Mielke: Milk Prices split, cheese prices mostly down
The Agriculture Department announced the November Federal order benchmark Class III milk price at $16.76 per hundredweight (cwt.), up $1.94 from October, $1.46 above November 2015, and equates to about $1.44 per gallon, up from $1.27 in October and $1.32 a year ago. The 11-month Class III average stands at $14.64, down from $15.92 a year ago and down from $22.75 in 2014.
The Dec. 2 Class III futures settlements portend a December Class III at $17.16; January at $16.96; February, at $16.98; and March at $16.89.
The November Class IV price is $13.76, up a dime from October but $3.13 below a year ago. The Class IV average is at $13.66, down from $14.24 a year ago and compares to $22.58 in 2014. It’s the lowest November Class IV price since 2009.
California’s comparable 4b cheese milk price is $17.45 per cwt., up $3.02 from October, $3.02 above a year ago, and the highest 4b since November 2014.
It’s also 69 cents above the FO Class III price, first time the 4b has topped the Class III since December 2009. The 4b has trailed the Class III by as little as 39 cents in October, to as much as $1.39 in May, despite the temporary State mandated change in the 4b pricing formula with respect to whey. The gap in 2015 ranged from a low of 53 cents in August to a high of $2.43 in January.
The 4b average stands at $14.06, down from $14.61 a year ago and $20.40 in 2014.
The November 4a butter-powder milk price is $13.69 per cwt., up 58 cents from October but $2.88 below a year ago. The 4a average is at $13.29, down from $14.06 a year ago and $22.49 in 2014.
In other pricing news; a lower All-Milk price slid the latest milk feed price ratio lower, reversing four months of gain. The October ratio is 2.37, down from 2.47 in September but compares to 2.30 in October 2015, according to USDA’s latest Ag Prices report. The index is based on the current milk price in relationship to feed prices for a dairy ration of 51 percent corn, 8 percent soybeans and 41 percent alfalfa hay; in other words, one pound of milk today purchases 2.37 pounds of dairy feed containing that blend.
The October U.S. average All-Milk price was $16.60 per cwt., down 70 cents from September and $1.10 below October 2015.
California’s All Milk average of $15.34, was down 40 cents from September, 79 cents below a year ago, and $1.66 below Wisconsin’s. The Wisconsin average, $17.00, was down 90 cents from September and 90 cents below a year ago.
October corn averaged $3.29 per bushel, up 7 cents from September but 38 cents per bushel below October 2015.
Soybeans averaged $9.30 per bushel, down 13 cents from September, but 49 cents per bushel above October 2015.
Alfalfa hay averaged $135 per ton, down $2 from September, and $20 per ton below a year ago.
Looking at the cow side; the report shows the October cull price for beef and dairy combined averaged $65.40 per cwt., down $9.10 from September, $24.10 per cwt. below October 2015, and $6.20 below the 2011 base average of $71.60.
Cash cheese prices started December mixed. Block Cheddar dipped to $1.76 per pound Nov. 30, but rallied and closed Dec. 2 at $1.81, still a nickel lower on the week but 29 ¼ cents above a year ago. The barrels closed at $1.6150, down 7 ½ cents on the week, 13 cents above a year ago, and 19 ½ cents below the blocks. Eleven cars of block were sold on the week and 25 of barrel.
Midwest cheese makers report the wave of extra milk offered over the holiday weekend eased back as many manufacturers resumed regular processing schedules, according to Dairy Market News.
“Manufacturers indicate that, although there is a good supply of milk available, low-cost spot loads of milk are a little harder to find again.
Cheese production is very active. Processors are racing to meet committed holiday shipment deadlines. Retail cheese orders are strong and food service demand is steady. Inventories of barrels and cheese used for processing remain long.”
Western cheese makers also report solid demand from retail and food service. “Some buyers are making their final orders and restocking shelves ahead of the winter holidays.
Milk is readily available and cheese production is active. In many cases, the vat is the top choice for milk not going into the bottle. Barrels and cheese used in processing are long.
Cash butter jumped 5 ¼ cents Nov. 28 and did a 13-cent pole vault Nov. 30 only to give some back Dec. 1 and 2 and Friday. It closed at $2.1850 per pound, up 13 ¾ cents on the week but still 71 ¾ cents below a year ago when it was at $2.9025. It plunged 70 ¼ cents the following week and 14 cents the week after that.
Fourteen cars exchanged hands the week of Nov. 28 at the CME.
DMN says central region butter output was very active Thanksgiving weekend. “Butter production remains strong in order to cover anticipated robust seasonal demand, driven by the year-end holiday.”
The high volume of orders from retailers is shrinking stock levels at some plants. Inventories are balanced in others. Some Class II manufacturers are pulling heavy cream intakes. As a result, a few churners are seeking additional cream.
Cream made available over the Thanksgiving holiday kept western churns busy, says DMN. “Much of the focus is on print butter for the winter holidays. Western production remains active as processors work to fill end of year commitments. Because domestic butter shoppers note everything is better with butter, retail butter demand is strong. Inventories continue to decrease but are still larger than last year at this time.”
CME Grade A nonfat dry milk closed the week $1.0075 per pound, up 10 ¼ cents, 20 ¾ cents above a year ago, and the highest since Oct. 7, 2015.
Twenty cars exchanged hands on the week. The strength comes despite the possibility of the EU selling some of its Intervention stock back onto the market.❖
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