WEBVTT
00:00:12.000 --> 00:00:13.919
Hey everybody, welcome to ChatBDC.
00:00:14.000 --> 00:00:17.600
Here's the top stories from Blackyard Daily today, which is Tuesday, October 20th.
00:00:17.679 --> 00:00:27.519
Today we're gonna talk about a bullish ride in dairy markets, a deeper dive into the herd rebuild and the impact the El Nino may have on planting next spring.
00:00:27.679 --> 00:00:29.120
So let's get to it.
00:00:29.440 --> 00:00:39.520
Starting off in dairy markets with a report from TC Jacoby after dipping to multi-year lows in recent weeks, both cheese and butter spot values found traction at the CME.
00:00:39.759 --> 00:00:44.000
Meanwhile, dry whey continued its upward campaign, rising to record highs.
00:00:44.159 --> 00:00:50.640
Only non-fat dry milk prices retreated, though they remain very strong compared to historical standards.
00:00:50.880 --> 00:00:59.840
Despite the overall bullish moves this week, several fundamental factors are still casting a shadow over the markets and may push back on prices in the near future.
00:01:00.159 --> 00:01:07.519
Most importantly, milk production remains plentiful, while the rate of growth appears to be slowing amid mounting profitability pressures.
00:01:07.840 --> 00:01:11.840
The national dairy herd is still at its largest size since the 90s.
00:01:12.000 --> 00:01:12.799
Growth in the U.S.
00:01:12.959 --> 00:01:24.319
has echoed across the world as cumulative output across the top five global dairy exporters was up 2.9% between January and August of this year.
00:01:24.879 --> 00:01:28.560
On the demand side, new inflation data this week suggests that the U.S.
00:01:28.719 --> 00:01:31.200
consumer remains under significant pressure.
00:01:31.439 --> 00:01:38.400
Headline inflation rose 3.7% in September, which was higher than many analysts' predictions.
00:01:38.799 --> 00:01:47.120
Expensive fuel continues to drive the increase in the consumer price index, with gasoline prices rising 9.1% for the month.
00:01:47.439 --> 00:01:58.719
Food prices rose less than overall inflation, but as consumers deal with higher gas prices, they're likely to adjust their eating behavior, specifically by visiting restaurants less frequently.
00:01:59.040 --> 00:02:06.319
Price of food consumed outside the home rose 3.5% in September, while grocery prices were up a more modest 1.8%.
00:02:07.439 --> 00:02:14.560
As consumers eschew eating out, the consequences are likely to weigh more heavily on certain product categories.
00:02:14.879 --> 00:02:24.879
Cheese in particular appears to be suffering from such consumer shifts as domestic consumption slipped to half a percent year over year in August, according to USDA data.
00:02:25.199 --> 00:02:29.919
Check out the rest of this report through the link on BlackDirtDaily.com.
00:02:30.879 --> 00:02:40.159
Switching over to cattle markets, when the beef cow herd will actually begin to rebuild is the million-dollar question facing beef producers across the country.
00:02:40.400 --> 00:02:52.479
Recent survey findings from Drover State of the Beef Industry report reveal 55% of producers plan to grow the herd size over the next five years, which is an 8% jump compared to last year.
00:02:52.719 --> 00:03:03.360
Josh Maples with Mississippi State University Extension said on the first I'm a Drover's podcast that the survey number reflects that there's a clear desire to grow the beef cow herd.
00:03:03.680 --> 00:03:09.039
Sometimes desires and intentions don't always work out the way we want them to, unfortunately.
00:03:09.280 --> 00:03:15.120
Maple says many producers are not only now shaking off several consecutive tight margin years.
00:03:15.280 --> 00:03:24.159
Rather than immediately pouring cash into herd expansion, recent profits were spent recovering equity and upgrading long neglected infrastructure.
00:03:24.400 --> 00:03:29.759
Compounding the hesitation is the historical memory of past boom and bust cycles.
00:03:30.879 --> 00:03:42.159
Maple says a lot of producers remember how quickly prices went up and then came right back down in 2014 and 2015, which may help drive the fact that we haven't really started expanding.
00:03:42.400 --> 00:03:47.120
There's no single price that makes retaining a heifer the right choice for every farm or ranch.
00:03:47.360 --> 00:03:58.080
Maple says producers should compare the value of a heifer calf they could sell with the cost of buying a bread heifer and account for how quickly each option could contribute to the herd.
