The Ever.Ag Podcast

View the video version of this episode here.

In The Grain Feed, Jim Matthews is joined by a rotating cast of analysts to discuss what dairy and livestock producers can be doing to manage their risk. This week, Jim is joined by Jake Kingsley, Natalie McCarty and Katie Burgess.

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

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 2024, confidential and proprietary.

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 post The Grain Feed – November 21, 2024 (Audio Only) appeared first on .

In the latest Parlor to Plate dairy podcast from Ever.Ag Insights, our all-star panel digs into holiday demand ahead of Thanksgiving. How is the upcoming cooking and baking frenzy impacting butter prices and cream multiples? What moves are Class III and IV futures making? And are feed costs still giving dairy producers something to be thankful for?

Join host Katie Burgess and panelists Brian Fletcher, Ryan Yonkman and Natalie McCarty 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.

00;00;02;27 – 00;00;09;00

Content provided in this segment is meant for educational purposes and is not a solicitation to buy or sell commodities.

00;00;09;02 – 00;00;30;12

Hello and welcome to Parlor to plate a weekly podcast from ever again sites dedicated to offering listeners enlightening discussion and actionable dairy market intelligence. I’m your host, Katie Burgess. We’re excited to have you along today. If you like us, please subscribe and tell a friend or two. To kick things off, let’s timestamp the episode. It is 10 a.m. central time on Wednesday, November 20th.

00;00;30;13 – 00;00;49;11

Here’s a rundown of CME spot markets over the past week. Yesterday, Black Cheddar closed at one 72.25 per pound. That’s up half a cent on the week. Barrels finished at one 72.5, up $0.04 on the week. Now it’s my turn. Milk is hanging out right around 140 per pound. That’s unchanged from a week ago. And butter is at two 58.25.

00;00;49;12 – 00;01;07;14

That’s down a penny and a half from last week. And now at the lowest level dating back to January of this year. Turning to grains. Corn is up for 26 today, unchanged from a week ago, while January soybeans are at 988 per bushel, down $0.22 from a week ago. So let’s get to the show. We’ve got a big week coming up.

00;01;07;14 – 00;01;26;15

Milk production report comes out from USDA this afternoon. So note we are recording on Wednesday morning before those official numbers are released. We’ll get cold storage on Monday. But I think what everyone is waiting for Thanksgiving coming up just a little more than a week away at this point. Tim, welcome to the call. Thanks for joining today from Chicago.

00;01;26;16 – 00;01;31;21

We’ve got Brian Fletcher and Ryan Jackman. So guys, tell me, what are your favorite Thanksgiving foods?

00;01;31;24 – 00;01;40;11

Well, I feel like mine has shifted over the years. My mother in law makes a heck of a stuffing. So I’m going to go with the stuffing this year.

00;01;40;13 – 00;02;06;19

To add on to that, I used to say turkey. Judging by the last few Thanksgivings, though, I think I’m officially off the turkey, especially depending on who’s cooking it. I’ve had a few, myself included, very dry, not so good kind of Christmas story outcomes. So now last year we actually had steak and I’m sticking to that. I know it’s not a traditional Thanksgiving entree, but it was pretty delicious and a lot easier to prepare.

00;02;06;21 – 00;02;13;23

Well, I’d say for our dairy farmers they’re probably okay with that. And then joining us from California, we’ve got Natalie McCarty. Natalie, what’s your Thanksgiving favorite?

00;02;14;00 – 00;02;22;00

I think my favorite is pumpkin pie, but it has to have lots of whipped cream on top of it. So support in the dairy industry.

00;02;22;06 – 00;02;40;27

That’s right. Lots of good dairy. So of course, turkey is the star. Well, except I guess in the Fletcher household. But other than that, dairy is, very important supporting player when it comes to the Thanksgiving menu. That tons of butter on that turkey mashed potatoes and are covered in butter. Exactly to your point, Natalie. Whipped cream for that pumpkin pie.

00;02;40;27 – 00;03;02;24

Or maybe some hot cocoa afterwards in the afternoon. So I wanted to bring a few fun facts. So traditionally from the butter market perspective, some of our biggest butter promotions over the course of the year are going to be happening right now. So the week leading up to Thanksgiving, or probably the week of Thanksgiving, I know just here the last week we saw butter promotions more than double compared to the first week in November.

00;03;02;25 – 00;03;18;16

So hopefully that’s encouraging consumers to go out and pick out a bunch of butter. Another one though, that kind of surprises me. So despite being from Wisconsin, macaroni and cheese is not a Thanksgiving staple around here. But according to the internet, the number two side dish, I know. Do you guys have macaroni and cheese in your families?

00;03;18;17 – 00;03;23;28

We’ve actually introduced a macaroni and cheese casserole that cannot leave the table at this point.

00;03;24;03 – 00;03;29;15

Now that there’s a three year old and a one year old, we have tested that out and it’s definitely a fan favorite.

00;03;29;20 – 00;03;47;04

I think it’s a good call. I mean, we macaroni and cheese regularly, but Thanksgiving seems like a good time to add it in. And of course, though, I mean, being here from Wisconsin, we always have a nice cheeseboard bread or a little turkey made out of cheese. All those types of things too are important. So for consumers out there, I think that dairy super important on Thanksgiving.

00;03;47;04 – 00;04;06;15

And then for us watching markets, you know, watching really carefully how does that consumer demand play out? I think that on one hand we talk a lot about how consumers you have felt stress this year, dealing with inflation. Yet at the same time, Thanksgiving, Christmas coming up, time to celebrate. So it’ll be interesting to see how do consumers got there and what are their purchasing patterns look like.

00;04;06;20 – 00;04;15;14

Moving to the markets a little more though. Butter really important for Thanksgiving. But what are prices have been soft. Ryan, can you give us the update on what’s happening there? Yeah.

00;04;15;15 – 00;04;50;13

From a global perspective we’re seeing a lot of mixed signs. And so if we focus on the US side of things over the last, let’s say, 68 weeks, we have seen butter prices break that $3 price move into the low to 60s and broke to 60 yesterday, I believe. And it’s been really interesting because I would say that break in price, it came at a time where we saw global fat prices actually quite stable and it also came from a domestic perspective earlier than I would say, the general consensus of when this would happen.

00;04;50;14 – 00;05;14;09

But what’s been uncovered since that is that on the bear side of the equation, almost of the year, our butter inventory situation has been very, very healthy. So that continues to be the case. And what’s been really interesting is since the butter price has made this move and held this move, the domestic cream market has really weakened from a counter seasonal perspective.

00;05;14;09 – 00;05;42;23

So overall, the sense we’re getting is that if you if you need bulk salted butter, then you can find it. You can find it in the Midwest market and the western market. There by no means is any shortage. And right now what’s really interesting is the free market is very well-supplied as well. So this week in particular, we are hearing there was a quite a bit of cream exiting the state of Idaho and making its way all the way into California comes in multiples.

00;05;42;23 – 00;06;08;14

We were hearing sub 105 multiples delivered in the California, which looking at that, if you have excess churn capacity, there is basically a physical arbitrage where you can buy cream, turn it into butter, use the forward curve and view, line it up correctly. There’s a potential profit by doing that carry. So to me that should signal that cream should be getting bought very easily.

00;06;08;14 – 00;06;35;17

The fact that it’s still available makes me feel like the general market, even with that taking place, that there just isn’t an appetite to move bulk butter right now. You know, from a domestic perspective, it’s really kind of been an interesting trade. And globally, I think the wild card at this point is as we’ve made this move lower our prices relative not only to New Zealand but mainly to Europe, we have widened that gap in terms of our discount to the global market.

00;06;35;17 – 00;07;00;09

So now the prospect of exports is on the table. That’s the big debate right now saying does our lower forward curve allow us to get some material bulk exports. There’s always more resistance within that than you would think. Mainly because a lot of manufacturers have to switch up their production schedules. If they switch up their type of product, they have to make unsalted and salted, they have to make 82% fat, sort of 80.

00;07;00;09 – 00;07;26;11

So it’s not as easy saying we’re guaranteed to get a bunch of exports, but we’re definitely having that conversation this year. Whereas last year that wasn’t even in the realm of possibility. So overall, what’s going on pretty I would say bearish near-term added perspective, you know, supportive as we get in later into 2025. But right now the tone’s been hard to find a shining star in that at least the domestic market right now.

00;07;26;11 – 00;07;28;12

But maybe Thanksgiving, we’ll turn it around.

00;07;28;13 – 00;07;57;11

Who knows? I know I think that’s the tough part about the butter space right now, is that there’s so much focus on getting butter moved and into consumers hands here over the next four weeks. But then once the ball drops on New Year’s Eve, that butter demand really slows down quite a bit. And so I think that the manufacturers out there exactly to your point about cream, are just trying to be very strategic on what do we need to do in the next 4 to 6 weeks, but then also thinking and making plans for 2025, where there is still a lot of uncertainty out there.

