In Class III trade at the Chicago Mercantile Exchange, milk futures were mostly higher with the most active months supported by an oversold bounce. October was up $.03 at $14.71, November was $.21 higher at $15.25, December was up $.14 at $15.27, and January was $.10 higher at $15.42.

In the spot market, cash cheese was higher. Blocks were up $.035 at $1.585. The last unfilled bid was on one load at that price. Barrels were $.03 higher at $1.49. There were a total of four loads sold. The last unfilled bid was on one load at $1.49.

Butter was $.005 lower at $1.78. There were two loads sold at $1.78, along with one at $1.785. The last unfilled bid was on one load at $1.77.

Nonfat dry milk was up $.0125 at $.8825. There were two loads sold, both at $.87. The last unfilled bid was on one load at $.8825.

Source: Brownfield Ag News

In Class III trade at the Chicago Mercantile Exchange, milk futures were lower, following the recent trend and expecting big domestic production this year. October was down $.05 at $15.16, November was $.19 lower at $15.44, December was down $.13 at $15.37, and January was $.08 lower at $15.30.

Cash cheese blocks were unchanged at $1.5325. Barrels were down $.0225 at $1.4875. There were six trades reported, including two at $1.4875. The last uncovered offer was for one load at $1.51.

Butter was $.0075 lower at $1.89. There were two trades, one at $1.895 and one at $1.8925. The last uncovered offer was for one load at $1.89.

Nonfat dry milk was up $.0025 at $.93 with one load sold at that price. There was one unfilled bid and one uncovered offer, both at $.93.

For October and November, California’s Department of Food and Agriculture has the Class II milk price for Northern California at the equivalent of $14.21 per hundredweight with Southern California at $14.45. Class III statewide is set at $14.16. In September, the Class IV A statewide price was $13.58 with Class IV B at $15.24.

Source: Brownfield Ag News

Rural lending specialist Rabobank expects farmgate milk prices to lift towards the low $6.00 per kg mark, up from its previous forecast of a price in the the mid to high $4s, if world dairy production continues to decline.

New Zealand dairy analyst Emma Higgins, commenting ahead next week’s quarterly report by the bank on the world’s dairy sector, said wholemilk powder prices could reach US$3300 a tonne by early next year.

A wholemilk powder price of between US$3000 to US$3500/tonne, which compares with the last GlobalDairyTrade price of $2782 a tonne, would put most Kiwi farmers back on a more solid financial footing after two years of heavy losses.

Higgins joins ASB Bank rural economist Nathan Penny, who has for some time been at the optimistic end of the market with a $6.00/kg milk price forecast for the current year.

She said declines in world production could lead to wholemilk prices reaching US$3300 a tonne by the second quarter of next year and $3400 by the third.

“It could be a low $6.00 figure, which is obviously fantastic news for farmers and also for the wider New Zealand economy,” Higgins told rural broadcaster Jamie Mackay on The Country.

“In these markets, things can move very quickly and that’s what we have seen quite recently,” Higgins said.

“We have seen a rapid tightening of market fundamentals – largely around global production reducing at a very rapid rate, given that those low farmgate milk prices are biting right around the world and that’s really impacting on production,” she said.

Strong demand in Europe and the US had further reduced the volume of product available for the export market, she said.

Higgins said much would depend on the exchange rate, but that a milk price over $6.00/kg would be “great news for New Zealand dairy firms and the greater New Zealand economy”.

“We are certainly more positive and have lifted our expectations for the coming season, given how quickly that production is plummeting and around the globe in the face of some steady demand,” Higgins told the Herald.

European milk production has decreased for the first time since early 2015, with volumes in June down 2 per cent compared to last year.

Fonterra, in its latest global update, said Asia had returned to strong import growth in the last month, and in China and Latin America growth continued. Middle East and Africa imports had slowed, it said.

The co-op expects milk collection in New Zealand for the 2016/17 season forecast to be down by 3 per cent compared with last season.

Fonterra’s payout for 2015/6 came to $4.30/kg, comprising a farmgate milk price of $3.90 per kg and a dividend of 40 cents per share. The co-op last month revised up its farmgate milk price for the current season by 50c to $5.25 a kg.

Source: NZ Herald

In Class III trade at the Chicago Mercantile Exchange, milk futures were mostly lower with the more active months resuming the recent trend. September was down $.02 at $16.39, October was $.13 lower at $15.14, November was down $.15 at $15.52, and December was $.08 lower at $15.43.

Cash cheese blocks were down $.005 at $1.5325. There were six loads sold, including three at $1.5375, two at $1.535, and one at $1.5325. The last unfilled bid was on one load at $1.53. Barrels were $.005 lower at $1.475. There were 11 loads sold, nine at $1.45, one at $1.46 and one at $1.475.

Butter was down $.005 at $1.915. There were six loads sold, ranging from $1.91 to $1.935.

Nonfat dry milk was $.0075 at $.945. There were two loads sold at that price. The last unfilled bid was on one load at $.94. The last uncovered offer was for one load at $.9475.

The USDA says the dairy prices received index during August 2016 was 85.1%, up 6.2% from July 2016 and 2.4% higher than August 2015. The all milk price was reported at $17.00 per hundredweight, up $1.00 on the month and $.40 on the year. For all ag prices received, the index was unchanged from a month ago and down 12% from a year ago. The prices paid index was 0.8% lower with lower prices for concentrates, nitrogen, feed grains, and complete feeds.

Source: Brownfield Ag News

Global dairy prices are rising as farmers around the world cut back on production, but local prices are still below the cost of production for many south-east Australian farmers.

The previous Global Dairy Trade auction, run twice a month by New Zealand cooperative Fonterra, saw prices lift by 1.7 per cent, lifting the index of bulk commodities to its highest level since March 2015.

Analysis by National Australia Bank revealed its own index of dairy export prices lifting 21.5 per cent in September.

Improved market conditions have led processors in Australian and New Zealand, including Murray Goulburn, Fonterra and NZ’s Tutua to lift prices from their initial offering at the season’s opening in July.

But for many farmers, the price rises will be cold comfort until they lift beyond the break even point.

“Warrnambool Cheese and Butter is advertising their current price at $5 per kilogram of milk solids (kgms),” dairy farmer Nicholas Renyard said.

