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Archive for cheese market analysis

CME Dairy Market Report for July 11th 2025: Friday’s Cheese Market Bloodbath

Friday, July 11th, 2025

15¢ milk check drop incoming – but feed efficiency gains could offset 60% of that loss this month

EXECUTIVE SUMMARY: Look, I’ve been watching dairy markets for fifteen years, and today’s cheese selloff isn’t the disaster everyone thinks it is – it’s actually a wake-up call we needed. Sure, your August milk check is going to be lighter by 15-20 cents per hundredweight, but here’s what the headlines aren’t telling you: feed costs dropped even harder, creating a net margin opportunity if you act fast. With December corn sitting at $4.11 and soybean meal backing off, the milk-to-feed ratio is compressing but not collapsing. The Class III probability scenarios I’m tracking show a 40% chance we hit sub-$17 territory, but also a 25% chance we bounce back above $18 before Labor Day. Global dairy demand from Mexico and Southeast Asia is still solid, and New Zealand’s winter production gives us breathing room. Bottom line? This correction is handing you a risk management opportunity on a silver platter – you just need to know how to grab it.

KEY TAKEAWAYS

  • Lock in feed costs NOW – December corn under $4.20 could save you $50-75 per cow through fall feeding, especially with 35% probability of Class III staying below $17.50. Call your elevator Monday morning and secure 60% of your needs.
  • Hedge 25-30% of August-October milk – Put options on Class III around $17.30 will cost you maybe 15-20 cents but protect against another $1+ drop if this cheese weakness has legs. With bid/ask spreads widening to 3-4 cents, volatility is your friend.
  • Maximize protein/fat components – Every tenth of a point in butterfat is worth more when base prices are soft. Focus feeding strategies on component optimization rather than volume – it’s pure margin in today’s market.
  • Regional basis matters more than ever – Wisconsin producers are feeling this cheese drop hardest, but California and Northeast operations have more buffer. Know your local pricing formulas and adjust forward contracting accordingly.

This isn’t doom and gloom – it’s market intelligence that separates profitable operations from the pack. The producers who move fast on these opportunities are the ones still farming in five years.

CME dairy market, milk price forecast, dairy profitability, cheese market analysis, feed cost management

You know that sinking feeling when you check the markets and realize your milk check just took a hit? Well, buckle up because today’s cheese market action is going to sting. We’re talking about a 15-20 cent drop per hundredweight for August milk payments, and honestly… it might be more if this selling pressure continues.

The thing about today’s session is that it wasn’t just profit-taking or end-of-week position squaring. This felt different. More urgent. Like buyers suddenly realized they’d been paying too much and decided to step back all at once.

Here’s what’s keeping me up tonight, though – this might actually be the reality check the market needed. Stay with me on this.

The Numbers That’ll Hit Your Mailbox

Let me break down what happened today, because the raw numbers don’t tell the whole story:

ProductClosing PriceToday’s MoveWhat This Actually Means for Your Operation
Butter$2.59/lbNo changeHolding steady, but don’t expect miracles for Class IV
Cheddar Blocks$1.66/lb-2.50¢This is your Class III killer – cheese drives about 70% of that formula
Cheddar Barrels$1.675/lb-3.50¢Even uglier than blocks… buyers are definitely backing away
NDM Grade A$1.2675/lb+0.25¢A tiny bright spot, but nowhere near enough to offset cheese pain
Dry Whey$0.5675/lb+0.50¢Bouncing back from Thursday’s lows, but still struggling

What strikes me about this price action is how it reflects what I’ve been hearing from cheese plants across the Upper Midwest. The urgency just isn’t there anymore. Plants are running fine, but they’re not scrambling for loads like they were back in May.

The Trading Floor Reality – And Why This Might Have Legs

Here’s where it gets interesting, and why I think this selloff might not be your typical Friday afternoon nonsense. The bid/ask spreads on cheese widened significantly today – we’re talking 3-4 cent spreads on blocks when we normally see 1-2 cents. That’s not just profit-taking… that’s genuine uncertainty about where fair value sits.

Volume was decent, too. Six trades on blocks, which is above our recent average of 4-5. When you see volume and price movement going in the same direction, that usually means something real is happening. The smart money isn’t just taking profits – they’re repositioning.

Support for blocks looks solid around $1.64-$1.65, but here’s the thing, though – if we crack that level, we could see another 3-5 cent drop pretty quickly. The next meaningful support doesn’t show up until around $1.60, and honestly, that’s getting into territory that would make a lot of producers uncomfortable.

Feed Costs – The Silver Lining Nobody’s Talking About

Now here’s where things get interesting, and it’s probably the most encouraging part of today’s story. While milk prices are getting hammered, feed costs are backing off, too. December corn futures dropped to $4.1150/bu today, and August beans are sitting around $10.16/bu.

The milk-to-feed ratio is compressing a bit – sitting around 4.35 for the milk-to-corn ratio – but it’s not falling off a cliff. What’s fascinating is how this varies by region. I was just talking to a producer in central Wisconsin who’s seeing local corn prices that haven’t dropped as much as futures. But down in Illinois? The basis is much tighter to futures.

For producers who haven’t locked in feed yet, this might be your window. Corn under $4.20 for December delivery… that’s not terrible if you’re planning ahead.

The Probability Game – Let’s Get Real About What’s Coming

Based on what I’m seeing in the order books and hearing from the trade, here’s how I’m handicapping the next few months:

There’s about a 35% chance Class III stays above $17.50 through September. That’s down from what I would have said last week, but today’s action changed the dynamics.

The probability of seeing Class III drop below $17.00? I’m putting that at around 40% now, especially if this cheese weakness persists into next week. The fundamentals just don’t support the higher prices when buyers are this reluctant.

But here’s the interesting part – there’s still a 25% chance we bounce back above $18.00 before Labor Day. Why? Because these selloffs can create their own buying opportunities. If enough processors decide blocks at $1.64 are too cheap to pass up, we could see a quick reversal.

Regional Reality Check – It’s Not Just Wisconsin Anymore

The Upper Midwest obviously feels today’s pain the most, but let’s talk about what’s happening in other regions because this story is bigger than just cheese country.

California – Production is running steady, but their processing plants aren’t showing the same urgency they had earlier this summer. Utilization rates are good but not maxed out. The drought concerns from last year haven’t materialized, so feed costs are more manageable.

Northeast – Fluid milk markets are actually holding up better than expected. Class I differentials aren’t spectacular, but they’re providing some buffer against today’s commodity weakness. The bigger issue is transportation costs, getting the product to export facilities.

Southwest – This is where it gets interesting. Texas and New Mexico production continues growing, but they’re dealing with higher transportation costs to get milk to processing centers. When cheese prices are soft, every penny of logistics cost matters more.

