MILK:
Just when one thinks something can be put behind us and we can move forward to focus on other things in the market, A railroad union rejected the tentative contract deal to avoid a strike. Now, that is back on the drawing board again. There had been only four of the 12 unions that had ratified the contract. This will again throw the whole economy into uncertainty and could have a devastating impact on grain farmers, dairy farmers, and livestock producers. There has been difficulty for quite some time getting feed to the West and Southwest. That has gotten better but this could have a devastating impact at a time when grain needs to move. This will not only impact farmers but consumers as well. It could cause shortages and substantially raise prices for all. Milk futures did not find much upside potential with both Class III and Class IV futures closing mixed. Class III futures for the first three months showed the most pressure with double-digit losses and November falling 45 cents. The rest of the contacts were mixed with Class IV contracts mixed across the board. Milk prices will likely remain choppy and sideways for now.
AVERAGE CLASS III PRICES:
| 3 Month: | $21.48 |
| 6 Month: | $21.13 |
| 9 Month: | $21.01 |
| 12 Month: | $20.93 |
CHEESE:
Barrel cheese price had a nice increase during September, but that may have come to a halt as price has been choppy lately. Barrels are in tighter supply than blocks resulting in barrels being higher. The spread between blocks and barrels has narrowed but is expected to continue to remain inverted. Demand has been variable which has kept the market choppy. Time is running out as far as buying for gift boxes and other specialty venues. The months of November and December generally see steady buying but not with the volume as is generally seen in September and October.
BUTTER:
Butter demand is termed as good domestically and strong internationally. U.S. price is quite a bit higher than world price, but foreign buyers are looking for product. Current demand is keeping inventory from gaining on last year's level with supply slowly decreasing. This should continue to support price.
OUTSIDE MARKETS SUMMARY:
December corn jumped 15 cents closing at $6.9825. November soybeans gained 7 cents ending at $13.74 with October soybean meal up $5.80 per ton closing at $410.70. December wheat jumped 57.75 cents closing at $9.38. October live cattle declined $0.62 ending at $144.70. November crude oil fell $1.80 ending at $90.85 per barrel. The DOW lost 94 points ending at 29,203 while the NASDAQ lost 110 points closing at 10,542.
