Archive for Dairy Markets

Milk futures closed higher for the 3rd day in a row Thursday

At the Chicago Mercantile Exchange Class III milk futures closed higher Thursday for the 3rd day in a row. December milk up six cents at $13.77. January up four to $14.19. February seven cents higher at $14.65. March up six, closing at $15.09. April through July contracts three to eight cents higher Thursday. Class IV marked had very similar results. 

Barrels up $0.0175 at $1.2950. Two trades were made ranging from $1.2875 to $1.2950. Blocks were up $0.0475 at $1.3950. Butter closed down $0.001 at $2.1750. Dry whey up $0.0175 at $0.45. Nonfat dry milk $0.01 higher at $0.93.

Markets Erratic After News From China

At the Chicago Mercantile Exchange, Class III milk futures were mostly higher Wednesday, cash dairy closed mixed. Class III markets were higher as 1sthalf 2019 ranged from 7-14 cents higher. The 1sthalf 2019 average closed at $15.14 cents per cwt. December milk was unchanged at $13.71. The 2ndhalf ended at $16.39.  January 12 cents higher at $14.15. February up 16 at $14.58. March milk up 12 at $15.03. April through July settled 6 to 12 cents higher. The Class IV full year average settled at $15.89 per cwt. 

Barrels closed $0.0225 higher at $1.2775. Five trades were made, ranging from $1.26 to $1.2775. Blocks were up $0.0175 at $1.3475. Butter closed down $0.0125 at $2.1850. Dry whey unchanged Wednesday at $0.4325. Two trades were made. Nonfat dry milk was down $0.0050 at $0.92. Six trades made, ranging from $0.91 to $0.92.

Milk Price Increase in California as a Result of New Federal Order

This past week  California’s Federal Order No. 51 with the Class III price coming in at $14.44/cwt and Class IV at $15.06/cwt. Under the old system, the California 4b cheese milk prices for November would have been $13.55/cwt.  The Class I price for Los Angeles was announced at $17.82, which includes a $2.10 Class I Differential and a 20¢ processor assessment. The new Federal Milk Marketing Order in California appears to be doing what proponents hoped it would do: Bump milk prices. How much more California dairy farmers will see in their milk check remains to be seen. That final blend price depends on the utilization percentage of each of the four classes of milk, among other factors.

 

Australia’s $2 million milk price index ‘useless’

AUSTRALIA’S $2 million milk price index is a flop, with just 38 farmers lodging their details on the site since it was launched in July.

The index has been plagued with problems since the federal Coalition Government promised to deliver it as part of a $579 million dairy support package in May 2016.

At the time, Prime Minister Malcolm Turnbull said the Coalition would “consult with the industry on the design of the index that would provide dairy farmers with valuable information for use in supply negotiations with processors and to assist in following international price trends”.

It took 18 months for the federal Department of Agriculture to award a cut-down $1.19 million contract to the highly qualified Webber Quantitative Consulting team to develop the index.

But the Webber team was then dumped within 24 hours of presenting their index proposal to industry stakeholders on December 14 last year.

One member of the Webber team told The Weekly Times the proposal would have “exposed just how inefficient Australian processors were compared to the rest of the world.”

Webber Consulting members were then gagged from talking publicly on the project, but The Weekly Times understands the industry stakeholders Australian Dairy Farmers and Australian Dairy Products Federation lobbied the Federal Government to dump Webber and its index.

The department then took over the development of the index, which was finally launched by Agriculture Minister David Littleproud in July this year, based on a voluntary survey of farmers’ milk prices and a copy of other global dairy commodity price indices.

The farmer survey was to form the basis of what Mr Littleproud called a Retrospective Farmgate Milk Price Index.

But six months on, the department has revealed the index of farmgate prices has been a flop. A spokesman said data submissions had been received from only 38 farmers — “not enough to publish a farmgate figure for any region”.

Dairy Connect president Graham Forbes said it was a tragedy Webber was not able to develop the index.

“What we’ve got now is useless,” Mr Forbes said.

The Regional, Retrospective Farmgate Milk Price Index relies on farmers providing price data via an online form to give a picture of actual prices received in each of Australia’s eight dairy regions.

 

Source: The Weekly Times

Progress in the Discussions with China Drive Milk Markets Higher In Chicago Tuesday

A series of tweets early in the day by President Trump announcing progress in the discussion with China. Later an announcement came out that China would reduce the tariff on automobiles imported to China from the United States from 40%, as it stands now, back to 15%. And while nothing was said about agricultural products the hope of progress helped milk prices climb.

At the Chicago Mercantile Exchange Tuesday Class III milk futures turned higher partly because of optimism for 2018 Farm Bill dairy policy.   December up seven cents at $13.72.  Class III futures rose more than 20 cents in the first quarter with the first half average rising 19 cents to $15.04.  January 24 cents higher at $14.05. February up 20 cents at $14.42. March up 22 cents at $14.96. Class IV markets saw similar activity, rising six cents in its average for the first half of 2019 to finish at $15.37.

Barrels were up $0.0450 at $1.2525. Fourteen trades were made ranging from $1.2150 and $1.2225. Blocks were unchanged at $1.33. One trade was made at that price. Dry whey was down $0.0050 at $0.4325. Two trades were made at $0.4375 and $0.4325. Butter was down $0.0025 at $2.1975. Nonfat dry milk was up $0.0275 at $0.9250. Four trades were made ranging from $0.90 to $0.9250.

Milk Futures Continue Downward Spiral in Chicago Monday

At the Chicago Mercantile Exchange Monday milk futures took another dive.  Class III milk futures began this week in the same fashion as they ended the last. December lost another 11 cents to $13.65 per cwt. January 17 cents lower at $13.81. February down 19 cents at $14.22. March down seven cents at $14.74. April through next November contracts closed two cents lower to three cents higher.

Barrels were down $0.0150 at $1.2075. Five trades were made ranging from $1.2075 and $1.2150. Blocks were down $0.02 at $1.33. Two trades were made at $1.33 and $1.3375. Dry whey remained unchanged at $0.4375. Butter was down $0.0075 at $2.20. One trade was made at that price. Nonfat dry milk was up $0.0125 at $0.8975. Four trades were made ranging from $0.8950 to $0.8975.

