Milk:
Milk production is seasonally increasing, running significantly higher than a year ago. Heavier milk supplies will be available for manufacturing next week as schools that have remained open will be closing for a few days. Some schools may not reopen again before the end of the year due to the spike in COVID cases. This seems to be something that will be a continued struggle throughout the rest of the school year. Class III milk futures have fallen throughout the week with December down $1.73 from a week ago, closing slightly below $16.00. New lows were made Friday before prices spiked back up after more aggressive buying interest was uncovered in spot cheese. Cheese production remains strong as increasing milk receipts come to the plants. Demand for fresh cheese has slowed a bit which has made a big difference in the market. The market has switched quickly from supplies being deficit to now overabundant. More milk will be available for manufacturing next week as bottling will slow due to schools being closed. Spot milk prices are expected to decline as extra milk needs to find a home. The market will only trade the first three days of next week. Dairy markets will be closed on Friday even through other markets will be open.
Average Class III Prices:
| 3 Month: | $18.59 |
| 6 Month: | $17.59 |
| 9 Month: | $17.33 |
| 12 Month: | $17.25 |
Cheese:
Dairy Market News reports cheese inventories are increasing in the Northeast. Overall, inventory should be decreasing as should be seen on the October Cold Storage report that will be released on Monday. The key will be how much it has declined. Bear in mind the report from Dairy Market News is in reference to this past week and we are in November. The dynamic of supply and demand has been changing in the market over the past few weeks with the possibility of November showing inventory gains. For the week, blocks have fallen 27.25 cents with 7 loads traded. Barrels have fallen 18.75 cents with 13 loads traded. This was a lot less than last week, but still rather significant. Dry whey increased 0.75 cent with 2 loads traded.
Butter:
Churning is active due to significant cream supply. More cream is expected to be available over the next week as some processing operations close for the Thanksgiving holiday. Inventory is being used to supplement fresh production in order to meet strong retail demand. However, inventory may not be declining as much as usual due to slowed demand from the food service industry. For the week, butter declined 5.50 cents with 21 loads traded. Grade A nonfat dry milk slipped 0.25 cent with 29 loads traded.
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