Dairy prices encounter ups and downs
Dairy prices saw more ups and downs the second week of April. The Cheddar blocks finished Friday the 13th at $1.6050 per pound, up a quarter-cent on the week and 13 cents above a year ago. The barrels closed at $1.46, up a penny and 3 1/4-cents above a year ago. Two cars of block were traded at the CME last week and 29 of barrel.
The blocks were unchanged Monday, as the Midwest dug out from a mid-April blizzard, but they jumped 2 1/2-cents Tuesday, to $1.63, lifted perhaps by the morning’s Global Dairy Trade auction. The barrels were also unchanged Monday but gained 2 pennies Tuesday, hitting $1.48, a still too high 15 cents below the blocks.
Cheese demand reports are generally positive from Midwestern producers, according to Dairy Market News. Spot milk remains $2 to $3.50 under class. Some cheesemakers have turned up production and are fortifying with nonfat dry milk (NDM) to alleviate fairly heavy NDM stocks. Some questions arise with contacts regarding the block to barrel price gap, but generally Central contacts view the markets with a bullish eye.
Western cheese output is increasing. Contacts say the spring flush has commenced and cheesemakers have plenty of milk; however, demand has been strong. Inventories are heavy, but not necessarily burdensome at this point.
“However,” warned DMN, “If U.S. and European cheese prices converge, manufacturers worry they may face the ineluctable realization that competition for export sales may become more fierce.”
Spot butter climbed to $2.32 per pound on Monday but slipped 2 cents Thursday and closed Friday at $2.2875, unchanged on the week but 20 cents above a year ago. The week saw 46 cars sold.
Monday’s butter inched back a quarter-cent only to regain three-quarters Tuesday, hitting $2.2925.
Central butter plant managers are receiving more cream offers and butter sales are taking off, both on and off the CME. Some producers suggest there is strong interest from export purchasers in multiple global localities, as butter prices domestically are competitive. Domestic interest is also adequate.
Western butter output is strong. Many states are in the spring flush so abundant milk loads are clearing through Class IV. Butter sales were steady.
Cash Grade A nonfat dry milk closed Friday at 73 1/4-cents per pound, up a half-cent on the week but 11 1/4-cents below a year ago.
The powder was steady Monday but jumped 3 3/4-cents Tuesday, to 77 cents per pound, highest spot price since Oct. 13, 2017.
The spot dry whey closed Friday at 30 1/2-cents per pound, down 1 1/2-cents.
Monday’s whey was unchanged but it inched up a quarter-cent Tuesday, to 30 3/4-cents per pound.
GDT prices up
Global dairy trade spirits got a lift and so did prices in Tuesday’s Global Dairy Trade auction. The weighted average of all products offered shot up 2.7 percent, following a 0.6 percent dip on April 2 and a 1.2 percent drop March 20. The quantity sold climbed to 42.5 million pounds, up from just under 38 million in the last event.
Leading the gains was lactose, at 14.8 percent. Anhydrous milkfat was up 5.3 percent, after dropping 7 percent last time. GDT Cheddar was up 4.6 percent, following a 2.2 percent gain, skim milk powder was up 3.6 percent, after slipping 1.8 percent, and rennet casein was up 3.1 percent after pole vaulting 12.1 percent last time. Butter was up 2.9 percent, following a 4.1 percent surge, and whole milk powder inched 0.9 percent higher, after gaining 1.6 percent last time.
FC Stone equates the GDT 80 percent butterfat butter price to $2.5019 per pound U.S. CME butter closed Tuesday at $2.2925. GDT Cheddar cheese equated to $1.7485 per pound U.S. and compares to Tuesday’s CME block Cheddar at $1.63. GDT skim milk powder averaged 86.76 cents per pound and whole milk powder averaged $1.5020. CME Grade A nonfat dry milk price closed Tuesday at 77 cents per pound.
Calif. Class I rises
California’s May Class I milk price was at $16.09 per hundredweight for the north and $16.36 for the south. Both are up 12 cents from April but 56 cents below May 2017. It is the highest Class I since December 2017 and puts the five-month average at $15.76 for the north, down from $17.79 at this time a year ago and compares to $15.67 in 2016. The southern average stands at $16.03, down from $18.06 a year ago and $15.94 in 2016.
February fluid down
February packaged fluid milk sales totaled 3.7 billion pounds, down 1.6 percent from February 2017, according to the USDA’s latest data.
Conventional product sales totaled 3.5 billion pounds, down 1.7 percent from a year ago; organic products, at 205 million pounds, were up 1.0 percent and represented about 5.5 percent of total sales for the month.
Whole milk sales totaled 1.1 billion pounds, up 2.2 percent from a year ago, and 3.3 percent year to date, and made up 30.7 percent of total fluid sales in the month and 30.9 percent for the year. Skim milk sales fell to 304 million pounds, down 10.0 percent from February 2017 and are down 9.9 percent year to date.
Total packaged fluid milk sales so far in 2018 hit 7.97 million pounds, down 1.1 percent from the same period a year ago.
Conventional products year to date totaled 7.5 million pounds, down 1.2 percent; organic products, at 438 million pounds, were up 1.7 percent. Organic represented about 5.5 percent of total fluid milk sales so far in 2018.
The figures represent consumption of fluid milk products in Federal milk order marketing areas and California, which account for approximately 92 percent of total fluid milk sales in the U.S.