MD_DA950 Dairy Markets at a Glance Report 29 - Released on July 23, 2021 CME GROUP CASH MARKETS (7/23) BUTTER: Grade AA closed at $1.6950. The weekly average for Grade AA is $1.7085 (+0.0125). CHEESE: Barrels closed at $1.4025 and 40# blocks at $1.5850. The weekly average for barrels is $1.3965 (-0.1680) and blocks, $1.5700 (-0.1270). NONFAT DRY MILK: Grade A closed at $1.2525. The weekly average for Grade A is $ 1.2450 (-0.0060). DRY WHEY: Extra grade dry whey closed at $0.5375. The weekly average for dry whey is $0.5365 (+0.0065). CHEESE HIGHLIGHTS: Cheese sales are noted as steady or strong for producers across the nation. Cheese prices on market exchanges have enticed some export purchases, according to Western contacts. Milk is plentiful for production nationwide, although spot milk prices are moving higher in the Midwest. They ranged from $5 to $3 under Class III. Last year's spot milk prices during week 29 were $2 under to Class III, for comparison. Inventories of cheese vary by plant. Some Midwestern cheesemakers say they are currently over-committed on near- term sales. Eastern contacts say inventories are steady to growing. Western contacts suggest similar inventory tones. They report a limit on storage capacity, and load delivery snags and port congestion are not alleviating the situation. Cheese market tones are, in a word, aquiver. BUTTER HIGHLIGHTS: Cream availability is mixed. Contacts report some tightness in the West, but others say cream is widely available in the East and Central regions. Although cream cheese operations are pulling heavy volumes of available cream, butter production is seasonally steady. However, some Northeastern contacts report that a few butter operations are selling cream in lieu of churning. Butter inventories are healthy. Butter is available to meet spot and contract demands. Retail sales are meeting seasonally softer expectations. Food service demands vary. In the East and West, food service orders are steady to stronger. Central food service demand is down from June. This week, bulk butter overages across the country range from flat to 8.0 cents above market. FLUID MILK: Milk production is slightly decreasing throughout the United States. Milk supplies are beginning to fall more in line with end usage immediate needs and storage capacities. Class I sales are mixed. Bottling orders in the Southeast and South Central are starting to increase. With K-12 classes scheduled to restart beginning in late July in some locations, the pipeline for that market segment is starting to refill. There are reports spot prices are in the $5 to $3 under Class III range this week in the Midwest. Discounts are still pervasive, but the $6 under Class prices of recent weeks have disappeared. Condensed skim markets are fairly soft in areas of the U.S. Some manufacturers are heavy with condensed skim volumes. Cream markets are mixed. In general, many market participants note cream remains available during the mid-summer season. Cream multiples for all Classes: 1.23 - 1.37 in the East, 1.22 – 1.36 in the Midwest, and 1.15 – 1.28 in the West. DRY PRODUCTS: Low/medium heat nonfat dry milk (NDM) prices are mixed this week. Buying demands are slowing. Low/medium heat NDM market tones are somewhat unsettled. High heat NDM prices are steady to lower. High heat NDM markets are flat. Dry buttermilk prices are to steady to slightly lower. Market participants’ demands are fairly steady in domestic and international markets. The dry whole milk price range has tightened. Dry whole milk markets are holding steady. Dry whey prices are mixed. Dry whey markets are mixed. Some buyers/traders are not purchasing additional spot loads at this time. The market tone has weakened. Whey protein concentrate 34% prices are mostly unchanged. Market participants note buying demands are a bit stronger for loads that meet certain end user requirements. Lactose prices are steady to higher. Spot market activities are slightly quiet. Pricing for both acid casein and rennet casein are unchanged. Customer interest is beginning to increase. INTERNATIONAL DAIRY MARKET NEWS: WESTERN EUROPEAN OVERVIEW: Markets for dairy products are quiet as much of the continent is on summer holidays. Common for this time of year, sales transaction volumes are lower, and retail demand is subdued. While food service demand for dairy products has increased thanks to restaurants reopening, increased COVID cases in some locations has infused the market with a lingering feeling of uncertainty. Buyers are hesitant to take on more dairy product inventories for fear of new lockdowns or weakened export opportunities. EASTERN EUROPEAN OVERVIEW: With increasing volumes of milk used in cheese making, Belarus and Poland are growing their export capacity for dairy products. Exports of cheese and butter from Belarus are finding their way into many Eastern European countries, especially Russia, while significant amounts of Polish cheese are moving into other EU countries. Both Poland and Belarus have increased the shipments of whey powder to