“I put that into my spreadsheet last night and that it gets us to the $4.80 kgms mark, so it’s moving in the right direction.

“We’re not at a profitable point yet, but it’s looking more positive [and] I’m hoping with a few changes that we’re making that we’ll be in amongst them very soon.”

Production on Mr Renyard’s farm is dropping slightly this year off the back of a harsher winter, but he is not culling cattle to cut back.

Many farmers getting rid of cattle says analyst

Rabobank senior analyst Michael Harvey said recent figures indicated many farmers were taking advantage of the high beef price and getting rid of cattle.

“The numbers have certainly come through for July showing production down in double digits,” Mr Harvey said.

“It indicates how severe the situation is for producers and the need to produce stocking rates.”

A driving force behind the dairy crisis that hit south-east Australian farmers this year was the combined effect of Europe removing its production quotas, Russia banning dairy imports and a drop in demand from China.

In Europe, where analysts expect a 40 per cent reduction in dairy farms by 2025, farmers will be soon be offered government payouts to reduce output.

However, NAB agricultural economist Phin Ziebell is not predicting underlying demand to change over the medium term.

“With the oil price crash, you’ve seen problems with the rouble and the Russian economy more broadly, so their ability to buy back into global dairy markets even absent an embargo is an open question,” Mr Ziebell said.

“On the China story, the steady domestic rise in production, despite it being high in cost, is a real limit to the upside there, particularly for commodity grade milk powders.”

The next Global Dairy Trade auction takes place on 4 October 2016.

Source: ABC

In Class III trade at the Chicago Mercantile Exchange, milk futures were higher on an oversold bounce after the recent losses. October was up $.07 at $15.27, November was $.24 higher at $15.67, December was up $.24 at $15.51, and January was $.17 higher at $15.33.

Cash cheese barrels were up $.0025 at $1.5375. There were five loads sold, four at $1.535 and one at $1.5375. The last unfilled bid was on one load at $1.535. Barrels were $.02 higher at $1.48. There were a total of thirteen loads sold, mostly in one load increments, ranging from $1.445 to $1.48.

Butter was down $.015 at $1.92 with one load sold. The last unfilled bid was on one load at $1.85.

Nonfat dry milk was unchanged at $.955. The last unfilled bid was on one load at $.94.

For the week ending September 24th, the USDA says butter averaged $2.03 per pound, down $.031 on the week. 40 pound blocks of cheddar came out at $1.72, $.036 lower, and 500 pound barrels averaged $1.64, a drop of $.081. Dry whey was pegged at $.31, up three tenths. Nonfat dry milk averaged $.902, a half penny higher.

California’s Department of Food and Agriculture reports that for the week ending September 23rd, the state’s average nonfat dry milk price was just over $.87, up slightly on the week. Sales of 9 million pounds were down about 3.25 million pounds.

According to HighGround Dairy, European Union dairy prices for the week ending September 23rd were mostly steady to higher. EU milk production has declined recently and the United Kingdom’s cow cull in August was up 9% on the year.

Source: Brownfield Ag News

In Class III trade at the Chicago Mercantile Exchange, milk futures had another round of pressure from expanding U.S. production projections and bearish technical momentum. October was down $.14 at $15.20, November $.14 lower at $15.43, December was down $.17 at $15.27, and January was $.17 lower at $15.16.

Cash cheese was lower. Blocks were down $.01 at $1.535. There were a total of seven loads sold, one at the closing price. The last uncovered offer was for one load at $1.54. Barrels were $.02 lower at $1.46. There were ten loads sold, two at $1.46. The last uncovered offer was for one load, also at $1.46.

Butter was down $.04 at $1.935. The last uncovered offer was for one load at that price.

Nonfat dry milk was up $.0075 at $.9525 with one load sold. The last unfilled bid was on one load at $.93. The last uncovered offer was for one load at $.97.

The CME Group announced that starting in December, spot dairy markets will begin transitioning from open outcry to CME Direct Auction Platform. The first commodity to make the move will be nonfat dry milk with butter and cheese expected to start trading on that platform in the first quarter of 2017.

Cooperatives Working Together made two new announcements of cheese export assistance. The first was for 19 requests from unnamed member coops on 3.702 million pounds of Cheddar, Gouda, and Monterey Jack cheeses to Asia with delivery for September through December of this year. The second was on 13 requests from DFA, Darigold, and the Tillamook County Creamery Association for 2.288 million pounds of Cheddar and Monterey Jack to Asia, Central America, the Middle East, North Africa, and Oceania, also for delivery from September through December.

According to HighGround Dairy, dairy exports by New Zealand during August were mostly down on the month and the year. Nearly all sectors are ahead of last year’s pace, including a big year to year jump for infant formula with strong demand reported for Australia, China, and Hong Kong. Milk powder exports from New Zealand hit a seven year low.

Source: Brownfield Ag News

In Class III trade at the Chicago Mercantile Exchange, milk futures continued the recent lower technically and fundamentally driven trend. According to HighGround Dairy, contracts closed just above the session lows for the third consecutive session with the most active months closing below the 200-day moving average. September was unchanged at $16.38, October was down $.22 at $15.34, November was $.21 lower at $15.57, and December was down $.29 at $15.44.

Cash cheese blocks were down $.015 at $1.545. There were a total of six loads sold, including four at the closing price. The last unfilled bid was on one load at $1.545. The last uncovered offer was for one load at $1.55. Barrels were $.03 lower at $1.48. There were three loads sold, one at $1.4825 and two at $1.4725. The last unfilled bid was on one load at $1.48. The last uncovered offer was for one load at $1.49.

Butter was down $.0525 at one $1.975. There was one trade at that price.

Nonfat dry milk was up $.01 at $.945. The last unfilled bid was on one load at that price.

According to the El Paso County and Pueblo City and County health departments in Colorado, at least a dozen people in those counties have been sickened by harmful bacteria in raw milk. The type of bacteria, Campylobacter, can only be killed by pasteurization. Raw milk sales for human consumption are against the law in Colorado and while members of herdshare programs can obtain raw milk, that raw milk cannot be given or sold to non-herdshare members. A statement from El Paso and Pueblo counties indicate some of the people sickened are not herdshare members and members at the dairy involved have been notified of the infections.