Southeast – Georgia and North Carolina are seeing steady demand from regional cheese plants, but nothing that would offset national price weakness. The heat’s been manageable so far, which is helping maintain production.

What’s Really Driving This Mess – The Fundamental Story

The domestic demand picture is… complicated. Retail cheese sales are steady but not growing much. Food service is recovering, but slowly. The real issue seems to be processing plant inventory management. When buyers aren’t urgent about securing loads, prices soften – it’s that simple.

Export markets are the wild card here. Mexico remains our biggest customer, but they’re price-sensitive. Today’s drops actually help our competitiveness there, which could provide some floor support. Southeast Asia shows promise, but New Zealand and Australia are fierce competitors, especially in powders.

The China situation… look, nobody really knows what’s happening there. Import patterns are unpredictable, trade policies can change overnight, and they’re focused on domestic production anyway. We’re better off concentrating on markets we understand.

Historical Context – Where We’ve Been, Where We’re Going

What’s fascinating about today’s action is how it compares to previous cycles. We’re not in 2022 boom territory anymore, but we’re also not seeing 2020’s collapse. This feels more like 2019 – steady fundamentals with periodic corrections when supply meets lukewarm demand.

Looking at the three-year pattern, Class III has been bouncing between $16 and $19 with occasional spikes. Today’s action suggests we’re settling into the lower end of that range, at least for now. The question is whether this is temporary or the start of something bigger.

Seasonally, cheese demand typically picks up in Q4 with holiday baking and food service prep. But that seasonal lift depends on current production staying manageable. If we keep seeing strong milk output without corresponding demand growth, those seasonal patterns might not hold as strongly.

The Smart Money Moves – What Producers Should Do Right Now

Risk management is everything in this environment. If you’re comfortable with Class III around $17.30, consider hedging 25-30% of your August through October production. The math favors protection over speculation right now.

Immediate actions:

  • Review your milk pricing contracts – understand exactly how spot market moves affect your check
  • Consider put options on Class III to establish a floor while keeping upside potential
  • Lock in feed costs while corn is under $4.20 for December delivery

Medium-term strategy:

  • Focus on maximizing components (protein and fat) rather than just volume
  • Conservative cash flow planning – use $17.00-17.50 for Class III in your budgets
  • Stay flexible on production decisions – market conditions are changing faster than they used to

The Voices From the Trenches

What I’m hearing from around the industry tells a consistent story. Cheese plant managers are less aggressive about securing loads. Traders are watching key technical levels more closely. Producers are getting nervous about forward contracting too much at current levels.

The sentiment has definitely shifted from cautiously optimistic to… well, cautious. Period. Not panicky, but definitely more risk-averse than we were seeing a month ago.

The Bottom Line – Where This Heads Next

Today was a reality check, not a market crash. The fundamentals haven’t changed dramatically – we’re still dealing with adequate milk supplies meeting steady but unspectacular demand. Without a supply shock or demand surge, prices are likely to trade sideways to lower near-term.

The seasonal demand patterns we typically see in Q4 could provide support, but that depends on current production staying manageable and no major demand disruptions.

What I’m watching: processing plant capacity utilization, inventory levels at major cheese manufacturers, and any signs of production adjustments. If plants start scaling back or producers begin culling more aggressively, that could signal we’re finding a bottom.

Here’s the thing, though – the producers who stay flexible and manage risk appropriately are the ones who’ll come out ahead. Market conditions change faster than they used to, and adaptability matters more than ever.

Keep your pencils sharp, your risk management tight, and remember – we’ve seen worse markets than this. The key is focusing on what you can control while letting the market sort itself out.

This analysis reflects market conditions as of July 11th, 2025. Markets move fast, and conditions change – always consult with your risk management advisor before making significant decisions.

Complete references and supporting documentation are available upon request by contacting the editorial team at editor@thebullvine.com.

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Cheddar Market Shock: GDT Prices Crash 9.2% As Dairy Markets Signal Major Shift

Tuesday, May 20th, 2025

Cheddar prices CRASH 9.2% at GDT! What’s fueling the cheese market meltdown – and how to protect your profits.

EXECUTIVE SUMMARY: Tuesday’s Global Dairy Trade auction snapped a three-month rally with a 0.9% index drop, driven by cheddar’s shocking 9.2% price collapse to $2.27/lb. While mozzarella and anhydrous milk fat held firm, the dramatic divergence signals fractured dairy markets demanding strategic agility. With China’s shrinking imports and shifting consumer preferences reshaping trade patterns, producers must reassess milk allocation, risk management, and component strategies. The next GDT auction on June 3 will test whether this is a temporary correction or a sustained trend. Bottom line: volatility reigns – adapt or get left behind.

KEY TAKEAWAYS:

  • Cheddar crisis: 9.2% price plunge exposes vulnerability in cheese-focused operations.
  • Market fragmentation: AMF (+0.9%) and mozzarella (+0.7%) outperformed, highlighting value in diversified production.
  • Global ripple effects: China’s rising self-sufficiency (85%) and seasonal NZ production shifts amplify volatility.
  • Action required: Revisit processor contracts, component strategies, and hedging plans before June’s critical GDT auction.
  • Watch the spread: Narrowing CME block-barrel gap signals shifting inventory pressures between retail/food service markets.
Cheddar price crash, Global Dairy Trade trends, dairy market volatility, cheese market analysis, dairy risk management

Tuesday’s Global Dairy Trade auction delivered a bombshell to dairy markets with its first index decline since early March, plunging 0.9% after three consecutive events of significant gains. The spotlight? A dramatic 9.2% collapse in cheddar cheese prices to $5,007/metric ton. This sharp reversal, contrasted with stable to rising values for products like mozzarella and anhydrous milk fat, signals increasing market fragmentation that demands immediate strategic attention from producers tied to cheese production streams.

THE NUMBERS DON’T LIE: DISSECTING THE PRICE SHAKE-UP

The party’s over at the GDT. After a solid 7.3% climb since March 4, the index finally stumbled at Tuesday’s auction. Don’t let the modest 0.9% overall dip fool you – the devil is in the details. A hefty 15,194 metric tons of dairy products changed hands among 110 winning bidders through fifteen rounds of competitive bidding, showing robust market participation despite the price correction.

The weighted average price across all products settled at $4,589 per metric ton, but this average masks the dramatic divergence between product categories:

ProductPrice ChangeFinal Price (USD)Per PoundWhat’s Really Happening
Cheddar cheese-9.2%$5,007/MT$2.27/lbThe Big Loser – is the cheddar bubble bursting?
Lactose-13.2%$1,398/MT$0.63/lbTaking an even bigger hit than cheddar
Butter-1.5%$7,821/MT$3.54/lbMinor cooling but still commanding premium prices
Whole milk powder-1.0%$4,332/MT$1.96/lbSlight step back on key volume product
Skim milk powder-0.7%$2,817/MT$1.27/lbHolding relatively steady
Anhydrous milk fat+0.9%$7,273/MT$3.29/lbFat continues to shine!
Mozzarella cheese+0.7%$4,788/MT$2.17/lbThe other cheese story – quietly gaining ground

The stark contrast between cheddar’s nosedive and mozzarella’s modest gain, alongside AMF’s continued strength, screams one thing: we’re in an era of product-specific markets, not a monolithic dairy industry.

