The U.S. Agriculture Department announced the March Federal order Class III milk price Wednesday at $23.33 per hundredweight (cwt.), down 2 cents from its record high last month but still $6.40 above March 2013, $1.17 above California’s comparable Class 4b milk price, and equates to about $2.01 per gallon. That put the 2014 Class III average at $22.61 per cwt., up from $17.44 at this time a year ago, $16.28 in 2012, and $16.63 in 2011.
Class III futures settled Friday as follows: April, $23.94; May $21.96; June $20.56; July, $20.28; August, $20.02; September, $19.78; October, $19.35; November, $18.92; and December settled at $18.53 per cwt. If realized, the Class III would average $20.93, up from $17.99 in 2013 and $17.44 in 2012.
The March Class IV price is a record high $23.66 per cwt., up 20 cents from February and $5.91 above a year ago. The Class IV average now stands at $23.14, up from $17.71 a year ago, $15.94 in 2012, and $18.08 in 2011.
The National Dairy Products Sales Report (NDPSR) surveyed cheese price averaged $2.2689 per pound, down 1.75 cents from February. Butter averaged $1.8562, up 2.4 cents. Nonfat dry milk averaged $2.0897, up 1.1 cent, and dry whey, at 65.54 cents, was up 2.4 cents.
The California Department of Food and Agriculture announced its March Class 4b cheese milk price Tuesday at a record high $22.16 per cwt., up $1.02 from February and dwarfs last year’s $15.02 by $7.14. That pulls the 2014 4b average up to $21.20/cwt., up from $15.42 at this time a year ago, $13.77 in 2012, and $15.37 in 2011. The March 4a butter-powder price is a record $23.37/cwt., up 29 cents from February and $5.50 above a year ago. The 4a average now stands at $22.86, up from $17.65 a year ago, $15.67 in 2012, and $17.81 in 2011.
Monthly average milk prices were up but so were feed prices, according to USDA’s latest Ag Prices report, yet dairy profit margins are at their highest level ever. The preliminary March 2014 milk-feed price ratio slipped from February. At 2.58, the index is down from 2.60 in February and compares to 1.48 in March 2013. The index is based on the current milk price in relationship to feed prices for a ration of 51 percent corn, 8 percent soybeans, and 41 percent alfalfa hay.
The March 2014 U.S. average all-milk price was $25.40 per cwt., with a 3.77 percent fat test, up from $24.90 per cwt. in February, with a 3.81 percent test, and compares to $19.10 per cwt. in March 2013, with a test of 3.79 percent.
March corn averaged $4.54 per bushel, up 19 cents from February, but $2.59 less than March 2013. March soybeans, at $13.60 per bushel, were up 40 cents from February, but down $1.00 from March 2013. Alfalfa hay averaged $191 per ton, up $3 from February, but $28 less than March 2013.
Estimated U.S. March 2014 cull cow prices (beef and dairy combined) averaged $99.90 per cwt., according to the Ag Prices report, just a dime shy of $100 per cwt. The average is up $4.50 per cwt. from February’s revised estimate, $16.10 more than March 2013, and likely the highest monthly average ever. By the way, for some perspective, the 2011 average was $71.60 per cwt.
Cash cheese prices saw further declines the first week of April although there was a late “April Fools” on Thursday when the blocks reversed gears and jumped 3-3/4-cents only to plunge the next day. Many traders expected spot prices to crash once cheese started showing up at the CME but that didn’t happen. At any rate, the Cheddar blocks closed Friday at $2.35 per pound, down 3-1/2-cents on the week but still 58-3/4-cents above a year ago. The barrels closed at $2.2250, down 6-1/2-cents on the week, 53-1/4-cents above a year ago, but an unsustainable 12-1/2-cents below the blocks. Only one car of block was sold this week and three of barrel. The lagging NDPSR-surveyed U.S. average block price averaged $2.3450, up 8.1 cents. Barrel averaged $2.3216, up 4.1 cents.
Cheese production is building slowly as milk supplies increase towards the spring flush, according to USDA’s Dairy Market News (DMN). Current production levels are increasing slower than many manufacturers had hoped for. Advance export sales continue to draw inventory away from domestic sales. Domestic cheese demand is good despite high prices.
Cash butter took a turn downward this week, closing Friday at $1.97 per pound, down 3 cents on the week but still 26 cents above a year ago. Twelve cars traded hands on the week. NDPSR butter averaged $1.8989, up 4.9 cents.
Butter prices are steady to higher on strong seasonal demand and very good export orders. The market tone is firm as butter manufacturers finish Easter Passover retail orders. Production rates are mixed amongst the regions as cream supplies tighten and cream prices increase.
Cash Grade A nonfat dry milk ended the week at $1.9975, down 3-1/4-cents on the week. One car was sold. NDPSR powder averaged $2.0734, down 1.3 cents, and dry whey averaged 66.72 cents, up 1.3 cents and the highest since December 2012. The highest dry whey price occurred in April 2007 at 79.33 cents a pound. ❖