MILK
There is no support in underlying cheese prices with limited buying interest. Cheese prices are back to the level they were in April as bearishness prevails in the market. The milk supply is not overwhelming the market with some plants indicating milk supplies are tight. This is location specific as there is spot milk available for purchase if plants are willing to pay for it. Milk production has not been improving as much as anticipated with the milder weather improving cow comfort. Lower cow numbers than a year ago have had an impact with some farms having been affected by bird flu. However, with milk production growth lower than expected, demand has not improved as much as anticipated leaving sufficient supply available for demand. Cow numbers may continue to increase as culling has slowed significantly, but the nation's herd is not expected to exceed a year ago anytime soon. However, farmers are doing an excellent job increasing production per cow.
AVERAGE CLASS III PRICES
| 3 Month: | $19.31 |
| 6 Month: | $19.16 |
| 9 Month: | $19.02 |
| 12 Month: | $18.98 |
CHEESE
Cheese prices are down to the lowest level they have been since April. The anticipation of higher demand, reduced milk production due to a tight heifer supply, and reduced inventory has not provided long term support. Prices experienced a seasonal increase, peaking earlier than usual and are not finding continued support from end of the year demand. Buyers are comfortable with the current supply having purchased earlier and are now purchasing on an as-needed basis.
BUTTER
The butter price continues in a sideways pattern showing little reason for price strength. Retail demand is improving but food service demand is less than desired. This may echo throughout the rest of this year as the supply is higher than a year ago. Cream supply is readily available with churns operating on full schedules.
OUTSIDE MARKETS SUMMARY
December corn closed down 1.00 cent per bushel at $4.3000, January soybeans closed down 8.00 cents at $10.2225 and December soybean meal closed down $1.10 per ton at $295.10. December Chicago wheat closed down 7.00 cents at $5.6550. December live cattle closed steady. December crude oil is down $2.21 per barrel at $68.17. The Dow Jones Industrial Average is up 304 points at 44,293 with the NASDAQ is up 12 points at 19,299.
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