Dairy prices continue dipping

The cash dairy markets ended the Memorial Day holiday-shortened week with block Cheddar at $1.5975 per pound, down 1 1/4-cents on the week, 10 1/4-cents below a year ago, and 6 1/4-cents lower than it was on May 1, as the week’s global politics may have influenced traders. The barrels finished at $1.52, down 2 1/2-cents on the week, 3 cents above a year ago, but 8 1/4-cents below its May 1 perch.

The blocks were down a half-cent Monday and lost 1 3/4-cents Tuesday, slipping to $1.5750. The barrels were unchanged Monday but lost a penny and a half Tuesday and were at $1.5050.

Cheese demand reports suggest a steady to slower market for most types of processors, according to Dairy Market News. Midwest heat and humidity had some questioning near term milk availability, but there was no shortage Memorial Week and a growing amount of cheesemakers took to the spot milk market, as loads ranged $4 to $5 under class.

Western cheese output is active but the market seems to be balanced. Domestic and international sales are solid and the U.S. market is currently very competitive.

Cash butter climbed to $2.4250 per pound Tuesday but closed Friday at $2.3775, down 3 3/4-cents on the week, 10 3/4-cents below a year ago, but is 1 3/4-cents above where it was on May 1. A whopping 65 cars were sold last week, 32 on Friday alone.

Monday’s butter was steady but gave up 1 1/2-cents Tuesday and dipped to $2.3625.

Upper Midwest butter makers report that cream is unexpectedly tight and buying interest remains generally healthy.

Western butter remains active. Ice cream manufacturers are pulling more cream but there’s still plenty to keep churns busy.

Spot Grade A nonfat dry milk closed last week at 82 1/2-cents per pound, down 1 3/4-cents, 12 1/4-cents below a year ago, and dead even with its May 1 price.

The powder lost a penny Monday and inched a half-cent lower Tuesday, to 81 cents per pound.

The new dry whey market had a good week, hitting 39 cents per pound Thursday but inched back Friday to close at 38 1/2-cents, 1 1/4-cents higher on the week, with 9 cars being sold the four days of trading.

It gained a penny and a half Monday and a quarter-cent Tuesday, setting a new high of 40 1/4-cents per pound.

GDT slips

The gears reversed again in Tuesday’s Global Dairy Trade auction, this time with the weighted average of products offered falling 1.3 percent, following a 1.9 percent uptick May 15.

Cheddar cheese led the declines, down 3.6 percent, following a 4.4 percent ascent last time. Butter was down 3.5 percent, after it rose 2.4 percent. Anhydrous milkfat slipped 1.7 percent, after it led the gains last time with a 5.8 percent advance, and whole milk powder was off 1.1 percent after it inched 0.2 percent higher on May 15.

Buttermilk powder led the gains, up 17.7 percent. Lactose was up 3.9 percent, rennet casein was up 2.7 percent, and skim milk powder inched 0.3 percent higher after a strong 3 percent rise last time.

FC Stone equates the GDT 80 percent butterfat butter price to $2.4696 per pound U.S. CME butter closed Tuesday at $2.3625. GDT Cheddar cheese equated to $1.8135 per pound U.S. and compares to Tuesday’s CME block Cheddar at $1.5750. GDT skim milk powder averaged 93.04 cents per pound and whole milk powder averaged $1.4538. CME Grade A nonfat dry milk closed Tuesday at 81-cents per pound.

Benchmark up

The May Federal order Class III benchmark milk price is $15.18 per hundredweight, up 71 cents from April but still 39 cents below May 2017, though it is the highest Class III price since December 2017. It equates to about $1.31 per gallon, up from $1.24 in April.

The five-month average stands at $14.25, down from $16.05 a year ago but compares to $13.53 in 2016.

Monday’s Class III futures portended a June Dairy Month Class III price of $15.38 per cwt.; July, $16.02; and August at $16.65, with a peak of $16.86 in September.

The May Class IV price is $14.57, up $1.09 from April, 8 cents above a year ago, and the highest it has been since October 2017.

Its five month average is at $13.42, down from $14.92 a year ago and compares to $13.06 in 2016.

California up

California’s May Class 4b cheese milk price — perhaps one of the last, depending on the Federal order vote — is $14.90 per cwt., up for the fourth month in a row and the highest it has been since November 2017. It gained 63 cents from April but is 35 cents below May 2017 and 28 cents below the comparable Federal order Class III price.

The five month 4b average stands at $13.98, down from $15.02 a year ago and compares to $12.69 in 2016.

The 4a butter-powder milk price is $14.06, up 77 cents from April, 37 cents below a year ago, but the highest it has been since October 2017.

The 4a average now stands at $13.20, down from $14.64 a year ago and compares to $12.81 in 2016.

Milk-feed ratio

Another gain in the U.S. All Milk price average was overwhelmed by a sharp increase in the alfalfa hay price and increases in corn and soybeans, thereby sending the April milk-feed price ratio lower for the fifth month in a row. The latest Ag Prices report shows the April ratio at 1.90 down from 1.97 in March and 2.22 in April 2017.

The U.S. All-Milk price averaged $15.80 per cwt., up 20 cents from March but 70 cents below April 2017.

April corn averaged $3.58 per bushel, up 7 cents from March and 15 cents per bushel above April 2017. Soybeans averaged $9.83 per bushel, up 2 cents per bushel from March and 50 cents above a year ago. Alfalfa hay averaged $183 per ton, up $17 from March, and $33 per ton above a year ago.

The U.S. milk-over-feed margin is down 15 cents from March to $6.62 per cwt. based on the dairy Margin Protection Program calculation. The Daily Dairy Report says the margin was the lowest since June 2016’s $5.75 per cwt.

The April cull price for beef and dairy combined averaged $67.50 per cwt., down $1.40 from March, $4.70 below April 2017 and $4.10 below the 2011 base average of $71.60 per cwt.

Butter output up

USDA’s latest Dairy Products report shows April cheese output totaled 1.07 billion pounds, down 3.7 percent from March but 0.9 percent above April 2017. Year-to-date output stands at 4.26 billion pounds, up 2.6 percent from this time a year ago.

Italian cheese totaled 451.6 million pounds, down 6.2 percent from March but 0.8 percent above a year ago.

Mozzarella, at 351.1 million pounds, was up 1.1 percent.

American type cheese totaled 440.8million pounds, down 0.6 percent from March but 1.4 percent above a year ago.

Cheddar output, the cheese traded at the CME, totaled 318.2 million pounds, down 0.9 percent from March and 3.5 percent below a year ago, with YTD Cheddar at 1.25 billion pounds, down 1.7 percent.

Churns produced 175.3 million pounds of butter, down 3.7 percent from March but a hefty 8.3 percent above a year ago. YTD output is at 709.6 million pounds, up 4.7 percent.

Dry whey totaled 85.2 million pounds, up 0.7 percent. Stocks totaled 68.7 million pounds, down 8.5 percent from March and 19.7 percent below those a year ago.

Nonfat dry milk production totaled 166.3 million pounds, down 6.9 percent from March and 3.8 percent below a year ago. YTD output stands at 663.1 million pounds, up 5.1 percent.

Stocks fell to 274 million pounds, down 23.9 million pounds or 8.0 percent from March but are 6.6 million pounds or 2.5 percent above those a year ago.

Skim milk powder production totaled 49.3 million pounds, up 17.3 percent from March but 1.8 percent below a year ago.