MD DA950 NATIONAL DAIRY MARKET AT A GLANCE
March 22, 2013 MADISON, WI (REPORT 12)
CME GROUP CASH MARKETS (3/22):
BUTTER: Grade AA closed at $1.6950. The weekly average for Grade AA is
CHEESE: Barrels closed at $1.6650 and 40# blocks at $1.7000. The weekly
average for barrels is $1.6255 (+.0390) and blocks, $1.6505 (+.0475).
BUTTER HIGHLIGHTS: Butter prices at the CME Group gained 4.5 cents
early in the week on 2 carloads that sold at $1.7000. Trading activity was
light for the balance of the week, and retreated one-half cent during
Friday's session, closing at $1.6950. Bulk and retail sales activity is
termed seasonally strong, with the current strength coming from export
interest as well as domestic butter features at many grocery outlets.
Cooperatives Working Together (CWT) announced requests for export assistance
for 2.7 million pounds of butter were accepted for international deliveries.
Current churning activity is modestly lower than last week at some plants as
competition from dips, sour and aerated cream, and ice cream-type products
increase. The general consensus among butter manufacturers is that building
inventories for Q2 - Q3 is on the to-do list as long as cream supplies are
CHEESE HIGHLIGHTS: Cheese prices continued to push higher at the CME
Group exchange this week. Higher than anticipated volumes of milk are being
directed to cheese plants across the nation. Despite increased inventories
of cheese, manufacturers are reporting good sales and are mostly comfortable
with the added production. Increased interest from export markets is helping
to clear inventories. Current U.S. prices are favorable against
international prices. The CWT program is continuing to assist with export
sales for eligible members. According to the Foreign Agricultural Service,
imports of cheese for January-February 2013 total 22.9 million pounds, up
3.1% from a year ago. Advertised featuring of cheese was lower for most
packages of cheese according to the National Dairy Retail Report. Prices at
the retail level were mixed.
FLUID MILK: Spring snowstorms across the Central and Eastern regions
of the country caused some minor interruptions in milk handling this week.
Florida's milk production is beginning to level off as warmer weather is
slowing production. Arizona is close to peak production. Milk production in
the West is generally lower, while the Midwest and East are seeing some
increased production. National production is close to year ago levels.
Cream demand is increasing for the holidays and multiples are firming in many
parts of the country. Butter churns are active in the West and Midwest as
cream supplies are better than anticipated. Ice cream manufacturers are slow
to increase production this year. Class I demand is uneven with spring break
interrupting school schedules. Class III and IV producers are active with
the increased supplies.
DRY PRODUCTS: Some dry dairy markets regained confidence this week as
news of higher international prices at the latest global Dairy Trade (gDT)
auction caught the attention of buyers and sellers. Nonfat dry milk
production remains heavy with producers holding inventories more confidently.
High heat production is limited as plants are concentrating on low heat
production. Dry buttermilk production is active with butter plants operating
busy schedules. Inventories are building but held with increased confidence.
Whey production is steady with spot sales into the export market helping to
clear inventories. Block sales at discounted prices are being utilized to
move product. Whey protein 34% prices were steady to lower this week.
Lactose prices are improved for higher mesh products while unground and lower
mesh products remain weak. Dry whole milk interest increased following the
gDT auction. Casein prices are unchanged.
ORGANIC DAIRY MARKET NEWS (DMN): Organic milk's national weighted
average advertised price for half gallons, $3.65, is 25 cents higher than two
weeks ago. One year ago the price was $2.88. The price range of $2.99 to
$4.49 narrowed, increasing by 49 cents at the bottom and decreasing by 51
cents at the top. The region with the highest average price is the
Northeast, with $4.01, while the Northwest has the lowest, $2.99. The
current national organic half gallon milk weighted average advertised price
of $3.65 compared with the weighted average advertised price for non-organic
half gallons, $1.35, yields an organic-conventional half-gallon milk
advertised price spread of $2.30, up 67 cents from two weeks ago. One year
ago the price spread was 71 cents, with conventional half gallons priced
$2.17 and organic half gallons priced $2.88. Organic yogurt in 4-6 ounce
containers has a weighted average advertised price of $1.21 and for 32 ounce
organic yogurt, $2.99. Organic butter's national weighted average advertised
price is $4.07, down from $4.68 two weeks ago. One year ago the price was
RETAIL DAIRY MARKET NEWS (DMN): The most advertised cheese category, 8
ounce shredded, has an increase in the weighted average advertised price of 1
cent, to $2.31. The price this year has been as high as $2.51. The second
most advertised cheese category, 8 ounce blocks, declined in price 8 cents,
to $2.34, The price this year has been as high as $2.52. Butter's national
weighted average advertised price for a 1 pound package decreased 29 cents to
$2.50. Butter ad volume was up by 52%. Ad volume for all yogurt types and
sizes declined, but 4-6 ounce Greek yogurt remains the most advertised yogurt
product, with a price unchanged from two weeks ago, $1.00. The price of 4-6
ounce yogurt is up 1 cent to $.49. Yogurt in 32 ounce containers increased 7
cents to $2.43 while 32 ounce Greek yogurt declined $.66 to $3.95. The
national weighted average advertised conventional milk price for half gallons
this period, $1.35, decreased 42 cents from two weeks ago, following a 35
cent increase two weeks before that. Organic half-gallon prices averaged
$3.65, up 25 cents from two weeks ago, following a previous 9 cent decrease.
