MD DA950 NATIONAL DAIRY MARKET AT A GLANCE
June 14, 2013 MADISON, WI (REPORT 24)
CME GROUP CASH MARKETS (6/14):
BUTTER: Grade AA closed at $1.5350. The weekly average for
Grade AA is $1.5400 (-.0010).
CHEESE: Barrels closed at $1.7725 and 40# blocks at $1.7225.
The weekly average for barrels is $1.7700 (+.0450) and blocks,
BUTTER HIGHLIGHTS: Butter production varies across the
country. Churn operators indicate cream is available and they
are sending some cream through the churns. Bulk butter
production currently outpaces print butter as retail demand is
slow to develop. Cream demand from ice cream/soft serve
accounts is higher this week and luring cream loads away from
butter production in all regions. Overall butter production is
lower for the week. A few plant operators are purposefully
selling cream into those markets to rein in butter inventory
buildup. Bulk butter markets are diverse. Market participants
found West bulk butter clearing at 5 cents under, Central butter
pricing is flat, and East butter sales garnered up to 8 cents
over the market. CME Group activity for the week netted a one
cent decrease to Grade AA butter. Three sales transactions were
finalized during the week.
CHEESE HIGHLIGHTS: Cheese prices across the country are
mixed this week. Process cheese was firmer, while cheddar
blocks were lower. Swiss cheese wholesale prices increased
following the release of Class III prices last week. Cheese
production remains very active with additional Class I milk
supplies finding their way to cheese manufacturers. While
inventories are steady, buyers are looking to acquire product
for Q3 in case summer production slows manufacturing. Cheese
demand is felt to be increasing with signs of strength at the
CME Group spot sales. Block prices showed steady activity with
buyers looking to increase their inventory. Barrel sellers were
harder to find with limited offerings. Barrels are again
selling at a premium to blocks. At the CME Group, barrels
closed at $1.7725 on Friday with blocks at $1.7225. Compared to
last week's close, barrels are up 1.25 cents and blocks are 2.5
FLUID MILK: Storms across much of the U.S. this week
affected late planting schedules. Heat in the southern tier of
states is stressing cows and production is beginning to show
some signs of slowing down. Northern areas of the country were
cooler. Delays in planting and late harvest of forages have
processors worried about continued milk supplies. Class I usage
levels are lower as schools end their sessions. Increased
supplies of cream are finding good demand from Class II
manufacturers as their production season nears its' peak. Ice
cream and soft serve products are finally showing expected
demand. Cream prices are steady to firm with some churns taking
advantage of higher cream demand to slow butter production.
DRY PRODUCTS: Nonfat dry milk prices are steady to higher.
There is a firm undertone to the market. Export demand is good
with SMP production limiting domestic NDM inventories. A large
tender for export NDM is upcoming and the market is waiting for
more information on amounts and pricing. Powder production is
seasonally heavy, but supplies are being held confidently by
manufacturers. Dry buttermilk prices are mixed. Production is
slowing as more cream is going to Class II usage. Manufacturers
are managing inventories to insure contract fulfillment. Whey
prices are uneven with a mostly steady undertone. Cheese
production is heavy and whey production is following suit.
Inventories are adequate from both processors and brokers.
Export demand is good with prices comparable to domestic prices.
Whey protein concentrate 34% prices are mostly steady. High NDM
prices are causing protein end users to look favorably at WPC
34%. Some resellers report tight available supplies. Lactose
prices are unevenly steady with a firm undertone. International
buyers are looking to acquire Q3 and Q4 coverage.
ORGANIC DAIRY MARKET NEWS (DMN): AMS reports Total Organic
Milk Products sales for April 2013, 191 million pounds, were up
13.5% from April 2012. Organic Whole Milk sales for April 2013,
50 million pounds, were up 18.5% compared with April 2012 and up
8.4% year-to-date compared with last year. Organic Reduced Fat
Milk sales for April, 57 million pounds, were 26.9% above sales
one year earlier and 7.0% above year-to-date sales last year.
The national weighted average advertised price of organic milk
half gallons, $3.59, is 16 cents higher than two weeks ago. The
price range is $2.79 to $4.49. One year ago the weighted
average advertised price was $3.24, 35 cents lower than
currently. Conventional milk's price for half gallons, $1.00,
is down 63 cents from two weeks ago. One year ago the price was
$2.11. The current organic-conventional half gallon price
spread is $2.59, compared with $1.80 two weeks ago. The
weighted average advertised price for 32 ounce organic yogurt is
$2.74, with advertised prices ranging from $2.50 to $3.00. The
weighted average advertised price for 4-6 ounce organic yogurt
is $.84, with prices ranging from 59 cents to $1.00. The
breakdown of a homogenizer in a Texas milk plant this week
caused a national organic brand of milk to transport volumes of
organic milk elsewhere for processing. A Maine organic dairy
cooperative continues to supply all of the organic cream it has
available to organic ice cream manufacturers in New York City,
with demand exceeding supply. Some of the cream is sold into
manufacturing pasteurized and some unpasteurized.
JUNE MILK SUPPLY AND DEMAND ESTIMATES (WAOB): The milk
production forecast for 2013 is unchanged. For 2014, the
production forecast is lowered as relatively weak milk-to-feed
ratios in the third and fourth quarter of 2013 are expected to
slow production growth in the first half of 2014. Fat basis
exports for 2013 are lowered based on slow butter exports
through April. Skim-solid exports are higher based on
expectations of continued robust nonfat dry milk (NDM) exports.
Fat and skim basis exports for 2014 are unchanged. Fat basis
imports are raised for 2013 and 2014. Forecasts for 2013 cheese
and butter prices are lowered from last month, reflecting
greater stocks and weaker-than-expected prices to date. The NDM
price is raised on tightening supplies and expectations of
continued robust export demand. The price range for whey is
narrowed. As a result of the lower cheese price forecast, the
Class III price is reduced. The Class IV price is down as lower
butter prices more than offset higher NDM. For 2014, the butter
price forecast is lowered as stocks remain high, but other
product prices are unchanged. The Class III price forecast is
unchanged, but the Class IV price is lowered. The all milk price
is forecast at $19.60 to $20.00 for 2013 and $18.95 to $19.95
APRIL MILK SALES (FMMO & CDFA): During April, 4.3 billion
pounds of packaged fluid milk products is estimated to have been
sold in the United States. This was 1.1% higher than April 2012.
Estimated sales of total conventional fluid milk products
increased 0.6% from April 2012 and estimated sales of total
organic fluid milk products increased 13.5% from a year earlier.
MARCH MAILBOX MILK PRICES (AMS & CFA): In March 2013,
mailbox milk prices for selected reporting areas in Federal milk
orders averaged $19.30, down $0.26 from the February 2013
average, and up $2.06 from the March 2012 average. The
component tests of producer milk in March 2013 were: butterfat,
3.81%; protein, 3.15%; and other solids, 5.75%. On an
individual reporting area basis, when compared to the previous
month, mailbox prices decreased in all Federal milk order
reporting areas except Wisconsin where the mailbox price
remained the same. Mailbox prices in March 2013 ranged from
$21.96 in Florida to $17.01 in New Mexico.
National Dairy Market At A Glance
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