Market News

Milk futures mostly lower, cash dairy mixed

In Class III trade at the Chicago Mercantile Exchange, milk futures were mostly lower with the most active months down on profit taking. August was down $.03 at $16.99, September was $.08 lower at $16.99, October was down $.10 at $16.80, and November was $.02 lower at $16.40.

Cash cheese blocks were steady at $1.76. There were a total of six trades, including three at $1.77 and one at $1.76. Barrels were $.055 higher at $1.855. There were a total of eleven trades, with two at the closing price and four at $1.835. The last unfilled bid was on one load at $1.855.

Butter was up a penny at $2.2325. The last unfilled bid was on one load at that price.

Nonfat dry milk was down $.01 at $.83. There were four trades, two at $.83. The last unfilled bid was on one load at $.8275. The last uncovered offer was for one load at $.83.

Large supplies may be leading to a slowdown in U.S. cheese and butter production. At the end of June, the USDA’s cold storage report showed a record amount of cheese and a big year to year increase for butter. For June 2016, total U.S. cheese production was down 1.5% from May 2016 at 987 million pounds, up 1.1% from June 2015, and butter production, at 153 million pounds, was 10.1% less than last month and 6.4% more than last year. Italian type cheese came out at 432 million pounds, 2% under a month ago and 2.2% over a year ago and American cheese at 390 million pounds was down 2.6% on the month and 0.2% on the year. Year to date, U.S. cheese and butter production is ahead of 2015, but the percentage changes are below the highs hit this spring. In 2016, U.S. cheese production is 5.965 billion pounds, up 2.1%, and butter production is 1.032 billion pounds, 5.7% higher. The USDA’s next cold storage report is out Monday, August 22nd.

Nonfat dry milk for human consumption production at 144 million pounds was down 13.2% on the year, while skim milk powder at 55.3 million pounds was up 59.5%. Dry whey totaled 79.2 million pounds, 7.7% lower, with lactose for human and animal consumption at 91.8 million pounds, 2.0% higher, and whey protein concentrate at 35.9 million pounds, down 7.9%. Regular ice cream production was pegged at 75.6 million gallons, up 4.2%, and lowfat totaled 42.8 million gallons, down 8.0%.