In the latest Parlor to Plate dairy podcast from Ever.Ag Insights, our all-star panel gets in the holiday spirit. Are cheese, butter and powder markets likely to offer buyers and sellers some surprises? Will Santa Claus rally milk prices? And will grain markets be the gift that keeps on giving?

Join host Kathleen Wolfley and panelists Jon Spainhour, Zach Bowers and Britt O’Connell for a spirited discussion.

Questions or comments? Topics you’d like to hear us discuss? Contact us at [email protected].

(Transcript auto-generated)

Future trading involves risk and is not suitable for all investors. Content provided in this segment is meant for educational purposes and is not a solicitation to buy or sell commodities.

00;00;08;28 – 00;00;32;02

Hello and welcome to Parler to play a weekly podcast from Average Insights, dedicated to offering listeners enlightening discussion and actionable intelligence about dairy markets. I’m your host, Kathleen Wolf. We are excited to have you along. And if you like what you hear, please like us. Subscribe and tell a friend or two to timestamp today’s recording. It is Wednesday, December 4th, around 1 p.m. central time.

00;00;32;02 – 00;01;04;16

Here is a quick rundown of today’s markets. See me block cheddar closed at $1.70, up $0.06 from the Wednesday before Thanksgiving. Barrels finished at $1.67, also up $0.06. Spot butter close at 254 per pound. And Nicole, higher in the nonfat dairy milk market, finished at $1.37, two and a half cents lower. And now for the grain market. March corn is trading around for 30 per bushel, January soybeans around 983 per bushel, and the January soybean meal contract is trading around 292 per ton.

00;01;04;16 – 00;01;27;06

It’s a new week, and my star studded panel has their jingle bells on. Everybody is excited to be here. I can tell just by their glowing faces. I know their listeners cannot see their glowing faces, but ever financial service team, they’re ready for the holidays and I’m excited to be here with them from our green team in Platteville, we have Brett O’Connell from our commercial division in Chicago.

00;01;27;06 – 00;01;34;04

We have John’s, Bean, Howard, and last but not least from our producer of division, Zach Bauer’s team. How are we today?

00;01;34;06 – 00;01;35;11

Chilly in Wisconsin.

00;01;35;14 – 00;01;37;23

We’re doing good. Doing well. Kathleen, you.

00;01;37;23 – 00;01;47;26

Guys actually don’t sound like you have your jingle Bells on today, so clearly I was lying and just trying to put words in your mouth or I guess, a positive attitude on your shoulders.

00;01;48;00 – 00;01;49;21

Market was exciting. I guess that’s fun.

00;01;49;21 – 00;02;21;11

I mean, it’s Wednesday. We’re halfway through the week. Week after Thanksgiving is a little tricky. But anyway, I am focused on the holidays. I’ve been putting together the Wolf Family holiday card, and it got me thinking about if you were going to put together a holiday card for the dairy markets, for the grain markets featuring the highlights, the big stuff, the maybe struggles for the year, what would be on the cheese market holiday card, what would be on the corn market holiday card, and how does that change your approach to 2025?

00;02;21;11 – 00;02;29;08

If it does at all, how does it change your approach? So let’s start with you on the feed side or the grain side. What’s the grain market holiday card looking like?

00;02;29;08 – 00;02;49;13

Yeah. So you know it’s got a lot of bright lights on. And if you’re a feed buyer because we watched feed prices slide all year, we watched corn move off of its highs north of $5 all the way back down to sub $4 and gave folks really a great opportunity to buy some cheap feed. We saw soybean meal kind of take a similar path.

00;02;49;13 – 00;03;10;27

We were north of 400 bucks a ton. We’ve now gone, you know, sub $300 a ton, kind of testing, some big long term support in the soybean market that comes in at 280. So for feed buyers, this has been a really good year. We certainly had our hiccups. We had our moments throughout the season. We started off, we were really wet and there was a lot of concerns around what the crop would end up being like.

