Market News

Milk futures mixed, cash cheese higher

In Class III trade at the Chicago Mercantile Exchange, milk futures were mixed with the most active months down on the recent USDA increase in the 2016 milk production estimate. October was down $.05 at $14.68, November was $.06 lower at $15.04, December was down $.02 at $15.13, and January was $.02 lower at $15.32.

Cash cheese blocks were up $.0325 at $1.55. The last unfilled bid was on one load, also at $1.55. Barrels were $.0125 higher at $1.46. There were two loads sold, one at $1.455 and one at $1.4575. The last unfilled bid was on one load at $1.46.

Butter was up $.015 at $1.785 with one load sold. The last unfilled bid was for two loads at $1.78. The last uncovered offer was for one load at $1.82.

Nonfat dry milk was unchanged at $.87. The last unfilled bid was on one load at $.8625. The last uncovered offer was for one load at $.87.

The USDA says that for the week ending October 14th, cream availability for butter churning is rising across the country. Most processing plants are very active, with heavy inventories. Spot prices are low, but that is attracting new demand from buyers. Print orders by retailers are strong ahead of the year-end holidays.

Midwestern cheese production is reportedly below full capacity as some manufacturers are reluctant to buy extra milk, unless the price is favorable. Cheese making in the Northeast was steady on the week and demand is called mixed, better for mozzarella than for cheddar. Western production was about unchanged to almost full and while there’s plenty in storage, domestic retail demand is good.

In the South Central milk production area, milk intakes are rising along seasonal lines and production in the North Central region is generally steady. Some milk bottlers in the Southeast have reduced orders as the region recovers from Hurricane Matthew. Bottling demand was generally steady, but fall breaks have limited fluid milk sales in parts of the country. Midwestern Class II demand for condensed skim is called seasonally low. Cream is readily available.

Conventional dairy ads were down 2% on the week and organic ads were 39% lower. The price spread between organic and conventional half gallons of milk is $1.70, down $.92 on the week.