Market News

Milk futures firm, cash dairy mixed

In Class III trade at the Chicago Mercantile Exchange, milk futures were up modestly, taking the path of least resistance. November was up $.05 at $15.46, December was $.03 higher at $15.21, January was up $.03 at $15.36, and February was $.03 higher at $15.55.

Cash cheese was lower. Blocks were down $.02 at $1.65 with one load sold. The last uncovered offer was for one load at $1.655. Barrels were $.005 lower at $1.57. There was one load sold at $1.57 and one at $1.5725.

Butter was up $.005 at $1.76. The last unfilled bid was on one load at a dollar seventy six. The last uncovered offer was for five loads at $1.80.

Nonfat dry milk held at $.88, with nine loads sold. The last unfilled bid was on two loads at $.88.

For the week ending October 21st, the USDA says U.S. butter production is very active because of highly available cream supplies, with most manufacturers at full capacity ahead of holiday demand. Microfixing is active with some processors trying to rotate inventory. There’s a lot of bulk butter available and recent cash market activity indicates some manufacturers are attempting to move that excess inventory through the spot market. Print butter demand from retailers is strong.

The seasonal increase in milk demand has cheese makers near full capacity. Midwestern cheese makers report a seasonal increase in orders. There’s some talk of new export demand, but the USDA says those sales have not developed.

Fluid milk production in the Central region was up over the past week and across the U.S., supplies are essentially meeting demand. Bottled milk sales vary and cream is readily available.

At the retail level, conventional dairy ads were down 11% and organic ads were steady. The spread between half gallons of organic and conventional milk was $2.02, up $.32 on the week.

The USDA says the dairy cow slaughter in September was 245,100 head, up 500 on the month, but down 6,700 on the year.

High production levels and export competition pushed cheese stocks up 7% on the year to 1.238 billion pounds. Still, that was unchanged from August, so production may be dialed back a bit. By type, American cheese was up 6% on the year, Swiss was 14% higher, and other types were 9% higher. Butter stocks jumped 44% to 269.170 million pounds. That was down 16% on the month.