Barrels lower, but butter up

Daily CME Cash Trading on Friday, May 9, 2014











Cheddar barrels



Cheddar blocks



NFDM Grade A



Butter Grade AA




California June Class 1 prices lower

The California Department of Food & Agriculture announced the June Class 1 price for the North at $25.10/cwt., with the South price at $5.37/cwt. Both are down 78¢ from May 2014, but are about $4.25 more than June 2013. It’s the first month-to-month decline since December 2013.

The June price is scheduled to be the last to include a temporary price increase instituted by CDFA last summer.

Through the first six months of 2014, the North average Class 1 price is $24.53/cwt., up from $19.85/cwt. for the same period of 2013.

 The January-June 2014 South average is $24.80/cwt., up from $20.1/cwt. for the same period a year ago.

The June federal order Class I base price will be announced May 21.


FAO April dairy price index down

Global dairy prices declined sharply in April 2014, according to the latest United Nations’ Food and Agriculture Organization (FAO) Food Price Index. The FAO Food Price Index is a measure of the monthly change in international prices of a basket of five food commodities – cereal, vegetable oil, dairy, meat and sugar.

The April FAO Dairy Price Index dropped 6.9% from March. The market of all dairy products has been affected by reduced purchases by China (the main importer of whole milk powder and second largest importer of skimmed milk powder) and the Russian Federation (the main importer of butter). Additionally, an extended season in New Zealand and a good start to the dairy year in the Northern Hemisphere have meant that supplies for export have increased.  Prices of all dairy commodities subsided, but particularly butter and milk powder.

The FAO Meat Price Index rose 0.4% from March, driven primarily by pork and the effect of Porcine Epidemic Diarrhea virus on export supplies from the United States. Beef prices remain close to historic highs.

Overall, the FAO Food Price Index was down 1.6% from March. Sugar and vegetable oils declined by 1.6% and 2.8%, respectively, with cereals up 0.5%.


WASDE: 2014 milk production forecast unchanged; 2015 higher

USDA’s 2014 milk production estimate is unchanged from last month, but 2015 milk production is forecast higher, as lower feed costs and strong milk prices are expected to support both herd expansion and gains in milk per cow. According to USDA’s May 9 World Ag Supply & Demand Estimates report:

• 2014 milk production and marketings were projected at 206.1 billion lbs. and 205.2 billion lbs., respectively, unchanged from a month ago. If realized, 2014 production and marketings would be up about 2.4% from 2013.

• 2015 production and marketings were projected at 212.1 billion lbs. and 211.1 billion lbs., respectively. If realized, 2015 production and marketings would be up about 2.9% from 2014. Read more


Hay stocks mixed in major dairy states

Nationally, U.S. farmers entered the 2014 growing season with more hay in storage than a year ago, but that's not the case in several major dairy states, according to USDA’s Crop Production report released May 9.

All hay stored on United States farms May 1, 2014 totaled 19.2 million tons, up 35% from a year ago. While up from last tear, this is the third lowest May 1 stocks level since 1989.

May 1 hay stocks levels were record lows in California, Maine, Minnesota, New Hampshire, Pennsylvania and Rhode Island. In addition to California, Minnesota and Pennsylvania, other major dairy states reporting lower stocks compared to last year were Colorado, Idaho, New Mexico, Oregon and Texas. Read more