After reaching a five-year high during the second week of January, prices for Cheddar block and barrel cheese held at those levels through Wednesday of this week in the spot market on the Chicago Mercantile Exchange.
The Cheddar block market was quiet during the first three days of this week with the price standing at $2.20 per pound. Cheddar barrels tacked on .25-cent per pound on Tuesday of this week as three carloads were sold. This put the price at $2.1625 per pound, where it held on Wednesday as a bid to buy two carloads was not filled.
For the five trading days ending on Wednesday of this week, the AA butter spot market price rose by 12 cents per pound. Four carloads were sold on Tuesday of this week through the spot market. A bid to buy one carload that was not filled raised the price by 3 cents per pound to $1.77 on Wednesday.
Bucking the price trend was the spot market for non-fat dry milk market. Respective price drops of .50-cent per pound for Grade A and 1.25-cent for Grade Extra on Wednesday put the day's closing prices at $2.0650 and $2.0675 per pound. The day's market activity included sales of five carloads of Grade A and one of Grade Extra, an unfilled bid to buy one carload of Grade A, and an uncovered offer to sell one carload of Grade Extra.
The dry whey futures market continued to be firm, however. Within the past week, prices rose slightly for some months in 2014, putting them in a range of the high of 61.75 cents per pound for February to the low of 57 cents for December.
Class III milk futures for nearby months continued to react favorably on Wednesday. Price gains put the late morning trading prices at $20.78 per hundred for January, $21.18 for February, $19.89 for March, and $19.09 for April. All would be higher than the Class III cash price for any month in 2013.
For later months in 2014, prices were in the $18s per hundred for May through September. They then slide to the high $17s per hundred for the final quarter of the end and had moved just above $17 for the first half of 2015.
The producer price differential for December 2013 in the Federal Milk Marketing Order Chicago base zone is 39 cents per hundred. Milk pooled in the Order for the month topped 2.866 billion pounds.
That milk had high component averages of 3.92 percent butterfat and 3.21 percent protein along with 5.7 percent other solids. Of the pooled milk, 86.4 percent was used in Class III, 11.1 percent for Class I fluid, and a total of 2.5 percent in Classes II and IV.
The severe weather during the second week of January created some disruptions in the dairy processing, resulting in supply and financial losses. According to published reports, the Fair Oaks Dairy complex in Newton and Jasper counties in northwest Indiana was the most greatly affected.
Tanker trucks that transport the milk from 35,000 cows at the Fair Oaks facilities were stranded on the numerous highways that were shut down in Indiana, Michigan, and Kentucky due to heavy snowfalls and drifting. As a result, about 250,000 gallons (2 million pounds) of milk were dumped daily for a period of two-three days. The financial loss was $400,000-$500,000 per day.
On Jan. 14, Cooperatives Working Together (CWT) announced the receipt of its first group of bids in 2014 for financial assistance on the export of dairy product. CWT is a coalition of 38 dairy cooperatives, representing about two-thirds of the nation's milk production, whose members contribute 2 cents per hundred on their milk shipments to support the program.
The five bids processed this week came from the Maryland and Virginia Milk Producers Cooperative, Darigold Cooperative of Washington, and United Dairymen of Arizona. They plan to export 707,684 pounds of Cheddar, Gouda, and Monterey Jack cheese and 533,619 pounds of butter to customers in Asia, North Africa, and the Middle East in deliveries scheduled from January to June.
During 2013, CWT set record highs in all phases of its financially supported export program. Through October, its volume accounted for 19 percent of the nation's cheese exports and 57 percent of the butter exports. The products went to 40 countries on six continents. Japan and Egypt were the top two customers.
Without including the data for December, the exports of dairy products by the United States in 2013 had already smashed all records. Through November, the value of those exports was 18 percent higher than for all of 2012.