MILK
Milk production is mixed as cooler weather has now moved into most areas. Even with a slight increase of production, spot milk still holds a premium to class in most cases. Demand for fluid milk is strong as schools are in session. There is sufficient milk available for both manufacturing and processing. Fluid milk sales in July declined 6.3% from the previous year. This is one of the largest declines I have seen. Whole milk sales declined 4.8%, flavored whole milk increased 1.1%, reduced-fat milk sales fell 10.9%, low-fat milk declined 8.9%, fat-free skim fell 12.2%, flavored fat-reduced milk increased 2.3%, buttermilk increased 10.5% with fluid milk product sales up 56.9%. Total sales of conventional milk were down 6.2%. Organic milk sales fell 9.0%. Organic whole milk declined 7.0%, organic flavored whole milk jumped 113.6%; organic reduced flat declined 7.4%, organic low-fat declined 22.4%, organic fat-free skim milk sales declined 18.8% and organic flavored fat-reduced milk increased 11.0%. Collectively, sales on a volume basis declined 6.3% for all milk.
AVERAGE CLASS III PRICES
| 3 Month: | $16.93 |
| 6 Month: | $17.12 |
| 9 Month: | $17.28 |
| 12 Month: | $17.41 |
CHEESE
For the week, cheese prices moved in opposite directions. Blocks fell 8.50 cent with 10 loads traded. Barrels gained 9 cents with 19 loads traded. Dry whey increased 3.75 cents with four loads traded. The movement of cheese prices basically left the calculation of class prices unchanged, which was reflected in basically no change in futures prices for the week. The divergence of blocks and barrels moved the spread substantially closer together. However, the narrowing of the spread does little in the way of providing price direction.
BUTTER
Cream availability has increased over the past week. This will increase butter production at a time of year during which demand for butter improves. The recent Cold Storage report indicates strong demand as stocks are now below a year ago. But price continues to struggle, unable to resume the trend higher. For the week, butter declined 6.25 cents with 48 loads traded. Grade A nonfat dry milk price gained a penny with 15 loads traded.
OUTSIDE MARKETS SUMMARY
December corn fell 2.50 cents, closing at $5.2675. November corn gained 0.75 cent higher, closing at $12.85, with October soybean meal down $0.50 at $336.10 per ton. December wheat gained 6 cents, closing at $7.2375. October live cattle declined $0.30, ending at $122.92. October crude oil gained $0.68, closing at $73.98 per barrel. The Dow gained 33 points, ending at 34,798, while the NASDAQ slipped 5 points, ending at 15,048.
