Dairy Prices Still Volatile; CME to Change Standards for Butter
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Volume 36 January 22, 2016 Number 1 Scan this code for breaking Dairy prices still volatile; CME news and the latest markets! to change standards for butter By Alyssa Mitchell and Associates Inc., Madison, dropped to $0.71. are not isolated anymore, and Wisconsin. “At the same time, “Central low/medium heat global events hurt us as well.” INSIDE MADISON, Wis. — Following we are not convinced that the nonfat dry milk prices are Plourd says it is “not getting yet another unexpected surge fear that drove prices higher lower on an unsettled market,” any easier” to be excited about ✦ Raw milk bill introduced in in the butter price at the Chica- is just going to evaporate. It USDA’s Dairy Market News U.S. export prospects, noting Wisconsin; Illinois to adopt go Mercantile Exchange (CME) would not surprise us to see says. “Recent price announce- European milk production is new raw milk regulations. last week, prices for butter and the market remain edgy — and ments from offshore auctions still the biggest factor, with For details, see page 5. other dairy commodities have quite possibly elevated — into undermined any inkling of this substantial milk output growth pulled back this week, and the Easter holiday.” market entering steady to fi rm in Ireland and the Netherlands ✦ Guest column: ‘2016 trends analysts anticipate continued CME butter has pulled back territory, according to market at the end of 2015. and dairy solutions.’ volatility in the weeks ahead. a bit this week from last week’s participants.” Sara Dorland, managing For details, see page 6. Butter jumped 21.5 cents levels, settling at $2.17 today. McCully notes milk and partner with Ceres Dairy Risk last week to settle at $2.25 per While the price is still at a pre- whey products are closer to Management LLC, Seattle, ✦ HighGround Dairy offers pound Jan. 15. While butter has mium to global butter prices, global prices as they have to says that while U.S. demand value-added perspective had continued price support domestic demand prospects are compete to maintain markets. has been remarkable over the to global dairy hedgers. and has been elevated at $2 or still solid, Plourd notes. “Furthermore, the strong last year, macroeconomic news For details, see page 13. above for some time, the latest Mike McCully, owner of The U.S. dollar is another challenge and uncertainty about markets run up was a bit unexpected. McCully Group LLC, Chicago, being faced by U.S. exporters, surfacing could take a toll on ✦ Cecylia Szewczyk combines “Things may have gotten agrees that both U.S. cheese and that will likely continue for U.S. consumer confi dence. art, science, passion a little carried away to the and butter prices continue to some time as the U.S. economy, “The U.S. economy still looks to hone her craft. upside last week,” says Phil be driven largely by domestic while not great, is in better pretty good, but it could be For details, see page 21. Plourd, president of Blimling market fundamentals. shape relative to other parts tough to keep from being pulled CME Cheddar continues to of the world,” he says. into the global woes right now,” move around the $1.50 price James Dunn, professor of she says. “Until consumers feel level. Cheddar barrels this agricultural economics at Penn better about things, they may RANCE week have pulled back from the State University, says with the start to slow spending — some- F $1.50s, settling at $1.43 today. strength of the U.S. dollar, the thing that could spell trouble for PASSP RT Blocks crept up to $1.50 earlier U.S. dairy market, particularly dairy demand in 2016.” A R R I VA L TO CHEESE this week but settled at $1.46 for powders, cannot be too far Meanwhile, CME this week per pound today. from the world price if it wants announced new grading stan- McCully notes, however, buyers. dards for butter traded at the that milk powders and whey “Certainly, we saw that last exchange, set to take effect France promotes tradition of products, which are heavily de- year,” he says. “NDM is a bit Feb. 1. Next month butter sell- pendent on export markets, are different anyway because of ers no longer will be required cheesemaking excellence feeling the pressure from low Mexico, which is more aligned to provide a USDA grading European and Oceania prices. with our market because of certifi cate, unless a buyer re- Editor’s note: Passport to Cheese is Cheese Market News’ feature CME NDM was at $0.755 per