Cash cheese barrels rebounded on the Chicago Mercantile Exchange on Friday, reclaiming the 5.25 cents they gave up on Thursday. Class III futures more-than-reclaimed their Thursday losses.
For the week, cash cheese was unchanged, butter was a half-cent lower and Class III futures for the next six months declined an average 22 cents per hundredweight in response to Tuesday’s World Agricultural Supply and Demand Estimates which put 2012 milk production at 201 billion pounds. Milk production continues to increase across the country especially in the East and Central regions. Dairy Market News reports processing capacity is being stretched nationwide to handle the production. The heavy cheese production is putting more whey on the market pressuring an already weak powder market.
Packaged fluid milk sales in February totaled 4.3 billion pounds, 0.2 percent above February of last year however if you take out the extra day for Leap Year, it comes out 3.4 percent lower than a year ago. While conventional fluid milk sales were 0.2 percent lower for the month, organic milk sales increased 11.2 percent compared to February of 2011.
The European milk quota year ended on March 31st and it looks like Germany and Austria surpassed quota and a few other countries were right-about on the line. Handlers report there was really no evidence of producers holding back at the end in an effort to stay under quota.