MD_DA950 Dairy Markets at a Glance Report 17 - Released on April 30, 2021 CME GROUP CASH MARKETS (4/30) BUTTER: Grade AA closed at $1.7525. The weekly average for Grade AA is $1.7860 (-0.0080). CHEESE: Barrels closed at $1.8350 and 40# blocks at $1.8000. The weekly average for barrels is $1.8110 (+0.0205) and blocks, $1.8010 (+0.0085). NONFAT DRY MILK: Grade A closed at $1.3250. The weekly average for Grade A is $1.3110 (0.0690). DRY WHEY: Extra grade dry whey closed at $0.6600. The weekly average for dry whey is $0.6630 (-0.0050). CHEESE HIGHLIGHTS: Cheesemakers continue to report a bountiful, flush-level milk supply. Spot milk prices in the Midwest ranged from $5 under Class to flat Class this week. Price points at $.50 over Class from last week were not reported. Food service sales maintained strength when compared to most of the past year, however demand has begun to level off as a number of customers have recently refilled pipelines. Retail cheese demand reports are mixed. Eastern retail sales are hearty. Midwestern demand reports vary, but some producers say buyers are hesitant to add to their growing inventories in case of a market shift down. Cheese inventories remain mixed. Barrels are generally noted as tighter, but blocks are more available depending on variety. Despite the atypical barrel-over-block price scheme on the CME, market tones are generally steady at this point. BUTTER HIGHLIGHTS: Cream is reported to be a little tighter than last week. Butter production rates are stable to lower, with churn operations following typical seasonal patterns. Inventories are balanced in Central and Western coolers but growing in the East. Some contacts share that retail and food service orders are trending steady to lower overall, although there is some slight variation in demand between regions. Across the country, bulk prices range from 1.0 to 8.0 cents above the market this week. FLUID MILK: Milk production is varied across the regions, this week, with high output reported in the Southeast, Midwest, and generally throughout the West. Production is steady in the Northeast. Output is in a slow decline in Florida. Regardless, there is plenty of milk available across the country for processing operations. Class I demand is steady to higher nationwide, however some Midwestern contacts have reported a concern with limited bottling demand in the near future. Contacts report that condensed skim discounts are scarce to non-existent. Tanker delays related to driver shortages are a growing problem throughout all regions. Cream multiples are generally similar to last week, despite reports of a slightly tightening availability. DRY PRODUCTS: Across all regions low/medium and high heat nonfat dry milk (NDM) prices increased this week. Global demand is putting a strain on domestic production/supply. Dry buttermilk prices shifted higher at the bottom of the range in the Central and East, while prices in the West also moved up at the bottom of the range and both sides of the mostly price series. Domestic demand for dry buttermilk has lessened in recent weeks, but international demand remains strong. The gap between international and domestic dry whole milk prices is closing as domestic prices continue to increase. National dry whey prices are steady to higher. Demand has slowed as higher prices have made purchasers hesitant. WPC 34% prices are steady to higher. Supplies are short for WPC 34% that is needed for specific purposes, particularly infant formula manufacturing. Lactose prices are steady as production is keeping pace with demand. Contacts are concerned that potential impediments, such as African swine fever or freight/port constraints, could abruptly shift currently healthy market prices. Acid and rennet casein prices held steady on the shortened week. INTERNATIONAL DAIRY MARKET NEWS: WESTERN EUROPEAN OVERVIEW: It is expected that seasonal peak milk production in the primary Western European milk producing countries will occur in a few weeks. Cheese prices in Germany and France are reported as steady. Italian cheese varieties are showing some price strength. UK sources are looking toward increased post Brexit cheese and yogurt production in coming years. EASTERN EUROPEAN OVERVIEW: Poland is a leader in Eastern European milk production. January - March 2021 milk production increased 0.7 percent from January - March 2020 according to ZMB. Butter production January – March 2021 increased 0.4 percent from January – March 2020. Cheese production January – March is up 3.6 percent. OCEANIA DAIRY MARKET OVERVIEW: AUSTRALIA: July 2020 - March 2021 seasonal milk production in Australia, increased 0.7 percent from July 2019 – March 2020, according to Dairy Australia. March 2021 milk production, 628.4 million liters, decreased 1.8 percent from March 2020. NEW ZEALAND: March 2021 New Zealand milksolids reported by NZX are up 8.7 percent from March 2020 milksolids. March 2021 milk production on a tonnage basis is up 9.8 percent from March 2020. Season to date through March 2021 milk solids increased 1.8 percent from last season t hrough March 2021. Seasonal milk tonnage is up 1.6 percent through March 2021. New Zealand commodity exchange sources attribute the March 2021 milk production increase to favorable pasture conditions during February into March. SOUTH AMERICA OVERVIEW: Dry weather lingers in parts of South America. In Argentina, drier conditions are increasing farmers’ soybean harvests. In parts of Mexico, very dry/drought weather conditions are taking a toll on milk output. In addition, these dry conditions are affecting some lakes in Mexico. There are positive forecasts of production increases in corn, barley and wheat. Moreover, there are expected increases in production and planting areas for soybeans and rice. WMP and SMP markets are displaying solid undertones. Buying demands have heightened at this time. Some WMP manufacturers are sold out of supplies. There is some continued pressure on margins for dairy operators with higher feed costs emerging. In Venezuela, farmers are faced with diesel shortages. NATIONAL RETAIL REPORT (DMN): Dairy retail advertisement totals increased 2 percent in the conventional sector, and organic dairy ad totals increased 13 percent this reporting week. Conventional ice cream, in 48-64 oz containers, was the most advertised dairy item this week, with an average price of $3.23, up 18 cents from last week. Organic milk, in half gallon containers, was the most advertised organic item. In half gallon containers, the weighted average price of conventional milk was $2.19, compared to $4.10 for organic milk, an organic premium of $1.91. 2020 MAILBOX PRICES (FMMO): In 2020, mailbox milk prices for selected reporting areas in Federal milk orders averaged $16.96 per cwt., $0.94 lower than 2019. The component tests of producer milk in 2020 averaged: butterfat, 3.92 percent; protein, 3.18 percent; and other solids, 5.77 percent. JANUARY MAILBOX PRICES (FMMO): In January 2021, mailbox milk prices for selected reporting areas in Federal milk orders averaged $16.12 per cwt, down $1.22 from the December 2020 average and down $2.75 per cwt from the January 2020 average. The component tests of producer milk in January 2021 were: butterfat, 4.06%; protein, 3.26%; and other solids, 5.77%. MARCH MILK MARKET UTILIZATION (FMMO): During March, 11.0 billion pounds of milk were received from Federally pooled producers. This volume of milk is 18.4 percent lower than the March 2020 volume. Regulated handlers pooled 3.7 billion pounds of producer milk as Class I products, down 6.8 percent when compared to the previous year. The all-market average Class utilization percentages were: Class I = 34%, Class II = 17%, Class III = 14%, and Class IV = 35%. The weighted average statistical uniform price was $15.89 per cwt, $0.77 higher than last month but $1.13 lower than last year. APRIL RETAIL MILK PRICE (FMMO): U.S. simple average prices are: $3.58 per gallon for conventional whole milk, $3.55 per gallon for conventional reduced fat 2% milk, $4.09 per half gallon organic whole milk, and $4.09 per half gallon organic reduced fat 2% milk. Information for the period April 26 - 30, 2021, issued weekly Published by: Dairy Market News - Madison, WI ROMAN CARAMAN, (608) 422 - 8593 Email: roman.caraman@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