WHY CHEDDAR’S CRASH SHOULD SET OFF YOUR ALARM BELLS

Let’s be blunt: a 9.2% drop in cheddar isn’t just some abstract number for economists to ponder. This hits your bottom line directly. For operations heavily invested in cheese, particularly cheddar, this is a torpedo below the waterline of your revenue projections. What makes it even more jarring is that it comes on the heels of a 4.6% GDT index jump just two weeks ago. Whiplash, anyone?

This volatility isn’t isolated to the GDT; it’s echoing in domestic markets too. Monday’s CME session saw cheddar blocks tumble 3.25¢ to $1.8975/lb and barrels drop 2.50¢ to $1.8550/lb, indicating buyer hesitancy following mid-May rallies. This global-local market connection isn’t a coincidence – it confirms a broader shift in cheese market fundamentals.

What This Means For Your Operation: If your milk flows predominantly into cheddar production, it’s time for serious conversations with your processor. This dramatic price differential between cheese varieties signals that global buyers are increasingly selective. The operations that will thrive are those with the flexibility to pivot between product streams as these market signals evolve.

GLOBAL CHESS MATCH: TRACKING THE HIDDEN MARKET FORCES

This GDT shakeup isn’t happening in a vacuum. The timing is particularly significant as this marks the final New Zealand dairy season auction, which officially concludes on May 31. Most Kiwi farmers are currently drying off their herds for the winter rest period before calving begins in July-August. This seasonal factor typically influences market psychology and trading patterns.

The next GDT auction, scheduled for Tuesday, June 3, will provide crucial signals about whether this cheddar correction represents a temporary adjustment or the beginning of a more sustained trend. That’s a date every dairy producer should circle on their calendar.

THE BOTTOM LINE: DON’T JUST WATCH – TAKE ACTION NOW!

This GDT result, especially the cheddar collapse, demands an immediate strategic response. But panic is a terrible strategy. Instead, focus on these tactical moves:

  1. Interrogate Your Milk Contract & Processor Relationship: What’s your exposure to cheddar? If these trends continue, how flexible is your processor in shifting milk to more lucrative streams like mozzarella or milk fat products? Have this conversation now, not after prices slide further.
  2. Re-evaluate Your Component Strategy: If fat is holding strong (and AMF prices suggest it is), should you be tweaking your nutrition program to optimize fat production? The 0.9% increase in AMF versus the 9.2% crash in cheddar speaks volumes about where value is currently concentrated.
  3. Lock in Your Risk Management Plan: With the June GDT auction approaching, now is the time to review hedging strategies and protection options. These increasingly fragmented product markets demand more sophisticated risk management approaches than ever before.
  4. Watch the Block-Barrel Spread: The narrowing block-barrel spread in the CME (down to 4.25 cents from 7.75 cents last week) provides additional market intelligence about inventory balances between retail and food service channels. These domestic signals and GDT trends can help you anticipate market directions.

The bottom line? This isn’t about doom and gloom; it’s about recognizing market signals early and positioning your operation to thrive amid volatility. In today’s fragmented dairy markets, the winners aren’t just those who produce the most milk – they’re the ones who most strategically direct that milk to the highest-value destinations. The cheddar crash is your wake-up call. What will you do with it?

Learn more:

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Join over 30,000 successful dairy professionals who rely on Bullvine Weekly for their competitive edge. Delivered directly to your inbox each week, our exclusive industry insights help you make smarter decisions while saving precious hours every week. Never miss critical updates on milk production trends, breakthrough technologies, and profit-boosting strategies that top producers are already implementing. Subscribe now to transform your dairy operation’s efficiency and profitability—your future success is just one click away.

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CME Dairy Report: Cheese Barrels Surge to Rare Premium Over Blocks as Markets Show Strength

Tuesday, April 15th, 2025

Cheese barrels defy norms with 6¢ surge, outpacing blocks in rare market twist. Butter holds steady as powders mix signals.

EXECUTIVE SUMMARY: The CME dairy markets saw dramatic cheese price shifts on April 15, 2025, with barrels jumping 6¢ to a rare 10¢ premium over blocks—a historic inversion signaling urgent processed cheese demand. Butter edged up 0.25¢ on active trading (19 loads), while dry whey gained 1¢ and NDM stalled. Futures markets mirrored cash optimism, with May cheese futures holding a 13¢ premium, though deferred feed costs hinted at margin pressures. Analysts warn the barrel rally’s thin trading volume (1 load) may amplify volatility, urging producers to monitor inverted spreads and traders to verify demand sustainability.

KEY TAKEAWAYS:

  • Barrel-block inversion alert: Barrels surged to $1.90/lb (+6¢), creating a rare 10¢ premium over blocks—a potential red flag for market imbalance.
  • Butter’s quiet strength: Prices firmed to $2.35/lb (+0.25¢) on robust 19-load trading, suggesting stable inventories.
  • Feed cost divide: Nearby corn/soy eased slightly, but deferred corn futures (+2.25¢) signal rising Q4 input costs.
  • Futures signal confidence: May cheese futures trade 13¢ above cash prices, anticipating prolonged tightness.
  • Actionable insight: Producers should hedge against feed cost risks; traders must confirm barrel demand in follow-up sessions.
cheese market analysis, dairy commodity prices, CME dairy report, butter price trends, feed cost outlook

Today’s CME spot dairy markets exhibited considerable strength in the cheese complex, with cheddar barrels leading a significant rally that established a rare price inversion over blocks. Meanwhile, butter posted modest gains on active trading volume, and the powder markets delivered mixed results.

The unusual barrel-over-block premium captured market attention as barrels surged 6.00 cents to close at $1.9000/lb, while blocks gained 3.00 cents to settle at $1.8000/lb. This created an atypical 10-cent premium for barrels, a market anomaly suggesting exceptionally strong demand from the processed cheese sector potentially facing tight spot supplies.

CME Cash Dairy Market Closing Prices (April 15, 2025)

ProductClosing Price ($/lb)Change from Yesterday (¢/lb)
Cheese (Blocks)$1.8000+3.00¢
Cheese (Barrels)$1.9000+6.00¢
Butter$2.3500+0.25¢
Nonfat Dry Milk$1.1675Unchanged
Dry Whey$0.4750+1.00¢

Weekly Trends Show Sustained Market Strength in Cheese Complex

The broader weekly context reveals even more significant momentum in the cheese market, with barrels outpacing blocks in weekly gains.

