September 5, 2017 at 3:32 p.m.

Cheese price climb continues

By Lee Mielke- | Comments: 0 | Leave a comment

The Agriculture Department's preliminary January Cold Storage report pegs January 31, 2014 butter stocks at 138.1 million pounds, up 25.6 million pounds or 23 percent from December 2013, but 69 million pounds or 33 percent below a year ago. American-type cheese totaled 630.7 million pounds, up 12.4 million or 2 percent from December but 12.5 million pounds or 2 percent below a year ago. Total cheese in storage on January 31 amounted to 1.016 billion pounds, up 6.5 million pounds or 1 percent from December, but 16.3 million or 2 percent below that on January 31, 2013.
USDA's latest Dairy Situation at a Glance Dairy Data shows commercial disappearance of milk in all dairy products in 2013 exceeded dairy farm milk marketings by 4.84 billion pounds and that is the highest level in nine years. Commercial disappearance of milk in all dairy products for 2013, estimated at 205.1 billion pounds, is up 3.1 percent from 2012, while 2013 farm milk marketings totaled 200.3 billion, up 0.4 percent from 2012.
American type cheese commercial disappearance, at 4.45 billion pounds, was up 2.2 percent from 2013. December disappearance, at 373.5 million pounds, was up 1.3 percent. Other-than-American cheese totaled 7.0 billion pounds in 2013, up 3.2 percent from 2012. December disappearance totaled 615.7 million pounds, up 4.5 percent from a year ago. Butter disappearance in 2013 totaled 1.93 billion pounds, up 6.3 percent from 2012. For December, butter disappearance totaled 171.5 million pounds, up 12.4 percent from a year ago.
Commercial disappearance of milk used in all dairy products in December totaled 17.08 billion pounds, up 3.4 percent from December 2012, and about 375 million pounds more than total farm milk marketings for the month. Farm milk marketings for December totaled 16.71 billion pounds, according to USDA.
Meanwhile on the price front; cash cheese ticked higher on bids the final week of February with the blocks closing at $2.2225 per pound, up 6 cents on the week and 64 3/4-cents above that week a year ago when they bottomed out for the year at $1.5750. The Cheddar barrels closed Friday at $2.20, up 4 1/4-cents on the week and 64 cents above a year ago. No cheese was sold in the spot market all week. The lagging NDPSR-surveyed block price fell to $2.2552, down 6.7 cents, and the barrels averaged $2.2506, down 7.4 cents.
Cheese buyers have been cautious about purchasing above immediate needs, according to Dairy Market News (DMN), and that built up demand moved available spot supplies fairly quickly. Cheese production is increasing with more milk available in many parts of the country. Cheese plants are concentrating on satisfying contract orders and are reluctant to build inventories. Export demand is good with plants continuing to satisfy the relatively new found customer base.
Cash butter saw lots of activity this week, with 36 carloads exchanging hands. It closed Friday at $1.88 per pound, up 9 1/2-cents on the week and 30 1/2-cents above a year ago. NDPSR butter averaged $1.8369, down 2.2 cents.
DMN reports that many butter manufacturers' production levels were higher due to increasing seasonal milk supplies and improving cream supply in the West; at the same time cream supplies are heavy in the Central and Northeast regions. The market tone is steady with many butter makers who have the capabilities of making 82 percent focusing on steady export sales, while others are filling improving domestic retail orders. Butter stocks are steady to higher, says DMN.
Cash Grade A nonfat dry milk finished at $2.04, down a half-cent on the week. Twelve loads exchanged hands on the week. NDPSR powder averaged $2.0825, up 0.6 cent, and dry whey averaged 63.45 cents per pound, also up 0.6 cent.
Milk production is increasing as weather improves across some parts of the country. USDA's weekly update says milk production in New Mexico is firm with optimal temperatures for day and nighttime cow comfort. Florida saw steady milk production as unusually cold weather changed to warmer seasonal temperatures. While milk production improves at the farm level, haulers in the Central region were experiencing transporting delays, caused by icy roads.
Increases in milk production are proving challenging as California processors are having concerns about surpassing state processing capacity. Some processors are looking for takers for surplus milk. Milk demand continues to outpace supplies in Utah and Idaho. Dairies are slow to build herds, due to higher prices for replacement heifers, according to DMN.
Bottling demand is mixed across the regions. Bottle sales in the Southeast have flattened following strong Class I demand resulting from the recent snow storm. Cream supplies are reported readily available in parts of the country, with varying Class usage. Cream demand is expected to surge in the Southwest with upcoming interest from amusement and sports parks.
Cooperatives Working Together (CWT) accepted 23 requests for export assistance this week to sell 4.791 million pounds of Cheddar, Gouda and Monterey Jack cheese, and 1.032 million pounds of 82 percent butter to customers in Asia, the Middle East, North Africa and South Pacific. The product will be delivered through June and brings CWT's year-to-date cheese exports to 25.329 million pounds, plus 7.276 million pounds of butter, and 698,865 pounds of whole milk powder to 19 countries on four continents. These sales are the equivalent of 397.8 million pounds of milk on a milkfat basis.
In other export news; the U.S. Dairy Export Council (USDEC) and the National Milk Producers Federation (NMPF), in a joint press release this morning, called on U.S. negotiators to insure that the ongoing, and so far, inconclusive negotiations of the Trans-Pacific Partnership (TPP), must result in the free trade of dairy products between the United States, Canada and Japan. Speaking on behalf of America's dairy farmers, processors and exporters, the two groups said progress on market access into those two markets has been frustratingly slow, and U.S. negotiators shouldn't allow the process to drag on indefinitely.
