CME: Cheddar Production At Four Year Low

US - Spot cheese and butter prices started December with declines, but milk futures were higher yesterday across the board. DEC-FEB rose 19¢, writes Alan Levitt.
calendar icon 2 December 2011
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Cheese futures were mostly higher as well. Butter futures, on the other hand, finished mostly in the red.

Whey prices continue to rise and NDM prices have steadied in the low $1.40s, according to Dairy Market News’ weekly survey.

Dry whey from the Midwest is trading for mostly 61.5¢- 65.0¢, up half a cent from the prior week. “Spot load availability is tight,” DMN says.

Whey futures increased 1.6¢ in the JAN-SEP12 contracts. NDM from the Western region is reported at $1.37-$1.4525, says DMN. The market tone is “mixed,” DMN adds.

Manufacturers are booking export sales for Q1 at current prices, but there is some concern over the large (-7.7¢) drop in the California Weighted Average Price this week.

As has been the case since March, heavy volumes of milk went into the butter churn in October.

Butter production was 146.1 million lbs., up 19.6 per cent from a year ago, according to USDA’s “Dairy Products” report released this afternoon. Powder production was heavy as well, with October NDM/SMP output of 142.7 million lbs., up eight per cent.

Less milk went into the cheese vat. Cheddar cheese production in October was just 249.9 million lbs., down 5.8 per cent from last year (see chart) and the lowest monthly figure (daily-average basis) since October 2007.

Mozzarella production was up just 1.4 per cent, but output of other varieties increased eight per cent, led by big gains in colby and monterey jack. That left total cheese production for the month at 896.1 million lbs., up 1.7 per cent, USDA says.

Further Reading

- You can view the full report by clicking here.

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