Market News
A mixed day in the dairy markets
Cash cheese and butter nudged a little higher on the Chicago Mercantile Exchange on Thursday while Class III futures for 2015 slipped a bit.
Plenty of milk available in the Central United States with spot loads available for up to $1.00 under Class price. Dairy Market News says lower plant intakes in California have prompted some Midwest milk to move but a shortage of truck drivers is hampering that effort. The California Department of Food and Agriculture says February pool receipts of milk were 4.5 percent below a year ago. Year-to-date receipts are down 4.2 percent.
Milk production is steady in the Northeast, Mid-Atlantic and Southeast thanks to mild weather. Florida exported 104 loads for the week, 24 more than the previous week. Class I demand was down in the Sunshine State as schools are closed for spring break and the state’s seasonal population has left.
Weekly cow slaughter for the week ending March 7th had 60,100 dairy cows going to slaughter compared to 59,600 a year ago.
Fonterra reports net profit for the six months ending January 31st totaled $183 million down 16 percent from the same period a year ago. As a result, the co-op kept its farmgate milk price at 4.70 per kilogram of milk solids but lowered its dividend forecast about a nickel. That puts the total farmer pay price at $4.90 to $5 which is below the cost of production for New Zealand producers. A year ago the total pay price was $8.50.
Fonterra is the largest dairy exporter in the world with a large share of those sales normally going to China. For the six-month period ending January 31st, sales to China totaled $1.2 billion compared to $3.15 billion in the same period a year ago. Fonterra CEO Theo Spierings says he expects China’s product surplus will diminish in the coming months and they will return to the global market.
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