Prices stabilize in dairy spot market

Chicago, Ill. -  After some turbulent trading days earlier in the month, prices have stabilized during the past week for dairy commodities in the spot market at the CME Group. All four of the commodities had carload sales on Wednesday of this week.

Cheddar barrel cheese prices, which closed unchanged at $1.65 per pound after the sale of three carloads on Wednesday, continue to top those of Cheddar blocks. Eight carloads of barrels were sold earlier in the week.

As seven carloads of Cheddar blocks were sold on Wednesday and an offer to sell one carload was not covered, the price slipped by .50 cent per pound to close at $1.6050. Four carloads were sold earlier in the week.
Price Pickups

AA butter was the market leader on Wednesday with a gain of 2.75 cents per pound to close at $2.1575. One carload was sold to raise the week's total to four carload sales, a bid to buy one carload was not filled, and an offer to sell one carload was not covered.

Grade A non-fat dry milk gained .75 cent on Wednesday to close at 91 cents per pound. Two carloads were sold to put the week's total at seven sales. A bid to buy one carload was not filled and an offer to sell one carload was not covered.

Futures markets

With March and April of 2017 accounting for most of the new contracts, the Class III milk futures had single digit per hundred price changes in trading into the early afternoon on Wednesday.

For 2017, February had the lowest price of $16.88 per hundred. All other months of the year were in the $17s per hundred. Prices then drop to the upper half of the $16s per hundred for all months in 2018.

Dry whey futures prices were mixed for the months in 2017 – all of them – for which at least one contract was traded on Wednesday. Prices were in an extremely tight range of 48.4 cents per month for February of 2017 to a high of 50 cents for all months in the first half of 2018. No contracts were traded for 2018 through early afternoon on Wednesday.

January PPD at 22 cents

Following two negative months, the producer price differential (PPD) for the Chicago base zone of Federal Milk Marketing Order 30 moved back into positive territory for January. The PPD value was 22 cents for the base zone but still a negative 2 cents at the most distant milk receiving plants.

With the climb in the PPD number, the volume of milk pooled in Order 30 during January rose to nearly 2.5426 billion pounds. Usage of the pooled milk was 11.4 percent in Class I (fluid milk), 6.7 percent in Class II (soft dairy products), 75.9 percent in Class III (cheese), and 6 percent in Class IV (butter and milk powders). The pooled milk had averages of 3.91 percent butterfat, 3.17 percent protein, and 5.75 percent other solids.

The 22-cent January PPD put the statistical uniform price for Class III milk at 3.5 percent butterfat at $16.99 per hundred for the month. The Class III milk base price for the month was $16.77 per hundred – up by $3.05 from January of 2016.

For January, the Class II price of $16.36 per hundred was up by $2.17 from a year earlier. The Class IV price of $16.19 per hundred was an increase of $2.88 from January of 2016.