After hitting an all-time high in April, the gross all-milk prices being paid for milk shipped during May are taking a slight dip.
For Wisconsin dairy farmers, who enjoyed a $26.30 average per hundredweight all-milk price in April, the projected average for May is $25.60 — up by $5.20 from May of 2013. The national average predicted for May is $24.70 per hundred, down from $25.30 for April.
Among other top milk production states, the preliminary all-milk prices for May included $22.30 per hundred in California, $23.70 in Idaho, $23.40 in New Mexico, $25 in Michigan, $25.90 in both Minnesota and New York, $26 in Texas, and $26.50 hundred in Pennsylvania.
Twenty of the 23 top states are expecting a price decrease from April to May. A portion of the decrease is due to drop in butterfat averages — 3.77 percent in April to 3.72 in May in Wisconsin, for example, and from 3.71 to 3.66 percent for the nation as a whole.
The Class III milk cash price for May, which was to be announced yesterday (Thursday, June 5), is likely to be within a few cents of $22.55 per hundred. By a margin of nearly $2 per hundred, this will set a record high monthly Class III cash price for the fifth consecutive month.
High trading volumes and price gains sparked the trading sessions for dairy commodities during the first part of this week in the spot market on the Chicago Mercantile Exchange. During two days last week, the price for Cheddar cheese barrels fell by a total of 11.25 cents per pound while Cheddar blocks were down by 6 cents.
On Wednesday of this week, the Cheddar block price rebounded by 5.50 cents per pound as the result of an unfilled bid to buy one carload. This put the day's closing price at $2.03 per pound.
One carload sale and an unfilled bid to buy two carloads served to boost the Cheddar barrel price by 1 cent per pound to $1.9450 on Wednesday. On Tuesday of this week, 14 carloads of barrels were sold in the spot market while a bid for four carloads of blocks was not filled.
The AA butter spot market grabbed the spotlight on Wednesday with the sale of 12 carloads along with an uncovered offer to sell one carload. Despite all of that activity, the price remained at $2.26 per pound — down by 4 cents for the week.
One carload sale of non-fat dry milk on Wednesday raised the price by .25-cent to $1.86 per pound. Two carloads were sold on Tuesday of this week.
Class III milk futures reacted favorably to the spot market sessions by posting price gains for nearby months on Wednesday morning but then fell sharply during the afternoon. This left the Class III futures price at $21.17 per hundred price for June would still, by some 90 cents per hundred, convert to a new record high Class III cash price for the month.
Based on the current futures price, the string of record high Class III cash prices will end in July. The price cutback on Wednesday afternoon put the July futures at $20.31 compared to cash prices of above $21 per hundred in two previous years.
After that, the futures prices slide by more than $2 per hundred to the lower half of the $18s by early 2015 but they were holding in the $18s through November of 2015.
Dry whey futures prices were up .5-cent per pound for nearby months on Wednesday. That put the June price at 67 cents per pound. The price drops to 59 cents by September but it was at 48.5 cents per pound or higher for all subsequent months through December of 2015.
On Tuesday afternoon of this week, Cooperatives Working Together announced the receipt of 11 bids for financial assistance on the export of 850,984 pounds of Cheddar and Gouda cheese and 434,311 pounds of whole milk powder. The bids came from Dairy Farmers of America, the Michigan Milk Producers Association, Northwest Dairy Association (Darigold), and the Tillamook County Creamery in Oregon.
Those shipments are going to countries in Asia, Central America, the Middle East, North Africa, and other parts of Africa. The deliveries are scheduled from June to November.