Dairy market roller coaster continues
It’s fair season. The roller coasters are back, at least it appeared that way last week at the Chicago Mercantile Exchange. Mid-August cash block Cheddar, after hitting $1.66 per pound last Monday, closed Friday at $1.6550, down a half-cent on the week and 10 cents below a year ago.
The barrels climbed to $1.6750 Wednesday, highest price since Nov. 15, 2017, but finished Friday at $1.67, up a nickel on the week, 8 cents below a year ago, and 1 1/2-cents above the blocks.
Monday’s trading took the blocks down 4 1/2-cents but recovered three-quarters Tuesday, hitting $1.6175, as traders reacted to the morning’s GDT auction and anticipated what will be in Wednesday’s July Cold Storage report.
The barrels lost 2 3/4-cents Monday, as 22 carloads rolled into the CME, and screamed another 7 1/4-cents lower Tuesday to $1.57, as 12 more cars found their way to Chicago.
Last week’s cheese demand remained on par with previous weeks, according to Dairy Market News, and spot milk prices ranged 50 cents under to $2 over Class III. Some producers report that they will not take any spot milk over Class, “as current sales points do not warrant adding to production and inventories.”
Western cheese output remains active with plenty of milk to run through the vats, but “the seasonal easing of milk production and the restart of school milk bottling has taken some of the pressure off.”
Butter climbed to $2.3875 last Tuesday, highest CME price since June 11, 2018, but closed Friday at $2.3050, down 3 1/2-cents on the week, ending five consecutive weeks of gain, and 34 cents below a year ago.
It lost 5 1/2-cents Monday and suffered a 1 1/4-cent loss Tuesday, slipping to $2.2375.
DMN reports that, as cream prices shifted downward last week, churning increased. Retail butter sales are reportedly “ahead of last year’s figures and meeting or better than expectations.”
Western output is steady. Good demand from ice cream and cream cheese processors has incited some butter plants to sell cream.
CME Grade A nonfat dry milk closed Friday at 86 1/4-cents per pound, up 3 1/4-cents on the week, and 3 cents above a year ago.
Monday’s powder inched up a half-cent, then jumped 1 1/2-cents Tuesday, to 88 1/4-cents per pound, highest CME price since June 20, 2017.
Spot dry whey hit a new high of 44 1/2-cents per pound last week, up a quarter-cent.
It added a quarter-cent Monday and stayed there Tuesday at 44 3/4-cents per pound.
The roller coaster was also at Tuesday’s Global Dairy Trade auction (GDT) where the weighted average of products offered dropped 3.6 percent, after it was unchanged Aug. 7.
Butter led the losses, plunging 8.5 percent, after sliding 3.2 percent in the last event.
Anhydrous milkfat was down 6.9 percent, after it inched up 1.2 percent last time. GDT Cheddar was down 4.7 percent, which follows a 1.3 percent gain, and powder made up the rest of the losses.
Whole milk powder was down 2.1 percent, after it inched up 0.1 percent on Aug. 7 and skim milk powder was off 1.3 percent, following a 0.3 percent loss last time.
The only product showing a gain was rennet casein, up 2.8 percent, after leading the gains Aug. 7 with an 8.0 percent uptick.
FC Stone equates the GDT 80 percent butterfat butter price with $1.9436 per pound U.S. CME butter closed Tuesday at $2.2375. GDT Cheddar cheese equated to $1.5802 per pound U.S. and compares to Tuesday’s CME block Cheddar at $1.6175. GDT skim milk powder averaged 88.49 cents per pound and whole milk powder averaged $1.3078. CME Grade A nonfat dry milk closed Tuesday at 88 1/4-cents per pound.
July milk up
Farm milk prices remain well below the cost of production, slaughter numbers are up, and so is the thermometer and that combination slowed U.S. milk output in July.
The USDA’s latest Milk Production report shows dairy farms in the top 23 states put 17.3 billion pounds in their tanks, up just 0.4 percent from July 2017. The 50-state milk total, at 18.4 billion pounds, was also up a bullish 0.4 percent. Revisions added another 40 million pounds to the original June estimate, now put at 17.2 billion pounds, 1.6 percent above a year ago.
July cow numbers in the 50 states totaled 9.4 million head, down 8,000 from June and a year ago, first time cow numbers were below a year ago since May 2016. Output per cow averaged 1,953 pounds in the 23 states, up 10 pounds.
California was down 2.5 percent as heat took a toll on output per cow by 35 pounds and 12,000 fewer cows were milked from a year ago. Wisconsin was up 1.2 percent on a 30-pound gain per cow but 4,000 fewer cows were milked.
Idaho inched up 0.8 percent, thanks to 6,000 more cows offsetting a drop of 5 pounds per cow. New York was up 0.6 percent, on a 20-pound gain per cow outweighing the loss of 2,000 cows. Pennsylvania was off 0.7 percent on 5,000 fewer cows but output per cow was up 5 pounds. Minnesota was down 0.2 percent, on a 20-pound loss per cow and 6,000 fewer cows.
Michigan was down 0.9 percent, on 4,000 fewer cows. Output per cow was unchanged. New Mexico was down 0.8 percent, on a 10 pound per cow gain outweighing the 4,000 fewer cows milked. Texas continues to roar, up 7.3 percent, thanks to an 85-pound gain per cow and 15,000 more cows. Washington state was up 1.8 percent on a 20-pound gain per cow and 2,000 additional cows milked.
June fluid down
Fluid milk sales continue to falter. The USDA’s latest data shows June sales at 3.59 billion pounds, down a hefty 4.1 percent from June 2017.
Conventional product sales totaled 3.4 billion pounds, down 4.2 percent from a year ago; organic products, at 202 million pounds, were down 3.1 percent and represented about 5.6 percent of total sales for the month.
Whole milk sales totaled 1.2 billion pounds, down 0.3 percent from a year ago, up 2.0 percent year to date, and made up 33.9 percent of total fluid sales in the month. Skim milk sales, at 290 million pounds, were down 10.5 percent from June 2017 and down 9.4 percent year to date.
Total packaged fluid milk sales in the six-month period was 23.4 billion pounds, down 2.1 percent from a year ago.
Conventional products year to date totaled 22.1 billion pounds, down 2.2 percent; organic products, at 1.3 billion pounds, were off 0.4 percent. Organic represented about 5.5 percent of total fluid milk sales January through June.