Weekly Price Trends

ProductCurrent Week Avg.Prior Week Avg.Weekly Change
Butter$2.3488/lb$2.3205/lb+2.83¢
Cheese (Blocks)$1.7850/lb$1.7130/lb+7.20¢
Cheese (Barrels)$1.8700/lb$1.7585/lb+11.15¢
NDM Grade A$1.1675/lb$1.1605/lb+0.70¢
Dry Whey$0.4700/lb$0.4830/lb-1.30¢

This week’s barrel cheese average has surged +11.15¢ over last week, significantly outpacing blocks’ +7.20¢ gain. Butter’s weekly average remains firm at $2.3488/lb (+2.83¢ week-over-week), while dry whey shows mild softness despite today’s gain.

Trading Volume Analysis: Butter Active, Barrels Move on Minimal Volume

Today’s trading activity varied dramatically across products, with butter seeing robust participation while the significant barrel price movement occurred on extremely thin volume.

ProductTradesUnfilled BidsUnfilled Offers
Butter1935
Cheese (Blocks)741
Cheese (Barrels)110
NDM Grade A012
Dry Whey210

The butter market demonstrated healthy liquidity with 19 loads changing hands, ending with a balanced bid/offer scenario. Block cheese saw moderate activity with seven trades executed, while notably, the dramatic 6.00-cent increase in barrel prices occurred on just a single transaction. This thin trading volume in barrels, combined with zero offers remaining at the close, underscores extreme market tightness or seller reluctance at current price levels.

Futures Market Signals Strong Expectations for May Contracts

The futures market largely reflected today’s positive cash sentiment, with most contracts increasing. May cheese futures established a significant premium to current cash prices, suggesting traders anticipate continued strength.

Futures vs. Cash Price Comparison

ContractSettlement PriceCash PricePremium/(Discount)
Class III (MAY)$17.92/cwtN/A–
Cheese (MAY)$1.9300/lb$1.8000/lb+13.00¢
Butter (MAY)$2.5100/lb$2.3500/lb+16.00¢
Dry Whey (MAY)$0.4575/lb$0.4750/lb-1.75¢

May cheese futures trade at a substantial 13.00¢/lb premium to cash prices, signaling expectations of continued market tightness. Similarly, butter futures’ +16.00¢ premium suggests traders anticipate stronger demand as we move into the second quarter.

Feed Cost Outlook: Mixed Signals for Producer Margins

Feed commodity futures presented a mixed picture for dairy producers, with nearby contracts showing modest weakness while deferred contracts displayed varying trends.

Feed Cost Comparison

CommodityMay 2025 FuturesDec 2025 FuturesSpread
Corn ($/bu)$4.8350$4.6400-$0.1950
Soybeans ($/bu)$1.0325$1.0225-$0.0100
Soybean Meal ($/ton)$294.40$307.70+$13.30

New-crop December corn futures trade at a 19.50¢/bu discount to May, suggesting some potential relief in feed costs later in the year. However, soybean meal shows a +$13.30/ton backwardation, presenting a mixed signal for overall feed cost risk management.

Market Sentiment: Bullish for Cheese, Cautious for Butter

The prevailing mood among traders has shifted distinctly positive for cheese while remaining more measured for butter and neutral for NDM.

“The bids were aggressive today, especially for barrels. Buyers are scrambling to cover near-term needs ahead of stronger spring demand.”
— CME cheese trader, April 15, 2025

“While butter firmed, the futures market seems hesitant. We’re watching inventory reports closely, as stocks remain adequate and could cap rallies.”
— Dairy market analyst, April 15, 2025

Strategic Recommendations for Market Participants

For Producers:

Today’s cash and futures strength, especially in Class III components, signals positive momentum for milk prices. The unusual barrel-block relationship, as does the potential for volatility in thinly traded markets, warrants close attention. Consider implementing margin protection strategies that capitalize on the current strength while guarding against potential feed cost increases later in the year.

For Traders:

The upward momentum in cheese appears strong, but the sustainability of the large barrel premium achieved on a very light volume requires careful monitoring. Butter seems more range-bound in the immediate term. Look for confirmation of buying interest in subsequent sessions and follow upcoming USDA reports on production and inventories for further directional cues.

For Analysts:

Investigating the drivers behind the sharp barrel premium over blocks – whether temporary scarcity, logistical challenges, or fundamental demand shifts – will be crucial for understanding market direction. The impact of global price trends and export flows will be critical for assessing the durability of current U.S. price levels, particularly for cheese and milk powders.

Learn more:

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Join over 30,000 successful dairy professionals who rely on Bullvine Daily for their competitive edge. Delivered directly to your inbox each week, our exclusive industry insights help you make smarter decisions while saving precious hours every week. Never miss critical updates on milk production trends, breakthrough technologies, and profit-boosting strategies that top producers are already implementing. Subscribe now to transform your dairy operation’s efficiency and profitability—your future success is just one click away.

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Dairy Markets Under Pressure: Trade Tensions Reshape Export Landscape

Sunday, March 16th, 2025

Trade wars bite: U.S. dairy exports face new tariffs while spring milk floods processors. Are falling powder prices the canary in the coal mine?

Executive Summary

The dairy industry faces significant market disruption as new tariffs targeting U.S. exports to Canada and China create domestic and international buyer uncertainty. Nonfat dry milk prices have retreated to 10-month lows at $1.155 per pound, while whey markets continue their bearish slide, dropping to 45ȼ per pound—the lowest since early June. In contrast, cheese and butter markets show signs of stabilization, with CME spot Cheddar blocks jumping 7ȼ to .6925 this week. Since February, the 5% decline in the dollar index has created potential export opportunities despite trade tensions, as U.S. dairy products become more price-competitive globally. The market outlook remains uncertain as seasonal production increases coincide with trade disruptions, suggesting continued volatility across dairy commodity sectors.

Key Takeaways

  • Powder markets under severe pressure: NDM and whey prices have fallen to multi-month lows as buyers adopt conservative purchasing strategies amid trade uncertainty
  • Market divergence creates strategic opportunities: While powder struggles, cheese and butter markets show resilience, suggesting targeted production and marketing approaches may be necessary.
  • Currency effects partially offset trade barriers: The weaker dollar creates pricing advantages for U.S. dairy exports, potentially opening windows for international sales despite tariffs.
  • Spring flush amplifies market challenges: Seasonal production increases are creating supply pressure at the worst possible time, with processing facilities facing longer queues at dryers.
  • Market flexibility critical for producers: The uneven performance across product categories highlights the importance of adaptable production decisions and marketing strategies in the current volatile environment
Dairy trade tensions, milk powder prices, cheese market analysis, international dairy tariffs, dairy export challenges

The dairy markets are navigating turbulent waters as trade disputes cast long shadows over pricing and demand. New tariffs targeting U.S. dairy exports to Canada and China have significantly disrupted market dynamics, creating a cautious atmosphere among buyers domestically and internationally. This week’s market movements reveal a complex landscape where certain commodities are finding their footing while others continue to slide.

