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Milk futures, cash cheese lower

In Class III trade at the Chicago Mercantile Exchange, milk futures were lower on demand concerns and follow through selling. July was down $.18 at $15.07, August was $.48 lower at $15.89, September was down $.35 at $16.04, and October was $.17 lower at $16.13.

Over in the spot market, cash cheese was lower. Blocks were down $.035 at $1.625. There were two trades reported, including one at the closing price. The last offer uncovered was for two loads at $1.625. Barrels were $.04 at $1.67. There were a total of 16 trades, with a dozen of those at $1.71. The last offer uncovered was for one load at $1.67.

Butter was unchanged at $2.35. The last bid unfilled was on one load at $2.30. The last offer uncovered was for two loads at $2.38.

Nonfat dry milk was down $.035 at $.835. There were 17 trades reported, one at the closing price and 14 at $.84. The last bid unfilled was on one load at $.835. The last offer uncovered was for one load at $.84.

The USDA reports that some butter makers are at least planning to slow churning and sell extra milkfat because of tighter cream supplies and rising butter inventories. Most though are holding and some are even willing to buy spot cream to fill production schedules. Domestic demand is high and some manufacturers are already looking ahead to the end of the year.

A number of U.S. cheese makers are at or near full processing schedules with high intakes. However, increasing inventory is a concern for some and those manufacturers are looking at ways to reduce production. Sales are steady to rising in some parts of the U.S. There are a lot of concerns about export demand because of the higher dollar.

Fluid milk production around the U.S. is variable. Southeastern areas are seeing a slowdown with high temperatures and some regional processors are rejecting loads because of temperature concerns. A few butter plants in the Midwest are down for the holidays, making cream more readily available.

Over the past week, conventional dairy ads were up 6%, but organic dropped 73%, with the Northeast reporting an 80% decline. The price spread between organic and conventional half gallons of milk is $2.15, a big increase from last week’s $1.18.