Market Reports

The cheese markets got off to a particularly rough start, with big losses both Tuesday and Wednesday. But after a few nights of better rest and healthier habits, they recovered well. Cheese prices are near year-ago levels, suggesting that demand has kept pace with strong production.

The butter market began the year at a relatively lofty height, suffered a few spectacular setbacks, and then climbed anew. It spent an unprecedented 57 trading sessions at $3 or above and set a new all-time high of $3.2675 per pound in early October.

CME spot Cheddar blocks dropped and barrels fared even worse. Cheese output remains strong, and there are fears that demand will no longer keep pace.

The factors that propelled milk prices above $25 per cwt. this summer are no longer in play. But those extremely bullish forces will continue to impact the markets for a little while longer, as exporters fill orders signed months ago when most U.S. dairy product prices were more competitive than they are today.

Dairy markets headed into the Thanksgiving weekend with a double portion of USDA reports and finished with a mountain of data to swallow from today’s Dairy Products report. News of lower milk output in Australia and New Zealand made for appetizing side dishes together with news that the Federal Reserve might increase interest rates at a trot rather than a gallop.

CME spot butter managed to keep climbing through Wednesday before it finally turned back. Butter’s resilience has taken the market by surprise. Retailers bought butter aggressively in September and October to stock up for the holidays.