DairyProfit Update for April 5, 2012
As a result of a USDA rule amending the Dairy Product Mandatory Reporting Program earlier this year, you'll have to change the “bookmark” on your computer search engine if you're looking for weekly wholesale dairy product prices. The price summaries are now reported at 3 p.m. (Eastern) each Wednesday afternoon by USDA’s Ag Marketing Service, instead of on Friday mornings by USDA’s National Ag Statistics Service. To find this week’s report, click here.
Now, for prices for the week ending March 31:
• Grade AA butter averaged $1.50/lb., up 0.5¢ from the previous week.
• 40-lb. cheddar cheese blocks averaged $1.54/lb., up 0.3¢
• 500-lb. cheddar barrels (adjusted to 38% moisture) averaged $1.59/lb., up 0.4¢.
• Dry whey (Extra Grade) averaged 55.5¢/lb., down 5.7¢.
• Nonfat dry milk (Extra Grade/Grade A) averaged $1.30/lb., down 0.4¢.
Additional details are surfacing regarding Land O’Lakes (LOL) efforts to curb the milk production glut in California’s Tulare County and Southern California, according to Ron Goble, Western DairyBusiness editor.
LOL instituted a supply management program – offering producer members three options – designed to cut more than 1.3 million lbs. of base milk deliveries per day from its Tulare, Calif. plant. Base reductions will be enforced through the end of June.
In response to producer feedback, LOL expanded options available to producers to help them meet the reduced milk production target. (For more ...)
We knew February 2012 U.S. milk production was up 8% from February 2011 (4.3% on a daily basis), and that milk had to go somewhere. Now we know where. USDA’s monthly Dairy Products report was released April 4. Due to Leap Day in 2012 year-over-year total are also comparisons on a daily basis:
• Total cheese output (excluding cottage cheese) was 857.8 million lbs., 6.2% more than February 2011 (up 2.6% from February 2011 on a daily basis). Through the first two months of the year, 2012 (with an extra day) production is up 4.4% from 2011.
• Italian type cheese production totaled 367.0 million lbs., 4.5% more than February 2011 (up 0.9% on a daily basis). Year-to-date (YTD) production is up 3.4%.
• American type cheese production totaled 347.5 million lbs., 5.7% more than February 2011 (up 2.0% on a daily basis). YTD production is up 4.4%.
• Cheddar cheese production totaled 258.0 million lbs., 6.2% more than February 2011 (up 2.5% on a daily basis). YTD production is up 3.4%.
• Butter production was 170.1 million lbs., 13.9% more than February 2011 (up 10.0% on a daily basis). YTD production is up 11.1%.
• Dry milk powders: Nonfat dry milk, human – 170.7 million lbs., up 54.7% (up 49.3% on a daily basis). YTD production is up 42.8%. Skim milk powders – 18.2 million lbs., down 49.7% (down 51.5% on a daily basis). YTD production is down 24.0%.
• Whey products: Dry whey, total – 89.3 million lbs., up 9.2% (up 5.4% on a daily basis). YTD production is up 7.2%.
MARKETS: Products, Class III futures lower
Today's market closing prices:
Cheddar barrels: down 0.25¢, to $1.46/lb.
Cheddar blocks: down 0.25¢, to $1.4875/lb.
Butter: down 0.75¢, to $1.43/lb.
Extra Grade nonfat dry milk: unchanged, at $1.2575/lb.
Grade A nonfat dry milk: unchanged, at $1.2675/lb.
Class III milk: Mostly lower through February 2013. Based on current closing prices, the 2012 average is $16.18/cwt.; 2013 average is $16.10/cwt.
Grain futures higher
Corn: +1¢ to +6¢/bushel through December 2012. The 2012 average is $6.07/bu.; 2013 average is $5.63/bu.
Soybeans: +6¢ to +14¢ through November 2012. The 2012 average is $14.17/bu.; 2013 average is $13.28/bu.
Soybean meal: +$1.00 to +$3.70 through December 2012. The 2012 average is $383.75/ton; 2013 average is $348.29/ton.
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Dave Natzke, Editor