Dairy markets remain unsettled
Cash block cheese lost some ground last week but rebounded and closed Friday at $1.5850 per pound, up 1 1/2-cents on the week and 18 1/2-cents above a year ago. The barrels finished at $1.56, up 6 1/4-cents on the week, 19 1/2-cents above a year ago, and the highest since Dec. 18, 2017.
The blocks eased back a quarter-cent Monday and lost 4 cents Tuesday, slipping to $1.5425. The barrels were unchanged Monday but lost 4 1/4-cents Tuesday and ended the session at $1.5175.
Snowstorms in the Northeast caused a number of Midwestern cheese producers to reduce production last week, according to Dairy Market News.
“Cheese demand, particularly in the Italian style sector, has been negatively affected by the inclement weather as retail and restaurant shoppers are understandably remaining at home,” according to DMN. “Other cheesemakers continue to run full tilt, as demand for traditional Cheddar and specialty products is seeing continually steady to strong demand ahead of the spring holidays.”
Western contacts anticipate cheese output will continue to ramp up as milk output increases through the spring.
Spot butter climbed to $2.2175 per pound last Wednesday but closed at $2.21, up a half-cent on the week and 8 cents above a year ago.
It lost 2 3/4-cents Monday and stayed there Tuesday at $2.1825.
Cream accessibility remains somewhat slight for butter makers, according to DMN. Some contacts expected cream prices to decline last week, but prices maintained a steady path.
Grade A nonfat dry milk closed Friday at 69 cents per pound, a half-cent higher on the week but 11 1/2-cents below a year ago.
The powder was unchanged Monday and inched back a quarter-cent Tuesday, to 68 3/4-cents per pound.
The new dry whey market finished its first week at 29 1/4-cents per pound, up 3 1/4-cents and almost 4 cents above the latest Ag Market Service surveyed price, with one sale reported for the week.
The whey was steady Monday and Tuesday.
Output up 1.8 percent
A mild February in most of the nation enabled milk output to best year ago output for the 50th consecutive month and hit a bearish 15.9 billion pounds in the top 23 producing states.
That’s up 1.8 percent from February 2017, according to preliminary data in the Agriculture Department’s latest Milk Production report. Revisions added 9 million pounds to the original January total, now put at 17.3 billion pounds, up 1.8 percent. February’s 50-state total, at 17 billion pounds, also up 1.8 percent.
February milk cow numbers totaled 8.75 million head in the 23 states, up 1,000 from January and 49,000 more than a year ago. The 50-state total, at 9.4 million head, was up 1,000 from January and 45,000 above a year ago. Output per cow averaged 1,822 pounds in the 23 states, up 23 pounds from a year ago.
California saw its second month in a row that milk output was above a year ago, up 3.5 percent, despite 17,000 fewer cows milked but output per cow was up 80 pounds. Wisconsin was up just 0.1 percent on a 10-pound gain per cow offsetting 5,000 fewer cows.
The Northeast was the exception to the mild weather in February. Case in point, New York output was down 2.3 percent on a 55-pound loss per cow, though cow numbers were up 4,000 head. Idaho was up 4.8 percent, thanks to a 60-pound increase per cow and 9,000 more cows. Pennsylvania was up 0.3 percent on a 5-pound gain per cow. Cow numbers were unchanged. Minnesota was down 0.5 percent, on 5,000 fewer cows but output per cow was up 10 pounds.
Michigan was up 0.9 percent on a 5-pound gain per cow and 3,000 more cows. New Mexico eased back 0.5 percent on a loss of 5,000 cows, although output per cow was up 10 pounds. Texas was up 5.5 percent, thanks to 16,000 more cows and 40 pounds more per cow. Washington state inched up 0.1 percent on a 10-pound gain per cow. Cow numbers were down 5,000 head.
GDT drops 1.2 percent
Tuesday’s Global Dairy Trade auction saw its weighted average of all products offered drop 1.2 percent, following the March 6 decline of 0.6 percent.
Skim milk powder plunged 8.6 percent, reversing a 5.5 percent advance last time. Cheddar cheese was down 3.9 percent, after gaining 1.7 percent.
As to the unchanged anhydrous milkfat and butter, FC Stone says, “We’ve had a pretty flat GDT forward curve for the past few auctions, so really just a continuation of that. Butter is slightly down in the front end of the curve and a little up on the back end of the curve, flattening out the curve further and leaving the butter index unchanged overall.”
Whole milk powder was the only product on the positive side, but was only up 0.1 percent, after slipping 0.8 percent last time.
FC Stone equates the GDT 80 percent butterfat butter price to $2.3370 per pound U.S. CME butter closed Tuesday at $2.1825. GDT Cheddar cheese equated to $1.6369 per pound U.S. and compares to Tuesday’s CME block Cheddar at $1.5425. GDT skim milk powder averaged 85.57 cents per pound U.S. and whole milk powder averaged $1.4632. CME Grade A nonfat dry milk price closed Tuesday at 68 3/4-cents per pound.
California Class I up
California’s April Class I milk prices were announced at $15.97 per hundredweight for the north and $16.24 for the south. Both are up 77 cents from March but 79 cents and 80 cents respectively below April 2017.
That put the four-month average at $15.68 for the north, down from $18.07 at this time a year ago and compares to $15.88 in 2016. The southern average is $15.95, down from $18.34 a year ago and $16.15 in 2016. The April Federal order Class I base price will be announced by the USDA on March 21.
Efforts to create a Federal Milk Marketing Order in California are back on track after a judicial snafu put the procedure on hold. The issue has been resolved and the Agriculture Department is expected to issue a recommended final decision soon. California dairy producers will then need to ratify it.