Gears reversed ever so slightly in the Sept. 5 Global Dairy Trade (GDT) auction where 73.9 million pounds of product made its way to the block, up from 71.1 million pounds in the last event and 72.2 million in the event before that. The weighted average for all products offered was up 0.3 percent, following a 0.4 percent slippage in Aug. 15 and 1.6 percent on Aug. 1.

 

Buttermilk powder led the declines, down 10.1 percent. Whole milk powder was down 1.6 percent, following a 0.6 percent slippage last time, and skim milk powder was off 1.2 percent, after it inched up 0.3 percent last time.

The gains were led by lactose, up 5.1 percent, after leading the declines last time with a 4.9 percent descent. Butter was up 3.8 percent, following a drop of 1.3 percent. Anhydrous milkfat was close behind, up 3.6 percent, after slipping 1.3 percent last time. Cheddar was up 2.5 percent, following a 1.4 percent rise, and rennet casein was up 1.2 percent, after it gained 2.9 percent last time.

FC Stone equated the GDT 80 percent butterfat butter price to $2.6349 per pound U.S. CME butter closed on Sept. 1 at $2.4575. GDT Cheddar cheese equated to $1.8681 per pound U.S. and compares to Friday’s CME block Cheddar at $1.6425. GDT skim milk powder averaged 88.17 cents per pound, U.S. and whole milk powder averaged $1.4061. CME Grade A nonfat dry milk price closed on Sept. 1 at 82.5 cents per pound.

The European Energy Exchange (EEX) and the GDT have signed a letter of intent to evaluate the possibility of working together to set up and operate a  auction mechanism for dairy products riginating in Europe. EEX and GDT will consult with dairy product buyers and sellers in developing a plan.

July export data lower July U.S. export data was made available this week and while cheese exports posted increases from 2016, the numbers came in lower than expected, according to FC Stone’s Dave Kurzawski, and that despite the significant discount U.S. prices to international markets and the weak dollar.

“We think some of the U.S. weakness is likely due to contractual sales made by Europe, their cheese and skim milk powder exports have been doing better than expected,” Kurzawski wrote in his Sept. 7 Early Morning Update. “We’ve probably rolled off those contracts (or will soon), and with U.S. prices competitive on everything, we should still get a bounce in exports before the end of 2017.

“In our opinion, weakness for U.S. markets seems to have played out recently. In other words, don’t expect more price weakness off of negative chatter around any negative July Export discussions you may be having we just went through it.

“Like cheese, fat exports for came in lower than expectations,” he said. “The 23 percent increase (year on year) is deceiving because of the lack of exports last year. To put it into perspective we only exported around 77 loads of butter in July. During that same time 187 loads of butter traded on the spot market.”

Preliminary USDA data reported July’s 50-State milk production at 18.2 billion pounds, up 1.8 percent from July 2016. USDA’s latest Dairy Products report shows where the milk went.

July cheese output totaled 1.03 billion pounds, down 0.3 percent from June but 1.0 percent above July 2016. Year to date (YTD) output stands at 7.2 billion pounds, up 2.5 percent from a year ago.

California produced 213 million pounds of that cheese, up 2.8 percent from June but 0.3 percent below a year ago. Wisconsin, at 273.9 million pounds, was up 1.0 percent from June and 0.7 percent above a year ago. Idaho output dropped to 76.2 million pounds, down 7.9 percent from June and 8.1 percent below 2016. Minnesota was off 0.7 percent from June but 9.7 percent  above a year ago. New York was down 13.0 percent from June and 5.6 percent below a year ago.

Italian cheese totaled 449.5 million pounds, down 0.1 percent from June but 1.2 percent above a year ago, with YTD output at 3.1 billio pounds, up 1.3 percent. Mozzarella, at 352.1 million pounds, was up 1.1 percent, with YTD at 2.4 billion pounds, up 0.8 percent. Total American type cheese production hit 401.8 million pounds, down 0.4 percent from June but 0.2 percent above a year ago. YTD totaled 2.86 billion pounds, up 3.5 percent.

Cheddar output, the cheese traded at the CME, totaled 286.4 million pounds, down 0.3 percent from June, but up 0.8 percent from a 

year ago, with YTD at 2.1 billion pounds, up 5.2 percent.

Butter churns produced 137.3 million pounds, down 2.0 percent from June but 1.6 percent above a year ago. YTD totaled 1.1 billion pounds, down 1.4 percent. California butter totaled 38.2 million pounds, down 6.0 percent from June and 12.2 percent below a year ago. New York output was down 2.3 percent from June and 0.5 percent below a year ago.