Market Reports

CME spot butter jumped 9ȼ this week. July butter production fell 0.8% short of the frantic pace of July 2020, but was still historically high. There is plenty of butter socked away to last through the fall and holiday baking season.

Heat, humidity, and smoke are sapping milk yields around the nation. Higher Class I sales from coast to coast, coupled with sweltering temperatures, has tightened milk supplies noticeably. Meanwhile, students are back in school and all are eligible for free lunches with a carton of milk on the side.

There is an abundance of milk in both the United States and Europe, but momentum is slowing. The combination of summer temperatures and back-to-school demand has tightened milk supplies noticeably.

The spot Cheddar block market found the gas pedal this week, moving convincingly upward. Spot block prices closed higher than the previous session on four out of the week’s five trading days. Yet, as cheese prices moved up at the CME this week, dry whey prices moved down.

Even as cheese production has slowed, balancing operations continue to press forward at a steady clip. Dryers have also continued to run solidly, absorbing available condensed skim. As a result, supplies of nonfat dry milk (NDM) are plentiful but demand from both domestic and international sources has kept tension in the market. Milk production continues to dissipate seasonally but volumes remain plentiful overall.

Although this year’s losses have none of last year’s frenzy, the ink is just as red. But it may be a while before lower prices translate to less milk.