National Dairy Market At A Glance
11/06/2009 01:04PM
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MD_DA950
DY, DAIRY
MD DA950 NATIONAL DAIRY MARKET AT A GLANCE
November 6, 2009 MADISON, WI (REPORT 44)
CME GROUP CASH MARKETS (11/6):
BUTTER: Grade AA closed at $1.5000. The weekly average for
Grade AA is $1.4330 (+.0690).
CHEESE: Barrels closed at $1.5250 and 40# blocks at
$1.5600. The weekly average for barrels is $1.5035 (+.0120)
and blocks, $1.5335 (+.0305).
BUTTER HIGHLIGHTS: The cash butter price at the CME
continues to climb and attain new record highs for the year.
On Friday, cash trading closed at $1.5000, $0.0900 higher
than last Friday, but $0.1350 lower than last year at this
time. Churning activity across the country continues to be
dependent on cream availability. Class II cream based
holiday item production is strong, thus absorbing a
significant portion of available cream. Butter producers
and handlers state that demand is strong for butter, thus
they are often looking for additional cream volumes.
Current churning schedules are often not keeping up with
demand, thus handlers are reaching further into inventories.
Overall butter demand is good. International buyer interest
is reported with some domestic producers committing to these
inquiries. Retailers are preparing for the upcoming holiday
period and placing good orders. Retailers across the
country are already running print features which are
anticipated to clear good volumes of print butter. Some
features range from a free pound of butter with accompanying
purchases to $0.9900 per pound prints. Food service orders
remain lighter than previous years, although many food
service buyers are optimistic that traffic flow through
their operations will improve as the holiday season
approaches.
CHEESE HIGHLIGHTS: The CME Group cash cheese market is
showing strength, reaching 2009 highs again this week
despite adequate offerings of current cheddar. Orders
received by many packagers lack the usual holiday season
urgency. Time is running out to get orders packaged and
shipped for Thanksgiving use. Process movement is steady to
lighter seasonally. Rumors of export interest may also be
adding buoyancy to prices. Cheese production is around the
annual low levels due to lower milk intakes in November and
stronger demand from other uses. During the first 9 months
of 2009, estimated U.S. cheddar production totals 2.403
billion pounds, up 50.9 million pounds (2.2%) from the
comparable months in 2008. Mozzarella output in 2009 totals
2.434 billion pounds, an increase of 2.2 million pounds
(0.1%) from 2008. Total cheese output during 2009 is
estimated at 7.540 billion pounds, up 147.0 million pounds
(2.0%) above last year.
FLUID MILK: Seasonal milk production patterns are
common over most areas of the U.S. Processing plants are
generating additional items for the upcoming Thanksgiving
Day and year end holidays. Milk production patterns in the
Southwest remain under pressure. California milk output is
mostly steady and continues to trend 6-8% lower than year
ago levels. Plants are competing for the milk supply.
Arizona milk production is flat and remains well below year
ago levels. There are several more herds that will depart
due to the CWT program in coming weeks. Milk production in
New Mexico is flat to slightly lower during the week. In
the Pacific Northwest, milk production was mostly unchanged
compared with recent weeks. In Utah and Idaho, processors
continue to operate at shortened schedules as milk intakes
remain tight. Northeast fluid milk supplies remain tight,
but are improved from last week. In the Mid Atlantic
region, fluid milk availability has improved with lessening
of Class I demand and marginal increases in milk production.
Milk output was higher in Florida with no spot loads
imported. Milk intake reports still vary, as do component
trends in the Upper Midwest with receipts about steady to
frequently lower. Further south, receipts are steady to
generally higher.
DRY PRODUCTS: Firming price trends continue for dry
dairy products. Nonfat dry milk prices are higher with spot
activity slower as more buyers have coverage. There are
resale loads trading at higher levels. NDM production has
been limited because of declining milk receipts at dryers.
