MD_DA950 Dairy Markets at a Glance Report 28 - Released on July 16, 2021 CME GROUP CASH MARKETS (7/16) BUTTER: Grade AA closed at $1.6775. The weekly average for Grade AA is $1.6960 (-0.0115). CHEESE: Barrels closed at $1.4400 and 40# blocks at $1.6150. The weekly average for barrels is $1.5645 (+0.0095) and blocks, $1.6970 (+0.0051). NONFAT DRY MILK: Grade A closed at $1.2525. The weekly average for Grade A is $1.2510 (+0.0141). DRY WHEY: Extra grade dry whey closed at $0.5375. The weekly average for dry whey is $0.5300 (+0.0244). CHEESE HIGHLIGHTS: Cheese contacts are reporting labor shortages and hauling issues nationwide, but Western region producers have the added obstacle of port congestion to contend with. They say this is pushing more cheese supplies into domestic warehouses. Eastern contacts say recently produced cheese is somewhat tight. There remains to be plenty of milk in all regions for busy production schedules, but Western contacts did point out lighter overall availability for the first time this season. CME market prices came into the week with some bullish momentum, but by Thursday the bears put an end to the upward pressure. BUTTER HIGHLIGHTS: Cream is available but tighter than in recent weeks. Production is seasonally active, although some manufacturers are running reduced schedules in areas where cream supplies are more limited. Other plant managers are selling off cream in lieu of churning. Butter inventories are available for spot and contract needs. Retail orders are seasonally lower. Food service sales are flat to higher, and some plant managers are busy churning and microfixing for fall food service demand. Across the country, bulk butter overages range from flat to 8.0 cents above market. FLUID MILK: Milk output across the nation is steady to lower. Production appears to be following seasonal patterns, getting pressed lower by the summertime heat and humidity. Despite the decreases in milk production, manufacturers relay having an abundant supply of milk to work with. Cheesemakers reported $6 and $5 under Class III spot milk prices, and discounted loads are common in the mountain states. Class I milk sales were slow for much of the country, but there were some slight increases in the near West. Milk handlers expect school districts may begin to fill the pipelines for school milk bottling within the next few weeks. Condensed skim milk trading is steady with substantial supplies available. Cream markets were steady to slower as ice cream production has begun its seasonal slowdown. Industry contacts suggest cream supplies are tightening in the West. Limited hauler availability is hindering spot cream from moving too far from its origin. Cream multiples for all Classes were 1.28 - 1.35 in the East, 1.23 – 1.32 in the Midwest, and 1.15 – 1.35 in the West. DRY PRODUCTS: Prices for low/medium heat nonfat dry milk are mixed with the ranges widening on both price series. Condensed skim is readily available, and NDM production is active. High heat NDM prices moved lower. Buttermilk powder prices are lower in the Central and East but steady to higher in the West. Contacts report notable interest for export to Mexico. Dry whole milk prices moved higher. Despite globally bearish market tones, limited production capacity and end user specificity have dry whole milk prices holding firm, domestically. Dry whey prices slid lower as more offers become available. Dry whey production is mixed, as producers continue to focus on higher whey protein concentrates. Prices for WPC 34% are steady to lower and heavily dependent on brand. While there are adequate supplies for some brands, brands that meet stringent end user specifications, such as infant formula and sports nutrition, are highly committed. While lactose prices are mostly steady, the bottom of the price range moved downwards. Industry contacts report spot market sale prices are trending lower. Prices are steady to higher for rennet casein and notably higher for acid casein. ORGANIC DAIRY MARKET NEWS: National Organic Grain and Feed Markets. Organic feed corn markets are stable. Buying demands are good. Organic feed corn traded 52 cents higher FOB. Organic feed soybeans traded 1.36 lower FOB. Total organic ads for surveyed retail stores dipped 15 percent. Organic milk advertisements, gallon containers, increased 98 percent compared to the last reporting period. The price spread between the weighted average advertised price for organic half gallon milk, $3.82, compared to $2.47 for conventional half gallons, led to an organic premium of $1.35. The organic premium dropped $1.89 from the previous reporting period. NATIONAL RETAIL REPORT (DMN): Conventional ice cream in 48 to 64-ounce containers holds the title for most advertised dairy item this week, by a wide margin. The national weighted advertised average price is $2.83, up $0.04 from last week. The national weighted average advertised price for conventional 1-pound butter is $3.47, down $0.11 from last week. The national weighted average advertised price for organic 1-pound butter is $4.99, down $0.51 from last week. Total conventional dairy advertisements are up 10 percent, while total organic dairy ads decreased 15 percent from week 27. JULY SUPPLY AND DEMAND ESTIMATES (USDA, WAOB): Milk production forecast for 2021 is lowered from last month as slower-expected growth in milk per cow more than offsets higher forecast cow numbers. However, the 2022 milk production forecast is raised from last month on higher cow numbers. Imports on both fat and skim-solids bases are raised for 2021 and 2022 on stronger expected imports of cheese and butterfat containing products. Exports on a skim-solids basis are also raised for 2021 and 2022, reflecting stronger exports of whey, skim/nonfat dry milk powder, and lactose. Fat basis exports are unchanged from last month. For 2021, cheese, butter, nonfat dry milk (NDM), and whey price forecasts are lowered from last month on relatively high stocks and weaker-than-previously-expected demand. As a result, Class III and Class IV prices are lowered. The 2021 all milk price forecast is lowered to $18.30 per cwt. MAY 2021 MILK SALES (FMMO): A total of 3.6 billion pounds of packaged fluid milk products were shipped by milk handlers in May 2021. This was 4.3 percent lower than a year earlier. Estimated sales of total conventional fluid milk products decreased 3.9 percent from May 2020, and estimated sales of total organic fluid milk products decreased 10.6 percent from a year earlier. JUNE CONSUMER PRICE INDEX (BLS): The June CPI for all food is 276.2, up 2.4 percent from 2020. The dairy products index is 230.2, up 0.8 percent from a year ago. The following are the June, year to year percentage changes for selected products: fresh whole milk is +7.5; cheese, -0.9; and butter, +1.3. JUNE PRODUCER PRICE INDEX (BLS): The June PPI for all food is 228.6, up 11.8 percent from 2020. The dairy products index is 210.8, up 5.0 percent from a year ago. The following are the June, year to year percentage changes for selected products: fresh whole milk is +20.2; cheese, -4.6; and butter, -4.2. Information for the period July 12 - 16, 2021, issued weekly Published by: Dairy Market News - Madison, WI MIKE BANDLI, (608)422-8592 Email: mike.bandli@usda.gov Additional Dairy Market News Information: Dairy Market News (DMN) by Phone: (608)422-8602 DMN Website: https://www.ams.usda.gov/market-news/dairy DMN MARS (My Market News): https://mymarketnews.ams.usda.gov