Cheese buyers are stepping up to purchase supply despite high price.
Inventory needs to be built with buyers unable to wait any longer and wait for possible price weakness.
Both domestic and international demand remains strong. For the week ending Mar. 21, Cheddar cheese price settled at $2.4275, up 6.50 cents with no loads traded. Barrels closed at $2.31, up 4.75 cents with 8 loads traded. Butter ended at $1.92, up 4.50 cents with 2 loads traded. Grade A nonfat dry milk price increased 1.00 cent to $2.05.
The AMS weekly price for nonfat dry milk declined for the first time since last October.
Culling down
Replacement heifer supply is tight and high milk price is resulting in cows being held onto according to the February Livestock Slaughter report. There were 237,000 head slaughtered during the month, down 33,000 from January and down 22,000 from a year ago.
Milk production up
Milk production in the top 23 states showed an increase of 1.4 percent from a year ago totaling 14.9 billion pounds. Production per cow averaged 1,753 pounds, up 21 pounds from last year.
Cow numbers were down 1000 head from January. Milk production in the U.S. increased 1.1 percent with production per cow at 1,730 pounds, up 21 pounds from last year. Cow numbers totaled 9.211 million head, the same amount as January and down 12,000 head from a year ago.
The greatest percentage growth in milk production took place in Colorado with an increase of 6.0 percent. California was next with a gain of 5.3 percent. Utah increased 4.0 percent, Kansas increased 3.6 percent, Texas increased 3.2 percent, Oregon increased 3.1 percent and Washington increased 3.1 percent.
Other milk production gains were less than 3.0 percent. There were 7 states of the top 23 states showing losses. The largest loss was seen in Ohio with a decline of 3.7 percent. Indiana declined 3.2 percent, Iowa declined 2.7 percent, Minnesota declined 2.3 percent, Wisconsin lost 2.0 percent, New Mexico declined 1.4 percent and Pennsylvania was down 0.2 percent.
Cheese stocks decline
Monthly Cold Storage holdings were released by the USDA showing total natural cheese stocks on Feb. 28 down 6 percent compared with 1 year ago.
Total cheese stocks were 1.010 billion pounds, which was just slightly lower than the previous month. American cheese stocks totaled 163.7 million pounds, down 5 percent from a year ago and slightly lower than January’s holdings.
Other cheese stocks totaled 355.1 million pounds, down 6 percent from last year and down 1 percent from January. Butter stocks totaled 163.7 million pounds, which was 31 percent less than last year but 20 percent more than January.
GDT down 5.2 percent
Global Dairy Trade auction prices were mostly lower with the trade weighted average down 5.2 percent from the previous event. Anhydrous Milk Fat price declined 10.7 percent to $4,578mt or $2.08 per pound and the lowest price since June 2013.
Whole Milk Powder declined 5.8 percent to $4,439mt or $2.01 per pound and the lowest price since March 2013. Skim Milk Powder declined 1.7 percent to $4,584mt or $2.08 per pound and the lowest price since November. Cheddar cheese declined 4.1 percent to $4,641mt or $2.11 per pound and the lowest price since December. Butter declined 4.4 percent to $4,534mt or $2.06 per pound. Milk Protein Concentrate increased 3.7 percent to $8,837mt or $4.01 per pound. Rennet Casein price declined 10.7 percent to $10,533mt or $4.78 per pound.
AMS prices
For the week ending Mar. 15, Agricultural Marketing Service (AMS) prices were mostly higher. Prices for 40-pound cheddar blocks increased 1.7 cents to $2.20. The price for 500-pound barrels, adjusted to 38 percent moisture, averaged $2.23, up 2.0 cents. USDA grade AA butter averaged $1.84 for the week, up 1.7 cents.
Nonfat dry milk averaged $2.10, down 0.5 cents. Dry whey averaged 65.1 cents, up 0.2 cents.
The thoughts expressed and the basic data from which they are drawn are believed to be reliable but cannot be guaranteed. Any opinions expressed herein are subject to change without notice. Hypothetical or simulated performance results have certain inherent limitations. Simulated results do not represent actual trading. Simulated trading programs are subject to the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. There is risk of loss in commodity trading that may not be suitable for recipients of this publication.
Source: Agriview
