Cooperatives Working Together (CWT) has accepted 4 requests for export assistance from cooperatives that have contracts to sell 1.213 million pounds (550 metric tons) of Cheddar cheese to customers in Asia and the Middle East. The product has been contracted for delivery in the period from February through May 2018.

CWT-assisted member cooperative 2018 export sales total 13.900 million pounds of American-type cheeses, and 1.590 pounds of butter (82% milkfat) to 11 countries on three continents. These sales are the equivalent of 164.063 million 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, thus expanding the demand for U.S. dairy products and the U.S. farm milk that produces them. This, in turn, 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

Dairy farmers are feeling more confident after the third rise in a row for milk prices at the global dairy auction and widespread rain.

DairyNZ’s regional manager for the southern North Island James Muwunganirwa  said the rain has been most welcome and would start pasture growth in regions that remained dry, such as Horowhenua.

He said before the weekend rain, showers had been patchy.

Many farmers remained short of feed, and were feeding out supplementary feed, such as palm kernel or grass silage.

Muwunganirwa said pasture growth had increased, but farmers would have to continue feeding supplements until it reached full growth.

He said dairy farmers were pregnancy testing cows in the next few weeks, and while the results were not known yet there were likely to be more cull cows and fewer mouths to feed.

He said cow condition was “not flash” and cows were generally lighter than usual because of dry conditions.

Muwunganirwa said farmers would hope a rising global dairy auction would stabilise the milk payout.

“They were usually more concerned with their farms than the dairy auction.”

He said many farmers were catching up on years of deficits and bank overdrafts and would use part of this year’s payout to pay off debt.

Farmers pleased with the rain were also happy that the whole milk powder price had gone up.

“The third straight increase in the GDT is certainly welcome news and it provides a greater security of a mid-$6 milk price,” said Federated Farmers share milker chairman, Richard McIntyre

“These results will help farmers to continue justifying feed purchases in order to keep their cows in milk.”

Manawatū dairy farmer Robert Ervine said his family wanted toi build a bit of fat back into the system.

“Building some reserves, for the lean times and catching up on some deferred maintenance.”

Source: Stuff

At the Chicago Mercantile Exchange Class III milk futures closed mostly higher Wednesday following increased strength in the global markets. February milk closed unchanged at $13.48. March was up $0.22 at $13.46. April closed $0.22 higher to $14.15. May milk was up $0.17 at $14.29. The rest of the 2018 milk futures closed unchanged to nine cents a hundredweight higher.

Grade AA Butter was $0.0725 higher at $2.1350. Seventeen loads were sold ranging from $2.10 to $2.14 Barrels were up $0.0275 at $1.39. Eight loads were sold ranging from $1.3625 to $1.39. 40 # blocks were unchanged $1.51. Eight loads were sold ranging from $1.51 to $1.5350. Nonfat dry milk was unchanged at $0.73. Two loads were sold at $0.72 and $0.73.

The USDA reports cash butter for the week ending February 10th averaged $2.13 per pound, $0.022 lower than the previous week. 40 pound blocks of cheddar were pegged at $1.54, $0.07 higher. 500 pound barrels averaged $1.37, a decrease of $0.06. Dry whey came out at $0.253, up slightly from the previous week. Nonfat dry milk averaged $0.713, up $.015.

Trade lawyer Peter Clark has studied the level of subsidies available to U.S. dairy farmers. (John Greig photo)

U.S. dairy farmers continue to benefit from broad agriculture supports, a study shows.

Dairy Farmers of Canada has had Grey, Clark, Shih and Associates regularly study the effect of U.S. government policy on dairy farms in that country.

The latest version of the project was released at the Dairy Farmers of Canada policy conference held last week in Ottawa.

It showed U.S. dairy farmers benefit from the equivalent of US$12.06 per hundredweight or C$35.02 per hectolitre. That’s close to 70 per cent of what farmers are paid now for their milk.

Peter Clark, a long-time trade consultant and lawyer with the firm, said at the conference that the U.S. is gradually moving more of its programs toward risk management.

“The U.S. has become aware of the WTO inconsistency of many of their programs,” said Clark. “They’re shifting from direct and countercyclical payments and other issues to various types of insurance programs.”

Clark’s 500-page report is a detailed analysis of many programs, and notes a certain amount of the funds for those programs is allocated to the potential use of those programs by dairy farmers, not actual use.

The programs include: domestic support, export subsidies, conservation programs, crop and livestock gross margin, risk management programs, disaster relief assistance programs, loan programs, crop insurance, livestock support as well as renewable fuels incentives and subsidies and irrigation programs.

Nick Thurler, a Dairy Farmers of Ontario board member from eastern Ontario, said that he knows numerous dairy farmers across the border in New York.

“I know if I told them they got $12 per hundredweight subsidy, I know what the answer would be,” he said.

Clark said he’s heard from people who say they know U.S. farmers who get no direct subsidies, but he points out that the subsidies are mostly indirect and farmers in the western U.S. have much greater benefit due to irrigation.

Alfalfa and forages are the biggest users of irrigation water, mostly to feed dairy cattle — hence the massive amount of money that goes into irrigation systems, he said.

“We look at what is available” to dairy farmers, said Clark. That’s typical of trade evaluations done by other countries as well, he added.

Clark’s study also included the impact of nutrition programs in the U.S. on dairy products.

“Some argue it should be seen as welfare and we shouldn’t be allocating it in this analysis,” he said, but he includes it as the original program was created as a way to deal with excess agriculture production.

U.S. Trade Representative Robert Lighthizer’s lawyers, Clark noted, have reports that list 160 subsidies on Canadian steel.

“When it comes to trade, you have to be precise.”

Source: manitobacooperator.ca

FORECASTS that the commodity value of milk next season could be down nearly $1 a kilogram on this season battered dairy farmer confidence last week.

Many were adamant that the value-add capture on top of the commodity value price, plus competition, would lift the price higher, with many hoping it had “at least” a five in front of it.

But many producers were shaken by the news, from dairy forecasting organisation Freshagenda, which said the outlook reflected a glut of milk in the EU and resulting challenges to cheese markets.

