Active butter market highlights CME sessions

A very active AA butter cash market highlighted the early week activities on the Chicago Mercantile Exchange.

After 11 carloads were sold on Monday of this week and a bid to buy 2 carloads was not filled, activity even picked up on Tuesday with the sale of 14 carloads, an unfilled bid to buy 4 carloads, and an uncovered offer to sell 2 carloads.

As a result, the spot market price jumped by 5 cents per pound on Monday and another 75-cents on Tuesday to close at $1.6675. The AA butter spot market price had dipped to $1.61 per pound just before the Thanksgiving holiday.

A similar but less active trend took hold early this week in the spot market for Cheddar cheese. Prices rose by 2.5 cents per pound for blocks and by 2 cents on Monday of this week after 5 consecutive down sessions heading into the Thanksgiving holiday.

At the close of the trading session on Tuesday of this week, the prices stood at $1.8150 per pound for barrels and $1.8125 for blocks. The day's activity included the sale of 2 carloads of barrels and uncovered offers to sell 1 carload each of blocks and barrels.

The dry whey futures market continues to be a source of strength for milk prices. At the market's opening on Wednesday of this week, price gains were posted for January and February of 2012, the December price stood at a high of 65 cents per pound, prices of 61 cents or above were on the board through April 2012, and the price for the latter three months of 2012 held at 52.5 cents per pound.

After modest gains earlier in the week, Class III milk futures for nearby months slipped at the market opening on Wednesday of this week. December futures were off by 12 cents per hundred to $18.68, while January was down by 18 cents to $17.34.

Futures prices stood in the very high $16s or very low $17s per hundred for all remaining months of 2012, before dropping into the $16s for all trading months in 2013. With only a couple of trading days remaining, the November futures were at $19.11 per hundred. The Class III cash price for November was announced today (Dec. 2).



Somatic cell counts

A recent study of somatic cell counts (SCC) in the United States indicated that significant percentages of milk shippers would have difficulty meeting a standard of 400,000 SCC (the same as in the European Union) if it were adopted in the United States. A motion to adopt that standard was defeated by a single vote during the 2011 Conference of Interstate Milk Shippers, and the upper acceptable limit of 750,000 SCC remains in place in this country.

Dairy Herd Improvement Cooperative and Federal Milk Marketing Order records were used to conduct the SCC study. Data from 14,854 DHIC testing herds and from 27,759 FMMO herds using bulk milk tank samples showed significant differences between dairy herd sizes on the SCC averages.

Based on a series of SCC tests, 19 percent of the DHIC herds with less than 50 cows would not have complied with a 400,000 SCC standard while only 1 percent of those with more than 1,000 cows would not have complied. The FMMO data indicated that 44.5 percent of herds shipping less than 900 tons of milk per year (1.8 million pounds or the equivalent of milk from about 90 cows) would not have met a 400,000 SCC standard while 8 percent of those shipped more than 9,000 tons (18 million pounds or the equivalent about 900 cows) would not have complied with a 400,000 SCC standard.

Cooperatives Working Together has accepted a batch of 12 bids from Dairy Farmers of America, United Dairymen of Arizona, and Darigold Cooperative for assistance on the exporting of 7.355 million pounds of Cheddar and Monterey Jack cheeses to countries in Central America, Asia, and the Middle East from December to April 2012.