Tight margins limit herd increases

MIELKE, from pg. 12

5.7 percent after jumping 3.8 percent. Butter was up 4.9 percent after falling 3.3 percent, and anhydrous milkfat was up 4.7 percent following a 7.2 percent plunge on April 4.

StoneX says the GDT 80 percent butterfat butter price equates to $2.1332 per pound U.S., up 10 cents after losing 6.8 cents on April 4, and compares to Chicago Mercantile Exchange butter which closed April 21 at a pricy $2.40. GDT cheddar, at $2.0006, was up 11 cents, and compares to April 21’s CME block cheddar at a bargain $1.75. GDT skim milk powder averaged $1.259 per pound, up from $1.1699, and whole milk powder averaged $1.4012 per pound, up from $1.3846. CME Grade A nonfat dry milk closed April 21 at $1.1650 per pound.

Analyst Dustin Winston reports, “North Asian purchases — which includes China — Middle East, European, and North American purchases exceeded year-ago levels. The Middle East was the only region to increase purchase volume from both the last event and last year. Southeast Asia purchases faded in this event, falling from both last year and last event levels.”

HighGround Dairy cautioned, “The auction was not direction setting, with likely short term demand arriving from Middle Eastern buyers driving this upside surprise. This result will also add more confusion to the already volatile skim milk powder market, which HighGround Dairy expects to correct at the following auction.»

Speaking in the April 24 “Dairy Radio Now” broadcast, Rabo Bank Senior Dairy Analyst Lucas Fuess said milk output in the Southern Hemisphere is winding down seasonally as New Zealand fared a little better than anticipated; but Australia’s output is down. He added that the European Union is in its spring flush (like the United States), but EU output was up 0.5 percent in February. He says the gains will continue; but we might see some declines in the back half of the year. He also questioned the climb in U.S. milk cow numbers as tight margins take their toll on U.S. farms.

Cooperatives Working Together cooperatives accepted four offers of export assistance this week that helped capture sales of 229,000 pounds of cream cheese. The product is going to customers in Asia through June.

CME block cheddar fell to $1.745 per pound April 20 (the lowest since Sept. 1) but closed the next day at $1.75. This is 2.5 cents lower on the week, fourth week of decline, and 64.25 cents below a year ago when it peaked at $2.3925.