DAIRY MARKET NEWS WEEK OF MAY 7 - 11, 2018 DAIRY … · attempting to price NDM off the futures curve. Low/medium NDM production is called strong or active in all regions. The dry

DAIRY MARKET NEWS

WEEK OF MAY 7 - 11, 2018 VOLUME 85, REPORT 19

DAIRY MARKET NEWS AT A GLANCE

TABLE OF CONTENTS Product Highlights/CME/DMN at a Glance 1 Weekly CME Activity/Butter Markets/NDPSR 2 Cheese Markets 3 Fluid Milk and Cream 4 Nonfat Dry Milk/Dry Buttermilk/Dry Whole Milk 5 Dry Whey/WPC 34%/Lactose/Casein 6

U.S. Dairy Cow Slaughter/Class Milk Prices 7 International Dairy Market News 8 Dairy Futures 9 International Monthly Summary and Averages 10 April Consumer Price Index 11 May Supply and Demand Estimates 12

April FMMO Class and Component Prices 14 Dairy Graphs G1 National Retail Report—Dairy Dairy Market News Contacts

CME GROUP CASH MARKETS (5/11) BUTTER: Grade AA closed at $2.3350. The weekly average for Grade AA is $2.3295 (-.0270). CHEESE: Barrels closed at $1.6200 and 40# blocks at $1.6325. The weekly average for barrels is $1.6445 (+.0655) and blocks, $1.6790 (+.0220). NONFAT DRY MILK: Grade A closed at $.8500. The weekly average for Grade A is $.8500 (+.0140). DRY WHEY: Extra grade dry whey closed at $.3250. The weekly average for dry whey is $.3215 (+.0075). BUTTER HIGHLIGHTS: Cream supplies are more than sufficient to cover all butter processing needs in the country, except for the Central region. In this region cream intakes are becoming less available for churning mainly due to strong pulls from Class II processors, specially ice cream makers. In this way, microfixing has been very active in this region. Nationwide, the demand for butter is fair/good. Many processors in the country have been switching production schedules from bulk to print butter as requests from many retail outlets are improving. Meanwhile, the current domestic cash pricing for butter is attracting the interest of international buyers, which could mean a possible chance to export. Throughout the country, bulk butter pricing ranges from 5 cents below to 7 cents over the CME average. The CME Group cash price for Grade AA butter is $2.3350, down $0.0175 compared to last Friday’s price, $2.3525. CHEESE HIGHLIGHTS: Milk remains abundant for cheese production throughout the country. That said, some cheesemakers in the Midwestern region have suggested spot milk offers are declining. Spot milk prices ranged from $1 to $4 under Class III. As schools are on the verge of summer break, some cheese contacts expect offers to pick up in the next few weeks. Western and Midwestern cheesemakers are suggesting that demand is being stunted a bit by the market price uptick of recent weeks, and some buyers are taking a day-to-day approach. Northeastern contacts suggest orders are on par with inventories. The cheese market tone is somewhat healthy. The CME block to barrel price gap is currently not a concern, as block prices came down to hover just over barrel prices this week in a

comparatively tight range. The CME Group closing price for barrels, $1.6200, is up $.0200 from last Friday’s close. The closing price for blocks, $1.6325, is down $.0325 from last week’s close. FLUID MILK: Midwest milk output is steady to strong as spring flush is upon us, but some contacts have noted that protein/fat components are down, possibly due to the increasing temperatures and feedstuff/pasture quality. Cheesemakers are suggesting spot milk offers have slowed this week, but they do expect more to come as summer break approaches. Cream supplies are tightening. Milk production is increasing in the Mid-Atlantic, Pacific Northwest, Idaho, Utah and Colorado. In the Southeast, milk production is flat. Bottling orders are down from last week, although some Southwest manufacturers do not have milk clearing into their plants. However, there are other manufacturing operations that are running full capacity. California milk output is steady to slightly down. Manufacturing capacities in California are adequate to handle all milk supplies. Processing duties are running as scheduled. New Mexico production is slightly down. Arizona conditions are getting hotter and milk production is progressively dropping. Midwest cheese producers continue to report that some spot milk is discounted. Cream multiples for all Classes range 1.18-1.30 in the East, 1.17-1.26 in the Midwest, and 1.05-1.27 in the West. DRY PRODUCTS: Low/medium heat nonfat dry milk prices are steady to higher in the Central and East, higher in the West. Western high heat prices firmed at the top of the price range, while Central/East high heat firmed at the bottom. Expectations for price movement vary: some expect a drop in the Central Region; some expect West prices to move up while others expect lower prices; and some East indicators support a market upswing, while sources noted limited takers when attempting to price NDM off the futures curve. Low/medium NDM production is called strong or active in all regions. The dry buttermilk price range is unchanged in all regions, except for an increase at the bottom of the Central/East price range. Stocks are balanced. Most Central and East sales are noted to be to fill contracts. Dryer capacity available for buttermilk is often secondary to drying nonfat dry milk or

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CME GROUP CASH TRADING COMMODITY MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY :: WEEKLY :: WEEKLY MAY 07 MAY 08 MAY 09 MAY 10 MAY 11 :: CHANGE* :: AVERAGE# CHEESE BARRELS $1.6525 $1.6500 $1.6500 $1.6500 $1.6200 :: :: $1.6445 (+.0525) (-.0025) (N.C.) (N.C.) (-.0300) :: (+.0200) :: (+.0655) 40# BLOCKS $1.6925 $1.7025 $1.7025 $1.6650 $1.6325 :: :: $1.6790 (+.0275) (+.0100) (N.C.) (-.0375) (-.0325) :: (-.0325) :: (+.0220) NONFAT DRY MILK GRADE A $.8600 $.8600 $.8300 $.8500 $.8500 :: :: $.8500 (+.0175) (N.C.) (-.0300) (+.0200) (N.C.) :: (+.0075) :: (+.0140) BUTTER GRADE AA $2.3250 $2.3025 $2.3450 $2.3400 $2.3350 :: :: $2.3295 (-.0275) (-.0225) (+.0425) (-.0050) (-.0050) :: (-.0175) :: (-.0270) DRY WHEY EXTRA GRADE $.3200 $.3200 $.3200 $.3225 $.3250 :: :: $.3215 (+.0025) (N.C.) (N.C.) (+.0025) (+.0025) :: (+.0075) :: (+.0075)

CHEESE: carload = 40,000 lbs., BUTTER: carlot = 40,000-43,000 lbs. *Sum of daily changes. # Weekly averages are simple averages of the daily closing prices for the calendar week.

Computed by Dairy Market News for international purposes. This data is available on the Internet at WWW.AMS.USDA.GOV/MARKET-NEWS/DAIRY

-CONTINUED FROM PAGE 1- condensed skim. Dry whey prices are mixed in the Central region, but steady to higher in the West and Northeast where demand is strong, leaving stocks tighter. Production is stable in the Northeast. In the West, production is mostly just keeping pace with buyer requests. Prices for whey protein concentrate 34% moved higher at the bottom of the range and both ends of the mostly price series. Spot sale activity is increasing. Inventories are committed for favored brands. Lactose prices are mixed. A few remaining Q2 contract shipments and some spot sales reinstated a lower price at the bottom of the price range. However, spot activity is generally active and sale prices pushed the top of the mostly price series higher. Casein prices are steady this week, both acid and rennet. Buyers now seeking to stock up on casein for any near term delivery may be having to look around quite actively to conclude a purchase. INTERNATIONAL DAIRY MARKET NEWS (DMN): WESTERN EUROPE: Since mid to late April, many plant operators report that milk intakes have been increasing at a welcome pace. For the cheese industry in Western Europe, more milk is very welcome. Much current cheese production is sold before being made. Potential customers are being turned away. Even with higher production volumes, cheese inventories are tight. EASTERN EUROPE: As in Western Europe, cheese plants are eager for more milk. Perhaps more than some Western European countries, production is more focused on domestic needs than exports, with some exceptions. Traders are indicating that buyers are eager to commit to butter and cheese contracts. OCEANIA. AUSTRALIA: Australia is nearing the end of a milk season with decently increased milk production. July 2017-March 2018 milk production in Australia is up 3.4 percent over one year earlier. Average milkfat in Australia March 2018, 4.36 percent, is up 0.5 percent from March 2017. Average protein, 3.44 percent, is up 0.3 percent from March 2017. NEW ZEALAND: New Zealand is weeks away from the technical end of the current milk production season, the end of May. However, typically June is the lowest milk production month of the year. With such low current milk volumes relative to annual totals, little can happen any longer to alter the seasonal results. SOUTH AMERICA OVERVIEW: In ARGENTINA, during the past two weeks, wetness has persisted, slowing summer crop harvests but improving pasture conditions in many dairy farms throughout the main dairy states of the country; Córdoba, Entre Rios and Buenos Aires. In URUGUAY, milk output is up, following seasonal patterns. Climate conditions in Uruguay have been favorable, adding comfort to the dairy herds. In BRAZIL, farm milk production has slightly improved, as climate conditions have been stable across the main dairy basins. However, farm gate prices continue to be relatively high according to some processors. NATIONAL RETAIL REPORT - DAIRY (DMN): The national weighted average advertised conventional milk price for half gallons is $2.43, up 46 cents from a week ago, while milk in one gallon bottles averaged $2.48, down 3 cents. The premium for organic to conventional half gallon bottled milk is $1.51. The U.S. average conventional one pound butter price is $3.13 this period, down 5 cents from a week ago. The one pound organic butter price is $6.29, an organic price premium of $3.16. Conventional ice cream in 48-64 ounce containers continues to be the most advertised dairy item. The weighted average price for 48-64 ounce containers of ice cream was $3.09, up 1 cent from last week. Half gallons of milk were the most advertised organic item and had an average price of $3.94, up 9 cents from the previous week. APRIL CONSUMER PRICE INDEX (BLS): The April CPI for all food is 253.2, up 1.4 percent from a year ago. The dairy products index is 216.9, down 0.4 percent from a year ago. The following are the April-to-April changes for select products: fresh whole milk is down 3.2 percent; cheese is up 0.9 percent; and butter is up 4.4 percent.

MAY SUPPLY AND DEMAND ESTIMATES (WAOB): Milk production for 2019 is forecast higher on gradual recovery in milk per cow. Cow numbers are expected to remain near 2018 levels. Commercial exports on both a fat and skim-solids basis are forecast higher than the previous year on robust global demand. Fat and skim-solids basis imports are unchanged from 2018. With stronger expected domestic and export demand, cheese, nonfat dry milk (NDM), and whey prices are forecast higher for 2019. Butter prices are forecast slightly lower. The Class III price is forecast higher on stronger cheese and whey prices. The Class IV price is forecast higher also as a stronger expected NDM price more than offsets the lower butter price. The 2019 all milk price is forecast at $16.25 to $17.25 per cwt, slightly higher than 2018. The 2018 milk production forecast is reduced from the previous month on lowered milk cow numbers and slow growth in milk per cow. Exports are raised from the previous month on both a fat and skim-solids basis on strong global demand. Imports are lowered on a fat and skim-solids basis. Cheese, butter, NDM and whey prices are raised from the previous month resulting in both Class III and Class IV prices being raised. The 2018 all milk price is increased to $16.20 to $16.70 per cwt. APRIL FMMO CLASS AND COMPONENT PRICES(FMMO): The following are the April 2018 class prices under the Federal milk order pricing system and changes from the previous month: Class II: $14.03 (+$0.15), Class III: $14.47 (+$0.25), and Class IV: $13.48 (+$0.44). Under the Federal milk order pricing system, the butterfat price for April 2018 is $2.5113 per pound. Thus, the Class II butterfat price is $2.5183 per pound. The protein and other solids prices for April 2018 are $1.7810 and $0.0619 per pound, respectively. These component prices set the Class III skim milk price at $5.89 per cwt. The April 2018 Class IV skim milk price is $4.86, which is derived from the nonfat solids price of $0.5401 per pound. The product price averages for April 2018 are: butter: $2.2452, nonfat dry milk: $0.7134, cheese: $1.5737 and dry whey: $0.2592.

WEEK OF MAY 7 - 11, 2018 DAIRY MARKET NEWS VOLUME 85, REPORT 19

DAIRY MARKET NEWS AT A GLANCE

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DAIRY MARKET NEWS, MAY 7 - 11, 2018 VOLUME 85, REPORT 19

NORTHEAST With the retreat in butter prices this week, already down $0.0500 at the CME Group, some buyers are thrilled at the possibility of acquiring discounted butter. Considering the pickup in milk production, cream supplies at butter plants and the general marketplace are becoming more available. Meanwhile, some butter manufacturers are shipping surplus cream supplies to Class II end-user processing plants. In managing inventory, some butter makers are finding it difficult to clear surplus cream to prevent the buildup of stocks at the current multiple. Opinions are mixed, as some traders speculate the butter price will weaken further. Global dynamics appears to be major in determining how the market will further respond. For now, interest remains good. Demand from the retail sector is steady. Bulk butter transactions are occurring 5 to 7 cents over the market of the CME Group, with various time periods and averages used. The butter market undertone is unsettled. This week, a cooperative export assistance program accepted requests for export assistance to sell 330,693 pounds (150 metric tons) of butter. The CME Group monthly average price for Grade AA butter during April 2018 was $2.3145, compared to $2.0992 a year ago. According to the DMN National Retail Report-Dairy, for May 4-10, 2018, the Northeast weighted average retail price for 1-pound butter was $3.98, 80 cents higher than the national average price. Markets in the Northeast reported prices ranging $2.50-$4.99. In the Southeast, the weighted average butter price is $3.13, 5 cents below the national average, with prices ranging $2.49-$3.49, in retail markets surveyed.

Prices for: Eastern U.S., All First Sales, F.O.B., Grade AA Conventional, and Edible Butter Bulk Basis Pricing - 80% Butterfat $/LB: +0.0500- +0.0700

CENTRAL

Eighty degree days, already a common occurrence in the south Central region, have just recently begun to grace the upper Midwest. Thus, butter makers are reporting a noticeably lighter cream supply, due at least in part to an increase in ice cream manufacturers clearing more cream from the spot market. Cream suppliers have confirmed this and suggest early-week spot cream purchases, those headed for Class II production, have increased noticeably from just two weeks ago. That said, churns are less active, and microfixing continues to be the method du jour for some producers. On the demand side, there has not been a noteworthy difference of late. Eighty-two percent butter is still sought after, and domestic retail sales are fair, reportedly meeting expectations. Generally, butter inventories are in good shape, and the markets are and have been remarkably bullish. Cream multiples were reported from 1.18 to 1.24 for Class IV manufacturing.