00;07;57;14 – 00;08;01;26

Speaking of butter, any things we should be watching for in the Cold Storage report on Monday afternoon?

00;08;01;26 – 00;08;24;23

Yeah, I think two things. It’s been interesting to see the weakness in not only the Korean market, but also the butter market with California over the last two months being the highlight of the milk production conversation. So today, I think the first to look for is, you know, that California milk production number. It is widely debated in terms of how negative it may be.

00;08;24;23 – 00;08;47;17

And then you said next Monday or Tuesday we have cold storage. And yeah, I guess within that, I would say that probably been the leading force of the bearishness surrounding butter. So if we see any change in the overall inventory draw down next week, I think maybe that changes the tone. It’ll be interesting. I know we’ll be glued and refreshing our screen until we get both numbers out for sure.

00;08;47;18 – 00;08;57;28

I think that’s a good lead in to I mean, Ryan, you’re spending all day, every day working with dairy producers. What are the things you’re watching for in the Milk Production Report and what have you? Just generally been hearing out there from folks?

00;08;57;28 – 00;09;22;26

Yeah, I think I don’t love the set up because I think right now we’re in the space of everybody is hoping for some good news to hit today on the milk report and hoping for some good news to hit and cold storage bought in regards to. We’ve had a decent little break, as I’m sure everyone has watched happen primarily December and in the first quarter, but we’ve seen the deferred get hit a bit too, and I’d say for dairies that are looking to, you know, clean up, hedging the first half, let’s just be real.

00;09;22;27 – 00;09;38;20

We know there’s a camp of dairies that took on a lot more risk. So I think there’s some hope for one more push, a Thanksgiving push, and maybe these reports with the California News, maybe remind the market of, hey, us milk is still pretty tight. And, you know, maybe stocks draw down. And in that is hope of a rally.

00;09;38;20 – 00;09;58;19

Now I think dairies ultimately are prepared to manage more risk into as the outlook for next year I still think looks to be one surrounded with more risk in regards to a lot of what we’ve talked throughout this year with the new processing plant and yes, a little more milk. So we’re kind of in this weird spot of a lot of risk managed in kind of hoping for one more little pop brewski to get a little more done.

00;09;58;22 – 00;10;19;09

You outlined it well as we’re heading into 2025, as I work with dairy producers, if milk production really starts coming at us and demand isn’t that great, you could see a pretty soft scenario for early next year, given some of the new cheese processing capacity. Yeah, when we look at the international space, like Brian kind of referenced that, hey, if we can get some product exported, whether it’s cheese or butter, that provides a more bullish scenario.

00;10;19;09 – 00;10;40;28

So I mean, I think for customers right now on both sides, whether you’re a buyer or seller, you need to be looking at that 2025 risk management plan pretty in-depth just to figure out, making sure you’re protected. But, you know, ideally leaving yourself some flexibility by using options are insurance to take advantage of market moves. Because, you know, if we’ve learned anything from 2024, prices probably went lower than we expected this spring.

00;10;40;28 – 00;10;58;00

On the cheese front, higher than we expected this fall. On average, our forecast was pretty close, but on any given month there tends to be a lot of volatility. So I think that’s an important lesson going into 2025. However, I would say for our dairy producers on the feed side, Natalie, things are looking good. It’s a little easier to make decisions over there.

00;10;58;01 – 00;11;04;24

I know you’ve been talking to producers out in California on the road in Idaho last week. What are you hearing from folks that you talked to?

00;11;05;00 – 00;11;29;23

Yeah, I mean, I think as people count their blessings this year, I think they’re definitely counting their blessings and feed right now on the futures front, only versus last year, corn is down 10.7%. Wheat’s down three you know and change. And then the leader in the down board right now is soy meal at down 38%. So I think it’s got smiles on a lot of people’s face.

00;11;29;23 – 00;11;33;20

And I think a lot of people are looking to take advantage of these down markets.

00;11;33;20 – 00;11;55;09

So yeah, Natalie, those are pretty notable declines. And bringing feed prices back to producers to the lowest we’ve seen in some time. I know that this is always a dangerous one. When we look at margins on paper, a feed costs and milk prices, it’s shaping up pretty good for 2025. You know, there’s always things out there like interest rates, labor costs, all these other inflationary parts too that play a role.

00;11;55;09 – 00;11;58;16

But what’s the mood out there as producers look into next year.

00;11;58;17 – 00;12;17;19

Coming for mine? I was looking at this before the call. You know, at this point in time, harvest is over. A lot of, I’d say, clock type contracts are getting in place for next year. Budgets are in place, if you will. I think with every week forward as dairymen, we’re getting a lot more dialed in on basically what next year’s cost of production is going to be.

00;12;17;19 – 00;12;30;29

Don’t get me wrong, you can take feed risk and that can change. But down at the levels narrowly was talking about it. I think we’re seeing dairies. Yeah with some confidence being able to get feed bought. When you do that and you add in your operational cost, you get a pretty good idea what it’s going to cost to make milk next year.

00;12;30;29 – 00;12;45;23

Right. And so talking to some dairies, you know, looking at our own dairies, I think you’re starting to see a lot of costs for production. You know, still a out like kind of a high number. But in that 18 territory I know we’ve got some higher. I know we’ve got some lower I feel like eighteens maybe that midpoint.

00;12;45;23 – 00;13;00;22

You know, it’s by the time you take out some non milk revenue. Hey is 17 to $18 milk a breakeven spot for next year. I think it’s probably fair for a lot of the country. Again there’s some better and worse. So when you take that and map it across the curve is there opportunity in 2025 to make a buck?

00;13;00;22 – 00;13;13;15

I think the answer is for most dairies. Yes. So I’d say the margin outlook isn’t one that gets people giddy, but it’s at least one where it’s like, hey, it’s there, right? We’ve all lived through curves where it’s not, so it’s viewed as opportunity and guys trying to be careful.

00;13;13;15 – 00;13;35;12

Certainly, I think to piggyback off of what Ryan said, I mean, you look at the nearby prices and they’re very cheap. But as you go out in the futures curve, you know, there really isn’t much of a carry at all. So you can, you know, for example, on the protein side, with it being down 38% right now, you can lock in some pretty attractive levels even for next year.

00;13;35;12 – 00;13;42;05

So I know it seems a little far out, but we’re looking at some options, strategies and things like that. On the risk management side as well.

00;13;42;05 – 00;14;02;13

Sounds like we have a lot of things to be thankful for as we’re looking into 2025. That’s a wrap for today’s show. Big thanks to our panelists Brian Ryan and Natalie. Appreciate you all joining me today. And for the conversation and a big thank you to our listeners. We know that many of you are producers, processors, retailers who are working hard each and every day to provide wholesome food for the world.

00;14;02;14 – 00;14;24;02

We really appreciate everything you do for the industry, and we’re honored that you choose to help support you in those endeavors. I’d like to wish everyone a very wonderful Thanksgiving. And then, as always, big thank you to our team here at Every as well. Appreciate the production support. And finally, if you’d like to learn more about every week and how we help customers manage risk, please 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 – November 20, 2024 appeared first on .

Cody Koster and Jon Spainhour take a deep dive into this week’s GDT report.

Questions or comments? Contact Jon at [email protected], Cody at [email protected], or give us a call at (312) 492-4200.

(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;14 – 00;00;17;26

Hello everybody. Welcome back to another Get Tuesday. I’m your host, Cody Koster, with me from Chicagoland. Mr. John Spain, our John, how are you on this beautiful Tuesday?

00;00;17;27 – 00;00;20;15

Doing great Cody and excited to be here.

00;00;20;18 – 00;00;38;20

Oh, we’re excited to have you here. Do a little synopsis on the global dairy trade this morning, up 2.3% as a whole. That is going to be the second auction in a row that we have been higher now. So lower on October 15th past two auctions higher. And this one, like I said, 2.3% higher. We were talking beforehand.

00;00;38;20 – 00;00;44;10

There were some, I guess highs and lows that you want to kind of dive into on what we would call the class war side.

00;00;44;10 – 00;01;06;13

Yeah, there sure are. There are some highlights in here. Let’s start out in the butter side here. Butter will say was up 0.3%. That comes in at roughly about 318 a pound on an 82% comparison. Again, we trade 80% here in the US. But we’ll say right around 318 the amount side of things got a little bit of a bump, 2.8%.

00;01;06;13 – 00;01;30;20

And so I guess I look at both of those and say that was kind of a nothing of an auction, right up 0.3% and up 0.8. I think when we look at those, however, in comparison, it really highlights some regional differences. We would say that Europe right now is still up in that 360 arena or area. And then here in the US our butter side is at two 5825.