The statement follows ministerial-level meetings in Singapore this week on several contentious, yet-to-be resolved issues, including resistance by Canada and Japan to allow further market access for sensitive sectors, including dairy imports. The TPP involves a significant number of markets bordering the Pacific Ocean, including the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
NMPF President and CEO Jim Mulhern said, "The U.S. dairy industry is prepared to eliminate all tariffs affecting dairy trade with Canada and Japan, as long as they do the same. If Japan and Canada are not willing to make an effort and offer realistic market access to the U.S., then they are not serious about being part of TPP."
"It is time to finish the Trans-Pacific Partnership negotiations, including resolving the treatment of agricultural trade," said Tom Suber, president of USDEC. "The principle of creating comprehensive market access is too important to this and future trade agreements. Therefore, if Japan and Canada are not committed to this goal, we need to move forward without them."
Got Milk? Not anymore, according to the February 24 Advertising Age, which reports that the Milk Processor Education Program is sidelining the iconic ad slogan in favor of a new tagline, "Milk Life," which puts emphasis on milk's nutritional benefits, including its protein content.
The change is part of a national campaign that seeks to return the sluggish dairy milk category to growth. The national milk industry had been using the "Got Milk?" tagline since 1995 when the phrase was licensed from the California Milk Processor board. The state group began using the tagline in 1993 after it was created by Goodby, Silverstein & Partners. California processors, which are still with Goodby, are keeping the tagline, which is one of the most recognizable and parodied phrases in advertising.
The national group is moving in another direction as it looks to boost milk sales, which are suffering as other beverages gain ground and cereal sales stall. Euromonitor International estimates drinking-milk retail sales volume declined by about 1 percent last year. MilkPEP plans to spend more than $50 million on the campaign, which will include TV, print, digital, retail promotions and PR.
As much as we hate to see milk sales declining like they are, the bright side is that they haven't plunged like orange juice. A network news story this week indicated that OJ sales in 2012-13 were down almost 40 percent from 2000-01.
And, in an update to our story from last week, the Yakima Herald reports that one of the families facing a legal challenge involving the Safe Drinking Water Act has settled the federal environmental lawsuit to protect innocent relatives.
Rick and Marlene Haak, the former owners of one of five dairies sued in U.S. District Court for alleged pollution, only settled last week to prevent family members from being included the suit, said Marlene Haak.
"From our perspective, it was a very pressured settlement," said Marlene Haak, 57. The Yakima Herald-Republic sought comment from the Haaks the day after the Feb. 6 settlement but the couple did not receive a message.
The Haaks' extended family, which has been dairy farming in the Lower Valley since the 1970s, owns the Sunnyside property where the dairy used to stand through a limited liability corporation set up when they bought it in 1996, Marlene Haak said.
Their opponents accuse them of hiding behind corporations to avoid environmental liability, the Herald reported. The complete story is posted at
Jay Gordon, Executive Director of the Washington State Dairy Federation, warns that this case will set precedent across the country.
As we have reported in the past, California is considering forming a Federal Milk Market Order but doing so is problematic to the state's quota system and higher minimum standards. Those are just two of the issues to be addressed at Western United Dairymen's (WUD) annual meeting March 5-7 in San Luis Obispo. The theme this year is "Taking Action, Embracing Change."
CEO Michael Marsh reported in Friday's DairyLine that the producer community in California has become very frustrated when comparing local milk prices to milk going into cheese in other parts of the country and that will be addressed on Thursday and include presentations by USDA Agricultural Marketing Service Dairy Programs Deputy Administrator, Dana Coale, as well as two attorneys, one specializing in Federal orders, Chip English, a partner at Davis, Wright, Tremaine LLP, and the architect of the California regulatory system, John Vlahos, Partner, Hanson Bridgett LLP, and WUD's long-time legal advocate.
California's quota system is a problematic issue, according to Marsh, "Because quota is very important to California dairy producers and securing it is also going to be one of the challenges with a federal order."
Marsh said he believes that cooperatives are drafting language for a proposed federal order for California that envision USDA administering the federal market order and a transfer of quota monies would come from USDA, back to the California Department of Food and Agriculture to redistribute to producers. That provision, however, will take legislation within the California legislature to implement.
When asked about California's higher minimum standards with respect to its fluid milk, Marsh said, "I think we'll be okay." He admitted that he had a scare in July, 2012 when Rep. Steve King of Iowa had offered an amendment in the House Ag Committee's markup that would have eliminated California's fluid standards but it was not included in the final farm bill so we will be able to maintain our higher fluid standards. Details are posted at[[In-content Ad]]


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