00;03;10;27 – 00;03;27;24

But as we moved through summer, things dried out, crop conditions improved, and ultimately at harvest, we brought in a really big crop in what looks like to be a record crop on the corn front. Although the USDA will have their final say here in January. And the soybean crop, well, maybe not quite. A record is still going to be a really big crop.

00;03;27;24 – 00;03;38;25

And we’re looking at a big domestic stocks and big world stocks on that front. So I think as we start 2025, you know, there’s going to be a lot of smiles on the face of feed buyers as those markets continue to be under.

00;03;38;25 – 00;03;43;29

Pressure and I guess Brit does that change anything about your approach to risk management going into next year?

00;03;43;29 – 00;04;01;07

You know, I think it’s going to be a market that you can remain patient in, but that doesn’t mean apathetic. I think you still have to be consider yourself an opportunistic buyer. I think we still have to be aware that we will be moving into a growing season, and that will create its own set of risks and circumstances to manage.

00;04;01;07 – 00;04;16;06

But overall, we’re moving into the year with big balance sheets, adequate supplies domestically, out of adequate supplies globally. And so I think that’s going to kind of be somewhat of a wet blanket on this market for a bit and again, provide those opportunities for buyers.

00;04;16;09 – 00;04;20;21

All right. Dairy team, what’s on your holiday card this year for the dairy markets?

00;04;20;24 – 00;04;41;10

I guess if we look back on this past year there are a few things that I would highlight. One is obviously we ran into some milk supply issues throughout the year, and there were times when milk became extremely tight for one reason or another. We saw the cheese market go to 260 in barrels, right? A record high in barrels.

00;04;41;10 – 00;05;04;22

As a result, we had excellent exports along the way. And then here we find ourselves at the end of the year, back down in the 165, you know, the mid one 60s to low one 70s on cheese. It’s has been kind of a roller coaster that we went through. And I would also point out that in the butter market, we saw the butter market put its highs of the year in the summer, just kind of a counter seasonal move in butter.

00;05;04;22 – 00;05;23;18

And here we come into the big demand run of the year. And butter is at its lowest price of the year. So I think it’s really been interesting to watch that. And then finally I would point out that we saw the non fat market here in the US has been and remains the highest price point for nonfat skim in the world.

00;05;23;18 – 00;05;44;09

And as maintain that differential ation now for almost six months. It’s really something we don’t normally see. But here we are up in that 140 area ish, while the rest of the world is trading around 130. So a lot of different things that just we don’t normally see happen this year. And we’ll be interesting to see what comes in the next year.

00;05;44;10 – 00;06;09;19

If you’re going to show three charts on your holiday card, it would be, hey, we had really solid exports this year on cheese year today record highs. Butter stocks are up and we’re seeing a reflection in high stocks and lower prices today. And key watch out for next year is the fact that U.S. prices are still sitting well above the international market on powder, and lead to a lot of questions around, hey, what my exports look like early on in the year.

00;06;09;23 – 00;06;11;26

Zach, what’s on your holiday card this year?

00;06;12;02 – 00;06;27;11

When I look back at the 2024 year, from the dairies perspective, I think the three biggest things obviously were milk production and the way milk production ran so tight along with the heifer numbers. Right. And I think as we look into 2025, that’s still going to be a number that we’re going to have to watch very closely. Right?

00;06;27;11 – 00;06;40;25

I mean, we’re adding a lot of new cheese capacity. And are we going to be able to add the cows to fill that. Right. And where those happy numbers sit at because, you know, financially it doesn’t really make sense to make a bunch of heifers right now. Right. So you got that piece you got obviously the record high cheese prices here.

00;06;40;25 – 00;06;59;15

And then now coming into the end of the year here, I think we’re getting a little bit of a Santa Claus rally that we got to take advantage of into 2024. We’re a discount to the rest of the world. We’re seeing some buying here. But with all that new cheese capacity coming online in 2025, nothing gets me super excited about what my 2025 Christmas card is going to look like when it comes to that cheese price, right?

00;06;59;15 – 00;07;13;19

And then third, I think, again, to mimic China’s exports, right? We’re in such a export heavy market now. We had good exports this year. That was basically our saving grace. What is that going to look like next year, especially with the even heavier reliance on the export market as we produce more product?

