MILK
Class III futures held well despite the further decline of barrel cheese price moving the block/barrels spread to 39.50 cents. Milk futures were mixed as traders seem to believe the downside of barrels may be limited. Milk production continues to slowly improve. There was quite a bit of disruption in the Buffalo, New York area with the record-breaking snowstorm. The impact was more on distribution in the area. That will not have much of an overall impact on supply and prices. As a result of schools closing for the Thanksgiving holiday, balancing plants are receiving limited loads of milk as milk is being diverted to manufacturing for a few days. Milk is generally readily available with some areas having to source their milk from other areas but finding sufficient supply without difficulty. Milk production continues to run above year-earlier levels as farmers push cows to help pay the bills. This results in more milk being available for both manufacturing and bottling. Milk production is expected to remain strong through the rest of the year. With the holidays approaching, all classes of milk are in strong demand for both general consumption and holiday products.
AVERAGE CLASS III PRICES
| 3 Month: | $20.82 |
| 6 Month: | $20.39 |
| 9 Month: | $20.30 |
| 12 Month: | $20.29 |
CHEESE
Cheese inventory declined in October as was expected. American cheese stocks declined 12.3 million pounds totaling 830.8 million pounds and 1% below a year ago. Swiss cheese inventory declined 1.7 million pounds to a total of 21.5 million pounds and nearly the same as last year. Other cheese stocks declined 7.7 million pounds totaling 595.9 million pounds and 2% above a year ago. Total cheese inventory declined 21.6 million pounds totaling 1.448 billion pounds and about steady with a year ago. This indicates strong demand and the potential for supply to be lower than at the end of last year.
BUTTER
Inventory declined 27.8 million pounds totaling 239.6 million pounds. This is 14% below a year ago. Inventory is catching up as September inventory was 18% below the previous year. Butter has nearly regained the loss of Friday making the end of last week look like an aberration. However, I expect to continue to see volatility through the end of the year.
OUTSIDE MARKETS SUMMARY
December corn declined 2.75 cents closing at $6.5675. January soybeans declined 7 cents closing at $14.2975 with December soybean meal down $2.80 per ton closing at $408.60. December wheat declined 7.75 cents ending at $7.9150. December live cattle gained $0.25 ending at $153.80. January crude oil. The Dow closed 398 points higher at 34,098 while the NASDAQ gained 150 points closing at 11,174.
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