Milk futures higher, cash dairy mixed
Class III milk futures at the Chicago Mercantile Exchange were up, buying back some of the losses from the last couple of sessions. June was up $.12 at $16.32, July was $.15 higher at $16.77, August was up $.14 at $17.15, and September was $.11 higher at $17.27.
Cash cheese blocks were up $.0175 at $1.67. Four loads were sold, including one at $1.67. The last unfilled bid was on one load at $1.6525. The last uncovered offer was for one load at $1.67. Barrels were unchanged at $1.47. Three loads were sold, including two at $1.47. The last unfilled bid was on one load at $1.46. The last uncovered offer was for one load at $1.47.
Butter was $.025 lower at $2.375. Six loads were sold, including two at $2.375. The last unfilled bid was on one load at $2.34. The last uncovered offer was for one load at $2.3775.
Nonfat dry milk was $.02 higher at $.915. Four loads were sold, including one at $.915. The last unfilled bid was on two loads $.9125. The last uncovered offer was for five loads at $.95.
The USDA says milk production was mostly steady to higher over the past week. Midwestern production continues to be strong, with parts of the Central region near flush peak and others maybe about a month away. Bottling demand is mixed. Midwestern and Southeastern cheese plants are taking in surplus milk with Class III spot prices $3 to $6 under Class. That more than ample supply of milk is keeping cheese production at high levels, with the USDA reporting milk management is a concern for some producers. Cheese barrel supplies are long and blocks are balanced to long with some Midwestern producers expressing concern about the spread between blocks and barrels. Processed cheese orders in the Midwest are trending higher. Butter prices were mixed, with bulk prices in the Central region $.02 to $.07 above the market. Production is generally steady and there’s plenty of cream available, even if ice cream manufacturing demand is growing. Butter inventories are called controllable to long. At the national retail level, conventional dairy ads were down 14%, while organic ads were up $16. The spread between organic and conventional half gallons of milk is $2.11, in favor of organic.
The USDA’s attaché in New Zealand says 2017 milk production should be a new all-time high, passing the record set in 2014. Production is projected at 21.9 million metric tons, up 3.5% from the attaché’s initial estimate, thanks to a bigger than anticipated herd, good weather, and “optimal” pasture conditions. Total dairy production is expected to be 3.14 million metric tons with exports, including liquid milk, at 3.34 million metric tons, up 1.5% from 2016.
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