Market News

Milk futures, cash cheese higher

In Class III trade at the Chicago Mercantile Exchange, milk futures were up, supported by follow through buying. November was $.18 higher at $15.69, December was up $.20 at $15.57, January was $.11 higher at $15.56, and February was up $.06 at $15.71.

Cash cheese was higher. Blocks were up $.075 at $1.73. The last unfilled bid was on one load at $1.73. Barrels were $.0475 higher at $1.5975. There were a total of eleven loads sold, ranging from a $1.555 to $1.60. The last unfilled bid was on one load at $1.58.

Butter was up $.02 at $1.925. There were six loads sold, ranging from $1.90 to $1.92. The last unfilled bids was on two loads at $1.925.

Nonfat dry milk was unchanged at $.855. The last unfilled bid was on one load at $.84.

The USDA says butter production remains active with plenty of available cream and a number of processors getting ready for the end of the year holidays. If the spot market has been any indication, demand is improving and retail orders for print butter are strong. There are reports of some manufacturers microfixing to lower stocks.

Midwestern cheese production is at a high level and the USDA says barrel inventories are a little heavy, blocks have a better balance of supply and demand. Western production is also at a high level with a lower supply of blocks, but still plenty of cheese available. Eastern supplies are called current with good demand for aged cheddar and mozzarella.

Midwestern milk production is higher with improving cow comfort levels in Southern parts of the region. Sales of Class I milk are steady in the Eastern part of the U.S., down in the Central, and trending higher in the Western. Spot milk prices in the Central are $1 to $1.50 higher than Class.

The USDA calls nonfat dry milk markets uncertain with fluctuating prices. Prices for the week were generally steady to a little lower and production is tied directly to manufacturing milk availability. Whey stocks are generally tight, but still mostly enough to meet manufacturers near term needs.

Over the course of the week, conventional dairy ads were down 4% and organic ads were up 22%. The average price spread between organic and conventional half gallons of milk is $1.78, down $.24 on the week.