Tuesday’s Global Dairy Trade auction (GDT) saw its weighted average of products offered slip 0.4 percent, following a 0.2 percent slippage on August 20 and 2.6 percent on August 6. Sellers brought 87.5 million pounds of product to the market, up from 75.9 million in the last event and the highest since Nov. 20, 2018.

The losses were led by anhydrous milkfat, down 1.5 percent, which follows a 3.7 percent drop on August 20. Butter, interestingly was unchanged after falling 3.4 percent last time. Lactose was down 0.9 percent, Cheddar was off 0.8 percent, after advancing 0.8 percent in the last event, and whole milk powder was off 0.8 percent, following a 2.1 percent rise. Buttermilk powder was up 3.4 percent and rennet casein was up 4.6 percent

FC Stone equated the GDT 80 percent butterfat butter price to $1.7829 per pound U.S. CME butter closed Friday at $2.1725. GDT Cheddar cheese equated to $1.7357 per pound, down 1.4 cents from the last event and compares to Friday’s CME’s block Cheddar at $1.9975. GDT skim milk powder averaged $1.1338 per pound, and compares to $1.1239 last time. Whole milk powder averaged $1.3952, down from $1.4061. CME nonfat closed Friday at $1.0475 per pound.

The Agriculture Department announced the August Federal order Class III benchmark milk price at $17.60 per hundredweight, up a nickel from July, $2.65 above August 2018, and the highest Class III price since December 2014. It is also $2.54 above the August 2018 Class 4b cheese milk price in California.

Late Friday morning Class III futures portended a September price at $17.96; October, $17.70; November, $17.35; and December at $16.90, which would result in a 2019 average of $16.38, up from $14.61 in 2018 and $16.17 in 2017. The 2020 Class III peak was $17.13 in September.

The 2019 Class III average stands at $15.83, up from $14.44 at this time a year ago and compares to $16.09 in 2017.

The August Class IV price is $16.74, down 16 cents from July but $2.11 above a year ago and the highest August Class IV since 2014. Its eight month average stands at $16.19, up from $13.85 a year ago and $15.46 in 2017.

Matt Gould, editor and analyst of the Dairy and Food Market Analyst newsletter, pointed out in the Sept. 9 Dairy Radio Now broadcast that in the recent July Cold Storage report, we saw a second consecutive month that butter stocks counter-seasonally increased but “The July Dairy Products report showed us why.”

Butter output was up 6 percent from July 2018, he said, and output was only up 1.9 percent in June “so we had this huge increase in butter production and that resulted in more inventory. That was the major headline grabber in the Dairy Products report.”

US butter imports are strong due to the high CME price. Gould still believes they are not a major factor in the price though he admits “The Irish have been very successful at getting US consumers to buy their Kerrygold branded butter.”

Looking at the cow side of the ledger; the July cull price for beef and dairy combined averaged $67.00 per cwt., up $1.10 from June, 20 cents above July 2018, but $4.60 below the 2011 base average of $71.60 per cwt.

The Daily Dairy Report’s Sarina Sharp says “The Dairy Margin Coverage program’s national average income-over-feed margins reached $9.47 per cwt. in June, up 47 cents from May. Margins slipped 4 cents from June to July, as higher cash corn prices offset a 60 cent increase in the All-milk price. Despite larger milk checks, dairy producers are still strapped for cash,” she concludes.

Cheesemakers in the Midwest continue to report mostly positive sales, according to Dairy Market News. Food service orders increased, as many schools have returned. Cheese production is steady. Milk handlers suggest cheese producers are “somewhat satisfied” with their internally sourced milk supplies. Spot prices ranged 50 cents under to $1 over Class III. In week 36 last year, prices were $1 to $2 over, and in 2017 milk prices were discounted from $2 to $4 under Class. Hurricane Dorian which is affecting mostly the Southeastern portion of the country, is also keeping milk loads in the upper Midwest, says DMN.

Cooperatives Working Together (CWT) members accepted 24 offers of export assistance this week to help capture sales of 1.025 million pounds of Cheddar, Gouda and Monterey Jack cheese; 88,185 pounds of anhydrous milkfat, 485,017 pounds of whole milk powder, and 478,403 pounds of cream cheese.

The product is going to customers in Asia, Central and South America through February 2020. CWT’s 2019 exports now total 40.2 million pounds of American-type and Swiss cheeses, 277,782 pounds of anhydrous milkfat, 4.2 million pounds of butter (82 percent milkfat), 4.3 million pounds of cream cheese and 37.8 million pounds of whole milk powder. The products are going to 26 countries and are the equivalent of 783.5 million pounds of milk on a milkfat basis.

The views and opinions expressed in this column are those of the author and not necessarily those of Farm World. Readers with questions or comments for Lee Mielke may write to him in care of this publication.