National Dairy Market at a Glance
USDA - Fri Feb 08, 12:35PM CST
MD_DA950

     Dairy Markets at a Glance

     Report 6 - Released on February 8, 2019

     CME GROUP CASH MARKETS (2/8)
     BUTTER: Grade AA closed at $2.2950. The weekly average for Grade AA is $2.2850 (+.0015).
     CHEESE: Barrels closed at $1.3725 and 40# blocks at $1.5275. The weekly average for barrels
     is $1.3255 (+.0500) and blocks, $1.4880 (+.0270).
     NONFAT DRY MILK: Grade A closed at $.9950. The weekly average for Grade A is $.9910
     (-.0185).
     DRY WHEY: Extra grade dry whey closed at $0.3650. The weekly average for dry whey is
     $0.3725 (-.0160).
          BUTTER HIGHLIGHTS: With the milk butterfat component at its seasonal higher peak, cream
     supplies are more than adequate for butter manufacturing at a national level. Therefore,
     butter churning is ongoing in each region of the country, while inventories continue
     building into cold storage for later use during the year. Print/bulk butter interest from
     some market channels, such as grocery stores, wholesalers and restaurants, vary throughout
     the country. The butter market undertone is seasonally stable at this point, while the cream
     market is in a bearish position due to higher supplies. Bulk butter pricing varies among the
     regions: East, 5.0 cents to 8.0 cents over the market; Central, 5.0 cents to 7.0 cents
     above the market; West, 2.0 cents to 7.5 cents over the market, with various periods and
     averages used.
          CHEESE HIGHLIGHTS: Cheese market upturns last week were met with some converse pressure
     early this week, until Thursday, when both block and barrel prices buoyed. Cheese demand is
     mostly steady on the coastal regions, while Midwestern cheesemakers are seeing a seasonal
     slowdown. Milk production and availability are similar across the country: heavy. Reported
     spot load prices ranged from flat to $2 under, as a number of cheese plant managers suggest
     they are not seeking any extra milk. Although some contacts relay respective inventories are
     balanced to more manageable, there is a lot of cheese in storage throughout the country. A
     strong U.S. dollar, and comparable global prices, have not helped generate more exporting,
     recently.
          FLUID MILK: Bitter cold in a large swath of the country last week, and in some areas
     continuing this week, has not hindered recent milk production. Contacts have suggested that
     week-over-week production is steady to increasing, while year-over-year percentages have
     slipped. Even so, plenty of milk is making its way into bottling and other uses ahead of the
     spring flush. Cheese plant managers reported spot milk prices from Class to $2 under this
     week. The extreme cold in the Midwest did force some bottling plant closures last week,
     pushing milk into other outlets at discounts. Pacific Northwest snowfall has some contacts
     suggesting the moisture in the region was needed after what has been a dry winter. Cream,
     like fluid milk, is widely available in most areas of the country. Ice cream production,
     according to Midwestern contacts, has yet to pick up steam. F.O.B. cream multiples are 1.05
     -1.20 in the East, 1.10-1.21 in the Midwest, and 1.00-1.17 in the West.
          DRY PRODUCTS: Low/medium heat nonfat dry milk (NDM) prices are mixed nationally. Supply
     and demand are in balance currently, and prices across the U.S. are hovering right around
     $1. The high heat NDM price strengthened in the Central/East, while the range narrowed in
     the West. Generally, high heat NDM trading is quiet and supplies are tighter and/or moving
     mostly through contacts. Dry buttermilk demand remains healthy in the Central/East where
     prices continued to strengthen slightly this week. In the West, dry buttermilk prices were
     mixed on a narrow mostly price series. The dry whole milk price range also narrowed, as
     global prices of whole milk powder continue below domestic dry whole milk prices. Dry whey
     prices are lower nationally. Midwestern reports continue to exhibit diverging markets, but
     both brand-preferred and interchangeable loads are facing downward pressure. Domestic demand
     has slackened in some cases, as a number of end users report being stocked for the near-
     term. Whey protein concentrate (WPC) 34% prices moved lower on the bottom of the range,
     while remaining steady elsewhere. WPC 34% markets are generally sluggish, with the exception
     of brand-preferred WPC, which is tighter than stocks of more interchangeable loads. Lactose
     prices decreased on the bottom of the mostly, but were steady elsewhere. In some cases,
     lactose inventory reports range from in balance to growing. Rennet and acid casein prices
     increased. After increases on the GDT this week, buyers are moving to make deals as Oceania
     production is expected to slow in the next few months.
          ORGANIC DAIRY MARKET NEWS: Organic Milk Pay Prices in Europe. According to CLAL, the
     most recent organic monthly milk pay price information reports advances for November 2018