Source: Brownfield Ag News

In Class III trade at the Chicago Mercantile Exchange, milk futures were mostly lower with the most active months down on follow through selling. September was up $.02 at $16.38, October was down $.28 at $15.66, November was $.25 lower at $15.90, and December was down $.11 at $15.85.

In the spot market, cash cheese blocks were down $.0225 at $1.5625. The last unfilled bid was on two loads at $1.56. The last uncovered offer was for one load at $1.5625. Barrels were unchanged at $1.51. There were a total of thirteen loads sold, including one at the closing price and six at $1.48.

Butter was up $.0325 at $2.00. There were three loads sold, one at $2.00 and two at $1.99. The last unfilled bid was on one load at $1.98. The last uncovered offer was for one load at $2.00.

Nonfat dry milk was $.0125 higher at $.935. There were seventeen loads sold, including three at $.935 and ten at $.925. The last unfilled bid was on five loads at $.935.

For the week ending September 17th, the USDA says butter averaged $2.07 per pound, down 4.6 cents from the week ending the 10th. 40 pound blocks of Cheddar came out at $1.76, 3.7 lower, and 500 pound barrels averaged $1.72, down 3.8. Dry whey was pegged at $.306, up 0.9. Nonfat dry milk averaged $.898, 1.7 cents higher.

The USDA has announced the base Class I milk price for October at $16.60 per hundredweight, up $.04 from September. The skim price is $8.78, $.61 higher.

The USDA says the dairy cow slaughter during August under federal inspection totaled 244,600 head, up from July and August 2015. The year to date total is 1.907 million head, a little bit behind last year. Dairy cows made up 9% of total monthly production, slightly less than the aggregate for the year to date. The dressed weight of all cows was 635 pounds, down 2 on both the month and year.

Source: Brownfield Ag News

In Class III trade at the Chicago Mercantile Exchange, milk futures were higher, seeing a rebound from the recent losses. September was up $.01 at $16.35, October was $.46 higher at $16.20, November was up $.47 at $16.48, and December was $.38 higher at $16.26.

Cash cheese was higher, rebounding after the recent mostly lower trade. Blocks were up $.01 at $1.5975. The last unfilled bid was on one load at that price. Barrels were $.0325 higher at $1.5075. There were a total of eleven trades, including nine at $1.505. The last unfilled bid was on two loads at $1.5075.

Butter was down $.0125 at $1.955. There were a total of eight trades, one at the closing price. The last unfilled bid was on one load at $1.94. The last uncovered offer was for one load at $1.955.

Nonfat dry milk was unchanged at $.92. There was one trade at that price, along with two loads at $.91. The last unfilled bid was for two loads at $.91. The last uncovered offer was for two loads at $.92.

The Global Dairy Trade Index was up 1.7% to $2,975 per ton, essentially firm after three consecutive sharply higher auctions. Whole milk powder was down 0.2%, while the other categories were higher, including a 7.0% gain in butter milk powder. The next auction is scheduled for Tuesday, October 4th.

Source: Brownfield Ag News

International milk prices rose while volumes dropped in this month’s second auction held by New Zealand’s Fonterra Co-operative Group, the world’s biggest dairy exporter.

Fonterra’s GDT Price Index climbed 1.7 percent, with an average selling price of $2,975 per ton, in the auction held on Tuesday.

The index rose 7.7 percent at the previous sale, said Fonterra, which is known for brands such as Anchor, Anlene and Fresh n’ Fruity.

A total of 35,086 tons was sold at the latest auction, falling 4.5 percent from the previous one, the cooperative said on its website.

The auctions are held twice a month, with the next one scheduled for October 4.

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

The New Zealand milk co-operative, which is owned by about 10,500 farmers, controls nearly a third of the world dairy trade.

Source: Reuters

The latest NZX futures market points to an 8-10% rise in whole milk powder (WMP) prices at tomorrow’s Global Dairy Trade auction, New Zealand bank ASB has said.

Last week, WMP futures prices broke through the US$3,000/MT barrier and look set to remain above that barrier until July.

Futures prices for October WMP contracts at the latest NZX futures market suggest that WMP will trade at US$3,120/MT.

As reported last week, these positive futures prices could point to a fourth consecutive price rise at tomorrow’s Global Dairy Trade.

The last three Global Dairy Trade auctions have all been positive auctions, up 7.7%, 12.7% and 6.6% respectively.

At the most recent auction, the main movers being anhydrous milk fat (AMF) (+15.4%) butter (+14.9%) and skimmed milk powder (SMP) (+10%).

Following these positive auctions, farm organisations have said that dairy farmers would expect legitimate increases in the August milk price and several Irish co-ops have increased the milk price for August supplies.

Last week, it was announced that farmers supplying Arrabawn will receive a base milk price of 25.67c/L for August while Dairygold is to pay its suppliers an August milk price of 24.5c/L plus a Quality Bonus (0.5c/L) and VAT.

Lakeland Dairies also announced a milk price rise last week of 1c/L bringing the base price to 25c/L and Kerry increased its milk price for August supplies of milk by 2.5c/L, which will see member suppliers receive 25c/L, including VAT, for August milk.

Meanwhile, Glanbia member suppliers will receive 25c/L for August supplies, which includes a 2c/L Glanbia Co-operative Society support payment to its members.

Source: Agriland

2With Cheddar cheese barrels suffering the largest losses, prices were headed downward through Wednesday of this week in the CME Group spot market for dairy commodities.

Cheddar barrels declined by 2.25 cents to close at $1.5275 per pound on Wednesday as five carloads were sold to bring the week’s total to 29 sales, a bid to buy four carloads was not filled, and an offer to sell one carload was not covered. The day’s closing price was down by 13.25 cents per pound from a week earlier.

Cheddar cheese blocks posted a .50 cent per pound gain on Wednesday but the day’s settling price of $1.67 was 5 cents lower than a week earlier. The five carloads sold during the session were the first spot market sales of the week. A bid to buy two carloads was not filled.

Butter slippage

AA butter joined Cheddar barrels with a 2.25 cent per pound drop in the price on Wednesday as the result of an unfilled bid to buy one carload. This left the price at $2.01 per pound.

