Monthly Dairy Prices 5-11-09 | TheFencePost.com
YOUR AD HERE »

Monthly Dairy Prices 5-11-09

Lee Mielke
Dairyline Communications

The benchmark farm milk price has inched a little higher. The Agriculture Department announced the April Federal order Class III milk price Friday, May 1 at $10.78 per hundredweight (cwt.), up 34 cents from March but a whopping $5.98 below March 2008, and puts the 2009 average at $10.33, down from $14.78 at this time in 2008 and $14.73 in 2007.

Class III futures, as of Friday, May 1 settlements portend a setback in May to $9.94, rebounding to $10.65 in June, $12.15 in July, $13.30 in August, and a 2009 peak of $14.82 in December, eventually reaching $15.85 in July 2010.

The Class IV price is $9.82, up 18 cents from March but $4.74 below a year ago.

The four-week National Agricultural Statistics Service (NASS)-surveyed cheese price averaged $1.2771 per pound, up 1.6 cents from March. Butter averaged $1.1665, up 3.76 cents. Nonfat dry milk averaged 81.95 cents, up fractionally from 81.66 cents, and dry whey averaged 19.49 cents, up 2.87 cents from March.

California’s 4b cheese milk price is $10.41 per cwt., down 4 cents from March, $6.38 below a year ago, and 37 cents below the comparable Federal order Class III price. The 4a butter-powder price is $9.79, up 12 cents from March, but $4.52 below a year ago.

Cheese trading at the Chicago Mercantile Exchange ended April on a down note. The blocks closed Friday, May 1 at $1.1525 per pound, down 2 3/4-cents on the week, 78 3/4-cents below a year ago, and just 2 1/4-cents above the support price.

The barrels closed Friday, May 1 at $1.0875, down 2 cents on the week, 84 1/4-cents below a year ago, and 1 1/4-cents below support. Fourteen cars of block traded hands on the week and 15 of barrel. The lagging NASS-surveyed U.S. block price average slipped to $1.2482, down 2.9 cents from the previous week while barrel averaged $1.1781, down 7.1 cents.

Cash butter closed Friday, May 1 at $1.23, up three quarters on the week, but 21 cents below a year ago. Only three cars were sold on the week. NASS butter averaged $1.1645, down 0.9 cent. NASS nonfat dry milk averaged 82.21 cents, up 0.3 cent. Dry whey averaged 20.68 cents, up a half-cent.

Price support purchases for the week totaled 5.1 million pounds of nonfat dry milk, raising the cumulative total to 230.9 million so far for the year.

There was a hint of bullishness from the latest Cold Storage report, and the March Milk Production report prior to that. But news of swine flu raised some havoc in many commodity markets according to some insiders.

Dr. Robert Cropp, emeritus professor at the University of Wisconsin at Madison, explained in Tuesday, April 28 DairyLine why cheese prices remain weak. He said that February cheese output was fairly strong and is strong seasonally. Many plants are full and stocks are ample, he said, and March 31 data shows American stocks up 6.8 percent from a year ago and total cheese was up over 8 percent.

On the other hand, Cropp pointed out that milk production is slipping, according to March data. California output was off 3 percent, a “significant amount,” he said, but he sees cheese prices remaining close to current levels for a while.

“As we clean out some stocks but as we move through the summer and early fall, I think you’re going to see some comeback.”

Buyers aren’t building inventory, he said, and are taking advantage of the low prices as they need cheese. But he sees strength returning in June, July, and August. Don’t expect $2 cheese, he cautioned, but $1.30-$1.40 seems like a “reasonable number.” He doesn’t see cheese moving to the government unless prices fall below support to make it economically feasible to sell to Uncle Sam.


Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.

User Legend: iconModerator iconTrusted User