Block, Barrel Spread Breaks Record
“Say Cheese," a phrase often used by photographers to elicit a smile. However, on Thursday it did anything but - the barrel market fell 7 ½ cents to $1.41 after six loads traded hands. The block market followed suit, falling a ½ cent to $1.70 ½ after a single load traded hands.
The spread between blocks and barrels has now widened to a record 29 ½ cents. A difference never before recorded. While this certainly makes processors uneasy, it is equally frustrating for dairymen. On one hand, we observe the block market working hard to maintain fair value in the export market. And on the other, we observe an over supplied barrel market depressing prices. The jury is still out as to who maintains the greater strength in this ongoing tug-of-war, but one thing is for sure that all eyes will be watching this record spread.
Looking elsewhere in the spot trade the butter market dropped 2 ¼ as well to a final price of $2.61. Grade A nonfat dry milk was unchanged after four loads traded hands finishing at 86 cents.
Turning our attention to the Class III, markets responded to the softer cheese trade with the average price from now to December dropping 17 cents to $16.67 per cwt. Class IV markets were lower as well with the final price average at $16.94. It dropped 4 cents.