Dairy prices in a downturn
All of the major dairy commodity prices lost ground for the week through Wednesday of this week in the spot market on the Chicago Mercantile Exchange (CME). Most of those setbacks occurred on Monday of this week.
The only price change on Wednesday of this week was a 1.5 cent gain for AA butter to a closing price of $1.94 per pound — down by 2 cents from a week earlier. The day's market activity included the sale of three carloads to bring the week's total to seven sales along an uncovered offer to sell five carloads and an unfilled bid to buy one carload.
Grade A nonfat dry milk had one carload sale to bring the week's total to five, an uncovered offer to sell two carloads and an unfilled bid to buy one carload. The price held at 73.75 cents per pound — down by 3.25 cents from Friday of last week.
Cheddar cheese market
The spot market for cheddar cheese remained quiet again this week following the sale of only two carloads of cheddar barrels on the CME last week. The only sale through Wednesday of this week was one carload of blocks.
On Wednesday of this week, the prices remained at $1.43 per pound for cheddar barrels with no activity and at $1.4875 per pound for cheddar blocks as an offer to sell one carload was not covered. Those prices are 3.5 and 2.25 cents per pound lower respectively from a week earlier.
Most of the Class III milk futures are still at or near their recent lows despite small gains for a majority of months over the next two years in trading through early afternoon on Wednesday. The highlight was a 14-cent per hundred uptick for April 2016 to $13.54.
Starting with the $13.79 per hundred for March, the prices remained in the $13s through July, in the $14s for all months from August 2016 through June of 2017, and in the low $15s from July 2017 through January of 2018.
With very limited trading on Wednesday, dry whey futures prices posted a few small gains for nearby months. The price range was from 25.275 cents per pound for April of 2016 to 30.5 cents for February of 2017.
The producer price differential (PPD) for February in the Upper Midwest federal milk marketing Order 30 for the Chicago base zone is 19 cents per hundred on the more than 3.101 billion pounds of milk pooled in Order 30 for the month. At the most distant milk receiving plants, the PPD is a minus 1 cent per hundred.
Of the pooled milk, 9.2 percent was used in Class I (bottled fluid milk), 1.8 percent in Class II (soft dairy products), 84.8 percent in Class III (cheese) and 4.2 percent in Class IV (butter and milk powders). The pooled milk had component average percentages of 3.9 for butterfat, 3.15 for protein, and 5.73 for other solids.