Wisconsin exceeds national average milk price for August
The Class III national base price for August on milk with 3.5 percent butterfat is $17.73 per hundred. This is $1.05 more than in July and $2.50 above the year's low price in May. Other prices for August were $15.64 per hundred for Class II and $15.76 for Class IV.
Because the all-milk price of $17.80 per hundred for August is a weighted average, the low prices in several major production states kept the month's average at only seven cents per hundred above the Class III price.
Those lower prices include $16.50 per hundred in California, $17 in New Mexico, $17.20 in Idaho, and $17.70 in Texas.
Wisconsin, however, continues to fare very well in the monthly state by state all-milk price comparisons.
The state's field office of the National Agricultural Statistics Service projects an average all-milk price of $18.80 per hundred for August milk shipments ($1 above the national average). This is also a $1 per hundred increase from July for Wisconsin's dairy farmers but still $3.80 per hundred lower than the state's all-milk price in August 2011.
Minnesota expects to match Wisconsin's all-milk price of $18.80 per hundred for August. Other states above the national average for the month are Michigan at $18.20 and Pennsylvania at $19.10 per hundred.
The national overall 90-cent per hundred increase for the month compared to July raised the milk price to feed cost ratio to 1.35 for August. Feed costs applied in the formula were $7.14 per bushel for corn, $15.90 per bushel for soybeans, and $203 per ton for dry alfalfa hay.
Within the past week, however, the prospect for significant dairy commodity and milk price increases has dimmed a bit.
Prices for Cheddar cheese fell late last week in trading on the Chicago Mercantile Exchange and all the $20 per hundred Class III milk futures that had been on the trading board for the final quarter of 2012 were wiped away on Wednesday of this week.
The Class III futures fell by small to modest amounts per hundred for all months from September through June of 2013 on Wednesday. This left nearby month prices at $18.80 per hundred for September, $19.80 for October, $19.87 for both November and December, in the $19s for the first quarter of 2013, and in the $18s through October 2013.
Spot market prices for Cheddar cheese did not change on Tuesday and Wednesday of this week as the market resumed after the Labor Day holiday and AA butter took over as the price leader on dairy commodities.
Closing prices on Wednesday were $1.82 per pound for Cheddar blocks (a bid to buy two carloads was not filled), $1.7775 for Cheddar barrels with no market activity, and $1.87 per pound for AA butter (up by one cent) following one uncovered offer to sell and one unfilled bid to buy.
Unfilled bids for one carload each of Grade A and Grade Extra non-fat dry milk constituted the spot market activity on Wednesday. The Grade A price held at $1.70 per pound while Grade Extra advanced by one cent to $1.6375.
Dry whey futures fell slightly for nearby months on Wednesday but still averaged nearly 60 cents per pound through January of 2013. Prices are holding in the upper half of the 50s through September 2013.
Cooperatives Working Together has accepted a batch of seven bids from Darigold Cooperative, United Dairymen of Arizona, and Dairy Farmers of America.
The bids were for price assistance on the export of 734,139 pounds of Cheddar and Monterey Jack cheeses, 352,740 pounds of butter, and 44,082 pounds of anhydrous milkfat to countries in Central America, Asia, and the Middle East. Deliveries are scheduled from September to December.