Dairy prices begin climbing

Dairy prices strengthened early last week, then backed off, as traders reacted to the bullish April Milk Production report, Chinese officials announcing over the weekend that China wants to avert a trade war with the U.S. and will “substantially reduce the trade deficit” and agree to “meaningful increases in U.S. agriculture and energy exports.”


The markets were also anticipating the upcoming Memorial Day holiday.


CME block Cheddar ended the week at $1.61 per pound, up 2 3/4-cents, reversing two weeks of decline, but is 12 1/4-cents below a year ago. The Cheddar barrels closed at $1.5450, up 1 1/4-cents on the week and 6 1/2-cents above a year ago, with 12 cars of block selling on the week and 41 of barrel.


The markets were closed Monday for the Memorial Day holiday but Tuesday saw the blocks gain a penny and climb to $1.62 per pound. The barrels were also up a penny, and hit $1.5550.


Midwest mozzarella and pizza cheese sales are still meeting or above expectations, particularly for this time of year, reports Dairy Market News. “Contacts suggest buyers decided the stable markets were more unbending than originally thought, thus buying has been less hand-to-mouth than in previous months,” but “traditional cheesemakers are reporting a bit of an expected slowdown in overall sales.”


Western cheese output is strong. Manufacturers say there is plenty of milk available and, with higher components, cheese yields are up. Industry contacts say demand is stable, but in a few cases, manufacturers report buyers have pulled back a bit. Some contacts suggest that retail buyers are content with the cheese they currently have on hand and are hesitant to take on more.


Uncle Sam will shell out up to $177.4 million in purchases for nutrition assistance programs using a new streamlined process. Up to $20 million of that is for Cheddar cheese purchases. FC Stone cautions; “From what we’ve seen so far, it’s not crystal clear whether these are new funds or if they’ve simply dedicated $20 million of existing money towards this new purchase process (one that seems like it will try to ‘time the market’ to make the most of taxpayer dollars). Our assumption is the latter.”


Cash butter climbed to $2.45 per pound last Tuesday but closed Friday at $2.4150, up 3 cents on the week and 5 1/2-cents above a year ago, with 41 cars exchanging hands last week at the CME.


Tuesday’s trading inched the butter a quarter-cent higher, to $2.4175, highest CME price since Sept. 26, 2017.


The last time butter was below $2 per pound was Nov. 15, 2016, when it was trading at $1.98. Those days are likely over. The record high was Sept. 19, 2014, when it hit $3.06 per pound.


DMN says butter demand has yet to slow down this spring and both 80 and 82 percent varieties are moving out of storage. Some butter producers suggest that domestic sales are the lion’s share of their output, but export interest remains strong for others. “The NASS Cold Storage stock increases have some questioning how the markets will react, but butter has been unbending in the face of bearish news in recent months.”


The Western butter market remains strong however, some reports suggest that churning schedules have slowed a little. Cream demand for Class II products is increasing due to current warmer weather and pre-holiday production runs for cream cheese and whipped cream. Butter inventories are relatively steady compared to the previous week. Butter demand is good in both the national and international markets. Competitive U.S butter prices coupled with a decrease in international butter supplies are boosting export sales, according to DMN.


CME Grade A nonfat dry milk closed last week a penny lower, at 84 1/4-cents per pound and 8 1/2-cents below a year ago.


The Tuesday powder inched up a quarter-cent, hitting 84 1/2-cents per pound.

Cash dry whey closed Friday at 37 1/4-cents per pound, up a quarter-cent on the week, with 4 sales reported. A 1 cent movement in the dry whey price equals about 5.9 cents on the Class III milk price.


Dry whey was up a half-cent Tuesday on a sale, setting a new high for the new CME market at 37 3/4-cents per pound.


Butter aplenty

Dairy product inventories continued to grow in April and remain above a year ago. The Agriculture Department’s latest Cold Storage report shows April butter stocks at a bearish 307.3 million pounds, up 33.4 million pounds or 12.2 percent from March and are 15.1 million pounds or 5.2 percent above April 2017.


American type cheese hit 781.5 million pounds, up 14.9 million pounds or 1.9 percent from March, but 23.2 million or 2.9 percent below a year ago.


The other cheese category grew to 536.1 million pounds, up 7.1 million pounds or 1.4 percent from March and 64.4 million or 13.7 percent above a year ago.


The total cheese inventory stood at 1.35 billion pounds, up 22.1 million pounds or 1.7 percent from March and 43.5 million or 3.3 percent above a year ago.


Dairy culling up

U.S. dairy cow culling dropped in April from March but remained above a year ago. The USDA’s latest Livestock Slaughter report shows an estimated 248,900 head were slaughtered under federal inspection, down 38,000 head from March but 20,800 above a year ago or 9.1 percent. A total 1.09 million head were culled in the first four months of 2018, up 64,700 head or 6.3 percent from 2017.


