Lee Mielke
Mielke Productions

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July 11, 2014
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Lee Mielke: Monthly Dairy Prices 7-14-14

The Agriculture Department announced the June Federal order Class III benchmark milk price this week at $21.36 per hundredweight, down $1.21 from May but $3.34 above June 2013, and equates to about $1.84 per gallon. The half-year Class III average now stands at $22.68, up from $17.74 at this time a year ago and $15.90 in 2012.

Looking ahead, Class III futures settled Thursday as follows: July, $21.38; August, $20.58; September, $20.32; October, $20.25; November, $19.81; and December, $19.50.

The June Class IV price is $23.13, up 48 cents from May and $4.25 above a year ago. Its 2014 average now stands at $23.09, up from $18.17 a year ago and $14.90 in 2012.

The four-week, National Dairy Product Sales Report (NDPSR)-surveyed cheese price used in calculating this month’s prices was $2.0358 per pound, down 13.5 cents from May. Butter averaged $2.1874, up 14 cents. Nonfat dry milk averaged $1.8633, down 1.4 cents, and dry whey averaged 67.89 cents per pound, up fractionally from May.

The California Department of Food and Agriculture announced its June 4b cheese milk price at $19.07 per hundredweight, down another 27 cents from May after losing $2.39 last month, $2.29 below the comparable Federal order Class III price, but is still $3.16 above June 2013. That puts the midyear 4b average at $20.63, up from $16.05 at this time a year ago and $13.83 in 2012.

The June 4a butter-powder price is $23.19, up 62 cents from May and $4.80 above a year ago. The 4a average now stands at $22.94, up from $17.94 a year ago and $14.73 in 2012.

These prices include the CDFA-mandated price enhancement but this will be the final month of that. As of July 1, all California prices will be under the old formulas.

Cash cheese prices are below $2 per pound again. The Cheddar blocks closed the 4th of July-holiday-shortened week at $1.9675 per pound, down 5-1/4-cents on the week but still 30-1/4-cents above a year ago. The barrels closed Thursday at $1.9850, down 2-1/2-cents on the week, 31-1/2-cents above a year ago, and 1-3/4-cents above the blocks. Twenty six cars of block traded hands on the week and three of barrel. The ever lagging NDPSR-surveyed U.S. average block price hit $2.0388, up 0.7 cent from the previous week, and the barrels averaged $2.0165, up 0.3 cent.

Cheese production is steady across the nation as manufacturing milk is readily available in most regions, according to Dairy Market News. Cheese plants are operating at or near capacity to take advantage of the milk supplies but also to secure spot offerings at below Class pricing. Increased offerings of condensed skim are also available to boost vat yields.

Cash butter skyrocketed 11 cents Monday, then shifted into reverse and gave it all back, closing Thursday at $2.39 per pound, unchanged on the week but 86-1/2-cents above a year ago. Nineteen cars were sold on the week. NDPSR butter averaged $2.2095, up 3.5 cents.

Additional butter operators sold cream supplies, leaving churn rates reduced. The current tight cream situation has created more demand for bulk butter, which is exceeding spot offerings. Production rates are steady to lower. Export orders are reduced as international prices remain lower than U.S. prices. Retail sales are mixed amongst the regions with some affected by current high prices.

Cash Grade A nonfat dry milk closed Thursday at $1.7725, down 3-1/2-cents on the week. Four cars were sold. NDPSR powder averaged $1.8796, up 0.6 cent, and dry whey averaged 68.31 cents per pound, up 0.4 cent.

The preliminary June milk feed price ratio was unchanged from the revised May level, according to USDA’s Ag Prices report. The June milk-feed price ratio is at 2.24, unchanged from May, and compares to 1.52 in May 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, in other words, 1pound of milk today can purchase 2.28 pounds of dairy feed of that blend.

The June U.S. average all-milk price was $23.30/cwt., down from $24.20 in May, and compares to $19.50 in June 2013. June corn, at $4.37 per bushel, was down 34 cents from May and $2.60 less than June 2013. Soybeans averaged $14.10 per bushel, down 30 cents from May, and $1.00 per bushel below a year ago, and alfalfa hay averaged $222 per ton, down $2 from May, but $2 per ton more than June 2013.

The report shows the preliminary June cull price for beef and dairy combined averaged $105 per cwt., up $1 from May, and $23.40 per cwt. above June 2013. ❖

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The Fence Post Updated Jul 9, 2014 03:58PM Published Jul 28, 2014 02:10PM Copyright 2014 The Fence Post. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.