Monday Morning Huddle
17 April 2023
Cheese and Whey Prices Continue Descent:
Last week’s spot session ended in the red, with blocks and barrels slumping to their 2023 lows and whey falling to its lowest value since February 1, 2023. The last time Cheddar blocks closed below Friday’s value of $1.775/lb. was September 6, 2022. For barrels, it has been almost 17 months since markets traded under $1.5125/lb. Buyers eagerly acquired product on the weaker prices, as 70 loads changed hands last week, the most since the week ending June 30, 2018.
Whey volume of 47 was also notable, as it has been over three years since that many loads traded in a single week. There is an almost 10-cent discount between CME and the most recent NDPSR values, and CME whey is 7.75 cents cheaper than the Dairy Market News Central mostly price. End-users and traders may have been eager to buy physical whey cheaper than can be obtained through survey price-based contracts.
Nonfat dry milk’s weekly average declined as well, holding its 2023 low during last Monday’s trading, rallied through the middle part of the week before giving up three cents in Friday’s session, nearing its 2023 low again. Butter markets have traded in a tight band of $2.30-$2.41/lb. since early March, and last week’s session was more of the same with a slight increase to the weekly average.
Livestock Slaughter Keeps Increasing:
Dairy producers continue to manage their margins via heavy culling, as 66,800 head of dairy cows were slaughtered the week ending April 1. Year-to-date, 871,500 have been sent to processing plants, up 3.09% against 2022 and the second highest value since 1986. Dairy farmers are being paid well for their cull cows, with nearby live cattle futures setting records last week. Beef supplies in the US are tight, and after spring flush, when production drops, farmers may be even more motivated to send lower-producing cows to processing plants to manage expenses against lower milk prices and higher feed costs.
Late Season Snow in the Upper Midwest:
The Midwestern winter that will not end continues to give, as states in the region received spring snow over the weekend and into today. While most of the snow is expected to melt in a few days, it continues to delay planting as farmers wait for fields to dry out. Some in the storm’s path were under blizzard warnings, creating transportation headaches, even if just for a day.
American Dairy Products Institute Annual Conference in Chicago Next Week:
The entire HighGround Dairy team looks forward to visiting with both US and global market participants heading to Chicago next Sunday-Wednesday (Apr 23-26) for ADPI’s annual conference. Let us know if you will be in town and we will try our best to fit in some time!
Last Week’s Reports & Analysis
HighGround’s US Dairy Commodity Price Forecast
It has been a whirlwind month in the cheese markets. Blocks set nearby highs ($2.10/lb) in late March, and since then have given up over 30 cents and settled at 2023 lows on April…Full Report
Pre-GDT Forecast Volume Analysis
Prior to Global Dairy Trade (GDT) Event 329, Fonterra revised their forecast for the current season, shifting their sights 20 cents/kgMS lower, printing a forecast range of $8.00-$8.60/kgMS. Fonterra noted that this was due to the price declines for milk price informing commodities on the GDT platform…Full Report
February 2023 US Dairy Supply and Utilization
Total cheese utilization held above prior year levels driven primarily by an increase in domestic consumption. The nominal decline in total cheese exports was a result…Full Report
Reports This Week
- HighGround Dairy Monthly Outlook Webinar – Monday, April 17
- Global Dairy Trade Auction – Tuesday, April 18
- Feb 23′ EU Milk Production Report – Tuesday, April 18
- Weekly EU Dairy Commodity Prices – Wednesday, April 19
- March 23′ US Milk Production Report – Wednesday, April 19
- Weekly National Dairy Products Sales Report (NDPSR) – Wednesday, April 19
- May ’23 US Advanced Prices (Class I Mover) – Wednesday, April 19
- US Livestock Slaughter Annual Summary – Wednesday, April 19
- Feb 23′ EU Trade Data Report – Thursday, April 20
- USDA Dairy Market News Weekly Midpoint Prices – Thursday, April 20
- USDA Weekly Dairy Cow Slaughter – Thursday, April 20
- Mar ’23 US Monthly Livestock Slaughter – Thursday April 20
- Mar ’23 US Cattle on Feed – Friday, April 21