MILK
After a little bit of a pause in production growth in some areas of the country, it seems milk production in those areas is increasing this week. Milk production in the Midwest has been steadily increasing as weather has been good and many farmers have put up very good forage this summer. Milk production is expected to show an increase in October with increased production per cow on the October Milk Production report to be released next Monday. Farmers have been doing an excellent job improving milk production this year. Components are reported to be higher than a year ago at this time. Bottling demand has been strong but is expected to slow for school accounts due to the Thanksgiving holiday and remain somewhat lower through the end of the year. Production of specialty dairy products for the holidays will be ongoing for the next few weeks. Spot milk prices are a little stronger this week with reports of premiums of around $1.00 above class. More milk should become available to the spot market through the rest of the year as bottling demand slows.
AVERAGE CLASS III PRICES
| 3 Month: | $21.25 |
| 6 Month: | $20.82 |
| 9 Month: | $20.64 |
| 12 Month: | $20.61 |
CHEESE
Many cheese plants indicate they are running on mostly full schedules or at least as full as they can depending on the workforce. Most indicate demand remains strong but recently there has been a bit more cheese available to the market. The spread of 20 cents between blocks and barrels is causing concern over the ongoing strength of blocks. However, as we have seen in the past, each is running on its own supply and demand and a wide block/barrel spread or a wide inverted block/ barrel spread does not necessarily mean a bullish or bearish scenario. Price can remain that way for an extended period.
BUTTER
Butter production is increasing resulting in churns pulling greater volumes of cream. Manufacturers want to fill demand as well as build inventory. It is reported that churns are producing more butter than in previous years at this time. The desire to build inventory at current prices indicates manufacturers and buyers do not anticipate much of a price decline. Significantly lower inventory will take time to replenish.
OUTSIDE MARKETS SUMMARY
December corn declined 1.50 cents closing at $6.6525. January soybeans fell 28 cents closing at $14.2925 with December soybean meal down $3.30 per ton closing at $406.60. December wheat declined 10.75 cents closing at $8.1750. December live cattle increased $0.52 closing at $151.80. December crude oil declined $1.33 per barrel ending at $85.59. The Dow slipped 39 points closing at 33,554 while the Nasdaq declined 175 points closing at 11,184.
