Dairy Markets At A Glance (9/30)
BUTTER: Grade AA closed at $3.1450. The weekly average for Grade AA is $3.1485 (+0.0140).
CHEESE: Barrels closed at $2.2000 and 40# blocks at $1.9675. The weekly average for barrels is $2.1980 (+0.0335) and blocks, $1.9885 (-0.0310).
NONFAT DRY MILK: Grade A closed at $1.5700. The weekly average for Grade A is $1.5650 (+0.0010).
DRY WHEY: Extra grade dry whey closed at $0.4400. The weekly average for dry whey is $0.4445 (-0.0055).
CHEESE HIGHLIGHTS: In the Northeast and West, milk is available for steady cheesemaking. Meanwhile, contacts in the Midwest say milk volumes have been declining over the past few weeks. This decline in milk availability is contributing to some down time at Midwestern cheese plants. Demand for cheese is softening in the East but remains healthy throughout the Midwest. In the West, retail demand for cheese is declining while steady demand for cheese is present in food service markets. Strong international demand persists in the West, as contacts say domestically produced loads of cheese are priced at a discount to loads produced in other countries. Spot purchasers in the Northeast say loads of cheese are available. Cheese barrels are tight in the Midwest but less available than blocks in the West. Some contacts suggest this is contributing to the inversion of the block barrel price relationship on the CME.
BUTTER HIGHLIGHTS: Cream volumes are available to meet production needs in the West. In the Central region, some butter makers say cream loads are being sold at multiples in the middle/upper 1.20s this week. Contacts in the Northeast say some butter makers are opting to sell loads of cream to cream cheese and eggnog producers, in lieu of churning. Some regional butter makers say they are not currently churning. Butter makers in the West are running busy production schedules, though some plants are closed for scheduled maintenance this week. Meanwhile in the Central region, butter makers are operating busy production schedules to try and keep up with the strong regional demand for butter. Demand for butter is building ahead of the holiday season in the Northeast and West.
FLUID MILK: In general, U.S. milk production is trending steady to lower across much of the country. Exceptions are California and the Southeast, where cooler weather and increased cow comfort may be contributing to higher milk output, albeit at levels lower than the previous year. The typical seasonal slide of milk output is at the low point for the year in Florida. In Florida and the Southeast, some bottling plants are expected to close because of Hurricane Ian. The storm has also hindered movements of milk and cream from the Midwest region into the Southeast and Florida. Class I and II demand is steady, except in Florida, where retailers had a surge in consumer purchases before the storm. Condensed skim availability is tight, with solid demand. Cream supplies vary from very tight in the Northeast, to more available in the Midwest and West. Cream multiples for all Classes are 1.35 – 1.52 in the East, 1.26 – 1.45 in the Midwest, and 1.09 – 1.36 in the West.
DRY PRODUCTS: The price range for low/medium heat nonfat ry milk (NDM) moved lower in the West but is steady to higher in the Central and East. Drying facilities are generally not running at full capacity because of lower milk availability, labor shortages, and delayed deliveries of production supplies. For high heat NDM, prices are steady to higher in the Central and East, and the range expanded in the West. Dry buttermilk prices are unchanged in the Central and East. In the West, dry buttermilk prices are unchanged at the top of the range but moved lower at the bottom. Prices moved higher for dry whole milk, as buyers have become more active. Dry whey prices held steady at the top of both the Northeast and Central price ranges but moved lower at the bottom of each range and at both ends of the West price range.