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Cash butter hits $3

Cash butter hit a record $3 on the Chicago Mercantile Exchange on Friday on one sale.  For the week, butter increased 15.5 cents per pound and 24.5 cents from two weeks ago.

Trade indications are butter from New Zealand and Australia is on its way to the United States.  Last Tuesday’s Global Dairy Trade Auction had butter at $2,753 a metric ton which is about $1.23 per pound.

Cash cheese barrels increased a half-cent on Friday and 2014 Class III futures responded accordingly.  October gained 57 cents to $23.35, November increased 34 cents to $20.67 and December added 16 cents to $19.45.  For the week, October gained 68 cents and November added 18 cents.  All of the 2015 contracts were a little lower on Friday.

The latest World Agricultural Supply and Demand Estimates from USDA raised the U.S. milk production estimate for 2014 citing increased production per cow.  Total milk production is predicted to be 206.3 billion pounds this year up 300 million from last month’s estimate and nearly 5 billion pounds above 2013.

The average price for cheese was raised 8.5 cents from August and is now projected at between $2.135 and $2.155 per pound this year.  Butter was raised 13 cents to between $2.17 and $2.21 for 2014.

At the same time, they lowered the dairy export forecasts for 2014 and 2015 as higher butter and cheese prices make those products less competitive on the world market.

Class III milk price estimate for 2014 was raised 90 cents, no projected to average between $22.15 and $22.35 per hundredweight.  The Class IV price slipped a nickel to between $22.30 and $22.60 this year.  That puts the all milk price at $23.80 to $24.00 for 2014, up 25 cents from last month’s estimate.  Most of the 2015 price estimates were increased slightly but remain significantly below 2014 prices.