Lee Mielke: Monthly Dairy Prices 5-9-11 | TheFencePost.com
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Lee Mielke: Monthly Dairy Prices 5-9-11

Lee Mielke
Mielke Productions

“What goes up, must come down,” so it’s said and so true of milk prices. The Agriculture Department announced the April Federal order Class III benchmark price April 29 at $16.87 per hundredweight (cwt.), down $2.53 from March but still $3.95 above April 2010. That pulled the 2011 average to $16.67, up from $13.62 at this time a year ago, and compares to a meager $10.33 in 2009.

Looking ahead, the CME’s May Class III contract settled Friday at $16.41, June $17.33, July $17.73, August $17.97, September $18.02, October $17.89, November $17.34, and December $16.93.

The April Class IV price is $19.78, up 37 cents from March, $6.05 above a year ago, and $2.91 above the Class III price.

The four-week, NASS-surveyed cheese price averaged $1.6983 per pound, down 27.4 cents from March. Butter averaged $1.9975, down 6.2 cents. Nonfat dry milk averaged $1.5680, up 7.4 cents, and dry whey averaged 48.08 cents, up 2.3 cents.

California’s April 4a and 4b prices are scheduled for release on May 2. Downes-O’Neill dairy economist Bill Brooks looks for the 4a butter-powder price to come in at around $19.46. That would be a 46 cent gain from March and would be $5.97 above a year ago. He looks for the 4b cheese milk price to hit $14.34, down $2.42 from March, $2.04 above a year ago, and would be $2.53 below the comparable Federal order Class III price.

The cash cheese market saw some strength the last week of April. The 40-pound blocks closed the week at $1.6125 per pound, up a penny and a quarter, and 24-1/2-cents above a year ago. The 500-pound barrels closed at $1.6025, up 2-1/4-cents on the week, and 22-1/4-cents above a year ago. Nineteen cars of block traded hands on the week and 20 of barrel. The NASS-surveyed U.S. average block price lost 2-1/2-cents, slipping to $1.6202, while the barrels averaged $1.6222, up 0.1 cent.

Eyes were particularly on butter as many expected it to slip with Easter behind us, but it closed Friday at $2.0750, up 7-1/2-cents on the week, and 45-1/2-cents above a year ago. Twenty cars traded hands on the week. NASS butter averaged $1.9878, up a penny and a half.

Cash Grade A nonfat dry milk closed at $1.6450, up 3-1/2-cents on the week, while Extra Grade held all week at $1.80. NASS powder averaged $1.5716, down a half-cent, and dry whey averaged 48.07 cents, down 0.3 cent.

Downes-O’Neill’s Bill Brooks said in Tuesday’s DairyLine that butter could still fall but may be in a situation where stocks need some replenishing following the holiday. He admitted that he hasn’t seen much in the way of sales data but suspects that sales were stronger than anticipated, considering butter prices hovered around $2 for most of the year.

He also pointed to the higher prices on the world market and the concern where future supplies will be. Last week’s Cold Storage report indicated that we built stocks in March, he said, but not by a huge amount. He believes there’s an “underlying nervousness” about our fat supplies as we approach the summer months and milk production starts to decline.

The April 21 Daily Dairy Report stated that American cheese stocks continued to shrink in March, calling it “an unusual development for stocks at this point in the year.” When asked what was behind that, Brooks theorized that there has been some shifting around in when those inventories were pulled out. He recalled that, last fall stocks were building when they would normally be pulled out.

“Whether we pushed some sales forward or what exactly happened I’m not positive on that,” Brooks said, “But, going into the Cold Storage report, three of the previous 10 years we had pulled stocks down so it’s not anything that’s completely out of the question to see stocks decline during the month of March; it just doesn’t happen very often.”

He said the export market’s influence, “changes in tastes and preferences, some of our seasonality is getting thrown out of whack right now and it’s very difficult to hold to those normal movements we typically see,” he concluded.

Last but not least I announced on Friday’s broadcast that I am retiring from the DairyLine microphone after almost 23 years. DairyLine’s parent company, DairyBusiness Communications, offered and I accepted an early retirement package and Bill Baker will become the new host of DairyLine.

It has been an honor and a privilege for me to have served this great industry in this capacity. DairyLine was an idea the Lord put on my heart in 1988, after doing a local farm program in Lynden, Wash., for several years and it grew beyond my wildest imagination. I will continue to write my weekly column and I thank my listeners and readers for the confidence and trust that I have so enjoyed this past 23 years.


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