Correspondent
MADISON
The gross prices that dairy farmers are being paid for the milk they shipped in January are virtually the same as those for December of 2009, according to a report early this week by the Wisconsin field office of the National Agricultural Statistics Service. Gross price is the value of the milk before milk check deductions such as those for promotion, hauling or services received from the milk buyer.
For January, the gross price in Wisconsin is $17 per hundred — the same as in December. The national average for both months is $16.50. The Class III cash milk price for January, to be announced today (February 5), is likely to be slightly under $14.50 per hundred.
In other states, California is projected to have the largest decrease — 55 cents — from December to January, putting its gross price at $15 per hundred. Other states with declines are Minnesota by 40 cents to $16.50 and Idaho by 10 cents to $15.30.
States listed for price increases from December to January include Michigan by 60 cents to $17.20, Pennsylvania by 40 cents to $18.30, New Mexico by 40 cents to $16 and New York by 30 cents to $17. Texas held at $16.80 per hundred.
Given the recent downturn on the Chicago Mercantile Exchange (CME) for both the spot markets on Cheddar cheese and AA butter and the Class III milk futures, the January prices could be the highest for the first half of 2010. No Class III futures price above $14.50 per hundred were on the board until July in trading early this week.
The downward trend for early February started at the CME on Monday of this week with Cheddar barrels dropping by 2.5 cents per pound and blocks down by 1.5 cents. This pattern continued in the spot markets on Tuesday with barrels slipping another .75-cent to $1.4725, blocks by .7-5cent to $1.5025 and AA butter 1.5 cents to $1.31 per pound — all on uncovered offers to sell.
Despite that, there were some modest rises in the Class III milk futures on Tuesday after a sharp down day on Monday. This left the futures somewhat below what dairy farmers had been eyeing as a price recovery or about $2 per hundred lower for nearby months than they were as recently as early December.
In addition to the $14.47 for January near the end of its trading period, futures on Tuesday of this week closed in the $13s per hundred for February through May before rising to reach the low $15s for all months from August 2010 through September of 2011.
