Monthly Dairy Prices 7-12-10
July 12, 2010
The June Federal order Class III milk price was announced Friday at $13.62 per hundredweight (cwt.), up 24 cents from May, $3.65 above June 2009, and $1.39 above California’s comparable 4b price. The 2010 Class III average now stands at $13.58, up from $10.19 at this time a year ago, but compares to $18.26 in 2008.
Class III futures portend more gain to come. The July contract settled Friday at $13.45, August at $14.36, and September at $14.82, with a peak of $14.86 in October before the seasonal downturn. The Class IV price is $15.45, up 16 cents from May and $5.23 above a year ago.
The NASS-surveyed cheese price averaged $1.4475 per pound, up 2.2 cents from May. Butter averaged $1.5946, up 1-1/2 cents. Nonfat dry milk averaged $1.2631, up 1.1 cent, and dry whey averaged 36.88 cents, up fractionally.
California’s June 4b cheese milk price is $12.23, down 17 cents from May but $2.71 above a year ago. The 2010 average now stands at $12.29, compared to $9.84 a year ago. The 4a butter-powder price is $15.26, up $1.31 from May, and $5.20 above a year ago.
The cash block cheese price closed June Dairy Month at $1.4550 per pound, up 4-1/2-cents on the week and 34 cents above a year ago. Barrel closed at $1.40, up a half-cent on the week, and 30 cents above a year ago. Ten cars of block traded hands on the week and three of barrel. The NASS U.S. average block price lost 3.6 cents, dipping to $1.4063. Barrel averaged $1.3885, down 0.2 cent.
Cash butter closed Friday at $1.75 up 3 cents on the week, 55-3/4 cents above a year ago, and the fifth consecutive weekly increase. Only one car was sold on the week. NASS butter averaged $1.6478, up 4.7 cents.
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Cash Grade A nonfat dry milk lost 2 cents on the week, closing Friday at $1.23. Extra Grade held all week at $1.2450. NASS powder averaged $1.2159, down 9-1/2 cents, and dry whey averaged 36.34 cents, down 0.8 cent.
Dairy bottom lines were a little stronger in June, according to USDA’s latest Milk-Feed Price Ratio which came in at 2.33, up from May’s revised estimate of 2.19, and compares to 1.45 in June of 2009. The All Milk Price was estimated at $15.80 per cwt., up 70 cents from last month’s estimate, and $4.50 above a year ago.
Corn averaged $3.38 per bushel, down a dime from May, and 63 cents below a year ago. The soybean price, at $9.39 per bushel, was down two cents from May, and $2.01 below a year ago. Alfalfa baled hay was $119.00 per ton, down $2.00 from May, and $9.00 below a year ago.
The University of Wisconsin’s Dr. Brian Gould said in Tuesday’s DairyLine that the butter market is anticipating improved exports and given the “normal level of stocks,” any increase in butter exports is “really going to have a positive impact on prices,” and the upward trend since May is indicative of that.
Cheese prices are reacting the year over year increases in milk production, he said, and the “exceedingly high stocks of cheese.”
Gould also commented on Friday’s Department of Justice/USDA workshop on competition and regulatory issues in the dairy industry. He said a primary concern of a lot of the attendees was a possible change in the Capper-Volstead act which exempts cooperatives from antitrust litigation. The message that came out from the workshop, he said, was that there would not be any changes.
The workshop featured three panels, one dealing with the state of the industry, one with market consolidation, and one on price and market transparency. Gould said it was a packed house and remains to be seen whether anything of substance will come of it.
He expressed concern in that most of the comments that were made in the two public comment periods were centered on milk pricing, which was really not the focus of the workshop.
The workshop was the third in a series but focused on dairy, according to a special report from Dairy Profit Weekly’s Dave Natzke. U.S. Agriculture Secretary Tom Vilsack acknowledged the financial struggle in rural America, particularly among dairy farmers, and emphasized the importance of cooperatives in agriculture and said the purpose of the workshop was not to weaken cooperatives.