Little BSE Fallout - NDPSR Prices Lower

US - USDA’s announcement yesterday regarding the fourth incident of bovine spongiform encephalopathy (BSE) in the United States has had minimal impact on live cattle and dairy futures today, according to Wednesday's Daily Dairy Report.

26 April 2012

1 minute read

North America

After the first BSE discovery in 2003, it took years for U.S. beef to regain access to Japan and South Korea --two of our largest export markets. South Korea has tightened quarantine controls but sill welcomes U.S. exports. The latest discovery appears to be more reminiscent of the atypical BSE discoveries in beef cows from Texas and Alabama in 2005 and 2006, respectively. The market cringed briefly and moved on. There was no major trade impact, and cattle prices quickly rebounded. JUN live cattle futures closed 70¢ higher today after yesterday’s limit down, $3.00/cwt. move.

NDPSR dairy product prices for the week ending Apr. 21 were all lower than the prior week as expected by Daily Dairy Report analysts. Granted the marginal decrease in the dry whey price was less than anticipated and dry whey futures traded higher after the release. The NDM price posted the largest drop vs. the prior week at 2.63¢, followed by the barrel price with a 2.16¢ decrease.

The California Weighted Average Price (CWAP) for NDM for the week ending Apr. 20, is $1.2576/lb. This is 4.58¢/lb. less than last week’s price. Sales totaled 22.1 million pounds, up 7.9 million pounds vs. the prior week. The CWAP was 1.72¢ higher than the NDPSR price for NDM at $1.2404/lb. This means that NDM sales booked during the past 30 days are lower which is causing the NDPSR price to drop below the CWAP.

CME spot Cheddar block and barrel cheese prices diverged today. Seven loads of blocks traded at $1.5225/lb. and $1.5250/lb. The market closed 0.25¢ higher at $1.5250/lb. with an unfilled bid left on the board. The barrel market closed 0.75¢ lower at $1.4475/lb. after a single sale. The CME spot butter market closed a penny lower at $1.39/lb. on an offer. CME spot Grade A and Extra Grade NDM markets closed unchanged at $1.1675/lb. and $1.1275/lb after no trading activity.