MD_DA950 Dairy Markets at a Glance Report 43 - Released on October 29, 2021 CME GROUP CASH MARKETS (10/29) BUTTER: Grade AA closed at $1.9400. The weekly average for Grade AA is $1.9320 (+0.1125). CHEESE: Barrels closed at $1.8200 and 40# blocks at $1.6750. The weekly average for barrels is $1.8370 (+0.0130) and blocks, $1.7495 (-0.0145). NONFAT DRY MILK: Grade A closed at $1.5575. The weekly average for Grade A is $1.5440 (+0.0130). DRY WHEY: Extra grade dry whey closed at $0.6300. The weekly average for dry whey is $0.6230 (+0.0170). CHEESE HIGHLIGHTS: Although labor issues persist, cheesemakers across the country relay busy production schedules as many plants operate at, or close to, capacity. Spot milk prices are reported to range from flat Class to $1.00 over Class III this week in the Midwest. Export interest is steady. Demand is stable to stronger across food service and retail sectors, although logistics and supply chain issues are still evidenced by delayed deliveries and/or partial fulfilment of orders. Block inventories are abundant, but barrels are less available. Block and barrel prices are still inverted. Cheese market tones are unsteady. BUTTER HIGHLIGHTS: Cream is tighter in the East and Central regions. Stakeholders worked to reallocate loads of Western cream following an incident that left a large manufacturer offline and unable to receive deliveries. Some butter makers, limited by higher cream multiples and staffing shortages, are running lighter production schedules. Plant managers are prioritizing print production to meet surging holiday demand, which has contributed to lower fresh bulk availability and higher bulk prices. Older inventories, however, are still available to meet near term needs, though contacts say that unsalted stocks are tighter than salted. Food service sales and retail orders continue to be steady. Butter market tones are bullish. Bulk butter overages range from 2 to 13 cents above market this week. FLUID MILK: The East on the farm milk production is increasing, and some areas received milk loads from other parts of the region to supplement their current needs. Bottling is steady to increasing. In the Midwest, milk output continues to rise with improving milk per cow numbers. Spot milk prices are higher this week. California milk production is flat to higher. Class I sales are stable. Arizona milk output is level to higher. Bottling sales declined. In New Mexico, milk production is increasing, but Class I demand has dipped. The Pacific Northwest is seeing less than projected milk output. Class I sales are steady. Milk production is increasing in the mountainous states of Idaho, Colorado, and Utah. Bottling orders are lower. Cream availability is mixed depending on time and location needed. Across the country, the f.o.b. cream multiple ranges 1.35-1.48 in the East, 1.33-1.43 in the Midwest, and 1.18-1.38 in the West. DRY PRODUCTS: The low/medium heat nonfat dry milk market is steady to higher in the mostly series across regions. The market has not been too hesitant to pay higher prices for availability. Mexico is showing steady interest. Dry buttermilk prices are steady to higher in the East, Central, and West regions. Interest is mixed. Limited churning factors into tight inventories. Dry whole milk prices are lower this week. Production is light. Dry whey prices are higher in the East and West, but steady to higher in the Central region. Demand is stable as export sales improve. The whey protein concentrate 34 percent prices are unchanged to higher. Production is mixed as inventories tighten. Demand is good. Lactose prices are steady to lower. Spot interest is lackluster. Inventories are growing. Prices of acid and rennet casein are steady this week. INTERNATIONAL DAIRY MARKET NEWS: WESTERN EUROPEAN OVERVIEW: Western European milk production is nearing the seasonal low point for the year. With output volumes at or below last year’s levels, milk supplies are tight. Manufacturers are seeing costs increase for milk and cream used for processing. While seasonal milk flows typically turn the corner in November and begin increasing, industry contacts do not see signs of much year over year growth for the whole of western Europe over the next few months. Farmers face higher feed costs. Even with favorable milk prices, margins may not give farmers the incentives to pursue higher milk production in the near term. EASTERN EUROPE OVERVIEW: Eastern European milk production is trailing down along seasonal patterns. However, officials in Belarus, see great opportunity for growth. The dairy industry in Belarus has grown by more than 10 percent in the last five years. The needs of the domestic market are being met, and farmers, processors and traders are aligned to sell dairy products into export channels. Improving cow productivity is seen as an avenue for increasing gross milk production. OCEANIA OVERVIEW: AUSTRALIA: While the Australian milk