California’s July Class 4b cheese milk price is $18.69 per cwt., down 38 cents from June. That’s also $3.04 above July 2013, $2.91 below the comparable federal order Class III price, and is the lowest it has been since December 2013.
The 4b average now sits at $20.35, up from $15.99 at this time a year ago, $14.02 in 2012, and $16.20 in 2011.
The 4a butter-powder milk price is a record high $23.58/cwt., up 39 cents from June, $4.97 above a year ago, and compares to the federal order Class IV price of $23.78. The 4a seven month average now stands at $23.03, up from $18.03 a year ago, $14.55 in 2012, and $19.10 in 2011. The state mandated milk price enhancements have ended and these prices reflect that termination.
$2 cheese is back; butter melting
Cash cheese is back to $2 while butter remains in a meltdown. The Cheddar blocks closed Friday at $2.00 per pound, up 3 cents on the week and 22 1/2-cents above that week a year ago. They jumped 6 cents Monday and gained another penny Tuesday, closing at $2.07 per pound.
The barrels, after plunging almost 12 cents the previous week, also closed at $2 Friday, up 4 1/4-cents on the week and 22 3/4-cents above a year ago. They were up 9 cents on Monday and ticked up another 1 1/4-cents Tuesday to close at $2.1025, 3 1/4-cents above the blocks, which are characteristically 3-5 cents below the blocks. Ten cars of block traded hands last week and six of barrel.
Cash butter, after gaining 11 cents last week and 10 3/4-cents the week before, suffered a summer meltdown last week, plunging 19 cents, to $2.40, still 96 cents above a year ago. Spot butter was unchanged Monday and Tuesday. Twenty-six loads traded hands last week in the cash market.
Cash Grade A nonfat dry milk finished Friday at $1.65 per pound, down 2 1/2-cents on the week after holding steady for seven consecutive sessions. The powder gave up a penny Monday and dropped a nickel on Tuesday to $1.59 per pound, lowest price since April 5, 2013.
Global Dairy Trade average down 8.4 percent
There was more bad news on the global dairy scene. Tuesday’s Global Dairy Trade auction saw the weighted average for all products drop 8.4 percent, following the 8.9 percent plunge in the July 15 session. The price index has pretty much seen declines since reaching its high on Feb. 4.
The downfall was led by a 11.5 percent plunge in whole milk powder, which was down 10.9 percent in the last event. That was followed by Cheddar cheese, down 10.2 percent, which was off 1.6 percent July 15, and then buttermilk powder was down 10.1 percent, after dropping 4.6 percent last time. GDT butter was down 9.6 percent, following a 1.1 percent decline last time. Skim milk powder was down 6.5 percent, following a 7.1 percent decline last time. Rennet casein was down 0.7 percent, after losing 8.9 percent in the last event. The only product showing an increase was anhydrous milkfat, up 6.0 percent, after dropping 10 percent last time.
The average GDT butter price equated to about $1.27 per pound U.S., down from $1.4261 in the July 15 event. Contrast that to CME butter, which closed Tuesday at $2.40 per pound. The GDT Cheddar cheese average was $1.70 per pound, U.S., down from $1.8887 last time. The U.S. block Cheddar CME price Tuesday was at $2.07 per pound.
GDT skim milk powder, at $1.48 per pound, U.S., is down from $1.5947, and the whole milk powder average at $1.24 per pound, U.S., is down from $1.4009 in the last event. The CME Grade A nonfat dry milk price Tuesday stood at $1.59 per pound.
Dairy’s bottom line improved in July
The preliminary July milk feed price ratio was up from the revised June level, according to the Agriculture Department’s latest Ag Prices report. The July milk-feed price ratio is at 2.44, up from 2.20 in June, and compares to 1.53 in July 2013.
The index is based on the current milk price in relationship to feed prices for a ration of 51 percent corn, 8 percent soybeans and 41 percent alfalfa hay, in other words, 1 pound of milk today can purchase 2.44 pounds of dairy feed containing that blend.
The July U.S. average all-milk price was $23.40 per cwt., up from $23.20 per cwt. in June, and compares to $19.10 per cwt. in July 2013. July corn, at $3.80 per bushel, was down 69 cents from June and $2.99 less than July 2013. Soybeans averaged $12.70 per bushel, down $1.70 from June, and $2.60 per bushel below July 2013, and alfalfa hay averaged $216 per ton, down $6 from June, but $7 per ton more than July 2013.
Looking at the cow side; the report shows the preliminary July cull price for beef and dairy combined averaged $113.00 per cwt., up $7 from June, and $30.30 above July 2013. Prices received for milk cows averaged $1,970 per head, up $160.00 from April. The 2013 average was not available due to the federal budget sequestration.
July Dairy Products Report Revised
Upon questioning of its data by HighGround Dairy’s Eric Meyer, USDA announced Monday that it would re-examine its July Dairy Products report issued Friday, due to a reporting error regarding cheese production in Idaho.
That revision came Tuesday afternoon. Meyer outlined the revision as follows:
• June Cheddar volume was revised 17.8 million pounds HIGHER, up 22 percent vs. June ’13 and 7.7 percent HIGHER than May ’14.
• June Natural American volume revised 19.5 million pounds HIGHER, UP 14.5 percent vs. June ’13 and 9.9 percent ABOVE May ’14.
June 2014 dairy product output, compared to June 2013 and year-to-date estimates, with today’s revisions included:
• Total cheese: 942.12 million lbs., up 3.3 percent; YTD 5.63 billion lbs., up 2.0 percent.
• Total Italian cheese: 409.33 million lbs., up 4.4 percent; YTD 2.46 billion lbs., up 4.6 percent.
• Mozzarella: 326.91 million lbs., up 6.1 percent; YTD 1.95 billion lbs., up 6.7 percent.
• American: 374.67 million lbs., up 3.2 percent; YTD 2.24 billion lbs., up 0.3 percent
• Cheddar: 273.86 million lbs., up 5.5 percent; YTD 1.65 billion lbs., up 0.7 percent.
• Butter: 139.88 million lbs., down 0.2 percent; YTD 981.85 million lbs., down 3.1 percent.
• Dry milk powders–Nonfat dry milk, human, 147.99 million lbs., up 13.1 percent, YTD 911.9 million lbs., up 5.0 percent.
• Skim milk powders, 51.78 million lbs., down 11.1 percent, YTD 295.54 million lbs., up 1.4 percent.
• Dry whey (total): 79.1 million lbs., down 0.6 percent; YTD 440.92 million lbs., down 12.4 percent.
• Yogurt: 396.38 million lbs., down 0.2 percent; YTD 2.44 billion lbs., up 2.7 percent.
Meyer’s original posting stated that Idaho’s June production volumes in both Cheddar and Natural American cheese were significantly lower than expectations. Month-over-month and year-over-year percentage declines reached anywhere from 28-40 percent in both categories — well beyond any historical statistical ranges. This put total June Idaho cheese production down over 21 percent from both the prior month and year. The USDA revision came quite quickly.