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National Dairy Market at a Glance
USDA - Fri Aug 23, 8:25AM CDT
MD_DA950

     Dairy Markets at a Glance

     Report 34 - Released on August 23, 2019

     CME GROUP CASH MARKETS (8/23)
     BUTTER: Grade AA closed at $2.2275. The weekly average for Grade AA is $2.2940 (-.0435).
     CHEESE: Barrels closed at $1.6650 and 40# blocks at $1.8800. The weekly average for barrels
     is $1.6940 (-.0500) and blocks, $1.8965 (+.0165).
     NONFAT DRY MILK: Grade A closed at $1.0375. The weekly average for Grade A is $1.0300
     (+.0030).
     DRY WHEY: Extra grade dry whey closed at $.3950. The weekly average for dry whey is $.3895
     (+.0275).
          CHEESE HIGHLIGHTS: Cheese demand is stable to positive throughout the nation.
     Midwestern producers suggest state fair season, along with strong retail promotions, are
     helping prompt strong sales. Additionally, corporate and holiday gift boxes are in the works
     according to some cheese contacts. Cheese inventories are plentiful, but contacts lack the
     same concern they did at this time last year. Cheese producers are finding milk mainly at
     premiums. Spot milk prices ranged from Class to $1.50 over Class III. Midwestern contacts
     suggest bottlers have not pulled down milk supplies as much as expected. Cheese market tones
     are wobbly. The price gap on the CME between blocks and barrels has grown. Cheese contacts
     relay this is a bearish weight on markets, as prices typically range within $.10.
          BUTTER HIGHLIGHTS: Cream availability for butter manufacturing is improving in the East
     and Central regions, but remains tight in the West. Looking at the big picture, nationwide,
     milk fat levels are transitioning from being at the lowest point of the year to gradually
     improving as temperatures begin to drop. In addition, with most schools reopening, bottling
     standardization is very active, resulting in more cream volumes for churning. Print/bulk
     butter requests from retailers, wholesalers, and the food service sector are fair/good. This
     week, bulk butter pricing varies among the regions: East, 5.0 cents to 8.0 cents over the
     market; Central, 1.25 to 4.25 cents above the market; West, 1.0 cents to 7.5 cents over the
     market, with various periods and averages used.
          FLUID MILK: Bottlers are taking higher volumes of milk in order to fulfill school
     pipelines throughout the country. In some areas, balancing plant operators stretch to find
     some milk, if any. For example, in Arizona and Florida, warm weather is hampering cow
     yields, resulting in lighter milk supplies. So, along with upticks in bottling requests,
     milk loads headed into balancing plants are scarce. Therefore, numerous processors are
     pulling milk from the Central region. Midwestern cheesemakers reported spot milk prices from
     Class to $1.50 over Class this week. Generally, milk spot loads in the Midwest are on the
     tight side. Conversely, Northeastern milk output is steady to higher. Nationwide, condensed
     skim prices are still at slight premiums, but availability is beginning to increase.
     Bottling standardization is very active, resulting in more cream. Multiples dipped this week
     in both the Central and Eastern regions, while staying steady to higher in the West. Butter
     churners are busier, as cream becomes more and more available.
          DRY PRODUCTS: Low/medium and high heat nonfat dry milk (NDM) prices are steady in the
     Western region and mixed in the East/Central regions. NDM markets are mostly silent
     throughout the country. Dry buttermilk prices shifted up in all regions. Buttermilk powder
     is tight, while demand is fair/steady. Dry whole milk prices are steady to lower on light
     trading. In general, drying schedules have been focused on NDM/SMP production in most
     balancing plants. Dry whey prices are mostly steady throughout the nation, while inventories
     are readily available. Lactose prices remained steady, as contacts suggest there are some
     concerns regarding Q4 contract negotiations. Whey protein concentrate 34% prices are mostly
     unchanged on a steady market tone. Prices for rennet and acid casein dropped this week.
     Production is increasing in New Zealand, while EU production of casein is down.
     ORGANIC DAIRY MARKET NEWS: Organic Milk Product Sales. The Agricultural Marketing Service
     (AMS) reports estimated sales of total organic fluid milk products decreased from a year
     earlier. June 2019 total organic milk products sales were 197 million pounds, down 2.5
     percent from June 2018 and down 4.6 percent compared to January-June 2018. Total organic
     whole milk products sales for June 2019, 85 million pounds, were up 4.5 percent compared
     with June last year and up 0.9 percent compared with the year-to-date in 2018. June low fat
     milk (1%) sales declined 21.9 percent from the previous year.
     NATIONAL RETAIL REPORT (DMN): Conventional dairy ad numbers increased 4 percent this week.
     Organic dairy ad numbers decreased 36 percent. The most advertised item remains to be
     conventional ice cream sold in 48-64 oz containers, but as summer wanes, the gap between ice

