Cash cheese prices started the 4th of July week mixed. The blocks lost a half-cent while the barrels gained a half, but both remain below the government support price. That doesn’t bode well for Class III milk prices but the University of Wisconsin’s, Dr. Brian Gould, said in Tuesday’s DairyLine broadcast that there is at least one positive trend in dairy commodities, specifically dairy protein.
Dry whey prices, as reported weekly by the National Agricultural statistics Service (NASS), have seen a steady rebound since the middle of February, he said, climbing from a February 7 low of 15 cents per pound, to a June 20 high for the year of 27 cents, an 80 percent increase. He added that the 27 cent price level compares very favorably to the international price which is about 28 cents per pound, FOB Europe.
Furthermore, dry whey exports, in contrast to other dairy commodities, saw their second best quarter ever in pounds removed in first quarter 2009, so “It’s been a very very positive part of the dairy side.”
Concurrent with that and, one of the reasons for those higher prices, is that manufacturer stocks of dry whey are significantly below a year ago, according to Gould. Looking at April, for example, dry whey stocks amounted to 48.8 million pounds, he said, down 15 percent from April 2008 and, since December 2008, we had a steady decline in end of month stocks, to the tune of 25 percent since December.
“I know cheese prices aren’t the best,” he concluded, “But the whey is starting to recover and the futures market looks very positive for whey and that helps the Class III price.”