MD_DA950 Dairy Markets at a Glance Report 36 - Released on September 10, 2021 CME GROUP CASH MARKETS (9/10) BUTTER: Grade AA closed at $1.7850. The weekly average for Grade AA is $ 1.7869 (+0.0194). CHEESE: Barrels closed at $1.4775 and 40# blocks at $1.7900. The weekly average for barrels is $1.4669 (+0.0844) and blocks, $1.7625 (+0.0455). NONFAT DRY MILK: Grade A closed at $1.3575. The weekly average for Grade A is $1.3550 (+0.0310). DRY WHEY: Extra grade dry whey closed at $0.5300. The weekly average for dry whey is $0.5200 (+0.0300). CHEESE HIGHLIGHTS: Cheese plant managers report staffing shortages during a seasonally stronger demand season are creating some sleepless nights. Unfortunately, some do not foresee a near-term solution to the staffing issues. Cheese sales are steady to stronger for the most part. School orders have provided strength from the food service sector, and pizza cheese demand is keeping those producers busy. Block inventories are reported as tighter than barrels on the spot market. Milk availability loosened slightly during the holiday weekend, but overall milk availability has tautened in the late summer. Spot milk prices were reported from $1.00 under to $.75 over Class. The large block-over-barrel price gap remains a thorn in the side of resolute market tones, but most price movements this week have been bullish. BUTTER HIGHLIGHTS: Cream continues to tighten, and availability was reportedly less than typical Labor Day holiday weekend surplus levels. Butter churning schedules vary, but plant staff shortages and trucking issues continue to impact production. Additionally, some cream rejections due to heat were noted in the Midwest. Butter inventories are stable to growing as some plant managers are building stock ahead of the holidays. Retail sales are steady. Food service orders are, so far, unhindered by the Delta variant. Bulk butter overages range from 0.01 to 0.08 cents above market this week. FLUID MILK: U.S. milk production is steady to lower. Milk output is following seasonal patterns and trailing off in some regions. In parts of other regions, predominantly along the southern edge of the country, milk handlers note that milk output may be leveling off as the seasonal low point nears. Class I sales are steady to lower as the school milk pipeline gets refilled. Spot milk loads in the Midwest were more available, due to lighter demand from school milk and in part to the Labor Day weekend holiday. Reported spot milk prices ranged from $1 under to $.75 over Class III. Eastern condensed skim markets are firming. Cream supplies are balanced in the East and slightly more available in the Central and parts of the West. Lighter demand over the holiday weekend and slowing ice cream production are contributing to the increase in cream access. Cream multiples for all Classes are 1.30-1.40 in the East; 1.27-1.38 in the Midwest; and 1.18-1.30 in the West. DRY PRODUCTS: Prices for low/medium heat nonfat dry milk moved higher this week. Lower overall seasonal milk output and stronger pulls to Class I are contributing factors. High heat nonfat dry milk prices also moved higher. Dry buttermilk prices are mixed, being steady to slightly lower in the Central and East, but higher in the West. Dry whole milk prices are unchanged. Prices for dry whey are steady in the East, steady to lower in the Central region and lower in the West. Market tones for dry whey are not assured one way of the other. Animal feed whey prices are steady to lower. The price range for whey protein concentrate 34% is steady but aside from a few favored brands, market demand is lackluster. The price range for lactose is unchanged, but buyer interest is light. Shipping challenges are having a big effect on market conditions. Rennet casein prices moved higher, and acid casein prices are steady to higher. ORGANIC DAIRY MARKET NEWS: According to Federal Milk Market Order 1, July 2021, organic whole milk utilization totaled 11.6 million pounds, declining from 13.3 million pounds the previous year. The utilization of organic reduced fat milk in July this year, 14.0 million pounds, increased from 13.4 million pounds a year earlier. A national organic dairy cooperator's September 2021 pay price, per cwt., is $29.24. The August 2021 simple average price for organic whole milk, half gallon containers at surveyed supermarkets in twenty-nine U.S. cities is $4.15, up 3 cents from last month. Organic dairy retail ad numbers climbed 54 percent this week. The average price for 1-pound organic butter, $5.79, is up 45 cents over the previous survey period. The difference between the half gallon conventional milk price, $2.64, and the half gallon organic milk price, $4.17, is an organic premium of $1.53. The price spread between organic and conventional milk, half gallon package, declined $0.45 from the last retail survey. NATIONAL RETAIL REPORT (DMN): The most advertised dairy item this week is conventional 48 to 64-ounce containers of ice cream. The national weighted average price is $3.08, unchanged from last week. The most advertised cheese item, conventional 8-ounce shred cheese, has a weighted average advertised price of $2.56, up $0.37 from last week. Conventional cheese ads decreased 31 percent. Conventional yogurt ads are up 4 percent. The national weighted average advertised price for conventional half gallon milk is $2.64, up $0.40 from last week. Conventional milk ads increased 17 percent this week, and organic milk advertisements jumped 60 percent. JULY DAIRY PRODUCTS (NASS): Butter production was 152 million pounds, 0.8 percent below July 2020, and 5.4 percent below June 2021. American type cheese production totaled 464 million pounds, 2.3 percent above July 2020, and 2.3 percent above June 2021. Total cheese output (excluding cottage cheese) was 1.15 billion pounds, 3.5 percent above July 2020, and 2.4 percent above June 2021. Nonfat dry milk production, for human food, totaled 157 million pounds, 5.3 percent below July 2020, and 15.9 percent below June 2021. Dry whey production, for human food, was 76.0 million pounds, 6.2 percent below July 2020, but 8.4 percent above June 2021. Ice cream, regular hard production, totaled 65.5 million gallons, 11.0 percent below July 2020, and 2.3 percent below June 2021. AUGUST PRODUCER PRICE INDEX (BLS): The August PPI for all food is 228.9, up 13.6 percent from 2020. The dairy products index is 209.4, up 0.9 percent from a year ago. The following are the August year to year percentage changes for selected products: fresh whole milk, -4.1; cheese, -5.1; and butter, +9.5. Information for the period September 6 - 10, 2021, 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