National Dairy Market at a Glance
USDA - Fri May 10, 6:15AM CDT
MD_DA950

     Dairy Markets at a Glance

     Report 19 - Released on May 10, 2019

     CME GROUP CASH MARKETS (5/10)
     BUTTER: Grade AA closed at $2.3400. The weekly average for Grade AA is $2.3025 (+.0305).
     CHEESE: Barrels closed at $1.7100 and 40# blocks at $1.6800. The weekly average for barrels
     is $1.7225 (+.0860) and blocks, $1.6975 (+.0300).
     NONFAT DRY MILK: Grade A closed at $1.0675. The weekly average for Grade A is $1.0640
     (+.0270).
     DRY WHEY: Extra grade dry whey closed at $.3475. The weekly average for dry whey is $.3475
     (+.0030).
          CHEESE HIGHLIGHTS: There was a noteworthy drop-off in spot milk accessibility year over
     year. Spot milk prices were reported from $1 over to $1.50 under Class, significantly
     pricier than in the previous two years of reported spot prices. However, cheese producers
     are suggesting their milk stocks are sufficient during a relatively modest spring flush.
     Cheese production is active nationwide, as stocks continue to grow. On an anecdotal level, a
     number of cheesemaking contacts relay their respective stocks are in balance. Cheese market
     tones are generally healthy right now. CME trading has been somewhat busy this week, as
     barrels have caught their bullish stride.
          BUTTER HIGHLIGHTS: Cream availability into churning has taken a hit across all regions.
     Interestingly, even in the West where cream has been more abundant, butter makers are not
     receiving discounts. Churning does remain steady in the East and West, but micro-fixing
     schedules have elevated in the Midwest. Orders are steady to slightly slower seasonally, as
     butter producers have switched their focus to fall demand. Bulk butter is available,
     although bulk butter pricing has remained mostly steady and at a premium in all regions.
     Butter markets remain resolute week over week, month over month. Contacts are mixed on
     market expectations. Some relay they expect a spike to come this fall, others have suggested
     continued stability.
          FLUID MILK: Northeast and Southeast farm milk output varies from farm to farm, but Mid-
     Atlantic output is increasing. Milk output in the Midwest is steady to slightly up week over
     week, but contacts continue to suggest spring flush has yet to appear. Spot milk into cheese
     plants suggests as much: $1 over to $1.50 under, but more spots falling nearer to Class III
     than elsewhere. Western milk production reports are steady week over week and lower year
     over year as well. Class I sales are steady in most areas, although Pacific Northwestern
     contacts suggest bottling sales were ahead of expectations. Class II intakes are picking up
     nationally as well, as ice cream production has picked up for the season, although a little
     later than some expected due to a cold/rainy spring season. Cream prices are edging up in
     the East and Midwest, while they remained steady in the West. Cream accessibility from
     butter churners in the East/Midwest has begun to wane. F.O.B. cream multiples are 1.25-1.32
      in the East, 1.20-1.31 in the Midwest, and 1.10-1.22 in the West.
          DRY PRODUCTS: Low/medium and high heat nonfat dry milk (NDM) prices increased across
     the nation. Nonfat dry milk market tones are bullish, as recently produced availability has
     tightened up. NDM market tones are resolute. Dry buttermilk prices are mostly steady, but
     slightly up again in the Central/East. Western demand is primarily contractual, thus spot
     trades were lighter. Dry whole milk prices held steady this week, as trading was muted. Dry
     whole milk production is limited, as condensed skim continues to take on the lion�s share
     of drying time. Dry whey prices are lower in the Midwest, but mixed in other regions. Dry
     whey markets are unclear, as global issues have burdened dry whey and lactose. Thus, lactose
     prices were steady to lower. Contacts expect trade issues and African Swine Fever to
     negatively impact dairy carbohydrates for the near term. Whey protein concentrate 34% (WPC
     34%) price range held steady again this week. Inventory reports range from comfortable to a
     bit tight. Acid and rennet casein prices increased, as buyer hesitation has remedied due to
     limited and/or uncertain production forecasts.
          INTERNATIONAL DAIRY MARKET NEWS: EUROPE OVERVIEW: WESTERN: Milk production in Western
     Europe during 2019 so far has not met expectations. Nevertheless, Western European milk
     production continues inching up seasonally, with the seasonal peak usually occurring in May
     each year. Demand for Western European cheese remains strong. However, lower than desired
     cumulative milk production so far this year in Western Europe is keeping cheese production
     lower than capacity and lower than desirable. Inventories and aging stocks continue to be
     poached to meet current demand and obligations. Most scheduled May production is already
     sold. Increased pricing for what is still available from scheduled June production is likely