00;01;30;20 – 00;01;59;27

So almost a dollar difference between the US and Europe. And New Zealand falls right there in the middle around that 318 area. I guess when I look at this and just say, did this live up to expectations? I think people are looking for a little bit more out of the New Zealand butter fat price in terms of that is probably one regional area that can compete with Europe more readily than the US, simply due to the types of butter fat that they make and some of the regions that they go into.

00;01;59;27 – 00;02;20;23

So probably expected to see a little bit more movement on the fat market today, specifically as we compare it to those European markets. When we get over to the powder side of things, this is where there’s a little bit more interesting. Let’s start with the one that probably lived up to expectations. Whole milk powder up 3%. Just another good auction for whole milk powder.

00;02;20;23 – 00;02;43;07

And just looking at it here, this is our second higher auction in a row. And probably out of the last six auctions, we’ve been up five of those auctions. So whole milk powder really having mounted a pretty big comeback here since earlier this summer when we were down in the doldrums at $3,100 a ton. Now we’re up at $3,800 a ton, again, up 3%.

00;02;43;07 – 00;03;05;16

When we compare that to the GDC pulse, I would say this came in right about where we thought it was going to or where the pulse was trading. And then when we look over at the whole milk powder futures, we’re trading around 3900 to 3915. So to see whole milk powder coming at 3826, maybe a little bit of a letdown compared to the futures, but hard to shake a stick at that one.

00;03;05;16 – 00;03;26;08

Skim milk powder, on the other hand, is the one that really kind of stands out to me. We settled at 1.1% higher at 131, the GDC pulse, I think it was expecting a little bit more juice on the pulse. We saw things trading at up 3%, up to about 132 ish or 130 two half. We didn’t quite get there.

00;03;26;08 – 00;03;45;05

So a little bit of a letdown there where I think it was mostly a letdown, though, was to the skim milk powder futures. I think they were kind of looking for about a 7% increase here. So we got a 1%. I’m forced to look at that and say, someone’s going to be let down by that, just simply because there was so much built into that.

00;03;45;05 – 00;04;06;21

However, it’s always hard to turn your nose up at skim milk powder when whole milk powder has had such a strong auction. Whole milk powder being the big dog of the auction. And as it drags higher right now, that just creates a bid in the skim milk powder. And then finally, let’s wrap it up here with the cheese side cheddar down 2.8% at 219.

00;04;06;21 – 00;04;27;10

Comparing that to Europe, that’s right around the same price that Europe is up us right now though, down in the low one 70s. And then mozzarella here at $1.96 that was down 6.3%. And both the cheddar and mozzarella we do not have a futures nor do we have a pulse. So it’s a little hard to know what those expectations are.

00;04;27;10 – 00;04;46;24

But I would say the European cheese prices kind of coincide pretty well with these prices. Maybe a little bit higher. The US price, on the other hand, trading the lowest in the world. So we are the lowest in the world here in the US on the cheese side of things. And we are the lowest in the world on the butter side of things by far, by a wide margin.

00;04;46;24 – 00;05;05;05

It’s skim milk powder. We are at $1.40. We would say New Zealand is at $1.31 after this auction. And finally we would say that the EU market is around $1.25 on the skim milk powder side. So again, lowest in the world on butter, lowest in the world on cheese, highest in the world on skim milk.

00;05;05;05 – 00;05;28;01

Our awesome. Well, John, if we can kind of shift gears here to the regions, buying on this global dairy trade you had mentioned before, we jumped on China back in the buying seat. They’re up 13% from the previous event and 39% higher year over year for the buying for this auction. So I guess we’re talking about a little bit of a bright spots that might be The Shining star of the event.

00;05;28;04 – 00;05;45;05

Why? I tell you what, it’s really becoming a point of contention with people out there in the market. When you look at this GDP auction, as you mentioned there, Cody, once again, China was active. We compare it over the last auction, up 13% comparing it to last year. We’re up 39 at least looking at it at face value.

00;05;45;05 – 00;06;07;23

That is saying that, hey look, China’s been busy and continues to be busy. When we talk to people that work in the export world that might go into China, they would say, I’m really not seeing it. And then when we see the actual data that comes in, it doesn’t really support the idea that China’s buying more. Now we have to be very careful with that because some of that data is delayed and we’re looking at imports.

00;06;07;23 – 00;06;25;13

And not only is the data delayed, but it could be backed up from the standpoint that at the time that those imports were ordered. Right. It would be a long time ago, and we just still haven’t seen the activity on the GDP hit the trade balance sheet yet. I have to say again, at face value, China’s been very active here.

00;06;25;13 – 00;06;47;09

When we dig into the details, it still seems like they’re a little off. But then let’s go to the other regions. I would say that here in the last few months, the Middle East and Southeast Asia have been pretty busy, right? So not only has China been busy, but these other regions have been busy as well. On this auction, the Middle East down 29% event over event and down 46% year over year.

00;06;47;10 – 00;07;12;22

They really backed off. And then probably, you know, our second biggest buyer on here would be Southeast Asia oh 2% event over event and down 6% year over year. So you know that ancillary player that comes in and probably sometimes plays a supporting role. The prices they were here, but they weren’t over the top like they have been in the past and looks like whole milk powder, which is very China centric though, started to take off right.

00;07;12;22 – 00;07;30;04

Products that other regions might buy, some of the fat products, some of the cheese products and the skim milk powder didn’t quite have the response that whole milk powder had. So again, very interesting to see them. I should say. Just trying to weed through. What effect is this actually having on international trade?

00;07;30;06 – 00;07;43;19

I guess to answer that question, we’re probably gonna have to wait another two weeks until our next get. But until then, John, was there anything else on this little dairy trade that you want to kind of hit on, or is that pretty much the nuts in the bolts of the trade this morning?

00;07;43;20 – 00;08;02;13

Boy, I’ll tell you what, this is one of those deals. When you look at these regional values and you try to bring in relative value to things, you start to scratch your head again. U.S. cheese down in the low one 70s while you’re up in New Zealand or up in the two 20s somewhere in there that is going to trigger some exports if it has not already.

00;08;02;13 – 00;08;20;08

On the butter side, it is hard to imagine that we’re going to skate by and not see some export traffic just due to these regional prices. So I expect to see cheese and butter find at least some support, right? I don’t know that it’s going to drive us higher, especially in the US cheese market where we’re seeing a lot of capacity come online.

00;08;20;08 – 00;08;38;00

But it should very much be supportive. The one that does stick out is skim milk powder. Again, we’re at $1.40. The rest of the world, $1.31 or lower. And I don’t mean to harp on this, but a it’s very rare that we maintain that spread. But where it really stands out to me is, yes, I recognize that we have bird flu in California.

00;08;38;00 – 00;09;00;28

It is having a very negative effect on milk production, and that is having a negative effect on nonfat production. I recognize that, however, something that does scare me is as we look into some of the trade data, you know, for nonfat, it shows that our domestic nonfat usage has been consistently down about 42% this year. On a year over year basis.

00;09;00;28 – 00;09;21;09

We have just seen our domestic nonfat consumption get really decimated here. And there may be a lot of different reasons for that, but what it does to me is it highlights the importance of the international market. So right now with bird flu in the mix does feel like, yeah, there’s less nonfat being produced, there’s been less nonfat being produced all year.

00;09;21;09 – 00;09;39;16

And that has really allowed for this premium to take place. But when and if we see milk production come back in California and we see that nonfat production start to ramp up again, it feels like if our domestic demand stays the same, we’re going to have to go to that export market bid and that right now maybe as low as $1.30.

00;09;39;16 – 00;09;48;04

So just want to keep that in mind. Not saying that’s going to happen overnight, but it sure is interesting when we look in and see those domestic demand numbers as low as they are.

00;09;48;06 – 00;10;11;07

And hit that a little bit more, we’re actually going to get our milk production report for the month of October on Wednesday the 20th. So we’ll have a little bit more insight on that side also John, appreciate you. Again. Tune in. And you know, going through the GDC with everyone, giving your insight and really hitting the numbers hard, we are going to be back together in two weeks, the beginning of this or the next global dairy trade together.

00;10;11;07 – 00;10;22;13

But until then, we appreciate everyone tuning in. We hope you get a lot of information out of this. If you have any questions for us, please hit above. We’d love to try to go through and answer it, but until then, everyone have a great week. Even better weekends. We’ll see you next time.

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.

This episode is also available on the following
platforms:

-Apple Podcasts-

-YouTube Music-

—–Spotify—–

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 post GDT Review with Jon Spainhour – November 19, 2024 appeared first on .

View the video version of this episode here.

In this episode of The Grain Feed, guest host Jake Kingsley is joined by Kristin Stien, Verl Prather and Kathleen Wolfley to discuss what dairy and livestock producers can be doing to manage their risk.

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

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 2024, confidential and proprietary.

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 post The Grain Feed – November 14, 2024 (Audio Only) appeared first on .

