Cash dairy prices saw little change last week as traders absorbed the December Dairy Products report.
Block Cheddar closed Friday at $1.4625 per pound, down a penny on the week and 27 3/4-cents below a year ago. The barrels finished a half-cent higher at $1.3250, 38 1/4-cents below a year ago.
The blocks jumped 5 1/2-cents Monday and stayed there Tuesday at $1.5175, as results of Tuesday’s Global Dairy Trade were analyzed. The barrels were up 4 cents Monday and added a half-cent Tuesday, inching to $1.37, 14 3/4-cents below the blocks.
Dairy Market News reports that Midwest cheese production varies by plant but cheese sales are “generally meeting expectations.”
Ample milk supplies are keeping many Western facilities at or near capacity.
Cash butter closed Friday at $2.1150 per pound, down 1 1/2-cents on the week and 4 1/4-cents below a year ago.
The butter dropped 3 1/2-cents Monday slipping to $2.08, the lowest price since April 24, 2017, but regained a half-cent Tuesday.
Butter sales are seasonally quiet but meeting seasonal expectations. Cream remains available from within and outside the Midwest.
Western output is heavier due to plentiful cream supplies.
Cash powder closed Friday at 72 1/4-cents per pound, up 1 1/4-cents but 21 3/4-cents below a year ago. Monday took the powder up a penny and a half and it gained another half-cent Tuesday, to 74 1/4-cents per pound, highest since Nov. 16, 2017.
GDT up 5.9 percent
Hopes got another lift in Tuesday’s Global Dairy Trade auction, when the weighted average of all products offered shot up 5.9 percent, the biggest rise since Nov. 1, 2016, and up from the 4.9 percent gain on Jan. 16.
Butter was up 7.9 percent, after leading the gains last time with an 8.8 percent advance. Whole milk powder was up 7.6 percent, skim milk powder and Cheddar cheese were both up 7.2 percent and anhydrous milkfat was up 0.5 percent.
FC Stone equated the GDT 80 percent butterfat butter price to $2.3351 per pound U.S. CME butter closed Tuesday at $2.0850. GDT Cheddar equated to $1.6960 per pound U.S. and compares to Tuesday’s CME block Cheddar at $1.5175. GDT skim milk powder averaged 87.62 cents per pound and whole milk powder averaged $1.4634 U.S. CME Grade A nonfat dry milk closed Tuesday at 74 1/4-cents per pound.
The first Federal order benchmark milk price of 2018 was not good news for farmers. The Class III fell to $14.00 per hundredweight, down $1.44 from December 2017 and $2.77 below January 2017, lowest Class III since June 2016, but is 63 cents above California’s comparable 4b price. The Class III price equates to $1.20 per gallon, down from $1.33 in December and $1.44 a year ago.
Monday’s Class III futures portended a February price at $13.74; March, $13.73; and April at $13.87, with a peak at only $15.78 in October.
The January Class IV price is $13.13, down 38 cents from December, $3.06 below a year ago, and the lowest Class IV since May 2016.
California’s January 4b cheese milk price is $13.37 per cwt., down 15 cents from December, $2.62 below a year ago and the lowest 4b price since June 2016.
The 4a butter-powder price is $12.93, down 43 cents from December, $2.74 below a year ago, and the lowest 4a price since May 2016.
Marketing order delay
The California Department of Food and Agriculture turned down a request from Western United Dairymen and California Dairy Campaign for a hearing to consider changes to the state’s class pricing formulas for a 12-month period in response to low milk prices.
Meanwhile, the USDA announced a delay of the California Federal Milk Marketing Order rulemaking proceedings to await a decision by the U.S. Supreme Court regarding “a related legal matter.”
At issue is the use of an administrative law judge presiding over the Sept. 22, 2015, hearing. The challenge questions the constitutional requirements of the practice in general and not specific to the FMMO.
December cheese up
USDA’s latest Dairy Products report pegs December cheese output at 1.09 billion pounds, up 3.0 percent from November and 2.6 percent above December 2016. Total cheese output for 2017 hit 12.48 billion pounds, up 2.6 percent from 2016.
Italian cheese totaled 466.6 million pounds, up 2.4 percent from November and 0.9 percent above a year ago, with YTD output at 5.38 billion pounds, up 1.7 percent.
Mozzarella, at 363.4 million pounds, was up 1.4 percent, with YTD at 4.16 billion pounds, up 1.2 percent.
American type cheese production totaled 432.9 million pounds, up 7.5 percent from November and 2.9 percent above a year ago. YTD totaled 4.91 billion pounds, up 3.2 percent.
Cheddar output, the cheese traded at the CME, totaled 317.1 million pounds, up 1.1 percent from November, 3.2 percent above a year ago, with YTD at 3.56 billion pounds, up 4.1 percent.
U.S. churns produced 170.3 million pounds of butter, up 15.5 percent from November and 4.2 percent above a year ago. YTD butter totaled 1.84 billion pounds, up 0.2 percent.
Nonfat dry milk totaled 163.3 million pounds, up 14.7 percent from November, 5.4 percent above a year ago, with YTD at 1.8 billion pounds, up 4.1 percent.
Skim milk powder production totaled 49.9 million pounds, up 19.1 percent from November but 8.8 percent below a year ago. YTD output is at 534.0 million pounds, down 4.5 percent.
The report also showed December nonfat dry milk stocks at 330.4 million pounds, up 13.3 million pounds or 4.2 percent from November and a whopping 104.9 million pounds or 46.5 percent above those a year ago.
Milk-feed ratio down
A drop in the All Milk price average plus higher corn and soybean prices pulled the December milk feed price ratio sharply lower. The latest Ag Prices report shows the December ratio at 2.38 down from 2.54 in November and 2.73 in December 2016.
The U.S. All-Milk price averaged $17.20 per cwt., down 90 cents from November and $1.70 below December 2016.
December corn averaged $3.23 per bushel, up 8 cents from November but 9 cents below December 2016. Soybeans averaged $9.30 per bushel, up 8 cents from November but 34 cents per bushel below a year ago. Alfalfa hay averaged $148 per ton, unchanged from November, but $21 per ton above a year ago.