CME dairy prices see ups and downs

Lee Mielke

CME cash prices saw some ups and downs in the St. Patrick’s Day Week as traders anticipated Friday afternoon’s February Milk Production report.

Cheddar block cheese closed Friday morning at $1.49 per pound, down a penny on the week and a nickel below a year ago. The barrels lost 5 cents, then jumped 8 cents Friday and closed at $1.50, up 3 cents on the week and 2 cents below a year ago. Only one car of block was sold on the week at the CME and four of barrel.

The blocks were unchanged Monday as traders awaited Tuesday afternoon’s February Cold Storage report, and they were unchanged Tuesday. The barrels slipped three-quarters Monday and lost 2 1/4 cents Tuesday, dipping to $1.47.

Dairy Market News reports that Midwest cheese makers are seeing plenty of milk and many are near full capacity. Some spot milk loads are available at $1.50 to $3.00 under Class but “domestic retail cheese demand continues to be a good draw. Sales into food service and mozzarella for pizza have also been respectable.”

Western cheese output remains steady to higher as milk intakes increase seasonally. “Demand is still good from food service and retail but club stores and other large retailers have slowed cheese orders somewhat and are taking a wait-and-see approach to the market,” according to DMN.

Cash butter dipped to $1.9250 per pound last Tuesday, lowest price since July, 2015, then rebounded some, and closed Friday at $1.95, down 3 3/4-cents on the week but still 27 cents above a year ago, with eight cars exchanging hands on the week.

The Monday butter market was unchanged but it inched up three-quarters Tuesday, to $1.9575, with 10 cars trading hands and a bid at that price going unfilled.

Butter production is active throughout the Central region, according to DMN. Spot cream offers are readily available and interest is steady to light, with inventories “steady to building,” while Western butter makers are seeing some of the seasonal demand ebb.

Cash Grade A nonfat dry milk closed the week at 73 cents per pound, down 4 cents and 25 1/2-cents below a year ago. Thirteen cars were traded on the week.

The cash price inched up a half-cent Monday and a quarter-cent Tuesday, to 73 3/4-cents per pound.

U.S. milk production in February in the top 23 states totaled 15.8 billion pounds, up 4.6 percent from February 2015, according to preliminary data in USDA’s latest Milk Production report. But, when adjusting for the additional day due to leap year, output was up just 1 percent, though that was more than many expected and the largest percent gain since August 2015.

Output in the 50 states totaled 16.9 billion pounds, also up 1 percent from 2015, factoring in leap day. Revisions lowered the original 23-state January estimate by 13 million pounds, to 16.6 billion, up just 0.2 percent from 2015.

February cow numbers in the 23 states totaled 8.63 million head, up 2,000 from January and 8,000 more than a year ago. Output per cow averaged 1,833 pounds, up 79 pounds from a year ago but when adjusted for the additional day, output per cow was up 16 pounds on a per-day basis from a year ago.

California production was reported up 0.5 percent from a year ago but, when factoring the leap day, output was actually down 2.9 percent, on a 49-pound loss per cow and 5,000 fewer cows though the ongoing gap lessened in February. Wisconsin was up 5.1 percent from a year ago, factoring in the leap day, thanks to an 81-pound increase per cow and 5,000 more cows, as mild weather spurs output in the Midwest.

New Mexico was down 6.0 percent, due to a 46-pound drop per cow and 12,000 fewer cows, as the data reflects continued after effects of winter storm Goliath. The other state impacted by the storm was Texas, down 2.02 percent, on 13,000 fewer cows but a 12 pound gain per cow.

Idaho was up 2 percent, on a 15-pound gain per cow and 7,000 more cows. Michigan was up 7.8 percent, thanks to a 94-pound gain per cow and 11,000 more cows. Minnesota was up 1.4 percent, on a 22-pound gain per cow. New York was up 4.6 percent, thanks to a 66-pound gain per cow and 4,000 more cows. Pennsylvania was down 0.1 percent on a 2-pound loss per cow. Washington State was unchanged, across the board.

Tuesday’s February Cold Storage report added more fodder for the bears. Butter stocks totaled 235.5 million pounds, up 43.4 million pounds or 23 percent from January and 56.5 million pounds or 32 percent above February 2015.

American type cheese stocks, at 714.9 million pounds, were down 1.5 million pounds or 0.2 percent from January but 69.2 million or 11 percent above a year ago.

The total February cheese inventory stood at 1.18 billion pounds, up 3.8 million pounds, virtually unchanged from January, but 11.4 million pounds or 11 percent above a year ago.

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