MILK
Class III milk futures took a big hit this week even though underlying cash prices moved very little. When looking at underlying cash, the large spike and then decline of milk futures over the past weeks should never have happened as underlying cash did not move very much. Nevertheless, emotions were running high as traders looked at some of the news that could affect dairy prices. However, much of the optimism was erased this week as those few things did not come to pass, leaving the market where it should have remained. Volatility does provide opportunity, and some were able to take advantage of it. October fluid milk sales declined 1.8% compared to October 2019. This is a bit concerning as fluid milk sales have been very strong through much of this year, but now, the benefits seen as consumers clamored for nutritious milk products due to COVID-19 may have run its course with panic not as much a part of the market as it had been. Conventional fluid milk sales declined 2.1%, while organic milk sales increased 2.8%. The overall decline was based on the total volume.
AVERAGE CLASS III PRICES
| 3 Month: | $15.88 |
| 6 Month: | $16.37 |
| 9 Month: | $16.65 |
| 12 Month: | $16.85 |
CHEESE
For the week, block price remained unchanged with 17 loads traded. Barrels increased 3.25 cents with 16 loads traded. Dry whey declined 1.25 cents with three loads traded. Cheese prices continue to remain relatively stable with prices moving back and forth. Retail demand for holiday fare has declined, but, overall, demand remains good as buyers are looking ahead to demand during the first quarter of 2021. There is plenty of milk available for manufacturing. Cheese inventory is beginning to increase primarily in the West. USDA will release the November Cold Storage report on Monday, which may set the tone for the market for the near term.
BUTTER
Butter output remains strong with no indication of churns slowing down. Heavy cream supplies carry attractive prices, keeping many churns operating on full schedules. Retail demand remains strong, but demand from the food service industry is slowing further. For the week, butter declined 2.50 cents with 36 loads traded. Grade A nonfat dry milk price increased 2.25 cents with 11 loads traded.
OUTSIDE MARKETS SUMMARY
March corn gained 5 cents, ending at $4.3750. January soybeans jumped 18.75 cents, closing at $12.20, with January soybean meal up $7.60 per ton, closing at $405.50. March wheat slipped 0.50 cent, ending at $6.0825. December live cattle jumped $1.12, closing at $110.47. January crude oil gained $0.74, closing at $49.10 per barrel. The Dow declined 124 points, closing at 30,179, while the NASDAQ was down 9 points, ending at 12,756.
