Market News

Milk futures lower, cash cheese higher

Class III milk futures at the Chicago Mercantile Exchange were down on demand concerns and follow through selling. September was $.05 lower at $16.15, October was down $.07 at $16.36, November was $.07 lower at $16.16, and December was down $.06 at $16.01.

Cash cheese blocks were $.03 higher at $1.54. Two loads were sold, one at $1.54 and one at $1.52. The last unfilled bid was on one load at $1.535. The last uncovered offer was for one load at $1.56. Barrels were up three at $1.52. Two loads were sold at $1.52. The last unfilled bid was on one load at $1.515. The last uncovered offer was for one load at $1.53.

Butter was $.0725 lower at $2.5075. 14 loads were sold, including two at $2.5075, three at $2.51, and three at $2.5325. The last unfilled bid was on one load at $2.5075. The last uncovered offer was for two loads at $2.525.

Nonfat dry milk was unchanged at $.8625. The last unfilled bid was on one load at $.8575. The last uncovered offer was for one load at $.87.

The USDA reports milk production over the past week in the Midwest was steady, with generally favorable weather conditions. Demand from schools is rising and cheese intakes were steady. Cream availability varies with lower Midwestern prices over the course of the week. Domestic butter demand is solid, with increasing demand for unsalted butter. Butter production is active in the central region and inventories are balanced to firming, depending on the area. Spot milk prices headed to cheese intakes were $1 below to $1 over Class III prices. Cheese production is mixed and some pizza cheese makers in parts of the Midwest say there actually isn’t enough processing space to meet demand right now. The USDA says traditional cheese makers in the Midwest are seeing a seasonal slowdown in orders. Generally, inventories are long. At the retail level, conventional dairy ads were up 7%, while organic dropped 27%. The spread between organic and conventional half gallons of milk is $.70, in favor of organic.