MD_DA950 Dairy Markets at a Glance Report 20 - Released on May 21, 2021 CME GROUP CASH MARKETS (5/21) BUTTER: Grade AA closed at $1.8700. The weekly average for Grade AA is $1.8535 (+0.0165). CHEESE: Barrels closed at $1.6075 and 40# blocks at $1.5700. The weekly average for barrels is $1.6375 (-0.0925) and blocks, $1.6135 (-0.1590). NONFAT DRY MILK: Grade A closed at $1.2975. The weekly average for Grade A is $1.3040 (-0.0085). DRY WHEY: Extra grade dry whey closed at $0.6450. The weekly average for dry whey is $0.6410 (+0.0090). CHEESE HIGHLIGHTS: Cheese producers are running active schedules in all regions. Producers continue to take on flush-level milk supplies, but with fewer spot trades reported in the Midwest, the reported price range tightened to $1.50 under Class to flat Class. For a recent historical perspective, last year's price range was $5.50 under Class to $.50 over. During week 20 of 2019, the price range was $2 under to $2 over Class III. The updated CDC recommendations regarding further easing of COVID-19 restrictions due to lower infection rates and an increase in the vaccinated population have given some cheese contacts bullish near-term viewpoints regarding food service sales. However, demand notes this point are mixed, and in some cases, bearish. Pizza cheese producers report continually steady sales. Inventory levels of cheese vary from region to region, per usual. That said, there are a growing number of contacts reporting some extra spot loads available. Inventory growth is a factor that could quell recently steady/bullish market tones, as barrel and block prices have slipped from the $1.80s as recently as early May into the $1.50s and $1.60s this week. BUTTER HIGHLIGHTS: Cream availability is stable in the Northeast and West. Central butter makers are sourcing cream from the West or South. Production is ongoing as manufacturers prepare for fall demand needs. Inventories are stable and satisfying current contract and spot demands. Retail orders are seasonally flat to lower. Food service is on a strong upswing from historic lows last year. Within that strength, however, there are fluctuations in food service butter demand from week to week and region to region. Across the country, bulk prices range from 1.0 to 8.0 cents above the market this week. FLUID MILK: Milk production is leveling off in the Northeast and Central regions, decreasing in the Southeast, and mixed throughout the West. Class I demand varies, but milk supply is steady for bottling needs. Although summer programs and educational institutions are preparing to supply free meals to kids throughout the summer, some contacts expect Class I sales to decrease as the school year comes to a close. Midwestern cheesemakers report that spot milk is abundant as cheese production ramps up. Cream supply is meeting demand and is particularly plentiful in the West. Butter churning is seasonally active, and Class II cream-based manufacturers are working through healthy volumes. Cream price changes are mixed from region to region. Condensed skim markets are stable, and some operations are working through steady contract sales. Cream multiples this week are 1.32 – 1.37 in the East, 1.26- 1.42 in the Midwest, and 1.05-1.30 in the West. DRY PRODUCTS: Low/medium heat nonfat dry milk (NDM) price changes were mixed, with minor fluctuations on both the Central/East and West range series. High heat NDM prices are mostly steady. International demand is strong, particularly for exports to Mexico. The market tone is fairly steady. Central and East high heat prices are stable; the top of the West range decreased. High heat NDM trading was quiet this week. Dry buttermilk prices are higher in the Central and East and expanding in range in the West. Inventories are reportedly tight, and the dry buttermilk market tone is steady to bullish. The top of the dry whole milk price range increased this week. Availability is tight. Demand is moderate but beginning to overshadow the limited inventory. Dry whey prices are mixed. Production, inventories, and demand vary across regions. Whey protein concentrate 34% prices are unchanged this week. Demand is hearty; some manufacturers report strong interest out of Asia. The lactose range is unchanged, but the mostly series widened. Production is