The DMN National Retail Report-Dairy for May 4-10 noted the national weighted average advertised price for a 1 pound package of butter is $3.18, $0.23 below one week ago, but $0.33 higher than

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NATIONAL DAIRY PRODUCTS SALES REPORT U.S. AVERAGES AND TOTAL POUNDS

WEEK ENDING May 5, 2018

BUTTER CHEESE 40# BLOCKS

CHEESE BARRELS 38% MOISTURE

DRY WHEY NDM

2.3396 7,380,806

1.6405 11,718,994

1.5164 11,996,901

0.2692 5,482,723

0.7631 20,743,176

Further data and revisions may be found on the internet at: http://www.ams.usda.gov/rules-regulations/mmr/dmr

BUTTER MARKETS

-2- MONDAY, MAY 7, 2018 CHEESE -- SALES: 3 CARS BARRELS: 2 @ $1.6000, 1 @ $1.6525; 1 CAR 40 POUND BLOCKS @ $1.7000; UNFILLED BIDS: 2 CARS 40 POUND BLOCKS: 1 @ $1.6400, 1 @ $1.6900; UNFILLED OFFERS: 1 CAR 40 POUND BLOCKS @ $1.6925 NONFAT DRY MILK -- SALES: 6 CARS GRADE A: 1 @ $0.8575, 4 @ $0.8600, 1 @ $0.8625; UNFILLED BIDS: 4 CARS GRADE A: 1 @ $0.8450, 1 @ $0.8500, 1 @ $0.8550, 1 @ $0.8575; UNFILLED OFFERS: 2 CARS GRADE A: 1 @ $0.8625, 1 @ $0.8650 BUTTER -- SALES: NONE; UNFILLED BIDS: NONE; UNFILLED OFFERS: 5 CARS GRADE AA: 1 @ $2.3250, 1 @ $2.3350, 2 @ $2.3400, 1 @ $2.3500 DRY WHEY -- SALES: 1 CAR EXTRA GRADE @ $0.3200; UNFILLED BIDS: 1 CAR EXTRA GRADE @ $0.3175; UNFILLED OFFERS: 1 CAR EXTRA GRADE @ $0.3250 TUESDAY, MAY 8, 2018 CHEESE -- SALES: 16 CARS BARRELS: 4 @ $1.6500, 12 @ $1.6525; 2 CARS 40 POUND BLOCKS: 1 @ $1.6875, 1 @ $1.6950; UNFILLED BIDS: 2 CARS 40 POUND BLOCKS: 1 @ $1.6800, 1 @ $1.7025; UNFILLED OFFERS: 1 CAR 40 POUND BLOCKS @ $1.7050 NONFAT DRY MILK -- SALES: NONE; UNFILLED BIDS: 4 CARS GRADE A: 1 @ $0.8200, 2 @ $0.8550, 1 @ $0.8575; UNFILLED OFFERS: 2 CARS GRADE A @ $0.8650 BUTTER -- SALES: 20 CARS GRADE AA: 1 @ $2.3025, 4 @ $2.3050, 9 @ $2.3100, 1 @ $2.3150, 2 @ $2.3175, 1 @ $2.3200, 1 @ $2.3225, 1 @ $2.3250; UNFILLED BIDS: 3 CARS GRADE AA: 1 @ $2.2950, 1 @ $2.2975, 1 @ $2.3000; UNFILLED OFFERS: NONE DRY WHEY -- SALES: NONE; UNFILLED BIDS: 1 CAR EXTRA GRADE @ $0.3150; UNFILLED OFFERS: 1 CAR EXTRA GRADE @ $0.3300 WEDNESDAY, MAY 9, 2018 CHEESE -- SALES: NONE; UNFILLED BIDS: NONE; UNFILLED OFFERS: 1 CAR BARRELS @ $1.6550; 1 CAR 40 POUND BLOCKS @ $1.7250 NONFAT DRY MILK -- SALES: 3 CARS GRADE A: 1 @ $0.8300, 1 @ $0.8350, 1 @ $0.8375; UNFILLED BIDS: 3 CARS GRADE A: 1 @ $0.8200, 1 @ $0.8225, 1 @ $0.8250; UNFILLED OFFERS: 8 CARS GRADE A: 1 @ $0.8325, 1 @ $0.8375, 1 @ $0.8400, 1 @ $0.8500, 1 @ $0.8525, 1 @ $0.8550, 1 @ $0.8575, 1 @ $0.8600 BUTTER -- SALES: 12 CARS GRADE AA: 1 @ $2.3400, 1 @ $2.3425, 2 @ $2.3450, 2 @ $2.3475, 2 @ $2.3500, 1 @ $2.3525, 2 @ $2.3550, 1 @ $2.3575; UNFILLED BIDS: 9 CARS GRADE AA: 1 @ $2.2825, 2 @ $2.2925, 1 @ $2.3075, 1 @ $2.3150, 1 @ $2.3200, 1 @ $2.3300, 1 @ $2.3400, 1 @ $2.3425; UNFILLED OFFERS: 3 CARS GRADE AA: 1 @ $2.3550, 1 @ $2.3600, 1 @ $2.3650 DRY WHEY -- SALES: NONE; UNFILLED BIDS: 1 CAR EXTRA GRADE @ $0.3200; UNFILLED OFFERS: 1 CAR EXTRA GRADE @ $0.3300 THURSDAY, MAY 10, 2018 CHEESE -- SALES: 5 CARS BARRELS @ $1.6500; 1 CAR 40 POUND BLOCKS @ $1.6675; UNFILLED BIDS: NONE; UNFILLED OFFERS: 2 CARS BARRELS @ $1.6500; 4 CARS 40 POUND BLOCKS: 1 @ $1.6650, 1 @ $1.6900, 1 @ $1.7075, 1 @ $1.7200 NONFAT DRY MILK -- SALES: 20 CARS GRADE A: 3 @ $0.8200, 1 @ $0.8250, 1 @ $0.8275, 2 @ $0.8300, 2 @ $0.8400, 5 @ $0.8450, 5 @ $0.8475, 1 @ $0.8500; UNFILLED BIDS: 11 CARS GRADE A: 1 @ $0.8000, 2 @ $0.8200, 1 @ $0.8225, 2 @ $0.8250, 1 @ $0.8325, 1 @ $0.8375, 2 @ $0.8400, 1 @ $0.8450; UNFILLED OFFERS: 3 CARS GRADE A: 2 @ $0.8500, 1 @ $0.8525 BUTTER -- SALES: 3 CARS GRADE AA: 1 @ $2.3400, 2 @ $2.3450; UNFILLED BIDS: 5 CARS GRADE AA: 1 @ $2.3150, 1 @ $2.3250, 2 @ $2.3350, 1 @ $2.3375; UNFILLED OFFERS: 2 CARS GRADE AA: 1 @ $2.3400, 1 @ $2.3600 DRY WHEY -- SALES: NONE; UNFILLED BIDS: 2 CARS EXTRA GRADE: 1 @ $0.2900, 1 @ $0.3225; UNFILLED OFFERS: 1 CAR EXTRA GRADE @ $0.3325 FRIDAY, MAY 11, 2018 CHEESE -- SALES: 11 CARS BARRELS: 1 @ $1.6175, 10 @ $1.6200; 4 CARS 40 POUND BLOCKS: 1 @ $1.6325, 2 @ $1.6350, 1 @ $1.6400; UNFILLED BIDS: 4 CARS BARRELS: 2 @ $1.5000, 2 @ $1.6000; UNFILLED OFFERS: 5 CARS BARRELS: 2 @ $1.6200, 3 @ $1.6500; 3 CARS 40 POUND BLOCKS: 1 @ $1.6600, 1 @ $1.6700, 1 @ $1.6900 NONFAT DRY MILK -- SALES: 6 CARS GRADE A: 1 @ $0.8425, 2 @ $0.8450, 2 @ $0.8475, 1 @ $0.8500; UNFILLED BIDS: 5 CARS GRADE A: 1 @ $0.8175, 2 @ $0.8200, 1 @ $0.8325, 1 @ $0.8400; UNFILLED OFFERS: 4 CARS GRADE A: 3 @ $0.8500, 1 @ $0.8525 BUTTER -- SALES: 17 CARS GRADE AA: 3 @ $2.3275, 7 @ $2.3300, 2 @ $2.3325, 2 @ $2.3350, 2 @ $2.3375, 1 @ $2.3400; UNFILLED BIDS: 6 CARS GRADE AA: 1 @ $2.3000, 1 @ $2.3200, 1 @ $2.3225, 1 @ $2.3250, 1 @ $2.3300, 1 @ $2.3325; UNFILLED OFFERS: 1 CAR GRADE AA @ $2.3550 DRY WHEY -- SALES: NONE; UNFILLED BIDS: 2 CARS EXTRA GRADE: 1 @ $0.3000, 1 @ $0.3250; UNFILLED OFFERS: NONE


CONTINUED FROM PAGE 2 one year ago. The weighted average regional prices in the Midwest and South Central were $2.83 and $2.49, respectively. Prices for: Central U.S., All First Sales, F.O.B., Grade AA, Conventional, and Edible Butter Price Range - 80% Butterfat; $/LB Butterfat: .0000 - .0700

WEST

In the West, butter supplies are steady compared to last week. Churning activity remains strong as it usually is for this time of the year. Some processors report making more print than bulk butter. Class II demand for cream is increasing, but not enough to absorb all the cream offerings. Nonetheless, ice cream demand is expected to increase in coming months. Therefore, competition for cream will increase. Butter export sales are strong in that U.S. prices are favorable in the international market. Retail accounts continue to adequately move butter. Bulk butter pricing in the West this week is 5 cents below to 6.5 cents above the market, based on the CME Group with various periods and averages used. Contacts report that the lower prices for bulk butter are for older stocks. The DMN National Retail Report–Dairy for the week of May 4-10 found that the U.S. weighted average advertised price of 1 pound butter is $3.18 down $.23 from last week. The U.S. weighted average price was $2.85 one year ago. The weighted average price in the Southwest is $2.85, with a price range of $2.49-$2.99. The weighted average price in the Northwest is $2.83, with a price range of $1.99-$3.99. Prices for: Western U.S., All First Sales, F.O.B., Grade AA, Conventional, and Edible Butter Bulk Basis Pricing - 80% Butterfat $/LB: -0.0500 - +0.0650 Secondary Source Information: This week, a cooperative export assistance program accepted requests for 330,693 pounds (150 metric tons) of butter. So far this year, the program has assisted member cooperatives who have contracts to sell 10.15 million pounds of butter (82% milkfat) in export markets. According to the NASS Dairy Products report, U.S. butter production during March 2018, 185.6 million pounds, was 4.8 percent higher than March 2017, and 9.1 percent higher than February 2018. U.S. cumulative 2018 butter production through March is 537.8 million pounds, 4.2 percent higher than the same period last year. In the West, total March butter production was 91.1 million pounds, 17.8 percent higher than March 2017, and 16.5 percent more than February 2018. California March production was 59.0 million pounds, 16.4 percent higher than last year, and 14.0 percent higher than last month. The CME Group April 2018 monthly average price for Grade AA butter, $2.3145, is up from the March monthly average of $2.2011. One year ago, the CME Group monthly average was $2.0992. The Grade AA butter price at the CME Group on Wednesday closed at $2.3450, down $.0025 from a week ago.

2018 U.S. Butter and Milkfat Imports (USDA-FAS)

(Imports for Consumption) 2018 Imports % Change From (Million Lb.) 1 Year Ago March Imports Total Butter, Fats, Milk (H.S. Code 0405) 6.0 + 8 Butter Quota (H.S. Code 405101000) 0.7 + 15 Over Quota (H.S. Code 405102000) 2.9 ... AMF Quota (H.S. Code 405901020) 0.3 - 80 Over Quota (H.S. Code 405902020) 1.0 + 23 Other Milk Fat 1.2 +1519 2018 Imports % Change From (Million Lb.) 1 Year Ago TOTAL, JAN-MAR 18.8 + 6 1 Ireland 10.6 + 30 2 Mexico 2.8 + 13 3 New Zealand 1.5 - 56 4 India 1.5 +640 5 France 1.1 + 36

2018 U.S. Butter and Milkfat Exports (USDA-FAS) 2018 Exports % Change From (Million Lb.) 1 Year Ago March 8.3 + 152 TOTAL, JAN - MAR 18.3 + 59 1 Canada 6.6 + 32 2 Mexico 3.9 + 98 3 Saudi Arabia 1.4 + 48 4 Honduras 0.8 + 12018 5 Dominican Republic 0.6 + 1024

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CHEESE MARKETS

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NORTHEAST

Milk production is on the rise in the Northeast. Milk volumes are clear-ing into cheese processing at a heavy rate, moreover not allowing much room for milk pushback. Current cheese supplies are right in line with demand. Retail orders are stable to increasing. Cheddar cheese spot prices are stable and trading activities are steady to active. The process cheese price shifted higher $0.0925. In addition, the wholesale price for cheddar and Muenster increased $0.0375. The Grade A Swiss price declined $0.0675 following the release of the April 2018 An-nouncement of Class and Component Prices. Additionally, the Class III skim milk price for April 2108 saw a 4 cents decline. The DMN Northeast April 2018 monthly average price for cheddar blocks is $2.1830, compared to $2.0844 one year ago. Processed 5# sliced aver-age price is $1.8476, compared to $1.8038 one year ago. National Re-tail Report-Dairy, for May 4-10, 2018, noted the U.S. weighted aver-age advertised price for 8 ounce cheese block was $2.37, up 13 cents from the previous week and up 21 cents from last year. The U.S. weighted average advertised price of 8 ounce cheese shreds was $2.38, an increase of 17 cents from last week, and up 16 cents from a year ago. Northeast region’s weighted average advertised price for 8 ounce cheese blocks was $2.51, 14 cents above the U.S. average, with a re-gional price range of $1.77-$3.00. The average price for 8 oz. cheese shreds was $2.53, 15 cents above the national average, with prices ranging $1.99-$3.00. In the Southeast region, the average price for 8 oz. cheese blocks was $2.25, 12 cents below the average U.S. price, with a regional price range of $1.00-$2.50. The average price for 8 oz. shreds was $2.31, 7 cents below the U.S. average, with prices ranging $1.00-$2.50.

