Cheese prices still climbing
Cash block Cheddar cheese closed Valentine week at a slightly more romantic $1.54 per pound, up 3 cents on the week but 4 cents below a year ago. The barrels closed at $1.48, up 12 cents on the week and 14 cents below a year ago, with 13 cars of block trading places and 38 of barrel.
The markets were closed Monday for President’s Day and, after traders absorbed Tuesday morning’s Global Dairy Trade auction and anticipated Wednesday afternoon’s January Milk Production report, took the blocks up a half-cent, to $1.5450, while the barrels inched a quarter-cent higher, to $1.4825, 6 1/4-cents below the blocks.
Midwest cheese makers are reporting some positive trends in cheese demand, according to Dairy Market News. “Barrel sellers have reported that inventories are limited, and buyers searching for loads produced as recently as early 2018 are out of luck.” Cheddar demand, along with Cheddar inventories, vary from plant to plant. Spot milk into cheese production was widely available, as it has been most of the year and spot milk prices ranged from flat to $3 under Class III.
Cheese makers in the West report relatively steady domestic demand. Although a few manufacturers have seen the typical seasonal slowdown of orders for finished goods, overall, cheese is moving without a lot of discounting. Higher cheese prices in the EU and Oceania are helping generate good sales opportunities in some international markets. Cheese production is active while there is an abundance of milk. Cheese inventories are generally heavy.
Butter had a better week after dipping to the lowest price since November 2016 the previous week. It climbed to $2.15 per pound Thursday but lost a nickel Friday to close at $2.10, still up 7 1/4-cents on the week but 5 3/4-cents below a year ago, with a whopping 72 cars unloaded last week, 32 on Friday alone.
The butter jumped 4 cents Tuesday on 14 trades and hit $2.14 per pound.
DMN says butter interest is trending up throughout the Central region. Current prices have garnered the attention of buyers, as butter producers report steady to increased sales this week. Cream remains available for butter churning, although there are some reports that cream suppliers are not offering as much.
Cash Grade A nonfat dry milk finished Friday at 70 1/2-cents per pound, down 3 cents, and 16 1/2-cents below a year ago.
The powder dropped 21/4-cents Tuesday and dipped to 68 1/4-cents per pound.
The CME will launch a spot dry whey contract starting March 12. HighGround Dairy says it’s “excited for the dairy industry to have a daily view at dry whey prices that we believe will accelerate participation in futures and options contracts as it did for NFDM a few years ago.”
Red ink returned to Tuesday’s Global Dairy Trade auction, Event number 206, where the weighted average of all products offered inched back 0.5 percent, following the 5.9 percent upshot on Feb. 6 and 4.9 percent on Jan. 16. The quantity sold slipped to 44.7 million pounds, down from 48.9 million in the last event.
The losses were led by skim milk powder, down 3.0 percent, following a 7.2 percent increase on Feb. 6. Anhydrous milkfat was down 1.9 percent, after inching up 0.5 percent last time, and GDT Cheddar was down 1.3 percent after posting a 7.2 percent gain.
Butter was up 1.1 percent following a hefty 7.9 percent increase last time and rennet casein inched up 0.7 percent, after it jumped 5 percent in the last event.
FC Stone equates the GDT 80 percent butterfat butter price to $2.3606 per pound U.S. CME butter closed Tuesday at $2.14. GDT Cheddar cheese equated to $1.6721 per pound U.S., and compares to Tuesday’s CME block Cheddar at $1.5450. GDT skim milk powder averaged 83.10 cents per pound U.S. and whole milk powder averaged $1.4724. CME Grade A nonfat dry milk price closed Tuesday at 68 1/4-cents per pound.
Calif. Class I down
The California Department of Food and Agriculture announced its March Class I milk price at $15.20 per hundredweight for the north and $15.47 for the south. Both are down 27 cents from February and $3.42 below March 2017.
The three-month average stands at $15.58 for the north, down from $18.51 at this time a year ago and compares to $16.08 in 2016. The southern average, at $15.85, is down from $18.78 a year ago and $16.35 in 2016.