The resulting organic-conventional half-gallon price spread is $2.30, up 67
cents from two weeks ago.
INTERNATIONAL UPDATE (DMN): At the March 19th g/DT session #88,
average prices for all products traded and contracting periods were higher
and were sharply higher for whole milk powder. Average prices for all
contracting periods and individual products ranged from 3.1% to 21.2% higher.
The all contracts price averages (per MT) and percent changes from the
previous average are: anhydrous milk fat, $4,416 +16.3%; butter, $4,550
+11.5%; buttermilk powder, $3,904 +8.6%; cheddar cheese, $4,315 +13.7%;
lactose, not traded; milk protein concentrate, not traded; rennet casein,
$9,242 +3.1%; skim milk powder, $4,050 +7.7%; and whole milk powder, $5,116
FEBRUARY MILK PRODUCTION (NASS): Milk production in the 23 major
States during February totaled 14.6 billion pounds, down 3.4% from February
2012. However, production was 0.1% above last year after adjusting for the
leap year. Production per cow averaged 1,722 pounds for February, 58 pounds
below February 2012. However, production per cow was 3 pounds more than
last February, adjusted for the leap year. The number of milk cows on farms
was 8.50 million head, 13,000 head less than February 2012, but 2,000 head
more than January 2013.
APRIL FEDERAL MILK ORDER ADVANCE PRICES (FMMO): Under the Federal milk
order pricing system, the base Class I price for April 2013 is $17.66. This
price is derived from the advanced Class IV skim milk pricing factor of
$12.07 and the advanced butterfat pricing factor of $1.7189. A Class I
differential for each order's principal pricing point (county) is added to
the base price to determine the Class I price. Compared to March 2013, the
base Class I price decreased $0.14. For selected consumer products, the
price changes are: whole milk (3.25% milk fat), -$0.16 per cwt., -$0.014 per
gallon; reduced fat milk (2%), -$0.23 per cwt., -$0.020 per gallon; fat-free
(skim milk), -$0.34 per cwt., -$0.029 per gallon. The advanced Class IV skim
milk pricing factor is $12.07. Thus, the Class II skim milk price for April
is $12.77, and the Class II nonfat solids price is $1.4189. The two-week
product price averages for April are: butter $1.5909, nonfat dry milk
$1.5219, cheese $1.6402, and dry whey 0.6094.
FEBRUARY FEDERAL MILK ORDER MARKETING AND UTILIZATION SUMMARY (DAIRY
PROGRAMS): During February, more than 10.5 billion pounds of milk were
received from producers. This volume of milk is 0.3% lower than the February
2012 volume after factoring for the extra leap year day in 2012. In February
2012 and February 2013, there were volumes of milk not pooled due to
intraorder disadvantageous price relationships. More than 3.4 billion pounds
of producer milk were used in Class I products, 0.7% lower than the previous
year after factoring for the extra leap year day in 2012. The all-market
average Class utilization percentages were: Class I = 32%, Class II =11%,
Class III = 45% and Class IV = 12%. The weighted average statistical uniform
price was $18.70, $0.49 lower than last month and $1.36 higher than last
*****SPECIALS THIS ISSUE*****
ORGANIC DAIRY MARKET NEWS (PAGES 8-8A)
FEBRUARY MILK PRODUCTION (PAGE 9)
APRIL FEDERAL MILK ORDER ADVANCE PRICES (PAGE 10)
FEBRUARY FEDERAL MILK ORDER MARKETING SUMMARY (PAGE 11)
GRAPHS (PAGES G1-G2)
RETAIL DAIRY MARKET NEWS (ATTACHED)
National Dairy Market At A Glance
- “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?'
- Monsanto opens search for 2014 "Farm Mom of the Year"
- School breakfasts celebrated from coast to coast
- California February 4a/4b prices new record highs