00:03:58.400 --> 00:04:05.439
With higher beef calf values near historical highs, producers are left calculating opportunity cost down to the penny.
00:04:06.639 --> 00:04:13.520
There's a lot more to this story, and I encourage everybody to check it out through the link on our website.
00:04:14.159 --> 00:04:28.319
Finishing up, looking ahead to next year's crop, the National Oceanic and Atmospheric Administration's winter weather outlook is out, and with the strengthening El Nino pattern ahead, agencies' data points to the strongest El Nino on record.
00:04:28.560 --> 00:04:39.279
As forecasters outline what it means for your region, the system is continuing to intensify and will reach its peak over the winter months, putting it outside the heart of the growing season.
00:04:39.519 --> 00:04:45.759
However, it will still be a double-edged sword for agriculture this winter and heading it into the spring.
00:04:46.160 --> 00:04:57.519
El Nino conditions continue to strengthen in the Pacific, according to forecasters, with well above normal ocean temperatures present from just east of the date line to the South American coast.
00:04:57.839 --> 00:05:03.839
The greatest impact from El Nino will take place starting in October, lasting through April or May.
00:05:04.079 --> 00:05:11.360
This looks like drought busting in those areas that have been dry over the past several months, along with a more temperate winter in the northern U.S.
00:05:11.920 --> 00:05:15.040
with less snow and fewer days of freezing temperatures.
00:05:15.199 --> 00:05:17.839
That's something that I can support, by the way.
00:05:18.160 --> 00:05:25.759
El Nino is expected to peak at the tail end of 2026 or the first weeks of 2027.
00:05:26.639 --> 00:05:27.680
Well, that's all for now.
00:05:27.759 --> 00:05:28.959
As always, thanks for tuning in.
00:05:29.040 --> 00:05:30.879
If you found it useful, drop me a comment.
00:05:31.040 --> 00:05:38.319
Be sure to check out BlackDirtDaily.com, the full stories behind these topics, and don't forget to sign up for the Black Dirt Daily newsletter.
00:05:38.560 --> 00:05:42.160
I'll be back tomorrow with more business news and cross tag in financial markets.
00:05:42.319 --> 00:05:45.439
Until then, I'm Mike Opperman, and goodbye for now.
00:00:12.000 --> 00:00:13.919
Hey everybody, welcome to ChatBDC.
00:00:14.000 --> 00:00:17.600
Here's the top stories from Blackyard Daily today, which is Tuesday, October 20th.
00:00:17.679 --> 00:00:27.519
Today we're gonna talk about a bullish ride in dairy markets, a deeper dive into the herd rebuild and the impact the El Nino may have on planting next spring.
00:00:27.679 --> 00:00:29.120
So let's get to it.
00:00:29.440 --> 00:00:39.520
Starting off in dairy markets with a report from TC Jacoby after dipping to multi-year lows in recent weeks, both cheese and butter spot values found traction at the CME.
00:00:39.759 --> 00:00:44.000
Meanwhile, dry whey continued its upward campaign, rising to record highs.
00:00:44.159 --> 00:00:50.640
Only non-fat dry milk prices retreated, though they remain very strong compared to historical standards.
00:00:50.880 --> 00:00:59.840
Despite the overall bullish moves this week, several fundamental factors are still casting a shadow over the markets and may push back on prices in the near future.
00:01:00.159 --> 00:01:07.519
Most importantly, milk production remains plentiful, while the rate of growth appears to be slowing amid mounting profitability pressures.
00:01:07.840 --> 00:01:11.840
The national dairy herd is still at its largest size since the 90s.
00:01:12.000 --> 00:01:12.799
Growth in the U.S.
00:01:12.959 --> 00:01:24.319
has echoed across the world as cumulative output across the top five global dairy exporters was up 2.9% between January and August of this year.
00:01:24.879 --> 00:01:28.560
On the demand side, new inflation data this week suggests that the U.S.
00:01:28.719 --> 00:01:31.200
consumer remains under significant pressure.
00:01:31.439 --> 00:01:38.400
Headline inflation rose 3.7% in September, which was higher than many analysts' predictions.
00:01:38.799 --> 00:01:47.120
Expensive fuel continues to drive the increase in the consumer price index, with gasoline prices rising 9.1% for the month.
00:01:47.439 --> 00:01:58.719
Food prices rose less than overall inflation, but as consumers deal with higher gas prices, they're likely to adjust their eating behavior, specifically by visiting restaurants less frequently.
