February FMMO Class I base price hits 31-month low

The February 2015 federal order milk marketing order Class I base milk price is $16.24/cwt., down $2.34 from January 2015, $5.78 less than February 2014, and the lowest since July 2012.

Through the first two months of 2015, the Class I base average is $17.41/cwt., down $4.34 compared to the same period in 2014.

 

Cold storage report bullish on cheese, bearish on butter 

USDA’s monthly Cold Storage report was released on Jan. 22, reflecting stocks as of Dec. 31, 2014.

At 98.6 million lbs., butter stocks were down 2% from last month and down 12% from a year ago. Despite the decline, butter stocks were much larger than anticipated, according to Dave Kurzawski, FCStone.

“Perhaps our expectations were a bit too low given the typical sideways inventory change seen from November into December, but given that stocks were at a record low, we expected to see a significant drawdown. We’d look for butter to trade lower following this report,” he said.

Total natural cheese stocks, at 1.012 billion lbs., were down slightly from the previous month, but up slightly from Dec. 31, 2013.  The decline was almost solely a result of the decline in American cheese types.

“Cheese inventories were below our expectations this month notably so for American type cheeses, which came in at 623.8 million lbs., Kurzawski said. “Typically American cheese stocks increase from November into December, so a decline of 2% comes as a surprise. It will be interesting to see what the dairy products report has to show us this month, as our inventory levels of butter and cheese seem to indicate that production may have been pushed toward the Class IV markets, likely in an effort to get us through the strong seasonal demand period for butter – given the record low inventories.”

 

Weekly National Dairy Product Sales Report

Week ending Jan. 17, 2015

 

 

 

 

Change from

 

Ave. price

previous week

 

($/lb.)

(¢/lb.)

Butter

1.55

-0.2

Cheddar blocks

1.58

-1.6

Cheddar barrels

1.57

3.4

Dry whey

0.592

0.4

NFDM

1.01

-3.7

Source: USDA Ag Marketing Service

 

Weekly average California NFDM price

Week ending

Avg. price ($/ lb.)

7-day sales (lb.)

Jan. 16

1.0199

15,016,314

Jan. 9

1.0155

13,139,595

Jan. 2

1.1562

4,766,967

Dec. 26

1.1997

4,659,420

Dec. 19

1.2561

6,844,052

Source: CDFA