MD_DA950

     Dairy Markets at a Glance

     Report 4 - Released on January 25, 2019

     CME GROUP CASH MARKETS (1/25)
     BUTTER: Grade AA closed at $2.2450. The weekly average for Grade AA is $2.2300 (-.0215).
     CHEESE: Barrels closed at $1.1800 and 40# blocks at $1.3900. The weekly average for barrels
     is $1.1694 (-.0356) and blocks, $1.3825 (-.0265).
     NONFAT DRY MILK: Grade A closed at $1.0125. The weekly average for Grade A is $1.0063
     (-.0287).
     DRY WHEY: Extra grade dry whey closed at $0.4050. The weekly average for dry whey is
     $0.4263 (-.0867).
          BUTTER HIGHLIGHTS: Butter manufacturing remains active across the country as cream
     supplies are becoming more accessible for churners as well as for Class II processors.
     Winter weather in the Midwest and Northeast has many bottlers busy standardizing milk,
     adding more volumes of cream to the already butterfat congested markets. Nationwide,
     production is mainly focused on bulk with a bit of print being made to meet current
     requests. 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 markets are flummoxed. The onset of 2019 has been tumultuous
     for barrel markets. Barrel prices last truckled to current midweek price points, at or
     around $1.16, on July 23, 2009. Cheese demand is steady to lower nationwide. Northeastern
     customer bases experiencing and/or expecting severe winter weather are downsizing orders
     from Midwestern cheesemakers, particularly pizza cheese producers. Western mozzarella
     producers continue to report healthier orders. Production activity is mixed, as well. Active
     production on the coastal regions tapers in the middle of the country, where some cheese
     plant managers suggest they are at their lightest workweek in years. Other producers in the
     Midwest suggest they are back to normal production schedules. Spot milk remains available,
     but prices are firming. Reported spot milk prices ranged from $.50 under to $1 over Class
     III.
          FLUID MILK: Winter weather, including snow and extremely cold temperatures, has
     impacted most of the Midwest and Northeast, as well as parts of the Western region. At
     midweek, no transportation issues were reported but late week below-zero temperatures are
     expected to linger throughout the weekend. Some Midwestern contacts are expecting a decline
     in milk production as a result, while most of the country is seeing level to stronger milk
     yields. Bottling orders picked up early in the week, so orders could be filled ahead of the
     inclement weather. Cheesemakers are starting to report more overages on spot milk prices
     than not. Spot milk prices were reported at $.50 under to $1 over Class III. Cream
     availability is unchanged in most regions and is readily available for most uses. Midwestern
     butter makers expect more to be available next week. F.O.B. cream multiples are 1.05-1.25
     in the East, 1.10-1.23 in the Midwest, and 1.00-1.16 in the West.
          DRY PRODUCTS: Low/medium heat nonfat dry milk (NDM) prices are mixed to higher
     nationally. In the Central/East regions, prices have firmed a bit. In the West, the price
     range narrowed. NDM markets stumbled, but spot trades are still taking place at or just
     above the $1 mark. The high heat NDM price is unchanged in the Central/East, while slightly
     lower in the West. Dry buttermilk prices are still firming in the Central/East, while steady
     in the West. Dry buttermilk demand remains healthy and drying is limited. The dry whole milk
     price range is mixed, but contacts report a stable tone generally. Dry whey prices are
     steady to lower nationally. Midwestern reports are showing diverging markets, as some end
     users are taking on whey below the current market averages, while others are taking on brand
     specific loads at above $.50. Some contacts believe the markets are cooling somewhat. A
     number of end users report being stocked and are waiting out inventory use/lower prices
     before taking more dry whey in. Whey protein concentrate (WPC) 34% prices moved up on the
     top of the range, while remaining steady elsewhere. WPC 34% is continuing its divergence, as
     well. Specific brands continue to find agreeable buyers, but producers of interchangeable
     WPC 34% are facing some resistance. Lactose prices are moving lower at the top of the range.
     Chinese buyers have taken on some loads ahead of Chinese New Year, and sellers/producers are
     looking ahead of Q1 at this point. Rennet and acid casein prices are steady, but buyers are
     anticipating potential price drops ahead.
          ORGANIC DAIRY MARKET NEWS: Retail Organic Milk Prices for Selected U.S. Cities. The
     January 2019 in-store surveys of selected supermarkets in twenty-nine U.S. cities reveal

