Market Reports

Some of these dynamics were foreshadowed by declines at last week’s Global Dairy Trade auction. Every product lost ground at the auction, though the biggest declines were seen by butter, buttermilk powder, and whole milk powder.

Grocers are still worried about empty shelves and willing to pay whatever it takes to get their hands on more butter. But in just a few weeks they will be done stocking up for the holiday baking season, and prices are expected to plummet.

Barrels eligible for delivery to Chicago are in short supply. Fresh Cheddar may be tight, but there is plenty of cheese in storage. Cheese production may fall short of potential, but output will still be ample.

U.S. milk output grew decisively last month in comparison to the very low production reported in August 2021. It’s likely that today’s milk-cow herd is already slightly larger than it was in September 2021. Milk production climbed in every region of the country except the Great Lakes states.

On Tuesday CME spot butter jumped 7ȼ to $3.24 per pound, a lofty price for a market that was $1.79 a year ago. After a brief stay at the peak, butter journeyed back downhill, but not before it logged the four highest trading sessions in history.

The butter market leapt to an all-time high Wednesday and just kept climbing, but lofty values didn’t scare away buyers. The last time that butter prices were even close to this high, the selloff was swift.