MILK
Milk production is improving as usual during this time of year. Fluid milk demand is rather stable with manufacturing demand increasing as production increases for the holidays. In fact, in some areas, milk availability is termed as tight due to limited quantities of milk available on the spot market, and what is available is trading near class or higher. There is a greater optimism seen in the market with traders thinking that product prices will continue to move sideways to higher. The concern is whether demand will be able to utilize production once end-of-the-year demand is finished. If feed prices remain high and culling remains strong, it may not make much difference as milk supply will not overwhelm the market. A large co-op will be implementing a quota beginning Jan. 1. Farms are allocated a milk quota based on a three-month period of production history. Anything over that will be subject to potentially lower payout depending on other factors. A move such as this may reduce some of the overall milk production and thereby improve milk prices. However, there is no way of knowing how much, if any, impact this will have on the market and milk prices.
AVERAGE CLASS III PRICES
| 3 Month: | $18.37 |
| 6 Month: | $18.16 |
| 9 Month: | $18.12 |
| 12 Month: | $18.13 |
CHEESE
Cheese demand is strong with the shortage of employees continuing to hamper full production schedules. This has created some delays in filling orders, giving the impression there is a shortage of cheese. However, cheese production is strong. It may be an interesting holiday period with the potential of some shortages of cheese or other dairy products experienced for brief periods of time. Hopefully, this will not trigger a hoarding mentality by consumers.
BUTTER
Butter production is reported to be running along seasonal levels even though there are some difficulties with output in some cases due to labor and trucking issues. Current production is being supplemented by inventory to meet demand. Demand from food service remains steady while retail demand is improving. Price has increased 10 cents over the past two days on the spot market moving price above that of cheese. Price is poised to reach and exceed the level reached a month ago.
OUTSIDE MARKETS SUMMARY
December corn fell 10.25 cents, closing at $5.1225. November soybeans declined 3 cents, ending at $11.9525, with October soybean meal up $0.50, closing at $313.40 per ton. December wheat fell 15.25 cents, closing at $7.1875. October live cattle declined $0.25, closing at $124.77. November crude oil declined $0.20, closing at $80.44 per barrel. The Dow slipped 1 point to 34,378, while the NASDAQ gained 106 points, closing at 14,572.
