MD DA950 NATIONAL DAIRY MARKET AT A GLANCE
AUGUST 08, 2014 MADISON, WI (REPORT 32)
CME GROUP CASH MARKETS (8/08)
BUTTER: Grade AA closed at $2.4000. The weekly average for Grade AA
is $2.4000 (-.0810).
CHEESE: Barrels closed at $2.1225 and 40# blocks at $2.1000. The
weekly average for barrels is $2.1090 (+.1430) and blocks, $2.0840
BUTTER HIGHLIGHTS: Butter prices are mostly steady behind a
stable domestic market. Some butter operators took advantage of lower
cream prices to churn at higher levels, while others had lower
production rates due to declining milk receipts, lower butterfat
tests, or maintenance updates. Even with additional cream available,
many butter makers are unable to build stocks comfortably for upcoming
demand. Domestic interest is mostly steady with a few buyers waiting
to see what direction the price goes before taking a position.
Various global butter markets moved lower, putting U.S. export
opportunities at a bigger disadvantage. The GDT auction on August 5,
averaged $1.2701 for all butter contracts. Bulk butter prices range
from 4 cents under to 6 cents over market, with various time frames
and averages used. Friday at the CME Group, Grade AA butter closed at
$2.4000, unchanged from last Friday. The CME Group monthly average
price for Grade AA butter during July was $2.4624, compared to $1.4751
a year ago. The DMN National Dairy Retail Report noted the surveyed
national weighted average price for a 1 lb. package of butter was
$3.36, 13 cents lower than two weeks ago, but 45 cents above a year
ago. Butter surveyed prices ranged from $2.98 in the Midwest to $4.49
in the Northeast. The NASS Dairy Products report noted June 2014 U.S.
butter production totaled 139.9 million pounds, down 0.7% from a month
ago and 0.2% lower than last year. January - June U.S. production
totals 981.8 million pounds, 3.1% behind 2013 during the same time
span. According to FAS, January - June 2014, U.S. butter exports
total 114.3 million pounds, an increase of 57% compared to last year.
This week, a cooperative export assistance program accepted requests
for 55,116 pounds of butter.
CHEESE HIGHLIGHTS: Cheese production is mixed this week. Milk
production levels are moving seasonally lower and cheese plants are
having a harder time finding surplus milk for manufacturing. Midwest
cheese production is reported to be below expected levels.
Availability of condensed skim and nonfat dry milk has allowed plants
with increased orders to fortify cheese vats and build on production.
Export demand has slowed, while domestic demand remains good.
Advertised U.S. cheese prices as reported in the National Dairy Retail
Report showed lower weighted average prices for packages of 8 oz.
block ($2.56, -$.01), 1 lb. block ($4.30, $-.10), and 1 lb. shred
($3.90, -$.73) from two weeks ago. Retail prices were higher for the
8 oz. shred ($2.61, +.28) and the 2 lb. block ($6.79, +$1.80).
Combined cheese advertising was up 15% from two weeks ago. NASS Dairy
Products reported total cheese production in June 2014 was 942.1
million pounds, 3.3% more than a year ago. Exports of cheese from the
U.S. for January-June 2014 total 438.7 million pounds, up 34% from
2013. Cheese and curd exports for January-June 2014 equated to 8% of
U.S. cheese production according to FAS. At the CME Group this week,
barrels closed on Friday at $2.1225, up 12.25 cents from last Friday
and blocks closed at $2.1000, up 10 cents.
FLUID MILK: Milk production is experiencing incremental declines
across the Southwest, Pacific Northwest, Southeast and the Central
regions as summer advances and warm temperatures progress. A stretch
of cooler weather increased cow comfort and milk production in the
Northeast and Mid-Atlantic. Class I demand is improving and expecting
to build over the next month, as the school year commences. Ample
condensed volumes are stretching dryer capacity in the Northeast, Mid-
Atlantic and Midwest. Declines in butterfat component levels have
tightened cream supplies in the Southwest. A seasonal slowdown in ice
cream production has added to cream availability in the Midwest.
With the start of new butterfat pricing in California, manufacturers
are weighing the option between selling and churning. Rainy
conditions are slowing the alfalfa harvest in Utah and Idaho as
overnight frost hampers the hay harvest in New Mexico.
DRY PRODUCTS: The nonfat dry milk market continues to soften.
Interests beyond contract volumes are light. Dry buttermilk market
undertone is weak. Production is mostly steady. Additional cream
available to churning operations is advancing inventory volumes. Spot
market activity is light as the market looks for support. The dry
whey market tone is steady. Stocks are below the previous year's
level, but sufficient for current demand. The whey protein
concentrate 34% market is unsettled. Production varies at some
locations. The lactose market is mixed. Demand into the Far East is
steady to higher. The rennet casein market is unsettled. Some buyers
remain cautious and unwilling to expand inventories over current
needs. The nonfat component price for dry whole milk edged lower,
leaving this market uneasy.