Fonterra slashes milk price forecast

Fonterra cut its earnings forecast to 25 cents-30 cents a share and its dividend to 15c-20c in...Fonterra has cut its farmgate milk price forecast for 2018/19 to $6.00 to 6.30 kg of milk solids from a previous range of $6.25 to $6.50/kg, and has confirmed that its Tip Top ice cream business is up for sale.

The co-op, which is part-way through a stock take of its operations and assets, said in a market update for the first quarter of its financial year that it planned to go to full ownership of its Darnum, Victoria, milk powder facility and that its Tip Top icecream was up for sale.

Fonterra forecast earnings per share of 25 to 35 cents a share for the full year.

The co-op’s first-quarter revenue came to $3.8 billion, down 4 per cent.

Fonterra chairman John Monaghan says the revision in the milk price was due to the global milk supply remaining stronger relative to demand, which has driven a downward trend on the GlobalDairyTrade (GDT) index since May.

“Since our October milk price update, production from Europe has flattened off the back of dry weather and rising feed costs. US milk volumes are still forecast to be up one per cent for the year,” Monaghan said in a statement.

Fonterra said it was maintaining our forecast collections at 1,550 million kgMS.

Weather agency Niwa is saying its likely we will see an abnormal El Nino weather pattern over summer and this could impact our farmers’ milk production, he said.

“Demand from China and Asia remains strong. However, we are seeing geopolitical disruption impacting demand from countries that traditionally buy a lot of fat products from us,” he said.

Fonterra’s first quarter gross margin of $646 million was down $14 million compared to the same period last year and up slightly on a percentage basis from 16.6 per cent to 17 per cent.

The Co-op’s Ingredients business, despite lower sales volumes, performed solidly during the quarter with a gross margin of $273 million, up $28 million on last year.

The Consumer business also performed well with a gross margin of $310 million, up $10 million on last year, and volumes were up five per cent.

Chief executive Miles Hurrell says the Co-op generally makes a smaller proportion of its total annual sales in the first quarter due to the seasonal nature of our milk supply.

“This means the results from Q1 do not give much insight into the Co-op’s expected earnings performance for the full year. It does, however, put the spotlight on where we have challenges that we need to address,” Hurrell said.

Commenting on the board led portfolio review, Monaghan said there had been but that it would take time to flow through into financial results.

“We have reached an agreement in principle with Beingmate that will see us return to full ownership of the Darnum plant by 31 December 2018 and enter into a multi-year agreement for Beingmate to purchase ingredients from us,” he said.

“We are also looking at our ongoing ownership of Tip Top and have appointed FNZC as our external advisor to work with us as we consider a range of options,” he said.

“We want to see Tip Top remain a New Zealand based business and this is being factored into our options.”

“While performing well, Tip Top is our only ice cream business and has reached maturity as an investment for us.

“To take it to its next phase successfully will require a level of investment beyond what we are willing to make,” he said.

Fonterra said it was moving quickly to meet our commitment to reducing our debt levels by $800 million by the end of the financial year.

“This requires both improved performance from last year and the divestment of assets,” Fonterra said.

Source: odt.co.nz

Dairy markets continue to drop in Chicago Thursday

At the Chicago Mercantile Exchange Class III milk futures closed lower Thursday somewhat pressed by a lack of movement on the USMCA and mixed tone of international markets. December down a dime at $13.78.  Class III markets moved lower with the first half of 2019’s average slipping below $15 to a price of $14.95 down 13 cents from Wednesday.  January 19 cents lower at $14.01. February down 14 cents at $14.47. March down 12 cents at $14.85. April through next November contracts closed five to 12 cents lower. Class IV markets in that same period dropped eight cents to $15.31.

Growing weakness in barrel cheddar translated to a four cent loss in Thursday’s CME spot session where two loads traded hands and the final price stopped at $1.2425. Blocks were unchanged at $1.35. Two trades were made at $1.2650 and $1.28. Dry whey closed down $0.0075 at $0.4375. Five trades were made ranging from $0.4375 to $4425. Butter was up $0.0225 at $2.25. Four trades were made ranging from $2.2275 to $2.25. Weakness was observed elsewhere. In Grade A nonfat dry milk prices dropped 1.75 cents after two loads moved from seller to buyer, it’s final price 89.25 cent.

Dairy prices up for the first time since May

Dairy prices have risen for the first time in six months in the overnight global dairy trade auction.

The average price was up 2.2 percent to $US2819 a tonne.

It was the first rise since May and lifts prices off two-year lows.

The price for whole milk powder, which has a key influence on local farmer payouts, rose 2.5 percent to $US2667 a tonne.

Prices for all other products offered rose except for cheese.

The amount sold was sharply lower which may have helped to lift prices.

“There was likely increased demand for WMP (whole milk powder) given the lower volumes on offer compared with the previous event,” NZX dairy analyst Amy Castleton said.

Fonterra is due to release a first quarter trading update on Thursday with the prospect that it will lower its farmgate milk payout forecast from the current range of $6.25 to $6.50 a kilo of milk solids.

The dairy co-operative is reviewing its entire business and has said no options are off the table including the sale of assets, which has led to speculation about the future of its investment in the troubled Chinese firm Beingmate, as well as assets in Chile, Brazil, local ice-cream maker, Tip Top.

 

Source: Radio NZ

Dairy Markets Fall Again in Chicago Wednesday

At the Chicago Mercantile Exchange dairy markets were mostly lower again on  Wednesday. Class IIII markets were also lower on Wednesday showing losses of 3 cents in December at $13.86 per cwt and losses of anywhere from 4 to 14 cents from January to May in 2019. January was down $.11 to $14.20. February was down $.12 to $14.61.  March was down $.08 at $14.97. The milk futures from April through next November ranged from zero to eight cents lower. Class IV markets were mainly unchanged on the day with a few months in 2019 showing minimal losses.

