Capital press., December 21, 2018, Page 11, Image 11

Dairy/Livestock
Friday, December 21, 2018
CapitalPress.com 11
Cattle, beef supplies still growing
By CAROL RYAN DUMAS
Capital Press
BURLEY, Idaho —
With a beef cow inven-
tory that’s still on the rise,
a healthy economy and
strong demand for beef will
be critical for Idaho’s cattle
producers in the year ahead.
USDA is forecast-
ing producers will add
180,000 head to the beef
cow inventory in 2019 and
another 100,000 head in
2020 before leveling off in
2021, Joel Packham, Cas-
sia County extension edu-
cator, told producers at
the University of Idaho’s
annual outlook seminar on
Wednesday.
“All this building of
inventory can’t help prices,”
he said.
The calf crop goes hand-
in-hand with cow inventory
and is forecast up 0.6 per-
cent in 2019 and 0.3 per-
cent in 2020, and there are
plenty of cattle on feed.
The number of heifers held
Carol Ryan Dumas/Capital Press
Joel Packham, Cassia County extension educator, gives an
outlook on beef and cattle during the University of Idaho
outlook seminar in Burley on Dec. 12.
for replacement is slowing,
but those numbers are still
expanding, he said.
“We haven’t turned the
corner yet,” he said.
Beef production contin-
ues to rise. Even without an
increase in the number of
animals, the long-term aver-
age increase in carcass rates
has been 5 pounds per year,
he said.
With increasing cattle
numbers and a lot of kill
plants going out of business
between 2000 and 2018,
meatpackers hold all the
power, he said.
“I don’t see that changing
in the near future,” he said.
Packers took a bath
between 2012 and 2014
after a drought in Texas
took a lot of cattle out of the
market. They want to make
money, and they will until
more capacity is built, he
said.
Increased supplies of
pork and poultry are also a
limiting factor for beef and
cattle prices. The good news
is, demand for beef is hold-
ing, he said.
“The economy is really
strong … the industry is
producing record amounts
of high-quality beef, and
demand is responding,” he
said.
Exports are also provid-
ing a boost, and the export
value per head continues to
increase. Exports account
for about 12 percent of
U.S. production, and export
value in 2019 is forecast at
$360 per head of all fed cat-
tle slaughtered in the U.S.,
he said.
CattleFax is forecast-
ing average prices for 2019
of $115 per hundredweight
for fed steers, $144 per hun-
dredweight for 750-pound
feeder steers and $157 per
hundredweight for 550-
pound steer calves.
“I’m surprised we’re
holding the price we are
with the amount of supply,
he said.
The price for bred cows is
forecast at $1,500 to $1,600,
with profitability continuing
to support bred cow values.
But cull cow prices haven’t
found a bottom, he said.
“Dairy is not helping the
beef industry; they’re dump-
ing cows on the market all
the time. The cull cow price
is going to suffer,” he said.
Looking ahead, exports
must continue and trade
issues must be settled. A
strong economy is also crit-
ical, but a recession could
happen any time, he said.
He advised cow-calf pro-
ducers to find a way to be
low-cost and high-return
producers.
For years, extension edu-
cators told producers to get
as much production as pos-
sible. Instead they should
have told them to get their
costs as low as possible, he
said.
Milk prices may rise next year; overproduction an issue
By CAROL RYAN DUMAS
Capital Press
BURLEY, Idaho — If
market forecasts prove
accurate, dairy farmers
should see some improve-
ment in prices in 2019.
“But it’s going to be a
few tough months ahead
and has been (tough) for
a few years,” Rick Naere-
bout, CEO of Idaho Dairy-
man’s Association, said
at the University of Idaho
annual outlook seminar on
Wednesday.
The global milk supply
is trending lower, and there
should be a bit of correction
in supply and demand this
coming year, he said.
Cow numbers are drop-
ping in the U.S. due to
financial pressure. But milk
per cow is increasing due to
improved genetics, sexed
semen and producers hang-
ing onto the best producing
cows. Growth has slowed to
about a 1 percent increase
year over year nationally
and in Idaho, he said.
“Milk production is
starting to slow down, but
it’s still positive,” he said.
He expects some neg-
ative production in 2019,
saying the situation is going
to be “messy.”
Carol Ryan Dumas/Capital Press
Rick Naerebout, left, CEO of Idaho Dairymen’s Association, talks with producer Gary Hansen
during the University of Idaho outlook seminar in Burley on Dec. 12.
The most bullish U.S.
forecast puts next year’s
average prices at $1.60 a
pound for block cheese,
$0.40 for whey, $2.12 for
butter and $0.98 for nonfat
dry milk.
It looks like U.S. prices
will have some premiums
over world markets, so it
might knock out some milk
production in other coun-
tries, he said.
Class IV milk in federal
marketing orders is fore-
cast at $15.20 per hundred-
weight, and Class III is fore-
cast at $15.67.
Idaho doesn’t belong to a
federal order, however, and
milk prices are generally $1
a hundredweight lower, he
said.
“We’ve got excess milk
in Idaho, 1.5 to 2 million
pounds a day,” he said.
Low milk prices are
painful, but if Idaho is still
producing excess at that
price, it’s not sending the
right message, he said.
On average, Idaho loses
about 15 dairies a year, but
it’s had some significant
dispersal sales due to lost
markets, he said.
“We’ve never seen that
before. It’s only the last
two years we’ve seen herds
go out of business because
there’s nowhere to sell
milk,” he said.
There had always been
a home for all of Idaho’s
milk, but now there isn’t, he
said.
About 20 processors
operate in Idaho, and the top
10 process 90 percent of the
milk produced in the state.
Leading the way are Glan-
bia and Jerome Cheese,
which process half of the
state’s milk at a combined
20 million pounds a day, he
said.
