Lee Mielke: Monthly Dairy Prices 3-19-12
Farm milk prices dropped for the second month in a row. The Agriculture Department announced the February Federal order (FO) benchmark Class III price at $16.06 per hundredweight (cwt.), down 99 cents from January, 94 cents below February 2011, $2.64 above California’s comparable 4b cheese milk price, and equates to about $1.38 per gallon. Class III futures show additional slippage ahead and closed Friday March 9 as follows: March $15.42; April, $15.24; May, $15.21; June, $15.64; with a peak of $16.50 in September. The February Class IV price is $15.92, down 64 cents from January and $2.48 below a year ago.
The four-week NASS-surveyed cheese price averaged $1.5410 per pound, down 6.9 cents from January. Butter averaged $1.4712, down 11.9 cents. Nonfat dry milk averaged $1.3792, down a penny and a half, and dry whey averaged 64 cents per pound, down 4.8 cents.
California’s corresponding 4b cheese milk price is $13.42, down 81 cents from January, and $3.50 below a year ago. The 4a butter-powder price is $15.51, down 67 cents from January and $2.37 below a year ago.
On a brighter note; cash cheese prices saw another week of strength the week of March 5, with the blocks closing that Friday at $1.4925 per pound, up 1-1/4-cents on the week but 52-1/4-cents below a year ago. The barrels closed at $1.5025, up 2-1/4-cents on the week and 46-1/4-cents below a year ago. Nine cars of block traded hands on the week and seven of barrel. The NASS-surveyed U.S. average block price fell to $1.4873, down 0.7 cent, while the barrels averaged $1.5066, down 0.8 cent.
Plentiful milk supplies are resulting in increased manufacturing of cheese, according to USDA’s Dairy Market News. Seasonal cheese plants in the Southeast are being utilized to assist in handling of milk supplies that would typically have ended up in the Midwest.
Butter closed March 9 at $1.45, unchanged on the week but 67 cents below a year ago. No butter was sold. NASS butter averaged $1.4242, up a half cent.
Churning schedules remain heavy in all regions with cream supplies available and clearing to churns. There has been an uptick in cream utilization in higher-class products such as cream cheese, sour cream, dips and similar items, as orders are prepared for upcoming retail and foodservice needs for the Easter and Passover holidays. Trade sources indicate that the current butter price is working better for featuring print butter at retail versus the price ($2.02) a year ago. Manufacturers are making and clearing 82 percent butter for export needs and cream demand is appearing from ice cream manufacturers on a limited scale.
Cash Grade A nonfat dry milk dropped 2 cents on the week, closing at $1.2675. Extra Grade was also down 2 and closed at $1.2575. NASS powder averaged $1.3647, down 0.3 cent, and dry whey averaged 60.59 cents, down a half-cent.