Lee Mielke: Monthly Dairy Prices 3-11-13
March 11, 2013
Farm gate milk prices fell again. The Agriculture Department announced the February Federal order (FO) benchmark Class III price at $17.25 per hundredweight (cwt.) down 89 cents from January but still $1.19 above February 2012 and equates to about $1.48 per gallon. The two-month average now stands at $17.70, up from $16.56 a year ago and $15.24 in 2011.
Class III futures show more fall to come. The March contract was trading late Friday morning at $16.83 per cwt. April was at $17.08; May, $17.43; June, $17.65; July, $18.05; August, $18.30; with a peak at $18.40 in September. The Class IV price is $17.75, up 12 cents from January and $1.83 above a year ago.
The AMS-surveyed cheese price averaged $1.6623 per pound, down 8.6 cents from January. Butter averaged $1.5438, up 3.7 cents. Nonfat dry milk averaged $1.5559, down slightly, and dry whey averaged 63.93 cents, down 1.1 cent.
California's comparable 4b cheese milk price is $15.41, down 43 cents from January, $1.99 above a year ago, but $1.84 below the FO Class III price, even with the temporary price boast just approved by CDFA. Its two month average now stands at $15.63, down from $15.85 a year ago and $17.19 in 2011.
Cheese production across the US is up as available milk supplies are headed to cheese plants in many parts of the country, according to DMN. Retail sales are in line with expectations.
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The 4a butter-powder price is $18.01, up 93 cents from January and $2.50 above a year ago. Its two month average is $17.55, up from 13.83 in 2912 and compares to $14.71 in 2011.
Cheese prices are unsettled with buyers and sellers continuing to look for a clear market direction, reports USDA's Dairy Market News (DMN). Uncertainty over future cheese supplies for the second and third quarter is adding to the confusion, it said.
Chicago Mercantile Exchange 40-pound cash block cheese closed March 1 at $1.5750 per pound, down 5-1/4-cents on the week but still 9-1/2-cents above a year ago. The 500-pound barrels closed at $1.56, down 7 cents on the week and 8 cents above a year ago. Nine cars of block traded hands on the week and 10 of barrel. The lagging, AMS-surveyed U.S. average block price inched up 0.4 cent, to $1.6620. Barrel averaged $1.6285, up 3.8 cents.
Cheese production across the US is up as available milk supplies are headed to cheese plants in many parts of the country, according to DMN. Retail sales are in line with expectations. Increased pizza promotions have grown mozzarella demand. Export sales are said to be increasing. The CWT program is assisting with sales and international prices are in line with domestic prices adding to demand. Cheese stocks are reported to be manageable.
Cash butter dropped 4 cents early in the week but rallied 2-1/2 on a bid Friday to close at $1.5750, down a penny and a half on the week and 12-1/2 above a year ago. Eight cars sold on the week. AMS butter averaged $1.5793, up 1.7 cents.
Butter production is active throughout the country, according to USDA. Butter makers are building inventories with confidence, according to DMN, prices range from 4 cents under to 7 cents over the market, and demand is active.
Cash Grade A nonfat dry milk slipped three quarter cents on the week to $1.4975. Extra Grade remained at $1.56. AMS powder averaged $1.5744, up 1.7 cents, and dry whey averaged 63.05 cents, down 0.4 cent. ❖