MILK
Class III milk futures closed higher and indicate further gains in overnight trade may be likely based on the September Milk Production report. September milk production was up 0.4% from September 2020 in the top 24 states. Production per cow declined for the second consecutive month with a decrease of 4 pounds, averaging 1,937 pounds. Cow numbers fell 22,000 head from August with current numbers 48,000 more than a year ago. Milk production in all 50 states was up just 0.2%, totaling 18.075 billion pounds. Per-cow output declined 1 pound, averaging 1,918 pounds. Cow numbers declined 25.000 head from August with the nation's dairy herd 27,000 head more than a year ago. This is showing a significant contraction of cow numbers and milk production. This puts third-quarter milk production at 55.9 billion pounds, up 0.9% from the same period last year. The average number of dairy cows during the third quarter was 9.45 million head. This trend might potentially tighten the supply of milk if demand remains strong and could result in higher milk prices over the next months. The November Class I price is $17.90, up $0.90 from October, but $0.06 lower than November 2021.
AVERAGE CLASS III PRICES
| 3 Month: | $18.78 |
| 6 Month: | $18.49 |
| 9 Month: | $18.38 |
| 12 Month: | $18.35 |
CHEESE
Cheese demand is following a seasonal level with increasing orders being placed and filled. Manufacturing output is strong, leaving less available to the spot market. There is no milk shortage, but supplies may tighten if cow numbers continue to decline and production per cow keeps moving lower. The greater concern this year is not of supply shortage, but of the shortage of employees and truck drives to haul supplies to where they need to be.
BUTTER
Cream supply has tightened in the Northeast region, leaving plants generally relying on regular supply. Spot cream is tight and at higher prices, leaving many unwilling to purchase off the spot market. Orders are increasing more rapidly than usual as end users are concerned over the ability to receive supplies in time to meet demand. Consumers may also purchase earlier than usual to avoid the possibility of not being able to purchase product when they need it. Earlier ordering may result in earlier delivery which may be met with earlier demand.
OUTSIDE MARKETS SUMMARY
December corn gained 9 cents, closing at $5.3925. November soybeans jumped 17.50 cents, closing at $12.4550, with December soybean meal up $5.80 per ton closing at $328.40. December wheat gained 13.25 cents, closing at $7.4925. October live cattle gained $0.95, ending at $125.95. November crude oil gained $0.91, ending at $83.87 per barrel. The Dow closed 152 points higher at 35,609, while the NASDAQ slipped 7 points, closing at 15,122.
