MILK
Weather has been good for cow comfort and milk production. Milk production per cow is expected to remain strong and farmers have been able to improve genetics and feeding balance rations that push milk production. This may be helping to improve the bottom line. Farmers have been doing a very good job of getting the most milk out of their cows providing sufficient supply to the market. Bottlers and manufacturers have not had to worry about a tight supply through the rest of the year. There was concern early in the year as heavy culling was taking place due to high feed costs. Higher feed costs may again return but for now, prices have been sideways to lower. Higher feed prices now would be the result of increased fuel and labor costs. Class III futures reflected the movement of cheese price while Class IV reflected the movement of butter. Prices may be nearing a threshold but there is no way of determining at what level that is.
AVERAGE CLASS III PRICES
| 3 Month: | $21.12 |
| 6 Month: | $20.76 |
| 9 Month: | $20.62 |
| 12 Month: | $20.59 |
CHEESE
Cheese remains in good demand but there are some reports of slowing at the retail level. However, this may not impact the market to any great degree in the near term. Buyers that needed to purchase ahead for holiday recutting and packaging have done that. The general buying now is for ongoing regular orders and fill in orders as we move closer to the holidays. It is uncertain whether we will see a surge in demand through the end of the year. Food prices have increased substantially and may increase further affecting the buying power of the consumer.
BUTTER
Buyers remain aggressive looking for butter to increase ownership to fill orders and have supply for unexpected orders. Churning has improved as cream has been more available and many plants have finished periods of downtime for maintenance. There will be a desire to build inventory when possible but that will not take place anytime soon.
OUTSIDE MARKETS SUMMARY
December corn slipped 0.75 cents closing at $6.5725. January soybeans declined 9.50 cents closing at $14.4050 with December soybean meal down $1.40 per ton at $406.00. December wheat gained 4.75 cents ending at $8.1850. December live cattle gained $0.05 closing at $151.57. December crude oil declined $3.09 closing at $85.87 per barrel. The Dow declined 211 points ending at 33537 while the Nasdaq declined 127 points closing at 11,196.
