The U.S. Department of Agriculture announced the February Federal Order Class III benchmark milk price Feb. 27 at $13.89 per hundredweight, down 7 cents from January.
However, that is 49 cents above February 2018 and, indicating the current down market, the first month that the Class III price topped the previous year’s price since November 2017.
It equates to $1.19 per gallon, compared to $1.20 in January and $1.15 a year ago.
The Class IV price is $15.86, up 38 cents from January, $2.99 above a year ago and the highest Class IV price since August 2017.
Reports abound throughout the country of dairy farms leaving the business due to financial issues. Farm margins were relatively flat in the first half of February, with values still projected below break-even over the first half of the year, according to the latest Margin Watch from Chicago-based Commodity & Ingredient Hedging LLC.
Cheese traders took the cheddar blocks higher for the fifth week in a row, closing March 1 at $1.61 per pound, up 1.5 cents on the week. That’s the highest level since October 2018, and 5 cents above a year ago. The barrels finished at $1.41, up a half-cent on the week, 6.5 cents below a year ago and 20 cents below the blocks.
Cheese demand reports vary, according to Dairy Market News, although a growing segment of Midwestern cheesemakers report a seasonal shift slower. Cheese inventory is unchanged, but long.
Milk is readily available in the West and vats are at or near capacity. Inventories are still heavy and manufacturers want to keep stocks in check as the spring flush nears.
Butter closed March 1 at $2.2875 per pound, up 2.75 cents on the week, the highest since Feb. 1, 2019, and 8.75 cents above a year ago.
Central butter plant managers continue reporting widely available cream for the churns, as milk production marches on. But demand is picking up ahead of the spring holidays. Inventories are plentiful.
Western churning continues at a full and fast pace, so some processors have stopped buying cream as they do not have enough capacity. Butter supplies are also plentiful and stocks continue to increase.
Grade A nonfat dry milk saw a close at 98.5 cents per pound, down 1.25 cents on the week but 32.25 cents above a year ago.
Dry whey saw some ups and downs, but finished at 36 cents per pound, 1.25 cents higher on the week.
The Northwest Dairy Association makes these price projections for the Class III price and Pacific Northwest blend price:
March $15.15 $15.70
April $14.80 $15.60
May $15.00 $15.70
June $15.40 $16.05
July $15.80 $16.35
Aug. $16.10 $16.60
Sept. $16.30 $16.80
Oct. $16.30 $16.75
Lee Mielke, of Lynden, is editor of the Mielke Market Weekly. Whatcom County has about 80 dairy farms.