MILK
Milk production is basically steady across the country. Sufficient supply is available for bottling and manufacturing for the time being. There have been previous reports that milk supply has tightened is some cases, leaving plants with lower-than-desired volumes for production. The spot milk market has tightened, resulting in prices running above class. Many plants are relying on patron milk or regular suppliers for bottling and manufacturing rather than paying higher prices for extra milk from the spot market. Milk supply may be tightening, but there is no deficit for demand. If there was, milk price would be higher. There are increasing reports of labor issues and trucker shortages. These issues are becoming more pronounced now that demand is increasing. More product needs to be moved and more product need to be produced to satisfy demand. Without the ability to increase processing and move product efficiently, some demand may go unfilled which may result in some backup in the market. A backup in the market may keep a lid on price potential.
AVERAGE CLASS III PRICES
| 3 Month: | $16.93 |
| 6 Month: | $17.16 |
| 9 Month: | $17.28 |
| 12 Month: | $17.39 |
CHEESE
Some manufacturers indicate they had no spot milk offers this week. Any spot milk that is available is priced $1 over class. Cheese prices remain in a range. Blocks tried to push through the top of the range, but sellers became more aggressive at that level, resulting in price slipping back. Time of year would be right for it to break through the upside and develop a trend higher, but plentiful supply leaves the market range bound.
BUTTER
Cream supply is tightening, resulting in lower production of butter. Lower production is requiring inventoried supply to fill demand. However, inventory is sufficient and higher than last year. Retail demand is steady to higher while demand from the food service industry has been stable. Weekly cold storage in selected surveyed warehouses shows a decline of 4% for the first half of the month.
OUTSIDE MARKETS SUMMARY
December corn gained 12.50 cents, closing at $5.4075. November soybeans gained 12 cents, closing at $12.9450, with October soybean meal up $2.10 at $335.90 per ton. December wheat gained 11.50 cents, closing at $7.1225. October live cattle ended $0.05 higher at $124.17. October crude oil jumped $2.15, closing at $72.61 per barrel. The Dow gained 237 points, closing at 34,814, while the NASDAQ gained 124 points.
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