Prices drop in busy butter market
Spot market prices for AA butter continued to slide at the Chicago Mercantile Exchange while trade volumes increased in a shortened trading week which started with the federal Presidents' Day holiday.
With a .75-cent drop on Wednesday of this week, the AA butter price closed at $2.0425 per pound, which is a decline of 15.75 cents since February 4. Eight carloads were sold on Tuesday of this week as the price slid by 6 cents per pound and two more were sold on Wednesday while a bid to buy one carload was not filled.
The Grade A non-fat dry milk spot market followed those patterns with a 1.25-cent drop on Wednesday to close at 74.5 cents per pound. Six carloads were sold and an offer to sell one carload was not covered.
Cheddar cheese market
Spot market prices for Cheddar cheese have been in a narrow range during recent weeks. The price for Cheddar blocks held at $1.49 per pound as one carload was sold on Wednesday.
A bid for two carloads of Cheddar barrels that was not filled served to raise the price by 1 cent for a day's closing price of $1.47 per pound. Four carloads of barrels were sold on Tuesday of this week.
Futures prices dip
Class III milk futures for every month through October of 2016 slipped by single digit or low double digits in cents per hundred in trading through early afternoon on Wednesday. This put prices in the $13.80s per hundred for February through April, in the $14s for May through July, and mostly in the upper half of the $15s per hundred for all subsequent months into early 2017.
In a fairly quiet dry whey futures market, prices started at 24.65 cents per pound for February and gradually rose to 30.5 cents for February of 2017. With no contract trading, they remain at 27.5 cents per pound from March of 2017 through January of 2018.
The producer price differential (PPD) for federal milk marketing order 30 (Upper Midwest) for January is 23 cents per hundred in the Chicago base zone but only 3 cents at the most distant milk receiving plants. Despite the relatively low PPD, more than 3.256 billion pounds of milk were pooled in the order for the month.
Of the pooled milk, 84.8 percent was used in Class III for cheese production, 9.1 percent in Class I for fluid milk bottling, 4.5 percent in Class IV for butter and milk powder, and 1.6 percent in Class II for soft dairy products. Component averages for the pooled milk were 3.92 percent butterfat, 3.18 percent protein, and 5.69 percent other solids.
On Monday of this week, Cooperatives Working Together announced the receipt of 11 bids from Dairy Farmers of America, the Maryland-Virginia Milk Producers Association, Northwest Dairy Association (Darigold), and Tillamook County Creamery of Oregon for financial assistance on contracts to export dairy products.
Those products are 2.315 million pounds of 82 percent fat butter and 1.613 million pounds of Cheddar cheese. They are scheduled for delivery to buyers in Asia, the Middle East, and Oceania until August of this year.