Market News

Milk futures higher on lower USDA production estimate

Class III milk futures at the Chicago Mercantile Exchange were supported by the USDA’s lower 2017 production estimate. May was up $.03 at $15.55, June was $.22 higher at $16.09, July was up $.19 at $16.49, and August was $.15 higher at $16.84.

Cash cheese blocks were $.01 higher at $1.60. Three loads were sold, two at $1.59 and one $1.60. The last unfilled bid was on one load at $1.59. The last uncovered offer was for one load at $1.61. Barrels held at $1.46. The last unfilled bid was on one load at $1.45. The last uncovered offer was for one load at $1.46.

Butter was up $.025 at $2.13. Two loads were sold, one at $2.12 and one at $2.13. The last unfilled bid was on one load at $2.12. The last uncovered offer was for one load at $2.14.

Nonfat dry milk was unchanged at $.8575. Two loads were sold, one at $.86 and one at $.8575. The last unfilled bid was on one load at $.8575. The last uncovered offer was for one load at $.865.

USDA has lowered its 2017 milk production outlook, citing a lower per cow yield. Production was down 400 million pounds from April at 216.9 billion, with the annual peak expected to be in the second quarter. 2018 production is pegged at 222 billion pounds.

The all milk price for this year is seen at $17.35 to $17.85 per hundredweight, down $.05 on the month, with Class III at $16.10 to $16.60 and Class IV at $14.35 to $14.95. The 2018 all price is estimated at $17.55 to $18.55 per hundredweight with Class III at $16.40 to $17.40 and Class IV at $14.40 to $15.50.

The projected cheese and dry whey prices for 2017 were unchanged, at $1.60 to $1.65 and $.49 to $.52 per pound, respectively, while butter was a little lower at $.875 to $.915 and nonfat dry milk was a little higher at $.875 to $.915. For 2018, the cheese price is estimated at $1.64 to $1.74 per pound with butter at $2.045 to $2.175, with nonfat dry milk at $.915 to $.985 and dry whey at $.475 to $.505.

The USDA says cash butter for the week ending May 6th averaged $2.11 per pound, up $.017 on the week. 40 pound blocks of cheddar were pegged at $1.53, $.011 higher. 500 pound barrels averaged $1.46, down $.007. Dry whey came out at $.517, $.009 lower. Nonfat dry milk averaged $.863, up $.016.

According to HighGround Dairy, milk production in the United Kingdom, for the week ending April 22nd, was up 2.5%, while production in Germany, for the week ending April 23rd was down 4.1%, and production in France, for the week ending April 30th, was 2.6% lower.