The Agriculture Department announced the June Federal order benchmark milk price at $16.27 per hundredweight, down 11 cents from May but $1.06 above June 2018 and is $1.84 above what California’s 4b cheese milk price was in June 2018. While down from May, it’s the highest Class III price since November 2017.
The $16.27 price equates to $1.40 per gallon, up from $1.31 a year ago, and put the 2019 Class III average at $15.25, up from $14.41 at this time a year ago and compares to $16.12 in 2017.
Late Friday morning July 5, Class III futures portended a July price at $17.34; August, $17.84; with a peak at $17.96 in September before heading back down.
The June Class IV price is $16.83, up 54 cents from May, $1.92 above a year ago, and the highest Class IV price since November 2015. Its 2019 average now stands at $15.98, up from $13.67 a year ago and $15.08 in 2017.
The descent in the previous three Global Dairy Trade auctions slowed in the 4th of July week. While it was the fourth consecutive decline, the weighted average of products offered inched just 0.4% lower after dropping 3.8% on June18, 3.4% on June 4 and 1.2% on May 21. Sellers brought 54.5 million pounds of product to the market, up from 53.4 million in the last event.
Buttermilk powder led the losses, down 11.9%, followed by butter with a 4.8% decline. Butter was down 5.7% last time. Rennet casein was down 3.9%, anhydrous milkfat was down 1.9%, following a 3.3% decline, and GDT Cheddar was down 1.5%, which follows a 4.3% decline. Lactose was off 1.1%.
Like the June 18 event, there was only one product in the black but this time it was skim milk powder, up 3.2%, after a 3.5% decline last time.
Meanwhile, U.S. cheese exports remained the small bright spot in May export data, according to HIghGround Dairy, “climbing back higher versus the prior year after an April decline but remaining stronger year to date, even when compared to good exports during first half 2018.”
“Mexico remained the top destination for U.S. cheese even as exports slipped 10% or 2 million pounds year over year. South Korea was up 18% YoY, and Japan was up 47%,” says HGD, but Indonesia was in a “surprise fourth place,” with total cheese exports up 407% or 2.3 million pounds.
“Nonfat dry milk exports were below a year ago for the seventh consecutive month but total volumes shipped in May represented the strongest monthly exports since May 2018. Mexico remained the top destination for U.S. shipments with 52% market share even as exports remained down YoY for the third consecutive month, falling 1%.”
May butter exports continued sharply lower, posting the steepest year over year decline since August 2016. HGD says “Canada continues to drive the decline with May exports traveling north down 41% YoY. Year to date exports to Canada are down 26% or 2.7 million pounds versus Jan-May 2018. On a positive note, South Korea continued to be a large buyer of U.S. butter into May, up 96% YoY in the month and up 129% year to date.”
The report also showed U.S. butter imports were up 15.4% from April and 105.8% above May 2018, with YTD imports up 61.7% from a year ago.
Matt Gould, editor and analyst with the Dairy and Food Market Analyst newsletter, said the “sluggish” butter production in the U.S. stood out in the May Dairy Products report issued July 3 but added that butter imports remain “relatively minor.” The exception is Irish butter, which he called “a premium product that doesn’t do much to influence prices.”
Cooperatives Working Together member cooperatives accepted 19 offers of export assistance this week to sell 207,235 pounds of cheese; 341,717 pounds of cream cheese, and 2.235 million pounds of whole milk powder.
The product will go to customers in Asia, South America, and Oceania through October and raised CWT’s 2019 sales to 30.95 million pounds of American-type and Swiss cheeses, 154,324 pounds of anhydrous milkfat, 4.2 million pounds of butter (82% milkfat), 3.14 million pounds of cream cheese and 35.6 million pounds of whole milk powder.
The products will go to 26 countries and are the milk equivalent of 669.4 million pounds of milk on a milkfat basis, according to the CWT.
Wisconsin produced 287.8 million pounds of the May total, up 2.2% percent from April and virtually unchanged from a year ago. California produced 211.3 million pounds, down 0.4% from April and 2.6 below a year ago. Minnesota, with 63.0 million pounds, was up 6.1% from April but 1.0% below a year ago.
Dairy Market News reports that Midwestern cheese demand was generally unchanged week to week. Some cheesemakers, particularly mozzarella and provolone producers, are still seeing positive ordering trends. Curd and barrel producers also reported stronger sales with outside festivities in full swing. Other producers of varietal/specialty cheeses are experiencing an expected slowdown. Cheese output has picked up some and spot milk is available at discounts.
Looking westward, cheese exports were reported to be mixed while domestic demand is unchanged. Inventories are balanced to a bit tight. With declining milk components and supplies, Western cheese output fluctuates, says DMN.
Some Midwest butter plant managers reported finding cream at prices within their reach, at least during the holiday week. Cream was more available within the region and from the West, as both butter/other production plants took time off for the holiday weekend. As rising temperatures hit large areas of the region, cream is predicted to tighten. Butter demand is steady, keeping availability manageable.
One of the biggest factors in the whey market is African Swine Fever, as whey is a big component in feeding pigs.
World Dairy Expo is accepting entries for its 53rd annual Dairy Cattle Show, Oct 1-5 in Madison. New this year, online and paper entry forms are due Sept. 8. Late entries may be submitted online through Sept. 19, and paper entries will be honored until the day of the show, both for an increased fee.
New to the Dairy Cattle Show, a Summer Junior Two-Year-Old Cow Class has been added to the International Holstein Show, International Junior Holstein Show, International Red & White Show and International Junior Red & White Show. Animals exhibited in this class are born between June 1, 2017, and Aug. 31, 2017, and in milking form at WDE.