Mielke: Cheese output flat as prices sputter

Columnist Lee Mielke wraps up the week’s dairy industry news.

By Lee Mielke

For the Capital Press

Published on September 11, 2018 11:18AM

Last changed on September 11, 2018 11:19AM

Lee Mielke

Lee Mielke


The cash Cheddar blocks climbed to $1.7050 per pound following last Monday’s Labor Day holiday, highest CME price since Nov. 15, 2017, then lost 6 cents Wednesday, and regained 1 3/4-cents Friday to close the shortened week at $1.6625, down 3 1/4-cents but 2 cents above a year ago.

The barrels hit $1.64 last Tuesday and then plunged 8 1/4-cents Thursday and dropped 5 3/4-cents Friday, finishing at $1.50, down 14 1/2-cents on the week and 4 cents below a year ago.

Monday’s trading took the blocks up three-quarters, then they dropped 4 1/2-cents Tuesday, to $1.6250. The barrels ticked up 2 cents Monday only to fall 6 1/2-cents Tuesday, to $1.4550, the lowest price since Aug. 1, 2018, and 17 cents below the blocks.

Reports from Midwestern cheesemakers say demand remains steady to improving, according to Dairy Market News. Central Class III producers continue to deal with hauling costs and delays, particularly for loads heading east, which have “snowballed to a problematic point.” Cheese output remains steady to down a bit. Milk into the vat is harder to find during the busier school bottling season and prices ranged $1 to $2 over Class III.

Cheese output in the West remains active with several plants close to full capacity. Current demand is strong and exports into the Asian market increased, but some Latin American countries have slowed intakes. As trade negotiations between the U.S. and Mexico are showing a favorable tendency, industry participants hope to see a boost of cheese market activities.”

Butter closed last week at $2.23 per pound, up 1 1/2-cents but 22 3/4-cents below a year ago.

The Monday price was up 2 3/4-cents but gave back 3 1/4-cents Tuesday, falling to $2.2250.

Cream supplies into Central butter production remain available. Some butter makers are churning actively while others are slow to pick up the pace. Some plants were completely offline due to heavy rains and flooding in the Midwest. Contacts suggest that August was an exceptional sales month, notably in food service but the market tone is a bit bearish, says DMN.

Western churns were active over the holiday weekend. Ice cream and other Class II manufacturers pushed more cream to the churns as did increased milk bottling for school re-openings.

Grade A nonfat dry milk saw a Friday close at 91 cents per pound after reaching 92 cents Thursday, up 2 1/2-cents on the week, 8 1/2-cents above a year ago, and the highest CME perch since June 2017.

Monday’s powder lost a penny and stayed there Tuesday.

The hot new dry whey market closed Friday at 51 1/2-cents per pound, 1 1/2-cents higher on the week, all on unfilled bids.

The whey was unchanged Monday but was bid up a half-cent Tuesday to a record high 52 cents per pound.


Benchmark up


California’s August 4b cheese milk price is $15.06 per cwt., up 97 cents from July, $1.20 below a year ago, 11 cents above the comparable Federal order Class III price, the first time that has happened since November 2016, and the highest 4b in nine months. Its eight-month average is at $14.18, down from $15.28 a year ago and compares to $13.44 in 2016.

The 4a butter-powder milk price is $14.05, up 33 cents from July but $2.63 below a year ago. The eight-month average hit $13.50, down from $15.27 a year ago and $13.22 in 2016.


Last California order


The California Department of Food and Agriculture announced its last Class I milk prices. The next one will be the Federal order Class base price announced by the U.S. Department of Agriculture.

The October Class I price is $18.13 per cwt. for the north and $18.40 for the south. Both are up $1.26 from September, 11 cents and 10 cents respectively above October 2017, and the highest Class I prices since November 2017.

The north’s 10-month average is $16.40, down from $17.94 a year ago and compares to $15.98 in 2016. The southern average, at $16.67, is down from $18.21 a year ago and compares to $16.25 in 2016.

The October Federal order Class I base price will be announced Sept. 19 and the November price will be announced Oct. 17.


Cheese keeps growing


USDA’s latest Dairy Products report shows July cheese output totaled 1.09 billion pounds, up 2.7 percent from June and 3.7 percent above July 2017. Year-to-date output stands at 7.5 billion pounds, up 2.4 percent from a year ago. July was the 64th consecutive month that cheese output exceeded that of a year ago.

The No. 1 cheese producer, Wisconsin, contributed 284.2 million pounds, up 3.3 percent from June and 0.1 percent above a year ago. No. 2 California produced 211.2 million pounds, up 3.0 percent from June but 0.9 percent below a year ago. Idaho provided 85.6 million pounds, up 2.7 percent from June and a whopping 14.9 percent above a year ago.

Italian cheese totaled 463.5 million pounds, up 3.2 percent from June and 2.6 percent above a year ago. Year to date Italian is at 3.2 billion pounds, up 2.4 percent from a year ago. Mozzarella, at 364.9 million pounds, was up 3.7 percent from a year ago, with YTD at 2.5 billion pounds, up 2.8 percent.

American type cheese totaled 439.8 million pounds, up 2.3 percent from June and 6.1 percent above a year ago, with YTD at 3.0 billion pounds, up 2.2 percent. Cheddar output, the cheese traded at the CME, totaled 326.4 million pounds, up 13 million pounds or 4.1 percent from June and a strong 9.4 percent above a year ago, with YTD Cheddar at 2.2 billion pounds, up 0.5 percent.

U.S. butter churns produced 136.2 million pounds, down 4.4 percent from June but 0.5 percent above a year ago. YTD is at 1.2 billion pounds, up 3.6 percent.

Dry whey for human consumption totaled 89.7 million pounds, up 4.1 percent from June but down 9.1 percent from a year ago. Stocks totaled 74.7 million pounds, up 12.6 percent from June but 21.4 percent below those a year ago.

Nonfat dry milk production totaled 146.7 million pounds, down 0.1 percent from June and 3.4 percent below a year ago. YTD output stands at 1.1 billion pounds, up 0.1 percent. Stocks climbed to 317.9 million pounds, up 14.5 million pounds or 4.8 percent from June and were 22 million pounds or 7.4 percent above 2017.

Skim milk powder production totaled 47.6 million pounds, down 19.3 percent from June and 0.5 percent below a year ago. YTD skim is at 331.8 million pounds, down 1.9 percent from a year ago.



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