Cash cheese mixed, butter higher

Cash cheese barrels slipped 3.75 cents on the Chicago Mercantile Exchange on Wednesday while blocks increased another penny.  A busy day with 9 loads sold, 6 barrels and 3 blocks.  Butter gained another 4 cents on 9 sales.  The monthly Cold Storage Report on Tuesday showing that butter stocks continue to decline and are just over half what they were a year ago.

Dairy Market News says cheese supplies are so tight in the Midwest, some manufacturers are telling customers they will have to reduce their orders for August deliveries.  There is no consensus reason as to why supplies are that tight, some say heavier demand, some say less cheese being made.  Milk supplies are flat-to-reduced and spot loads are hard to come by.

In the Northeast the cheese factories says milk intakes are strong but components are down.  Demand for cheese is steady to increasing.  Out west milk production is declining as the hot weather sets-in.  Domestic demand is good but export demand has slowed.


National Dairy Products Sales Report for the week ending July 19th; cash cheese blocks decreased 2.2 cents to average $2.01, barrels were 1.5 cents lower at $2.04.  Butter increased 5.6 cents from the previous week to average $2.37 per pound, nonfat dry milk 1.4 cents lower at $1.87 and dry whey decreased 0.1 cent at 68.7 cents per pound.


The Advanced Base Class I price for August is $23.87 up 85 cents from the previous month.  Base Skim Milk Price for Class I for August is $15.22 per hundredweight up 21 cents from the previous month.

Agropur buying Davisco

Canada’s largest dairy cooperative, Agropur is buying Davisco Foods International based in Minnesota.  The deal will double Agropur’s U.S. processing operations and increase its global milk intake by 50 percent.  Target close date is August 1st, 2014.

Headquartered in Le Sueur, Minnesota, the family-owned Davisco has 900 employees and processes 3.8 billion pounds of milk a year.  The acquisition includes Davisco cheese factories in Le Sueur, Lake Norden, South Dakota and Jerome, Idaho.  The ingredients plant at Nicollet, Minnesota, sales offices in Eden Prairie, Minnesota, Shanghai, Singapore and Geneva Switzerland along with distribution centers in Rotterdam, the Netherlands and Tianjin, China.

With headquarters in Quebec, Agropur Cooperative currently has sales of $3.8 billion annually handling more than 7.4 billion pounds of milk from 3,554 dairy producers in 32 plants across Canada and the U.S.  The company has cheese plants in Hull, Iowa; Preston, Minnesota and La Crosse, Little Chute, Luxemburg and Weyauwega, Wisconsin.

Earlier this month Agropur:

  • Reached an agreement to acquire the dairy and food distribution assets of Northumberland Dairy Cooperative of New Brunswick.  That co-op has annual sales of $67 million.
  • Purchased four Canadian dairy plants in Alberta, Manitoba and British Columbia from Sobey’s with over $400 million in annual revenues.

Butter and cheese stocks down

Monthly Cold Storage Report from USDA shows total cheese in the nation’s warehouses at the end of June 1.06 billion pounds.  Unchanged from the end of May but down 8 percent from June of 2013.  American cheese stocks totaled 657 million pounds, also unchanged from May and down 7 percent from a year ago.

Butter in cold storage totaled 186 million pounds on June 30th, down 3 percent from May and 42 percent less than on June 30, 2013.



U.S. milk production up 1.9% in June

U.S. milk production in June totaled 17.2 billion pounds up 1.9 percent from June of last year.  Production per cow averaged 1,863 and the dairy herd had 9.27 million cows.  Cow numbers not available for June of 2013 due to budget cuts.

Production in the 23 major dairy states up 2 percent from a year ago at 16.2 billion pounds.  There were 11,000 more cows in those states compared to last June and production per cow was 1,888; the highest production per cow for June since they started keeping track of this in 2003.  Of the 23 major dairy states, all but Ohio had an increase in production compared to a year ago.

For the first time this year, Wisconsin milk production was above year-ago levels at 2.3 billion pounds up 0.6 percent.  1.26 million cows produced an average 1,825 pounds of milk.  California milk production increased 1.7 percent to 3.5 billion pounds.  1.8 million cows in the Golden State produced an average 1,995 pounds of milk.

May milk production estimate was revised 25 million pounds higher to 18 billion pounds up 1.5 percent from May of 2013.

For the April-through-June quarter, U.S. milk production totaled 52.8 billion pounds up 1.6 percent compared to the second quarter of 2013.  The dairy herd averaged 9.25 million head up 39,000 from a year ago.

Read the full NASS report here:

Strong finish to the week in dairy markets

Cash cheese and butter increased again on Friday on the Chicago Mercantile Exchange.  Dairy Market News says milk production has slowed across the country from a combination of hot weather and seasonal declines.  Cheese plants report spot loads are available but hard to find.  Some are using condensed skim to increase vat yields.

It was a very busy week at the CME; 21 loads of barrels sold and 19 loads of blocks.  Barrels increased 8.25 cents, blocks added 5.75 cents, and butter is up 9.75 cents while nonfat dry milk decreased 4 cents.  Class III futures for July up 11 cents on the week, August up 63 cents, September is 48 cents higher and January is unchanged.