Gippsland based consultant John Mulvany was circumspect about the forecast.

“If the people who actually pay dairy farmers were signalling the price could be below $5 a kilogram of milk solids next year then that’s obviously going to shake enthusiasm and confidence,” he said.

“But there is still such a massive range of how people produce milk and at what cost. It is very hard to generalise across -the industry what the impact would be.”

At the Sungold Field Days at Allansford last week, bank representatives said farmers were cautious about the coming season.

Rural Bank south west agribusiness regional manager Andrew Martin said the season last year helped dairy farmers, with levels and appetite for investment varying “case by case” but he said farmers were now “pensive” next year about the milk price.

“There’s a point where businesses need to break even. Depending on the business, a four might challenge that break-even price,” he said.

Westpac Victoria and Tasmania agribusiness general manager Roddy Brown said many clients had consolidated this year, managing on-farm efficiencies well. He said next year’s price was “looking a bit dicey” but he was confident it would have a five in front of it.

“I think people are starting to think more long term, more strategic, but they still have got to get through the year,” he said.

Mr Brown said there had been a lot of corporate investment in Tasmania, with pension funds investing in a hybrid system that still included family investment in dairy. In Victoria two to three dairy farmers had “fired up” another dairy on an outblock, he said, but that farmers had “their eyes up” when it came to markets.

He estimated it would take longer than this season to return each Victorian dairy region to historic production levels. “Generally people have been rebuilding numbers and looking at efficiencies,” he said.

“The focus has been on efficiencies, not necessarily production.” ANZ south west Victoria regional executive Dale Camm said confidence was “lukewarm” with efficient operators reinvesting in their business, some consolidating and spending money on infrastructure. Dairy Australia analyst John Droppert said last week’s rise of 5.9 per cent to an average of $US3553 a tonne at the Global Dairy Trade auction reflected the “drought” in New Zealand and its impact on production figures. He said the auction also “reinforced” that buyers were prepared to pay a premium for Oceania skim milk powder. SMP rose 7.2 per cent to $US1932/tonne at the auction and it is due to a huge EU stockpile that needs to be sold down.

Source: The Weekly Times

Technical buying drives Class III milk futures higher Tuesday at the Chicago Mercantile Exchange. February milk was $0.01 higher at $13.48. March was up $0.19 at $13.75. April closed $0.18 higher to $13.93. May milk was up $0.19 at $14.29. The rest of the 2018 milk futures closed three cents a hundredweight to 17 cents higher.

Grade AA Butter was $0.0325 higher at $2.0625. Two loads were sold ranging from $2.04 to $2.05. Barrels were up $0.0025 at $1.3625. Five loads were sold, one at $1.36 and four at $1.3625. 40 # blocks were up $0.0075 at $1.51. Two loads were sold at $1.5050 and $1.51. Nonfat dry milk was down $0.0050 at $0.73. One load was sold.

CME dairy prices where mixed Monday. Class Three milk for February was unchanged at $13.47.  March was down $.07 at $13.56.  April was down $.02 at $13.75.  May was down $.04 to $14.10.  May and June futures were down, but Class Three markets were up or unchanged after June.

Grade AA Butter was up $.0025 at $2.03.  Eleven carloads were sold at $2.0275 and $2.03. Barrels were unchanged at $1.36.  Six carloads were sold at that price.  40-pound blocks were down $.0075 at $1.5025.  No sales were recorded. Nonfat dry milk was unchanged at $.7350 per pound. Five carloads traded with prices ranging from $.7250 to $.7350.

The Dairy markets were mostly down again at the Chicago Mercantile Exchange on Thursday trading. Class Three milk for February was down $.13 at $13.47.  March was down $.10 at $13.51.  April was down $.10 at $13.70.  May was down $.06 to $14.03.  Most of the futures after May were mixed.

Grade AA Butter was down $.0050 at $2.07.  No sales were recorded. Barrels were unchanged at $1.35.  Three carloads were sold at that price. 40-pound blocks were unchanged at $1.52.  No sales were recorded. Nonfat dry milk was up $.0025 at $.7375 per pound. Two carloads were sold at that price.

The Dairy markets were mostly down again on Wednesday trading at the Chicago Mercantile Exchange. Class Three milk for February was down $.08 $13.60.  March was down $.08 at $13.61. April was down $.05 at $13.80.  May was down $.03 to $14.09.  Most of the futures after May were mixed.

Grade AA Butter was down $.01 at $2.0750.  Eight carloads were sold ranging from $2.0750 to $2.0825. Barrels were down $.02 at $1.35.  Seven carloads were sold from $1.35 to $1.37. 40-pound blocks were up $.0025 at $1.52.  One carload was sold at that price. Nonfat dry milk was down $.0075 at $.7350 per pound. Nine carloads sold ranging from $.7250 to $.7350 cents per pound.

At the Chicago Mercantile Exchange, the Dairy markets were mixed Tuesday. Class Three milk for February was down $.06 $13.68.  March was down $.04 at $13.69.  April was down $.02 at $13.85.  May was down $.03 to $14.12.  Most of the futures after May were either unchanged or up.

Grade AA Butter was up $.0050 at $2.0850.  No sales were recorded. Barrels were up $.0050 at $1.37.  Four carloads were sold from $1.3650 to $1.37. 40-pound blocks were unchanged at $1.5175.  No blocks were sold. Nonfat dry milk was up $.0050 at $.7425 per pound. Four carloads sold at $.74 and one carload sold at $.7425 cents per pound.

At the Chicago Mercantile Exchange Monday, the Dairy markets were up except for butter Monday. Class Three milk for February was up $.11 $13.74.  March was up $.12 at $13.73.  April was up $.07 at $13.87.  May was up $.01 to $14.15.  Most of the futures over the next 12 months were either unchanged or up fractionally.

Grade AA Butter was down $.035 at $2.08.  Five carloads sold ranging from $2.0775 to $2.0975. Barrels were up $.04 at $1.3650.  Five carloads were sold from $1.3575 to $1.3650. 40-pound blocks were up $.0550 at $1.5175.  One carload of blocks sold at that price. Nonfat dry milk was up $.0150 at $.7375 per pound. Three carloads sold at $.7375 and $.74 cents per pound.

