DAIRY MARKET NEWS
WEEK OF JANUARY 18 - 22, 2021 VOLUME 88, REPORT 3
DAIRY MARKET NEWS AT A GLANCE
CME GROUP CASH MARKETS (1/22)
BUTTER: Grade AA closed at $1.4025. The weekly average for Grade AA is $1.4163(+0.1168).
CHEESE: Barrels closed at $1.3925 and 40# blocks at $1.6100. The weekly average for barrels is $1.4456 (-0.1604) and blocks, $1.6981 (-0.2139).
NONFAT DRY MILK: Grade A closed at $1.1725 The weekly average for Grade A is $1.1925 (+0.0010).
DRY WHEY: Extra grade dry whey closed at $0.5400. The weekly average for dry whey is $0.5375(+0.0275).
CHEESE HIGHLIGHTS: Cheese production has regained momentum in the third week of the year. Growing milk supplies, with lighter Class I demand than in previous years, kept spot milk at steep discounts. Spot milk ranged from $8.50 under to $4 under. Prices last year bottomed out at $3.50 under, while two years ago slight overages were reported and the low was $2 under Class. Typically, schools returning from holiday breaks would spread milk a little thinner. However, with limited in-person activity at schools throughout the country, more milk is bound for the cheese vat. Additionally, a fairly mild winter in many parts of the country has milk levels higher ahead of the spring. Cheese inventories have grown, and even with the food box continuation announced, market tones have responded more to active production/heavy milk supplies than they have to the governmental program news.
BUTTER HIGHLIGHTS: Nationwide, butter producers are reporting similar tones this week to last week; churning is busy, as cream remains readily available. Butter production is generally heavy as runs include salted and unsalted butter. As butter interest typically declines after the holidays, demand for wholesale bulk butter is moderate and buyers generally order as needed. Having said this, retail sales are being impacted by the seasonal dip in demand. Contacts say butter inventories are steadily building into cold storage.
FLUID MILK: Western milk production is described as stable, steady, and strong. Mild winter weather has helped milk production in the East, Midwest, Idaho, Utah, Colorado, and New Mexico. Milk production in the rest of the country is growing. Midwest butterfat component levels are increasing while protein is slightly lower. Milk is available for cheese production between $8.50 to $4 under. Idaho reports discounted milk loads up to $4.50 under Class IV. Cream is readily available in the East and Central Region. California cream spot sales are steady to down and most condensed skim loads are clearing through the dryers. F.O.B. cream multiples are 1.0500 - 1.2100 in the East, 1.1500 - 1.2100 in the Midwest, and 1.0000 - 1.1800 in the West.
DRY PRODUCTS: Low/medium heat nonfat dry milk prices are higher in every facet in the East and Central Regions. Western prices are mostly higher on the range and mostly price series. Production is steady to busy. The focus is contracting, leaving limited spot market offerings. Dry buttermilk prices are steady to higher. Available dryer time is limited because nonfat dry milk is being given preference. That limits dry buttermilk production, or results in more sales of condensed buttermilk. Dry whey prices strengthened in all regions. Supplies are tight, which limits spot load availability. Export interest is strong. Whey protein concentrate 34% prices increased at the top of the price range and both ends of the mostly price series. Some buyers are looking for WPC 34% as an alternative to other dairy proteins. Production is steady to lower. Lactose prices and production are steady. Inventories are balanced. Acid casein prices strengthened at a healthy pace following China purchases, while rennet casein moved up slightly.
