MD DA950 NATIONAL DAIRY MARKET AT A GLANCE
October 10, 2014 MADISON, WI (REPORT 41)
CME GROUP CASH MARKETS (10/10)
BUTTER: Grade AA closed at $2.8050. The weekly average for
Grade AA is $2.8360 (-.0720).
CHEESE: Barrels closed at $2.1000 and 40# blocks at $2.1975.
The weekly average for barrels is $2.1140 (-.0580) and blocks,
BUTTER HIGHLIGHTS: Butter operators are churning at
generally higher rates as cream is readily available.
Manufacturers are working ingredient inventories lower and
purchases of cream and bulk butter are largely linked to print
butter orders. Interest for retail butter is active. However,
some retailers are waiting on anticipated lower prices before
placing large holiday orders. Export interest is marginal as
U.S. prices are not competitive against other global markets.
Domestic supplies are marginally growing. Bulk butter prices
reported ranged from 4 cents under to 6 cents over market, with
various time frames and averages used. The NASS Dairy Products
report noted August U.S. butter production totaled 131.2 million
pounds, down 4.3% from last month and 2.4% lower than a year
ago. January-August U.S. production totals 1.251 billion pounds,
2.3% behind 2013 during the same time span. This week, a
cooperative export assistance program accepted requests for
49,604 pounds of butter. According to FAS, January-August U.S.
butter exports total 134.2 million pounds, an increase of 20%
compared to last year. Friday at the CME Group, Grade AA butter
closed at $2.8050, down $0.0900 from last Friday. The CME Group
monthly average price for Grade AA butter during September was
$2.9740, compared to $1.5233 a year ago.
CHEESE HIGHLIGHTS: The cheese market is unsettled. The
trade is adjusting to pricing that reflects recent declines in
daily and weekly prices. Some buyers are waiting for lower
prices to take effect before making additional purchases. Other
buyers are active in the market to secure cheese for specials
and end of year needs. Cheese output is trending higher.
Surplus milk, increased milk tests, and standardization with
skim solids are allowing for improved yields and increasing
production. Cheddar cheese offerings range from tighter in the
Midwest to longer in the West. The Foreign Agricultural Service
(FAS), reports that August 2014 U.S. cheese and curd exports
totaled 69.1 million pounds, a 11% increase from a year ago.
Year through August exports total 578.8 million pounds, 29%
higher than 2013. According to USDA, NASS, cumulative U.S.
total cheese production through August totals 7.52 billion
pounds, up 2.5% from the same period in 2013. Friday at the CME
Group, barrels closed at $2.1000, down 7 cents from a week ago
and 40# blocks at $2.1975, up 4.75 cents.
FLUID MILK: Milk volumes are increasing in the Southeast
and Midwest; steady to higher in the Northeast, Mid-Atlantic,
and Arizona; steady in Florida and New Mexico; uneven in
California (steady in the North, mixed in the South); and
seasonally declining in the Pacific Northwest, Idaho and Utah.
Spot load availability of milk is increasing in the Midwest,
Northeast and Mid-Atlantic. Improved butterfat and protein
levels are noted in the Midwest, attributed to mild weather and
improved feed quality. Transportation issues affecting milk or
cream are noted in the East and California.
DRY PRODUCTS: Low/medium heat nonfat dry milk prices and
market tone are mixed. Inventories are building. High heat
prices are unchanged to higher. Central and Eastern dry
buttermilk prices are unchanged to slightly higher, but prices
are mixed in the West. Dry whole milk prices are unchanged,
with competitively priced imported product available. Dry whey
prices moved lower and the market is weakening. Whey protein
concentrate 34% prices are reduced on a softening market.
Prices of lactose are mostly lower on active spot trading and
reflect new contractual agreements. The undertone is weakening
as suppliers discount to compete for business domestically.
Casein prices held steady, following recent declines.
INTERNATIONAL DAIRY MARKET NEWS (DMN): WESTERN AND
EASTERN EUROPE: WESTERN OVERVIEW: Western Europe milk
production is declining along the seasonal trend, but remains
above year ago levels. Weather conditions are favorable and cow
comfort levels are good. Farmgate prices, have declined, but
still hold a good return for producers. Additional price
declines are expected in the future, prompting milk producers to
make as much milk as possible while the prices are good. The
reduction in cheese production, due to the Russian ban of EU
imports, continues to channel additional milk volumes to butter
and SMP production. The decline in the Euro, compared to the
U.S. dollar, supports European exports by making them more
competitively priced. Estat - Newcronos reported EU-28 January
to July milk deliveries are 5.8% higher than the same period in
2013. Various member states showed the following January to
July increases, compared to last year; Germany, 4.4%; France,
7.4%; UK, 10.2%; Belgium, 7.9%; Italy, 3.2%; and Ireland, 7.1%.
January-July milk delivery data showed increases for all
countries in Western Europe with the exception of Greece -4.8%.
EASTERN OVERVIEW: Milk production in Eastern Europe has
declined, but remains ahead of last year's levels. Weather
conditions are favorable for milk production and producer
margins remain good. Raw milk and cream loads are being
transported to manufacturers in Belarus, but actual volume
totals are unavailable. According to Eurostat, dairy product
production in Poland for the January-July period showed the
following increases; butter, 1.1%; SMP, 47.1%; and WMP, 38.5%.
European milk deliveries for January-July, reported by Estat -
Newcronos, showed the following year over year changes for
selected countries; Poland,+7.5%; Lithuania, +8.5%; Latvia,
+12.4%; Estonia, +8.9%; and the Czech Republic, -0.5%.
OCEANIA OVERVIEW: Australian milk production is building
towards the seasonal peak. The good early season weather
conditions for milk production have given way to dry conditions
in some areas. Irrigation has started in areas of Victoria,
which is earlier than usual. Some producers have increased
feedings of silage and grain to increase milk production ahead
of the dryer months of December, January and February.
Production through September has seen increases over year ago
levels, but weather concerns have caused some cooperatives to
lower their milk production estimates for this season.
Manufacturers are focusing on skim milk powder and butter
production and expanding their inventories. Dairy Australia
reports dairy product exports for the July-August period
totaling 101.7 thousand tons, up 5.5% from the year ago period.
The largest export category is skim milk powders (SMP), up 68%
for the same period last year. The total value of exports for
the July-August period is down 3.7% compared to last year.
According to Dairy Australia, August 2014 milk production in
Australia was 1.9% above August 2013. The state changes from a
year earlier are: New South Wales, +4.1%; Victoria, +2.5%;
Queensland, -8.4%; South Australia, -4.6%; Western Australia,
+1.3% and Tasmania +8.9%. New Zealand milk production is robust
and expanding towards the seasonal peak and above year ago
levels. Typical spring weather has been experienced on both the
North and South Islands with plenty of rain. Some cooperatives
have reduced farmgate prices. Some producers have responded by
taking steps to increase production, via supplemental feeding,
in order to sustain a comparable cash flow. Milk manufacturing
is very active and supplies are building, which is typical for
this time of year. July milk production as reported by DCANZ
was 0.20 million tons, up 5% from July 2013 and equal to the
level two years ago.
*****SPECIALS THIS ISSUE*****
INTERNATIONAL DAIRY MARKET NEWS (PAGES 8-8B)
DAIRY FUTURES (PAGE 9)
DAIRY GRAPHS (G1-G4)
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