MILK
A major concern that is developing in the potential for further weakness of milk prices is continued high feed prices. There is potential for grain prices to hold or even increase further depending on total amount of grain harvested and demand. If milk prices continue to weaken, income over feed will decline. This will tighten margins for dairy operations quite significantly. The signup for the Dairy Margin Coverage program for 2023 is currently open and provides a nice addition to risk management for dairies. If margins tighten significantly over the next months, culling will likely increase again. South Dairy Trade reports were released today. This provides information on the amount of dairy products and prices moved through ports in Argentina and Uruguay. Argentina had 12,490.05 tons of dairy production moving to 27 destinations at an average price of $4,145.44 per ton during the first half of September. Whole milk powder price declined 6.4 percent from the previous report to $3,889.82 per ton or $1.77 per pound. Skim milk powder declined 5.8 percent to $3,811.06 per ton or $1.73 per pound. Semi-hard cheese declined 1.0 percent to $4,818.10 per ton or $2.19 per pound. Hard cheese increased 1.3 percent to $6,325.53 per ton or $2.87 per pound. Butter declined 3.7 percent to $4,974.67 per ton or $2.26 per pound. Dairy products moved through ports in Uruguay totaled 9,068.76 tons moving to 25 destinations at an average price of $4,294.83 per ton. Whole milk powder declined 2.7 percent to $4,95.32 per ton or $1.86 per pound. Skim milk powder jumped 9.1 percent to $4,266.39 per ton or $1.94 per pound. Semi-hard cheese declined 1.5 percent to $4,907.58 per ton or $2.23 per pound. Hard cheese gained 4.0 percent to $6,427.00 per ton or $2.92 per pound. Butter fell 8.3 percent to $5,250.17 per ton or $2.28 per pound.
AVERAGE CLASS III PRICES
| 3 Month: | $20.66 |
| 6 Month: | $20.08 |
| 9 Month: | $19.99 |
| 12 Month: | $20.00 |
CHEESE
Barrel price has not been below blocks since August 4. There were only three days during August were barrels drop below blocks before moving to an inverted market. Barrels have been above blocks quite a bit this year. Barrels have been in tighter supply with buying more aggressive. Much of the strong buying for the holidays might be wrapped up for now.
BUTTER
It is possible butter may begin to head lower. Not consistently, but the overall trend may be lower. A good amount of buying might have been accomplished already with fill in buying to satisfy orders continuing until the holidays.
OUTSIDE MARKETS SUMMARY
December corn gained 4.75 cents closing at $6.8625. November soybeans gained 10 cents closing at $13.82 with December soybean meal up $6.90 per ton closing at $415.60. December wheat declined 4 cents ending at $8.3475. October live cattle gained $0.07 closing at $151.67. December crude oil gained $0.74 closing at $85.32 per barrel. The DOW gained 337 points ending at 31,837 while the NASDAQ gained 247 points closing at 11,199.
