Market News

A mixed day in the dairy markets

Cash cheese barrels slipped a penny while blocks gained 3.5 cents on the Chicago Mercantile Exchange on Friday.  Class III futures were narrowly mixed after big gains on Thursday.

For the week: cash cheese barrels up 4 cents. Blocks gained 14.25 cents, butter lost 2 cents and nonfat dry milk is 3.75 cents lower.  Class III futures July gained 36 cents, August increased a nickel, September lost 13 cents and January slipped 19 cents.

Dairy Market News reports milk production is declining a little as are components as warmer temperatures set-in.  Demand for cheese remains strong although stocks are building from all of that milk.  Ice cream is pulling a lot of cream right now.

The monthly World Agricultural Supply and Demand Estimates from USDA Friday morning raised the milk production estimate for 2015.  Citing an increase in cow numbers and production per cow the outlook board puts 2015 production at 208.8 billion pounds up 100 million from last month’s estimate.

Strong consumer demand has pushed the cheese and butter price estimates a little higher for 2015.  Cheese is priced at between $1.65 and $1.68 per pound and butter is pegged between $1.81 and $1.87 this year.  However nonfat dry milk and dry whey prices are reduced to keep them competitive on the world market.  That pulled the 2015 Class IV price down 50-to-60 cents from last month which in turn pushed the all milk price down 10-to-20 cents from last month’s estimate.  The Class III price is a dime lower on the high end projected to be $16.15 to $16.45 per hundredweight this year.  Class IV is $13.70 to $14.10 and all milk is predicted to range from $17.05 to $17.35.

Dairy imports on a fat basis are projected to be 5.2 billion pounds this year compared to 4.3 billion last year.  On a skim milk basis, imports are projected at 6.1 billion pounds this year compared to 5.6 billion in 2014.

Looking ahead to 2016, USDA puts milk production at 213.6 billion pounds which is down 300 million from the June estimate thanks to expected higher feed prices and lower milk prices.  The 2016 all milk price is projected at $17 to $18 per hundredweight.