CONTINUED ON PAGE 1A
TABLE OF CONTENTS
Product Highlights/CME/DMN at a Glance | 1 | Dry Whey/WPC 34%/Lactose/Casein | 6 | Dairy Graphs | G1 |
Weekly CME Cash Trading/Butter Markets | 2 | U.S. Dairy Cow Slaughter/Class Milk Prices/NDPSR/Futures | 7 | National Retail Report - Dairy | |
Cheese Markets | 3 | International Dairy Market News | 8 | Dairy Market News Contacts | |
Fluid Milk and Cream | 4 | February Advanced Class Prices by Order | 9 | ||
Nonfat Dry Milk/Dry Buttermilk/Dry Whole Milk | 5 |
DAIRY MARKET NEWS PRICE SUMMARY FOR JANUARY 18 - 22, 2021 | ||||||||||||||
PRICES ($/LB) & CHANGES FROM PREVIOUS PUBLISHED PRICES | ||||||||||||||
Commodity | Range | Mostly | Commodity | Range | Mostly | Commodity | Range | Mostly | ||||||
NDM | BUTTERMILK | LACTOSE | ||||||||||||
Central Low/Med. Heat | 1.1500 | 1.2400 | 1.1800 | 1.2100 | Central/East | 1.0400 | 1.1100 | Central/West | 0.3100 | 0.5500 | 0.3500 | 0.4600 | ||
Change | 0.0200 | 0.0400 | 0.0400 | 0.0250 | Change | N.C. | 0.0100 | Change | N.C. | N.C. | N.C. | N.C. | ||
Central High Heat | 1.2600 | 1.3200 | West | 1.0400 | 1.1300 | 1.0600 | 1.1000 | WPC 34% | ||||||
Change | 0.0600 | 0.0200 | Change | 0.0100 | 0.0600 | 0.0200 | 0.0400 | Central/West | 0.9100 | 1.1400 | 0.9500 | 1.0150 | ||
West Low/Med. Heat | 1.1600 | 1.2275 | 1.1750 | 1.2000 | WHEY | Change | N.C. | 0.0375 | 0.0100 | 0.0250 | ||||
Change | 0.0300 | N.C. | 0.0350 | 0.0200 | Central | 0.4300 | 0.5500 | 0.4800 | 0.5000 | CASEIN | ||||
West High Heat | 1.2600 | 1.3550 | Change | 0.0100 | 0.0300 | 0.0100 | N.C. | Rennet | 3.4625 | 3.4950 | ||||
Change | 0.0500 | N.C. | West | 0.4400 | 0.5500 | 0.4700 | 0.5050 | Change | 0.0025 | 0.0050 | ||||
DRY WHOLE MILK | Change 0.0100 0.0050 0.0100 0.0050 | Acid | 3.5175 | 3.9500 | ||||||||||
National | 1.5500 | 1.7000 | Northeast | 0.4700 | 0.5200 | Change | 0.2075 | 0.3250 | ||||||
Change | 0.1000 | 0.1000 | Change | 0.0600 | 0.0450 | ANIMAL FEED WHEY | ||||||||
Central | 0.3600 | 0.4100 | ||||||||||||
Change | N.C. | N.C. |
DAIRY MARKET NEWS PRICE SUMMARY FOR JANUARY 11 - 22, 2021 | ||||||||
PRICES ($/MT) & CHANGES FROM PREVIOUS PUBLISHED PRICES | ||||||||
Commodity | Range | Commodity | Range | Commodity | Range | |||
SMP | WHOLE MILK POWDER | BUTTER | ||||||
W. Europe | 2700 | 2875 | W. Europe | 3325 | 3475 | W. Europe | 4000 | 4250 |
Change | 25 | 50 | Change | -75 | N.C. | Change | N.C. | 25 |
Oceania | 3250 | 3375 | Oceania | 3350 | 3400 | Oceania | 4700 | 4825 |
Change | 200 | 250 | Change | 75 | 75 | Change | 250 | 300 |
S. America | 3150 | 3350 | S. America | 3350 | 3450 | BUTTEROIL | ||
Change | 150 | 225 | Change | 75 | 75 | W. Europe | 4700 | 4950 |
WHEY | Change | -200 | -75 | |||||
W. Europe | 1000 | 1075 | CHEDDAR CHEESE | |||||
Change | N.C. | 25 | Oceania | 4000 | 4100 | |||
Change | -50 | N.C. |
WEEK OF JANUARY 18 - 22, 2021 | DAIRY MARKET NEWS | VOLUME 88, REPORT 3 |
DAIRY MARKET NEWS AT A GLANCE |
CONTINUED FROM PAGE 1
INTERNATIONAL DAIRY MARKET NEWS: WESTERN OVERVIEW: Western Europe sources report that 2021 began with milk production lower than one year earlier. In Germany the seasonal increase slowed, with estimates that first week January milk production dipped slightly lower than the prior week. EU milk production January
- November 2020 increased 1.7 per-cent from January - November 2019 according to CLAL data made available to USDA. Among some of the top milk producers, the percentage changes January - November 2020 compared with January - November 2019 are Germany, +0.5 percent; France, +0.6 per-cent; and Netherlands, +1.3 percent. Cheese demand in Western Europe is stronger than most manufacturers had expected. Especially high retail demand for cheese is noted, fueled by store promotions of cheese. Equally surprising is that food service demand is higher than had been expected, notwithstanding COVID-19. Strong contracting will keep cheese production active and stocks low. Cheese manufacturers would take on extra milk as it was available, but they are mostly relegated to contracted volumes.