POWDER MARKETS FACE HEADWINDS AMID TRADE TENSIONS

The nonfat dry milk (NDM) market is experiencing notable pressure as buyers adopt increasingly conservative purchasing strategies. Importers are demonstrating marked hesitation to commit to volumes that might face tariffs down the road, while domestic users are similarly limiting purchases to immediate needs, anticipating further price declines in this export-dependent sector.

The CME spot NDM market briefly showed signs of life this week before retreating to $1.155 per pound, matching the 10-month low established last Friday. This represents a significant decline from October 2024, when USDA reported NDM prices averaging $1.3685 per pound. The current scenario starkly contrasts the previous fall’s market conditions, when condensed skim was readily available, but recently produced volumes ranged from balanced to tight.

Spring Flush Adds to Market Pressure

The arrival of spring has brought the familiar seasonal increase in milk production, further complicating the powder market outlook. With milk flows climbing, processing facilities are experiencing longer queues at dryers. This supply growth comes at a particularly challenging time, as export channels face obstacles from trade disputes and domestic buyers remain cautious.

WHEY MARKETS CONTINUE DOWNWARD TRAJECTORY

The whey market continues its bearish trend, with prices falling further this week. CME spot whey powder dropped another 4ȼ to reach 45ȼ, marking the lowest price point since early June. This represents a dramatic decline from October 2024’s reported prices, when dry whey was trading at around 60ȼ per pound.

USDA market analysts offer a candid assessment, noting “growing concerns among market actors as to what international trading activity will look like over the next few months.” Domestic end users have lost interest in dry whey volumes priced above 50ȼ per pound, indicating a significant shift in price expectations.

The agency characterizes the market as bearish “with few indications of the alternative in the near term.” While demand for high-protein whey concentrates and isolates remains robust, the industry continues to generate ample whey for powder production.

CHEESE AND BUTTER MARKETS FIND STABILITY

While powder markets continue their decline, other dairy commodities have shown resilience. After weeks of bearish pressure, the invisible hand of the market has stepped in to restore some balance:

  • CME spot Cheddar blocks jumped 7ȼ this week to $1.6925
  • Barrels rallied 6ȼ to reach $1.69
  • Butter added 3.25ȼ to climb to $2.3425

These figures reflect significant shifts from October 2024, when cheese blocks and barrels traded at $1.90 and $1.87, respectively, and butter commanded nearly $2.70 per pound.

Market Fundamentals Remain Mixed

Despite the modest recovery in cheese and butter prices, several factors that drove February’s market collapse remain in play:

  • Cream supplies continue to be abundant and affordable
  • Churns are operating at high capacity
  • U.S. cheese production continues to expand
  • Domestic demand for cheese and butter lacks vigor

However, the recent price corrections have created opportunities for international buyers. U.S. cheese and butter present attractive value propositions to foreign purchasers compared to alternatives from other major dairy exporting regions.

CURRENCY EFFECTS CREATE EXPORT OPPORTUNITIES

A 5% decline in the dollar index since early February has enhanced the purchasing power of foreign currencies when buying U.S. dairy products. This currency effect, combined with stable to higher dairy prices in Oceania and Europe, has widened the gap between U.S. and international values.

This pricing disparity creates potential opportunities for buyers willing to navigate the uncertain U.S. trade policy landscape. International purchasers can effectively acquire U.S. dairy products at bargain prices compared to global alternatives, potentially offsetting some of the negative impact of recent trade tensions.

OUTLOOK REMAINS UNCERTAIN AS MARKETS ADJUST

The dairy industry is at a crossroads, with markets adjusting to new trading realities while seasonal production trends follow their typical patterns. The combination of trade tensions, seasonal milk production increases, and uneven demand across product categories suggests that continued volatility may lie ahead.

The divergent performance across product categories for dairy producers underscores the importance of maintaining flexibility in production decisions and marketing strategies. While powder markets face significant headwinds, stabilizing cheese and butter prices guarantees that market mechanisms continue functioning.

The coming weeks will be critical in determining whether the modest recovery in cheese and butter markets can be sustained and whether powder markets will find support or continue their decline under pressure from seasonal and trade-related factors.

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CME Daily Dairy Report: Cheese Blocks Plunge 9.50¢ As Markets Face Pressure | March 4, 2025

Tuesday, March 4th, 2025

Cheese blocks plummet 9.50¢ as dairy markets face pressure. What’s driving the decline, and how will it impact producers? Get the full analysis here.

EXECUTIVE SUMMARY: The CME dairy markets experienced significant pressure on March 4, 2025, with cheese blocks leading the decline, falling 9.50 cents to $1.7750/lb. This sharp drop occurred despite stable inventories, suggesting potential shifts in demand or increased selling pressure. While cheese markets weakened, butter held steady at $2.3450/lb, and nonfat dry milk remained unchanged. The weekly averages show a downward trend across all commodities, with butter declining 3.1% from the previous week. Despite spot market weakness, futures markets signal optimism for near-term milk values. However, the current milk-feed ratio of 2.18 remains below the profitability threshold of 2.25, indicating ongoing challenges for producers. Global market conditions, including increased European milk production and premium Oceania butter prices, continue to influence U.S. export competitiveness.

KEY TAKEAWAYS:

  • Cheese blocks plunged 9.50 cents to $1.7750/lb, narrowing the block-barrel spread to just 0.50 cents.
  • Weekly averages show a downward trend across all dairy commodities, with butter declining 3.1% from the previous week.
  • Despite spot market weakness, futures markets remain optimistic about near-term milk values.
  • The milk-feed ratio of 2.18 is below the 2.25 profitability threshold, signaling ongoing margin pressure for producers.
  • Global market conditions, including European production increases and Oceania butter premiums, continue to impact U.S. export competitiveness.
CME dairy prices, cheese market analysis, block-barrel spread, dairy futures, milk-feed ratio

Today’s dairy markets registered significant downward pressure, with cheddar blocks leading the decline with a substantial 9.50 cent drop, while barrels fell 2.50 cents. This market weakness comes amid challenging global trade conditions and evolving domestic supply dynamics affecting multiple dairy commodities.

The cheddar block market fell sharply to $1.7750/lb, representing a significant 9.50 cent decline amid moderate trading activity. Despite relatively stable cheese inventories in the latest Cold Storage report, this dramatic movement comes. Cheddar barrels also weakened, though less dramatically, by falling 2.50 cents to $1.7800/lb, narrowing the block-barrel spread to just 0.50 cents, representing an unusually tight price relationship between these two cheese varieties.

