Market News

USDA sees bigger milk production, lower prices

The USDA is projecting 2016 milk production at 211.9 billion pounds, up 100 million on the month. 2015 was raised to 208.5 billion pounds, compared to the 2014 total of 206 billion. On the fat basis, commercial exports for this year are pegged at 8.3 billion pounds, down 300 million from January. On the skim solid basis, commercial exports are seen at 37.0 billion pounds, 700,000 lower than last month.

The annual price for cheese is now projected at $1.55 to $1.62 per pound and butter is pegged at $1.99 to $2.09. Nonfat dry milk is estimated at $.775 to $.835 cents and dry whey is expected to be between $.23 and $.26. The Class III milk price is seen at $14.05 to $14.75 per hundredweight, with Class IV at $13 to $13.80. All milk for 2016 is estimated at $15.30 to $16 per hundredweight, compared to the January range of $15.35 to $16.15, the 2015 estimate of $17.08 and the 2014 final of $23.97.

In Class III trade at the Chicago Mercantile Exchange, milk futures were mixed, staying in a pretty narrow range ahead of and after the USDA supply and demand numbers. February was up $.03 at $13.81 and March was $.09 higher at $13.96, while April was up $.08 at $14.01 and May was steady at $14.12. The remaining 2016 contracts posted modest losses.

In the spot market, cash cheese was unchanged. Barrels stayed at $1.465. Blocks were steady at $1.47, with one bid unfilled at that price.

Butter was down $.02 at $2.135. The last offer uncovered was for two loads at that price.

Grade A nonfat dry milk was $.02 lower at $.73, with one load sold and the last offer uncovered at that price.