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USDA prices

Cheese production is 'robust' this week, reports USDA

April 27, 2012
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Butter prices dipped under the $1.40 level for the first time since February 2012, reports Dairy Market News, Fitchburg, Wis. Cheese production across the country is robust and fluid milk processors are operating plants on extended schedules. Nonfat dry milk prices declined as the market tone moved weaker, undercut by strong production in all regions of the country, according to the U.S. Department of Agriculture.

BUTTER HIGHLIGHTS. The CME Group cash butter price dipped under the $1.40 level for the first time since February 2010 and closed the week at $1.3600. This weekly close compares to $1.4175 last Friday, $1.5225 a month ago, and $2.0150 a year ago. Butter producers and handlers are indicating that buying interest is fair at best with most buyers cautious with their purchases and procuring for near term needs. Retailers are stating that butter feature activity has slowed significantly since the recent holiday period and overall butter demand is typical for this time of the year. Food service buyers are reporting fairly steady needs as traffic flow through restaurants is holding steady at fairly good levels.

CHEESE HIGHLIGHTS. Cheese production across the country is robust. Milk supplies are up and much of that production is finding its way to cheese plants. Excess milk volumes are often being discounted to encourage additional cheese manufacturing. Cheese inventories are building and this is reflected in the March Cold Storage report. NASS reported stocks of natural cheese in cold storage, 2% above the previous month’s volume. At the CME Group this week, cheese trading was active. Barrel prices worked lower through the week, while blocks inched higher. Sales activity was heavy, with blocks trading at their highest volume of the year. Barrels closed the week lower from last Friday at $1.4350, while blocks were higher for the week at $1.5350.

FLUID MILK. Milk production showed signs of leveling off at or near the seasonal peak in the Southeast and Mid-Atlantic regions. Arizona had marginally lower production, caused by the recent heat. California’s milk production was uneven; Florida was steady with the rest of the nation showing various degrees of increased milk production. Coops in the Pacific Northwest are warning dairy producers of possible penalties, like those imposed in California, for excess milk above their established bases. Processors across the nation are operating plants on extended schedules. Demand for cream from ice cream plants has registered only slight improvement.

DRY PRODUCTS. Nonfat dry milk prices declined as the market tone moved weaker, undercut by strong production in all regions of the country. Domestic buying interest is light with spot transactions tied to price and near term need. Export interest is declining with new business slow to develop. Dry whole milk prices moved marginally higher in a lightly tested market. Dry whey prices moved lower this week as inventories continue to build alongside active cheese production. The increased supplies of available whey are giving buyers a chance to shop around for the best price. Lactose prices on the mostly series are unchanged and the market tone is steady.

Read the complete Dairy Market News report for the week of April 23 to 27.

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