Daily Price Summary: Mixed Performance Across Dairy Product Categories

ProductClosing PriceChange from Yesterday
Cheese (Blocks)$1.7750/lb-9.50¢
Cheese (Barrels)$1.7800/lb-2.50¢
Butter$2.3450/lbUnchanged
Nonfat Dry Milk$1.2000/lbUnchanged
Dry Whey$0.5100/lb-1.50¢

Butter markets held steady at $2.3450/lb with minimal trading activity but continued offering interest, suggesting potential for downward price pressure in coming sessions. NDM remained unchanged at $1.2000/lb while dry whey decreased 1.50 cents to $0.5100/lb amid substantial offering pressure with four uncovered offers versus just one bid.

Weekly Trend Analysis Shows Continued Market Softness

ProductMonTueWedThurFriCurrent Avg.Prior Week Avg.Weekly Change
Butter$2.3700$2.3450$2.3350$2.3450$2.3450$2.3480$2.4219-$0.0739
Cheddar Block$1.8800$1.8800$1.8700$1.8700$1.7750$1.8550$1.9044-$0.0494
Cheddar Barrel$1.8000$1.7925$1.7950$1.8050$1.7800$1.7945$1.8019-$0.0074
NDM Grade A$1.2250$1.2000$1.2075$1.2000$1.2000$1.2065$1.2600-$0.0535
Dry Whey$0.5350$0.5350$0.5350$0.5250$0.5100$0.5280$0.5475-$0.0195

The weekly averages show a general downward trend across all commodities compared to the previous week, with butter showing the most significant percentage decline at nearly 3.1% lower than the prior week’s average.

Trading Activity Reveals Continued Selling Pressure

Today’s trading session featured moderate activity for cheddar blocks. Four trades were executed alongside offering interest (0 bids versus three offers), indicating continued selling pressure at current price levels. This trading pattern suggests the potential for further price adjustments in coming sessions unless fresh buying interest emerges.

Cheddar barrels recorded modest activity with two trades and limited interest on either side of the market (0 bids, one offer). Butter saw no trades executed despite both bids (1) and offers (2), indicating a relatively balanced but inactive market. Similarly, NDM recorded no trades but showed equal bidding and offering interest (2 bids, two offers). At the same time, dry whey saw substantial selling pressure with four uncovered offers compared to just one bid.

Global Market Conditions Create Mixed Outlook for U.S. Exports

The U.S. dairy export environment continues to evolve amid changing global supply and demand dynamics. International dairy product prices have shown varied performance, with Global Dairy Trade auctions indicating some strength in whole milk powder but continued pressure on skim milk powder markets.

European milk production continues to increase seasonally, while New Zealand production remains slightly below historical norms. According to recent Bullvine reporting, the European Union faces projected milk production declines of 0.2% in 2025, creating potential opportunities for U.S. producers to capture market share in key export destinations.

The international competitive landscape is particularly evident in the forward price projections for key dairy commodities. In Oceania markets, butter is trading at a significant premium to U.S. values, with March 2025 prices at $7,370/metric ton compared to U.S. equivalent values of approximately $5,170/metric ton.

Futures Markets Signal Optimism Despite Today’s Spot Market Weakness

Despite today’s market pressure, particularly in the cheese sector, futures markets remain relatively optimistic about milk values for the near term. The Class III milk futures for coming months show a gradual strengthening pattern that suggests market participants anticipate improved demand or tightening milk supplies as we move through the spring flush period.

ClassMarchAprilMayJuneJulyAugust
Class III ($/cwt)$18.71$18.86$19.03$19.15$19.20$19.25
Class IV ($/cwt)$18.64$18.71$18.79$18.89$18.99$19.10
Change from Yesterday (Class III)-$0.23-$0.18-$0.14-$0.10-$0.08-$0.05
Change from Yesterday (Class IV)$0.00-$0.07-$0.09-$0.08-$0.06-$0.05

Current future values reflect growing concern about milk prices in the immediate term but suggest relatively favorable conditions. Feed markets continue to provide some relief for producers, though corn futures remained relatively strong at $4.53/bushel for March delivery on Friday.

Producer Profitability Analysis: Margins Below Threshold Despite Recent Improvements

ComponentCurrent PriceLast MonthYear Ago
All-Milk Price ($/cwt)$18.75$19.10$18.25
Corn Price ($/bushel)$4.53$4.70$5.15
Soybean Meal ($/ton)$300.20$310.50$355.60
Alfalfa Hay ($/ton)$195.00$198.00$210.00
Calculated Milk-Feed Ratio2.182.151.89
Profitability Threshold2.252.252.25

The milk-feed ratio is calculated using the formula: (All-milk price per cwt) ÷ (16% of corn price + 8% of soybean meal price + 26% of alfalfa hay price)

While today’s calculated ratio of 2.18 shows improvement from last month’s and year-ago levels, it remains below the 2.25 threshold typically associated with sustainable profitability for most dairy operations. This metric helps explain why expansion remains limited despite generally favorable milk prices.

Market Sentiment: Analysts Divided on Future Direction

Market sentiment has shifted somewhat with today’s significant decline in cheese prices, particularly for blocks. Market participants note that the substantial 9.50 cent decline in blocks suggests selling pressure from inventory holders or reduced buying interest from major commercial users. The fact that the butter market held unchanged despite recent weakness indicates a potential stabilization point for that commodity.

The International Dairy Foods Association’s most recent weekly market commentary noted: “While the first quarter has shown surprising price resilience given inventory levels, today’s block cheese weakness suggests we may be entering a more challenging phase for dairy commodity markets, particularly if spring flush production significantly exceeds current projections.”

Strategic Recommendations for Dairy Stakeholders

Today’s dairy markets registered significant price declines for cheese, with blocks falling 9.50 cents to $1.7750/lb and barrels declining 2.50 cents to $1.7800/lb. Butter held steady at $2.3450/lb, while NDM remained unchanged at $1.2000/lb. Dry whey decreased 1.50 cents to $0.5100/lb amid substantial offering pressure.

Producers should closely monitor cheese markets for stabilization following today’s substantial block price decline. The narrowed block-barrel spread bears watching as it often signals changing market dynamics that can affect Class III milk values. Feed markets continue to provide some margin opportunity, with corn and soybean meal values moderating slightly, though the calculated milk-feed ratio remains below the traditional profitability threshold of 2.25.

In coming reports, market participants should pay particular attention to weekly cold storage movements and milk production data, as these will provide important context for whether today’s price declines represent a temporary adjustment or the beginning of a more sustained price correction. Additionally, watching daily trading volumes and bid/ask spreads will provide early indications of changing market sentiment, particularly for cheese markets, which experienced the most significant movement today.

