April Class I base up 1¢; another record
The April federal order Class I base milk price set another record high, at $23.65/cwt. It’s up a penny from March 2014 and $5.99 more than April 2013. The Class I base average for January-April 2014 is $22.70/cwt., up $4.54 from the same period a year ago.
Dairy margins march higher
Dairy margins continued to improve through the first half of March due mainly to a mid-month surge in milk prices while feed costs increased as well since the end of February, according to the latest CIH Margin Watch report from Commodity & Ingredient Hedging, LLC. Nearby Q2 margins have now reached the historic highs of 2004, while deferred margins are likewise historically strong, at or above the 90th percentile of the past 10 years.
Milk continues drawing support from the spot cheese market, with block cheddar prices at the CME reaching new all-time highs last week. January cheese and curd exports of 70.8 million lbs. were up 3.3% from December and 46% higher than the previous year. The January numbers were the largest monthly commercial cheese trade on record for the U.S., with exports accounting for 7.8% of total cheese production for the month.
It should be noted that most of this strength followed business executed at lower prices during Q4 2013, and there is some concern that current prices may discourage future demand. There are signs that U.S. dairy product prices are becoming expensive on the world market with milk production recovering in other exporting countries.
Meanwhile, feed prices have firmed over the past few weeks, as strength in ethanol margins and the conflict in Ukraine support corn, while a tightening balance sheet in the latest March World Ag Supply & Demand Estimates report for both corn and soybeans provides underlying support. Visit www.cihmarginwatch.com.
CWT assists with 4 million lbs. of cheese, butter, WMP export sales
Cooperatives Working Together (CWT) accepted 10 requests for export assistance from Dairy Farmers of America, Foremost Farms USA, Michigan Milk Producers Association, Upstate Niagara Cooperative (O-AT-KA) and Tillamook County Creamery Association to sell 220,462 lbs. of cheddar cheese, 2.535 million lbs. of 82% butter and 1.268 million lbs. of whole milk powder to customers in Africa, Central America, Europe, the Middle East and North Africa. The product will be delivered March through June 2014.
Year-to-date, CWT has assisted member cooperatives in selling 27.205 million lbs. of cheese, 14.309 million lbs. of butter and 2.573 million lbs. of whole milk powder to 20 countries on five continents. These sales are the equivalent of 573.4 million pounds of milk on a milkfat basis.
National Dairy Products Sales Report weekly highlights USDA’s weekly National Dairy Products Sales Report indicated Grade AA butter prices averaged $1.84/lb. for the week ending March 15, up 1.7¢ from the previous week. U.S. 40-lb. block cheddar cheese averaged $2.20/lb., up 1.7¢ from the previous week. The price for 500-lb. cheddar barrels, adjusted to 38% moisture, averaged $2.23/lb., up 2.0¢.
USDA Extra Grade dry whey averaged 65.1¢/lb., up 0.2¢. USDA Extra Grade nonfat dry milk averaged $2.10/lb., down 0.5¢ from the previous week.
California NFDM prices
The weekly nonfat dry milk powder report has been posted to the California Department of Food & Agriculture Dairy Marketing Branch website.
For the week ending March 14, the average price was $2.0490/lb. on total sales of 11.71 million lbs.
For the week ending March 7, the average price was $2.0594/lb. on total sales of 8.54 million lbs.
Weekly ethanol production, corn use
Ethanol production data for the week ending March 14:
Ethanol production: 37.4 million gallons/day, the lowest level in 8 weeks
Corn used: 13.51 million bushels/day
DIstillers grains production: 88,650 metric tons/day
Source: Renewable Fuels Association