Dairy prices continue to undulate
CME dairy prices are on a roller coaster again. Block cheddar fell to $1.6025 per pound last Wednesday, the lowest price since Sept. 21, 2017, then jumped 11 1/4-cents Thursday, and closed Friday at $1.71, down a half-cent on the week and 17 1/2-cents below a year ago.
The barrels dipped to $1.70 last Tuesday, then gained a nickel Thursday, and finished Friday at $1.7525, up 3 3/4-cents on the week, a quarter-cent below a year ago, and an inverted 4 1/4-cents above the blocks.
The blocks inched up a quarter-cent Monday, only to give it back Tuesday, returning to $1.71.
The barrels dropped 5 1/4-cents Monday and stayed there Tuesday, at $1.70.
Midwestern cheese producers report that sales are steady to slower as the holidays approach, according to Dairy Market News. Discounted milk prices were reported again, as loads ranged from $1 under to $1 over Class III.
Western cheesemakers report solid domestic demand and some export interest. With plentiful milk available, a number of processors are running at or near full capacity. Stocks are heavier than normal.
Cash butter fell to $2.18 per pound last Wednesday, lowest price since May 10, 2017, then rallied and closed Friday at $2.2550, up 2 1/4-cents on the week and 24 1/2-cents above a year ago, with 50 cars trading last week.
It gave up a half-cent Monday, only to gain 3 cents Tuesday and shimmy up to $2.28.
Cream to churns is becoming more available ahead of the holidays. Bulk butter sales are picking up as prices have steadily declined in recent weeks. Midwest contacts point to declining EU butter prices and suggest price trends domestically are mirroring European slides.
Western contacts report that butter prices are currently good but still lower compared to last year at this time. Butter production is active as cream is readily accessible. However, to better manage inventories and production, some manufacturers are putting off churning until after Christmas and shipping cream to Mexico.
Cash Grade A nonfat dry milk closed Friday at 72 1/4-cents per pound, up a quarter-cent on the week but 15 1/2-cents below a year ago.
The powder moved 1 1/4-cent higher Monday and gained three quarters Tuesday, hitting 74 1/4-cents per pound.
The Agriculture Department lowered its 2017 and 2018 milk production forecasts in its latest World Agricultural Supply and Demand Estimates report, due to an expected slower pace of growth in milk per cow and slightly lower cow numbers.
2017 production and marketings were projected at 215.8 billion and 214.8 billion pounds, respectively, down 400 million pounds from last month. If realized, 2017 production would still be up 3.4 billion pounds or 1.6 percent from 2016.
2018 production and marketings were projected at 219.7 billion and 218.7 billion pounds, respectively, down 700 million pounds from last month. If realized, 2018 production would be up 3.9 billion pounds or 1.8 percent from 2017.
The 2017 butter, nonfat dry milk and whey prices were lowered from the previous month, but the price forecast for cheese was raised. All dairy product prices for 2018 were lowered on large supplies and global competition.
The 2017 Class III milk price forecast was unchanged from last month as the expected decline in whey is offset by the higher cheese price. Look for the 2017 average to range $16.15 to $16.25 per hundredweight, up from $14.87 in 2016 and $15.80 in 2015. The 2018 average is projected to range $15.50-$16.40, down 50 cents from last month’s estimate.
The Class IV price forecast was reduced from the previous month on lower forecast butter and NDM prices. The 2017 Class IV average is projected to range $15.10-15.30, down 15 cents from last month’s estimate, and compares to $13.77 in 2016 and $14.35 in 2015. The 2018 average is estimated at $14.15-$15.15, down 55 cents from last month’s projection.
Calif. Class I drops
California’s December Class I milk prices were announced at $17.95 per cwt. for the north and $18.23 for the south, down 54 cents and 53 cents, respectively, from November, $1.27 and $1.26, respectively, below December 2016, and the lowest since June 2017.
That put the year’s average at $17.98 for the north, up from $16.24 in 2016 and $17.69 in 2015. The southern average, at $18.26, compares to $16.53 in 2016 and $17.96 in 2015.
Fluid sales down
U.S. fluid milk sales were down again. September packaged fluid sales totaled 4.01 billion pounds, down 2.8 percent from September 2016.
Conventional product sales totaled 3.8 billion pounds, down 2.7 percent from a year ago; organic products, at 208 million pounds, were even down, off 4.2 percent. Organic represented about 5.2 percent of total sales for the month.
Whole milk sales totaled 1.2 billion pounds, up 3.1 percent from a year ago, up 2.4 percent year to date, and made up 30.9 percent of total sales in the month. Skim milk sales, at 338 million pounds, were down 10.8 percent from a year ago and down 12.2 percent year to date.
Total packaged fluid milk sales in the nine-month period totaled 35.7 billion pounds, down 2.2 percent from the same period a year ago.
Year-to-date sales of conventional products, at 33.7 billion pounds, were down 2.4 percent; organic products, at 1.9 billion pounds, were up just 0.2 percent. Organic represented about 5.4 percent of total fluid milk sales so far in 2017.