THE LAND — OCTOBER 29/NOVEMBER 5, 2021
MILKER’S MESSAGE www.thelandonline.com — “Where Farm and Family Meet”
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USDA reports butter stocks down, cheese stocks up This column was written for the marketing week ending Oct. 29. U.S. butter stocks keep heading lower after falling below those a year ago in August for the first time since June 2019. News and information for Minnesota and Northern Iowa dairy producers The U.S. Department of Agriculture’s latest Cold Storage report shows the cents on the week (the lowest since Aug.8), Cream has been available and is meeting demand MIELKE MARKET Sept. 30 butter inventory at 330.1 mil17.5 cents lower than they were on Oct. 1, in recent weeks in the West but stakeholders are WEEKLY lion pounds. This is down 32.6 million and $1.1075 below that week a year ago. now trying to find a home for it after the fire at an pounds or 9 percent from the August By Lee Mielke Idaho plant. Food service butter demand is holding level, which was revised 4.2 million The barrels saw their Oct. 29 finish at steady, says Dairy Market News, but contacts report pounds lowered than what was reported $1.82 per pound, down 4.25 cents on the retail demand has softened. Retailers are looking to a month ago. Stocks were down 13.8 million pounds week, 7.5 cents above their Oct. 1 perch, 71 cents or 4 percent below September 2020. below a year ago, and an inverted 14.5 cents above See MIELKE, pg. 18 American-type cheese stocks jumped to 844.1 mil- the blocks. lion pounds, up 17 million pounds or 2.1 percent There were four sales of block on the week and 22 from August and were 71.5 million pounds or 9.3 for the month of October, up from 18 in September. percent above those a year ago. The August level The week saw 11 cars of barrel trade places and 49 was revised up 3.5 million pounds. for the month, down from 69 in September. The “other” cheese category climbed to 592.2 milCheesemakers are busy according to Dairy Market lion pounds, up 8.6 million pounds or 1.5 percent News. “Plant managers report existing employees from August, and 31.5 million or 5.6 percent above a working overtime to fulfill needs is the strategy, and year ago. even then there are shifts not being staffed.” The resulting total cheese inventory stood at 1.46 Cheese customers have also been very busy. billion pounds. This is up 25.5 million pounds or 1.8 Demand for all varieties is strong. Midweek spot percent from August and 104.6 million or 7.7 permilk prices ranged from Class III to $1 over. Even cent above a year ago. with plant outages in the region and growing milk Chicago-based StoneX Dairy Group says it expect- output, milk usage kept offers quieter this week, according to Dairy Market News. ed cheese stocks to come in lower than forecast given how weak milk production was in September, Looking westward, food service cheese demand but instead were 45 million pounds heavier than remains steady and retail sales are even, year over they forecast. Cheese plants were likely getting year. Export interest is healthy, says Dairy Market more than enough milk in September, explains News, but ports are still congested and shipping is StoneX. “While the weak milk production does raise not without difficulties. Production at some plants is the upside risk for cheese prices, the relatively limited by staffing shortages, but other facilities are heavy inventories are bearish for prices.” able to operate at capacity and work through ample milk supplies. Cheese inventories are plentiful and StoneX added, “With milk production down and cheese production still strong, butter production has growing, although block availability was said to be likely taken a hit — which is allowing inventories to looser than barrels. Some contacts believe tighter barrel supplies may be contributing to the inversion. be pulled down.” CME butter had a good week, closing Oct. 29 at Butter stocks were 7 million pounds lower than $1.94 per pound. This is up 10.5 cents on the week the StoneX forecast; but they add the caveat, (the highest since June 10, 2020), up 19.25 cents for “Stocks last year were very heavy, so being down 4 percent still leaves butter stocks at adequate levels. the month, and 55 cents above a year ago. There were 14 sales on the week and 25 for the month, With milk production expected to stay weak and cheese production expected to stay relatively strong down from 121 in September. we are going to continue to pull butter stocks down Butter producers say cream remains tight, if not and that should be supportive for prices.” tighter. Production schedules are reportedly stunted, due primarily to plant employee and driver shortagn es. There have been recent improvements in hiring, Cash dairy product prices at the Chicago but the timeframe for a more normal production sitMercantile Exchange ended October with cheese uation is unpredictable, according to plant managheading lower and butter, powder, and whey climbers. As manufacturing geared for holiday retail order ing, as traders anticipated the next Global Dairy surges, bulk butter availability has declined and Trade auction on Nov. 2 and the September Dairy prices have done the opposite. Butter market tones Products report on Nov. 4. are notably bullish, says Dairy Market News. Some The cheddar blocks closed the last Friday of believe this shift could be short-lived while others October at $1.6750 per pound. This is down 13.5 are “viewing 2022 through a different lens.”