Class III milk futures closed mostly lower Friday on technical selling at the Chicago Mercantile Exchange. February milk was $0.09 higher at $13.63.  March was $0.11 lower at $13.61. April closed $0.07 lower to $13.80. May milk was lower $0.08 at $14.14. The rest of the 2018 milk futures were mostly lower from 10 cents a hundredweight lower to a penny higher.

Grade AA Butter was $0.0075 lower at $2.1150. Two loads were sold ranging from $2.1150 to $2.1175. Barrels were up $0.0025 at $1.3250. 40# blocks were unchanged at $1.4625. Nonfat dry milk was up $0.0125 at $0.7225. Nine loads were sold ranging from $0.72 to $0.7250.

On trading at the Chicago Mercantile Exchange, the Dairy markets remained mixed Wednesday. February was up $.02 $13.40.  March was up $.16 at $13.57.  April was up $.12 at $13.71.  May was up $.08 to $14.10.  Except for August and October, the next 12 months were either unchanged or up fractionally.

Grade AA Butter was unchanged at $2.1425.  No sales were recorded. Barrels were unchanged at $1.32.  Nine carloads were sold at $1.31 and $1.32. 40-pound blocks were unchanged at $1.4625.  No sales were recorded. Nonfat dry milk was unchanged at $.7050 per pound. Four carloads sold at that price.

On trading Wednesday at The Chicago Mercantile Exchange, the Dairy markets remained mixed. February was up $.02 $13.40.  March was up $.16 at $13.57.  April was up $.12 at $13.71.  May was up $.08 to $14.10.  Except for August and October, the next 12 months were either unchanged or up fractionally.

Grade AA Butter was unchanged at $2.1425.  No sales were recorded. Barrels were unchanged at $1.32.  Nine carloads were sold at $1.31 and $1.32. 40-pound blocks were unchanged at $1.4625.  No sales were recorded. Nonfat dry milk was unchanged at $.7050 per pound. Four carloads sold at that price.

IndexBox has just released a new report “U.S. Fluid Milk Market – Analysis And Forecast to 2025“.

According to the report, the value of fluid milk production in the U.S. totaled $33.3B in 2016, shrinking by -1.3% from the previous year. Overall, the U.S. fluid milk output pursued a slight growth from 2007 to 2016. The total output figures increased at an average annual rate of +1.1%. The trend pattern remained relatively stable, with only minor fluctuations throughout the analyzed period. The most prominent growth was recorded in 2010, when the value of production increased by +11% Y-o-Y. Over the period under review, the output figure with regard to fluid milk in the United States peaked at $36.9B in 2014, leveling off in the following year.

Fluid milk and related products, packaged (including cartons, bottles, cans, and dispenser cans), excluding Ultra High Temperature (U.H.T.) and flavored milks accounted for the highest share (42% in 2016) of U.S. fluid milk manufacturing, leaving a considerable room for yogurt, excluding frozen (19%). The other related products with less notable individual shares together comprised approx. 39% of the total output. From 2008 to 2016, the value of shipments of fluid milk and related products, packaged (including cartons, bottles, cans, and dispenser cans), excluding ultra high temperature (u.h.t.) and flavored milks shrank at an average annual rate of -2.1%. By contrast, the output of yogurt, excluding frozen ascended by an average +9.3% per year.

This report is designed to provide accurate and comprehensive data, as well as a detailed analysis of the current state and midterm prospects of the U.S. fluid milk industry. It includes a market overview, which consolidates the key conclusions made from the analysis of the market study, revealing actionable insights in the fluid milk industry. The report provides a forecast of the expected changes in the fluid milk market in coming years, based on historical trends, external and internal factors, and the main developments affecting the market. Each section contains an in-depth analysis of the data provided. Further data in the report includes: the historical values and current projections regarding production and consumption volume, datasets on the industry life cycle, business locations, productivity, employment and many other crucial aspects. The Company Profiles section contains relevant data on the major players in the industry.

The trade section provides data on trade partners, such as historical data on imports & exports for each partner country, changes in the direction of trade, as well as import & export prices. An analysis of the fluid milk trade shows the opportunities that are currently evolving for producers and suppliers in a changing market.

Product coverage: Fluid milk and cream, bulk sales; Fluid milk and related products, packaged (including cartons, bottles, cans, and dispenser cans), excluding Ultra High Temperature (U.H.T.) and flavored milks; Cottage cheese (including bakers’, pot, and farmers’ cheese); Yogurt, excluding frozen; Perishable dairy product substitutes; Other packaged milk products; Fluid milk manufacturing, nsk, total.

Companies mentioned:
Dean Foods Company, Whitewave Foods Company, The Dannon Company, HP Hood, Turkey Hill, Prairie Farms Dairy, Hiland Dairy Foods Company., California Dairies, Byrne Dairy, Agri-Mark, United Dairy, Chobani, Upstate Niagara Cooperative, Plains Dairy, United Dairymen of Arizona, Suiza Dairy Corporation, Borden Dairy Company, Stremicks Heritage Foods, Mayfield Dairy Farms, Purity Dairies, Southern Foods Group, Garelick Farms, Country Fresh, Land-O-Sun Dairies, Northwest Dairy Association, SFG Management Limited Liability Company, Wwf Operating Company, Crowley Foods, Readington Farms.

IndexBox’s methodology consists of obtaining information from a list or highly reliable sources (both paid and open), which include, but are not limited to:

– International official statistical agencies
– Governmental statistical agencies
– Official trade statistics
– Paid trade databases
– Industrial associations
– Company reports
– Industry experts

The AI platform, developed by IndexBox data scientists, compares the disparate pieces of information gathered from various sources, using the relevant methods of data cleaning, categorization, normalization, and predictive modelling for each unique situation. The market trends are provided by our experienced analysts, taking into account recent notable events in the market, in both adjacent and related markets, the raw materials markets, and in those markets, which are the main demand creators for the product under research. The forecast is created using a set of predictive and analytical models, mainly by processing country-by-country data on consumption, production, exports, imports and prices, as well as industry, economic and consumption trends, in addition to possible political and technological trends patterns.

