The KDM Dairy Report 10/07/2023

Cheese: Milk availability is somewhat tight in the Northeast and contacts in the region note some spot loads of milk are moving at above Class prices. In the Midwest and West, spot availability is generally limited. Some Midwestern contacts say spot milk prices were lower this week, compared to previous weeks, but all reported prices remained above Class III. Cheese production is mixed in the Midwest, as some processors have some downtime in the coming weeks, while others are running active schedules. In the Northeast and West, cheese production is steady. Contacts in the Northeast say cheese inventories remain comfortable, despite recent declines in production. Cheddar cheese demand is outpacing other American- type cheeses in the Northeast. Contacts in the Northeast and West, say cheese demands are steady in both retail and food service markets. Meanwhile, contacts in the West report moderate to light export cheese demand. In the Midwest, cheese demand is mixed.  (USDA Cheese Highlights)

Butter: Cream volumes are tight in the Northeast and West. In the Midwest spot cream availability has firmed, while contacts are reporting multiples starting in the high 1.20s and low 1.30s this week. Contacts in the region are unsure when spot cream will become more available for churning. Butter churning is steady in the East and Central regions. In the West, butter production is mixed. Some butter makers in the region are running strong to steady schedules, while others have downtime but anticipate resuming production later this month. Retail and food service demands for butter are strong in the West, while export interest is moderate to light. In the Central region, contacts say demand for butter is steady. In the East food service butter demand is steady, but retail sales are softening. Some East region supermarkets are offering butter at low retail prices to encourage customers to shop at their stores. Butter prices on the CME reached new highs this week, though some Central region contacts expect a near-term downward correction. Bulk butter overages range from 4.0 to 15.0 cents over market value.  (USDA Butter Highlights)

Dry Whey: Dry whey prices moved higher on the bottom of the range price series and both ends of the mostly series this week. Trading is busy at and above the $.30 mark. Processors and buyers/end users are relaying tighter supplies. Some have said offers are shifting into the mid-$.30s. Milk availability in the region is slowly beginning to increase, but cheese production is mixed. Some processors in the region relayed scheduling some downtime this week and next. Regarding whey, some processors are suggesting that limited spot availability will remain through the month. End users say they are looking ahead to Q1 to set up contractual agreements. High protein concentrates, namely WPC 80% and WPC 80% instant, are viewed with bullish lenses right now. A number of contacts say a shift into high proteins, while milk supplies have been seasonally snug, has been a booster to dry whey market health. Animal feed whey trading was quiet, but a little more active than last week. Spot prices moved higher on the bottom of the animal feed whey range.  (USDA Dry Whey)