Another day, another increase in cheese and butter

Cash cheese barrels and blocks each adding 2 cents per pound and butter jumped 6 cents on the Chicago Mercantile Exchange on Thursday.  Despite declining global prices, the monthly Livestock, Dairy and Poultry Outlook from USDA says U.S. dairy market continues to be pushed by strong demand, tight supplies and no real indication that milk production is increasing dramatically.  In fact, the latest World Agricultural Supply and Demand Estimate reduced the projected milk production for this year slightly.  Of particular note, through May, the milk increases have been in the western states while the Midwest was seeing lower production compared to a year ago due to poor forage.  That is expected to change as this year’s first crop was very good.

The high milk prices and low feed prices are expected to spur an increase in cow numbers.  The U.S. herd is forecast to total more than 9.2 million head this year and more than 9.3 million next year.  Production per cow is expected to be 22,230 this year increasing to 22,730 in 2015.

Cheese prices a little higher

Another day of higher cheese prices on the Chicago Mercantile Exchange on Wednesday.  Barrels increased three-quarter-cent to $2.04 and blocks added a quarter-cent to $2.0025 per pound.  Butter and nonfat dry milk were unchanged but Class III futures increased in concert with the cheese prices.

Dairy Market News says milk production in the Central U.S. is past peak.  Some cheese plants are reduced schedules slightly to reflect milk availability.  Some are using condensed skim in the vats to make-up for lower component content.  Spot loads of milk are anywhere from $1.00 over to $1.00 under class price.  15 loads of barrels and 29 loads of blocks were sold on the Chicago Mercantile Exchange last week, the first three days of this week have seen 11 cars of barrels and 14 loads of blocks sold.

National Dairy Products Sales Report for the week ending July 12th: cash cheese blocks averaged $2.03 per pound down 0.9 cents, blocks increased 0.2 cents to average $2.05.  Butter up 3 cents to $2.31, nonfat dry milk averaged $1.88 up 2.6 cents and dry whey decreased 0.7 cents to average 68.8 cents per pound.

Dairy demand remains strong

Cash cheese, butter and Class III prices continued to move higher on the Chicago Mercantile Exchange on Monday.  Barrels closed at $1.9975 and blocks went back over the $2 mark at $2.005 per pound.

Cheese was slipping a bit last week until  word got out that milk supplies had tightened after the July 4th holiday weekend to the point cheese plants are not running at full capacity.  Add to that when at the end of the week the latest World Agricultural Supply and Demand Estimates from USDA reduced the 2014 total milk production as U.S. milk production is just not increasing as rapidly as had been expected.

Continued strength in the diary markets as global demand is just not backing-off even at higher prices and U.S. production is just not increasing at the pace many thought it would.  Daily Dairy Report notes U.S. exports of ice cream in May were a record 8,133 metric tons up more than 8 percent from a year ago.  Cream is at a premium thanks to ice cream, Greek yogurt and various dips.  That demand has cut into butter production as butter makers find it more profitable to sell the cream rather than make butter.  Meanwhile, the higher butter prices have not dampened demand at all.

Scooping ice cream for a cause

Patrons of the American Dairy Association of Indiana's 25th Annual Ice Cream Social to raise money for Girl Scouts.For the second year, the American Dairy Association of Indiana scooped ice cream sundaes on Monument Circle to raise money for Girls Scouts of Central Indiana.

Deb Osza, general manager of ADAI says the ice cream social is a great way to spread the message of Indiana’s dairy industry.  “The Ice Cream social allows us to connect to consumers,” she says.  “We bring cattle here – so there’s a big Holstein cow, along with a Brown Swiss and Holstein calf.  It allows people to see the cows and connect the dots between dairy-farming how that produces milk and that we make ice cream out of milk. And all of that is done right here in Indiana.”

Osza tells Brownfield, Indiana’s dairy industry is vibrant.  “We’re producing high quality milk here in Indiana,” she says.  “We’re making fabulous ice cream and it’s all happening right here.  It’s local food – being made by your local farmers.”

This is the 25th year for the Ice Cream Social.  In total, celebrity scoopers dished over 2,000 sundaes and raised $6,800 for the Girl Scouts of Central Indiana.

Next year – ADAI will scoop sundaes to raise money for Girls’ Inc.

AUDIO: Deb Osza, American Dairy Association of Indiana (3:00mp3)

Concerns shared about Farm Bill implementation

USDA Undersecretary Michael Scuse heard concerns from lawmakers this week at a House Ag subcommittee hearing on Farm Bill implementation.

South Dakota Congresswoman Kristi Noem told Scuse that farmers need adequate time to reach conservation compliance if they make an honest mistake, “I know producers out there many times are busy, they’ve got a lot of acres they’re covering.  They may unknowingly make a change and to make it whole before they lose that subsidy, I think, would be the right thing to do.”

Scuse said farmers will have the ability to come into compliance after the June 1st, 2015 deadline so they don’t lose the subsidy.  That time period, he says, will be in the final rule.

Texas Congressman Mike Conaway asked for the USDA to implement the Actual Production History (APH) adjustment for crops in 2015 rather than 2016 as planned.  He said states like Texas, Oklahoma, New Mexico and Colorado and other states are suffering through an on-going drought and need relief.

Scuse said that would be a huge undertaking to get the APH before then but he would come up with potential timelines and consider partial implementation for those areas. The APH is used by the Federal Crop Insurance Corporation to determine “normal” production levels for producers.

And, Ranking House Ag Committee Member Collin Peterson told Scuse the Farm Service Agency needs to reach out to producers about the new dairy program sooner rather than later.