Cash dairy prices were mixed in the shortened Martin Luther King Day holiday week with the Cheddar blocks losing a penny, closing Friday at $1.39 per pound, 8 1/4-cents below a year ago when they lost 9 1/4-cents.

The barrels plunged to $1.16 Wednesday, the lowest price since July 23, 2009, but closed Friday at $1.18, down 2 cents on the week and 14 cents below a year ago.

Monday’s block price gained three-quarters, then jumped 4 3/4-cents Tuesday, climbing to $1.4450, the highest price since Nov. 16, 2018, as lawmakers and President Donald Trump agreed to a three-week reopening of the government and arctic cold weather gripped the Midwest and Northeast.

The barrels jumped 3 cents Monday and added 5 1/4-cents Tuesday, jumping to $1.2625, the highest price since Jan. 8, 2019, and shrank the spread to 17 3/4-cents.

Some cheese plant schedules were back to normal, according to Dairy Market News, while others had lighter workweeks. Winter weather, particularly at customer bases in the Northeast, impacted demand for a number of regional contacts and demand was slow for most types of cheese producers. Winter weather and chilling cold has visited the Midwest as well this week. Spot milk intakes were light last week and most spot prices ranged from 50 cents under to $1.00 over Class.

Western cheese makers report mixed demand, and “while markets for mozzarella are strong, as expected near the apex of the football and pizza seasons, other signals suggest total cheese demand is missing its mark.” Contacts indicate retail demand has been adequate but exports have yet to take off.

DMN says, “The pull from cheese buyers has not been able to overtake active cheese production. As a result, contacts say there has been little substantive effect on drawing down the large cheese inventories. Until improved demand or reduced production can bring cheese stocks into better balance, low prices will be a symptom of those heavy supplies.”

The loss of the December Cold Storage report scheduled for Jan. 22 added to that speculation but that data will be announced next week now that the government has reopened.

Butter dipped to $2.22 per pound last Wednesday but closed Friday at $2.2450, up a half-cent on the week and 11 1/2-cents above a year ago.

The butter advanced a penny and a half Monday and tacked on 2 1/2-cents Tuesday, hitting $2.2850.

DMN says little has changed as far as access to cream for butter producers. If anything, plant managers suggest more cream is expected in upcoming weeks. Winter weather in the Midwest and Northeast has bottlers busier, thus cream availability is steadily increasing. Churning continues and butter stocks are climbing. Demand is healthy to slightly seasonally lower but butter markets are “steadily bullish.”

Western butter stocks are building at a seasonal rate and processors are actively running churns as there is plenty of cheap cream available. Some contacts say that first quarter sales are “relatively stronger than usual.” Retail orders are good while demand from food service is very good.

Grade A nonfat dry milk fell below $1 per pound last Wednesday but rallied to close Friday at $1.0125, down 1 3/4-cents on the week but 30 1/4-cents above a year ago.

The powder inched up three quarters Monday but eased back a quarter-cent Tuesday, slipping to $1.0175.

HighGround Dairy says, “Strength is building in skim and whole milk powder prices in the EU, Oceania and South America. Milk production has been declining in key regions of the EU and Argentina, but production is looking stronger out of New Zealand. Export demand from Asia has been a key factor in the recent rally.”

Spot dry whey saw the largest single day declines since Oct. 23, 2018, losing 4 cents last Tuesday and 4 1/2-cents Wednesday. It closed Friday at 40 1/2-cents per pound, a dime lower on the week, with 21 sales reported for the week.

The whey lost a half-cent Monday and stayed there Tuesday at 40 cents per pound, the lowest price since July 9, 2018.

Milk sales off

U.S. fluid milk sales, while not increasing, are at least not falling as much as they have been. The USDA’s latest data shows November sales at 4.1 billion pounds, down just 0.1 percent from November 2018 and follows a 0.3 percent decline in October.

Conventional product sales totaled 3.9 billion pounds, virtually unchanged from a year ago; organic products, at 218 million pounds, were down 1.8 percent and represented about 5.3 percent of total sales for the month.

Whole milk sales totaled 1.3 billion pounds, up 3.3 percent from a year ago, up 1.7 percent year to date, and made up 31.7 percent of total fluid sales in the month and 31.8 percent for the year so far.

Skim milk sales, at 308 million pounds, were down 8.0 percent from November 2017, down 9.7 percent year to date, and made up just 7.9 percent of total milk sales for the year so far.

Total packaged fluid milk sales in the 11-month period climbed to 43.0 billion pounds, down 2.0 percent from the same period a year ago.

Conventional products year-to-date totaled 40.7 billion pounds, down 2.2 percent; organic products, at 2.4 billion pounds, were up 0.5 percent. Organic represented about 5.5 percent of total fluid milk sales January through November.

The figures represent consumption of fluid milk products in Federal milk order marketing areas and California, which account for approximately 92 percent of total fluid milk sales in the U.S.

Shutdown hurt

The depressed dairy markets were the key take-away from last week’s annual Dairy Forum in Orlando, put on by the International Dairy Foods Association. Jerry Dryer, analyst and editor of the Dairy and Food Market Analyst newsletter, stated in the Jan. 28 Dairy Radio Now broadcast that it wasn’t so much what was being said from the podiums but what was said in the hallways.

“People are blaming the government shutdown as much as anything for the significant declines in dairy product prices at the CME,” Dryer reported. “The last data we saw was sorta bearish, and in the absence of new data, that bearishness intensifies and puts downward pressure on the market.”

He adds that people who are buying and selling dairy products and milk “don’t want to be blindsided by data so it’s much less painful to make a mistake at $1.20 than to make a mistake at $1.80. People are reluctant to bid prices or move prices higher,” he explained.

The other component is the trade and tariff issues that haven’t gone away and Dryer says there’s no news on that front either.

“We did not get export data that we should have,” he said. “That’s almost three weeks ago now and we won’t get it again this month the way things are shaping up so people tend to assume the worst.”

When asked if any optimism was expressed, Dryer said that there were people forecasting some demand recovery and shrinkage in the milk supply and that prices could be better than they are now. Rabobank predicted a recovery from 2018 prices but they won’t match 2017, he said, and “That’s not much of a recovery.”

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

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