Source: Digital Journal

Milk prices started to decline last December and will continue to fall first quarter of 2018. Class III reached its peak last year in November at $16.88 but fell to $15.44 in December and it looks like January will be down to near $13.90. Class IV reached its peak last year in August at $16.61 fell to $13.51 in December and will be near $13.30 in January. While still not great milk prices in 2017 were the highest since 2014 and averaged well above 2016. Class III averaged $16.17 compared to $14.87 in 2016. Class IV averaged $15.16 compared to $13.77 in 2016. But, another good year of milk prices is needed to help dairy farmers to recover financially from low milk prices experienced in 2015 and 2016. But, it now looks like 2018 milk prices will average lower than 2017.

The lower milk prices are being driven by relatively high milk production, a decline in beverage milk sales, slower growth in butter and cheese sales and a decline in nonfat dry milk/skim milk powder (NDM/SMP) exports all resulting in relatively high stocks levels. Adjusting for 2016 leap year 2017 milk production was up 1.7%. With milk production this strong favorable milk prices require good domestic sales and increased dairy exports. Latest dairy export data for November shows 2017 exports did improve over 2016 particularly through July. Nonfat dry milk/skim milk powder exports ran above year ago levels starting the last half of 2016 through July of 2017. October NDM/SMP exports fell 34% below a year earlier but improved to just one percent lower in November. Butter, cheese and total whey exports have been higher than a year ago with year-to-date exports up 13%, 22% and 8% respectively. But, with relatively strong milk production and slower domestic sales stocks of dairy products are relatively high. In recent months butter stocks have been below year ago levels, but butter stocks grew by 6.2% November to December and are now 1.8% higher. December American cheese stocks were 2.8% higher and total cheese stocks 6.9% higher. November nonfat dry milk stocks were 40.2% higher and dry whey stocks 65.6% higher.

The price of butter has held well above $2 per pound during December and into January. But much lower cheese and dry whey prices lowered the Class III price. On the CME 40-pound cheddar blocks averaged $1.73 per pound in October, $1.66 in November but just $1.49 in December. Blocks have been as low as $1.475 in January recovering to $1.57 only to fall back to $1.495. Barrels averaged $1.70 in October, $1.66 in November and $1.54 in December. But in January barrels have been as low as $1.2175 with recovery to $1.36. Dry whey which was $0.51 per pound last April has been on a steady decline since with December $0.28 and now $0.25. With the butter price steady above $2 per pound lower nonfat dry milk prices have lowered the Class IV price. Nonfat dry milk started 2017 at $1.00 per pound declined each month since to $0.68 in December with January as low as $0.67 and recovering to $0.7175.

USDA has revised down its forecast for 2018 milk production to a 1.5% increase from 0.2% more milk cows and 1.3% more milk per cow. While this is a smaller increase in milk production that last year it is still a lot of milk requiring good domestic sales and dairy exports. There are good signs that butter and cheese sales could grow better in 2018 than last year. The economy is doing better and both the consumer confidence index and restaurant performance indexes are favorable for good sales. But dairy exports will face increased competition for markets as world milk production is expected to increase. For 2016 through the first half of 2017 milk production was below year ago levels in major dairy exporters—EU, New Zealand, Australia and Argentina. But now milk production is running much higher. New Zealand is currently experiencing a major drought which will dampen increases in their milk production the last half of their season. World demand is picking up which will absorb some of the increase in world milk production. China in particular has stepped up its imports.

So for 2018 we could see Class III prices in the $13’s first quarter, the $14’s second quarter, low $15’s third quarter and the mid to high $15’s fourth quarter and averaging around $14.90 for the year. Class IV could be in the $13’s through May, the $14’s through September and the low $15’s last quarter and averaging about $14.25 for the year. Current dairy futures for Class III and Class IV show even lower prices. But prices may well end up averaging a little higher. The low milk prices first half of the year could well lower both the number of milk cows and the increase in milk per cow. Dairy exports for the second half of the year could also do better than now expected.

December milk production may give some indication of milk production going into 2018. After declining for the previous three months December milk cow numbers increased 3,000 head and stood at 0.5% higher than a year ago. The increase in milk per cow continued below trend being just 0.6% higher resulting in December milk production 1.1% higher than a year ago bring the total for the year to 215.4 billion pounds, 1.4% higher than 2016. Increases in milk production for the past four months have been about 1%. If the increased in 2018 milk production ends up less than the 1.5% USDA is now forecasting , milk prices could improve for the second half of the year. The five leading dairy state—California, Wisconsin, Idaho, New York and Michigan produce 51% of total milk production. In December three had December production below a year ago—California -0.3%, Idaho -0.2% and New York -2.2%; and two had more production—Wisconsin +1.0% and Michigan +2.5%. The combined December production of these five states was just 0.1% higher than a year ago.

Source: University of Wisconsin Extension

At the Chicago Mercantile Exchange, Class III milk futures closed mostly lower Thursday on technical selling. January milk was up $0.03 closing at $13.92. February was $0.10 lower at $13.32. March closed $0.10 lower to $13.43. April milk was lower $0.05 at $13.68. The rest of the 2018 milk futures were mixed from six cents a hundredweight lower to a three cents higher.

Grade AA Butter was $0.0025 higher at $2.1225. Three loads were sold ranging from $2.1175 to $2.1250 Barrels were down $0.04 at $1.32. Thirteen loads were sold ranging from $1.32 to $1.33. 40 # blocks were $0.02 lower at $1.4750. Three loads were sold ranging from $1.4750 to $1.4875 Nonfat dry milk remained unchanged at $0.7175. One load was sold.

Trading of Class III milk futures closed lower Wednesday at the Chicago Mercantile Exchange as increasing dairy stocks and production weighed on prices. January milk was down $0.01 closing at $13.89. February was $0.09 lower at $13.42. March closed $0.08 lower to $13.53. April milk was lower $0.10 at $13.73. The rest of the 2018 milk futures were mixed from nine cents a hundredweight lower to a two cents higher.

