CHICAGO, IL – The $21.60 per hundred Class III milk cash price for July announced late last week was a record high for the month, topping the previous high of $21.39 in July in 2011. This marked the 7th consecutive month of a record high Class III price.
Prices were even higher for other classes of milk use for July. Those included $24.41 per hundred for Class II (soft dairy products) and $23.78 for Class IV (butter and milk powder).
That combination of prices, including quality, component, and volume premiums, pushed the weighted all-milk average price to $23.40 per hundred for July in the United States — up by 20 cents from June and by $4.30 from July of 2013.
Milk/Feed price ratio
The milk to feed price ratio for July also reached a multi-year high of 2.44 for July. This was due in large part to the significant and continuing fall in feed prices.
In the formula, the July price of $3.80 per bushel for corn was down by 69 cents from June and by $2.99 from July of 2013. The soybean price of $12.70 per bushel was $1.70 lower than June and $2.60 below that for July of 2013.
The price of baled alfalfa dry hay stood out as an exception. The July price of $216 per ton was up by $6 from June and by $7 from July of 2013.
Spot market active
Prices increases that began on Thursday of last week continued through Wednesday of this week for Cheddar cheese in the spot market on the Chicago Mercantile Exchange (CME). For that period, the gains were 11.5 cents per pound for Cheddar blocks and 15.5 cents for Cheddar barrels, putting the respective prices at $2.09 and $2.1025 per pound at the end of the market session on Wednesday.
Four carloads of blocks were sold on the CME on Wednesday. The day’s only activity for barrels was an unfilled bid to buy one carload.
In the AA butter spot market, nine carloads were sold on Wednesday, bringing the week’s total to 17. The price held at $2.40 per pound, down 7 cents from a week earlier.
The spot market price for Grade A non-fat dry milk continued to drop. It fell by 2 cents per pound on Wednesday during a market session with two carload sales, an unfilled bid to buy one carload, and an uncovered offer to sell one carload. The day’s closing price of $1.57 per pound was down by 10.5 cents from a week earlier.
Quiet in the futures
In trading on early afternoon on Wednesday, there was only one price change (1 cent per hundred) for any month through the first half of 2016 in the Class III milk futures and no change at all in the dry whey futures.
Following futures price cutbacks on Tuesday of this week, the August price of $21.64 per hundred was 3 cents below the record high Class III cash price for the month (also set in 2011) but the $21.55 futures price for September was $1.48 above the record high for the month which dates to 2007.
The Class III futures slide to the $19s per hundred in the latter months of 2014, into the very low $18s per hundred for a majority of the months during the first half of 2015, and into the high $17s for the second half of 2015.
The absence of a price movement for the dry whey futures on Wednesday left prices standing at a high of 68.75 cents per pound for August, 59.75 cents for December, and 51 cents for September of 2015.
On Tuesday of this week, Cooperatives Working Together announced the receipt of 13 bids from Dairy Farmers of America, the Michigan Milk Producers Association, Northwest Dairy Association (Darigold), and Tillamook Creamery of Oregon for financial assistance on the export of 1.989 million pounds of Cheddar cheese and 55,116 pounds of butter to countries in Asia, North Africa, South America, and the South Pacific. Deliveries are scheduled from August to January of 2015.