MILK
Class III futures closed lower in contract months through April, while later months showed nice gains. Closer months were affected by the decline of cheese prices. However, traders feel a decline might be short-lived due to strong demand, declining cow numbers and production per cow. Overall, milk production is termed as steady across the country. There is less milk available to the spot market as buyers are paying higher prices and are having a little more difficulty finding sufficient supply. Last year, spot milk price was as much as $6 below class, while currently, spot milk is steady $0.50 above class. The holiday period is not expected to result in burdensome milk supplies. In fact, many plants will welcome the ability to obtain more milk to increase production. Packaged fluid milk sales in October fell 5.2% below October 2020. Whole milk sales declined 3.9%, flavored whole milk declined 3.8%, reduced-fat milk sales fell 16.3%, low-fat milk declined 8.5%, fat-free milk fell 11.6%, flavored fat-reduced milk jumped 35.4% and buttermilk gained 4.4%. Organic whole milk sales slipped 0.6%, organic flavored whole milk gained 10.2%, organic reduced-fat milk declined 11.4%, organic low-fat gained 1.2%, organic fat-free milk sales fell 18.4% with organic flavored fat-reduced milk sales down 3.6%.
AVERAGE CLASS III PRICES
| 3 Month: | $19.14 |
| 6 Month: | $19.43 |
| 9 Month: | $19.59 |
| 12 Month: | $19.62 |
CHEESE
For the week, blocks increased 2.25 cents with nine loads traded. Barrels decreased 5 cents with 38 loads traded. Dry whey increased 1.75 cents with one load traded. Milk supply is termed as tight but adequate. This leaves sufficient milk for cheese production. The decline of cheese prices over the past two days might be an indication as to price strength through the rest of the year. Inventory is plentiful but should have decreased in November. This will be confirmed on the cold storage report next week.
BUTTER
Cream supplies are termed as mixed. Cream is moving around but with some difficulty in some cases. Freight costs continue to rise, and the industry remains short of truck drivers. This sounds like a broken record, but it is a reality and one that is not going to change anytime soon. Butter demand remains strong ever though holiday orders are filled. For the week, butter declined 3 cents with 42 loads traded. Grade A nonfat dry milk increased 5.25 cents with eight loads traded.
OUTSIDE MARKETS SUMMARY
March corn gained 2 cents, ending at $5.9325. January soybeans gained 8 cents, closing at $12.8525, with January soybean meal up $7.20 per ton, closing at 3789.50. March wheat gained 4.50 cents, ending at $7.75. December live cattle declined $0.52, closing at $134.75. January crude oil fell $1.52, closing at $70.86 per barrel. The Dow fell 532 points, closing at 35,365, while the NASDAQ declined 11 points, ending at 15,170.
