MILK
Class III futures did not perform very well despite the gains of cheese and dry whey prices. Traders have become so ingrained with the idea that upside price potential is limited and the current price increase will be short-lived. There have been further reports that milk supply is tightening. Some plants have inquired about extra loads from suppliers, but they have been informed that there are none available. What is available is commanding a higher price than class. Schools are absorbing large volumes of milk, leaving lower supply for manufacturing. The Global Dairy Trade auction took place earlier in the week with buying interest across all categories. The trade-weighted average increased 4.0%. Anhydrous milk fat gained 3.1% at $5,970 per metric ton or $2.71 per pound. Butter increased 3.7% to $4,948 per metric ton or $2.24 per pound. Buttermilk powder gained 3.0% to $3,287 per metric ton or $1.49 per pound. Cheddar cheese price increased 3.6% to $4,328 per metric ton or $1.96 per pound. Lactose gained 6.4% to $1,167 per metric ton or $0.53 per pound. Skim milk powder increased 7.3% to $3,274 per metric ton or $1.49 per pound. Whole milk powder gained 3.3% to $3,691 per metric ton or $1.67 per pound.
Average Class III Prices
| 3 Month: | $17.23 |
| 6 Month: | $17.36 |
| 9 Month: | $17.42 |
| 12 Month: | $17.49 |
CHEESE
Cheese sales are mainly steady in both retail and food service industry channels. International demand remains strong. For the first seven months of this year, cheese exports are running 5.5% higher than the same period a year ago. Dry whey exports are running 22.8% above the same period a year ago. Exports in 2020 were higher than 2019 with exports this year higher than 2020. This certainly is a positive trend and one that should provide some support to prices. Exports this year are higher despite some of the delays that are taking place at the ports. This makes one wonder if there were no delays whether exports would be even higher.
BUTTER
Butter plants report that cream supply is tightening. Cream was not as available over the holiday weekend as it generally is. Churning has slowed either from tighter supply or plants opting to sell some cream rather than churning it. Inventories are being dipped into in order to supplement fresh supply and fill orders. Buyers are looking ahead to upcoming demand.
OUTSIDE MARKETS SUMMARY
December corn slipped 0.25 cent, closing at $5.10. November soybeans declined 9 cents, closing at $12.7050, with October soybean meal up $0.20, ending at $335.10. December wheat fell 17.25 cents, closing at $6.9225. October live cattle gained $0.65, closing at $123.75. October crude oil fell $1.16, ending at $68.14 per barrel. The Dow lost 152 points, ending at 34,879, while the NASDAQ declined 38 points, closing at 15,248.
