Dairy Markets looking for direction
Cash dairy prices started November looking for direction. The Cheddar blocks fell to $1.4550 per pound last Thursday, lowest level since June 25, 2018, but closed Friday at $1.4575, down 5 3/4-cents on the week, a hefty 25 3/4-cents below a year ago, and 29 cents lower than they were October 1.
The barrels jumped 8 1/4-cents Wednesday, climbed to $1.3750 Thursday, but closed Friday at $1.34, 9 cents higher on the week, 37 1/2-cents below a year ago, 8 cents lower on the month, and 11 3/4-cents below the blocks.
The spread was closer to the normal 3 to 5 cents but still too high. Lots of cheese came to Chicago with 14 cars of block trading on the week, 82 on the month, plus 23 cars of barrel, with 183 on the month.
Cheese was unchanged Monday, as traders anticipated Tuesday morning’s Global Dairy Trade. The blocks were steady again on Tuesday but the barrels rolled a half-cent lower, to $1.3350.
Dairy Market News says “Choppy cheese markets continue to permeate the narrative in the Midwest.” Western cheese output is “within the norm of what the industry anticipated, with ample milk available.” Export sales to the Middle East are up.
Cash butter closed Friday at $2.30 per pound, up 6 3/4-cents on the week, 6 3/4-cents above a year ago, and a quarter-cent higher than Oct. 1. There were 28 sales reported last week and 173 on the month.
Monday’s butter lost 1 1/4-cents and dropped 4 3/4-cents Tuesday, to $2.24.
Cream supplies have diminished, says DMN. Bulk butter remains available but some contacts suggest supplies may be tight by the end of the year.
Western butter markets are steady ahead of the holiday baking season and cream is in adequate supply.
Grade A nonfat dry milk closed Friday at 90 cents per pound, up 3 1/4-cents on the week, up 2 cents on the month, and 18 cents above a year ago.
The powder was down 1 1/4-cents Monday and lost a quarter-cent Tuesday, slipping to 88 1/2-cents per pound.
Dry whey closed Friday at a 12-week low of 44 1/2-cents per pound, down 2 1/2-cents on the week and 10 1/2-cents lower on the month, with 26 sales reported on the week and 56 on the month.
Monday’s whey inched up a quarter-cent but gave it back Tuesday.
Benchmark loses 56 cents
The Agriculture Department announced the October Federal order Class III benchmark milk price at $15.53 per hundredweight, down 56 cents from September and $1.16 below October 2017. It equates to $1.34 per gallon, down from $1.38 in September. The 10-month Class III average is $14.72, down from $16.18 a year ago and compares to $14.42 in 2016.
Monday’s Class III futures settlements portended a November Class III at $14.70; December, $15.05; January, $15.10; February, $15.20; and March at $15.36.
October’s Class IV price is $15.01, up 20 cents from September, 16 cents above a year ago, and the highest Class IV since September 2017. Its 10-month average is $14.10, down from $15.44 a year ago and compares to 13.65 in 2016.
Last 4b down 19 cents
California’s final Class 4a and 4b milk prices were announced Thursday by the California Department of Food and Agriculture as the nation’s Number 1 milk producer became part of the Federal Milk Market Order system on Nov. 1.
The October 4b cheese milk price is $15.43 per hundredweight, down 19 cents from September, 74 cents below a year ago, and 10 cents below the Federal order Class III price. The 10-month 4b average stands at $14.45, down from $15.33 a year ago and compares to $13.72 in 2016.
The 4a butter powder price is $14.49, up 40 cents from September, 2 cents below a year ago, and the highest 4a since October 2017. Its 10-month average is at $13.66, down from $15.24 a year ago and compares to $13.25 in 2016.
GDT drops 2.0 percent
While the hopes of some in the electorate will no doubt be raised Tuesday, the hopes of dairy producers in the morning’s Global Dairy Trade auction (GDT) were weakened. The weighted average of products offered dropped 2.0 percent, following a 0.3 percent slippage Oct. 16, which followed a 1.9 percent decline on October 2. It is the 6thconsecutive event of decline as sellers brought 93.5 million pounds to market, highest so far this year.
The losses were unfortunately led by Cheddar, down 4.6 percent, which follows a decline of 1.8 percent in the last event. Rennet casein was down 2.9 percent and lactose was off 2.7 percent. Whole milk powder saw a 2.9 decline, after inching 0.9 percent lower last time. GDT butter was down 1.7, after it gained 2.4 percent last time, and anhydrous milkfat was off 1.3 percent, following a 1 percent uptick.
The positive moves were skim milk power, up 1.2 percent after holding steady last time, and buttermilk powder, up 0.8 percent.
FC Stone equates the GDT 80 percent butterfat butter price to $1.7899 per pound U.S., down 3.1 cents from the last session. CME butter closed Tuesday at $2.24. GDT Cheddar cheese equated to $1.4740 per pound, down 7 cents on the day, and compares to Tuesday’s CME block Cheddar at $1.4575. GDT skim milk powder averaged 90.58 cents per pound and whole milk powder averaged $1.2044. CME Grade A nonfat dry milk closed Tuesday at 88 1/2-cents per pound.
Lots of cheese
U.S. September cheese output totaled 1.06 billion pounds, down 2.0 percent from August but 3.1 percent above September 2017, according to USDA’s latest Dairy Products report. Year-to-date output hit 9.63 billion pounds, up 2.5 percent from a year ago. September was the 66th consecutive month that cheese output exceeded that of a year ago.
Italian cheese totaled 451.2 million pounds, down 1.1 percent from August but 4.3 percent above a year ago. Year to date (YTD) Italian is at 4.1 billion pounds, up 2.8 percent from a year ago.
Mozzarella, at 357.1 million pounds, was up 7.5 percent from a year ago, with YTD at 3.2 billion pounds, up 3.8 percent.
American type cheese totaled 419.4 million pounds, down 1.7 percent from August but 3.9 percent above a year ago, with YTD at 3.88 billion pounds, up 2.5 percent. Cheddar, the cheese traded at the CME, totaled 293 million pounds, down 10.6 million pounds or 3.5 percent from August but 0.4 percent above a year ago, with YTD output at 2.8 billion pounds, up 0.6 percent.
U.S. churns produced 134.4 million pounds of butter, up 0.3 percent from August but 0.1 percent below a year ago. YTD is at 1.4 billion pounds, up 3.0 percent.
Yogurt output, at 371.4 million pounds, was down 5.6 percent from a year ago, with YTD output at 3.36 billion pounds, down 2.4 percent.
Dry whey for human consumption totaled 70.1 million pounds, down 9.7 percent from August and down 21.7 percent from a year ago. Stocks totaled 67.5 million pounds, down 5.1 percent from August and a whopping 36.5 percent below those a year ago.
Nonfat dry milk production totaled 106.3 million pounds, down 13.2 percent from August and 21.0 percent below a year ago. YTD output stands at 1.3 billion pounds, down 3.2 percent. Stocks fell to 262.1 million pounds, down 19 million pounds or 6.7 percent from August and 58.7 million pounds or 18.3 percent below 2017.
Skim milk powder totaled 48.7 million pounds, up 2.4 percent from August and a hefty 67.3 percent above a year ago. YTD skim is at 428.0 million pounds, up 3.8 percent from a year ago.