A little rebound to close out the week in the cash cheese markets at the Chicago Mercantile Exchange. Barrels increased 1.25 cents and blocks added 2 cents. Reports of tightening milk supplies for cheese makers combined with USDA reducing their milk production estimate for 2014 giving the markets a little push.
For the week, cash cheese barrels and blocks gained a quarter-cent each, butter lost 1.25 cents, nonfat dry milk slipped 4 cents. Class III futures for August declined 12 cents, September fell 47 cents and January dropped 34 cents.
Citing slower-than-expected growth in production per cow, the USDA Outlook Board reduced their milk production forecast for 2014 by 200,000 pounds to 205.9 billion pounds. Milk production through May is running 1.4 percent ahead of last year, not enough of an increase to make the 206.1 billion pounds the Ag Department was predicting.
The monthly World Agricultural Supply and Demand Estimates raised 2015 production 300,000 pounds to 212.4 billion pounds. Higher milk prices and low feed prices are expected to support increased cow numbers and production per cow for the rest of this year and into the next.
The average cheese price for 2014 increased a little, now projected to be between $2.03 and $2.06. The projected butter price was raised 8 to 9 cents from last month’s estimate now pegged at between $1.965 and $2.025 per pound. Nonfat dry milk was increased slightly while dry whey was unchanged.
As a result, the Class III price estimate was raised 10 to 20 cents, projected to range from $21 to $21.30 and the Class IV price jumped 40 to 50 cents at $21.95 to $22.35 putting the all milk price at $23.25 to $23.55 for 2014 up 25 to 35 cents from last month’s estimate. The 2015 milk prices were unchanged from last month with all milk at $19.75 to $20.75 per hundredweight.
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