Dry whey was up $.0125 at  $.4450 cents per pound. No sales were recorded. Forty-pound blocks were down $.0100 at $1.35 per pound.  No sales were recorded. Two trades were made at that price. Barrels were up $.0025 at $1.2825 per pound.  One trade was made at $1.2850. Grade AA Butter was down $.0050 at $2.2275 per pound.  No sales were recorded. Nonfat dry milk was down $.0050 at $.91 per pound.  One trade was made at that price.

Markets React Negatively in Chicago Tuesday To Higher GDT Auction

At the Chicago Mercantile Exchange, the dairy markets were mostly lower on Tuesday, but the Global Dairy Trade index went up. GDT event 225 was released on Tuesday and was mainly higher. The leader of the index, butter milk powder, rose 16.9% to $1.34 per pound. Anhydrous milk fat rose 3.9% to $2.15 per pound. Butter rose 2.7% to $1.65 per pound. Whole milk powder followed as it rose 2.5% to $1.20 per pound. Cheddar was the only product with losses as it fell 2.2% to $1.44 per pound. The index as a whole was increased by 2.2%. In Chicago, theClass III markets were mainly lower on Tuesday with the November contract expiring at $14.47 per cwt. December fell 11 cents to $13.89 per cwt. 2019 Class III markets were mainly lower showing losses from 3 to 27 cents with most action in the front months. The first and second half averages are at $15.15 and $16. January was down $.27 to $14.31. February was down $.15 to $14.73.  March was down $.10 at $15.05. The milk futures from April through next November ranged from five cents lower to two cents higher. 

Dry whey was up $.0025 at  $.4325 cents per pound. Three trades were recorded at $.43. Forty-pound blocks were unchanged at $1.36 per pound.  One trade was recorded at that price. Barrels were unchanged at $1.28 per pound.  Two sales were recorded at $1.28 and $1.29. Grade AA Butter was down $.0100 at $2.2325 per pound.  No sales were recorded. Nonfat dry milk was unchanged at $.9150 per pound.  No sales were recorded.

Milk Futures Higher On China News Monday in Chicago

At the Chicago Mercantile Exchange class III milk futures closed higher Monday supported by trade optimism. December up two cents at $14.  By the end of the session, Class III milk was up 14 cents in the average for the first half of 2019, it finds itself now at $15.27 per cwt. January 18 cents higher at $14.58. February up 16 cents at $14.88. March up 16 cents at $15.15. The second half of the year, very close to where it has been in recent weeks, up just three cents at $16.34 per cwt.  

Blocks remained unchanged at $1.36. Barrels were down $0.0350 at $1.28. One trade was made at that price. Dry whey closed down $0.0050 at $0.43. Five trades were made ranging from $0.43 to $4350. Butter was unchanged at $2.2425. Nonfat dry milk was up $0.01 at $0.9150. Two trades were made at $0.9125 and $0.9250.

Class III Futures Mostly Higher on Thursday in Chicago

At the Chicago Mercantile Exchange class III milk futures closed higher Thursday as traders buy back oversold positions. 2018 Class III markets lost two cents in November to $14.47 while December rose 11 cents to $14.17. 2019 Class III markets were green across the board showing gains from 1 to 12 cents depending on the month. The 2019 first half and second half average are now at $15.12 and $16.28, respectively. January 12 cents higher at $14.43. February up three cents at $14.71. March through next October contracts closed two to six cents higher.

Blocks closed unchanged at $1.36. Seven trades were made ranging from $1.35 to 41.36. Barrels were up $0.07 at $1.31. Two trades were made at that price. Dry whey closed down $0.0025 at $0.4250. One trade was made at $0.4275. Butter was up $0.0225 at $2.2225. Nonfat dry milk was down $0.0075 at $0.9025. Two trades were made at $0.9025 and $0.9050.

Milk Futures Higher, Cash and Dairy Mixed in Chicago Wednesday

At the Chicago Mercantile Exchange milk futures were higher and the cash dairy markets were mixed Wednesday. December traded 2 cents higher to $14.06 per cwt. January through December 2019 ranged from a penny higher to 10 cents stronger. The first half 2019 average now stands at $15.06 per cwt while the full year is offering $15.66. Class IV markets were unchanged to 9 cents higher.

Dry whey was unchanged at  $.4275 cents per pound. No sales were recorded. Forty-pound blocks were up $.0500 at $1.36 per pound.  No sales were recorded. Barrels were down $.0100 at $1.24 per pound.  One carload sold at that price. Grade AA Butter was down $.0150 at $2.20 per pound.  One carload sold at that price. Nonfat dry milk was unchanged at $.91 per pound.  No sales were recorded.

Dairy Markets Mixed Tuesday in Chicago

At the Chicago Mercantile Exchange the dairy markets were mixed Tuesday.  November Class Three milk was up $.01 at $14.49.   December was down $.05 at $14.04. Class III markets held mostly to Monday’s values with the first half of 2019 calendar average rising a penny to $15 per cwt. January was up $.02 to $14.24.  February was up $.01 to $14.58. The milk futures from March through next October ranged from two cents higher to six cents lower.  Class IV markets remained unchanged in the first half of 2019’s average, while the second half of 2019 rose 2 cents to $16.24.

Dry whey was up $.0075 at  $.4275 cents per pound. Seven  sales were made from $.4275 to $.43 Forty-pound blocks were up $.0050 at $1.3550 per pound.  No sales were recorded. Barrels were up $.0100 at $1.25 per pound.  One carload sold at that price. Grade AA Butter was down $.0150 at $2.2150 per pound.  No sales were recorded. Nonfat dry milk was up $.0050 at $.91 per pound.  Three carloads sold at that price.

US farmers benefit from Asia dairy demand

Retail milk prices are on the rise, as dairy farmers around the world try to meet Asia’s ever increasing demand for dairy.

US milk farmers have benefited as one their main competitors across the other side of the world, New Zealand, is still recovering from a drought which happened a year ago.

The BBC’s Mauricio Olmedo-Perez reports on New Zealand’s efforts to catch up.