OCEANIA DAIRY MARKET OVERVIEW: AUSTRALIA: Australia struggled during 2020 to maintain export volumes of dairy powders, butter, and cheese. Internal Australian demand was one factor. But simmering political tensions with China, a significant export customer, are believed to have led to China looking for more sourcing elsewhere during the latter part of 2020. NEW ZEALAND: New Zealand milk production is moving lower seasonally. However, adverse weather concerns have abated. South Island sources describe soil moisture as better than normal. Pasture growth on both the North and South Islands is very healthy. Recent rains and expected rain in the coming week, give further confidence that pastures will remain healthy for grazing for some time.
SOUTH AMERICA OVERVIEW: After a few weeks of dryness, moderate rains returned to the main dairy basins and agriculture zones of Brazil, Argentina, Paraguay, and Uruguay. These showers were beneficial to the development of corn and soybean, boosting soil moisture. This rainy climate hindered milk yields in a few farms mainly due to sanitary issues for milking herds. Nevertheless, cases of mastitis are minimal in most dairy farms. Several tambos are running operations with less milk than usual, but most of the raw milk has been shipped on time. High-er summer temperatures, which have been very discomforting to dairy herds, are also diminishing milk production. Attractive beef prices have encouraged some dairy farm operators to sell some heads into the meat industry, shrinking the size of their dairy herds. With most educational institutions closed, more manufacturing milk intakes have been moving into cheese, yogurt, and milk caramel production.
NATIONAL RETAIL REPORT (DMN): The total number of conventional dairy product advertisements increased 18 percent, but the total number of organic dairy product ads decreased 6 percent. Total conventional cheese ads increased 10 percent this week. There were no organic reported ads for cheese in the survey this week. Conventional shredded cheese in 8 ounce packages is the most advertised dairy product this week, with a 10 percent increase in ad numbers from one week ago. Conventional ads for 1 pound print butter increased by 49 percent. The weighted average price for conventional 1 pound butter packages is $2.93, compared to $5.83 for organic 1 pound butter packages, yielding a $2.90 organic premium. For ice cream in 48-64ounces containers, the average price is $3.31 for conventional and $5.99 for organic, representing an organic premium of $2.68. The national weighted average advertised price for conventional milk in half gallons is $2.63, compared to $3.65 for organic milk half gallons, resulting in an organic premium of $1.02. Conventional milk ads decreased by 9 percent, while organic milk ads dropped by 30 percent. Milk in half gallons is the most advertised organic item this week. The total number of ads for yogurt increased by 20 percent for conventional and 145
percent for organic. The weighted average advertised price for conventional yogurt in 32-ounce containers is $2.62, compared to $3.50 for organic yogurt in 32 ounce containers. The resulting organic premium is 88 cents.
ADVANCED CLASS PRICES (FMMO): The base Class I price for February 2021 is $15.54 per cwt, an increase of $0.40 per cwt when compared to January 2021. A Class I differential for each order's principle pricing point (county) is added to the base price to determine the Class I Price. For February 2021, the advanced Class IV skim milk pricing factor is $8.57 per cwt, the Class II skim milk price is $9.27 per cwt, and the Class II nonfat solids price is $1.0300 per pound. The two- week product price averages for February 2021 are: butter $1.4765, nonfat dry milk $1.1295, cheese $1.6342, and dry whey $0.4487.
