average 2005-2009 2010 2011 2012*
*Forecast
![Page 6: Outlook for the U.S. Dairy Sector in 2012](https://reader035.fdocuments.net/reader035/viewer/2022062408/568134a0550346895d9b9a7b/html5/thumbnails/6.jpg)
Quarterly Average Milk per Cow
5000
5100
5200
5300
5400
5500
5600
Jan-March Apr-June July-Sept Oct-Dec
Po
un
ds
2010 2011 2012*
*Forecast
![Page 7: Outlook for the U.S. Dairy Sector in 2012](https://reader035.fdocuments.net/reader035/viewer/2022062408/568134a0550346895d9b9a7b/html5/thumbnails/7.jpg)
Quarterly U.S. Milk Production Larger
45
46
47
48
49
50
51
52
Jan-March Apr-June July-Sept Oct-Dec
Bil
lio
n p
ou
nd
s
2010 2011 2012*
*Forecast
![Page 8: Outlook for the U.S. Dairy Sector in 2012](https://reader035.fdocuments.net/reader035/viewer/2022062408/568134a0550346895d9b9a7b/html5/thumbnails/8.jpg)
Demand Growth Sluggish
• Commercial Use Showing Slow Growth– Fat basis use less than 1 percent higher in 2011– Skim solids basis use up 2 percent in 2011– Support from commercial exports of skim milk
products– No sales to CCC since 2009
• Commercial use in 2012 - 1 to 2 percent higher with lower prices
![Page 9: Outlook for the U.S. Dairy Sector in 2012](https://reader035.fdocuments.net/reader035/viewer/2022062408/568134a0550346895d9b9a7b/html5/thumbnails/9.jpg)
Quarterly Domestic Use Increasing
Fat Basis
35
37
39
41
43
45
47
49
Jan-March
Apr-June
July-Sept
Oct-Dec
Bil
lio
n p
ou
nd
s
2010 2011 2012*
Skim Solids
35
37
39
41
43
45
47
49
Jan-March
Apr-June
July-Sept
Oct-Dec
2010 2011 2012*
*Forecast
![Page 10: Outlook for the U.S. Dairy Sector in 2012](https://reader035.fdocuments.net/reader035/viewer/2022062408/568134a0550346895d9b9a7b/html5/thumbnails/10.jpg)
Commercial StocksMilk Equivalent
789
10111213141516
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Bil
lio
n p
ou
nd
s
Fat Basis Skim Solids Basis
*Forecast
* *
![Page 11: Outlook for the U.S. Dairy Sector in 2012](https://reader035.fdocuments.net/reader035/viewer/2022062408/568134a0550346895d9b9a7b/html5/thumbnails/11.jpg)
CCC Net RemovalsMilk Equivalent
-2
0
2
4
6
8
10
12
Bil
lio
n p
ou
nd
s
Fat Basis Skim Solids Basis
*Forecast
![Page 12: Outlook for the U.S. Dairy Sector in 2012](https://reader035.fdocuments.net/reader035/viewer/2022062408/568134a0550346895d9b9a7b/html5/thumbnails/12.jpg)
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
2005 2006 2007 2008 2009 2010 2011 2012*
$ Billion
U.S. Dairy Exports Forecast Near Record Fiscal Year
* Forecast
![Page 13: Outlook for the U.S. Dairy Sector in 2012](https://reader035.fdocuments.net/reader035/viewer/2022062408/568134a0550346895d9b9a7b/html5/thumbnails/13.jpg)
Quantity
(million lbs.)Percent of Production
Non-Fat Dry Milk 960 49
Whey 1020 71
Cheese 495 5
Lactose 689 69
Other 514 NA
Butter 140 8
U.S. Dairy Exports 2011
![Page 14: Outlook for the U.S. Dairy Sector in 2012](https://reader035.fdocuments.net/reader035/viewer/2022062408/568134a0550346895d9b9a7b/html5/thumbnails/14.jpg)
2002 2011
Mexico 229 1,111
Canada 195 429
China 33 313
Philippines 31 256
Japan 101 255
Korea 48 210
Indonesia 10 206
Vietnam 10 194
Malaysia 8 125
Egypt 2 106