its location, and NDM is a big quests one. In lieu of a USDA series exploring the dairy industries of nations around the world. pound Dec. 31 but since has product for them. Our markets Turn to PRICES, page 19 a Each month this series takes an in-depth look at various nations/ regions’ dairy industries with coverage of their milk and cheese production statistics and key issues affecting them. The nations’ in- terplay with the United States also is explored. This month we are pleased to introduce our latest nation — France. Child nutrition bill given USDEC forecasts long-term dairy By Rena Archwamety approval by ag committee growth in report MADISON, Wis. — It can be diffi cult to have a conversation about WASHINGTON — U.S. Sens. Pat Roberts, R-Kan., chair of the Senate Agriculture Committee, and Debbie Stabenow, ARLINGTON, Va. — De- cheese without bringing up France, or visa versa, as cheese is such a spite a sustained downturn central part of French cuisine, and French cheese a centerpiece of D-Mich., ranking member, this week announced that the com- mittee has approved bipartisan legislation to reauthorize child in global dairy markets, a fi ne cheese shops around the world. new U.S. Dairy Export Coun- “When you say ‘France,’ you think cheese, cuisine. They are known nutrition programs for five years. The legislation, “Improving Child Nutrition Integrity and Access Act of 2016,” reforms and cil (USDEC) analysis fore- for taking time for living life and enjoying living. When they make casts that the fundamentals something, they really get into the process,” says Colette Hatch, a reauthorizes child nutrition programs under the Richard B. Russell National School Lunch Act and the Child Nutrition driving long-range global cheese, food and wine consultant based in Santa Rosa, California. dairy trade demand remain Hatch, a French native with a background in restaurant and hotel Act of 1966. Authorization for federal child nutrition programs for- positive through 2020. management, says when she moved to Sonoma County 20 years ago, The report, “2020 Global Americans — and even prominent chefs — were not very familiar mally expired at the end of September 2015, but the exist- ing programs continue to operate pending approval of the Demand Forecast for U.S. with French cheeses. Dairy Exports,” says demand “When I started 20 years ago, Camembert was not known at all. reauthorization bill. “Folks said we couldn’t come to an agreement on child will grow, but with less a Turn to FRANCE, page 10 Turn to CHILD, page 15 a Turn to USDEC, page 20 a © 2016 CHEESE MARKET NEWS® — This is Cheese Market News’ E-subscription and may not be forwarded to anyone other than the intended paid subscriber without the express permission of Cheese Market News (For more information, contact [email protected]) 2 CHEESE MARKET NEWS® — January 22, 2016 MARKET INDICATORS Chicago Mercantile Exchange for the week ending January 21, 2016 Cash prices for the week ended January 22, 2016 CHEESE FUTURES* (Listings for each day by month, settling price and open interest) Monday Tuesday Wednesday Thursday Friday Jan. 18 Jan. 19 Jan. 20 Jan. 21 Jan. 22 Fri., Jan. 15 Mon., Jan. 18 Tues., Jan. 19 Wed., Jan. 20 Thurs., Jan. 21 JAN16 1.520 3,538 1.518 3,533 1.518 3,532 1.518 3,522 Cheese Barrels FEB16 1.556 3,878 1.521 3,894 1.511 3,839 1.516 3,825 Price $1.4975 $1.4950 $1.4900 $1.4300 MAR16 1.560 3,737 1.521 3,757 1.508 3,768 1.510 3,756 Change Markets -2 3/4 -1/4 -1/2 -6 APR16 1.565 2,948 1.531 3,005 1.530 3,077 1.525 3,080 Closed MAY16 1.607 2,891 1.571 2,940 1.567 3,005 1.561 3,006 Cheese 40-lb. Blocks JUN16 1.638 2,626 1.612 2,672 1.606 2,739 1.602 2,749 Price $1.5000 $1.4800 $1.4700 $1.4600 JUL16 1.671 2,125 Markets 1.655 2,149 1.645 2,213 1.645 2,231 AUG16 1.706 1,948 1.698 1,964 1.689 2,029 1.689 2,030 Closed Change +1/2 -2 -1 -1 SEP16 1.728 1,863 1.724 1,878 1.721 1,917 1.720 1,919 1.741 1,699 1.737 1,709 Weekly average (Jan. 19-22): Barrels: $1.4781(-.0464); 40-lb. Blocks: $1.4775(-.0095). OCT16 1.730 1,711 1.730 1,711 NOV16 1.730 1,874 1.725 1,890 1.719 1,890 1.719 1,889 Weekly ave. one year ago (Jan. 19-23, 2015): Barrels: $1.4475; 40-lb. Blocks: $1.4750. DEC16 1.719 1,799 1.716 1,805 1.706 1,808 1.715 1,808 JAN17 1.715 82 1.715 82 1.715 82 1.715 82 Grade A NDM FEB17 1.722 49 1.721 49 1.716 49 1.713 49 Price Markets $0.7425 $0.7425 $0.7100 $0.7100 MAR17 1.720 31 1.720 31 1.719 31 1.718 31 APR17 1.730 31 1.730 31 1.730 31 1.730 31 Change Closed -3/4 NC -3 1/4 NC MAY17 1.730 31 1.730 31 1.730 31 1.730 31 Weekly average (Jan.