April milk checks will be lower due to the drop in the Federal Order Class I “mover” based on last month’s dismal cheese losses on the Chicago Mercantile Exchange (CME), translating to lower prices on the NASS Survey.

The Announced Federal Order Class III milk price also ended lower for Marchh at $12.78—which is $1.50 below February—according to USDA’s price announcement on April 2. The U.S. All-Milk price for March is figured by USDA at $15.10, which is 80 cents below February’s All-Milk price across all Federal Orders.

Butterfat values did increase, however, due to strong butter prices, which have continued to gain in April up to the $1.50 mark last Friday. And nonfat dry milk increased to $1.2650/lb last week.

We're back on the see-saw... The April end-of-month checks may get a boost, and the May milk checks could improve... if the NASS Survey prices for April are able to quickly reflect the recent 11-day rally that added 24 cents per pound to the CME block cheese price. We’ll see how that works out, now that CME 'buyers' are off the market this week. Last week's run-up, after all, was mostly on unfilled bids.

After trending higher last week and topping $1.50/lb, cheese fell back to $1.4975/lb Friday (April 9); barrels were at $1.44/lb Friday. A lone offer on Monday (April 12) dropped the block price back to $1.47/lb and four loads of barrels traded at $1.42/lb.

Easy come, easy go...

According to USDA’s Dairy Market News, cheese production is increasing seasonally, along with seasonal milk production, but buying patterns have been mixed. Some interests are reportedly buying for storage as a hedge against higher prices later, and there was some increase noted in bulk cheese orders, though not enough to push over-time make schedules around the holiday.

Interestingly, the buyers who purchase at "weekly average" prices are showing "slow to fair interest," whereas the buyers who purchase at "monthly average" prices are reportedly showing "solid" buying interest.

The World Agricultural Supply and Demand Estimates released Friday, April 9, have lowered the All Milk price estimate for 2010 to $15.50-$15.95/cwt. They base this on a slower rate of herd reduction and lower U.S. dairy exports on a skim-solids basis. However, the report was compiled before the 20 to 25% increase in world powder prices on Fonterra's April auction and recent import and export data showing that total exports in the dairy and egg category--in dollars--are up $90 million (+34%) and total dairy and egg category imports--in dollars--are down $62 million (-21%).