In the latest edition of the Parlor to Plate dairy podcast from Ever.Ag Insights, our all-star panel delves into market-moving data. What did USDA’s latest Milk Production report mean for dairy prices? How is global output shaping up, and how could exports be impacted? And are export reports moving the needle for grain markets? Our panelists discuss these and much more.

Join host Katie Burgess and panelists Kevin Peterson, Tiffany LaMendola and Mike North for a spirited discussion.

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

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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.

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Hello and welcome to Parler to play a weekly podcast from African sites dedicated to offering listeners enlightening discussion and actionable dairy market intelligence. I’m your host, Katie Burgess. We’re very excited to have you along. If you like the show, please subscribe and tell a friend or two. To kick things off, let’s timestamp the episode. It’s about 1030 Central Time on Wednesday, October 23rd.

00;00;31;05 – 00;00;55;15

Here’s the rundown of CME spot markets over the past week. Yesterday, Black Cheddar closed at 189 per pound, down a nickel from last week. Barrels finished at 191 per pound, up $0.02. Butters at 268. That’s up $0.06 on the week. And nonfat dry milk closed at 136 per pound, up a penny. Turning to grains. December corn is at 14 per bushel today, up a dime from last week in November.

00;00;55;15 – 00;01;16;21

Soybeans are at 9.94. That’s up $0.14 from a week ago. Now let’s get to the show. It’s a beautiful day here in Madison, Wisconsin, and there’s plenty of news to report. This week. We started out with a milk production report on Monday. We’ve got some international milk production updates over the past week as well. And there’s some new trade data out of China to help us make sense of what it all means for the dairy market.

00;01;16;22 – 00;01;34;26

Today I’m joined by some fabulous panelists. First, we’ve got Tiffany Lemon Dollar Live from California, where she works with a mix of dairy producers and commercial customers. Next up, Kevin Pietersen, a key player on our Chicago dairy trading desk, and Mike North coming to us from Platteville, Wisconsin. How is everyone doing today?

00;01;34;27 – 00;01;35;18

Doing great.

00;01;35;21 – 00;01;36;18

Fantastic.

00;01;36;20 – 00;01;46;06

So, Tiffany, I’d like to start with you to kick things off. Monday afternoon, we got the latest milk production data from USDA. What did it tell us? And what does it mean for the market?

00;01;46;12 – 00;02;16;18

Yeah, it was a highly anticipated report when it landed. It came in at 1.1% gain year over year for the U.S., and we thought that was the first positive showing that we had seen in some time, except that USDA also threw a pretty big surprise and increased their August figure from -0.1 to a whopping plus 2.4. So it was a second month with gains, and certainly came in a little bit above expectations.

00;02;16;18 – 00;02;26;23

Cow numbers were held steady after a gain in August of, I think about 9000 head. We’re still down 38,000 year over year, but we are narrowing the gap.

00;02;26;25 – 00;02;35;19

So, Tiffany, I know you’re out there in California. You work with a lot of dairy producers. What have you been hearing about avian influenza, and how do you think that’s going to show up in the October report?

00;02;35;20 – 00;02;54;29

Yeah. So California was definitely one of the months that people were anticipating in the number. And certainly that was the first one I looked at. You know, we were not sure that the figures were going to be really apparent in September. We got our first cases here late August, and by the end of September we had about 43 positive tests.

00;02;54;29 – 00;03;16;01

So not nothing. But here we are. You know, as of October 22nd worked 133. So certainly anecdotal reports suggest that our bigger hit may be felt in October. You know, we were coming down also from a very robust August showing. We’re starting to pick up steam during the month of August and had pretty nice weather. And then September came.

00;03;16;01 – 00;03;35;21

So we were down about 2% from the August figure. But flat year over year. Again, I would say though still beating expectations. I mean, I myself was expecting at least a small negative, just given the fact that we also got hit by some very extreme heat in September on top of avian influenza. So that was a better showing again October, we’ll have to see.

00;03;35;21 – 00;03;54;02

But of course some markets and have to wait a month to get that information. It does feel like it could be a bigger number, but at the same time, you know, I think other states that had had it earlier in the year, we continue to see them coming back. And so those other states and with nicer weather on board could fill some of that gap.

00;03;54;02 – 00;04;19;27

And not to mention those September milk checks for dairy producers look pretty nice as well. So I think as we’re heading into 2025, it’s going to be balancing margins are looking really good. How numbers are still down, heifers are still in tight supply. And then, you know, how much does avian influenza weigh on the overall national output? Switching gears a little bit, you know, it’s not only us here in the US that struggling with some illness and dairy cows in Europe as well.