Grade A non-fat dry milk held at 90.50 cents per pound. The day’s market activity was also an unfilled bid to buy one carload.

The price trends for dairy commodities in the United States are running counter to prices paid in New Zealand’s Global Dairy Trade auction held earlier this month. Winning bids were up by 14.9 percent for butter and 9 percent for Cheddar cheese in the auction which attracted 199 world-wide bidders.

Futures in $16s per hundred

With only single digit per hundred changes in Class III milk futures in trading through early Wednesday afternoon at the CME Group, prices stood in the $16s per hundred for all but two of the upcoming 24 months through August of 2018.

Prices for nearby months on Wednesday were $16.46 per hundred for September, $16.47 for October, and $16.40 for November. The only exceptions to the prevailing of $16s per hundred in the Class III milk futures were $15.92 and $15.94 for January and February of 2016 respectively.

In the dry whey futures market, where several months had small price setbacks on Wednesday, the 30.5 cents per pound for September was the lowest on the trading board. All other prices through August of 2018 were between 35 and 40 cents per pound.

Negative August PPD

The producer price differential (PPD) in the Upper Midwest federal milking marketing order 30 for August is a minus 25 cents per hundred in the Chicago base zone. Because of the transportation allowance in the formula, it is a minus 45 cents at the most distant milk receiving plants.

Because of the negative PPD value for the month, the amount of milk pooled in Order 30 for August dipped to just over 2.173 billion pounds. Uses of the pooled milk were 13.2 percent in Class I (fluid bottled milk), 9 percent in Class II (soft dairy products), 71.8 percent in Class III (cheese), and 6 percent in Class IV (butter and milk powders). The pooled milk had averages of 3.67 percent butterfat, 3 percent protein, and 5.75 percent other solids.

Source: Wisconsin State Farmer

In Class III trade at the Chicago Mercantile Exchange, milk futures were mixed on spread activity. September was down $.02 at $16.45, October was $.03 lower at $16.47, and November was down $.03 at $16.42, while December was up $.02 at $16.13.

Cash cheese was mixed. Blocks were up $.005 at $1.67. There were five trades reported, two at the closing price. The last unfilled bid was on one load at $1.665. Barrels were down $.0225 at $1.5275. There were a total of five loads sold, one at the closing price. The last unfilled bid was on four loads at $1.525.

Butter was $.0225 lower at $2.01. There was one load sold at that price. The last unfilled bid was on one load at $2.00.

Nonfat dry milk was unchanged at $.905. The last unfilled bid was on one load at $.89.

The California Department of Food and Agriculture reports the average nonfat dry milk price for the week ending September 9th was $.86 per pound, up $.015 on the week, with sales of 9.7 million pounds, down more than a million from the week before.

For the week ending September 10th, the USDA says butter averaged $2.10 per pound, down 2.2 cents on the week. 40 pound blocks of cheddar cheese were pegged at $1.80, 2.9 cents lower, and 500 pound barrels averaged $1.76, an 11.5 cent drop. Dry whey came out at $.297, a slight week to week decrease. Nonfat dry milk averaged $.882, up 2.9 cents.

HighGround Dairy says European Union dairy prices were higher, with most commodities up about 3% on the week. French whey powder prices did jump 12.2%, hitting two year highs. Milk production for the year to date in France, Germany, and the United Kingdom are below year ago levels. The European Commission reduced its 2016 milk production guess, now only calling for a year to year increase of 0.9%.

Source: Brownfield Ag News

AUSTRALIA – Murray Goulburn Co-operative Co. Limited (MG) today announced a step-up in milk prices by the equivalent of $0.15 per kilogram milk solids (kgms).

MG’s Interim Chief Executive Officer David Mallinson said: “Market conditions remain volatile however we have been able to capture enough of the current uplift to pass on both a step-up and modest increase in full year forecast to suppliers today.

“Whilst international dairy markets have improved recently, they remain below historical average levels. Recent signs of recovery have come as global milk supply slows year-on-year. However, commodity prices and the strength of the Australian dollar remain a source of risk to current full year forecast.

“MG remains determined to deliver higher returns to its supplier shareholders through operational excellence and innovation. We have recently announced significant headcount reductions within the business and continue to review all other costs to support this objective.”

Source: The Cattle Site

In Class III trade at the Chicago Mercantile Exchange, milk futures were pressured by the USDA’s new production and price outlook, along with follow through technical selling. September was down $.08 at $16.43, October was $.27 lower at $16.43, November was down $.24 at $16.35, and December was $.15 lower at $16.05.

Over in the spot market, cash cheese was lower. Blocks were down $.06 at $1.65. The last uncovered offer was for one load at that price. Barrels were $.035 lower at $1.57. There a total of 14 trades reported. The last unfilled bid was on one load at $1.56. The last unfilled offer was for one load at $1.59.

Butter was unchanged at $2.0325. There was one load sold at that price, along with one at $2.0125. The last unfilled bid was on one load at $2.00. The last uncovered offer was for one load at $2.04.

Nonfat dry milk was steady at $.905. The last unfilled bid was on one load at $.89. The last uncovered offer was for one load at $.93.

In the supply and demand update, for 2016, the USDA now sees milk production at 212.2 billion pounds, up 100 million from August. Price projections for milk, cheese, and butter were lower, while nonfat dry milk and dry whey price outlooks were higher. The third quarter price for all milk is estimated at $16.75 to $16.95 per hundredweight with the fourth quarter at $17.25 to $17.75. The annual price is expected to be between $16.10 and $16.30. For Class III, the 2016 price is pegged at $14.75 to $14.95 with Class IV at $13.65 to $13.95. Cheese is estimated at $1.60 to $1.62 per pound with butter at $2.08 to $2.12. Nonfat dry milk is seen at $.81 to $.83 with dry whey at $.26 to $.28.

For 2017, milk production is estimated at 216.1 billion pounds, up 300 million on the month. Month to month, dairy prices were mixed. All milk for 2017 is projected at $16.15 to $17.15 per hundredweight with Class III at $14.95 to $15.95 and Class IV at $13.80 to $14.90. Cheese is expected to be between $1.605 and $1.705 and butter is pegged at $1.955 to $2.085. Nonfat dry milk is seen at $.89 to $.96 with dry whey at $.295 to $.325.

