Lee Mielke
Mielke Productions

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November 12, 2013
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Lee Mielke: Monthly Milk Prices 11-11-13

The October Federal order Class III benchmark milk price is $18.22 per hundredweight (cwt.), up 8 cents from September but $2.80 below October 2012, $1.40 above California’s comparable 4b cheese milk price, and equates to about $1.57 per gallon. That brought the 2013 Class III average to $17.82, up from $16.98 in 2012 and compares to $18.25 in 2011 and $14.36 in 2010.

Class III futures settled Friday morning at $18.84 for November and $18.27 for December. That would result in a 2013 average of $17.93, up from $17.44 a year ago and compares to $18.37 in 2011.

The October Class IV price is $20.17, up 74 cents from September and $1.63 above a year ago. The 2013 average now stands at $18.66, up from $15.56 in 2012 and $19.38 in 2011.

The product averages used in calculating the Class milk prices had cheese averaging $1.8025 per pound, up 0.6 cent from September. Butter averaged $1.5454, up 11.9 cents. Nonfat dry milk averaged $1.8366, up 2.8 cents, and dry whey averaged 57.31 cents per pound, down fractionally.

California’s 4b cheese milk price is $16.82 per cwt., up 17 cents from September but $2.61 below October 2012. That put the 2013 4b average at $16.17, up from $15.16 at this time a year ago and compares to $16.41 in 2011. The 4a butter-powder milk price is $20, up 53 cents from September $2.04 above a year ago. Its 2013 average now stands at $18.44, up from 15.18 a year ago and compares to $19.15 in 2011.

The dairy markets had a lot to absorb this week, including the Cold Storage, Livestock Slaughter, and Ag Prices reports, plus anticipating Friday afternoon’s September Milk Production report.

Cash block cheese was up for the fifth consecutive week the last week of October, closing that Friday at $1.9025 per pound, up 2-3/4-cents on the week but 20-3/4-cents below a year ago. The barrels finished at $1.87, up a nickel on the week and 21 cents below a year ago. Nine cars of block traded hands on the week and only three of barrel. The AMS-surveyed U.S. average block price hit $1.7980, up 0.9 cent. Barrel averaged $1.80, up 3.1 cents.

Cheese production is active in the face of tighter milk supplies, according to Dairy Market News (DMN). “Demand is good enough for plants to look for additional milk, but price and availability are hindering deal making.” Competition from Class II manufacturers for available milk is restricting access to additional spot loads for cheese, according to DMN.

Some plants are reconstituting nonfat dry milk and purchasing cream to bolster production schedules. Seasonal demand is good as retailers look to secure additional supplies for the upcoming holidays. Adding to the demand is current good export ordering, says DMN.

Cash butter reversed three weeks of losses, thanks to the Thanksgiving holiday ahead and the Cold Storage data, and closed Friday at $1.5325, up 5-3/4-cents on the week but still 35-1/2-cents below a year ago. Nine cars traded hands on the week. The AMS butter average was $1.5239 per pound, down 4.4 cents.

Butter production varies by region, being active in the West and Northeast but slower in the Central Region, according to DMN. Continued strong orders are driving Western and Northeast production. Inventories in those regions are also being used to meet orders but Central manufacturers report that orders from retailers are slower than expected.

Cash Grade A nonfat dry milk closed Friday at $1.91, up a penny, and Extra Grade held all week at $1.85. AMS powder averaged $1.8457, up 0.3 cent. Dry whey averaged 56.04 cents, down 1.1 cent. ❖

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The Fence Post Updated Nov 13, 2013 06:10AM Published Dec 2, 2013 02:41PM Copyright 2013 The Fence Post. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.