In the latest Parlor to Plate dairy podcast from Ever.AgInsights, our all-star panel dive into current dairy and grain market trends. How are falling cheese prices affecting the market? What strategies are being used to manage risk in 2025? How might upcoming U.S. policy changes influence exports?

Join host Kathleen Wolfley and panelists Jake Kingsley, Kevin Peterson and Matt Tranel for a spirited discussion.

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

(Transcript auto-generated)

00;00;00;09 – 00;00;08;22

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;25 – 00;00;31;28

Hello, welcome to Parler to play a weekly podcast from ever again sites dedicated to offering listeners enlightening discussion and actionable intelligence about dairy markets. I’m your host, Kathleen Wooly. We are excited to have you along. If you like what you hear, please like us! Subscribe and tell a friend or two to timestamp today’s episode. It’s Wednesday, November 13th around 11:30 a.m. Central time.

00;00;31;29 – 00;00;53;08

Here’s a quick rundown of the markets. CME Block cheddar today closed at $1.69, down $0.06 from the prior Wednesday. Barrels close at $1.68. Down $0.13. Spot butter finished at 263 a nickel lower, and the nonfat dairy milk market closed at $1.39, basically unchanged on the week. And now for the gray market. D.C. corn is trading around 426 per bushel.

00;00;53;09 – 00;01;13;27

January soybeans at 1005 per bushel. And the soybean meal market is trading around 290 per ton. It’s a new week, and another star studded panel from the financial services team. On the feed side, we have the one and only Jake Kingsley from our commercial division. We have Kevin Peterson and from our producer group in Platteville, Matt Trino. Team how are we today?

00;01;14;00 – 00;01;15;12

Pretty good. Doing well.

00;01;15;14 – 00;01;20;17

Jake, you’re a Kansas City fan. Kansas City and the bills are playing this week. I’ll be honest, I’m a little nervous about the game.

00;01;20;18 – 00;01;23;22

I’m way more nervous than you. I don’t know if you watched last week.

00;01;23;22 – 00;01;42;17

Well, I mean, we’re missing some of our stud receivers here with the bills. And playing Kansas City always makes me nervous. We won’t go into the history, but good luck. But I hope we beat you. In any case, guys, let’s get into the meat of today’s discussion, which is not about football team. We’ve had a pretty big tone shift in the market over the past few weeks.

00;01;42;24 – 00;01;50;21

I’m curious, what’s your take on what’s been transpiring in the markets, and how are you helping folks manage risk in this environment?

00;01;50;27 – 00;02;15;13

Yeah, it’s been an interesting shift in 2025. We’ve had a almost a dollar decline in the barrels, at least in the last four weeks. I would say about $0.70 on the total cheese price. You’re starting to see that hit 2025 with some offers back there in the futures. You also have more capacity coming online and folks more so sitting on their hands back there waiting for the futures, especially on cheese, to try to come and meet where their budgets are.

00;02;15;13 – 00;02;37;27

And the caveat to that might be hearing of some talks of potential front loading of cheese and maybe even butter exports out of the country before the presidential shift. In the end of January, and potential tariffs off of that could be some front loaded buying for next year’s needs abroad. But so far, you know, prices continue to trend lower here on spot.

00;02;37;27 – 00;03;04;19

We’re at probably a bottom here spot wise. And milk’s beginning to turn around a little bit. And so I think that’s bringing more people to be a little more bearish in 2025. However, you still need to be hedged back there. We’re obviously shifting more towards options for that, what we’d call inflated 2025 curve from historicals. Also last year we had a seasonally uncommon run up in April where we went to 190 on average, where is typically our flush.

00;03;04;19 – 00;03;07;25

And so there’s definitely still some risk in 2025, I think.

00;03;07;25 – 00;03;21;08

Matt, I guess on the dairy side, what are you thinking? I mean, producers had a pretty good look at 2025. Are you advising folks still take a pretty aggressive move here, given the fact that we have washed out quite a bit on class three? Well, I.

00;03;21;08 – 00;03;39;20

Think we still have to think in the large scale terms where we’re at as a market. Yes, we have washed away probably about a dollar dollars 25 from our peak in Q1, about $0.70 in Q2 as well over the course of the last 3 or 4 weeks. But at the same time, we’re not that far away from $19 milk in Q1 and Q2.

00;03;39;20 – 00;04;09;16

And when you look at Q1 and Q2 being around $19, that’s a very strong price compared to history. And so I’m still looking at those two particular quarters. I would say that there’s probably a little bit of a change in regards to maybe how we’re hedging. It’s back when we were north of $20, I would probably say that we were a little bit more aggressive in our use of the tools that are available to us, maybe more futures, more min max type strategies.

00;04;09;16 – 00;04;29;20

As we’ve fallen, we’ve probably went to a little more of a downside coverage upside being open type strategy, whether that’s puts whether that’s some type of insurance. So that if some of the supply hiccups that were reported during 2024, if those flare back up and the buyers get tight, we can still take advantage of some of those prices.

00;04;29;20 – 00;04;51;07

So it really hasn’t changed, I guess, in my seat, as far as still going after some hedging. That’s just kind of how we’re looking at doing it. And I’m sure leading into Jake’s feed is still cheap, and so there should still be a margin across Q1, Q2 in quarters that we generally don’t make a ton of money and usually drag on farm profitability each and every single year.

00;04;51;13 – 00;05;10;20

Yeah, I would say just adding in on your margin discussion that looking just purely at the margins on paper, using DMC 2024 should turn out to be one of the best years in a decade. 2025, at least based on last week’s pricing, was still pretty solid against some of the highest prices that we’ve seen since 2014 on a margin basis.

00;05;10;20 – 00;05;20;21

And again, that’s all based on what we’re seeing on paper using current futures markets. But the margins are still there even though we have seen prices come down to some extent. I mean, Jake, what are you seeing on the feed side.

00;05;20;24 – 00;06;04;16

Yeah, I think you for probably listened or read or watched someone comment on the Trump trade and any kind of market commentary you’ve consumed over the last couple of weeks, and I believe we are watching that play out right now. We continue to see some pretty healthy export sales to Mexico and unknown destinations, which usually means China. In what feels like an attempt to front load their inventories and really load up on feed grains ahead of what they expect to be an escalation of tariff dispute and potential trade realignment over the next handful of months and year or two.

00;06;04;16 – 00;06;29;00

If history tells us anything, their expectation of such a thing is probably correct, given the last Trump term and the way that they are now lining up and announcing some of the administration appointments ahead of inauguration there in January. So we continue to see a lot of purchasing. You can probably allocate some of that to some bargain buying down here at $300 soybean meal and $4 corn futures.

00;06;29;00 – 00;06;52;24

Sure, there’s of course, the hedge against South American weather, which they’ve got a long growing season ahead of them. And there’s still some uncertainty there. Those three pieces are driving some purchasing right now. And at the end of the day, even with these big sales, we’re not seeing a tremendous run up in price, which is allowing for some good risk management opportunity here and now in the current feed year through next September.

00;06;52;24 – 00;07;17;15

If you haven’t done a lot of buying there yet, and we’re even seeing some pretty cost effective opportunities to manage risk utilizing options out for the 2526 feed year. Just again, with having some futures levels down here towards the bottom end of the range, particularly soybean meal and protein products that these folks end up buying. But there’s certainly opportunity to manage risk for quite a while right here in the feed market.

00;07;17;17 – 00;07;37;08

Matt and Jake, you both are working with dairy producers. Do you think that there is a recognition from folks that the market dynamics have changed to some extent, and that there are still these really solid margins on the table, or do you think that folks are still looking in the rearview mirror and say, hey, my September milk check was really solid and feed costs were coming down.

00;07;37;08 – 00;07;46;00

My October milk check was pretty solid. My November milkshake should still be pretty solid. Do you think that there’s a recognition that there is risk that lies ahead in 2025?

00;07;46;01 – 00;08;08;19

I think on the feed side of things, yes, the opportunity has been recognized and most are taking advantage of it, especially here in the shorter term window, the place where there used to buying feed here in the six and 12 month period out to next September because they can buy physical feed, it doesn’t cost them much out of pocket until it’s time to pay the feed bill, and they don’t have to do anything super complex to manage that risk.

00;08;08;19 – 00;08;29;12

You can just buy the flat price feed. What we would say are pretty attractive levels. And if you want to get more exotic with it, you can step in and start to own some puts to re expose yourself to downside opportunity. There are few folks stepping in, not near as many, but with the 2526 feed year, it’s hard to buy a physical feed for that time frame.

00;08;29;12 – 00;08;46;19

Just vendors aren’t super excited about selling that far in advance without knowing what their book looks like. And so there you have to step into some more intricate option strategies to maintain the cost effective approach there. And so not as many players stepping into that, but there is opportunity if you do want to try.