Grade AA Butter was $0.0050 higher at $2.12. Barrels were down $0.0050 to $1.36. Four loads were sold ranging from $1.3325 to $1.36. 40 # blocks were $0.0650 lower at $1.4950. Five loads were sold ranging from $1.4950 to $1.56. Nonfat dry milk was unchanged at $0.7175. Eight loads were sold ranging from $0.7050 to $0.7175.

The USDA reports cash butter for the week ending January 20th averaged $2.18 per pound, $0.049 lower than the previous week. 40 pound blocks of cheddar were pegged at $1.32, $0.05 higher. 500 pound barrels averaged $1.43, a decrease of $0.069. Dry whey came out at $0.269, down $.011. Nonfat dry milk averaged $0.695, up $.004.

The Dairy markets were mixed Tuesday on the Chicago Mercantile Exchange. January milk was up $.01 at $13.90.  February was down $.09 at $13.51.  March was unchanged at $13.61.  April was up $.02 at $13.83.  The rest of the 2018 milk futures were also mixed.

Grade AA Butter was down $.0050 at $2.1150.  One carload sold at that price. Barrels were unchanged at $1.3650.  No sales were recorded. 40-pound blocks were down $.0100 to  $1.56.  No sales were recorded. Nonfat dry milk was up $.01 at $.7175 per pound. Two carloads sold at that price.

Dairy markets were mostly up on Monday on trading at the Chicago Mercantile Exchange. January milk was up $.01 at $13.89.  February was up $.04 at $13.60.  March was up $.07 to $13.61.  April was up $.10 at $13.81.  The rest of the 2018 milk futures were all up except November and December, which were unchanged.

Grade AA Butter was unchanged at $2.12.  Six carloads were sold ranging from $2.1050 to $2.12. Barrels were up $.02 to $1.3650.  Three carloads were sold ranging from $1.3650 to $1.37. 40-pound blocks were up $.0050 to  $1.57.  One carload of blocks was sold at that price. Nonfat dry milk was unchanged at $.7075 per pound. No sales were recorded Monday.

Cooperatives Working Together (CWT) has accepted 17 requests for export assistance from Dairy Farmers of America, Land O’Lakes, Northwest Dairy Association (Darigold) and Tillamook County Creamery Association. These cooperatives have contracts to sell 2.692 million pounds (1,221 metric tons) of Cheddar and Monterey Jack cheese and 39,683 pounds (18 metric tons) of butter to customers in Asia, the Middle East, North Africa and Oceania. The product has been contracted for delivery in the period from January through April 2018.

CWT-assisted member cooperative 2018 export sales total 5.334 million pounds of American-type cheeses and 729,730 pounds of butter (82% milkfat) to 10 countries on three continents. These sales are the equivalent of 65.744 million 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, thus expanding the demand for U.S. dairy products and the U.S. farm milk that produces them. This, in turn, 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

Dairy prices extended their strong start to 2018 at GlobalDairyTrade, rising at their quickest pace in 14 months, amid mounting concerns over New Zealand milk output, spurred by a sharp deterioration in Fonterra collections.

The GlobalDairyTrade index rose by 4.9% at Tuesday’s event, the quickest rise at the auction since November 2016, and taking to 7.2% its gains so far in 2018.

All six major products traded at the event rose in price, with the biggest gains seen in butter, which soared 8.8%, its quickest rise in eight months.

Whole milk powder, which accounts for the bulk of volumes traded, rose by 5.1% – well above the 1.8% gain in March futures in the dairy commodity as traded on the NZX exchange, and the rise of 2-4% forecast by ASB Bank.

Volume downgrade

The gains followed a caution last week by Auckland-based Fonterra, which runs GlobalDairyTrade (GDT), of a further cut in volumes sold through the auction, with the reduction blamed on weather setbacks to milk output in New Zealand, the top milk-exporting country.

The co-operative cut by 17,000 tonnes, to 615,004 tonnes, its forecast for its volumes sold through GDT over the next year, comprising a cut of 2,000 tonnes in the butter offering, 5,000 tonnes in the skim milk powder supply, and 10,000 tonnes in whole milk powder volumes.

“The reduction in volumes is driven by the impact of dry weather on milk flows,” the group said, adding that it would “continue to keep a close eye on the impact that this is having on milk collections”.

‘Dry, hot weather’

Overnight, Fonterra – which last month cut by 45m kilogrammes of milk solids to 1.48bn kilogrammes of milk solids its forecast for its New Zealand milk collections in 2017-18, putting a 3% year-on-year decline on the cards – reported that its December receivals fell by 6%.

The decline was “due to dry weather across the country”, which “significantly impacted soil moisture and pasture quality”, and ironically followed on from an unduly wet start to 2017-18, which began in June.

The December dip was worst in North Island, where it reached 8%, with Fonterra saying that “dry, hot weather… caused the large decrease in production”.

The co-operative added that the arrival of early-January rainfall would “help in some regions.

“However, further rain in the next few weeks will be needed to see any recovery in production, particularly in Waikato, Taranaki and Central districts.”

Australia result

By contrast, Fonterra reported a 28% surge to 16.1m kilogrammes of milk solids in its collections in Australia, representing a swathe of producer sign-ups, besides better weather.

“Growth continues to be driven by new suppliers to the co-operative and strong seasonal conditions across Australia,” the co-operative said.

Source: Agrimoney

The last week’s Global Dairy Trade (GDT) event, hosted by Fonterra Co-op in New Zealand, saw prices rise by an average of 4.9%, relative to the auction held a fortnight earlier.

This was the second consecutive sale at which a strengthening of marketing returns had been recorded. The first event of the New Year saw GDT increase move forward by an average of 2.2%.

At this week’s event whole milk powder prices increased by 5.1%; skimmed milk powder by 6.5%; butter prices by 8.8% and cheddar cheese prices by 5.5%.