 

Source: BBC

Milk futures continue to take hits and drop lower in Chicago

At the Chicago Mercantile Exchange class III milk futures closed mostly lower Monday. November closed unchanged at $14.48. December down 23 cents at $14.09.  2018 class III markets were down as well with losses anywhere from 2 to 24 cents from January to August.  January 24 cents lower at $14.22. February down 13 cents at $14.57. March through next October contracts closed seven cents lower to four cents higher. 2018 Class IV markets didn’t see much action as November was unchanged at $15.07 and December fell 2 cents to $14.48.

Blocks closed $0.0050 higher at $1.35. Barrels were unchanged at $1.24. Dry whey closed down $0.0050 at $0.42. Three trades were made ranging from $0.4150 to $0.42. Butter was down $0.05 at $2.23. Five trades were made ranging from $2.2075 to $2.23. Nonfat dry milk was up $0.0075 at $0.9050. Eleven trades were made ranging from $0.9050 to $0.9075.

Milk Futures and Cash Dairy Mostly Lower In Chicago Before Thanksgiving Holiday

At the Chicago Mercantile Exchange Class III milk futures closed to the lower side Wednesday ahead of the Thanksgiving Holiday and pressured somewhat by improving international prices.   November closed a penny higher at $14.48. December down 14 cents at $14.32. The average price of the first half of 2019 dropped 6 cents to $15.09 per cwt while the second half of next year’s calendar dropped 3 cents to $16.26.  January a dime lower at $14.46. February down six cents at $14.70. March through next October contracts closed two to seven cents lower.  Class IV followed a similar pattern with the first half dropping 6 cents as well to $15.27 per cwt while the second half of the year move a penny higher to close at $16.24.

Block cheese was 1/2 cent higher after three loads moved from seller to buyer to finish at $1.34 1/2 while barrels were down a penny closing at $1.24 after just a pair of loads were traded. Butter dropped 2 1/4 cents after four loads moved from seller to buyer. It finishes at $2.28 a pound while grade A nonfat dry milk rose a penny on 11 loads to finish at 89 cents. Dried whey saw seven loads trade hands, prices moved 1/2 cent higher and now finish at 42 1/2 cents.

Dairy markets will be closed Thursday and Friday for the Thanksgiving holiday.

Cropp’s Dairy Situation and Outlook, November 19, 2018

It looks like farm milk prices will end the year at a low level. The Class III price had peaked for the year at $16.09 in September, fell to $15.53 in October and will be around $14.55 for November with December about $14.70. The Class IV price peaked at $15.01 in October, will be around $15.10 for November and December. Class III will average about $14.70 for the year compared to $16.16 in 2017. This would be the lowest average Class III price for the past four years. Class IV will average about $14.20 compared to $15.16 last year. This would be the second lowest for the past four years with $13.17 the lowest for 2016.

The lower Class III and Class IV prices is the result of dairy product prices moving lower than was expected for this time of the year. Cheddar barrels were $1.42 per pound the start of October but declined ever since only being as high as $1.36 in November and is currently $1.2975. The 40-pound cheddar block price was $1.7475 per pound the beginning of October and has declined since only being as high as $1.4575 in November and currently is $1.41. The lower Class III price is also being driven by declining dry whey prices. Dry whey was $0.5750 per pound the beginning of October and has declined steadily since. The current price is $0.43 per pound. Butter averaged $2.26 per pound in October. For November butter has been as low as $2.1925 per pound and as has high as $2.33 per pound which is also the current price. Nonfat dry milk averaged $0.8691 in October, was $0.90 early November and is currently $0.8850. Hopefully, strong holiday sales of butter and cheese will push prices up some resulting in some improvement in both the projected December Class III and Class IV prices.

Butter and cheese prices normally don’t weaken like this as we approach the holiday season. So why the decline in prices? It is somewhat puzzling. Sales of fluid (beverage) milk continue its downward trend being 2.5% lower January through September. Butter and cheese are somewhat mixed but still are higher. Perhaps as prices fall buyers take a wait and see attitude to see how low prices may fall before increasing purchases for the upcoming holidays knowing that stocks are more than adequate to meet their needs. Latest stock data is for September 30th. Butter stocks were 10.6% higher than a year ago with American cheese stocks just 1.5% higher but total cheese stocks 4.5% higher. Also while September butter production was 0.1% lower than a year ago American cheese production was 3.9% higher with total cheese production 3.1% higher.

Dairy exports explain some of the weakness in dairy product prices except for butter. While September butterfat exports were 168% higher than a year ago cheese exports were down 9%, a 20 month low. Exports of cheese to U.S. largest market Mexico was down 10% and down 63% to China reflecting the effect of retaliatory tariffs by these two countries. Dry whey exports were down 6% mainly due to a 38% decline to China, U.S. largest market. Nonfat dry milk/skim milk powder exports remain strong being 30% higher than a year ago due to a 40% increase to Mexico. Mexico did not place retaliatory tariffs on nonfat dry milk.

The forecast is for higher milk prices in 2019, but not to the level dairy producers are hoping for. If current Class III futures hold the Class III price would average about a $1.20 higher than this year at $15.85. USDA is forecasting the Class III price to average $15.15 to $16.05. Current Class IV futures average $15.80 for the year about $1.60 higher than this year. USDA’s forecasts the Class IV price to average a little lower than this for the year at $14.35 to $15.35. There is a good probability that Class III prices could average higher starting in the low $15’s the start of the year, improving to the higher $15’s by the end of the second quarter and then moving into the $16’s reaching the higher $16’s for the last quarter. But, the level of milk production and dairy exports will be determining factors. 

USDA shows October milk production slowing which is good news for milk prices. October milk production was just 0.8% higher than a year ago compared to a 1.3% increase for September. Milk per cow as up 1.1% but milk cow numbers were down 43,000 head since January and 30,000 from a year ago. Unfortunately cow numbers are down from more than a more normal number of dairy producers exiting the industry, the result of four consecutive years of low milk prices. Compared to a year ago milk cow numbers were down 10,000 in California, 3,000 in New York, 9,000 in Pennsylvania, 6,000 in Michigan, 6,000 in Minnesota, 4,000 in Wisconsin, 3,000 in Illinois, 5,000 in Indiana, 10,000 in Ohio, 7,000 in Virginia and 6,000 in Florida. Yet there was herd expansions with cow numbers up 24,000 in Texas, 16,000 in Colorado, 9,000 in Kansas and 4,000 in South Dakota, all states with expanded milk plant capacity. 

