Market News

A mixed close to a short week in the dairy markets.

At the Chicago Mercantile Exchange dairy markets on Wednesday; cheddar barrels increased 1.75 cents, blocks gained a penny while butter and nonfat dry milk were unchanged.  The higher cheese prices did nudge many of the Class III contracts a little higher.

For the holiday-shortened week: cash cheese barrels gained 4.75 cents, blocks increased a penny, butter is a half-cent higher and nonfat dry milk slipped a half-cent. Class III futures for November unchanged, December lost 19 cents, January is 41 cents lower, February is down 30 cents and May slipped 3 cents.

Midwest cheese makers are running full schedules over the Thanksgiving weekend to take advantage of the surplus milk available. Spot loads are offered at up to $3 below Class.  Northeast cheese production is described as “steady”.  Western milk production is strong and cheese producers are absorbing the available milk.  The fluctuation in the barrel-to-block spread has some nervous but it ended the week at just 3 cents.  When the gap widens, it prompts fears that blocks will come down but so-far, that has not happened.  The lower prices are helping domestic cheese compete against imports however the lower Euro does give European cheese a bit of an advantage.

National Dairy Products Sales Report for the week ending November 21^st; cheddar blocks averaged $1.66 per pound up 1.4 cents from the previous week.  Barrels lost 2.8 cents to average $1.62, butter increased 6.6 cents to $2.89 per pound, nonfat dry milk increased 2.8 cents to 85 cents and dry whey was 0.3 cents higher at 23.2 cents per pound.

Class I demand backed-off this week as schools close for the Thanksgiving weekend. Florida imported 170 loads this week, up 47 from last week.

The Base Class I Price for December is $16.71 up 23 cents from the previous month. Base Skim Milk Price for Class I for December is $6.05 down 60 cents from the previous month.  These are the highest Class I Base price and lowest Base Skim Milk prices of the year.

For the year, the Class I Base price averaged $16.34 and the Base Skim Milk price averaged $8.91. In 2014 the Class I Base averaged $23.29 and the Base Skim Milk price averaged $15.57.