How high can it go? That was a pertinent question through Wednesday of this week as the AA butter price on the Chicago Mercantile Exchange (CME) broke the spot market price records for any dairy commodity.
That price jumped by 11.5 cents per pound on Monday of this week and another 3 cents on Tuesday to put it at $2.99 per pound on the CME. A total of 11 carloads were sold on those two days and a bid to buy one carload was not filled on each day.
On Wednesday of this week, the AA butter price remained at $2.99 per pound as three carloads were sold and an offer to sell one carload was not covered.
Contrarian price pattern
While the CME prices for AA butter and Cheddar cheese did not change on Wednesday, the Class III milk futures posted daily limit losses of 75 cents per hundred for October and November and a steady stream of red ink flowed for all subsequent months through December of 2015.
In early afternoon Class III futures trading on Wednesday, prices stood at a record high $24.42 per hundred for September before dropping to $22.82 for October, $20.46 for November, and $19.31 for December before settling into the low $18s and high $17s per hundred for all months in 2015.
The official national Class III milk cash price for August which was announced late last week is $22.25 per hundred. This was the eighth consecutive month of a record high Class III cash price. The August price was $4.34 above that for August of 2013.
The price plunge on Wednesday for future months happened despite steady spot market prices of $2.35 per pound for Cheddar block cheese and $2.33 for Cheddar barrels. No carloads of cheese were sold during the first three days of this week on the CME.
The Grade A non-fat dry milk spot market price held at $1.33 per pound on Wednesday as a bid to buy one carload was not filled.
Dry whey futures prices joined the downward slide of the Class III milk futures. The prices were still at 67 cents per pound for September and 63 cents for October but they dropped to just below 50 cents per pound for the first time in many months for the period of March through December of 2015.
On Tuesday of this week, Cooperatives Working Together announced the receipt of eight bids from Dairy Farmers of America, the Northwest Dairy Association (Darigold), and Tillamook County Creamery for financial assistance on the export of 11.255 million pounds of whole milk powder and 1.21 million pounds of Cheddar and Gouda cheese to countries in Asia, the Middle East, North Africa, and South America. Delivery of those commodities is scheduled from September to March of 2015.
Source: Wis Farmer