MD_DA950 Dairy Markets at a Glance Report 38 - Released on September 20, 2019 * Updated butter highlights. CME GROUP CASH MARKETS (9/20) BUTTER: Grade AA closed at $2.1150. The weekly average for Grade AA is $2.1370 (-.0750). CHEESE: Barrels closed at $1.6550 and 40# blocks at $2.0500. The weekly average for barrels is $1.7870 (-.0610) and blocks, $2.1240 (+.0250). NONFAT DRY MILK: Grade A closed at $1.0825. The weekly average for Grade A is $1.0720 (+.0260). DRY WHEY: Extra grade dry whey closed at $.3975. The weekly average for dry whey is $.3975 (+.0085). CHEESE HIGHLIGHTS: Cheese market tones are quavering after reaching recent year highs late last week and early into this one. Contacts have been questioning a potential market correction and have asked how emphatic it would be. A drop of nearly $.20 on blocks and nearly $.30 on barrels in a span of three days answered their question. According to Western contacts, customers are pushing back at the higher prices. Generally, cheese production remains active, although milk availability was somewhat tight in the Midwest. Contacts reported spot milk prices from $.25 to $1.50 over Class. They say offers of spot milk were noticeably quiet. Cheddar blocks are tighter in the Western region. As is the norm, cheese stocks vary from region to region and plant to plant. Western contacts point out that blocks are tighter, hence the late summer runup of market prices. BUTTER HIGHLIGHTS: The current market tone for butter is mixed throughout the country. Butter production is stable in the East, but has slowed in the Central and West regions as some manufacturers are keeping churning schedules light in order to manage end-of-year inventories. In general, the demand for butter is sluggish, but is expected to improve ahead of the upcoming baking season needs. This week, bulk butter pricing varies among the regions: East, 5.0 cents to 8.0 cents over the market; Central, 1.5 to 4.0 cents above the market; West, 0.0 cents to 7.5 cents over the market, with various periods and averages used. FLUID MILK: Milk production across much of the country is steady to lower, following seasonal patterns. While industry contacts report some discounted milk loads in Idaho, milk is generally tighter in the Central and Northeast. Contacts suggest stronger than anticipated Class I sales and milk moving into other regions may be reasons behind the tightness. Spot milk prices in the Central region ranged from $.25 to $1.50 over Class III. Condensed skim market conditions are stable. Cream is widely available. The seasonal demand for cream is slowing while it has become more available from school-related skimming. Cream multiples for all Classes are 1.24 to 1.35 in the East, 1.20 to 1.35 in the Central, and 1.09 to 1.27 in the West. DRY PRODUCTS: Low/medium heat nonfat dry milk (NDM) prices are higher across the country this week. Industry contacts attribute this to strong demand for Class III cheese fortification and requests from Mexico. High heat NDM prices are steady to higher on light trading. Dry buttermilk prices moved higher at the bottom of the range in all regions. Demand is starting to pick up ahead of the fall/winter season. Dry whole milk prices are unchanged. Inventories are mostly in balance with contractual and spot needs. Dry whey prices are mixed. The Central price range expanded, the Western price range contracted, and the Northeastern price range held steady. Market participants expect the confirmation of African swine fever in South Korea and the Philippines will add a bearish tone to the market. Prices for lactose and for WPC34% are unchanged. Acid and rennet casein prices are higher, in part due to higher prices for some other dairy products. ORGANIC DAIRY MARKET NEWS: The Agricultural Marketing Service (AMS) reports July estimated sales of total organic fluid milk products increased from a year earlier. July 2019 total organic milk products sales were 217 million pounds, up 4.6 percent from July 2018, but down 3.3 percent compared to January-July 2018. Total organic whole milk products sales for July 2019, 95 million pounds, were up 11.4 percent compared with July last year and up 2.3 percent compared with the year-to-date in 2018. July low fat milk (1%) sales declined 17.4 percent from the previous year and are down 12.1 percent compared to January- July 2018. NATIONAL RETAIL REPORT (DMN): Ice cream in 48-64 oz containers continues to be the most advertised dairy product, with an increase of 36 percent from the previous week. The number of total dairy advertisements for conventional and organic grew by 7 percent and 104 percent, respectively. The national weighted average advertised price for conventional milk half gallons is $1.70, compared to $3.70 for organic milk half gallons. The total number of ads for milk noticeably increased for conventional and organic, with an increase of 135 percent and 64 percent, correspondingly. Conventional cheese total advertisements decreased 4 percent, but organic cheese ads increased 89 percent. AUGUST MILK PRODUCTION (NASS): Milk production in the 24 major States during August totaled 17.4 billion pounds, up 0.4 percent from August 2018. July revised production, at 17.5 billion pounds, was up 0.4 percent from July 2018. The July revision represented an increase of 38 million pounds or 0.2 percent from last month's preliminary production estimate. Production per cow in the 24 major States averaged 1,986 pounds for August, 18 pounds above August 2018. The number of milk cows on farms in the 24 major States was 8.78 million head, 48,000 head less than August 2018, and 1,000 head less than July 2019. OCTOBER ADVANCED CLASS PRICES (FMMO): The base Class I price for October 2019 is $17.84 per cwt., a decrease of $0.01 per cwt when compared to September 2019. A Class I differential for each order's principle pricing point (county) is added to the base price to determine the Class I Price. For October 2019, the advanced Class IV skim milk pricing factor is $7.84 per cwt, the Class II skim milk price is $8.54 per cwt, and the Class II nonfat solids price is $0.9489 per pound. The two-week product price averages (per pound) for October 2019 are: butter $2.2665, nonfat dry milk $1.0477, cheese $1.8531, and dry whey $0.3684. Information for the period September 16 - 20, 2019, issued weekly Published by: Dairy Market News - Madison, WI MIKE BANDLI, (608)422-8592 Email: mike.bandli@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