MD_DA950

     Dairy Markets at a Glance

     Report 42 - Released on October 18, 2019

     CME GROUP CASH MARKETS (10/18)
     BUTTER: Grade AA closed at $2.1150. The weekly average for Grade AA is $2.1265 (+.0385).
     CHEESE: Barrels closed at $2.0000 and 40# blocks at $1.9675. The weekly average for barrels
     is $2.0140 (+.0910) and blocks, $2.0275 (-.0335).
     NONFAT DRY MILK: Grade A closed at $1.1700. The weekly average for Grade A is $1.1685
     (+.0105).
     DRY WHEY: Extra grade dry whey closed at $.2850. The weekly average for dry whey is $.2975
     (-.0120).
          CHEESE HIGHLIGHTS: Cheese production continues at steady to active rates in the United
     States. Milk bound for cheese vats is limited in the Midwest, as more milk loads head
     southeast into bottling and processing plants. Hence, the $.75 to $1.50 premiums on spot
     milk loads in the Central region. Market prices are hindering cheese demand. A growing
     number of Class III producers report $2+ market prices have buyers opting to purchase for
     short-term requirements exclusively. Still, even with some ups and downs on CME market
     prices, both cheese blocks and barrels made their way above $2 this week. Also, block and
     barrel prices have nearly converged, which is generally viewed as an indicator of market
     stability.
          BUTTER HIGHLIGHTS: As the Q4 holidays approaches, butter sales remain very active
     throughout the country. Consequently, cold storage butter stocks continue to decline in most
     manufacturing plants. Cream volumes are reported as readily available for churning, but also
     enough in order to cover other processing needs such as sour cream, cream cheese, and ice
     cream. In the U.S., this week, bulk butter pricing varies by regions: East, 5.0 cents to
     8.0 cents over the market; Central, flat market to 3.0 cents above the market; West, 5.5
     cents under to 7.5 cents over the market, with various periods and averages used.
          FLUID MILK: Milk output is mixed in the country this week. In the East, milk volumes
     off the farms vary throughout the region. Midwest milk production is slightly coming up.
     Market participants report seeing component levels are increasing as well. Milk output has
     grown in many parts of the West region. However, milk in the Pacific Northwest is fairly
     level. Class I demand is stable, as bottlers are ordering a set amount of milk loads for
     education institutions throughout the U.S. Several Class II plants have reduced ice cream
     processing. Condensed skim spot loads are readily available in the West, but loads are
     limited in the East. Cream continues to be available, and some market participants relay
     seeing more offers on the spot market. F.O.B. cream multiples are 1.27-1.33 in the East,
     1.22-1.32 in the Midwest, and 1.05-1.24 in the West.
          DRY PRODUCTS: Low/medium heat nonfat dry milk (NDM) spot prices have heightened. The
     demand from Class III and the bakery sector is improving. Market tone continues to
     strengthen. High heat NDM prices are higher. Spot trading activities have picked up. Dry
     buttermilk prices are mixed this week. The demand from bakery buyers has put some upward
     pressure on prices. Dry whole milk prices are unchanged on the price range. The demand is
     stable and improving ahead of the upcoming year-end holidays. Whey powder prices are mixed
     throughout the regions. Some buyers were actively purchasing on the spot market. Market
     conditions remain unsettled. Whey protein concentrate 34% prices are mostly steady. Interest
     continues to be mixed based upon end user requirements. Lactose prices are unchanged this
     week. Impacts from the African swine fever continue to put pressure on prices and market
     demand. Acid and rennet casein prices are steady to higher. Casein market conditions are
     steady to firming.
          ORGANIC DAIRY MARKET NEWS: The Agricultural Marketing Service (AMS) reports estimated
     US sales of total organic milk products decreased from a year earlier. August 2019 sales
     were 208 million pounds, down 6.6 percent from August 2018 and down 3.8 percent compared to
     January-August 2018. This week's retail survey noted that just three advertised organic
     dairy products represent total of organic ads by commodity. Results show organic milk
     accounted for 51 percent of ads, cheese ads claimed 26 percent, and organic yogurt comprised
     the remaining 23 percent. Of those commodities, organic cheese posted the largest jump, 26%
      from the previous period, while organic yogurt grew 2 percent. Organic milk moved in the
     other direction, down 20 percent.
          NATIONAL RETAIL REPORT (DMN): After being the most advertised dairy item in the United
     states in the five consecutive weeks prior to this week, conventional ice cream in 48 to 64
      oz containers took the third place this week, selling at $3.10. The national weighted
     average advertised price for conventional milk half gallons is $2.72, compared to $3.88 for
     organic milk half gallons, an organic price premium of $1.16. Conventional cheese ad numbers
     decreased 6 percent. The weighted average price for conventional 8 oz. shred cheese is
     $2.33, down 7 cents from last week. The weighted average advertised price for conventional
     yogurt in 4 to 6 oz. containers is $0.48, down 1 cent from last week.

     Information for the period October 14 - 18, 2019, issued weekly

     Published by:
     Dairy Market News - Madison, WI
     JESSICA MUELLER, 608-422-8589
     Email: jessica.mueller@usda.gov

     Additional Dairy Market News Information:
     Dairy Market News (DMN) by Phone: (608)422-8602
     DMN Website: https://www.ams.usda.gov/market-news/dairy
     DMN MARS (My Market News): https://mymarketnews.ams.usda.gov