MD DA950 NATIONAL DAIRY MARKET AT A GLANCE
February 8, 2013 MADISON, WI (REPORT 6)
CME GROUP CASH MARKETS (2/08):
BUTTER: Grade AA closed at $1.5550. The weekly average for
Grade AA is $1.5550 (+.0200).
CHEESE: Barrels closed at $1.5600 and 40# blocks at $1.6500.
The weekly average for barrels is $1.5480 (+.0065) and blocks,
BUTTER HIGHLIGHTS: With churns active in all regions and
manufacturers making butter for inventory with confidence, and
with some customers also seeking additional volumes, there is
still cream moving from the West and East to the Central region.
Eastern spot cream loads clearing into the Central region this
week carried multiples in the low 1.10's. Prices range from 1.5
to 4 cents over market. Northeast bulk butter prices remain
strong and range from 4 to 14 cents over the market based on the
CME Group with various time frames and averages used. Western
prices for bulk butter range from flat to 4 cents under the
market. Advertised U.S. butter prices from the National Dairy
Retail Report showed a weighted average price of $2.80 per pound
compared to $2.63 two weeks ago. Nationally, the numbers of
butter ads are nearly equal with two weeks ago. According to
NASS, cumulative 2012 butter production at 1,857.1 million
pounds was 2.6% above cumulative production for 2011. December's
monthly U.S. butter production totaled 173.2 million pounds, up
20.9% from November and 4.4% higher compared to December 2011.
The Kansas City Commodity Office issued Bid Invitation Number
2000001644 on February 5, 2013 for salted butter packaged in
36/1pound cartons totaling 246,240 pounds. Deliveries are due
between April and June 2013. Offers are due February 12, 2013.
More information on offer specifications may be obtained at:
CHEESE HIGHLIGHTS: Cheese prices began to show some strength
this week after a month of lower prices. Spot trading at the CME
Group was mixed this week with slightly higher prices as the week
progressed. There continues to be a large spread between barrel and
block pricing as barrels are trading more than blocks at the exchange.
Cheese production is higher than year ago levels across much of the
country. Western manufacturers are running at near equal to last year
due to tighter milk supplies. Lower prices have increased interest
from buyers looking to put cheese into aging programs as well as
acquire product for processing. Export sales are being assisted
through the CWT program as bids for 4.7 million pounds of cheese were
accepted this week. Although prices have come down over the last
month, CME Group monthly averages for January are over 10 cents higher
than year ago for barrels and over 14 cents higher for blocks. Friday
at the CME Group, barrels closed at $1.5600 up $.0175 from the
previous week and blocks closed at $1.6500 up $.0050.
FLUID MILK: Milk production remains strong in the
Northeast and Mid-Atlantic regions. Additional Class I demand
and shipments were occurring ahead of a late in the week
blizzard. Some areas in the Northeast are forecast to receive
feet of snow. Those levels will restrict milk deliveries from
the farms to plants and provide transportation headaches for all
other marketing segments. Milk output is increasing in Florida
and other Southeastern states. Cream supplies are heavy in East
with multiples under pressure. Midwestern milk production
trends remain strong and shipments of excess loads are finding a
weak demand. Pricing of milk under Class in the $1-3 range are
noted. Milk output is steady in the Southwest. California is
still tracking a few percentage points behind year ago levels.
Arizona milk cows have been impacted by recent wet conditions
and the seasonal peak is projected to be in the near future.
Milk production in the Pacific Northwest is steady to up
slightly. Plants are handling the milk supply with no issues
noted. The milk supplies are mostly steady with recent weeks
and along projection in Utah and Idaho.
DRY PRODUCTS: The dry dairy product complex is under some
pricing pressure with most values being down this week. Nonfat
dry milk pricing is lower. Demand has slowed and offerings are
available from producers and resale sources. Production is
active. Supplies are building and prices are trending downwards
as producers offer discounts to stimulate buyer interest. Dry
whey prices are mixed with spot trading moving lower whereas
index based pricing moved higher. Lower pricing is reported for
the export market. Offerings of dry whey are increasing,
especially where more milk is moving into the cheese plants.
Whey protein concentrate pricing is steady to slightly lower.
Demand is uneven and often lighter than current offering
volumes. The lactose market is unsettled and tending to be
bimodal. Spot pricing is under pressure and offering prices are
lower. The contract prices are buoying the top of the price
range. Offerings are increasing and not being readily absorbed.