00;08;46;20 – 00;09;02;00

I think on the dairy producer side for milk, I think there’s definitely some hindsight 2020. I should have just protected or sold all of my way back in September October when prices were high. But as is often the case, no matter what the market you’re trading, you’re usually the most optimistic at the peak, in the most bearish at the bottom.

00;09;02;00 – 00;09;21;01

I do think we’re seeing producers begin to come to the table and say, okay, I was bullish. I’m still maybe leaning on some of the fundamentals of low heifer numbers, lower milk production, so on and so forth. But at the same time, I’m not going to give away the opportunity that’s in front of me. So let’s put on some insurance.

00;09;21;08 – 00;09;30;26

Let’s make sure I lock in some type of margin. Hopefully I’m wrong. Hopefully I pay a premium and prices go back to where my initial thoughts of where prices would go happen. But at least we have a secondary plan in place.

00;09;30;26 – 00;09;51;25

I think from a dairy perspective in general, I’m sitting in this position where there’s just a lot of uncertainty as we go into next year. There’s tremendous amount of uncertainty as we go over the next six weeks. We certainly have new plant capacity that’s coming online and the cheese market plants are actually taking milk or soon will be taking milk here in the latter 2024 and early into 2025.

00;09;51;25 – 00;10;17;02

And I’m just thinking about the volume of cheese that could be coming at us by mid year next year. It certainly seems like so long as the milk is there and oh, by the way, we’ve seen milk production in the positive in August and September, and it seems like the cows are lined up to at least help with the initial ramp up of some of those new cheese plants that we could find ourselves with a whole heck of a lot of product in our hands by mid 2025.

00;10;17;03 – 00;10;40;00

The big uncertainty to me is the demand side. It’s certainly we’ve shoved demand dynamics in the limelight over the course of the last several weeks, and that we figured out the supply side in. Holy smokes. Hey, without a major increase in demand here in the domestic market, without significant export opportunities, we could find ourselves with a lot of cheese looking for an outlet into next year.

00;10;40;00 – 00;11;01;24

So to some extent, we are modestly competitive into the international marketplace. On cheese, we usually think we need probably somewhere around 25 to $0.30 of discount versus the European market in order for those exports to pencil. So to some extent, I wonder if the recent moves in spot cheese and futures is a reaction of hey, we need to go be competitive in the international market.

00;11;01;24 – 00;11;19;20

European prices have been coming down in the last couple of weeks. We need to maintain that competitiveness to get products moving into the international marketplace. So there’s just a lot of balls in the air, a lot of uncertainty, particularly around timing. Oh, and at a Trump presidency, 2.0 on top of that, I don’t think 2025 is going to be boring at all.

00;11;19;22 – 00;11;39;07

A huge thank you to the team for joining me on today’s episode and sharing your insights with our listeners. Thank you. As always to our media team for mixing and mastering. Thank you to you, the listeners, for joining us today. If you like what you hear, subscribe on your favorite app. And of course, 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 – November 13, 2024 appeared first on .

In this episode of Hog Talk, host Phil Plourd and guest Tom Brincks discuss the rise of livestock insurance products and their role in managing market volatility. Tom shares insights on the evolution of risk management in farming, from his personal journey to the rapid adoption of tools like Livestock Risk Protection.

Tune in to learn how these innovations are helping farmers secure long-term profitability in an unpredictable market!

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

(Transcript auto-generated)

00;00;00;09 – 00;00;09;00

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;09;02 – 00;00;29;01

Hello and welcome to HARDtalk. Brought to you by Ever AG Insights. On this podcast, we talk with subject matter experts on news and topics affecting the swine industry and hog markets. I’m your host, Phil Plourde. Just start with a quick market recap. As of yesterday, Monday, November 11th, nearby lean hog futures were at 8178 per 108. That was down 2% from the week prior.

00;00;29;03 – 00;00;47;17

This week we’re excited to have Tom brings with us. Tom is the vice president of insurance and operations over here ever AG. It helps lead our livestock risk management business. It’s going to be a little inside baseball today. Tom, but I think that our listeners will enjoy a view of the evolution of the risk marketplace for livestock and where we’re going.

00;00;47;17 – 00;00;49;16

And we can talk a little hogs, if that’s all right with you.

00;00;49;17 – 00;00;50;23

Sounds good. I’m glad to be here.

00;00;50;23 – 00;00;53;29

So you’re the head of our livestock risk management business. How did you get here?

00;00;54;01 – 00;01;13;16

Long story. I’ll try to keep it short. So I became an everyday acquisition pig about three years ago. The founder of that group, Joe Kerns, was an old college friend of mine. Joe and I were complete opposites, but our paths crossed several times in college, and we’ve always stayed in touch jokingly throughout the years. He always kept saying I should come to work for.

00;01;13;17 – 00;01;30;22

And about three years ago, when the livestock related insurance products started to take off, he called me like, I have a nickname, they call me Cub. He’s like, Cub, I need you. This thing’s going to be big. Yeah, we need to make sure we do it right. And I was at a point in my life where I was ready for a transition, and lo and behold, I came to work for him.

00;01;30;22 – 00;01;32;26

And I’ve enjoyed every day since Tom.

00;01;32;29 – 00;01;40;17

I think you have a background in insurance generally. Can you talk about your experience there and the role of insurance products in the evolution of risk management?

00;01;40;23 – 00;01;57;26

Give me a little background. If you talk to most people who have been an insurance, they always say, everybody has a new church story. And my story was years ago. I was confronted by a group of farmers that asked if I wanted to join a board for the small insurance company in western Iowa. Yeah, I’m joking. Like, no, I don’t have time.

00;01;57;26 – 00;02;12;29

And they’re like, oh yeah, this is a great deal. It’s six meetings a year and you get paid for each meeting. And we would love to have you on a board of directors. So I after a lot of arm twisting, I finally agreed. And then two days before the annual meeting, they said, oh, by the way, we haven’t told you that we’re going to also elected chairman of the board.

00;02;13;00 – 00;02;36;13

And that was kind of my introduction to insurance. And I came in mostly with a farmer night background and suddenly became chairman of the board of the small insurance company, Western Iowa. And while I served that role for several years, I kind of transitioned into consulting role and mostly in the crop protection space. And my board convinced me to step down as chairman of the board and accepted the major spot with the insurance company.

00;02;36;13 – 00;02;44;20

So that was my introduction to insurance, mostly on the PSC side, but we also had an internal agency where we offered crop insurance through that agency.

00;02;44;20 – 00;02;59;26

So row crop insurance has been popular for years, kind of a mainstay of the grain business, if you will. Some of these livestock products are much newer. Can you talk about what products we’re using these days and how? I mean, I think they’re revolutionary. I’m guessing you agree. Can you talk about that for a second?

00;02;59;26 – 00;03;26;08

You’re exactly right. I mean, a lot of the we call rural crop insurance products date back over 80 years across the country. But in the early 90s, some of the revenue type products started taking off about the same time. You know the mindset, if this works for real crop, why wouldn’t it work for livestock? So products like livestock risk protection, which basically puts a floor under products, livestock gross margin, you know, put a margin in place or also DRP, they start to take off.

00;03;26;08 – 00;03;48;07

So the products have been around. But fast forward to basically Covid and we suddenly started instead of paying for the premium upfront, it was put in place where you could pay for the premium on the back end. And then with Covid and partly with the trumpet ministration, the subsidy levels were increased for these products, which suddenly brought a whole new level of attraction to to the products into the industry.

00;03;48;07 – 00;04;02;16

And so clients of PFG AG and now ever ag lots of futures and options stuff, free insurance and now a pretty heavy adoption rate using some of these insurance products either in exclusively or in concert with some of these other more traditional risk management products.

00;04;02;16 – 00;04;24;09

Right? Yes, definitely. So we closed out what they call a crop year for livestock, which June 30th, 2024. We closed out the crop year 2020 for the industry was about $1.4 billion. And they’re still forecast for this market could grow to as much as 6 to 8 billion. I don’t know who’s doing the forecast, but we went from a couple hundred thousand to 1.4 billion.

00;04;24;09 – 00;04;28;29

And for years, I mean, there’s still a lot of potential growth for these products.

00;04;28;29 – 00;04;46;09

And we’re talking swine and cattle and certainly elsewhere, the ever ag universe. There’s a huge business with the Dairy Revenue Protection, which is part of the same family of products. So it has revolutionized dairy risk management. And it seems like it’s done the same in the livestock side. So going back to the farm itself a little bit, you’ve spent a lifetime in central Iowa.

00;04;46;13 – 00;04;54;16

How has agriculture changed over time in Iowa and elsewhere, in your opinion? What are some of the things that are the same and what are the things that are different that you see today?

00;04;54;16 – 00;05;26;04

Technology and just the size and scale of operations continues to evolve. I’m old enough to where if you had 160 acres and a few thousand a few cows, you had a viable farming operation. I mean, nowadays the scale of the operations is just mass. So that’s been probably, I would say, the biggest change. Yeah. Just, you know, going from small to large on the same side, I would say egg is still a people, but it’s always been a people business and and still people most I mean, people work with people they like.

