MD DA950 NATIONAL DAIRY MARKET AT A GLANCE
November 16, 2012 MADISON, WI (REPORT 46)
CME GROUP CASH MARKETS (11/16):
BUTTER: Grade AA closed at $1.7950. The weekly average for
Grade AA is $1.8660 (-.0170).
CHEESE: Barrels closed at $1.7225 and 40# blocks at $1.8250.
The weekly average for barrels is $1.7880 (-.1730) and blocks,
BUTTER HIGHLIGHTS: The CME cash butter price held steady for
much of the week but trended lower by week's end to close at
$1.7950, the lowest cash price since August 20. Butter
production across the country remains seasonally active,
although many butter producers are closely monitoring fresh
production. Yearend butter orders have been very good for
upcoming Thanksgiving needs with post-Thanksgiving orders also
positive. Many producers and handlers have a pretty good
picture of butter needs for the balance of the holiday season,
thus they are balancing fresh production with inventoried
stocks. In many instances, butter producers are churning with
regular sourced cream volumes and are not aggressively seeking
additional cream volumes. Butter producers do indicate that
some additional cream volumes are available in the marketplace,
but for the most part, many are not taking advantage of the
offerings unless favorably priced. Retail promotional
activities are very prevalent in the marketplace. According to
the most recent National Dairy Retail Report, featured butter
prices ranged from $1.98 - $3.99 per pound in the U.S. with the
national average being $2.71 per pound.
CHEESE HIGHLIGHTS: Cheese prices have been on a topsy-
turvey run for the last few weeks. After topping out in late
October at $2.0800 for barrels and $2.1200 for blocks at the CME
Group in Chicago, the market has moved lower to end the week at
$1.7225 for barrels and $1.8250 for blocks. Including last
Friday's close, sales at the exchange have been active. Fifteen
loads of barrels and twenty nine loads of blocks have been sold
as the market moved up and down. Demand for cheese is good as
buyers are looking to build on sales at the lower prices. The
lower price has also increased interest into the export market.
Along with assistance from the CWT program, the exports of
cheese and curd from January-September have totaled 444.3
million pounds, a 21% increase from the same period a year ago.
Recent ad featuring for retail sales has increased as the
FLUID MILK: Class I demand continues to be very strong in
the Northeast and Mid-Atlantic regions, limiting manufacturing
milk supplies. Milk production in Florida continues to
increase, but some contacts feel the flush this year will fall
short of last year's levels. Milk production in the Southeast
continues to increase along the seasonal trend. Milk production
in the Central region is uneven. Marketers report that intakes
are at expected levels with some reports of the beginning of
increased volumes. Milk component levels are somewhat lower,
but still better than anticipated. California milk output
trends continue to indicate steady to slightly higher gains.
Processing plants are running at manageable levels and no issues
are expected over the Thanksgiving holiday period. Conditions
have been ideal for milk production across Arizona and total
output is increasing on a weekly basis. Milk production levels
in the Pacific Northwest are near or at seasonal lows. Cooler
temperatures along the coast are bringing rains and snow to the
mountains of Oregon and Washington. Utah and Idaho milk
supplies are along expected lines.
DRY PRODUCTS: Central nonfat dry milk prices for low and
medium heat are steady. High heat prices are fractionally
higher. The market tone remains firm as there appears to be
good demand for available product. Prices for Eastern nonfat
dry milk held steady for low and medium heat, but moved higher
for high heat. Strong Class I pulls are limiting the
manufacturing milk supply and volumes going to dryers. Western
low/medium heat nonfat dry milk prices and the market tone are
trending steady to slightly firmer. Buying interest remains on
the light side of normal and is slower ahead of the upcoming
Thanksgiving holiday that typically slows down transportation in
the U.S. High heat prices are unchanged. Dry buttermilk prices
in the Central region are steady to higher. The overall market
has a firm undertone, but some buyers are expressing concerns
about current price levels and how long they can be maintained.
Eastern dry buttermilk prices moved higher on the upper end of
the range, supported by transactions priced on various price
indices. Production of dry buttermilk remains about steady with
last week as butter makers continue to fill holiday orders.
