Cash cheese and butter retreated last week. Traders anticipated a short three-day week this week, due to Thanksgiving, but with no lack of fodder. The October Milk Production report was issued Monday, the Global Dairy Trade auction was Tuesday, and the October Cold Storage and Slaughter reports are out Wednesday, the final day of trading for the week, plus announcement of 2017’s final Federal order Class I base milk price.
CME block Cheddar closed Friday at $1.62 per pound, down 9 cents on the week and 29 cents below a year ago when it peaked for the year at $1.91.
The barrels finished at $1.6275, down 12 1/2-cents, 12 1/4-cents below a year ago, and three-quarters above the blocks. Two cars of block sold on the week but 39 of barrel.
The blocks lost 2 cents Monday but inched up a half-cent Tuesday, to $1.6050.
The barrels were up 1 1/4-cents Monday and jumped 3 1/2-cents Tuesday, hitting $1.6750, 7 cents atop the blocks.
Midwest cheese sales were fairly consistent last week with those of the previous week, reports Dairy Market News. Traditional cheesemakers reported steady to balanced demand while pizza cheesemakers continue to see seasonally healthy sales. Milk is becoming more available and spot loads ranged $1.50 under to $1.00 over class.
Cheese production in the West is higher as milk production is mostly increasing. The majority of plants are running at or close to full capability.
Cash butter crept up to $2.28 per pound last Tuesday but retreated from there and closed Friday at $2.2150, down 4 cents on the week but 18 1/2-cents above a year ago, with 22 carloads finding new homes last week.
It inched a half-cent lower Monday but reclaimed a quarter-cent Tuesday, creeping to $2.2125.
DMN says interest in both unsalted and salted butter continues to maintain strength for Central region butter makers. Butter exports are characteristically 82 percent fat and unsalted where as domestic butter is 80 percent fat and salted. Producers point out that unsalted demand is stronger, but the availability of unsalted loads is limited.
Western butter makers say there is plenty of cream available and output is generally active as manufacturers work to fulfill holiday demand.
Grade A nonfat dry milk closed Friday at 72 1/2-cents per pound, up a quarter-cent on the week but 17 1/2-cents below a year ago.
The powder lost a penny both Monday and Tuesday, dipping to 70 1/2-cents per pound, the lowest spot since April 2016.
Milk output up
October U.S. milk output was up for the 46th consecutive month, totaling 16.7 billion pounds in the top 23 states, according to preliminary USDA data, up 1.5 percent from October 2016. The 50-state total, at 17.8 billion pounds, was up 1.4 percent. Revisions lowered the original September 23-state estimate by 9 million pounds, now put at 16.2 billion pounds, up 1.1 percent from a year ago.
Milk cow numbers totaled 8.74 million head in the 23 states, down 1,000 from September but 67,000 more than a year ago. The 50-state total, at 9.4 million head, was unchanged from September but 65,000 above a year ago. Output per cow averaged 1,917 pounds in the 23 states, up 13 pounds.
California trailed a year ago for the 10th consecutive month, down 1.5 percent, due to 13,000 fewer cows milked and a 15-pound loss per cow. Wisconsin made up the shortfall, up 2.3 percent, on a 45-pound gain per cow. Cow numbers were unchanged.
Arizona showed the biggest gain, up 6.6 percent, with Texas not far behind at 5.3 percent, thanks to 25,000 more cows and a 5-pound gain per cow. Idaho inched up 0.2 percent, on 4,000 additional cows but output per cow was off 10 pounds. Michigan was up 3.3 percent, thanks to a 40-pound gain per cow and 6,000 more cows. Minnesota was up 2.9 percent on a 65-pound gain per cow, but cow numbers were down 4,000.
New Mexico was up 1.2 percent, despite a drop per cow of 25 pounds, but there were 13,000 more cows milked. New York was off 0.1 percent on a 15-pound loss per cow but cow numbers were up 4,000. Pennsylvania inched 0.7 percent higher on a 15-pound gain per cow offsetting a loss of 1,000 cows. Washington State was down 0.7 percent on a 15-pound loss per cow. Cow numbers were unchanged. Most analysts viewed the report as neutral to the market.
GDT prices down
The global dairy market isn’t offering the U.S. market much hope. While the Global Dairy Trade celebrated its 200th event Tuesday, the weighted average for all products offered saw a 3.4 percent plunge, following a 3.5 percent dip Nov. 7, a 1.0 percent drop Oct. 17 and 2.4 percent on Oct. 3.
Skim milk powder was down 6.5 percent, after it climbed 1.2 percent Nov. 7. Butter had a 5.9 percent meltdown, after it dropped 3.6 percent last time. Cheddar was down 4.2 percent following a 2.8 percent decline, and whole milk powder was down 2.7 percent after it dropped 5.5 percent.
FC Stone equated the GDT 80 percent butterfat butter price to $2.2763 per pound U.S. CME butter closed Tuesday at $2.2125. GDT Cheddar cheese equated to $1.7376 per pound U.S., and compares to Tuesday’s CME block Cheddar at $1.6050. GDT skim milk powder averaged 77.14 cents per pound and whole milk powder averaged $1.2603 U.S. CME Grade A nonfat dry milk price closed Tuesday at 70 1/2-cents per pound.