Columnist Lee Mielke wraps up the week’s dairy industry news.
Most dairy prices moved higher last week despite a lot of product coming to Chicago.
Cash cheddar blocks closed the first Friday of May at $1.60 per pound, up 12 cents on the week, 29 1/2-cents above a year ago, and the highest price since Feb. 15.
The barrels finished at $1.45, up 3 1/4-cents on the week, 15 cents above a year ago when they plunged 11 1/4 cents, but were a much higher than normal 15 cents below the blocks. Four cars of block traded hands on the week at the CME and a whopping 54 cars of barrel.
Monday saw the blocks lose a penny and hold there Tuesday at $1.59. The barrels were unchanged Monday but gained a penny Tuesday, advancing to $1.46 on 10 trades.
FC Stone’s May 4 Early Morning Update stated, “It’s not shocking that heavier volume is being brought to the exchange as heavy milk flows and ramped-up cheese production are testing capacity levels and have pushed inventories into record territory.”
Dairy Market News reported that milk remains readily available for cheese producers in the Midwest. Inventories are generally reported as long. Ample milk supplies are placing pressures on some Western manufacturers. Inventories are also heavy, especially for barrels.
Butter closed May 5 at $2.1075 per pound, up a quarter-cent on the week and 5 3/4-cents above a year ago, with 43 cars sold last week, the highest total since August 2014.
The butter ticked up 2 cents Monday but gave back 2 1/4-cents Tuesday, slipping to $2.1050.
Class II manufacturers’ interests in cream have risen noticeably, according to DMN, yet cream remains available for churns in the Central region. Butter demand is generally steady but butter inventories are building.
Spot Grade A nonfat dry milk closed the week at 84 1/2-cents per pound, down 2 1/4-cents but 7 cents above a year ago. Thirteen cars exchanged hands.
It inched up a half-cent Monday and gained three-quarters Tuesday, hitting 85 3/4-cents per pound.
Milk price drops
The April federal order benchmark Class III milk price is $15.22 per hundredweight, down 59 cents from March but $1.59 above April 2016 and 92 cents above California’s Class 4b cheese milk price. It also equates to $1.31 per gallon. It is the lowest Class III price since October 2016 but that may be the bottom for 2017. The May contract settled Tuesday at $15.55 and June was at $15.86, with a peak at $16.99 in September.
The Class III average is $16.17, up from $13.72 a year ago and $15.75 in 2015.
The April Class IV price is $14.01, down 31 cents from March, $1.33 above a year ago, but the lowest Class IV since November 2016. Its four-month average is at $15.03, up from $13.06 a year ago and $13.59 in 2015.
Where did milk go?
USDA’s latest Dairy Products report shows March cheese production totaled 1.1 billion pounds, up 12.7 percent from February and 3.3 percent above March 2016. Year to date cheese output stands at 3.0 billion pounds, up 1.6 percent from a year ago.
California produced 216.5 million pounds of that cheese, up 0.7 percent from a year ago. Wisconsin, at 288.4 million pounds, was up 5.6 percent from a year ago. Idaho output was up 0.3 percent and Minnesota was up 3.8 percent.
Italian cheese output totaled 468.5 million pounds, up 15.2 percent from February and 2.2 percent above a year ago, with YTD output at 1.3 billion pounds, up 0.2 percent. Mozzarella, at 361.2 million pounds, was up 0.9 percent, with YTD at 1.0 billion pounds, down 0.7 percent.
Total American type cheese production hit 415.5 million pounds, up 11.2 percent from February and 3.5 percent above a year ago. YTD totaled 1.2 billion pounds, up 3.1 percent. Cheddar output amounted to 309.3 million pounds, up 8 percent, with YTD at 896.8 million pounds, up 6.6 percent from a year ago.
Churns produced 175.5 million pounds of butter, up 9 percent from February and 0.3 percent above a year ago. YTD totaled 514.4 million pounds, up 0.1 percent.
California butter totaled 50.7 million pounds, down 8.6 from a year ago.
Dry whey totaled 88 million pounds, down 6.4 percent, with YTD hitting 248.3 million pounds, up 3 percent.
Nonfat dry milk production totaled 159.7 million pounds, down 13 percent from February and 7.2 percent below a year ago, with YTD at 454.5 million pounds, up 0.4 percent. Skim milk powder production totaled 52.7 million pounds, up 31.8 percent from February and 30 percent above a year ago. YTD output is at 148 million pounds, up 12.2 percent.
March nonfat dry milk stocks stood at 247 million pounds, down 5.8 percent from February but 6.4 percent above a year ago.