Western dry buttermilk prices are slightly higher in a limited
market test. The market undertone is mostly steady with gains
mainly noted because of recent price gain momentums and changes
in index pricing. Dry whole milk prices are steady to higher in
light trading this week. Central dry whey prices are steady to
higher this week. The industry is still assessing the
repercussions of the announcement to close a Central whey
manufacturing plant. Dry whey prices in the Northeast moved
higher this week, supported by transactions based on various
price indices. Dry whey production remains steady compared to
recent weeks. Western dry whey prices are mixed. Prices on the
range series are spreading out as export sales are reported
weaker, while domestic markets are steady to firm. The mostly
series followed the same pattern. Whey protein 34% prices are
unchanged this week. Market activity has been light with
contract deliveries as expected. Lactose prices are unchanged
this week. The market remains quiet with spot sales reported to
be light. Casein markets and prices remain generally steady.
ORGANIC DAIRY MARKET NEWS (DMN): AMS reports Total Organic
Milk Products sales for September 2012, 174 million pounds, were
down 4.5% from September last year, but up 2.4% for January
through September this year compared with the same period last
year. Organic Whole Milk sales for September 2012, 44 million
pounds, were up 7.6% compared with September 2011 and up 9.5%
January through September this year compared with last year.
Organic Fat-Reduced Milk sales for September 2012, 129 million
pounds, were down 8.0% compared with September 2011 but up 0.3%
January through September this year compared with last year.
For Organic milk, the national weighted average advertised price
for half gallons is $3.86, up 38 cents from last period which
was down 12 cents from the prior period. This results in an
organic-conventional half-gallon milk advertised price spread of
$1.16, compared to $1.27 two weeks ago and $2.07 four weeks ago.
The average price spread for 2012 is $1.32.
The national weighted average advertised price of organic milk
half gallons, $3.86, is 38 cents higher than two weeks ago. The
price range is $3.39 to $4.99, 40 cents higher at the bottom of
the price range and 10 cents higher at the top. This period,
the concentration of advertised organic half gallon brands was
slightly more than two to one, national brands versus store
brands. The highest and lowest prices are for national brands.
The weighted average advertised price for national brands is
$4.02 and for store brands, $3.50. Organic butter ads occurred
in all regions. The weighted average advertised price is $4.31,
down from $4.60 two weeks ago. Prices ranged from $3.99 in all
regions except the Northeast, to $5.99. Once again, the lowest
price for organic butter, $3.99, equals the highest price for
conventional butter this period, $3.99. Organic dairy
advertising volume this survey period increased over the level
two weeks ago, but remains below the volume for most of the last
four months. Ad volume this period increased to a bit above the
bi-weekly average this year. Nevertheless, ads remain at a
level below seven of the last eight survey periods. Overall
organic dairy advertising this year averages 5,095 ads per
period compared with an average of 2,676 during 2011. Organic
milk ad numbers increased from the last survey period. The
number of organic milk ads this period is 3,184, slightly above
the average for this year, 3,013. Organic yogurt ads are weaker
than seven of the last eight reporting periods of 2012, but up
slightly from two weeks ago. This period's 819 organic yogurt
ads are below the 2012 average, 1,265. Organic butter ads
during this pre-Thanksgiving ad cycle are the fourth highest
level of the year. This survey period there were about three
times more organic butter ads than the 2012 bi-weekly average.
Organic milk still dominates total organic dairy advertising,
with 55% of total ads, down from 67% two weeks ago. This is
followed by organic butter with 26% of ads, among the highest
percentages of the year. These top two categories are followed
by organic yogurt with 14% and organic egg nog with 5%.
NATIONAL DAIRY RETAIL REPORT (DMN): Retail advertising was
featuring holiday and baking themes that included dairy products
prominently. Egg nog features began to be reported as a
seasonal item and was noted in over 7,000 store ads for quart
and half gallon packages. Ad numbers for milk were higher this
reporting period with data collectors noting ads for a "free"
gallon of milk with tie in purchases of cereals, cookies, or a
combination of products. For the national report, butter
feature prices averaged $2.71 per 1# pack, down 1 cent from two
weeks ago with a nearly 3-fold increase in ad numbers. Butter
prices ranged from $1.99 to $3.99 per pound. Cheese prices
were higher for the two highest featured items, 8 oz. shreds,
$2.33, up 14 cents, and 8 oz. blocks at $2.51, up 7 cents.