China. OCEANIA OVERVIEW: AUSTRALIA: At only a few weeks into the new Australian milk season, it is hard to tell what the year will hold. But that said, industry participants expect stable domestic dairy demand and relatively supportive global fundamentals in the first half of the year will get the milk season off to a good start. If food service demand can return to pre-pandemic levels, the domestic sales may help further support market prices. In the previous weeks, some dairy cooperatives and processors increased the offering prices made to farmers to assure the supply of milk will be sufficient to meet processing needs. NEW ZEALAND: The milk season in New Zealand is underway as calving has started in parts of northern New Zealand and is making its way southward. For the most part, dairy regions have had favorable weather leading into the new milk season. However, heavy rains in parts of western New Zealand have led to flooding. Significant losses of cattle and damage to pastures have been reported but it is not clear how much impact this will have on the New Zealand milk shed. SOUTH AMERICA OVERVIEW: Milk production continues to slightly increase off farms in the main dairy basins of Argentina and Uruguay. In some areas, temperatures have slightly improved output for dairy cows and grain development. However, in Brazil, continued drought conditions are impacting corn yield numbers. The Parana river is at very low water levels, having an impact on exports. There are reports cheese and UHT milk manufacturing are fairly active with the healthy supply of milk availability. Whole milk powder and skim milk powder markets are displaying softer undertones. NATIONAL RETAIL REPORT (DMN): Total conventional dairy advertisements are down 10 percent, while total organic dairy ads increased 8 percent from week 28. Both conventional and organic butter ads each increased by over 300 percent. The national weighted average advertised price for conventional 1-pound butter is $2.58, down 89 cents from last week. The national weighted average advertised price for organic 1-pound butter is $5.20, up 21 cents from last week. Conventional ice cream in 48 to 64-ounce containers maintained the top spot for the most advertised dairy item. JUNE MILK PRODUCTION (NASS): Milk production in the 24 major States during June totaled 18.1 billion pounds, up 3.2 percent from June 2020. May revised production, at 19.0 billion pounds, was up 4.9 percent from May 2020. The May revision represented an increase of 12 million pounds or 0.1 percent from last month's preliminary production estimate. Production per cow in the 24 major States averaged 2,011 pounds for June, 27 pounds above June 2020. The number of milk cows on farms in the 24 major States was 9.00 million head, 161,000 head more than June 2020, but 1,000 head less than May 2021. Milk production in the United States during the April - June quarter totaled 58.1 billion pounds, up 3.7 percent from the April - June quarter last year. The average number of milk cows in the United States during the quarter was 9.51 million head, 47,000 head more than the January - March quarter, and 141,000 head more than the same period last year. JUNE COLD STORAGE: (NASS): On June 30, U.S. cold storage holdings of butter totaled 414.5 million pounds, up 1 percent from the previous month, and up 14 percent from June 2020. Natural American cheese holdings total 809.4 million pounds, down 2 percent from the previous month, but up 2 percent from June 2020. Total natural cheese stocks were 1,434.9 billion pounds, down 2 percent from last month, but up 1 percent from June 2020. APRIL MAILBOX PRICES (FMMO): In April 2021, mailbox milk prices for selected reporting areas in Federal milk orders averaged $17.23 per cwt, up $0.82 from the March 2021 average and up $3.52 per cwt from the April 2020 average. The component tests of producer milk in April 2021 were: butterfat, 3.94 percent; protein, 3.20 percent; and other solids, 5.78 percent. AUGUST ADVANCED CLASS PRICES BY ORDER (FMMO): The base Class I price for August 2021 is $16.90 per cwt, a decrease of $0.52 per cwt when compared to July 2021. A Class I differential for each order's principle pricing point (county) is added to the base price to determine the Class I Price. For August 2021, the advanced Class IV skim milk pricing factor is $9.67 per cwt, the Class II skim milk price is $10.37 per cwt, and the Class II nonfat solids price is $1.1522 per pound. The two-week product price averages for August 2021 are: butter $1.7446, nonfat dry milk $1.2531, cheese $1.5779, and dry whey $0.6095. JULY RETAIL PRICES (FMMO): U.S. simple average prices are: $3.69 per gallon for conventional whole milk, $3.64 per gallon for conventional reduced fat 2% milk, $4.12 per half gallon organic whole milk, and $4.12 per half gallon organic reduced fat 2% milk. Information for the period July 19 - 23, 2021, issued weekly Published by: Dairy Market News - Madison, WI JESSICA MUELLER, 608-422-8589 Email: jessica.mueller@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