Class III Moves Higher Despite USDA Dairy Product Report
U.S. milk continues to flow into cheese and butter. Today’s USDA Dairy Product report gave us a look at August’s production number. Total cheese output hit 1.11 billion pounds up 2.2% from a year prior and 1.6% higher than July’s output. Butter production continued its trend this year and was up 2.1 % from 2018 levels, but started to slow down, coming in 4.3% lower than July’s production.
Nonfat dry milk saw gains of 2.5% more than last August, and skim milk powder increased production 8% over 2018 levels, and dry whey saw an extra 7.2% produced. However, lactose production fell 4.6% and whey protein concentrate production fell 7.7% to show a mixed trend for dry powders.
The lone market to see production drop off across the board was in the frozen sector. Regular Ice cream fell 6.4% to 65.7 million gallons, low-fat ice cream also fell 3.8%, and Sherbet production fell 23.8% and frozen yogurt fell 5.4%.
Thursday’s CME spot market saw strength as Cheddar blocks gained 2 cents to $2.02 per lb., barrels gained 1 cent to $1.77 and butter gained 1 ¼ cents to $2.18 ½ per lb.
Grad A nonfat dry milk fell half a cent to $1.13 ½ and dry whey was unchanged at $0.34 per lb.
Class III milk continued its march higher. October gained 12 cents to $18.48, November gained 5 cents to $18.37 and 2020 saw gains for January - March of 1-7 cents to finish averaging at $16.79 per cwt.
Class IV milk was unchanged throughout the trading months – October holding at $16.45.