Market News

A mixed day in the dairy markets

A mixed close on the Chicago Mercantile Exchange dairy markets on Friday. Cheddar barrels were steady, blocks slipped 1.5 cents, nonfat dry milk lost 4 cents and butter increased 7 cents. Class III futures were narrowly mixed.

For the week: cash cheese barrels gained 2 cents, blocks lost 3.5 cents, butter increased 3.25 cents and nonfat dry milk lost 10.5 cents. October Class III contract lost 19 cents, November is 17 cents lower, December and April contracts lost 24 cents each.

With the big spread between domestic and foreign butter prices, butter imports were significantly higher from January through August. Licensed imports totaled 11.8 million pounds, high-tier butter imports were 12.4 million and free trade agreement imports were 2.1 million. The combined total exceeded the 20.8 million pound trigger level so a safeguard duty of 23.3 cents per pound has been implemented from October 5th through December 31st.

The October Livestock, Dairy and Poultry Outlook from USDA raised the all-milk price forecast for the fourth quarter 30-to-40 cents. Fourth quarter cheese and nonfat dry milk prices have been raised, more than off-setting projected lower prices for butter and whey. As a result; the Class III price was raised to $15.45 to $15.85 per hundredweight. The Class IV price estimate is also higher at $14.45 to $14.95 putting the all-milk price forecast at $17 to $17.40 for the quarter.