MD DA950 NATIONAL DAIRY MARKET AT A GLANCE
September 5, 2014 MADISON, WI (REPORT 36)
CME GROUP CASH MARKETS (9/05)
BUTTER: Grade AA closed at $2.8450. The weekly average for Grade AA
is $2.8175 (+.0615).
CHEESE: Barrels closed at $2.3250 and 40# blocks at $2.3500. The
weekly average for barrels is $2.3231 (+.0171) and blocks, $2.3500
BUTTER HIGHLIGHTS: Butter operators were able to secure
additional cream over the holiday weekend, increasing production
rates. Focus is shifting from bulk butter to print butter production.
Demand continues to outpace supplies, hindering inventory levels as
fourth quarter demand looms. At the GDT auction on September 2,
November contracts for New Zealand butter averaged $1.1635. Dutch
quotes this week were at $1.82 for 82% butterfat. The spread between
U.S. and global markets is not accommodating much export interest.
Bulk butter prices ranged from 3.5 cents under to 6 cents over market,
with various time frames and averages used. The DMN National Dairy
Retail Report noted the surveyed national weighted average price for a
1 lb. package of butter was $3.59, up $0.23 from two weeks ago and
$0.50 above a year ago. Butter surveyed prices ranged from $2.48 to
$4.49. The NASS Dairy Products report noted July U.S. butter
production totaled 136.2 million pounds, down 3.0% from last month,
but 2.6% higher than a year ago. January-July U.S. production totals
1.119 billion pounds, 2.4% behind 2013 during the same time span.
According to FAS, January-July U.S. butter exports total 126.2 million
pounds, an increase of 37% compared to last year. Friday at the CME
Group, Grade AA butter closed at a new all-time high, $2.8450, up
$0.0900 from last Friday. CME Group average butter price for August
was $2.5913 compared to $1.4013 a year ago.
CHEESE HIGHLIGHTS: Cheese plants across the country are working
full schedules. Favorable prices and good demand are combining to
spur production. Cheese demand is often above current offers. Some
cheese makers are looking to increase yields with condensed skim or
nonfat dry milk. Buyers are pushing to build their inventories for
upcoming fall needs. While domestic demand is very good, export sales
have slowed. Domestic buyers are often asking for any additional spot
loads when they become available. According to the National Dairy
Retail Report, combined cheese advertising was up 43% from two weeks
ago. National advertised retail prices were higher for 8 oz. block
packages ($2.39, +.08). Lower prices were reported for 8 oz. shred
($2.40, -.02), 1 lb. block ($4.02, -.24) and 1 lb. shred ($3.61, -
.03). Dairy Products (NASS) reported total U.S. cheese production for
July at 956.4 million pounds, up 7% (62.6 million pounds) from July
2013. Exports of U.S. cheese and curd for January-July 2014 were
reported by the Foreign Agricultural Service to be 509.7 million
pounds, up 31% from the same period in 2013. The CME Group monthly
average price for August 2014 for barrels is $2.1961 compared to
$1.7425 a year ago. Blocks averaged $2.1820 compared to $1.7493 for
August 2013. At the CME Group, barrels closed Friday at $2.3250 and
blocks at $2.3500. Compared to the previous Friday, barrels are 2
cents lower and blocks are 2 cents higher.
FLUID MILK: Milk production is steady to higher in the Midwest,
Idaho, Utah, California, and New Mexico, while showing declines in the
Northeast, Mid-Atlantic, Southeast, Florida, Arizona, and Pacific
Northwest. Competition for truck drivers is heightened as processors
are noting scheduling and delivery problems causing delays and a few
cancellations. All the schools are back in session, driving bottling
sales higher throughout the regions. Cream supplies and demand vary.
Availability tightened in areas of the East and West while loosening
in the Midwest. Transportation costs slowed sales of cream
interregionally. Class II interest is slowing, most notably for ice
cream/frozen dessert novelties.
DRY PRODUCTS: U.S. prices for low/medium heat nonfat dry milk
prices are lower in all regions. Weaker global NDM/SMP prices are
contributing factors. Buyer interest is light domestically.
Production rates are generally reduced in light of declining prices.
Supplies are readily available. Dry buttermilk prices are being
suppressed lower by the downward NDM market. Buying activity is
light. Trucking costs are restricting growing Western inventories to
move eastward. Weaker alternative proteins and lower global prices
are pressuring the domestic dry whey market down. Buyers are making
purchases for short-term needs, but otherwise are hesitant to take
positions in the market. Heavy cheese vat schedules push dry whey
production generally higher. The whey protein concentrate 34% market
is softening following the weakening NDM market. WPC 34% spot load
availability is mixed, while production rates are steady to lower.
Some lactose inventories are growing as the market exhibits a
weakening undertone. Sales are stalling as negotiations are unsettled
between the manufacturers and buyers.
ORGANIC DAIRY MARKET NEWS (DMN): AMS reports total organic milk
products sales for June 2014, 199 million pounds, were up 11.3% from
June last year and up 12.2% year to date compared with last year.
