Market News

Butter drops 23 cents

It what may be a hint of post-holiday butter prices: cash butter dropped 23 cents on the Chicago Mercantile Exchange on Tuesday. A couple of uncovered offers set the price but there was an unfilled bid at 99 cents.  Butter makers have been very busy filling holiday orders but everyone expects once those orders are filled the prices will drop.

Cash cheese barrels held steady and blocks increased a quarter-cent on one unfilled bid.

Class III futures continue to slip: January lost another 3 cents, February fell 9 cents. One day after the March contract slipped below $15, April joined it at $14.69.  July slipped below $16.

The monthly Livestock, Dairy and Poultry Outlook from USDA reflecting the drop in dairy prices. Forecast for fourth-quarter cheddar cheese is down to $2.045 to $2.065 per pound.  Nonfat dry milk is pegged at between $1.375 and $1.395 per pound.  The butter price forecast is a little higher at $2.14 to $2.18 per pound.  Fourth-quarter Class III milk price is now projected to be between $21.20 and $21.40 for Class III, $18.75 to $19.05 for Class IV and $23.10 to $23.30 for all milk.  Fourth quarter domestic commercial disappearance is estimated at 51.1 billion pounds on a milk-fat basis down 700 million pounds from last month’s estimate.

The 2015 Class III price is projected to range between $16.55 and $17.35 with the all milk price at $18.45 to $19.25 down 40 to 50 cents from last month’s estimate. The Outlook Board expects the lower prices will reduce projected milk production a little now estimated at 212.2 billion pounds in 2015.