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The Cheese Paradox: Why Futures Dive Despite Shrinking Supplies

Monday, November 25th, 2024

Why are cheese futures dropping despite low stocks? What are the implications for dairy farmers and the market? Find out more now.

Summary:

In an unexpected twist, U.S. cheese stocks have dropped significantly, with inventories down by 8% year-over-year and a significant reduction of 26.3 million pounds in October, marking the most substantial decrease since 2019. Despite this, the futures market reflects a downward trend, befuddling industry experts and suggesting that market dynamics may not be as closely aligned with supply conditions as previously thought. Expectations of an eventual surplus due to increased production capacity have shifted market predictions, revealing a complex interplay of forces. Industry stakeholders are prompted to revisit their strategies and potentially invest in export markets or new products to maintain revenue in this uncertain environment.

Key Takeaways:

  • U.S. cheese stocks experienced a significant drop, marking the largest decrease from September to October since 2019, contrary to typical seasonal trends.
  • American-style cheese inventories decreased by 7.3% year-over-year, while other cheese varieties saw an even sharper decline of 9.3%.
  • Despite the previous summer’s rise in cheese and Class III markets, fresh cheese supplies now appear abundant, contributing to a slump in futures.
  • With new cheese production facilities coming online, the market anticipates a potential surplus despite low inventory levels.
  • Butter inventories, while reduced in October, remain higher than the previous year, influenced by commercial demand and falling spot market prices.
cheese futures, dairy industry trends, U.S. cheese inventories, cheese production capacities, supply chain disruptions, cheese market analysis, dairy pricing structures, cheese reserves decline, export markets for cheese, cheese production innovations

How can cheese futures be slumping when cheese stocks are at historic lows? This perplexing situation puzzles even the most seasoned industry experts. As dairy farmers and industry professionals navigate these turbulent times, understanding the forces at play becomes crucial. This phenomenon underscores the unpredictability of the dairy industry, highlighting the need for stakeholders to grasp complexities to strategize effectively, especially in the face of global competition that significantly impacts the U.S. cheese market. A decline in cheese stocks, a slump in futures prices, and new production capacities introduce unique challenges and opportunities. Delving into this cheese paradox is essential to comprehend how these elements interact and what they mean for the dairy industry’s future. 

The Great Cheese Conundrum: Navigating a New Normal in Dairy Stocks 

The current landscape of U.S. cheese inventories paints a striking picture of deviation from the norm. A significant downturn was registered in October, as stocks dwindled by 26.3 million pounds, marked by the USDA as the most significant September-to-October drawdown witnessed since 2019. This contraction in inventories defies the usual seasonal growth patterns, which traditionally see a build-up in reserves throughout the year. Historically, a rise of approximately 18 million pounds in stockpiles is expected over the first ten months. Remarkably, 2024 has derailed from this trajectory, witnessing a reduction of 99.9 million pounds, a figure that starkly contrasts with the average. As a result, cheese reserves now stand 8% lower than in the previous year, showcasing a troubling trend that raises several questions about future supply stability.

Unpredictable Patterns: Echoes of History in Today’s Cheese Futures 

Cheese futures have sometimes followed a predictable pattern, especially during periods of supply volatility. This can be traced back to the economic unrest of the 2008 financial crisis. Consumer buying power and global trade disruptions impacted dairy prices during that time. Cheese stocks plummeted while futures surged amid fear-driven speculation before stabilizing post-crisis. 

In the 1990s, the U.S. dairy market faced regulatory changes that affected supply chains and, consequently, cheese futures. Farmers grappled with new pricing structures, leading to temporary supply bottlenecks similar to today’s situation. Despite initial slumps, long-term trends corrected as markets adapted. 

The question remains: is today a repeat of the past, or are we entering uncharted territory? While patterns offer insights, each economic and agricultural environment presents unique variables. The current slump may be a hiccup, a minor correction before equilibrium. Or it could signal a need to reassess our approaches to supply management in an increasingly unpredictable climate.

Strategic Expansion or Imminent Glut: The Path Ahead for Cheese Production

As new cheese production facilities prepare online, the supply-demand landscape may undergo more significant shifts than anticipated. The promise of additional capacity brings the potential for increased output. However, will this automatically cater to the demand or exacerbate the current slump in cheese futures? 

New vats equate to an expanded arsenal for cheese producers, potentially flooding the market with a surplus when demand may not be strong enough to absorb it. Historically, dairy farmers have been cautious about the ‘build it and they will come’ philosophy. More production facilities do not inherently guarantee a synchronized increase in consumption. 

For dairy farmers and cheese producers, this mismatch could result in lower prices with more competition and pressure to innovate and seek broader markets. There’s a scenario where cheese prices could further plummet if the additional supply overshoots demand. It’s crucial to consider whether the global appetite for American cheese varieties will surge or producers might have to pivot strategies. 

Furthermore, producers might need to consider export markets or explore new product innovations to sustain revenue streams. Strategically, decision-makers must carefully assess market opportunities and potential constraints. As the industry expands its capabilities, prudent management and strategic forecasting are needed to avert a surplus-driven price drop.

The Double-Edged Sword of Supply and Demand 

The supply-and-demand puzzle is at the heart of the recent cheese paradox. On one hand, dwindling inventories suggest a tighter market and rising prices. Yet the futures market signals otherwise. What gives? 

Part of the answer lies in the supply chain dynamics. Over the past year, dairy farms have invested in new cheese vats, expecting an increase in milk production. This technological expansion aims to churn out a greater volume of cheese shortly. As these vats go operational, the market anticipates an influx of cheese, turning the current tight supply into a potential surplus. This expectation depresses futures prices despite present low stocks. 

The perception of future abundance shapes current market behavior. Suppose buyers believe that cheese will be more plentiful and cheaper tomorrow. In that case, they’re less inclined to purchase aggressively today, which counters immediate scarcity. This forward-looking mindset is critical to current market sentiments and price adjustments.

Navigating Uncertainty: Balancing Strategy in a Fluctuating Cheese Market 

For dairy farmers and industry stakeholders, the slump in cheese futures amidst dwindling stocks is a perplexing navigational challenge. In a world where supply doesn’t dictate market steadiness, pricing strategies hang precariously in the balance. Farmers are caught in a seesaw of anticipation and caution, questioning whether to ramp up production in hopes of a future price rise or to pull back, minimizing potential losses. 

Related businesses must tread carefully, too. With the anticipation of new vats emerging soon, the specter of an impending surplus looms large. This could drive prices even lower, affecting the entire supply chain. But what if demand surges unexpectedly? It’s a precarious guessing game emphasizing the need for agile, informed decision-making that blends experience with foresight. 

