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Northwest Iowa Dairy Outlooks

A local discussion of current science and issues concerning dairying in northwest iowa

The WASDE Projected U.S. wheat ending stocks for 2012/13 are lowered 44 million bushels as higher feed and residual disappearance more than offsets a reduction in projected exports.

Production for 2012/13 is raised 1 million bushels based on the latest estimate from the

September 30 Small Grains report. Feed and residual use is projected 95 million bushels higher reflecting the September 1 stocks that indicated higher-than-expected June-August disappearance. Exports are lowered 50 million bushels on the pace of shipments and sales to date and stronger expected competition. Export projections are lowered for Hard Red Winter and Soft Red Winter wheat. The projected range for the 2012/13 season-average farm price is narrowed 15 cents on both ends to $7.65 to $8.55 per bushel. Small revisions to 2011/12 feed and residual disappearance and seed use reflect recent updates to stocks and acreage.

Global wheat supplies for 2012/13 are projected 6.2 million tons lower mostly reflecting lower production for Australia, Russia, and EU-27.

The forecast for 2013 red meat and poultry production is raised slightly as higher pork and poultry production more than offsets lower beef production.

Lower expected cattle placements in the third quarter will manifest itself as slightly lower supplies of fed cattle in early 2013.

Beef imports are reduced for 2012 based on a slower pace of imports from Canada, but are unchanged for 2013. Beef exports are unchanged for 2012 and 2013. Only small changes are made to 2012 livestock and poultry prices, generally reflecting small

adjustments to fourth-quarter prices. Cattle and hog prices for 2013 are unchanged.

The 2012 milk production forecast is reduced from last month, as slower growth in milk per cow more than offsets a slower expected decline in cow numbers. Higher forecast milk prices in late 2012 and into 2013 are expected to slow the rate of decline in cow numbers and help support higher growth in milk per cow in 2013. Thus, the production forecast for 2013 is raised. Importsare forecast higher for both 2012 and 2013. Fat basis exports for 2012 are lowered but skimsolids exports are forecast higher. Exports for 2013 are unchanged from last month.

Product prices are forecast higher for 2012 and 2013 as recent strength in dairy product demand is expected to carry into 2013. Forecasts for butter, cheese, nonfat dry milk, and whey are raised from last month. With higher product prices, both the Class III and Class IV price forecasts are raised. The all milk price is forecast at $18.50 to $18.60 per cwt for 2012 and $19.00 to $19.90 per cwt for 2013.

This month’s 2012/13 U.S. cotton supply and demand estimates include slight revisions, resulting in an increase of 300,000 bales in forecast ending stocks. Production is raised 178,000 bales from last month to 17.3 million, due mainly to increases in the Mississippi Delta states. Domestic mill use is unchanged, but exports are reduced based on lower forecast imports by China. The forecast range for the 2012/13 marketing year average price received by producers of 62 to 74 cents per pound is lowered 4 cents on the upper end of the range, reflecting lower prices in recent months. In addition, the final 2011/12 marketing year average price is pegged at 88.3 cents per pound.

A combination of sharply higher production and reduced consumption raises projected 2012/13 world ending stocks by 2.6 million bales this month. Production is raised mainly in India, China, Brazil, Pakistan, and the United States. Consumption is reduced 2.0 million bales for China as the high domestic support price continues to erode offtake. However, about three-fourths of the China reduction is offset by increased spinning use in other countries with access to lower cost raw material, including India, Turkey, Pakistan, Indonesia, Taiwan, and Vietnam.

World trade is reduced marginally as a reduction of 1.0 million bales in China’s imports is mostly offset by increases for other countries. World stocks are raised to 79.1 million bales, including 37 million bales projected for China.

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