Market News

What’s pushing butter?

A very strong day to finish the week in the dairy markets on the Chicago Mercantile Exchange on Friday.  Cash cheese barrels gained 2 cents, blocks increased 1.5 cents, nonfat dry milk added 1.75 cents and butter jumped 10.5 cents on 10 unfilled bids.  Class III futures increased accordingly.

For the week: cash cheese barrels gained a nickel, blocks are 4.5 cents higher, butter increased 11.5 cents and nonfat dry milk increased three-quarter cent.  Class III futures for June added 35 cents, July increased 77 cents, August is 53 cents higher and November added 20 cents.

For the month, cash cheese barrels are 6 cents higher, blocks increased 7.75 cents, butter added 15.5 cents and nonfat dry milk lost 3 cents.

Some surprising strength in the cash markets this week, Eric Meyer with HighGround Dairy says; “It’s the futures”!  He says there seems to be some panic over the continued drought in California and the impact it is having on milk per cow given the fact 33 percent of the nation’s butter is made in California.

Meyer isn’t real confident that this will “have a lot of legs” given where the global market has been for months.  He suggests producers may want to buy some puts especially in the third quarter.  Meyer comments on the market.

The April all milk price slipped a dime from March to $16.50 per hundredweight.  Prices ranged from $20.10 in Florida to $14.52 in California.  Prices were higher in Idaho, Indiana, Minnesota, Oregon, South Dakota and Wisconsin.  Unchanged in Michigan and Utah.

The April milk-to-feed ratio is 1.95 compared to 2 in March and 2.42 in April of 2014.  This is the first time the ratio has been below 2 since September of 2013.

Dairy cow prices averaged $1,970 in the U.S. in April, down $20 from January but $160 above April of last year.  California was the only major dairy state with an increase in cow prices up $200 from January to $2,000.  Wisconsin dairy cows averaged $2,080 in April down $80 from January but $180 above a year ago. Michigan, Colorado and Florida had the highest cow price at $2,100.  New York had the lowest at $1,820.