MD DA950 NATIONAL DAIRY MARKET AT A GLANCE
July 26, 2013 MADISON, WI (REPORT 30)
CME GROUP CASH MARKETS (7/26):
BUTTER: Grade AA closed at $1.4325. The weekly average for
Grade AA is $1.4385 (-.0465).
CHEESE: Barrels closed at $1.7600 and 40# blocks at $1.7625.
The weekly average for barrels is $ 1.7285 (+.0475) and blocks,
BUTTER HIGHLIGHTS: Recent hot weather reduced cow comfort
and pushed butterfat components seasonally lower in most areas
of the country. With the recent downturn in butterfat
components, some balancing plant operators indicated they have
few cream loads available for clearing to the spot market.
Based on cream availability, cream sales into ice cream and soft
serve mix operations are active. Butter production is declining
as summer advances. Interest in retail packaging is emerging at
some churning operations. Some butter producers note an uptick
in retail interest this week. Week 30 average CME Group butter
prices established a year to date low at $1.4385. Bulk butter
pricing throughout the country ranges from 3 cents under to 6
cents over market. The NASS Cold Storage report shows butter
stocks as of June 30, 2013 totaled 324.1 million pounds. This
is 1% (2.1 million pounds) higher than 1 month ago and 33% (80.8
million pounds) higher than 1 year ago.
CHEESE HIGHLIGHTS: Cheese prices started the week lower,
but by Thursday's CME close had more than recovered the early
week declines. Wholesale prices continued to move higher
following the weekly average increases on the CME Group. CME
trading was less active, compared to last week. Stocks of
cheese remain plentiful, but cheese production is slowing as the
recent heat wave across much of the country has reduced milk
flows and component levels. Export demand remains good,
supported by export assistance programs. The latest NASS Cold
Storage report shows stocks of natural cheese in cold storage as
of June 30, 2013 totaled 1,148.7 million pounds, statistically
unchanged compared to one month ago, but 5% higher compared to
one year ago. American cheese holdings totaled 705.2 million
pounds, down 1% from one month ago, but 6% higher than one year
ago. Natural cheese holdings totaled 412.0 million pounds, 1%
more than one month ago and 2% more compared to one year ago
with Swiss cheese at 31.5 million pounds, up 8% from one month
ago and 4% more than one year ago. Barrels closed at $1.7600,
up $0.0200 from last Friday. Blocks closed the week at $1.7625,
up $0.0150 from last Friday's close.
FLUID MILK: Milk production continues to be impacted by
weather conditions across the U.S. In the Southwest and
Northwest, hot temperatures were causing milk declines at the
farm level. Some areas of the Pacific Northwest were seeing
temperatures in the triple digits at 6-19 degrees above normal.
The Mountain states of Utah and Idaho were seeing daytime highs
above 100 degrees, affecting milk production and conception
rates. In the Central Valley of California, cooler nighttime
temperatures were noted and the resulting milk flow increased.
Localized, heavy rains were common in Arizona, interrupting
transportation to and from plants. The Upper Midwest
experienced a reprieve from hot and humid conditions, seeing
milk production increases following declines of 8-10% the prior
week. There is good demand for milk with prices bid $3 over
class in an attempt to secure needs. Heat and humidity eased in
the Northeast, but plants are still seeing lower milk receipts,
up to 10% down in some areas. Florida milk output has declined
and is balanced in the state with no exports out for the first
time since January. Milk production is lower in other
DRY PRODUCTS: The dry dairy product market trends are
consistent with recent weeks and output levels are typically
lower because of declines in milk receipts and milk solids. The
nonfat dry milk market prices and tone are higher. Demand is
good, especially into the export channels. Domestic buying
interest remains light. Dry buttermilk powder pricing is
slightly higher. Demand is fair to good with buyers seeking
protein sources and filling needs for current and upcoming
finished products. Dry whey prices are steady to occasionally
lower. Some changes are noted because of index fluctuations.
Domestic demand is light to fair and often lower than projected.
Export sector interest remains good. WPC 34% pricing is steady
for the majority of sales. Interest is active into both
domestic and export markets. Spot availability is limited and
contract fulfillment is lagging by 1-2 weeks. Lactose prices
are steady, but the market tone is firming. Higher mesh sized
lactose is in the tightest position.