There was a lot of excite-
ment when Chobani came
to Idaho and was citing a
need for 6 million to 8 mil-
lion pounds of milk a day.
But that anticipated need
turned out to be 2.5 million
pounds a day, he said.
IDA is working with the
state, cities and economic
development organizations
to bring more processors to
Idaho. Those entities rec-
ognize the dairy industry is
a steady economic driver.
Idaho produces high-quality
milk at competitive prices,
and there’s pent up desire
in the industry to grow, he
said.
From a natural resources
perspective, Idaho has
room for another 75,000
to 100,000 cows. But first,
it needs more processing
capacity, he said.
Fish and Wildlife director: Agency must earn ranchers’ trust
By MATTHEW WEAVER
Capital Press
COLVILLE,
Wash.
— The new director of
the Washington Depart-
ment of Fish and Wildlife
says his agency needs to
rebuild trust with the state’s
ranchers.
Kelly Susewind, who
took over leadership of the
department four months
ago, spoke to ranchers and
hunters Dec. 8 during a
public meeting in Colville,
Wash. It was Susewind’s
fourth visit to the area since
taking over the position.
Susewind
said
the
department is committed to
working with local teams
on wolves.
“You don’t have to be
a rocket scientist to real-
ize we don’t have your
trust,” he told the audience.
“That’s one of my main
objectives, to get that back.
I can’t just promise it, I’ve
got to earn it. It’s going to
take time.”
About
60
people
attended the meeting.
Susewind told ranchers
the department is subject to
legislative action driven by
the largest source of votes.
“That’s the absolute
worst way in the world to
manage wildlife, is public
sentiment, especially pub-
lic that’s voting on stuff
that’s happening not in
their backyard,” he said.
“Sometimes people would
like me to get a little more
aggressive; I’m trying to
make sure I manage it so
we keep control and then I
own the decisions.”
The department ran out
of money
for range
riders,
has spent
$150,000
more than
budgeted,
Kelly
and
is
Susewind
working
with legis-
lators to keep the program
running.
If they don’t come
through with more funding,
he’ll finish the biennium in
the hole, he said.
“That’s a bad first step
out of the gate for a new
director, but we’re serious
about providing the protec-
tion,” he said.
When an audience
member told him he needed
to do something to improve
hunting licenses to help the
department budget, Susew-
ind replied, “I’ll give you
four months, ready, set, go
fix things,” to laughter in
the room.
He hears their concerns
and is working on them, he
said.
“I can’t offer more than
that right now, today,” he
said. “I’m hoping to be back
here next year with some
more concrete moves we’ve
made and improvements.”
Susewind and wolf pol-
icy lead Donny Martorello
fielded questions for two
hours.
Martorello said ranchers
have shared with him the
seen and unseen impacts of
livestock deaths, including
reduced pregnancy rates,
weight loss and lost calves.
The department is falling
short, he said.
“When I took this job
... that’s not the goalpost I
was aiming for,” he said.
“We’re way off. We’ve got
to do a better job. If I knew
what that was, I would do
it instantly, and I don’t.
When it comes to remov-
ing wolves, it’s harder than
I thought it was.”
The agency officials met
earlier in the day with Cat-
tle Producers of Washing-
ton and Stevens County
Cattlemen.
Kettle Falls rancher
Scott Nielsen, president
of both organizations, said
Susewind and Martorello
need to hear ranchers’ per-
spectives first-hand.
DAIRY
MARKETS
Lee Mielke
Dairy
prices
strengthen
By LEE MIELKE
For the Capital Press
D
airy prices strength-
ened the second
week of December
as traders awaited the last
Global Dairy Trade auc-
tion of 2018 on Tuesday,
plus Wednesday afternoon’s
November Milk Production
report.
Cheddar block cheese,
after falling to $1.33 per
pound last Monday, lowest
CME level since May, 2016,
rallied and closed Friday at
$1.4075, up 5 3/4-cents on
the week but 12 1/4-cents
below a year ago. The bar-
rels finished at $1.31, up 8
3/4-cents on the week and
35 cents below a year ago.
Five cars of block were sold
on the week and 27 of barrel.
The blocks inched up a
quarter-cent Monday and
stayed there Tuesday at
$1.41. The barrels were
up a penny Monday, hit-
ting $1.32, and held there
Tuesday, 9 cents below the
blocks.
Demand reports are on
the slower side ahead of
the end-of-year holidays,
says Dairy Market News,
though cheese output saw
some upticks. The spot milk
price range widened from
$3 under to $2.50 over Class
III. Some plant managers
suggest production upticks
will last until the last week
of December, then drop off
through Jan. 1. Midwestern
cheese inventories are gen-
erally heavy, but some man-
agers relay that their stocks
are intentionally “scant.”
Cheese markets are far from
healthy, says DMN.
Cheese production is
very active in the West with
most facilities at full capac-
ity or close to it. Inventories
surpass demand but end of
the year buying interest is
stable to up a bit. The low
price trends are enhancing
sales but buyers are closely
monitoring prices and lim-
iting purchases as they
have enough inventory. The
U.S. market tone is weaker,
but remains competitive,
according to DMN.
Butter fell to $2.1750 per
pound last Thursday, low-
est CME price since July 6,
2018, but closed Friday at
$2.19, still 1 3/4-cents lower
on the week and 5 1/2-cents
below a year ago. Only 1
sale was reported last week.
The butter was down
a half-cent Monday but
gained a penny and a half
Tuesday, hitting $2.20, with
7 cars trading hands.
Churns have begun to
run actively in the Central
region, according to DMN.
“As cream prices continue
their seasonal declivity,
butter plants are building
stocks for the spring holiday
demand push early in 2019.”
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