Fonterra has reported that December milk production in New Zealand was significantly down, 6% compared to December last year. Subsequently, Fonterra reduced forecasts for milk collection to 16,333 million litres for the 2017/18 season. As a result a feeling of unease within the marketplace has put upward pressures on prices.

Commenting on the latest GDT result, Ulster Farmers’ Union (UFU) Dairy Chairman William Irvine said: “The EU has a significant amount of skimmed milk powder in its stores. If these stores were to be opened, this would have an impact on price. This is not an overnight development, as the last auction a fortnight ago had risen by 2.2%.

“Whilst significant, it is a reflection of adverse weather in New Zealand. Closer to home, Dutch Dairy Board has seen stabilised prices and for some products, improved returns. Also, there has been an improvement in the Mozzarella price, up €100/tonne last, illustrative of good demand. The UFU Milk Price Index has risen by 1.07%.”

Holstein UK’s John Martin said: “New Zealand production levels are currently unstable but, over the calendar year, I think production will be up overall. Demand continues to increase with Chinese buying a help.

“EU production is up slightly overall in 2017 with large increases recorded at the end of the year.”

He added: “We remain the largest exporter of dairy but global demand is currently keeping pace with production. However, there is no room for sustained large increases in production as the EU intervention options have changed with no soft landing.

“I do believe that a production reduction tool will be used within the next 12 months if the supply trend continues in the EU, as it has in the last quarter of 2017.” 

Source: Farming Life

By: Arden Tewksbury

After consultation with government and industry personnel, it’s very clear that milk prices paid to dairy farmers in 2018 still will not be pretty.

The price in Federal Order #1 could average between $16.40 per cwt. and $16.60 per cwt. (hundredweight) for this year. This is deplorable, and this time, something must be done.

What happens to dairy farmers in Federal Order #1, will also happen all across the United States. These prices should not be happening, and action must be taken to soften this blow to all dairy farmers, and I don’t mean tinkering with the ill-fated Margin Insurance Program.

Does anyone remember the Federal Milk Marketing Improvement Act that was introduced by the late Senator Arlen Specter and Senator Robert P. Casey, Jr. (D-PA)?

Many politicians and dairy farmers turned their heads away from this proposal. If it had been passed, chances are that the present mess that dairy farmers are facing could have been avoided.

At a listening session conducted by Pennsylvania Congressman GT Thompson (R-PA) and several other US Congressmen, no one less than Congressman Colin Peterson (D-MN) admitted that he worked with the National Milk Producers Association in developing the Margin Insurance Program, and Congressman Peterson admitted that program failed.

If anyone can remember, I wrote several editorials predicting the Margin Insurance Program would turn out to be a failure, and it did.

Maybe it’s time for Congressman Peterson and other elected officials to listen to some other people besides always depending on National Milk and IDFA.

Pro-Ag and other people are proposing temporary solutions to the dairy farmers’ crisis until either Congress or the USDA can come up with a feasible pricing system that would allow dairy farmers an opportunity to cover their cost of production.

Certainly Congress has the ability and responsibility to either peg the Class I price to a level of at least $20 per cwt. or, more feasible, place a floor price under all milk used for manufacturing dairy products, which would also raise the Class I price.

These actions would stabilize prices paid to dairy farmers.

Source: Wisconsin State Farmer

According to many officials in Washington DC, the economy in the United States is really taking off. This may be true. Maybe millions of people will be benefiting from the new tax bill. However, who is being left behind?

I don’t hear anything from DC from either party that will benefit area dairy farmers. What politicians must realize is, that dairy farmers do not want a hand out from anyone. All they want is a fair price for the nutritional milk their great dairy animals produce. This milk is one of the most nutritional foods that consumers need.

Now is the time that dairy farmers support the efforts of the people that really want to generate a fair price for all dairy farmers.

There are certain things that Congress and the USDA can and must do.

1) Congress could and should peg the Class I price and all Federal Orders at least at $20 per cwt. (hundred pounds).

2) An alternate to number one, would be for Congress to place a floor price under all milk used to manufacture dairy products. This could be done in two increments, and reach $20 per cwt.

3) The USDA should and must call a national milk hearing and give the dairy farmers a chance to testify.

4) Sooner, not later, the industry must give credence to a reasonable milk supply management program that is fair to everyone.

5) Members of Congress and the USDA must answer the question, “Why does the Federal Milk Marketing Orders Formula allow a make allowance (nearly $2 per cwt.) to be credited to milk handlers when they convert milk into dairy products, but neither the USDA nor Congress will listen to a cost of production formula for dairy farmers?” Isn’t this a double standard, with dairy farmers being on the short end of the stick again?

6) Advertising and promoting milk: Let’s be honest, while neither of the two major political parties have been fair to the American dairy farmers. However, the past administration certainly did harm to our dairy farmers by developing unwise standards for our school lunch program. Don’t they realize that the present school lunch program is ruining future milk drinkers by not having good tasting whole milk? All dairy farmers must immediately confer with members of Congress and the current administration to correct the inequities in the school lunch program; especially milk. It’s high time that schools be allowed to have the choice to serve whole milk, both white and flavored. Whole milk certainly belongs in our school lunch program. Please get after all of our elected or appointed officials.

Do you need a reason to do the above? The reason is that the milk you produce in December and January will go way below $17 per cwt. It’s time to get with it.

Pro-Ag can be reached at 570-833-5776.

Source: Madison County Courier

At the Chicago Mercantile Exchange, Thursday results where mixed. January milk was down $.01 at $13.83.  February was down $.15 at $13.54.  March was down $.23 to $13.52.  April was down $.29 closing at $13.73.  The rest of the 2018 milk futures were all down.

Grade AA Butter was down $.0175 closing at $2.1325.  Two carloads were sold at $2.13.25 and $2.1350. Barrels were up $.0275 to $1.35.  Seven carloads were sold ranging from $1.35 to $1.3750. 40-pound blocks were up $.0275 to  $1.55.  One carload of blocks was sold at $1.5550. Nonfat dry milk was up $.0075 at $.7150 per pound. Three carloads were sold, one at $.7125 and two at $.7150.

