MILK
Milk futures suffered further losses again today even though barrel cheese and butter prices increased. Only November Class III futures and October and November Class IV contracts closed positive. Pressure was seen on contracts through much of 2023 as traders seemed to realize that the inability of prices to move higher during this time of year does not bode well for prices after holiday demand is filled. USDA will release the September Milk Production report on Thursday which I think will show strong milk output during the month. If that continues, inventory of cheese will end the year higher than the previous year. This could spell trouble as demand may slow due to continued strong inflation and higher food prices. The Global Dairy Trade auction today showed the trade weighted average declined 4.6%. There were 146 bidders showing up today with 29,402 metric tons sold. Anhydrous milk fat declined 2.7% to $5,661 per metric ton or $2.57 per pound. Butter price declined 2.6% to $4,851 per metric ton or $2.20 per pound. Cheddar cheese price declined 3.9% to $4,769 per metric ton or $2.16 per pound. Skim milk powder declined 6.9% to $3,250 per metric ton or $1.47 per pound. Whole milk powder declined 4.4% to $3,421 per metric ton or $1.55 per pound. Lactose remained unchanged at $1.310 per metric ton or $0.59 per pound. Buttermilk powder and sweet whey powder were not offered at this event.
AVERAGE CLASS III PRICES
| 3 Month: | $20.72 |
| 6 Month: | $20.23 |
| 9 Month: | $20.14 |
| 12 Month: | $20.12 |
CHEESE
The positive aspect is that cheese prices are holding. The negative aspect is that prices have not been able to trend higher. Buyers have been able to purchase cheese out in the country through other channels without the need to come to the spot market more aggressively. Overall demand has remained good with some reports that retail demand is beginning to slow.
BUTTER
Price has been able to hold well but may not be able to move back to the record high. Lighter inventory has been a concern that has spurred more aggressive buying. However, buyers may soon feel comfortable with supply through the end of the year and may be less aggressive. Price is expected to remain historically high for the foreseeable future but not as high as it currently is.
OUTSIDE MARKETS SUMMARY
December corn declined 2.50 cents closing at $6.81. November soybeans dropped 13.25 cents closing at $13.72 with December soybean meal falling $9.20 per ton closing at $401.80. December wheat declined 11.50 cents closing at $8.4950. October live cattle gained $0.60 closing at $148.47. November crude oil dropped $2.64 closing at $82.82 per barrel. The DOW gained 338 points closing at 30,524 while the NASDAQ gained 97 points closing at 10,772.