     that the price of organic whole milk, in half gallon containers, ranges from $3.14 in
     Houston, TX to $5.54 in St. Louis, MO. The U.S. simple average price for January is $4.09.
     The organic half gallon whole milk price dipped $0.34 in Indianapolis, IN, but rose $0.60
     in Oklahoma City, OK., compared to December 2018. Complete results can be accessed at:
     https://www.ams.usda.gov/mnreports/dybdairyorganic.pdf
          As January is coming to a close, the overall organic retail advertisements dipped 22
     percent. For organic milk, half gallon packages published the biggest volume of promotions,
     although these packages posted 22 percent lower advertisements this week compared to the
     previous survey period. The present retail milk price spread between organic and
     conventional half gallon milk is an organic premium of $2.98. The current price spread
     shifted up 96 cents related to the prior retail survey. Organic cream cheese, 8 oz packages
     and organic yogurt, 32 oz packages displayed 88 and 80 lower percentages, respectively,
     compared to the previous survey period.
          NATIONAL RETAIL REPORT (DMN): The total number of conventional dairy advertisements
     increased by 8 percent, but organic dairy ads decreased by 22 percent. Total conventional
     yogurt ads declined by 34 percent week over week, and organic yogurt advertisements also
     decreased by 43 percent. The weighted average price for organic half gallon of milk was
     $3.98, compared to $1.00 for conventional half gallons, creating an organic premium of
     $2.98. The weighted average advertised price for conventional 8-ounce block cheese is
     $2.28, while conventional 8-ounce shred
     cheese is priced at $2.23.
          DECEMBER MARKET AND UTILIZATION SUMMARY (USDA): During December 13.8 billion pounds of
     milk were received from Federally pooled producers. This volume of milk is 22.5 percent
     higher than the December 2017 volume. Regulated handlers pooled 3.9 billion pounds of
     producer milk as Class I products, up 10.9 percent when compared to the previous year
     primarily due to the additional Class I milk pooled by the new California Federal Milk
     Marketing area. Class I utilization decreased from last year in 8 of the 11 Federal Milk
     Order Marketing areas. The all-market average Class utilization percentages were: Class I =
     28 percent, Class II = 8 percent, Class III = 52 percent, and Class IV = 12 percent. The
     weighted average statistical uniform price was $15.31 per cwt, down $0.51 from last month
     and down $0.97 from December 2017.
          OCTOBER MAILBOX PRICES (USDA, FMMO, CDFA): In October 2018, mailbox milk prices for
     selected reporting areas in Federal milk orders averaged $17.03 per cwt, up $0.78 from the
     September 2018 average but down $0.53 per cwt from the October 2017 average. The component
     tests of producer milk in October 2018 were: butterfat, 3.96 percent; protein, 3.22
     percent; and other solids, 5.76 percent. When compared to the previous month, the October
     mailbox prices increased in all 19 of the Federal milk order reporting areas. The
     Appalachian States reporting area reported the largest increase of $1.47 per cwt from the
     previous month while the Minnesota reporting area reported an increase of only $0.13 per
     cwt from the previous month. Averaged over all Federal milk order reporting areas, the
     October 2018 mailbox milk price increased an average of $0.82 per cwt. Mailbox prices in
     October 2018 ranged from $19.03 in the Florida reporting area to $14.79 in the New Mexico
     reporting area.
          NOVEMBER MILK SALES (USDA, FMMO, AND CDFS): During November 2018, 4.1 billion pounds
     of packaged fluid milk products are estimated to have been sold in the United States. This
     was 0.1 percent lower than November 2017. Estimated sales of total conventional fluid milk
     products were virtually unchanged from November 2017 and estimated sales of total organic
     fluid milk products decreased 1.8 percent from a year earlier.
          RETAIL PRICES FOR CONVENTIONAL AND ORGANIC MILK, JANUARY 2019 (FMMO): A survey of
     retail prices conducted by the Federal Milk Market Order administrators found conventional
     whole milk prices for January 2019 average $3.25 per gallon. January organic whole milk
     prices average $4.09 per half gallon. In January, conventional reduced fat (2%) milk
     gallons average $3.20 and organic reduced fat (2%) milk half gallons average $4.09.

     Information for the period January 21 - 25, 2019, issued weekly

     Published by:
     Dairy Market News - Madison, WI
     FLORENCE KONE-GONZALEZ, (608)422-8594
     Email: Florence.KoneGonzalez@ams.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 (MyMarketNews): https://mymarketnews.ams.usda.gov/
     DMN Database Portal: https://www.marketnews.usda.gov/mnp/da-home