Lee Mielke: Monthly Dairy Prices 4-15-13
Farm milk prices slipped for the fifth month in a row but have likely bottomed out for 2013. The Agriculture Department announced the March Federal order Class III price at $16.93 per hundredweight (cwt.), down 32 cents from February but $1.21 above March 2012, $1.91 above California’s 4b cheese milk price (even with the state’s temporary price increase), and equates to $1.46 per gallon. The March Class IV price is $17.75, unchanged from February and $2.40 above a year ago.
The April Class III futures contract settled Friday, April 5, at $17.52. May settled at $18.34; June, $19.33; July $19.37; and peaked at $19.38 in August and September. The 2013 Class III average now stands at $17.44, up from $16.28 a year ago, and compares to $16.63 in 2011 and $13.85 in 2010. The Class IV average is now at $17.71, up from $15.94 a year ago, and compares to $18.08 in 2011 and $13.22 in 2010.
The March AMS-surveyed cheese price averaged $1.6467 per pound, down 1.6 cents from February. Butter averaged $1.6146, up 7.1 cents. Nonfat dry milk averaged $1.5208, down 3.5 cents, and dry whey averaged 60.48 cents, down 3.2 cents from February.
California’s 4b cheese milk price was announced by the California Department of Food and Agriculture at $15.02 per cwt., down 39 cents from February but $1.35 above a year ago. The 4b average for 2013 now stands at $15.42, up from $13.77 a year ago and $15.39 in 2011.
The 4a butter-powder price is $17.87, down 14 cents from February but $2.54 above a year ago. Its 2013 average is now at $17.65, up from $15.67 a year ago and $17.81 in 2011. The prices for the months February to May include the temporary price increases resulting from the December 21, 2012 public hearing.
Cash block cheese closed the first Friday of April at $1.7625 per pound, up 7 cents on the week and 27-1/2-cents above a year ago. Barrels finished at $1.6925, up 9-1/2-cents, 23-1/4-cents above a year ago, but 7 cents below the blocks. Five cars of block traded hands on the week and seven of barrel. The AMS-surveyed U.S. average block price inched up 1.1 cent, to $1.6217, while the barrels averaged $1.6499, up 3.2 cents.
USDA’s Dairy Market News (DMN) reports that cheese production across the country continues at an accelerated pace compared to last year. Midwest cheese manufacturers are noting abundant milk supplies are available and the East and West are above year ago levels as well.
FC Stone market analyst Ryan Cox wrote in his April 5 eDairy Insider Opening Bell that “milk production is strong and we can expect product inventories to build as we go through the flush.”
Sales have been sufficient to keep inventories from building excessively, says USDA, and export demand has been good, assisted by the CWT program. “Good export sales are important in keeping inventories at manageable levels,” says DMN, but “buyers are hesitant to purchase above immediate needs.”
Speaking of the world market; milk powder prices moved sharply higher in Tuesday’s Global Dairy Trade (GDT) auction and the trade-weighted average for all products increased 14.2 percent. The April 3 Daily Dairy Report (DDR) says that the sharp increase follows previous biweekly gains of 14.8 and 10.4 percent.
Second half 2012 GDT prices moved modestly higher, but the recent gains are in response to lower-than-anticipated milk production in drought-stricken New Zealand and Australia. That is adding strength to U.S. dairy prices.
Butter closed April 8 at $1.71, up 8 cents on the week and 28 cents above a year ago. Three cars sold. The AMS butter price averaged $1.6586, up 2.9 cents.
Cash Grade A nonfat dry milk closed Friday at $1.6825, up a whopping 12-1/4-cents on the week. Three cars were sold. Extra Grade closed at $1.59, up 3 cents, on bids. AMS powder averaged $1.5066, down 0.3 cent, and dry whey averaged 58.16 cents, down a penny. ❖
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The House passed S.4054, the Grain Standards Reauthorization Act of 2020, by voice vote.