steady, and lactose supplies are balanced to tight. Demand is strong for standardization. Acid casein prices are steady while rennet casein prices increased on both ends of the range. ORGANIC DAIRY MARKET NEWS: Federal Milk Market Order 1, in New England, reports utilization of types of organic milk by pool plants. During April 2021, organic whole milk utilization totaled 13.5 million pounds, down from 13.9 million pounds the previous year. The April 2021 butterfat content was 3.30 percent, up from 3.29 in April 2020. The utilization of organic reduced fat milk in April this year, 15.5 million pounds, is unchanged from roughly 15.5 million pounds a year earlier. The April 2021 butterfat content for organic reduced fat milk, 1.39 percent, declined from 1.40 percent the previous year. In the organic corn market, spot trading activities are moderate on good demand. Organic corn traded 26 cents lower FOB. Buying demands for organic feed soybeans are firm. Organic feed soybeans traded $2.49 higher FOB this reporting period. There is strong demand for organic soybean meal and oil. Trading activities are fair for organic feed grade wheat. Total organic ads for surveyed retail stores increased 123 percent. Milk and yogurt products were the two big advertised organic items this week. NATIONAL RETAIL REPORT (DMN): Conventional dairy ad numbers increased 12 percent this week. Although decreasing in ad numbers by 1 percent, the most advertised conventional dairy item this week is 48 to 64-ounce containers of ice cream. The national weighted average price is $3.24, up $0.19 from last week. Conventional 1-pound butter has an average price of $3.05, up 9 cents from last week. Conventional cheese ad numbers increased 9 percent. The weighted average advertised price for conventional 8-ounce shred cheese is $2.49, down $0.16 from last week. The national weighted average price for conventional Greek yogurt in 4-6-ounce containers, the most advertised conventional yogurt container size, is $0.97, down 2 cents from last week. The national weighted average price for conventional half gallon milk is $2.31, up from $1.38 last week. The national weighted average advertised price for organic half gallons is $4.36, up from $4.16 last week. This results in an organic price premium of $2.05. APRIL MILK PRODUCTION (NASS): Milk production in the 24 major States during April totaled 18.4 billion pounds, up 3.5 percent from April 2020. March revised production, at 18.9 billion pounds, was up 2.2 percent from March 2020. The March revision represented an increase of 30 million pounds or 0.2 percent from last month's preliminary production estimate. Production per cow in the 24 major States averaged 2,051 pounds for April, 42 pounds above April 2020. The number of milk cows on farms in the 24 major States was 8.98 million head, 121,000 head more than April 2020, and 15,000 head more than March 2021. FMMO MEASURES OF GROWTH 1950-2020 (FMMO): Total Receipts of milk pooled under Federal Milk Marketing Orders totaled 137.8 billion pounds marketed by 24,906 dairy producers across all Federal orders in 2020. Total receipts were 11.9 percent lower than 2019. Pooled producer numbers were 15.5 percent lower than 2019. The average daily delivery of producer milk per pooled producer was 4.1 percent higher compared to 2019. In 2020, milk marketed through Federal orders accounted for 63 percent of all milk sold and 62 percent of fluid grade milk sold to U.S. plants and milk dealers. JUNE ADVANCED CLASS PRICES BY ORDER (FMMO): The base Class I price for June 2021 is $18.29 per cwt, an increase of $1.19 per cwt when compared to May 2021. A Class I differential for each order's principle pricing point (county) is added to the base price to determine the Class I Price. For June 2021, the advanced Class IV skim milk pricing factor is $9.42 per cwt, the Class II skim milk price is $10.12 per cwt, and the Class II nonfat solids price is $1.1244 per pound. The two-week product price averages for June 2021 are: butter $1.7961, nonfat dry milk $1.2247, cheese $1.8448, and dry whey $0.6479. Information for the period May 17 - 21, 2021, issued weekly Published by: Dairy Market News - Madison, WI CHELSEA ROCHELLE, 608-422-8594 Email: Chelsea.Rochelle@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