All-milk price takes another dip in April

The all-milk prices for April that were announced on Monday of this week by the U.S. Department of Agriculture continued on a downward trend.

The all-milk price includes quality, volume, component, and other premiums but does not account for hauling fees or subsidies or deductions such as promotion fees or voluntary contributions to the Cooperatives Working Together dairy product export program.

The average all-milk price for the United States in April is $16.90 per hundred, down by 30 cents from March and by $2.70 per hundred from April of 2011.

The preliminary estimate for Wisconsin's all-milk price for April is $17.60 per hundred, down only 10 cents from March but by $2.60 from April of 2011.

Among the top milk production states, the highest all-milk price for April is $20.40 per hundred in Florida. Prices in other states include $18.70 in Virginia, $18.60 in Pennsylvania, $17.50 in Michigan, $17.20 in Illinois, $16.70 in Idaho, $16.20 in Arizona, $15.70 in New Mexico, and $15 per hundred in California.

The national class cash prices for April's milk shipments were announced on Wednesday afternoon of this week. They are $15.72 per hundred for Class III, $16.20 for Class II, and $14.80 for Class IV.

Given the total increase of 6.75 cents per pound for Cheddar barrel cheese in the spot market on the Chicago Mercantile Exchange on Tuesday and Wednesday of this week, there might have been expectations of a corresponding increase in the Class III milk futures prices. But that did not happen on Wednesday.

Instead, the Class III futures fell by between 27 and 33 cents per hundred for the nearby months of June, July, and August on Wednesday.

Closing prices for the day were $15.11 per hundred for May, $14.56 for June, $14.84 for July, $15.30 for August, and in the upper half of the $15s for all subsequent months through June of 2013 before they edged up to $16 for the following three months.

With the two-day price rally, Cheddar barrel cheese closed at $1.4950 per pound on Wednesday after one unfilled bid to buy. Cheddar blocks remained at $1.5350 per pound after an uncovered offer and an unfilled bid. On Tuesday of this week, there were eight carload sales of both blocks and barrels.

The AA butter prices continued to sag in the spot market. They fell by another 1 cent to $1.3450 per pound on Wednesday after a market day of one carload sale, one unfilled bid, and an uncovered sell to sell two carloads.

With no activity, non-fat dry milk spot market prices also remained at multi-year lows of $1.1475 per pound for Grade A and $1.1075 for Grade Extra.

Dry whey futures prices again posted small gains for nearby months on Wednesday but remained stable for much of the upcoming two years.

Closing prices were 53.50 cents per pound for May, 45.975 cents for June, and in the low 40s for all other months through January of 2013.

In the latest weekly Milk Income Loss Contract report issued on Friday afternoons by University of Wisconsin-Madison dairy economist Brian Gould, the payment for March was officially set at 82.62 cents per hundred.

Based on the Class III milk and feed grain futures at the close of the market day on April 27, he estimated upcoming payments (in the closest round numbers) of $1.13 per hundred for April, 95 cents for May, $1.30 for June, $1.51 for July, $1.08 for August, and 57 cents for September.

The milk price to feed cost ratio for April matched the low of 1.45 set in June of 2009. It was calculated by using the April average all-milk price of $16.90 per hundred and feed costs of $6.14 per bushel for corn, $13.80 per bushel for soybeans (up by more than $1 recently), and $207 per ton for baled dry alfalfa hay.    

The second highest month ever for the slaughter of culled dairy cows was recorded in March. The month's total was 278,000 head, second only to the 281,000 in January of 1997.

This was an increase of 9,900 head from March of 2011 and was 16,900 more than in February of this year, which had two less calendar days and one less working day.

For the first quarter, the cull cow slaughter of 803,000 head was up by 22,200 from the first quarter of 2011.

Dairy Farmers of America, Darigold Cooperative, Foremost Farms, United Dairymen of Arizona, and the Maryland and Virginia Milk Producers Cooperative have submitted a total of 13 bids to Cooperatives Working Together.

These price bids were for price assistance on the export of 866,417 pounds of Cheddar and Monterey Jack cheese and 1.57 million pounds of butter to countries in South America, Asia, Africa, and the Middle East from May to July.