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USDA - AMS: National Dairy Market at a Glance (2019-01-11)

USDA U.S. Department of Agriculture - January 11, 2019


     MD_DA950

     Dairy Markets at a Glance

     Report 2 - Released on January 11, 2019

     CME GROUP CASH MARKETS (1/11)
     BUTTER: Grade AA closed at $2.2575. The weekly average for Grade AA is $2.2375 (+.0037).
     CHEESE: Barrels closed at $1.2450 and 40# blocks at $1.4100. The weekly average for barrels
     is $1.2615 (-.0379) and blocks, $1.3900 (-.0306).
     NONFAT DRY MILK: Grade A closed at $1.0300. The weekly average for Grade A is $1.0045
     (+.0476).
     DRY WHEY: Extra grade dry whey closed at $0.4950. The weekly average for dry whey is
     $0.4870 (+.0020).
          BUTTER HIGHLIGHTS: Higher post-holiday cream availability has butter makers actively
     churning throughout the country as producers work to build springtime inventories. In most
     cases, butter processors are shifting output schedules from print to bulk butter.
     Nevertheless, several processors suggest they have gotten significant print butter orders
     from retailers refilling the store shelves. Demand appears to be seasonal strong for both
     bulk and print butter. Bulk butter pricing varies among the regions: East, 5.0 cents to 8.0
      cents over the market; Central, 5.0 cents to 7.0 cents above the market; West, 2.0 cents
     to 7.0 cents over the market, with various periods and averages used.
          CHEESE HIGHLIGHTS: Post-holiday milk availability has kept cheese production apace in
     all regions nationally. That said, spot milk prices increased from last week: $2 under to
     $1 over Class III. Nationally, inventories are heavy. However, some individual cheese plants
     in the Midwest and Western regions report respective inventories are tight to balanced.
     Mozzarella demand is strong ahead of football playoffs/Super Bowl. Other types of cheese
     producers report steady to good demand, as well. That said, some expect it is a short-term
     upsurge as schools replenish their depleted stores following the holiday break. Cheese
     markets, particularly barrel markets, are struggling to regain some of the steam lost in the
     fourth quarter of 2018.
          FLUID MILK: Across the nation, bottling demand is at a seasonal high with many
     educational institutions returning from winter breaks. School-based ordering is expected to
     be strong for two or three more weeks. As a result, some regions have fewer discounted spot
     loads available. Aside from pockets in the Mid-Atlantic, Southeast and New Mexico, milk
     production is largely growing throughout the country. Arizona and California milk production
     is heavy and stronger than expected. However, contacts in several regions suggest that
     longer term milk production increases may not prevail with so many dairy farmers selling out
     and leaving the dairy business due to financial stress. Cream supplies are readily
     available, and some plants are behind schedules for clearing cream. Cream multiples for all
     Classes are 1.00 to 1.18 in the East, 1.13 to 1.25 in the Midwest, and 1.00 to 1.26 in the
     West.
          DRY PRODUCTS: Nonfat dry milk prices shifted higher in all regions and for both
     low/medium heat and high heat. NDM stocks are highly committed thru contractual needs, and
     as a result, inventories are tighter than expected for the time of year. Dry buttermilk
     prices moved higher and stocks are generally lower. Dry whole milk prices are mixed on a
     wider range. Dry whey prices are steady to higher. Whey inventories seem balanced to a
     little tighter, but some end users suggest they are comfortable with their supplies and plan
     to wait out the current market bullishness. Aside from the bottom of the range moving
     higher, whey protein concentrate 34% prices are mostly unchanged. Industry contacts suggest
     the recent strengthening in other dry dairy markets may provide a lift to WPC34% prices.
     Although the lactose price is unchanged this week, the divide between market segments became
     more pronounced. Some contacts feel there are growing inventories within parts of the
     country. Prices for acid and rennet casein are steady.
          ORGANIC DAIRY MARKET NEWS: The January 2019 farm gate organic milk pay price is
     $32.42, with a twelve-month average price of $31.30, based on a 12.9 percent representation
     of total solids. The organic pay price is the amount accepted by those organic dairy
     producers who contract with a large national organic cooperative, while based on the
     geographic area where the organic milk is produced and whether it is organic grassmilk.
     Coming off the holidays, total organic retail promotions decreased 17 percent. For organic
     milk, half gallon packages posted the largest volume of advertisements.
          NATIONAL RETAIL REPORT (DMN): The total number of conventional dairy ads decreased 10
     percent from last week, while organic dairy ads decreased 17 percent. Conventional milk ad
     numbers decreased 10 percent and organic milk ad numbers decreased 9 percent. The national

     weighted average advertised price for conventional milk half gallons is $2.25, compared to
     $3.84 for organic milk half gallons, an organic price premium of $1.59. Conventional cheese
     ad numbers decreased 11 percent. There are over 61 times more ads for conventional than
     organic 8 oz shred. Conventional yogurt ad numbers decreased 12 percent. Organic yogurt ads
     decreased 56 percent.

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     Information for the period January 7 - 11, 2019, issued weekly

     Published by:
     Dairy Market News - Madison, WI
     MIKE BANDLI, (608)422-8592
     Email: mike.bandli@ams.usda.gov

     Additional Dairy Market News Information:
     Dairy Market News (DMN) by Phone: (608)422-8602
     DMN Website: http://www.ams.usda.gov/market-news/dairy
     DMN Database Portal: http://www.marketnews.usda.gov/mnp/da-home

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