MD DA950 NATIONAL DAIRY MARKET AT A GLANCE
NOVEMBER 1, 2013 MADISON, WI (REPORT 44)
CME GROUP CASH MARKETS (11/01):
BUTTER: Grade AA closed at $1.5325. The weekly average for Grade AA
is $1.4965 (+.0245).
CHEESE: Barrels closed at $1.8700 and 40# blocks at $1.9025. The
weekly average for barrels is $1.8360 (+.0415) and blocks, $1.8835
BUTTER HIGHLIGHTS: Butter prices are mixed amongst the regions
as prices are good in the Northwest, flat in the Central, and uneven
in the West. Supplies range from lower in the Northeast to sufficient
in the Central and Western regions. Holiday demand has kept
manufacturers busy filling retail orders. Some plants in the
Northeast and West continue to microfix stored butter to keep up with
demand. However, reports in the Central region suggest butter
manufacturing is slower in some plants that are fulfilling cream
contracts to other manufacturers producing high demand holiday dairy
products. Demand for 82% butter has remained good, but butter makers
are focusing on finishing their 80% domestic holiday orders. Export
interest remains good. Bulk butter prices vary by region with the
West from market to five cents under, the Northeast five to eight
cents over market, and Central prices from three cents under to four
cents over the market. The National Dairy Retail Report showed a
national weighted average price for 1 lb. packages of butter at $2.74,
which is two cents higher than a year ago. At the CME Group, Grade AA
butter closed at $1.5325, up 5.75 cents from a week ago.
CHEESE HIGHLIGHTS: Cheese prices moved higher again this week. Spot
sales at the CME Group this week were fairly light with prices moving
higher by week's end. Cheese production schedules are often below
desired levels due to tight milk supplies and competition from other
Class II and IV products. Good holiday orders are pushing prices
higher as buyers look to secure supplies for the holiday buying
season. Block sales are good as cut and wrap operations look to fill
retail orders. Retail advertising for cheese increased from two weeks
ago according to the National Dairy Retail Report. The weighted
average price for the popular 8 oz. shred package at $2.28 per package
was 9 cents higher than last year's price of $2.19. Export sales are
reported as good with August sales of 62 million pounds exported.
That is 40% more than the previous August.
FLUID MILK: Farm milk production across the country is hovering
on either side of the seasonal low point. Some milk processors report
upward trends in farm milk intakes as cow comfort improves. Other
processors indicate milk receipts are steady to decreasing, while
components are increasing. Bottler demand is mostly steady. While
cream demand for ice cream production is lower, sales of cream in to
cream cheese, sour cream, and chip dip operations are increasing.
Butter production is active at many locations to fill recent print
orders. Eggnog production started up at a few plants to allow for
delivery time into retail outlets before Thanksgiving. Fall
harvesting activities continue for corn and soybeans, with frost
and/or wet fields slowing progress in some areas. Forage harvesting
is complete in most areas. Dairy operators are tallying up those
tonnages as well as silage holdings to determine if feed purchases
will have to be made to get through to spring.
DRY PRODUCTS: Nonfat dry milk prices moved higher this week as
contract bases shifted higher and interest in F.O.B. spot loads
persist. Dry buttermilk prices made most gains in the West.
Central/East dry buttermilk dipped 3 cents on the top of that range.
Central/West whey protein concentrate 34% chugged higher on the
strength of increases in F.O.B. spot prices as well as contract price
adjustments. Dry whey prices were steady on the Central mostly. West
dry whey mostly prices inched up on each end that series as active
spot sale activity overshadowed some slight decreases in contract
price bases. Dry whey prices in the East rebounded 3 cents on the
bottom of that range, reflecting improved balance in manufacturers'
holdings. Lactose prices on the mostly held steady although a few
F.O.B. spot loads added 26 cents to the top of the range. Dry whole
milk prices stepped 6 cents higher on each side of the range.
ORGANIC DAIRY MARKET NEWS (DMN): AMS reports Total Organic Milk
Products sales for August 2013, 195 million pounds, were up 4.8% from
August last year and 4.7% year-to-date compared with last year through
August. Organic Whole Milk sales for August 2013, 54 million pounds,
were up 14.5% compared with August last year and up 11.0% year-to-date
compared with last year through August. Organic Reduced Fat Milk
sales for August, 54 million pounds, were 11.2% above sales one year
earlier and 12.1% year-to-date compared with last year through August.