00;05;26;10 – 00;05;28;29

Yeah. You have to have that relationship to be successful.

00;05;28;29 – 00;05;31;15

It’s a lot of boots on the ground, right? I mean, that hasn’t changed.

00;05;31;17 – 00;05;35;11

Belly to belly, whatever term you want to use, it’s the people with no.

00;05;35;11 – 00;05;58;28

Farmer attitudes towards risk management in general and profitability. And I mean, I know we talk all the time about we are here to protect risk, not to take risks, right? To manage risk, not to take on additional risk. And the mindset around margin management and sustainable profitability. Has that changed? Have you seen an evolution in that direction psychologically and mentally over the years with our farmer clients?

00;05;58;28 – 00;06;15;27

I would say for sure, you know, we talked about, you know, the transition from one generation to the next. And I think as you continue to make that transition, risk management becomes more acceptable. But this is an extremely volatile business. I mean, one day you’re filthy rich and the next day you’re wondering, how are you going to survive?

00;06;15;27 – 00;06;22;29

And when you have that kind of volatility and egg risk management just helps you sleep better at night. And that’s a key thing to survival.

00;06;23;01 – 00;06;38;22

Right? We always talk about, hey, look you may miss the highs but you’re going to survive the lows right. Keep out of the ditch and when you see abundant profitability, lock it in to the extent possible. I mean, you know, there’s always considerations of how and how far, how much. But we try not to sleep on profitability. Is that then that’s a fair assessment.

00;06;38;24 – 00;06;39;20

Very fair.

00;06;39;22 – 00;06;47;15

And in the hog markets we’ve had extended periods of where you could be underwater and deep underwater. And that hasn’t changed. Right.

00;06;47;18 – 00;06;50;29

And it’s probably not going to change. It’s always going to be for business.

00;06;50;29 – 00;07;11;22

Looking at that swine marketplace, what are some of the things that you follow and find interesting in the Ever AG Group’s day to day coverage? I’m going to pause and say that the AG Livestock team, the swine team is an incredible collection of people with all kinds of different backgrounds, and it’s a really incredible think tank. If you will know more about hogs than I did a year ago.

00;07;11;22 – 00;07;20;27

For darn sure. I love listening to the group because there’s just so much smart conversation going on every day. What are the things that you find fascinating as you contemplate the wide markets and cattle markets day to day?

00;07;21;03 – 00;07;43;06

So keep in mind that I do not come from a risk management background. I’ve been in this role for about three years, so it’s kind of been drinking from a fire hose. I have always been a news junkie with facts and figures and statistics and percentages have always intrigued me. But what’s really neat about, especially now that we joined everything, is I don’t have that many subscriptions to the different papers.

00;07;43;07 – 00;08;06;27

I mean, we have a constant flow of information from 630 in the morning till, you know, sometimes well into 2:00 at night. And I just always intrigued by the depth at which this team looks at everything. And we might not necessarily analyze it. Right. But it’s rare that we get surprised by something we didn’t see. Come. When you get a report and you can look at it, the day to day comparison or week over week or month over month.

00;08;06;27 – 00;08;18;26

I mean, we look at it, but every different direction. You can look at it in depth. The knowledge is just fascinates me. It keeps this job so interesting because I didn’t realize people looked at markets to that depth.

00;08;19;01 – 00;08;39;27

And for the just general news junkie or sort of marketplace junkies. I mean, we talk about China, right? What’s the hog price in China day to day? And the dairy side, we care because of impacts. We prices, believe it or not, we look at I’m sure this is elementary for the long time swine market you know adherence. But I think it’s fun and interesting to hear like well hey look, the bellies came out high today that drove the cutout up.

00;08;39;27 – 00;08;47;06

And therefore, you know, the indexes should move this way. And we expect that to do this to the lean hog market. I mean, that’s a day to day drama, right?

00;08;47;06 – 00;08;56;03

It is. I mean, there is a wealth of information. And there’s an old adage that says, you know, knowledge is power. The more information you have, hopefully the better decisions you can make.

00;08;56;09 – 00;09;04;03

And just from a client service perspective, how are we sharing that knowledge with our clients? I mean, we do a lot of publications. How else do we interact with our clients in that arena?

00;09;04;03 – 00;09;23;03

We try to define that my client, what their needs are, but everybody has access to the publication. Some people we do weekly calls, we have some we do daily calls. But when we’re we’re always available and it’s not uncommon to have team members on the phone at 5 a.m. one morning and again, this latest 10:00 at night, everybody’s needs are different.

00;09;23;03 – 00;09;28;09

You just kind of have to put together a plan that works for what their needs are, and make sure you address with that for.

00;09;28;12 – 00;09;46;21

Who knows, maybe this podcast someday will factor prominently into that mix. Tom, thank you so much for joining us on Hog Talk this week. I enjoy working with you and the swine livestock team and we’ll be back in a couple weeks with another edition of Hog Talk. If you enjoyed listening to Hog Talk, be sure to tell a friend or two and subscribe to us wherever you listen to your podcast.

00;09;46;21 – 00;09;49;07

And thank you to the Insights Crew for their work on today’s show.

The following music was used for this media project:
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Free download: https://filmmusic.io/song/9520-funky-intro-29
License (CC BY 4.0): https://filmmusic.io/standard-license
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© Ever.Ag 2024, confidential and proprietary.

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.

EVER.AG INSURANCE SERVICES IS A LICENSED INSURANCE AGENCY AND AN AFFILIATE OF EVER.AG. INFORMATION CONTAINED HEREIN IN THIS WEBSITE IS COMPILED FOR THE CONVENIENCE OF THE USER. INFORMATION IS OBTAINED FROM SOURCES BELIEVED TO BE RELIABLE AND IS FURNISHED WITHOUT RESPONSIBILITY FOR ACCURACY OR CONTENT. MARKET DATA IS SUBJECT TO CHANGE AT ANY TIME. Ever.Ag is a licensed insurance agency in the following states: AZ, CA, CO, CT, FL, GA, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MO, MT, NE, NV, NH, NM, NY, NC, ND, OK, OH, OR, PA, RI, SD, TN, TX, UT, VT, VA, WA, WV, WI, WY.

The post Hog Talk – November 12, 2024 appeared first on .

In the latest edition of the Parlor to Plate dairy podcast from Ever.Ag Insights, our all-star panel discusses 2025 outlooks. How could grain markets impact dairy producer profitability in the coming months? How are cheese supply and demand looking into next year? What strategies should producers consider when hedging next year’s risk?

Join host Erica Maedke and panelists Jon Spainhour, Ryan Yonkman and Brandon Weigel 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;27 – 00;00;33;25

Hello. Welcome to Parler to Play, a weekly podcast from Corporate Insights dedicated to offering listeners enlightening discussion and actionable intelligence about dairy markets. I’m your host today, Erica McKee. We are excited to have you along. And if you like what you hear, please like us. Subscribe and tell a friend or two. Today’s recording. It’s Wednesday, November 6th around 11 central time, so we are still waiting for all of the spot dairy markets to close.

00;00;33;25 – 00;00;57;12

Quick rundown today’s markets. We know Black Cheddar is at a 175, down $0.14 from last week. Wednesday barrels at 181 down 11. Now we’re still waiting for the butter market. But as of yesterday’s calls we were down $0.03 from the prior Tuesday at 268. Nonfat dry milk closed yesterday at 140. That’s up a penny from a week before today in the green complex.

00;00;57;12 – 00;01;24;23

December corn is trading at 425 per bushel. That is up $0.06 on the day. January soybeans at 1002, and then December soybean meal at $298 per ton. It is a new week. In another star studded panel from the financial services team on our team, we have Brandon Weigel with us today from our commercial division, John Speed Hower. He is one of our media stars of the GDC Analysis Podcast and host of the Forecast Update live video series.

00;01;24;23 – 00;01;38;22

And finally, from our producer group we have Ryan Jackman. So I’d like to ask our panel today, what are they watching for clues on how the 2025 dairy markets will shape up. So let’s start with you, Brandon. Let’s talk grains and what that matters to dairy producers.

00;01;38;22 – 00;01;56;12

So I guess the big thing that everyone’s watching as it pertains to grain and feed markets, as we move towards 2025 and coming out of harvest here this fall, is what is South American weather doing? That’s been the hot topic. We know that harvest in the Midwest went very well. Harvest pace is well above where it’s ever been.

00;01;56;12 – 00;02;14;06

I mean, this is a record pace for most producers. A lot of this corn bean crop that got pulled out has been taken out over the course of the last six weeks, and there’s very few people that have corner beans left to harvest. Yield results have been strong. We know that this market is going to continue to face some fundamental headwinds from the supply side.

