MILK
Selling pressure continued on Class III futures in response to further weakness of block cheese. The overall bearish attitude in the market remains. There was a slight bright spot as the Global Dairy Trade Auction trade-weighted average increased 0.3%, ending a series of eight consecutive declines. Anhydrous milk fat increased 1.5% to $5,7891 per metric ton or $2.63 per pound. Butter increased 4.0% to $4,771 per metric ton or $2.16 per pound. Cheddar cheese increased 2.8% to $1,184 per metric ton or $1.90 per pound. Lactose was unchanged at 1,097 per metric ton or $0.50 per pound. Skim milk powder increased 1.1% to $3,052 per metric ton or $1.38 per pound. Whole milk powder declined 1.5% to $3,552 per metric ton or $1.61 per pound. Buttermilk powder was not offered at this event. USDA re-evaluated the Thrifty Food Plan, which is used to calculate the Supplemental Nutrition Assistance Program (SNAP) benefits. The re-evaluation indicated current levels of funding were too low to provide a realistic and healthy diet. It was determined a nutritious, practical and cost-effective diet was 21% higher than the current program. Thus, SNAP benefits will increase by $36.24 per person per month or an additional $1.19 per day beginning Oct. 1. This may have some minor impact on demand for dairy products, but nothing remotely similar to the previous Farmers to Families Food Box program.
AVERAGE CLASS III PRICES
| 3 Month: | $16.89 |
| 6 Month: | $17.22 |
| 9 Month: | $17.29 |
| 12 Month: | $17.34 |
CHEESE
Buyers of block cheese have stepped back from the market due to price weakness. However, the low price Tuesday did result in more aggressive buying action, which took the price off its lows. Buyers are not excited over supplies and continue to do business as needed. They see no reason to buy aggressively and then pay for storage for a period of time. Cheese plants are seeing a bit more room as milk is moving to deficit areas primarily in the Southeast for school systems.
BUTTER
Butter is going nowhere fast. It is just moving sideways, and it seems that may continue for an extended period of time. Supply is sufficient and manufacturing is meeting demand without difficulty. Food service demand is steady with retail demand a bit lower but holding. The potential for higher price is limited under current market fundamentals.
OUTSIDE MARKETS SUMMARY
September corn declined 6.50 cents, closing at $5.5825. September soybeans declined 7 cents, closing at $13.69, with September soybean meal up $0.70 per ton, closing at $360.10. September wheat fell 26 cents, ending at $7.3450. August live cattle declined $0.22, closing at $123.30. September crude oil declined $0.70, ending at $66.59 per barrel. The Dow declined 282 points, closing at 35,343, while the NASDAQ lost 138 points, closing at 14,656.
