Market News

A pretty good week in the dairy markets

Cash cheese barrels and butter held steady on the Chicago Mercantile Exchange on Friday, blocks and nonfat dry milk increased 1.5 cents each. Class III futures drifted lower.

For the week, cash cheese barrels lost a quarter-cent, blocks increased 4.75 cents, butter jumped 30.5 cents and nonfat dry milk gained 9.5 cents. August Class III contract lost 2 cents, September increased 32 cents, October added 39 cents and the February contract gained 26 cents.

Monthly Cold Storage Report from USDA shows total cheese in the nation’s warehouses at the end of July was 1.16 billion pounds up 2 percent from the end of June and 10 percent above a year ago. American-type cheese stocks totaled 698 million pounds also up 2 percent for the month and 6 percent above July of 2014.

Butter in cold storage at the end of July totaled 254.5 million pounds down 1 percent from the end of June but 41 percent above a year ago.

Milk production is lower across the country while demand for Class I is picking up as schools reopen. Cream supplies are tight. Dairy Market News says demand for butter is strong bug orders from retailers and food service is expected to taper-off after Labor Day. However, some are starting to look at building inventories for the holidays.

The low global dairy prices are causing increased interest in selling to the United States. European cheese makers are putting more milk into cheese, especially hard cheese for export to the U.S.

During June 3.8 billion pounds of packaged fluid milk is estimated to have been sold in the U.S. That is 1.4 percent above June of last year. Sales of conventional fluid milk products were up 1.5 percent while organic milk product sales were unchanged from a year ago. The national weighted average price for a half-gallon of organic milk was $3.75 last week compared to $2.14 for a half-gallon of conventional milk. That puts the organic-to-conventional spread at $1.61 compared to $1.49 the previous week.