Source: Brownfield Ag News

Predictions that dairy prices would improve by fall seem to be holding true, giving dairy producers hope that margins will be in positive territory in 2017.

“Dairy farm profit margins are really looking good for 2017,” said Dave Kurzawski, a dairy analyst with FC Stone.

Stronger demand for cheese coupled with three straight months of price increases in the global dairy auctions are providing hope that the slump is finally nearing the end, though some analysts warn it could be Christmas before prices really begin to improve.

In the last two months the spread between the price of U.S. cheddar cheese compared to the global market has shrunk from a ghastly 50 cents per pound to 15 cents for blocks, Kurzawski said. Cheddar cheese was 9 percent higher to an average price of $3,436 or $1.5585 per pound.

That might open the door for increased exports into next year, which would provide additional price support. While Kurzawski says it’s too early to tell, American cheese is arguably more attractive to international buyers than it has been for the last year. If that is true, American buyers may find themselves bidding against international buyers just as the domestic cheese demand surges for the holidays.

Domestically, cheese barrels are trading at a 9-cent premium over cheese blocks. That spread is not expected to last for much longer.

U.S. exporters shipped 23,969 metric tons of cheese in July this year, down 6 percent from July 2015. Year-to-date cheese exports are down roughly 18 percent with the biggest hits coming from lost market share in South Korea and Japan, Kurzawski said.

The U.S. Department of Agriculture has increased its all-milk price for 2016 to $16.25 to $16.45 per hundredweight and $16.15 to $17.15 for 2017 based largely on stronger cheese demand. Firmer demand for nonfat dry milk and whey demand is also providing support to milk prices. Break-even prices for southern Idaho dairies run between $16 and $17 per hundredweight.

Even as USDA forecasters are predicting stronger prices, they are also anticipating increased in dairy production for 2017. Lower feed costs, thanks primarily to a monster corn crop, will likely lead to a modest expansion in the cow inventory and more rapid growth in milk per cow.

FC Stone is expecting the U.S. corn crop to average around 176 bushels per acre. That’s in-line with the USDA’s August corn yield forecast of 175 bushels per acre. If that’s realized, it would break the 2014 record of 171 bushels per acre and set a new production record of 15.2 billion bushels

USDA is now forecasting the 2016-17 average farm gate price for corn will be $2.85 to $3.45 per bushel, down about 45 cents from the range forecast for the current marketing year.

Source: Magic Valley

In Class III trade at the Chicago Mercantile Exchange, milk futures were pressured by profit taking and follow through selling. September was down $.23 at $16.58, October was $.36 lower at $16.81, November was down $.33 at $16.69, and December was $.31 lower at $16.25.

Over in the spot market, cash cheese was lower. Blocks were down $.02 at $1.70. There were a total of six trades, including one at the closing price. The last unfilled bid was on one load at $1.69. Barrels were $.04 lower at $1.62. There were eight loads sold, one at that price. The last unfilled bid was on one load at $1.61. The last uncovered offer was for one load at $1.63.

Butter was unchanged at $2.035. The last uncovered offer was for one load at $2.05.

Nonfat dry milk was up $.0075 at $.905s. There was one load sold at $.90. The last unfilled bid was on one load at $.905. The last uncovered offer was for one load at $.91.

The USDA says butter for the week ending September 3rd averaged $2.12 per pound, down $.10 on the week. 40 pound blocks of cheddar cheese were pegged at $1.83, $.017, and 500 pound blocks averaged $1.88, $.03 lower. Dry whey came out at $.297, up $.005. Nonfat dry milk averaged $.853, down $.011.

International milk prices rose while volumes dropped in this month’s first auction held by New Zealand’s Fonterra Co-operative Group, the world’s biggest dairy exporter.

Fonterra’s GDT Price Index climbed 7.7 percent, with an average selling price of $2,920 per ton, in the auction held on Tuesday.

The index rose 12.7 percent at the previous sale, said Fonterra, which is known for brands such as Anchor, Anlene and Fresh n’Fruity.

A total of 36,748 tonnes was sold at the latest auction, falling 2.7 percent from the previous one, the cooperative said on its website.

The auctions are held twice a month, with the next one scheduled for September 20.

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

The New Zealand milk co-operative, which is owned by about 10,500 farmers, controls nearly a third of the world dairy trade.

Source: Reuters

The results of the next Global Dairy Trade (GDT) auction will give a strong indication regarding the prospects for international milk prices over the coming months, according to Aurivo’s General Manager for Dairy Ingredients and Consumer Products Eoghan Sweeney.

“We will wait and see what happens next Tuesday,” he said.

“But I am cautiously optimistic that we are now witnessing a sustainable upward trend in global milk markets.

“This is being driven by a general upturn in demand for dairy products. I think it is also significant that oil prices have started to increase of late. There is a confirmed link between international oil and dairy markets.”

ICMSA president John Comer agrees with this analysis, up to a point.

“I think that southern hemisphere based processors can manipulate the GDT, when it suits them,” he said.

“Yes, milk markets are improving. But the real driver in this regard is the prospect of a significant cut back in European milk production over the coming months.”

Comer added that the EU’s voluntary milk reduction measures will act to make this a reality.

“If fully implemented then the scheme has the scope to reduce milk output by some 1.1 billion liters over the coming months,” he said.

“This is not the introduction of quotas by the back door: rather it is a voluntary scheme which has the potential to be implemented whenever EU milk prices fall below sustainable levels.”

The ICMSA president is calling on the Irish government to commit to the additional discretionary measures, for which scope is provided under the current EU farm aid package.

“All of this money should be used to boost dairy incomes,” he added.

“I know that some lobby groups are calling on the government to use discretionary funds to facilitate cheap loans to farmers. ICMSA believes this is a fundamentally flawed strategy.

“In reality, the potential now exists to support each Irish dairy farmer by the tune of €1,200, assuming Dublin commits to the national top-up arrangements provided for in the Brussels’ aid package.

“We want to see this option taken by the government and the monies paid out to farmers as quickly as possible.”

