MILK
Milk futures closed lower, eliminating Tuesday's gains. The strength of barrels and the new record high were not enough to offset the concern over the block's further decline. Class IV futures fell due to the large decline in butter. The October Class III contract pushed above $24.00 around spot trading but could not hold falling back significantly.
The Global Dairy Trade Auction trade-weighted average increased by 0.8% during the event which took place on Tuesday. The average price was $3,883 per metric ton or $1.76 per pound with 38,814 metric tons sold. Anhydrous milk fat declined 1.2% to $7,220 per metric ton or $3.27 per pound. Butter declined 1.7% to $6,546 per metric ton or $2.97 per pound. Cheddar cheese increased 2.9% to $4,441 per metric ton or $2.01 per pound. Lactose increased 3.5% to $896 per metric ton or $0.41 per pound. Skim milk powder gained 2.2% to $2,809 per metric ton or $1.27 per pound. Whole milk powder increased 1.5% to $3,448 per metric ton or $1.56 per pound. Mozzarella increased 4.5% to $5,351 per metric ton or $2.43 per pound.
AVERAGE CLASS III PRICES
| 3 Month: | $23.33 |
| 6 Month: | $21.98 |
| 9 Month: | $21.07 |
| 12 Month: | $20.64 |
CHEESE
The barrel cheese price moved to another record higher diverging from blocks. This widened the block/barrel spread to an inverted 37.75 cents. This is a record spread difference between blocks and barrels. Fewer cheese plants can switch from block to barrel production to take advantage of the price disparity. Years ago, more plants had that ability.
BUTTER
The decline in the butter price of this magnitude during this time of year is certainly a surprise. However, the price is substantially higher so far this year than it has been historically higher with buyers purchasing on price dips to prepare for either a tighter supply or higher demand as the year progressed. It appears the high has been in for the year.
OUTSIDE MARKETS SUMMARY
December corn closed up .25 cent per bushel at $4.1275, November soybeans closed up 8.00 cents at $10.1400 and December soybean meal closed down $.10 per ton at $321.40. December Chicago wheat closed steady at $5.7575. October live cattle closed down $0.50 at $178.30. October crude oil is down $0.28 per barrel at $70.91. The Dow Jones Industrial Average is down 103 points at 41,503 with the NASDAQ down 55 points at 17,573.
