Lee Mielke: Monthly Dairy Prices 10-14-13
Ryan Summerlin November 4, 2013
The dust is settling over the recent government “shutdown” due to political differences in Washington but while the majority of government workers are unaffected, many were furloughed and the impact on the dairy industry boils down to this; the National Agricultural Statistics Service (NASS), the Economic Research Service (ERS), and the Agricultural Marketing Service (AMS) have been furloughed. Data reported by these agencies will be on hold. USDA’s Dairy Market News is also shuttered and with it, its daily and weekly reports.
The monthly Dairy Products report which was to be released Thursday was not and, unless the Administration and Congress come to an agreement, several others will be suspended, including the October Milk Production report, which would have resumed milk cow numbers and output per cow data, stopped because of the sequester. Other casualties are the Cold Storage, Livestock, Dairy & Poultry, World Ag/Supply/Demand Estimates, and Ag Prices reports.
USDA will not publish the weekly National Dairy Products Sales Report (NDPSR), what I refer to as the “lagging” Ag Market Services (AMS-surveyed) dairy product prices used to calculate Federal order Class milk prices as well as settlements for Chicago Mercantile Exchange (CME) futures.
High Ground Dairy’s Eric Meyer reports that sources at USDA informed him that it would be invoking a special rule taken from the Code of Federal Regulations titled “Equivalent Price” in calculating this week’s Class prices. Remaining on the job are USDA dairy graders, inspectors as well as federal milk marketing administrators as their funding is provided by the industry.
The September Federal order Class III benchmark milk price is $18.14 per hundredweight (cwt.), up 23 cents from August, 86 cents below September 2012, $1.49 above California’s comparable 4b cheese milk price, and equates to about $1.56 per gallon. The 2013 Class III average now stands at $17.76, up from $16.54 at this time a year ago, and compares to $18.28 in 2011, $14.07 in 2010, and $10.49 in 2009. The October Class III futures price setttled Friday at $18.14; November, $17.98; and December at $17.27 per cwt.
The FO Class IV price is $19.43, up 36 cents from August, $2.02 above a year ago, and the highest it’s been since September 2011. The 2013 Class IV average now stands at $18.49, up from $15.23 a year ago and compares to $19.48 in 2011, $14.70 in 2010, and $10.06 in 2009.
The four-week, AMS-surveyed cheese price used in calculating the September milk prices was $1.7961 per pound, up 2.3 cents from August. Butter averaged $1.4263, up almost a penny. Nonfat dry milk averaged $1.8085, up 3.8 cents, and dry whey averaged 57.91 cents, up 1.3 cents.
California’s comparable 4b cheese milk price is $16.65 per cwt., up 33 cents from August but 85 cents below September 2012. The 2013 4b average now stands at $16.10, up from $14.69 at this time a year ago and compares to $16.48 in 2011.
The 4a butter-powder milk price is $19.47, up 77 cents from August and $2.85 above a year ago. The 4a average now stands at $18.27, up from $14.88 a year ago and compares to $19.24 in 2011.
Meanwhile; the cash dairy markets start October without much change. Block Cheddar cheese closed Friday at $1.7650 per pound, up a penny and a half on the week but 33-1/2-cents below that week a year ago when they were trading at $2.10. The barrels finished at $1.75, up 3 cents on the week and 31 cents below a year ago. Fifteen cars of block traded hands on the week and nine of barrel. The AMS-surveyed prices were not available due to the government shutdown.
USDA’s Dairy Market News (DMN) reports that demand for cheese is good with increased seasonal buying interest. Export demand is also good and clearing additional inventories. But, cheese plants are having difficulties sourcing additional spot loads of milk to fill the demand. Tight milk supplies are restricting cheese production schedules. Plants are directing available milk to highest efficiencies and to the making of high demand products. Cheese cold storage numbers are above year ago levels, however cheese makers are being cautious not to over sell to be sure of filling future contract commitments.
Cash butter saw a fourth week of gain, closing Friday at $1.6150, up a half-cent on the week but 24-1/2-cents below a year ago when it lost 9 cents. Thirty eight cars were sold on the week.
Butter production is still lagging due to good cream demand and milk production not quite back to levels of a few weeks ago, according to DMN.
Cash Grade A nonfat dry milk finished Friday at $1.8450, up 1-1/2-cents on the week, while Extra Grade remained at $1.78, where it’s been since August 22. ❖