MILK
Milk production is generally increasing off farms as usual during this time of year. Cows are comfortable with good feed quality available. The potential of the increase will be less due to heavy culling that has been taking place due to high feed prices. Milk futures were, and still are, somewhat positive for the end of the year and next year. At least, they look a lot better than they had been for quite some time. Cheese prices are still not providing the needed support to keep milk prices trending higher. There are many plants reporting tighter milk supply. Spot prices are increasing, making some plants hold back, only utilizing milk from their usual suppliers rather than turn to the spot market to pick up extra milk. Cow numbers are trending lower from month to month but continue to remain above a year ago. Milk production per cow is below a year ago as rations are being changed to least cost, which may have an impact on overall production. The Dairy Margin Coverage program has been a good safety net for many farmers. The program has paid out $981 million since 2018 with still more benefit to come due to the lower income over feed prices that will likely be seen for a time. USDA will release the September Agricultural Prices report on Friday, providing another income over feed price and another round of payments for those able to receive them.
AVERAGE CLASS III PRICES
| 3 Month: | $18.47 |
| 6 Month: | $18.44 |
| 9 Month: | $18.43 |
| 12 Month: | $18.43 |
CHEESE
Cheese orders are strong, keeping manufacturing plants busy. This has been and will be a challenge as the labor force is less than desired with no change in sight. Plants that produce curds indicate they are behind on orders and are doing the best they can to fulfill demand. Plants that need to go out to the spot market to supplement regular milk supplies are finding higher prices due to a tighter market. Spot prices are running at class to as much as $1 over.
BUTTER
Cream prices have been increasing with many plants not willing to pay current prices for extra cream, leaving production to regular supplies. This has been limiting the production of butter somewhat. Demand has been improving mainly at the retail level as stores prepare for increasing seasonal demand. There may also be some hoarding taking place as consumers may fear butter may not be on the store shelf when they want it later.
OUTSIDE MARKETS SUMMARY
December corn jumped 13.75 cents, closing at $5.5725. November soybeans closed 1.25 cents higher at $12.3925 with December soybean meal up $4 per ton. December wheat gained 7.50 cents, closing at $7.5975. October live cattle gained $0.40, ending at $127.22. November crude oil fell $1.99 per barrel, closing at $82.66. The Dow declined 266 points, while the NASDAQ closed unchanged.
