Market News

Milk futures higher, cash dairy mixed

In Class III trade at the Chicago Mercantile Exchange, milk futures were higher on continued technical momentum and expectations for strong demand. December was up $.17 at $17.16, January was $.14 higher at $16.96, February was up $.18 at $16.98, and March was $.16 higher at $16.89.

Cash cheese was mixed. Blocks were up $.03 at $1.81. The last unfilled bid was on one load at $1.81. Barrels were down $.005 at $1.615. There were a total of six trades reported, one at $1.615, two at $1.62, and three at $1.6175. The last unfilled bid was on one load at $1.59. The last uncovered offer was for one load at $1.62.

Butter was $.0075 lower at $2.185. There were five loads sold, including one at $2.185 and two at $2.17. The last unfilled bid was on one load at $2.155. The last uncovered offer was for one load at $2.19.

Nonfat dry milk was $0.175 higher at $1.0075. There were six trades reported, four at $1.00, one at $1.0075, and one at $.99. The last unfilled bid was on one load at $1.005. The last uncovered offer was for two loads at $1.01.

The USDA says U.S. butter production was active the week after Thanksgiving. Cream availability was tighter because of Class II demand and some churners have actively been looking for spot loads. Stocks are above a year ago, but print supplies are being drawn down by strong retail demand.

Cheesemakers say milk supplies are readily available for production. Midwestern and Western manufacturers say demand from retail and food service is steady to strong ahead of the year-end holidays. Midwestern production is active and inventories for barrels and processing cheese are ample.

U.S. milk production is steady to rising in most areas and there’s plenty of milk for processing. Fluid milk demand is rising as schools come back from Thanksgiving. Export demand for cream is tightening supplies and raising demand.

At the retail level, conventional dairy ads were down 25% on the week, but organic ads were up 13%. The price spread between organic and conventional half gallons of milk is a $3.01 premium for organic.