Organic whole milk sales for June 2014, 59 million pounds, were up
25.7% compared with June last year and up 22.4% year to date compared
with last year. Organic reduced fat milk sales for June, 59 million
pounds, were 14.8% above sales one year earlier and up 17.1% year to
date compared with last year. The U.S. weighted average advertised
price of organic milk half gallons is $3.45, up 11 cents from 2 weeks
ago. One year ago the national price was $3.71. The lowest price is
down 41 cents to $2.58, while the top of the price range is down $1.00
to $3.99. Organic cheese, both 8 ounce blocks and 8 ounce shredded,
was advertised in all regions except the Midwest. All ads stated a
price of $3.99. No organic cheese ads appeared two weeks ago or one
year ago. The current magnitude of organic cheese retail ads is
generated by a national supermarket chain advertising a store brand of
NATIONAL DAIRY RETAIL REPORT (DMN): Butter ad numbers more than
tripled during the survey period spanning the Labor Day Holiday,
compared with two weeks previously. The U.S. weighted average price
of 1 pound butter, $3.59, is up 23 cents from two weeks ago and up 50
cents from one year ago. Increases in ad numbers also occurred for 8
ounce cream cheese, 16 ounce sour cream and 48-64 ounce ice cream.
Cream cheese ad numbers more than doubled and the average price,
$1.79, is up 5 cents from two weeks ago and up 22 cents from a year
ago. Sour cream ad numbers also more than doubled, with a current
average price of $1.70, down 4 cents from two weeks ago but up 2 cents
from one year ago. Ice cream has an average price of $2.98, up 9
cents from two weeks ago and up 4 cents from one year ago. Greek
yogurt in 4-6 oz. packages averaged $1.00, down 1 cent from two weeks
ago but even with one year ago. Regular yogurt in 4-6 oz. packages,
at 50 cents, is up 2 cents from two weeks ago and up 1 cent from one
year ago. Total conventional yogurt ad numbers declined 26%. The
national weighted average cheese price for 8 oz. blocks is up 8 cents
from two weeks ago to $2.39, while a year ago the price was $2.28.
The 8 oz. shred category at $2.40 is down 2 cents from two weeks ago
but up 12 cents from one year ago. Conventional cheese ads increased
43%. The national weighted average conventional milk price for half
gallons, at $1.89, is 10 cents higher than two weeks ago. Organic
half gallon milk, at $3.45, is 11 cents higher than the previous
period. The organic versus conventional half gallon price spread is
$1.56, up 1 cent from two weeks ago.
INTERNATIONAL DAIRY MARKET NEWS UPDATE (DMN): At the September 2
GDT event #123, average prices ranged from 14.3% lower to 4.3% lower
from the prior event across categories. The all contracts price
averages (US$ per MT) and percent changes from the previous average
are: anhydrous milk fat, $3,360 -5.8%; butter, $2,753 -5.6%;
buttermilk powder, $3,174 -12.9%; cheddar cheese, $3,275 -4.9%;
lactose, n.a.; rennet casein, $8,232 -14.3%; skim milk powder, $2,600
-9.5%; and whole milk powder, $2,673 -4.3%.
JULY DAIRY PRODUCTS (NASS): BUTTER production was 136.2 million
pounds, 2.6% above July 2013 but 3.0% below June 2014. AMERICAN TYPE
CHEESE production totaled 378.5 million pounds, 9.5% above July 2013
and 0.9% above June 2014. TOTAL CHEESE output (excluding cottage
cheese) was 956.4 million pounds, 7.0% above July 2013 and 1.2% above
June 2014. NONFAT DRY MILK production, for human food, totaled 166.4
million pounds, 42.7% above July 2013 and 12.1% above June 2014. DRY
WHEY production, for human food, was 72.6 million pounds, 3.7% below
July 2013 and 7.2% below June 2014. ICE CREAM REGULAR (hard)
production totaled 72.8 million gallons, 5.8% below July 2013 and 0.9%
below June 2014.
AUGUST CLASS AND COMPONENT PRICES (DAIRY PROGRAMS): The
following are the August 2014 class prices under the Federal milk
order pricing system and changes from the previous month: Class II:
$25.34 (+$0.93), Class III: $22.25 (+$0.65), and Class IV: $23.89
(+$0.11). Under the Federal milk order pricing system, the butterfat
price for August 2014 is $2.8448 per pound. Thus, the Class II
butterfat price is $2.8518 per pound. The protein and other solids
prices for August 2014 are $3.1496 and $0.5036 per pound,
respectively. These component prices set the Class III skim milk
price at $12.74. The August 2014 Class IV skim milk price is $14.44,
which is derived from the nonfat solids price of $1.6047 per pound.
The product price averages for August 2014 are: butter: $2.5206,
nonfat dry milk: $1.7887, cheese: $2.1074, and dry whey: $0.6880.
1200CT firstname.lastname@example.org Phone: 608-278-4155
USDA/AMS/Dairy Market News, Madison, Wisconsin
Dairy Market News website: www.ams.usda.gov/dairymarketnews
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