Cash dairy market breaks volume records
CME block Cheddar fell to $1.47 per pound last Wednesday but closed Friday at $1.4750, down 8 3/4-cents on the week and the sixth consecutive week of decline, 23 1/2-cents below a year ago and 19 1/2-cents below the barrels.
The barrels closed the week at $1.67, up 13 1/2-cents and 9 1/4-cents above a year ago, with 34 cars of block finding new homes last week and a whopping 56 of barrel.
The blocks lost 1 3/4-cents Monday and 1 1/4-cents Tuesday, dipping to $1.4450, the lowest price since March 29, 2017.
The barrels were unchanged Monday, despite 36 cars being sold, a record single-day volume since daily trading started Sept. 1, 1998 and eclipsing the previous high of 35 loads set June 18, 2010, according to FC Stone. They were also unchanged Tuesday but with a record December inversion of 22 1/2-cents above the blocks.
Milk remains available for cheese production in the Midwest, according to Dairy Market News. Output is steady and not expected to slow until the holidays. Sales are steady to slower but the inverted prices remain a concern.
Western cheesemakers report a lot of milk is available and cheese production is active. Lower prices are generating new interest in international markets but cheesemakers are watching cheese and Class III milk futures closely.
Cash butter fell to $2.19 per pound last Monday, then climb back to $2.2375 Thursday, and close Friday at $2.22, up a half-cent on the week and 15 1/2-cents above a year ago, with 60 cars selling last week.
Monday saw the butter down 3 cents but regain 1 3/4-cents Tuesday and inch back to $2.2075.
Retail and food service orders, in some cases, were slower the previous two weeks. Others report steady to solid interest in both salted and unsalted product. Inventories are reportedly balanced but cream has become readily available.
Western churning is less active in some areas despite long cream supplies.
CME Grade A nonfat dry milk closed Friday at a record low 68 1/4-cents per pound, down 3 3/4-cents on the week and 29 cents below a year ago.
It was unchanged Monday and inched a quarter-cent lower Tuesday to a new record 68 cents per pound.
October cheese output totaled 1.07 billion pounds, up 5.2 percent from September and 1.7 percent above October 2016. Year to date output stands at 10.3 billion pounds, up 2.5 percent from a year ago.
California produced just under 212 million pounds of that cheese, up 9.3 percent from September but 0.7 percent below a year ago. Wisconsin, at 287.5 million pounds, was up 5.9 percent from September and 2.8 percent above a year ago. Idaho output, at 85.0 million pounds, was up 5.5 percent from September and 1.3 percent above a year ago.
Italian cheese output totaled 455.22 million pounds, up 5 percent from September and 1.8 percent above a year ago, with YTD output at 4.5 billion pounds, up 1.5 percent.
Mozzarella, at 348 million pounds, was up 0.9 percent, with YTD at 3.4 billion pounds, up 0.9 percent.
Total American type cheese production hit 417.6 million pounds, up 6 percent from September and 4 percent above a year ago. YTD totaled 4.1 billion pounds, up 3.4 percent.
Cheddar output, the kind traded at the CME, totaled 294.3 million pounds, up 4.4 percent from September and 4.1 percent above a year ago, with YTD at 2.96 billion pounds, up 4.5 percent.
Butter churns produced 143.5 million pounds of butter, up 6.8 percent from September and 2.6 percent above a year ago. YTD butter totaled 1.5 billion pounds, up 3.7 percent.
Nonfat dry milk production totaled 149.2 million pounds, up 11.7 percent from September and 6.5 percent above a year ago, with YTD at 1.5 billion pounds, up 3.7 percent.
Skim milk powder totaled 23.8 million pounds, down 20 percent from September and 42.5 percent below a year ago. YTD output is at 440.4 million pounds, was down 3.6 percent.
October nonfat dry milk stocks at 328 million pounds, up 7.1 million pounds or 2.2 percent from September and a whopping 104.2 million pounds or 46.5 percent above a year ago.
The Agriculture Department lowered its 2017 and 2018 milk production forecasts in its latest World Agricultural Supply and Demand Estimates report, due to slower growth in milk production per cow. That slower growth is expected to carry into 2018 and “combined with an expected slower rate of growth in cow numbers,” the 2018 milk production forecast was also lowered.
2017 production and marketings were projected at 215.7 billion and 214.7 billion pounds, respectively, down 100 million pounds from last month. If realized, 2017 production would still be up 3.3 billion pounds or 1.6 percent from 2016.
2018 production and marketings were projected at 219.3 billion and 218.3 billion pounds, respectively, down 400 million pounds from last month. If realized, 2018 production would be up 3.6 billion pounds or 1.7 percent from 2017.
The 2017 Class III milk price forecast was unchanged from last month, ranging $16.15-$16.25 per hundredweight, up from $14.87 in 2016 and $15.80 in 2015. The 2018 average is projected at $15.30-$16.10, down 20-30 cents from last month’s estimate.
The Class IV price forecast was reduced a nickel from the previous month, with the 2017 average projected to range $15.05-15.25, and compares to $13.77 in 2016 and $14.35 in 2015. The 2018 average is estimated at $13.90-$14.80, down 25-35 cents from last month’s projection.
Class I drops
California’s January 2018 Class I milk prices are $16.07 per hundredweight for the north and $16.35 for the south, down $1.88 from December 2017, $2.70 below January 2017, and the lowest Class I since July 2016.