MD_DA950 Dairy Markets at a Glance Report 26 - Released on July 1, 2022 WEEK OF JUNE 27 - JULY 1, 2022 | VOLUME 89, REPORT 26 CME GROUP CASH MARKETS (7/1) BUTTER: Grade AA closed at $3.0100. The weekly average for Grade AA is $2.9755 (+0.0342). CHEESE: Barrels closed at $2.2050 and 40# blocks at $2.1725. The weekly average for barrels is $2.1795 (+0.0151) and blocks, $2.1590 (+0.0615). NONFAT DRY MILK: Grade A closed at $1.8025. The weekly average for Grade A is $1.7910 (-0.0103). DRY WHEY: Extra grade dry whey closed at $0.5000. The weekly average for dry whey is $0.4905 (+0.0030). CHEESE HIGHLIGHTS: Milk is available for cheese production across all regions, with stakeholders in the Midwest relaying prices as low as $6 under Class III for spot loads this week. Contacts in the Northeast say that milk production is declining, but availability is balanced by decreased bottling demand. Spot cheese inventories are available in the Northeast and West and contacts in these regions say that domestic demand is declining. In the Midwest, demand for mozzarella and provolone has been steady while seasonally strong curd demand is present. Contacts in the Northeast report that cheese produced in the US is being priced competitively compared to loads produced in other countries, contributing to strengthening export demand. In the West, stakeholders say that strong export demand is present and that they continue to hear from purchasers in Asian markets looking for loads to ship in Q1 of 2023. BUTTER HIGHLIGHTS: The 4th of July holiday weekend is impacting cream availability and demand across all regions as some production facilities have planned down time. Contacts in the West say they expect demand to remain strong following the holiday. Increased cream availability in the Central region enabled churning to pick up in the first half of this week. Meanwhile, butter production is steady in the West and declining in the Northeast. Butter inventories vary in the Northeast; stakeholders say holdings are slowly growing but are down when compared to 2021. Meanwhile in the West, contacts report that spot inventories of butter are tight. Sales of butter in both food service and retail markets have been noted to be softer in the Northeast and West, though bulk butter demand is increasing in the latter. Central region butter demand is quieter, seasonally, but meeting industry expectations. Across all regions, bulk butter overages range from 4 to 16 cents above market. FLUID MILK: Across much of the United States, milk production is trending lower along seasonal declines. Summer heat is impacting cow comfort. An exception, this week, is the Pacific Northwest, where pleasant weather has helped give production a lift, even if still below last year's volumes. Demand from manufacturers is steady to lower as some plant managers are planning to take an extra day or two off for the long holiday weekend. Milk spot loads are available, and Midwestern cheesemakers report prices at $6 to $1 under Class III. Condensed skim demand is weaker ahead of the holiday weekend. Cream supplies are down due to seasonal declines in milk components, but that also matches a decrease in demand ahead of the summer holiday weekend. Some contacts expect demand to pick up following the holiday as butter makers are keen to build inventories of butter. Cream multiples for all Classes are 1.32 - 1.43 in the East, 1.26 - 1.38 in the Midwest, and 1.05 - 1.33 in the West. DRY PRODUCTS: Low/medium heat nonfat dry milk prices are lower across the country. Lukewarm demand is present as buyers are expecting, and patiently waiting for, possible price declines. High heat nonfat dry milk prices are unchanged in the Central and Eastern U.S., but lower in the West. Dry buttermilk prices moved lower at the top of the Central and eastern price range, but otherwise are unchanged. National dry whole milk market tones remain quietly steady, and prices are unchanged this week. Prices for dry whey are largely lower as availability is trending higher and demand is trending lower. Animal feed whey prices are also steady to lower, mirroring the edible grade whey tones. Whey protein concentrate 34% prices are mostly stable, but moved up slightly at the top of the range. Prices for lactose are steady to higher. Some manufacturers think that shipping logistics may be slowly improving. Acid and rennet casein prices are unchanged. ORGANIC DAIRY MARKET NEWS OVERVIEW: Federal Milk Market Order 1, in New England, reports utilization of types of organic milk by pool plants. During May 2022, organic whole milk utilization totaled 14.4 million pounds, down from 18.7 million pounds the prior year. Meanwhile, butterfat content, 3.26 percent, fell .03 percent from last year. Utilization of organic reduced fat milk, 16.1 million pounds, declined