At the Chicago Mercantile Exchange the Dairy market trading was all up except for butter for the second day in a row. January milk was up $.07 at $13.84.  February was up $.32 at $13.69.  March was up $.32 to $13.75.  April was up $.21 closing at $14.02.  The rest of the 2018 milk futures were all up from four to eighteen cents

Grade AA Butter was down $.01 closing at $2.15.  One carload was sold at that price. Barrels were up $.0475 to $1.3225.  Sixteen carloads were sold ranging from $1.30 to $1.3225. 40-pound blocks were up $.0550 to  $1.5225.  Two carloads of blocks were sold at $1.50 and $1.5225. Nonfat dry milk was up $.0175 at $.7075 per pound. Ten carloads were sold ranging from $.70 to $.71 cents per pound.

Global dairy prices surged in the second auction of the year as buyers anticipated sluggish supply from the world’s largest milk exporter, New Zealand.

The Global Dairy Trade Price Index climbed 4.9 percent – the largest gain in more than a year – with an average selling price of $3,310 per tonne, in the auction held early on Wednesday. The lift was largely on the back of the world’s biggest dairy processor, Fonterra , slashing its New Zealand milk collection as the country struggles with unusually dry weather.

The index had risen 2.2 pct at the previous sale, according to GDT Events, snapping a losing streak that had left farmers worried that they would receive a lower payout in 2018.

Nevertheless, analysts cautioned the gains might ease off in coming months given global supply for some products remained strong.

“Poor milk production from NZ should be supporting prices for WMP (whole milk powder) … as NZ is the key supplier,” said Amy Castleton, analyst at AgriHQ.

“But global milk production is continuing to grow – notably that coming out of Europe and the U.S. – so plenty more SMP (skim milk powder), butter and cheese will make its way onto the global market in coming months.”

Whole milk powder jumped 5.1 percent at the latest auction, and skim milk powder also posted strong gains of 6.5 percent.

Auction results can affect the New Zealand dollar as the dairy sector generates more than 7 percent of the nation’s gross domestic product.

Despite the stellar result, the currency slipped 0.34 percent overnight to $0.7273 as it consolidated after a rally in
the past week.

A total of 23,319 tonnes was sold at the latest auction, falling 8.2 percent from the previous one, the auction platform said on its website.

A number of companies, including Dairy America and Murray Goulburn , use the platform to sell milk powder and other dairy products, with roughly half of buyers based in China as traders there seek to supplement flagging domestic milk supplies.

The auctions are held twice a month, with the next one scheduled for Feb. 6.

Source: Reuters

On trading on Tuesday at CME Dairy markets were all up except for butter. January milk was up $.01 at $13.77.  February was up $.30 at $13.37.  March was up $.27 to $13.43.  April was up $.27 closing at $13.81.  The rest of the 2018 milk futures were all up more than four cents.

Grade AA Butter was unchanged at $2.16.  There were no sales recorded. Barrels were up $.0575 to $1.2750.  Sixteen carloads were sold ranging from $1.2275 to $1.2750. 40-pound blocks were up $.0125 to  $1.4675.  Two carloads of blocks were sold at $1.4450 and $1.4675. Nonfat dry milk was up $.0225 at $.69 per pound.  Three carloads were sold at that price.

At the Chicago Mercantile ExchangeClass III milk futures closed mostly higher Thursday as traders bought back oversold positions. January milk was up $0.03 closing at $13.81. February was $0.08 higher at $13.21. March closed $0.07 higher to $13.25. April milk was up $0.07 at $13.65. The rest of the 2018 milk futures were mixed from three cents a hundredweight lower to a nickel higher.

Grade AA Butter was $0.0125 lower at $2.1550. One load was sold. Barrels were down $0.0050 to $1.29, the lowest settlement price since May 2016. Three loads were sold all at $1.29. 40 # blocks were $0.0025 lower at $1.4375. One load was sold. Nonfat dry milk was $0.0050 higher at $0.67. One load was sold.

In trading at CME, Class III milk futures closed mixed Wednesday on technical activity. January milk was down $0.02 closing at $13.78. February was $0.05 lower at $13.13. March closed $0.01 lower to $13.18. April milk was up $0.05 at $13.58. The rest of the 2018 milk futures were mostly higher by a penny to six cents a hundredweight.

Grade AA Butter was $0.0125 lower at $2.1675. One load was sold. Barrels were down $0.05 to $1.2950, the lowest settlement price since May 2016. 40 # blocks were $0.0150 lower at $1.44. Nonfat dry milk was $0.05 lower at $0.6650. Two loads were sold ranging from $0.66 to $0.06650.

The USDA reports cash butter for the week ending January 4th averaged $2.22 per pound, $0.011 lower than the previous week. 40 pound blocks of cheddar were pegged at $1.52, $0.034 lower. 500 pound barrels averaged $1.62, a decrease of $0.034. Dry whey came out at $0.285, down $.016. Nonfat dry milk averaged $0.704, down $.002.

California’s Department of Food and Agriculture says the statewide average price for Class I milk for February will be $15.49 per hundredweight, based on production, and $15.61, based on utilization. California’s nonfat dry milk price for the week ending January 5th averaged nearly $0.71 with sales of 4.5 million pounds. The price is down more than five percent from the previous week and 29 percent from the same week last year.

On continued pressure in the spot market, Class III milk futures at the Chicago Mercantile Exchange closed lower Tuesday.  January milk was down $0.05 closing at $13.80. February was $0.06 lower at $13.80. March closed $0.12 lower to $13.19. April milk was down $0.11 at $13.53.

Butter was $.01 lower at $2.18. One load was sold at $2.17. Barrels were down $.0250 to $1.55. Three loads were sold, ranging from $1.30 to $1.3025. 40 # blocks were $.0350 lower at $1.450. Three loads were sold, including two at $1.47 and one at $1.4550. Nonfat dry milk was $.0075 lower at $0.67. Seven loads were sold ranging from $0.6675 to $0.06750.