-1A-
DAIRY MARKET NEWS, JANUARY 18 - 22, 2021 | -2- | VOLUME 88, REPORT 3 | |||||||
COMMODITY | MONDAY | TUESDAY | WEDNESDAY | THURSDAY | FRIDAY | :: | WEEKLY | :: | WEEKLY |
JAN 18 | JAN 19 | JAN 20 | JAN 21 | JAN 22 | CHANGE | AVERAGE | |||
CHEESE | |||||||||
BARRELS | No Trading | $1.5600 | $1.4400 | $1.3900 | $1.3925 | :: | (-0.1800) | :: | $1.4456 |
(-0.0125) | (-0.1200) | (-0.0500) | (+0.0025) | :: | :: | (-0.1604) | |||
40 POUND BLOCKS | No Trading | $1.8000 | $1.7300 | $1.6525 | $1.6100 | :: | (-0.2200) | :: | $1.6981 |
(-0.0300) | (-0.0700) | (-0.0775) | (-0.0425) | :: | :: | (-0.2139) | |||
NONFAT DRY MILK | |||||||||
GRADE A | No Trading | $1.2150 | $1.2000 | $1.1825 | $1.1725 | :: | (-0.0275) | :: | $1.1925 |
(+0.0150) | (-0.0150) | (-0.0175) | (-0.0100) | :: | :: | (+0.0010) | |||
BUTTER | |||||||||
GRADE AA | No Trading | $1.4050 | $1.4550 | $1.4025 | $1.4025 | :: | (+0.1125) | :: | $1.4163 |
(+0.1150) | (+0.0500) | (-0.0525) | (N.C.) | :: | :: | (+0.1168) | |||
DRY WHEY | |||||||||
EXTRA GRADE | No Trading | $0.5350 | $0.5350 | $0.5400 | $0.5400 | :: | (+0.0100) | :: | $0.5375 |
(+0.0050) | (N.C.) | (+0.0050) | (N.C.) | :: | :: | (+0.0275) |
Prices shown are in U.S. dollars per lb. in carlot quantities. Carlot unit weights: CHEESE, 40,000-44,000 lbs.; NONFAT DRY MILK, 41,000-45,000 lbs.; BUTTER, 40,000-43,000 lbs.;DRY WHEY, 41,000-45,000 lbs. Weekly Change is the sum of Daily Price Changes. Weekly Average is the simple average of the Daily Cash Close prices for the calendar week. Weekly Average Change is the difference between current and previous Weekly Average. Computed by Dairy Market News for informational purposes. This data is available on the Internet at
WWW.AMS.USDA.GOV/MARKET-NEWS/DAIRY
NOTICE: Five days of trading information can be found at www.cmegroup.com/trading/agricultural/spot-call-data.html
BUTTER MARKETS
NORTHEAST
Butter production is keeping pace with the recent heavy churning at Eastern balancing plants. Current output is fulfilling butter sales and being consolidated for storage programs. Available cream supports 7 day run schedules. Most butter facilities are sufficiently stocked as inventory levels inevitably build. The pandemic environment challenges buyers and sellers beginning of the year plans for future butter needs. Demand for wholesale bulk butter is moderate. Buyers generally order as needed. Sales of wholesale bulk butter, f.o.b. East, are reported in the range of 3 to 7 cents over the CME, based on various time frames and averages. Print production is steady to light. Retail sales are being impacted by the seasonal dip in demand. Some butter manufacturers are working on completing international orders. Interest remains good. Prices had been trending incrementally lower, but saw a sharp shift following the holiday break. The current undertone indicates unsettledness in the market.
Prices for: Eastern U.S., All First Sales, F.O.B., Grade AA, Conventional,
and Edible Butter | +0.0300 - +0.0700 |
Bulk Basis Pricing - 80% Butterfat $/LB: |
Secondary Sourced Information:
This week, a cooperative export assistance program accepted requests for export assistance to sell 1.144 million pounds (519 metric tons) of butter.
