Monthly Dairy Prices: Jan. 11, 2016
The Agriculture Department, acting like a late arriving Grinch, announced the final federal order Class III benchmark milk price of 2015 at $14.44 per hundredweight (cwt.), down 86 cents from November, $3.38 below December 2014, and equates to about $1.24 per gallon, down 8 cents from November. It is the lowest Class III price in four years, January 2011 to be exact, when it stood at $13.48. The 2015 Class III average is $15.80, down from the record high $22.34 in 2014, and compares to $17.99 in 2013.
The January 2016 Class III futures contract settled Thursday at $13.56; February, $13.75; and March at $14.18. The price didn’t top $16 until August’s $16.11 and the 2016 peak was in October at just $16.40.
The December Class IV price, at $15.52 per cwt., is down $1.37 from November and $1.18 below a year ago. The Class IV averaged $14.35 in 2015, down from $22.09 in 2014 and $19.05 in 2013. The Class IV bottomed out in August at $12.90, lowest level since February 2010, and peaked in November at $16.89.
California’s December 4b cheese milk price dropped to the lowest level since January 2011, at $12.90 per cwt., down $1.53 from November, $1.88 below December 2014, and $1.54 below the comparable federal order Class III price. That’s despite the temporary price adjustment mandated by the California Department of Food and Agriculture. The 4b price has lagged the federal order Class III from as little as 53 cents in August to as much as $2.43 in January, fueling the effort to form a federal order in the Golden State. Last year the price difference varied from as little as 84 cents in January to a high of $$3.24 in November.
The 2015 4b average is $14.47, down from $19.93 in 2014 and $16.42 in 2013, and compares to a 2015 average of $15.80 in the federal order.
The December 4a butter-powder milk price is $14.55, down $2.02 from November, and interestingly, $2.02 below a year ago. The 4a average for 2015 is $14.10, down from $22.00 in 2014 and $18.85 in 2013.
Meanwhile, Santa made a second visit to Chicago where dairy product prices ended 2015 on an up note. The block Cheddar finished the New Year holiday shortened week at $1.5075 per pound, up 5 3/4-cents on the day, up 10 1/4-cents on the week, but 6 1/4-cents below a year ago. The Cheddar barrels end the year at $1.53, up a nickel on the day, up a dime on the week, a penny below a year ago, and an atypical 2 1/4-cents above the blocks. Nine cars of each traded hands on the week.
Cheese production is scheduled very heavily at most Midwest cheese plants, according to Dairy Market News (DMN).
“Cheese is a preferred use for the extra milk not needed for retail fluid markets. Thankfully, America’s love affair with cheese is growing and is at an all-time high,” according to recent USDA data.
Butter is also very popular and increasingly so. The CME butter price ended 2015 at $2.08 per pound, up a penny and a half on the day, up 4 1/4-cents on the week, and5 1/4-cents above a year ago. Twelve cars were sold on the week.
Cash Grade-A nonfat dry milk (NFDM) closed Thursday at 75 1/2-cents per pound, down a half-cent on the week and 24 1/2-cents below a year ago. Thirteen cars exchanged hands in the last week of 2015 at the CME. ❖
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User Legend: Moderator Trusted User
I want to address a couple of issues in this week’s editor’s note.