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