Fluid Milk and Cream - Western U.S. Report 42

Cooler weather is moving into the western region, strengthening milk production. Some contacts in California report year-over-year and month-to-month increases in milk output, though the overall supply situation remains somewhat tight due to high heat in Southern California despite cooler evenings. Arizona and New Mexico are experiencing some cooling, which is helping to keep milk production steady. The Pacific Northwest is seeing cool nights, good milk production, and available spot loads. 

Farms in Washington report positive Highly Pathogenic Avian Influenza (HPAI) tests in dairy cows. Producers are working closely with veterinary experts and regulatory agencies to ensure biosecurity measures are in place and to limit further transmission. No impact on overall milk output or availability has been reported at this time. 

Class I demand is steady with no week-over-week changes. Class II demand is up as holiday baking approaches and cream is drawn for extended-shelf-life production. Class III remains steady with contractual loads being met. Class IV is marginally down due to increasing Class II and Class III processing, although butter manufacturers are not reporting any scheduling delays or issues receiving contractual loads. Condensed skim demand is strong, and availability remains tight, with contacts stating they are buying anything they can find.

Thursday Midday Dairy Market Update - Cheese, Butter and Dry Whey Surge; NFDM Falls

OUTSIDE MARKETS SUMMARY:

CORN:	2 Lower
SOYBEANS:	12 Lower
SOYBEAN MEAL:	$3.70 Lower
LIVE CATTLE:	$1.95 Higher
DOW JONES:	429 Points Higher
NASDAQ:	96 Points Lower
CRUDE OIL:	$2.95 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 12.25 cents to close at $1.6525 with one load traded. There were eight bids remaining at the close. The barrel cheese price finally moved for the first time in nearly a month to increase 11.75 cents to close at $1.5700 with no loads traded. There were 12 bids outstanding by the close. The dry whey price set a new record high again Thursday, at 89.0 cents, an increase of 0.50 cents. There were two loads traded. Class III futures are 10 to 48 cents higher. The butter price closed 4 cents higher at $1.3450 with four loads traded. There were four bids and 85 offers remaining at the close. Grade A nonfat dry milk fell 6 cents to close at $2.15 with six loads traded. Class IV futures are 17 to 39 cents lower. Butter futures are 0.5 to 2.025 cents higher. Dry whey futures are 0.4 to 1.975 cents lower. Cheese futures are 0.1 to 5.2 cents higher. Nonfat dry milk futures are 3.475 to 5.425 cents lower.

Thursday Morning Dairy Market Update - Cheddar Cheese Blocks Rally

OPENING CALLS:

Class III Milk Futures:	12 to 20 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	0.25 to 0.5 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Mixed
Soybean Futures:	2 to 4 Lower
Soybean Meal Futures:	$1.90 to $4.30 Higher
Wheat Futures:	Mixed

MILK:

Class III futures traded 7 to 45 cents higher Wednesday on cheese and dry whey strength. Overnights started the night with an 18 cent higher move on the November contract, showing the rally isn't over yet. Class IV has been quiet with nonfat dry milk (NFDM) falling and butter bringing support.

CHEESE:

Another strong cash market for cheese Wednesday with cheddar blocks climbing another 8.75 cents closing at $1.53. That is 14.5 cents higher than Friday, Oct. 9, or 19 cents higher than one week ago. It is safe to say that holiday buying is here as the availability of cheese has not changed, yet the buying has increased substantially.

BUTTER:

It appears like holiday buying may have finally begun for butter as well. Butter climbed 3.5 cents during the spot market Wednesday, and futures responded with the November contract also climbing over 3.5 cents. Eighty-two percent butterfat butter is going to continue to have tight supplies through the end of the year, yet 80% has plenty to hit the shelves.