WHOLESALE SELLING PRICES: DELIVERED

DOLLARS PER POUND(MIXED LOTS (1000-5000 POUNDS))

Cheddar 40 pound Block 2.1125-2.3975 Muenster 2.0975-2.4475 Process American 5 pound Sliced 1.7150-2.1950 Swiss 10-14 pound Cuts 2.9350-3.2575

Secondary Sourced Information: The CME Group April 2018 monthly average price for barrels was $1.4721, compared to $1.4307 a year ago; blocks’ average price was $1.6062, up from $1.4976 a year ago. This week, a cooperative export assistance program accepted requests for export assistance to sell 1.07 million pounds (483 metric tons) of cheese. DAIRY PRODUCTS: According to NASS, U.S. total cheese production in March 2018 was 1.10 billion pounds, 2.7 percent higher than a year ago, and 11.6 per-cent higher than last month. In the Atlantic region, total cheese produc-tion was 139.7 million pounds, 7.7 percent higher than a year ago, and 14.0 percent higher than the previous month. Total March cheese pro-duction and percentage change, from last year for selected Eastern states are: March 2018 Production Million Lb. % Change From 1 Year Ago Pennsylvania 37.3 + 9.1 Vermont 12.0 - 1.2 New Jersey 5.6 + 3.5

MIDWEST

Central region cheese demand reports vary from producer to producer. Some cheesemakers have suggested buyers are buying day to day, as they wait out a potential market price drop. Other cheesemakers in the Midwest are pleasantly surprised by a continued uptrend in orders, particularly because this is historically a slower period. Cheese produc-tion continues apace, as milk continues to flow in at discounted rates. That said, a number of cheese producers are not looking and/or have reported spot milk offers are dwindling. Spot milk prices ranged from $1 under to $4 under Class III. With schools on the verge of closing

and spring flush in effect, cheese producers are not expecting milk prices to increase unless unexpected heat brings overall milk produc-tion down by quite a bit. The DMN National Retail Report-Dairy shows that May 4-10 Midwest ads for 8 ounce shred cheese have a weighted average advertised price of $2.26, 12 cents below the national average. Midwest prices range from $1.27-$2.79. One year ago, the national price was $2.22. For 8 ounce blocks, the Midwest average price is $2.37, on par with the national average price. Midwest ads are priced from $1.27-$2.50. Last year, the national price was $2.16. Mid-western wholesale prices are up $.0925 for process, up $.0375 for other types, but down $.0675 for Swiss Cuts.

WISCONSIN WHOLESALE SELLING PRICES: DELIVERED DOLLARS PER POUND(MIXED LOTS (1000-5000 POUNDS))

Blue 5 pounds 2.2875-3.2750 Cheddar 40 pound Block 1.7475-2.1425 Monterey Jack 10 pounds 1.9950-2.2000 Mozzarella 5-6 pounds 1.8200-2.7600 Muenster 5 pounds 2.0200-2.4450 Process American 5 pound Loaf 1.6700-2.0300 Swiss 6-9 pound Cuts 2.4525-2.5700

Secondary Sourced Information: The CME Group April 2018 monthly average price for barrels, $1.4721, is down from the March average of $1.5071, but up from the monthly average of a year ago, $1.4307. Blocks’ April average price, $1.6062, is up from the $1.5614 March monthly average and up from $1.4976 one year ago. Dairy Products (NASS) reports total U.S. cheese production, for March 2018, was 1.1 billion pounds, 2.7 percent above last year. Central total cheese production for March 2018 was 498.4 million pounds, 10.2 percent higher than February 2018. For total cheese and various types of cheese, March 2018 U.S. and Central cheese production percentage changes compared to March 2017 were as follows: March Production 2018 vs 2017 U.S. Central Total + 2.7% + 0.4% American + 1.7% - 4.0% Cheddar - 2.7% - 7.5% Total Italian + 2.5% + 4.2% Mozzarella + 2.8% + 5.6%

WEST

Western cheese makers report that cheese vats are replete with copious amounts of milk. While cheese is moving relatively well in U.S. mar-kets, and through current contracts, some processors say buyers are cooling to rising prices. A few buyers are making their purchases only as needed rather than place more cheese into their own warehouses. In addition, some market participants sense the strengthening dollar in relation to other world currencies may make it more difficult to export U.S. produced cheese. Inventories remain heavy, especially for barrel cheese. However, industry contacts say barrels are getting more atten-tion as of late. Improving weather across parts of the U.S. and the ad-vent of grilling season just a few weeks away is creating a bump in interest for process American cheese. The DMN National Retail Re-port Dairy for the week of May 4-10 shows the U.S. weighted average advertised retail price for an 8 ounce pack of natural shredded cheese is $2.38, up $.17 from last week. Packs average $2.32 in the Southwest and $2.22 in the Northwest. One year ago, the national price was $2.22. For 8 ounce blocks, the U.S. price is $2.37, up $.13 from last week. Blocks average $1.77 in the Southwest and $1.99 in the Northwest. One year ago, the national price was $2.16. In the West, wholesale prices were up $.0925 for process, and up $.0375 for cheddar block, cuts and Monterey Jack. Swiss cut wholesale prices are down $.0675 from the previous week.

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CHEESE MARKETS

CONTINUED FROM PAGE 3

WHOLESALE SELLING PRICES: DELIVERED DOLLARS PER POUND(MIXED LOTS (1000-5000 POUNDS))

Cheddar 10 pound Cuts 1.9600-2.1800 Cheddar 40 pound Block 1.7800-2.2250 Monterey Jack 10 pounds 1.9700-2.1300 Process American 5 pound Loaf 1.6575-1.9150 Swiss 6-9 pound Cuts 2.5125-2.9425

FOREIGN TYPE

The European Union (EU) cheese market is currently firm. Most pro-cessors expect the market trend to stand still for a while. Although re-ports suggest extensive cheese output in Germany, strong sales coupled with limited cheese availability are keeping prices at a higher level. In 2016 and 2017, around the month of April up to the month of October, German cheese prices moved up. Therefore, market participants are wondering if this year, prices will follow the same trend as in 2016 and 2017. In Germany, higher prices have caused an abrupt cheese demand as buyers try to hedge their stocks before a further increase in prices. Sales of cheese within and outside the EU are currently very active. In the U.S., the prices for wholesale blue, gorgonzola, parmesan Italy, and Romano increased $.0375, but Swiss cuts Switzerland prices decreased $.0675. all other prices are unchanged compared to last week.

WHOLESALE SELLING PRICES: FOB DISTRIBUTORS DOCK DOLLARS PER POUND (1000 - 5000 POUNDS, MIXED LOTS )

: NEW YORK VARIETY : IMPORTED : DOMESTIC : : Blue : 2.6400-5.2300 : 2.1650-3.6525* Gorgonzola : 3.6900-5.7400 : 2.6725-3.3900* Parmesan (Italy) : -0- : 3.5550-5.6450* Romano (Cows Milk) : -0- : 3.3550-5.5050* Sardo Romano (Argentine) : 2.8500-4.7800 : -0- Reggianito (Argentine) : 3.2900-4.7800 : -0- Jarlsberg-(Brand) : 2.9500-6.4500 : -0- Swiss Cuts Switzerland : -0- : 2.9725-3.2950* Swiss Cuts Finnish : 2.6700-2.9300 : -0- * = Price change.

COLD STORAGE

WEEKLY COLD STORAGE HOLDINGS - SELECTED STORAGE CENTERS IN THOUSAND POUNDS - INCLUDING GOVERNMENT STOCKS

BUTTER : CHEESE 04/02/18 23,807 : 86,566 04/01/18 23,514 : 86,585 CHANGE 293 : -19 % CHANGE 1 : - 0

2018 U.S. Cheese and Curd Exports (USDA-FAS) 2018 Exports % Change From (Million Lb.) 1 Year Ago March 74.6 + 9 TOTAL, JAN - MAR 196.1 + 11 1 Mexico 54.3 + 5 2 South Korea 30.8 + 11 3 Japan 20.3 + 30 4 Australia 14.2 - 7 5 China 9.5 + 57

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2018 U.S. Cheese and Curd Imports (USDA-FAS) (Imports for Consumption)

2018 Imports % Change From (Million Lb.) 1 Year Ago March Imports TOTAL Cheese and Curd (H.S. Code 0406) 28.4 - 19 Cheese, Except Fresh (H.S. Code 040690) 23.7 - 23 Fresh Cheese (H.S. Code 040610) 2.3 - 3 Cheese, Processed (H.S. Code 040630) 1.4 - 6 Cheese, Blue-Veined (H.S. Code 040640) 0.8 + 33 2018 Imports % Change From (Million Lb.) 1 Year Ago TOTAL, JAN-MAR 85.7 - 8 1 Italy 16.8 + 6 2 France 9.4 - 11 3 Denmark 5.9 + 63 4 Netherlands 5.3 - 16 5 Germany 5.0 + 26

DAIRY MARKET NEWS, MAY 7 - 11, 2018 VOLUME 85, REPORT 19 FLUID MILK AND CREAM

Warmer temperatures are upon the Northeast region. Milk production is responding to the comfortable temperatures as volumes have increased. Balancing facilities are clearing strong milk loads, overall keeping operations running at or near full capacity. Some market participants report bottling orders are down. Class II sales are somewhat flat, however Class III sales are good. Mid-Atlantic milk production is increasing. Balancing plants are clearing heavy milk volumes into intakes for full production schedules. Many manufacturers report processing needs have really picked up in May. The heat is rising in the Southeast with temperatures headed towards the 90s. Milk production has been flat the past few weeks. Bottling orders are down from last week, although some manufacturers do not have milk clearing into their plants. However, there are other manufacturing operations that are running full capacity. Cream has gained some strength this week with multiples ranging 1.18-1.30. Industry contacts communicate cream is currently available, although, with cream cheese and ice cream demand picking up, there are reports of cream multiples increasing in the near future. There are a few manufacturers continuing to sell their cream instead of clearing it into intakes. The DMN April average for Northeast Class II cream was $2.7419, compared to $2.4007 a year ago. Condensed skim is unchanged as many market participants report conditions are weak as loads are plentiful in the East. Many spot loads are being purchased at a discount. The DMN April monthly average for Northeast Class II condensed skim was $0.6514, compared to $0.5850 a year ago. NORTHEASTERN U.S., F.O.B. CONDENSED SKIM Price Range - Class II; $/LB Solids: 0.45 - 0.81 Price Range - Class III; $/LB Solids: 0.49 - 0.85

NORTHEASTERN U.S., F.O.B. CREAM Multiples Range - All Classes: 1.1800 - 1.3000 Price Range - Class II; $/LB Butterfat: 2.7807 - 3.0635

Secondary Sourced Information: With last Wednesday’s announcement of the Class and Component Prices, the Class III Skim Milk price decreased $0.0400, compared to the previous month. DAIRY PRODUCTS: According to NASS, March 2018 U.S. hard ice cream production totaled 65.4 million gallons, 18.1 percent more than last month, but 11.8 percent less than a year ago. Cumulative 2018 U.S. production through March translated to 175.5 million gallons, 7.4 percent less than the previous year total through March. Meanwhile, the Atlantic region’s hard ice cream production totaled 15.1 million gallons, 6.1 percent above a year ago and 22.9 percent higher than the last month. U.S. yogurt production (plain and flavored) for March 2018 totaled 392.3 million pounds, down 4.7 percent from last year, but up 4.4 percent from the previous month.

MDWEST

Fluid milk output is edging up as spring weather, although later than some farmers would have preferred, is gracing the north central region. In some areas of the upper Midwest, field preparations have begun. That said, some contacts in northern edges of Wisconsin and in Minnesota report persistent ice remains on some ponds and lakes, hence planting has yet to commence in those areas. Cheese producers continue to report that spot milk is discounted, but low prices are beginning to ebb somewhat. Cream is assuredly showing signs of firmness, as cream prices are edging up. Contacts point to the increased temperatures, which have unsurprisingly spurred on ice cream production. Cream buyers in the Midwest are also suggesting loads coming from the West are not as accessible recently.

The DMN National Retail Report-Dairy for April 27-May 3 noted the national weighted average advertised price for one gallon of milk was $2.14, down 28 cents from last week, and 22 cents lower than a year ago. The weighted average regional prices in the Midwest and South Central were $3.69 and $2.65, respectively. MIDWESTERN U.S., F.O.B. CREAM Multiples Range - All Classes: 1.1700 - 1.2600 Multiples Range - Class II: 1.2100 - 1.2600 Price Range - Class II; $/LB Butterfat: 2.8580 - 2.9761

WEST

California farm milk is being orderly processed. Milk output is steady to slightly down. Manufacturing capacities are adequate to handle all milk supplies. Processing duties are running as scheduled. No major issues were reported this week. Bottling demand is flat. In Arizona, weather conditions are getting hotter and impacting cows’ well-being. As so, milk production is progressively dropping. Milk loads available to manufacturers are high, but remain manageable. Some milk continues to be shipped to California for processing. Milk intakes into bottling plants are flat. New Mexico milk production is slightly down this week. Farm milk processing is going well. Holdovers are back to normal levels. Milk supplies are in line with buyers’ demands. Class I demand from grocery stores and schools is steady to slightly down. Class II intakes are increasing as ice cream manufacturers start requesting more. Class III sales are generally steady. Pacific Northwest milk production is steady to higher. Some industry contacts suggest intakes are increasing due to pleasant weather in the region. Others add that limited hot temperatures, plenty of water and generally good quality feedstocks have yielded strong milk components as well. Manufacturers report plenty of milk for most processing needs. Bottling demand is steady and some Class II processors, that is ice cream, are commencing summer processing schedules. Milk production in the mountain states of Idaho, Utah and Colorado is strong and growing. Northern reaches of this region typically do not reach flush until late June or early July. Manufacturers report they have been able to keep pace with milk intakes for the most part, making space for some additional milk. Contacts say only a few loads of milk are getting pushed into surrounding states. Western condensed skim is clearing well into the dryers. Processors hope that ice cream makers will be taking more loads as the summer gets close. Western cream is tightening slowly. Inventories are plentiful to meet all processing needs. Cream demand is higher, mostly for ice cream manufacturers. Cream churning is still active. However, some processors hope to stop running the churns soon. Cream multiples for all usages are 1.05-1.27. According to the DMN National Retail Report-Dairy for the week of May 4-10, the national weighted average advertised price for one gallon of milk is $2.51, up $0.37 from last week, but down $0.11 from a year ago. The weighted average regional price in the Southwest is $2.41 with a price range of $1.99-$2.79. The weighted average regional price in the Northwest is $1.99 with no price range. WESTERN U.S., F.O.B. CREAM Multiples Range - All Classes: 1.0500 - 1.2700 Secondary Sourced Information: According to the NASS Dairy Products report, hard ice cream production in the West region for March 2018 is 12.4 million gallons, 24.8 percent higher than a month ago, but 29.7 percent below the previous year.

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EAST


NONFAT DRY MILK, BUTTERMILK & WHOLE MILK

Prices represent carlot/trucklot quantities for domestic and export sales packaged in 25 kg. or 50 lb. bags, or totes, spray process, dollars per pound.

