Dairy Market Update: Price Declines Slow in April

Wholesale dairy product markets appear to have settled down this month, slowing the decline in prices experienced earlier this year. Butter and cheddar cheese prices traded at the Chicago Mercantile Exchange (CME) in a narrow range for the first three weeks of April, following a similar trading pattern in March. Grade AA butter, which closed last week at $1.17 per pound, had traded between $1.1450 and $1.1675 all month. Cheddar cheese in 40-lb. blocks settled at $1.16 last week, after trading between $1.16 and $1.1950 in the preceding weeks.

Recent declines in nonfat dry milk and dry whey wholesale prices have also slowed, according to prices reported by the U.S. Department of Agriculture's (USDA) National Agricultural Statistics Service (NASS) for the week ending April 15. The national average price for nonfat dry milk was 83.91 cents per pound, down only 0.16 cents from the prior week. The national average dry whey price fell 0.53 cents to 30.3 cents per pound.

In January, the USDA's Agricultural Marketing Service began reporting sales of organic fluid milk products and Class I drinkable yogurt as separate categories for the first time. This data, however, is only for organic sales in Federal Milk Marketing Order areas and does not include sales in states without federal regulations, such as California.

Sales of organic whole milk products during January and February totaled 28 million pounds, representing 1.2 percent of total whole milk products sold in those months. During the same time, sales of organic fat-reduced milk products totaled 78 million pounds, accounting for 1.6 percent of total sales of fat-reduced milk products. Drinkable yogurts included in Class I sales reached 15 million pounds combined for January and February.

For more information on organic and drinkable yogurt sales, click here.

Posted April 24, 2006