Despite California’s fewer cows a strong increase in milk per cow of 3.7% netted 3.2% more milk. Increases in milk production some other key states were: Idaho 2.1%, Texas 7.5%, South Dakota +4.1%, Colorado 10.1%, Kansas 6.1%, and New York 1.0%. States with decreases in milk production were: Pennsylvania 3.8%, Michigan 1.0%, Minnesota 0.5%, Ohio 4.1%, Wisconsin 0.3%, Illinois 4.5%, Indiana 4.8%, Iowa 1.1%, Virginia 10.6% and Florida 5.5%. In summary there is relatively strong milk production growth in some Western states with little growth in the Northeast and Midwest and decreases in the Southeast.

USDA is forecasting a 1.4% increase in milk production next year from an average of 10,000 fewer milk cows being more than offset by 1.5% more milk per cow. The 1.5% more per cow maybe on the high side considering a projected 1.2% increase this year and the possible forage quality issues in the Northeast and Midwest this winter. 

USDA is forecasting a 6.7% decrease in dairy exports on a milkfat basis and a 2.2% decrease on a skim solids basis. While a decrease in dairy exports is not positive for milk prices a growth in milk production of less than 1.5% should still strengthen milk prices in 2019. Any improvement in exports and/or less milk production than now forecasted would push milk prices even higher.

Robert Cropp
racropp@wisc.edu
University of Wisconsin-Madison

 

Source: UW Extension

GDT sees 7th consecutive downward event

There’s more bad news for dairy farmers, with international dairy commodity prices dropping again. The latest Global Dairy Trade (GDT) index  saw continued downward trends during event 224 – which concluded with the GDT Price Index down 3.5%. This marks the seventh consecutive fall in index for the milk price indicator. 

Key Results:

  • AMF index down 9.4%, average price US$4,577/MT;
  • Butter index down 9.6%, average price US$3,637/MT;
  • BMP not offered;
  • Ched index up 0.2%, average price US$3,252/MT;
  • LAC index up 1.1%, average price US$920/MT;
  • RenCas index down 4.5%, average price US$5,067/MT;
  • SMP index down 1.6%, average price US$1,965/MT;
  • SWP index not available, average price not available;
  • WMP index down 1.8%, average price US$2,599/MT.

While whole milk powder (WMP) prices fell slightly, the drop was driven more by significant falls in anhydrous milkfat (AMF) and butter.

NZX Dairy Data and Insights Anaylst, Amy Castleton, said the 1.8 percent fall in the WMP price index was a surprisingly resilient result.

“WMP offer volumes were at their highest for the season at the November 20 event,” she said.

“In addition, just released New Zealand milk production figures showed October production was up 6.5 percent on a milksolids basis.”

Most of the whole milk powder sold went to North Asia, which includes China.

The price indices for AMF and butter dropped 9.4 percent and 9.6 percent respectively.

Regular grade AMF and unsalted butter for January shipping decreased 9.9 percent and 10.3 percent respectively.

Ahead of the event, the derivatives market had expected lifts for the grades and contracts of each of these products.

“There was significantly less volume of AMF sold compared with the previous event, but there was more butter sold,” said Ms Castleton.

“There hasn’t been such a big percentage change in prices for either AMF and butter since late 2016,” she said.

The skim milk powder (SMP) price index decreased 1.6 percent overall. Medium heat SMP for shipping in January decreased 1.8 percent on the previous event.

Click here for more results

Global Markets Drive Milk Futures and Dairy Markets Lower in Chicago Tuesday

At the Chicago Mercantile Exchange class III milk futures continued to slide Tuesday pressured by increasing milk production and Event 224 of the Global Dairy Trade. November closed eight cents lower at $14.47. December down 20 cents at $14.46. 2019 Class III markets also fell 1 to 25 cents from January to November leaving the first half average at $15.15 and the second half average at $16.28. January 25 cents lower at $14.56. February down 23 cents at $14.76. March through next October contracts closed 17 cents to a penny lower.

The CME spot market was also lower on Tuesday. Butter fell 2 3/4 cents to $2.30 1/4 per pound. Blocks fell 7 cents at $1.34 cents per pound. Barrels fell 4 3/4 cents to $1.25 per pound. Grade A nonfat dry milk rose 1/4 cent to 88 3/4 cents. And lastly dried whey fell 1 cent to 42 cents.

 

Dairy prices for New Zealand farmers predicted to fall further

Fonterra is forecasting a payout between $6.25 and $6.50 a kilo of milk solids. Photo: RNZ / Rebekah Parsons-King

Current dairy prices for farmers are unlikely to last, according to analysts.

Fonterra is predicting a final price of between $6.25 and $6.50, when the season wraps up next year.

That is a reduction from earlier forecasts.

But it might still be too high, according to Mark Lister, who heads private wealth research for Craigs Investment Partners.

He said there was an increasing pressure on the industry, mainly due to weaker dairy prices around the world.

“We’ve seen slippage in the global dairy trade auction results,” he said.

“That’s partly due to more supply [of dairy products] coming on line from many parts of the world.

“Secondly, the New Zealand dollar has been very strong.”

Figures put the New Zealand dollar lower than it was earlier this year but still 4 cents up on its level of early October when measured against the US dollar.

That higher dollar made New Zealand exports more expensive for people overseas to buy.

Mr Lister said those two factors would make it harder for Fonterra to sustain its latest predictions.

He was not making a formal declaration but thought $6 would be a realistic figure.

“This might be lower than people have come to expect over the past six months but is still not too bad relative to history.”

Another analyst, Mark Brunel of OMF, produced a still lower forecast of $5.80.

He noted the volume of production worldwide would put downward pressure on prices, with output from the New Zealand industry up 6 percent and US production up 1 percent in the year to date.