Dairy prices strengthened early last week, then backed off, as traders reacted to the bullish April Milk Production report, Chinese officials announcing over the weekend that China wants to avert a trade war with the U.S. and will “substantially reduce the trade deficit” and agree to “meaningful increases in U.S. agriculture and energy exports.”


The markets were also anticipating the upcoming Memorial Day holiday.


CME block Cheddar ended the week at $1.61 per pound, up 2 3/4-cents, reversing two weeks of decline, but is 12 1/4-cents below a year ago. The Cheddar barrels closed at $1.5450, up 1 1/4-cents on the week and 6 1/2-cents above a year ago, with 12 cars of block selling on the week and 41 of barrel.


The markets were closed Monday for the Memorial Day holiday but Tuesday saw the blocks gain a penny and climb to $1.62 per pound. The barrels were also up a penny, and hit $1.5550.


Midwest mozzarella and pizza cheese sales are still meeting or above expectations, particularly for this time of year, reports Dairy Market News. “Contacts suggest buyers decided the stable markets were more unbending than originally thought, thus buying has been less hand-to-mouth than in previous months,” but “traditional cheesemakers are reporting a bit of an expected slowdown in overall sales.”


Western cheese output is strong. Manufacturers say there is plenty of milk available and, with higher components, cheese yields are up. Industry contacts say demand is stable, but in a few cases, manufacturers report buyers have pulled back a bit. Some contacts suggest that retail buyers are content with the cheese they currently have on hand and are hesitant to take on more.


Uncle Sam will shell out up to $177.4 million in purchases for nutrition assistance programs using a new streamlined process. Up to $20 million of that is for Cheddar cheese purchases. FC Stone cautions; “From what we’ve seen so far, it’s not crystal clear whether these are new funds or if they’ve simply dedicated $20 million of existing money towards this new purchase process (one that seems like it will try to ‘time the market’ to make the most of taxpayer dollars). Our assumption is the latter.”


Cash butter climbed to $2.45 per pound last Tuesday but closed Friday at $2.4150, up 3 cents on the week and 5 1/2-cents above a year ago, with 41 cars exchanging hands last week at the CME.


Tuesday’s trading inched the butter a quarter-cent higher, to $2.4175, highest CME price since Sept. 26, 2017.


The last time butter was below $2 per pound was Nov. 15, 2016, when it was trading at $1.98. Those days are likely over. The record high was Sept. 19, 2014, when it hit $3.06 per pound.


DMN says butter demand has yet to slow down this spring and both 80 and 82 percent varieties are moving out of storage. Some butter producers suggest that domestic sales are the lion’s share of their output, but export interest remains strong for others. “The NASS Cold Storage stock increases have some questioning how the markets will react, but butter has been unbending in the face of bearish news in recent months.”


The Western butter market remains strong however, some reports suggest that churning schedules have slowed a little. Cream demand for Class II products is increasing due to current warmer weather and pre-holiday production runs for cream cheese and whipped cream. Butter inventories are relatively steady compared to the previous week. Butter demand is good in both the national and international markets. Competitive U.S butter prices coupled with a decrease in international butter supplies are boosting export sales, according to DMN.


CME Grade A nonfat dry milk closed last week a penny lower, at 84 1/4-cents per pound and 8 1/2-cents below a year ago.


The Tuesday powder inched up a quarter-cent, hitting 84 1/2-cents per pound.


Cash dry whey closed Friday at 37 1/4-cents per pound, up a quarter-cent on the week, with 4 sales reported. A 1 cent movement in the dry whey price equals about 5.9 cents on the Class III milk price.


Dry whey was up a half-cent Tuesday on a sale, setting a new high for the new CME market at 37 3/4-cents per pound.


Butter aplenty

Dairy product inventories continued to grow in April and remain above a year ago. The Agriculture Department’s latest Cold Storage report shows April butter stocks at a bearish 307.3 million pounds, up 33.4 million pounds or 12.2 percent from March and are 15.1 million pounds or 5.2 percent above April 2017.


American type cheese hit 781.5 million pounds, up 14.9 million pounds or 1.9 percent from March, but 23.2 million or 2.9 percent below a year ago.


The other cheese category grew to 536.1 million pounds, up 7.1 million pounds or 1.4 percent from March and 64.4 million or 13.7 percent above a year ago.


The total cheese inventory stood at 1.35 billion pounds, up 22.1 million pounds or 1.7 percent from March and 43.5 million or 3.3 percent above a year ago.


Dairy culling up

U.S. dairy cow culling dropped in April from March but remained above a year ago. The USDA’s latest Livestock Slaughter report shows an estimated 248,900 head were slaughtered under federal inspection, down 38,000 head from March but 20,800 above a year ago or 9.1 percent. A total 1.09 million head were culled in the first four months of 2018, up 64,700 head or 6.3 percent from 2017.


From: Capital Press

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