Cream cheese averaged $1.29 for 8oz. container, down 47 cents
from two weeks ago. Egg nog prices averaged $2.63 for quarts
and $3.08 for half gallons. Yogurt ad prices for 4-6 ounce
containers averaged $.50 for regular yogurt, no change, and
$1.00 for Greek yogurt, up 2 cents from two weeks ago. Sour
cream feature prices averaged $1.58, down 3 cents. The national
weighted average advertised conventional price for half gallons
this period, $2.70, is 49 cents above two weeks ago and $1.17
above four weeks ago. For Organic milk, the national weighted
average advertised price for half gallons is $3.86, up 38 cents
from last period which was down 12 cents from the prior period.
This results in an organic-conventional half-gallon milk
advertised price spread of $1.16, compared to $1.27 two weeks
ago and $2.07 four weeks ago. The average price spread for 2012
NOVEMBER MILK SUPPLY AND DEMAND ESTIMATES (WAOB): The 2012
milk production forecast is raised on higher estimated milk per
cow in the third quarter, but production forecasts for the
remainder of 2012 and 2013 are unchanged from last month. Fat
basis exports in both years are reduced largely on lower
butterfat exports, but skim solids export forecasts are raised,
largely due to whey protein product sales. Cheese prices are
forecast lower in 2012, but the forecast is unchanged for 2013.
Butter prices for both 2012 and 2013 are lowered as butter
stocks are forecast higher than last month. Nonfat dry milk is
forecast higher for both years. The whey price forecast is
unchanged for 2012 but is raised for 2013. The Class III price
for 2012 is unchanged, but the Class IV price forecast is lower
on weaker butter prices. For 2013, higher whey and nonfat dry
milk prices push the Class III and Class IV price forecasts
higher. The all milk price is forecast at $18.50 to $18.60 for
2012, unchanged from last month, but the forecast for 2013 is
raised to $19.10 to $20.00.
AUGUST MAILBOX MILK PRICES FOR SELECTED REPORTING AREAS IN
FEDERAL MILK ORDERS AND CALIFORNIA (AMS & CDFA): In August
2012, mailbox milk prices for selected reporting areas in
Federal milk orders averaged $18.22 per cwt., up $1.34 from the
July 2012 average, and down $4.03 from the August 2011 average.
The component tests of producer milk in August 2012 were:
butterfat, 3.60%; protein, 3.01%; and other solids, 5.74%. On
an individual reporting area basis, mailbox prices increased in
all Federal milk order reporting areas from the previous month.
Mailbox prices in August 2012 ranged from $21.41 in Florida to
$16.51 in New Mexico.
*****SPECIALS THIS ISSUE*****
ORGANIC DAIRY MARKET NEWS (PAGES 8 - 8B)
OCTOBER MILK SUPPLY AND DEMAND ESTIMATES (PAGES 9-10)
AUGUST MAILBOX MILK PRICES (PAGE 11)
DAIRY GRAPHS (PAGE G1-G2)
NATIONAL DAIRY RETAIL REPORT (ATTACHED)
National Dairy Market At A Glance
- U.S. readies for more 'extremely tough' trade talks with Japan
- Ag markets ended the week in decidedly mixed fashion
- Vilsack: Farm Bill, budget expand opportunity in rural America
- Crop markets set back from early-Friday highs
- Crop markets surged again Thursday night
- Accelerated Genetics sets Leadership Conference
- “Ag-gag” laws in the news
- Conventional agriculture winning some, losing some in culture war
- Can genomics, OPU and IVF take the industry to the 'next level?'
- Preventing roof collapses from snow on agricultural buildings
- Monsanto opens search for 2014 "Farm Mom of the Year"
- School breakfasts celebrated from coast to coast
AfiMilk MPC – Ultimate Milking Control solution