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While there’s no guarantee it will happen, long-standing market patterns and current weather conditions point to the potential of weaker cull cow prices ahead. Mark Linzmeier, dairy marketing adviser and owner of Linzmeier Business Solutions LLC, provides a “heads up” for anyone who has been holding on to dairy cows (and USDA numbers indicate you are) but are considering culling as milk prices come off peaks for the remainder of 2020.
Progressive Dairy provides updates on dairy-related organizations and companies, compiled from staff news sources and industry press releases. Email industry and organization news to Progressive DairyEditor Jenna Hurty.
Business Digest Highlights
July was another strong month for U.S. dairy product exports, and there’s even renewed optimism China is moving toward meeting trade commitments. However, the overall picture remains cloudy following a fifth straight deficit month in the U.S. ag trade balance. Here’s a Labor Day weekend update on the U.S. ag export categories tracked by Progressive Dairy and a summary of other trade news.
The likelihood of negative producer price differentials (PPDs) is fading. Unfortunately, it’s because August’s Federal Milk Marketing Order (FMMO) Class III milk price fell sharply from July.
Strategic questions on whether to invest or divest impacted standings in Rabobank’s annual listing of the “Global Dairy Top 20” companies, noted Mary Ledman, dairy global strategist. Rankings in the annual report, released in late August, were based on 2019 financial data and includes merger and acquisition transactions completed in the first half of 2020.
Higher July U.S. average milk prices and slightly lower feed costs resulted in another large jump in the dairy income margin calculated under the Dairy Margin Coverage (DMC) program. As in June, however, negative producer price differentials (PPDs) under the Federal Milk Marketing Order (FMMO) system – not included in risk management program calculations – mean the announced prices or margins may not reflect what producers see at the farmgate.
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