production season is off to a slow start, industry analysts expect the country may still generate as much, or more milk than last season. Rain and cool weather have restrained milk outputs in the first few months of the milk season, but farmers expect the moisture will aid in pasture and forage growth later in the summer, reducing the need to buy supplemental feed later. In addition, many Australian farmers had a strong carry over of forages from last year. The lower feed costs may encourage some farmers to expand their milk production. Analysts anticipate expanded opportunities for dairy exports and strong dairy commodity prices should help improve dairy farm economics in Australia. NEW ZEALAND: New Zealand milk production for the 2021-22 season is lagging behind last season. As expected, September milk production was below the record levels set last year, but it is also the lowest it has been since 2017. Cold, wet weather and low light levels have hindered pasture performance and milk production. Warmer, drier conditions have become more common in October, but industry sources think that October milk intakes may also be weak before improving in November and December SOUTH AMERICA OVERVIEW: Milk production in the main dairy basins of Argentina, Uruguay and Chili is continuing on the seasonal incline. There are some reports milk output may be peaking now and in the coming weeks. In Argentina, temperatures are reaching 70 and higher, keeping dairy herds comfortable and some rain showers are boosting forage on farms. Whole milk powder and skim milk powder markets are displaying secure, firming undertones. Supply chain challenges for many operations in the dairy industry are affecting various dairy product deliveries/demands/prices. Manufacturers’ customers are ordering additional dairy product supplies to cover year-end needs. Operations are revving up production schedules for holiday products and demands. NATIONAL RETAIL REPORT (DMN): Total conventional dairy ads decreased 2 percent from last week. Organic dairy ads decreased 47 percent. Ads for conventional ice cream in 48- to-64-ounce containers, the most advertised conventional item this week, are up 31 percent from last week. The national weighted average advertised price for butter in a 1-pound package is $3.36, up 15 cents from last week. This week, conventional yogurt ad numbers are down 39 percent while organic yogurt ads dropped 41 percent. Conventional cheese advertisements increased 8 percent from last week. The most advertised cheese item this week is conventional 8-ounce shred cheese. The national weighted average advertised price for conventional milk half gallons is $2.59, compared to $4.13 for organic milk half gallons, resulting in an organic price premium of $1.54. Organic half gallon milk is the most advertised organic item. SEPTEMBER COLD STORAGE (NASS): On September 31, U.S. cold storage holdings of butter totaled 330.1 million pounds, down 9 percent from the previous month and down 4 percent from September 2020. Natural American cheese holdings total 844.1 million pounds, 2 percent higher than the previous month and 9 percent more than September 2020. Total natural cheese stocks were 1.459 billion pounds, up 2 percent from last month and up 8 percent more than September 2020. JULY MAILBOX PRICES (FMMO): In July 2021, mailbox milk prices for selected reporting areas in Federal milk orders averaged $17.03 per cwt, down $0.50 from the June 2021 average and down $1.61 per cwt from the July 2020 average. The component tests of producer milk in July 2021 were: butterfat, 3.82 percent; protein, 3.10 percent; and other solids, 5.78 percent. SEPTEMBER MARKET SUMMARY AND UTILIZATION REPORT (FMMO): During September, 12.2 billion pounds of milk were received from Federally pooled producers. This volume of milk is 21.0 percent higher than the September 2020 volume. Regulated handlers pooled 3.5 billion pounds of producer milk as Class I products, down 1.3 percent when compared to the previous year. The all-market average Class utilization percentages were: Class I = 29 percent, Class II = 13 percent, Class III = 36 percent, and Class IV = 22 percent. The weighted average statistical uniform price was $17.37 per cwt, $0.31 higher than last month and $1.12 higher than last year. RETAIL PRICES FOR CONVENTIONAL AND ORGANIC MILK, OCTOBER 2021 (FMMO): A survey of retail prices conducted by the Federal Milk Market Order administrators found conventional whole milk prices for October 2021 average $3.69 per gallon. October organic whole milk prices average $4.21 per half gallon. In October, conventional reduced fat (2 percent) milk gallons average $3.65 and organic reduced fat (2 percent) milk half gallons average $4.20. Information for the period October 25 - 29, 2021, issued weekly Published by: Dairy Market News - Madison, WI DANIEL JOHNSON, 688.422.8605 Email: daniel.johnson4@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