Barrel Prices Highest Since November 2016
Class III milk features closed this past week’s trade on a weaker tone. August traded a penny higher to $16.51, while September dropped 3 cents. Fourth-quarter prices declined anywhere from 8 to 20 cents and left the August through December average price at $16.85 per cwt.
First quarter 2018 was down 3 to 7 cents and June was also a penny lower. Class IV milk futures also softened on Friday as the fourth quarter of 2017 declined 5 to 15 cents.
CME spot dairy products saw nice strength in blocks and barrels but weakness in butter and nonfat dry milk. Blocks finished 2 cents higher to close at $1.75 ½. Barrels moved 6 ½ cents higher to $1.75 per pound and closed the block-barrel spread to just ½ cent. With today’s barrel price closing at $1.75 this represents the highest close since November 18, 2016. For the week, blocks averaged a closing price of $1.74, while barrels averaged $1.68.
Butter moved a penny lower to $2.64. Grade A nonfat dry milk dropped ½ cent to 83 ¼ cents.
The July milk production report was released by USDA on Friday, with a 1.8% uptick in production. In total 18.2 billion pounds were produced by 9.4 million cows. The number of cows on farms is 74,000 higher than July 2016 but 1,000 lower than last month.