WEST
In the West, butter production is generally heavy as runs include salted and unsalted butter. Domestic butter interest typically declines after the holidays and plants consequently experience increases in inventory, which is no exception for butter manufacturers in the region this year. Cream that is available for churning is highly sufficient, although a drop is noted in the region's surplus cream, as Class II cream-based operations shift to post- holiday production gear. Bulk butter production is active and continues to build cold storage volumes. The f.o.b. West bulk butter price is $0.0350 to $0.0750 over the market of the CME Group, with various time frames and averages used. Retail store sales are fair and expected to increase as some retail outlets are already discussing orders for the upcoming holiday. Featured activity for butter is higher this week in parts of the region. Export market trading continues to be good.
Prices for: Western U.S., All First Sales, F.O.B., Grade AA, Conventional, and Edible Butter
Bulk Basis Pricing - 80% Butterfat $/LB: | +0.0350 - +0.0750 |
Secondary Sourced Information:
This week, a cooperative export assistance program accepted requests for export assistance to sell 1.144 million pounds (519 metric tons) of butter.
CENTRAL
Butter producers are reporting similar tones this week to last week. Churning is busy, as cream remains readily available from the Midwestern and Western regions. Cream multiples, within the Central region, have come up week to week, but they remain accessible for the churn. Contacts say butter inventories are growing. Demand notes are following the recent trend. Retail remains steady, as holiday pipelines have been refilled. That said, food service demand notes have seen better days. Some butter producer contacts expect the food box programs to assist markets, following an $.1150 bump on Tuesday. However, they have concerns about inventories, which are growing alongside milk/butterfat yields.
Prices for: Central U.S., All First Sales, F.O.B., Grade AA, Conventional,
and Edible Butter | 0.0000 - +0.0500 |
Bulk Basis Pricing - 80% Butterfat $/LB: |
DAIRY MARKET NEWS, JANUARY 18 - 22, 2021 | -3- | VOLUME 88, REPORT 3 |
CHEESE MARKETS | ||
NORTHEAST | WHOLESALE SELLING PRICES: DELIVERED | |
DOLLARS PER POUND(MIXED LOTS (1000-5000 POUNDS)) |
Milk is widely available in the Northeast for Class III operations. Cheese makers' intakes are near or at capacity. Mozzarella and pro- volone cheese production is strong in the region. Manufacturers' inventory levels are steadily increasing. There are reports cheese orders are picking up. Retail cheese sales are moderate. Several retailers are receiving a steady amount of supplies each week. The foodservice sector continues to bear a softer tone. Numerous restaurants continue to work through shifting operating options. Cheese spot prices are currently mixed. On the CME Group, cheddar block and barrel prices have shifted slightly downwards. Cheese markets are unsettled.
WHOLESALE SELLING PRICES: DELIVERED
DOLLARS PER POUND(MIXED LOTS (1000-5000 POUNDS))
Cheddar 40 pound Block | 2.3650-2.6525 |
Muenster | 2.3525-2.7025 |
Process American 5 pound Sliced | 1.7050-2.1850 |
Swiss 10-14 pound Cuts | 3.8725-4.1950 |
MIDWEST
Midwestern cheesemakers relayed readily available milk supplies again this week. Reported spot milk prices have already met last week's lows of $8.50 under Class, but the high end of the range ($2 under) has not been passed along at report time. Curd producers say restaurant orders moved higher, which they say is not something they have seen in months. Cheddar producers are hopeful the government awards will assist in putting a dent in their growing inventories. That said, current inventories are not overtly concerning, but producers relay that could change day to day. Cheese market tones are coming to earth after the initial runup from two weeks ago.
