MILK
November and December Class III milk futures closed lower, while the rest of the contracts closed higher. Class IV futures closed higher across the board to end the week on a positive note. There are a few Class IV futures contracts priced above Class III contracts for next year. This is good for keeping a balanced market. There has been significant strength of butter and nonfat dry milk, which has supported Class IV prices. Cheese prices struggled this week. USDA released the September Agricultural Prices report Friday, which showed an income over feed price of $6.93, an increase of $1.68 from August. This will render a Dairy Margin Coverage payment of $2.57 for those who chose the $9.50 protection level. The main reason for the change was a substantial decline of corn price and the increase of the all-milk price. The average corn price was $5.45, down $0.87 per bushel from August. The average soybean meal was $343.55 per ton, down $14.66 per ton from the previous month. The alfalfa price was $209 per ton, up $3 per ton from the previous month with supreme/premium hay at $244 per ton, an increase of $6 per ton from August. The alfalfa blend price used in the formula was $226.50 per ton. The all-milk price increased to $18.40, a gain of $0.70 from August.
AVERAGE CLASS III PRICES
| 3 Month: | $18.27 |
| 6 Month: | $18.38 |
| 9 Month: | $18.40 |
| 12 Month: | $18.43 |
CHEESE
For the week, block cheese price fell 13.50 cents with four loads traded. Barrel cheese price fell 4.25 cents with 11 loads traded. Dry whey price increased 1.25 cents with six loads traded. This moved blocks down to the lowest level they had been since Aug. 9. This is not supportive to the market especially at this time of year.
BUTTER
For the week, butter price increased 10.50 cents with 14 loads traded. Grade A nonfat dry milk price increased 2 cents with 13 loads traded. Increasing demand is bringing buyers into the market more aggressively, as they would rather purchase ahead rather than wait to purchase on an as-needed basis. Retailers want to have the product on hand rather than risk delays in delivery.
OUTSIDE MARKETS SUMMARY
December corn gained 5.50 cents, closing at $5.6825. November soybeans gained 2 cents, closing at $12.3575, with December soybean meal up $1.70 per ton, closing at $332.60. December wheat gained 0.25 cent, ending at $7.7275. December live cattle declined $1.05, closing at $129.27. December crude oil gained $0.76 per barrel, closing at $83.57. The Dow gained 89 points, closing at 35,820, while the NASDAQ gained 50 points, closing at 15,498.
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