Market News

Milk futures higher, cash dairy mostly steady

In Class III trade at the Chicago Mercantile Exchange, milk futures were higher, expecting solid demand and watching the weather. August was up $.03 at $17, September was $.12 higher at $17.22, October was up $.13 at $16.90, and November was $.14 higher at $16.60.

Cash cheese was unchanged. Blocks were steady at $1.78. There were a total of eight trades, including two at the closing price and six at $1.775. The last uncovered offer was for one load at $1.79. Barrels held at $1.865. The last uncovered offer was for two loads at that price.

Butter was unchanged at $2.25. There were two unfilled bids at that price. The last uncovered offer was for one load at $2.27.

Nonfat dry milk was down $.0075 at $.825. There were two trades, one at $.82 and one at $.83. The last unfilled bid was on one load at $.82. The last uncovered offer was for one load at $.825.

The USDA reports that for the week ending August 12th, U.S. butter production was mixed. Cream availability is down slightly and national supplies are called uneven, solid in the Central region, but most manufacturers can still meet needs for production. Retail and food service demand is strong.

Cheese production is mixed. Central and Northeastern manufacturers ware trying to keep production at a high pace, but milk intakes are declining. Western cheese makers report full schedules and little difficulty finding milk. Eastern and Midwestern inventories are adequate and the USDA calls Western supplies a little heavy.

Fluid milk production is declining in most of the U.S. because of high heat and humidity. Demand is generally following seasonal trends, with higher bottled milk sales to schools and steady to lower volumes in retail and food service. Demand for cream from ice cream and frozen desert makers is strong. The USDA says milk standardization is adding to cream supplies at least a little bit and while supplies are tightening at many balancing plants, condensed skim volumes are adequate for Class II needs. Still, some processors are drying, not selling, citing relatively low prices.

Total conventional dairy ads last week were down 14%, but organic ads were up 16%. USDA says that there are currently six times as many conventional ads than organic. The price spread for a half gallon of organic and conventional milk is $2.08, compared to $1.17 the previous week.