Act now! Lock in low feed prices before they spike. Dairy farmers secure low costs and boost profits. Ready to save?
Summary: The recent dip in corn and soybean prices presents a unique opportunity for dairy farmers to secure favorable feed costs, as market experts Kathleen Noble Wolfley and Bryce Windecker advised, but this window for advantageous feed costs might not stay open for long. Despite the current U.S. grain surplus due to reduced exports and a strong growing season, a robust cotton crop in Texas could further ease feed prices for Northeastern farmers by lowerng competition for cottonseed. With various market dynamics, including potential international tariffs and increasing soybean crush capacity in North America, dairy farmers are encouraged to act swiftly. This combination of low feed costs and high milk prices is rare and should be leveraged to maximize profitability, with feed costs at their lowest point since 2020.
- Current corn and soybean prices are among the lowest since 2020, offering dairy farmers favorable feed costs.
- Market advisers Kathleen Noble Wolfley and Bryce Windecker emphasize the importance of locking in these prices soon.
- Reduced competition for cottonseed from Texas’s strong cotton crop could ease feed prices for Northeastern farmers.
- U.S. grain exports are behind the five-year average, increasing the domestic grain surplus.
- Potential international tariffs and the U.S. increasing soybean crush capacity could impact future feed prices.
- Farmers are encouraged to act swiftly as low feed costs and high milk prices may not last long.
Feed costs are now at their lowest point since 2020, creating an excellent opportunity for livestock producers and dairies. But here’s the catch: cheap prices seldom last long. Are you prepared to take advantage of these great prices before they disappear? Kathleen Noble Wolfley and Bryce Windecker are from Ever.Ag. During a recent Dairy Excellence webinar, they advised farmers to lock in these low prices now, citing possible future increases. “We’re the best buy, so we’re going to get quite a bit of looks here over the next month and into harvest,” adds Windecker, emphasizing the urgency.
| Commodity | Current Price (per bushel) | Price in 2020 (per bushel) | % Change |
|---|---|---|---|
| Corn | $5.00 | $3.60 | +38.9% |
| Soybeans | $12.50 | $9.00 | +38.9% |
| Cottonseed | $245 | $180 | +36.1% |
Seize the Moment: Corn and Soybean Prices Hit Record Lows
Feed costs are now advantageous for dairy producers, with significant decreases in maize and soybean prices. Crops benefit from ideal growing conditions outside the Mid-Atlantic, resulting in high yields. Corn futures, for example, have fallen to their lowest level since 2020, while soybeans seem to be in good shape as they approach the critical pod-filling stage. This environment offers dairies a unique chance to get feed at a lesser cost.
Experts Speak: Lock In Low Feed Costs While You Can!
Kathleen Noble Wolfley and Bryce Windecker, two well-known dairy market experts, are market consultants at Ever. Ag. In a recent call with the Center for Dairy Excellence on August 9, they discussed current feed pricing patterns and provided farmers with strategic guidance. According to Wolfley and Windecker, the most striking change in the feed markets is the favorable price for dairy and other animal producers. Corn and soybean prices have reached their lowest levels since 2020. This price decline provides a rare chance for dairy producers to lock in these low prices.
Wolfley noted the severe circumstances of the US corn harvest and the favorable soybean forecast, implying that Midwestern grain farmers had a successful growing season. Furthermore, healthy cotton production in Texas may minimize competition for cottonseed among Northeastern producers. Windecker said that although U.S. grain exports are below the five-year average, this might maintain more grain in the local market, further stabilizing feed prices. He also recommended that dairy producers take advantage of the current opportunity to record feed expenses, particularly between October and March, to protect against future market volatility.
Wolfley and Windecker agree that now is the time to take advantage of low feed costs. With low feed costs and high milk prices, this combination is unlikely to remain long, so producers must make educated choices quickly.
Don’t Miss Out: Corn and Soybean Markets Are Offering Dairy Farmers a Golden Opportunity
The corn and soybean markets now display a positive trend for dairy producers. Corn and soybean prices have fallen recently, with December futures at their lowest levels since 2020. This price decline might be ascribed to the excellent health of the US corn crop, which is expected to provide robust yields across most areas.
Soybeans are still at the critical pod-filling stage, but the general picture remains strong. “Midwestern grain growers probably couldn’t have asked for a better growing season,” said Kathleen Noble Wolfley. This remark highlights the favorable conditions that might help dairy producers maintain or lower feed prices.
Thriving Cotton Crop in Texas: A Boon for Northeastern Dairy Farmers
Now, let’s speak about cottonseed. This year’s cotton harvest is doing well, especially in Texas. Unlike recent seasons, Texas farmers enjoy significantly better circumstances, which bodes well for the state’s cottonseed harvest. Why should a Northeastern dairy farmer be concerned about what is happening with cotton in Texas? A good Texas harvest benefits farmers more than just the Lone Star State. If Texas sells more cottonseed to purchasers on the West Coast, you, as a Northeastern farmer, will have less competition from the Southeast for this critical feed component. Increased cottonseed supply in the West may relieve pressure on costs and availability in your area. It’s a win-win!
