After holding in the $1.40s per pound for nearly the first four months of 2016, Cheddar cheese prices hit a multi-year low in the spot market on the Chicago Mercantile Exchange (CME) this week.
As 21 carloads of Cheddar blocks were sold in the spot market on Wednesday, bringing the week's total to 35 carloads, the price dropped by another 1.75 cents to $1.3625 per pound. This is the lowest Cheddar block price since it averaged $1.38 per pound in December of 2010.
The trading session for Cheddar blocks on Wednesday also included an unfilled bid to buy two carloads and an uncovered offer to sell one carload. The Cheddar barrel price held at $1.38 per pound as three carloads were sold, putting the week's total at six sales on the CME.
Steady Class IV prices
For the two dairy commodities on the which the monthly Class IV milk price is calculated, there were no price changes during the spot market session on Wednesday. The Grade A non-fat dry milk price stood at 77.5 cents per pound as one carload was sold, a bid for one carload was not filled, and an offer to sell two carloads was not covered.
The AA butter spot market price held at $2.04 per pound on Wednesday — the same as it was a week earlier. One carload was offered for sale and a bid to buy one carload was not filled.
In reaction to the drop in cheese prices this week, Class III milk futures posted double digit per hundred losses for all months from July 2016 through February of 2017 in early afternoon trading on Wednesday. The April price held at $13.64 per hundred but prices in subsequent months were down by 40 to 60 cents per hundred compared to those less than a week earlier.
Those Class III milk futures prices included new lows of $13.12 per hundred for May, $13.27 for June, and $13.52 for July. They then rise into the $14s per hundred for August 2016 through January of 2017 and into the $15s per hundred for February 2017 through March of 2018.
The Class I fluid milk national base price for May is $13.70 per hundred. This is 4 cents less than the price for April.
Red ink also prevailed on Wednesday for the dry whey futures prices from June through October of 2016. Prices ranged from a low of 23.75 cents per pound for May to highs of just over 28 cents for all months in 2017.
On Monday of this week, Cooperatives Working Together announced the receipt of a total of 12 bids from Dairy Farmers of America, the Michigan Milk Producers Association, the Northwest Dairy Association (Darigold), and the Tillamook County Creamery of Oregon for financial support on contracts to export dairy commodities.
Those products are 5.307 million pounds of whole milk powder and 2.456 million pounds of Cheddar and Gouda cheese. They will be going to buyers in Asia, North Africa, the Middle East, and South America in deliveries scheduled until October of this year.