Dairy Supply Tightens, New World Screwworm Subsides, Corn and Soybean Storage Options

Today we start with a look at dairy supply and how that's starting to tighten, then switch to an update on new world screwworm. We finish with a look at options for corn and soybean storage. 

Transcript

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Hey and welcome to Champ EDC. Here's the top stories from Blackbeard Daily Today. It's Monday, August 1st. Hello and welcome to Champ EDC. Here's the top stories from Blackbeard Daily Today. It's Monday, August 3rd. Today we're gonna focus on a tighter milk supply. New World Screw Worm Update and the difference between corn and soybean storage opportunities. So let's get to it. Starting off, the report from TC Jacoby milk is starting to feel tight. Summer temperatures have reduced milk yields. USTA reports that some plants are noting lighter production with insufficient supply to run full loads. For example, Fairlife is once again taking as much milk as possible, alleviating the temporary surge in spot milk sales. This week, spot milk changed hands at $1 to $5 premiums in the central region, the loftiest late July markups in at least a decade. Still, by all accounts, milk production remains record-large. Dairy cow headcounts stand at their highest level in decades. Despite the season, processors are dumping some milk in California where production has overwhelmed local capacity. But elsewhere, there are more than enough cheese vats, butter churns, and dryers to absorb summer milk volumes. However, processors are making more dairy products than domestic consumers can absorb, putting pressure on prices. American dairy commodities must remain cheap enough to attract international buyers. As we look elsewhere, competition is fierce. Kiwi dairy producers just wrapped up a record-breaking season, and the 2026-27 milking cycle is off to a great start. New Zealand's milk collections reached 25.4 million kilograms of milk solids in June, up 5.6% from a year ago and the highest volume ever for the month. It's easy to log large percentage swings during June and July, the clear off season in New Zealand's largely pasture-based dairy system, and dairy producers are eyeing the forecast warily as this year's Super El Niño could lead to drought conditions on both islands. For now, though, milk collections are higher than usual and dairy products continue to move out of Oceania in large volumes. In Europe, sweltering conditions have surely reduced milk yields. Nonetheless, USDA's dairy market news reports that EU dairy exports are expected to strengthen through 2026 as higher milk production supports increased availability of cheese, whey, skim milk powder, and butter for international markets, while whole milk powder remains the primary exception. There's a lot more to the report, and you can check it out through a link on BlackDirtDaily.com. Switching over to beef markets, an article from Farm Progress confirmed cases of New World Screwworm in the U.S. have declined sharply over the last 30 days. Through July 30th, USDA confirmed only 12 cases of no New World Screwworm over the past month. That's a far cry from the 31 cases reported in June. According to Ag Secretary Rollins, the fight against screw worm has gone so well it'll soon be safe to resume cattle imports on parts of the U.S. Mexico border. The southern border has been closed for more than a year after screw worm spread spread north through Mexico. So why open the border now? Combating inflation has been one of the Trump administration's stated priorities. Recent polling suggests the public is growing increasingly unhappy with the president's handling of the economy. According to U.S. data, consumer beef prices are more than 11% higher than they were at the same time last year. Much of this can be attributed to record low cattle inventory, and it's hopeful that reopening the border will help at least a little bit with supply issues. One size fits all strategies may work for some. Others must account for individual characteristics or their location, including basis patterns, yields, and end user demand. And what works for corn may be unsuitable for soybeans, doubling the difficulty of the decision. History can provide guidance so the farm future storage strategies study looks back all the way to the 1985 crop. Here are some factors to consider and what the research shows. Should you store on farm or in town? Storing grain on farm is a popular choice for good reasons. On farm soybean storage netted more than the harvest price two of every three years in the study, the most for any of the nine strategies considered for the crop. Storing 2025 soybeans earned 88 cents a bushel, 35 cents better than any other tactic. But no strategy is foolproof. Storing last fall's corn on farm lost 12 cents, and that doesn't include cost for depreciation on facilities, which vary widely from farm to farm. Another factor is selling the carry, the most consistent storage performer for corn, beat the harvest price nearly three of every four years since 1995. Selling July futures to hedge inventory makes money if futures fall or the basis between cash and futures narrows enough. Most years, basis does need indeed improve to persuade farms to open bin doors. Still, futures rose more than cash for 2025 corn, the exception that proves the rule. Selling soybean futures doesn't work as well. On average, that strategy lost a penny compared to the harvest price, though it posted gains in 25 years since 1985. The soybean market doesn't build carry all the way to July because the market wants inventory fairly quickly after harvest before another wave hits the world from South America. There's a lot of other factors to consider that we don't have time to go into here, but you can find out the rest through the link to the article on Black Dirt Daily. That's all for now. As always, thanks for tuning in. If you found it useful, drop a comment, share, tell all your friends. Be sure to check out BlackDirtDaily.com as well for the full story from one of these topics, and don't forget to sign up for the Black Dirt Daily newsletter. I'll be back tomorrow with more business news across the legend financial markets and command on my computer and goodbye for now.