NONFAT DRY MILK - CENTRAL AND EAST

Central: Low/medium nonfat dry milk (NDM) pr ices in the Central region are up on both ends of the range and increased on the top of the mostly price series. More NDM contacts are suggesting that the low to mid $.80s price points are where a lot of trading is taking place, in the Midwestern U.S. There are a number of buyers who are expecting a price drop in the near term and are avoiding the NDM market altogether if possible. If end users can utilize high protein blends, which remain fairly if only slightly less accessible recently, those remain the more cost effective option. Undoubtedly, export demand has helped stoke the flame of the increased NDM prices. Low/medium NDM is still occupying a majority of dryer time, and any slowdowns are not expected in upcoming flush months. High heat prices bumped up on the bottom of the range, while processing is nearly exclusive to contractual needs. East: Pr ices for low/medium heat nonfat dry milk (NDM) firmed in both the range and mostly pricing series. Price adjustments were made around limited exchanges in this week’s f.o.b. spot market. Although some indicators support a market upswing, sources noted limited takers when attempting to price NDM off the futures curve. A revision to U.S. NDM inventories lowered the amounts held, which likely supports the current price trend. Meanwhile, dryer schedules are active and reflect the forthcoming peak of the spring flush. Most NDM trading is based on contracted volumes. Demand is mixed with some end-users holding off purchasing as manufacturing milk supplies grow. High heat nonfat dry milk prices are steady to higher. Supplies are light, but committed customer are receiving volumes required for production. The CME Group monthly average price for Grade A NDM during April was $0.7656, compared to $0.8347 a year ago. The DMN monthly average of the mostly price series for Central and East low/medium heat NDM during April was $0.7321, compared to $0.8363 a year ago. Prices for: Eastern and Central U.S., All First Sales, F.O.B., Extra Grade & Grade A, Conventional, and Edible Nonfat Dry Milk Price Range - Low & Medium Heat; $/LB: .7100 - .8800 Mostly Range - Low & Medium Heat; $/LB: .7550 - .8500 Prices for: Eastern and Central U.S., All First Sales, F.O.B., Extra Grade & Grade A, Conventional, and Edible Nonfat Dry Milk Price Range - High Heat; $/LB: .8875 - .9800 Secondary Sourced Information: Wednesday at the CME Group, Grade A NDM closed at $0.8300, up $0.0100 from last Wednesday. The NASS Dairy Products report noted U.S. human NDM production during March 2018 in the Central region totaled 27.1 million pounds, 17.9 percent lower than one year ago. Total U.S. human NDM production during March 2018 was 180.3 million pounds, 12 percent higher than last year. During January-March, U.S. human NDM production totaled 498.4 million pounds, 8.8 percent more than the same time span in 2017. Total U.S. NDM, human, month ending stocks for March were 298 million pounds, 20.9 percent above a year ago. The Foreign Agricultural Service (FAS), reports that March 2018 U.S. nonfat dry milk exports totaled 146.4 million pounds, a 37 percent increase from a year ago.

NONFAT DRY MILK - WEST

Western low/medium heat nonfat dry milk prices are higher on both ends of the range and mostly price series. Prices have been moving higher for the past two weeks. Some market participants believe that low/medium heat nonfat dry milk prices will most likely continue to move up as supplies of newer products are limited in the spot market, and those are what buyers are looking for. Others are concerned that prices could decrease at any time. There are also some apprehensions about how the free trade agreement between Mexico and the European Union will affect the U.S. export market. Low/medium heat nonfat dry milk production continues to be strong. Supplies are enough to meet all needs. Demand is unchanged from last week. High heat nonfat dry milk prices are higher at the top of the range, but steady at the bottom. The market undertone is stable. Contractual sales are moving as planned. Spot sales are light. Outputs are irregular while inventories are somewhat tight. The April 2018 Dairy Market News monthly average for the West low/medium heat nonfat dry milk mostly series is $0.7370 compared to $0.8325 a year ago. The average for Western high heat nonfat dry milk is $.9233 compared to $0.9772 a year ago. Prices for: Western U.S., All First Sales, F.O.B., Extra Grade & Grade A, Conventional, and Edible Nonfat Dry Milk Price Range - Low & Medium Heat; $/LB: .7625 - .8950 Mostly Range - Low & Medium Heat; $/LB: .8050 - .8500 Prices for: Western U.S., All First Sales, F.O.B., Extra Grade & Grade A, Conventional, and Edible Nonfat Dry Milk Price Range - High Heat; $/LB: .9000 - 1.0500 Secondary Sourced Information: The CME Group monthly average price for Grade A NDM during April was $0.7656, compared to $0.8347 a year ago. The NASS Dairy Products report noted U.S. human NDM production during March 2018 in the West region totaled 117.1 million pounds, 24.8 percent higher than one year ago, and 15.5 percent higher from the previous month. Total U.S. human NDM production during March 2018 was 180.3 million pounds, up 12.0 percent from last year. Cumulative human NDM production from January to March was 498.4 million pounds, 8.8 percent above the previous year. Total U.S. NDM, human, month ending stocks for March were 298.0 million pounds, 20.9 percent above a year ago.

CALIFORNIA MANUFACTURING PLANTS - NONFAT DRY MILK WEEK ENDING PRICE TOTAL SALES May 4 $.7287 12,472,381 April 27 $.7236 19,171,500 Prices are weighted averages for Extra Grade and Grade A Nonfat Dry Milk, f.o.b. California manufacturing plants. Prices for both periods were influenced by effects of long-term contract sales. Compiled by Dairy Marketing Branch, California Department of Food and Agriculture.


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NONFAT DRY MILK, BUTTERMILK & WHOLE MILK

Prices represent carlot/trucklot quantities for domestic and export sales packaged in 25 kg. or 50 lb. bags, or totes, spray process, dollars per pound.

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U.S. NDM Exports, H.S. Code 0402100000(FAS)

2018 Exports % Change From (Million Lb.) 1 Year Ago March Total 146.4 + 37 TOTAL, JAN - MAR 401.8 + 23 1 Mexico 172.7 + 17 2 Indonesia 36.2 + 90 3 Philippines 32.7 + 1 4 Vietnam 29.4 + 93 5 Malaysia 17.3 + 3

DRY BUTTERMILK - CENTRAL AND EAST

Central: Pr ices for Central dry buttermilk saw a bump on the bottom of the range after a fairly slow trading week. Prices for dry buttermilk are slower to materialize, as drying time is lopsided in favor of nonfat dry milk (NDM) production, and a majority of buttermilk trades are of the condensed variety. Dry buttermilk stores are balanced and primarily based on contracts. There are a number of processors who are hopefully expectant that dry buttermilk prices will follow in the footsteps of NDM. The market tone is currently quiet, with bullish traits. The DMN monthly average of the range price series for Central and East dry buttermilk during April was $0.7276, compared to $0.8713 a year ago. East: Pr ices for dry buttermilk are higher on the bottom of the range. A few plants in the region are redirecting butterfat into cheese products instead of churning. Condensed buttermilk is clearing through contract sales into Class II production, sidestepping dryer operations. Most dry buttermilk exchanges are made through contract sales, as very few spot trades take place in the market. Producers’ supplies of dry buttermilk are light to adequate. Prices for: Eastern and Central U.S., All First Sales, F.O.B., Conventional, and Edible Buttermilk Price Range ; $/LB: .7100 - .7900 Secondary Sourced Information: The NASS Dairy Products report noted U.S. dry buttermilk production during March 2018 totaled 12.3 million pounds, 25.4 percent higher than a year ago. Total U.S. dry buttermilk month-ending stocks for March were 25.9 million pounds, 5.0 percent below last year.

DRY BUTTERMILK - WEST In the western region, prices for dry buttermilk are flat on the range and the mostly price series. The market tone has steadied. Ice cream makers are taking on more condensed buttermilk in preparation for summer ice cream production. In addition, more time is being dedicated to drying condensed skim; as so, condensed buttermilk drying is limited. Nonetheless, current dry buttermilk stocks are adequate for most spot ordering. Sales are level both in the domestic and international markets.

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The April 2018 Dairy Market News monthly average for the West dry buttermilk mostly series is $0.7136 compared to $0.8425 a year ago.

Prices for: Western U.S., All First Sales, F.O.B., Conventional, and Edible Buttermilk Price Range ; $/LB: .6800 - .7800 Mostly Range - ; $/LB: .7000 - .7700 Secondary Sourced Information: The NASS Dairy Products report noted U.S. dry buttermilk production during March 2018 totaled 12.3 million pounds, 25.4 percent higher than a year ago, and 7.3 percent higher than the previous month. Total U.S. dry buttermilk month ending stocks for March were 25.9 million pounds, 5.0 percent below last year.

DRY WHOLE MILK - NATIONAL National dry whole milk f.o.b. spot prices are unchanged in line with Oceania, Europe, and South America WMP values. Spot trading activity is very light, compared to a few weeks ago. According to some processors, the demand from bakers in the cash market is good, but it looks like dry whole milk stocks are committed thru near futures contracts, at least for the rest of Q2. Production is intermittent in most processing plants. As so, inventories continue tight to cover immediate spot needs. The April 2018 Dairy Market News monthly average for the National price series for dry whole milk is $1.4905 compared to $1.4338 a year ago. Prices for: U.S., All First Sales, F.O.B., Conventional, and Edible Dry Whole Milk Price Range - 26% Butterfat; $/LB: 1.4500 - 1.6000 Secondary Sourced Information: The NASS Dairy Products report noted U.S. dry whole milk production during March 2018 totaled 21.6 million pounds, 92.6 percent higher from one year ago, and 11.0 percent higher than the previous month. Total U.S. dry whole milk month ending stocks for March were 46.1 million pounds, 106.7 percent above last year.


WHEY, WPC 34%, LACTOSE & CASEIN Prices represent carlot/trucklot quantities for domestic and export sales packaged in 25 kg. or 50 lb. bags, or totes, spray process, dollars per pound.

DRY WHEY — CENTRAL

Central region dry whey prices were mixed, as there were some volume trades in the low .20s, but a fair amount of spot transactions took place a little higher on the range. Whey inventories are markedly easier to manage of late, to the point where some producers have suggested increased demand has them delaying shipments in order to fulfill new, if not unexpected, orders. With schools on the verge of summer break and more milk expected to flow into cheese production, there are some questions regarding the longevity of the current bullish price trends. However, some expect dry whey to see a slow push northward in the near term. Animal feed whey prices slipped after a fairly steady trading week. The DMN monthly average of the mostly price series for Central dry whey during April was $0.2435, compared to $0.4900 a year ago. The monthly average of the range price series for Central animal feed whey during April was $0.1907, compared to $0.3900 a year ago. Prices for: Central U.S., All First Sales, F.O.B., Conventional, and Edible Dry Whey Price Range - Animal Feed; $/LB: .1750 - .2200 Prices for: Central U.S., All First Sales, F.O.B., Extra Grade & Grade A, Conventional, and Edible Dry Whey Price Range - Non-Hygroscopic; $/LB: .2000 - .3500 Mostly Range - Non-Hygroscopic; $/LB: .2250 - .2900 Secondary Sourced Information: The CME Group monthly average price for Extra Grade Whey during April was $0.3038. The NASS Dairy Products report noted U.S. total dry whey (Human) production for March 2018 was 86.5 million pounds, up 1.6 percent from a year ago. January-March 2018 U.S. total dry whey production totaled 267.9 million pounds, 8.6 percent above the same time span in 2017. The Central region produced 43.1 million pounds of U.S. human dry whey production in March, 9.8 percent higher than a year ago.

DRY WHEY — NORTHEAST Dry whey spot sale prices have increased in the Northeast as demand is currently outweighing available supplies. While dry whey production is stable, many inventories are short, and some manufacturers are not able to offer spot loads as regular contracted needs are being met. When spot supplies are offered, many market participants are willing to purchase loads at higher prices. Moreover, there are reports of market conditions firming. The April 2018 Dairy Market News monthly average for Northeast dry whey was $0.2711 compared to $0.4966 one year ago. Prices for: Eastern U.S., All First Sales, F.O.B., Extra Grade & Grade A, Conventional, and Edible Dry Whey Price Range - Non-Hygroscopic; $/LB: .2500 - .3350 Secondary Sourced Information: The CME Group price for dry whey on Wednesday closed at $0.3200, up $0.0050 compared to the previous Wednesday. DAIRY PRODUCTS: According to NASS, March 2018 U.S. human food dry whey production totaled 86.5 million pounds, 1.6 percent above a year ago, but 2.6 less than the previous month. In the Atlantic region the production of human food dry whey for March 2018 totaled 21.9 million pounds, 1.2 percent less than a year ago, but 13.5 percent more than last month.

DRY WHEY — WEST Western whey prices stepped higher at the top of the range and both ends of the mostly price series. Relatively strong demand has pulled inventories lower. Manufacturers report stocks are tight and production is mostly just keeping pace with buyer requests. A few processors report they are currently working to fulfill contractual obligations for other dry dairy products in lieu of making dry whey powder right now. Export interest has been strong; however, some industry contacts are watching currency exchange rates closely. The strengthening dollar compared to some other currencies could mean more headwinds for U.S. dry whey in international markets. The DMN monthly average of the mostly price series for West dry whey during April was $0.2678 compared to $0.2543 one month ago and $0.4925 a year ago. Prices for: Western U.S., All First Sales, F.O.B., Extra Grade & Grade A, Conventional, and Edible Dry Whey Price Range - Non-Hygroscopic; $/LB: .2300 - .3600 Mostly Range - Non-Hygroscopic; $/LB: .2600 - .3300 Secondary Sourced Information: NASS reports that March 2018 U.S. human dry whey production, 86.5 million pounds, is up 1.6 percent from a year ago, but down 2.6 percent from February 2018. The Western region produced 21.5 million pounds of human dry whey during March, down 9.6 percent from last year, and down 27.3 percent from last month. Month ending stocks for U.S. human dry whey, at 73.7 million pounds, are 2.4 percent lower than one year ago, and down 15.2 percent from February 2018. The Extra Grade Dry Whey price at the CME Group on Wednesday closed at $.3200, up $.0050 from a week ago. The CME Group monthly average price for dry whey during April was $.3038.

U.S. Dry Whey Exports. H.S. Code 0404104000(FAS)

2018 Exports % Change From

(Million Lb.) 1 Year Ago March Total 48.1 + 26 TOTAL, JAN - MAR 134.6 + 28 1 China 51.2 + 9 2 Philippines 10.8 + 101 3 Mexico 9.7 - 1 4 Japan 9.5 + 110 5 Canada 8.0 - 36

WHEY PROTEIN CONCENTRATE — CENTRASL AND WEST

Prices for whey protein concentrate moved higher at the bottom of the range and both ends of the mostly price series. Spot sale activity is increasing, as are many of the spot prices received. Manufacturers report principally tight inventories, especially for preferred brands. A few industry contacts say infant formula buyers may be working to approve additional suppliers to help them acquire the WPC34% needed. Demand has increased and some processors say they get regular inquiries from buyers looking to assure coverage. WPC34 production is steady. While the market tone for WPC34% is improving, some contacts note the weakness in WPC80% and WPI markets casts a long, dark shadow over the whole whey protein complex.


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WHEY, WPC 34%, LACTOSE & CASEIN Prices represent carlot/trucklot quantities for domestic and export sales packaged in 25 kg. or 50 lb. bags, or totes, spray process, dollars per pound.

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The April 2018 Dairy Market News average of the mostly price series for Central and West whey protein concentrate 34% was $0.7027, compared to $0.6960 one month ago and $0.9425 one year ago. Prices for: Central and Western U.S., All First Sales, F.O.B., Extra Grade, Conventional, and Edible Whey Protein Concentrate Price Range - 34% Protein; $/LB: .6800 - .9400 Mostly Range - 34% Protein; $/LB: .7000 - .7800 Secondary Sourced Information: According to the NASS Dairy Products report U.S. production of WPC (25.0-49.9% protein) during March 2018 totaled 14.3 million pounds, 10.3 percent lower than one year ago, but 5.9 percent higher than February. Year to date total WPC (25.0-49.9% protein) production through March is 44.0 million pounds, down 1.3 from January through March one year ago. Manufacturers’ end-of-month stocks for WPC (25.0-49.9% protein) totaled 23.1 million pounds, 2.3 percent lower than one year ago, and 10.2 percent less than February 2018.

