Monday Morning Huddle
12 October 2020

Highlights From Last Week

Nearby Class III Support Persists as Butter, NFDM Move Lower

Cheese prices rallied further last week with both the block and barrel markets increasing as government-induced demand persists. The block Cheddar weekly average increased for the eighth consecutive week while barrels increased for the third week in a row, with the past two weeks each seeing double-digit gains in both price and percentage. This week’s barrel Cheddar weekly average increase of 19.8 cents or 10.9% was the strongest weekly average gain since the week ending June 5, and it was the first time since the week ending July 31 that the average settled higher than $2 per pound. USDA reports that available cheese inventory is tight after several weeks of strong demand, with some end users pausing purchases in anticipation of lower prices on the horizon. Midwest spot milk is available for $1.00 to $1.50 per hundredweight over Class during the lowest milk producing weeks of the year.

Butter prices fell as low as $1.3950 per pound last Thursday, a five-month low, only to recover slightly on Friday to $1.4125. Butter’s weekly average fell 4.4% week over week, the steepest drop in two months as production picks up seasonally and weak foodservice demand is imminent throughout the Northern Hemisphere winter given the lack of outdoor dining options and lower indoor capacity. Nonfat dry milk weekly averages had been trending higher for seven weeks but experienced a small loss (-0.1%) as the market is in need of continued strong export volumes as milk from Oceania expands and milk powder availability increases around the globe.

Last Week’s Reports & Analysis

Dairy Products Report (Aug ’20)
Total cheese production sank sharply lower versus prior year and marked the steepest year over year decline since July 2011. The production decline followed two months of higher cheese production, including June’s impressive 4.1% gain, to add another twist in a volatile year. The decline was… Full Report

US Dairy Export and Import Volume Analysis (Aug ’20)
Nonfat dry milk exports have set a monthly record for the four-month period between May and August, a strong growth trend spurred by competitive US prices and tight supply from New Zealand throughout the summer months. The US nonfat dry milk price has been lower versus both New Zealand and the EU each week since April… Full Report

Reports This Week

USDA Crop Progress – Tuesday, October 13
Weekly EU Dairy Commodity Prices – Wednesday, October 14
Commercial Disappearance – Wednesday, October 14
Fonterra Pre-GDT Offer Volume Analysis – Thursday, October 15
National Dairy Products Sales Report (NDPSR) – Thursday, October 15
USDA Weekly Dairy Cow Slaughter – Thursday, October 15
USDA Dairy Market News Midpoint Prices – Thursday, October 15
HighGround Dairy’s Monthly Forecast – Thursday, October 15
HighGround Dairy’s Monthly Forecast Webinar (REGISTER) – Friday, October 16

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