Cash cheese held steady for the second day-in-a-row on the Chicago Mercantile Exchange on Friday but unlike Thursday, there was a little activity: a couple of unfilled bids. Butter and nonfat dry milk held steady as well but we did see some increases in Class III futures.
For the week, cash cheese barrels fell 14.25 cents, blocks lost 13 cents, butter is down a nickel and Grade A nonfat dry milk is a quarter-cent higher. Despite the decline in the cash cheese market, February Class III increased 27 cents, March gained 32 cents for the week, April is 43 cents higher, May up 42 cents while August is unchanged from a week ago.
The monthly Livestock, Dairy and Poultry Outlook from USDA notes that sharply higher year-over-year springer prices and flat heifer calf prices suggest some short-term expansion of the nation’s dairy herd. Expected low feed prices and strong milk prices will push the milk-to-feed ratio to the highest it has been in several years. The preliminary January ratio was 2.44 compared to 1.57 a year ago. As a result, the latest World Agricultural Supply and Demand Estimate increased 2014 milk production to 205.7 billion pounds, up 2 percent from the previous estimate.
Global demand for dairy products is expected to remain strong although we should see some increased competition in the export market from Europe later in the year.
Dairy Market News reports dairy exports totaled 697.9 million pounds in 2013 up 22 percent from 2012.