U.S. WPC < 80% Exports, H.S. Code 0404100500(FAS)


(Million Lb.) 1 Year Ago March Total 37.0 + 47 TOTAL, JAN - MAR 97.2 + 21 1 China 47.7 + 19 2 Mexico 14.8 + 39 3 Canada 8.1 - 4 4 Indonesia 4.0 + 46 5 Philippines 3.9 - 8

LACTOSE — CENTRAL AND WEST

Lactose prices are mixed. A few remaining Q2 contract shipments and some spot sales reinstated a lower price at the bottom of the price range. However, spot activity is generally active and sale prices pushed the top of the mostly price series higher. A number of market participants note a steady to slightly firming market tone. Manufacturers report tight inventories, especially for desired brands and infant formula lactose. At this point, demand has been able to keep pace with production, but some processors stress a need for caution. They hold onto an apprehension that the lactose currently sold has been moving into brokers and traders’ warehouses without fully clearing the market. Lactose sold now may return later in the year, placing downward pressure on prices. In addition, the market bears point to demand for lactose used in standardization has been somewhat lacking, and early projections predict strong summer production of lactose from EU and U.S. manufacturers. The April 2018 Dairy Market News average of the mostly price series for Central and West lactose was $0.2333, compared to $0.2200 one month ago and $0.4038 one year ago. Prices for: Central and Western U.S., Spot Sales And Up 3 Month Contracts, F.O.B., Conventional, and Edible Lactose Price Range - Non Pharmaceutical; $/LB: .1800 - .3900 Mostly Range - Non Pharmaceutical; $/LB: .2200 - .2900

Secondary Sourced Information: NASS’s Dairy Products report shows U.S. lactose production during March 2018 totaled 98.9 million pounds, a 3.7 percent increase from one year ago, and 14.6 percent more than last month. Year to date lactose production through March is 280.0 million pounds, 2.9 percent more than a year ago. Month ending stocks, at 114.8 million pounds, are 7.8 percent lower than one year ago, and 2.0 percent less than February 2018.

U.S. Lactose Exports, H.S. Code 1702110000(FAS)


(Million Lb.) 1 Year Ago March Total 63.0 + 22 TOTAL, JAN - MAR 169.8 + 21 1 China 37.9 + 76 2 New Zealand 24.2 + 25 3 Mexico 24.1 -- 4 Japan 17.1 + 39 5 Indonesia 9.2 - 16

CASEIN - NATIONAL Casein prices are steady this week, both acid and rennet. The New Zealand milk production season ends in three weeks, so milk volumes are low. This results in little or no current casein production in that region. Europe milk volumes are increasing following delayed seasonal increases during recent unseasonably cold weather. Some casein production is occurring in that region. Customers hope for relaxed supplies, as most current production has already been committed. Most seasoned buyers are attuned to the seasonal aspects of casein, factoring in the two primary producing regions, so most have already secured supplies. Buyers now seeking to stock up on casein for any near term delivery may be having to look around quite actively to conclude a purchase. SPOT SALES AND UP TO 3 MONTH CONTRACTS. PRICES ARE F.O.B., U.S. WAREHOUSE FOR EDIBLE NONRESTRICTED AND VARY ACCORDING TO MESH SIZE AND QUALITY. RENNET: 2.3200 - 2.6900 ACID: 2.9500 - 3.2100

-6A-

DAIRY MARKET NEWS, MAY 7 - 11, 2018 -7- VOLUME 85, REPORT 19

U.S. Dairy Cow Slaughter (1000 head) under Federal Inspection

2018 WEEKLY 2018 2017 WEEKLY 2017 WEEK ENDING DAIRY COWS CUMULATIVE DAIRY COWS DAIRY COWS CUMULATIVE DAIRY COWS 04/21/2018 59.9 1,020.1 56.4 965.9 WEBSITE: http://www.ams.usda.gov/mnreports/sj_ls714.txt SOURCE: The slaughter data are gathered and tabulated in a cooperative effort by the Agricultural Marketing Service, The Food Safety and Inspection Service, and the National Agricultural Statistics Service, all of USDA.

CLASS III MILK PRICES (3.5% Butterfat)

YEAR JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2013 18.14 17.25 16.93 17.59 18.52 18.02 17.38 17.91 18.14 18.22 18.83 18.95 2014 21.15 23.35 23.33 24.31 22.57 21.36 21.60 22.25 24.60 23.82 21.94 17.82 2015 16.18 15.46 15.56 15.81 16.19 16.72 16.33 16.27 15.82 15.46 15.30 14.44 2016 13.72 13.80 13.74 13.63 12.76 13.22 15.24 16.91 16.39 14.82 16.76 17.40 2017 16.77 16.88 15.81 15.22 15.57 16.44 15.45 16.57 16.36 16.69 16.88 15.44

CLASS IV MILK PRCES (3.5% Butterfat)

YEAR JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2013 17.63 17.75 17.75 18.10 18.89 18.88 18.90 19.07 19.43 20.17 20.52 21.54 2014 22.29 23.46 23.66 23.34 22.65 23.13 23.78 23.89 22.58 21.35 18.21 16.70 2015 13.23 13.82 13.80 13.51 13.91 13.90 13.15 12.90 15.08 16.43 16.89 15.52 2016 13.31 13.49 12.74 12.68 13.09 13.77 14.84 14.65 14.25 13.66 13.76 14.97 2017 16.19 15.59 14.32 14.01 14.49 15.89 16.60 16.61 15.86 14.85 13.99 13.51

FEDERAL MILK ORDER CLASS PRICES FOR 2018 (3.5% Butterfat)

CLASS JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC I 1/ 15.44 14.25 13.36 14.10 14.44 II 14.11 13.44 13.88 14.03 III 14.00 13.40 14.22 14.47 IV 13.13 12.87 13.04 13.48

1/ S3p03ific order differentials to be added to this base price can be found by going to: www.ams.usda.gov/DairyMarketingStatistics; then select “Prices”; and then select “Principal Pricing Points.”

$12.00

$13.00

$14.00

$15.00

$16.00

$17.00

$18.00

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Class I201620172018

$12.00

$13.00

$14.00

$15.00

$16.00

$17.00

$18.00


Class II 201620172018

$12.00

$13.00

$14.00

$15.00

$16.00

$17.00

$18.00


Class III201620172018

$12.00

$13.00

$14.00

$15.00

$16.00

$17.00


Class IV 201620172018


INTERNATIONAL DAIRY MARKET NEWS - EUROPE Information gathered April 30 - May 11, 2018

Prices are U.S. $/MT, F.O.B. port. Information gathered for this report is from trades, offers to sell, and secondary data. This bi-weekly report may not always contain the same products and/or regions. Future reports may be included or withdrawn depending on availability of information. MT = metric ton = 2,204.6 pounds.

-8-

WESTERN EUROPE: Warmer weather across the major dairy pro-duction regions of Western Europe has brought about good forage growth and accelerated seasonal milk production increases. Although temperatures until recent weeks have been cool, grass growth is al-ready very lush and plentiful. Poor March weather, with lingering winter conditions, slowed milk production increases. The current won-derful spring weather is, thus, especially welcome to the growing Western European dairy industry. In fact, since mid to late April, many plant operators report that milk intakes have been increasing at a welcome pace. For the cheese industry in Western Europe, more milk is very wel-come. Much current cheese production is sold before being made. Potential customers are being turned away. Even with higher produc-tion volumes, cheese inventories are tight. Cheese demand is from within the EU as well as from export customers. While many buyers are eager to finalize contracts, some sellers are being cautious so they do not overcommit the amount of cheese that can be delivered. Expec-tations for milk production increases in coming months, above levels a year ago, result in optimism that cheese production will also be in-creased from last year’s volumes. In fact, it is expected that most dairy products will be produced in greater volumes than a year earlier. BUTTER/BUTTEROIL: Butter prices in Europe firmed at the bot-tom of the price range but slightly backed off at the top. The price range significantly narrowed with the magnitude of firming at the bottom of the range. Prices are well higher than one year ago and near the highest of 2018. Butteroil prices are steady to higher. Butteroil prices are higher than one year ago. Demand for butter in much of Western Europe remains strong. Germany and France, in particular, continue to enjoy asparagus and that one factor notches butter sales up. Various holidays during May in Germany also contribute to current strong demand for butter. Ex-port demand also remains quite firm. This includes exports to other regions, but also butter shipped from Germany and France to Southern European destinations. Manufacturers would like to make more butter but are restrained by cream availability. Nevertheless, buyers and sellers are approaching Q3 and Q4 contracting cautiously, due to uncertainty as to how much butter will be made then. Some buyers are reluctantly beginning to accept at least the concept that butter prices are unlikely to move down to any significant extent. If 2017 is any indicator, butter prices peaked in September. However, that growing acceptance that price weakness is unlikely has yet to translate into finalizing many contracts for butter later in the year. Most manufacturers feel confident to hold out for firmer contract prices 82% BUTTERFAT: 6,800 - 7,125 99% BUTTERFAT: 6,500 - 7,650 Secondary Sourced Information: At GDT Event 211 on May 1, the butter all contracts price, $5,647, is steady. The June contract, $5,715, increased 1.0 percent. SKIM MILK POWDER (SMP): Skim milk powder prices in Western Europe firmed slightly. Prices are weaker than one year ago, but the price range is equal to, or greater than, any period of 2018. Germany tends to show the highest prices. Germany also has a range with some pricing lower than Netherlands. Most current production is committed. Demand has been quite good, with comparatively lower availability of new production. Small amounts are available for spot sales. Especially with price firming in mind, many buyers are negotiating Q3 and even Q4 contracts willing-ly, hoping to lock in pricing certainty. Yet manufacturers are holding firm for strong Q3 and Q4 contract prices.

Two factors are in play. First, manufacturers are pleasantly sur-prised (and buyers just surprised) by continuing price strength, not-withstanding the previous sense that common wisdom expected inter-vention stocks would eviscerate 2018 pricing. Second, there is more than usual uncertainty about what to expect for SMP production during the second half of 2018. This has led to slowing of finalizing contracts. 1.25% BUTTERFAT: 1,675 - 1,800 SWEET WHEY POWDER: Sweet whey prices in Europe are steady to slightly lower. During all of 2018, upper range pricing has only varied within a $75 range. Whey pricing has been quite stable. Current pric-ing is below prices one year ago. The strength of cheese production in Europe has contributed to more whey availability. That corresponds with what is viewed as more demand from customers, leading to the general current market stabil-ity. Neither buyers nor sellers express or exhibit apprehension of any significant changes in the market dynamics in the near term. NONHYGROSCOPIC: 900 - 925 WHOLE MILK POWDER (WMP): Whole milk powder prices in Eu-rope are steady to slightly higher. That keeps the price range equal to or higher than any other range this year. WMP prices are higher than one year ago. European WMP pricing is slightly higher than in Ocean-ia at each end of the price range. Internal EU buying interest is described as constant, sometimes as persistent. Available supplies are tighter than might be desired, but buyers can generally secure WMP fairly readily. Export demand is also brisk. That is expected to continue, or maybe intensify, with New Zea-land as a major global supplier of WMP moving toward the low point of the milk production year. Much current production in Europe is committed so this will also help to maintain strong pricing at this time. Contracts for Q3 are actively being concluded. Most buyers are very motivated to secure commitments of WMP. 26% BUTTERFAT: 3,250 - 3,375 EASTERN OVERVIEW: Milk production in Poland for the twelve months March 2017-February 2018, compared with one year earlier, increased 4.8 percent according to Eurostat. January-February 2018 milk production was up 3.3 percent over one year earlier according to CLAL.


INTERNATIONAL DAIRY MARKET NEWS - OCEANIA Information gathered April 30 - May 11, 2018


AUSTRALIA: Australia is nearing the end of a milk season with de-cently increased milk production. July 2017-March 2018 milk produc-tion in Australia is up 3.4 percent over one year earlier. Average milk-fat in Australia March 2018, 4.36 percent, is up 0.5 percent from March 2017. Average protein, 3.44 percent, is up 0.3 percent from March 2017. Breakdown by state showing July-March production, and percent change production year-to-date, is shown in the table below.

Australia Milk Production

July 2017-March 2018 Million % Change YTD Regional Share

Liters From 1 Year Ago Milk Production New South Wales 870.9 +0.6 11.9 Victoria 4,742.4 +3.8 64.8 Queensland 304.7 -5.5 4.2 South Australia 405.5 +8.8 5.5 Western Australia 291.2 +1.3 4.0 Tasmania 707.7 6.6 9.7 Australia (Total) 7,322.5 3.4 Data from Dairy Australia

Demand for hay in Northern Australia is higher. Seasonally cooler temperatures and nearing the end of the irrigation season are factors. Some concern has been expressed as to whether supplies will be ade-quate for demand in coming months. Carryover stocks in Southern Australia are running low. New season hay is being snapped up as a result. This is particularly true in New South Wales and Northern Vic-toria. Previous persistent rainfall has led to some concerns with mold. Western Australia reports good carryover hay stocks. Producers are competing with exporters for that hay, however. That has led to some price firming. NEW ZEALAND: New Zealand is weeks away from the technical end of the current milk production season, the end of May. However, typically June is the lowest milk production month of the year. With such low current milk volumes relative to annual totals, little can happen any longer to alter the seasonal results. While it seems that seasonal production will be lower than the last season, recent better than expected milk production will boost the seasonal total from expectations several months ago. Improve-ment in pasture conditions later in the season are credited with the better results. A major cooperative in New Zealand has revised its seasonal projections for production of its members to near 3 percent below year ago. This is an improvement from early in the season. Other projections for all New Zealand milk producers are slightly better, but still below year earlier. The explanation for the variance may be that the cooperatives’ members tend to be more concentrat-ed on the North Island, so adding in expected results from the South Island accounts for the difference. Secondary Source Information: At the May 1 GDT event #211, all contracts prices ranged from 10.5 percent lower to 3.6 percent higher than the prior event across categories. The all contracts price averages (US$ per MT) and percent changes from the previous averages are: anhydrous milk fat, $6,032, -1.9 per-cent; butter, $5,647, 0.0 percent; buttermilk powder, $1,990, +0.5 percent; cheddar cheese, $4,024, +3.1 percent; lactose, $616, +0.6 per-

cent; rennet casein, $5,177; -10.5 percent; skim milk powder, $1,999, +3.6 percent; and whole milk powder, $3,231, -1.5 percent.

