MD_DA950
DY, DAIRY 
MD DA950 NATIONAL DAIRY MARKET AT A GLANCE 

September 23, 2016 MADISON, WI (REPORT 38) 

CME GROUP CASH MARKETS (9/23)
BUTTER: Grade AA closed at $2.0275. The weekly average for Grade AA is 
$1.9835 (-.0325).
CHEESE: Barrels closed at $1.5100 and 40# blocks at $1.5600. The weekly 
average for barrels is $1.5025 (-.0270) and blocks, $1.5785 (-.0825).
NONFAT DRY MILK: Grade A closed at $0.9350. The weekly average for Grade A 
is $0.9265 (+.0200).
       BUTTER HIGHLIGHTS: Nationwide, butter production is steadily 
increasing, as cream volumes are more available for churning. Bottled milk 
standardization and an improvement in the milk butterfat levels are adding 
to cream supplies. Bulk butter stocks continue clearing into microfixing in 
some plants across the country. Many processors are running operations at 
full capacity, focusing production on print butter ahead of Q4 needs. 
Consequently, inventories are steady to building. Retail demand continues to 
improve. Bulk butter prices reported throughout the country are ranging from 
one cent under to 8 cents over the market, based on the CME Group with 
various periods and averages used. The Grade AA butter price at the CME 
Group on Friday closed at $2.0275, up $.0275 from a week ago.
       CHEESE HIGHLIGHTS: Extra milk is available to make cheese in the 
Northeast and Midwest, and is in good supply in the West, where cheese 
production is active. In all regions some plants have been down for 
maintenance. The extra milk availability in the Northeast substantially 
resulted from a plant being down for maintenance. Demand for cheese in the 
West is firm, mixed in the Midwest, and for mozzarella in the Northeast, 
very good. However, the undertone in the Northeast is unsettled. European 
cheese manufacturers continue to struggle to keep up with demand for cheese. 
In CME Group trading Friday, barrels closed at $1.5100, up $.0300 from last 
Friday and blocks closed at $1.5600, down $.0900.
       FLUID MILK: There is no uniform national trend for milk production 
this week. Seasonal and weather factors are in play. Production is mostly 
flat to marginally lower in the Northeast and Mid-Atlantic states. 
Southeast, North Central and Pacific Northwest states have steady farm milk 
output. Arizona has steady to slightly higher milk production. South Central 
milk production bobbled following rainstorms. Milk output in Florida, New 
Mexico, Colorado, Utah, and Idaho, is lower. California has experienced 
higher farm milk intakes as well as increased improvements in milk protein 
and butterfat components following cooler temperatures. Midwest spot milk 
demand is active, with prices ranging from $1.25-$3.00 over class. 
Transportation and pricing factors are stalling some spot milk sales. 
Central cream is tighter due to a new churning operation making bulk butter, 
rather than selling cream. Cream volumes are more available in the West.
       DRY PRODUCTS: Low/medium heat nonfat dry milk prices are steady to 
higher in the Central and Eastern states, but higher in the West. High heat 
NDM prices are higher in the East and Central states but steady to higher in 
the West, with light trading. Dry buttermilk prices adjusted higher through 
the range in the Central and Eastern states, with a flat/quiet market. In 
the West, dry buttermilk prices are steady with light to moderate trading. 
Dry whole milk prices are steady to higher. Inventories are light and 
production is irregular, mostly dictated by contractual needs. Central whey 
prices range moved higher, but the mostly price series held steady. Eastern 
and western dry whey prices increased at the top of the range while western 
prices also increased in the mostly price series. Demand is varied within 
the respective regions. Whey protein concentrate 34% prices are mixed, 
demand is robust, and buyers are looking for product. Lactose prices held 
steady this week. Overall demand has not lessened. Rennet and acid casein 
prices strengthened at each end of their price ranges.  
       ORGANIC DAIRY MARKET NEWS (DMN): AMS reports July 2016 total organic 
milk products sales at 196 million pounds, down 2.8% from the previous year. 
Sales are up 4.4%, January through July 2016, compared with the same months 
of 2015. July organic whole milk sales are 73 million pounds, up 6.4% from 
July last year. Year to date organic whole milk sales are up 14.9% compared 
to sales within the same period last year. In New England, During August, 
2016, organic whole milk utilization totaled 14.3 million pounds, up 32.8% 
from August 2015. The 2016 butterfat content was 3.29%, up from 3.27% in 
