Lee Mielke: Monthly Dairy Prices 9-10-12
Farm milk prices moved higher for the third month in a row. The Agriculture Department announced the August Federal order Class III benchmark price at $17.73 per hundredweight (cwt.) up $1.05 from July but still $3.94 below August 2011, and equates to about $1.52 per gallon. That put the 2012 Class III average at $16.23, down from $18.18 at this time a year ago, and compares to $13.80 in 2010 and $10.29 in 2009.
Looking ahead; the September contract settled Friday at $18.89; October, $19.76; November, $19.90; and December, $19.88, falling back from the $20 plus levels of a few days before.
The AMS-surveyed cheese price averaged $1.7682 per pound, up 8.3 cents from July. Butter averaged $1.6859, up 14.7 cents, nonfat dry milk averaged $1.2543, up 8 cents, and dry whey averaged 53.52 cents, up 3.3 cents from July.
The August Class IV price is $15.76, up $1.31 from July but 4.38 below a year ago. California’s comparable 4a and 4b prices are scheduled to be announced September 4 by the California Department of Food and Agriculture.
The cash cheese market ended August on a down note with the blocks closing Friday at $1.82 per pound, down 3 1/4-cents on the week but 3 cents above a year ago. Barrel closed at $1.7775, down 2-1/2-cents on the week and 1-3/4-cents above a year ago. Thirteen carloads of block traded hands on the week and 24 of barrel. The AMS-surveyed, U.S. average block price hit $1.8121, up 5.8 cents on the week, while the barrels averaged $1.8320, up a nickel.
Stewart Peterson’s Matt Mattke pointed out in Tuesday’s DairyLine that the U.S. Cheddar price is about 20 cents higher than the international price so that may be stalling the U.S. market. “The cash market is having a tough time getting to $1.90,” he said.
Meanwhile, as if we don’t have enough issues to be concerned about, farmers are on high alert for the naturally occurring toxin in corn due to the draught. Trace amounts have been reportedly showing up and could push prices even higher of the reduced supply of untainted crop. The Iowa Department of Agriculture and Land Stewardship will require aflatoxin screening and testing of milk received in Iowa, beginning August 31 and continuing indefinitely.
Cash butter closed the week at $1.84, up 4-cents but still 16-1/2-cents below a year ago when it fell almost 9 cents and began a decent that shaved 33 cents off the price before rebounding in early October. Six cars of butter traded hands this week and the AMS butter price averaged $1.7576, up 4.2 cents.
Churning activities across the country are mixed depending on cream availability and price, according to USDA. Students are returning to classrooms, thus school milk bottling schedules are resuming. Churning is often not keeping pace with demand, thus inventoried stock is being used. Butter producers that are taking advantage of additional cream offerings and generating butter beyond current needs are clearing the extra production to inventory and “holding those stocks with confidence,” says USDA.
Cash Grade A nonfat dry milk closed Friday at $1.70, up 3-1/2-cents on the week, and Extra Grade held all week at $16250. AMS powder averaged $1.2955, up 3.8 cents, and dry whey inched 0.8 cent higher, to 54.76 cents per pound. ❖
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