BUTTER: Butter prices in Oceania are steady to higher, but still lower than pricing in Western Europe. However, Oceania prices are higher than one year ago in Oceania. Butter churning schedules continue to edge lower. Australia has higher milk volumes than last year, which is helping move cream to churns. This is not so much the case in New Zealand. Butter supplies in the region have tightened as seasonal milk pro-duction has moved lower. This reflects both lower milk volumes, and lower fat components. New Zealand butter is expected to remain tight in the coming weeks. Domestic butter demand is good in Australia, which is contributing tightness of butter supplies in the region. 82% BUTTERFAT: 5,625 - 5,775 Secondary Source Information: At GDT Event 211 on May 1, the butter all contracts price, $5,647, is steady. The June contract, $5,715, increased 1.0 percent. SKIM MILK POWDER (SMP): Skim milk powder prices in Oceania firmed, now tied or higher than any period of 2018. Current low range pricing equals one year ago while upper range pricing is above the level one year ago. At this time of year, as the production season nears an end, SMP production is at a lower ebb than during much of the year. Manufactur-ers tend to have sufficient inventories to meet demand. Firming prices reflect demand for current production from the region at this time when less SMP is being manufactured. This year manufacturers are generally pleased to sell what they can to capture the good prevailing prices, ra-ther than carry stocks ahead to the next fiscal year - as has occurred in some past years when prices were weaker. Current demand is keeping sales moving. 1.25% BUTTERFAT: 1,975 - 2,100 Secondary Source Information: At GDT Event 211 on May 1, the cheddar all contracts price, $4,024, increased 3.1 percent. The June contract, $3,984, increased 1.5 percent. CHEDDAR CHEESE: Cheddar cheese prices in Oceania firmed this week, reaching a 2018 peak. Current prices are well above the range one year ago. Cheddar continues to bring strong returns. While whole milk pow-der has a strong pull for milk in the region, especially during seasonally low production, the importance of reliably supplying good cheese to-customers keeps interest in cheesemaking also a very high priority. Cheese plants are actively seeking out milk to keep volumes up as much as they can. Many cheese makers would like to have more milk available, but don’t, so stocks are being drawn down to meet obliga-tions. This is also a factor helping to keep prices firming.

CONTINUED ON PAGE 8B

- 8A -


INTERNATIONAL DAIRY MARKET NEWS - OCEANIA Information gathered April 30 - May 11, 2018


CONTINUED FROM PAGE 8A 39% MAXIMUM MOISTURE: 3,925 - 4,000 Secondary Sourced Information: At GDT Event 211 on May 1, the cheddar all contracts price, $4,024, increased 3.1 percent. The June contract, $3,984, increased 1.5 percent. WHOLE MILK POWDER (WMP): Whole milk powder prices in Oceania are slightly lower than the last reporting period, but slightly higher than one year ago. Seasonally lower milk production accentuates whole milk powder as often the priority product for dairy processing at this time of the year. Some manufacturers are working to keep pace with contract obli-gations. As always, maintaining a reputation for being a reliable source for WMP is vitally important in the region. That is leading to milk being given a high priority for use in WMP production. 26% BUTTERFAT: 3,175 - 3,350 Secondary Source Information: At GDT Event 211 on May 1, the WMP all contracts price, $3,231, decreased 1.5 percent. The June contract, $3,246, decreased 1.4 per-cent.

Exchange rates for selected foreign currencies: May 7, 2018

.0456 Argentina Peso .0149 India Rupee .7515 Australian Dollar .0092 Japan yen .2816 Brazil Real .0514 Mexican Peso .7762 Canadian Dollar .7016 New Zealand Dollar .0016 Chile Peso .2798 Poland Zloty 1.1923 Euro .0343 Uruguay Peso Conversion example: To compare the value of 1 US Dollar to Mexican Pesos: (1/.0514) = 19.4553 Mexican Pesos. Source: "Wall Street Jour-nal"

- 8B -

DAIRY MARKET NEWS, MAY 7 - 11, 2018 -8C- VOLUME 85, REPORT 19

INTERNATIONAL DAIRY MARKET NEWS - SOUTH AMERICA

Information gathered April 30 - May 11, 2018 Prices are U.S. $/MT, F.O.B. port. Information gathered for this report is from trades, offers to sell, and secondary data. This bi-weekly report may not always contain the same products and/or regions. Future reports may be included or withdrawn depending on availability of information. MT = metric ton = 2,204.6 pounds.

SOUTH AMERICA OVERVIEW: During the past two weeks, wet-ness persisted in Argentina, slowing summer crop harvests but improv-ing pasture conditions in many dairy farms throughout the main dairy states of the country; Córdoba, Entre Rios and Buenos Aires. Farm milk production is steadily improving, which is typical as this time of the fall season. According to some contacts, the percentage of fat in the milk is at high seasonal levels. Milk requests from bottlers are strong as several retail outlets are restocking shelves. At this point, milk/cream supplies are adequate for cheese, butter, yogurt and milk caramel manufacturing. In Uruguay, milk output is up, following seasonal patterns. Climate conditions in Uruguay have been favorable, adding comfort to the dairy herds. This week, the Minister of Agriculture of the country re-ported the creation of a guarantee fund for dairy producer debts for an amount of $36 million. According to some industry participants, the total debt in the Uruguayan dairy industry could reach around $500 million, including milk producers and manufacturers. It is expected that this new fund will alleviate the high level of debt of some dairy producers throughout the country. In Brazil, farm milk production has slightly improved, as climate conditions have been stable across the main dairy basins. However, farm gate prices continue to be relatively high according to some pro-cessors. It is important to remember that during the first quarter of the previous year, Brazilian milk production was higher and farm prices fell. These factors discouraged the productivity of several farmers, while others left the business and sold their livestock to the meat mar-ket. Back to the present, milk/cream intakes are less than sufficient to satisfy all manufacturing needs. Consequently, compared to one month ago, dairy imports mainly from Uruguay and Argentina are very ac-tive. The milk butterfat supply is boosting cream premiums and com-petition among processors. Meanwhile, the cheese market seems to be balanced for the time being. SKIM MILK POWDER (SMP): F.O.B. port export prices for skim milk powder (SMP) are higher in the Southern Cone of South Ameri-ca, following upward moves in some offshore auctions. The SMP val-ues of South America remain far above the rest of the world, which are largely attributed to the Mercosur export tariff of 28 percent. Unlike one month ago, SMP processing has been irregular as condensed skim milk intakes are limited throughout the region. So far, Brazil, Russia and Algeria continue to be the main destinations of the Uruguay/Argentina SMP exports. 1.25% BUTTERFAT: 2,350 - 2,650 Secondary Sourced Information: According to the Brazilian government, SMP imports from January to April 2018 totaled 7.1 million tons, down 37 percent from the same period in 2017. From this total, imports from Argentina, Uruguay, and the United States represented 50, 20, and 9 percent, respectively. At the GDT Event 211 on May 1, skim milk powder (SMP) prices across all contract periods averaged $1,999 per metric ton, up 3.6 per-cent from the last event. WHOLE MILK POWDER (WMP): In the Southern Cone of South America, whole milk (WMP) free on board export prices adjusted low-er, reflecting some sign of weakness as WMP supply is above the im-mediate interest from buyers. Unlike a couple of weeks ago, WMP production is more active to clear moderate to heavy condensed milk intakes, mainly from Argentina and Uruguay. Therefore, inventories are getting more accessible in the market. The bottom price of the range is reflecting some extra-Mercosur transactions principally to

Algeria and Russia, while the top is mirroring active WMP exports to Brazil mainly from Argentina and Uruguay. 26% BUTTERFAT: 3,000 - 3,250 Secondary Sourced Information: According to the Brazilian government, WMP imports from Janu-ary to April 2018 totaled 16.1 million tons, down 51 percent from the same period in 2017. From this total, imports from Argentina, Uru-guay, and Chile represented 50, 43, and 3 percent, respectively. At the GDT Event 211 on May 1, whole milk powder (WMP) pric-es across all contract periods averaged $3,231 per metric ton, down 1.5 percent from the last event.

DAIRY MARKET NEWS, MAY 7 - 11, 2018 -8D VOLUME 85, REPORT 19

INTERNATIONAL DAIRY MARKET NEWS

Global/Dairy Trading (gDT) Event 211 Recap - May 1, 2018

US$/MT Contract 1 Contract 2 Contract 3 Contract 4 Contract 5 Contract 6 All Contracts

Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18

Anhydrous Milk Fat $6,060 -0.4% $5,948 -2.2% $6,166 -1.3% $6,255 0.3% $5,942 -5.0% n.a. $6,032 -1.9%

Butter $5,715 1.0% $5,740 1.1% $5,635 -0.2% $5,564 -1.5% $5,590 -0.4% n.a. $5,647 0.0%

Buttermilk Powder $2,025 0.5% $1,971 0.3% $2,000 n.a $2,000 0.8% $2,010 2.6% n.a. $1,990 0.5%

Cheddar $3,984 1.5% $3,992 3.8% n.a. $4,212 n.a. $3,918 3.8% n.a. $4,024 3.1%

Lactose n.a. $616 0.6% n.a n.a. n.a. n.a. $616 0.6%

Rennet Casein $5,120 -11.6% $5,115 -11.0% $5,161 -11.2% $5,305 -10.1% $5,293 -8.2% n.a. $5,177 -10.5%

Skim Milk Powder $2,059 3.3% $2,011 4.8% $2,042 5.9% $1,967 0.3% $1,927 -1.5% n.a. $1,999 3.6%

Whole Milk Powder $3,246 -1.4% $3,197 -2.4% $3,345 1.3% $3,269 -1.5% $3,258 -2.5% $3,285 -0.8% $3,231 -1.5%

Average price US$/MT and % change in indices from previous event.

Global/Dairy Trading (gDT) Event 211 Recap - May 1, 2018

US$/Pound Contract 1 Contract 2 Contract 3 Contract 4 Contract 5 Contract 6 All Contracts

Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18

Anhydrous Milk Fat $2.7488 -0.4% $2.6980 -2.2% $2.7969 -1.3% $2.8372 0.3% $2.6953 -5.0% n.a. $2.7361 -1.9%

Butter $2.5923 1.0% $2.6036 1.1% $2.5560 -0.2% $2.5238 -1.5% $2.5356 -0.4% n.a. $2.5615 0.0%

Buttermilk Powder $0.9185 0.5% $0.8940 0.3% $0.9072 n.a $0.9072 0.8% $0.9117 2.6% n.a. $0.9027 0.5%

Cheddar $1.8071 1.5% $1.8108 3.8% n.a. $1.9106 n.a. $1.7772 3.8% n.a. $1.8253 3.1%

Lactose n.a. $0.2794 0.6% n.a n.a. n.a. n.a. $0.2794 0.6%

Rennet Casein $2.3224 -11.6% $2.3201 -11.0% $2.3410 -11.2% $2.4063 -10.1% $2.4009 -8.2% n.a. $2.3483 -10.5%

Skim Milk Powder $0.9340 3.3% $0.9122 4.8% $0.9262 5.9% $0.8922 0.3% $0.8741 -1.5% n.a. $0.9067 3.6%

Whole Milk Powder $1.4724 -1.4% $1.4501 -2.4% $1.5173 1.3% $1.4828 -1.5% $1.4778 -2.5% $1.4901 -0.8% $1.4656 -1.5%

Average price US$/pound and % change from previous event.

DAIRY MARKET NEWS, MAY 7 - 11, 2018 -9- VOLUME 85, REPORT 19 CME GROUP, INC FUTURES

Selected settling prices Month 4/27 4/30 5/01 5/02 5/03 5/04 5/07 5/08 5/09 5/10 III MILK FUTURES (Pit-Traded) ($/cwt) APR 18 14.51 14.50 14.51 14.47 MAY 18 15.07 15.18 15.23 15.23 15.12 15.11 15.28 15.25 15.27 15.24 JUN 18 15.55 15.69 15.69 15.68 15.59 15.56 15.77 15.86 16.03 15.83 JUL 18 16.01 16.09 16.05 16.06 15.96 15.98 16.14 16.18 16.26 16.06 AUG 18 16.33 16.41 16.39 16.38 16.30 16.32 16.46 16.52 16.64 16.40 SEP 18 16.55 16.60 16.57 16.61 16.52 16.57 16.69 16.74 16.86 16.68 OCT 18 16.56 16.59 16.56 16.63 16.57 16.57 16.72 16.74 16.83 16.65 NOV 18 16.46 16.48 16.41 16.47 16.40 16.43 16.55 16.59 16.66 16.52 DEC 18 16.38 16.38 16.36 16.40 16.33 16.34 16.44 16.47 16.54 16.41 JAN 19 16.05 16.04 16.04 16.06 16.00 16.07 16.12 16.15 16.19 16.13 CLASS IV MILK FUTURES (Pit-Traded) ($/cwt) APR 18 13.55 13.55 13.55 13.48 MAY 18 14.72 14.73 14.73 14.60 14.59 14.59 14.59 14.56 14.35 14.45 JUN 18 15.39 15.43 15.43 15.19 15.19 15.21 15.22 15.22 15.22 15.22 JUL 18 15.72 15.79 15.75 15.48 15.48 15.51 15.57 15.57 15.42 15.46 CASH SETTLED BUTTER FUTURES (Electronic-Traded) (¢/lb) APR 18 225.40 225.10 225.10 224.52 MAY 18 239.25 239.28 238.60 236.00 234.78 233.68 232.30 232.50 232.00 232.53 JUN 18 244.00 244.33 244.00 241.50 239.73 239.00 236.50 237.00 240.25 239.00 JUL 18 246.98 246.28 245.00 242.78 242.60 242.25 239.00 240.00 243.25 240.50 NONFAT DRY MILK FUTURES (Pit-Traded) (¢/lb) APR 18 71.50 71.50 71.50 71.34 MAY 18 78.78 78.48 78.45 78.25 78.60 79.25 78.75 78.58 77.75 78.60 JUN 18 85.00 85.00 83.08 82.50 83.20 85.50 86.98 85.68 83.83 85.00 JUL 18 86.80 87.55 85.60 84.75 86.03 87.73 89.05 88.00 86.25 86.88 WHEY (Electronic-Traded) (¢/lb) APR 18 25.90 25.90 25.90 25.92 MAY 18 28.38 28.43 28.50 28.50 28.35 28.23 28.23 28.00 27.50 27.25 JUN 18 31.25 31.25 31.18 31.18 30.03 30.03 30.03 29.68 29.58 29.00 JUL 18 33.55 33.55 33.55 33.30 33.08 33.05 33.00 32.85 32.50 31.78 CHEESE CSC (Electronic-Traded) ($/lb) APR 18 1.58 1.58 1.58 1.57 MAY 18 1.61 1.62 1.63 1.63 1.62 1.63 1.64 1.64 1.65 1.64 JUN 18 1.64 1.66 1.66 1.66 1.66 1.65 1.68 1.69 1.70 1.69 JUL 18 1.68 1.69 1.69 1.69 1.68 1.68 1.70 1.71 1.71 1.70 AUG 18 1.70 1.71 1.71 1.72 1.71 1.71 1.72 1.73 1.74 1.72 Source: http://www.cmegroup.com/market-data/daily-bulletin.html

