MD_DA950 Dairy Markets at a Glance Report 24 - Released on June 18, 2021 CME GROUP CASH MARKETS (6/18) BUTTER: Grade AA closed at $1.7850. The weekly average for Grade AA is $1.8045 (+0.0215). CHEESE: Barrels closed at $1.5425 and 40# blocks at $1.4925. The weekly average for barrels is $1.6140 (+0.0060) and blocks, $1.5005 (+0.0200). NONFAT DRY MILK: Grade A closed at $1.2650. The weekly average for Grade A is $1.2735 (-0.0235). DRY WHEY: Extra grade dry whey closed at $0.6100. The weekly average for dry whey is $0.6035 (-0.0100). CHEESE HIGHLIGHTS: Cheesemakers are busy throughout the country. Milk availability is at heightened levels, despite 90+ temperatures throughout the Midwest and triple digits in parts of the South and Southwest. Spot milk prices ranged from $6 to $4 under Class III. Cheese inventory levels vary by plant, from steady to growing. Midwestern curd/barrel producers relay customer interests are healthy, keeping those inventories balanced. Western contacts relay Asian interest is picking up as domestic market prices have receded to around $1.50. Regarding market tones, the "inverted" price structure continues to create undertones of instability as barrel prices are hovering near a dime above block prices. BUTTER HIGHLIGHTS: Cream is plentiful, and butter makers are working through steady supplies. Production schedules are mixed. Some plants are very active, while others are running on limited production lines or pausing churns around scheduled maintenance. Overall, however, contacts report that production is going smoothly. Inventories are available for current needs and building to meet future demands. Retail orders are soft but meeting seasonal expectations. Food service demand is level to stronger, and sales have exceeded the predictions of some plant managers. Butter market tones are steady. This week, bulk butter prices range from 1.0 to 8.0 cents above market across the country. FLUID MILK: Milk production is level to declining in the East, strong in the Central region, and steady to decreasing in the West. Abundant supply is exceeding immediate demand, sparking spot milk load offers priced below class in the Central and West regions. The. The high temperatures baking parts of the country feel like a light at the end of the tunnel to some stressed handlers. While yield has already begun to notably taper in some areas, including Florida and Arizona, cooler nighttime temperatures in the Midwest are keeping production declines slow and steady. Class I demand is mixed but generally trending flat to lower. Balancing operations are running at, or close to, capacity. Class III demand is strong, and some cheesemakers are receiving additional scheduled milk loads. Cream supplies are available for dairy manufacturing needs. Butter churning is seasonally active. Ice cream production is mixed. Cream cheese plants are increasingly active this week. Some contacts report a softening tone for condensed skim markets, although contract sales are steady. Cream multiples this week are 1.28-1.39 in the East, 1.23-1.35 in the Midwest, and 1.05- 1.27 in the West. DRY PRODUCTS: Low/medium heat nonfat dry milk (NDM) price ranges narrowed, and the Central/East mostly series held steady while the top of the West mostly series increased. Domestic demand is steady to sluggish, while international demand is reportedly strengthening. High heat NDM prices are unchanged in the West, but the bottom of the Central/East range dropped a few pennies. High heat NDM trading was limited this week as production is sparse and supplies are said to be tight. Dry buttermilk prices are unchanged in the Central and East, but the price range and mostly narrowed in the West. Production is limited, and regional dry buttermilk inventories are tight. Ice cream makers are clearing much of the available condensed buttermilk supply. The dry whole milk price range expanded this week, and trading was relatively busy. Availability is tight, but demand is picking up. Dry whey prices are higher. Production and inventory levels vary across regions. Whey protein concentrate 34% prices are unchanged this week. Production is steady, and demand is somewhat variable. The lactose price range is unchanged. Steady production is meeting supply demands, and contacts say that many Q3 business arrangements are set. Shipping delays have created some backups, and a few manufacturers have offered spot loads to relieve warehouse congestion. Acid casein prices are steady while rennet casein prices increased on both ends of the range. ORGANIC DAIRY MARKET NEWS: There are reports abundant organic milk supplies are negatively impacting global organic milk prices. Organic milk payments for 2021-2022 are forecasted near $8.10 - $9.10/kgMS. Federal Milk Market Order 1, in New England, reports utilization of types of organic milk by pool plants. During May 2021, organic whole milk utilization totaled 14.0 million pounds, up from 13.7 million pounds the previous year. The utilization of organic reduced fat milk in May this year, 15.7 million pounds, increased from 14.5 million pounds a year earlier. Trading activities are somewhat moderate in the organic feed corn market. Buying demands are strong in the organic feed soybean market. Trading activities are limited in organic soybean meal and soybean oil, however, markets are reportedly stable. Market trends and trading activities are inactive on all other organic grains currently. Total organic ads for surveyed retail stores increased 7 percent. Overall organic milk ads increased 12 percent in week 24. Currently in the Midwest, South Central and Southwest regions, organic advertisements are up 61 percent, 97 percent, and 145 percent, respectively. NATIONAL RETAIL REPORT (DMN): The most advertised dairy item this week is conventional 48 to 64-ounce ice cream. Conventional half gallons of milk saw the biggest increase in ads, jumping 372 percent. Total conventional dairy advertisements are down 16 percent this week, while total organic dairy ads increased 7 percent. The most advertised cheese item is conventional 8-ounce shred cheese, with a weighted average advertised price of $2.45. Greek yogurt in 4 to 6-ounce containers, the most advertised conventional yogurt item, has a weighted average advertised price of $0.96, down $0.02 from last week. The national weighted average price for conventional half gallon milk is $1.99, unchanged from last week. For organic half gallons, the national weighted average advertised price is $3.78, which results in an organic price premium of $1.79. APRIL ESTIMATED SALES (FMMO): 3.7 billion pounds of packaged fluid milk products were shipped by milk handlers in April 2021. This was 3.8 percent lower than a year earlier. Estimated sales of total conventional fluid milk products decreased 3.7 percent from April 2020 and estimated sales of total organic fluid milk products decreased 4.8 percent from a year earlier. PRODUCER PRICE INDEX (BLS): The May PPI for all food is 223.6, up 3.4 percent from 2020. The dairy products index is 210.3, up 10.8 percent from a year ago. The following are the May year to year percentage changes for selected products: fresh whole milk is +12.1; cheese, +11.4; and butter, +35.2. Information for the period June 14 - 18, 2021, issued weekly Published by: Dairy Market News - Madison, WI CHELSEA ROCHELLE, 608-422-8594 Email: Chelsea.Rochelle@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