Midweek downturn in dairy market

Ray Mueller

Chicago, IL — All four of the major dairy commodities traded in the spot market at the CME Group suffered price losses on Wednesday of this week.

There were four carload sales each of Cheddar cheese blocks and barrels as the block price slipped by 0.25 cent to a day's closing price of $1.73 per pound while barrels lost 0.75 cent to close at $1.5850 per pound. The day's sales raised the week's total to 10 and 17 carloads respectively for blocks and barrels.

The day's activity also included unfilled bids for both one carload of blocks and barrels. Compared to a week earlier, Wednesday's closing prices were down by 3 cents per pound for blocks and by 5 cents for barrels.

Butter downturn

After hitting a recent high of $2.23 cents per pound on Wednesday, Nov. 30, the AA butter prices retreated in all subsequent trading days through Wednesday of this week. The day's price drop of 2.5 cents left the price at $2.0950 per pound.

Three carloads of AA butter were sold on Wednesday to put the week's total at eight spot market sales. An offer to sell one carload was not covered.

Grade A non-fat dry milk followed the trend with a loss of 1.75 cents to close at 95.75 cents per pound after hitting a recent high of $1.0075 on Friday, Dec. 2. Two carloads were sold to raise the week's total of five sales. An offer to sell two carloads was not covered.

Futures markets

In the wake of the commodity price setbacks, the Class III milk futures for nearby months posted small losses in trading through late Wednesday morning. Prices stood at $16.95 per hundred for December, $16.45 for January, $16.60 for February and $16.61 for March.

The Class III futures then enjoy small rises, topping the $17 per hundred for all months in the 2nd half of 2017. All prices for 2018 are in the $16s per hundred.

Dry whey futures prices range from a low of 38.1 cents per pound for December to a high of 42 cents per pound for November of 2017. Futures contracts were completed at those prices for all months in 2017 by Wednesday noon of this week.

Milk pay prices

The November Class III milk national base price at 3.5 percent butterfat is $16.76 per hundred. This is an increase of $1.94 from October and of $1.46 per hundred from November of 2015.

The Class II milk price (soft dairy products) was down to $14.60 per hundred for November compared to $18.26 a year ago. The Class IV milk price (butter and milk powders) was at $13.76 per hundred for November compared to $16.89 a year ago.

For the milk that they shipped in October, dairy farmers in Wisconsin received a weighted average of $17 per hundred — down by 90 cents from September. The butterfat average for the month was 3.84 percent.

Across the United States, the October all-milk average price was $16.60 per hundred — down by 70 cents from September. Average prices in others states included $15.34 per hundred in California, $15.30 in Michigan, $15.80 in New Mexico, $16.40 in Idaho, $17.10 in Texas, $17.20 in Minnesota, $17.40 in New York and $17.70 in Pennsylvania.

Dairy export report

On Monday of this week, Cooperatives Working Together announced the receipt of requests from members for financial support on 15 contracts to export 1.785 million pounds of Cheddar cheese to buyers in countries in Asia, the Middle East and Oceania.

Unlike with most of those announcements, the name(s) of the National Milk Producers Federation member cooperatives making the request were not disclosed. Deliveries of the cheese are scheduled from December to March of 2017.