ORGANIC DAIRY MARKET OVERVIEW: The national weighted
average advertised price of organic milk half gallons, $3.75, is
18 cents higher than two weeks ago. The price range, $2.59 to
$4.99, decreased 40 cents on the bottom of the price range and
was unchanged on the top. This period, nearly 80% of ads are
for national brands with the balance for store brands. Store
brands have the lowest advertised price, $2.59, and national
brands have the highest, $4.99. The weighted average advertised
price for national brands is $3.89 and for store brands, $3.22.
The current national organic half gallon milk weighted average
advertised price of $3.75 compared with the weighted average
advertised price for non-organic half gallons, $2.17, yields an
organic-conventional half-gallon milk advertised price spread of
$1.58, compared with $1.56 two weeks ago. The 2012 average
spread was $1.24. Ads for 4-6 ounce organic yogurt ranged in
price from 50 cents to 63 cents, with a national weighted
average advertised price of $.58. Organic dairy advertising
volume has opened 2013 stronger than volume during most of the
last three months of 2012. This period's ad volume is 42% over
the average for all of last year. Milk is the largest category
of organic dairy ads this period, with 69% of the total. That
is the highest percentage this year and higher than last year's
average, 57%. Yogurt is second, with 24% of ads, followed by
butter and cheese, each tied at 3%.
RETAIL DAIRY MARKET NEWS: Ad features centered on football
themes with the dairy case well represented, seeking shoppers
who were planning and attending Super Bowl parties. Cream
cheese ads were nearly triple the rate of two weeks ago, while
sour cream ads were nearly double. Ice cream ads were 17%
higher. Total cheese category ads were 13% higher. Many grocer
ads also contained tie in recipes for dairy ingredients and had
dairy ads in areas of high visibility. U.S. average butter
prices for one-pound packs were $2.80 this period, up 17 cents
from two weeks ago. Cheese shreds in 8 oz. packs averaged
$2.46, up two cents. Cream cheese in 8 oz. packs was $1.60, up
21 cents. Ice cream in 48-64 oz. packs was $3.11, up 9 cents.
Milk gallons averaged $2.95, up 5 cents. Sour cream in 16 oz.
packs was $1.64, up 11 cents. In 4-6 oz. packs, Greek yogurt
averaged 99 cents, down 2 cents; while regular yogurt was 51
cents, up 1 cent. The national weighted average advertised
conventional milk price for half gallons this period, $2.17,
increased 16 cents from two weeks ago, following a 29 cent
decrease two weeks before that. Organic half gallon prices
averaged $3.75, up 18 cents from two weeks ago, following a 28
cent increase four weeks ago. The resulting organic-
conventional half-gallon price spread is $1.58, up 2 cents from
two weeks ago. The 2012 average price spread was $1.24.
INTERNATIONAL UPDATE (DMN): At the February 5 g/DT session
#85, average prices for most products traded and contracting
periods were mostly steady to firm. Average prices across all
contracting periods and individual products ranged from 0.1%
lower to 7.2% higher. The product price averages (per MT) and
percent changes from the previous average are: anhydrous milk
fat, $3,500, +7.2%; buttermilk powder, $3,530, +3.7%; cheddar
cheese, $3,525, -0.1%; lactose, $1,800, n.a.; milk protein
concentrate, $6,070, +1.2%; rennet casein, $8,766, +3.3%; skim
milk powder, $3,554, +0.5%; and whole milk powder, $3,468,
DECEMBER 2012 DAIRY PRODUCTS HIGHLIGHTS (NASS): Butter
production was 173.2 million pounds, 4.4% above December 2011
and 20.9% above November 2012. American type cheese production
totaled 378.3 million pounds, 2.6% above December 2011 and 4.2%
above November 2012. Total cheese output (excluding cottage
cheese) was 949.3 million pounds, 2.0% above December 2011 and
3.8% above November 2012. Nonfat dry milk production, for human
food, totaled 157.3 million pounds, 4.7% above December 2011 and
35.8% above November 2012. Dry whey production, for human food,
was 84.1 million pounds, 8.6% above December 2011 and 21.1%
above November 2012. Ice cream (hard) production totaled 49.1
million gallons, 2.9% below December 2011 and 8.4% below
JANUARY 1 MILK COW INVENTORY SUMMARY (NASS): The number of
milk cows in the United States as of January 1, 2013, totaled
9.2 million head, unchanged from January 1, 2012. Milk cow
replacement heifers totaled 4.6 million head, down 2% from
January 1, 2012. The number of milk cow replacement heifers per
100 milk cows on January 1, 2012 was 49.4, down 1.4% from
January 1, 2012. Milk cow replacement heifers expected to calve
during the year totaled 2.93 million head, down 4% from January
National Dairy Market At A Glance
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