from 18.3 million pounds a year ago, but the butterfat content, 1.35 percent, increased .05 percent over last year. The June 2022 in-store retail surveys of selected supermarkets in twenty-nine U.S. cities show the retail prices of organic whole milk in the half gallon container. The prices range from $3.64 in Seattle, WA to $6.49 in Pittsburg, PA. The simple average price for June 2022 is $4.63, up 13 cents from the previous month. Total organic dairy retail advertisements increased 108 percent over the previous survey period. As a whole, retail stores increased organic milk ads 103 percent and organic yogurt ads 18 percent. Organic milk was able to capture 64 percent of the total organic dairy ads by commodity, while organic sour cream trailed with 16 percent of total ads by commodity, almost 12 times more retail ads than the previous survey period. NATIONAL RETAIL REPORT: For the long summer holiday weekend, retailers got in the festive mood, increasing total conventional dairy advertisements by 23 percent and organic ads by 108 percent. The most advertised item was conventional ice cream in 48-to-64-ounce containers, which appears in 15 percent more ads this week. The national weighted average advertised price for conventional ice cream in 48-to-64-ounce containers is $3.22, down 8 cents from last week. Advertisements for conventional 1 pound butter increased 48 percent with a weighted average advertised price of $3.81. MAY 2022 AGRICULTURAL PRICES HIGHLIGHTS (NASS): The All Milk price received by farmers was $27.30 in May, up $8.20 from May 2021. The alfalfa hay price was $244.00 in May, up $50.00 from May 2021. The corn price was $7.26 in May, up $1.35 from May 2021. The soybean price was $16.10 in May, up $1.30 from May 2021. The milk-feed price ratio was 1.98 in May, up 0.29 from May 2021. The index of prices received by farmers for dairy products during the month of May 2022 was up 1 to 135.8. Compared to May 2021, the index was up 40.8 (42.9) percent. The index of prices paid by farmers for commodities and services, interest, taxes, and wage rates in May 2022 was up 0.8 points to 134.9. Compared with May 2021, the index was up 17.1 points (14.5 percent). MAY 2022 MARKET SUMMARY AND UTILIZATION REPORT (FMMO): During May, 12.6 billion pounds of milk were received from Federally pooled producers. This volume of milk is 18.6 percent higher than the May 2021 volume. Regulated handlers pooled 3.4 billion pounds of producer milk as Class I products, up 0.1 percent when compared to the previous year. The all-market average Class utilization percentages were: Class I = 27%, Class II = 12%, Class III = 36%, and Class IV = 26%. The weighted average statistical uniform price was $25.90 per cwt, $0.56 higher than last month and $8.25 higher than last year. MARCH 2022 MAILBOX MILK PRICES (FMMO): In March 2022, mailbox milk prices for selected reporting areas in Federal milk orders averaged $24.89 per cwt, up $1.01 from the February 2022 average and up $8.48 per cwt from the March 2021 average. The component tests of producer milk in March 2022 were: butterfat, 4.10%; protein, 3.28%; and other solids, 5.78%. JUNE 2022 CLASS PRICES BY ORDER (FMMO): The following are the June 2022 class prices under the Federal milk order pricing system and changes from the previous month: Class II: $26.65 ($+0.78), Class III: $24.33 ($-0.88), and Class IV: $25.83 ($+0.84). Under the Federal milk order pricing system, the butterfat price for June 2022 is $3.3323 per pound. Thus, the Class II butterfat price is $3.3393 per pound. The protein and other solids prices for June 2022 are $3.4173 and $0.4295 per pound, respectively. These component prices set the Class III skim milk price at $13.13 per cwt. The June 2022 Class IV skim milk price is $14.68, which is derived from the nonfat solids price of $1.6313 per pound. The product price averages for June 2022 are: butter $2.9232, nonfat dry milk $1.8156, cheese $2.3498, and dry whey $0.6161. JUNE 2022 RETAIL FLUID MILK PRICES (FMMO): U.S. simple average prices are: $4.41 per gallon for conventional whole milk, $4.36 per gallon for conventional reduced fat 2% milk, $4.63 per half gallon organic whole milk, and $4.63 per half gallon organic reduced fat 2% milk. NOTICE: USDA INTRODUCES NEW COMMODITIES AND FEATURES AVAILABLE ON ITS MARKET NEWS APP https://www.ams.usda.gov/press-release/usda-introduces-new-commodities-and-features- available-its-market-news-app Information for the period June 27 - July 1, 2022, issued weekly Published by: Dairy Market News - Madison, WI ISRAEL WEBER, 608-422-8601 Email: israel.weber@usda.gov Additional Dairy Market News Information: Dairy Market News (DMN) by Phone: (608)422-8602 DMN Website: https://www.ams.usda.gov/market-news/dairy DMN MARS (My Market News): https://mymarketnews.ams.usda.gov