Today, USDA released its "Dairy Products" report which covers March 2011. American type cheese production was up 0.3 % when compared with March 2010. USDA's "Commercial Disappearance" data came out recently which showed a 12% increase in sales of American type cheese. That is a huge change. Most of the increase came from exports.
Speaking with a cheese broker today, I learned there are hamburger price "war" currently. he felt that should bump up cheese consumption.
Altogether, the situation should provide a healthy price at the CME. But, do the traders really know what is happening in the real world?
Showing posts with label CME Dairy Prices. Show all posts
Showing posts with label CME Dairy Prices. Show all posts
Monday, May 2, 2011
Wednesday, March 16, 2011
Once Again
Today block cheddar fell $0.105 on the CME. One insider I spoke with today thinks the bottom will be $1.65 per pound.
Dairy farmers cannot make it on $1.65 block price, given current input costs.
If there is too much cheese, the answer is simple. If you take the amount of milk going to Class III in the federal orders and translate that to nation milk production. Then take that amount times ten pound per hundredweight yield, there is 36% more cheese made in the U.S. given the amount of milk going to cheese.
We need enforcement of cheese standards - plain and simple. The "problem"will then go away. that is, providing the "problem" is too much cheese.
Dairy farmers cannot make it on $1.65 block price, given current input costs.
If there is too much cheese, the answer is simple. If you take the amount of milk going to Class III in the federal orders and translate that to nation milk production. Then take that amount times ten pound per hundredweight yield, there is 36% more cheese made in the U.S. given the amount of milk going to cheese.
We need enforcement of cheese standards - plain and simple. The "problem"will then go away. that is, providing the "problem" is too much cheese.
Tuesday, February 15, 2011
Global Dairy Trade Prices Up - Mostly
(click on image to enlarge)
Today, Fonterra held another internet auction, the 38th. Prices were generally up with Whole Milk Powder up significantly, see above. Anhydrous Milk Fat was down but, not much.
On the CME butter, which is still short, is falling in price. The same outfit, Dairygold, which seemed to run butter up to $2.10 per pound is now dropping the price with offers. Rational, maybe, but not transparent.
Friday, January 14, 2011
NFDM
Today, January 14, 2011 the price of Grade A NFDM rose to $1.4325 per pound. There were an amazing 13 trades this week, where usually there are none. The prior weeks average was $1.2940 per pound.
The answer lies in Brazil with La Nina flooding in which more than 500 have died.
http://edition.cnn.com/2011/WORLD/americas/01/14/brazil.flooding/
The Brazilian government wants an immediate 66 million pounds of NFDM for emergency food relief. New Zealand is hit with another La Nina weather event reducing milk output.
The U.S. manufacturers stocks of NFDM in November were 127.9 million pounds.
This is a big deal. All bets are off. Still time for low ball risk management - if so inclined.
The answer lies in Brazil with La Nina flooding in which more than 500 have died.
http://edition.cnn.com/2011/WORLD/americas/01/14/brazil.flooding/
The Brazilian government wants an immediate 66 million pounds of NFDM for emergency food relief. New Zealand is hit with another La Nina weather event reducing milk output.
The U.S. manufacturers stocks of NFDM in November were 127.9 million pounds.
This is a big deal. All bets are off. Still time for low ball risk management - if so inclined.
Thursday, January 13, 2011
Markets
Today, at the CME, block Cheddar wet to $1.51 per pound. Grade A NFDM went up 2 1/4 cents to $1.3950 per pound. Butter remained at $2.10 per pound. Baring any significant change, dairy farm milk price will rise dramatically.
However, nobody hitched in from either coast to run CME prices up. It is the same crowd which has participated in running them down. they do what they do because they can.
In January 2007, I spoke at a meeting and put a slide up which showed where some big players thought milk price might go. At the peak I said this is where most dairy farmers will go to sleep. But, the important time to have a discussion about pricing system change is when the price is high.
However, nobody hitched in from either coast to run CME prices up. It is the same crowd which has participated in running them down. they do what they do because they can.
In January 2007, I spoke at a meeting and put a slide up which showed where some big players thought milk price might go. At the peak I said this is where most dairy farmers will go to sleep. But, the important time to have a discussion about pricing system change is when the price is high.
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