Dairy Market: Benchmark price up 92 cents
The USDA announced the April Federal order Class III benchmark milk price at $15.96 per hundredweight, up 92 cents from March, $1.49 above April 2018, and the highest Class III price since September 2018.
That put the four-month average at $14.71, up from $14.02 a year ago and compares to $16.17 in 2017.
Monday’s Class III futures settlements portended a May price of $16.50; June, $16.62; July, $16.80; and August at $17.09, with a peak of $17.24 in September.
The Class IV price is $15.72, up a penny from March, $2.24 above a year ago, and the highest April Class IV since 2014. The Class IV average now stands at $15.69, up from $13.13 a year ago and $15.03 in 2017.
California’s 4b cheese milk price was $14.27 in April 2018, 20 cents below the FO Class III price a year ago, and its 4a butter powder price was $13.29.
GDT inches up
Tuesday’s Global Dairy Trade auction registered its 11th consecutive session of gain and while slowing the trajectory, extended the longest run of gain since the GDT began in 2008.
The weighted average of products offered inched 0.4% higher, following a 0.5% increase on April 16, 0.8% on April 2. Sellers brought 33.9 million pounds of product to the market, down from 35.6 million pounds on April 16.
The gains were led by rennet casein, up 3.1%. Skim milk powder was up 2.8%, following a 0.2% gain on April 16, and anhydrous milkfat was up 1.4%, after it jumped 4.2% last time.
The losses were led by buttermilk powder, down 10.3%. Lactose was down 2.7%; Cheddar cheese was down 2.4%; and whole milk powder was down 0.5%.
Butter was unchanged, after jumping 3.5% in the last event.
FC Stone equates the GDT 80% butterfat butter price to $2.4275 per pound U.S., down slightly from the last session. CME butter closed Tuesday at $2.2950.
GDT Cheddar cheese equated to $1.9130 per pound, down 4.6 cents from the last event and compares to Tuesday’s CME block Cheddar at $1.7075. GDT skim milk powder averaged $1.1436 per pound, and compares to $1.1169 last time.
Whole milk powder averaged $1.4737, down from $1.4829 last time. CME Grade A nonfat dry milk closed Tuesday at $1.06 per pound.
Less milk, less product
Preliminary data showed March 50-State milk output at 18.9 billion pounds, down 0.4% from March 2018 and that was evidenced in the May 2 Dairy Products report, which pegged March cheese output at 1.1 billion pounds, up 11% from February but 0.7% below March 2018. Year-to-date cheese output is at 3.2 billion pounds, down 0.3% from a year ago.
Wisconsin contributed 293.3 million pounds of cheese to the March total, up 12.4% percent from February but 0.7% below a year ago. California produced 209.1 million pounds, up 4.1% from February but 3.1% below a year ago. Idaho contributed 89.7 million pounds, up 25.4% from February and 4.2% above a year ago.
Italian cheese totaled 483.5 million pounds, up 9.6% from February and 0.1% above a year ago. YTD Italian stands at 1.4 billion pounds, up 1.4%.
Mozzarella, at 378 million pounds, was up 1.4% from a year ago, with YTD at 1.1 billion pounds, up 3.6%.
American type cheese totaled 435.1 million pounds, up 11.3% from February but 1.8% below a year ago, with YTD at 1.27 billion pounds, down 2.5%.
Cheddar, the cheese traded daily at the CME, totaled 309.9 million pounds, up 29.1 million pounds or 10.4% percent from February but 10.4 million pounds or 3.2% below a year ago. YTD Cheddar hit 913.9 million pounds, down 4.2%.
U.S. churns gave us 174.8 million pounds of butter, up 10.3 million pounds or 6.3% from February but 7 million pounds or 3.9% below a year ago. YTD butter is at 529 million pounds, down 0.5% from this time in 2018.
Yogurt output, at 398.6 million pounds, was up 2.2% from a year ago, with YTD at 1.1 billion pounds, down 1.3%.
Dry whey totaled 78.4 million pounds, down 14.2%, with YTD whey at 234.6 million pounds, down 13.6%. Stocks totaled 80.2 million pounds, up 5.5% from February and 16.3% above those a year ago.