Top Ten Destinations For U.S. Dairy Products ($ Million – Fiscal Year)
![Page 15: Outlook for the U.S. Dairy Sector in 2012](https://reader035.fdocuments.net/reader035/viewer/2022062408/568134a0550346895d9b9a7b/html5/thumbnails/15.jpg)
2012 Dairy Prices Lower
• Class III price to average $16.70-$17.40 per cwt– Cheese price down 10 percent: $1.61-$1.68 per
pound– Whey price up 18 percent: $0.615-$0.645 per pound
• Class IV price to average $16.25-$17.05 per cwt– Butter price down 17 percent: $1.57-$1.67 per pound– Nonfat dry milk price down 8 percent : $1.36-$1.42
per pound
• All milk price to average $18.00-$18.70 per cwt
![Page 16: Outlook for the U.S. Dairy Sector in 2012](https://reader035.fdocuments.net/reader035/viewer/2022062408/568134a0550346895d9b9a7b/html5/thumbnails/16.jpg)
Class Prices
Class III Price
13
14
15
16
17
18
19
20
21
Jan-March
Apr-June
July-Sept
Oct-Dec
$ p
er
cw
t
2010 2011 2012*
Class IV Price
13
14
15
16
17
18
19
20
21
Jan-March
Apr-June
July-Sept
Oct-Dec
2010 2011 2012*
*Forecast
![Page 17: Outlook for the U.S. Dairy Sector in 2012](https://reader035.fdocuments.net/reader035/viewer/2022062408/568134a0550346895d9b9a7b/html5/thumbnails/17.jpg)
Quarterly Average Milk Prices
10
14
18
22
2007QI
QIII 2008QI
QIII 2009QI
QIII 2010QI
QIII 2011QI
QIII 2012*QI
QIII*
$ p
er c
wt
All Milk
*Forecast
![Page 18: Outlook for the U.S. Dairy Sector in 2012](https://reader035.fdocuments.net/reader035/viewer/2022062408/568134a0550346895d9b9a7b/html5/thumbnails/18.jpg)
Retail Dairy Price Index
166
176
186
196
206
216
226
Jan-March Apr-June July-Sept Oct-Dec
1994
=10
0
2010 2011 2012*
*Forecast
![Page 19: Outlook for the U.S. Dairy Sector in 2012](https://reader035.fdocuments.net/reader035/viewer/2022062408/568134a0550346895d9b9a7b/html5/thumbnails/19.jpg)
Milk Income Loss Contract Program Payments Expected In 2012
• Milk Income Loss Contract (MILC) payments likely for February production– Lower class I milk price– Expected higher feed costs– Final feed cost data available at the end of March
• Payments also likely to be triggered for March through June production
• MILC program payments are expected to total $180 million in 2012
![Page 20: Outlook for the U.S. Dairy Sector in 2012](https://reader035.fdocuments.net/reader035/viewer/2022062408/568134a0550346895d9b9a7b/html5/thumbnails/20.jpg)
Farm Business Income Projection Lower for 2012
• Average net farm income per dairy farm was record high in 2011 $239,800– Strong rebound from 2009– 2010 income was $158,100
• Income for 2012 is expected to be 26 percent lower than 2011 at $175,000
• If realized, 2012 would be the third highest income year since 2007
![Page 21: Outlook for the U.S. Dairy Sector in 2012](https://reader035.fdocuments.net/reader035/viewer/2022062408/568134a0550346895d9b9a7b/html5/thumbnails/21.jpg)
Additional Information on the 2012 Outlook is Available on the Following Websites:
• World Agricultural Supply and Demand Estimates
– www.usda.gov/oce/commodity/wasde/index.htm
• Livestock, Dairy, and Poultry Situation and Outlook
– www.ers.usda.gov/publications/ldp/
• Dairy: World Markets and Trade
– www.fas.usda.gov/dlp/dairy/dairy.asp