Mielke: Milk prices slowly climbing
May 11, 2018
The Agriculture Department announced the April Federal order Class III milk price May 2 at $14.47 per hundredweight (cwt.), up 25 cents from March, 75 cents below April 2017 and the highest Class III since December 2017 and 20 cents above California's comparable Class 4b cheese milk price. It equates to $1.24 per gallon, down from $1.31 a year ago. The four-month average stands at $14.02, down from $16.17 a year ago and compares to $13.72 in 2016.
Class III futures settlements on May 4 portended a May price at $15.11; June, $15.56; July, $15.98; and August at $16.32, with a $16.57 peak in September and October.
The April Class IV price is $13.48, up 44 cents from March, 53 cents below a year ago, but the highest Class IV since December 2017. Its 2017 average stands at $13.13, down from $15.03 a year ago and compares to $13.06 in 2016.
California's April Class 4b cheese milk price was announced by the California Department of Food and Agriculture at $14.27 per cwt., up 31 cents from March, 3 cents below a year ago, but the highest 4b since November 2017. The average stands at $13.75 and compares to $14.97 a year ago and $13.02 in 2016
The 4a butter-powder milk price is $13.29, up 28 cents from March but 44 cents below a year ago. Its four-month average, at $12.99, is down from $14.69 a year ago and compares to $12.87 in 2016.
Some of the wind in dairy's global "sales" got knocked out in the May 1 Global Dairy Trade auction. The weighted average of products offered slipped 1.1 percent, following a 2.7 upshot on April 17.
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Leading the losses was rennet casein, down 10.5 percent. Anhydrous milkfat was down 1.9 percent, after jumping 5.3 percent last time, and whole milk powder was off 1.5 percent, after it inched 0.9 percent higher last time.
The gains were led by skim milk powder, up 3.6 percent, which follows a 3.6 percent increase last time. Cheddar was up 3.1 percent and follows a 4.6 percent boost. Lactose inched up 0.6 percent, after leading the gains last time by 14.8 percent and buttermilk powder was up 0.5 percent. It was not traded last time.
FC Stone equates the GDT 80 percent butterfat butter price to $2.4991 per pound U.S. CME butter closed May 4 at $2.3525. GDT Cheddar cheese equated to $1.8252 per pound U.S. and compares to Friday's CME block Cheddar at $1.6650. GDT skim milk powder averaged 90.68 cents per pound. Whole milk powder averaged $1.4657 per pound U.S. CME Grade A nonfat dry milk price closed May 4 at 84 1/4 cents per pound.
Back home; a small increase in the U.S. All Milk price average could not overcome sharp increases in corn, soybean and hay prices and thereby pulled the March milk feed price ratio lower. The USDA's latest Ag Prices report shows the March ratio at 1.97 down from 2.03 in February and 2.40 in March 2017.
The All-Milk price averaged $15.60 per cwt., up 30 cents from February but $1.70 below March 2017. The low was $14.10 in Michigan, with California at $14.86, up 11 cents from February, and Wisconsin at $16.20, up 60 cents.
March corn averaged $3.51 per bushel, up 13 cents from February and 2 cents per bushel above March 2017. Soybeans averaged $9.81 per bushel, up 32 cents from February and 12 cents per bushel above a year ago. Alfalfa hay averaged $166 per ton, up $11 from February, and $32 a ton above a year ago.
Dairy product prices start May a little stronger. Block Cheddar closed the first Friday of the month at $1.6650 per pound, up 4 1/2 cents on the week and 6 1/2-cents above a year ago when it jumped 12 cents. The barrels skyrocketed to $1.6025 on May 1, highest price since Dec. 15, 2017, but finished May 4 at $1.60, up 11 1/4 cents on the week, 15 cents above a year ago, and a closer to normal 6 1/2 cents below the blocks. Twenty four cars of barrel sold on the week at the CME and three of block.
The cheese market tone remains uncertain, according to Dairy Market News, but central sales activity is reported as fair to up slightly. Cheese production in the west has remained active as milk availability is stronger. Block and barrel demand is solid, keeping market prices at higher levels. Cheese demand from the international market is good due to favorable U.S. prices but participants are impatiently waiting for the grilling season here, hoping that it will help increase cheese sales and relieve processor pressure of having higher inventories.
Cash butter finished the week at $2.3525 per pound, down three-quarter cents, but 24 1/2 cents above a year ago, with 55 cars exchanging hands on the week. Butter market prices appear to be easing but butter interest is appealing, in both domestic and foreign markets. Stronger cream availability in the west is conducive to churning. Some contacts report that higher freight costs to move cream out of the west are also contributing to augmented butter production. Butter stocks are ample, said DMN, and U.S. prices are competitive with international prices and export sales are "lively."
Spot Grade A nonfat dry milk, after four previous weeks of gain, shot to 85 1/2 cents per pound April 30, highest price since Sept. 1, 2017. But it closed May 4 at 84 1/4 cents, unchanged on the week and a quarter-cent below a year ago, with 19 carloads sold on the week.
Dry whey closed the week at 31 3/4 cents per pound, up three-quarter cents.