     in Germany, Austria and France when compared to October 2018. The organic milk farm price in
     Germany averaged 47.85 euros/100lt ($54.07 USD), 2.90 percent lower than a year ago, but up
     0.29 percent from a month earlier. In Bavaria, an important milk producing region of
     Germany, the average price is 48.10 euros/100lt ($54.35 USD), 3.82 percent lower than one
     year earlier, but 0.10 percent above the previous month. In Austria, November 2018, average
     organic milk farm prices, 44.87 euros/100lt ($50.70 USD), is reported 8.52 percent lower
     than a year ago, but up 1.49 percent from October 2018. France's average organic milk farm
     price for November 2018, 48.29 euros/100lt ($54.57 USD), is 0.83 percent higher than
     November 2017, and 1.29 percent more than October 2018.
          In the first week of February, total organic retail advertisements increased 32
     percent. Organic yogurt, 32 oz packages posted the largest percentage change in ads, 214
     percent. The Northeast region has the largest percentage change for promotions this survey
     period at 215 percent. For organic milk, half gallon packages posted the biggest number of
     ads this week. The current retail milk price spread between organic and conventional half
     gallon milk is an organic premium of $2.44. The price spread shifted up $1.27 compared to
     the prior retail survey.
          NATIONAL RETAIL REPORT (DMN): The total number of conventional dairy advertisements
     decreased by 15 percent, but organic dairy ads increased by 32 percent. Conventional half
     gallon milk ads saw the largest gain of the week, 467 percent week over week. Conventional
     Greek yogurt in 4-6 ounce containers were the most advertised dairy item. Half gallon milk
     ads were the most advertised of the organic items, while 32 ounce organic plain yogurt saw
     the biggest growth week over week.
              NOVEMBER 2018 DAIRY PRODUCTS HIGHLIGHTS (NASS): Butter production was 146 million
     pounds, 2.7 percent below November 2017, but 1.5 percent above October 2018. American type
     cheese production totaled 423 million pounds, 2.2 percent above November 2017, but 3.5
     percent below October 2018. Total cheese output (excluding cottage cheese) was 1.08 billion
     pounds, 1.0 percent above November 2017, but 4.3 percent below October 2018. Nonfat dry
     milk production, for human food, totaled 130 million pounds, 7.7 percent below November
     2017, but 4.3 percent above October 2018. Dry whey production, for human food, was 73.0
     million pounds, 8.6 percent below November 2017, and 14.5 percent below October 2018. Ice
     cream, regular hard production totaled 51.9 million gallons, 4.6 percent above November
     2017, but 13.1 percent below October 2018.

     Information for the period February 4 - 8, 2019, issued weekly

     Published by:
     Dairy Market News - Madison, WI
     ISRAEL WEBER, 608-422-8601
     Email: israel.weber@ams.usda.gov

     Additional Dairy Market News Information:
     Dairy Market News (DMN) by Phone: (608)422-8602
     DMN Website: http://www.ams.usda.gov/market-news/dairy
     DMN Database Portal: http://www.marketnews.usda.gov/mnp/da-home