PAGE 22
www.thelandonline.com — “Where Farm and Family Meet”
THE LAND — NOVEMBER 13/NOVEMBER 20, 2020
Robust milk prices have producers increasing herds tinues to move strongly through retail channels as well as drawing support from government purchase programs. September butter stocks of 343.9 million pounds dropped by 7.4 percent from August and represented the largest August to September inventory decline in three years. September butter stocks remain 18.3 percent higher than last year.” MIELKE MARKET WEEKLY n By Lee Mielke You’ll recall September milk production totaled 18 billion pounds, up 2.3 percent from September 2019. The latest Dairy Products report shows where that milk went. The October Class IV price is $13.47 per cwt., up 72 cents from September, but $2.92 below a year Total cheese output crept to 1.1 billion pounds, up ago. The Class IV average now stands at $13.52, 0.6 percent from August, but a bearish 1.1 percent down from $16.23 a year ago and $14.06 in 2018. above September 2019. Year-to-date total cheese output stands at 9.8 billion pounds, up 0.5 percent Dairy margins were again mixed over the second from a year ago. half of October, continuing a recent trend of strengthening in nearby marketing periods while Wisconsin produced 276.4 million pounds of the weakening slightly further out the curve in second September total, up 0.7 percent from August but 1.4 and third quarter, according to the latest Margin percent below a year ago. California output, at 192.8 Watch from Chicago-based Commodity & Ingredient million pounds, was up 0.7 percent from August, but Hedging LLC. 5.4 percent below a year ago. Idaho contributed 87.1 million pounds, up 7 percent from August and 4.1 The Margin Watch stated, “Strength in nearby percent above a year ago. marketing periods continues to be paced higher trade in cheese, despite what was generally conItalian-type cheese totaled 462.8 million pounds, strued as a bearish monthly production report. The up 4.4 percent from August, but 1.7 percent below a U.S. Department of Agriculture reported September year ago. Year-to-date, Italian output is at 4.2 billion milk production at 18 billion pounds, up 400 million pounds, down 1 percent. or 2.35 percent from 2019 and much higher than American-type cheese totaled 432.5 million anticipated. In addition, USDA reported the milking pounds, down 3.3 percent from August, but 4 percow herd at 9.366 million head, up 5,000 from cent above a year ago. Year-to-date, American was August and 33,000 higher than last year. Moreover, at 3.97 billion pounds, up 1.8 percent. dairy cow slaughter has averaged 9.3 percent less Mozzarella output climbed to 365.8 million than last year and 5.2 percent lower than the hispounds, down 2.6 percent from a year ago, with torical average over the past 12 weeks, suggesting year-to-date at 3.3 billion pounds, down 1 percent that dairy producers have been expanding their from 2019. herds to increase milk output.” Cheddar, which is traded at the Chicago The Margin Watch said Cold Storage data provided Mercantile Exchange, fell to 306.1 million pounds, some context for the strong cheese market as “Total cheese stocks contracted 1.3 percent in September to down 17.9 million pounds or 5.6 percent from August; but was 22 million or a whopping 7.7 per1.36 billion pounds, falling below prior-year levels for the first time since March. The decline was espe- cent above September 2019. Year-to-date, cheddar is cially pronounced for American cheese which fell 2.2 at 2.85 billion pounds, up 2.3 percent. percent to 772.6 million pounds. Despite the continChurns produced 152.1 million pounds of butter, ued challenges for foodservice demand, cheese conup 500,000 pounds or 0.3 percent from August; but was 7.8 million pounds or 5.4 percent above a year ago. Year-to-date, butter is at 1.6 billion pounds, up a hefty 6.5 percent from 2019. Dry whey totaled 74.9 million pounds, down 4.9 percent from August and 17.3 percent below a year ago, with year-to-date at 730.6 million pounds, down 0.2 percent. Stocks totaled 74.9 million pounds, down 4.9 percent from August and 17.3 percent below a year ago. Nonfat dry milk output fell to 124.3 million This column was written for the marketing week ending Nov. 6. The October Federal order Class III benchmark milk price vaulted $5.18 to $21.61 per hundredweight this week. This is the highest October price since 2014 with a little more to come — thanks in large part to Uncle Sam’s Farmers to Families Food Box program. The November futures contract was trading late morning Nov. 6 at $23.21; but December was at $18.63, with January 2021 at $17.18 per cwt. The 2020 Class III average is at $17.89, up from $16.37 a year ago.
MARKETING
For more news briefs, visit the “Nuts and Bolts” section at www.TheLandOnline.com
pounds, down 19.9 million pounds or 13.8 percent from August, but 6.5 million or 5.5 percent above a year ago. Year-to-date, powder sits at 1.4 billion pounds, up 1.8 percent from 2019. Stocks fell to 233.2 million pounds, down 37.4 million or 13.8 percent from August, and 17.6 million or 7 percent below a year ago. Skim milk powder output jumped to 72.5 million pounds, up 11.3 million pounds or 18.3 percent from August and 13.7 million pounds or 23.3 percent above a year ago. Year-to-date, skim milk powder is at 453 million pounds, up 10.6 percent from a year ago. n The loud crash you heard the first week of November was cheddar block cheese plunging 44 cents to a Nov. 6 close of $2.3425 per pound. This ends five consecutive weeks of gain, but were still 32.75 cents above a year ago. The barrels rolled from their new record high $2.53 per pound to a $2.3175 close. This is down 21.25 cents on the week, ending seven weeks of gains, 1.25 cents below a year ago, but at a more typical 2.50 cents below the blocks. There were only two cars of block traded on the week at the CME and 14 of barrel. Midwest cheese producers reported changes in production levels this week to Dairy Market News as some were seeking less milk and limiting production. Customers were buying hand-to-mouth and, with prices where they were, no one wants to be holding extra stocks anticipating the price declines. Spot milk was available at prices still around or just under Class III. Western retail cheese demand has remained strong, but while government purchases and fast food outlets are moving good volumes of cheese, total food service is underperforming. Export sales have receded, due to the higher prices and, in some cases, manufacturers had to discount cheese to move it overseas. Contacts say domestic market prices and freight costs are making it harder to compete in international markets. Parts of the nation face increasing Covid-19 cases so marketers are concerned about further restrictions which could hamper recovery of the food service sector. Manufacturers and buyers are cautious in cheese production and storage that could lose value. Stocks are moderate. n Butter climbed to $1.4375 per pound on Nov. 4, but closed two days later at $1.43. This is up 4 cents on the week, but 60.75 cents below a year ago on 26 sales on the week. Plant managers relay that cream availability is opening up from local and western regions and cream suppliers are setting Thanksgiving week deals. Butter makers say inventory is moving and See MIELKE, pg. 23