Source: RNZ

As production rises dairy markets fall in Chicago Monday

At the Chicago Mercantile Exchange class III milk futures lower Monday as milk production increases slightly in the U.S. November closed three cents lower at $14.55. December down 18 cents at $14.66. 2019 Class III markets saw losses anywhere from 9 to 23 cents in January to June, leaving the first half average at $15.29.  January 23 cents lower at $14.81. February down 15 cents at $14.99. March through next October contracts closed 13 cents lower to a penny higher. The second half of 2019 was mainly unchanged but rose 3 cents in July and one cent in October, leaving the second half average at $16.32.

Blocks closed $0.0425 lower at $1.41. Four trades were made ranging from $1.41 to $1.44. Barrels were down $0.0625 at $1.2975. Dry whey closed unchanged at $0.43 Butter was up $0.0550 at $2.33. Three trades were made ranging from $2.3075 to $2.33. Nonfat dry milk was unchanged at $0.8850. Two sales were made at $0.88 and $0.8850.

Milk Futures Mixed, Product Markets Higher Thursday in Chicago

At the Chicago Mercantile Exchange class III milk futures closed mixed in a narrow range despite an active cash session. Class III markets were down 1 cent in November at $14.56 and 2 cents in December at $14.88. 2019 Class III markets ran between losing 1 cent to gaining 2 cents across the board. January a penny lower at $15.10. February up a penny at $15.18. March through next October contracts closed one to three cents higher. Class IV markets were mixed as well. November fell 7 cents to $15.02 while December rose 13 cents to $15.05 in 2018. 2019 Class IV markets realized gains from 4 to 14 cents across the board.

The CME spot market trade on Thursday was in the green as all five products traded. Barrels were unchanged at $1.36. Six trades were made at that price. Blocks closed $0.0250 higher at $1.4250. Ten trades were made ranging from $1.3975 to $1.4250. Butter was up $0.0350 at $2.2750. Seven trades were made ranging from $2.26 to $2.28. Nonfat dry milk was up $0.01 at $0.88. Ten trades were made ranging from $0.87 to $0.88. Dry whey closed up $0.0050 at $0.4350. Fourteen trades were ranging from $0.4350 to $0.4475.

Milk Markets Move Higher Again Wednesday in Chicago

At the Chicago Mercantile Exchange, Class III milk futures closed again higher Wednesday supported by the cash market.  November and December 2018 were up 9 cents respectively. November closed four cents higher at $14.57. December up nine cents at $14.90.  2019 months ranged from even to six cents higher. The average first half 2019 Class III price Is $15.45 and the full year closed at $15.89/cwt. January a nickel higher at $15.11. February up four cents at $15.17. March through next October contracts closed two to six cents higher.

Barrels were up $0.0050 at $1.36. Three trades were made ranging from $1.3550 to $1.36. Blocks closed $0.0275 higher at $1.40. Five trades were made ranging from $1.3975 to $1.41. Butter was up $0.0250 at $2.24. Four trades were made ranging from $2.2225 to $2.24. Nonfat dry milk was up $0.0075 at $0.87. Two trades were made at that price. Dry whey closed up $0.0050 at $0.43. Two trades were made at $0.42 and $0.43.

CWT Assists with 3.5 Million Pounds of Cheese, Butter and Whole Milk Powder Export Sales

Cooperatives Working Together (CWT) member cooperatives accepted 20 offers of export assistance from CWT that helped them capture contracts to sell 2.048 million pounds (638 metric tons) of Cheddar and Monterey Jack cheese, 606,271 pounds (275 metric tons) of butter and 879,645 pounds (399 metric tons) of whole milk powder. The product is contracted for delivery in Asia, Central America, the Middle East, North Africa, Oceania and South America for the period from November 2018 through April 2019.

CWT-assisted member cooperative 2018 export sales total 53.777 million pounds of American-type cheeses, 13.842 million pounds of butter (82% milkfat) and 52.823 million pounds of whole milk powder to 36 countries on five continents. These sales are the equivalent of 1.2 billion pounds of milk on a milkfat basis.

Assisting CWT members through the Export Assistance program in the long term helps member cooperatives gain and maintain market share, expanding the demand for U.S. dairy products and the U.S. farm milk that produces them. This positively affects all U.S. dairy farmers by strengthening and maintaining the value of dairy products that directly impact their milk price.

The amounts of dairy products and related milk volumes reflect current contracts for delivery, not completed export volumes. CWT will pay export assistance to the bidders only when export and delivery of the product is verified by the submission of the required documentation.

 

Milk Futures Continue Higher Tuesday in Chicago

At the Chicago Mercantile Exchange, Class III milk futures continued their positive movement through Tuesday’s trade. November rose 2 cents at $14.53, while December Rose 15 cents at $14.81. 2019 Class III markets rose anywhere from 5 to 16 cents with the most moving in the first quarter. The 2019 first quarter average is now at $15.16. January 16 cents higher at $15.06. February up 14 cents at $15.13. March through next October contracts closed five to 11 cents higher.

Barrels were up $0.0375 at $1.3550. Two trades were made, one at $1.33 and one at $1.34. Blocks closed $0.0225 higher at $1.3725. Four trades were made ranging from $1.36 to $1.3850. Butter was down $0.0250 at $2.20. Six trades were made ranging from $2.1975 to $2.23. Nonfat dry milk was up $0.0025 at $0.8625. Dry whey closed down $0.0050 at $0.4250. Five trades were made ranging from $0.4250 to $0.4275.

Dairy Market Kicks Off The Week Higher

At the Chicago Mercantile Exchange Class III milk futures worked their way higher Monday taking back some of last week’s losses.  Since early October, the first half 2019 average has slipped 85 cents. Monday the market was able to achieve modest gains. November added 5 cents while December jumped 19. January traded 14 cents higher and February was up 10 cents. March and beyond in Class III ranged from 5 to 11 cents higher. 

Barrels were up $0.0125 at $1.3175. Blocks closed $0.03 lower at $1.35. Five trades were made ranging from $1.35 to $38. Butter was up $0.0325 at $2.2250. One trade was made at that price. Nonfat dry milk was unchanged at $0.86. One trade was made at $0.8575. Dry whey closed down $0.0050 at $0.43. Eight trades were made ranging from $0.43 to $0.4350.

