Cash cheese barrels up .75 cents, blocks up .25 cents, butter increased 4.5 cents and nonfat dry milk went up as well on the Chicago Mercantile Exchange on Friday. The February Class III contract traded over $22 for a while before closing at $21.92.
For the week, cash cheese barrels up 4.25 cents, blocks increased 3 cents, cash butter up 19.75 cents per pound, Grade A nonfat dry milk increased 2.5 cents and Extra Grade ended up unchanged. Class III futures for January increased 44 cents, February jumped $1.70, the March contract is $1.27 higher, April added 75 cents and July is up 21 cents from last Friday.
Dairy Market News describes the cheese production as “mixed”, some manufacturers are increasing production to take advantage of the higher prices while others are backing-off for fear of getting stuck with some high-priced cheese. Milk production is trending higher across the country although the string of storms has made transportation a bit of a challenge in the Midwest and Northeast.
Milk production is strong in Western Europe thanks to mild weather and good prices. In November, production in France was up 3.8 percent compared to November of the previous year, the U.K. was 10.7 percent higher and Ireland was up 19.7 percent. Prices are such that producers are money-ahead to pay the over-quota levy. Eastern Europe production is 2 to 3 percent higher.
Meanwhile, a heat wave is pushing production lower in Australia, temperatures over 100 degrees Fahrenheit in Victoria, South Australia and New South Wales. However, the weather has been fine in New Zealand where production is running 6 percent-or-more above year-ago levels.
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