Market News

Record day for cattle and milk

Chicago Mercantile Exchange live cattle futures and the wholesale beef trade made more new all-time highs Tuesday, thanks to good demand for a fairly tight supply of beef, along with expectations for tight market ready cash cattle numbers over the next couple of months.

At the CME, February live cattle were up $1.20 at $141.55, with a high of $141.90, and April was $.92 higher at $140.22, topping out at $140.60.

USDA reports Choice boxed beef Tuesday was up $3.16 at $293.72 and Select was $2.70 higher at $237.15 on moderate demand for light supplies.

February Class III milk futures hit a record $22.40 on the Chicago Mercantile Exchange on Tuesday, we saw 50-cent-or-better increases in the March, April and May contracts.  Global demand, drought in California and repeated bouts of bitter-cold weather in the Midwest and East are combining to push milk prices higher.

Wave-after-wave of bitter cold weather sweeping across the Central and Eastern United States has been pressuring milk production as cows utilize more feed to keep warm rather than produce milk. Milk haulers have also had challenges with the cold and snow. Fluid milk demand has been better-than-normal with the cold weather.

Water is once again becoming a big concern for California dairy producers as Governor Jerry Brown has declared a state of emergency and created a task force to prioritize use should rationing become necessary.

Global demand is strong as the economies of China and other developing countries consume more dairy products. The semi-monthly Global Dairy Trade auction on Tuesday saw overall prices increase 1.4 percent from the previous sale. Cheese and butter prices were up more than 10 percent. The auction has become the discovery mechanism for the global dairy market.

U.S. Dairy Export Council says for the first 11 months of 2013 dairy exports totaled 1.76 million metric tons up 17 percent from the previous year. The United Nations Food and Agriculture Organization (FAO) reports that while overall food prices declined 3.4 percent last year, dairy prices increased 28 percent.

*John Perkins contributed to this story.