Market News

Milk futures mostly lower, cash dairy mixed

In Class III trade at the Chicago Mercantile Exchange, milk futures were mostly lower, continuing the recent trend. September was unchanged at $16.38, October was down $.10 at $15.56, November was $.12 lower at $15.78, and December was down $.12 at $15.73.

In the spot market, cash cheese blocks were down $.0025 at $1.56. There were a total of five loads sold, two of those at the closing price. The last uncovered offer was for one load at $1.565. Barrels were unchanged at $1.51.

Butter was $.0275 higher at $2.0275. There were a total of nine loads sold, including four at $2.04 and one at $2.0275. The last unfilled bid was on one load at $2.01. The last uncovered offer was for three loads at $2.05.

Nonfat dry milk held at $.935 with one load sold. The last unfilled bid was on one load at $.93. The last uncovered offer was for two loads at $.94.

The USDA says total natural cheese stocks at the end of August were a new all-time high for the month at 1.243 billion pounds, up 6% on the year. The USDA started collecting that data in 1921. All components had year to year increases, with American 5% higher at 744.491 million pounds, Swiss up 17% at 26.006 million, and other types 8% higher at 472.578 million pounds. Butter was reported at 322.219 million pounds, 52% above a year ago.

The total number of cattle on feed as of September 1st was 10.1 million head, up 1% on the year. Placements were 15% higher, with most of that heavier weight cattle, and marketings were up 18%.

HighGround Dairy says whey imports by China during August were a new record for the month, with the U.S. accounting for 56% of the total. Imports of U.S. cheese and butter are down 25% for the year to date, with Australia and New Zealand big suppliers. Chinese imports of whole milk powder have been below year ago levels for four consecutive months.

The USDA reports that for the week ending September 23rd, butter production was steadily increasing thanks to more available cream volumes. The cream supply has also been bolstered by bottled milk standardization and improving milk butterfat levels. A number of processors are focused on print butter production ahead of expected fourth quarter demand and USDA says inventories are steady to building.

Extra milk for cheese making is available in the Northeast and Midwestern regions and there’s a good supply in the West. Cheese demand is called mixed in the Midwest, very good for mozzarella in the Northeast, and firm in the West. USDA does call the overall market tone in the Northeast unsettled. Makers of European type cheeses are trying to keep up with demand.

The USDA says that because of weather and seasonal factors, there was no uniform national trend for milk production. North Central states had steady output, but South Central production was limited by rainfall. Midwestern spot milk demand is active with prices at $1.25 to $3.00 over Class. Some spot milk sales are complicated by transportation and pricing factors.

The price spread between an organic and conventional half gallon of milk was $3.05.