Cash dairy prices were mostly lower in the Good Friday holiday-shortened week, with only butter advancing. The markets had little to chew on in the way of USDA reports.
The Cheddar blocks closed Thursday at $1.53 per pound, down 1 1/2-cents on the week, unchanged on the month, but a penny above a year ago. The barrels came under pressure as product found its way to Chicago, and dropped to $1.44, down 7 cents on the week and the lowest since Feb. 15, 2018, down 3 1/4-cents on the month, and 3 cents below a year ago.
The blocks were unchanged Monday but gained 2 cents Tuesday, hitting $1.55, as traders absorbed the morning’s GDT auction and awaited Wednesday’s February’s Dairy Products report. The barrels inched up a half-cent Monday and stayed there Tuesday, at $1.4450, increasing the spread to 10 1/2-cents.
Midwestern cheesemakers tell Dairy Market News that demand is moving at steady to increasing levels. Milk intakes continue to be heavily discounted: $2 to $5 under class.
Western cheesemakers report that demand has been solid, but the relatively strong orders and ample milk supplies have pressed manufacturers to keep up.
Somebody wanted to buy butter last Wednesday and got it, as 40 loads exchanged hands, with 20 on Thursday. The price closed at $2.2150, up 2 1/2-cents on the week, up 3 1/2-cents on the month, and 10 3/4-cents above a year ago. A total of 62 cars found new homes last week.
Monday’s butter was up a half-cent and ticked up 2 more cents Tuesday, to $2.24.
FC Stone pointed out in its March 27 Early Morning Update that “historically we’ve seen downside following the big demand of Easter, but we’ll have to see how pipelines get refilled to make that call this year. In addition, European butter continues to find remarkable support at prices trading north of $2.80 per pound.”
“Central region butter makers report that spot cream is widely available but is uncertain moving ahead, as ice cream makers begin to compete more heavily. The Cold Storage report’s monthly and annual storage upticks have some in the industry “concerned.”
Churning is ongoing in the West given that higher milk loads are available. Export sales were unchanged from the previous week, and market players do not expect any big change in the near future.
Cash Grade A nonfat dry milk saw a Thursday close at 69 cents per pound, down a quarter-cent and 11 cents below a year ago.
The powder was unchanged Monday and Tuesday.
CME dry whey closed Thursday at 28 1/2-cents per pound, down a quarter-cent on the week, with two sales reported. The lagging USDA surveyed whey price was up 2.2 cents, to 26.14 cents per pound.
The whey lost a half-cent Monday and held there Tuesday at 28 cents per pound.
GDT slips
Anhydrous milkfat led the declines while butter jumped in Tuesday’s Global Dairy Trade auction. The weighted average of products offered inched 0.6 percent lower, following a 1.2 percent drop March 20 and a 0.6 percent slide on March 6. The quantity sold slipped to just under 38 million pounds, down from 41.1 million in the last event.
Anhydrous milkfat was down a bearish 7.0 percent but unchanged in the last event. Skim milk powder was down 1.8 percent after plunging 8.6 percent last time.
Gains were led by rennet casein, up 12.1 percent, after slipping 2.9 percent March 20. Butter was up 4.1 percent, after holding steady last time. Cheddar was up 2.2 percent, following a drop of 3.9 percent, and whole milk powder was up 1.6 percent, after inching 0.1 percent higher last time. Lactose was up 1.1 percent and buttermilk powder was up 1.0 percent.
FC Stone equates the GDT 80 percent butterfat butter price to $2.4313 per pound U.S. CME butter closed Tuesday at $2.24. GDT Cheddar cheese equated to $1.6688 per pound U.S. and compares to Tuesday’s CME block Cheddar at $1.55. GDT skim milk powder averaged 83.85 cents per pound and whole milk powder averaged $1.4869. CME Grade A nonfat dry milk price closed Tuesday at 69 cents per pound.
Calif. benchmark up
California’s March 4b cheese milk price is $13.96 per hundredweight, up 58 cents from February, 20 cents above a year ago and the highest 4b since November 2017. The 4b average for First Quarter 2018 stands at $13.57, down from $15.19 a year ago and compares to $13.12 in 2016.
The 4a butter-powder milk price is $13.01, up 29 cents from February, 95 cents below a year ago, but is the highest 4a price since December 2017. The three-month average stands at $12.89, down from $15.01 a year ago and $12.98 in 2016.
Federal order prices are announced by USDA on April 4.
FMMO advances
The Agriculture Department published in the March 30 Federal Register a long-awaited final decision to establish a Federal Milk Marketing Order for California. The proposed FMMO would incorporate the entire state. The final decision is based on the evidentiary record of a public hearing held in Clovis, Calif., from September to November 2015. A recommended decision regarding the proposed program was published Feb. 14, 2017.
USDA will conduct a referendum among dairy producers to determine whether they support the proposed FMMO. The referendum will be held from April 2 through May 5, 2018. The FMMO would become effective if approved by two-thirds of the voting producers, or by producers of two-thirds of the milk represented in the voting process.
A public meeting will be held for producers on Tuesday, April 10, in Clovis to answer questions as to how the order would operate.
Milk-feed ratio off
Another sizable drop in the U.S. All Milk price average, plus higher corn, soybean and hay prices pulled the February milk feed price ratio lower again. The Agriculture Department’s latest Ag Prices report shows the February ratio at 2.03, down from 2.19 in January and 2.62 in February 2017.
The U.S. All-Milk price averaged $15.30 per cwt., down 80 cents from January and a depressing $3.20 below February 2017. Michigan again scored the lowest at $13.80, with California at $14.75, and Wisconsin at $15.60.
February corn averaged $3.38 per bushel, up 9 cents from January following a 6 cent rise from December, but is still 6 cents per bushel below February 2017. Soybeans averaged $9.49 per bushel, up 19 cents per bushel from January but 37 cents per bushel below a year ago. Alfalfa hay averaged $155 per ton, up $3 from January, and $28 per ton above a year ago.
The February cull price for beef and dairy combined averaged $65.60 per cwt., up $2.30 from January, 70 cents above February 2017 but is $6 below the 2011 base average of $71.60.
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