08Jan
By: Paige Driscoll On: January 08, 2016 In: In the News Comments: 0

Katie Krupa in Cheese Market News – January 11, 2013

The current outlook for 2013 producer margins

Now that 2012 is officially in the books, many of us are looking ahead to the rest of 2013 and wondering what the year will bring for dairy producers and their profitability.

While the milk price has historically been a good indicator, it only shows part of the picture. In order to get a better idea of producer profitability we can look at the milk-feed margin. This margin is calculated using the current futures trading prices on the Chicago Mercantile Exchange (CME) for Class III milk, corn and soybean meal. While this margin isn’t accurate for all dairy farms across the country, it is a fairly good representation of the industry and is consistent over the years.

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Katie Krupa in AgWeb – January 25, 2013

Calculating Your Strategy for Higher Milk-Price Opportunity

One of the biggest fears producers have when creating a risk management strategy is that milk prices will move higher, and they will “miss out” on those higher prices in their milk check. While I would like to say that all producers implementing risk management strategies are happy because they are protecting their profit margins and making money regardless of price fluctuations, we all know that is not the case.

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Katie Krupa in Progressive Dairyman – February 11, 2013

Using a milk-feed margin to predict and protect profitability

In recent years, higher and more volatile feed prices have made it difficult for producers to predict their profitability by looking at milk price alone.

While the milk price trading on the Chicago Mercantile Exchange (CME) has historically been a good indicator, it only shows part of the picture.

In order to get a better idea of producer profitability, we can look at a milk-feed margin. This margin is calculated using the current futures trading prices on the CME for Class III milk, corn and soybean meal.

Click here to read the full article.

Brian Rice in Cheese Market News – March 1, 2013

Dairy price direction hinges on domestic, global fundamentals

According to USDA’s Dairy Market News, expectations for cheese prices and supply and demand over coming months “seem guided by whether the person opining is focused more on domestic or global factors.”

Dairy Market News notes that those primarily focused domestically mention expectations of “heavy production of milk” over the next several Dairy price direction hinges on domestic, global fundamentals months, leading to strong supplies of cheese. Meanwhile, when the focus is more global than domestic, comments tend to focus on a “worldwide slowdown” in milk production.

“To me, this is the biggest issue in the dairy market today and has potential to turn into one of the key stories of the year,” says Brian Rice, principal at Rice Dairy LLC, Chicago.

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Katie Krupa in Progressive Dairyman – March 21, 2013

Cheese at lowest price since June 2012

As we slog through the end of winter a little weary and ready for the break of some warm spring days, the dairy markets also seem to feel the effects of winter. Since the beginning of the year, the markets have experienced some mild volatility, but ultimately we haven’t seen the market change direction or change price too drastically. While the Class III futures price for March is currently trading below $17, the March price has been trading roughly in the range of $16.90 to $17.50 for the past five weeks. As it looks now, the March price will be the lowest of the first quarter, and if the market were to settle at the time of this writing, the average would be around $17.40.

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Katie Krupa in AgWeb – June 3, 2013

Dealing with the Internal Struggles of Risk Management Decisions

When it comes to making risk management decisions, many producers struggle with the decision-making process. Risk management can often be emotional, the information can be overwhelming and, simply put, producers don’t want to miss out on potential higher prices. The volatility has many producers asking themselves if risk management is right for them, but they still struggle with the process.

Below are a couple of tips and tactics to help make risk management decisions and implement a plan that will work for your business.

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Katie Krupa in Progressive Dairyman – June 28, 2013

Three examples of the rapidly changing milk market

Recently, the Class III futures for the upcoming months trading on the Chicago Mercantile Exchange (CME) have experienced some downward volatility that has eroded much of the narrow profit potential for dairymen.

After talking with several producers who are busy with this year’s plantings, I realized that the market changed so quickly that many producers were unaware of the significant drop in price.

In order to get a little different perspective on market volatility, I did some analysis of the Class III futures market to see if the market has frequently made notable changes within a couple months.

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Brian Fletcher and Aishwarya Govil in Cheese Market News – August 2, 2013

A record amount of nonfat dry milk leaving the country

Recently, the Class III futures for the upcoming months trading on the Chicago Mercantile Exchange (CME) have experienced some downward volatility that has eroded much of the narrow profit potential for dairymen.

After talking with several producers who are busy with this year’s plantings, I realized that the market changed so quickly that many producers were unaware of the significant drop in price.

In order to get a little different perspective on market volatility, I did some analysis of the Class III futures market to see if the market has frequently made notable changes within a couple months.

Click here to read the full article.

Katie Krupa in AgWeb- September 6, 2013

Don’t Panic – Prepare

This may come as no surprise, but my phone rings most often when the market takes a drastic turn lower. The producers on the other end of the line are without doubt asking, “Is it too late to hedge? Have I missed the good prices?”

My answer is always the same: No one knows what tomorrow will bring, but rather than leave it to chance, let’s create a plan that will protect your business’ profits. Preparing ahead of time will help eliminate the panic mode reaction that kicks in when the milk prices start to decline.

Click here to read the full article.