Farm milk prices are heading back up. The Agriculture Department announced the April Federal order Class III benchmark price at $17.59 per hundredweight (cwt.), up 66 cents from March, $1.87 above April 2012, and the highest April Class III price since 2004. It equates to about $1.51 per gallon and lifts the 2013 Class III average to $17.48, up from $16.14 at this time a year ago, $16.69 in 2011, and $13.62 in 2010.
The May Class III futures contract settled Friday at $18.70. June settled at $18.91, July $19.14, August $18.20, with a peak in September at $19.23.
The April Class IV price is $18.10, up 35 cents from March and $3.30 above a year ago. Its 2013 average now stands at $17.81, up from $15.66 a year ago, and compares to $18.50 in 2011 and $13.35 in 2010.
The AMS-surveyed cheese price averaged $1.7310 per pound, up 8.4 cents from March. Butter averaged $1.6766, up 6.2 cents. Nonfat dry milk averaged $1.5312, up a penny, and dry whey averaged 57.41 cents, down 3.1 cents.
California’s 4b cheese milk price is $16.92, up $1.90 from March, $3.49 above a year ago and 67 cents below the comparable Federal order Class III price but that is the smallest difference between the two since June 2011. The 2013 4b average now stands at $15.80, up from $13.69 a year ago and $15.13 in 2011.
The state’s 4a butter-powder milk price is $18.02, up 15 cents from March and $3.30 above a year ago. Its average now stands at $17.75, up from $15.44 a year ago, and compares to $18.22 in 2011.
Cash cheese in Chicago strengthened despite some softening in the global dairy markets due to an easing of the drought situation in Oceania. The blocks closed the first Friday in May at $1.91 per pound, up a nickel on the week and 37-1/2-cents above a year ago. Barrel closed at $1.73, up 4-1/2-cents on the week, 26 cents above a year ago, but 18 cents below the blocks. FC Stone’s April 30 eDairy Insider Opening Bell reported that a spread of 32 cents occurred in July 2008.
Seven carloads of block traded hands this week and 26 of barrel. The lagging AMS-surveyed U.S. average block price hit $1.8154, up 5.4 cents. Barrels averaged $1.7764, up 5-1/2-cents.
Increased milk production in the Midwest continues to translate into increased cheese inventories, according to USDA’s April 26 Dairy Market News (DMN). Cheese production across the rest of the country was also active with manufacturers sending milk to cheese plants in light of good sales. DMN adds that block cheese supplies were not felt to be burdensome, but some heavier supplies of barrels are weighing on the market. The effects of the spring flush appear to have buyers waiting to see where the market settles.
Cash butter closed Friday at $1.65, down 4 cents on the week but 34 cents above a year ago when butter dropped a nickel, hitting the low point for the year at $1.31. Fourteen cars were sold this week. AMS butter averaged $1.7226, up 2.8 cents.
Cream is readily available in the West, according to DMN, so butter churns continue to operate heavy schedules. Increased demand from ice cream manufacturers for cream is not slowing butter production significantly. Cream supplies in the Northeast are more plentiful because milk production is increasing with the spring flush. Butter production has increased as manufacturers deal with expanding volumes of cream.
West and Northeast churns are content to build inventories for later in the year, according to DMN. Several Central churns were actively churning to meet export contracts even though domestic interest is slower, but several operators indicate they are unwilling to compete for spot cream at this time. Northeast bulk butter prices continue to be supported by export sales.
Cash Grade A nonfat dry milk slipped a penny and a quarter on Friday to close the week at $1.7475. Extra Grade held all week at $1.70. AMS powder averaged $1.6015, up 5.4 cents, and dry whey averaged 56.50 cents, down 1.2 cents. ❖