In this market landscape, long-term planning is more art than science. Now more than ever, stakeholders, from farmers to marketers, require crystal-clear communication and cooperative strategies to weather recent trends’ unpredictability. This is a test of resolve and adaptability. Are we ready for it?

Butter’s Balancing Act: A Tale of Surplus in a Sea of Cheese Shortages

The volatility in dairy commodities extends beyond cheese; butter presents its complexities. While cheese stocks have significantly declined, butter inventories paint a contrasting picture. Warehouses still hold an 11.4% surplus compared to the previous year despite a seasonal drop in October [USDA]. This surplus starkly contrasts the depleted cheese reserves, indicating divergent inventory trends within the dairy sector. 

Pricing dynamics differ as well. Once bullish, the market for cheese, especially fresh Cheddar, is now under pressure from potential oversupply, leading to lowered futures and spot prices. Conversely, butter prices have dipped sharply, influenced by hefty supplies and abundant cheap cream, marking a significant downturn over the last three months [CME]. These differences highlight the multifaceted nature of dairy markets, where supply shifts and pricing are not uniform across products, presenting unique challenges and opportunities for industry stakeholders.

Global Tapestry: The Unfolding Story of Cheese Futures 

The global cheese market is a tapestry of intricate interactions where international trade dynamics significantly shape U.S. cheese futures. As American cheese stocks shrink, eyes turn to the export demand that partly siphons away domestic supply. The U.S. has a growing presence in the global market. Still, it faces fierce competition from European powerhouses like Germany and France, whose rich cheese traditions make them formidable rivals in volume and variety. 

Trade policies further complicate the landscape. Tariffs and trade agreements dictate cheese flow across borders, impacting price and availability. For instance, recent trade tensions and tariffs have led to volatile market conditions, affecting U.S. cheese exporters’ competitiveness abroad. However, opportunities arise with favorable trade agreements that can open new markets or enhance existing ones, thus influencing futures. 

Foreign producers continue to challenge U.S. market share. Nations with solid cheese industries aggressively pursue international buyers, leveraging their unique product offerings. As these players gain ground, the U.S. must strategically adjust to maintain its competitive edge. This involves responding to international pricing pressures and anticipating changes in consumer preferences and global supply shifts. 

The intricate dance of export demand, trade policies, and international competition shapes the U.S. cheese futures landscape. As these elements shift, stakeholders must remain agile and continually recalibrate strategies to navigate this complex global market. The question remains: How will the U.S. adapt to ensure its cheese producers thrive amid these ongoing global changes?

The Bottom Line

The paradox of dwindling cheese stocks juxtaposed with plummeting futures is a testament to the intricate dance of supply and demand that defines our dairy markets. While inventories decline, expectations of future surpluses create a complicated scenario that challenges producers and traders. As we grapple with this volatile environment, what strategies might be required to ensure stability in the face of such unpredictability? How do we safeguard against the cyclical market shifts that risk profit margins and production capabilities? 

Your insights are vital. We invite you to share your thoughts and experiences on these dynamic market forces. How are you adapting to the changing landscape? Join the conversation by commenting below or connecting with us on our social media channels. Let’s navigate these dairy dilemmas and shape the industry’s future together.

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CME Cash Prices See Mid Week Drops

Wednesday, August 28th, 2024
milk prices, dairy market, CME dairy prices, cash dairy pricing, dairy commodities, milk futures, cheese market analysis, butter market trends, dry whey prices, nonfat dry milk, dairy price updates, dairy trading data

Feeling the squeeze in the dairy market lately? You’re not alone. Many of us have been watching the Chicago Mercantile Exchange like hawks, and Wednesday’s numbers threw us a curveball, didn’t they? With cash dairy prices mostly down, it’s time to look closely at what’s happening out there. 

CME cheese prices took a hit today. Barrels dropped by 12.5 cents to $2.1250 per pound with just one lot traded. Blocks weren’t spared either, falling by 6.5 cents to $2.0750 per pound, also with one load exchanged. Nonfat dry milk (NDM) slid to $1.3050 per pound, shedding a penny with five lots traded.  Fourth quarter Class III futures showed mixed results, averaging $21.88 per hundredweight, down by nine cents. Meanwhile, Q4 Class IV futures slipped 15 cents to $22.64 per hundredweight. Grain futures aren’t faring much better. September corn settled at $3.6525 per bushel, down by two cents, while the nearby soybean contract finished at $9.5850 per bushel, losing nine cents.

Let’s break down the numbers: 

  • Dry whey: Down $0.0125, now at $0.5525. We saw five trades between $0.5525 and $0.56 in this range.
  • Blocks: D by $0.0650, now standing at $2.0750. Only one trade occurred at that price.
  • Barrels: Dropped $0.1250, coming in at $2.1250 after just one trade.
  • Butter: Stayed unchanged, holding steady at $3.1975.
  • Nonfat dry milk: Fell by $0.01 to $1.3050, with five sales in the range of $1.30 to $1.3150.

Daily CME Cash Dairy Product Prices ($/lb.)

 FinalChange ¢/lb.TradesBidsOffers
Butter3.1975NC000
Cheddar Block2.075-6.5102
Cheddar Barrel2.125-12.5121
NDM Grade A1.305-1523
Dry Whey0.5525-1.25510

Weekly CME Cash Dairy Product Prices ($/lb.)

MonMonTueWedCurrent  Avg.Prior Week Avg.Weekly Volume
Butter3.1753.19753.19753.193.15916
Cheddar Block2.142.142.0752.11832.0828
Cheddar Barrel2.252.252.1252.20832.2252
NDM Grade A1.29751.3151.3051.30581.27932
Dry Whey0.5650.5650.55250.56080.5617

CME Futures Settlement Prices

 MonTueWed
Class III (SEP) $/CWT.22.5422.5522.12
Class IV (SEP) $/CWT.22.2722.5922.59
Cheese (SEP) $/LB.2.2052.1942.155
Blocks (SEP)$/LB.2.142.142.14
Dry Whey (SEP) $/LB.0.540.540.54
NDM (SEP) $/LB.1.27751.30451.2875
Butter (SEP) $/LB.3.19953.21753.2175
Corn (SEP) $/BU.4.243.67254.2625
Corn (DEC) $/BU.3.863.9253.905
Soybeans (SEP) $/BU.9.60759.6959.5925
Soybeans (NOV) $/BU.9.819.87759.765
Soybean Meal (SEP) $/TON312.2317.3310.5
Soybean Meal (DEC) $/TON308.1312.4308.3
Live Cattle (OCT) $/CWT.176.98179.18178.68

Trading commodities futures and options entails considerable risk. Investors must carefully balance these risks with their financial status. Although we obtained the material from credible sources, it has not been independently confirmed. This article represents the author’s viewpoint, not necessarily that of The Bullvine, and is meant as a solicitation. Remember that previous performance does not guarantee future outcomes.

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