Dairy commodity prices in early spring down trend
After posting steady gains in the spot market on the Chicago Mercantile Exchange last week, the prices for dairy commodities took a downward turn through Wednesday of this week.
Cheddar cheese barrel were especially hard hit, surrendering 6.75 cents per pound during the first three trading sessions this week. Most of that decline occurred on Monday, March 25 as the price fell by 4.25 cents.
As a result, there was a 10-cent per pound price spread between Cheddar blocks and barrels at the close of the market on Wednesday - $1.6975 for blocks and $1.5975 for barrels. The block price had risen on all five trading days last week but the .25-cent drop on Wednesday was the first price change for blocks this week.
The spot market activity for Cheddar cheese has been relatively light this week. The Wednesday session had a sale of one carload each of blocks and barrels along with an uncovered offer to sell one carload of blocks.
A similar downward spiral took over in the AA butter spot market this week. After the price climbed to $1.70 per pound last week, it dropped by 3.5 cents on Monday of this week and by another 2 cents on Wednesday to close at $1.64.
The day's market activity was one carload sale and an unfilled bid to buy one carload.
The spot market price spread for non-fat dry milk closed on Wednesday as the Grade A price gained 1 cent following one uncovered offer and one unfilled bid. This put the closing price at $1.55 per pound for Grade A and $1.56 for Grade Extra.
A different price pattern prevailed in the futures markets on Wednesday. Price gains were posted for dry whey in six of the remaining months of 2013 to put the prices at between 55.5 and 60 cents per pound for each month following the year's high price of 61.25 cents per pound for March.
Despite no support in the spot market for dairy commodities, the Class III milk futures recorded gains of 13-20 cents per hundred on Wednesday for five of the remaining months in 2013.
Prices near the end of the trading day stood at $17.05 per hundred for March, $17.47 for April, $18.44 for May, and in the high $18s and low $19s for the final seven months of 2013 before dropping to the $16s per hundred by the end of 2014.
The Class I fluid milk national base price for April is $17.66 per hundred. This is down by 14 cents from the March price.
Earlier this week, Cooperatives Working Together announced the receipt of 28 bids from Dairy Farmers of America, Foremost Farms USA, United Dairymen of Arizona, the Maryland and Virginia Milk Producers Cooperative, the Michigan Milk Producers Association, and Upstate Niagara O-AT-KA.
The bids were for price assistance on the export of 7.108 million pounds of Cheddar, Gouda, and Monterey Jack cheese, 3.942 million pounds of butter, and 44,092 pounds of anhydrous milkfat to countries in North America, Europe, North Africa, Asia, and the Middle East. The deliveries are scheduled from April-September.