Plenty to Absorb This Week

May 2, 2014 — The dairy markets had a fair amount to feed on this week, starting with the announcement of the April Federal order Class III milk price, which was an all time record high of $24.31 per hundredweight, up 98 cents from March and $6.72 above a year ago. That will be the peak for 2014.

California’s 4b cheese milk price was announced yesterday at $21.73 per hundredweight, down 43 cents from March, $4.81 above April 2013, but a stunning $2.58 below the comparable Federal order Class III price and the largest gap since January 2012.

Unfortunately, the hemorrhaging continued this week in the cash cheese market. With the blocks dropping 14 cents on the week to $2.07 per pound. The barrels finished the week down 4-1/2 cents on Friday to $2.0550 per pound.  As we know, a penny movement in cheese amounts to about a dime on the milk price so milk prices will be falling but it sure was a beautiful view at the top.

Cash butter is headed in the other direction, up another 7-1/4 cents to $2.0750.

The April milk feed price ratio moved lower, according to Wednesday’s Ag Prices report, but the bottom line is still a lot better than it’s been for a long long time.

The Agriculture Department issued its 2013 Dairy Products Summary on Tuesday and compared product output to 2012. Details are posted online and will be in this week’s DairyBusiness Update, which you can subscribe to online.

We also detail this week’s Milk Production, Disposition, and Income Summary, which showed that 2013 milk production increased just 0.3 percent from 2012, mainly due to an increase in output per cow. Cow numbers were down 12,000 head from 2012.

Finally, because feed costs have so much influence on the bottom line, with or without high milk prices, Monday’s Crop Progress report is important and showed that, while corn planting took a jump from last week and is up 14% from this time a year ago, it still lags the five-year average by 9%, due primarily to weather in the Midwest.

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