MILK
Milk futures did not show any excitement Wednesday. Even the increase of block cheese and dry whey was not enough to generate buying interest. The market has sufficient supply to meet current demand. Holiday demand from packagers and recutters has already been finished with retail demand continuing but slowing, as many retailers have already placed orders ahead of time. Milk futures are reflecting this slowing with traders somewhat bearish for the near term. Class III futures for 2022 continue to hold well from February out. January has come under pressure as extra premium is being eliminated. Class IV futures came under pressure Wednesday with contracts posting double-digit losses. Traders seem to be putting more emphasis on what is taking place in nonfat dry milk price rather than butter price. The December Class I price is $19.17. This is $1.19 higher than November, but $0.70 lower than a year ago. USDA will release the October Milk Production report Thursday afternoon. I estimate milk production to be steady with a year ago. Culling is expected to have slowed, with my estimate being a decrease of 3,000 head from September.
AVERAGE CLASS III PRICES
| 3 Month: | $17.63 |
| 6 Month: | $18.14 |
| 9 Month: | $18.40 |
| 12 Month: | $18.51 |
CHEESE
It looks like cheese inventory might be declining so far in November. We will find out how much it might have declined in October when the cold storage report is released on Monday. Weekly cold storage in selected surveyed warehouses showed cheese inventory down 11% for the first two weeks of November. That is certainly a positive sign. Demand remains strong overall, but some plants are reducing production schedules as they see orders beginning to slow.
BUTTER
There is strong cream demand for holiday products, which has tightened cream supply to butter manufacturers. However, this is not creating any shortages due to sufficient butter inventory available to supplement fresh production. The average retail price for butter has increased by 20 to 30 cents per pound from just a week ago as inflation heats up.
OUTSIDE MARKETS SUMMARY
December corn gained 4.25 cents, closing at $5.7525. January soybeans jumped 25.75 cents, closing at $12.77, with December soybean meal up $7.20 per ton, closing at $374.70. December wheat gained 12 cents, closing at $8.2225. December live cattle gained $0.50, closing at $132.25. December crude oil fell $2.40, closing at $78.36 per barrel. The Dow lost 211 points, closing at 35,931, while the NASDAQ declined 52 points, closing at 15,922
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