The Dairy markets were down on trading on Monday at the Chicago Mercantile Exchange. January milk was down $.09 at $13.85.  February was down $.20 at $13.24.  March was down $.19 to $13.31.  April was down $.19 closing at $13.64.  The rest of the 2018 milk futures were all down from four to fifteen cents a hundredweight.

Grade AA Butter was down $.0475 at $2.19.  There were no sales recorded Monday. Barrels were down $.0650 to $1.3250.  Eleven carloads were sold ranging from #1.3250 to $1.35. 40-pound blocks were down $.005 to  $1.49.   Nonfat dry milk was down $.0025 at $.6775.  One carload was sold at that price.

The Chicago Mercantile Exchange Dairy markets were mixed Thursday. January milk was up $.04 at $14.07.  February was up $.10 at $13.62.  March was up $.12 to $13.66.  April was up $.04 closing at $13.93.  The rest of the 2018 milk futures were all up except May, which remained unchanged at $14.27.

Grade AA Butter was up $.01 at $2.23.  There were five carloads sold ranging from $2.22 to $2.23. Barrels were down $.0025 to $1.3975.  40-pound blocks were down $.0125 to $1.495. No sales of blocks or barrels were recorded. Nonfat dry milk was unchanged at $.67.  Three carloads were sold ranging from $.6550 to $.67 per pound.

At the CME the Dairy markets were mostly down Wednesday. January milk was down $.01 at $14.01.  February was down $.07 at $13.52.  March was down $.03 closing at $13.54.  April was unchanged at $13.89.  Outside of June and July, the rest of the futures were unchanged or up for the remainder of 2018.

Grade AA Butter was up $.0125 at $2.22.  There were two carloads sold at that price. Barrels were down $.0275 to $1.40.  Eight carloads were traded ranging from $1.4025 to $1.4275. 40-pound blocks were down $.0175 to $1.5075.  One carload of blocks sold for $1.51. Nonfat dry milk was unchanged at $.67.  There were no nonfat dry milk sales recorded Wednesday.

The “rising tide of milk” has seen sentiment in the global dairy industry begin to wane, as growth in exportable surpluses across key milk-producing regions gains momentum, according to Rabobank’s latest Dairy Quarterly report. 

The report says the global market will “confront a wave of exportable surplus” in coming months, estimated to be 3.2 billion litres higher year-on-year (in liquid milk equivalents) for the six month period October 2017 to March 2018. 

“The recent growth in global milk supply, which peaked in the last quarter of 2017 with the Oceania spring peak and a return to growth in Europe, is taking its toll on global commodity prices,” said Rabobank senior dairy analyst Michael Harvey. 

Mr Harvey said supply growth was emerging as the biggest risk for global dairy markets, with the entire dairy complex witnessing weakness. 

“Even butterfat prices, which had been defying gravity, have fallen in recent months,” he said.

“However the low stocks of butter and robust demand are expected to support prices well above the five-year average. 

“Meanwhile skim milk prices remain depressed, with the closure of the European intervention scheme removing the floor and allowing prices to soften further.” 

While there is no immediate end in sight for weak skim milk powder prices, which have dragged the whole milk price lower, Mr Harvey said the global cheese market has “fared best” with the buoyant importing of cheese in countries like Japan and China providing support. 

Mr Harvey said with pressure expected to build on global commodity prices, the first signs of weaker milk prices (in local currency) had emerged in a number of export regions. 

“In Australia, the downward pressure on global prices, together with a stronger currency, has seen Rabobank revise its full-year milk price in southern export regions for 2017/18 to AUD 5.50/kgMS, down AUD 0.20/kgMS on previous forecasts – but excluding any supplementary payments and market premiums,” he says. 

While the growth in global exportable surpluses is likely to place pressure on the global dairy complex through to the middle of 2018, Mr Harvey said exportable surpluses were not expected to completely overwhelm global markets, helped by strategies to limit supply growth from processors.

“China will also play a key role in ensuring global markets remain ‘fairly balanced’, with their import purchasing demand, assisted by lower-than-expected milk supply and some improvements in demand, expected to remain active throughout 2018,” he said. 

Mr Harvey says there is unlikely to be a smooth recalibration of the dairy complex, however Rabobank is forecasting a gradual tightening of exportable supplies through the second half of 2018. 

“Much will hinge on production trends in Europe, and while supply growth is set to continue, an easing of milk prices and efforts to contain supply growth in some regions is likely to constrain growth,” he said. 

Dairy policy interventions in the EU will be a key ‘watch factor’ in 2018, as well as the risk of a US exit from NAFTA, and geopolitical tensions – all of which could create volatility in global dairy markets. 

Aussie outlook

Mr Harvey says improving milk prices and favourable seasonal conditions were starting to flow into a recovery in Australian production and exports, with national milk production forecast to increase by 2.7 per cent in the 2017/18 season. 

“With most of the growth coming from the southern export regions, particularly Victoria, the good reserve of high-quality fodder, good soil moisture and high water entitlement for irrigators is boding well for a strong shoulder and solid finish to the season,” he said.

Mr Harvey says Australia’s exportable surplus has contracted significantly over the past 18 months, and “it is only now that the benefit of improving milk supply will start to drive a recovery”.

“In export markets, while demand growth is starting to moderate following a period of robust growth, dairy demand in emerging economies appears to be strong, with robust import purchasing in key deficit regions, including South-East Asia,” he said. 

Source: North Queensland Register

For the 2nd consecutive day dairy markets where mostly up Thursday on trading at the Chicago Mercantile Exchange. December Class III milk futures were unchanged at $15.42. January milk was up $.07 at $14.07. February was up $.12 at $13.73. March was up $.07 closing at $13.69. April was up $.09 at $14.01. The rest of the 2018 milk futures were all up or unchanged

Grade AA Butter was up $.005 closing at $2.2075. There were no sales recorded Thursday. Barrels were unchanged at $1.44. Four carloads were traded with three at $1.44 and one at $1.4450. 40-pound blocks were up $.02 to $1.5275. Two carloads of blocks were traded at $1.5175 and $1.5275. Nonfat dry milk was up $.01 closing at $.67. Five carloads were sold ranging from $.67 to $.6725 per pound.