Dairy prices continue lower
CME dairy prices were mostly lower last week. Cheddar block cheese fell to $1.55 per pound the first day of trading following the Thanksgiving break, but closed Friday at $1.5625, down 4 3/4-cents on the week and 24 3/4-cents below a year ago.
The barrels fell to $1.51 last Wednesday and finished Friday at $1.5350, down 14 cents on the week and 8 cents below a year ago. Twenty-two cars of block traded hands on the week and a whopping 62 of barrel.
The blocks tumbled 4 1/4-cents Monday and slipped three-quarters Tuesday, to $1.5125, as traders analyzed the morning’s Global Dairy Trade auction and awaited Tuesday afternoon’s October Dairy Products report. That’s the lowest block price since Aug. 31, 2017.
The barrels were up a penny and a half Monday and added 1 3/4-cents Tuesday, hitting $1.5625, 5 cents above the blocks.
Milk headed to Class III plants remained accessible following Thanksgiving weekend, reports Dairy Market News, and spot prices ranged from flat market to $4 under class. Barrel prices hovering above the blocks is typically viewed as “an indication of market instability.”
Cheese output in the West is also strong due to higher milk availability. Supplies are abundant and inventories continue to increase but demand is doing well. The falling prices have also resulted in more interest from the international market.
Cash butter saw a Friday close at $2.2150 per pound, down three-quarter-cents on the week but 3 cents above a year ago when it jumped almost 14 cents.
The butter dropped 2 1/2-cents Monday but regained a penny Tuesday, inching to $2.20 per pound.
DMN says butter production is fully active but the market tone is “somewhat bearish.”
Western butter makers report plenty of cream available to meet the remaining butter needs for 2017 but demand has been relatively steady.
Cash Grade A nonfat dry milk closed Friday at 72 cents per pound, up three-quarters but 28 3/4-cents below a year ago when it jumped 10 1/4-cents to $1.0075 per pound.
The powder lost a penny Monday but inched back up a quarter-cent Tuesday to 71 1/4-cents per pound.
Bleeding in the Global Dairy Trade auction was stopped Tuesday, reversing four previous events of decline, as the amount of product offered fell to 65.1 million pounds, after averaging 76.2 million the past eight sessions. Tuesday’s trading saw the weighted average for all products inch up 0.4 percent, following a 3.4 percent plunge Nov. 21 and 3.5 percent Nov. 7.
Leading the charge was skim milk powder, up 4.7 percent, following a drop of 6.5 percent on Nov. 21. Buttermilk powder was up 4.3 percent and rennet casein was up 3.4 percent.
Butter saw an 11.1 percent meltdown, after it dropped 5.9 percent last time. GDT Cheddar was down 3.9 percent, following a 4.2 percent loss, and anhydrous milkfat was off 0.6 percent.
FC Stone equated the GDT 80 percent butterfat butter price to $2.0246 per pound U.S. CME butter closed Tuesday at $2.20. GDT Cheddar cheese equated to $1.6764 per pound U.S. and compares to Tuesday’s CME block Cheddar at $1.5125. GDT skim milk powder averaged 80.49 cents per pound, U.S. and whole milk powder averaged $1.2836. CME Grade A nonfat dry milk price closed Tuesday at 71 1/4-cents per pound.
Benchmark price up
The November Federal order Class III benchmark milk price is $16.88 per hundredweight, up 19 cents from October, 12 cents above November 2016, and equates to $1.45 per gallon. It ties the February price for the highest Class III price in 2017 and is $1.36 above California’s comparable Class 4b cheese milk price. The 11 month average stands at $16.24, up from $14.64 at this time a year ago and $15.92 in 2015.
Monday settlements of Class III futures had a December price at $15.37, which would result in a 2017 average of $16.17, up from $14.87 in 2016 and $15.80 in 2015.
The Class IV price is $13.99, down 86 cents from October but 23 cents above a year ago and the lowest Class IV since November 2016. Its 11 month average stands at $15.31, up from $13.66 a year ago and $14.24 in 2015.
Calif. price down
California’s November 4b cheese milk price is $15.52 per hundredweight, down 65 cents from October, $1.93 below a year ago, and $1.36 below the comparable Federal order Class III price. That gap has varied from a low of 16 cents in July to a high of $2.05 in March. The 11-month 4b average stands at $15.35, up from $14.06 a year ago and $14.62 in 2015.
The 4a butter-powder price is $13.62, down 89 cents from October, 7 cents below a year ago, and the lowest 4a price since February 2017. Its 11-month average is at $15.09, up from $13.29 a year ago and $14.06 in 2015.
A higher All Milk price and lower soybean prices kept the October milk feed price ratio unchanged. October’s 2.45 is the same as September but compares to 2.38 in October 2016, according to the latest Ag Prices report.
The U.S. average All-Milk price was $17.90 per cwt., up a dime from September and $1.20 above October 2016.
October corn averaged $3.26 per bushel, down a penny from September and 3 cents below October 2016. Soybeans averaged $9.18 per bushel, down 17 cents from September and 12 cents per bushel below a year ago. Alfalfa hay averaged $152 per ton, up $3 per ton from September and $17 per ton above a year ago.
The October cull price for beef and dairy combined averaged $65.40 per cwt., down $4.50 from September, after dropping $6.40 the previous month, dead even with October 2016, and $6.20 below the 2011 base average of $71.60.
The quarterly price received for milk cows averaged $1,610.00 per head in October, down $10 from July and $80.00 below October 2016.