Cheese ends 2017 on positive note
The final CME prices of 2017 saw the Cheddar blocks at $1.54 per pound, up 4 3/4-cents on the shortened Christmas holiday week but 12 cents below a year ago, with 13 cars sold.
The barrels finished the week and the year at $1.4425 per pound, up 3 1/4-cents on the week, 15 3/4-cents below a year ago, and at a larger than normal 9 3/4-discount to the blocks. Twenty-three cars of barrel traded hands last week at the CME.
The blocks peaked for the year at $1.76 per pound on Oct. 6 and compares to the 2016 peak at $1.9425 on Nov. 9. They saw a 2017 low of $1.36 per pound on March 15 and that compares to a low of $1.27 on May 12, 2016.
The barrels ranged from a high of $1.76 on Aug. 21, 2017, to a low of $1.3375 on June 20, 2017. They got as high as $1.88 on Aug. 5, 2016 and sunk to $1.27 per pound on May 12, 2016. They set a record spread of 22 1/2-cents above the blocks on Dec. 12 and set a record single day volume of 36 cars sold on Dec. 11.
The markets were closed New Year’s Day but Tuesday saw a penny and a half come off both the blocks and the barrels, as traders awaited Thursday’s November Dairy Products report. That put the blocks at $1.5250 and the barrels at $1.4275 per pound.
Milk into Midwestern cheese vats remains plentiful, according to Dairy Market News, with spot milk prices reportedly ranging $4 to $8 under Class III.
Western cheese inventories are reportedly heavy. Cheese demand has been stable but not enough to stay ahead of the abundant milk supplies and vigorous cheese production.
Cash butter saw a Friday close at $2.2075 per pound, up 2 3/4-cents on the week but 6 cents below a year ago, with only 3 cars exchanging hands on the week.
Butter had many thinking it would top $3 per pound in 2017 but $2.7375 was as high as it got, on Aug. 3, 2017. It fell to a low of $2.0625 on April 18, 2017, but its 2016 low was $1.7550 on Oct. 19 and it only got as high as $2.3675 on June 17, 2016.
Butter held Tuesday at $2.2075.
Central butter makers report that holiday cream supplies were plenteous and will remain so until early January. Some butter producers report that retail demand has been meeting expectations, while others suggest 2017 holiday retail figures were below previous years.
Western butter makers report that they are being flooded with cream, butter production is active, and a few manufacturers are adding extra shifts or running additional churns to keep up.
CME Grade A nonfat dry milk closed the week and the year at 67 3/4-cents per pound, up 1 1/4-cents on the week but 34 1/4-cents below a year ago, with 13 cars finding new homes on the week at the CME.
The powder set a record low of 64 3/4-cents per pound on Dec. 19, 2017. The high for the year was $1.0375 on Jan. 18. The 2016 low was at 69 cents per pound on April 6, with the peak at $1.05 on Dec. 22, 2016.
The Tuesday trade took it down three-quarters, to 67 cents per pound.
GDT up 2.2 percent
The Global Dairy Trade auction started 2018 with a small shot of encouragement, led by powder, as New Zealand-based Fonterra lowered its offerings of whole milk powder. Total GDT volume slipped to just under 56 million pounds, lowest since June 20, 2017, and the weighted average jumped 2.2 percent, following a plunge of 3.9 percent on Dec. 19.
Whole milk powder was up 4.2 percent, after dropping 2.5 percent Dec. 19, and skim milk power was up 1.6 percent, after it fell 4.8 percent. Butter inched 0.6 percent higher after it fell 2.3 percent last time.
Buttermilk powder led the declines, plunging 7.3 percent. Cheddar was down 2.1 percent, after leading the declines last time with a 7.9 percent descent. Anhydrous milkfat was off 0.2 percent, after plunging 6.7 percent last time.
FC Stone equated the GDT 80 percent butterfat butter price to $1.9918 per pound U.S. CME butter closed Tuesday at $2.2075. GDT Cheddar cheese equated to $1.5048 per pound U.S. and compares to Tuesday’s CME block Cheddar at $1.5250. GDT skim milk powder averaged 77.07 cents per pound and whole milk powder averaged $1.3091. CME Grade A nonfat dry milk price closed Tuesday at 67 cents per pound.
Milk-feed ratio up
A higher All Milk price and lower corn and hay prices nudged the November milk-feed price ratio higher. November’s 2.54 is up from 2.45 in October but compares to 2.59 in November 2016, according to the Agriculture Department’s latest Ag Prices report.
The U.S. average All-Milk price was $18.10 per hundredweight, up 20 cents from October and 30 cents above November 2016.
November corn averaged $3.15 per bushel, down 11 cents from October and 9 cents below November 2016. Soybeans averaged $9.22 per bushel, up 4 cents from October but 25 cents per bushel below a year ago.
Alfalfa hay averaged $148 per ton, down $4 per ton from October but $18 per ton above a year ago.
Looking at the cow side of the ledger, the report shows the November cull price for beef and dairy combined averaged $63.40 per cwt., down $2 from October, after dropping $4.50 the previous month, but is $1.50 above November 2016, and $8.20 below the 2011 base average of $71.60.