High temperatures in Midwest tightening milk supply

MIELKE, from pg. 17 needs when prices are at current levels.”

Cheese demand remains steady for Western retail and food service channels. Export demand is mixed for the remainder of second quarter, ranging from steady obligations to softened, while third quarter interest is reportedly quieter. Cheese vats are running strong production with plenty of milk, says Dairy Market News

Cash butter fell to $2.3525 per pound on June 13, the lowest since April 14. It rallied the next day, slipped some on June 15, and closed June 16 at $2.365. This is up a quarter-cent on the week, but 57.5 cents below a year ago, with 10 sales on the week.

Central butter makers reported similar demand interest as the past two weeks. Retail sales are increasing but nothing out of the norm for late spring. Cream availability remains somewhat steady. Multiples are holding firm in the low to mid $1.20s from cream sources regionally, although some Midwestern plants are still taking cream from Western states, according to Dairy Market News.

Western cream multiples stayed firm and plenty of volume is available. A few butter manufacturers reported that scheduled equipment maintenance is set to start; but butter making is strong to steady.

In some parts of the region, more cream is shifting to ice cream production. Butter demand is moderate to lighter from commercial bulk buyers, while food service and retail demand is strong to steady. A few reports indicate inventories are slightly on the heavy side. Export activity is moderate to lighter, reports Dairy Market News.

Grade A nonfat dry milk slipped to $1.155 per pound on June 15, but closed the next day at $1.1575. This is down a quarter-cent on the week and 64.25 cents below a year ago, with four sales reported for the week.

Dry whey gained a half-cent on June 12, then gave back three-quarter cents on June 14, and closed June 16 at 27.5 cents per pound — unchanged on the week, but 23.25 cents below a year ago, with 31 sales reported on the week at the CME.

June 13’s Global Dairy Trade Pulse saw 2 million pounds of Fonterra whole milk powder sold out of 2.2 million pounds offered, and at $3,080 per metric ton, down $20 from the last Pulse and down $70 from the June 6 GDT.

HighGround Dairy says, “After trending above $3,100 per metric ton for the last seven weeks, C2 Regular whole milk powder dropped to the lowest price since April 18 due to persistent weak global demand. Lasting only five bidding rounds, this matched the shortest Pulse Auction on record which occurred on Feb. 14.”

Dairy Market News says milk production varies across the country as seasonally warmer temperatures come into play. The Northeast is seeing steady milk output. Midwest production tightened in the southern portion of the region, while warmer temperatures moving toward the upper Midwest is expected to impact cow comfort levels there as well. Farm level milk production in the West is mostly steady. Cooler temperatures in portions of the mountainous states have led to stronger milk output.

Looking globally, a number of observers believe the European milk production peak has passed, reports Dairy Market News, while others suggest it may linger and be slow to decline. In either case, milk volumes are significant. Manufacturing of most dairy commodities is heavy, and inventories are significant. Industry contacts report demand is lukewarm for most commodities, with the exception of cheese.

Less favorable weather may slow milk production from northeast Germany into Poland and the Baltic States. The EU commission extended the trade measures that allow Ukrainian agricultural products to enter the EU without tariffs. The waiver was extended for one year. The governing body also extended the ability of five neighbors to Ukraine (Bulgaria, Hungary, Poland, Romania, and Slovakia) to restrict the domestic sales of selected crops while allowing those crops to enter the country for export into other countries.

Looking down under, May is typically defined as one of the most active months for New Zealand exports. However, the pace of China’s recovery has disrupted those volumes, says Dairy Market News, as well as the global economies. Dairy commodity processors point to China’s lack of demand with impacting short term price movement, relative to the New Zealand farm gate milk price.

Australia milk production trends remain below a year-ago levels in most regions. However, due to weak dairy product demand, dairy farmers stand to lose as processors released their farm gate milk price offerings for the upcoming season. Farm gate price offerings are set to decline as much as 10 percent from last season, according to Dairy Market News.

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