Dairy Markets Continue To Go Lower In Chicago Thursday

At the Chicago Mercantile Exchange Class III milk futures traded another day lower after a mostly bearish supply and demand report and lower cash trade. Class III markets were softer on Thursday falling 3 cents in November and 18 cents in December.  November closed three cents lower at $14.43. December down 18 cents at $14.48. 2019 markets were also down on the day, losing 3 to 6 cents from January to September. January six cents lower at $14.72. February down six cents at $14.86. March through next October contracts closed unchanged to seven cents lower.

The CME spot markets on Thursday were mainly lower. Butter lost 1 ¾ cents at $2.1925 per pound. Blocks fell 3.5 cents to $1.39 per pound, trading 7 times. Barrels were unchanged in today’s session at $1.305 per pound. With the most volume of the session Grade A nonfat dry milk fell 1.25 cents to 85 ¾ cents, trading 11 times. Dry whey lost ¾ of a cent to 43 ¾ cents.

Dairy Markets Continue to Slide in Chicago

At the Chicago Mercantile Exchange Class III milk futures again continued lower Wednesday following the elections and lower cash trade.  November closed six cents lower at $14.46. December down 17 cents at $14.66. The 2019 Class III prices also fell 5 to 12 cents across the board.  January 12 cents lower at $14.78. February down a dime at $14.92. March through next October contracts closed four to eight cents lower. Class IV prices fell 10 cents for both November and December of 2018. The 2019 Class IV prices loosed 3-9 cents in January to March while the remaining of 2019 realized gains of 8 to 17 cents. 

The CME spot market continued to soften as well. Butter fell 3 cents after 5 trades to $2.21 per lb. Blocks fell 3 and ¼ cents at $1.42 and 1.2 cents per lb., also trading 5 times. Barrels also lost 3 cents at $1.30 and ½ cents per lb., only trading 3 times.  Grade A nonfat dry milk only traded 1 time loosing 1 and ½ cents at 87 cents. Dry whey was the only product that didn’t trade, leaving it unchanged at 44 and ½ cents.

Milk futures continue to slide in Chicago

At the Chicago Mercantile Exchange Class III milk futures continued to slide Tuesday on dismal trade reports and limited cash movement. November closed 18 cents lower at $14.52. December down 22 cents at $14.83. January 20 cents lower at $14.20. February down 18 cents $15.02. March through next October contracts closed three to 11 cents lower.

The only bright spot was skim milk powder (SMP), up 1.2% to 91¢/lb. Cheddar cheese declined 4.6% to $1.47/lb. Whole milk powder (WMP) was off 2.9% to $1.20/lb, and butter dropped 1.7% to $1.84/lb.

 

Milk Futures Continue Lower

At the Chicago Mercantile Exchange Class III milk futures started the week lower following the tone of the cash market. November closed eight cents lower at $14.70. December down 13 cents at $15.05. January through May declined 3 to 8 cents. January eight cents lower at $15.10. February down four cents $15.20. March through next October contracts closed six cents lower to unchanged. Well a June onward was unchanged Class IV markets had November a penny higher and December five cents lower. 2019 ranged between 8 and 14 cents weaker.

Barrels were unchanged at $1.34. Blocks were unchanged at $1.4575. Butter was down $0.0125 at $2.2875. Nonfat dry milk was $0.0125 lower at $0.8875. One trade was made at that price. Dry whey closed $0.0025 higher at $0.4475. Five trades were made ranging from $0.4450 to $0.4575.

CWT Assists with 1.4 Million Pounds of Cheese Export Sales

Cooperatives Working Together (CWT) member cooperatives accepted eight offers of export assistance from CWT that helped them capture contracts to sell 1.448 million pounds (657 metric tons) of Cheddar cheese, contracted for delivery in Asia, the Middle East and North Africa for the period from November 2018 through March 2019.

CWT-assisted member cooperative 2018 export sales total 49.719 million pounds of American-type cheeses, 12.962 million pounds of butter (82% milkfat) and 52.188 million pounds of whole milk powder to 36 countries on five continents. These sales are the equivalent of 1.132 billion pounds of milk on a milkfat basis.

Assisting CWT members through the Export Assistance program in the long term helps member cooperatives gain and maintain market share, expanding the demand for U.S. dairy products and the U.S. farm milk that produces them. This positively affects all U.S. dairy farmers by strengthening and maintaining the value of dairy products that directly impact their milk price.

The amounts of dairy products and related milk volumes reflect current contracts for delivery, not completed export volumes. CWT will pay export assistance to the bidders only when export and delivery of the product is verified by the submission of the required documentation.

 

Milk futures continue to rebound in Chicago following Trump Tweet about trade talks with China

At the Chicago Mercantile Exchange Class III milk futures closed higher Thursday following improved Chinese imports and USDA’s mostly bearish dairy product report. November added 4 cents and December jumped 26 cents.  January through July 2019 traded 8-13 higher and August through December ranged from a penny lower to 5 cents higher.  January four cents higher at $15.19. February was three cents higher at $15.24. March through next October contracts closed unchanged to three cents higher.

Barrels were up $0.0450 at $1.3750. Five trades were made at that price. Blocks were down $0.02 at $1.4550. Eight trades were made ranging from $1.44 to $1.4550. Butter was $0.02 higher at $2.30. Eight trades were made ranging from $2.28 to $2.30. Nonfat dry milk was $0.0125 higher at $0.8925. Eight trades were made ranging from $0.89 to $0.8950. Dry whey closed $0.0025 lower at $0.4475. Ten trades were made ranging from $0.44 to $0.4457.

Milk Prices take a positive turn on Halloween

At the Chicago Mercantile Exchange class III milk futures closed higher Wednesday as traders took back over sold positions. October closed unchanged at $15.54. November added 2 cents to $14.79 per cwt. while December closed 12 cents higher at $15.17 per cwt. The 2019 prices rose 10-15 cents in the first quarter while April through August added 2-7 cents per cwt. September was even and the fourth quarter was down 2-6 cents. Class IV milk months wer all higher rising anywhere from 5-13 cents. 

