Monthly Dairy Prices 10-11-10
The September Federal order Class III milk price was announced by USDA at $16.26 per hundredweight (cwt.), up $1.08 from August, $4.15 above September 2009, and 78 cents above California’s comparable 4b cheese milk price. The 2010 Class III average now stands at $14.07, up from $10.49 at this time a year ago, but compares to $17.93 at this time in 2008. The September Class IV price is $16.76, up $1.15 from August, and $5.61 above a year ago.
Looking ahead, Class III futures settled Friday as follows: October $16.58, November $16.03, and December $15.20. That would result in a 2010 average of $14.54, up from $11.36 in 2009, and compares to $17.44 in 2008.
The four-week, NASS-surveyed cheese price averaged $1.7016, up 9.9 cents from August. Butter averaged $2.1570, up 30.6 cents. Nonfat dry milk averaged $1.1383, down 1.7 cents, and dry whey averaged 36.15 cents, up fractionally.
California’s September 4b cheese milk price is $15.48 per cwt., up $1.09 from August, and $4.08 above September 2009. Its 2010 average now stands at $13.00, up from $10.13 a year ago, and compares to $17.39 in 2008. The 4a butter-powder price is $16.61, up 92 cents from August and $5.53 above 2009.
Meanwhile, cash dairy prices were pretty quiet the last week of September. The 40-pound Cheddar blocks closed Friday at $1.76 per pound, up a penny on the week, and 32-1/2-cents above a year ago. The 500-pound barrels closed at $1.7350, unchanged on the week, and 31-1/2-cents above a year ago. No cheese was sold in the cash market all week. The NASS-surveyed U.S. average block price hit $1.7250, up 1.9 cents from the previous week. Barrel averaged $1.7267, up 2.1 cents.
Cash butter closed Friday at $2.2350, up a half-cent on the week, and a dollar above a year ago. Nothing sold all week. NASS butter averaged $2.2150, up 2.9 cents. NASS powder averaged $1.1494, up 1.4 cents, and dry whey averaged 36.26 cents, up 0.1 cent.
University of Wisconsin Professor of Dairy Market Analysis, Dr. Brian Gould, said in Tuesday’s DairyLine that butter stocks are increasing from last year while natural cheese stocks are decreasing, despite fairly strong prices.
“The cheese stocks are getting more in line to what was happening in 2009,” said Gould, “It’s not surprising, as the supply is getting a bit tighter.” He credits an increase in exports of natural cheese, which may be coming out of inventory.
And, while the cash cheese market remains quiet, Gould said, Class III futures have been quite active. “If you look at the implied cheddar cheese values from Class III, they’re about in line with what we are getting in the cash market,” he concluded, “So I think things are coming into alignment in terms of futures and cash market.”
The World Dairy Expo was another big success this year in Madison, Wisc. I believe this was the 26th or 27th show that I have attended and this year had an interesting sidelight. President Obama visited Madison in a campaign stop which snarled traffic throughout the city and closed the airport, canceling or delaying flights. The President’s plane could be seen landing from the Expo Media Room and the motorcade drove past the Expo grounds en route to the University campus where he spoke.
The Expo was perhaps the one place in Madison where the President wasn’t welcome. Expo manager Mark Clarke told DairyLine he respectfully declined a visit from the President, saying it would have been a “logistical nightmare for Expo attendees and its exhibitors.” I think most attendees would agree with the decision.