Milk production has been fairly steady with winter weather somewhat usual for this time of year. Cows have settled into winter production patterns with farmers balancing rations to optimize milk production.
Excess milk in the Central region of the country has changed dramatically with premium virtually nonexistent. This excess milk is being purchased at a premium of 50 cents over to class to as much as $2.00 under class depending on location. The competition from cheese plants and dryers is strong.
Milk receipts at the plant level are significantly higher. Plants are running at capacity with manufacturers welcoming the extra supply. This excess milk will be temporary as bottling will again pick up as time moves closer to schools reopening again. Domestic cheese sales have been holding up well with supply sufficient for demand. Regional dry whey prices are steady to slightly higher again this week. International demand for whey is improving.
Strong close to the year
Cheese strength has exceeded expectations for this time of year. December Class III futures contract is virtually priced and it looks like 2013 will have the second highest average Class III price in history. Early 2014 futures contracts indicate a very promising beginning with January poised to exceed the December price. For the holiday shortened week ending Dec. 27, Cheddar blocks remained unchanged at $2.00. Barrel price closed at $1.97, up 2 cents. Butter closed at $1.55, down 3.25 cents. Both Extra Grade and Grade A nonfat dry milk prices were unchanged for the week at $2.09 and $2.11, respectively. There was very little product changing hands with no loads of blocks, no loads of barrels, 14 loads of butter, and no loads in either category of nonfat dry milk.
Cheese and butter supplies dwindle
USDA’s Cold Storage report showed American stocks declining 10.1 million pounds from October, a decline of 2 percent. Stocks are one percent above a year ago. Swiss cheese stocks declined 1.9 million pounds or 7 percent from October. Inventory is 16 percent lower than last year. Other cheese stocks declined 9.2 million pounds from last month, but are 4 percent above last year. Total cheese stocks declined 21.2 million pounds, down 2 percent from October, but up one percent from a year ago.
This certainly is good news as it appears stocks at the end of the year may be very similar to the end of last year. Butter has been the surprise with a decline of 60.4 million pounds from October, a decline of 33 percent from October. This is the largest decline in November since 2004. Current butter stocks are 5 percent lower than last year. Although this is a substantial decline, it is seasonal with the largest inventory decline generally taking place in November. Statistics show that 40 percent of the butter production is consumed during the period of time from Thanksgiving to the New Year.
AMS prices
For the week ending Dec, 21, Agricultural Marketing Service (AMS) prices were mostly higher. Prices for 40-pound cheddar blocks increased 1.9 cents to $1.89. The price for 500-pound barrels, adjusted to 38 percent moisture, averaged $1.84, down 1.6 cents. USDA grade AA butter averaged $1.65 for the week, up 1.4 cents. Nonfat dry milk averaged $1.96, up 1.5 cents. Dry whey averaged 57.6 cents, up 0.2 cents.
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Source:Agriview