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CHICAGO, IL

After rising to a calendar year high of $2.17 per pound, the spot market price of AA butter on the Chicago Mercantile Exchange (CME) plunged by 10 cents on Tuesday of this week. It had risen by 21 cents per pound during the previous week of daily trading on the CME.

The price drop on Tuesday occurred on a market day with four carload sales for the 2nd consecutive day, an unfilled bid to buy one carload, and an uncovered offer to sell two carloads. Grade A non-fat dry milk ticked up .75 cent to close at 70.75 cents per pound during a market session of an unfilled bid for two carloads and an uncovered offer to sell one carload.

Spot market prices for Cheddar cheese continued to hover in the low $1.40s per pound early this week. Cheddar blocks gained .75 cent on Tuesday to close at $1.4250 during a 2nd consecutive day with two carload sales along with an unfilled bid for one carload. Thanks to an unfilled bid for one carload, Cheddar barrels picked up 2 cents on Tuesday to close at $1.4350 per pound.

Class III milk futures

Those Cheddar cheese gains anchored a modest rally in Class III milk futures for all months from April 2016 through March of 2017. The per hundred price increases on Tuesday ranged from 17 to 24 cents for most of those months.

That left only April and May of 2016 in the $13s (both at $13.81 per hundred). Prices were in the $14s per hundred for June through August before bumping into the $15s per hundred for all months from September 2016 through March of 2018.

With very few trades on Tuesday, dry whey futures prices held in a tight range of 25 to 28 cents per pound for all months through March of 2018. Small prices gains were registered for a few nearby months on Tuesday.

A dime for March PPD

The producer price differential (PPD) on the nearly 3.127 billion pounds of milk pooled in the Upper Midwest federal milk marketing order 30 during March is 10 cents per hundred in the Chicago base zone. That converts to as much as a 20 cent per hundred negative at the most distant milk receiving plants in Order 30.

Of the milk pooled during March, 80.3 percent was used in Class III (cheese production), 9.4 percent in Class I (fluid milk), 5.7 percent in Class II (soft dairy products), and 4.6 percent in Class IV (butter and milk powders). The pooled milk had averages of 3.86 percent butterfat, 3.12 percent protein, and 5.75 percent other solids.

Export report

On Monday of this week, Cooperatives Working Together reported the receipt of a batch of 11 requests from Dairy Farmers of America, the Michigan Milk Producers Association, Tillamook County Creamery of Oregon, and Northwest Dairy Association (Darigold) for financial assistance on contracts to export dairy commodities.

Those commodities are 1.614 million pounds of Cheddar and Monterey Jack cheese and 132,277 pounds of whole milk powder. They will go to buyers in Asia, the Middle East, South America, and Central America on deliveries scheduled from April to October of 2016.

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