For the first time this week, there was some movement in the cash cheese market on the Chicago Mercantile Exchange. Barrels held steady at $1.4925 but blocks moved a half-cent higher to $1.505 per pound. The Class III futures responded with solid increases especially through the next six months. The March 2010 contract went over $15.00.
Dairy Market News says Class I interest is steady to improved although demand for fluid milk is being hampered somewhat by schools closing temporarily because of the flu. The Southeast is still getting milk shipped in from the Midwest and the Southwest, Florida brought in 55 loads last week although that is down from the 90 loads the previous week.
There is growing concern about harvest delays across the Midwest and into the Northeast. USDA reports New England farmers expect to be short of hay and silage due to reduced yields caused by the wet conditions this year.
In the west, the fears are the latest CWT herd retirement round will take another chunk out of the western dairy herd, dairy processing plants are already limiting their run schedules because of reduced milk supplies.
The tight milk supply and Class I demand is really tightening the powder market. Not a lot of milk going to driers these days. Nonfat dry milk in the Central and East running mostly $1.25 to $1.40 per pound, in the West, $1.095 to $1.35. Skim Milk Powder in Australia and New Zealand is selling at $1.22 to $1.45 and Europe, of course, has dropped their export subsidy for SMP.
That three-month elevated support price for cheese and nonfat dry milk expires on Saturday, given the fact the base prices are well above the elevated support and Commodity Credit hasn’t purchased anything under the higher prices, it looks like the interim increase will be allowed to expire. Processors have until the end of December to deliver to the government under the higher prices.
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