Cheese prices slip, then rebound
Mid-May cheese prices headed south as traders absorbed last week’s Global Dairy Trade auction and awaited Friday afternoon’s April Milk Production report.
The blocks closed Friday morning at $1.5825 per pound, down a nickel on the week, 8 3/4-cents below a year ago, and the lowest CME price in six weeks. The barrels closed at $1.5325, down 8 3/4-cents on the week but 6 1/4-cents above a year ago. There were 7 cars of block sold last week at the CME and 32 of barrel.
Monday’s block price jumped 5 3/4-cents, as traders considered Friday’s bullish Milk Production report and a Chinese announcement over the weekend that China seeks to avert a trade war with the U.S., will “substantially reduce the trade deficit,” and agree to “meaningful increases in U.S. agriculture and energy exports.” The blocks gave back a quarter-cent Tuesday, slipping to $1.6375. The barrels were up 3 3/4-cents Monday and fell back a half-cent Tuesday, to $1.5650.
Dairy Market News reports that cheese orders have picked up, though “Historically, this time period is a lull for cheese buying, particularly in the mozzarella-provolone sector.” Milk remains discounted and, as Memorial Day nears, cheese producers expect even more spot milk in the near term.
Western cheese demand is “currently solid.” Domestic and international sales are good and U.S. cheese prices are competitive in the international market as the value of the dollar is down. Cheese production is strong, milk continues to be readily available, and most plants are running near full capacity.
CME butter saw a Friday finish at $2.3850 per pound, 5 cents higher on the week and a penny above a year ago, with 61 cars exchanging hands last week.
The butter was up a nickel Monday and gained a penny and a half Tuesday, hitting $2.45, highest CME price since Sept. 21, 2017.
Butter sales continue to impress Central contacts and inventories are generally balanced, according to DMN.
Western butter makers report buyer interest is firm, including inquiries from international shoppers. Ice cream and other dairy products are starting to draw heavier amounts of cream but there is plenty of it for the churns. Butter inventories are generally in balance.
Cash Grade A nonfat dry milk closed last week a quarter-cent higher, at 85 1/4-cents per pound, 6 1/4-cents below a year ago.
Monday’s powder inched a quarter-cent higher and held there Tuesday at 85 1/2-cents per pound.
The EU commission sold about 92.5 million pounds of skim milk powder out of intervention last week with a minimum price of about 62 cents per pound. Last month’s tender moved about 52.9 million pounds.
Cash dry whey closed Friday at 37 cents per pound, up 4 1/2-cents on the week and the highest price since it began trading on the CME on March 12, 2018.
The whey was unchanged Monday but inched a quarter-cent higher Tuesday, to 37 1/4-cents per pound.
Milk up slightly
The slowdown in U.S. milk output was more obvious in April, though it still bested previous year output for the 52nd month. USDA’s preliminary data put output at a bullish 18.4 billion pounds in the 50 states, up 0.6 percent from April 2017. Revisions lowered the March estimate 9 million pounds to 18.98 billion pounds, up 1.3 percent.
April cow numbers totaled 9.4 million, down 2,000 from March but 8,000 above a year ago. Output per cow averaged 1,961 pounds, up 9 pounds from a year ago.
California topped its year ago output for the fourth consecutive month but not by much, up just 0.4 percent on a drop of 19,000 cows from a year ago. Output per cow was up 30 pounds. Wisconsin inched 0.7 percent lower on a 5-pound loss per cow and 5,000 fewer cows milked.
A 55-pound drop per cow took New York down 2.4 percent, though cow numbers were up 2,000. Idaho was up 3.5 percent, thanks to a 40-pound increase per cow and 9,000 more cows. Pennsylvania was down 1.7 percent on a 30-pound loss per cow. Minnesota was down 2.2 percent, on 5,000 fewer cows and 20 pounds less per cow.
Michigan was down, 1.4 percent on a 15-pound loss per cow and 3,000 fewer cows. New Mexico was up 2.6 percent on 6,000 more cows and 15 pounds more per cow. Texas producers saw a 100-pound gain per cow propel their overall output 7 percent higher and the extra 10,000 cows helped as well. Washington state was up 3.1 percent on a 45-pound gain per cow and 2,000 more cows milked than a year ago.
March fluid down
Dairy industry woes remain in fluid milk consumption, as consumers reduce their purchases and or choose plant-based alternatives. Fluid sales were down for the 10th consecutive month, according to the USDA’s latest data. March packaged sales totaled 4.1 billion pounds, down 3.0 percent from March 2017.
Conventional product sales totaled 3.9 billion pounds, down 2.9 percent from a year ago; organic products, at 218 million pounds, were even down, 5.5 percent below a year ago and represented about 5.3 percent of total sales for the month.
Whole milk sales totaled 1.3 billion pounds, up 2.5 percent from a year ago, up 3.0 percent year to date, and made up 31.4 percent of total fluid sales in the month and 31.1 percent for the year. Skim milk sales, at 333 million pounds, were down 10.4 percent from March 2017 and down 10.1 percent year to date.
Total packaged fluid milk sales in first quarter 2018 hit 12.05 million pounds, down 1.9 percent from the same period a year ago.
Conventional products year to date totaled 11.4 million pounds, down 1.9 percent; organic products, at 652 million pounds, were off 1.6 percent. Organic represented about 5.4 percent of total fluid milk sales in first quarter 2018.