Cash dairy prices ended the shortened Memorial Day holiday week mixed. CME block Cheddar closed the last Friday of the month at $1.7150 per pound, up 3 1/4-cents on the week and 11 3/4-cents above a year ago.
The barrels finished at $1.54, down 4 cents on the week but were 2 cents above a year ago. There were 5 cars of block traded last week, 67 in the month of May; 32 cars of barrel were sold last week and 135 for the month.
Monday traders took the blocks up a half-cent while the barrels rolled 2 1/2-cents lower. The blocks were unchanged Tuesday, as Tuesday’s dip in the GDT was analyzed. They held at $1.72, highest since March 28. The barrels lost 3 cents, sliding to $1.4850, lowest since March 13, and 25 1/2-cents below their $1.74 peak on May 7.
Dairy Market News reports that Central cheese demand was fairly slow throughout May but contacts pointed to some positive movements in the Memorial Day Week. Cheese production has increased. Some plants are running 7-day work weeks and plan to do so through the next few weeks; however, most producers suggest that last year’s schedules were busier. Market tones were “shakier,” says DMN, as CME barrel prices began to put distance between them and the block prices.
Western cheese sales are active but vary.
Block demand is a bit more contingent on the prices, says DMN. “Some contacts mentioned that as prices move closer to $1.70, demand somewhat declines while a backpedal in prices enhances purchasers’ interest.” International sales have improved a bit and may be partly due to the lifting of Mexico’s retaliatory tariffs on U.S. cheese, but that may change with the latest salvo against Mexico by President Trump in his effort to stem the flow of those seeking to cross the U.S. border.
CME butter shot up to $2.4075 per pound last Tuesday, the highest price since May 30, 2018, almost one year ago. But it closed Friday at $2.36, down 2 3/4-cents on the week and 1 3/4-cents below a year ago; 29 carloads exchanged hands on the week and 79 for the month of May.
Monday’s butter was down a penny and it stayed there Tuesday at $2.35 per pound.
Contacts suggest that the surge in the butter price may have been “rushed,” as imports from Mexico and elsewhere are expected to keep U.S. markets in check.
Cream was more available during the holiday weekend, but butter plant managers relay that cream access was back even with the previous week.
Most contacts say they are content with their stocks heading into the fall busy season.
Western churns are active and orders have been strong through the course of the spring, according to DMN. “End users are buying at a pace that makes it difficult for butter inventories to grow very fast.”
Cash Grade A nonfat dry milk closed Friday at $1.0550 per pound, up a penny on the week and 23 cents above a year ago; 22 cars found new homes on the week, 17 on Friday alone, and 59 for the month.
The powder inched a quarter-cent lower Monday and held there Tuesday at $1.0525.
Dry whey ended Friday at 35 1/4-cents per pound, three-quarter-cents lower on the week and 3 1/4-cents below a year ago, with 5 cars trading places on the week at the CME, and 25 for the month.
The whey was unchanged Monday and Tuesday.
GDT falls 3.4%
Tuesday’s Global Dairy Trade auction added a second session of decline as its weighted average of products offered fell 3.4%, following a 1.2% decline on May 21. Sellers brought 43.8 million pounds of product to the market, up from 34.2 million in the last event.
The losses were led by cheese and butter. GDT Cheddar was down 14.0% following a 15.2% rise last time. Butter was down 10.3%, after a 3.2% loss last time.
Buttermilk powder was down 10.1%, anhydrous milkfat was down 5.7%, after it slipped 1.4%.
Skim milk powder was down 4.0%, following a 0.5% rise, and whole milk powder was off 1.5%, following a 2.1% loss last time.
Rennet casein and lactose were the only gains, up 4.2% and 0.4%, respectively.
FC Stone equates the GDT 80% butterfat butter price to $2.1262 per pound U.S., down a hefty 21.8 cents from the last session. CME butter closed Tuesday at $2.35. GDT Cheddar cheese equated to $1.7918 per pound, down 40.9 cents from the last event and compares to Tuesday’s CME’s block Cheddar at $1.72. GDT skim milk powder averaged $1.1051 per pound, and compares to $1.1471 last time. Whole milk powder averaged $1.4232, down from $1.4423 last time.
CME Grade A nonfat dry milk closed Tuesday at $1.0525 per pound.
Milk feed ratio slips
April’s milk feed price ratio inched fractionally lower, according to the Agriculture Department’s latest Ag Prices report. The April ratio, at 2.11, was down from 2.14 in March but up from 1.89 in April 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 2.11 pounds of dairy feed containing that blend.
The U.S. All-Milk price averaged $17.70 per hundredweight, up 20 cents from March and $2.00 above April 2018.
The national average corn price averaged $3.52 per bushel, down 9 cents from March and 6 cents per bushel below April 2018.
Soybeans averaged $8.28 per bushel, down 24 cents from March and $1.57 per bushel below a year ago.
Alfalfa hay averaged $199 per ton, up $15 from March and $16 per ton above a year ago.
The April cull price for beef and dairy combined averaged $61.30 per cwt., down $1.50 from March, $6.20 below April 2018 and $10.30 below the 2011 base average of $71.60 per cwt.
The April milk-over-feed margin increased 11 cents to $8.96 per cwt., according to the Daily Dairy Report.
“May’s margins will not be as favorable,” the DDR warns. “Feed prices soared in May and milk prices have leveled out. The optimum time to plant corn has long passed and soils remain saturated. The year ending in April was the wettest 12-month period in the United States on record.”