     cream and other conventional items has tightened. On the organic aisle, half gallon milk ads
     were the most advertised item. Conventional ads for cottage cheese, in 16 oz containers,
     grew by the largest amount week over week, at 134 percent.
     COLD STORAGE (NASS): On July 31, U.S. cold storage holdings of butter totaled 329.8 million
     pounds, up 1 percent from the previous month and 4 percent higher from July 2018. Natural
     American cheese holdings totaled 775.9 million pounds, down 1 percent compared to the
     previous month and 6 percent lower than July 2018. Total natural cheese stocks were 1,364.0
      billion pounds, 1 percent less from last month and 3 percent lower than July 2018.
     AUGUST ADVANCED CLASS PRICES (FMMO): Base Class I Price: The base Class I price for
     September 2019 is $17.85 per cwt., a decrease of $0.04 per cwt when compared to August
     2019. A Class I differential for each order's principle pricing point (county) is added to
     the base price to determine the Class I Price. Class II Price Information: For September
     2019, the advanced Class IV skim milk pricing factor is $7.76 per cwt, the Class II skim
     milk price is $8.46 per cwt, and the Class II nonfat solids price is $0.9400 per pound.
     Product Price Averages: The two-week product price averages (per pound) for September 2019
     are: butter $2.3643, nonfat dry milk $1.0391, cheese $1.8153, and dry whey $0.3673.
     JULY MARKET SUMMARY AND UTILIZATION REPORT (USDA): During July 13.5 billion pounds of milk
     were received from Federally pooled producers. This volume of milk is 11.3 percent higher
     than the July 2018 volume. Regulated handlers pooled 3.5 billion pounds of producer milk as
     Class I products, up 13.2 percent when compared to the previous year. Class I utilization
     decreased from last year in 7 Federal Milk Order Marketing areas and increased in 3 Federal
     Milk Order Marketing areas (not counting California). The all-market average Class
     utilization percentages were: Class I = 26%, Class II = 12%, Class III = 40%, and Class IV
     = 22%. The weighted average statistical uniform price was $18.20 per cwt, $0.75 higher than
     last month and $2.83 higher than last year.
     MAY MAILBOX MILK PRICES (USDA, FMMO, CDFA): In May 2019, mailbox milk prices for selected
     reporting areas in Federal milk orders averaged $17.39 per cwt, up $0.30 from the revised
     April 2019 average and up $1.69 from the May 2018 average (without California). When
     compared to the previous month, the May mailbox prices increased in all 19 Federal milk
     order reporting areas. Price changes from the previous month ranged from an increase of
     $0.06 in the Florida reporting area to an increase of $0.47 per cwt in the Southeast States
     and Southern Missouri reporting areas, averaging an increase of $0.30 per cwt over all
     Federal milk order reporting areas (excluding California). Mailbox prices in May 2019
     ranged from $15.63 in New Mexico to $18.73 in Florida. The component tests of producer milk
     in May 2019 were: butterfat, 3.83%; protein, 3.13%; and other solids, 5.78%. 2019 monthly
     mailbox statistics are not yet available for the California Order (see footnote 12).
     RETAIL PRICES FOR CONVENTIONAL AND ORGANIC MILK, AUGUST 2019 (FMMO): A survey of retail
     prices conducted by the Federal Milk Market Order administrators found conventional whole
     milk prices for August 2019 average $3.28 per gallon. August organic whole milk prices
     average $4.01 per half gallon. In August, conventional reduced fat (2 percent) milk gallons
     average $3.20 and organic reduced fat (2 percent) milk half gallons average $4.01.

     Information for the period August 19 - 23, 2019, issued weekly

     Published by:
     Dairy Market News - Madison, WI
     ANGEL TERAN-RAMOS, 6084228593
     Email: angel.teran@usda.gov

     Additional Dairy Market News Information:
     Dairy Market News (DMN) by Phone: (608)422-8602
     DMN Website: https://www.ams.usda.gov/market-news/dairy
     DMN MARS (My Market News): https://mymarketnews.ams.usda.gov

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