Bearish Global Dairy Market Sentiment19 April 2012
US - Global Dairy Trade (GDT) results for both cheese and anhydrous milkfat (AMF) continue to confirm a bearish market sentiment, writes Mary Ledman, Sara Dorland, Sarina Sharp and Karen Endres.
GDT prices for
cheese at $1.33/lb. and butter equivalent
AMF at $1.20/lb. are below current CME
Cheddar block and butter prices at $1.50/
lb. and $1.4125/lb., respectively. This
price difference makes U.S. exports
comparably more costly for global providing export assistance for 43.4
million lbs. of cheese, nearly 65% higher
than the same period in 2011.
Since January 2012, when butter export assistance was reopened, CWT has provided awards for 38.5 million lbs. of butter. However, the growing gap between U.S. and world prices may require greater bonus awards to move equivalent volumes. This could further hamper export efforts needed to manage, what is anticipated to be, stronger U.S. milk production through the spring.
The USDA released the latest National Dairy Product Sales Report (NDPRS) prices this week. With the exception of NDM, product sales prices reported as of Apr. 14 are lower than the prior week. The May Class I mover is $15.85, up 19¢ vs. the prior month.
The CME Cheddar block price closed a penny higher at $1.500/lb. on a single bid today. The Cheddar barrel price settled unchanged at $1.4600/lb. after 3 trades. The CME spot butter price closed 1.25¢ lower at $1.4125/lb. after a single trade. Both CME Grade A and Extra Grade NDM closed unchanged at $1.1775/lb. and $1.1575/lb., respectively.
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