Source: Agriland

The price of whole milk powder may rise for the fourth straight auction on the GlobalDairyTrade platform next week, the NZX futures market suggests, in a further sign that global supply and demand are coming back into balance.

Premiums in the futures market suggest whole milk powder will rise between 5 per cent and 7 per cent at next week’s auction, according to OMF, adding to a jump of almost 19 per cent at the Aug 16 sale that took the price to US$2,695 a tonne, the highest since October last year.

In each of the past two auctions, prices have exceeded those implied by the futures market amid signs that the worldwide supply glut is easing, bolstering optimism about the outlook.

The GDT volumes for next week, released yesterday, show 19,500 tonnes of whole milk powder will be offered, down from 21,500 tonnes at the last event and up from 18,000 tonnes a year ago.

Traders say buyers who “sat on their hands” earlier in the year are back in the market, while the supply side remains limited.

Last week, Fonterra Cooperative Group raised its forecast farmgate milk payout for the current season by 50 cents to $4.75 per kilogram of milk solids, citing the recent price gains on the GlobalDairyTrade auction as global production is scaled back, while chairman John Wilson said prices were still at “unrealistically low levels”.

New Zealand’s terms of trade data for the second quarter, released this week, showed an 18 per cent increase in the volume of milk powder, although an 8.7 per cent decline in prices reduced the uplift in the total value of dairy exports to 1.6 per cent.

Source: NZHerald

In Class III trade at the Chicago Mercantile Exchange, milk futures were lower on profit taking and technical selling, giving back Tuesday’s gains, and in many months, a little bit more. September was down $.14 at $16.46, October was $.04 lower at $16.58, November was down $.08 at $16.31, and December was $.07 lower at $16.00.

In the spot market, cash cheese blocks were down $.03 at $1.68. The last uncovered offer was for one load at that price. Barrels were steady at $1.625. The last unfilled bid was on one load at that price.

Butter was $.03 lower at $2.08. There were two trades, one at $2.06 and one at $2.08. The last unfilled bid was on one load at $2.07. The last uncovered offer was for one load at $2.10.

Nonfat dry milk was unchanged at $.855. The last unfilled bid was on three loads at $.85. The last uncovered offer was for one load at $.865.

California’s Department of Food and Agriculture says for the week ending August 26th, nonfat dry milk averaged $.85 per pound, up eight tenths of a cent on the week. Sales of 6.4 million pounds were more than three million higher than the week before.

Source: Brownfield Ag News

In Class III trade at the Chicago Mercantile Exchange, milk futures were lower in a continued technical reversal that started last week. August was down $.03 at $16.91, September was $.35 lower at $17.10, October was down $.27 at $17.01, and November was down $.19 at $16.65.

Over in the spot market, cash cheese continued its slide, related to the recent cold storage numbers. Even with the USDA’s purchase announced earlier this week, there is plenty of cheese available. Blocks were down $.0425 at $1.7375. There were two loads sold at that price. The last uncovered offer was for one load at $1.75. Barrels were $.03 lower at $1.75. There was one load sold at $1.7625. The last unfilled bid was on one load at $1.73. The last uncovered offer was for one load at $1.75.

Butter was unchanged at $2.0775. The last unfilled bid was on one load at that price. The last uncovered offer was for one load at $2.13.

Nonfat dry milk was steady at $.8475. There were a total of seven loads sold, six of them at the closing price. The last unfilled bid was on one load at $.84. The last uncovered offer was for one load at $.8525.

According to HighGround Dairy, New Zealand’s Fonterra raised its $4.75 per kilogram, about $10.45 per pound. That raised the available payout to farmers to $11.55 to $11.77, before retention. Whole milk futures in New Zealand broke the $3,000 per ton level for the first time in more than a year.

HighGround says Chinese dairy import volumes during July were mixed, when compared to a year ago. Whole milk powder, butter, infant formula, fluid milk & cream, and cheese gained. Skim milk powder, combined whole and skim milk powders, whey products, whey protein concentrate, and lactose were down on the year.

Dairy cattle slaughtered under federal inspection during July totaled 213,300 head, a little bit less than a year ago. The year to date kill is 1.7 million head. The average dressed weight of all cows was 637 pounds, 4 pounds less than last year. That’s also below the 2016 average of 649 pounds.

Source: Brownfield Ag News

In Class III trade at the Chicago Mercantile Exchange, milk futures were lower, with several months down sharply, on follow through selling and demand concerns. August was $.02 lower at $16.94, September was down $.30 at $17.45, October was $.15 lower at $17.28, and November was down $.20 at $16.84.

In the spot market, cash cheese was sharply lower, responding to the recent bearish cold storage report. Blocks were down $.065 at $.178. There were a total of six trades, including two at the closing price. Barrels were $.085 lower at $1.78 with one trade at that price. The last unfilled bid was on one load at $1.77.

Butter was down $.03 at $2.0775. There were five loads sold, one at the closing price. The last unfilled bid was on one load, also at $2.0775.

Nonfat dry milk was unchanged at $.8475. There was one load sold at $.85. The last unfilled bid was on one load at $.84. The last uncovered offer was for one load $.8475.

The USDA says butter for the week ending August 20th averaged $2.25 per pound, up 2.8 cents on the week. 40 pound blocks of cheddar was pegged at $1.77, 4.1 cents higher, and 500 pound barrels averaged $1.88, up 3.8. Dry whey came out at $.281, down two tenths of a cent. Nonfat dry milk averaged $.867, 1.4 cents higher.

California’s Department of Food and Agriculture reports nonfat dry milk for the week ending August 19th averaged just over $.84, down about a penny on the week. Sales were 3.4 million pounds.

Source: Brownfield Ag News

New Zealand dairy giant Fonterra on Thursday lifted its farmgate milk price forecast to NZ$4.75 as global dairy prices began to improve and supply slowed.

The dairy co-operative lifted the forecast by NZ$0.50, and continued to forecast earnings per share at between NZ$0.50 to NZ$0.60, which brought the total payout available to farmers in the 2016-17 season to NZ$$5.25 to NZ$5.35.

The move put the payout above the industry’s estimated break-even level of NZ$5.05, suggesting that the recovery of global dairy prices would filter through to New Zealand farmers.

