Market Reports

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.

While US milk output is down from the peak volumes reported in April and May, it is still historically strong. USDA’s Dairy Market News cites strong demand for cheese across the nation but butter and powder orders begin to soften. Weather and Washington way heavy on demand of corn and soybean crops.

Manufacturers report that cheese demand is robust and that spot milk for manufacturing is available and affordable. While cheese manufacturers would be keen to capitalize on the available milk, a plethora of issues are complicating operations and preventing additional output.

USDA’s Dairy Market News reports that domestic cheese demand is “healthy”. Exporters are busy moving product they contracted to sell last month when prices were lower, which tightens the supply of fresh cheese available for sale in Chicago.

Class III and Class IV futures settled today not far from where they finished last Friday.Those prices are generally disappointing for dairy producers, but they are not low enough to significantly slow milk output. The dairy herd is massive, and it’s likely to stay that way for a while.