The July Federal order farm gate Class III milk price took a 64 cent dip. The Agriculture Department announced the manufacturing grade price at $17.38 per hundredweight (cwt.), down 64 cents from June but 70 cents above July 2012, and equates to about $1.55 per gallon. That put the 2013 Class III average at $17.69, up from $16.01 at this time a year ago and $17.68 in 2011. The Class III futures portend a turnaround in the August contract, which settled Friday at $17.89. September settled at $18.42; October, $18.41; November, $17.75; and December settled at $17.20.
The Class IV price is $18.90, up 2 cents from June and $4.45 above a year ago. Its 2013 average now stands at $18.27, up from $14.84 a year ago but compares to $19.38 in 2011.
The four-week, AMS-surveyed cheese price used in determining the Class milk prices averaged $1.7142 per pound, down 6.7 cents from June. Butter averaged $1.4674, down 7.5 cents. Nonfat dry milk averaged $1.7272, down 6.7 cents, and dry whey averaged 58.04 cents per pound, up 0.7 cent.
California’s 4b cheese milk price was announced by the California Department of Food and Agriculture (CDFA) at $15.65 per cwt., including CDFA’s temporary mandated price increases. The 4b price is down 26 cents from June, 47 cents above a year ago, but $1.73 below the Federal order Class III price. The 2013 4b average now stands at $15.99, up from $14.02 at this time a year ago and compares to $16.20 in 2011.
The 4a butter-powder milk price is $18.61, up 22 cents from June and $5.11 above a year ago. The 2013 4a average is now at $18.03, up from $14.55 a year ago and compares to $19.10 in 2011.
Meanwhile, cash block cheese closed the first Friday of August at $1.7750 per pound, up 1-1/4-cents on the week, the fifth consecutive week of gain, and 6-1/2-cents above a year ago. Barrel closed at $1.7725, up 1-1/4-cents on the week and 8-3/4-cents above a year ago. Six cars of block traded hands on the week and two of barrel. AMS-surveyed block cheese averaged $1.6925 per pound, across the U.S., up 0.8-cent, while barrel averaged $1.7096, up 2 cents.
Stocks of cheese remain plentiful, but cheese production is slowing as the recent heat wave across much of the country reduced milk flows and component levels, according to USDA’s Dairy Market News (DMN).
Jerry Dryer’s July 26 Dairy and Food Market Analyst said; “Those holding this product apparently are not as bearish as some others in the cheese business. There has been a steady flow of cheese to the Exchange, but with stocks of this magnitude; there certainly was the potential for a much larger movement to market. Historically, this much inventory had cheese trading in the $1.30s.”
Export demand remains good, supported by assisted programs like Cooperatives Working Together (CWT).
Recent hot weather reduced cow comfort and pushed butterfat components seasonally lower in most areas of the country, according to Dairy Market News (DMN). With the recent downturn in butterfat components, some balancing plants indicate they have few cream loads available for clearing to the spot market. Based on cream availability, cream sales into ice cream and soft serve mix operations are active.
Butter closed Friday at $1.44, up 1 1/4-cents, but 25 cents below a year ago. Five cars were sold on the week. AMS butter averaged $1.4544, up a penny.
Butter production is declining, according to DMN. Interest in retail packaging is emerging at some churning operations. Some butter producers noted an uptick in retail interest the week of July 22.
Jerry Dryer warns that there’s a lot of butter in storage and not much of it is export-ready. “That’s unfortunate,” he said, “Because there is at least a modest appetite overseas given tight supplies in Europe and Oceania.”
Cash Grade A nonfat dry milk closed Friday at $1.7825, up a quarter-cent on the week. Extra Grade remained at $1.73. AMS powder averaged $1.7479, up 1.2 cents, and dry whey averaged 57.91 cents, down 0.3 cent. ❖