Butter prices saw some slippage last Tuesday but rallied to close the week at $2.3875 per pound, up 4 3/4-cents on the week but 2 3/4-cents below a year ago.
Tuesday’s butter was up 2 cents, hitting $2.4075 per pound, the highest CME price since May 30, 2018, almost one year ago.
Dairy Market News says cream has been more available for butter makers, likely due to the Memorial Day holiday but plant managers saw more cream than expected the previous week. Butter demand remains at or slightly above expectations.
Western butter sales are mixed with reported declines in some areas and increases in others however the increases seem more prevalent than the declines. Cream supplies have been tightening in recent weeks and multiples are a bit up. Spot loads of cream are still available to butter makers but the volumes are lower and many are actively producing butter to insure later coverages.
CME block Cheddar closed the Friday before Memorial Day at $1.6825 per pound, up a penny on the week and 7 1/4-cents above a year ago.
The barrels finished at $1.58, down 4 1/2-cents on the week and 3 1/2-cents below year ago. Only 1 load of block sold last week, but 27 of barrel sold.
The markets were closed Memorial Day, and Tuesday’s trading left the blocks at Friday’s close of $1.6825 but the barrels dropped 3 3/4-cents, to $1.5425, 14 cents below the blocks and the lowest CME price since April 18.
DMN reported on the stark contrast this year in milk availability ahead of the Memorial Day holiday. It stated that week 21 in 2015, Central spot milk prices reached $10 under Class. Week 21 spot milk prices in 2017 and 2018 averaged $4 under and $3.50 under, respectively.
Currently, reported prices ranged from 50 cents over to $2 under Class.
“Cheese production is steady week over week, although down due to the marked difference in milk availability,” according to DMN. Cheese demand was a little more bullish this week but mostly steady. Cheese inventories remain long nationwide, but regionally they are a little more in balance.
Western contacts indicate that the backtrack on cheese prices prompted a little more interest from buyers. Domestic demand is steady and more international buyers seem willing to entertain offers. Inventories remain heavy but the seasonal draw on barrels and processed cheese products has helped bring stocks into better balance. But many cheese plants are running at or near capacity.
Spot Grade A nonfat dry milk closed Friday at $1.0450 per pound, a quarter-cent lower on the week but 20 1/4-cents above a year ago.
The powder was unchanged Tuesday, holding at $1.0450.
CME dry whey saw a Friday close at 36 cents per pound, up 2 cents on the week but 1 1/4- cents below a year ago.
The Tuesday whey price was down three-quarters, slipping to 35 1/4-cents per pound.
Stocks build slower
The Agriculture Department’s latest Cold Storage report showed April 30 butter stocks totaled 290.8 million pounds, up 21.1 million pounds or 7.8% from March but 16.5 million pounds or 5.4% below those in April 2018.
American type cheese, which includes Cheddar, was virtually unchanged, totaling 782.6 million pounds, down 2.2 pounds from March but 2.3 million pounds above a year ago.
The Daily Dairy Report says while the decline was small, “the direction is remarkable,” pointing out that “American cheese stocks have not waned from March to April since 1993” and says it “helps to explain why the CME spot Cheddar barrel market climbed to new calendar year highs in April and traded at even greater values earlier this month.”
The other cheese category climbed to 588.5 million pounds, up 20 million pounds or 3.5% from March and 52.7 million pounds or 9.8% above a year ago.
The total cheese inventory climbed to a tad under 1.4 billion pounds, up 14.5 million pounds or 1% from March and 54 million pounds or 4.0% above a year ago and the 54th consecutive month stocks topped a year ago.
Class I up 65 cents
The Agriculture Department announced the June Federal order Class I base milk price at $17.07 per hundredweight, up 65 cents from May, $1.82 above June 2018, and the highest Class I price since January 2017.
It equates to about $1.47 per gallon, up from $1.41 in May and $1.31 a year ago. The six month Class I average stands at $15.94, up from $14.47 a year ago and compares to $16.27 in 2017.
Culling tops 2018
Dairy cow culling dropped in April from March but was above April 2018. The Agriculture Department’s latest Livestock Slaughter report shows an estimated 268,500 head were slaughtered under federal inspection, down 33,900 head from March but 19,600 head or 7.9% above a year ago. The four month total stands at 1.15 million head, up 62,100 or 5.7% from a year ago.