Class I milk price up from April, but well below last year

The barrels reversed three weeks of loss, and finished at $1.5525, up 4 cents on the week, 81.75 cents below a year ago, and 19.75 cents below the blocks.

Sales totaled 29 cars of block (the highest weekly sum since the week of May 31, 2021) plus a whopping 85 loads of barrel, highest since Dec. 16, 2017. There were 26 traded on April 19 alone — the highest one-day total since June 21, 2018. The previous week saw 47 sales and April 21 was the fifth time this year that over 20 loads were traded in a single session.

The cheese market was encouraged this week by an announcement that McDonalds will enhance its burger lineup by adding more cheese. The trial will begin on the West Coast.

Meanwhile, Midwest cheesemakers continue to report widely available milk, according to Dairy Market News. Mid-week spot milk prices remained from $11 to $4 under Class. Cheese demand is “steady to strong,” says Dairy Market News, but there is some near term concern regarding inventory levels.

Varietal cheeses have strong to steady demand from western retail and food service purchasers. Inventories through April remain sold out for some. Asian demand is reported as strong by some while others say Asian purchasers are buying from other sources. Milk volumes are plentiful, enabling maximum to strong production schedules.

Cash butter climbed to $2.4025 per pound on April 19 (the highest in four weeks), but closed April 21 at $2.40. This is up 7.25 cents on the week but 26.75 cents below a year ago, with 16 sales reported for the week.

Central butter demand has softened seasonally the past few weeks, says Dairy Market News. Churning is still very busy though cream was less available this week. Multiples ticked up and some expect further cream price increases near term.

Cream is plentiful in the West, with strong to steady cream demand continuing as cream multiples moved higher this week. Strong to steady but- ter production continues. Butter is moving well, with a steady pull on inventories. Export demand is steady to lighter due competitive prices from European and Asian markets, however, Canadian purchases increased this week.

After falling to $1.1225 per pound on April 17, CME Grade A nonfat dry milk found itself at its lowest price since Feb. 24, 2021. GDT reversed that the next day and the powder closed April 21 at $1.165. This is up 3.5 cents on the week, but 59 cents below a year ago, with seven sales put on the board for the week.

Continued pressure on Class III futures due to weakness in product prices was the culprit behind declining spot margins,” the Margin Watch stated, “with spot cheddar blocks and whey powder prices dropping to one and two-month lows. While Class IV prices have held up comparatively better with butter prices in a well-established trading range, spot non-fat dry milk is holding steady at a two-year low.

— Margin Watch

Dry whey slipped to 35 cents per pound on April 17 (the lowest since Jan. 31) then headed back up to 38.25 cents on April 19, but closed April 21 at 36.25 cents, unchanged on the week but 27.25 cents below a year ago. There were 35 sales on the week, down from 47 the week before.

The May Federal order Class I base milk price was announced at $19.57 per hundredweight, up 72 cents from April but $5.88 below May 2022. It equates to $1.68 per gallon, down from $2.19 a year ago. The five-month Class I average stands at $20.12, down from $22.81 a year ago and compares to $15.70 in 2021.

Fluid milk sales were back to their old ways in February. The USDA’s latest data shows packaged sales totaled 3.4 billion pounds, down 3.2 percent from February 2022, following a 0.6 percent slippage in January. A general rule of thumb says a 4 percent decline in fluid milk sales means about 1 percent of milk nationally will end up in manufacturing instead of in the jug.

Conventional product sales totaled 3.1 billion pounds, down 3.1 percent from a year ago. Organic products, at 218 million pounds, were down 3.2 percent.

Whole milk sales totaled 1.2 billion pounds, up 0.1 percent from a year ago, up 0.7 percent year-to-date, and represented 34.3 percent of total milk sales for the two months. Skim milk sales, at 173 million pounds, were down 8 percent from a year ago and 7 percent below a year ago.

Total packaged fluid sales for the two months amounted to 7.2 billion pounds, down 1.8 percent from 2022. Conventional product sales totaled 6.7 billion, down 2 percent. Organic products, at 476 million pounds, were up 1 percent, and represented 6.7 percent of total milk sales for the period.

One more positive note: the March 16 Daily Dairy Report says, “Sales of lactose-free and low-lactose milks are growing even more rapidly than plantbased alternatives. These milks include longstanding brands like Lactaid, as well as the newer ultrafiltered, nutrient-dense, high protein milks such as Fairlife and to a lesser degree the much newer A2 milks. While technically not low-lactose, A2 milk, which contains only the A2 protein, have been shown to prevent some symptoms for those who suffer from lactose malabsorption.”

Dairy margins were mixed over the first half of April, weakening in nearby periods while holding steady further out on the curve, according to the latest Margin Watch from Chicago-based Commodity and Ingredient Hedging LLC.

“Continued pressure on Class III futures due to weakness in product prices was the culprit behind declining spot margins,” the Margin Watch stated, “with spot cheddar blocks and whey powder prices dropping to one and two-month lows. While Class IV prices have held up comparatively better with butter prices in a well-established trading range, spot nonfat dry milk is holding steady at a two-year low.”

The Margin Watch detailed February export data, the uptick in April 18’s GDT, and referenced the minimal changes for corn and soybean domestic balance sheets in the latest World Agricultural Supply and Demand Estimates. “Traders await the May report next month which will feature the first newcrop balance sheets for the upcoming 2023-24 crop year. Planting progress has begun across the U.S. Midwest with favorable weather over the first half of April,” the Margin Watch concluded.

The USDA’s latest Crop Progress report shows 8 percent of U.S. corn has been planted, as of the week ending April 16, up from 3 percent the previous week, 4 percent ahead of a year ago, and 3 percent ahead of the five-year average.

The report shows 4 percent of the soybeans are in the ground, 3 percent ahead of a year ago and 3 percent ahead of the five-year average. Late snow last week in the Midwest was delaying planting in a winter that doesn’t seem to want to end.

Lee Mielke is a syndicated columnist who resides in Everson, Wash. His weekly column is featured in newspapers across the country and he may be reached at lkmielke@juno.com. v