At the turn of the calendar year, two paths crossed in the dairy market - the all-milk price for December fell while the Chicago Mercantile Exchange's spot market price for Cheddar cheese barrels posted two gains during the trading week ending on Wednesday of this week.
The all-milk prices, which were announced for December, showed that the average for Wisconsin for the month dropped to $21.40 per hundred - down by $1.80 from November but 50 cents higher than for December of 2011.
For the United States, the average all-milk price for December deliveries is estimated at $21.10 per hundred.
Sixteen of the top 23 milk production states had averages higher than that for Wisconsin but the national average, which is volume-weighted, was pulled down by the relatively low all-milk prices of $18.80 per hundred in California and $19.50 in Idaho for the month.
Another downside in the dairy statistics for December is the milk to feed price ratio of 1.65, down from the 1.73 in November.
Most of this decline was due to the drop in milk price because the corn price was down by 1 cent to $7.02 per bushel, the soybean price rose by 40 cents to $14.70 per bushel, and the dry alfalfa hay price was down by $2 to $215 per ton.
On Thursday, Dec. 27, the spot market price for Cheddar barrel cheese jumped by 5.5 cents per pound as seven carload sales were made. On Wednesday of this week, one carload sale raised the price by another 2 cents per pound.
This put the day's closing price at $1.73 per pound. In the meantime, the Cheddar block spot market has been quiet with the price standing at $1.76 per pound.
The spot market price for AA butter continues to slip.
On Wednesday of this week, an uncovered offer to sell dropped the price by .25-cent to $1.4950 per pound. Non-fat dry milk prices remain at $1.56 per pound for Grade Extra and $1.5575 for Grade A in the spot market.
Dry whey futures prices continue to show strength. The December futures closed at 66 cents per pound, January stood at 62.475 cents on Wednesday of this week while February was at 60.45 cents and all remaining months of 2013 were between 59 and 54.5 cents per pound.
Class III milk futures posted modest increases for February and March of 2013 and for March and April of 2014 on Wednesday.
The December price closed at $18.60 per hundred (the Class III cash price will be announced today), January was at $17.92, and all other months through January of 2014 were in the $18s per hundred.
Based on early analysis of the dairy elements in the federal extension of the previous Farm Bill by Congress as part of the larger "fiscal cliff" legislation, the Milk Income Loss Contract (MILC) was restored and dairy farmers could be entitled to a payment of just over 2 cents per hundred for milk they sold in October of 2012.
Calculations at the end of last week by University of Wisconsin-Madison dairy economist Brian Gould, based on milk and grain (corn and soybean) futures prices for upcoming months, indicated the possibility of MILC payments for one-half of the months in 2013.
The early estimates for those amounts range from 39 cents per hundred for February to 3 cents per hundred for July.