Barrels were up $0.0825 at $1.33. Five trades were made ranging from $1.26 to $1.33. Blocks were down $0.0375 at $1.4750. Five trades were made ranging from $1.4550 to $1.4750. Butter was $0.0550 higher at $2.28. Sixteen trades were made ranging from $2.2725 to $2.2850. Nonfat dry milk was $0.0125 higher at $0.88. Seven trades were made ranging from $0.8450 to $0.8750. Dry whey closed $0.0025 lower at $0.45. One trade was made at that price.

Dairy Markets Continue to Take a Hit Tuesday in Chicago

At the Chicago Mercantile Exchange Class III milk futures closed mostly lower Tuesday following a mostly lower tone of the cash market. October closed a penny higher at $15.54.  November dropped 10 cents and December was down 8 cents. 2019 prices ranged from 4-8 cents lower in the first half and 1-6 cents softer in the second half.  November a dime lower at $14.77. December down eight cents at $15.05. January eight cents lower at $15.00. February through next September contracts closed one to eight cents lower. Class IV had November through January even on the day, March up 6 cents, April 4 cents and May-November was down 5 cents. 

CME spot product markets were once again highlighted by the results in the dry whey market. Whey traded 9 times and fell 1 and ¾ cents to 45 and ¼ cents per lb. Grade A nonfat dry milk was unchanged at 86 and ¾ cents despite a very active session. Twelve loads moved while 8 bids and offers were left uncovered.  Butter was also unchanged at $2.22 and a half cents per lb. Neither cheddar blocks or barrels traded Tuesday. Blocks set back a quarter cent and $1.51 and ¼ cents and barrels gained 1 and ½ cents to $1.24 and ¾ cents following a single bid. 

CWT Assists with 1.7 Million Pounds of Cheese and Whole Milk Powder Export Sales

Cooperatives Working Together (CWT) member cooperatives accepted 12 offers of export assistance from CWT that helped them capture contracts to sell 1.407 million pounds (638 metric tons) of Cheddar and Monterey Jack cheese and 264,555 pounds (120 metric tons) of whole milk powder. The product is contracted for delivery in Asia, the Middle East, North Africa, and Oceania for the period from October 2018 through April 2019.

CWT-assisted member cooperative 2018 export sales total 51.125 million pounds of American-type cheeses, 12.962 million pounds of butter (82% milkfat) and 52.452 million pounds of whole milk powder to 36 countries on five continents. These sales are the equivalent of 1.146 billion pounds of milk on a milkfat basis.

Assisting CWT members through the Export Assistance program in the long term helps member cooperatives gain and maintain market share, expanding the demand for U.S. dairy products and the U.S. farm milk that produces them. This positively affects all U.S. dairy farmers by strengthening and maintaining the value of dairy products that directly impact their milk price.

The amounts of dairy products and related milk volumes reflect current contracts for delivery, not completed export volumes. CWT will pay export assistance to the bidders only when export and delivery of the product is verified by the submission of the required documentation.

 

Source: CWT

Milk Markets Frustrated and trade lower in Chicago Monday

At the Chicago Mercantile Exchange, class III milk futures started the week lower following the negative tone of last week’s market. By the end of the session, the average price of Class III milk in Q4 dropped 13 cents to a price of $15.16 per cwt. with the month of November now trading below $15 at a price of $14.88, It fell 20 cents. The first half of 2019 calendar average finished a dime lower at $15.45. January 11 cents lower at $15.08. February through next September contracts closed three to 12 cents lower. The Class IV market saw a little activity and finished unchanged.

Barrels were down $0.0175 at $1.2325. Six trades were made ranging from $1.2325 to $1.25. Blocks unchanged at $1.5150. Butter was down $0.0075 at $2.2250. One trade was made at that price. Nonfat dry milk was unchanged at $0.8675. Dry whey unchanged at $0.47.

Milk Futures Stop Falling and Find Footing in Chicago Thursday

At the Chicago Mercantile Exchange, class III milk futures were able to take back some earlier week losses Thursday supported by an active cash trade, shrinking cow herd and weakening international prices. After falling $1.45 in the November contract since the beginning of October, milk futures finally found some footing on Thursday following a higher spot product trade. November traded 21 cents higher and settled at $15.11 per cwt. while December was up 28 cents. The 2019 Class III prices had January through April 21-27 cents higher, May up 14 cents, June 12 cents stronger and July to November 2-8 cents higher.  Class IV prices were slightly higher.

Product trade on Thursday saw positive results in 4 of 5 products offered. Dry whey regained a penny and closed at 48 and a half cents per lb. following a couple of bids. Cheddar barrels moved 14 loads and jumped 4 and three-quarter cents per lb. to settle out at $1.25 and a half cents per lb.  Blocks were $0.0275 higher at $1.4975. Five trades were made ranging from $1.4625 to $1.4975. Butter was up $0.0275 at $2.24. Fourteen trades were made ranging from $2.2325 to $2.2475. Nonfat dry milk was down $0.0025 at $0.8675. Two sales were made at $0.8650 and $0.8675.

 

Milk Prices Continue Slippery Slide in Chicago Wednesday

At the Chicago Mercantile Exchange Class III milk futures continued to slide Wednesday as increasing supplies and slowing demand hangs over the market.  The fourth quarter average of 2018 dropping 14 cents to $15.10.  October closed unchanged at $15.50. November down 20 cents at $14.90. December down 17 cents at $14.95.  The first half of 2019 now finds itself at $15.30 for a price 13 cents lower than Tuesday and nearly 50 cents lower than last week at this time. Class IV market site activity in Wednesday’s session. The balance of 2018 now rest set an average price of $14.86 down 15 cents from Tuesday. The first half of 2019 fell 16 cents to come to a final average of $15.15. January 17 cents lower at $14.91. February through next September contracts closed six to 16 cents lower.

Barrels were down $0.0125 at $1.2075. Fourteen trades were made ranging from $1.2075 to $1.2175. Blocks were $0.0050 lower at $1.47. Five trades were made ranging from $1.4575 to $1.4750. Butter was up $0.0175 at $2.2125. Seven trades were made ranging from $2.20 to $2.2150. Nonfat dry milk remained unchanged at $0.87. One sale was made at that price. Dry whey unchanged at $0.4750. Two trades were made at that price.

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