Dry buttermilk pricing levels are higher with seasonal
interest in the marketplace. Buying interest is geared
around contracts with limited spot product being shown. Dry
whey prices are trading higher with good interest from food
and feed accounts. Demand has been spurred on by higher
prices in other dairy markets. Drying is mostly steady as
active cheese production creates a solid whey stream,
especially in the Central U.S. region. WPC 34% market
prices continue to move higher and are gaining crossover
demand from buyers looking for NDM and dairy proteins.
Lactose prices continue to gain price strength as demand
improves and output declines. Monthly November contract
prices moved higher.
CCC PRICE SUPPORT PURCHASES (FSA): Activity under the
Product Price Support Program will be reported should
purchases resume. The three month increases in support
prices for cheese and NDM were sunset on October 31.
Effective November 1, the product support prices are:
cheddar blocks, $1.13; cheddar barrels, $1.10; nonfat dry
milk, $.80 per pound; and butter, $1.05.
ORGANIC DAIRY MARKET OVERVIEW (DMN): Advertised prices
for organic fluid milk in half gallon containers comprised
virtually all advertising of organic milk and dairy products
in weekly newspaper inserts. Even so, only about 35% of ads
surveyed contained advertising for organic fluid milk or
products, while all surveyed ads contained advertising for
non-organic milk or dairy products. The range of prices for
organic half gallons increased due to the bottom of the
range falling 50 cents from 2 weeks ago, with the range now
being $2.49 to $3.99. The weighted average advertised price
this period was $3.11, compared with $3.21 2 weeks ago. The
second most advertised organic dairy product last period
with 690 ads, 6 ounce yogurt, declined this period to 145
ads. The new number 2 product this period is 1 pound
containers of organic butter, with 541 ads. The price
ranged from $2.99 to $5.99, with the weighted average
advertised price being $4.44.
OCTOBER AGRICULTURAL PRICES (NASS): The index of
prices paid by farmers for commodities and services,
interest, taxes, and wage rates in October 2009 was
unchanged at 175. Compared with October 2008, the index was
down 12 points (6.4%). The index of prices received by
farmers for dairy products advanced 7 points during the
month of October 2009 to 106. Compared with October 2008,
the index was down 30 points (22.1%). Prices received by
farmers in October with changes from September were: for
All Milk, $13.80, up $.90; for Fluid Grade Milk, $13.80, up
$.90; and for Manufacturing Grade Milk, $13.00, up $.80.
NOVEMBER CORRECTED ANNOUNCED COOPERATIVE CLASS I PRICES
(AMS): The November 2009, corrected all-city average
announced cooperative Class I price was $18.02, $2.52 higher
than the Federal milk order (FMO) Class I price average for
these cities. The corrected November cooperative Class I
price was $0.56 higher than the October price, while the
Federal order Class I price was $0.51 higher. On an
individual city basis, the difference between the Federal
order and announced cooperative Class I price ranged from
$.50 in Phoenix, AZ, to $3.81 in Miami, FL. For November
2008, the all-city average announced cooperative Class I
price was $22.42, $2.45 higher than the Federal order Class
I price average for these cities.
SEPTEMBER DAIRY PRODUCTS (NASS): Butter production was
94.6 million pounds in September, 21.9% below September 2008
and 6.2% below August 2009. American type cheese production
totaled 341.2 million pounds, 6.4% above September 2008 but
1.1% below August 2009. Total cheese output (excluding
cottage cheese) was 845.4 million pounds, 4.4% above
September 2008 but 0.5% below August 2009. Nonfat dry milk
production, for human food, totaled 87.1 million pounds,
1.8% above September 2008 but 17.7% below August 2009. Dry
whey production, for human food, was 83.9 million pounds,
2.8% above September 2008 but 3.5% below August 2009. Ice
cream (hard) production totaled 74.3 million gallons, 2.1%
below September 2008 and 6.1% below August 2009.
1200CT butch.speth@ams.usda.gov 608.250.3202