00;02;14;06 – 00;02;36;09

I think that there’s very few concerns about, you know, having an abundant crop. We know that the domestic corn and soybean balance sheet is in a much better position in order to spend the last several years. And now South America kind of comes into focus. They were very delayed on their planting piece. If we drag this thing back, you know, just four weeks ago, they were only about 10% done with bean planting and a lot of grass, which is that primary being growing region of Brazil.

00;02;36;09 – 00;02;53;17

Fast forward here to this week. And now there are 80% planted in there, right back on track with their five year average. So as long as they continue to see good weather come to fruition, this market’s going to continue to face some of those supply driven headwinds. You know, on the flip side, we’ve kind of got a balance this up with some of the recent headlines around the election.

00;02;53;17 – 00;03;12;27

Right. And that’s where we talk about export demand specifically with soybeans in general. You know soybeans. They started off the day very poorly. We’ll say that they’ve actually recovered throughout the day. I think as the vines have digested some of this news around the election results end of the day, though, we’ve got some supply headwinds that are going to be keeping a lid over this market.

00;03;12;27 – 00;03;25;18

As we look at both the protein market and the corn market for dairy producers and, you know, downside opportunity, I think that, you know, really comes of South America’s weather continues to come at a pace that allows for that crop to potentially be another record.

00;03;25;21 – 00;03;34;27

So, Brandon, I know a lot of people have been watching us export numbers. We had a couple of really big buys. Do you see anything moving there, give or take the election?

00;03;34;27 – 00;03;58;00

Yeah, I think so. We can certainly see some softening of that export strength that we’ve seen recently as we work our way into 2025. I think that as we potentially see some of these policy changes, trade or tariffs implications, that could certainly slow the pace of export demand specifically with China. We know that’s the big one. I think there’s still some question marks as to if Mexico will be impacted with tariffs.

00;03;58;00 – 00;04;06;00

Obviously that could hurt corn export demand if we see anything happen with Mexico. But I would expect to see that slow as we move into 2025.

00;04;06;00 – 00;04;13;18

That’s good feedback Brian. And put inside. John, how about you. What are you looking ahead to in the dairy markets as you look through 2025?

00;04;13;19 – 00;04;33;22

Well, I hate to steal the thunder from the forecast update live that we talked about this morning, but there is a chart that Phil put on there, which is our favorite look. And it essentially shows the expansion and finished goods for cheese capacity. And then we match that up against the long term compound average growth rates of cheese demand.

00;04;33;22 – 00;04;58;02

And when you look at that, there are times where we stair step a little bit of capacity increase and we barely meet the growth in demand. But we’re in fairly good balance. What I think I’m looking at as we move into 2025, we’ll have more and more plants coming online with finished goods, cheese capacity and it appears, you know, on paper at least, that it’s going to temporarily outstrip the demand side of things.

00;04;58;02 – 00;05;18;21

And I think that for me, that says a lot when we look at it through the lens of the export side of things, the U.S. is probably getting into a potential export competitiveness versus Europe. We’re seeing the European prices. You know, they’ve moved lower on cheese, but still relatively strong. And that 205 to 10 area on the futures.

00;05;18;21 – 00;05;43;29

I look out there and see our Q1 futures right now for cheese are you know in that 185. So that feels like we could get some exports in the past. We might look at that potential and say that’s pretty bullish. Yet exports prices rise have no exports. Prices decline. I think when we look at it through the context of the cheese capacity that’s coming online, it’s kind of one of those deals where you’re saying, I think we’re going to need those exports just to stay above.

00;05;44;01 – 00;06;05;20

We need something to carry that product out. So I’m looking at it saying in the 2025, specifically through the lens of cheese, that we’re steady to lower from our current prices and our current future structure. If we bring on more milk production, that probably starts to accelerate that and bring the price down a little bit more. When it comes to butter, that’s a difficult one.

00;06;05;20 – 00;06;27;08

As of right now, all these cheese plants that go up theoretically mean, and the absence of more milk that that milk is going to come out of the butter powder plants and that can rob some of that capacity or the finish goes on there. That is a support of argument. However, if we do backfill this in with more milk production, right, that kind of alleviates that support of this as well.

00;06;27;08 – 00;06;29;12

That’s what I’m looking at going into 2025.

00;06;29;13 – 00;06;44;21

So as we think about exports, Mexico is generally our largest customer for cheese for nonfat. You had mentioned that the markets were moving a bit this morning in the currency space. How big is that move. And then do you see that impacting exports?

00;06;44;21 – 00;07;07;21

Well, it’s funny, Brandon mentioned earlier that the grain market kind of had its move this morning and recovered. It looks like the peso had its move this morning and recovered a little bit. So kind of a knee jerk reaction lower. But having recovered you know its losses since then. However I would point out that the peso is down in a big way versus where it was going back to the middle of May.

00;07;07;21 – 00;07;26;26

So, you know, peso moving lower removes some of that Mexican purchasing power. And then when it comes to cheese, I think a lot of the exports that we saw earlier in the year were done potentially at a flat price. When we were at $1.40, $1.50, right. And we had a strong peso. As we move forward here, you know, I know the cheese market’s coming off its highs.

00;07;26;26 – 00;07;37;19

But we’re at $1.75 and a peso that’s weaker. I think we’ll put that in the category of not necessarily being bearish. But it’s certainly not bullish. And it probably creates some headwinds for US exports.

00;07;37;21 – 00;07;44;11

Thanks for your comments John. Those are good Ryan. Let’s turn it to you. What are you looking ahead in terms of finding clues about 2025?

00;07;44;16 – 00;08;00;24

Yeah, I think the writing on the wall for us has been in place now for a couple months. As far as how we’ve been trying to see this for the dairy. I mean, you go back to the September timeframe when hindsight’s 2020, but, you know, we made our highs. That’s pretty seasonal time to do it. And felt feed margins were at their extremes.

00;08;00;24 – 00;08;19;05

And that was when we really started looking forward for the dairies. Your October through March into Q2 is, you know, hey, it’s go time to start putting some of this margin to bed. Fast forward to today. Here’s the good the bad news, the bad news. Spot milk prices broke about $6 100 right from the highs and which is strongly affected in November December.

00;08;19;05 – 00;08;36;25

But when you look at Janda of next year, Q1 is down about $0.70. But as a whole, Unity’s class story is about 20 to $0.30 off its high as a whole. Unity’s class four I think is about 20 to $0.30 off its high. So as much as hey, you missed a break right in front of you, the 2025 curve.

00;08;36;26 – 00;08;55;08

And that’s really where we assess the risk to be the greatest. That’s part of the curve we really need to pay attention to. You haven’t missed the boat yet. Yes, Q1 has moved, but the rest of the year is still there, really held in really well, very flat curve. Technically we have a carry in the curve now. If you look at class three with today’s cash move, East is trading a premium.

00;08;55;08 – 00;09;14;21

So take this one for a thought process. Jan to March milk is worth more than what it’s trading today. That’s kind of a goofy statement when you think about we’re still in November and in theory in the last tropical holiday orders. So we still view the opportunity as being one that favors dairies go into next year. I think to have a strong opinion in next year is a tricky thing.

00;09;14;21 – 00;09;35;19

So I really think you got to let the numbers do the talking. The margin opportunities. Milk in a funnel on a percentile basis is still very high. I think John laid out very nicely the obvious risks that are in front of us for next year, and I think some of them do look pretty obvious. So I think to stare at next year’s market, say, doesn’t have downside or say it has to go up is a difficult program to sign up for.

00;09;35;19 – 00;09;55;14

So we’re trying to be active. We’re hopeful in the very short term. To John’s point of view, we’re in the one 70s now, cheapest price we’ve been since last April with some holiday orders. I’d love to see one more little pop year for dairies to continue attacking the rest of the year. We don’t feel great or certain that’s going to happen, so 2025 is a big focus and just making sure guys don’t blindly let it slip away.

00;09;55;17 – 00;10;17;19

Appreciate your insights, Ryan. A big thank you to Brandon, John and Ryan for joining me on today’s episode and sharing your thoughts with our listeners. Thank you, as always, to our media team for mixing and mastering. And thank you to the listeners 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

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© Ever.Ag 2023, confidential and proprietary.

The post Parlor to Plate – November 6, 2024 appeared first on .

View the video version of this episode here.

In The Grain Feed, Jim Matthews is joined by a rotating cast of analysts to discuss what dairy and livestock producers can be doing to manage their risk. This week, Jim is joined by Jake Kingsley and Phil Plourd.

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

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 2024, confidential and proprietary.

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 post The Grain Feed – November 6, 2024 (Audio Only) appeared first on .

Cody Koster and Jon Spainhour take a deep dive into this week’s GDT report.

Questions or comments? Contact Jon at [email protected], Cody at [email protected], or give us a call at (312) 492-4200.