ORGANIC DAIRY MARKET NEWS (DMN): The nationally weighted
average advertised organic half-gallon milk price, $3.36, is
down 18 cents from two weeks ago. Conventional milk's price for
half gallons, $2.00, is down 37 cents from two weeks ago. One
year ago conventional milk's average advertised price for half
gallons was $1.81 and organic was $3.64. The organic-
conventional half gallon price spread is $1.36, compared with
$1.17 two weeks ago. Organic yogurt ad numbers rebounded to the
second highest level this year. Ads were heavily concentrated
in the Northeast with the following percentage breakdown;
Northeast, 74%; Southeast, 14%; Southwest, 8% and Northwest, 4%.
The weighted average advertised price for 32 ounce organic
yogurt is $3.35, up from $3.19 last period. The current price
range is $2.69 to $3.99. The weighted average advertised price
for 4-6 ounce organic yogurt is $.77, down 11 cents from two
weeks ago. Prices range from 74 cents to 79 cents. The
weighted average advertised price for 4-6 ounce organic Greek
yogurt is $1.06, up 6 cents from 2 weeks ago. Northeast organic
milk production has fared better than conventional production
and has not suffered significant declines, during the recent
heat wave. To provide increased cow comfort, some organic
producers housed their cattle during daytime hours and grazed
their cattle on pastures during the evening hours. Lush pasture
conditions, wet weather and heavy morning dew also helped stave
off production declines. A majority of pastures in the
Northeast are rated as good to excellent.
NATIONAL DAIRY RETAIL REPORT (DMN): On an individual item
basis, ice cream was the most featured commodity in ads.
National pricing for 48-64 oz. containers averaged $2.94, up 2
cents from two weeks ago but 9 cents lower than a year ago.
Pricing across all ads ranged from a low of $1.88 in the Midwest
to a high of $4.99 seen in ads in the South Central, Southwest,
and Northwest. Cheese shreds in 8-ounce packs, the most
featured cheese item, averaged $2.24, up 8 cents from both two
weeks ago and one year ago. 8-ounce blocks, at $2.36, are 6
cents higher from two weeks ago and 16 cents more than a year
ago. Greek yogurt in 4-6 ounce packs, the most featured yogurt
item, averaged $0.99, down 1 cent from both two weeks ago and a
year ago. Regular yogurt in 4-6 ounce packs averaged 50 cents,
up 3 cents from two weeks ago and equal to the price a year ago.
The national weighted average butter price is $2.53 per 1#
package. This is 1 cent lower than two weeks ago but 19 cents
higher than a year ago. The national weighted average
conventional milk price for half gallons, $2.00, is down 37
cents from two weeks ago. Organic half-gallon milk, at $3.36,
is 18 cents lower from two weeks ago. The organic-conventional
half-gallon price spread is $1.36, compared to $1.17 two weeks
COLD STORAGE (NASS): On June 30, U.S. cold storage
holdings of butter totaled 324.1 million pounds, up 3% from May,
and 33% more than June 2012. Natural American cheese holdings
total 705.2 million pounds, 1% less than May, but 6% more than
June 2012. Total cheese stocks were 1.149 billion pounds, even
with last month, but 5% more than June 2012.
FMMO PRICES AND POOL HIGHLIGHTS (DY PROGRAMS): During
June, more than 11 billion pounds of milk were received from
producers. This volume of milk is 14% higher than the June 2012
volume. In June 2012 and June 2013, there were volumes of milk
not pooled due to intraorder disadvantageous price
relationships. More than 3.1 billion pounds of producer milk
were used in Class I products, 6.2% lower than the previous
year. The all-market average Class utilization percentages
were: Class I = 28%, Class II = 12%, Class III = 48% and Class
IV = 12%. The weighted average statistical uniform price was
$19.40, $0.12 higher than last month and $3.27 higher than last
JUNE MILK PRODUCTION (NASS): Milk production in the 23
major States during June totaled 15.8 billion pounds, up 1.6%
from June 2012. Milk production in the United States during the
April - June quarter totaled 52.0 billion pounds, up 0.9% from
the April - June quarter last year.
National Dairy Market At A Glance
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