WISCONSIN WHOLESALE SELLING PRICES: DELIVERED DOLLARS PER POUND(MIXED LOTS (1000-5000 POUNDS))
Cheddar 10 pound Cuts | 2.2400-2.4400 |
Cheddar 40 pound Block | 1.9925-2.4825 |
Monterey Jack 10 pounds | 2.2275-2.5025 |
Process American 5 pound Loaf | 1.7075-1.9625 |
Swiss 6-9 pound Cuts | 3.6800-4.1100 |
FOREIGN TYPE
Western European cheesemakers are pleased with increased cheese production during 2020, and better yet, increases in cheese exports. The United States is a top importer of EU cheese. In fact, sustaining the export demand has kept aging stocks atypically low. While there has been added cheese production capacity in recent years, some cheese plants have not contracted enough January milk production to operate at capacity. Securing spot milk to increase cheese production is currently challenging because butter and SMP production are more profitable. Extra milk often flows into butter and SMP rather than cheese, if transportation is not problematic. Thus, there is production capacity to increase cheese production to grow exports, but for now, milk availability is constraining both production and export increases.
WHOLESALE SELLING PRICES: FOB DISTRIBUTORS DOCK DOLLARS PER POUND (1000 - 5000 POUNDS, MIXED LOTS)
VARIETY | : | NEW YORK | : | DOMESTIC |
: | IMPORTED | |||
Blue | : | 2.6400-5.2300 | : | 2.3725-3.8600* |
: | : | |||
Gorgonzola | : | 3.6900-5.7400 | : | 2.8800-3.5975* |
Parmesan | : | -0- | : | 3.7600-5.8500* |
Romano | : | -0- | : | 3.5625-5.7175* |
Sardo Romano (Argentina) | : | 2.8500-4.7800 | : | -0- |
Reggianito (Argentina) | : | 3.2900-4.7800 | : | -0- |
Jarlsberg | : | 2.9500-6.4500 | : | -0- |
Swiss | : | -0- | : | 3.9075-4.2325 |
Swiss (Finland) | : | 2.6700-2.9300 | : | -0- |
* = Price change.
Blue 5 pounds | 2.5475-3.6175 |
Brick 5 pounds | 2.2800-2.7050 |
Cheddar 40 pound Block | 2.0025-2.4025 |
Monterey Jack 10 pounds | 2.2550-2.4600 |
Mozzarella 5-6 pounds | 2.0800-3.0250 |
Muenster 5 pounds | 2.2800-2.7050 |
Process American 5 pound Loaf | 1.6900-2.0500 |
Swiss 6-9 pound Cuts | 3.3875-3.5050 |
WEST
Copious amounts of milk are resulting in the production of plenty of cheese. Western cheesemakers are actively producing cheese, but an unsettled feeling persists within the market. This uncertainty has seemed to play out in some cash markets. The announcement of more government food box program purchases created an initial push upwards on cheese prices, but now, the momentum has seemed to wane. Forecasting market direction has been difficult and neither buyers, nor sellers, want to overextend themselves. Cheese inventories are abundant and able to meet most needs. However, industry contacts confirm that food service and institutional demand has remained weak. Retail demand, while better than last year, is not able to offset the reduction in cheese sales into other channels. Until sit- down dining returns, contacts expect the cheese market may be chal- lenging.
COLD STORAGE
WEEKLY COLD STORAGE HOLDINGS - SELECTED STORAGE CENTERS IN THOUSAND POUNDS - INCLUDING GOVERNMENT STOCKS
01/18/2021 | : | BUTTER | : | CHEESE |
: | 54315 | 86471 | ||
01/01/2021 | : | 45415 | : | 77986 |
CHANGE | : | 8900 | : | 8485 |
% CHANGE | : | 20 | : | 11 |
Secondary Sourced Information:
This week, a cooperative export assistance program accepted requests for export assistance on contracts to sell 608,476 pounds (276 metric tons) of cheese. So far this year, the program has assisted member cooperatives who have contracts to sell 1.471 million pounds of American-type cheeses in export markets. When combined with but- ter, cream cheese and whole milk powder, the program has assisted members with sales of 84.3 million pounds of milk on a milkfat basis.
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Agricultural Marketing Service published this content on 22 January 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 January 2021 19:31:04 UTC