Correspondent
MADISON
The gross price for milk shipped by Wisconsin dairy farmers in February will average close to $16.10 per hundred, according to a report early this week by the Wisconsin field office of the National Agricultural Statistics Service. This is 20 cents less than for January but $4.60 more than for February of 2009.
Across the U.S., the average gross price for February milk is also projected to drop by 20 cents to $15.90 per hundred. Every state except Minnesota, where the February price is also projected as $16.10, is expecting a drop from January to February, the report indicated.
Among other top milk production states, the projected prices for February include $14.50 per hundred in both California and Idaho, $15.50 in New Mexico, $16.40 in Texas, $16.70 in New York, $16.80 in Michigan and $17.70 in Pennsylvania.
A national Class I fluid milk base price of $14.34 per hundred has been announced for March. This is down by 50 cents from February but $4.91 or more than 50 percent higher than for March of 2009.
The Class III milk cash price for February will be announced March 5. It is likely to be close to the $14.28 per hundred which was still on the trading board in the futures market on March 3.
Starting in March, however, dairy farmers will see a drop of more than $1 per hundred in their milk prices because of the recent downward spiral on Cheddar cheese prices in the spot market on Chicago Mercantile Exchange. That trend continued on March 3.
Cheddar blocks dropped by another 2 cents per pound on Wednesday to close at $1.32 after six carload sales, an unfilled bid to buy and an uncovered offer to sell. Another 75 cents was sliced from the Cheddar barrel price to put it at $1.28 per pound following the sale of eight carloads and an unfilled bid to buy.
In response, the Class III milk futures were trading in red ink territory for all months of 2010 through noon on March 3. Prices dropped by as much as 25 cents per hundred, leaving them at $12.95 and $12.99 for March and April respectively; $13.08 for May; $13.87 for June; in the $14s for July and August; between $15.20 and $14.95 for September to December; in the $14s for the first half of 2011; and in the $15s for the latter half of 2011.
The only bright spot in the dairy product market is for AA butter, where the spot market price gained 50 cents on March 3 as the result of an unfilled bid to buy that put the closing price at $1.43 per pound. In the non-fat dry milk spot market, meanwhile, the Grade Extra price fell by 12 cents early this week to leave both it and Grade A at $1.12 per pound.
Based on the national all-milk average price of $15.90 per hundred, the milk to feed ratio for February is 2.38. This is a calculation which indicates the sale value of one pound of milk is the equivalent of the cost of 2.38 pounds of feed.
Feed prices used in the calculation for February were $3.45 per bushel for shelled corn (down 21 cents from January), $9.40 per bushel for soybeans (down 39 cents) and $111 per ton for baled alfalfa hay (down $2).