00:01:59.040 --> 00:02:06.319
Price of food consumed outside the home rose 3.5% in September, while grocery prices were up a more modest 1.8%.
00:02:07.439 --> 00:02:14.560
As consumers eschew eating out, the consequences are likely to weigh more heavily on certain product categories.
00:02:14.879 --> 00:02:24.879
Cheese in particular appears to be suffering from such consumer shifts as domestic consumption slipped to half a percent year over year in August, according to USDA data.
00:02:25.199 --> 00:02:29.919
Check out the rest of this report through the link on BlackDirtDaily.com.
00:02:30.879 --> 00:02:40.159
Switching over to cattle markets, when the beef cow herd will actually begin to rebuild is the million-dollar question facing beef producers across the country.
00:02:40.400 --> 00:02:52.479
Recent survey findings from Drover State of the Beef Industry report reveal 55% of producers plan to grow the herd size over the next five years, which is an 8% jump compared to last year.
00:02:52.719 --> 00:03:03.360
Josh Maples with Mississippi State University Extension said on the first I'm a Drover's podcast that the survey number reflects that there's a clear desire to grow the beef cow herd.
00:03:03.680 --> 00:03:09.039
Sometimes desires and intentions don't always work out the way we want them to, unfortunately.
00:03:09.280 --> 00:03:15.120
Maple says many producers are not only now shaking off several consecutive tight margin years.
00:03:15.280 --> 00:03:24.159
Rather than immediately pouring cash into herd expansion, recent profits were spent recovering equity and upgrading long neglected infrastructure.
00:03:24.400 --> 00:03:29.759
Compounding the hesitation is the historical memory of past boom and bust cycles.
00:03:30.879 --> 00:03:42.159
Maple says a lot of producers remember how quickly prices went up and then came right back down in 2014 and 2015, which may help drive the fact that we haven't really started expanding.
00:03:42.400 --> 00:03:47.120
There's no single price that makes retaining a heifer the right choice for every farm or ranch.
00:03:47.360 --> 00:03:58.080
Maple says producers should compare the value of a heifer calf they could sell with the cost of buying a bread heifer and account for how quickly each option could contribute to the herd.
00:03:58.400 --> 00:04:05.439
With higher beef calf values near historical highs, producers are left calculating opportunity cost down to the penny.
00:04:06.639 --> 00:04:13.520
There's a lot more to this story, and I encourage everybody to check it out through the link on our website.
00:04:14.159 --> 00:04:28.319
Finishing up, looking ahead to next year's crop, the National Oceanic and Atmospheric Administration's winter weather outlook is out, and with the strengthening El Nino pattern ahead, agencies' data points to the strongest El Nino on record.
00:04:28.560 --> 00:04:39.279
As forecasters outline what it means for your region, the system is continuing to intensify and will reach its peak over the winter months, putting it outside the heart of the growing season.
00:04:39.519 --> 00:04:45.759
However, it will still be a double-edged sword for agriculture this winter and heading it into the spring.
00:04:46.160 --> 00:04:57.519
El Nino conditions continue to strengthen in the Pacific, according to forecasters, with well above normal ocean temperatures present from just east of the date line to the South American coast.
00:04:57.839 --> 00:05:03.839
The greatest impact from El Nino will take place starting in October, lasting through April or May.
00:05:04.079 --> 00:05:11.360
This looks like drought busting in those areas that have been dry over the past several months, along with a more temperate winter in the northern U.S.
00:05:11.920 --> 00:05:15.040
with less snow and fewer days of freezing temperatures.
00:05:15.199 --> 00:05:17.839
That's something that I can support, by the way.
00:05:18.160 --> 00:05:25.759
El Nino is expected to peak at the tail end of 2026 or the first weeks of 2027.
00:05:26.639 --> 00:05:27.680
Well, that's all for now.
00:05:27.759 --> 00:05:28.959
As always, thanks for tuning in.
00:05:29.040 --> 00:05:30.879
If you found it useful, drop me a comment.
00:05:31.040 --> 00:05:38.319
Be sure to check out BlackDirtDaily.com, the full stories behind these topics, and don't forget to sign up for the Black Dirt Daily newsletter.
00:05:38.560 --> 00:05:42.160
I'll be back tomorrow with more business news and cross tag in financial markets.
00:05:42.319 --> 00:05:45.439
Until then, I'm Mike Opperman, and goodbye for now.
