The Agriculture Department announced the April Federal order Class III milk price at $17.67 per hundredweight, up $1.52 from March, $4.60 above March 2020, and the highest Class III since November 2020.
That put the four-month average at $16.40, up from $15.84 a year ago and $14.71 in 2019.
Monday’s Class III futures settlements portended a May price at $18.86; June, $18.82; July, $19.20; August, $19.36; with the peak at $19.42 in September.
The Class IV price is $15.42, up $1.24 from March, $4.02 above a year ago, and the highest Class IV since February 2020. Its four-month average is $14.14, down from $14.78 in 2020 and $15.69 in 2019.
Cheese falls
Cash cheese prices started May heading lower. The Cheddar blocks crept to $1.8025 per pound last Wednesday but closed Friday at $1.7475, down 5.25 cents on the week, though 44.25 cents above a year ago.
The barrels got to $1.8450 Wednesday, highest since Nov. 12, 2020, but finished Friday at $1.7275, 10.75 cents lower on the week, 45.75 cents above a year ago, and at a more typical 2 cents below the blocks; 19 cars of block were sold last week at the CME and 12 of barrel.
Monday’s trading took the blocks up 2 cents and they gained 0.25 cents Tuesday, hitting $1.77, with 3 cars exchanging hands Monday and 5 on Tuesday.
The barrels dropped 3.25 cents Monday and were down 0.50 cents Tuesday, to $1.69, on 6 trades Monday and 5 on Tuesday.
Midwest cheesemakers tell Dairy Market news that spot milk offers were lighter last week but midweek prices were mostly at sub-Class levels. Cheese output is busy as flush season is near its peak and cheesemakers are taking advantage of available spot milk discounts before milk yields begin to decline with warming weather. Generally, orders are steady. Food service acquisitions are beginning to level off but pizza cheese and process producers continue to say loads are moving.
Western retail cheese demand was slightly lighter last week and food service demand has been leveling. Inventories of cheese remain mixed; blocks are available but barrels are noted as somewhat firm though some contacts suggest not as tight as recent weeks.
Cheese production continues strong, reflecting the abundance of milk in the region. Cheese producers report market prices are in a “somewhat healthy position,” says DMN. An increase in interest from Chinese importers aided in some contacts viewing the market tones with a little more bullishness.
Nate Donnay, StoneX director of Dairy Market Insight, reminds us in his May 6 "Udder Intelligence" that “the Food Box program wraps up this month and the amount of U.S. milk moving through government programs will likely drop from 1.7% in May to 0.5% in June.” Those purchases will have to be made elsewhere.
Butter fell to $1.7350 per pound last Wednesday, lowest since March 24, 2021, but rallied to close Friday at $1.77, up 1.75 cents on the week and 48 cents above a year ago; 16 carloads found new homes on the week.
Monday’s butter was up 1.25 cents and added 3 cents Tuesday, working its way to $1.8125 per pound, highest since April 19.
Central butter makers continue to report lackluster retail sales. Food service orders have picked up, but have steadied in recent weeks. Cream is tightening, but not tight, says DMN, and availability is reportedly more limited, particularly for churning, as ice cream production seasonally increases.
Western cream is tightening a bit. Ice cream makers are working through heavy volumes of cream but butter operations are receiving steady supplies to maintain seasonally active production. Inventories are stable. Southwestern contacts relay concern about the cream outlook this summer. Retail butter orders are steady to lower and food service demand appears to be leveling off.
Dine-in restrictions continue to relax in many locales, but growing COVID case rates and hospitalizations are leading other areas to maintain or even strengthen restrictions.
Grade A nonfat dry milk hit $1.3575 per pound last Wednesday, highest since Oct. 17, 2014, but slipped to a Friday close at $1.3235, down 0.25 cents on the week but 49.75 cents above a year ago, with 28 sales reported for the week.
The powder was unchanged both Monday and Tuesday.
Heavier demand from Mexico coupled with persistent global buying as the New Zealand production season winds to a close has shifted purchasing to the U.S. in recent weeks, according to HighGround Dairy. “NFDM stocks declined in March for the first monthly fall since October 2020, a sign that demand is strong even as output is robust.”
CME dry whey closed last week 3.25 cents lower, at 62.75 cents per pound, still 23 cents above a year ago, with 2 sales reported on the week.
It was also unchanged Monday and Tuesday.
More cheese and powder
You’ll recall March milk output was up 1.8% from March 2020, according to USDA’s preliminary data, and the latest Dairy Products report shows that a lot of that milk flowed to the cheese vat and the dryer.
Cheese output totaled a bearish 1.18 billion pounds, up 12.6% from February, but March had three more days than February. It was 4.8% above March 2020. Output for the first three months of 2021 totaled 3.35 billion, up 2.3% from 2020.
Italian type cheese totaled 502.9 million pounds, up 13.5% from February and 3.6% above a year ago. YTD Italian was at 1.4 billion pounds, up 0.5%.
American type cheese totaled 478.9 million pounds, up 12.4% from February and 7.3% above a year ago. YTD American hit 1.4 billion pounds, up 5.9%.
Mozzarella output, at 394.2 million pounds, was up 2.0% from a year ago, with YTD mozzarella at 1.1 billion pounds, down 0.8% from 2020.
Cheddar, the cheese traded daily at the CME, shot up to 338.7 million pounds, up 38.2 million pounds or 12.7% from the February level which was revised down 1.1 million, and was 24.6 million pounds or 7.8% above a year ago. YTD Cheddar stood at 986.2 million pounds, up 5.6% from 2020.
Butter churns gave us 198.9 million pounds of butter, up 12.6 million pounds or 6.8% from February, but down 1.1 million pounds or 0.6% below a year ago. YTD butter totaled 594.9 million pounds, down 0.8% from 2020.
Yogurt totaled 439.6 million pounds, up 0.3% from a year ago, with YTD at 243.6 million pounds, up 2.7%.
Dry whey totaled 84.3 million pounds, up 9 million pounds or 11.9% from February and 800,000 pounds or 0.9% above a year ago. YTD dry whey was at 243.6 million pounds, down 1.0%.
Dry whey stocks slipped to 64.1 million pounds, down 8.3% from February and 14% below those a year ago.
Nonfat dry milk output climbed to 198.2 million pounds, up 14.6 million pounds or 8.0% from February and 24.5 million or 14.1% above a year ago. Powder production YTD stands at 579.9 million pounds, up 8.9% from 2020.
Stocks fell to 317 million pounds, down 26.7 million pounds or 7.8% from February and were 34.4 million pounds or 9.8% below a year ago.
Skim milk powder production jumped to 38.3 million pounds, up 6.7 million pounds or 21.2% from February but 17.5 million pounds or 31.4% below a year ago. YTD skim milk powder hit 105.9 million pounds, down 22.0% from 2020.
March regular hard ice cream output totaled 69.1 million pounds, up 7.5% from a year ago, with YTD output at 181.7 million pounds, up 4.4% from 2020.
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