Market News

Milk futures, cash dairy mixed

Class III milk futures at the Chicago Mercantile Exchange were mixed on spread trade and general consolidation. August was $.01 higher at $16.51, September was up $.04 at $17.19, October was down $.05 at $17.11, and November was $.07 lower at $16.98.

Cash cheese blocks were .02 higher at $1.755. Four loads were sold, including one at $1.755. The last unfilled bid was on one load, also at $1.755. The last uncovered offer was for one load at $1.76. Barrels were up $.065 at $1.75. Six loads were sold, four at $1.685 and two at $1.6875. The last unfilled bid was on one load at $1.75.

Butter was $.01 lower at $2.645. 11 loads were sold, including one at$2.645 and five at $2.64. The last unfilled bid was on one load at $2.6425. The last uncovered offer was for one load at $2.6475.

Nonfat dry milk was down $.005 at $.8325. Four loads were sold, three at $.8325 and one at $.8375. The last unfilled bid was on one load $.83. The last uncovered offer was for five load at $.8625.

The USDA reports milk production in the Midwest last week varied by location, depending on weather and scheduling. Class I sales are strong with school getting back in session and some Class II plants are down for maintenance. Midwestern butter makers say export demand is improving, especially for unsalted butter, and production depends on cream availability. Milk availability for cheese making is mixed, with few spot offers for Class III reported in the Midwest and Northeast. Demand for pizza cheese is rising. Midwestern inventories for barrels are still long, but the spread between barrels and blocks is tightening, which some in the industry are calling a positive sign for demand. At the retail level, conventional dairy ads were up 4% and organic ads were down 25%. The spread between organic and conventional half gallons of milk has narrowed, now at $.69, still in favor of organic.