(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;17 – 00;00;15;24

Hello everybody. Welcome back to another GDC Tuesday. I’m your host, Cody Koster, with me from Chicago, Mr. John Spade Howard. John, how are you today?

00;00;15;24 – 00;00;19;22

Doing all right, Cody, happy to be here on this fine Tuesday afternoon.

00;00;19;22 – 00;00;41;03

We are happy to have you here. We had a little two week lag in the GDC. This was one of those weird ones where instead of every other week, it was the third week. But nonetheless, we are back on the 5th of November to talk a little global dairy trade. So if I’m not mistaken, we were actually unchanged on the wax auction and a 3.8% on today’s transactions.

00;00;41;06 – 00;00;59;22

Yeah, Cody, today was a big auction up rather significantly, as you mentioned there. There were some big winners out here today. First of all, let’s start with homo powder. A kind of the big dog of the whole auction was up for point 5%. And that was a pretty big move for homo powder. And we don’t normally see it move that much or that aggressively.

00;00;59;22 – 00;01;23;07

That number was up. When we look at it in terms of expectations based on where futures were trading, we would say that it came in slightly over where the futures were trading and slightly over where the GTI pole trading, and then when we stick with the powder side here and go to skim milk powder, skim milk was up 3.8%, came in roughly at about a buck 29 on a U.S. dollars per pound basis.

00;01;23;07 – 00;01;42;17

I would point out that that number came in a little bit under futures expectations. So I think it came right in along where the GTI also expectations were. But when it comes to the futures futures, we’re looking for about another $100 a ton more out of that. So don’t want to take away from the fact that we were up 3.8%.

00;01;42;17 – 00;02;11;20

But I do want to mention that, skim milk powder that comes in a little bit below expectations when it comes to the fat side of things. AMF up 4.6%, water up 7.6%. Let’s use butter as the barometer here. And we’ll say on a US dollars per pound basis came in about $3.17 a pound. So when we think about that in terms of the rest of the world here, for sure we can say the US butter market now is significantly below the rest of the world.

00;02;11;21 – 00;02;38;10

We’re at 200 67.5. We just pointed out that the GDP is at 317. And we would say that Europe is still up in that 385 and 390 area on butter. So this auction was big and it shows that there might be some butter that is getting exported out of New Zealand, possibly at the expense of Europe. So I wouldn’t be surprised to see European prices ease as these butter prices came up on the GDP.

00;02;38;12 – 00;03;01;13

But we’ll probably need to wait to see that happen. From a seasonal perspective, when we look at cheese cheddar up, 5.8% came in at $2.26 a pound. Mozzarella was up 1.1%, up to $2.09. Both of those are quite a bit higher than the US price. And just to give a frame of reference in here, we would say that the European prices are higher than that.

00;03;01;13 – 00;03;25;21

We would say that mozzarella trading in that 225 area and their futures a little bit below that. So we’d say that European and New Zealand prices are kind of right in parity with each other, whereas the US price right now, when we look at it after today, we went down $1.79 and blocks on a $1.83 in barrel. So if we frame all this up, we would say the US is the cheapest cheese price in the world.

00;03;25;21 – 00;03;48;29

Now the euro, the cheapest butter price in the world. When it comes to nonfat, we’d say nonfat price. After today’s auction, we went to a $1. 39 five here in the US, or a dollar 39.5 New Zealand price is $1.29 ish. And then below that, we would say the European price is somewhere around 122 to 125. So the US is by far the highest nonfat skim price in the.

00;03;48;29 – 00;04;10;22

World, quite a bit higher to lower there. It’s interesting how we can be such a discrepancy in the cheese price, but when you switch to the glass for the nonfat side at such a higher price than what they have overseas right now, it’s just very interesting to look at it kind of apples to apples. But I know you’ve said that’s not quite the case on especially the cheese front, because there are a little different inner workings of that.

00;04;10;24 – 00;04;27;28

You bet. And on the cheese front, they are different somewhere in there, that differential in the price, even though the products are different, that will catch if the European and the New Zealand price stay high or continue to move higher, that will make a difference here in the US. But I think here in the US right now, we’ve maybe missed that export window.

00;04;27;28 – 00;04;54;04

Feels like maybe going into the end of the fourth quarter here. And at the same point in time, we have more finished goods of cheese product coming on. So I think we might see a discrepancy in the US cheese price versus the international price. But as Phillip Florida said here several times, sometimes the US price has to go to a level where you’re able to put a sign up and wave your hands and say, hey, there’s a sale going on over here before we attract those international buyers.

00;04;54;04 – 00;04;57;13

And then prices suddenly go higher because we do have exports.

00;04;57;16 – 00;05;00;21

It kind of feels like we’re heading towards that window waving opportunity at this point.

00;05;00;21 – 00;05;22;00

We’re not quite there yet, I don’t think. And I say I don’t think maybe on a spot basis when it comes to the futures basis, which we would say probably has more in dictating exports. I would say the futures over in Europe right now are two, 10 to 15 ish. Here we are after today’s just looking at it here, roughly $1.86 maybe that’s starting to get some attention.

00;05;22;00 – 00;05;35;05

I’m not sure that it’s going to rule the day though. We probably have to see things. You know, we need a little bit more of a difference than that before we’re able to capture those exports. But there’s definitely talk out there that people are kicking the tires and paying attention on the export side.

00;05;35;06 – 00;05;42;23

Gotcha. Well, John, as far as the regions of purchasing by regions, is there anything big that stuck out to you on that front?

00;05;42;24 – 00;06;01;29

Yeah, just looking in here. China, they were here today. They were up 8% year over year. So if we were looking at is China buying more or less this year we would say they’re buying more. They bought 8% more on this auction than they bought last year at the same point in time versus last event, their purchasing was down 11%.

00;06;01;29 – 00;06;23;24

So still a good showing out of China, just not as strong as it was last time. When it comes to Southeast Asia, you know, the other powerhouse player in they’re down 20% year over year, down 19% on an event change. The Middle East was maybe a marginal flex buyer on this one, up 2% on a year over year basis, but up 63% versus the last auction.

00;06;23;24 – 00;06;40;18

When we look at it, I guess we can say, yeah, China was there. The Middle East backed off a little bit. Something I think is important to point out, though, is, you know, there was a little bit less product for sale on this auction than there was on the last auction. I don’t know that it’s the biggest deal, but maybe 6% or so less product.

00;06;40;18 – 00;06;56;18

So I think we need to be cognizant of that. Yes, China bought less, but there was also less for sale. And I think that less for sale was a seasonal element. Right. It’s just we would expect to see those volumes start to step down on the offer a little bit. And as a result, we’d expect to see buyers step down.

00;06;56;18 – 00;07;25;11

If those buyers do stay in here on a seasonal basis. I think that puts us in a situation where prices are going to be sustained or even move higher. If we see those buyers start to step off here, maybe we go lower. I would say, though, on the Chinese side, milk production in China right now. We saw a report this morning down 6.9%, suggests that we could see the Chinese remain buyers in here as they try to make up for a little bit of the loss and the domestic milk supply.

00;07;25;11 – 00;07;38;24

However, we’ve been warned by several different people that’s a good thing to keep an eye on, and possibly that will happen. But domestic demand in China itself for dairy products is still kind of behind the eight ball right now, so we want to be cognizant of that as well.

00;07;38;25 – 00;07;46;17

Awesome. Well, besides those hard hitting facts right there, John, is there anything else that really stuck out of this GTI specifically to you?

00;07;46;21 – 00;08;06;16

You know, I guess I would say it’s interesting that the US nonfat skim price has been able to sustain the premium that it has for so long. And then today as the GTI went higher, we went higher as well. So there still is a bit of a bid out here on skim, and maybe the US is dragging the rest of the world higher.

00;08;06;16 – 00;08;27;25

I just can’t help but feel like the US is maybe at the upper bands of our nonfat potential. Maybe we can go a little bit higher. I feel like in order to do so, we need to see the rest of the world come higher as well. And right now I would say that upwards movement is going to have to come out of Europe, where again, prices are still at $1.22 to $1.25.

00;08;27;25 – 00;08;45;10

Awesome. Well, John, as usual we appreciate all the insight on the global dairy trade. Our next auction together is going to be in two weeks, the middle of November. So we will be back with some more insight on the global dairy trade at that time. But until then, we appreciate it. Everyone tuning in and listening. John, we appreciate your insight as always.

00;08;45;11 – 00;08;49;10

Until next time everyone, have a great week! Even better weekends. We’ll see you in two weeks.

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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 post GDT Review with Jon Spainhour – November 5, 2024 appeared first on .

View the video version of this episode here.

In The Grain Feed, Jim Matthews is joined by a rotating cast of analysts to discuss what dairy and livestock producers can be doing to manage their risk. This week, Jim is joined by Jake Kingsley and Phil Plourd.

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

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 2024, confidential and proprietary.

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.

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