Dairy market news at a glance (March 22-26)

Click here for the complete USDA Dairy Market News for March 22-26

BUTTER: Grade AA closed at $1.7750. The weekly average for Grade AA is $1.7200 (+0.0180)

CHEESE: Barrels closed at $1.4625 and 40# blocks at $1.7200. The weekly average for barrels is $1.4480 (-0.0600) and blocks, $1.7130 (- 0.0850).

NONFAT DRY MILK: Grade A closed at $1.1700. The weekly average for Grade A is $1.1560 (-0.0105).

DRY WHEY: Extra grade dry whey closed at $0.6275. The weekly average for dry whey is $0.6215 (+0.0170).

CHEESE HIGHLIGHTS: Cheesemakers across the country report readily accessible milk supplies. Spot milk prices in the Midwest ranged from $5 to $3 under Class, compared to $6 to $2 under a year ago during week 12. Cheese demand upticks have been reported, particularly on the food service side, as pandemic restrictions ease. Western contacts relay export numbers have improved, as well. Cheese inventories are noted as steady to a bit higher than they were in early spring 2020. Although block prices have slipped on the CME some from last week, cheese market tones are somewhat stable

BUTTER HIGHLIGHTS: Cream is ample in the West, but industry contacts anticipate supplies tightening, as reported in the Central and East regions. Butter churns are attracting less cream than in recent weeks, and ice cream makers are starting to pull more heavily at available supplies to support seasonal production needs. Butter inventories are heavy in some regions, however, domestic and export interests are stable and expected to deplete those inventories as the year advances. Heading into the spring holiday season, retail butter demand is strong with many retailers planning holiday butter advertisements. Food service demand is growing as restrictions continue to relax. Butter market tones are firm.

FLUID MILK: Milk supplies are stable to readily available in the U.S. There are signs of the flush in the West and in the Central regions. Class I sales are fairly steady in the East and West. In the Central, Class I demands are slightly lower this week, as additional milk loads are moving to manufacturing. Some schools’ pipeline demands are lower with several school systems closed for spring break. Cream is tightening in the Central and East regions. In the West, cream supply is fairly available, although some market participants are seeing a slight tightness in cream availability. Additional condensed skim volumes are moving to some operations. Cream multiples are 1.28 – 1.40 in the East, 1.23-1.34 in the Midwest, and 1.05-1.26 in the West.

DRY PRODUCTS: Low/medium heat nonfat dry milk (NDM) prices are mixed this week. Domestic and international demands are stable for the near term. The market tone is somewhat uncertain. High heat prices are mixed. Some buyers are purchasing on a narrower price range. Market conditions vary across regions. Dry buttermilk prices are steady to higher. Trading activities are fairly active. There are some shipping hurdles in the West region. The price range widened in the dry whole milk market this week. Dry whey prices are mostly higher. Market participants report both international and domestic demand remains hearty. The market tone is firm. Whey protein concentrate 34% prices are steady to higher. The demand for sports nutrition products is growing as gyms are reopening and team sports return to pre COVID schedules. Lactose prices are steady to higher. The demand for lactose has strengthened in standardization. The lactose market tone is bullish. Prices for acid casein are higher, although rennet casein prices are unchanged. Casein markets are firming.

ORGANIC DAIRY MARKET NEWS: Organic feed soybean trading activities are active. Organic feed soybeans traded $3.47 higher FOB. There is uncertainty in current availability for imported soybean meal. Some end users are receiving soybean meal offers in the 1200.00 to 1400.00/ton range. Trading activities and market trends are fairly unchanged on organic feed wheat, oats, barley and rye at this time. An organic dairy cooperative is introducing a clean energy fund for farmers. The coop has partnered with a credit union for a $1 million fund for participating farmers to reduce energy costs and improve sustainability. The loans will support investments in improvements such as solar electric systems, energy-efficiency developments, and geothermal system advances.

NATIONAL RETAIL REPORT (DMN): Total conventional dairy ads increased by 11 percent, while organic dairy ads decreased by 27 percent. The most advertised dairy item this week is conventional 48 to 64-ounce containers of ice cream. The national weighted average price is $2.81, down 14 cents from last week. The national weighted average advertised price for conventional 1-pound butter is $2.61, 17 cents lower than last week. Conventional yogurt ads decreased by 15 percent, and organic milk ads decreased by 67 percent. The national weighted average advertised price for conventional Greek yogurt in 4 to 6-ounce containers is $0.98, up 5 cents from last week. Conventional yogurt in 4 to 6-ounce containers has a national weighted average advertised price of $0.49, unchanged from last week.

FEBRUARY COLD STORAGE (NASS): On February 28, U.S. cold storage holdings of butter totaled 352.7 million pounds, up 6 percent from the previous month, and up 17 percent from February 2020. Natural American cheese holdings total 816.0 million pounds, up 1 percent from the previous month, and 5 percent more than February 2020. Total natural cheese stocks were 1.436 billion pounds, up 2 from last month, and 5 percent more than February 2020.

FEBRUARY MARKET SUMMARY AND UTILIZATION REPORT (FMMO): During February, 9.8 billion pounds of milk were received from Federally pooled producers. This volume of milk is 18.0 percent lower than the February 2020 volume. Regulated handlers pooled 3.4 billion pounds of producer milk as Class I products, up 1.9 percent when compared to the previous year. The all-market average Class utilization percentages were: Class I = 35%, Class II = 16%, Class III = 14%, and Class IV = 36%. The weighted average statistical uniform price was $15.12 per cwt, $0.15 lower than last month and $2.39 lower than last year.

DECEMBER MAILBOX MILK PRICES (FMMO): In December 2020, mailbox milk prices for selected reporting areas in Federal milk orders averaged $17.34 per cwt, down $1.81 from the November 2020 average and down $2.57 per cwt from the December 2019 average. The component tests of producer milk in December 2020 were: butterfat, 4.09 percent; protein, 3.29 percent; and other solids, 5.76 percent.

MARCH RETAIL MILK PRICES (FMMO): U.S. simple average prices are: $3.59 per gallon for conventional whole milk, $3.55 per gallon for conventional reduced fat 2% milk, $4.07 per half gallon organic whole milk, and $4.07 per half gallon organic reduced fat 2% milk.