MD_DA950

     Dairy Markets at a Glance

     Report 32 - Released on August 12, 2022

     CME GROUP CASH MARKETS (8/12)
     BUTTER: Grade AA closed at $2.9350. The weekly average for Grade AA is $2.9625 (-0.0655).
     CHEESE: Barrels closed at $1.8875 and 40# blocks at $1.8450. The weekly average for barrels
     is $1.8740 (+0.0550) and blocks, $1.8220 (-0.0050).
     NONFAT DRY MILK: Grade A closed at $1.5175. The weekly average for Grade A is $1.4945
     (-0.0900).
     DRY WHEY: Extra grade dry whey closed at $0.4450. The weekly average for dry whey is
     $0.4420 (+0.0100).
          CHEESE HIGHLIGHTS: Milk output is declining in the Northeast and West, but contacts in
     these regions say milk is available for cheese makers to run busy production schedules. In
     the Midwest, milk availability varies by location and timing. Cheese inventories are
     available for spot purchasing across all regions. Demand for cheese is softening from both
     retail and food service customers in the Northeast and West. In the Midwest, cheese demands
     have been varying from week to week, but stakeholders say they have been consistent this
     week. Some Midwestern cheese contacts say the drop in cheese prices in recent weeks has
     encouraged some increased purchasing, while others note that sales are seasonally slower.
          BUTTER HIGHLIGHTS: Cream supplies are tightening across the country. In the Northeast
     and West, high temperatures are contributing to reduced milk output and cream volumes. Some
     butter makers in the Northeast and West say higher cream multiples have made selling cream
     more advantageous than churning. Butter production is steady to lower in the Northeast and
     West. Labor shortages and high temperatures are contributing to some reduced butter making
     in the West. Micro-fixing has increased in the Central region, despite the increased number
     of employees required and staffing shortages at production facilities in the region. Demand
     for butter is trending higher in the Central region as some customers are preparing their
     fall inventories. In the Northeast, overall butter demand is stable. Some butter shoppers in
     the region say higher market prices have made them wary of taking on extra loads. Food
     service and retail demand for butter are declining in the West, though bulk butter demand is
     strong. Bulk butter overages range from 2 to 16 cents above market, across all regions.
          FLUID MILK: Throughout most of the country milk volumes are trending lower, following
     seasonal trends. Milk producers say high temperatures, high humidity, and dry weather are
     contributing to reduced output. Contacts report milk volumes are available to meet
     production needs in many areas. In some parts of the country, processors are sourcing loads
     of milk from outside of their immediate geographic area to meet their production needs.
     Class I demand is increasing in the East and Central regions, due to uptick in educational
     purchasing. In the West, demand for Class I is mixed, ranging from steady to increasing.
     Condensed skim inventories are tightening in the West amid strong demand from contract and
     spot purchasers. Meanwhile, demand for condensed skim is moderate in the East. Cream
     inventories are tightening. Contacts in the West report strong demand and declining
     production; some say they are selling cream due to high cream multiples and labor shortages.
     Ice cream makers continue to pull on cream supplies in the East and Midwest, though contacts
     in the latter say cream cheese producers are also having an impact on availability. Cream
     multiples for all Classes are 1.45 - 1.60 in the East, 1.30 - 1.55 in the Midwest, and 1.10
      - 1.41 in the West.
          DRY PRODUCTS: Prices for low/medium heat nonfat dry milk (NDM) fell across both the
     range and mostly price series in the West. The top of the low/medium heat range was
     unchanged in the East and Central regions, while all other price points moved lower. High
     heat NDM price changes matched low/medium heat in each region. Spot trading of low/medium
     heat was limited in the East and Central regions, and contacts in the West say demand is
     softening. Dry buttermilk prices slid lower across both the range and mostly price series in
     the West. In the East and Central regions prices held steady at the bottom of the range,
     while the top moved lower. A slow trading week for dry whole milk contributed to steady
     prices. Dry whey prices slid lower in the Northeast and West, while only the prices at the
     bottom of the range and top of the mostly price series declined in the Central region.
     Demand for dry whey is softening in the Northeast and Central regions. The price range for
     whey protein concentrate 34% held steady at the top while the bottom moved lower. Demands
     for WPC 34%, outside of infant formula and high value applications, is lackluster. The price
     range for lactose expanded this week, though market tones are steady. Prices for both acid
     and rennet casein are holding steady.

          ORGANIC DAIRY MARKET NEWS: Trading is moderate on very good demand for organic feed
     corn. The market shows bushels trading 16 cents higher delivered to the elevator. Forward
     contracts were for Q3 2022 through Q2 2023, with the bulk of the contracted volume to
     deliver Q4 2022. Meanwhile, total organic dairy retail advertisements decreased 9 percent
     from the previous retail survey report period. The volume of store ads are 16 percent
     higher than last year for this period, as the majority of ads this week resulted mostly from
     organic milk retail store promotions. Organic milk, in half gallon containers, had the
     largest volume of organic dairy ads by item, increasing promotions 57 percent over the
     previous week survey. Compared to the conventional half gallon milk weighted average
     advertised price of $1.95, the organic premium is $2.86, 21 cents higher than last week.
          NATIONAL RETAIL REPORT: Total conventional dairy ad totals are down 14 percent, while
     organic ads are down 9 percent. Conventional ice cream, in 48-to-64-ounce containers, is
     once again the top advertised dairy item this week. The national weighted average advertised
     price for conventional ice cream in 48-64-ounce containers is $3.48, up 21 cents. The
     number of total conventional cheese ads increased 8 percent this week. Conventional milk ads
     decreased by 68 percent, and organic ads declined by 24 percent from the previous week.
          JULY CONSUMER PRICE INDEX (BLS): The July CPI for all food is 308.5, up 10.9 percent
     from 2021. The dairy products index is 265.6, up 14.9 percent from a year ago. The following
     are the July, year to year percentage changes for selected products: fresh whole milk is
     +14.5; cheese, +12.6; and butter, +22.2.
          JULY PRODUCER PRICE INDEX (BLS): The July PPI for all food is 255.4, up 13.3 percent
     from 2021. The dairy products index is 254.5, up 21.0 percent from a year ago. The following
     are the July, year to year percentage changes for selected products: fresh whole milk,
     +24.3; cheese, +18.9; and butter, +72.6.


     Information for the period August 8 - 12, 2022, issued weekly

     Published by:
     Dairy Market News - Madison, WI
     MIKE BANDLI, (608)422-8592
     Email: mike.bandli@usda.gov

     Additional Dairy Market News Information:
     Dairy Market News (DMN) by Phone: (608)422-8602
     DMN Website: https://www.ams.usda.gov/market-news/dairy
     DMN MARS (My Market News): https://mymarketnews.ams.usda.gov