00;07;13;23 – 00;07;39;24

I think my holiday card this year might feature demand and especially domestic demand. This whole value discussion is really, really interesting to me. And I think one that could carry into at least early 2025 and that we have retailers, we have foodservice operators that are really trying to chase that consumer dollar of, hey, look at my shiny value or limited time offer or big promotion that I’m propping up to try to get foot traffic in the door.

00;07;39;24 – 00;08;01;11

And to me, that’s just a big curiosity of how long can we continue to throw dollars at the consumer to try to bring them in the door into 2025? I mean, it’s a lot of money that folks are pushing towards it right now with seemingly little success or minimal success to some extent. And you just have to wonder, is the consumer going to look the same in 2025 as they do here in 2024?

00;08;01;11 – 00;08;22;06

Well, with all that, John Zack with all this 2024 business for the most part behind us, I know we still have a little less than 30 days of December left in the books, but how has 2024 informed your either risk management thoughts or just overall market take going into next year?

00;08;22;08 – 00;08;41;05

I think one thing that it reminded me of Kathleen is that a short milk market can make a big difference, and I don’t think we’ve over the last few years, this feels like the first time we’ve seen the market feel short on milk and quite a while. And so we’ve had, you know, most of our markets feel like they’ve been demand driven.

00;08;41;05 – 00;09;08;00

Milk was kind of steadily growing, but we had demand either get really good or really bad. And the market moved accordingly. But you forget just how powerful it is to see milk go from one over to one under and what that means to expectations. So contracts that have been set and people having to say, listen, I can’t necessarily make all the deliveries I said I was going to make because I don’t have the milk that at times had a huge effect on specifically the cheese price.

00;09;08;00 – 00;09;24;00

And then when the milk market kind of settles back down and we start to get back into a growth phase, you see just how quickly the market can readjust back the other way. So again, I haven’t seen a market like that in several years. And you can kind of take your eye off the ball and say, well, what’s 1% really mean or 2%?

00;09;24;00 – 00;09;27;16

And now come to find out, it means a lot in a very contracted marketplace.

00;09;27;23 – 00;09;28;20

How about you act?

00;09;28;20 – 00;09;43;25

Yeah, as I said, I think just to go off of that, you know, the flip side of that was when we were in such a supply driven market and demand was not really there. Right? I mean, as soon as we turned that supply back on, you know, we felt very quick is one thing to remember was supply driven market can do.

00;09;43;25 – 00;09;52;04

But also remember that the American dairy farmer will respond to that. And looking into 2025 without cheap feed is I think that they will definitely be responding to that.

00;09;52;06 – 00;10;13;18

Well, team, really appreciate you joining me on the show today and sharing your insights with our listeners. Thank you, as always to our media team for mixing and mastering. Thank you to you, the listener, for joining us today. If you like what you hear, subscribe on your favorite app. And if you’d like to learn more about how we help people manage risk, contact us at insights at Ever AG.

Disclaimer: TRADING FUTURES AND OPTIONS ON FUTURES INVOLVES SIGNIFICANT RISK OF LOSS AND MAY NOT BE SUITABLE FOR EVERYONE. THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THE INFORMATION AND COMMENTS CONTAINED HEREIN ARE PROVIDED BY EVER.AG AS GENERAL COMMENTARY OF MARKET CONDITIONS. THIS INFORMATION SHOULD NOT BE INTERPRETED AS TRADING ADVICE OR RECOMMENDATION WITHOUT FURTHER DISCUSSION WITH YOUR EVER.AG ADVISOR. THIS IS A MATTER OF SOLICITATION.

The following music was used for this media project:

Music: Funky Intro 29 by TaigaSoundProd

Free download: https://filmmusic.io/song/9520-funky-intro-29

License (CC BY 4.0): https://filmmusic.io/standard-license

Artist website: https://linktr.ee/taigasoundprod

© Ever.Ag 2023, confidential and proprietary.

The post Parlor to Plate – December 4, 2024 appeared first on .