Dairy market news at a glance (May 3-7)

Click here for the complete USDA Dairy Market News for May 3-7

BUTTER: Grade AA closed at $1.7700. The weekly average for Grade AA is $1.7500 (-0.0360).

CHEESE: Barrels closed at $1.7275 and 40# blocks at $1.7475. The weekly average for barrels is $1.7960 (-0.0150) and blocks, $1.7820 (- 0.0190).

NONFAT DRY MILK: Grade A closed at $1.3225. The weekly average for Grade A is $1.3370 (+0.0260).

DRY WHEY: Extra grade dry whey closed at $0.6275. The weekly average for dry whey is $0.6455 (-0.0175).

CHEESE HIGHLIGHTS: Cheese market prices stumbled on Thursday, as both block and barrel prices slipped. Market undertones are less assured than they have been in previous weeks. Cheese availability is mixed. Contacts in the Midwest and West have said barrels have become slightly more available, despite fairly healthy demand. Reports on block availability have shown growth in the past month. Eastern cheesemakers report being in balance. Milk is and has been readily available during flush season. Spot milk prices in the Midwest were $4.50 under Class up to $.50 over Class, up slightly on both ends from last week. Still, most cheesemakers are reporting spot prices at $2 under Class or less.

BUTTER HIGHLIGHTS: Cream supplies are steady but tightening. Ice cream production is picking up and drawing more cream, but butter makers are receiving steady supplies of cream to meet production needs. Butter inventories are stable overall, although some plant managers are trying to add some extra bulk loads to coolers to insulate against uncertainties later this summer and fall. Retail sales are reportedly lackluster as retailers and grocers are placing smaller orders. Food service demand is healthy, with continued growth in the East but some leveling off in the Central and Western regions as pipelines have filled in recent weeks. Across the country this week, bulk prices range from flat to 8.0 cents above the market.

FLUID MILK: Milk production varies across the country this week, with output in the Midwest, reportedly, at peak levels. Strong milk production is present in the Southeast, Arizona, and the Pacific Northwest. In the Northeast and Florida, milk output is slowing. Class I demand is steady to strong across most of the country, contrasting with reports of slightly lower demand in New Mexico. Active cheese production schedules nationwide are keeping Class III demand steady. Condensed skim markets are steady, with some tanker/driver shortages keeping loads closer to the points of origin. Ice cream makers across the country have a strong demand for cream. Cream availability is mixed in the Midwest and tightening in the West.

DRY PRODUCTS: Prices for low/medium heat nonfat dry milk (NDM) have pushed higher this week in all regions, amid strong domestic/international demand. High heat NDM prices have also moved higher, as contacts across the country report tight markets. Dryers are active nationwide, with many focusing on low/medium heat NDM rather than high heat or dry buttermilk production. With limited production, dry buttermilk availability is tight for spot purchases. Dry buttermilk prices have increased this week. The dry whole milk price range widened this week as some contacts were able to find spot purchases at a value. Prices for dry whey have been stable to higher in the Central and Northeast, while declining in the West. Dry whey inventories are tight, with some contacts reporting availability in the Northeast. WPC 34% prices moved up at the bottom of both the range and mostly price series, while holding steady at the tops of each series. Inventories of WPC 34% intended for specific purposes, including infant formula, are tight. Lactose prices were mostly steady this week, with the bottom end of the range moving a few cents lower. Market demand for lactose is mixed. The rennet casein price range shifted higher this week. Acid casein prices moved higher at the bottom of the range, while staying steady at the top.

ORGANIC DAIRY MARKET NEWS: The National Organic Program (NOP) announced the creation of a new website with numerous resources for farmers and business owners seeking information about organic certification. Resources will include Spanish translation of the Organic Foods Production Act, along with several other fact sheets, videos and training resources. In the organic corn market, spot trading activities are moderate. Organic feed soybean trading activities are somewhat moderate. Trading activities are lighter for organic feed grade wheat. Current organic soybean meal markets are mostly light. In addition, trading activities and market trends are fairly limited on all other organic grains at this time.

NATIONAL RETAIL REPORT (DMN): Total dairy advertisement numbers decreased from last week. Conventional ads were 11 percent lower, while organic ad numbers shrunk by 32 percent. Conventional ice cream, in 48 to 64 ounce containers, was the most advertised dairy item, despite a two percent decline in ad numbers from week 17. The weighted average price for conventional half gallon milk was $2.73, while organic half gallon milk held a weighted average price of $3.82, resulting in an organic premium of $1.09.

MARCH AGRICULTURAL PRICES HIGHLIGHTS (NASS): The All Milk price received by farmers was $17.40 in March, down $.50 from March 2020. The alfalfa hay price was $181.00 in March, up $9.00 from March 2020. The corn price was $4.89 in March, up $1.21 from March 2020. The soybean price was $13.20 in March, up $4.73 from March 2020. The milk-feed price ratio was 1.75 in March, down 0.49 from March 2020. The index of prices received by farmers for dairy products during the month of March 2021 was up 1.5 to 86.6. Compared to March 2020, the index was down 2.5 points (-2.8 percent). The index of prices paid by farmers for commodities and services, interest, taxes, and wage rates in March 2021 was up 0.9 point to 111.7. Compared with March 2020, the index was up 2.1 points (1.9 percent).

MARCH DAIRY PRODUCTS HIGHLIGHTS (NASS): Butter production was 199 million pounds, 0.6 percent below March 2020, but 6.8 percent above February 2021. American type cheese production totaled 479 million pounds, 7.3 percent above March 2020, and 12.4 percent above February 2021. Total cheese output (excluding cottage cheese) was 1.18 billion pounds, 4.8 percent above March 2020, and 12.6 percent above February 2021. Nonfat dry milk production, for human food, totaled 198 million pounds, 14.1 percent above March 2020, and 8.0 percent above February 2021. Dry whey production, for human food, was 83 million pounds, 1.0 percent above March 2020, and 11.7 percent above February 2021. Ice cream, regular hard production, totaled 69.1 million gallons, 7.5 percent above March 2020, and 24.2 percent above February 2021.

APRIL FINAL CLASS PRICES HIGHLIGHTS (FMMO): The following are the April 2021 class prices under the Federal milk order pricing system and changes from the previous month: Class II: $15.56 ($+0.49), Class III: $17.67 ($+1.52), and Class IV: $15.42 ($+1.24). Under the Federal milk order pricing system, the butterfat price for April 2021 is $1.9496 per pound. Thus, the Class II butterfat price is $1.9566 per pound. The protein and other solids prices for April 2021 are $2.8136 and $0.4268 per pound, respectively. These component prices set the Class III skim milk price at $11.24 per cwt. The April 2021 Class IV skim milk price is $8.91, which is derived from the nonfat solids price of $0.9902 per pound. The product price averages for April 2021 are: butter $1.7814, nonfat dry milk $1.1680, cheese $1.7106, and dry whey $0.6135.