Cash cheese prices strengthened in the shortened Labor Day holiday week, a sixth week of gain, while cash butter set a record high.
The 40-pound block Cheddar closed Friday at $2.35 per pound, up 2 cents on the week and 54 cents above a year ago. It was unchanged Monday and Tuesday.
The 500-pound Cheddar barrels moved higher last Tuesday, plunged 6 1/4-cents on Wednesday, inched up a half-cent on Thursday and ticked up another 2 cents on Friday to close at $2.3250 per pound, down 2 cents on the week but 52 1/2-cents above a year ago. They were also unchanged Monday but inched up a half-cent Tuesday, to $2.33. Only four cars of barrel traded hands last week in the spot market.
Cash butter sustained the previous week’s rebound and then some after setting a new record high Thursday at $2.84 per pound, only to add another half-cent to it on Friday and close at $2.8450 per pound, up 9 cents on the week and $1.4150 per pound above a year ago. It let go of any gravitational pull on Monday, skyrocketing 11 1/2-cents to a record $2.95 per pound, then added 3 more cents Tuesday, hitting $2.99 per pound. Seventeen cars were sold last week, 11 had already sold as of Tuesday.
Cash Grade A nonfat dry milk closed Labor Day Week at $1.3325 per pound, up three-quarter cents on the week but still at a two-year low. It was trading Tuesday at $1.33.
The Agriculture Department announced the August federal order Class III benchmark milk price at $22.25 per hundredweight, up 65 cents from July, $4.34 above August 2013, $2.29 above the comparable California 4b cheese milk price, and equates to about $1.91 per gallon. The 2014 Class III average now stands at $22.49, up from $17.72 at this time a year ago and $16.23 in 2012.
There’s more to come as the September futures contract settled Monday at $24.45 before heading back down in its seasonal descent. The October contract settled Monday at $22.98; November, $20.74; and December, $19.74. That would result in a 2014 average of $22.32, up from $17.99 in 2013 and $17.44 in 2012.
The August Class IV price is a record high $23.89, up 11 cents from July and $4.82 above a year ago. The Class IV eight-month average now stands at $23.28, up from $18.37 a year ago and $14.95 in 2012.
July 2014 milk production hit 16.4 billion pounds, according to USDA’s preliminary data, up 4 percent compared to a year ago. USDA’s latest Dairy Products report issued Thursday shows where it went.
Following a rare revision in last month’s report, July butter production was pegged at 136 million pounds, down 3 percent from June but 2.6 percent above July 2013. Nonfat dry milk output for human consumption totaled 166 million pounds, up 12.1 percent from June and 42.7 percent above a year ago.
American type cheese output, at 378 million pounds, was up 0.9 percent from June and a whopping 9.5 percent above a year ago. Italian type, at 409 million pounds, was up 0.6 percent from June and 4.4 percent above a year ago.
Total cheese out in July came to 956 million pounds, up 1.2 percent from June and 7 percent above a year ago.
The U.S. Dairy Export Council reports that July exports were the lowest in six months. The farmer-funded agency reported that U.S. exporters shipped 171,516 tons of milk powders, cheese, butterfat, whey and lactose in July, down 9 percent from June on a daily-average basis.
Export sales slowed across the board, reflecting pricing disadvantages for U.S. suppliers and more competition from Oceania and the EU.
Compared with June, nonfat dry milk/skim milk powder (NDM/SMP) exports were down 17 percent, cheese was down 8 percent, butterfat was off 10 percent, dry whey was down 14 percent and lactose was down 11 percent.
Total exports were valued at $622.5 million in July, down 10 percent from June (daily-average basis), but up 2 percent from last year. That brings year-to-date sales to $4.54 billion, up 22 percent versus 2013.
Sales to the United States’ top two single markets — Mexico and China — held up fairly well in July, each slipping just 4 percent vs. June (by value, daily average). And shipments to several other top customers, including Indonesia, Saudi Arabia and Algeria, were above the prior month.
But U.S. exports slowed considerably in several key markets, including South Korea (-25 percent vs. June), Japan (-22 percent), Vietnam (-19 percent), Malaysia (-57 percent), Thailand (-53 percent), Canada (-17 percent), Dominican Republic (-24 percent), Peru (-44 percent) and Morocco (-71 percent). Read the complete report at www.usdec.org.