GDT auction down slightly

Tuesday’s Global Dairy Trade auction saw its weighted average of products offered slip 0.4%, following a 0.2% slippage on Aug. 20 and 2.6% on Aug. 6. Sellers brought 87.5 million pounds of product to the market, up from 75.9 million in the last event and the highest total since Nov. 20, 2018.

The losses were led by anhydrous milkfat, down 1.5%, which follows a 3.7% drop on Aug. 20.

Butter, interestingly, was unchanged after falling 3.4% last time. Lactose was down 0.9%, Cheddar was off 0.8% after advancing 0.8% in the last event, and whole milk powder was off 0.8%, following a 2.1% rise.

Buttermilk powder was up 3.4% and rennet casein was up 4.6.

FC Stone equated the GDT 80 percent butterfat butter price to $1.7829 per pound U.S. while CME butter closed Tuesday at $2.21.

GDT Cheddar cheese equated to $1.7357 per pound, down 1.4 cents from the last event and compares to Tuesday’s CME block Cheddar at $1.94.

GDT skim milk powder averaged $1.1338 per pound and compares to $1.1239 last time.

Whole milk powder averaged $1.3952, down from $1.4061. CME Grade A nonfat dry milk closed Tuesday at $1.0475 per pound.

Cheese higher

CME cheese shot higher the last week of August. The Cheddar blocks hit a new high for 2019 at $1.93 per pound, up 5 cents on the week and 23 1/2-cents above a year ago.

The barrels finished at $1.7375, up 7 1/4-cents on the week and 9 1/4-cents above a year ago; 22 cars of block traded hands on the week at the CME and 36 of barrel.

The markets were closed Labor Day but Tuesday’s trading took the blocks a penny higher to $1.94, as traders absorbed the morning’s GDT and anticipated Wednesday afternoon’s July Dairy Products report. That’s the highest CME price since Nov. 10, 2016.

The barrels gained a half-cent Tuesday, inching to $1.7425, an unsustainable 19 3/4-cents below the blocks.

Tightness on milk production is constraining the availability of fresh Cheddar amid good domestic cheese demand, according to FC Stone’s Sept. 3 Early Morning Update. The 4-week rolling slaughter average dropped below year-ago levels for the first time all year, says FC Stone, “but we’re still killing them faster than we can replace them.”

Typical fall demand is helping maintain cheese orders, according to Midwest cheese producers, and block and process cheeses requests are strong, according to Dairy Market News. Students are returning to classrooms spurring food service buying and school milk bottling is pulling heavy volumes from cheese vats but manufacturers are still finding adequate amounts of milk. Spot milk offers were not prevalent early last week but contacts expected more discounted loads to become available over the Labor Day weekend.

Western cheesemakers relay that cheese demand is strong. U.S. cheese prices have been well above international levels for some time, making exports more challenging, but contacts are still seeing steady interest. The domestic pull on supplies has reduced inventories and manufacturers are running at or near full capacity. Milk supplies are in good balance with processing, says DMN.

Butter fell to $2.1850 per pound last Thursday, lowest since Dec. 19, 2018, after plunging 11 1/4-cents the previous week, but closed Friday at $2.19, 3 3/4-cents lower on the week and 2 1/2-cents below a year ago.

The butter was up 2 cents Tuesday, hitting $2.21 per pound.

Churning was fairly active last week as cream was plentiful in the Central region. Bulk butter continues to be available and offered at discounts, says DMN.

The western butter market tone kept its stability of the previous week. Restaurant and food service sales are very good but retailer demand was down. Cream availability has been increasing since the reopening of schools and ice cream makers are demanding fewer loads for their production.

Grade A nonfat dry milk climbed to $1.0475 per pound last Tuesday but closed Friday at $1.04, up a quarter-cent on the week and 15 1/2-cents above a year ago.

Tuesday’s powder gained three-quarters and climbed back to $1.0475, highest since July 1.

Whey closed Friday at 39 cents per pound, down a half-cent on the week and 11 cents below a year ago.

The whey was unchanged Tuesday.

Milk-feed ratio up

A higher All Milk price and lower hay price upped the July milk feed price ratio, first positive move since March. The latest Ag Prices report put the ratio at 2.16, up from 2.08 in June and compares to 1.93 in July 2018.

The U.S. All-Milk price averaged $18.70 per hundredweight (cwt.), up 60 cents from June and $3.20 above July 2018. California’s All Milk price was $18.60, up 50 cents from June and $3.46 above a year ago. Wisconsin’s, at $18.80, was up 90 cents from June and $3.40 above a year ago.

The national corn price averaged $4.16 per bushel, up 18 cents from June and follows a 35-cent jump last month and was up 69 cents per bushel from July 2018.

Soybeans averaged $8.37 per bushel, up 6 cents from June, following a 29 cent jump, but is 71 cents per bushel below a year ago. Alfalfa hay averaged $183 per ton, down $10 from June but $4 per ton above a year ago.

The July cull price for beef and dairy combined averaged $67.00 per cwt., up $1.10 from June, 20 cents above July 2018, but $4.60 below the 2011 base average of $71.60 per cwt.

The Daily Dairy Report’s Sarina Sharp states that “The Dairy Margin Coverage program’s national average income-over-feed margins reached $9.47 per cwt. in June, up 47 cents from May. Margins slipped 4 cents from June to July, as higher cash corn prices offset a 60-cent increase in the All-milk price. Despite larger milk checks, dairy producers are still strapped for cash,” she concludes.

Farmer allies

The Wisconsin-based American Dairy Coalition has sided with Washington state dairy producers and their Save Family Farming organization over an Environmental Protection Agency nitrate study completed in 2013 that falsely accused dairy operations. You’ll recall I reported on the issue in mid-July.

The ADC sent a letter to EPA Director Andrew Wheeler echoing the sentiments of their Washington counterparts, requesting that he submit “the flawed and damaging report in order to attain the science review it never received.”

The ADC said it is “concerned for the farmers that have already been severely affected by this so-called scientific research study report and believes EPA must stop a dangerous precedence from being set which could impact other farmers throughout the U.S.”

Wheeler was also urged to remove the study from further enforcement action and litigation pending the review because “it is vital that the administration demonstrate their commitment to maintaining the integrity and transparency of science. The current status of this report sets a very unfortunate precedence for the value of science-based actions and represents a profound opportunity to preserve fundamental principles and standards,” said Laurie Fischer, CEO of the ADC. “Support for this administration has been strong from the farm community because of positive changes in the EPA. However, the lack of action in carrying out this scientific peer review may cause that support to wane.”

The letter also stated, “This report, proven false by 15 national agricultural science experts, was developed without the peer-review required on ‘influential science information’ as the study was categorized. When approached about the error, staff attempted to conceal the failing by falsely claiming the report was not categorized as ‘influential’, but ‘other,’ allowing for full discretion in peer reviews.”

“The EPA Yakima Nitrate Report began in 2010 and was published in 2012 and 2013,” the ADC argues. “Despite some of nation’s top scientists and agronomists finding the study to be deeply flawed and other government agencies cautioning its use, EPA Region 10 staff still used the study. This led to highly disciplinary enforcement and threats of federal litigation, which has devastated four large dairy farms. Specifically, these four dairies were pressured into signing a very punitive Administrative Order on Consent, resulting in the loss of one dairy and requiring the remaining to spend upwards of $15 million to comply,” the ADC states.

“The report has also been used by an Oregon environmental attorney to force extremely costly settlements with a number of Washington dairy farms, resulting in the loss of farms and creating extreme distress within the entire Washington dairy community,” according to the ADC.

More details can be found at

From: Capital Press

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