Ag News

Dairy markets seeking direction

View the post and author information at its original source

Columnist Lee Mielke wraps up the week’s dairy industry news.

Cash dairy prices started the new year looking for direction.

Cheddar block cheese closed the first Friday of 2017 at $1.67 per pound, up a penny on the holiday shortened week and 21 cents above a year ago.

The barrels closed at $1.5750, down 2 1/2-cents on the week and 3 1/2-cents above a year ago.

Prices were unchanged Monday, with four bids of barrel at $1.5650 going unfilled. The blocks jumped a nickel Tuesday hitting $1.72, while the barrels were up 5 1/2-cents, to $1.63, 9 cents below the blocks.

Milk remains available for Midwestern cheese producers, reports Dairy Market News but milk prices are beginning to increase following the discounted holiday influx.

Cheese demand, which was slow the last week of 2016, was better than expected New Year’s Week.

Butter gave up 4 3/4-cents last week, falling to $2.22 per pound, but 18 1/2-cents above a year ago. Twenty-one cars were sold.

A rebound came Monday, jumping 8 cents to $2.30, but held there Tuesday.

Central butter production is active due to the availability of cream following the holidays. With many schools reopening, butter producers face readily available cream from bottlers and much of it is clearing to churns. Retail butter demand is seasonally slow, while food service remains steady to slightly slower. Inventories are steady to building.

Cash Grade A nonfat dry milk closed Friday at $1.0525 per pound, up 3 1/4-cents on the week, the highest spot price since March 4, 2015, and 31 cents above a year ago.

The powder dropped 3 1/2-cents Monday but inched back a quarter-cent Tuesday to $1.02.

Milk prices differ

Benchmark milk prices in California and federal orders (FO) ended 2016 in different directions. The Agriculture Department announced the December FO Class III price at $17.40 per hundredweight, up 64 cents from November, $2.96 above a year ago, and the highest Class III since December 2014. It is 81 cents above California’s comparable Class 4b price. It equates to $1.50 per gallon, up from $1.44 in November and $1.24 a year ago.

That put the 2016 Class III average at $14.87, down from $15.80 in 2015 and $22.34 in 2014, and the lowest annual average since 2010.

Monday’s Class III futures portended a January Class III at $16.62, February at $17.14, and March at $17.29, with a peak of $17.82 in September.

The December FO Class IV price is $14.97, up $1.21 from November but 55 cents below a year ago. Its 12-month average is $13.77, down from $14.35 in 2015 and $22.09 in 2014.

California’s December Class 4b cheese milk price was $16.59 per cwt., down 86 cents from November but $3.69 above a year ago. The 2016 average is $14.27, down from $14.47 in 2015 and $19.93 in 2014, and the lowest since 2010.

The 4b trailed the FO Class III price by an average of 71.6 cents in 2016, ranging from a high of $1.39 in May to a low of 19 cents in June. But, the November 4b price topped the FO price by 69 cents for the first time since December 2009. The 2016 lag average is down from $1.33 in 2015 and $2.41 in 2014.

The December Class 4a butter-powder milk price is $14.79 per cwt., up $1.10 from November, 24 cents above a year ago, and the highest 4a price since November 2015. The 2016 4a averaged $13.41, down from $14.10 in 2015 and $22.00 in 2014.

November cheese up

USDA’s latest Dairy Products report shows November cheese output totaled 1.01 billion pounds, down 2.6 percent from October but 2.7 percent above November 2015. That brought year-to-date production to 11.01 billion pounds, up 2 percent from a year ago.

California produced 209.4 million pounds of that cheese, down 1.6 percent from October but 4.8 percent more than a year ago. Wisconsin, at 265.5 million pounds, was down 2.3 percent from October but 3.8 percent above a year ago. Idaho was down 2.8 percent from a year ago.

U.S. churns produced 143.7 million pounds of butter, up 1.5 percent from October but 5.7 percent below a year ago, with YTD output at 1.72 billion pounds, up 3.0 percent.

Nonfat dry milk production totaled 126.8 million pounds, down 10 percent from October, 0.9 percent below a year ago, with YTD output at 1.59 billion pounds, down 4.7 percent. Skim milk powder production, at 48.1 million pounds, was up 7.0 percent from a year ago, with YTD output at 504.6 million pounds, up 25.3 percent from 2015.

Nonfat dry milk stocks totaled 215.8 million pounds, down 3.9 percent from October but 8.5 percent above a year ago.

To Top