DHM Markets/Marketers: Product prices, April margins, dairy CPI

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California

 

 

NFDM Week Ending Average Price

Week ending

Avg. Price ($/lb.)

7 day sales (lb.)

April 11

1.9798

16,664,692

April 4

2.0007

16,243,376

March 28

2.0262

17,642,788

March 21

2.0332

12,751,885

March 14

2.0490

11,707,965

March 7

2.0594

8,535,939

 

CME Group, Chicago, IL

 

 

Daily Cash Trading on Wednesday, April 16, 2014

 

CLOSE

CHANGE

 

($/lb.)

(¢/lb.)

CHEESE  BARRELS

2.1875

2.00

CHEESE  40# BLOCKS

2.2225

2.50

NONFAT DRY MILK  GRADE A

1.8900

-1.00

BUTTER  GRADE AA

1.8900

-1.00

 

National Dairy Products Sales Report weekly highlights

USDA’s weekly National Dairy Products Sales Report indicated Grade AA butter prices averaged $1.98/lb. for the week ending April 12, up 2.5¢ from the previous week.

U.S. 40-lb. block cheddar cheese averaged $2.41/lb., up 1.6¢ from the previous week. The price for 500-lb. cheddar barrels, adjusted to 38% moisture, averaged $2.34/lb., down 1.5¢.

USDA Extra Grade dry whey averaged 67.2¢/lb., up 0.1¢.

USDA Extra Grade nonfat dry milk averaged $2.00/lb., down 5.3¢ from the previous week.

 

Dairy Margin Watch: April margins weaken

Dairy margins deteriorated since the end of March, due to both weaker milk prices and higher feed costs, according to the latest CIH Margin Watch report from Commodity & Ingredient Hedging, LLC. Margins remain strong in nearby Q2 at the 96th percentile of the previous 10 years, while deferred margins are at or near the 90th percentile through the first quarter of 2015.

While still very high from a historical perspective, milk prices have started to slip recently following weakness in dairy product values. Both block and barrel cheese prices have generally been in retreat since late March, while cash butter prices on the CME have similarly experienced weakness after flirting with $2.00/lb. recently. The latest results of the Global Dairy Trade auction reflected the fifth consecutive drop in price, with all products declining except anhydrous milk fat.

Corn prices, meanwhile, have firmed recently in response to tighter stocks reflected in the April World Ag Supply & Demand estimates (WASDE) report, along with slow planting progress. USDA reported corn ending stocks down 125 million bushels from March due to a similar increase in the export forecast, with the figure falling on the low end of trade expectations.  USDA also released the first crop progress report of the season, with corn plantings at 3% complete through April 13 vs. 6% on average for this point.

Soybean meal prices are also drawing support from USDA reporting soybean ending stocks down 10 million bushels from March, suggesting a continued tight supply of soybean meal through the remainder of the season. With many of our clients having previously established margin protection at high historical percentiles, the focus recently has shifted to identifying opportunities to make strategic adjustments on existing positions.

The current weakness in milk and strength in corn is providing such an opportunity to add flexibility back to price hedges.

Visit www.cihmarginwatch.com.

 

Mammoth Cave Dairy Auction

Dairy replacement sales results from Smiths Grove, Ky., on April 15:

(Holsteins, supreme and approved, unless otherwise noted)

Springers: 2-3 years old, 5-8 months bred

Supreme: 1850-2075

Approved: 1475-1700

 

Fresh Milking Cows: 2-4 years old 

Supreme: 1750-2325

Approved: 1450-1650

 

Short Bred: 2-3 years old, 1-4 months bred

Supreme: 1150-1650

Approved: 1325-1485

 

Open Heifers: (Supreme & Approved)

200-300 lbs.: 325-510

300-400 lbs.: 550-735

400-500 lbs.: 375-710

500-600 lbs.: 585-825

600-700 lbs.: 725-1050

 

Holstein Heifers Calves: Small 120-170; Medium and Large 200-470 per head.

 

Dairy CPI: Mostly higher in March

With the exception of ice cream, retail dairy product prices rose in March, according to unadjusted monthly Consumer Price Index (CPI) data released by the Bureau of Labor Statistics. Fluid milk and butter prices took the biggest jump.

Overall March 2014 retail dairy product prices were +1.0% compared to February 2014, and +2.3% compared to March 2013. That compares to retail prices for all food eaten at home, which was +0.4% compared to February and +1.4% compared to the year before.

Checking out individual products (March 2014 vs. February 2014 and March 2013, respectively): fluid milk: +1.8%; +4.8% [whole milk: +2.2%; +5.9%; other milk: +1.7%; +4.2%]; cheese: +2.0%; +2.6%; butter: +2.7%; +7.0%; ice cream: -1.3%; -0.6%; and “other” dairy products: 0.4%; -0.1%.

 

Weekly ethanol production, corn use

Ethanol production data for the week ending April 11:

Ethanol production: 39.4 million gallons/day, the highest rate of the year.

Corn used: 14.24 million bushels/day

DIstillers grains production: 93,426 metric tons/day

Source: Renewable Fuels Association

 

Fertilizer prices compared

Fertilizer prices have been increasing in recent months; however, per-acre fertilizer costs should be lower in 2014 than in recent years, according to Gary Schnitkey, University of Illinois ag economist. In this post, monthly prices for anhydrous ammonia, diammonium phosphate (DAP) and potash are shown for 2009 through 2014. In most cases, monthly fertilizer prices in 2014 have been below prices for the 2011, 2012 and 2013 crop years. Prices suggest fertilizer costs for corn of $150 /acre in 2014, compared to costs near $200/acre in 2012 and 2013. Read more

 

Chobani expands distribution to Asia and Latin America 

Chobani has begun exporting its Greek yogurt to markets in Asia, Latin America and the Caribbean, beginning with Singapore, Malaysia and Panama.

To Asia, Chobani will export single-serve cups of plain, blood orange, blueberry, honey, mango, raspberry, passion fruit and strawberry, as well as multi-serve containers of plain yogurt. Fresh Chobani will be distributed via temperature-controlled shipments from the Company’s manufacturing facility in Australia.

To Latin America, Chobani will export multiple flavors and formats via quality and temperature-controlled shipments from its upstate NY and Idaho facilities. Chobani has been available in Panama for the last few weeks and will soon be available throughout the Caribbean.

 In just over one year, Chobani has grown its Australian production from 25,000 cases a week to 25,000 cases per day and has become one of the biggest yogurt manufacturers in Australia. In the United States, Chobani remains the category leader in Greek Yogurt sales and has accelerated its growth with continued innovations and expansion.

Visit www.chobani.com or www.chobani.com.au.



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