Market News

A down week in the dairy markets

Cheese barrels, nonfat dry milk and Class III futures were lower on the Chicago Mercantile Exchange on Friday. Barrels were 2.25 cents lower on 12 sales and one unfilled bid.

For the week, cash cheese barrels lost 18.25 cents, blocks are 8 cents lower, butter is unchanged and nonfat dry milk slipped a penny. Class III futures for November lost 22 cents, December is 48 cents lower, January slipped 22 cents and the May contract dropped 56 cents.

Domestic cheese demand remains strong, processors say barrel inventories are long but block supplies are tighter. That would explain the 15.25 cent spread in the cash market.

Butter makers say they are finishing-up production for Thanksgiving, orders from food service and retailers remain strong. Bulk butter prices range from 4 cents under to 7 cents over the market.  Some retailers tell Dairy Market News they expect an increase in demand in the coming weeks as a result of an increase in promotional advertising.

USDA reports 4.1 billion pounds of packaged fluid milk products were sold in the U.S. in September, 1.3 percent less than in September of 2014. Conventional fluid milk sales decreased 1.5 percent from a year ago while organic fluid milk product sales increased 1.8 percent.

The national weighted average price for a half-gallon of organic milk was $4.13 last week compared to $1.09 for a half-gallon of conventional milk. That puts the organic-to-conventional spread at $3.04 compared to $2.12 the previous week.

 

An independent market analytical firm says Canadian dairy farmers would be hurt by the Trans Pacific Partnership. IBISWorld says the eventual reduction of tariffs on some dairy product imports would result in a 0.4 percent annual decline in dairy farm revenue and a 1.1 percent decline in employment in the dairy industry.  IBISWorld analyst Jack Curran says the $4.3 billion promised by the Canadian government to help dairy, egg and poultry producers would not cover all of the losses.  However, the report states the Canadian Dairy Products industry would benefit from the increased imports of cheaper dairy ingredients.  Read more here: