Lee Mielke: Monthly Dairy Prices 12-17-12
Farm milk prices have peaked for 2012. The Agriculture Department announced the November Federal order benchmark Class III price Wednesday at $20.83 per hundredweight, down 19 cents from October but still $1.76 above November 2011, a whopping $2.35 above California’s comparable 4b cheese milk price, and the highest November price ever. It equates to about $1.79 per gallon.
The 2012 average, now at $17.33, is down a dollar from this time a year ago and compares to $14.46 in 2010 and a disastrous $11.03 in 2009. Look for a big drop ahead. The December Class III futures contract settled Friday morning at $18.51. January settled at $18.07; February, $18.07; March, $18.30; and April at $18.39.
The November Class IV price is $18.66, up 12 cents from October and 79 cents above a year ago.
The AMS-surveyed cheese price averaged $2.0146 per pound, down 3.3 cents from October. Butter averaged $1.8410, down 7.6 cents. Nonfat dry milk averaged $1.5143, up 5.1 cents, and dry whey averaged 64.8 cents up 2.8 cents.
California’s November 4b cheese milk price is $18.48, down 95 cents from October but $1.29 above a year ago. That put its 2012 average at $15.47, down $1.01 from a year ago and $2.22 above 2010. The 4a butter powder price is $18.27, up 31 cents from October and 57 cents above a year ago. Its 2012 average is $15.46, down $3.56 from a year ago but 64 cents above 2010.
The cash cheese market was mixed the first week of December. The 40-pound blocks closed the first Friday of the month at $1.76 per pound, unchanged on the week but 10-1/2-cents above a year ago. The blocks have tumbled 36 cents, from a $2.12 per pound high in late October.
The 500-pound barrels closed December 7 at $1.66, down 5-1/4-cents on the week, 8-3/4-cents above a year ago when they plunged 14 cents to $1.5725, but are 10 cents below the blocks so, either the blocks will have to come down or the barrels move higher to reestablish the customary 3 to 4 cent spread. The barrel price has plunged 42 cents from its late October peak of $2.08. Only five cars of barrel were sold in the cash market the first week of December. The ever lagging AMS-surveyed, U.S. average block price lost 7.7 cents, hitting $1.9197, while the barrels averaged $1.8373, down 7.9 cents.
Cheese plants were busier as extra manufacturing milk was available over the Thanksgiving holiday and long weekend, according to USDA’s Dairy Market News (DMN). The lower cheese prices have buyers ordering to refill store shelves after the holiday. Retail sales were reported as good. Recent price declines also helped spark interest into aging programs, according to DMN.
Cash butter inched up a half-cent Wednesday reversing 12 consecutive sessions of loss, added another half-cent Thursday, and closed Friday at $1.59, still a penny below the previous week, the fourth week of decline, and a nickel below a year ago. It peaked at $1.9325 in early October. Twenty cars found new homes the first week of December. AMS butter plunged 14.6 cents, averaging $1.7088. AMS powder averaged $1.5310, up 1.1 cent, and dry whey averaged 65.7 cents, up 0.3 cent.
Churning over the Thanksgiving holiday was seasonally strong, according to DMN, as surplus cream was plentiful. Milk handling returned to normal following the holiday and Class I orders were increased as schools and colleges resumed. ❖