“Current global milk prices remain at unrealistically low levels, but have started to improve as global demand and supply continue to rebalance,” said Fonterra Chairman John Wilson in a statement.

Milk production in the European Union was falling and New Zealand milk production was around 4 percent lower for the current season, Fonterra said.

However Fonterra cautioned that the dairy market would likely remain volatile and the forecast would continue to be updated.

Fonterra had earlier this month held its farmgate milk forecast steady at NZ$4.25, saying the price had reflected global uncertainty and a high New Zealand exchange rate.

Since that time, international milk prices have rallied, with the Global Dairy Price Index, which covers a variety of products, soaring 12.7 percent, with an average selling price of $2,731 per ton, in an auction held last week.

Source: Reuters

U.S. cheese stocks at the end of July were at record levels because of high production rates and slow export demand. The USDA started collecting cold storage data in 1917. Cheese stocks at 1.276 billion pounds were up 10% on the year, including a 10% increase in American cheese to 769.982 million and a 19% jump in Swiss to 25.705 million pounds. Butter stocks were 333.123 million pounds, 31% above a year ago, also on high production levels and slow export demand.

The U.S. Dairy Export Council says that as of June, U.S. cheese exports are down 20% on the year and butter sales are 1% lower.

The USDA says U.S. cheese and butter production for 2016 are both ahead of the respective 2015 paces.

In class three trade at the Chicago Mercantile Exchange, milk futures were pretty narrowly mixed on demand uncertainties and spread trade. August was up $.01 at $16.96, September was down $.06 at $17.82, October was $.03 lower at $17.55, and November was $.03 higher at $17.10.

Cash cheese blocks were down $.005 at $1.86. There were two trades at $1.865. The last uncovered offer was for one load at $1.86. Barrels were unchanged at $1.865.

Butter was $.06 lower at $2.13. There were two trades, one at the closing price and one at $2.15. The last unfilled bid was on one load at $2.09. The last uncovered offer was for one load at $2.13.

Nonfat dry milk was down $.005 at $.8525. There were a total of four trades, two at the closing price. The last unfilled bid was on one load at $.8375. The last uncovered offer was for two loads at $.8525.

California’s Department of Food and Agriculture says nonfat dry milk for the week ending August 12th averaged $.8525 per pound, up a half a cent on the week, with sales of 7 million pounds.

Source: Brownfield Ag News

Milk prices continue to show strong recovery from the lows in April and May. The August Class III price will be near $17, about $1.75 higher than $15.24 in July and about $4.25 higher than $12.76 in May. Higher Class III prices are driven by much higher cheese prices and some improvement in dry whey prices. Cheese prices are the highest since November of 2014. On the CME, 40-pound cheddar blocks averaged $1.6613 per pound in July, but have been between $1.7325 and $1.865 during August. Cheddar barrels averaged $1.7363 per pound in July, but have been between $1.7750 and $1.88 during August. Dry whey averaged $0.26 per pound in July and increased to $0.29 in August.

The August Class IV price will be near $14.77, $2.09 higher than the low of $12.68 in April. But, little lower butter and nonfat dry milk prices will lower the August Class IV price to about $14.78 compared to $14.84 in July. CME butter averaged $2.2731 per pound in July and has been between $2.15 and $2.27 range in August. Nonfat dry milk averaged $0.8638 per pound in July and has been between $0.83 and $0.8475 range in August.

This much increase in cheese prices was not anticipated. Cheese stocks have been increasing. June 30th total cheese stocks were a record high at 9.6% higher than a year ago and 13.9% higher than the five year average for this date. But, higher cheddar cheese prices were driven by good sales, lower production with June 3.5% lower than a year ago, and fresh cheddar cheese supply tighter than more aged cheese. Butter prices have been held in check with June 30th stocks 27.4% higher than a year ago and 35% higher than the five-year average for this date. This was the highest butter stocks since June of 1993. June butter production was 6.4% higher than a year ago. June 30th nonfat dry milk stocks were 9.4% lower than a year ago, but 13% higher than the five year average for this date. June nonfat dry milk production was 13.2% lower than a year ago as skim milk powder production for export increased 59.5%.

Dairy product prices were not helped by exports since June exports continued below year ago levels. Compared to June a year ago exports were lower by 9% for nonfat dry milk/skim milk powder, 33% lower for butterfat, 12% lower for cheese and 2% lower for dry whey. However, whey protein concentrate exports increased 52% as China bought a record volume and increased exports to Southeast Asia. On a total solids basis, June exports were equivalent to 14.9% of milk production, the highest since April 2015. Imports were equivalent to 4.1% of milk production.
Whether cheese prices hold at these improved levels and supporting higher Class III prices will depend a lot upon the level of milk production as well as continued strong sales. Milk production for the month of July was 1.4% higher than last year driven mainly by improved milk per cow, up 1.2%. Cow numbers increased two months in a row with July numbers up 2,000 head from June. California’s milk production continues below a year ago, but the decline is slowing with July down just 0.8%. Milk production has picked up in Idaho with July 3.7% higher than a year ago. While milk per cow was higher in New Mexico 13,000 fewer cows put July milk production 1.2% lower. Texas added 9,000 cows and with more milk per cow July production was 4.4% higher. July milk production was up 4.0% in New York, 4.5% in Michigan, 2.5% in Iowa, 1.5% in Minnesota, 5.9% in South Dakota, and 2.1% in Wisconsin. It appears that some of the hot and humid weather in July had little impact on milk production in the Northeast and Upper Midwest.

Last year milk production for the first half of the year was 1.7% higher than the year before but production slowed during the second half to just 0.8%. This year milk production for the first half of the year, leap year adjusted was 1.1% higher. With the weaker increase the second half of the year last year production will remain higher than a year ago and could end the year about 1.6% higher than last year.