Less Export, More Savings: How Falling U.S. Grain Exports Could Benefit You!
| Grain Type | Export Volume (Millions of Bushels) | Change from Previous Year (%) |
|---|---|---|
| Corn | 1,450 | -10% |
| Soybeans | 1,700 | -8% |
| Wheat | 850 | -12% |
| Barley | 180 | -5% |
| Sorghum | 250 | -15% |
Falling US grain exports may seem like terrible news, but think again. What happens when more grain remains at home? This might result in decreased feed expenses for you. Why? It is all about supply and demand. More grain in the United States improves supply and often lowers costs.
Let us discuss competitiveness. South America is competing with the United States in terms of grain production. This competition influences global markets, which in turn affects local pricing. Interesting, right?
Now, add China to the mix. Geopolitical tensions between the United States and China are well known. These tensions prompted China to seek agricultural supplies from South America. Nevertheless, Chinese importers cannot ignore the competitive pricing pouring down the Mississippi River. This dynamic relationship keeps U.S. grain prices low, which benefits American farmers.
Finally, this complex situation—fewer exports, South American rivalry, and geopolitical influences—presents a unique chance for dairy producers to profit from lower feed prices. It’s a twist of world events that work to your advantage.
Soybean Crushing Boom: What It Means for Mid-Atlantic Dairy Farmers!
| Month | Price per Bushel (USD) | Crush Capacity (Million Metric Tons) | Export Volume (Million Bushels) |
|---|---|---|---|
| September 2023 | $13.20 | 1.75 | 120 |
| October 2023 | $12.90 | 1.78 | 115 |
| November 2023 | $12.70 | 1.80 | 110 |
| December 2023 | $12.60 | 1.82 | 108 |
| January 2024 | $12.50 | 1.85 | 105 |
| February 2024 | $12.40 | 1.88 | 103 |
| March 2024 | $12.30 | 1.90 | 100 |
| April 2024 | $12.20 | 1.92 | 98 |
| May 2024 | $12.10 | 1.95 | 95 |
| June 2024 | $12.00 | 1.97 | 93 |
| July 2024 | $11.90 | 2.00 | 90 |
| August 2024 | $11.80 | 2.03 | 88 |
A promising trend in the soybean market might have far-reaching implications for dairy producers, especially in the Mid-Atlantic area. The United States is expanding its soybean crushing capacity, including new plants in Virginia and Ohio. Canada is also expanding its ability to crush canola. This development is anticipated to lower meal prices in the Mid-Atlantic, assuming that the new capacity is employed to service the local market rather than being diverted for export.
As Kathleen Noble Wolfley points out, the United States is changing its approach, trying to crush soybeans locally and sell processed outputs rather than export raw soybeans. This might result in more competitive costs and more availability of local feed products. However, current market conditions, such as a glut of soybean oil and continuing strikes at Canadian canola processing facilities, may counteract these gains in the near term, affecting meal costs and availability.
Harvest season has arrived, bringing new chances for dairy producers to gain substantially. Bryce Windecker said this year’s crop may provide exceptional feed-buying possibilities. Many farmers still have last year’s crops stockpiled on their properties. As the fresh harvest arrives, they must free up bin space by transferring old and new crops. This grain rush into the market may decrease prices, producing a favorable situation for feed purchasers.
Make the Smart Move: Lock in Your Feed Prices Now for Big Savings!
Locking in feed prices can be a game-changer for your dairy operation, ensuring you get the most bang for your buck. So, what are your options?
- Booking the Whole Price at Once: This strategy simultaneously locks in the whole feed cost, providing simplicity and peace of mind. Setting pricing ahead of time protects your firm from potential market instability. It’s like setting it and forgetting it—no more sleepless nights worried about unexpected price increases!
- Futures Price Contracts: You lock in the futures price and save the basis for later. This method enables you to profit from local market price increases while protecting against worldwide market swings. According to Bryce Windecker, this strategy has experienced a rise in popularity this year. It strikes a balance between risk and return, providing farmers with a price strategy that is both flexible and stable.
Both tactics have advantages, and combining them might offer a strong defense against market volatility. It’s about determining what suits your comfort level and financial objectives. What’s your take? Have you used any of these tactics before?
The Bottom Line
The time is now. With feed costs at an all-time low and milk prices steady, dairy producers are looking for a beautiful opportunity. These favorable circumstances give a unique opportunity to benefit from better profits while maintaining a sound financial foundation. However, as history has shown, such beneficial situations are often temporary. Because the market constantly changes, don’t miss out on locking in these cheap rates while they last. The issue is, will you take this chance before the market shifts?
Learn more:
- Big Milk Checks and Low Feed Costs: A Profitable Summer for Dairy Producers
- Navigating the Waves: Dairy Producers Defy Challenges to Keep Barns Full Amid Soaring Milk Prices and Adverse Conditions
- Why Milk Costs More but Dairy Farmers Earn Less: The Global Dairy Dilemma
