California Class I milk prices inch upward
By LEE MIELKE
For the Capital Press
The California Department of Food and Agriculture announced the state’s July Class I milk prices Tuesday afternoon at $25.13 per hundredweight for the north and $25.40 for the south. Both are up 3 cents from June and $5.54 above July 2013.
The northern average now stands at $24.62, up from $19.82 at this time a year ago and $17.79 in 2012. The southern Class I average is now at $24.89, up from $20.09 a year ago and $18.06 in 2012. The federal order Class I base price will be announced by USDA on June 18.
$2 cheese returns
The Chicago Mercantile Exchange saw $2 per pound cheese return last week.
The 40-pound Cheddar blocks hit $2.03 on Wednesday and closed Friday at $2.05 per pound, up 9 cents on the week and 30 1/4-cents above a year ago. The 500-pound Cheddar barrels closed at $1.9675, up 3 1/2-cents on the week, 20 3/4-cents above a year ago, and 8 1/4-cents below the blocks. The blocks, as of Tuesday, were trading at $2.06 and the barrels at $1.97 per pound. Six cars of block traded hands last week and 18 of barrel.
Cash butter headed down last week, reversing two weeks of gain, and closed Friday at $2.2225 per pound. That’s down 7 3/4-cents on the week but still 67 3/4-cents above a year ago and was trading Tuesday at $2.21. Twenty-nine cars were sold last week. Cash Grade A nonfat dry milk closed Friday at $1.8575 per pound, up 1 1/4-cents, and was at $1.85575 on Tuesday. Three cars were sold last week in the cash market.
FO benchmark milk price drops
The Agriculture Department announced May federal order milk prices June 4. The benchmark Class III price is $22.57 per hundredweight, down $1.74 from April, $4.05 above May 2013, $3.23 above California’s comparable 4b price, and equates to about $1.94 per gallon.
Class III futures settled Tuesday as follows: June, $21.27; July, $20.54; August, $20.44; September, $20.41; October, $20.03; November, $19.53; and December, $19.03 per cwt.
The five-month Class III average now stands at $22.94, up from $17.69 at this time a year ago and $15.96 in 2012.
The May Class IV price is $22.65/cwt., down 69 cents from April but $3.76 above a year ago. The Class IV average for the year thus far now stands at $23.08, up from $18.02 a year ago and $15.24 in 2012.
California cheese milk price gap grows
Amid the ongoing discussion in California, the nation’s No. 1 milk producer, over formation of a possible federal milk marketing order, comes new fuel to the fire. The federal order Class III milk price was announced Monday by USDA at $22.57 per hundredweight, $3.23 per cwt. above California’s comparable 4b cheese milk price, and that despite temporary price enhancement mandated by the California Department of Food and Agriculture.
This is the biggest price gap so far this year, up from $2.58 last month, a far cry from the 84 cent difference in January, and the biggest gap since December 2011.
The five month 2014 Class III average now stands at $22.57 per cwt. against California’s five month Class 4b average at of $20.94.
Exports increase in April
U.S. dairy exports remained strong in April, coming in slightly below the record volume and value levels established in March, according to the U.S. Dairy Export Council. U.S. suppliers shipped 184,501 tons of milk powders, cheese, butterfat, whey and lactose in April, up 8 percent from last year. Total value of all exports was $688.5 million, up 26 percent.
Nearly two-thirds of U.S. sales in April went to the top four customers: Southeast Asia (up 17 percent compared to a year ago), Mexico (up 12 percent), Middle East/North Africa (up 52 percent) and China (up 32 percent).
Exports of nonfat dry milk/skim milk powder topped 53,000 tons for just the third time ever, with nearly two-thirds of April sales going to Southeast Asia and Mexico.
Cheese exports in April were down slightly from March’s record level, but they were still the second-highest figure ever at 33,759 tons. This total was 32 percent higher than last year. In April, sales to South Korea (6,847 tons) and Japan (6,536 tons) exceeded sales to Mexico (5,769 tons), typically our largest customer.
U.S. exporters also continue to expand shipments of whole milk powder (up 93 percent in April) and milk protein concentrate (up 122 percent). Major customers were Vietnam and China. Top buyers for MPC were New Zealand and Morocco.
Global Dairy Trade average down, cheddar up
This week’s Global Dairy Trade auction saw the weighted average for all products drop 4.2 percent, following the 1.8 percent drop in the May 20 event and a 1.1 percent decline in the May 6 event. The price index has seen eight declines since reaching its recent high Feb. 4.
The downfall Tuesday was led by a 10.2 percent drop in rennet casein (up 4.6 percent in the last event), and an 8.5 percent decline in whole milk powder (down 1.1 percent in last event). Anhydrous milkfat was down 5 percent (up 1.9 percent in last event), butter milk powder was down 1.9 percent (same as last event), and GDT butter was unchanged (down 3.8 percent in the last event.
The good news is the increase in Cheddar cheese, up an average 8 percent today, following a 2.1 percent decline in the last event. Skim milk powder was up 2.1 percent (down 3.5 percent last time).
FC Stone reports the average butter price equated to about $1.6485/lb. U.S., down from $1.6631/lb. in the May 20 event.