DAIRY MARKET NEWS, APRIL 7 - 11, 2018 -10- VOLUME 85, REPORT 19 DAIRY MARKET NEWS INTERNATIONAL MONTHLY SUMMARY AND AVERAGES FOR APRIL 20181 (UNLESS OTHERWISE NOTED, PRICES ARE U.S.DOLLARS/METRIC TON, F.O.B. PORT) -------------------------------------------------------------------------------------------------------------- ::REPORT NUMBER 15 ::REPORT NUMBER 17 ::REPORT NUMBER 19 :: 2018 * : 2017 * COMMODITY ::-----------------::-----------------::-----------------:: Monthly : Monthly :: APR 2 - 13 :: APR 16 - 27 :: APR 30 :: Average : Average -------------------------------------------------------------------------------------------------------------- BUTTER (82% BUTTERFAT) -- OCEANIA :: 5475 - 5550 :: 5625 - 5700 :: 5625 - 5775 :: 5593 : 5106 -- WESTERN EUROPE :: 5925 - 6850 :: 6225 - 7175 :: 6800 - 7125 :: 6564 : 4819 BUTTEROIL (99% BUTTERFAT) -- WESTERN EUROPE :: 6900 - 7250 :: 6500 - 6825 :: 6500 - 7650 :: 6879 : 5431 CHEDDAR CHEESE (39% MAXIMUM MOISTURE) -- OCEANIA :: 3600 - 3850 :: 3775 - 3925 :: 3925 - 4000 :: 3796 : 3438 SKIM MILK POWDER (1.25% BUTTERFAT) -- OCEANIA :: 1875 - 1950 :: 1900 - 2000 :: 1975 - 2100 :: 1936 : 1969 -- SOUTH AMERICA :: 2200 - 2500 :: 2225 - 2525 :: 2350 - 2650 :: 2369 : 3038 -- WESTERN EUROPE :: 1525 - 1675 :: 1650 - 1775 :: 1675 - 1800 :: 1660 : 1881 WHEY POWDER (NONHYGROSCOPIC) -- WESTERN EUROPE :: 925 - 975 :: 900 - 950 :: 900 - 925 :: 936 : 1050 WHOLE MILK POWDER (26% BUTTERFAT) -- OCEANIA :: 3250 - 3350 :: 3275 - 3375 :: 3175 - 3350 :: 3310 : 3031 -- SOUTH AMERICA :: 3050 - 3350 :: 3150 - 3400 :: 3000 - 3250 :: 3232 : 3438 -- WESTERN EUROPE :: 3175 - 3350 :: 3250 - 3350 :: 3250 - 3375 :: 3283 : 2925 -------------------------------------------------------------------------------------------------------------- 1 Prices for all products are issued biweekly and represent a value for the entire biweekly period. Monthly averages are based on biweekly prices and are time-weighted according to the number of workdays in the month - Saturdays and Sundays excluded. No monthly average is computed if one or more biweekly prices are missing.


Consumer Price Index and Average Retail Prices for Selected Products, U.S. City Average 1

Consumer Price Index

Month

All Food Dairy Products Fresh Whole Milk Cheese Butter Meat, Poultry, Fish, and Eggs

CPI 2 Pct.

Chg 3 CPI 2

Pct. Chg 3

CPI 2 Pct.

Chg 3 CPI 2

Pct. Chg 3

CPI 2 Pct.

Chg 3 CPI 2

Pct. Chg 3

Feb 2018 252.3 1.4 216.4 -1.9 196.7 -4.4 228.5 -0.8 243.2 3.9 247.1 1.7

Mar 2018 252.4 1.3 216.5 -0.9 194.2 -5.1 229.7 0.8 239.1 0.6 249.5 2.1

Apr 2018 253.2 1.4 216.9 -0.4 194.9 -3.2 230.2 0.9 244.1 4.4 251.9 3.5

U.S. City Average Retail Prices

Month Whole Milk 4 Butter 5 Process Cheese 6 Natural Cheese 7 Ice Cream 8

2018 2017 2018 2017 2018 2017 2018 2017 2018 2017

(dollars) Feb 2.923 3.300 N/A N/A 4.064 4.293 5.082 4.967 4.670 4.870

Mar 2.903 3.315 N/A N/A 4.105 4.271 5.064 4.799 4.825 4.751

Apr 2.924 3.259 N/A N/A 4.034 4.352 5.030 4.794 4.709 4.659

N/A = Not available. 1 "CPI Detailed Report," "Consumer Prices: Energy and Food," BLS, U.S. Department of Labor. According to BLS, average prices are best used to measure the price level in a particular month. To measure price change over time, the CPI is more appropriate. 2 The standard reference base period for these indexes is 1982-1984 = 100. 3 Percent change over previous year. 4 Per gallon. 5 Per pound. Grade AA, salted, stick butter. 6 Per pound, any size and type of package. 7 Per pound, cheddar cheese in any size and type of package and variety (sharp, mild, smoked, etc.). 8 Per 1/2 gallon prepackaged regular.


May Supply and Demand Estimates Milk production for 2019 is forecast higher on gradual recovery in milk per cow. Cow numbers are expected to remain near 2018 levels. Commercial exports on both a fat and skim-solids basis are forecast higher than the previous year on robust global demand. Fat and skim-solids basis imports are unchanged from 2018. With stronger expected domestic and export demand, cheese, nonfat dry milk (NDM), and whey prices are forecast higher for 2019. Butter prices are forecast slightly lower. The Class III price is forecast higher on stronger cheese and whey prices. The Class IV price is forecast higher also as a stronger expected NDM price more than offsets the lower butter price. The 2019 all milk price is forecast at $16.25 to $17.25 per cwt, slightly higher than 2018. The 2018 milk production forecast is reduced from the previous month on lowered milk cow numbers and slow growth in milk per cow. Exports are raised from the previous month on both a fat and skim-solids basis on strong global demand. Imports are lowered on a fat and skim-solids basis. Cheese, butter, NDM and whey prices are raised from the previous month resulting in both Class III and Class IV prices being raised. The 2018 all milk price is increased to $16.20 to $16.70 per cwt.

U.S. Milk Supply and Use

Commodity 2017 2018 Projected 2019 Projected

Apr May Apr May (billion pounds) Milk Production 215.5 219.0 218.7 N/A 221.5 Farm Use 1.0 1.0 1.0 N/A 1.0 Fat Basis Supply Beginning Commercial Stocks 12.7 13.5 13.5 N/A 12.6 Marketings 214.5 218.0 217.7 N/A 220.5 Imports 6.0 5.6 5.5 N/A 5.5 Total Commercial Supply 233.2 237.1 236.6 N/A 238.6 Fat Basis Use Commercial Exports 9.3 9.6 9.9 N/A 10.2 Ending Commercial Stocks 13.5 12.9 12.6 N/A 11.8 CCC Donations 0.0 0.0 0.0 N/A 0.0 Domestic Commercial Use 210.4 214.7 214.2 N/A 216.6 Skim-Solid Basis Supply Beginning Commercial Stocks 9.5 11.8 11.8 N/A 11.0 Marketings 214.5 218.0 217.7 N/A 220.5 Imports 6.1 5.9 5.8 N/A 5.8 Total Commercial Supply 230.1 235.7 235.3 N/A 237.3 Skim-Solids Basis Use Commercial Exports 40.8 43.4 45.1 N/A 45.3 Ending Commercial Stocks 11.8 11.5 11.0 N/A 10.8 CCC Donations 0.0 0.0 0.0 N/A 0.0 Domestic Commercial Use 177.5 180.9 179.1 N/A 181.1

NOTE: Totals may not add due to rounding. Continued on page 13


May Milk Supply and Demand Estimates-cont’d

N/A = not available 1 Simple average of monthly prices calculated from AMS weekly average dairy product prices for class price computations. Details may be found by going to http://www.ams.usda.gov/rules-regulations/mmr/dmr; scroll down to Publications, National Dairy Products Sales Reports, and select Current Release & Archives.” 2 Annual and quarterly Class III and Class IV prices are the simple average of monthly minimum Federal order milk prices paid by regulated plants for milk used in the respective classes. All milk price is the simple average of monthly prices received by farmers for milk at average test. 3 Does not reflect any deductions from producers as authorized by legislation. 4 Projection. Source: U.S. Department of Agriculture. World Agricultural Outlook Board. World Agricultural Supply and Demand Estimates, WASDE-577, May 10, 2018. Approved by the Interagency Commodity Estimates Committee [members for Dairy are: Shayle Shagam, Chairperson, WAOB; Carolyn Liebrand, AMS; Paul Kiendl, FAS; Jerry Cessna, ERS; and Milton Madison, FSA].

U.S. Dairy Prices

Commodity 2017 2018 Projected 2019 Projected

Apr May Apr May (dollars per pound) Product Prices 1 Cheese 1.6344 1.550-1.600 1.600-1.650 N/A 1.585-1.685 Butter 2.3303 2.210-2.290 2.245-2.325 N/A 2.215-2.345 Nonfat Dry Milk 0.8666 0.700-0.740 0.740-0.780 N/A 0.745-0.815 Dry Whey 0.4437 0.240-0.270 0.255-0.285 N/A 0.285-0.315 (dollars per cwt) Milk Prices 2 Class III 16.17 14.20-14.70 14.80-15.30 N/A 14.80-15.80 Class IV 15.16 13.25-13.85 13.75-14.35 N/A 13.65-14.75 All Milk 3 17.63 15.60-16.10 16.20-16.70 N/A 16.25-17.25 Quarterly 2018 I 2018 II 4 2018 III 4 2018 IV 4 2019 I 4 (billion pounds) Milk Production 54.4 56.1 54.1 54.0 55.1 (dollars per cwt) All Milk Price 2, 3 15.67 15.90-16.20 16.45-17.05 16.95-17.85 16.25-17.25 Class III Price 2 13.87 14.80-15.10 15.45-16.05 15.20-16.10 14.45-15.45 Class IV Price 2 13.01 13.95-14.35 14.35-15.05 13.85-14.85 13.45-14.55


Final Class Prices by Order, April 2018

April 2018 Highlights Class Prices: The following are the April 2018 class prices under the Federal milk order pricing system and changes from the previous month: Class II: $14.03 (+$0.15), Class III: $14.47 (+$0.25), and Class IV: $13.48 (+$0.44).

Component Price Information: Under the Federal milk order pricing system, the butterfat price for April 2018 is $2.5113 per pound. Thus, the Class II butterfat price is $2.5183 per pound. The protein and other solids prices for April 2018 are $1.7810 and $0.0619 per pound, respectively. These component prices set the Class III skim milk price at $5.89 per cwt. The April 2018 Class IV skim milk price is $4.86, which is derived from the nonfat solids price of $0.5401 per pound. Product Price Averages: The product price averages for April 2018 are: butter: $2.2452, nonfat dry milk: $0.7134, cheese: $1.5737 and dry whey: $0.2592.

Final Class Prices for April 2018 Federal Milk Order Minimum Class Prices for Milk of 3.5 Percent Butterfat 1, 2

Federal Milk Order Marketing Area3

Order Number

April 2018 May 2018

Class I Class II Class III Class IV Class I

(dollars per cwt)

Northeast (Boston) * 001 17.35 14.03 14.47 13.48 17.69 Appalachian (Charlotte) * 005 17.50 14.03 14.47 13.48 17.84 Florida (Tampa) * 006 19.50 14.03 14.47 13.48 19.84 Southeast (Atlanta) * 007 17.90 14.03 14.47 13.48 18.24 Upper Midwest (Chicago) * 030 15.90 14.03 14.47 13.48 16.24 Central (Kansas City) * 032 16.10 14.03 14.47 13.48 16.44 Mideast (Cleveland) * 033 16.10 14.03 14.47 13.48 16.44 Pacific Northwest (Seattle) * 124 16.00 14.03 14.47 13.48 16.34 Southwest (Dallas) * 126 17.10 14.03 14.47 13.48 17.44 Arizona (Phoenix) 131 16.45 14.03 14.47 13.48 16.79 All-Market Average 16.99 14.03 14.47 13.48 17.33

1 To convert the Class I price per 100 pounds to the Class I price per gallon, divide by 11.63 - the approximate number of gallons in 100 pounds of milk. 2 The mandatory $0.20 per cwt processor assessment under the Fluid Milk Promotion Order is not included in the Class I prices shown on this table. 3 Names in parentheses are the major city in the principal pricing point of the markets. * Marketing Area footnotes: Class I prices at other cities are: Northeast (Boston): New York City, minus $0.10; Philadelphia, minus $0.20; Baltimore, minus $0.25, and Washington, DC, minus $0.25; Appalachian (Charlotte): Knoxville, minus $0.20; and Louisville, minus $1.10; Florida (Tampa): Orlando, same; Miami, plus $0.60; and Jacksonville, minus $0.40; Southeast (Atlanta): New Orleans, same; Memphis, minus $0.90; Nashville, minus $0.90; and Springfield, MO, minus $1.40; Upper Midwest (Chicago): Milwaukee, minus $0.05; and Minneapolis, minus $0.10; Central (Kansas City): Des Moines, minus $0.20; Omaha, minus $0.15; Oklahoma City, plus $0.60; St. Louis, same; and Denver, plus $0.55; Mideast (Cleveland): Indianapolis, same; Cincinnati, plus $0.20; Pittsburgh, plus $0.10; and Detroit, minus $0.20; Pacific Northwest (Seattle): Portland, same; and Spokane, same; Southwest (Dallas): Houston, plus $0.60; San Antonio, plus $0.45; Albuquerque, minus $0.65; and El Paso, minus $0.75. Report Contact: Randal Stoker, [email protected] or 202-690-1932.

DAIRY MARKET NEWS, MAY 7 - 11, 2018 -G1- VOLUME 85, REPORT 19

30

40

50

60

70

80

90

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Cheese Exports (various H.S. Codes)

2014 2015 2016 2017 2018

Million Pounds

GRAPH USDA, DMN; SOURCE USDA,FAS

0

5

10

15

20

25

30


U.S. Butter and Milkfat Exports (various H.S. Codes)

2013 2016 2015 2017 2018

Million Pounds

GRAPH, USDA, DMN; SOURCE, USDA,FAS


50

70

90

110

130

150

170


Monthly Nonfat Dry Milk Exports: H.S. Code 0402100000(FAS)

2014 2015 2016 2017 2018

Million Pounds


25

30

35

40

45

50

55

60

65


Monthly Lactose Exports: H.S. Code 1702110000(FAS)

2014 2015 2016 2017 2018

Million Pounds



20

25

30

35

40

45

50

55


Monthly Dry Whey Exports: H.S. Code 0404104000(FAS)

2014 2015 2016 2017 2018

Million Pounds


10

15

20

25

30

35

40


Monthly WPC <80% Exports: H.S. Code 0404100500(FAS)

2014 2015 2016 2017 2018

Million Pounds


1 -- Dairy Market News surveys nearly 150 retailers, comprising over 23,000 individual stores, with online weekly advertised features.

