CME-traded block Cheddar closed June Dairy Month at $1.8575 per pound, the highest price since Nov. 23, 2016, up 3 1/4-cents on the week — the sixth week of gain — and 30 1/4-cents above a year ago.

The barrels shot up to $1.79, the highest price since Nov. 9, 2016, up 5 1/4-cents on the week and 40 cents above a year ago.

Twenty-four cars of block traded hands on the week, totaling 71 on the month, up from 67 in May. Thirty-seven cars of barrel sold on the week, totaling 159 on the month, up from 135 in May.

The blocks were up three-quarters Monday but backed down a half-cent Tuesday, to $1.86, as traders contemplated the morning’s Global Dairy Trade auction and anticipated the shortened Fourth of July holiday week. Traders have, for the most part, ignored the global declines, dealing with U.S. prices, which are in a world of their own.

The barrels lost a penny Monday and stayed there Tuesday, at $1.78, a closer to normal 8 cents below the blocks.

Cheese market tones in the Midwest continue to firm, reports Dairy Market News, though demand reports were mixed last week. “Some suggest improved market prices have buyers a little more enticed to enter the fray but some specialty cheesemakers relay a slowdown, week over week.”

Upper Midwestern states are seeing some spot availability but moving east, it begins to lighten. Spot milk prices ranged from Class to $1.50 under. Cheese producers are maintaining a somewhat busy schedule, with some at a seven-day workweek.

Interest for cheese is steady to increasing throughout the West, with a noticeable surge in demand from southern Asia and Mexico. Mexico cheese demand is back due to the tariff reductions. The uptick in South Asia purchases is quite surprising to contacts as they mentioned that EU prices are lower than those of the U.S. Current lower EU stocks may signify they can’t satisfy all international demand and explains the jump in interest for U.S. cheese. Cheese output is steady but a few manufacturers are considering a reduction due to “pricy milk.”

Cash butter closed Friday at $2.41 per pound, 2 cents above the previous week and 14 1/4-cents above a year ago; 51 cars traded hands last week at the market of last resort, 115 on the month, up from 79 cars in May.

Monday’s butter was unchanged but it lost a penny Tuesday, slipping to $2.40 per pound.

Butter makers are bidding for cream, says DMN, but most say prices are moving “out of their fiscal reach.” Some plant managers report butter production is generally slower this year. Others report steady production but say their inventories are more diverse than in previous years. Contacts have mixed expectations of butter markets in the second half of this year. Some expect increasing imports to keep domestic markets steady while others expect bullish movements, as year-over-year inventories are lower and demand remains healthy.

Western cream supplies are tight and butter makers report that spot loads within their price range are hard to come by. Churns are as active as supplies of cream allow but a lot is getting pulled into Class II and ice cream manufacturing. Butter demand is steady and inventories have not grown as much as some expected.

Spot Grade A nonfat dry milk saw the week end at $1.05 per pound, up a half-cent and 30 1/4-cents above a year ago; 7 carloads found new homes on the week and 25 on the month, down from 59 in May.

The powder was steady Monday but eased back a quarter-cent Tuesday, to $1.0475.

Dry whey closed Friday at 33 1/2-cents per pound, down three-quarter cents on the week and 7 1/4-cents below a year ago; 14 sales were reported on the week and 31 on the month, up from 25 in May.

Monday’s trading took the whey down a half-cent and it stayed there Tuesday at 33 cents per pound.

GDT slips

The descent in the previous three Global Dairy Trade auctions slowed Tuesday. While it was the fourth consecutive decline, the weighted average of products offered inched 0.4% lower after dropping 3.8% on June 18, 3.4% on June 4 and 1.2% on May 21. Sellers brought 54.5 million pounds of product to the market Tuesday, up from 53.4 million in the last event.

Buttermilk powder led the losses, down 11.9%, followed by butter with a 4.8% decline. Butter was down 5.7% last time. Rennet casein was down 3.9%, anhydrous milkfat was down 1.9%, following a 3.3% decline, and GDT Cheddar was down 1.5%, which follows a 4.3% decline. Lactose was off 1.1%.

Like the June 18 event, there was only one product in the black but this time it was skim milk powder, up 3.2%, after a 3.5% decline last time.

FC Stone equates the GDT 80% butterfat butter price to $1.9199 per pound U.S., down 9.5 cents from the June 18 event. CME butter closed Tuesday at $2.40. GDT Cheddar cheese equated to $1.7037 per pound, down 1.1 cents from the last event and compares to Tuesday’s CME’s block Cheddar at $1.86.

GDT skim milk powder averaged $1.1020 per pound, and compares to $1.0696 last time. Whole milk powder averaged $1.3465, down from $1.3637 last time. CME Grade A nonfat dry milk closed Tuesday at $1.0475 per pound.

Just in case you’re wondering: buttermilk powder is used in baked goods, biscuits, cakes, as well as soups and sauces.

Milk-feed ratio slips

The May milk feed price ratio inched fractionally lower again, according to the Agriculture Department’s latest Ag Prices report. The May ratio was 2.10, down from 2.11 in April but up from the 1.90 in May 2018.

The index is based on the current milk price in relationship to feed prices for a dairy ration consisting of 51% corn, 8% soybeans and 41% alfalfa hay. In other words, one pound of milk today purchases 2.10 pounds of dairy feed containing that blend.

The U.S. All-Milk price averaged $18 per hundredweight, up 30 cents from April and $1.80 above May 2018.

The national average corn price averaged $3.63 per bushel, up 11 cents from April but 5 cents per bushel below May 2018. Soybeans averaged $8.02 per bushel, down 26 cents from April and $1.82 per bushel below a year ago. Alfalfa hay averaged $204 per ton, up $5 from April and $15 per ton above a year ago.

Looking at the cow side of the ledger, the May cull price for beef and dairy combined averaged $65.60 per cwt., up $4.30 from April, 60 cents below May 2018 and $6 below the 2011 base average of $71.60 per cwt.

The May milk-over-feed margin increased 18 cents, climbing to $9.00 per cwt. under the USDA’s Dairy Margin Coverage program, highest this year so far. Payments are possible on a milk margin of $9.50 or less, depending on the level of coverage chosen by the dairy producer.

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

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