Monthly Dairy Prices 5-10-10
The April Federal order benchmark milk price inched 14 cents higher Friday, to $12.92 per hundredweight, $2.14 above April 2009. That put the 2010 average at $13.62, up from $10.33 at this time a year ago, but compares to $17.78 in 2008. Futures price portend more gains to come. The May contract settled Friday at $13.38, June at $13.99, July $14.55, August $15.05, with a peak of $15.15 in September before heading back down seasonally. The April Class IV price is $13.73, up 81 cents from March, and $3.91 above 2009.
The four week NASS-surveyed cheese price averaged $1.3827 per pound, up 2 cents from March. Butter averaged $1.4773, up 3.9 cents. Nonfat dry milk averaged $1.1208, up 7.5 cents, and dry whey averaged 36.43 cents, down 1.2 cents. California’s comparable 4a and 4b price are issued May 3.
Cash dairy trading didn’t see a lot of change the last week of April but the block cheese price closed 2 cents higher, at $1.3875 per pound, 23-1/2-cents above that week a year ago. Barrel closed Friday at $1.38, up 3-1/4-cents on the week, and 29-1/4-cents above a year ago. Only two cars of block traded hands on the week and one of barrel. The U.S. average, NASS-surveyed block price gained 4.7 cents, hitting $1.4384. Barrel averaged $1.4209, down 1.2 cents.
Cash butter closed Friday at $1.62, up a nickel on the week, and 39 cents above a year ago. Nothing was sold. NASS butter averaged $1.5153, up 2 cents.
Cash Grade A and Extra Grade nonfat dry milk closed unchanged on the week at $1.2975 and $1.25 respectively. NASS powder averaged $1.1774, up 3.4 cents, and dry whey averaged 35.23 cents, down 1.2 cents.
Downes-O’Neill dairy economist Bill Brooks said in Tuesday’s DairyLine that “we have a lot of cheese out there and trading last week saw the highest volume on blocks in a year but we may be starting to bottom out as buyers feel comfortable about owning product.”
Butter wise, Brooks said we saw a pretty good run up following the heavy demand period of Easter but “we’re not seeing a great deal of production come in even with the wide disparity between Class III and Class IV prices and there’s still a lot of pent up demand for future product.” A lot of people want to own butter right now, he said, in anticipation of tighter supplies or export markets later on but right now it’s in a “pause period while people evaluate whether the price is at the right level or not.”
The basic message from last week’s Cold Storage report is that we still have a lot of cheese relative to demand, Brooks said. We’re back over a billion pounds, he said, a level achieved once last year but not since 1984 prior to that. We consume a lot more than we did in 1984, he admitted, but we still have a healthy supply on hand, 35 days worth, the same as what we had at the end of February.
Butter looks more promising, according to Brooks, with levels comparable to a year ago or a 46 day supply but we have price that’s 20-25 cents higher “so it goes back to anticipation of the market and folks want to own product right now because they believe there’s going to be more price increases later on down the road that they can either take advantage of or they don’t want to get hurt by.”
Finances are still stretched thin on dairy farms across the country following a horrible 2009. There is light ahead but how much remains to be seen in a time of growing budget deficits and overspending by the government. It’s been a long time of financial darkness for U.S. dairy farmers who are contemplating the pros and cons of a supply management program to keep the milk supply more in check with demand.
Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.
User Legend: Moderator Trusted User
The Castle Rock based Colorado Agricultural Leadership Foundation hosted its 12th Legend of Agriculture Dinner on Friday, Oct. 1, 2021. Held for the first time on the CALF grounds at the historic Lowell Ranch, it…