The barrels finished at $1.4350, down 3 1/2-cents on the week and 1 3/4-cents above a year ago. Three cars of block traded hands on the week and a whopping 40 of barrel.
The blocks were unchanged Monday and Tuesday, while the barrels lost three-quarters Monday and held Tuesday at $1.4275.
Dairy Market News reports that milk is readily available for cheese producers in the Midwest and spot milk prices were running $1.50 to $5 under class.
Cheese production in the West is also strong as milk continues to be readily available. Inventories are increasing while domestic demand is “a little lackluster” and “exports have been a little slow to develop.”
CME butter closed Friday at $2.0975 per pound, down a penny on the week and 2 1/4-cents below a year ago.
It dropped 2 cents Monday, under 16 loads trading hands, and dipped to $2.0775, the lowest spot price since Dec. 9, 2016. While some see it flirting with the $2 level, it regained a penny and a quarter Tuesday, inching to $2.09.
Open-outcry for butter ended Friday at the CME and joined nonfat dry milk in electronic trading Monday.
Some Central region butter producers report production is lighter than in previous weeks while others continue at the same level.
Demand for Western butter is still good as the spring holidays approach but buyers are trying not to take on more butter than immediate needs.
Grade A CME nonfat dry milk, after holding all week at 80 cents per pound, inched up a penny Friday to close at 81 cents, 12 cents above a year ago.
The powder was unchanged Monday but gained a penny and a half Tuesday, hitting 82 1/2-cents per pound.
Benchmark drops $1.07
The March Federal order Class III benchmark milk price dropped to $15.81 per hundredweight (cwt.), down $1.07 from February but $2.07 above March 2016. It is the lowest Class III price since October 2016 and equates to $1.36 per gallon, down from $1.45 in February and compares to $1.18 a year ago. The First Quarter Class III price average stands at $16.49, up from $13.75 at this time a year ago and $15.73 in 2015.
Monday’s Class III futures settlements portended an April price of $15.10; May, $15.02; and June, $15.18, with a peak of $16.42 in September.
The March Class IV price is $14.32, down $1.27 from February, $1.58 above a year ago, and the lowest since November 2016. The First Quarter Class IV average stands at $15.37, up from $13.18 a year ago and $13.62 in 2015.
California Class I drops
California’s May Class I milk price is $16.65 per cwt. for the north and $16.92 for the south. They are down 11 and 12 cents, respectively, from April. Both are $1.81 above May 2016, but are the lowest Class I prices since November 2016.
The five month average for the north stands at $17.79, up from $15.67 at this time a year ago and compares to $17.45 in 2015. The southern average, at $18.06, is up from $15.94 a year ago and $17.72 in 2015.
Milk output lower
The Agriculture Department lowered its 2017 milk production forecast in its latest World Agricultural Supply and Demand Estimates report as “reductions in milk per cow offset increases in milk cow numbers.”
2017 production and marketings were projected at 217.3 billion and 216.3 billion pounds, respectively, down 200 million pounds from last month. If realized, 2017 production would be up 4.9 billion pounds, or 2.3 percent, from 2016.
Dairy product price forecasts for cheese, butter, nonfat dry milk and whey were lowered as both domestic and international supplies are large. As a result Class III and Class IV price forecasts were reduced.
The Class III milk price is projected to range from $16.10 to $16.60 per cwt., down from the $16.60-$17.20 expected a month ago, and compares to $14.87 in 2016 and $15.80 in 2015.
The Class IV price forecast is expected to average $14.30-$14.90, down from $14.85-$15.55 predicted last month, and compares to $13.77 in 2016 and $14.35 in 2015.
Dairy Products report
USDA’s latest Dairy Products report shows February cheese output totaled 941.7 million pounds, down 0.2 percent from January but 2.1 percent above February 2016, according to HighGround Dairy’s adjustment for last year’s extra Leap Day.
U.S. churns produced 164.3 million pounds of butter, up 2.3 percent from January but 2.4 percent below a year ago.
Nonfat dry milk production totaled 140 million pounds, up 1.1 percent from January and 3.4 percent above a year ago. Skim milk powder production totaled 40 million pounds, down 19.8 percent from January but 3.1 percent above a year ago.
February nonfat dry milk stocks stood at 259.7 million pounds, up 14.5 percent from January and 19.9 percent above a year ago. Whole milk powder stocks, at 21.7 million pounds, were up 20.1 percent from January and 88.6 percent above those a year ago.