     as sales are closed. EASTERN OVERVIEW: Czech Republic milk production through March this
     year was 0.6 percent higher than the same period of 2018 according to CLAL data provided to
     USDA. That contributed to increased butter production of 6.7 percent. Cheese production
     declined 2.0 percent and SMP production declined 9.9 percent.
          OCEANIA OVERVIEW: AUSTRALIA: Milk production in Australia remains in a late seasonal
     month by month period of slight fluctuation. In most years, production begins to trend up in
     July. The structure of the dairy processing industry in Australia remains in a state of
     evolution. A dairy firm based in Canada is closer to finalizing the purchase of an
     Australian cheese brand and plants. This possible ownership transfer occurs against the
     backdrop of recent concerns about the surplus dairy processing capacity in Australia. NEW
     ZEALAND: New Zealand milk production remains in a typical somewhat steep month to month
     trend down toward the low point during June-July. In most years, milk production begins a
     sharp upward trend after that. New Zealand must export a significant part of annual milk
     production. Thus, developments in other traditional export destinations are always matters
     of importance in looking forward.
          SOUTH AMERICA OVERVIEW: During the past two weeks, drier climate improved development
     and quality of grains, oilseeds, and cotton crops in Argentina. In the same fashion, showers
     promoted immature corn in Brazil. With a significantly ample corn harvest (Safrinha)
     occurring this season, mainly in brazil, several south American tambos are having and/or
     anticipating a relief on feed cost. In term of milk components, the percentage of fat in the
     milk is at high seasonal levels, and proteins continue improving, according to some
     contacts. Milk requests from bottlers are strong as several retail outlets are restocking
     shelves.
          NATIONAL RETAIL REPORT (DMN): Conventional dairy ad numbers declined 10 percent this
     week. Organic dairy ad numbers declined 35 percent. There are nearly fourteen times more
     conventional dairy ads than organic dairy ads. The most advertised product/category this
     week is conventional ice cream in 48-64 oz. containers. Ad numbers for 16 oz. cottage
     cheese more than doubled.
          APRIL CONSUMER PRICE INDEX (BLS): The April CPI for all food is 257.7, up 1.8% from
     2018. The dairy products index is 217.5, up 0.3% from a year ago. The following are the
     April to April changes for selected products: fresh whole milk is 2.4 percent; cheese,
     -2.2 percent; and butter, -1.6%.
          MARCH MILK SALES (CDFA): 3.9 billion pounds of packaged fluid milk products were
     shipped by milk handlers in March 2019. This was 4.7 percent lower than a year earlier.
     Estimated sales of total conventional fluid milk products decreased 4.5 percent from March
     2018 and estimated sales of total organic fluid milk products decreased 8.1 percent from a
     year earlier.

     PACKAGED FLUID MILK SALES IN FEDERAL MILK ORDER MARKETS REPORT (FMMO): The twenty-ninth
     installment of the Packaged Fluid Milk Sales in Federal Milk Order Markets Report was
     finalized and is now available at the link below. The publication presents information
     relating to containers in which fluid milk products are sold, and the methods of
     distribution used to market these items by handlers regulated under Federal milk marketing
     orders (FMMO). The survey used to collect 2015 data underwent a modernization process to
     better reflect marketing conditions. The number of container sizes was reduced in the 2015
     survey, which allows for fewer instances of restricted data. The survey grouped products
     into three categories � conventional, extended shelf life (ESL) and organic. It is available
     here: https://www.fmmacentral.com/PDFdata/Container%20Survey%202015.pdf

     Information for the period May 6 - 10, 2019, issued weekly

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