Nonfat dry milk production totaled 163.7 million pounds, up 6.4% from February but 8.0% below a year ago. YTD powder is at 490.2 million pounds, down 0.8%. Stocks fell to 288.8 million pounds, down 21.6 million pounds or 7% from February and 8.5 million pounds or 2.9% below the 2018 level.
Skim milk powder totaled 49.6 million pounds, up a whopping 39.2% from February and 17.9% above a year ago. YTD skim hit 125 million pounds, up 0.7% from a year ago.
Traders liked what they saw in the March Dairy Products report. CME block Cheddar, after slipping to $1.6550 per pound last Thursday, jumped 2 cents Friday to $1.6750, down a penny on the week but a penny above a year ago.
The barrels, after holding at $1.63 for five consecutive sessions, shot up 3 1/4-cents Friday to $1.6625, up 3 1/4 cents on the week and 6 1/4-cents above a year ago.
Twenty-five cars of block changed hands on the week, 22 on Friday alone, the largest single day trade since March 24, 2011, and 57 cars for the month of April; 25 cars of barrel were sold last week and 100 in the month.
Monday’s trading took the blocks up 2 1/2-cents and the barrels were up 3 3/4-cents, both hitting $1.70 per pound. The blocks were up three-quarters Tuesday to $1.7075, the highest level since March 28, while the barrels jumped 4 cents, to $1.74, the highest price since Nov. 10, 2017.
Milk remains available for cheesemakers in the Midwest, according to Dairy Market News, but not at the discounts it has seen in spring flushes of the past. Cheese demand reports remain mixed, with some cheesemakers seeing improved sales throughout April and expect similar results for May. Others say orders are slow and point to plentiful supplies as a bearish pull on orders. DMN says “market tones are maintaining that bullish push from early in the year.”
Western cheese inventories are above what buyers need but are “manageable.” Milk output is plentiful and cheese production is active. International sales are “fair.”
Butter closed Friday at $2.2725 per pound, up a quarter-cent on the week but 8 cents below a year ago, with 25 sales on the week, 52 for the month of April.
The butter gained a penny Monday and tacked on 1 1/4-cents Tuesday, hitting $2.2950, highest since early March.
Cream is still headed for Midwestern churns but plant managers say current prices are nearing their limit and intakes have begun to ebb. Some are finding cream from the West.
Western butter makers relay that cream, although available, is somewhat tighter and surmise that ice cream manufacturers are taking the extra loads. Butter manufacturing is steady and butter stocks are building.
Grade A nonfat dry milk saw a Friday close at $1.0525 per pound, up 1 1/4-cents on the week and 21 cents above a year ago; 11 cars found new homes on the week, 33 for April.
The nonfat market was unchanged Monday but gained three-quarters Tuesday, arriving at $1.06 per pound, highest since Oct. 6, 2015.
Dry whey closed Friday at 34 3/4-cents per pound, up 2 cents on the week and 3 cents above a year ago on 10 reported sales for the week; 80 for the month.
Whey was unchanged Monday and Tuesday.
Milk-feed ratio up
A higher U.S. All Milk price average served to push the March milk-feed price ratio higher for the third consecutive month. The Agriculture Department’s latest Ag Prices report marks the March ratio at 2.14, up from 2.07 in February and tops the 1.09 in March 2018, the second month to top the previous year since October 2017.
The U.S. All-Milk price averaged $17.50 per hundredweight, up 70 cents from February and $1.80 above March 2018.
The national average corn price averaged $3.61 per bushel, up a penny from February and 10 cents per bushel above March 2018. Soybeans averaged $8.52 per bushel, unchanged from February but $1.29 per bushel below a year ago. Alfalfa hay averaged $184 per ton, up $4 from February and $19 per ton above a year ago.
The March cull price for beef and dairy combined posted another increase, averaging $62.80 per cwt., up $3.90 from February, following a $4.70 gain last month, but is $6.10 below March 2018 and $8.80 below the 2011 base average of $71.60 per cwt.
Milk cows averaged $1,140 per head in April, unchanged from January 2019, but $220 below April 2018.
The U.S. milk-over-feed margin climbed 64 cents above February’s margin to $8.85 per cwt. based on the Dairy Margin Coverage Program calculation, “making it the largest margin since last October,” according to the Daily Dairy Report, “and $2.09 higher than March 2018’s pathetic $6.77.”