ORGANIC DAIRY MARKET NEWS (DMN): AMS reports total organic milk
products sales for May 2014, 211 million pounds, were up 8.1% from May
last year and up 12.4% year to date compared with last year. Organic
whole milk sales for May 2014, 63 million pounds, were up 22.5%
compared with May last year and up 21.8% year to date compared with
last year. Organic reduced fat milk sales for May, 62 million pounds,
were 11.5% above sales one year earlier and up 17.5% year to date
compared with last year. The U.S. weighted average advertised price
of organic milk half gallons is $3.54, up 24 cents from 2 weeks ago.
One year ago the national price was $3.64. The lowest price is down
10 cents to $2.69, while the top of the price range is down 9 cents to
$4.29. The lowest advertised price, $2.69, is in the South Central
region. The highest advertised price, $4.29, is found in the
Northeast, Southeast, and Southwest. The national weighted average
price for 8 ounce cheese blocks is $3.82. All ads in the Northeast
are priced $3.69 and in the South Central region, $3.87. Prices for 8
ounce shredded organic cheese averaged $3.17, with all ads in the
Northeast priced $3.69 and all ads in the South Central region prices
NATIONAL DAIRY RETAIL REPORT (DMN): Cheese shreds in 8-ounce
packs were the most featured cheese item this period, appearing in
9,591 ad features. The national price averaged $2.61, up 28 cents
from two weeks ago. Eight ounce blocks, at $2.56, moved 1 cent lower
from two weeks ago. Greek yogurt in 4-6 ounce packs, featured in
11,714 ads, averaged $1.01, up 2 cents from two weeks ago. Regular
yogurt in 4-6 ounce packs averaged 49 cents, up 1 cent from two weeks
ago. The national weighted average butter price registered $3.36 for
1# packages, a 13 cent decrease from two weeks ago, but 45 cents
higher than a year ago. Ice cream features were the highest for all
dairy products this period, appearing in 12,258 ads. The national
average for 48-64 oz. containers was $3.00, down 17 cents from two
weeks ago, but 11 cents higher than a year ago. The national weighted
average conventional milk price for half gallons, $1.99, is 37 cents
lower from two weeks ago. Organic half-gallon milk, at $3.54, is 24
cents higher from two weeks ago. The organic-conventional half-gallon
price spread is $1.55, compared to 94 cents two weeks ago.
INTERNATIONAL DAIRY MARKET NEWS UPDATE (DMN): At the August 5
GDT event #121, average prices ranged from 11.5% lower to 6.0% higher
from the prior event across categories. The all contracts price
averages (US$ per MT) and percent changes from the previous average
are: anhydrous milk fat, $3,457 +6.0%; butter, $2,800 -9.6%;
buttermilk powder, $3,852 -10.1%; cheddar cheese, $3,742 -10.2%;
lactose, $1,580 n.a.; milk protein concentrate, n.a.; rennet casein,
$9,701 -0.7%; skim milk powder, $3,264 -6.5%; and whole milk powder,
JUNE DAIRY PRODUCTS (NASS): BUTTER production was 139.9 million
pounds, 0.2% below June 2013 and 15.0% below May 2014. AMERICAN TYPE
CHEESE production totaled 374.7 million pounds, 3.2% above June 2013
but 4.3% below May 2014. TOTAL CHEESE output (excluding cottage
cheese) was 942.1 million pounds, 3.3% above June 2013 but 2.6% below
May 2014. NONFAT DRY MILK production, for human food, totaled 148.0
million pounds, 13.1% above June 2013 but 9.4% below May 2014. DRY
WHEY production, for human food, was 78.0 million pounds, 3.1% above
June 2013 but 4.0% below May 2014. ICE CREAM (hard) production totaled
73.1 million gallons, 6.0% below June 2013 but 4.4% above May 2014.
MAY MILK SALES (FMMO & CDFA): During May, 4.2 billion pounds of
packaged fluid milk products is estimated to have been sold in the
United States. This was 3.5% lower than May 2013. Estimated sales of
total conventional fluid milk products decreased 4.1% from May 2013
and estimated sales of total organic fluid milk products increased
8.1% from a year earlier.
*****SPECIALS THIS ISSUE*****
ORGANIC DAIRY MARKET NEWS (PAGES 8-8A)
JUNE DAIRY PRODUCTS (PAGE 9)
MAY MILK SALES (PAGE 10)
DAIRY GRAPHS (G1-G3)
NATIONAL DAIRY RETAIL REPORT (ATTACHED)
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