00;04;19;28 – 00;04;40;01

They’ve got bluetongue cases impacting dairy health. Those numbers are on the rise. And it’s hitting cows in some of the biggest milk producing countries Germany, France, the Netherlands, Belgium not quite as big, but right in there in terms of where the hotspots are in terms of the disease, as we look at the European milk production data, we only have that through August.

00;04;40;01 – 00;05;01;20

But Germany, the biggest milk producer in Europe, was down 5% in August, which pulled the whole E.U. number down to closer to -1.4%. So a big decline there. On the flip side, though, we got new New Zealand milk production data here over the past week as well. That number was really positive, up 4% in September. That’s following an up 9% in the month of August.

00;05;01;20 – 00;05;22;07

And September volume was the highest it’s been since 2020. So I think as we look at the global milk production picture, we’ve got the EU struggling, we’ve got the US transitioning to growth and we’ve got New Zealand on a pretty hot streak. So Kevin, turning to you, I know that a lot of that New Zealand milk or those New Zealand dairy products, a lot of that heads to China.

00;05;22;07 – 00;05;30;00

And we got new Chinese import data this week. That was pretty dismal. Can you give us the latest on the data out of China and what we’re thinking going forward.

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And I mean as we watch the GDP data, it seems like they have been buying a bit more the past couple months compared to what they bought this summer. But I think to your point of if that domestic demand isn’t there, some of it’s probably just restocking. And I don’t know that I’ve talked to anyone who really sees signs of strength out of China.

00;06;36;28 – 00;06;42;16

It seems like, oh, just like you said when you were buying the least since 2011, the summer, anything up is up.

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And I think that becomes a huge piece of the puzzle as we move into 2025. Yeah. Seeing all the smoke come out of New Zealand, seeing us melt production and proving that China is a big demand player. And so if they remain still on the soft side, that means the US is going to have to compete with New Zealand even more so than it’s been from there.

00;07;14;27 – 00;07;23;26

Mike, I wanted to talk about grains. I mean, China, really important in the dairy space. I know important in the grain space as well. Anything new on the China front that you’re watching on the grain side?

00;07;23;27 – 00;07;45;00

Well, regarding China, we have seen fits and bursts of purchases from them, and the market gets really excited for a moment until it realizes this is the time of the year when transaction must happen. We need to be making a lot of sales this time of year because supplies are readily available. They’re moving down the river system headed towards the Gulf.

00;07;45;00 – 00;08;05;09

And with regard to China, their primary interest is in our soybeans. And so as you look at those sales, kind of like Kevin mentioned before, they’re a little bit relative to the big picture, abysmal. They really don’t stack up to what we would ordinarily see. And that sets the tone for a softer export market slash trade with China going forward.

00;08;05;09 – 00;08;29;19

And then, of course, weigh in on the election and, you know, bring exports back into the equation as it relates to who wins and what’s their trade policy. We don’t know exactly what to expect on the back side. You know, I think you look for something that’s kind of status quo from a Harris presidency. You look for Trump to go back to the table with China to say, hey, you guys didn’t finish phase one, need to finish that.

00;08;29;19 – 00;08;48;01

And oh, by the way, we also agreed on phase two. If we do Fast-Track us into a phase one, phase two agreement that will put a lot more soybean trade back on the table, and that will force beans out of this country at a pace we haven’t seen for years, a little bit now, but that could change politically if inspired by Trump.

00;08;48;01 – 00;09;08;03

But ultimately, as you look at the green side, we’re going through harvest, which continues to impress. There are some bad spots, but overall, USDA, again, in their last adjustment to this point in man, numbers raised yield on corn by 2/10 of a bushel and lowered soybean yield by one tenth of a bushel. Those are both record yields, corn and beans alike.

00;09;08;03 – 00;09;21;19

So balance sheets going to end up with roughly 2 billion bushels of corn, 500 billion plus on beans. Those are big numbers relative to what we’ve gotten accustomed to in recent years, which should keep grain prices softer as we march into the winter.

00;09;21;21 – 00;09;31;22

For sure, it’s a busy time of year. And to your point, we’re less than two weeks away from the election now, so I’m guessing there’s bound to be some volatility in the weeks ahead. You know, depending on which way that goes.

00;09;31;23 – 00;09;37;28

Absolutely. In my mailbox. Will be glad to see the end of the election. That just doesn’t have any room left for any more fliers.

00;09;37;28 – 00;10;00;12

I agree with you there. Living in a swing state. All right, well, that’s it for today’s show. Big thanks to our panelists Tiffany, Kevin and Mike. Appreciate you joining us today. A big thanks to you, the listeners and the insights team for your production support. If you like the show, please hit subscribe. And if you’d like to learn more about how we help customers manage risk, please contact us at insights at Ever AG.

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