2015. Organic reduced fat milk utilization for August this year, 19.2 
million pounds, was down 4.9% from August last year. Butterfat this August 
was 1.26%, up from 1.16% last year. 
	AUGUST MILK PRODUCTION (NASS): Milk production in the 23 major States 
during August totaled 16.7 billion pounds, up 1.9 percent from August 2015. 
July revised production, at 16.9 billion pounds, was up 1.7 percent from 
July 2015. The July revision represented an increase of 48 million pounds or 
0.3 percent from last month's preliminary production estimate. Production 
per cow in the 23 major States averaged 1,920 pounds for August, 26 pounds 
above August 2015. This is the highest production per cow for the month of 
August since the 23 State series began in 2003. The number of milk cows on 
farms in the 23 major States was 8.68 million head, 43,000 head more than 
August 2015, and 15,000 head more than July 2016.
       AUGUST FEDERAL MILK ORDER MARKETING AND UTILIZATION SUMMARY (FMMO): 
During August, more than 9.559 billion pounds of milk were received from 
Federally pooled producers. This volume of milk is 3.4 percent lower than 
the August 2015 volume. Regulated handlers pooled 3.484 billion pounds of 
producer milk as Class I products, up 3.8 percent when compared to the 
previous year. Class I utilization increased from last year in 8 of the 10 
Federal Milk Order Marketing areas. The all-market average Class utilization 
percentages were: Class I = 36%, Class II = 18%, Class III = 32%, and Class 
IV = 14%. The weighted average statistical uniform price was $16.71 per cwt, 
up $0.93 from last month but down $0.03 from last year.
	OCTOBER FEDERAL ORDER ADVANCE PRICES (FMMO): Under the Federal milk 
order pricing system, the base Class I price for October 2016 is $16.60 per 
cwt. This price is derived from the advanced Class III skim milk pricing 
factor of $8.78 and the advanced butterfat pricing factor of $2.3223.  A 
Class I differential for each order's principle pricing point (county) is 
added to the base price to determine the Class I Price. The base Class I 
price increased $0.04 per cwt when compared to the previous month of 
September 2016.  For selected consumer products, the price changes are: 
whole milk (3.25% milk fat), $0.08 per cwt, $0.007 per gallon; reduced fat 
milk (2%), $0.29 per cwt, $0.025 per gallon; fat-free (skim milk), $0.53 per 
cwt, $0.046 per gallon. The advanced Class IV skim milk pricing factor is 
$6.44. Thus, the Class II skim milk price for October 2016 is $7.14 per cwt, 
and the Class II nonfat solids price is $0.7933. The two-week product price 
averages for October 2016 are: butter $2.0892, nonfat dry milk $0.8906, 
cheese $1.7758 and dry whey $0.3015.
       NATIONAL RETAIL REPORT (DMN): The national average price for 1 pound 
conventional butter is $3.19, while 1 pound organic butter is $5.15, an 
organic price premium of $1.96. Total conventional butter ads increased 26% 
while total organic butter ads decreased 1%. Advertisements for conventional 
ice cream in 48-64 ounce containers increased 33% and the national weighted 
average advertised price is $3.07. There are no ads for organic ice cream. 
Conventional Greek yogurt in 4-6 ounce containers have an average price of 
$0.94, while 4-6 ounce organic Greek yogurt averaged $1.15, an organic price 
premium of $.21. Conventional yogurt ads decreased 8% this week, while 
organic yogurt ads increased 36%. The U.S. advertised price for 8 ounce 
conventional cheese blocks averaged $2.18, while 8 ounce organic block 
cheese averaged $4.72, an organic price premium of $2.54. Ads for 
conventional 8 ounce shred cheese averaged $2.16 while 8 ounce organic shred 
cheese averaged $3.50, an organic price premium of $1.34. The number of 
conventional cheese ads is stable, while organic cheese ads increased 3% 
this week. The price premium of the organic half gallon milk price over the 
conventional half gallon milk price is $3.05. This represents the difference 
between the national weighted average price for organic, $4.15, and 
conventional, $1.10. Organic milk advertisements increased 1%, while ads for 
conventional milk increased 46%.
       
 

*****SPECIALS THIS ISSUE*****

ORGANIC DAIRY MARKET NEWS (PAGES 8-8A)
AUGUST MILK PRODUCTION (PAGE 9)
AUGUST MARKETING AND UTILIZATION SUMMARY (PAGE 10)
OCTOBER FEDERAL MILK ORDER ADVANCE PRICES (PAGE 11)
DAIRY GRAPHS (G1)
NATIONAL RETAIL REPORT-DAIRY 

1230CT Eric.graf@ams.usda.gov 608-557-7006 
USDA/AMS/Dairy Market News, Madison, Wisconsin 
Dairy Market News website: http://www.ams.usda.gov/market-news/dairy
Dairy Market News database portal: 
http://www.marketnews.usda.gov/mnp/da-home