Market News

Dairy markets decline

Further declines in most of the dairy markets on the Chicago Mercantile Exchange on Friday. Cheddar barrels lost 6.5 cents, blocks were 2.25 cents lower and butter lost another dime. Class III futures saw double-digit declines on all of the 2016 contracts. January slipped below $14 to $13.70 while February closed at $14.01.

For the week; cash cheese barrels lost 6.25 cents, blocks fell 7.25 cents, butter plunged 70.25 cents and nonfat dry milk slipped 1.5 cents. The January Class III contract lost 58 cents, February fell 49 cents and June dropped 46 cents.

Demand for butter remains strong but holiday orders are mostly filled and butter makers remain reluctant to build inventories as they expect the price to go lower. Domestic cheese demand is good helped by holiday promotions and features. Dairy Market News says many grocery outlets are bundling minimum dollar amount purchases with discounted gallons of milk. Fluid use will slow-down as schools begin to close for the holidays.

There were 4.3 billion pounds of packaged fluid milk products sold in the U.S. in October down 1.6 percent from October of 2014. Estimated sales of conventional fluid milk products were 1.2 percent lower while organic fluid milk product sales were 8.5 percent lower than a year ago.

The September mailbox price for milk averaged $17.37 per hundredweight up 89 cents from August. Prices increased in all of the Federal milk order reporting areas and ranged from $20.19 in Florida to $15.52 in New Mexico

Despite low prices, European milk production for January through September is running 1.4 percent above a year ago. Irish production is nearly 10 percent higher. A little different story in Oceania; Australian milk production year-to-date is up 2 percent but October was a little below last year as dry conditions are intensifying in the most significant dairy regions. New Zealand production is higher but less than expected as low prices have farmers drying cows off earlier.