Active dairy market ignites price changes

Ray Mueller


Active markets and price changes highlighted the first three days of this week in the spot market for dairy commodities on the Chicago Mercantile Exchange.

On Wednesday, one of the highlights was the 4-cent-per-pound gain in the price of Cheddar cheese blocks to put the day's closing price at $1.82 per pound. Seven carloads were sold to boost the week's total to 15 sales and an offer to sell one carload was not covered.

With an uncovered offer to sell one carload being the only activity for Cheddar barrels on Wednesday, the price remained at $1.8650 per pound. No carloads of barrels were sold during the first three days of this week in the spot market.

Butter down, NFDM up

The AA butter spot market price fell by 3.75 cents on Wednesday to close at $2.2025 per pound. The day's market activity consisted of seven carload sales to bring the week's total to 11, an unfilled bid to buy one carload, and an uncovered offer to sell one carload.

The Grade A non-fat dry milk price, however, jumped by 2.25 cents per pound as one carload was sold to the put week's total at four, a bid to buy two carloads was not filled and an offer to sell one carload was not covered. The day's closing price was 86.50 cents per pound.

Green ink colors futures

Both the Class III milk and dry whey futures markets were in green ink price territory for many subsequent months. The Class III futures posted gains for every month from August 2016 through December of 2017 while the dry whey futures had gains for every month through March of 2017.

As a result the nearby month prices for Class III futures were $17 per hundred for August, $17.69 for September, and $17.39 for October. Futures for all months from November 2016 through July 2018 were trading in the $16s per hundred early on Wednesday afternoon.

The 29 cents per pound price for August was the lowest price on the dry whey futures. Prices for all subsequent months through July of 2018 were between 32.5 and 38.525 cents per pound.

PPD at a dime

The producer price different differential (PPD) for July in the Chicago base zone for Federal Milk Marketing Order 30 is 10 cents per hundred. Because of the transportation allowance in the formula, it converts to a minus 10 cents per hundred for the most distant milk receiving plants.

With the relatively low PPD for the month, the amount of milk pooled in Order 30 for the month fell to nearly 2.713 billion pounds. Of the pooled milk, 79.6 percent was used in Class III for cheese production. 9.5 percent in Class I for fluid milk bottling, 6.1 percent in Class II for soft dairy products and 4.8 percent in Class IV for butter and milk powder.

The pooled milk had calendar year 2016 low averages of 3.67 percent butterfat and 2.98 percent protein. The other solids average percentage was 5.77.

Dairy export report

On Monday of this week, Cooperatives Working Together reported the receipt of a total of 13 bids from Dairy Farmers of America, the Northwest Dairy Association Darigold) of Washington and Tillamook County Creamery in Oregon for financial assistance on contracts to export cheese.

Those contracts involve 1.506 million pounds of Cheddar, Colby, Gouda and Monterey Jack cheese going to buyers in Asia, the Middle East, Central America and North Africa. The deliveries are scheduled from August to December of this year.

The national milk production report for July is being released at 2 p.m. this afternoon (Aug. 19).