Market News

Milk futures mixed, cash dairy steady to higher

In Class III trade at the Chicago Mercantile Exchange, milk futures were mostly lower on spread trade and profit taking. January was up $.02 at $16.81, February was down $.16 at $17.18, March was $.20 lower at $17.43, and April was down $.10 at $17.60.

Cash cheese blocks were $.025 lower at $1.725. The last uncovered offer was for one load at $1.725. Barrels were unchanged at $1.64.

Butter was down $.02 at $2.225. The last unfilled bid was on two loads at $2.20. The last uncovered offer was for one load at $2.225.

Nonfat dry milk held at $1.0325. The last unfilled bid was on one load at $1.03. The last uncovered offer was for one load at $1.05.

The USDA says most U.S. butter plants are at full capacity thanks to the large available cream volumes. That strong production of mostly bulk butter is keeping supply above demand and a lot of the product will be headed to cold storage. Print demand is expected to be good ahead of the Super Bowl the following spring holidays. Spot activity was light over the past week.

Cheese production was active in most areas, with plentiful supplies of milk in the Midwestern and Western regions. Food service orders in the Midwest have been slow, when compared to the Northeast. Fresh blocks are relatively scarce when compared to aged blocks and barrels.

Fluid milk production is mixed, depending on weather. Demand for single serving containers is higher as schools get back in session. Retail demand is spiking in some areas because of demand ahead of winter storms. USDA says the cream supply is generally good and while the Eastern market is a little slow, some of those spot loads are heading to the Midwest.

At the retail level, conventional dairy ads were down 21% on the week, but organic was up 24%. The spread for organic and conventional pounds of butter is $1.60 in favor of organic and organic half gallons of milk have a premium of $.90.