Milk Prices Supported Once Again By Spot Cheese
Milk prices were once again supported by a stronger spot cheese price on the CME spot dairy auction. Barrel cheese led the charge rising 3.5 cents/lb and ended at $1.99/lb. Block cheese added 2.75 cents/lb on Monday with a settlement price of $2.6375/lb. Fresh cheddar availability in the current market is lacking. Butter took the opposite route as prices declined 3 cents to $1.48/lb, twelve loads moved from seller to buyer. Grade A nonfat dry milk and dry whey each traded $0.75/lb higher with nonfat closing at $1.13 and whey at $0.3975/lb, respectively.
The USDA released their August Dairy Products report today. Total cheese production was printed at 1.09 billion pounds, 2.1% beneath a year ago and 1.6% behind July’s production. Butter production rose 7.8% compared to August 2019 at 152 million pounds. Dry milk products were a mixed bag as nonfat production was up 8.8% and skim milk powder was down 2% when compared to last August. Dry whey production fell 5.4% to 80.3 million pounds.
Class III milk prices jumped 46 cents/cwt in October while November was up 36 and December added 12 cents. New contract highs were put in on all three 4th quarter months today. The 4th quarter average now stands near $19.45/cwt. Futures were also up across all months in 2021 as months ranged from 4-11 cents/cwt stronger. Volume in 2021 has also begun to pick up. Class IV futures had limited trade once again.