Cheddar cheese prices continue steady decline

Since early December, with the holiday purchases of Cheddar cheese largely being completed, prices for the commodity have been on a daily decline.

That trend continued through early this week, with Cheddar blocks falling by another 3.5 cents per pound and Cheddar barrels by 1.75 cents on Tuesday to the put the day's closing prices at $1.60 and $1.5550, respectively per pound.

As the prices have fallen, trading on the Chicago Mercantile Exchange's spot market has been fairly active.

Sixteen carloads of barrels were sold and a bid for six carloads was not filled on Friday, Dec. 9. Three carloads of blocks and two of barrels were sold on Tuesday of this week.

The AA butter spot market price has also been retreating, slipping another three cents per pound to $1.61 by Tuesday of this week. Four carloads were sold on Tuesday. Non-fat dry milk spot market prices are stable at $1.48 per pound for Grade Extra and $1.45 for Grade A.

Despite the fall in commodity prices, the Class III milk futures posted small gains for the first six months of 2012 in trading on Tuesday. The December futures price stood at $18.55 per hundred while all months in 2012 were in the high $16s or low $17s per hundred.

Dry whey futures were down slightly early this week but were still above 60 cents per pound for all months through June of 2012 and no lower than 53 cents for any month in the second half of the year.

Whey prices account for a significant portion of raw milk value - approximately six cents per hundred on the milk price for every one cent of the whey price.

The producer price differential announced early this week on milk pooled in Federal Milk Marketing Order 30 during November is only 8 cents per hundred. This means a slight potential deduction in the milk checks for a majority of the shippers in Order 30 for the month.

Milk pooled in the Order 30 for November totaled nearly 2.7 billion pounds. It had averages of 3.87 percent butterfat, 3.17 percent protein and 5.74 percent other solids.

Of the pooled milk, 80.7 percent went to Class III use (cheese production), 13.5 percent to Class I (fluid milk) and a total of 5.8 percent to Classes II and IV (soft dairy products, butter and milk powders).

Cooperatives Working Together (CWT) has accepted bids from Darigold Cooperative of Seattle and Dairy Farmers of America for assistance on the exporting of 3.157 million pounds of Cheddar and Gouda cheeses to countries in Asia, Central America, the Middle East and North Africa by May of 2012.

This brings the year's total on such export bids to 91.5 million pounds of cheese going to 25 countries on four continents. It is the equivalent of about 900 million pounds of milk or the production by approximately 43,500 dairy cows, the National Milk Producers Federation indicates.

For 2012-13, CWT is being supported 33 dairy cooperatives and 177 individual milk shippers who represent 70 percent of the nation's milk production.

All of the co-op members and the other shippers are contributing two cents per hundred on their milk shipments to support the export assistance program which could be extended to other dairy products.