Exports may start to show some improvement. Milk production in the EU 28 countries which was running more than 5% higher earlier is now just 1%. Milk production is also projected to be lower in Australia, New Zealand and Argentina. China has been a little more active in imports. But, there is still excess world stocks to work off. U.S. faces strong completion from both EU and New Zealand for markets. World dairy product prices are improving but remain well below U.S. prices. So any major improvement in exports is not likely before well into 2017.
Class III futures are near $17 for August and remain in the $17s through November before dropping to the $16s in December and continuing in the $16s for 2017. These prices appear to be a little optimistic. Once buyers are comfortable with their cheese and butter inventories to support the strong selling period of Thanksgiving through Christmas we could see lower cheese prices pushing the Class III price once again back to the $15s by November and December. It will take continued strong cheese sales and slower growth in milk production to support the current Class III futures.

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

In Class III trade at the Chicago Mercantile Exchange, milk futures were down modestly on profit taking after a couple of days of solid gains. August was $.01 lower at $16.95, September was down $.03 at $17.88, October was $.07 lower at $17.58, and November was down $.09 at $17.07.

Over in the spot market, cash cheese was unchanged. Blocks held at $1.865 with two loads sold. The last uncovered offer was for one load at $1.875. Barrels were steady at $1.865. The last unfilled bid was on one load at $1.855. The last uncovered offer was for one load at $1.875.

Butter was down $.01 at $2.19. There were four trades, one at $2.18 and three at $2.19. The last unfilled bid was on one load at $2.185. The last uncovered offer was for two loads at $2.20.

Nonfat dry milk was $.0075 lower at $.8575. There were two trades, one at $.85 and one at $.8575. The last uncovered offer was for three loads at $.85.

The USDA reports butter production is slowing down across the U.S., because of a reduction in the available supply of milk. Lower cream availability has also led to reduced churning rates. Still, some processors are able to meet needs with spot loads of cream.

Cheese production is also declining because of a lack of available milk, except for the Western region, which has a Domestic demand is called strong and inventories reportedly vary, depending on the type of cheese.

Because of summer weather, fluid milk production is down in most of the major production areas, except Colorado, Idaho, and Utah. Bottled milk demand is rising as school starts in many districts. Generally, the increase in bottled demand is allowing for additional cream volumes, except for supply tightness in parts of the Midwest and East.

Total conventional dairy ads were up 15% on the week, while organic ads were down 15%. The USDA says there are over eight times as many conventional ads as organic. The price spread between half gallons of organic and conventional milk is $2.37, compared to $2.08 a week ago.

Source: Brownfield Ag News

In Class III trade at the Chicago Mercantile Exchange, milk futures were mostly higher, with the most active months supported by follow through buying and expectations for declining production during the latter half of the year. August was down $.04 at $16.96, most active September was up $.18 at $17.91, October was $.21 higher at $17.65, and November was up $.16 at $17.16.

Over in the spot market, cash cheese blocks were up $.045 at $1.865. There were a total of 10 trades reported. The last uncovered offer was for one load at $1.87. Barrels held at $1.865.

Butter was down $.0025 at $2.20. The last unfilled bid was on one load at $2.1925. The last uncovered offer was for one load at $2.20.

Nonfat dry milk was unchanged at $.865. There were three trades at that price. The last uncovered offer was for one load, also at $.865.

The USDA says the base Class I price for September is $16.56 per hundredweight, up $1.49 from August, with a base skim price of $8.17, $2.01 higher.

For the week ending August 13th, the USDA says butter averaged $2.22 per pound, up three tenths of a cent on the week. 40 pound blocks were pegged at $1.73, 3.5 cents higher, and 500 pound barrels averaged $1.84, up 3.2. Dry whey came out at $.283, unchanged, and nonfat dry milk averaged $.853, four tenths of a cent higher.

Source: Brownfield Ag News

International milk prices rallied in the overnight Global Dairy Trade auction, adding to the view that the market may be on the road to recovery.

The GDT Price Index, which covers a variety of products and contract periods, rose 12.7 percent, with an average selling price of $2,731 per tonne, in the auction held Tuesday.

Whole milk powder prices, which make up the bulk of the auction, soared 18.9 percent while skim milk powder prices rose 3.0 percent and butter rose 14.1 percent.

“It was a stunning result and it couldn’t have come at a better time for our farmers. I think it is now safe to say the market has turned a corner,” said AgriHQ dairy analyst Susan Kilsby.

Until recently, dairy was the backbone of New Zealand’s economy, representing around 25 percent of exports. But dairy prices have dropped sharply from their record highs in 2013, due to China’s economic slowdown and global oversupply.

Sliding prices have put farmers under pressure, with more than 85 percent estimated to be operating below breakeven levels.

According to Kilsby, there was strong buying activity out of China and South East Asia, driving the lift in prices. Kilsby also said she is more confident that current prices will be able to hold up “as global milk supply is now retracting rather than growing.”

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

The auction platform was set up by Fonterra, the world’s largest dairy exporter, and is operated by trading manager CRA International.

Participants include Fonterra, Amul, Arla Foods, Arla Foods Ingredients, Dairy America, Euroserum and Murray Goulburn. Products traded on the twice-monthly auction include whole milk powder, skim milk powder, butter, cheese, and anhydrous milk fat, among others.

Source: Reuters

ASB’s futures market has suggested that prices at the auction could rise by over 10%.

Whole milk powder (WMP) appears to be the driver of this latest increase, with the futures market expecting a rise of between 12-15%.

Should today’s Global Dairy Trade auction rise by these suggested figures, it would be the second biggest consecutive price rise in dairy products this year.

At the last auction, two weeks ago, dairy product prices rose by 6.6% with WMP and rennet casein (RenCas) the main movers with a 9.9% and 16.3% increase respectively.

ASB had predicted that the last Global Dairy Trade would reflect dairy futures markets and post a strong increase in prices and that WMP could rise by between 5-7% (which it surpassed).

The three previous Global Dairy Trade auctions all held steady, with two auctions posting no increases or decreases in prices, while the other was down marginally at 0.4%.

Ornua PPI Rises For The First Time In 16 Months
The positive Global Dairy Trade auction earlier this month was followed by a positive Ornua Purchase Price Index (PPI), the monthly indicator of market returns on dairy products sold by Ornua, which rose for the first time in 16 months.

The PPI rose to 81.8 points for July, up from the 81 points the index had in June.

The PPI had dropped significantly over the 14-month period from March 2015 to May 2015, from 101.2 points to 81 points.

Returns on dairy products stabilised in June with prices holding steady.

Source: Agriland