Dairy Market News Branch

AgriculturalMarketingService

National Retail Report-DairyWebsites: http://www.marketnews.usda.gov/mnp/da-home and http://www.ams.usda.gov/mnreports/dybretail.pdf

Volume 85- Number 19 Issued Weekly Friday, May 11, 2018

Advertised Prices for Dairy Products at Major Retail Supermarket Outlets ending during the period of 05/11/2018 to 05/17/2018

Both conventional and organic dairy advertisements decreased this week, with conventional ads 9 percent lower, and organic dairy ads 29 percent lower. Conventional ice cream in 48-64 ounce containers continues to be the most advertised dairy item. The weighted average price for 48-64 ounce containers of ice cream was $3.09, up 1 cent from last week. Half gallons of milk were the most advertised organic item and had an average price of $3.94, up 9 cents from the previous week.

The national weighted average advertised conventional milk price for half gallons is $2.43, up 46 cents from a week ago, while milk in one gallon bottles averaged $2.48, down 3 cents. The premium for organic to conventional half gallonbottled milk is $1.51. The U.S. average conventional one pound butter price is $3.13 this period, down 5 cents from a week ago. The one pound organic butter price is $6.29, an organic price premium of $3.16.

Total conventional cheese advertisements decreased 6 percent while organic cheese advertisements once again returned to the survey after a hiatus. The weighted average price of conventional 8 ounce block cheese was $2.26, compared to $2.99 for 8 ounce organic cheese blocks, a 73 cent organic premium. The weighted average price of conventional 8 ounce shred cheese was $2.18, and the price of organic 8 ounce cheese shreds was $3.54, an organic premium of $1.36.

Total conventional yogurt ads decreased by 12 percent, but organic yogurt ads increased by 27 percent. The weighted average advertised price for organic yogurt in 4-6 ounce containers is 88 cents, while conventional yogurt in 4-6 ounce containers averaged 50 cents for an organic premium of 38 cents.

Cheese Yogurt Ice cream Cream cheese Milk

Sto

res

with

Ads

0K

3K

6K

9K

12K

15K

18K

21K

05/11/2018 05/04/2018 04/27/2018

Top 5 Commodities Featured This Week

http://www.marketnews.usda.gov/mnp/da-home

http://www.ams.usda.gov/mnreports/dybretail.pdf

National Retail Report - Dairy Vol 85 - No. 19Friday, May 11, 2018 - Page 2

Wtd Avg - Simple weighted average

Butter, 6%

Cheese, 22%

Cottage cheese, 4%

Cream cheese, 8%

Flavored milk, 1%Ice cream, 20%

Milk, 4%

Sour cream, 7%

Yogurt, 21%

Percentage of Total Conventional Ads by Commodity

Butter, 1%

Cheese, 13%

Ice cream, 5%

Milk, 67%

Yogurt, 13%

Percentage of Total Organic Ads by Commodity



NATIONAL -- CONVENTIONAL DAIRY PRODUCTS

Commodity Type Pack Size

THIS PERIOD LAST WEEK LAST YEAR

StoresWith Ads

Wtd AvgPrice

StoresWith Ads

Wtd AvgPrice

StoresWith Ads

Wtd AvgPrice

Butter 1 # 4761 3.13 4325 3.18 2968 3.35

Cheese Natural Varieties 8 oz block 5031 2.26 5257 2.37 6361 2.25

Cheese Natural Varieties 1 # block 1644 4.04 1697 3.22 1494 3.37

Cheese Natural Varieties 2 # block 803 6.92 1137 6.56 1235 5.80

Cheese Natural Varieties 8 oz shred 6909 2.18 7578 2.38 9634 2.31

Cheese Natural Varieties 1 # shred 1794 3.98 1532 3.20 1352 3.35

Cottage cheese 16 oz 3037 1.92 4937 1.84 1013 1.90

Cream cheese 8 oz 6180 1.67 5923 1.65 4396 1.72

Flavored milk All fat tests half gallon 735 2.50 852 2.43 1352 2.11

Flavored milk All fat tests gallon 272 3.03 116 2.08 963 2.31

Ice cream 48-64oz 14820 3.09 11936 3.08 13064 3.06

Milk All fat tests half gallon 892 2.43 1676 1.97 836 1.54

Milk All fat tests gallon 1793 2.48 1572 2.51 2418 2.58

Sour cream 16 oz 5419 1.74 10384 1.64 4438 1.64

Yogurt Greek 4-6 oz 8126 .95 10254 1.01 13595 .99

Yogurt Greek 32 oz 1685 4.82 1135 4.42 1950 4.06

Yogurt Yogurt 4-6 oz 4987 .50 4395 .53 5729 .54

Yogurt Yogurt 32 oz 539 2.50 1691 2.23 1374 2.61

REGIONAL -- CONVENTIONAL DAIRY PRODUCTS


NORTHEAST U.S. SOUTHEAST U.S. MIDWEST U.S.

Price Range

Stores with Ads

Wtd AvgPrice

Price Range

Stores with Ads

Wtd AvgPrice

Price Range

Stores with Ads

Wtd AvgPrice

Butter 1 # 2.50-4.29 964 2.95 2.99-3.50 1737 3.21 2.49-3.50 987 2.91

Cheese Natural Varieties 8 oz block 1.88-3.29 2234 2.31 1.67-2.99 943 2.19 1.99-2.29 534 2.03

Cheese Natural Varieties 1 # block 3.99 135 3.99 2.99-4.99 861 4.84 2.49 348 2.49

Cheese Natural Varieties 2 # block 5.99 114 5.99 5.99 110 5.99

Cheese Natural Varieties 8 oz shred 1.77-3.00 2351 2.15 1.67-2.50 1940 2.04 1.99-2.50 644 2.11

Cheese Natural Varieties 1 # shred 3.29 304 3.29 2.99-4.99 861 4.84 2.49 348 2.49

Cottage cheese 16 oz 1.50-2.99 1373 2.13 2.00-2.99 492 2.43 0.79-1.88 766 1.32

Cream cheese 8 oz 1.50-2.99 889 1.66 0.99-2.50 3755 1.69 1.49-1.99 417 1.57

Flavored milk All fat tests half gallon 2.50 735 2.50

Flavored milk All fat tests gallon 3.99 62 3.99

Ice cream 48-64oz 1.69-4.99 3694 2.80 1.99-5.97 3137 2.90 1.99-4.99 2791 3.16

Milk All fat tests half gallon 2.50 735 2.50

Milk All fat tests gallon 2.49 118 2.49 1.99-2.99 266 2.79

Sour cream 16 oz 1.50-2.00 1651 1.89 0.99-2.00 698 1.65 0.79-2.00 1750 1.53

Yogurt Greek 4-6 oz 0.66-1.00 2920 .94 0.88-1.00 1665 .99 0.75-1.00 798 .96

Yogurt Greek 32 oz 3.50-6.99 1421 4.88 5.00 87 5.00





Price Range

Stores with Ads

Wtd AvgPrice

Price Range

Stores with Ads

Wtd AvgPrice

Price Range

Stores with Ads

Wtd AvgPrice

Yogurt Yogurt 4-6 oz 0.40-0.69 1251 .51 0.40-0.50 689 .46 0.38-0.70 1260 .54

Yogurt Yogurt 32 oz 2.49-2.50 422 2.50


SOUTH CENTRAL U.S. SOUTHWEST U.S. NORTHWEST U.S.

Price Range

Stores with Ads

Wtd AvgPrice

Price Range

Stores with Ads

Wtd AvgPrice

Price Range

Stores with Ads

Wtd AvgPrice

Butter 1 # 3.29-3.50 306 3.41 2.99-3.50 600 3.25 2.99 105 2.99

Cheese Natural Varieties 8 oz block 1.39-2.50 501 1.96 1.77-3.00 734 2.42

Cheese Natural Varieties 1 # block 3.99 133 3.99 3.50 62 3.50 2.99 105 2.99

Cheese Natural Varieties 2 # block 5.99 78 5.99 4.99-8.99 393 7.46 4.99 69 4.99

Cheese Natural Varieties 8 oz shred 1.39-2.99 1022 2.17 1.77-3.00 734 2.42 2.49 105 2.49

Cheese Natural Varieties 1 # shred 3.50-4.99 176 4.47 2.99 105 2.99

Cottage cheese 16 oz 2.00 176 2.00 1.49-1.79 230 1.57

Cream cheese 8 oz 1.50-2.00 592 1.77 0.99 244 .99 1.67-1.85 210 1.76

Flavored milk All fat tests gallon 2.50-2.99 210 2.75

Ice cream 48-64oz 2.39-5.50 2639 3.42 2.88-3.99 1758 3.31 1.99-3.99 690 3.00


Milk All fat tests gallon 1.77-2.99 444 2.24 1.99-2.99 744 2.42 2.50-2.99 210 2.75

Sour cream 16 oz 1.50-2.00 250 1.85 1.79-2.49 661 2.07 1.50-1.67 358 1.53

Yogurt Greek 4-6 oz 0.88-1.00 972 .96 0.79-1.00 1272 .92 0.75-1.00 406 .91

Yogurt Greek 32 oz 4.68 72 4.68 3.99 105 3.99

Yogurt Yogurt 4-6 oz 0.39-0.50 577 .41 0.40-0.60 926 .49 0.40-0.60 232 .50

Yogurt Yogurt 32 oz 2.50 55 2.50 2.50 62 2.50


ALASKA U.S. HAWAII U.S.

Price Range

Stores with Ads

Wtd AvgPrice

Price Range

Stores with Ads

Wtd AvgPrice

Butter 1 # 5.99 28 5.99 4.99 34 4.99

Cheese Natural Varieties 8 oz block 2.50-3.99 85 3.37

Cheese Natural Varieties 2 # block 6.99-13.99

39 12.02

Cheese Natural Varieties 8 oz shred 4.49 28 4.49 2.50-3.99 85 3.37

Cream cheese 8 oz 3.00-3.99 49 3.57 2.00 24 2.00

Ice cream 48-64oz 3.49-6.99 60 5.58 3.00-7.99 51 5.64


Milk All fat tests gallon 3.79 11 3.79

Sour cream 16 oz 2.00-2.50 51 2.26

Yogurt Greek 4-6 oz 1.25-1.67 39 1.55 0.99-1.49 54 1.24

Yogurt Yogurt 4-6 oz 1.20 28 1.20 0.79 24 .79

NATIONAL -- ORGANIC DAIRY PRODUCTS




THIS PERIOD LAST WEEK LAST YEAR

StoresWith Ads

Wtd AvgPrice

StoresWith Ads

Wtd AvgPrice

StoresWith Ads

Wtd AvgPrice

Butter 1 # 61 6.29 610 5.81 345 5.99

Cheese Natural Varieties 8 oz block 276 2.99

Cheese Natural Varieties 8 oz shred 300 3.54 119 3.50

Cottage cheese 16 oz 213 3.99 245 2.99

Cream cheese 8 oz 951 2.80

Ice cream 48-64oz 235 3.24 367 4.35

Milk All fat tests half gallon 1920 3.94 3183 3.85 2565 3.50

Milk All fat tests gallon 726 6.47 730 5.85 179 5.67

Milk All fat tests 8 oz UHT 252 1.11 228 1.00

Yogurt Greek 4-6 oz 114 1.00

Yogurt Yogurt 4-6 oz 114 .88 209 1.06 78 .88

Yogurt Yogurt 32 oz 425 3.85 214 3.00

REGIONAL -- ORGANIC DAIRY PRODUCTS



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Butter 1 # 6.29 61 6.29

Cheese Natural Varieties 8 oz shred 2.99 110 2.99

Milk All fat tests half gallon 3.99 280 3.99 3.50-4.49 518 3.99 3.99 528 3.99

Milk All fat tests gallon 7.99 147 7.99 4.99-6.99 275 5.43 6.99 213 6.99

Milk All fat tests 8 oz UHT 1.25 147 1.25

Yogurt Yogurt 32 oz 3.50 167 3.50



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Cheese Natural Varieties 8 oz block 2.99 210 2.99 2.99 66 2.99

Cheese Natural Varieties 8 oz shred 3.49 121 3.49 4.49 69 4.49

Ice cream 48-64oz 3.00 121 3.00 3.50 114 3.50

Milk All fat tests half gallon 2.99-3.99 231 3.63 3.99 200 3.99 2.50 105 2.50


Milk All fat tests 8 oz UHT 0.92 105 .92

Yogurt Yogurt 4-6 oz 0.88 114 .88





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Yogurt Yogurt 32 oz 3.25 72 3.25 3.51 117 3.51 5.89 69 5.89


ALASKA U.S. HAWAII U.S.

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Milk All fat tests half gallon 5.99-6.99 58 6.58


REGIONAL DEFINITIONS

As used in this report, regions include the following states:

NORTHEAST U.S. Connecticut, Delaware, Massachusetts, Maryland, Maine, New Hampshire, New jersey, New York, Pennsylvania, Rhode Island and Vermont

SOUTHEAST U.S. Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, Virginia and West VirginiaMIDWEST U.S. Iowa, Illinois, Indiana, Kentucky, Michigan, Minnesota, North Dakota, Nebraska, Ohio, South Dakota and WisconsinSOUTH CENTRAL U.S. Arkansas, Colorado, Kansas, Louisiana, Missouri, New Mexico, Oklahoma, and TexasSOUTHWEST U.S. Arizona, California, Nevada and UtahNORTHWEST U.S. Idaho, Montana, Oregon, Washington, and WyomingALASKA AlaskaHAWAII HawaiiNATIONAL Continental United States

USDA is an equal opportunity provider and employer

Dairy Market News United States Department of Agriculture

Agricultural Marketing Service Dairy Programs Market Information Branch

Volume 85, Report 19 May 11, 2018

GENERAL NUMBER (608) 422-8587 Elizabeth Frederick (608) 422-8587 [email protected] INTERN Al Yang (608) 422-8598 [email protected]

ORGANIC/ EAST Daniel Johnson (608) 422-8605 [email protected]

EAST Jessica Mueller (608) 422-8589 [email protected]

CENTRAL Israel Weber (608) 422-8601 [email protected]

SOUTHWEST/SOUTH AMERICA AJ (Angel José) Terán (608) 422-8593 Angel.Terá[email protected]

SOUTHWEST Florence Kone-Gonzalez (608) 422-8594 [email protected]

NORTHWEST/MOUNTAIN Mike Bandli (608) 422-8592 [email protected]

EUROPE & OCEANIA/ ORGANIC Eric Graf (608) 422-8590 [email protected]

NATIONAL SUPERVISOR

Janet Linder (608) 422-8588 [email protected]

BRANCH CHIEF

Butch Speth (608) 422-8586 [email protected]

INTERNET ADDRESS www.ams.usda.gov/market-news/dairy

MARKET NEWS PORTAL www.marketnews.usda.gov/mnp/da-home

RECORDED INFORMATION SYSTEM (608) 422-8602

FAX (608) 240-6689 ________________________ USDA, Dairy Market News 4600 American Parkway, STE 106 Madison, WI 53718-8334

Documents

DAIRY MARKET NEWS WEEK OF MAY 7 - 11, 2018 DAIRY … · attempting to price NDM off the futures curve. Low/medium NDM production is called strong or active in all regions. The dry