The weighted average advertised price of organic milk half gallons is
$3.73, up 26 cents from the last reported period prior to the Federal
government shut down. The price range is unchanged at the bottom,
$2.99, but up $1.49 at the top to $4.99. One year ago the national
average price was $3.48. The conventional half gallon price is $1.65,
which results in an organic-conventional half gallon price spread of
$2.08. One year ago the price spread was $1.27. The greater price
spread this year is caused by organic prices being 29 cents higher
this year, while conventional prices are $1.30 lower. The weighted
average advertised price for 4-6 ounce organic Greek yogurt is $1.05,
down 20 cents from last year. The weighted average advertised price
for 4-6 ounce organic yogurt is $.66, up 1 cent from last year. 32
ounce organic Greek yogurt has an average price of $5.00.
JULY MILK SALES (FMMO & CDFA): During August, 4.4 billion pounds
of packaged fluid milk products is estimated to have been sold in the
United States. This was 2.7% lower than August 2012. Estimated sales
of total conventional fluid milk products decreased 3.1% from August
2012 and estimated sales of total organic fluid milk products
increased 4.8% from a year earlier.
CLASS AND COMPONENT PRICES (DAIRY PROGRAMS): The following are
the October 2013 prices under the Federal Milk Order pricing system
and the changes from the previous month: Class II $20.56 (+$0.78),
Class III $18.22 (+$0.08), and Class IV $20.17 (+$0.74.). Product
price averages used in computing Class prices are: butter $1.5454,
NDM $1.8366, cheese $1.8025, and dry whey $0.5731. The Class II
butterfat price is $1.6708 and the Class III/IV butterfat price is
$1.6638. Further information may be found at:
SEPTEMBER CONSUMER PRICE INDEX (BLS): The CPI for all food is
237.5, up 1.4% from September 2012. The dairy products index is
217.0, up 0.8% from a year ago. The following are the September to
September changes for selected products: fresh whole milk is +2.2%;
cheese, +0.8%; and butter, +0.3%.
COMMERCIAL DISAPPEARANCE (ERS, AMS): Commercial disappearance of
dairy products during the first seven months of 2013 totals 116.4.
billion pounds, 0.2% above the same period in 2012. Comparing
disappearance levels with year earlier levels: butter is +0.5%;
American cheese, +2.6%; other cheese, +2.2%; NDM, -22.0%; and fluid
milk products, -2.2%.
NATIONAL DAIRY RETAIL REPORT (DMN): Ads for 8 oz. shredded are
the largest of the 5 types of cheese advertised, with 41% of cheese
ads. The national weighted average advertised price is $2.28, up 9
cents from last year. 8-ounce blocks, at $2.43, are 1 cent lower than
last year. Yogurt ads are the largest product category advertised
this period. Greek yogurt in 4-6 ounce packages has more ads than all
other categories of yogurt combined. The 4-6 oz. Greek yogurt
weighted average advertised price, $.99, is 1 cent higher than last
year. Regular yogurt in 4-6 ounce packs, approximately one half the
number of ads as 4-6 oz. Greek yogurt, has an average price of $.52, 2
cents above last year. Butter ad numbers are up from a year ago. The
current average price, $2.74, is 2 cents above last year. Ice cream
features remain strong relative to ad numbers for other dairy products
this period, but are about two thirds the number as last year. The
current average price for 48-64 oz. containers, $3.13, is 4 cents
below last year. The national weighted average conventional milk
price for half gallons is $1.65 and for organic half-gallon milk, at
$3.73. The organic-conventional half-gallon price spread is $2.08,
compared with $1.79 in September, the last bi-weekly period data was
collected due to the intervening federal government furlough.
1200CT Janet.Linder@ams.usda.gov (608)278.4157
USDA/AMS/Dairy Market News, Madison, Wisconsin
Dairy Market News website: www.ams.usda.gov/dairymarketnews
Dairy Market News database portal: www.marketnews.usda.gov/portal/da
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